REPORT
2022APRIL 1.2021-MARCH 31.2022
Sanyo Special Steel Report 2022
(Integrated Report)
CONTENTS
Corporate Philosophy | 1 |
Top Message | 2 |
Our Business | 4 |
Value Creation Process | 5 |
Global Business Development | 6 |
Management Plan (2025 Medium-term Plan) | 7 |
Topics | 8 |
Important ESG-related Issues | 10 |
Environment
Environmental Management | 11 |
Climate Change Prevention Initiatives | 12 |
Information Disclosure According to TCFD | 14 |
Recommendations | |
Contribution to a Resource-recycling Society | 15 |
Reduction of Environmental Impact | 16 |
Social
Creating a Safe Workplace | 17 |
Disaster Prevention Initiatives | 18 |
Promotion of Diversity Management | 19 |
Promotion of Corporate Health Management | 20 |
Human Resource Development | 21 |
Quality Improvement Initiatives | 22 |
Expanding Technological Superiority | 23 |
Realization of Sustainable Procurement | 24 |
Governance
Enhancement of Corporate Governance | 25 |
Internal Control Systems | 26 |
Officers | 27 |
Key Financial Data | 28 |
- Editorial Policy
This report summarizes the Sanyo Special Steel Group's environmental, social, and governance (ESG) initiatives aimed at realizing a sustainable society. - Period and Scope of Coverage
This report contains information on the initiatives of Sanyo Special Steel and its Group companies in FY2021 (April 1, 2021 to March 31, 2022), but also includes information outside the period covered. - Reference Guidelines and Other Documents "International Integrated Reporting Framework," IIRC "Guidance for Integrated Corporate Disclosure and Company-InvestorDialogue for Collaborative Value Creation," Ministry of Economy, Trade and Industry "Environmental Reporting Guidelines 2018," Ministry of the Environment
Task Force on Climate-Related Financial Disclosures (TCFD) Recommendations - Notes on forecasts
The forward-looking statements in this report are based on the judgment of the Group based on the information currently available. These statements are subject to a number of uncertainties, and actual results may differ materially depending on a number of factors.
Corporate Philosophy
Confidence-based Management
Confidence of Society
We aim to earn the confidence of society by contributing to the realization of an affluent and culturally rich society and fulfilling our responsibilities as a member of society through our "high- quality special steel manufacturing."
Confidence of Customers
We aim to earn the confidence of our customers by rapidly and accurately identifying their needs and appropriately providing high-quality special steel products.
Confidence among People
We will build confidence among people by deepening communication with all stakeholders and acting autonomously in accordance with social norms.
1
Top Message
We are committed to contributing to the realization of a sustainable society through the practice of our corporate philosophy, "Confidence-based Management," as well as meeting the ever-increasing need for highly reliable special steels in the face of major changes in industry and society, including carbon neutrality.
Since its establishment in 1933, the Sanyo Special Steel Group has played a role in a resource-recycling society by manufacturing special steel products from iron and steel scrap, a recycled resource, and has contributed to industrial and economic development by providing highly reliable special steel products to various fields of society. In addition, we have responded to the globalization of markets ahead of others, and have established integrated manufacturing bases for special steel in Japan, Europe, and India to capture global demand for special steel and formed and fabricated material business bases in the growing automotive markets of China and North America, thereby building a supply chain that responds to local production and local consumption in customer industries.
Even under major social and industrial changes such as carbon neutrality, our highly reliable special steel products will be in even greater demand around the world as important materials to support the development of society. Under these circumstances, the Sanyo Special Steel Group will further build up the brand of the "Sanyo Special Steel - the confident choice" by strengthening its business foundation and innovating technologies that are ahead of the times to meet the needs of customers. We will continue to strive for the creation of economic and social value and contribute to the realization of a sustainable society by creating through the practice of our corporate philosophy, "Confidence-based Management," which aims to establish "confidence of society," "confidence of customers," and "confidence among people."
MIYAMOTO Katsuhiro,
Representative Director and President
2
Top Message
Review of FY2021 and Current Business Environment
ESG Initiatives for the Realization of a Sustainable Society
Review of FY2021
In FY2021, while the global economy was recovering from the severe situation caused by the COVID-19 pandemic, prices of raw materials and fuels, including iron and steel scrap, rose sharply. However, we achieved consolidated net sales of 363.3 billion yen and consolidated ordinary income of 21.7 billion yen, a marked improvement from FY2020, when the Group was in the red, due to factors such as an increase in sales volume resulting from a recovery in key customer industries, including automobiles, industrial machinery, and construction machinery; higher sales prices resulting from the application of the scrap surcharge system; and improved earnings at Group companies, including European subsidiary Ovako. (Figure 1)
In FY2021, the first year of our five-year management plan "2025 Medium-term Plan," under the policy to strive to increase earnings by strengthening our structure in anticipation of changes in the demand structure and intensifying international competition, we have been working to improve the profitability of our overseas businesses and to quickly demonstrate the synergies of the collaboration with NSC and Ovako, which is a strength not found in competitors. In the overseas businesses, Ovako made progress in improving its profitability and contributed significantly to consolidated business performance, and in the collaboration, under the plan to generate about 10 billion yen in synergies among the three companies in FY2024, the sixth year of the collaboration, the results were achieved with progress exceeding the plan in FY2021, the third year of the collaboration.
Figure 1Trends in consolidated business performance
Consolidated net sales | Consolidated ordinary income | ||
(Billions of yen) | (Billions of yen) |
21.7 | 20.0 | |||||
400.0 | 20.0 | |||||
363.3 | 385.0 | |||||
10.7 | ||||||
300.0 | 9.4 | |||||
10.0 | ||||||
262.5 | ||||||
200.0 | 210.7 | |||||
185.8 | ||||||
157.5 | 0 | |||||
100.0 | ||||||
▲1.5 | ||||||
0 | ▲4.8 | ▲10.0 | ||||
FY2017 | FY2018 | FY2019 | FY2020 | FY2021 | FY2022 |
Forecast (Note)
Figure 2Trends in raw material and fuel prices
(Index based on the value of the first quarter of FY2020 as 100)
350 | ||||
Iron and steel scrap | ||||
Chromium | ||||
300 | Nickel | 297 | ||
Electricity | 283 | |||
LNG | 270 | |||
263 | 265 |
Toward Carbon Neutrality by 2050
Companies are expected to contribute to the realization of a sustainable society. In particular, climate change is an important issue that affects the very existence of humankind, and in July of last year, we announced a roadmap for achieving our policy goal of realizing carbon neutrality by 2050. Based on this roadmap, in addition to reducing our own CO2 emissions by 50% or more compared to the FY2013 level in FY2030, we will promote eco- products that contribute to CO2 emission reductions by customers and eco-solutions that deploy energy-saving and productivity- enhancing technologies at overseas Group companies, aiming at contributing to reducing emissions by approximately 20% of the FY2013 level.
Ovako, the Sanyo Special Steel Group's European subsidiary, has been promoting its world's most advanced initiatives toward decarbonization, and in January 2022, it shifted to a carbon- neutral production through a carbon offset program. Ovako has introduced a climate surcharge in conjunction with this and has begun selling green steel. In Europe, there is a strong interest in low-carbon steel in customer industries, and we recognize that Ovako's advantage in the European special steel market has been further enhanced by being one of the first to achieve carbon neutrality.
In terms of reducing CO2 emissions and improving energy efficiency, we believe that the need for highly reliable special steel products, in which our Group excels, will further increase. Recognizing this as a great opportunity to demonstrate our Group's strengths, we will actively promote innovations that contribute to achieving carbon neutrality for society as a whole and responses to new steel material needs that contribute to environmental issues faced by our customers.
to travel to and from foreign countries thus far, we will accelerate the interaction of human resources across national borders in the future.
In addition to these factors, technological growth is essential for our Group's sustainable growth. For the purpose of enhancing our corporate value in the global special steel market, we will promote further expansion of our technological superiority by strengthening our research, development, and quality competitiveness.
Enhancement of Corporate Governance
In June 2022, Sanyo Special Steel has transitioned to a Company with an Audit & Supervisory Committee in order to accelerate management decision-making, enhance discussions of basic management policies at Board of Directors meetings, and strengthen the supervisory function of the Board of Directors in the execution of operations. We will continue to make ongoing efforts to enhance corporate governance in order to live up to the trust and confidence placed in us by our shareholders, suppliers, and other stakeholders, achieve sound and sustainable growth of our Group, and enhance our corporate value over the medium- to long-term.
We hope that this report, which introduces our ESG initiatives, will help you to better understand the activities of our Group, and we look forward to your continued support and assistance.
Current Business Environment and Response Policies
In recent years, international competition in the special steel industry has become even more intense as competitors have increased capacity and improved quality and technology. In addition, the current situation has seen unprecedented cost increases due to a significant rise in energy prices, mainly due to the situation in Ukraine, as well as the depreciation of the yen. (Figure 2)
With regard to demand for special steel, there are concerns about a slowdown in the economy due to automobile production cuts caused by a shortage of semiconductors, etc., the prolonged situation in Ukraine, global inflation, and other factors. It is therefore necessary to continue to pay close attention to future trends.
Under these circumstances, the Sanyo Special Steel Group, based on its basic policy of "Securing appropriate margins" will promote sales price revisions and expansion of the application of surcharges, as well as focus on stable operations and take necessary measures to address increased costs due to rising raw material and fuel prices. Based on this policy, we aim to achieve ordinary income of
10.0 billion yen(Note) for the full year in FY2022 and strive to further enhance our corporate value in the global special steel market by establishing a solid corporate structure that can continue to secure stable earnings.
250 | (Note) Based on purchase price | 251 | 244 | ||||||||||||||||||||||
235 | |||||||||||||||||||||||||
221 | 240 | ||||||||||||||||||||||||
234 | |||||||||||||||||||||||||
201 | 208 217 | 220 | |||||||||||||||||||||||
200 | |||||||||||||||||||||||||
170 | |||||||||||||||||||||||||
157 | 181 | 161 | |||||||||||||||||||||||
178 | |||||||||||||||||||||||||
169 | |||||||||||||||||||||||||
150 | 140 | ||||||||||||||||||||||||
136 | 134 | ||||||||||||||||||||||||
139151 | |||||||||||||||||||||||||
109 | 140 | ||||||||||||||||||||||||
121 | |||||||||||||||||||||||||
100 | 90 | ||||||||||||||||||||||||
83 | 89 | 101 | |||||||||||||||||||||||
77 | 86 | ||||||||||||||||||||||||
50 | |||||||||||||||||||||||||
1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 2nd half | |||||||||||||||
forecast | |||||||||||||||||||||||||
FY2020 | FY2021 | FY2022 |
Aiming for Growth of People and Technology
As a group of manufacturing companies, we believe that safety, disaster prevention, and health are the basic premise of our business activities and take precedence over everything else. Based on this recognition, the Group promotes the reduction of work risks and the creation of a safe workplace by "integrating top-down and bottom-up approaches" and "implementing both hard and soft measures" with regard to safety, works to prevent accidents from occurring and to prevent the spread of damage in the event of a disaster by raising employee awareness of disaster prevention and conducts large-scale earthquake disaster drills with regard to disaster prevention. With regard to health, in August 2021, we formulated the "Sanyo Special Steel Corporate Health Management Declaration" and established a corporate health management promotion structure with the Representative Director and President as the Chief Corporate Health Officer to promote the creation of an environment in which each and every employee can safely and healthily engage in rewarding work on a daily basis.
In terms of diversity, Sanyo Special Steel raised its mandatory retirement age to 65 in April 2021 to promote the active participation of the senior generation, and has long promoted measures to promote the active participation of female employees. In June 2022, a female executive officer was appointed. Moreover, in order to respond to the globalization of business activities, we are developing global human resource development initiatives. Although the spread of COVID-19 has made it difficult
(Note) Publicly announced business performance forecast as of October 31, 2022
3
Our Business
Highly reliable steel that supports global manufacturing
High-cleanliness | Japanese, |
steel | European, and Indian |
manufacturing | manufacturing |
technology | bases |
High-performance metal powders that support the development of advanced technologies
Spherical powder | Metallurgical |
technology | |
with good | |
evaluation and | |
flowability | |
analysis system | |
Integrated | chain |
Supply system to meet global needs high-cleanliness | |
production from | Global supply |
steel |
In the Steel Products business, we manufacture and sell a variety of special steel products, including bearing steel, engineering steel, stainless steel, heat-resistant steel, and tool steel.
The Sanyo Special Steel Group's special steel products are used as materials for some of the most important parts of automobiles, industrial machinery, and plants, contributing to the functional improvement of end products and the reduction of environmental impact in the manufacturing processes of our customers.
In the Metal Powders business, we manufacture and sell metal powder products.
Sanyo Special Steel manufactures high-performance metal powders with low impurities and excellent flowability and powder metallurgy products formed by our unique technology to support the development of advanced technologies in various settings, from the front lines of research and development to manufacturing sites.
In the Formed and Fabricated Materials business, we manufacture and sell formed and fabricated materials made from special steel bars and tubes.
In addition to Japan, the Sanyo Special Steel Group has established a supply system for formed and fabricated materials in North America and China, which are growth markets for the automotive industry, thereby contributing to the simplification of the processing process and local production for local consumption for customers who are expanding their business globally.
Steel Products | Bearing steel | Engineering steel | Stainless steel | Metal Powders |
Heat-resistant steel | Tool steel | High alloy steel |
Metal powders | Powder metallurgy | Powder metallurgy | Formed and | Formed and |
high-speed steel | products | fabricated materials | ||
Example of modeling | Sputtering target | Fabricated Materials | ||
by 3D printer | materials |
Forged/cut and | Die forged parts |
CRF rings | |
Wind power generation
Construction machineries
Aerospace
Bearing steel | Formed and |
fabricated materials | |
Bearings | |
Engineering steel | Power |
Bolts, gears, etc. | transmission lines |
Engineering steel
Bearing steel
Formed and
fabricated materials
Gears, shafts, cylinders,
Railroads and Shinkansen
bullet trains
Bearing steel | Formed and |
fabricated materials | |
Bearings
Bearing steel | Engineering steel | Metal powders |
Formed and | Stainless steel | 3D printer |
fabricated materials | ||
Driving parts, etc.
High alloy steel |
wires |
High-voltage power transmission lines
sprockets, swivels, etc.
Buildings
PCs
Stainless steel
Motor shafts for OA equipment, sleeves, etc.
Powder metallurgy
products
Bearing steel | Hard disk drives |
Mobile phones/
Factories, plants, power stations
Seismic isolation systems
Smartphones
Automobiles
Engineering steel | Formed and |
fabricated materials | |
Transmission gears, shafts, engine parts, connecting rods, etc.
Bearing steel | Formed and |
fabricated materials | |
Bearings, etc.
Heat-resistant steel
Intake/exhaust valves, etc.
Metal powders
Brazing materials for heat exchangers, shot peening
Tool steel | Bearing steel | Stainless steel | Metal powders |
Dies, rolls, tools, | Boilers, waste heat | Heat-resistant thermal | |
etc. | Engineering steel | recovery, chemical | spray powder for |
Bearings, linear | plant piping | boilers Metal powders | |
for 3D printing | |||
Powder metallurgy | motion bearings, | High-alloy steel | |
high-speed steel | ball screws, etc. | tubes |
Cutting tools, dies, injection molding machine (ex. screw), etc.
Robots
Bearing steel | Engineering steel |
Formed and
fabricated materials
Driving parts, etc.
Engineering steel | Metal powders |
Bolts | Electro-magnetic |
wave absorber | |
Medical fields
Stainless steel | Ships | |
Parts for dental treatment | Engineering steel | |
devices (handpieces) | Bolts, shafts, etc. | |
Metal powders | Stainless steel | |
Dental devices | Propeller shafts, etc. | |
Heat-resistant steel | High alloy steel | |
Engine valves |
4
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Sanyo Special Steel Co. Ltd. published this content on 06 January 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 January 2023 09:19:51 UTC.