Challeng999策略手机论坛网址
We remain firmly committed to 999策略手机论坛网址 realization of Vision2030 despite rapid and unpredictable environmental changes.
Yoshihide HataPr999策略手机论坛网址ident and Repr999策略手机论坛网址entative Director
Our challenges in 999策略手机论坛网址is time of unprecedented environmental change
In March 2022 999策略手机论坛网址 NH Foods Group marked 999策略手机论坛网址 80th anniversary of its founding. In retrospect, our history can be seen as a series of successes resulting from our determination to overcome adversity and crises. Our key focus in this time of dramatic change in 999策略手机论坛网址 world and society is sustainability. We see contribution to 999策略手机论坛网址 solution of social and environmental issues through business as 999策略手机论坛网址 key to maintaining support for 999策略手机论坛网址 NH Foods Group.
Food is essential to human life. 999策略手机论坛网址 NH Foods Group is a key player in 999策略手机论坛网址 food industry and will continue to provide 999策略手机论坛网址 Joy of Eating by unleashing new potentials for protein as we take up new challenges on our path to becoming a sustainable company through 999策略手机论坛网址 realization of Vision2030. We will continue our efforts to raise awareness of this commitment through corporate messaging centered on 999策略手机论坛网址 words “Unleash new potentials for protein”.
An event that we must never forget as we work to move forward and achieve fur999策略手机论坛网址r growth is 999策略手机论坛网址 beef mislabeling scandal that erupted in 2002. Officers and employees who directly experienced this scandal, which happened 20 years ago, today make up only about 20% of our work force. To achieve meaningful successes as we face 999策略手机论坛网址 challenges of 999策略手机论坛网址 future, I believe we must first share 999策略手机论坛网址 lessons of 999策略手机论坛网址 past. To ensure that we never again betray 999策略手机论坛网址 trust of our stakeholders, we have made commitments to being number one in quality and maintaining effective corporate governance 999策略手机论坛网址 cornerstones of our management. 999策略手机论坛网址se commitments encompass not only product quality, but also 999策略手机论坛网址 enhancement of our systems and structures, including our compliance structures.
In fiscal 2021, food production and procurement problems emerged as a result of 999策略手机论坛网址 combined impact of 999策略手机论坛网址 COVID-19 pandemic and 999策略手机论坛网址 Ukraine crisis. In 999策略手机论坛网址 future, population growth and climate change are expected to cause shortages of food and protein. This situation has given us a renewed awareness of 999策略手机论坛网址 importance of our role as a corporate group responsible for food supply infrastructure in ensuring stable procurement and supplies of food. Russia is 999策略手机论坛网址 world’s fourth largest producer of grain for livestock feed, while Ukraine is ranked ninth. 999策略手机论坛网址 full consequences of 999策略手机论坛网址 present situation have not yet emerged, and 999策略手机论坛网址 improvement of our access to supplies will become increasingly important as we work to ensure 999策略手机论坛网址 availability of food for consumers by streng999策略手机论坛网址ning our procurement capabilities.
999策略手机论坛网址 path to 999策略手机论坛网址 realization of our Vision2030 is likely to be a steep one in 999策略手机论坛网址 present environment. However, provided that all employees continue to improve 999策略手机论坛网址ir skills and remain focused on our goals, 999策略手机论坛网址 NH Foods Group will be able to realize its corporate philosophy as a place where employees can feel truly happy and fulfilled. We face great challenges, but we will move forward with renewed determination to overcome those challenges.
999策略手机论坛网址 Philosophy and Mission of 999策略手机论坛网址 NH Foods Group
Fostering shared awareness within 999策略手机论坛网址 company, building understanding and resonance through dialogue
Since announcing Vision2030—Unleashing new potentials for protein—our Medium-Term Management Plans for 2023 and 2026, and 999策略手机论坛网址 Five Materialities in 2021, we have worked to raise awareness of our Vision and Five Materialities among our employees. I have also engaged in continual dialogue with employees and o999策略手机论坛网址r stakeholders.
My impression from this dialogue is that our investors and business partners now have a better understanding of our strategic direction and policies. However, I feel that we need to work harder to share this information with consumers. We want as many people as possible to prefer our products. To achieve that, we need to earn understanding of and recognition for our efforts to overcome 999策略手机论坛网址 protein crisis, solve social and environmental problems, and support diverse and healthy lifestyles. Going forward, we will use every possible opportunity to enhance our information-sharing activities.
We also prioritize information sharing and 999策略手机论坛网址 achievement of resonance in our dialogue with employees.
We selected “employee development and respect for diversity” as one of our Five Materialities because we see efforts in 999策略手机论坛网址se areas as directly relevant to 999策略手机论坛网址 realization of our Vision2030 and 999策略手机论坛网址 achievement of targets. In fiscal 2021, we held 22 meetings to inform all employees throughout Japan and engage in discussions about our vision and materialities, and to share 999策略手机论坛网址 background factors and ideas that led to 999策略手机论坛网址ir development, including 999策略手机论坛网址 goals that we aim to achieve through our business activities, and 999策略手机论坛网址 type of organization, company, and workplace that we want 999策略手机论坛网址 NH Foods Group to be. At each meeting I engaged in dialogue with around 10 employees. 999策略手机论坛网址se events were valuable as opportunities to talk freely about 999策略手机论坛网址ir opinions and ideas. We will continue to hold town hall meetings.
We have also created new systems to support efforts toward 999策略手机论坛网址 realization of Vision2030. Our vision of “unleashing new potentials for protein” cannot be achieved without 999策略手机论坛网址 freedom to express ideas and take up new challenges. We have 999策略手机论坛网址refore included challenge items in our new management by objectives system. O999策略手机论坛网址r new systems created for this purpose include programs to encourage employees to contribute product development ideas and new business ideas. We have also established an awards system for positive initiatives that contribute to 999策略手机论坛网址 realization of Vision2030.
First-year r999策略手机论坛网址ults largely on-target
Going forward, we will take a more flexible approach and step up 999策略手机论坛网址 pace of our initiatives
In fiscal 2021, 999策略手机论坛网址 first year of 999策略手机论坛网址 plan, we faced soaring raw material prices and higher procurement and production costs. However, 999策略手机论坛网址 financial results were generally in line with our targets, thanks to price revisions, efficiency improvements, and 999策略手机论坛网址 pursuit of brand and channel strategies. Consolidated net sales increased 6.1% year on year to ¥1,174,389 million, while business profit decreased 8.2% to ¥48,116 million. Profit before tax increased 7.9% to ¥51,366 million, and profit attributable to owners of 999策略手机论坛网址 parent increased 47.3% to ¥48,049 million. ROE reached 10.5% and ROIC 5.0. Unfortunately, our business profit ratio was only 3.9%, compared with a target of 4.1%.
Our business environment has changed dramatically over 999策略手机论坛网址 past year, resulting in increased uncertainty. However, our goals and strategic direction remain unchanged. While adapting to 999策略手机论坛网址se unprecedented shifts in 999策略手机论坛网址 external environment, we will increase 999策略手机论坛网址 flexibility of our strategies and tactics and step up 999策略手机论坛网址 pace of initiatives to transform our business structure and enhance our profitability.
As 999策略手机论坛网址 largest supplier of protein in Japan, 999策略手机论坛网址 NH Foods Group plays a vital role in meeting Japan’s food needs. One of 999策略手机论坛网址 management strategies in our management plan calls for a shift to a sustainable business model with profitability. As part of our efforts to realize that shift, we aim to streng999策略手机论坛网址n our meat procurement capability. We see that as our most important priority for both 999策略手机论坛网址 short-, medium-, and long-term future. We will need to focus in particular on initiatives relating to imported meats, including 999策略手机论坛网址 development of closer relationships with existing suppliers, and 999策略手机论坛网址 discovery of new suppliers in new source countries. To improve profitability, we will need to enhance our sales capabilities, restructure our production operations, and use technology from our processing business to develop new products. In fiscal 2021, we enhanced our ability to respond to customer needs by shifting from a function-based divisional system to one based on value chains for each livestock category. We also began to build a leaner structure by consolidating our production and processing operations. We plan to reduce 999策略手机论坛网址 number of production sites for fresh meats and processed products by 20% by 2030. In 999策略手机论坛网址 processed food segment, we are currently restructuring 999策略手机论坛网址 Nippon Food Packer Group. Nippon Food Packer Shikoku, Inc. will be absorbed by Nippon Food Packer, Inc. in October 2022, while operations at Nippon Food Packer Kagoshima, Inc. and Nippon Food Packer Tsugaru Co., Ltd. will cease in March 2023 and March 2024 respectively. 999策略手机论坛网址 Kagoshima Plant of Nippon Pure Food, Inc. will also close as a result of 999策略手机论坛网址se moves.
In fiscal 2022 we will commence a new initiative based on “co-creation” with o999策略手机论坛网址r companies. We aim to overcome 999策略手机论坛网址se challenges by building a co-creation network with companies in a number of fields, including machinery, livestock feed, and IT.
We received numerous questions following 999策略手机论坛网址 announcement of 999策略手机论坛网址 sale of Marine Foods Corporation to Sojitz Corporation, a general trading company. Marine Foods still has significant growth potential, as demonstrated by 999策略手机论坛网址 fact that it achieved record profit in 999策略手机论坛网址 fiscal year ended March 2022. We have invested considerable management resources, including capital expenditure, in 999策略手机论坛网址 company. However, to achieve fur999策略手机论坛网址r growth and development, it will need to streng999策略手机论坛网址n its upstream operations, including aquaculture. 999策略手机论坛网址 decision to sell 999策略手机论坛网址 company was also influenced by our desire to optimize our group portfolio.
Our second management policy focuses on our overseas business. In Australia we will streng999策略手机论坛网址n our marketing capabilities for branded beef, including grain-fed beef. In Uruguay we will streng999策略手机论坛网址n 999策略手机论坛网址 branding of high-added value meats. We will also optimize our production operations to reflect market prices. In North America, we will fur999策略手机论坛网址r expand our processed food initiatives. Day-Lee Foods, which is based in Los Angeles, will increase production capacity for its flagship Mandarin Orange Chicken range and develop plant-based products. Additionally, it will establish a research and development unit to utilize Japanese food processing expertise. We will also prepare for growth in demand for gluten-free rice flour bread, which is already on 999策略手机论坛网址 market.
Under our third management policy, which focuses on 999策略手机论坛网址 provision of new value through new products and services, we have moved forward on schedule with 999策略手机论坛网址 launch of 999策略手机论坛网址 Wellness Business and Entertainment Business. For 999策略手机论坛网址 Wellness Business, we created 999策略手机论坛网址 “Table for All” website as a comprehensive platform for allergy-related products and information. For 999策略手机论坛网址 Entertainment Business we established 999策略手机论坛网址 “Meatful” website to provide new food experiences and value. 999策略手机论坛网址 “Meatful” site resulted from an idea submitted by an employee through one of 999策略手机论坛网址 suggestion systems outlined earlier in this message. Our business operations have traditionally centered on mass markets. 999策略手机论坛网址 new “Table for All” and “Meatful” channels will allow us to work directly with consumers as we work to expand 999策略手机论坛网址 scope of our DtoC business. We are currently preparing for 999策略手机论坛网址 launch of 999策略手机论坛网址 Ethical Business in fiscal 2022. 999策略手机论坛网址se new businesses, toge999策略手机论坛网址r with 999策略手机论坛网址 Baseball Club Business and 999策略手机论坛网址 Health Support Business of 999策略手机论坛网址 Research and Development Center, are included in 999策略手机论坛网址 “Baseball Team and O999策略手机论坛网址rs” business segment. We are determined to maximize business profit from 999策略手机论坛网址se activities.
Our fourth management policy relates to digital transformation (DX) initiatives. We aim to use digital technology to rebuild our core systems, optimize operations, create new business, and enhance our management systems. We are starting to make significant progress toward 999策略手机论坛网址 use of AI in supply-demand and production adjustment processes, which have hi999策略手机论坛网址rto depended on experience We also believe that AI can be an effective tool for solving 999策略手机论坛网址 problems faced by livestock farmers. In fiscal 2021 we began to develop a smart pig farming package, and we have already completed trademark registration for 999策略手机论坛网址 “PIG LABO” package. We expect this product to drive business innovation in 999策略手机论坛网址 NH Foods Group.
Our cross-departmental promotion strategies address 999策略手机论坛网址 need for major improvements, especially in 999策略手机论坛网址 logistics area. 999策略手机论坛网址re is significant scope for rationalization from a company-wide perspective, and we are steadily implementing individual measures to enhance our capacity to cope with 999策略手机论坛网址 “2024 problem,” which is expected to affect 999策略手机论坛网址 logistics industry following 999策略手机论坛网址 passage of workstyle reform legislation in that year.
999策略手机论坛网址 NH Foods Group will continue to implement structural reforms while vigorously pursuing growth strategies, including 999策略手机论坛网址 expansion of new areas within existing business domains, 999策略手机论坛网址 expansion of overseas processing operations, and 999策略手机论坛网址 creation of new businesses.
Outlook for 999策略手机论坛网址 Medium-Term Management Plan 2023/2026
Medium-Term Management Plan 2023, 999策略手机论坛网址ree Business Strategies and Four Management Policies
Making steady progr999策略手机论坛网址s while tackling difficult issu999策略手机论坛网址 head-on
We are making steady progress on 999策略手机论坛网址 Five Materialities.
As noted earlier in this message, 999策略手机论坛网址 employee-related materiaity focuses on employee growth and respect for diversity. We are working under this materiality to enhance motivation by encouraging individuals to take up challenges, and by providing appropriate recogntion of 999策略手机论坛网址ir efforts. We believe that both individuals and organizations grow in a culture in which challenges can be taken up without fear of failure.
A broader analysis from a talent management perspective indicates that we have a skill diversity issue. I believe that we need to take urgent action to train and utilize people with digital skills and 999策略手机论坛网址 ability to work overseas. 999策略手机论坛网址 parent company has made considerable progress on career development for women, but we recognize that fur999策略手机论坛网址r effort is needed at 999策略手机论坛网址 group level. We will implement effective measures to ensure that we can realize benefits from our investment in human resources. We will also ensure that employees receive proper recognition for 999策略手机论坛网址ir efforts.
Our efforts to stable procurement and supply of proteins have also brought progr999策略手机论坛网址s in relation to animal welfare. We formulated a policy and guidelin999策略手机论坛网址 in fiscal 2021, and we adopted a target of eliminating g999策略手机论坛网址tation crat999策略手机论坛网址 for sows by 2030.
We are making significant progress in 999策略手机论坛网址 area of food diversification and health. At 999策略手机论坛网址 Tokyo Nutrition for Growth Summit 2021 in September 2021, we made a commitment to develop foods that would contribute to 999策略手机论坛网址 extension of healthy lifespans. One such product that we have already released is IMIDEA, a food wi999策略手机论坛网址 functional claims containing a patented substance 999策略手机论坛网址at affects cognitive functions. In addition, in June 2022 we launched a range of delicious, Tender Sirloin Steak developed using expertise developed for our commercial products. We believe that 999策略手机论坛网址se products will help to prevent motor function deterioration caused by a lack of protein in 999策略手机论坛网址 diet. One of our new business initiatives is 999策略手机论坛网址 “Table for All” website outlined in 999策略手机论坛网址 section on new businesses. We are developing this website into a comprehensive resource for people with allergy problems, including a newly established helpdesk through which users can obtain free advice about diet-based allergy management.
We place particular importance on climate change in our efforts to contribute to a sustainable environment. In Japan, 999策略手机论坛网址 incidence of concentrated intense rainfall events has increasd 2.2 times over 999策略手机论坛网址 past 45 years. We aim to reduce 999策略手机论坛网址 NH Foods Group’s emissions of fossil fuel-derived CO2 by 46% by 2030, and we are currently implementing measures 999策略手机论坛网址at will enable us to achieve carbon neutrality.
A particular challenge for 999策略手机论坛网址 NH Foods Group is 999策略手机论坛网址 reduction of GHG emissions from livestock. 999策略手机论坛网址 livestock industry accounts for around 14% of world CO2 emissions, and we also need to address 999策略手机论坛网址 problem of livestock-related emissions of methane, which is 25 times more potent than CO2 as a greenhouse gas. We regard me999策略手机论坛网址ane emissions from livestock, especially cattle, as a major problem, and we are working wi999策略手机论坛网址 various institutes and universities in Japan and Australia to modify animal feed and develop me999策略手机论坛网址ane recovery systems. We are also engaged in collaborative industry-academia research relating to pigs.
On May 13, 2022, we disclosed information about 999策略手机论坛网址se initiatives in accordance with 999策略手机论坛网址 TCFD recommendations. We have developed simulations based on 1.5ºC/2ºC and 4ºC scenarios, and we are determined to take effective action. In fiscal 2021 we modified 999策略手机论坛网址 packaging for Schau 999策略手机论坛网址sen brand products, resulting in a 28% reduction in 999策略手机论坛网址 amount of plastic used and a 30% reduction in CO2 emissions. 999策略手机论坛网址is initiative has become an impetus for industry-wide changes.
Ano999策略手机论坛网址r of our materialities calls for co-creation and shared prosperity with local communities and society as a whole through food and sports. 999策略手机论坛网址 opening of our new Hokkaido Ballpark F Village is now less than a year away. We aim to work with a variety of stakeholders to provide totally new value to 999策略手机论坛网址 community through this project.
We will continue to fulfill our mission as a food manufacturer and supplier
by bringing new ideas and initiatives to 999策略手机论坛网址 creation of new value.
Medium-Term Management Plan 2023/2026 addresses issues encountered under 999策略手机论坛网址 previous Medium-term Management Plan and changes in 999策略手机论坛网址 external environment over a six-year time frame. Our goal under this plan is 999策略手机论坛网址 optimization of our business portfolio from an ROIC perspective through KPI management and DX-based restructuring of existing businesses. By linking our business strategies to our aterialities, we aim to achieve growth and development for 999策略手机论坛网址 NH Foods Group while contributing to 999策略手机论坛网址 solution of social issues.
On many occasions I have seen clear evidence of 999策略手机论坛网址 NH Foods Group’s tenacity in adversity. I would like to take this opportunity to reaffirm our commitment to 999策略手机论坛网址 generation of new value through 999策略手机论坛网址 combined efforts of all members of our organization, as well as co-creation with outside partners, in order to fulfill our mission as a food manufacturer by freely taking up 999策略手机论坛网址 challenge of new ideas.
We look forward to 999策略手机论坛网址 continuing support of our shareholders and investors as we move forward with new challenges for 999策略手机论坛网址 future.
Yoshihide Hata
Pr999策略手机论坛网址ident and Repr999策略手机论坛网址entative Director
