Nissan Chemical : Integrated Report 2022

2022 Report Integrated Corporation Chemical Nissan

Integrated

Report 2022

W H E R E I T A L L B E G I N S

Issued: October 2022

https://www.nissanchem.co.jp/eng/

C O N T E N T S

Integrated Report 2022

W H E R E I T A L L B E G I N S

Editorial Policy

To Our Stakeholders

3

Profile

Corporate Ethos Structure and Corporate Slogan	5
The History of Nissan Chemical	7
Financial and Non-Financial Highlights	9

Value Creation & Growth Strategies

Message from the President

11

In 1992, we introduced responsible care activities, and have disclosed the details of these activities via Environment and Safety Report from 1999. The Report transformed into CSR Report in 2013 and Annual report in which business overview and financial section were included since 2016.

Since 2018, we have comprehensively summarized the ma- teriality, value creation process, business strategies, and detailed financial information in addition to the business overview and E (Environment), S (Social), and G (Governance) information as an integrated report to make this report easier to understand mid- to long-term value creation of Nissan Chemical Group to all stakeholders, including shareholders and investors.

We aim to make this report as a valuable communication tool by deepening our business activities and enhancing the content of the report.

Guidelines Used as Reference

• International Integrated Reporting Council (IIRC) "Internation- al Framework"
• Ministry of Economy, Trade and Industry "Guidance for Col- laborative Value Creation"
• GRI "Sustainability Reporting Guidelines Standard"
• Ministryof the Environment "Environmental Reporting Guide- lines"
• Task Force on Climate-related Financial Disclosures (TCFD)

Third-party Evaluation

Nissan Chemical's initiatives are highly regarded by external analytics and research organizations.

• FTSE Russell confirms that Nissan Chemical Corporation has been inde- pendently assessed according to the index criteria, and has satisfied the requirements to become a constituent of the FTSE Blossom Japan Sector Relative Index.
  The FTSE Blossom Japan Sector Relative Index is used by a wide vari- ety of market participants to create and assess responsible investment funds and other products.

Value Creation Process	17
Materiality	19
Management Capital	23
Corporate Governance	25
Messages from Outside Officers	33
Business Plan	35
Message from the CFO	43
Business Segments	47
Main Products and Services	49
Business Strategies	51
Research and Development	61

Sustainability

Human Resources Strategies	63
Improvement of Products Quality	66
Responsible Care	67
Information Disclosure in line with TCFD Recommendations	70
Compliance	75
Risk Management	78
Respect for Human Rights	81

Corporate Data

Financial Review	83
Corporate Information	95

Reporting Period

FY2021 (April 2021 to March 2022)

The occupational accidents data (P10 and P69) is from January to De- cember 2021.

Issued

October 2022

(The previous edition was issued in November 2021, and the next edition is planned to be issued in October 2023.)

Frequency of Issuance

Annually

Contact for Inquiries About This Report

Nissan Chemical Corporation

Sustainability Promotion Group, Sustainability Promotion & IR Department

TEL: [phone]

E-mail: [e-mail]

Scope of Reporting

The initiatives are described mainly in the financial and ESG information of the activities of Nissan Chemical Group.

Information Disclosure System

Summarized

Information

Integrated Report (this report)

Website

Detailed

Information

For general users		For investors

Consolidated subsidiaries:

Nissei Corporation, Nissan Butsuryu Co., Ltd.,

Nissan Green & Landscape Co., Ltd.,

Nissan Engineering, Ltd., Nihon Hiryo Co., Ltd.,

Nissan Chemical America Corporation (NCA),

Nissan Chemical Europe S.A.S. (NCE),

NCK Co., Ltd. (NCK)

Entities accounted for using equity method:

Sun Agro Co., Ltd., Clariant Catalysts (Japan) K.K.

Group Companies:

In addition to the above consolidated subsidiaries and entities accounted for using equity method,

NC Agro Hakodate Corporation, Environmental Technical Laboratories, Ltd., Nissan Chemical Taiwan Co., Ltd. (NCT),

Nissan Chemical Product (Shanghai) Co., Ltd. (NCS), Nissan Chemical Agro Korea Ltd. (NAK),

Nissan Chemical Do Brasil (NCB), Nissan Agro Tech India PVT. LTD. (NAI),

Nissan Chemical Materials Research (Suzhou) Co., Ltd. (NSU), Nissan Bharat Rasayan PVT. LTD. (NBR)

	Profile	Value Creation & Growth Strategies	Sustainability	Corporate Data

To Our Stakeholders

Our company was founded as Japan's first chemical fertilizer manufacturer in 1887 to solve food issues which Japan faced under the founding spirit "to dedicate ourselves to prosperity of the nation by agricultural fertility". The pioneering spirit has been still very much alive at Nissan Chemical as we have continued putting effort into innovative technologies and projects that promote social progress, greatly transforming our business operations.

To realize corporate vision in a new era, we currently provide products and services on a global scale in four business domains, such as Chemicals, Performance Materials, Agricultural Chemicals, and Healthcare on the basis of ESG (Environment, Social and Governance) and SDGs (Sustainable Development Goals) established by the United Nations.

Now we are in the third year of the global spread of COVID-19; the society and economy surrounding us continue to change dramatically. At the same time, various global issues, such as climate change associated with global warming, aggravated food issue and health issue, low birthrate and aging population , and economic divides are on the increase and threatening the sustainability of society.

From the time of our founding to the present, we have been working to solve social issues. By thoroughly pursuing our corporate philosophy "Contrib- ute to the protection of the global environment and the existence/development of humanity, offering the value sought by society", and continuing to take on the challenge of creating unprecedented possibilities and value, we will strive for sustainable development of society and our group in the future.

KINOSHITA Kojiro

Representative Director, Chairman & CEO

Nissan Chemical Corporation	4	Integrated Report 2022

	Profile	Value Creation & Growth Strategies	Sustainability	Corporate Data

Corporate Ethos Structure and Corporate Slogan

To determine our direction for the future and clarify the raison d'etre of the Group, we redefined our corporate philosophy in 2022. For the "Basic CSR Policy", we renamed it to the "Course of Action" to express our stance on focusing on sustainability management from now, let alone CSR. In addition, we newly set up "Where it all begins" as our corporate slogan, to spread around.

Mission

Statement

(Our Values)

"Contribute to society with excellent technologies and products."

"Promote prosperity and welfare through concerted efforts to constantly develop new areas."

"Respect people who exhibit a sense of responsibility, originality and motivation."

Corporate Slogan

Corporate	Contribute to the protection of the global environment and the
Philosophy
(Raison d'etre /	existence/development of humanity, offering the value sought by
Corporate Purpose)	society

	(1) Conduct sensible business activities as a member of the international com-
Course of	munity in compliance with laws and regulations.
Action	(2) Enhance corporate value by providing safe and useful products and services.

1. 1. Strive to achieve no-accidents & no-disasters and protect the global environment.
   2. Disclose information appropriately with a focus on communication with stakeholders.
   3. Create a cheerful and pleasant workplace by respecting the individuality and personali- ties, and promoting health of employees.
2. Conduct ourselves as good corporate citizens and decent members of society.

In Redefining Our Corporate Philosophy

Discussions on the formulation of the new long-term business plan			Discussion
Project Team			Directors
"Atelier2050" were centered on the corporate philosophy, which is
the foundation of our business activities. While deepening discus-
sions in a project team with diversity, based on changes in the busi-
ness environment, social issues, and management challenges, the
importance of the corporate philosophy was recognized once again.		Management
To determine our direction for the future and clarify the raison d'etre
		Meeting
of the Group, we redefined our corporate philosophy.

"WHERE IT ALL BEGINS"

Nothing is going to change the world to be better without beginning. The slogan means Nissan Chemical creates such "beginning" to realize the hope of human by exploring the future.

Brand Statement

Our goal is to fill the world with hope and happiness.

Our value is to produce a whole new excitement utilizing our imagination and creativity.

Our pride is our team of specialists believing in the infinite possibilities of chemistry and striving to achieve the impossible.

We are Nissan Chemical, an ever evolving company the world can't do without.

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Core Technologies for Sustainable Growth

	Profile	Value Creation & Growth Strategies	Sustainability	Corporate Data

The History of Nissan Chemical

2016

Japan's first chemical fertilizer manufacturer established by the "Father of Biotechnology"

The pioneering spirit inherited since the company's founding has contributed greatly to Nissan Chemical's 135-year history. As a future-creating company, we have formulated "Atelier2050" to continue our progress.

1965

1989

Restarted as a value-creating company

In 1989, we launched our mid-term business plan declaring the comeback as a value-creating company oriented with its two pillars: high-tech fields such as agrochemicals and pharmaceuticals, and

To be a future-creating company with sustainable growth based on our core technologies

In 2016, the Company launched the long-term business plan "Progress2030" looking ahead to 2030, recognizing the importance of expanding its business domains for sustainable growth.

We expand our business transcending the framework of industry and accelerate this effort toward the future. In order to clarify this stance, in 2018, we changed our name to Nissan Chemi-

1887

At the time of founding

Tokyo Jinzo Hiryo, the Nissan Chemical's predecessor organization, started in 1885 when TAKAMINE Jokichi, who was called the "Father of Biotechnology", brought phosphoric ore from the US back to Japan. Takamine, who strongly felt the need for improve the fertilizer

1923

Establishment of company foundation for business diversification

In the first half of the twentieth century, amid a variety of M&A activities by domestic corporates, the three companies were joined in 1923. The Company then promoted business diversification and entered under the umbrella of Nissan zaibatsu (Nissan Concern Company Group) in 1937, which was the 50th anniversary of its founding, renamed Nissan Chemical Industries.

Acquired new technological ideas through entry into the petrochemical business

In 1965, we established Nissan Petrochemicals and entered the petrochemical business. Howev- er, the petrochemical industry experienced a structural slump due to the impact of the oil cri- ses. The Company worked to rebuild its business, but it was unable to improve its profitability and began rationalization. The Company exited the petrochemical business in 1988.

technology fields such as functional products and chemicals. The results of continued R&D investment in this difficult situation emerged. By the early 1990s, we released a large number of agrochemi- cals on the market and entered the semiconductor field. In the 2000s, sales of the active ingredient of LIVALO®*, an anti-cholesterol drug, increased significantly and we acquired exclusive marketing rights in Japan to ROUNDUP®, the world's largest herbicide. This was followed by the creation of new agrochemicals that are the main products at present.

cal Corporation.

This year, in light of the significant changes in the business environment, which was the premise for the formulation of "Progress2030", we have launched the new long-term business plan "Atelier2050", looking ahead to 2050, in order to chart a course for the Group to continue to develop and contribute to solving social issues.

used in Japanese agriculture to help make Japan a modern nation, approached SHIBUSAWA Eiichi, known as the "Father of Japanese Capitalism", the following year with the idea of the commercialization of fertilizer. SHI- BUSAWA Eiichi, who was from a wealthy farming family, deeply agreed with Takamine's proposal. He established Japan's first chemical fertilizer manufacturer in 1887 becoming chairman (president) himself.

With the Company policy "to dedicate ourselves to prosperity of the nation by agricultural fertility", the company contributed to the increase of domestic food production.

200,000

(million yen)

150,000

The land in Ojima 1-chome,Koto-ku, Tokyo, now known as Kamayabori, had been selected for its convenience in transporting raw materials and products. In 1888, the production of superphosphate (fertilizer) started.

100,000

50,000

Jinzo Hiryo advertisement from an agricultural magazine in 1891

After World War II, under the separation directive based on the Corporate Reconstruction and Improvement Law, the fat and oil section was separated into Nippon Oil and Fats (current NOF) in 1949 and Nissan Chemical Industries newly started.

SHIBUSAWA Eiichi (sec- ond from left) visiting Oji Plant just after the completion of the three-company joint. Seen on the left is TANAKA Eihachiro who served as company president from 1923 to 1941.

Three-company Joint

Manufacture of sulfuric acid, soda, etc.

Kanto Soda

Nippon Kagaku Hiryo

(renamed from Nippon Seimi Seizo)

Dainippon Jinzo Hiryo

(surviving company)

50th anniversary of its founding

Entered under the umbrella of

Nissan zaibatsu and renamed

Nissan Chemical Industries

Although resulting in a large deficit, this business brought the penetration of technological ideas to the Company, which led to the development of new technologies and businesses such as fine chemicals.

Nissan Petrochemicals Chiba Plant (1968)

Expansion of the imports

of petrochemical products

in JapanImpact of the two oil crises

Fine		Ultrafine	Optical	Information
Organic		Particle
	Control	Science
Synthesis	Functional	Control
Biological	Microbial
	Polymer
		Evaluation	Control
* LIVALO® is a registered trade-	Design
mark of Kowa Company, Limited.

40

(%)

30

Collapse of Lehman

Brothers

20

	Entering the
Blooming of	semiconductor field
10
research findings

• The changes in sales and operating margins for the Nissan Chemical on a non-consolidated basis from 1950 to 1976 and for the Nissan Chemical Group on a consolidated basis from 1977 to 2021.
• The figures for November and the following May or October and the following April are totaled so that the figures for the year are close to the March results.
• FY2021: Including effects of changes in accounting policies

Sales (left axis) Operating margin (right axis)

0																0
	1896	1906	1916	1926	1936	1946	1956	1966	1976	1986	1996	2006	2016
1886	(FY)

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