FP : Report 2020

FP Corporation Report 2020

FP CORPORATION

FP Corporation forges links between people, society and the environment

through the manufacture and sale of food trays and containers.

FP Corporation's food tray and container manufacturing and sales businesses incorporate activities to recycle Earth's resources, pursued in cooperation with consumers, distributors and sellers, and businesses that utilize human resources with disabilities. In addition to connecting people with one another in various culinary scenarios through the use of food trays and containers, through our business activities we aim to help create prosperity and build a sustainable society by forging links between people, society and the environment, and putting our values into practice across all of these aspects.

FP Corporation's Hands-on Approach and Customer-first Concept

in the Food Tray and Container Manufacturing and Sales Businesses

With the aim of continuing to produce truly useful products in line with people's needs and the values of society, FP Corporation has committed to act upon the principles of taking a hands-on approach and putting the customer first. By continuing to consider what is important and what is required where food trays and containers are used, sold, manufactured, stored, transported and delivered, we continue our persistent efforts to progress.

1 FP Corporation Report 2020

CONTENTS

• Corporate Profile
• Message from Top Management
• ESG at FP Corporation E (Environment)
  S (Society)
  G (Governance)
• Special Feature: Exploring the Utility of Food Trays and Containers
• The FP Corporation Value Chain

Procurement

Product Development

Manufacturing

Logistics

Sales

Recycling

• Facts about FP Corporation Third Party Comments

FP Corporation Report 2020

2

Corporate Profile

Company Profile

Name:	FP CORPORATION
Established:	July 1962
Representative:	Morimasa Sato, President
Capital:	13.15 billion yen
Number of employees:	885 (FP Corporation Group: 4,484)
Business outline:	Manufacturing and marketing of disposable
	food containers made of polystyrene and
	other compound resins; marketing of related
	packaging materials
Fukuyama Headquarters: 1-13-15Akebono-cho,Fukuyama-shi,
	Hiroshima-ken,721-8607 Japan
	Tel.: [phone]
	Fax: [phone]
Tokyo Headquarters:	Shinjuku Oak Tower 36F, 6-8-1 Nishi Shinjuku,
	Shinjuku-ku, Tokyo, 163-6036 Japan
	Tel.: [phone]
	Fax: [phone]

Fukuyama Headquarters (Fukuyama-shi, Hiroshima)	Tokyo Headquarters
	(Shinjuku-ku, Tokyo)

Our logo features the letters FP, which signify the first letters of the first two words in Fukuyama Pearl Paper Manufacturing Corporation, which was the name of our company when it was established.

FP Corporation Group Companies

Manufacturing		Sales, Others
FPCO Hokkaido Co.	FPCO Ducks Co.	FP Trading Co., Ltd.
FPCO Yamagata, Ltd.	FPCO Ai Pack Co.	FP Chupa Corporation
FPCO Ibaraki Co.	FPCO ALRight Co. Ltd.	FPCO Dia Foods Co., Ltd.
FPCO Yachiyo Co.	FPCO Gravure Co., Ltd.	FPCO International Package Co., Ltd.
FPCO Shimodate, Ltd.	Nishinihon PET-Bottle Recycle Co., Ltd.	FPCO Ishida Co., Ltd.
FPCO Chikusei Co.		FPCO Ueda Co.
FPCO Toyama Co.	Logistics	FPCO Miyako Himo Co., Ltd.
FPCO Chubu Co.
FP Logistics Corporation
FPCO Kasaoka Co.	I-Logic Co., Ltd.
FPCO Fukuyama Co.	FPCO East Logi Co., Ltd.
FPCO Kannabe, Ltd.	FPCO West Logi Co., Ltd.
FPCO Kyushu Co.

Sites incorporating production plants, recycling plants, distribution centers, etc. (From left to right: Fukuyama, Chubu and Kanto)

3 FP Corporation Report 2020

CORPORATE PROFILE

Main Products Manufactured and Sold by FP Corporation

General Purpose: Available in different sizes, colors and patterns for various applications

Eco Tray (recycled product)

Sushi: Delivering deliciousness to consumers without losing freshness

Fresh Fish: Boosting the attractive qualities of fresh seafood

Rice: Available in different sizes, colors and patterns for various applications

Meat: Hygienic and emphasizing the taste and color of meat		Deli: User-friendly with microwavable and other features

Clear Containers: Freshness and deliciousness is visible through transparent containers

Events: Ideal for joyful events where people gather

Hinged clear containers: For Namakara Sozai and other proposals in pursuit of convenience

Others: Paper containers, egg cartons, film products and more

FP Corporation Report 2020

4

Message from Top Management

The business management of FP Corporation is characterized by the close linkage of its business operation and ESG efforts. We create value throughout society through the manufacturing, sales and recycling of food trays and containers.

Morimasa Sato

President

Two years ago, the home meal replacement market surpassed 10 trillion yen. It continues to expand as major restaurant chains and medium- and small-sized restaurants launch food takeout and delivery services. In these circumstances, demand for food trays and containers is growing to be able to provide food in a safe and reassuring manner. We at FP Corporation strongly feel that manufacturing and selling these containers is our social responsibility.

We are working not only to stably supply safe and reassuring food trays and containers but also to provide value to society. Food trays and containers are useful and convenient in many different ways. They provide supermarkets and other food retailers with efficiency gains in food arrangement, lid closing and display. They provide consumers with food hygiene management, freshness maintenance and the resulting reduction of food waste, and the reduction of the time required for cooking. In addition, we collect and recycle used products to reduce environmental impact as well. We create value for society through efforts like these in our value chain.

This is how our business operations are closely connected to ESG efforts in the management of our business. I am convinced that our mission is to continue to create value through our business.

5 FP Corporation Report 2020

Eco Tray

			TOP MESSAGE
Recycling		Procurement
		Propelling
		the cycle of manufacturing,
Sales		sales and recycling food		Product
	trays and containers
	Development
		The FP Corporation
		Value Chain
Logistics		Manufacturing

FP Corporation creates extra value in every aspect of its products.

• Value chain for environmental impact reduction
  FP Corporation commenced sales of the environmentally friendly Eco Tray formed tray in 1992. In 2007, we began collecting transparent containers. In 2012, we released the Eco APET transparent
  containers containing recycled material from used PET bottles, enabling their commercialization. We have constructed a system of procuring used products and PET bottles to be the materials used to make products, which reduces the environmental impact. We also have independent
  logistical operations. They are a major driving force for the recycling of resources. After delivering products, our empty trucks carry used containers back to us, a system made possible because we independently draw up logistics plans.

• Value chain for providing high value-added products
  Another value chain that FP Corporation operates is the cycle of creativity that adds extra value to products. To ensure the utility of food trays and containers, including their ability to ensure hygiene, resist heat, cold and oil, facilitate sales operations, and reduce food waste and CO2 emissions, six separate functions that are important to our value chain propose ideas and our Product Development team to continues to put them into tangible form. FP Corporation is unique in that it is not only the sales team,
  which often observes food sales operations, but everyone, even the logistics team, which at first glance would seem to have nothing to do with product development, that makes proposals on, for example, the shapes of products

for higher efficiency when loading trucks with products.

The value to society produced from these two value chains contributes to the sustainable development goals (SDGs) proposed by the United Nations.

6

FP Corporation Report 2020

(September 2019)

(June 2019)

ESG at FP Corporation FP Corporation's business management

E

ENVIRONMENT

S

SOCIETY

G

GOVERNANCE

Indices of companies with distinguished performance regarding the environment, society and governance (ESG)

FP Corporation was added to two ESG indices, the FTSE4Good Index Series and the FTSE Blossom Japan Index, for the first time.

FP Corporation won an excellence award in the first Japan Times ESG Awards.

FP Corporation is one of	FP Corporation is one of
1,034 companies in the world.	179 companies in Japan.

7 FP Corporation Report 2020

is characterized by the close linkage of business operations and ESG efforts.

Environment

余余 Environmental initiatives throughout the group

余余 Results of CO2 emissions reductions by the recycling business 余余 Various publicity activities for the expansion of recycling

余余 Actions to combat the problem of marine plastic litter

余余 Active participation in global environmental conservation activities 余余 Information disclosure regarding responses to climate change

As a corporate citizen

余余 Employment of workers with disabilities as human assets 余余 Activities towards the realization of an inclusive society 余余 Support for the employment of persons with disabilities 余余 Community engagement in a wide variety of areas

Organizational governance

余余 Compliance

余余 Risk management

余余 Human resources management

FP Corporation began employing workers with disabilities in 1986 and began recycling used food trays in 1990. We have taken steps forward with the overriding belief that our activities that create value for society in various ways without being swayed by immediate interests will lead to corporate development. To continue to take powerful steps to follow the path set for us by our predecessors, we will place more focus on organizational governance in an effort to win greater trust from society.

Kimiko Nishimura

Senior Vice President and Director,

Supervisor of General Affairs and Personnel Division, Supervisor of Special Subsidiary Pursuing Business Providing Type A Support for Continuous Employment, Supervisor of Environment Management Department, and Supervisor of Judicial Affairs & Compliance Department

FP Corporation Report 2020

8

E	Environment
ENVIRONMENT

Environment

FP Corporation carries out

environmental conservation and

core corporate activities as an

integrated business pillar.

We installed our first collection box at a supermarket	9
in the city of Fukuyama in 1990. Thirty years on, we
now have around 9,400 used food tray and container
collection points across the country. Enjoying support	colle
from many stakeholders, we have established the	at
FPCO Method recycling system that propels the cycle
of product recycling.	and

Sales of Eco Tray, Eco APET and Eco OPET recycled
from used products significantly reduce CO emissions.
		2
These environmentally friendly products have functions
	that are completely identical to the functions of
		products made from virgin raw materials.
		We recommend that our customers,
Environmentally		supermarkets, introduce environ-
	mentally friendly products in their
friendly products	stores.

reduce C02

emissions by approx.

160,000

tons / year

9 FP Corporation Report 2020

,390

	Lighter
	material weights
22.9 g	One third
Material: HIPS
	as a result of changes of	We are constantly thinking
	materials and reductions	about ways of reducing the
	environmental impact of products,
	of wall thickness	including the reduction of weight
			and wall thickness to reduce the
			amount of raw materials. To accomplish
		this, we continue research and development
		into materials and design improvements and
	Material: Foamed SP	experiment to seek good combinations of materials
	and purposes of use.
	(low-foaming)
	7.8 g

ction points

supermarkets other retailers

Lower stack heights

Approx. 45%

Helping reduce

environment impacts from storage, packing and transportation

Small improvements and changes in perspective pave the way for putting more products in the same space. These measures reducing environmental impact are unique to FP Corporation, since it handles both warehousing and transport itself.

Continuously developing its reputation in society and earning recognition

Honor by the Minister of the Environment Award for Global Warming Prevention Activity in FY2015

FP Corporation Report 2020 10

E Environment

ENVIRONMENT

Environmental

initiatives

FP Corporation's Environmental Policythroughout the

group

Basic Principle

Based on the recognition that preserving and protecting the global environment is an issue of the highest priority, FP Corporation operates its business according to the basic principle of contributing to the realization of a sustainable society in harmony with the environment.

Policy

1. From the stance of reducing CO2 emissions and making effective use of natural resources, we strive to thoroughly reduce the resources used in our business activities, products and services while actively promoting the expansion of the FPCO Method Recycling business, which involves the recycling of used food containers disposed of from regular households into new food containers.
2. We will observe the legal and other requirements placed upon FP Corporation, endeavor to understand the needs and expectations of our stakeholders, establish voluntary standards in our operations and prevent pollution.
3. We will establish environmental goals that take the environmental impact of our business activities, products and services into account, formulate and promote management plans, evaluate our success through internal audits and reviews by senior management, and undertake continual improvement.
4. We will promote the reduction of the amount of water resources used through the efficient use of water.
5. We will prevent environmental pollution due to chemical substances and waste, and environmental risks that lead to health hazards.

Overview of environmental conservation activities

The FP Corporation Group believes that measures to address climate change form one of the basics of management. In FP Corporation Eco Action 50 (FPEA-50), our environmental management plan, we have established five working groups: Products, Production, Logistics, Sales and Office. These working groups establish their own goals and undertake corresponding activities as part of the efforts to reduce total CO2 emissions across the FP Corporation Group. The working groups repeat the process of exchanging information and working together with the aim of producing significant results through a multiplier effect.

1. Lighting equipment: Replacement with and introduction of energy-efficient fluorescent bulbs, LED lights and others
2. Air-conditioningequipment: Replacement of air-conditioning equipment, installation of inverter control units and others
3. Materials development: Research into resins that produce minimal CO2 emissions and others
4. Production and recycling equipment: Expansion of recycling plants, introduction of high-efficiency energy lines and others

1. Lighting equipment: Reconsideration of lighting duration, turning-off unnecessary lighting, and reconsideration of lighting intensity
2. Air-conditioningequipment: Operation at reasonable temperatures, non-operation of unnecessary air conditioning, and cleaning of air conditioners, ventilation fans and others
3. Product development: Development of lighter products, research into reduced wall thickness, expansion of sales volume of products made from recycled resins
4. Production equipment: Consideration of efficient production processes and increased procurement of recycled raw material

11 FP Corporation Report 2020

Comparison in CO2 emissions between virgin products and recycled products

Results of CO2

emissions

reductions by the recycling business

Eco Tray

FP Corporation Product Comparison

Eco APET

FP Corporation Product Comparison

Effect of Recycling on

Effect of Recycling on

7.0

6.54

CO₂ Emissions

5.0

4.94

CO₂

Emissions

6.0

1.96 kg

1.49 kg

5.0

Material

4.0

Material

-plastic

4.58

-plastic

3.45

Manufacturing

Manufacturing

4.0

3.53

Material

3.0

2.94

Material

2/kg

Manufacturing

/kg2

Manufacturing

1.58

1.45

CO

3.0

CO

Product

Product

2.0

-

Manufacturing

Manufacturing

-

Product Manufacturing

Product Manufacturing

kg

kg

2.0

1.08

1.07

0.63

0.63

Waste

Distribution

Waste

Distribution

1.0

Waste

Distribution

Waste

Distribution

1.0

0.09

0.09

0.03

0.03

1.84

1.84

1.34

1.34

0

New Trays Made from Virgin

Eco Tray

0

Eco APET

Virgin APET plastic containers

Materials

(Made Using Recycled Materials)

(Made from Virgin Materials)

(Made Using Recycled Materials)

Processes skipped in FPCO

Tray to Tray

Processes skipped in FPCO

Tray to Tray

Method Recycling

Method Recycling

Crude oil

Naphtha

Cracked petroleum

Benzene

Ethylbenzene

Styrene monomer

Polystyrene resin

Foamed polystyrene sheets

Foamed polystyrene trays

Crude oil

Naphtha

Ethylene

Ethylene oxide

Ethylene glycol

PET resin

PET sheets

PET containers

Ethylene

Para-xylene

High purity

terephthalic acid

CO2

CO2 reduction in FY2019

CO2

emissions:

emissions:

-30%

Approx. 160,000

-30%

The recycling business's effect on society

		Foamed Trays		Transparent containers		PET bottles
		Weight	Quantity		Weight	Quantity		Weight	Quantity
FY2019		6,787 tons	1,696.75 million		2,341 tons	234.10 million		59,751 tons	2,390.04 million
Cumulative		151,876 tons	37,969.00 million		18,799 tons	1,879.90 million		272,300 tons	10,203.66 million
total
(1990 to March 2020)

* Calculated on the assumption that a foam tray weighs 4 g, a transparent container 10 g, and a PET bottle 25 g (after the revision in 2016 from 30 g).

Global resources conserved to date	Social expenses reduced to date	Amount collected to date
	Oil:	Garbage collection:
812.86 million liters	Approx. 74.5 billion yen

		Oil drums	Collection vehicles	Tokyo Domes
		Equivalent	million	Equivalent	million	Equivalent
200	L	to approx.	4.06 Oil drums		Collection	the capacity	73
			to approx. 2.98 vehicles	of roughly

Tokyo Domes

FP Corporation Report 2020 12

E Environment

ENVIRONMENT

	Various publicity
	activities for the
	expansion of
Organization of recycling plant tours	recycling

FP Corporation organizes tours of its three recycling plants, Kanto (Ibaraki Prefecture), Chubu (Gifu Prefecture) and Fukuyama (Hiroshima Prefecture) and of its six sorting plants across the country, where food trays and containers are sorted. About 20,000 people participate in these tours every year, including members of the public, people from consumer organizations, media representatives and others.

Collaboration with supermarkets

余余The setup of Eco Stations

An Eco Station is a place where consumers can bring many different used products, including food trays and containers, milk cartons and PET bottles. FP Corporation provides support in setting up these stations in supermarkets.

余余Publicity activities in stores

FP Corporation uses empty space in supermarkets to advertise its recycling activities. We offer programs open to young children to share information joyfully.

余余Plant tours

Plant tour events organized by supermarkets for consumers are available at FP Corporation's recycling plants.

余余Publicity activities at used food tray and container collection points

FP Corporation conducts publicity activities using posters and videos to raise awareness at locations with collection boxes.

			Actions to combat
Response to the Plastic Resource Recycling Strategy	the problem of
			marine	plastic
		FP Corporation has been an executive committee member of the Japan Clean	litter
	Ministry of	Ocean Material Alliance (CLOMA) since it was launched in January 2019. As Vice
	Economy, Trade	Chair of the Technology Working Group, it will fulfill its responsibility as industry
	and Industry	leader through the development of new materials and alternative materials in addi-
		tion to its recycling technologies.

Ministry of the

Environment

Ministry of Agri- culture, Forestry and Fisheries

FP Corporation

The Plastics Smart campaign is aimed at promoting smart ways of dealing with plastics, such as the reduction of plastic emissions and the proper sorting of plastic waste all over the country, and at disseminating information about these initiatives in Japan and around the world. Its website features Tray to Tray and Bottle to Tray initiatives.

As part of efforts to address plastic resource recycling issues while gaining the understanding of the public, the Ministry of Agriculture, Forestry and Fisheries has a web page on the Action Declaration on the Recycling of Plastic Resources. It broadly invites industry associations and companies in agriculture, forestry and fisheries sectors and in food industry to take voluntary actions helpful to the recycling of plastic resources. This web page features FPCO Method Recycling as a voluntary action helpful to the recycling of plastic resources.

On the basis of the idea that companies and associations must work as one to tackle marine plastic litter and other environmental issues, the FP Corporation Environment Fund has been established. It provides financial support for non-profit and other organizations conducting activities for environmental conservation.

13 FP Corporation Report 2020

Events and others joined by FP Corporation in FY2019

Participation as an exhibitor in G20 Innovation Exhibition

On June 14-16, 2019, FP Corporation presented in the zone for marine plastic litter issues at the G20 Innovation Exhibition held in Karuizawa, Nagano Prefecture, which coincided with the G20 summit. The presentations included a virtual reality (VR) experience of its efforts and its recycling plant. They drew the attention of leading figures from overseas.

Participation in the First Japan Clean Ocean Material Alliance (CLOMA) Forum

On July 8, 2019, CLOMA Forum was held to exchange information towards a resolution of marine plastic litter issues. Kimiko Nishimura, Senior Vice President and Director of FP Corporation, participated. She made a presentation about the company's environmental actions.

Participation in the Japan Climate Action Summit

On October 12, Japan Climate Initiative, headed by Takejiro Sueyoshi, an Independent Outside Director of FP Corporation, hosted the Japan Climate Action Summit. At the summit, members, including FP Corporation, released a declaration, according to which Japan would be at the forefront of the world movement towards decarbonization.

Active

participation in global environmental conservation activities

Actions regarding the Task Force on Climate-related Financial Disclosures (TCFD)*

FP Corporation understands that climate change is an environmental issue that affects business activities. We will work together with suppliers, retailers of products and other goods and other stakeholders to address climate issues towards building a low-carbon society. In the future, we will gradually expand the disclosure of climate-related information and consider supporting the TCFD.

* The TCFD published its final report in June 2017. It recommended that business and other entities disclose items concerning climate-related risks and opportunities.

Information

disclosure regarding responses to climate change

TCFD recommended disclosures	FP Corporation's actions
Governance	The Environment Management Department, an organization specializing in the environment under
The organization's governance	the direct control of the President, carries out monthly monitoring of sales of environmentally friendly
products helpful to the reduction of CO2 emissions, and progress in collection and recycling. The
regarding climate-related risks and
director and supervisor of this department are in charge of the management of matters related to
opportunities
climate change.
Strategy	We analyze classification and details of climate-related transition risks, physical risks and opportunities
The actual and potential impact of	and estimate the level of their potential financial and other impact.	We organize information regarding
the causes of risks and opportunities such as those mentioned below.
climate-related risks and opportunities
on the organization's businesses,	(1) Climate-related laws and regulations on production and distribution
strategy, and financial planning	(2) Climate-related laws and regulations on FP Corporation's products
	(3) Climate change -related services that compete with FP Corporation's products (e.g. a boycott of
	trays)
	(4) Changes in consumers' preferences (for recycled containers and sales without trays)
	(5) Climate information on large waves, torrential rains, earthquakes and other causes of physical
	impact on production facilities
	(6) Response to the marine plastic litter issue
Risk Management	We have established a system of gathering information in different areas, under which, for example,
The processes used by the	the sales team carries out market surveys while the environment and other teams conduct research on
regulations. Important matters are reported and shared at weekly meetings of executives responsible
organization to identify, assess, and
for sections. The main risks we assess have financial impacts. We place a focus on cost increases,
manage climate-related risks
revenue decreases and other events with significant financial impact	in its assessment.
Metrics and Targets	The sales volume of environmentally friendly products that reduce life cycle CO2 emissions by 30%,
The metrics and targets used to	Eco Tray, Eco APET and Eco OPET, is defined as an indicator.
assess and manage relevant climate-
related risks and opportunities
				14
		FP Corporation Report 2020

S	Society
SOCIETY
	As a corporate citizen

Employees with disabilities and other employees work together towards the same target. This is a usual part of our workplaces.

FP Corporation has been hiring employees with disabilities for 34 years. We practice employment that is feasible in business terms for achieving a proper state of working and living.

Social reputation

for social contribution, management and others

15 FP Corporation Report 2020

Female

empowerment

Aiming for a female rate

of at 30% least

of total career-track recruitment

(after 2019) and for 50female

managers by 2022

Disability

employment rate:

13.3%

Engaging in product

manufacturing and recycling

Our activities for communication with society at large and our social contributions include local festivals, exhibitions about the environment and business across the country, student internships and providing training for elementary school teachers. Most of these initiatives are linked with our business. Our social activities are almost equivalent to our business operations. This style holds true in this domain as well.

Participating in

approx. 100events

and regional programs

annually

FP Corporation Report 2020 16

Activities towards

the realization of an inclusive society

(1) Including disabilities classified as severe under employment rules

(2) Each person with a severe disability is counted as 2 and each part- time worker with disabilities as 0.5.

S Society

SOCIETY

Employment of

workers with disabilities as human assets

		As of March 2020
Number of employees with	358
	disabilities
	Physical	37 (including 16 with severe
	disabilities	disabilities)
Details	Intellectual	316 (including 243 with severe
	disabilities	disabilities1)
	Mental disabilities	5
Adjusted Number of	615
Employees with Disabilities2
Disability Employment Rate	13.3%

Container manufacturing	Recycling
Assembling of wood-likebox-type containers for high-	Sorting of used food trays and containers collected at
grade lunchboxes and others	supermarkets and other collection points.

Hiring employees with disabilities as a powerful workforce

FP Corporation began to employ people with disabilities in 1986. Since then, their duties and

t h e s c a l e of their employment have expanded. Today, around 360 employees with disabilities operate as a powerful workforce mainly for two companies in the Group, FPCO Ducks Co. and FPCO Ai Pack Co. They engage in two major duties. One is the manufacturing of small-lot products that are not suited for large manufacturing plants and high value-added products requiring manual work. The other is the manual sorting of used food trays and containers. This process is essential to the recycling process. The skills of employees with disabilities are deployed in these tasks requiring high concentration.

Enjoy playing floor hockey, a universal sport

FP Corporation has been engaging in floor hockey activities throughout the group since 2010. Floor hockey is a universal sport that can be played by everyone together irrespective of ability, age and gender.

Today, nearly 600 employees of the FP Corporation Group, including around 200 with disabilities and some 400 without, take part in the activities in nine separate areas across the country. FP Corporation sponsors FPCO Cup tournaments held in different locations in an effort to popularize floor hockey. At tournaments, FP Corporation Group employees volunteer to staff and otherwise participate in the sport actively. We hope that these activities are helpful to realizing an inclusive society.

17 FP Corporation Report 2020

Support for the employment of persons with disabilities

Helping business partners with employment of persons with disabilities

FP Corporation offers as much knowledge regarding the employment of people with disabilities as possible to business partners to answer their inquiries. We thus provide support for employment as we aspire to help as many people with disabilities as possible to lead a proper life of working and living. As of March 2020, 667 job opportunities for people with disabilities have been created at 50 offices, factories and other business facilities.

1

				1	Inspection and
							measurement of fruit
				Processing of
				2
							agricultural produce
				Agricultural
				3
							production
				Preliminary
				4
							seasoning of fresh
2		3		4
				meat

Acquisition of the naming rights of the new

Fukuyama-shi general gymnasium

On May 24, 2019, FP Corporation acquired the naming rights of the new general gymnasium in
Fukuyama-shi at the ceremony for the signing of the agreement held at the Fukuyama City Hall that
opened in March 2020.
After renovation, it will be called FPCO Arena Fukuyama. The facility will continue to serve as a place
for sports, culture and information distribution as well as for recreation for the people of Fukuyama-shi.			Community
Taking part in many different events and programs in FY2019	engagement in
a wide variety
FP Corporation takes part in a wide variety of
Date	Event Name	Location	Organizer		of areas
events, including local festivals and exhibition on
April 14, 2019	Clean Up the Tsu Beach Together	Mie Prefecture	Mie Prefecture
the subjects of the environment and business. We
Lifelong Learning Center
also run student internships and provide training to	May 28, 2019	Fukuyama Rose Festival 2019	Hiroshima Prefecture	Fukuyama City
elementary school teachers. Our communication	June 1, 2019	2019 Hachioji Environment Festival	Tokyo	Hachioji City
with communities is wide-ranging. In many cases,				Ministry of Economy, Trade and
June 14-16, 2019	G20 Innovation Exhibition	Nagano Prefecture	Industry and Ministry of the
our participation is for social contribution purposes
			Environment
rather than publicity purposes.	August 18, 2019	Eco World Festival	Osaka Prefecture	Osaka ATC Green Eco Plaza
September 5, 2019	Best Practices Introduction Seminar	Tokyo	CLOMA
	September 8, 2019	Yasugi Kankyo Fair 2019	Shimane Prefecture	Yasugi City
	September 28, 2019	2019 Fukuyama Science Festival	Hiroshima Prefecture	Fukuyama City University
	October 5, 2019	Itami Environmental and Recycling	Hyogo Prefecture	Itami City
	Fair 2019
				Fukuoka Prefecture, Kitakyushu
	October 9-11, 2019	Eco-Technology Exhibition 2019	Fukuoka Prefecture	City, and Kitakyushu Convention
				and Visitors Association
	October 29 to	JAPAN PACK 2019	Tokyo	Japan Packaging Machinery
	November 1, 2019	Manufacturers Association
	November 26-28,			Japan Environmental
	EcoPro 2019	Tokyo	Management Association for
	2019
			Industry (JEMAI) and Nikkei Inc.
	November 4, 2019	Osaka ATC Junior Eco Club Exchange	Osaka Prefecture	Osaka ATC Green Eco Plaza
	Meeting
	November 16-17,	Jibasan Fair 2019 - Rediscover	Hiroshima Prefecture	Local Industries Promotion
	2019	Manufacturing in Bingo	Center for Bingo
	November 23, 2019	Clean & Sanfrecce 2019	Hiroshima Prefecture	Hiroshima Eco-Forum
	November 30 to	Nagasaki Eco-Life Festa 2019	Nagasaki Prefecture	Nagasaki City Government
	December 1, 2019
				FP Corporation Report 2020	18

G	Gover nance
GOVERNANCE

Organizational governance

High

transparency

in organizational operation with the choice of being a company with an Audit and Supervisory Committee

Working on multi-faceted gov-

ernance in an effort to secure

trust from all stakeholders.

19 FP Corporation Report 2020

FP Corporation aims to achieve continuous growth and increase corporate value over the medium and long terms, and strives to enhance corporate governance by improving the speed of management decision-making while strengthening the functions that audit and oversee directors in the execution of their duties. We have therefore opted to be a company with an Audit and Supervisory Committee. Consisting of independent outside directors and outside directors, the Audit and Supervisory Committee fulfills the role of supervising management to ensure the highly transparent management of FP Corporation.

	Annual Shareholder Meeting
			Election and
Election and dismissal	Proposal and reporting	Election and dismissal	Reporting and comments	dismissal

Board of Directors

Directors who are not members of
the Audit and Supervisory	Audit and	Directors who are members of the	Collaboration
	Committee	supervision	Audit and Supervisory Committee
		Accounting
					Collaboration
Appointment	Submission	Consultation	Report
	and	and	Remuneration Consultation			Auditors
supervision	reporting	Committee
		Business execution section
			Instruction
	Representative Directors	Reporting	Internal Audit	Collaboration
				Department
Instruction	Reporting	Instruction	Reporting
Corporate Management				Auditing	Auditing
Executive Directors in
Committee
Operation Meeting	charge of operations		and
Information Exchange	Operating Officers		monitoring
	Meeting						Legal
Instruction	Reporting	Instruction	Reporting
	Divisions, Departments and Group Companies	Advice	Counsel

Compliance

余余 Various education programs by the Judicial Affairs & Compliance Department

余余 Internal audits by the Internal Audit Department, which is an independent body and under the direct control of the President

余余 Inside and outside contacts for consultations regarding the abuse of authority, sexual harassment and the like

Risk

Management

余余 Response to product quality risks

余余 Implementation of response measures in the event of a natural disaster or emergency, which have been increasing in frequency.

余余 Implementation of security action programs to protect against information leakage and others

Human

Resources

Management

余余 Operation of training programs developing new employees

余余 Operation of training programs for prospective managers

余余 Programs for developing highly technical work skills

余余 Implementation of programs for addressing ESG matters, the SDGs and the creation of other corporate value

FP Corporation Report 2020 20

GOVERNANCEG Governance

Organizations for compliance execution

• The Internal Audit Department, which is under the direct control of the President and which is independent

Compliance	from the business execution section, for carrying out an internal audit annually.
	• An outside helpline established at a law firm in addition to the inside contact for consultations regarding the
	abuse of authority, sexual harassment and the like
	• The Judicial Affairs & Compliance Department for the examination of contracts and the dissemination of
	compliance information

Programs for ensuring compliance

• Establishment of the FP Corporation Action Charter to stipulate the actions that should be taken by employees
• Establishment of the FP Corporation Normative Rules for Compliance in accordance with the spirit of the FP Corporation Action Charter
• Construction of an environment that allows employees to view the codes of conduct mentioned above as necessary on the internal network
• Group-widetraining for employees
• Publishing of the Monthly Compliance Newsletter

Response to product quality risks	Risk
Management

• Placing the highest priority on customer satisfaction, we carry out various measures to implement, maintain and continue our Quality Policy aimed at creating environmentally friendly products that can be used safely and with peace of mind.
• Sixteen of our production plants have acquired FSSC 22000 food safety management

certification as of the end of March 2020. We will work to obtain this certification for our 21 main plants in the future.

Measures in the event of natural disasters and emergencies

• All employees are required to carry their Disaster Handbook with them. We have also taken measures such as providing emergency equipment including helmets and first-aid supplies, implementing a safety confirmation system that is activated in the event of a disaster and installing priority telephone systems.
• Emergency power generating equipment has been installed at the Fukuyama Headquarters and distribution centers to ensure a 72-hour power supply. In addition, we will use an outside data center in an emergency.

Measures to prevent accidents, hazards and information leakage and security measures

• We have set up the Safety and Health Committee beyond the boundaries of departments and group companies to prevent accidents. In addition, we conduct regular evacuation drills at production and recycling plants, run the Forklift Accident Elimination Project and provide safety training, including VR-based hazard experience using a mobile container house and safe operation training.
• We have installed security gates at large complex facilities that integrate production plants
  and distribution centers. We make regular backups of computer data, introduce duplex lines, employ systems to prevent e-mail messages destined for outside addresses being sent to the wrong recipients, and contract specialists to dispose of computers.

21 FP Corporation Report 2020

Human

Resources

Management

Training programs

FP Corporation offers various training programs with the aim of developing employees into strong assets. They include Next-Generation Training, which lasts about half a year, One-on-One Leader Training Sessions that develop mentors who will provide training to new employees, training designed to deepen understanding between female managers and supervisors, training for managerial candidates, Accounting Department training to hone practical accounting and finance skills, and environment-related training where participants learn about the creation of corporate value through non- financial activities related to ESG and the SDGs.

Activation of the organization through internal and external exchange

FP Corporation also offers programs that activate the whole organization through exchange with others. They include joint training sessions with companies in different industries on the subject of learning new perspectives through exchanges with them, and training sessions conducted in Hawaii for FP Corporation Group employees.

Prevention of COVID-19 coronavirus infections

Countermeasures

The FP Corporation established the FP Corporation Group COVID-19 Countermeasures Headquarters headed by Morimasa Sato, President of FP Corporation, on February 21, 2020. We have been taking measures such as thorough actions to prevent infection within the Group, including taking employees' temperatures, hand washing and disinfecting, collecting information released by government organizations, and promoting new working styles that may include commuting outside rush hours and IT-enabled working from home. We will continue to take the necessary measures without becoming complacent.

Fulfillment of our responsibility to supply food containers

FP Corporation understands that it has a social responsibility to ensure the stable supply of food trays and containers used for wrapping and transporting food even during the COVID-19 pandemic. We will steadily implement our unique supply chain management system as usual to carry out day-to-day operations with a sense of mission to support people's safety and peace of mind in their consumption of food. Even during emergencies, we will unfailingly deliver the products that are wanted when they are wanted.

FP Corporation Report 2020 22

Special Feature: Exploring the Utilityof

Today, food trays and containers are usually used, and we have few opportunities to think about the significance of using containers. As a food container manufacturer, we are now exploring why food trays and containers are commonly used in everyday life.

At the moment, there are around 55,000 convenience stores and around 22,000 supermarkets in Japan. In addition, department stores have food sections in their basements and shopping streets have some stores selling prepared food. Most of them use food trays and containers. They help those who sell, purchase and consume food.

23 FP Corporation Report 2020

Food Traysand Containers

Food Trays and Containers, Responding to the Needs of Society

Food trays and containers evolved in line with lifestyle needs that have shifted with changes in the social structure.

Supporting effective sales of food after economic development

In the 1960s and 70s	In the 1980s and 90s
High economic growth and spread of supermarkets	Economic bubbles, emergence of convenience
	stores and home meal replacements

Food trays for self service

Simple trays were wanted as a tool for selling food in large quantities at supermarkets and other retailers.

Containers for selling packed lunches and prepared food

Needs emerged for containers to hold packed lunches sold at convenience stores and containers with lids for prepared food.

Adapting to diversification of eating following changes in lifestyles

From the 2000s to present

Shortened time for housework and growth of home	Growing interest in enjoying good food
meal replacements as more women join the workforce	and pursuit of deliciousness

Namakara Sozai

Microwavable

Food combinations

These popular containers are so convenient that fresh food materials packed in them can be microwaved as they are and that food materials purchased can be heated as they are.

Products seeking quality of food relish by putting rice separate from main food to avoid impairing their respective tastes and flavors

High environmental awareness

Environmentally friendly recycled products

Product made using recycled containers, such as Eco Tray formed products and Eco APET and OPET transparent containers, play a significant role in CO2 reduction.

Reduction of food waste, increase in single-person

households and aging

Containers for individual meals

Increasingly containers are designed to provide convenience in eating for those living alone and to reduce leftovers.

FP Corporation Report 2020 24

Special Feature: Exploring the Utilityof

Today, food trays and containers are indispensable to most Compatible with food supply chain processes of the supply chain, including food production,

distribution and sales.

Food production and transport

After a seafood catch is landed, food trays and containers are used to keep its freshness until the products are sold at the market. They are also used for storing vegetables, fruit and other agricultural produce that easily lose shape.

Preventing blemishes

Preserving freshness

Food processing and manufacturing

Food trays and containers are essential in the process of separating food produced in large quantities into small portions that are easier to sell as goods and in the process of applying labels that specify consume-by dates and other information.

Separating into small	Information labeling
portions as goods for sale
Preventing blemishes	Preserving freshness

Display and sales

Food processed behind the selling spaces can	Products may be stacked in layers in
be directly displayed. With the working population	a hygienic way. It means that a lot of
now contracting, they help increase work	products may be displayed. Food trays
efficiency.	and containers are useful in displaying
	products in a manner in which products
	are easily noticeable.

High work efficiency

Hygienic

Mass display

Display with noticeability

Information labeling

Preventing blemishes

Preserving freshness

25 FP Corporation Report 2020

Food Traysand Containers

FP Corporation has been manufacturing and selling very useful food trays and containers matched with people's eating lifestyles that vary with the times to meet social needs. From the period of rapid economic growth to the period of the rise of convenience stores after the economic bubble, what was wanted in the

market was relatively clear. However, from 2000 onwards, eating lifestyles diversified and it is no longer the case that there is only one right answer to meet the needs of society. We have since been making a broad range of suggestions. In some cases, one proposal arouses mixed reactions.

Under these circumstances, we listen to our client supermarkets and consumers and distribute accurate information about food trays and containers. Under the principle of offering more convenient and useful products, we aspire to continuously serve society.

Koji Oka

Senior Vice President and Director,

Integrated General Manager of Integrated

Special Sales Department, Supervisor of Product

Development Planning Department, Supervisor of

Sales Information and Store Sales Department

Purchases, takeouts, consumption and recycling

Easily portable

Hygienic

Freshness can be viewed.

Contents do not shift.

Today, it is so common to use food trays and containers in everyday shopping at supermarkets and at convenience stores that we often overlook their convenience and utility while leading our daily life. You check the freshness and deliciousness of food and then purchase it. You take it home hygienically and consume its necessary portion and preserve the remainder. It is food trays and containers that pave the way for these things you may take for granted. For the purpose of making this convenience sustainable, we recycle used products with the help of many different parties.

Useful to preservation

Friendly to the environment

FP Corporation Report 2020 26

The FP Corporation Value Chain

FP Corporation's unique value chain continues to create social value and bring its business operations closer to ESG efforts.

Combination of a series of processes constituting FP Corporation's supply chain with such factors as product recycling, in-house distribution, proposal-oriented sales and employment of workers with disabilities as human assets transforms the supply chain into a recycling-oriented value chain that will continue to produce social value.

Our business operation means to run the value chain that continuously creates social value. In a bid to expand this activity, all employees at the FP Corporation Group are making everyday efforts.

27 FP Corporation Report 2020

Nationwide

recycling network

Unique sales

communications at

the FPCO Fair

Sales

Proposing selling
approaches and selling
spaces that utilize FP	Sales philosophy
Corporation products	with a consistent
from customer	focus on the hands-on
viewpoints	approach based on the
	belief that customers
	have the answers

Various measures

to achieve accuracy

in delivery time

High efficiency voice picking system with near-zero errors

	Regarding used
	products as
	terrestrial resources
The FPCO	and recycling them
for raw material	Ensuring that
Method Recycling
procurement	recycled materials
Based on
	can be used safely
Collaboration
	and without worries
between Four
	as raw materials for
Parties
	products

	Product development
	for consumers and	High utility
	sellers based on a	products made
	hands-on approach	from materials
Recycling	Procurement	with diverse
characteristics

Propelling the cycle of
manufacturing, sales and	Product
recycling food trays and
Development
containers

The FP Corporation

Value Chain

Logistics Manufacturing

Independent

warehousing and

transportation operations for appropriate response to customer needs

	Preparedness for
Strict inventory	small-lot and other
production leveraging
management	the capabilities of
and thorough	employees with
streamlining of cargo	disabilities
movements

Higher value-added products reflecting design and shape enhancements

Nationwide

operations enabling

stable supply and flexible response

Production planning and processes in pursuit of efficiency and energy conservation

FP Corporation Report 2020 28

The FP Corporation Value Chain

Procurement

Propelling the cycle of manufacturing, sales and recycling food trays and containers

The FP Corporation Value Chain

Procurement is the first process in the value chain. It deals not only with safe and reassuring virgin materials but also with recycled ma- terials, which we call terrestrial resources, produced from the recycling process.

FP Corporation's CSR Procurement Policy

1. Quality Standard

In providing high-quality products and services in a manner that is valuable, safe and secure for customers, our procurement activities will place the highest priority on quality and safety in keeping with the Group Quality Policy while also placing an emphasis on cost.

2. Fair Trade

We will give comprehensive consideration to economic rationality, appropriate quality, strict adherence to delivery deadlines, compliance with social norms, care for social issues, environmental concerns and so on, and select suppliers in a fair and transparent fashion. Without a valid reason, we will not show favor to or unjustly disadvantage specific business partners.

3. Compliance with Laws and Regulations

In the course of our procurement activities we will respect laws and social norms and not violate them under any circumstances. We will not maintain ties of any kind with antisocial forces, and will repudiate any and all unreasonable demands.

4. Consideration of Social Issues

We will respect basic human rights, consider occupational health and safety, and endeavor to do business with and procure products and services from suppliers that do not engage in human rights violations such as unfair discrimination, forced labor or child labor.

5. Environmental Considerations

Based on the Group's Environmental Policy, we will promote initiatives to reduce our environmental impact, and endeavor to do business with and procure products and services from suppliers that contribute to controlling or alleviating environmental issues such as climate change and biodiversity.

6. Cooperating with Suppliers

In order to give consideration to social issues and the environment throughout the supply chain in the course of procurement, we will forge long-term relationships of trust with suppliers and work towards coexistence and co-prosperity. We will work with suppliers to thoroughly implement proper risk management and prevention, and pursue initiatives to avoid impacting society and company management.

Significant in the procurement process are the safety and security of raw materials, stable supply and environmental considerations. I am proud that FP Corporation has steadily fulfilled its responsibility in these aspects. However, society is now changing rapidly. Planning and actions in view of the future are always needed. The roles that the procurement section at the start of the value chain has to play are more and more significant year after year. They include gathering information on overseas examples of the use of biodegradable and biomass plastic materials for studying the adoption of such materials, exploring development based on paper in a totally different direction, and considering a new business framework for continued growth of material recycling.

Hiroshi Ogawa

Executive Director,

Executive General Manager of Purchasing Division

29 FP Corporation Report 2020

Regarding used

products as terrestrial resources and recycling them for raw material procurement

余余FP Corporation's original production system that facilitates independent raw material procurement

Our production plants at Kanto and Chubu each have PET recycling centers. There, pellets and flakes recycled from PET bottles and transparent containers are conveyed by air as raw materials to production plant buildings. Direct procurement routes have thus been constructed instead of transportation by truck. This system literally brings FP Corporation's recycling-oriented value chain to completion. (The bottom right photo portrays rolls of sheets for transparent containers produced using recycled material.)

Ensuring that

recycled materials can be used safely and without worries as raw materials for products

余余Ensuring safety of materials for food trays and containers

Plastic food trays and containers are subject to many different safety regulations, including the Food Sanitation Act, the Food Safety Basic Act and the industry's voluntary standards. FP Corporation ensures the safety and hygiene of its food containers through its compliance with national laws and regulations, official standards, more stringent voluntary standards established by the industry, and its own regulations. The Eco APET recycled raw material plant has obtained a "No Objection Letter" (NOL) from the United States Food and Drug Administration (FDA), a worldwide authority on safety standards.

余余Research and development of new materials

The FP Corporation Group is working to expand recycling since it has established its recycling technology and system for single materials. It also studies materials that are not derived from crude oil as options on the assumption of technological advancement. We collect information about paper, biomass and other materials and carry out research and development of different recycling approaches as well as containers incorporating environmentally considered design to achieve the industry's lowest-class environmental impacts with a view to building a recycling-oriented society and to construction of a sustainable society.

FP Corporation Report 2020 30

The FP Corporation Value Chain

Product development

Propelling the cycle of manufacturing, sales and recycling food trays and containers

The FP Corporation Value Chain

Heat and cold resistance		Forms that prevent the
	leakage or sliding of
and heat insulation
	contents

Different combinations of mate- rials, forms, elaborate designs, pairings of containers with lids and other parts, colors and patterns create high value-added tray and container products with excellent utility that are best suited to their respective applications.

Microwavable		Materials and designs for
	an attractive look

Free of deformation under high or low temperature conditions and able to maintain the temperature of food

Carrying food stably and maintaining its shape

Opening the way for the microwaving of food in containers

Accurately displaying the deli- ciousness, freshness, color and flavor of food

Friendly to the

environment

Recyclable after use to reduce CO2emissions

Lower operation costs

Enables the quick display of goods and useful for storage behind selling spaces

We are constantly working to improve existing products and to create new functions and added value. Now, we are focusing on the securely closing feature and the development of containers for delivery.

The securely closing feature is a technology that attains high performance in two conflicting functions, ensure that containers can be tightly closed and also easily opened. This increases work efficiency for retailers and makes the containers user-friendly for consumers. We are working to develop containers for delivery with a three-layer structure that enhances heat retention and seals in air. These features are aimed at satisfying the current needs of the delivery industry.

Our business activities are changing all the time, with the trends of the times.

Hiroyuki Muraoka

Operating Officer, Deputy Executive General Manager of the Manufacturing Division (in charge of the West division),

General Manager of Research & Development Department

31 FP Corporation Report 2020

Product
development for
consumers and
sellers based on a	Research into needs in selling spaces
hands-on approach

The hands-on approach is based on the idea that valuable information related to manufacturing and sales is found where the sales take place, and that

clues to answering needs can be found by continuously and carefully watching these places. FP Corporation's sales team places an emphasis on its frequency of visiting customers. It is recommended that sales staff visit food selling spaces at least 100 times a month. Product development therefore originates from the sales personnel who observe food sales practices in detail.

The Product Development Planning Department transforms needs into images

Information is collected by the sales staff in places where packed lunches, prepared foods and other foods are manufactured and places where food is sold, such as supermarkets. It is then passed to the Product Development Planning Department. To give shape to divided ideas and abstract concepts, the Product Development Planning Department creates design drawings using simple software. In some cases, it makes models of containers from paper clay and does other manual work. Its duty is to materialize the demands of food retailers for containers with specific conveniences and functions.

The Research and Development Department makes these images into tangible forms

The task of the Research and Development Department is to create design drawings incorporating usefulness and other utility features of the containers imagined by the Product Development Planning Department, and create prototypes, developing them into finished products. The process from the creation of a design drawing to the completion of a container takes from two months to half a year. FP Corporation creates as many as 2,000 new products each year. The Research and Development Department also inspects the safety of materials.

Sales staff introduce products onto the market

Sales staff gain ideas by observing the practices of food retail. These ideas are developed into products and given an opportunity to play an active role in food sales operations. Thousands of products are introduced onto the market each year. However, consumers' lifestyles are changing all the time and accordingly the qualities desired from food trays and containers change as well. Our efforts to develop products continue to deliver high value-added products with features providing more utility.

FP Corporation Report 2020 32

The FP Corporation Value Chain

Product

development Original materials developed by FP Corporation have paved the way for food sales approaches that

had been impossible in the past.

High utility

products made from materials with diverse characteristics

余余MULTI FP

The product has both the heat resistance necessary for microwave heating (110 °C) and cold resistance. With excellent heat insulation and retention, even when the contents are heated in a microwave, the outside of the food container stays below 70°C. Even when the food

inside is hot, there is no need to worry about b u r n i n g y o u r h a n d s when holding the con- tainer.

余余MULTI SD

This product features excellent heat resistance making it suitable for microwave heating (110°C). As this is a non-foam material offering superior formability, designs featuring sharp, complex forms can be created.

余余TRANSPARENT PP

This transparent container is highly heat and oil resistant. It is hardly deformed when heated in a microwave. Warm prepared food can be heated in this container. The polypropylene does not become brittle and is not damaged when it comes into contact with MCT oils.

余余Containers that allow consumers to enjoy freshly cooked meals prepared by heating fresh materials

This container facilitates the development of menus and products that involve packing raw ingredients which can be heated in a microwave while still in the container immediately before eating. This makes full use of the texture, flavor and goodness of the ingredients while giving consumers the taste of a freshly cooked meal.

余余OPET

Strength and heat resistance are enhanced by stretching the PET material biaxially to align the molecules. In addition to oil resistance, the transparency is maintained and the conventional 60°C heat resistance of APET material is increased to 80°C.

余余Container with a three-layer structure to retain deliciousness

The container with a three-layer structure has been developed to hold noodles for delivery to meet recent demand. From top to bottom, the container consists of a lid, an inner tray for noodles and ingredients and a base container for soup. Its heat retention performance is so high that the soup is slow to become cold. The inner tray has a steam vent hole. It is useful for reheating.

33 FP Corporation Report 2020

余余Containers for food combinations

By packing rice and side dishes with a lot of juices separately, each can be provided without losing individual deliciousness and texture. They have helped launch a new category of packed lunches with simmered food sought by consumers. The containers allow various combinations of rice and side dishes, enabling an extensive range of menu options to be provided.

余余Containers designed to prevent contents from shifting

The bottoms of containers are equipped with projections and depressions forming guides that help arrange food items. They prevent the contents from moving when sales staff display goods and when consumers take them home after purchase.

余余Containers that are easy to stack to conserve space

Made from non-foam materials with excellence in formability, these containers may have complicated, sharp forms. Another benefit is the small amount of space taken up when the product is stacked.

余余Containers with lids that are easy to close

The closing part of food container lids has been an issue that has yet to be resolved, with greater sealing performance desired. If the lid is firmly closed, it is difficult to open. If it is not, the safety of the food cannot be ensured. Our containers with lids that have the securely closing feature make an audible click when the lid is closed. They feature a structure that enables the lid to be easy to open while it does not easily fall off.

余余Containers that enhance the joy of eating

Higher value-addedproducts reflecting design and shape enhancements

The Bisai series and the Tosai series sashimi containers have been introduced onto the market. Their selling point is their high-class appearance, like real tableware. They are created from our humble aspiration to make eating happier and always more cheerful.

FP Corporation Report 2020 34

The FP Corporation Value Chain

Manufacturing

Propelling the cycle of manufacturing, sales and recycling food trays and containers

The FP Corporation Value Chain

FP Corporation engages in manufacturing through elaborate planning in its operation of large production plants across the nation, as well as its other facilities and personnel.

Input 1					Input 3
	Input 2		Factors related to
Factors related to
	Sales forecast		material procurement,
production
				distribution, and delivery

Supply Chain Management (SCM) System

Based on the above three inputs, plans to execute the following in the

most efficient way are calculated

Production	Transportation between FP's warehouses
	Metal mold moving	Inventory management

Manufacturing at FSSC certified plants

Kanto Shimodate Extruding Plant I	Kasaoka Plant I
Kanto Shimodate Forming Plant I	Kasaoka Plant II
Kanto Shimodate Plant II	Kannabe Plant I
Chubu Plant I	Kannabe Plant II
Chubu Plant II	Fukuyama Plant (PS-6)
Chubu Eco PET Plant

The plants listed above have acquired the Food Safety System Certification (FSSC), an international standard for food safety management systems. The FSSC is approved as a benchmark standard by the Global Food Safety Initiative (GFSI), an international organization.

FP Corporation can boast of its supply chain management (SCM) system that maximizes product manufacturing efficiency. Its advantage is that efficiency can be maintained with high precision through the information entered and conditions recorded at different times enabling flexible responses to be taken on the basis of the experience of manufacturing staff. We endeavor to secure a workforce capable of maintaining the efficiency of this system, and to achieve automation as a solution to the labor shortage problem. We have introduced automation in detailed manufacturing processes, such as the automatic joining of sheet rolls for seamless feeding of the sheet used to produce containers. The accumulation of these efforts leads to

great results.

Nobuyuki Nagai

Executive Vice President and Director,

Executive General Manager of

Manufacturing Division

35 FP Corporation Report 2020

Nationwide

operations enabling

stable supply and flexible response

Staff of production plants in Kanto (bottom left), in Chubu (top) and in Fukuyama (bottom right) They all practice SCM on shop floors.

Hokkaido Plant

Chubu Eco PET Plant

Yamagata Plant

Toyama Plant

Kasaoka Plant

Kannabe Plant

Chikusei Plant

Kanto Shimodate Plant

Fukuyama Plant

Kanto Yachiyo Plant

Kanto Eco PET Plant

Kyushu Plant

Kanto Plant

				Chubu Plant
				Kinki Kameoka Plant
			Shikoku Plant
			The production plants in Kanto (top left), Chubu (bottom left) and Fukuyama (right) are integrated
Kagoshima Plant
				with distribution centers and recycling centers, creating large complex facilities. They serve the
	Nango Plant
		big commercial zones of Kanto, Chubu and Kansai, and Chugoku and Shikoku respectively.

FP Corporation Report 2020 36

The FP Corporation Value Chain

Manufacturing

余余Centralized production management with the supply chain management system

FP Corporation conducts most processes in its supply chain on its own, including materials
procurement, product planning and development, manufacturing, delivery, sales and recycling. It is
therefore capable of constructing a supply chain management (SCM) system in consideration of all
	these activities. This comprehensive SCM system paves
Minimizing CO2 emissions in production
the way for the most efficient planning of all work processes
	involved in product manufacturing.
Avoiding excess production and more inventory than needed	We develop production and distribution plans after forecasting
	where there will be shortages of products, how significant the
Avoiding stock-outs during busy times and surpluses during slow times	shortfall will be, when and at which factory. The SCM system
	also allows us to supply products stably without stagnation in
Responding to disasters and other unforeseen events	consideration of sudden orders from customers, unexpected
	rises in market demand, disasters and other unforeseen events.
Taking into consideration distribution and recycling activities associated
with production
	Production planning
	and processes in
	pursuit of efficiency
	and energy
	conservation

Our SCM Division is at the Fukuyama Headquarters. It is at the center of the office, a brain that directs all our businesses. Instructions on production are generally issued on a weekly basis. When it is necessary to adjust production volume, the SCM Division and production plant staff discuss it before making a decision. While the SCM is a superb brain, it operates meticulously in concert with the shop floor staff who carry out the plan.

37 FP Corporation Report 2020

余余Introduction of robots to increase efficiency and to address labor shortages

Today, labor shortages are a major issue that must be surmounted to ensure the stable supply of products. FP Corporation's production plants are introducing robots in as many processes as possible with as much variation in these processes as possible. At the moment, an average of around 2.5 employees are assigned to each manufacturing line. We are working to reduce this to one.

1. After cutting, products are packed into plastic bags by the automatic packaging machine. Then, they are trans- ported by conveyor.

1. Cases of products are loaded onto an auto- matic guided vehicle (AGV) and carried a short distance to the conveyor.

1. Packed products are lifted by a robot arm for containers. A p re d e t e r m i n e d number of products are placed into a cardboard case.

(4) Cases of products a re s u c c e s s i v e l y loaded onto the conveyor and collected at a depot.

余余Human resources development to support manufacturing

FP Corporation has a program it calls the Monozukuri Project. It is aimed at developing the skills of employees working at production plants. Employees are given training and other assistance to improve their skills. The Gino Juku training program is part of this training. Trainees who have completed it are awarded an emblem that represents a rank based on the number of training sessions taken and the type of course. This rank system serves as motivation for the employees working on shop floors.

余余Employees with disabilities engaging in small- lot production

As mentioned in the ESG section, FP Corporation has a powerful workforce including a large number of employees with disabilities assigned to production. They engage in the manufacturing of small-lot

products that are not suited for mass production and high value- added products requiring manual work. These include high-grade containers for packed lunches sold at food selling spaces in the basements of department stores.

Red lines	Blue lines	Green lines	Yellow lines
Section leader	Regular operator	Assistant operator	Apprentice
Sub-leader			operator
			Checker

Preparedness

for small-lot and other production leveraging the capabilities of employees with disabilities

FP Corporation Report 2020 38

The FP Corporation Value Chain

Logistics	products when they are needed.
	Leveraging our independent
	logistics operations, we continue
	to unfailingly deliver needed
Propelling the cycle of manufacturing, sales and recycling food
trays and containers
The FP Corporation Value Chain

FP Corporation's logistical services featuring independent

warehousing and transportation operations

■ Warehousing operations	■ Transportation operations

Purchased goods	Picking Center	Distribution Center
	The picking of FP Corporation	Optimal,
	products together with	accurate vehicle	Customers
	purchased goods	assignment with high
FP Corporation products		loading efficiency

We regard logistics operations to be service operations that offer great satisfaction to customers beyond the mere transport of goods. Thus, we have made efforts to improve operational precision. The introduction of voice picking and automatic guided vehicles (AGVs) are part of these efforts. Today, we face the challenge of responding to labor shortages, which are major social issue. We are currently planning to examine the details of work and to unearth information about which personnel are individually suited to such specific tasks, to disperse our centers to shorten transportation distances and to improve work efficiency by shifting to transportation using pallets. If human power is in short supply, we must make up for it with something else. We believe that active efforts to discover solutions to social problems are part of the role that service

operations have to play.

Satoshi Koizumi

President and Representative Director,

FP Logistics Corporation / I-Logic Co., Ltd.

39 FP Corporation Report 2020

Picking Centers

• Distribution Centers

Hokkaido Distribution Center

(Ishikari-shi, Hokkaido)

Tohoku Distribution Center

(Sagae-shi, Yamagata)

Kanto Distribution Center

(Yachiyo-machi, Ibaraki)

Hachioji Distribution Center

(Hachioji-shi, Tokyo)

Tokai Distribution Center

(Nagaizumi-cho, Shizuoka)

Chubu Distribution Center

(Wanouchi-cho, Gifu)

Kansai Distribution Center

(Kobe-shi, Hyogo)

Fukuyama Distribution Center

(Fukuyama-shi, Hiroshima)

Kyushu Distribution Center

(Yoshinogari-cho, Saga)

• Picking Centers

Hokkaido Picking Center (Ishikari-shi, Hokkaido)

Tohoku Picking Center (Ohira-mura, Miyagi)

Kanto Picking Center (Yachiyo-machi, Ibaraki)

Ibaraki Picking Center (Yachiyo-machi, Ibaraki)

Hachioji Picking Center (Hachioji-shi, Tokyo)

Niigata Picking Center (Nagaoka-shi, Niigata)

Chubu Picking Center (Wanouchi-cho, Gifu)

Kansai Picking Center (Kobe-shi, Hyogo)

Fukuyama Picking Center (Fukuyama-shi,

Hiroshima)

Kyushu Picking Center (Yoshinogari-cho, Saga)

Independent

warehousing and

transportation operations for appropriate response to customer needs

Distribution Center

FP Corporation Report 2020 40

The FP Corporation Value Chain

Logistics	storage
	余余Management at warehouses starting with
	Products manufactured at plants and transported from other
	warehouses are stored in warehouses and preparations for
	shipping are made.

Strict inventory

management and thorough streamlining of cargo movements

Location Management System

Automatic Guided Vehicles (AGVs)

This system for the flexible utilization of space makes the most of the limited space in the warehouse. Instead of placing cases in fixed locations, it uses idle space in order. This is indispensable to the FP Corporation Group, which stores as many as 3 million cases.

FP Corporation introduced its first AGVs in 2017. Today, they are utilized in five distribution centers. AGVs run as programmed on a single black line on the floor, which can be likened to the rails of a train. After the introduction of AGVs, the running distance of forklifts in the warehouse was reduced to one third of what it had been. Thus, they are significantly contributing to the efforts to address the labor shortage.

(1) Receiving instructions through their ears

At the start, picking staff receive verbal instructions on their work area through the headset. Next, the instructions successively specify a large category and then a smaller zone to finally specify the item to be picked in the area.

1. Orally checking the instructions via a microphone before picking items

The staff confirm each instruction they received through the ear by repeating it through the microphone. If the words repeated are different from the instruction, an error is issued and the staff will have to repeat the process. Confirming instructions as described above, the staff place items one by one onto the mobile shelf.

(3) Inspection and packing

Inspection staff check the set of items on the moving shelf one by one using bar codes. They check if the set contains the correct items. If all of the items are correct, the set is packed and moved to the shipping area.

High efficiency

voice picking system with near-zero errors

41 FP Corporation Report 2020

余余Shipping, delivery and return trucks

The work of moving stored cases to the shipping berth, where shipping trucks are parked, has largely been automated. We actively use empty trucks after delivery for the recycling operations.

Cross Dock Center

Sorter System

Large distribution centers and warehouses are linked through sorters to reduce the time and labor necessary for shipping.

The sorting of cargo gathered at each of tens of berths is automat- ed.

Loading and delivery

The sizes of the cases and loading methods are adjusted to make the most of the space available in the trucks.

Collection of used containers

After delivery, the empty trucks return loaded with containers collected at sup e r m a r k e t s a n d o t h e r c o l l e c t i o n points.

We are taking various measures and efforts to ensure the continuous, unfailing delivery of products when customers need them.

Route Planner

This system draws up the most efficient plan for vehicle assignment and delivery routes for transportation from production plants to warehouses, between warehouses and from warehouses to customers on the basis of data from the previous six months.

RD Check System

RD stands for real-time delivery. It performs real-time monitoring of all statuses, from the start to the end of deliveries, using QR codes. Accumulated delivery data is used to improve the accuracy of the Route Planner. The system enables sales staff to view the status of deliveries.

Emergency Power Generation Facilities

Containers for food sold at supermarkets and other retailers are essential even during a natural disaster or other emergency. Our 21 distribution centers across the country are equipped with emergency power generation facilities that are capable of supplying power for up to 72 hours.

Various

measures to

achieve accuracy

in delivery time

FP Corporation Report 2020 42

The FP Corporation Value Chain

Sales

Propelling the cycle of manufacturing, sales and recycling food trays and containers

The FP Corporation Value Chain

FP Corporation always contemplates product proposals that can respond to customer needs from the standpoint of food sales operations.

Visiting frequency	Problem solving
Information sharing
FP Corporation's key terms in sales
100-factor analysis	FPCO Fair

Proposals on selling spaces

In addition to visiting the selling spaces of our customers frequency, it is vital that we visit them with definite goals. These days, we use a slogan analogous to the PDCA cycle, the See-Think-Plan-Do process. Seeing and thinking is analyzing. We have defined 100 items as benchmarks for analysis. Individual sales staff members make close analyses of food selling spaces

to reveal new discoveries. They come up with many interesting ideas and solutions to the problems facing food retailers. We all share and improve these ideas to propose optimal solutions to our customers on the basis of a common perception.

Masanobu Takahashi

Executive Vice President and Director,

Executive General Manager of Sales Division

43 FP Corporation Report 2020

Sales philosophy

with a consistent focus on

the hands-on approach based on the belief that customers have the answers

余余Real-time observation of food retail operations to gain practical information

"Go to your customers, and your way will surely be opened." This phrase reflects the philosophy of FP Corporation's founder Yasuhiro Komatsu regarding sales activities. Food trays and containers are used for food sales. Therefore, sales staff should visit supermarkets and convenience stores, the places of food sales, to closely watch what happens there and gain practical knowledge. FP Corporation believes that we can find clues to manufacturing and selling good products by watching food retailers displaying goods for sales and consumers choosing goods for purchases.

余余Direct feedback from customers at selling spaces

Our sales staff do not only watch food sales operations. They actively communicate with the staff of the supermarkets we serve. In today's society, needs related to food lifestyles are always changing. We take the stance that it is necessary to think about how to respond to problems in food sales and to identify the improvements that are needed.

余余Paying attention not only to selling spaces but also to back rooms

The problems facing our customers include several issues related to preparations for food sales that occur behind the selling spaces. Needs for a response to the labor shortage, for short-time work during busy time slots and other needs for the streamlining of preparations for sales have been growing, particularly in recent years. We listen to customers and always seek to use our products to resolve these issues.

FP Corporation Report 2020 44

Proposing selling

approaches and selling spaces that utilize FP Corporation products from customer viewpoints

The FP Corporation Value Chain

Sales

余余Selling space proposal sessions for customers held at FP Corporation

These sessions invite supermarket operators to FP Corporation and present proposals on the creation of food selling spaces. They mainly include analyses of food consumption trends, the construction of selling spaces for popular goods and proposals for using our products in the creation of these spaces. Some large sessions at the Tokyo Headquarters and the Osaka Branch have attracted more than 100 participants. Sessions are held regularly throughout the year.

余余Sales for collaborative value creation with food manufacturers (Team X)

Among the various proposal-based sales activities conducted by FP Corporation, sales activities for collaborative value creation (Team

1. are implemented in a creative style. They are not carried out solely by FP Corporation, but are creative sales activities for collaborative creation with other companies. A typical example is our collaboration with food manufacturers. We plan marketable food recipes together with prepared food vendors and manufacturers of seasonings and commercialize them, capitalizing on the advantages of our products.

Power Salad is an example of the collaborative creation of salads as main dishes, with a manufacturer of seasonings.

Power Salad with	Power Salad with thick bacon
strawberries and smoked	slices and grilled vegetables
salmon
	Containers that best realize the
	objective of recipe development
	and showcase the product
	image are used to create food
	items with superior taste and
	appearance. In addition, we
	think about how the developed
	food items will be displayed.

Power Salad with mayo- marinated shrimp and cauliflower

FPCO Fairs exhibit a large number of jointly developed food items.

45 FP Corporation Report 2020

Unique sales

communications at

the FPCO Fair

At the FPCO Fair, we make our largest presentation of containers and services to propose solutions to the problems we have learned about from customers through our communications with them on site throughout the year and showcases successful examples and predictions about the future. In March every year, we invite approximately 15,000 visitors to Tokyo Big Sight for a three- day event featuring presentations including those detailed below, to propose innovative solutions that meet visitors' expectations. The fair provides us with an opportunity to communicate closely with our customers, thus conducting efficient sales activities.

余余Mock-ups of selling spaces

Mock-ups of supermarket and other selling spaces are set up at the venue. Actual food items are displayed to give visitors a concrete image of the potential.

余余Displays separated by food category

The Displays are organized by food category, with meat, fresh fish, hot and cold precooked foods, sushi and rice and other foods displayed together to enable visitors to view the displays efficiently.

余余Tasting

Tasting is an indispensable part of giving visitors a real, delicious food experience using FP Corporation products.

余余Presentations

Our presenters deliver passionate explanations about our products and ideas that we strongly want to be known and understood.

余余No restrictions on taking photos or video

All displays in the venue may be photographed or filmed. One of the goals of the FPCO fair is to encourage visitors to take these proposed ideas back to their companies and put them into practice.

In the current fiscal year, due to the COVID-19 pandemic, we decided at the last moment not to invite visitors to the FPCO Fair. However, we will prepare displays. They will be used mainly for employee training. They will be filmed and the videos will be made available to our customers at a later date. If you are interested, please contact the sales office nearest to you.

余余Audio guide

When our sales personnel who assist the visitors are absent or unable to accompany them, we provide an audio guide voice, which is accessible by scanning a QR code.

FP Corporation Report 2020 46

The FP Corporation Value Chain

Recycling

Propelling the cycle of manufacturing, sales and recycling food trays and containers

The FP Corporation Value Chain

The recycling process completes the cycle of the FP Corporation Value Chain. It makes used containers into environmentally friendly products.

The percentage of used foam trays that are put to the recycling system is still as low as 30%. We are working hard to collect used products.

The number of collection points that we operate for used trays and containers increased from 9,260 in the previous fiscal year to 9,390. Given that plastic waste is a much talked about issue, environmental awareness appears to be building among consumers. No matter how quickly the amount of used products collected rises, we in the recycling section must deal with it.

To do this, we are currently planning to introduce robots and artificial intelligence (AI) in the process of sorting used trays and containers in an effort to reduce the labor required. Another possible solution is to secure warehouse space to regulate the amounts being processed and increase work efficiency. We will do anything

we can to respond to the needs of society.

Hidehisa Kaneda

Operating Officer,

General Manager of Recycling Department

47 FP Corporation Report 2020

Used trays and containers collected all over the country are separated into foam trays and transparent containers at different sorting centers and transported to the Kanto, Chubu and Fukuyama Recycling Plants. Used foam trays transported to the Fukuyama Sorting Center. They are reprocessed into products at the neighboring recycling plant.

Hokkaido Volume Reduction Center

■ TRAY RECYCLING PLANTS

(Ishikari-shi, Hokkaido)

• TRAY / TRANSPARENT CONTAINER SORTING AND VOLUME REDUCTION CENTER

■ PET RECYCLING PLANTS

Nationwide

recycling network

Kanto Recycle Center

Kanto Recycling Plant

Kanto PET Recycling Plant

Kanto Sorting Plant
(Yachiyo-machi, Ibaraki)	Yamagata Sorting Plant
	(Sagae-shi, Yamagata)
Matsumoto Sorting Plant
(Matsumoto-shi, Nagano)
Kanazawa Sorting Plant
(Kanazawa-shi, Ishikawa)

Tokai Sorting Plant

(Nagaizumi-cho, Shizuoka)

Kyushu Sorting Plant

(Kanzaki-shi, Saga)

Nishinomiya Sorting Plant

(Nishinomiya-shi, Hyogo)

Fukuyama Recycle Center

Fukuyama Recycling Plant

Fukuyama Sorting Plant

Chubu Recycle Center

Chubu Recycling Plant

Chubu PET Recycling Plant

Chubu Sorting Plant

(Wanouchi-cho, Gifu)

(Fukuyama-shi, Hiroshima)

FP Corporation Report 2020 48

The FP Corporation Value Chain

Recycling

The FPCO Method

Recycling Based on

Collaboration between

Four Parties

Operated in collaboration with consumers, supermarkets, packaging wholesalers, FPCO Method Recycling commenced around 30 years ago. Since then, the number of people supporting this initiative has increased. Today, there are approximately 9,400 collection points all over the country. In 2012, we also began recycling used PET bottles into transparent containers. Even with all of these efforts, we still collect only around 30% of all used foam trays. We hope that more parties will take part in the recycling initiative, enabling us to produce more environmentally friendly products.

Collection

Cleaning / Drying

Instead of throwing away the containers, consumers wash and dry them together with dirty dishes after a meal, and then take the containers to a collection box.

Consumers

Used foam trays, transparent

containers and PET bottles are collected from approximately 9,400 collection points nationwide.

Supermarkets and Other Retailers

Use

Foods contained in the purchased containers are used for cooking, pro cessing and served to enrich the dining tables of consumers.

Sales

Meat, fresh fish, precooked foods, packed lunches, fruit and other foods are put into containers, displayed and sold.

49 FP Corporation Report 2020

Storage and Transportation

Packaging material wholesalers collect used containers after deliveries to supermarkets and other retailers. The collected containers are temporarily stored before they are transported to the recycling facilities of FP Corporation.

Packaging Material Wholesalers

Recycling

The containers are taken to FP Corpora- tion's sorting centers and recycling plants, where they undergo several processes to be recycled into new products.

FP Corporation

Distribution

Packaging material wholesalers that have purchased FP Corporation products deliver containers to supermarkets and convenience stores.

Production

Production at 18 plants across Japan. FP Corporation manufactures many eco-friendly products using recycled materials.

FP Corporation Report 2020 50

Facts about FP Corporation

SUMMARY OF HUMAN RESOURCES DATA

Statistics on Employees		Male	Female	Total
(as of the end of March 2020)
Number of employees			606		279	885
Average Age			43.4	34.2	40.5
Under 30			114		107	221
30 - 39			127		99	226
40 - 49			165		55	220
50 - 59			153		14	167
60 and older			47		4	51
Continuous Years of Employment		15.5	10.7	13.9
Number of Employees (Consolidated)		3,459	1,025	4,484
Number of Foreign Employees		0		1	1
Number of Resignations	Early		Voluntary	Company-		Transfers	Other		Total
	mandated
FY2019		0		16	0		0	1		17
New Graduate Employee Retention Status		Male	Female	Total
Number of Graduate Employees		17		16	33
Hired in April 2017
Number Remaining in April 2020		16		14	30
		Female	Male	Percentage of
Percentage of Female Employees in	Female Employees
Managerial Positions
	23	319	6.7
Employment of Persons with Disabilities	FY2017	FY2018	FY2019
Actual Number	(persons)		377	359	358
Disability Employment Rate	(%)		13.78	13.6	13.3
Work-life Balance		FY2017	FY2018	FY2019
Percentage of Paid Leave Taken (%)		39.5	51.7	53.6
Average Monthly Hours of Overtime		18.9	10.0	9.8
Worked Per Person
Number of Employees Taking		17		25	25
Maternity Leave	(persons)
Number of Employees Taking		22		16	28
Childcare Leave	(persons)
Percentage of Employees Returning		86.7	100.0	92.3
from Childcare Leave	(%)

SUMMARY OF ENVIRONMENTAL

Manufacturing Division FY2019 Data (Annual Production Values)

			Electricity
		Energy	Energy from Fossil
			Fuels
			Water Supply
I		Water Resources	Groundwater
N
	Industrial Water
P		Raw Materials
U		(Resins, etc.)
		Cardboard
T		Secondary Materials
	Packaging Plastic
			Lubricating Oil
		Other	Thinners
			Paper
			Product
			Manufacturing
O		Product	Weight
		Number of Truck
U
		Shipments
T		Waste
P			Soot and Dust
U
	NOx
T		Environmental Pollutants
BOD
			COD
			SS
Logistics Division FY2019 Data (Annual
			INPUT
			Electricity
Energy
	Energy from
			Fossil Fuels
Water Resources	Water Supply
Other		Paper
			OUTPUT
Waste

Office Division FY2019 Data (Annual

	INPUT
Energy	Electricity
Water Resources	Water Supply
Other	Paper
	OUTPUT
Waste

51 FP Corporation Report 2020

DATA

368,421,956 kWh

84,911,391 MJ

506,259 m³

100,450 m³

89,747 m³

176,879 tons

35,371 tons

3,068 tons

16,504 L

35,602 L

2,736,500 sheets

204,374 tons

159,096 vehicles

28,049 tons

114 kg

5,806 kg

11,079 kg

11,139 kg

6,345 kg

Production Values)

18,114,086 kWh

2,599,316 MJ

24,402 m³

9,389,410 sheets

461 tons

Production Values)

2,916,776 kWh

3,202 m³

5,373,500 sheets

230 tons

See FPCO by Data

FINANCIAL SUMMARY

Term		54th Term	55th Term	56th Term	57th Term	58th Term
Year and Month of Financial		Mar. 2016	Mar. 2017	Mar. 2018	Mar. 2019	Mar. 2020
Results
Net sales	(Million yen)	170,292	172,858	173,580	181,171	186,349
Ordinary income	(Million yen)	14,027	15,742	13,548	14,861	16,274
Profit attributable to owners of	(Million yen)	9,294	10,953	9,178	9,901	10,777
parent
Comprehensive income	(Million yen)	8,900	11,440	9,806	9,332	10,461
Net assets	(Million yen)	91,591	99,721	106,219	112,198	119,301
Total assets	(Million yen)	209,053	219,481	244,147	249,332	242,497
Net assets per share	(Yen)	2,202.56	2,403.52	2,560.18	2,703.33	2,872.14
Net income per share	(Yen)	224.54	264.86	222.01	239.51	260.71
Diluted net income per share	(Yen)	-	-	-	-	-
Equity ratio	(%)	43.6	45.3	43.4	44.8	49.0
Return on equity	(%)	10.6	11.5	8.9	9.1	9.4
Stock price to earnings ratio	(Times)	21.4	19.6	31.4	27.3	27.5
Cash flows from operating	(Million yen)	20,832	25,912	13,974	25,510	27,770
activities
Cash flows from investing	(Million yen)	△17,923	△21,932	△23,656	△17,109	△10,989
activities
Cash flows from financing	(Million yen)	△1,530	△924	7,197	△4,908	△15,643
activities
Cash and cash equivalents at	(Million yen)	15,089	18,144	15,659	19,151	20,288
end of period
(Notes) 1. Net sales do not include consumption tax, etc.
2. Diluted net income per share is not listed due to the absence of dilutive shares.

FP Corporation Report 2020 52

FINANCIAL SUMMARY(CONTINUED)

Improving Corporate Value

We conduct shareholder-focused management in accordance with three basic policies: creating superior, environmentally friendly products, providing them at competitive prices and delivering them to our clients when they need them. We plan to steadily carry out measures for group management to increase our corporate value and achieve our target of a net income of 330 yen per share.

Stock Price (yen)	Trend in Stock Price (TSE First Section)	Volume (in thousands of shares)

8,500																										7,400
																										7,200
8,300																										7,000
8,100																										6,800
																									6,600
7,900																										6,400
																									6,200
7,700																										6,000
																									5,800
7,500																										5,600
																									5,400
7,300																										5,200
																										5,000
7,100																										4,800
6,900																										4,600
																									4,400
6,700																										4,200
																									4,000
6,500																										3,800
																									3,600
6,300																										3,400
																									3,200
6,100																										3,000
5,900																										2,800
																									2,600
5,700																										2,400
																									2,200
5,500																										2,000
																									1,800
5,300																										1,600
																									1,400
5,100																										1,200
																									1,000
4,900																										800
4,700																										600
																									400
4,500 4/18																										200
5	6	7	8	9	10	11	12	1/19	2	3	4	5	6	7	8	9	10	11	12	1/20	2	3	4	5	0

* Listed on the First section of the Tokyo Stock Exchange

Continuously Stable Dividends

FP Corporation regards providing shareholders with an appropriate return on their investment as one of its most important goals. Our basic policy is to make continuous and stable dividend payments while increasing our profitability and improving our financial standing. Under this policy, we paid a dividend of 81 yen per share, including an interim dividend of 40 yen per share in the fiscal year ended March 31, 2020.

Dividend trend			Net income per share
				Dividends
(Yen)				Payout ratio		(%)
350						40
300			36.5	33.8
250					35
	264			260
	224
200		222	239		30
150	30.3	30.2			31.1
100	68	80	81	81	81	25
50
0	3/16	3/17	3/18	3/19	3/20	20
			(Month/year)

Third Party Comments

Mr. Keisuke Takegahara Executive Officer, Deputy Chief Research Officer, Chief Manager of Sustainability Management Office, Corporate Planning & Coordination

Department, Development Bank of Japan Inc.

After graduation from the Hitotsubashi University Faculty of Law in 1989, he joined the Japan Development Bank (currently the Development Bank of Japan) in the same year. He has been in his present position since 2017, after serving as chief representative in Frankfurt, as head of the Environment & CSR Department. He served in several public capacities, including being a temporary member of the Central Environment Council at the Ministry of the Environment and a member of the Ministry of Economy, Trade and Industry's TCFD Consortium Planning Committee.

The COVID-19 coronavirus is transforming society. During and after the pandemic, it will be completely different from what it had been in the past. Now that we literally face a sustainability crisis, it is certain that the importance of sustainability will increase. In addition to environmental considerations, the role of providing a foundation of secure and stable employment will be further emphasized as a non- financial corporate value. As ESG investment becomes mainstream, companies are required to have growth strategies that meet that demand. From this viewpoint as well, FP Corporation is an outstanding company. The recycling system based on four party collaboration can be seen as a herald of the circular economy that originated in Europe. Its distinguished accomplishments include ensuring recycling and other countermeasures addressing climate change. A social issue that has emerged recently regarding plastics revolves around inappropriate ways of using them. FP Corporation's business model is focused on utilizing these materials without creating an environmental impact. I think this will positively impact your corporate value in the medium and long terms. In addition, you positively employ workers with disabilities. This system provides a place for them to actively work. These examples highlight your stance of pursuing environmental and social value in multiple ways.

53 FP Corporation Report 2020

FP Corporation acquired the naming rights for the Fukuyama-shi general gymnasium and the facility opened on March 23, 2020 under the name FPCO Arena Fukuyama. However, the COVID-19 pandemic forced the cancellation of the opening event and delayed its inauguration three days.

The pandemic has spread across the globe and caused significant damage to the Japanese society and economy. Meanwhile, while consumers have been obliged to refrain from going out and to stay home, demand from them for food purchases and deliveries has led to a large need for food containers. This gives us mixed feelings. However, the fact that products we manufacture and sell are needed has renewed our awareness of our responsibilities. This report included a special feature on the utility of food containers. We now have a fresh determination to continuously produce products that are needed by society and useful in people's lives.

Thank you very much for reading FP Corporation Report 2020. We would be grateful if you could complete the attached survey and return it to us for the continued improvement of the report. Thank you in advance for your cooperation.

June 2020

Eiji Togashi

General Manager,

Environmental Management Dept.

FP Corporation Report 2020

Published: June 2020

Editorial Guidelines

Care was taken to clearly note the achievements resulting from each activity and FP Corporation's future directions so everyone can understand the essence of our corporation.

The Environmental Report Guidelines from the Ministry of the Environment (FY2018 edition) were used as a reference in preparing the report on FP Corporation Report.

Time period covered: Monday, April 1, 2019 - Tuesday, March 31, 2020

Range of coverage: FP Corporation and the FP Corporation Group

Publishing Department and Contact Information: FP Corporation Environment Management Department

Shinjuku Oak Tower 36F, 6-8-1 Nishi Shinjuku, Shinjuku-ku, Tokyo, 163-6036 Japan

TEL: [phone] FAX: [phone]E-mail:[e-mail] Website: https://www.fpco.jp/en/

FP Corporation Report 2020 54

FPCO

Report 2020

To be a company that links

people with people, people with nature,

and companies with society.

FP CORPORATION

Fukuyama Headquarters: 1-13-15Akebono-cho, Fukuyama, Hiroshima, 721-8607 Japan	TEL: [phone]
Tokyo Headquarters: Shinjuku Oak Tower 36F, 6-8-1 Nishi Shinjuku, Shinjuku-ku, Tokyo, 163-6036 Japan	TEL: [phone]
Osaka Branch: Dai Building Main Tower 22F, 3-6-32 Nakanoshima, Kita-ku, Osaka, Osaka, 530-0005 Japan	TEL: [phone]
Sales Offices: Sapporo, Sendai, Niigata, Shizuoka, Hokuriku, Nagoya, Hiroshima, Shikoku and Fukuoka

■ Website: https://www.fpco.jp/en/ ■ E-mail:[e-mail]