Responding to Disaster Risk

Basic Concept

The Nisshinbo Group holds safety as the top priority for all of its activities with "Safety is the Basis for Everything" in the Business Conduct Guidelines.

In addition, the "Risk Management Regulations" of Nisshinbo Holdings Inc. clearly stipulate the following action guidelines in the event of a disaster or other emergency situation.

Guidelines for Action in the Event of Emergencies

• ① In the event of an emergency, the response shall take precedence over normal business activities.
• ② The safety and health of the Group's customers (including indirect customers), officers, employees, suppliers, neighboring residents, and other related parties shall be given top priority.
• ③ Proactively disclose information regarding the safety and interests of all concerned parties.

Crisis Management System

The Nisshinbo Group has established an emergency response system in the "Risk Management Regulations" in order to promptly respond to emergencies, such as earthquakes and fires. In the event of an emergency, Nisshinbo Holdings Inc. will establish an Emergency Response Headquarters and an Emergency Response Team as the response headquarters. The Emergency Response Headquarters is headed by the president and the member of the response headquarters is appointed by the Company's executive officers. The Emergency Response Team is headed by chief of the Corporate Strategy Center, and team members are appointed from Managing Officer. The Emergency Response Team consists of an Information Gathering Team, a Safety Confirmation Team, a Communication Team, and a Secretariat.

<System in Case of Emergency>

<Composition and Roles of the Emergency Response Headquarters>

<Composition and Roles of the Emergency Headquarters and Emergency Response Team>

In principle, the Emergency Headquarters will be established in the event of an earthquake of intensity 6 lower or greater on the Japanese seismic intensity scale at any of the major bases in Japan. In other cases, the establishment of the task force will be decided by the president, who is the head of the task force.

Specific Initiatives of The Nisshinbo Group

Disaster BCP Initiatives

From the perspective of business continuity, the Nisshinbo Group conducts annual drills to confirm the safety of employees in the event of a major earthquake or other emergency and to communicate information necessary for early recovery from a disaster. The Nisshinbo Group developed and introduced a "safety confirmation and emergency communication system" within the Group to quickly and reliably confirm the safety of employees.

In addition, Nisshinbo Holdings Inc. and major business sites of the Group have organized a self-defense fire brigade, which conducts periodic inspections of fire prevention equipment and other facilities, as well as water spraying drills. In addition, annual disaster prevention inspections have been conducted for more than 60 years to strengthen the company's ability to respond immediately after a disaster strikes and to develop an initial response system.

In FY2023, Nisshinbo Holdings added a function (push notification function) to its safety confirmation and emergency communication system to request input of safety information. In preparation for the occurrence of a large-scale disaster, the company is further upgrading the system to speed up employee safety confirmation by conducting company-wide training for inputting and responding to such requests.

In addition, during the BCM training in FY2023, Nisshinbo Group introduced generators and portable power supplies to simulate the startup and maintenance of functions of an emergency response headquarters in the event of loss of power due to a disaster and then provided instructions to emergency response headquarters personnel and team members on how to secure power and communications during initial response. Nisshinbo Group plans to continue to maintain the necessary equipment in the event of an emergency.

BCP Initiatives in the Procurement Supply Chain

Nisshinbo Group is inquiring about the status of BCP in the procurement supply chain as a survey item for suppliers. The results for FY2023 show that many suppliers perceived their BCP efforts as insufficient, but compared to FY2022, there was a slight trend toward promoting BCP efforts and activities. The company will continue to provide feedback and support on the survey results, aiming to improve the Nisshinbo Group's supply chain BCP.

Specific Activities of the Group Companies

BCP Activities in the Supply Chain in the Event of a Disaster

Japan Radio Co., Ltd. is working to build a supply chain database (to keep it up-to-date) in order to quickly collect information and consider alternatives in the event of an emergency (natural disaster, epidemic, fire, riot, terrorism, war, civil war, etc.).

Through these efforts, Japan Radio aims to achieve a stable supply of products and earn the trust of its customers.

In the past, in the event of an emergency, the company would request that all suppliers conduct an investigation, but now Japan Radio can pinpoint the location of factories by knowing their location data. In the event of an emergency, the primary response rate (impacted or not) within 24 hours is 100%, enabling the company to respond quickly to its customers. To keep the database up-to-date, Japan Radio surveys suppliers once every two years to determine the timing for updating the database.

Japan Radio will continue to make efforts to keep the database up-to-date in order to maintain the trust of customers.

Conducted Drills Based on the Assumption of Flooding

Japan Radio Co., Ltd. Nagano Plant is currently stockpiling 1,470 bags of water bags in preparation for inundation of buildings due to flooding.

The water bags are placed at the entrances of buildings to prevent flooding of the buildings due to river flooding or heavy rainfall, and act like sandbags. Nagano Works has prepared hazard maps showing the flooding risk on its premises and conducts drills to install water bags as part of its annual disaster drills, targeting buildings with a high risk of flooding. The training includes pouring groundwater into water bags and carrying water bags by bucket relay, while confirming each step of the procedure. The training takes place in a different building each year, such as the Environmental Test Building or the Large Equipment Plant, and is attended by members of the company, including employees who work in those buildings.

Through continuous drills, Japan Radio confirms the prompt initial response in the event of flooding and work to reduce the risk of flooding.

Conducting Disaster Assumption Drills

Nisshinbo Mechatronics (Shanghai) Co., Ltd. conducts drills for all employees in the event of a disaster, including evacuation drills, fire drills, and emergency communication network drills.

In addition to daytime evacuation drills, nighttime evacuation drills and rescue drills using stretchers are conducted to ensure that all employees can evacuate safely at any time. Firefighting drills are conducted mainly for new employees, including initial firefighting drills using fire extinguishers and fire drills using fire hydrants, to ensure that employees can respond quickly and appropriately in the event of a fire. In the emergency communication network training, Nisshinbo Mechatronics (Shanghai) conducts preliminary drills to ensure that information regarding a hypothetical disaster event is promptly and accurately reported to management in accordance with the emergency communication network.

Through these drills, Nisshinbo Mechatronics (Shanghai) aims to raise employees' awareness of disaster prevention and strengthen its initial response system in the event of a disaster by addressing issues identified through the drills.

Evacuation Drills and BCP Drills Based on Earthquake Scenarios

Excel Tokai Co., Ltd. conducts an annual disaster drill for all employees.

This time, in addition to the evacuation drills that have been conducted in the past, Excel Tokai assumed a case in which a person was delayed in escaping due to injury. The drill was based on the assumption that one person was found unaccounted for during roll call after evacuation, and that a person in need of rescue was found while the personnel in charge of each of the seven buildings were searching at the same time. Through mutual communication by radio, the search team assembled at the site and evacuated and transported the person in a wheelchair. Although this device was used without notifying the people involved, the company believes that the sequence of operations from search to transport went relatively smoothly.

After the evacuation drill, a BCP initial response drill was conducted based on the assumption of an earthquake. Each team (headquarters, general affairs team, information team, rescue team, and recovery team) performed their roles almost as planned, but Excel Tokai regrets that it did not plan well for the original objective of restoring damaged buildings and facilities and resuming production. The company plans to focus on correcting this point in the next round of training.

Investigation of Supply Risk of Purchased Raw Materials

Nisshinbo Chemical Inc. surveyed the supplier's production location, timing of production, inventory location, inventory dispersion status, progress in raw material diversification purchased by suppliers, and the existence of BCP plans for all purchased raw materials.

For raw materials that suppliers cannot be replaced by other raw materials or other manufacturers, in addition to ascertaining inventory quantities and investigating the timing of periodic repairs, Nisshinbo Chemical also checked the seismic strength of manufacturing facilities and the recovery period in the event of a disaster. In addition, when manufacturing facilities and inventory holding locations are located in close proximity, the company discusses the possibility of moving inventory holding locations along the route to the Tokushima Plant, which is the receiving factory.

As for imported raw materials, the Suez Canal is not navigable because of the obstruction to navigation by armed groups, and the Panama Canal is experiencing navigation restrictions due to drought, which has extended delivery times for European and U.S. raw materials. In order to avoid any impact on production, Nisshinbo Chemical is implementing measures of placing orders at least one month earlier.

Disaster Risk Response Training

At Nisshinbo Textile Inc., company-wide disaster prevention inspections are conducted every year from September to November. During the period of the inspections, all employees participate in drills for earthquake evacuation, initial firefighting, heavy oil leakage response, and firefighting notification drills at each business site.

At the Yoshinogawa Plant, disaster risk response drills included earthquake evacuation drills and initial firefighting drills based on the assumption of a textile fabric fire from a textile processing machine. The earthquake evacuation drill was conducted as in previous years, but with an awareness of generational change, a new structure was put in place so that various people could take on new roles. In the initial firefighting training based on the assumption of a textile fabric fire, while confirming the coordination of support from other workplaces, initial firefighting using fire extinguishers was followed by water discharge training from fire hydrants both indoors and outdoors. In addition, fire extinguisher training was conducted mainly for new employees but also for veteran employees.