8 SHOWA DENKO REPORT 2017
An Overview of the Showa Denko Group (as of December 2016)
Institute for Integrated Product Development
B
Head O�ce
Nagoya Branch
Osaka Branch
Fukuoka Branch
Kawasaki O�ce
Institute for Advanced and Core Technology
A
Higashinagahara Plant
Kitakata Plant
Isesaki Plant
Oyama Plant
Oyama Plant (Nasu)
Chichibu Plant
Kawasaki Plant
Yokohama Plant
Omachi Plant
Shiojiri Plant
Hikone Plant
Sakai Plant
Tatsuno Plant
Tokuyama Plant
Chiba Plant
B
For information on main Group companies in Japan, please go to the P17
1 A
EuropeSHOTIC Europa Industria de Aluminio Lda.
Showa Denko Europe GmbH
North AmericaShowa Denko Carbon, Inc.
Showa Aluminum Corporation of America
Showa Denko America, Inc.
East AsiaShanghai Showa Chemicals Co., Ltd.
Shanghai Showa Highpolymer Co., Ltd.
Shanghai Showa Electronics Materials Co., Ltd.
Shanghai Showa Highpolymer Trading Co., Ltd.
Zhejiag Quzhou Juhua Showa Electoronic Chemical Materials Co., Ltd.
Showa Denko Sichuan Carbon Inc.
Showa Denko (Dalian) Co., Ltd.
Showa Denko Aluminum (Nantong) Co., Ltd.
Ganzhou Zhaori Rare Earth New Materials Co., Ltd.
SHOWA DENKO New Material (Zhuhai) Co.,Ltd.
Showa Specialty Gas (Taiwan) Co., Ltd.
Taiwan Showa Chemicals Manufacturing Co., Ltd.
Showa Denko HD Trace corp.
Korea Showa Chemicals Co.
Southeast AsiaShowa Specialty Gas Singapore (Pte.) Ltd.
SHOTIC (Singapore) Pte Ltd.
Showa Denko HD Singapore Pte Ltd.
Showa Denko Singapore (Pte)Ltd.
Showa Denko Rare-Earth Vietnam Co., Ltd.
Hanacans JSC
Showa Aluminum Manufacturing Philippines Corporation
Showa Denko HD (Malaysia) Sdn.Bhd.
SHOTIC MALAYSIA Sdn.Bhd.
Europe
East Asia
Southeast Asia
North America
Sites in Japan Overseas Sites
Business Sites
Oita Complex
Company name
Head office location
Number of consolidated subsidiaries
Total number of employee
Consolidated business results
Showa Denko K.K.
13-9, Shiba Daimon 1-chome, Minato-ku, Tokyo 105-8518, Japan
48
10,146
Sales 671billion yen
Operating income 42.1billion yen
Net income attribute to owners of the parent 123billion yen
■ Sales
0
200,000
400,000
600,000
800,000
1000,000
2012 2013 2014 2015 2016
847,803775,732
671,159
872,785
739,675
million yen
■ Operating income
2012 2013 2014 2015 2016
25,953
33,508
42,053
20,551
28,108
0
10,000
20,000
30,000
40,000
50,000million yen
■ Net income attribute to owners of the parent
2012 2013 2014 2015 2016
9,368 9,065
921
12,305
2,929
0
3,000
6,000
9,000
12,000
15,000million yen
9SHOWA DENKO REPORT 2017
About Show
a Denko
Highlights of C
SR Activities
Financial Highlights
An Overview of the Showa Denko Group (as of December 2016)
Institute for Integrated Product Development
B
Head O�ce
Nagoya Branch
Osaka Branch
Fukuoka Branch
Kawasaki O�ce
Institute for Advanced and Core Technology
A
Higashinagahara Plant
Kitakata Plant
Isesaki Plant
Oyama Plant
Oyama Plant (Nasu)
Chichibu Plant
Kawasaki Plant
Yokohama Plant
Omachi Plant
Shiojiri Plant
Hikone Plant
Sakai Plant
Tatsuno Plant
Tokuyama Plant
Chiba Plant
B
For information on main Group companies in Japan, please go to the P17
1 A
EuropeSHOTIC Europa Industria de Aluminio Lda.
Showa Denko Europe GmbH
North AmericaShowa Denko Carbon, Inc.
Showa Aluminum Corporation of America
Showa Denko America, Inc.
East AsiaShanghai Showa Chemicals Co., Ltd.
Shanghai Showa Highpolymer Co., Ltd.
Shanghai Showa Electronics Materials Co., Ltd.
Shanghai Showa Highpolymer Trading Co., Ltd.
Zhejiag Quzhou Juhua Showa Electoronic Chemical Materials Co., Ltd.
Showa Denko Sichuan Carbon Inc.
Showa Denko (Dalian) Co., Ltd.
Showa Denko Aluminum (Nantong) Co., Ltd.
Ganzhou Zhaori Rare Earth New Materials Co., Ltd.
SHOWA DENKO New Material (Zhuhai) Co.,Ltd.
Showa Specialty Gas (Taiwan) Co., Ltd.
Taiwan Showa Chemicals Manufacturing Co., Ltd.
Showa Denko HD Trace corp.
Korea Showa Chemicals Co.
Southeast AsiaShowa Specialty Gas Singapore (Pte.) Ltd.
SHOTIC (Singapore) Pte Ltd.
Showa Denko HD Singapore Pte Ltd.
Showa Denko Singapore (Pte)Ltd.
Showa Denko Rare-Earth Vietnam Co., Ltd.
Hanacans JSC
Showa Aluminum Manufacturing Philippines Corporation
Showa Denko HD (Malaysia) Sdn.Bhd.
SHOTIC MALAYSIA Sdn.Bhd.
Europe
East Asia
Southeast Asia
North America
Sites in Japan Overseas Sites
Business Sites
Oita Complex
■ Frequency rate of lost-time injuries
(Major Subsidiaries as of March 31,2017)
0.0
0.1
0.2
0.3
0.4
0.5
2012 2013 2014 2015 2016
0
0.14
0.43
0.25
0.15
0.150.13
0.22
0.24
0.12
Showa DenkoShowa Denko Group
■ Discharged amounts of greenhouse gases
0
500
1,000
1,500
2,000
2,500
3,000
2012 2013 2014 2015 2016
2,504
kt-CO2
2,673 2,675 2,687 2,687
■ Number of employees
0
2,000
4,000
6,000
8,000
10,000
12,000
2012 2013 2014 2015 2016
5,802
4,088
9,89010,234
4,329
5,905
10,577
4,645
5,932
10,561
4,688
5,873
10,146
4,071
6,075
JapanOverseas
10 SHOWA DENKO REPORT 2017
History of the Group
★ Showa Denko K.K. ◆ Showa Aluminum Corporation ● Showa Highpolymer Co., Ltd.
1908With the business on track under the spirit of “tenacity
and indomitability”,
established the foundation of the Showa Denko
Group.
Deepened and further developed business,
taking advantage of postwar reconstruction
and rapid growth
1945
Switched to energy-saving products
after overcomingoil crises
1986
Expanded into the energy-saving and high
value-adding business in full-scale,
through the fusion of organic/inorganic and
aluminum technologies.
2001
Engaged inShaping Ideas in pursuit of
evolving chemical company with
individualized products
through the fusion of organic / inorganic and aluminum technologies
2011
Technology and products CSR Event
◆1981Started aluminum can collection activities at certain plants
★1931Started manufacturing ammonium sulfate using domestic technology (Showa Fertilizers K.K.)
★1934Industrialized domestically produced aluminum (Nihon Iodine K.K.)
★1908Established Sobo Marine Products K.K.
★1926Established Nihon Iodine K.K.
●1937Established Riken Kohaku Kogyo K.K.
★1945Resumed production of ammonium sulfate fertilizer
●1951Achieved domestic production of synthetic resin emulsion
●1953Achieved domestic production of unsaturated polyester resin
●1965Achieved domestic production of vinyl ester resin
◆1969Showa Aluminum Can Corporation produced the �rst aluminum can in Japan
◆1981Developed the “Cojunal Method”, a high-purity aluminum re�ning method
◆1921Established Takada Aluminum Equipment Manufacturing K.K.
★1928Established Showa Fertilizers K.K.
★1939Established Showa Denko K.K.
◆1986Started manufacture and sale of aluminum cylinders
◆1990Started company-wide aluminum can recycling activities
★1995Formulated “Responsible Care Action Guidelines”
★1997Published Responsible Care Report
★1998Established “Our Code of Conduct”
★1986Acquired a graphite electrode business in the United States, and established Showa Denko Carbon, Inc.
★1988Expanded into the hard disk business
★2012Established “Our Code of Conduct and Its Practical Guide”
★2013Our long history of aluminum can recycling activities received the “Minister of Economy, Trade and Industry's Prize” of the 3Rs (Reduce, Reuse, and Recycle) Promotion Merit Awards in FY 2013
★2014Resigned the amended Responsible Care Charter
★2014Received the Special Incentive Award of the “Ikumen Company Award 2014” sponsored by the Ministry of Health, Labour and Welfare
★2016Received the “Platinum Kurumin”
★◆2001Merged Showa Aluminum Corporation
★2009
Established Showa Denko HD Yamagata K.K
★●2010Merged Showa Highpolymer Co., Ltd.
★2016Deciding to acquire SGL GE's graphite electrode business
★2017Established Advanced Battery Materials Division
★2003Started the business to recycl used plastic as material for ammonia at Kawasaki Plant
★2005Started mass production of perpendicular magnetic recording hard disks �rst in the world
★2009Started production of cooling devices for power control units
★◆2001With the merger with Showa Aluminum Corporation as the trigger, expanded aluminum can recycling activities to Showa Denko’s plants, o�ces and group companies
★2005Issued a CSR Report
★2005Signed the “RC Charter”
★2011Received the 43rd Ichimura Industrial Award for the “development of cooling devices for power control units”
★2013Our LED lighting equipment for plant growth received the “Nikkei Business Daily Merit Award” of the 2012 Nikkei Superior Products & Services Award
★2016Receives “2016 Top 100 Global Innovators” Award, 2 Years in a Row
★1969Oita Petrochemical Complex started commercial operation
History of the Group
The Showa Denko Group started its business operations by focusing on the bright future of the electrochemical industry, which utilized one of Japan’s
important resources: abundant water energy. Originating from electrochemistry, our Group’s technology further evolved to cover the fields of inorganic
chemistry, organic chemistry and metal materials. Today, the gene of our original technology is inherited to a wide variety of products that are essential in
everyday life, including materials and components used in the information/ telecommunication industry and the automotive industry.
11SHOWA DENKO REPORT 2017
About Show
a Denko
Highlights of C
SR Activities
Financial Highlights
Product Technology Purchase or intermediate
電気分解
Carbide
Ferroalloys
Graphite
Ceramics
Nitrolime
Graphite electrodes
Abrasive grains Refractory materials Extreme pressure Technologies for making fine powder
VGCFTM(Carbon nanotube)
Magnet alloys
Abrasives for semiconductorsSuper hard materials
Rare earth metal
Titanium
Acetic acids
BMC
LED
Hydrogen
Fertilizers
Chlorine
Salt electrolysis
Alumina Gallium Epitaxial growth
Petrochemical
Sputtering
Chemical vapor deposition
Heat exchangersAluminum cans
Amino acid
Chemical alumina
Aluminum hydroxide
Aluminum cylinders
SHOTICTM
Allylic esters
Hard disksCaustic soda
Vitamin derivatives
Phenol resin
Gases for medical use
Ammonia
Polyolefin
Titanium oxide
ShodexTM
Highpolymer
Catalysts
Acrylonitrile
Melting and castingAluminum
Casting and forging
Rolling
Extrusion
Electrochemical
ElectrolysisElectrical Furnaces
SCMGTM
(Material for negative electrodesin lithium ion cells)
Waterelectrolysis
High-pressuretechnology
Aluminum polymersolid condenser
Biodegradable plastic
Agrochemicalintermediates
Agriculturalchemicals
Organicsynthesis
Specialty gases forsemiconductors
Aluminum foilsfor capacitors
Fused saltelectrolysis
Showa Denko Group's Technological Lineage
12 SHOWA DENKO REPORT 2017
Petrochemicals Petrochemicals Division (Olefins Department, Organic Chemicals Department)
The Petrochemicals segment provides basic petrochemicals including ethylene and propylene, and organic chemicals derived from them, including acetyls and allyl alcohol derivatives.
We contribute to effective use of resources and high
cost competitiveness by not relying solely on naphtha
(raw material diversication) to produce ethylene, which
is widely used to produce various petrochemicals.
Ethylene
We are promoting the sales of the highly transparent and heat-
resistant film SHORAYALTM as a glass substitute to be used in
displays for mobile devices and other equipment.
Demand for NPAC, which is used as a solvent for special
gravure printing ink, has been increasing as an environment-
friendly substitute for the currently popular toluene.
n-Propyl acetate (NPAC)
QUALEARTM is a new kind of polypropylene manufactured
and sold by SunAllomer Ltd. This product, which is
well balanced in terms of transparency, resistance to
shocks, and rigidity, meets the needs of customers in
the food packaging and automobile fields in particular.
QUALEARTMSHORAYALTM
2016 2015 Increase/decrease
Increase/ decrease ratio(%)
Sales 1,858 2,313 △455 △19.7
Operating income 207 105 101 96.2
Petrochemicals Segment (Billions of yen)
Introduction of Businesses of the Group
Holding a dialogue meeting with local residents
In February 2016, Showa Denko’s Oita Complex took part in a dialogue meeting with local residents on Responsible Care. The meeting, the 10th of its kind, was organized in partnership with the Japan Chemical Industry Association and 10 companies located in the Oita coastal industrial zone.
About 200 people participated in the biennial meeting, which included a factory tour and a lecture session. Participants were briefed on the safety and environmental measures taken at the plants of the hosting companies and opinions were shared by both sides. Locals had lots of questions, opinions and requests for the participating companies about their earthquake and tsunami countermeasures and environmental issues. As we continue to conduct our business activities, we will firmly keep the opinions of local residents in mind.
Petrochemicals
26%
13SHOWA DENKO REPORT 2017
About Show
a Denko
Highlights of C
SR Activities
Financial Highlights
Electronic specialty gases are used in production processes
for electronic components such as semiconductors, LCD
panels, LEDs, and solar cells. Showa Denko manufactures
dozens of these high-purity gases including ammonia,
chlorine, and fluorine-containing gases.
Showa Denko manufactures and sells vitamin derivatives (ascorbic
acid PM, ApprecierTM, and TPNaTM), a slimming agent (Hi-Carnitine), and
hair care products (DL-Cysteine and SPIERATM).
RigolacTM, unsaturated polyester resin that meets
requirements for a lightweight material with high durability
and high corrosion resistance, is used for a wide range
of applications including automotive components,
home appliances, and ocean development.
Unsaturated polyester resin
Electronic specialty gases
Cosmetic raw materials
Showa Denko Gas Products Co., Ltd. contributes to
securing safety and stable supply of food resources by
supplying carbon dioxide mainly for carbonated
beverages and dry ice for cooling.
Chemicals
19%
2016 2015 Increase/decrease
Increase/ decrease ratio(%)
Sales 1,345 1,423 △78 △5.5
Operating income 138 107 31 29.1
Chemicals Segment (Billions of yen)
Carbon dioxide and dry ice
Chemicals Industrial Gases Division, Basic Chemicals Division (Industrial Chemicals Department, Organic Industrial Chemicals Department), Electronic Chemicals Division, Functional Chemicals Division (Functional Polymers Department, Specialty Chemicals Department)
The Chemicals segment provides wide-ranging products, from industrial gases, industrial chemicals, high-performance chemicals, and elastomers, to electronic specialty gases and chemicals for the semiconductor industry, resins for reinforced plastics, HPLC columns and raw materials for cosmetics.
Enhancing the supply system in China for the thermosetting bulk molding compound business
In January 2017, Showa Denko New Material (Zhuhai) Co., Ltd. began the mass production and sale of thermosetting bulk molding compounds (BMCs) as the Showa Denko Group’s second BMC base in China.BMC is a thermosetting bulk molding compound made from unsaturated polyester resin as main component, kneaded together with glass fiber and other additives. BMC is put to various uses including headlamp reflectors and engine covers for car applications, and precision mold parts for projectors. Moreover, the range of BMC's use is expected to increase in the future. BMC is expected to be used as sealing material for power-module housings and motors in home appliances including air conditioners and washing machines, and also as sealing material for motors in EVs and hybrid cars.
14 SHOWA DENKO REPORT 2017
Electronics Electronics Materials Division, HD Division, Advanced Battery Materials Division
The Electronics segment provides compound semiconductor materials for ultrabright and high-output LEDs; rare earth magnetic alloys for high-performance motors; and HD media with high storage capacity for use in PCs, consumer electronics such as DVD recorders and game machines, and servers for data centers. We are supplying lithium-ion battery materials and promoting R&D of fuel cells.
In addition to a broad lineup of infrared LED chips used as light
sources for optical sensors for various applications, we also
offer high-output red LED chips optimized specifically for plant
growth.
LED
As the world’s largest hard disk manufacturer and seller, the
Showa Denko Group is utilizing the leading-edge technologies
to expand the storage capacity of its hard disks, while building
the optimal production and supply system to help the Group
meet the requests of customers in a smooth manner.
HD
The demand for rare earth magnet alloy is growing in fields
such as drive motors for hybrid cars and energy efficient home
electric appliances. We are also strengthening the development
of next-generation magnet alloys with decreased expensive
heavy rare earth content.
For the lithium-ion battery market, we offer a variety
of items, including SCMGTM long-life anode material,
VGCFTM unique anode and cathode additive featuring
high stability and quality, and SPALFTM aluminum laminated
film produced and marketed .
Electronics
14%
Rare earths
Lithium-ion battery materials
In 2017, we transferred the lithium-ion battery material business from the “Others” segment to the “Electronics” segment. As such, the numerical data shown above do not include those for that business.
2016 2015 Increase/decrease
Increase/ decrease ratio(%)
Sales 1,033 1,315 △282 △21.4
Operating income 139 175 △36 △20.4
Electronics Segment (Billions of yen)
SDK to expand production capacities for LIB materials
SDK positions its LIB materials business as an advantage-establishing business in its medium-term business plan “Project 2020+,” aiming to establish a business model that has competitive advantages in terms of earning power and technical development. Demand for LIB materials has been growing rapidly. This is because demand for large LIBs is increasing mainly for automotive applications, in addition to demand for small LIBs for smartphones.In January 2016, Showa Denko started to outsource a part of its SDXTM carbon-coated aluminum foil in China. Subsequently, in June and August, we decided to enhance the production capacity for our SCMGTM carbon-based anode material and our VGCFTM conduction support agent for cathodes and anodes, respectively.
Introduction of Businesses of the Group
15SHOWA DENKO REPORT 2017
About Show
a Denko
Highlights of C
SR Activities
Financial Highlights
Graphite electrodes contribute to iron and steel
recycling as a component to melt iron and steel scraps in
electric steel furnaces. Our graphite electrodes are rated
very highly by customers throughout the world due to
their excellent quality.
With a hardness coming second only to diamond,
CBN is used for tools to cut automotive and other
components.
Alumina is widely used among various industries, for
purposes such as ceramics, filers for plastics, refractories,
and abrasives.
CBN (cubic boron nitride)
SUPER-TITANIATM high-purity titanium oxide is used as
one of the main materials in ceramic capacitors installed
in familiar electronic and electrical devices.
Alumina
Ceramics for capacitors
2016 2015 Increase/decrease
Increase/ decrease ratio(%)
Sales 509 635 △126 △19.9
Operating income △58 △12 △45 ー
Inorganics Segment (Billions of yen)
Graphite electrodes
Inorganics
7%
Inorganics Ceramics Division, Carbons Division
The Inorganics segment provides ceramic products such as alumina, polishing materials, abrasives, and refractories; graphite electrodes for electric steel-making furnaces.
Deciding to acquire SGL GE’s graphite electrode business
In October 2016, Showa Denko K.K. concluded an agreement with the SGL Group of Germany regarding the acquisition of SGL’s graphite electrode business, SGL GE. The transaction is expected to be finalized in the middle of 2017.
With the addition of SGL GE’s manufacturing bases in Europe, the US, and Southeast Asia, Showa Denko’s graphite electrode business will cover the entire world market, enabling it to provide customers with highly attractive products and services so as to further enhance the business and establish its position as a leading graphite electrode supplier.
16 SHOWA DENKO REPORT 2017
High-purity aluminum foil is a key material in electronic
components essential to IT devices, home electric
appliances, and automobiles. High-purity aluminum foil
for electrolytic capacitors is produced through precise
control of purity and manufacturing processes.
We are producing SHOTICTM continuously cast rods of
aluminum alloy and their forgings. The fine alloy
structure contributes to reducing the weight
of automobiles and the products are used as parts for
compressors of in-vehicle air conditioners, etc.
We provide oil coolers, heat sinks and other heat
exchangers for industrial equipment, as well as cooling
devices for hybrid car power control units.
Showa Aluminum Can Corporation was the first to manufacture
aluminum cans in Japan. Its lightweight and recyclable
aluminum cans are sold both in Japan and abroad. In 2016 the
production of sleek cans* was also launched at Hanacans’ site in
Vietnam.
Aluminum Cans
Aluminum
14%
High-purity aluminum foil
2016 2015 Increase/decrease
Increase/ decrease ratio(%)
Sales 986 1,008 △22 △2.2
Operating income 44 26 19 72.3
Aluminum Segment (Billions of yen)
Cooling devices
SHOTICTM
* Sleek cans: have a smaller diameter and greater height compared with regular cans, and are increasingly adopted across the world in recognition of design excellence.
Aluminum Aluminum Rolled Products Division, Aluminum Specialty Components Division, Aluminum Can Division
The Aluminum segment provides aluminum materials including rolled, extruded and forged products; and various high-value-added fabricated aluminum products such as high-purity aluminum foil for capacitors, aluminum cylinders for laser beam printers, radiators for power devices installed in hybrid cars and other vehicles, and aluminum cans for beverages.
SDK launches SHOCARESTM bed sensor for care
Showa Denko has developed “SHOCARESTM” bed sensors for care, and started to sell them in October 2016.SDK developed SHOCARESTM bed sensor by taking advantage of aluminum’s properties of high rigidity and light weight. By sensing slight
changes in weight and applying Showa Denko’s original algorithm, the sensor detects the movements of the bed user, including lying on the bed and getting up from the bed, and helps reduce the risk of the user falling out of the bed by informing the nurse or caregiver of the likelihood as detected from the user’s movements.
SHOCARESTM comes with new design to be put on the floor just underneath four legs of a bed, and can be easily used with existing beds.
Introduction of Businesses of the Group
17SHOWA DENKO REPORT 2017
About Show
a Denko
Highlights of C
SR Activities
Financial Highlights
The wafers are used as materials for next-
generation power semiconductors, which
are expected to contribute to energy conservation.
They have already been used in power supplies for
data center servers and in devices for railway cars.
E-POLE, produced and marketed by Showa Denko Aluminum Trading
K.K., stores electricity generated by its photovoltaic cells during the day
and uses it to power its LED lamps at night. The system is capable of
providing illumination for three to four days continuously even under
low light and cloudy conditions.
E-POLE lighting system
■ Petrochemicals segment Sun Allomer Ltd. Tsurusaki Kyodo Doryoku K.K.
■ Chemicals segment Showa Denko Gas Products Co., Ltd. Nippon Polytech Corp.
■ Electronics segment Showa Denko HD Yamagata K.K. Showa Denko Packaging Co.,Ltd.
■ Inorganics segment Showa Denko Ceramics Co., Ltd. Showa Fine Ceramics Co., Ltd. Showa Denko Kenso Co., Ltd.
■ Aluminum segment Showa Aluminum Can Corp.
■ Others segment Shoko Co., Ltd. Showa Denko Kenzai K.K.
Major Subsidiaries as of March 31,2017
Etcetera
20%
2016 2015 Increase/decrease
Increase/ decrease ratio(%)
Sales 1,424 1,472 △49 △3.3
Operating income 18 13 4 33.6
Etcetera Segment (Billions of yen)
Development Themes and Related BusinessesIncluded in this section are themes for future businesses as well as the manufacture and sale of various chemical products, light metals, and building and civil engineering materials.
Major Subsidiaries in Japan
The numerical data shown above include those for the lithium-ion bat-tery materials business.
Acquiring non-stick coatings manufacturer the GMM Group
In November 2016, Showa Denko K.K. acquired all shares of the GMM Group, a Hong Kong-based manufacturer and seller of non-stick coating chemicals used to prevent the burning on, fouling, and soiling of cookware, home electrical appliances, and industrial equipment. By the acquisition of these shares, we will expand our value chain into downstream markets to broaden the scope of our technologies that provide the foundation of our business activities, thereby fostering the establishment of new individualized businesses within our Group.
SiC epitaxial wafers