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CSR Report 2012

Executive Commitment

Representative Director and President Mitsunobu Koshiba

We provide materials that will bring new value to society.
The JSR Group will continue to take on challenges, utilizing innovation as our driving force.

Reaffirming the Importance of Business Continuity as a Materials Manufacturer

In FY2012 (April 1, 2011 to March 31, 2012), we were confronted with two severe problems – the Great East Japan Earthquake and the serious flooding in Thailand. It was fortunate that none of the JSR Group's business establishments suffered critical or direct damage. However, at the time of the Great East Japan Earthquake, some of our raw materials suppliers were affected by the disaster, forcing our Kashima Plant in Ibaraki Prefecture to discontinue its operation for two months. At the time of the Thai flooding, the production of many Japanese companies, some of which were our customers, was seriously affected.
These natural disasters made us keenly aware once again of the extensiveness of the areas covered by the material industry. Partly because we were able to secure a safe inventory that was not affected by the disasters, we successfully avoided causing considerable inconvenience to our customers. However, since the JSR Group's products are used in a wide range of important parts and materials for automobiles and lifeline products, we received many inquiries regarding the continuity of supply of our products.
In FY2012, these experiences made us, as a materials manufacturer, once again strongly realize the importance of continuing our business operation. We have already commenced the review of not only our initial responses to disasters and accidents, but also our more comprehensive business continuity management (BCM).

Achieving Business Reform through Materials Innovation

Under our Corporate Mission of "Materials Innovation," the JSR Group takes actions with a view to enriching society, people and the environment by creating value through materials.
JSR 20i3 ("twenty thirteen"), the mid-term business plan launched in FY 2012, presents the type of business entity that the JSR Group desires to be in 2020. JSR 20i3, a three-year plan, is positioned as the first step toward realizing the target. To formulate the plan, we analyzed our business environment until 2030. Of the three macro trends of "climate change," "the development of newly emerging economies," and "shortage of food and water," we believe that the first one is particularly crucial. While environmental problems pose a risk to companies, they also serve as business opportunities. Taking this into consideration, we are developing the E2 Initiative™, which is our effort regarding the environment to create value on both the aggressive and defensive fronts: the former comprises the products and services area of our business, and the latter, the internal activities and processes. Under the Initiative, we strive to strike an optimal balance between Eco-innovation, which focuses on the creation of new business opportunities, and Energy Management, which emphasizes the reduction of CO2 emissions.
The "innovation" referred to here is more than just creating something new. For example, the CO2 impact generated by the production of synthetic rubbers for fuel-efficient tires is larger than that of traditional types of synthetic rubbers. However, when compared in terms of the CO2 impact generated during the entire lifecycle of an automobile, fuel-efficient tires contribute to a considerable reduction of the gasoline consumption needed for driving, resulting in a significant decrease in the total environmental impact. In Europe and many other regions, laws and regulations are being established regarding the fuel efficiency of automobiles, making fuel-efficient tires inevitable for dealing with the trend. Under JSR 20i3, existing materials generate new value and applications in the micro trend. This is also a form of "innovation."
We will continue to emphasize the conservation of biodiversity, which is deeply connected with our Group's business practices. In FY2012, we analyzed how our business activities impacted and depended on biodiversity, as well as initiating efforts regarding our raw material procurement and plant land use. Based on these, we formulated the Biodiversity Policies and established our direction.
Under the concept of "Innovation One-on-One," the JSR Group has provided materials needed by world-top-class companies in various fields such as those of automobile tires, semiconductors, and liquid crystal displays (LCDs). We have offered such materials on a one-to-one basis and have created value with the cooperation of customers. This capability to adjust to our customer’s needs has made us highly valued. However, in the fields of the environment, energy, and life sciences, which are expected to grow in the future, both the number and scale of our business partners are large. To increase our presence as a materials manufacturer in such a value chain, I think that it is imperative for us to transform into a company with global standards of technologies and materials. While maintaining our previous pattern for achieving success, we will also create a business model superior to that pattern. This is the very thing that the JSR Group aims for toward 2020. When we look back on the first year of JSR 20i3, we find that the macro trend was going in the direction that we expected, although the speed was much faster than we expected. With our confidence and courage, we aim to accelerate JSR 20i3 even further.

Creating a Corporate Culture Encouraging a Wide Diversity of Human Resources to Take on Challenges

Office scene

I believe that the keywords of the former half of the 2010s are "uncertainty" and "diversification." Of the JSR Group's total sales, the ratio of overseas sales is currently approximately 45%, which is expected to increase to approximately 70% in 2020. What will be required at that time to support the development of the Group is a wide diversity of human resources. We will make the JSR Group an organization where a rich variety of human resources can work without any barriers, and each of our staff can fully demonstrate his/her ability. The basis for the judgment of value in such an organization is laid on JSR Group's Essential Elements, which were revised in 2011.
The new Essential Elements have enabled all our staff to share what the JSR Group aims for. However, it is not enough simply to formulate the Elements; these Elements gain significance only after they have been instilled deeply into each of our staff. In this regard, we are making efforts to deepen understanding of the Elements. For example, I am disseminating my messages, and in-house explanatory meetings are being held. Additionally, questionnaire surveys have been conducted throughout the entire JSR Group. Although the Essential Elements have begun to be instilled steadily, we do not think that this is enough. It will take a long time, perhaps five or 10 years, to fully raise our staff's awareness of the Elements. We will continue to make necessary efforts within the entire JSR Group.
When a business environment changes drastically, it is necessary for each staff member to maintain his/her competitive strength on a global level and take on challenges in his/her field. Moreover, it is important to make changes continuously by responding flexibly to a situation with uncertainty. It is also crucial for a wide diversity of human resources to accept each other's values and cultural differences. We would like to create a corporate culture that encourages such human resources not only to maintain discipline, but also to take on challenges freely without hesitation.

Challenges to Fulfill Responsibility to Stakeholders

When reviewing the Essential Elements, we also reexamined our Responsibility to Our Stakeholders.
The JSR Group can be called a "stealth" company. For example, the Group's products used for smartphones and LCDs cannot be directly identified by end-users, but they are all materials essential to such items. We hope to continue to be a materials manufacturer that is indispensable for customers in the making of their innovative products, and that provides the customers with feelings of reliance and expectation. In the previous "Business to Business (B to B)" format, the concept of "product-out" was dominant. However, in order to ensure sustainable company development in the future, it is vital to increase customer satisfaction by improving functional performance, quality, service, and cost competitiveness. From this point of view, importance should be placed on "customers / business partners," as well as on "employees," who are the cornerstone of business, and "society," which includes the global environment. We believe that if we can firmly fulfill our responsibility to these stakeholders, it automatically means that we will fulfill our responsibility to our "shareholders." The responsibility to the stakeholders is important in every aspect of the operation of our global business. The JSR Group, a participant in the United Nations Global Compact, will continue to perform our corporate social responsibility more actively even in the international society.

Providing materials that will solve customers' problems through business, and presenting materials that will surprise the world - and thereby improve society – to achieve these goals, the JSR Group will continue to take on challenges.

Mitsunobu Koshiba
Representative Director and President
JSR Corporation
Mitsunobu Koshiba


CSR Report 2012