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TORAY Philosophy
Vision
Corporate
Philosophy
Corporate
Missions
Corporate
Slogan
Corporate
Guiding Principles
Corporate
Culture
Presidentʼs
Principles
Toray Philosohy
In addition to our traditional Management Philosophy (which includes the
Corporate Philosophy, Corporate Missions, Corporate Guiding Principles),
we have formulated the Corporate Slogan (which simply expresses Toray’s
stance on embodying the Corporate Philosophy), the Vision (which rep-
resents the direction the Group is headed), the Corporate Culture (which
includes values and management perspectives that have been maintained
since the company’s founding), and the President’s Principles. As a whole,
these are referred to as the Toray Philosophy.
Toray Industries, Inc.
Integrated Annual Report 2020
02
Toray Industries, Inc.
Integrated Annual Report 2020
03
Corporate Philosophy
Contributing to society through the creation of
new value with innovative ideas, technologies and products
Corporate Missions
For our customers:
To provide new value to our customers through high-quality products and supe-
rior services
For our employees:
To provide meaningful work and fair opportunities
For our shareholders: To practice sincere and trustworthy management
For society:
To establish ties and develop mutual trust as a responsible corporate citizen
Corporate Guiding Principles
Safety and Environment
Placing top priority on safety, accident prevention and environmental preservation in order to protect the safety
and health of employees, customers and local communities and contribute to building a sustainable society
Ethics and Fairness
Acting with fairness, high ethical standards and a strong sense of responsibility while complying with laws, regu-
lations and social norms to earn trust and meet social expectations
Customer-Focus
Providing solutions of high value to customers, and pursuing customer satisfaction and the world’s highest level of quality
Innovation
Achieving continuous innovation in all corporate activities, and aiming for dynamic evolution and growth
Strong Genba-Ryoku (Workplace Competency)
Learning from one another and making self-driven efforts to leverage technologies and expertise in order to
strengthen workplace competency, which is the foundation of our corporate activities
Cooperation and Co-creation
Forming integrated internal linkages and strategic alliances with external partners, and evolving together with
society by creating new value
Emphasis on Human Resources
Providing motivating work environments where employees can demonstrate their abilities, and building a vibrant
corporate culture
Information Disclosure
Appropriately disclosing corporate information and enhancing communication with stakeholders in order to main-
tain management transparency
Respect for Human Rights
Fulfilling our responsibility to respect human rights as a good corporate citizen
Vision
Toray Group Sustainability Vision
Corporate Culture
• Contributing to society through business activities • People-centric management
• Management from a long-term perspective • Pioneering spirit
President’s Principles
• Stay focused on the basics, search for ideal approaches, identify the right steps, and then carry them out
• All solutions can ultimately be found in the Genba (workplace)
• Consider what is best for the company • Have the integrity to do the right thing in the right way
Corporate Slogan
Innovation by Chemistry
Toray Industries, Inc.
Integrated Annual Report 2020
02
Toray Industries, Inc.
Integrated Annual Report 2020
03
Toray
Philosophy
To Our
stakeholders
02
06
Financial &
Non-Financial
Highlights
10
Covid-19 and
Beyond
14
“Toray vision 2030”
“AP-G 2022”
Long-term Corporate Vision
“TORAY VISION 2030”
Medium-term Management Program
“Project AP-G 2022”
16
Human Resources
strategy
Interview
30
R&D Strategy
34
IR Day
Medium-term
Management Program
“Project AP-G 2022”
Business Briefing by
Segments
35
Management
system
Corporate Governance/
Compliance
51
Cautionary statement with respect to forward-looking statements
Descriptions of predicted business results, projections and business plans contained in this integrated annual report are based on forecasts
and assumptions regarding the future business environment made at the present time. This integrated annual report is not a guarantee of the
Company’s future business performance.
Toray Industries, Inc.
Integrated Annual Report 2020
04
For Realization of
a Circular Economy
special Features
68
Advanced Business
Management by Utilizing
Digital Technologies
74
Risk
management
76
Environment
80
TCFD-related Initiatives
Environmental
Management Initiatives
82
Human Resources
Management
Results by
Segment
Fiscal 2019
85
90
R&D
102
Intellectual
property
104
Financial
Section
105
Stakeholder Engagement
External Evaluation
148
149
Toray Group Worldwide
Network
150
Investor Information/
Corporate Data
151
future...
Toray Industries, Inc.
Integrated Annual Report 2020
05
Akihiro Nikkaku
President
Toray Industries, Inc.
Integrated Annual Report 2020
06
To Our stakeholders
Staying focused on the basics, searching for ideal
approaches, identifying the right steps, and then carrying
them out in highly uncertain times
Introduction
I would like to begin by offering my sincerest con-
creation of new value with innovative ideas, technol-
ogies and products” exhibits the management philos-
dolences to all of those who have been affected by
ophies and values that have been passed down since
COVID-19. And I would like to express my respect for
our founding, as well as our reason for existence as a
all of those fighting day and night on the frontlines to
company. Similarly, Toray Group aims to realize the Toray
prevent spread of the infection. Along with taking the
Group Sustainability Vision under our mission of provid-
necessary steps to prevent COVID-19 from escalating,
ing innovative technologies and advanced materials as a
Toray Group will spare no effort in bringing about an
means of delivering fundamental solutions to the global
early end to the crisis and in supporting the develop-
challenges involved in balancing development and sus-
ment of society and the economy thereafter.
tainability with which the world will continue to be faced.
In fiscal 2019, Toray saw both consolidated net
sales and operating income decline 7.3% year on year
to ¥2,214.6 billion and ¥131.2 billion, respectively, and
saw net income attributable to owners of parent decline
29.8% to ¥55.7 billion. In addition to trade friction
between the U.S.A. and China, COVID-19 emerged to
Implementing Programs to Address
Issues Under the Long-term Corporate
Vision
In July 2018, Toray Group announced the Toray Group
threaten the world at the start of 2020 and significantly
Sustainability Vision, which describes the perspectives
limited the movement of people and goods, thereby
of world that Toray Group aims to realize by 2050 and
driving a recession that progressed throughout the
the issues to be addressed in order to realize that
global economy at an unprecedented pace.
world. These issues include a range of challenges that
Although Toray Group has been unable to avoid the
are intertwined and ever-graver, including a growing
impacts of this situation because we provide materi-
population that is forecasted to reach 10 billion and
als to key industries around the world, I feel that our
that is aging in countries around the globe, as well as
medium- to long-term corporate value remains unwav-
the relentless escalation of climate change, water scar-
ering. I hope that you will recognize this fact from the
city, and resource depletion issues against the back-
long-term corporate vision “TORAY VISION 2030” and
drop of these demographic challenges.
the medium-term management program “Project AP-G
In May 2020, Toray Group announced the long-term
2022,” both of which are covered in this report.
corporate vision “TORAY VISION 2030” as our mile-
Toray Group’s Aspirations
Toray Group was established in 1926, based on the prin-
stones for raising corporate value by delivering solutions
to these kinds of global challenges through the poten-
tial of innovative materials. In short, this vision serves
ciple of “realizing that corporations are public institu-
as our guidelines for ascertaining trends in society and
tions of society and contributing to society through our
industry over the next 10-year period, and for achiev-
business.” Ever since, Toray Group has worked hard to
ing sound, sustainable growth while pursuing business
earn the respect of society.
model transformation.
Originally formulated in 1986, our current corpo-
At the same time, the Group formulated the medi-
rate philosophy of “contributing to society through the
um-term management program “Project AP-G 2022”
Toray Industries, Inc.
Integrated Annual Report 2020
07
that defines what we must do over the three-year
and thus being controlled by the need to deal with
period from fiscal 2020 to fiscal 2022. We have already
the immediate situation, I feel it is far more rational to
launched initiatives under this program. As expressed by
drive forward under certain assumptions while observ-
its name, the AP-G (Action Program for Growth) medi-
ing changes in the situation, and to take action as we
um-term management program is not a medium-term
adjust those assumptions. Specifically because of this
management “plan,” but a medium-term “program”
uncertain situation, Toray-style management approach
for achieving growth. Rather than putting in place a plan
is to indicate guidelines, fully discuss our options, and
that is grounded in a set of numerical targets, Toray
align the vectors within the Group as we search for ideal
Group has conventionally focused on medium-term
approaches, identify the right steps, and carry them out.
issues. In short, Toray Group management implements
“programs to address issues” under the concept that
results will follow upon solving each issue.
In formulating these programs, we considered the
Developing Materials Truly Needed by the
World and Creating New Markets
details of and identified issues with every item, from
The values our society held towards transfer and places
medium- to long-term business climates, competitive
have transformed significantly, as telework and other
environments, strengths and weaknesses, and sales, to
changes have expanded due to COVID-19. On the
R&D, and summarized what Toray Group must do over
one hand, these changes have prolonged adjustments
the next three-year period within the Action Program.
in aircraft demand, which in turn has raised concerns
Presenting Guidelines for Highly
Uncertain Times
over negative impacts on the sales of carbon fiber com-
posites and other materials. On the other hand, how-
ever, the trend remains unchanged for the increase
in demand for lightweight materials that contribute to
During the first half of 2020, the global economy saw
improved fuel efficiency among the airline industry as a
production, consumption, and even logistics activities
means of addressing environmental problems. Greater
come to a standstill that resulted in significant negative
demand for these materials due to larger wind turbine
growth as the world struggled to prevent COVID-19 from
blades and the growth of the fuel-cell vehicle market,
spreading. Although there may be those who believe it
is also expected to remain unchanged. In addition to
is not possible to formulate an accurate medium-term
carbon fiber composite materials, accelerating digital
management program given this situation of increasing
transformation is likely to actually increase the demand
uncertainty, the medium- to long-term aspirations of
for 5G-compliant semiconductor materials that enable
Toray Group are clear. The programs Toray Group must
high-speed, high-capacity communications. As a materi-
implement to achieve these aspirations will not change
als manufacturer, Toray continuously identifies changes
fundamentally due to COVID-19. For example, our poli-
in the market from a medium- to long-term perspective
cies designed to continuously optimize the supply chain
regardless of the situation, and provides the world with
remain unchanged, including those we have undertaken
high added-value products that suit these changes.
over many years to establish a global production sys-
COVID-19 is no exception, and we intend to further
tem based on a business model of local production and
undertake new programs as we move forward without
consumption that can minimize the impact of changes
altering our stance of creating new markets by innova-
in commerce conditions stemming from trade friction
tive technologies.
between the U.S.A. and China and from country risk.
In terms of materials development, creating benefi-
Moreover, our policy of developing a variety of
cial materials is only possible after accumulating tech-
advanced materials that derive from our core technolo-
nologies over long-periods lasting ten to twenty years.
gies in order to expand businesses that contribute to the
In fact, although we have already worked with carbon
development of society remains steady.
fiber for 50 years, it still maintains room for develop-
There is still no end in sight for COVID-19, but tak-
ment as a material. Our growth strategy is based on
ing action once things have settled after the world has
considering what customers need and on providing
returned to normal will put us behind. We must prepare
innovative materials that can only be realized by Toray
by ascertaining the true nature of the change, by analyz-
Group. Accordingly, I believe that for us as a company,
ing how the market will change after COVID-19 ends,
it is ever more important to maintain a long-term vision,
and whether or not the current situation is transient or
establish short-term and long-term programs under that
permanent. Rather than failing to indicate any medi-
vision, and stay focused on the basics as we do what
um-term guidelines because of the high uncertainty
needs to be done in aims of achieving our aspirations.
Toray Industries, Inc.
Integrated Annual Report 2020
08
Domain Synergy that Outweighs
Selection and Concentration
achieving operations that are also prepared for uncer-
tainties under the concept of strengthening the man-
agement foundation, one of the three basic strategies
Some have pointed out that the Group is not gaining
of the medium-term management program. As a means
returns from capital investments due to our wide range
of supporting growth strategies after the end of COVID-
of business domains. And I am also aware of the view that
19, we will take this opportunity to fully ensure the
we are not taking moves towards selection and concen-
resiliency of the corporate structure, and fundamentally
tration. There is no question that Toray Group has many
strengthen the management foundation from a medium-
business segments. However, each of these segments
to long-term perspective that goes beyond the current
are derived from the common core technologies of organic
fiscal year.
synthetic chemistry, polymer chemistry, biotechnology,
and nanotechnology. I believe that the attractiveness of
Toray Group lies specifically in the fact that we maintain a
broad scope of business domains by engaging in a wide
Strengthening Corporate Governance
Finally, I would like to discuss our efforts to enhance
range of application fields in a group-wide manner using
the effectiveness of the Board of Directors and to
our strengths in core technologies as a common base.
strengthen the business execution system.
Although we will naturally consider withdrawing
Along with reducing the number of Board members
from domains in which we can no longer create add-
from 19 to 12 in fiscal 2020, we increased the number of
ed-value, materials always hold the hidden potential to
outside directors from 2 to 4 in order to ensure a greater
expand into unexpected applications and to form large
variety of perspectives. We also expanded the compo-
markets. Therefore, maintaining a wide range of busi-
sition of the Governance Committee, which, chaired by
ness domains itself extends the scope of possibility for
an outside director, serves as an advisory body to the
Toray Group. In this sense, specializing on only those
Board of Directors and acts as the nomination and remu-
fields that are highly profitable today will lead to a weak-
neration committee, to 3 internal members of the Board
ening of the business foundation over the medium- to
and 4 outside directors.
long-term. It is my belief that Toray Group will not grow
We also introduced an executive officer system com-
as a result of choosing specific business sectors, but
posed of 30 vice presidents, including two foreign nation-
through exhibiting synergy among business domains.
als, appointed by the Board of Directors. This move was
Towards Resilience and Proactive
Management
made for the purpose of enabling the vice presidents
which represent all businesses, primary functions, and
the major regions, to share management policies and the
Group’s operating conditions, and to execute business
Although many countries are restarting economic activ-
based on quick decision-making that accurately ascer-
ities without waiting for an end to COVID-19, the recov-
tains the business environment and changes therein.
ery in production and consumption activities has been
limited in preparation for a second wave. Accordingly,
the global economy is traveling a path to normalcy at a
more moderate pace than expected, and these harsh
Materials Have the Power to
Fundamentally Change Our Everyday Life
conditions are expected to continue for the foreseeable
In order to fundamentally change “things,” the mate-
future. Moreover, there is also a chance that further
rials that serve as the foundation of all products must
intensification in the conflict between the U.S.A. and
evolve. Under this belief, Toray Group contributes to
China following the end of COVID-19, and it will weigh
the solutions for global challenges by creating innova-
down the global economic recovery. Within this situa-
tive materials targeted at realizing a sustainable world
tion, however, there are also markets like those for 5G
view and deploying these in a wide range of applications
which are expected to become more active as a result
and fields under our mission of addressing the needs of
of COVID-19, as well as markets like those for xEV
society as a materials manufacture. For this reason, we
which are expected to experience an early recovery as a
ask that all of our stakeholders grant us their continued
result of government funding, so I believe it is important
understanding and support.
to ascertain post-COVID-19 trends as early as possible
and adapt to the new normal.
The main theme of “AP-G 2022” is Resilience and
Proactive Management, which indicates our goal of
Akihiro Nikkaku
President
Toray Industries, Inc.
Integrated Annual Report 2020
09
Financial Highlights
Net Sales/Revenue
FY2019
Net Sales
¥2,214.6 billion
Operating Income/
Core Operating Income,
Operating Income to Net Sales/
Core Operating Income to Revenue
FY2019
Operating Income
¥131.2 billion
Operating Income to Net Sales
5.9%
Net Income Attributable to Owners
of Parent/Profit Attributable to
Owners of Parent, ROA and ROE
FY2019
Net Income Attributable to Owners of Parent
¥55.7billion
ROA
4.8%
ROE
5.0%
(Billion yen)
2,500
(Billion yen)
200
(%)
8
(Billion yen)
120
2,000
1,500
1,000
0
150
100
50
0
100
80
60
40
20
0
6
4
2
0
(%)
12
10
8
6
4
2
0
(FY)
16
17
18
19
(J-GAAP)
20
Forecast
(IFRS)
(FY)
16
17
18
19
(J-GAAP)
20
Forecast
(IFRS)
(FY)
16
17
18
19
(J-GAAP)
20
Forecast
(IFRS)
(FY)
16
17
18
19
20
(FY)
16
17
18
19
20
(FY)
16
17
18
19
20
(J-GAAP)
Forecast
(IFRS)
(J-GAAP)
Forecast
(IFRS)
(J-GAAP)
Forecast
(IFRS)
Operating income/Core operating income (left)
Operating income to net sales/
Net income attributable to owners of parent/
Profit attributable to owners of parent (left)
Core operating income to revenue (right)
ROA (right) ROE (right)
Dividend per share (left)
Payout ratio (right)
Net Assets and
Equity Ratio
End of FY2019
Net Assets
¥1,179.6 billion
Equity Ratio
41.3%
(Billion yen)
1,500
1,200
900
600
300
0
Interest-bearing Liabilities and
Debt/equity Ratio
Cash Flows
R&D Expenses/Expenditures
Environmental Facility
Environmental Preservation
End of FY2019
Interest-bearing Liabilities
¥938.9 billion
Debt/equity Ratio
0.86
(%)
50
(Billion yen)
1,000
40
30
20
10
0
800
600
400
200
0
FY2019
Cash Flows from
Operating Activities
Cash Flows from
Investing Activities
¥225.8 billion ¥-142.4 billion
FY2019
¥66.9 billion
Free Cash Flows
¥83.4 billion
(Billion yen)
300
200
100
0
-100
-200
1.0
0.8
0.6
0.4
0.2
0
-300
(Billion yen)
90
60
30
0
-30
-60
-90
(FY)
16
17
18
19
(FY)
16
17
18
19
(FY)
16
17
18
19
(FY)
16
17
18
19
20
(FY)
16
17
18
19
(FY)
16
17
18
19
(J-GAAP)
(J-GAAP)
(J-GAAP)
(J-GAAP)
(J-GAAP)
(J-GAAP)
Forecast
(IFRS)
Net assets (left)
Equity ratio (right)
Interest-bearing liabilities (left)
Debt/equity ratio (right)
Cash flows from operating activities (left)
Cash flows from investing activities (left)
Free cash flows (right)
Toray Industries, Inc.
Integrated Annual Report 2020
10
Dividend per Share and
Capital Expenditures
Depreciation and Amortization
Payout Ratio
Dividend per Share
FY2019
¥16
Payout Ratio
45.9%
(Yen)
20
FY2019
Capital Expenditures
¥147.5 billion
FY2019
Depreciation
¥110.1 billion
(%)
50
(Billion yen)
200
(Billion yen)
16
12
8
4
0
80
60
40
20
0
40
30
20
10
150
100
50
0
0
3
2
1
0
R&D Expenses/Expenditures
Environmental Facility Investment
Environmental Preservation Costs
Investment
FY2019
¥1.3 billion
Costs
FY2019
¥7.1 billion
(Billion yen)
(Billion yen)
(Billion yen)
120
100
80
60
40
20
0
8
6
4
2
0
Net Sales/Revenue
FY2019
Net Sales
¥2,214.6 billion
(Billion yen)
2,500
2,000
1,500
1,000
0
Equity Ratio
41.3%
(Billion yen)
1,500
1,200
900
600
300
0
Net Assets and
Equity Ratio
End of FY2019
Net Assets
¥1,179.6 billion
Operating Income/
Core Operating Income,
Operating Income to Net Sales/
of Parent/Profit Attributable to
Core Operating Income to Revenue
Owners of Parent, ROA and ROE
Net Income Attributable to Owners
FY2019
Operating Income
¥131.2 billion
Operating Income to Net Sales
Net Income Attributable to Owners of Parent
FY2019
¥55.7billion
ROE
5.0%
ROA
4.8%
(Billion yen)
5.9%
(Billion yen)
200
150
100
50
0
(%)
8
6
4
2
0
120
100
80
60
40
20
0
Dividend per Share and
Payout Ratio
Capital Expenditures
Depreciation and Amortization
FY2019
Dividend per Share
¥16
Payout Ratio
45.9%
(Yen)
20
16
12
8
4
0
FY2019
Capital Expenditures
¥147.5 billion
FY2019
Depreciation
¥110.1 billion
(%)
50
(Billion yen)
200
(Billion yen)
120
40
30
20
10
150
100
50
0
0
100
80
60
40
20
0
(FY)
16
17
18
19
20
(FY)
16
17
18
19
20
(FY)
16
17
18
19
20
(FY)
16
17
18
19
(J-GAAP)
Forecast
(IFRS)
(J-GAAP)
Forecast
(IFRS)
(J-GAAP)
Forecast
(IFRS)
Operating income/Core operating income (left)
Net income attributable to owners of parent/
Operating income to net sales/
Core operating income to revenue (right)
Profit attributable to owners of parent (left)
ROA (right) ROE (right)
(J-GAAP)
Dividend per share (left)
Payout ratio (right)
20
Forecast
(IFRS)
(FY)
16
17
18
19
(J-GAAP)
20
Forecast
(IFRS)
(FY)
16
17
18
19
(J-GAAP)
20
Forecast
(IFRS)
Interest-bearing Liabilities and
Cash Flows
R&D Expenses/Expenditures
Environmental Facility
Investment
Environmental Preservation
Costs
FY2019
Cash Flows from
Cash Flows from
Operating Activities
Investing Activities
¥225.8 billion ¥-142.4 billion
FY2019
R&D Expenses/Expenditures
¥66.9 billion
FY2019
Environmental Facility Investment
FY2019
Environmental Preservation Costs
¥1.3 billion
¥7.1 billion
(Billion yen)
(Billion yen)
80
(Billion yen)
3
(Billion yen)
8
60
40
20
0
2
1
0
6
4
2
0
(FY)
16
17
18
19
(FY)
16
17
18
19
(FY)
16
17
18
19
(FY)
16
17
18
19
(J-GAAP)
(J-GAAP)
(J-GAAP)
(J-GAAP)
20
Forecast
(IFRS)
(FY)
16
17
18
19
(FY)
16
17
18
19
(J-GAAP)
(J-GAAP)
Net assets (left)
Equity ratio (right)
Interest-bearing liabilities (left)
Debt/equity ratio (right)
Cash flows from operating activities (left)
Cash flows from investing activities (left)
Free cash flows (right)
Toray Industries, Inc.
Integrated Annual Report 2020
11
Debt/equity Ratio
End of FY2019
Interest-bearing Liabilities
¥938.9 billion
Debt/equity Ratio
0.86
(%)
50
(Billion yen)
1,000
40
30
20
10
0
800
600
400
200
0
Free Cash Flows
¥83.4 billion
(Billion yen)
1.0
300
0.8
0.6
0.4
0.2
200
100
0
-100
-200
0
-300
(%)
12
10
8
6
4
2
0
90
60
30
0
-30
-60
-90
Non-Financial Highlights
Net Sales/Revenue of
Green Innovation Businesses
Net Sales/Revenue of
Life Innovation Businesses
Contribution to CO2 Reduction in
Value Chain
Energy Consumption and Per
Reduction of Atmospheric VOC
Waste Recycling Rate
Unit Energy Consumption Index
Emissions
FY2019
Net Sales of Green Innovation Businesses
FY2019
Net Sales of Life Innovation Businesses
FY2019
Contribution to CO2 Reduction in Value Chain
¥820.1 billion
¥223.2 billion
196 million tons
Reduction of Atmospheric VOC Emissions
Waste Recycling Rate
FY2019
86.4%
(Billion yen)
1,000
(Billion yen)
300
(Million tons)
200
800
600
400
200
0
250
200
150
100
50
0
150
100
50
0
(FY)
16
17
18
19
(J-GAAP)
22
Target
(IFRS)
(FY)
16
17
18
19
(J-GAAP)
22
Target
(IFRS)
(FY)
13
18
19
(FY)
16
17
18
19
(FY)
16
17
18
19
(FY)
16
17
18
19
Energy consumption (left)
Per unit energy consumption index (right)
Water Filtration throughput
Contribution of Toray’s Water
Treatment Membranes
Reduction of
Greenhouse Gas Emissions
(Toray Group companies in Japan)
Comparative Water Usage per
Unit of Sales
(FY 2001, set to an index value of 100)
FY2019
Water Filtration throughput Contribution of
Toray’s Water Treatment Membranes
51 million tons/day
FY2019
Reduction of Greenhouse Gas Emissions
FY2019
Comparative Water Usage per Unit of Sales
31.8%
51.7%
(Million tons/day)
60
50
40
30
20
10
0
(%)
35
30
25
20
15
0
(%)
65
60
55
50
45
0
Percentage of Women in Unit
Number of Employees by
Average Time on the Job and
Manager or Higher Positions
Gender
(Toray)
FY2019
9.7%
Percentage of Women in Unit
Manager or Higher Positions
FY2019
Male
Female
34,373
13,658
Number of Employees Taking
Childcare Leave (Toray)
Number of Employees Taking
Number of Employees Taking
Childcare Leave: Male
Childcare Leave: Female
FY2019
10
Average Time on
the Job: Male
15.3 years
(Employees)
60
Average Time on
the Job: Female
16.1 years
(FY)
13
18
19
(FY)
16
17
18
19
(FY)
16
17
18
19
(FY)
16
17
18
19
(FY)
16
17
18
19
(FY)
16
17
18
19
Toray Industries, Inc.
Integrated Annual Report 2020
12
(VS. FY 1990)
FY2019
Energy Consumption
26.5 Million gigajoules
Per Unit Energy Consumption Index
85.9 (FY 1990, set to an index value of 100)
FY2019
76%
(Million gigajoules)
(Index)
90
(%)
80
30
20
10
0
(%)
10.0
9.5
9.0
0
60
30
75
70
65
0
0
(Employees)
50,000
40,000
30,000
20,000
10,000
0
Male
Female
(%)
90
85
80
0
80
60
40
20
0
(Year)
20
15
10
5
0
Number of employees taking childcare leave (left)
Average time on the job (right)
Male
Female
Male
Female
Net Sales/Revenue of
Net Sales/Revenue of
Contribution to CO2 Reduction in
Green Innovation Businesses
Life Innovation Businesses
Value Chain
Energy Consumption and Per
Unit Energy Consumption Index
(VS. FY 1990)
Reduction of Atmospheric VOC
Emissions
Waste Recycling Rate
FY2019
FY2019
FY2019
Net Sales of Green Innovation Businesses
Net Sales of Life Innovation Businesses
Contribution to CO2 Reduction in Value Chain
¥820.1 billion
¥223.2 billion
196 million tons
FY2019
Energy Consumption
26.5 Million gigajoules
FY2019
Reduction of Atmospheric VOC Emissions
FY2019
Waste Recycling Rate
76%
86.4%
Per Unit Energy Consumption Index
85.9 (FY 1990, set to an index value of 100)
(Million gigajoules)
30
(Index)
90
(%)
80
20
10
0
60
30
75
70
65
0
0
(%)
90
85
80
0
(FY)
16
17
18
19
22
(FY)
16
17
18
19
22
(FY)
13
18
19
(FY)
16
17
18
19
(FY)
16
17
18
19
(FY)
16
17
18
19
Energy consumption (left)
Per unit energy consumption index (right)
Percentage of Women in Unit
Manager or Higher Positions
(Toray)
Number of Employees by
Gender
FY2019
Percentage of Women in Unit
Manager or Higher Positions
9.7%
FY2019
Male
Female
34,373
13,658
(%)
10.0
9.5
9.0
0
(Employees)
50,000
40,000
30,000
20,000
10,000
0
Average Time on the Job and
Number of Employees Taking
Childcare Leave (Toray)
FY2019
Number of Employees Taking
Childcare Leave: Male
Number of Employees Taking
Childcare Leave: Female
10
Average Time on
the Job: Male
15.3 years
(Employees)
80
60
Average Time on
the Job: Female
16.1 years
60
40
20
0
(Year)
20
15
10
5
0
(FY)
13
18
19
(FY)
16
17
18
19
(FY)
16
17
18
19
(FY)
16
17
18
19
(FY)
16
17
18
19
(FY)
16
17
18
19
Male
Female
Number of employees taking childcare leave (left)
Male
Female
Average time on the job (right)
Male
Female
Toray Industries, Inc.
Integrated Annual Report 2020
13
(Billion yen)
1,000
(Billion yen)
(Million tons)
200
(J-GAAP)
Target
(IFRS)
(J-GAAP)
Target
(IFRS)
Water Filtration throughput
Reduction of
Comparative Water Usage per
Contribution of Toray’s Water
Treatment Membranes
Greenhouse Gas Emissions
Unit of Sales
(Toray Group companies in Japan)
(FY 2001, set to an index value of 100)
Water Filtration throughput Contribution of
Reduction of Greenhouse Gas Emissions
Comparative Water Usage per Unit of Sales
FY2019
Toray’s Water Treatment Membranes
51 million tons/day
FY2019
31.8%
FY2019
51.7%
800
600
400
200
0
(Million tons/day)
60
50
40
30
20
10
0
300
250
200
150
100
50
0
(%)
35
30
25
20
15
0
150
100
50
0
(%)
65
60
55
50
45
0
COVID-19 and BEYOND
Coexisting with COVID-19
—Clearing a path toward a sustainable future
Toray Group is making a contribution to suppressing the spread of COVID-
19 and to providing treatments by its materials capabilities. We at Toray
Group consider it our mission to provide fundamental solutions by bringing
to bear our innovative technologies and advanced materials to address an
array of issues impacting the world on a global scale.
Toray Industries, Inc.
Integrated Annual Report 2020
14
Overcoming a difficult worldwide
situation, and aiming to realize our
long-term corporate vision
The spread of the COVID-19 pandemic threatens
the lives and lifestyles of people around the world,
and this blow to the global economy is said to sur-
pass that of the 2008 financial crisis. To address
this, Toray Group is offering its adhesive blood-puri-
fying device TORAYMYXIN™, medical gowns, and
nonwoven fabrics for masks that will all contribute
to containing the spread and to treating COVID-19.
As a basic materials manufacturer, Toray Group
will maintain its efforts to consistently supply our
products that underpin society. Moreover, we are
committed to the development of innovative tech-
nologies and advanced materials that will work to
materially transform society, with an eye toward the
new world that will arise after this situation abates.
Our aim, for when we overcome this worldwide
calamity, is that Toray Group be a corporate entity
that possesses a high degree of value for all of its
stakeholders. We will promote the medium-term
management program, “Project AP-G 2022” as we
advance toward the realization of the long-term cor-
porate vision, “TORAY VISION 2030.”
Toray obtains tentative approval in
Canada for use of TORAYMYXIN™ as
treatment for COVID-19
Toray has received an Interim Order from
the Canadian Authority, Health Canada, for
the use of its endotoxin adsorption cartridge
TORAYMYXIN™, as a treatment for patients
infected with COVID-19. TORAYMYXIN™
is already in use as a treatment for patients
with septic shock, but with this authorization,
it was granted expanded indications to treat
COVID-19 patients with acute respiratory fail-
ure in the absence of cardiac failure or fluid
overload and diffuse alveolar damage (DAD)
(HRCT findings).
Toray requested by the Japanese
government to deliver medical gowns
produced in Japan
Based on a request from the Japanese gov-
ernment that had been hit by tight domestic
demand for medical gowns on account of
the COVID-19 pandemic, Toray decided to
deliver one-time use medical gowns (isola-
tion gowns) to the Ministry of Health, Labour,
and Welfare. With the objective of provid-
ing frontline sites with a steady supply of
required volumes within short lead times,
Toray Group will fully engage its domestic
supply chain, and plans to deliver a total of
8.1 million pieces between May 2020 and
March 2021.
In addition, in order to provide protective
clothing for medical professionals and others,
the Company plans to secure domestic pro-
duction, together with ramping up production
outside of Japan.
Enhancing and expanding supply
chain of nonwoven fabrics for masks
in Japan
Toray is enhancing and expanding its supply
network, and is fully utilizing its global pro-
duction facilities to provide nonwoven fabric
for masks to locations in Japan. In tandem
with implementing a system to expand pro-
duction by leveraging its overseas bases,
Toray upgraded its nonwoven fabric test
facilities within its Shiga Plant, enabling
monthly production of up to roughly 100
million units of nonwoven fabric for masks
supplied to domestic manufacturers.
Toray Industries, Inc.
Integrated Annual Report 2020
15
t i o
s
s
a
e
v
o
n
s i n
n
t
n I n
u
e
e
G r
( G R ) b
F u t u r e T O R A Y - 2 0 2 0 s P r o j e c
t
)
( F T P r o j e c
I n n o v a t i o n
b u s i n e s s
f e
L i
( L I
)
Four perspectives
of the world
envisioned in 2050
by Toray Group
(Toray Group
Sustainability Vision)
E
n
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t
&
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The
Toray Group’s
innovative
technologies
and advanced
materials
“toray vision 2030”
Long-term Corporate Vision “TORAY VISION 2030”
—Achieving Sound, Sustainable Growth and Creating Social Value
With an eye toward 2030, we have formulated our new long-term corporate vision, “TORAY VISION
2030” – Achieving Sound, Sustainable Growth and Creating Social Value. This vision serves as a guide-
post in our efforts to be a high-value corporate group to all our stakeholders. We will promote the long-
term strategies as laid out in “TORAY VISION 2030” and work to achieve our numerical targets for fiscal
2030 in order to realize the world as envisioned by Toray Group in 2050 as part of our “Toray Group
Sustainability Vision.”
Toray Group Sustainability Vision
Long-term Corporate Vision
“TORAY VISION 2030”
Medium-term Management Program
“Project AP-G 2022”
Toray Group Sustainability Vision
The Toray Group Sustainability Vision clarifies the four perspectives of
the world in 2050 that Toray Group aims to achieve, as well as the initia-
tives that must be taken in order to realize them. More specifically, the
Toray Group mission is to provide through innovative technologies and
advanced materials the necessary solutions to the challenges facing the
world in terms of both development and sustainability, including the issues
of an ever-increasing global population, aging populations, climate change,
water shortages, and resource depletion. With the declaration that “we
will work to ensure that our own growth will not negatively impact global
sustainability while doing our utmost with our business partners worldwide
to address global issues, including the goals of the Paris Agreement and
the United Nations Sustainable Development Goals (SDGs),” the Toray
Group Sustainability Vision shows the path forward for Toray Group and
forms the foundation for TORAY VISION 2030.
Toray Industries, Inc.
Integrated Annual Report 2020
16
Toray Group Sustainability Vision
Long-term Corporate Vision
“TORAY VISION 2030”
Medium-term Management Program
“Project AP-G 2022”
Achieving the Toray Group Sustainability Vision
In “AP-Growth TORAY 2020,” our previous long-term corporate vision, we divided our businesses into three
categories: core growth driving businesses, strategically expanding businesses, and intensively developing and
expanding businesses. Under “TORAY VISION 2030,” we are promoting cross-segment initiatives to improve
earnings in the Green Innovation (GR) Business, which focuses on contributing to the resolution of global
environmental, resource, and energy issues, and the Life Innovation (LI) Business, which aims to
contribute to better medical care and longevity, the fostering of public health, and the sup-
port of personal safety. At the same time, we are working on the Future Toray-2020s
Project (FT Project), a group-wide effort to focus resources in major themes
on both a qualitative and quantitative basis and accelerate the creation
and development of new businesses and achieving total sales of
around ¥1 trillion in the 2020s.
The Growth Model
for Achieving the
Sustainability Vision
The
Toray Group’s
innovative
technologies
and advanced
materials
Ca
r
b
o
n
F
i
b
e
r
C
o
m
p
o
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n
v
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r
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&
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M
a
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rials
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P
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f
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m
a
n
c
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C
h
F
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r
s
&
T
e
e
x
t
i
l
e
s
m
i
c
a
l
s
t i o
s
s
v
a
e
n
o
s i n
u
n
t
n I n
e
e
G r
( G R ) b
F u t u r e T O R A Y - 2 0 2 0 s P r o j e c
t
)
( F T P r o j e c
I n n o v a t i o n
b u s i n e s s
f e
L i
)
( L I
Four perspectives
of the world
envisioned in 2050
by Toray Group
(Toray Group
Sustainability Vision)
Long-term Growth Strategies in “TORAY VISION 2030”
Toray Group aims to achieve sound, sustainable growth while promoting a business model transformation by accu-
rately identifying changing industrial trends brought about by demographic factors, environmental issues, and tech-
nological innovation. With this in mind, we are using active investment to promote a “global expansion in growth
business fields.” To make this possible, we are working to maximize the value we can create over the medium- to
long-term by “strengthening competitiveness” through ongoing business model innovations and total cost reduc-
tions, and by “strengthening the management foundation” to enable investment for growth based on enhanced
investment efficiency and an improved financial structure.
Long-term strategies to achieve “sound, sustainable growth”
Quantitative Targets for FY 2030
1. Global expansion in growth business fields
• Promote GR businesses that help solve global environmental
issues as well as resource and energy issues
• Promote LI businesses that contribute to better medical care
and longevity, foster public health, and support personal safety
2. Strengthening competitiveness
• Create new value through business advancement and high
added-value creation, thereby providing solutions with a mate-
rials-oriented approach to customers and society
• Pursue dramatic cost reductions by setting challenging targets
as well as strive to reduce environmental impact
3. Strengthening the management foundation
• Improve cash flow and capital efficiency, and balance financial
soundness and growth investment
• Reform and revitalize the business and organizational structures
of low-growth and low-profitability businesses
FY 2013 Actual
(baseline year)
(J-GAAP)
FY 2030 Targets
(compared to
FY 2013) (IFRS)
GR Net sales/Revenue
463.1 billion yen
4 fold
LI Net sale/Revenues
119.6 billion yen
6 fold
Avoided CO2 emissions
40 million tons
8 fold
Contributed annual water
filtration throughput
27.23 million
tons/day
3 fold
Greenhouse gas emissions
per unit of sales/revenue in
production activities
Water consumption per
unit of sales/revenue in
production activities
33.7 tons/
billion yen
30%
reduction
1,520 tons/
billion yen
30%
reduction
Toray Industries, Inc.
Integrated Annual Report 2020
17
The Toray Group
Value Creation Process
Under “TORAY VISION 2030,” we will
continue to provide new value in society
through mutual cooperation in R&D, sales
and marketing, and production, the key
strengths of Toray Group, based on the core
values of “contributing to society through
business activities,” “management from a
long-term perspective,” and “people-centric
management.” At the same time, we will
focus on fostering co-creation with our cus-
tomers and supply chain partners, starting
at the materials stage. In this way we will
contribute to the realization of the four per-
spectives of the world as outlined in Toray
Group Sustainability Vision.
R&D
Engaging in R&D to cre
through technologic
ate n
e
w
al in
n
o
v
m
a
r
k
e
t
s
Fibers &
Textiles
Life Science
a
t
i
o
n
g technological
e strengths
din
a
r
g
p
u
y
b
s
n
o
id
w
-
p
u
o
r
g
i
t
a
c
i
l
p
p
a
t
c
u
g
n
i
s
u
Performance
Chemicals
n
o
i
t
a
v
d
o
o
n
r
p
g
n
i
n
i
z
li
a
Corporate
Philosophy
Carbon Fiber
Composite
Materials
e
R
Production
Meeti n g c u s
t
a r o b u s t
a n
g
o m e r n e e ds by buildin
al s u pply chain
p ti m
d o
Sales &
Marketing
Environment
&
Engineering
Innovation
through
Co-creation
Customers
Providing
New Value
to Society
Four Perspectives of the World
as Envisioned in 2050
(Toray Group Sustainability Vision)
Value that we cherish as
management core value
Contributing to
society through
business
activities
Management
from a
long-term
perspective
People-centric
management
1971
Marketing of ECSAINE®,
ultra-microfiber nonwoven
fabric with suede texture, began
1980
Marketing of ROMEMBRA®
reverse osmosis membrane
elements began
1959
Manufacture of LUMIRRORTM
polyester film began
Manufacture and marketing of
carbon fiber TORAYCA® began
1941
Succeeded in the synthesis
and melt spinning of Nylon 6
fiber using proprietary
technology
1926
Began as a manufacturer of
viscose rayon
1926
1930
1940
1950
1960
1970
1980
2000
2010
2020 2022 (FY)
“US GAAP” for 1964 - 1983, “Japanese GAAP” after 1984
Non-consolidated
Toray Industries, Inc.
Integrated Annual Report 2020
18
Proposal
Needs
A net zero
emissions world,
where greenhouse
gas emissions are
completely offset by
absorption
A world where
resources are
sustainably
managed
A world with a
restored natural
environment, with
clean water and air
for everyone
A world where
everyone enjoys
good health and
hygiene
(Trillion yen)
Net Sales, Revenue
2006
Strategic partnership started with
UNIQLO CO., LTD.
1990
TORAYCA® carbon fiber prepreg
certified as a primary structural
material for The Boeing Company’s
passenger aircraft
FY 2019 Consolidated Net Sales
¥2,214.6 billion
FY 2000 Consolidated Net Sales
¥1,075.4 billion
FY 1990 Consolidated Net Sales
¥917.1 billion
1990
Consolidated
3.0
2.5
2.0
1.5
1.0
0.5
0
g technological
e strengths
din
a
r
g
p
u
y
b
s
n
o
i
t
a
c
i
l
p
p
a
id
w
-
p
u
o
r
g
g
n
i
s
u
n
o
i
t
a
v
t
c
u
d
o
o
n
r
p
g
n
i
n
i
z
li
a
e
R
R&D
Engaging in R&D to cre
through technologic
Fibers &
Textiles
Life Science
ate n
e
w
al in
n
o
v
m
a
r
k
e
t
s
a
t
i
o
n
Corporate
Philosophy
Sales &
Marketing
Performance
Chemicals
Carbon Fiber
Composite
Materials
Environment
&
Engineering
g
o m e r n e e ds by buildin
al s u pply chain
Production
Meeti n g c u s
t
p ti m
d o
a n
a r o b u s t
Value that we cherish as
management core value
Contributing to
society through
business
activities
Management
from a
long-term
perspective
People-centric
management
1971
Marketing of ECSAINE®,
ultra-microfiber nonwoven
fabric with suede texture, began
1980
Marketing of ROMEMBRA®
reverse osmosis membrane
elements began
1959
Manufacture of LUMIRRORTM
polyester film began
Manufacture and marketing of
carbon fiber TORAYCA® began
Proposal
A net zero
emissions world,
where greenhouse
gas emissions are
completely offset by
absorption
A world where
resources are
sustainably
managed
Innovation
through
Co-creation
Customers
Providing
New Value
to Society
Four Perspectives of the World
as Envisioned in 2050
(Toray Group Sustainability Vision)
Needs
2006
Strategic partnership started with
UNIQLO CO., LTD.
1990
TORAYCA® carbon fiber prepreg
certified as a primary structural
material for The Boeing Company’s
passenger aircraft
FY 2019 Consolidated Net Sales
¥2,214.6 billion
FY 2000 Consolidated Net Sales
¥1,075.4 billion
FY 1990 Consolidated Net Sales
¥917.1 billion
A world with a
restored natural
environment, with
clean water and air
for everyone
A world where
everyone enjoys
good health and
hygiene
(Trillion yen)
Net Sales, Revenue
3.0
2.5
2.0
1.5
1.0
Enhancing Long-term
Corporate Value
Toray Group began as a manufacturer of
viscose rayon in 1926. On top of all three
major synthetic fibers such as nylon, polyes-
ter, and acrylic, the Company has continued
to develop innovative technologies while
creating a host of advanced materials and
high value-added products in a broad range
of films, chemicals, resins, electronics and
information materials, carbon fiber compos-
ite materials, pharmaceuticals and medical
products, water treatment, and environmen-
tal fields. With an eye toward how society
will evolve in 2050 and how innovative tech-
0.5
nologies and advanced materials may be
utilized as a driving force, we will adopt a
long-term perspective toward enhancing our
corporate value.
1941
Succeeded in the synthesis
and melt spinning of Nylon 6
fiber using proprietary
technology
1926
Began as a manufacturer of
viscose rayon
1926
1930
1940
1950
1960
1970
1980
“US GAAP” for 1964 - 1983, “Japanese GAAP” after 1984
Non-consolidated
1990
Consolidated
2000
2010
2020 2022 (FY)
0
Toray Industries, Inc.
Integrated Annual Report 2020
19
Review of “Project AP-G 2019”
An Aggressive Business Expansion
“Project AP-G 2019” was the medium-term manage-
ment program we launched in April 2017. The program’s
three basic strategies were “business expansion in
growth business fields,” “expansion and advancement
of global business,” and “strengthening competitive-
ness.” The program promoted a growth strategy cen-
tered on expanding our business in order to achieve our
GR Project Annual Growth Rate at 9%
goals for business development outlined in “AP-Growth
As part of our “business expansion in growth busi-
TORAY 2020,” our long-term corporate vision. We have
ness fields” effort, we promoted our Green Innovation
at the same time been strengthening our efforts to cre-
Business Expansion (GR) Project and our Life Innovation
ate new sources of revenue that will contribute to sus-
Business Expansion (LI) Project. In addition, as part of
tainable growth and enhanced corporate value in 2020
our “expansion and advancement of global business”
and beyond.
strategy, we focused our efforts on the AE (Asia,
Against this backdrop, consolidated net sales reached
Americas, Europe, and Emerging Regions) Project in
record highs for the two consecutive years from fiscal
order to capture earnings opportunities in countries and
2017, with operating income also reaching a record high
regions experiencing favorable economic growth.
in fiscal 2017. However, net sales in fiscal 2019, the final
As a result, sales for GR businesses expanded at
year of “AP-G 2019,” was significantly below target due
an average annual rate of about 9%, largely in business
to factors such as deteriorating demand for automobiles
areas focused on energy conservation and new energy,
and smartphones, a slowdown in the Chinese economy
including carbon fiber composite materials and battery
due to escalating trade friction between the U.S.A. and
separator films. Sales for LI businesses expanded at an
China, and a sharp contraction in the global economy
average annual rate of 4%, mainly in advanced materi-
due to the spread of COVID-19. While we worked to off-
als such as nonwoven fabrics for hygiene products. In
set this by improving earnings through enhanced added
the AE Project, we were able to expand sales overseas
value and reducing variable and fixed costs through total
by increasing investment and establishing new business
cost reductions, our main KPIs fell short of our “AP-G
locations in regions around the world that are expected to
2019” targets.
show favorable economic growth moving forward.
Net Sales (Billion yen)
Operating Income (Billion yen)
“AP-G 2013”
“AP-G 2016”
“AP-G 2019”
“AP-G 2013”
“AP-G 2016”
“AP-G 2019”
1,837.8
1,588.6
1,592.3
2,388.8
2,204.9
2,214.6
2,104.4
2,010.7
2,026.5
154.5
156.5
146.9
141.5
131.2
123.5
107.7
105.3
83.4
Net Sales of
Green Innovation
Net Sales of
Life Innovation
Net Sales of Expansion
Reductions from
and Advancement of
the Total Cost Reduction
Businesses (Billion yen)
Businesses (Billion yen)
Global Businesses
(TC) Project (Billion yen)
900.0
820.1
786.9
712.3
628.2
223.0
223.2
211.9
195.5
(Billion yen)
1,500.0
270.0
1,271.3
1,150.8
1,190.1
1,042.1
233.9
Target
220.0
• Activities of variable cost reduction
• Control fixed costs through P-ratio*
accounting method
92.0
• Innovation of production process
Actual (total in 3 years)
• Variable costs: reduced 92 billion yen
(reduction rate: 10.2% in 3 years)
• Fixed cost: reduced 91.2 billion yen
(P-ratio for each FY= 0.99, 1.03, 1.02)
• Innovation of production process
reduced 50.7 billion yen
*P(Performance) ratio = fixed cost growth
rate / marginal profit growth rate
Target: less than 1.0 or monitored by
division under budget
91.2
50.7
2012
2013
2014
2015
2016
2017
2018
2019
2011
(FY)
2012
2013
2014
2015
2016
2017
2018
2019
2011
(FY)
2016 2017 2018 2019 2019
2016 2017 2018 2019 2019
2016 2017 2018 2019 2019
FY 2017 – FY 2019 Total
(FY)
Target
(FY)
Target
(FY)
Target
Actual Target
Toray Industries, Inc.
Integrated Annual Report 2020
20
Exceeding the Target for
Strengthened Competitiveness
Key Challenges for the
Next Medium-term Management Program
Despite our efforts, we fell short of the KPIs set in “AP-G
2019.” Major shifts in the external environment, includ-
ing a sharp rise in raw material and fuel prices, as well
In terms of “strengthening competitiveness,” we pro-
as trade friction between the U.S.A. and China, contrib-
moted the Total Cost Reduction Project (TC Project)
uted to a downturn in demand as well as delays in the
throughout the Group, both in terms of reducing vari-
launches of new products. There was also an increase
able and fixed costs and fundamentally reducing costs
in costs associated with the launch of new projects and
through innovations in the production process. At the
an increase in goodwill costs associated with M&A proj-
same time, we focused on strengthening our corporate
ects. We consider the challenge is to harvest the bene-
structure and our sales and marketing. As a result, we
fits from capital investments made under “AP-G 2019”
were able to reduce costs over the three years covered
in the early stage, and to comprehensively strengthen
by the program by ¥233.9 billion, exceeding the pro-
our corporate structure so that we can better address
gram target of ¥220.0 billion.
growing uncertainty.
Net Sales (Billion yen)
Operating Income (Billion yen)
“AP-G 2013”
“AP-G 2016”
“AP-G 2019”
“AP-G 2013”
“AP-G 2016”
“AP-G 2019”
2,388.8
2,204.9
2,214.6
2,104.4
2,010.7
2,026.5
154.5
156.5
146.9
141.5
131.2
123.5
1,837.8
1,588.6
1,592.3
107.7
105.3
83.4
Exchange rate for “AP-G 2019” target : 100 yen / US$
ROA = Operating Income / Total Assets
ROE = Net Income Attributable to Owners of Parent / Owners’ Equity
Net Sales of
Green Innovation
Businesses (Billion yen)
Net Sales of
Life Innovation
Businesses (Billion yen)
Net Sales of Expansion
and Advancement of
Global Businesses
(Billion yen)
1,500.0
Reductions from
the Total Cost Reduction
(TC) Project (Billion yen)
900.0
820.1
786.9
712.3
628.2
270.0
1,271.3
1,150.8
1,190.1
1,042.1
223.0
223.2
211.9
195.5
233.9
220.0
Target
• Activities of variable cost reduction
• Control fixed costs through P-ratio*
accounting method
92.0
• Innovation of production process
Actual (total in 3 years)
• Variable costs: reduced 92 billion yen
(reduction rate: 10.2% in 3 years)
• Fixed cost: reduced 91.2 billion yen
(P-ratio for each FY= 0.99, 1.03, 1.02)
• Innovation of production process
reduced 50.7 billion yen
*P(Performance) ratio = fixed cost growth
rate / marginal profit growth rate
Target: less than 1.0 or monitored by
division under budget
91.2
50.7
2011
(FY)
2012
2013
2014
2015
2016
2017
2018
2019
2012
2013
2014
2015
2016
2017
2018
2019
2011
(FY)
2016 2017 2018 2019 2019
Target
(FY)
2016 2017 2018 2019 2019
Target
(FY)
2016 2017 2018 2019 2019
(FY)
Target
FY 2017 – FY 2019 Total
Actual Target
Toray Industries, Inc.
Integrated Annual Report 2020
21
“AP-G 2019” Target and FY 2019 (Actual)FY 2016ActualFY 2019Actual“AP-G 2019”TargetNet Sales (billion yen)2,026.52,214.62,700.0Operating Income(billion yen)146.9131.2250.0Operating Income to Net Sales Ratio7.2%5.9%9%ROA6.3%4.8%around 9%ROE10.1%5.0%around 12%D/E Ratio0.700.86below 1 (guideline)Difference between FY 2019 Actual and “AP-G 2019” Target (by Segment) (billion yen)Net Sales“AP-G 2019”TargetFY 2019ActualChangesFibers & Textiles1,120.0883.1-236.9Performance Chemicals950.0770.8-179.2Carbon Fiber Composite Materials260.0236.9-23.1Environment & Engineering270.0252.3-17.7Life Science80.053.3-26.7Others20.018.2-1.8Adjustments———Total2,700.02,214.6-485.4Operating Income“AP-G 2019”TargetFY 2019ActualChangesFibers & Textiles92.060.7-31.3Performance Chemicals103.058.7-44.3Carbon Fiber Composite Materials45.021.0-24.0Environment & Engineering20.011.2-8.8Life Science9.01.6-7.4Others3.03.4+0.4Adjustments22.025.5-3.5Total250.0131.2-118.8 Medium-term Management Program “Project AP-G 2022”
Resilience and Proactive Management—Sustainable Growth and New Development
We launched “Project AP-G 2022,” a medium-term man-
understanding the changing trends in industry and accord-
3 Basic Strategies
3 Basic Strategies
Specific Measures
agement program covering the three years from fiscal 2020
ingly reforming our business model.
to fiscal 2022, with the aim of achieving sound, sustainable
With this in mind, we will continue to work to strengthen
growth outlined in “TORAY VISION 2030,” our long-term
competitiveness by reducing total costs, expanding the
corporate vision. While maintaining our basic strategy of pro-
Green Innovation (GR) Business and the Life Innovation (LI)
active investment to expand our business, we will work to
Business, while following the basic “AP-G 2019” strategies of
maximize value which Toray Group creates over the medium-
“global expansion in growth business fields” and “strength-
to long-term and build a strong business foundation for sus-
ening competitiveness” in “AP-G 2022.” On the other hand,
tainable growth moving forward, specifically by strengthening
in light of the challenges that emerged during the period cov-
our financial structure and promoting the business structural
ered by “AP-G 2019,” we will aggressively pursue structural
reforms necessary to advance our growth strategies.
reforms in our low-growth and low-profitability businesses
Amid ongoing expectations for significant changes
while at the same time working to strengthen the manage-
in the business environment due to demographic shifts,
ment foundation to increase cash flow and improve capital
environmental issues, and technological innovations,
efficiency. In addition to these basic strategies, we will also
we also note that there remains the potential for a fun-
promote as key strategies within “AP-G 2022,” “initiatives for
damental transformation in the industrial structure and
a circular economy,” “reduction of greenhouse gas emissions
social systems. This could create business opportunities,
in the production stage,” “advanced business management
but also risks, such as a narrowing in previously existing
through the use of digital technologies,” and “securing and
businesses. Amid such an environment, we believe it vital
developing human resources.” We aim to achieve our finan-
to further strengthen our competitiveness by accurately
cial as well as sustainability goals based on these efforts.
Three Basic Strategies
Key Challenges
P24-25
1. Global Expansion in Growth Business Fields
By leveraging Toray Group’s strengths in advanced
materials and core technologies, we will continue to
develop on a global scale the Green Innovation (GR)
Business Expansion project and the Life Innovation (LI)
Expansion project as group--wide projects.
P68-73
1. Initiatives for a Circular Economy
Leveraging the various technologies of Toray Group, we
will contribute to realizing a circular economy by means
such as the promotion of recycling and utilization of bio-
mass, the increased use of hydrogen and renewable
energy, as well as recycling of water.
P27
2. Strengthening Competitiveness
Through the Total Cost Reduction (NTC) Project, we aim
to reduce costs by ¥150 billion over a period of three
years. We are also focusing on business advancement
and high added-value creation, while at the same time
enhancing workplace competency in sales and market-
ing and production.
P28
3. Strengthening the Management Foundation
With the goal of ensuring our financial soundness, we
will operate our business with a focus on maintaining
a balance in profit, cash flow, and asset efficiency.
Moreover, in order to achieve new growth, we will pro-
mote structural reforms in low-growth and low-profit-
ability businesses.
2. Reduction of Greenhouse Gas Emissions in the
P80-81
Production Stage
We launched the “Challenge 30 Project” as a group-wide
project, and will formulate and execute specific action
plans with the aim of reducing greenhouse gas (GHG)
emissions and water usage per unit of revenue by fiscal
2030 by 30% compared to fiscal 2013.
3. Advanced Business Management Through the Use
of Digital Technologies
P74-75
The “Toray Digital Transformation (TDX) Project” is
designed to improve the advancements in management
in a variety of fields, including R&D, production, sales and
marketing, finance and accounting, and purchasing and
logistics through digital transformation (DX).
4. Securing and Developing Human Resources
Toray Group will secure, develop, and promote future man-
agement candidates and professional human resources with
strong capabilities to lead on the frontlines of our operations.
P30-33
Toray Industries, Inc.
Integrated Annual Report 2020
22
TORAY VISION
2030
“AP-G 2019”
“AP-G 2022”
Business
expansion in
growth business
fields
Expansion and
advancement of
global business
1
2
3
Strengthening
competitiveness
Global
expansion in
growth
business fields
Strengthening
competitiveness
1
2
(1) Green Innovation business expansion
GR Project
(2) Life Innovation business expansion
LI Project
(1) Total cost reductions
NTC Project
(2) Business advancement/high added-value creation
(3) Enhancing workplace competency in sales &
marketing and production
Strengthening
3
the management
foundation
(1) Strengthening financial structure by improving
cash efficiency
(2) Business structure reform of low-growth and
low-profitability businesses
Net Sales/Revenue Targets by Segment
Operating Income/Core Operating Income
2,600.0
Targets by Segment (Billion yen)
180.0
(Billion yen)
2,388.8
18.5
53.7
257.7
215.9
868.8
2,214.6
18.2
53.3
252.3
236.9
770.8
20.0
55.0
230.0
275.0
990.0
141.5
131.2
3.1
1.3
12.2
11.5
67.7
72.9
3.4
1.6
11.2
21.0
58.7
60.7
974.3
883.1
1,030.0
27.3
25.5
2.0
0
19.0
24.0
90.0
76.0
31.0
(FY)
2018
Actual (J-GAAP)
2019
Actual (J-GAAP)
2022
Target (IFRS)
(FY)
2018
Actual (J-GAAP)
2019
Actual (J-GAAP)
2022
Target (IFRS)
Fibers & Textiles
Performance Chemicals
Carbon Fiber Composite Materials
Environment & Engineering
Life Science
Others
Adjustments
Basic Strategies of “Project AP-G 2022”
TORAY VISION
2030
“AP-G 2019”
“AP-G 2022”
3 Basic Strategies
3 Basic Strategies
Specific Measures
Business
expansion in
growth business
fields
Expansion and
advancement of
global business
1
2
3
Strengthening
competitiveness
1
2
3
Global
expansion in
growth
business fields
Strengthening
competitiveness
(1) Green Innovation business expansion
GR Project
(2) Life Innovation business expansion
LI Project
(1) Total cost reductions
(2) Business advancement/high added-value creation
(3) Enhancing workplace competency in sales &
marketing and production
NTC Project
Strengthening
the management
foundation
(1) Strengthening financial structure by improving
cash efficiency
(2) Business structure reform of low-growth and
low-profitability businesses
Exchange rate for “AP-G 2022” target : 105 yen / US$
ROA = Operating Income, Core Operating Income / Total Assets
ROE = Net Income Attributable to Owners of Parent, Profit
Attributable to Owners of Parent / Owners’ Equity
Net Sales/Revenue Targets by Segment
(Billion yen)
2,600.0
2,388.8
18.5
53.7
257.7
215.9
868.8
2,214.6
18.2
53.3
252.3
236.9
770.8
20.0
55.0
230.0
275.0
990.0
974.3
883.1
1,030.0
Operating Income/Core Operating Income
Targets by Segment (Billion yen)
180.0
141.5
3.1
1.3
12.2
11.5
67.7
72.9
131.2
3.4
1.6
11.2
21.0
58.7
60.7
27.3
25.5
2.0
0
19.0
24.0
90.0
76.0
31.0
(FY)
2018
Actual (J-GAAP)
2019
Actual (J-GAAP)
2022
Target (IFRS)
(FY)
2018
Actual (J-GAAP)
2019
Actual (J-GAAP)
2022
Target (IFRS)
Fibers & Textiles
Performance Chemicals
Carbon Fiber Composite Materials
Environment & Engineering
Life Science
Others
Adjustments
Toray Industries, Inc.
Integrated Annual Report 2020
23
Financial Targets in FY 2022 (Billion yen)FY 2019 Actual(J-GAAP)FY 2022Target(IFRS)Net Sales/Revenue2,214.62,600.0Operating Income/Core Operating Income131.2180.0Operating Income to Net Sales/Core Operating Income to Revenue5.9%7%ROA4.8%about 7%ROE5.0%about 9%Free Cash Flows58.1(in 3 years)120 or more (in 3 years)D/E ratio0.86around 0.8(guideline)Dividend Payout Ratio —about 30%Sustainability Targets in FY 2022FY 2013Actual(baseline year)(J-GAAP)FY 2019Actual(compared with FY 2013)(J-GAAP)FY 2022Target(compared withFY 2013)(IFRS)GR Net sales/Revenue463.1billion yen820.1billion yen1,000.0billion yenLI Net sales/Revenue119.6billion yen223.2billion yen300.0billion yenAvoided CO2 emissions40 million tons5.1 fold5.3 foldContributed annual water filtration throughput27.23million tons/day1.9 fold2.4 foldGreenhouse gas emissions per unit of sales/revenue in production activities33.7tons/billion yen12%reduction20%reductionWater consumption per unit of sales/revenue in production activities1,520tons/billion yen23%reduction25%reduction
Basic Strategy 1: Global Expansion in
Growth Business Fields
Green Innovation Business Expansion Project (GR Project)
Growth Business Fields
pursuing reduced costs and the development of highly
One of the key growth business fields in the GR Project
functional new products while simultaneously building an
is battery separator films for lithium-ion batteries, where
enhanced global production system in response to grow-
high growth is expected in automotive applications,
ing demand in China, where environmental regulations
mainly in Europe. Moreover, with an expansion in the mar-
are being tightened, and in the Middle East, where large
ket for consumer applications, we will focus on expand-
seawater desalinations plants are being constructed.
ing production capacity and promote cost reduction in
order to capture this demand. In the field of carbon fiber
Targeting Revenue of ¥1 Trillion
products for wind turbine blades, placement restrictions
We are targeting revenue in the Green Innovation
have contributed to wind power facilities being increas-
Business in fiscal 2022 of ¥1 trillion and will focus on
ingly installed in offshore and low-wind regions, and
capital investment and R&D in large scale themes
with an expected increase in blade size and the volume
such as lightweight materials, biomass-derived mate-
of carbon fiber used, we aim to expand our business by
rials, recycled materials, battery separator films, large
increasing production capacity at Zoltek Companies, Inc.
tow carbon fibers for wind turbine blade applications,
In reverse osmosis (RO) membranes, we are focused
water treatment membranes, and hydrogen and fuel
on securing the leading global market share, and are
cell-related materials.
Carbon fiber for aircrafts
Carbon fiber for
compressed vessels
Carbon fiber for
wind turbine blades
Carbon fiber for automobiles
Resins for automobiles
Air filter
Water treatment membranes
Battery separator film for
lithium-ion batteries
Toray Waterless Plate®
Net Sales/Revenue of
Life Innovation Businesses
(Billion yen)
300
300.0
Support personal safety
223.2
Support health and
longevity
+
Improve quality of
medical-care, Ease
burdens on medical
professionals
200
100
0
(FY)
2019
Actual
(J-GAAP)
2022
Target
(IFRS)
Net Sales/Revenue of
Green Innovation Businesses
Demand for
Battery separator films
(Toray estimation)
(Billion yen)
1,000
1,000
820.1
(billion m2/yr)
Automotive applications
Consumer applications
annual growth rate
about 22%
8
6
4
2
0
Demand for wind turbine
blades applications
(Toray estimation)
(1,000 t/yr)
40
annual growth rate
about 13%
Market size of RO membranes
for industrial applications
(Toray estimation)
(10,000 units/yr)
300
annual growth rate
about 7%
30
20
10
0
200
100
0
2019
Actual
(J-GAAP)
2022
Target
（IFRS）
2019
2022
2019
2022
2019
2022
800
600
400
200
0
(FY)
Toray Industries, Inc.
Integrated Annual Report 2020
24
Contribute to solving global environmental, resource, and energy issues Life Innovation Business Expansion Project (LI Project)
Growth Business Fields
personal safety in abnormal weather conditions and traffic
Toray Group is committed to supporting the activities
accidents, including through the supply of heat shielding/
of daily living (ADL) and health of senior citizens and
light shielding/UV protective cloth SUMMER SHIELD™
those requiring nursing care with its nonwoven fabrics
products and LIVMOA™ protective clothing.
for hygiene products and its carbon fiber that is used in
facilitating access. In the medical field, we are developing
Targeting Revenue of ¥300 billion
and supplying not only pharmaceuticals, but through our
In addition to the ideas of supporting health maintenance
advanced materials and innovative technologies products
and longevity, as well as improving the quality of medical care
such as medical-use hitoe™, a wearable electrocardiogram
and easing burdens on medical professionals, we are broad-
monitoring system, dialyzers, and catheters. We will also
ening the definition of life innovation to include products for
be focusing on business expansions in fields supporting
personal safety, including in regard to threats such as abnormal
weather and natural disasters, which appear to be increasing in
recent years. Moreover, by providing solutions that are unique
to the Group thanks to its expertise in materials, we aim to
boost revenue in the Life Innovation Business to ¥300 billion.
Nonwoven fabric
for hygiene products
Materials for
facilitating access
Sportswear fabrics
Dialyzers
Catheter
Medical-use hitoe™
Heat-shielding/light
shielding/UV protective
SUMMER SHIELD™
Nonwoven fabric with
flame-shielding property,
GULFENG™
Protective clothing
LIVMOA™
LIVMOA™ limited use protective clothing
Amid climate change and the increased movement around the world of peo-
ple and goods, there is also a growing risk of infectious disease spreading
around the world. Through combining the technologies of microporous films
and nonwoven fabrics, Toray has developed a new type of protective clothing
that can be worn comfortably while allowing moisture permeability but resist-
ing blood and viral penetration, something that has been an contradictory
issue in this type of product in the past. LIVMOA™ is an integrated, single-use
protective garment which Toray Group covers almost all aspects from materials
to finished products. The brand offers a range of products, including products
for medical professionals working in harsh environments to products for work-
ers in dusty and oily working environments and those working in clean rooms.
Net Sales/Revenue of
Demand for
Green Innovation Businesses
Battery separator films
(Toray estimation)
Demand for wind turbine
blades applications
(Toray estimation)
(Billion yen)
1,000
820.1
1,000
(billion m2/yr)
Automotive applications
(1,000 t/yr)
Consumer applications
annual growth rate
about 13%
Market size of RO membranes
for industrial applications
(Toray estimation)
(10,000 units/yr)
300
annual growth rate
about 7%
annual growth rate
about 22%
8
6
4
2
0
40
30
20
10
0
200
100
0
2019
Actual
2022
Target
(J-GAAP)
（IFRS）
2019
2022
2019
2022
2019
2022
800
600
400
200
0
(FY)
300
200
100
0
(FY)
Net Sales/Revenue of
Life Innovation Businesses
(Billion yen)
300.0
Support personal safety
223.2
Support health and
longevity
+
Improve quality of
medical-care, Ease
burdens on medical
professionals
2019
Actual
(J-GAAP)
2022
Target
(IFRS)
Toray Industries, Inc.
Integrated Annual Report 2020
25
Support health and longevityImprove quality of medical-care, Ease burdens on medical professionalsSupport personal safety Initiatives to Support Growth
Capital Investment, R&D, Intellectual Property
We are targeting capital investment over the three years
fields where the leveraging of our expertise in advanced
from fiscal 2020 of ¥500 billion. Of this amount, we
materials, our core technologies, and our global busi-
expect about half to focus on expanding growth, par-
ness base can be expected to generate synergies. We
ticularly in the Green Innovation Business and the Life
plan to allocate R&D resources to large-scale and highly
Innovation Business. We intend to focus our investment
profitable themes, with expected R&D investment over
in areas such as battery separator films, industrial carbon
the three years from fiscal 2020 of about ¥220 billion. In
fibers, and RO membranes. We also intend to bolster
intellectual property, we will raise the barriers to market
revenue through efficient capital investment, risk min-
entry through the filing of strategic patent applications
imization through the careful selection of projects, and
and knowhow protections while at the same time bol-
the efficient use of existing facilities. In terms of M&A
stering global intellectual property capabilities through
and alliances, Toray Group will conduct strategic M&A
enhancements to the patent management systems of
activity separate from capital investment, focusing on
domestic and overseas affiliated companies.
Capital Investment by Segment
Breakdown of R&D Expenses
2% 3%
5%
5%
5%
29%
10%
21%
Total in
“AP-G 2019”
479.4
billion yen
Total in
“AP-G 2022”
500.0
billion yen
40%
20%
20%
Fibers & Textiles
Performance Chemicals
Carbon Fiber Composite Materials
Environment & Engineering
Others
Life Science
40%
Others
Life Innovation
(LI) business
“AP-G 2022”
Total in 3 years
220.0
billion yen
Green
Innovation
(GR) business
Capital Expenditures (Billion yen)
Depreciation (Billion yen)
R&D Expenses (Billion yen)
Consolidated subsidiaries
Toray
Consolidated subsidiaries
Toray
117.0
Consolidated subsidiaries
Toray
174.0
134.3
147.5
143.0
110.3
108.0
104.1
110.1
70.6
76.5
78.0
66.4
17.5
66.9
17.3
48.8
49.5
68.0
16.0
52.0
39.7
37.2
35.0
33.5
33.5
39.0
(FY)
2018
(J-GAAP)
2019
(J-GAAP)
2020Forecast
(IFRS)
(FY)
2018
(J-GAAP)
2019
(J-GAAP)
2020Forecast
(IFRS)
(FY)
2018
(J-GAAP)
2019
(J-GAAP)
2020Forecast
(IFRS)
Major Capital Expenditure Projects
FY 2019
Alcantara S.p.A.
Zoltek Zrt.
Alcantara® production facilities
Carbon fiber production facilities
Toray Industries Hungary Kft.
Battery separator film SETELA™ production facilities
Toray Industries, Inc.
Fuel cell electrode substrate production facilities
FY 2020
Toray Industries Hungary Kft.
Battery separator film SETELA™ production facilities
Toray Plastics (America), Inc.
Polypropylene film production facilities
Toray Plastics (Malaysia) Sdn. Berhad
ABS resin production facilities
Toray Industries, Inc.
Integrated Annual Report 2020
26
1. Total Cost Reduction2. Business Advancement / High Added-value CreationTotal Cost Reduction Project (NTC Project)Target to reduce 150 billion yen in 3 yearsVariable Cost ReductionTarget to reduce100.0billion yenin variable costs(annual target : over 3.7% YoY)Fixed Cost ReductionTarget to reduce 35.0billion yenin production fixed costsInnovation of Production Process• Refine themes that directly link to substantial cost reduction• Aim for reduction effects at 15 billion yen in 3 years• Achieve advancement in products• Add high-value by integrating and combining products and services• Create new value in collaboration with external partners• Pursue innovation in the value chain using Information and Communication Technology (ICT)3. Enhancing Workplace Competency in Sales & Marketing and Production• Lead the maximization of value-adding by strengthening the ability of the sales force to gather information, provide supply chain insight, the ability to make comprehensive sales propos-als, and the ability to resolve issues• Continually improve labor productivity by strengthening the ability to maintain equipment, resolve onsite problems, and the ability to resolve issues in order to meet customer requirements Capital Investment by Segment
Breakdown of R&D Expenses
2% 3%
5%
5%
5%
29%
10%
21%
Total in
“AP-G 2019”
479.4
billion yen
Total in
“AP-G 2022”
500.0
billion yen
20%
Fibers & Textiles
Others
Performance Chemicals
Carbon Fiber Composite Materials
Environment & Engineering
40%
20%
Life Science
40%
Others
Life Innovation
(LI) business
“AP-G 2022”
Total in 3 years
220.0
billion yen
Green
Innovation
(GR) business
Capital Expenditures (Billion yen)
Depreciation (Billion yen)
R&D Expenses (Billion yen)
Consolidated subsidiaries
Toray
Consolidated subsidiaries
Consolidated subsidiaries
Toray
174.0
134.3
147.5
143.0
110.3
108.0
104.1
110.1
Toray
117.0
70.6
76.5
78.0
66.4
17.5
66.9
17.3
48.8
49.5
68.0
16.0
52.0
39.7
37.2
35.0
33.5
33.5
39.0
(FY)
2018
(J-GAAP)
2019
(J-GAAP)
2020Forecast
(IFRS)
(FY)
2018
(J-GAAP)
2019
(J-GAAP)
2020Forecast
(IFRS)
(FY)
2018
(J-GAAP)
2019
(J-GAAP)
2020Forecast
(IFRS)
Creating New Businesses
“AP-G 2022” establishes multiple large-scale themes
to drive next-generation growth, including not only
the GR Project and the LI Project, but also the com-
pany-wide “Future Toray-2020s Project (FT Project).”
By focusing resources in these areas, we will accel-
erate the development of products and technologies
as well as the formation of new business models as
part of our goal of generating total sales of around ¥1
trillion in the 2020s.
Hydrogen-fuel cell related
materials
(Image provided by
Toyota Motor Corporation)
Biomass-utilization
products and processing
technologies
Environmentally-friendly
printing solutions
Hygiene, Health-care
products
Sensing devices related
materials
Basic Strategy 2: Strengthening Competitiveness
Strengthening Competitiveness through Maximization of
Cost Reduction and Added Value
We will strengthen our competitiveness by promot-
¥150 billion over three years. We will also strengthen our
ing the “Total Cost Reduction Project (NTC Project),”
competitiveness through business advancement and
reducing variable and fixed costs, and innovation of pro-
high added-value creation, and enhancing workplace
duction process in order to achieve cost reductions of
competency in sales and marketing and production.
Toray Industries, Inc.
Integrated Annual Report 2020
27
1. Total Cost Reduction2. Business Advancement / High Added-value CreationTotal Cost Reduction Project (NTC Project)Target to reduce 150 billion yen in 3 yearsVariable Cost ReductionTarget to reduce100.0billion yenin variable costs(annual target : over 3.7% YoY)Fixed Cost ReductionTarget to reduce 35.0billion yenin production fixed costsInnovation of Production Process• Refine themes that directly link to substantial cost reduction• Aim for reduction effects at 15 billion yen in 3 years• Achieve advancement in products• Add high-value by integrating and combining products and services• Create new value in collaboration with external partners• Pursue innovation in the value chain using Information and Communication Technology (ICT)3. Enhancing Workplace Competency in Sales & Marketing and Production• Lead the maximization of value-adding by strengthening the ability of the sales force to gather information, provide supply chain insight, the ability to make comprehensive sales propos-als, and the ability to resolve issues• Continually improve labor productivity by strengthening the ability to maintain equipment, resolve onsite problems, and the ability to resolve issues in order to meet customer requirementsExamples of themes in “AP-G 2022” Basic Strategies 3: Strengthening
the Management Foundation
Strengthening the Financial Structure by Improving Cash Efficiency
In order to achieve sound, sustainable growth, we will
entire Group with the goal of reducing working capital
strive to operate our businesses with a stronger aware-
and more efficiently using funds.
ness of cash flow, which can be seen as a return on
In terms of reform to our financial structure, we aim
investment, with an aim of generating free cash flow of
to reduce the D/E ratio from under 1.0 to about 0.8.
more than ¥120 billion during the “AP-G 2022” period.
Finally, we have a new dividend payout ratio target of
To this end, we will conduct thorough management
about 30% with the goal of increasing dividends in line
of receivables, payables, and inventories across the
with performance.
Strengthening financial structure by
improving cash efficiency
Total of FY 2020 - FY 2022
• Improve the certainty of return on investment
• Introduce management-based free cash flows
CASH-IN
Cash flows from
operating activities
620 billion yen
or more
internally
• Reduce working capitals
• D/E ratio around 0.8
CASH-OUT
Cash flows from
investment activities
500 billion yen*
• Set goals for dividend payout ratio (about 30%)
Free Cash Flows
120 billion yen
or more
*exclude M&A
Business Structure Reform of Low-growth and Low-profitability Businesses
We promoted structural reforms in our businesses as part
businesses. That said, we will also consider reducing or
of our respective business strategies in “AP-G 2019,” but
withdrawing from businesses where the potential for
in “AP-G 2022” we will be selecting businesses in need
market growth is rather low or where it is difficult to
of structural reforms as part of an overall Company strat-
make the most of Toray Group strengths.
egy and promoting structural reform in low-growth and
Low-growth and low-profitability businesses are
low-profitability businesses. Our goal is to restore these
defined as businesses and companies that fall below
low-growth and low-profitability businesses through
growth and profitability thresholds and are selected on a
business and organizational reforms tailor-made to those
once-a-year basis.
Business structure reform of low-growth
and low-profitability businesses
Determine once a year of target businesses and companies
that fall below boundary value for “sales growth” and “profit-
ability,” and conduct business structure and organizational
structure reforms
• Conduct business structure and organizational
structure reforms of low-growth and low-profitability
businesses
• Will consider options including reducing or
withdrawal from businesses with low market growth
potential or where it would be difficult to make the
most of Toray Group’s strengths in the future
Sales
growth
Boundary
value
Target of Business
structure and
organizational
structure reforms
Boundary value
Profitability
Toray Industries, Inc.
Integrated Annual Report 2020
28
Strengthening financial structure by
improving cash efficiency
Total of FY 2020 - FY 2022
• Improve the certainty of return on investment
• Introduce management-based free cash flows
CASH-IN
Cash flows from
620 billion yen
operating activities
or more
CASH-OUT
Cash flows from
investment activities
500 billion yen*
internally
• Reduce working capitals
• D/E ratio around 0.8
• Set goals for dividend payout ratio (about 30%)
Free Cash Flows
120 billion yen
or more
*exclude M&A
Business structure reform of low-growth
and low-profitability businesses
Determine once a year of target businesses and companies
that fall below boundary value for “sales growth” and “profit-
ability,” and conduct business structure and organizational
structure reforms
• Conduct business structure and organizational
structure reforms of low-growth and low-profitability
businesses
• Will consider options including reducing or
withdrawal from businesses with low market growth
potential or where it would be difficult to make the
most of Toray Group’s strengths in the future
Sales
growth
Boundary
value
Target of Business
structure and
organizational
structure reforms
Boundary value
Profitability
Factoring in assumptions that the spread of COVID-19
operating income of ¥80 billion, and profit attributable to
will repeat the cycle of slowing down and re-spreading
owners of parent of ¥34 billion. Our consolidated earn-
but eventually subside, and the economy in Japan and
ings forecasts have been calculated based on IFRS, as
overseas would follow a gradual recovery trend, Toray
Toray Group voluntarily adopted IFRS from the Japanese
Group targets fiscal 2020 revenue of ¥1.86 trillion, core
GAAP from fiscal 2020.
Consolidated Business Forecast for FY 2020
(Billion yen)
Consolidated Business Forecast by Segment
(Billion yen)
Adoption of IFRS
Disclosure of Core Operating Income
As Toray Group seeks to further expand and advance its global business, we have decided to
voluntarily adopt IFRS from fiscal 2020, from the Japanese GAAP, in order to improve the interna-
tional comparability of our financial information, which we believe should contribute to enhanced
convenience to our stakeholders. We also expect it to improve the management of our business
by unifying accounting standards across the Group. The disclosure of ordinary business revenue
and profit will be made by core operating income, as a measure of management performance,
and the numerical targets for “AP-G 2022” is disclosed for this indicator. Core operating income is
derived by adding non-operating income
and expenses excluding net financial
expenses and costs, and a portion of spe-
cial credits and charges, to the operating
income under Japanese GAAP.
All the account items in the non-op-
erating
income and expenses under
Japanese GAAP, such as costs related
to idle facilities and start-up of new facili-
ties, will be included in the core operating
income under IFRS. However, net finan-
cial expenses and foreign exchange gain
or loss will be excluded. By adopting core
operating income, the regular conditions
of production facilities and the situation
of operations will be reflected in the gain
and loss without omission.
Ordinary business revenue and profit will be disclosed as “core operating
income” as a measure of management performance
Profit and Loss Statement under
Japanese GAAP
Net sales
Cost of sales
Gross profit
Selling, general, admin. expenses
Operating income
Finance income
Equity in earnings of affiliates
Non-operating income and expenses
Ordinary income
Special credits and charges
Income before income taxes
Income tax
Net income
Net income attributable to owners
of parent
Net income attributable to
non-controlling interests
Profit and Loss Statement after
IFRS adoption
Revenue
Cost of sales
Gross profit
Selling, general, admin. expenses
Other income / expenses
Core operating income
Special Items
Operating income
Finance income/costs
Equity in earnings of affiliates
Income before income taxes
Income tax expenses
Profit
Profit attributable to owners
of parent
Profit attributable to non-controlling
interests
Non-operating income and expenses (including costs related to idle facilities,
costs related to start-up of new facilities) and part of special credits and
charges are included in the Japanese GAAP operating income
Toray Industries, Inc.
Integrated Annual Report 2020
29
FY 2020YoYRevenue1,860.0-11.1%Core Operating Income80.0-36.3%Profit Attributable to Owners of Parent34.0-59.6%Revenue (YoY)Core Operating Income (YoY)Fibers & Textiles705.0(-126.0)36.0(-23.6)Performance Chemicals695.0(-66.2)59.0(+4.5)Carbon Fiber Composite Materials190.0(-46.9)7.0(-29.6)Environment & Engineering202.0(+11.2)14.0(+3.4)Life Science53.0(-0.0)1.0(+0.5)Others15.0(-3.2)2.0(-1.6)Adjustments25.0(+0.8)Total1,860.0(-231.2)80.0(-45.5)Fiscal 2020 Earnings Forecasts Human resources strategy
Interview with Senior Vice President, Human Resources Division
Toray will promote individuals who are
adept at adapting to change as well as future
management candidates and professionals
with the capability to lead on the frontlines.
Senior Vice President, Human Resources Division
Shigeki Taniguchi
Interviewer
Manager, IR Department
Fujino Hirai
Toray Industries, Inc.
Toray Industries, Inc.
Integrated Annual Report 2020
Integrated Annual Report 2020
30
30
Toray’s history begins with respect for
harmony among people
What is behind Toray’s idea of “people-centric
management?”
The idea of “people-centric management” often spoken of
specialized knowledge and technological expertise, who
continually foster their creativity, and who can solve prob-
lems by facing the situation directly and working with the
spirit of self-improvement. The third is to develop lead-
ers with foresight, leadership, and a sense of balance.”
This philosophy encapsulates Toray’s thinking on human
by Toray President Akihiro Nikkaku has been passed down
resources.
since the Company’s founding in 1926. The corporate
This shows how the idea of “people-centric manage-
symbol created immediately after the Company’s found-
ment” has been passed down through the history of the
ing shows three interlocking rings, symbolizing the oppor-
Company. President Nikkaku often visits various job sites
tunities given by heaven, the advantages of the land, and
and speaks directly with the employees. I think he does
the harmony amongst human beings. This is derived from
this to see with his own eyes whether the employees
the Book of Mencius in which the harmony of the earth is
are growing.
more important than heaven-sent opportunities, and the
harmony amongst human beings is more important than
the earth. Essentially, this
means that when attempt-
ing something, there is no
achievement if there is no
harmony amongst human
beings. And this philoso-
phy is the starting point of
Toray’s history.
First company emblem (1926-1963)
We need individuals who are adept at
adapting to change
What are the key challenges in Toray’s human
resources strategy?
Toray is focused on actively expanding its business in
the global market and further accelerating the creation of
new businesses. Amid such an environment, there are a
growing number of voices saying that they want a person
After that, Asahiko Karashima, the first general man-
with particular kind of skill, or that a transfer of a certain
ager of the Shiga Plant, set a principle that the plant should
individual may cause potential problems, as the succes-
be a place for the cultivation of the human character.
sor or successors have not been trained yet. This points
He noted that companies should not only manufacture
to the securing and training of human resources as a key
products, but also help develop human resources. After
point to support this expected growth. The Company has
becoming the Chairman of the Board, he also believed
also formulated its “Toray Group Sustainability Vision”
that people represented an asset that could not be posted
for 2050. While it may seem a long time ahead, it is the
on the balance sheet. 30 years later, the Chairman of
generation of current new employees that will be driving
the Board Shigeki Tashiro often stated that the develop-
this Company by that time. As such, proper training needs
ment of human resources was the most important thing
to be given to these future leaders. Given these circum-
a company could do, and that it could not be done in a
stances, “AP-G 2022” focuses on the development of
short period of time. In fact, he believed it was one of
future management candidates and professional human
the most important long-term goals a company could
resources with strong capabilities to lead on the frontlines.
have. Following this philosophy, the Company formulated
educational and training standards and established a voca-
tional school for on-site training.
The Company established the Toray Human Resources
Development Center in 1996, with President Katsunosuke
What are the key points involved in the
development of core staff and professional
human resources?
A long-term vision is something that does not change
Maeda at the time stating that “People are what determine
easily. Though, it is important to note that the busi-
whether a business succeeds or fails, and it is people who
ness environment itself and the way we work are both
pave the way to a company’s future. The development
changing rapidly. When I joined the Company in 1983,
of human resources at Toray therefore serves three pur-
reports were handwritten and I was warned that those
poses. First, it is to develop personnel who are trusted
with sloppy writing could not do the job. Now, of course,
by society at large not only as contributing members but
PCs are used, with the speed of change completely dif-
also business people who conduct their activities with fair-
ferent than when I was younger. So, rather than focus-
ness, a strong level of ethics, and a deep sense of respon-
ing only on what a person can do right now, we need
sibility. The second is to develop personnel who are aware
to concentrate on training individuals who, when thrust
of the roles they are expected to play, both inside and out-
into an entirely new situation, can think for themselves,
side the Company, who strive to acquire a high level of
seek solutions through trial-and-error, and pave the way
Toray Industries, Inc.
Integrated Annual Report 2020
31
forward. If we cannot find and foster workers like these
particular, it seems the turnover rate for employees in
who are adept at adapting to change, I believe Toray as
their prime between the ages of 28 and 32 is moving
we know it may not exist in 30 years. I think this is the
higher. The reason for this, I imagine, is because this is
most important thing, in terms of both core staff and
an age group in which many experience a major life event
professional human resources. I think people can gain
and change their thinking in regard to their lives and work.
such abilities through various failures. With this in mind,
That being said, those who have got over this point rather
I believe it important that younger people have these
devote themselves to their work. With this in mind, I
kinds of experiences as early as possible.
think it is important to follow up with employees about
Introducing a new career sheet
Exactly what kind of measures are you
considering?
One of the centerpiece features of “AP-G 2022” is the
five years after they joined the Company and to pro-
vide them with support from their managers and senior
coworkers. One of the most common reasons for people
leaving the Company and those joining us mid-career, is
the inability to actively develop their own careers. This
makes it especially important to use the career sheet. I
introduction of a new career sheet. It clarifies what
also believe it necessary to focus not only on providing
should be achieved three, five, nine, and 15 years
opportunities for taking on new challenges through inter-
after hiring, before becoming managers or profession-
nal recruitment and the self-certification system, and also
als, so that employees achieve the professional level
creating an atmosphere in which workers are encouraged
at each stage. But it is not for the Company to control
to try new things without fear of failure.
the employees unilaterally. The goal is to create the
Company’s system in which each of the employees
plans a career they wish to pursue by themselves and
consider what to do for realizing it. In this process, their
managers are also required to consider it with them as
What are your thoughts in regard to the
Company’s overseas human resources
strategies?
When establishing subsidiaries overseas, Japanese staff
their own issue. I believe that when the milestones for
are at first stationed at the location to train the local
an individual’s future become clear, it becomes easier for
employees. These employees are then gradually given
them to fall into the habit of thinking for themselves and
positions before the Company ultimately delegates to
solving problems on their own. We plan to create a new
them local authority. As a result, the core staff at the
career sheet for each job type at Toray and increase the
overseas subsidiaries are able to build an in-house
adoption rate from 20% in fiscal 2020 to 30% in fiscal
career, contributing to relatively high retention rates at
2021 and 100% in fiscal 2022.
Those ready to take on new challenges
can build a career at Toray
How can Toray best retain those we have
trained?
While I think the turnover rate at Toray is actually low
these locations. Meanwhile, we also provide regular
training for executives and managers in order to facilitate
at the worksite the management style that is unique to
Toray. The Company aims to expand its business on a
global basis, making it important for us to have a sys-
temic process in place for hiring the most talented core
staff as the national staff. With this in mind, we are work-
ing to create T-CAS*, which can centrally manage the
compared to other companies, it appears to have been
core staff at Toray Group locations around the world. We
following a general upward trend since about 2015. In
aim to complete the construction of this system within
the period covered by “AP-G 2022.”
* T-CAS: Toray Career Development Assistance System
Improving productivity through flexible
workstyles
How is Toray promoting workstyle reforms?
Laws and regulations related to workstyle reforms in
Japan have been steadily implemented since April 2019.
These laws allow a variety of different workstyles based
on the individual circumstances of the worker. In addition
Toray Industries, Inc.
Integrated Annual Report 2020
32
to the introduction of flexible working arrangements,
including telecommuting, these reforms include regu-
lations limiting the amount of overtime work and mea-
sures designed to improve the working environment so
that women can play an active role, promote the accep-
tance of overseas workers, employ senior workers, and
assist workers in balancing their work with their child-
care/nursing care responsibilities. These are areas in
which the kindness of a company is tested, and where
the sense of fulfillment on the part of the employees can
be increased, thus contributing to the retention of the
most talented employees and bolstering the strength of
the Company. With this in mind, Toray has established
is still under 10%, it is steadily rising. It appears clear that
numerical targets in this area and strengthened its
there is a growing number of women in the core staff
efforts to achieve them.
pool and we accordingly expect to see female officers
While not planned at all, telecommuting has become
arising from within the Company, which I also believe
increasingly common due to the COVID-19 pandemic.
will be of great encouragement to our hard working and
Many things can be accomplished by working from a
active female employees.
remote location than we initially thought, and it is a good
chance to review the working system itself and make
changes in people’s working styles. While some individ-
uals may experience inconveniences, I expect improve-
What are your thoughts on the strategy for human
resources from an SDGs perspective?
In order to realize Toray’s “Sustainability Vision” through
ments will come eventually, and these kinds of different
the Green Innovation Business and the Life Innovation
working styles to become increasingly common as we
Business, we will need to foster the development of
move forward. On the other hand, Toray is still a com-
core staff and professional human resources that are
pany, so it does no good to think about improving the
adept at adapting to change. I believe the wholehearted
work environment and exploring flexible working styles if
efforts of each employee are vital to achieving the
profitability cannot be improved. With this in mind, “AP-G
SDGs. I also believe that in addition to using the power
2022” includes the Total Cost Reduction (NTC) Project.
of materials to resolve global issues, we can show
The flip side to these efforts is that if the Company fails
the necessity of our existence by playing an import-
to work to improve productivity, it will almost certainly
ant role in the world including the creation of employ-
fall short of profitability, which makes it vital to create a
ment opportunities, as well as the payment dividends
robust operating structure that includes not only work-
to shareholders, and the payment of taxes. I think it is
style reforms, but enhanced employee management.
worth noting that several Toray employees use their
Diversity cannot be realized by simply
setting a numerical target
Please tell us your thoughts on diversity.
Diversity is one of the major focus points in the laws
related to workstyle reforms. Of these, we have been
quick in the hiring of senior workers. In fields where
experience can make all the difference, many workers
are over the age of 65, and while there is a mandatory
retirement age of 60, we have been able to re-hire all
vacation time to participate in volunteer activities in the
community, which lead to the discovery of new social
issues and the creation of new networks. I cannot help
but wonder if the Company can further support these
kinds of activities by our individual employees.
Fostering human resources that can
pave the way ahead
As a final note, can you tell me a bit about your
aspirations?
Toray since its founding, has been focused on “peo-
applicants over the age of 60. On the other hand, we
ple-centric management.” In line with this concept, I
have taken a cautious stance on setting numerical tar-
would like to see an increase in the number of employ-
gets for the ratio of women in management and exec-
ees who are adept in adapting to change and who can
utive positions. If we did so, the focus would be on
think and act on their own in not only their own work,
meeting numerical targets and not on the original pur-
but also in regard to creating goals for the Company and
pose. While the ratio of women in managerial positions
themselves as they pave the way forward for Toray.
Toray Industries, Inc.
Integrated Annual Report 2020
33
R&D provide the key to building
the Toray of tomorrow
Over more than 90 years of its history, Toray has created
advanced materials and technologies based on the firm
An Undivided R&D Organization
conviction that “R&D provide the key to building the Toray
Toray has centralized all of its R&D functions into the
of tomorrow,” and has expanded business through strate-
Technology Center. Bringing together specialists from
gic collaborations and M&As that maintain synergy with
many fields in this undivided R&D organization makes it
these materials and technologies. In order to provide true
easier to create new innovations by integrating technolo-
solutions to the many societal and economic challenges
gies, and enables the Company to fully utilize its combined
of our times, including global environmental issues, there
strength by actively exploiting technologies and knowl-
is no other way than the pursuit of technology innovation.
edge from many fields to solve problems in a single busi-
Furthermore, without material innovation, there can never
ness area. It also enables various advanced materials and
be final products that are attractive to the market. Looking
technologies, including those developed for other fields, to
back over the past, history proves it is advanced materials
be rapidly applied to multiple businesses. The reason the
that have created next-generation industries. The Group
Group is capable of covering such a wide range of business
will therefore continue to generate innovations that offer
fields with limited R&D investments is because it focuses
social and economic value through R&D based on a grand
the target of these investments on advanced materials
vision of the times and the needs of society.
and technologies at the same time it fully leverages this
undivided R&D organization.
An Undivided R&D Organization
Technology Center
Sales Divisions/
Technical Department
Manufacturing Division/
Technical Department
Development Center
New Projects
Development Division
Engineering Division
R&D Division
Advanced materials
and technologies
(Basic chemicals)
Innovative polymer
NANOALLOY®
Nano-structure
design control
Separation membrane
Fine particles
etc.
Core technologies
Organic synthetic
chemistry
Polymer chemistry
Biotechnology
Nanotechnology
Business network
Fibers & Textiles Division
Resins & Chemicals
Division
Films Division
Torayca & Advanced
Composites Division
Electronic & Information
Materials Division
Pharmaceuticals &
Medical Products Division
Water Treatment &
Environment Division
Affiliated Companies
Division
P
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o
d
u
c
t
i
o
n
p
r
o
c
e
s
s
i
n
n
o
v
a
t
i
o
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I
n
n
o
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a
t
i
o
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e
e
n
I
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a
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i
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Establishing the R&D Innovation Center for the Future with an Eye on the Next 100 Years
As part of Toray’s project to commemorate the 90th anniversary of its founding, in December 2019 it refurbished the
former Central Research Laboratories building in Otsu City, Shiga, where the company was founded, and established
the R&D Innovation Center for the Future as a base to further deepen and progress materials research, and to provide
solutions to future societies. As a nexus of research for the future, the center
comprises two sites: 1) Integrated Research Site, which has the function of idea
creation as the core of R&D for the future, and 2) Experimental Research Site,
which promotes development, evaluation, and demonstration of prototypes
based on those ideas. In addition, the center pursues strategic open innova-
tion through technological integration with academia and important partners
in diverse fields, utilizing its innovation hub functions, such as an open lab.
Toray Industries, Inc.
Integrated Annual Report 2020
34
Technology Center
Sales Divisions/
Technical Department
Manufacturing Division/
Technical Department
Development Center
New Projects
Development Division
Engineering Division
R&D Division
Advanced materials
and technologies
(Basic chemicals)
Innovative polymer
NANOALLOY®
Nano-structure
design control
Separation membrane
Fine particles
etc.
Core technologies
Organic synthetic
chemistry
Polymer chemistry
Biotechnology
Nanotechnology
Business network
Fibers & Textiles Division
Resins & Chemicals
Division
Films Division
Torayca & Advanced
Composites Division
Electronic & Information
Materials Division
Pharmaceuticals &
Medical Products Division
Water Treatment &
Environment Division
Affiliated Companies
Division
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Toray Industries, Inc.
Integrated Annual Report 2020
35
R & D S T R A T E G Y
and ACTIVITIES FOR LIFE INNOVATION
R&D STRATEGY
An Undivided R&D Organization:
The Technology Center
to be Super Nanotechnologies that have achieved
improvements in the discontinuous characteristics of
materials. These will first be deployed to core growth
driving businesses to expand nanotechnology into a
¥50 billion business by fiscal 2025. At the same time,
Toray Group has centralized all of its R&D functions into
these Super Nanotechnologies will also be deployed to
the Technology Center. Bringing together specialists
new Green Innovation and Life Innovation businesses.
from many fields in this undivided R&D organization
makes it easier to create new innovations by integrat-
ing technologies, and enables the Group to fully utilize
its combined strength by actively exploiting techniques
and knowledge from many fields to solve problems in a
single business area. It also enables various advanced
LIFE INNOVATION
Expanding the Life Innovation
Business with Advanced Materials
materials and technologies, including those developed
This section introduces the initiatives aiming the expan-
for other fields, to be rapidly applied to multiple busi-
sion of Life Innovation (LI) business, which contributes
nesses. In addition to technology fusion and combined
to enhancement of medical care, health and longevity,
strength, this approach also inherits the Group’s DNA
diffusion and promotion of public health, and personal
of pursuit of the ultimate limits and long-term continu-
safety, with a target of increasing revenue six-fold by
ity. This DNA enables the Technology Center to take
fiscal 2030 compared with fiscal 2013. Under “AP-G
a long-term perspective in managing R&D invest-
2022,” we will advance business expansion with the
ments so that there is never a shortage of themes
goal of reaching ¥300 billion in revenue. Of the business,
for today and seeds for tomorrow and beyond. As
we position the pharmaceuticals and medical devices
part of “AP-G 2022,” the Group has established
businesses as in a period of incubation for the future,
priority areas and major initiatives to maximize the
and we will take following actions for the future growth.
return on R&D investments under the direction of the
In the short-term, the pharmaceutical business
Technology Center as an undivided R&D organization.
Super Nanotechnology
As a core technology of Toray Group, nanotechnol-
aims sales expansion of the oral antipruritic drug
REMITCH®* overseas to grow earnings. Meanwhile,
the medical devices business will launch continuously
original products such as HotBalloon to the market,
ogy exemplifies the pursuit of the ultimate limits.
expand domestic and global sales of highly valued (or
Among the various types, Toray Group considers its
proprietary, original technologies of NANODESIGN®,
NANOALLOY®, and Nano-layered Films (PICASUS™)
functionalized) dialyzers, launch and promote sales of
new product of dialysis machines, and enforce devel-
opment of respiratory disease treatment columns. As
From Nanotechnology to Super Nanotechnology
Fiber
NANODESIGN®
Thinner
Discontinuous
Characteristic Improvement
Social problem
solving
Resin
NANOALLOY®
Finer
Film
PICASUSTM
Thinner
Green
Innovation
(GR)
Life
Innovation
(LI)
Approx.50Billion yen
as Revenue Target
in FY 2025
Toray Industries, Inc.
Integrated Annual Report 2020
36
to TORAYMYXIN™, which is used to treat patients
the cause and status of disease by simultaneously
with severe sepsis, its clinical study for the treatment
investigating the expression of multiple genes. Toray
of sepsis is conducted by our partner in North America.
Group launched its research into DNA chips in 2000
The U.S. Food and Drug Administration (FDA) approved
and developed DNA chips using a resin substrate
inclusion of the patients with lung disorders associ-
with a unique structure in 2005. This development
ated with COVID-19 into this study, and Health Canada
successfully increased the gene detection sensitiv-
approved its temporary use for treatment.
ity 100-fold compared with conventional DNA chips.
In addition, we focus on the development of
In 2007, it was later discovered that cancers release
TRK-950 cancer immunotherapy and aim to com-
RNA fragments called microRNA into the blood at
mercialize and expand the DNA chip business.
extremely low concentrations, yet still have markers
As applications of advanced materials to the health-
that correspond to specific types of cancers. Toray
care field, we aim sales expansion of hygiene products
Group’s DNA chips are the only technology that can
including masks, functional textiles like hitoe™, and per-
detect these fragments in high sensitivity, so were
sonal protective clothing LIVMOA™ including infection
adopted for a national project. We aim for the earli-
control clothing. Wearable monitoring systems utilizing
est possible commercial launch because there is no
hitoe™ enables electrocardiogram (ECG) measurements
question society requires a means of early cancer
with high accuracy, and it facilitates an early detection of
detection.
arrhythmia through the long-term use and continuous
measurements. Data acquisition by hitoe™ with long-
term use was completed in a clinical research “Long-
term ECG measurement to detect atrial fibrillation” at
Development of TRK-950 Cancer
Immunotherapeutic
University of Tsukuba. LIVMOA™ protective clothing
Toray Group’s TRK-950 cancer immunotherapeutic
balances safety, durability, and comfort together at high
is expected to emerge as a first-in-class antibody
level to protect medical professionals and essential
drug. We anticipate that this will be useful against
workers from occupational risks. In 2017, Toray Group
many types of cancers. TRK-950 has already been
donated 10,000 units of personal protective clothing to
shown to be effective against tumors in animal
the Guinea Government as an Ebola countermeasure.
models. In March 2017, we commenced Phase I
We are currently addressing growth in demand for use
clinical trials in the U.S.A. and France, which have
as a COVID-19 countermeasure.
*REMITCH® is a registered trademark of Torii Pharmaceutical Co., Ltd.
Aiming for Early Cancer Detection
with DNA Chips
reported that, at the present time, there are no
issues with safety. However, these are not the
final results. In April 2019, we expanded the num-
ber of clinical trial facilities currently studying the
safety and efficacy of the drug in aims of applying
for approval as a cancer treatment at the earliest
DNA chips are a type of biotool that can predict
possible time.
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Toray Industries, Inc.
Integrated Annual Report 2020
37
From Nanotechnology to Super Nanotechnology
Fiber
NANODESIGN®
Thinner
Discontinuous
Characteristic Improvement
NANOALLOY®
Resin
Finer
Film
PICASUSTM
Thinner
Social problem
solving
Approx.50Billion yen
as Revenue Target
in FY 2025
Green
Innovation
(GR)
Innovation
Life
(LI)
DAY One:
10:30-11:10
Nobuyuki Inohara
Vice President, General Manager,
Resins & Chemicals Divisionn
Toray Industries, Inc.
Integrated Annual Report 2020
38
Resins BusinessFurther Strengthening the Compounding BusinessThe resins business has commercialized amorphous res-in such as ABS, and crystalline resin, such as nylon, PBT, PPS, liquid crystal polyester (LCP), and TI polymer, and al-so sells TORAYCA® resin, a resin made by blending these resins and polymers with carbon fiber. Nylon and PBT are used in many automotive parts, while PPS, which is high added-value and highly heat-resistant, is made into prod-ucts that can replace metal parts. The resins business operates 19 bases in 10 countries around the world, and primarily engages in the compounding business in Asian countries. Since fiscal 2014, Toray has expanded produc-tion bases to Mexico, the Republic of Korea, and Hungary, and commenced compound production in India last year. The resins business policy during “AP-G 2022” continues to focus on further expanding these bases.xEV and 5G Applications are Growth MarketsThe production ratio of xEV (electric vehicles) is expected to reach 46% of total automobile produc-tion by 2025 (9% in 2020). PPS is used for xEV power control units, while nylon is used for hydrogen tank components. In addition, the evolution in advanced driver assistance systems (ADAS) is pushing greater sensor demand, which is in turn expected to increase demand for PBT. Moreover, the launch of 5G com-mercial services in Japan and other countries has led to anticipation for growth in low dielectric PBT with modest transmission loss and in highly heat-resistant PPS for 5G compliant smartphones and base stations. There is also an outlook for growth in demand for original LCP polymers developed by Toray for use in high-speed transmission flexible printed circuits (FPC).Value Chain of Resins BusinessWorktogether tobecomedevelopment partners tosolve social problemsToray’sbusinessdomainsCustomers’businessdomainsRaw materialPolymerizationsales ofbasepolymerCompoundingMolding, PartsAssembly Resins & Chemicals
Toray Industries, Inc.
Integrated Annual Report 2020
39
Maintaining the No. 1 Position in PPS and Expanding the High-performance ABS BusinessToray is the only integrated manufacturer of PPS mono-mers, polymers, and compounds in the world, and boasts the No.1 share of global PPS compound sales at 27%. PPS is expected to grow at 5% annually on the back of expanding demand from xEV, automotive electronic component, and light-weighting applications. During “AP-G 2022,” the Group will utilize its strengths of materials, integrated raw materials development capabilities, and a global network as a means of pro-posing total solutions that include design and processing methods, and of furthering business expansion. In addition, Toray maintains a 37% share of the global transparent ABS market. The global market for high-performance ABS, including transparent ABS, is forecasted to grow at 5% annually, so the Company is working to increase production capac-ity in Malaysia. Moreover, Toray is aiming for No.1 in high-performance ABS resins through the expansion of transparent ABS for medical use, ABS for automo-bile painting, and engineering plastic alloys.Promoting Chemical RecyclingAlong with using recycled materials, the resins business is also addressing a sustainable society by improving its recycling capabilities through the development of chem-ical recycling technologies that produce the same quality as the original products. Over the medium- to long-term, Toray will also consider developing biomass plastics, as well as biodegradable and marine-biodegradable resins.Chemicals BusinessExpansion Centered on the Main Raw Materials BusinessCentered on the main raw materials business, which handles the mainstay products of nylon and polyes-ter used in fibers, resins, and films, the chemicals business deploys businesses that can utilize technol-ogies in areas related to these products. These areas are broadly divided into three businesses. The basic chemicals business handles Caprolactam and tere-phthalic acid. The fine chemicals business handles pharmaceutical and agrochemical raw materials, fine particles, veterinary medicines, DMSO solvents and cleaning agents, and THIOKOL™ sealants. The aro-matic fine chemicals business handles products made by Soda Aromatic Co., Ltd., a joint-venture company with Mitsui & Co., Ltd., and those products are used in coffee, citrus drinks, and others.Focusing on 3D Printers, Agriculture, the Environment, and Veterinary MedicinesIn the growth business fields, Toray develops and commercializes PPS fine particles used in 3D printer modeling materials. With their superior powder prop-erties and uniform powder size distribution, PPS fine particles are expected to find use in automotive and aerospace applications. M-Dichlorobenzene, a raw material for agrochemicals, is made from a by-product of PPS resin raw material. Its manufacturing process has a comparative advantage in terms of cost, safety, and the environment, and is the reason Toray main-tains the No.1 global share. Moreover, the Company is working to create high-value for ammonium sul-fate, a by-product of lactam that is used as a nitrogen fertilizer, by modifying it into a form that is suited to mechanized agricultural spraying. In environment-related areas, Toray is focused on expanding THIOKOL™ sealants, which are used for high heat insulation multi-layered glass and con-tribute to energy-savings. In veterinary medicine, the Company is accelerating overseas deployment of the world’s first feline interferon and a feline renal function decline inhibitor.(FY)2019 Actual(IFRS)320.4410.0+28％2022 Target(IFRS)(Billion yen)(note) include transactionswithin the GroupChemicalsResins0100200300400500Revenue Targets in “AP-G 2022” Pursuit of Ultimate Performance in
High Value-added Products in Growth
Business Fields
stations with the spread of 5G, expansion of xEV
and automatic driving. We are also anticipating that
demand for DFR will increase due to the downsiz-
ing of circuit substrates and increases in fine-pitch
In the films business, we are advancing the expan-
in wiring circuits. A photoresist formed by a photo-
sion of business and increases in revenue and profit
sensitive resin in a film form, DFR is a material used
with polyester (PET) films and battery separator films
to form circuit boards for electronic components.
(BSF) as the two supporting pillars of the business, in
Strict quality is required of the PET film used for
conjunction with broadening polypropylene (OPP) film
DFR, such as high transparency that does not inhibit
sales by their use in capacitor and packaging material
light, reduced surface micro-scratches, and the con-
applications. Polyphenylene sulfide (PPS) films and
trol of foreign substances inside the film. We will
aramid films are one-of-a kind, high-performance film
proceed with product differentiation and maintain
products. We are also widely deploying a lineup that
a high market share by anticipating the increasing
includes processed film products, such as self-adhe-
sophistication of those quality requirements.
sive protective films and clear metallized films. Based
Toray’s proprietary nano-layering technology
on the “polymer, design, and polymerization tech-
enables about 1,000 layers in PICASUS™ film.
nologies,” “film design and control technologies,”
Stacking layers of different types enable this film to
and “film manufacturing process technologies” that
selectively reflect and transmit light of various wave-
underpin these products, we are pursuing properties,
lengths including ultraviolet, visible light and infrared
such as heat resistance, dimension stability, trans-
rays. We will promote PICASUS™ film in a wide
parency and surface smoothness demanded of film
range of fields, such as blue-light reduction, sensor
products, and cost reductions to the utmost limits.
cover applications, such as in-vehicle emblems, and
heat-reflecting window frame applications.
PET Film Focusing on MLCC and DFR
The PET film LUMIRROR™ is a core growth-driv-
ing business that boasts manufacturing and sales
Strengthening Production Facilities of
BSF in Europe for xEVs
bases at six hub locations around the world and a
Its strengths lying in a uniform fine pore structure
No. 1 share of the market. This film is used in a
based on polymer technology and an advanced film
wide range of applications, such as information and
structure based on film fundamental technology, our
telecommunications, general industries, and pack-
SETELA™ battery separator film (BSF) contributes
aging materials. Especially during the “AP-G 2022”
to the outstanding safety and high performance of
period, armed with high quality control expertise in
lithium-ion batteries. In addition, our unique technol-
addition to the surface forming technologies cul-
ogies in heat resistance and adhesive coatings have
tivated with magnetic tapes in the 1990s, we are
led to high safety, high reliability, and longer battery
promoting business expansion of high-functional
release PET films in fields where market growth
can be expected, for example in multilayer ceramic
capacitor (MLCC) release film and dry film photore-
sist (DFR) applications.
In addition to the increase in the number of
ceramic layers and the number of units installed due
to downsizing and higher capacity, further growth
in MLCC demand is expected in the years to come
against a backdrop of the increased functions of
Demand for Battery Separator Films
(billion m2/yr)
Consumer applications
Automotive applications
annual growth rate
over 20%
8.0
6.0
4.0
2.0
0
smartphones and the installation of additional base
(FY)
2018
2019
2022
F
i
Toray Industries, Inc.
Integrated Annual Report 2020
40
l
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Toray Group Production Capacity of
Battery Separator Films
Enhanced Addressing of Sustainability
Hungary
In the films business, we are working to establish a
(billion m2/yr)
1.0
0.5
0
increase
about 20%
increase
about 30%
recovery system for release films to enhance sus-
tainability. At the present time, removing the coat-
ing materials and resins from the release PET films
has difficulties, and thus mainly waste treatment
and thermal recycling are utilized. By establishing
a recovery system, however, we will advance the
construction of a circulation-type recycling system
by utilizing the films for other materials, such as
fibers, and encouraging their reuse as films.
End of 2018
End of 2019
End of 2022
life. Since the demand for BSF in automotive appli-
In the market for packaging materials, needs are
cations is growing due to the expansion of xEVs in
becoming more diversified and efforts to reduce
the European market, Toray plans to strengthen its
food waste are increasing across the world, and
production facilities in Hungary and start operations
thus the functions and quality required of packag-
in 2021. In addition to IoT devices, the range of con-
ing materials are becoming more sophisticated. By
sumer applications is also expanding to include sta-
combining our film products and film processing
tionary fuel cells and power tools.
technologies, we are providing optimal products for
all packaging applications and contributing to the
extended shelf lives of food products.
OPP Film: Strengthening Production
Facilities in Automotive Capacitors
Combining the contradictory characteristics of thin-
ness and the high voltage resistance, TORAYFAN™
polypropylene (OPP) film captured the top share
in the automotive capacitor film market. There are
strong needs for smaller and lighter power control
units (PCUs) that drive xEV motors and film capac-
itors, and by 2022 we will increase the production
capacity of films for automotive capacitors to 1.6
times the current scale. In addition, we will focus
on high-functional packaging materials, having intro-
duced the latest five-layer laminated, high-speed
film production facility in the U.S.A. to meet the
increasingly diverse and sophisticated customer
needs in the food packaging market.
Toray Industries, Inc.
Integrated Annual Report 2020
41
(FY)201620172018201920192022Target316.9380.0+20%(Billion yen)0100200300400IFRSJ-GAAPRevenue Targets in “AP-G 2022”
&
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Information Materials
Implementing “The One” Strategy
Leveraging these strengths, Toray will work to
Under “AP-G 2019,” we expanded businesses
maintain and expand its market share while focusing
accompanying growth in OLED and semicon-
on the development and launching of products that
ductor memory, electronic components for
significantly contribute to weight, size and cost reduc-
telecommunication, as well as greater use of
tions, including multilayer flexible substrates, multi-
flexible circuit substrates for large TVs. As for
layer micro coils, and high-density flexible substrates
printing applications, we have pivoted to growth
that concentrate multiple functions into one package.
markets like label and packaging printing, in light
of digitalization decreasing the use of general
printing materials. Under “AP-G 2022,” we will
implement “The One” Strategy, which consists
of “First One:” early adoption of our products
through rapid development using our wide
Display Field: Develop Wide-ranging
Applications for Advanced Materials
in the OLED Display Field
range of advanced technologies and by identifying
In the display field, Toray aims to increase sales of
future customer needs based on our strong relation-
OLED display materials, for which demand is grow-
ship of trust with them; “Only One:” the creation of
ing given the higher ratio of OLED displays used in
high barrier-to-entry (intellectual property networks,
smartphones and TVs. Toray’s photosensitive poly-
high quality, stable supply, cost competitiveness,
imide (featuring high reliability, pattern shape control,
customer support); and “Number One:” the achieve-
and high sensitivity) has become the industry stan-
ment of industry standardization by leveraging our
dard as an RGB insulation and planarization material.
track record and expertise worldwide.
In addition, Toray is working to expand busi-
Semiconductor & Electronic Component
Field: Timely Launching New Products
into Growth Business Fields
5G and IoT are now poised for rapid growth in the
semiconductor and electronic component fields.
nesses for organic light-emitting materials, flexible
board materials, and conductive paste while devel-
oping a wide array of applications for advanced
materials in the OLED display field.
Advanced Materials for Improved OLED Displays
Insulation Layer and
Planarization Layer Materials
Organic Light-Emitting
Material
High-frequency devices used in these areas require
Photosensitive polyimide
• High electron mobility
low dielectric constant materials. In response,
we will aggressively expand our businesses using
our advanced polymer design technologies and
world-leading materials development capabilities.
STEMCO is a joint venture with the Samsung
Group boasting advanced technologies and cost
competitiveness that produces and sells flexible cir-
cuit board (chip on film). In addition, Toray Group is
a leading maker of base films like Kapton® and sput-
tered/copper-plated Flexible Copper Clad Laminate
(FCCL), and we have established a supply chain
completely within the Group that includes a chip on
film IC-mounting company.
De facto standard
• High reliability
• Pattern shape control
• High sensitivity
• High efficiency
Touch sensor panel
TFT board
Flexible Board Material
Conductive Paste
Non-photosensitive Polyimide
“RAYBRIDTM”
• Ultra-high heat resistance
• Fine-pattern wiring
• Transparency
• Low resistance
Toray Industries, Inc.
Integrated Annual Report 2020
42
Printing Field: Making Printing
Systems with Zero Environmental
Impact the Global Standard
For printing applications, VOCs (volatile organic com-
pounds) and organic solvent waste liquid have been
highlighted as environmental issues. In response,
our Waterless Plate significantly reduces VOC emis-
sions compared to conventional printing methods. In
addition, we are working to realize a shift to printing
systems with low environmental impact by develop-
ing mainly water-soluble ink and aqueous cleaning
solutions that enable completely VOC-free printing
systems. We will steadily work to make printing sys-
tems with zero environmental impact as the global
standard by earnestly marketing them to end-use
customers and rapidly spreading their use based on
printing company specifications.
Accelerate Expansion into the Life
Innovation Growth Field
Toray will also focus on X-ray scintillator panels as a
new growth field centered on Life Innovation. These
panels use sensors to generate images by con-
verting irradiated X-rays into visible light. However,
conventional methods cause light dispersion at con-
version layers, therefore impeding the generation of
clear images. We have significantly improved image
definition by using our proprietary pixelated scintilla-
tor to solve this problem. This will greatly contribute
to the early detection of diseases such as breast
cancer. In addition, we will aggressively promote var-
ious materials such as plastic optical fibers that fea-
ture high light transmission efficiency and are used
for endoscope light guides, as well as materials for
displays, sensors, and circuits that must be compact
and lightweight for wearable devices.
DAY One:
12:20-13:00
Hiroshi Enomoto
Vice President, General Manager,
Electronic & Information Materials Division
Toray Industries, Inc.
Integrated Annual Report 2020
43
(FY)20172018201920192022Target67.4100.0+48%(Billion yen)040608010020IFRSJ-GAAPOthersPrintingDisplaySemiconductor &Electronic ComponentsRevenue Targets in “AP-G 2022” DAY two:
9:30-10:20
Mitsuo Ohya
Senior Vice President,
General Manager, Fibers & Textiles Division
Toray Industries, Inc.
Integrated Annual Report 2020
44
Fibers & Textiles Still a Growth IndustryDemand for fibers and textiles is expected to grow at a rate of 3% per year as the population grows, people’s quality of life improves, and the consumption of mid-dle-income demographic groups mainly in emerging countries increases. Fibers and textiles, which evolved not only for clothing but also for various applications, including industrial, civil engineering, agriculture, and life sciences, are a growth industry globally. Toray antici-pates that the fibers and textiles industry will continue to grow, centering on polyester, at a rate that may outpace world population growth. Under these circumstances, the Company is ranked 15th in the world in terms of the production capacity of the three major synthetic fibers (nylon, polyester, and acrylic), but we estimate that we have the largest sales in the world in the synthetic fibers business which deploys textile business and integrated business from fiber and textiles to garments.Growth by Three-dimensional Business ModelToray Group’s fibers and textiles business features the world’s only three-dimensional business model that enables the provision of all kinds of solutions by freely combining its strengths which make three axes: (1) tech-nological development and variety of products; (2) vertical integration in the supply chain; and (3) global business network. Based on this unique business model, “global business expansion in growth fields and regions,” “business expansion by addressing sustainability” and “advancement of business model” are regarded as growth drivers under “AP-G 2022,” and the Company will enhance “global business expansion,” “materials development” and “value chain” at multiple levels. Specifically, we will strengthen the nonwoven fabric, non-woven material created using ultra-fine fibers in an "island in the sea" configuration, and the airbag businesses as well as the integrated business from fiber and textiles to garments in the apparel-use, and aim to achieve sustain-able growth through differentiation strategies. Focus on Nonwoven Fabrics, Nonwoven Material created using Ultra-fine Fibers in an “island in the sea” Configuration, and Airbags, etc.In a global nonwoven fabric market that is growing at an annual rate of 5%, we are promoting to develop differen-tiated products for key applications, including those for hygiene products, filters, and automobiles, with the aim of building “a unique business framework of nonwoven fabric, covering spunbond and staple nonwoven fabric.” In the hygiene product applications, we will strengthen Fibers & Textiles
Our Strength:
World’s only Three Dimensional Business Model
Global Business Network
North Africa
South Asia
Americas
Global Assets &
Global Operation
Europe
ASEAN
Korea
China
Japan
Nylon
Polyester
Acrylic
Technological
Development &
Variety of
Products
Industrial FY
Advanced Materials
PPS
PTEE
PLA
PTT
Nano
Nonwoven
Fibers
Textiles Garments
Wide Range of
Business Areas &
Human Network
Microfiber
SB
Material Variety &
Innovative Products
Toray Industries, Inc.
Integrated Annual Report 2020
45
innovative product development through tie-ups with customers and build a local production for local consump-tion supply system that responds to increasing demand in various parts of Asia. In filter applications, we will work to improve the performance of polyester nonwoven fabric as an environmentally friendly material for use such as industrial dust collectors. In automotive applications, we will develop nonwoven fabrics for sound-absorbing mate-rials, which contribute to noise reduction inside vehicles. In the case of nonwoven material created using ultra-fine fibers in an “island in the sea” configura-tion, we will continue to enhance brand value with Ultrasuede® and Alcantara® at the core of two brand strategies, targeting the high-end markets for a variety of applications, such as automobiles, fashion apparel, and interiors. We will also increase environmental value by developing plant-based material, for example. In airbags, given added impetus by more stringent installation regulations primarily in emerging countries and stronger collision safety regulations, we will proac-tively expand our business with a production and sales structure capable of providing airbag fabrics of same qual-ity from six locations around the world in a timely manner. As we acquired Alva, an airbag cushion manufacturing company, in fiscal 2019, we will also firmly capture the needs for more compact and complex sewn products and incorporate Alva’s cushioning knowledge into the base fabric design to enhance our proposal capabilities.Addressing SustainabilityBased on the Toray Group Sustainability Vision, we will expand environmentally friendly materials from the per-spectives of saving energy, new energy, plant-based, water treatment, air purification, low environmental impact, and recycling. In materials related to the med-ical and healthcare fields—based on the Sustainability Vision as well, from the three perspectives of improv-ing the quality of medical care, health maintenance and longevity, and personal safety—we aim to expand our business by addressing sustainability with hitoe™, the performance fabric that monitors workers and defend from heat, HugFit™ for breast cancer patients, and LIVMOA™ single-use protective clothing.Strengthening the Integrated Business in the Apparel-useWith regard to the advancement of the business model, an important issue is to strengthen the “integrated business from fiber and textiles to garments” that enable us to continue to deepen our integrated supply chain for fibers and textiles based on applications and end customer needs, and we will continue to deepen our integrated supply chain in the Chinese market. In ASEAN countries, we will work to extend and upgrade the supply chain by making use of converting busi-nesses in Vietnam, in addition to Indonesia, Malaysia, and Thailand. In South Asia, we will build a supply chain in anticipation of growth in the Indian market.(FY)20172016201520142013201220112018201920192022TargetImage Around2030831.059.676.01,030.0(Billion yen)06009001,2001,500300(Billion yen)0609012015030IFRSJ-GAAPRevenue Targets in “AP-G 2022”Net Sales/Revenue (left)Operating Income/Core Operating Income (right)“AP-G 2013”“AP-G 2016”“AP-G 2019”“AP-G 2022”Long-term Corporate Vision “AP-Growth TORAY 2020”“TORAY VISION 2030”VerticalIntegrationin Supply Chain C a r b o n F i b e r
Composite Materials
Expectations for New Business
Opportunities
air taxis, large drones, and other “flying cars.” At the
same time, North America is projected to lead growth
in demand for rockets and satellites. Despite the mat-
Although the coronavirus pandemic has become
uration in demand for golf clubs and fishing rods seen
a major factor of volatility in the demand for carbon
in developed countries, bicycles are expected to drive
fiber composite materials, the revolution in mobility,
growth in sports applications. Industrial applications are
expansion of new energy, and environmental needs
projected to see expanded use of carbon fibers as a
allow Toray Group to anticipate new business oppor-
result of larger wind turbine blades, which decrease
tunities. Likewise, the Group projects a return to a path
power generation costs, as well as see compressed
for growth around 2022 and expansion through 2030
hydrogen gas (CHG) tanks and carbon fiber electrode
at a CAGR of around 8%. In parallel with the rise in
substrates grow into major applications with the spread
demand for high-performance aircraft, aerospace appli-
of fuel cell vehicles (FCVs).
cations are expected to see new demand emerge for
Carbon fiber demand outlook
Overall
Overall demand is expected to grow at a CAGR of 8% until 2030
Aerospace
In addition to commercial aircrafts, demand will be created by
the new market for “Flying Cars,” such as air taxis and large
drones, and demand for rockets, satellites, etc. will grow mainly
in North America
Sports
Bicycle will lead the growth while golf shafts and fishing rod
applications will mature in developed countries
Industrial
In addition to increased adoption of carbon fibers for wind tur-
bine blade applications due to its size increase, hydrogen tanks
and FC substrates will grow into major applications with the
spread of FCVs
(K tons)
200
Industrial
Sports
Aerospace
(Toray’s
Estimate)
CAGR
(’19-’30)
183
8%
130
106
79
69
63
150
100
50
0
(FY)
‘17 ‘18 ‘19
‘22
‘25
‘30
Toray Industries, Inc.
Integrated Annual Report 2020
46
Providing the Best Cost Performance
Toray Group possess a business structure capable of
proposing and supplying regular tow carbon fibers with
the world’s highest performance and large tow carbon
fibers with dominating cost competitiveness. Likewise,
the Group maintains the top global market shares* of
regular tow at 48% and large tow at 51%, making up
49% share of the entire market. In addition to our rich
experience in thermosetting matrix resins, the Group
also has the technical development capabilities to
design and propose next-generation thermoplastic
resins with superior formability. Moreover, the Group
has built strong ties of mutual trust with leading com-
panies around the world based on 50 years’ worth of
accumulated data and a global supply network.
Along with continuing to deliver easily moldable
structural materials that exhibit their performance
exactly as designed, the Group will propose high-per-
formance solutions that cannot be achieved with other
materials and competitor products. At the same time,
the Group will provide materials with the highest level
of cost performance by improving productivity through
digital transformation (DX), developing new processes
9%
that realize higher added-value at a cost equal to or
3%
5%
below that of existing products, and developing
high-performance carbon fibers and new matrix res-
ins. Moreover, the Group will propose pricing methods
that reflect the economic value of carbon fibers with
aims of providing a stable cost that makes it easy for
customers to procure them over the long-term.
* Market shares are accurate as of fiscal 2018
Applying Excess Capacity Due to
the Impact of Reduced Boeing 787
Production Rates to other Applications
and Making thorough Cost Reductions
Capturing Business and Promoting a
de Facto Standard for CHG tanks and
Electrode Substrates
With mass production of FCVs expected to begin
During “AP-G 2022,” the impact of reduced Boeing
around 2021 and onward, Toray Group foresees
787 medium-sized passenger aircraft production rates
accelerating growth in demand for extra-high pres-
will be inevitable. In response, Toray Group will divert
sure tanks suited to hydrogen fuel refilling. Because
the resulting excess capacity to satellites and CHG tank
hydrogen is highly flammable and transparent, this a
applications in order to minimize new capital expendi-
growth business field where our products for pressure
tures. Meanwhile, the Group will go beyond structural
vessel applications with a nearly 20-year track record,
components to enhance materials development for
commanding share, and earned trust can exhibit their
seats and other interior parts. Initiatives for capturing
strengths. Moreover, our molded carbon fiber materials
new aircraft programs will remain an issue of top pri-
have also led the world for use in FCV electrode sub-
ority. The Group will also strengthen its approach to
strates. Electrode substrates require a high functionality
start-ups developing small aircrafts because we see
and reliability suitable for gas diffusion. Leveraging our
the growing need for further weight savings, particu-
strengths of 40 years of experience and the world’s
larly for single aisle aircrafts, as an opportunity.
largest supply capabilities, the Group will continue to
Moreover, the Group will promote further cost com-
promote joint developments in this area with leading
petitive enhancements through radical cost reductions.
automotive manufacturers.
Accelerating Enhancements to Wind
Turbine Blade Production Facilities
Carbon fibers for wind turbine blades, anticipated as a
new growth driver, are projected to grow at a CAGR of
13% during “AP-G 2022.” The lengths of wind turbine
blades are being extended as the most effective way of
increasing wind power generation efficiency, so the adop-
tion of light weight, highly rigid carbon fiber reinforced
plastic (CFRP) blades is accelerating. Given its strengths
of cost competitiveness and high-quality, Toray Group’s
Zoltek holds an approximately 60% global share of the
large tow carbon fiber market for wind turbine blade appli-
cations. The Group aims to further expand this business
by actively participating in the Chinese market and the
growing number of new offshore wind turbine programs.
D
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Toray Industries, Inc.
Integrated Annual Report 2020
47
Revenue Targets in “AP-G 2022”236.9275.022.624.09.5%8.7%Decreasein aircraftdemandGrowthexpansionStrengtheningcostcompetitivenessOthers(Billion yen)• 787 production rate reduction• Termination of A380 production• Expansion of growth drivers• Variable cost reduction• Fixed cost reductionExchange rate: 105 JPY/USD (FY2022)(FY)2019Actual(IFRS)CoreOperatingIncomeRevenue2022Target(IFRS)Aim for 24 billion yen in revenue in FY2022 by covering the decrease in demand for commercial aircraft through expanding the growth driver businesses, strengthening cost competitiveness and increasing sales for other applications, etc.
Becoming an Excellent Company in the
Water Treatment Business
Increasing RO Membrane Production
Capacity by 1.6 Times
Because it is becoming more difficult to secure the
Led by China and the Middle East, RO membrane
required quantities and quality of water by natural
market growth is projected to achieve a CAGR of
purification due in part to rapid population growth,
approximately 7% in response to global water short-
water treatment technologies have become essen-
ages and growing concerns over the environment.
tial in the 21st century. Water treatment mem-
In China, Toray Group is seeing more wastewater
branes contain tiny pores and are categorized as RO
treatment projects as a result of increasingly strict
(reverse osmosis), NF (nanofiltration), UF (ultrafiltra-
environmental regulations, and experiencing greater
tion), and MF (microfiltration) membranes depend-
demand for advanced water treatment due to higher
ing on the separation target. Toray Group develops,
drinking water quality standards. Meanwhile, in the
manufactures, and sells all of these membrane
Middle East, the Group is seeing a dramatic increase
products in-house.
in large-scale seawater desalination projects using
Used for seawater desalination and other appli-
energy efficient RO membranes in place of ther-
cations, Toray Group has steadily expanded RO
mal distillation technologies in response to growing
membranes as a core growth driving business by
demand for water due to population growth and
developing and launching new high-performance
industrial promotion measures. Against this back-
products to the market, enhancing global produc-
drop, Toray Group will increase RO membrane pro-
tion and sales capabilities, extending synergy with
duction capacity by 1.6 times compared with fiscal
former Woongjin Chemical, which was acquired in
2019 over the course of “AP-G 2022.” Moreover,
2014, and establishing a stable production structure
the Group will continue to thoroughly enhance cost
at a new location in the Middle East. Toray Group
structures and non-price competitiveness, including
is also strengthening the business structure for
proposal capabilities and technical services, in order
UF and MBR (membrane bioreactor) membranes
to maintain our top global share.
by developing new sales channels and launching
new products to the market. In terms of the plant
and equipment business, the Group is working to
strengthen the structure of the EPC (Engineering,
Procurement, Construction) sector centered on
Suido Kiko. As a result, net sales in the overall water
treatment business for fiscal 2019 grew 1.7 times
compared with fiscal 2013. Notably, net sales in
the RO membrane business grew 2.1 times. Under
“AP-G 2022,” the Group aims to expand sales and
business for UF and MBR products by leveraging
the global sales network for RO membranes, which
maintain one of the largest global shares, and to
connect this growth to deployment of total solu-
tions (IMS).
Water Treatment
Toray Industries, Inc.
Integrated Annual Report 2020
48
RO Element for Industries Sales Volume (FY2013=100)Net Sales of Water Treatment Business (FY2013=100)(FY)2019Actual2016Actual2013Actual2022Target2019Actual(J-GAAP)2016Actual(J-GAAP)2013Actual(J-GAAP)2022Target(IFRS)(Billion yen)Brackish waterUltrapureWaste waterreclamationSea water010152025305(FY)Approx. 2.3 timesgrowth in 10 yrs. since 2013Further salesexpansion in SeaWater and WasteWater Reclamationapplication (in whichToray is competitive)(Billion yen)ROUFMBRSystems0510152025 D
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Doubling the UF Membrane Business
with “New Tips”
offers easy on-site handling, and delivers price com-
petitiveness. This move is aimed at firmly capturing
replacement demand, which accounts for one-quar-
UF membranes are used for a wide range of appli-
ter of the entire market, as a means of more than
cations, including drinking and industrial water pro-
doubling the MBR membrane business compared
duction, sewage and wastewater recycling, and
with fiscal 2019.
pre-treatment for RO membrane seawater desalina-
tion. In response to growing global demand for sewage
and wastewater treatment, the UF membrane market
is projected to grow at a CAGR of approximately 10%.
Leveraging Expertise to Accelerate
IMS Deployment
In the UF membrane business, we developed New
More recently, the fields of water purification,
Tips, a new product that reduces overall EPC costs for
seawater desalination, and sewage and waste-
plants by 10%. “New Tips” was realized by increasing
water recycling have focused their attention on
the membrane area by 25% for the same housing size
IMS (Integrated Membrane System), an approach
based on a new technology that maintains the mem-
that combines various types of membranes. Toray
brane strength even with thinner hollow-fiber mem-
Group develops all types of membranes in-house
branes. With New Tips as a strategic product, Toray
and has intimate knowledge on the characteristics
Group is strengthening collaboration with partner
of each, thereby providing us with the capability to
companies, especially in China and ASEAN, in aims of
design the optimal system for the water source and
doubling business compared with fiscal 2019.
application, and to achieve the highest performance
at low cost. Leveraging these strengths, the Group
will steadily grow our IMS track-record.
Doubling the MBR Business with
“NHP”
MBR membranes are a submerged type membrane
module used in the membrane bioreactor process,
an advanced sewage and wastewater treatment
technology, and are increasingly being adopted for
sewage and wastewater recycling. Therefore, the
MBR membrane market is projected to see con-
tinued growth at a CAGR of approximately 10%.
Although our MBR membranes have captured a
growing share of the market due to their high per-
meability and durability, Toray Group is focused
on expanding sales of “NHP,” a new product that
saves space, reduces energy consumption by 30%,
Toray Industries, Inc.
Integrated Annual Report 2020
49
RO Element for Industries Sales Volume (FY2013=100)Net Sales of Water Treatment Business (FY2013=100)(FY)2019Actual2016Actual2013Actual2022Target2019Actual(J-GAAP)2016Actual(J-GAAP)2013Actual(J-GAAP)2022Target(IFRS)(Billion yen)Brackish waterUltrapureWaste waterreclamationSea water010152025305(FY)Approx. 2.3 timesgrowth in 10 yrs. since 2013Further salesexpansion in SeaWater and WasteWater Reclamationapplication (in whichToray is competitive)(Billion yen)ROUFMBRSystems0510152025
OUR FIRST IR DAY EVENT
We appreciate your continued
understanding of our manage-
ment and investor relations activ-
ities. In order to provide more
information about our strategy for
growth in each of our businesses
based on “Project AP-G 2022,”
our medium-term management
program announced in May of this
year, we recently held “TORAY IR
Day: Medium-term Management
Program, “Project AP-G 2022”
Business Briefing by Segments,”
Hideki Hirabayashi
Corporate Vice President, Investor Relations
and medium-term strategy for
respective businesses through
this beneficial meeting.” On
the other hand, other com-
ments pointed out future chal-
lenges: “Issues such as the
correlation between business
strategy and profit growth, and
verification of capital invest-
ment effectiveness were not
sufficiently addressed.” We
will reference these valuable
opinions in our management
and IR activities in the future.
We would like continue to hold IR events and
other activities that are opportunities for fulfilling dia-
logue with all of our shareholders and investors. We
sincerely request your further support and under-
standing for our management and IR activities.
The titles and division names used throughout the article
are those used on this recently held IR Day. There may be
variations from the time of publication of this report.
our first ever such event.
Given the ongoing COVID-19 pandemic, we pro-
vided the event live over the Internet to an audi-
ence of some 150 viewers in total. We would like
to take this opportunity to express our appreciation
to all those who took time from their busy sched-
ules to attend IR Day, and also to everyone who
streamed the event from our homepage.
In our post-event participant survey, we
received favorable comments to the effect of “I
was able to renew my understanding of positioning
Toray Industries, Inc.
Toray Industries, Inc.
Integrated Annual Report 2020
Integrated Annual Report 2020
50
50
Organization
(As of July 1, 2020)
Board of
Directors
President and
Representative
Member of the Board,
Representative
Member of the Board
Corporate Strategic Planning Division
Representative from Overseas
General Administration & Communications Division
Legal & Compliance Division
Human Resources Division
Finance & Controller’s Division
Executive Committee
Quality Assurance Division
Board of
Corporate
Auditors
Corporate Auditors
Corporate Auditors
Office
Auditing Dept.
Intellectual Property Division
Information Systems Division
Purchasing & Logistics Division
Corporate Marketing Planning Dept.
Global Environment Business Strategic Planning Dept.
Life Innovation Business Strategic Planning Dept.
Branches
Affiliated Companies Division
Fibers & Textiles Division
Resins & Chemicals Division
Films Division
Torayca & Advanced Composites Division
Electronic & Information Materials Division
Pharmaceuticals & Medical Products Division
Water Treatment & Environment Division
Technology Center
Manufacturing Division
Engineering Division
Research & Development Division
Toray Industries, Inc.
Integrated Annual Report 2020
51
Management system Members of the Board and Corporate Auditors
(As of June 23, 2020)
President and
Representative Member of the Board
Akihiro Nikkaku
Representative Member of the Board
Yukichi Deguchi
Representative Member of the Board
Koichi Abe
Representative Member of the Board
Mitsuo Ohya
Member of the Board
Satoru Hagiwara
Member of the Board
Masahiko Okamoto
Member of the Board
Minoru Yoshinaga
Member of the Board
Kazuyuki Adachi
Toray Industries, Inc.
Integrated Annual Report 2020
52
Member of the Board (Outside)
Ryoji Noyori
Member of the Board (Outside)
Kunio Ito
Member of the Board (Outside)
Susumu Kaminaga
Member of the Board (Outside)
Kazuo Futagawa
Corporate Auditor
Toru Fukasawa
Corporate Auditor
Shogo Masuda
Corporate Auditor (Outside)
Toshio Nagai
Corporate Auditor (Outside)
Kazuya Jono
Corporate Auditor (Outside)
Hiroyuki Kumasaka
Toray Industries, Inc.
Integrated Annual Report 2020
53
Management Team
(As of June 23, 2020)
Members of the Board
President and
Representative Member of the Board
Akihiro Nikkaku
1973 Joined the Company
2001 General Manager, Engineering Division;
General Manager, Second Engineering Dept.
2002 Vice President (Member of the Board)
2004 Senior Vice President (Member of the Board)
2006 Senior Vice President (Member of the Board &
Member of the Executive Committee)
2007 Executive Vice President and Representative
Representative Member of the Board
Koichi Abe
1977 Joined the Company
2004 General Manager, Aichi Plant
2005 Vice President (Member of the Board)
2009 Senior Vice President (Member of the Board)
2011 Senior Vice President (Member of the Board &
Member of the Executive Committee)
2013 Senior Vice President and Representative
Member of the Board
Representative Member of the Board
Yukichi Deguchi
1973 Joined the Company
2009 Assistant General Manager, Research &
Development Division
2009 Vice President (Member of the Board)
2012 Senior Vice President (Member of the Board)
2014 Senior Vice President (Member of the Board and
Member of the Executive Committee)
2018 Executive Vice President and Representative
Member of the Board
2014 Executive Vice President and Representative
Member of the Board
2010 President and Representative Member of the Board
2020 President and Representative Member of the
Board, Chief Executive Officer, Chief Operating
Officer (incumbent)
Member of the Board
2020 Executive Vice President (Representative
Member of the Board) (incumbent)
2020 Executive Vice President (Representative
Member of the Board) (incumbent)
Representative Member of the Board
Mitsuo Ohya
1980 Joined the Company
2009 General Manager, Industrial & Textile Fibers
Division
2012 Vice President (Member of the Board)
2014 Retired from Vice President (Member of the
Board)
President and Representative Member of the
Board, Toray International, Inc.
2016 Senior Vice President (Member of the Board &
Member of the Executive Committee)
2020 Executive Vice President (Representative
Member of the Board) (incumbent)
Member of the Board
Satoru Hagiwara
1981 Joined the Company
2012 General Manager, Industrial Films Division;
Chairman, Toray Films Europe S.A.S.; Chairman,
Toray Plastics Europe S.A.
2012 Vice President (Member of the Board)
2014 Senior Vice President (Member of the Board)
2017 President and Representative Member of the
Board, Toray Advanced Film Co., Ltd.
2020 Senior Vice President (Member of the Board)
(incumbent)
Member of the Board
Kazuyuki Adachi
1980 Joined the Company
2017 Director, Toray Industries (Thailand) Co., Ltd.;
President, Luckytex (Thailand) Public Company
Limited; Chairman, Thai Toray Textile Mills
Public Company Limited
2018 Senior Vice President (Member of the Board)
2020 Senior Vice President (Member of the Board)
(incumbent)
Member of the Board
Minoru Yoshinaga
1979 Joined the Company
2008 General Manager, Manufacturing Division
(Torayca & Prepreg Manufacturing, ACM
Technology Dept.)
2011 Vice President (Member of the Board)
2015 Chief Executive Representative for the Americas;
Chief Representative for the Americas;
Chairman, Toray Holding (U.S.A.), Inc.; President,
Toray Industries (America), Inc.; General
Manager, Torayca & Advanced Technology and
Manufacturing for the Americas
2019 General Manager, Torayca & Advanced Composite
Division (Carbon Fiber Business Strategy)
2020 Senior Vice President (Member of the Board)
(incumbent)
Member of the Board
Masahiko Okamoto
1986 Joined the Company
2009 Vice President (Member of the Board), Toray
Industries (Malaysia) Sdn. Berhad; Vice
President (Member of the Board), Penfabric
Sdn. Berhad; General Manager on Special
Assignment, Finance & Controller’s Division
(Finance & Controller’s Chief for Malaysia)
2011 General Manager on Special Assignment,
International Division
2013 General Manager, Finance Dept.
2017 General Manager, Controller’s Dept.
2020 Corporate Vice President (Member of the Board)
(incumbent)
Member of the Board (Outside)
Kunio Ito
2002 Dean, Graduate School of Commerce and
Management and Faculty of Commerce and
Management, Hitotsubashi University
2004 Executive Vice President and Board Member,
Hitotsubashi University
2013 Director, Kobayashi Pharmaceutical Co., Ltd.
(incumbent)
2014 Director, Seven & i Holdings Co., Ltd. (incumbent)
Vice President (Member of the Board) of the
Company
2018 Research Professor, Department of Business
Administration, Hitotsubashi University
Business School (incumbent)
2020 Member of the Board of the Company (incumbent)
Member of the Board (Outside)
Ryoji Noyori
1997 Dean, Graduate School of Science and School
of Science, Nagoya University
2001 Director, TAKASAGO INTERNATIONAL
CORPORATION (incumbent)
2003 President, RIKEN
2004 Special Professor, Nagoya University
(incumbent)
2015 Director-General, Center for Research and
Development Strategy, Japan Science and
Technology Agency (incumbent)
Vice President (Member of the Board) of the
Company
2020 Member of the Board of the Company (incumbent)
Member of the Board (Outside)
Susumu Kaminaga
1969 Joined Sumitomo Precision Products CO., LTD.
1995 Representative Director, Surface Technology
Systems Ltd.
2000 Director, Sumitomo Precision Products CO., LTD.
2002 Managing Director, Sumitomo Precision
Products CO., LTD.
2004 President, Sumitomo Precision Products CO., LTD.
2012 Senior Advisor, Sumitomo Precision Products
CO., LTD.; Representative Director, SK Global
Advisers Co., Ltd. (incumbent)
2012 Director, DEFTA Capital (incumbent)
2016 Outside Director, Olympus Corporation (incumbent)
2020 Member of the Board of the Company (incumbent)
Member of the Board (Outside)
Kazuo Futagawa
1980 Joined the Ministry of Health and Welfare
2012 Director-General of Minister’s Secretariat, the
Ministry of Health, Labour and Welfare
2014 Director-General, Health Policy Bureau, the
Ministry of Health, Labour and Welfare
2015 Vice-Minister of Health, Labour and Welfare
2017 Retired from Vice-Minister of Health, Labour
and Welfare
2018 Special Advisor on Policy, Social Security
Reform Office, Cabinet Secretariat
2020 Member of the Board of the Company (incumbent)
Corporate Auditors
Corporate Auditor
Shogo Masuda
1975 Joined the Company
2006 Assistant General Manager,
Affiliated Companies Division;
General Manager, Affiliated
Companies Administration Dept.;
General Manager on Special
Assignment, Corporate Strategic
Planning Division
2007 Vice President (Member of the
Board)
2011 Senior Vice President (Member of
the Board)
2016 Senior Vice President (Member
of the Board and Member of the
Executive Committee)
2017 Corporate Auditor (incumbent)
Corporate Auditor
Toru Fukasawa
1978 Joined the Company
2003 Executive Officer, Chori Co., Ltd.
2005 General Manager on Special
Assignment, Corporate Strategic
Planning Division; General Manager
on Special Assignment,
Investor Relations Dept.
2006 General Manager, Controller’s Dept.
2010 Chief Executive Representative for
Americas; Chief Representative for
America; Chairman, Toray Holding
(U.S.A.), Inc.; President, Toray
Industries (America), Inc.
2012 Vice President (Member of the Board)
2015 Senior Vice President (Member of
the Board)
2018 Senior Vice President (Member
of the Board and Member of the
Executive Committee)
2020 Corporate Auditor (incumbent)
Toray Industries, Inc.
Integrated Annual Report 2020
54
Outside Corporate Auditor
Toshio Nagai
2008 Chief Research Officer, Supreme
Court
2012 President, Hiroshima High Court
2013 President, Osaka High Court
2014 Mandatorily retired
Registered as a lawyer (The Dai-ichi
Tokyo Bar Association)
Takusyou Sogo Law Office
(incumbent)
Outside Corporate Auditor
Kazuya Jono
1977 Joined Mitsui Bank, Limited
2005 Executive Officer, Sumitomo Mitsui
Banking Corporation
2007 Managing Executive Officer,
Sumitomo Mitsui Banking
Corporation
2010 Senior Managing Director,
Sumitomo Mitsui Banking
Corporation
2015 Outside Corporate Auditor of the
2012 Retired
Company (incumbent)
2016 Outside Corporate Auditor,
SUMITOMO CORPORATION
(incumbent)
Representative Director, President &
CEO, Citibank Japan Ltd.
2014 Retired
2015 Outside Corporate Auditor of the
Company (incumbent)
Outside Corporate Auditor
Hiroyuki Kumasaka
1973 Joined FUSO Audit Corporation
(later MISUZU Audit Corporation)
2007 Chairs of the Board of Council;
Head, Tokyo Office, the Audit
Corporation
Representative Liquidator, the Audit
Corporation
2008 Outside Corporate Auditor,
MATSUDA SANGYO CO., LTD.
2011 External Corporate Auditor of the
Board, Japan Airlines Co., Ltd.
2015 Outside Audit and Supervisory
Committee Member, MATSUDA
SANGYO CO., LTD.
2019 Outside Corporate Auditor of the
2019 Outside Corporate Auditor, Brother
Company (incumbent)
Industries (incumbent)
President, Vice Presidents, and Executive Fellow
President
Akihiro Nikkaku
Executive Vice President
Koichi Abe
Executive Vice President
Yukichi Deguchi
Executive Vice President
Mitsuo Ohya
President, Chief Executive Officer, Chief
Operating Officer
Executive Vice President, Intellectual
Property Division, Global Environment
Business Strategic Planning Dept., and Life
Innovation Business Strategic Planning
Dept.; Technology Center; Toray Human
Resources Development Center
Executive Vice President, Corporate Strategic
Planning Division; Quality Assurance
Division; Legal & Compliance Division
(Security Trade Administration Dept.), HS
Business Development Dept.
Executive Vice President, Vice President,
Marketing and Sales; Corporate Marketing
Planning Dept., and branches; Affiliated
Companies Division
Senior Vice President
Hiroshi Otani
Senior Vice President
Satoru Hagiwara
Senior Vice President
Kazuyuki Adachi
Senior Vice President
Minoru Yoshinaga
Senior Vice President, Water Treatment
& Environment Division; Chairman, Toray
Asia Pte. Ltd.; Chairman, Toray Membrane
(Foshan) Co., Ltd.
Senior Vice President, Films Division;
Chairman, Toray Films Europe S.A.S.
Senior Vice President, Purchasing & Logistics
Division; Manufacturing Division
Senior Vice President, Torayca & Advanced
Composites Division; Chairman, Toray
Carbon Fibers Europe S.A.
Senior Vice President
Yasuo Suga
Senior Vice President
Hirofumi Kobayashi
Senior Vice President
Kazuhiko Shuto
Senior Vice President, Chief Representative
for Europe; President, Toray Industries
Europe GmbH
Senior Vice President, Pharmaceuticals &
Medical Products Division; Pharmaceuticals
& Medical Products Division (Technology &
Manufacturing)
Senior Vice President, Chief Representative
for China; Beijing Office; Chairman and
President, Toray Industries (China) Co., Ltd.;
Chairman,Toray Sakai Weaving & Dyeing
(Nantong) Co., Ltd.
Senior Vice President
Tetsuya Tsunekawa
Senior Vice President, Research &
Development Division; Basic Research
Center
Senior Vice President
Shigeki Taniguchi
Senior Vice President
Kenichiro Miki
Corporate Vice President
Satoru Nishino
Corporate Vice President
Hideki Hirabayashi
Senior Vice President, Human Resources
Division
Senior Vice President, Fibers & Textiles
Division; Osaka Head Office
Corporate Vice President, Films Technology
& Manufacturing Division
Corporate Vice President, CSR & Investor
Relations; Legal & Compliance Division;
General Administration & Communications
Division; Tokyo Head Office
Corporate Vice President
Hiroshi Enomoto
Corporate Vice President
Nobuyuki Inohara
Corporate Vice President
Hajime Ishii
Corporate Vice President
Hiroyuki Matsuda
Corporate Vice President, Electronic &
Information Materials Division
Corporate Vice President, Resins &
Chemicals Division
Corporate Vice President, Fibers & Textiles
Division; Global SCM Division
Corporate Vice President, Information
Systems Division; Engineering Division
Corporate Vice President
Masahiko Okamoto
Corporate Vice President, Finance &
Controller’s Division
Vice President
Young Kwan Lee
Vice President, Chief Representative
for Republic of Korea; President, Toray
Industries Korea Inc.; Chairman, Toray
Advanced Materials Korea Inc.
Vice President
Teh Hock Soon
Vice President
Yoshio Yamamoto
Vice President, Legal & Compliance Division
Vice President, Chief Representative
for Malaysia; President,Toray Industries
(Malaysia) Sdn. Berhad; Chairman, Penfabric
Sdn. Berhad; Chairman, Toray Malaysia
Systems Solution Sdn. Bhd.; Chairman, P.T.
Century Textile Industry Tbk
Vice President
Kazuaki Takabayashi
Vice President
Kei Shimaji
Vice President
Yuichiro Iguchi
Vice President
Osamu Tsuneki
Vice President, Chief Representative
for Thailand; President, Toray Industries
(Thailand) Co., Ltd.; Chairman, Toray Textiles
(Thailand) Public Company Limited
Vice President, Chief Representative for
Americas; President, Toray Industries
(America), Inc.
Vice President, Electronic & Information
Materials Division (Technology &
Manufacturing)
Vice President, Purchasing & Logistics
Division; Raw Materials Purchasing Dept.
Vice President
Kazuyuki Yakushiji
Vice President
Yasuo Fukuda
Vice President, Composite Materials
Technology & Manufacturing Division
Vice President, Fibers & Textiles Technology
& Manufacturing Division
Executive Fellow
Akihiko Kitano
Automotive & Aircraft Center;
ACM Technology Division
Toray Industries, Inc.
Integrated Annual Report 2020
55
Year
Total
number of
Board
members
Reduction in number of Members of the Board and change in its composition
2009
2012
2014
2015
2018
2020
30
28
26
25
19
Outside directors included
1
2
Percentage of outside directors
3.8%
8.0%
10.5%
33.3%
12
4
Corporate Governance
Basic Policy
From the outset, one of Toray Group’s managerial principles
has been that the purpose of a company is to contribute
to society. The Group has developed the Toray Philosophy
that incorporates this principle. The Group systematizes
the Toray Philosophy as a Corporate Philosophy, Corporate
Missions, Corporate Guiding Principles, etc. Among these,
the Corporate Missions call for desirable relationships with
stakeholders and enunciate the Group’s commitment to
shareholders “To practice sincere and trustworthy man-
agement.” In addition, the Corporate Guiding Principles
stipulate the Group’s commitment to ”acting with fairness,
high ethical standards and a strong sense of responsibility
while complying with laws, regulations and social norms to
earn trust and meet social expectations.”
When establishing the corporate governance structure, the
Group seeks to realize these philosophies as its basic policy.
Outline of Governance System and
Reasons for Adopting the System
As Toray Group supplies a wide range of industries with basic
materials and globally plays an active part in a broad scope
of business fields, it is necessary to evaluate various risks
multilaterally based on expertise relevant to the worksites,
not only for management judgment and decision-making
but also for oversight. To that end, the Board of Directors
formulates a structure in which members of the Board famil-
iar with Toray Group businesses oversee management and
make decisions from various viewpoints.
Toray operates as a company with a Board of Corporate
Auditors and Board of Directors. The Board of Directors,
which includes outside directors, decides on the business
Corporate Governance Structures
execution and supervises the execution of duties by the
members of the Board. The Board of Corporate Auditors
includes outside corporate auditors and independently
audits the execution of duties by the members of the Board,
separately from the Board of Directors and the executing
organization. This framework is designed to secure the
transparency and fairness of decision made by the Board
of Directors. In addition, there is a Governance Committee,
which serves as a voluntary advisory body to the Board of
Directors. The Governance Committee deliberates on all
matters relating to corporate governance, enhancing the
effectiveness of governance by the Board of Directors.
Members of the Board and corporate auditors, as offi-
cers directly elected at the general meeting of stockholders,
clearly recognize fiduciary responsibility to stockholders who
have entrusted the management and appropriately fulfill their
respective roles while discharging accountability about man-
agement status to stockholders and other stakeholders.
Strengthening the Governance Framework
In fiscal 2020, Toray Group set the number of members
of the Board of Directors to 12 (seven less than the pre-
vious fiscal year) and the number of outside directors to
four (two more than the previous fiscal year) in order to
improve the effectiveness of the Board of Directors and
to strengthen the business execution framework. The
Group also introduced an executive officer system for the
purpose of flexibly implementing management execution
based on quick decision-making that accurately reflects the
business environment and changes therein. The Board of
Directors both establishes the scope of business execu-
tion entrusted to the vice presidents and supervises the
General Meeting of Stockholders
Election
Election
Election
Decision-making, Oversight Functions
Independent Auditor
Cooperation
Board of Corporate Auditors
5 Corporate Auditors
(3 outside corporate auditors)
Audit
Board of Directors
12 members of the Board
(4 outside directors)
Report
Governance Committee
7 members including
4 outside directors
Cooperation
Audit
Cooperation
Audit
Business Execution Functions
Auditing Dept.
President
Conference Organs
Executive Committee
Company-wide Committees
Ethics and Compliance Committee
Risk Management Committee
CSR Committee, etc.
Internal audit
Divisions, Departments, Subsidiaries
Departmental Committees and Corferences
Toray Industries, Inc.
Integrated Annual Report 2020
56
Corporate Governance
execution of their duties. Moreover, the Group increased
the number of Governance Committee members, which
had consisted of one internal member of the Board and
two outside directors until now, to three internal members
of the Board and four outside directors (the committee
continues to be chaired by an outside director). As a result,
this move ensures that discussions and reports by the
Committee are made from a variety of perspectives.
Reduction in number of Members of the Board and change in its composition
Year
Total
number of
Board
members
2009
2012
2014
2015
2018
2020
30
28
26
25
19
Outside directors included
1
2
12
4
Percentage of outside directors
3.8%
8.0%
10.5%
33.3%
Status of Outside Directors/Corporate
Auditor Elections
At Toray, we ensure objectivity and transparency of corpo-
rate governance by establishing and disclosing standards
for independence of outside directors and outside corporate
auditors. Based on these standards, the Company elects
four outside directors and three outside corporate auditors,
and submits notification regarding their status as indepen-
dent officers to the Tokyo Stock Exchange.
The following table outlines the basis for election of our outside directors/corporate auditors and details
of their independence
Kunio Ito
Member of the Board
Ryoji Noyori
Member of the Board
Mr. Ito was elected as an outside director and assigned independent officer status due to his highly
specialized expertise in accounting and business administration as a university professor, and his
extensive experience as a corporate outside director.
Mr. Noyori was elected as an outside director and assigned independent officer status due to his
extensive experience as a university professor, his highly specialized expertise in organic synthetic
chemistry, which is a core Toray technology, and his experience as a corporate outside director.
Susumu Kaminaga
Member of the Board
Mr. Kaminaga was elected as an outside director and assigned independent officer status due to
his extensive experience as a member of top management, his international perspective, and his
experience as a corporate outside director.
Kazuo Futagawa
Member of the Board
Mr. Futagawa was elected as an outside director and assigned independent officer status due to his
extensive experience, knowledge, and deep expertize as an administrative officer.
Toshio Nagai
Corporate Auditor
Kazuya Jono
Corporate Auditor
Mr. Nagai was elected as an outside corporate auditor and assigned independent officer status due
to his excellent track record of high standing in the legal profession, his solid character and judg-
ment, and his ability to appropriately audit the Group from an objective standpoint.
Mr. Jono was elected as an outside corporate auditor and assigned independent officer status due
to his having held key positions in the business world, his solid character and judgment, and his
ability to appropriately audit the Group from an objective standpoint.
Hiroyuki Kumasaka
Corporate Auditor
Mr. Kumasaka was elected as an outside corporate auditor and assigned independent officer status
due to his advanced knowledge in accounting, his wealth of experience and established track record
as a certified public accountant, his impeccable character and deep insight, and his ability to appro-
priately audit the Group from an objective standpoint.
Basic Policy on Internal Control System
To realize the Management Philosophy, the Company shall
establish a structure to execute its business legally and effec-
tively by improving its internal control system according to the
following basic policy as a structure to enable it to appropri-
ately establish organization, formulate regulations, commu-
nicate information, and monitor the execution of operations.
1. System to ensure that the execution of duties by the
members of the Board and employees complies with laws
and regulations and the Company’s Articles of Incorporation
• Toray shall establish the Ethics and Compliance Committee,
as one of the company-wide committees to promote obser-
vance of corporate ethics and legal compliance, and shall take
other measures to improve the required internal systems,
including the establishment of dedicated organizations.
• Toray shall establish the Ethics & Compliance Code of
Conduct as specific provisions to be observed by members
of the Board and employees, and shall take other mea-
sures to improve the required guidelines, etc. Especially
with regard to eliminating relations with antisocial forces,
the Company shall act as one to stand firmly against them.
• Toray shall establish an internal reporting system (whis-
tle-blowing system) for the reporting of the discovery of
Toray Industries, Inc.
Integrated Annual Report 2020
57
Corporate Governance
violation of laws, regulations, or the Company’s Articles
of Incorporation.
• Toray shall establish Security Trade Control Program, one of
the most important legal compliance issues, and establish
an organization dedicated to security export control.
2. System to ensure the efficient execution of duties by
the members of the Board and employees
• Toray shall establish the Authority of Top Management to
stipulate matters with respect to which decision-making
authority is reserved by the Board of Directors and matters
with respect to which decision-making is delegated to the
President, general managers, etc., from among matters
necessary for decision-making.
• Toray shall establish the Executive Committee as deliber-
ative organs for important matters decided by the Board
of Directors or the President. The Executive Committee
shall be responsible for the general direction of policy, and
shall be in charge of issues related to implementation.
3. System for preserving and managing information
pertaining to the execution of duties by the members of
the Board and employees
• Toray shall establish regulations for important documents
and important information related to management, confiden-
tial information and personal information, and appropriately
preserve and manage them in accordance with the rules.
4. Regulations and other systems pertaining to controls
over risks of loss
• Toray shall identify potential risks in business activities,
promote company-wide risk management to strive to
reduce the level of risk under normal business conditions,
and prevent future crises, as well as improve regulations
and establish an internal committee to enable immediate
implementation in the event of a major crisis.
• Toray shall establish an internal control system for financial
reporting that ensures the reliability of financial reporting.
5. System for ensuring appropriate business operations
within subsidiaries
• To establish a system under which subsidiaries report to
the Company on matters regarding the execution of duties
by members of the Board, etc. of the subsidiaries, the
Company shall provide regulations on the regular reporting
of important management information to the Company
and regularly hold conferences at which the Company’s
management receives direct reports on the status of the
management of the subsidiaries.
• To establish regulations and other systems pertaining to
controls over risks of loss for subsidiaries, the Company
shall provide subsidiaries with guidance to help them to
establish risk management systems appropriate for their
respective business forms and business environments, and
shall receive regular reports on the status of their activities.
• To establish a system for ensuring that members of the
Board, etc. of subsidiaries effectively execute their duties,
Toray Industries, Inc.
Integrated Annual Report 2020
58
the Company shall provide regulations on the scope under
which the Company can reserve its authority over the exe-
cution of business operations. In addition, the Company
shall endeavor to grasp management information in a
unified manner and provide assistance and guidance nec-
essary for subsidiaries by determining divisions, etc. with
control over its respective subsidiaries.
• To establish a system for ensuring that the execution of
duties by members of the Board, etc. and employees of
subsidiaries complies with laws and regulations and the
Articles of Incorporation, the Company shall thoroughly
familiarize its subsidiaries with the Company’s Ethics &
Compliance Code of Conduct as a code of conduct in
common for Toray Group. At the same time, the Company
shall request the subsidiaries to establish their own codes
of conduct, guidelines, etc. in consideration of the laws
and regulations, business practices, business forms, and
other factors in their respective countries. In addition, the
Company shall direct its subsidiaries to establish sys-
tems under which the status of internal whistle-blowing
by members of the Board, etc. and employees of the
subsidiaries is appropriately reported to the Company.
6. System for reporting to corporate auditors and systems for
ensuring that persons who report to corporate auditors are
not treated disadvantageously because of their reporting
• Members of the Board, etc. and employees of Toray Group
and corporate auditors of subsidiaries shall report matters
regarding the execution of duties to corporate auditors in
response to requests from the corporate auditors.
• Department in charge of the internal reporting system (whis-
tle-blowing system) shall regularly report the status of inter-
nal whistle-blowing in Toray Group to the corporate auditors.
• Toray shall stipulate regulations to the effect that members of
the Board and employees who report to corporate auditors
shall not be subjected to any disadvantageous treatment
because of the said reporting, and shall provide subsidiaries
with guidance to help them stipulate the same regulations.
7. Items pertaining to the handling of expenses and
liabilities arising from the execution of duties by
corporate auditors
• Toray shall pay expenses, etc. incurred from the execution
of duties by corporate auditors.
8. Items pertaining to employees assisting with corporate
auditors’ duties, items pertaining to the independence of said
employees from members of the Board, and items pertaining
to the assurance of effectiveness of instructions from the
corporate auditors to said employees
• Toray shall assign a full-time employee to provide assistance
if and when corporate auditors request assistance. The said
employee shall exclusively follow the corporate auditors’
commands and instructions, and the Company shall con-
sult with corporate auditors in advance with respect to the
personnel arrangements for the said employee.
9. Other systems for ensuring effective implementation of
audits by corporate auditors
• Corporate auditors shall attend Board of Directors meet-
ings and other important meetings so that they may
ascertain important decision-making processes and the
execution of operations.
• Corporate auditors shall hold regular meetings with mem-
bers of the Board and management and conduct regular
visiting audits of Toray offices, plants, and subsidiaries.
Remuneration for Members of the Board
Given their roles, remuneration for internal members of the
Board consists of basic remuneration (monthly remunera-
tion,) as well as a performance-based remuneration, a bonus
and stock acquisition rights as stock options. Remuneration
for outside directors consists of monthly remuneration only.
Remuneration is set at a level that enables the Company
to secure superior human resources and further motivate
them to improve performance, referring to the results of
a survey of other companies’ remuneration by an external
third-party organization.
With respect to monthly remuneration, the maximum
limit of total remuneration is determined at general meetings
of stockholders. Within the scope of the maximum limit,
monthly remuneration of each member of the Board is deter-
mined by the President based on the Company’s internal
regulations resolved at the Board of Directors meeting.
The provision and the total amount of bonuses are
determined each time at a general meeting of stock-
holders. Particulars of the agenda at the general meeting
of stockholders are resolved by the Board of Directors
Details of Remuneration in Fiscal 2019
through conference among senior management, including
the President, in consideration of the consolidated operating
income for each fiscal year that best represents the results
of the Company’s global business operations, plus the his-
torical record, etc. A bonus to each member of the Board is
determined by the President according to each member’s
performance based on the Company’s internal regulations
with a resolution at a Board of Directors meeting.
The maximum limit of total number of Stock Acquisition
Rights as well as the limit of remuneration relating to the
granting of the Stock Acquisition Rights as stock options to
members of the Board is resolved at the general meeting
of stockholders, and within that limit, the total number of
Stock Acquisition Rights to be allocated to the members of
the Board shall be decided at the Board of Directors meeting
based on the Company’s internal regulations.
Given their roles, remuneration for corporate auditors con-
sists of monthly remuneration only. Remuneration is set at
a level that enables the Company to secure superior human
resources, referring to the results of a survey of other com-
panies’ remuneration by an external third-party organization.
With respect to monthly remuneration, the maximum
limit of total remuneration is determined at general meetings
of stockholders. Within the scope of the maximum limit,
monthly remuneration to each corporate auditor is deter-
mined through consultation by corporate auditors based on
the Company’s internal regulations.
The Governance Committee continuously reviews the
remuneration system for members of the Board and cor-
porate auditors.
Position
Total
remuneration
(millions of yen)
Total remuneration by type (millions of yen)
Basic
Bonuses
Stock options as
remunerations
Recipients
Members of the Board (excluding outside directors)
1,130
787
154
188
Corporate auditors (excluding outside corporate auditors)
Outside directors
Outside corporate auditors
79
24
32
79
24
32
—
—
—
—
—
—
18
2
2
3
Notes: 1. Recipients included one member of the Board (excluding outside directors) who retired during fiscal 2019.
2. Total amounts of remuneration do not include the ¥29 million paid in salaries to two employee-directors.
Total Remuneration Received by Members of the Board and Corporate Auditors
Name
Total consolidated
remuneration
(millions of yen)
Position
Status of
company
Total consolidated remuneration by type (millions of yen)
Basic
Bonuses
Stock options as
remuneration
Akihiro Nikkaku
153
Member of the
Board
Filing company
104
25
23
Note: Total remuneration only includes persons receiving more than ¥100 million.
Toray Industries, Inc.
Integrated Annual Report 2020
59
Analyzing and Evaluating the
Effectiveness of the Board of Directors
Process of Analysis and Evaluation
Over the period from late-March 2020 to mid-April 2020,
Philosophy and Corporate Missions. As a result, we
believe that the Board of Directors generally fulfilled
Toray’s Board of Directors conducted a “Questionnaire
its roles and responsibilities in indicating the direc-
Survey to Evaluate the Effectiveness of the Board of
tion of corporate strategies and other major courses
Directors in fiscal 2019.” The 24 survey respondents,
of action in an appropriate manner.
who comprised all of the Board members and corporate
(2) In fiscal 2019, the Board of Directors held 14 meet-
auditors, answered questions on the following survey
ings in total to perform oversight and decision-mak-
items and gave their names.
ing in a timely and appropriate manner. Furthermore,
it promoted reviews on the scope of delegating deci-
(1) Management Philosophy and Corporate Missions
sion-making authority. Through these initiatives, we
(2) Size and structure of the Board of Directors
believe that the Board of Directors generally fulfilled
(3) Segregation of oversight and business operations
its roles and responsibilities in establishing an envi-
(4) Provision of information prior to Board of
ronment conducive to appropriate risk-taking by the
Directors meetings
senior management in an appropriate manner.
(5) Number of agenda at Board of Directors meetings
(3) With respect to the 14 Board of Directors meet-
(6) Proceedings at Board of Directors meetings
ings held in fiscal 2019, the attendance rate of the
(7) Management response to opinions, etc. at
members of the Board was 100%. Outside directors
Board of Directors meetings
made remarks mainly from their respective profes-
(8) Authority of the Board of Directors
sional viewpoints. The opinions, etc. at the Board of
(9) Appropriate response to conflicts of interest
Directors meetings, including the above mentioned
(10) Communication with stakeholders
remarks, were appropriately reflected in measures
(11) Communication among members of the Board
taken by the management. With respect to transac-
(12) Opportunities to acquire knowledge
tions causing possible conflicts of interest, internal
(13) Compliance promotion
(14) Group governance
(15) Overall evaluation
procedures to handle them were appropriately car-
ried out. In light of the above, we believe that the
Board of Directors generally fulfilled its roles and
responsibilities in carrying out the effective oversight
In addition to the questionnaire, Secretariat of
of members of the Board and the management from
the Board of Directors individually interviewed out-
an independent and objective standpoint in an appro-
side directors and outside corporate auditors (total of
priate manner.
five persons) to hear their opinions in relation to their
(4) Based on the above, we believe that the Board of
responses to the questionnaire.
Directors generally fulfilled its roles and responsibili-
The survey results were analyzed and evaluated at
ties in an effective manner in fiscal 2019. With regard
the Governance Committee held on June 11, 2020 and
to the matter, “further activating discussions at the
the results of the analysis and evaluation were deliber-
ated at the Board of Directors meeting held on June 17,
2020. The overview of the results of the analysis
and evaluation shown below describes the contents
resolved at the Board of Directors meeting.
委託
委託
加工先
加工先
Board of Directors meetings,” however, continuing
NECの品質データ基盤が目指すイメージ図
NECの品質データ基盤が目指すイメージ図
from fiscal 2019, specific measures for improvement
must be taken in fiscal 2020 and thereafter to further
検査結果公開
検査結果公開
品質分析
品質分析
お客様
お客様
improve the effectiveness of the Board of Directors.
品質データ基盤
品質データ基盤
(5) With respect to the opinions, etc. received from
サプライヤー
サプライヤー
Overview of the Results of the Analysis
and Evaluation
(1) In fiscal 2019, the Board of Directors performed
the members of the Board and corporate auditors
検査成績書
検査成績書
品質情報の集約①
品質情報の集約①
委託加工先・
委託加工先・
サプライヤー情報も連携
サプライヤー情報も連携
in the course of evaluating the effectiveness of the
検査
検査
Board of Directors, the Governance Committee shall
deepen discussions based on those opinions with a
品質情報の集約②
品質情報の集約②
クレーム管理
クレーム管理
view to further improving the effectiveness of the
情報連携
情報連携
グループ会社のデータ
グループ会社のデータ
も一元的に管理
も一元的に管理
oversight and decision-making based on a deep
Board of Directors, as necessary.
understanding and sympathy with the Management
自社
自社
検査
検査
グループ
グループ
会社
会社
Toray Industries, Inc.
Integrated Annual Report 2020
60
Analyzing and Evaluating the Effectiveness of the Board of Directors
compliance
Basic Approach
In order to contribute to society by leveraging innova-
and codes of conduct, which serve as a series of core
rules that must be observed in different areas of busi-
tive technologies and advanced materials in line with its
ness by Toray group companies and all executives and
corporate philosophy, as well as by working to resolve
employees, including contracted, part-time and tempo-
major global issues, Toray Group must build and main-
rary workers, as a means of fully informing employees
tain relationships of trust with our various stakeholders.
of these obligations and tools.
And in order to gain this trust, it is essential to com-
ply with the laws and regulations related to our busi-
1. Compliance for safety and the environment
ness activities in each country in which we operate and
(1) Building a safe working environment
maintain the highest level of integrity in all our actions.
(2) Caring for the environment
Therefore, top management focuses on its leadership
2. Compliance for quality
role in making compliance a priority, while both the
(1) Providing safe and satisfactory products to
Group and its suppliers are required to promote ethics
customers
and compliance.
Ethics and Compliance Structure
Toray has established an Ethics and Compliance
(2) Proper quality data management
3. Compliance for human rights
(1) Respect for the character and individuality of
employees
Committee chaired by the President and consisting of
(2) Preventing harassment and discrimination
vice presidents. At this committee, management and
(3) Respect for the human rights of all stakeholders
workers come together to consider and discuss poli-
4. Compliance for fair business activities
cies related to ethics and compliance. Moreover, this
(1) Competing fairly
Committee reports on the operational status of the
(2) Fair transaction and asset management
whistle-blowing system established by Toray Group,
(3) International trade control and security trade
including the number of reports (consultations) and
administration
other details, to members of the Board. During fiscal
(4) Compliance with applicable laws in general
2019, this Committee met twice to deliberate and
5. Compliance for intellectual property
discuss Toray Group’s ethics and compliance activity
(1) Respect for intellectual property rights of others
results for fiscal 2018 and the activity plans and prog-
6. Compliance for information management
ress updates for fiscal 2019. This Committee also dis-
(1) Information management
cussed individual measures, including a review of the
(2) Proper reporting and public disclosures
Ethics & Compliance Code of Conduct.
Acting as leaders, divisional and departmental gen-
eral managers at each workplace adopt a top-down
approach toward promoting initiatives.
Corporate Ethics and Legal Compliance
Education
In initiatives for group companies around the world,
Toray posts information on CSR and legal compliance on
Toray Group has established the Affiliate Companies’
its corporate intranet. Toray Group circulates important
Compliance Meeting and
the Overseas Affiliate
information about legal and compliance matters that are
Companies’ Compliance Meetings under the Ethics and
highly relevant to its business in Japan and overseas.
Compliance Committee. Through these committees,
Group companies implement workshops to examine
Toray Group is promoting compliance activities in each
these matters and study cases of corporate misconduct
company, country and region.
in an effort to foster discussion in the workplace.
Ethics & Compliance Code of Conduct
Toray reviewed the content of the Corporate Ethics and
Since fiscal 2012, Toray has provided online train-
ing courses on corporate ethics and legal compliance
for all executives and employees, including contracted,
Legal Compliance Code of Conduct, and revised it as
part-time and temporary workers. In fiscal 2019, the
the Ethics & Compliance Code of Conduct in May 2020.
Company worked to raise awareness of human rights
The revised code summarizes the compliance helpline,
issues using case studies based on actual reports
the promotion framework for ethics and compliance,
and consultations within Toray Group, reminding all
Toray Industries, Inc.
Integrated Annual Report 2020
61
NECの品質データ基盤が目指すイメージ図
委託
加工先
品質分析
検査結果公開
お客様
サプライヤー
品質データ基盤
品質情報の集約①
委託加工先・
サプライヤー情報も連携
クレーム管理
情報連携
検査成績書
品質情報の集約②
グループ会社のデータ
も一元的に管理
自社
グループ
会社
検査
検査
compliance
Compliance
participants that issues can occur in any department.
employees have access to alternative means of report-
Group companies in Japan are using these materials to
ing and consulting such as via contact points at its
implement their own training.
Suido Kiko Qualification Misconduct Issue
Toray discovered in March 2020 that Suido Kiko,
offices, plants and labor unions or directly to the sec-
retariat of the Ethics and Compliance Committee via
phone or email.
In addition, each group company in Japan has estab-
a subsidiary engaged in water and sewage facility
lished a Helpline contact point. Moreover, Toray has also
engineering, had potentially allowed an employee
created an external Helpline contact point shared by all
to take the First Class Civil Engineering Works
group companies in Japan to make it easier for employ-
Execution Managing Engineer test despite not hav-
ees to report and consult.
ing satisfied the practical experience requirements
Each group company outside Japan has also estab-
for this test. Thereafter, a third-party committee was
lished a Helpline contact point (internal, outside, or
established and commissioned to investigate the
regional contact points). These Helpline contact points
facts and make recommendations on how to pre-
have been in operation at all companies since fiscal
vent a recurrence. On September 24, we received
2017. There were reports in several countries and
the report of the investigation by the third-party
regions, and Toray Group is working to resolve the
committee, and on September 25, we reported to
issues, while carefully confirming circumstances in
the Ministry of Land, Infrastructure, Transport and
interviews and investigations.
Tourism on the content of the report and measures
Since fiscal 2016, Toray has also maintained an addi-
to prevent a reoccurrence.
Expanding the Whistle-Blowing System
Toray established the Corporate Ethics and Legal
tional whistle-blowing system for group companies to
directly report serious misconduct such as violations of
antitrust laws and bribery, and it is working to inform all
Toray Group companies about the system.
The number of inquiries (consultations) received
Compliance Helpline as a whistle-blowing system in fis-
through the hotline and the details of the cases are
cal 2003 and expanded the system to include all group
reported to the Board of Directors by the Ethics and
companies in Japan in fiscal 2010. By introducing this
Compliance Committee, which convenes twice a year.
system, the Company expects employees first to take
the initiative in managing conduct with regard to corpo-
rate ethics and legal compliance, and to consult with a
supervisor as soon as an issue arises.
Reinforcing Compliance in Product
Quality Assurance
Recognizing that reporting or consulting with super-
Toray Group is pursuing five major issues to reinforce prod-
visors may be difficult, the Company ensures that
uct quality assurance compliance throughout the Group.
Sharing Quality Inspection Information
Throughout the Supply Chain
Toray and NEC Corporation established a
quality data network that collects and stores
product quality inspection information sam-
pled from inspection equipment as digital
data, and shares this information throughout
the supply chain. This sharing process does
not require any human intervention, which
helps to enhance the reliability of quality
inspection information and to raise the effi-
ciency of quality assurance operations.
Toray Industries, Inc.
Integrated Annual Report 2020
62
Outsourced
委託
processing
加工先
品質分析
Quality analysis
Supplier
サプライヤー
Image diagram aimed at by
NECの品質データ基盤が目指すイメージ図
NEC’s quality data network
Quality data network
品質データ基盤
Inspection result
検査結果公開
disclosure
Customer
お客様
Aggregation of quality
品質情報の集約①
information (1)
委託加工先・
Coordination of contract
サプライヤー情報も連携
processing destination /
supplier information
Inspection
検査
Claim management
クレーム管理
Information linkage
情報連携
Inspection report
検査成績書
Aggregation of quality
品質情報の集約②
information (2)
グループ会社のデータ
Centralized management of
group company data
も一元的に管理
In-house
自社
Inspection
検査
Group
グループ
company
会社
1. Reinforcement of structures related to quality
assurance systems of the entire Toray Group
items as part of the first stage, and then expanded
the scope of the investigation to cover inspection
The Group provides guidance to each division and group
items that were not related to safety. Finally, the
companies regarding their quality assurance system,
investigation queried all of the remaining measure-
and audits the effectiveness of these systems and the
ment data (112,000 entries). As a result, 149 entries
work done under them. Based on the formulated prod-
were found to have been overwritten. Therefore, in
uct quality assurance vision, the organizations design
October 2017, the Group reported the facts of the
initiatives to close the gap between the vision and actual
case to all 13 companies covered by the investi-
performance.
2. Development of human resources and creation of
workplace culture not allowing any misconduct
The Group continues to provide education for all employ-
gation and requested each company to check for
issues with safety upon verifying the impact on
customer products. The Group also established
an expert committee and held a press conference
ees involved in product quality at Toray Group in order to
to make an announcement on the contents of the
maintain and improve the awareness of product quality
Expert Committee Report.
assurance compliance.
3. Understanding of actual state of agreements with
customers and establishment of guidelines related
to product quality (assurance)
At the same time, the Group advanced measures
aimed at preventing a recurrence, including strength-
ening the compliance systems related to product
quality assurance, further improving data manage-
The Group is preparing guidelines for product quality
ment systems, reviewing product quality standards,
assurance agreements and will use them to assess
and improving the maintenance of measurement
agreements and review their provisions as necessary.
4. Appropriate maintenance or control and
modernization or fulfillment of measuring equipment
Toray prepared a risk assessment table for judging the
equipment. Moreover, the Group appointed a repre-
sentative member of the Board (General Manager,
Product Quality Assurance Division) to take respon-
sibility for product quality assurance operations
necessity of upgrading or conducting maintenance
throughout the Toray Group, and established the
on measuring equipment, and used them to identify
Product Quality Assurance Division as a new division
devices in need of an upgrade.
5. Improvement of quality data management system to
to oversee improvements to and the effectiveness
of the quality assurance system in February 2018.
not allow any misconduct
The Group also promotes automation of data mea-
The Group is developing data management systems
surements as an additional effort to better ensure
that minimize human involvement, such as by automat-
the effectiveness of product quality assurance oper-
ing measurement, transfer of measurement data, and
ations throughout Toray Group.
issuance of inspection reports.
Inappropriate overwriting of product inspection
report data by Toray Hybrid Cord
As a result of a compliance survey conducted
during July 2016 at Toray Hybrid Cord (THC), a
Improving Security Trade Controls
Sharing the Latest Trends and Management Strategies
for Security Trade Controls
Concerns about the spread of conventional mass weap-
subsidiary engaged in processing tire cords, indus-
ons of destruction and changes in the international
trial-use cords, carpet pile threads and other fiber
security balance necessitate risk management address-
products for industrial materials, THC was found to
ing security trade controls.
have overwritten data during the period from April
Toray convenes a Security Trade Administration
2008 to July 2016. In this case, data that varied
Committee comprising officers of divisions that are
slightly above or below the values for quality stan-
involved in exports and technology transfer. In fiscal
dards settled upon with customers were overwrit-
2019, the committee decided on measures to imple-
ten in order to fit within these standards.
ment for the fiscal year after considering pressing risks
In response, the Group launched an investi-
based on recent international circumstances and regu-
gation that focused on safety-related inspection
latory trends. The committee members also convene a
Toray Industries, Inc.
Integrated Annual Report 2020
63
Image diagram aimed at by
NECの品質データ基盤が目指すイメージ図
NEC’s quality data network
Outsourced
委託
processing
加工先
Quality analysis
品質分析
サプライヤー
Supplier
Quality data network
品質データ基盤
Inspection result
検査結果公開
disclosure
Customer
お客様
Inspection report
検査成績書
品質情報の集約①
Aggregation of quality
information (1)
委託加工先・
Coordination of contract
サプライヤー情報も連携
processing destination /
supplier information
Inspection
検査
Claim management
クレーム管理
Information linkage
情報連携
Aggregation of quality
品質情報の集約②
information (2)
グループ会社のデータ
Centralized management of
group company data
も一元的に管理
In-house
自社
Inspection
検査
グループ
Group
company
会社
Compliance
Divisional Security Trade Administration Committee that
suspicious trade information at various company meet-
communicates corporate measures and implements sup-
plementary programs, such as precautions to be taken by
departments and group companies under its supervision.
Practically Addressing Risks
Toray Group performs risk management of security
ings, and took steps to improve its risk management.
4. Improved inspection systems
Toray established a link between the security trade
administration system and the sales backbone system
as part of regular operations in order to improve the
trade controls with regard to the export of all products,
infrastructure for preventing mistaken shipments due to
devices, materials, and samples, as well as the transfer
human error. Moreover, the Company supported inno-
of technologies outside Japan. Particularly strict man-
agement is necessary for TORAYCA® carbon fiber and
its composite materials, semiconductor coating agents,
and water treatment membranes, which are listed as
restricted items requiring export permission from the
Japanese Minister of Economy, Trade and Industry.
The following measures to enhance risk manage-
ment associated with security trade controls have
vative initiatives designed to improve the efficiency of
administration through the use of these systems, and
widely deployed cases that have produced results.
Competition Law Compliance, Anticorruption, and
Antibribery
1. Competition Law Compliance
The Ethics & Compliance Code of Conduct, revised
been implemented based on conditions in and outside
in May 2020, defines the code of conduct related to
of Japan.
1. Enhanced employees’ capacity for accurate
judgment within Toray’s divisions and group
companies
competition laws that must be observed by all Toray
Group executives and employees. Educational materi-
als related to competition laws have been prepared in
Japanese and English for all Toray Group employees.
Toray conducted training to provide the necessary prac-
Within Japan, the Group prepares and utilizes compli-
tical knowledge to the mid-level employees that play a
ance training materials and gathers examples of compli-
central role in implementing security trade controls, as
well as training to newly appointed managers to encour-
age appropriate on-site management.
ance violations related to competition laws.
2. Anti-corruption and Anti-bribery
In January 2020, Toray Group formulated a new set of
The Company also conducted a series of advanced
Anti-bribery Rules that explicitly prohibit offering and
courses for employees with specialized expertise.
accepting bribes to or from public officials and business
These hands-on courses were designed to better equip
partners, and established the rules for approval and
them with the skills necessary to conduct classifica-
reporting when offering or receiving money or other
tions, export transactions and technology transfers. A
benefits to or from public officials and business part-
total of 127 employees participated in 2 courses.
ners. Similar rules have also been introduced at both
In addition, the Company systematically encourages
domestic and overseas group companies.
employees to take the exam authorized by the Center for
The Ethics & Compliance Code of Conduct defines
Information on Security Trade Controls in Japan. A total
of 221 Toray Group employees passed the exam in fis-
cal 2019, bringing the cumulative number of Toray Group
the code of conduct related to anti-corruption and
NECの品質データ基盤が目指すイメージ図
anti-bribery that must be observed by all Toray Group
委託
加工先
executives and employees. Educational materials
検査結果公開
お客様
品質分析
employees who have passed the exam to 3,996 persons.
2. Conduct regular audits
Toray carried out paper audits and onsite audits of
group companies, and provided individualized guidance
based on the results to help group companies make
improvements.
3. Enhanced information sharing and reporting
Toray integrated and centralized information on concerns
such as suspicious trade inquiries, reported or consulted
with the appropriate authorities as required, and took
サプライヤー
related to anticorruption and anti-bribery have been
品質データ基盤
prepared in Japanese and English for all Toray Group
品質情報の集約①
employees.
3. Protection of Personal Information
In order to comply with Japan’s Act on the Protection of
委託加工先・
サプライヤー情報も連携
検査
検査成績書
Personal Information, Toray has established Regulations
品質情報の集約②
クレーム管理
for the Management of Personal Information, together
情報連携
グループ会社のデータ
も一元的に管理
with a management framework and practices to ensure
each department manages personal information appro-
自社
priately. Audits are regularly conducted into the manage-
検査
グループ
会社
the appropriate measures. The Company also shared
ment conditions in each department.
Toray Industries, Inc.
Integrated Annual Report 2020
64
In fiscal 2019, the Company received no complaints
internal legal and compliance audit every other year.
concerning personal information and there were no
In fiscal 2018, internal legal compliance audits were
data breaches. Major Toray Group companies in and
implemented for the designated divisions of Toray
outside Japan appropriately conduct management in
and its group companies in Japan. In fiscal 2019, the
accordance with the management systems and meth-
Company confirmed the improvement status of prob-
ods specified by the internal rules of each company.
lems found in the audit, verifying that 100% of the com-
Promotion of Mission B.E.A.R. Activities
In fiscal 2018, Toray Group launched a new initiative
panies had made improvements (including companies
under improvement).
Moreover, in order to increase the effectiveness of
with the slogan “Have the integrity to do the right thing
audits related to high-priority items, including competi-
in the right way.” The initiative includes the following
tion laws, bribery and corruption regulations, the whis-
four principles for taking more effective action to ensure
tle-blowing system and entry into agreements, in fiscal
compliance.
Compliance Action Principles
B: Be fair, be honest and have integrity
E: Encourage respect and communication
A: Adopt a genba approach – Look to the facts!
R: Responsibility as a member of our excellent company
2019 the Group reviewed the audit methods related to
legal affairs and compliance, and plans to implement the
results of this review in fiscal 2020 and beyond.
Tax Compliance
Toray Group is committed to meeting its tax responsi-
bilities in accordance with local and national tax laws
and related rules, as well as to meeting international
standards such as OECD guidelines. With the growth of
international transactions, transfer pricing is increasing
in importance. The Group endeavors to suitably allocate
its income by calculating transfer pricing based on the
arm’s length principle. Under the awareness that it is
important to fulfill its social responsibilities as a cor-
Under the name “Mission B.E.A.R.,” taking its acronym
poration by administering taxes in a highly transparent
from the first word of each principle, Toray Group com-
manner, the Group redefined its basic approach to tax
panies formulate declarations and action plans related to
policies with which each employee must comply, and
compliance, and implement initiatives that correspond
established the Toray Group Tax Policy in order to reli-
to their individual situations. Toray Group implements
ably implement tax compliance related initiatives to a
periodic follow-ups for the initiatives of each company,
greater extent. This policy has been applied globally
shares the effective initiatives of each company within
starting in May 2020.
the Group, and encourages each company to take the
initiative in evolving their compliance activities.
In fiscal 2020, Toray will continue to assist and
monitor compliance initiatives at group companies.
Moreover, actively sharing compliance initiatives and
educational materials will strengthen risk response that
emphasizes factors unique to each region and type of
business while reinforcing Toray Group’s integrity-driven
corporate culture.
Implementing Internal Legal Audits
In fiscal 2016, Toray Group adopted a group-wide sys-
tem for self-inspections and mutual internal control
audits. Designated divisions of Toray and designated
group companies in and outside Japan must receive an
Basic Policy
1. Toray makes efforts to pay taxes appropriately by
complying with the tax laws of each country and
international taxation rules.
2. Toray makes efforts to enhance corporate value
and maximize shareholder value while minimizing
tax risks and optimizing tax expenses.
3. Toray will not conduct arbitrary tax avoidance
using tax havens or other methods.
4. Toray establishes good relationships with the tax
authorities of each country.
Toray Industries, Inc.
Integrated Annual Report 2020
65
NECの品質データ基盤が目指すイメージ図
委託
加工先
品質分析
検査結果公開
お客様
サプライヤー
品質データ基盤
品質情報の集約①
委託加工先・
サプライヤー情報も連携
クレーム管理
情報連携
検査成績書
品質情報の集約②
グループ会社のデータ
も一元的に管理
自社
グループ
会社
検査
検査
Materials
change
our lives
Photo: Aozora Science School
In order to help children gain an interest in science, this program aims to have them enjoy a slightly unusual camp experience with a sense of excite-
ment. As a two-night three-day hands-on, overnight classroom, this program is flush with contents that use mother nature as learning materials to
instill a sense of curiosity that stirs up questions of how and why in the campers. Likewise, this program helps to create opportunities for the campers
to truly find an interest in science under an open sky that differs from what they see every day. (Campers in 2019)
Toray Industries, Inc.
Integrated Annual Report 2020
66
Toray Industries, Inc.
Integrated Annual Report 2020
67
Toray Industries, Inc.
Integrated Annual Report 2020
68
For Realization of a Circular EconomyUnder Toray Group Sustainability Vision, “a world where resources are sustainably managed” is one of perspectives of the world that we aim to realize by 2050. Society has so far faced various issues such as resource depletion, marine pollution from significant garbage inflow, and CO2 emis-sions. To solve these issues, Toray has positioned measures to realize a circular economy that effectively uses resources, as a key theme in “Project AP-G 2022.” Realizing a Circular Economy through Various Technologies and Products
Toray is contributing to the realization of “a world where resources are sustainably managed”—the so-called circular
economy—through various technologies in such areas as recycling of plastics, utilization of biomass in raw materials,
use of renewable and hydrogen energy, and reuse of water. For example, Toray is engaging in material recycling*1 and
recycling within our operating processes, which reuse plastic products such as fibers and textiles, resins, and films. In
addition, we have already produced nylon fiber products through chemical recycling*2 that turns unrecyclable plastics
into basic chemicals such as monomer and gas.
Furthermore, Toray is promoting the development of products made using plant-derived raw materials rather than
petroleum, and membrane-integrated biotechnology that effectively produces these raw materials. Moreover, Toray
technologies are being used in areas including materials for wind turbine blades that generate energy used in manu-
facturing processes, materials for equipment that produces hydrogen used to generate renewable energy, and water
treatment membranes for recycling wastewater.
*1 Material recycling: a recycling process that uses heat to convert used plastic bottles and remnants produced during manufacturing processes into yarn,
staple fiber, and other materials.
*2 Chemical recycling: a recycling process that breaks down through depolymerization used products and remnants produced during manufacturing processes
into monomers that are manufactured back into chips and then recycled into yarn, staple fiber and other materials.
Contribute to initiatives including biomass plastics, recycling, promoting of
renewable energy and the use of hydrogen, and water reuse
Raw material
Production
Use
Fossil
resources
Membrane-
integrated
biotechnology
Recycling within
operating processes, etc.
Toray
materials
(fibers & textiles,
resins,
films)
reuse
Use of plant-derived raw materials
(bio-PET, nylon raw material, etc.)
Biomass
Raw
material
pellets
used
plastics
PET (fibers & textiles, films), ABS resins
Nylon fiber products
Material recycling
Chemical recycling
Thermal recycling
Toray’s technologies related to energy
and water that supports a circular economy
Waste
Emission gas
(CO2)
Gas separation
membrane
Toray’s technologies,
products
Electric
power
from
renewable
energy
Hydrogen
from
renewable
energy
Water
treatment
Toray Industries, Inc.
Integrated Annual Report 2020
69
Using Biomass
Toray has developed processing technology that realizes energy and cost reductions by applying water treatment mem-
branes to the biomass saccharification process, which produces cellulosic sugar from non-edible biomass, and is oper-
ating a demonstration plant on a trial basis. Toray is pursuing the creation of supply chains that make practical use of this
process to manufacture materials and chemicals from non-edible biomass.
At the same time, Toray is mass producing partial bio-PET fiber, a biomass-derived fiber made from plant-based
ethylene glycol that is used to make such products as Ultrasuede® PX, a nonwoven material created using ultra-fine
fibers in an “island in the sea” configuration. At present, Toray has completed prototype production of 100% bio-PET
fiber at its demonstration plant, positioning it as a top-level environmentally friendly material mainly for sportswear and
automotive interior applications, and Toray aims for mass production as early as possible in the 2020s.
Saccharification
Conversion/
Refinement
Polymerization/
Polymer processes
Cellulosic
sugar
Bio-
chemicals
Fibers &
Textiles
Films
Resins
Biomass
(cellulose)
Membrane-integrated
saccharification process
A processing technology that realizes cost
reduction through energy-saving and recy-
cling by applying water treatment membranes
for the biomass saccharification process.
Biomass
MF
mem-
brane
UF
mem-
brane
NF
mem-
brane
RO
mem-
brane
Cellulosic
sugar
Installed demonstration plant for cellulosic
sugar production in Thailand, started proto-
type evaluation by customers.
Toray Industries, Inc.
Integrated Annual Report 2020
70
Partial
Bio-PET fiber
(already in mass production)
100%
Bio-PET fiber
• Completed prototype pro-
duction at the demonstra-
tion plant
• Positioning it as a top-level
environmentally friendly
material, started proto-
type evaluation mainly for
sportswear and automo-
tive interior applications
• Aim for mass production
in the 2020s
“Ultrasuede® PX,”a
nonwoven material
created using ultra-
fine fibers made
with plantbased raw
materials
Regeneration Type Recycling with ECOUSE™
The reuse of production process wastes and used plastic bottles as raw materials
is expected to reduce the use of fossil resources and reduce wastes
Collection
Sorting
Shredding
Cleaning
Pellets
Melting and
extrusion
Flakes
Inspection
Spinning
Apparel
Collection and Circulation Type Recycling with CYCLEAD™
Products and collection system originally designed for collection and recycling after use
Bio-
chemicals
Caprolactam
Polymerization
Synthesis
Refinement
Crude
caprolactam
Nylon 6
Sponning/
Weaving
Re-use of
materials after
depolymerization
Recovery of liquids
and waste from
production of Nylon 6
Fabrics and
products made
with Nylon 6
Pre-processing:
Metals and other foreign
substances are removed
Collection and
pre-processing
Sale
Users
Toray Saccharification
Conversion/
Refinement
Polymerization/
Polymer processes
Cellulosic
sugar
Bio-
chemicals
Fibers &
Textiles
Films
Resins
Biomass
(cellulose)
Partial
Bio-PET fiber
(already in mass production)
100%
Bio-PET fiber
Biomass
MF
mem-
brane
UF
mem-
brane
NF
mem-
brane
RO
mem-
brane
Cellulosic
sugar
Promoting Recycling
Toray is expanding its ECOUSE™ regeneration type recycling material and CYCLEAD™ collection circulation type
recycling system into a wide array of business fields including fibers and textiles, resins, and films. As for regenera-
tion type recycling, in fiscal 2019, Toray kicked into full gear advanced initiatives to recycle collected plastic bottles
to be used as raw materials for textiles and established the new textile business brand &+™ (And plus) with the
aim of realizing a sustainable society. As for collection circulation type recycling, Toray has developed its proprietary
material recycling system that collects and recycles used fiber and plastic, and is leveraging this system to pursue
initiatives in this field.
Regeneration Type Recycling with ECOUSE™
The reuse of production process wastes and used plastic bottles as raw materials
is expected to reduce the use of fossil resources and reduce wastes
Collection
Sorting
Shredding
Cleaning
Pellets
Melting and
extrusion
Flakes
Inspection
Spinning
Apparel
Collection and Circulation Type Recycling with CYCLEAD™
Products and collection system originally designed for collection and recycling after use
Bio-
chemicals
Caprolactam
Synthesis
Refinement
Polymerization
Crude
caprolactam
Nylon 6
Sponning/
Weaving
Re-use of
materials after
depolymerization
Recovery of liquids
and waste from
production of Nylon 6
Fabrics and
products made
with Nylon 6
Pre-processing:
Metals and other foreign
substances are removed
Collection and
pre-processing
Sale
Users
Toray Industries, Inc.
Integrated Annual Report 2020
71
Toray Fibers & Textiles
The New &+™ Fiber Brand Made from Recycled Plastic Bottles
Previously, plastic bottle derived-fibers were limited in variety due to contaminants mixed into raw materials, which
made it difficult to produce special cross-sections and fine fibers, as well as issues posed by fiber whiteness being
impaired by yellowing from plastic bottle degradation. In response, Toray together with Kyoei Industry Co., Ltd. devel-
oped contaminant filtering technology and advanced plastic bottle cleaning techniques to stabilize the supply of raw
materials that are impurity-free. Combining these technologies with Toray’s fiber production technology, it is possible to
achieve diverse fabric applications with a degree of whiteness equivalent to fibers materials made directly from petro-
leum source. Moreover, Toray has commercialized its highly reliable polyester fiber under the &+™ brand by incorpo-
rating its proprietary traceability technology that can detect special additives premised in with plastic bottle-based raw
materials. Full-scale sales of the &+™ products started in January 2020, and Toray targets sales of over ¥50 billion in
2025 by expanding the scope of sales by leveraging various supply chains (extending from yarn and staple fiber through
to textiles and garments) and global production bases.
CLEAN
RECYCLING
TRACEABILITY
AUTHENTICITY
Promoting Recycling with UNIQLO
Together with UNIQLO CO., LTD., Toray is promoting new initiatives for sustainable products, with Toray supplying
&+™ fibers made from recycled plastic bottles for UNIQLO’s quick-drying wear DRY-EX brand polo shirts starting
in 2020.
In addition, UNIQLO stores are collecting used down items from customers to recycle the feathers. Conventionally,
the stuffing in duvets and other objects incorporating down is manually removed. Such processes are arduous with
Ultra Light Down items because of their thin outer fabric and complex construction. By developing special extraction
machinery, Toray has fully automated cutting, stirring and separating, and recovery, for 50-fold the process capacity of
manual processes, thus greatly alleviating workloads. Toray and UNIQLO are jointly developing new recycling-based
down products from recycled feathers.
Toray Industries, Inc.
Integrated Annual Report 2020
72
Plastics
Air Conditioner Material Recycling
Toray provides recycled plastics using its proprietary
processing design using remnants produced within
production processes and materials derived from used
products. Teaming up with customers, Toray has also
developed a material recycling system that recycles
fans inside used air conditions collected under Japan’s
Act on Recycling of Specified Kinds of Home Appliances
into new fans. Fans installed in indoor air conditioners
use glass fiber-reinforced acrylonitrile-styrene resins,
and Toray’s unique collection and foreign substance
removal system and materials blending method solve
such problems as contamination and glass breakage
during recycling as well as realize physical properties
nearly equivalent to virgin materials.
Used air conditioner (indoor unit)
New air conditioner (indoor unit)
sorted,
shredded
Indoor unit fan
Indoor unit fan
• Cleaning • Metal removal
• Shredding • Pelletize
Virgin
ASG pellets
recycling
pellets
recycling
New air conditioner (outdoor unit)
Outdoor unit fan
Film
Building Release Film Collection System
Currently, PET release films are mainly disposed or thermally recycled because of the difficulties associated with
removing coating materials and resin used at each stage of the supply chain. Building a release film collection system,
Toray aims to make use of the recycled films to fibers, films and other Group materials.
Recycle to other products
From film to film
Toray
Converter
Converter
End
user
Toray
End
user
Other
products
Toray
Collection
Reuse
Collection
Toray
Carbon Fiber
Carbon fiber is viewed as an important contributor to solving global environmental problems, as its lightweight prop-
erties significantly reduce CO2 emissions over the entire lifecycle of products in which it is used. As a result, demand
for carbon fiber is expanding across a wide range of applications, including aircraft and automobile parts. In conjunction
with the growing demand, market expectations for the development of carbon fiber recycling technologies are rising.
Teaming up with Toyota Tsusho Corporation, Toray in July 2017 began operating pilot plant built at a facility run by
Toyota Tsusho’s subsidiary Toyota Chemical Engineering Co., Ltd. in order to field test energy-efficient, recycled carbon
fiber manufacturing technology. Toray is pursuing the development of recycled carbon fiber applications with an eye
towards commercialization.
Toray Industries, Inc.
Integrated Annual Report 2020
73
Advanced Business Management by Utilizing Digital Technologies
The Group-wide Effort to Promote Digital Transformation
A key focus in “AP-G 2022” is promoting advancements in management through digital transformation (DX), which
will strengthen competitiveness and transform business through the effective use of data and digital technologies.
In order to facilitate reviews and discussions regarding group-wide efforts to promote DX, Toray established the TDX
Promotion Committee, and under that the Technology Center DX Promotion Committee and the Business Division DX
Promotion Committee. The Company is advancing the group-wide TDX Promotion Project in addition to conventional
departmental initiatives.
Toray Digital Transformation
(TDX) Promotion Committee
Examples of DX Initiatives
Technology Center
DX Promotion Committee
Drive advancement and streamlining by leveraging digital
technology in research and technological development
(R&D), and production
Business Division
DX Promotion Committee
Visualize global management information in sales & market-
ing, finance & accounting, and purchasing & logistics, and
advance business management
Research and Technological Development: Research of advanced materials through
Digital Monozukuri (manufacturing)
Research and development used to require a great deal of trial and error, but efficiency has been greatly improved
thanks to simulations and materials informatics, which make the best use of theoretical calculations and data science.
Development images can be shared with customers through prototype systems using VR and 3D printers to achieve
optimal designs that are consistent from the initial target settings.
Accelerate research and development
through simulation and informatics
Simulation
Informatics
optimum design
In-house data base
data collection
t e c h n o l o g y
t r i a l
i n - h o u s e
i o n
e v a l u a t
f u n d a m e n t a l
t e c h n o l o g y
Setting
goals
m a s s
p r o d u c t
i o n
c u s t o m e r
i o n
e v a l u a t
Market
launch
VR
3D printer
Share the image of products and
development with customers
Toray Industries, Inc.
Integrated Annual Report 2020
74
Substantially improve the detection of defects with AI technology
Defect detection camera
Image data
defects
AI
pass
shipment
failure
scrap
Labor productivity
improvement
with an automation system
Warehouse
Reader
Pallets incorporating
active tags
Streamlining logistics by tracking pallet
inventory information online
Office PC
Automatic inventory control and
warehouse management
Advanced Business Management by Utilizing Digital Technologies
Toray was selected for “Digital Transformation Stocks (DX
Stocks) 2020” by the Ministry of Economy, Trade and Industry
(METI) and the Tokyo Stock Exchange, as a company actively
engaged in DX efforts.
Production: Automatic monitoring system utilizing AI technology
AI-based image recognition technologies
are used to replace visual-based monitoring
Substantially improve the detection of defects with AI technology
and inspection work previously carried out
Defect detection camera
by individual employees. This has contrib-
uted to a sharp reduction in man-hours and
the prevention of abnormalities and defects.
We are working to improve productivity by
increasing the number of successful cases
in which we apply AI technologies in pro-
duction operations at each of our plants.
Image data
defects
AI
pass
shipment
failure
scrap
Labor productivity
improvement
with an automation system
Sales: Holding on-line exhibitions of apparel textiles
With many textile companies forced to cancel their exhibitions due to the COVID-
19 pandemic, Toray was able to hold an online exhibition of its spring and summer
textiles for men’s and women’s clothing for about 10 days. Materials attracting
attention, including Kinari™, were divided into five concept categories, with 73
carefully selected products offered. Orders were accepted online with samples
quickly delivered. The online exhibition attracted 652 visitors and won praise as
among the first in the industry in using the Internet to select materials.
Accelerate research and development
through simulation and informatics
Simulation
Informatics
Logistics: Streamlining logistics by adopting labor-saving pallets with active tags
optimum design
In-house data base
data collection
m a s s
p r o d u c t
i o n
c u s t o m e r
e v a l u a t
i o n
Market
launch
t e c h n o l o g y
t r i a l
i n - h o u s e
e v a l u a t
i o n
f u n d a m e n t a l
t e c h n o l o g y
Setting
goals
VR
3D printer
Share the image of products and
development with customers
Toray is an industry leader in introducing the Smart
Pallet®* pallets equipped with the active RFID tags of
UPR Corporation to transport resin products in Japan.
Without the need of manual inventory count, the sys-
tem automatically keeps track of the number of pallets
at the shipping source and makes it possible to use
forklifts to load and unload pallets not only within the
Company but also at each stage from the delivery com-
pany to the customer’s location, thus greatly reducing
the burden of labor on women and the elderly.
* The Smart Pallet® was jointly developed by UPR Corporation and NTT
Corporation. Its active tag uses technology that is state of the art and
can transmit data to a reader up to 300 meters away. Smart Pallet® is a
registered trademark of UPR Corporation.
Warehouse
Reader
Pallets incorporating
active tags
Streamlining logistics by tracking pallet
inventory information online
Office PC
Automatic inventory control and
warehouse management
Toray Industries, Inc.
Integrated Annual Report 2020
75
risk management
Basic Approach
Toray Group regularly identifies potential management
the Corporate Planning Division (Executive Vice President),
tasking it with reviewing, discussing and promoting shared
risks affecting the Group’s management activities in
awareness of risk management across the entire Toray
order to mitigate risks and seeks to prevent a crisis.
Group. This committee primarily carries out priority risk
In addition, the Group strives to prevent damage from
mitigation activities as part of regular risk management.
spreading and to promptly control and normalize the situ-
In addition, the Overseas Crisis Management Committee
ation by ensuring quick and appropriate responses using
and Local Crisis Management Committees, which man-
the emergency quick response system it has established.
age employees’ overseas travel under normal condi-
Structure
The risks affecting Toray Group are constantly changing,
tions and compile information on overseas risks, have
also been made subordinate to the Risk Management
Committee. Matters deliberated at and reported by the
and the Group gives critical importance to reinforcing its
Risk Management Committee are periodically reported
system for responding to risks that materialize suddenly
to the Board of Directors.
due to changes in the surrounding environment and for
responding promptly when crises do occur. To this end,
in April 2018, Toray established a dedicated organization
to communicate closely with the Board of Directors and
Strengthening the Emergency Quick
Response System
top management and to pursue risk management as an
Toray Group has established Risk Management Regulations,
integral part of the management strategy. This organiza-
a set of clear fundamental principles that form the basis of
tion manages overall risk under normal conditions and
a company-wide response in the event of a major crisis.
ensures a quick response when crises do occur.
The Group works to ensure the thorough implementa-
The General Manager of the Corporate Strategic
tion of these rules when required. Moreover, the Group
Planning Division periodically reports on the progress
reviews the rules as appropriate to prepare for new risks
of risk management to the Board of Directors, and also
that emerge due to changes in the social environment.
reports on important emergency matters whenever
In order to ensure quick management decisions espe-
such occur to the Board of Directors without fail.
cially in the event of a crisis, Toray Group has clarified the
Establishment of Risk Management
Committee
reporting channel from a department where a crisis has
occurred, covering group companies in and outside of Japan.
In recognition of the fact that serious risks associ-
ated with employees’ health and safety, as well as with
In May 2018, Toray established the Risk Management
business continuity, have grown dramatically following
Committee, which is chaired by the General Manager of
the emergence of COVID-19, the Group established a
Risk Management System (After June 2019)
Risk Management Committee
Chairperson: Corporate Strategic Planning General manager
(Executive Vice President)
Company-wide Countermeasures Headquarters, for
which the Executive Vice President (Representative
Member of the Board) serves as chief, on February 7,
2020, based on the mechanisms of this Emergency Quick
Response System. The Company-wide Countermeasures
Headquarters has taken the lead on implementing the
Directions on
information measures
Activity
reports
Directions
Reporting
following measures in light of infection prevention instruc-
Priority Risk Mitigation Activities
Divisions and Departments
responsible for
Priority Risk Mitigation
Overseas Crisis
Management Committee
tions and requests made by the countries and local gov-
ernments where the Group’s business sites are located.
• Plan and execute measures to protect the safety of
Directions
Reporting
employees
Toray Industries, Inc. and
its group companies in and
outside Japan
Local Crisis Management
Committees in each
country and region
• Ascertain the health of employees in each coun-
try, including Japan, and make an appropriate
response when an employee becomes infected
• Provide appropriate support for domestic and
overseas group companies, etc.
Toray Industries, Inc.
Integrated Annual Report 2020
76
Risk Management Initiatives
1. Periodic risk management (priority risk mitigation
activities)
annual activities for Toray Group overall are reported to
the Risk Management Committee every year, and the
status of progress status is monitored. Toray discusses
Toray Group exhaustively identifies group-wide risks
and establishes an annual activity plan for the next fis-
(climate change, natural disasters, legal violations,
cal year that addresses the monitoring results and any
scandals, etc.) and identifies important risks after
new risks that have materialized due to changes in the
carrying out an assessment to determine the relative
environment.
importance of each risk. Ultimately, priority risks are
determined after consulting with the Risk Management
Committee.
Priority risks are addressed with risk mitigation
2. Routine risk management (monitoring trends in
and outside Japan, identifying, assessing and
monitoring risks)
activities following the PDCA cycle over a three-year
Toray routinely monitors domestic and overseas trends
period. In the priority risk mitigation activities for the
and identifies risks that could have a major impact on
fourth cycle (fiscal 2018-2020), Toray set quality man-
Toray Group’s management. When such risks are iden-
agement, earthquake response, information manage-
tified, the Company promptly develops a company-wide
ment and socially responsible procurement, among
system to address them and takes the necessary group-
others, as its priority risks. These efforts extend to the
wide countermeasures.
Group overall, including group companies in and out-
side Japan.
Toray assigns a department responsible for each
3. Response in the event of a crisis
Based on the Risk Management Regulations, a com-
priority risk and integrates group-wide activities using a
pany-wide quick response system
(Company-wide
three-year road map for risk mitigation activities as well
Emergency Headquarters) is formed to respond to the
as an annual activity plan. In addition, the results of the
crisis that has occurred.
Emergency Quick Response System
President
Propose establishment of Emergency Headquarters
General Manager of Corporate
Strategic Planning Division;
Leader of Risk management
Group, Corporate Strategic
Planning Division
Officials responsible
when emergency
occurs
(Heads of divisions
and departments)
First report
• Report from department where crisis occurred
• Media Coverage
• Accusations and misinformation from external
organizations, etc.
Company-wide Emergency
Headquarters
Chief
Sub chief
Staff
Secretariats
(Overall Secretariat: Corporate Strategic
Planning Division; Head of Secretariat:
General Manager of Corporate Strategic
Planning Division)
Emergency press
releases
On-site emergency headquarters
(Emergency headquarters of each
office, plant, and company/country)
Supporting
plants
Chief
Staff
Secretariats
Notification to relevant divisions
Toray Industries, Inc.
Integrated Annual Report 2020
77
Risk Management
Business Risks
Operational and other risks faced by Toray Group that could
carrying out global operations, Toray Group is striving to
build a management structure that is well-shielded from
have a major influence on the decisions of investors are
the impact of exchange rate fluctuations. Moreover,
described below. Toray Group works constantly to avoid
Toray Group works to gather information regarding cur-
such potential risks, minimize their impact, and build a sys-
rency movements in each country (region), while at the
tem to enable swift responses and accurate information
same time monitoring the exchange rate exposure of
disclosure on the occurrence of unforeseen situations.
group companies and their hedge position as part of its
Please note that the risks described below are not all of
efforts to mitigate currency exchange risk.
those identified by Toray Group, and do not represent all the
operational and other risks that could affect Toray Group.
Addressing Risks Related to Overseas Operations
Toray Group is developing a broad geographical pres-
• Domestic and overseas demand and product
ence, with operations in various countries/regions such
market trends
as Asia, Europe and the U.S.A. Some of the major
• Rising prices of fuel and raw materials
potential risks associated with various regions are sum-
• Capital expenditures, joint ventures, alliances and
marized below. If such risks were to become reality,
acquisitions, etc.
Toray Group’s results of operations and financial condi-
• Fluctuations in foreign currency, interest rate, and
tions could be negatively affected.
the securities market
• Changes in assumptions on which forecasts are
(1) Unforeseen introduction, changes or abolition of
based that might affect employee retirement
laws and regulations, such as changes in taxation
benefit obligations and deferred tax assets
systems and tariffs which affect adversely
• Overseas operations
• Product liability
• Lawsuits
• Laws and regulations, taxes, competition poli-
cies, and internal controls
• Natural disasters and accidents
• Information security risks
• Environmental issues
• COVID-19
Addressing Fluctuations in Exchange Rates
Foreign currency exchange rate fluctuations affect
(2) Unforeseen, disadvantageous economic or polit-
ical events
(3) Social upheaval, including acts of terror and war
When making decisions regarding investments related
to the overseas operations, Toray Group collectively
considers and carefully investigates the investment
country (region) in terms of the current and long-term
outlook for the political, economic, and social climate,
the organizational status of the legal system, and the
development status of the regional economic sphere.
During the investment execution period, Toray Group
also references the execution plan (progress schedule),
Toray Group’s consolidated financial statements when
which integrates the local political, economic, security,
the financial statements of the overseas operations
and legal system related risk items, that was formulated
presented in local currencies are translated into yen.
when the investment decision was made, and makes
Toray Group takes measures, such as entering for-
periodic follow-ups regarding the progress status of the
ward exchange contracts, to alleviate risks associated
project. Moreover, once the investment project is com-
with transactions denominated in foreign currencies.
pleted, the latest information for each region is acquired
However, unforeseen exchange rate fluctuations could
and information related to country risk, including safety
have an impact on Toray Group’s results of operations
issues, is shared throughout the Group.
and financial conditions.
In response to currency rate fluctuations, Toray
Group utilizes its strength of maintaining business bases
throughout the world while encouraging local produc-
tion for local consumption. At the same time, by flexibly
Toray Industries, Inc.
Integrated Annual Report 2020
78
Addressing Major Earthquakes
Toray Group maintains a business continuity plan (BCP)
Based on these regulations, the Company established
the Group-wide
Information Security Management
in case of a major earthquake, which has been identified
Director as the officer responsible for the entire Group.
as a priority risk to address.
The Group-wide Information Security Management
Toray Group has established a basic policy for ensur-
Director discusses and coordinates measures related to
ing business continuity in the event of a major earth-
enhancing information security with the related depart-
quake. Namely, Toray Group prioritizes the safety of its
ments, and promotes the deployment of such. Under
employees and preventing any impact on the local com-
the Group-wide
Information Security Management
munity, strives to prevent the further spread of damage
Director, the Group is working to enhance information
and the event of secondary disasters, continues to sup-
security by defining the roles and responsibilities of
ply key products and works toward a rapid recovery of
each division and department, and by establishing an
business operations, and fulfills its social responsibility
Information Security Committee in each department to
to continue supplying products. As part of this process,
promote these.
Toray Group continues to conduct evacuation drills in
In terms of the electronic information security sec-
the event of an earthquake, make systematic quake-re-
tor, which has been faced with growing risk of late, the
sistant upgrades to plant buildings, and draft BCPs.
Group formulated the Electronic Information Security
In fiscal 2019, domestic and overseas group compa-
Standards based on the Confidential
Information
nies also created and began implementing BCPs for key
Management Regulations in order to appropriately man-
products selected from each business in accordance
age intellectual property and to implement measures
with the procedures for developing BCPs for designated
designed to prevent information leaks.
priority products in an earthquake.
Moreover, each group company formulates basic
In addition, Toray Group has conducted drills to
rules in accordance with Toray’s regulations and stan-
establish a temporary group-wide headquarters based
dards, and promotes measures related to information
on a scenario involving a large-scale earthquake every
security.
year since fiscal 2012. Going forward, Toray Group will
Along with thoroughly implementing and enhanc-
continue to enhance its ability to respond in the event of
ing existing initiatives, such as standardizing and auto-
an earthquake through such drills.
mating computer settings and security measures, the
Addressing Information Security Related Risks
Toray Group’s information systems and networks are
Group is taking steps that include analyzing and moni-
toring the content of communications.
Simply taking steps against increasingly sophisti-
fundamentally essential elements in the execution of
cated cyber-attacks from the stance of IT is insufficient,
the Group’s business operations and every security
however, so the Group also enhances education and
precaution is taken in their development and opera-
training initiatives, which include conducting suspicious
tion. However, if such an incident as a work stoppage,
e-mail response training for all employees.
a loss of trust in the Group, and a leak of confidential
In addition to providing information security educa-
information were caused by unauthorized access, data
tion for all employees on an annual basis, the Group
alteration, theft or deletion, an interruption of system
conducts training specified for employees at different
operations, or any other information security threats,
levels, including new employees and newly appointed
Toray Group’s earnings and financial conditions could be
managers, in aims of improving security awareness and
negatively affected.
skill-levels.
Toray formulated its Confidential Information
Before removing a computer or smartphone from
Management Regulations and Regulations for the
an office, for example, employees must receive per-
Management of Personal Information for the purpose of
mission from a manager, and the actual device must
protecting confidential information and personal informa-
be inspected monthly. Moreover, the Group has estab-
tion owned by the Company, and of appropriately manag-
lished approaches to dealing with the loss of such
ing the confidential information and personal information
devices and other similar incidents, and has built mech-
entrusted by suppliers and stored by the Company.
anisms to minimize damage thereof.
Toray Industries, Inc.
Integrated Annual Report 2020
79
TCFD-related initiatives
Support for the TCFD Recommendations
One of Toray’s goals is to be a corporate group playing an
The expansion of our Green Innovation business, which
contributes to the resolution of global environmental prob-
active role in protecting the environment. With that in mind,
lems as well as energy and resource issues, is led on a
the entire Group is committed to creating innovative tech-
company-wide basis by the Global Environment Business
nologies and advanced materials that provide the essential
Strategic Planning Department, which operates under the
solutions to global environmental issues. The Group is also
control of an Executive Vice President (Representative
focused on reducing environmental impacts throughout the
Member of the Board).
entire global supply chain, including at the production stage.
In regard to reducing emissions at the production stage,
In May 2019, Toray declared its support for the Task Force
under the leadership of the Corporate Vice President, General
on Climate-related Financial Disclosures (TCFD) recom-
Manager of the Engineering Division, our goal is to reduce
mendations, and has been actively disclosing our progress
greenhouse gas emissions and water consumption per unit
toward meeting our climate change-related targets, as well
of sales by 30% compared to fiscal 2013 by fiscal 2030.
coal
coal
as information regarding our Green Innovation business,
research and technological development, and other topics.
URL: https://www.toray.com/sustainability/tcfd/
Toray Group Efforts in Response to
Climate Change
Governance System
Three group-wide committees—the CSR Committee,
In the Toray Group Sustainability Vision, Toray Group
describes four perspectives of the world it envisions
the Risk Management Committee, and the Safety,
for 2050, including a “net zero emissions world, where
Health, and Environment Committee—monitor, eval-
greenhouse gas emissions are completely offset by
uate, and manage social challenges, including climate
absorption,” and also sets out issues to be addressed
change, and the associated risks at Toray Group. Under
to achieve this and quantitative targets for fiscal 2030.
this structure, the Board of Directors receives reports
on committee discussions, overseeing committee prac-
tices and making decisions. In addition to this structure,
the Global Environment Business Strategic Planning
FY 2013 Actual
(baseline year)
(J-GAAP)
FY 2030 Targets
(compared to
FY 2013) (IFRS)
GR Net sales, Revenue
463.1 billion yen
4 fold
Department reports on global environmental initiatives
LI Net sales, Revenue
119.6 billion yen
6 fold
and presents proposals for expanding Green Innovation
businesses at meetings attended by the Board of
Directors twice a year.
CSR
Committee
Risk
Management
Committee
Safety,
Health, and
Environment
Committee
Chaired by the Chief CSR Officer (Corporate
Vice President), this committee discusses CSR-
related issues centered on ESG and promotes
Toray Group CSR-related activities. (Meeting
held once a year)
Chaired by the General Manager of the Corporate
Strategic Planning Division Executive Vice
President (Representative Member of the Board),
this committee discusses critical risks that
may affect Toray Group operations, including
climate change, and promotes Toray Group risk
management. (Meeting held once a year)
Chaired by the General Manager of the
Manufacturing Division (Senior Vice President),
this committee discusses Toray Group policies
and measures related to safety, health, accident
prevention, and the environment and promotes
Toray Group safety, health, accident prevention,
and environmental activities, including the reduc-
tion of greenhouse gas emissions. (Meeting
held once a year)
Avoided CO2 emissions
40 million tons
8 fold
Contributed annual water
filtration throughput
27.23 million
tons/day
3 fold
Greenhouse gas emissions
per unit of sales, revenue in
production activities
33.7 tons/
billion yen
30%
reduction
Water consumption per unit of
sales, revenue in production
activities
1,520 tons/
billion yen
30%
reduction
Reducing Emissions at the Production
Stage
Numeric targets for achievement by 2030 in the Toray
Group Sustainability Vision include reducing in greenhouse
gas emissions and consumption per unit of sales by 30%
compared to fiscal 2013, which we aim to achieve through
the launch of the company-wide “Challenge 30 Project*.”
We have also formulated and implemented specific action
plans with the goal of reducing CO2 emissions at the
Toray Industries, Inc.
Integrated Annual Report 2020
80
• Implement regular energy-saving activities with stronger cooperation between sites in and outside Japan, and
Challenge
30 Project
adopt successful case studies across the Group
• Reduce usage of coal by increasing the usage of biomass fuels etc.
• Promote wastewater recycling, etc. with Toray Group’s water treatment technologies
Reduction of GHG emissions
Reduction of water usage
sewage
sludge
construc-
tion
waste
manufac-
turing
process
waste-
water
storage
waste-
water
treatment
Wastewater
treatment
plant
(external facility)
in-house boiler
mixed
combustion
in-house boiler
Conventional
Expand use of biomass fuels
Wastewater recycling in plants
water quality adjustment
Toray’s technology
Sludge/
Brine water
Promote R&D of various products for the realization of a low-carbon circular economy
Production
Transportation, Storage
Use
Electricity from Wind Power,
Solar Power, etc. (renewable)
Electrolyzer
Hydrogen
Gas
Hydrogen
Compressor
Hydrogen Gas
Station
Hydrogen
Gas
Fuel Cell Vehicles
(including Range Extender (REX) type)
・Polymer Electrolyte Membrane,
CCM, MEA
・Carbon Paper, GDL
・Polymer Electro
-lyte Membrane
・CCM, MEA
・Carbon Fiber for Tanks,
Plastic Liner
・CP, GDL
・CCM, MEA
・Polymer Electrolyte
Membrane
・Carbon Fiber for Tanks,
Plastic Liner
Natural Gas
Reforming
Hydrogen
Purifier
Hydrogen Gas
Tank
Household, Stationary Fuel Cell
Toray products & developing products
CP: Carbon Paper, GDL: Gas Diffusion Layer, CCM: Catalyst Coated Membrane, MEA: Membrane Electrodes Assembly
production stage, including through the reduced use of
coal, enhanced use of renewable energy, and reduced
energy consumption through process improvements.
* The Challenge 30 Project is the successor to the in-house project
Challenge 25, focused on Toray and its domestic affiliated companies.
The project, expanded and promoted on a group-wide basis, adds a focus
on water utilization and includes overseas affiliated companies.
• Implement regular energy-saving activities with stronger cooperation between sites in and outside Japan, and
Challenge
30 Project
adopt successful case studies across the Group
• Reduce usage of coal by increasing the usage of biomass fuels etc.
• Promote wastewater recycling, etc. with Toray Group’s water treatment technologies
Reduction of GHG emissions
Reduction of water usage
coal
coal
sewage
sludge
construc-
tion
waste
manufac-
turing
process
waste-
water
storage
waste-
water
treatment
Wastewater
treatment
plant
(external facility)
in-house boiler
mixed
combustion
in-house boiler
Conventional
Expand use of biomass fuels
Wastewater recycling in plants
water quality adjustment
Toray’s technology
Sludge/
Brine water
Research and Development to Realize a
Hydrogen-based Society
production, transport, storage, and utilization of hydro-
gen. As an example, in the field of polymer electrolyte
fuel cells, which are used in fuel cell vehicles, Toray is
The “AP-G 2022” plan aims to invest ¥220 billion in
upgrading production facilities for catalyst coated mem-
research and development for large-scale themes over
branes (CCM) and membrane electrode assemblies
the three years from fiscal 2020 to fiscal 2022. Half of
(MEA), which are considered core components. Through
that amount is allocated to the Green Innovation busi-
the supply of these products and the development of
ness, with one of the key themes being the promotion
their technologies, Toray aims to contribute to the real-
of research and technological development in hydro-
ization of technologies for the manufacture and utiliza-
gen and fuel-cell materials. Toray is expanding its busi-
tion, including in infrastructure, of hydrogen, and the
ness through R&D in numerous products used in the
creation of a sustainable low-carbon circular economy.
Promote R&D of various products for the realization of a low-carbon circular economy
Production
Transportation, Storage
Use
Electricity from Wind Power,
Solar Power, etc. (renewable)
Electrolyzer
Hydrogen
Gas
Hydrogen
Compressor
Hydrogen Gas
Station
Hydrogen
Gas
Fuel Cell Vehicles
(including Range Extender (REX) type)
・Polymer Electrolyte Membrane,
CCM, MEA
・Carbon Paper, GDL
・Polymer Electro
-lyte Membrane
・CCM, MEA
・Carbon Fiber for Tanks,
Plastic Liner
・CP, GDL
・CCM, MEA
・Polymer Electrolyte
Membrane
・Carbon Fiber for Tanks,
Plastic Liner
Natural Gas
Reforming
Hydrogen
Purifier
Hydrogen Gas
Tank
Household, Stationary Fuel Cell
Toray products & developing products
CP: Carbon Paper, GDL: Gas Diffusion Layer, CCM: Catalyst Coated Membrane, MEA: Membrane Electrodes Assembly
Risk Management Initiatives
Because Toray’s business is so diverse in terms of products
and climate change-related applications. For assumptions
regarding environmental changes through 2050, we will refer-
and their applications, we are looking to focus our risk and
ence the reports from the International Energy Agency (IEA)
opportunity analysis on product groups with strong revenue
and the Intergovernmental Panel on Climate Change (IPCC).
Toray Industries, Inc.
Integrated Annual Report 2020
81
ENVIRONMENTAL MANAGEMENT INITIATIVES
Promoting Life Cycle Management
In addressing global environmental issues, it is vital to con-
sider the entire life cycle of products and services in order to
reduce environmental impact while also delivering improved
economic and social value. In this respect, Toray Group prac-
tices life cycle management (LCM). LCM is the basis for
Green Innovation products, and the Group has adopted life
cycle assessment*1 and the Toray Eco-Efficiency Analysis
(T-E2A)*2 tool and is working to establish LCM as a tool to
measure CO2 reduction in the entire life cycle of products
and services. Those products that are able to demonstrate
objective evidence of providing an effective solution for
global environmental issues are certified as Green Innovation
products, only after the products are subjected to a two-
stage screening process by the divisional committees and
the group-wide Green Innovation Certification Committee.
*1 Life cycle assessment is a method for quantitatively assessing the
resources that have gone into a product and the impact the product will
have on the environment and ecosystems over its life cycle.
*2 T-E2A is an environmental analysis tool developed by Toray Industries,
Inc. It produces a map of multiple products plotted along the axes of
environmental impact and economic performance, enabling users to
select the most environmentally friendly and economical products.
Toray’s Life Cycle Management Approach
Analysis &
assessment
Life cycle
assessment
(LCA)
Product assessment
in terms of
environmental
aspects
Life cycle cost
(LCC)
Product assessment
in terms of
economic aspects
Environmental
assessment tools
Environmental
contribution
indicators
CO2 emissions reduction
due to adoption of Green
Innovation products
Assessment of the total
reduction of CO2
attributable to Toray’s
Green Innovation products
over their entire life cycle
Eco-efficiency
analysis
T-E2A
Product assessment
in terms of
environmental and
economic aspects
Environmental Accounting
Toray has been practicing environmental accounting
since 1999, to track investments and gauge their cost
effectiveness.
Environmental Facility Investment and
Environmental Preservation Costs
(Billion yen)
8
6.56
6.71
Environmental Facility Investment
Environmental Preservation Costs
7.13
6.98
6.81
6
4
2
0
2.70
2.68
2.02
1.26
1.31
(FY)
2015
2016
2017
2018
2019
Addressing Climate Change
Reduction of greenhouse gas emissions per
unit of sales (compared to fiscal 1990)
31.8% reduction
Toray has established “Reducing more than 15% below
the fiscal 1990 level, and maintaining that level until fiscal
2020” as its goal for reducing greenhouse gas emissions,
and the Company is continuing to implement its targeted
measures aimed at reducing emissions. In fiscal 2019, the
Company reduced CO2 emissions by 95,000 tons com-
pared to the previous fiscal year. Toray has continued to
meet its target for reduced emissions, with greenhouse
gas emissions dropping 4.8% year-on-year to 1.86 million
tons, which was a 27.1% reduction compared to fiscal
1990. While expecting increased production moving for-
ward in line with an expansion in its business, the Company
will continue to implement measures designed to ensure
that it meets its reduction target until fiscal 2020.
With the goal of reducing greenhouse gas emissions by
fiscal 2020 on a per unit of sales basis by 15% compared
to the fiscal 1990 level, Toray and its group companies in
Japan are committed to curbing climate change. Emissions
of greenhouse gas by Toray and its group companies were
down 5.6% in fiscal 2019 compared to the previous fiscal
year. Greenhouse gas emissions per unit of sales improved
2.1 points compared to the previous fiscal year and were
31.8% below the level shown in the base year.
Fiscal 2019 greenhouse gas emissions for Toray Group
worldwide were 5.76 million tons-CO2 equivalent, up 2.3%
compared to the previous fiscal year. All Toray Group man-
In fiscal 2019, the Company’s environmental facility
ufacturing companies and plants will work to achieve the
investment amounted to 1.31 billion yen, up 50 million
Group’s goal of reducing the per-unit energy consumption
yen compared to the previous fiscal year. Environmental
rate* by 2% each fiscal year and strive to reduce green-
preservation costs totaled 7.13 billion yen, up 0.15 billion
house gas emissions throughout the Group.
yen compared to the previous fiscal year.
*Energy consumption per converted unit of production volume
Toray Industries, Inc.
Integrated Annual Report 2020
82
Environmental Facility Investment and
Environmental Preservation Costs
(Billion yen)
Environmental Facility Investment
Environmental Preservation Costs
6.81
6.98
7.13
6.56
6.71
2.70
2.68
2.02
1.26
1.31
(FY)
2015
2016
2017
2018
2019
8
6
4
2
0
Toray’s Life Cycle Management Approach
Analysis &
assessment
Life cycle
assessment
(LCA)
Product assessment
in terms of
environmental
aspects
Life cycle cost
(LCC)
Product assessment
in terms of
economic aspects
Environmental
assessment tools
Environmental
contribution
indicators
CO2 emissions reduction
due to adoption of Green
Innovation products
Assessment of the total
reduction of CO2
attributable to Toray’s
Green Innovation products
over their entire life cycle
Eco-efficiency
analysis
T-E2A
Product assessment
in terms of
environmental and
economic aspects
Energy Conservation Measures
Energy Consumption (year-on-year)
4.0% decrease
Management of Air Quality
For fiscal 2019, the Toray Group as a whole reported a
27% decrease in sulfur oxide (SOx) emissions compared
to the previous fiscal year, but increases of 6% in nitrogen
oxide (NOx) and 32% in dust emissions. SOx emissions
Toray is vigorously working on energy conservation activ-
improved thanks to the use of low-sulfur coal at over-
ities with the goal of reducing its per unit energy con-
seas affiliated companies, while NOx and dust emissions
sumption by 2% annually. In fiscal 2019, the Company’s
increased due to increased production at certain plants.
energy consumption was down 4.0% year-on-year due
mainly to decrease in production volumes at some of
its plants. Meanwhile, its per-unit energy consumption
Management of Water Resources
Through its water treatment business, Toray Group has
deteriorated 3.1% year-on-year (14.1% improvement
been working to resolve water resource issues around
compared to fiscal 1990 base year) as the ratio of fixed
the world. We are also working to appropriately manage
energy which do not contribute to production increased,
and make effective use of water in our own business
due to lower production volumes.
activities by promoting its recycling and reuse. When
Voluntary Initiatives to Reduce Atmospheric
Emissions of Chemical Substances
Atmospheric Emissions of PRTR Law-specified
Substances (compared to fiscal 2000)
73% reduction
VOC Atmospheric Emissions
(compared to fiscal 2000)
76% reduction
taking in and using water resources, we strive to fol-
low the 3Rs (reduce, reuse, and recycle), and check the
quality of water before discharging it into public water
areas. In particular, overseas affiliated companies oper-
ating in drought areas are recycling cooling water and
effluent water as they work to reduce industrial water
consumption. In fiscal 2019, Toray Group used 230 mil-
lion tons of water, about the same as in the previous
fiscal year. Compared to the amount used per unit of
sales in fiscal 2001, set to an index value of 100, usage
in fiscal 2019 stood at 51.7 points, representing a dete-
rioration of 0.7 points from the previous fiscal year. This
is due to decrease in the net sales of the Group, while
As a corporate group that does business in the chemicals
water usage remained at the same level.
sector, Toray Group places the highest priority on reduc-
ing emissions of chemicals into the atmosphere in order
to reduce its environmental impact. In fiscal 2019, Toray
Initiatives to Reduce Waste
Toray Group is carrying out zero emission initiatives as
Group’s atmospheric emissions of PRTR Law-specified
it works toward the realization of a sustainable, circular
substances were 720 tons, representing a 73% reduc-
economy. Under the Fifth Medium-Term Environmental
tion compared to fiscal 2000, while VOC atmospheric
emissions were 968 tons, representing a 76% reduction
compared to fiscal 2000. As such, the company met its
Fifth Medium-Term Environmental Plan target for a 70%
Plan, the Group worked to achieve its fiscal 2020 targets
for rates of simply disposed waste*1, landfill waste*2 and
recycled waste*3, which have been set as indicators for
measuring progress toward attaining zero emissions.
reduction in emissions compared to fiscal 2000.
In fiscal 2019, simply disposed waste increased by
Initiatives to Prevent Air and Water
Pollution
about 4,600 tons compared to the previous fiscal year
in line with the effects from the narrowing down or sus-
pension of operations at domestic affiliated companies’
plants. As a result, the simply disposed waste rate in
Toray Group implements ongoing initiatives at production
fiscal 2019 for Toray Group as a whole deteriorated 3.0
sites to reduce sulfur oxide (SOx) emissions by installing
points from the previous fiscal year to 24.6%, which
desulfurization equipment and converting to cleaner fuels,
failed to meet the target of less than 22.5%. In addition,
and reduce chemical oxygen demand (COD) by expanding
the landfill waste rate for the Toray Group as a whole
wastewater treatment facilities.
was 8.3%, deteriorating from previous year’s 7.3%. The
Toray Industries, Inc.
Integrated Annual Report 2020
83
Environmental Management Initiatives
increase in simply disposed waste value appears a tem-
Plants at Toray and Group companies in Japan oper-
porary development due to the removal of a production
ate greenery policies and plans through around 2020,
plant of a domestic affiliated company due to its termi-
nation of business, but this is confined to fiscal 2019.
As such, the Company expects an improvement from
fiscal 2020. While the recycling rate was impacted by
the removal of a production plant of a domestic affiliated
company due to its termination of business, ongoing
efforts to promote recycling at overseas affiliated com-
panies resulted in the Toray Group recycling rate improv-
ing 0.7 points from the previous fiscal year to 86.4%.
guided by Toray Group Basic Policy for Increasing Green
Areas*1. The plans encompass initiatives to conserve
green areas as much as possible, including healthy nat-
ural forests*2, that have been protected since the plants
began operating.
*1 Toray Group Basic Policy for Increasing Green Areas was established
in 2012, evolving out of greenery policies that were first established
in 1973.
*2 Natural groves or forestation by species based on potential native
vegetation
*1 Simply disposed waste rate = (incineration +landfill) / total waste
*2 Landfill waste rate = landfill waste / total waste
*3 Recycling rate = (recycled resources + resources with monetary worth)
/ (total waste + resources with monetary worth)
Progress on the Fifth Medium-Term
Environmental Plan
Biodiversity Initiatives
Toray Group views conservation of biodiversity as a criti-
Toray Group is now implementing its Fifth Medium-Term
Environmental Plan, which runs from fiscal 2016 to fis-
cal 2020. The plan aims to further reduce the Group’s
cal global environmental issue that is of equal importance
environmental impact. Amid further projected increases
to reducing greenhouse gas emissions, as an important
in production volumes for products such as high-perfor-
theme regarding global environmental problems, and
mance films, the Group will continue to pursue envi-
pursues biodiversity initiatives in accordance with a
ronmental initiatives in order to achieve the challenging
three-year action road map and sets its priorities based
targets of the new plan. The Company announced the
on the Group’s Biodiversity Initiatives. In fiscal 2019, the
Toray Group Sustainability Vision in July 2018, and will
Company promoted activities aimed at reviewing raw
continue in its efforts to reduce emissions from fiscal
materials containing biological ingredients.
2020, in order to achieve its targets.
Progress on the Fifth Medium-Term Environmental Plan Target
Area
Toray Group fiscal 2020 target
Fiscal 2019 results
Curbing global
warming
Management
of chemical
substances
Maintain greenhouse gas emissions at least 15% below the fiscal 1990
level (Toray)
27% reduction
15% or greater reduction in greenhouse gas emissions per unit of sales
compared to fiscal 1990 (Toray Group in Japan)
32% reduction
Atmospheric emissions of PRTR Law-specified substances: Maintain at
least 70% below the fiscal 2000 level (Toray Group)
73% reduction
Atmospheric emissions of volatile organic compounds (VOCs):
Maintain at least 70% below the fiscal 2000 level (Toray Group)
76% reduction
Zero emissions goal: Achieve at 45 or more Toray Group plants
Achieved at 44 plants
Waste
reduction
Simply disposed waste rate: 22.5% or lower (Toray Group)
Recycling rate: Maintain at 86% or more (Toray Group)
Landfill waste rate: 1.3% or lower (Toray Group in Japan)
24.6%
86.4%
8.3%
Toray Industries, Inc.
Integrated Annual Report 2020
84
Human Resources Management
Committed to Human Rights
We at Toray Group believe respect for human rights is a
mandatory management principle for ensuring the continu-
ity of corporate activities and building positive relationships
with all of the Group’s stakeholders. Along with working to
promote and raise awareness of human rights, the Group
has declared its commitment to the respect of human rights
in its Corporate Guiding Principles and Ethics & Compliance
Code of Conduct. In the Code, discrimination of any kind
based on race, creed, skin color, gender, religion, national-
ity, language, physical characteristics, socioeconomic sta-
tus, place of birth, or any other personal characteristics, is
strictly forbidden in every process from recruiting and hiring
to work placement, treatment, training, and retirement.
The Ethics & Compliance Code of Conduct also explicitly
states that sexual, maternity, and power harassment in
the workplace shall not be tolerated. The Group has also
been tackling the issue of discrimination based on gender
identification and sexual orientation. In January 2017, the
Group established a dedicated hotline for LGBT (sexual
minority) issues, Nijiiro Consultation Service. In addition, as
a global enterprise, the Group respects international norms
such as the Universal Declaration of Human Rights, the
International Labor Organization’s conventions, and the
UN Guiding Principles on Business and Human Rights.
The Group has also established the Toray Group Policy for
Human Rights, which lays out the Group’s commitment
to ensuring that it is not complicit in any human rights
violations in the overall supply chain and to promptly and
appropriately addressing issues if and when they arise.
Identifying, Assessing, and Preventing Human Rights Risk
Toray Group conducts surveys related to awareness, edu-
cation, and other human rights promotion activities once
per year at all offices and plants, major Group companies in
Japan, and overseas subsidiaries and affiliated companies.
The Group verifies the results of these through the Human
Rights Promotion Committee in Japan and the Global Human
Rights Promotion Committee. From among the results, the
Group identifies human rights related issues and problematic
points, as well as points of concern, and investigates and
implements initiatives in accordance with the human rights
promotion framework. Moreover, the Group has designed
systems (Corporate Ethics and Legal Compliance Helpline
in Japan and whistle-blowing contact offices at each over-
seas company) that enable Group employees to report and
consult on human rights issues as part of its efforts to take
prompt, appropriate action when a problem occurs and to
help reduce human rights risk.
Securing and Developing Human Resources
to Create New Value
Training Expenditures per Employee
96,821yen (Toray, FY 2019)
The success or failure of a company is decided by its people—
employees shape its destiny. Guided by this concept, Toray
Group, both in and outside of Japan, regards human resources
as the most important management resources and consid-
ers securing and developing outstanding human resources
capable of performing on a global stage as a fundamental
management priority. Based on the following four goals, Toray
Group is promoting human resource development.
• Development of fair-minded individuals who act with
high ethical standards and a sense of responsibility
• Training of professionals with advanced expertise, tech-
nical skills and originality in problem solving
• Development of leaders who act with foresight and a
sense of balance
• Development of individuals, professionals, and leaders
who can play an active role in global business
Systematic and Effective Training
Toray develops well-designed training programs and system-
atically executes diverse training programs to enhance man-
agement, sales and marketing, production technology, and
specialized skills, and to better equip employees to address
globalization. These programs cover all levels of employees
and fields, aiming to develop future management candidates
while expanding and educating the base of core staff ready
to employ their strong capabilities to lead on the frontlines.
Development of Future Management Candidates
Toray Group implements training in order to systematically
develop future management candidates. Numerous employ-
ees who have undergone the training are already active in
management positions.
Since fiscal 2014, Toray Group has been working on a
succession plan and personnel development plan based on a
medium- and long-term perspective and drawing up a medi-
um-term human resources plan and practicing systematic
personnel assignment to ensure that core staff can tackle
important business issues. The Group implements human
resources strategies designed to support business strategies
by verifying the availability of successor candidates for core
positions and developing individualized development plans
for future management candidates, including for national
staff at group companies outside Japan. As a means of
strengthening these efforts, in fiscal 2019 the Group began
utilizing a new human resources information infrastructure
in the formulation of its medium-term human resource plan.
Toray Industries, Inc.
Integrated Annual Report 2020
85
Human Resources Management
Promoting Diversity
Toray Group is committed to securing outstanding human
resources who have a high sense of ambition and who can
play an active role in global business, regardless of gender,
nationality, or career history at the time of hiring, as part of our
efforts to build thriving workplaces in which a diverse range
of individuals can fully demonstrate their potential.
Fostering an Organizational Culture Conducive to the
Career Advancement of Women
Women in Management Positions
5.1% (Toray, FY 2019)
Toray has long advanced the creation of workplace environ-
ments in which women will feel comfortable in performing
their duties. The number of female employees in upper-level
positions has increased steadily, and as of April 2020, women
held 9.7% of unit manager or higher positions, and 5.1% of
section manager or higher positions. In fiscal 2016, based
on Japan’s Act on Promotion of Women’s Participation and
Advancement in the Workplace, enacted in that same year,
Toray developed an action plan to increase the percentage
of female employees promoted to managerial positions by
focusing on making and steadily implementing individualized
career plans and raising awareness of career development.
Under this action plan, Toray has set as its immediate target to
ensure an average promotion rate for women that is at least
80% that of men* for the five-year period from fiscal 2016
to fiscal 2020. This figure is the Japanese Ministry of Health,
Labour and Welfare’s yardstick for determining whether or not
excessive discrepancy exists based on gender. Specifically,
Toray will take the following measures to achieve this goal:
• Request individualized career plans each year to be
faithfully followed;
• Conduct morale surveys every other year and follow
up on issues requiring attention; and
• Bolster training designed to raise awareness of career
building.
* Promotion rate of women to managerial positions compared to that of men
= Percentage of female employees promoted to managerial positions /
Percentage of male employees promoted to managerial positions
Percentage promoted to managerial positions = Individuals promoted to
managerial positions / No. of employees who were initially hired into the
G Course who are eligible for promotion to managerial position that year
Holding Career Advancement Seminars for Women Serving as
Managers and Occupational Specialists, and Discussion Meetings
In 2014, women serving as general managers at the Toray
Group developed and initiated a career advancement sem-
inar for women serving as managers and occupational spe-
cialists, and it has now been held five times. Since fiscal
2016, the seminar participants have organized discussion
meetings for women annually at all of Toray’s offices and
plants in Japan. Open to all women at Toray, the meetings
offer an opportunity for women in all workplaces of various
ages and at various stages of life to talk honestly about
balancing work and home life, sharing and educating each
other about the challenges and issues they face.
Employment of Persons with Disabilities
Percentage of Companies Achieving Legally Mandated
Employment Rate of Persons with Disabilities
61.3% (Toray Group (Japan), FY 2019)
Toray Group hires and employs persons with disabilities, from
those with physical challenges to persons with intellectual
and mental challenges. The Group is making workplace
improvements to remove physical barriers for persons with
handicaps as well as instituting safety measures. Additionally,
the Group provides comprehensive training upon work place-
ment and gathers feedback from persons with disabilities
to make workplace improvements. Further, Toray meets
Japan’s legal minimum of 2.2% persons with disabilities, as
do 61.3% of Toray Group companies in Japan. Group com-
panies actively seek to hire persons with disabilities through
public organizations and job placement agencies. However,
some individual group companies do not meet the mandated
legal requirement due to hiring difficulties.
Creating a Positive Workplace for Employees
Helping Employees Maintain Work-life Balance
Percentage of Available Annual Paid Leave Used by Employees
96.0% (Toray, FY 2019)
Toray has worked to further improve systems that help
employees achieve a harmonious balance between work
and family life by offering a wider variety of lifestyle options
for both men and women. In particular, the systems Toray
provides for childcare, family care, and maternity protection
exceed the legally mandated minimums and have been
improved for easy use. In 2007, Toray was certified as an
employer that complies with the action plan standards under
the Act on Advancement of Measures to Support Raising
Next-Generation Children.
Toray has also been working on ongoing initiatives to cut
overtime hours and to encourage employees to take annual
paid leave.
Employee Health
Toray views employee health management as a management
priority, and thus actively implements measures that encour-
age employee health, including sharing health information over
the intranet, holding participatory events that utilize health
related information sites, and organizing awareness seminars
for the prevention of lifestyle-related diseases. Toray is also
addressing mental health, and since fiscal 2011 the Company
has been independently implementing employee stress check-
ups through an external provider. Toray uses the results of
these check-ups in helping employees to recognize their own
stress levels, supporting approaches to dealing with stress,
and improving the workplace environment. In recognition
of these efforts, Toray has received Health and Productivity
Management Organization certification since 2018.
Toray Industries, Inc.
Integrated Annual Report 2020
86
CSR Road Map 2022
Toray Group has designated implementation leaders for
Road Map that outlines specific activity details and KPIs
each of the 10 areas including corporate governance,
for each guideline. Details of our CSR Road Map 2022
ethics and legal compliance, safety, accident preven-
were announced in September 2020. Toray Group will
tion, and environmental preservation, human rights,
embody its Corporate Philosophy, which encompasses
human resource development, and social contribution
the Company Principle and values carried forward since
that comprise its CSR Guidelines. These Guidelines
its foundation while at the same balancing the need for
serve as guiding principles to be followed when engag-
sustainable development and contributing to the cre-
ing in CSR activities. Moreover, as a CSR promotion plan
ation of a sustainable society by promoting these orga-
that is based on a PDCA cycle that in principle is imple-
nized and systematic CSR activities together with the
mented once every three years, we formulate a CSR
Group’s management strategies in a uniform manner.
CSR Road Map 2022 and Key Performance Indicators
CSR Guidelines
Key performance indicators
FY 2020 Targets
CSR Guidelines
Key performance indicators
FY 2020 Targets
1 Corporate
Governance
Discussions of Toray Group Business
Strategies by the Board of Directors (times)
Board of Directors’ positive assessment of
the implementation of the Basic Policy for
Internal Control Systems (%)
Number of major violations of laws or
ordinances
8 times
90%
0
2 Corporate
Ethics
and Legal
Compliance
Implementing internal legal audits of group
companies, group companies improving
problems found in internal legal audits in the
previous year (%)
Group companies providing information and
implementing education on major laws, regula-
tions and other compliance-related matters (%)
Number of major accidents
Achieve world’s best standard for safety man-
agement (not exceeding 0.05 frequency rate for
occupational accidents resulting in lost work time)
Audits: Toray, its group
companies in Japan
and group companies
outside Japan
Percent that
improved: 100%
for all audits by the
following fiscal year
100%
0
No more than 0.05
Number of fire and explosion accidents
Number of environmental accidents
0
0
Reduction of greenhouse gas emissions per
unit of sales (%)
20% lower than
FY 2013 (FY 2022 target)
Reduction of water consumption per unit
of sales (%)
25% lower than
FY 2013 (FY 2022 target)
3 Safety,
Accident
Prevention, and
Environmental
Preservation
Reduction of atmospheric VOC emissions (%)
Waste recycling rate (%)
At least 70% lower
than FY 2000
At least 86% lower
than FY 2000
Conducting surveys on the palm oil included
in raw materials (%)
Certified product
usage survey: 100%
4 Product Safety
and Quality
5 Risk
Management
Number of product accidents
Group companies implementing product
safety and quality assurance education (%)
Annual follow-up of Toray Group’s priority
risks (Number of companies, %)
Risk management training (Rate of achieve-
ment compared with plans at the beginning
of the period)
0
100%
100%
100%
6 Communication
7 Contributing
Solutions to
Social Issues
through
Business
Activities
8 Human Rights
Promotion
and Human
Resources
Development
9 Facilitating
CSR Initiatives
Throughout the
Supply Chain
10 Social
Contribution
Activities
Number of corporate website page views
(per month)
Interviews to assess the level of internal
opinion exchange (Rate of progress)
Number of interviews with major investors
attended by top management
Number of news releases
Revenue of Green Innovation products (IFRS)
Revenue of Life Innovation products (IFRS)
Avoided CO2 emissions in the supply chain
Contributed annual water filtration throughput
Group companies implementing human rights
education and training (%)
Group companies that have achieved legally
mandated employment rate of persons with
disabilities (%)
Career development of core staff using the
new HR information system (implemen-
tation of the “career sheet”) (Number of
employees, %)
1.0 million page views
40%
80 in total
200
1,000 billion yen
(FY 2022 target)
300 billion yen
(FY 2022 target)
5.3 fold compared to
FY 2013 (FY 2022 target)
2.4 fold compared to
FY 2013 (FY 2022 target)
100%
100%
20%
Return to work after childcare leave (%)
100%
Reduction in the number of employees
who work 45 hours per month in excess of
non-statutory work hours
Year-on-year
disappearance
Annual leave taken by labor union members (%)
90%
Number of group companies that have
requested their suppliers to practice CSR
More than 80%
Suppliers whose CSR initiatives are
consistent with those required by Toray Group
(Number of companies, %)
More than 70%
Reduction in CO2 emissions per unit of sales
from distribution activities (year-on-year)
1%
Modal shift to sea or rail for transport across
distances for 500 km or more (%)
40%
(FY 2022 target)
Expenditure on social contribution activities
as a percentage of the average expenditure
over the past six years
Number of social contribution activities
implemented
Number of employees receiving educational
support including workshops and career
training
More than 100%
More than 2,500
More than 15,000
Toray Industries, Inc.
Integrated Annual Report 2020
87
Discovering Science
in our Everyday Lives
Photo: Aozora Science School
Toray Industries, Inc.
Integrated Annual Report 2020
88
Toray Industries, Inc.
Integrated Annual Report 2020
89
Results by Segment for Fiscal 2019
Segments
Summary of Financial Results
Fibers &
Textiles
Performance
Chemicals
All applications of the segment were affected by the weak market conditions reflecting the
prolonged trade friction between the U.S.A. and China, the slowdown in the Chinese economy,
and two consecutive years of warm winter.
In Japan, while shipment of apparel and industrial applications remained weak in general,
Toray Group pursued sales expansion of materials for uniforms in Japan and for sports applica-
tions in the U.S.A. and Europe and focused on strengthening cost competitiveness.
Overseas, demand for apparel applications including garments and textiles as well as auto-
motive applications, the mainstay of the industrial applications, remained sluggish, and Toray
Group focused on business structure reform and strengthening of cost competitiveness.
The segment was also affected by the stagnation in production and consumption activities
both in Japan and overseas due to the COVID-19 pandemic.
In the resins business, sales of both automotive and home appliance applications were slow
primarily due to the impact of the slowdown in the Chinese economy and stagnation of pro-
duction activities due to the COVID-19 pandemic. The chemicals business was affected by the
decline in the basic chemicals market. In the films business, sales of battery separator films
for lithium-ion secondary batteries increased reflecting demand growth, while polyester films
were affected by the inventory adjustment for optical as well as electronic parts related appli-
cations. The electronic & information materials business saw strong performance of OLED
related materials and electronic circuit materials.
Carbon Fiber
Composite
Materials
The Carbon Fiber Composite Materials segment remained strong as a whole. There was an
expansion of demand for aircraft application, strong performance industrial application in the
environmental and energy-related fields such as compressed natural gas tanks and wind tur-
bine, blades, and recovery in the demand for sports applications.
Environment &
Engineering
In the water treatment business, demand for reverse osmosis membranes and other products
grew strongly on the whole in Japan and overseas.
Among domestic subsidiaries in the segment, a construction subsidiary was negatively
affected by the decline of high profit project orders, and an engineering subsidiary experienced
decreases in the shipment of some electronics related equipment.
Life Science
In the pharmaceutical business, sales of orally active prostacyclin derivative DORNER®
were affected by the introduction of its generic versions. While sales of pruritus treatment
REMITCH®* were also influenced by the introduction of its generic versions, its shipment was
strong partly due to the growth in the entire market.
In the medical devices business, shipment of dialyzers grew strongly in Japan and overseas.
*REMITCH® is a registered trademark of Torii Pharmaceutical Co., Ltd.
Toray Industries, Inc.
Integrated Annual Report 2020
90
Net Sales
883.1
(40%)
Net Sales
770.8
(35%)
Net Sales
236.9
(11%)
Net Sales
252.3
(11%)
Net Sales
53.3
(2%)
Operating
Income
60.7
(39%)
Operating
Income
58.7
(37%)
Operating
Income
21.0
(13%)
Operating
Income
11.2
(7%)
Operating
Income
1.6
(1%)
Performance (Billions of yen)
* The figures in parentheses of each segment are composition ratios by segment.
Main Products
Net Sales
883.1
(40%)
Net Sales
770.8
(35%)
Net Sales
236.9
(11%)
Net Sales
252.3
(11%)
Net Sales
53.3
(2%)
Operating
Income
60.7
(39%)
Operating
Income
58.7
(37%)
Operating
Income
21.0
(13%)
Operating
Income
11.2
(7%)
Operating
Income
1.6
(1%)
• Filament yarns, staple fibers, spun yarns, woven and
knitted fabrics of nylon, polyester, acrylic, and others
• Nonwoven fabrics
• Nonwoven material created using ultra-fine fibers in
an “Island in the Sea” configuration
• Apparel products, etc.
• Nylon, ABS, PBT, PPS, and other resins and molded
products
• Polyolefin foam
• Polyester, polyethylene, polypropylene, and other
films and processed film products
• Raw materials for synthetic fibers, and other plastics
• Fine chemicals
• Electronic and information materials, and graphic
materials, etc.
• Carbon fibers, carbon fiber composite materials, and
molded products from those materials, etc.
• Comprehensive engineering
• Condominiums
• Industrial equipment and machinery
• IT-related equipment
• Water treatment membranes and related equipment
• Materials for housing, building, and civil engineering
applications, etc.
• Pharmaceuticals
• Medical devices, etc.
* Excludes other businesses, equivalent to ¥18.2 billion (1%) in net sales and ¥3.4 billion (2%) in operating income, and adjustment of
operating income of -¥25.5 billion. The composition ratio by segment of operating income is calculated excluding the adjustment amount.
Toray Industries, Inc.
Integrated Annual Report 2020
91
Net Sales
(Billion yen)
883.1
Operating Income
(Billion yen)
60.7
Operating Income to
Net Sales
6.9 %
ROA
(Operating Income/Assets)
7.9 %
Medium-term Management Program “Project AP-G 2022”
Business Environment
• Growing need for advanced materials contributing
to the resolution of global environmental, energy,
resource issues, and health and longevity
• Changing consumption trends: Greater importance on
Key Initiatives
Global business expansion (expand in growth regions
and growth business fields and promote advancement
in business models)
• Expand profitability driven by five businesses of tex-
the “social value of and empathy for goods”
tiles, nonwoven fabrics, airbags, nonwoven material
• Changes to the industrial structure: Advancement of
created using ultra-fine fibers in an “islands in the
the digital revolution
sea” configuration, and integrated business from fiber
to textiles and further to garments
Basic Policies
• Continuously strengthen business structure and
Business expansion by addressing sustainability
• Expand materials that address global environmental
expand in growth regions and growth business fields
issues
• Enhance profitability by promoting a differentiation
• Expand materials and products used for medical and
strategy and addressing sustainability
healthcare applications
Promotion of global brand strategies
Strengthening business competitiveness, promotion
of structural reform and business advancement
• Promote global re-engineering
• Expand value-added products and enhance the supply
chains
Fiscal 2020 Outlook
• The fibers & textiles business will work to expand the integrated business from fiber and textiles to garments;
however, due to the impact of the COVID-19 pandemic, demand for apparel applications and industrial applications,
including those in the automotive field, is expected to decline. The pace of demand recovery is assumed to remain
gradual as inventory adjustments will require time even after the COVID-19 pandemic subsides.
• Demand for nonwovens is expected to increase from hygiene products and mask applications.
Toray Industries, Inc.
Integrated Annual Report 2020
92
Fibers and textiles Fiscal year ended
March 31
Net Sales/
Revenue (billion yen)
Operating Income/
Core Operating
Income (billion yen)
Operating Income
to Net Sales/Core
Operating Income to
Revenue
2018
(J-GAAP)
2019
(J-GAAP)
Changes
2020 Forecast
(IFRS)
974.3
883.1
-9.4% 705.0
72.9
60.7
-16.7%
36.0
7.5%
6.9%
Changes in Operating Income (Billion yen)
72.9
-15.8
+10.8
-5.7
-1.5
60.7
-12.2
FY 2018
Difference
in quantity
Net change
in price
FY 2019
Cost
variance,
etc.
Difference from
foreign currency
translation of
overseas
subsidiaries’ results
S
C
I
P
O
T
Acquisition of Alva Sweden AB, a Manufacturer of Automotive Airbag Cushions
In January 2020, Toray acquired all shares of Alva Sweden
outstanding reputation among leading European module
AB (ASE), a manufacturer of cushions for automotive
manufacturers for its proprietary sewing technologies,
airbag systems. The global airbag market has seen
manufacturing expertise, and cost competitiveness.
steady growth in demand against a backdrop of tight-
Although Toray has built positive ties with ASE over
ening vehicle safety regulations in developed countries
the years by supplying fabrics, Toray moved to acquire
and increasing installation rates in emerging countries.
ASE as a subsidiary in order to extend its supply chain
Another factor is the rising demand for improved perfor-
and increase the sophistication of its integrated opera-
mance in next-generation airbags that stems from the
tions by entering the cushion manufacturing business.
need to address greater safety performance and from
This move is also aimed at more quickly responding to
the dramatic changes in vehicle interiors being driven by
changes in the market.
advancements in self-driving and other new technologies.
This acquisition enables Toray to enhance direct rela-
Toray’s airbag business encompasses nylon fiber pro-
tionships and dealings with module manufacturers and,
duction operations in Japan, Thailand, and Mexico and fabric
through them, automakers, and enables the Company to
manufacturing sites in Japan, Thailand, China, the Czech
swiftly and reliably identify the latest airbag development
Republic, India, and Mexico. And the Company is building a
trends and customer needs. Toray also looks to incorporate
robust production and sales structure that offers competitive
Alva’s cushion-manufacturing expertise into fabric design
advantages based on integrated fiber and fabric capabilities.
to bolster product development and proposal capabilities
This structure maintains the ability to supply the same
that draw on the Company’s strength of fiber, fabric, and
quality fabrics from all production sites in a timely manner.
sewing integration. The Company thereby aims to help
Alva has manufactured cushions for automotive air-
materialize high-performance airbags by heightening its
bag systems in Europe since 1997, and has earned an
presence among module manufacturers and automakers.
Global Supply Chain for Airbag Business
Spinning
fiber
Weaving
fabric
Cut & Sew
cushion
Assembly
module
Assembly
automobiles
Toray Group
integrated
supply chain
Fiber bases:
Okazaki plant (Japan), TTS (Thailand), TAMX (Mexico)
Textile bases: Marui Orimono (Japan), TSD (China), TTT (Thailand), TKAT (India)
TTCE (Europe), TAMX (Mexico)
Garment bases: Alva (Europe, Tunisia)
Toray Group integrated development
Japan, Europe, China,
ASEAN/India, North America
Global strategy vehicles
Japan, Europe, China,
North America
Module manufacturers
Development needs
Automobile manufacturer
Development concept
Toray Industries, Inc.
Integrated Annual Report 2020
93
Net Sales
(Billion yen)
770.8
Operating Income
(Billion yen)
58.7
Operating Income to
Net Sales
7.6 %
ROA
(Operating Income/Assets)
6.1 %
Medium-term Management Program “Project AP-G 2022”
Business Environment
• Growing need for advanced materials contribut-
ing to the resolution of global environmental and
Key Initiatives
Resins & Chemicals Business
• Expand high value-added businesses in growth areas
energy, resource issues
such as next generation mobility and 5G, etc., and in
• Mobility revolution, transformation in the automo-
growth regions including India
tive industry
• Strengthen upfront development capabilities, and total
• Advancement of the digital revolution and transi-
solution proposal capabilities
tion to fifth generation mobile communication sys-
tems (5G)
Basic Policies
• Expand sales of high value-added products in
growth business fields, boost profitability by creat-
ing new products, and address sustainability
Films Business
• Expand sales of high value-added products in growth
business fields including battery separator films, PET
films for MLCC release films, and nano-layered films
• Create and expand new products and applications that
meet the market changes
Electronic & Information Materials Business
• Create high value-added electronics materials designed
to match 5G and IoT by combining core technologies with
the latest information in a prompt and timely manner
• Realize continuous business expansion by providing our
customers with solutions through advanced materials
Fiscal 2020 Outlook
• The resins business will expand sales of transparent ABS resins and engineering plastics, while the films business
will expand sales of high value-added products such as MLCC release films and battery separator films. However,
due to the impact of the COVID-19 pandemic, demand mainly in automotive applications is expected to decrease.
• Although the effects of the COVID-19 pandemic will remain throughout the first half of the fiscal year, the electronic
and information materials business is expected to see demand recover in the latter half of the fiscal year, and will
expand sales of OLED related materials and semiconductor materials.
Toray Industries, Inc.
Integrated Annual Report 2020
94
Performance Chemicals Fiscal year ended
March 31
Net Sales/
Revenue (billion yen)
Operating Income/
Core Operating
Income (billion yen)
Operating Income
to Net Sales/Core
Operating Income to
Revenue
2018
(J-GAAP)
2019
(J-GAAP)
Changes
2020 Forecast
(IFRS)
868.8
770.8
-11.3% 695.0
67.7
58.7
-13.2%
59.0
7.8%
7.6%
Changes in Operating Income (Billion yen)
67.7
-11.7
+12.8
-7.9
-2.2
58.7
-9.0
FY 2018
Difference
in quantity
Net change
in price
FY 2019
Cost
variance,
etc.
Difference from
foreign currency
translation of
overseas
subsidiaries’ results
S Established a New Battery Separator Film (BSF) Production Facility in Hungary
C
I
P
O
T
Toray decided to establish a
new production facility for
battery separator film (BSF)
for lithium-ion secondary bat-
teries (LIB) at Toray Industries
Hungary Kft. (THU), which
was established in April 2018.
The new facility is scheduled
to begin operations in July
2021 and thereby increase
Toray Group’s total BSF pro-
duction capacity by approxi-
mately 20%.
Going forward, global demand
for BSF is projected to expand
rapidly, given steady expan-
sionary trends in consumer
applications like mobile elec-
tronics and energy storage
systems, and the anticipated
robust increase in automotive
applications as electric vehi-
cles (EV) become more pop-
ular. In Europe in particular,
where environmental aware-
Groundbreaking ceremony for new factory
ness is increasing, it is anticipated that eco-friendly
Toray Group already has BSF production facili-
EV vehicles will rapidly spread, and battery manu-
ties at the Nasu Plant in Japan and in the Republic
facturers are also actively entering European mar-
of Korea, where Toray Battery Separator Film Korea
kets. Toray has taken the basic strategic approach of
Limited
(TBSK) engages
in development, pro-
“local production for local consumption” in its over-
duction and sale of BSF, while Toray BSF Coating
seas business development. By locating production
Korea Limited (TBCK) handles coating processes.
facilities in areas close to customers, Toray aims to
In 2017, Toray announced facility
investments
respond to growing demand and also to contribute
to expand capacity in these two locations and
to the economic development of local regions and
new lines have been started up since fiscal 2018.
communities.
Toray Industries, Inc.
Integrated Annual Report 2020
95
Net Sales
(Billion yen)
236.9
Operating Income
(Billion yen)
21.0
Operating Income to
Net Sales
8.8 %
ROA
(Operating Income/Assets)
3.4 %
Medium-term Management Program “Project AP-G 2022”
Business Environment
• Growing need for advanced materials contributing to
Key Initiatives
• Thorough recovery of prior investments for growth
the resolution of global environmental and energy,
• Capture growth in new applications in the mobility
resource issues
fields such as UAM (Urban Air Mobility)
• Mobility revolution, transformation in the automotive
• Capture growth in the expanding energy related fields
industry
such as wind turbine blades and fuel cell vehicles
• Expanding economic utilization of space and sky
(tanks, electrode substrates) applications
Basic Policies
• Maintain the position as world’s No.1 by pursuing
high-performance and quality reliability of the products
• Improve capital efficiency and return on investment by
capturing market growth
• Strengthen solution proposal capabilities aimed to
become a “best-in-class solution provider,” and imple-
ment appropriate price policies
Fiscal 2020 Outlook
• In addition to lower production volumes at major customers for aerospace applications due to the impact of the
COVID-19 pandemic, automotive-related demand is also expected to decline.
• Sales of wind turbine blade applications are expected to be strong.
Toray Industries, Inc.
Integrated Annual Report 2020
96
Carbon Fiber Composite Materials Fiscal year ended
March 31
Net Sales/
Revenue (billion yen)
Operating Income/
Core Operating
Income (billion yen)
Operating Income
to Net Sales/Core
Operating Income to
Revenue
2018
(J-GAAP)
2019
(J-GAAP)
Changes
2020 Forecast
(IFRS)
215.9
236.9
+9.7% 190.0
Changes in Operating Income (Billion yen)
+6.0
-7.7
+11.7
-0.5
21.0
11.5
21.0
+81.6%
7.0
11.5
+9.4
5.3%
8.8%
FY 2018
Difference
in quantity
Net change
in price
FY 2019
Cost
variance,
etc.
Difference from
foreign currency
translation of
overseas
subsidiaries’ results
S
C
I
P
O
T
Developed Vacuum Pressure Molded Prepreg for Aircraft
Toray developed an innova-
tive prepreg for primary struc-
tural aircraft components that
enables high-grade carbon fi-
ber reinforced plastic (CFRP)
molding with excellent me-
chanical characteristics with-
out using an autoclave as an
intermediate material. The
Company will further deepen
this new technology to ex-
pand demand for high perfor-
An example of a simulated aircraft tail components
Toray developed a vacuum
pressure molding technology
in which CFRP is manufac-
tured entirely at atmospheric
pressure under vacuum suc-
tion and without heating.
Toray also recently developed
a prepreg that is suitable for
this vacuum pressure molding
technology. The new prepreg,
enabled by a newly developed
matrix resin, has a mechanical
mance CFRP components with low processing cost
performance—post-impact compression strength and
in various applications including aircraft, vehicles and
tensile strength—equivalent to that of primary struc-
general industrial use.
tural aircraft components made from existing prepreg
In general, CFRP primary structural components,
molded with the autoclave method. The results of a
used for commercial aircraft wings and fuselages,
molding test for a 2m component that simulates a
are manufactured using an autoclave process that
part from an existing aircraft tail assembly and molded
laminates multiple sheets of prepreg composed of
using the new prepreg confirmed that such CFRP
carbon fibers impregnated with epoxy resin on a
components are of a level that can clear strict quality
mold and cures the resin by applying heat and high
control standards for aircraft components.
pressure in an autoclave. Although the autoclave
Part of this successful development is attribut-
method offers the advantage of stable molding of
able to the “Innovative Structural Materials (Cross-
high performance, high-grade CFRP components, it
ministerial Strategic Innovation Promotion Program
requires high initial capital investments of more than
(SIP),” a strategic innovation program of the Council
billions of yen and therefore increases the production
for Science, Technology and Innovation (managed by
cost of CFRP components.
Japan Science and Technology Agency).
As an alternative to the autoclave method, in 2018
Toray Industries, Inc.
Integrated Annual Report 2020
97
Carbon Fiber Composite Materials
Net Sales
(Billion yen)
252.3
Operating Income
(Billion yen)
11.2
Operating Income to
Net Sales
4.5 %
ROA
(Operating Income/Assets)
4.4 %
Medium-term Management Program “Project AP-G 2022”
Business Environment
• Growing need for advanced materials that can con-
tribute to the resolution of global environmental and
Key Initiatives
Water Treatment Business
• Enhance global production and sales system in
energy, resource issues, and related machinery to
response to markets that are expanding over the
manufacture them
medium and long term
• Growing need for safe air and water
• Accelerate new product development and expand
Basic Policies
• Expand business in the growth business fields center-
ing on water treatment membranes and engineering
sales of products that meet the needs of each region
and customers
• Thoroughly strengthen business structure
Engineering Business
• Expand plant construction business and electronics-re-
lated machineries (in the fields of life science and
semiconductors)
• Enhance technical capabilities and cost competitive-
ness by strengthening the Group’s unified operations
Fiscal 2020 Outlook
• In the water treatment business, will promote sales expansion with a focus on RO membranes
• An engineering subsidiary expects sales expansion of electronics related equipment
Toray Industries, Inc.
Integrated Annual Report 2020
98
Environment & Engineering Fiscal year ended
March 31
Net Sales/
Revenue (billion yen)
Operating Income/
Core Operating
Income (billion yen)
Operating Income
to Net Sales/Core
Operating Income to
Revenue
2018
(J-GAAP)
2019
(J-GAAP)
Changes
2020 Forecast
(IFRS)
12.2
-2.5
+1.5
-0.3
11.2
+0.3
Changes in Operating Income (Billion yen)
257.7
252.3
-2.1% 202.0
12.2
11.2
-8.1%
14.0
4.7%
4.5%
-1.0
FY 2018
Difference
in quantity
Net change
in price
FY 2019
Cost
variance,
etc.
Difference from
foreign currency
translation of
overseas
subsidiaries’ results
S
C
I
P
O
T
Established a New Water Treatment Membrane Company in China
In June 2019, Toray established Toray Membrane
Guangdong Province is moving to strengthen
(Foshan) Co., Ltd. (TMFC), a new company that will
industry-academia partnerships and is systematically
engage in the production and sale of RO and other
promoting research and development in advanced
water treatment membrane products, in Foshan,
technologies. Foshan City is located in the center
China. Construction is currently underway towards
of the Guangdong Province Pearl River Delta eco-
commencement of plant operations in 2021.
nomic zone and has a long track record of attracting
Demand for water treatment membranes has
Japanese companies of all sizes to engage in busi-
been rapidly expanding in China in recent years. To
ness partnerships in the region. Toray already has
date, in addition to promoting the use of household
water treatment membrane production and sales
water purifiers, Toray has contributed to improving
companies in operation in Beijing and Yancheng. The
the water environment and solving water scarcity
establishment of a new base in Foshan will enable
issues in China by providing various kinds of water
Toray to respond nimbly to the rapidly expanding
treatment membranes for waterworks and industrial
water treatment membrane market in China, where
water treatment, seawater desalination, and waste-
environmental improvement efforts are being ener-
water treatment and recycling.
getically promoted.
Consolidated Global Operation System for Production and Sales of Water Treatment Membranes
(5 production bases and 8 sales offices)
TMEU
(Europe, Africa)
TBMC, TWMT,
TMFC (China)
TMME
(Saudi Arabia)
Major sales base
Sales office
Production base
Research center
TAK
(Republic of Korea)
TORAY
TARC
(Shanghai)
TMUS
(USA)
TSWRC
(Singapore)
TAS
(Asia & Oceania)
Toray Industries, Inc.
Integrated Annual Report 2020
99
Net Sales
(Billion yen)
53.3
Operating Income
(Billion yen)
1.6
Operating Income to
Net Sales
3.1 %
ROA
(Operating Income/Assets)
2.4 %
Medium-term Management Program “Project AP-G 2022”
Business Environment
• Growing need for pharmaceuticals and medical devices
that help improve medical care quality, raise patient
QOL, and ease the burden on medical professionals
• Growing need for prevention and diagnosis
• Japanese government’s promotion of generic prod-
ucts, as well as ongoing reductions in medical fees,
drug prices, and insurance reimbursement prices
Basic Policies
• Reinforce the business foundation and structure
Key Initiatives
Pharmaceutical Business
• Maintain the business and profit foundation through over-
seas business development of oral drug REMITCH®* as
pruritus improver
Medical Devices Business
• Expand sales by continuously developing and introduc-
ing to market improved products of the existing prod-
uct lineup such as HotBalloon for ablation treatment
• Expand global sales of highly value-added dialyzers,
and launch and promote newly renovated dialysis
through overseas business development, expansion
machines in Japan
of indications and introduction of improved products
of existing product lineup, in addition to cost reduction
New Business
• Establish and launch the business of the test kit to
detect protein markers of pancreatic cancer
*REMITCH® is a registered trademark of Torii Pharmaceutical Co., Ltd.
Fiscal 2020 Outlook
• The medical devices business is expected to see sales expansion in dialyzers and new models of HotBalloons
released to the market, while the pharmaceutical business is expected to be affected by drug price revisions and
generic drugs.
Toray Industries, Inc.
Integrated Annual Report 2020
100
Life Science Fiscal year ended
March 31
Net Sales/
Revenue (billion yen)
Operating Income/
Core Operating
Income (billion yen)
Operating Income
to Net Sales/Core
Operating Income to
Revenue
2018
(J-GAAP)
2019
(J-GAAP)
Changes
2020 Forecast
(IFRS)
53.7
53.3
-0.8%
53.0
1.3
1.6
+24.9%
1.0
2.4%
3.1%
Changes in Operating Income (Billion yen)
+0.2
-1.0
+1.1
-0
1.6
1.3
+0.3
FY 2018
Difference
in quantity
Net change
in price
FY 2019
Cost
variance,
etc.
Difference from
foreign currency
translation of
overseas
subsidiaries’ results
S
C
I
P
O
T
Commercial Launch of the New HEMOFEEL™ SNV
Continual and Gentle Blood Filtration Device
Toray launched commercial sales
of HEMOFEEL™ SNV
in July
2019. Developed as a slow con-
tinuous hemofiltration device*1,
prevents
HEMOFEEL™
SNV
membrane clogging as a result of
an improved antithrombogenic per-
formance*2 and is thus expected to
enable longer usage durations than
conventional devices.
In order to minimize the bur-
den as possible on the bodies of
to substantially improve the anti-
thrombotic performance. In addi-
tion to the superior substance
separation performance of poly-
sulfone membranes*4, in vitro test-
ing has shown that their ability to
improve the antithrombotic perfor-
mance also reduces deterioration
in the filtration performance over
time. This NV Polymer technology
has also been adopted in Toray’s
hemodialyzers and hemodialysis
patients with acute kidney damage and other severe
filters, and has already achieved a long track-record
kidney damage affiliated with multiple organ failure
in clinical use. Toray has also deployed this technol-
and sepsis, treatments are applied that remove sub-
ogy to the emergency and intensive care field for
stances from slowly circulated blood. With this treat-
the first time, and thereby contribute to reducing
ment approach, however, the blood flows slowly,
the burden on medical professionals and patients
which both increases the treatment duration and
tends to induce clot formation reactions*3. In partic-
ular, there has been a steady demand to increase the
antithrombotic performance of the membranes them-
selves used in slow continuous hemofiltration devices
employed during emergency and intensive care.
In response to feedback from these medical set-
tings, Toray successfully applied its proprietary NV
Polymer to the surface of hollow-fiber membranes
during long treatments.
*1 Slow continuous hemofiltration: A medical treatment used to
remove substances from blood slowly over time.
*2 Antithrombotic performance: The ability to prevent blood coagula-
tion (blood clots) as required by medical materials that come into
contact with blood.
*3 Clot formation reaction: When blood contacts contaminants, it
undergoes a biological defense reaction whereby proteins in the
blood gather around and adhere to the surface of the contaminants.
This reaction serves to induce a clot formation reaction.
*4 Polysulfone membrane: A semitransparent membrane made using
a heat-resistant polymer, or polysulfone resin as the basic material.
Toray Industries, Inc.
Integrated Annual Report 2020
101
Fiscal 2019
R&D Expenses
R&D Expenses
(Billion yen)
58.8
59.2
66.2
66.4
66.9
(Billion yen)66.9
Toray
Consolidated
subsidiaries
(FY)
15
16
17
18
19
Fiscal 2019 R&D Achievements
Fibers & Textiles
Using NANODESIGN®, a compos-
ite spinning technology that enables
reflecting oblique light using high-pre-
collaborations (including R&D projects
cision control of the resin refractive
entrusted by the national government)
index based on a new optical design.
for creating fundamental technolo-
free and highly precise control over
The Company developed polyimide
gies for the next-generation mobility
the cross-sectional geometry of com-
materials suitable for application in
industry in Japan. The Company also
posite fibers, Toray developed a new
high-frequency electronic components
developed a new prepreg for primary
Nylon textile that achieves a good
for millimeter-wave radar devices
structural aircraft components that
balance between low environmental
applied mainly in 5G communication
enables high-quality molded carbon
burden and durable water-repellent
and automatic driving. Moreover, Toray
fiber reinforced plastic parts with supe-
properties at a high level, and Kinari™,
a silky material that combines natural
silk properties such as glossiness,
is currently expanding deployment of
NANOALLOY®, a technology that
realizes discontinuous characteristic
bulkiness, and the sound of natural
improvement of materials by enabling
silk with easy-care properties such
fine dispersion of multiple polymers
rior mechanical properties without the
use of an autoclave.
Environment & Engineering
Toray developed a reverse osmosis
as pleat retention and wrinkle resis-
on the nano level, to automotive
(RO) membrane for seawater desali-
tance. The Company also developed
safety components and many other
nation that balances high water-quality
PET-recylcled version of Primeflex™,
applications.
a material with the same stretchable
properties as virgin PET, by realizing
a fiber made from a combination of
Carbon Fiber Composite Materials
Toray’s collaborative development
with the world’s highest level of water
production capacity. The Company
also created the world’s highest-level
nanofiltration (NF) membrane that tri-
approximately 68% environmental-
with Boeing launched in November
ples the permeation performance of
ly-friendly substances, namely plant-
2014 has progressed smoothly and is
conventional models while achieving a
based polytrimethylene terephthalate
starting to produce results as a CTO
superior selective ion and organic mat-
(PTT) and recycled PET.
Project. As part of an agreement con-
ter separation. In addition, Toray con-
cluded with Boeing and announced by
ducted joint research with RIKEN and
Performance Chemicals
Toray developed PICASUS™ VT, a
the Ministry of Economy, Trade and
identified the relationship between
Industry in January 2019, Toray was
water molecule diffusion behavior and
nano-layered film designed to deliver
the only company to be nominated
the strength of interacting networks
completely new functionality by offer-
from the composite materials sec-
formed by the polyamide molecules
ing frontal light transparency while
tor. The Company has commenced
that enable water permeability and
Toray Industries, Inc.
Integrated Annual Report 2020
102
R&D Percentage
Breakdown of
Total R&D
Expenses
in Fiscal 2019
Fibers &
Textiles
Performance
Chemicals
Carbon Fiber
Composite
Materials
Environment &
Engineering
Life Science
Corporate
R&D
9 %
28 %
15 %
7 %
4 %
37 %
substance removal capabilities in RO
membranes. Toray will draw on these
S
C
I
P
O
T
Commendation for Science and Technology from the Minister of
Education, Culture, Sports, Science and Technology Awarded for
Developing a Polyimide Coating
Toray received the 2020 Commendation for Science and Technology
analysis results to accelerate devel-
from the Minister of Education, Culture, Sports, Science and Technology
opment of innovative, energy-saving
regarding its development of a polyimide coating for organic electrolumi-
RO membranes and other advanced
nescent (EL) insulating films. The award recognizes Toray’s efforts over
separation membranes.
the years to deepen its photosensitive polyimide technology capabilities
Life Science
Toray expanded its clinical study sites
and for developing a positive photosensitive polyimide that dramatically
enhances the luminous reliability and productivity of OLED displays.
These results will contribute to the mass production and broader adop-
for TRK-950, which had been undergo-
tion of OLED displays, and significantly reduce coating waste losses,
ing a cancer immunotherapeutic study
thereby lowering environmental impact.
at two sites in the U.S.A. and one site
in France. Specifically, in April 2019,
the expanded study was started at
five sites in the U.S.A. and one site in
France to confirm the safety and effi-
Academy of Pharmaceutical Science and Technology, Japan (APSTJ)
Asahi Kasei Pharmaceutical Technology Award Received for
Developing Film Technologies and OD Tablets
Toray received the Academy of Pharmaceutical Science and Technology,
cacy of the drug and has been still ongo-
Japan (APSTJ) Asahi Kasei Pharmaceutical Technology Award for its
ing to apply for marketing approval at
the earliest possible time. Meanwhile,
TORAYMYXIN™, a hemoperfusion
development of a high-performance film technology for orally disinte-
grating (OD) tablets and REMITCH ®* OD tablets. This is the first time
Toray has been honored with the award, which is granted to outstanding
cartridge for removing endotoxins
research into the fundamentals and application of drug formulation and
from the blood during the treatment of
creation developments that address the transformations in approaches
sepsis, has been approved by the U.S.
to pharmaceutical quality on the international stage. The award was
Food and Drug Administration (FDA)
for clinical study enrollment of patients
with sepsis caused by COVID-19.
received in recognition of our contribution to new developments in
formulation technology through its success in perfecting RADIFIL®, a
fast-dissolving film coating technology applied to OD tablets and phar-
Similarly, Toray obtained interim permis-
maceutical film formulations as a means of helping to improve quality
sion for use in the treatment of patients
of life for those whose intake of liquids is restricted and elderly people
infected with COVID-19 in Canada from
with diminished swallowing functionality.
the Canadian Authority, Health Canada.
*REMITCH® is a registered trademark of Torii Pharmaceutical Co., Ltd.
Toray Industries, Inc.
Integrated Annual Report 2020
103
Intellectual Property Strategies
Patents Filed
Patents Held
Management
Strategies
5,383
5,654
5,299
1,537
1,617
1,641
3,846
4,037
3,658
15,727
17,156
5,809
9.918
5,745
11,411
19,849
6,361
13,488
17
18
19
(FY)
17
18
19
(FY)
R&D Strategies
Business Strategies
Domestic Overseas
Domestic Overseas
2.
3.
4.
Basic Policies on Intellectual Property
Toray Group has formulated and executes the following four intellec-
tual property strategies as its basic policies on intellectual property.
1.
Intellectual property strategies, as a part of the strategy
trinity, that conform to management principles
Toray Group regards intellectual property as one of its vital management
resources. We integrate our intellectual property strategies mutually
and organically with our business strategies and R&D strategies, and
as part of this “trinity,” we designate intellectual property strategies as
one of the most important elements of our management strategies.
Promoting the procurement of rights
In order to protect Toray Group’s products and technologies and to
ensure profits in terms of intellectual property, we hold as many
useful patent rights as possible and build patent portfolios. At the
same time, we are committed to patent rights acquisition made
efficient by enhancing the quality of individual patents.
Respecting the rights of others
Toray has operated a system for comprehensively investigating the
relations between its own products and technologies and patents
owned by other companies, and we thoroughly educate employees
to prevent infringement on patent rights of other parties.
Rightful enforcement of our own rights
When Toray Group’s patent rights are infringed upon by another
party, we take proper steps depending on the circumstances by
exercising our patent rights, such as demanding that infringement
cease, receiving monetary profits from licensing, and using our pat-
ent rights for cross-licensing with the patent rights of other parties.
Intellectual Property Strategies in Line with
Management Strategies
Under “AP-G 2022,” we formulated a medium-term management
program not only for R&D, but also for intellectual property, pro-
moting the following five measures.
1.
Strengthening Toray Group’s intellectual property capabilities
to address global business expansion
Under the guidance of Toray’s Executive Vice President in charge,
we are advancing intellectual property activities through the con-
struction of a framework in which we manage intellectual property
for group companies in and outside of Japan. We pay particular
attention to nurturing group companies that play a central role in
respective regions, and to supporting affiliated companies that have
newly joined the Group.
Toray Industries, Inc.
Integrated Annual Report 2020
104
2.
Strategic patent application and building barriers to entry by
protecting our knowhow
Considering the risk of imitations that arises following the publication
of applications, we are reinforcing a scheme whereby we put in place
barriers to entry by creatively leveraging patent applications and the
protecting our knowhow. Moreover, we continue to work toward
boosting the quality of patent specifications, which we have always
poured efforts into, together with undertaking initiatives to strengthen
patent applications and patenting of rights outside of Japan.
3.
Promoting intellectual property strategies that contribute to
our long-term corporate vision
We promote intellectual property activities that work to achieve
sound, sustainable growth espoused in the long-term corporate
vision “TORAY VISION 2030” announced in May of this year.
4.
Establishing an environment to support the promotion of
efficient intellectual property strategies
By digitizing and streamlining workflow for business tasks, such
as internal and external contacts, queries and responses, or the
paperwork involved in forms for circular-type consultations, we
are promoting the transition to paperless offices and enhancing
efficiency in intellectual property operations.
5.
Developing intellectual property-focused human resources
Toray is developing experts capable of promoting our intellectual
property strategies across the Group, specific to business areas
and regions. In particular, we are elevating the intellectual prop-
erty competency and capabilities of human resources at affiliated
companies, including national staff at group companies outside of
Japan, while pursuing patent applications and patenting of rights
across the Group, and promoting effective and efficient infringe-
ment prevention activities.
Toray Takes Top Spot on Patent Result’s Ranking for Fiber,
Paper and Pulp Industry
The “2019 Ranking of Capability to Prevent Other Companies
from Obtaining Patent Rights,” published annually by Patent
Result Co., Ltd., is an advanced patent application index that
compiles the number of patents by a company that were cited
as reasons for rejection of another company’s patent application
in the course of the patent deliberation process, in any particular
year. Toray was ranked No. 1 in the fiber, paper and pulp category
for the seventh consecutive year. As the same index benchmarks
are used, if “fiber, paper and pulp,” and “chemicals” categories
are treated as a single industry, Toray’s ranking becomes No. 3.
Intellectual property FINANCIAL SECTION
CONTENTS
106
Ten-Year Summary of Selected Financial Data
108 Management’s Discussion and Analysis
112
Consolidated Balance Sheets
114
Consolidated Statements of Income
115
Consolidated Statements of Comprehensive Income
115
Consolidated Statements of Changes in Net Assets
116
Consolidated Statements of Cash Flows
117
Notes to Consolidated Financial Statements
146
Independent Auditor’s Report
Toray Industries, Inc.
Integrated Annual Report 2020
105
Ten-Year Summary of Selected Financial Data
Toray Industries, Inc. and Consolidated Subsidiaries
Years ended March 31
Net sales
Fibers & Textiles
Performance Chemicals
Carbon Fiber Composite Materials
Environment & Engineering
Life Science
Others
Plastics & Chemicals
IT-related Products
Operating income
Income before income taxes
Net income attributable to owners of parent
Net cash provided by operating activities
Depreciation and amortization
Capital expenditures
Total assets
Property, plant and equipment, net
Interest-bearing liabilities
Net assets
Per share of common stock:
Net income attributable to owners of parent:
Basic
Diluted
Cash dividends
Net assets
Ratios:
Operating income to net sales
Net income attributable to owners of parent to net sales
Equity ratio
Return on equity
Debt/equity ratio (times)
Common stock price range:
High
Low
2011
2012
2013*1
¥ 1,539,693
¥ 1,588,604
¥ 1,592,279
584,115
638,375
632,150
—
67,018
178,183
52,430
13,621
382,299
262,027
100,087
82,893
57,925
129,214
70,479
55,942
—
69,914
170,247
55,554
13,295
397,815
243,404
107,721
101,091
64,218
104,410
67,443
98,384
—
77,620
178,355
56,599
14,127
395,835
237,593
83,436
77,828
48,477
100,815
67,588
99,135
1,567,470
1,581,501
1,731,933
531,595
493,509
640,970
561,923
481,906
674,149
627,240
532,002
778,626
¥
36.41
34.43
7.50
363.90
¥
39.41
37.46
10.00
384.90
¥
29.75
28.90
10.00
444.45
6.50
3.76
37.8
10.9
0.83
6.78
4.04
39.7
10.5
0.77
5.24
3.04
41.8
7.2
0.73
¥
¥
643
420
¥
631
511
654
421
Number of employees
38,740
40,227
42,584
*1 Certain overseas subsidiaries adopted IAS 19 “Employee Benefits” (revised on June 16, 2011) effective from the year ended March 31, 2014. The related fig-
ures for the year ended March 31, 2013 are retrospectively restated accordingly.
*2 Toray Group changed the reportable segments effective from the year ended March 31, 2018. The related figures for the year ended March 31, 2017 are ret-
rospectively restated accordingly.
*3 “Partial Amendments to Accounting Standard for Tax Effect Accounting” (Accounting Standards Board of Japan (ASBJ) Statement No. 28, February 16, 2018)
is applied from the year ended March 31, 2019 and onward. The related figures for the year ended March 31, 2018 are retrospectively restated accordingly.
Toray Industries, Inc.
Integrated Annual Report 2020
106
2014
2015
2016
2017*2
2018*3
2019
2020
¥ 1,837,778
¥ 2,010,734
¥ 2,104,430
¥ 2,026,470
¥ 2,204,858
¥ 2,388,848
¥ 2,214,633
Millions of yen
755,474
856,676
892,039
—
113,342
180,197
58,205
14,277
470,542
245,741
105,253
97,760
59,608
161,455
78,743
118,207
—
158,365
179,988
57,039
14,321
496,370
247,975
123,481
114,469
71,021
141,282
81,480
124,929
—
186,196
183,324
55,841
14,720
521,238
251,072
154,480
137,808
90,132
196,142
91,168
136,556
856,124
724,648
161,608
212,548
54,150
17,392
—
—
146,893
139,012
99,418
173,958
89,073
152,039
913,610
803,310
177,949
238,256
53,803
17,930
—
—
156,464
136,612
95,915
129,180
95,815
153,324
974,265
868,847
215,913
257,673
53,653
18,497
—
—
141,469
127,419
79,373
176,239
101,711
172,696
2,119,683
2,357,925
2,278,386
2,396,785
2,575,910
2,788,351
883,137
770,814
236,922
252,282
53,250
18,228
—
—
131,186
94,046
55,725
225,767
107,382
140,767
2,650,687
1,006,509
938,913
781,235
654,163
944,625
855,593
700,258
830,612
704,253
881,434
716,399
927,029
816,325
996,876
976,251
1,080,757
1,024,909
1,100,176
1,169,188
1,213,944
1,179,572
¥
36.59
35.70
10.00
527.32
¥
44.33
44.28
11.00
616.70
¥
56.38
56.31
13.00
591.50
¥
62.17
62.10
14.00
638.64
¥
59.97
59.90
15.00
681.92
¥
49.61
49.56
16.00
706.95
¥
34.83
34.58
16.00
683.61
5.73
3.24
40.5
7.5
0.76
786
584
¥
6.14
3.53
41.8
7.7
0.71
7.34
4.28
41.5
9.3
0.74
7.25
4.91
42.6
10.1
0.70
7.10
4.35
42.3
9.1
0.75
5.92
3.32
40.6
7.1
0.86
¥
1,057.5
¥
1,146.0
¥
1,027.5
¥
1,208.0
¥
1,035.5
¥
626
871.7
854.0
903.1
705.1
5.92
2.52
41.3
5.0
0.86
848.5
397.4
45,881
45,789
45,839
46,248
45,762
48,320
48,031
Yen
%
Yen
Toray Industries, Inc.
Integrated Annual Report 2020
107
Management’s Discussion and Analysis
CRITICAL ACCOUNTING POLICIES AND
ESTIMATES
OVERVIEW OF BUSINESS PERFORMANCE
The consolidated financial statements of Toray Group are
prepared in accordance with the accounting principles gen-
erally accepted in Japan. The significant accounting policies
employed to prepare the consolidated financial statements are
disclosed in Note 1. SIGNIFICANT ACCOUNTING POLICIES in
the Notes to the Consolidated Financial Statements. The pro-
cess of preparing consolidated financial statements involves
accounting estimates that affect the reported amounts of
assets, liabilities, revenue and expenses. Reasonable judge-
ments are made to determine these estimates by taking
several factors including past records into consideration;
however, as these estimates are subject to uncertainty, the
actual outcome may differ.
The assumptions on the novel coronavirus pandemic are
disclosed in Note 1. SIGNIFICANT ACCOUNTING POLICIES
p) Assumptions on the novel coronavirus pandemic for
accounting estimates in the Notes to the Consolidated
Financial Statements.
For the year ended March 31, 2020, the global economy
slowed down due to strong uncertainties caused by con-
cerns regarding the intensifying trade frictions between
the U.S. and China, the rising geopolitical risks in areas
such as the Middle East, and the political confusion over
Brexit in Europe. The Japanese economy was relatively
steady but lacked strength, affected by typhoons and other
natural disasters as well as the increase in the consump-
tion tax rate. Meanwhile, the novel coronavirus disease
spread globally in 2020 greatly disrupting the economies
of Japan and elsewhere, and production and consumption
activities, which were stagnating, started to rapidly decel-
erate. Under such circumstances, Toray Group, since April,
2017, worked on the medium-term management program
“Project AP-G 2019” that spans over three years through
fiscal year 2019 and implemented a growth strategy with
focus on taking advantage of growth business fields, pur-
suing business expansion in growth countries and regions
as well as further bolstering its cost competitiveness.
Net Sales by Segment
Net Sales by Segment
Operating Income by Segment
Operating Income by Segment
(Billions of yen)
2,500
(Billions of yen)
2,500
2,010.7
2,104.4
2,000
2,026.5
2,010.7
2,000
2,388.8
2,388.8
2,204.9
2,104.4
2,026.5
2,214.6
2,204.9
2,214.6
1,500
1,500
1,000
1,000
500
500
0
0
(Billions of yen)
200
(Billions of yen)
200
154.5
146.9
156.5
154.5
123.5
150
123.5
156.5
146.9
141.5
141.5
131.2
131.2
100
50
0
-50
150
100
50
0
-50
Mar/ ‘15
‘16
‘17
Mar/ ‘15
‘18
‘16
‘19
‘17
‘20
‘18
‘19
‘20
Mar/ ‘15
‘16
Mar/ ‘15
‘17
‘18
‘16
‘19
‘17
‘20
‘18
‘19
‘20
■ Fibers & Textiles ■ Performance Chemicals ■ Plastics & Chemicals
■ IT-related Products ■ Carbon Fiber Composite Materials
■ Environment & Engineering ■ Life Science ■ Others
■ Fibers & Textiles ■ Performance Chemicals ■ Plastics & Chemicals
■ IT-related Products ■ Carbon Fiber Composite Materials
■ Environment & Engineering ■ Life Science ■ Others
■ Fibers & Textiles ■ Performance Chemicals ■ Plastics & Chemicals
■ Fibers & Textiles ■ Performance Chemicals ■ Plastics & Chemicals
■ IT-related Products ■ Carbon Fiber Composite Materials
■ IT-related Products ■ Carbon Fiber Composite Materials
■ Environment & Engineering ■ Life Science ■ Others
■ Environment & Engineering ■ Life Science ■ Others
■ Adjustments
■ Adjustments
*1 Toray Group changed the reportable segments effective from the year ended March 31, 2018. The related figures for the year ended March 31, 2017 are retro-
Total Assets and Net Assets
spectively restated accordingly.
Total Assets and Net Assets
*2 Operating income by segment that is not attributable to any segment is included in “Adjustments.”
Interest-bearing Liabilities and D/E Ratio
Interest-bearing Liabilities and D/E Ratio
(Billions of yen)
2,800
(Billions of yen)
2,800
2,788.4
2,575.9
2,650.7
2,575.9
(%)
2,788.4
80
2,650.7
(%)
80
(Billions of yen)
1,000
(Billions of yen)
1,000
976.3
(Times)
976.3
1.20
(Times)
1.20
938.9
938.9
2,357.9
2,396.8
Toray Industries, Inc.
2,357.9
Integrated Annual Report 2020
2,278.4
2,396.8
2,278.4
60
750
700.3
750
704.3
716.4
716.4
700.3
704.3
0.90
0.90
816.3
816.3
0.86
0.86
0.86
0.86
0.75
0.75
2,100
108
2,100
1,400
41.8
41.5
1,400
60
40
20
0
‘19
42.6
41.8
42.3
41.5
42.6
40.6
42.3
41.3
40.6
41.3
0.71
0.74
0.70
0.71
0.74
0.70
40
500
500
0.60
0.60
1,080.8
1,024.9
1,100.2
1,080.8
1,169.2
1,024.9
1,213.9
1,100.2
1,179.6
1,169.2
1,213.9
1,179.6
700
700
20
250
250
0.30
0.30
0
0
0
0
0
Mar/
‘15
‘16
Mar/
‘17
‘15
‘18
‘16
‘19
‘17
‘20
‘18
‘20
Mar/
‘15
‘16
Mar/
‘17
‘15
‘18
‘16
‘19
‘17
‘20
‘18
‘20
0.00
‘19
0.00
■ Total Assets ■ Net Assets —Equity Ratio
■ Total Assets ■ Net Assets —Equity Ratio
■ Interest-bearing Liabilities
■ Interest-bearing Liabilities
—D/E Ratio
—D/E Ratio
Cash Flows
Cash Flows
(Billions of yen)
(Billions of yen)
300
200
100
0
-100
-200
-300
300
196.1
200
100
41.7
0
-100
-154.4
-200
-300
141.3
174.0
141.3
196.1
129.2
174.0
176.2
176.2
129.2
225.8
225.8
0.6
38.7
0.6
41.7
38.7
83.4
83.4
-57.5
-57.5
-84.0
-84.0
-140.7
-135.2
-140.7
-135.2
-142.4
-154.4
-186.7
-142.4
-186.7
Mar/
‘15
‘16
Mar/
‘17
‘15
‘16
‘18
‘17
‘19
‘18
‘20
‘19
‘20
-260.2
-260.2
■ Cash Flows from Operating Activities
■ Cash Flows from Operating Activities
■ Cash Flows from Investing Activities
■ Cash Flows from Investing Activities
—Free Cash Flows
—Free Cash Flows
INCOME ANALYSIS
Net Sales
Net sales for the year ended March 31, 2020 were ¥2,214.6
billion, down by ¥174.2 billion (7.3%) from the previ-
ous year. Regarding the sales by business segment, net
sales in the Carbon Fiber Composite Materials segment
increased, while those in the other segments decreased.
Costs and Expenses
The ratio of total costs and expenses to net sales for the
year ended March 31, 2020 was 94.1%, same as that of
the previous year.
Net sales and the cost of sales declined from the pre-
vious year by 7.3% and 8.2%, respectively. As a result,
the cost of sales ratio declined by 0.8 percentage points
to 80.2%.
Selling, general and administrative expenses declined
by ¥4.7 billion (1.5%) to ¥307.2 billion. The ratio of selling,
general and administrative expenses to net sales increased
by 0.8 percentage points to 13.9%.
R&D expenses increased by ¥0.5 billion (0.8%) to
¥66.9 billion.
Operating Income and Net Income
Operating income fell by ¥10.3 billion (7.3%) year on year
to ¥131.2 billion. The ratio of operating income to net sales
by 5.9%, unchanged from the previous year. Operating
income by business segment increased in the Carbon Fiber
Composite Materials, Life Science and Others segments
while decreasing in the Fibers & Textiles, Performance
Chemicals and Environment & Engineering segments.
In net other income (expenses), Toray Group reported
net expenses of ¥37.1 billion in the year ended March
31, 2020, up by ¥23.1 billion (164.3%) from the previous
year. Interest and dividend income increased by ¥0.1 bil-
lion (2.0%) to ¥7.0 billion. As a result, net financial expense
of ¥0.2 billion was recorded in the year ended March 31,
2020, down ¥0.1 billion compared with the previous year.
Net loss on sales and disposal of property, plant and equip-
ment amounted to ¥3.2 billion, a loss of ¥12.9 billion from
the previous year. Loss on impairment of fixed assets
declined by ¥10.8 billion (58.9 %) to ¥7.6 billion. Net gain of
¥2.4 billion on sales and write-down of investment securi-
ties was recorded, ameliorated by ¥3.0 billion year on year.
As a result of the aforementioned, income before
income taxes declined by ¥33.4 billion (26.2%) year on
year to ¥94.0 billion. After deductions for income taxes
and net income attributable to non-controlling interests,
net income attributable to owners of parent amounted to
¥55.7 billion, down ¥23.6 billion (29.8%) year on year.
Net income per share was ¥34.83, a decrease of
¥14.78. In light of profit conditions for the year ended
March 31, 2020 and outlook for the next year, the total
annual dividend for the year ended March 31, 2020 was set
at ¥16.00 per share. This comprised an interim cash divi-
dend of ¥8.00 per share and a year-end cash dividend of
¥8.00 per share.
Business Performance by Segment
Fibers & Textiles
All applications of the segment were affected by the weak
market conditions reflecting the prolonged trade friction
between the U.S. and China, the slowdown in the Chinese
economy, and two consecutive years of warm winter.
In Japan, while shipment of apparel and industrial appli-
cations remained weak in general, Toray Group pursued
sales expansion of materials for uniform in Japan and for
sports applications in the U.S. and Europe and focused on
strengthening cost competitiveness.
Overseas, demand for apparel applications includ-
ing garments and textiles as well as automotive applica-
tions, the mainstay of the industrial applications, remained
sluggish, and Toray Group focused on business structure
reform and strengthening of cost competitiveness.
The segment was also affected by the stagnation in
production and consumption activities both in Japan and
abroad due to the novel coronavirus pandemic.
As a result, overall sales of Fibers & Textiles segment
declined 9.4% to ¥883.1 billion compared with the previ-
ous year and operating income fell 16.7% to ¥60.7 billion.
Performance Chemicals
In the resins business, sales of both automotive and
home appliance applications were slow primarily due to
the impact of the slowdown in the Chinese economy and
stagnation of production activities due to the novel coro-
navirus pandemic. The chemicals business was affected
by the decline in the basic chemicals market. In the films
business, sales of battery separator films for lithium-ion
secondary batteries increased reflecting demand growth,
while polyester films were affected by the inventory
adjustment for optical as well as electronic parts related
applications. The electronic & information materials busi-
ness saw strong performance of OLED related materials
and electronic circuit materials.
As a result, overall sales of Performance Chemicals
segment declined 11.3% to ¥770.8 billion compared
with the previous year. Operating income fell 13.2% to
¥58.7 billion.
Toray Industries, Inc.
Integrated Annual Report 2020
109
Operating Income by Segment
(Billions of yen)
200
154.5
146.9
156.5
141.5
131.2
123.5
150
100
50
0
-50
500
250
0
■ Adjustments
(Billions of yen)
1,000
976.3
(Times)
1.20
938.9
750
700.3
704.3
816.3
716.4
0.86
0.86
0.75
0.71
0.74
0.70
0.90
0.60
0.30
0.00
Carbon Fiber Composite Materials
The Carbon Fiber Composite Materials segment remained
strong as a whole. Demand for aircraft application as well
as performance of industrial applications in the environ-
ment and energy-related fields such as compressed natu-
ral gas tanks and wind turbine blade remained strong, and
recovery in the demand for sports applications.
As a result, overall sales of Carbon Fiber Composite
Materials segment increased 9.7% to ¥236.9 billion com-
pared with the previous year and operating income rose
81.6% to ¥21.0 billion.
Environment & Engineering
In the water treatment business, demand for reverse
osmosis membranes and other products grew strongly on
the whole in Japan and overseas.
Among domestic subsidiaries in the segment, a con-
struction subsidiary was negatively affected by the decline
of high profit project orders, and an engineering subsidiary
experienced decreases in the shipment of some electron-
ics related equipment.
As a result, overall sales of Environment & Engineering
segment declined 2.1% to ¥252.3 billion compared with
the previous year and operating income declined 8.1% to
¥11.2 billion.
Life Science
In the pharmaceutical business, sales of orally active pros-
tacyclin derivative DORNER® were affected by the intro-
duction of its generic versions. While sales of pruritus
treatment REMITCH®* were also influenced by the intro-
duction of its generic versions, its shipment was strong
partly due to the growth in the entire market.
FINANCIAL POSITION
2,010.7
2,104.4
2,214.6
2,388.8
2,204.9
Analysis of Assets, Liabilities and Net Assets
Net Sales by Segment
As of March 31, 2020, Toray Group’s total assets stood
(Billions of yen)
at ¥2,650.7 billion, down ¥137.7 billion from the end of
2,500
the previous year. Current assets fell ¥62.9 billion as trade
receivables declined, and non-current assets fell ¥74.8 bil-
lion due primarily to a decline in investment securities.
2,026.5
2,000
Total liabilities declined ¥103.3 billion from the end
of the previous year to ¥1,471.1 billion, owing mainly to
declines in trade payables and long-term debt.
1,500
Net assets decreased by ¥34.4 billion compared with
the end of the previous year to ¥1,179.6 billion, reflecting
a change in foreign currency translation adjustments. Net
1,000
assets less non-controlling interests and stock acquisition
rights stood at ¥1,093.7 billion. The equity ratio at March
31, 2020 came to 41.3%, a 0.7 percentage-point increase
compared with the level at the end of the previous year.
500
0
Mar/ ‘15
‘16
‘17
‘18
‘19
‘20
Mar/ ‘15
‘16
‘17
‘18
‘19
‘20
■ Fibers & Textiles ■ Performance Chemicals ■ Plastics & Chemicals
■ IT-related Products ■ Carbon Fiber Composite Materials
■ Environment & Engineering ■ Life Science ■ Others
■ Fibers & Textiles ■ Performance Chemicals ■ Plastics & Chemicals
■ IT-related Products ■ Carbon Fiber Composite Materials
■ Environment & Engineering ■ Life Science ■ Others
Total Assets and Net Assets
Interest-bearing Liabilities and D/E Ratio
(Billions of yen)
2,800
2,788.4
2,575.9
2,650.7
(%)
80
2,357.9
2,278.4
2,396.8
In the medical devices business, shipment of dialyzers
2,100
grew strongly in Japan and overseas.
As a result, overall sales of Life Science segment
declined 0.8% to ¥53.3 billion compared with the previous
year, while operating income rose 24.9% to ¥1.6 billion.
*REMITCH® is a registered trademark of Torii Pharmaceutical Co., Ltd.
Others
Net sales declined by ¥0.3 billion (1.5%) from the previous
year to ¥18.2 billion, and operating income increased by
¥0.3 billion (10.1%) to ¥3.4 billion.
1,400
700
0
41.8
41.5
42.6
42.3
40.6
41.3
1,080.8
1,024.9
1,100.2
1,169.2
1,213.9
1,179.6
60
40
20
0
Mar/
‘15
‘16
‘17
‘18
‘19
‘20
Mar/
‘15
‘16
‘17
‘18
‘19
‘20
■ Total Assets ■ Net Assets —Equity Ratio
* “Partial Amendments to Accounting Standard for Tax Effect Accounting”
(ASBJ Statement No. 28, February 16, 2018) is applied from the year ended
March 31, 2019 and onward. The related figures for the year ended March
31, 2018 are retrospectively restated accordingly.
■ Interest-bearing Liabilities
—D/E Ratio
Toray Industries, Inc.
Integrated Annual Report 2020
110
Cash Flows
(Billions of yen)
300
196.1
141.3
174.0
176.2
129.2
41.7
38.7
0.6
225.8
83.4
-140.7
-154.4
-135.2
-142.4
-57.5
-84.0
-186.7
-260.2
200
100
0
-100
-200
-300
Mar/
‘15
‘16
‘17
‘18
‘19
‘20
■ Cash Flows from Operating Activities
■ Cash Flows from Investing Activities
—Free Cash Flows
Net Sales by Segment
(Billions of yen)
2,500
2,388.8
2,204.9
2,214.6
2,104.4
2,010.7
2,026.5
Operating Income by Segment
(Billions of yen)
200
154.5
146.9
156.5
141.5
131.2
123.5
2,000
1,500
1,000
500
0
Mar/ ‘15
‘16
‘17
‘18
‘19
‘20
Mar/ ‘15
‘16
‘17
‘18
‘19
‘20
■ Fibers & Textiles ■ Performance Chemicals ■ Plastics & Chemicals
■ IT-related Products ■ Carbon Fiber Composite Materials
■ Environment & Engineering ■ Life Science ■ Others
■ Fibers & Textiles ■ Performance Chemicals ■ Plastics & Chemicals
■ IT-related Products ■ Carbon Fiber Composite Materials
■ Environment & Engineering ■ Life Science ■ Others
Cash Flows from Investing Activities
Net cash used in investing activities totaled ¥142.4 billion,
down ¥117.9 billion (45.3%) compared with the previous
Total Assets and Net Assets
year. This largely reflected the absence of payments for
(%)
(Billions of yen)
the purchase of shares in subsidiaries that resulted in a
2,800
80
change in the scope of consolidation, which were recorded
¥114.6 billion in the previous year.
2,278.4
2,357.9
2,575.9
2,788.4
2,650.7
2,396.8
150
100
50
0
-50
500
250
0
■ Adjustments
(Billions of yen)
1,000
Interest-bearing Liabilities and D/E Ratio
976.3
(Times)
1.20
938.9
750
700.3
704.3
816.3
716.4
0.86
0.86
0.75
0.71
0.74
0.70
0.90
0.60
0.30
0.00
Cash Flows from Financing Activities
2,100
60
Net cash used in financing activities came to ¥67.6 billion,
down by ¥186.5 billion compared with the net cash inflow
of ¥118.9 billion in the previous year. Major cash-decreas-
1,400
40
ing factors included a decrease of ¥147.5 billion (62.9%) in
proceeds from long-term debt of ¥87.0 billion compared
with ¥234.5 billion for the previous year, and an increase in
repayment of long-term debt of ¥91.6 billion, up by ¥24.7
20
(37.0%) billion from the previous year.
1,169.2
1,080.8
1,024.9
1,100.2
0
0
Mar/
‘15
‘16
‘17
‘18
‘19
‘20
Mar/
‘15
‘16
‘17
‘18
‘19
‘20
■ Total Assets ■ Net Assets —Equity Ratio
■ Interest-bearing Liabilities
—D/E Ratio
1,179.6
1,213.9
41.8
41.5
42.6
41.3
40.6
42.3
700
CASH FLOWS
For the year ended March 31, 2020, net cash provided
Operating Income by Segment
by operating activities exceeded net cash used in invest-
(Billions of yen)
ing activities by ¥83.4 billion. Meanwhile, net cash used in
200
financing activities came to ¥67.6 billion owing mainly to
the decrease in interest-bearing liabilities. As a result, after
counting exchange rate changes, cash and cash equiva-
150
lents as of March 31, 2020 amounted to ¥183.7 billion, up
by ¥10.6 billion (6.1%) compared with the end of the previ-
ous year on a consolidated basis.
100
146.9
141.5
131.2
156.5
123.5
154.5
0
Cash Flows from Operating Activities
Net cash provided by operating activities increased by
50
¥49.5 billion (28.1%) compared with the previous year to
¥225.8 billion. Looking at major movements, the decrease
in trade receivables was held to ¥37.2 billion compared
with the increase of ¥33.6 billion in the previous year. In
the year ended March 31, 2020, the Group reported a
decrease in inventories of ¥18.1 billion compared with
-50
a decrease of ¥28.4 billion for the previous year and a
decrease in trade payables of ¥23.6 billion compared with
■ Fibers & Textiles ■ Performance Chemicals ■ Plastics & Chemicals
a decrease of ¥11.8 billion in the previous year.
■ IT-related Products ■ Carbon Fiber Composite Materials
■ Environment & Engineering ■ Life Science ■ Others
■ Adjustments
Mar/ ‘15
‘16
‘17
‘18
‘19
‘20
Total Assets and Net Assets
Interest-bearing Liabilities and D/E Ratio
Cash Flows
(Billions of yen)
2,800
2,788.4
2,575.9
2,650.7
(%)
80
(Billions of yen)
1,000
976.3
938.9
(Times)
1.20
(Billions of yen)
300
2,357.9
2,278.4
2,396.8
41.8
41.5
42.6
42.3
40.6
41.3
1,080.8
1,024.9
1,100.2
1,169.2
1,213.9
1,179.6
60
40
20
0
750
700.3
704.3
816.3
716.4
0.71
0.74
0.70
0.75
0.90
0.86
0.86
196.1
200
100
141.3
174.0
176.2
129.2
41.7
38.7
0.6
225.8
83.4
500
250
0
0.60
0
0.30
-100
-200
0.00
-300
-57.5
-84.0
-140.7
-154.4
-135.2
-142.4
-186.7
-260.2
Mar/
‘15
‘16
‘17
‘18
‘19
‘20
Mar/
‘15
‘16
‘17
‘18
‘19
‘20
Mar/
‘15
‘16
‘17
‘18
‘19
‘20
■ Total Assets ■ Net Assets —Equity Ratio
■ Interest-bearing Liabilities
—D/E Ratio
■ Cash Flows from Operating Activities
■ Cash Flows from Investing Activities
—Free Cash Flows
Toray Industries, Inc.
Integrated Annual Report 2020
111
Net Sales by Segment
(Billions of yen)
2,500
2,388.8
2,204.9
2,214.6
2,104.4
2,010.7
2,026.5
Mar/ ‘15
‘16
‘17
‘18
‘19
‘20
■ Fibers & Textiles ■ Performance Chemicals ■ Plastics & Chemicals
■ IT-related Products ■ Carbon Fiber Composite Materials
■ Environment & Engineering ■ Life Science ■ Others
Cash Flows
(Billions of yen)
196.1
141.3
174.0
176.2
129.2
41.7
38.7
0.6
225.8
83.4
-140.7
-154.4
-135.2
-142.4
-57.5
-84.0
-186.7
-260.2
Mar/
‘15
‘16
‘17
‘18
‘19
‘20
■ Cash Flows from Operating Activities
■ Cash Flows from Investing Activities
—Free Cash Flows
2,000
1,500
1,000
500
0
2,100
1,400
700
0
300
200
100
0
-100
-200
-300
Consolidated Balance Sheets
Toray Industries, Inc. and Consolidated Subsidiaries
March 31, 2020 and 2019
Assets
Current assets:
Cash (Note 5)
Time deposits (Notes 4 and 5)
Trade receivables (Notes 5 and 7):
Notes receivable
Accounts receivable
Inventories (Note 3)
Prepaid expenses and other current assets (Notes 5 and 6)
Allowance for doubtful accounts
Total current assets
Property, plant and equipment (Notes 4 and 13):
Land
Buildings
Machinery and equipment
Construction in progress
Other
Accumulated depreciation
Millions of yen
Thousands of
U.S. dollars (Note 2)
2020
2019
2020
¥
142,496
¥
140,701
$ 1,309,706
31,202
27,806
286,783
53,856
429,905
393,655
79,907
(2,569)
56,346
474,712
419,527
74,517
(2,280)
495,000
3,951,333
3,618,153
734,439
(23,612)
1,128,452
1,191,329
10,371,801
72,566
77,687
666,967
666,509
651,084
6,126,002
1,994,262
1,989,553
18,329,614
134,496
147,128
143,847
121,512
1,236,176
1,352,279
3,014,961
2,983,683
27,711,039
(2,008,452)
(1,986,807)
(18,460,037)
Property, plant and equipment, net
1,006,509
996,876
9,251,002
Intangible assets (Note 13):
Goodwill
Other
Total intangible assets
Investments and other assets:
71,950
78,741
85,712
85,537
661,305
723,722
150,691
171,249
1,385,028
Investments in unconsolidated subsidiaries and affiliated companies
(Note 5)
149,339
163,052
1,372,601
Investment securities (Notes 4, 5 and 6)
152,956
188,000
1,405,846
Long-term loans receivable
Deferred tax assets (Note 10)
Other (Notes 4 and 8)
Allowance for doubtful accounts
5,579
18,215
41,437
2,477
21,978
56,171
(2,491)
(2,781)
51,278
167,417
380,855
(22,895)
Total investments and other assets
365,035
428,897
3,355,101
Total assets
¥ 2,650,687
¥ 2,788,351
$ 24,362,932
See accompanying notes to consolidated financial statements.
Toray Industries, Inc.
Integrated Annual Report 2020
112
Liabilities and Net Assets
Current liabilities:
Millions of yen
Thousands of
U.S. dollars (Note 2)
2020
2019
2020
Short-term bank loans (Notes 4 and 5)
¥
132,358
¥
175,567
$ 1,216,526
Current portion of long-term debt (Notes 4, 5 and 7)
Commercial paper (Note 5)
Trade payables (Notes 5 and 7):
Notes payable
Accounts payable
Income taxes payable (Note 10)
Accrued liabilities
Other current liabilities (Note 4)
Total current liabilities
Non-current liabilities:
Long-term debt (Notes 4, 5 and 7)
Deferred tax liabilities (Note 10)
Net defined benefit liability (Note 8)
Other non-current liabilities (Note 4)
Total non-current liabilities
Total liabilities
Net assets (Note 11):
Stockholders’ equity:
Common stock:
Authorized—4,000,000,000 shares
Issued—1,631,481,403 shares
Capital surplus
Retained earnings
Treasury stock, at cost
108,131
10,000
94,094
—
993,851
91,912
36,482
38,824
335,313
175,841
201,730
1,616,186
11,185
59,937
96,841
630,775
13,578
64,850
107,850
696,493
102,803
550,892
890,083
5,797,564
673,068
702,761
6,186,287
33,916
48,758
100,575
100,730
32,781
25,665
311,728
924,403
301,296
840,340
877,914
7,723,713
1,471,115
1,574,407
13,521,278
147,873
147,873
1,359,127
118,062
849,268
117,760
817,263
1,085,129
7,805,772
(20,308)
(20,358)
(186,654)
Total stockholders’ equity
1,094,895
1,062,538
10,063,373
Accumulated other comprehensive income:
Net unrealized gains (losses) on securities
Net deferred gains (losses) on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Stock acquisition rights (Note 9)
Non-controlling interests
Total net assets
Total liabilities and net assets
44,096
1,162
(44,114)
(2,291)
(1,147)
1,602
84,222
64,662
75
896
2,862
68,495
1,338
81,573
405,294
10,680
(405,460)
(21,057)
(10,542)
14,724
774,099
1,179,572
1,213,944
10,841,654
¥ 2,650,687
¥ 2,788,351
$ 24,362,932
Toray Industries, Inc.
Integrated Annual Report 2020
113
Consolidated Statements of Income
Toray Industries, Inc. and Consolidated Subsidiaries
Years ended March 31, 2020 and 2019
Net sales
Costs and expenses:
Cost of sales (Notes 3, 8, 13 and 14)
Selling, general and administrative expenses (Notes 8, 9, 13 and 14)
Operating income
Other income (expenses):
Interest expenses
Interest and dividend income
Equity in earnings (losses) of unconsolidated subsidiaries and affiliated
companies (Note 15)
Gain (loss) on sales and disposal of property, plant and equipment, net
Loss on impairment of fixed assets (Note 16)
Gain (loss) on sales and loss on write-down of investment securities, net
Gain on return of assets from retirement benefits trust
Settlement package
Other, net
Income before income taxes
Income taxes (Note 10):
Current
Deferred
Net income
Net income attributable to non-controlling interests
Millions of yen
Thousands of
U.S. dollars (Note 2)
2020
2019
2020
¥ 2,214,633
¥ 2,388,848
$ 20,355,083
1,776,276
307,171
2,083,447
131,186
1,935,486
311,893
2,247,379
141,469
16,326,066
2,823,263
19,149,329
1,205,754
(7,235)
7,024
(7,161)
6,883
(10,805)
9,619
(3,163)
(7,569)
2,383
—
—
(17,775)
(37,140)
94,046
28,201
930
29,131
64,915
9,190
9,751
(18,414)
(625)
2,532
(864)
(15,771)
(14,050)
127,419
37,293
2,338
39,631
87,788
8,415
(66,498)
64,559
(99,311)
(29,072)
(69,568)
21,903
—
—
(163,373)
(341,360)
864,393
259,200
8,548
267,748
596,645
84,467
Net income attributable to owners of parent
¥
55,725
¥
79,373
$
512,178
See accompanying notes to consolidated financial statements.
Consolidated Statements of Comprehensive Income
Toray Industries, Inc. and Consolidated Subsidiaries
Years ended March 31, 2020 and 2019
Net income
Other comprehensive income (Note 17)
Net unrealized gains (losses) on securities
Net deferred gains (losses) on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive income of unconsolidated subsidiaries and
affiliated companies accounted for by the equity method
Total other comprehensive income
Comprehensive income
Total comprehensive income attributable to:
Owners of parent
Non-controlling interests
See accompanying notes to consolidated financial statements.
Toray Industries, Inc.
Integrated Annual Report 2020
114
Millions of yen
Thousands of
U.S. dollars (Note 2)
2020
2019
2020
¥ 64,915
¥ 87,788
$ 596,645
(20,488)
1,037
(44,857)
(5,083)
(9,579)
1,064
(4,767)
(1,325)
(188,309)
9,531
(412,289)
(46,719)
(2,904)
(605)
(26,691)
(72,295)
¥ (7,380)
(15,212)
¥ 72,576
(664,476)
$ (67,831)
¥ (13,917)
¥ 65,491
$ (127,914)
6,537
7,085
60,083
Consolidated Statements of Changes in Net Assets
Toray Industries, Inc. and Consolidated Subsidiaries
Years ended March 31, 2020 and 2019
Stockholders’ equity
Accumulated other comprehensive income
Millions of yen
Common
stock
Capital
surplus
Retained
earnings
Treasury
stock,
at cost
Total
stockholders’
equity
Net
unrealized
gains
(losses) on
securities
Net
deferred
gains (losses)
on hedges
Foreign
currency
translation
adjustments
Remeasure-
ments of
defined
benefit plans
Total
accumulated
other com-
prehensive
income
Stock
acquisition
rights
Non-
controlling
interests
Total net
assets
Balance as of April 1, 2018
¥ 147,873
¥ 117,572
¥ 763,504
¥ (20,631) ¥ 1,008,318
¥ 74,290
¥
(901)
¥
4,830
¥ 4,158
¥ 82,377
¥ 1,334
¥ 77,159
¥ 1,169,188
Changes in:
Dividends
Net income attributable
to owners of parent
Purchase of treasury stock
Disposal of treasury stock
Change in equity attributable to
parent arising from transaction with
non-controlling shareholders
Other
Items other than
stockholders’ equity, net
(25,608)
79,373
14
174
(2)
273
(6)
2
(25,608)
79,373
(2)
287
174
(4)
(9,628)
Total changes
—
188
53,759
273
54,220
(9,628)
Balance as of March 31, 2019
¥ 147,873
¥ 117,760
¥ 817,263
¥ (20,358) ¥ 1,062,538
¥ 64,662
Balance as of April 1, 2019
¥ 147,873
¥ 117,760
¥ 817,263
¥ (20,358) ¥ 1,062,538
¥ 64,662
(25,608)
79,373
(2)
287
174
(4)
976
976
75
75
¥
¥
(3,934)
(1,296)
(13,882)
(3,934)
(1,296)
(13,882)
4
4
4,414
4,414
(9,464)
44,756
¥
¥
896
896
¥ 2,862
¥ 68,495
¥ 1,338
¥ 81,573
¥ 1,213,944
¥ 2,862
¥ 68,495
¥ 1,338
¥ 81,573
¥ 1,213,944
Changes in:
Dividends
Net income attributable
to owners of parent
Purchase of treasury stock
Disposal of treasury stock
Change in equity attributable to
parent arising from transaction with
non-controlling shareholders
Other
Items other than
stockholders’ equity, net
(25,612)
55,725
10
292
(25,612)
55,725
(1)
61
292
(1)
51
1,892
1,892
(20,566)
1,087
(45,010)
(5,153)
(69,642)
Total changes
—
302
32,005
50
32,357
(20,566)
1,087
(45,010)
(5,153)
(69,642)
(25,612)
55,725
(1)
61
292
1,892
264
264
2,649
(66,729)
2,649
(34,372)
Balance as of March 31, 2020
¥ 147,873 ¥ 118,062 ¥ 849,268
¥ (20,308) ¥ 1,094,895
¥ 44,096
¥ 1,162
¥ (44,114)
¥ (2,291)
¥ (1,147)
¥ 1,602
¥ 84,222 ¥ 1,179,572
Stockholders’ equity
Accumulated other comprehensive income
Thousands of U.S. dollars (Note 2)
Common
stock
Capital
surplus
Retained
earnings
Treasury
stock,
at cost
Total
stockholders’
equity
Net
unrealized
gains
(losses) on
securities
Net
deferred
gains (losses)
on hedges
Foreign
currency
translation
adjustments
Remeasure-
ments of
defined
benefit plans
Total
accumulated
other com-
prehensive
income
Stock
acquisition
rights
Non-
controlling
interests
Total net
assets
Balance as of April 1, 2019
$ 1,359,127 $ 1,082,353 $ 7,511,608 $
(187,114) $
9,765,974
$
594,320
$
689 $
8,235
$
26,305
$ 629,550
$ 12,298
$ 749,752 $ 11,157,574
Changes in:
Dividends
Net income attributable
to owners of parent
Purchase of treasury stock
Disposal of treasury stock
Change in equity attributable to
parent arising from transaction with
non-controlling shareholders
Other
Items other than
stockholders’ equity, net
(235,404)
512,178
17,390
92
2,684
(9)
469
(235,404)
512,178
(9)
561
2,684
17,390
(235,404)
512,178
(9)
561
2,684
17,390
(189,026)
9,991
(413,695)
(47,362)
(640,092)
2,426
24,347
(613,318)
Total changes
—
2,776
294,164
460
297,399
(189,026)
9,991
(413,695)
(47,362)
(640,092)
2,426
24,347
(315,919)
Balance as of March 31, 2020
$ 1,359,127 $ 1,085,129 $ 7,805,772 $ (186,654) $ 10,063,373
$ 405,294
$ 10,680 $ (405,460) $ (21,057)
$ (10,542)
$ 14,724 $ 774,099 $ 10,841,654
See accompanying notes to consolidated financial statements.
Toray Industries, Inc.
Integrated Annual Report 2020
115
Consolidated Statements of Cash Flows
Toray Industries, Inc. and Consolidated Subsidiaries
Years ended March 31, 2020 and 2019
Cash flows from operating activities:
Income before income taxes
Adjustments to reconcile income before income taxes to net cash
provided by operating activities:
Depreciation and amortization
Loss on impairment of fixed assets
Interest and dividend income
Equity in losses (earnings) of unconsolidated subsidiaries and
affiliated companies
Interest expenses
Loss (gain) on sales and disposal of property, plant and equipment, net
Loss (gain) on sales and write-down of investment securities, net
Increase (decrease) in net defined benefit liability
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Other, net
Subtotal
Interest and dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities:
Capital expenditures
Purchase of investment securities
Proceeds from sales of property, plant and equipment
Proceeds from sales of investment securities
Acquisition of shares of consolidated subsidiaries resulting in
change in scope of consolidation (Note 18)
Other, net
Net cash used in investing activities
Cash flows from financing activities:
Net increase (decrease) in short-term debt
Proceeds from long-term debt
Repayment of long-term debt
Cash dividends paid
Payments from changes in ownership interests in subsidiaries that do not
result in change in scope of consolidation
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Millions of yen
Thousands of
U.S. dollars (Note 2)
2020
2019
2020
¥ 94,046
¥ 127,419
$ 864,393
107,382
7,569
(7,024)
101,711
18,414
(6,883)
10,805
(9,619)
7,235
3,163
(2,230)
(999)
37,191
18,116
(23,582)
(6,851)
244,821
16,420
(5,550)
(29,924)
225,767
7,161
(9,751)
666
(1,451)
(33,582)
28,427
(11,843)
(464)
210,205
15,704
(7,098)
(42,572)
176,239
986,967
69,568
(64,559)
99,311
66,498
29,072
(20,496)
(9,182)
341,829
166,507
(216,746)
(62,969)
2,250,193
150,919
(51,011)
(275,037)
2,075,064
(140,147)
(7,317)
6,018
8,372
(169,630)
(4,131)
19,254
8,387
(1,288,116)
(67,252)
55,313
76,949
—
(114,564)
—
(9,290)
(142,364)
437
(260,247)
(85,386)
(1,308,493)
(30,024)
87,026
(91,581)
(28,934)
(18,596)
234,530
(66,843)
(29,875)
(274)
(344)
(3,807)
(67,594)
19
118,891
(5,206)
10,603
(327)
34,556
(275,956)
799,871
(841,737)
(265,938)
(2,518)
(34,991)
(621,268)
(47,849)
97,454
Cash and cash equivalents at beginning of year
173,078
134,315
1,590,790
Beginning balance of cash and cash equivalents at subsidiaries not
previously included in consolidation
—
4,207
—
Cash and cash equivalents at end of year
¥ 183,681
¥ 173,078
$ 1,688,244
See accompanying notes to consolidated financial statements.
Toray Industries, Inc.
Integrated Annual Report 2020
116
Consolidated Statements of Cash Flows
Toray Industries, Inc. and Consolidated Subsidiaries
Years ended March 31, 2020 and 2019
Notes to Consolidated Financial Statements
Toray Industries, Inc. and Consolidated Subsidiaries
Years ended March 31, 2020 and 2019
1. SIGNIFICANT ACCOUNTING POLICIES
a) Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements of Toray
Industries, Inc. (the Company) and its consolidated subsidiaries
have been prepared in accordance with the provisions set forth
in the Financial Instruments and Exchange Act of Japan and its
related accounting regulations, and in conformity with accounting
principles and practices generally accepted in Japan, which are dif-
ferent in certain respects as to application and disclosure require-
ments of International Financial Reporting Standards (IFRS).
For the preparation of consolidated financial statements, the
accounting policies and procedures applied to a parent com-
pany and its subsidiaries for similar transactions and events
under similar circumstances should be unified, in principle.
However, financial statements prepared by overseas subsidiar-
ies in accordance with IFRS or the generally accepted account-
ing principles in the United States tentatively may be used for
the consolidation process. In addition, some items should be
adjusted in the consolidation process so that net income is
accurately accounted for, unless they are not material.
Certain items presented in the original consolidated finan-
cial statements in Japanese have been reclassified for the
convenience of readers outside Japan.
b) Principles of Consolidation
The accompanying consolidated financial statements include the
accounts of the Company and substantially all of its subsidiaries.
Assets and liabilities of the consolidated subsidiaries are
revalued to fair market value when the Company acquires
control over the subsidiaries.
Investments in unconsolidated subsidiaries and affiliated
companies are accounted for by the equity method.
All intercompany accounts and transactions have been
eliminated in consolidation. The difference between the con-
sideration transferred and the net identifiable assets of the
subsidiaries is recognized as goodwill and amortized princi-
pally over its estimated useful life not exceeding twenty years
on a straight-line method.
c) Cash and Cash Equivalents
Cash and cash equivalents at March 31, 2020 and 2019 include
cash, short-term time deposits which may be withdrawn on
demand without diminution of principal and highly liquid invest-
ments with original maturities of three months or less.
Cash and cash equivalents consisted of:
Millions of yen
Thousands of
U.S. dollars
2020
2019
2020
Cash
¥ 142,496 ¥ 140,701
$ 1,309,706
Time deposits
31,202
27,806
286,783
Less—Time deposits with
maturities of over
3 months
Marketable securities with
original maturities of
3 months or less
(4,788)
(2,841)
(44,007)
14,771
7,412
135,763
Cash and cash equivalents ¥ 183,681 ¥ 173,078
$ 1,688,244
d) Financial Instruments
Derivatives:
All derivatives are stated at fair value, with changes in fair
value included in net income or loss for the period in which
they arise, except for derivatives that are designated as
“hedging instruments” (see Hedge Accounting below).
Securities:
Held-to-maturity debt securities that the Company and its con-
solidated subsidiaries have the intent to hold to maturity, are
stated at cost after accounting for premium or discount on
acquisition, which are amortized over the period to maturity.
Other securities for which market quotations are avail-
able are stated at fair value. Net unrealized gains or losses on
these securities are reported as a separate item in net assets
at a net-of-tax amount.
Other securities for which market quotations are unavail-
able are stated at cost, except as stated in the paragraph
below.
In cases where the fair value of held-to-maturity debt
securities or other securities has declined significantly and
such impairment of the value is not deemed temporary, those
securities are written down to fair value and the resulting
losses are included in net income or loss for the period.
Hedge Accounting:
Gains or losses arising from changes in fair value of derivatives
designated as “hedging instruments” are deferred as a sepa-
rate item of net assets at a net-of-tax amount and included in
net income or loss in the same period during which the gains
and losses on the hedged items or transactions are recognized.
The derivatives designated as hedging instruments by
the Company and its consolidated subsidiaries are principally
interest rate swaps and forward foreign exchange contracts.
The related hedged items are trade accounts receivable and
payable, long-term bank loans and debt securities issued by
the Company and its consolidated subsidiaries.
The Company and its consolidated subsidiaries have a pol-
icy to utilize the above hedging instruments in order to reduce
their exposure to the risk of interest rate and foreign currency
fluctuations. Thus, their purchases of the hedging instruments
are limited to, at maximum, the amounts of the hedged items.
The Company and its consolidated subsidiaries evaluate
the effectiveness of hedging activities by reference to the
accumulated gains or losses on the hedging instruments
and the related hedged items from the commencement of
the hedges.
Toray Industries, Inc.
Integrated Annual Report 2020
117
i) Consumption Taxes
Transactions subject to consumption taxes are recorded at
amounts exclusive of consumption taxes.
j) Retirement Benefits
The Company and some of its consolidated subsidiaries have
unfunded lump-sum benefit plans, funded contributory pen-
sion plans and/or defined contribution pension plans covering
eligible employees.
Under the terms of the unfunded lump-sum benefit plans,
eligible employees are entitled under most circumstances,
upon mandatory retirement or earlier voluntary severance, to
indemnities based on compensation at the time of severance
and years of service.
The funded contributory pension plans and the defined
contribution pension plans provide, in general, pension pay-
ments for life commencing from age 60.
To provide for the payment of retirement benefits to
employees, net defined benefit liability is recognized at an
amount equal to the expected retirement benefit obligations
net of the fair value of pension assets at the end of the period.
Past service cost is amortized as incurred using the
straight-line method over a certain period within the employ-
ees’ average remaining years of service (primarily 12 years).
Actuarial gains and losses are amortized from the follow-
ing fiscal year after recognition using the straight-line method
over a certain period within the employees’ average remain-
ing years of service (primarily 12 years).
Unrecognized actuarial gains and losses and unrecog-
nized past service cost are recognized in remeasurements of
defined benefit plans in accumulated other comprehensive
income under the net assets section, net of deferred taxes.
An allowance is separately provided against retirement
benefits for the members of the boards of some consoli-
dated subsidiaries and is included in “other non-current lia-
bilities” on the consolidated balance sheets. The amount is
calculated based on the internal company policies as the esti-
mated amount that would be payable if all such board mem-
bers were to retire at the balance sheet date.
k) Appropriation of Retained Earnings
Cash dividends are recorded in the fiscal year when the pro-
posed appropriation of retained earnings is approved by the
Board of Directors and/or stockholders.
l) Foreign Currency Transactions
All monetary assets and liabilities denominated in foreign cur-
rencies, whether long-term or short-term, are translated into
Japanese yen at the exchange rates prevailing at the balance
sheet date. Resulting gains and losses are included in net
income or loss for the period.
e) Allowance for Doubtful Accounts
In the Company and its domestic consolidated subsidiaries,
an allowance for doubtful accounts, including receivables and
loans, is determined from the amounts considered unlikely to
be recovered, estimated from past actual bad debt ratio records
for general receivables and from studying the probability of
recovery in individual cases where there is concern over claims.
f) Inventories
Inventories are stated at the lower of acquisition cost, princi-
pally determined by the moving average method, or net sell-
ing value to reflect any decreased profitability of inventories.
g) Property, Plant and Equipment
Property, plant and equipment are stated at cost.
Depreciation for property, plant and equipment (except
leased assets) is principally computed by the straight-line method
at rates based on estimated useful lives that are as follows:
Buildings
Machinery and equipment
3–60 years
3–15 years
Right-of-use assets are depreciated using the straight-
line method over the shorter of the useful lives of the assets
or the lease terms. The depreciation method of other leased
assets under finance leases is principally identical to the
method applicable to its own fixed assets.
h) Income Taxes
Income taxes of the Company and its domestic consolidated
subsidiaries consist of corporate income taxes, local inhabitants
taxes and enterprise taxes. Deferred income taxes are deter-
mined using the asset and liability approach, where deferred
tax assets and liabilities are recognized for temporary differ-
ences between the tax basis of assets and liabilities and their
reported amount in the financial statements. The Company also
provides for the anticipated tax effect of future remittances of
retained earnings from subsidiaries and affiliated companies.
The Company and some of its consolidated subsidiaries
file consolidated tax returns in their respective countries.
With regard to items to be transitioned from the consoli-
dated taxation system to the group tax sharing system insti-
tuted in the “Act for Partial Amendment of the Income Tax
Act, etc. (Act No. 8 of 2020)” and items to be amended in the
non-consolidated taxation system in line with the transition
to the group tax sharing system, the Company and some of
its domestic consolidated subsidiaries did not apply the pro-
vision of Paragraph 44 of the “Implementation Guidance on
Tax Effect Accounting (Accounting Standards Board of Japan
(ASBJ) Guidance No. 28, February 16, 2018),” pursuant to
Paragraph 3 of the “Practical Solution on the Treatment of Tax
Effect Accounting for the Transition from the Consolidated
Taxation System to the Group Tax Sharing System (PITF No.
39, March 31, 2020).” Accordingly, the amounts of deferred
tax assets and deferred tax liabilities are stated based on the
provisions of tax acts in effect before the amendments.
Toray Industries, Inc.
Integrated Annual Report 2020
118
m) Translation of Foreign Currency Financial Statements
Translation of foreign currency financial statements of over-
seas subsidiaries into Japanese yen for consolidation purposes
is made by using the current exchange rates prevailing at their
balance sheet dates, with the exception that the translation of
stockholders’ equity is made by using historical rates. Revenue
and expense accounts are principally translated at the average
exchange rates during the year. Differences in yen amounts
arising from the use of different rates are presented as “for-
eign currency translation adjustments” in net assets except for
the portion belonging to non-controlling shareholders, which is
included in “non-controlling interests” in net assets.
n) Changes in Accounting Policies
Leases (IFRS 16)
Effective from the year ended March 31, 2020, overseas
subsidiaries subject to IFRS have applied IFRS 16 “Leases.”
Accordingly, those subsidiaries recognize assets and liabilities
for all leases in which they are lessees, in principle, and some
of the assets that have been included in “Investments and
other assets” are reclassified to “Property, plant and equip-
ment.” When applying IFRS 16, the cumulative effect of the
application is recognized at the beginning of application, in
accordance with transitional provisions.
As a result, “Other” in “Property, plant and equipment,”
“Other current liabilities” in “Current liabilities,” and “Other
non-current liabilities” in “Non-current liabilities” as of March
31, 2020 increased by ¥20,735 million ($190,579 thousand),
¥2,676 million ($24,596 thousand), and ¥8,971 million ($82,454
thousand), respectively, and “Other” in “Investments and
other assets” decreased by ¥9,278 million ($85,276 thousand).
The effect of the changes on the profit or loss for the year
ended March 31, 2020 is immaterial.
o) Standards Issued but Not Yet Adopted
Accounting Standard and Implementation Guidance on
Revenue Recognition
• Accounting Standard for Revenue Recognition (ASBJ Statement
No. 29, March 31, 2020)
• Implementation Guidance on Accounting Standard for Revenue
Recognition (ASBJ Guidance No. 30, March 31, 2020)
(1) Overview
This is a comprehensive accounting standard for revenue rec-
ognition. The standard establishes the following five-step model
that an entity applies when recognizing revenue from customers:
Step 1: Identify the contract(s) with a customer.
Step 2: Identify the performance obligations in the contract.
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price to the performance obli-
gations in the contract.
Step 5: Recognize revenue when (or as) the entity satisfies a
performance obligation.
(2) Scheduled Date and Impact of Adoption
The Company will not adopt the standard and implementation
guidance nor has it evaluated the impact of adoption because
the Company plans voluntary adoption of IFRS starting from
the first quarter of the year ending March 31, 2021.
Accounting Standard for Fair Value Measurement, etc.
• Accounting Standard for Fair Value Measurement (ASBJ
Statement No. 30, July 4, 2019)
• Implementation Guidance on Accounting Standard for Fair
Value Measurement (ASBJ Guidance No. 31, July 4, 2019)
• Accounting Standard for Measurement of Inventories (ASBJ
Statement No. 9, July 4, 2019)
• Accounting Standard for Financial
Instruments
(ASBJ
Statement No. 10, July 4, 2019)
• Implementation Guidance on Disclosures about Fair Value of
Financial Instruments (ASBJ Guidance No. 19, March 31, 2020)
(1) Overview
ASBJ developed “Accounting Standard
for Fair Value
Measurement” and “Implementation Guidance on Accounting
Standard for Fair Value Measurement,” which provide guid-
ance for fair value measurement in order to improve compara-
bility with internationally recognized accounting standards. The
accounting standard and implementation guidance apply to the
fair value of financial instruments and trading inventories.
In addition, “Implementation Guidance on Disclosures about
Fair Value of Financial Instruments” was revised to include the
provisions that require entities to disclose the fair value of finan-
cial instruments by level of the fair value hierarchy.
(2) Scheduled Date and Impact of Adoption
The Company will not adopt the standards and implementation
guidance nor has it evaluated the impact of adoption because
the Company plans voluntary adoption of IFRS starting from
the first quarter of the year ending March 31, 2021.
Accounting Standard for Accounting Policy Disclosures,
Accounting Changes and Error Corrections
• Accounting Standard for Accounting Policy Disclosures,
Accounting Changes and Error Corrections (ASBJ Statement
No. 24, March 31, 2020)
(1) Overview
This revised standard establishes a disclosure requirement of
the outline of accounting principles and procedures applied by
an entity in cases where directly relevant accounting standards
are not available.
(2) Scheduled Date and Impact of Adoption
The Company will not adopt the standard nor has it evaluated
the impact of adoption because the Company plans voluntary
adoption of IFRS starting from the first quarter of the year end-
ing March 31, 2021.
Toray Industries, Inc.
Integrated Annual Report 2020
119
Accounting Standard for Disclosure of Accounting Estimates
• Accounting Standard for Disclosure of Accounting Estimates
(ASBJ Statement No. 31, March 31, 2020)
the impact of adoption because the Company plans voluntary
adoption of IFRS starting from the first quarter of the year end-
ing March 31, 2021.
(1) Overview
This standard stipulates guidance on disclosure that provides
users of financial statements with information to understand
the accounting estimates that relate to the amounts stated in
the financial statements of a year and that may have a mate-
rial impact on the financial statements of the subsequent year.
(2) Scheduled Date and Impact of Adoption
The Company will not adopt the standard nor has it evaluated
p) Assumptions on the novel coronavirus pandemic for
accounting estimates
The Company’s evaluation of goodwill and other accounting
estimates were premised on the assumption that the world
economy, which was severely stalled by the novel coronavirus
pandemic, would begin recovering from the second half of the
year ending March 31, 2021, but that the recovery would be
slow and would not be complete until the year ending March
31, 2022 or later.
2. U.S. DOLLAR AMOUNTS
The Company and its domestic consolidated subsidiaries main-
tain their accounting records in yen. The U.S. dollar amounts
included in the accompanying consolidated financial state-
ments and notes thereto represent the arithmetic results of
translating yen into U.S. dollars at the rate of ¥108.8 to $1.00,
the approximate exchange rate prevailing on March 31, 2020.
The inclusion of such U.S. dollar amounts is solely for the con-
venience of readers outside Japan and is not intended to imply
that the assets and liabilities that originated in yen have been
or could be readily converted, realized or settled in U.S. dollars
at this or at any other rate.
3. INVENTORIES
At March 31, 2020 and 2019, inventories consisted of the following:
Merchandise and finished goods
Work in process
Raw materials and supplies
Millions of yen
2020
2019
Thousands of
U.S. dollars
2020
¥ 214,957
¥ 228,480
$ 1,975,708
79,520
99,178
85,880
105,167
730,882
911,563
¥ 393,655
¥ 419,527
$ 3,618,153
Losses recognized and charged to cost of sales as a result of valuation at March 31, 2020 and 2019 were ¥4,696 million ($43,162
thousand) and ¥4,502 million, respectively.
Toray Industries, Inc.
Integrated Annual Report 2020
120
4. SHORT-TERM BANK LOANS, LONG-TERM DEBT AND LEASE OBLIGATIONS
Short-term bank loans at March 31, 2020 and 2019 represented bank overdrafts and short-term notes. The Company is not
required to pay commitment fees on unused balances of the bank overdraft agreements.
Long-term debt and lease obligations at March 31, 2020 and 2019 were as follows:
Loans principally from banks and insurance companies with interest rates
primarily from 0.06% to 11.50%, maturing serially through 2032:
Unsecured
Secured
Lease obligations maturing serially through 2050:
Unsecured
Yen notes with an interest rate of 0.93% due 2022
Yen notes with an interest rate of 1.01% due 2023
Yen notes with an interest rate of 0.25% due 2024
Yen notes with an interest rate of 0.24% due 2025
Yen notes with an interest rate of 0.38% due 2027
Yen notes with an interest rate of 0.38% due 2028
Yen notes with an interest rate of 0.83% due 2038
Zero coupon convertible bonds due 2019
Zero coupon convertible bonds due 2021
Less amounts due within one year
At March 31, 2020, assets pledged as collateral were as follows:
Time deposits
Property, plant and equipment, net
Investment securities
Others
Millions of yen
2020
2019
Thousands of
U.S. dollars
2020
¥ 490,860
¥ 456,402
$ 4,511,581
339
453
3,116
15,356
20,000
20,000
40,000
40,000
60,000
40,000
20,000
—
50,000
796,555
111,254
3,829
20,000
20,000
40,000
40,000
60,000
40,000
20,000
50,000
50,000
800,684
94,493
141,140
183,824
183,824
367,647
367,647
551,471
367,647
183,824
—
459,559
7,321,278
1,022,555
¥ 685,301
¥ 706,191
$ 6,298,722
Millions of yen
2020
¥ 908
247
1,236
655
Thousands of
U.S. dollars
2020
$ 8,346
2,270
11,360
6,020
¥ 3,046
$ 27,996
The annual maturities of long-term debt and lease obligations subsequent to March 31, 2020 were as follows:
Years ending March 31:
2021
2022
2023
2024
2025
2026 and thereafter
Millions of yen
2020
Thousands of
U.S. dollars
2020
¥ 111,254
$ 1,022,555
102,076
97,297
106,021
50,500
329,407
938,199
894,274
974,458
464,154
3,027,638
¥ 796,555
$ 7,321,278
Toray Industries, Inc.
Integrated Annual Report 2020
121
5. FINANCIAL INSTRUMENTS
Conditions of Financial Instruments
a) Policy in Relation to Financial Instruments
The policy of the Company and its consolidated subsidiaries
is to manage funds only by short-term deposits, etc. and to
raise funds by borrowing from banks and issuing corporate
bonds. The Company and its consolidated subsidiaries use
derivatives to hedge risks associated with foreign currency
exchange rates and fluctuations of borrowing interest rates
and do not enter into derivative transactions for speculative or
trading purposes.
b) Contents and Risk of Financial Instruments and Risk
Management System
Trade receivables are operating receivables and therefore
are exposed to customer credit risk. Under its internal reg-
ulations, the Company carefully manages the payment peri-
ods for receivables and outstanding balances of all customers
and regularly monitors the credit standing of major clients.
Consolidated subsidiaries also monitor and manage the credit
standings of their clients. Operating receivables and payables
denominated in foreign currencies that arise from the global
business operations are also exposed to foreign currency
exchange risk. The Company and its consolidated subsidiaries
hedge this risk mainly through the use of forward exchange
contracts against positions after netting receivables and pay-
ables denominated in the same foreign currencies. Likewise,
the Company and its consolidated subsidiaries mainly use cur-
rency swaps to hedge the foreign currency exchange risk of
bank loans denominated in foreign currencies.
Investment securities are mostly the shares of corpora-
tions with which the Company and its consolidated subsid-
iaries have business relationships and are exposed to the
risk of market price fluctuations. The fair value of the invest-
ment securities and financial positions of the issuing entities
(clients) are regularly monitored.
Trade payables are operating payables, most of which are
due and payable within one year.
Short-term bank loans and commercial paper are financing
instruments mainly for operating transactions, while long-term
bank loans and bonds are primarily for capital expenditures.
Bank loans and bonds are exposed to the risk of interest rate
fluctuation. Those with floating rates bear the risk of higher
nominal interest expenses when interest rates rise, whereas
those with fixed rates bear the risk of higher real interest
expenses when interest rates fall. The Company and its con-
solidated subsidiaries use derivative transactions (interest rate
swap transactions) to minimize the risk of interest rate fluc-
tuation, taking into consideration the balance between fixed
interest rates and floating interest rates.
Hedging instruments, hedged items, the policy for uti-
lizing such hedging instruments and the method for evalu-
ating the effectiveness of hedging activities are described
in Note 1. SIGNIFICANT ACCOUNTING POLICIES d)
Financial Instruments, Hedge Accounting in the Notes to the
Consolidated Financial Statements.
Derivative transactions are executed and managed in
accordance with the internal regulations prescribing the autho-
rization for transactions. To mitigate credit risk, the Company
and its consolidated subsidiaries carry out derivative transac-
tions only with highly rated financial institutions.
c) Supplemental Explanation on Fair Value of Financial
Instruments
The fair value of financial instruments is based on market
prices, or reasonable estimate of fair value for instruments for
which market prices are not available. Estimates of fair value
are subject to fluctuation because they employ various factors
and assumptions. In addition, the contract amount of deriva-
tives in Note 7. DERIVATIVES in the Notes to the Consolidated
Financial Statements is not an indicator of market risk associ-
ated with derivative transactions.
Toray Industries, Inc.
Integrated Annual Report 2020
122
Fair Value of Financial Instruments
Carrying value, fair value and unrealized gain (loss) as of March 31, 2020 and 2019 were as follows.
In addition, financial instruments, for which it is extremely difficult to measure the fair value, are not included. (Please refer to
Note 2 below)
Cash and time deposits
Trade receivables
Investment securities
Held-to-maturity debt securities
Investment securities in subsidiaries and affiliated companies
Other securities
Assets
Trade payables
Short-term bank loans
Commercial paper
Bonds
Long-term bank loans*2
Liabilities
Derivative transactions*3
Hedge accounting is not applied
Hedge accounting is applied
Derivative transactions
Cash and time deposits
Trade receivables
Investment securities
Held-to-maturity debt securities
Investment securities in subsidiaries and affiliated companies
Other securities
Assets
Trade payables
Short-term bank loans
Commercial paper
Bonds*1
Long-term bank loans*2
Liabilities
Derivative transactions*3
Hedge accounting is not applied
Hedge accounting is applied
Derivative transactions
Millions of yen
2020
Carrying value
Fair value
Unrealized gain (loss)
¥ 173,698
¥ 173,698
¥
483,761
483,761
78
50,503
164,176
81
39,022
164,176
—
—
3
(11,481)
—
¥ 872,216
¥ 860,738
¥ (11,478)
¥ 212,323
¥ 212,323
¥
132,358
10,000
290,000
491,199
132,358
10,000
289,746
491,182
—
—
—
(254)
(17)
¥ 1,135,880
¥ 1,135,609
¥
(271)
¥
¥
(450)
¥
(450)
¥
1,837
1,387
1,837
1,387
¥
¥
—
—
—
Millions of yen
2019
Carrying value
Fair value
Unrealized gain (loss)
¥ 168,507
¥ 168,507
¥
531,058
531,058
101
73,940
188,586
105
62,426
188,586
—
—
4
(11,514)
—
¥ 962,192
¥ 950,682
¥ (11,510)
¥ 240,554
¥ 240,554
¥
175,567
175,567
—
340,000
456,855
—
345,092
456,478
—
—
—
5,092
(377)
¥ 1,212,976
¥ 1,217,691
¥ 4,715
¥
¥
(587)
779
192
¥
¥
(587)
779
192
¥
¥
—
—
—
Toray Industries, Inc.
Integrated Annual Report 2020
123
Thousands of U.S. dollars
2020
Carrying value
Fair value
Unrealized gain (loss)
Cash and time deposits
Trade receivables
Investment securities
$ 1,596,489
4,446,333
$ 1,596,489
4,446,333
$
Held-to-maturity debt securities
Investment securities in subsidiaries and affiliated companies
Other securities
717
464,182
1,508,971
744
358,658
1,508,971
—
—
28
(105,524)
—
Assets
Trade payables
Short-term bank loans
Commercial paper
Bonds
Long-term bank loans*2
Liabilities
Derivative transactions*3
Hedge accounting is not applied
Hedge accounting is applied
Derivative transactions
$ 8,016,691
$ 7,911,195
$ (105,496)
$ 1,951,498
1,216,526
$ 1,951,498
1,216,526
$
91,912
2,665,441
4,514,697
91,912
2,663,107
4,514,540
—
—
—
(2,335)
(156)
$ 10,440,074
$ 10,437,583
$
(2,491)
$
$
(4,136)
16,884
12,748
$
$
(4,136)
16,884
12,748
$
$
—
—
—
*1 Bonds include bonds due within one year.
*2 Long-term bank loans include long-term bank loans due within one year.
*3 Receivables and payables arising from derivative transactions are indicated in net amounts. Total net payables, if any, are shown in parentheses.
Notes:
1. Estimation method for fair value of financial instruments and items related to securities and derivative transactions
Assets
Cash and time deposits and Trade receivables
Carrying value is used for fair value since the items will be settled within the short term and the fair value is approxi-
mately equal to the carrying value.
Investment securities
Equity securities are valued at quoted market price. Debt securities, etc. are valued at quoted market price or at the price
provided by financial institutions. For information on securities classified by holding purpose, please refer to Note 6.
SECURITIES of the Notes to the Consolidated Financial Statements.
Liabilities
Trade payables, Short-term bank loans and Commercial paper
Carrying value is used for fair value since the items will be settled within the short term and the fair value is approxi-
mately equal to the carrying value.
Bonds
The fair value of bonds is based on market price. However, for floating-rate bonds and fixed-rate bonds converted to float-
ing using interest rate swaps accounted for under the special accounting method for interest rate swaps, the fair value is
approximately equal to the carrying value because the interest rates are adjusted periodically. Therefore, the fair value is
based on the carrying value.
Long-term bank loans
The fair value of long-term bank loans is estimated by discounting the principal amounts and interest based on estimated
interest rates if similar new loans were entered into in the current period. The fair value of long-term bank loans for which the
special accounting method for interest rate swaps is applied is estimated by discounting the total principal amount and inter-
est (accounted for together with the interest rate swaps) based on estimated interest rates if similar new loans were entered
into in the current period. For long-term bank loans at floating interest rates, however, the fair value is approximately equal to
the carrying value because the interest rates are adjusted periodically. Therefore, the fair value is based on the carrying value.
Derivative transactions
Please refer to Note 7. DERIVATIVES in the Notes to the Consolidated Financial Statements.
Toray Industries, Inc.
Integrated Annual Report 2020
124
2. Financial instruments for which it is extremely difficult to determine the fair value
Millions of yen
2020
2019
Thousands of
U.S. dollars
2020
Unlisted equity securities
¥ 87,012
¥ 78,466
$ 799,743
These securities have no quoted market price and the fair value is extremely difficult to determine. Therefore, they are not
included in the preceding table.
3. Redemption schedule for receivables and investment securities with maturities at March 31, 2020 and 2019
Cash and time deposits
Trade receivables
Investment securities
Held-to-maturity debt securities
Other securities
Cash and time deposits
Trade receivables
Investment securities
Held-to-maturity debt securities
Other securities
Cash and time deposits
Trade receivables
Investment securities
Held-to-maturity debt securities
Other securities
Millions of yen
2020
Due within
one year
Due after one year
through five years
Due after five years
through ten years
¥ 173,698
483,684
6
17,068
¥ —
77
59
10
¥ 674,456
¥ 146
¥ —
—
13
50
¥ 63
Millions of yen
2019
Due within
one year
Due after one year
through five years
Due after five years
through ten years
¥ 168,507
531,058
32
7,412
¥ 707,009
¥ —
—
58
12
¥ 70
¥ —
—
11
53
¥ 64
Thousands of U.S. dollars
2020
Due within
one year
Due after one year
through five years
Due after five years
through ten years
$ 1,596,489
$ —
4,445,625
55
156,875
708
542
92
$ 6,199,044
$ 1,342
$ —
—
119
460
$ 579
Due after
ten years
¥ —
—
—
—
¥ —
Due after
ten years
¥ —
—
—
—
¥ —
Due after
ten years
$ —
—
—
—
$ —
4. The redemption schedule for long-term debt is disclosed in Note 4. SHORT-TERM BANK LOANS, LONG-TERM DEBT AND
LEASE OBLIGATIONS of the Notes to the Consolidated Financial Statements.
Toray Industries, Inc.
Integrated Annual Report 2020
125
6. SECURITIES
At March 31, 2020 and 2019, information on securities classified as held-to-maturity debt securities was as follows:
Held-to-maturity debt securities
¥ 78
Carrying
value
Millions of yen
2020
Thousands of U.S. dollars
2020
Fair
value
¥ 81
Unrealized
gains
Unrealized
losses
Carrying
value
Fair
value
Unrealized
gains
Unrealized
losses
¥ 4
¥ 1
$ 717
$ 744
$ 37
$ 9
Millions of yen
2019
Carrying
value
Fair
value
Unrealized
gains
Unrealized
losses
Held-to-maturity debt securities
¥ 101
¥ 105
¥ 4
¥ 0
At March 31, 2020 and 2019, information on securities classified as other securities was as follows:
Millions of yen
2020
Thousands of U.S. dollars
2020
Carrying
value
Acquisition
cost
Unrealized
gains
Unrealized
losses
Carrying
value
Acquisition
cost
Unrealized
gains
Unrealized
losses
Other securities
¥ 164,176 ¥ 102,409
¥ 72,077
¥ 10,310
$ 1,508,971 $ 941,259 $ 662,472
$ 94,761
Millions of yen
2019
Carrying
value
Acquisition
cost
Unrealized
gains
Unrealized
losses
Other securities
¥ 188,586
¥ 97,348
¥ 96,192
¥ 4,954
Toray Industries, Inc.
Integrated Annual Report 2020
126
7. DERIVATIVES
The Company and its consolidated subsidiaries had the following derivative contracts outstanding at March 31, 2020 and 2019:
Hedge accounting is not applied
Millions of yen
Thousands of U.S. dollars
Forward foreign exchange contracts:
Buying U.S. dollar
Buying euro
Buying Thai baht
Buying Malaysian ringgit
Buying Australian dollar
Buying Japanese yen
Selling U.S. dollar
Selling euro
Selling Chinese yuan
Selling Indonesian rupiah
Selling Japanese yen
Foreign currency swaps:
Contract
amount
2020
Fair
value
Unrealized
gain (loss)
Contract
amount
2020
Fair
value
Unrealized
gain (loss)
¥ 10,168
¥ 183
¥ 183
$ 93,456
$ 1,682
$ 1,682
1,854
593
218
1
3,712
16,558
4,036
1,648
78
3,666
(6)
(30)
0
0
(3)
(140)
(8)
(39)
3
(123)
(6)
(30)
0
0
(3)
17,040
5,450
2,004
9
34,118
(55)
(276)
0
0
(28)
(55)
(276)
0
0
(28)
(140)
152,188
(1,287)
(1,287)
(8)
(39)
3
(123)
37,096
15,147
717
(74)
(358)
28
(74)
(358)
28
33,695
(1,131)
(1,131)
Receiving U.S. dollar, paying Thai baht
3,529
(287)
(287)
32,436
(2,638)
(2,638)
¥
—
¥ (450)
¥ (450)
$
—
$ (4,136)
$ (4,136)
Millions of yen
2019
Fair
value
Contract
amount
Unrealized
gain (loss)
¥ 6,481
¥
24
¥
24
10,298
375
649
4,453
15,505
1,777
931
87
136
(28)
4
4
(19)
(102)
17
(25)
0
0
(28)
4
4
(19)
(102)
17
(25)
0
0
8,331
(114)
(114)
Forward foreign exchange contracts:
Buying U.S. dollar
Buying euro
Buying Thai baht
Buying Malaysian ringgit
Buying Japanese yen
Selling U.S. dollar
Selling euro
Selling Chinese yuan
Selling Thai baht
Selling Indonesian rupiah
Selling Japanese yen
Foreign currency swaps:
Receiving U.S. dollar, paying Thai baht
3,688
(348)
(348)
¥
—
¥
(587)
¥
(587)
Toray Industries, Inc.
Integrated Annual Report 2020
127
Hedge accounting is applied
Hedge accounting method
Deferral hedge
method
Type of contract and primary hedged items
Forward foreign exchange contracts:
For trade receivables and trade payables
Buying Japanese yen
Selling U.S. dollar
Selling euro
Selling Chinese yuan
Foreign currency swaps:
For long-term bank loans
Millions of yen
2020
Contract amount
Fair value
Estimation method for fair value
¥ 1,379
4,035
938
492
¥
12 Forward foreign exchange quotes
(1)
(58)
2
Special accounting
method for interest
rate swaps
Allocation method
for forward foreign
exchange contracts
Receiving U.S. dollar, paying Korean won
Receiving Japanese yen, paying Korean won
2,482
7,084
233 Prices provided by
financial institutions
927
Interest rate swaps:
For long-term bank loans
Floating-rate receipt, fixed-rate payment
99,785
224
Prices provided by
financial institutions
Interest rate swaps:
For long-term bank loans
Floating-rate receipt, fixed-rate payment
Floating-rate receipt, floating-rate payment
486
26,900
—*1
—
Forward foreign exchange contracts:
For forecast transactions denominated
in foreign currencies
Buying U.S. dollar
Buying euro
Buying Chinese yuan
Buying Korean won
Selling U.S. dollar
Selling euro
Selling British pound
Selling Chinese yuan
Selling Hong Kong dollar
Forward foreign exchange contracts:
For trade receivables and trade payables
Buying U.S. dollar
Buying euro
Buying Chinese yuan
Buying Thai baht
Buying Korean won
Buying Japanese yen
Selling U.S. dollar
Selling euro
Selling British pound
Selling Chinese yuan
Foreign currency swaps:
For long-term bank loans
17,727
13,020
544
237
15,884
3,636
9
1,606
1,123
9,994
166
98
16
24
1
26,299
7,240
21
8
Receiving U.S. dollar, paying Japanese yen
127,703
355 Forward foreign exchange quotes
8
2
10
64
1
0
40
18
— *2
—
—*2
—
¥
— ¥ 1,837
Toray Industries, Inc.
Integrated Annual Report 2020
128
Hedge accounting method
Deferral hedge
method
Type of contract and primary hedged items
Forward foreign exchange contracts:
For trade receivables and trade payables
Buying Japanese yen
Selling U.S. dollar
Selling euro
Selling Chinese yuan
Foreign currency swaps:
For long-term bank loans
Millions of yen
2019
Contract amount
Fair value
Estimation method for fair value
¥ 1,638
1,150
647
182
¥
(2) Forward foreign exchange quotes
(11)
3
1
Special accounting
method for interest
rate swaps
Allocation method
for forward foreign
exchange contracts
Receiving U.S. dollar, paying Korean won
Receiving Japanese yen, paying Korean won
4,900
7,782
80
225
Prices provided by
financial institutions
Interest rate swaps:
For long-term bank loans
Floating-rate receipt, fixed-rate payment
40,000
29
Interest rate swaps:
For bonds and long-term bank loans
Prices provided by
financial institutions
Floating-rate receipt, fixed-rate payment
Floating-rate receipt, floating-rate payment
Fixed-rate receipt, floating rate payment
504
26,900
40,000
—*1
—
Forward foreign exchange contracts:
For forecast transactions denominated
in foreign currencies
Buying U.S. dollar
Buying euro
Buying Chinese yuan
Buying Thai baht
Buying Korean won
Selling U.S. dollar
Selling euro
Selling British pound
Selling Thai baht
Selling Japanese yen
Forward foreign exchange contracts:
For trade receivables and trade payables
Buying U.S. dollar
Buying euro
Buying British pound
Buying Chinese yuan
Buying Japanese yen
Selling U.S. dollar
Selling euro
Selling British pound
Selling Chinese yuan
Selling Thai baht
Foreign currency swaps:
For long-term bank loans
Receiving U.S. dollar, paying Japanese yen
Forward foreign exchange quotes
376
(8)
(4)
111
(20)
(9)
8
0
0
0
—*2
—
23,887
730
537
426
2,158
21,422
649
10
1
52
12,383
217
1
72
4
28,612
3,685
13
44
6
129,389
—
¥
—*2
¥ 779
—
Toray Industries, Inc.
Integrated Annual Report 2020
129
Hedge accounting method
Deferral hedge
method
Type of contract and primary hedged items
Forward foreign exchange contracts:
For trade receivables and trade payables
Buying Japanese yen
Selling U.S. dollar
Selling euro
Selling Chinese yuan
Foreign currency swaps:
For long-term bank loans
Thousands of U.S. dollars
2020
Contract amount
Fair value
Estimation method for fair value
$ 12,675
37,086
8,621
4,522
$
110 Forward foreign exchange quotes
(9)
(533)
18
Special accounting
method for interest
rate swaps
Allocation method
for forward foreign
exchange contracts
Receiving U.S. dollar, paying Korean won
Receiving Japanese yen, paying Korean won
22,813
65,110
2,142 Prices provided by
financial institutions
8,520
Interest rate swaps:
For long-term bank loans
Floating-rate receipt, fixed-rate payment
917,142
2,059
Prices provided by
financial institutions
Interest rate swaps:
For long-term bank loans
Floating-rate receipt, fixed-rate payment
Floating-rate receipt, floating-rate payment
4,467
247,243
—*1
—
Forward foreign exchange contracts:
For forecast transactions denominated
in foreign currencies
Buying U.S. dollar
Buying euro
Buying Chinese yuan
Buying Korean won
Selling U.S. dollar
Selling euro
Selling British pound
Selling Chinese yuan
Selling Hong Kong dollar
Forward foreign exchange contracts:
For trade receivables and trade payables
Buying U.S. dollar
Buying euro
Buying Chinese yuan
Buying Thai baht
Buying Korean won
Buying Japanese yen
Selling U.S. dollar
Selling euro
Selling British pound
Selling Chinese yuan
Foreign currency swaps:
For long-term bank loans
Receiving U.S. dollar, paying Japanese yen
162,932
119,669
5,000
2,178
145,993
33,419
83
14,761
10,322
91,857
1,526
901
147
221
9
241,719
66,544
193
74
3,263 Forward foreign exchange quotes
74
18
92
588
9
0
368
165
—*2
—
—*2
—
1,173,741
$
— $ 16,884
*1 The fair value of interest rate swaps to which a special accounting method is applied is included in the fair value of bonds and long-term bank loans in Note 5.
FINANCIAL INSTRUMENTS of the Notes to the Consolidated Financial Statements because such interest rate swaps are accounted for together with the cor-
responding bonds and long-term bank loans.
*2 The fair value of forward foreign exchange contracts to which the allocation method is applied, except for forecast transactions, is included in the fair value
of trade receivables, trade payables and long-term bank loans in Note 5. FINANCIAL INSTRUMENTS of the Notes to the Consolidated Financial Statements
since such forward foreign exchange contracts are accounted for together with the corresponding trade receivables, trade payables and long-term bank loans.
Toray Industries, Inc.
Integrated Annual Report 2020
130
8. RETIREMENT BENEFIT PLAN
The changes in the retirement benefit obligation during the years ended March 31, 2020 and 2019 were as follows:
Retirement benefit obligation at beginning of the year
¥ 184,139
¥ 190,262
$ 1,692,454
Millions of yen
2020
2019
Thousands of
U.S. dollars
2020
Service cost
Interest cost
Actuarial gains and losses
Retirement benefit paid
Past service cost
Other
7,010
1,434
1,133
7,171
1,549
(109)
(12,764)
(14,225)
279
(2,195)
(294)
(215)
64,430
13,180
10,414
(117,316)
2,564
(20,175)
Retirement benefit obligation at end of the year
¥ 179,036
¥ 184,139
$ 1,645,551
The changes in the plan assets at fair value during the years ended March 31, 2020 and 2019 were as follows:
Plan assets at beginning of the year
Expected return on plan assets
Actuarial gains and losses
Contributions
Retirement benefit paid
Return of assets from retirement benefits trust
Other
Millions of yen
2020
2019
Thousands of
U.S. dollars
2020
¥ 107,849
¥ 117,288
$ 991,259
2,053
(8,990)
7,039
(7,958)
—
(1,749)
2,417
(2,154)
7,547
(8,858)
(7,867)
(524)
18,869
(82,629)
64,697
(73,143)
—
(16,075)
Plan assets at end of the year
¥ 98,244
¥ 107,849
$ 902,978
The following table sets forth the funded status of the plans and the amounts recognized in the consolidated balance sheets as
of March 31, 2020 and 2019 for the Company’s and its consolidated subsidiaries’ defined benefit plans:
Millions of yen
2020
2019
Thousands of
U.S. dollars
2020
Funded retirement benefit obligation
¥ 85,272
¥ 90,262
$ 783,750
Plan assets at fair value
Unfunded retirement benefit obligation
Net liability for retirement benefits in the balance sheets
(98,244)
(107,849)
(12,972)
(17,587)
93,764
80,792
93,877
76,290
Net defined benefit liability
100,575
100,730
Net defined benefit asset (included in other non-current assets)
(19,783)
(24,440)
(902,978)
(119,228)
861,801
742,574
924,403
(181,829)
Net liability for retirement benefits in the balance sheets
¥ 80,792
¥ 76,290
$ 742,574
Toray Industries, Inc.
Integrated Annual Report 2020
131
The components of retirement benefit expense for the years ended March 31, 2020 and 2019 were as follows:
Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial gains and losses
Amortization of past service cost
Gain on return of assets from retirement benefits trust
Millions of yen
2020
¥ 7,010
1,434
(2,053)
2,727
267
—
2019
¥ 7,171
1,549
(2,417)
2,465
(36)
(2,532)
Thousands of
U.S. dollars
2020
$ 64,430
13,180
(18,869)
25,064
2,454
—
Retirement benefit expense
¥ 9,385
¥ 6,200
$ 86,259
In addition to the above, special severance payments of ¥1,687 million ($15,506 thousand) and ¥1,705 million were recognized
for the years ended March 31, 2020 and 2019, respectively. Contributions to defined contribution pension plans of ¥7,323 million
($67,307 thousand) and ¥7,118 million were recognized for the years ended March 31, 2020 and 2019, respectively.
The components of remeasurements of defined benefit plans included in other comprehensive income (before tax effect) for the
years ended March 31, 2020 and 2019 were as follows:
Past service cost
Actuarial gains and losses
Total
Millions of yen
2020
2019
¥
(19)
¥
258
(7,254)
(2,114)
¥ (7,273)
¥ (1,856)
Thousands of
U.S. dollars
2020
$
(175)
(66,673)
$ (66,847)
The components of remeasurements of defined benefit plans included in accumulated other comprehensive income (before tax
effect) as of March 31, 2020 and 2019 were as follows:
Unrecognized past service cost
Unrecognized actuarial gains and losses
Total
Millions of yen
2020
2019
¥ (193)
¥
(212)
3,358
¥ 3,165
(3,896)
¥ (4,108)
Thousands of
U.S. dollars
2020
$ (1,774)
30,864
$ 29,090
The fair value of plan assets, by major category, as a percentage of total plan assets as of March 31, 2020 and 2019 was as follows:
Bonds
Stocks
General accounts of life insurance companies
Cash and time deposits
Other
Total
2020
2019
14%
40%
31%
15%
0%
9%
45%
27%
16%
3%
100%
100%
The expected rate of return on plan assets is determined based on the current and anticipated allocation of plan assets and the
current and expected long-term returns on diverse assets that compose the plan assets.
The key assumptions used in accounting for the above plans were as follows:
Discount rate
Expected rate of return on plan assets
Expected rate of salary increase
Toray Industries, Inc.
Integrated Annual Report 2020
132
2020
2019
primarily 0.6% primarily 0.6%
primarily 2.0% primarily 2.0%
primarily 5.9% primarily 5.9%
9. STOCK OPTION PLANS
1. Stock option expenses included in selling, general and administrative expenses amounted to ¥325 million ($2,987 thousand)
and ¥290 million for the years ended March 31, 2020 and 2019, respectively.
2. Information on stock options issued
The following table summarizes the stock options outstanding as of March 31, 2020.
Company name
Toray Industries, Inc.
Position and number
of grantees
Class and number of shares
to be issued upon exercise
Grant date
Vesting conditions
Vesting period
Exercise period
Company name
Position and number
of grantees
Class and number of shares
to be issued upon exercise
Grant date
Vesting conditions
Vesting period
Exercise period
Company name
Position and number
of grantees
Class and number of shares
to be issued upon exercise
Grant date
Vesting conditions
Vesting period
Exercise period
No.1 Stock
Option Plan
No.2 Stock
Option Plan
No.3 Stock
Option Plan
Members of the Board
of the Company
Directors of the Company
28
32
26
32
26
26
Common stock
747,000 shares
844,000 shares
583,000 shares
August 20, 2011
August 4, 2012
August 10, 2013
Based on the number of
months that have elapsed
during the vesting period
Based on the number of
months that have elapsed
during the vesting period
Based on the number of
months that have elapsed
during the vesting period
June 24, 2011-
June 22, 2012
August 21, 2011-
August 20, 2041
June 22, 2012-
June 26, 2013
August 5, 2012-
August 4, 2042
June 26, 2013-
June 25, 2014
August 11, 2013-
August 10, 2043
Toray Industries, Inc.
No.4 Stock
Option Plan
No.5 Stock
Option Plan
No.6 Stock
Option Plan
Members of the Board
of the Company
Directors of the Company
25
27
23
31
23
30
Common stock
569,000 shares
358,000 shares
381,000 shares
August 9, 2014
August 22, 2015
August 20, 2016
Based on the number of
months that have elapsed
during the vesting period
Based on the number of
months that have elapsed
during the vesting period
Based on the number of
months that have elapsed
during the vesting period
June 25, 2014-
June 24, 2015
August 10, 2014-
August 9, 2044
June 24, 2015-
June 28, 2016
August 23, 2015-
August 22, 2045
June 28, 2016-
June 27, 2017
August 21, 2016-
August 20, 2046
Toray Industries, Inc.
No.7 Stock
Option Plan
No.8 Stock
Option Plan
No.9 Stock
Option Plan
Members of the Board
of the Company
Directors of the Company
23
31
17
35
17
44
Common stock
374,000 shares
387,000 shares
500,000 shares
August 19, 2017
August 18, 2018
August 17, 2019
Based on the number of
months that have elapsed
during the vesting period
Based on the number of
months that have elapsed
during the vesting period
Based on the number of
months that have elapsed
during the vesting period
June 27, 2017-
June 26, 2018
August 20, 2017-
August 19, 2047
June 26, 2018-
June 25, 2019
August 19, 2018-
August 18, 2048
June 25, 2019-
June 23, 2020
August 18, 2019-
August 17, 2049
Toray Industries, Inc.
Integrated Annual Report 2020
133
The following table summarizes movements of stock options during the year and price information on stock options as of
March 31, 2020. The number of stock options are translated into the number of shares.
(1) Number of stock options
Company name
Toray Industries, Inc.
No.1 Stock
Option Plan
No.2 Stock
Option Plan
No.3 Stock
Option Plan
Stock acquisition rights not yet vested
As of March 31, 2019
Granted
Forfeited
Vested
As of March 31, 2020
Stock acquisition rights already vested
As of March 31, 2019
Vested
Exercised
Forfeited
As of March 31, 2020
—
—
—
—
—
159,000
—
5,000
—
154,000
—
—
—
—
—
216,000
—
6,000
—
210,000
—
—
—
—
—
194,000
—
5,000
—
189,000
Company name
Toray Industries, Inc.
No.4 Stock
Option Plan
No.5 Stock
Option Plan
No.6 Stock
Option Plan
Stock acquisition rights not yet vested
As of March 31, 2019
Granted
Forfeited
Vested
As of March 31, 2020
Stock acquisition rights already vested
As of March 31, 2019
Vested
Exercised
Forfeited
As of March 31, 2020
—
—
—
—
—
236,000
—
5,000
—
231,000
—
—
—
—
—
193,000
—
11,000
—
182,000
—
—
—
—
—
271,000
—
9,000
—
262,000
Company name
Toray Industries, Inc.
No.7 Stock
Option Plan
No.8 Stock
Option Plan
No.9 Stock
Option Plan
Stock acquisition rights not yet vested
As of March 31, 2019
Granted
Forfeited
Vested
As of March 31, 2020
Stock acquisition rights already vested
As of March 31, 2019
Vested
Exercised
Forfeited
As of March 31, 2020
Toray Industries, Inc.
Integrated Annual Report 2020
134
—
—
—
—
—
313,000
—
20,000
—
293,000
110,000
—
—
110,000
—
277,000
110,000
19,000
—
368,000
—
500,000
—
348,000
152,000
—
348,000
—
—
348,000
(2) Price information
Company name
Yen
Toray Industries, Inc.
No.1 Stock
Option Plan
No.2 Stock
Option Plan
No.3 Stock
Option Plan
Exercise price
Weighted average price at exercise
Fair value per share at the grant date
¥
1
824
513
¥
1
824
394
Yen
¥
1
824
546
Company name
Toray Industries, Inc.
No.4 Stock
Option Plan
No.5 Stock
Option Plan
No.6 Stock
Option Plan
Exercise price
Weighted average price at exercise
Fair value per share at the grant date
¥
1
824
605
¥
1
824
987
Yen
¥
1
824
902
Company name
Toray Industries, Inc.
Exercise price
Weighted average price at exercise
Fair value per share at the grant date
No.7 Stock
Option Plan
No.8 Stock
Option Plan
No.9 Stock
Option Plan
¥
1
824
899
¥
1
824
710
U.S. dollars
¥
1
—
684
Company name
Toray Industries, Inc.
Exercise price
Weighted average price at exercise
Fair value per share at the grant date
Company name
Exercise price
Weighted average price at exercise
Fair value per share at the grant date
Company name
Exercise price
Weighted average price at exercise
Fair value per share at the grant date
No.1 Stock
Option Plan
No.2 Stock
Option Plan
No.3 Stock
Option Plan
$ 0.01
7.57
4.72
$ 0.01
7.57
3.62
$ 0.01
7.57
5.02
U.S. dollars
Toray Industries, Inc.
No.4 Stock
Option Plan
No.5 Stock
Option Plan
No.6 Stock
Option Plan
$ 0.01
7.57
5.56
$ 0.01
7.57
9.07
$ 0.01
7.57
8.29
U.S. dollars
Toray Industries, Inc.
No.7 Stock
Option Plan
No.8 Stock
Option Plan
No.9 Stock
Option Plan
$ 0.01
7.57
8.26
$ 0.01
7.57
6.53
$ 0.01
—
6.29
Toray Industries, Inc.
Integrated Annual Report 2020
135
3. Estimation method and assumptions used for the per share fair value of stock options
(1) Estimation method
Black-Scholes model
(2) Assumptions used for the per share fair value of stock options
Company name
Expected volatility*1
Expected holding period*2
Expected dividend*3
Risk-free rate*4
Toray Industries, Inc.
No.9 Stock Option Plan
24.079%
6 years
¥16 per share ($0.15)
(0.347)%
*1 The expected volatility is based on actual share prices during 6 years from August 18, 2013 to August 16, 2019.
*2 The expected holding period is calculated based on the service period of past members of the Board.
*3 This is based on the dividend for the year ended March 31, 2019.
*4 The risk-free interest rate is the yield on Japanese government bonds for the period that corresponds to the remaining life of the option.
Because it is difficult to reasonably estimate the number of options that will expire in the future, only the number of options that
have actually forfeited is applied.
10. INCOME TAXES
The statutory tax rate in Japan for the years ended March 31, 2020 and 2019 was 30.6%.
At March 31, 2020 and 2019, significant components of deferred tax assets and liabilities were as follows:
Millions of yen
2020
2019
Thousands of
U.S. dollars
2020
¥ 6,544
¥ 6,496
$
60,147
10,542
31,402
15,367
15,104
35,360
114,319
(13,397)
(13,180)
(26,577)
87,742
5,803
20,869
22,637
21,665
17,814
14,655
10,379
31,035
14,924
15,362
36,944
115,140
(12,673)
(15,213)
(27,886)
87,254
6,157
21,195
22,154
28,990
19,746
15,792
96,893
288,621
141,241
138,824
325,000
1,050,726
(123,134)
(121,140)
(244,274)
806,452
53,336
191,811
208,061
199,127
163,732
134,697
103,443
¥ (15,701)
114,034
¥ (26,780)
950,763
$ (144,311)
Deferred tax assets:
Accrued bonuses
Depreciation and impairment loss
Net defined benefit liability
Net operating loss carryforwards (Note)
Unrealized intercompany profits
Other
Valuation allowance for net operating loss carryforwards (Note)
Valuation allowance for deductible temporary differences
Total valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Reserve for tax purpose reduction entry
Depreciation
Undistributed earnings of subsidiaries and affiliated companies
Unrealized gains on securities
Acquisition-related basis differences
Other
Total deferred tax liabilities
Net deferred tax assets (liabilities)
Toray Industries, Inc.
Integrated Annual Report 2020
136
Note: Breakdowns of net operating loss carryforwards and valuation allowance by expiry date as of March 31, 2020 and 2019 are
as follows:
Net operating loss carryforwards*
Valuation allowance
Deferred tax assets
Due within
one year
¥ 365
(341)
¥ 24
Due after
one year
through
two years
Due after
two years
through
three years
¥ 897
(403)
¥ 494
¥ 487
(335)
¥ 152
Net operating loss carryforwards*
Valuation allowance
Deferred tax assets
Due within
one year
¥ 1,108
(1,106)
¥
2
Due after
one year
through
two years
Due after
two years
through
three years
¥ 537
(434)
¥ 103
¥ 841
(401)
¥ 440
Millions of yen
2020
Due after
three years
through
four years
¥ 857
(785)
¥ 72
Millions of yen
2019
Due after
three years
through
four years
¥ 591
(522)
¥ 69
Due after
four years
through
five years
¥ 619
(376)
¥ 243
Due after
four years
through
five years
¥ 1,105
(891)
¥ 214
Due after
five years
Total
¥ 12,142
(11,157)
¥ 15,367
(13,397)
¥
985
¥ 1,970
Due after
five years
Total
¥ 10,742
(9,319)
¥ 14,924
(12,673)
¥ 1,423
¥ 2,251
Thousands of U.S. dollars
Due within
one year
$ 3,355
(3,134)
$ 221
Due after
one year
through
two years
$ 8,244
(3,704)
$ 4,540
Due after
two years
through
three years
$ 4,476
(3,079)
$ 1,397
2020
Due after
three years
through
four years
$ 7,877
(7,215)
$ 662
Due after
four years
through
five years
$ 5,689
(3,456)
Due after
five years
Total
$ 111,599
(102,546)
$ 141,241
(123,134)
$ 2,233
$
9,053
$ 18,107
Net operating loss carryforwards*
Valuation allowance
Deferred tax assets
* The amount is determined by multiplying the corresponding net operating loss carryforwards by the effective statutory tax rate.
The reconciliation of the statutory tax rate and the effective income tax rate is omitted because the difference between the statu-
tory tax rate and the effective income tax rate was less than 5% of the statutory tax rate for the years ended March 31, 2020 and
2019, respectively.
11. NET ASSETS
The Corporation Law of Japan provides that an amount equal
to 10% of the amount to be disbursed as distributions of cap-
ital surplus (other than the capital reserve) and retained earn-
ings (other than the earned reserve) be transferred to the
capital reserve and the earned reserve, respectively, until the
sum of the capital reserve and the earned reserve equals 25%
of the capital stock account. Such distributions can be made
at any time by resolution of the stockholders, or by the Board
of Directors if certain conditions are met.
At the June 2020 annual stockholders’ meeting, stockhold-
ers approved the payment of cash dividends of ¥8.00 per share,
aggregating to ¥12,806 million ($117,702 thousand) which has
not been reflected in the accompanying consolidated financial
statements for the year ended March 31, 2020.
Toray Industries, Inc.
Integrated Annual Report 2020
137
12. COMMITMENTS AND CONTINGENT LIABILITIES
At March 31, 2020, commitment line of credit to unconsolidated subsidiaries and affiliated companies was as follows:
Total commitment line of credit
Loans receivable outstanding
Balance
This commitment does not necessarily imply that the unused amount may be fully utilized.
At March 31, 2020 and 2019, contingent liabilities were as follows:
Millions of yen
Thousands of
U.S. dollars
2020
¥ 380
207
¥ 173
2020
$ 3,493
1,903
$ 1,590
As guarantors of loans to:
Unconsolidated subsidiaries and affiliated companies
Other
Notes discounted
Export bills discounted
Notes endorsed
Contingent liabilities associated with securitization of receivables
13. LEASES
Millions of yen
2020
2019
¥ 7,708
2,791
¥ 10,499
¥ 1,977
8,156
1,160
¥
552
¥ 6,579
3,341
¥ 9,920
¥ 1,550
6,140
1,755
¥ 1,187
Thousands of
U.S. dollars
2020
$ 70,846
25,653
$ 96,498
$ 18,171
74,963
10,662
$ 5,074
Right-of-use assets
Certain overseas subsidiaries capitalize leases of, mainly, buildings and land use rights in accordance with IFRS 16.
Finance leases
The Company and its consolidated subsidiaries hold certain buildings, machinery and equipment and intangible assets by leases.
Operating leases
Future minimum lease payments under uncapitalized non-cancellable operating leases subsequent to March 31, 2019 were as follows:
Due within one year
Due after one year
Total
Millions of yen
2019
¥
903
5,535
¥ 6,438
The figures for the year ended March 31, 2020 are not disclosed due to the decrease in materiality.
14. RESEARCH AND DEVELOPMENT EXPENSES
Research and development expenses included in cost of sales and selling, general and administrative expenses for the years ended
March 31, 2020 and 2019 were ¥66,881 million ($614,715 thousand) and ¥66,355 million, respectively.
Toray Industries, Inc.
Integrated Annual Report 2020
138
15. EQUITY IN EARNINGS (LOSSES) OF UNCONSOLIDATED SUBSIDIARIES AND AFFILIATED COMPANIES
Equity in earnings (losses) of unconsolidated subsidiaries and affiliated companies for the year ended March 31, 2020 includes a
lump amortization charge of ¥18,668 million ($171,581 thousand) in connection with the goodwill of an equity-accounted investee,
Pacific Textiles Holdings Limited, recognized in accordance with “Practical Guidelines on Accounting Standard for Investments
Using the Equity Method (JICPA Accounting Practice Committee Statement No. 9, February 16, 2018)” and “Practical Guidelines
on Accounting Standards for Capital Consolidation Procedures in Preparing Consolidated Financial Statements (JICPA Accounting
Practice Committee Statement No. 7, February 16, 2018).”
16. LOSS ON IMPAIRMENT OF FIXED ASSETS
The Company and its consolidated subsidiaries grouped operating assets based on the classification under the management
accounting. For assets to be disposed of and idle assets, each individual asset is considered to constitute a group.
For the year ended March 31, 2020, the carrying value of operating assets with declining profitability, assets to be disposed of and
other assets was written down to the recoverable amount.
As a result, the Company and its consolidated subsidiaries recognized loss on impairment in the amount of ¥7,569 million
($69,568 thousand).
The major assets for which the loss on impairment was recognized were as follows:
Location
Use
Classification
Millions of yen
Loss on
impairment
Thousands of
U.S. dollars
Loss on
impairment
Markgröningen,
Germany, etc.
Gumi, Gyeongsangbuk-do,
Korea
Saint-Maurice-de-Beynost,
France
Machinery and equipment
¥ 905
$ 8,318
Composites production facilities
Construction in progress
Other
180
645
1,654
5,928
Film production facilities
Machinery and equipment
¥ 1,331
$ 12,233
Other
4
37
Film production facilities
Machinery and equipment
¥ 1,266
$ 11,636
Tokai, Aichi, Japan
Research and development
facilities
Machinery and equipment
¥ 1,031
$ 9,476
The recoverable amount of the above assets was measured at value in use and net selling price. The value in use was calculated
by discounting the future cash flows at discount rates of 7% to 8%. The net selling price of assets available for sale was calculated
based on the appraisal value and others, and that of assets difficult to convert to other uses or sell was assessed at zero.
For the year ended March 31, 2019, the carrying value of goodwill, intangible assets and other assets of some consolidated sub-
sidiaries was fully written down because the originally anticipated income was not expected any longer.
As a result, the Company and its consolidated subsidiaries recognized loss on impairment in the amount of ¥18,414 million.
The major assets for which the loss on impairment was recognized were as follows:
Location
Use
Classification
Millions of yen
Loss on
impairment
Seoul, Korea, etc.
Fibers & Textiles
Goodwill
Other intangible assets
Yokohama, Kanagawa, Japan Environment & Engineering
Goodwill
6,054
5,154
¥ 1,654
Machinery and equipment
¥
840
The recoverable amount of the above assets was measured at value in use, and that of goodwill and other intangible assets was
assessed at zero.
Toray Industries, Inc.
Integrated Annual Report 2020
139
17. OTHER COMPREHENSIVE INCOME
The following table presents reclassification adjustments and tax effects allocated to each component of other comprehensive
income for the years ended March 31, 2020 and 2019.
Net unrealized gains (losses) on securities:
Amount arising during the year
Reclassification adjustments for gains and losses included in net income
Before tax effect
Tax effect
Net unrealized gains (losses) on securities
Net deferred gains (losses) on hedges:
Amount arising during the year
Reclassification adjustments for gains and losses included in net income
Basis adjustments for assets
Before tax effect
Tax effect
Net deferred gains (losses) on hedges
Foreign currency translation adjustments:
Amount arising during the year
Remeasurements of defined benefit plans:
Amount arising during the year
Reclassification adjustments for gains and losses included in net income
Before tax effect
Tax effect
Remeasurements of defined benefit plans
Share of other comprehensive income of unconsolidated subsidiaries and
affiliated companies accounted for by the equity method:
Amount arising during the year
Reclassification adjustments for gains and losses included in net income
Share of other comprehensive income of unconsolidated subsidiaries
and affiliated companies accounted for by the equity method
Millions of yen
Thousands of
U.S. dollars
2020
2019
2020
¥ (26,443)
¥ (12,196)
$ (243,042)
(3,001)
(29,444)
8,956
(20,488)
1,809
(362)
51
1,498
(461)
1,037
(1,296)
(13,492)
3,913
(9,579)
1,414
(25)
130
1,519
(455)
1,064
(27,583)
(270,625)
82,316
(188,309)
16,627
(3,327)
469
13,768
(4,237)
9,531
(44,857)
(4,767)
(412,289)
(9,982)
2,709
(7,273)
2,190
(5,083)
(2,923)
19
(2,904)
(1,753)
(103)
(1,856)
531
(1,325)
(422)
(183)
(605)
(91,746)
24,899
(66,847)
20,129
(46,719)
(26,866)
175
(26,691)
Total other comprehensive income
¥ (72,295)
¥ (15,212)
$ (664,476)
Toray Industries, Inc.
Integrated Annual Report 2020
140
18. SUPPLEMENTARY CASH FLOW INFORMATION
In the year ended March 31, 2019, the Company acquired TenCate Advanced Composites Holding B.V. (now known as Toray TCAC
Holding B.V.) and its subsidiaries. The following table shows the breakdown of assets and liabilities at the date of initial consolida-
tion and the reconciliation of the net payments and consideration transferred with regard to the acquisition.
Current assets
Non-current assets
Goodwill
Current liabilities
Non-current liabilities
Foreign currency translation adjustment
Consideration transferred
Cash and cash equivalents
Net payments for acquisition
19. SEGMENT INFORMATION
Millions of yen
2019
¥ 11,422
72,566
65,783
(13,864)
(18,940)
150
¥ 117,117
(2,553)
¥ 114,564
1. Outline of reportable segments
The reportable segments of the Company and its consolidated subsidiaries are components for which discrete financial information
is available and whose operating results are regularly reviewed by the Board of Directors to make decisions about resource allocation
to the segments and assess performance.
The Company identifies the following five segments according to the nature of the products and market for their products.
Reportable segment
Main products
Fibers & Textiles
Performance Chemicals
Filament yarns, staple fibers, spun yarns, woven and knitted fabrics of nylon, polyester,
acrylic and others; nonwoven fabrics; nonwoven material created using ultra-fine fibers in
an “Island in the Sea” configuration; apparel products
Nylon, ABS, PBT, PPS and other resins and molded products; polyolefin foam; polyester,
polyethylene, polypropylene and other films and processed film products; raw materials for
synthetic fibers and other plastics; fine chemicals; electronic and information materials and
graphic materials
Carbon Fiber Composite Materials
Carbon fibers, carbon fiber composite materials and their molded products
Environment & Engineering
Comprehensive engineering; condominiums; industrial equipment and machinery;
IT-related equipment; water treatment membranes and related equipment; materials for
housing, building and civil engineering applications
Life Science
Pharmaceuticals, medical devices, etc.
2. Measurement of sales, income, assets and other material items of reportable segments
The accounting policies for the reportable segments are the same as those described in Note 1. SIGNIFICANT ACCOUNTING
POLICIES. The figures of segment income are based on operating income. Intersegment sales are determined based on consider-
ation of the market price and related information.
Toray Industries, Inc.
Integrated Annual Report 2020
141
3. Information on sales, income, assets and other material items of reportable segments
Fibers
&
Textiles
¥ 883,137
1,226
¥ 884,363
¥ 60,686
¥ 748,047
Carbon Fiber
Composite
Materials
17,297
Performance
Chemicals
¥ 770,814 ¥ 236,922
848
¥ 788,111 ¥ 237,770
¥ 58,736 ¥ 20,959
¥ 935,396 ¥ 605,939
Millions of yen
2020
Environment
&
Engineering
¥ 252,282
65,033
¥ 317,315
¥ 11,246
¥ 254,833
Life Science
¥ 53,250
1
¥ 53,251
¥ 1,625
¥ 65,965
Total
26,829
Others*1
¥ 18,228 ¥ 2,214,633
111,234
¥ 45,057 ¥ 2,325,867
¥ 3,395 ¥ 156,647
¥ 91,531 ¥ 2,701,711
Adjustments*2
—
¥
(111,234)
¥ (111,234)
¥ (25,461)
¥ (51,024)
Consolidated
Total *3
¥ 2,214,633
—
¥ 2,214,633
¥ 131,186
¥ 2,650,687
28,951
42,602
27,477
4,565
2,420
1,898
107,913
(531)
107,382
58,711
52,932
1,677
14,567
2,956
8,920
139,763
(362)
139,401
37,853
64,397
22,764
10,532
2,508
1,986
140,040
727
140,767
Millions of yen
2019
Fibers
&
Textiles
¥ 974,265
1,372
¥ 975,637
¥ 72,880
¥ 795,382
Performance
Chemicals
¥ 868,847
18,985
¥ 887,832
¥ 67,702
¥ 1,002,305
Carbon Fiber
Composite
Materials
¥ 215,913
820
¥ 216,733
¥ 11,542
¥ 640,161
Environment
&
Engineering
¥ 257,673
74,960
¥ 332,633
¥ 12,236
¥ 255,338
Life Science
¥ 53,653
—
¥ 53,653
¥ 1,301
¥ 70,792
Total
26,536
Others*1
¥ 18,497 ¥ 2,388,848
122,673
¥ 45,033 ¥ 2,511,521
¥ 3,084 ¥
168,745
¥ 83,764 ¥ 2,847,742
Consolidated
Total *3
Adjustments*2
¥
— ¥ 2,388,848
—
¥ 2,388,848
¥ 141,469
¥ 2,788,351
(122,673)
¥ (122,673)
(27,276)
¥
(59,391)
¥
29,342
39,099
25,042
4,531
2,638
1,416
102,068
(357)
101,711
76,464
50,969
1,611
12,205
2,849
8,248
152,346
(318)
152,028
51,726
67,004
43,079
7,621
2,126
3,430
174,986
(2,290)
172,696
Thousands of U.S. dollars
2020
Fibers
&
Textiles
Performance
Chemicals
Carbon Fiber
Composite
Materials
Environment
&
Engineering
Life Science
Others*1
Total
Adjustments*2
Consolidated
Total *3
11,268
158,980
$ 8,117,068 $ 7,084,688 $ 2,177,592 $ 2,318,768
597,730
$ 8,128,336 $ 7,243,667 $ 2,185,386 $ 2,916,498
$ 557,776 $ 539,853 $ 192,638 $ 103,364
$ 6,875,432 $ 8,597,390 $ 5,569,292 $ 2,342,215
7,794
9
246,590
$ 489,430 $ 167,537 $ 20,355,083 $
— $ 20,355,083
—
$ 489,439 $ 414,127 $ 21,377,454 $ (1,022,371) $ 20,355,083
$ 14,936 $ 31,204 $ 1,439,770 $ (234,017) $ 1,205,754
$ 606,296 $ 841,278 $ 24,831,903 $ (468,971) $ 24,362,932
(1,022,371)
1,022,371
266,094
391,563
252,546
41,958
22,243
17,445
991,847
(4,881)
986,967
539,623
486,507
15,414
133,888
27,169
81,985
1,284,586
(3,327)
1,281,259
347,914
591,884
209,228
96,801
23,051
18,254
1,287,132
6,682
1,293,814
Sales to outside customers
Intersegment sales
Total sales
Segment income
Segment assets
Depreciation and
amortization
Investment in unconsolidated
subsidiaries and affiliated
companies accounted for
by the equity method
Capital expenditures *4
Sales to outside customers
Intersegment sales
Total sales
Segment income
Segment assets
Depreciation and
amortization
Investment in unconsolidated
subsidiaries and affiliated
companies accounted for
by the equity method
Capital expenditures *4
Sales to outside customers
Intersegment sales
Total sales
Segment income
Segment assets
Depreciation and
amortization
Investment in unconsolidated
subsidiaries and affiliated
companies accounted for
by the equity method
Capital expenditures *4
*1 “Others” represents service-related businesses such as analysis, physical evaluation and research.
*2 a) “Adjustments” of segment income for the year ended March 31, 2020 of ¥(25,461) million ($(234,017) thousand) includes intersegment eliminations of ¥203
million ($1,866 thousand) and corporate expenses of ¥(25,664) million ($(235,882) thousand). “Adjustments” of segment income for the year ended March
31, 2019 of ¥(27,276) million includes intersegment eliminations of ¥(1,018) million and corporate expenses of ¥(26,258) million. The corporate expenses con-
sist of the headquarters’ research expenses that are not allocated to each reportable segment.
b) “Adjustments” of segment assets for the year ended March 31, 2020 of ¥(51,024) million ($(468,971) thousand) includes intersegment eliminations of
¥(75,977) million ($(698,318) thousand) and corporate assets of ¥24,953 million ($229,347 thousand). “Adjustments” of segment assets for the year ended
March 31, 2019 of ¥(59,391) million includes intersegment eliminations of ¥(79,609) million and corporate assets of ¥20,218 million. The corporate assets
consist of the headquarters’ research assets that are not allocated to each reportable segment.
*3 “Segment income” is reconciled to operating income.
*4 “Capital expenditures” do not include the increase in assets resulting from inclusion of subsidiaries in consolidation.
Toray Industries, Inc.
Integrated Annual Report 2020
142
4. Related information
a) Geographic information on sales to outside customers
Millions of yen
2020
Asia
Japan
China
Others
North America,
Europe and
other areas
Total
Sales to outside customers
¥ 961,742
¥ 391,797
¥ 425,305
¥ 435,789
¥ 2,214,633
Millions of yen
2019
Asia
Japan
China
Others
North America,
Europe and
other areas
Total
Sales to outside customers
¥ 1,085,701
¥ 426,788
¥ 454,401
¥ 421,958
¥ 2,388,848
Thousands of U.S. dollars
2020
Asia
Japan
China
Others
North America,
Europe and
other areas
Total
Sales to outside customers
$ 8,839,540
$ 3,601,075
$ 3,909,053
$ 4,005,414
$ 20,355,083
Sales amounts are allocated to countries or regions according to the customers’ location.
b) Geographic information on property, plant and equipment
Millions of yen
2020
Asia
North America,
Europe and other areas
Property, plant and equipment, net
¥ 326,860
¥ 200,018
¥ 172,597
¥ 134,290
¥ 172,744
¥ 1,006,509
Japan
Republic of Korea
Others
U.S.A.
Others
Total
Property, plant and equipment, net
¥ 331,978
¥ 212,713
¥ 166,506
¥ 131,848
¥ 153,831
¥ 996,876
Japan
Republic of Korea
Others
U.S.A.
Others
Total
Millions of yen
2019
Asia
North America,
Europe and other areas
Property, plant and equipment, net
$ 3,004,228
$ 1,838,401
$ 1,586,369
$ 1,234,283
$ 1,587,721
$ 9,251,002
Japan
Republic of Korea
Others
U.S.A.
Others
Total
Thousands of U.S. dollars
2020
Asia
North America,
Europe and other areas
Toray Industries, Inc.
Integrated Annual Report 2020
143
5. Loss on impairment of fixed assets by reportable segment
Millions of yen
2020
Fibers
&
Textiles
Performance
Chemicals
Carbon Fiber
Composite
Materials
Environment
&
Engineering
Life Science
Others
Elimination
&
Corporate*1
Total
Loss on impairment
¥ 901
¥ 3,844
¥ 1,779
¥ 5
¥ 9
¥ —
¥ 1,031
¥ 7,569
Millions of yen
2019
Fibers
&
Textiles
Performance
Chemicals
Carbon Fiber
Composite
Materials
Environment
&
Engineering
Life Science
Others
Elimination
&
Corporate
Total
Loss on impairment
¥ 13,322
¥ 1,145
¥ 776
¥ 2,395
¥ 776
¥ —
¥ —
¥ 18,414
Thousands of U.S. dollars
2020
Fibers
&
Textiles
Performance
Chemicals
Carbon Fiber
Composite
Materials
Environment
&
Engineering
Life Science
Others
Elimination
&
Corporate*1
Total
Loss on impairment
$ 8,281
$ 35,331
$ 16,351
$ 46
$ 83
$ —
$ 9,476
$ 69,568
*1 “Elimination & Corporate” of loss on impairment for the year ended March 31, 2020 of ¥1,031 million ($9,476 thousand) includes loss on impairment of corpo-
rate assets that are not allocated to each reportable segment.
6. Amortization and balance of goodwill by reportable segment
Millions of yen
2020
Fibers
&
Textiles
Performance
Chemicals
Carbon Fiber
Composite
Materials
Environment
&
Engineering
Life Science
Others
Elimination
&
Corporate
Total
Amortization of goodwill
¥ 24
¥ 4,312
¥ 6,292
¥ 314
Balance of goodwill
57
6,367
64,385
1,141
¥ —
—
¥ —
—
¥ —
¥ 10,942
—
71,950
Millions of yen
2019
Fibers
&
Textiles
Performance
Chemicals
Carbon Fiber
Composite
Materials
Environment
&
Engineering
Amortization of goodwill
¥ 1,297
¥ 4,384
¥ 5,054
¥ 864
Balance of goodwill
81
10,705
73,337
1,589
Life Science
Others
¥ —
—
¥ —
—
Elimination
&
Corporate
¥ —
—
Total
¥ 11,599
85,712
Thousands of U.S. dollars
2020
Fibers
&
Textiles
Performance
Chemicals
Carbon Fiber
Composite
Materials
Environment
&
Engineering
Life Science
Others
Elimination
&
Corporate
Total
Amortization of goodwill
$ 221
$ 39,632 $ 57,831
$ 2,886
Balance of goodwill
524
58,520
591,774
10,487
$ —
—
$ —
—
$ —
$ 100,570
—
661,305
Toray Industries, Inc.
Integrated Annual Report 2020
144
20. AMOUNTS PER SHARE
Basic net income per share is computed based on the net
income attributable to owners of parent available for distribu-
tion to stockholders of common stock and the weighted-av-
erage number of shares of common stock outstanding during
the year.
Diluted net income per share is computed based on the
net income attributable to owners of parent available for distri-
bution to the stockholders and the weighted-average number
of shares of common stock outstanding during the year after
giving effect to the dilutive potential of shares of common
Net income attributable to owners of parent:
Basic
Diluted
Cash dividends applicable to the year
Net assets
21. RELATED PARTY TRANSACTIONS
Year ended March 31, 2020
No items to be reported.
Year ended March 31, 2019
No items to be reported.
stock to be issued upon the exercise of warrants and stock
acquisition rights.
Amounts per share of net assets are computed based on
the net assets available for distribution to the stockholders
and the number of shares of common stock outstanding at
year end.
Cash dividends per share represent the cash dividends
proposed by the Board of Directors applicable to the respec-
tive years together with any interim cash dividends paid.
Yen
2020
2019
U.S. dollars
2020
¥ 34.83
¥ 49.61
34.58
16.00
683.61
49.56
16.00
706.95
$ 0.32
0.32
0.15
6.28
Toray Industries, Inc.
Integrated Annual Report 2020
145
Independent Auditor’s Report
The Board of Directors
Toray Industries, Inc.
Opinion
We have audited the accompanying consolidated financial statements of Toray Industries, Inc. and its consolidated subsidiaries (the
Group), which comprise the consolidated balance sheet as at March 31, 2020, and the consolidated statements of income, compre-
hensive income, changes in net assets, and cash flows for the year then ended, and notes to the consolidated financial statements.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated
financial position of the Group as at March 31, 2020, and its consolidated financial performance and its consolidated cash flows for
the year then ended in accordance with accounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities under those stan-
dards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our
report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the consoli-
dated financial statements in Japan, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Responsibilities of Management, the Corporate Auditor and the Board of Corporate Auditors for the Consolidated
Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with
accounting principles generally accepted in Japan, and for such internal control as management determines is necessary to enable
the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as
a going concern and disclosing, as required by accounting principles generally accepted in Japan, matters related to going concern.
The Corporate Auditor and the Board of Corporate Auditors are responsible for overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Misstatements can
arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influ-
ence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion.
• Consider internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances for
our risk assessments, while the purpose of the audit of the consolidated financial statements is not expressing an opinion on
the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclo-
sures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evi-
dence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the
Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw atten-
tion in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inade-
quate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures,
and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves
fair presentation in accordance with accounting principles generally accepted in Japan.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the
Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and
performance of the group audit. We remain solely responsible for our audit opinion.
Toray Industries, Inc.
Integrated Annual Report 2020
146
We communicate with the Corporate Auditor and the Board of Corporate Auditors regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the Corporate Auditor and the Board of Corporate Auditors with a statement that we have complied with the
ethical requirements regarding independence that are relevant to our audit of the financial statements in Japan, and to communi-
cate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where appli-
cable, related safeguards.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Group which is required to be disclosed pursuant
to the provisions of the Certified Public Accountants Act of Japan.
Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March 31, 2020 are
presented solely for convenience. Our audit also included the translation of Japanese yen amounts into U.S. dollar amounts and, in
our opinion, such translation has been made on the basis described in Note 2 to the consolidated financial statements.
Ernst & Young ShinNihon LLC
Tokyo, Japan
June 23, 2020
/s/ Kazuhiko Suzuki
Designated Engagement Partner
Certified Public Accountant
/s/ Takeshi Isogai
Designated Engagement Partner
Certified Public Accountant
/s/ Tsuyoshi Nakano
Designated Engagement Partner
Certified Public Accountant
Toray Industries, Inc.
Integrated Annual Report 2020
147
Stakeholder Engagement
Toray Group has established Basic Policies to Promote Dialogue with Stakeholders. We are proactively communi-
cating with various stakeholders in all aspects of our corporate activities, and periodically report on and discuss
the content of these activities with management. With the goal of strengthening our system for engaging with
stakeholders, we established a new organization to supervise communications in general in April 2018, and we are
working on centralizing the function of information transmission for both internal and external of the Company.
Engaging with Stockholders and Investors
Engaging with Employees
The Group actively communicates with institutional investors
and securities company analysts by providing information
materials when requested and holding same-day results brief-
ings when quarterly earnings are announced. In addition to IR
materials, including integrated annual reports, the Group also
provides a wide range of information on management policies
and strategies, as well as financial and earnings information in
the Investor Relations section of the Toray website.
We also hold briefings on business for stockholders in
order to deepen their understanding of Toray Group.
In fiscal 2019, Toray held four results briefings and held
543 meetings with investors and analysts.
Using in-house newsletters, the company intranet, and com-
pany-wide bulletin boards, Toray Group actively promotes
communication with its employees to not only disseminate
information on company policies and issues, but to improve
cohesion of the Toray brand and heighten each employee’s
sense of belonging.
In addition to messages from the President being provided
in all media, in-house newsletters are published in Japanese,
English, and Chinese, with the goal of sharing information and
promoting understanding of current projects and key manage-
ment and business topics.
In addition, in 2017, we established TORAY NAVI Lite, an
intranet site geared toward Group companies in and outside
of Japan, representing the construction of global infrastructure
for the sharing of information.
Engaging with Customers
Engaging with the Mass Media
Toray believes that the customer comes first. We closely com-
municate with our customers, mainly through our marketing
and sales departments, and periodically conduct customer
satisfaction surveys. The results of these surveys are shared
internally at Board meetings and through in-house newsletters
as we strive to provide even higher quality customer service.
We have also established showrooms at a number of
locations, including the head office in Tokyo, the Toray Shiga
Plant, and the Toray Human Resources Development Center
in Mishima, Shizuoka Prefecture, showing our businesses and
product applications in an easy-to-understand manner to the pub-
lic so as to deepen their understanding of Toray Group’s stance
toward contributing to solving various problems by creating and
providing innovative technologies and cutting-edge materials.
Toray recognizes that public relations and corporate commu-
nication activities have a role in fulfilling responsibilities for
information disclosure as well as influencing public opinion.
Accordingly, Toray’s Corporate Communications Department
actively engages with a wide range of media organizations,
acting as the public’s point of contact with the Company.
Based on Toray’s Information Disclosure Principles, the
department provides fair and impartial information, even if it
may cast the Company in a bad light, in a timely and appro-
priate manner. In fiscal 2019, the Company issued 160 press
releases and responded to 298 media requests for information.
Engaging with Business Partners
Engaging with Local Communities
While providing materials and products as a manufacturer of
advanced materials, Toray Group must engage in upstream
management of its supply chains to better fulfill the needs
of its customers, including the areas of production facilities
and procured raw materials and resources. Accordingly, the
Group has established its Basic Purchasing Policies and Basic
Distribution Policies to emphasize this approach and ensure fair
business activities. Throughout the Group we are promoting
proper and fair transactions, adherence to laws, environmen-
tal preservation, respect for human rights, improvements in
quality and other policies in initiatives with regard to corporate
responsibility in procurement, purchasing, and distribution.
In addition to holding informal gatherings for discussion reg-
ularly, Toray Group strives to engage in more active dialogue
with nearby residents in a variety of other settings, including
by participating in events sponsored by local governments and
inviting local residents onto plant grounds for summer festivals.
Following Toray Group Social Initiative Policies, we aim
for our social contribution activities to contribute to sustain-
able development while meeting the expectations of local
communities.
Specifically, we also proactively engage in CSR activities
organized together with NPOs, including Arakawa River Clean-
aid Forum and Biwako Trust.
Toray Industries, Inc.
Integrated Annual Report 2020
148
External Evaluation
Toray was included in the following SRI indices as of September 30, 2020.
Included in the Dow Jones Sustainability
Index Asia Pacific
Toray is included in the Asia Pacific Index of the
Dow Jones Sustainability Indices (DJSI), an SRI
index administered by U.S.-based Dow Jones and
Switzerland-based RobecoSAM.
Included in the MSCI ESG Indexes
Toray is included in the MSCI ESG Indexes. MSCI
provides institutional investors (from pension funds
to hedge funds) across the globe with various tools
to support investment decisions.
Included in the Ethibel Pioneer & Excellence
Registers
Toray is included in the Ethibel
Pioneer and Ethibel Excellence
investment registers of Forum
Ethibel, a Belgian non-profit
organization
promotes
socially responsible investment.
that
Selected for Inclusion in
the FTSE4Good Index Series
Toray was selected for inclusion in the FTSE4Good
Index Series. The FTSE4Good Index Series was
developed by UK-based FTSE Russell. Those com-
panies that implement outstanding ESG practices
are selected for this index series.
Selected for Inclusion in
the SOMPO Sustainability Index
This Index is used for SOMPO
Sustainable Management, a
responsible investment prod-
uct for pension funds and insti-
tutional investors that invests
in a wide range of companies with a strong reputation
for ESG (Environmental, Social, Governance).
Selected for Digital Transformation
Stocks (DX Stocks) 2020
Jointly organized by the Ministry of
Economy, Trade and Industry and
the Tokyo Stock Exchange, com-
panies that proactively engage
in digital transformation (DX) are
selected and announced as Digital
Transformation Stocks.
TORAY REPORT
2019 received the
Gold Award during
the 2020 International
ARC Awards, the world’s largest
annual report competition.
TORAY REPORT
2019
received
the Gold Award
during the 2020
International ARC Awards, the
world’s
largest annual report
competition.
TORAY REPORT
2019 received the
Bronze Award in the
Corporate Activity
Report
category
during the 41st Japan
BtoB Advertising Awards in 2020.
Toray Industries, Inc.
Integrated Annual Report 2020
149
Integrated Annual Report Award List Toray Group Worldwide
Network
Toray Group operates businesses in 29
countries and regions including Japan.
Consolidated subsidiaries
Subsidiaries accounted for by equity method
Total subsidiaries
Affiliates accounted for by equity method
Companies subject to consolidation
Japan Overseas
Total
62
27
89
13
102
123
34
157
23
180
185
61
246
36
282
(As of March 31, 2020)
Japan
France
Indonesia
Consolidated Subsidiaries
Consolidated Subsidiaries
Consolidated Subsidiaries
n Toray Films Europe S.A.S.
n Toray Carbon Fibers Europe S.A.
l n P.T. Indonesia Toray Synthetics
l P.T. Toray Polytech Jakarta
China
Thailand
Consolidated Subsidiaries
Consolidated Subsidiaries
l n Ichimura Sangyo, Co., Ltd.
n Toray Plastics Precision Co., Ltd.
n Toray Fine Chemicals Co., Ltd.
n Soda Aromatic Co., Ltd.
n Toray Advanced Film Co., Ltd.
l Suido Kiko Kaisha, Ltd.
l Toray Construction Co., Ltd.
l Toray Engineering Co., Ltd.
n Toray Medical Co., Ltd.
l Toray Systems Center, Inc.
l Toray Enterprise Corp.
n Toray International, Inc.
n Chori Co., Ltd.
Affiliates Accounted for by Equity Method
l l Toray Fibers (Nantong) Co., Ltd.
l Toray Sakai Weaving & Dyeing
(Nantong) Co., Ltd.
l Toray Polytech (Nantong) Co., Ltd.
l Toray Industries (H.K.) Ltd.
n Toray Plastics (China) Co.,Ltd
l Toray Industries (China) Co., Ltd.
Affiliates Accounted for by Equity Method
l Pacific Textiles Holdings Ltd.
l n Du Pont-Toray Co., Ltd.
Republic of Korea
l Toray Opelontex Co., Ltd.
l Japan Vilene Company, Ltd.
n Dow Toray Co., Ltd.
n Sanyo Chemical Industries, Ltd.
United Kingdom
Consolidated Subsidiaries
l Toray Textiles Europe Ltd.
Italy
Consolidated Subsidiaries
l Alcantara S.p.A.
Consolidated Subsidiaries
l n n l Toray Advanced Materials Korea Inc.
n Toray Battery Separator Film Korea
Limited
n STEMCO, Ltd.
Affiliates Accounted for by Equity Method
n STECO, Ltd.
Malaysia
Consolidated Subsidiaries
l Penfabric Sdn. Berhad
l n Penfibre Sdn. Berhad
n Toray Plastics (Malaysia) Sdn. Berhad
l Toray Textiles (Thailand) Public
Company Limited
l n Thai Toray Synthetics Co., Ltd.
U.S.A.
Consolidated Subsidiaries
n Toray Plastics (America), Inc.
n Toray Resin Co.
n Toray Composite Materials
America, Inc.
n Zoltek Companies, Inc.
n Toray Advanced Composites USA
Inc.
Others
l Fibers & Textiles
n Performance Chemicals
n Carbon Fiber Composite Materials
l Environment & Engineering
n Life Science
l Others
n Trading
Major Offices and Plants in Japan
Osaka Head Office
Branches
Nagoya, Hokuriku, Kyushu, Tohoku, Chugoku & Shikoku
Plants
Shiga, Seta, Ehime, Nagoya, Tokai, Aichi, Okazaki,
Mishima, Chiba, Tsuchiura, Gifu, Ishikawa, Nasu
Overseas Offices
U.S.A.
Toray Industries (America), Inc.
Republic of Korea
Toray Industries Korea Inc.
Germany
Toray Industries Europe GmbH
India
Toray Industries (India) Private Limited
China
Toray Industries, Inc., Beijing Office
Brazil
Toray do Brasil Ltda.
Toray Industries, Inc.
Integrated Annual Report 2020
150
Investor Information (As of March 31, 2020)
Common Stock:
Issued: 1,631,481,403 shares
(including treasury stock)
Cash Dividends Per Share
Total for the year
Number of Stockholders: 203,269
Interim
FY 2019
¥16.00
8.00
FY 2018
¥16.00
8.00
Annual General Meeting:
The annual general meeting of
stockholders is normally held in June
in Tokyo.
Listings:
Common stock is listed on the Tokyo
Stock Exchange.
Independent Auditor:
Ernst & Young ShinNihon LLC
Transfer Agent:
Sumitomo Mitsui Trust Bank, Limited
1-4-1, Marunouchi Chiyoda-ku, Tokyo
100-0005, Japan
Principal Stockholders
Shares held
Percentage of
shares held*
The Master Trust Bank of Japan, Ltd. (Trust Account)
136,884,100
Japan Trustee Services Bank, Ltd. (Trust Account)
106,705,100
Nippon Life Insurance Co., Ltd.
Taiju Life Insurance Co., Ltd.
Japan Trustee Services Bank, Ltd. (Trust 7 Account)
71,212,250
35,961,000
33,635,400
National Mutual Insurance Federation of Agricultural Cooperatives 32,193,000
Japan Trustee Services Bank, Ltd. (Trust 5 Account)
JP Morgan Chase Bank 385151
Sumitomo Mitsui Banking Corporation
Japan Trustee Services Bank, Ltd. (Trust 4 Account)
28,900,900
26,571,366
25,522,000
24,769,300
8.55
6.67
4.45
2.25
2.10
2.01
1.81
1.66
1.59
1.55
* Percentage of shares held is calculated excluding 30,707,673 shares of treasury stock.
Stock Price Range
Composition of Stockholders
(Thousands of shares)
(Yen)
1,500
1,200
900
600
300
0
2015
April
Treasury Stock
30,708
1.88%
Individuals
and Others
359,728
22.05%
Non-Japanese
Investors
379,914
23.29%
Japanese
Financial
Institutions
688,956
42.23%
Japanese
Securities
Companies
34,409
2.11%
Other Japanese
Companies
137,764
8.44%
2016
April
2017
April
2018
April
2019
April
2020
March
Corporate Data (As of March 31, 2020)
Toray Industries, Inc.
Head Office
Nihonbashi Mitsui Tower, 1-1,
Nihonbashi-Muromachi 2-chome,
Chuo-ku, Tokyo 103-8666, Japan
Telephone: 81 (3) 3245-5111
Facsimile: 81 (3) 3245-5054
www.toray.com
URL:
Established:
January 1926
Paid-in Capital:
¥147,873,030,771
Number of Employees:
48,031
Parent company:
7,568
Japanese subsidiaries: 10,430
Overseas subsidiaries: 30,033
Toray Industries, Inc.
Integrated Annual Report 2020
151
Toray Integrated
Annual Report 2020
April 1, 2019–March 31, 2020
Printed in Japan
Issued: November 2020
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