CSR Report 2011

Response to Great East Japan Earthquake

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Adeka reacted immediately after the quake by setting up a temporary disaster response center to launch the Company?s incident management plan (IMP) and business continuity plan (BCP). In addition to verifying the safety of employees, the disaster response center worked to resume production and marketing operations, as well as restore supply chains, including logistics capacity, and procurement of raw materials and ingredients. Adeka also provided necessary customer support and issued press releases, and through these combined efforts was able to resume production and marketing operations with reasonable order.

Key Actions after Great East Japan Earthquake

March 11 Verified safety of all employees and damages immediately after the quake
Established temporary disaster response center and gathered information from Adeka Group offices
Evacuated employees under the direction of the highest manager at each office
Filed initial damage reports with supervising government authorities
Confirmed the status of employees stranded at work, and arranged employee accommodations for the night
Distributed blankets and emergency food supplies for employees spending the night at company offices
March 12 The temporary disaster response center rapidly issued necessary instructions based on gathered information.
Verified exact damages at offices in disaster areas
Restarted facilities as available, pending safety checks
March 14 Issued first corporate press release concerning disaster
Briefed customers and other stakeholders on the status of the Adeka Group
March 15 Verified damages at Soma Factory, and sent out a team to deliver relief supplies to the plant
Launched fund-raising campaign (management and labor union combined initiative)
March 16 Sales operations in Sendai temporarily transferred to Head Office, to provide support for customers normally served by the Sendai Regional Office
March 18 Transported relief supplies for employees of the affected Soma Factory
Quake Damages and Recovery

Employee Safety
No employees of the Adeka Group were injured, although some employees suffered personal damage to their homes, including flooding damage.
Damage to Adeka Offices
The Sendai Regional Office and four out of seven manufacturing plants in Japan were damaged from the disaster. (See map below.)
Impact on Raw Material and Ingredient Procurement
The disaster affected Adeka?s suppliers of raw materials and packaging materials. However, the impact on Adeka?s manufacturing activities was minimized from having implemented initiatives to diversify purchasing sources and pursue overseas procurement with the cooperation of Adeka Group subsidiaries outside of Japan.
Quake Damages and Recovery

Crisis Management Following the Quake

The Adeka Group adheres to an internal risk management manual that outlines both risk management in normal times, and crisis management during an emergency such as the recent quake in Japan. These measures are designed to prevent risks during normal business and secure damage control.

In addition, the Adeka Group has adopted disaster mitigation rules to be followed in a major quake or other disaster. These rules detail preventative steps to take in normal times, and basic guidelines for disaster mitigation in an emergency. The rules are designed to save lives and ensure the physical safety of employees and members of the community, and to contribute to the safety of neighboring communities and public safety as part of the community.

In response to the recent quake in Japan, the Adeka Group immediately formed a temporary disaster response center and sought to verify the safety of all employees, as well as grasp the damage to the Company. Additionally, the Head Office was guided by disaster mitigation rules and took necessary action during the emergency by issuing appropriate evacuation instructions and determining the status of stranded employees and making arrangements for them.

The Adeka Group will carefully analyze its crisis management in response to the quake, to identify problem areas and formulate better and more effective rules.
Review of Business Continuity Plan
Securing a Stable Supply of Products

The Adeka Group manufactures raw materials and intermediate materials that have a direct impact on the production activities of customers. The Adeka Group is united in its commitment to ensure a stable supply of products, and this commitment extends from research and purchasing to production and sales. The aim is to best position the Adeka Group to meet customer demand, even if there is a crisis involving catastrophic damage to its key production facilities.

Following the March 11 quake, the Adeka Group immediately sought to verify the status of inventory in its warehouses in disaster areas. The Adeka Group worked closely with various offices, including logistic partners, to reestablish a supply chain for Adeka products at the earliest juncture.

The affected Soma Factory had already secured back-up inventory of its products in accordance with the BCMS, so that it was able to continue filling orders for lubricant additives. The Adeka Group also continued to ship food products and fill orders by increasing production at the Akashi Factory to full production levels, to compensate for production interruptions at the affected Kashima Factory. In addition, the Adeka Group increased production of some food products at Adeka (Singapore) Pte. Ltd.

Operations at the Fuji Factory were temporarily suspended due to concerns over electricity service caused by the implementation of rolling blackouts. The plant scrambled to modify its existing cogeneration system in order to secure stable power service. The Adeka Group will continue taking steps to ensure that it can take swift action to ensure the stable supply of Adeka products.
Adeka Group Assistance to Disaster Areas