At a Glance

(Millions of yen)
  Fiscal 2019 Fiscal 2020
Net sales 861,456  786,083
Operating income 105,740  81,658
Profit attributable to owners of the parent company 78,134  55,551
Free cash flow 14,200 29,588
Net income per share (yen) 240.62  171.03
Dividends per share (yen) 56.0 56.0

Note: "Partial Amendments to Accounting Standard for Tax Effect Accounting" (ASBJ Statement No. 28, February 16, 2018) was applied from the beginning of the fiscal year ended on March 31, 2019. These partial amendments have been retroactively applied to the previous fiscal years.  

  • About Tosoh Report 2020

    Editorial Policy

    This renamed Tosoh Report for fiscal year 2020—the period from April 1, 2019 through March 31, 2020—reflects ongoing efforts by Tosoh Corporation to simplify its reporting for its investors and other stakeholders. We aim to provide all of our stakeholders with an easy-to-understand account of the Tosoh Group’s efforts to enhance corporate value.

    This report integrates financial information, such as management strategies, business overview, and business performance, with nonfinancial information, including specific initiatives to achieve sustainable growth for the Tosoh Group. It features research and development (R&D) and external director roundtable directives that pursue open innovation outside the Tosoh Group in addition to the innovative work continuously carried out in-house.

    Reportable Organizations

    Unless otherwise stated, this report covers Tosoh Corporation on a nonconsolidated basis. Its financial information, however, is presented on a consolidated, Tosoh Group basis.

    Reporting Period

    April 1, 2019, through March 31, 2020.

    Forward-Looking Statements

    The Tosoh Report contains past and present facts about the Tosoh Group. It also includes forward-looking statements about the Tosoh Group’s plans, strategies, and financial outlook based on information available only as recently as the end of September 2020. The forward-looking statements, therefore, are subject to a number of risks and uncertainties that could cause actual results and performance to differ materially from those described.

  • Recognition from Society

    The Tosoh Group’s technological development and social and environmental initiatives are highly thought of.

    Catalysis Society of Japan Award for Technological Progress

    Tosoh Group parent company, Tosoh Corporation, received the 2019 Catalysis Society of Japan Award for Technological Progress. The society presents this award in recognition of significant R&D in catalyst-related industrial technology.

    The award recognizes Tosoh’s R&D and application of a high-performance proprietary catalyst for oxychlorination reactions in the vinyl chloride monomer (VCM) manufacturing process. Tosoh added a cylindrical shape and unique pore structure to the simple composition of the conventional copper-based catalyst and thereby dramatically improved catalytic activity, selectivity, and durability. Tosoh also established a simulation technology to accurately determine catalyst life by analyzing catalytic degradation. Extending the period of a catalyst’s use contributes to cost reductions.

    Tosoh intends to use its technological products to contribute to society through the production of VCM

    Society for Chemistry and Micro-Nano Systems Technology Award

    Tosoh Corporation was awarded the 2018 Technology Award from the Society for Chemistry and Micro-Nano Systems. This award recognizes significant technological developments in chemistry and micro-nano systems.

    Raising the production volume of microreactors, which feature high-reaction efficiency and uniform droplet-generation capability in small spaces, has proven challenging. Tosoh, however, succeeded in developing the world’s first microreactor capable of mass production. It did so by developing technologies to integrate hundreds to tens of thousands of channels on a give-inch substrate and to laminate multiple substrates. Using these technologies, Tosoh has demonstrated the mass production capability of a liquid chromatography separation agent at a pilot plant.

    Tosoh will continue to apply the microfabrication technology at the core of these new technologies to develop products in a wide range of fields in support of society.

    Fire and Disaster Management Commissioner’s Award

    The Nanyo Complex Disaster Prevention Center captured Japan’s Fire and Disaster Management (FDMA) Commissioner’s Award in a self-protection disaster prevention organization skills contest among petrochemical complexes. The contest was sponsored by the FDMA of Japan’s Ministry of Internal Affairs and Communications. Tosoh earned the award for the fourth consecutive year.

    Intel Corporation’s Preferred Quality Supplier Award

    Tosoh Quartz, Inc. and Tosoh SMD, Inc., each received a 2019 Preferred Quality Supplier (PQS) Award from Intel Corporation 

    Ministry of Economy, Trade and Industry Certified Health & Productivity Management Outstanding Organization Recognition

    In March 2020, Tosoh Corporation was recognized as a Certified Health & Productivity Management Outstanding Organization 2020. Japan’s Ministry of Economy, Trade and Industry (METI) recognizes enterprises undertaking superior health management. Tosoh earned the recognition for its various initiatives to support the physical and mental health of its employees. 

    Ministry of Health, Labor and Welfare Kurumin Certification

    Japan’s Ministry of Health, Labor and Welfare established its Kurumin certification based on Japan’s Act on Advancement of Measures to Support Raising Next-Generation Children. Companies that meet the ministry’s standards, including the achievement of their action plan goals, receive Kurumin certification. Tosoh received Kurumin certification in September 2016.

  • Managing Risks

    Business and Other Risks

    The Tosoh Group identifies and analyzes risks that may have a significant impact on its operations and responds appropriately. Should risks arise, it takes measures to minimize their impact and protect corporate value. For more information, please refer to the “Governance” section of Tosoh Report 2020. 

    Risk Promotion System

    Under the supervision of the Board of Directors, the Tosoh Group has established a system to analyze and respond to risks that could have a significant impact on the management of every aspect of its operations. Each operation is responsible for the systematic implementation of risk measures and for prompt response to crises.

    Major Risk Items

    The following are the principal risks that the Tosoh Group is aware of that could materially affect its business performance, financial position, and cash flow. Forward-looking statements in the text are based on the judgment of the Tosoh Group as of March 31, 2020.

    Climate change

    The adoption of the Paris Accord has led to worldwide efforts to reduce greenhouse gas emissions. These emissions are believed to be the cause of climate change and global warming.

    The Tosoh Group’s business performance, financial position, and cash flow could be affected by the introduction of quantitative restrictions or the imposition of taxes related to CO2 and other emissions and the use of fossil fuels or emergence of nonfossil fuel alternatives, which could reduce demand for petroleum-related products. To this end, the Tosoh Group has established the CO2 Reduction and Effective Use Promotion Committee to promote technological improvements for CO2 reduction and use.

    The occurrence of extreme weather events, such as typhoons and floods caused by climate change, could result in damage to Tosoh Group production facilities and to roads and other transportation routes. In preparation, the Tosoh Group is working on adaptation measures for its various facilities.

    Quality issues

    Defects in a product may lead to a loss of public trust in the product and its maker, to the discontinuation of sales of the product, or even to legal action against the product’s maker. Each or all of these could affect the Tosoh Group’s business performance, financial position, and cash flow. The Tosoh Group has, therefore, established a quality management system for its products and ensures that each of its members carries product liability insurance.

    Environmental and other legal regulations

    Legal regulations governing the environment and other matters are strengthening globally, as is the emphasis on corporate social responsibility. This may lead to restrictions on business activities, heightened capital investment, and unanticipated expenses that could have an impact on the Tosoh Group’s business performance, financial position, and cash flow. So the Tosoh Group conducts its business activities in the recognition that environmental protection and health and safety and the like are management issues of the highest priority.

    Raw material and fuel procurement

    The sources for raw materials and fuels are often specific to regions and suppliers. Anything that disrupts the procurement of those materials and fuels—from natural disasters to accidents, regional politics and conflicts, and supplier insolvencies—could affect the Tosoh Group’s business performance, financial position, and cash flow. To mitigate the risk of disruption, the Tosoh Group procures raw materials and fuels on a stable basis from a diversity of sources. It concludes medium- and long-term contracts with suppliers and makes purchases through the spot market.

    Information security

    Cyberattacks are an ever-increasing, ever-present issue that threaten the safety of production facilities and the sanctity of intellectual property. The hacking of a plant control system or other mission-critical system at a plant or office could force the Tosoh Group to suspend one or more key operation. That, in turn, could affect the Tosoh Group’s business performance, financial position, and cash flow and result in the loss of public confidence in the safety of the Tosoh Group’s operations.

    Similarly, if select information is leaked to outside parties as the result of a cyberattack or other means the Tosoh Group’s public trust and competitiveness could be compromised. And this, too, could negatively affect the Tosoh Group’s business performance, financial position, and cash flow.

    Given the risks to safety and to intellectual property, the Tosoh Group has implemented various measures to protect itself from cyberattacks and other forms of theft. Its commitment to the management of confidential and personal information, for example, takes the specific form of compliance with the European Union (EU) General Data Protection Regulation (GDPR).

    Other risks are as noted below:

    • Occurrences of accidents, disasters, and infectious diseases
    • Fluctuations in international market prices for products and fuels
    • Changes in inventory valuations
    • Shifts in domestic and international economic conditions, supply and demand, and competition
    • Increases, decreases, or issues with acquisitions, capital alliances, and business restructuring
    • Fluctuations in exchange rates
    • Troubles in domestic and overseas business activities
    • Fluctuations in interest rates
    • Increases, decreases, or problems with capital investments
    • Increases in litigation
    • Infringements and loss of intellectual property
    • Innovations to technology
    • Impairments in fixed assets
    • Revaluation of securities
    • Reversal of deferred tax assets
    • Rises in retirement benefits
    • Estimates based on construction progress standards
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