Yamami Company

The Head Office Plant, Kansai Plant, and Fujisanroku Plant have obtained FSSC22000 certification and conduct manufacturing controls, but risks such as mislabeling, foreign object contamination, and pesticide residue cannot be completely eliminated. Should a problem occur, reputational damage could lower product evaluation and materially affect business performance. As countermeasures, the Company is working to strengthen its food safety and hygiene management system and maintain international certifications.

The Company's main raw material, soybeans, is limited entirely to non-genetically modified varieties, and procurement prices fluctuate due to planted area, weather, and exchange rate movements. In addition, changes in laws and regulations or diplomatic issues in producing regions may lead to import restrictions, and a sharp rise in prices would materially affect business performance. The Company addresses this through smoothing of procurement prices based on soybean market conditions, but complete risk avoidance is difficult.

The Company's business segment consists of a single segment—the manufacture and sale of tofu and related products—concentrated in tofu, atsuage (fried tofu), and aburaage (thin fried tofu). If external factors such as a significant change in demand occur, the Company cannot offset the impact through other business fields, resulting in a structure where performance is directly affected. On the other hand, the Company also recognizes the benefit of concentrating management resources to focus on business growth.

As the overall market size of the tofu-related industry stagnates, the number of small businesses is decreasing, leading to consolidation among major companies, and price competition in sales is intensifying further. Customer needs are also diversifying, and if competitors introduce groundbreaking products or engage in price competition, business performance may be affected. The Company is working to increase sales through new product development and expansion of new business partners.

The Fujisanroku Plant was built as a foothold for expanding the sales area into the Kanto region, but there is a risk that the expected investment returns may not be achieved due to sudden changes in the business environment or competition with other companies in the same industry. If the investment effect falls short of expectations, business performance may be affected. As this plant plays a central role in the Company's business scale expansion strategy, its success or failure is directly linked to medium- to long-term profitability.

Petroleum-based packaging materials such as film and trays carry the risk of rising procurement costs due to crude oil price and exchange rate fluctuations. In addition, since products require chilled transport, delivery freight costs tend to be high relative to the unit price per item, and a significant surge in gasoline prices could affect business performance. The Company is working to reduce costs through dominant-area strategies and more efficient delivery routes, but the risk of cost increases due to external factors remains.

Since the products in demand for tofu, atsuage, and aburaage differ between spring/summer and autumn/winter, seasonal fluctuations in profit arise due to differences in product mix. In the results for the 51st fiscal period, the quarterly composition of operating profit was heavily skewed, with the first quarter accounting for 12.1% versus 34.7% in the second quarter, affecting quarterly performance. The Company strives to smooth profits through sales promotion measures and cost reductions, but complete resolution is difficult.

The Company is subject to regulations such as the Food Sanitation Act, the JAS Act, the Act against Unjustifiable Premiums and Misleading Representations, and the Product Liability Act, and violations may result in business suspension or administrative sanctions. If the business license for tofu manufacturing under the Food Sanitation Act is revoked, this would result in business suspension, materially affecting performance and financial condition. The Company strives for legal compliance through FSSC22000 certification, food labeling verification, and the establishment of a traceability system, but there is also a risk of additional costs arising from the revision or introduction of new regulations.

Manufacturing is conducted at three sites: the Head Office Plant (Mihara City, Hiroshima Prefecture), the Kansai Plant (Koka City, Shiga Prefecture), and the Fujisanroku Plant (Suntō District, Shizuoka Prefecture). If production facilities are damaged by large-scale earthquakes, typhoons, or other natural disasters, there is a risk that operations could be suspended, making it impossible to maintain the production system. Impacts on the delivery network could also be a factor contributing to deteriorating business performance. Although all plants are located in industrial parks selected for relatively stable infrastructure and ground conditions, complete preparedness against large-scale disasters is difficult.

Operations such as order receipt and shipping are processed using computer systems linked with retailers and wholesalers. If trouble occurs due to natural disasters, sudden accidents, or defects in software or equipment, it may result in lost sales opportunities, billing omissions, and extraordinary costs for recovery, potentially affecting business performance. The Company has implemented measures such as establishing regulations, employee training, security measures, and backup system construction, but complete elimination of this risk is difficult.