Takemoto Yohki Co.,Ltd.

The Standard Bottle, which is the source of the Group's competitiveness, faces the risk of declining competitiveness due to changes in social conditions and the development of more attractive packaging containers by competitors. As a countermeasure, the Group continues basic research and new product development, and in FY2025 (ending December 2025) developed molds for 204 types of Standard Bottles; however, if competitiveness declines, this could have a significant impact on business performance.

Synthetic resin, the main raw material of the Group's products, is derived from naphtha and is directly affected by fluctuations in crude oil prices. In addition, as the circular economy and carbon neutrality become more widespread, imbalances in supply and demand for recycled materials and biomass materials may also affect procurement prices. If raw material prices rise sharply and the pass-through to product prices is delayed or not possible, this could affect business results and financial condition.

Many of the Group's customers are companies engaged in cosmetics and beauty-related products, resulting in a business structure that is highly susceptible to trends in that industry. There is a risk of being affected by changes in the market environment, such as sluggish consumption due to shifts in trends and preferences, worsening economic sentiment, and growing environmental awareness. In FY2025 (ending December 2025), the Group had transaction records with 4,313 customer companies, and if orders decrease, this could affect business results and financial condition.

80% of the Group's net sales come from the sale of products manufactured in Japan, with production concentrated at the Yuki Plant, Yoshikawa Plant, Okayama Plant, Hokkaido Plant, and Toyama Plant. If domestic production facilities are forced to shut down due to natural disasters or infectious disease outbreaks, this could have a material impact on business results and financial condition. The Group is currently increasing production capacity in China and India, but dependence on domestic operations remains high.

Since the opening of the Yuki Plant in 1989, the Group has strengthened its in-house production system, and in-house produced items now account for the majority of net sales. If order volumes fluctuate beyond expectations or decline significantly after the shift to in-house production, there is a risk of a short-term mismatch between supply volume and supply capacity. In addition, if it becomes difficult to obtain products from external item suppliers, this could also affect sales trends.

In overseas operations centered on China and Asia, there are country risks such as unexpected changes in laws and regulations, infectious disease outbreaks, political turmoil, and changes in political relations with Japan. In China in particular, labor shortages and rising wages are pronounced, and there is also litigation risk arising from labor-management issues. The Group is working to control these risks by strengthening cooperation with local governments and utilizing local staff, but business activities could still be disrupted.

The Group is subject to a variety of laws and regulations, including the Basic Act on Food Safety, the Food Sanitation Act, the Containers and Packaging Recycling Act, and the Act on Promotion of Resource Circulation for Plastics, which came into effect in April 2022, and bears recycling implementation outsourcing fees every fiscal year. The tightening or revision of these laws and regulations, or the introduction of new regulations, could result in additional compliance costs. In particular, if the burden of recycling obligations is significantly increased, this could affect business results and financial condition.

The EU has announced a policy to restrict the use of single-use plastic products and has set a target of achieving a 75% recycling rate for packaging waste by 2030. The Group is collecting regulatory information covering regions beyond the EU and developing products that comply with such regulations; however, if product development does not proceed as planned, this could affect business results. The Group began internet sales in Europe in November 2023, and as business expands in that region, the importance of this risk is increasing.

The Group conducts overseas operations in China, the United States, Thailand, the Netherlands, India, and other countries, and its sales and purchases denominated in foreign currencies, as well as the valuation of overseas assets and liabilities, are affected by exchange rate fluctuations. The Group enters into forward foreign exchange contracts within the range of expected transaction amounts, but significant fluctuations in foreign exchange rates during the consolidated fiscal year could affect business results and financial condition as reported in yen.

There is a risk that recruitment and development of human resources will not proceed as planned due to the declining working population in Japan and changes in the employment environment in China. In addition, since the Group employs many part-time workers, changes in systems related to social insurance and labor conditions could increase personnel costs. The Group is focusing on strengthening mid-career hiring and developing local overseas staff, but if securing human resources is delayed, this could affect business results and financial condition.