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The Denka Gunbai No. Column 08 TheDenkaWay Summer Way 2021 Vol.08 Photo provided by Minamisanriku-cho Summer Denka Big Swan Stadium, a building that resembles a swan spreading its wings Breathing new life into Niigata’s sports culture 2021 A Stadium Bearing Vol.08 the Denka Name Nihonbashi Mitsui Tower, 2-1-1 Nihonbashi-muromachi, Chuo-ku, Tokyo 103-0022 Tokyo Chuo-ku, 2-1-1 Nihonbashi-muromachi, Tower, Nihonbashi Mitsui Satoshi Fukuoka / / Editor-in-chief: Ltd. Denka Co., Corporate Communications Dept., 2021/ Publisher: 1, July. Published: Have you heard of Niigata Stadium, also known as “Denka Big Swan Stadium,” located on the banks of the Toyanogata Lake in Niigata Prefecture? Constructed as one of the 2002 FIFA World Cup venues, Niigata Stadium celebrates its 20th anniversary this year. It has been recognized under the name of “Denka” since 2014, when Denka acquired the naming rights. Its distinctive design resembles a swan spreading its wings as if to take off. With a capacity of 40,000 people, it is also used as a home stadium for Albirex Niigata, a local soccer team in the J2 league. It has also been awarded the J league Best Pitch Award six times for its well-maintained pitch. Using this stadium as a base, Denka has been actively spons oring sporting events such as the Denka Athletics Challenge Cup*1, which has been held every year since 2019. Denka decided to acquire the naming rights due to its strong connection with Niigata Prefecture. Currently, around 2,000 employees, or one third of the entire Denka Group, work in Niigata prefecture. In addition, we have our own Cover photo hydroelectric power plant in the area around Omi Plant (Itoigawa City), our main The Bridge at Minamisanriku plant since its establishment 1921, and are planning to build another one soon. Tsunami Memorial Park In 2020, Omi Plant produced pharma ingredients for the anti-influenza drug The Tsunami Memorial Park opened in Avigan,*2 which is also a candidate treatment for COVID-19. At the Gosen Office 2020 to pass down the memories and les- (Gosen City), production of the rapid testing kit Quick Navi COVID19 Ag has sons learned during the disaster to future begun. Niigata has been, and always will be an important place for Denka. generations. The bridge in the photo was 10 Years After the Great East Japan Earthquake built as a symbol of Minamianriku’s revival. Conducting sporting events at the stadium will further strengthen the connection It is an arched bridge that uses Japanese reproduction prohibited between Niigata Prefecture and Denka. From Denka Big Swan Stadium, Niigata Unauthorized Conveying Our Feelings and cedar from the Minamisanriku area. and Denka will fly to the world, and towards the future. Connecting Them to the Future *1 The Niigata event of the Japan Grand-prix Series of track & field tournaments held by the Japan Association of Athletics Federations (JAAF). The aim of this event is to develop athletes that can compete on an international level. Contents *2 Avigan is a registered trademark of FUJIFILM Toyama Chemical Co., Ltd. 2 Challengers for Denka Value-Up 9 Amazing the World with Innovation To Become an Indispensable for Society 10 Years After the Great East Japan Earthquake Conveying Our Feelings and Connecting Them to the Future 8 Think INNOVATION Leaving Room for Intuition 17 DENKA TOPICS by Dai Tamesue, CEO, Deportare Partners 18 LINK GLOBALLY, LINK FUTURE 20 Gunbai Column Denka Value-Up Management Plan Mid-term Review This video covers the mid-term review of the Denka Value-Up Plan launched in FY2018 and introduces the initiatives we will focus on over the next two years together with numerical targets for FY2022. To Become Indispensab le for Society From April 2021, we launched our Denka Value-Up initiatives for the next two years. In order for the Denka Group to become indispens able for society, we will continue promoting further growth by realizing the three Value-Up initiatives. Laying out a clear path toward also have to directly confront the social issues that In terms of Introduction of Innovative becoming a Specialty-Fusion Company the world is currently facing. With the SDGs as our Processes, we will continue working on removing Numerical targets compass, the Denka Group has clearly positioned 3D (dangerous, dirty, demanding) workplaces at Since 2018, the Denka Group has been promoting the resolution of social issues as a management manufacturing sites and ensuring mental wellbeing Operating income the Denka Value-Up Management Plan with the aim challenge, and through our initiatives over the next so that all employees can devote themselves to of becoming a Specialty-Fusion Company with a two years, we will strive to be a company that is their work with peace of mind. 50billion yen global presence. In FY2020, despite the impact of indispensable for society. To that purpose, we must In Environment Value-Up, we have set a new Operating income ratio the COVID-19 pandemic, we were able to achieve realize our three Value-Up initiatives, concern- goal of reducing greenhouse gas emissions by record profits and are seeing steady results in our ing our business, the environment, and human 50% by FY2030 and becoming carbon neutral ％ specialty businesses, particularly in the environment resources. by FY2050 in order to fulfill our responsibility as a 13 & energy and healthcare businesses. chemical manufacturer. From a medium- to long- Ratio of specialty business A company that employees In 2021, after examining our results to date term perspective, we will take on the challenge of and stakeholders can be proud of and identifying the issues, we refined our strategy developing and implementing CCUS (Carbon diox- 83％ for the next two years. In 2022, the final year of In Business Value-Up, which is the core of Denka ide Capture, Utilization and Storage) technology. the Denka Value-Up Plan, we are aiming for 50 Value-Up, we will focus on the Business Portfolio In Human Resources Value-Up, we will priori- The three Value-Up initiatives billion yen in operating income. Our most significant Shift through concentration in businesses in which tize HR strategies such as staff education, diversity, achievement during the three-year period from we can outperform others, and further specializing and health with the aim of becoming a company Business FY2018 to FY2020 is that we have been able to our key operations. In shifting our portfolio to focus where employees can feel growth through job Value-Up Toshio Imai lay out a clear path toward becoming a Special- on world-class businesses unrivaled by other satisfaction and work. We will also continue our Representative Director, President ty-Fusion Company. Without a doubt, this is thanks companies, it is important to reevaluate whether efforts in sound management, including the to the efforts of each and every member of the we are really performing better than anyone else in creation of an environment where employees can Environment Denka Group. I would like to once again express our current businesses and to take action. I would fully demonstrate their skills. Value-Up my gratitude to all of you, especially to the manu- like all employees to think of ways to do their jobs My goal is to make the Denka Group a facturing staff who worked hard to keep production better than anyone else and to actively communi- company that all of our stakeholders, including Human Resources going through the COVID-19 pandemic. cate those ideas. I believe that increasing the value our employees, can be proud of. To that end, we Value-Up In the post-COVID era of social change and of each individual will lead to an increase in the must realize three Value-Up initiatives and become the new normal, companies that are not genuinely overall value of the company, and thus to the value indispensable for society. Let us work together to Aiming for needed by society will become obsolete. We will we contribute to the world. carry out this transformation. even greater heights 2LaunchingThe Denka Way | 2021 Summer the Three Value-Up Initiatives!2021 Summer | The Denka Way 3 50.0 billion yen 42.0 billion yen 83% 34.2 billion yen 34.7 billion yen The Past and Future of 33.7 billion yen 89% 31.6 billion yen 97% New Strategy Denka Value-Up 73% 2021 2022 64% Denka Value-Up Plan started as a five-year management plan from FY2018 to We have examined the results of the Denka Value-Up Plan over the period from FY2018 49% FY2022. We have refined our strategy for the period up to FY2022 by review- to FY2020, identified the issues, and redefined our strategy up until FY2022. In order to ing our results to date and the issues that have emerged. We will strive to be be indispensable for society, we will continue to promote threefold Value-Up initiatives. Operating income from specialty businesses indispensable for society based on the three Value-Up initiatives and lay the Ratio of specialty business foundation for our next management plan. FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 (estimated) (target) Business Business Portfolio Shift through concentration 2018 2020 in businesses in which we can outperform others and In order to achieve dramatic global growth, we will aim to become a Specialty-Fusion further specializing our key operations Innovative processes Company and achieve sustained and sound growth. We have begun implementing the Value-Up Production process reforms following six measures, and we are already seeing results. Business Portfolio Shift ● Automate visual inspection, introduce robots, Accelerate growth of specialty businesses Accelerate growth of specialty businesses Specialize our key operations; redefine the positioning of the enhance sensors, etc.

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