Shimadaya Corporation

In the procurement of main raw materials such as wheat flour, packaging materials, and energy, changes in international conditions, exchange rate fluctuations, climate change, geopolitical risk, and labor shortages in the logistics industry may cause procurement delays, shortages, or sharp price increases. As countermeasures, the company is continuing and diversifying its centralized purchasing system, setting strategic inventory levels, raising the ratio of domestically produced raw materials, adding redundancy to production processes (alternative factories and lines), and promoting dispersion of logistics bases and leveling of deliveries.

Due to the declining working-age population caused by the falling birthrate and aging population, as well as increasing fluidity in the employment environment, if hiring falls short of plan or unexpected personnel outflows occur, this may disrupt production and sales systems and affect business results. In addition to improving engagement through wage revisions, workplace environment improvements, and diverse hiring, the company is addressing labor shortages and improving productivity through labor-saving investments and operational efficiency improvements.

If a quality incident such as food poisoning, foreign object contamination, or allergen mislabeling occurs, it may materially affect business results and financial condition through large-scale product recalls, product liability compensation costs, and sales declines due to loss of trust. The company works to prevent large-scale incidents and secondary complaints through education and prevention measures based on ISO9001 and FSSC22000 operations, along with establishing a rapid response system for emergencies.

Domestic population decline, the falling birthrate and aging population, rising prices, and changes in food-related needs and preferences such as gluten-free demand may affect business results and financial condition. Under the development keyword "7K" (health, convenience, high quality, stockpiling, economy, domestic production, and environment), the company is promoting product development and sales channel expansion tailored to changes in the social environment and consumer needs across household use, commercial use, and overseas channels.

If unauthorized access or ransomware causes leakage of personal information or confidential information, or suspends order processing operations, this may affect business results through sales declines due to loss of trust and increased costs such as damages. In addition to preventing unauthorized access, strengthening monitoring, and improving response capability based on ISO27001 operations, the company has established a system backup framework, formulated incident response manuals, and conducts emergency response training.

If environmental regulations such as carbon pricing are further tightened, this may affect operating results and financial condition through increased cost burdens. Based on ISO14001 operations, the company is promoting CO2 emission reductions through waste reduction via improved demand forecasting and extended product shelf life, introduction of energy-saving equipment, and transport efficiency improvements such as modal shift.

If operations at multiple production sites are suspended due to earthquakes, fires, typhoons, industrial accidents, infectious disease outbreaks, or other causes, this may affect business results; in particular, during infectious disease outbreaks, a shrinking food service market may impact earnings in the commercial use business segment. The company seeks to mitigate impact by designating alternative factories based on its BCP, continuing equipment inspections, thoroughly managing employee health and hygiene, and promoting sales measures responsive to changes in the market environment.

For owned assets such as land, buildings, and machinery, if investment recovery becomes unlikely due to sudden changes in the external environment or declines in market value, an impairment loss may be recorded, affecting financial condition and operating results. The company carefully examines profitability and investment recoverability based on business plans at the time of asset acquisition, and continues to monitor the operating status and profitability of each site after acquisition, working to optimize production systems in response to demand trends and improve asset efficiency.

If violations of various laws and regulations such as the Food Sanitation Act, Food Labeling Act, Act against Unjustifiable Premiums and Misleading Representations, and Product Liability Act occur, or if litigation arises from infringement of third-party intellectual property rights, this may affect business results and financial condition. The company conducts company-wide information gathering and periodic checks to ensure compliance with laws and regulations, and for trademark management, appropriately confirms infringement risks through regular reporting to the executive officers' meeting and guidance from specialists.

If the company fails to adequately respond to changes in industry and consumer needs, or if its competitive advantage is undermined by competitors' price cuts, major new product launches, or strengthened advertising and promotion, this may affect business results and financial condition through decreased market share and reduced profitability. The company addresses this by strengthening sales capabilities through enhanced customer relationships and proposal capability, promoting the development of value-added products, improving development and technical capabilities, and strengthening cost competitiveness through productivity improvements.