With Customers 8 Decent Work and Economic Growth 9 Industry, Innovation and Infrastructure 11 Sustainable Cities and Communities

Goals and Achievements of Major Initiatives

Propose solutions- oriented businesses that respond to social imperatives.

Goals for fiscal year 2020 Contribute to the realization of a sustainable society by fostering next-generation businesses that anticipate technological changes.
Achievements in fiscal year 2020 Through participation in a national project seeking to advance the recycling of plastics with the aim of achieving a decarbonized, circular economy, the DIC Group for mulated a vision for a next-generation packaging business.
Evaluation ★★★
Goals for fiscal year 2021 Capitalize on core competencies to increase the probability of success for next-generation businesses from the perspective of both social value and economic value. Contribute to the creation of a new social ecosystem with the goal of realizing a circular economy.
Goals for fiscal year 2020 Participate in trade shows for key customer industries in Japan and overseas to strengthen the DIC brand and promote digitization to improve efficiency.
Achievements in fiscal year 2020 The DIC Group participated in major trade shows that were held virtually, as well as held online seminars, making use of digital technologies to create opportunities to strengthen communications with customers despite COVID-19.
Evaluation ★★★
Goals for fiscal year 2021 Participate in trade shows for key customer industries in Japan and overseas and make use of digital technologies to identify potential issues and propose solutions-oriented business ideas.
  • Evaluations are based on self-evaluations of current progress.
    Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work

New Pillar Creation: Promoting New Businesses that Respond Accurately to the Changing Needs of Society

The DIC Group sees one of its key missions as being to achieve sustainable growth both for itself and society by helping to address social imperatives related to climate change, the digitization of society, urbanization and longevity by identifying key business domains and providing products that respond to such imperatives.
With the goal of swiftly realizing this mission, DIC has outlined two basic business development strategies in its medium-term management plan, DIC111: Value Transformation and New Pillar Creation. In line with the strategy of Value Transformation, the Group will advance qualitative reforms in existing core businesses by shifting to businesses with differentiated high-value-added products and with more of a focus on social value. New Pillar Creation emphasizes creating new businesses by identifying areas where ESH-related issues and social changes intersect with the DIC Group’s competencies.

Designing a Framework for New Pillar Creation

The DIC Group’s success in providing new products and services that benefit society and creating new businesses will depend on how well it understands the sources of its competitiveness and whether it can swiftly and accurately identify social imperatives and needs. The ability to take responsibility for seeing the development process through to commercialization is particularly crucial. Accordingly, rather than depending on a conventional marketing-led approach to development, the Group has designed a framework centered on a deployment team that is charged with facilitating the design of new businesses by overseeing everything from planning and development through to production and sales, thereby ensuring that efforts to create new businesses optimize overall capabilities and are strategically effective.
Having established the New Business Development Headquarters to serve as the deployment team and identified four priority business areas, the DIC Group will leverage its ingenuity to advance the creation of new products that are useful to society and next-generation businesses with the potential to become mainstays.
The DIC Group will also bring together people from technical and sales backgrounds with detailed understanding of these business areas and people with experience in related industries with the aim of enhancing expertise and communications capabilities, as well as make active use of open innovation—including through participation in initiatives involving collaboration between industrial concerns and academia and by capitalizing on external resources—to promote the timely development and commercialization of products that benefit society.

Priority Areas of the New
Business Development
Headquarters

Examples of New Pillar Creation

01Flake Alumina Filler that Imparts Outstanding Strength and Heat Dissipating Properties and Is Expected to Contribute to the Proliferation of CASE Vehicles and 5G-Enabled Devices

The growing importance of the CASE (Connected, Autonomous, Shared and Electric)* concept and the deployment of the 5G cellular telecommunications standard continue to drive the trend toward eversmaller components with more sophisticated performance features in both the automobile and electronics industries. As a consequence, the dissipation of heat generated inside equipment is an increasingly important consideration. Alumina fillers, which offer superb thermal stability, are used to impart heat dissipating properties to automotive and electronics equipment components. DIC recently developed a distinctive alumina filler, synthesized using an original process, that unlike conventional alumina fillers— which comprise spherical or irregular particles—boasts excellent crystallinity and high aspect ratio flakeshaped particles. Accordingly, greater strength can be achieved with the addition of a smaller amount, thereby helping reduce weight. As a result, use of this filler not only improves the performance of components but also reduces energy use and CO₂ emissions arising from their production.

  • The words from which the acronym CASE is formed describe four key areas—vehicle connectivity, autonomous driving, shared mobility and electrification—in which next-generation technologies and services are defining the future of the automobile industry.
CeramNex</i><sup>TM</sup> AP10 flake-shaped alumina filler

CeramNexTM AP10 flake-shaped alumina filler

02Development of Thermoplastic Composites with Antiviral and Antibacterial Properties for Use with 3D Printers

Owing to technological innovations in modelling, together with the increasing diversification and sophistication of materials, 3D printer technologies, applications for which have expanded from prototypes to finished products, have been attracting considerable attention in recent years. With the spread of COVID-19 driving consumer concern for proper sanitization, calls have increased for the use of antiviral and antibacterial products in all locations, not only in hospitals and public facilities. The DIC Group recently succeeded in developing thermoplastic composites with antiviral and antibacterial properties for use with 3D printers. These materials—the effectiveness of which has been proven in tests conducted in accordance with the ISO’s standard for antiviral and antibacterial activity—suppress the growth of certain viruses and bacteria on the surface of products in which they are used. Moreover, these composites are made with polyurethane resin, which boasts outstanding flexibility and abrasion resistance, and thus offer promise for use in protective gear for medical, nursing care and public hygiene– related applications, including face shields and plastic masks. In addition, these composites are expected to be used in molded products that require antiviral treatment and that must be customized to the needs of individual customers. Looking ahead, DIC will continue working to contribute to the realization of a safe, secure and comfortable society by expanding its marketing focus to include such diverse industries as electronics and electrical appliances, sports equipment, household goods, housing and building materials, and automobiles.

03R&D Aimed at Developing Advanced Plastic Materials Recycling Technologies and Helping Realize a Circular Economy

The DIC Group has identified a number of social imperatives related to waste plastic and marine plastics—issues of major concern worldwide—as challenges that it has a responsibility to address under its sustainability strategy and is stepping up pertinent initiatives. Recently, DIC commenced demonstration testing as part of the New Energy and Industrial Technology Development Organization (NEDO) to develop materials recycling processes as part of NEDO’s Innovative Plastic Resource Circulation Process Technology Development Project for fiscal year 2020. The Company is participating in the development of materials regeneration processes and conducting basic research on the impact of packaging materials such as inks and adhesives on the properties of recycled plastic. DIC will also use the results of such research to promote the development of low– environmental impact inks, adhesives and other products. Participation in NEDO’s project will enable the Company to contribute simultaneously to resolving the issue of plastic waste and achieving the practical implementation of advanced plastic resource recycling.

TOPIC

Leveraging CVC to Work to Build a Sustainable Future

In 2016, DIC established a corporate venture capital (CVC) unit that is charged with searching the globe for start-ups boasting unique technologies, compelling business models or disruptive innovations that may contribute to society and to the longevity of the DIC Group. Or particular note, the unit looks for start-ups positioned to strive in the age of sustainable business. One such example is Checkerspot, Inc., in which DIC invested in 2018, which uses microalgae as a direct replacement for petroleum-based resources to create materials that facilitate the production of more sustainable high-performance products. From its approach to product design, which incorporates considerations for end-of-life disposal, to its use of social media to gauge consumers’ affinity for ecology, the environment and sustainability, as well as to track their reactions, Checkerspot has created a business model that is revolutionary on many fronts. In line with its New Pillar Creation strategy, DIC will continue to actively leverage CVC as a route to open innovation with the aim of building partnerships with companies to create new businesses that help address key social imperatives.

Skis made from algae-derived polyol produced by Checkerspot

Skis made from algae-derived polyol produced by Checkerspot

TOPIC

DIC Provides Hollow-Fiber Membranes for Use in ECMO

DIC provides hollow-fiber membranes to add oxygen to the blood in extracorporeal membrane oxygenation (ECMO)*, which is currently being used worldwide to treat critically ill COVID-19 patients. Oxygenators replace the function of the patient’s own lungs, temporarily drawing low-oxygen venous blood from the patient’s body to allow artificial oxygenation and then returning it to the body.
A hollow-fiber membrane is a bundle of hollow fibers that oxygenates blood by flowing it across the outer surface of the gas permeable bundle while passing oxygen through the inside. DIC’s hollow-fiber membranes for this application are made with a special polyolefin resin that effectively minimizes the risk of thromboembolic complications and have earned a solid reputation for reliability over the three decades since first being adopted for use as oxygenator gas separation membranes in 1990. Given the increasing number of patients worldwide with acute respiratory distress syndrome (ARDS) as a result of the COVID-19 pandemic, DIC will continue working to help ensure a steady supply of indispensable medical equipment.

  • ECMO is an extracorporeal technique for providing respiratory and circulatory support to patients with ARDS using a pump and an oxygenator.
DIC’s Hollow fiber membrane used in Oxygenator of ECMO

DIC’s Hollow fiber membrane used in Oxygenator of ECMO

Encouraging Familiarity with DIC Group Materials

The DIC Group participates in a variety of major trade shows every year with the aim of encouraging familiarity with the DIC Group products and development efforts. In fiscal year 2018, the Group introduced materials that will contribute to a stress-free digital society at FINETECH JAPAN (Makuhari, Chiba Prefecture), the JPCA Show (Tokyo Big Sight) and Chemical Materials Japan (Yokohama, Kanagawa Prefecture), materials relevant to the issue of marine plastic at Tokyo Pack 2018 (Tokyo Big Sight) and health- and safety-related products at FOOD TABLE in Japan 2018 (Makuhari, Chiba Prefecture). Overseas, the Group exhibited plastic materials that help reduce the weight of vehicles at PLASTINDIA 2018 (Gandhinagar, Gujarat) and CHINAPLAS 2018 (Shanghai) and took part in a variety of segment-specific events, including Paint India 2018 (Mumbai), Security Printers 2018 (Dublin, Ireland), and in-Cosmetics Global 2018 (Amsterdam), to promote dialogue with a wide range of stakeholders. In fiscal year 2019, the DIC Group will again take part in key trade shows to introduce Group products, development efforts and core technologies, hear the views of stakeholder, with the aim of realizing distinctively DIC materials that resolve challenges and are useful to society.

FINETECH JAPAN

FINETECH JAPAN

VOICE

We are working to create next-generation businesses that will ensure a sustainable future for everyone.

Manager, New Business Development Headquarters Nobuo Kobayashi

In formulating our new medium-term management plan, DIC111, we held extensive discussions on how to best incorporate sustainability, represented by the SDGs, into the creation of next-generation businesses. One conclusion this process yielded was that there was a need for another scale— namely, sustainability indicators—for assessing businesses. That prompted us to revisit the question of who “sustainability" is for.
Our goal is not to promote sustainability exclusively for customers, nor is it only a way for us to fulfill our responsibility as a corporate citizen. Rather, we must seek to ensure a sustainable future for everyone—the DIC Group, including the employees engaged in production, the customers who use our products, and also society, to which our products ultimately contribute. This belief will continue to guide our efforts to create nextgeneration businesses.

Manager, New Business Development Headquarters Nobuo Kobayashi

TOPICS

DIC Products and Know-How Are Helping Improve the Safety of Thailand’s Roads

According to World Health Organization (WHO) statistics published in 2015, the traffic death rate in Thailand was 36.2 people per 100,000, second highest in the world and eight times the rate in Japan. In Japan, one strategy employed to increase traffic safety that has contributed to a reduction of accidents is colored pavement, which improves visibility for drivers. In Thailand, colored pavement has recently been used around airports and in tourist areas, but there have been complaints that not enough has been done to prevent road surfaces from becoming slippery in the rain. DIC Group company Siam Chemical Industry worked with a Japanese-owned formulator to conduct verification tests for a heat-blocking slip-resistant road surfacing material that balances two performance features that have proven successful in Japan, namely, slip-resistance and heat blocking, which is effective in countering the heat island effect and increasing the durability of roads. The company has since begun introducing this material to the Thai authorities. Going forward, Siam Chemical Industry will continue to capitalize on technologies developed by the DIC Group in Japan to help reduce the incidence of traffic accidents in Thailand and eliminate urban heat islands.

Road coated with heat-blocking slip-resistant surfacing material

Road coated with heat-blocking slip-resistant surfacing material

Surface of bridge under construction (Siam Chemical Industry)

Surface of bridge under construction (Siam Chemical Industry)

遮熱滑り止め舗装の構成図/遮熱のメカニズム

Ties with Customers

With the aim of becoming a unique global company that is trusted by society, the DIC Group prioritizes and works to strengthen communications with its customers. Principal avenues of communication include participating in exhibitions, events and lectures, and holding workshops for business partners. In fiscal year 2020, the spread of the COVID-19 pandemic encouraged the Group to move its own exhibitions, presentations and other events online, as well as to take part in global exhibitions that shifted to an online format, including CAD RETEC 2020, a global technical conference on plastics, in September and International Plastic Fair (IPF) Japan 2020 in November. Sun Chemical, which oversees Group operations in the Americas and Europe, also participated in online events such as FlexoTech magazine’s FlexoTech Talk in October and held webinars for customers. In Japan, the PRC and the Asia–Pacific region, DIC Group companies made use of their websites to enhance the provision of information to customers and post videos introducing new products.
On another front, DIC continued employing a dedicated system in operation since 2013 to measure the portion of sales accounted for by repeat customers, using this as a measure of customer satisfaction based on sales data for the last three years. The Company thus works unceasingly to bolster its grasp of and improve customer satisfaction.

Sun Chemical webinar

Sun Chemical webinar

Digital Marketing

The DIC Group actively promotes digital marketing activities. With COVID-19 reducing opportunities to speak directly with customers, the Group significantly expanded use of electronic communications, including email and social media, as well as enhanced websites, including by building landing pages to handle requests and inquiries from potential customers. The DIC Group also continued to expand digital efforts to reach customers, including holding webinars and participating in online exhibitions. In the current fiscal year, the Group is further expanding the scope of its digital marketing activities both in Japan and overseas, adapting its approaches to the advance of the digital age.

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