Conceptual Framework Financial/Non-Financial Value Creation Businesses and Foundation of Financial Information / for Daicel Group Values Highlights Growth Strategies Sustainability Corporate Information 31 31 COC ® gravity. in specific Only labels float due to a difference DAICEL Report 2020 Report DAICEL DAICEL Report 2020 Report DAICEL is different from from is different ® COC rapidly grows, it has COC rapidly grows, ® Olefin + TOPAS can be recycled as an olefin material. can be recycled ® COC for labels ® COC (cyclic olefin ), a material developed COC (cyclic olefin copolymer), ® COC enables labels to retain necessary label characteristics. ® As the demand for TOPAS polypropylene (PP) or polyethylene terephthalate (PET), labels (PP) or polyethylene terephthalate polypropylene made of TOPAS by Polyplastics, fit this strategy because they do float in water, strategy because they do float in water, by Polyplastics, fit this to be collected separately, simplyenabling bottles and labels accelerating in water and thereby by placing bottle flakes the at the same time retaining while process, the recycling and adhesiveness of conventional printability, shrinkability, although TOPAS labels. Moreover, become necessary to enhance our supply system for the become necessary to enhance our supply products, high-quality of supply stable the realize To product. 50% in early capacity by production we plan to boost current new facilities in FY2023/3. FY2022/3 and introduce our main products, in the car parts market and markets our main products, for smartphones and other high-value added goods. Nevertheless, the sales volume of our engineering plastics year thanks to at the same level as the previous remained and in sales of general-purpose grade products the growth expanded applications. higher specific gravity than water, do not float. Labels using than water, higher specific gravity TOPAS water, enables labels to float. Olefin resin such as PE and PP, having a lower specific gravity than TOPAS Label developed by Polyplastics ● ● Mixed Although removing labels from bottles is necessary for recycling into high-purity into is necessary for recycling bottles labels from Although removing method for separation. had been no cost-effective plastics, there enabling for separate collection of bottles and labels. enabling for separate collection of bottles and PET-G/PVC resin Efficient separation achieved using TOPAS Efficient separation achieved using PET resin PET-G, PVC resin The COC resin makes labels buoyant while retaining their conventional characteristics, makes labels buoyant while retaining The COC resin Recycling plastic beverage bottles a growing concern in Europe Recycling plastic beverage bottles Bottle Label do not float. Conventional labels have all the functions required for a label but Conventional labels sink to the bottom of a tank, mixed along with bottles. Conventional label Bottle material Label material ● ● Since the raw materials used for plastic bottle bodies, Since the raw materials Method for separating labels from bottles by floating them in water bottles by floating Method for separating labels from Business Overview of FY2020/3 TOPICS The engineering plastics segment provides a variety of The engineering plastics segment provides high-performance engineering from products, synthetic resin to barrier films for packaging. plastics for cars and electronics due to Sales by this segment declined overall year-on-year economic slowdown and the COVID-19 pandemic, China’s which also constrained demand for engineering plastics, Contribution to Circular Economy with PET Bottle labels that that labels Bottle PET with Economy Circular to Contribution water on float for modern highly convenient and essential While plastics are a cause of marine litter and society, they also become solve these issues, the easily recyclable global warming. To bottle labels was developed by material for plastic beverage Polyplastics. beverage bottles plastic recycling caps, and labels differ, recycling In Europe, type. separating by resin requires labels a machine that removes equipped with plants are labels the the bodies, and consumers must peel off from rather ineffective are disposal. Still, such approaches before a more for As the search in terms of both cost and results. cast on a solution continues, a spotlight has been efficient and labels method for separately collecting plastic bottles The method had buoyant in water. by making labels that are which have a been unfeasible since conventional labels, ■ billion (FY2020/3) 20.9 Operating income income Operating ¥ billion Strategies 176.1 Net sales (FY2020/3) sales Net Performance Highlights (Consolidated) ¥ As of July 1, 2020, the sales divisions of Daicel FineChem Ltd., Daicel As of July 1, 2020, the sales divisions of Daicel FineChem integrated into Daicel Miraizu Ltd., a new Coating Ltd. were Ltd. and Daicel Value company, which succeeded Daicel FineChem Ltd. such as polymer alloys, created by blending multiple such as polymer alloys, created and high functional plastics properties, with different fillers. It is also in the plastics with special reinforced to increasingly compound business, which is responding processing sophisticated user needs, and in the plastic packaging. business, which supplies barrier films for food * Supporting the sustainable sustainable the Supporting by society of development special with plastics offering mechanical as such features to resistance and strength chemicals. and heat Creating new products for sustainable growth new products Creating supply and innovating techniques to Stabilizing product in market scale for growth prepare high-value added materials to Developing high-quality, markets in premium market share increase global technical solutions and supply chains Strengthening     ◦ ◦ ◦ ◦

Business Environment

Ongoing development of next- generation mobility using self-driving technologies and energy-saving and devices, Changes in infrastructure, of 5G services due to the introduction Worldwide slowdown of car production Worldwide

•  •  •  Daicel Miraizu Ltd.* handles high-performance products products Daicel Miraizu Ltd.* handles high-performance SDGs Relevant to these Segments Business Overview

Polyplastics Co., Ltd. is a leading engineering plastics Polyplastics Co., Ltd. is a leading engineering It manufactures company with 32 locations in 11 countries. market (POM), with the top worldwide technical and liquid crystal polymer (LCP), and its share, and many years solution capabilities, based on sample data Polyplastics strengths. one of its greatest of expertise, are with solutions have contributed to lighter automobiles electric electric components and higher performance more devices. Engineering plasticsEngineering Daicel Group Businesses and Growth Strategies Growth and Businesses Group Daicel DAICEL Report 2020 Report DAICEL 30