Top Messages

In March 2011, Japan was struck by an earthquake and tsunami of unprecedented size. I would like to start by extending my deepest sympathies to those who were affected by the Great East Japan Earthquake, and offering my prayers for your swift recovery.

USHIO responded to the earthquake by immediately establishing a Disaster Response Headquarters and working as a group to gather information and respond as needed. Fortunately, no employees in Japan were injured or suffered any physical losses, and Group companies were quickly able to recover despite slight damage sustained by production facilities. From April onward, USHIO established an Operation Countermeasures Committee under the president, to make a stronger framework for ongoing cooperation and links in operations companywide.

This disaster has caused industries to reflect long and hard. They have been made to see that many of the capacitors, ICs and other high-use, core electrical components used widely around the world are made in factories located in the Tohoku area; more than they had thought. Even one missing part can prevent the assembly of a product that uses hundreds or thousands of parts. To sustain society, we must be able to provide products and services under any circumstances. This is the reason that companies exist, and it is one of their most important responsibilities to society. In this sense, the aftermath of the disaster has been a painful reminder to corporate management of the importance of managing risk.

USHIO has many products that have a high market share. Now more than ever, people are asking us about how we raise efficiency in daily operations, and how we implement risk management for rare but significant events.

CSR Derives from Everyday Operations

The USHIO Group has set out the 2020 Environmental Vision. In fiscal 2010, we formulated our Third Environmental Action Plan and took steps to help preserve the environment. At the same time, we moved quickly to establish a framework to strengthen our corporate social responsibility (CSR) activities in general. From fiscal 2011 we formulated and published a CSR Action Plan to clarify our focus areas for CSR initiatives. We believe that creation of this plan will help our existing CSR activities penetrate further into the daily operations of every part of the Group, thereby promoting CSR even further.

In fiscal 2010 especially, the overseas portion of our net sales surpassed 70%, and the number of overseas employees in the Group reached 3,041 persons, versus 2,228 in Japan (USHIO and group companies in Japan). We will work to strengthen interaction and links across the Group and to match operations to diverse regions and personnel. We will also ensure that compliance is rigorously upheld throughout the Group.

In October 2010, USHIO formally declared its support for the United Nations Global Compact of principles concerning human rights, labor, the environment, and anti-corruption. As the spheres of corporate activity become global, we believe it is important that the scope of CSR initiatives also expands internationally.

USHIO Group’s Medium-term Management Plan and CSR

The USHIO Group’s medium-term management plan, known as the Medium-term Vision, sets out targets for net sales, operating income and other financial measures. It also lists six themes for key business strategies. These themes set out a clear direction for USHIO to develop a sustainable business. They show how USHIO can contribute to the creation of an abundant society by providing products and technological solutions through its light-related businesses.

Steady Development of the Digital Cinema Business

For example, the USHIO Group has the top share of the global market for cinema projectors, and we are vigorously promoting a shift from conventional film projectors to digital cinema projectors. A reel of cinema film for a single movie has a diameter of around 1.5 meters, containing several kilometers of film. Numerous copies of this film must be made and distributed to cinemas throughout the world, requiring significant transport- related use of petroleum resources. By contrast, the digital format allows a movie to be contained in a single small hard disk—and in some cases, even this is not needed as the movie can also be distributed via satellite communication. Moreover, in addition to energy- and resource-saving benefits, digital cinema projectors are also capable of rendering finer quality images, 3-D and other advantages to enrich the cinema experience. As such, they are rapidly being adopted at cinemas in mature regions such as Japan and the U.S. Solid-state Light Sources Business White LEDs for common everyday lighting needs are drawing attention recently as an environmentally friendly technology that saves electricity. The adoption of solid-state light sources in projectors has proved to be a challenge however, as projectors require an unusually powerful light source. To meet this challenge, and hasten the development of a powerful laser light source for use in cinema projectors, USHIO made U.S. semiconductor laser manufacturer Necsel Intellectual Property, Inc. into a wholly owned subsidiary. A great benefit of lasers is their long operating life. Another advantage is their potential ability to produce more vivid images. In the near future, USHIO plans to lead the industry by introducing a laser light source for projectors on to the market. The entire USHIO Group is working together towards this goal.

Promoting Environmentally Friendly Businesses

USHIO’s environmental initiatives take two forms: reducing impact on the environment at factories, and making environmentally responsible products. Since its inception, USHIO has worked to produce light more efficiently and make light sources with longer replacement cycles. At present, the equipment business has grown to account for around 60% of our operations, and our environmentally-focused R&D activities cover not only light sources, but the power supply and all other components that they need. Another project under development is modules for manufacturing solar cells. Looking ahead, we believe there are even wider environmentrelated applications for light, such as safe, reliable chemicalfree processes for disinfection and water purification.

Another example of further application is in using artificial light both to grow plants and to control weeds. This exciting field is explored in the feature section of this report. We hope that readers will find it informative and interesting. We aim to continue to provide satisfaction and hope to all of our stakeholders. To this end USHIO will continue to seek new fields where it can make a unique contribution.

Shiro Sugata
President and Chief Executive Officer
(Chairman of the Environmental Management Office and Group Environmental Council)