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Risk Management

J-Oil Mills value risk management through accurate identification, evaluation, and management of risks, as well as on compliance. In 2020, we reorganized our organizational structure to ensure more thorough enforcement and implementation of risk management and compliance. We clarified the functions of the Ethical and Compliance Committee and Risk Management Committee, which had existed up to now, and established the Management Risk Committee as a new organization providing instruction and reporting to the Management Meeting, and strengthened its functions and activities.
The Management Risk Committee responds comprehensively and promptly to potential risks that could affect management, crises such as compliance violations (manifested risks) and grave crises, and strives to prevent and reduce their impact. Under the Management Risk Committee, we established the Compliance Subcommittee with missions including to raise employee awareness and deal with compliance violations, and the Risk Management Subcommittee with a mission to anticipate and prevent risks and respond to crises.
All future-oriented statements in the following discussion constitute judgments of the J-Oil Mills Group based on information available as of March 31, 2020.

Risks related to the business environment


Responses to Risks

1. Effects of raw material procurement and impact of exchange rates

Market fluctuations in grains, exchange rates, maritime freight, meals, etc.

  • ・Trading in a position that we believe offers us a competitive with advantage, within the scope of material purchase regulations and regulations for the application of forward foreign exchange contracts.
  • ・Hedging by means of futures pricing and forward exchange contracts.
  • ・Searching for new raw material production areas.
  • ・Appropriate price negotiations through sales activities.

2. Spread of infectious diseases

Spread of infectious diseases such as COVID-19

  • ・Preventing the spread of infections in the company by promptly setting up an Infectious Disease Control Headquarters in consideration of safety, and implementing thorough hygiene management and efficient business operations such as staggered work hours and telecommuting.
  • ・Minimizing the frequency of contact between employees, such as by instituting a team system.
  • ・Establishing a diversified production system by securing contractors and partners for stable supply.

3. Natural disasters

Disasters such as large-scale earthquakes and typhoons

  • ・Revising our business continuity plan (BCP) in preparation for disasters other than large scale earthquakes.

4. Import duties

Lower tariffs on soy bean oil and canola oil from overseas

  • ・Developing high value-added products such as long-life oils and oils with seasoning and cooking functions for home meal replacement manufacturers and convenience stores.
  • ・Accelerating J-Oil Mills’ original proposals such as texture improvement by combining starch, margarine, and powdered oils and fats, etc.

5. Drop in demand for oils, fats, and meal products

  • ・Decrease in sales volume of soybean meal and canola meal if the domestic livestock and dairy farming industries are severely impacted by an influx of low-cost products from overseas due to tariff reductions on livestock and dairy products, or by an infectious livestock disease.
  • ・Decline in consumption of oils and fats due to factors such as a decline in opportunities to cook food using oil at home, an increase in diets that reduce oil and fat intake, and the spread of cooking methods that do not use oil.
  • ・Practicing precise raw material procurement by scrutinizing demand forecasts.
  • ・Changing business structure from quantity to quality, which is less vulnerable to the demand for meals.

6. Declining and aging population in Japan

Decrease in product demand with market contraction due to continued declining birthrate and aging population

  • ・Accelerating the development of new products in response to changes in demand, for example as a result of greater awareness of health with an increasing senior population.
  • ・Increasing international competitiveness through business alliances.

7. Potential risks in overseas expansion

Risks inherent in overseas expansion including unexpected revisions of laws, regulations, and tax systems, political and social risks such as conflict and terrorism, and the potential occurrence of natural disasters.

  • ・Implementing quick responses by obtaining overseas risk information from external consultants, overseas information services, the Ministry of Foreign Affairs’ overseas safety website, and group companies that have expanded overseas.

8. Environmental and social issues

Damage to corporate value if environmental measures are insufficient, impact on financing and securing of employees

  • ・Advancement of ESG management as an integral part of our business.
  • ・Minimizing environmental impact by reducing our resource and energy use as well as our CO2 emissions, seeking to go plastic free, using water resources effectively, and utilizing AI in the value chain.
  • ・Maximizing the efficiency of our resource use through zero emissions.

Risks related to business activities


Responses to Risks

1. Effects of information leakage and unauthorized access

Occurrence of information leaks or alteration of data as a result of unauthorized access or infection by computer viruses

  • ・Implementing strong security measures.
  • ・Regularly monitoring the management status of confidential documents within the company.
  • ・Regularly conducting information management education programs for our employees via e-learning.
  • ・Strengthening our monitoring of cyber-attacks from outside the company.

2. Food safety

Occurrence of distribution withdrawal and recall due to health hazards to customers or violation of laws and regulations such as those pertaining to labeling, occurrence of food fraud or alteration of data

  • ・Reducing quality risks by operating a quality management system based on ISO 9001, conducting quality assessments at the product development stage, and strengthening the system.
  • ・Checking for alteration of data, food fraud, etc. in quality audits of our factories and affiliated companies.
  • ・Continuing employee education.
  • ・Strengthening R&D activities and efforts to reflect opinions received through our Customer Liaison Office in products.

3. Securing human resources

Insufficient recruitment of human resources with the high level of expertise required in each field, or inadequate systematic promotion of the securing, development, and positioning of human resources who will lead the next generation

  • ・Increasing our corporate value through ESG management and promotion of the SDGs.
  • ・Development of human resources with a high level of expertise and human resources who will be responsible for management of the next generation by maintaining and improving a comfortable workplace, and establishing and properly administering a fair personnel and treatment system.
  • ・Further advancing diversity through promotion of participation by women and the post-retirement employment extension system.
  • ・Further advancing work-life balance by revising work styles.

Legal regulations and other risks


Responses to Risks

1. Compliance

Occurrence of acts contrary to laws, regulations and social norms, occurrence of fraud, harassment, etc., business constraints due to unforeseen regulatory changes or additions

  • ・Formulating the J-Oil Mills Code of Conduct, which is aimed at compliance with laws and regulations and social norms, and ensuring thorough awareness of it through in-house training.
  • ・Establishing an internal and external reporting liaison system for early detection and correction of fraud and harassment.
  • ・Keeping a close watch on information on legislative amendments in order to respond to changes in laws and regulations.

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