showa denko report 2016 · published responsible care report ★1998 established “our code of...

SHOWA DENKO REPORT

2016

A

B

For information on main Group companiesin Japan, please go to the followinghttp://www.sdk.co.jp/english/about/network/group.html

Kitakata PlantHigashinagahara Plant

Omachi PlantShiojiri Plant

Isesaki PlantChichibu PlantChiba PlantKawasaki PlantYokohama PlantOyama PlantOyama Plant (Nasu)

Tatsuno PlantSakai PlantHikone Plant

　　

Tokuyama Plant

Oita Complex

1

5

A

23

4

Business Development CenterProcess Solutions Center

B

Europe

F2 Chemicals LimitedSHOTIC Europa Industria de Aluminio Lda.Showa Denko Europe GmbH

North America

Showa Denko Carbon, Inc.Showa Aluminum Corporation of AmericaShowa Denko America, Inc.

East Asia

Shanghai Showa Chemicals Co., Ltd.Shanghai Showa Highpolymer Co., Ltd.Shanghai Showa Electronics Materials Co., Ltd.Shodex China Co., Ltd.Shanghai Showa Highpolymer Trading Co., Ltd.Zhejiag Quzhou JuhuaShowa Electoronic Chemical Materials Co., Ltd.Lianyungang Zaoling Abrasives Co., Ltd.Showa Denko Sichuan Carbon Inc.Showa Denko (Dalian) Co., Ltd.

Showa Denko Aluminum (Nantong) Co., Ltd.Ganzhou Zhaori Rare Earth New Materials Co., Ltd.SHOWA DENKO New Material (Zhuhai) CO.,LTD.Showa Denko (Shanghai) Co., Ltd.Showa Specialty Gas (Taiwan) Co., Ltd.Taiwan Showa Chemicals Manufacturing Co., Ltd.Showa Denko HD Trace corp.Taiwan Showa Denko Electronics Co., Ltd.Korea Showa Chemicals Co.

Southeast Asia

Showa Specialty Gas Singapore (Pte.) Ltd.SHOTIC (Singapore) Pte Ltd.Showa Denko HD Singapore Pte Ltd.Showa Denko Singapore (Pte)Ltd.P.T. Indonesia Chemical AluminaEternal Showa Highpolymer Co., Ltd.Showa Denko Rare-Earth Vietnam Co., Ltd.Hanacans JSCShowa Aluminum Manufacturing Philippines CorporationShowa Denko HD (Malaysia) Sdn.Bhd.SHOTIC MALAYSIA SDN. BHD.

HeadOffice

1 2 NagoyaBranch

3 OsakaBranch

4 FukuokaBranch

5 KawasakiOffice

Europe

Korea

ChinaTaiwan

SE.Asia

America

Overseas SitesSites in Japan

Business Sites

Business Development CenterA

Petrochemicals Chemicals Inorganics

Segments

An Overview of the Showa Denko Group

An Overview of the Showa Denko Group ( as of December 2015 )

Showa Denko K.K.13-9, Shiba Daimon 1-chome, Minato-ku, Tokyo 105-8518, Japan4810,561Sales 781billion yenOperating income 33.7billion yenNet income 1billion yen

Company nameHead office locationNumber of consolidated subsidiariesTotal number of employeeConsolidated business results

8SHOWA DENKO Report 2016

A

B






　　

Tokuyama Plant

Oita Complex

1

5

A

23

4


B

Europe


North America


East Asia



Southeast Asia


HeadOffice

1 2 NagoyaBranch

3 OsakaBranch

4 FukuokaBranch

5 KawasakiOffice

Europe

Korea

ChinaTaiwan

SE.Asia

America


Business Sites


Aluminum Electronics Advanced Battery Materials Department


SHOWA DENKO

Full ReportCSR REPORT 2016

★1969Oita Petrochemical Complex started commercial operation

◆1981Started aluminum can collection activities at certain plants

★1931Started manufacturing ammonium sulfate using domestic technology (Showa Fertilizers K.K.)

★1934Industrialized domestically produced aluminum (Nihon Iodine K.K.)

★1908Established Sobo Marine Products K.K.

★1926Established Nihon Iodine K.K.

●1937Established Riken Kohaku Kogyo K.K.

Electrochemical

★2012Established “Our Code of Conduct and Its Practical Guide”

★2013Our long history of aluminum can recycling activities received the “Minister of Economy, Trade and Industry's Prize” of the 3Rs (Reduce, Reuse, and Recycle) Promotion Merit Awards in FY 2013

★2014Resigned the amended Responsible Care Charter

★2014Received the Special Incentive Award of the “Ikumen Company Award 2014” sponsored by the Ministry of Health, Labour and Welfare

★2016Received the “Platinum Kurumin”

★1945Resumed production of ammonium sulfate fertilizer

●1951Achieved domestic production of synthetic resin emulsion

●1953Achieved domestic production of unsaturated polyester resin

●1965Achieved domestic production of vinyl ester resin

◆1969Showa Aluminum Can Corporation produced the �rst aluminum can in Japan

◆1981Developed the “Cojunal Method”, a high-purity aluminum re�ning method

微粉技術超高圧耐火材研削材

セラミックス

Carbide

黒鉛電極

Nitrolime

フェロアロイ

VGCF® （カーボンナノファイバー）リチウムイオン電池負極材

超硬質材料半導体研磨剤

磁石合金

黒鉛

レアアースメタル

アルミナ

水電解高圧技術

水素

塩素

アンモニア

肥料

石油化学高分子

触媒

酢酸類アリルエステル類

フェノール樹脂生分解プラスチック

BMCShodex®

アルミ高分子固体コンデンサ

アクリロニトリル

アミノ酸

農薬中間体農薬

ビタミン誘導体

有機合成

苛性ソーダ

ケミカルアルミナ

水酸化アルミニウム

ガリウムエピタキシャル成長化学蒸着

スパッタハードディスクメディア

LED

熱交換器アルミ缶コンデンサ用アルミ箔

圧延

押出

チタン

酸化チタン

ショウティック®

アルミニウムシリンダー

溶解鋳造アルミニウム溶融塩電解

医療用ガス

半導体向け特殊ガス

鋳鍛造

食塩電解

Product Technology Purchase or intermediate

The Showa Denko Group started its operations by focusing on the future possibilities of the electrochemical industry, which utilized one of Japan’s important resources: abundant water energy. Originating from electrochemistry, our Group’s technology further expanded to the �elds of inorganic chemistry, organic chemistry and metal materials. Today, the technology is being passed on to materials and components used in the information/communication industry and automotive industry, as well as a wide variety of products that are essential in everyday life.

Technology and products CSR Event

◆1986Started manufacture and sale of aluminum cylinders

◆1990Started company-wide aluminum can recycling activities

★1995Formulated “Responsible Care Action Guidelines”

★1997Published Responsible Care Report

★1998Established “Our Code of Conduct”

★1986 Acquired a graphite electrode business in the United States, and established Showa Denko Carbon, Inc.

★1988Expanded into the hard disk business

★◆2001Merged Showa Aluminum Corporation

★2009Established Advanced Battery Materials Department

★●2010Merged ShowaHighpolymer Co., Ltd.

★2003Started the business to recycl used plastic as material for ammonia at Kawasaki Plant

★2005Started mass production of perpendicular magnetic recording hard disks �rst in the world

★2009Started production of cooling devices for power control units

★◆2001With the merger with Showa Aluminum Corporation as the trigger, expanded aluminum can recycling activities to Showa Denko’s plants, o�ces and group companies

★2005Issued a CSR Report

★2005Signed the “RC Charter”

電気分解

ポリオレフィン

Electrical Furnaces

1908With the business on track under the spirit

of “tenacity and indomitability”, Established the

foundation of the Showa Denko

Group.

Deepened and further developed

business,

taking advantage of postwar

reconstruction and rapid growth

1945

Switched to energy-saving

products

after overcomingoil crises

1986

Expanded into the energy-saving and high value-adding

business in full-scale, through the fusion

of organic/inorganic and aluminum technologies.

2001

Engaged inShaping Ideas in

pursuit of evolving chemical company with individualized

products

through the fusion of organic /

inorganic and aluminum

technologies

2011

★2011Received the 43rd Ichimura Industrial Award for the “development of cooling devices for power control units”

★2013Our LED lighting equipment for plant growth received the “Nikkei Business Daily Merit Award” of the 2012 Nikkei Superior Products & Services Award

★2015Selected as one of the Thomson Reuters 2015 Top 100 Global Innovators

◆1921Established Takada Aluminum Equipment Manufacturing K.K.

★1928Established Showa Fertilizers K.K.

★1939Established Showa Denko K.K.

★ Showa Denko K.K. ◆ Showa Aluminum Corporation ● Showa Highpolymer Co., Ltd.

History of the Group

History of the GroupThe Showa Denko Group started its operations by focusing on the future possibilities of the electrochemical industry, which utilized one of Japan’s important resources: abundant water energy. Originating from electrochemistry, our Group’s technology further expanded to the fields of inorganic chemistry, organic chemistry and metal materials. Today, the technology is being passed on to materials and components used in the information/communication industry and automotive industry, as well as a wide variety of products that are essential in everyday life.









★2012Established “Our Code of Conduct and Its Practical Guide”★2013Our long history of aluminum can recycling activities received the “Minister of Economy, Trade and Industry's Prize” of the 3Rs (Reduce, Reuse, and Recycle) Promotion Merit Awards in FY 2013
































Group.


business,



1945


products


1986




2001



products



technologies

2011








Electrochemical

Extreme pressureRefractory materialsAbrasive grains

Ceramics

Carbide

Graphite electrodes

Nitrolime

Ferroalloys

VGCFTM (Carbon nanotube) SCMGTM

(Material for negative electrodesin lithium ion cells)

Super hard materials Abrasives for semiconductors

Magnet alloys

Graphite

Rare earth metal

Alumina

Waterelectrolysis

High-pressuretechnology

Hydrogen

Chlorine

Ammonia

Fertilizers

Petrochemical Highpolymer

Catalysts

Acetic acids Allylic esters

Phenol resin Biodegradable plastic

BMCShodexTM

Aluminum polymersolid condenser

Acrylonitrile

Amino acid

Agrochemicalintermediates

Agriculturalchemicals

Vitamin derivatives

Organicsynthesis

Caustic soda

Chemical alumina

Aluminum hydroxide

Gallium Epitaxial growth Chemical vapor deposition

Sputtering Hard disks

LED

Heat exchangersAluminum cansAluminum foilsfor capacitors

Rolling

Extrusion

Titanium

Titanium oxide

SHOTICTM

Aluminum cylinders

Melting and castingAluminumFused saltelectrolysis

Gases for medical use

Specialty gases forsemiconductors

Casting and forging

Salt electrolysis

ElectrolysisElectrical Furnaces

Technologies for making fine powder

Polyolefin


Showa Denko Group's Technological Lineage

9SHOWA DENKO CSR Report 2016

CONTENTSEditorial policies

This Report has been edited as an annual report on non-�nancial information, presenting e�orts by the Showa Denko Group to contribute to the environment and society. For detailed �nancial information, please refer to the Financial Results and Financial Statements. As for disclosure items, we analyzed our stakeholders' opinions and requests and covered priority topics, focusing on action policies and performance in 2015 and giving speci�c examples.

The online version of the report is also available with more details about the Showa Denko Group's CSR activities, including updated information and CSR reports from each plant.

Report scope

Period covered by this ReportThis Report covers information for the period January 1 to December 31, 2015, with some information also provided for 2016.

Organization covered“Showa Denko” as used in the text of this Report refers to Showa Denko K.K., while “Showa Denko Group” refers mainly to Showa Denko and its consolidated subsidiaries in Japan. The �nancial performance data provided herein are consolidated �gures for the Showa Denko Group; environmental performance data are for Showa Denko K.K.

Publication dateSeptember 2016(The next edition is scheduled for publication in August 2017.)

Guidelines/guidance referencedISO 26000:2010Sustainability Reporting Guidelines (Version 4) from the Global Reporting Initiative (GRI)

Environmental Reporting Guidelines 2012 from the Ministry of the Environment of Japan

Prepared byPublic Relation O�ce, Showa Denko K.K.

TEL ： +81-3-5470-3235

Website http://www.sdk.co.jp/english/csr.html

E-Mail [email protected]

The information comprehensively disclosed on the Web [Full Report] (PDF), is issued in PDF as an annual report. We take into consideration the readability, such as the layout at the time of printing, and each chapter can also be printed individually.

SHOWA DENKO CSR REPORT 2016on the Web [Full Report] (PDF)

SHOWA DENKO REPORT 2016We publish information focusing on the products, employee activities and the major topics of the period, in order to deepen the stakeholders' understanding about the Showa Denko Group.

This REPORT

SHOWA DENKO CSR REPORT 2016on the Web [Full Report] (HTML)The CSR measures of the Showa Denko Group are disclosed on our Web site. As well as focusing on the comprehensibility referring to various guidelines, we disseminate information with an improved quickness on the activities performed during the period.

18R&D of the Showa Denko Group

10Introduction of Businesses of the Group

8An Overview of the Showa Denko Group

6History of the Group

4Message from CEO

2Editorial policies / Report Scope

Creating New Value16Outline of the Medium-term Business Plan

CSR Strategy of Showa Denko 19

31Corporate Ethics and Compliance

32Corporate Governance

30Participation in Community Activities

Working Conditions, Social Protection,Complaint Settlement

29Creating a comfortable workplace

28Human Rights and Diversity

20Materiality Assessment

Responsible Care

24Equipment safety

25Promoting mental and physical health25Occupational Safety

Occupational Health and Safety

26Chemical Substances Safety

27Quality Assurance

Consumer Safety and Health Protection

Environmental Conservation21Global Warming Prevention Measures

22Environmental considerations ; Atmosphere, water and soil

23Reducing Industrial Waste

23Reducing Chemical Substance Discharge

Fair Business Practice and Customer Care34CSR procurement

34Protection of intellectual property

35Financial/Non-Financial Highlights

About the media to report our CSR informationFor the purpose of gaining the stakeholders’ understanding about the CSR measures of the Showa Denko Group, we designed the reports so that the disclosed information is easier to read and intelligible as much as possible, based on the opinions and requests of the stakeholders. We provide information through the following e-reports so that the media can be selected by the purpose of reading.


A

B






　　

Tokuyama Plant

Oita Complex

1

5

A

23

4


B

Europe


North America


East Asia



Southeast Asia


HeadOffice

1 2 NagoyaBranch

3 OsakaBranch

4 FukuokaBranch

5 KawasakiOffice

Europe

Korea

ChinaTaiwan

SE.Asia

America


Business Sites



Segments






A

B






　　

Tokuyama Plant

Oita Complex

1

5

A

23

4


B

Europe


North America


East Asia



Southeast Asia


HeadOffice

1 2 NagoyaBranch

3 OsakaBranch

4 FukuokaBranch

5 KawasakiOffice

Europe

Korea

ChinaTaiwan

SE.Asia

America


Business Sites




SHOWA DENKO

Full ReportCSR REPORT 2016








Electrochemical

★2012Established “Our Code of Conduct and Its Practical Guide”

★2013Our long history of aluminum can recycling activities received the “Minister of Economy, Trade and Industry's Prize” of the 3Rs (Reduce, Reuse, and Recycle) Promotion Merit Awards in FY 2013










微粉技術超高圧耐火材研削材

セラミックス

Carbide

黒鉛電極

Nitrolime

フェロアロイ

VGCF® （カーボンナノファイバー）リチウムイオン電池負極材

超硬質材料半導体研磨剤

磁石合金

黒鉛

レアアースメタル

アルミナ

水電解高圧技術

水素

塩素

アンモニア

肥料

石油化学高分子

触媒

酢酸類アリルエステル類

フェノール樹脂生分解プラスチック

BMCShodex®

アルミ高分子固体コンデンサ

アクリロニトリル

アミノ酸

農薬中間体農薬

ビタミン誘導体

有機合成

苛性ソーダ

ケミカルアルミナ

水酸化アルミニウム

ガリウムエピタキシャル成長化学蒸着

スパッタハードディスクメディア

LED

熱交換器アルミ缶コンデンサ用アルミ箔

圧延

押出

チタン

酸化チタン

ショウティック®

アルミニウムシリンダー

溶解鋳造アルミニウム溶融塩電解

医療用ガス

半導体向け特殊ガス

鋳鍛造

食塩電解




















電気分解

ポリオレフィン

Electrical Furnaces




Group.


business,



1945


products


1986




2001



products



technologies

2011









History of the GroupThe Showa Denko Group started its operations by focusing on the future possibilities of the electrochemical industry, which utilized one of Japan’s important resources: abundant water energy. Originating from electrochemistry, our Group’s technology further expanded to the fields of inorganic chemistry, organic chemistry and metal materials. Today, the technology is being passed on to materials and components used in the information/communication industry and automotive industry, as well as a wide variety of products that are essential in everyday life.









































Group.


business,



1945


products


1986




2001



products



technologies

2011








Electrochemical


Ceramics

Carbide

Graphite electrodes

Nitrolime

Ferroalloys




Magnet alloys

Graphite

Rare earth metal

Alumina

Waterelectrolysis


Hydrogen

Chlorine

Ammonia

Fertilizers


Catalysts



BMCShodexTM


Acrylonitrile

Amino acid



Vitamin derivatives

Organicsynthesis

Caustic soda

Chemical alumina

Aluminum hydroxide



LED


Rolling

Extrusion

Titanium

Titanium oxide

SHOTICTM

Aluminum cylinders




Casting and forging

Salt electrolysis



Polyolefin



9SHOWA DENKO CSR Report 2016

CONTENTSEditorial policies

This Report has been edited as an annual report on non-�nancial information, presenting e�orts by the Showa Denko Group to contribute to the environment and society. For detailed �nancial information, please refer to the Financial Results and Financial Statements. As for disclosure items, we analyzed our stakeholders' opinions and requests and covered priority topics, focusing on action policies and performance in 2015 and giving speci�c examples.

The online version of the report is also available with more details about the Showa Denko Group's CSR activities, including updated information and CSR reports from each plant.

Report scope

Period covered by this ReportThis Report covers information for the period January 1 to December 31, 2015, with some information also provided for 2016.

Organization covered“Showa Denko” as used in the text of this Report refers to Showa Denko K.K., while “Showa Denko Group” refers mainly to Showa Denko and its consolidated subsidiaries in Japan. The �nancial performance data provided herein are consolidated �gures for the Showa Denko Group; environmental performance data are for Showa Denko K.K.

Publication dateSeptember 2016(The next edition is scheduled for publication in August 2017.)

Guidelines/guidance referencedISO 26000:2010Sustainability Reporting Guidelines (Version 4) from the Global Reporting Initiative (GRI)

Environmental Reporting Guidelines 2012 from the Ministry of the Environment of Japan

Prepared byPublic Relation O�ce, Showa Denko K.K.

TEL ： +81-3-5470-3235

Website http://www.sdk.co.jp/english/csr.html

E-Mail [email protected]

The information comprehensively disclosed on the Web [Full Report] (PDF), is issued in PDF as an annual report. We take into consideration the readability, such as the layout at the time of printing, and each chapter can also be printed individually.

SHOWA DENKO CSR REPORT 2016on the Web [Full Report] (PDF)

SHOWA DENKO REPORT 2016We publish information focusing on the products, employee activities and the major topics of the period, in order to deepen the stakeholders' understanding about the Showa Denko Group.

This REPORT

SHOWA DENKO CSR REPORT 2016on the Web [Full Report] (HTML)The CSR measures of the Showa Denko Group are disclosed on our Web site. As well as focusing on the comprehensibility referring to various guidelines, we disseminate information with an improved quickness on the activities performed during the period.

18R&D of the Showa Denko Group

10Introduction of Businesses of the Group

8An Overview of the Showa Denko Group

6History of the Group

4Message from CEO

2Editorial policies / Report Scope

Creating New Value16Outline of the Medium-term Business Plan

CSR Strategy of Showa Denko 19

31Corporate Ethics and Compliance

32Corporate Governance

30Participation in Community Activities

Working Conditions, Social Protection,Complaint Settlement

29Creating a comfortable workplace

28Human Rights and Diversity

20Materiality Assessment

Responsible Care

24Equipment safety

25Promoting mental and physical health25Occupational Safety


26Chemical Substances Safety

27Quality Assurance


Environmental Conservation21Global Warming Prevention Measures

22Environmental considerations ; Atmosphere, water and soil

23Reducing Industrial Waste

23Reducing Chemical Substance Discharge

Fair Business Practice and Customer Care34CSR procurement

34Protection of intellectual property

35Financial/Non-Financial Highlights

About the media to report our CSR informationFor the purpose of gaining the stakeholders’ understanding about the CSR measures of the Showa Denko Group, we designed the reports so that the disclosed information is easier to read and intelligible as much as possible, based on the opinions and requests of the stakeholders. We provide information through the following e-reports so that the media can be selected by the purpose of reading.


TOP MESSAGE

Let each of us PLUS new value to everyday life and society

Our future vision for 2025

“How do we want to develop the Showa Denko Group over the next 10 years? What is the ideal corporate group we aim to achieve?” These are the questions I was constantly asking the Company’s officers and other members of the senior management team while formulating the new medium-term consolidated business plan, which started in 2016.During the five years from 2011 through 2015, the Group pushed ahead with the medium-term consolidated business plan “PEGASUS” (and with “PEGASUS Phase II” for the last two years), with the aim of strengthening its presence in the global market as an “individualized chemical company” like no other. Soon after the plan was launched, however, the Great East Japan Earthquake struck, and was followed by skyrocketing electricity prices, substantial price fluctuations in raw naphtha and aluminum metal, and oversupply of steel in China, among others. These drastic changes in our surrounding business environment compelled us, right while we were working on expanding our business overseas, to also focus on measures to consolidate our existing business foundation, such as strengthening our competitiveness in Japan and concentrating resources on our core businesses.The measures we implemented up until last year proved successful. However, to ensure the sustainable development of the Group, we need more outward measures. We cannot win the fierce global competition if we continue to focus only on consolidating our foothold. Sustainable growth can be achieved only if we “look ahead, up and outward (to our markets).”

Our role in society

The world is experiencing dramatic transformations such as those wrought by climate change, the depletion of natural resources, changing demographics, rapid urbanization, the multi-polarization of the global economy, substantial technological advances, and the changing feedstock and energy resources market.Many of the products made by the Group are basic products and materials used in the upstream stage in the supply chain

of consumer end-products. As such, although our products go largely unnoticed by consumers, they are nevertheless indispensable products that underpin the infrastructure of our society, and we are responsible for supplying these products to our customers in a stable manner. To contribute to solving global social issues, we need to adopt a “market-oriented” approach in order to create products based on the needs of customers and offer solutions that go beyond mere products.To this end, we have made clear in the new “Project 2020+” medium-term business plan that we will offer high value-added products, technologies, and services for five particular market domains—namely, Infrastructure, Energy, Mobility, Living environment, and Electronics. This is the role that we need to fulfill to help solve global social issues.By strengthening the revenue base of the diverse businesses of the Group, as well as by expanding its “individualized businesses,” that is, those that maintain high-level profitability and stability, we aim to become a corporate group that will consistently lead the market under the increasingly fierce international competition while contributing greatly to society.

Our CSR under “Project 2020+”

The social responsibility that we at the Showa Denko Group must fulfill is, as declared in Our Vision, to “provide products and services that are useful and safe and exceed our customers’ expectations, thereby enhancing the value of the Group, giving satisfaction to our shareholders, and contributing to the sound growth of international society as a responsible corporate citizen.” Furthermore, under this same vision, we must act with firm integrity based on Our Code of Conduct and contribute to the sound growth of society through our business activities. For the three years to 2018, we will focus on the following three CSR policies: realizing safe and stable operations as well as sustainable development; ensuring strict compliance with legislation and observing social and corporate ethical norms; and promoting dialogue with stakeholders. We have set targets for each of these policies, which we seek to achieve within the three years, and included the targets in our important performance evaluation metrics.


President and Chief ExecutiveOfficer of Showa Denko K.K.

CSR is an integral part of our business activities and constitutes a core issue of the management of the Group. While conducting business activities in consideration of the environment is, needless to say, important, providing products, technologies and services that meet the needs and win the trust of customers and society is just as crucial.We also need to develop and improve various management frameworks within the Group such as those for corporate governance, compliance, and diversity promotion. Furthermore, 14 issues that have both particular importance for the Group’s business and significant impacts for stakeholders have been selected as materiality issues. We will work even harder to put CSR into practice with particular focus placed on the 14 materiality issues at all times.

Sharing a common enthusiasm throughout the Group

To realize the targets of “Project 2020+” and our future vision for 2025, it is essential that all employees across the Group work together in a unified manner. For this reason, we have set the following five priority actions that all Group employees are expected to engage in:

ImaginationEnvision a dream and pursue a better tomorrow.

InnovationAnticipate changes in the market and take on the challenge of innovation.

Self-relianceAim high and act independently.

InvestigationLook at the reality and root causes of failures to �nd keys to success.

CooperationRecognize and cooperate with each other in building a future.

We will promote these five common actions among employees so that we can all work together and share the unyielding enthusiasm that has been passed down in our corporate DNA since the foundation of the Group to materialize our vision for 2025.

Shaping the future

The Showa Denko Group’s goal for 2025 is to become “a company contributing to the sound growth of society,” which makes the dreams of humankind a reality through innovation in chemical technology and contributes toward creating a society that is both prosperous and sustainable. To achieve this goal and realize a sustainable future, each of us at the Group will continue adding new value.Please let us invite your attention to the Group's business and social activities in the future.

Hideo Ichikawa







































of “tenacity and indomitability”, established the


Group.


business,



1945


products


1986




2001



products



technologies

2011








Electrochemical


Ceramics

Carbide

Graphite electrodes

Nitrolime

Ferroalloys




Magnet alloys

Graphite

Rare earth metal

Alumina

Waterelectrolysis


Hydrogen

Chlorine

Ammonia

Fertilizers


Catalysts



BMCShodexTM


Acrylonitrile

Amino acid



Vitamin derivatives

Organicsynthesis

Caustic soda

Chemical alumina

Aluminum hydroxide



LED


Rolling

Extrusion

Titanium

Titanium oxide

SHOTICTM

Aluminum cylinders




Casting and forging

Salt electrolysis



Polyolefin


History of the GroupThe Showa Denko Group started its business operations by focusing on the bright future of the electrochemical industry, which utilized one of Japan’s important resources: abundant water energy. Originating from electrochemistry, our Group’s technology further evolved to cover the fields of inorganic chemistry, organic chemistry and metal materials. Today, the gene of our original technology is inherited to a wide variety of products that are essential in everyday life, including materials and components used in the information/ telecommunication industry and the automotive industry.







































of “tenacity and indomitability”, established the


Group.


business,



1945


products


1986




2001



products



technologies

2011








Electrochemical


Ceramics

Carbide

Graphite electrodes

Nitrolime

Ferroalloys




Magnet alloys

Graphite

Rare earth metal

Alumina

Waterelectrolysis


Hydrogen

Chlorine

Ammonia

Fertilizers


Catalysts



BMCShodexTM


Acrylonitrile

Amino acid



Vitamin derivatives

Organicsynthesis

Caustic soda

Chemical alumina

Aluminum hydroxide



LED


Rolling

Extrusion

Titanium

Titanium oxide

SHOTICTM

Aluminum cylinders




Casting and forging

Salt electrolysis



Polyolefin



A

B






　　

Tokuyama Plant

Oita Complex

1

5

A

23

4


B

Europe


North America


East Asia


Showa Denko Aluminum (Nantong) Co., Ltd.Ganzhou Zhaori Rare Earth New Materials Co., Ltd.SHOWA DENKO New Material (Zhuhai) Co.,Ltd.Showa Denko (Shanghai) Co., Ltd.Showa Specialty Gas (Taiwan) Co., Ltd.Taiwan Showa Chemicals Manufacturing Co., Ltd.Showa Denko HD Trace corp.Taiwan Showa Denko Electronics Co., Ltd.Korea Showa Chemicals Co.

Southeast Asia

Showa Specialty Gas Singapore (Pte.) Ltd.SHOTIC (Singapore) Pte Ltd.Showa Denko HD Singapore Pte Ltd.Showa Denko Singapore (Pte)Ltd.Showa Highpolymer Singapore Pte.Ltd.P.T. Indonesia Chemical AluminaEternal Showa Highpolymer Co., Ltd.Showa Denko Rare-Earth Vietnam Co., Ltd.Hanacans JSCShowa Aluminum Manufacturing Philippines CorporationShowa Denko HD (Malaysia) Sdn.Bhd.SHOTIC MALAYSIA Sdn.Bhd.

HeadOffice

1 2 NagoyaBranch

3 OsakaBranch

4 FukuokaBranch

5 KawasakiOffice

Europe

Korea

ChinaTaiwan

SE.Asia

America


Business Sites



Segments






A

B






　　

Tokuyama Plant

Oita Complex

1

5

A

23

4


B

Europe


North America


East Asia


Showa Denko Aluminum (Nantong) Co., Ltd.Ganzhou Zhaori Rare Earth New Materials Co., Ltd.SHOWA DENKO New Material (Zhuhai) Co.,Ltd.Showa Denko (Shanghai) Co., Ltd.Showa Specialty Gas (Taiwan) Co., Ltd.Taiwan Showa Chemicals Manufacturing Co., Ltd.Showa Denko HD Trace corp.Taiwan Showa Denko Electronics Co., Ltd.Korea Showa Chemicals Co.

Southeast Asia

Showa Specialty Gas Singapore (Pte.) Ltd.SHOTIC (Singapore) Pte Ltd.Showa Denko HD Singapore Pte Ltd.Showa Denko Singapore (Pte)Ltd.Showa Highpolymer Singapore Pte.Ltd.P.T. Indonesia Chemical AluminaEternal Showa Highpolymer Co., Ltd.Showa Denko Rare-Earth Vietnam Co., Ltd.Hanacans JSCShowa Aluminum Manufacturing Philippines CorporationShowa Denko HD (Malaysia) Sdn.Bhd.SHOTIC MALAYSIA Sdn.Bhd.

HeadOffice

1 2 NagoyaBranch

3 OsakaBranch

4 FukuokaBranch

5 KawasakiOffice

Europe

Korea

ChinaTaiwan

SE.Asia

America


Business Sites




EthyleneWe contribute to e�ective use of resources and high cost competitiveness by not relying solely on naphtha (raw material diversi�cation) to produce ethylene, which is widely used to produce various petrochemicals.

n-Propyl acetate (NPAC)Demand for NPAC, which is used as a solvent for special gravure printing ink, has been increasing as an environment-friendly substitute for the currently popular toluene.

Heat-resistant transparent �lmShowa Denko has developed SHORAYALTM �lm, achieving both high transparency and heat resistance. It is being marketed as glass-substitute product for use in displays such as touch screens and LCDs.

Allyl alcoholAllyl alcohol is used as raw material for wide-ranging products such as allyl ester used for eyeglass lenses, epichlorohydrin, surfactants, and aroma chemicals.

BionolleTM

"BionolleTM ,” a biodegradable plastic, is environment-friendly plastic that can be degraded into water and carbon dioxide by microorganisms after use. We are aiming to make this product even more environment-friendly by switching over to plant derived ingredients.

Unsaturated polyester resinRigolac™, unsaturated polyester resin that meets requirements for a lightweight material with high durability and high corrosion resistance, is used for a wide range of applications including automotive components, home appliances, and ocean development.

Carbon dioxideand dry iceShowa Denko Gas Products Co., Ltd. contributes to securing safety and stable supply of food resources by supplying carbon dioxide mainly for carbonated beverages and dry ice for cooling.

Electronic specialty gasesElectronic specialty gases are used in production processes for electronic components such as semiconductors, LCD panels, LEDs, and solar cells. Showa Denko manufactures dozens of these high-purity gases including hydrogen, ammonia, chlorine, and �uorine-containing gases.

Petrochemicals Division (Ole�ns Department, Organic Chemicals Department)Petrochemicals ChemicalsThe Chemicals segment provides wide-ranging products, from industrial gases, industrial chemicals, high-performance chemicals, and elastomers, to electronic specialty gases and chemicals for the semiconductor industry, resins for reinforced plastics, biodegradable resins, HPLC columns and raw materials for cosmetics.

Industrial Gases Division, Basic Chemicals Division (Ammonia & Derivatives Department, Soda & Derivatives Department), Electronic Chemicals Division, Functional Chemicals Division (Functional Polymers Department, Specialty Chemicals Department)

The Petrochemicals segment provides basic petrochemicals including ethylene and propylene, and organic chemicals derived from them, including acetyls and allyl alcohol derivatives.

Introduction of Businesses of the Group

Showa Denko and KBR sign multi-technology acetyls licensing agreement

Showa Denko K.K. concluded a business alliance agreement with KBR, Inc., an engineering company headquartered in Texas, to cooperatively market our proprietary technologies to produce acetic acid and its derivatives (acetyls).KBR is an engineering company with excellent track record of technology licensing in the field of production process including that of petrochemical plant. Through this agreement, we seek more opportunities to license our proprietary

technologies through KBR’s sales network, and further improve our technologies to produce acetyls. With unique innovative technologies developed over many years and long-refined production processes and know-how for stable and safe operations, we will continue contributing to the development of the petrochemical industry.


EthyleneWe contribute to e�ective use of resources and high cost competitiveness by not relying solely on naphtha (raw material diversi�cation) to produce ethylene, which is widely used to produce various petrochemicals.

n-Propyl acetate (NPAC)Demand for NPAC, which is used as a solvent for special gravure printing ink, has been increasing as an environment-friendly substitute for the currently popular toluene.

Heat-resistant transparent �lmShowa Denko has developed SHORAYALTM �lm, achieving both high transparency and heat resistance. It is being marketed as glass-substitute product for use in displays such as touch screens and LCDs.

Allyl alcoholAllyl alcohol is used as raw material for wide-ranging products such as allyl ester used for eyeglass lenses, epichlorohydrin, surfactants, and aroma chemicals.

BionolleTM

"BionolleTM ,” a biodegradable plastic, is environment-friendly plastic that can be degraded into water and carbon dioxide by microorganisms after use. We are aiming to make this product even more environment-friendly by switching over to plant derived ingredients.

Unsaturated polyester resinRigolac™, unsaturated polyester resin that meets requirements for a lightweight material with high durability and high corrosion resistance, is used for a wide range of applications including automotive components, home appliances, and ocean development.

Carbon dioxideand dry iceShowa Denko Gas Products Co., Ltd. contributes to securing safety and stable supply of food resources by supplying carbon dioxide mainly for carbonated beverages and dry ice for cooling.

Electronic specialty gasesElectronic specialty gases are used in production processes for electronic components such as semiconductors, LCD panels, LEDs, and solar cells. Showa Denko manufactures dozens of these high-purity gases including hydrogen, ammonia, chlorine, and �uorine-containing gases.

Petrochemicals Division (Ole�ns Department, Organic Chemicals Department)Petrochemicals ChemicalsThe Chemicals segment provides wide-ranging products, from industrial gases, industrial chemicals, high-performance chemicals, and elastomers, to electronic specialty gases and chemicals for the semiconductor industry, resins for reinforced plastics, biodegradable resins, HPLC columns and raw materials for cosmetics.

Industrial Gases Division, Basic Chemicals Division (Ammonia & Derivatives Department, Soda & Derivatives Department), Electronic Chemicals Division, Functional Chemicals Division (Functional Polymers Department, Specialty Chemicals Department)

The Petrochemicals segment provides basic petrochemicals including ethylene and propylene, and organic chemicals derived from them, including acetyls and allyl alcohol derivatives.

Showa Denko and Kawasaki City signed an agreement in July 2015 to cooperate on the creation of a low-carbon, hydrogen-based community where low-carbon hydrogen energy derived from used plastic will be utilized to reduce environmental burden.Under this agreement, Showa Denko and Kawasaki City will jointly verify technologies that convert hydrogen produced from used plastic and transported via pipeline to users in the city’s

coastal areas into electricity using a pure hydrogen fuel cell system. Aimed at verifying the hydrogen energy integrated system, this project is based on Showa Denko’s plan for the local production and consumption of low-carbon hydrogen derived from used plastic, which was selected by the Ministry of the Environment as a Regional Partnership/Low-Carbon Hydrogen Supply Chain Demonstration Project for Fiscal 2015.

Showa Denko and Kawasaki City agree to cooperate for the creation of a low-carbon, hydrogen-based community


CBN (cubic boron nitride)With a hardness coming second only to diamond, CBN is used for tools to cut automotive and other components.

AluminaAlumina is widely used among various industries, for purposes such as ceramics, �llers for plastics, refractories, and abrasives.

Graphite electrodesGraphite electrodes contribute to iron and steel recycling as a component to melt iron and steel scraps in electric steel furnaces. Our graphite electrodes are rated very highly by customers throughout the world due to their excellent quality.

Ceramics for capacitorsSUPER-TITANIATM high-purity titanium oxide is used as one of the main materials in ceramic capacitors installed in familiar electronic and electrical devices.

Cooling devices We provide oil coolers, heat sinks and other heat exchangers for industrial equipment, as well as cooling devices for hybrid car power control units.

Continuously-cast aluminum-alloy rods and their forgingsWe produce “SHOTIC™” continuously-cast aluminum-alloy rods having �ne metallurgical structure and their forgings for use including automotive compressor components and engine pistons.

High-purity aluminum foilHigh-purity aluminum foil is a key material in electronic components essential to IT devices, home electric appliances, and automobiles. High-purity aluminum foil for electrolytic capacitors is produced through precise control of purity and manufacturing processes.

Aluminum cylinders for laser beam printersAluminum cylinders with excellent surface quality for use as photoconductor drums of laser beam printers. Their demand has been growing due to evolution of color printing.

Ceramics Division, Carbons DivisionInorganicsThe Inorganics segment provides ceramic products such as alumina, polishing materials, abrasives, and refractories; photocatalysts; graphite electrodes for electric steel-making furnaces; and high-performance carbon products.

Aluminum Rolled Products Division, Aluminum Specialty Components Division, Aluminum Can DivisionAluminumThe Aluminum segment provides aluminum materials including rolled, extruded and forged products; and various high-value-added fabricated aluminum products such as high-purity aluminum foil for capacitors, aluminum cylinders for laser beam printers, radiators for power devices installed in hybrid cars and other vehicles, and aluminum cans for beverages.

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Increased applications for visible-light-sensitive photocatalyst LUMI-RESHTM

LUMI-RESHTM, a visible-light-sensitive photocatalyst developed and produced by Showa Denko Ceramics Co., Ltd, is activated even by indoor low-energy lighting such as fluorescent lights and LEDs to make coated surfaces bacteria- and virus-resistant.A photocatalyst is a material that generates catalyst activity using energy from light to decompose organic dirt and inactivate surface bacteria. However,

conventional photocatalysts are activated only when exposed to ultraviolet rays in sunlight or other light sources.The Showa Denko Group will continue developing applications for LUMI-RESHTM in cooperation with customers as well as further improving its quality to help make everyday life safer and healthier.


CBN (cubic boron nitride)With a hardness coming second only to diamond, CBN is used for tools to cut automotive and other components.

AluminaAlumina is widely used among various industries, for purposes such as ceramics, �llers for plastics, refractories, and abrasives.

Graphite electrodesGraphite electrodes contribute to iron and steel recycling as a component to melt iron and steel scraps in electric steel furnaces. Our graphite electrodes are rated very highly by customers throughout the world due to their excellent quality.

Ceramics for capacitorsSUPER-TITANIATM high-purity titanium oxide is used as one of the main materials in ceramic capacitors installed in familiar electronic and electrical devices.

Cooling devices We provide oil coolers, heat sinks and other heat exchangers for industrial equipment, as well as cooling devices for hybrid car power control units.

Continuously-cast aluminum-alloy rods and their forgingsWe produce “SHOTIC™” continuously-cast aluminum-alloy rods having �ne metallurgical structure and their forgings for use including automotive compressor components and engine pistons.

High-purity aluminum foilHigh-purity aluminum foil is a key material in electronic components essential to IT devices, home electric appliances, and automobiles. High-purity aluminum foil for electrolytic capacitors is produced through precise control of purity and manufacturing processes.

Aluminum cylinders for laser beam printersAluminum cylinders with excellent surface quality for use as photoconductor drums of laser beam printers. Their demand has been growing due to evolution of color printing.

Ceramics Division, Carbons DivisionInorganicsThe Inorganics segment provides ceramic products such as alumina, polishing materials, abrasives, and refractories; photocatalysts; graphite electrodes for electric steel-making furnaces; and high-performance carbon products.

Aluminum Rolled Products Division, Aluminum Specialty Components Division, Aluminum Can DivisionAluminumThe Aluminum segment provides aluminum materials including rolled, extruded and forged products; and various high-value-added fabricated aluminum products such as high-purity aluminum foil for capacitors, aluminum cylinders for laser beam printers, radiators for power devices installed in hybrid cars and other vehicles, and aluminum cans for beverages.

Showa Aluminum Can Corporation started shipment of two-piece aluminum cans for coffee beverages to beverage manufacturers in January 2015 from a new production facility built specifically for the coffee cans at the subsidiary’s Oyama Plant in Tochigi Prefecture. In Japan, where the coffee can market has a volume of around 10 billion cans per annum, most of those cans were previously made of steel. However, the trade guidelines were amended

in August 2014, allowing the two-piece aluminum cans previously permitted only to be used for black coffee beverages to be employed for coffee-with-milk products as well. Aluminum cans are lighter and more recyclable than steel cans and are expected to be used more widely as environment-friendly containers.

Showa Aluminum Can starts shipment of aluminum cans for coffee-with-milk beverages


LEDIn addition to a broad lineup of infrared LED chips used as light sources for optical sensors for various applications, we also o�er high-output red LED chips optimized speci�cally for plant growth.

Rare earthsThe demand for rare earth magnet alloy is growing in �elds such as drive motors for hybrid cars and energy e�cient home electric appliances. We are not only diversifying procurement sources of rare earths and expanding production of rare earth magnet alloys, but also strengthening development of next-generation magnet alloys with decreased rare-earth content.

SiC epitaxial wafers SiC epitaxial wafers are materials used for next-generation power devices, which are expected to attain further energy conservation. They have already been introduced to power supplies for servers in datacenters and power devices for railway vehicles.

ESPACER™ESPACER™ is a material to form charge-up-resistant �lm, consisting mostly of electroconductive polymer. The electron-conducting coating �lm contributes to solution of issues resulting from charge accumulation during charged particle radiation processes such as electron beam lithography.

Lithium-ion battery materialsFor the lithium-ion battery market, we o�er a variety of items, including SCMGTM long-life anode material, VGCFTM unique anode and cathode additive featuring high stability and quality, SDXTM low-resistance carbon-coated aluminum foil used as a cathode collector, and SPALFTM aluminum laminated �lm produced and marketed by Showa Denko Packaging Co.,Ltd.

Carbon-resin composite battery componentsWe develop carbon-resin composite components and platinum-alternative catalysts used for fuel cells, redox �ow cells, air batteries, and other next-generation batteries by leveraging our carbon-resin composition and molding and surface treatment technologies.

E-POLE lighting systemE-POLE, produced and marketed by Showa Denko Aluminum Trading K.K., stores electricity generated by its photovoltaic cells during the day and uses it to power its LED lamps at night. The system is capable of providing illumination for three to four days continuously even under low light and cloudy conditions.

Obsidian perlite Obsidian perlite produced by Fuyo Perlite Co., Ltd. is a natural material made of burned obsidian, used as lightweight aggregate (speci�c gravity: 0.1) to construct a comfortable living environment. It is also utilized as a soil conditioner for rooftop gardening and landscaping, as well as material for responding to environment-related issues such as industrial-wastewater/oil-spill accidents.

Molecular sieveMolecular sieve (synthetic zeolite) of Union Showa K.K. is widely used for drying of coolant for car air conditioners, elimination of moisture, impurities and harmful substances during production processes at plants, and as solutions for environmental issues (such as elimination of VOCs and treatment of contaminated water at the nuclear power plant in Fukushima).

Sound-insulating �reproof dual-layer pipe“Showa Sound Insulating FDP,” produced and sold by Showa Denko Kenzai K.K., is a high-value-added drain riser adopted by numerous condominiums, hotels and hospitals, featuring superior sound insulation, compact size, �re resistance and ease of construction.

Electronics Materials Division, HD DivisionElectronicsThe Electronics segment provides compound semiconductor materials for ultrabright and high-output LEDs; rare earth magnetic alloys for high-performance motors; and HD media with high storage capacity for use in PCs, consumer electronics such as DVD recorders and game machines, and servers for data centers.

Advanced Battery Materials Department ABM Department provides lithium-ion battery materials including anode materials, aluminum laminate �lm, and conductive additives; and fuel-cell components such as carbon-based separators. The Department develops new materials for battery applications, where technological innovation is going on.

Related BusinessesWe manufacture and sell a wide variety of chemicals, light metals, and construction/engineering materials.


As the world’s largest independent HD media supplier with a market share of about 25%, SDK has been speedily launching highest-level-capacity HD media. HD media are key components of HDDs, significantly influencing their storage capacity.SDK announces that its HD media have been adopted in helium-filled 10 terabyte hard disk drives (HDDs), which represent the world’s highest storage capacity. Compared with unsealed PMR HDDs, helium-filled HDDs help reduce power consumption. Thus, helium-

filled HDDs will be used more and more in data centers, which are increasing in number.

SDK’s Media Now Used in World’s-Highest-Capacity 10TB HDD

NoteAs of December 2015, according to our research.


LEDIn addition to a broad lineup of infrared LED chips used as light sources for optical sensors for various applications, we also o�er high-output red LED chips optimized speci�cally for plant growth.

Rare earthsThe demand for rare earth magnet alloy is growing in �elds such as drive motors for hybrid cars and energy e�cient home electric appliances. We are not only diversifying procurement sources of rare earths and expanding production of rare earth magnet alloys, but also strengthening development of next-generation magnet alloys with decreased rare-earth content.

SiC epitaxial wafers SiC epitaxial wafers are materials used for next-generation power devices, which are expected to attain further energy conservation. They have already been introduced to power supplies for servers in datacenters and power devices for railway vehicles.

ESPACER™ESPACER™ is a material to form charge-up-resistant �lm, consisting mostly of electroconductive polymer. The electron-conducting coating �lm contributes to solution of issues resulting from charge accumulation during charged particle radiation processes such as electron beam lithography.

Lithium-ion battery materialsFor the lithium-ion battery market, we o�er a variety of items, including SCMGTM long-life anode material, VGCFTM unique anode and cathode additive featuring high stability and quality, SDXTM low-resistance carbon-coated aluminum foil used as a cathode collector, and SPALFTM aluminum laminated �lm produced and marketed by Showa Denko Packaging Co.,Ltd.

Carbon-resin composite battery componentsWe develop carbon-resin composite components and platinum-alternative catalysts used for fuel cells, redox �ow cells, air batteries, and other next-generation batteries by leveraging our carbon-resin composition and molding and surface treatment technologies.

E-POLE lighting systemE-POLE, produced and marketed by Showa Denko Aluminum Trading K.K., stores electricity generated by its photovoltaic cells during the day and uses it to power its LED lamps at night. The system is capable of providing illumination for three to four days continuously even under low light and cloudy conditions.

Obsidian perlite Obsidian perlite produced by Fuyo Perlite Co., Ltd. is a natural material made of burned obsidian, used as lightweight aggregate (speci�c gravity: 0.1) to construct a comfortable living environment. It is also utilized as a soil conditioner for rooftop gardening and landscaping, as well as material for responding to environment-related issues such as industrial-wastewater/oil-spill accidents.

Molecular sieveMolecular sieve (synthetic zeolite) of Union Showa K.K. is widely used for drying of coolant for car air conditioners, elimination of moisture, impurities and harmful substances during production processes at plants, and as solutions for environmental issues (such as elimination of VOCs and treatment of contaminated water at the nuclear power plant in Fukushima).

Sound-insulating �reproof dual-layer pipe“Showa Sound Insulating FDP,” produced and sold by Showa Denko Kenzai K.K., is a high-value-added drain riser adopted by numerous condominiums, hotels and hospitals, featuring superior sound insulation, compact size, �re resistance and ease of construction.

Electronics Materials Division, HD DivisionElectronicsThe Electronics segment provides compound semiconductor materials for ultrabright and high-output LEDs; rare earth magnetic alloys for high-performance motors; and HD media with high storage capacity for use in PCs, consumer electronics such as DVD recorders and game machines, and servers for data centers.

Advanced Battery Materials Department ABM Department provides lithium-ion battery materials including anode materials, aluminum laminate �lm, and conductive additives; and fuel-cell components such as carbon-based separators. The Department develops new materials for battery applications, where technological innovation is going on.

Related BusinessesWe manufacture and sell a wide variety of chemicals, light metals, and construction/engineering materials.

Tab-leadless LIBs

Technologies for reducing weight and increasing the capacity of batteries and capacitorsShowa Denko Packaging Co.,Ltd. has developed new aluminum laminate films for laminated lithium-ion battery (LIB) packages, which help to reduce the size and weight of LIBs.

1. Tab-leadless LIBs (by giving electroconductivity to laminated films)The ability to charge and discharge LIBs is bestowed upon laminated film itself by surfacing one side with a cathodic/anodic metal layer, thus eliminating the need to use tab-leads (which have traditionally been welded to the anode and cathode to transport electrical energy collected by current collectors to external circuits). This technology enables downsizing and weight reduction of laminated LIBs.

2. Ultra-thin LIBs (by integrating electrodes with laminated films)Ultra-thin LIB is made by applying cathode/anode active materials on the surfaces of the abovementioned new laminates with cathodic/anodic structure, and enclosing electrolyte and separators between these laminated films. By eliminating conventional cathodic/anodic-metal layers, this ultra-thin LIB structure makes it possible to manufacture LIBs and capacitors with thickness of about 100μm, which is less than 50% of conventional ones.


Creating New Value

Mobility

Safety/SecurityEnhanced durabilityEmission controlImproving fuel e�ciency

Safety/SecurityIndustrialization

of agriculture

Intensive accumulationand dispatch of

information

Improving resource e�ciencyUtilizing alternative energyE�cient use of electricityDiversifying energy sources

Infra-structure

Energy

ElectronicsMitigating environmentalburdenResource recycling

We o�er high value-adding “products × technology × services” to 5 market domains

Livingenvironment

Shaping the FutureThis section outlines our Medium-term Business Plan, “Project 2020+,” which was launched at the beginning of this year.

Outline of the Medium-term Business Plan

Our commitment to the realization of a sustainable future

What is the most important change compared with the previous medium-term business plans?

We have identified five market domains in which the Group’s products, technologies and services will be offered: namely, Infrastructure, Energy, Mobility, Living environment, and Electronics.The Showa Denko Group has traditionally engaged in business based simply on a “product-oriented” approach. However, we believe that a more “market-oriented” approach—creating products to suit the needs of the market or customers—is essential. To realize this, we need to change our product development in such a way that will fit the needs of the five market domains.This will deepen and broaden the product development of the Showa Denko Group and lead to establishing a business structure where revenue fluctuations are minimized as the impact of market conditions are likewise minimized.

What is the future vision the Showa Denko Group aims to achieve?

Regarding the vision in terms of the sales composition we aim to achieve by 2025, we will increase the contribution of our “individualized businesses” to net sales from the current 30% to 50% of the Group’s sales. We will also increase the share of overseas net sales from the current 40% to 60% to enhance profitability and reduce fluctuations. We will set a course to achieve these targets during the next five years under the current medium-term business plan.

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How is the plan related to the issues of materiality?

The issues of materiality selected in July last year and the issues cited as important by stakeholders during the materiality assessment match the medium- to long-term business issues dealt with in the plan. Our aim is to play an active role in solving social issues by offering our products, technologies and services in the five market domains.

Shaping the way in which we realize our future vision

What is “individualized business”?

The term “individualized business” refers to a business that is exceeding a certain scale, generating a certain level of profit, and offering highly competitive technologies and/or business models. A business that deals with a unique product offered only by the Showa Denko Group cannot be classified as an individualized business if it does not have a certain scale.Our businesses for HD media and high-purity gases for electronics are classified as individualized businesses, while our businesses for lithium-ion battery (LIB) materials and SiC epi-wafers for power devices are not, and we aim to develop the LIB materials and SiC epi-wafers businesses to such scale whereby they do qualify as individualized businesses during the new medium-term business plan. There are also many existing businesses that can be developed into individualized businesses by changing their business models or through other measures. The graphite electrode business, which is currently experiencing extremely sluggish demand, is one such example. The business has the potential for increasing profitability along with improvement of the operating rate, so we seek to restore its individualized business status as soon as possible.

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　Rede�ne mission of each business

Base-shaping

Rebuilding

Growth-accelerating

Advantage-establishing

Market and business have certain scale. Have more power to resist market �uctuation, and

make stable pro�t and cash �ow.

HD Graphite electrodesPetrochemicals

Industrial gasesShoticTM

High-purity aluminum foil

Rare earthsCeramicsAluminum specialtycomponents

High-purity gasesfor electronics

Functional chemicalsAluminum cans

Actively take strategic measures.Realize rapid expansion of business

by preempting market growth.

LIB materialsSiC epi-wafer forpower devices

To cope with prospective market growth, establish business model with competitive advantage in terms of business and technical development.

Increase pro�t and cash �ow through rebuilding of business environment, pro�tability and business model.

Aiming to have business structure with less rate of change in pro�tability through expansion of individualized businesses and pro�tability improvement

High

HighLowRate of change (Risk)

*Businesses with sustainablehigh-level pro�tability and stability

occupy 50% of net sales

Showa Denkoin 2025

ExpandindividualizedbusinessesStabilize income

Showa Denkoin 2015

Individualized businesses

50%

50%40%Overseas

sales

60%

Domesticsales

Operating incom

e margin (Return)

Aiming to makeindividualized businesses*

occupy 60% of net sales

Aiming to makeoverseas sales

30%Improveprofitability

How will the share of overseas net sales be increased?

We will promote M&A and various other measures in and outside Japan. However, needless to say, advancing overseas is not something all of our businesses ought to aim for; some businesses need to concentrate solely on the Japanese market due to the nature of the products they provide.We first must ensure that businesses in which our significant business resources have been invested will show steady success. For high-purity gases for electronics, for example, we will continue the strategy of expanding sales channels in China and Southeast Asia. We are also expecting the aluminum processed products business to continue to grow in China and ASEAN countries—particularly the aluminum can business in Vietnam, where the market is developing rapidly.

What is the most important change made for the new business portfolio?

We have defined a mission for each of the four categories of the business portfolio and re-classified our businesses into those categories by re-examining which mission is most apt for each business. This reflects our determination to avoid complacency and achieve a higher level of profitability while maintaining sustainable development.

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Creating new value

What is the R&D strategy set out in the new medium-term business plan?

Under the basic policy of “Create new value by forging, polishing and linking diverse individualized technologies,” we will (1) input our business resources into R&D activities that will strengthen our core businesses and help expand businesses in their surrounding fields; (2) create next-generation businesses to meet a wide range of needs; and (3) continuously deepen our strategic technologies (nano-carbon, thin films, catalysts).To realize the Group’s growth strategy, we need to offer new products, new technologies and new solutions—in other words, new value—on an ongoing basis as the specific outcomes of R&D activities. We aggressively meet the challenge of creating new value for the five market domains by combining our elemental technologies for complex processing of various organic, inorganic and aluminum materials with our proprietary strategic technologies, including nano-carbons and thin films. To create new value, we will also promote joint research with and outsourcing of R&D to universities and other outside institutions and will acquire technologies in other fields through M&A and partnerships.

Please give one last comment that shows the Group’s determination to achieve the targets.

“+” of Project 2020+ has the following three meanings:

- We will add extra measures other than those announced to achieve future growth;

- We will work extra hard in terms of “Shaping Ideas” with a view to realizing the future vision of the Group for 2025, going beyond the targets for 2020; and

- Every worker in the Group, including those working for our business partners and those working in countries other than Japan, will do their best to add extra value to our offerings in order to add extra strength to the Group.

Implementing these three “+” (extra) efforts will lead to the accomplishment of Project 2020+. Each of us must continue working to add new value to our offerings so that we can contribute to creating a society where affluence and sustainability are harmonized.

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R&D of the Showa Denko Group

R&D of the Showa Denko Group

Plan for R&D

The Showa Denko Group is planning to invest 60 billion yen in R&D over three years, starting in 2016, under the new medium-term business plan, Project 2020+. About 70% of the investment funds will be directed toward the “Energy” market domain (LIB materials, SiC epi-wafer for power devices, etc.) and the “Electronics” market domain (printed electronics, optical films, functional monomers, etc.) to accelerate the development of new technologies and products. The remaining 30% will be spent on the newly added market domains of “Infrastructure,” “Living environment,” and “Mobility” for the purpose of expanding “individualized businesses.”Through these R&D investments and activities, we will offer high value-added products and services in the five market domains while creating “individualized businesses” to promote social contribution on a global scale.The R&D projects introduced below have the potential to become our next growing businesses.

1. Power modulesOur power modules offer an example of how we combine the Group’s technologies, materials and solutions. A power module is made of various materials such as aluminum, resin and ceramics. We will meet customer needs for thermal solutions for high output and downsized power control units, optimum material mix, and multi-materialization (joining of different materials, etc.) by combining the Group’s power device, heat sink/insulating panel, cooling device, heat-resistant sealing resin, and other proprietary technologies so as to pioneer the power module market.

2. Printed electronics materialsPrinted electronics requires flexible and elastic materials with higher printability, electrical properties, and environmental reliability. Target markets include the mobile display, wearable device, and onboard device markets, all of which are expected to expand rapidly. Showa Denko is currently developing ink in partnership with a printing and curing equipment manufacturer. We will pursue commercialization by expediting the development of ink optimized for printed electronics processes.

3. Nano-carbon materials Having put commercial production of VGCFTM carbon nanotubes on track, the Showa Denko Group is currently developing new nano-carbon materials such as fullerene and graphene. Our R&D targets include derivatization of fullerenes, development of new functions for nano thin film materials, and establishment of assessment techniques, and we will promote the use of the materials for composites, batteries, electrical wiring, recording devices, and other applications.


Accelerate R&D centering on “Energy” and “Electronics”

(2016-2018)¥60billionR&D budget

Mobility

Livingenvironment

Infrastructure

Electronics

Energy

LIB materialsSiC epi-wafer for power devices

Printed electronics, Optical �lm Functional monomers

Functional resins

Next-generation magnetic alloy

Materials for cosmeticsSeparation/re�ning basePlant-cultivation system

Strategic technologies(Nano-carbon/Thin-�lm/ Catalyst)

Others

CSR policyCSR Policy

CSR Policy

Given our currently promoted medium-term consolidated business

plan Project 2020+ , the Showa Denko Group aims to “contribute

toward creating a society where affluence and sustainability are

harmonized” while conducting business in such a way that our

products and technologies contribute to solving social issues

including the topics of global environment, energy, and resources.

During Project 2020+, we will focus on the issues of “responsible

care,” “risk management and environment-conscious business

management,” “corporate ethics and compliance,” and “dialogue with

stakeholders,” as well as the materiality issues selected.

At the Showa Denko Group, CSR is regarded as the responsibility of

each and every employee. All employees are thus expected to behave

with integrity and in conformity with “Our Vision” and “Our Code of

Conduct” and to contribute to society through business activities.

With its products, technologies and services, the Group will

contribute to creating a society where affluence and sustainability are

harmonized.

CSR Policy

In the new medium-term business plan launched in 2016, the

Showa Denko Group, for the first three years until 2018, will in its

CSR activities focus on realizing safe and stable operations as well as

sustainable development; ensuring strict compliance with legislation

and observing social and corporate ethical norms; and promoting

dialogue with stakeholders.

Realize safe and stable operations as well as sustainable development

As a corporate group producing and distributing chemicals, we give

priority to safety above all else and, by continuing to promote Active

Safety* activities, will make our utmost effort to prevent industrial

accidents, equipment-related incidents, and environmental troubles

from occurring. Moreover, we consider our Responsible Care program,

in which we pay close attention to safety, health and environment

at all stages of life cycle of chemical substances, to be one of our

core CSR activities. Under our Responsible Care action plan, we will

implement and further improve activities specified for each category

of “Safety and disaster prevention,” “Occupational safety and health,”

“Chemical substance safety,” and “Environmental safety.” In addition to

these activities, we will also work hard to offer products, technologies

and services that will help solve social issues as part of our efforts to

achieve sustainable development.

Ensure strict compliance with legislation and observe social and corporate ethical norms

Observing social and corporate ethical norms is one of the most

important priorities for the Showa Denko Group and constitutes the

basis of its management. We will ensure that all of our employees

behave with integrity based on “Our Code of Conduct and Its Practical

Guide,” which was established to give employees guidelines on what

to keep in mind and how to behave in order to realize “Our Vision.”

Message from CSR Officer

Promote dialogue with stakeholders

Dialogue with stakeholders is important for us to accurately

understand their interest in our environmental, social and governance

(ESG) practices and their expectations toward and concerns about

the Group. It is also important in terms of enabling us to reflect the

related findings in our corporate activities. In addition to official

meetings with stakeholders organized under various circumstances,

we will work to create more opportunities to communicate with

stakeholders through our group-wide aluminum can recycling

activities, participation in local events, and on other occasions where

we contribute to local communities.

Through CSR activities conducted by our Group employees with a

high level of CSR awareness, we will fulfill our social responsibilities,

realize as many of the hopes and dreams of society and people as

possible, and contribute to creating a society where affluence and

sustainability are harmonized.

Corporate Officer

Taichi Nagai

medium-term consolidated business plan

CSR policies for 2016 to 2018All employees are thus expected to behave with integrity and in conformity with “Our Vision” and “Our Code of Conduct” and to

contribute to society through business activities.

(1) Realize safe and stableoperations as well as sustainable development.- Consolidate the businessfoundation in a way that iscompatible with low-carbon society. - Contribute to CO2 emissionreduction and resource recycling.

(2) Ensure strict compliance with legislation and observe social and corporate ethical norms.

(3) Promote dialogue withstakeholders.

We contribute to creating a society where affluence and sustainability are harmonized.

*Active Safety: The Showa Denko Group’s unique activities in which we analyze past accidents and troubles, and take measures to prevent their recurrence

CSR Strategy of Showa Denko


Materiality Assessment Process and Materiality Issues

Materiality

We assessed the materiality of each issue that may affect the

sustainability of society from the perspectives of both the Group

and its stakeholders and narrowed them down to 14 material

issues.

Determining Materiality

・Issues that our stakeholders expect us to address were chosen with reference to the core subjects of ISO 26000 and the performance indicators of the Global Reporting Initiative (GRI).

・Issues that need to be addressed as a manufacturer and chemical company in the course of routine business activities were also listed.

・Higher-priority items were selected in the light of our Group ’s management pol ic ies , medium-term consolidated business plan, annual plan, business operation system, corporate code of conduct, and guidelines. Consistency between our activities so far and the core issues of ISO26000 were also con�rmed.

・The materiality of each issue was analyzed from the Group and stakeholder perspective and the issues were prioritized.

・The materiality of each issue from the perspective of stakeholders was determined based on the results of a questionnaire given to stakeholders.

・The materiality of each issue from the perspective of the Group was determined based on the impact of each issue on society and the company’s �nancial performance.

・After the opin ions of concerned units were considered, the �nal decision on the selection of material issues was made at a CSR Committee meeting held in the �rst half of 2015.

Step1

Step2

Step3

Step4

Listing issues to be investigated examined

Identifying Materiality

PrioritizingMateriality

Con�rming adequacy








Step1

Step2

Step3

Step4












Step1

Step2

Step3

Step4





▶ Selecting Materiality

Significance to stakeholdersHigh

Significance to our company High

● The Environment ● Safety and disaster prevention ● Labor practices/Human rights● Fair business practices ● Provide products and services ● Consumer issues● Organizational Governance ● Participation in Community Activities　　　● Others　　

Materiality assessment

The material issues selected are aligned with the Group’s medium- to

long-term issues.

The diagram below shows how each material issue of the Group listed

in the left part is correlated to each medium- to long-term issue of the

Group in the right part.

This diagram was also included in a Group newsletter to ensure that all

employees across the Group understand the correlation.

Contributing to creating a society where a�uence and sustainability are harmonized

Provision of solutions for social issues

Reduction in the consumption of resources and energy, conservation of the global environment

Realization of zero accidents and disasters

Equipment safety, countermeasures againstlarge-scale disasters

Compliance with social and corporate ethical norms

Embracing and leveraging the potential of diversity

Maintenance of sound, e�ective and transparent management

Safety of chemicals, quality assurance

Provision of products, technologies and servicesSocial Contribution

Focus on sustainability

Contributing to local communities

Provision of products, technologies and services

Strengthening Responsible Care

Safe and stable operations

Safety and disaster prevention

Maintenance of product safety

Thorough risk management

Thorough compliance

Promotion of diversity

Enhancement ofcorporate governance

The Environment

Safety anddisaster prevention*

Consumer issues

Fair business practices

Labor practices/Human rights

Corporate Governance

Corporate ethics*

MaterialityCore subjects addressed

in ISO26000 Medium- to long-term management issues

Participation in Community Activities

Prevention of Pollution

Use of sustainable resources

Measures to climate change

Equipment safty


Protection of intellectual property

Thorough corporate ethics


Creating a comfortable workplace

Development of Human Resources

Decision-making process, structure

Access to Essential Services

The correlation between material issues and the Group’s medium- to long-term management issues

*The issues in italics are not included in the core subjects of ISO 26000, but are listed here because they are considered to be important to the Group.


▶ Selecting Materiality

Environmental Conservation

Global Warming Prevention Measures

Responsible Care

Basic policies

The Showa Denko Group promotes various measures to reduce

greenhouse gas emissions and energy consumption as part of its

efforts to combat global warming and support resource conservation.

Activities in 20151. Reduction of CO2 emissions

The Group continued its efforts to reduce greenhouse gas emissions,

including improvement of production processes and modification of

equipment.

2. Implementation of c-LCA*

The Showa Denko Group assesses CO2 emissions across the entire

life cycle of each product, encompassing not just direct emissions

(Scope 1) and indirect emissions (Scope 2) during production but

also emissions during the procurement of raw materials and the use,

disposal and recycling of products (Scope 3), contributing to the

reduction of CO2 emissions across society as a whole.

▶︎ Scope 3 GHG emissions(kt/YEAR)

Category The amount of emission

1 Purchased goods and services 1,784

2 Capital goods 70

3 Fuel- and energy-related activities not include in Scope1 and 2 454

4 Upstream transportation and distribution 28

5 Waste generated in operations 10

6 Business travel 3

7 Employee commuting 1

Other (down stream) 11,281

3. Reducing environmental impact through supply chain management (SCM)

As a way to reduce its environmental impact, Showa Denko is

also committed to improving transportation efficiency across its

entire supply chain from the procurement of materials through to

production, sales and delivery.

We are placing particular focus on a modal shift by using rail and

ship transport instead of trucks to reduce the environmental impact

associated with logistics.

In addition to promoting a modal shift, in FY 2015, we also strove to

decrease the unit energy consumption by reducing transport distance

for trucks through the use of local ports close to delivery destinations

and by reducing the frequency of truck-based transportation through

enhanced freight-carrying efficiency and the adoption of the “milk

run” method in which one truck drives around picking up cargo. We

also cooperated with transport companies in the adoption of low-

emission vehicles and eco-friendly tires, and encouraged eco-friendly

driving to reduce energy consumption.

However, while CO2 emissions decreased significantly, unit energy

consumption increased on a year-to-year basis. This was because the

relocation of some of our plants overseas led to decreased volume of

industrial waste in Japan that could have been transported by vessels

with superior unit energy consumption.


20152011 2012 2013 2014 （FY）

（kt-CO₂）

2005Reference year

Amount discharged

2,6812,5092,6792,695

3,621

▶Trends in discharged amounts of greenhouse gases and target �gures (Showa Denko Group)

3,500

3,000

2,500

2,000

1,500

1,000

500

0

Non-energy source origin 6GHGs

Energy source origin

■■■

2,68362

872,534

*c-LCA (carbon-Life Cycle Analysis) is a methodology to assess the CO2 emissions in the total lifecycle of products from the time their raw materials are taken, they are manufactured, distributed, used up, to the time they are abandoned.

*The Greenhouse Gas (GHG) Protocol classifies emissions into three scopes: Scope 1 (Direct emissions from the reporting company), Scope 2 (Indirect emissions from the generation of purchased or acquired electricity), and Scope 3 (Other indirect emissions from the reporting company’s supply chain).

2015

▶Transportation sector's CO2 emissions and energyconsumption rate

40

30

20

10

0

40

30

20

10

020142011 2012 2013 （FY）

21.7

32.4 27.5 29.3 29.0

22.2 21.8 22.424.7

22.8

■ CO2 emissions by transport sector● Unit energy consumption for transport

（thousand tons）（kl per million ton-km）

emissions by transport sector

Environmental Conservation

Basic policies

To prevent air, water and soil pollution, the Showa Denko Group

strives to reduce release amounts of chemical substances through

fuel switching, improvement of production processes, and other

measures.

Activities in 2015Reducing emissions of hazardous air pollutants

Of the 12 substances designated by the Japan Chemical Industry

Association (JCIA) as hazardous air pollutants, the Showa Denko Group

handles nine. In 2015, we continued our efforts toward reducing the

emissions of these substances by promoting a shift to alternative

substances and collection and recycling of the substances.

Reducing our environmental impact on the air

To reduce emissions of SOx, NOx, dust and soot, and other substances

having adverse effects on the air, the Group continued advancing

a variety of measures including fuel switching, improvement

of combustion methods, proper operational management of

desulfurization and denitrification devices, and reduced fuel

consumption through waste heat recovery.

Reducing our environmental impact on water

To reduce chemical oxygen demand (COD), total nitrogen, total

phosphorus, and other water pollution indexes, the Group

continued implementing various measures including improvement

of production processes, upgrading and proper operational

management of wastewater treatment facilities, and recycling of

water.

Measures to prevent soil and groundwater pollution

On occasions such as changes in the uses of plant sites or soil removal,

the Showa Denko Group undertakes surveys and other measures

in line with the Soil Contamination Countermeasures Law and local

government regulations.

Responsible Care

Minamata disease in Niigata Prefecture

Fif ty years have passed since the outbreak of Niigata Minamata disease was officially recognized. Maintaining an awareness of the signif icant scale at which we have caused damage to the victims and residents of neighboring areas through contamination of the Agano River, Showa Denko is committed to collaborating with the Japanese Government as well as local governments in order to cope with this issue with sincerity, and provide solutions in accordance with the Act on Compensation,etc. for Pollution-related Health Damage and other relevant laws and regulations.

Emissions of NOx increased due to increased production, while emissions of SOx decreased as a result of fuel switching. Emissions of dust and soot also decreased due to the discontinuance of production at some plants and other reasons.

Total nitrogen and total phosphorus decreased due to the discontinued operation of some production lines, while COD increased due partly to increased production and other reasons.

Environmental considerations ; Atmosphere, water and soil

Emissions of hazardous air pollutants decreased due to decreased production at the Company's plants.


（FY）2011 2012 2013 2014 2015

（t）

▶Total amounts released of harmful atmospheric pollutants（Showa Denko）

30

25

20

15

10

5

0

14

28

21

17 18

● NOX● SOX● Soot and dust（t）

1,600

1,400

1,200

1,000

800

600

400

200

0（YEAR）2011 2012 2013 2014 2015

1,413

360

87

▶Change in discharged amounts of substances with atmospheric impact (Showa Denko)

1,238

457

153.2 166 112174

966

453398 369

1,2671,324

（t）600

500

400

300

200

100

0

● total nitorogen● COD● total phosphorus

（YEAR）2011 2012 2013 2014 2015

▶Discharged amounts of substances withwater quality impact （Showa Denko)

503

365

9

502

386

16

365

13

380

10

355

10

419458

510

Reducing Industrial Waste Reducing Chemical Substance Discharge

Basic policies

We continue our group-wide efforts to curb generation and promote

reuse and effective use of waste to achieve zero emissions (which is

defined as a status in which the volume of final landfill disposal is 1% or

less of total waste generated).

Activities in 2015

To reduce disposal of industrial waste, the Showa Denko Group

has been taking various actions including the reuse of waste acids

and waste alkalis, use of waste oil and waste plastics as fuel for heat

recovery, and effective use of inorganic sludge as a raw material

for cement and others. These measures have been helping us curb

generation and promote reuse and effective use of waste materials.

1.Reducing volume of landfill disposal

The volume of final landfill disposal decreased from the previous year,

achieving the Group target (1,000 tons or less) and zero emissions.

We also inspected our contractors for intermediate treatment and

final disposal and checked that they treat and dispose of our waste

properly.

Discharge of bauxite residue into the sea for disposal was

discontinued in March 2015.

2.PCB control

Based on its PCB control checklist, Showa Denko K.K. regularly checks

the status of stored polychlorinated biphenyl (PCB) waste. This

waste is appropriately stored in suitable facilities to prevent leaks.

Additionally, each worksite submits an annual report on the status

of stored PCB waste and related matters to the prefectural governor,

as required under the Law Concerning Special Measures against PCB

Waste.

Taking full advantage of the waste processing facilities of Japan

Environmental Safety Corporation etc., we are continuing systematic

disposal of PCB waste.

Basic policies

As a member of the Japan Chemical Industry Association (JCIA),

Showa Denko has been voluntarily investigating the amount of

chemical substances discharged and transferred by the company

since 1996 as part of its efforts to promote the reduction of the

company’s discharge of chemical substances. We plan measures for

each site and implement them to ensure the reduction.

Activities in 2015

Showa Denko investigated the amount of 417 substances, including

PRTR-listed substances, discharged and transferred by the company

and reported the results to JCIA.

Showa Denko will continue to make focused efforts to reduce

discharge volumes by preparing reduction plans for each site

for PRTR-listed substances and for substances with high annual

discharge volumes. The Company is currently seeking to ascertain

and assess potential impact in areas surrounding its sites and improve

communication with local communities and governments concerning

risks as it works to reduce discharge volumes.


2015

▶The amount of industrial waste discharge

■ Showa Denko■ Showa Denko Group (Japan)

（FY）

（t）40,000

30,000

20,000

10,000

02012

26,060

8,441

2011

35.143

2013

22,910

8,669

2014

24,454

8,842

20,974

10,739

Volume released / transferred

Volumetransferred

192t819t

Total volumereleased

0tInto soil

22tInto water

170tInto air

▶PRTR-listed substances released and transferred(Showa Denko)

▶Released of PRTR-listed substances

（t）

350

400

450

300

250

200

150

100

50

02011 2012 2013 2015（FY）2014

317

55

105

2626

292

373384

438

23

■ Into air（Showa Denko)■ Into air（Showa Denko Group)

■ Into water（Showa Denko)■ Into water（Showa Denko Group)

268

170

221

▶ Trends of the final landfill volumes of industrial waste(t) (FY)　　　　　　　　　　　　　　　

2011 2012 2013 2014 2015

Showa Denko 1,932 1,850 1,087 912 752

Group Companiesin Japan 212 235 273 246 99

Equipment safety

Responsible Care

Basic policies

Since 2008, the Showa Denko Group has been promoting the Active

Safety initiative in which we analyze past accidents and troubles to

prevent recurrences with the aim of reducing equipment-related

accidents to zero.

Activities in 2015

In 2015, there were three equipment accidents, in which there were

fortunately no personal injuries involved. Because a series of serious

accidents have occurred in Japan’s chemical industry since 2011, we

reminded ourselves of the starting point of the Active Safety initiative

and, as in 2014, continued various activities including intensive

discussions on safety at Safety Meetings held within the Management

Committee chaired by the president.

1. Thorough implementation of high risk material (HRM) examinations

For new facilities handling highly self-reactive and other hazardous

HRMs, we identified and introduced preventive measures for every

potential risk we found in relation to the facilities during engineering

reviews.

2. Utilization of the Equipment Accident Prevention Checklist

We made sure that every employee and division concerned was

informed of and utilized the revised Equipment Accident Prevention

Checklist.

3. Response to the industrial safety action plan drawn up by the JapanPetrochemical Industry Association (JPCA)

We advanced continuous improvement through a plan-do-check-

act (PDCA) cycle to achieve the goals of maintaining zero serious

accidents and disasters under the medium-term business plan and

management policies in order to ensure safe and stable operations in

accordance with Our Vision.

Under our safety control implementation plan, we placed particular

focus on risk assessment of unusual conditions and operations, while

implementing educational training sessions and various improvement

activities to enhance our safety culture and strengthen our safety

foundation.

Precautions against earthquakes

The Showa Denko Group completed its earthquake risk assessments

for its facilities and buildings as well as the planning to make

them earthquake resistant by 2012. Ever since then, we have been

implementing the plan for each facility and building based on the

priority set according to each one’s earthquake vulnerability level.

In 2015, we investigated the earthquake resistance of each critical

facility, such as high-pressure gas facilities with a high safety priority,

facilities where hazardous materials are handled, facilities subject

to the Act on Promotion of Seismic Retrofitting of Buildings, and

hydroelectric dams, and reinforced the facilities to bring them in line

with the latest earthquake resistance standards. We also formulated a

three-year anti-seismic reinforcement plan for 2016 to 2018.

Earthquake preparedness drill conducted jointly with neighboring communities

The Ogimachi Area of Showa Denko’s Kawasaki Plant organizes

a comprehensive disaster drill every year to enhance its

preparedness for an unexpected disaster.

The drill conducted on two days in October 2015 consisted of

two types of training. One type simulated a “predicted disaster

scenario” where a warning against tsunami following a large-scale

earthquake is issued by the Japan Meteorological Agency. The

other type simulated an “Ongoing disaster scenario” where an

epicentral earthquake occurs without warning, causing spills of

hazardous materials and later a fire within the plant.

Both types of training were

conducted in cooperation

with neighboring

companies and community

residents’ associations and

were therefore large in scale,

realistic and practical.



Occupational Safety Promoting mental and physical health

Basic policies

In order to eliminate work-related accidents, the Showa Denko Group

has promoted “Active Safety” activities since 2008 by using its original

“Active Safety Checklist.”

Activities in 2015

While promoting Active Safety activities by making full use of the

Active Safety Checklist, we also continued taking measures to prevent

the recurrence of serious accidents that took place in 2014 (involving

someone being caught in a machine) across all Group plants. As a

result of these efforts, the number of accidents involving a person

being caught in a machine decreased significantly in 2015.

Basic policies

To work vigorously without anxiety, it is important for each of

employees to maintain and promote health of his/her own and the

whole family throughout lifetime.

Toward this end, we are currently implementing the Showa Denko

Group Vivid Health Promotion Plan, a four-year (2013 to 2016) plan

aimed mainly at the prevention and improvement of lifestyle-related

diseases and the development of sound mental health.

Activities in 2015

To help employees prevent and recover from lifestyle-related diseases,

we provided follow-up support, including follow-up care and health

guidance, after health checkups. We also implemented the Mental

Health Promotion Plan established in 2012 as part of our steady efforts

to promote the development of healthy minds.

Furthermore, we have conducted stress checks mandated under

the amended Industrial Safety and Health Act concurrently with our

2016 annual health checkups and, based on the results, will follow

up with employees found to be under high stress and improve work

environments with high occupational stress to help employees

develop and maintain their mental health.


20150.13

0.220.43

▶ Trends infrequency rate of lost-time injuries

（YEAR）0

0.5

1

1.5

2

2011 2012 2013 2014

0.150.250.21

1.62

0.88

0

1.59

0.85

0.14

0.12 0.24

1.58

0.82

1.66

0.76

1.61

0.81

All IndustriesChemical Industries

Showa DenkoShowa Denko Group*

*Scope of Group companies : Tsurusaki Kyodo Doryoku K.K., Showa Denko Ceramics Co., Ltd. , Shinshu Showa K.K. , Shiojiri Showa Co. Ltd., Showa Denko Packaging Co., Ltd. , Showa Aluminum Can Corp., Showa Denko Sakai Aluminum K.K., Showa Denko Electronics K.K., Union Showa K.K., Niigata Showa K.K., Showa Aluminum Can Recycling Center, HIPACK Co., Ltd., Showa Denko Gas Products Co., Ltd., Clean-S Showa K.K., Nippon Polytech Corp., KANAE CHEMICALS Co., Ltd., Showa Denko Kenso K.K., Showa Fine Ceramics Co., Ltd. , Showa Denko HD Yamagata K.K., and Fuyo Perlite Co., Ltd.

▶ 2015-2016 List of RC-related awards received by the Showa Denko Group companies

Name of award Recipient site and individual Year received

Responsible Care 10th JCIA Annual Responsible Care Award (Award for Effort)HD Sector, Showa Denko K.K.

Theme: “Approaches to energy conservation at the HD manufacturing plant”May , 2016

Disaster prevention

Fiscal 2015 Japan Association for Safety Hazardous Materials President Award

(for superior facility in the handling of hazardous substances)

Institute for Advanced and Core Technology June , 2015

Oyama Plant of Showa Aluminum Can Corp June , 2015

Fiscal 2016 Excellent Hazardous Materials Facility Accredited by the

Commissioner of the Fire and Disaster Management AgencyTsurusaki Kyodo Doryoku K.K. June , 2016

Health and occupational safety

Fiscal 2014 Minister of Health, Labour, and Welfare's Award for business-facility

managers who place priority on safety

Eiichi Kudo , Production Department , Oita Complex January, 2015

Masao Ichikawa, Production Department, Omachi Plant January, 2015

Safty Merit Award of the 39th JCIA Safety AwardsTatsuno Plant May , 2015

Kitakata Plant May , 2015

Special Award for Excellence, 2014 Japan Aluminum Association Occupational

Safety Awards

Omuta Plant of Showa Aluminum Can Corp. May , 2015

Oyama Plant of Showa Aluminum Can Corp May , 2015

Hikone Plant of Showa Aluminum Can Corp. May , 2015

Fiscal 2015 Japan Industrial Safety & Health Association Green Cross Award Ikuhira Sugamori, Hikone Regional Office Octorber,2015

Fiscal 2015 Minister of Health, Labour, and Welfare's Award for business-facility

managers who place priority on safety

Naoya Shinozaki, Production Department, Oyama Plant January, 2016

Makoto Nakano , Shiojiri Plant of Showa Denko Ceramics Co., Ltd. January, 2016

Accident-free record certificate from the Ministry of Health, Labour and

Welfare (Second-class)Oyama Plant February, 2016


Welfare (First-class)Omuta Plant of Showa Aluminum Can Corp. February, 2016

Safty Merit Award of the 40th JCIA Safety Awards Omuta Plant of Showa Aluminum Can Corp. May , 2016

Special Award for Excellence, 2015 Japan Aluminum Association Occupational

Safety Awards

Omuta Plant of Showa Aluminum Can Corp. May , 2016

Oyama Plant of Showa Aluminum Can Corp May , 2016

Hikone Plant of Showa Aluminum Can Corp. May , 2016


Welfare (Third-class)Showa Denko Electronics K.K. June , 2016

Responsible Care


Basic policies

To ensure chemical safety, the Showa Denko Group actively

implements its comprehensive chemical substances management

consistently throughout the life cycle of chemical substances, from

R&D and design to production, sales, distribution, use, and disposal.

We also participate in activities of the International Council of

Chemical Associations (ICCA) aimed at the integrated management

of chemical substances in order to support international efforts to

minimize adverse effects of chemicals on human health and the

environment by 2020, a goal agreed upon at the World Summit on

Sustainable Development (WSSD).

Activities in 20151. Utilization of the comprehensive chemicals management system

Our comprehensive chemicals management system is the basic

framework for our management of chemical substances and is utilized

for the following purposes:

・Sharing of information on chemical substances

Concerning chemical substances used as raw materials and those

produced as our chemical products, we have created an integrated

database on hazard and risk associated with them, applicable laws

and regulations, uses of the materials/products in the supply chain,

and other relevant information. This database is shared among

authorized people within and outside the Group.

・Provision of information on chemical substances

Labels and Safety Data Sheets (SDSs) complying with JIS 7253: 2012

are used for chemical products sold in Japan to provide hazard and

risk information on each product for customers. As to products sold

internationally, labels and SDSs complying with GHS*1 regulations for

each country are used to provide information.

・Risk assessment of chemical products

The properties of each product including hazards and risks are assessed

and understood for every stage of their life cycle, from R&D and design

to production, sales, distribution, use, and disposal, and necessary

measures are taken. Especially for the cases of “sample shipment”

and “putting new products on the market,” in which we provide new

chemicals to our customers, we have established and activated a

system to deliberate and judge whether that provision is right or wrong.

2. Participation in international efforts for chemical substance management

We continue to participate in Global Product Strategy(GPS*2), ICCA’s

voluntary initiative to strengthen risk assessment and management

of chemical substances, not just within the company but also

throughout our supply chain. We reinforce our management of

chemical substances by, among others, gathering data and assessing

the hazards and risks of each chemical substance in the stages of

production, sales, use, and consumption.

3. Compliance with laws and regulations and their amendments

We keep ourselves updated with the latest information on laws

and regulations related to raw materials and products handled by

us by utilizing the Japanese and overseas legislation database. The

information is automatically updated, helping us to respond to any

changes in an appropriate way.

・Laws and regulations in Japan

We ensure that reports and notifications required under the Act

on the Evaluation of Chemical Substances and Regulation of Their

Manufacture, etc. and the Act on Confirmation, etc. of Release

Amounts of Specific Chemical Substances in the Environment and

Promotion of Improvements to the Management Thereof are made.

We also respond to amendments and any other changes to applicable

laws and regulations in an appropriate way.

・Overseas laws and regulations

As part of our group-wide efforts, we monitor and properly respond

to changes to applicable legislation in each country.

Chemical Substances Safety

▶ Applicable overseas laws and regulations

EU REACH regulation*3、CLP regulation*4、BIOCIDE regulation

Asia/ASEAN Laws revisions

US TSCA*5 reform bills

Site/Department

SDK/Chemical Management System

ERP System(Shipping Ticket/

RC Record)WEB Platform

Chemical Management DB

Regulatory DB

SupplierSDS

Non-inclusionCertificate

Inclusion Survey/RoHS Survey

Volume Reporting(CSCL,PRTR)

Use Information

Various Reports(SDS/Labels,

JIPS Report,etc.)

Data Acquisition Search/View

Mater/Date Integration

View/Input/Search

Government

ProductionLine

CustomersEnvironment & Safety, Quality Assurance

*1 GHS…Globally Harmonized System of Classification and Labelling of Chemicals

*3 REACH regulation…Registration, Evaluation, Authorization And Restriction Of Chemicals

*4 CLP regulation…Classification, Labelling and Packaging

*5 TSCA…Toxic Substances Control Act

*2 GPS … Global Product Strategy▶︎ Comprehensive chemicals management system


Basic policies

The Showa Denko Group offers safe, reliable products and services to

customers. For this purpose, we organizationally and systematically

conduct various “product safety” activities to assure customers that

our products are safe throughout their life cycle, from design and

development to market release, production, sales, and aftersales. The

quality of our products is maintained in accordance with the Quality

Assurance and Quality Control Rules ("Rules") established within the

company as well as through compliance with laws and regulations.

To ensure product safety, we not only check the safety of products

themselves but also consider how the customer will use the product,

how the product will be disposed of, and other scenarios related to

the product. We do this even during the early stages of the product

life cycle, such as at the start of development, when samples are

provided to customers, or when the product is put on market. We

then identify potential risks associated with these scenarios and come

up with measures to reduce such risks. By adopting this risk-based

approach, as well as by internally monitoring this entire process, we

assure the effectiveness of our product safety activities. Particularly

the products which may be taken into or contact with the human

body are strictly checked.

The “Rules” are reviewed annually to cope with changes in

environment and society, and enhance effectiveness of product safety

accordingly.

Activities in 2015

To enhance our quality assurance and management capabilities, we

implemented the following activities:

1. Quality management system (Quality control scheme)

At the Showa Denko Group, quality management systems suitable

for each product and organization are operated, while acquisition

of certification for ISO 9001, ISO/TS 16949, and other international

standards are promoted. Quality management systems are reviewed

continuously to enhance the quality of products and services.

2. Reducing complaints

Complaints regarding product quality are responded to under the

quality management systems to prevent recurrence. The number of

complaints received in 2015 declined by about 40% compared to the

previous year.

3. Education and training

The Showa Denko Group conducts training geared specifically toward

each product and organization.

Training materials used for group seminars and e-learning concerning

product safety and quality control provided by the Quality Assurance

Office at the Head Office continued to be upgraded in 2015, including

update by making them better reflect the actual conditions and

circumstances of the Group.

4. Implementation of audits

Audits conducted by the Head Office’s Quality Assurance Office at

each division, plant, and Group company in 2015 brought to light

problems with the potential to impair our capability to maintain the

consistent quality of our products and allowed us to solve them.

Quality Assurance


Design anddevelopment

Product safety screeningProduct risk assessmentSafety tests

Marketing andmanufacture

New-Product launch proceduresQuality assurance capabilityscreeningProcedures for changes inmanufacturing conditions

After-sale Sales

Screening before concluding contractsand speci�cationsScreening of sales and PR materials

Management ofafter sale information

▶ Quality Assurance and Quality Control Rules20152011 2012 2013 2014 （YEAR）2010

Reference year

（%）

29

100

73

57 5750

100

80

60

40

20

0

▶Trends in annual numbers of complaints (With a score of 100 representing the number of claims in 2010)

(Showa Denko)

Human Rights and Diversity

Working Conditions, Social Protection, Complaint Settlement

Basic policies

The Showa Denko Group considers compliance with social and

corporate ethical norms to be one of its most important management

priorities. It positions respect for human rights as the core issue that

needs to be addressed to ensure social justice and ethnical corporate

behavior within the Group. The Human Rights/Corporate Ethics

Promotion Council established under the CSR Committee chaired

by the president regularly reviews the Group’s human rights policies,

plans activities for each year, and determines basic mid- to long-term

aspirations with the aim of enhancing a culture of respect for human

rights across the Group.

We also incorporated “Management Respecting Employee Diversity”

into our business strategy in 2008 and have ever since been working

to promote diversity under the slogans of “Make the most of the

potential of yourself” and “Make the most of the potential of others.”

Having completed the previous two phases of “Recognize” and

“Understand,” in the beginning of 2016 we started the third phase of

“Practice.” In this phase, we intend to conduct more specific activities

and spread the practice of respecting human rights.

Activities in 2015

Various activities were conducted at each office, plant and Group

company to promote human rights.

1. Enlightening activities regarding human rights

We are working to

develop training

tools for interactive

employee education

programs while

providing educational

opportunities on

fundamental issues of

discrimination and human rights at workplaces, as well as themes that are

considered as having high social interest, such as “people with disabilities”

“human right abuses via the Internet.”

2. Handling harassment

The Showa Denko Group has a zero-tolerance policy for harassment.

Following this basic stance, anti-harassment training has been provided

to managers, supervisors, and other employees, while support was given

to staff working at the harassment consultation desks to develop and

maintain their skills.

3. Support programs to help female/foreign employees play active roles

Our work-life balance support programs were improved based on

opinions we had collected directly from female employees. At the same

time, as in the previous years, career development support was provided

to female employees through workshops and other opportunities, and

opinions were exchanged with them as to how female managers and

leaders can be

brought up.

We also organized

social gatherings and

other activities for non-

Japanese employees

again in 2015 for the

purpose of supporting

their integration into

the Group and their active involvement in our business.

Human rights training held in the Keihin region.

Interview with female employees conducted at the Omachi Plant


▶Trends in the number of employees on consolidated basis

（Persons）7,000

6,000

5,000

4,000

3,000

2,000

1,000

02011 2012 2013 2015（YEAR）

6,0315,511

1,663

5,802

4,088

1,239

5,905 5,873

4,329

1,287 1,322

6412014

5,932

4,645

1,361

642

4,688

618599588

■ Total number of employees in Japan on consolidated basis■ Number of female employees in Japan on consolidated basis■ Total number of all overseas employees on consolidated basis■ Number of overseas female employees on consolidated basis

Showa Denko received the “Platinum Kurumin”

Showa Denko received the “Kurumin” certification in 2008 from the Tokyo Labour Bureau

under the Ministry of Health, Labour and Welfare as a company

that is supportive of its employees’ childcare.

Since then, we have worked even harder to take our childcare

support activities to the next level, and these efforts resulted in

our receiving the “Platinum Kurumin” certification in June 2016.

▶ Number of female managers and its ratio (Showa Denko)

2011 2012 2013 2014 2015Number of femalemanagers 11 14 14 18 23

Female managersratio(%) 0.26 0.35 0.36 0.47 0.62

Creating a comfortable workplace

4. Employment of handicapped persons

We continued expanding our employment of people with disabilities.

A special team was formed to develop employment opportunities and

increase types of jobs suitable for people with intellectual and mental

challenges as well as to support disabled workers and their workplaces.

We also continued to actively support the employment of people with

disabilities by accepting such candidates into our internship program.

5. Employment of the aged

We started reemploying retired employees in 2006. They continue to

use their skills and expertise for the company.

6. Human rights in the supply chain

In order to conduct business that takes human rights throughout

the supply chain into consideration, we ask our business partners to

respect basic human rights, prohibit discrimination, ensure proper

work conditions, and protect the rights of the workers through our

CSR procurement program. We work together with our partners to

comply with these matters.

Basic policies

It is important for the growth of our Group that it meets social needs

through the lively work of employees who are able to live in harmony

with society.

The Showa Denko Group works hard to continuously improve

employees' community life.

Activities in 20151. Reducing total work hours and encouraging the use of annual paid leave

We re-examined working environments, among other activities, to

reduce total work hours and encourage the use of annual paid leave.

2. Promoting sound work-life balance

Showa Denko’s work-life balance support programs are designed to

meet the needs of employees at different stages of life. In 2015, we

continued our efforts to encourage both men and women to use the

programs.


2011 2012 2013 2014

2,500

2,000

1,500

1,000

500

0

2,010.0 2,040.0 2,031.6 2,047.2 2,053.2

2015（YEAR）

（Hours）

2,019.5 2,008.5 2,009.1 2,023.1 2,002.9

▶Trend in working hours (per employee per year)

*1…The manufacturing industry average was prepared using the data in the "Annual report on the monthly labour survey" published by the Ministry of Health, Labour and Welfare

● Manufacturing industry average*1■ Showa Denko

20152011 2012 2013 2014 （YEAR）

15

5

10

0

10.2

12.7

（Days）

12.8

9.8 10.3 10.310.2

12.8 13.212.7

10.1

13.6

▶Annual paid holidays taken (per employee per year)● Manufacturing industry average*2■ Showa Denko

*2…The manufacturing industry average was prepared using the data in the "General survey on working conditions" published by the Ministry of Health, Labour and Welfare.

（ Year/Month ）

2.0

2.5

0

3.0（%）

2011/6 2012/6 2013/6 2014/6 2015/6

● Legal requirement● Showa Denko

2.0

2.71

2.01

1.89 1.89

2.0 2.0

2.282.34

2.48

▶Ratio of handicapped employees

（YEAR）

80

90

100

0

（%）

2011 2012 2013 2014 2015

8683

88 90

85

▶Ratio of reemployed employees( Showa Denko)

▶︎ Number of employees who took the advantage of the work-life balance support systems Showa Denko (2015)

Male Female Total

Childcare leave 69 41 110

Family care leave 0 0 0

Shortened working hours for childcare/family care 1 34 35

Basic policies

The Showa Denko Group conducts a wide variety of original activities

aimed at promoting interaction with local residents and contributing

to local communities, such as: classes-on-demand, in which classes

on chemistry and the environment are provided upon request at

off-site locations; environmental conservation activities organized in

cooperation with local residents; and aluminum can recycling.

Activities in 2015

As in the previous years, we conducted a wide range of activities at

various locations in 2015.

Education

In order to deepen peopleʼs understanding and interest on chemistry,

the Showa Denko Group is actively

engaged in educational activities

such as classes-on-demand at local

elementary and junior high schools,

plant visit open to students up to

university and internship.

Improvement of the environment around the worksites

The Showa Denko Group cares about

and cleans up the environment around

our plants and offices in cooperation

with local residents and local

municipalities.

Community development and social welfare

The Showa Denko Group strives to contribute to development of local

economy, for example, by participating and assisting in events, urban

planning and town planning activities,

providing small and medium-sized

companies with technical advice and

support, employing local residents,

and procuring local goods and

materials. We also contribute to local

community through welfare-related

and other activities.

On April 25, 2016, Showa Denko donated 10 million yen to Kumamoto

and Oita prefectures to support people and areas severely affected

by the 2016 Kumamoto Earthquake. Donations were also collected

from executives and emplpyees of the Showa Denko Group for a

relief fund. We express our deepest sympathy and condolences to the

victims of the disaster and pray for the earliest possible recovery of the

devastated areas.



Chichibu Plant of Showa Denko K.K.

Head Office of Showa Denko K.K.

Oyama Plant of Showa Denko K.K.

Aluminum can recycling activities

The Showa Denko Group’s aluminum can recycling activities

started in 1972, when employees at the former Showa Aluminum

Corporation called upon their colleagues to collect and recycle

aluminum cans. When Showa Denko and Showa Aluminum

Corporation merged in 2000, the activities spread across the

Showa Denko Group.

In 2015, a record-high 98.8% of Group employees participated in

the activities.

Aluminum cans collected by employees are purchased by the

Group companies where they work and then sold on to Showa

Aluminum Can Recycling Center Co.,Ltd. and others for recycling.

Sales profits gained through these activities are donated to

various welfare facilities and organizations in each area.

Showa Denko HD Yamagata K.K.

On February 25, 2015, Showa Denko

HD Yamagata K.K. donated proceeds

from aluminum can recycling

activities of the previous year to

Higashine Social Welfare Council in

Yamagata Prefecture.

Omuta Plant, Showa Aluminum Can Corp.

On March 5, 2015, the Omuta Plant

donated proceeds from aluminum

can recycling activities to the

Omuta City Council of Social Welfare

in Fukuoka Prefecture.

Higashinagahara Plant, Showa Denko K.K.

On July 10, 2015, the Higashinagahara Plant donated two vacuum

cleaners purchased using proceeds

from the for-charity collection of

aluminum cans to the Kawahigashi

Branch of Aizu Wakamatsu Social

Welfare Council.

（YEAR）20152011 2012 2013 2014

（％）

▶ Participation rate of the activity

100

98

96

94

92

90

88

92.3

94.3

96.6

98.398.8


Corporate Ethics and Compliance

Corporate Ethics and Compliance

Basic policies

The Showa Denko Group positions "compliance with social justice

and corporate ethics" as the top management priority and operates

the company based on compliance. As fundamental mechanisms to

promote and establish compliance on a group-wide basis, the Human

Rights/Corporate Ethics Promotion Council is established under the

CSR Committee chaired by the president while a chief risk officer

(CRO) in charge of risk and compliance management across the Group

is appointed.

We also set January every year as Corporate Ethics Month, in which

we ensure that corporate ethics becomes more deeply ingrained in

the corporate culture by checking whether compliance standards are

met throughout the Group as well as by providing employees with

training organized by the administrative departments.

Furthermore, in addition to recurrence prevention measures and the

proper punishment for compliance violations, there is a framework

in place to prevent or find and properly address problems at an early

stage through an internal check system and inside denunciation

system.

Activities in 20151. Corporate Ethics Month

The Showa Denko Group has set January every year as Corporate

Ethics Month since 2004.

As in the previous years, in the 2016 Corporate Ethics Month, we

organized group discussions using Our Code of Conduct and Its

Practical Guide in each workplace, including Group companies

outside Japan, and ensured that all executives and managers signed

and submitted, respectively, “The Oath of Office” and “The Oath of

Compliance with Our Code of Conduct and Its Practical Guide.”

Furthermore, this year again, we implemented e-learning on

corporate ethics and compliance targeting managers. This e-learning

program is mandatory for those who have been promoted.

2. Corporate Ethics Hotline

A "Corporate Ethics Hotline" has been established for group

employees in Japan to prevent, or correct at an early stage, matters

that conflict with various rules such as laws and internal regulations as

well as violations of corporate ethics. We have also been reinforcing

our system for preventing power harassment and sexual harassment

to resolve any issues as quickly as possible.

In 2015, we received 46 reports, each of which we responded to

appropriately and provided follow-up on how the matter was

handled to each whistleblower. By dealing with every report in this

way, as well as by regularly reminding employees of the availability

of these services and how to use them, we worked hard to enhance

employee access to the services.In addition, four of our overseas

Group companies have designated person to contact for inside

denunciation. We will continue strengthening these efforts.

2013 2014 2015

41 44 46

▶ Number of requests for consultation received by the Corporate Ethics Hotline　(Include anonymity)

Our Code of Conduct and Its Practical Guide




Basic policies

Showa Denko continuously promotes corporate governance to ensure

the soundness, effectiveness, and transparency of management, and

to contribute enhancing its corporate value, thereby contributing to

the sound growth of society and earning its full trust and confidence.

To that end, it is essential for the Company to strengthen relations

with its stakeholders, including shareholders, customers, suppliers,

community residents, and employees. Based on the above, the

Company has clarified its mission in the form of Our Vision and Showa

Denko is working hard to realize this Vision.

Implementation status of corporate governance measures

We introduced the corporate officer system to draw a clear line

between the two functions of management supervision and business

execution. The top management team, consisting of the President

and corporate officers in charge of respective operations, has been

working for prompt and dynamic decision-making in the areas of

management. Meanwhile, we substantially reduced the number of

directors. We also reinforced the supervision capacity of the Board

of Directors by appointing a minimum of two Independent Outside

Directors.

Board of Directors

The Board of Directors decides basic policies of the Company. It also

thoroughly discusses and makes decisions regarding matters specified

in the Companies Act or the Company's Articles of Incorporation

as well as important issues in executing business operations, while

promoting prompt and dynamic decision making on management.

We appoint directors with emphasis on the viewpoint of corporate

governance, aiming to strengthen the Board of Directors' monitoring

and supervisory functions and ensure the propriety of decision

making process. We have adopted a management system in which

corporate officers dedicate themselves to business execution, which

is their primary duty, but do not concurrently serve as directors,

in principle. Furthermore, we have abolished the system of officer

directors except the Chairman and the President, while strengthening

monitoring by Auditors including outside Auditors and mutual

supervision among directors.

The term of office of directors is set to one year to ensure a quick and

flexible formation of management team corresponding to changes in

the business environment.

Management Committee and R&D Committee

The Management Committee, which is chaired by the President,

deliberates and decides on matters to be referred to the Board of

Directors' meetings and important matters pertaining to overall

management of the Company. The decisions are made after

deliberations on two occasions. As for the investment issues to be

submitted to the Management Committee, risk analysis as well as

achievement/progress management are conducted in advance,

through preliminary risk reviews and examinations by a relevant task

team. The basic business policies including Company's medium-term

business plans are decided not only through the deliberation of the

Management Committee but also through sufficient examination by

all corporate officers.

The R&D Committee deliberates and makes decisions on important

issues related to research and development.

CSR Committee

Showa Denko positions CSR Committee at the top level of our

corporate governance system to check all management measures

from the CSR perspective. We also established the Security Export

Control Committee and Safety Measures Committee under the CSR

Committee. Moreover, we set up Responsible Care Promotion Council,

Risk Management Promotion Council, Human Rights/Corporate Ethics

Promotion Council and IR Promotion Council to deliberate on the

respective matters.

AccountingO�ce

Board ofAuditors

Auditors

Auditing

Sta� Sections

BusinessDivisions

Rapid, e�ective decision-makingand business

NominationAdvisory Committee

RemunerationAdvisory Committee

Responsible Care Promotion Council

Risk Management Promotion Council

Human Rights / Corporate EthicsPromotion Council

IR Promotion Council

Security Export Control Committee

Safety Measures Committee

Management Committee

R&D Committee

Execution of Duty

Internal Audit Department

Top ManagementPresident

Corporate O�cers in Charge

Shareholder’s meeting▶ Corporate governance structure

Board ofDirectors

CSR Comm

ittee

Internal Audits

links

Accounting

Audit

Accounting

Audit

JobA

udits

Advisory・Report


Audit & Supervisory Board

Board of Directors

Board of Auditors

Showa Denko employs an auditor system. The Auditors attend the

Board of Directors meetings and other important internal meetings,

offering opinions as necessary. They conduct audits on execution of

business operations through on-site investigations, interviews with

responsible persons, and reference to important documents so as

to provide suggestions, advice, and recommendations for securing

soundness in management. They also audit group companies in

cooperation with auditors of major affiliated companies.

Internal Audit Department

We have the Internal Audit Department reporting directly to the

President. The Internal Audit Department investigates the overall

execution of business including group companies and verifies its

accuracy, validity and efficiency. It also investigates and verifies the

functional state of management policies, business plans and internal

control systems. The results of internal auditing are also reported to

the Auditors for mutual cooperation with Auditors' auditing.

Accounting audits

Showa Denko concluded an auditing contract with KPMG AZSA, and

this audit corporation performs accounting audits for the Company.

The Accounting Auditor confirms the annual audit plan with the

Auditors and reports the audit results to them. The Accounting

Auditor and the Auditors also exchange information and views as

required, to promote their cooperation.

Policies and procedures of the Board of Directors in the selection of senior management personnel and

the nomination of candidates for Directors and Audit & Supervisory Board Members

Candidates for Directors must possess sufficient knowledge,

experience and capabilities to fulfill their obligations as Directors.

Senior management personnel are selected by additionally taking into

account, among others, their corporate and individual performance.

Candidates for the Audit & Supervisory Board Members must possess,

in addition to an appropriate level of expertise in the areas of finance

and accounting, sufficient knowledge, experience and capabilities to

fulfill their obligations as Audit & Supervisory Board Members.

In 2016, the Nomination Advisory Committee was set up as an

Explanation regarding the selection of senior management personnel and the nomination of candidates for Directors

and Audit & Supervisory Board Members

Reasons why each candidate has been nominated are stated in the

Reference Materials for the General Meeting of Shareholders.

Independence standards and credentials required of Independent Outside Directors

The Board of Directors has established independence standards for

Outside Directors based on independence criteria stipulated by law

and the Tokyo Stock Exchange and selects candidates who meet the

standards. See the Attachment of Corporate Governance Basic Policies

for the independence standards.

Policies and procedures for the Board of Directors in determining the remuneration of senior management

personnel and Directors

Effective as of 2016, the remuneration of Executive Directors and

Corporate Officers consists of base remuneration (which is based on

titles, etc.) as well as short-term performance-linked remuneration

and mid- to long-term performance-linked remuneration (which is

determined in consideration of corporate and individual performance,

etc. based on the performance evaluation system). The Remuneration

Advisory Committee was established in November 2015 as an advisory

body to the Board of Directors and a majority of its members are

Independent Outside Directors and Outside Auditors. It deliberates

the remuneration of each Executive Director and Corporate

Officer and submits recommendations to the Board of Directors.

Remuneration of Outside Directors consists of base remuneration

only.

advisory body to the Board of Directors. With Independent Outside

Directors forming the majority of its members, the Committee

deliberates the nomination of candidates for Directors and Audit

& Supervisory Board Members, as well as the selection of senior

management personnel, and submits recommendations to the Board

of Directors.


Taichi Nagai

Akira Koinuma

Representative Directors

Masaru Amano

Akiyoshi Morita *

Yukio Obara *

*Outside Members

*Outside Members

Kohei Morikawa

Ichiro Nomura

Chairman of the Board

Kyohei Takahashi

Tomofumi Akiyama *

Hiroyuki Tezuka *

Representative Director,President

Hideo Ichikawa

Masaharu Oshima *

Kiyomi Saito *

Saburo Muto

CSR procurement Protection of intellectual property

Fair Business Practice and Customer Care

Basic policies

Showa Denko undertakes CSR procurement, attaching importance

to the society- and environment-conscious business activities in

the entire supply chains from the procurement of raw materials to

manufacture and sale. To promote CSR procurement, Showa Denko

implements the following policies:

Activities in 2015

Our CSR procurement aims to mutually improve the corporate value

of both our business partners and Showa Denko by sharing with them

and requesting their compliance with the Showa Denko Group CSR

Procurement Guidelines (http://www.sdk.co.jp/about/purchase/csr.

html).

The guidelines provide specific CSR activities that we request our

business partners to conduct. In order to confirm their compliance

with the guidelines, in 2015 we continued performing three activities:

asking business partners to assess their own CSR activities (“self-

assessments”), visiting them for inspection purposes (“CSR visits”), and

doing follow-up checks on their improvement (“follow-up”).

We also spread these CSR procurement activities to our Group

companies in Japan and carried out self-assessment surveys of the

business partners of four Group companies, with the agreement of

those Group companies.

Acquisition of intellectual property rights and establishment of patent networks

As the majority of Showa Denko's businesses are operated globally,

we aggressively apply for patents in foreign countries with the aim of

supporting those businesses from the intellectual property side.

The chart shown below is a composition of data shown in "Japan

Patent Office Annual Report 2016" and SDK's own data on the number

of applications for patents. It illustrates that the Showa Denko's global

application ratios were about 10% higher than those by all applicants.

We also make every effort to secure our superiority based on

intellectual property rights, especially in the principal businesses

and newly developed important products by establishing patent

networks.

One of our Codes of Conduct is to respect the intellectual property

rights of others. Starting in 1996, we have built a patent monitoring

framework to constantly grasp trends in the intellectual property

rights of other parties.

We started digitizing this monitoring process in 2005 and, in 2011,

established a system that enables us to monitor foreign patents as well.

System relating to employee inventions

Following the revision of the Patent Act in 2014, we changed our

system related to employee inventions twice, in 2005 and in 2011

(with the latter change enforced on July 1, 2011).

We have also revised the commendation system for employee

inventions to promote the filing of more valuable patent

applications. Conventionally, only the top 3 employees in numbers

of patent applications filed in the previous year were applicable for

commendations. However, in 2013, we started to also commend

the top 3 employees in numbers of patent obtained in the previous

year. In 2015, we reported in our Group newsletter the patent applied

for by us which was quoted by Japan Patent Office examiners most

frequently of all our patents pending during the previous fiscal year in

rejecting patent applications from other companies.


1) We will take a comprehensive approach in selecting most suitable supplier

partners based upon economic rationality by taking into consideration

quality, price, delivery period, credibility of management, safety, services,

technological competence and attention to environment and society.

2) In selecting our supplier partners, we have an open-door policy for

business opportunities with sincerity, fairness and honesty, disregarding

the nationality, past records of transaction and the corporate group

relationship of the candidate companies.

3) Our purchasing activities shall be in compliance with laws and regulations,

as well as our internal rules.

2015

301

40

▶ CSR visits

2010 2011 2012 2013 2014 （YEAR）

250

（Visits）300

200

150

100

50

038

56 54 58 5439

95

149

207

261

● Number of visits● Cumulative numbers of visits

（YEAR）2012 20132009 2010 2011

60

50

40

30

20

10

0

（%）

▶ Trend of patent application ratio in Japan and abroad

1,200

1,000

800

600

400

200

0

(Number of application)

● Global application ratio (Showa Denko)● Global application ratio (all applicants)

■ Number of application in Japan (Showa Denko)■ Number of global application (Showa Denko)

35600,000

900,000

300,000

40,000

30,000

20,000

5

4

6

3

2

1

60,000

50,000

10,000

0

20,000

15,000

10,000

5,000

0

30,000

40,000

50,000

20,000

10,000

0

750,000

1,250,000

1,000,000

500,000

250,000

0

15,000

20,000

25,000

10,000

5,000

0

10,000

12,000

6,000

4,000

2,000

8,000

0

20

30

40

10

0

1,500

2,500

2,000

3,000

1,000

500

0

0.20

0.10

0.30

0.40

0.50

0

0

30,000

40,000

20,000

10,000

0

Net Sales Consolidated sales by segment Operating income (loss)Ratio of operating incom to sales

Net income (loss) Total assets Stockholders' equity ratio

Capital expenditures R&D expenditures Discharged amounts of greenhouse gases

The amount of industrial waste discharge Number of employees Frequency rate of lost-time injuries

2011 2012 2013 2014 2015

(million yen)

2011 2012 2013 2014 2015

(million yen)

2011 2012 2013 2014 2015

(million yen)

2011 2012 2013 2014 2015

2011 2012 2013 2014 2015

(million yen)

2011 2012 2013 2014 2015

(million yen)

2011 2012 2013 2014 2015

（Persons）

2011 2012 2013 2014 2015

（%）

2011 2012 2013 2014 2015

（Kt-CO2）

2011 2013 2014 2015

2011 2012 2013 2014 2015

(million yen) （％）

941,303 933,162 985,771 1,011,083

17.3%

28.1%

12.3%Aluminum

Chemicals

18.6%Others Petrochemicals

16.0%Electronics7.7%

Inorganic

2015

02012

■ Operating income● Ratio of operating incom to sales

■ Overseas■ Japan

(FY)

(FY)

848,071 876,580

780,958739,811

854,158

969

4,688

47,357 28,108 25,953 20,915 33,672

3.1

2.4

4.33.8

5.5

16,980

9,368 9,065

3,500

38,79442,503 44,370

47,318

44,059 2,681 2,6832,6952,509

2,67921,597

20,633 20,435 20,362 20,289

10,234 10,577 10,561

4,329

5,905

4,645

5,932 5,873

9,890

4,088

5,802

11,542

5,511

6,031

29.731.6

26.8 29.2 30.6941,314

（t）

26,060

8,441

35.143

22,910

8,669

24,454

8,842

20,974

10,739 0.1３ 0.14

0.22

0.43

0.24 0.25

0.150.12

0.21

Showa Denko

Showa Denko Group■ Showa Denko K.K. ■ Showa Denko Group (Japan)

Financial/Non-Financial Highlights

Financial/Non-Financial Highlights


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