Toray's Action for the Global Environment

13 October, 2011

Symbol of TORAY’s environmental action Toray’s Action for the Global Environment ー To build a sustainable Low-Carbon Society ー

Kouji Sasaki General Manager Fibers＆Textiles Green Innovation Business Planning Dept. Toray Industries, Inc. contentscontents

Ⅰ．Toray’s Profile

Ⅱ．Toray’s Approach to Global Environmental Issues -Global Environmental Issues -New Era of Environment, Resource, Energy -What is LCM Ⅲ. Toray’s Action for the Global Environment -Green Innovation products ・LCA-carbon fiber ・Energy save-HEATTECH ・Biomass-PLA , 3GT ・Recycle

Ⅳ．Conclusion

Ⅴ．Message

Ⅰ．Toray’s Profile

Ⅳ．Conclusion

Ⅴ．Message

TowardToward aa TopTop LevelLevel GlobalGlobal CompanyCompany ofof AdvancedAdvanced MaterialsMaterials

Sales Amount Water Treatment Membranes Carbon Fiber High Performance Composite Materials Materials Pharmaceutical & Medical Materials New Energy Materials IT-Related Energy-Saving Materials Products Biochemical Polymer Globalization

Resins・Films EstablishmentEstablishment 19261926

Fibers & Textiles 1. Established: 1926 Rayon 2. Capital: 1.85bil US$ 〜〜 3. Number of Subsidiaries: 1950 1960 1970 1980 1990227 2000 2010 4. Number of Employees: Copyright 2011 Toray38,740 Industries, Inc. All Rights Reserved. 3 Ⅰ．Toray’s Profile Net Sales by Segment in FY2010(Actual)

Net Sales by Segment ＜Business Segment＞＜Main Products ＞ in FY2010(Actual)

Fibers and Textiles 7.12 (38%) Foundation Businesses Plastics & Chemicals 4.66 (25%)

Bolster the foundation for revenue and profit through steady growth

Strategically IT-Related Products 3.20 (17%) Expanding Carbon Fiber Businesses Composite Materials 0.82 (4%) Aggressively expand as drivers of revenue and profit growth

Intensively Environment & Developing Engineering 2.17 (12%) and Life Science & others 0.81 (4%) Expanding Business Develop as the next drivers of revenue and profit growth

Consolidated 18.8 Bｉｌｌｉｏｎ US$ (￥82/US$)

Key Principle

Expand businesses in growth business fields and regions

Establish a robust business footing by cost reductions

Group-wide Projects for the Implementation of AP-G 2013

1.Green Innovation Business Expansion (GR) Project 2.Asia and Emerging Country Business Expansion (AE) Project 3.Total Cost Reduction (TC-II) Project

Ⅰ．Toray’s Profile

Ⅳ．Conclusion

Ⅴ．Message

Copyright 2011 Toray Industries, Inc. All Rights Reserved. 6 Ⅱ．Toray’s Approach to Global Environmental Issues Global Environmental Issues ①Economic Growth and Population Explosion ・Increasing Energy Consumption ・Water Shortage and Water Polution ・Food Shortage ‥‥

1900 Now 2030 Water Shortage World Population 1.6bil 6.5bil 8.5bil Increasing World Population Energy Consumption (as petroleum) 0.4bton 9bton ≧17bton (source:WMI report(2006))

(Source：Climate Change 2007 Synthesis Report) ②Global Warming and CO2 Emission Increase

Increase of Average Temperature Rising CO2 Conc. Increasing CO2 Emission

0500010000 1850 200019501900 Time(before 2005)

Resource Proven Reserves R/P Ratio ③Depletion of 1,188.6Gbarrel Oil 40.5 Peak Oil Resources (2004) Resources 909.064Gt Coal 164 Depletion of (2004)Natural Resource 179Tm3 Natural gas 66.7 (2004) 4.59Mt Uranium 85 (2003) (Source：C.J.Campbell et al,ASPO(2004)) Copyright 2011 Toray Industries, Inc. All Rights Reserved. 7 Ⅱ．Toray’s Approach to Global Environmental Issues New Era of Environment, Resource, Energy

TheThe 2020thth Mega-Consuming Society centurycentury based on fossil fuel ① Thermal power generation by coal/petroleum ② Automobile fueled by Gasoline ③ Petrochemicals and polymers TheThe 2121stst centurycentury SustainableSustainableSustainable SocietySocietySociety basedbasedbased ononon nonnonnon-fossil--fossilfossil resourcesresourcesresources andandand renewablerenewablerenewable energyenergyenergy ①① Photovoltaic,Photovoltaic, WindWind Power,Power, RechargeableRechargeable BatteryBattery ②② ElectricElectric VehicleVehicle ③③ BioBio--PolymersPolymers Copyright 2011 Toray Industries, Inc. All Rights Reserved. 8 Ⅱ．Toray’s Approach to Global Environmental Issues Ｔｏｒａｙ‘ｓｂａｓｉｃａｔｔｉｔｕｄｅ LCM （Life Cycle Management） LCM is the idea of developing a business strategy for all corporate activities that takes into account the environmental burden and cost in the entire lifecycle of a product or service with the aim to achieve sustainable balance between reducing environmental burdens, while still promoting economic growth.

reducingreducing economiceconomic growthgrowth environmentalenvironmental impactimpact Compatible with each other

SustainableSustainable growthgrowth

Ⅰ．Toray’s Profile

Ⅳ．Conclusion

Ⅴ．Message

Copyright 2011 Toray Industries, Inc. All Rights Reserved. 10 Ⅲ.Toray’s Action for the Global Environment Solution to Global Environmental Issues - Green Innovation Products - Organic synthetic Polymer Nano- Toray Core Technology Biotechnology Chemistry Chemistry technology Toray’ Advanced Materials Green Innovation Technology Functional textiles to Energy Saving reduce thermostat setting

Light and high strength Measures New Energy Resources Materials carbon fiber against for Automobile/Airplane Global Warming Biomass for Wind Power

Water Treatment Bio-based Polymer Products Reduction of Air Purification (Fibers, Plastics, Films) Environmental Burdens Heat resistant filter Environmentally- for air cleaning friendly Products

Recycle Material or chemical recycle textiles for uniform Copyright 2011 Toray Industries, Inc. All Rights Reserved. 11 Ⅲ.Toray’s Action for the Global Environment Solution to Global Environmental Issues - Green Innovation Products - Organic synthetic Polymer Nano- Toray Core Technology Biotechnology Chemistry Chemistry technology Toray’ Advanced Materials Green Innovation Technology Functional textiles to Energy Saving At first we introduce reduce thermostat setting Light and high strength Measurescarbon fiber’s Newcontribution Energy Resources Materials carbon fiber againstto reduce CO2 emission for Automobile/Airplane Global Warming Biomass for Wind Power

Secondly introduceWater Treatment three fiber’s environmentally- Bio-based Polymer Products Reductionconscious of productsAir Purification with (Fibers, Plastics, Films) Environmental pointsBurdens of ecological appeal Heat resistant filter Environmentally- for air cleaning friendly Products

LCA is a method to assess the environmental burdens and impact of our products through their entire life cycles.

Emission of A+B+C+D Environmental Burden C GHG(CO2)、NOx、Sox、 B Toxic substance… A D Total

Sum of Environmental burden through its life Material mining Transportation Production UseUse disposalDisposal →RawFeedstock materials Production ＺＺ

CO2 emission LCA by sector Production Use Disposal existing stage stage stage in 2008 technology

＜Unit: Mton＞ production Industry (420) 471 Ind. Process (51) 【Ａｕｔｏｍｏｂｉｌｅ】 16% 83% 2% （） 39% Conventional car Transport (236) Use Residential (172) 640 Others (232) （53%）【Ａｉｒｃｒａｆｔ】 1% 99% Energy convert(78) Others Disposal (28) 106 Total：1217 （9%）

For reducing the total ＣＯ２ emission globally, both Use stage and Production stage should be considered LCA approach is the most effective method Copyright 2011 Toray Industries, Inc. All Rights Reserved. 14 Ⅲ.Toray’s Action for the Global Environment LCA example-carbon fiber (aircraft) (JCMA: The Japan Carbon Fiber Manufacturers Association)

Conventional Aircraft CFRP* Aircraft (*carbon fiber reinforced plastic) Boeing767-300 vsvs

CFRP airplane model (same material ratio as Boeing787)

CFRP: 3% (1.8 ton) CFRP: 50% (24 ton) Others 80 • Secondary structures • Primary structures CFRP White Body Weight 70 • Secondary structures Ti 60→48ton (▲20%) ） Steel n 9% Reduction in Total Weight o 60 AL t （ 50 t Steel h

g Body Fuel Payload

i 40 e

w 30 ＣＦＲＰ６０ｔ１３ｔ６１ｔ

d 20 Al Conventional plane: 134 ton in total o Ti B 10 Al ４８ｔ 0 １３ｔ６１ｔ Conventional plane CFRP plane CFRP plane:122 ton in total （Based on material ratio of 787） 50% of Structures: CFRP Structure Weight: 20% Reduction Copyright 2011 Toray Industries, Inc. All Rights Reserved. 15 Ⅲ.Toray’s Action for the Global Environment LCA example-carbon fiber (aircraft)

原材料使用 CO2emission 組立asse 廃棄flight dis material～製造＋（10＋年）＋＝ total （ton/cargo） mbly (10years) posal Conventional plane ７００＋３,８００＋３９０,０００＋０＝３９５,０００

20%lightweight CFRP 50% ９００＋３０００＋３６４０００＋０＝３６８０００ plane , , , +200 ▲800 ▲26,000 ▲２７,０００

amount of ＣＯ2 emission reduction 27,000 ton ／ 1cargo・10years

Convert to 1year 2,700 ton-CO2/1year x 15,000 cargos ( over 100-seat aircraft )

Appeal point : Energy saving by reducingreducing thermostat settingssettings Target : General ConsumerConsumer Mechanism why it’s warm despite its thinness Water vapor rayon

skin space of micro acrylic atypical cross-section Heat generation Heart retention Quick dry ＜Heat generation＞ ■Rayon absorbs water vapor from human skin and the movement of the H2O molecule creates kinetic energy that converts to thermal energy, thereby generating heat. ＜Heat retention＞ ■Heat is maintained by the adiabatic effect that is made from air spaces between the micro acrylic fibers. ＜Quick dry＞ ■Atypical polyester that increase surface area by having a star shape absorbs and diffuses water, while also alleviating the uncomfortableCopyright feeling 2011 Toray of a Industries, wet skin Inc. All surface. Rights Reserved. 17 Ⅲ.Toray’s Action for the Global Environment Energy saving-verification of HEATTECH’s effect

１．Verification１．Verification ofof thethe effecteffect onon reductionreduction thermostatthermostat settingsetting DetermineDetermine how how many many degrees degrees Celsius Celsius the the thermostat thermostat setting setting can can be be reduced reduced by by virtuevirtue of of wearing wearing HEATTECH HEATTECH through through experiments experiments that that scientifically scientifically and and quantitativelyquantitatively compare compare the the effects* effects* of of HEATTECH HEATTECH with with cotton cotton inner inner cloth. cloth. (*Compared(*Compared with with cotton cotton innerwear innerwear of of the the same same shape shape and and thickness) thickness)

【conclusion】（１）Step1: Experiment with human subjects ・cotton ：１７.０ ℃ measure degrees of room temperature when person’s ・HEATTECH ：１６.１ ℃ temperature inside clothing is comfortable 30℃ male ４、female ４＜number of monitor＞８persons ages 20～60 Difference -0.9 ℃

（２） Step 2: Experiment with thermal mannequin ・cotton ：１７.２ ℃ (to resolve the difference among individual subjects) ・HEATTECH : １６．２ ℃ measure degrees of room temperature when mannequin’s temperature inside clothing is comfortable 33℃(corresponds to 30℃ within Difference -１.０ ℃ the garment, a comfortable setting for human) Copyright 2011 Toray Industries, Inc. All Rights Reserved. 18 Ⅲ.Toray’s Action for the Global Environment Energy saving- HEATTECH LCA

Effects of wearing HEATTECH (compared with cotton innerwear)

1.0℃ reduction in thermostat settings

Impact on CO2 emissions during the product lifecycle*1 *1) Lifecycle: Total estimate including materials and manufacturing through to use and disposal LCA

0.5 102 0.07 綿インナーcotton 製造Manufacturing 0.8 89 0.09 使用Using HEATTECHヒートテック ▲13kg 処分Disposal

0 25 50 75 100 125 CO2emission(kgＣＯ２排出量(kg-CO2eq／着・1シーズン)-co2eq/1peice・1season)

Manufacturing: +0.3 kg-CO2/garment per winter CO２ reduction Wear; -13 kg-CO /garment per winter 2 2 (due to lower thermostat temperature setting) 13 kg-CO per garment per winter Disposal: +0.02 kg-CO2/garment per winter Copyright 2011 Toray Industries, Inc. All Rights Reserved. 19 Ⅲ.Toray’s Action for the Global Environment Energy saving-the impact of 80 mil pieces

The amount of CO2 emissions reduced by HEATTECH garment is nearly equivalent to the Equates amount of CO2 absorbed by a 50-year-old cedar tree to

The effect of CO2 reduction derived from 80 million pieces

13kg-co2/garment・season x 80,000,000 HEATTECH = 1,040,000 ton-co2

equating to cedar tree 74,290,000 pieces = forest area of 831k㎡

40% size of New Taipei City

1.0℃ reduction in thermostat settings

The amount of reduction of power consumption isis 58w58w per family unit

58w/ family unit x 10,000,000 family unit = 580,000 kw

We Japanese face electric power shortage because of nuclear power outage. (operation rate is 40% lower) The GOJ declared that the power shortage this winter will be 1,130,000kw

If 10 mil family unit cut off 1℃ in thermostat setting due to wearing HEATTECH, half of power shortage is improved.

This is the big appeal point!

日経新聞8/26 読売新聞8/26 毎日新聞8/26

At a press conference onon August 25, Uniqlo and Toray announced their HEATTECH sales target for 2011 and the potential for efficient energy saving ofof this product.産経新聞8/26

The next day, major newspapers wrote about it. definition regarding energy saving

Copyright 2011 Toray Industries, Inc. All Rights Reserved. 22 Ⅲ.Toray’s Action for the Global Environment Biomass-Innovative materials for fibers Appeal point : Conserving limited fossil resources Target : Companies

Depletion of Fossil Resources Life Cycle of Feedstock

BiomassBiomass FeedstockFeedstock Photo Fermentation synthesis FossilFossil MaterialMaterial Petroleum C. J. Campbell, et al. Renewable Refinery ASPO (2004) & Synthesis MonomerMonomer Monomer ＣＯ２ Monomer Biomass Recycle Feedstock Water

F Polymerization

o Feedstock s

s New i

l Polymer Energy Polymer R

e Heat Resources s Incineration Polymer o Polymer u Disposal r Fossil-based c Fossil-based

e Incineration Polymer Products

s Polymer Products Power /Decomposition Bio-basedBio-based PolymerPolymer ProductsProducts （Plastics・Films・Fibers） 2010 2050 ・・・（year）（Plastics・Films・Fibers） Copyright 2011 Toray Industries, Inc. All Rights Reserved. 23 Ⅲ.Toray’s Action for the Global Environment Biomass-TORAY’s commercialization bio-based polymer ＆ 1.Toray’s Bio-based Polymer Polymer Fibers textiles Brand name 1,3-propanediol 3GT “sorona” Fitty by DuPont Biomass Lactic acid PLA”Ingeo” Ecodear by NatureWorks Sebacic acid Nylon610 Amilan

Modified cellulose Thermoplastic Cellulose Foresse

Biomass conversion technology Improving property technology to use biopolymer 2.Toray’s technology 3GT Heat-shrinkage petroleum 3GT based Durability material

Hydrolysis PLA PLA Low Heat-resistant petroleum based Durability material Copyright 2011 Toray Industries, Inc. All Rights Reserved. 24 Ⅲ.Toray’s Action for the Global Environment Biomass- applications

PLA Tubes

Headlining:3GT

Door trim base material :PLA Floor mat :PLA

Luggage trim :PLA Pillar:3GT Sun visor: 3GT

Apparel Net for Apparel preventing 3GT animal damage tea bag disposal fiber fill PLA net PLA PLA

PLA “Ingeo”

3GT “sorona”

Copyright 2011 Toray Industries, Inc. All Rights Reserved. 26 Ⅲ.Toray’s Action for the Global Environment Recycle-Toray’s recycling system Appeal point : conserving limited fossil resource Target : company

–Less Energy Recycling– TORAY’s Total Recycling for Fibers & Textiles

ReproductionReproduction CollectionCollection andand CirculationCirculation

Online TORAYTORAY Raw material Purification Synthesis Polymerization Cyclohexane Caprolactam Nylon6 Sales Crude Fibers Caprolactam Spinning, Weaving Nylon6 Nylon6 Chemical Recycle Process (Depolymerization) Waste Fabrics Sales PatagoniaPatagonia Pre-treatment Removal of Non-Nylon6 Collection Sales Substance (zipper, button, etc.) 2000 stores in 12 countries Consumers Copyright 2011 Toray Industries, Inc. All Rights Reserved. 28 Ⅲ.Toray’s Action for the Global Environment Recycle- Reproduction Recycling : material recycling (PET Recycling Type)

Collected TORAYTORAY Plastic Bottles Scrap film, fiber, Pellets Fabrics

TORAYTORAY Filament yarn & Staple fiber

Non-woven Fabrics, Fiberfill Fabrics

Apparel Makers, etc.

Impact on CO2 emissions during the product lifecycle 【 chemical recycle : PET100% Uniform 】 *calculating through basket method material manufa use disposal LCA cturing ＣＯ２ reduction virgin １５.７７.７０７.６３１.０２.４ recycle １３.０９.５０６.１２８.６（kg-CO2／kg）【 material recycle : PET100% Nonwoven 】 material manufa use disposal LCA cturing ＣＯ２ reduction virgin １０.４５.１０５.１２０.６２.５（kg-CO2／kg） recycle ８.６５.２０４.３１８.１

The amount of 2.4 43,000 Toray’s recycling fiber ×× ＝ kg-CO2/kg (ton-CO2/year) 18,000 ton/year ‥‥‥ equates to Cedar‥‥‥ tree 3.1million‥‥‥

Ⅰ．Toray’s Profile

Ⅳ．Conclusion

Ⅴ．Message

Ⅰ．All Toray group company members share the global issues and address to expand the Green Innovation business.

Ⅱ．Viewed from an LCA perspective, generally the amount of CO2 emission during usage is more than that during manufacturing. Therefore it is important to reduce CO2 emissions not only during manufacturing but also during usage.

Ⅲ．HEATTECH’s match of efficiency and price caused a big hit in Japan and the Japanese accept its effect of energy saving under recent power shortage conditions. To visualize the environmental effect by LCA is the efficient way for consumers.

Ⅳ．Biomass and recycling products are not expanding because of more expensive cost than conventional one. Despite these premium costs, the environmentally conscious image that these products portray can be used as a form marketing to offset the costs and help ecology. As technologies advance and new methods are developed in this area, costs will be reduced and these products will take off. Copyright 2011 Toray Industries, Inc. All Rights Reserved. 32 Ⅴ.Message

We would like to express our gratitude and say “Thank You” for the aid and support we received from all countries in the wake of Japan’s triple disaster this past Spring.

The huge disaster on March 11th changed Japan’s way of life. We are more conscious of energy saving than before,before, and therefore eco-conscious products are acceptable for us now.

The catastrophe taught us that we can change our lifestyle for the better.

Internationally, we willwill allall havehave to changechange our wayway ofof lifelife towards more sustainable and eco-friendly activities in the future.