ASAHIMATSU FOODS CO.,LTD.

In the food industry, problems related to food safety occur frequently, and as consumer awareness of safety increases, unforeseen issues, if they arise, may affect operating results. The Group has obtained certification under the international food safety management system standard "FSSC22000," and for its main raw material soybeans, is strengthening quality control by promoting the switch to Global GAP-certified raw materials.

Since key raw materials are agricultural products and the Group is heavily dependent on imports from the United States, China, and other countries, if procurement becomes difficult due to import restrictions or other factors, this would disrupt production activities and have a material impact on the continuity of business. In addition, fluctuations in grain and crude oil markets and in foreign exchange rates also affect operating results. The Group is considering stabilization measures through long-term contracts with suppliers, securing appropriate inventory levels, and collaboration with trading companies, as well as responding to price increases that cannot be absorbed through price revisions.

Fluctuations in international commodity markets such as grains and crude oil, as well as fluctuations in the yen exchange rate, may raise the cost of imported raw materials, which could affect operating results. The Group aims to stabilize procurement prices through its own efforts and collaboration with trading companies, and is considering measures such as price revisions to address cost increases that cannot be absorbed.

The Group is exposed to compound risks of declining profits, including a decrease in overall demand due to population decline, increased costs to ensure safety, and price competition in the market for low-priced products, and if there is a sudden change in the business environment, the financial position and operating results could fluctuate significantly. Since the core business is concentrated in domestic sales of frozen tofu, the Group is working to diversify risk through business diversification, development of new sales channels, and efforts to expand overseas sales.

As major production facilities are concentrated in the southern part of Nagano Prefecture, there is a risk that production activities could be suspended due to natural disasters such as earthquakes and typhoons. In addition to direct damage, there is also a risk that raw material procurement and product supply could become impossible due to disruptions to social infrastructure such as transportation and electricity. In the event of a large-scale disaster, the Group prioritizes ensuring the safety of employees and has established a system aimed at early resumption of operations based on a pre-formulated BCP (Business Continuity Plan).

The Group holds personal information of customers and business partners as well as confidential business and technical information, and if information leaks, destruction or falsification of important data, or system outages occur due to cyberattacks, unauthorized access, computer viruses, or other causes, there are concerns about a decline in credibility and impacts on business performance and financial condition. The Group is strengthening information security by building a strict information management system, developing and enhancing internal regulations, and thoroughly communicating these to employees.

As a food manufacturer with a responsibility to provide a stable supply to customers, there is a risk that if environmental changes beyond expectations occur, such as a collapse of the supply chain due to the spread of infectious disease, the need for consideration of employee safety, and administrative directives, production and sales activities could be disrupted, making it difficult to fulfill contracts. In the event of an outbreak of infectious disease, the Group has established a system to set up a response headquarters, gather information, implement infection prevention measures, and take actions to ensure a stable supply of products.

Accelerating labor mobility in Japan, rising wages and salaries, and increasing social insurance burdens are increasing the likelihood that securing necessary human resources will become difficult, and if a labor shortage occurs, it could affect the financial position and operating results. In addition to securing human resources through work-style reforms, health management, promotion of women's participation, mid-career hiring, and promotion of part-time employees to full-time status, the Group is also promoting rationalization investments and labor-saving and automation through the use of IT.