DOWA CSR REPORT 2017

About the DOWA Group

DOWA has developed five business segments originated from the mining and smelting of copper, zinc, gold and silver.

FY 2016 Financial Highlights

In the FY 2016 financial results, consolidated sales rose 1% year on year to 410.5 billion yen, consolidated operating profit fell 3% to 33.9 billion yen, ordinary profit rose 4% to 36.5 billion yen and consolidated net profit attributable to parent company shareholders rose 20% to 26.1 billion yen. With regards to the business environment for the group, demand for automobile-related products remained comparatively steady both in Japan and overseas, and demand for electronic components and new energy-related products grew mainly in East Asia. As for the market environment, metal prices rose for precious metals and zinc.

(100 million yen)

Business Results 2012 2013 2014 2015 2016
Sales 4,193 4,439 4,642 4,065 4,105
Operating profit 245 317 390 350 339
Recurring profit 272 350 420 350 365
Net profit attributable to
parent company shareholders
152 233 265 218 261

Each mentioned year represents the fiscal period from April 1 to March 31 of the next year.

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FY 2016 Status

Status of Each Business Segment

The DOWA Group has developed a global recycling business consisting of five core business segments.
In the “Smelting business”, in addition to natural resources, we extract useful metals from various recycled materials. The extracted metals go through various processes and are given enhanced functionality in the “Electronic materials business”, the “Metal processing business” and the “Heat treatment business”, after which they are included in final products such as automobiles and electronic devices. The “Environmental management and recycling business” detoxifies waste and separates and recovers metals from used products. The recovered metal is used again as raw material for smelting. Through the development of such a business cycle, in addition to providing high-quality products and services, we are working to resolve social issues such as environmental conservation and resource problems.
Business-wise business overview and the business situation of 2016 are as follows.

Sales
composition ratio* (2016)
Operating profit composition ratio* (2016)

DOWA ECO-SYSTEM CO., LTD.

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Waste treatment business
Processing in an integrated system from collection and transportation of general and industrial waste to intermediate treatment and landfill
Soil remediation business
Provide total support from survey of soil contamination to purification work and monitoring
Recycling business
Collection of valuable metal from used products such as scrap generated production processes in factories, electrical appliances and automobiles

DOWA METALS & MINING CO., LTD.

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Precious metals and copper business
World's leading recycling and smelting that can collect a variety of metals such as gold, silver, and copper
Rare metals business
Recycle of platinum group metals such as platinum from used automobile exhaust gas purification catalysts
Zinc business
Akita smelting boasts to be the largest zinc smelter in Japan, having an annual output of 200,000 tons, and deploys consistent business development from resource development to metal production and sales of processed items

DOWA ELECTRONICS MATERIALS CO., LTD.

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Semiconductor business
Top manufacturer of high-purity gallium indium semiconductor materials, compound semiconductor wafers, and high luminance and high output LED
Electronic materials business
Manufactures silver powder used in new energy applications, copper powder used in electronic components, zinc powder and silver oxide used in batteries etc.
Functional materials business
Manufacturer boasting of world's dominant market share of ferrite powder used in metal powder for archive data-tapes, carrier powder for copiers, printers etc.

DOWA METALTECH CO., LTD.

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Metal processing business
Manufacturing copper, brass, and copper alloys used in terminals and connectors for automobile and semiconductor, and brass bars and forgings
Plating business
Precious metal plating processing of components such as connectors and switches of automobiles
Circuit board business
Manufacturer of metal-ceramic substrates used in power control equipment such as industrial machinery, railway, wind-power generation, and solar power

DOWA THERMOTECH CO., LTD.

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Industrial furnace business
Provides total service from design and erection of furnaces to maintenance, leveraging the know-how of heat treatment processing
Heat treatment processing business
Surface processing operation to increase the abrasion resistance, fatigue resistance and heat resistance of a metal in vehicle engine and gearhead

*Component ratios exclude adjustments

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