Corporate Social Responsibility 2013 SUSTAINABILITY REPORT MESSAGE FROM THE PRESIDENT AND CEO

“Consider what we can do.” Reaching out to Society All Yokohama Groups have the same policy under Aside from the Forever Forest, we must also promote It is my concern to find an internal approach for our 2013 highlights “Show you care. Give a share.” GD100. new tree-planting activities like the Green Curtain. efforts to save energy and cut fuel costs: through feeding program, outreach, and medical activities conducted. Programs focused on Try to reduce operational use of organic solvent Yokohama offers BluEarth – our eco-energy tires for We can teach elementary students the benefits of environment must be increased for the community. (for cap tread). many people have concern to save gasoline. YTPI not Green Curtain – shade, cooler environment even Consider what we can do. We must have the latest only manufacture products like BluEarth, but also without air conditioning, etc. We should study what Reduce energy consumption through EnerCon information from local communities so we will be promote environment-centered activities, like this particular plant is good for the Green Curtain project activities able to listen, let us know their concerns, and answer year 2013, we had our Forever Forest 6. In Forever and bring seedlings. Then we can show them how to Reduce cost of fuel imports by reducing power them immediately to maintain a good relationship. Forest, people come together with their families to create their own Forever Forest or Green Curtain consumption because like in Japan, fuel is participate to our tree-planting project, considering after classes. expensive in the Philippines. Let us introduce new activities or change some – its importance in the environment. every year we should improve to help others. Our message must be clear to all people – to our The challenge is, each person must consider how to Our environmental activities must be promoted to People here already have concern for the customers, even visitors, suppliers, and contractors. save energy or the environment. I know it's difficult other companies or stakeholders and so we can environment. Maybe it is time that we should do it in We must promote our environmental advocacy well to make big efforts, but little actions to create explain the company's efforts to them and educate a different way. and send a good message to them. Yes, our eco tires awareness already have big benefits. them. are expensive, but we must try a different approach to For 2014, we need additional activities not just within help our customers understand our product and My other concern is the new development of our company. It's time to go outside and make new educate them about our new tires. commercial buildings like hospital and offices round friends. Inviting people to come is good, but going our area – we have to make a plan and invest to find out for them is better. Our employees already know how environment & out how to contain or minimize the effects (noise or safety-minded our company is. smell), even though we exist in an industrial park. We We must also be able to create activities and events must consider how to make a good relationship with outside – I know Filipinos love events! – especially One of my targets is the organic solvent – we are still our neighbors. for children. If we invite kids, maybe they can also using a lot and it costs us too much. bring their parents: that way, they will remember our company. It will be good for them so that's good for us. Tadashi Suzuki President and Chief Executive Officer Yokohama Tire Philippines, Inc.

2 Sustainability Report 2013 Yokohama Tire Philippines, Inc. 3 CSR MANAGEMENT CONTENTS CSR Perspective CSR MANAGEMENT: THE YTPI WAY 5 GD100 Centenary of Yokohama Rubber Co., Ltd. Corporate Philosophy Vision Producing Quality tires is our greatest pride. We are proud of our work and Evoke a distinctive global identity in building corporate value and in find satisfaction in seeing that tires we produce meet our customer’s building a strong market presence. exacting needs and high standard. ABOUT YOKOHAMA TIRE PHILIPPINES, INC. 6 We aim to accomplish all these at the same time that we: Corporate Profile Basic Policy for Fulfilling Vision a.) work to preserve and protect the environment and the Earth’s resources Deliver the best products at competitive prices and on time b.) develop the skills and potentials of our personnel Manpower c.) and employ our machines with the maximum efficiency and productivity Assert world-class strengths in technologies for protecting the Awards and Recognition environment This is our Corporate Philosophy. It is a philosophy that we are confident will succeed and will contribute to the well being of all our stockholders and Soaring High: The West Plant Project Foster a customer-oriented corporate culture that employees and to the economic development of the Philippines. honors rigorous standards of corporate ethics

PRODUCT RESPONSIBILITY 10 YTPI Mid-Term Vision Our Company’s Commitment to Quality 2012-2014 (GD100 Phase III) Strong and Healthy Growth Initiatives towards Product Reliability Financial (60% increase sales by 2014 vs 2011) Sand in Tire: An Environmental Friendly Filler Option Customer Production Quality Most reasonable price achievement per High Quality On Time Delivery Delivery customer spec in Asia ENVIRONMENTAL PERFORMANCE 15 Cost

Operational Efficiency / Eliminate capability restrictions Raw Material Consumption Capacity Up (lead time, productivity) Material Machine and Planning Production Inventory Shipment Energy Consumption Efficiency Internal Handling Utilities Phase 4 expansion Order and capability Improvement of Reduction of Process match-up Develop competitive Stable, safe and inventory management unshipped tires realization Reduction of Scrap Waste Management Environment Availability of suppliers uninterrupted utilities inventory variance Improve logistics Quality financial resources cost Delivery Initiatives towards Environmental Management Expand capacity Cost All Process: Elimination of MURA MUDA MURI to produce Improve first-pass yield (no-rework) Increase productivity (tires per person) Eco Tires Prompt delivering of services and information Improve energy efficiency COMMUNITY DEVELOPMENT 20 Culture of Continuous Culture of Maximize Use of Learning & Planning Motivated Employees Improvement Compliance Information Systems Initiatives towards Community Development Growth Develop multi-skilled Improved leadership Awareness of improvement Simplify and enforce SOP employees Maximize use of information Safety (participation in improvement Full implementation of systems Environment Cost-awareness among Employee support services programs) management systems Man employees are properly delivered Good External relations

SAFETY AND HEALTH 22 MISSION: STRATEGY: MOTTO: YEAR 2013 Safe Plant and Quality at source “Think Future. Act Now” Initiatives towards Safety and Health VISION Best Quality Product Step Up Proactive Actions thru Effective Monitoring in the Workplace Safety Performance for the Year 2013 CSR Vision Statement CSR Framework Health through Awareness YTPI envisions itself as being a catalyst of sustainable and Triple bottom line approach that concerns not only the most relevant CSR Programs to give back to the financial but also social and environmental aspects. We MANPOWER DEVELOPMENT 24 community and people through committed partnerships. believe that “Running a Good Business” does not only focus on earning and profiting but also on the contribution Trainings and Seminars CSR Mission Statement that we give to the society as well. Manpower Skills Level-up CSR shall be based on thrust of Environmental Protection, Run a good Financial Initiatives towards Corporate Culture Education, Community Welfare and Services and Culture Sustainability of business that will goods and sustain livelihood of Important Note: of Respect for Individuals. employees and Labor-Management Council: Building Partnership resources for the This report is based on information company without support to the available as of December 2013. Through Shared Responsibilities CSR is based on tripartite partnership of Company, compromising Corporate Social communities the future Environmental Responsibility Actual performance may differ by Employee and Community for Program Sustainability and generations the time of the release of this Involvement. publication. TECHNICAL WORKING GROUP (TWG) 27 CSR shall promote a culture of volunteerism and Address the needs of the Respective titles, job position About This Report community by sharing of Social and/or organizations, etc. refer to selflessness among all stakeholders to work together for resources as our Corporate Responsibility those at the time of reporting. Our Stakeholders others.

4 Sustainability Report 2013 Yokohama Tire Philippines, Inc. 5 About the Company

Yokohama Tire Philippines, Inc. In its aim to be globally competitive, The Yokohama Rubber Company, Ltd. (YRC) partnered with JFE Shoji Trade Net Worth and Income Statement Corporation (formerly Kawasho Corporation) to establish its first tire manufacturing facility in Asia outside Japan. This Yokohama Tire Philippines, Inc. has started its initial production for joint venture in April 30, 1996 created the subsidiary company named Yokohama Tire Philippines, Inc. (YTPI) and aimed Plant Expansion-Phase1 in February 2013. Though it has resulted to Net Worth to produce “Yokohama” brand passenger car radial (PCR) and recreational vehicle (RV) tires for the global market. higher operating expenses due to high Production test and Assets Liabilities Equity Balance Sheet Development cost during initial operations, this will have a favorable (in Million $) effect on later periods because of increase in production capacity. Corporate Profile 400 343.12 Financial performance of 2013 declined to 2% Operating Profit Margin Company Name: Y ok ohama Tire Philippines, Inc. President & CEO: Mr . T adashi Suzuki 300 264.15 (OPM) mainly due to expenses related to expansion, net income 194.63 Incorporation Date: April 30, 1996 Number of Employees: 2,132 200 163.19 162.70 posted is only $0.5M compared to $14.6M of 2012. Eliminating the 90.66 Address: IE 5 Clark Fr eeport Z one, Philippines Plant Capacity per day: 100 26,000 tires per day effect of expansion, OPM will be 7.4% which is 10% higher compared Shareholders: Y ok ohama Rubber Co., Ltd. - 96.62% Certifications: 0 OHSAS 18001:2007 to audited result of 2012. JFE Shoji Trade Corporation - 3.38% ISO 14001:2004 (100) (103.97) (100.96) Paid-up Capital: US $86.93 million ISO/TS 16949:2009 Improvement is expected in Year 2014 since Expansion-Phase I will run (200) (180.42) 2 Total Lot Area: 452,019 m ISO 9001:2008 at full capacity. Overall OPM will increase to 7% and average 2011 2012 2013 Total Building Area: 230,028.27 m2 production per day will be around 26,000 tires. However, 2015 OPM is expected to decrease by 4% due to initial operations of Expansion- Phase II. Like in 2013, higher operating cost is expected during initial Income Statement Production History operations. Nevertheless, good financial performance is expected to Sales Net Income OPM Production for West Plant expansion has started in first quarter of 2013; new sizes and patterns are introduced to market which aims to bounce back by Year 2016 because three manufacturing plants are Net Income increase the sales in North America. However, it is noticeable that the production in 2013 has declined despite the initial production of expected to run at full capacity where production per day will be (in Million $) OPM expansion. 400 7% 8% Annual Production Output 36,000 tires. 300 288.46 6% Tire pcs (in Thousands) 268.95 237.06 Decrease in production is mainly due to 8,000 4% 6,986 Net worth will continuously improve due to projected growth on sales 200 4% lower demand from Russia & Europe and 6,743 6,901 7,000 2% 6,009 6,134 and due to expansion which will escalate the production capacity by non-achievement of some orders which are 6,000 5,641 5,664 100 2% 8.50 14.59 0.46 5,000 60%. Long-term loan payment for expansion will be fully paid in Year intended for North America due to some 4,468 0 0 delays during initial operations. Capacity 4,000 2017 for Expansion-Phase I and Year 2020 for Expansion-Phase II. 2011 2012 2013 3,048 increase is anticipated to start by 2014 due 3,000 2,580 2,003 2,000 1,685 1,699 to full operations of Phase1 expansion; 1,472 1,641 993 growth is positively expected to continue 1,000 0 until 2016 due to full operations of Phase2. 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Soaring Higher: The West Plant Project Product Destination The West Plant project is another milestone in the In 2013, Yokohama Tire Philippines, Inc. produced an average of 18,000 tires per day. From a mix of 13 to 18 inches tire sizes, 93% are for export sales around the globe, and 7% are sold locally . history of Yokohama Tire Philippines, Inc. (YTPI) that was realized in 2013. The inaugural tire was Sales in Percentage produced in February 7, 2013 at West Plant Phase I. Export 93% That same day marked the beginning of tire Local 7% production in the new facility. The event was made even more meaningful by the presence of Mr. Philippines Tadashi Suzuki, former General Manager of Tire Russia 7% 16% Global Production Division of Yokohama Rubber South America Asia 6% Company, Ltd. (YRC) and now YTPI President and 21% Oceania CEO. 4% Africa 1% The expansion was expected to increase production with additional 4,000 North America Europe tires per day until the end of 2013. Growth is expected to continue until 23% 22% 2016 upon completion of Phase 2. Tire produced from the West Plant will be distributed primarily to the North American market.

6 Sustainability Report 2013 Yokohama Tire Philippines, Inc. 7 About the Company

Manpower Awards and Recognition YTPI supports equal opportunity employment by EMPLOYMENT TREND YTPI Accepts Environmental Contribution Award providing careers to a wide-range of individuals, Number of Employees YTPI received an Environmental Contribution Award from Toyota Motor Philippines Corporation promoting equal opportunities, and nurturing diversity. 2,500

2,132 (TMPC) last April 4, 2014 in recognition to YTPI's Year 2013 energy conservation activities. 2,080

2,000 1,984 In line with the company's commitment to employee 1,780 YTPI's VP and Assistant Plant Operations Division Manager, Mr. Juanito Arona, accepted the award 1,695 1,675 1,675 th 1,521 during the 2014 Toyota Supplier Conference and the 14 Toyota Suppliers Club (TSC) General excellence by developing the workforce, diversity is 1,500 viewed as a contributor to dynamism in the workplace Assembly at the Centennial Hall of Manila Hotel, where several suppliers of Toyota were 1,000 942 awarded for their exemplary performance in terms of Quality, Delivery and Cost. which is vital to the company's continuing expansion, 762 585 553 542 527 493

437 The Environmental Contribution Award is newly introduced in this year's TSC General and as a factor for innovation which is essential in 500 Assembly, in recognition to companies with significant contribution to CO2 emission providing our customers with high satisfaction in our 0 reduction activities. YTPI was also noted for having the most number of implemented 2011 2001 2002 2012 2010 2000 1999 2009 2006 2004 2005 2003 2013 1998 2008 products. 2007 Kaizen proposals in 2013.

50 YTPI Receives 2012 APAC Perfect Quality Award from FIAT-Chrysler Group Recruitment 46 45 Sourcing Channels As a practitioner of equal opportunity employment, YTPI sources 40 On September 2013, YTPI received the 2012 APAC Perfect Quality Award from the FIAT-Chrysler No. of Employees Hired its employees from various channels.In 2013, majority (39%) of 30 Group in recognition of the company's meeting the four specific requirements: 1. Supplier located in the Asia Pacific Region (APAC) the hired applicants came from walk-ins, followed by employee 20 referrals (36%). 14 2. Perfect score on Quality evaluation and have no yard hold 10 6 5 3. Annual transaction volume of over US$1 million YTPI has also initiated the Dual Training System (DTS) 2 2 0 Walk In Employee Online Absorbed Job Fair Previous YTPI 4. Taking the initiative, being cooperative and responding swiftly implementation with partner schools since 2013. Referal Contractor OJT Scholars The award serves as an encouragement to all YTPI members to Under the Republic Act 7686, the DTS' main objective is to In 2013, DTS is strengthened in Region III by the TESDA Regional continuously improve and be challenged to sustain and produce high- enhance manpower education and training through an active Office, particularly in Clark Freeport Zone, and YTPI has been one quality products. partnership between the business sector and technical-vocational of the first companies to support this program. YTPI has deployed a total no. of 73 DTS Trainees starting June to December 2013, schools; thus, it bridges the gap between the industry's demands YTPI Team Wins at Kaizen Competition and the unemployment rate of competent and job-fit graduates. which might significantly increase in the future. The “Yokohama Mixing Gilas” contends for the company in the 14th Workforce by Category Annual Toyota Suppliers Club (TSC) Kaizen Competition held last November 8, 2013. The team won the first runner-up for their In line with promoting equal opportunity employment and residents of Region III (98%); the remainder comes from other presentation dubbed as the “Mixing Scrap Reduction Improvement”. workforce diversity, YTPI has 2,067 regular employees out of its provinces (1.5%) and the National Capital Region (0.5%). 2,132 total population. The workforce largely consists of male Workforce by Rank YTPI is one of the companies invited by TSC to compete for Class A1 employees (93.9%) who are mostly assigned in production and Category. The winners of the recent Small Group Activity (SGA) are 2.1% Management chosen to participate in the Kaizen competition. technical work, while female employees (6.1%) are mostly given 44 administrative or clerical functions. 12.5% Supervisor 266 0.7% Main Product Line-up Team Learder Only 0.3% of employees are within ages of 51-above; a higher 14 percentage of YTPI employees belong to younger age groups (from 84.8% Team Member

1,808 A.drive C .drive2 20 - 30 and 31- 40). Majority of the employees are Team Members AC02 0% 20% 40% 60% 80% 100% Part of A.drive (1,808) while 44 hold managerial positions. The tire designed The all-weather family, these to deliver tire provides Workforce by Age tires satisfy the Year 2013 marks an increase in YTPI workforce indicating our environmental, superior traction 40.8% performance company’s impact in creating opportunities to help raise the Age 20 to 30 human and socially and stability on 869 requirements of friendly solutions any road in both employment rate in the Philippines. Majority of our employees are 50.9% the Asian Age 31 to 40 for you and your wet and dry 1,085 Market. Workforce by Status 8.0% conditions. Age 41 to 50 car. 171 97.0% 0.3% Regular Age 51 above 2,067 7

3.0% 0% 20% 40% 60% 80% 100% GEOLANDAR Probationary W drive iceGUARD 65 Stud iG35 Workforce by Region V903 0% 20% 40% 60% 80% 100% Comfortable enough The tire that The tire that sets a 0.9% for the drive home, provides new standard for Region I Workforce by Gender 19 yet tough enough outstanding winter control and 98.0% Region III for off-road treks, performance on safety. iceGUARD 93.9% 2,090 Male these tires provide a wide variety of tires allow more 2,001 0.5% NCR 11 good traction and road surfaces in confident handling 6.1% 0.6% handling even in winter. on both ice and Female Others 131 12 snow. snow. 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100%

8 Sustainability Report 2013 Yokohama Tire Philippines, Inc. 9 Initiatives towards Product Responsibility Product Reliability

“Customer-oriented Quality: Continuously Improving our Process YTPI Celebrates Quality Month (November) 4Ms to Adapt to the Ever-changing Needs of Our Customers” YTPI's Quality Month for 2013 is themed “Customer Oriented Quality: Continuouslyy Improvingving our Process 4Ms to Adapt toto the Ever-changing Needs of OurOur CustomerCustomers”s” Our Company's Commitment to Quality: This is in conjunction with the Yokohama Rubber Corp. (YRC) President's instruction to all of YRC subsidiaries at the start 1 We shall produce our tires, motivated to provide “Customer-oriented Quality and Competitive Price.” of the Quality Month celebrations to interpret “good quality” as “customer-oriented quality”, keeping in mind that the 2 We shall continually provide the products that the customers demand. next process shall already be considered as a customer. We shall continuously grow, by expanding our production facilities, and adding dynamic forces to support our 3 Several new activities were conducted during the Quality operations, and most especially, giving importance to the basics of 4Ms. Month celebration to advance YTPI employees' awareness These are considered the catalysts that shall lead YTPI to achieve the highest Quality performance and make about the importance of Product Quality. the vision of becoming the Number 1 subsidiary plant of the whole Yokohama Group a reality. The target is not only to work routinely for compliance, but more importantly, to commit to enhance the quality of YTPI path to achieve Mid-term VISION for 2013: products and the quality of services offered by doing the MISSION: STRATEGY: MOTTO: best job possible to produce and deliver high quality tires. YEAR 2013 Safe Plant and Quality at source “Think Future. Act Now” VISION Best Quality Product Step Up Proactive Actions thru Effective Monitoring November 2013 Quality Month Activities 1 Mascot Competition 5 Quiz Bee YTPI Adapts Recurrence Prevention Activities (PYB Classification) 2 Quality Parade (Opening) 6 Poster-making Contest 3 Quality Adventure Challenge 7 Q & A with QA To properly address all Claims and Non-Conformity issues, and The objective of the P-Y-B system of preventing Quality to have a standardized manner of monitoring for future follow problems can be likened to the target of reducing variations to 4 Quality Henyo ups, a systematic criterion is introduced. stabilize product performance from prototype to mass At the conclusion of YTPI's Quality Month celebration, Yokohama Rubber Company production. The P-Y-B system aims to classify Quality issues and provide President and Representative Director Mr. Hikomitsu Noji shares his insights. Reduce or totally eliminate process appropriate actions to immediately resolve and eliminate variation aims to meet nominal value at the highest point of production… It is worthy to note that “YTPI is doing a very great job,” especially in the aspects of repetitions of the same issues. Target 1) process-led Quality improvements, 2) System-based enhancements on outflow Stable Flactuating When quality trouble occurs, its countermeasure activities shall be Mass Production prevention and traceability that can be shared to all YRC plants, and 3) the activity of Minimum Within Tolerance classified into the three stages of P(pink), Y(yellow) and B(blue) depending Variation Manpower development through his method of “training-practice-examination- on the degree of progress (Note 1): Out of Control Pre-Production qualification-certification.” P production, shipping is suspended USL (Upper Specification Limit) or USL (Upper Control Limit) Initial Production Countermeasure root causes are not identified or effectiveness of interim st nd rd in progress measures are under confirmation YTPI Undergoes 1 , 2 , and 3 Party Audits: It is one of the KPI's (Key Performance Indicator) of the Quality Assurance Section to comply with 1st, 2nd, and 3rd party Y outflow is prevented Prototype and LSL (Lower Control Limit) audit requirements, in line with the specifications of various local and international Quality Management standards, as Interim measures effectiveness of countermeasures is under confirmation LSL (Lower Specification Limit) have been taken well as Original Equipment Manufacturer (OEM) requirements, to which YTPI is certified to. CSL Quality Approach (Center Specification Limit) B permanent measures with hardware are completed Prevention 1 Internal Quality Audits 2 Quality Management System Audits or Correction Recurence YTPI yearly conducts Internal Quality Audits to assess and YTPI is also annually audited by an external certifying body procedures, work instructions are already issued and 100% prevention stable operation is ensured Quality evaluate our compliance to ISO/TS16949 and ISO 9001 to assess our capability to continuously improve our has been B is separated into: 50% requirements. company's Quality Management System (QMS). completed B1: Outflow preventive action has been complted B2: Occurence preventive action has been completed 0%

YTPI Introduces “Kessen” Scrap Reduction Activities

The Plant Operations Division (POD) initiated the Scrap East Plant (EP) and West Plant (WP), aims for the accelerated Reduction Kessen (“Kessen” is the Japanese term for “decisive and standardized scrap reduction activities. battle”) in June 2013, with the objective of reducing the scrap Kessen Scrap Index Result (June & December 2013) level at YTPI's East Plant (EP) by observing the actual Scrap Index operations to establish standard actions to reduce or totally 100% 100 Our scrap ratio was eliminate waste. 90 dramatically reduced by almost 45% compared to 80 3 Supplier and Customer Audits the benchmark month of We were able to make The Kessen Captain (the Plant Operations Division General 70 May. history by achieving the In March 2013, Chrysler Supplier Quality members least amount of scrap. Manager) commended the intensive efforts made by the Kessen 60 55% conducted a Process Audit of YTPI, with the objective of 50 45% Teams; thus, standardizations were immediately implemented establishing good Supplier-Customer relationship. The 40 by each process after Kessen I. 30 auditors provided positive feedback after the audit of each 20 Process and upon reviewing YTPI's performance. With the start of West Plant operations in 2013, and the 10 momentum of Kessen I still high gear, Kessen II was called for in 0 December 2013. The “battle” this time between the May 2013 June 2013 December 2013

10 Sustainability Report 2013 Yokohama Tire Philippines, Inc. 11 Initiatives towards Product Reliability

MANUFACTURING PROCESS The Manufacturing Department operates with high regard on its impact on Safety, Quality, and the Environment.

Kaizen or continuous improvement, and Kessen, the Japanese term for “battle” (scrap reduction campaign), are From the start of this project Year 2011, CUBE process has already came up with 10 possible countermeasures and some of the governing concepts behind each process to achieve a sustainable outcome. improvements. These consist of machine modification namely: flapper re-positioning, change on spring design, a These are applied in every activity in line with the goal to produce high-quality, environment-friendly and safe tires, series of improvement on the thread condition, and wrapping assembly modification. which might result to higher customer satisfaction. Countermeasure Result Among the series of modification, the Checking the data versus the number of days per month, showing on the significant improvement on the Bender Roller had the decrease on the downtime caused by Wire End Tilting on Bead operation. Mixing Section Kaizen Activity most significant effect. Bender Roller serves Wire End Tilting Downtime Trend 2013 as mechanism to pre-form the Bead wire After the latest improvement Minutes The main focus is Compound rubber which is the major 40 Total Non-Conforming Compound in Batches Average Monthly Downtime material into the required circular pattern. o n B e n d e r Ro l l e r, t h e 35 composition of a tire. With the improvements of Mixing Target Monthly Downtime (Jan. 2012 - Jan. 2013) Having this mechanism, the circumferential downtime caused by Wire End 30 No. of Batches Percentage 25 Section, compound quality was improved. One of their 100% Tilting on bead operation has 98% 99% force of the material going upward has been 20 120 94% 100% 15 activities is to reduce the main contributor of non- 89% reversed and goes downward, limiting the significantly decreased as 110 As the group 90% shown in this graph. 10 conforming compound which is the Low ML (soft rubber) 100 priority 78% possibilities of Wire end Tilting. Total Non-Conformity 80% 5 90 0 problem on compound properties. The target set is 80% 67% Commulative Percentage 70% 2013 Jul. Aug. Sep. Oct. Nov. Dec. 80 1st Half Ave. 2013 2013 2013 2013 2013 2013 reduction by the 3rd quarter of Y2013. Their theme is 70 55% 60% 60 50% “REDUCTION OF NON-CONFORMING COMPOUND 43% With the effectiveness of M1 Kaizen Activities, each member has gained intangible benefits; they have increased their 50 40% THROUGH SOLVING THE PROBLEM OF LOW ML 40 25% 30% level of capability and skills in the workplace, gaining much confidence because of the remarkable results of the 30 PROPERTY”. 20% 20 project. 10% 10 Low ML is a property on compound which affects 0 0% Low ML / Long T30 / Long T95 Low MH High MH High ML / Short T95 Short T30 / Low SG High SG Overall, the major accomplishment of Manufacturing 1's Kaizen activities is on providing solutions to numerous Low Mv Long Ms High Mv Short Ms processability on next process. Rubber is too soft and it problems encountered on the production line. Not only that these activities has resulted to meeting the targets has a lower viscosity, usually caused by over-charging of Based on the data, the group has conducted a series of indicated on KGI/KPI, but also in earning the management's trust and confidence, because of each members' best oil material. The graph below shows that Low ML problem problem analysis until the following causes were identified efforts in achieving the goal. is the top contributor of the non-conforming compound. by the Mixing Section: Step 1: Root Cause Step 2: Countermeasures Our Methodology 1 SEQDCM (Safety, Environment, Quality, Accumulated and formed carbon particles Repair defective Vibrator and attach Hammer-type Vibrator Delivery, Cost, Man) Curing Section (West Plant) Kessen II Targets around the discharged surface on the portion prone to accumulation of carbon Plan Do Scrap Reduction OUS 2 NTINU Check Act CO During the Kessen II campaign, West Plant Curing process There are four reasons why pinch bead (PB) occurs Based Long charging of oil due to uncontrollable air Install pneumatic cylinder on oil injectors to control push MENT OVE Man IMPR Cost Delivery pressure going to the Oil Injection and pull of the injector rad piston (program is interlocked Quality focused on the improvements of two top Curing-related from these causes, the following improvements were nvironment ety E with the charging sequence of oil) Saf defects: Light Liner (LL) and Pinch Bead (PB). Root implemented: Step 3: Result causes of these defects were determined and the countermeasures were formulated. No. of Batches Low ML / Low Mv Trend for 2013 Through continuous improvement (Kaizen) using the P-D-C-A 45 40 method, the section derived the effective improvements that 40 The graph shows that Low ML trend has Step 1: Root Cause Step 2: Countermeasures made their target achievable and sustainable. 35 been significantly reduced as a result of 1 30 Mixing's kaizen activities implemented Green tire mischucking Turret modification 25 Addition of locking system (turret to the ground) to avoid movement of turret Verifying the sustainability, non-conforming compound top 21 20 start of May 2013. 20 that causes misalignment contributor was significantly reduced through elimination of long 15 12.5 9 10 7 Addition of centering guide to keep the green tire straight on the turret charging of oil and carbon. 5 5 1 2 0 2012 Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Loader offset to the center post due to Modification of loader actuator to increase the sensitivity of the loader sensor Ave. 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 damaged loader shock absorber and reduce offset green tire at the loader Replaced easily damaged shock absorber with better quality Cutting and Bead (CUBE) Section Kaizen Activity 3 Sagged bladder Improvement on center post stroke by replacing limiting sleeve lenght Cutting and Bead (CUBE) Section has provided a solution Wire End Tilting Downtime 2012 Trend Minutes 4 50 in reducing the downtime occurrence on their process Average Monthly Downtime Improper loading Orientation of Curing load man regarding proper green tire loading which was increasing due to “Bead Wire End Tilting” and 45 Target Monthly Downtime The data shows that on the latter part of 2012, the 40 tilting problem started to rise again and gave significant problem to Bead operation Step 3: Result “Poor Wrapping”. Bead Wire End Tilting is the sudden 35 Target downtime is 21.5 minutes per month set from detachment of wire end from the bead surface due to the 30 As a result, PB occurrence reported in December is 0.05%, second lowest in a month for West Plant. 2011 Kaizen activity circumferential force of the bead wire. This problem was a 25 20 serious battle for CUBE section since early 2011. 15 For light liner (LL), the main cause is the Bladder's insufficient contact to the liner surface. Two main causes were 10 encountered by WP Curing: bladder's lateral stretching is not enough, and Booster relay problems. 5

Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012

12 Sustainability Report 2013 Yokohama Tire Philippines, Inc. 13 Initiatives towards Product Reliability Environmental Performance

“Contribute to the prevention of Global Warming Step 1: Root Cause Step 2: Countermeasures Step 3: Result and preserving of natural resources.” 1 Booster relay problems Booster relays with clogged filters were replaced, Total LL percentage for This is a statement in our Environmental Policy. A commitment we continue to uphold through responsible use of Upon checking of the booster relay, it was slightly improving LL occurrences. December is 0.02%, found out that the filter is blocked by which is a big energy and other resources in producing quality tires. dirt: a possible reason why pressure improvement compared injected to the bladder is insufficient. INPUT to November, which is Raw Material Consumption 2 Energy Consumption East and West Plant Bladder's lateral stretching is not enough Bladder type was changed (to B543P) which 0.34%. For East Plant. Number of tires produced for 2013 went Electricity Fuel (Boiler) Fresh Water 3 effectively stopped LL occurrence. East 59,038,861 kWh 7,417,115 Liters 376,732 m down to 5,634,499 pcs from 6,197,796 pcs in 2012. This is F 3 West 13,226,424 kWh 990,463 Liters 129,246 m 9.26% decrease in production which, consequently, led in Raw Materials Consumption East and West Plant Missed Detection Reduction the decrease of raw material consumption: Rubber (both Rubber Chemical Textile and Metal Reduction of Missed Detection (MD) can decrease scrap accumulation, as reducing MD at 1st Inspection has also been East 18,726,218 kgs 16,111,942 kgs 6,487,070 kgs natural and synthetic) - 23.81%; Chemicals (carbon and West 1,743,609 kgs 1,371,576 kgs 99,437 kgs one of the top priorities for Manufacturing 2 Department. other additives) - 24.75%; Textile and Metals - 22.96%. MANUFACTURING However, it should be noted that reduction in raw Based from November’s missed detection data, top three defects can all be found at the inner liner area. Thus, Tire Manufacturing Process materials used is greater than the decrease in improvements on the inspection of the inner liner are given high focus. Extruding Curing production. It is an indicator that the efficiency in the use Mixing Calendering Tire Building Finishing Countermeasures of raw materials increased. 1 2 Cutting & Bead Inspection Change in method Lighting Improvement Raw Material Consumption Per Tire Production Output (cured tire): 5,623,297 Tires 11,202 Tires Inspectors use two methods when inspecting the inner liner: Inspection table lighting was also modified for the 1st inspectors Rubber Chemicals Textile and Metals East Plant West Plant when the tire is in straight position, and when the tire is tilted. to easily detect defects. 2011 4.17 3.91 1.28 OUTPUT method 1: method 2: Original: Modified: C u r i n g I n s p e c t o r s ' 2012 3.97 3.45 1.36 Emission to Air East and West Plant evaluation revealed that 2013 3.33 2.87 1.15 Carbon dioxide Emission CO East 2 42,310 tons combining both methods is kg/tire pc 0 2 4 6 8 10 West 509.16 tons more effective than using Ambient Air Quality Boiler Air Emission Quality Generator Air Emission Quality only one method. Parameters Gov’t Std. Yr. 2013 Parameters Gov’t Std. Yr. 2013 Parameters Gov’t Std. Yr. 2013 Stationary Position Tilting of Tire SOX 340 11.88 SOX 1,500 16.67 SOX 700 - no longer tested For West Plant. The process at West Plant is not as as ordered by NOX 260 10.88 PM 150 11.67 PM 150 - DENR-EMB R3 efficient as that in East Plant; which is only to be expected PM10 200 39.50 CO 500 0.83 CO 500 7.18 due to good Results NOX 1,500 104 NOX 2,000 283 performance in from something that's just starting. A lot of materials *unit of measurement used is mg/NCM *unit of measurement used is mg/NCM *unit of measurement used is mg/NCM the past years st WP Curing's Kessen II Overall Results: The graph shows 1 Inspection's Missed Detection rate at West were used for the testing and commissioning of Waste Generation (Total) Wastewater Discharge (Total) Plant for the month of December (0.07%). This is so far the The graph below shows a remarkable decline in the actual scrap Waste Generation Wastewater Quality Parameters trend (0.67%) of West Plant's Curing by the end of Y2013: machines. The West Plant only produced 11,202 pcs of 1,919.69 tons Parameters CDC Std. Yr. 2013 lowest Missed Detection rate in West Plant. Reusable 136.32 pH 6.5-9 7.09 2013 Missed Detection Trend (West Plant) 2013 Curing Scrap Trend (West Plant) tires yet consumed 1,743.61 MT of Rubber (both natural Recyclable 1,522.72 Color 150 43 Scrap Percentage Scrap Percentage Non-Recyclable/Residual 6.78 BOD 200 37.25 0.70% 0.65% 12% and synthetic), 1,371.58 MT of Chemicals, and 99 MT of Hazardous 253.87 COD 400 129 *unit of measurement used is Tons TSS 200 56.38 0.60% Missed Detection Metals and Textiles. Oil & Grease 5 1.91 10% Curing Scrap Target 0.50% Actual Curing Scrap 8% 0.40% 0.36% Energy Consumption Efficiency 0.29% 6% 0.30% Curing Scrap Target = 0.98% 0.22% Actual Scrap = 0.67% The energy efficiency of 2013 has improved despite the decrease in production. This is a result of the various energy 0.17% 4% 0.20% 0.14% 0.11% conservation activities of the company which include: (a) investments in power-saving equipment, (b) machine 0.10% 2% 0.07% 0.98% 0.67% part identification and correction, (c) steam leak finding and correction, and (d) cooling tower float valve 0% May Jun. Jul. Aug. Sep. Oct. Nov. Dec. 0% Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 corrections, among others. Electricity (Purchased and Generated) Sand in Tire: An Environmental Friendly Filler Option Electricity Efficiency vs. Production For East Plant. Decrease in production also resulted in the As part of Yokohama Tire rail roads. It is used in place of carbon black to produce Monthly Ave. Production kWh per Cured Tire decrease in electricity consumption. However, contrary to the Tire pc x 103 kWh/Tire Philippines Inc. goal to tires with a low rolling resistance. Low rolling resistance previous year wherein the decrease in production also resulted 10 12 preserve and protect the 2 10.67 10.53 equates to lower fuel consumption and fewer CO in the decrease of efficiency, electricity efficiency for 2013 9.89 environment, usage of raw emission by decreasing required rolling effort and 8 10 improved despite the decrease in production. The average 7.06 materials derived from improving vehicle fuel efficiency. consumption for 2013 is 10.53 kWh/tire; this is 1.31% 6.20 8 6 5.62 naturally occurring substance improvement from the 10.67 kWh/tire consumption of 2012. that will give less impact to the YTPI, with the help and support of YRC, our mother 6 4 environment are promoted. One of these raw materials is company, continues its research and development in For West Plant. Just like in raw materials consumption, West 4 silica or also termed as “pure sand”. Silica sand is one of making silica to become the main filler for almost all cap Plant electricity consumption efficiency is not as good as that in 2 2 the most common varieties of sand found in the world. It compounds. Since 2010, the usage of silica to YTPI East Plant. The average consumption is at 89.56 kWh/tire. That is used for a wide range of applications and in industrial production has increased from 20~30PHR to 70~80PHR. is more than eight times of the efficiency at East Plant. This may 0 0 processing. The use of silica as fillers, with the help of From then, silica technology in tire has served to the still be accounted against the start-up, test runs, and 2011 2012 2013 coupling agents and good compounding, gives better wet conservation and preservation of the environment, and commissioning of machines. However, it must also be noted also continuously improved, from 1,021.88 kWh/tire in traction and drivability of snowy conditions on roads and that is, the best benefit of sand in tire. that as the operations in West Plant progressed, the efficiency January to 48.04 kWh/tire in December.

14 Sustainability Report 2013 Yokohama Tire Philippines, Inc. 15 Initiatives towards Environmental Performance Environmental Management

Forever Forest: 6 years and counting… The Yokohama Rubber Company (YRC), mother company of Yokohama Tire Philippines, Inc. (YTPI), launched Yokohama Fuel (Boiler) Waste Management Forever Forest last 2007 as a project that will place 500,000 seedlings in all Yokohama plants worldwide by 2017, the year For East Plant. As mentioned, the energy conservation Wastes are innate part of a manufacturing process. which will mark YRC's centenary. For YTPI, the project was launched in 2008 and has become a yearly event since then. activities of YTPI are not only focused in conservation. Various Since this is inevitable, the least thing a company can do Last October 19, 2013, YTPI held its Forever Forest 6 in activities are also done to reduce the fuel consumption of front of the new Raw Materials Warehouse at West Plant. boilers. As a result, the fuel consumption efficiency of 2013 is to make sure that its waste is managed, controlled, improved as compared to the pas year. The average fuel and disposed properly. The company's Forever Forest 6 was originally set last consumption went down to 1.32 L/tire in 2013 from 1.33 L/tire October 12, 2013 but was rescheduled the following week in 2012. This is a 0.83% improvement in fuel use efficiency. The total generated waste for 2013 is 1,919.69 tons, due to Super Typhoon Santi (international name: Nari). 8.14% more compared to 2012 mainly due to the start For West Plant. The average fuel consumption efficiency for Nonetheless, a total of 444 people joined the event that West is at 6.82 L/tire, more than five time of the efficiency of up of the West Plant. included Yokohama Tire Sales Phils., Inc. (YTSPI) East Plant. However, just like for electricity, the efficiency employees, tire dealers, Yokohama India (YIN) trainees, improved as the operations progressed. It started at 140.69 Reuse-Recycle Rate and YTPI employees and their families. L/tire in January and ended at 4.22 L/tire in December. The Reuse-Recycle Rate determines how much of the total A total of 3,522 seedlings were planted in the 1,184 m2 Fuel Efficiency vs. Production (East) generated waste is being reused or recycled. For 2013, the the seedlings planted during FF6 were grown in YTPI's own area in front of WP's Raw Materials warehouse. The Monthly Ave. Production Liter per Cured Tire reuse-recycle rate is at 86.42%. This fell short of the set reuse- nursery and almost 50% of these seedlings came from the Tire pc x 103 Liter/Tire recycle rate of 88.5%. This is also lower than the performance seedlings were composed of 34 native varieties, some of seeds of trees planted in previous Forever Forest projects. 10 3.0 in 2012 which is at 88.23%. This is mainly due to increase in the which are endemic to the Philippines. Native varieties are generation of hazardous waste. Last March 2013, the waste chosen to adopt the concept of potential “natural As of FF6, the total number of seedlings planted in YTPI now 8 7.06 2.3 water treatment tank was desludged to improve the waste vegetation” of Dr. Akira Miyawaki, a plant ecologist and reached 28,274 and the total area of Forever Forest Project is 6.20 6 5.62 water quality. This entailed disposal of 23 tonne of sludge. Professor Emeritus at Yokohama National University. As a 8,892 m2. This project will continue until 2017 and YTPI's 1.33 1.32 1.5 Waste for Reuse/Recycle great improvement from previous Forever Forests, 86% of perimeter will then be surrounded by trees and seedlings. 4 1.14 Kilograms 0.8 2,500,000 2,313,770 Forever Forest Project Map 2 FF9 (2016) FF7 (2014) 2,000,000 Forever Forest Tree Planting FF11 (2018) FF8 (2015) No. of Trees 4,950 No. of Trees 6,713 0 0 1,659,032 2 2 1,560,645 No. of Trees 5,755 No. of Trees 4,950 Planting Area 1,500 m Planting Area 1,918 m 2011 2012 2013 Forever Forest Projection 2 1,500,000 Planting Area 1,750 m2 Planting Area 1,500 m FF3 (2010) Forever Forest Target for FF4 (2011) East and West Plant No. of Trees 6,005 No. of Trees 5,125 Planting Area 1,707 m2 1,000,000 2 Water FF10 (2017) Planting Area 1,560 m No. of Trees 6,022 2 FF1 (2008) For East Plant. The water efficiency for 2013 has greatly 500,00 Planting Area 1,825 m Forever Forest Forever Forest (West Plant) (East Plant) No. of Trees 5,300 improved that in November 2013, the consumed liter of water Planting Area 1,560 m2 0 36,000 trees 23,751 trees per tire is almost the same as the first half of 2012 during when 2011 2012 2013 the production is at its peak. The average water consumption FF6 (10/2013) FF5.5 (4/2013) FF5 (2012) FF2 (2009) for 2013 is 67.2 L/tire, 5.49% better than 2012. No. of Trees 3,522 No. of Trees 974 2 No. of Trees 2,896 2 No. of Trees 4,425 Planting Area 1,184 m Planting Area 440 m 2 Landfill Rate Planting Area 880 m 2 Planting Area 1,289 m For West Plant. The average water consumption efficiency is at The Landfill Rate determines how much of the total generated 900 L/tire which is 13 times higher than that in East Plant. But waste is being disposed to the landfill. These are the wastes just like in electricity and fuel, water consumption efficiency that are non-recyclable but also non-hazardous and non-toxic. also improved as West Plant operations improved. In January, The 2013 target for landfill rate is 0.27% of total generated the efficiency is at 13870 L/tire but in December it went down waste or lower. However, the landfill rate average for 2013 is at to 620 L/tire. A long way to go compared to East plant but a 0.36%. This is due to the transfer of label backings and tire The YTPI Nursery good start, nonetheless. labels from hazardous waste to landfill waste as mandated by One notable difference of this year's Forever Forest from Water Efficiency vs. Production Clark Development Corporation (CDC). the previous ones is that a huge chunk of the seedlings Monthly Ave. Production m3 per Cured Tire Non-recyclable Waste / Waste Disposed at Landfill planted were grown from YTPI's own nursery. Some of the Tire pc x 103 m3/Tire Kilograms seeds were gathered from trees grown in the past Forever 10 0.0711 0.075 8,000 0.0657 0.0672 Forest Projects. But since some are not matured enough to 7,012 6,782 8 0.060 5,941 bear fruit yet, there were only few varieties gathered. To 7.06 6,000 6.20 increase the number of variety, some seeds were 5.62 6 0.025 purchased outside. 4,000 4 0.030 The nursery can house more than 8,000 seedlings. It has 2 0.015 2,000 an area for germination and an area for transplanting seedlings from germination box into seedling bags. As of in the germination boxes waiting to be germinated or 0 0 0 this writing, the nursery contains around 3,000 seedlings transferred. And more seeds are still being gathered from 2011 2012 2013 2011 2012 2013 that are ready for planting. There are still some seedlings the Forever Forests.

16 Sustainability Report 2013 Yokohama Tire Philippines, Inc. 17 Initiatives towards Environmental Management

ENVIRONMENTAL ACTIVITIES ENERGY CONSERVATION ACTIVITIES

1 Energy Conservation Month EMD ENERCON Activities and ENERCON Activity Sheet The Energy Conservation Month was reinvented in 2013. To offset the effect of continuous low production in Y2012, 4. Steam Audit conducted by the steam authorities (the makers of Instead of February just like the previous years, the Energy Engineering and Maintenance Department (EMD) continued to steam traps) Conservation Month was moved to May to make room for strengthen YTPI's ENERCON ACTIVITIES in Y2013. 5. Monthly Patrol during Stocktaking, to identify energy waste during more preparations and activities with the theme: “Energy days with no operation One of the highlights of ENERCON activities in Y2013 are the Conservation: An Action to a Low Carbon Society and All ENERCON activities are still on-going and are continuously several ENERCON Audits and Patrols which became the source being implemented and expounded on all applicable areas and Sustainable Earth”. of most ENERCON activities that EMD implemented: machines in YTPI. Each ENERCON activity is summarized in One of the activities is Poster and Slogan Making Contest 1. Mr. Yasuda's audit (a YRC Enercon expert) one sheet called the ENERCON Activity Sheets. which aimed to tap the artistic side of the employees and at st 3 ISO 14001:2004 1 Surveillance Audit 2. YRC Enercon audit with Mr. Hatori & Mr. Koseki (from Shinshiro and The following are some of the ENERCON Activity Sheets for the same know their stand in Energy Conservation. The Mishima plants respectively) Last September 24-27, 2013, YTPI's compliance to ISO Y2013 concentrated on the main activities of EMD winning entry was used as the centrepiece of the tarpaulin 3. 14001:2004 was checked through a surveillance audit Monthly leak patrols conducted by process owners ENERCON: design for EnerCon Month. conducted by TUV Nord Philippines, Inc. After submission Elimination of idle running The main event in the EnerCon Month is the Jingle Making of the corrective action for Objective The main objective is to automatically stop or turn-off the machine Evidence Expected Savings Contest. There were eight well-written and composed t h e t w o c i t e d m i n o r when idle or no operation. This is a priority as it can generate energy entries which were performed live last May 2, 2013. The nonconformities, YTPI was savings without the need for investment or extra expense. Savings in Quantity winning entry “Hey! Are you ready?” is currently being able to maintain its ISO Findings UF #6 hydraulic pump motor are continuously running even without 8,212 kWh tire in process at automatic mode. played all around the plant at 12nn to promote energy 14001:2004 Certificate Activity Modify sequence program in such a way that the hydraulic pump conservation and encourage the participation of everyone. w h i c h i s v a l i d u n t i l Savings in Amount motor will stop when no tire in process after 1 minute. November 11, 2015. Php 53,381 Other activities for EnerCon Month included energy patrol, Date July 2013 steam leak findings and correction by supervisors, and 4 Other CSR Activities Installation of inverters on continuously running motors energy audits. As part of its commitment to work together with the Objective By reducing the rotation speed of the motor to a certain degree, Evidence Expected Savings community for the preservation of the environment, YTPI is energy consumption is achieved without affecting the motor's normal function & operation. A 5Hz reduction on the frequency to reduce Savings in Quantity open to partnerships with schools and other units to hold speed can generate a 20% savings on energy consumption. 36,792 kWh various environmental activities. Findings Machine running at full voltage during normal operation and at idle condition within 24 hrs. at Side Extruder Existing (SDA1) TCU. Since its launching in 2011, Waste Management Orientation Savings in Amount Activity Install inverter for Side Extruder Existing (SDA1) TCU to reduce the for Students has now become one of the most sought after power consumption during normal operation and at idle condition. Php 239,148 activities of schools since this would help them manage Date March 2013 their wastes properly. At the end of every orientation, YTPI will donate trash bins which the schools may use in applying Installation of energy-saving and energy efficient fixtures and devices. what they have learned. Three lucky schools were chosen Objective Conversion of ordinary fluorescent lamp to LED lamp is an example as Evidence Expected Savings it can instantly generate a 40% savings on power consumption. An 2 this year to be granted with this program. Environment Month increase of 80% in brightness and illumination is an added advantage. Once again, YTPI joined the whole world in the observation Lighting improvement activities were not only focused on LED Savings in Quantity of Environment Month 2013 last June. Various activities and replacement, but also on lowering the heights of the lamps. 189,034 kWh events were done to promote environmental protection and Installation of separate switches to turn-off some area were also BEFORE preservation to the employees. implemented. Findings Phase 3 J-line area was installed with Fluorescent lamps and Hi- EMS Re-orientation was launched. This series of Frequency Inverter ballast Savings in Amount orientations aims to refresh the knowledge of employees in Activity Replace/convert Fluorescent Lamps to LED Tubes & remove the Hi- Php 1,228,725 AFTER ISO 14001:2004 and the environment in general. Target Frequency Inverter ballast participants are those who have been in the company for Date December 2013 more than 5 years. This activity is still on-going and will Waste Management Orientation Regular checking of steam traps continue until all employees are re-oriented. Evidence Expected Savings School Beneficiary Date No. of Students Objective A defective steam trap is equivalent to a continuous steam leak. By checking regularly, "passing" steam trap (leaking internally) are BEFORE Another event is the Environment Quiz Bee. This activity Mabiga Elementary March 4 100 students identified immediately; thus, continuous steam leak is prevented. aims to strengthen employees' awareness in ISO 14001 and School Machines without steam traps are equivalent to leaking steam traps, so another activity conducted is the installation of steam traps on Savings in Quantity the Environmental Management System of YTPI in general. Duquit Elementary June 28 100 students several machines without steam traps. 9,299.22 And now on its third year, the ZERO Waste Marathon was School Findings Boiler area steam header defective steam trap liter per year again held to test the knowledge of YTPI members in proper Activity Replacement of defective steam trap to minimize fuel consumption in Lourdes Northwest October 7 100 students terms of boiler operation. waste management and general knowledge on environment Elementary School Date March-December 2013 AFTER through a series of fun tasks and puzzles.

18 Sustainability Report 2013 Yokohama Tire Philippines, Inc. 19 Initiatives towards Community Development

SUPPORTING THE SYSTEM OF CSR AND ENVIRONMENTAL AFFAIRS We established a system to plan and examine important social responsibility issues with the ultimate goal to build a trusted identity as a contributing member of the global community. Our community relations and environmental promotion system is supported by the CSR and Business Operations 4 Outreach Program Department for consistent and advanced practices in all level of operations. .Mission:.Make YTPI and its employees reach-out to Munting Tahanan ng Nazareth. A small gathering was neighbor communities in the spirit of the holidays. prepared together with gifts such as medicines, clothes, ...Assigment:.To pave way to celebrate holidays for the slippers, grocery items, rice, etc. were given to these 1 Disaster Response underprivileged institutions by providing gifts based on their institutions. immediate and operational needs, and to promote the spirit Mission:.Provide assistance to calamity-stricken For the Typhoon Yolanda victims, YTPI donated a total of sharing and volunteerism to employees. communities. amount of PHP700,000.00 to Philippine Red Cross and ...Assigment:.To respond to the needs of the communities World Vision (PHP350,000.00/each) to assist in their relief Activity: YTPI managers together with LMC and CSR in the Visayas region severely affected by natural disasters, efforts in Eastern Visayas. Savings from all the company reached-out to neighbouring institutions for the spirit of we were able to raise funds and personally turnover the Christmas events/activities that were laid-off and donated holiday season last December 16-18, 2013 to Cancer gathered resources to non-government organizations as to Yolanda victims. Another “Show you Care, Give a Share” Warriors Foundation, Haven for Women and Children, and donation to the calamity victims. employee donation drive was led, gathering a total amount Institution Location Date Beneficieries Background Donated Items of PHP94, 681.35 which is donated to Philippine Red Cross Activity: For the benefit of the victims of earthquake in Cancer Warriors Foundation Lubao Pamp. Dec. 16 53 children diagnosed medicines & rice last December 10, 2013. Other Yokohama subsidiaries also with cancer Cebu-Bohol, YRC, YTSPI and YTPI donated a total amount donated to PRC for the typhoon Yolanda victims. Haven for Women and Children Magalang, Pamp. Dec. 17 85 rehabilitation to abuse electric fan, clothes of PHP800,000.00 through Phil. Red Cross (PRC) last Nov. and exploited girls slippers, grocries & rice 5, 2013. YTPI also led an employee donation drive called Munting Tahanan ng Nazareth Mabalacat, Pamp. Dec. 18 42 children with disabilities electric fan, grocies & “Show you Care, Give a Share” where they gathered a total and special needs rice amount of PHP68,024.43 and was donated to PRC last November 15, 2013. 5 Scholarship Program Mission:.Provide access to quality education to With Tarlac State University (TSU). YTPI together with underprivileged yet deserving students for them to uplift Tarlac State University (TSU)signed a Memorandum of 2 Toilet Construction their lives. Agreement (MOA) to formalize Scholarship Program last May 17, 2013. Last August 13, 2013, YTPI and TSU Mission:.Provide a safe and conducive learning .Assigment:.To give financial support by providing the Mabalacat, Pampanga to benefit 984 pupils last November formally welcomed 5 new engineering students to be part of environment through improvisation of facilities for the scholars' full tuition & miscellaneous fees, book allowance 12, 2013. the Scholarship Program. benefit of the students. and monthly allowance. Through building partnerships with the academe, YTPI also offer possible employment for the .Assigment:.To cater to the needs of children in the engineering and information technology scholars who have community by providing the school with better facilities that successfully completed their course requirements under may be used by all members, thereby promoting a clean the scholarship program and showed exemplary environment. performance as students. Acticity: YTPI turned over a 3-seater toilet complete with Activity:.With St. Louis University (SLU). YTPI signed a a hand-wash station to Duquit Elementary School, Memorandum of Agreement (MOA) to formalize Scholarship Program last September 13, 2013. In this partnership, YTPI committed 6 scholarship slots to 3 Feeding Program Engineering students from SLU. Mission:.Contribute to social welfare by addressing the that they used throughout the program. Before the start of needs of undernourished children. the program, the students underwent deworming facilitated 6 Medical Mission ...Assigment:.To help cater to nutritional needs of children by the school. The results as of December 9, 2013 showed in the community by providing them access to nutritious that 96% of 50 children are now considered NORMAL Mission:.Contribute to Health and Safety of the foods and to help improve the status of malnutrition among weight. communities by sharing medical resources from YTPI. schools. Assigment:.To provide the community access to medical Activity:.YTPI launched a Feeding Program in check-up and basic medicinal supply so as to pursue coordination with Angeles Nutrition Action office to 53 medical attention to the health concerns of the community. students that were identified as “undernourished”or “low Activity:.YTPI in cooperation w/ Unilab and EastWest weight” at Pineda Gutierrez Elementary School. This HealthCare Inc. held two Medical Missions for 2013: A total program ran for 60 days (September 4 – Dececember 9, of 500 residents benefitted from these events as they were Location Date Beneficieries 2013), providing them with hot meals as well as food provided with free medical consultation and medicines. Brgy. Tabun, Angeles City April 27 200 residents supplements. Children were also provided with utensil kits Brgy. Atlubola, Mabalacat November 13 300 residents

20 Sustainability Report 2013 Yokohama Tire Philippines, Inc. 21 Initiatives towards Safety and Health in the Workplace

SAFETY PERFORMANCE FOR THE YEAR 2013 HEALTH THROUGH AWARENESS Yokohama Tire Philippines, Inc. recognizes the importance of preserving human life: that our employees are our With the continuing efforts of Yokohama Tire Philippines Inc. (YTPI) to promote healthy lifestyle, the Medical most important assets. To this end, Safety Management Section (SMS) together with the Top Management and Team has introduced a “Meat-Free Day”, a once-in-a-week program which aims to reduce the risk of having heart- Safety Core Team strive to achieve zero major incidents through our various activities. related diseases and help to curb obesity. As an alternative, fish and vegetables rich in vitamins and minerals are now being served by the canteen concessionaires. Due to its positive effects, this has been embraced by the 1 Risk Assessment Training 4 25th National Fire Brigade employees as part of their regular balanced diet throughout the year. This 4-hour training course is administered 3 times a week. Competition and The 8th Internal SMS was given the first Risk Assessment training conducted Fire Brigade Competition by YRC Safety Department Safety Secretariat, Mr. Alexey Meat Free Day Annual Medical Examination National Fire Brigade Competition was held last March 2, Kindyshenko. On the other hand, our YTPI Champion, Mr. February 1, 2013 2013 at Mehan Garden, City of Manila. YTPI Team was Schedule: Schedule: June 2013 Ermy De Jesus has both conducted the training for all Safety (both Canteen 1 and 2) elevated in Class A Category following the team's last year Core Team members as well as all Supervisors, achieving being the Champion in Class-B Category. Likewise, Internal Continous program at 100% attendance and participation. Mr. De Jesus also has Status: Attendance: 99% compliance Fire Brigade was held last April 26, 2013. Champion came present started conducting the training for team members from QAT (Quality Assurance and Technology and achieving 32.59 % attendance and participation. Lecture on Managing Stress in the Workplace Flu Vaccination Inspection Section); followed by Curing and Mold Section at Second Place; and Third Place is Cutting and Bead Section. Schedule: February 27, 2013 Schedule: April 2013 8th Internal Fire Brigade Competition 25th National Fire Brigade Competition

Attendance: 25 employees Attendance: 1,909 injected

Lecture on Healthy Diet Zumba and Body Conditioning August and September Schedule: March 1, 2013 Schedule: 2013

2 Occupational Safety and Health Attendance: 30 employees Attendance: 245 employees (15 sessions) Procedures Hard copies of these procedures provided on each section Lecture on Hepa B and Screening Ergonomics Lecture and different locations in the plants were already replaced Schedule: April, July and Schedule: July and September 2013 into soft copies and can be accessed easily in the Central August 2013 File. This project has saved the company 50% of paper 105 employees (Lecture) Attendance: Attendance: 53 employees consumption for the year 2013. 5 OHSAS 18001:2007 Re-Certification 336 employees (Screening) Re-certification audit is held last September 24-27, 2013, Drug Test for a Drug Free Workplace FBS and Bone Density Screening with 3 Minor Non Conformities. Corrective Actions were submitted and accepted last October 24, 2013. The New Schedule: May 2013 Schedule: December 2013 OHSAS 18001:2007 Certificate was released to YTPI by the external auditors, TUV Nord. Attendance: 100% compliance Attendance: 180 employees

Going meatless is not enough to be in a good physical shape More than 1900 employees were also given anti-flu 3 NT Cutter-Free Plant Activity so YTPI offered calorie-burning activites such as Zumba (a vaccination to prevent and alleviate the common disease. Based on the Safety team evaluation, NT Cutters Latin-inspired aerobics), body combat (combination of it is found out that there is a higher karate, boxing, taekwondo, tai chi and muay thai), and body Screening tests such as HBV, Fasting Blood Sugar (FBS) and risk of incurring incident with the use conditioning (use of body weight for core conditioning and Bone Density were conducted. The graph below shows the of an NT-Cutter. SMS team together 6 Safety Gate muscle strength). positive results of the programs implemented for the year 2013: with the Top Management searched The Safety Gate is intended to Lectures were also provided on healthy diet, managing for a better alternative to eliminate increase the safety-mindedness 2012 vs. 2013 Data Comparison stress in the workplace, ergonomics and awareness about the hazard of being cut. Almost 99% of every YTPI employee. This is Percentage 2012 2013 Hepatitis B, a viral infection which attacks the liver and can 20 of NT Cutters were replaced with New Cutters to remind everyone that once a 18.50% 17.38% cause both acute and chronic disease. It is caused by shorter blades. The only remaining person passes by the Safety activity that uses NT Cutter is the Hepatitis-B Virus (HBV) which spreads through sexual 15 Gate, he will be treated as a 12.06% Blow Point Checking, which is contact, sharing of needles and shaves, blood transfusions 1 3 6 “Safe Person”. The BASIC 1 3 . . % D 8.53% 4 9 10 . 3

and perinatal factors. Study shows that HBV is about 100 4 6 7 % D

currently considering another type of % D % D SAFETY RULES and the TEN e c r

times more infectious than Human Immunodeficiency Virus e e e e

a 5.01%

cutter to replace the longer blades. a c a

4.57% c c SAFE MAN RULES are posted on 4% r s 5 r e r e e e

also known as (HIV). 3% a a a s s s e e There are no NT Cutter-related incidents on all months of the Safety Gate and must be e 2013. strictly followed at all times. 0 Respiratory Obese Overweight Hypertension

22 Sustainability Report 2013 Yokohama Tire Philippines, Inc. 23 Initiatives towards Manpower Development Corporate Culture MANPOWER SKILLS LEVEL-UP Trainings and Seminars Behind our company's success are its people. We provide challenging opportunities to them by providing a dynamic Human Capital is considered to be the company's greatest asset. Investing in the development of each employee's work environment and career advancement opportunities through trainings and seminars. knowledge, skills, and attitudes (KSA) is a clear indicator of the Top Management's support and contribution to the welfare of its people. 1 Team Buidling Module 2:Strengthening 6 EMS Legal Requirements Team Work through Values To familiarize the participants on the Strenghten teamwork and create Environmental Management System Training Attendance Report a healthy climate through (EMS) legal requirements and to No. of Empyees by Position and Type of Traning Honesty, Respect, Trust and Self- update them with the latest and/or Employee Position No. of Employees / Year discipline. additional legal requirements. Internal Training External Training Total Facilitator: YTPI HRM-Training and Development Facilitator: Roy Alminanza (TUV Rheinland Philippines, Inc.) Team Members/ TeamLearders 2539 291 2,830 Date of Training: November 29, 2013 Date of Training: February 27, 2013 No. of Sessions: 1 No. of Sessions: 1 Participants: 63 attendees Participants: 30 attendees Supervisors / SeniorSupervisors 831 483 1,314 2 Positive Discipline in the Workplace 7 ISO/TS 16949:2009 Awareness Seminar Section Managers / Department Managers 9 72 81 To understand conflict generation To obtain a working knowledge of the ISO/TS 16949 : 2009 and and learn the different ways for be equipped with the valuable information necessary to Total 3,379 846 4,225 resolution. implement its requirements. To be able to communicate Facilitator: TUV Nord Philippines Inc. properly and have a positive Date of Training: July 4, 2013 No. of Sessions: 1 Average Hours of Training per Average Hours of Training per Employee by Position discipline and Counselling, Participants: 30 attendees Employee by Position and Type of Training (Internal and External) Coaching and Mentoring. Employee Position Training Hours Employee Position Training Hours / Employee / Year Facilitator: Dean Jorge Sibal and Professor Ed Sison 8 I S O 1 9 0 1 1 : 2 0 1 1 I n t e rnal Auditing Employee / Year Internal Training Internal Training (CLEARED Inc.) Date of Training: March 9, 2013 Course (ISO/TS 16949:2009) Team Members/ Team 38 Team Members/ Team 7 15 No. of Sessions: 6 To develop Internal Auditors who can competently assess the Learders Learders Participants: 142 attendees effective implementation of the Organization's Automotive Supervisors / Senior 40 Supervisors / Senior 8 18 Quality Management System. Supervisors Supervisors 3 Employee Discipline and Grievance Facilitator: TUV Nord Philippines Inc. Management for SM's and DM's Date of Training: July 16-17, 2013 Section Managers / 16 Section Managers / 0 13 No. of Sessions: 1 Department Managers Department Managers To learn the prinicples of Employee Discipline and Grievance Participants: 30 attendees Management in the Workplace.

Training programs being conducted/facilitated by external training provider whether in-house or outside Facilitator: Atty. Josephus Jimenez 9 Standard First Aid and Basic Life company qualified trainers to employees either in-house company premises shall be considered as external Date of Training: October 24, 2013 Support Training or outside the company as categorized shall be training. No. of Sessions: 2 To enable participants to practice Participants: 70 attendees standard First Aid and CPR as well as considered as internal training. Training conducted by to develop and enhance the skills and Average Hours of Training per Employee by Classification of 4 OHSAS Legal Requirements and Updates knowledge in administering first aid to any injured/ill person in emergency Training (Functional and Behavioral) To familiarize the participants on the situations. Employee Position Training Hours / Employee / Year legal aspects of the Occupational Facilitator: Philippine Red Cross Safety and Health Management Functional Behavioral Organizational Date of Training: March 11-15, 2013 System. Team Members/ Team Learders 18 2 18 No. of Sessions: 3 Participants: 130 attendees Facilitator: TUV Rheinland Philippines Inc. Supervisors / Senior Supervisors 19 4 17 Date of Training: April 5, 2013 10 Emergency Preparedness Training No. of Sessions: 1 Participants can explain the role of every EPR Members and Participants: 28 attendees Section Managers / Department Managers 13 0 3 employees in preparing for Emergency, identify various 5 OHSAS 18001 Internal Auditing Course emergency planning and response elements. Discuss the disaster / emergency procedures for specific emergencies and Behavioral training are soft skill trainings focused on skill, generally acquired thru education or some form of To develop internal auditors who can competently assess the to demonstrate the procedures in responding to different effective implementation of the organization's Management behavior, abilities, attitude, habits, personality traits, studies. Organizational training includes training to emergencies. Systems. personal attributes, and people skill, while Functional is support and meet the strategic business objectives set by Facilitator: Synerquest Management Consultancy Services Inc. centered on technical skills, specific area of expertise in the company and its organizational mission and vision Facilitator: TUV Nord Philippines Inc. Date of Training: March 6, 2013 Date of Training: September 12-13, 2013 process, technology, functional area as a knowledge or statement. No. of Sessions: 1 No. of Sessions: 2 Participants: 25 attendees Participants: 74 attendees

24 Sustainability Report 2013 Yokohama Tire Philippines, Inc. 25 Initiatives towards Corporate Culture Our Stakeholders YTPI-CSR Report Committee Following the incorporation of our CSR in our Steering Committee LABOR-MANAGEMENT COUNCIL: BUILDING organizational structure, we organized the social PARTNERSHIP THROUGH SHARED RESPONSIBILITIES responsibility issues we need to address in our daily Advisers: Tadashi Suzuki President and CEO Yokohama Tire Philippines, Inc. – Labor Management Council (YTPI-LMC) gears towards developing a stronger and future activities. This defines the plan of activities Masahiro Yuki corporate culture by facilitating different employee-centered activities. that our company will undertake and determine its Executive Vice-President impact on sustainability. Admin Division Manager Employee participation and support indicate the success of each company event. This also shows that the top Angelina Casasola management values its people by engaging them in company-wide affairs. As a result, these activities uplift the Customers VP-CSR and Business Operations morale and increase commitment of every employee. We value the interests of our customers by focusing our Department Manager efforts on providing their exacting needs and high Allan Lavarias Annual Company-Wide Events standards. We believe that by putting value on the VP-QA and Technology products we produce is a manifestation of our Department Manager 1 Sportsfest 3 Family Day dedication in satisfying our customers and our drive in Geraldine Bautista This activity aims to narrow the gap, build-up team work, As YTPI also considers the importance of the family as the putting their interests first on our list. Human Resource Management 1 and boost camaraderie between employees through sports. basic foundation of each community, the company always Section Manager pushes every year to celebrate the Family Day. YTPI's Family Local Communities Day is held last Aug. 21-22, 2013 at Villa Alfredo's Resort, Through partnerships with the local communities, we Members: Marilou Peniano Reynante Legion San Fernando, Pampanga. For most employees, this is also are able to execute and accomplish projects that bear Corporate Planning Environment Management an opportunity to enjoy quality time with their loved ones. significant impact on their own development. By Department Manager Section Manager working hand-in-hand, we can create a sustainable Reynaldo Mandocdoc Jeffrey Policarpio society that cares for nature and people. Corporate Planning Quality Assurance Section Asst. Department Manager Manager Employees Adelo Fenomeno Carol Panergo 2 Company Outing We highly encourage employee participation in our Engineering and Maintenance Purchasing Section Manager Department Manager The company considers the well- activities. Their involvement promotes a culture of Egelberto Dolo volunteerism which is a demonstration of CSR's being and enjoyment of each Rodel Dural Human Resource Management 2 effectiveness and proactivity. Manufacturing 1 Section Managerer employee. Going out-of-town Department Manager enables each everyone to de- 4 Christmas Party Liza Arrieta Business Partners and Suppliers Rommel Panergo Safety Management stress, have a sense of YTPI concluded the year 2013 with a plant-wide Christmas We continuously communicate our activities with our Manufacturing 2 Section Manager relaxation, and wind down at the celebration headed by the LMC last December 23, 2013. Department Manager Business Partners to encourage them in following our Savings from all the company Christmas events beach together with their co- initiatives and to inspire them to support our CSR workers. (PHP700,000.00) were also donated to Phil. Red Cross activities through active participation or voluntary (PRC) and World Vision last Dec. 26, 2013, to assist in their donation. Technical Working Group (TWG) relief operations for typhoon Yolanda victims. Leader: Joanne Pangilinan Public Relations and General Services About this Report Section Manager We are pleased to release the Annual Sustainability Members: Patrick Pineda Report 2013. We take pride in this year with notable Public Relations and Gen. Services Section Raliegh Lugtu milestones and initiatives that are being carried on Vien Pineda based on our CSR framework of running a good Environment Management Section Rochelle Parales business that is committed to contribute to social LMC Plant-wide Elections Bloodletting Program Eden Canlas Cost Planning Section development and environmental protection. YTPI's Labor and Management Council (LMC) deliberated In partnership with the Philippine Red Cross (PRC), LMC Rolly Gantan Quality Assurance Section its new set of officers after the plant-wide election held last encourages YTPI employees to donate blood for potential Every effort has been taken to ensure the accuracy of Christy David Safety Management Section October 2-4, 2013. The newly-elected LMC officers beneficiaries, promoting volunteerism. Bloodletting its contents and all the information herein. Should you Mary Sharon San Juan assumed their respective positions beginning January program is conducted three times a year: the actual have concerns in this report, please let me know Aimee Sapnu Human Resource Management 1 Section 2014. number of participants in every bloodletting activity has Essel Macaspac 2013-2014 LMC Officers exceeded the number target for 2013. through the numbers below. February Blood Letting Christian Recio Human Resource Management 2 Section Target Actual Angelina C. Casasola Ma. Teresita Nantes Purchasing Section Vice-President Phillip Gamboa Ma. Lourdes Cajes Michael Palima Mechanical Maintenance Section LMC Chairman LMC Vice-Chairwoman 45 53 donors donors CSR & Business Operations Department Manager Joseph Maniti Mixing Process - Manufacturing 1 June Blood Letting Email: [email protected] Nimbrad Jacinto Curing Process - Manufacturing 2 Target Actual Tel: +63(45) 599-3603 Sonny Guzman James Sanchez Giovanni Trinidad Phillip Gamboa Labor Management Council CCTB Committee IBW Committee YPS Committee Fax: +63(45) 599-3613 Head Head Head donor45s donor63s

26 Sustainability Report 2013 Yokohama Tire Philippines, Inc. 27 Environment friendly, healthy and safe approach to reporting

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Lay-out Artist: Patrick P. Pineda