hitachi chemical environmental report · molded parts, adhesive films, transparent emi shielding...

Environmental Report

The scope and reporting principles�This report was prepared to report the results and future plans for the environmental and safety activities of the Hitachi Chemical Group. In preparing the report we used the "Guideline on Environmental Reports" provided by the Ministry of the Environment and the "Guideline on Sustainability Reports" provided by the Global Reporting Initiative (GRI) as the basis.

This report differs from previous reports in the following respects:

• The title has been changed from "Responsible Care Report" to "Environmental Report."

• We have elaborated on the general view of the environmental impact and data on PRTR＊.

Those data for each site are also reported.• The report includes the new assessment tool

version 2 of GREEN 21, which is the standard of assessing environmental activities in the Hitachi Group.

The Hitachi Chemical Group is committed to making continuous improvements on its environmental protective measures.

Reporting periodThis report centers on the environmental and safety activities of fiscal 2002 (April 1, 2002 through March 31, 2003). This report covers the Hitachi Chemical Co., Ltd., and its 14 group companies as listed below:

Companies of the Hitachi Chemical Group covered in this reportShin-Kobe Electric Machinery Co., Ltd., Hitachi Powdered Metals Co., Ltd., Hitachi AIC Inc., Hitachi Housetec Co., Ltd.,＊ Nippon Denkai, Ltd.,Japan Brake Industrial Co., Ltd., Hitachi Chemical Automotive Products Co., Ltd., Hitachi Kasei Polymer Co., Ltd., Hitachi Chemical Filtec Inc., Hitachi Chemical Industrial Materials Co., Ltd., Hitachi Chemical Coated Sand Co., Ltd., Hitachi Chemical Asia-Pacific Pte. Ltd., Hitachi Chemical (Johor) Sdn. Bhd., and Hitachi Chemical Co. (Taiwan) Ltd.＊Hitachi Housetec Co., Ltd. merged with Hitachi Kasei Unit Co., Ltd. and Fukuyama Hitachi Kasei Ltd. on January 1, 2003. Hitachi Housetec Co., Ltd. includes data about Hitachi Kasei Unit Co., Ltd. and Fukuyama Hitachi Kasei Ltd.

CONTENTS

＊PRTR: Pollutant Release and Transfer Register

Taking Responsible

Message from the PresidentCompany OverviewTopics for Fiscal 2002Environmental Protection Action Guidelines of 　Hitachi Chemical

Environmental ManagementCompany Organization and Management SystemsAction Plans and ResultsActivities on GREEN 21 Version 2Environmental AccountingEnvironmental Training

Environmental PerformanceDevelopment for Green ProductsOverview of Environmental ImpactsPrevention of Global WarmingReduction of Air Pollution ImpactsReduction of Service Water Consumption and 　Water Pollution ImpactsEnvironmental Effects of Chemical SubstancesWaste Reduction - Zero-emission ActivitiesControl of Chemical SubstancesGreen Procurement

Social PerformanceEnvironmental Information DisclosureSocial Contribution ActivitiesOccupational Safety Activities

Introduction of the Works

………………………… 2…………………………………… 3

………………………………… 5

…………………………………… 6

… 7……………………………… 9

………………… 10………………………… 11

…………………………… 12

…………………… 13……………… 15

……………………… 16………………… 17

…………………………… 18…… 19

………… 20…………………… 21

………………………………… 22

……………… 23……………………… 24……………………… 25

…………………………… 27

Message from the President�

In accordance with our company's basic philosophy, Hitachi Chemical has been contributing to society through the continuous development of our unique and superior technologies and products. At the same time, as a responsible corporate citizen, we have taken strides to bring about a truly prosperous society based upon our strong belief in balancing harmony with the environment with active involvement in our society, and, as a number of the Hitachi Group and corporate citizens, strive for sustainable development.

Now that we have entered the 21st Century, also known as the "Age of the Environment," coexistence with our global environment has become a major challenge for all mankind. Increasingly, companies have been required to reduce the environmental impact of their business activities and they have taken greater steps to contribute to a society with sustainable recycling. Given these circumstances, our Group must not only maintain high standards of responsible care for the environment and safety, but must also integrate exemplary environmental management practices with all of our business activities, and, as a member of the Hitachi Group and corporate citizens, strive for sustainable development.

Since fiscal 2002, our Environmental Management Council, which is chaired by the president, has been working closely with the Environmental Safety and Management Committee, which is chaired by the director in charge of the environmental activities. This Council determines the environmental management policies for our Group and also reviews important issues related to environment, safety and disaster prevention.

As of fiscal 2000, with regard to our production activities, we embarked on a challenge of achieving "zero-emissions." As a result of this campaign, in fiscal 2002, one of our subsidiaries managed to reduce its final landfill rate to no more than one percent and achieved a final landfill amount of less than five tons for that year. Overall, our company achieved a final landfill rate of one percent or less at all of our sites. We will continue our efforts to achieve a final landfill quantity of less than five tons per annum.

Furthermore, our Group added some voluntary controlled substances to the list of substances that are registered by the Pollutant Release and Transfer Register Act. We also established a target of reducing emissions of these chemicals into the atmosphere by at least 30% of fiscal 2000 level by fiscal 2005. For Hitachi Chemical alone, we are endeavoring to reduce atmospheric emissions of the chemicals by as much as 70% by fiscal 2005 with reference to fiscal 2000. By taking actions such as these, we will continue our commitment to maintaining excellence in environmental management and balancing these efforts with those that maximize the value of our Group companies.

In fiscal 2000, we introduced an Occupational Safety and Health Management System and have since striven to achieve our target of zero injuries and zero incidents. However, our entire Group recorded nine work-loss injuries in fiscal 2002. This year, we will continue to provide safety training and related programs that reemphasize basic safety practices, while redoubling our efforts to achieve our target of zero injuries and zero incidents.

Since fiscal 1999, each year we have issued our environmental report and actively disclosed environmental information. During this period, we have taken into account useful comments and constructive feedback from outside the company. We hope this year's environmental report will enable you to better understand our overall philosophies and the programs that we will pursue in order to protect our environment and maintain the health and safety for our Group. We welcome your response and look forward to receiving recommendations that will contribute to improving our environmental practices.

July 2003

Yasuji Nagase

President, Chief Executive Officer and Director

Care of People and the Earth

Hitachi Chemical aims to become a"Technologically Innovative Company"

that offers the best solutions to its customers.

Housing equipmentand

environmental facilities

Electronics-relatedproducts

Chemical-relatedproducts

Polymertechnology

Company Overview (as of March 31, 2003)

•Ordinary income•Net sales

1998 1999 2000 2001 2002

600

500

400

300

200

100

0

236.0 249.5 257.9

524.2544.8

586.3

480.7 494.2

(billion yen)(billion yen)

(FY)(FY) 1998 1999 2000 2001 2002

40

50

30

20

10

0

12.7 15.4

20.9

4.5

11.4

18.3

28.1

43.7

9.3

19.7

179.7187.1

Company OverviewCompany Overview

Hitachi Chemical Company, Ltd., formally a chemical products division of Hitachi, Ltd., was incorporated in 1962. Since the company began operations in 1963, it has aggressively diversified its business portfolio with its core polymer technologies accumulated over the years while developing leading-edge technologies and exploring new themes as a chemicals manufacturer engaged in a broad range of business domains such as Electronics-related products, Chemical-related products, Housing equipment and environmental facilities.

Company name…………… Hitachi Chemical Co., Ltd.Head office address……… 1-1, Nishi-Shinjuku 2-chome, Shinjuku-ku, Tokyo, JapanDate of establishment…… October 10, 1962Paid-in capital………………15,284 million yenEmployees ………………… 3,378

17,061 (consolidated)�Operations office and sales offices…………

Kansai Area Operations Office, four sales officesWorks ……………………… Yamazaki Works, Goi Works, Shimodate Works,

　and Goshomiya WorksGroup companies………… 65 consolidated subsidiaries, 9 affiliates accounted for

　by the equity method

Non-consolidatedConsolidated


�

Epoxy molding compounds, die-bonding materials, polishing slurries for planarizing semiconductor wafer surfaces, anisotropic conductive films for liquid crystal displays, copper clad laminates for printed wiring boards, multilayer printed wiring boards, photosensitive dry films, and plating chemicals for printed wiring boards.

Electrical insulating vanishes, unsaturated polyester resins, synthetic resins for paints and inks, expandable polystyrene beads, ASA resins, pharmaceuticals and diagnostics, carbon brushes, carbon anode materials for lithium ion batteries, ceramics, single crystal scintillators, disc brake pads, automotive molded parts, adhesive films, transparent EMI shielding films, and contact-less IC cards.

Prefabricated bathroom units, home bathtubs, system kitchens, compact sized kitchen units, vanity tables, toilet seats with warm water cleansing and bidet functions, home boilers, domestic wastewater treatment systems, and fiber reinforced plastic water tanks.

•Net sales by Segment•Net income

Electronics-relatedproducts


Housing equipment andenvironmental facilities

Photosensitive dry films

Epoxy molding compounds

Carbon anode materials for lithium ion batteries

GSO single crystal scintillators

Prefabricated bathroom units

Household wastewater treatment systems

1998 1999 2000 2001 2002

14

12

(billion yen)

(FY)

10

8

6

4

2

0

6.0

7.8 7.9

2.7

6.4

8.0

12.513.0

3.1

8.6Electronics-relatedproducts


Housing equipmentand environmental facilities 16%

49%

42%

51%42%

Non-consolidated

Consolidated


Topics for Fiscal 2002

The following summarizes the topics in this report for the Hitachi Chemical Group during fiscal 2002.For details, see the relevant pages.

• Environmental management system The Hitachi Chemical Group moved ahead with efforts of obtaining certification under ISO 14001 in 1995. The ISO certification was awarded for all sites by the end of fiscal 2002. In fiscal 2002, the group launched "Environmental Management Council," in March chaired by the president, to raise the profile of its environmental management.

• Activities on GREEN 21 Version 2The GREEN 21 defined the standard for assessing environmental activities pursued by the Hitachi Group, and was revised as GREEN 21 Version 2, with additional assessment items from fiscal 2002. They aim to achieve at least 640 points in fiscal 2005, as compared to fiscal 2002 level. In fiscal 2002, Hitachi Chemical registered 373 points, while its group companies registered 358 points.

• Promoting the development of green products We aim to increase its ratio of green products to at least 60% in fiscal 2003. In fiscal 2002, Hitachi Chemical registered 39%, while the group companies registered 36%.

• Overview of environmental impacts An overview of the environmental footprints caused by our production activities is shown here.

• Prevention of global warming The index of CO2 emissions per sales amount is indicative of our efforts of reducing the CO2 emissions resulting from energy consumption. We have targeted at reducing the CO2 emissions per sales amount to 75% or less of fiscal 1990 level by fiscal 2010. From fiscal 2002 onwards, we set another target: to reduce the CO2 emissions to no more than 93% of the fiscal 1990 level in fiscal 2010, and are making continuous efforts to meet this target. In fiscal 2002, CO2 emissions at Hitachi Chemical were lowered to 53% of fiscal 1990 level.

• Reduction of chemical substances emissions Registration under the Pollutant Release and Transfer Register (PRTR) Act was enacted in fiscal 2002. All the figures from fiscal 2001 were publicly reported nationwide in March 2003. The Hitachi Chemical Group has been endeavoring to reduce the emission of chemical substances into the atmosphere to no more than 70% of the fiscal 2000 level by fiscal 2005. To aggressively promote the reduction efforts, Hitachi Chemical set a target reducing its emissions no more than 30% by fiscal 2005. In fiscal 2002, Hitachi Chemical reduced the emission of relevant chemical substances into the atmosphere to 83% of that emitted in fiscal 2000.

• Wastes reductionAs part of its "zero-emission" campaign, the Hitachi Chemical Group has been stressing the efforts to reduce its ratio of final landfill wastes to less than 1% and its final landfill to less than 5 tons by fiscal 2005. In fiscal 2002, Hitachi Chemical achieved a level of 1% or less at all sites. One group company, Hitachi Chemical Filtec Inc., achieved its goals in terms of both final landfill ratio and final landfill, thus achieving zero-emission.

Seepage7

Seepage10

Seepage15

Seepage13

Seepage16

Seepage19

Seepage20

Environmental Management

Environmental Performance

Environmental Protection Action Guidelinesof Hitachi Chemical(Global Environment Charter)

Since establishing our own Environmental Protection Action Guidelines in March 1993(in accordance with the Basic Philosophy of its Standards for Corporate Activities),

we have been conducting our environmental activities while adhering to those guidelines.

Standards for Corporate ActivitiesBasic Philosophy

Our corporate basic philosophy, since we became independent from Hitachi, Ltd. in October 1962 as a separate entity, is to further enhance the founding spirits of Hitachi, Ltd. - harmony, sincerity and a pioneering spirit. And we take pride to be the people of Hitachi Chemical and contribute to the society in which we are taking part through developing superior technologies and products with untiring and creative efforts. We fully recognize that a company is a member of a society where which it belongs. We implement our commitment to corporate activities in justice and transparency. We strive as a responsible corporate citizen toward bringing about a prosperous society.

1. Recognizing there is a growing concern over global environment as common issue for all mankind, harmony with environment will be given a top management priority in the entire company.

2. Officers and site directors in charge of environmental issues will take an initiative in establishing a structure to promote environmental protection, enacting regulatory measures for environmental stewardship, setting a target for reducing environmental impacts. Environmental auditing will also be implemented to monitor those activities to ensure continuous improvements.

3. By duly understanding needs for solving environmental problems facing the world, we will strive to develop innovative and highly reliable technologies and products which will lead us to contributing to societies.

4. We will take into account all steps in value chains from R&D and product designing, to manufacturing, logistics, fulfillment and disposal in an attempt to reduce the environmental impacts.

5. We will constantly monitor and study impacts on our environment as a result of our business activities and seek new technologies and materials which are superior in environmental safety, energy conservation and resources conservation to reduce overall environmental impacts.

6. We will not only observe regulations set by international regulatory bodies, government and local authorities, but also set our own voluntary standard, when and where necessary, for maintaining environmental stewardship.

7. For business activities abroad and exporting products, we will also take into due consideration their impacts on local environment and implement measures to correspond to needs from local communities.

8. We will continuously raise environmental awareness of our employees and contribute to societies with respect and care for them from a broader viewpoint through environmental protection activities.

9. Should an environmental problem arise as a result of our business activities, we will take proper measures to minimize the impact on the environment.

Enacted in March 1993

Environmental Protection Action Guidelines

Company Organization and Management Systems

President

Safety & EnvironmentalManagement Office

Promotion of environment, safetyand disaster prevention activities

Promotion of environmental anddisaster prevention activities

Promotion of chemical substancessafety management

Promotion of reduction andrecycling of industrial wastes

Promotion of safety managementof chemical substances

Conducting environmental, safetyand disaster prevention audits

Promotion of product safety

Promotion of safety andhealth activities

EnvironmentManagement Center

Chemical SubstancesSafety Center

Environmental & SafetyAuditing Committee

Industrial WastesReduction Committee

Energy Saving andEcology Section

Product Safety Committee

Council of Chemical Substances SafetyManagement Representatives

SafetyManagement CenterEnvironmental

Management Council

Environmental & SafetyManagement Committee

Council of officers in chargeof environment and safety

in group companies

Research &Development Center

��

Headquarters andSales Offices

��

Groupcompanies

��

Works��

Environmental &Safety Management

Center


Center


Center


Center

Environmental ManagementEnvironmental Management

Internal environmental audit

Environmental Management Council

•Company organizationTo promote consolidated environmental management including its group companies in issues related to the environment, safety, and disaster prevention, Hitachi Chemical started running an Environmental Management Council, established in March 2002 chaired by the president, as a higher organization of the Environmental & Safety Management Committee.

•Environmental management systemsThe Hitachi Chemical Group is one of the first entities to have initiated the introduction of the Environmental Management Systems according to ISO 14001 (an international environmental standard) aiming at continuous improvements to achieve environmental management, reduce environmental risks.

Hitachi Chemical's Goi Works became the first Japanese chemical company to have obtained certification under BS 7750 (a British environmental management system standard). After that, by December 1996, all its manufacturing sites obtained ISO 14001 certification. Certification was also obtained by the head office, Research & Development Center, and the Sales Offices such as the Kansai Area Operations Office, Chubu Sales Office. Internal environmental audits are conducted once a year by auditors from non-relevant works to be audited in order to keep the audit objective and fair.

The group companies proceeded with obtaining ISO 14001 certifications, beginning with the Katori Works of Hitachi Powdered Metals Co., Ltd. in June 1997. In fiscal 2002, all sites of the group companies obtained certification.

The following page shows the list of the Hitachi Chemical Group companies obtained ISO 14001 certification.

Promotion of energy saving andresources conservation

Hitachi Chemical Co., Ltd. 　 Headquarters 　 Goi Works 　 Shimodate Works 　 Yamazaki Works (Kashima) 　 Yamazaki Works 　 Goshomiya Works 　 Research & Development Center 　 Kansai Area Operations Office 　 Chubu Sales OfficeShin-Kobe Electric Machinery Co., Ltd. 　 Saitama Factory 　 Hikone Factory 　 Nabari FactoryHitachi Powdered Metals Co., Ltd.　　 Katori Works 　 Matsudo WorksHitachi AIC Inc.　　Miharu Works 　 Haga Works 　 Printed Wiring Board DivisionHitachi Housetec Co., Ltd.　　 Headquarters 　 Yuki Works 　　 Toyama Works 　 Fukuyama WorksNippon Denkai Ltd.　　 Shimodate Works 　 Fujieda WorksJapan Brake Industrial Co., Ltd.　　 Hachioji Factory 　 Chiba FactoryHitachi Kasei Polymer Co., Ltd. 　 Noda Works 　 Tokushima Works　 Namie Hitachi Chemical Co., Ltd. 　 Namie Japan Brake Co., Ltd. 　 Hiroshima Japan Brake Industrial Co., Ltd.　 Shin-Kobe Platechs Co., Ltd. 　 Hitachi Kasei Shoji Co., Ltd. and 　 Hitachi Kasei Business Service Co., Ltd. 　 Akebono Technos Co., Ltd. 　 Hitachi Chemical Industrial Materials Co., Ltd. 　 Hitachi Chemical Maintenance Co., Ltd.

　 Hitachi Chemical Co. (Taiwan) Ltd.

　 Taiwan Kobe Battery Co., Ltd.

　 Hitachi Chemical

　 Electronic Materials (Korea) Co., Ltd.

　 Hitachi Chemical

　 Automotive Products (Thailand) Co., Ltd.

　 Hitachi Chemical Asia- Pacific Pte. Ltd.

　 Hitachi Chemical (Malaysia) Sdn. Bhd.

　 Hitachi Chemical ((Johor) Sdn. Bhd.

Group companies included in the sites that obtained certificationHitachi Chemical Automotive Products Co., Ltd., Hitachi Chemical Filtec Inc., Hitachi Chemical Coated Sand Co., Ltd.,Neuron Corporation, Nikka Equipment & Engineering Co., Ltd., Hitachi Chemical Electronics Co., Ltd., Shimodate Sangyo Co., Ltd., Nikka Techno Service Co., Ltd., Nikka Sumiate Co., Ltd., Goi Chemical Co., Ltd., Shin-Kobe Techno Service Co., Ltd., MEC Co., Ltd., and Denkai Shoji Co., Ltd.

En

viron

men

tal Man

agem

ent

7 overseas sites

35 domestic sites

Site name

Site name

•List of sites that obtained the certification (as of March 31, 2003)

The following details the environmental safety action plan and the results of the Hitachi Chemical Group in fiscal 2002.

Environmental management

Promoting activities on GREEN 21 Version 2 Increasing green points 2002 640 points 2005 373 points 358 points

The entire Introduction of the environmental Obtaining ISO 14001

― group obtained 2005 Completemanagement system certificationcertification

Target for activities Results of fiscal 2002Category/prioritized measures Item Base year Target figure Target year Hitachi Group

(Fiscal) (Fiscal) Chemical companies

Action Plans and Results

Environmental performance

Expansion of the scopeRatio of green products ― 60% or more 2003 39% 36%of green products

Consumption of lead solder ― 0 2003 0 0.8tons

CO2 Emission

1990 93% 2010 83% ―�

Preventing global warmingCO2 Unit requirement

1990 75% or less 2010 93% ―�index

SF6 Emission

―3% or less

2005 43% ―�of consumption

Reduction of chemical substances Ratio of reduction of chemical2000 2005 17% ―discharged into the atmosphere substances emission

Ratio of waste disposed ― 1% or less 2005 0.5% 5.2%of as landfills

Waste disposed―

Less than2005

Less than Less than�

Reduction of wastes of as landfills 5 tons/year・site 48 tons/year・site 16tons/year・site

Waste produced 1991 100% or less 2010 119% ―

Recycling ratio ― 90% or more 2010 94% 77%

Promotion of green procurementIncreasing the green

― ― ―Office equipment

―�procurement ratio 48%

Social performance

Promoting the disclosure of information through the environmental reports and internet websites

Enhancement of environmental Participating actively in exhibitions, lectures, community activities,

communication and other environmental activities organized by outside associations

Promoting R&D and projects that contribute to the environmental protection

Upgrading of level of occupational safety and Enhancing risk assessment on each irregular work per OSH-MS

health management system (OSH-MS) Achieving zero injuries and zero incidents at workplace

Two companies obtained the certification. The whole group completed the obtainment.

Promotion of thedevelopment ofgreen products Stopping the use of lead

solder for connectingelectrical equipment

30% or more(Hitachi Chemical

70% or more)

The Hitachi Group engaged in GREEN 21 activities from fiscal 1998 to 2001. It aims to promote self-assesment in all environmental activities according to a given set of assessment criteria, make continuous improvements and enhance these activities. As a result of its efforts designed to achieve a target of 21% or more increase by fiscal 2001 from fiscal 1998, Hitachi Chemical achieved 31% increase and the group companies 38% increase, thus achieving the earlier set target.

In fiscal 2002, the group added new assessment points. Based on the levels of fiscal 2002, the group set targets for fiscal 2005 to 640 points and launched its activities as GREEN 21 Version 2.

The results of fiscal 2002 were, as measured with the new indicators, 373 points for Hitachi Chemical and 358 points for the group companies. These achievements were the result of the zero-emission drive, which increased the points of resource circulation. In the future, the group will promote those items whose point levels were low and work to improve its environmental activities in general.

Eco-factories(preventing global

warming)

Eco-management(environmentalmanagement)

Eco-factories(resource circulation)

Joint creationwithstakeholders

Sustainablebusiness models Eco-management

(risk management)

Eco-mind

Eco-products

No. Category Principal performance indicators

1 Eco-management: Environmental management Environmental management, action plans, environmental accounting

2 Eco-management: Risk management Observing laws, setting voluntary standards

3 Eco-mind Training and inspiring employees

4 Eco-products Assessment of products and services, green procurements, and distribution

5 Eco-factories: Preventing global warming Energy saving and reduction in carbon dioxide

6 Eco-factories: Resource circulation Waste reduction and control of chemical substances

7 Joint creation with stakeholders Disclosure, communications, community activities

8 Sustainable business models Programs, plans, product recycling, environmental restoration

•GREEN 21 Version 21.Evaluation criteria (8 categories, 53 performance indicators)��

The group has set action targets for assessment in absolute scores. The target value for fiscal 2005 (the final year) is 640 points.

2.Targets　�

20

80

0

GREEN 21 Version 2

373358

800

600

400

200

0

Score

2002 2003 2004 2005

373 358

426

533

640Target

60

40

Activities on GREEN 21 Version 2

En

viron

men

tal Man

agem

ent

Group companies358

Hitachi Chemical373

(points)

(FY)

Hitachi ChemicalGroup companies

Business area costs 2,370 2,100 2,300 2,470 Maintenance cost of equipment for reduction of environmental impacts, and depreciation cost

Upstream/downstream costs 30 10 30 30 Recovery of packaging and recycling expenses�

Management activity costs 530 550 500 560 Greening, cleaning, and environmental management expenses�

Research and development costs 1,100 1,010 1,670 1,130 R&D for the reduction of environmental impacts, and product design expenses

Social activity costs 60 20 20 10 Social contribution programs and publicity expenses

Environmental damage costs 40 50 10 20 Recovery fees, contributions expenses, and charge for soil contamination, etc.

Total costs 4,130 3,740 4,530 4,220 　　

Environmental investments 960 570 520 820 Investments in facilities for reduction of environmental impacts

Note: Energy consumption is in terms of crude oil equivalent.

ItemHitachi Chemical Group companies

Major description Fiscal Fiscal Fiscal Fiscal 2002 2001 2002 2001

1998 1999 2000 2001 2002

1,000

800

600

400

200

0�

210

670

460

570

820

520

960

39％�43％�

43％�

14％�

57％�

3％�1％�

Environmental Accounting

Resource circulation

Preservation of the global environment

Social contribution programs, etc.

Pollution controls

(million yen)

•Environmental investments

•Costs

•Effects

•Percentage of environmental investments

(FY)

Hitachi Chemical

Group companies

Hitachi Chemical

Group companies

(Unit: million yen)

Net income effect 180 140 420 390 Profit on sales of recycled wastes, etc.

Expense reduction effect 1,720 870 300 480 Reduction of power expenses and material costs, etc.�

Total 1,900 1,010 720 870 �

Reduction in energy 1,800 270 90 410 Decrease of energy consumption by increasing energy efficiency

　used (millionR)Reduction of final amount

66,000 33,800 40,000 96,500Decrease of ultimate landfills due to waste separation,

　of landfill disposal (tons) 　recycling, and other means

ItemHitachi Chemical Group companies

Major description Fiscal Fiscal Fiscal Fiscal 2002 2001 2002 2001

(Unit: million yen)

Expen

sesEconom

icaleffect

Vo

lum

eeffect

Since fiscal 1999, the Hitachi Chemical Group has been using the environmental accounting system according to the guideline provided by the Ministry of the Environment to increase the efficiency of its environmental investments and activities and to ensure continuous improvement.

The environmental cost of Hitachi Chemical in fiscal 2002 totaled 4.13 billion yen, 10% up from the previous year. This was due mainly to increases in development expenses for green products, the operation and management expenses for environmental impact equipment, and other expenses. The environmental investment reached 960 million yen, 1.7 times higher than the previous year. This was due mainly to the collection of PRTR substances and the introduction of recycling equipment. The effects rose due to the energy saving through the introduction of cogeneration equipment and the saving of materials and the reduction of the final landfill of wastes through zero-emmission activities.

The environmental cost of the group companies rose 7% from the previous year. This was due to the rise in development expenses for green products similarly to Hitachi Chemical. There were also quantity effects due to the reduction of the final landfill of wastes as part of the zero-emission drive.

Note: In addition to the above, environmental and safety training is provided at each work site from time to time.

Session Description Date Attendance

Environmental safety presentation session Presentation of works reports on environmental safety July 160

Zero-emissions presentation sessionPresentation of results achieved by zero-emission activities and

November 100exchange of technical information concerning waste reduction

Auditor training for occupational health Auditor training in compliance with the occupational health April 42

　and safety management system 　and safety management system

Training for environmental self-auditors Training for environmental auditors in compliance with ISO 14001 October 35

Basic seminar on chemical substancesSeminars both at domestie and overseas legal restrictions

September 17　concerning chemical materials

MSDS seminar Seminars for MSDS preparers March 42

Production engineers seminar Environmental safety management seminar for production engineers August 16

Safety and health seminars for supervisors March 26

Safety and health seminar Safety and health seminars for assistant manager in charge of manufacturing July 27

Safety and health seminars for section managers in charge of manufacturing October 18

Officer environment seminar Environmental seminars for officers and executives March 70

E-learning Internet training for all employees　　　　　　　　　　　　 March~ －�

Name of publicly certified qualification Number Name of publicly certified qualification Number of holders of holders�

Certified environmental measurer (Density) 3 Refrigeration safety administrator (1-3 classes) 35

Pollution control administrator (Chief) 7 Hazardous materials officer (2 categories) 2,881

Pollution control administrator (Atmosphere) (1-4 classes) 88 Industrial hygiene administrator (1-2 classes) 209

Pollution control administrator (Water) (1-4 classes) 126 Waste disposal facilities technical administrator 24

Pollution control administrator (Noise) 44 Radiation handling chief engineer (1-2 classes) 21

Pollution control administrator (Vibration) 29 X-ray operation chief engineer 47

Electrical chief engineer (1-3 classes) 64 Organic solvent operation chief engineer 2,052

Qualified person for energy management of first-class designated factory (Thermal) 29 Oxygen-depleted hazardous operation chief engineer 735

Qualified person for energy management of first-class designated factory (Electric) 31 Specific chemical substances operation chief engineer 1,614

Qualified person for energy management of second-class designated factory (Thermal) 8 Poisonous and harmful substances handling engineer 132

Qualified person for energy management of second-class designated factory (Electric) 13 Boiler engineer (Special - 2nd classes) 237

High pressure gas production safety administrator (3 categories) 178

•Employee trainingHitachi Chemical implemented the following education/training programs in the areas of environment and occupational safety and health in fiscal 2002.

•Number of holders of major certified qualificationsThe Hitachi Chemical Group is making dynamic efforts to help its employees acquire a range of publicly certified qualifications related to the environment and occupational safety and health.

Environmental Training

Zero-emissions presentation sessionEnvironmental seminar for executives

En

viron

men

tal Man

agem

ent

1

0

2

3

4

5

Electronics- and chemical-related products Housing equipment and environmental facilities

Typical assessment

2001 2002 2003

(%)

100

80

60

40

20

0

20 22

40 3936

60

Environmental PerformanceEnvironmental Performance

Development for Green Products

•Program for assessing and registering green productsHitachi Chemical engages actively in technical development for reducing the environmental impacts of its products, in an attempt to expand its lineup of environmentally friendly products. We have registered "green products" as per the "Program for Assessing and Registering Green Products" and discloses them on its website and elsewhere. It has set its target at no less than 60% in its "ratio of green products" for fiscal 2003. The results for fiscal 2002 were 39% for Hitachi Chemical and 36% for the group companies.

•Assessment process for green productsAssessment divides the products of the Hitachi Chemical Group into (1) Electronics- related products and Chemical-related products and (2) Housing equipment and environmental facilities. It then assesses the environmental impacts of the entire lifecycle of all products in terms of the assessment points shown in the table below.

Criteria for evaluation Evaluation points Product functionality Higher functionality per resource Resources conservation Resources conservation performance

and waste reduction� Recyclability Recyclability and a recycling society system� Chemical safety Safety and human health risks of

chemicals, hazardous substances� Green chemistry Reducing the environmental impacts

of the production process�Environmental safety Environmental impacts and conservation

of the global environment� Energy saving performance Energy saving performance during

manufacture and use� Information disclosure Provision of information about

discarding and disposal��

Criteria for evaluation Evaluation points Reducing weight Resources conservation, weight reduction Longer service life Durability, reliability, ease of repair

Recycling and reconditioning Use of reconditioned materials� Disassemblability Disassemblability and separability Ease of processing Ease of destruction and decomposition Environmental safety Environmental impacts and conservation

of the global environment� Energy saving performance Energy saving performance during

manufacture and use� Information disclosure Provision of information about

discarding and disposal��

Product functionality

Resources conservation

Recyclability

Environment-friendly (halogen-free) copper clad laminates

Information disclosure

Chemical safety

Green chemistry

Energy saving performance

Environmentalsafety

•Ratio of green products　�

•Typical products in due consideration of chemical safety　�

Target

Hitachi Chemical

Group companies

Conventionalproducts

Greenproducts

(FY)

DefinitionRatio of green products (%) =

Sales of green products

Net sales×100

Indoor air

Approx.1.2m

Examples of Green Products

En

viron

men

tal Perfo

rman

ce

Information disclosure

Energy saving performance

RecyclabilityRecycling and reconditioning

Chemical safetyDisassemblability

Green chemistry Ease of processing

Environmental safety

Resources conservationLonger service life

Product functionality Reducing weight

Non-PVC food wrapping films (Hitachi Chemical Filtec Inc.) Environmental issues addressed:1.Public disclosure of constitution, etc. 2.Non-PVC materials 3.Reduction of packing materials

Transparent EMI shielding filmsEnvironmental issues addressed: 1.Electromagnetic shield

Enlarged view

ASA resins(for use in automotive bumpers, radiator grills, and other components) Environmental issues addressed:1.Long service life 2.Recyclable

Renovation kit for prefabricated bathroom (Hitachi Housetec Co., Ltd.) Environmental issues addressed:1.Recycling 2.Waste reduction

Photosensitive dry filmsReusable plastic corrugated cardboard Environmental issues addressed: 1.Recycling 2.Resource conservation

before

after

Alkyd resins (Hitachi Kasei Polymer Co., Ltd.) Environmental issues addressed: 1.Reduction of solvent consumption

Copper clad laminates Environmental issues addressed: 1.Lead-free 2.Halogen-free

Lead-free carbonbrushes Environmental issues addressed:1.Lead-free

Tantalum electrolytic capacitors and plasticfilm capacitors(Hitachi AIC Inc.) Environmental issues addressed:1.Lead-free 2.Resource conservation

Disk brake padsEnvironmental issues addressed:1. Asbestos-free

Passive sampling

Foot shock-absorbing pad for automobiles Environmental issues addressed: 1.Energy saving

Motor Rotor for Hybrid Vehicle (Hitachi Powdered Metals Co., Ltd.) Environmental issues addressed:1.Energy saving

Passive collection pipe Environmental issues addressed:1.Energy saving

Structure

Non-PVC materials

Viscous layer Heat-resistant layer Core layer Heat-resistant layer Viscous layer

CO2

SOxNOx

…………180 kilo tons …………………40 tons………………400 tons

WastesRecycledLandfill

………39 kilo tons ……36 kilo tons

…………200 tons

Public watersDrainage systemBOD

PRTROther

……………2,500 tons ………… 2,000 tons

INPUT OUTPUT

The impact flow system was adopted to monitor the status of the environmental impacts of the processes of consumed energy, resources, and production in the business operations of Hitachi Chemical.

Hitachi Chemical has been committed to its zero-emission drive designed to reduce resource losses and environmental impacts in production to as close to zero as possible.

This represents the environmental impacts of our production activities in fiscal 2002 in the form of material flow and gives an overview of the inputs for production (such as raw materials, resource use, and energy) and the environmental outputs (such as emissions to the atmosphere and waters and wastes). At the stages of production, we use about 306,000 tons of raw materials and charges electric power, other energy sources and water. As a result, the environmental impacts include the emissions of carbon dioxide (CO2), sulfur oxides (SOx), nitrogen oxides (NOx), and other atmospheric contaminants, chemical substance discharge, drainage, and wastes. All sites have set their targets and are working to reduce their environmental impacts.

Environmental impacts are produced not only at the production stage but also at the distribution and product-use stages. Hitachi Chemical works to reduce these environmental impacts as well by developing green products.

Overview of Environmental Impacts

Rawmaterials

Energy

Servicewater

Packingmaterials

Trans-portation

Electricity Fuels Gases (in crude oil equivalent)

Chemical compounds and related productsMetalsOther

……280 kilo tons…………………10 kilo tons…………………16 kilo tons

……………… 6 tons…………… 591 tons

………………442 tons………………… 90 tons

………………45,000 kR……………………40,000 kR…………………… 3,000 kR

…………………350 km3

…………2,600 km3

……2,960 km3

………5,460 km3

…………… 330 km3

……………… 33 tons

City water Industrial water Underground water

Foamed styrol Other plastics Corrugated cardboard Paper, etc.

Diesel oil(in crude oil equivalent) …4,000 kR

Atmosphere

Products

Products223 kilo tons

WastesDrainage

Chemicalsubstances

HitachiChemical

The data on this page comes from Hitachi Chemical.

The Hitachi Chemical Group works to reduce the emissions of carbon dioxide (CO2), sulfur hexafluoride (SF6), hydrofluorocarbons (HFCs), and other greenhouse gases to prevent global warming.��•Reduction of CO2 emissions arising from energy consumptionThe Hitachi Chemical Group has been working toward the target of reducing the unit requirement index of carbon dioxide from energy use to no more than 75% of fiscal 1990 level in fiscal 2010. For fiscal 2002 and beyond, the group has been implementing this drive assertively with yet another target: to reduce the carbon dioxide emissions to no more than 93% of the fiscal 1990 level by fiscal 2010.

In fiscal 2002, the carbon dioxide emissions of Hitachi Chemical was 83% of the fiscal 1990 level, thus achieving the final target. However, it increased from the previous year's level in response to a rise in production. The group will continue to increase energy-saving products, introduce cogeneration and waste heat collection equipment, and innovate processes of manufacturing, thus saving energy and reducing carbon dioxide emissions.

•Reduction in the emission of other greenhouse gasesThe Hitachi Chemical Group discharged 4 tons of HFCs in fiscal 2002. Having worked to switch to non-HFC processes, we successfully established a new manufacturing process in March 2003 and stopped all use of HFCs in April 2003. Hitachi Chemical also used 2.1 tons of SF6 in fiscal 2002 and discharged 0.9 tons (43%). The Group introduced collection equipment in fiscal 2003 and is continuously working to reduce its emissions to no more than 3% of the consumption by fiscal 2005.

172

217

182 190

316

159

254

180

285

202

100

9188 87

93 93

75

400

300

200

100

0

100

75

50

25

0

2010

1990 1998 1999 2000 2001 2002 2010・・・・・・・� ・・・・・・・�

Prevention of Global Warming

2,000kW co-generation facility (Yamazaki Works)

5,000kW co-generation facility (Shimodate Works)Definition

Index of CO2 emissions per unit production amount =

CO2 emissions arisingfrom energy use

Net Sales

•CO2 emissions and index of CO2 emissions per unit production amount

En

viron

men

tal Perfo

rman

ce

(%)�

�

(kilo tons/year)

Hitachi Chemical

Group companies

Target

Index of CO2 emissions per unit production amount (Hitachi Chemical)

(FY)

(100%)

(83%)(93%)

(Target)

Index of CO2 em

issions per unit production amount

CO

2 emissio

n

The main flue gas producing facilities of Hitachi Chemical are diesel engines (for cogeneration), boilers, and incinerators. Regarding the emissions of sulfur oxides (SOx), we worked to reduce the sulfur content of fuels and increase the efficiency of its equipment and reduced the emissions to 40% of the fiscal 1990 level in fiscal 2002. Most of the emissions of nitrogen oxides (NOx) are discharged from diesel engines for cogeneration. We have been working to reduce the level for the past few years. In fiscal 2002, its power generation increased and reached 116% of the previous year's level. To counteract soot emissions, we installed electric dust collectors and other high-performance dust collectors, switched their use of fuels to light oil, and took similar measures.

1990 1998 1999 2000 2001 2002

150

100

50

0

107

57

38 40 39 43

384

506 502467

374

437

1922

11

23

810

600

400

200

0

40

30

20

10

0

・・・・・・・�

1990 1998 1999 2000 2001 2002・・・・・・・�

1990 1998 1999 2000 2001 2002・・・・・・・�

Reduction of Air Pollution Impacts

(tons/year)

(tons/year)

(tons/year)

(FY)

(FY)

(FY)

•SOx emissions

•NOx emissions

•Soot emissions

Electric dust collector installed in a waste incinerator(Yamazaki Works)

The data on this page comes from Hitachi Chemical.

The service water consumption of Hitachi Chemical declined yearly as a result of the circulated use of cooling water, the improvement in productivity, and other measures. The fiscal 2002 level reached 59% of that in fiscal 1990. To prevent the ground to sink due to the use of underground water, in particular, we set a goal of reducing its use of underground water to no more than 50% of the fiscal 1990 level in fiscal 2005 and worked to switch to industrial water. We thus successfully reduced the use of underground water in fiscal 2002 to 51%.

To prevent water contamination, we have been taking measures related to drainage since before fiscal 1990, according to pollution prevention treaties and other agreements with self-governing bodies. The drainage from the sites of Hitachi Chemical falls into the categories of drainage conforms to the biochemical oxygen demand (BOD) regulation and the chemical oxygen demand (COD) regulation. The BOD-regulated sites discharge their drainage into rivers, and BOD emission in fiscal 2002 was 83% of the fiscal 1990 level. The COD emission has maintained the same level in recent years.

13 14

25 25 25

15

25

13

25

15

25

16

83

8,127

6,235 6,413 6,2947,074

5,5926,548

7,432

5,765

62

75

6259

53 51

40

63

29

64

26

62

27

57

28

57

33

40

20

0

100

80

60

40

20

0

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0

80

60

40

20

0

1990 1998 1999 2000 2001 2002

1990 1998 1999 2000 2001 2002

1990 1998 1999 2000 2001 2002

・・・・・・・�

・・・・・・・�

・・・・・・・�

En

viron

men

tal Perfo

rman

ce

Reduction of Service Water Consumption and Water Pollution Impacts

(tons/year)

(tons/year)

City water

Industrial water

Underground water

BOD emissions

Self-regulated values

BOD emissions

Self-regulated values

(FY)

(FY)

(FY)

•Service water consumption

•BOD emissions (Hitachi Chemical)

•COD emissions (Hitachi Chemical)

(%)(kilo tons/year)�

�

Un

derg

rou

nd

water co

nsu

mp

tion

ratio

Service water co

nsu

mp

tion

Emissio

ns an

d reg

ulated

values

Emissio

ns an

dreg

ulated

values

Underground water consumption ratio (Hitachi Chemical)

Definition Ratio of underground water consumption

Underground water consumption

Service water consumption (%) = ×100

HitachiChemical

Groupcompanies

•Reduction of the chemical substances emissionsHitachi Chemical has been surveying the emissions of chemical substances and other factors on a voluntary basis since 1995, as a member of the Japan Chemical Industry Association. When the target chemical substances were published as per the Pollutant Release and Transfer Register (PRTR) Act in 2000, we added PRTR compliant substances to the substances that it had controlled on a voluntary basis, thus extending the target scope. We have thus been working to reduce the emissions.

The Hitachi Chemical Group has been working to reduce the atmospheric emission of chemical substances to no more than 70% of the fiscal 2000 level by fiscal 2005. In order to implement its reduction drive effectively, Hitachi Chemical will work toward the target of reducing the level to no more than 30% by fiscal 2005. In fiscal 2002, Hitachi Chemical reduced the atmospheric emission of the target chemicals to 83% of the fiscal 2000 level.

2000 2001 2002 2005

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

70

60

50

40

30

20

10

0

Substances covered by the Pollutant Release and Transfer Register Act 1 Toluene 6,229 1,592 5,549 1,420 5,958 1,718 4862 Ethylene glycol monomethyl ether 1,805 965 1,100 593 1,199 625 263 N,N-dimethylformamide 481 143 412 119 382 100 44 Formaldehyde 4,148 24 2,440 15 3,266 12 245 Xylene 2,971 23 2,319 14 2,263 12 566 Styrene 49,521 19 42,441 13 42,764 12 37 Methyl methacrylate 3,145 11 2,936 12 3,339 11 138 Ethylbenzene 1,836 4 1,549 5 1,484 5 569 Isoprene 1,287 6 1,162 4 1,336 5 0

10 Acrylonitrile 813 8 563 4 515 3 011 Maleic anhydride 8,345 2 6,287 1 6,916 2 212 Phenol 7,401 6 5,658 3 5,080 1 4613 Phthalic anhydride 4,695 1 2,790 0 2,193 0 014 Tetrahydromethylphthalic anhydride 4,181 0 3,890 0 4,335 0 26

Other PRTR substances 9,627 34 6,188 7 6,633 8 303 Sub total 106,485 2,838 85,284 2,210 87,663 2,514 1,045

Voluntarily controlled substances15 Methylethylketone 3,431 2,124 3,638 1,903 3,710 1,824 24516 Methyl alcohol 2,389 78 1,205 73 1,026 54 3117 Acetone 3,945 266 4,473 204 4,940 52 2018 Ethyl acetate 364 24 373 22 443 33 719 Methyl isobutylketone 239 61 141 19 144 20 020 Cyclohexane 557 19 488 17 478 16 021 N-methylpyrrolidone 1,186 23 1,324 2 1,270 1 2

Other voluntarily controlled substances 8,779 16 7,768 1 561 1 6Sub total 20,890 2,611 19,410 2,241 12,572 2,001 311Total 127,375 5,449 104,694 4,451 100,235 4,515 1,356Reduction ratio＊ (%) Criteria 18.3 17.1

Methylethylketone40%

Other 61 substances2%

PRTR substances56%

Toluene38%

Ethylene glycol monomethyl ether14%

N,N-dimethylformamide2%

Other 15 substances4%

Voluntarilycontrolled substances

44%5,449

4,451

18 17��

30

70

4,515

2,8382,210

2,514

862

608

Environmental Effects of Chemical Substances

Solvent collection/refinery plant(Shimodate Works)

(tons/year) Voluntarily controlled substances

Group companies

PRTR substancesEmission reduction ratio

•Emissions of chemical substances into the atmosphere •Breakdown of chemical substance emissions (fiscal 2002) (Hitachi Chemical)

Emissio

ns in

to th

e atmo

sph

ere

Emissio

n red

uctio

n ratio

(%)�

�

(FY)

(Target)�

�

(Target)�

�

HitachiChemical

Groupcompanies

•Amounts of major chemical substances handled and emitted into the atmosphere (Hitachi Chemical)

＊ The reduction ratios are displayed in percentages of the amounts reduced, based on the total atmospheric emission of 2000.

No. Chemical substancesFiscal 2000 Fiscal 2001 Fiscal 2002

Amount Emissions Amount Emissions Amount Emissions Total transferhandled handled handled amount

(Unit: tons/year)

The Hitachi Chemical Group has been committed to its zero-emission drive as a major theme of its environmental activities, working to reduce the final landfill ratio of wastes to no more than 1% and to reduce the final landfill to less than 5 tons per year from fiscal 2000 to fiscal 2005. In fiscal 2002, the group implemented its drive effectively, by means such as holding zero- emission presentation sessions designed to present the results of activities and to exchange technical information about waste reduction. As a result, the group successfully reduced the final landfill ratio to 0.5% in fiscal 2002, achieving a level of no more than 1% at all sites.

To promote recycling, the group has been working to increase the recycling ratio to no less than 90% by fiscal 2010. The recycling ratio reached 94% in fiscal 2002. The waste generation of fiscal 2002 increased to 119% of the fiscal 1991 level. The group will therefore promote recycling and improve the production process, aiming to reduce it to the same level or lower by 2010.

Hitachi Chemical Filtec Inc. achieved its targets for both landfill ratio and landfill, thus achieving zero-emissions.

13.5

16

27

80

3540

4687 88

32 3235

94

37

85

44

37.3

2.52.1

1.20.9

0.20.5

7.3

6.35.9

7.1

5.0

2.6 2.4

14

12

8

6

4

2

0

50

40

30

20

10

0

37

35

8

6

4

2

0

100

80

60

40

20

0

1991 1998 1999 2000 2001 2002 2010・・・・・・・�

1991 1998 1999 2000 2001 2002 2005・・・・・・・�

(Target)(1%)�(20 tons)�

�

En

viron

men

tal Perfo

rman

ce

Waste Reduction - Zero-emission Activities

Wastewater processing plant (Goi Works)

Hitachi Chemical

Group companies

Ratio of wastes disposed of as landfills (Hitachi Chemical)

Hitachi Chemical

Group companies

Recycling ratio (Hitachi Chemical)

(FY)

(FY)

•Wastes to landfill

•Recycled wastes and recycling ratio

Recycling

ratio

Recycled w

astesW

astes to lan

dfill

Ratio o

f wastes to

land

fill

(%)�

�

(%)�

�

(90)

(kilo tons/year)�

�

(kilo tons/year)

(Target)

Definition Wastes to landfillAmount of wastes generation

Ratio of wastes to landfill (%) = ×100

Definition Recycled wastesAmount of wastes generation

Recycling ratio (%) = ×100

•Control of chemical substancesHitachi Chemical has been taking active measures to control chemical substances by means such as setting up a Chemical Substances Safety Center in August 1998. The center addresses issues regarding endocrine disrupters, collects and surveys information about risk assessment and risk communications as per the PRTR program(Note 1), and is a member of the HPV Initiative (Note 2) launched by the International Council of Chemical Association (ICCA). At the HPV Initiative, we prepared a hazardousness assessment report on methyl tetrahydrophthalic anhydride as a leading company. This report was qualified at the OECD SIDS Initial Assessment Meeting (SIAM 15) held on October 22 through 25, 2002 and was agreed (Note 3).

For controlling chemical substances, we set up a Hitachi Chemical PRTR Control System in 2000. In 2002, we built a Hitachi Chemical MSDS Control System for controlling Material Safety Data Sheets (MSDS). In addition to these systems, we plan to build a Hitachi Chemical Database of Chemical Substances. We also plan to build a Hitachi Chemical Comprehensive Control System of Chemical Substances designed to integrate these three systems and to control chemical substances comprehensively.

PRTR (Pollutant Release and Transfer Register) is a program for surveying and registering the environmental emission of environment-affecting substances through all media (atmosphere, waters, and soil) and their amounts as moved in the form of waste.A program for assessing the hazards of about 1,000 High Production Volume (HPV) chemicals and for publishing the findings.The overall progress of this drive can be found on OECD's website (http://cs3-hq.oecd.org/scripts/hpv/). If you search for CAS # 11070443, you can access a part of the report on methyl tetrahydrophthalic anhydride.

•Risk control of chemical substances �Hitachi Chemical has been issuing MSDS since fiscal 1993, thus publishing the recent updates constantly, for operators handling it's products. Since fiscal 1995, we have been issuing Yellow Cards for drivers and transporters in preparation for emergencies.

•Control of hazardous chemical substances�• CFCs ad chlorine-based organic solvents At one time we used designated CFCs as foaming and cleansing agents. We replaced these CFCs with alternatives and stopped the use of all CFCs in 1994. We also used trichloroethylene and other chlorine-based organic solvents as cleansers, then replaced them with alternatives, and stopped the use of all

such substances in 1996. Carbon tetrachloride was used to remove impurities from the products but this process was stopped completely in 1995. • Dioxins The facilities in Hitachi Chemical subject to the Act of Special Measures for Dioxins are the incinerators. We stopped the operation of two incinerators in fiscal 2002 and now own seven of them. The concentration of dioxins in flue gas in the seven incinerators is below the standard for emission control (10ng-TEQ/m3). • Polychloride biphenyls (PCBs) PCB-containing transformers and capacitors, along with other components, are continuously controlled in an appropriate manner by locking, controlling the storage cabinet, and other means.

•Preventing the contamination of soil and underground water�The Act of Measures against Soil Contamination was put into effect in February 2003. The Hitachi Chemical Group has surveyed soil and underground water according to relevant laws and, for sites found to be contaminated in any part of their site, has taken prompt decontamination measures under the supervision of the self-governing body concerned. We have confirmed that the majority of sites that used hazardous substances have completed their purification processes or confirmed that there are no problems. However, we will continue to monitor soil and underground water.

Hitachi ChemicalMSDS Control System

(complete)

Hitachi ChemicalPRTR Control System

(complete)

Hitachi ChemicalDatabase of Chemical

Substances(planned)

Overview diagram of the Hitachi Chemical MSDS Control System

Hitachi Chemical Group network

Internal clients, such asthe head office, works,

and offices

MSDScontrol system

Group companies

Control of Chemical Substances

Conceptual diagram of theHitachi Chemical Comprehensive

Control System of Chemical Substances

Note 1:

Note 2:

Note 3:

Material manufacturer

Materials

MaterialMSDS

MaterialMSDS

Search programProductMSDS

ProductMSDS

Products

Customers

•Green procurementThe Hitachi Chemical Group is committed to green procurement, a system where environmentally friendly products, components, and raw materials are purchased with priority to promote the environmental conservation activities effectively.

In 2001, Hitachi Chemical launched a Material Procurement Plaza on its website to indicate its concept of material procurement and to solicit cooperation with its survey regarding the acquisition of certification under ISO 14001 by material suppliers, thus obtaining 850 responses by March 2003. The survey revealed that more than one half (52%) of the suppliers had obtained, or were planning to obtain, certification under ISO 14001. We will continue to cooperate with our suppliers and promote the replacement of products and materials with green ones.

Concerning the green procurement of office equipment, we have been conducting a survey since fiscal 2000. Hitachi Chemical has increased about 1.5-fold both in the amount of procurement and the ratio of procurement during the past three years. In fiscal 2002, the green procurement ratio reached almost one half (48%).

•Greening of productsTo minimize the use of chemical substances that affect human bodies during use or that contaminate the environment during the process of scrapping, Hitachi Chemical is working to completely stop or reduce hazardous chemical substances (such as hexavalent chromium and lead solder) in its products.

To meet customers' demand for green procurement, we are working to completely stop or reduce hazardous chemical substances in its products on a companywide basis. In fiscal 2002, we responded to requests for the submission of a written warranty, environmental and quality assurance audits, and other demands and obtained green authorization from leading customers. We will continue to organize the response system.

In line with the prospect that the chemical substance regulation (RoHS directive) on six substances including hexavalent chromium and polybromide biphenyl in electrical and electronics equipment in Europe will be put into effect in 2006, we are surveying European-bound products and preparing for similar situations such as replacing hazardous chemical substances contained in particular products to allow electrical and electronics manufacturers to use them without concern.

100

80

60

40

20

0

50

40

30

20

10

0

2000 2001 2002

48%�(411)

14%�(117)

38%�(322)

4347

6732

40

48

Green Procurement

En

viron

men

tal Perfo

rman

ce

Acquisition planned

Certification acquired

Unacquired

Responses850

Amount of green procurement

Ratio of green procurement

•Acquisition status of certification under ISO 14001 by material suppliers

•Green procurement of office equipment (Hitachi Chemical)

(million yen)

Ratio o

f green

pro

curem

ent

Am

ou

nt o

f green

pro

curem

ent

(%)�

�

(FY)

•Issuance of environmental reportsThe Hitachi Chemical Group has actively been working to disclose its environmental information. Since fiscal 1999, Hitachi Chemical has been issuing the Responsible Care Report (called the Environmental Report today), which is a report on the group's voluntary activities regarding the environment and safety. These reports are disclosed on our website as well. Among its group companies, Shin-Kobe Electric Machinery Co., Ltd. and Hitachi Powdered Metals Co., Ltd. have been issuing similar reports since fiscal 2000.

•Views on the environmental reports The questionnaire form attached to the Environmental Report issued in fiscal 2002 by Hitachi Chemical obtained 32 responses.

We converted the major contents of these 32 items into numerical values and represented them graphically. In view of the precious comments obtained, we used additional figures in the present environmental report, thus working to make it more comprehensible.

We intend to reflect the reader comments on our efforts in environmental safety activities and the disclosure of information by the Environmental Reports and other documents, thus making improvements.

•Disclosure of environmental informationThe Hitachi Chemical Group has been joining environmental exhibitions actively in an attempt to disclose information about green products.

• Displayed at Eco Products 2002As a member of the Hitachi Group, the Hitachi Chemical Group joined Eco Products 2002, an exhibition held at the Tokyo Big Sight. It displayed its anisotropic conductive films for lead-free connection.

• Displayed at the First International Conference on Green Sustainable Chemistry The Hitachi Chemical Group joined the GSC Tokyo International Conference 2003 held at the International Convention Center of Waseda University on March 13 and 14, 2003. There, it displayed its recycling technology for waste printed wiring boards based on epoxy resins.

•Compliance with the regulationsThe Hitachi Chemical Group was neither penalized nor fined during fiscal 2002. However, there was one complaint about powdery dusts and three complaints about smells lodged by some residents in neighboring communities where our works are located. The immediate action was taken to ensure thorough explanation be given to the people who lodged the complaints. The relevant facilities and the operating conditions were reviewed for improvements.

18% 13% 10% 7% 7% 6% 5% 27%

76%24%

7%

�

Social PerformanceSocial Performance

Environmental Information Disclosure

A view of the Hitachi Group booth at Eco Products 2002

Our company's corner at the International Conference onGreen Sustainable Chemistry

Comments and questionnaire results ofthe Environmental Reports

(32 responses in total; period, from August 1, 2002 through March 31, 2003)

•Impressions on the reports

•Impressive remarks

Easy to understand

Promotion of green procurement

Guideline on the environmental protection action

Green 21Environmental communications

Waste reductionDevelopment of green products

Reduction of the atmospheric contamination impact

Other

Overview of the targets and results

Ordinary

•Communications with societyThe Hitachi Chemical Group works to contribute to local communities based on the company's philosophy of "Contribute to society through the continuous development of our unique and superior technologies and products."

The Hitachi Group has also implemented its philosophy of community contribution actions, thus working to make a better society a reality.

The Hitachi Chemical Group so far has been: (1) organizing visiting tours for elementary school pupils to the neighborhoods of its works, ping pong lessons, site festivals, and other events, thus improving communications with the local communities, (2) sponsoring soccer (football) tournaments and marathon events and otherwise sports events, (3) helping fishery cooperatives with their release of salmon fries in nature, and (4) organizing opportunities of communication with neighboring companies and local citizens in an attempt to contribute to the local communities in environmental conservation, greening, cleaning, and other activities.

Works Body bestowing the award Designation

Ibaraki Prefecture Federation of Associations for Recognition by the Chairperson of Excellent

the Safety Dangerous Substances Handlers of Dangerous Substances Yamazaki Works

Ibaraki Prefecture Association of Transport Safety Recognition of Safe Drivers

Ibaraki Prefecture Labor Bureau Progress Award by the Labor Bureau Chief

Goi Works Chiba Prefecture Industrial Promoter in Chiba Prefecture

Ministry of Health, Labor and Welfare Award for No-disaster Records (Class 2)�

Goshomiya Works Japan Institute of Invention Invention Award by the Prime Minister

The Society of Polymer Science, Japan Award by the Society of Polymer Science, Japan

Hitachi Housetec Co., Ltd. Ministry of Education, Culture, Sports, Science and Technology Invention Encouragement Award for the Kanto Region

Hitachi Kasei Polymer Co., Ltd. Chiba Prefecture Excellent Health Controlling Site

•Main Recognition by outside partiesThe Hitachi Chemical Group received the following rewards and recognitions in fiscal 2002:

The philosophy of community actionof the Hitachi Group

Social Contribution Activities

Social P

erform

anceThe Hitachi Group has set up a new philosophy and a new set

of principles common to the group members in order to allow the group members, foundations, and employees to make concerted efforts to contribute to the local communities.

Under its corporate statement "Inspire the Next," which means inspiring the next era, the Hitachi Group has as its philosophy to help realize a worthwhile human life and a better society while meeting society's requests and confidence in community activities as well. Under that philosophy, the Hitachi Group contributes actively to society.

The Hitachi Group makes the most of its resources including knowledge and information technology, in three areas of "education," "environment," and "welfare." The group will engage in various community activities in order to make a vivid society a reality centering on activities for training "people" in charge of making reforms in the next era.

The Hitachi Group responds to society's requests and confidence as a good corporate citizen, thus helping to realize a worthwhile human life and a better society.

•Philosophy

•Principles

Release of salmon fries in the Kinugawa River "Sakura Festival," the festival of the Goshomiya Works Presentation session for the Kashima region bythe Responsible Care Council (attended by 120 persons)

To achieve zero injuries and zero incidents, Hitachi Chemical has been implementing the Occupational Safety and Health Management System (OSH-MS) since April 2000, in accordance with the guidelines formulated by the Ministry of Health Labor and Welfare and this functions as a drive to identify work practices and equipment with potential hazard through risk assessment and then implement measures to reduce such risks.

The safety drive also involves the use of intrinsically safe equipment, Safety Training Observation Program (STOP) of E. I. Du Pont de Nemours and Company, Risk Prediction Training, and safety activities called "hiyari hatto." As a result, the year 2002 had a frequency and severity of mishaps that was not only lower than the chemical industry average but also well below all industries average. However, nine work-loss injuries were happened: a worker got caught in an operating machine.

We work to ensure safety training and intrinsic safety by going back to the basics of safety, such as performing risk assessments based on site observations of non-steady-state tasks (including those in trouble), thus the group strives to achieve zero injuries and zero incidents. These activities will also be spread to the group companies as well.

15

10

5

0

0.5

0.4

0.3

0.2

0.1

0

2.5

2.0

1.5

1.0

0.5

0

1994 1995 1996 1997 1998 1999 2000 2001 2002

0

0.41

0.110.22

0.12 0.12 0.11

0.51

0.24

0.44

0.83

1.77

0.0400

0.110.010.01 0.01 0.03

0.07

0.17

0.49

0

5

0

4

3

12

2

6

1

10

1

11

1

6

4

4

2

7

1994 1995 1996 1997 1998 1999 2000 2001 2002

1994 1995 1996 1997 1998 1999 2000 2001 2002

Occupational Safety Activities

•Frequency rate

•Severity rate

•Number of work- loss injuries

All industries

Chemical industry

Hitachi Chemical

Group companies

All industries

Chemical industry

Hitachi Chemical

Group companies

Group companies (19 of them including manufacturers and work contractors)�

Hitachi Chemical

The data on this page is for calendar year.

Note: Frequency rate: Number of casualties due to occupational mishaps per 1 million hours of workSeverity rate: Workdays lost due to work-loss injuries per 1,000 working hoursThe frequency and severity rate for the chemical industry and for all other industries are quoted from "Safety Indicators" issued by the Japan Industrial Safety and Health Association (JISHA)

Nu

mb

er of in

juries

Severity rateFreq

uen

cy rate

(Injuries)��

•Occupational safety auditThe Hitachi Chemical Group prepared its own "guideline for environmental safety audits," containing data about the environment, disaster prevention, safety and health, and chemical substances. According to that document, the Environmental Safety Audit Committee conducts a documentation examination, a site audit of the manufacturing and development departments, and a system audit of the OSH-MS at the manufacturing companies and manufacturing sites once a year.

For overseas group companies, the group audited the environmental safety of three of them in Singapore and Malaysia in July last year. They were Hitachi Chemical Asia-Pacific Pte. Ltd., Hitachi Chemical (Johor) Sdn. Bhd. and Hitachi Chemical (Malaysia) Sdn. Bhd.

•Presentation Session on safety and health A presentation session on safety and health is held once a year for the controllers and supervisors at the members of the Hitachi Chemical Group. It contains announcements of cases of improvement in safety and health, exchange of information, and site inspections in an attempt to improve the level of safety and health.

•Comprehensive Disaster Drills Looking back on the serious accident in a site on November 14, 1982, Hitachi Chemical set November 14 as the day of companywide disaster prevention (to allow all employees in the company to make an oath for disaster prevention and safety) and May 14 as the day of disaster prevention in manufacturing sites. The group conducts comprehensive disaster drills companywide, setting one week including those days as the disaster prevention week, thus being able to improve disaster prevention awareness and conduct operational checks on disaster prevention and safety equipment.

•Investments in safety and disaster prevention The Hitachi Chemical Group has been investing continuously in measures for safety and disaster prevention. In fiscal 2002, Hitachi Chemical invested 160 million yen in preventing explosion, fire and leakage and countering the ageing of equipment, together with other operations, while the group companies invested 380 million yen. The cumulative investments by Hitachi Chemical for safety and disaster prevention in and after fiscal 1990 reached 5.2 billion yen.

13%29%

27%

41%

3%

49%

1%

37%

•Breakdown of safety and disaster prevention investment (FY2002)

Environmental safety audit

Presentation session on safety and health

Comprehensive disaster drill

Social P

erform

ance

Earthquake-resistant measures, etc.

Earthquake-resistant measures, etc.

Occupational safety and health measures

Occupational safety and health measures

Repairs and renovation

Explosion, fire, and leakage prevention

Repairs and renovation

Explosion, fire, and leakage prevention

Hitachi Chemical Group companies

0.16billion yen

0.38billion yen

Exhaust gas deodorizing facilities The solvent content of exhaust gas in coating equipment is combusted and deodorized. Waste heat is collected as well.

Industrial wastewater treatment facilities Factory drainage is treated with activated sludge and discharged into the waters.

INPUT OUTPUT

5.0

4.5

1.5

1.0

0.5

0

80

60

40

20

0 1990 1999 2000 2001 2002

2000 2001 2002 2005

160

120

80

40

0

151

34

48

4.54

0.620.44

0.6

0.06

5159 55

61

32 28

・・・・�

・・・・・・・・�

1991 1999 2000 2001 2002・・・・・・・・�

Introduction of the WorksIntroduction of the Works

Yamazaki Works

• OverviewLocations Yamazaki Works 13-1, Higashi-cho 4chome, Hitachi-shi, Ibaraki, Japan Yamazaki Works (Sakuragawa) 3-1, Ayukawa-cho 3chome, Hitachi-shi, Ibaraki, Japan Yamazaki Works (Katsuta) 1380-1, Nishihara, Tarasaki, Hitachinaka-shi, Ibaraki, Japan Yamazaki Works (Kashima) 5-1, Sunayama, Hazaki-cho, Kashima-gun, Ibaraki, JapanSite area…………………740,049 m2

Employees………………949

• Typical environmental conservation facilities

• Overview of the environmental impact

• Wastes to landfill

• CO2 emissions

• Atmospheric discharges in PRTR- compliant substances and reduction plans

• Atmospheric discharge and transfer of PRTR- compliant substances (for 10 top-ranking substances in atmospheric discharge)

(FY 2002)

(Fiscal 2002, in kg/year)

Raw materials

Energy

Service water

Products

Wastes

Atmosphere

Drainage

Materials related to chemical compounds Metals Other

……………81 kilo tons/year

………………………6 kilo tons/year

………………………8 kilo tons/year Wastes generatedAmount recycledFinal landfill

……… 11 kilo tons/year

…………10 kilo tons/year

……………0.06 kilo tons/year

CO2

SOx NOx

……………………… 61 kilo tons/year

…………………… 0.01 kilo tons/year


Products ………………… 73 kilo tons/year

ElectricityOils Gases

………………… 19,674 kR/year

……………………… 10,488 kR/year

……………………… 2,745 kR/year

City waterIndustrial water Underground water

……………………294 km3/year

…………… 222 km3/year

……… 731 km3/yearDrainage producedBOD

………1,250 km3/year

……………………0.02 kilo tons/year

(kilo tons/year)�

�

(kilo tons/year)�

�

(tons/year)

(FY)

(FY)

(FY)

(Target)�

�

Chemical substance Atmospheric discharge Transfer Total

Toluene 9,177 34,873 44,050

Xylene 5,651 55,561 61,212

Styrene 5,264 2,646 7,910

Ethyl benzene 3,073 55,593 58,666

Methyl methacrylate 2,982 949 3,932

Ethyl acrylate 2,529 309 2,838

Vinyl acetate 1,943 0 1,943

N,N-dimethyl formamide 451 0 451

1,3,5-trimethyl benzene 403 0 403

Phenol 199 979 1,178

INPUT OUTPUT

0.6

0.5

0.2

0.1

0

40

30

20

10

0

25

20

15

10

5

0

18

0.56

0.09 0.090.04 0.02

2018 17

19

1990 1999 2000 2001 2002

1991 1999 2000 2001 2002

・・・・・・・・�

・・・・・・・・�

2000 2001 2002 2005

38

28 28

16

・・・・�

Goi Works

• OverviewLocations………14, Goiminamikaigan, Ichihara-shi, Chiba, JapanSite area ……… 118,255 m2

Employees …… 238

Exhaust gas deodorization facilities The odor substances in the exhaust gas are decomposed and deodorized at high temperature.

Industrial wastewater treatment facilities Factory drainage is subjected to flocculating setting, activated sludge process, and then another round of flocculating setting to remove chemical oxygen demand (COD) and phosphor.


• CO2 emissions


• Overview of the environmental impact (FY 2002)

Raw materials

Energy

Service water

Products

Wastes

Atmosphere

Drainage



…………………0.003 kilo tons/year

………………………6 kilo tons/year Wastes generatedAmount recycled Final landfill



…………… 0.02 kilo tons/year

CO2

SOx NOx


………………………0.3 kilo tons/year

………………………0.4 kilo tons/year

Products …………………50 kilo tons/year

ElectricityOils

…………………5,087 kR/year

…………………………3,968 kR/year


……………………18 km3/year

………… 1,800 km3/year

………… 2 km3/yearDrainage producedBOD

………1,700 km3/year

………………… 0.004 kilo tons/year

(kilo tons/year)�

�

(kilo tons/year)

(tons/year)


(FY)

(FY)

(FY)

(Target)�

�

• Atmospheric discharge and transfer of PRTR- compliant substances (Fiscal 2002, in kg/year)


Methyl methacrylate 8,258 11,719 19,977

Styrene 6,871 0 6,871

Isoprene 5,154 0 5,145

Acrylonitrile 3,112 0 3,112

Maleic anhydride 1,744 2,147 3,891

Toluene 1.628 28,106 29,734

Epichlorohydrin 1,178 16 1,194

Tetrahydromethyl-phthalic anhydride 412 26,099 26,511

α methyl styrene 75 0 75

INPUT OUTPUT

4.5

4.0

1.0

0.5

0

160

120

80

40

0

1,200

900

600

300

0

4.05

0.88

0.440.16 0.09

7870

9593

130

1991 1999 2000 2001 2002

1990 1999 2000 2001 2002

・・・・・・・・�

・・・・・・・・�

2000 2001 2002 2005

1,132

736 748

370

・・・・�

Shimodate Works

Plating-purpose wastewater treatment facilities Drain water from plating and other equipment is treated in an advanced manner, then discharged into the waters.

Solvent collection refineries The solvent is collected from exhaust gas from coating equipment, then refined for reuse.

• OverviewLocations Shimodate Works　　　1500, Ogawa, Shimodate-shi, Ibaraki, Japan Shimodate Works (Minamiyuki)　　　1772-1, Kanokubo, Yuki-shi, Ibaraki, Japan Shimodate Works (Shimodate Kita)　　　1150, Goshomiya, Shimodate-shi, Ibaraki, Japan Shimodate Works (Katsuta)　　　1380-1, Nishihara, Tarasaki, Hitachinaka-shi, Ibaraki, JapanSite area…………………433,862 m2 Employees………………858



Raw materials

Energy

Service water

Products

Wastes

Atmosphere

Drainage



…………………… 4 kilo tons/year

………………… 0.05 kilo tons/yearr Wastes generatedAmount recycled Final landfill



…………… 0.09 kilo tons/year

CO2

SOx NOx






…………………12,967 kR/year

………………………22,342 kR/year

…………………………11 kR/year


……………………11 km3/year

…………… 365 km3/year

…… 2,220 km3/yearDrainage producedBOD

………2,600 km3/year



(FY)

• CO2 emissions


(Target)�

�

• Atmospheric discharge and transfer of PRTR- compliant substances (for 10 top-ranking substances in atmospheric discharge) (Fiscal 2002, in kg/year)


Ethylene glycol mono methyl ether 625,143 25,567 650,710

N,N-dimethyl formamide 99,345 4,468 103,813

Formaldehyde 12,064 23,845 35,909

Toluene 10,607 1,508 12,115

Phenol 994 44,845 45,839

Antimony and its compounds 158 4,231 4,389

Cresol 12 616 628

Copper water-soluble salts 0 171,628 171,628

Ethylene diamine tetra-acetic acid 0 105,044 105,044

Hexamethylene tetramine 0 1,747 1,747

(kilo tons/year)�

(kilo tons/year)�

�

(tons/year)

(FY)

(FY)

INPUT OUTPUT

2,000

1,500

1,000

500

0

2.0

1.9

0.2

0.1

0

25

20

15

10

5

0

2017 18

16

21

2.03

0.18

0.12

0.03 0.02

1990 1999 2000 2001 2002

1991 1999 2000 2001 2002

・・・・・・・・�

・・・・・・・・�

2000 2001 2002 2005

1,5171,412

1,706

310

・・・・�

Goshomiya Works

• OverviewLocations Goshomiya Works 1150, Goshomiya, Shimodate-shi, Ibaraki, Japan Goshomiya Works (Shimodate)� 1500, Ogawa, Shimodate-shi, Ibaraki, JapanSite area…………………259,229 m2

Employees………………469

Exhaust gas treatment facilities Exhaust gas containing solvents from coating equipment is treated at high temperature. Resulting waste heat is used to collect steam.

Waste plastics incinerator of the dry gasification furnace type Waste plastics and other wastes are heated, decomposed, and gasified, then completely combusted to control dioxin and soot emissions.



Raw materials

Energy

Service water

Products

Wastes

Atmosphere

Drainage




………………………2 kilo tons/yearr Wastes generatedAmount recycled Final landfill


………… 3 kilo tons/year

……………0.02 kilo tons/yearr

CO2

SOx NOx






……………………7,562 kR/year

…………………………3,246 kR/year

…………………………420 kR/year


……………………31 km3/year

…………… 216 km3/year

………… 2 km3/yearDrainage producedBOD

……… 249 km3/year



(FY)

(FY)

(FY)

• CO2 emissions


(Target)�

�

• Atmospheric discharge and transfer of PRTR- compliant substances (Fiscal 2002, in kg/year)


Toluene 1,696,448 421,078 2,117,526

Xylene 6,212 507 6,719

Ethyl benzene 1,476 78 1,554

Di(2-ethylhexyl) phthalate 681 169 850

Styrene 253 696 949

(kilo tons/year)

(kilo tons/year)�

�

(tons/year)�

�

Soybean oil ink is used for printing.*This SOY INK mark is a marking indicating approval by the American Soybean Association.

This report is printed on recycled paper with an old paper content of 100%. Issued in September 2003. Printed in Japan (H)

•Contact

Safety & Environmental Management Office;Environment Management Center

1-1, Nishi-Shinjuku 2-chome, Shinjuku-ku, Tokyo 163-0449, Japan

Phone : 81-3-5381-2214 Fax: 81-3-3346-3115

Homepage : http://www.hitachi-chem.co.jp

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