Creating for Tomorrow - Asahi Kasei Report 2021
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Creating for Tomorrow
Asahi Kasei Report 2021
Asahi Kasei Report 2021 1
Group Mission We, the Asahi Kasei Group,
contribute to life and living
for people around the world.
Group Vision
Providing new value to society
by enabling “living in health and comfort”
and “harmony with the natural environment.”
Group Values
Sincerity—Being sincere with everyone.
Challenge—Boldly taking challenges, continuously seeking change.
Creativity—Creating new value through unity and synergy.
Group Slogan
Creating for Tomorrow
Asahi Kasei Report 2021 Asahi Kasei Group Overview Management Strategy Business Overview Corporate Governance and Corporate Information 2
Risk Management
Contents
Asahi Kasei Group Overview Business Overview Editorial policy
For greater ease of understanding among our stakeholders regarding the
Asahi Kasei Group’s operating climate and overall business activities, the
3 At a Glance 46 Review of Operations Asahi Kasei Report focuses on such areas as our management strategy,
business conditions, and management configuration as well as our efforts
5 Financial and Non-Financial Highlights 46 Material toward sustainability in society. Detailed sustainability-related information is
disclosed on our website.
7 Addressing Social Issues and Advancing Business 48 Homes
Period under review
Portfolio Strategies — Our Path to Three Sectors — 50 Health Care The period under review is fiscal 2020 (April 2020 to March 2021). Some
qualitative information pertaining to April to July 2021 has also been included.
Organizational scope
The scope of the report is Asahi Kasei Corp. and its consolidated subsidiaries
Management Strategy (in other cases, noted in the text). Asahi Kasei’s three operating segments are
Material, Homes, and Health Care. The titles and positions of corporate officers
Corporate Governance and and other personnel as shown in this report are current as of September 2021.
10 Message from the President
Risk Management Guidelines consulted
18 Value Creation Model
The GRI Standards, the standards of the Sustainability Accounting Standards
19 The Asahi Kasei Group’s Vision for the Future of Board, ISO 26000, and other guidelines were consulted during the preparation
53 Corporate Governance
of this report.
People and the Earth
57 Directors and Audit & Supervisory Disclaimer
22 Pursuit of Carbon Neutrality and a Circular Economy Board Members The forecasts and estimates shown in this report are dependent on a variety of
assumptions and economic conditions. Plans and figures depicting the future
27 Initiatives Regarding Climate Change Disclosure 60 Interview with an Outside Director do not imply a guarantee of actual outcome.
Based on the TCFD Recommendations
62 Risk Management
29 New Business Creation Photographs at the beginning of each section
We have used a selection of prize-winning photographs from our
32 New Business Creation Utilizing Corporate
Sustainability Photo Contest held in March and April 2021. The
Venture Capital contest solicited photographs from all Asahi Kasei Group employ-
Corporate Information ees and executives that would inspire people to think about and
34 Digital Transformation
act on sustainability in their daily lives. More than 2,300 submis-
39 Human Resource Strategies 66 Consolidated Financial Statements sions were received from our sites around the world.
43 Financial and Capital Policy 71 Corporate Profile / Stock Information
72 Information Disclosure
Asahi Kasei Report 2021 Asahi Kasei Group Overview Management Strategy Business Overview Corporate Governance and Corporate Information 3
Risk Management
At a Glance
Fiscal 2020 Net Sales Notable Facts (as of March 31, 2021)
19.5 %
¥ 2,106.1 billion
Employees
44,497 Of which, overseas employees
account for nearly 40%
Global bases
More than 20
33.6%
countries and regions
34.2 % Material Fiscal 2020 Operating Income
171.8
Consolidated subsidiaries Overseas sales ratio Credit rating*
Homes
¥
Health Care 47.4 %
billion
228 42.8 ％ AA Japan Credit Rating Agency (JCR)
* As of June 30, 2021
Note: P
ercentages shown exclude the
“Others” category and “corporate
expenses and eliminations”
Net Sales by Region
33.1 % Note: As of March 31, 2021
32.2%
Europe
China The Americas
¥124.9 billion
¥198.9 billion ¥ 335.9 billion
5.9 %
9.4 % 15.9 %
Japan
¥1,204.3 billion
57. 2 %
Asia Other Regions
(excluding China)
¥ 26.8 billion
¥ 215.3 billion
1.3 %
10.3 %
Asahi Kasei Report 2021 Asahi Kasei Group Overview Management Strategy Business Overview Corporate Governance and Corporate Information 4
Risk Management
Priority Fields for Provision of Value and Related Products
Material Homes Health Care
Environment & Energy Home & Living Health Care
Hipore™ and Celgard™ separators for lithium-ion Ion-exchange membrane chlor-alkali electrolysis Hebel Haus™ unit homes Pharmaceutical products
batteries process Hebel Maison™ apartment buildings
Mobility
Engineering plastics Lamous™ artificial suede Hebel Village™ apartments for seniors Planova™ virus removal filters
Dinamica™ automotive interior material
Life Material
Ceolus™ microcrystalline cellulose Household products Atlas™ condominiums ZOLL AED Plus™ automated external defibrillator
Asahi Kasei Report 2021 Asahi Kasei Group Overview Management Strategy Business Overview Corporate Governance and Corporate Information 5
Risk Management
Financial Highlights
Net sales (domestic & overseas), operating income, operating margin EBITDA1, depreciation and amortization, EBITDA margin Net income attributable to owners of the parent, EPS
(¥ billion) (¥ billion) (¥ billion) (¥ billion) (¥)
2,500 300 25 400 20 200 200
2,170.4 2,151.6 2,106.1 170.2
2,042.2
1,883.0 311.9 313.6 305.1
2,000 240 20 268.4 295.6 147.5
209.6 300 14.5 15 150 150
198.5 15.3
177.3 14.3 14.5 13.7 115.0 121.93
1,500 171.8 180 15
159.2
105.66 103.9
200 10 100 100
79.8
1,000 120 10 133.3 82.34 74.85
9.7 8.2 109.2 113.5 118.3
8.5 9.7 8.2 104.0 57.49
100 5 50 50
500 60 5
0 0 0 0 0 0 0
2016 2017 2018 2019 2020 (FY) 2016 2017 2018 2019 2020 (FY) 2016 2017 2018 2019 2020 (FY)
EBITDA Depreciation and amortization (tangible, intangible, and goodwill)
Domestic sales Overseas sales (left scale) EBITDA margin (%) Net income attributable to owners of the parent (left scale)
Operating income (right scale) Operating margin (%) 1
Operating income, depreciation, and amortization EPS (right scale)
In fiscal 2020, both sales and operating income were largely flat year on year as The amount of depreciation and amortization is increasing with proactive Net income attributable to owners of the parent in fiscal 2020 decreased due to
earnings in the Health Care sector offset declines in the Material and Homes capital expenditures and M&A activity. EBITDA is regarded as a key perfor- a one-off increase in tax expenses due to the reconfiguration of organizations
sectors that stemmed from COVID-19. Overseas sales accounted for over 40% mance indicator (KPI) signifying the generation of cash flow. The decrease in related to Veloxis Pharmaceuticals, Inc. (hereinafter Veloxis). As a result, EPS
of total net sales in fiscal 2020, reflecting an increase in overseas sales due to depreciation and amortization in fiscal 2018 resulted from a change in the also decreased.
overseas business expansion, including through M&A. method of depreciation of property, plant and equipment from the declining-
balance method to the straight-line method.
ROE2, ROIC3 Capital expenditure, R&D expenses Interest-bearing debt, D/E ratio
(%) (¥ billion) (¥ billion)
20 200 800 0.8
703.8
659.0
154.1 153.7
15 14.0 150 600 0.6
136.2
0.52
11.1
10.5 424.9
101.3 402.8 0.45
10 100 90.6 85.7 90.1 91.0 89.7 400 0.4
7.6 79.6
9.7 301.7
8.8 5.6 0.31
7.8 0.35
5 6.6 50 200 0.23 0.2
4.9
0 0 0 0
2016 2017 2018 2019 2020 (FY) 2016 2017 2018 2019 2020 (FY) 2016 2017 2018 2019 2020 (FY)
ROE ROIC
Capital expenditure R&D expenses Interest-bearing debt (left scale) D/E ratio (right scale)
2
et income per shareholders’ equity
N
3
(Operating income – income taxes) / average annual invested capital
The Company positions ROE and ROIC as KPIs to indicate its efficiency in The Company proactively carries out capital expenditure geared toward growth, Although interest-bearing debt increased in fiscal 2019 due to the acquisition
generating profits. In fiscal 2020, ROE declined due to the decrease in net including sustainability- and digital transformation-related investments, and of Veloxis, it decreased in fiscal 2020 because of the repayment of loans
income. ROIC also declined due to the one-off increase in tax expenses due to research and development (R&D) aimed at the Health Care sector and in new payable following an improvement in cash flows. As a result, the D/E ratio at the
the reconfiguration of organizations related to Veloxis and an expansion in business creation. However, in fiscal 2020, both capital expenditure and R&D end of fiscal 2020 decreased by 0.07, remaining in line with our target ratio of
invested capital associated with an increase in interest-bearing debt following expenses were flat year on year due to strict scrutiny over investments in light around 0.5.
the acquisition of Veloxis. of the impact of COVID-19.
Asahi Kasei Report 2021 Asahi Kasei Group Overview Management Strategy Business Overview Corporate Governance and Corporate Information 6
Risk Management
Non-Financial Highlights
Greenhouse gas (GHG) emissions Energy intensity 1 Workplace injury frequency rate2,3
(Million tons CO2 equivalent) (Index)
5 100 100 3.0 2.79
4.35 100 101
4 .22 4 .16 3 .99 3 .89 96 2.5
4 90
92
2.0 1.93
Target: –30% 80 85 1.81
3
or more by 1.5
2 FY2030 70
1.26 0.84
compared with 1.0
FY2013
1 60 0.35 0.41 0.44
(5.11 MtCO2e) 0.5 0.30
0.21
0 0 0
2016 2017 2018 2019 2020 (FY) 2016 2017 2018 2019 2020 (FY) 2016 2017 2018 2019 2020 (FY)
Japan Overseas
2
umber of accidental deaths and injuries resulting in the loss of one or more workdays, per
N
million man-hours worked
1
Indexed to energy consumption per unit of production in fiscal 2016 as 100 3
Among domestic and overseas subsidiaries and affiliates applying the Asahi Kasei Group
Responsible Care Program
The Asahi Kasei Group has thus far targeted the reduction of greenhouse gas We promote energy conservation at every stage of our business activities to While the frequency rate of lost-workday injuries among employees in Japan
emissions relative to sales (emissions intensity). However, we changed to an prevent global warming and conserve limited resources. Over the past five improved significantly, this rate deteriorated among overseas employees. We
absolute emissions reduction target to indicate a clearer path toward the years, we have made steady improvements, lowering our energy consumption are making improvements by applying measures to avoid recurrence based
achievement of carbon neutrality. We are steadily reducing emissions to achieve per unit of production by 1% annually on average. on analysis of the causes of injuries that have occurred, while implementing
our target and will endeavor to reduce emissions going forward. preventive measures based on risk assessments.
Number of Group Masters Number of women working as managers4 Number of patents
300 300 16,000
257
250
229 231
212 12,000
193 7,219 7,721 7,803
200 180 200 6,509 6,780
171
8,000
124
100 90 100
4,000 7,359 7,458 7,472 7,456 7,411
0 0 0
2016 2017 2018 2019 2020 (FY) 2017/6 2018 /6 2019 /6 2020/6 2021/6 2016 /12 2017/12 2018 /12 2019 /12 2020/12
Japan Japan Overseas
4
esults for personnel employed by Asahi Kasei Corp., Asahi Kasei Microdevices Corp., Asahi
R
Kasei Homes Corp., Asahi Kasei Construction Materials Corp., Asahi Kasei Pharma Corp., and
Asahi Kasei Medical Co., Ltd.
To foster the growth of our human resources while simultaneously capturing Asahi Kasei believes that it is essential for a diverse range of human resources We are focused on building and maintaining an intellectual property network to
external human resources, we appoint, nurture, and reward as Group Masters with a variety of values and backgrounds to play active roles. For this reason, secure competitive advantage. We evaluate whether to maintain or abandon our
individuals with the potential to proactively engage in and contribute to the we foster an environment to support the advancement of women to positions in intellectual property every year, aiming to form an optimal intellectual property
creation of new businesses and the enhancement of established businesses. organizational management. portfolio. As we expand our business globally, it is becoming increasingly
important to obtain patents overseas.
Asahi Kasei Report 2021 Asahi Kasei Group Overview Management Strategy Business Overview Corporate Governance and Corporate Information 7
Risk Management
Addressing Social Issues and Advancing Business Portfolio Strategies —Our Path to Three Sectors—
In every era, the Asahi Kasei Group has addressed social issues by dynamically transforming its business portfolio and
supplying products and services that meet the changing needs of the times. We will continue to contribute to life and living for
people around the world by Creating for Tomorrow.
(¥ billion) (¥ billion)
2,500 Founding and Japan’s first Expansion into petrochemicals Expansion into homes, health care, Progress in overseas business, Accelerated globalization through M&A, 250
production of synthetic ammonia and synthetic fibers and electronics focus on business restructuring expansion of health care business
2,000 200
Net sales (left scale): Material Homes Health Care Others
Operating income (right scale)
Notes: 1. Non-consolidated figures are shown through fiscal 1976; consolidated figures
are shown from fiscal 1977.
1,500 150
2. Color-coded sales are based on classifications at the time of disclosure; results of
health care–related businesses through fiscal 1988 are included in “Others.”
“As industrialists, we must always
remember that our ultimate mission is
1,000 100
to improve people’s standard of living
by supplying an abundance of
the highest-quality daily necessities
500 at the lowest prices.” 50
(Founder Shitagau Noguchi, 1933)
0 0
1922 1940 1950 1960 1970 1980 1990 2000 2010 2020
New business entry, Withdrawal, downsizing,
Social needs and times Asahi Kasei’s evolution Business portfolio transformation
M&A divestment
Establishing the basis for Founding and Japan’s first production • Ammonia Chemical fertilizers,
regenerated fiber,
1922–
• Regenerated fiber
of synthetic ammonia
explosives, etc.
modern life (cupro, viscose rayon) FY1940
• Chemical fertilizer Net sales
•D evelopment of chemical industry and Asahi Kasei contributed to establishment of the basis for
• Foods (monosodium glutamate) ¥ 56
modern agriculture modern life through its businesses such as the production of million
• The Great Depression and World War II Bemberg™ cupro, a regenerated fiber.
Asahi Kasei Report 2021 Asahi Kasei Group Overview Management Strategy Business Overview Corporate Governance and Corporate Information 8
Risk Management
New business entry, Withdrawal, downsizing,
Social needs and times Asahi Kasei’s evolution Business portfolio transformation
M&A divestment
Foods
Sufficiency of daily necessities Expansion into petrochemicals and • Polystyrene Fibers
• Synthetic fiber (acrylic fiber)
•P ost-war recovery and modernization synthetic fibers Chemicals
1940 s–
FY1960
of industry Net sales
After World War II, the modernization of industry advanced in
• Start of period of high economic growth ¥ 44.9
Japan, driving the independence and growth of the Japanese billion
economy. Asahi Kasei embarked on various new businesses that
helped improve the quality of people’s lives.
Improvement in quality of homes, Expansion into homes, health care, • Saran Wrap™
Foods/Health care
Others
Fibers
• Acrylonitrile
development of and electronics • Synthetic rubber Homes/
1960 s–
public infrastructure As the Japanese economy transitioned from a period of high • Ethylene Construction
materials
FY1980
Net sales
economic growth to a period of more stable growth, Asahi Kasei (construction of naphtha cracker)
•P eriod of high economic growth ¥ 800.1
• Autoclaved aerated concrete
• Transition to stable economic growth entered new fields to address diversifying social needs. billion
• Hebel Haus™ unit homes
• Artificial kidneys
• Pharmaceuticals Chemicals
Increased comfort and Progress in overseas business, focus on • Hall elements
Others Fibers
• LSIs
convenience business restructuring • Lithium-ion battery separators
Health care Chemicals
1980 s–
•E mergence and collapse of economic After the collapse of Japan’s economic bubble, Asahi Kasei • Hebel Maison™ apartment buildings FY2000
bubble divested, withdrew, and downsized businesses to achieve a • Insulation panels Net sales
• Two decades of meager economic growth • Acquisition of Toyo Jozo Co., Ltd. ¥1,269.4
selectively diversified portfolio. It was also during this time that
(pharmaceuticals and liquors) billion
we built our platforms for global management. Homes/
• Virus removal filters
Construction
• Foods materials
Electronics
Increasing awareness of the envi- Accelerated globalization through M&A, • Electronic compasses
• UVC LEDs
ronment and quality of life expansion of health care business • Hydrogen production system
Others Material
(process verification) Health care
• egional diversification
R Asahi Kasei accelerated the globalization of its operations and
2000 s–
• Effect of global economic crisis expanded its health care business through mergers and acquisi- • New businesses for homes FY2020
• Advancement of digital technologies (seniors, medium-rise, overseas) Net sales
tions. We reorganized our operations in the three business sectors
• Aging populations and pursuit of health • Critical care ¥ 2,106.1
of Material, Homes, and Health Care for thorough portfolio man- billion
and prosperity • Viscose rayon, acrylic fiber, polyester
• COVID-19 pandemic
agement with optimal allocation of management resources and Homes
• Restructuring of petrochemical
• Rising interest in carbon neutrality and greater generation of synergies between business domains. business
the circular economy • Liquors
Asahi Kasei Report 2021 Asahi Kasei Group Overview Management Strategy Business Overview Corporate Governance and Corporate Information 9
Risk Management
Management Strategy
Asahi Kasei Sustainability Photo Contest
Name Wei Gu
Company Asahi Kasei Transfusion Technology Co., Ltd.
Country/region China
Care for People, Care for EarthAsahi Kasei Report 2021 Asahi Kasei Group Overview Management Strategy Business Overview Corporate Governance and Corporate Information 10
Risk Management
Message from the President
In this time of uncertainty, we will pave
the way for the next 100 years by taking
the initiative in realizing a virtuous cycle
between “contributing to a sustainable society”
and “sustainable growth of corporate value”
while leveraging our “diversity” and
“capability to change.”
Hideki Kobori
PresidentAsahi Kasei Report 2021 Asahi Kasei Group Overview Management Strategy Business Overview Corporate Governance and Corporate Information 11
Risk Management
Working to thoroughly reinstitute safety and to restore trust
The Asahi Kasei Group implements Responsible Care, a chemi- accidents occurred at Asahi Kasei plants in fiscal 2020. A recurrence. Furthermore, we are raising the level of safety
cal industry initiative promoting dialogue with society with the worker died in an explosion at our Moriyama Works in Shiga awareness of the organization as a whole and of each and every
goal of preserving the environment and ensuring safety, health, Prefecture, while the outbreak of a fire at our semiconductor employee by communicating the preventative measures
and quality by thoroughly practicing the three fundamental plant in Nobeoka in Miyazaki Prefecture also affected our throughout the Asahi Kasei Group. Respect for human life and
“actuals,” which focus on the actual place, actual thing, and business partners. I once again offer my sincere apologies to safety are core values of our business. We will strive to regain
actual fact throughout the life cycle of all of the products and everyone concerned. We are investigating the causes of each trust by earnestly working to ensure the safety of communities
services that we provide. Despite these efforts, two serious accident and thoroughly implementing measures to prevent any and our employees.
Dramatic change in our business environment triggered by the COVID-19 pandemic and the positioning of “Cs+ for Tomorrow 2021”
The global spread of COVID-19 continues to bring about discon- rights issues such as forced labor. In this fast-changing world, value that will be highly regarded by society going forward, and
tinuous and uncertain change. As the pandemic brought new we must maintain an awareness of all manner of opportunities we are continually focusing the allocation of management
social and environmental issues into focus, people’s awareness and risks and boldly take on challenges as a company at the resources to these five priority fields.
of life, health, and hygiene as well as their values in relation to forefront of change. Wherever there is change, there are business opportunities.
work and lifestyles have changed dramatically. I believe that In 2019, the Asahi Kasei Group launched the “Cs+ for In this era of great uncertainty, we will take a proactive approach
increasing emphasis will be placed on the fulfillment of individu- Tomorrow 2021” medium-term management initiative. While we by leveraging our strengths, which are the “diversity” of our
als in their lives and careers due to these changes. promoted various measures for the two mutually reinforcing human resources, technologies, and businesses and the “capa-
Meanwhile, global warming—the primary cause of climate aspects of sustainability of “contributing to the sustainability of bility to change” created by the ingenuity of our individual
change—has become a pressing issue for mankind. Amid these society” and “the sustainable growth of corporate value,” our employees, organizations, and the company as a whole.
circumstances, public- and private-sector initiatives aimed at basic approach remains unchanged. In regard to “contributing
realizing carbon neutrality by 2050 are proceeding at a rapid to the sustainability of society,” we set forth “Care for People,
pace that would have been unimaginable a year ago. We also Care for Earth” to clarify our stance of continuing to contribute to
need to urgently respond to changes in international affairs the sustainable development of people and the earth. We also
resulting from the decoupling of the United States and China, identified Environment & Energy, Mobility, Life Material, Home &
and to all aspects of the entire supply chain, including human Living, and Health Care as priority fields where we can provideAsahi Kasei Report 2021 Asahi Kasei Group Overview Management Strategy Business Overview Corporate Governance and Corporate Information 12
Risk Management
Progress on “Cs+ for Tomorrow 2021”
In fiscal 2020, the second year of “Cs+ for Tomorrow 2021,” we In Health Care, the acute critical care business, which we The Health Care sector performed well in fiscal 2020,
proceeded steadily with initiatives in our priority fields for provi- have positioned as a core driver of growth, entered into the recording increased net sales and operating income. On the
sion of value amid a business environment that continues to respiratory dysfunction field by acquiring Respicardia, Inc. In other hand, results in the Material sector fell significantly short of
change unpredictably. addition, we steadily expanded the pharmaceutical business our plan at the time of formulating “Cs+ for Tomorrow 2021”
In Environment & Energy, we are incrementally increasing through such measures as working to increase sales of Envarsus due in part to a deterioration in business stemming from the
our production capacity for lithium-ion battery separators in XR™, an immunosuppressive drug for kidney transplant decoupling of the United States and China and a decline in
line with the growth of the market for eco-friendly electric patients manufactured by Veloxis Pharmaceuticals, Inc., which demand for products for the automotive market and petrochemi-
drive vehicles. In Mobility, we are expanding the business of we acquired in fiscal 2019. cals. Meanwhile, in the Homes sector, results lagged one year
Sage Automotive Interiors, Inc., a manufacturer of automobile While the Asahi Kasei Group was steadily promoting such behind the plan due to a decrease in orders received resulting
interior fabric, while generating synergies with Lamous™, an initiatives, lockdowns were implemented in major cities around from restrictions on customers visiting model homes in Japan
environment-friendly artificial suede. In Life Material, we the world and a state of emergency was declared in Japan in because of COVID-19. However, we are beginning to see a
decided to build a second plant for Ceolus™ microcrystalline response to the spread of COVID-19. As the shortage of medical recovery in the Homes sector as a result of efforts to attract
cellulose, which is scheduled for completion in spring 2023, products became a serious issue due to the global suspension customers in ways other than through model homes.
in order to expand our output of high-performance products of production and distribution, we acted quickly to provide a Our financial condition is sound, reflecting our emphasis
for pharmaceuticals. response. Our actions included temporarily ramping up produc- on financial discipline, careful selection of capital expenditure
In Home & Living, we are working to contribute to the tion capacity of ventilators to 10,000 per month, the equivalent and investment projects, and thorough implementation of
achievement of a carbon neutral society and to enhance resil- of 25 times that of our usual output, increasing the production of appropriate control of inventories and expenses taking into
ience to disasters with the aim of building sustainable urban material for medical gowns and masks, and supplying virus consideration the circumstances in each sector. Going forward,
environments. Meanwhile, to make the expansion of the over- removal filters required for the development of vaccines and we will improve our capital efficiency and cash-generation
seas business in the United States and Australia a pillar of pharmaceuticals. These actions exemplify how we leverage our capabilities by steadily implementing investments in projects
growth, we are developing business models adapted to the “diversity” and “capability to change” to quickly identify changes that will contribute to growth over the medium to long term and
specific characteristics of each of these countries. in the business environment and adapt in a flexible manner. the transformation of our business portfolio, with a focus on theAsahi Kasei Report 2021 Asahi Kasei Group Overview Management Strategy Business Overview Corporate Governance and Corporate Information 13
Risk Management
Performance and Outlook by Sector
Current Situation by Sector* Outlook
Material
• Prioritization of profitability and capital efficiency over
Health Care • Slower growth and lower income due to environmental change
• Recovery under way, but performance below target increased scale; acceleration of portfolio transformation
FY2019 FY2020 FY2021 • Thorough financial discipline; strict selection of
Profitability (operating margin)
Sales 1,093.1 991.2 1,168.0
Material growth investments
Operating income 92.4 66.5 100.0
Operating margin 8.4% 6.7% 8.6%
Homes
• Domestic business recovering from COVID-19 impact but 1 year • Domestic growth in homes for seniors and medium-rise
behind plan homes; overseas expansion in the U.S. and Australia
Homes • Consolidation of McDonald Jones Homes
• Use of IT to raise profitability; continued cash flow
FY2019 FY2020 FY2021
Sales 704.4 692.6 791.0 contribution
Operating income 72.7 63.5 67.0
Operating margin 10.3% 9.2% 8.5%
Growth (revenue growth rate)
Health Care
• High earnings growth and profitability through returns
Dotted circle: current term • Increased demand for ventilators and virus removal filters;
income growth forecast to achieve target on previous investments
Solid circle: mid-term target
Circle size: operating income amount FY2019 FY2020 FY2021 • Continued investment for further expansion as
Sales 337.8 407.9 400.0
growth driver
Operating income 43.5 67.6 55.0
Operating margin 12.9% 16.6% 13.8%
* FY2019–FY2020 results, FY2021 forecasts (announced in May 2021); ¥ billion
cost of capital while maintaining our sound financial condition. continuous dividend increases from a medium- to long-term
We plan to deliver returns to our shareholders at the level perspective through the sustained generation of cash flow
envisaged when formulating “Cs+ for Tomorrow 2021” by while paying close attention to the balance between invest-
adhering to our policy of aiming for stable dividends and ments for growth and our financial position.Asahi Kasei Report 2021 Asahi Kasei Group Overview Management Strategy Business Overview Corporate Governance and Corporate Information 14
Risk Management
Proactively reformulating our business strategy to accelerate the transformation of our business portfolio
In fiscal 2020, we advanced the allocation of management monitored conditions in these 15 businesses and have already COVID-19 pandemic, our businesses that hold the leading or
resources to our priority fields for provision of value and proac- begun taking action with a view to implementing structural second-leading market share have maintained and strengthened
tively reformulated our business strategy to accelerate the reform in several of them. relationships with customers and business partners. Moreover,
transformation of our business portfolio. In a business environ- Going forward, we will further emphasize the perspective of these businesses have also succeeded in obtaining and lever-
ment subject to discontinuous and uncertain change, it is market position to evaluate businesses. In fact, even in a busi- aging a range of market information. We will further solidify
becoming increasingly necessary to grow earnings sustainably ness environment in which it is challenging to develop face-to- businesses with strong market positions with the aim of achiev-
using limited capital in order to continuously meet the expecta- face relationships with new customers due to the ongoing ing a more profitable portfolio of value-added businesses.
tions of various stakeholders.
Given such circumstances, we strengthened evaluations of
Business Portfolio Transformation
our business portfolio from the perspective of capital efficiency
while integrating evaluations of the sustainability of our busi- Strategy reformulation
Business evaluation businesses
Strategy study for individual businesses
nesses from the perspective of social issues and global environ-
mental problems. Specifically, building on evaluations using
profitability (operating margin) and growth (revenue growth
Evaluated by profitability (operating margin) Reconsidered strategy based on view of
rate), we implemented business evaluations that added capital and growth (revenue growth rate) competitive environment impacted by
efficiency (ROIC) and cost of capital perspectives, sustainability COVID-19 pandemic
Additional evaluation to classify businesses
perspectives (making use of quantitative indicators such as GHG in 4 categories Among approx. 60 Set KPIs and milestones for strategy refor-
emissions), and the perspectives of profit amount, profit volatil- • ROIC, cost of capital businesses evaluated mulation, continually monitoring progress
ity, and business stage. • Sustainability (GHG emissions, etc.)
• Profit amount, profit volatility,
15 businesses Process stages
Based on the results of the business evaluations, we identi-
business stage 1) Study strategies/directions of businesses
fied 15 businesses as strategy reformulation businesses from
4 categories Mainly commodity
among approximately 60 businesses evaluated, centered on
products in 2) Formulate specific measures/action plans
businesses handling commodity products in the Material sector High earnings Material sector
Growth driver
in particular. Senior management, including myself, and the base
3) Execute measures
leaders of each business carried out strategy reexaminations Strategy
Strengthening
taking into consideration the discontinuous and uncertain com- reformulation
Actions begun for structural reform
petitive environment in the future. After setting key performance
of several businesses
indicators (KPIs) and milestones, we have continuouslyAsahi Kasei Report 2021 Asahi Kasei Group Overview Management Strategy Business Overview Corporate Governance and Corporate Information 15
Risk Management
Pursuing sustainability aimed at achieving carbon neutrality and a circular economy
We pursue “Care for People, Care for Earth” under “Cs+ for the collective knowledge of the Asahi Kasei Group. efficiently by consolidating projects for environmental contribu-
Tomorrow 2021.” By “Care for People” we aim to contribute to The goal of realizing carbon neutrality by 2050 represents a tion technologies and products, such as those for green hydro-
the achievement of a society in which people can lead active major challenge that transcends generations. I believe our gen- gen using alkaline water electrolysis technology, CO2 separation
lives in the new normal, while “Care for Earth” indicates our eration must begin to do what we can now as a party with a and recovery systems, and next-generation CO2 chemistry tech-
contribution to the creation of a sustainable world through the stake in realizing carbon neutrality and pass on the results of our nology, while unifying contact points with external organizations.
achievement of carbon neutrality and a circular economy. efforts to the next generation, rather than leave tackling this We also recognize that the material industry has a major
The Asahi Kasei Group has been implementing various major challenge to those who come after us. We will formulate a part to play in the creation of a circular economy. With this in
initiatives contributing to the achievement of carbon neutrality road map and accelerate initiatives to achieve our targets of mind, several of our organizations are examining fields where
and a circular economy. Amid these efforts, in May 2021 we energy consumption reduction, energy decarbonization, manu- we can make a contribution. As one example, we have built a
announced our goal of achieving carbon neutrality (net-zero facturing process innovation, and the transformation of our platform in partnership with IBM Japan, Ltd., that visualizes
carbon emissions) by 2050* to create a sustainable world. We business portfolio to low-carbon businesses centered on the and manages the supply chain utilizing blockchain technology
have also set a target to reduce our GHG emissions by 30% or Material sector. for the recycling of used plastic. During fiscal 2021, we will
more by 2030 compared with fiscal 2013. In April 2021, we established the Green Solution Project, conduct demonstration trials and carry out verification to
In the process leading up to our announcement on carbon which is under my direct authority as president, with the aim of ensure traceability.
neutrality, senior management, including myself, and the lead- strengthening business creation to achieve carbon neutrality. * Direct GHG emissions from business activities as indicated by Scope 1 (direct GHG
emissions) and Scope 2 (indirect GHG emissions from use of electricity, heat, and
ers of each business carefully carried out repeated discussions Based on an overarching view of markets related to decarbon-
steam supplied by other companies)
to verify the impact of carbon neutrality on all of our stakehold- ization, this project will create new businesses leveraging our
ers. Ultimately, based on our Group Mission of contributing to superior technologies to accelerate commercialization while
life and living for people around the world, we concluded that promoting partnerships with other companies, the public sector,
we could achieve carbon neutrality by 2050 if we drew upon and academia. We will endeavor to develop businessesAsahi Kasei Report 2021 Asahi Kasei Group Overview Management Strategy Business Overview Corporate Governance and Corporate Information 16
Risk Management
Implementing digital transformation and strengthening our human resource foundations for creating new value
The Asahi Kasei Group proactively promotes digital transforma- acquiring digital human resources. We are strengthening DX telecommuting, bolstering the development of professional
tion (DX) as a pillar of our growth strategy to transform business training for employees to promote measures for cultivating all human resources by enhancing the Group Masters program,
models and create value. In April 2021, we established Digital employees to digital human resources, under which we aim for implementing measures aimed at revitalizing our organizations
Value Co-Creation. By transferring digital-related organizations all employees to work with a mindset for utilizing digital technol- and spurring the growth of our human resources based on the
that had been divided among multiple units under the oversight ogy, including through the Open Badge system. At the same results of a new engagement survey, and nurturing the next
of the new unit and consolidating human resources and knowl- time, we will increase the number of digital professional person- generation of leaders. In these ways, we are providing support for
edge therein, we will entrench DX initiatives group-wide, which nel to 230 by the end of fiscal 2021 via the implementation of the growth of employees of all ages and positions in accordance
will enable us to transform our business models and create new development programs and new recruitment. with the career plans of their choice.
businesses. In May 2021, we formulated our DX Vision 2030 to From the perspective of strengthening our human resource We are also proactively advancing measures in relation to
clarify our aspiration for DX. foundations, we are encouraging “lifetime growth” in which health and productivity management. I believe that maintaining
In January 2021, prior to establishing Digital Value diverse individuals enhance their expertise and grow continu- and improving the physical and mental health of employees and
Co-Creation, we opened CoCo-CAFE, a digital co-creation labo- ously even in times of dramatic change. We are once again their families is the foundation for employee vitality and growth.
ratory. With the opening of this laboratory, we aim to fortify our reviewing workstyles and mechanisms for developing human To create opportunities for employees to play active roles and
DX foundations and create value by gathering together digital resources while creating foundations that support the autono- achieve growth, we will focus on reducing the rate of absence
human resources from various functions, such as marketing, mous growth of employees and enable diverse individuals to due to ill health, enhancing motivation for work, and fostering a
research and development, and production technology, to con- thrive, guided by the basic principle that “people are our core strong organizational culture of ambition, which will in turn help
nect knowledge held inside and outside the company. assets; everything starts with people.” Examples of our endeav- raise productivity.
Besides these efforts, we are also proactively developing and ors include recommending diverse workstyles such as
Strengthening corporate governance and risk management to improve corporate value
Corporate governance and risk management are vital elements Audit & Supervisory Board Members and their various back- of corporate value while incorporating the perspectives of a wide
for steadily implementing our management strategies and the grounds as we make the most of our “diversity” and “capability range of stakeholders in a timely manner. These discussions
business activities and initiatives to strengthen our foundations to change.” In a fast-evolving business environment, we will included the sharing of a broad range of information on the
based on them, as well as for enhancing our operations. continue to review corporate governance as a mechanism for substance of communications with investors and shareholders
With our corporate governance structure, we have in place a making optimal decisions transparently, fairly, promptly, and and on the promotion of sustainability as well as deliberations
system to gain appropriate oversight and advice, paying atten- boldly. At Board of Directors’ meetings in fiscal 2020, we carried concerning the transformation of our business portfolio.
tion to the proportion of Independent Outside Directors and out free and open discussions on our policy for the improvementAsahi Kasei Report 2021 Asahi Kasei Group Overview Management Strategy Business Overview Corporate Governance and Corporate Information 17
Risk Management
In respect to risks, we have placed particular priority on consideration for the environment, safety, health, and quality. In business and draft contingency plans in response to important
export control regulations due to the decoupling of the United order to heighten the risk awareness of each and every risks. In addition, the Risk Management & Compliance
States and China, human rights issues encompassing the entire employee, as well as the Asahi Kasei Group as a whole, and deal Committee, which I chair, thoroughly confirms and follows up on
supply chain, cyber security including the dissemination of decisively with risks, managers responsible for risk management the progress of group-wide risk countermeasures.
information centered on social networking services, and and compliance identify, assess, and analyze risks in each
Our Commitment toward the Next 100 Years
Fiscal 2022 will see the launch of the Asahi Kasei Group’s next Kasei Group will take on the challenge of achieving a new trans-
medium-term management initiative and mark the centennial of formation to ensure that our commitment to “Care for People,
Asahi Kasei’s founding. Shitagau Noguchi, our founder, stated Care for Earth” endures for another century thanks to the “diver-
that “As industrialists, we must always remember that our ulti- sity” of our human resources, technologies, and businesses and
mate mission is to improve people’s standard of living by supply- the “capability to change” that springs from the ingenuity of our
Hideki Kobori
ing an abundance of the highest-quality daily necessities at the employees, organizations, and the company, cultivated over the
President
lowest prices.” By continuing to adhere to this vision, the Asahi past century.
Management Direction for the Next 100 Years
1. Realize the two aspects of • Providing solutions for a sustainable society through innovative technologies and
sustainability for Asahi Kasei advanced initiatives
• Providing value expected by society to realize sustainable growth of corporate value
2. Strengthen corporate governance • Pursuing both high profitability and capital efficiency and sustainable profit growth
and management of operations in • Pursuing synergies between businesses and dynamic portfolio transformation
the three business sectors
3. Further enhance business platform, • Providing a venue where diverse individuals can thrive with high motivation
the fundamental strength of • Maximizing use of intangible assets such as diverse core technologies and
Asahi Kasei accumulated know-how
• Upgrading and streamlining operations and reforming business models through DXAsahi Kasei Report 2021 Asahi Kasei Group Overview Management Strategy Business Overview Corporate Governance and Corporate Information 18
Risk Management
Value Creation Model
Contribution to sustainability (non-financial indicators identified in the materiality analysis) Sustainable growth of corporate value (average between fiscal 2018 and 2020)
Net sales ¥ 2,142.7 billion EBITDA ¥ 304.8 billion ROE 8.1 %
Outcome Contribution to the Contribution to health Contribution to
global environment and longevity comfortable life Operating income ¥ 186.2 billion EPS ¥ 79 ROIC 6.8 %
Business portfolio management capability Contributing to sustainable society Strengthening business foundations
through the “Cs”
Group Mission Contributing to life and living for people around the world
Care for People, Care for Earth
Material Homes Health Care he Asahi Kasei Group’s Vision for the Future
T
of People and the Earth (P19–21),
Ability to Pursuit of Carbon Neutrality and
manage diversified Environment Life Home Health a Circular Economy (P22–26)
Mobility
business & Energy Material & Living Care
Compliance
Materiality (P19), Risk Management (P62–64)
Care for People, Care for Earth Communication
Human Resource Strategies (P39–41),
Ability to Ability to Health and Productivity Management (P42)
ascertain business transform business Challenge/Connect
Employee action principles Creating new value
characteristics portfolio Pursuit of Carbon Neutrality and
Compliance Communication Connect a Circular Economy (P22–26)
New Business Creation (P29–33)
Challenge Digital Transformation (P34–38)
Diversity & Capability to Change
Strong financial foundation Technologies in a wide range Human resources involved Contact points with
D/E ratio: 0.451 of fields in multiple businesses various markets
Input Credit rating: AA (JCR)2 (polymers, compound semiconductors,
homes, pharmaceuticals, etc.)
Number of employees: 44,497 1
Bases: More than 20 countries and regions 1
(automotive, electronics, hospitals,
consumers, etc.)
Financial and Capital Policy (P43 – 44) New Business Creation (P29 – 33) Human Resource Strategies (P39 – 42) Review of Operations (P46 – 51) 1
As of March 31, 2021
2
As of June 30, 2021Asahi Kasei Report 2021 Asahi Kasei Group Overview Management Strategy Business Overview Corporate Governance and Corporate Information 19
Risk Management
The Asahi Kasei Group’s Vision for the Future of People and the Earth
The Asahi Kasei Group contributes to solutions for various social issues through business activities aimed at achieving sustainability. With a uniform
aspiration of “Care for People, Care for Earth” when creating value in all of our businesses, we will deliver new value in a variety of fields that contribute
to the sustainability of society.
Materiality
In fiscal 2017, we identified the important issues and themes that Process for Identifying Materiality
we should prioritize as the materiality of the Asahi Kasei Group. 1) Identification of Issues 3) Evaluation of Appropriateness
We have since added two new material issues—Initiatives toward We identified issues in light of requirements of society and our We verified the appropriateness of the material issues by examining
Carbon Neutrality and Initiatives toward a Circular Economy—in Group Mission, Group Vision, and Group Values while making them from a diverse range of perspectives, such as through delib-
consideration of the further growing sense of urgency regarding reference to international guidelines such as ISO 26000 and the erations involving the leaders of various divisions, discussions with
the global environmental impact of climate change and resource Global Reporting Initiative (GRI) Standards as well as the evalua- outside companies, and consultations with Outside Directors.
extraction and depletion as well as the importance of these mat- tion criteria of the major ESG rating institutions. 4) Examination and Approval
ters to the management of the Asahi Kasei Group. 2) Determination of Degree of Importance The Board of Directors approved the material issues after exami-
We evaluated the degree of importance both to society and to the nation at the Management Council.
Extremely
important
Asahi Kasei Group and mapped it on two axes.
Highest priority Compliance/
Governance Human rights Safety/quality Governance Asahi Kasei is constantly pursuing an optimal state of corporate governance. ( P53–56)
as premise sincerity
Extremely While strictly following laws, regulations, and internal rules, Asahi Kasei strives to practice a high level of corporate
important
Business Global environment Compliance/ ethics while engaging in various business activities in good faith.
Contribution to Health and longevity sincerity All executives and employees of the Asahi Kasei Group adhere to the Asahi Kasei Group Code of Conduct and
( P21) Comfortable life undergo thorough training in their departments, including case study sessions in fiscal 2020.
Importance for stakeholders
Wastewater ( WEB) Decarbonization ( P23, 24, 26) Asahi Kasei endorses and is a signatory to the United Nations (UN) Global Compact. In addition, we are formulating a
Industrial waste ( WEB) Circular economy ( P25) human rights policy in accordance with the UN’s Guiding Principles on Business and Human Rights and will imple-
Human rights
Supply chain management ( WEB) ment human rights due diligence to ascertain human rights violation risks in the business value chain and take action
to prevent or reduce such risks.
Communication with
stakeholders ( WEB)
Operational Safety; Workplace Safety and Hygiene
Biodiversity ( WEB) Diversity ( WEB)
Through our Responsible Care program, we aim to achieve zero severe industrial accidents and zero occupational
Social contribution ( WEB) Human resources ( P39 – 42)
injuries. We provide employees with education and training, perform risk assessments during construction in order to
Risk management ( P62– 64)
ensure safe and stable plant operation, and repeatedly review existing processes.
Safety/quality
Quality Assurance
Extremely Asahi Kasei focuses on activities to improve quality in order to continue providing reliable quality to our customers. In
important
Importance for the Asahi Kasei Group fiscal 2020, we strengthened the quality assurance system, augmented employee training to develop human resources for
managing and ensuring quality, performed on-site quality audits, and conducted verification and inspection activities.
Harmony with the natural environment Health and comfort Basic activitiesAsahi Kasei Report 2021 Asahi Kasei Group Overview Management Strategy Business Overview Corporate Governance and Corporate Information 20
Risk Management
Provision of Value through Our Businesses for Realizing a Sustainable Society
To achieve our vision for the future of people and the earth and Mobility, and Life Material in the Material sector, Home & Living business activities while pursuing the development of a portfolio
provide greater value to society, we have determined five priority in the Homes sector, and Health Care in the Health Care sector. of high-profitability and high-value-added businesses from the
fields for provision of value and are allocating management In these priority fields for provision of value, we will continue perspective of “Care for People, Care for Earth.”
resources to them. These fields are Environment & Energy, contributing to the future of people and the earth through our
• Expansion of clean energy • Progress of CASE • Rising global population • Diversifying lifestyles • Advancement of longevity society
Social issues (Connected, Autonomous, Shared &
• Transition to carbon neutrality and • Next-generation communications • Intensifying natural disasters
and trends Services, and Electric)
a circular economy revolution
Material Homes Health Care
Environment Life Home Health
Mobility
& Energy Material & Living Care
Asahi Kasei Group’s
Contributing to the environment Contributing to the future of mobility Contributing to healthy and comfort- Contributing to superior social Contributing to healthy longevity
priority fields
with wide variety of technology with technology for safety, comfort, able daily life with distinctive prod- infrastructure and comfortable living with pharmaceuticals and medical
for provision of value (CO2 chemistry, semiconductors, etc.) and the environment ucts and technological strength through our know-how gained devices discerning the needs of
in urban markets the aging society
Care for People
Contribution to secure and comfortable life and to health and longevity
Care for Earth
Business contribution to the global environment
• Clean energy • Society with safe and comfortable • Comfort and convenience • Safety and reliability • Achievement of society with
• Conservation of energy and improve- mobility • Human health • Comfortable and healthy life healthy longevity
ment of the environment
• Contribution to carbon neutrality
Provision of value and a circular economy
to societyAsahi Kasei Report 2021 Asahi Kasei Group Overview Management Strategy Business Overview Corporate Governance and Corporate Information 21
Risk Management
Increasing Opportunities through Care for People, Care for Earth
Care for People Care for Earth
Active life Carbon neutral
in the new normal sustainable world
With the aim of creating a society in which health and longevity and a secure and comfortable We are accelerating innovations for addressing a variety of environmental issues, such as realizing
life are available to all, we facilitate high-quality medical care and fulfilling life through our tech- carbon neutrality and a circular economy, and offering solutions through our businesses.
nologies, products, and solutions.
Social Issues Solutions through Our Businesses Social Issues Solutions through Our Businesses
Contribution to secure and comfortable life Business contribution to the global environment
Storm and flood damage / • Resilient homes/communities (total resilience) Circular economy • Material recycling
Intense heat • Chemical recycling
New styles of living and working • Homes/consumables/apparel meeting new needs Carbon recycling • CO2 separation/recovery
Digitalization • Products related to next-generation communications • CO2 chemistry
(glass fabric, etc.) Next-generation energy • Alkaline water electrolysis (green hydrogen)
Contribution to health and longevity Electric drive vehicles • Lithium-ion battery separator
Response to COVID-19 • Ventilators • Lightweighting resins
• Therapeutic apheresis Other environmental contribution • Ion-exchange membrane process for chlor-alkali
• Virus removal filters products electrolysis
• Surface disinfection solution • Purging agent for plastic molding machines
• 3Cs visualization solution • Elastomer for asphalt modification
• Medical gowns • CO2 sensors
• Masks • S-SBR synthetic rubber for fuel-efficient tires
Facilitation of high-quality • Defibrillators • Hebel Haus™, Hebel Maison™
medical care • Implantable neurostimulator device • High-performance insulation
• Osteoporosis treatment • Biomass feedstock products
• Rheumatoid arthritis treatment • Manufacturing process for acrylonitrile
• Immunosuppressive agent • High-volume water filtration module
• Artificial kidneys • Bio-PLA (polylactic acid) nonwoven fabricYou can also read
