Nitta Corporation

There is a risk that supply of raw materials and components necessary for production may be disrupted due to the effects of war/conflict or the sudden bankruptcy or business suspension of outsourcing partners. This could lead to the halt or delay of production activities, potentially resulting in failure to achieve business plans. The Group addresses this through the search for alternative products, continued formulation of BCPs for raw materials, and the search for suppliers with strong manufacturing capabilities.

There is a risk that price fluctuations such as sharp increases in crude oil, gas, and raw material prices may raise manufacturing costs and put pressure on profits. Declines in inventory value and product value due to market fluctuations may also affect the financial condition. The Group addresses this by monitoring trends in raw material prices, anticipating impacts, searching for alternative materials, and continuing efforts to reduce manufacturing costs.

There is a risk that business plans and forecasts may not be achieved due to sluggish sales, loss of key customers or their bankruptcy resulting from economic deterioration, as well as the impact of U.S. tariff policy. In particular, U.S. tariff policy is explicitly cited as a factor heightening uncertainty in the external environment. The Group addresses this by tracking each business division's budget progress at business performance review meetings and by making timely and appropriate disclosures when disclosable information arises.

There is a risk that operating revenue may increase or decrease due to fluctuations in foreign exchange rates. For the Nitta Group, which operates overseas businesses, both yen appreciation and depreciation could affect earnings. The Group addresses this by implementing measures to mitigate foreign exchange risk and by gathering information from financial institutions.

There is a risk that cyber attacks or ransomware attacks occurring within the supply chain could result in the loss or external leakage of important data. This could have a significant impact on business continuity and on relationships of trust with customers and business partners. The Group addresses this by building AI-based automated defense mechanisms, establishing data backup systems, conducting information security questionnaires for suppliers with guidance for improvement, and providing information security education for officers and employees.

There is a risk that defects in product design, material selection, manufacturing processes, inspection, transportation, or storage, or deficiencies in instruction manuals, may result in accidents leading to product liability claims. This could result in financial and reputational losses due to damage claims or product recalls. The Group addresses this through thorough design reviews and guidance and response measures by the Quality Control Committee.

There is a risk that environmental pollution accidents such as water pollution, soil contamination, or air pollution may occur due to intentional acts or gross negligence. This could lead to administrative penalties for regulatory violations, damage claims, and harm to the company's image. The Group addresses this through various checks and improvement instructions via internal inspections, emergency drills conducted by each department, and case reporting and awareness-raising at the Health and Safety Committee.

There is a risk that fraudulent transactions may occur, such as bid-rigging, unreasonable restraint of trade, bribery, embezzlement, breach of trust, or violations of export laws and regulations. This could result in legal sanctions, administrative penalties, and loss of corporate trust, causing significant disruption to business activities. The Group addresses this through cartel risk application via workflow processes, implementation of compliance education, and thorough dissemination of procedures in accordance with internal regulations.

There is a risk that leaks of flammable or explosive gases, or the occurrence of fire or explosion accidents, could cause human and physical damage as well as business interruption. This includes fires in owned forests, and damage to production facilities or suspension of operations could affect business performance. The Group addresses this by identifying and instructing improvements on hazardous locations through internal inspections, operating a prior application system for work involving fire, and horizontally deploying lessons learned from past emergency response measures.

There is a risk that production sites may be damaged and business interrupted due to seismic disasters such as earthquakes, tsunamis, and volcanic eruptions, as well as wind and flood damage such as typhoons, heavy rain, floods, and landslides. This includes impacts on the entire supply chain, which could have a significant effect on business performance and financial condition. The Group addresses this through continued comprehensive disaster drills, workshops to formulate action plans in the event of a disaster, response drills for the safety confirmation system, early warning alerts when typhoons approach, and promotion of flood countermeasures.