Our aim - to be a company that nurtures Greetings the environment

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1 Greetings

Kansai Paint Co., Ltd. understands that environmental

issues are so important, that we need to confront these with

appropriate solutions as part of our business activities.

Examples of our efforts are described in environmental

reports, which we have published annually since 1997.

This, the Environmental Report 2004 complies with the

Environmental Report Guidelines (2003) issued by the

Ministry of the Environment. Additionally, we have attempted

to enhance the contents of the report and disclose more

information regarding environmental and social issues, in

response to the survey results regarding last year's Report.

We hope to hear your opinions and comments on both our

activities, and on the information disclosed in this Report.

Editorial policy

Our mission is to preserve the global environment.

We act, achieve, and challenge.

We carry out our commitment to society with "transparent" management.

As regards preservation of the global environment, we understand our

responsibilities as a coating material manufacturer. We conduct our

business with a consistent philosophy throughout the R&D, material

procurement, manufacturing, sales, and after-sale service divisions, of it

being essential to maintain our established corporate policy and employee

consciousness toward the environment.

We are striving to achieve our fundamental mission of "protecting

resources, preserving the environment, and both building and maintaining

a prosperous society," and on top of this, we are promoting a range of

research and development with the main purpose of reducing the burden on

the environment.

While we carry out our business in full compliance with environmental laws and regulations, we see these environmental

problems as a big business chance in which we can exploit our professional technical capabilities. We have been

promoting a company-wide ISO campaign that includes the technical section, headquarters, and manufacturing

plants, and each operating location has successfully obtained ISO14001 certification. In particular, we have compiled

a thorough "voluntary action plan" that prevents manufacturing plants from generating waste, and we are also

successfully operating newly developed processing systems for waste paints and solvents. Our efforts focus on solving

environmental problems within our organization, in order that we can be a truly ecological company.

Regarding the development of coating materials, one of our largest business chances lies in water-based coatings for

motor vehicles, and we are approaching this from two directions: coating materials, and coating systems. This approach

has resulted in a smooth transition to water-based coating systems, thanks to joint development with automobile

manufacturers both within Japan and overseas. In architecture, coatings to counter sick house syndrome (illnesses

arising from indoor air pollution) have been selling well, bolstered by better understanding of this social problem.

In other fields, we have started to develop a coating material that has solar cell functionality, which uses clean sunlight

energy, and we have already announced some of our achievements in newspapers.

Our environmental activities have been described in detail in the Environmental Report 2004, that can also be browsed at

our homepage.

Kansai Paint Group continues its utmost efforts to protect our environment, and to disclose related information in order

that our activities are widely understood. We thank your continued support and feedback.

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Our aim - to be a company that nurtures the environment through environmental management

June 2004 President

Katsuya Sera

【Related fields】

Environmental aspects and social aspects

【Period】

Data provided herein has been collected in the period

between April 1, 2003 and March 31, 2004. (Latest data

as of April 2004 provided in part.)

【Scope】

Domestic activities by Kansai Paint Co., Ltd. including those

of some affiliated companies

Manufacturing sites*: Amagasaki Plant, Ono Plant, Nagoya

Plant, Hiratsuka Plant, Kanuma Plant

Non-manufacturing sites*: Tokyo Office, R&D Center,

Head Office

(*Including related companies located at the above business sites)

Others: Some affiliated companies

【Future publication plans】

June 2005 (Japanese version)

September 2005 (English version)

1 Greetings

2 Corporate Data

3 Business Locations

4 Environmental Management　1. Corporate Policy on Environmental Conservation

　2. Activities for Responsible Care (RC) and Coating Care

　3. Environmental Conservation (Responsible Care) Organization Chart

　4. ALES ECO PLAN 2005 (2003 environmental goals and list of achievements)

　5. Environmental Accounting

　6. Development of Environment-Friendly Technologies

　7. MSDS

　8. Container Yellow Card

5 Environmental Management System (ISO14001)　 List of Certified Kansai Paint Group Business Establishments

6 Business Activities to Reduce the Environmental Burden　1. Environmental Material Balance

　2. Energy Saving and the Prevention of Global Warming

　3. Measures to Reduce Water Resource Input

　4. Waste Reduction (Reduce, Recycle, Reuse)

　5. Management of Chemical Substances

　6. PRTR Substances' Release and Transfer

　7. Life Cycle Assessment (LCA) Initiatives

　8. Eco-Product Ratio

7 Social Efforts　 Safety and Health Activities

Contents

3 4

2 Corporate Data (As of March 31, 2004) 3 Business Locations

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

��

��

'00 '01 '02 '03

��

�� 49.1％

�� 22.6％

�� 22.8％

�� 5.5％

2003

49.1％

22.8％

5.5

％

22.6％

Head Office

(Chuo-ku, Osaka)

R&D Center

(Hiratsuka, Kanagawa)

Amagasaki Plant

(Amagasaki, Hyogo)

Tokyo Technical & Business Office

(Ohta-ku, Tokyo)

Ono Plant

(Ono, Hyogo)

Tokyo Office

(Shinagawa-ku, Tokyo)

Nagoya Plant

(Miyoshi-cho, Aichi)

Kanuma Plant

(Kanuma, Tochigi)

Hiratsuka Plant

(Hiratsuka, Kanagawa)

Domestic

0

2,000

4,000

6,000

8,000

10,000��

��

��

'00'99 '01 '02 '03

0

50,000

100,000

150,000

200,000

250,000

��

��

'00'99 '01 '02 '03

��

Net sales

Net income

Consolidated sales breakdown by products

Number of employees

Date of Establishment May 17,1918

Capital ¥25,658 million

Number of Employees5,886 (Consolidated)

1,882 (Non-Consolidated)

URL http://www.kansai.co.jp

KANSAI PAINT CO., LTD.

Major Business Locations

Domestic Subsidiaries and Affiliates

Overseas Subsidiaries and Affiliates

Head Office3-6, Fushimi-machi 4-chome, Chuo-ku,

Osaka 541-8523, Japan

Offices Tokyo, Kita-Kyushu

Sales OfficesFukuoka, Hiroshima, Osaka, Nagoya,

Tokyo, Kita-Kanto and others

PlantsAmagasaki, Ono, Nagoya, Hiratsuka,

Kanuma

R&D Center Hiratsuka

(Trade Sales Coatings Group)・KANSAI PAINT SALES CO., LTD.

・KANPE KYOHAN HOKKAIDO CO., LTD.

・KANPE KYOHAN SHIKOKU CO., LTD.

・KANPE KYOHAN KYUSHU CO., LTD.

・NOF KANSAI MARINE COATINGS CO., LTD.

・MIYACHI KASEI CO., LTD.

(Industrial Coatings Group)

(Manufacturing Group)

(Color Matching Group)

・KANPE TRADING CO., LTD.

・KANPE AUTOMOTIVE COATINGS TRADING CO., LTD.

・OHGI SHOKAI CO., LTD.

・NIPPON KAKO TORYO CO., LTD.

・KANPE MIYOSHI COLOR CENTER CO., LTD.

・UTSUNOMIYA CHEMICAL CO., LTD.

・MIYOSHI CHEMICALS, INC.

・KUBOKO PAINT CO., LTD.

・KANPE SERVICE CO., LTD.

・KANPE KANAGAWA COLOR CENTER CO., LTD.

・KANPE ONOMICHI COLOR CENTER CO., LTD.

・KANPE KEIYO COLOR CENTER CO., LTD.

(Shipping Storage)・KANUMA STOREHOUSE CO., LTD.

(Domestic Business Group)・KANPE HAPIO CO., LTD.

・KP WING CO., LTD.

・KANSAI PAINT ENGINEERING CO., LTD.

・KANPE PLANT ENGINEERING CO., LTD.

・KP FINANCE CO., LTD.

・ECO SYSTEMS CO., LTD.

・GOODLASS NEROLAC PAINTS LTD．

・P.T. KANSAI PAINT INDONESIA

・KANSAI PAINT (SINGAPORE) PTE. LTD.

・KANSAI PAINT (ASIA) PTE. LTD.

・SIME KANSAI PAINTS SDN. BHD.

・THAI KANSAI PAINT CO., LTD.

・KANSAI RESIN (THAILAND) CO., LTD.

・KANSAI PAINT PHILIPPINES, INC.

・TAIWAN KANSAI PAINT CO., LTD.

・KANSAI PAINT H.K. LTD.

・TIANJIN COSCO KANSAI PAINT & CHEMICALS CO., LTD.

・SHENYANG KANSAI PAINT CO., LTD.

・SHANGHAI COSCO KANSAI PAINT & CHEMICALS CO., LTD.

・HUNAN KANSAI AUTOMOTIVE COATINGS CO., LTD.

・CHONGQING KANSAI PAINT CO., LTD.

・TIANJIN BEACON KANSAI PAINT CO., LTD.

・KANSAI PAINT (AMERICA), INC.

・DU PONT-KANSAI AUTOMOTIVE COATINGS, CO.

・KANSAI PAINT EUROPE LIMITED

・DU PONT-KANSAI AUTOMOTIVE COATINGS (U.K.) LIMITED

(America)

(Europe)

(Asia)

5 6

Action Policy

Operational Policy

1. Corporate Policy on Environmental Conservation

3 Business Locations 4 Environmental Management

Shenyang Kansai Paint Co., Ltd.

(China)

Shanghai Cosco Kansai Paint &

Chemicals Co., Ltd.

(China)

Sime Kansai Paints Sdn. Bhd.

(Malaysia)

Tianjin Beacon Kansai Paint Co., Ltd.

(China)

Taiwan Kansai Paint Co., Ltd.

(Taiwan)

Kansai Paint (Singapore) Pte. Ltd.

(Singapore)

Tianjin Cosco Kansai Paint &

Chemicals Co., Ltd.

(China)

Thai Kansai Paint Co., Ltd.

(Thailand)

P.T. Kansai Paint Indonesia

(Indonesia)

Chongqing Kansai Paint Co., Ltd.

(China)

Kansai Resin (Thailand) Co., Ltd.

(Thailand)

Goodlass Nerolac Paints Ltd.

(India)

Hunan Kansai Automotive Coatings Co., Ltd.

(China)

In order to achieve our goals concerning protection of the global environment, our company and its employees

cooperatively promote Responsible Care based on the Action Policy.

December 21, 1992

President's Notice No. 80

Kansai Paint and our Group companies are fully aware

of our responsibilities as a social entities, and of our

mission as paint manufacturers. We have established

the following as our basic policies. These policies aim

to secure the protection of the global environment and

ensure human health and safety, while at the same time

living up to expectations of society through positive

participation and contributions.

Basic Policy

Corporate Mission

Overseas

Corporate Policy on Environmental Conservation

To supply products after full consideration of their potential impacts on people and the environment.

To undertake proactive countermeasures to cope with the potential effects of products on people and the

environment.

To cooperate with external organizations to raise awareness concerning the environment, safety, and

health.

To disclose and provide information related to the environment, safety, and health.

1.

2.

3.

4.

To develop new technologies and products with a focus on the maintenance and promotion of environment-

friendliness, and the protection of natural resources.

To promote the wider use of products with a reduced load on the environment.

To reduce waste, and promote recycling and resource recovery.

To reduce energy use and carbon dioxide emissions.

To secure the environment, safety, and health of the workplace, and to reduce solvent emissions.

To strive for the prevention of environmental/safety/health problems stemming from customers' use of

our products.

To educate our employees and related companies regarding environmental/safety/health problems.

To promote Green Procurement, and to promote the purchase of Green Products.

To issue environmental reports.

To disclose environmental/safety/health information regarding our products.

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

To further build company credibility with the public and to

contribute to society, by providing products and services

that achieve customer satisfaction.

To build on our knowledge and strive for technological

innovations, in order to improve the company's performance.

To harness the collective efforts of all individuals,

to maximize the company returns.

1.

2.

3.

7 8

2. Activities for Responsible Care (RC) and Coating Care 3. Environmental Conservation (Responsible Care) Organization Chart

4 Environmental Management 4 Environmental Management

The paint industry calls Responsible Care "Coating

Care," which is one of the activities of the International

Paint & Printing Ink Industry Council (IPPIC). Coating

Care was established in 1992 by seven Manufacturer's

Associations in six countries. The principles of Coating

Care are to promote effective health, safety and

environmental practices through the entire life cycle of

products, from the design stage through to disposal.

In January 2001, Kansai Paint

declared their implementation

of Coating Care, and we are

currently promoting activities

toward this end.

Main activities of Responsible Care

Coating Care

Responsible Care Organization

Environmental ISO 14001 Organization

Kansai Paint Co., Ltd. is a member of the Japan

Chemical Industry Association and Japan Paint Industry

Association. Chemical substances are vital elements in

our lives, however, handing such substances requires

careful consideration in terms of their environmental

burden, personal safety, and personal health.

Chemical industries worldwide are engaging in voluntary

activities to protect our environment, safety, and health

through the entire cycle - from development of chemical

substances through to their disposal.

At Kansai Paint, this kind of voluntary activity is called

the ALES ECO PLAN, under which Responsible Care and

Coating Care are being exercised.

Kansai Paint's declaration for Coating Care

RC Management Review

RC Committee for Company-wide Promotion of Quality Control and Environmental Protection

RC Environmental & Product Safety Committee

RC Environmental Safety/Health Committee

RC User- & Customer-related Environmental Safety Committee

RC Committee

Quality/Environment Officer: Managing Director

Secretariat

Product Quality & Environment Division

Committee Chair: President

[Activities] [Activities] [Activities]��

��

��

��

Automotive Coatings Division

Automotive Refinishes Coatings Division

Industrial Coatings Division

Decorative Coatings Division

Anticorrosive Coatings Division

New Business Division

SD Center

AT Laboratory

CM Laboratory

Technical Planning Department

Energy Conservation Team

Waste Reduction Team

Health Subcommittee

Plants

Business Planning & Administration Division

Information Systems Department

Procurement Division

Supply Chain Management Center

��

��

��

Environment management review by top management of ISO organization

External Audit

Internal Environmental Audit

Head Office

R&D Center

Amagasaki Plant

Ono Plant

Nagoya Plant

Hiratsuka Plant

Kanuma Plant


[Activities]��

��

��

��

��

Communication

Occupational Health and Safety

Chemical and Product Safety

Environmental Preservation

Process Safety and Accident Prevention

Society

ICCA(International Council of Chemical Association)

(Responsible Care)

IPPIC(International Paint & Printing Ink Council)

(Coating Care)

Japan Chemical Industry Association (members: 188 companies & 77 groups)

Japan Paint Industry Association(members: 105 companies & 2 groups)

Coating Care(instituted in 1992)

Japaneseassociations

Internationalassociations

Kansai Paint

ALES ECO PLAN 2005

Japan Responsible Care Council(established in 1995)

Responsible Care declaration (1995)

Coating Care declaration (2002)

Join Join

Join Join

It is recognized that regulations alone can not completely

ensure environmental-friendliness, human safety, and

health. In response to current demands, the world's

chemical industries have begun working on self-imposed

controls to protect the environment,

safety, and health at all stages of

chemical processing, f rom their

development right through to their

disposal . This activ ity is called

"Responsible Care."

Responsible Care

9 10

4. ALES ECO PLAN 2005 (2003 environmental goals and list of achievements)

4 Environmental Management

Activities Objectives 2005 Target 2003 Target 2003 Achievements Evaluation* 2004 Target

To provide products after full consideration of their impact on people and the environment

1.Development of

environment-

friendly

products and

technologies

1) 1st stage reduction materials Reduce usage to 0 50% or more reduction from FY'02 42% (achievement ratio: 84%) ○ Eliminate completely by the end of FY'04

2) Xylene/Toluene usageReduce usage to 18,500 t/yr or

less

20% or more reduction from FY'02

(Reduce usage from 27,900 t to 22,300 t)2% (achievement ratio: 10%) △ Reduce usage to 22,000 t/yr or less

3) Chromium (VI) compounds

usageReduce usage to 149 t/yr or less

40% or more reduction from FY'02

(Reduce usage from 478 t to 287 t)7.2% (achievement ratio: 18%) △ Reduce usage to 225 t/yr or less

4) Lead compounds usage Reduce usage to 241 t/yr or less35% or more reduction from FY'02

(Reduce usage from 732 t to 476 t)419 tons (target achieved) ◎ Reduce usage to 350 t/yr or less

5) Nonylphenol compounds Reduce usage to 1 t/yr or less Reduce usage to 5 t/yr or less 4.2 tons (target achieved) ◎ Reduce usage to 2 t/yr or less

2. Promoting

the usage of

products with

a reduced

environmental

burden

1) Environment-friendly products

ratioEco-products 60% or higher Increase to 48%, 5% up from FY'02 48% (target achieved) ◎ Eco-products 54% or higher

2) Anti-"sick-house syndrome"

coatings

Expand compliant product lines,

including industrial paints

Expand product lines that conform to the Revised

Building Standard Law

Almost completed product lineup for F ☆☆☆☆ and

other classes ○

Expand product lines that conform to the Revised Building

Standard Law

3) Eco-paints for architecture Expand eco-coating product lines Increase volume of eco-products 30% over FY'02 Target achieved ◎ Continue to release environment-friendly products

To undertake proactive measures to remove potential effects of products on people and the environment, and to enhance awareness and cooperation

3. Reduction of

environmental

burden in

operations

1) Energy consumption 2.0% or more reduction from FY'01 1.0% or more reduction from FY'01 0.6% reduction from FY'01 (achievement ratio: 60%) △ 1.5% or more reduction from FY'01

2) CO2 emissions 2.0% or more reduction from FY'01 1.0% or more reduction from FY'01 1.2% reduction from FY'01 (target achieved) ◎ 1.5％ or more reduction from FY'01

3) Waste emissions

(final landfill amount)Zero-emissions achieved by 5 plants 45.0% or more reduction from FY'01 46.1% reduction from FY'01 (target achieved) ◎ 67.5％ or more reduction from FY'01

4) Waste recycling ratio 99% or more of waste generated 95% or more of waste generated in FY'03 96% (target achieved, some reached 100%) ◎ 97.5% or more of waste generated in FY'04

4. Securing

Safety and

Health

1) Number of accidents Aim for zero accidentsEliminate lost-work accidents, and ensure no

accidents or injuries

9 accidents, including 1 lost-work accident, an increase

from 6 last year△ Eliminate lost-work accidents, and ensure no accidents or injuries

2) Workplace environment regarding

organic solvent exposure

Maintains zero Class-2 and -3

workplacesTotal elimination of Class-2 and -3 workplaces One Class-3 workplace △ Total elimination of Class-2 and -3 workplaces

3) Mental health careAim for zero patients with mental

injuries

Promote "health and sanitation subcommittee

meeting" activities, and implement company-wide

and employee education

Instituted mental health operating procedures. Conducted

mental health educational seminars at each business site◎ Promote better understanding of mental health care handling

5. Environmental

Conservation

Activities

1) ISO 14001 activitiesAim for company-wide integrated

activities

Promote new certification of group companies

while keeping maintenance activities

Status maintained or updated by certified plants/offices,

One affiliate company certified in April 2004◎ Consider company-wide integrated activities

2) Preparation of environmental

accountingContinue preparation

Continue to prepare company-wide environmental

accounting (5th edition)Disclosed in Environmental Report 2003 ◎

Continue to prepare company-wide environmental accounting

(6th edition)

3) Ensuring transportation safety Aim for continued full complianceContinued implementation of Container Yellow

Card system

New labeling system implemented

(40% implementation)◎ Full implementation of new labeling system by the end of FY'04

4) Prevention of environmental

pollutionAim for zero complaints

Give top priority to compliance, in order to prevent

pollution and complaintsZero environment-related claims ◎

Give top priority to compliance, in order to prevent pollution and

complaints

6. User- &

Customer-

related

Environmental

Safety

1) Improve the MSDS system Continue timely issuanceImprove systems for faster data supply for MSDS

issuanceHabitual web downloading implemented ◎ Further implementation of advanced data supply systems

2) Improve the PRTR systemOngoing compliance with laws and

regulations

Educate and promote use of the system in Color

Centers (total 35 locations)Color Centers submitted PRTR substances ◎ Improve the PRTR handling system

3) Prevent Product Liability claimsContinue with zero product liability

claims

Take proactive measures against potential

product liability issues, for zero claimsZero PL-related claims ◎

Take proactive measures against potential product liability

issues, for zero claims

7. Disclosure of

Environmental

Information

1) Risk communicationContinue meetings to explain legal

compliance

Continue to hold seminars for distributors, clients,

and administrative agencies regarding law

compliance and coating materials.

50 or more meetings held nationwide ◎

Continue to hold seminars for distributors, clients, and

administrative agencies, regarding law compliance and coating

materials.

2) Publish an "Environmental

Report"Implement continued publishing

Continue issuance of the "Environmental Report

2003" (Japanese 7th year, English 2nd year)

Environmental Report 2003: Japanese and English

versions issued in June and October respectively◎

Continue issuance of the "Environmental Report 2004"

(Japanese 8th year, English 3rd year)

3) Publish an "Annual Report" Implement continued publishing Continue issuance of the "Annual Report" Annual Report 2003 issued ◎ Continue issuance of the "Annual Report"

*【Achievement level】　 ◎ : Approximately 100% or higher　　○ : 70% or higher　　△ : Less than 70%

11 12

The cost of environmental conservation in FY2003

amounted to 4,794 million yen, divided between 283

million yen for capital investment, and 4,511 million yen

for operating costs. (These costs in FY2002 were

4,682 million yen, comprising 397 million yen for capital

investment, and 4,285 million yen for operating costs.)

The capital investment for facilities has dropped by

114 million yen from FY2002, but there has not been

a significant change in the operating costs for our

activities. However, there has been an increase in the

amount of environment-related research carried out by

the R&D Center, resulting in an increase in R&D costs

of 230 million yen over FY2002.

5. Environmental Accounting


Kansai Paint deems environmental activities an

important tool for assisting management, and has been

implementing environmental accounting since 1999,

with the purpose of keeping a good balance between

operating costs incurred by environmental activities,

and environmental conservation effect and economic

activities.

1. Complies with the Environmental Accounting Guidelines 2002 issued by Japan's Ministry of the Environment.

2. Calculates the investment amount for environmental conservation activities and operating costs (including

depreciation), and their effects.

3. Calculates the environmental effect of business activities (physical units) and economic effects of

environmental measures (monetary units).

4. Scope of accounting: five plants, Tokyo Office and R&D Center.

5. Period: April 1, 2003 to March 31, 2004

Category

FY2003

Main activitiesInvestment

Operating

costsTotal

In-house

activities

Pollution

prevention102 244 346

Investment and operating costs required for prevention of pollution

(atmosphere, water, noise, odors, vibration, etc.)

Global

environmental

preservation

104 550 654 Investment and operating costs required for energy savings and

the prevention of global warming

Waste disposal

and recycling67 527 594

Investment and operating costs required for waste reduction and

recycling

Administration costs 10 280 290

Development of environmental management systems

Disclosure of operational environment information

(publishing of environmental reports)

Cost for monitoring the environmental burden

Cost for greening and beautification

R&D costs 0 2,910 2,910 Investment and operating costs required for technical development,

with environmental friendliness as a primary target.

Total 283 4,511 4,794

1) Principles of Environmental Accounting 2003

2) Result of 2003 Activities

(units: million yen)

Progress in environmental conservation is shown

in the table by the reduced amount, and where the

environmental burden produced by our FY2003

business activities is compared with that of the previous

year.

The amount of resources used for business operations

were reduced in all categories when adjusted and

compared with figures for FY2002. Additionally,

quantities of environmental emissions and waste were

also reduced from FY2002 with the exception of one

category, namely soot and dust.

We calculated the economic effects of our environmental

conservation measures by comparing the financial

accounting income achieved in FY2003 with that of the

previous year.

An economic effect of 62 million yen was achieved by

energy-saving and water-saving measures in FY2003.

Waste processing costs, however, were increased by

nine million yen. As a result, a total of 530 million yen

worth of economic effect was achieved.

Since it was first published in 1999, the environmental accounting system has been improved to provide top

management with a better decision-making support tool. The system will be further enhanced to accurately

evaluate environmental management.

3) Environmental Conservation Results

4)Economic Effects of Environmental Conservation

Press release

Category Reductions

Resource conservation results in business activities

Energy usage (crude oil equivalent (kl))

CO2 emissions (tons)

1,110

2,810

Water usage (m3) 52,900

Environmental emissions and waste reduction in business activities

Air pollutants SOx(kg)

NOx(kg)

Soot and dust (kg)

Water pollutants COD（kg）

180

870

▲116

690

Industrial waste Generated (tons)

Externally contracted (tons)

403

283

Category Economic effects

Cost reductions

from energy savings in business locations 43

from reductions in water and sewerage costs 19

from reductions in waste processing costs ▲ 9

Total 53

Note) Economic effects from environmental conservation measures = Previous FY operating costs - Current FY operating costs.

R&D cost breakdown: [R&D costs by R&D Center] x [Research employee ratio] x [Environment-related research theme ratio]

Past environmental damage-related expenses are omitted because this amount was zero for both investment and operating costs.

Note) Effect of environmental conservation was calculated with the adjustment comparison method, compared with the production volume for FY2002 activities.

Effect of environmental conservation (reduced amount)=

[environmental burden of last year x (production of this year/production of last year)] - [environmental burden of this year]

(units: million yen)

13 14

6. Development of Environment-Friendly Technologies


Kansai Paint's Basic Technologies Look to the Future

Kansai Paint's Core Technologies

Kansai Paint's core technologies are represented by

coatings, painting, and coloring technologies. These

element technologies are supported by core techniques

involving polymer synthesis, photochemistry, molecular

cross-linking, and coloring material technologies.

Kansai Paint is expanding its core technologies in

wider applications, in order to add much higher value to

products through surface modification.

Kansai Paint and its group companies have been

dealing with various environmental issues since they

made a declaration on Responsible Care in 1995,

based upon "Company policies regarding environmental

issues" from 1992. Our research themes have since

been focused around low environmental burden,

high-performance, and high-function products and

technologies (coatings materials and coating systems)

in order to conserve resources and the beauty of nature,

as well as to both prevent environmental pollution, and

to promote environmental protection. Our environment-

related research themes account for 70% of our

total R&D subjects, and these are closely connected

with environmental issues. Kansai Paint in the 21st

century aims to be a both corporate citizen and a global

citizen: thus, we sincerely hope that our R&D activities

contribute to the protection of the global environment.

Earth- and Living Environment-FriendlyEnvironment-Protective Coatings

Paintsfor Improving

Living environment

EnvironmentCleaningTechnology

Paint wasterecycle system

RecycleTechnology

ContainerRecycling

All the plants certified with ISO14001

��

・��

・��

��

��

��

��

Kansai Paint R&D Center (Hiratsuka)

Benefits of the new coating system

1. Amounts of VOC are reduced, by using water-

borne intermediate coats and topcoats.

2. The bake process for the intermediate coat is

eliminated, and intermediate coat painting, base

coats, and clear coats are applied in the wet-on-

wet method, achieving shortened process length

and energy savings.

Automobile Coating System Reducing Process and VOC (Volatile Organic Compound)

Process New coating systemCurrent coating system

(using water-borne base coat)

Current coating system

(all solvent-based)

VOC amount (g/L)

Intermediate coat 100～ 200 450～ 550

Base coat 100～ 200 100～ 200 650～ 850

Clear coat 450～ 600

Process length from intermediate coat to

topcoat, excluding topcoat bake (meter)90～ 130 230～ 380 230～ 380

Kansai Paint combines its accumulated technologies

and new ideas in order to develop environmental-

friendly and safe products, and carries out technological

development to support these products.

In the automobile industry, solvent-based intermediate

coats and topcoats for motor vehicles are being

replaced by water-borne coatings to comply with the

VOC specifications and RPTR laws. We were proud to

say that we have successfully developed a water-borne

coating system that is kind to the environment.

Comparison between new and current coating systems

Coating layer of motor vehicles

Polymersynthesis

Polymercross-linking

Computersimulation

Light energy

Coloring materials

Biotechnology

Surfacecontrol

Engineering

Analysis

Rheologicalcontrol

Technologies to modify surfaces and to extremely increase the value of products

Pursue the ultimate in possibilities for coating materials

Develop new techniques and new fields based on coating technologies

Develop environment-friendly products

Application Coatings

Color and Design

High solid clear

・Smoothness・Durability, acid resistance

・Color designing

Water-borne base coat

・Chipping・Layer-mixing prevention technology

Water-borne intermediate coat

Solvent-based or water-borne base coat

Solvent-based intermediate coat

Clear coat

Cathodic electrodeposition coat

Bake

Bake

Bake

Pre-heat (water-borne)


Intermediate coat

Clear coat

Cathodic electrodeposition coat

Bake

Bake

Pre-heat

Pre-heat

Current coating system New coating systemMain element technologies developed

Cathodic electrodeposition

Intermediate coat

Baking oven

Baking oven

Base coat (solvent-based or water-borne)

Pre-heat

Clear coat

Cathodic electrodeposition

Water-borne intermediate coat

Baking oven


Pre-heat

Clear coat

Pre-heat

Shorter process length

New coating systemCurrent coating system

15 16

Coating does not contain lead or chrome compounds, or

endocrine disrupting chemicals that include nonyl phenol,

which is suspected of adversely affecting hormonal

activity in humans.

This turpentine soluble type coating offers superior

brushability equivalent to that of ordinary synthetic resin

paint, and excellent recoatability for very diverse prior

coating films. Furthermore, its solids content reduces

solvent volatilization into the atmosphere.

UNITECT SAFETY PROCESS－Environment-Friendly Process-Reduced Coating System－We have developed a new environment-friendly corrosion

protective coating system. UNITECT SAFETY offers

three types of solutions: UNITECT 10 SAFETY

PROCESS which is a conventional alkyd anticorrosion

coating system, UNITECT 20 SAFETY PROCESS which

is a heavy duty protective coating with performance

equal to that of polyurethane, and UNITECT 30 SAFETY

PROCESS which is a weathering heavy duty protective

coating with performance equivalent to that of silicone.

Features of UNITECT SAFETY PROCESS

Kind to humans and the environment

Mild solvent type and high solids contents

Example of UNITECT 30 SAFETY PRCESS

Resin ingredients with excellent weatherability migrate towards

the coat film surface. (ex. Silicone)

Corrosion resistanceAnticorrosive pigments and epoxy resin included

Environmental atmosphere interceptionResin ingredients form a network structure as they age, and intercept moisture, oxygen, etc.

Internal stressReduced shrinking stress during hardening

AdhesionPromoted through a special functional group in the resin

Architectural Coatings countering Sick-house Syndrome (indoor air pollution)－Measures to comply with Revised Building Standard Law－Sick-house syndrome, in which people become ill as a

result of chemical substances discharged by building

materials, has been an issue of national concern. To

counteract this problem, the Revised Building Standard

Law that regulates building materials that discharge

toxic VOC was enacted in July 2003, and all interior

materials containing paint are banned or regulated

according to their rate of formaldehyde emission.

All interior materials that can be used in living area

are classified as F (no usage limitations)

through F (usage limitations in living areas)

depending on their rate of formaldehyde emission.

Kansai Paint ensures it complies with the Revised

Building Standard Law, by having a third party inspection

agency measure our products' rate of formaldehyde

emission.

We have also developed various new products

supporting the Revised Building Standard Law, including

POWER FORCE, which is the first ready-mixed synthetic

resin paint certified as F . Representative anti-

sick-house paints are listed in the table at right, some of

which are new products.

Kansai Paint's anti-sick-house syndrome paints (for internal coating use)

Ministry of Land, Infrastructure and

Transport

Revised Building Standard Law (enacted in July 2003)Classifies construction materials by their rate of formaldehyde emissions

F ☆☆☆☆ Not regulated No usage limitations

F ☆☆☆ Class-3 construction material Usage limitations when painting living areas

F ☆☆ Class-2 construction material Usage limitations when painting living areas

No marking Class-1 construction material Usage prohibited in living areas

Ministry of Education, Culture, Sports,

Science and Technology

Revision of "School Environment Health Regulations"Measurements of concentrations of formaldehyde, toluene, xylene, and paradichlorobenzene in newly constructed or remodeled rooms are required. Delivery is granted when the specified values are achieved.

Ministry of Health, Labor and Welfare"Guidelines for Indoor Air Pollution"Indoor concentrations are specified for 13 chemicals including formaldehyde, toluene, and xylene.

Response of governmental authorities to "sick-house syndrome"

touch up

Acrylic silicone resin based topcoat 25 μm

Acrylic silicone resin based intermediate coat 30 μm

JIS epoxy type anti-corrosive 60 μm

Existing coating film

Substrate

Silicone resin coating system

touch up

UNITECT 30 SAFETY 60 μm

Epoxy type anti-corrosive (ESCO NB SAFETY) 60 μm

Existing coating film

Substrate

UNITECT 30 SAFETY PROCESS

In general, primers offer anticorrosive functions, and top

coats offer weatherability. Thus, two or three paints are

coated in conventional processes. UNITECT SAFETY

PROCESS offers double functional coatings that have

excellent anticorrosion and weatherability functionality,

meaning one coating process can be eliminated.

Cost reduction through process reduction

Feature of UNITECT 30 SAFETY coating film (comparison in single coat)

Corrosion resistance(combined cyclic corrosion test: 100 cycles) * Red line denotes blistering.

Thick-film type polyurethane resin coating 60 μm

Epoxy polyurethane resin coating 60 μm

UNITECT 30 SAFETY 60 μm

Tape

stripping

width

13 to 20 mm

Tape

stripping

width

2 to 4 mm

Tape

stripping

width

1 to 4 mm

Weatherability

0

20

40

60

80

100

0 300 500 1000 1500 2000

S-W-O-M exposure time (hours)

UNITECT 30 SAFETYSilicone systemPolyurethane system

60G gloss retention (%)

High

Low

Si

Surface layer

Lower layer

Coating film

Silicone orientation in the UNITECT 30 SAFETY coating film (Elemental analysis of Si by XMA)

Substrate Product name Product characteristics

Concrete/

Mortar

surfaces

Primer ECO CATION SEALER Chlorine-free

Topcoat

ECO DELUXE ⅡTVOC: 1.0% or lessFormaldehyde removed, antibacterial, deodorized

VINYDELUXE 300 TVOC: 1.0% or less

VINYDELUXE 500 TVOC: 1.0% or less

ALES ECO CLEAN GLOSSTVOC: 1.0% or lessLow VOC-type gloss emulsion

Iron

Primer AQUAMACS Hybrid of water based alkyd/water based epoxy resin

Topcoat

ALES ECO CLEAN GROSS ASKA ⅡTVOC: 1.0% or lessLow VOC-type gloss emulsion

POWER FORCE (F4)Double function type ready-mixed synthetic resin paintMild solvent type

Wood

Primer AQUA GROUNDCOAT TVOC: 1.0% or less (wood primer)

Topcoat

ECO DELUXE ⅡTVOC: 1.0% or lessFormaldehyde removed, antibacterial, deodorized

ALES ECO CLEAN GLOSSTVOC: 1.0% or lessLow VOC-type gloss emulsion

POWER FORCE (F4)Double function type ready mixed synthetic resin paintMild solvent type

Safety information No products use formaldehyde, toluene or xylene, or lead compounds.

Building Standard Law All products meet the requirement F ☆☆☆☆

17 18

People and Environment Friendly Sample Cards－Paints without endocrine disrupting chemicals, lead compounds, or chrome compounds－

There has been a growing concern in our society over

endocrine disrupting chemicals and heavy metals

including lead and chrome, which have adverse effects

on both the environment and human bodies.

To respond such problems, Kansai Paint has prepared

paint color sample cards that are friendly to the

environment and people.

These color sample cards enable color design of paint,

while containing no toxic or hazardous substances.

1. Does not include endocrine disrupting chemicals

that adversely affect humans.

2. Does not include lead and chrome compounds

that are harmful to humans.

3. Better drying and bending characteristics are

achieved for use in color sample cards.

4. Wider color variations.

Merits

"CELA M SILICONE II", Exterior Paint with high Weatherability and Low Staining－Innovative paint offering characteristics of both polyurethane and silicone－To prolong recoating period, exterior paints require high

weatherability and low staining characteristics. For

thinners, strong solvents such as toluene are being

replaced with mild solvents, that include mineral spirits.

Furthermore, solvent based paint has been switched

to waterborne paints. Under these circumstances,

Kansai Paint has been distributing the mild solvent type

silicone resin coating CELA M Silicone. Furthermore, we

are proud to announce the successful development of

new CELA M Silicone II with better weathering, and low

staining characteristics.

CELA M Silicone II was developed by applying urethane

cross-linking with conventional silicone resin paint. This

innovative product thus offers features achieved by both

polyurethane paint and silicone resin paint. Polyurethane

paint offers superior initial film performance and solvent

resistance, whereas silicone resin paint provides better

weathering and low staining characteristics.

Reaction of conventional silicone resin paint

Reaction of CELA M Silicone II

Urethane reaction

occurs at the initial

stage of hardening

followed by silicone

reaction, which form

firm crosslinks.

CELA M Silicone IIConventional solvent-type

polyurethane paint

Dif ficul t cont ro l

of the hardening

reaction rate.

Rain staining test

"BIG VAN SENSOR," New Sensor System for Color Matching－Color matching processes are streamlined using a huge database, and advanced CCM theory－Color matching requires special skills in the automobile

refinishing process, thus its efficiency affects the entire

refinishing process. The automobile refinishing industry

has been asking for an effective color matching tool with

which anybody from novices through to experienced

workers are able to achieve the same level of work

efficiency. Furthermore, Kansai Paint has utilized its

accumulated know-how and abundant knowledge in

successfully developing a system that can measure

brilliance and graininess of metallic color. Advanced color

matching accuracy was achieved by combining visual

analog information (metallic impression theory) and

digital information (CCM theory), and this new system

is expected to contribute to streamlining the color

matching process.

Five big advantages to the introduction of BIG VAN SENSOR

Merits of metallic impression theory

1. Even novices are able to perform color matching.

2. Provides color matching training functionality.

3. Latest formula and color matching information can be easily obtained.

4. Color matching processes can be standardized and split up.

5. Waste paint quantities are decreased.

Introduction to "Metallic impression theory"

Flat surface Textured surface Flat surface Textured surface

What is metallic impression theory?

Newly developed two-stage color matching process

Tinting

Customer's color sense and visual impressions are reflected in CCM (computerized color matching)!

Standard formula +

CK formula

First stage Second stage

Metallic impression sample

Formula

Formula

Formula

Formula

Formula

Formula

Formula

Formula

Formula

Formula

Formula

Formula

Formula

Formula

Formula

Formula

Selection by metallic impression theory

Actual Formula Actual vehicle color

The visual impression of metallic color is digitalized based upon its brilliance and graininess, and this data is stored in the database. Metallic impression theory is a process to improve color matching accuracy by using this database.

* Patent applied

Candidate formula selection and fine color matching

● Less waste● Metallic impression theory applicable colors: 70% of all metallic colors

1 Achieves color matching throughmore accurate formulas

● When there is a limited data volume for the approximate color, all the data can be effectively used.

2 Provides a specific guide when a color is undecided

Comparison within the company

(8 to 10 minutes)

10 minutes 1 minute

approximately

1/10

Applicable range of themetallic impression theory70% of metallic and metallic pearl colors are supported

Time-saving in all-data searching

19 20

Preparation and issuance of MSDS have been

implemented since the enactment of three related laws

in 2000 and 2001.

The primary purpose of MSDS are to inform paint users

of the risk to people and the environment, in order to

prevent industrial accidents from occurring. Additionally,

this means the transfer and release quantities of PRTR

substances can be calculated from their composition

(substance name and contents).

Kansai Paint has established the following system to

provide users with our product MSDSs, which can be

automatically issued using the basic database. The

contents of such MSDSs have also been fine-tuned

to provide more accurate' and the latest information in

order to fully comply with laws and regulations, because

we feel that MSDS is an important risk communication

tool for users. A MSDS that was updated up until the

previous day can also be searched by using the Kansai

Paint Group internal network system. Our distributors

can also use EDI system to provide a specific MSDS

to their users in a timely matter by searching and

downloading the MSDS.

List of Certified Kansai Paint Group Business Establishments in Japan and Overseas

5 Environmental Management System (ISO14001)

At Kansai Paint Co., Ltd., five plants, Tokyo Office,

R&D Center, and the Head Office all have individual

ISO14001 certification, and each plant and office is

conducting voluntary activities based on company-wide

environmental policies and targets.

In 2003, one affiliated company in Japan newly obtained

its ISO certificate. Kansai Paint continues to encourage

other affiliated companies to obtain such certification,

in order that we can strengthen environmental

management for the entire Kansai Paint Group.

Kansai Resin (Thailand) Co., Ltd.

Registered in 2001

Thai Kansai Paint Co., Ltd.Registered in

2002

Kanuma PlantRegistered in

1998

Hiratsuka PlantRegistered in

1999

Ono PlantRegistered in

2000

Amagasaki PlantRegistered in

2000

Nagoya PlantRegistered in

2000

Head OfficeRegistered in

2001


Registered in 2001

R&D CenterRegistered in

2002

Miyoshi Chemicals, Inc.Registered in

2001

Kuboko Paint Co., Ltd.Registered in

2002

Kanpe Hapio Co., Ltd.Registered in

2002

Nippon Kako Toryo Co., Ltd.Registered in

2004

Goodlass Nerolac Paints Ltd. (Lote plant)

Registered in 2002

Goodlass Nerolac Paints Ltd. (Kanpur plant)

Registered in 2003

Taiwan Kansai Paint Co., Ltd. Registered in

2000

Chongqing Kansai Paint Co., Ltd.

Registered in 2001

The Japan Chemical Industry Association established

the Yellow Card (emergency contact card) system as a

part of its Responsible Care activities, to quickly cope

with accidents that occur during the transportation of

chemical substances that are hazardous to humans and

the environment. When transporting a wide variety of

materials, however, a number of Yellow Cards need to be

carried in the vehicle, thus making it difficult to identify

specific substances in emergencies.

To complement the conventional Yellow Card system,

the Japan Chemical Industry Association established

the Container Yellow Card labeling system, which

requires that the index code of the Yellow Card and UN

numbers for the hazardous substances are noted on

the container label, facilitating rapid and appropriate

responses in emergencies.

Kansai Paint was quick to introduce this new labeling

system (see the figure below), and is working

continuously to ensure safety during transportation of

chemical substances.

Industrial Safety and Health Law April 2000

Pollutant Release and Transfer

Register (PRTR) LawJanuary 2001

Poisonous and Deleterious

Substances Control LawJanuary 2001

Obligation to issue MSDS

Purpose of MSDS

7. MSDS


8. Container Yellow Card

Potential hazard

Public safety (protective equipment, evacuation)

Emergency actions (fire, leakage, first aid)

ID number

UN number

Container Yellow Card(labeling system)

Manufacturer

MSDS

Users

Understanding of the risk to the environment, safety, and health

Prevention of industrial accidents

Hazardous and toxic information

Product design(formula)

Product MSDS

Automaticpreparation

Customers,users

Clients

Business offices(or Distributors)

Raw materialselection

Risk assessment

Law materials' MSDS informationLiterature and law (enacted/revised) information

Basic database(laws and substances information)

ALESPEX

EDI system

Internal chemical substance control system

21 22

2. Energy Saving and the Prevention of Global Warming

6 Business Activities to Reduce the Environmental Burden

Change in energy consumption and source-distribution in the production division

Note

In environmental performance data, a value for

the same item name may differ depending on its

category, such as energy, waste, and environmental

accounting. This is as a result of dif fer ing

accounting methods in each category, as shown in

the table at right.

It is said that 95% of greenhouse gases emitted into

the atmosphere in Japan come from carbon dioxide

generated by energy consumption.

Although production quantities in FY2003 saw

only a slight increase of 0.4% over FY2002, energy

consumption decreased 4.6% in the same period, and

carbon dioxide atmospheric emissions also decreased

5.1% from FY2002.

At the Hiratsuka Plant, carbon dioxide atmospheric

emissions were reduced by 9% from FY2002 as a result

of promoting heat insulation paint on the roof, installing

upgraded air-conditioning systems, and improving steam

piping systems.

As a measure against global warming, Kansai Paint aims

to make effective use of different energies: therefore,

the company has invested in introducing co-generation,

replacing machinery that runs on fuel with that which

runs on the city gas, conducted energy-saving activities

for round-the-clock manufacturing facilities, and used

inverter controls for a reduced number of motored

appliances. Furthermore, whenever a air-conditioning

system is replaced, it is done so using one that uses

refrigerant that has less greenhouse effect, as well as

higher heat exchange efficiency.

We will strive to strengthen our energy-saving activities,

and to use recyclable energies such as photovoltaic and

wind power generation.

Title Breakdown

PlantContain production division and technical division within the same plant premises

Production divisionProduction division only within the plant premises

All companies 5 plants, R&D Center, Tokyo Office

CO2 emissions by plant (compared with FY2002)

CO2 emissions

0

10,000

20,000

30,000

40,000

50,000

60,000

'93'92 '94 '95 '96 '97 '98 '99 '00 '02 '03'01

（t・CO2）（kg・CO2/kg）

（FY）

0.00

0.05

0.10

0.15CO2 emissions (total amount)CO2 emissions (in basic unit)

CO2 emissions(total amount)

CO2 emissions(in basic units)

0

100

200

300

400

500

600

700

800

'93'92 '94 '95 '96 '97 '98 '99 '00 '02 '03'01

（109KJ）

（FY）

Energy used

Kerosene Heavy oil Gas Electricity

0

3,000

6,000

9,000

12,000

15,000FY2002

FY2003

Hiratsukaplant

Amagasakiplant

Nagoyaplant

Kanumaplant

Onoplant

(t・CO2)

1. Environmental Material Balance


The shortage of final disposal sites for waste has

become an acute social problem, therefore the formation

of a recycling-oriented society has been an important

issue for manufacturers.

Kansai Paint is promoting 3R (Reduce waste emissions,

Reuse, and Recycle) in order to create such a

recycling-oriented society, and to decrease risks to the

environment.

Table 1 explains the material flow items in our

business activities, and Table 2 shows a comparison

of input resources and energy, with emissions to the

environment.

Raw materials Amount of raw materials used to manufacture products (excluding containers, packaging materials, and fuels).

Recycled amount Amount of manufacturing wastes that were recycled.

Energy input (electricity) Amount of electrical energy purchased for manufacturing (excluding amount used for technical activities).

Energy input (liquid fuels)Amount of fuel used for manufacturing (excluding amount used for technical activities.) Heat recovery through thermalrecycling is not included.

Water resource input Total amount of water used.

Emissions of greenhouse effect gases and others (CO2 emissions)

Amount of CO2 emitted from manufacturing activities.

Ditto (SOx emissions) Amount of atmospheric emissions from smoke and soot generating facilities.

Ditto (NOx emissions) Amount of atmospheric emissions from smoke and soot generating facilities.

Emission of waste, etc. Amount of waste, etc. generated from manufacturing processes, excluding wastewater.

Final disposal amount Amount of waste for contracted disposal, incineration, and/or final landfill.

Wastewater amount Amount of processed wastewater generated from manufacturing activities.

INPUT

Item FY2003Over prev.

year

Material input

Raw materials (t) 252,000 （+8％）

Recycled amount (t) 28,000 （+11％）

Energy input

Electricity (GJ) 420,000 （－2%）

Gas (GJ) 150,000 （－10％）

Liquid fuel (heavy oil,

kerosene) (GJ)100,000 （－6％）

Water resource input

Water usage (ｍ3) 647,000 （－8％）

OUTPUT

Item FY2003Over prev.

year

Greenhouse effect gas emissions

CO2 emissions (t・CO2) 31,000 －5％

SOx emissions (t) 1,500 －6％

NOx emissions (t) 12,000 ＋－0％

Emission of waste, etc., final disposal amount

Waste emissions (t) 29,000 ＋7％

Final disposal amount (t) 1,200 －45％

Wastewater

Processed wastewater (t) 13,700 －26％

Table 1 Items in Material flows

Table 2 Material balance

Manufacturing volumes were slightly increased by 0.4%

from FY2002; however, streamlining the manufacturing

processes reduced energy input in all categories of

electricity, gas, and liquid fuels. Total energy input

was reduced by 5% from the previous year, and CO2

emissions quantities were also reduced by 5% from

FY2002.

Waste amounts increased from FY2002. However,

recycled material usage increased to 28,000 tons, 11%

up from FY2002, as resulting from of recycling waste

paint and solvents. The amount of final landfilled waste

via external disposal companies decreased a substantial

45% from FY2002.

We will continue to recycle, and to reduce waste

quantities, in order to contribute to a recycling-oriented

society.

Manufacturingactivities

by Kansai Paint

Change in CO2 emissions in the production division -Total amount & amount per basic unit-

23 24

The annual water resource used in FY2003 was

658,000 m3, 42,000 m3 less from FY2002. Although

the production volume of paint and synthetic resin

increased slightly by 0.4% from FY2002, water usage

was decreased by 7.5% as a result of water saving

activities.

The Amagasak i P lant had the highest water

consumption among the five plants in FY2002. The

plant invested in water-saving measures such as

modification to eliminate main pipe leakage for water

supply and industrial water, and it also attempted the

effective usage of cooling water in synthetic resin and

paint manufacturing processes.

Employees are also asked to reduce water usage in

cafeterias and bathrooms and so on. These efforts have

resulted a 20% reduction in water consumption from

FY2002.

4. Waste Reduction (Reduce, Recycle, Reuse)


Kansai Paint's five plants generate waste through the

production of paint and other products. In response

to this, Kansai Paint is promoting Reduction in waste

generation, Recycling, and Reuse of wastes aimed at

creating a recycling-oriented society.

In FY2003, we have promoted reducing the amount of

waste paints and solvents, which account for a majority

of the company waste. Eco Systems Co., Ltd., which is a

Kansai's subsidiary located within our Amagasaki plant

and possesses waste paint/solvent recycling facilities

developed by Kansai Paint, processed increasing

amounts of waste, and produced a great deal of recycled

material. As a result, there was an 87% increase over

FY2002 in the amount of contracted recycled waste.

The final disposal amount generated from the production

division that was contracted to external disposal

companies showed a dramatic 45% reduction from

FY2002. The ratio of waste recycled reached 96%,

surpassing the target of 95%.

（FY）

0

10,000

20,000

30,000

40,000

'99 '00 '01 '02 '03

（t）Waste amount

（FY）

0

10,000

20,000

30,000

40,000

'99 '00 '01 '02 '03

（t）（t）

Recycled amountContracted finaldisposal amount

0

2,000

4,000

6,000

8,000Recycled amount

Contracted final disposal amount

Change in waste generation, recycled amount, and final disposal amount

Breakdown of wastes

3. Measures to Reduce Water Resource Input


Water resources are used in various ways, such as a raw

material for water-borne paint, processing water used

as cooling water, washing water, heat media (steam) or

other ways in manufacturing processes, and as human-

use water, used for drinking, in bathrooms, in toilets and

so on.

Main usage of water resources

Water as raw material

Processing water

Human-use water

Water to be used for water-borne varnish and paint

Washing water for water-borne paint manufacturing facilities, hot steam as heat media, and cooling water

Cafeteria, drinking water, bathroom water, toilet water

0

50

100

150

200

250（1000m3）

FY2002FY2003

Nagoyaplant

Hiratsukaplant

Amagasakiplant

Kanumaplant

Onoplant

Change in water consumption throughout the entire company

Change in water consumption by plant

Water consumption

Basic units（FY）

0

200

400

600

800

1,000

'99'98 '00 '01 '02 '03

（1000ｍ3）

0

1

2

3

4

5

（FY）

（L/kg）

'99'98 '00 '01 '02 '03

( )The values in parentheses are for FY2002

Recycling ratio (%) ＝ x 100(Internally recycled amount + Externally recycled amount)

Total waste

96% (92%)

Recycling ratio

29,400 tons (27,600 tons)

Total amount of waste (excluding waste water)

Contracted final disposal amountExternally recycledInternally recycled

Amount internally reused, recycled,

or re-circulated, such as heat

recovery within plants.

Amount sold externally, or externally

recycled and used.

Amount of waste for contracted disposal,

incineration, and/or final landfill.

1,200 tons (2,200 tons)7,300 tons (3,900 tons)20,900 tons (21,500 tons)

25 26

Raw material candidates

Product design

Registered materials?

Any restrictions on use?

New materials

-Investigation

-MSDS, etc.

Dangerous or harmful materials?

Cautioned materials?

Prohibited materials?

Prohibited materials

Cautioned materials

Ordinary and common materials

Dangerous or harmful materials

Corporate rules

Evaluation and judgement

Design work

Registration

Review and re-design

��

��

��

��

��

��

��

��

��

��

1

2

3

4

1

2

3

3) Reduction of Hazardous Substances

We have reduced another 1%, achieving a total 99%

reduction. We aim to totally abolish usage of these

substances by the end of FY2004.

Target materials

（t/year）0 5,000 10,000 15,000 20,000 25,000

（FY）

'99

'00

'01

'02

'03

'04

'05

'06 （Target）

（Estimated）

（t/year）0 2 4 6 8 10 12

（FY）

'01

'02

'03

'04

'05 （Target）（t/year）

0 100 200 300 400 500 600 700

（FY）

'99

'00

'01

'02

'03

'04

'05 （Target）

（t/year）0 100 200 300 400 500 600 700

（FY）

'98

'97

'96

'95

'99

'00

'01

'02

'03

'04

'05

5. Management of Chemical Substances


For 1st stage reduction Related PRTR Law No.

Dichloromethane （1ー145）

1,4-Dioxane （1ー113）

Ethyleneglycol monoethylether （1ー 44）

Ethyleneglycol monoethylether acetate （1ー101）

Ethyleneglycol monomethylether （1ー 45）

Ethyleneglycol monomethylether acetate （1ー103）

Tri-alkyl tin compounds （1ー176）

For 2nd stage reduction Related PRTR Law No.

Chromium (VI) compound （1ー 69）

Lead compound （1ー230）

For 3rd stage reduction Related PRTR Law No.

Xylene （1ー 63）

Toluene （1ー227）

Ethylbenzene （1ー 40）

For 4th stage reduction Related PRTR Law No.

Polyoxyethylene nonyl phenyl ether （1ー 309）

Raw materials are divided into 4 groups according to

their hazardous and harmful characteristics as follows.

The main information sources are domestic and

international rules and regulations.

Classes Corporate rules

1 Prohibited materials Prohibited to use

2 Dangerous or harmful materials Limited use (on registration)

3 Cautioned materialsAllowed to use with care (on registration)

4 Ordinary and common materials Normal use

2）Our Classification

To reduce the environmental burden of our products

(paints), hazardous substances are selected as shown

in the table, and a reduction plan for each substance is

established and promoted.

1st stage reduction substances

2nd stage reduction substances

3rd stage reduction substances

4th stage reduction substances

The usage of hexavalent chromium has been gradually

decreasing, however, the rate of the reduction has been

slowing, partially because it takes time to verify long-

term weathering performance. However, our efforts in

reduction continue.

Raw materials containing hexavalent chromium

Change in purchased amount of raw materials containing hexavalent chromium

Lead containing raw materials (excluding hexavalent chromium containing materials)Usage of lead compounds has been gradually

decreasing, meeting the target reduction rate. Our

efforts in reduction continue.

Usage is decreasing, but not at a fast enough pace.

Aromatic solvents are considered to contribute towards

air pollution, and we will continue our efforts to meet

targets through the promotion of water-borne coatings

for automobiles, and so on.

Change in purchased amount of xylene and toluene solvents

A target for reducing total VOC emissions is under

consideration, in response to a newly instituted law.

This is progressing as scheduled.

Amount of polyoxyethylene nonyl phenyl ether used

1) Corporate Rules regarding Selection of Raw Material at the Product Design Stage

（t/year）0 300 600 900 1200

（FY）

'99

'00

'01

'02

'03

'04

'05 （Target）

Kansai Paint has consistently strived

to reduce and eliminate the use of

hazardous chemical substances, both

in products and in manufacturing

processes. For this purpose, we have

set a standard evaluation system as

illustrated at right, that enables the

elimination of hazardous materials at

the product design stage.

27 28

(FY)

Butyl alcoholToluene Ethylbenzene Ethyl acetateXylene

0

50

100

150

200

'98'97 '99 '00 '01 '02 '03

（t）

Atmosphericrelease

0

5,000

10,000

15,000

20,000

'98'97 '99 '00 '01 '02 '03

（t）

(FY)

Usage

Designated substances

6. PRTR Substances' Release and Transfer


1) FY2003 Release and Transfer Quantity

Data has been collected since January 2001 for the

PRTR substances stated on the raw material MSDS.

The number of substance to be registered with the

government was increased to 54 items in 2004

(FY2003 targeted), up from 17 in 2003, because

the annual criteria volume of class-1 designated

chemical substances was modified to five tons in 2004

(calculated from FY2003), from previous requirements

of one ton; however, the total volume was decreased by

3% from FY2002.

The number of substances defined by the Japan

Chemical Industry Association (JCIA) increased to

24 items (excluding those required by the law), from

the previous 23 items, and their total quantities were

slightly decreased from FY2002.

In addition to the substances defined by the law,

substances defined by JCIA are also assessed. The

top 10 substances covered by the PRTR and JCIA in

terms of volume are listed below, to provide atmospheric

release and transfer data.

7. Life Cycle Assessment (LCA) Initiatives


We have been studying the life cycle assessment of

paint to provide quantitative environmental burden data,

and to help designing environment-friendly paints and

their application process. Examples of LCA evaluations

on a synthetic resin production and water-borne base

coat for automobile topcoat are shown below.

Using recycled PET is connected with reduction of

waste PET in society, and reduces by 10% carbon

dioxide emission from coating resin production,

including from raw material mining processes, when

compared with conventional production processes.

The amount of carbon dioxide generated from water-

borne base coats production is 90% of that from

solvent-based base coats, proving that water-

borne base coats impose a lighter burden on the

environment.

Comparison of resins using recycled PET

Performing LCA evaluation for paints provides an

effective tool to quantitatively understand the paints'

burden on the environment. We will continue this study

to assist the development of new products with reduced

burden on the environment.

3.0

2.0

1.0

0

（kg・CO2/kg）

Recycled PET usedRecycled PET not used

Environmental burden (CO2 emission)

2.0

1.5

1.0

0.5

0

（kg・CO2/kg）Environmental burden (CO2 emission)

water-bornebase coats

solvent-basedbase coats

Example 2

Example 1

8. Eco-Product Ratio

By developing and offering products that are kind on

both people and the environment, Kansai Paint has

ensured that environment-friendly products (eco-

products) will account for 60% of our product sales in

FY2005. Evaluation items and details are specified for

each eco-product.

In FY2003, eco-products met the target of comprising

48% of our sales volume. Among the eco-products sold

in FY2003, 70% comprised paint with reduced VOC

content, such as water-borne paints.

We continue to develop and expand sales of eco-

products in order to increasingly provide environment-

friendly products that are designed for better human

health, and for the protection of the environment.

100

80

60

40

20

0'02 '03 '04 '05 （FY）

（％）

ALES ECO PLAN2005 target

PRTR No. Substance name Atmospheric

release (kg)

Quantity motransferred

(kg)

2 Acrylamide 0 1

3 Acrylic acid 0 18

4 Ethyl acrylate 0 27

6 Methyl acrylate 0 3

7 Acrylonitrile 0 1

13 2,2'-azobisisobutyronitrile 0 17

16 2-Aminoethano 0 16

24 n-alkylbenzenesulfonic acid and it's salt 0 64

25 Antimony and its compounds 0 170

27 Isophorome diisocyanate 0 8

29 Bisphenol A 0 90

30 Bisphenol A type epoxy resin (liquid type) 0 30507

40 Ethylbenzene 43300 136500

43 Ethylene glycol 3 2913

44 Ethylene glycol monoethyl ether 1 41

63 Xylene 52000 163900

67 Cresol 8 23

68 Chromium and chromium(III) compound 0 73

69 Chromium (VI) compound 0 734

100 Cobalt and its compounds 0 63

101 Ethylene glycol monoethyl ether acetate 2 38

102 Vinyl acetate 0 1

129 3-(3,4-Dichlorophenyl)-1,1-dimethylurea 0 32

160 2-(Di-n-butylamino)ethanol 14 21

176 Organic tin compounds 1 1181

177 Styrene 0 58

179 Dioxins (mg-TEQ) 1 5.0×10-4

205 Terephthalic acid 0 17

224 1,3,5-Trimethylbenzene 3340 10331

227 Toluene 71100 131500

230 Lead and its compounds 2 6450

231 Nickel 0 44

232 Nickel compounds 0 45

242 Nonylphenol 0 19

266 Phenol 11 37

270 Dibutyl phthalate 0 708

272 Bis(2-ethylhexyl) phthalate 0 666

273 Butyl benzyl phthalate 0 50

293 Hexamethylene diisocyanate 235 37

300 1,2,4-Benzenetricarboxylic 1,2-anhydride 0 84

308 Poly(oxyethylene) octylphenyl ether 0 800

309 Poly(oxyethylene) nonylphenyl ether 0 60

310 Formaldehyde 591 539

312 Phthalic anhydride 0 310

313 Maleic anhydride 0 5

314 Methacrylic acid 0 155

315 2-Ethylhexyl methacrylate 0 117

316 2,3-Epoxypropyl methacrylate 0 527

318 2-(Dimethylamino)ethyl methacrylate 0 7

319 Butyl methacrylate 0 491

320 Methyl methacrylate 0 797

338 m-Tolylenediisocyanate 8 7

341 Methylenebis(4,1-cyclohexylene) diisocyanate 0 0

346 Molybdenum and its compounds 0 21

-- Ethyl acetate 34600 56160

-- Butyl alcohol 30900 88600

-- Butyl acetate 21500 44510

-- Methyl butyl ketone 20760 26540

-- Propyl alcohol 11931 30546

-- Methyl ethyl ketone 11240 17140

-- Methyl alcohol 5230 9780

-- Cyclohexanol 3990 9280

-- Butyl cellosolve 2603 27817

-- Acetone 2109 3830

Substances excluding PRTR substances (JCIA top 10 substances)

2) Annual Change in Usage, and Release of Major Chemicals

A total of all production division sites

Five substances that had the most significant

atmospheric release were selected from among RPTR

and JCIA substances, and their usage and amounts of

atmospheric release were plotted in the graphs. The top

five substances in terms of quantities released into the

atmosphere were unchanged from those of FY2002.

The amount of atmospheric release has been decreasing

for all substances.

＊ Methods for calculating atmospheric release quantitiesBased upon release calculation methods for manufacturing processes in the JPMA (Japan Paint Manufacturers Association) PRTR manual (published March 2001)

Comparison of basecoats of automobile topcoats

29 30

Safety and Health Activities

7 Social Efforts

Workplace Accidents FY2002 FY2003

Lost-work injuries 1 1

Minor injuries 5 8

1) Safety Activities and Results

There were several large-scale accidents experienced

by large-scale corporations in FY2003, and these

accidents remind us that safety must be a top priority

item in our business activities. Furthermore, Kansai

Paint is aggressively implementing safety measures

throughout the company, aiming at our target of zero-

accidents.19th in-house seminar (Tokyo Office)

Various hazard prediction training is carried out to enhance awareness of hazards, and to prevent industrial accidents.

Annual change in accidents at work

Change in severity

FY2003 had as its target zero accidents, including

zero minor injuries, however there was an increase in

the number of minor injuries over FY2002. We will make

further efforts to better manage workplace safety and

training programs in order to prevent recurrences of

such accidents.

There was not a significant disparity in either the

frequency of accidents, or their severity between

FY2002 and FY2003. In FY2004, our target is to

achieve zero accidents, through the partial modification of

an occupational safety and health management system.

Annual change in frequency ratios for accidents

Frequency ratio for accidents =

Lost-work accidents (number of victims)/ Total man-hour x 1,000,000

JPMA: Frequency ratio for Japan Paint Manufacturers Association members

JCIA: Frequency ratio for Japan Chemical Industry Association members

0

5

10

15

20

25

（FY）

（Number of industrial accidents）

Lost-work injurieMinor injuries

'99'98'97'96'95'94'93'92'91'90 '00 '01 '02 '03

○ Annual Safety Check (July 1)

○ Safety & Health Inspection by Management:

5 plants, 1 Office, 4 Affiliates (September -

October)

○ In-house leaders training in hazard & accident

prevention workshop: West Japan (May), East

Japan (February), 40 attendees each.

○ Dispatched 20 persons/yr to external training

in hazard & accident prevention to foster expert

leaders

○ Safety News (17 times)

Main activities

Results (All plants and offices)

0.0

0.1

0.2

0.3

0.4

（FY）

（Severity）

JPMAKansai Paint

JCIA

'99'98'97'96'95'94'93'92'91'90 '00 '01 '02 '030

1

2

3

4

（FY）

（Frequency ratio）

JPMAKansai Paint

JCIA

'99'98'97'96'95'94'93'92'91'90 '00 '01 '02 '03

2) Safety Inspections for Affiliated Companies

An annual Safety & Health Inspection by management

is carried out for four affiliated companies in Japan. In

this, approximately ten people form a special inspection

team led by the general manager of the production

division, and this evaluates safety, health, environment,

disaster prevention training, etc. This has seen an overall

improvement every year. In the future, we plan to further

raise levels of safety at Kansai Paint Group companies,

through close communication with personnel regarding

safety and environmental preservation at group

companies.

Safety measures for affiliated companies in Japan

Safety measures for overseas affiliated companies Our overseas affiliated companies engage in paint

production and sales in China, Thailand, Malaysia,

Singapore, Indonesia, and India. Our aim is to work with

safety, health, and environmental issues globally, and we

have made progress in performing safety inspections for

six companies in China in FY2003.

Before the commencement of local inspections, local

Japanese staff conducted self-assessment and

extracted important points for evaluation.

Inspection reports indicated that safety and health

seminars ensured overseas employees raised their

awareness as regards safety, and that they acquired

good understanding of electrostatic measures through

training.

Basic education regarding safety, environmental conservation, and pollution control are provided.

Safety inspection at Chongquing Kansai Paint Co., Ltd.

Safety inspection at Shenyang Kansai Paint Co., Ltd.

Training on electrostatic measures at Hunan Kansai Automotive Coatings Co., Ltd.

Regional education and training

Examples of industrial accidents such as pinching and entangling are shown, and safety measures are presented.

Education stressing the importance of electrostatic measures are provided using visual media.

1) Safety inspection using an overseas safety check list

Regional checking and training

In FY2003, safety inspections were conducted for

affiliated companies both in Japan and overseas.

Severity = Lost-work days / Total man-hour x 1,000

JPMA: Severity of accidents for Japan Paint Manufacturers Association members

JCIA: Severity of accidents for Japan Chemical Industry Association members

1) Safety, health, and environmental management

2) Safety measures

3) Electrostatic measures

○ Maintenance and compliance with rules and

regulations

○ Workplace environment

○ Inspection and training of electrostatic measures

○ Control and handling of chemical substances

2) Important inspection items

Environmental Report 2004 -Environment, Health & Safety- (3nd Issue) Published by KANSAI PAINT CO., LTD. Published, September 2004Planning & Editing, Product Quality & Environment Division Production, Business Planning &Administration DivisionUnauthorized reproduction of the contents of this publication is prohibited.

CorporateRegister.com 22/02/2006

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