KYORITSU ELECTRIC CORPORATION

As manufacturing companies expand overseas investment, particularly in ASEAN countries, the overseas production of customer manufacturers is expected to become increasingly diverse and complex in terms of both geography and product categories. Responding to this requires allocating more management resources to overseas business; however, there are constraints on the resources that can be deployed, primarily in terms of human resources, creating a risk that the Group may fail to keep pace with the speed of customers' expansion. As countermeasures, the Group is working to secure excellent personnel and continue in-house training, as well as to gather information and expand overseas business through overseas subsidiaries and other entities.

Amid rapid advances in IT technology causing customer needs to change dramatically on a daily basis, it is extremely important for the Group, as a research and development-oriented company, to accurately identify the medium- to long-term direction of customer needs. If this direction is misjudged, there is a risk that the Group's technologies and products will fail to meet the demands of the times. As countermeasures, the Group is working to continuously grasp customer needs, closely monitor the latest technology trends, provide high-value-added solutions, and expand its product lineup.

While expectations for domestic economic growth in Japan remain low due to the declining working-age population, economic expansion is expected to continue in Asian countries due to population growth and rising per capita GDP. As the overseas production of customer manufacturers becomes increasingly diverse and complex in terms of both geography and product categories, there is a risk that the costs and management resource burden borne by the Group will increase. The Group is addressing this through information gathering utilizing overseas subsidiaries and other entities and through the expansion of overseas business.