SOFT99corporation

The proportion of sales from automotive-related businesses is high, and business performance may be affected by deterioration in market conditions or regulatory changes in the automotive-related industry. Automotive Chemical Products (for General Consumers) in the Fine Chemical business have a high market share, making them susceptible to market contraction, while Professional-use Coating Products (G'zox) have a high degree of dependence on automobile dealers, meaning that sales and profits could fluctuate dramatically depending on increases or decreases in automobile sales. The Automotive Maintenance & Body Repair Business is likewise affected by trends in the automotive-related industry.

In the Porous Material business, dependence on the manufacture and sale of cleaning and polishing materials for the semiconductor industry is high, and given the high market share, there is significant risk of performance fluctuation due to trends in the semiconductor industry cycle. The semiconductor industry undergoes rapid technological progress and frequent corporate restructuring, and supply-demand adjustments during technology transitions or corporate reorganizations affect sales and profits. There is also a risk that sales to major customers may decline due to intensifying competition both domestically and internationally.

Many raw materials and containers used in products contain petroleum-derived materials such as synthetic resins and solvents, and if procurement becomes impossible due to disasters or deteriorating international conditions, supply of some products could become difficult over the medium to long term. There is also a risk that increased procurement costs due to rising crude oil prices could pressure sales and profits. As countermeasures, the company is working on providing value-added products and developing packaging-reduced products such as refill and concentrated types to reduce costs.

Since many chemical substances are used in products and manufacturing processes, there are concerns that changes to laws related to chemical regulations could make it impossible to continue manufacturing and sales activities as before. If the period between promulgation and enforcement of a law is short, it may become necessary to temporarily suspend product shipments. As a countermeasure, the company continuously updates the latest information on chemical regulations, including overseas regulations, and revises product formulations as appropriate.

Suppliers may discontinue products in response to strengthened chemical regulations, or may cease operations, consolidate product lines, or discontinue products due to management rationalization. As a result, there are concerns that intensified procurement competition with competitors could lead to soaring procurement prices and difficulty securing raw materials, resulting in delays to production and sales plans. The company aims to ensure business continuity by procuring raw materials and products from many suppliers, but securing alternative procurement sources remains a challenge.

If defects in the products or services provided cause damage to persons or property, product liability claims and recalls could occur, resulting in a decline in brand value and substantial financial burden. As a countermeasure, the company is advancing the development of ISO-compliant development and production systems, and working to maintain product and service quality.

Tire chains sold in the Fine Chemical business are a winter seasonal product, and consumer purchasing behavior is affected by weather fluctuations such as snowfall amounts. Because advance weather forecasting is difficult, there are concerns about increased inventory due to returns or product stockouts, which could affect business performance.

In the overseas expansion of the Fine Chemical business, there are concerns that sales could be affected by political, economic, and social instability, legal changes, exchange rate fluctuations, intellectual property issues, terrorism and conflicts in the countries and regions where the business operates, leading to lower sales and profits. In the Porous Material business, the proportion of overseas sales is high, making it particularly susceptible to political and economic conditions in the United States, Europe, and China. The company aims to reduce and level regional risk by expanding its range of destination markets.

Since the company owns multiple manufacturing plants, there is a risk that natural disasters or the spread of infectious diseases could cause fuel supply shortages, infrastructure disruptions, and operational suspensions, halting part or all of the manufacturing process. Additionally, if the global procurement network for raw materials and supplies is disrupted, manufacturing and product supply could be halted, significantly affecting business performance. As a BCP measure, the company stores product inventory dispersed across multiple warehouses nationwide, including external warehouses, to build a system that prevents stockouts.

If the company is unable to secure sufficient appropriate human resources due to factors such as the declining working population, constraints on business activities may arise, leading to opportunity losses and other effects on business performance. The company strives to secure and effectively utilize human resources by promoting diverse hiring and development of personnel and improving the labor environment through measures such as labor-saving initiatives, while positioning the securing of diverse human resources as an important management issue.