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									                                                                                              Tokuyama CSR Report 2010
                                                                                              Tokuyama CSR Report 2010
                                                                                                                           CSR Report
                                                                                                                          CSR Report

                                                                                                                                Harmony with People,
                                                                                                                            In In Harmony with People,
                                                                                                                            Society and the Environment
                                                                                                                          Society and the Environment

   Corporate Social Responsibility Division
Corporate Social Responsibility Division
     Shibuya Konno Bldg., 3-3-1, Shibuya, Shibuya-ku, Tokyo 150-8383
Shibuya Konno Bldg., 3-3-1, Shibuya, Shibuya-ku, Tokyo 150-8383 JapanJapan
      Tel: +81 3-3499-8478 Fax: +81 3-3499-8961
Tel: +81 3-3499-8478 Fax: +81 3-3499-8961
    URL http://www.tokuyama.co.jp
URL http://www.tokuyama.co.jp

                                                                                                                           Staying with you the time
                                                                                                                         Staying with you allall the time
     report is printed on FSC-accredited paper with pure plant oil ink, ink, which contains
This This report is printed on FSC-accredited paper with pure plant oil which contains
     no volatile organic compounds and in dry printing process that no water,
no volatile organic compounds and in a dryaprinting process that uses uses no water,
     precluding release of any any harmful effluents.
thus thus precluding release of harmful effluents.

    of issue: December 2010
DateDate of issue: December 2010
     Next Scheduled for December 2011
Next issue:issue: Scheduled for December 2011
      Tokuyama Group Code of Business Activities                                                                                                       Centennial Vision                                                                 1   Tokuyama Group Code of Business Activities
                                                                                                                           Established: May 12, 2009
                                                                                                                                                                                                                                         3   Top Message
                                                                                     Respect of Human Rights and Personality                           February 16, 2018 will mark Tokuyama’s centennial founding anniversary.           5   The Tokuyama Group at a Glance
      All Tokuyama Group members will commit to operating in a                                                                                         The basic strategies in the Centennial Vision are to strengthen strategically
                                                                                     • We respect the basic rights of people in our business and
      way that is compatible with society and to fulfilling the Group’s
                                                                                       will do not discriminate on the bases of race, sexuality,
                                                                                                                                                       growing businesses and to strengthen international competitiveness                7   In Your Everyday Life − Chemistry in harmony with Society −
      corporate social responsibility, following the principles bellow                                                                                 through a process of concentrating on select areas. We will concentrate
                                                                                       creed, nationality or religion.                                 our energies on human resources-based management and the promotion of             9   Fiscal 2009 Highlights
      and endeavoring to achieve sustained growth by earning the                                                                                       CSR activities, as we regard these as the foundations of our basic strategies.
                                                                                     • We value diversity in the workplace and will provide a
      support of our clients.                                                          safe and comfortable working atmosphere to provide
                                                                                                                                                                                                                                        11   Special Feature 1     Integration in the Tokuyama Factory
                                                                                       satisfaction and opportunity to each employee.                     Basic Strategies for the Centennial                                           13   Special Feature 2     Shanghai Tokuyama Plastics:
         Compliance                                                                                                                                        Our ideal image
          We act with good corporate ethics and common sense,
                                                                                     Communications                                                                                                                                                                Expansion of Air-permeable
                                                                                      We make fair and positive public disclosure of information           “A manufacturing company that creates a brighter future                                                 Film Business in China
          based on the understanding that compliance with laws                                                                                             with the vitality of its human resources and the creativity of
                                                                                      about our Group including its business activities and
          and corporate rules is the most important requirement in
                                                                                      financial reports to maintain good communication with
                                                                                                                                                           chemistry in harmony with society”                                           15   Special Feature 3     Shikkui Lemarge:
          pursuing any kind of business.                                                                                                                                                                                                                           An Interior Finishing Material
                                                                                      society.                                                                                                                                                                     with Durability for the Future
         Fair Business Activities
          • We aim to be moderate and reasonable in our business
                                                                                     Social Contributions
                                                                                     • We actively seek to contribute to our community as a                                                      Centennial
            through fair, free, and transparent competition.
          • We will maintain fair and reasonable relation with
                                                                                       good corporate citizen.
                                                                                     • We contribute to the development of local regions in
                                                                                                                                                                                                                                        Tokuyama’s CSR Activities
            political and governmental organizations.
                                                                                       our international business activities, respecting not only                                        Strength                ning                   17   What Are Tokuyama’s CSR Activities?
         Responsible Care                                                              international rules, local laws and regulations but also                                                  ening Strengthe
                                                                                                                                                                                              of             o f
          • We develop, produce and supply products and services                                                                                                                      inte                    gicall
                                                                                                                                                                                                                     y                  19   The Foundation of CSR − Being a Trusted Company
            that have value to the community, with a constant focus
                                                                                       local cultures and customs.                                                                  comp rnational      strate usinesse
                                                                                     Exclusion of Antisocial Forces                                                                              ness rowing b                          22   RC Promotion Structure and Operation of
            on safety requirements, so that we can satisfy our clients                                                                                                                                g
            and consumers and earn their trust.                                      We will not enter into any business arrangement with                                                                                                    Management Systems
          • We voluntarily and proactively address environmental                     antisocial forces that threaten public order and safety.                                                                                           25   Addressing the Plastic Window Sash Problem
            issues based on an understanding of their significance to                                                                                                       Human resources-based management
            all mankind and their importance to the continuation of                                                                                                                                                                          toward Regaining Trust
            business activities.                                                                                                                                                   Promotion of CSR activities

        Responsibility of Senior Management Under the Tokuyama Group                                                                                                                                                                    Harmony with Society
        Code of Business Activities (“Code of Business”)                                               Established: May 12, 2009
                                                                                                                                                                                                                                        26   Relationships with Customers
        Each member of the senior management of Tokuyama Corporation and its Group companies is responsible for
                                                                                                                                                                      Editorial Policy                                                  29   Relationships with Communities and Society
        embodying the spirit of Code of Business, and specifically for carrying out the following jointly and individually.
                                                                                                                                                                      • CSR Report 2010 has been compiled with the aim of
          Senior managers shall lead employees in complying with the Code of Business.
                                                                                                                                                                        bringing Tokuyama’s activities directed at meeting its
                                                                                                                                                                                                                                        33   Relationships with Employees
          Senior managers shall ensure that all employees in their organization comply with the Code of Business.                                                       Corporate Social Responsibility in fiscal 2009 to the           35   Relationships with Shareholders
          Senior managers shall establish appropriate internal systems to ensure that compliance with the Code of                                                       attention of all concerned, including shareholders,
          Business operates effectively.                                                                                                                                investors, trading partners, employees and their
                                                                                                                                                                                                                                        36   Relationships with Trading Partners
          Senior managers shall take the following actions in dealing with any event that is not in compliance with the Code                                            families, people living near its production sites and           37   Process Safety, Disaster Prevention and
          of Business (“Violation”)                                                                                                                                     members of the public. As in the 2009 edition, CSR
                                                                                                                                                                        Report 2010 has special features on three different                  Occupational Health and Safety
          · Demonstrate a clear commitment to solving the Violation.
          · Make every reasonable effort to identify the cause(s) of the Violation and put in place appropriate measures to                                             subjects: distinctive features of the Tokuyama Factory,

                                                                                                                                                                        one of the Group’s overseas subsidiaries, and an
            prevent any recurrence.
                                                                                                                                                                        environmentally friendly product. In addition, it
          · Make public disclosure of the Violation quickly and accurately and with appropriate accountability.
                                                                                                                                                                        delivers a more extensive report on social contribution
          · Clarify authority and responsibility with respect to the Violation and take strict action (disciplinary measures),
            including appropriate action against senior managers themselves.
                                                                                                                                                                      • As with the 2009 edition, Ms. Eriko Nashioka of the
                                                                                                                                                                                                                                        with the Environment
                                                                                                                                                                        Institute for Environmental Management Accounting
                                                                                                                                                                        was asked to offer independent comments on this                 39   Performance for Fiscal 2009
                                                                                                                                                                        report. The purpose of the independent comments is to
                                                                                                                                                                        continuously seek feedback and ratings that are                 40   Environmental Accounting
                                                                                                                                                                        helpful to Tokuyama’s efforts in fulfilling its social               Commitment to the Prevention of Global Warming
                                                                                                                                                                        responsibility. Details of Ms. Nashioka’s comments are
                                                                                                                                                                        available on page 51.                                           42   Reduction of Air and Water Pollutants
                                                                                                                                                                      • CSR Report 2010 has been prepared based on the                  44   Waste Reduction and Recycling
                                                                                                                                                                        Environmental Reporting Guidelines (Fiscal 2007
                                                                                                                                                                        edition) published by the Ministry of the Environment.          45   Development of Environmentally Friendly Products
                                                                                                                                                                      • CSR Report 2010 is also available via Tokuyama’s
                                                                                                                                                                                                                                             and Environmental Technologies
                                                                                                                                                                        website: http://www.tokuyama.co.jp/eng/enviro/

                                                                                                                                                                       Scope of the Report
                                                                                                                                                                       Period:        All performance data are for fiscal 2009,         Site Report
                                                                                                                                                                                      from April 2009 to March 2010. Activities
                                                                                                                                                                                      are for fiscal 2009 in general, with some         47   Tokuyama Factory
                                                                                                                                                                                      for fiscal 2010.
                                                                                                                                                                       Companies: Tokuyama Corporation (Environmental                   48   Kashima Factory
                                                                                                                                                                                      performance data relates to the Tokuyama          49   Activities of Group Companies
                                                                                                                                                                                      factory and the Kashima factory.) Part of
                                                                                                                                                                                      the performance data also includes the
                                                                                                                                                                                      total value of eleven main production
                                                                                                                                                                                      companies in the Group (See page 49).             51   Third-Party Comments / In Response to the
                                                                                                                                                                       Region:        Activities in Japan (Including some                    Third-Party Comments
                                                                                                                                                                                      overseas companies in the Group)
                                                                                                                                                                       Date of issue: December 25, 2010 (The next edition will          52   History of Tokuyama’s RC Activities
                                                                                                                                                                                      be issued in December 2011.)
                                                                                                                                                                                                                                             Editor’s Notes

1   Tokuyama CSR Report 2010                                                                                                                                                                                                                                       Tokuyama CSR Report 2010         2
      Top Message                                                                                                                                                                                     Top Message

       Steadily striving to promote our management policy,                                   “Venture Spirit & Innovation,”
       to become a manufacturing company that is in                                          harmony with society

                                  The Tokuyama Group will celebrate the centennial                customers and stakeholders for having caused great          citizen. The Tokuyama Group is proud that its
                               anniversary of its founding in 2018. “A manufacturing              trouble and inconvenience.                                  development of environmentally friendly chemical
                               company that creates a brighter future with the vitality              At present, we are working hard to carry out             products and environmental technologies, including
                               of its human resources and the creativity of chemistry in          repair work at customers’ buildings/houses to achieve       polycrystalline silicon, a material indispensable to
                               harmony with society” is the ideal image of the Group              compliance, as we place top priority on providing           solar power generation, is encouraging active global
                               set out in our Centennial Vision, and all its members              peace of mind for our customers. We completed all           use of renewable sources of energy and spreading the
                               are endeavoring to attain this vision. The basic strategies        urgent and short-term measures designed to prevent          practices of energy conservation.
                               in the Centennial Vision are to strengthen strategically           a recurrence of this dishonesty problem, which we              In addition, the Tokuyama Factory, the principal
                               growing businesses and to strengthen international                 announced in March 2009. Now, we are working                production facility of the Tokuyama Group, has slashed
                               competitiveness. We aim to do this by concentrating                actively on the medium-term measures, which are due         its unit energy consumption by exhaustively improving
                               on select areas, on the basis of a system that supports            to be finished by March 2011. I am convinced that we        the manufacturing processes and taking action to
                               the basic strategies comprising human resources-based              can consistently improve our record of compliance by        save energy. I expect that we will probably achieve
                               management and the promotion of CSR activities, in an              reviewing the strengths and weaknesses of the Group         our goal of cutting unit energy consumption by 22%
                               aspiration to maintain constant growth.                            and by remedying any shortcomings in the process of         from the 1990 level in fiscal 2010. In addition, the
                                  This CSR Report has been prepared for the purpose               tackling challenges one by one. And I understand that       Tokuyama Factory is unique in having two functions
                               of informing our stakeholders of the Tokuyama Group’s              my duty is to ensure that these efforts are not mere        of chemicals production and cement production.
                               activities, which are conducted based on this vision               temporary solutions, but continue to produce positive       Taking advantage of this characteristic, it is actively
                               and with the aspiration of becoming a manufacturing                results over the long term. The Tokuyama Group is           reusing the waste and by-products emitted from inside
                               company that is in harmony with society, and earning               determined to continue all efforts necessary to regain      and outside the Company as raw material and fuel

        Kazuhisa Kogo          their understanding.                                               your trust as soon as possible.                             for cement production. Our focus on recycling open
                                                                                                                                                              to society contributes to the maintenance of our high
                                  Aware that companies are required to fulfill their                 Aiming to be a “manufacturing company that               zero-emissions rate and to the creation of a recycling
                               social responsibility in relationships with stakeholders,          is in harmony with society,” the Tokuyama Group             society.
                               we understand that our CSR activities need to                      has been engaged in Responsible Care activities for
                               review different processes of our operations. At the               more than 15 years. As a chemical firm committed               Under these adverse business circumstances, I don’t
                               Tokuyama Group, the foundations for CSR have been                  to protecting the environment, safety and health,           believe a magic bullet for manufacturing exists. Rather,
                               steadily built by these activities, which take the form            we voluntarily carry out these activities on a              we will take a comprehensive, step-by-step approach.
                               of Responsible Care activities and internal control                worldwide scale throughout the life cycle of chemical       All personnel, ranging from the management to shop-
                               activities internally called “Sunflower Activities”                substances, encompassing the stages of development,         floor workers, will unite, listen to stakeholders and
                               centered on ensuring and increasing compliance.                    manufacturing, physical distribution, use, final            take the initiative in making sustained efforts under our
                                  To our deepest regret, however, we fell short                   consumption and disposal.                                   management slogan, “Venture Spirit & Innovation.”
                               in our core commitment to ensure compliance.                          First, we believe that safety is an essential part of       We will constantly review the social responsibility
                               As announced in January 2009, it was revealed                      business activities and that ensuring safety is the first   of the Tokuyama Group, as we continue to strengthen
                               that Tokuyama and one of its subsidiaries, Excel                   step in successfully coexisting with society. Based on      our CSR management. We invite readers to provide
                               Shanon Corporation, had been involved in a failure                 this stance, I have taken the lead in promoting process     us with their feedback and remarks in relation to this
                               of compliance involving the fireproof/fire-resistant               safety and disaster prevention.                             report.
                               grade models of plastic window sashes. I take this                    We understand that the fight against global
                               opportunity to again express my sincerest apology to               warming is a key challenge for us as a corporate                                                             July 2010

3   Tokuyama CSR Report 2010                                                                                                                                                                      Tokuyama CSR Report 2010   4
        The Tokuyama Group at a Glance (as of March 31, 2010)                                                                                                                                                                                                    History
                                                                                                                                                                                                                                                                 1918 -
                                                                                                                                                                                                                                                                 Feb. 1918    Established Nihon Soda Kogyo Co., Ltd.
                                                                                                                                                                                                                                                                              Launched a soda ash
       Company Outline                                                                Tokuyama’s Global Network                                                                                                                                                               business in Tokuyama
    Corporate Name: Tokuyama Corporation                                                                                                                                                                                                                                      (currently Shunan City),
                                                                                                                                                                                                                                                                              Yamaguchi Prefecture
    Established: February 16, 1918
    Capital: 53,458 million yen
    Registered address: 1-1, Mikage-cho, Shunan-shi, Yamaguchi, Japan                                                                                                                                                                                            Jan. 1936    The company name is changed to
                                                                                                                                                                                                                                                                              "Tokuyama Soda Co., Ltd."
    Head office: Shibuya Konno Bldg., 3-3-1, Shibuya, Shibuya-ku, Tokyo, Japan
                                                                                                                                                                                                                                                                 Mar. 1938    Commenced cement business
    Branches and offices: Sendai, Nagoya, Osaka, Takamatsu,                                     Germany
    Hiroshima and Fukuoka                                                           France                                                                                                                                                                       Mar. 1952    Commenced electrolytic chlor-alkali
                                                                                             Italy                                                                                                                                                                            business
    Production and Research Sites: Tokuyama Factory,
    Kashima Factory and Tsukuba Research Laboratory                                                                                                                   South Korea
                                                                                                                                                                                                                             USA                                 1960 -
    Number of Consolidated Subsidiaries: 49
                                                                                                                                                                                                                                                                 Jul. 1964    Commenced petrochemicals activities
    Number of Equity-Method Companies: 9
                                                                                                                                                                                                                                                                 Sept. 1966   Commenced vinyl chloride business
                                                                                                                                                                    Taiwan                                                                                       Mar. 1967    Commenced ion exchange membrane
                                                                                                                                                                                       [USA]                                                                                  business
                                                                                                                                                                                         Tokuyama America Inc.
      Sales Breakdown by Segment                                                                                                                                                         Figaro USA, Inc.                                                        1970 -
      (Fiscal 2009)                                                                                                                                                                      <Sale of gas sensors and applied products>
                                                                                                                                                                                                                                                                 Mar. 1970    Commenced polypropylene (PP) business
    Cement,                       Specialty Products
                                                                                                                                                                                       [South Korea]                                                             Jan. 1976    Commenced polypropylene film
    building materials             106.3 billion yen
                                                                                                                                                                                          Tokuyama Korea Co., Ltd.                                                            operations
    and others                              (38.9%)                       [Germany]                                            [China]                                                    Hantok Chemicals Co., Ltd.                                             Mar. 1978    Entered the dental materials field
    73.1 billion yen
                                                                              Tokuyama Europe GmbH                                  Tokuyama Trading (Shanghai) Co., Ltd.                 <Manufacture and sale of photoresist developer>
    (26.8%)                                                                                                                                                                                                                                                      1980 -
                                                                              Tokuyama Dental Deutschland GmbH                      Shanghai Tokuyama Plastics Co., Ltd.
                                                                              <Sale of dental materials and equipment>              <Manufacture and sale of microporous films>        [Thailand]
                                                                                                                                                                                                                                                                 Dec. 1980    Commenced building material operations
                                273.1                                                                                               Tianjin Figaro Electronic Co., Ltd.                   Tokuyama Siam Silica Co., Ltd.
                                                                                                                                                                                                                                                                 Aug. 1982    Entered the fine chemicals market
                               billion yen                                [France]                                                  <Manufacture and sale of gas sensors and              <Manufacture and sale of precipitated silica>
                                                                               Eurodia Industrie S.A.                                                                                                                                                            Aug. 1983    Commenced electronic chemicals
                                                                                                                                    applied products>
    Chemicals                                                                 <Design, manufacturing and sale of                                                                                                                                                              business
                                                                                                                                    Tokuyama Chemicals (Zhejiang) Co., Ltd.            [Singapore]
    93.6 billion yen                                                          electrodialyzers>
                                                                                                                                    <Manufacture and sale of fumed silica>                Tokuyama Electronic Chemicals Pte. Ltd.
                                                                                                                                                                                                                                                                 Jul. 1984    Commenced production of polycrystalline
    (34.3%)                                                                                                                                                                                                                                                                   silicon
                                                                                                                                    Tokuyama Electronic Materials (Suzhou) Co., Ltd.      <Manufacture of high-purity chemicals for electronics manufacturing>
                                                                          [Italy]                                                   <Manufacture and sale of high-purity chemicals        Tokuyama Asia Pacific Pte. Ltd.                                         Apr. 1985    Commenced aluminum nitride (AlN)
    * See pages 7 and 8 for business descriptions.                                                                                                                                                                                                                            business
                                                                              Tokuyama Dental Italy S.r.l.                          for electronics manufacturing>
                                                                              <Sale of dental materials and equipment>                                                                 [Malaysia]                                                                Apr. 1985    Commenced business in the diagnostic
      Sales by Region                                                                                                                                                                     Tokuyama Malaysia Sdn. Bhd.
                                                                                                                                                                                                                                                                              system market
      (Fiscal 2009)
                                                                                                                                    Taiwan Tokuyama Corporation                           <Manufacture and sale of polycrystalline silicon >                     Dec. 1985    Entered the
                                       * Europe and                                                                                                                                                                                                                           sensor business
    Other*                                                                                                                          <Manufacture and sale of high-purity chemicals
                                         North America                                                                                                                                                                                                           1990 -
    14.8 billion yen                                                                                                                for electronics manufacturing>
    (5.4%)                                                                                                                                                                                                                                                       Apr. 1994    The company name is changed to
                                                                                                                                                                                                                                                                              "Tokuyama Corporation"
                                                                                                                                                                                                                                                                 2000 -
                               billion yen                Japan                                                                                                                                                                                                  Aug. 2000    Commenced the recycling & environment
    Asia                                                  215.7 billion yen                                                                                                                                                                                                   business
    42.5 billion yen                                      (79.0%)                                                                                                                                                                                                Sept. 2005   Established Tokuyama Chemicals
                                                                                                                                                                                                                                                                              (Zhejiang) Co., Ltd. in Zhejiang, China as
                                                                                                                                                                                                                                                                              Tokuyama’s first full-scale chemical plant
                                                                                                                                                                                                                                                                              outside Japan
      Net Sales                                                                                        Operating Income                                                                  Number of Employees
    (billion yen)                     Non-consolidated            Consolidated                       (billion yen)                   Non-consolidated            Consolidated          (persons)                        Non-consolidated         Consolidated
       350                                                                                                 40                                                                           6,000
                                             307.4        300.9                                                                               35.3                                                                                         5,295      5,444*
      300                        292.7                                273.1                                                     34.7                                                                                           5,057
                      263.3                                                                                                                                                            5,000            4,630      4,852
      250                                                                                                30                  27.3         28.5
                                          206.1      202.6                                                            24.3
                                                                                                                      243                                                              4,000                                                                     Aug. 2009    Established Tokuyama Malaysia Sdn. Bhd.
      200                     192.6                               187.9                                                                                 22.3 22.7
              171.1                                                                                                                                                                                                                                                           in Malaysia as a manufacturing and sales
                                                                                                         20                                                                            3,000
      150                                                                                                       17.0
                                                                                                                                                                        16.4                                                                                                  company of polycrystalline silicon
                                                                                                                                                                                                    2,028       2,067      2,127       2,161       2,172
      100                                                                                                                                                                              2,000
                                                                                                         10                                                                                                                                                      2010 -
        50                                                                                                                                                                             1,000
                                                                                                                                                                                                                                                                 Apr. 2010    Established the Specialty Products
                                                                                                           0                                                                                0
                    2005        2006        2007         2008        2009                                            2005     2006          2007          2008         2009                            2005       2006        2007        2008 2009                           Business Division to consolidate the Si
                                                                   (Fiscal year)                                                                                    (Fiscal year)                                                            (Fiscal year)                    Business Division and the Advanced
                                                                                                                                                                                                        * Including 661 overseas employees in fiscal 2009                     Materials Business Division

5   Tokuyama CSR Report 2010                                                                                                                                                                                                                                                               Tokuyama CSR Report 2010       6
    In Your Everyday Life                                                                                                                                                                                                                                                                                                 Cement and concrete
    − Chemistry in harmony with Society −                                                                                                                                                                                                                                                                             Building exterior (polyvinyl chloride resin and building materials)
                                                                                                                                                                                                                                                                                                                      Window glass (soda ash)
    Tokuyama has devoted itself diligently to manufacturing in an effort to serve society                                                                                                                                                                                                                             Paint (isopropyl alcohol and precipitated silica)
    and to bring happiness to people since its establishment.
    Although they may attract little attention, products that are valuable in everyday life help you in your daily life.                                                                                                                                                                                                                            Shampoo
                                                                                                                                                                                                                                                                                                                                                    (isopropyl alcohol)
    If you notice our products, you will find that Tokuyama is always beside you.
                                                                                                                                                                   Solar cells                                                                                                                                                                      Bathtubs (propylene oxide)
                                                                                                                                                                                                                                                                                                                                                    Water pipes (polyvinyl chloride resin)
                                                                                                                                                                                                                                                                                                                                                    Bath salts (sodium bicarbonate)


        the home                                                                                                                                                                                                                                                                                                            Laundry detergent
                                                                                                                                                                                                                                        LCD televisions (aluminum nitride,
                                                                                                                                                                                                                                        polycrystalline silicon, high-purity chemicals for                                  (layered sodium disilicate and soda ash)
                                                                                                                                                                                                                                        electronics manufacturing, photoresist developer and                                Soap
                                                                                                                                                                                                                                        silica for semiconductor encapsulant)                                               (caustic soda)
       Medical gloves (polyvinyl chloride resin)                                                                                                                                                                                        DVD recorders (aluminum nitride)
                                                                                                                                                      Clothing (caustic soda)                                                                                                                                               Toothpaste
       Intravenous bags (polyvinyl chloride resin)                                                                                                                                                                                                                                                                          (precipitated silica)
                                                                                                                                                      Dehumidifying agent                                                                Residential windows (plastic window sash)
       Pharmaceutical products                                                                                                                         (calcium chloride and microporous film)
       (pharmaceutical ingredients and sodium bicarbonate)                                                                                                                                                                                                                       Newspapers (caustic soda)
                                                                                                                                                      Interior finishing material
       Blood testing (diagnostic reagents, clinical analyzers and                                                                                      (plaster sheet)
                                                                                                                                                                                                                                                                                 Sofas (propylene oxide)
       laboratory information systems)                                                                                                                                                                                                                                           Wine (ion exchange membrane)
       Dental materials and equipment
                                                                                       Cellular phones (polycrystalline silicon,
                                                                                       high-purity chemicals for electronics manufacturing,

           Food wrapping film
                                                                                       photoresist developer and silica for semiconductor encapsulant)
                                                                                                                                                                                                      Baby diapers (microporous film)                                                                        Gas detectors
                                                                                       Sports shoes (precipitated silica)
                                                                                                                                                                                                      Toys (polyvinyl chloride resin)                                                                       Low-salt soy sauce and table salt
                                                                                                                                                                                                                                                                                                           (ion exchange membrane)

                                                                                                                                                                                                                          Personal computers (aluminum nitride,
                                                                                                                                   Aluminum wheels (caustic soda)
                                                                                                                                   Car navigation systems
                                                                                                                                    (aluminum nitride, polycrystalline silicon,
                                                                                                                                                                                                                          polycrystalline silicon, high-purity chemicals for
                                                                                                                                                                                                                          electronics manufacturing, photoresist developer and
                                                                                                                                                                                                                          silica for semiconductor encapsulant)
                                                                                                                                                                                                                                                                                                                                                    At home
                                                                                                                                    high-purity chemicals for electronics manufacturing,
                                                                                                                                                                                                                          Keyboards (fumed silica)
                                                                                                                                    photoresist developer and silica for semiconductor encapsulant)
                                                                                                                                                                                                                          CD/DVD drives
                  Glasses                                                                                                          Tires (precipitated silica)                                                            (aluminum nitride)
                   (plastic lens materials for glasses)                                                                            Hybrid cars (aluminum nitride)                                                         Optical communications (aluminum nitride)

       Business Segments and Major Products (including group companies)

      Specialty Products                                                                                                               Chemicals                                                                                                                   Cement, Building
      Our mainline electronic components-related                                                                                        Tokuyama commenced operations with                                                                                         Materials and Others
      business chiefly serves the electronic                                                                                            soda ash production. Soda ash is used in                                                                                    Cement is a key foundation material
      components market, in which IC chips are one                                                                                      glass, soap and other products; calcium                                                                                     supporting the social infrastructure and our
      of the principal items. These days, it has closer                                                                                 chloride in an antifreezing agent; isopropyl                                                                                lifestyles. Tokuyama accepts waste from
      relations with the field of solar power                                                                                           alcohol in solvents for paint and ink and                                                                                   inside and outside the Company and reuses it
      generation. The advanced materials business                                                                                       antiseptic solutions; and caustic soda,                                                                                     as recycled resources. The eco-friendly and
                                                                                                                                                                                                                                                                                                                       Cement and concrete
      supplies a broad spectrum of domestic and
      overseas customers with eyeglass-related
                                                                                                                                        chlorine and its derivatives as basic
                                                                                                                                        materials in many different sectors. The
                                                                                                                                                                                                      Food wrapping film                                            natural material of plaster is processed using
                                                                                                                                                                                                                                                                    our unique technology and made available as         Ordinary Portland cement is so versatile that it is
      materials, pharmaceutical ingredients,                                                                                            vinyl chloride business manufactures and                      (polypropylene film)
      permeable films, synthetic rubber reinforcing                 Solar cells                                                         sells vinyl chloride resin and its raw
                                                                                                                                                                                                                                                                    a building interior material.                       used in a broad array of applications, including
                                                                                                                                                                                                                                                                                                                        general civil engineering and construction works,
                                                                                                                                                                                                      Polypropylene films offer excellent                                                                               and cement secondary products. Ready-mixed
      agents, coating agents for printer paper and                  (polycrystalline                                                    material, vinyl chloride monomers.
                                                                                                                                                                                                      transparency and strength, and are highly
      other functional materials.                                                                                                                                                                                                                                                                                       concrete is classified into ordinary concrete for
                                                                    silicon)                                                                                                                          suitable to automatic wrapping, printing,
                                                                                                                                                                                                                                                                    [Principal Domestic Group Companies]                general works, road paving concrete, and
                                                                                                                                       [Principal Domestic Group Companies]                           and processing into bags. With advantages                                                                         lightweight concrete, which is lighter than
      [Principal Domestic Group Companies]                          Polycrystalline silicon is used as a                                                                                                                                                               Tokuyama Tsusho Trading Co., Ltd.
                                                                                                                                                                                                      in their resistance to chemicals and heat                                                                         ordinary concrete. Ready-mixed concrete mills
                                                                    material for solar cells in which silicon                               Shin Dai-ichi Vinyl Corporation
         A&T Corporation            Figaro Engineering Inc.                                                                                                                                           based on the characteristics of polypropyl-                      Excel Shanon Corporation                         provide a wide range of concrete by changing the
                                                                    substrates are used.                                                    Sun·Tox Co., Ltd.                                         ene, they are widely used in food wrapping,                                                                       ingredients and the formulas.
         Tokuyama Dental Corporation                                                                                                                                                                                                                                   Tokuyama Mtech Corporation
                                                                                                                                            Sun Arrow Chemical Co., Ltd.                              and wrapping for clothing and textile, as
         ASTOM Corporation                                                                                                                                                                            well as in many other applications.
                                                                                                                                            Tokuyama Siltech Co., Ltd.

7   Tokuyama CSR Report 2010                                                                                                                                                                                                                                                                                                                 Tokuyama CSR Report 2010             8
To kuyama Gro                                                                                      f                                     2009
                                                                                      sents some o

     al 2009
                                                                                                                                                        Expanded the helpline by                            An external contact point for the helpline services
                                                                    Th is section pre

                                                                                   iatives taken
                                                                                                                                     Aug.               launching a contact point for                       accepting notifications and inquiries was added in
                                                                    the major init                       09.
                                                                                           p in fiscal 20
                                                                                                                                                                                                            Tokyo. This contact point allows users to contact a
                                                                             uyama Grou                                                                 consultation with a lawyer in
                                                                     the Tok                                                                                                                                female lawyer, after some employees had indicated

                                                                                                                                                        Tokyo.                                              that they would find it easier to talk to a woman and

                                                                                                                                                                                                            that a lawyer based in Tokyo would be closer and

                                                                                                                                                                                                            easier to contact. Answering these opinions, this move
                                                                                                                                                                              2009                          was aimed at making it easier to use the helpline.

                                                                                                                                                                                               Initiative aimed at using Palm Kernel Shells
                                                                                                                                                                            Sep.               as a fuel.
                                                  Established the Tokuyama Group Code of
                                                  Business Activities and the Responsibility of
                                                                                                                                                                                       A test on the combustion of a mixture containing palm kernel shells
                                                                                                                                                                                     (PKS) was conducted with the No. 7 boiler at the Central Power Plant in
                                                  Senior Management Under the Tokuyama
                                                                                                                                                                                     the Tokuyama Factory. The test ended in March 2010.
                                                  Group Code of Business Activities.                                                                                                   As part of its efforts to prevent global warming, Tokuyama has been
                                                                                                                                                                                     researching alternative fuels to substitute for coal in power generation. This
                                                                                              P.20                                                                                   mixed fuel combustion test confirmed the utility of PKS as a fuel that
                                                                                                                                                                                     replaces coal. Tokuyama plans to introduce PKS as an alternative fuel,
                          Took part in the voluntary disaster relief activities                                                                      ells (fo  reground) and
                                                                                                                                      Palm kernel sh                                 reducing carbon dioxide emissions.
                          in the disaster-stricken area in Yamaguchi                                                                  the inlet
     Jul.                 Prefecture, after it was hit by torrential rain,
                                                                                                                                                                                       In fiscal 2010, at least 10,000 metric tons of PKS will be used for power
                                                                                                                                                                                     generation. In the future, the Company will reduce CO2 by 70,000 metric
                                                                                                                                                                                     tons on an annual basis by further utilizing PKS.
                          and offered a relief contribution for victims.                                                              2009

                                                                                                                                                        The second-phase construction of a fumed
                       Torrential rain caused a serious disaster in Yamaguchi Prefecture.
                                                                                                                                   Oct.                 silica plant was completed at Tokuyama
                                                                                                                                                        Chemicals (Zhejiang) Co., Ltd.
                   Many employees from the Company joined other volunteers from
                   different places to carry out relief activities. Aiming to help the
                                                                                                                                     Tokuyama Chemicals (Zhejiang) Co., Ltd. finished the second-
                   area achieve an early recovery, the Tokuyama Group offered a
                                                                                                                                   phase construction of a fumed silica plant and a plant for special
                   relief contribution in addition to employee donations.
                                                                                                                                   matting silica, with a ceremony for the completion held on October
                                                                                                                                   20, 2009. This increased annual production capacity of the subsid-
                                                                                                                                   iary by 5,000 metric tons, to a total of 10,000 metric tons, including
                                                                                                                                   that of the plant constructed during the first phase. In conjunction
                                                                                                                                   with the Tokuyama Factory, which produces up to 20,000 metric
              Aug.                Made a decision to build a polycrystalline silicon factory in Malaysia
                                  and established Tokuyama Malaysia Sdn. Bhd.
                                                                                                                                   tons, the Tokuyama Group now has Asia’s largest production
                                                                                                                                   capacity, with total annual output of 30,000 metric tons.

                                                       Tokuyama decided to build a new factory for manufacturing
                                                     polycrystalline silicon for solar cells at the Samalaju Industrial Park in
                                                     Sarawak, Malaysia. In August 2009, a manufacturing and sales firm was set
                                                     up under the name Tokuyama Malaysia Sdn. Bhd. After a preparatory
                                                     period, construction will commence in 2011 and the factory will begin                          Acquired certification under the Responsible Care
                                                     operating in the spring of 2013, with production capacity of 6,000 metric
                                                     tons a year.
                                                                                                                                   Mar.             Global Charter.
                                                       The building of the new polycrystalline silicon factory in Malaysia is in
                                                     line with the Company’s basic strategies of strengthening strategically                                                                                            P.22
                                                     growing businesses and strengthening its international competitiveness
                                                     under the Centennial Vision.
                                                                                                                                                              Established the Specialty Products Business Division to consolidate
                                                                                                                                           Apr.               the Si Business Division and the Advanced Materials Business Division

9   Tokuyama CSR Report 2010                                                                                                                                                                                                               Tokuyama CSR Report 2010   10
                                                                                                                                                                                                                                                Special Feature                                    Tokuyama’s CSR Activities                              Harmony with Society                        Harmony with the Environment
 Feature         1                 Toward Building a Sustainable Society

     Integration                                                                                                                                                                                                                          A highly efficient energy system based on in-house power generation
                                                                                                                                                                                                                                          At the heart of the integration in the Tokuyama Factory is its in-house power plant, which boasts
                                                                                                                                                                                                                                          one of the largest power generation capacities in Japan at 552,000 kilowatts. The electric power and
                                                                                                                                                                                                                                          steam generated are supplied through power lines and pipes to the electrolysis plant and other plants.

     in the Tokuyama Factory                                                                                                                                                                                                              The factory makes effective use of steam as well as electric power to attain high levels of energy
                                                                                                                                                                                                                                                                                In-house power generation facilities with one of the largest power generation capacities in Japan

     Tokuyama’s principal production facilities can be found in the Tokuyama Factory. Equipped with one of
     the largest in-house power generation facilities in Japan, this factory integrates diverse manufacturing                                                                                                                          An integrated, highly efficient production system
     processes in a highly sophisticated manner. With a highly efficient production structure, it has achieved                                                                                                                             Since it commenced operations in 1918, the Tokuyama Factory has                                              products, by-products, waste and utilities reciprocally. It continuously
                                                                                                                                                                                                                                       constantly pursued its vision of becoming an integrated production base,                                         seeks to make more effective use of these materials and energy.
     a zero emission rate of nearly 100%. The Tokuyama Factory is fully committed to building a sustainable                                                                                                                            where energy, materials, and technologies support close links among                                                   The Tokuyama Factory has been making exhaustive efforts to
     society, for instance by actively accepting waste from outside the Company in its cement business.                                                                                                                                different businesses. The factory has built a sophisticated integration                                          recycle by-products and waste generated from within. It has now
                                                                                                                                                                                                                                       system, in which multiple plants for inorganic and organic chemicals,                                            attained an outstanding green performance: in fiscal 2009, it effectively
                                       Higashi Plant                                                                                                                                                                                   cement, electronic materials, and other products are arrayed in a                                                utilized 94% of waste and achieved a zero emission rate of 99.9%.
                                                                                                                              The Tokuyama Factory is located in the Shunan Petrochemical
                                        Produces polycrystalline silicon and organic chemicals                                                                                                                                         layout designed to enable them to make effective use of raw materials,
                                                                                                                              Complex fronting the Seto Inland Sea in the southeastern part
                                                                                                                              of Yamaguchi Prefecture. It is Tokuyama’s core production
                                                                                                                              base. With an area of 1.91 million square meters, it is one of
                                                                                                                              the largest factories in Japan. It is equipped with great harbor
                                                                                                                                                                                                                                                          Sun·Tox Co., Ltd.                                Tokuyama Polypropylene Co., Ltd.
                                                                           Undersea tunnel                                    infrastructure, including 22 in-house berths with the depth of
                                                                                                                              12 meters and one 14-meter-deep public wharf.
                                                                                                                                                                                                                                                                                                                                                                                                                        Mitsui Chemicals,
                                                                                                                                                                                                                                                                                                         IPA                                                               PO                                                  Inc.
                                                                                                                                                                                                                                         Petrochemical Complex                                                                                                            EDC                      VCM                  Shin Dai-ichi Vinyl
 JR Tokuyama Station
                                                                                                                                                                                                                                                                                                                                                  Cl2                 Chloride
                                                                                                                                                                                                                                                                                                       nitride                                                      Chloromethane

                                                                                                                                                                                                                                        Tokuyama Siltech Co., Ltd.                                      NaOH                             Electrolysis                   Polycrystalline                                         Metallic
                                                                                                                                                                                                                                                                                                                                                                            silicon                                             silicon
                                                                                                                                         Nanyo Plant                                                                                                        Crude                                                                                                         H2
                                                                  Tokuyama Plant
                                                                                                                                         Produces cement                                                                                                     salt                                 Zero emission                            Power
                                                                  Produces inorganic chemicals                                                                                                                                                                                                                                       generation facilities                               Fumed silica
                                                                                                                                                                                                                                                                                                                                             Soda ash
                                                                                                                                                                                                                                                     Zero emission                                                                                                                                                            Shunan
        Cement plant                Recycling operations open to society                                                                                                                                                                                  Waste                                        Cement                                                                                                              Petrochemical
            The cement plant in the Tokuyama Factory makes effective use of the by-                                           Trend in unit consumption of waste and by-products
        products from the Company’s soda ash plant and coal ash from in-house power                                                                                                                                                                                                                    Silica            Limestone
                                                                                                                             (kilograms per metric ton of cement)                                                                        Yamaguchi Eco-tech Corporation                                stone                                             Coal
        plants as raw materials. It also accepts a large amount of waste and by-products                                      500

        from outside the Company, and takes a recycling approach that is open to                                             400                420        425       430      424          414                                                              Post-combustion                                                                                       Accepting waste from outside the Company
        society. A combination of this cement plant and the in-house power plants forms                                      300                                                                                                                                                                                                                                           The Tokuyama Factory accepts a large amount of waste,
        the nucleus of integration at the Tokuyama Factory. A significant percentage of                                                 277                                                                                                                                                                                                                             not only from neighboring areas but also from remote regions.
                                                                                                                                                                                                                                                    No residue
                                                                                                                             200                                                                                                                    generated                                                                                                                 The waste is then treated for effective application.
        waste and by-products can be used as raw materials for cement production, as
                                                                                                                                                                                                                                                                                                                                                                                           Community and Society
        they contain certain elements that are identical to those contained in clay, one                                                                                                                                                        Reused
        of the raw materials for cement.                                                                                        0
                                                                                                                                        1991    2005       2006      2007     2008        2009
           Combustible waste can also be used as an energy source. The temperature                                                                                                         (Fiscal year)
                                                                                                                              Trend in material and thermal recycling volumes
        in the cement kiln*1 reaches 1,000 to 1,800 degrees Celsius. At this high
                                                                                                                             (thousand metric tons)                                  (thousand metric tons)
        temperature, combustible elements are reduced to ash, which is used as an                                             2,500                                                               125                                       Material recycling                                Thermal recycling                                                                      Major types of waste handled*
                                                                                                 Material recycling volume

                                                                                                                                                   2,143     2,144    2,100
                                                                                                                                                                                                            Thermal recycling volume

                                                                                                                                                                                                                                            (into material): 1.56 million metric tons         (into fuel): 70,000 metric tons
        ingredient for cement. This makes the cement kiln quite unlike an incinerator,                                       2,000
                                                                                                                                                                                                   100                                                                                                                                                            Waste plastics (soft, hard), construction sludge, water supply sludge,
                                                                                                                                        1,550                                            1,561                                                Sludge, surplus soil, dehydrated                  Waste plastics2) (excluding
        in that it generates no residue. In fiscal 2009, the factory recycled 1.63 million                                                                                                                                                    cakes of refuse incineration ash1),               polyvinyl chloride), heavy oil ash,
                                                                                                                                                                                                                                                                                                                                                                  sewage sludge, paper sludge, fuel sludge, factory wastewater sludge,
                                                                                                                             1,500                                                                 75                                                                                                                                                             construction waste soil, purification of contaminated soil, waste
        metric tons of waste and by-products, including 0.26 million metric tons                                                                                       82     80                                                              coal ash, waste liquid, and slag                  discarded tires, animal residue,
                                                                                                                                                   70         70                           70                                                                                                   wood waste, and waste liquid                                      incinerator ash, coal ash, heavy oil ash, waste tires, meat and bone meal,
        generated within the Company.                                                                                        1,000                                                                 50
                                                                                                                                                                                                                                          1 The factory accepts incineration ash generated from municipal refuse incineration facilities in                       wood scraps, waste photographic developer, expired beverages,
           Committed to helping to create a recycling society, the Tokuyama Factory                                            500                                                                 25                                       Yamaguchi Prefecture after pretreatment by Yamaguchi Eco-tech Corporation, a joint venture of the                     flammable waste fluid, waste alkali, clinker ash, burnt residue and others
                                                                                                                                          4                                                                                                 Company and Ube Industries, Ltd.
        continues with its steady efforts to turn itself into a more advanced production base.                                      0                                                               0                                     2 A technology has been developed to enable the stable injection of crushed waste plastics in large
                                                                                                                                                                                                                                                                                                                                                                * Other types of waste may be treated.
                                                                                                                                         1991    2005       2006     2007     2008        2009                                              quantities from the front of the kiln. The crushing and combustion capacity is boosted each year to
        *1 Cement kiln: A rotary kiln used for sintering raw materials in the cement plant                                                                                                                                                                                                                                                                        The above waste materials may not be treatable depending on the properties, conditions,
                                                                                                                                                                                            (Fiscal year)                                   meet the growing demand to accept the waste plastics.
                                                                                                                                                                                                                                                                                                                                                                  shapes and/or components.

11   Tokuyama CSR Report 2010                                                                                                                                                                                                                                                                                                                                                                                Tokuyama CSR Report 2010                       12
                             With the Growth of                                                                                       Special Feature                    Tokuyama’s CSR Activities          Harmony with Society                Harmony with the Environment
 Feature        2            China’s Huge Consumption Market
                                                                                                                                   ■ Examples     of applications of air-permeable film                                                                    Water and other liquid

                                                                                                                                   1. Packaging materials: Dehumidifying agents, deoxidizing agents and

     Shanghai Tokuyama Plastics                                                                                                       freshness preserving agents
                                                                                                                                   2. Separation membrane: Films for mushroom cultivation
                                                                                                                                   3. Sanitary materials: Disposable diapers for babies and adults and
                                                                                                                                      sanitary napkins

     Expansion of Air-permeable Film Business in China                                                                             4. Medical care: Bed sheets, surgical gowns and medical tapes
                                                                                                                                   5. Clothing: Simplified rain garments, work clothes and clothes for
                                                                                                                                                                                                                                                         Water vapor, air and other gas
                                                                                                                                   6. Building materials: House wrap sheets and sheets for roofing                                                          Microporous film sheet
                                                                                                                                      materials                                                                                                             Reinforcing material
                                                                                                                                                                                                                                                            (e.g. nonwoven fabric)
                                                                                                                                   7. Agricultural materials: Mulching sheets and composting sheets
                                                                                                                                   8. Other: Sheets for outdoor use and sheets for pets                                                         Composition of the film (laminated)
     The Tokuyama Group has set a goal of increasing overseas sales to 30% or more of total sales by 2018
     in its Centennial Vision. Playing a role in the Group’s growing overseas market presence, specifically
     in the field of functional materials, Shanghai Tokuyama Plastics was founded to supply high quality
                                                                                                                               CSR Commitment of Shanghai Tokuyama Plastics
     sanitary materials in the Chinese city of Shanghai, supporting the Asian operations of disposable diaper                      It is said that disposable diapers begin to find widespread            have completed the program. Emphasis is also placed on
                                                                                                                               application as per-capita GDP exceeds 5,000 US dollars.                    expanding exchanges with Tokuyama’s technical personnel
     manufacturers. The second-phase project for adding a new plant will boost annual production capacity                      Disposable diapers have found rapidly growing demand in large              on a broad variety of subjects, including manufacturing
     to 4,500 metric tons in 2011. The company aims to achieve sustainable growth in China, a rapidly                          cities such as Beijing, Shanghai and Guangzhou, where per-                 technologies, quality and the environment.
                                                                                                                               capita GDP is around 10,000 US dollars, compared with the
     growing consumer market, in step with the growth of the class of middle-income earners.                                   nationwide figure, which is still low at around 2,000 US dollars.          •Commitment to the environment
                                                                                                                                   Shanghai Tokuyama Plastics supplies microporous films                      Shanghai Tokuyama Plastics is taking action to protect the
                                                                                                                               as a material for disposable diapers and other products to                 environment in its offices and on the factory floor. To reduce
                                                                                                                               its client manufacturers. As a member of the Tokuyama                      energy consumption, lights are turned off during breaks and
                                                                                                                               Group, which is trusted by society and whose members                       temperature control with air conditioners is in place. In the film
                                                                                      Shanghai Qingpu Industrial Zone          are each the enterprise of first choice for their customers,               production process, end portions that cannot be included in
                                                                                                                               Shanghai Tokuyama Plastics understands that its mission is                 products are crushed and melted so that they can be reused
       Basic Policy for Business                                         Shanghai Tokuyama Plastics Co., Ltd.                  to offer products and services with fine and stable quality.               as raw materials. This is part of our efforts to boost the waste
       Development in China                                                                                                    This edition of CSR Report looks at the initiatives taken by               recycling ratio and achieve zero emissions. In addition to these
          Air-permeable film is actively used worldwide as a                                                                   Shanghai Tokuyama Plastics as it seeks to boost its corporate              day-to-day efforts, the company has since fiscal 2008 been
                                                                          Corporate Profile
       constituent of sanitary materials for disposable diapers and                                                            value in China, a huge and fast-growing consumer market.                   working with a non-profit organization in an afforestation initiative
       other products.                                                   Business: Manufacture and sale of microporous films                                                                              in the Huangtu Highlands in Datong, a city in the Chinese
          The Chinese economy is growing at an impressive pace.          Location: Qingpu Industrial Zone, Shanghai            •Respecting fundamental human rights                                       province of Shanxi. By donating for this afforestation activity the
       As its gross domestic product (GDP) rises, demand for                                                                       Any business with strong roots in its community must                   company helps improve the local environment in China.
                                                                         Capital: 11.3 million US dollars
       disposable diapers is climbing rapidly each year. We have the
                                                                         (as of the end of May 2010)                           of course follow not only local laws and regulations on
       opportunity to expand our business. The company believes
       that this growth will pave the way for extensive operations,
                                                                         Ownership: Tokuyama Corporation 100%                  employment and labor, but also corporate ethics. Based on                  •Actions toward ISO 9001 and 14001
                                                                         Site Area: 26,000 m2                                  laws and regulations, labor practices and labor-management                  certification
       not only in the current field of sanitary materials, but also
                                                                         Production Capacity: 4,500 metric tons a year after   relations in China, Shanghai Tokuyama Plastics has adopted                    Shanghai Tokuyama Plastics has been
       in non-sanitary areas such as dehumidifying agents and
                                                                         completion of the second phase project                a set of guidelines for its business, which call for respect               certified with ISO 9001 since August
       agricultural mulching sheets.
          Consistently working to cut costs while offering the quality   Date of Foundation: September 29, 2002                for fundamental human rights and dignity, specifically                     2006. It is preparing to gain ISO 14001
       sought by customers and bolstering the stability of quality,      Number of Employees: 70                               prohibiting discrimination, guaranteeing the right to organize             certification in November 2010.
       Shanghai Tokuyama Plastics will be taking timely action to        (as of the end of May 2010)                           and prohibiting forced labor. To improve the effectiveness of
                                                                                                                                                                                                                       Aiming to become an environmentally
       capitalize on opportunities to expand, with the aspiration of                                                           its guidelines, employees carry out self-check activities.                  Voice friendly organization
       achieving steady growth.
          No business expansion like this can be achieved without                                                              •Employee safety education                                                        In rapidly growing China, environmental considerations are
       employee education. A duty performance and control
                                                                                                                                   Film forming is a hazardous process, as part of a worker’s                 emerging as increasingly important. In operating a factory, it is
       system based on the plan-do-check-
       act (PDCA) cycle is being used
                                                                                                                               body may be caught                                                             essential to reduce the impact on the environment while improving
                                                                                                                               by the rolls, burnt                                                            quality. Shanghai Tokuyama Plastics understands its responsibility to
       throughout the company to ensure
                                                                                                                                                                                                              the local community, to society and to its customers.
       that individual employees take                                                                                          by a heated object
                                                                                                                                                                                                                 Shanghai Tokuyama Plastics is endeavoring to build a structure
       responsibility for results, as well as for                                                                              or cut in the process
                                                                                                                                                                                                              with the intention of attaining ISO 14001 certification in fiscal
       their own acts (tasks).                                                                                                 of using a cutter.                                                             2010, as part of its initiatives for minimizing its environmental
                                                                                                                               Shanghai Tokuyama                                                              footprint. Given that it is people who work toward achieving goals,
      Shinichi Kawahara                                                                                                        Plastics regularly                                                             we need to step up educational activities to change individual
      President, Shanghai Tokuyama                                                                                             provides employees                                                             mindsets. First, we will all ensure that
      Plastics Co., Ltd.                                                                                                       with safety education,                                                         we do everything possible as individuals.
                                                                                                                               such as hazard                                                                 With this approach, we will aim to
                                                                                                                                                                                                              become environmentally aware people,
                                                                                                                               prediction training
                                                                                                                                                                                                              so that we can then make our factory an
                                                                                                                               and improvements in indication using photographs. Since
                                                                                                                                                                                                              environmentally friendly one.
                                                                                                                               fiscal 2009, it has been running a safety education program
                                                                                                                               that includes experience with danger, with the use of the Skills
                                                                                                                                                                                                                               Haruo Kishita
                                                                                                                               Education and Training Center on the premises of Tokuyama                  Manager of the Technical Development
                                                                                                                               Corporation’s Tokuyama Factory. A total of nine employees                                            Department
                                                                                                                                                                                                           Shanghai Tokuyama Plastics Co., Ltd.

13   Tokuyama CSR Report 2010                                                                                                                                                                                                                        Tokuyama CSR Report 2010             14
                                      Evolution of Traditional Building Materials to                                                                                                                               Special Feature                               Tokuyama’s CSR Activities                                 Harmony with Society                       Harmony with the Environment
 Feature            3                 Open a New Environmental Era
                                                                                                                                                                                                             The key concept of the Shikkui Lemarge, “Durability for                                                     growing tendency to regard buildings as a social stock and
                                                                                                                                                                                                         the Future,” is associated with the Japanese virtues of using                                                   to appreciate Japan’s traditional building materials as having

     Shikkui Lemarge
                                                                                                                                                                                                         good items for a long time with due respect and developing                                                      value lasting for years.
                                                                                                                                                                                                         an attachment to articles. It is also linked to the notion of                                                       Reflecting these trends, Tokuyama has focused on
                                                                                                                                                                                                         MOTTAINAI, the Japanese word used in the worldwide                                                              plaster, as a material that has undergone a unique evolution
                                                                                                                                                                                                         resource conservation campaign of the United Nations                                                            in Japan. The Company has applied a new technology to

     An Interior Finishing Material                                                                                                                                                                      Environment Programme (UNEP).
                                                                                                                                                                                                             Starting during the period of rapid economic growth, the
                                                                                                                                                                                                                                                                                                                         successfully develop a flexible sheet with the thickness of
                                                                                                                                                                                                                                                                                                                         0.4 mm. This has changed plasterwork from a sophisticated
                                                                                                                                                                                                         scrap-and-build practice was taken for granted as people                                                        performance by skilled plasterers to sheet application geared
     with Durability for the Future                                                                                                                                                                      placed great value on new construction. These values and                                                        to contemporary construction.
                                                                                                                                                                                                         attitudes have been changing in recent years. There is a
     Plaster* originated in Egypt and was brought to Japan via Europe and China.
     Tokuyama has incorporated new technologies into plaster with distinguished fireproof                                                                                                                Today’s plastering method created using Tokuyama’s unique technology
     properties and durability, after its evolution peculiar to Japan. Moving toward a new
                                                                                                                                                                                                             With Shikkui Lemarge interior material, traditional plastering is done                                      it is cut into predetermined sizes. In a tightly sealed state, the ratio of the
     era for the environment, Tokuyama will commercially promote this new plaster                                                                                                                        using a dry process. It suits today’s construction method, in which most                                        chemical reaction of the plaster is around 60%. The material is delivered
                                                                                                                                                                                                         processes are performed dry, and is characterized by a unique three-                                            to construction sites in this condition. Because of its low ratio of chemical
     material as an eco-friendly building material originating from Japan for worldwide application.
                                                                                                                                                                                                         layer structure. Plaster is coated on base paper, dried under pressure, and                                     reaction, work can be done in a state in which the plaster is relatively
                                                                                                                                                                                                         a protective sheet is laminated on top of it. After the lamination process,                                     soft. After the work, it gradually hardens into a hard plaster finish.

                                                                                                                                                                                                               Production process                                                                                                                     Product composition
                                                                                                                                                                                                                                                                                                                                                                          Base paper
                                                                                                                                                                                                                      Slaked Pigment Water
                                                                                                                                                                                                                       lime                                                                               A protective sheet is laminated                                                         Plaster
                                                                                                                                                                                                                                                                                                          on the surface of the plaster layer
                                                                                                                                                                                                                                                                                                          and the finished sheet is rolled up.                                                     Protective sheet
                                                                                                                                                                                                                                 Mixing                          Pressurization and drying                                                                                                            Structural View
                                                                                                                                                                                                                         Paste                                                                                                      Rolling                                                           Protective sheet
                                                                                                                                                                                                                                      Coating                                                                                                                                          (to be removed after application)
                                                                                                                                                                                                                                                                                                                                                                                  Plaster layer
                                                                                                                                                                                                                         Base paper                                                                                  Product                                                      Base paper

                                                                                                                                                                                                         A hard and durable finish
                                                                                                                                                                                                            As it touches the air after application, the Shikkui Lemarge
                                                                                                                                                                                                         gradually hardens into a firm plaster finish. Over time, it
                                                                                                                                                                                                         develops an increasingly attractive look to produce a high-
                                                                                                                                                                                                         quality space.
                                                                                                                                                                                                         After application, the plaster reacts with carbon dioxide in the air to become harder.
                                                                                                                                                                                                         Right after the work, it is as hard as a 3B-grade pencil. One month later, it is as hard as
                                                                                                                                                                                                         an H-grade pencil.
 Custo ack
                                                                                                                                                                                                           The ratio of chemical reaction                        Surface hardness of the Shikkui Lemarge T
                                                                                                                                                                                                           of the plaster (%)                     Timing         (in pencil hardness grade)

  feedb                                                                                                                                                                                                             60                        Right after work                               3B

     Shikkui Lemarge provides the comfort associated with traditional                                                                                                                                       85                                  One week
                                                                                                                                                                                                                                                after work
     townhouses in Kyoto.                                                                                                                                                                                 90                                    One month                                             H                  Office                                          Residential house
                                                                                                                                                                                                                                                after work
           Plaster is an interior material with a                             the well hole, and I feel a touch of class in
        beautiful reflection of light. I first saw it                         the time and atmosphere. As I touch the
        at my grandfather’s townhouse in Kyoto.
        I still remember the unique atmosphere
                                                                              wall, I feel its natural texture. Since we
                                                                              started living in this house, my son—who
                                                                                                                                                                                                         An eco-friendly housing remodeling with lasting effect
        and ambience that I felt in my childhood.                             has sensitive skin—has been consistently                                                                                       After hardening, the Shikkui Lemarge has a hard surface,                                                       New construction 10 years later 20 years later 30 years later
        When I happened to see Shikkui Lemarge                                healthy. I am happy with this new house,                                                                                   providing a semi-permanent finish. In contrast with wallpaper,
                                                                                                                                                                                                         which is designed to ultimately be replaced, the surface of the                                                                  New              First            Second             Third
        at an exhibition, I thought that it could add                         which can be left to my children.                                                                                                                                                                                                          Wallpaper        construction     remodeling       remodeling         remodeling
        the same comfort I saw in the traditional                                                                                                                                                        Shikkui Lemarge serves as a base when future improvements
        townhouse to my own home.                                                                                                                                                                        are made. The fire prevention performance is certified in a                                                                             Replacement      Replacement     Replacement
           After introducing it, I find that it looks                                                                                                                                                    state in which a second Shikkui Lemarge is applied over the
        best in the evening twilight, when the                                   Mr. Shimada in Takatsuki, Osaka Prefecture                                                                              first Shikkui Lemarge, which becomes the base.                                                                   Shikkui        New
        lights come on. I see the gentle light in                                                                    (Adopted in 2008)                                                                                                                                                                                   Lemarge         construction
                                                                                                                                                                                                                                                                                                                                                                                                   The first sheet
                                                                                                                                                                                                            At the time of new construction                At the time of housing remodeling
                                                                                                                                                                                                                                                                                                                                                                                                   can be used
                                                                                                                                                                                                                             Gypsum wallboard                                                                                           If an improvement is sought
     * What is plaster?                                                                                                                                                                                                                                                                                                                                                                            until reconstruction.
     Plaster is a building material that excels in waterproof and humidity control properties, to the extent that it has long been used as a top coating material on the earthen interior and exterior
     walls of storehouses and residential houses.                                                                                                                                                                                                                             The first-applied                                                             Apply second sheet     The base is not damaged.
     It is said to date back to 3000 BC, when it was used on the walls of Pyramids in Egypt. It was also found in buildings in the ancient Greek and Roman periods. In Asia, it was brought via                                                                               Shikkui Lemarge S                                                            over previous one.     It is easy to adjust the base.
     the Silk Road to China and to Japan. The Horyuji Temple is considered Japan’s oldest application of the material. In Japan, a unique technique was established during the Warring States                                                                                 serves as a base.
     Period as a wall material for castle construction, according to which plaster is prepared by adding hemp and straw fibers as well as adhesives obtained from herbal plants and seaweeds,
     water and other ingredients to lime. This method produces the refined whiteness that reflects the fine sensibilities of the Japanese people, while also providing outstanding fireproof
                                                                                                                                                                                                          First-applied                           A second-applied                                                       *The timing for wallpaper replacement shown above is provided as typical examples.
     performance and durability.                                                                                                                                                                          Shikkui Lemarge S                       Shikkui Lemarge S

15   Tokuyama CSR Report 2010                                                                                                                                                                                                                                                                                                                                                Tokuyama CSR Report 2010                      16
                                                                                                                                                                     Special Feature                  Tokuyama’s CSR Activities                        Harmony with Society          Harmony with the Environment
                                                                            The Tokuyama Group has a basic management policy of practicing
                                                                            management in harmony with society so as to coexist with and
                                                                            achieve a shared success with society and thereby establish itself

CSR Activities                                                              as a business grouping which is trusted by society and whose
                                                                            members are each the enterprise of first choice for their customers.

                                                                                                                                                             Tokuyama Group Code of Business Activities                                                                                       Established: May 12, 2009

     What Are Tokuyama’s CSR Activities?                                                                                                                     All Tokuyama Group members will commit to operating in a way that is compatible with society and to fulfilling the Group’s corporate
                                                                                                                                                             social responsibility, following the principles below and endeavoring to achieve sustained growth by earning the support of our clients.

                                                                                                                                                               ❶ Compliance
         Tokuyama approaches its CSR activities in accordance
                                                                                   Message                                                                         We act with good corporate ethics and common sense, based on the understanding that compliance                   p. 20 Promoting Compliance
     with its basic policy of engaging in management in harmony
                                                                                                                                                                   with laws and corporate rules is the most important requirement in pursuing any kind of business.
     with society. We believe that CSR activities help give us the                 Practicing
     continuation of our business and enable us to work with society                                                                                           ❷ Fair Business Activities
     to build a sustainable future. To increase stakeholder satisfaction,          CSR Management                                                                  • We aim to be moderate and reasonable in our business through fair, free, and transparent competition.
                                                                                                                                                                                                                                                                                    p. 36 Relationships with
                                                                                                                                                                                                                                                                                    Trading Partners
     we commit to corporate activities that are welcomed by the                                                                                                    • We will maintain fair and reasonable relation with political and governmental organizations.
     society of which each stakeholder is part.
                                                                                               Masao Fukuoka
                                                                                               General Manager,                                                ❸ Responsible Care
         We see bolstering management transparency as a                                        Corporate Social Responsibility Div.
                                                                                                                                                                   • We develop, produce and supply products and services that have value to the community, with a constant         p. 22-24 RC Promotion
     fundamental part of our CSR. We are also committed to a
                                                                                                                                                                     focus on safety requirements, so that we can satisfy our clients and consumers and earn their trust.           Structure and Operation of
     program of promoting sound corporate governance and to                           The Tokuyama Group follows a management policy of                            • We voluntarily and proactively address environmental issues based on an understanding of their                 Management Systems
     building an internal control system and a compliance system, to               practicing management in harmony with society.                                    significance to all mankind and their importance to the continuation of business activities.
     ensure comprehensive risk management.                                            The incident involving plastic window sashes troubled
         The Tokuyama Group has been pursuing an initiative that it                                                                                            ❹ Respect of Human Rights and Personality
                                                                                   our customers and other stakeholders. Our Group has
     calls Sunflower Activities, designed to permanently instill within                                                                                            • We respect the basic rights of people in our business and will do not discriminate on the
                                                                                   been striving to regain trust by proceeding sincerely with                                                                                                                                       p. 33-34 Relationships
                                                                                                                                                                     bases of race, sexuality, creed, nationality or religion.
     the Group the essence of internal control.                                                                                                                                                                                                                                     with Employees
                                                                                   action to prevent a recurrence of the incident, based on the                    • We value diversity in the workplace and will provide a safe and comfortable working
        Under the Tokuyama Group Code of Business Activities, we                                                                                                     atmosphere to provide satisfaction and opportunity to each employee.
     seek to practice management in harmony with society, to make                  recommendations of an external investigative committee.
     the Group into a business grouping whose members are each                     We have finished all short-term measures and our medium-                    ❺ Communications
                                                                                                                                                                                                                                                                                    p. 35 Relationships
     the enterprise of first choice for their customers, and to build              term measures are currently underway. I am convinced that                       We make fair and positive public disclosure of information about our Group including its
                                                                                                                                                                                                                                                                                    with Shareholders
     excellent relationships with all stakeholders.                                these efforts have steadily improved the governance of the                      business activities and financial reports to maintain good communication with society.

                                                                                   Tokuyama Group.
                                                                                                                                                               ❻ Social Contributions
                                                                                      We will continue to review our social responsibility and                     • We actively seek to contribute to our community as a good corporate citizen.                                   p. 29-32 Relationships
                                                                                   further strengthen our CSR management.                                          • We contribute to the development of local regions in our international business activities, respecting         with Communities and Society
                                                                                                                                                                     not only international rules, local laws and regulations but also local cultures and customs.

                                                                                                                                                               ❼ Exclusion of Antisocial Forces
                                                                                                                                                                   We will not enter into any business arrangement with antisocial forces that threaten public order and safety.

     ■ Tokuyama’s CSR Approach
                                                                                                                                                           ■ Tokuyama’s Major Stakeholders
                     Basic Policy

                                                                                                                                       Creating value
                                                                                                                                                           Relationships with Customers (p. 26)
                                                                                                                                                           Tokuyama conducts customer-focused
                                                                                                                                                                                                                                      Society                                      Harmony with the Environment (p. 39)
                                                                                                                                                                                                                                                                                   Tokuyama conducts environmentally
           Management in harmony with society                                                   Basic Philosophy
                                                                                                                                      that is helpful to   quality assurance activities based on                                                                                   friendly management operations with an
           • Think and act from                                                                                                         life anywhere      implementation of its ISO 9001-compliant                                                                                emphasis on the environmental
             the customers’ standpoint                                                                                                   and anytime       quality management system. Chemical                                                                                     perspective in every aspect of its business
           • Anticipate the trend of the times                                                                                                             substances are comprehensively managed                                                       Global                     activities.
                                                                                                    Basic Policy                                           to ensure safety at all stages of the                                                    environment
                                                                                                                                                           manufacturing process.                                                                                                  Relationships with Communities
          Management inspired by denial                                                 Management in harmony with society
                                                                                                                                                                                                                                                                                   and Society (p. 29)
           • Overcome stereotypes                                                                                                                          Relationships with Employees (p. 33)                                                                                    Tokuyama is engaged in many different
             and break free of precedents                                            Implementation of CSR activities                                      Tokuyama strives to improve the working                                                                                 activities directed at making a contribution
           • Continue with reforms every day                                                                                                               environment so that every individual                                                                                    to society. They include financial support
                                                                                             Build good relationships                                                                                                                                             Communities
          Management from a future perspective                                               with various stakeholders
                                                                                                                                                           employee can exhibit their abilities and         Employees                Tokuyama                      and society
                                                                                                                                                                                                                                                                                   for scientific development and technology,
                                                                                                                                                           perform their duties actively and with a                                                                                activities to develop the next generation
           • Take a long-term perspective                                                                                                                  high level of motivation. In fiscal 2009, we                                                                             and local volunteer activities. We are also
                                                                                                                                                           focused our energies on bolstering our                                                                                  working on communication with local
           • Take advantage of the risks                                                        CSR foundations
                                                                                                                                                           front-line capabilities, developing human                                                                               communities by providing opportunities for
                                                                                                Corporate governance
           Management with an emphasis                                                                                                                     resources, and improving the mental and                                                                                 local RC dialogues.
                                                                                      Internal control (Sunflower Activities)
           on personality                                                                                                                                  physical health of our employees.                                Trading
                                                                                       Strengthen the compliance system                                                                                                                             Shareholders
                                                                                                                                                                                                                            partners                                               Relationships with Shareholders (p. 35)
           • Aim to be a unique company                                            Practice the basic philosophy (action objectives) of
                                                                                         responsible care (RC) and RC activities                           Relationships with Trading partners (p. 36)                                                                             Tokuyama offers information in a prompt
           • Cultivate the personalities of                                                                                                                                                                                                                                        and appropriate manner to gain the
                                                                                                                                                           Tokuyama is committed to creating relationships of trust
             individual employees                                                 Tokuyama Group Code of Business Activities                                                                                                                                                       understanding and trust of shareholders
                                                                                                                                                           with all trading partners through honest business dealings.
                                                                                                                                                           Tokuyama also practices CSR in its purchasing activities.                                                               and investors.

17   Tokuyama CSR Report 2010                                                                                                                                                                                                                                                              Tokuyama CSR Report 2010              18
                                                                                                                                                                                         Special Feature               Tokuyama’s CSR Activities      Harmony with Society           Harmony with the Environment

Tokuyama’s CSR Activities

     The Foundation of CSR                                                                                                                                                      Internal Control System
                                                                                                                                                                                    Since fiscal 2006, the Tokuyama Group has been working
                                                                                                                                                                                on an initiative titled Sunflower Activities. This is an effort
                                                                                                                                                                                                                                                     Responsibility Division acts as the Sunflower Committee office.
                                                                                                                                                                                                                                                     Fiscal 2009 was the second year of work to implement the
     — Being a Trusted Company                                                                                                                                                  to continually improve the internal control system and to
                                                                                                                                                                                establish internal control within the Group. Drawing an
                                                                                                                                                                                                                                                     internal control reporting system under the Japanese version
                                                                                                                                                                                                                                                     of the Sarbanes-Oxley Act (or J-SOX). We focused in particular
                                                                                                                                                                                analogy with a sunflower facing the sun, the name of the             on steps to construct and improve the system. Expanding the
     As a manufacturer, Tokuyama’s social mission is to develop, manufacture, and supply society with useful products                                                           initiative represents our sincere attitude and our determination     scope of the system to ensure that operations are appropriate,
     with full consideration given to the environment and safety. In pursuing this mission, we have adopted the basic                                                           to discharge our duties.                                             we made refinements to the system in an
     policy of practicing management in harmony with society. To follow our basic policy and fulfill our corporate                                                                  The Sunflower Committee has been established as a body           integrated manner for the whole Group.
     social responsibility, and to make the Tokuyama Group into a business grouping whose members are each                                                                      to ensure that the initiative is carried out throughout the Group.   The work involved a commitment to risk
                                                                                                                                                                                Headed by the president, it discusses and makes decisions            management activities fundamental to
     the enterprise of first choice for their customers, we understand that it is essential that we constantly improve
                                                                                                                                                                                on basic matters that relate to internal control, and strives        internal control and an understanding
     corporate governance, construct and improve an internal control system, and develop a compliance system.
                                                                                                                                                                                to create, develop, and operate the framework for ensuring           of the status of control of relevant laws
                                                                                                                                                                                that operations are conducted appropriately. Responsible for         and regulations as well as the status of
     Corporate Governance Structure                                                                                                                                             handling practical aspects of the initiative, the Corporate Social   compliance.

     Corporate Governance Structure                                                                                                                                             Promoting Compliance
         The corporate governance system is an essential part                            the directors and associate directors. At least one auditor
     of improving corporate value. We believe that we need to                            participates in Executive Committee meetings to comment as
                                                                                                                                                                                    The Tokuyama Group regards compliance as central to CSR          • Compliance Promotion System
                                                                                                                                                                                and internal control and indispensable to the continuation of            We have established a Compliance Committee headed by
     conduct daily inspections and to take the necessary steps to                        required. A framework for auditing the overall execution of
                                                                                                                                                                                its business activities. Stepping up compliance efforts is part of   the president and consisting of six directors. The Committee
     ensure that the system always operates appropriately.                               business is thus maintained.
                                                                                                                                                                                our key management challenges. We understand that the con-           makes decisions on the basic philosophy, Company policies,
         The Board of Directors meeting is held at least once a                             At present, the Board of Auditors has four members, two
                                                                                                                                                                                cept of compliance is not confined to merely observing laws          structures, and organizations related to compliance and offers
     month to make resolutions on basic Group policies and strat-                        of whom are external auditors. Auditors attend meetings of
                                                                                                                                                                                and ordinances, but that it has a broad sense including com-         proposals to the Board of Directors. It provides guidance,
     egies, to discuss and make decisions on important business                          the Board of Directors and other key meetings to oversee the
                                                                                                                                                                                pliance with social and internal rules and sensible behaviors        education and the raising of awareness on compliance across
     matters and to supervise business operations. As of the end                         work of directors and ensure that it is appropriate. They also
                                                                                                                                                                                based on corporate ethics. This is proclaimed in the Tokuyama        the Group, while dealing with information and inquiries to the
     of June 2010, the Board of Directors consisted of 14 directors                      regularly exchange information and views with the internal
                                                                                                                                                                                Group Code of Business Activities, which serves as action            helpline.
     and was chaired by the chairman. A director’s term of office                        auditing section and accounting auditors and work in mu-
                                                                                                                                                                                guidelines for every single officer and employee in the Group.       ■ Compliance Promotion System
     is set at one year, to allow both a focus on the duties and                         tual collaboration with them to increase auditing effective-
                                                                                                                                                                                    The Responsibility of Senior Management under the
     responsibilities of offices and a rapid response to changes                         ness and efficiency. In addition, auditors attend discussions                                                                                                                           Reporting and instructions
                                                                                                                                                                                Tokuyama Group Code of Business Activities has been                                                   (anonymously)
     in the business environment. The Executive Committee has                            between accounting auditors and senior management to                                                                                                        Auditing Department                                      Helpline
                                                                                                                                                                                established in writing, setting out strict rules to be followed
     been set up as a body advising the president on matters to be                       exchange opinions.
                                                                                                                                                                                by Tokuyama’s executives and counterparts in Group firms                       Communication
     referred to the Board of Directors and other critical issues of                        Our internal auditing framework consists of the Auditing                                                                                                                           Compliance
                                                                                                                                                                                as leaders of organizations. Moreover, Tokuyama Group’s                        Communication
     management. It is tasked with ensuring agility and efficiency                       Department, with seven staff members. It is independent of                                                                                                                            Committee
                                                                                                                                                                                Five Conscience Clauses are instituted to help officers and
     in business operations and in decision making. The Execu-                           any line division and performs regular internal audits of the
                                                                                                                                                                                employees review their own behavior. They are provided in a                                          Reporting and instructions
     tive Committee consists of the heads of three major business                        divisions and group companies.                                                                                                                               (Board of) Auditors                                 Board of Directors
                                                                                                                                                                                form portable together with an ID card.
     divisions and those nominated by the president from among
                                                                                                                                                                                    To put the Group’s actions to promote compliance into
                                                                                                                                                                                tangible form, we have distributed a handbook containing the         • Launch and Development of the Helpline
     ■ Corporate Governance Structure                                                                                                                                           Tokuyama Group Code of Business Activities, the Responsibil-             As part of its efforts to improve the compliance system,
                                                                                                                                                                                ity of Senior Management under the Tokuyama Group Code of            Tokuyama launched a helpline in 2003. The helpline has since
                                                                  Shareholders’ Meeting
                                                                                                                                                                                Business Activities, and the Tokuyama Group’s Five Conscience        been dealing with information and inquiries from officers
                                                                                      Appointments and           Appointments and                   Appointments and
                                                                                      dismissals                 dismissals                         dismissals                  Clauses to every officer and employee of the Group. To build         and employees within the Group. The scope of eligibility for
                                                                          Board of Directors                                         Accounting Auditors                        and instill compliance awareness throughout the Group, our           services was subsequently expanded to our trading partners
                                                                                                                                                                                president directly e-mailed all of the officers and employees in     and to family members of our employees. We also set up an
                                                                                                        Board of Auditors                                                       the Tokuyama Group on April 1 of this year with an instruction       external contact for notification and consultation services of-
                                                          Decisions and supervision        Auditing                               Collaboration     Financial statement audit
                                                                                                            Auditors                                Internal control audit      to achieve superior compliance in a thorough manner.                 fered by a lawyer. This was increased to two in August 2009, as
     Business operations
                                                                                                                  Auditing                                                                                                                           part of our attempts to improve and expand the system.
                                                                                                                                                                                                                                                         The helpline strictly maintains the anonymity of informers
                                                                                                                                                                                                                                                     and advice seekers. The internal rules clearly stipulate that
                   Compliance              Executive Committee                 President                                     Sunflower Committee                                 Tokuyama Group’s Five Conscience Clauses                            any whistle-blower will not be subject to any disadvantageous
                   Committee                Strategy Committee                                                                                                                   Our behavior shall:                                                 treatment in personnel affairs or other areas.
                                          Human Resources Committee                                             RC Management Dept.                                              ➊ Comply with laws, regulations and internal rules;                     This system has been introduced in the belief that it will
                                                                                                                                                                                 ➋ Conform to the Tokuyama Group Code of
                                                                                                                                                                                   Business Activities;                                              help prevent violations of compliance and that it will enable
                           Instructions and                                                           Auditing Department
                           the raising of awareness                                                                                                                              ➌ Justify the trust of customers and trading partners;              a self-correcting function to work effectively. Distributed to
                                                                                                                 Internal audit   RC audit        Instructions and               ➍ Earn the respect of society and general                           all employees and officers in the Group, the handbook of the
                                                                                                                                                  the raising of awareness
                                                                                                                                                                                   consumers; and
                                                                                                                                                                                 ➎ Be of a standard that can be spoken of with pride                 Tokuyama Group Code of Business Activities includes contact
                                  Business divisions, back office divisions, research laboratories, factories and group companies                                                  in front of family members and coworkers.                         details for the helpline. We will continue with activities to
                                                                                                                                                                                                                                                     make this system better known to those concerned.

19   Tokuyama CSR Report 2010                                                                                                                                                                                                                                                               Tokuyama CSR Report 2010           20
                                                                                                                                                                                                   Special Feature                   Tokuyama’s CSR Activities              Harmony with Society                         Harmony with the Environment

Tokuyama’s CSR Activities                                               The Foundation of CSR

     Maintaining and Improving Information Security
        The Tokuyama Group understands that information                  united in its efforts to improve its security level.
                                                                                                                                                                                          RC Promotion Structure and
                                                                                                                                                                                          Operation of Management Systems
     represents not only a powerful tool but also—if it is                   Recognizing the recent growth in both the prevalence
     mishandled—a serious threat to continuation of the company.         and use of Internet technologies, we have been developing
     We place the focus of our security measures on an accurate          hardware and software measures to prevent infections with
     understanding of threats and risks and on securing a balance        computer viruses. We strictly forbid the use of any medium
     among confidentiality, integrity, and convenience, and we           brought into the Company in its network PCs without first
     define them as our guidelines in performing duties.                 performing a virus check. We also have filtering in place to                                                     Tokuyama’s CSR activities center on Responsible Care                             Acquisition of Certification
                                                                         block access to any website that is unrelated to business. As                                                    (RC) activities. A companywide promotion structure has                           under the Responsible Care Global Charter
         Tokuyama is proactive and consistent in deploying               a result of these protocols, we have experienced no serious                                                       Topics
                                                                                                                                                                                          been created to soundly operate different management                             In support of the Responsible Care Global Charter instituted by the International
                                                                                                                                                                                                                                                                           Council of Chemical Associations in 2006, Tokuyama signed the Charter to pledge that
     information technology as one of the drivers of business            virus infection in the past several years. Every employee                                                        systems. In this way we are continually improving our                            its top management would back and carry out the Responsible Care initiative. In March
     reform. We have been making an intensive effort to ensure           is aware that a disruption in business activities due to the                                                     environmental, safety, and quality management systems.                           2010, Tokuyama acquired certification under the Responsible Care Global Charter.

     sound protection and advanced use of information, based             work required to disinfect computers would have a serious
     on the awareness that information security is of growing            negative impact on customer satisfaction. We believe that
     importance as we become increasingly dependent on                   the effectiveness of these security measures is supported by
                                                                                                                                                                                          Basic Philosophy of Responsible Care                                           Responsible Care
     networks following the IT-driven transition to electronic           our customer-oriented stance. In cyberspace, however, there                                                        Basic Policy                                                                     Responsible Care refers to the voluntary management
     information and the widespread use of the Internet.                 is no absolute or permanent security. We will continue with                                                           As a member of the Japan Responsible Care Council,                        activities of companies that manufacture and handle chemical
         In 2001, our top management made a commitment                   diligent efforts without placing undue confidence in existing                                                      Tokuyama Corporation carries out Responsible Care
                                                                                                                                                                                                                                                                         substances to protect the environment and maintain the
                                                                                                                                                                                            activities that protect the environment and preserve safety
     to voluntary information security initiatives with the              measures.                                                                                                                                                                                       safety and health of members of the public and employees
                                                                                                                                                                                            and health throughout the entire chemical substance life
     participation of all employees. In line with this move, we set                                                                                                                         cycle, from development and manufacturing to distribution,                   in all processes covering the development, manufacturing,
                                                                         ■Information Security Management Structure

                                                                                                                                              Company-wide Management
     up the Information Security Committee as a body mandated                                                                                                                               use, final consumption and disposal.                                         distribution, use, final consumption and disposal of chemical
     to develop and implement a comprehensive range of specific                                                                                                                                Our social mission is to aggressively tackle and                          substances. RC also refers to publishing the results of the
                                                                                        Information Security Committee
     steps.                                                                                                                                                                                 systematically solve environmental issues in particular,
                                                                                                                                                                                                                                                                         activities and engaging in dialogues and communication with
                                                                                                        Information Security Audit Group                                                    which, in turn, will lead to sustainable corporate and social
         The Information Security Committee was launched with                                                                                                                                                                                                            society. RC originated in Canada in 1985, and it is now in
                                                                            System Control Manager                                                                                          development. Based on this recognition, we promote
     the mission of maintaining the security of our information                                          Information Security Secretariat
                                                                                                                                                                                            Environmental Management, a management policy that                           place in 52 countries around the world. In Japan, the Japan
     assets, namely information and information systems, and                                                                                                                                emphasizes the environment, in all of our business activities,               Responsible Care Council (JRCC) was established in 1995
     encouraging the active use of these assets. It plays a central                                                                                                                         including development, manufacturing and sales.                              within the Japan Chemical Industry Association (JCIA). It had 97
     role in developing comprehensive security measures for                                                                                                                                                                                                              corporate members as of April 2010, Tokuyama being one of
     information assets and compiling them into Information                              Information Security Management Officer                                                             Action Objectives
                                                                                                        Director in charge of the Division,
                                                                                                                                                                                                                                                                         the founding members. We actively work on RC activities as the

                                                                                                                                                                Departmental Management
     Security Policies. It also makes decisions about the Group’s                                       the Head Office or the Factory                                                        ➊ Promote environmental protection                                         basis of our environmental management and CSR activities.
     basic policies on overall matters relating to information                                                                                                                                  • Implement an ISO14001-based Environmental
                                                                                         Information Security Manager                                                                               Management System and reduce environmental impacts.
     security and engages in activities to increase awareness.                                          General Manager
                                                                                                                                                                                              ➋   Observe the laws and regulations                                       RC Promotion System
         Apart from the policies set out by the Committee,
     Tokuyama’s individual departments carry out specific                                                  Information Security Staff
                                                                                                                                                                                                  • Observe international rules, domestic laws and regulations
                                                                                                                                                                                                    and industrial standards.                                                Chaired by the president and consisting of members of the Board
                                                                                                           Manager or Assistant Manager
     initiatives in accordance with the Company rules instituted                                                                                                                                  • Thoroughly implement export management rules on                      of Directors, the RC Administration Committee is Tokuyama’s top
     in the Information Security Policies that came into effect in                                                                                                                                  materials under control.
                                                                                                                   System Staff                                                                                                                                          decision-making body in relation to its RC activities. It deliberates
                                                                                                           Personnel in charge of
     March 2002. Group companies create their own rules based                                              departmental systems                                                               ➌   Promote energy conservation and curb global warming                    and approves companywide policies and other environmental, safety
     on the Information Security Policies. The Tokuyama Group is                                                                                                                                  • Achieve top-class unit energy consumption in the industry            and quality measures. Under this Committee, there are a number
                                                                                                                                                                                                    for each product.
                                                                                                                                                                                                                                                                         of subordinate bodies, including the Environmental Measures
                                                                                                                                                                                             ➍ Promote resource recycling and work toward reduction                      Committee, the Safety Measures Committee, the Product Safety
                                                                                                                                                                                                  and the proper management of waste materials
                                                                                                                                                                                                                                                                         and Quality Assurance Committee and the Product Assessment
                                                                                                                                                                                                  • Promote the material recycling and thermal recycling of resources.
                                                                                                                                                                                                  • Work toward achieving a paperless office.                            Committee. They study specific action plans and conduct product
     Furthering the Protection of Personal Information                                                                                                                                                                                                                   safety assessments. The Directors responsible for environmental,
                                                                                                                                                                                             ➎ Promote process safety, disaster prevention
                                                                                                                                                                                                  and occupational health and safety                                     safety and product quality matters throughout the whole company
        Tokuyama regards the protection of personal information          sound management and use of personal information and
     as a symbol of the Company’s spirit of valuing individuals and      in boosting awareness among all employees. Aimed at                                                                      • Aim for zero accidents and disasters based on the                    work as the chairs of these committees, with the members consisting
                                                                                                                                                                                                    principles of safety self-management and self-responsibility.        of the heads of the management divisions in charge of each matter.
     as a key obligation in meeting its social responsibility. Based     encouraging all officers and employees to keep in mind                                                                   • Achieve a comfortable working environment and protect
     on this view, Tokuyama has created a structure for improving        the importance of personal information in their activities,                                                                people’s safety and health.                                          ■ RC Promotion System
     the level of personal information protection. Since the Personal    our monitoring and awareness-building activities include                                                             ➏ Ensure strict product safety standards                                                                RC Administration Committee
     Information Protection Act came into full force in April 2005,      intranet-based education, regular workplace inspections and                                                              • Offer environmentally friendly products that can be                        Assessment Function                            Decision-Making Function
                                                                                                                                                                                                    used with safety.
     we have published our Personal Information Protection Policy        fact-finding investigations. Personal information owned by                                                               • Provide proper information on how to use products                          Product Assessment Committee                     Environmental Measures Committee
                                                                                                                                                                                                                                                                            (Labeling Assessment Subcommittee)
     on our corporate website. According to the policy, specific         separate departments is stored in a database. A mechanism                                                                  and what care to take.                                                                                                       Safety Measures Committee

     activities are carried out under the control of the Information     and a system have been established for regular revisions                                                             ➐ Deepen the relationship of trust with society                                   Safety and Environmental
                                                                                                                                                                                                                                                                                Assessment Subcommittee
                                                                                                                                                                                                                                                                                                                                     Product Safety and

     Security Committee. The head of the committee is in overall         and checks. These actions are designed to remind all our                                                               • Publicly disclose information on the Company’s activities                                                                     Quality Assurance Committee

                                                                                                                                                                                                    concerning environmental protection, process safety and                       RC Research Laboratory                      Responsible Care Management
     charge of information security for the Company.                     officers and employees of the importance of the protection                                                                 disaster prevention, occupational health and safety, and
                                                                                                                                                                                                                                                                                   (support organization)                            Department (office)
                                                                                                                                                                                                                                                                         Checks safety of chemicals and assesses            Promotes RC activities throughout the
        In the Company, individual departments have information          of personal information and to prevent personal information                                                                chemical product safety.                                             their environmental impacts using                  Company and its group companies
     security management officers. They play a central role in           leaks or other serious incidents.                                                                                        • Actively engage in dialogue with the local communities.              simulations. Environmental measurements,
                                                                                                                                                                                                                                                                         working environment measurements and
                                                                                                                                                                                                                                                                                                                            covering areas of the environment, safety
                                                                                                                                                                                                                                                                                                                            and quality.
                                                                                                                                                                                                                                                                         ultra-trace analyses of controlled substances
                                                                                                                                                                                                                                                                         and chemical pollutants are also carried out.

21   Tokuyama CSR Report 2010                                                                                                                                                                                                                                                                                                Tokuyama CSR Report 2010                   22
                                                                                                                                                                                                                  Special Feature                Tokuyama’s CSR Activities                   Harmony with Society                     Harmony with the Environment
                                                                                            RC Promotion Structure and
Tokuyama’s CSR Activities                                                                   Operation of Management Systems

     Evaluation and Management System for RC Activities                                                                                                                                                 Auditing Systems
        Tokuyama adopts a three-year plan in the area of responsible                         ■ Evaluation and Management System for RC Activities                                                          Tokuyama has an auditing system that aims at verifying                           •Internal Audit
     care and determines its policies and targets for separate fiscal                          (Environmental Preservation)                                                                             that individual factories and offices engage in appropriate                            Tokuyama conducts internal audit on a regular basis in
     years to achieve the plan. Under these policies, the individual                                                                                                                                    activities in line with the companywide policies.                                   accordance with the ISO 9001 and ISO 14001 standards and

                                                                               activities into the following fiscal
                                                                                                                              RC Activity Goals

                                                                                   Incorporate assessment of
     departments create specific plans and engage in their activities. The                                                                                                                                                                                                                  with the occupational health and safety management system.

                                                                                     year’s goals and plans
     results of the activities are assessed at the end of the fiscal year so                                          Environmental Impact Reduction Goals
                                                                                                                                                             Medium-Term Environmental Plan             •Safety and Environment Audit                                                       The progress of the planned actions and the status of system
     that the plans for the following fiscal year will reflect the findings.                                          Environmental Management Plan          ISO14001                                       Tokuyama conducts this audit for the operation safety and                       operations are audited. If a deficiency is found, it is identified
        Tokuyama formulated a new three-year plan starting in fiscal                                                                                         Environmental Management System            environment on a yearly basis to verify the appropriateness of                      and corrective actions are instituted.
                                                                                                                      Environmental Management Activities    Safety and Environment Assessment System
     2008. Activities under the plan are now in process.                                                                                                                                                its accident/disaster prevention measures and management
                                                                                                                                                             RC Audit System
                                                                                                                           Assessment of Activities          Environmental Accounting                   activities in relation to environmental conservation. The auditing
     Operation of Management Systems                                                                                                                         Environmental Performance                  team is headed by the director, who chairs the Environmental
                                                                                                                                                                                                        and Safety Measures Committees, and conducts audits of
     •ISO 14001 Environmental Management System                                              •ISO 9001 Quality Management System                                                                        all factories, laboratories and offices, authorized inspection                        From formality to utility in QMS
         The Tokuyama and Kashima Factories have already acquired                                Tokuyama has also acquired ISO 9001 certification for its                                              organizations under the High Pressure Gas Safety Act, the
                                                                                                                                                                                                                                                                                                 I have been engaged in internal audits under ISO 9001 for
     ISO 14001 certification. ISO 14001 is an international standard                         quality management system that covers its principal products. Since                                        Logistics Dept. and the Health Management Center. The results
                                                                                                                                                                                                                                                                                              several years. I audit different departments and find that many of
     for environmental management systems. In line with the                                  fiscal 2002, this system has been operated as a system covering                                            of the audits are developed into reports and distributed to all
                                                                                                                                                                                                                                                                                              their quality management systems (QMS) do not work effectively,
     company-wide environmental policy, each factory sets out an                             sales, development and all other divisions of the Company.                                                 departments concerned. They are also presented to the president.                      as they think so much about formalities that they define
     environmental policy and the specific goals to be achieved                                                                                                                                                                                                                               management items not suited to their operations. The ultimate
     in areas covering environmental impact reduction, energy                                •Occupational Health and Safety Management System                                                          •Third Party Audit                                                                    result is many different deficiencies. More than fifteen years have
     conservation, waste reduction and resource recycling.                                       In accordance with the Japan Chemical Industry Association                                                 Tokuyama undergoes ISO 9001 and ISO 14001                                         passed since Tokuyama introduced the QMS. It is time to depart
         At the head office, branch offices and research laboratories,                       (JCIA) New Occupational Health and Safety Guidelines,                                                      examinations conducted by accreditation organizations. The                            from mere formality. We will be striving to perform an audit
     activities are underway based on their respective policies and goals                    Tokuyama has built and promoted occupational health and safety                                             latest examination for renewal of the ISO 9001 certification took                     based on an understanding of aspects
     set out in response to their scales, covering energy conservation,                      management systems at individual factories and offices. In fiscal                                                                         place in April 2010, identifying                       unique to the audited department, to
     waste reduction, resource recycling and other activities.                               2005, the Tokuyama Factory upgraded its system into a safety                                                                              two minor deficiencies and                             improve the convenience and usefulness
                                                                                                                                                                                                                                                                                              of QMS in each department.
                                                                                             management system covering various safety-related activities.                                                                             making comments on three
     Assessment Systems                                                                                                                                                                                                                points. All have been remedied.
                                                                                                                                                                                                                                                                                                  Kazuo Tatebe (internal auditor)
                                                                                                                                                                                                                                                                                                 Manager, Specialty Products Quality
         Tokuyama has set up several assessment systems in an                                •Product Assessment and Labeling Assessment                                                                                                   The examination for renewal of the
                                                                                                                                                                                                                                           ISO 9001 certification at the Tokuyama
                                                                                                                                                                                                                                                                                                                    Assurance Dept.,
                                                                                                                                                                                                                                                                                                    Specialty Products Business Div.
     effort to reduce environmental and safety risks.                                            To ensure product safety, Tokuyama conducts a product                                                                                     Factory on Apr. 15, 2010
                                                                                             safety assessment at each stage from research and development
     •Safety and Environment Assessment                                                      to commercialization. We assess the risk evaluation and
        Prior to installing, expanding or modifying any facility, we                         examine compliance with the statutory requirements from a                                                  ■ Fiscal 2009 RC Activities – Priority Issues and Performance
     assess safety and the environment. We check the safety design of                        wide range of perspectives, including the safety of the chemical
     equipment, the safety level of the materials handled, compliance                        substances involved, the environmental impact and the effect                                                         Segment                               Priority issues                                         Performance                                 Related pages
     with the laws and regulations and the impact on the environment,                        on human health. We also assess the labeling to ensure that the                                             Management                        • Review by top management                       • RC Administration Committee
     thereby aiming to ensure that our facilities are safe, easy to                          product information in catalogs, handling manuals, material                                                                                                                                    • Safety and Environment Audit
     operate, easy to maintain and accident-free. The assessments                            safety data sheets (MSDSs)*¹ and other types of labeling contain
                                                                                                                                                                                                         Environmental conservation        • Reduction in environmental impacts             • Reduction in the emission of SOx, NOx, soot, etc.                  P42
     apply to three stages: Basic Plan Assessment, Design Assessment                         no defects in relation to the instructions and/or warnings and                                                                                  (air, water quality, etc.)                     • Promotion of energy conservation                                   P40
                                                                                                                                                                                                         •Environmental impact reduction
     and Pre-Operational Assessment. At these stages, assessments                            that there are no inappropriate expressions.                                                                •Energy conservation              • Reduction in the emission of PRTR substances   • Facilitation of the use of waste as raw materials                P11—12
                                                                                                                                                                                                                                             and hazardous air pollutants                     and fuel for cement
     are conducted to verify that the facilities have a safety- and                         *1 A material safety data sheet (MSDS) is a document that deals with the hazard and
                                                                                                                                                                                                         •Waste recycling
                                                                                                                                                                                                                                           • Decrease in unit energy consumption            • Green procurement of office supplies and lighting equipment        P36
     environmentally oriented design, that they have been built to the                         toxicity of a chemical substance. It is prepared to ensure the safe handling of a                                                           • Promotion of zero-emission activities          • Unfailing operation of the environmental                         P22—24
                                                                                               particular substance, and provides information on the name of the substance, safety                                                         • Promotion of green purchases                     management system
     design requirements and that they are ready for operation.                                measures, the action to be taken in the event of an emergency, and suchlike.
                                                                                                                                                                                                         Process safety                    • Zero accidents                                 • Proper operation of the safety management system                 P37—38
                                                                                                                                                                                                                                           • Promotion of risk management                   • Safety education and audit of the providers of                     P28
     Education and Training                                                                                                                                                                                                                • Promotion of independent safety management       contracted logistics

         Employee education on responsible care activities are                               we offer Kiken Yochi (hazard prediction)                                                                                                      • Zero disasters                                 • Efforts to prolong the disaster-free period
                                                                                                                                                                                                         Occupational health and safety                                                                                                                        P37—38
                                                                                                                                                                                                                                                                                            • Promotion of risk assessment
     provided for all members within the framework of level-specific                         training, hands-on experience training,
     group education.                                                                        pre-work Kiken Yochi activities, safety                                                                     Chemical product safety           • Securing of product safety                     • Implementation of product assessment and
                                                                                                                                                                                                                                                                                              labeling assessment                                              P26—27
         Practical education and training in relation to environmental                       regulation education, internal special education on electricity,                                                                                                                               • Improving MSDSs and research for new raw materials
     management, safety management, occupational health and safety,                          oxygen deficiency, waste incinerators and other areas, foreman
                                                                                                                                                                                                         Cultivation of a relationship     • Participation in community activities          • Participation in community volunteer activities
     and quality management are offered as part of actual management                         education, troubleshooting training, training on use of fire                                                                                                                                   • Dialogue meetings on RC activities with local
                                                                                                                                                                                                         of trust with society and         • Harmonious coexistence with society                                                                               P29—32
     activities. To take environmental management as an example,                             prevention and extinguishing systems, evacuation drills, general                                            the local communities               and the local communities                        communities (held independently by the factory)
                                                                                                                                                                                                                                                                                            • Organization of factory tours
     the Tokuyama Factory and the Kashima Factory have formulated                            disaster drills, traffic safety education, and training on aid
     specific education and training plans in accordance with the                            activities following external accidents and disaster prevention.                                            Promotion of RC programs          • Dissemination of RC activities                 • Safety, quality and environmental inspection
                                                                                                                                                                                                         targeting group companies                                                          • Encouragement of ISO certification acquisition                   P49—50
     ISO 14001 environmental manual to offer education on the                                For quality management, every workplace separately organizes                                                                                                                                   • Sharing of RC-related information
     importance of environmental conservation and compliance with                            safety meetings and other opportunities for ISO-related education.
     relevant laws and rules to employees and contracted workers alike.                      Nineteen key personnel at different workplaces have completed
         In safety management and occupational health and safety,                            the ISO 9001 internal auditor development course. In July 2009,
                                                                                             we organized a skills seminar for auditors with in-house lecturers.
23   Tokuyama CSR Report 2010                                                                                                                                                                                                                                                                                                               Tokuyama CSR Report 2010        24
                                                                                                                                                                                                                                  Tokuyama is committed to building good relationships with
Tokuyama’s CSR Activities
                                                                                                                                                                Harmony with Society                                              all stakeholders, to practicing management in harmony with
                                                                                                                                                                                                                                  society and to engaging in advanced CSR activities to pursue
                                                                                                                                                                                                                                  growth together with society.

     Addressing the Plastic Window Sash Problem
     toward Regaining Trust                                                                                                                                      Relationships with                                         Customers
                                                                                                                                                                 Based on implementation of the ISO 9001 quality management system, Tokuyama’s quality assurance activities
     The Tokuyama Group has been addressing the plastic window sash issue for a year. Placing top priority on
                                                                                                                                                                 place first priority on the customers. The safety management of chemical substances is rigidly instituted at
     customers’ peace of mind, we are aiming to accomplish two missions. The first mission is to repair customers’
                                                                                                                                                                 all stages of the product process ranging from research and development to disposal and even including
     buildings/houses as soon as possible to ensure legality and rebuild trust. The second mission is to take
     sincere and efficient steps to ensure that the dishonesty problem is not repeated.
     More time is required to complete the two missions, and we will continue to seek the understanding and
     cooperation from those involved. Meanwhile, we will support Excel Shanon’s efforts with the collective
                                                                                                                                                                 Topics        Assessments for ensuring safety
     strength of the Group, to resolve the problem at the earliest possible time.
                                                                                                                                                                                 In fiscal 2009, Tokuyama carried out 57 product assessments and 288 labeling assessments.
                                                                                                                                                                                 Compliance with GHS has been secured with respect to the products containing any of the chemicals
     Action to repair buildings for ensuring legality                                                                                                                            subject to three laws (See “Compliance with GHS” below).
         The repair of buildings/housese for ensuring legality
     is based on two policies. The first is to acquire new
     authorizations for fireproof/fire-resistant specifications and                                                                                              Satisfaction and Security – Quality Assurance System
     to use Excel Shanon’s newly authorized products in the
     repair work if at all possible. The second is to use the existing                                                                                               As a company that is dedicated to its customers and           with the ISO 9001: the 2008 edition, which was released
     plastic sash frames to minimize the burden on customers                                                                                                     that is always preferred by customers, Tokuyama places            in November 2008, have been completed.
     during the repair work. Tokuyama is offering personnel and                                                                                                  first priority on supplying customers with premium-grade             Our management system covers the entire Company,
     financial support to Excel Shanon to facilitate repair and                                                                                                  products and services to meet their needs and to reassure         including its branches, sales force, and the research
     supply of the newly authorized products for replacement.                                                                                                    them about their use.                                             section. We make sound and quick responses to
     However, the program for the repair and replacement has             A furnace for testing fireproof/fire-resistant performance                                  Tokuyama implements quality management and                    customers’ complaints and requests. Information from
     regretably fallen behind schedule, as it has taken longer than      completed on Oct. 29, 2009                                                              quality assurance activities under the ISO 9001 quality           customers is sorted by division and posted on the
     expected to obtain the new authorizations. Acquisition of the                                                                                               management system. Our actions to achieve compliance              groupware portal so that it can be shared.
                                                                           Progress of the recurrence prevention measures announced
     required authorizations is nearing completion. We will then           in March 2009
     begin accelerating the repair process.                                                                               Implemented
                                                                                  Urgent measures g Completed                  by
                                                                         ➊	Total permeation of awareness of corporate ethics and                                 Comprehensive Safety Management of Chemicals
                                                                         ➋	A fact-finding survey on ministerial authorizations at the Ministry                      Data Acquisition and Analysis on the Safety of                     Compliance with GHS
     Actions to prevent recurrence                                         of Land, Infrastructure, Transport and Tourism                                           Chemical Substances                                               The Globally Harmonized System of Classification and
                                                                         ➌	Establishment of an application system for authorization of                              Tokuyama collects and organizes safety data covering           Labelling of Chemicals (GHS)*¹ refers to a system promoted
         The table on the right lists the steps to be taken to prevent     fireproof/fire-resistant specifications
                                                                                                                                                                 chemical substances so that the safety of the chemicals can       by the United Nations under which chemicals are sorted by
     a recurrence. The urgent measures, which were to be                 ➍	Education on the system for authorization of fireproof/fire-
                                                                           resistant specifications                                                              be assessed. The data collected and organized is used to          the type and level of hazard and toxicity in accordance with
     completed within three months, were finished by June 2009.          ➊	Adoption of management regulations on authorization of                                provide safety data on products and waste.                        internationally standardized rules to provide labels and safety
     All the short-term measures, which were to be completed               fireproof/fire-resistant specifications
                                                                                                                                                                    We are working to gain information on the hazards              data sheets that can be understood at a glance.
     within a year, were finished by March 2010, as scheduled.           ➋	Internal communication of the compliance declaration and the          Excel Shanon
                                                                           quality assurance policy                                                              and toxicity of all chemical substances to be newly                  For fiscal 2009, our quality control goal was addressing
     (Details about the status of the measures were published on                                                                                                 used, manufactured and discarded by means of product
                                                                         ➌	Bolstering of the quality assurance system                                                                                                              GHS compliance. We performed GHS classification of all our
     July 3, 2009 and April 1, 2010 on Tokuyama’s website. (in                                                                                                   assessment, waste surveys and the analyses of new raw
                                                                                                                                                 Implemented                                                                       products, including those under development and molded
     Japanese only))                                                             Short-term measures g Completed                                                 materials.
                                                                                                                                                      by                                                                           items, in an effort to create GHS-compliant labels and
                                                                         ➊	Institution and distribution of the Tokuyama Group Code of                                                                                              material safety data sheets. In particular, for those products
                                                                           Business Activities                                                                      Risk Assessment and the Management of                          that contain any of the chemicals subject to the three laws
                                                                         ➋	Improvement of the internal whistle-blowing system (helpline)                            Chemicals
        The medium-term measures, which are to be completed                                                                                                                                                                        described below, we have already completed creating labels
                                                                         ➌	Development of the management system relating to relevant laws         Tokuyama
     within two years, are currently in progress, with completion                                                                                                    To eliminate any pollution to the environment, we monitor     and MSDSs to comply with GHS.
                                                                           and regulations
     targeted for March 2011. During this process, the Tokuyama          ➍	Enhancement of the internal auditing system under ISO 9001
                                                                                                                                                                 the concentration of chemicals in effluents and gas emissions.       Chemicals that are subject to the three laws refer to
     Group will be (1) improving the Group management                                                                                                                In addition, we simulate the distribution of the              the poisonous and deleterious substances controlled by
                                                                         ➎	Education for Group firms’ officers at the time of appointment
     mechanism, (2) improving the auditing system and (3)                                                                                                        concentration of chemicals and analyze in detail their            the Poisonous and Deleterious Substances Control Law,
                                                                         ➊	Compliance check and education
     enhancing the compliance system. Meanwhile, Excel Shanon                                                                                                    movement. Their risks are evaluated after combining the           those subject to notification under the Industrial Safety
                                                                         ➋	Revision of regulations on approval                                   Excel Shanon
     will be expanding the scope of its ISO 9001 certification to                                                                                                data on concentration and the safety data. The resulting          and Health Law and designated substances under the
                                                                         ➌	Revision of the development system
     bolster its quality assurance system.                                                                                                                       assessment data are used to improve equipment safety              Act on Confirmation, etc. of Release Amounts of Specific
                                                                             Medium-term measures g Underway for                                 Implemented     measures and the manner of handling chemicals as well
                                                                                   completion in Mar. 2011                                            by                                                                           Chemical Substances in the Environment and Promotion of
                                                                                                                                                                 as for the education of those who deal with chemicals.            Improvements to the Management Thereof.
                                                                         ➊	Improvement of the Group management mechanism
                                                                                                                                                                 They also serve to increase product safety and to provide
                                                                         ➋	Improvement of the auditing system                                     Tokuyama                                                                         *1 GHS refers to the globally harmonized system of classification and labelling of
                                                                                                                                                                 customers with accurate information.                                 chemicals.
                                                                         ➌	Enhancement of the compliance system
                                                                         ➊	Expansion of the scope of the ISO 9001 certification                  Excel Shanon

25   Tokuyama CSR Report 2010                                                                                                                                                                                                                                                     Tokuyama CSR Report 2010              26
                                                                                                                                                                                                 Special Feature                   Tokuyama’s CSR Activities         Harmony with Society                        Harmony with the Environment

Harmony with Society                                                         Relationships with Customers

         Assessment of Products and Labeling                                                     Provision of Information on Chemical Products                                         Promotion of Safety and Environmental Management in the Distribution Process
         Tokuyama assesses the safety of both the chemicals and                                  Tokuyama offers MSDSs for all its products and
      equipment units that it manufactures, in every stage from                              prototypes to its customers and distribution agents. MSDSs                                   Guidance and Education on Safety Management to                                  Risk Assessment
      research and development through to commercialization. We                              have been prepared for around 600 products as of March                                       Logistics Contractors                                                           Before hazardous materials are transported, we conduct
      made 57 assessments of this kind in fiscal 2009.                                       2010. In particular, for the 37 products that are transported in                              At different locations, Tokuyama organizes periodical                      risk assessments to verify the safety level of the mode of
         We also conduct labeling assessments for our catalogues,                            large quantities and heavily used by our customers, MSDSs                                 safety meetings with logistics operators all over the country                  transportation and the trucking route, and to verify the
      MSDSs and other technical documents. The appropriateness                               are always made available on the Company’s website.                                       under contract to transport its products. We perform logistics                 emergency measures to be taken in the event of an accident.
      and legality of the representations on labeling and packaging                              To deal with any problems in transit, we have created                                 quality audit for them to improve the level of logistics safety                If anything that presents a high level of risk is found, it is
      of products, prototypes and sample products are examined                               Yellow Cards*² and each of our drivers carries them. They                                 management and quality management, and actively promote                        remedied methodically. Whenever any new logistics facility
      and any inappropriate representations are corrected. In fiscal                         include information on immediate measures to be taken in                                  the practice of accident reporting and anti-accident actions.                  is constructed or expanded inside or outside a factory, a
      2009, we conducted 288 labeling assessments.                                           case of emergency. MSDSs and Yellow Cards for individual                                  On the premises of the Tokuyama Factory, dedicated safety                      facility safety assessment is conducted to assess the risk from
                                                                                             products are published on our Intranet to ensure the sharing                              managers perform regular patrols of loading points and                         the phase of facility design.
        Process Flow in the Assessment Structure for Ensuring                                of safety information.                                                                    worksites, and provide periodical guidance on-board for                            We continue our check on conditions at users and our
        Safety and Environmental Conservation                                                                                                                                          freight vessels in collaboration with logistics companies to                   activities to redress unsafe aspects, including malfunctioning
                                                                                             *2 A Yellow Card is a commonly used name for an emergency notification card
                                                                                                containing information on the immediate action to be taken by the driver, nearby       raise safety awareness.                                                        facilities at the tank truck delivery destination. In addition, we
         Assessment             Product                Safety and             Labeling          operators, firefighters and police officers in the event of any accident involving a
           Stages              Assessment            Environmental           Assessment         particular chemical substance in transit.                                                  To ensure that an appropriate emergency response                           work unfailingly to ensure full compliance with the Marine
                                                                                                                                                                                       can be rapidly taken in the event of any accident during                       Pollution Prevention Act. For instance, we ensure that the
                            Development Dept.                                                    Safety Management of Waste                                                            land transport, relevant personnel always carry yellow                         Emergency Action Manual for the Prevention of Hazardous
       Commencement          General Manager
         of Research
                                 and others                                                     Waste is handled in the same way as our products. We                                   cards printed with emergency actions and the vehicles                          Liquid Contamination is always available at relevant ground
                            (primary assessment)
                                                                                             prepare MSDSs for waste and distribute them to waste                                      are equipped with the necessary materials and devices. In                      facilities.
                                                                                             disposal operators and distribution agents to ensure safety in                            addition, an emergency communication network and an
                             General Manager of
                               the Research &                                   Labeling
                                                                                             handling and transportation. Particularly in the case of highly                           emergency organizational formation have been formed.                               Crisis Management System
                              Development Div.                                Assessment
       of Development            and others
                                                                                             hazardous waste, Yellow Cards have been created to ensure                                 Emergency communication drills and disaster drills are held                       We have established emergency response criteria to deal
                            (secondary assessment)
                                                                                             that every driver carries them and that they can deal with any                            in preparation for possible accidents.                                         with potential crises in logistics operations. The equipment
                                                         Safety and                          problem during transportation.                                                                                                                                           and materials necessary for disaster prevention are always
         Study on           Product Assessment
                                                        Assessment            Assessment                                                                                                                                                                              ready for use. Jointly constructed with logistics operators,
      Commercialization                                                      Subcommittee
                            (tertiary assessment)      Subcommittee
                                                                               (products)        EH&S*3 Activities for Tokuyama’s Products                                                                                                                            the mutual disaster control assistance system is in place at
                                                      (basic planning)
                                                                                                 As part of the Responsible Care activities, the IC                                                                                                                   principal locations in Shunan, Kanto, Kansai, Chubu, and
                                                         Safety and                          Chemicals Department gives positive support to educational                                                                                                               other key districts. We are encouraging our contracted freight
      Equipment Design                                  Assessment                           activities for users concerning the proper use of Tokuyama’s                                                                                                             companies to equip their trucks with global positioning
                                                          (design)                           products.                                                                                                                                                                systems (GPS).
                                                                                                 The EH&S Promotion Team was set up to support these
                                                          Safety and
                                                                                             activities. It organizes seminars for users of Metaclene,                                                                                                                    Environmental Preservation Measures and Energy
       Prior to Marketing                                Assessment                                                                                                                                                                                                       Conservation in Transportation
                                                        Subcommittee                         our chlorinated solvent product (dichloromethane). Many
           (operations)                                                                                                                                                                                                                                                   Tokuyama Logistics Corporation is the Company’s general
                                                     (prior to operations)                   different laws and regulations specify this particular chemical
                                                                                                                                                                                       Yellow Card                                                                    contractor of transport services. It has renewed its green
                                                                                             as volatile organic compounds (VOC) and require that its
                                                                                                                                                                                                                                                                      management certification obtained in April 2009 and is
                                                      Report on Actual                       emissions be cut. This substance cannot be used without
       After Operations                                 Conditions                                                                                                                                                                                                    actively promoting environmentally friendly operations.
                                                       (environment)                         considerable knowledge and skill. The seminars offer
                                                                                                                                                                                                                                                                      Together with our related companies, we are introducing
                                                                                             information about the environment, health and safety. The
                                                                                                                                                                                                                                                                      vehicles that conform to exhaust regulations and energy
                                                                                             team also gives suggestions on proper use based on an
                                                                                                                                                                                                                                                                      efficiency, as well as digital tachographs and other devices
                                                                                             understanding of maintenance and management at individual
         Compliance with REACH and CLP Regulations                                                                                                                                                                                                                    that support environmentally friendly driving.
                                                                                             environments and facilities.
                                                                                                                                                                                                                                                                          Following the Law Concerning the Rational Use of Energy,
         To comply with the European Union regulations on                                    *3 EH&S stands for environment, health and safety.
                                                                                                                                                                                                                                                                      we are actively making efforts to conserve energy as a
      registration, evaluation, authorization and restriction of
                                                                                                                                                                                                                                                                      specified cargo owner. On a ton-kilometer basis, we have
      chemicals (REACH), which came into force on June 1, 2007,
                                                                                                                                                                                                                                                                      reached a modal shift ratio*4 of 95%, chiefly with marine
      Tokuyama carried out a preliminary registration of products
      subject to the legislation by December 2008. Placing top
      priority on three items subject to the first registration deadline                                                                                                                                                                                              *4 The modal shift ratio is the ratio of freight or passengers transported by alternative
                                                                                                                                                                                       A safety meeting for relevant business operators in the Osaka district            means, specifically rail and ship in substitution for automobile and aircraft.
      of November 30, 2010, we participate in the consortium
      as necessary, collect information and hold internal liaison
      meetings. To also ensure compliance with the regulations
      on classification, labelling and packaging (CLP), which has
      been in effect since January 20, 2009, we are making a list
      of controlled substances and gathering information ahead of
      registration in December 2010.                                                         A workshop at the Osaka Branch on Apr. 16, 2010

                                                                                                                                                                                       A disaster drill was held at AST Inc. in Osaka, in anticipation of ethylene
                                                                                                                                                                                       chloride leakage from a tank truck.                                            The Daisan Tokuyama

 27   Tokuyama CSR Report 2010                                                                                                                                                                                                                                                                                           Tokuyama CSR Report 2010                 28
                                                                                                                                                                                                                                                  Special Feature                    Tokuyama’s CSR Activities   Harmony with Society                 Harmony with the Environment

Harmony with Society

      Relationships with
                                                                                                                                                                                                                                          Forest Volunteer Activities                                                The Fifth Community Dialogue in the Shunan
                                                                                                                                                                                                                                           A project for creating a forest for water conservation, called            District
                                                                                                                                                                                                                                       the Meeting for Exchange among the City, the Forest and                        The Fifth Community Dialogue in the Shunan District took

      Communities and Society                                                                                                                                                                                                          the Water, took place under the auspices of the Yamaguchi
                                                                                                                                                                                                                                       Prefectural Shunan Agriculture and Forestry Office at the
                                                                                                                                                                                                                                       municipal Fureai-no-Mori forest at Susuma-Hongo in the city
                                                                                                                                                                                                                                                                                                                  place at Tosoh Club in the city of Shunan. Sixteen companies
                                                                                                                                                                                                                                                                                                                  in the Shunan Petrochemical Complex organized this event
                                                                                                                                                                                                                                                                                                                  with the aim of securing an understanding about their
                                                                                                                                                                                                                                       of Shunan. Aimed at securing a stable supply of high quality               environmental and safety actions from the local public. The
      Tokuyama constantly aspires to be a company that is valued by local communities and broader society alike.                                                                                                                       water by creating a forest serving as a green dam, which is                Dialogue attracted a total of 159 participants, including 51
      As part of its CSR activities, Tokuyama has been engaged in a broad array of activities directed at making a                                                                                                                     among the multiple functions of forests, this volunteer program            from neighboring community associations. That was the first
                                                                                                                                                                                                                                       included the removal of weeds that impede the growth of                    event in the series to offer a tour of the complex companies’
      social contribution. These activities include financial support for the development of science and technology,
                                                                                                                                                                                                                                       trees, improvement cutting, thinning, and planting of broad                factories, in which the participants realized the tremendous
      volunteer activities for the restoration of a disaster area, and assistance to facilitate the sound growth of our                                                                                                                leaf trees. From Tokuyama, 151 staff members took part in the              extent of the complex. The tour was followed by a keynote
      children. In addition, we hold RC community dialogues to communicate with local residents.                                                                                                                                       project and worked under the guidance of forestry instructors.             lecture on the subject of waste and recycling, delivered by
                                                                                                                                                                                                                                                                                                                  Professor Kenzo Sekiya
                                                                                                                                                                                                                                                                                                                  of Yamaguchi Prefectural
      Communication with the Local Community                                                                                                                                                                                                                                                                      University. This was
                                                                                                                                                                                                                                                                                                                  followed by an active
                                                                                                                                                                                                                                                                                                                  exchange of views among
                                                                                                                                                                                                                                                                                                                  local residents, corporate
         RC Community Dialogue at the Tokuyama
                                                                                                                                                                                                                                                                                                                  organizers, government
                                                                                                                                                                                                                                                                                                                  officials and education
             On August 20, 2009, the Fiscal 2009 RC Community            Results of the pre-dialogue survey                                                                                                                                                                                                                                        The Community Dialogue in the
                                                                                                                                                                                                                                                                                                                  experts.                         Shunan District on Nov. 16, 2009
         Dialogue took place at Tokuso Kaikan. With an
                                                                         Respondents associate Tokuyama with…
         objective of gaining the understanding of community
         associations around the Factory about the environmental            Not answered                                                                                                                                                                                                                             Mochitsuki Zosan
                                                                                                                                                                                                                                       The Forest Volunteer Activities on Oct. 17, 2009
                                                                            2%          Power plant                                                                                                                                                                                                                   Mochitsuki Zosan, a group of volunteers from among
         and safety efforts at the Tokuyama Factory, this event
                                                                                                          5%                                                                                                                                                                                                      Tokuyama’s staff members, participated in a civic activity
         was the sixth of its kind. It drew 26 participants from            Electrolysis plant                                                                                                                                            Volunteer Activities for the Restoration of a
         community associations and two from the Shunan                     7 %                                                                                                                                                           Disaster Area                                                           exchange meeting at the Yamaguchi Shunan Prefectural Office.
         City Government. Mr. Ohno, deputy manager of the                                                                                                                                                                                                                                                         Its 19 members demonstrated the making of rice cakes and
                                                                            Polycrystalline                                                                                                                                                To support the recovery of the area afflicted by the
         Department of the Environment and Sewerage of the                  silicon                                                                                                                                                                                                                               distributed rice cakes flavored with grated white radish or
                                                                                                                                                44                                                                                     torrential rainfall that hit the Chugoku and northern Kyushu
         Shunan City Government, delivered a presentation on the            11%                                                                                                    Cement                                                                                                                         soybean flour or others. At times, small children participated in
                                                                                                                                         responses                                                                                     Regions in July 2009, Tokuyama’s volunteers took part in
         environment in the Shunan area. From Tokuyama, general                                                                                                                    55%                                                                                                                            the making of rice cakes. The event ended with great success.
                                                                                                                             Soda ash                                                                                                  disaster restoration activities to work with other volunteers. A
         managers of the Cement Manufacturing Department,                                                                    20 %                                                                                                                                                                                 Local volunteer activities
                                                                                                                                                                                                                                       huge volume of earth and sand were removed using shovels
         the Steam & Power Generation Department, the                                                                                                                                                                                                                                                             conducted by employees
                                                                                                                                                                                                                                       and wheelbarrows from around private houses and side
         Chemicals Manufacturing Departments 1 and 2 and the Si                                                                                                                                                                                                                                                   are part of Tokuyama’s
                                                                                                                                                                                                                                       ditches inaccessible to heavy machinery. It was very tough to
         Manufacturing Department took part in the event to hear                                                                                                                                                                                                                                                  CSR activities.
         directly from representatives of community associations.                                                                                                                                                                      tackle the mass of earth and sand under a scorching sun, but
                                                                         With respect to environmental and safety matters involving
             A survey conducted prior to the event revealed that                                                                                                                                                                       the members worked diligently in the hope that local residents
                                                                         the industrial complex, respondents have day-to-day
         their biggest concerns were dust, soot and odor among           interests in…                                                                                                                                                 would soon be able to resume a normal life.
         other environmental issues, and that they still associated    (%) 25                                                                                                                                                                                                                                                                     The civic activity exchange meeting on
                                                                                                                                                                                                93 responses collected                                                                                                                            Nov. 29, 2009
         Tokuyama with cement and soda ash. This sixth RC                 20        19                                        19
                                                                                                                                                                                                  Fiscal 2008
         Community Dialogue offered an opportunity for a factory          15 15                  14 14                             13                             14                              Fiscal 2009
                                                                                            11                                                                          12
         tour centered on the plant manufacturing polycrystalline         10
                                                                                                                                        6 5
         silicon, which has now become Tokuyama’s core business.           5                                                                                5                                        5 5
                                                                                                                                                                                                               3       3                                                                                           A volunteers group – Mochitsuki Zosan
                                                                                                                                                                                    1 2                                        0 0 1
         We believe that the event, together with our presentations,       0
                                                                                                                                                                                                                                                                                                                       Mochitsuki Zosan started its activities in 1983. That year
                                                                                 Fire and

                                                                                            Smoke from

                                                                                                          Dust, soot, etc.

                                                                                                                                                Water pollution

                                                                                                                                                                   Air pollution

                                                                                                                                                                                    Soil pollution



                                                                                                                                                                                                                       Not specified

         have helped convey Tokuyama’s operations and its                                                                                                                                                                                                                                                          was marked by an explosion at the Tokuyama Factory, which
         commitment to environmental conservation, process safety                                                                                                                                                                                                                                                  caused concern for local residents. We thought about a way
         and disaster prevention.                                                                                                                                                                                                                                             A scene from restoration work        that we could give back to the community, and a dozen or
                                                                                                                                                                                                                                                                                                                   so volunteers launched the activities. We continue to visit
                                                                                                                                                                                                                                        Working as a disaster relief volunteer after                               institutions in the city to demonstrate rice-cake making and
                                                                         Respondents perceive recent improvements in the situation
                                                                                                                                                                                                                                                                                                                   give theatrical performances.
                                                                         concerning…                                                                                                                                                    the torrential rains in Yamaguchi Prefecture
                                                                                                                                                                                                                                                                                                                       I think that our activities over 27 years are not based on our
                                                                                                    Not answered                                                                                                                           In July 2009, a heavy downpour caused a landslide in
                                                                                                    9%                                                                                                                                                                                                             stance of offering something in accordance with volunteerism,
                                                                            Not sure                                                                                                                                                    the Yamaguchi Prefecture city of Hofu. In answer to a call                 but are motivated by the sincere kindness that people in the
                                                                            2%     Other                                                                                                                                                from a Tokuyama volunteer, I visited the affected district.                institutions show to us. Our activities are a major asset as well
                                                                                            2%                                                                                     Dust,                                                The conditions were beyond description.
                                                                                                                             Odor                                                                                                                                                                                  as an experience that changes our outlook on life.
                                                                                                                                                                                   etc.                                                 The restoration work under a blazing sun                                       I hope that young people will learn about
                                                                                                               pollution                        54                                 31   %                                               was exhausting, but we worked with the                                     these invaluable non-business activities,
                                                                                                               9%                        responses                                                                                      aspiration of returning local life to normal                               which help them broaden their perspectives
                                                                                                                             Air                                                                                                        as quickly as possible.                                                    to the local community, and help sustain our
                                                                                                                             pollution                            Smoke from
                                                                                                                             11%                                  smokestacks                                                                                                                                      group’s activities.
                                                                                                                                                                  17 %
                                                                                                                                                                                                                                                        Muga Nakagawa
         The RC Community Dialogue at the Tokuyama Factory                                                                               11  %
         on Aug. 20, 2009                                                                                                                                                                                                              Specialty Products Quality Assurance Dept.                                                   Masaki Tsuchiya
                                                                                                                                                                                                                                                  Specialty Products Business Div.                                Plant Maintenance Dept., Tokuyama Factory

 29   Tokuyama CSR Report 2010                                                                                                                                                                                                                                                                                                                                Tokuyama CSR Report 2010     30
                                                                                                                                                   Special Feature                         Tokuyama’s CSR Activities          Harmony with Society                Harmony with the Environment

Harmony with Society                                      Relationships with Communities and Society

      Communication with Overseas                                                                                                           Tokuyama Science Foundation
         The Table For Two Program                                          Offering uniforms to children in Nepal
                                                                                                                                               The Tokuyama Science Foundation was established on                              the country, financial support for exchange at international
          The Tokuyama Factory launched the Table for Two (TFT)              The program for donating and delivering to children in        September 19, 1988, to commemorate the 70th anniversary                             symposia and grants for campaigns to extend and stimulate
      program in December 2008. The cumulative total donations           Nepal our uniforms for female employees that are left unused      of Tokuyama’s founding. The mission of the Foundation is                            interest in science and technology among elementary and
      raised by the program had reached 239,243 yen as of the end        following a design change is now in its fifth year. In the        to offer financial support for research into new materials                          junior high school children.
      of March 2010. With every low-calorie TFT lunch purchased,         fiscal year under review, we again delivered the uniforms to      and related subjects in science and technology, and to                                  The Foundation has to date offered a cumulative total
      a donation of 20 yen is made to a program that provides            Balwapati Primary and Secondary School in Nagarkot, Nepal,        raise awareness of science and technology, therby enabling                          of 741 million yen for 625 projects. Many who enjoyed
      school meals in developing countries. In addition, hand-made       with the help of Ms. Fumiko Kojima of Shunan Municipal            socioeconomic development and improving people’s lives.                             support from the Foundation as youths are today leading
      donation boxes prepared                                            Shuyo Elementary School. We enjoyed seeing the smiles of              In the more than two decades since it was established,                          professors at universities nationwide.
      by employees have been                                             schoolchildren. She gave us a heartwarming message: “When         the Foundation has been offering research grants to young
      set up in the Factory’s                                            I asked children when they wore the uniforms, they answered       researchers at universities and research institutions across
      workplaces so that                                                 that they used them when coming to school in winter because
      anyone can participate in                                          it was cold. I was quite moved.”                                     Twenty years of history
      the program.                                                                                                                                                                                                                                       ❷	Financial support for
                                                                                                                                                                                                                                                           international exchange:
                                                                                                                                            ❶	Research grants:                                                                                           65 million yen to 235 recipients
                                                                                                                                            619 million yen to 318 recipients                                                                           The Foundation subsidizes the
                                                                                                                                           The Foundation offers research grants to                                                                     participation of young researchers aged
                                                                                                                                           young researchers aged 45 or younger                                                                         45 or younger in universities and research
        I eat the TFT lunch every Wednesday.                                                                                               in universities and research institutions                                                                    institutions in Japan in international
            Children are vital to the future of our planet.                                                                                in Japan. After the financial support                                                                        meetings held outside Japan. After
                                                                                                                                           period, a research presentation meeting                                Cumulative total                      returning to Japan, the recipients are
            Visualizing them smiling happily, I eat the TFT
        lunch every Wednesday. It is just once a week, not                                                                                 takes place with the participation of all                       ❶      financial support
                                                                                                                                                                                                                      from fiscal
                                                                                                                                                                                                                                                        required to submit reports on the results.
                                                                                                                                           recipients.                                                               1988 to 2009:
        doing one good turn a day, and so it is neither
                                                                                                                                                                                                                    741 million yen   ❷                  ❸	Financial support for
                                                                                                                                                                                                                                                           international symposia:
        a burden nor pressure. I hope that this activity
        will be continued and expand to the rest of                                                                                                                                                                                                      16 million yen to 31 projects
        Japan and the world.
                                                                                                                                                                                                                                 ❹        ❸             The Foundation provides financial
                                                                                                                                                                                                                                                        support for the operations of international
                                                                                                                                                                                                                                                        conferences to enable researchers
                   Shigehiro Kikuchi                                                                                                                                                                                                                    to exchange information with peers
             Assistant Manager, General Dept.                                                                                                                                                                                                           overseas.
              General & Personnel Affairs Div.
                                                                         Schoolchildren at Balwapati Primary and Secondary School                                                                                               ❹	Grants for campaigns on
                                                                                                                                                                                                                                  science and technology
                                                                                                                                                                                                                                41 million yen to 41 projects
      Encouraging the Next Generation                                                                                                       All recipients of research grants in fiscal 2008                                   The Foundation backs campaigns that present the excitement
                                                                                                                                                                                                                               and wonders of science and technology to children. The
         Taking part in the Yamaguchi Iki-Iki Eco Fair as an                Internship for high school students                                                                                                                Chugoku/Shikoku Branch of the Chemical Society of Japan plays
         Exhibitor                                                           Two pupils from the Tokuyama Commercial and Technical              Cumulative total of grants and financial support                               a central role in organizing a series of exhibitions titled “An
         An environmental event hosted by the Yamaguchi                  High School joined the Tokuyama Factory as business interns         (million yen)                                                                     Exciting World of Chemistry” in the summer vacation season.
      Prefectural Government, titled Yamaguchi Iki-Iki Eco Fair,         from July 27 to 31, 2009. Fiscal 2009 was the third year of our                                                                                       In Yamaguchi Prefecture, there are invention clubs for boys and
                                                                                                                                                 700         Cumulative total financial support                                girls operating in seven cities, towns and villages.
      took place at the Yamaguchi Kirara Expo Memorial Park in           internship program. It offered the interns a factory tour, an                       from fiscal 1988 to fiscal 2009:
      Ajisu, Yamaguchi City, on October 17 and 18, 2009, attracting      opportunity to learn about business manners, experience in                          741 million yen
      approximately 40,000 visitors.                                     office work and many other skills.                                      400
         As a manufacturer of polycrystalline silicon for solar cells,
      Tokuyama ran an exhibition booth to explain its efforts to                                                                                 200
      reduce energy consumption and to combat global warming                                                                                     100
      through the spread of solar cells. We provided parents and                                                                                   0

      children visiting our booth with the opportunity to do a quiz
                                                                                                                                                                                                                                                                               Exchange meeting for
      on solar cells and enjoy solar-operated slot cars.                                                                                                                                                                                                                       invention clubs for boys
                                                                                                                                                                                                                                                                               and girls in Yamaguchi

                                                                                                                                             The Foundation celebrated
                                                                                                                                             its 20th anniversary and
                                                                                                                                             organized a commemorative
                                                                                                                                             It will continue to steadily
                                                                                                                                             bolster its support programs
                                                                         A scene from the internship training
                                                                                                                                             for the development of
                                                                                                                                             science and technology.
                                                                                                                                                                                        Commemorative ceremony for the
                                                                                                                                                                                        20th anniversary on Dec. 4, 2008
                                                                                                                                                                                                                               Exhibition: An Exciting World of Chemistry
      Visitors crowd Tokuyama’s exhibition booth

 31   Tokuyama CSR Report 2010                                                                                                                                                                                                                                              Tokuyama CSR Report 2010      32
                                                                                                                                                                            Special Feature                 Tokuyama’s CSR Activities       Harmony with Society               Harmony with the Environment

Harmony with Society

                                                                                                                                                                 Personnel Management System to Energize Human Resources
      Relationships with                                                                                                                                            Work-Life Balance                                                           Activities of the Gender-Free Committee
                                                                                                                                                                     To achieve an appropriate work-life balance, Tokuyama                       Set up in 2003, the Gender-Free Committee is dedicated
      Tokuyama is committed to improving the working environment to ensure that individual employees can exhibit                                                 is revising systems from many different perspectives. In fiscal             to encouraging the next generation of workers, promoting
      their capabilities and engage in their everyday duties with motivation. In fiscal 2009, we focused energy again                                            2008, we extended the period of childcare leave to allow                    affirmative action, and improving the working environment,
      on human resources development and on improving mental and physical health, with a view to improving our                                                   parents to remain on leave until their child turns two years old.           particularly to prevent sexual harassment. The Committee
                                                                                                                                                                 In addition, we introduced a shorter working hours program.                 meets regularly and carries out other activities. In fiscal 2009,
      front-line capabilities and pursuing globalization.
                                                                                                                                                                 More than half of those who have returned from childcare                    it held four meetings and conducted a questionnaire on sexual
                                                                                                                                                                 leave take advantage of this scheme. We have also added                     harassment to identify problems. The Committee will study
      Addressing the Development of Human Resources                                                                                                              a paid childcare leave program in fiscal 2009 that enables
                                                                                                                                                                 any employee to take a maximum of five days’ leave within
                                                                                                                                                                                                                                             the findings and step up its efforts to boost awareness. In fiscal
                                                                                                                                                                                                                                             2010, the Committee will support the childcare assistance
         Capitalizing on the Skills Education and Training                  Globalization Initiatives                                                            eight weeks of their spouse giving birth. To date, eleven male              program and increase its affirmative action initiatives.
         Center                                                            Tokuyama invited local staff from group firms                                         employees have benefited from this program.
          Set up in 2007, the Skills Education and Training Center      operating in Asian countries to its Asia Human Resources                                   Trend in the Number of Employees
      offers manufacturing skills education centered on basic skills    Development Meeting. Based on the key concepts of linkage,                                 on Childcare Leave                                           (persons)
      and safety to operators with limited experience. It operates on                                                                                             Fiscal 2005   Fiscal 2006   Fiscal 2007     Fiscal 2008   Fiscal 2009
                                                                        communication and narrowing of gaps, the meeting notified
      the educational slogans of “Experience, feel and learn” and                                                                                                     13            3             11              6             5
                                                                        individual companies of the policies of the Company’s
      “Education that encourages trainees to think by themselves        top management, presented actual examples by local
      instead of teaching them.”                                        personnel and included sessions with Japanese personnel for                                 Actions toward Diversity (the employment of physically
          The basic skills education allows trainees to learn about     discussions on a wide range of subjects, such as educating                                  challenged persons and retiree reemployment
      internal structures and detailed operations of systems by         new employees, stances on promotion and ways to motivate                                    program)
      disassembling, drawing, and reassembling actual equipment so      workers.                                                                                     In fiscal 2009, 1.80% of Tokuyama’s employees were
      that they can study the basics of the systems. Safety education      The participants have few opportunities to speak with one                             physically challenged persons, meaning that the Company had
      focuses on experiences, such as getting caught in machinery,      another in their day-to-day work, and the meeting gave them                              satisfied the statutory employment requirement for physically
      being suspended with a safety belt, and observing the impact      the opportunity to share different issues and activities beyond                          challenged persons of 1.80% for the third consecutive year.
      of an object falling from a height.                               national borders and language barriers. We will provide similar                          Going forward, we will expand opportunities for physically
          In fiscal 2009, the Manufacturing Skills Education Course     opportunities on a regular basis to stimulate the Tokuyama                               challenged workers, in an active effort to address the
      II was launched for operators in their seventh or more year       Group.                                                                                   employment issues.
      of service. It covers four subjects: identifying and solving                                                                                                   Tokuyama instituted a retiree reemployment scheme in
      problems, electricity, instrumentation and mechanics. A                                                                                                    fiscal 2001, one of the first companies in its industry to do
                                                                                                                                                                                                                                             An activity of the Gender-Free Committee: Inviting employees on
      cumulative total of 146 trainees have taken this course or the                                                                                             so. In fiscal 2009, 50 of the 100 employees who reached the                 childcare leave
      Manufacturing Skills Education Course I launched in fiscal                                                                                                 age of retirement were reemployed. We anticipate that these
      2008. Inaugurated in fiscal 2008, the hazard experience                                                                                                    employees will continue to display their excellent skills and
      course for group firms and contractors has been offered 20                                                                                                 expertise in their respective workplaces.
      times to a total of 326 trainees.                                                                                                                            Trend in Employment Rate of Physically Challenged
          Called the Manufacturing Skills Education Course III, an                                                                                                 Persons                                                            (%)

      external education for candidates as future team leaders was                                                                                                Fiscal 2005   Fiscal 2006   Fiscal 2007     Fiscal 2008   Fiscal 2009
                                                                                                                                                                     1.80          1.65          1.93            1.98          1.80
      also launched. Eight trainees took part.

                                                                        Asia Human Resources Development Meeting on Mar. 15, 2010
                                                                                                                                                                 Promotion of Improvements to Mental and Physical Health
                                                                            Training on Counselors’ Perspectives                                                    Improvements to Health through the THP
                                                                            Based on individual psychology (Adlerian psychology) ,                   *1              In accordance with the Guidelines for Health Improvement
                                                                        training on counselor’s perspectives was offered to persons                              under the Total Health Promotion (THP) Plan put forward
                                                                        who had been newly appointed to managers. Through lectures                               by the Ministry of Health, Labour and Welfare, Tokuyama                       Supporting mental and physical health
                                                                        and exercises, the trainees realized that even trivial words or                          operates an extensive program of activities to address priority                   Tokuyama introduced the occupational stress checkup in
                                                                        actions by a superior can have a significant impact on human                             issues in combating lifestyle-related diseases and promoting                  2007 to identify employees with health issues at an early stage
                                                                        relations in the workplace.                                                              mental health.                                                                based on the results of physical and mental examinations, to
                                                                                                                                                                     To tackle lifestyle-related diseases, our industrial physicians           inform them and to provide the support they need to recovery.
                                                                        *1 Individual psychology (Adlerian psychology)
                                                                           Refers to a system of ethics and treatment methods created by Austrian psychologist   and medical staff provide employees with individual                               Both mental and physical health are essential to vigorous
                                                                           Alfred Adler (1870-1937). Also known as the psychology of encouragement, it serves
                                                                           to handle and support human relationships in education, communication between         guidance on the basis of regular health checkups. Our health                  work. Some employees are unaware of their own health
      A training session                                                   parents and children, and other areas in safe and practical manners.
                                                                                                                                                                 management personnel also visit workplaces to run Mini                        issues. We will talk with them to help them
                                                                                                                                                                 Health Classes.                                                               become aware of changes in their mental
                                                                                                                                                                     To promote mental health, we offer an online occupational                 and physical conditions, and we will help
                                                                                                                                                                                                                                               them deal with any changes while they
                                                                                                                                                                 stress checkup service to encourage personal follow-ups and
                                                                                                                                                                                                                                               are still minor.
                                                                                                                                                                 to improve the workplace environment.
                                                                                                                                                                     In fiscal 2009, the target recipients of the mental training
                                                                                                                                                                                                                                                                    Akemi Ozaki
                                                                                                                                                                 were expanded from those in managerial positions to all                                          Public Health Nurse,
                                                                                                                                                                 employees with the aim of building up stress tolerance of                           Health Management Center (Tokyo),
                                                                                                                                                                                                                                                       General & Personnel Affairs Div.
                                                                                                                                                                 individual employees.

 33   Tokuyama CSR Report 2010                                                                                                                                                                                                                                                        Tokuyama CSR Report 2010    34
                                                                                                                                                            Special Feature                Tokuyama’s CSR Activities                 Harmony with Society                     Harmony with the Environment

Harmony with Society

      Relationships with                                                 Shareholders                                                               Relationships with                                                   Trading Partners
      To earn the understanding of shareholders and investors and to respond to their confidence and expectations,                                  Tokuyama regards its suppliers as important and good business partners, and continuously strives to build
      Tokuyama is actively committed to timely, appropriate, and fair information disclosure. Through such disclosure,                              relationships of trust with them through fair transactions. The Purchasing & Distribution Dept. makes constant
      we seek to engage in a broad dialogue with society.                                                                                           efforts to ensure compliance and fulfill its corporate social responsibility.

                                                                                                                                                     Topics          Actions to comply with the Subcontract Act
      Information Disclosure
                                                                                                                                                                     The Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors, commonly abbreviated
         Communication with Investors                                                                                                                                as the Subcontract Act, is vital to the Purchasing & Distribution Dept. in the context of compliance.
          At Tokuyama, the president briefs institutional investors                                                                                                  Tokuyama gives explanations about the legislation on its intranet and obliges purchasing personnel to
      and analysts in Japan on the company’s business on a regular                                                                                                   participate in workshops to deepen understanding of the law among staff members and ensure compliance.
      basis following the announcement of full-year financial results
      in May and the first half financial results in November. We
      also offered explanations individually on 230 occasions in                                                                                    Fair Transactions
      fiscal 2009. As overseas IR activities, we organized meetings
      with overseas institutional investors and analysts in London,                                                                                    On the basis of its fair and sound partnerships with                             its customers with good products backed by outstanding
      Frankfurt, New York and Hong Kong. We seek to maximize                                                                                        suppliers, Tokuyama carries out its purchasing operations                           technologies.
      direct communications with investors and analysts in Japan                                                                                    in accordance with its Basic Purchasing Policy, to supply
                                                                              The financial results briefing
      and overseas.
                                                                                                                                                       Tokuyama’s Basic Purchasing Policy
                                                                                                                                                       Optimum Transactions                                                             Partnership
         Providing Information with Communication Tools                                                                                               Tokuyama evaluates its suppliers from an overall perspective                     Tokuyama aspires to be a good partner that shares with its
         To disclose information to shareholders and institutional                                                                                    that includes quality, pricing, delivery dates, technical                        suppliers the common goal of creating good products. To
      investors, Tokuyama set up a web page, For Investors, on its                                                                                    capabilities, credibility, safety, after-sales service, ease of                  attain this goal, Tokuyama welcomes suppliers with unique
      website to provide stock information, consolidated financial                                                                                    maintenance, the ability to respond to incidents, compatibility                  proposals for creating an environment that gives new suppliers
      data, IR reports such as financial summaries, electronic public                                                                                 with existing facilities and business stability to choose                        easy access to opportunities for transactions.
      notices, financial statements, annual reports and presentation                                                                                  suppliers that best suit the Company.
      materials for financial results briefings, information on general
      meetings of shareholders and an IR calendar. To facilitate                                                                                       Statutory Compliance                                                             Promotion of Green Purchasing
      understanding, we remain determined to actively provide                                                                                         In its purchasing activities, Tokuyama complies with the                         Tokuyama views the Reduce-Reuse-Recycle (3R) perspective
      timely, appropriate and fair disclosure of information.                                                                                         letter and with the spirit of the relevant laws and regulations.                 as another possible criterion for choosing suppliers to promote
                                                                                                                                                      Tokuyama also requires its suppliers to comply with them and                     environmental conservation in its purchasing activities.
                                                                              For Investors on Tokuyama’s website            Annual Report            chooses suppliers that meet the requirement.
                                                                                                                                                                              Note: The Basic Purchasing Policy does not constitute part of any agreement, nor does it indicate any offer to enter into an agreement.
        Composition of Shareholders
        (as of March 31, 2010)
                                           Financial instrument
                                                                                                                                                    Aiming to sign basic agreements about transactions
                                           11,594                                Providing timely and easy-to-understand
         Other Japanese corporations       3.3%                                  information
         37,852                                                                      My assignment is website production. My job is to update          The Purchasing & Distribution Dept. continues its effort
         10.8%                                                                                                                                      to sign basic agreements setting out important general                                Committed to stable procurement
                                                                                 data such as business and financial information quickly and
                                                                                                                                                                                                                                              Our goals are to minimize purchasing risks and ensure
                                                                                 accurately, and to produce web pages, to help improve public       provisions with all suppliers. These agreements seek
                                                                                                                                                                                                                                          stable procurement under fair and healthy partnerships with
                                                                                 understanding about our company.                                   to clarify the general terms and conditions and are not
                                              Financial                                                                                                                                                                                   suppliers. Our goals encompass not only the stability of
                                                                                     This year, a new web page for CSR activities reports has       used to infringe on any particular contracts or provisions.
         Foreign corporations                 institutions                                                                                                                                                                                delivery times but also quality, compliance and fair pricing.
         and other foreign investors          157,757                            been launched to enable timely presentation of our social          This initiative helps raise the quality and efficiency of                             We believe that regular audits are needed to assess suppliers
         65,004                               45.1%                              contribution activities. We will continue our efforts to provide   purchasing agreements, and promotes internal control and
         18.6%                                                                   rich contents.
                                                                                                                                                    compliance efforts inside and outside the Company.
                                                                                                                                                                                                                                          in terms of quality and other factors, so that we can monitor
                                Individuals                                                                                                                                                                                               performance while achieving good partnerships with suppliers
                                and others                                                                                                                                                                                                to fulfill our mission. We are working on
                                77,462                                                                                                                                                                                                    day-to-day procurement activities with
                                22.2%                                                                                                                                                                                                     transparency, fairness and soundness to
                                                    (Unit: thousand shares)
                                                                                                                                                                                                                                          attain more stable procurement.

                                                                                                 Miwa Shimoozaki                                                                                                                                         Yasuhiro Kishimoto
                                                                                             Corporate Communications &                                                                                                                                         General Manager,
                                                                                                 Investor Relations Dept.,                                                                                                                         Purchasing & Distribution Dept.,
                                                                                                  Corporate Planning Div.                                                                                                                            Corporate Administration Div.

 35   Tokuyama CSR Report 2010                                                                                                                                                                                                                                                        Tokuyama CSR Report 2010          36
                                                                                                                                                                             Special Feature                         Tokuyama’s CSR Activities               Harmony with Society                            Harmony with the Environment

Harmony with Society

      Process Safety, Disaster Prevention and
                                                                                                                                                                 based on comprehensive line management and collaboration with                                    The Kashima Factory and the Tsukuba Research Laboratory
                                                                                                                                                                 contractors. As a result, the factory did experience one on-the-job                          have maintained their zero-accident and zero-disaster status for 24
                                                                                                                                                                 accident that forced one employee to take a leave of absence,                                years and 20 years respectively since their inauguration.

      Occupational Health and Safety
                                                                                                                                                                 and two such incidents at contractors and other associates. This                                 In fiscal 2009, we spent 260 million yen on upgrading facilities
                                                                                                                                                                 means that despite a massive reduction in occupational accidents                             and on increasing disaster control equipment for the purpose of
                                                                                                                                                                 compared with a normal year we failed to fulfill the target of                               safety and disaster prevention. We will continue to step up our
                                                                                                                                                                 completely eradicating on-the-job accidents that resulted in                                 efforts to protect all workers from accidents, whether they are
      Tokuyama believes that safety is an essential part of business activities and that ensuring safety is the first step                                       workplace absentees.                                                                         employed by Tokuyama or our contractors.
      in achieving coexistence with society. In taking this stance on safety, Tokuyama thoroughly conducts process
      safety and disaster prevention activities as well as occupational health and safety efforts. With the aim of                                               Commitment to Occupational Health and Safety
      preventing accidents and disasters, the Company is striving to provide a favorable working environment.
                                                                                                                                                                     Promoting the Safety Management System
                                                                                                                                                                     Tokuyama has established Occupational Health and Safety
                                                                                                                                                                 Management Systems for individual factories, laboratories and                                   Boosting safety awareness and morale
      Commitment to Safety and Disaster Prevention                                                                                                               offices and, in fiscal 2003, put them into operation. At the                                        At Section 1, Manufacturing Dept. 1 of the Chemicals
                                                                                                                                                                 Tokuyama Factory, its system was upgraded into the Safety                                       Business Division, individual members aim to remove any
         All-Inclusive Safety and Disaster Prevention                                      Encouraging Voluntary Safety Activities                               Management System in fiscal 2005 to additionally support process                                possible hazard from the workplace before it develops into
         Activities                                                                         The Tokuyama Factory is accredited as a certified safety             safety activities. This factory continues to make improvements
                                                                                                                                                                                                                                                                 an actual hazard, on the assumption that the shop floor has
          Tokuyama has three safety principles. According to these                      inspection operator and a certified completion test operator             by performing risk assessment in terms of work, facilities and
      principles, safety is, in the first instance, a social responsibility                                                                                                                                                                                      many different latent hazards. We give advice and comments
                                                                                        for twelve facilities pursuant to the High Pressure Gas Safety           processes with a view toward completely removing potential risk
      to be met as a corporate citizen. Second, safety is given priority                Act and is qualified to continuously operate boilers and other           factors. In fiscal 2009, the Company invested 120 million yen to                                on incidents during work with an uncompromising attitude.
      over all other business activities; and third, security can be                    equipment. We ensure appropriate operations in compliance with           enhance and strengthen occupational health and safety.                                          This helps enhance sensitivity to hazards and maintain
      achieved by the fact that all staff members have a responsible                    the accreditation requirements. We also follow the principle of                                                                                                          safety discipline in the workplace. We have instituted action
      attitude and engage in responsible activities.                                                                                                                Trend in the Frequency Rate of Accidents Causing Absence
                                                                                        conducting voluntary safety activities under our own responsibility                                                                                                      guidelines for morale to practice greetings, clothing checks
          The Company’s main factory, the Tokuyama Factory, is                                                                                                      from Work *2
                                                                                        to run the plan-do-check-act (PDCA) cycle in safety management           Source: Japan Industrial Safety & Health Association (JISHA) Ratio of Industrial Injuries       and repetition, and to report the processes performed to boost
      located very close to the residential district of the city. We                    with complete consistency. While raising the awareness of safety         and Deaths by Industry on the JISHA website                                                     safety awareness and morale.
      understand that it is absolutely essential to ensure safe operation               among all employees, we will endeavor to prevent accidents and             2.5                                                                      All industries           To date, 1,040 consecutive days have
      of the factory and we make painstaking efforts to ensure safety of                disasters.
                                                                                                                                                                                                                                            Chemical             passed without accident. Everyone in the
      the facilities and the processes. Such efforts include, for example,                  We encourage the management teams for operations to engage             2.0
                                                                                                                                                                   2.5                                                                      All industries
      safety patrol operations, Kiken Yochi (KY) activities for hazard                                                                                                                                                                                           workplace will continue these activities to
                                                                                        in their voluntary safety activities. The facilities management            1.5                                                                      Chemical
      prediction, Hiyari Hatto activities for accident control, the five-S                                                                                         2.0
                                                                                                                                                                                                                                            industry             extend our accident-free record.
                                                                                        section is working to build up its engineering expertise in facilities
      activities*1 and the practice of pointing and calling a name out                  maintenance for maintaining the stable operation of the plants.
                                                                                                                                                                   1.5                                                                      Tokuyama
      loud. These basic activities are strictly practiced with consistently                                                                                        0.5
                                                                                                                                                                                                                                                                                    Yoshimi Tamaki
      rising intensity. To enhance both risk management and crisis                                                                                                                                                                                                      Assistant Manager, Subsection 1,
                                                                                           Safety Audit                                                            0.0                                                                                                          Manufacturing Section 1,
      management, we strengthen the security control system,                                                                                                       0.5
                                                                                                                                                                          2005       2006      2007       2008      2009    (Fiscal year)
                                                                                            Tokuyama conducts audits of all its factories, laboratories and                                                                                                                       Manufacturing Dept. 1,
      implement the plan-do-check-act (PDCA) cycle to improve our                                                                                                *20.0 frequency rate of accidents causing absence from work refers to the number of
                                                                                                                                                                    The                                                                                                         Chemicals Business Div.
      level of security control, identify the sources of hazards and                    offices to inspect the status of process safety, disaster prevention              2005      2006       2007                  accidents per year)
                                                                                                                                                                                                          industrial 2009 (Fiscal one million cumulative
                                                                                                                                                                    workers forced into absence through 2008
      enrich our security education and training.                                       and occupational health and safety. If the audit identifies any             working hours. This reflects the frequency at which industrial accidents occur.
                                                                                        nonconformance, it is specified and the necessary guidance is                                                                                                             Maintaining a Favorable Working Environment
          In preparation for any unexpected crisis, we review and
      upgrade our disaster prevention system, including the structure,                  given to ensure corrective action. The audit results are reported to        Trend in the Severity Rate of Accidents*3                                                     With the goal of ensuring a comfortable working environment
                                                                                                                                                                  0.25                                                                 All industries
                                                                                                                                                                 Source: Ministry of Health, Labour and Welfare Survey on Industrial Accidents
      communication, disaster control activities, materials and                         relevant departments so that they will implement remediation. The                                                                                                     conducive to good mental and physical health, we take constant
      equipment for disaster prevention and rescue and first-aid                        Safety Measures Committee is also informed of the results so that        0.20
                                                                                                                                                                 0.25                                                                       All industries
                                                                                                                                                                                                                                            industry          measures to improve working environments where specified
      operations. In fiscal 2009, we introduced the earthquake early                    it can formulate an action policy for the following fiscal year on                                                                                  Chemical
                                                                                                                                                                                                                                                              chemical substances and organic solvents are handled. Our
      warning system and installed additional security cameras for                      the basis of the findings.                                                                                                                          industry          industrial doctor inspects these workplaces and we take other steps
      disaster prevention to upgrade the system for early detection of                                                                                           0.10
                                                                                                                                                                 0.15                                                                       Tokuyama          to improve the facilities and the working methods. At present, all
      abnormalities.                                                                                                                                             0.05
                                                                                                                                                                                                                                                              worksites at every factory, laboratory and office fall under Control
          We also conduct a number of different drills. These                                                                                                                                                                                                 Category I*4. We have introduced tighter voluntary standards for
      specifically include general disaster drills jointly held with                                                                                             0.05     2005       2006      2007       2008      2009    (Fiscal year)                     the purposes of improvement. In fiscal 2009, we offered health
      the Shunan Fire Headquarters, departmental disaster drills,                                                                                                0.00
                                                                                                                                                                                                                                                              guidance and mini-education in the workplace to combat lifestyle
      emergency drills organized in collaboration with associated                                                                                                         2005       2006      2007       2008      2009    (Fiscal year)                     related diseases, secondary health checkups under the workers’
      companies and contractors, competitions in disaster control                                                                                                *3 The accident severity rate refers to the number of lost work days per one thousand        accident compensation insurance scheme and health advice to
                                                                                                                                                                    cumulative working hours. This reflects the magnitude of industrial accidents that
      skills held on the factory’s premises, the mustering of disaster                  Safety Audit (Tsukuba Research Lab)    Safety Audit (Kashima Factory)       have taken place.
                                                                                                                                                                                                                                                              boost the ratio of those undergoing a thorough examination. These
      prevention personnel, and resucue and first-aid drills. These drills                                                                                                                                                                                    measures have improved health awareness among employees
      focus on the active use of materials and equipment for disaster                                                                                                                                                                                         and resulted in a lower ratio of those with abnormalities found in
                                                                                           Safety and Environment Assessment                                         Implementation of Safety and Health Activities in
      prevention and on smooth links with headquarters. A desktop                                                                                                                                                                                             the companywide health checkup. In addition, we offer online
      command drill has been introduced to boost the ability to deal                        When installing, modifying or adding any facility, the director          Concert with Contractors                                                                 occupational stress checkups
      with disasters as they happen.                                                    in charge of safety calls internal experts to perform assessments            Tokuyama conducts safety and health activities in                                        for all employees and provide           Process Flow of Stress Relief through the
          The general disaster drills take place in view of local residents             at the planning stage, at the design stage and at the stage before       collaboration with its contractors to safeguard all personnel                                follow-up support to those              Use of Occupational Stress Survey Sheets
      so that they will be able to understand and place their trust in the              starting operations. Each assessment includes a pre-emptive check        working at its plants from accidents and disasters. These                                    requiring consideration based          Occupational Stress Survey Sheets
      security activities of the factory.                                               of latent hazards that may arise, to facilitate remediation and          activities include, first, information sharing and awareness                                 on the results of the checkup.                   (with 57 questions)
                                                                                        improvement. This ensures the safety of facilities, processes and        building through joint safety and health meetings and their                                  Through health checkups and           To be implemented
                                                                                                                                                                                                                                                                                                      at workplaces
                                                                                        operations and prevents accidents and disasters.                         departmental equivalents with the participation of Tokuyama’s
                                               *1 Five-S activities: An initiative to                                                                                                                                                                         causal analysis for mental              Analysis of replies to selected questions
                                                  ensure the five-S features at the                                                                              employees and those of its contractors; second, safety patrols                               health, we are steadily building         concerning health risks attributable to
                                                                                                                                                                                                                                                                                                       factors associated with the workplaces
                                                  workplace. The five-S’s refer to         Efforts to Maintain the Safety Performance and to                     for enhanced safety checks and management and a knowledge                                    a strong support system.
                                                  Seiri (tidy), Seiton (organized),
                                                  Seiketsu (clean), Seiso (cleaning)       Prolong the Accident-Free Period                                      buildup through purpose-specific safety education and                                                                                              Findings on individual workplaces
                                                  and Shitsuke (disciplined).                                                                                                                                                                                 *4 Control Category I refers to the state in     explained by the Health Management Center
                                                                                            Our safety activities have been conducted to meet the goals          workshops; and third, capacity development through hazard                                       which the concentration of hazardous                     to the managerial staff
                                                                                        of achieving a zero-accident and zero-disaster status by creating        experience education and training. Bearing in mind the basics of                                substances in the atmosphere does
                                                                                                                                                                                                                                                                 not exceed the standard control
                                                                                        and nurturing a safety-oriented culture, while ensuring the safety       safety, we will be focusing our energy on education and training                                concentration in most (at least 95%)                Study on measures for improving
                                                                                                                                                                                                                                                                                                                         the working environment
                                                                                        of people, facilities and society. In fiscal 2009, the Tokuyama          and on the transmission of technologies to ensure compliance                                    of workspace units. There are three
                                                                                                                                                                                                                                                                 control categories, namely I, II and III.
                                                Scene from a general                    Factory continued to engage in special safety activities under the       with laws, regulations and internal standards, and also to prevent                              Control Category I corresponds to the                   Activities for improving
                                                disaster drill                          Safety Day initiative in addition to safety management activities        similar accidents.                                                                              most desirable condition.                              the working environment

 37   Tokuyama CSR Report 2010                                                                                                                                                                                                                                                                                     Tokuyama CSR Report 2010                38
                                                                                                                                                                                                                                                                                                                                              Harmony with the
Harmony with
                                                                                                                                                                                                            Special Feature                               Tokuyama’s CSR Activities      Harmony with Society
                                                                                     One of our most important corporate social responsibilities is to                                                                                                                                                                                          Environment
                                                                                     protect the global environment. Tokuyama practices environmental

the Environment
                                                                                     management with an emphasis on environmental perspectives in all
                                                                                     of its business activities.

     Performance for Fiscal 2009                                                                                                                                                               Environmental Accounting
                                                                                                                                                                                               To facilitate understanding and analysis of how much is invested in and spent on environmental preservation
     Tokuyama strives to obtain accurate data on inputs and outputs in its business activities and reduce                                                                                      and for thus improving the effectiveness of environmental investment, Tokuyama has been implementing
     the environmental impacts to meet its new goals.                                                                                                                                          environmental accounting since fiscal 2000.

     Flow of Materials in the Business Activities                                                                                                                                              Environmental Costs
                                                                                                                                                                                                  Investments relating to pollution control accounted for                               ■ Costs of Environmental Preservation

              INPUT                                                                                                                             OUTPUT                                         more than 90% of the environmental investments while
                                                                                                                                                                                               investments in resource recycling and in management activity
                                                                                                                                                                                                                                                                                         Classification of Environmental
                                                                                                                                                                                                                                                                                                Preservation Costs                Principal Actions              Amount Invested Total Amount Spent
                                                                                                                                                                                                                                                                                                                                                                  (JPY million)     (JPY million)

                  Waste and                                         Production Activity                                                                                                                                                                                                  Costs
                                                                                                                                                                                                                                                                                                                           Installing neutralizing facilities,
                                                                                                                                                                                                                                                                                                                           replacing control systems
                  by-products                                                                                                                  CO2
                                                                                                                                                      Carbon dioxide CO2                       accounted for several percent each. Approximately 60% of                                  in the
                                                                                                                                                                                                                                                                                                          Control          for electric dust collectors, etc.
                                                                                                                                                                                                                                                                                                                                                                    1,728             4 166

                  1,630                                                                                                                               6,420                                    the environmental costs were allocated to pollution control                               Business Global Environmental
                                                                                                                                                                                                                                                                                                     Conservation                                                          8              854
                                                                                                                                                                                               and about 10% each to global environmental conservation                                            Resource Recycling Effective use of resources                          36              ,040
                  Fuel                                                                                                                                Waste materials                          and resources recycling. In fiscal 2009, environmental                                   Upstream and Downstream Costs                                                      0                 0
                  2,120                                                                                                                               (incinerated and land-fill)                                                                                                                                          Environmental analysis
                                                                                                                                                                                               investments were made chiefly to install new neutralizing                                 Management Activity Costs         equipment etc.                                46               292
                  (50,700 thousand GJ)                                                                                                                19                                       facilities and to replace systems associated with electric dust                          Research and Development Costs                                                     0                17

                                                                                                                                                      Environmental                            collectors.                                                                                   Social Activity Costs
                                                                                                                                                                                                                                                                                                                           Green space development
                                                                                                                                                                                                                                                                                                                           and production of CSR Report                    1                18
                  Raw material                                                                                                                        impact materials                                                                                                                  Costs for Environmental Damage     Imposition and management
                                                                                                                                                                                                                                                                                                                           of the former mining site                       0              147
                  5,910                                                                                                                               10                                                                                                                                            Total                                                           1,819              6,534

                                                                                                                                                                                                                                                                                        * The data in the table shown above are based on Environmental Accounting Guidelines
                  Industrial water                                                                                                                    Process effluent                                                                                                                    2005 published by the Ministry of the Environment.
                                                                        Products                                                                      20,600                                   Economic Benefits                                                                        * The figures reflect the amounts incurred at all factories, laboratories and offices of
                  41,800                                                5,650                                                                         (Coolant water and                                                                                                                  Tokuyama Corporation.
                                                                                                                                                      other types of effluent)
                                                                                                                                                          (Unit: 1,000 metric tons)               To analyze the economic benefits, we calculate nothing but the
                                                                                                                                                                                                                                                                                        ■ Trend in Cumulative Total Environmental Investments (since fiscal 1990)
                                                                                                                                                                                               real benefits of gains on reduction in energy consumption, gains
                                                                                                                                                                                                                                                                                        (JPY 100 million)
                                                                                                                                                                                               on the sale of valuable waste, gains on waste treatment cost-cutting                        350
                                                                                                                                                                                               and raw materials and fuel cost-cutting by reusing waste. Assumed
     Results of Environmental Preservation Activities in Fiscal 2009 at the Tokuyama Factory                                                                                                   economic benefits are not included in the estimates. In fiscal 2009,

                                                                                                                                                                                               we reaped about 1.3 billion yen worth of economic benefits, down                            250          272

                                                                                                                                                                                               around 0.3 billion yen from the preceding fiscal year.                                      200
               Segment                              Items                        Fiscal 2009 Target Fiscal 2009 Result                          Rating*       Fiscal 2010 Target               ■ Economic Benefits in Fiscal 2009
                                                                                 (Reference Fiscal Year: 2007) (Reference Fiscal Year: 2007)                (Reference Fiscal Year: 2007)                                                                                                  150
                                                                                                                                                                                                                                              Material Benefits     Economic Benefits
                                                                                                                                                                                                              Item                         (thousand metric tons)      (JPY million)
                                                                                           ±0%                                                                        −28%
                                                                                          (Compared to                                                                (Compared to              Gains on Reduction in Energy Consumption                                   166             100
                                    Atmosphere            Soot and Dust               the average emission               −45%                                     the average emission          Gains on the Sale of Valuable Waste                  81                    497
                                                                                   from fiscal 2005 to 2007)                                                   from fiscal 2005 to 2007)
                                                                                                                                                                                                Gains on Waste Treatment Cost-Cutting               191                    359               50
                                                               COD                        −7%                            −34%                                           −7%
                                                                                                                                                                                                Gains on Raw Materials
                                                                                                                                                                                                                                                    192                    346                 0
                                                                                                                                                                                                Cost-Cutting by Reusing Waste                                                                           2005               2006              2007                 2008                2009
                                   Water Quality             Nitrogen                     ±0%                              25%                                          ±0%                                                                                                                                                                                                            (Fiscal year)
                                                                                                                                                                                                              Total                                                        368
           Environmental                                    Phosphorus                    ±0%                            −20%                                           ±0%
         Impact Reduction
                                                               PRTR                      −24%                            −30%                                         −47%
                                                      Hazardous Air Pollutants
                                                                                          −8%                             −35%                                        −24%
                                                                                                                                                                                               Commitment to the Prevention
                                                                                                                                                                                               of Global Warming
                                                           (VCM, EDC)

                                      Energy             Unit Energy       21% lower than          22.4% lower than                                            22% lower than
                                    Conservation      Consumption Index the level in fiscal 1990 the level in fiscal 1990                                   the level in fiscal 1990           Prevention of global warming is a key challenge to be addressed by corporate citizens. Tokuyama makes constant
        Global Environment                             Rate of Effective                                                                                      To be kept at 94%
           Conservation               Recycling
                                                      Utilization of Waste To be kept at 94%                             94%                                                                   achievements through the conservation of energy in business activities and supports the conservation of energy in
          Waste Reduction          Zero Emission       Zero-Emission Rate To be kept at 99.9%                           99.9%                               To be kept at 99.9%                employee households.
                                                                      *Rating: The circle refers to success in attaining of the target and the cross refers to failure to attain the target.

     The environmental preservation activities conducted in fiscal 2009 attained the targets in terms of atmosphere, water quality (COD and phosphorus), PRTR,                                 Promotion of Energy Conservation
     energy conservation, recycling and zero emission.
     However, nitrogen emissions soared because of a slowdown in external recycling.                                                                                                               Tokuyama consumes a huge amount of energy in the                                     raw material in the cement production process.
                                                                                                                                                                                               processes of manufacturing its core products, such as caustic                                Aware of the high priority of preventing global warming,
                                                                                                                                                                                               soda, cement and polycrystalline silicon. Carbon dioxide, one                            the Company is conducting energy conservation activities
                                                                                                                                                                                               of the greenhouse gases, is generated chiefly by burning fossil                          to reduce carbon dioxide emissions. The Tokuyama Factory
                                                                                                                                                                                               fuels and also by the decarboxylation of limestone used as a                             is responsible for more than 99% of the Company’s energy

39   Tokuyama CSR Report 2010                                                                                                                                                                                                                                                                                                                    Tokuyama CSR Report 2010                             40
                                                                                                                                                                                                               Special Feature             Tokuyama’s CSR Activities      Harmony with Society                              Harmony with the
                                                                                           Commitment to the Prevention                                                                                                                                                                                                       Environment
Harmony with the Environment                                                               of Global Warming

      consumption. In fiscal 2009, it achieved a 6.0% improvement
      from the preceding fiscal year to reach the level that is 22.4%
                                                                                                    ■ Trend in the Unit Energy Consumption Index (Tokuyama Factory)*                                   Program to Encourage Anti-Global Warming Actions
                                                                                                        Reduction rate (%)
      lower than the 1990 level after encouraging the use of fuel                                              0        0
                                                                                                                                                                                                           Tokuyama set up a program that encourages employees           ■ An Intranet Screen
      alternatives to coal, enhanced energy conservation, and a
                                                                                                                     –5                                                                                of the Tokuyama Group to take anti-global warming actions
      revision to the calorific power coefficient after the amendment
                                                                                                                                                                                                       in April 2008, as part of its environmental, energy saving
      of the Act on the Rational Use of Energy. This means that the                                                 –10
                                                                                                                                                                                                       and social contribution activities from the standpoint of CSR
      target of achieving unit energy consumption that is 22% below
                                                                                                                    –15                                           –16.4                                promotion. This program covers part of the costs incurred by
      the 1990 level by 2010 was met ahead of schedule.                                                                                       –18.4
                                                                                                                                   –17.5                                  –22.4 –22 (Target)           employees purchasing and installing specific environmentally
          In fiscal 2009, the Cement Manufacturing Dept., the                                                       –20
                                                                                                                                                        –18.6                                          friendly products closely related to the Tokuyama Group’s
      Manufacturing Dept. 1 and 2 of the Chemicals Business Div.,
                                                                                                                    –25                                                                                business, namely the plastic window sash for residential use
      Si Manufacturing Dept. and the Steam & Power Generation                                                             1990     2005       2006       2007      2008       2009      2010
                                                                                                                                                                                     (Fiscal year)     and the solar power generation system. Its objective is to
      Dept. worked together on a project to improve unit energy                                  ■ Trend in Energy Consumption*                                                                        help reduce CO2 emissions in the household sector by raising
      consumption. They developed a program for energy efficiency                                (thousand GJ per year)                         Tokuyama Corporation    Group companies
                                                                                                                                                           3,800                                       awareness against global warming and by encouraging the
      improvement equivalent to a 1.0% reduction in energy                                          60,000                            3,500       3,900              2,800     2,700
                                                                                                                                                                               2,700                   Group employees to save energy.
      consumed in the factory, or to a reduction in CO2 emissions of                                             50,000
                                                                                                                                                                                                           In its inaugural year in fiscal 2008, the program was used
      nearly 40,000 metric tons per year. The program is underway,
                                                                                                                 40,000                                                                                to a certain extent for both solar power generation systems and
      and in fiscal 2010, the activities will continue. The Cement
                                                                                                                 30,000                                                                                plastic window sashes. In fiscal 2009, we saw a steady rise in
      Manufacturing Dept., the Si Manufacturing Dept. and the                                                                        53,700      53,900         55,500    52,500       50,700
                                                                                                                 20,000                                                                                those benefiting from the program for solar power generation
      Steam & Power Generation Dept. engage in improvement                                                                37,600
                                                                                                                                                                                                       systems after the resumption of public subsidization, while the
      efforts from a new perspective.                                                                            10,000
                                                                                                                                                                                                       number of those taking advantage of the program for plastic
                                                                                                                           1990       2005        2006           2007      2008         2009           window sashes remained at low level.
                                                                                                                                                                                     (Fiscal year)         After two years of the program, it is clear that in a large
                                                                                                 ■ Trend in CO2 Emissions*
                                                                                                                                                                                                       majority of cases the program is enjoyed for purchasing either
                                                                                                                                 Generated from fuels    Generated from raw materials
                                                                                                 (thousand metric tons per year)         Generated from waste    Group companies                       plastic window sashes or a solar power generation system          ■ Number of the Use of the Program
                                                                                                      9,000                                   280           280
                                                                                                                                                          260           210                            at the time of building a new house. In the future, it will
                                                                                                      8,000                       210         220                                   200                                                                                                            Plastic window sashes       Solar power generation systems
                                                                                                                                                                        250                            be necessary to propose a broader introduction to existing
                                                                                                      7,000                                                                         230
                                                                                                                                                                                                                                                                                           Number of cases                     Number of cases
                                                                                                      6,000             20 2,110                    2,100                                              houses at the time of remodeling, in an attempt to increase                         of subsidization       (units)      of subsidization          kW
                                                                                                                                        2,130                  2,000        1,620
                                                                                                                                                                                                       the number of those using the program. The table on the right      Fiscal 2008                12            177                  6               24.01
                                                                                                                                                                                                       shows the use of the program in the past two years.                Fiscal 2009                 7            141                  8               33.35
                                                                                                                              4,820     4,840       5,000      4,730        4,570                          Data like these is made available on the Tokuyama Group’s
                                                                                                                3,290                                                                                                                                                       Total                    19            318                 14               57.36
                                                                                                      1,000                                                                                            intranet. In addition, we continue efforts to raise awareness
                                                                                                          0                                                                                            of actions on global warming, including the provision of
                                                                                                                1990          2005      2006        2007       2008        2009
      A meeting for reporting the efforts under the initiative for improving unit energy                                                                                 (Fiscal year)                 information about websites relating to global warming.
      consumption                                                                                * The calorific power and other figures have been recalculated retrospectively to 1990
                                                                                                           following an amendment of the Act on the Rational Use of Energy.

      Contribution to Action against Global Warming in the Consumer and Transportation Sectors
          In supplying the Shanon plastic window sash, silica for                                  efforts on technical developments that contribute to trend
                                                                                                                                                                                                       Reduction of Air and Water Pollutants
      energy-saving tires and other products, the Tokuyama Group                                   toward anti-global warming, including the construction of a
      has been helping to reduce the emissions of CO2 in the                                       verification plant for polycrystalline silicon for solar cells, the                                 Actively seeking to protect the environment, Tokuyama has a long track record of initiatives to reduce
      consumer and transportation sectors, in which CO2 emissions                                  development of electrolyte membrane for fuel cells, etc.                                            environmental pollutants discharged into the atmosphere and into water environments.
      have significantly increased. The Shanon is a powerful tool
      for energy conservation in residential houses. We focus our
                                                                                                                                                                                                       Air Pollutants Emissions
                                                                                                                                                                                                                                                                         ■ Trend in SOx, NOx and Soot Emissions
      Efforts at Our Offices                                                                                                                                                                               We have equipped our boilers, cement kilns and other
                                                                                                                                                                                                       sources of air pollutants with emission control systems such           SOx emissions
                                                                                                                                                                                                                                                                              NOx emissions                                                          Soot emissions
          Tokuyama takes part in the Cool Biz campaign that                                     ■ Cool Biz Benefit (At the Tokyo head office from June to September)                                     as flue gas desulfurizers, denitration equipment, low NOx
                                                                                                                                                                                                                                                                           (metric tons)                                                               (metric tons)
      began as a national movement in the summer of 2005. In                                  (thousand kWh)                                                                                           burners and high-performance dust collectors in an attempt
                                                                                                    450                                                                                                                                                                     14,000                                                                              400
      addition to our conventional energy conservation efforts at                                                                                                                                      to reduce sulfur oxides (SOx), nitrogen oxides (NOx) and                                                               11,100
                                                                                                                                                                                                                                                                            12,000                                                                              350
                                                                                                                                                                                                       soot emissions.                                                                  10,000                                              10,100
      our offices, we have encouraged our employees to work in                                                    400       419                                                                                                                                             10,000                      11,400                                        8,800
                                                                                                                                                                                                                                                                                                                                                      8,800     300
                                                                                                                                                                                                           In fiscal 2009, we successfully lowered NOx and soot
                                                                                             Power consumption

      light clothing and introduced thorough temperature control                                                                                                                                                                                                             8,000         275                               223                                250
                                                                                                                  350                                                                                  emissions, although SOx emissions rose slightly.                                                   259     267
      of the air conditioners. As a consequence, Tokyo head office                                                                    358                                                                                                                                    6,000                                                                              200
      succeeded in lowering its power consumption during the                                                                                      336           336       340           328                                                                                                                                                           137
                                                                                                                  300                                                                                                                                                        4,000         2,890       2,310                                                    150
                                                                                                                                                                                                                                                                                                                 1,940       1,930
      four-month period from June to September 2009 compared                                                                                                                                                                                                                 2,000                                                     1,190    1,300
                                                                                                                                                                                                                                                                                                                                                1,300           100
      with the level a year earlier.                                                                              250                                                                                                                                                               0                                                                           0
                                                                                                                                                                                                                                                                                        1990           2005      2006        2007       2008          2009
                                                                                                                                                                                                                                                                                                                                                        (Fiscal year)
                                                                                                                           2004      2005         2006          2007       2008          2009
                                                                                                                                                                                       (Fiscal year)

 41   Tokuyama CSR Report 2010                                                                                                                                                                                                                                                                                               Tokuyama CSR Report 2010                   42
                                                                                                                                                                                                                                                            Special Feature                            Tokuyama’s CSR Activities                 Harmony with Society                                             Harmony with the
                                                                                                   Reduction of                                                                                                                                                                                                                                                                                                     Environment
Harmony with the Environment                                                                       Air and Water Pollutants

      PRTR* Substances Emissions
                                                                                                                                                                                                                                                    Waste Reduction and Recycling

          Twenty-seven substances among those handled by                                              ■ Trend in PRTR Substance Emissions
      Tokuyama in fiscal 2009 are subject to notification under the                                  (metric tons)                                             Tokuyama Corporation                     Group companies
                                                                                                      250     237
      Pollutant Release and Transfer Register (PRTR) legislation. In                                                                                                                                                                                As a result of its exhaustive efforts to reduce waste and recycle, in fiscal 2009 Tokuyama put 94% of its waste to
      fiscal 2009, efforts to reduce emissions were undertaken at                                              200                                                                                                                                  effective use and diverted 99.9% of its waste from being dumped in landfills.
      different places to achieve substantial reductions, specifically                                         150
      a 29% cut from the preceding year, to total emissions of 50                                                                                  100              100
                                                                                                               100                                                                      82
      metric tons.                                                                                                                           60               65                 70                70
      *1 The pollutant release and transfer register (PRTR) refers to a system of collecting and
                                                                                                                                                                                                            29             29
                                                                                                                                                                                                                                                    Waste Management
         publishing data on the sources of hazardous substances, the amounts of such substances                             0
         emitted into the environment or carried away from business establishments in the form                                     1998       2005            2006                   2007             2008            2009
         in which they are contained in waste.                                                                                                                                                                     (Fiscal year)                        In fiscal 2009, Tokuyama generated 300 thousand metric                             ■ Process Flow of Industrial Waste Treatment
                                                                                                                                                                                                                                                    tons of waste. It actively recycled them internally and
                                                                                                                                                                                                                                                                                                                                                                                        Waste generated
                                                                                                                                                                                                                                                    externally, mainly reusing them as raw materials and fuel
                                                                                                                                                                                                                                                    for cement production at the Tokuyama Factory. Packing
      Anti-Dioxin Measures                                                                                                                                                                                                                                                                                                                                                                                                Incineration (internally)

                                                                                                                                                                                                                                                                                                                                                                Inside the Company
                                                                                                                                                                                                                                                    materials, pallets and other wood waste were crushed into                                                                                                                       17.9
         Waste incinerators, waste oil incinerators and part of                                      Countermeasures against Dioxins. The measured dioxin                                                                                           fuel so that they can be effectively used at power plants. As
                                                                                                                                                                                                                                                                                                                                                                                                        Internal Recycling
      the vinyl chloride monomer manufacturing facilities are                                        concentrations in flue gas and wastewater remain far below                                                                                     we worked diligently to recycle waste into raw materials for
      subject to regulations under the Special Measures Law for                                      the control levels.                                                                                                                            cement, we maintained the rate of effective use of waste at
                                                                                                                                                                                                                                                    94%. We stepped up our activities for reusing and reducing                                                                                                              Landfill (internally)

                                                                                                                                                                                                                                                    waste to achieve a high landfill zero-emission rate of 99.9%.                                                                                                                       0

      Hazardous Air Pollutants Emissions

                                                                                                                                                                                                                                                                                                                                                                Outside the Company
                                                                                                                                                                                                                                                                                                                                                                                       Waste generated
         Tokuyama sets out a voluntary reduction plan for four                                        ■ Trend in Hazardous Air Pollutants Emissions                                                                                                 ■ Breakdown Graph of Industrial Waste Treatment in Fiscal 2009                                                                                                        Incineration (externally)
      substances that it produces, including chloroethylene,                                         (metric tons)
                                                                                                                                                                                                                                                             External Recycling

      among the 12 substances subject to voluntary control in
                                                                                                                                                                                                                                                                   20.8                                                 18.9                                                                                                Landfill (externally)
                                                                                                                                                                                 Chloroethylene (vinyl chloride)                                                                                                       (6.4%)
                                                                                                                                    103                                                                                                                           (6.9%)                                                                                                                                                                0.4
      accordance with the Air Pollution Control Law in order to                                            100                                                                   1,2-dichloroethane
      take continuous action.                                                                                                                                                    Chloroform                                                                                                                                                                                                  External Recycling
         In fiscal 2009, facility enhancement and other actions led                                                                                                              Dichloromethane (methylene chloride)                                                                                                                                                                               20.8
      to a 29% reduction from the year-ago level.                                                                   60               47                                                                                                                                                           0.4                                                        *The figures represent relevant values for fiscal 2009. (Unit: thousand metric tons)
                                                                                                                    40                                                                                  31
                                                                                                                                     7                                                  30
                                                                                                                                                                     21                 13              11                 22                                                        Total waste
                                                                                                                    20                              12                8                                                     8                                                        generation                                           ■ Trend in Waste Landfill Volume, Effective Utilization Rate and Others
                                                                                                                                     28                   1                  1          12    2          12      4                      3
                                                                                                                                                     9        3       9          3                3                  4      9                   2                                       300
                                                                                                                           0                                                                                                                                                                                                                                 Landfill Volume (metric tons)                  Zero-Emission Rate          Effective Utilization Rate
                                                                                                                                   1995            2005             2006              2007              2008             2009                                                     Internal Recycling
                                                                                                                                                                                                                     (Fiscal year)                                                                                                                          (metric tons)                      99.8       99.9     99.9          99.9          99.9    (%)

                                                                                                                                                                                                                                                                                                                                                                                                                                                              Effective Utilization Rate / Zero-Emission Rate
                                                                                                                                                                                                                                                                           (into materials and fuel for reuse)
                                                                                                                                                                                                                                                                                            260                                                             40,000                                                                                     100
                                                                                                                                                                                                                                                                           Eff            (86.6%)                                                           35,000                                                                                     95
      Industrial Effluent and Water Pollutants Emissions                                                                                                                                                                                                                      ect
                                                                                                                                                                                                                                                                                     Ut   ilization Rate   93.
                                                                                                                                                                                                                                                                                                                                                                                                 93.9     94.3     94.1          94.1
                                                                                                                                                                                                                                                                                                                                                                                                                                               93.5    90

                                                                                                                                                                                                                                                                                                                                          Landfill Volume
                                                                                                                                                                                                                                                                             Zer                                                                                                      82.4
          To meet the statutory limits as well as the limits agreed
                                                                                                                                                                                                                                                                                     issio    n Rate   99.9                                                 25,000                                                                                     85
                                                                                                      ■ Trend in Industrial Effluent and COD Emissions                                                                                                                                                      (Unit: thousand metric tons)
      with local governments, the Tokuyama Factory has set tighter                                                                                                                                                                                                                                                                                          20,000                                                                                     80
                                                                                                                                                                          Industrial effluent                COD emissions                                                                          Recycling Volume
                                                                                                                                                                                                                                                                                                   (internal and external)                                  15,000                                                                                     75
      self-control limits to carry out stringent control with the                                                    (million metric tons)                                                                       (metric tons)                             Effective Utilization Rate (%) =                                       x 100                                               76.9
                                                                                                                                                                                                                                                                                                 Total Waste Generated
      monitoring of pollutants and purification with wastewater                                                        40                                                                                            200                                                                                                                                    10,000                                                                                     70

                                                                                                                                                                                                                                                                                     [                                       ]
                                                                                                                                                                              166                                                                                                                  Landfill Volume
      treatment equipment. In fiscal 2009, the actual emission levels                                                               180
                                                                                                                                                   157        153                                                                                          Zero-Emission Rate (%) = 1 −
                                                                                                                                                                                                                                                                                                 (internal and external)
                                                                                                                                                                                                                                                                                                                                 x 100
                                                                                                                                                                                                                                                                                                                                                             5,000                                                                                      65
                                                                                                                                                                                                                                                                                                                                                                                               680        520       520          480            440
      did not exceed the self-control limits, let alone the statutory                                                                                                                                                                                                                          Total Waste Generated
                                                                                                                            30                                                               120                         150                                                                                                                                           0                                                                                60
                                                                                                                                                                                                                                                                                                                                                                                      1990     2005      2006      2007          2008          2009
                                                                                                     Industrial effluent

      limits. Chemical oxygen demand (COD)*2 as well as nitrogen                                                                                                                                                                                                                                                                                                                                                                              (Fiscal year)
                                                                                                                                                                                                                                COD emissions

      and phosphorus emission levels are subject to regulation                                                              20                     21.4
                                                                                                                                                              23.0                           22.9                        100
      with respect to total emissions for water quality. To ensure
      compliance with these three indicators, emission reduction                                                                    14.3
                                                                                                                                                                                                                                                    Management and Treatment of PCB Waste
                                                                                                                            10                                                                                           50
      efforts are conducted using activated sludge treatment facilities                                                                                                                                                                                 The Tokuyama Group has 82 transformers and capacitors                             finished its registration to Japan Environmental Safety Corporation
      and other equipment.                                                                                                                                                                                                                          containing polychlorinated biphenyl (PCB)*1. All of them have                         (JESCO) in December 2005 and commenced the treatment in
          In fiscal 2009, we recorded a decline in COD emissions                                                               0                                                                                      0
                                                                                                                                    1990           2005       2006            2007           2008            2009                                   already fallen into disuse. In compliance with the Special                            fiscal 2009. In the future, we will be properly treating our PCB
      due to a slowdown of operation of production facilities and                                                                                                                                             (Fiscal year)
                                                                                                                                                                                                                                                    Measures Law for the Proper Treatment of Polychlorinated                              waste in line with the timetables of the wide-area treatment
      an increase in nitrogen emissions as a result of a slowdown                                                                                                                                                                                   Biphenyl Waste, they are retained and managed in an appropriate                       project in separate districts.
                                                                                                      ■ Nitrogen and Phosphorus Emissions                                                                        (metric tons)
      in external recycling.                                                                                                                                                                                                                        manner. Legislation requires all PCB waste to have been treated                       *1 Polychlorinated biphenyl (PCB) is an organic chlorinated compound that emits dioxins when burnt
                                                                                                                                          Fiscal 2005 Fiscal 2006 Fiscal 2007 Fiscal 2008 Fiscal 2009
                                                                                                                                                                                                                                                                                                                                             in low temperature. Chemically stable and excelling in thermal resistance, chemical resistance,
                                                                                                                           Nitrogen           95              110                 112                 108                140                        by July 2016. In accordance with the plan of the national
      *2 Chemical oxygen demand (COD) is an indicator of the water pollution level and refers to                                                                                                                                                                                                                                             insulation and other electric characteristics, it was formerly used in many different electric products
         the amount of oxygen consumed by oxidizing organic substances in water.                                Phosphorus emissions
                                                                                                                               4.0                            3.9                 4.5                 2.9                3.6                        government, wide-area PCB treatment facilities are increasingly                          including transformers and capacitors. However, it has been banned from production or utilization
                                                                                                                                                                                                                                                                                                                                             since 1972 because of its hazardousness to humans. Transformers, capacitors and other PCB-
                                                                                                                                                                                                                                                    constructed and coming into operation in succession. Taking
                                                                                                                                                                                                                                                                                                                                             contained products that have already been distributed have to be retained at business establishments.
                                                                                                                                                                                                                                                    advantage of the early registration program, the Tokuyama Group
 43   Tokuyama CSR Report 2010                                                                                                                                                                                                                                                                                                                                                                                       Tokuyama CSR Report 2010                                                                   44
                                                                                                                                                                         Special Feature                            Tokuyama’s CSR Activities                    Harmony with Society                     Harmony with the
Harmony with the Environment

      Development of Environmentally Friendly                                                                                                               Ion Exchange Membranes
                                                                                                                                                            •Clean Technologies that Help Prevent Environmental Pollution
                                                                                                                                                                                                                                          ASTOM Corporation

                                                                                                                                                                                                                                                                groundwater as part of initiatives to prevent environmental

      Products and Environmental Technologies
                                                                                                                                                               ASTOM Corporation, a Tokuyama Group company, helps                                               pollution. Ion exchange membranes are therefore attracting the
                                                                                                                                                            resolve environmental problems with its separation technology                                       attention of the international community as a clean technology
                                                                                                                                                            based on the NEOSEPTA ion exchange membranes and the                                                that serves to prevent environmental pollution.
                                                                                                                                                            ACILYZER high-performance electrodialyzer incorporating                                                 In fiscal 2009, our separation technology was adopted as
                                                                                                                                                            NEOSEPTA. Ion exchange membranes facilitate the selective                                           an approach to process improvement and reduction in waste
      The Tokuyama Group maintained its efforts to develop environmentally friendly products and recycling
                                                                                                                                                            permeation of positive and negative ions dissociated in                                             liquid treatment load at food and chemicals plants. Given
      technologies in fiscal 2009.                                                                                                                                                                                                                              that this technology is being increasingly recognized as an
                                                                                                                                                            solution. Traditionally, ion exchange membranes have
                                                                                                                                                            been used in salt production, food, fresh water generation,                                         environmentally friendly technology outside Japan as well,
                                                                                                                                                            pharmaceuticals and the treatment of waste liquids. Today,                                          research efforts are being made for practical application of
                                                                                                                                                            they have application in the separation and collection of acid                                      the technologies for converting groundwater into drinking
      Development of an Electrolyte Membrane for Alkaline Membrane Fuel Cells                                                                               and alkali in waste liquids, the treatment of leachate at waste                                     water. In the future, it will be speeding up the actions to
                                                                                                                                                            disposal facilities and the removal of nitrate nitrogen from                                        expand technology across the globe.
      •For Next-Generation, Environmentally Friendly Fuel Cells, a Test-manufacture Line To Be Built at the Tokuyama Factory
          Tokuyama became the world’s first company to
      successfully develop an anion electrolyte membrane for
      alkaline membrane fuel cells and an ionomer that serves as
      an electrode catalyst. For the alkaline membrane fuel cells
      (AMFCs), iron, nickel and other general-purpose metals can
      be used as an electrode catalyst in place of the costly rare
      metal platinum, and ethanol and glycerol produced from
      biomass is able to be used as fuel. AMFCs are thus seen as
      environmentally friendly fuel cells for automotive and other
      applications and development is underway around the world.
      In fiscal 2009, AMFCs were adopted to emergency power
      supply units and portable power supply units with an output of      The anion electrolyte membrane
      several hundred watts, and verification tests are being carried     and the ionomer solution
                                                                          developed by Tokuyama
      out. Next spring, construction of a test-manufacture line for
      electrolyte membranes will reach completion at the Tokuyama                                                                                           The ACILYZER high-performance electrodialyzer based on ion exchange membranes                       The ACILYZER EDR polarity reversal electrodialyzer

      Factory. The line will have an annual production capacity of
      around 10,000 m2. A system for supply to users will also be
      constructed. As a pioneer of anion electrolyte membranes,
                                                                                                                                                            The "Triple Shanon" Plastic Window Sash                                                                     Excel Shanon Corporation
      Tokuyama will seek further improvements in partnership with
      users, contributing to the early commercialization of fuel cells.
                                                                                                             A fuel cell stack with the anion electrolyte
                                                                                                                                                            •High-Performance Plastic Window Sashes Conserve Energy and Reduce Household CO                                                           2

                                                                                                                                                                Excel Shanon Corporation, one of Tokuyama’s group                                               Triple Shanon, electricity costs are about 15% lower*2 than they
                                                                                                                                                            companies, manufactures and sells the Shanon Window                                                 are with ordinary aluminum-plastic composite window sashes.
      A Closed System for Developers                                                                                                                        plastic window sashes with distinguished levels of airtight,                                        This product helps achieve further reductions in CO2 emissions.
                                                                                                                                                            thermal insulation, sound proof, and moisture condensation
                                                                                                                                                                                                                                                                ■ A Cross-sectional View of the Window Sash
      •Material Recycling for Used Developers                                                                                                               proof characteristics. To tackle global warming, reductions in
                                                                                                                                                                                                                                                                                   Triple Glazing
         Tokuyama and Sharp Corporation have been engaging in             ■ The Closed System for Developers at Sharp Corporation’s Mie Plant
                                                                                                                                                            greenhouse gas emissions, especially of CO2 emissions, are being
      commercial operation of a closed system for the collection,                                                                                           considered and implemented in different sectors at different
                                                                                                                                                            levels. While some progress has been made in emission cuts in                                           Indoor Side                     Outdoor Side
      recycling and reuse of developing solutions between Sharp’s
      Mie Plant in Taki-gun, Mie Prefecture and Tokuyama’s dedicated                                                                                        the industrial sector, there is a large gap between the target and
                                                                                                                       Dilution and
      plant for five years, since April 2005. Based on the material                                                    Preparation
                                                                                                                                       Photolithography     the reduction actually attained in the household sector. More
      recycling technology for used developers in liquid crystal panel                     Undiluted Developers         Equipment                           effective measures are hence needed. The housing industry is
                                                                                                                                                            pursuing a number of initiatives. For instance, plastic window
      plants, the commercial operation has been very effective.                                                                          Used
                                                                                                                                       Developers                                                                                                                                                                    K Value
         In pursuit of greater harmony with the environment,                                                                                                sashes draw attention for their superior performance in reducing
      Tokuyama now makes sustained efforts to improve its                                                                                                   energy consumption, as they add a high level of air-tightness and                                                                                        Heat Insulation
                                                                                                                                                            thermal insulation when used in residential houses.
                                                                            (Dedicated Plant)
      technologies and reduce its costs so that not only liquid
      crystal panel manufacturers but many users of developing                                                                                                  In April 2008, Excel Shanon released the Triple Shanon, which
      solutions will employ the technology without hesitation.                                                           Recycling                          boasts the lowest K value of 1.23 W/m2k in the Japanese window                                               Spacer
                                                                                                                         Equipment                                                                                                                                        TPS
                                                                                                Used Developers                                             sash market. The K value*1 is a heat transmission coefficient. A
      In parallel with that, we are actively working to develop                                                                                                                                                                                                                                   Triple glazing including
      product-manufacturing and -disposal technologies with                                                          Sharp Corporation’s Mie Plant          lower figure means higher heat insulation performance. With the                                                                       two Low-E glasses
                                                                                                                                                                                                                                                                                                  (with argon gas)
      low environmental footprints throughout a supply chain                                                                                                                                                                                                    The Shanon plastic
                                                                                                                                                                                                                                                                window sash
      encompassing production, customer use and the disposal                                                                                                *1 The K value is the heat transmission coefficient and represents the heat insulation
                                                                                                                                                               performance of the wall, floor or other parts of the building.
      of developing solutions, with an aspiration to expand this
                                                                                                                                                                                                                                                                     K value = 1.23 W/m2k
                                                                                                                                                            *2 The expression, “15% lower,” is based on the new reference unit cost for electric power set by
      business not only in Japan but into the world.                                                                                                           the Home Electric Appliances Fair Trade Conference under the SMASH simulation program.

 45   Tokuyama CSR Report 2010                                                                                                                                                                                                                                                                              Tokuyama CSR Report 2010   46
Site Report

         Tokuyama Factory                                                                                                                                                                    ■ Kashima
                                                                               Location: 1-1, Mikage-cho, Shunan-shi,                                                                                                                       Location: 26, Sunayama, Kamisu-shi, Ibaraki Prefecture
                                                                                         Yamaguchi Prefecture
                                                                                                                                                                                                                                            Employees: 77
                                                                               Employees: 1,694
                                                                               Factory Area: 1,910,000 square meters (total area)                                                              Factory                                      Factory Area: 101,000 square meters

                                                                                                                                                                                                                                                                 Main   Tokuyama Corporation’s Kashima Factory
      Main Products Cement, inorganic and organic chemical products, polycrystalline silicon,                                                                                                                                                                  Products Pharmaceutical bulks (X-ray contrast agents, stomach
                               fumed silica, vinyl chloride and others                                                                                             Tetsushi Yamada                                                                                            and duodenal ulcer treatment drugs); optical
                                                                                                                                                                                                                                                                                                                                                                   Shingo Matsuoka
                                                                                                                                                                   General Manager                                                                                                                                                                                 General Manager
                               * For further details about the Factory, see page 11-12                                                                             of the Tokuyama Factory
                                                                                                                                                                                                                                                                              materials (plastic lens monomer, light modulating                                    of the Kashima Factory
                                                                                                                                                                                                                                                                              materials, hard coating solutions); materials for
                                                                                                                                                                                                                                                                              electronic materials and metal washing solutions
        Performance Data                                                                                                                                                                                                                                                      Tokuyama Dental Corporation’s Kashima Plant
                                                                                         Unit              Fiscal 2005      Fiscal 2006      Fiscal 2007     Fiscal 2008    Fiscal 2009                                                                                       Dental materials (restorative materials, adhesives,
       SOx Emissions                                                                metric tons                2,310            1,940             1,930         1,190          1,300                                                                                          denture relining materials, impression materials,
       NOx Emissions                                                                metric tons              11,400           12,300           11,100         10,100           8,800                                                                                          plaster materials and investing materials)
       Soot Emissions                                                               metric tons                  259              267              223            161            137
       Industrial Water Consumption                                              mil. metric tons               49.5             45.8              41.1          40.6            41.8        ●At the Kashima Factory, material recycling of solvent,                                              rise from the previous year’s level at 73%. This achievement
       Effluent                                                                  mil. metric tons               21.3             22.8              24.8          22.8            20.5         from which relatively high-purity recovery was possible,                                            is due chiefly to material recycling of waste chloroform.
       COD Emissions                                                                metric tons                  152              148              161            116            107          began in fiscal 2005. Today, the Kashima Factory                                                   ●The Kashima Factory is also striving to cut its final landfill
                                                                                                                                                                                              performs material recycling for six types of waste solvent.                                         disposal volume. The material recycling of waste silica
       Total Nitrogen Emissions                                                     metric tons                    95             110              112            108            140
                                                                                                                                                                                              In fiscal 2007, material recycling to recover iodine from                                           gel brought the fiscal 2009 figure to the lowest level ever,
       Total Phosphorus Emissions                                                   metric tons                   4.0              3.9              4.5            2.9            3.6                                                                                                             at 11 metric tons.
                                                                                                                                                                                              waste fluid containing iodine compound commenced.
       PRTR Substances Emissions                                                    metric tons                    57               63               67             66             48         This was followed in the next fiscal year by material                                              ●Tokuyama Dental Corporation has changed the materials for
       Waste Generated                                                         thousand metric tons              349              360              363            344            300          recycling of waste silica gel.                                                                      some products from dichloromethane to water-based materials.
       Waste Final Disposal Volume                                                  metric tons                  660              480              480            460            420          In fiscal 2009, the rate of effective use of waste stood at its                                     It is endeavoring to expand this material shift to other products
       Energy Consumption*                                                         thousand GJ               53,600           53,900           55,400         52,400         50,600           highest level ever, specifically at 82%, reflecting a massive                                       to reduce dichloromethane emissions into the atmosphere.
       CO2 Emissions (generated from fossil fuel)*                             thousand metric tons            4,820            4,840             5,000         4,730          4,570
                                                                                                                                                                                             ■ Performance Data
       Complaints                                                                   complaints                         5              3                6             0               1
                                                                                                                                                                                                                                                                                   Unit                Fiscal 2005      Fiscal 2006       Fiscal 2007        Fiscal 2008       Fiscal 2009
                                 * The calorific power and other figures have been recalculated retrospectively to 1990, following the amendment of the Act on the Rational Use of Energy.
                                                                                                                                                                                               Industrial Water Consumption                                              thousand metric tons               112               110              107                  78                44

                                                                                                                                                                     Unit: metric tons
                                                                                                                                                                                               Effluent                                                                  thousand metric tons               126               125              129                  95                58
     ■ PRTR Substances Emissions and Displacement by Substance in Fiscal 2009                                                                                 (mg-TEQ for dioxins only)        COD Emissions                                                                  metric tons                         5              5                   5               4                 2
                                                                                 Government Ordinance                                 Emissions                                                PRTR Substances Emissions                                                      metric tons                         2              3                   4               5                 4
                                    Substance                                                                                                                              Displacement
                                                                                        Number                To Air          To Water          To Soil       Subtotal
                                                                                                                                                                                               Waste Generated                                                                metric tons                   749               779              965                770               560
       Cresol                                                                             67                      0.0             14.9              0.0          14.9             0.0
                                                                                                                                                                                               Waste Final Disposal Volume                                                    metric tons                     15                34               32                 27                11
       1,2-Dichloroethane                                                                116                      8.6              0.0              0.0            8.6            0.6
                                                                                                                                                                                               Energy Consumption                                                            thousand GJ                      51                53               58                 55                53
       Chloroethylene (Vinyl Chloride)                                                    77                      7.9              0.0              0.0            7.9            0.0
                                                                                                                                                                                               CO2 Emissions (generated from fossil fuel)                                     metric tons                 2,130            2,170             2,320             2,230              2,110
       Chloromethane (Methyl Chloride)                                                    96                      6.9              0.0              0.0            6.9            0.0
                                                                                                                                                                                               Complaints                                                                     complaints                          0              0                   0               0                 0
       Water-soluble zinc compounds                                                       1                       0.0              3.0              0.0            3.0            0.0
       Toluene                                                                           227                      2.9              0.0              0.0            2.9           16.7
       Dichloromethane (Methylene Chloride)                                              145                      1.1              0.0              0.0            1.1            0.0        ■ PRTR Substances Emissions and Displacement by Substance in Fiscal 2009                                                                                                      Unit: metric tons
       Chloroform                                                                         95                      1.1              0.0              0.0            1.1            0.0                                       Substance
                                                                                                                                                                                                                                                                          Government Ordinance                                   Emissions
                                                                                                                                                                                                                                                                                  Number                 To Air          To Water           To Soil           Subtotal
       1,2-Epoxypropane (Propylene Oxide)                                                 56                      0.5              0.0              0.0            0.5            3.0
                                                                                                                                                                                               Chloroform                                                                           95                       1.7               0.0              0.0                1.7             39.7
       1,2-Dichloropropane                                                               135                      0.5              0.0              0.0            0.5         238.2
                                                                                                                                                                                               Dichloromethane (Methylene Chloride)                                                145                       1.3               0.0              0.0                1.3               3.5
       2-Aminoethanol                                                                     16                      0.0              0.2              0.0            0.2            2.2
                                                                                                                                                                                               Toluene                                                                             227                       0.6               0.0              0.0                0.6             34.7
       Carbon Tetrachloride                                                              112                      0.1              0.0              0.0            0.1            0.1
                                                                                                                                                                                               Acetonitrile                                                                         12                       0.0               0.0              0.0                0.0               1.8
       2,2’-Azobisisobutyronitrile                                                        13                      0.0              0.0              0.0            0.0            0.0
                                                                                                                                                                                               Ethylene Glycol                                                                      43                       0.0               0.0              0.0                0.0               3.2
       Ethylene Glycol                                                                    43                      0.0              0.0              0.0            0.0            0.0
                                                                                                                                                                                               1,4-Dioxane                                                                         113                       0.0               0.0              0.0                0.0               0.1
       Water-soluble copper salt                                                         207                      0.0              0.0              0.0            0.0            0.4
                                                                                                                                                                                               N,N-Dimethylformamide                                                               172                       0.0               0.0              0.0                0.0               8.7
       Hydrazine                                                                         253                      0.0              0.0              0.0            0.0            0.0
                                                                                                                                                                                               2-Vinylpyridine                                                                     256                       0.0               0.0              0.0                0.0               0.1
       Hydrogen Fluoride and its water-soluble salts                                     283                      0.0              0.0              0.0            0.0            0.0
                                                                                                                                                                                               2,3-Epoxypropyl Methacrylate                                                        316                       0.0               0.0              0.0                0.0               0.0
       Benzene                                                                           299                      0.0              0.0              0.0            0.0            0.0
                                                                                                                                                                                               Methyl Methacrylate                                                                 320                       0.0               0.0              0.0                0.0               0.0
       Boron and its compounds                                                           304                      0.0              0.0              0.0            0.0            0.0
                                                                                                                                                                                               Alpha-Methylstylene                                                                 335                       0.0               0.0              0.0                0.0               0.0
       Dioxins                                                                           179                     29.1              2.4              0.0          31.6             0.0
                                                                                                                                                                                               Total                                                                                                         3.6               0.0              0.0                3.6             91.8
       Total (excluding dioxins)                                                                                 29.6             18.0              0.0          47.6          261.2
                                                                                                                                                                                             The substances are listed in descending order of emissions and, for substances that were not emitted at all, in order of government ordinance number.
     The substances are listed in descending order of emissions and, for substances that were not emitted at all, in order of government ordinance number.                                   Emissions to Water refers solely to the emissions released into public waters.
     Emissions to Water refers solely to the emissions released into public waters.                                                                                                          Displacement refers to the combination of the quantity displaced to sewerage and the quantity subject to intermediate treatment.
     Displacement refers to the combination of the quantity displaced to sewerage and the quantity subject to intermediate treatment.                                                        Total shows the value rounded to one decimal place after adding the values to three decimal places.
     Total shows the value rounded to one decimal place after adding the values to three decimal places.

47   Tokuyama CSR Report 2010                                                                                                                                                                                                                                                                                                                            Tokuyama CSR Report 2010              48
Site Report                                             Activities of Group Companies                                                                                                                                                                  Sun • Tox Co., Ltd. Tokuyama Plant
                                                                                                                                                                                                                                                       Sun Arrow Chemical Co., Ltd. Tokuyama Plant
                                                                                                                                                                                                                                                                                                                                                                                                             Sun • Tox Co., Ltd. Kanto Plant

                                                                                                                                                                                                                                                       Tokuyama Polypropylene Co., Ltd.
        Tokuyama understands that Responsible Care activities                                                         ■ ISO 9001 and ISO 14001 Certification Status of Eleven
     should be conducted on a group-wide basis. The Company                                                             Group Companies
     has signed RC management agreements with Tokuyama                                                                                Group Company                                   ISO9001                ISO14001
     Group companies both inside and outside Japan engaging in                                                            Sun•Tox Co., Ltd.                                                ●                     ●
     production activities to support their activities.                                                                   Excel Shanon Corporation                                         ●                     —
        We collect data on the environmental impact of group                                                              Tohoku Shanon Co., Ltd.                                          ●                     ●

                                                                                                                                                                                                                                 ■ Sun Arrow Chemical
                                                                                                                                                                                                                                                                                                                                                        Date of Foundation: February 1, 1999
     companies and their safety management indicators and                                                                 A&T Corporation                                                  ●                     ●                                                                                                                                      Ownership: Tokuyama Corporation (100%)
     conduct safety, environmental and quality audits at the rate of
                                                                                                                                                                                           ●                     ●
                                                                                                                                                                                                                                   Co., Ltd.
                                                                                                                          Figaro Engineering Inc.                                                                                                                                                                                                       Head Office: Kitahama Chuo Bldg., 2-2-22, Kitahama, Chuo-ku, Osaka
     several group companies per year. By means of these actions,
                                                                                                                          Tokuyama Dental Corporation                                      —*                    ●                                                                                                                                      Business: Manufacture and sale of polyvinyl chloride compounds
     we monitor and enforce RC activities conducted at individual
                                                                                                                          Tokuyama Siltech Co., Ltd.                                       ●                     ●
     group companies. The trend of statutory regulations and other
                                                                                                                          Sun Arrow Chemical Co., Ltd.                                     —                     ●               ● Tokuyama                  Location: 1-2, Harumi-cho, Shunan-shi, Yamaguchi Prefecture
     information are shared with our group companies.                                                                                                                                                                              Plant                     Employees: 24                Area: 3,280 square meters
                                                                                                                          ASTOM Corporation                                                ●                     ●
        We also provide our group companies with assistance in
     acquiring ISO 14001 and ISO 9001 certification.                                                                      Shin Dai-ichi Vinyl Corporation                                  —                     ●                                                                                                                                RC activities of the Tokuyama Plant
                                                                                                                          Tokuyama Polypropylene Co., Ltd.                                 ●                     ●                                                                                                                                   Located on the premises of the Higashi Plant in Tokuyama
                                                                                                                      ●=Certified ●=Included in the certified sites *=Certified with ISO13485
                                                                                                                                                                                                                                                                                                                                                  Corporation’s Tokuyama Factory, our Tokuyama Plant
                                                                                                                                                                                                                                                                                                                                                  manufactures polyvinyl chloride compounds for plastic window
                                                                                                                                                                                                                                                                                                                                                  sashes, which after the governmental housing eco-point program
     ■ Sun•Tox Co., Ltd.
                                                                                                              Date of Foundation: February 14, 1992
                                                                                                              Ownership: Tokuyama Corporation (100%)                                                                                                                                                                                              are increasingly recognized as having energy conservation
                                                                                                              Head Office: Annex to Tokuyama Bldg., 1-4-5, Nishi Shimbashi, Minato-ku, Tokyo                                                                                                                                                      effects. While it is common practice to add lead-based stabilizer
                                                                                                              Business: Manufacture and sale of biaxial-oriented polypropylene films and cast
                                                                                                                        polypropylene films                                                                                                                                                                                                       to polyvinyl chloride compounds, we continued our efforts to
                                                                                                                                                                                                                                                                                                          Shigefumi Kunihiro                      develop a lead-free formula in fiscal 2009, as we did in the
                                                                                                                                                                                                                                                                                                          Plant Manager
                                                                                                                                                                                                                                                                                                                                                  preceding fiscal year, in response to the requests of users.
     ● Kanto                       Location: 3075-18, Shimasu, Itako-shi, Ibaraki Prefecture                          ● Tokuyama                 Location: 7-7, Harumi-cho, Shunan-shi, Yamaguchi Prefecture
                                                                                                                                                                                                                                                                                                                                                     To protect the environment, we closely studied making
       Plant                       Employees: 191             Area: 55,800 square meters                                Plant                    Employees: 148                Area: 24,100 square meters
                                                                                                                                                                                                                                 ■ Performance Data                                                                                               effective use of combustible waste in accordance with
                                                                                                                                                                                                                                                                  Unit        Fiscal 2005 Fiscal 2006 Fiscal 2007 Fiscal 2008 Fiscal 2009         Tokuyama Corporation’s Tokuyama Factory Environment
                                                                                                                                                                                                                                 Power Consumption              thousand
                                                                                                                                                                                                                                                                  kWh           3,210       3,540       3,470       2,810        2,662            Management Program. As a result of our efforts, we nearly
                                                                                                                                                                                                                                 Waste Plastics Generated       metric tons        172         186         158         157         119            established the formula to recycle the waste into fuel for cement
                                                                                                                                                                                                                                 Effectively Used Waste         metric tons        172         186         158         157         119            production. With respect to safety, health, security and disaster
                                                                                                                                                                                                                                 Plastics Volume
                                                                                                                                                                                                                                 Waste Final Disposal Volume metric tons           0.1            0           0         0.6         3.8           prevention, we carried out full-participation Five-S activities,
                                                                                                                                                                                                                                 Steam Consumption              metric tons        240         240         240         240         240
                                                                                                                                                                                                                                                                                                                                                  Hiyari Hatto (accident prevention) activities and Kiken Yochi
                                                                                                                                                                                                                                 Industrial Water Consumption metric tons           65          65           65          65          65
                                                                                                                                                                                                                                                                                                                                                  (hazard prediction) training. As a result of these activities, we
                                                                                                                                                                                                                                                                                                                                                  have successfully maintained our zero-accident and zero-
                                                                              Toshiyuki Yamaoka                                                                                                 Koji Tanaka
                                                                                                                                                                                                                                                                                                                                                  disaster record since the company’s start-up. As a member of the
                                                                              Plant Manager                                                                                                     Plant Manager
                                                                                                                                                                                                                                                                                                                                                  Tokuyama Group, we will continue to operate the plant with a
                                                                                                                                                                                                                                                                                                                                                  commitment to environmental conservation, safety and security.
        Located in the Itako Industrial Park in Ibaraki Prefecture, the                                                Located on the premises of Tokuyama Corporation’s
     Kanto Plant produces 25,000 metric tons of biaxial-oriented                                                      Tokuyama Factory, the Tokuyama Plant produces 21,000
                                                                                                                                                                                                                                 ■ Tokuyama Polypropylene
                                                                                                                                                                                                                                                                                                                                            Date of Foundation: April 2, 2001
     and cast polypropylene films per year. As a Type I Energy                                                        metric tons of biaxial-oriented polypropylene films per year.                                                                                                                                                         Ownership: Tokuyama Corporation (50%) and Prime Polymer Co., Ltd. (50%)
     Management Designated Facility, it has been taking steps to                                                      In environmental aspects, we work together with Tokuyama
     ensure effective energy operation by introducing co-generation                                                   Corporation’s Tokuyama Factory to address environmental                                                      Co., Ltd.                                                                                                Head Office: 1-1, Harumi-cho, Shunan-shi, Yamaguchi Prefecture
                                                                                                                                                                                                                                                                                                                                            Business: Manufacture and sale of polypropylene resin and polypropylene compound resin
     systems and energy-efficient facilities, among other initiatives.                                                conservation and to carry out ISO 14001 activities. As a Type I
        Placing top priority on safety, we are capitalizing on our                                                    Energy Management Designated Facility, our plant is continuing                                             ● Tokuyama                  Location: 1-1, Harumi-cho, Shunan-shi, Yamaguchi Prefecture
     three management systems for occupational safety and health                                                                                                                                                                                                                                                                                     Our Tokuyama Plant is located on the premises of the
                                                                                                                      with its efforts to slash manufacturing losses and thereby lower                                             Plant                     Employees: 66                Area: 70,997 square meters
     (OSHMS), for the environment (ISO 14001) and for quality (ISO                                                                                                                                                                                                                                                                                Higashi Plant, which constitutes part of the Tokuyama Factory
                                                                                                                      unit energy consumption. An activity is underway to recycle all
                                                                                                                                                                                                                                                                                                                                                  of Tokuyama Corporation. The plant manufactures and sells
     9001), to make steady improvements throughout the plant.                                                         manufacturing losses generated.
                                                                                                                                                                                                                                                                                                                                                  200,000 metric tons of polypropylene resins and 7,000 metric
        For fiscal 2010, a new production line for cast                                                                  It obtained certification for the Occupational Safety and Health
                                                                                                                                                                                                                                                                                                                                                  tons of soft polyolefin resins each year. This plant runs three
     polypropylene films will enter full-scale operation. We will                                                     Management System (OSHMS) in February 2008. In fiscal 2009,                                                                                                                                                                 systems for safety management, environmental management,
     also be reconstructing the existing line as a model line in                                                      no accidents or disasters occurred at our plant. Going forward, it                                                                                                                                                          and quality management and undertakes Responsible Care
     terms of quality, energy conservation and safety.                                                                will be developing safety and health activities centering on risk                                                                                                                                                           activities in tandem with the Tokuyama Factory. With respect to
                                                                                                                      assessment, and developing them into a management system                                                                                                                                                                    safety management, we perform risk assessments of processes,
     ■ Performance Data                                                                                               through a PDCA cycle. Under the slogan of “Take pleasure in                                                                                                                                                                 facilities, and work. We are also introducing the Company-
                                    Unit        Fiscal 2005 Fiscal 2006 Fiscal 2007 Fiscal 2008 Fiscal 2009
                                                                                                                                                                                                                                                                                                          Hiroshi Horii
                                                                                                                      production, be stringent with quality and adhere to safety,” the                                                                                                                                                            wide Hiyari Hatto Kigakari (HHK) activities to eradicate
                                  thousand                                                                                                                                                                                                                                                                Plant Manager
     Power Consumption                            28,480      29,730      29,212      30,600      31,697                                                                                                                                                                                                                                          accidents and other concerns. As a result of these efforts, we
                                                                                                                      Tokuyama Plant aims to implement plant management in a manner
     Fuel Oil Consumption             Kl             910         600          639         745         632                                                                                                                                                                                                                                         succeeded in maintaining the zero-accident and zero-disaster
                                                                                                                      that earns the trust of society, the customers and employees.
     SOx Emissions               metric tons          0.7         0.6         0.4         0.4          0.3                                                                                                                                                                                                                                        status that we have enjoyed for 35 years, since the days when
     NOx Emissions               metric tons          0.9         0.5         0.7         0.7          0.5            ■ Performance Data                                                                                                                                                                                                          we operated as the Polypropylene Manufacturing Department.
                                                                                                                                                                                                                                 ■ Performance Data
     Soot Emissions              metric tons         0.04        0.03        0.04        0.08        0.05                                              Unit        Fiscal 2005 Fiscal 2006 Fiscal 2007 Fiscal 2008 Fiscal 2009                                                                                                                       We are working to renew the five-year accreditation obtained
                                                                                                                                                                                                                                                                  Unit        Fiscal 2005 Fiscal 2006 Fiscal 2007 Fiscal 2008 Fiscal 2009
     Industrial Water Consumption metric tons          63          59          66          77          60              Unit energy consumption                                                                                                                                                                                                    in 2005 for the accredited safety inspection executed under
                                                                                                                       index with fiscal 1990 as        %                 89          87          88          87          92     Industrial Water Consumption   thousand
                                                                                                                                                                                                                                                                                   443         387         417         322         354
     Waste Generated             metric tons           22          52          60          34          43              the base year                                                                                                                            metric tons                                                                       the High Pressure Gas Safety Act, as we need to renew it in
     Waste Final Disposal Volume metric tons            0           9          29            5         16                                            thousand                                                                    Waste Generated                metric tons         85         161         141         158         134            2010. Periodic maintenance of facilities is made every other
                                                                                                                       Power Consumption               kWh          35,770       34,230      34,830      31,080      31,250
     COD Emissions                                   0.02        0.01        0.01        0.03        0.02                                                                                                                        Waste Final Disposal Volume    metric tons           0        25*            4        16*          6.5           year, and will be carried out in fiscal 2010. We will be stepping
                                 metric tons                                                                           0.3 MPa Steam Consumption     metric tons      2,930       4,220        3,410      2,770       2,170
                                                                                                                       2.1 MPa Steam Consumption     metric tons    44,830       42,270      43,830      39,160      39,690      Unit Energy Consumption
                                                                                                                                                                                                                                                                   %                79          79           85          98          97
                                                                                                                                                                                                                                                                                                                                                  up Responsible Care activities in a bid to maintain our zero-
                                                                                                                                                                                                                                 Index (Fiscal 2002 = 100)                                                                                        accident and zero-disaster record, to reduce our environmental
                                                                                                                       Waste Generated               metric tons        160         180         200         120           90
                                                                                                                                                                                                                                                                                                *Year with periodic maintenance                   footprint, and to eliminate all customer quality complaints.
                                                                                                                       Waste Final Disposal Volume   metric tons           0           1          11          20            6

49   Tokuyama CSR Report 2010                                                                                                                                                                                                                                                                                                                                                                   Tokuyama CSR Report 2010             50
Third-Party Comments

                                                                                                                                                                                       History of Tokuyama’s RC Activities
        A Review on Tokuyama’s CSR Report                                                                                                                                              Jul. 1991 Global Environmental Issues Committee established                  Apr.          Renews ISO 9001 certification under 2000 standard
                                                                                                                                                                                       Mar. 1993 Establishes the RC Administration Committee                                      and concurrently extends its scope to the sales sector
        Eriko Nashioka                                                                                                                                                                 Mar.      Institutes a voluntary plan for Total Management of                Dec.          Undergoes the Responsible Care verification process.
        Certified Public Accountant and Director of the Institute for Environmental Management Accounting                                                                                        Environment, Safety and Quality                                                  The Tokuyama Factory achieves a Type II zero-
        A part-time lecturer in environmental accounting and environmental        chief researcher in the Enterprises and the Environment project run by the                           Apr. 1994 Acquires ISO 9002 certification for high-purity                                  accident record (8.1 million hours for the chemical
        auditing for the Faculty of Commerce of Doshisha University. In 1991,     Kansai Research Center of the Institute for Global Environmental Strategies.                                   isopropyl alcohol                                                                industry) as defined by the Ministry of Health, Labour
        she joined the Environmental Auditing Section, the Third Department at    In April 2004, she joined the management of the Institute for Environmental
                                                                                                                                                                                       Jun.      Develops product warranty systems, including                                     and Welfare
        the Osaka Office of Ota Showa & Co., currently Ernst & Young ShinNihon    Management Accounting. She was involved in a number of committees,
        LLC, where she worked as a consultant concerning accounting audits (the   including the technical subcommittee on sustainability information                                             product and labeling assessments                                   Oct. 2004     Figaro Engineering Inc. acquires ISO 14001 certification.
        Commercial Code, the Securities Exchange Law and the Small and Medium-    disclosure in the Management Research Committee of the Japanese Institute                            Apr. 1995 Joins the Japan Responsible Care Council                           Oct.          The Kashima Factory becomes the recipient of a prize
        sized Enterprise Investment Business Corporation Act), environmental      of Certified Public Accountants and other committees under the Ministry of                           May 1997 Acquires ISO 9001 certification for cement manufacturing                          presented by the Director-General of Labor Bureau of
        accounting and environmental reports. She completed her studies in        the Environment and the Ministry of Economy, Trade and Industry. She is a
                                                                                                                                                                                       Sept.     Publishes the first edition of the RC Report                                     the Ibaraki Prefectural Government.
        environmental management at the Doshisha University Graduate School of    member of the primary screening committee for the Environmental Report
        Policy and Management in 1997. From April 2001 to March 2004, she was     Award co-organized by Toyo Keizai Inc.                                                               Apr. 1998 Acquires ISO 9001 certification for the manufacturing              Feb. 2005     The Tokuyama Factory becomes the recipient of a
                                                                                                                                                                                                 of dental materials                                                	    	        prize presented by the Director-General of the Agency
                                                                                                                                                                                       Dec.      Acquires ISO 9001 and 9002 certification for                                     of Natural Resources and Energy for Factories with
     A readable review of Tokuyama’s past year                                                                    Currently, numerical data excluding those on the                               aluminum nitride and functional powders and ISO                                  Distinguished Energy Management (electricity sector).
                                                                                                              environment look somewhat insufficient. It is hoped that the                       14001 certification for the Tokuyama Factory                       Mar.          Acquires Yamaguchi Prefecture Eco-Factory
         Fiscal 2009 Highlights displays the events during the                                                                                                                         Jan. 1999 Acquires ISO 14001 certification for the Kashima Factory                         certification for the Tokuyama Factory
     year in a chronological order. It is a good attempt based on                                             Company will specify a goal on the process and management
                                                                                                                                                                                       Jun.      Acquires ISO 9002 certification for chemical                       Jun.          The Tokuyama Factory achieves a Type III zero-accident
     the fundamental concept that the CSR report is an annual                                                 for attaining the Centennial Vision, explicitly provide                            products, polypropylene, films and others                                        record (12.2 million hours for the chemical industry) as
     publication. The highlights are followed by three special                                                numerical data and benchmarks if necessary and disclose                  Dec.      Sets up the Ecological Management Initiative Department                          defined by the Ministry of Health, Labour and Welfare.
     features. This structure makes clear the point on which the                                              the current status and the review. For this purpose, it will be          Dec.      Acquires ISO 9002 certification for polycrystalline                Sept.         ASTOM Corporation acquires ISO 9001 certification.
                                                                                                              necessary to organize CSR activities in systematic form and                        silicon, organic solvents and suchlike                             Aug. 2006     Shanghai Tokuyama Plastics Co., Ltd. acquires ISO
     Company puts the greatest emphasis and adds power to                                                                                                                              Aug. 2000 Creates the Recycling and Environment Business                                   9001 certification.
     the report. It focuses on advances in the highly efficient                                               to define a global management system for executing the CSR
                                                                                                                                                                                                 Department                                                         Oct.          Tokuyama Mtech Corporation acquires ISO 9001
     production structure, globalization and the Company’s role                                               activities.                                                              Apr. 2001 Establishes Yamaguchi Eco-Tech Corporation                                       certification.
     in cultural conservation. The report will better inform readers                                                                                                                   Apr. 2002 Acquires ISO 9002 certification for vinyl chloride                 Dec.          The Kanto Plant of Sun·Tox Co., Ltd. acquires ISO
                                                                                                                                                                                                 monomer and polyvinyl chloride                                                   14001 certification.
     of the Company’s activities if these features are more closely                                           More clear-cut definition of Tokuyama’s CSR                              Jun.      The Kashima Factory becomes the recipient of the                   Apr. 2007     Establishes the Corporate Social Responsibility Division
     linked with the highlights showcasing the year’s events. It                                                                                                                                 Award for Earth-Friendly Companies from the Ibaraki                Jan. 2008     The Tokuyama Factory becomes the recipient of a
                                                                                                                  The essence of CSR in Tokuyama’s business operations
     would be advisable, for example, to give reasons why the                                                                                                                                    Prefectural Government.                                                          prize presented by the Minister of Economy, Trade
                                                                                                              is already stated in the Code of Business Activities and in
     special features have been selected as such, or to specify the                                                                                                                    Mar. 2003 Recipient of an award from the Director-General                                  and Industry in the Award for Excellent Energy
                                                                                                              the basic policy for management in harmony with society.
     current place in the Centennial Vision. I appreciate the efforts                                                                                                                            of the Industrial Science and Technology Policy                                  Management Plant.
                                                                                                              On the other hand, no specific action plan or benchmark                            and Environment Bureau of the Ministry of Economy,                 Dec. 2009     Tokuyama Chemicals (Zhejiang) Co., Ltd. acquires
     to give plain presentations of Tokuyama’s businesses and
                                                                                                              is shown. Now that the CSR foundation has been fully                               Trade and Industry in the Award for Resource                                     ISO 9001 and 14001 certification.
     products from readers’ standpoints by adding illustrations and                                                                                                                              Recycling Technologies and Systems                                 Mar. 2010     Acquires certification under the Responsible Care
                                                                                                              developed, it is time to demonstrate Tokuyama’s CSR in
     explanations of technical terms as needed.                                                                                                                                                                                                                                   Global Charter
                                                                                                              specific form in connection with its businesses. I think that
                                                                                                              accepting external waste is a business that the community
     Steady improvements                                                                                      needs. It is also vital to clarify the social needs being met
     toward the Centennial Vision                                                                             by Tokuyama. Interactive communication with stakeholders
                                                                                                              including employees will remain indispensable. I hope
                                                                                                                                                                                       Editor’s Notes
        The Centennial Vision toward 2018 defines CSR as a
                                                                                                              that the Company will make steady progress toward the                       This edition of the CSR Report has been produced                           were continued from the previous fiscal year with the
     foundation that supports the Company’s strategy. The ten-
                                                                                                              Centennial Vision that sets out the ideal image for Tokuyama
     year plan announced in 2008 was commenced recently,                                                                                                                               with an emphasis on giving shareholders a clearer                             aim of offering a clearer picture of the Company.
                                                                                                              in 2018, produce a CSR Report that clearly demonstrates the
     yet the Company has made steady progress. The structure                                                                                                                           insight into Tokuyama’s CSR activities.                                             We would be delighted to receive your frank
                                                                                                              progress, communicate with the use of the report and carry
     that supports the plan needs to develop in parallel with the                                                                                                                         In this edition, the highlights have been introduced                       feedback and suggestions so that we can continue to
                                                                                                              out CSR activities that respond to social needs.
     progress in strategy implementation. It will be necessary to                                                                                                                      for reviewing major events during the past fiscal year.                       improve the CSR report as a tool for communicating
     institute an annual action plan specifying tangible actions                                                                                                                       Our efforts to produce more informative special features                      with you.
     under the Tokuyama Group Code of Business Activities and
     to proceed to steady action.

                                                                                                                                             In the process of producing Third-Party
       In Response to the Third-Party Comments                                                                                               Comments                                                                                            For inquiries, please contact:

                       Masao Fukuoka General Manager of the Corporate Social Responsibility Div.
                                                                                                                                                                                                                                      Corporate Social Responsibility Division
          We have received valuable and thought-provoking comments about the problems
       and future directions of our CSR activities. In the past one year or so, we have focused
       our energy on swiftly regaining the trust of stakeholders by consistently taking steps to
       ensure that the plastic window sash incident is not repeated.
                                                                                                                                                                                                                     Shibuya Konno Bldg., 3-3-1, Shibuya, Shibuya-ku, Tokyo 150-8383 Japan
          The Tokuyama Group now faces a challenge of clearly demonstrating CSR                                                                                                                                                  Phone +81-3-3499-8478              Fax +81-3-3499-8961
       promotion as a mechanism that supports the basic strategy toward the Centennial                                                                                                                                              * To ensure accessibility to as many readers as possible,
       Vision in a tangible form. The CSR Report is our key means of communicating with                                                                                                                                            the CSR Report is also available via Tokuyama’s website.
       stakeholders. Based on the awareness that it is an interactive tool, we will continue to                                                                                                                                        http://www.tokuyama.co.jp/eng/enviro/
       increase its coverage in the hope that it will help boost our corporate value.
                                                                                                                                             An interview with the Corporate Social
                                                                                                                                             Responsibility Division

51   Tokuyama CSR Report 2010                                                                                                                                                                                                                                                                                 Tokuyama CSR Report 2010        52

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