NAGASE & CO., LTD. 20 Identify 20 OurValue Integrated Report Integrated Report 2020 Identify / Develop / Expand Develop
Osaka Head Office: 1-1-17, Shinmachi, Nishi-ku, Osaka City, Osaka 550-8668, Japan Tel: (81) 6-6535-2114
Tokyo Head Office: 5-1, Nihonbashi-Kobunacho, Chuo-ku, Tokyo 103-8355, Japan Tel: (81) 3-3665-3021
Nagoya Branch Office: 3-14-18, Marunouchi, Naka-ku, Nagoya City, Expand Aichi 460-8560, Japan Tel: (81) 52-963-5615
https://www.nagase.co.jp/english/
Printed in Japan Contents NAGASE’s Value Proposition
Identify ������������������������������������������������������������������������������������������������� 2 Our Value Develop ������������������������������������������������������������������������������������������������ 4 Expand ������������������������������������������������������������������������������������������������� 6 Driving Our Value ��������������������������������������������������������������������������������� 8 Message from Management
CEO Message ��������������������������������������������������������������������������������������� 10 ››› 1 CFO Message ��������������������������������������������������������������������������������������� 16 Our Value Creation Story Our Value Story of the NAGASE Group’s Value Proposition ���������������������������������� 20 About this Report Story for 1. Our Philosophy ������������������������������������������������������������������������������� 22 The NAGASE Group has created this integrated 2. Our Business Model ����������������������������������������������������������������������� 24 Value report to help our diverse stakeholders better Identify ››› Develop ››› Expand 3. Our Roadmap for Growth �������������������������������������������������������������� 26 understand the Group’s wide-ranging business fields and business activities, as well as its Proposition [Feature] New Developments in the Food Ingredients Business ����� 28 unique value creation process. Going forward, [Feature] Initiatives for Next-Generation Businesses ���������������������� 32 we will continue to improve this report as a communication tool for conveying the Group’s 4. Our Sustainability Management ����������������������������������������������������� 36 corporate value enhancement activities in an ››› 20 5. Our Destination ������������������������������������������������������������������������������ 37 easy to understand manner. We identify new businesses that nobody has recognized before, develop them to become businesses Management & Sustainability | Reference Guidelines | · International Integrated Reporting Council creating new value, expand them throughout the Our Board �������������������������������������������������������������������������������������������� 38 · International Integrated Reporting Framework Management & Interview with the Outside Directors ��������������������������������������������������� 40 · Ministry of Economy, Trade and Industry’s world and deliver value to people. Guidance for Collaborative Value Creation Sustainability Corporate Governance ������������������������������������������������������������������������� 42 Compliance ������������������������������������������������������������������������������������������ 46 Risk Management & Responsible Supply Chains ��������������������������������� 48
Creating Environmental Value �������������������������������������������������������������� 50 Trade and Industry’s [Feature] Working to Solve Environmental Problems ��������������������� 51 Guidance “Identify, Develop and Expand” Innovation �������������������������������������������������������������������������������������������� 52 | Period Covered | Creating Social Value ��������������������������������������������������������������������������� 54 April 2019–March 2020 (FY2019). Social Contribution Activities ��������������������������������������������������������������� 56 Some information after March 2020 is also ››› 38 [Feature] Sustainability of Our Manufacturing Business ����������������� 57 included. The NAGASE Group’s “value proposition” comes from this process and is enhanced by it. | Organizations Covered | Business Portfolio We will continue to value this philosophy NAGASE & CO., LTD. and the NAGASE Group Businesses �������������������������������������������������������������������������������������������� 58 and provide value to society. Business Functional Materials ���������������������������������������������������������������������������� 60 Positioning of this Report Portfolio Advanced Materials & Processing �������������������������������������������������������� 62 Electronics �������������������������������������������������������������������������������������������� 64 This integrated report organizes information on Mobility & Energy �������������������������������������������������������������������������������� 66 Management & Sustainability and Business, Products & Services based on “integrated Life & Healthcare ��������������������������������������������������������������������������������� 68 thinking.” Please refer to NAGASE’s website for more detailed information. ››› 58 Regional Strategy ��������������������������������������������������������������������������������� 70
Management & Business, Products Financial and Corporate Information Sustainability & Services
11-Year Financial Highlights ����������������������������������������������������������������� 72 NAGASE & CO., LTD. website Data Section Financial Information ��������������������������������������������������������������������������� 74 Comprehensive information Consolidated Subsidiaries, Affiliates and Offices ���������������������������������� 114 History of the NAGASE Group �������������������������������������������������������������� 118 Integrated report 120 Investor Information ���������������������������������������������������������������������������� Information based on integrated thinking ››› 72 Corporate Information ������������������������������������������������������������������������� 121 (financial and non-financial)
Forward-Looking Statements Non-historic information contained in this integrated report related to the NAGASE Group revenue and profit plans, strategies, assumptions, etc. are forward-looking statements that entail elements of risk and uncertainty. Actual earnings may differ significantly from forecasts due to changes in these elements. Accordingly, the reader is cautioned to refrain from placing undue reliance on such future forecasts contained in this document. Elements that could impact earnings results are not necessarily limited to those explicitly noted in this document. NAGASE’s Value Proposition Our Value
We want to create a presence that prompts business partners to say, “Let’s first ask NAGASE.” Since our founding, accumulated involvement in solving problems in a variety of areas has led to an ability to identify new Enthusiasm for Solving Issues Enables Us to “Identify” technologies and businesses. The NAGASE Group will continue to “identify” what times require. Identify Identify ››› Develop ››› Expand
We Have Identified Identifying New, History Technologies Needed Now & Future Next-Generation Businesses for the Future Now and in the Future Our Value Story for Value Proposition Early Days of Building Relationships with Taking on the Challenges of Next-Generation Foreign Manufacturers ICT Business Pursuing the possibilities of chemicals Beyond 5G
The NAGASE Group in its early days rapidly resins with electrical insulation properties. This At a time when attention is focused on the shift brought by 6G (6th generation mobile commu- Management& Sustainability sought partnerships with powerful overseas would lead to the development of what is to 5G (5th generation mobile communication nication system expected to be realized by manufacturers to pursue the possibilities of today’s Electronics Business. system), which features ultra-high speed, large around 2027) through M&A and focusing all chemicals. In 1900, we started trading with We also turned our attention to cinemato- capacity, ultra-low latency and multiple simulta- our abilities on core technology development. Basel Chemical Co. of Switzerland (at that time graphic film, taking into account the develop- neous connections, the NAGASE Group believes The next-generation information and called Ciba), and opened an office in Lyon in ment of the visual image culture, and started its fundamental technologies can fulfill an communications business aims for the realiza- 1901. This was an extremely advanced move trading with Eastman Kodak Co. of the United important role for development of equipment tion of smart cities. This will contribute to “a for a Japanese company at the time. Trade States in 1923. Technology used to develop the and devices related to 5G, and we are moving sustainable world where people live with Business Portfolio expanded with Ciba Specialty Chemicals, and imported film would form the technological ahead on development. We are also taking into peace of mind.”
in 1951, we started to import and sell epoxy foundation of the semiconductor business. account the kind of transition that will be ▸ See P.32–33, “Feature/Initiatives for Next-Generation Eastman Kodak’s head office at about the time trading Businesses Case 1” started with NAGASE Corporate Information Identifying the Possibilities of Financial and Create the Core of Future Business Engineering Plastics New Value Creation (NVC) Office Partnership with General Electric
The NAGASE Group concluded an agency At that time, GE was handling engineering The mission of the NVC Office set up in Of the initiatives the NVC Office has con- agreement with General Electric Co. (GE) of plastics in the United States and searching for a April 2017 is to create the core of the ducted over three years, some can actually the United States in 1968. At the time, poly- partner in Japan. Following an exhaustive inves- NAGASE Group’s future business. As its connect to specific services. One example of this vinyl chloride (PVC), polyethylene, polystyrene tigation, GE designated the NAGASE Group as name suggests, the office advances the is Materials Informatics (MI) being jointly devel- and other general-purpose resins were the its most reliable partner in Japan and this led to NAGASE Group’s innovation and aims to oped with IBM Corp. This a service for develop- General Electric mainstream plastics, but NAGASE had the idea the conclusion of the agency agreement. create new value that will form the core of ing new materials that combines the latest data that highly functional engineering plastics Doing business with GE caused NAGASE to future business through cross-sectional processing technologies with materials science, were indispensable for development of soar in popularity within the industry and later collaboration among business divisions. and we are preparing for market launch. Japanese industry. made a significant contribution to expanding bases in Asia. ▸ See P.34–35, “Feature/Initiatives for Next-Generation Businesses Case 2”
2 NAGASE Group Integrated Report 2020 3 NAGASE’s Value Proposition Our Value
NAGASE presence is not just to bring products in and sell them, but to add value in a way that only NAGASE can. The Group’s Competency Make The NAGASE Group is a trading company that also derives strength from the cutting edge and R&D competence of its Staying a Step Ahead “Development” Come True group manufacturers. The new business we find, we grow into business that creates new value. Those activities form Identify ››› Develop ››› Expand Develop the lineup for NAGASE’s “Development.”
Technological Capability Pursuing Business Output to Create New Value R&D through Various Perspectives Manufacturing Research & Development from Identified Businesses and R&D Competency Our Value Story for Value Proposition Combining Biotechnological Expertise with Core Technologies × Creative Capabilities Nagase ChemteX Corporation Frontier Technologies Nagase R&D Center
Nagase ChemteX Corporation is a core manu- We, in close collaboration with members of Satoru Fujii The Nagase R&D Center was established in mass produced its proprietary fermentation Xiaoli Liu Management& Sustainability President and CEO General Manager facturing subsidiary of the NAGASE Group and NAGASE, respond to customers’ needs with Nagase ChemteX Corporation 1990 with the objective of combining the technology for actinomycetes and plans to Nagase R&D Center possesses creative technologies in a variety of speed and at the same time provide aware- Group’s expertise and promoting integrated soon launch the Nagase ChemteX product areas including electronics and biotechnology. ness. In the biomaterial field we focus on, we corporate activities from development and Trehangelin, which is expected to have anti- In business areas such as functional resins developed a technology to remove or reduce production through to sales. Since 2013, we aging effects. including epoxy, photolithography materials for endotoxins harmful to the body from various have focused on R&D in the biotechnology field Moreover, a breakthrough has been semiconductors, functional chemicals like materials. Foreseeing increased demand in and have established a research system for achieved with the so-called longevity vitamin conductive coatings, and bio-chemicals with such fields as medical devices, we are absorb- studies into molecular biology, applied micro ergothioneine, which is expected to have Business Portfolio enzymes for food applications, world-first ing a wide array of customer needs and biology, genetic engineering, protein engineer- applications in foods, cosmetics and pharma- Established: 1970 Established: 1990 technologies and technologies with top shares enhancing our product lineup. Binding our Production and development ing, bioinformatics, fermentation engineering, ceuticals. Using our strength of microbial in the Japanese market support the Group’s strengths in the materials and technologies we bases: Japan (3), China (2), metabolic engineering and more. The center fermentation and our dedication to the envi- Europe (1), Americas (1) innovations. We proactively collaborate with possess with ideas created through feedback Number of employees: 581 does not limit itself to supporting Group ronmental friendliness, we will continue to universities, research institutions and partner from customers enables us to develop business companies in product development, but also move forward with the aim of mass companies, and strive to introduce new ele- with value, grown from technology. creates its own projects, having successfully production. Corporate Information mental technologies. Financial and Innovation Created with Providing Customers with a Place for Customers Open Innovation Nagase ChemteX Business The Nagase ChemteX Process innovation Functional Resins Precision Process Functional Chemicals Nagase Application Workshop (NAW) Bio Chemicals Business Center (NPiC), established in September 2019, Business Materials Business Business oversees the application lab, which can Transparent conductive coating Food enzymes, industrial enzymes, Epoxy adhesives, encapsulants Resists, developer, etchants, materials, acrylic elastomers, enzyme preparations for lifestyle, develop processes using various types of Akihiro Taniguchi (sheets, liquids) remover, 3D printing materials The Nagase Application Workshop is an open universities for markets including automotive, office special epoxy resins phospholipids General Manager equipments, and the Universal Design Office, Nagase Application Workshop (NAW) innovation laboratory operated on the basis of free equipment, home appliance, electronics, building where ideas can be shared instantly, and is a thought possible only in a lab operated by a trading and construction, and packaging, etc. space that leverages the free innovation of company. As a development partner to customers, Looking ahead, NAW will focus on themes in Nagase ChemteX engineers and customers. NAW provides evaluation and analysis of unique the environmental field such as ESG initiatives, The center is capable of integrated operations new technologies and materials, adds functions for and move forward on developing new technolo- from ideas through to implementation and formulation development, proposes new concept gies and materials aimed at building a business strives to develop new functional resins. color designs, and advances the development of model for the NAGASE Group. Furthermore, NAW new applications and more. Collaborations occur is also taking action with a view to global Group Established: 2007 with materials and process manufacturers and collaboration regarding the lab’s functions.
4 NAGASE Group Integrated Report 2020 5 NAGASE’s Value Proposition Our Value
NAGASE, which rolls out businesses in a wide variety of business domains, wants the concept of finding different applications for technologies and products to sink in. One of our strengths is having the expertise to unveil businesses “Chemical Reactions” Going Beyond the Boundaries meeting the needs of various countries. The NAGASE Group has the power to enlarge and spread business possibilities. Expand Identify ››› Develop ››› Expand
Delivering Value Global Where It’s Needed Utilizing
Network a Global Network Our Value Story for Value Proposition
ASEAN and Greater South Europe the Middle Japan Americas China Korea East Management& Sustainability
Mainly engaged in the pharmaceuti- We are moving ahead on adding Greater China accounts for the As the heart of the NAGASE Group’s South Korea develops around an axis Leveraging the Group’s R&D capabili- cals and chemicals businesses. In high value to core businesses like majority of sales in the NAGASE global network, Japan not only carries in the electronics business, including ties and network, including the 2019 pharmaceuticals, the Group focuses plastics and mobility-related business. Group outside of Japan, and is out core businesses, it also proactively its globally competitive semiconduc- addition of Prinova Group, LLC, we on exporting to Japan pharmaceuti- In the food ingredients business, currently focused on the four main develops new fields such as AI and tors. Leveraging the NAGASE Group’s aim to create synergies within the cal ingredients emanating from we aim to solve customers’ problems businesses of semiconductors, next-generation ICT business. global network, we are advancing Group, centered around the food
Europe, while in chemicals, it is through the application lab and mobility, electronics and life and the worldwide rollout of South ingredients business field. Business Portfolio moving ahead on switching from various materials. healthcare. Korean products. products that place a heavy burden on the environment to bio-chemicals in consideration of the environment. Corporate Information Financial and
Consolidated Net Sales Overseas Sales to Net Sales Number of Bases Number of Manufacturing Companies Number of Sales and Servicing Companies Number of Employees (Consolidated)
799.5 49.7 % 30 124 15 60 28 64 7,207 billion yen Countries Companies Countries Companies Countries Companies and Areas and Areas and Areas Overseas 397.1 billion yen Overseas 3,248
▸ See P.70–71, “Regional Strategy”
6 NAGASE Group Integrated Report 2020 7 NAGASE’s Value Proposition Our Value
Driving Our Value Value to the Future Through its 188 years of business activity, the NAGASE Group has grown into a unique corporate group with a foundation in chemicals. It possesses a wide array of business domains, an information network spanning the globe, and manufacturing as well as R&D capabilities that increase its power as a corporate group. NAGASE’s position of maintaining the highest standards of integrity has earned the trust of its partners, and serves as a strength that leads to sustainable growth for the NAGASE Group. Developing On top of these strengths, which the NAGASE Group built up over many years, it has developed business while Summary of the Long-Term adding “new strengths,” and continually delivering the value generated by the strengths to all its stakeholders. In this Management Policy way, the NAGASE Group contributes to realize a sustainable world where people live with peace of mind. Sustainable Business Challenges for Our Value Growth Advanced Technology • Increase investment Partnerships and Knowledge in the A Broad Customer Base to Social and Ma • Accelerate organic growth Story for Value Proposition Built on Trust ding rket Field of Chemistry pon Nee • Expand overseas operations Res ds The NAGASE Group’s long- Through connections with various The NAGASE Group possesses a standing management philosophy customers, such as leading chemi- customer base of over 9,000 Reinforcement of is to maintain the highest stan- cal manufacturers that operate on companies domestically and Business Base dards of integrity. With this idea in a global scale, as well as the overseas. The NAGASE Group also Restructure global governance mind, we believe in gaining a deep manufacturing, processing and boasts global expansion over a • Develop • Increase flexibility in HR management
understanding of our customers R&D functions which we have so wide business domain as well as a Management& Sustainability and building cooperative relation- far acquired, the NAGASE Group strong, independent information • Enhance safety and assurance ships in which we pursue various has gained an unwavering techno- network unique to a trading Identify Expand • Consolidate communications possibilities together. logical capability and knowledge company not bound by any particu- infrastructure in the field of chemistry. lar manufacturer’s technology or ▸ See P. 26–27 “Our Roadmap of Growth” product. This allows for proposals Realization of a that lead to customer value. Sustainable Society Business Portfolio
Employees Shareholders Financial Soundness Ability to and Strict Financial Create Business Discipline Society Business NAGASE Vision Corporate Information
The NAGASE Group has created At the NAGASE Group, our corpo- Partners Consumers Financial and and provided new value by freely rate culture ensures financial To realize a stringing together the various soundness and strict financial sustainable world functions of the NAGASE Group discipline. Our supply and sales such as manufacturing, processing, foundations are also stable, as we where people live and R&D. The ability to create new are not heavily dependent on Sh rs with peace of mind aring olde businesses as a “Business particular products or regions. This Values with Stakeh ▸ See P. 22–23 “Our Philosophy” Designer” is a significant strength. kind of financial base allows for new “challenges” that lead to the NAGASE Group’s sustainable growth, such as DX and next- generation information communi- cations business. Delivering New Value
Our Strengths
8 NAGASE Group Integrated Report 2020 9 Message from Management Our Value
Top Message
CEO Message Our Value Story for Value Proposition
Representative Director and President Management& Sustainability
Kenji Asakura Business Portfolio Corporate Information
We will continue Financial and providing society with value throughout the ages and achieve sustainable growth for the NAGASE Group
10 NAGASE Group Integrated Report 2020 11 Financial and Our Value Story for Value Proposition Management & Sustainability Business Portfolio Corporate Information 13 We are also We , we became , This will be in addi- This The existence of Prinova was also a major factor. In also a major factor. was existence of Prinova The Another major KPI is the improved profitability of our Another major KPI is the inorganic is ACE-2020 of One of the major themes Reform of Our Corporate Culture Reform of Our Corporate
Group to the NAGASE welcoming Prinova • I believe that the C* culture, As for reforming our corporate commitment—is extremely import- say, is to ACE—that in we were unable culture, Under our previous corporate ant. laid out in to seriously assess achievement of the objectives after thoroughly imple- Yet the mid-term management plan. progress, we have seen satisfactory menting a PDCA cycle, the results and an including a sense of responsibility toward a common goal. of working together toward awareness of the need to not forcefully impose Japanese aware keenly methods but to construct a new system while listening to the degree of under- As a result, ideas. the other party’s of the completed system was standing and awareness combined with a sense of speed, This, extremely high. that is capable Integration) resulted in a PMI (Post-Merger I think that this will be a of producing satisfactory results. which aims to be Group, tremendous asset for the NAGASE a to keep I would like now on, From a true global company. global perspective when making efforts such as reevaluating employees’ working styles.
required. Businesses such as next-generation information Businesses such as next-generation required. are undoubt- systems and semiconductors communications - continue to pursue profitabil so we will fields, edly growing ity in those areas. this Remarkable progress toward Manufacturing Business. efforts each indices through the made in various effort was reform. Group company put into NAGASE businesses which from unsuccessful continuing to withdraw I believe not have future potential. we have determined do is headed in the right direction. the Manufacturing Business of a new earnings model. growth through the introduction which will a goal to spur inorganic growth, made it We become a growth engine in the future. which has made full use of existing tion to organic growth, right now there appear to However, management resources. concrete be a number of measures that are not producing feasibility this happened because our Regretfully, results. overly optimistic. assessment of business investments was is one point we will improve when it comes time to This mid-term management plan. the next draft CEO Message CEO - We under We * In the mid-term management plan ACE-2020, ACE stands for accountability, commitment and efficiency. stands for accountability, ACE ACE-2020, * In the mid-term management plan We are also crossing business and We and also largely improved the NAGASE and also largely improved the NAGASE With regard to reform of our profit structure among our August in company Prinova acquisition of U.S.-based The we steadily took on challenge In the Electronics Business, We continue to share and maximize knowledge within the continue to share and maximize We Reform of Our Profit Structure Reform of Our Profit
we saw improved profits performance indicators), KPI (key in the focus areas of Life & Healthcare and Manufacturing America region. as well as major developments in the North 2019 spurred reform of our profit structure in the Life & Healthcare segment, but have not achieved the success we had after challenge, environment. expected due in part to the market a Business Designer are endless. We currently possess six currently possess We are endless. a Business Designer limit ourselves to this number. but do not intend to functions, added. AI may be such as entirely new functions instance, For is exhilarating. in that way about the situation Thinking to create collaboration Group as well as strengthen NAGASE new business and values. new initiatives such as businesssegment boundaries to launch communications and information related to next-generation our customers can hope that We materials for 3D printers. and improved value. count on us to deliver new on the Fourth Looking Back of the Mid-Term Year ACE-2020 Plan Management • Group completed the fourth the NAGASE In fiscal 2019, are We ACE-2020. year of its mid-term management plan now seeing both what we could and could not accomplish. disclosed Although there are some companies that have not we disclosed our their outlook for the current fiscal year, of outlook based on the presumption that the impact business domains will Group’s on the NAGASE COVID-19 largely improve in the second half of the fiscal year. is something ACE-2020 to meet our goals for The inability Since this is the very seriously as a manager. I take that we will continue to pursue our targets. final year of the plan, swiftly in anticipa- we will be required to reform Meanwhile, I believe that pandemic. tion of an end to the COVID-19 goals with the current situation is ACE-2020 balancing our the critical issue for this year. also established the new Food We portfolio. overall Group’s April 2020 to expand the NAGASE Ingredients Department in Although Europe and the food ingredients business. Group’s we are also are currently our main focus in this division, U.S. Asia. out into beginning to develop measures to branch within the segment is stand that portfolio reevaluation . . We will continue will continue We
I believe that the best thing about being a trading com- I believe that the best thing about being a trading Under these conditions, we believe it is important to we believe it is important Under these conditions, are able to work on new We pany is the degree of freedom. by a single product or technology businesses unconstrained NAGASE’s Business Designer Designer Business NAGASE’s “Identify, Embody Initiatives and Expand” Develop very import- concept of a Business Designer has been The Not limiting ant since I became president of the Company. we will align the six functions of the ourselves to trading, Global Logistics, Investment, R&D, Group (Trading, NAGASE business and Manufacturing) and generate Network, we embody this concept, Through alongside our partners. Develop “Identify, proposition: value Group’s the NAGASE and Expand.” unique manufacturing and Group’s If we add the NAGASE possibilities of the development capabilities to the equation, maintain the position we have held up until now, which is maintain the position we have held up until now, the future. to conduct investment towards and also Transformation) our prior investment in DX (Digital information communications- invest in next-generation critical to which will become related businesses such as 5G, regardless of results future communications infrastructure, in the short term. opportunities for the NAGASE Group to reform and will work opportunities for the NAGASE creation. new value quickly to generate Top Message Top
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COVID-19 pandemic. COVID-19 Our Value Our working hard on providing treatment. providing on hard working those who were affected by the current current the by affected were who those I would also like to express my heartfelt my express to like also would I gratitude to all medical workers who are are who workers medical all to gratitude I would like to express my sympathies to to sympathies my express to like would I The global spread of COVID-19 has served as a keen has served as a keen global spread of COVID-19 The In 2020, the COVID-19 pandemic has led to dramatic pandemic has led to dramatic the COVID-19 In 2020, selves in grows ever more uncertain. As the international selves in grows ever more uncertain. continues to shift, balance of power predicated on free trade we understand that it will be extremely important for the Group to find its place. NAGASE reminder of the importance of our employees and families’ and a stable securing an emergency supply chain, well-being, accept the sudden changes in the times, We financial base. as and the needs of all our stakeholders the environment, With the social and economic changes on a global scale. continuing trade tensions between the U.S. and China, and and China, tensions between the U.S. continuing trade we find our the situation the further rise of protectionism, Since its founding, the NAGASE Group has handled prod- the NAGASE Since its founding, with ucts which support many aspects of individual lifestyles looking Group is always NAGASE The chemicals as its base. ahead at technological trends and identifying the products, technologies and services that will be needed in the future. its business the Group continues to transform In this way, by the existing business Unconstrained on a flexible basis. Group continues to expand the the NAGASE foundation, domain and scope of its business. Accept Changes as an Changes as an Accept and Opportunity for Reform Value Continuously Provide to Stakeholders Pursing New Value Proposition Proposition Value New Pursing as a Business Designer Business a as Message from Management from Message NAGASE Group Integrated Report 2020 12
Kenji Asakura Financial and Our Value Story for Value Proposition Management & Sustainability Business Portfolio Corporate Information 15
term overlap with rom now on, the the rom now on, , we believe that the , We uphold the phrase “maintain the highest standards of “maintain the highest standards of uphold the phrase We I kindly ask for your continued understanding and cooperation. Digital Transformation
are utilized as the basic technology of next-generation informa- of next-generation the basic technology are utilized as created which can will be then new value tion communications, the work together by utilizing will We the world. help change ingre- which are focused on unique strengths Group’s NAGASE technology. dients and ingredient processing management plan starting from fiscal 2021. Social and economic management plan starting from fiscal 2021. altered at the beginning of the year due conditions were radically However to the spread of COVID-19. the world we envisioned when discussing the next mid-term - management plan with regard to matters such as the accelera were fortunate that we were able to get We tion of digitalization. accelerate but feel that we must a jump start in that regard, efforts even more. F as our management philosophy. integrity” • on developing a Group-wide Group is working NAGASE The producing its as the first step toward platform digital marketing Group NAGASE The (DX). Transformation own form of Digital where there is an abundance of U.S., launched a team in the it April 2020, in Then specialized skills. talented individuals with called the Global in Japan also established a new organization widespread through- digital marketing Office to make Marketing only is not NAGASE’s digital marketing Yet out the entire Group. material develop- services for a new instance, For form of DX. which the “MI”), or AI (material informatics, ment system using with Creation) Office developed in cooperation Value NVC (New Other is scheduled for release within the current fiscal year. IBM, of the projects include information sharing and streamlining manufacturing business and man- in-house Group’s NAGASE We supply chain logistics using blockchains. agement of overall manner and these projects in an integrated hope to advance create a model that will outpace our competitors. Looking Ahead to the Next Plan Management Mid-Term time discussing measures for the next mid- have spent We world will practically “post-coronavirus” so-called way we do business as a trading company will change as company will change as we do business as a trading way we believe that deep Nevertheless, digitalization progresses. No down what customers seek from us is quality and trust. go back to this we always matter the business environment, aim to achieve We “highest standards of integrity.” mentality of a sustainable world where people live with peace of mind. CEO Message CEO
and needs are constantly Next-Generation Next-Generation Information Communications Business
even greater efforts to deal with international laws and regula- tions as well as BCP. • which has recently been put into practical Looking ahead to 5G, we can see that in the future and even further ahead to 6G, use, there will undoubtedly be a need for many chemical ingredients believe that the next- We with entirely new properties. information communications business is a business generation Group can contribute to the development in which the NAGASE by maximizing the technology and of cutting-edge infrastructure Cutting-edge research networks it has amassed up until now. advancing, development is always new properties If chemical ingredients possessing being created. Food Ingredients Business Ingredients Food
Making Full Use of Various Various of Use Full Making to Resources Management Value New Create • has Nagase ChemteX Corporation Group, In the NAGASE After incorporating treated enzymes as a food ingredient. the NAGASE as a subsidiary in 2012, Ltd. Co., Hayashibara Group honed its unique manufacturing capabilities. securing an overseas distribution for many years, However, Group as a whole. a challenge for the NAGASE route was Group made a subsidiary of Prinova, When the NAGASE which possesses a strong sales network in Europe and the As all the pieces were finally put into place. in 2019, U.S., we Asia expands, of Southeast the undeveloped market development while expanding accelerate intend to rapidly Establishing the Food our product lineup and services. in the merely the first step; Ingredients Department was we hope to group all related organizations together future, Because safety is number on a global scale. and operate we are making one when it comes to food ingredients, Improve the Efficiency of of the Efficiency Improve Meetings of Directors Board of on the separation Although we have not deliberated of the immense we are aware management and execution, we is part of the reason That importance of that division. two to increased the number of outside directors from discus- three and aim to more actively promote strategic that the opinions of these three anticipate We sions. of outside directors will be better reflected at Board of a established the likes We Directors meetings. Nomination Committee and a Compensation Committee think that this will We to ensure greater transparency. of Directors further enhance the effectiveness of the Board value. corporate raise in turn, and, Top Message Top Our Value Our , we thoroughly discuss the sustainability we thoroughly discuss the sustainability , consumers and shareholders as its stakeholders, consumers and shareholders as its stakeholders, The NAGASE Group defines employees, customers, customers, Group defines employees, NAGASE The Amidst all this, we launched the Sustainability we launched the Sustainability Amidst all this, society, We and views employees as our number one priority. believe that if there is an environment in which employees then the company will be set on a path can work happily, in turn will lead to contributions to cus- That to growth. society and consumers as well as stable dividends tomers, for shareholders. in which I In this committee, Committee in June 2020. serve as chair Although our com- Group. management of the NAGASE pany has grown with a focus on petrochemical-based continually grow from now on we must chemical business, to environmental while giving even further consideration I plastic marine debris and climate change. pollution like believe that contributing to all 17 of the United Nation’s We sustainability. SDGs is not about the Nagase Group’s will establish a direction while thoroughly analyzing our strengths and the external environment. Around the world, there is growing awareness regarding regarding there is growing awareness Around the world, to the spread Due the realization of a sustainable society. society is paying more attention to corporate of COVID-19, than I become more aware and I myself have behavior, I believe that management from now on previously was. of will involve balancing contributions to the sustainability medium and long term society as a whole in the short, sustainable management to with our own company’s increase our profit and increase economic benefits. Sustainability Management Sustainability Realizing a Sustainable World World Sustainable a Realizing with Live People Where Mind Peace of Message from Management from Message NAGASE Group Integrated Report 2020 14
Kenji Asakura Financial and Our Value Story for Value Proposition Management & Sustainability Business Portfolio Corporate Information 17