Prima Meat Packers, Ltd.

A key risk in which surges in market prices for livestock products, packaging materials, fuel costs, logistics costs, etc. affect business performance. This also includes the invocation of safeguard measures on imported raw meat and increases in feed prices at farms. The Group addresses this through purchasing from multiple suppliers, securing alternative raw materials, maintaining appropriate inventory levels, and appropriately reflecting cost changes in product selling prices.

Fluctuations in exchange rates affect business performance in the import of raw materials and products from the U.S., Europe, China, and elsewhere. Fluctuations also have an impact when translating the local-currency-denominated results of overseas subsidiaries into yen. The Group addresses this through forward foreign exchange contracts aimed at curbing short-term fluctuations and by appropriately reflecting exchange rate impacts in product selling prices.

A key risk in which serious quality problems in manufactured or sold products, prolonged quality issues, or contamination with allergenic substances, if they occur, could make it difficult to continue business operations due to harm to customer health and loss of public trust. The Group addresses this by implementing quality control methods such as HACCP, ISO22000, and FSSC22000, disclosing information via product packaging and its website, and establishing a system for rapid information communication and recurrence prevention when problems occur.

If tangible and intangible fixed assets deviate from business plans and fail to generate the expected cash flows, this could adversely affect business performance and financial condition. Key factors include acquired subsidiaries failing to achieve their business plans and business-use assets deviating from plans. The Group addresses this through deliberation and decision-making on acquisition amounts at management meetings and similar bodies, establishing post-acquisition management methods, and monitoring progress through investment project reviews.

A key risk in which violations of the Food Sanitation Act, Food Labeling Act, import/export-related laws, the Antimonopoly Act, labor-related laws and regulations, environmental recycling-related laws, etc. could result in severe consequences such as administrative sanctions, loss of trust, and trading restrictions. The Group addresses this through compliance with quality control methods, awareness-raising and educational activities by the Compliance Committee, establishment and thorough implementation of internal rules, and operation of an environmental management system.

A key risk in which natural disasters such as climate change (typhoons, torrential rains, etc.), earthquakes, and volcanic eruptions, accidents such as fires and explosions, or incidents such as terrorism and armed conflict occurring at the Group or its suppliers could cause delays or suspensions in product supply and halt production and logistics operations, resulting in severe adverse effects on business performance. The Group addresses this by securing appropriate inventory levels, promoting purchasing of key materials from multiple suppliers and multiple regions, and strengthening and conducting drills for business continuity plans.

A key risk in which the spread of infectious diseases could cause production lines and business sites to shut down, making it difficult to continue business activities and resulting in severe adverse effects on business performance. The Group addresses this through both infection prevention measures for employees and their families (health management, restrictions on meetings, prohibition of business trips, etc.) and business continuity measures (strengthening business continuity plans, remote work, production support from other departments, etc.).

A key risk in which a large-scale system failure, including cyberattacks, could halt production lines and product supply, and lead to the leakage of corporate, business partner, and personal information, making it difficult to continue business activities. The Group addresses this by establishing backup systems, establishing methods for receiving data at multiple locations, strengthening cybersecurity, and strengthening and conducting drills for business continuity plans.