Dynagon's Proprietary Service "Smart SDS" Certified as Eligible System for Ministry of Health, Labour and Welfare's "SDS Digitization Subsidy" for the Second Consecutive Year

Dynagon Inc. (Headquarters: Shinagawa-ku, Tokyo; Representative Director: Shingo Sakamoto; hereinafter referred to as "Dynagon") is pleased to announce that its SDS creation software "Smart SDS Make" and SDS/risk assessment management software "Smart SDS Check" have been certified as eligible systems for the "SDS Digitization Subsidy" implemented by the Ministry of Health, Labour and Welfare for fiscal year 2026. This marks the second consecutive year of certification, following the subsidy's launch in fiscal year 2025.

SDS, an abbreviation for Safety Data Sheet, is a document that details the hazards and risks associated with chemical substances. While these documents are intended to prevent accidents caused by chemical products through proper management, the significant increase in regulated substances due to the 2024 amendment of the Industrial Safety and Health Act, coupled with the introduction of alternative products and changes in suppliers stemming from the blockade of the Strait of Hormuz, has made reducing management workload through digitization an urgent necessity.

Under the current SDS Digitization Subsidy, eligible companies can receive a subsidy of 50% of the introduction costs (up to 1 million yen) when implementing Smart SDS from July 2026 onwards, thereby strengthening their chemical substance management.

Through this subsidy, we aim to support sound corporate operations by providing digitalization opportunities even to small and medium-sized enterprises that have found it difficult to introduce paid systems, and to promote the optimization of information management across the entire chemical supply chain. Furthermore, we aim to increase the number of companies implementing Smart SDS to approximately three times the current number, reaching 300 companies, during the subsidy period.

Dynagon is also offering free consultations for companies considering utilizing the subsidy, covering the eligibility for Smart SDS implementation and the application process.

Moving forward, Dynagon will continue to develop its business with the mission of "Driving mechanisms that promote a healthy society with technology," aiming to eradicate accidents caused by chemical substances.

*1: Conditions for receiving the subsidy are detailed in the "Requirements for Eligible Companies" section. *2: Detailed in the "What is SDS?" section.

Overview of SDS and the Environment Surrounding SDS

- What is SDS

SDS is a document aimed at preventing accidents caused by chemical substances, and it contains information on the hazards and risks of chemical products using a globally standardized format. For transactions of regulated chemical substances as defined by each country, companies that transfer or provide chemical substances are obligated to provide SDS, and companies that purchase or use them are obligated to conduct risk assessments based on the information in the SDS.

- Impact of the Strait of Hormuz Issue on Chemical Substance Management

Amid rising concerns about naphtha procurement due to escalating tensions in the Middle East, the chemical supply chain is seeing companies change suppliers and consider alternative products. When changing suppliers or using alternative products, safety management is required through a wide range of tasks, including not only negotiations on availability and pricing but also confirmation of SDS for each raw material, verification of compliance with Japanese laws and regulations, internal sharing, and re-execution of risk assessments.

In a survey conducted among 100 companies, including chemical manufacturers and trading companies, regarding the impact of naphtha concerns (*3), approximately 54% of companies responded that "changes in suppliers/procurement routes (and selection/procurement of alternative products) due to naphtha concerns are affecting chemical substance management operations."

*3: A survey conducted by our company in June 2026 on chemical manufacturers and trading companies regarding the impact of naphtha concerns on practical operations.

- Increased Burden on Field Staff Due to Amendments to the Industrial Safety and Health Act

The Industrial Safety and Health Act was amended in 2024 as a regulatory reinforcement measure to suppress major accidents, and the scope of regulated chemical substances is being gradually expanded. As a result, the number of substances for which SDS must be prepared has increased from 674 in 2016 to approximately 2,300 from April 2026 onwards, nearly four times the previous number. Furthermore, the workload for field staff managing SDS has also increased with the rise in the number of regulated substances.

In practice, companies providing chemical products must investigate which of the approximately 2,300 SDS-regulated substances their products contain above specified levels. If they do, they must accurately understand over 20 related laws and regulations and then record this information one by one in the SDS. Additionally, companies purchasing chemical products are obligated to refer to the provided SDS when using the relevant chemicals, conduct risk assessments and implement mitigation measures, and store these records for three years. This results in an increase in workload that exceeds the rate of increase in regulated substances.

About the SDS Digitization Subsidy

- Subsidy Overview

The SDS Digitization Subsidy is a system designed to support the introduction of systems that organize SDS information, which is currently created and managed in various formats by different companies, into a common data structure, enabling smooth exchange between companies and systems.

It was launched in 2025 to promote the exchange of SDS data in an optimal format, accelerate the sharing of hazard and risk information across the supply chain, thereby promoting autonomous chemical substance management and preventing chemical accidents.

- Subsidy Details

Eligible small and medium-sized enterprises can receive a subsidy of 50% of the introduction costs, up to a maximum of 1 million yen, when introducing systems that meet the requirements. For cloud services, including "Smart SDS," the subsidy covers usage fees for three years.

- Requirements for Eligible Companies

The requirements for eligible companies are as follows:

Industry

Conditions = Upper limits for capital and number of employees

1 Manufacturing and other industries (excluding 2-4)

- Capital amount or total investment amount of 300 million yen or less - Number of regularly employed workers of 300 or less (meets either of these conditions)

2 Wholesale trade

- Capital amount or total investment amount of 100 million yen or less - Number of regularly employed workers of 100 or less (meets either of these conditions)

3 Retail trade

- Capital amount or total investment amount of 50 million yen or less - Number of regularly employed workers of 50 or less (meets either of these conditions)

4 Service industry

- Capital amount or total investment amount of 50 million yen or less - Number of regularly employed workers of 100 or less (meets either of these conditions)

- Application Period and Procedure

The application period for fiscal year 2026 grants will begin on July 1, 2026. The end date may change depending on the progress of introductions utilizing the subsidy, so please confirm based on the official announcement of the system. Companies wishing to use the SDS Digitization Subsidy should follow the steps below to apply:

Confirm if the system to be introduced meets the subsidy requirements

Decide on introduction and obtain an estimate

Submit an online grant application via jGrants (https://www.jgrants-portal.go.jp/)

Grant review

Grant approval

Contract and system implementation

Subsidy claim

Subsidy payment to the designated account

*Both the grant review and subsidy payment are expected to take approximately one month each.

Certified Proprietary Services

- Smart SDS Make

Smart SDS Make is a cloud service that supports the creation and revision of SDS. It can automatically generate SDS, which traditionally took several hours per document using Word or Excel, by simply inputting five items into the system. In addition to new creation, it accelerates the extensive revision work required during legal amendments, leading to improved reliability and safety through prompt information sharing with business partners.

- Smart SDS Check

Smart SDS Check is a cloud service that allows for the digitalization of SDS and the management of risk assessment logs on the cloud, tasks that were previously performed manually. By integrating SDS and risk assessment management, it streamlines and enhances the rigor of safety management for workers. Digitized SDS enable rapid sharing of content information with business partners, contributing to thorough information management across the entire supply chain.

- Service Details

Smart SDS Make: https://smartsds.jp/ Smart SDS Check: https://check.smartsds.jp/

About Dynagon Inc.

Dynagon Inc. operates under the mission of "Driving mechanisms that promote a healthy society with technology," and currently provides SDS-related services that contribute to the eradication of accidents caused by chemical substances.

Company Name

Dynagon Inc. (https://www.dynagon.jp/)

Business Activities

Development and sales of chemical substance management software "Smart SDS"

Representative Director

Shingo Sakamoto

Location

2-13-45 Kamiosaki, Shinagawa-ku, Tokyo

Established

May 15, 2023