EBARA Foods Industry,Inc.

If food terrorism, foreign object contamination, poor hygiene management, or mislabeling of allergens occurs, it may impair brand value and incur product recall costs, thereby affecting business results and financial condition. As a countermeasure, the company has obtained FSSC22000 certification at its three in-house plants and has established a system of voluntary standard-setting and audits at each stage from raw material procurement to distribution through the Quality Control Committee.

Against the backdrop of population decline, the falling birthrate and aging society, and the decrease in household size, the domestic food market is on a shrinking trend. If market share declines significantly due to changes in consumer preferences or intensifying competition, this may affect business results and financial condition. As countermeasures, under Long-term Vision 2033, the company is promoting the expansion of profitability of its core product groups, positioning overseas business as a growth driver, and reorganizing its domestic manufacturing structure at the "Shimotsuma Chuo Industrial Park," the acquisition of which was resolved in June 2025.

Consumption tends to slow due to unfavorable weather or fluctuations in ingredient prices, and if large-scale livestock diseases such as avian influenza occur, this may lead to decreased sales and increased inventory, affecting business results and financial condition. The company gathers information from the Japan Meteorological Agency, the Ministry of Agriculture, Forestry and Fisheries, and other sources to promptly revise production and sales plans, while also shifting marketing toward general-purpose menu applications and optimizing inventory levels.

If raw material prices rise sharply or supply shortages occur due to fluctuations in agricultural and livestock harvest volumes, increased overseas demand, exchange rate fluctuations, geopolitical factors, or rising energy costs, this may affect business results and financial condition. In addition to risk reduction through purchasing from multiple companies, diversification of production areas, and annual contract purchasing, the company aims to improve profitability through product price revisions for cost increases that cannot be absorbed through internal efforts.

If the company is slow to respond to growing environmental awareness, this may affect brand image and market share, and if strengthened environmental regulations require the revision of manufacturing processes or additional capital investment, this may affect business results and financial condition. The Environmental Subcommittee has set targets for reducing CO2 emissions and food loss, and for the recycling rate of waste plastics, and is promoting measures such as installing solar power generation equipment and lightweighting packaging containers.

If human rights issues such as deteriorating labor environments or occupational health and safety conditions are discovered in business activities or the supply chain, this may lead to a loss of social trust and affect business results and financial condition. The company formulated the "Ebara Foods Group Human Rights Policy" in May 2023, and since fiscal 2024 has continuously conducted human rights risk management within the group through the Compliance Committee and human rights due diligence through the Supply Chain Subcommittee.

Against the backdrop of a declining working population due to the falling birthrate and aging society, competition to acquire talent is intensifying. If the company is unable to secure appropriate personnel or if employee turnover becomes serious, this may affect business strategy and business results. The company is working to secure and retain talent through measures such as promoting selection processes for new graduate and mid-career hiring regardless of gender or nationality, revising personnel systems, introducing an internal job posting system, and promoting flexible working styles.

If production, logistics, or sales facilities are damaged or the supply chain is disrupted by large-scale disasters such as storms, floods, earthquakes, fires, or infectious diseases, business activities may be disrupted, affecting business results and financial condition. The company has established a business continuity framework through diversification of production and logistics sites, seismic diagnosis and regular inspections, use of data centers for system equipment, and periodic review and updating of its BCP.

If cyberattacks such as computer virus infection or unauthorized access cause internal system outages, information leakage, destruction, or tampering, this may result in a loss of stakeholder trust and impairment of brand value, potentially having a significant impact on business results and financial condition. The company is strengthening its information security management system through the introduction of multi-factor authentication, establishment of systems to prevent intrusion by and enable early detection of external threats, placement of key system equipment in external data centers, and application of the latest security patches.

With respect to machinery and equipment, land, investment securities, and other assets held in connection with domestic and overseas investments, if the recovery of the invested amount becomes uncertain due to a decline in market value or profitability, this may affect business results and financial condition through the application of impairment accounting and other measures. The company conducts appropriate management through thorough deliberation on business plans for capital investment at the Board of Directors and Management Committee, and through periodic verification of the status of investees after acquisition.