June 8, 2022

Securities code: 4977

EŝƚƚĂ'ĞůĂƚŝŶ͛ƐsŝƐŝŽŶ

Nitta Gelatin has established a vision for the next 10 years with the aim
to be reborn as a highly profitable company.
A shift away from general-purpose gelatin
products to high-value-added collagen
peptidesOperating income of ¥4bn, roughly threetimes that of fiscal 2021

Collagen peptides sales ratio

Operating income and Operating margin
Operating income
Operating margin

Operating income

4.0(Billions of yen)

19%

43%
Operating margin

2.0
4.7%

6.0%

10%

1.35
FY2021

FY2031(target)Note: Fiscal 2021 figures exclude the adhesive business© Nitta Gelatin Inc. All rights reserved

FY2021

FY2024(target)FY2031(target)1

Contents

1

2

3

4

5

2

© Nitta Gelatin Inc. All rights reserved

Company Outline© Nitta Gelatin Inc. All rights reserved

3Company Outline (as of March 31, 2022)

Company Name

Nitta Gelatin Inc.

Representative

Koichi Ogata, Representative Director and President

Headquarters

4-26, Sakuragawa 4-chome, Naniwa-ku, Osaka, Japan

Establishment

January 1918

Stock Listing

Prime Market, Tokyo Stock Exchange (Securities code: 4977)

Capital¥3,144 million

Net Sales (Consolidated)¥31.7 billion (fiscal 2022)

Employees (Consolidated)

1,009 (as of March 31, 2022)

4© Nitta Gelatin Inc. All rights reserved

Business Model
Building a circular-economy business model that utilizes by-products from the livestock andfishery industries as collagen material
Grain

Fertilizer

Feed

Livestockindustry

Fisheries

By-productFish culture feed
Co-productAs protein
Soil/water quality
improvements

DCP

S

 Contribution to
local communities

Collagen material
Materials
research

Quality
improvement

Application
development

Accumulated
research data

Supply beneficial proteins

Medical materialE

 Waste reduction Water reduction
 CO2 reduction
 Paper reduction

Longer, healthier lives

Health food

Food ingredients

To help people stay healthy and feeling young
VisionThe Nitta Gelatin Group fulfills this desire of people worldwide through our relentless
pursuit of meeting collagen's enormous potential.

© Nitta Gelatin Inc. All rights reserved5Our Business
Main Customers

Food
Solutions

HealthSupportBiomedical

6© Nitta Gelatin Inc. All rights reserved

Main Products by Segment
Low

Absorbency

High

CollagenGelatin

Collagen peptides

The triple helical structure ofcollagen protein

The structure of three untie
threads consisting of collagenby heating or other means

The state when the molecularthreads that form gelatin are
cut into smaller pieces

Exceptional heat and moistureretention

Melts when heated and hardens
when cooled

Has a biological function thatkeeps the body healthy

Food retention stability
Improved texturez Highly processed products forcandies, marshmallows)z Protein supplements

items (noodle soup gelatin)z Yogurt

Food Solutions

Providing a blend of foodproducts (edible gelling agents,
quality stabilizers, etc.) for
customersz Dessert ingredientsz Confectionery (gummies,z Convenience store delicatessen

Food ingredientsthe industrial-use market* Products that can be used in the kitchen as
they are unlike conventional powder
products. (Edible collagen, Fuwa-Awa
Quick, etc.)z High-quality skin beauty

supplementsz Gelatin for capsules forz Cosmetics

pharmaceuticals andsupplements

products
z Products for sports and mobility

Health Support

Biomedicalz Wound healing and nutrition(joint and muscle recovery)z Collagen for cell culturesz Gelatin for cell culturesz Skin and bone prosthesisz Gelatin for cell transportz Collagen for regenerativez Gelatin for regenerative

medicine© Nitta Gelatin Inc. All rights reserved

medicine7Collagen Material Application Development Over the Years
With its unique characteristics, collagen has contributed to a number of different applications.
The birth of collagen peptides in the 1970s has expanded new applications.
1970s
Collagen peptides are born

Matches

Food
Photographs

Musical Pressure sensitive
paper
instruments

Health & beauty

Advanced medical care

1918

1940

1960

1980

2000

2020

Application development utilizing the characteristics of collagen8© Nitta Gelatin Inc. All rights reserved

Accelerating Research on Collagen Peptide Functionality
It has been shown in various fields that ingesting collagen peptides has beneficial effects on thehuman body The effects of collagen peptides revealed in recent years

2019 Brain Effective on brain structure and cognitive

function2018 Blood vessels

 Improves arteriosclerosis

2018 Diabetes

 Suppresses elevated blood sugar levels
 Increases muscle mass and suppresses

2016 Muscles

muscle loss

2015 Skin beauty

 Maintains skin moisture and elasticity

2015 Pressure ulcers

 Aids healing of pressure ulcers

2014 Bones Promotes increased bone density

2009 Joints

 Suppresses knee osteoarthritis

2009 Blood pressure Suppresses high blood pressure

2010© Nitta Gelatin Inc. All rights reserved

2015

2020
9

Medium-Term Management Plan andLong-Term Vision10© Nitta Gelatin Inc. All rights reserved

Progress and Current StateIn the previous medium-term management plan, we concentrated our management resources on
the areas of Food Solutions, Health Support, and Biomedical. From fiscal 2022 we have shifted to an
aggressive management approach.
Fiscal 2019ʹ2021
Medium-Term Management Plan

Fiscal 2022ʹ2024
Medium-Term Management Plan

Radically transforming the business portfolio Concentrating management resources on core areas
through selection and concentration
to strengthen the foundation for a future leap forward
9 Withdrew from adhesive
business (sales)
9 Merged with Nitta Gelatin
Foods

9 Withdrew fromcasing business

9 Withdrew from adhesive
9 Construction of new biomedical
business (manufacturing)
research facility, Mirai Kan, started
9 Merged with Nitta Biolab(Millions of yen)

40,000(Millions of yen)

34,54336,464

1,690
6,653
5,879

30,00020,00014,521

31,78330,550

1,600

1,560

1,356
4,789

14,270898

10,000

2,000

3,800

14,071

15,4802,000

33,5001,500

36,0001,000
500

15,29014,394

11,69012,502FY2019FY2020

FY2021

FY20220

0

Food Solutions© Nitta Gelatin Inc. All rights reserved

Health Support

Specialties

FY2023(forecast)

FY2024(target)*Operating income* The medium-term management plan target for fiscal 2024 has not been changed since its
announcement on May 13, 2021.

11

Key Markets in the Medium-Term Management Plan
We aim to expand sales of high-value-added products by selecting five key markets to wheremanagement resources will be allocated
Net sales(Billions of yen)
 Five key markets
Existing products
Key markets
33.5
35
FS HS BM
31.7
1. Industrial-use market

28.5

30

Increase market share in industrial-use products withhighly processed products that help ease labor shortages

‫ݲ‬

4.5

29.4

29.0

FY2022

FY2024(target)2.1
25

2. New needs in food market

20

Capture new needs among athletes and young people
with protein supplements and plant-based foodingredients

2.3

‫ݲ‬

26.4

15
0
FY2021

3. Overseas collagen peptide market

Operating income‫ݲ‬Expand sales of collagen peptides for health and beauty
applications with North America and Asia as key markets(Billions of yen)
Existing products

2.00

Key markets

2.0

4. Direct sales business‫ݲ‬Acquire new customer base with rebranding and develop
sports nutrition market

1.5

1.56

1.47

0.45
0.13

0.15

1.0

5. Biomedical business
Strengthen the competitiveness of medical collagen andgelatin by expanding production capacity and develop
new applications

‫ݲ‬

0.5

1.43

1.55

FY2022

FY2024(target)1.32

0.0
FY2021

FS: Food Solutions, HS: Health Support, BM: Biomedical

Note: Fiscal 2021 figures exclude the adhesive business12© Nitta Gelatin Inc. All rights reserved

Market Environment
While the price war for commodities continues to intensify,
the market for high value-added areas is expanding, especially in the fields of beauty, health, andmedical care.

Advantages

Food Solutionsz Increasing demand for ready-to-eat
meals, increasing need for shorter
cooking time

Health Support

Biomedicalz Increasing need overseas for beauty
and anti-aging productsz Practical applications and widespreaduse of biopharmaceuticals

z Need to prevent frailty

z Expanding practical applications for celltherapy (using collagen)z More diversified foods, greaterawareness about healthz Expanding approval overseas for
medical devices (skin and bone
prosthesis, etc.)

z Growing awareness of the importanceof protein intake (to maintain health,muscles)

Disadvantagesz Demand for gelatin expands with economic growth in Asia
z The plight of the food service industry
due to the COVID-19 pandemicz Intensifying competition due tomarket expansion

z Intensifying competition due tomarket expansionz Difficult to expand applications from
commodities such as gummies andcapsulesz Intensifying price war for commodities
z Concerns about instability in the procurement of raw materials over the medium to long term, and the possibility of alternatives© Nitta Gelatin Inc. All rights reserved

13

The Potential of Collagen Materials
The global market for collagen materials with exceptional effects is expected to growContributing to longer,
healthier lives
New eating styles and
The changing demands
that come with them
Expansion of the protein market

Health Support
Expansion of the advanced
medical market

Food Solutions

Biomedical
Joint and muscle
recoveryBrain function
improvement

Skin beauty
supplements
Protein supplements

Wound healing andnutrition products
Medical-related
contract manufacturing

Cosmetics

Convenience store
delicatessen items
Highly processed products
for the industrial-use market
Dessertingredients

Gelatin for cell transport

YogurtGelatinfor capsules

Collagen forcell cultures

Medical collagenand gelatin
Skin and bone
prosthesis

Gummies, candies,
marshmallows

Mature area

Current
Revenuestreams

Future growtharea
14© Nitta Gelatin Inc. All rights reserved

Current State and Future Measures
Market Environment and Challenges
 Market environment

Expanding global demand for gelatin and collagen due
to economic growth in Asia

Expanding high-value-added gelatin and collagen market
centered on the food, health, and medical fields

Future Measures Formulate business plan from a long-term

perspective
Growth of high-value-added fields in the three domainsof food, health, and biomedical
Global sales expansion of collagen peptides

Expanding protein market due to rising demand forprotein intake

Market development for new food needs

Intensifying price war for commodities

Instability concerns for the procurement of raw
materials, fluctuations in raw material prices
 Current State

Expansion of direct sales business Strengthening of business foundation

Achieved stable production system mainly in Japan

Promote production innovation at each base to build astable and low-cost production system, and support forincreased production in response to global sales expansion

Accumulation of knowledge and research data on
collagen materials over many years

Strengthen the promotion system for new business andnew product development

Delay in development and sales of high value-added
products

Review of the evaluation and treatment system for
employees who are more likely to take on challenges

Fluctuations in profit margins by product and region due
to delays in optimizing manufacturing and sales systems

Promote employee growth by improving the training
systemWithdrawal from unprofitable sectors completed© Nitta Gelatin Inc. All rights reserved

15

10 Year Vision and Medium-Term Management Plan
Clarifying the Company's medium- to long-term vision

Strengthen the foundation
for a future leap forward

Expand applications andrevitalize the market forcollagen peptides

Helping to
improve
people'squality of life
with collagen

FY2024
Selection andconcentration¥33.5bn

Net sales

Key markets* ratio: 10% or more

FY2021

10 year vision

Operating income ¥2.0bn
Key markets* ratio: 20% or more

Net sales¥30.55bn
Operating income ¥1.35bn
Operating margin 4.4%

Net sales¥40bn
Operating income ¥4.0bn
Operating margin 10.0%
ROE
10.0%

*Key markets:
3.Overseas collagen peptide market
1.Industrial-use market 4.Direct sales business2.New food needs
5.Biomedical businessMedium-Term
Management Plan

Medium-Term
Management Plan

Fiscal 2019ʹ2021

Fiscal 2022ʹ2024

FY203116© Nitta Gelatin Inc. All rights reserved

10 Year Goals
10 year visionHelping to improve people's quality of life with collagen

Our direction

Focus on key markets to become a highly profitable company

Specific measures

Shift away from general-purpose gelatin products to high-value-added
collagen peptides, concentrating resources on markets with high growthpotential to improve profitability
Operating income
and Operating margin

Net sales
Existing products
Key markets(Billions of yen)

40

4

Key markets
Existing products
Operating margin

33.5

35
30

(Billions of yen)

40.0

28.5

4.5

4.00

Collagen peptides sales ratio
12%

10.0%
17.6

3

9%

19%

43%

2.1

25

2.00
2

20
15

26.4

29.0

4.7%

6%

6.0%

1

3%
1.35

FY2021 FY2024(target)

0.45

1.35
22.4

10
5

2.52

FY2031(target)0

1.55

FY2021 FY2024(target)1.48

FY2031(target)FY2021

FY2031(target)0%Note: Fiscal 2021 figures exclude the adhesive business© Nitta Gelatin Inc. All rights reserved

17Our Strengths for Realizing Long-Term Vision© Nitta Gelatin Inc. All rights reserved

18

Strengths for Realizing Our Long-Term Vision

1

Strong brand power from high market share

2

Stable and low-cost manufacturing with an
integrated production system

3

Strong technological development capabilities
and a wealth of data

4

Ability to address diverse needs with a global
manufacturing and sales system© Nitta Gelatin Inc. All rights reserved

19Strength 1: Strong Brand Power from High Market Share
A gelatin manufacturer with an overwhelming domestic market share over many years, recognized
as the industry leader
Gelatin sales volume in Japan (FY2022)

Japan's largest gelatin company
100%

6.7%

6.9%

7.5%

8.4%

9.2%

9.5%

9.5%

9.2%

Other

10.2%

11.6%

9.8%

8.7%

7.7%

7.8%

8.3%

9.5%

8.5%

Company B

21.8%

23.2%

23.3%

23.9%

24.1%

22.4%

23.2%

23.9%

23.8%

22.8%

Company A

59.7%

60.0%

59.0%

58.4%

59.4%

59.7%

61.5%

59.8%

58.3%

57.2%

59.4%

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

7.5%

8.1%

8.3%
7.2%

10.1%

24.8%

80%

60%

40%

20%

Nitta
Gelatin0%
Source:Gelatin Manufacturers Association of Japan (fiscal year 2012 - 2022 excluding exports)
Company A: Develops business in leather-related, non-leather-related (gelatin and collagen divisions), and other fields. Integrated gelatin
production was discontinued with production outsourced to partner plants in Japan and overseas.

20© Nitta Gelatin Inc. All rights reservedand Low-Cost Manufacturing with anStrength 2: Stable
Integrated Production System
Utilizing the strengths of our integrated production system, we have developed a stable and lowcost process for the manufacture of collagen peptides for protein intakeKŶĞŽĨ:ĂƉĂŶ͛ƐůĂƌŐĞƐƚ
integrated raw material production systems
Raw material
procurement
Procuring high-quality, safe
and secure raw materials
from around the world

Accumulation andimprovement of
manufacturing technology

Global production
control

Constantly searching for astable, low-cost
manufacturing process

Quality control on sitesaround the world based on:ĂƉĂŶ͛ƐŚŝŐŚƋƵĂůŝƚǇstandards

Stable productionof high-quality
products ThatŵĞĞƚĐƵƐƚŽŵĞƌƐ͛ŶĞĞĚƐ
Development ofproprietary
manufacturing
process

Development of proprietary collagen peptide
manufacturing process for protein intake applications
 Nitta Gelatin collagen peptide manufacturing process for protein intake applications
Raw material
1

Gelatin2

Process omittedǁŝƚŚEŝƚƚĂ'ĞůĂƚŝŶ͛Ɛ
proprietary
technology

Collagen peptides forprotein intake applications

Since the gelatin manufacturing process is omitted
9 Low manufacturing cost
© Nitta Gelatin Inc. All rights reserved

21

Technological Development Capabilities
Strength 3: Strong
and a Wealth of Data
Nitta Gelatin develops products that maximize the potential of collagen materials by accumulating
and utilizing data on research activities, research institutes, and application development thatutilize networks with universities and public research institutes

Product developmentfrom a seed perspective

Product developmentfrom a need perspective

Customerevaluation
э adoption

Nitta Gelatin
technology

Customer
proposals

Development
and prototyping

Manufacturing andDatacommercialization
accumulationDataaccumulation

Data use

Data use
Database

Better value provided to customers

Pursuit of new possibilities
for collagen materials

Acquiring funds contributing tostable development

As of March 31, 2022
Nitta Gelatin
research topics:
14
Joint research topics: 15© Nitta Gelatin Inc. All rights reserved

Specific topics
1. Food texture analysis and control technology (FS)
2. Bioactive function of collagen peptides in humans (HS)
3. Cell transport technology (BM)4. Collagen artificial tendons (BM)Marketingsurveys, etc.

Design anddevelopment

Product
planning

Responding to customer
needs and developing new
applications
Results for fiscal 2022
Number of customer
needs addressed:
215
Number of new in-housedevelopment projects: 84

FS: Food Solutions, HS: Health Support, BM: Biomedical

22

to Address Diverse Needs with a Global
Strength 4: Ability
Manufacturing and Sales System
With manufacturing and sales bases in Japan, Asia, and North America, Nitta Gelatinhas built a system that can stably supply high-quality products around the world
Sales baseNitta Gelatin is a global
company with over 50%
of all sales overseas
FY2022
Net sales¥31.7bn

Manufacturing baseCanadaChina

Overseas
sales

51%

Japan

India

USA

VietnamHalal certification
obtained

Strength in sales

Strength in productionz Close communication withcustomers at every sitez Quality control on sites around the worldďĂƐĞĚŽŶ:ĂƉĂŶ͛ƐŚŝŐŚƐƚĂŶĚĂƌĚƐ

Understanding well the different
customer needs in each region

Manufacturing high-quality products
around the world© Nitta Gelatin Inc. All rights reserved

23and Corresponding Raw Materials for
Reference: Business
Each Plant
Expanding manufacturing bases around the world to stably procure various raw materials

Raw Material

Business

Fish

BovinePorcineIne

Japan

Manufacture of gelatin, collagen peptides, medical
gelatin and collagen

‫ݲ‬

‫ݲ‬

‫ݲ‬

India

Manufacture of gelatin and collagen peptides

‫ݲ‬

‫ݲ‬

China

Manufacture of gelatin and collagen peptides, etc.

‫ݲ‬

USA

Manufacture of gelatin and collagen peptides

CanadaManufacture of gelatin

Vietnam

Manufacture of gelling agents

‫ݲ‬

‫ݲ‬
‫ݲ‬

Ͷ

Ͷ

Ͷ
24

© Nitta Gelatin Inc. All rights reserved

Growth Strategy© Nitta Gelatin Inc. All rights reserved25

Growth Strategy Highlights

Food Solutions1

 Break into the industrial-use market and respond to new needs in foodmarket

Health Support2

 Expand sales of collagen peptides overseas and strengthen direct sales
business

Biomedical

3 Strengthen competitiveness and expand sales of medical collagen andgelatinStrengthening of the production system
4 Production innovation and construction of a stable production system inreadiness for global sales expansion

Strengthening of business foundation
5

 Strengthen the promotion system for new business and new productdevelopment and measures for human resources26© Nitta Gelatin Inc. All rights reserved

Market Environment for Food Solutions
Domestic demand in the food service industry had fallen due to restrictions on going out but is now
seeing a recovery. The protein supplement food market is expected to continue to grow, driven by
demand for health promotion.

Domestic demandin the food service industry

Protein supplement market size

(Trillions of yen)(Billions of yen)

30

350

26.0

25.7
300

20.3

250

18.5

20

200

Other
150
10
100

Supplements

50
0

0

2019

2020
forecast

2021
projection

2025
projection

Source: Medium-Term Economic Outlook for the Domestic and International
Economies and Japanese Industries, Vol. 22, One Think Tank Report,
Mizuho Financial Group© Nitta Gelatin Inc. All rights reserved

2014

2016

2018

2020

2022

2021
forecast

2024

2026

projection

Source: The ϮϬϮϭWƌŽƚĞŝŶ^ƵƉƉůĞŵĞŶƚDĂƌŬĞƚ͸'ƌĞĂƚĞƌŽŵƉĞƚŝƚŝŽŶ
between Channels and with Product Development due to theProtein Boom, Fuji Keizai

27

Food Solutions Strategy
Expand sales in an industrial-use market with plenty of room for development
Creating a new market with collagen peptides for protein intake in anticipation of major changes infood needs
High level of processing
Low level of processing

Greater customer convenienceEŝƚƚĂ'ĞůĂƚŝŶ͛ƐƐƚƌĞŶŐƚŚƐŝŶ&ŽŽĚ^ŽůƵƚŝŽŶƐ

 Product development capabilities that can meet all
customer needs
 Cost competitiveness with integrated production system A network of well-known chefs in Japan

Key market

1
Measure 2
Development and sales
expansion of highly
processed products

Key market

2
Measure 3
Response to new foodneeds

Measure 1
Expansion of sales bystrengthening response
to customer needs

Existing applications
and materials

Measure 1:
Expansion of sales by strengthening response to customer needsz Discover potential needs through detailed response tocustomer requests and making proposals
Measure 2:
Development and sales expansion of highly processed productsz Development and sales expansion of products that help
improve customer convenience in the industrial-use market,
including the food service and other industries
z Discover new potential customers by utilizing network of chefs
and opening an e-commerce site
Measure 3:
Response to new food needsz Development and proposals of new products using plantmaterials and collagen peptides for highly soluble protein
intake applications

New applications+ new materials

Domain expansion

28© Nitta Gelatin Inc. All rights reserved

New Ventures in Food Solutions
Nitta Gelatin aims to expand sales of collagen peptides for protein intake by leveraging our productdevelopment capabilities and the strength of our integrated production system in response to
growing health consciousness
 Nitta Gelatin protein intake collagen peptide
target Features of the new product - Easy Protein BBP
Differences between Easy Protein BBP and regular protein

Rather than target the muscle building protein market
which has already been established, target the healthconscious market where demand is expected to growin the future

SolubleEasy
ProteinBBP
Musclebuild

Protein intake
for building muscle

Stable demand
particularly among
young men but difficult
market to expand

Our target
marketProtein intake
for maintaining
bodily health© Nitta Gelatin Inc. All rights reserved

What is Easy Protein BBP?

Healthy
body

Easy Protein BBP is hydrolyzed
collagen with reduced molecularweight derived from bovine. It has alower viscosity and better solubility
than other protein ingredients.

Regularprotein

Efficient protein intake withplenty of flavor

Non-soluble

A range of possible applications
Market likely to expand
owing to wide range ofpotential consumers
with greater healthawareness

KonjacSmoothies

Soy sauce

Miso

Chocolate

Pasta sauces
29Market Environment for Health Support
The global collagen peptide market is expected to grow against the backdrop of an increasingawareness for functionality.
The direct marketing health food market in Japan is slowly expanding.
Global collagen peptide market

Direct marketing health food market(Billions of yen)(Billions of USD)
2.5

600

2.0

400
1.5

1.0
200
0.5

0.0

0
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
forecast
projection

Source: Global Collagen Peptide Market to 2027, The Insight Partners

2008

2010

2012

2014

2016

2018

2020
forecast

Source: The 2020 Survey on Health Food Mail-Order Business Strategy, TPC
Marketing Research30© Nitta Gelatin Inc. All rights reserved

Health Support Strategy
Nitta Gelatin will steadily increase its presence overseas with quality (reliability) as one of its
greatest strengths. We will prepare for full-scale entry into the direct sales business.
EŝƚƚĂ'ĞůĂƚŝŶ͛ƐƐƚƌĞŶŐƚŚƐŝŶ,ĞĂůƚŚ^ƵƉƉŽƌƚ
 Product development capabilities with collagen peptides
based on many years of research and knowledge
 Reliability as a top manufacturer Bases in India covering a wide range of markets

Greater B2C sales

4
Measure 2
Expansion of direct sales
business

Measure 1:
Further pursuit of collagen peptide functionalityz Creating new markets other than beauty
Key market

Focus on B2B

Greater channels

Key market

3
Measure 1
In further pursuit ofcollagen peptide
functionality

Measure 3
Expansion of collagen
peptide market overseas

Domestic

Overseas
Area expansion© Nitta Gelatin Inc. All rights reserved

Measure 2:
Expansion of collagen peptide market overseas
z Work closely with distributors in Asia for market
penetration of our collagen brand, Wellnex
z Global sales of collagen manufactured at Halal certified
bases in India
Measure 3:
Expansion of direct sales businessz Rebranding aimed at developing new customer basez Raise product awareness and expand sales with effective
advertising investmentz Raise awareness of the strong health benefits of collagen
peptides through active public relations
31

Accelerating Health Support Global Expansion
Expand sales by leveraging the strengths of our brand in Asia in the collagen peptide market,
which is expected to grow rapidly in the future Penetration in Asia for the collagen
peptide brand - Wellnexz Develop global sales of halal-certified
collagen peptides

Maximize reliability as a top collagen
manufacturer in Japan in collaboration withoverseas distributorszzPartnering with distributors in Asia (8 countries)
to establish a foundation for business expansion
South Korea
z Nitta Gelatin basesz Overseas distributors

Tie-up with overseas distributors
Supply from bases in India to the growthmarkets of India, the Middle East and Africa
in addition to Asia and North America

Number of co-brandings*
with overseas companies

China

India plant

11
Taiwan8

ThailandPhilippines
VietnamSingapore
Indonesia
Overseas awards for Wellnex

FY2021

FY2022* Co-branding is where overseas retailers
display the Wellnex logo on theirpackaging to highlight the brand and sell
products

Drinks© Nitta Gelatin Inc. All rights reserved

Powdered
drinks

Cereal32

The Biomedical Market Environment
The industrialization of regenerative medicine has only just begun with further market expansion
expected in the futureMarket growth forecast for regenerative
medicine peripheral industries (Japan)(Trillions of yen)

Market growth forecast for regenerative
medicine peripheral industries (Worldwide)(Trillions of yen)

1.5

18

1.0

Services

12

Other

Japan
0.5

6

EuropeConsumables

U.S.
Equipment

0.0

2012 2015 2020 2025 2030 2035 2040 2045 2050
Source: Outline of the Program for Multiple Issues in the Basic Technology
Development Project for the Industrialization of Regenerative Medicine
and Gene Therapy, Ministry of Economy, Trade and Industry© Nitta Gelatin Inc. All rights reserved

0
2012

2020

2030

2040

2050

Source: Outline of the Program for Multiple Issues in the Basic Technology
Development Project for the Industrialization of Regenerative Medicine
and Gene Therapy, Ministry of Economy, Trade and Industry

33

Biomedical Strategy
Nitta Gelatin solidies its position as a raw material manufacturer in the biomedical field and aims toacquire new revenue streams, such as downstream business, through contract manufacturingEŝƚƚĂ'ĞůĂƚŝŶ͛ƐƐƚƌĞŶŐƚŚƐŝŶŝŽŵĞĚŝĐĂů
 Reliability in terms of safety as a top manufacturer inJapan Accumulation of knowledge and network of experts
through many years of collagen and gelatin research

Key market
Measure 2
Sales expansion of
medical collagen andgelatin overseas

Key market

Domestic entities

Area expansion

Overseas55

Key market

5
Measure 3
Incorporation ofdownstream businessthrough contract
manufacturing, etc.

Measure 1

Sales expansion of
medical collagen andgelatin

Materials

Contract development
and processing

Measure 1:
Sales expansion of medical collagen and gelatinz Respond to diverse needs (expand applications)

Measure 2:
Sales expansion of medical collagen and gelatin overseas
z Collaboration with overseas group companies
z Raise awareness of Nitta Gelatin overseas by strengthening
online marketing
Measure 3:
Incorporation of downstream business through contract
manufacturing, etc.
z Medical-related products contract manufacturing

Domain expansion
34© Nitta Gelatin Inc. All rights reserved

Accelerating Biomedical Growth
Taking advantage of the high safety of our collagen and gelatin, we will accelerate further
expansion of medical use with the completion of the Mirai Kan
 Collagen and gelatin for biologicaltissue engineering - beMatrix
Comparison of endotoxin levels
with gelatin research reagent

Achieves high safety by reducing
endotoxins* through proprietary
method* Since inflammation occurs when endotoxin levels
increase, it is essential to reduce levels in
medical applications

Brings R&D together under one roof
Manufacturing under stringent medical
level-quality controlz A place of disseminating information
welcoming tours of researchers, etc.
zz

10,000Endotoxins (EU/g)z

 Positioning of the Mirai Kan (newresearch facility) in Biomedical

1,000
n=32
Ave. 1.6㼼1.6

100
10
1

Instance of beMatrix used in advanced medicine

Gelatinresearch
reagent

beMatrix
gelatin

Drug delivery system (sustained release)*
Mixed with drug

Administeredby injection+
Drug

beMatrix© Nitta Gelatin Inc. All rights reserved* Drug delivery system (sustained release)
A system that regulates the rate at whicha single dose of a drug, administered to a
specific point, dissolves in the body,sustaining the effects of the drug for a
prolonged period of time.
Collagen and gelatin can be delivered tothe affected area by coating the drug
through bioaffinity or bioadsorption toenhance its therapeutic effect.

A view to expanding from material
sales business to downstream business,such as with contract manufacturing of
medical equipment, etc.
35

Strengthening of the Production System
Plans to make capital investment of ¥22bn over the next 10 years to include increased productionof collagen peptides
Strengthening of a stable and low-cost
production system Capital investment and specific details
AmountStable production on a global basis

Collagen peptide production
for protein intake applications
 Construction of the Mirai Kan
 Increased production ofcollagen peptides
Development of new raw materials and cost
reductions by improving production efficiency,such as factory automationNew
investment

Business efficiencies and labor saving by
utilizing AI

Renewal ofexisting
facilities



Details

Strengthen initiatives to better the environment¥7.5bn¥14.5bn

Reorganization at the Osaka
Plant
 Other

Actual capital investment(Millions of yen)

2,344

2,400
1,800

1,626
1,359
1,098

1,200
600
0
FY2019FY2020

FY2021

FY202236© Nitta Gelatin Inc. All rights reserved

Strengthening of Business Foundation
As well as strengthening the promotion system for new business and new product development,
we will establish a foundation where employees can flourish

Traditional Strengthen the promotion system for new
business and new product development
Sales
activities

Existing customers
Sales Dept.

Potential customers
Insufficient resources to drive new businessdue to busy dealing with existing customers

Sales Dept.

Existing customers

Now

Sales
activities
New

MarketMarketing Dept.

Potential
customers

Collaborate Measures for our human resources
Review of the employee assessment and treatment system
 Revisions to the personnel system to reward taking on challenges
and achievements
 Introduction of a highly transparent and understandable assessment
systemStrengthening of human resource development
 Development of human resources who can shoulder management
responsibilities
 Enhancement of the training system to develop young and mid-level
employees to support their desired career development

Work style reform and further promotion of women's
advancement
 Promotion of flexible working styles through flextime and teleworksystem Creating a work environment where women canplay an active role (encouraging childbirth/childcare
leave, etc.)(Acquired March 2022)

Product
Development Dept.
Established new marketing department, moving from theproduct development process to reflect market needs© Nitta Gelatin Inc. All rights reserved

Fostering a culture in which employees feelrewarded for their workand taking on challenges toward a common goal37

Sustainability
In addition to establishing a sustainability policy for the realization of a sustainable environmentand society, we will select and promote activities that should be prioritized in light of our corporate
philosophy and our unique business model
Sustainability policy and focus activities
Environmental
Improvement
Initiatives

E The Environment Complying with related
laws and regulations andworking to preserve theenvironment

Community
Involvement
and Development
 As a local citizen, we
promote activities that
contribute to thesustainable development oflocal communities.

S

Fair Operating
Practices Prioritizing safety andreliability, working to improve
the quality of products, services,and distribution, and living up to
the expectations and trust of ourcustomers.
 Contributing to the resolution ofsocial issues in the fields ofhealth, food, and medicine.

Core
Rights andSubjects S Human
Labor Practices
 Respecting human rights and diversity
and preventing human rights
violations.
 Respecting diversity and working torealize a safe and healthy working
environment.
 Working toward humanOrganizational
resources development
and to improve theGovernancedesire and abilityof employees Strengthening and improving
to work.
corporate governance andincreasing the transparency andefficiency of management.

 As well as complying with allapplicable laws and regulations,
we carry out our procurement
activities in cooperation withour business partners in asocially responsible way.

G

Related SDGs

S
ConsumerIssues

Focus
Activities

S Evaluating environmental impact
and setting targets to reduce theenvironmental burden.

Details of initiatives
 Reducing CO2 emissions
 Reducing water use
 Environmental improvements
through by-products

Living with and Details of initiatives
 Regional cleanups, making
Contributing to ground available
 Factory tours
Local
Communities  Various sports support

Related SDGs

Related SDGs

TowardResolvingSocial Issues

Details of initiatives
 Resolving issues in an aging
society Maintaining and improving
human health Resolving issues in food Resolving issues in the
medical field

Realizing
BetterWorkplacesand Human
Resource
Development

Details of initiatives
 Promoting diversity
 Occupational health andsafety Supporting employee healthmanagement
 Human resource
development
 Maintaining work-life balance

Related SDGs

38

© Nitta Gelatin Inc. All rights reserved

Thank You

© Nitta Gelatin Inc. All rights reserved

39

Appendix

40© Nitta Gelatin Inc. All rights reserved

and Sales Expansion of highly
Key Market 1: Development
processed Products
Improve customer convenience through the development and sales expansion of highly processed
products

 Mochi-nobi Dolce

Main targets
HotelsRestaurant chains

Issues for hotels and restaurant chains
z
z

z

z

A distinctly authentic dessert in appearance andtexture is made simply by squeezing out and serving
Creating a surprise for posting pictures on social
media

A need to cut cooking times due to labor shortages
A need to attract customers with more distinctive
dishes due to less customers from the pandemic

The environment has become accepting ofproducts processed to a high degree

Aim to discover new potential
customers by utilizing network ofchefs and opening e-commerce site
© Nitta Gelatin Inc. All rights reserved

41Key Market 2: New Ventures in Food Solutions
Nitta Gelatin aims to expand sales of collagen peptides for protein intake by leveraging our productdevelopment capabilities and the strength of our integrated production system in response to
growing health consciousness

 Protein varieties and uses
Although demand for protein intake is growing,getting the right balance is difficult

 Easy Protein BBPͶnew product website
https://easyprotein.nitta-gelatin.co.jp/ (in Japanese only)Ways to take protein
Meat-based diet

Plant-based diet

More effective aminoacid absorption
efficiency
Fats also ingested

Less effective amino acidabsorption efficiency,
increased food intake
Less fat

Product
Intended use

Important to have the right balance
between meat-based and plant-based
Processed from collagen, an animal protein,
into protein by utilizing our advanced
manufacturing technology

FeaturesEasy Protein BBP (Bovine Bone Powder)Protein ingredient specifically for protein
supplements
9 With low viscosity and exceptional solubility, and noflavor lost even when more is mixed, it is the perfectingredient for protein supplements.
9 Made completely at plants in Japan. Stable supplies
ensured with a speedy and timely supply system.
9 Specialists in developing recipes for various foods
and creating samples working in the Application Lab.
Technical support for the planning and developmentof products high in protein also provided.
42© Nitta Gelatin Inc. All rights reservedof Collagen Peptide Market
Key Market 3: Expansion
Overseas
Expand sales of collagen peptide overseas, mainly in Asia and North America, by leveraging theWellnex brand, which has made a name for itself in Japan and is becoming more prominent in Asia
Wellnex benefits

Wellnex is the brand name forcollagen peptides developed by Nitta Gelatin.

Track record of Wellnex brand development
A Wellnex productWellnex Hadamaru
A food with functional
claims that helps toalleviate lessening skinmoisture and elasticity.

© Nitta Gelatin Inc. All rights reserved

2012

Developed Wellnex as a highly functional collagen
peptide brand

2020

Developed Replenwell to strengthen the brand power ofhighly functional collagen peptides in North America

2021

Developed Wellnex Dipeptide to strengthen the brandpower of highly functional collagen peptides in Asia

43

Key Market 4: Expansion of Direct Sales Business
Expand the direct sales business by raising awareness and promoting functionality
 Measures to raise awareness and expand salesz

Survey results asking about the purpose of collagenintake show there is a latent need for collagen outsideof health and beauty applications

Raising product awareness with effective
advertising investment¾ Attracting visitors to thespecial collagen website byinvesting in advertising Potential for expanding collagen intake¾ Promoting the special
benefits of exercise with thehelp of RUNSHOT supporters

0%

10%

20%

30%

40%

50%

Moisturize and give elasticity to skin
Build stronger muscles and tendons
Improve quality of sleep

Improve condition of intestines
Build stronger bonesz

Improve condition of hairCommunicating the benefits of collagen
peptides through active public relations

Improve condition of teeth and gums
Improve movement in jointsz

Repeat rate forexisting customers

Build up protein levels

77%

Lower blood pressure(FY2022)

Healthier and stronger nails
Alleviate joint pain

Rebranding to gain new customers¾ Health foods have been reorganized into three series(Health, Beauty, and Sports) with updated productnames and packaging

Speed up injury recovery process
Post-injury care
Survey by Nitta Gelatin, April 2022

44

© Nitta Gelatin Inc. All rights reserved

Key Market 5: Promoting More Use in the Biomedical Field
Solving medical problems by combining the various medical functions of collagen and gelatin

The exceptional properties of collagen and gelatin
Biocompatibility

Bioabsorbency

Physical and scientificcharacteristics

Medical use cases(Melting, solidifying, etc.)

Drug delivery system

Cell therapy(sustained release)
Sustains the effects of medicines,
reducing side effects

Use cases that take advantage ofĐŽůůĂŐĞŶͬŐĞůĂƚŝŶ͛ƐĐŽŵƉĂƚŝďŝůŝƚǇwith cells are progressing

Cell culture collagen
Stable culture of human cells
derived from iPS cells andstem cells© Nitta Gelatin Inc. All rights reserved

Bio-adhesives,
hemostatic and embolic
agents
Efficiently binds tissue

Skin and bone prosthesis

Biopharmaceuticals

Effectively reproduces bones
and skin

Solving problems duringstorage and administration

45

Awareness and Incorporating
Key Market 5: Raising
Downstream Business
Eye on expanding usage by raising awareness of our company overseas and expanding into
downstream business Raising awareness of Nitta Gelatin overseas
by strengthening online marketingz

Sharing information through the Company's
dedicated medical website for overseas markets

 Incorporating downstream business throughcontract manufacturing of medical-related
products
Policy to engage in downstream business initiatives
from material sales to contract manufacturingz Leveraging our strengths as a collagen and gelatinmanufacturerz

Outsourcing of medical-related manufacturing
Delivery of
raw materials

Now

Nitta Gelatin

Contract
manufacturing

Dedicated medical website for overseas markets© Nitta Gelatin Inc. All rights reserved

Productdelivery

Medical equipment
manufacturing
company

Future¾ Public relations in collaboration withoverseas sales subsidiaries¾ Active participation in overseas exhibitions

Medical equipment(sales)manufacturer

Contract
manufacturing

Medical equipment(sales)manufacturer

Nitta Gelatin
Productdelivery46