| Risks related to raw material procurement, exchange rates, etc. |
- Increased procurement costs due to changes in the quality of main raw materials and market fluctuations
- Increase in procurement costs due to fluctuations in exchange rates, sea freight, etc.
- Inability to procure supplies or increased procurement costs due to geopolitical risks and regulations in each country
- Increased procurement costs due to increased demand for biofuels and other uses
- Difficulties in securing a stable supply of raw materials due to reduced yields and changes in quality caused by rising temperatures and abnormal weather
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- Transactions in a position that is considered to have a competitive advantage within the scope of raw material purchasing regulations and foreign exchange forward contract management regulations.
- Hedging transactions using futures market pricing and foreign exchange contracts, etc.
- Research and recruitment of new raw material production areas and suppliers
- Implementing initiatives through Oil Refining Partners Japan Co., Ltd. to ensure a stable supply of oils and fats, fats and oil cakes
- Improve profitability by revising product prices based on costs and reducing expenses
- Promoting sustainable procurement activities throughout the supply chain
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| Risks related to natural disasters, infectious diseases, accidents, etc. |
- Casualties to employees and damage to facilities and equipment caused by large-scale earthquakes, typhoons, torrential rains, fires, explosions, and other accidents
- Suspension of operations and disruption of product supply due to the spread of infectious diseases
- Difficulty in continuing business activities due to supply chain disruptions and social infrastructure outages
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- Strengthening response capabilities by regularly reviewing crisis management systems and business continuity plans (BCPs)
- Efficient business operations such as remote work
- To meet stable demands, we will secure subcontractors and partners to create a multi-track production and supply system, ensure adequate inventory, and speed up communication and information sharing with customers.
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| Risks relating to overseas expansion |
- Adverse changes in laws, regulations, tax systems, etc. in the regions in which we operate
- The occurrence of conflicts and terrorism, changes in political and social situations, and natural disasters
- Occurrence of accounting fraud and illegal acts due to poor governance at overseas subsidiaries
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- Obtaining information on the laws and regulations of each country and overseas risks from external consultants and Group companies operating overseas, and implementing prompt responses
- Strengthening internal controls and implementing regular audits
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| Risks related to product safety, quality and stable supply |
- Voluntary recalls due to health hazards to customers, violations of laws regarding labeling, contamination with foreign matter, etc., as well as food fraud and data tampering
- Violation of laws and regulations related to quality and food safety by external suppliers, business interruption, production delays, and shortages due to defective products
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- Operation of a quality management system based on ISO9001 (reducing quality risks by implementing quality assessments and strengthening systems at the product development stage)
- Appropriate operation and confirmation through ISO22000 certification and quality audits
- Implementation of continuous employee education
- Product development and research and development that reflect customer feedback
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| Logistics risks |
- Logistics failure due to lack of appropriate logistics cost management, such as stagnation of product supply or significant delivery delays due to lack of drivers and cargo handling workers or inability to secure delivery vehicles.
- Suspension of production and shipping due to delays or interruptions in the delivery of raw materials and packaging materials
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- improving the working environment by improving incidental work outside of delivery operations, reducing long waiting times, systematically securing vehicles by extending lead times, and setting appropriate rates.
- Appropriate response to changes in laws and regulations, etc.
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| Risks related to information leakage and cyber security |
- Unauthorized access, computer virus infection, information leakage, falsification, or loss due to ransomware, etc., and the suspension of ICT (※1) infrastructure and production lines, etc.
- Inadequate response when an incident occurs
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- Introduction of a system to prevent unauthorized intrusion into the company network
- Raise and thoroughly inform employees about security awareness through e-learning, etc.
- Response to incidents (Continuous strengthening of CRIST)
- Improving security measures for systems that handle personal information to prevent information leaks
- Promoting the transition to a zero trust security platform
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| Climate change/environmental risks |
- Increase in production costs due to stricter CO2 emission regulations
- Decline in corporate value due to lack of environmental measures and violation of environmental laws and regulations
- Loss of social trust due to inadequate response to biodiversity based on the TNFD approach
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- Promoting ESG Management that is integrated with business
- Resource and energy conservation, reduction of CO2 emissions, elimination of plastics, effective use of water resources
- Maximizing resource usage efficiency through the use of AI in the value chain
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| Human rights risks |
- Decline in corporate value due to inadequate human rights measures in the supply chain
- Harassment and other human rights violations
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- Understand supply chain sustainability issues and implement improvements by effectively utilizing external programs
- Ensuring traceability in raw material procurement
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| Risks relating to securing human resources and labor |
- Shortage of highly specialized human resources, human resources with diverse values, and human resources who will lead the next generation, due to continuous recruitment and training not proceeding as planned due to a decline in the working population, etc.
- Loss of corporate value due to workplace accidents, violations of labor-related laws and regulations, labor troubles, etc., claims for damages, etc.
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- Maintaining and improving a comfortable working environment, building and appropriately operating a fair personnel and treatment system
- Developing highly specialized human resources and human resources who will be responsible for the next generation of management
- Promoting diversity through active Participation of Women and post-retirement employment extension system, etc.
- Implementing safety and health education, establishing a safety and health management system, improving the working environment, and responding quickly when an accident occurs.
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| Risks related to financing |
- Increase in interest burden due to rise in market interest rates
- Difficulty in raising funds due to financial market turmoil
- Difficulties in raising funds if ratings are downgraded
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- Selecting a comprehensive funding method based on the nature of funding demand, financial market environment, long-term balance, funding cost, diversification of procurement sources, etc.
- Reduce interest rate fluctuation risk by combining financing with fixed interest rates through corporate bonds and long-term loans
- Understand the scale of capital impairment risk through continuous monitoring of assets with potential for impairment and deferred tax assets
- Improving capital efficiency through thorough asset reduction, including working capital management and reduction of cross-shareholdings
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| Risks related to impairment losses on goodwill and fixed assets |
- Poor performance of acquired subsidiaries, capital participation, etc., and significant failure to achieve business plans
- Decrease in the fair value of fixed assets
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- Deliberations regarding the appropriateness of the acquisition price at Investment and Financing Committee and Executive Committee and follow-up to realize post-acquisition synergies
- Regular monitoring of the macroeconomic environment
- Estimation of future cash flows based on business plan
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| Risks related to intellectual property |
- Loss of competitive advantage due to insufficient protection of our intellectual property rights against similar technological developments by competitors or infringement of our intellectual property rights by competitors
- Injunction against sales and claims for damages due to infringement of third party intellectual property rights
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- Early discovery of inventions and quick and appropriate acquisition of intellectual property rights by strengthening mutual cooperation with related departments
- Building a system to prevent infringement of third party intellectual property rights
- Ongoing training for employees regarding intellectual property rights
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| Compliance risks |
- Occurrence of acts that violate laws and regulations or social norms, fraud, harassment, etc.
- Business constraints due to changes or additions to laws and regulations
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- Formulation of the "J-OIL MILLS Code of Conduct" aimed at compliance with laws, regulations and social norms, and thorough dissemination through in-house training
- Early detection and correction of fraud, harassment, etc. by establishing internal and external whistleblowing desks
- Pay close attention to information on legal revisions in order to respond to changes in laws and regulations
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| Risks related to the establishment of Group management structure |
- Additional costs may be incurred in making improvements if significant deficiencies or weaknesses are identified in Group governance or internal controls within Group
- Dilution of synergy effects due to inappropriate planning and review of Group strategies
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- Implementing reports to ensure the effectiveness of internal controls of Group companies
- Promote Group wide support system, including training involving Group companies
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