The Nisshin OilliO Group,Ltd.

Key raw materials such as soybeans, rapeseed, cacao, olive oil, and palm oil are imported entirely from overseas. If the procurement environment deteriorates due to abnormal weather, geopolitical risk, or policy trends in producing countries, stable supply of products may be disrupted. In response, the Group is diversifying producing countries and suppliers, securing procurement and inventory with an eye toward future demand, and conducting safety assessments of new production areas.

Raw materials (soybeans, rapeseed, cacao, etc.) are imported entirely from overseas, exposing the Group to risk from fluctuations in international raw material prices, as well as foreign exchange fluctuation risk associated with overseas business operations (Malaysia, Southeast Asia, Europe, etc.). The Group flexibly implements forward exchange contracts and futures hedging transactions, and seeks to mitigate the impact through appropriate pricing and manufacturing cost reductions.

Against a backdrop of heightened social interest in food quality and safety, if a quality problem occurs, it could affect corporate trust, business performance, and financial condition. The Group has built a rigorous quality assurance system, obtaining ISO9001 and FSSC22000 certification at its major domestic plants and GMP certification for some manufacturing processes.

If information systems for production control, logistics management, sales management, financial accounting, etc. are disrupted by cyberattacks or computer viruses, operational delays and information leakage could occur, leading to a loss of customer and market trust and affecting business performance. In addition to deploying security tools and conducting employee education and training, the Group has established response manuals and communication systems, and regularly evaluates and reviews these measures at Information Security Committee meetings.

If the Group's response to global warming countermeasures or the issue of marine plastic waste is delayed, it could affect corporate trust, business performance, and financial condition. The Group is promoting initiatives such as converting the Sakai Plant to 100% renewable energy electricity use, commencing operation of a high-efficiency gas turbine cogeneration facility compatible with hydrogen co-firing at the Yokohama Isogo business site, and beginning use of recycled materials in products through horizontal recycling (bottle-to-bottle) of oil-contaminated PET bottles.

Domestic selling prices in the Oils and Fats business generally track international market conditions, and trends in overseas product imports may also affect domestic selling prices, creating a risk that market fluctuations could affect business performance and financial condition. The Group strives to sell at prices appropriate to costs, promotes an improved sales mix through expanded sales of high value-added products, and implements necessary measures through monthly management plan progress reviews.

Realizing Vision 2030 requires personnel with diverse expertise, and a shortage of workers at manufacturing and logistics sites poses a significant risk to business continuity. In addition, employee health risks may affect productivity. The Group is expanding investment in talent development programs, recruiting external talent, promoting women's participation, and advancing health management, in addition to promoting operational efficiency and labor savings through the use of IoT and AI.

If officers or employees commit violations of laws or compliance standards, it could affect corporate trust, business performance, and financial condition. In addition to promoting understanding of the "Nisshin OilliO Group Code of Conduct" and conducting training programs, the Group comprehensively overhauled compliance monitoring in FY2025 to strengthen its issue-identification function, and is reflecting the issues identified in its measures.

If human rights issues occur involving the Group or its suppliers, or if procurement involving human rights problems takes place, it could affect corporate trust, business performance, and financial condition. In FY2025, the Group conducted SAQ surveys and face-to-face interviews with suppliers in the logistics and materials areas, and in FY2026 it plans to expand SAQ surveys to manufacturing contractors and raw material suppliers, and to promote human rights due diligence through a PDCA cycle in cooperation with overseas group companies.

If natural disasters such as earthquakes, tsunamis, or wind and flood damage, or large-scale accidents such as fires or explosions occur, damage to production sites and logistics facilities could disrupt the supply chain, hindering stable product supply and affecting business performance and financial condition. The Group works to reduce the impact through safety confirmation systems, BCP development, seismic reinforcement, revetment and power procurement measures against earthquakes, the appointment of officers responsible for safety and disaster prevention, regular comprehensive disaster prevention drills, and insurance coverage.