Torishima Pump Mfg. Co., Ltd

In the Middle East and Africa region, which accounts for approximately 27.6% of order intake, there is a risk of transaction disruption or suspension and uncollectible receivables due to interstate conflicts, civil unrest, economic sanctions, or a blockade of the Strait of Hormuz. Additional tariff burdens, rising transportation costs, and expense burdens from the application of force majeure clauses are also anticipated. As countermeasures, the company gathers and analyzes information from local offices, obtains trade insurance, and diversifies procurement routes.

There are risks of electronic file encryption and business suspension due to ransomware attacks, information leakage, IT system failures, and human-caused information leakage by officers and employees. If such risks materialize, financial deterioration may occur due to operational suspension, leakage of technical information, loss of customer trust, and response costs. Countermeasures include establishing a CSIRT to formulate incident response plans, introducing multi-factor authentication, and conducting joint training with external organizations.

There is a risk that difficulty in securing necessary personnel, the loss of talented employees, and failure in technology succession could result in an inability to meet requirements for public works contracts, as well as a risk of rising outsourcing costs. In particular, the reliance on specific individuals for specialized skills at manufacturing sites poses a challenge to business continuity. Countermeasures include technology succession through the

Business costs are expected to rise due to the introduction of carbon pricing, order opportunities may be affected by stricter CO2 emission regulations, and demand for existing products is expected to decline due to the shrinking thermal power generation market. More frequent extreme weather events may also affect finances through delays in material procurement and construction, as well as increased insurance premiums. The company addresses these risks through the development of new products for hydrogen and ammonia applications, improving the efficiency of existing products, and strengthening partnerships with customers.

There is a risk that quality problems (defective materials or parts) in deliveries from new suppliers, or failure to build a global procurement network, could result in costs for responding to damage claims from customers or delivery delays. Countermeasures include standardizing quality requirements for procured items, conducting factory inspections and quality improvement guidance for new suppliers, and developing personnel skilled in global procurement.

Insufficient response to IoT and DX may delay entry into new fields, and delays or failures in developing new products for liquefied hydrogen and ammonia applications may result in declining product competitiveness, loss of new markets, and increased R&D expense burden. The company addresses this through promoting DX education for employees, joint research with universities, and technical partnerships with major plant manufacturer customers.

Because production is concentrated at the head office plant in Takatsuki City, Osaka Prefecture, there is a high risk of reduced production capacity in the event of an operational suspension due to natural disasters or extreme weather. Business continuity difficulties due to equipment damage or disaster impact on partner companies, recovery costs, and payment of delay damages due to delivery delays are anticipated. The company addresses this through formulating and continuously reviewing its BCP (strengthening earthquake resistance measures and initial response training) and reinforcing supply chain management.

There is a risk that a rapid depreciation of the yen could increase import costs, while an appreciation of the yen could reduce foreign-currency-denominated sales, worsening profit and loss. For the company, which operates globally, exchange rate fluctuations affect both sales and costs. The company hedges foreign exchange risk by monitoring its foreign currency positions and using forward exchange contracts.

Rising interest rates could worsen cash flow due to a widening gap between long-term and short-term payment terms, increase interest expenses when borrowings rise, and increase non-operating expenses. In addition, a decline in the share price of held securities could worsen the financial position, including a decrease in ordinary income. The company analyzes and addresses the payment term gap, promotes receivables collection, and reviews and sells held securities.

If violations of laws, internal regulations, or ethical standards occur, or if litigation or claim disputes arise, there is a risk of decreased credibility of the corporate group, significant damage compensation or business injunctions, and business suspension due to legal violations. In particular, violations of export control regulations could have a serious impact on the company, which primarily conducts international transactions. Countermeasures include establishing governance and compliance systems, and understanding and thoroughly communicating export control regulations of major relevant countries to subsidiaries.