Contents · New Environmental Products Highlight (Thermo Shadan) New Environmental Products Highlight (Titanium foil corrosion prevention system) Our environmental products

Our policy is to report a wide range of our social and environmental activities from the CSR perspective.(*) The reports have been issued annually since 2003, formerly called the “Environmental Report” and renamed the “Social and Environmental Report” in 2008 to expand its contents as its title suggests.

Editorialpolicy

Contents

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41Terms

Greetings

Company Profile

Relationship with society and environment

Corporate Governance / Internal Control

Risk Management / Compliance

New Environmental Products Highlight (SEAFLO NEO, SEA PREMIER)

New Environmental Products Highlight (Thermo Shadan)

New Environmental Products Highlight (Titanium foil corrosion prevention system)

Our environmental products (Marine paints, container paints)

Our environmental products (Industrial paints)

IBC Recycle System

Environmental Management

Plans to deal with Environmental, Safety and Health Issues

Green Purchasing and Procurement

Environmental Accounting

Chemical substance management

Commitment to the reduction of the environmental impact

Environmental Impact data by offices or factories

Environmental Management System

Prevention of Global Warming

Disaster and Accident Prevention

Together with Customers

Together with Local Communities

Together with Employees

CompanyOverview

Product development

Environmental Reporting

SocialPerformance

What is VOC ?

What is MSDS ?

PRTR (Pollutant Release and Transfer Register)

S o c i a l & E n v i r o n m e n t a l R e p o r t

Scope of activitiesreported

Periodcovered

Date of Issue

April 1, 2009 to March 31, 2010 (part of the descriptions may be for the period in and after April 2010)

September, 2010 (previous report issued: October, 2009, scheduled date next issue : September, 2011)

This report focuses on our domestic business activities (a part of the descriptions in this report includes data of our overseas affiliates).

The following abbreviated names are used in the summary of collected environmental data.■ Kyushu Factory■ Shiga Factory■ Technical Center(Otake)■ Technical Center(Shiga)■ Ohtake-Meishin Chemical■ Kobe Paints

Kyushu FactoryShiga FactoryTechnical Head Quarter, OtakeTechnical Head Quarter, ShigaOhtake-Meishin Chemical Co., Ltd.Kobe Paints, Ltd.

I am honored to provide you with the first Social and Environmental Report since assuming office from the former president, Mr. Yamazumi in April 2010.

Our marine paint products can reduce the frictional resistance generated between the ship bottom and water, which should reduce fuel consumption. Our industrial paint products also have the potential to enable various environmental achievements such as helping save energy by reflecting sunlight onto buildings efficiently to reduce heat conduction, construction waste and life cycle cost by preventing the corrosion of buildings.

Our key mission is to maximize the environmental performance of paints and we will strive to develop more environmental products in future. We believe that as a manufacturer and seller of such environmental products, we must focus more on environmental protection and safety. With this in mind, we are carrying out various activities to reduce the environmental impact generated in the course of manufacture, transport and use of our products as much as possible and enhance product safety, including establishing a management system for environmental protection and safety as well as producing solvent-free paints to reduce irritating material and VOC.

Another important mission is to fulfill our social responsibilities to our stakeholders in various aspects. To do so, we will focus on compliance as our management cornerstone, emphasizing the establishment of sound and highly transparent corporate governance and internal control, and strive to improve the relationship with local communities through our 26 companies in 14 countries and regions worldwide.

We hope this Social and Environmental Report will help you understand our efforts and commitments.

To continue to be a socially needed and reliable company, CMP will further implement proactive activities on a group-wide basis. Your further cooperation would be most appreciated.

Greetings

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PresidentMasataka Uetake

S o c i a l & E n v i r o n m e n t a l R e p o r t 2 0 1 0

Company Profile

3

Company Overview

Corporate Data

Kyushu Factory

Kobe Paints, Ltd. Ohtake-Meishin Chemical Co., Ltd.

■ Factories

■Factories at domestic subsidiaries

■Technical Center

Technical Center (Hiroshima) Technical Center (Shiga)

ISO 9001ISO 9001

ISO 9001ISO 9001

ISO 9001ISO 14001 Shiga Factory ISO 9001ISO 14001

Consolidated Sales Breakdown by Products in 2009FY

Since its foundation, Chugoku Marine Paints, Ltd. has been taking a unique approach in the industry to develop core products for marine paints and also paints for industrial applications. Our consistent and sincere attitude in areas of both software and hardware, towards developing better products has been highly appreciated and praised by customers not only locally but also internationally. With the help of strong customer confidence in our products and services and our never-ending quest to meet customers' expectations, we keep developing. As we are a supplier to key industries such as shipping, ship building, electric power, steel, construction and woodworking industries, our role and contribution can be vital to the growth of the industrial world in many aspects. Also, our efforts should be based in the ideal of maintaining harmony between man and nature. Chugoku Marine Paints, Ltd. is an industrial leader that seeks to promote industrial growth while protecting the global environment, and continues its efforts into the future with a creative and innovative approach towards meeting customers' needs.

Company NameCHUGOKU MARINE PAINTS,LTD.

Head OfficesTokyo Office

Tokyo Club Building, 2-6, Kasumigaseki 3-chome, Chiyoda-ku, Tokyo, 100-0013 JapanPhone: +81-3-3506-3951 Fax: +81-3-5511-8541

Hiroshima Office1-7, Meiji-Shinkai, Otake-shi, Hiroshima-ken 739-0652, JapanPhone: +81-827-57-8555 Fax: +81-827-59-0017

Company President

Date of Establishment

Capital

Net Sales

Number of Employees2,337 as of the end of March 2010 (Consolidated) 398 as of the end of March 2010 (Non-consolidated)

Business to cover

Mr. Masataka Uetake

May 1917

11,600 million yen as of the end of March 2010

86,810 million yen in 2010 (Consolidated)

40,087 million yen in 2010 (Non-consolidated)

1. Manufacturing and sales of marine paints, industrial paints and container paints.

2. Sales of painting related equipments.3. Supervising for coating4. Others

Main business locations in Japan

Head Office

Factory

Sales Office

Marine paints86％

Industrial paints12%

Container paints1%

Miscellaneous1%

Transition of Annual Net SalesConsolidated Non consolidated

Net

Sal

es (

100

mill

ion

yen)

(FY)

1000

800

600

400

200

006 07 08 09 10

Hokkaido

Sendai

Akita

Tokyo

Shizuoka

Nagoya

ShigaOsakaHyogo

OkayamaOnomichi

KureHiroshima

MarugameImabari

UsukiFukuokaSagaSaseboNagasaki

4

Shanghai Guangdong Korea

Singapore

Thailand

Netherlands U.S.A.Indonesia

China

Hong Kong

Indonesia

Korea

Malaysia

Singapore

U.A.E.

India

CHUGOKU MARINE PAINTS (SHANGHAI), LTD.

CHUGOKU MARINE PAINTS (GUANGDONG), LTD.

CHUGOKU MARINE PAINTS (HONG KONG), LTD.

P.T. CHUGOKU PAINTS INDONESIA

CHUGOKU SAMHWA PAINTS, LTD.

CHUGOKU PAINTS (MALAYSIA) SDN. BHD.

CHUGOKU MARINE PAINTS (SINGAPORE) PTE. LTD.

Dubai Branch

Mumbai Office

■Overseas factories

■Main Domestic & Overseas Subsidiaries and Affiliates

Taiwan

Thailand

Germany

Greece

Netherlands

U.K.

U.S.A.

CHUGOKU MARINE PAINTS (TAIWAN), LTD.

TOA-CHUGOKU PAINTS CO., LTD.

CHUGOKU PAINTS (GERMANY) G.m.b.H.

CHUGOKU MARINE PAINTS (HELLAS), S.A.

CHUGOKU PAINTS B.V.

CHUGOKU PAINTS (UK) LIMITED

CMP COATINGS, INC.

Global Network

ISO 9001 Shanghai No.2 ISO 9001 ISO 9001

Malaysia ISO 9001 ISO 9001

ISO 9001

ISO 9001ISO 9001

ISO 14001

FactorySales OfficeLicenseeAgentStock points

U.S.A.

Curacao

Netherlands

U.K.

Germany

Greece

Italy

Norway

Spain

Turkey

China

Hong Kong

Taiwan

Japan

Korea

Singapore

Malaysia

Thailand

Indonesia

Philippines

Vietnam

India

Sri Lanka

Australia

New Zealand

U.A.E.

South AfricaEgypt

(As of March 2010)


Relationship with society and environment

Company Overview

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Company’sbasic policy

We are aware that it is our management priority to carry out our social responsibility for stakeholders, and globally operate our activities

in the medium and long term, within the scope of the management policy as defined below.

Customers

Local communities

CMP continuously aims to fulfill its responsibility in society as a paint company, making best efforts to develop our products functionally and environmentally and improve the quality management system in order to be reliable and to provide customers with satisfaction.

Through developing environmentally conscious products, promoting environmental management, and participating in activities of environmental conservation, CMP intends to develop a relationship with all stakeholders with a strong focus on environmental protection.

Global Environment

As one of the members in local communities, CMP is trying to build a relationship of mutual trust with such communities through our 26 affiliated companies in 14 countries.

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SuppliersCMP has a purchasing policy of open door, fair & law-abiding, of mutual trust and environment conservation, CMP endeavors to promote a relationship of trust with suppliers who are our business partners.

EmployeesCMP takes great concern over employee safety, and carries out fair human resource management processes which include recruitment, training and performance evaluations respecting the individuality of employees and promotion of a workplace environment which has a positive influence on morale and abilities of the employees.

Shareholders and InvestorsCMP strives to increase the value of the corporation through efficient and highly transparent internal controls and corporate governance.

To win customer’s confidence and satisfaction with the highest quality products.

To develop technological innovation and create new products from a global point of view.

To introduce scientific methods to company’s management to let our company run continuously with proper profit and make a contribution to our society.

To be faithful, to cooperate each other and to be fair.

To cope with changes in business environment and move ahead on job standardization and implement systematic management.

Corporate Governance / Internal Control

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Organization Chart for Corporate Governance

CMP is aware that increasing the corporate value is important for management policy, with the establishment of effective, healthy and

transparent corporate governance. Forming the board of directors, the board of auditors, management meetings, and other committees,

CMP reinforce its corporate system.

By aiming for the sustainable development of the company with

efficient and effective internal control systems, CMP endorsed a

resolution to establish the “Rules and Basic Policy for Establishing

Internal Control System” at the board of directors in May 2006

(partially amended in March 2008), and are putting effort into

forming and operating the appropriately related committees.

Corporate Governance

Internal Control

As a listed company, CMP recognize that to submit a highly reliable

financial report to investors and shareholders is an important

responsibility, thus “Basic policy of the Financial Reporting” was

resolved at the board of directors in March 2008. Additionally, CMP

maintain and improve the system through the “Self assessment

concerning Internal Control over Financial Reporting”.

Reliable financial reporting

Shareholders Meeting

Board of DirectorsBoard of Auditors

Board of managingdirectors

Across-The-CompanyJoint Meeting

Risk ManagementCommittee

Compliance Committee

SalesHeadquarter

Subsidiariesand Affiliates

TechnicalHeadquarter

ProductionHeadquarter

AdministrationHeadquarter

Legal Department

Consulting lawyer

Auditor

Corporate Auditors’ Office

Audit Department

Management Meeting

President

Appointment/Dismissal


Audit　


InternalAudit

Audit

Appointment/Supervision

Post 999


Risk Management/Compliance

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Company Overview

Organizational Chart of the Risk Management System

Chief Compliance OfficerRisk Management

Committee

Audit Department

Risk Management system

The business environment surrounding CMP Group is always changing and requires CMP to respond quickly to various risks. Under the basic

policy; “Establish the effective and efficient Risk Management System, to achieve Human Safety, Continuous Development of Corporate Value

and Mutual Trust with Stakeholders”, CMP Group forms various committees and keeps improving the system. These committees include

Compliance Committee, System Planning & Operating Committee and others in support of the Risk Management Committee. We consolidate the

control system for prevention, detention, correction, recurrence prevention of such anticipated risks, and for response to crisis.

Chief Information Officer

Coatings Care Committee

Compliance Committee

System Planning & Operating Committee

Board of Directors Board of Auditors

President

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Preparation and distribution of Compliance Manual

CMP prepares a Compliance Manual to raise the general awareness of compliance and comprehensively explain the legal matters to be noted when carrying out business and distributes the same to all employees and directors in Japan, including those of our group companies.

To sustain the corporate activity in the society & conforming to the social norms and corporate ethics is imperative. CMP is aware that

responding to compliance is one of the most important issues among a number of risks, and always remain committed to compliance, across the

board checks by the Risk Management Committee and with the guidance of the Compliance Committee.

Providing compliance education

For a broad understanding of the applicable law for our activities, and highlighting the important points of law within them, directors and employees in Japan received education for compliance.

Compliance

Code of Conduct for CMP Group directors and staff members

In February 1998, we established the “Code of Conduct for CMP Group Directors and Employees” which states the compliance, management in the medium to long term viewpoint, and mutual understanding with stakeholders (May 2008, is the latest version).

Translated into English and Chinese, this code of conduct is displayed to all affiliated companies to raise awareness of CMP group directors and staff.

Setting up of anonymous consultation in and outside the company

In December 2002, CMP set up “Post 999”, which is an anonymous consultation network in and outside the company. Currently CMP Group has this system in 8 countries / regions.


New Environmental Products Highlight

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Most of our vital energy, food, various products and materials are

imported. Our economy is supported by exports of our various

industrial products most of which are transported by ship.

As the world economy grows, marine transportation has been

increasingly retaining its position as the number one means of

transportation. As the number of ships grows worldwide, the

importance of environmental measures is enhanced. Reduction of

CO2 emissions by reducing fuel consumption is one of the key

issues to be addressed.

Living organisms such as weeds and shells adhering to ships' bottoms damage the ship's body and generate considerable friction resistance between the water and the ship's bottom, reducing both speed and fuel efficiency. Marine paint is mainly used to prevent such living organisms from adhering to the ship's bottom.

CMP has been researching marine paint for 93 years since its establishment. We have marketed many excellent marine paint products, protected ships from living organisms and contributed to CO2 reduction with a development policy achieving a long-lasting high anti-fouling effect. Now, we have developed a fuel efficient marine paint to further improve fuel efficiency and CO2 reduction.

The most distinctive feature of SEAFLO NEO and SEA PREMIER is the high smoothness of their paint film surface. Normal paint, including marine paint, contains a fine grain called a pigment as a component. A fuel efficient marine paint contains finer pigment and achieves a smooth paint film with less frictional resistance against the water by high dispersion technology, exploiting the electrical repulsion effect of the grain surface. In addition, controlling the change of the surface tension when the solvent component vaporizes after being coated achieves more optimal smoothness of the paint film.

From anti-fouling toward fuel efficiency New phase of marine paints

Ultrafine and high dispersing technologies for the pigment (SEA PREMIER)

Grains of existing paints Grains of SEA PREMIER

Smooth paint film surface

Paint less anti-fouling paint

Conventionalproduct SEAFLO NEO

Environmental hydrolysis marine paints

Environmental hydrolysis marine paints (for domestic vessels)

SEAFLO NEO

SEA PREMIER

Product Development

Marin paint contributes to CO2 reduction

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Existing paint SEAFLO NEO

We have verified fuel efficiency improvements of anti-fouling paint in various ways. Major examples include a method to measure friction resistance using a bicylindrical friction measuring device jointly developed by CMP and the Tokyo University of Science and a method to calculate the friction value by immersing a paint film coated on a flat board in a water tunnel. In both the verifications used to measure friction resistance, SEAFLO NEO and SEA PREMIER proved to have lower friction than existing paints, with 3 - 5% more fuel efficiency.

The performance of these products is also superior to that of former products concerning the principal function of marine paints, namely the long-term prevention of living organisms adhering to the ship’s bottom.

Marine paint plays an important role in preventing fuel efficiency deterioration due to adhering living organisms. There are high expectations that SEAFLO NEO and SEA PREMIER will contribute to further CO2 reduction. However, CMP is not resting on its laurels. In addition to CO2 reduction by marine paint, we believe that our marine paints themselves must be environmentally friendly and have developed a means of drastically reducing the VOC contained in our products.

VOC collectively means volatile organic compounds. VOC emitted in the air may cause oxidant smog and certain allergic symptoms such as sick building syndrome. Marine paint contains organic solvent (the major component of VOC) to ensure painting workability. Reducing this compound is one of our major challenges to improve the environment.

Nowadays, hydrolysis marine anti-fouling paint, whereby the paint film is gradually dissolved in water by reacting to the water to renew the surface, is mostly used, containing 400 to 600 g/L of VOC. SEAFLO NEO contains less than 330g/L, further reducing VOC by 17%, even lower than 400 g/L, the minimum level among the current hydrolysis marine anti-fouling paints.

In addition to a 17% reduction of organic solvent, which is volatilized and does not become a component of a paint film, the paint volume is also reduced by 21% while retaining its performance. Consequently, SEAFLO NEO can reduce the VOC in the painting process by 53% compared to existing paint.

The development of anti-fouling paint that started with protection from damage by living organisms adhering to the ship's bottom is now in a new phase to reduce CO2 through the feature of its own paint film. Reducing the environmental risk of paints themselves is also an important issue for us to solve as a paint manufacturer.

We will strive toward the global development of marine transportation by coexisting with the global environment. We hope our development of fuel-efficient marine paint will contribute to future evolution and prosperity.

Verification of fuel efficiency

Toward fuel efficiency + low VOC

Torque meter

Salt water

Sample surface

Outer cylinder(rotating surface)

Motor

Bicylindrical frictionmeasuring device

Test for measuring the friction ofa flat board in a water tunnel

Paint films of SEAFLO NEO and existing paint

Current anti-fouling paint(Hydrolysis type)

SEAFLO NEO

Paint used: 7,901kg

VOC: 2,200kg

Example of VOC reduction of SEAFLO NEO (Cargo vessel of 90,000 tons, service life of 30 months)

Paint used: 6,192kg

VOC: 1,034kg

Paint used

VOC

53.4% cut down

21.6% cut down


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Contribution to CO2 reduction

Thermo Shadan, with an excellent heat reflective effect, which

effectively reflects infrared rays contained in the sunlight, can

control the rise of temperature in buildings when painted on the

roofs or walls and save energy by reducing the need for air

conditioning. It can also limit any increase in the surface

temperature of roofs and walls and serve as a countermeasure to

the heat island phenomenon.

Heat reflective paint is increasingly used for construction and civil engineering due to its energy saving effect. Thermo Shadan also contributes significantly in the marine paint field in which CMP specializes. Most vessel parts are made of steel, meaning while at sea, with uninterrupted sunlight, the temperature both in the cabin and on the deck / handrail becomes significantly high and often therefore hampers work on board. Thermo Shadan prevents temperatures from rising and improves the work environment. Some crews consider the handrail coated with Thermo Shadan to be relatively cool when they hold it.

Significant contribution in marine paint field

Heat reflective paint (High solar reflective paint）

Thermo Shadan

It also prevents freight from being affected by high temperature; and in particular, prevents gas from evaporating from chemical product freight and crop temperatures from rising.

Thermo Shadan is a system integrating a top coat containing special infrared reflection pigment and an undercoat with high infrared reflection performance and reflects infrared light contained in the sunlight effectively. While the reduction of greenhouse gases is required as a global warming countermeasure, Thermo Shadan is highly anticipated as a paint to contribute toward energy saving and CO2 reduction in various fields including construction and marine transportation.

Painting on deck

Product Development


Heat reflective paint helps save energy

The infrared range perceived as heat comprises about 50% of the sunlight. Thermo Shadan has been developed focusing on reflection of this infrared range.

Solar wavelength distribution

Visible light rangeApproximately 47%

Infrared rangeApproximately 50%

Violet light rangeApproximately 3%

Film of Thermo ShadanGeneral paint

Top coat

Under coat

Heat conduction large Heat conduction small

Infrared light Infrared light

A general paint and Thermo Shadan in the same color were painted on plates onto which a halogen lamp was radiated. Subsequently, the temperature of the front and reverse sides of the boards was measured. The test showed that Thermo Shadan limited the temperature rise of both sides of the board by approximately 17°C, when compared with the general paint.

General paint67°C63°C

Thermo Shadan50°C46°C

(Front side temperature)(Reverse side temperature)

(Color: gray/N6)

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In Japan, many bridges were built during the high economic

growth period, which are now almost half a century old. Some of

them have to be replaced due to heavy corrosion. CMP has

developed a titanium foil anti-corrosive system to extend the life of

the aging bridges.

On bridges, corrosion occurs mostly on steel ends which are not fully painted, hence where DFT (dry film thickness) does not develop sufficiently to prevent corrosion (Figure 1). The titanium foil anti-corrosive system blocks corrosive elements such as moisture and salt by laying a titanium foil sheet and coating the steel end with fluoro resin paint to ensure a long-lasting anti-corrosion effect (Figure 2). This system reinforces old bridges and makes them corrosion-resistant, requiring no repainting for about 30 years.


We contribute to global resource saving by extending the life of steel structures.

Extending life for about 30 years

For various steel structures

Titanium foil + fluoro resin paint

Titanium foil anti-corrosive system

* The titanium foil anti-corrosive system has been jointly developedby CMP and Nittetsu Anti-Corrosion Co., Ltd.

The system can be applied to not only bridges but also electric and gas facilities, plants of various kinds, port facilities and other steel structures. Using the system not only to repair corrosion, but also for new buildings, allows the advantage of useful life with a long-lasting anti-corrosive effect to be fully exploited. The titanium foil anti-corrosive system reduces the life cycle cost and contributes to global resource saving compared to replacing and rebuilding bridges.

Corrosion on the steel end

Titanium film Laying the titanium film

Laying the titanium film

[Steel End] Short of DFT

[Planar section] Specified DFT

Anti corrosivefilm

Titanium film

Corrosive elements easily come into the steel end.

The end part where corrosive elements easily infiltrate is coated with titanium film.

Corrosive elements do not easily come into the steel end.

Steel

Anti-corrosive film

Steel

(Figure 1)Existing anti corrosivespecifications

(Figure 2)Titanium film anti-corrosivesystem

NETISRegistration No.: KT-090063

Patent No. 4424536


Cross section of steel end

Paints for vessels

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Product Development

Protection of Oceanic Environment

What is VOC?VOC (Volatile Organic Compounds) is a generic name of volatile organic compounds. VOC, if released into the open sky, becomes to cause oxidant smog, known for its adverse effect to eco-systems. Inside buildings, it is often released from building materials such as plywood, wallpaper or from glues used during construction of new houses, and causes in many cases allergic reactions called “sick house syndrome”.

Anti-fouling paint is used for ship's bottoms to prevent living organisms from adhering. CMP strove for surface smoothness using its unique technology and launched a fuel-efficient anti-fouling paint.

Efforts for CO2 reduction

Ahead of the Paint Industry, CMP removed tar-containing products from its list, and instead, manufactures and supplies epoxy paints for ballast tanks, which meet international regulations for the safety of ships.

Dark color tar-epoxy Paints for tanks NOVA

CMP continues striving to eliminate lead or chromium pigments from the entire range of anti-corrosives and finishing paints. Such elimination for anti-corrosive paints has already been completed and we continue our efforts until the complete elimination from the finish ranges for special purposes.

Existing anti-fouling paint

Surface smoothing technology

Further fuel efficiency

Efforts to develop a fuel-efficient anti-fouling paint

Fuel-efficient hydrolysis anti-fouling paint

SEAFLO NEOSEA PREMIER(for domestic vessels)

We are contributing to maritime environment protection by promoting the nontoxic anti-fouling paint, CMP BIOCLEAN.

Anti fouling agent free, long-lasting foul-release paint

CMP BIOCLEAN

Sea going vessels, which support worldwide trading and provide the most cost effective means in doing so, face a harsh and severe operating environment. CMP manufacture paints for every part of vessels, such as anticorrosive paints for all vessel areas, anti-fouling paints for ship bottoms and paints for cargo, drinking water and ballast tanks. CMP are also committed to

product development for maritime environment protection, with anti-fouling agent free paints, lead and chromium free paints, water-based

paints, high-solid paints, and so forth.

Complete transition to safer, specialized and high solid paints

Switching to lead andchromium free products

Marine paints tend to contain many kinds of organic solvents (major component of VOC - volatile organic content) for workability. The organic solvents themselves do not contribute to the performance of the coated film, and in effect end up becoming the source of air pollution. Thus reduction of organic solvents has long been a major challenge to overcome for the marine coatings industry. CMP is successfully lining up low VOC products and will continue its effort to reduce VOC.

Reduction of VOC

Functions of ship bottom paints

Prevention of shells and algae

Energy Saving

Reduction ofVOC

Product development for VOC reduction

Solvent-free

paints

Water-basedpaints

Highsolid

paints

Our environmental product

Marine paints, container paints

Paints for fishing/pleasure boats and fishnets

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Container Paints


With product development focusing on maritime environment protection and based on our high technology applied for large vessels, CMP has been able to supply high quality products for fishing boats and fishnets. The SEAJET series, paints for pleasure boats and yachts, are also reliable and highly evaluated products for people who love the sea and marine sports such as marine adventurers and professional yacht racers.

Various forms of seaweed adhere to fixed fishing and cultivation nets due to the long periods they spend immersed in the sea, which is problematic for fishing and working. CMP’s “BIO SERIES” anti-fouling paints contribute to the fixed-net fishing and fish culture industries by reducing such problems, while the nontoxic BIO SERIES achieves a superior anti fouling effect to existing TBT anti-fouling agents for fishing and cultivation nets.

For at sea/sailing condition and environmental protection, CMP develops, manufactures and supplies the paints for the bottoms of FRP fish boats. These paints protect such ships from shells and seaweed and achieve a stable and long-term anti-fouling effect. The products are highly valued by customers engaged in the fishery business.

■ Paints for fishing boats

■ Paints for fishnet

■ Paints for pleasure boats and yachts

CMP is a pioneer of the container paint market in China and

succeeded in being one of the world leaders in this market with

due to its vast knowledge and accumulated experience.Our

container paints respond to the environment and thus lead the

paint industry.

CMP also leads the industry in environmental measures and

strives to protect the global environment required for the

development of international logistics and industries.

■ Lead or chromium free paints

CMP strives to eliminate lead or chromium from its finish coatings, and will also eliminate them from container paints, by gaining the understanding and support of customers.

■ Water-based paints

To protect the global environment, CMP is aware of the urgent need to reduce organic solvent (the main component of VOC) from container paints, which usually contain organic solvent. In developing products for the reduction of VOC contained in container paints, CMP has set the main goal of developing water-based paints.

“SEAJET”, the first paint for pleasure boats and yachts in Japan, has been used for various kinds of private leisure boats and sporting yachts in different scenes. We continue to develop environmentally-aware TBT- and copper-free products for these markets.

The word “FF” is an abbreviation of “Fetid Free.” FF paint is a paint which makes the interior of the container milder by removing irritant solvents such as xylene and toluene from the interior topcoat paint and floorboard paint and neutralizing complex odors and conforms to FDA standards. CMP also develops water-based interior topcoat paint with an improved “fetid free” effect and contributes to VOC reduction.

■ Fetid Free Paints (FF Series)

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■ Pylons

UNIGUARD TOWER (Single-component epoxy paint)

KEYSOL G (Organo-polysiloxane paint)

According to the performance requirements of coatings for harsh

environments; such as, salt water resistance, acid resistance and

water resistance, various heavy duty paints are selected and

applied as anti-corrosive paints. In further responding to

environmental issues such as PRTR, soil and air pollution, CMP

has developed heavy-metal free, low-VOC heavy duty coating

products for chemical plants, steel structures and bridges.

CMP continues to develop environmentally friendly products.

Heavy duty paints

VOC reduction

For the painting of heavy duty paint, CMP developed solvent free and water based paints to reduce VOC and mild solvent paints to reduce Toluene or Xylene.


Solvent-free paints Less solvent paintsWater-based paints

Coated withBIOCLEAN

Antifouling effect(In circulating water pipe of power plants)

Coated withpaints other than BIOCLEAN

BIOCLEAN ECO, free of heavy metals, is highly appreciated as an environmentally friendly anti-fouling paint, with successful applications on power plants and similar, domestically as well as overseas.

Product Development

The production and sales of anti-corrosive paints containing lead and chrome was terminated at the end of 2004. CMP recommends customers to change to substitute paints. Furthermore, CMP recommends customers to try lead and chrome-free type products for top and intermediate coatings in the field of heavy duty anti-corrosive paint.

Development of heavy metal free paints

For the area to apply heavy duty paintings, tar-epoxy resin paints were choice of products in the past. In response to the demand of tar free paints, however, CMP developed and sells the primer of heavy duty epoxy paints with equivalent quality and performance.

Development of tar free paints

FLUOLEX No. 500 (Less contaminating fluoro paint)

KEYSOL No. 100 (Highly weatherproof organo-polysiloxane paint)

UNYMARINE No. 500 (Less contaminating polyurethane paint)

HIFLOOR100(Paint for concrete floors)

KEYSOL 100 & 300(Organo-polysiloxane paint)

THERMOSHADAN (Heat reflective paint)

Green Products

Designated Procurement Items - Heavy duty primer paints (lead & chromium free paints)

■ EPICON PRIMER NP

■ EPICON PRIMER CL

■ GALBON S-HB

■ UNIVAN HS

■ UNIVAN HS fast-drying type

■ UNIVAN HS PRIMER

■ UNIVAN NT

■ MULTIX PRIMER

■ THERMOSHADAN PU

■ THERMOSHADAN PU MS

■ THERMOSHADAN AR

■ ECOMAX Bi

■ ECOMATE 100

■ ECOLOGUARD 100

■ EPICON F

■ EPICON ZINC HB-2

Our environmental product

Industrial paints

■Less solvent paints BIOCLEAN ECO

16

CMP supplies UV (ultraviolet) curing paints and other products for the coating of wooden floors, interior materials and furniture to the building-products and interiors industries. CMP develops painting products taking into account health issues, such as formaldehyde emission, which is a serious problem to building materials surrounding us all.

CMP has a lot of experience with the UV curing paints applied to wooden materials (for the first time in Japan) which instantly become hardened by ultraviolet radiation. For the reduction of VOC or formaldehyde, we have further developed our products, such as solvent-free UV curing paints or water-based UV products for coloring agents, primer coatings and finishing coats.

Water-based coloring agents

STAIN W seriesUV curing paints

AULEX seriesPaints for the renovation of bath tubs

BATH REFRESH

Bathrooms can be renovated by painting to be as good as new. Also the base material can be used so that no wastes are generated in order to contribute to the protection of the environment.

Caulking material for railwaysCUS

UV curing paints for wooden floors (For on-site application)

AULEX PRO

For optical film or plastics, CMP supplies high-performance UV curing paints based on the UV curing technology established after the long study of paints for wooden floors. The paints also have other functions, such as scratch-resistance, hydrophilic effect, water repellence, and ultraviolet protection.

As trains run faster, rails need to be stronger and safer. CUS, which provides a level of high-strength and durability to be proud of, softens the vehicle vibration and impact with appropriate elasticity for effective performance. Further, due to the ease of maintenance, CUS is adopted by a number of railroads - not only for the Shinkansen and local trains in Japan but for railroads overseas, where it supports safe and comfortable train travel.

Through exposure to ultraviolet light, the UV curing type paints for house remodeling harden quickly. Similarly, wooden floors become beautiful and harmless.

Paints for building materials

High performance paints for plasticsCaulking material for railways

VOC reduction

For the painting of building material, CMP developed Toluen & Xylene free paints to deal with sick house syndrome, solvent free or water-based paints to reduce VOC and acquired F☆☆☆☆ in the ratings to certify lower Formaldehyde releasing.


Solvent-free paints Less solvent paintsWater-based paints

Before After

■Water-based paints, Solvent-free paints


IBC Recycle System

17

Product Development

It is a system to combine IBC (Intermediate Bulk Container) and automatic paint blending equipment. Traditionally 20 lit. cans were mainly used for the package of paints and partially 200 lit. drums are in use. Most of them, however, were one-way packages and disposed as industrial wastes. These days many corporations are paying more attentions to resource conservation and zero-emission (of industrial wastes). To contribute in anyway solving such problems and come close to the target of zero-emission, CMP has continued to offer customers IBC system since 1995. Paints are delivered to customers in 1,000 lit. container and recycled after use, washed and then used again for delivery of paints. Conversion to IBC System was, of course, driven by team works of CMP and its customers. Benefit of this IBC System can include not only reduction of waste cans but also reduction of waste paint, improved mechanical washing efficiency and better working environment. Thus CMP enjoys favorable reaction by customers.

RecyclingUsed IBC

Transportation

Transportation

Filling

CMP

Washing

Blended paints

Agitator

Base

HardnerThinner

Customer

Retractable wing

Automatic Blending & Weighing Equipment

Blending &

Weighing

Airless Spray

Painting

18

Shipments using IBC increase steadily except for reduction due to the removal of tar-containing epoxy paint during the period 2006-7. Therefore, 2009 saw a reduction of 760,000 waste cans, 170,000 more than the 590,000 in 2008. Delivery under this system also started in China.

CMP took part in the maritime fair, “KORMARINE 2009” held from October 21 to 24, 2009 in Korea and introduced IBC and automatic weighing and blending equipment. We expand the network of industrial waste reduction from Japan to China and Korea.

Automatic paint blending equipment

IBC（Intermediate Bulk Container）

By switching to IBC, premise of the shipyards were much better put in order

Approx. 4 million waste cans reduced in 9 years.

Significant contribution to less industrial wastes.

Merits of IBC System

Transition of paints shipped in IBC and declining waste can disposals

To eliminate can opening operation

To mix paints at a time

To reduce paint loss

To improve quality of paints

01 02 03 04 05 06 07 08 090

8000

7000

6000

5000

4000

3000

2000

1000

0

10

20

30

40

50

60

70

80

Annual paintshipment of IBC (ton)

Estimated savings ofwasted cans (10,000 cans)

(FY)

Ann

ual p

aint

shi

pmen

t (to

n)

Est

imat

ed s

avin

gs o

f was

ted

cans

( 1

0,00

0 ca

ns)


Environmental Management

19

Self-imposed control to protect environment, safety and health


In response to the current worldwide demand to harmonize

with environment of earth, CMP has been proactively engaged

in protecting environment, safety and health as prioritized

management issue. On 18th July 2001, CMP declared

promoting Coatings Care (program to protect environment,

safety and health) proposed and advocated by the Paint

Industry.

Announcing to promote Coatings Care

What is the Coatings Care?

Coatings Care is the self-imposed voluntary initiative proposed

and advocated by the International Paint & Printing Ink Industry

Council (IPPIC) and The Japan Paint Manufacturers Association

to protect the environment, safety, and health at all stages of

chemical processing, from their development right through to

manufacturing, transportation usage and their disposal. Also its

basic policy is expressed in the same way as the one described

in “Responsible Care” advocated by The International Council of

Chemical Associations and promoted internationally.

Basic Principle

Basic Policies

To comply with the law and regulations regarding the environment, safety and health.

1

To promote our business activities through all the steps from the development of our products to their disposal, not only keeping in mind the environment, safety and health, but also resource conservation.

2

To develop and improve the products and technologies that are eco-friendly and safe to the global environment.

3

To consider the environment, safety and health of our employees and local residents through our business process of production, operation and distribution, as well as to promote the reduction of the environmental loading and waste products, resource conservation and recycling.

4

To shift to eco-friendly products and provide information and give advice to customers regarding the safe use and handling of our products in respect of the environment, safety and health in product markets.

5

To widely disclose information to the government and the local community regarding our products and operations.

6

To conduct business activities reducing the loading

on the environment and maintaining harmony with it,

as well as considering safety and health.

Basic policies to secure environmental protection and ensure human safety and health

20

To promote Coatings Care, CMP setss up committees and associated organization to promote Coatings Care in Japan.

Organizational Chart to promote Coatings Care

Coatings Care Committee

Market related Environmental Protection and Safety

(Sales & Marketing section)

Environmental, Safety and Health Protection (Production section)

To reduce environmental load (reducing energy consumption and industrial wastes, increasing recycling resources)

To secure safety and health

To comply with laws and regulations

Product related Environmental and Safety Protection (Technology section)

Technology Meeting Safety & HealthCommittee

EnvironmentalManagement

Committee

Across-The-Company Joint Meeting

To promote the use of environmental products

To deal with MSDS

To deal with PRTR

To deal with PL Claims

Public Relations

Reduction of use of the harmful raw materials

To reduce harmful air pollutants (volatile organic compounds)

To reduce use of designated harmful chemical substance

Committee Chair: Managing Director

SecretariatTo promote actions to protect environment, safety and health

To coordinate summarizing and finalizing activity policies, action plans andaccomplishments

To assess activity accomplishments


Plans to deal with Environmental, Safety and Health Issues

21


Basic Policy

In compliance with the Coatings Care Action Guideline proposed by the Japan Paint Manufacturers Association, CMP started systemizing wherever it is possible and promotes integrated management of reports, records and data generated in many places as much as possible. Each committee sets action targets, periodically checks progress status, announce and moves on to next actions. Important issues ought to be prioritized.

Major actions

Employees' Safety & Health

Work Place Operational Procedure(Occupational Safety)

Environmental Management (Pollution Prevention & Wastes Management)

To manage storage and disposal of harmful substance and control through the final stage of wastes disposal followed by more frequent site inspections

Reduction of energy consumption (Basic Unit for Energy) 3% reduction compared to 2007 data

Reduction of industrial wastes disposal 6% reduction compared to 2007 data

By promoting the utilization of IBC, tank-car and Flecon Pack

To prevent releasing harmful substance in the air over the surrounding communities (solvent vapor/odor)

To prevent releasing harmful raw materials to the surrounding communities (Storage tanks, etc.)

To manage rigorously to prevent occupational accident at work

To collect data about accidents at work and health problems, analysis, company-wide announcement and suggesting to improve equipment or operational manuals

To promote measuring workplace environment (organic solvent density, noise, lighting and ventilation)

To enhance awareness level and rigorous implementation to protect safety and health by contractors in the company premise

To conduct health management and education thoroughly

To reassess, prepare and implement operational manuals to ensure safe operation

To beef up educating operators MSDS to handle raw materials

To document and optimize documents to respond emergency situation

To enhance operational equipment inspection, complement, renew equipment operational manuals, and train operators to follow through

Training

Risk Control

Management of Transportation System

Carriers

Emergency Response

To understand laws and rules for transportation and distribution, instruct and train employees or contractors proper handling, packaging, storage, labeling, transportation and distribution

To document emergency manuals to handle accidents during transportation and set up emergency response teams

To secure safety on site of transportation

To check potential hazard and assess associated risks to the surrounding community & environment

To check availability of qualifying certificates and licenses, inspect maintenance of carriers, availability of insurance certificates and confirm its maximum coverage

To review availability of product information during transportation and emergency response team

To implement oversight and educate carriers

To document, review and refine emergency manuals and procedure to set up emergency response team

Areas for action Major actions - Target -


Management of Manufacturing Area

Management of Transportation & Distribution

22

Regional Social Responsibility

Lifecycle Management of Products


To render full consideration to regulatory compliance, resource and energy conservation, safety during manufacturing and of products (including coated film), and lessening environmental load from stages of product designing, development to improvement

To add additional check items to the check sheet

To exchange information about safety, health and environment between sales staff and customers

To check status of timely sending out MSDS to customers, its availability at customers, accumulation of products safety data and review product safety

To collect information about potential risk of products, and write in product application manual instruction and labels pre-announcement about circumventing or preempting potential risk or potential troubles in advance in large letter size

To switch to products with lower environmental load

To reduce use of harmful substance (ratio per total sales volume)

For example in Japan when compared to 2007 data

TX (Toluene, Xylene & Ethylbenzene) 14% reduction

Lead & Chromium 43% reduction

Endocrine disrupting chemicals 35% reduction

Tar [We discontinued it completely from April, 2006. (0%)]

To document and review emergency response plans prepared for factories and offices

To review emergency communication network and emergency evacuation plans

To train employees for emergency response, and review training record and training practice to find useful lessens

To announce all employees the company-wide promotion of Coatings Care, explain its contents and instruct its implementation

To clarify the role of and cooperative structure among the customer service section, the Communication Dept. and the Compliance office

To document or review manuals and standards dealing with information and communication to the communities (fire fighting, governmental office and residents) in case of emergency

To distribute Environmental Report and have proper presentation (supervisory governmental office, neighboring residents)


New product development

Education & disclosure ofinformation about health, safety and environment

Product safety (safe use of products)

Emergency action plan

Training and education of employees

Communication with regional communities


Green Purchasing and Procurement


23

Survey Sheet for Suppliers’ Green Procurement

CMP Products complying with the Law on Promoting Green Purchasing

are listed in page 15, “Technical Development of Eco-Friendly Products”.

What is the Law on Promoting Green Purchasing?

Green Purchasing means purchasing goods with a minimum

environmental load by taking the impact on the environment and the

extent of the necessity into consideration. The Law on Promoting Green

Purchasing was introduced in April 2001 and national and public

institutions took the initiative to promote Green Purchasing. By

providing useful information about environmental friendly products, etc.,

it aims to change the structure of the demand and to build a sustainable

society with a continuous progress. It also stipulates the obligations not

only of national level institutions but also of local public organizations,

business owners and citizens.

Conducting the Survey of the Suppliers’ Green Procurement

CMP surveys the status of the ISO 14001 certification granted to raw

material manufacturers from whom CMP has already purchased a fixed

amount to learn their approach to environmental issues. 43 percent of

the manufacturers surveyed were already certified. CMP continues to

work on uncertified manufacturers to apply for the ISO certification.

Green Purchasing

CMP promotes the purchasing of goods in compliance with the Law on

Promoting Green Purchasing.

Purchasing policy

Our Purchasing Division always looks for new businesspartners and maintains an open policy.

Open policy 1

Fairness2

Our Purchasing Div. abides by every applicable law and regulation to the purchasing business.

Law-abiding principle3

Our Purchasing Div. promotes mutual trust with business partners following our fair purchasing policy.

Mutual trust4

Our Purchasing Div. contributes to the benefit of society through purchasing and bearing environmental conservation in mind.

Conserving the environment 5

Our Purchasing Div. assesses quality, price, delivery schedule, reliable supply and technical service together and selects our business partners fairly.


24

The total cost for environmental protection in 2009 was 313 million yen

for investment and 1.65 billion yen for expense. The investment was

used for VOC measures, recycling of industrial waste and streamlining

energy consumption. The energy and water used for business activity

were reduced due to the physical effect of the measures taken. We will

further promote the reduction of energy consumption; setting a target

based on the ISO 14001 management system in future.

Summary of Efforts and Results in FY2009


CMP keeps track of the expenses associated with investment in environmental conservation, evaluates the costs versus the benefits and publicly reports this information.

Sites covered:For Environmental Conservation Costs: Kyushu Factory, Shiga Factory, Technical Center(Otake)For Effects on Environmental Conservation and Economic Results: Kyushu Factory, Shiga Factory

Period covered: From April 1st, 2009 to March 31st, 2010

Environmental Accounting Policy

1

2

3

4

In reference to the Ministry of the Environment’s “Environmental Accounting Guidelines (2005 Edition)”, the below data has been collected based on our “Policy for Environmental Accounting”.

Economical results have been figured out based on realistic reasons only and exclude hypothetical ones such as potential benefits by risk aversion.

Environmental Conservation Costs

Effects on Environmental Conservation (*2)

Economic Benefits (*4)

Business activity costs

Preventing pollution of air, water, noise, etc.

Prevention of global warming, etc.

Waste reduction and recycling, etc.

Expenses for the promotion of environmental safety, management of maintenance of ISO certification and monitoring & measurement

Development of environmental products

Contribution to society, etc.

Costs for the restoration of nature, for the recovery of environmental damage caused by production activities, etc.

31

4

69105

110

1,3892

0

1,605

Antipollution costs

Global environmental conservation costs

Resource recycling costs

Categories Main activities Investments Expenses

FY2010

Effects

Effects in business activities

Effects on invested resources

Other effects on environmental conservation

Effects on environmental loads and waste reduction

Energy usage (GJ)

Water usage (1000m3)

CO2 emissions (ton-CO2)

Pollutant release (ton) (*3)

Waste generation (ton)

CO2 Emissions from Transportation (ton-CO2)

Freight (Products) Transportation (1000 tons)

6

7

1,011

0

-19

181

-567

Effects

Benefits

Cost reduction

Total

0.8

6.9

0.7

8.3

FY2009

Units: million yen

(Units: million yen)

*2) The environmental conservation effect was calculated by comparison with the production volume in FY2008.Environmental Conservation Effect = FY2008 Environmental Load × (FY2009 Production Volume/FY2008 Production Volume) - FY2009 Environmental Load

*3) Chemical Substances subject to the first kind of the PRTR Law

Proceeds from recycling

Cost reductions from energy saving

Cost reductions from water saving

*4) The environmental conservation effect was calculated by comparisonwith the production volume in FY2008.Cost saved = Cost in FY2008×(FY2009 Production Volume/FY2008Production Volume) - Cost in FY2009

*1) R&D cost = [Total R&D costs] × [Research staff ratio]

Subtotal

Administration costs

Research and development costs (*1)

Social activity costs

Environmental remediation costs

Total

172

6

19198

20

950

0

313

Reductions

FY2009


Chemical substance management

25

Product information

MSDS

TDS（Technical Data Sheet / Product manual）

Labels

Law information for exporting country

Business Location information

PRTR data

VOC data

Waste material data

Chemical substance information

Import of chemical substances and paints (preparation)

Export of chemical substances and paints (preparation)

Production of paints (preparation)

Shipment of paints (preparation)

Management system

Raw material / Procurement

Product quality control

Production

Sales

Use / Specification

LC process


Having introduced the chemical substance management system, CMP continues to put efforts into domestic environmental

conservation and strong management for product safety. The CMP management system enables safety information provided from raw

material suppliers and information of laws and regulations to be processed, and such information is then rapidly offered to customers

when necessary. Not only in Japan but also in overseas subsidiaries, CMP continues to develop the system.

Information management for the safety of handling, using and disposing of chemical substances

What is MSDS?

MSDS (Material Safety Data Sheet) describes the characteristics and handling information of chemicals. In case the ownership of chemicals or products containing chemicals is transferred to another party, the MSDS should be presented.

MSDS example of one of the CMP products

Raw materialinformation

Laws and regulationsinformation

Formula data

Product sales data

Exposure environment data

26

60

50

40

30

20

10

0.06

0.05

0.04

0.03

0.02

0.01

0.00

4,000

3,000

2,000

1,000

4.0

3.0

2.0

1.0

005 06 09 10(Target)07 08 05 06 09 10(Target)07 08(FY)

0

(FY)

0

CMP sets reduction target to use PRTR harmful substance and promotes its reduction plan. Further CMP promotes pro-active actions to reduce all kind of VOC in response to the anti-air pollution law. In 2005 our sales was increasing by 6% and product mix to meet customers' request resulted in missing targets for some products. For tar-contained paints, however, CMP decided to pull it off the list and stopped its sales in April 2006.

In compliance to PRTR & other regulations, and responding to the suggestions by the Japan Paint Manufacturers Association, CMP administers control of selected chemical substance as next environmental load reduction target.

Reduction target of harmful substance

Sites covered: Kyushu Factory, Shiga Factory and overseas factories

Usage (Kyushu Factory, Shiga Factory)

Usage (Overseas factories)

Content Ratio (Kyushu Factory, Shiga Factory)

Content Ratio (Kyushu Factory, Shiga Factory and overseas factories)

The amount of toluene, xylene and ethyl benzene used for products has

decreased both in Japan and overseas. The total amount of these substances

contained in products is almost equivalent to that of 2008. CMP continues its

effort to reduce the consumption through the promotion of the VOC Reduction

Project.

Toluene, Xylene and Ethyl Benzene contained in the products sold

The amount of lead and chromium compounds (compounds containing lead or

chromium) used for products has decreased by 20 tons in Japan and increased

by 30 tons overseas from the 2008 level. The amount of these substances

contained in products sold is decreasing in Japan, but has increased overall.

Lead/Chrome Compound contained in the products sold

The content rate of environmental hormone has stayed flat since 2006. CMP

continues the replacement of products containing environmental hormones

with other environmentally conscious products.

Environmental Hormones (Endocrine Disrupter) contained in the products sold

CMP voluntarily terminated the manufacturing and selling of tar contained

products in the domestic market in April 2006. Furthermore, we started to take

the same action in the overseas markets in 2008 and reduced such products

by 30 tons compared to 2008FY.

Tar contained in the products sold

05 06 09 10(Target)

(FY)

07 080

60

50

40

30

20

10

25

20

15

10

5

0

Con

tent

in P

rodu

cts

(%)

Usa

ge (

1,00

0 to

n)

0

400

300

200

100

0.25

0.20

0.15

0.10

0.05

0.0005 06 09 10(Target)07 08

(FY)C

onte

nt in

Pro

duct

s (%

)

Usa

ge (

ton)

Con

tent

in P

rodu

cts

(%)

Usa

ge (

ton)

Con

tent

in P

rodu

cts

(%)

Usa

ge (

ton)


27


Waste water treatment facility Dust collector (front) and air intake & exhaust equipment (behind)

Material Balance

Transaction volume of PRTR-registered

substance

21,143 tons (100%)

Emissions released into air

95 tons (0.45%)

Consumption

20,964 tons (99.15%)

Transferred amount

84 tons (0.40%)

Paint Production

PRTR is a system which requires chemical manufacturers to locate source of harmful chemical substance, measure its emission in the environment and its disposal outside manufacturing factory contained in industrial wastes, collect data, summarize and announce its report. Business owners who manufacture or use PRTR chemicals are required to measure and report volume of emissions into the environment and volume transferred as industrial wastes out of the premise to administrative offices once a year. Administrative offices sort, summarize and publish the collected data. By acting on the PRTR, we are able to learn kindss of chemicals, source of origins and volume of emissions. Mandating PRTR is in progress in various foreign countries and in Japan new law to require measuring emission volume of designated chemicals into the air and management improvement, so called “PRTR law” became effective in 1999.

PRTR (Pollutant Release and Transfer Register)

Material Balance of the PRTR Substances

109,771

14,253

114

3,103

882

OUTPUTResearch andDevelopment

1,517

10,830

109,741

6,867

38,176

802,659

15,061

INPUT

Paint Production

■ EnergyTotal fuel usage(Crude oil equivalent) (KL)

Electricity (MWh)

■ Raw Materials

Purchased raw materials (ton)

Other purchased materials (ton)

■ Water Resources

Tap water (m3)

Industrial water (m3)

Underground water (m3)

■ Shipment of Finished Products

Production (ton)

■ Emissions to the Air

CO2 (ton-CO2)

Substances subject to the PRTR Law (ton)

■ Wastes, etc.

Generation of wastes, etc. (ton)

Industrial waste generation (ton)

Procurement

Sites covered: Kyushu Factory, Shiga Factory, Technical Center(Otake), Technical Center(Shiga), Kobe Paints and Ohtake-Meishin Chemical

Sites covered: Kyushu Factory, Shiga Factory, Technical Center(Otake), and Technical Center(Shiga)

Commitment to the reduction of the environmental impact

Transition of emissions discharged into air

Designated chemical names

Water-soluble zinc compound

Antimony and its compounds Polymer of 4,4'-isopropylidenediphenol and 1-chloro-2,3-epoxypropane (liquid);

bisphenol A type epoxy resin (liquid) Ethyl Benzene

Ethylene glycol monomethyl ether (methyl cellosolve)

Xylene

Chromium & Trivalent-Chromium compounds

3,3'-Dichloro-4,4' diamino diphenyl methane 3-(3,4-dichlorophenyl)-1,1-dimethylurea; diuron; DCMU

Styrene

1,3,5-tris(2,3-epoxypropyl)-1,3,5-triazine-2,4,6(1H,3H,5H)-trione

1,3,5-Trimethyl-Benzene

Toluene

Lead compound

N,N'-ethylenebis(thiocarbamoylthiozinc) bis(N,N-dimethyldithiocarbamate);

polycarbamate Phenol

Di-n-butyl phthalate

Bis(2-ethylhexyl) phthalate

Boron and boron-containing compound

Molybdenum and molybdenum-containing compound

Release and Transfer of Substances Regulated by the PRTR Law

Release and Transfer of Substances regulated by the PRTR Law

Eighteen among the 354 PRTR substances designated by the government became subjects of notification (according to the record of 2009) in 2010. Three substances of Xylene, Toluene and Ethyl benzene comprise 99.9% of the total emission to the air from CMP. Just as in 2009, no emission to the aquatic environment and soil was observed.

0908070605040302010

250

200

150

100

50

(FY)

Transition of the amount of usage to the amount of emission to the air

Sites covered: Kyushu Factory, Shiga Factory, Technical Center(Otake), and Technical Center(Shiga)

（ｔ）

1

25

30

40

45

63

68

120

129

177

218

224

227

230

250

266

270

272

304

346

0

0

0

33,840

0

51,630

0

0

0

38

0

112

13,200

0

0

0

0

0

0

0

0

0

0

31,660

3

50,070

0

0

0

14

0

86

13,500

0

0

0

0

0

0

0

40

170

4,000

25,400

0

41,000

26

160

5

140

36

164

5,900

31

80

36

32

170

3

330

49

75

4,100

27,080

26

43,700

30

170

2

65

0

41

7,720

32

37

19

0

210

1

420

40

170

4,000

59,240

0

92,630

26

160

5

178

36

276

19,100

31

80

36

32

170

3

330

49

75

4,100

58,740

29

93,770

30

170

2

79

0

127

21,220

32

37

19

0

210

1

420

Toluene Xylene Ethyl Benzene

1-Butanol Ethyl acetate

Transaction volume

(FY)

0

12,000

10,000

8,000

6,000

4,000

2,000

0201 03 04 05 06 07 08 09

（ｔ）

(FY)

0201 03 04 05 07

Emissions released into air

0

70

60

50

40

30

20

10

08 09

（ｔ）

06

Serial numberof chemicalsubstance 2009 (FY)

Emission into the air Transfer to outside the premise

(Unit: kg)

Total volume

Emission volume Transfer volume

28

2008 (FY) 2009 (FY) 2008 (FY) 2009 (FY)2008 (FY)


29

Waste Reduction

Reduction of odor

CMP sets and follows the following action targets.

CMP targets zero emission of industrial waste in order to promote a recycling-oriented society. CMP continues its effort of recycling and reutilization of industrial waste generated in the domestic and overseas affiliated companies which leads to the reduction of the amount of disposed industrial waste.

CMP strives to reduce emissions and drifts of VOC (volatile organic compounds) in the air. In 2009, deodorization equipment was installed in our Kyushu Factory. We are striving to reduce VOC emissions as well as odors in the vicinity.

Changes in the amounts of external intermediate and final disposals

Changes in the volume of wastes

Sites covered: Kyushu Factory, Shiga Factory, Technical Center(Otake), Technical Center(Shiga), Kobe Paints and Ohtake-Meishin Chemical

Charcoal produced from waste pallets (CMP donates it to NPOs and autonomous communities)

IBC System

Changes in the recycling ratio of wastes

■ To promote zero emission (zero industrial wastes disposal)

■ To promote recycling paint containers and raw material drums by means of IBC system

■ To reuse cleaning solvents

■ To reduce wastes oil disposal (targeting lower unit wastes generation than last year)

■ To sort recycled paper

■ To fractionate solvents and increase recycling ratio

■ To compact waste plastic

■ To promote recycling resources utilizing flexible container package in stead of paper bags

■ To reuse waste pallets or waste drums on toll basis

Deodorization equipment (Kyushu Factory)


(FY)0

3,000

2,500

2,000

1,500

1,000

500

05 06 07 08 09

Dis

posa

l am

ount

(to

n)

The volume of wastes

(FY)

100

90

80

70

60

50

4005 06 07 08 09

The recycling ratio of wastes

The

rec

yclin

g ra

tio o

f was

tes

(%)

The amounts of external intermediateand final disposals

(FY)0

1,600

1,400

1,200

1,000

800

600

400

200

05 06 07 08 09

Dis

posa

l am

ount

(to

n)

Environmental Impact data by offices or factories

30

Domestic offices and subsidiaries

Overseas subsidiaries and affiliates

21,326

773

13

1,703

572

81

15

15,061

751

13

1,222

688

78

7

70,749

888

40

1,961

733

17

61

65,297

835

40

1,267

1,102

17

74

10,670

469

1,011

98

0.6

2.2

7,033

473

1,240

93

0.6

2.4

4,193

274

25

610

298

15

19

4,820

257

26

410

368

14

25

827,325

1,927

80

4,853

854

5

176

763,685

1,971

95

5,285

853

4

202

2008 2009 2008 2009 2008 2009 2008 2009 2008 2009

60,500

3,113

33

7,138

1,181

57,917

2,397

33

5,466

1,821

50,260

539

19

1,222

1,147

38,364

306

25

673

458

5,596

540

20

1,188

228

7,558

697

20

1,559

236

8,884

154

14

332

648

7,918

137

14

295

566

7,181

378

22

829

472

2,868

273

31

594

276

2008 2009 2008 2009 2008 2009 2008 2009 2008 2009

5,512

414

100

921

340

5,517

347

107

774

259

2,215

79

55

176

47

3,690

70

41

152

29

7,238

227

42

466

268

6,146

215

48

442

177

1,645

159

82

363

28

3,813

123

63

267

39

2008 2009 2008 2009 2008 2009 2008 2009

Items

Water used (ton)Amount of energy usage(crude oil equivalent, kL)Energy consumption per production unit (L/ton)



Substances subject to the PRTR Law

FY

Emission volume (ton)Disposal amounts (ton)

Kyushu FactoryFactory, Technical Center

(Shiga)Technical Center

(Otake) Kobe Paints, Ltd. Ohtake-Meishin Chemical Co., Ltd.

CHUGOKU MARINE PAINTS(SHANGHAI), LTD.

CHUGOKU MARINE PAINTS(GUANGDONG), LTD.

CHUGOKU SAMHWAPAINTS, LTD.

TOA-CHUGOKU PAINTSCO., LTD.

CHUGOKU PAINTS(MALAYSIA) SDN. BHD.

Shanghai Guangdong Korea Thailand Malaysia

Items




FY

P.T. CHUGOKU PAINTSINDONESIA

CHUGOKU PAINTS B.V. CMP COATINGS, INC.CHUGOKU MARINE PAINTS(SINGAPORE) PTE. LTD.

Singapore Indonesia Netherlands U.S.A.

Items




FY


Environmental Management System

31

We are establishing an environmental management system to reduce the environmental impact which may be generated from our production, development and products and have obtained an ISO 14001 certificate as shown below. All of CMP and its group companies will continue to be actively involved in activities to reduce the environmental load.

ISO14001


■ Registerd OrganizationCHUGOKU MARINE PAINTS, LTD.SHIGA WORKS

■ Environmental Management System StandardsJIS Q 14001:2004, ISO 14001:2004

■ The Scope of the Registration

The EMS to promote 1.Waste reduction and recycling in production process

(solvent, cans, etc.)2.Proper control of hazardous materials (lead compound, etc.)3.Energy conservation (electricity, fuels, etc.)4.Research on the paint formulation for reducing environmental impact

(toluene, xylene, content, etc.)on development, design and production of Wood finish coating, Heavy duty coating and Siding board coating.

Certificate of Registration Appendix to the Certificate of Registration

Certificate of Registration Appendix to the Certificate of Registration

■ Registerd OrganizationCHUGOKU MARINE PAINTS, LTD.KYUSHU FACTORY

■ Environmental Management System StandardsISO 14001:2004, JIS Q 14001:2004

■ The Scope of the RegistrationProduction of paints for ships and steel structures (Anti-corrosive paints, anti-fouling paints) and anti-fouling paints for fish nets.

ISO 14001 RegistrationCHUGOKU MARINE PAINTS, LTD. Shiga Factory

CHUGOKU MARINE PAINTS, LTD. Kyushu Factory

CHUGOKU SAMHWA PAINTS, LTD.

ISO 9001 RegistrationCHUGOKU MARINE PAINTS, LTD. Marine Coatings Div.

CHUGOKU MARINE PAINTS, LTD. Industrial Coatings Div.

OHTAKE-MEISHIN CHEMICAL CO., LTD

CHUGOKU SAMHWA PAINTS., LTD.

TOA-CHUGOKU PAINTS CO., LTD.

CHUGOKU PAINTS B.V.

CHUGOKU MARINE PAINTS (SHANGHAI), LTD.

CHUGOKU MARINE PAINTS (GUANGDONG), LTD.


CHUGOKU MARINE PAINTS (SINGAPORE) PTE. LTD.

P.T. CHUGOKU PAINTS INDONESIA

Japan

Korea

Japan

Korea

Thailand

Netherlands

China

Malaysia

Singapore

Indonesia

Status Report of ISO Registration (As of August 1, 2010)

32

Targets & means to achieve environmental protection

Targets for 2010 and the result of 2009

SHIGA FACTORY

KYUSHU FACTORY

Promotion of activities for improvement (Environmental load reduction: 3 cases )

Product development to reduce the environmental burdens (15% increase of water-based paint production, 10% increase of solvent-free paint production)

Environmental risk reduction (Provided training/education for employees who are in severe environments. This included conducting emergency training)

Education improvement (total upgrade)

Industrial waste reduction (5% reduction of waste oil compared to 2007)

Energy reduction (Electric power: 5% reduction compared to 2006, heating oil: 2% reduction compared to 2008)

Promotion of activities for improvement (Environmental load reduction: 3 cases )

Environmental risk reduction (Provided training/education for employees who are in severe environments. This included conducting emergency training)

Communication with local community (cleanup activities in the region, and information disclosure to local residents)

Communication with local community (cleanup activities in the region, and information disclosure to local residents)

Weekly “5S” practice

Improvement in transportation (5% increase of JR transportation)

Reduction of industrial waste (5% increase of re-use)

Reduction of VOC emission (Installation and operation of solvent removing equipment in September)

5S activity (seiri, seiton, seisou, seiketsu and shitsuke = sort, systematize, sweep, sanitize and discipline)　(Implemented weekly)

Reviewing transportation method (2% more transportation by JR than by trucks)

Industrial waste reduction (2% of wood residue should be reused)

Reduction of consumable supplies (2% reduction of paper cups and paper towels, replacement of gear pump)

2 of 8 proposals have been achieved, and 5 are ongoing.

Increasing the production of water-based paints has not been achieved. Reduction of hazardous chemical substances has been achieved.

Emergency training was conducted. No environmental accident occurred. Nothing abnormal was detected in oil membrane and pH by sensors.

External training increased by 35%.Internal training remained at the previous year's level.

A clean-up activity outside the factory was carried out once a month. Participated in the event presented by the local governmental agent.

Slightly increased (Review required)

Electricity consumption increased slightly. Oil consumption decreased by 20%.

Carried out once a week.

11.6% up

Started in July. The reuse rate increased by 1.9%.

Deodorizing equipment was installed in September.Actual operation started in October.

Targets (2010 FY) Results (2009 FY) Targets (2009 FY)

1

2

3

4

5

6

7

1

2

3

4

Reduction of the environmental impact of paints (reduction of environmental toxins and substances hazardous to health)

Waste reduction (2 and 5% reductions in waste oil and special industrial waste respectively compared to the 2009 level)

CO2 reduction (understanding of total CO2 emissions, total electricity consumption: 2% less than the 2009 level)

Environmental education and training

CMP conducts environmental seminars and trainings under itsprogram.

Environmental education and training

Status of implementation

Seminar on the revised Law concerning the Rational Use of Energy

Watching the video “Understanding and preparing for natural disasters”

Watching the video “This is it! Countermeasures against earthquake to be promoted in the workplace”

Participation in training for water quality deterioration prevention

Education of safe operation of forklift and platter

Education of measures against abnormal reactions

Safety education for transporters engaged

Education to comply with the Act for the Prevention of Marine Pollution and Maritime Disasters

Visited industrial waste disposers and encouraged them to comply fully with emission rules.

CMP conducts seminars and training of Internal auditors according to the plan in order for improving the environmental management system.

Training of Internal environmental auditors

CMP encourages its staff to obtain the qualification for environmental preservation such as pollution control manager and dangerous object handler, and our staff obtain such qualification in a planned manner.

Official qualification regarding the environment


Prevention of Global Warming

33

Reduction of Carbon Dioxide Emission

Domestic factories and affiliates with manufacturing facilities in Japan strive to reduce CO2 emissions, with those at the production stage reduced by 10% in 2009 from the 2008 level. The basic unit is 75kg-CO2/t, 4% down from the 2008 level. Overseas, the basic unit increased due to the production decline. As one of the office activities, CMP took part in “Team Minus 6% (current “Challenge 25 Campaign”)” in July 2008 and encouraged the proper adjustment of room temperature and “cool biz”.

Domestic

Overseas


Kyushu Factory, Shiga Factory, Technical Center(Otake), Technical Center(Shiga), Kobe Paints and Ohtake-Meishin Chemical

The emission of greenhouse gasses in 2009 was calculated based on the Law for Promotion of Countermeasures against Global Warming as Amended.

Sites covered 1

2

CMP installed a solar power generation system with a power output of 10 kW in March 2008. CMP conducts a long term verification test (for four years) as a subsidized project by NEF (*NEF:New Energy Foundation).

Installment of a Solar Power Generation System

Under the Act Concerning the Rational Use of Energy revised recently, shipping companies are obligated to reduce energy consumption per unit of output (energy consumption per transported weight). As means of transportation, CMP promotes modal shifts from using trucks to transportation by railroad or ships, which have lower CO2 emissions and a higher loading ratio.

Reducing CO2 Emissions from Transportation

CMP and its group companies are switching their commercial vehicles to low fuel consumption vehicles.

Switching of company cars to low emission vehicles

Transition of Energy ConsumptionTransition of CO2 Emission (including purchased electric power)

CO2 Emission per production unit Carbon Dioxide Emission Energy Consumption per production unit Energy consumption

05 06 07 08

160

150

140

130

120

110

100

1500

1400

1300

1200

（TJ）（KJ/kg）

09

Ene

rgy

cons

umpt

ion

Ene

rgy

Con

sum

ptio

npe

r pr

oduc

tion

unit

05 06 07 08

250

200

150

100

50

0

1200

1000

800

600

400

200

0

（TJ）（KJ/kg）

09

Ene

rgy

Con

sum

ptio

npe

r pr

oduc

tion

unit

Ene

rgy

cons

umpt

ion

（kg-CO2/t）

05 06 07 08 090

14000

12000

10000

8000

6000

4000

2000

0

80

70

60

50

40

30

20

10

（t-CO2）

CO

2 E

mis

sion

per

pro

duct

ion

unit

Car

bon

Dio

xide

Em

issi

on

05 06 07 08

11000

10000

9000

8000

7000

6000

5000

4000

3000

95

90

85

80

75

70

65

60

（t-CO2）（kg-CO2/t）

09 CO

2 E

mis

sion

per

pro

duct

ion

unit

Car

bon

Dio

xide

Em

issi

on

Disaster and Accident Prevention

34

Safety Measures at Factories

Disaster prevention training（Kyushu） Disaster prevention training（Kyushu）

Firefighting Training (Shiga) Comprehensive Disaster Training (Shiga)

CMP regularly carries out maintenance work at its facilities to prevent accidents. In 2009, we focused on countermeasures against static electricity accident prevention during loading / unloading and beautification of factories. To verify these activities, inspection was carried out in 2 factories. CMP continues its improvement in reviewing the operational rules and manuals and checking of items.

Firefighting Training (Otake) Firefighting Training (Kobe Paints)

Firefighting Training (Ohtake-Meishin) Firefighting Training (Ohtake-Meishin)

Cases of Possible Emergency Circumstance

Air pollution by static electricity-induced fire

Outflows of hazardous materials or paints from a damaged raw material warehouse or products warehouse caused by a natural disaster

Leaks or outflows of hazardous materials caused by inappropriate transportation of raw materials

Air pollution caused by fires triggered by an abnormal reaction during the manufacturing process

Eruptions, leakages and discharges of toxic gas caused by inappropriate storage of wastes

Leaks and outflows of hazardous materials and paints caused by damage to an outdoor storage

Leaks and outflows of paints caused by a damaged production line

Disaster Prevention Training

CMP established the “Emergency Action Plan” and periodically conducts trainings to prevent the environmental pollution in case of an emergency circumstance happens.

Disaster prevention training (for earthquake) (September 2009)

Fire prevention training (November 2009)

Training for measures against abnormal response (August 2009)

Firefighting Training (May and November 2009)

Comprehensive Disaster Training (September 2009)

Firefighting training (October 2009 and March 2010)

Firefighting Training (December 2009)

Firefighting Training (April and November 2009)Training of Making Emergency Calls (July and November 2009)

KyushuFactory

Shiga (Factory and Technical Center)

Kobe Paints

Ohtake-MeishinChemical Co., Ltd.

Otake (Technical Center)


Together with Customers

35

Social Performance

Product safety

Product safety

“CMP’s Policy of Consumer Protection”From the standpoint of consumer protection, CMP always gives consideration to the environment, safety and health not only during the development stage of new products but also for existing products, and develops and improves products and technology which are safe andfriendly to mankind with less impact on the global environment.

Providing Safety Information on the products

To help customers use the paint products safely, CMP provides warnings and other information in MSDS (Material Safety Data Sheet), product catalogues and on container labels.

Responding to GHS

GHS, “Globally Harmonized System of Classification and Labeling of Chemicals” is an internationally agreed system to classify chemicals according to the kind and extent of hazard. Such classified information is displayed on labels for easy understanding and a MSDS is provided. CMP has modified its labeling in conformity with GHS in conjunction with enforcement of the Amended Industrial Safety and Health Law in December 2006, and has issued GHS-compliant MSDS since August 2007. From the aspect of placing a greater emphasis on regulatory compliance, CMP reviews the descriptions of such labels periodically and updates them with new information.

Labels

Manual for the maintenance painting (Japanese, English & Chinese version, 165(H)90(W)mm, 64 pages)

Maintenance painting manual is to instruct the basics of safe & proper handlings of CMP products simply together with illustrations.

36

Quality Assurance

Quality Assurance Policy

Under these three policies regarding manufacturing stipulated in CMP’s “Basic Management Guideline”, each section concerned establishes the quality guideline through ISO 9001 activities and promotes quality assurance activities to comply with the specifications.

Maintain the highest product quality and secure the confidence and satisfaction of our customers.

Promote consistent technical innovation and new product development from a global point of view.

Promote an operational standardization, adapted to the environment, within CMP to run the systematic management and business activities.

Activities for Quality Assurance

By complying with ISO 9001, and additionally to the company rule, CMP promotes the continuous improvement of the quality management system and its activity.

Quality Assurance Management System

By aiming at the improvement of customers’ satisfaction, CMP runssystems in a way to satisfy the needs of customers all the time. CMP tries to provide products and services which can satisfy customers with the help of our Customer Service Section and by appropriate responses from our staff in charge to opinions or inquiries rendered by customers. Besides, CMP asks customers to give response to “Questionnaires” periodically, then analyzes their answers and utilizes them to improve the customers’ satisfaction.

Outline of the Quality Management System

Quality Assurance Dept.

Shiga Quality Assurance Group

Otake Quality Assurance Group

Production Headquater



37

Contributions to the Society

Offered parking lot for “Yoshinogari Yume Roman Pickup Truck Market” (Kyushu Factory)

Since March 2010, the Yoshinogari Yume Roman Pickup Truck

Market has been held on the first Sunday of each month. The staff

parking lot of the Kyushu Factory is offered for this market where

local farm products and handicrafts are sold on the back of more

than 100 trucks.37

Factory tour (Shiga Factory)

CMP welcomes visitors to our factory tour to give them more insight into our business activities. On October 26, 2009, 18 first-year students of a local high school visited the Shiga Factory to observe the manufacturing process and participate in the lecture presentation.

Donation for local festival (Kyushu Factory)

CMP made a donation to the Flame Festival in October 2009 and to the Sefuri Senbo Festival in November 2009 presented by Yoshinogari-cho.

Donated paints for Busan Japanese School building (Korea)

CMP and CHUGOKU SAMHWA PAINTS, LTD. have been donat-ing pa in ts to revamp the Busan Japanese School for a long period. Paint donated in the summer of 2009 was used for classrooms and stairs.

Yoshinogari site and Kyushu FactoryCMP Kyushu Factory is located in Yoshinogari-cho, Kanzaki-gun, Saga Prefecture, near the largest site of an ancient village in Japan. The town is one of the national special historic sites, said to have been Yamataikoku and full of ancient charm. In Yoshinogari-cho, CMP carries out activities focusing on communication with local people and environmental measures.

Yoshinogari site view from the Kyushu Factory

Donated paints to Yacht Aid Japan

CMP has been donating paints for yachts to the Japan Association of Disabled Sailing (JADS), which has promoted sailing for disabled people since 1995.

Participation in “Trash Zero Operation” (Shiga Factory)

Ten staff members of the Shiga Factory participated in the “Lake Biwa Cleaning Activity” presented by the Yasu city government on June 7, 2009. They collected trash and drifting waste and removed grass mainly at the lakeside.

Social Performance

Scholarship for primary school (Korea)

CHUGOKU SAMWHA PAINTS, LTD., having its office in Busan and its factory in Gyeongnam, Korea, provided scholarship at the graduation of elementary school to support the local school educa-tion.

Participating in “Ecocap Movement” (Tokyo Office)

CMP Tokyo office takes part in the NPO activity, Ecocap Movement with the slogan “Provide vaccination for children around the world”.

38

Communication session with neighboring children (Thailand)

One of our group companies, TOA-CHUGOKU PAINTS CO., LTD. supports the education of local children every year. In 2009, CMP gave presents to children in the neighborhood and held a commu-nication session with them.

TOA-CHUGOKU PAINTS also offered paints for building to the local elementary school and carried out volunteer painting.

Other local contribution activities

● Donation to the local high school for participation in the sports event (Shiga)

● Donation to the village near the factory (Korea)

● Donation of oil for heating to the senior care home near the factory (Korea)

● Sponsorship of the triathlon event held by the local community (Netherlands)

A seal taking a nap on the rudder coated with CMP Bioclean.

A seal is taking a nap on the rudder coated with CMP BIOCCLEAN (See p.13). This photograph was taken in Turkey. The seal initially slept on the helm under the sea, but came above the water as the freight was unloaded. He is sleeping peacefully as if aware that CMP BIOCLEAN is free of anti-fouling agent and environmentally friendly. After a while, the seal awoke and returned to the sea.

Support for the activities of CliniClowns Foundation (Netherlands)

CHUGOKU PAINTS B.V. provides support for the activities of “CliniClowns Foundation the Netherlands”, the charity group which helps children who are suffering from serious diseases and handi-caps.



39

Beautification in the premise of factories

CMP continues greening and beautification in the premise of factories and research centers every year.

CHUGOKU MARINE PAINTS(SHANGHAI), LTD.


Kyushu Factory

Shiga Factory

Otake（Technical Center, Hiroshima Office)

Shiga FactoryCHUGOKU SAMHWA PAINTS, LTD.

Ohtake-Meishin Chemical Co.,Ltd.Kyushu Factory

Kobe Paints Ltd.

Social Performance

Contributions to the Society

Clean-up Activities

CMP and its group companies are periodically involved in cleaning and beautification activities around plants in the major manufacturing sites of the CMP group.

40

Communications

Presentations at exhibitions

To help customers better understand our products, we introduce our products in domestic and international exhibitions.

Imabari Maritime FairImabari/May 21 to 23, 2009

KORMARINE 2009Korea/October 21 to 24, 2009

Japan International Boat Show 2009Yokohama/March 4 to 7, 2010

Information Disclosure

Publication of the Social & Environmental Report

This is the eighth issue of our environmental report, which was renamed “Social and Environmental Report” in 2008, published to customers, shareholders, governmental agents, and other organizations in Japan and abroad just as last year. Since 2007, the English version has been published on our CMP website.

CMP website http://www.cmp.co.jp


Together with Employees

41

Health CareBenefits

Measures for Lifestyle-Related Diseases

Mental Healthcare Support

Placement of an Automated External Defibrillator

CMP is promoting the placement of AEDs to recover lost cardiac function through convulsion via electric shock. In the Shiga Factory and Technical Center, training in the use of the AED was provided. In the Kyushu factory, training in the use of AED and arrival resuscitation was provided by an emergency life guard of the Kanzaki Fire Department. CMP plans to continue such sessions so that as many employees as possible can handle AEDs.

CMP places priority on securing the health and safety of the employees for a comfortable working environment. In 2009, CMP distributed an “Avoid metabolic syndrome by walking” booklet to all employees to encourage them to check and review their lifestyles and raise awareness of lifestyle-related diseases as part of a health management program for employees. Furthermore, at each business office, the health and safety committee meet periodically. Health administers are assigned and the health control of employees is managed with the advice of industrial doctors. This year CMP had seminars on “Heat stroke” at the Otake and “New Influenza” in the Kyushu as well as a video seminar “Fear of new influenza” in the Shiga.

To promote the awareness of the employees to mental healthcare, CMP tries to raise the consciousness of managers through seminars, and has introduced service windows for “Telephone health counseling” and “Mental healthcare counseling”. From August to September 2009, Mental Healthcare Training was held for all employees. CMP invited an external instructor to explain basic details of mental health, the structure of stresses and how to avoid stresses in order to raise the awareness of employees.

Social Performance

Re-employment system

While the retirement age at CMP is 60 years old, CMP has started　its re-employment system since April 2006 applicable to retirees, if they are willing to work longer and agree to the employment conditions with the company, to allow them to work until the age of 65. CMP intends to transfer veteran’s technical　know-how and techniques to younger generations and utilizes the accumulated knowledge. 78% of CMP retirees in 2009 applied for this system and remain in work today.

Support of the Development of the Next Generation (Child Care Leave, Family Care Leave)

CMP provides a working environment where employees can balance working with their family life. We have established action plans on the basis of the “Law to Promote Measures to Support the Development of the Next Generation” so that workers can select different working styles matching their needs of the various life styles. In the case of Child or Family Care Leave, CMP has set up a system where workers can manage both working and child-care or nursing-care. In 2009, one employee applied for the childcare leave system at CMP.

Prevention of Sexual Harassment

To prevent sexual harassment from happening in work places, CMP has the stipulation in the Company Rules and Regulations and set up a window for consultations & complaint. Moreover, CMP trains its employees for the prevention of sexual harassment with the aid of video programs and seminars for managers and in-house educations.

Benefits Program

In addition to annual paid holidays, CMP provides an “Accumulated paid holiday system” (for medical leave, volunteering, nursing, etc.) and a “Refresh vacation system” for longtime employees. Recreation facilities of CMP are spread in Hokkaido, Hakone, Atami, Izu and Toba, and employees visit and enjoy them in various ways.

Promoting the Employment of People with Disabilities

To promote the employment of people with disabilities, CMP makes efforts to improve the working conditions in each work place. The number of employees with disabilities decreases as they retire, and the hiring rate for people with disabilities was 1.56% in 2009, less than the statutory rate of 1.8%. We will strive to raise this rate over the statutory level.

Labor-Management Relations

CMP has the labor union and participates in its upper tier union, the Japan Federation of Energy and Chemistry Workers Unions. In this way labor and management maintain a harmonious favorable relationship which has been cultivated for a long time.


42

Occupational Safety and Health

Main Activities

We are promoting and managing the health and safety in compliance with the Industrial Safety and Health Act. The beautification of the working places in our factories is considered a particular starting point and everyone at the factories has been involved in pursuing activities with the five themes of arrangement, orderliness, cleaning, cleanliness and discipline. Furthermore, as indicators of environmental cleanliness, we measure the concentration of organic solvent in air, ventilation, lighting, noise and room temperature periodically at the work place. Many of our offices have publicly been acknowledged as excellent working places.

The number of accidents leading to downtime in 2009 was one. There were no accidents without downtime, as opposed to 4 cases in 2008.

CMP’s basic policy is to put the utmost priority on human safety, thus CMP targets zero industrial injuries, and relentlessly promotes awareness of safety first. To implement this basic policy, CMP is reviewing the working procedures and paying attention to the health and safety of employees, customers, residents in communities, and　environmental protection, providing education and training, and　establishing a check system under the “Coatings Care Guideline”.

Improving Operational Condition at Work-Place

CMP removed asbestos from company-owned employees' houses.

Efforts to tackle asbestos issues

To maintain safe working condition at unit working places where Ordinance on Prevention of Organic Solvent Poisoning or Ordinance on Prevention of Hazards Due to Dust are applied, measuring in compliance to the Working Environment Measurements Law is conducted every year. Regarding noise in unit work places classified as Controlling Class-2, ear plugging is mandated to maintain lower noise load on individuals.

Measures against New Influenza

As the new influenza was identified in Mexico in April 2009, CMP adopted infection control measures according to the change of the epidemic situation in Japan and overseas. Immediately after the identification, when employees or family members were diagnosed as infected with the new influenza, CMP obliged the employees concerned to stay at home and other employees to wear masks. We announced information concerning the new influenza and prevention measures on the internal electronic bulletin board to raise awareness of infection control. Each factory and office distributed masks and disinfection solution. Thanks to these efforts, no group infection affecting normal business was identified.

05 06 07 08 09

05 06 07 08 09

0

Frequency rate of accidentFrequency rate of accident/chemical industry average (calendar year)Frequency rate of accident/paint industry average (calendar year)

0 (FY)

(FY)

2.5

2.0

1.5

1.0

0.5

8

7

6

5

4

3

2

1

Occupational accidents at work-place (frequency of accidents) and frequency rate of accident

Sites covered: CMP and subsidiaries & contractors in the company premise (within Japan)

Occupational accidents at work-place (Number of accidents)

Frequency rate of accident

Number of accidents without lost working time

Number of accidents with lost working time

Planning Department, Administration HeadquarterEnvironment Control Department, Production HeadquarterTokyo Club Building, 2-6, Kasumigaseki 3-chome, Chiyoda-ku, Tokyo, 100-0013 JapanPhone:81-(3)3506-3951 Fax:81-(3)5511-8541http://www.cmp.co.jp

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