Development of Environment-conscious Products

In accordance with the Nabtesco Group Corporate Philosophy, we are committed to ensuring mobility and the lives of people are safer, more secure and more comfortable by fully taking advantage of our unique motion control technology.

We ensure that energy and resource conservation, recyclability and other environmental considerations are taken into account from the development and design stage of products. In this way, among others, we promote product commercialization that meets the needs of both customers and society. Our efforts to date in this regard have won high praise and recognition in the market.

Notably, our Two-Stage Screw Dry Vacuum Pump "vigo-vac" received the Prizeof the Minister of Economy, Trade and Industry for Superior Energy-Conserving Machinery for fiscal 2004.

We have also developed highly efficient wind turbine drive units as part of our efforts to promote alternative energy to halt global warming, and are working hard to accelerate their wide utilization throughout society.

Prevention of Global Warming (Energy Conservation)

The Nabtesco Group is actively promoting efficient use of energy resources as a means to prevent global warming.

These efforts include the establishment of energy-saving activities, quantitative and overall evaluation of the effects of the activities, and revision of priority activities based on the evaluation results, as well as daily operational management measures such as power saving and equipment inspections.

In FY2006, while energy consumption (CO2 emission equivalent) increased by 7% across the Group due to increased production and the inauguration of the new facilities at the Tsu Plant, the per unit energy consumption improved by 2.4% thanks to the vigorous energy-saving activities implemented.

Reduction of Waste (Zero Emissions)

We promote the reduction of all types of emissions generated in the course of business based on the 3Rs (reduce, reuse, recycle), the basic practice for establishing a recycling-based society, in order to realize zero emissions.

In fiscal 2006, while total emissions increased by 3% due to increased production, landfill waste decreased by 14%, which contributed greatly to the 6% reduction of overall inefficiently used waste.

These results were achieved via a series of projects launched in fiscal 2005, such as the reuse of wastewater as fuel or auxiliary fuel, recycling of grinding sludge, and reduction of sludge produced in the iron removal process through the effective reuse of groundwater, that began to take effect. Other such efforts, including the reduction of sludge by the improvement of the waste water treatment system as well as the recycling of packaging materials, which had previously been incinerated, also proved effective.

During fiscal 2006, we also expanded of the scope of our recycling programs for grinding sludge and plastic waste.

Through these efforts, the ratio of landfill waste to total emissions improved from 6% to 5%, taking us one step ahead as planned toward our ultimate goal of zero emissions.

Notes: "Zero" emissions: The state in which landfill waste accounts for no more than 1% of total emissions. We are aiming to realize this by fiscal 2014.
Inefficiently used waste: Incinerated, neutralized/detoxified and landfill waste.

Control of Chemical Substances

The Nabtesco Group performs such activities as the identification of amounts of Pollutant Release and Transfer Register (PRTR) substances handled, as well as the appropriate management and reduction of use of such substances, in accordance with the PRTR >Law enforced in March 2003.

In fiscal 2006, the amount of PRTR substances handled increased by about 5% due to boosted production within our Company.

We are currently handling 18 PRTR substances, with toluene and xylene accounting for the majority of the emissions.

The greater part of the toluene and xylene emitted was the result of the painting processes, and we are working hard to reduce the environmental burden of these volatile organic compounds (VOCs) by introducing alternative washing agents and a once-through coating process.

The Nabtesco Group reports all PCB-containing transformers, capacitors, etc. to the authorities and stores them appropriately in accordance with the Law Concerning Special Measures against PCB Waste (a law established to ensure that polychlorinated biphenyl (PCB) waste is disposed of properly) promulgated in June 2001. The disposal of these products will be completed by 2016.

Based on the understanding that harmful substances accumulated in soil are a great threat to society, the Nabtesco Group is working hard to prevent contamination of soil and groundwater as one of its most important CSR tasks.

A survey on the soil and groundwater conducted in May 2005 at the site of the former Yokosuka Plant revealed that the site was contaminated by volatile organic solvents and other harmful substances. We reported it to the authorities in accordance with the law, and are currently engaged in soil melioration and groundwater purification in close collaboration with the authorities.

The excellent properties of asbestos once made it a convenient material in a wide range of applications in both industrial and consumer uses. The Nabtesco Group has performed extensive investigation on present and past use of asbestos in products, processes, facilities and constructions within the Group, and is implementing appropriate measures based on the results in accordance with the relevant laws and regulations.

Although the Group has little to do with the asbestos dust issue except in a limited number of cases in the past, all ex-employees are notified and recommended to undergo the relevant medical checkups.

Although we have long adopted every possible measure to discontinue the use of products containing asbestos, we discovered in February 2007 that shipped gaskets containing asbestos had been used in some parts for railroad cars, some repair parts for aircraft, and in limited equipment for construction machinery. We reported this to the relevant authorities and customers immediately upon discovery, recalled those products and took the necessary corrective actions. We would like to express our deepest apologies for all the inconvenience caused to customers and other parties concerned. We will commit ourselves to further reinforcing the management system in the future.

Since the asbestos used for those products was of a solid type and sealed within the machines, there was no risk the harmful substance would scatter.

Health and Safety Management

Maintaining the health and safety of employees provides the basis for effective and continuous business processes. The Nabtesco Group is highly committed to the improvement of working environments and the implementation of measures to combat the effects of earthquakes, fires and other disasters.

In fiscal 2006, both the accident frequency and severity rates improved dramatically thanks to countermeasures adopted during the first half of fiscal 2005, which was marked by a high incidence of accidents.

The working environments of Japanese businesses have become increasingly challenging in recent years due to the increased number of hazards resulting from the diversification and greater complexity of equipment and work processes, the retirement of a large number of experienced workers, and the expanded scope of work for each individual.

We therefore continue to actively promote preventive safety management by passing on safety technologies to the next generation of workers and performing strict risk assessment. In this way we will create safe and comfortable work environments that are less susceptible to human error.

As for countermeasures against earthquakes, we plan to establish an organization in which the Earthquake Early Warning system introduced by the Japan Meteorological Agency in October this year will be effectively utilized, and training based on the warning system will be continuously provided to employees to ensure that our business will continue to operate without interruption even in case of an emergency.