Overview of Materiality

Business Expansion through M&As and a Shift to Promising Business Areas

The DIC Group has positioned expanding its lineup of photoresist materials, which are indispensable to semiconductor fabrication, and is promoting the development of state-of-the-art photoresist polymers. In fiscal year 2023, PCAS Canada Inc., which boasts outstanding production technologies and excels in delivering photoresist materials with a low metal content and high purity, joined the DIC Group. DIC is confident that the combination of these production technologies and its own synthesis technologies— a key strength—will enhance its ability to respond to the needs of the semiconductor industry, which continues to be driven by technological progress, thus further contributing to digital innovation. Looking ahead, the Group will continue to transform its business portfolio into one that delivers social value not only through organic growth but also by seeking beneficial M&A opportunities.

Start-Up of New Biomass Boiler at the Kashima Plant

The Kashima Plant, one of DIC’s core production facilities, produces organic pigments, base inks and metal carboxylates, as well as PPS resins, which play a vital role in reducing vehicle body weight, crucial to improving fuel efficiency. The production of these materials uses a significant amount of energy, making the plant the most energy-intensive of DIC’s sites in Japan (i.e., production facilities and the Central Research Laboratories), as a consequence of which it has long focused on environmental protection efforts, notably the promotion of energy-saving initiatives and the installation of renewable energy systems. In fiscal year 2023, a new biomass boiler began operating at the plant. Owing to this new boiler, as well as to the use of solar and wind power, the Kashima Plant expects to see a decline in its annual CO₂ emissions of approximately 36,000 tonnes. The DIC Group aims to achieve carbon neutrality by fiscal year 2050. To this end, the Group will continue working actively to reduce its CO₂ emissions by installing energy-saving equipment, undertaking energy-saving initiatives and employing renewable energy at suitable sites.

Efforts to Promote the Practical Implementation of Closed- Loop Recycling System for Polystyrene Food Trays

Since fiscal year 2020, the DIC Group has collaborated with FP Corporation (FPCO) to establish a closed-loop recycling system for polystyrene food trays. DIC has developed a proprietary dissolution and separation process—a deinking chemical process—that facilitates “trayto- tray” recycling, even for colored polystyrene food trays, which yield a recycled material for which uses were previously limited. Recognizing that the practical implementation of closed-loop recycling requires the creation of a dedicated ecosystem, in fiscal year 2023 DIC entered into a comprehensive partnership with the city of Yokkaichi, Mie Prefecture, which is actively promoting environment-friendly urban development, and commenced verification testing of the new system. Going forward, the Group will continue to expand its efforts beyond the realm of fine chemicals to promote dialogue with society with the goal of bolstering awareness of recycling.

Signing ceremony for the comprehensive partnership agreement (July 2023) attended by Mayor of Yokkaichi Tomohiro Mori (left) and then-President and CEO Kaoru Ino

Ongoing Project to Rebuild the DIC Group’s ERP System

The DIC Group is a global entity with operations centered on Japan, other parts of Asia, the Americas and Europe. The Group currently has a presence in 62 countries and territories worldwide and handles vast amounts of information related to its customers and suppliers, as well as to logistics. Given significant changes in the market environment, the effective use of data and technology is critical to the ability to manage a global organization and conduct business worldwide with efficiency and precision. DIC began rebuilding the Group’s ERP system in fiscal year 2022, which it aims to begin using in fiscal year 2024, that will facilitate business management driven by multifaceted market analysis, as well as swift decision making and the optimization of business processes under any business conditions. The Group will continue to advance digital technologies to strengthen its global business structure.

Other Management Issues

In the process of identifying material issues, the DIC Group also recognized the following as issues with the potential to significantly impact its management. The Group will continue working to address/strengthen its response to these issues through its business activities.