Overview of Chori

President’s Message

Top Message

As a company that has continued to grow by adapting to the changing
times, Chori will strive to further demonstrate its uniquenesswhile building a foundation for the next generation.

Chori’s Uniqueness and Mission

Kazuo Sakihama
President, CEO & COO
President and Executive Officer

3

CHORI CO., LTD.

Chori is a company with a long history that dates back morethan 160 years. However, we are also a relatively young
company in the sense that in 2003 we made a fresh start as arenewed Chori with the establishment of our Reborn
Management Plan. In the past, Chori branched out into a wide
range of business fields by accumulating significant debt
through bank loans but failed to adapt to the changing times,
resulting in substantial losses and succumbing to a financial
crisis. From there, we changed our management approach to
one that focuses on asset efficiency by selecting and concentrating on highly profitable businesses where we could demonstrate our expertise, leading to the establishment of the Fibers,
Textiles, and Garments, Chemicals, and Machinery businesses
that exist today. Under our Reborn Management Plan, we
continued to steadily improve our business results year afteryear. As a result, in fiscal 2022 we posted net sales of ¥329.4
billion and ordinary profit of ¥12.4 billion and, as we did in fiscal
2021, achieved our highest results ever for both ordinary profit
and net profit attributable to owners of parent. In addition, ourROA (ordinary profit basis), which demonstrates a company’s
earnings power, improved to 9.0% at the end of fiscal 2022.
The main reason behind these achievements is the efforts ofour employees, who have boldly taken on the challenge ofdeveloping new markets and expanding existing ones byleveraging our respective global networks in the Fibers, Textiles,
and Garments, Chemicals, and Machinery businesses. Despite
being a small yet highly skilled group, we have been able toidentify growth areas in each business and expand thesebusinesses by capitalizing on every business opportunity.
There have often been claims that trading companies are
no longer necessary in times of change, such as during theperiod of high economic growth in Japan, when we saw
substantial improvements in the business performances ofautomobile and consumer electronics manufacturers, and the1990s, when the internet became widely used by the generalpublic. However, trading companies have continued to exist
and improve their business performances. Although the global
supply chain was hit hard by COVID-19 in 2020, Chori continued to supply the products that were needed by customers
without delay while meeting their demands by adding value thatwas unique to Chori. Coincidentally, the COVID-19 pandemic
has reaffirmed Chori’s role and mission as a company, and theconfidence levels of our employees have increased as a resultof our experience in continuing to respond to customer needsin line with our mission of ensuring that our products areconstantly delivered. Chori has adapted to the changes of eachgeneration throughout its long history. Going forward, we willcontinue to draw on this responsiveness and flexibility to further
expand our business in the next generation as a multifaceted
specialized trading company.

Review of Chori Innovation Plan 2022
In fiscal 2022, the final year of Chori Innovation Plan 2022, thefuture of the economy in Japan and the rest of the world
remained uncertain. Despite this, by demonstrating the strengthsof Chori’s business foundation, we were able to conclude ourprevious medium-term management plan by increasing revenuesin every business segment and achieving all of our quantitative
targets. In the Fibers, Textiles, and Garments Business, thebusiness environment remained challenging from fiscal 2020 tothe first half of fiscal 2022 due to the sluggish apparel market in
Japan stemming from the effects of COVID-19. In light of thisenvironment, we set out to further strengthen our businessfoundation by reorganizing the Textile Division into a single
division, establishing a global business foundation, and optimizing
our business portfolio, which led to an increase in ordinary profit
over the three-year period of the previous plan. As we began to
finally see improvements in the business environment from thesecond half of fiscal 2022, such as the increasing demand for
SDG-oriented products, we were able to expand our businessby distinguishing ourselves from the competition with highperformance products. As a result, our profit level in the final yearof Chori Innovation Plan 2022 came within reach of our initial
targets. In the Chemicals Business, we were able to maintain ahigh profit level by riding the wave of favorable market conditions
from the second quarter of fiscal 2020, further enhancing ourexisting businesses, and building a new supply chain. Meanwhile,
although the business has lost some momentum since the second
half of fiscal 2022 due to sluggish demand overall and deteriorating market conditions, we acknowledge the fact that we were able
to steadily raise our profitability to pre-COVID-19 levels. We willcontinue to carry out business investments and a variety of othermeasures to proceed even further in our transition to a highly
profitable business model. In the Machinery Business, we are
expanding business in Europe and Central and South America,
where demand for automobiles is on the rise. On the other hand,

Tsumugu Report 2023

4

Overview of Chori

President’s Message

despite an increase in revenue, we incurred an ordinary loss of¥1.3 billion in fiscal 2022 due to an additional provision ofallowance for doubtful accounts that was recorded for thedelay in collecting receivables from business partners in the
United Arab Emirates (UAE). We will do our utmost to collectthese receivables and, as a measure to prevent recurrence, wewill pay due consideration to country risk when making business
investments as well as strengthen our risk management system.
From the viewpoint of strengthening our human resource
development structure, we made substantial upgrades to ourhuman resource system and worked to establish evaluation criteria
and a remuneration system that enables employees to work witha sense of satisfaction. We will continue to make significant
changes in order to remain a company that is selected by highly
talented individuals in both our new-graduate and mid-career hires.

Awareness of the Business Environment
In China, where Chori has been building a business foundation
over many years and established a robust supply chain, thezero-COVID policy was eased significantly from December
2022. As a result, domestic consumption in China was
expected to increase from the latter part of January 2023, thetime of Chinese New Year, but demand has not grown to thelevel we had anticipated. Globally, demand for consumer-related
products remains sluggish due to the effects of inflation. The
supply–demand balance in China is in disarray, and we areclosely monitoring the deteriorating market conditions ofchemicals and other products.
While paying close attention to global divides centered on thedecoupling between the United States and China, we will continue
to take measures to establish a stable supply chain in the ASEAN
region and other Asian countries, particularly in India, and respondto diversifying needs, including risk aversion. Meanwhile, we willcontinue to focus on our business in China, where its factories andmarket have a significant impact on the global economy, whileremaining keenly aware of the risks and expand our businessglobally centered on Tokyo, Osaka, and Shanghai.

VISION2030 and Basic Strategies of Chori
Innovation Plan 2025
VISION2030 has been newly formulated as a vision of the company
we aspire to be by 2030. In order to achieve sustainablegrowth, we at Chori must constantly bear in mind the importanceof the health of our employees, who serve as the foundation of
our business management; our coexistence with society; andthe innovation of our business by adapting to changing times.
To this end, we further clarified our vision of the company weaspire to be based on the three themes of “sustainability,”“well-being,” and “innovation” ( see “VISION2030” on page 12).
While bearing these themes in mind, we will strengthen thoseareas where we are lacking and further refine those where weare making progress in our efforts. In terms of quantitative targets,

5

CHORI CO., LTD.

we aim to achieve net sales of ¥400.0 billion and net profit before
income taxes and other adjustments of ¥20.0 billion in fiscal 2030.
In April 2023, we formulated our new medium-term
management plan Chori Innovation Plan 2025. Chori Innovation
Plan 2025 represents the final stage of Chori Innovation Plan,
under which we proceeded with measures to consistently
deliver ordinary profit at the ¥10.0 billion level since fiscal 2017.
Under our previous medium-term management plan, Chori
Innovation Plan 2022, we took measures to “promote consolidated
management centered on our global business” and improved
our business performance starting with our overseas operations.
We will continue this same strategy as one of our basic strategies
under Chori Innovation Plan 2025 while diversifying our supply
chain and adapting to changing markets. Under the basic
strategy of “develop sustainable businesses that adapt quickly
to the changing business environment,” we will develop suppliers
to meet diversifying customer needs and carry out business
investments and M&As, which were put on hold during the
COVID-19 era, in order to develop sustainable businesses.
Although the lithium compound production project in Chile,which was postponed due to COVID-19, is still in the processof being completed, the direction of the project should be set
by the end of fiscal 2023. In business fields that Chori candevelop on its own initiative, we intend to make concrete plans
to carry out business investments in growth areas, such as thehealth and environmental fields.
We will also “promote ESG management” as one of ourbasic strategies under Chori Innovation Plan 2025. From anenvironmental point of view, the Chori Group aims to becomecarbon neutral by 2050 and began disclosing information basedon the recommendations of the Task Force on Climate-related
Financial Disclosures (TCFD) in June 2022. Under Chori Innovation
Plan 2025, we will refine our scenario analyses, including the
1.5ºC scenario, and continue to calculate results for Scope 1,
Scope 2, and Scope 3 emissions. Chori will also play a key role
in resolving environmental issues through its business activities.
In the Fibers, Textiles, and Garments Business, we will continue
to focus on our BLUE CHAINTM initiatives and aim to achievesustainability throughout the supply chain, while in the Chemicals
Business we will expand our portfolio of SDG-oriented products,
such as biodegradable resins and plant-based foods, with theaim of increasing our sales of SDG-oriented products to ¥50.0
billion (two and a half times fiscal 2022 levels) in fiscal 2025.
To promote the social aspects of our ESG management,
we will strengthen our human resource initiatives. Specifically,
we will increase employee engagement and promote healthmanagement so that our employees can engage in their daily
work by gaining a sense of personal and professional growth
and a sense of pride and accomplishment. For Chori to continue
to grow into the future, it is especially important that we secureand develop highly skilled personnel. By recruiting talented
individuals with the ability to make an immediate impact andprofessionals from various backgrounds for both new-graduate
and mid-career positions, Chori will continue to expand thescope of its business. In addition, the Company will invest in
redeveloping its human resource development system, such as

by enhancing the effectiveness of its training programs. Fromthe viewpoint of respect for human rights, we conduct CSRbased procurement surveys regularly as a part of our measures
to establish a sustainable supply chain. In the future, we willconsider conducting human rights due diligence while expanding the scale of our measures to promote human rights.
In terms of the governance aspect of its ESG management,
Chori will strengthen its measures against country and geopolitical risks, particularly in developing countries, and adopt
return on invested capital (ROIC) as a management indicatorfrom fiscal 2023 to proceed further ahead with a management
approach that focuses on the cost of capital. Moreover, we willcontinue to diversify our management perspectives by placing
greater emphasis on the lack of women in director and othermanagement positions as an issue as well as appointing more
women and taking other measures to increase the diversity of
our management team.
Our digital transformation (DX) strategy will serve as thefoundation for the three basic strategies I discussed previously.
In April 2022, we launched the Companywide business transformation project Chori Accelerate Renovation Achievement
Transformation (CARAT), in which we aim to begin full-scale
operation of SAP in fiscal 2025 by moving on from our proprietarysystem that has been used for more than 20 years. Although
this transformation will entail a lot of work, the adoption of SAP
will allow us to standardize operations and thereby improve
efficiency as well as accumulate data, thus strengthening oursales competitiveness through the use of data. In order torealize flexible management that can adapt to change, we will
forge ahead with the implementation of SAP and develop aframework for Chori’s transformation into a new organization.

Looking Ahead to Chori’s Future Growth
In the eight short years since I became the Company’s president
and CEO in 2015, society has undergone significant changes. In
recent years, there has been an increasing focus on climatechange and the trend toward carbon neutrality, which stems
from the commitment to mitigate climate change, as a megatrend.
In order to achieve its CO2 reduction targets by 2030 and carbon
neutrality by 2050, Chori must adapt to a new society that is
influenced by the SDGs, gender equality, rapidly advancing
digitalization, the use of AI, and other factors. With the likelihoodof further growth in demand for SDG-oriented products andsignificant changes in the manufacturing industry, we will dowhat is necessary to adapt to these changes while aiming toachieve the sustainable growth of our business, particularly inthe thriving region of Asia. In the 1970s and 1980s, Choriestablished local subsidiaries in Singapore, Thailand, andMalaysia as it embarked on the Southeast Asian market fromearly on. In 2016, we established a local subsidiary in Vietnam,
where the sewing factory of STX Co., Ltd., which became aconsolidated subsidiary in fiscal 2021, has resumed full-scale
operations upon recovering from the effects of COVID-19. We
will harness the strengths of these business sites to further
expand our business in the ASEAN region, where the GDP is
expected to become double the size of Japan by fiscal 2030.
In India, a country that is experiencing remarkable growth, wehave already dispatched a representative from Japan and willcontinue to develop a foundation for further growth.
In the 20 years since the introduction of its Reborn
Management Plan, Chori has grown to what it is today byaddressing the various changes and needs of society andcontinuing to evolve as a company. To continue to achievesustainable growth in the future, we will aggressively implement
new changes, such as restructuring the organization bypromoting DX and expanding and utilizing our human capital,
which includes promoting more active roles for women.
Meanwhile, what will remain unchanged 20 and 30 years fromnow is Chori’s DNA. We will continue to respond to the needsof our customers through not only our trading activities but also
our provision of high-value-added products while continuing to
make our customers’ dreams come true by leveraging our
expertise and responding meticulously to their needs andpursuing our own dreams in the process. This will remain a partof our DNA in the years to come. Our customers have highhopes for Chori’s ability to take on new and difficult challenges.
While responding to these expectations, we will turn thechanges taking place in our world into business opportunities
and build a foundation for our achievement of VISION2030.

Kazuo Sakihama
President, CEO & COO
President and Executive Officer

Tsumugu Report 2023

6

Overview of Chori

Financial Strategy

Basic Strategies of Chori Innovation Plan 2025
We will implement the basic strategies ofChori Innovation Plan 2025 andbuild a foundation for Chori’s next
generation of growth.
Tatsuyuki Sakoda
Director, Managing Executive Officer
General Manager of Corporate Planning Division

Review of Fiscal 2022 Results
In fiscal 2022, the final year of Chori Innovation Plan 2022, werecorded net sales of ¥329.4 billion, ordinary profit of ¥12.4
billion, ROA (ordinary profit basis) of 9.0%, and ROE (net profit*
basis) of 11.8%, achieving all of the quantitative targets we had
declared in our previous plan. Moreover, as it did in fiscal 2021,
the Company achieved its highest results ever for both ordinary
profit and net profit attributable to owners of parent. We credit
this achievement to our efforts to “promote consolidated
management centered on our global business,” which has
strengthened cooperation with business sites overseas throughour business activities. Although Chori Innovation Plan 2022
turned out to be our medium-term management plan for the
COVID-19 era, we believe we were able to harness Chori’s
ability to respond positively to changes in market conditions,such as global supply chain disruptions and soaring raw
material costs, as well as its market expertise, which is a defining
strength of the Company. In addition, the M&A strategy we arepromoting under our Chori Innovation Plan has been a key
factor in the steady growth of our business performance thus far.
Meanwhile, in the Machinery Business, an additional
provision of allowance for doubtful accounts in the amount of¥1.7 billion was recorded in fiscal 2022 due to a delay incollecting receivables from a business partner in the UAE. While
we had been expanding our business to Nigeria, which boasts
the largest population and GDP in Africa, the supply chain
disruptions arising from the effects of COVID-19 and thedeclining oil production resulted in a lack of foreign currency inthe country, which led to the delay in collecting receivables. In
addition, a further provision was recorded due to the ongoing
restrictions on the transfer of funds from Nigeria, raising the
cumulative amount of provision of allowance for doubtful
accounts to ¥2.4 billion. The Company will continue to makeevery effort to collect these receivables, for which theaccounting process has already been completed. Under Chori
Innovation Plan 2025, we will take all the necessary measures
to prevent a recurrence of such situations by keeping a close
eye on not only the trends and developments of our business
partners and markets but also the state of the countries inwhich we operate and funding streams while continuing to
expand our business.

* Net profit attributable to owners of parent

Consolidated Financial Results and Rate of Achievement of Chori Innovation Plan 2022 Targets 
FY2021

7

FY2022Difference(Billions of yen)

FY2022 Plan

Achievement Rate

Net Sales

284.1

329.4

+45.3

280.0

117.6%

Gross Profit

30.7

37.1

+6.4

—

—

Selling, General and Administrative Expenses

21.3

24.4

+3.1

—

—

Operating Profit

9.3

12.7

+3.3

10.8

117.2%

Ordinary Profit

10.3

12.4

+2.2

11.0

113.1%Net Profit Attributable to Owners of Parent

6.8

8.1

+1.3

7.3

111.3%CHORI CO., LTD.

Chori Innovation Plan 2025 is the final stage of our Chori
Innovation Plan, which we introduced in fiscal 2017. Under the Chori
Innovation Plan, we have increased profits beyond expectations
and gained confidence in our ability to improve profitability. Basedon this ability to continue to generate earnings, we established
VISION2030, our vision as a company that will continue to achievesustainable growth into the future by striking the right balance
between the achievement of “sustainability,” “well-being,” and“innovation.” While continuing to “promote consolidated
management centered on our global business” as well as its otherbasic strategies, Chori will draw on its ability to adapt to changes
that was put to the test during the pandemic and, in the process,aim to expand its business globally in each segment. Meanwhile,
in order to continue to grow over the medium to long term, it isimperative that we take our business to new heights. To ensurethat Chori continues to achieve sustainable growth into the future,
one of the major themes of Chori Innovation Plan 2025 is toestablish the foundation that it still lacks to this day. Specifically,
we will focus on strengthening our governance structure as acompany listed on the Prime Market of the Tokyo Stock Exchange
and coexisting with local communities and society through ourbusiness activities. Moreover, in April 2022 we launched CARAT
to proceed with our Companywide business transformation,
and we aim to begin full-scale operations of our mission-criticalsystem in fiscal 2025. Through the standardization of our business
operations and the promotion of data-driven management, we
will develop a DX management structure that will underpin the
future of our business.
Meanwhile, we are concerned about the risks that theconflict between Russia and Ukraine and the polarization of the

global economy will have on our ability to achieve our fiscal
2025 targets. Although these risks currently do not have asignificant impact on Chori’s supply chain, many of ourbusiness partners are developing systems that do not rely on
specific countries as a measure to ensure business continuity.
In response, Chori is assigning more representatives fromJapan to ASEAN countries and developing a new supply chain.
We will continue to expand our business in key regions bycapitalizing on the business opportunities presented bychanges in market and global trends.
During the times of hardship up until the early 2000s, wepoured our heart and soul into reviewing and restructuring ourbusiness portfolio. By selecting and concentrating on certain
business areas, we formed the current Fibers, Textiles, andGarments, Chemicals, and Machinery businesses, which havecontinued to grow ever since as highly profitable businesses. In
this sense, we believe our current business portfolio is strong, andwe will strive to optimize our business portfolio by monitoring the
profitability of each segment. We will also continue to aggressively
engage in M&As to spur the further growth of our businesses.

Fiscal 2023 Performance Forecast (Billions of yen)

FY2023(Forecast)Medium-Term
Management Plan
(Final Year Target)

Nat Sales

340.0

Net Profit before Income Taxes

14.0

360.0
16.0

Net Profit Attributable to Owners of Parent

9.4

11.0

ROA (Net Profit Basis)—

7% or more

ROE (Net Profit Basis)—

12% or more

ROIC

—

Approx. 10%

Financial Position
As a result of increases in cash and deposits and tradereceivables, total assets amounted to ¥143.2 billion and theequity ratio was 50.4% as of the end of fiscal 2022. Although
our aim is to continue to maintain our equity ratio at around
50% over the medium to long term, we plan to carry out
business investments and M&As, which we were forced to
discontinue during COVID-19.
In terms of balance sheet management, in fiscal 2023 weadopted ROIC as a new management indicator in each businesssegment. After overcoming years of hardship, in 2003 weformulated our Reborn Management Plan, under which we
promoted structural reforms to develop a more robust
organizational structure by focusing on highly profitablebusiness areas. Accordingly, in the past, each business segment
promoted a management approach that placed emphasis on
capital efficiency. By adopting ROIC as a management indicator
once again, we will develop a system that enables our businesssegments to invest capital in more profitable business areas
while focusing on Chori’s medium- to long-term growth.

Financial Soundness(Billions of yen)
150.0
100.0

(%)

143.2

134.1

75

48.5

50.4

65.1

72.2

25

50.0
0

(6.9)

(13.9)

Mar. 31, 2022

Mar. 31, 2023

Total assets
Total equity
Equity-to-asset ratio

Net interest-bearing debt

–50.0

50

0

Profitability / Capital Efficiency
ROA (Ordinary Profit Basis)Mar. 31, 2022

Mar. 31, 2023

Difference

8.4%

9.0%

+0.6ptROA (Net Profit Basis)

5.6%

5.9%

+0.3ptROE (Net Profit Basis)

11.0%

11.8%

+0.8ptTsumugu Report 2023

8

Overview of Chori

Reference Material

Financial Strategy

Reasons for Changes in Ordinary Profit and Trends in Ordinary Profit

Cash Allocation
During the three-year period of Chori Innovation Plan 2025, we
expect to achieve net profit after taxes of approximately ¥30.0
billion. We plan to distribute around ¥10.0 billion of this amountas dividends to shareholders and allocate the remaining ¥20.0
billion to growth investments. To ensure that our shareholders
feel secure about investing in Chori’s shares, our dividend
policy calls for a consolidated dividend payout ratio of at least
30% and a dividend on equity ratio (DOE) of 3.5% or more fromfiscal 2023. In terms of investments, as described earlier, theCompany will focus on business investments that were
postponed as a result of COVID-19 and allocate resources into
its human resources, who are the backbone of its businessactivities, as well as its DX efforts. For business investments
and M&As, we will concentrate on the health and environmental
fields, where demand has continued to grow in recent years.
Specifically, we will identify the areas where we must expand
our business and keep our eyes open for global business
opportunities to ensure that Chori continues to grow over the
medium to long term. Also, given that we are a trading
company without manufacturing facilities, our human resources
are all the more important. Chori will increase investments andstrengthen its management foundation to secure and develop
highly skilled personnel. Moreover, with respect to intellectual

property, the Company is devoting more attention to its branding
strategies, particularly in the Fibers, Textiles, and Garments
Business, and registering original brand names as trademarks.
We have also obtained several patents on technologies
developed together with our business partners and customers.
We will continue to enhance awareness of Chori’s original
products and our ongoing BLUE CHAINTM initiatives while
promoting investments to protect intellectual property rights.

Cash Flows 

+1.6

18.0

Record-high profit

–3.1

+4.9
–1.2
12.4
12.0

10.3

(Billions of yen)
FY2021

FY2022Difference

Cash Flows from Operating Activities

(2.3)

9.6

+11.9

Cash Flows from Investing Activities

0.2

(0.3)

–0.5

Cash Flows from Financing Activities

(4.0)

(3.1)

+0.9

Effect of Exchange Rate Change on
Cash and Cash Equivalents

0.6

0.6

+0.0

Total Cash Flows

(5.6)

6.8

+12.4

Cash and Cash Equivalents at End
of Period

12.0

18.9

+6.8

6.0

0

Toward Chori’s Medium- to Long-Term Growth
While Chori is a company with an extensive track record thatspans more than 160 years, it is also a relatively young
company in the sense that it made a fresh start in 2003 withthe establishment of its Reborn Management Plan. In fiscal
2023, 20 years after the introduction of this plan, we introduced
Chori Innovation Plan 2025 to serve as the final stage of ourdevelopment of a foundation for the next stage of growth. In
addition to achieving its coefficient target in fiscal 2023 by
expanding its global business, Chori will forge ahead tobecome a company that continues to coexist with society
through the contributions of its business activities.

Reasons for Changes in Ordinary Profit(Billions of yen)

The Company has expanded its business to date byextending its efforts beyond trading activities and continuing todevelop the Fibers, Textiles, and Garments, Chemicals, andMachinery businesses. While continuing to grow in the years
ahead, Chori will seek to further differentiate itself from thecompetition by refining its uniqueness as a company andensuring that this vibrant uniqueness leaves an impression on
all of its stakeholders.

FY2021

Effect ofincreased sales

Increased profit ratio

Increase in selling,
general and administrative
expenses

Nonoperating profit orloss and others

FY2022

Trends in Business Performance

(Billions of yen)
FY2021

FY2022Full-year
total

Full-year
total

1Q

2Q

3Q

4Q

284.1

81.9

86.6

86.9

74.0

329.4

2.0

9.3

3.2

3.6

4.2

1.7

12.7

2.9

2.1

10.3

3.7

3.7

3.6

1.4

12.4

1.9

1.0

6.8

2.3

2.5

2.8

0.6

8.1

1Q

2Q

3Q

4Q

Net Sales

60.7

69.4

75.8

78.3

Operating Profit

2.6

2.3

2.6

Ordinary Profit

2.9

2.4

Net Profit Attributable to Owners of Parent

2.3

1.7

Market Trends

Foreign Exchange Rate

Oil Prices(Yen)(Yen)(US$/barrel)(US$/ton)

21

14

16.3

16.9

16.5

112.2

106.2

111.0

15.3
108.8

16.8
110.7

19.3
122.4

19.4

150

120

100

80

50

40

100.3

133.5

7

64.9
50.6
470.1

579.1

552.9

75.7

59.2

60.1

1,500

1,000

1,009.2

20.5

677.8

594.3

500

294.8
0

2017

2018

RMB (left scale)

2019

2020

USD (right scale)Note: As of March 31
Source: Rate as of the Company’s term-end

9

CHORI CO., LTD.

2021

2022

2023 (CY)

0

0

2017

2018

2019

New York crude oil (left scale)

2020

2021

2022

2023 (CY) 0

Naphtha (imports) (right scale)Note: N ew York crude oil is as of March 31; Naphtha is single-month average for March
Source: Company research

Tsumugu Report 2023

10

Overview of Chori

Becoming a corporate group that continues to evolve andchange on a global scale, underpinned by its exceptional
capabilities and expertise

We aim to achieve our key performance indicators (KPIs) by transforming
our business and management structures through the promotion of digitaltransformation (DX) while implementing our basic strategies of “promoteconsolidated management centered on our global business,” “develop
sustainable businesses that adapt quickly to the changing businessenvironment,” and “promote ESG management.”

New Medium-Term Management Plan:

Chori Innovation Plan 2025

Net sales (target)
 et profit before income taxes (target)
N

360.0
340.0

330.0 329.4
311.7
280.0

300.0
8.7

7.5

10.3
284.1

8.7

Innovation
A company that can constantly
generate higher levels of profit bydeveloping new businesses throughcontinuous innovation andinvestment in growth areas.

Chori Innovation Plan
200.0 216.2

(%)

9.0
240.0

7.0

(%)

ROA
(Net Profit Basis) (%)—

7% or more

ROE
(Net Profit Basis) (%)—

12% or more

4.7

6.9
9.7

7.3
10.7

7.5
11.0

4.1
2.2

8.4
11.0

9.0

FY2023(Targets)

11.8

FY2025(Targets)

Chori Innovation Plan 2025
FY2017FY2018FY2019Chori Innovation Plan 2019

FY2020

FY2021

FY2022

The final stage of consistently delivering ordinary profit

CIP2022

CIP2025

Priority Measures and KPIs

FY2016FY2019FY2022

FY2025

Consolidated Management
Centered on Global Business Overseas subsidiaries,
trends in ordinary profit¥1.2 billion¥1.9 billion¥3.2 billion¥4.5 billion

M&A Effect*1
Subsidiaries through M&A¥0.3 billion

ASADA U CO., LTD.
and KOZAKURASHOKAI CO., LTD.

¥0.6 billion¥2.5 billion
STX Co., Ltd.

¥4.0 billion

30% or more

Shareholder Returns
Around 20%
Trends in dividend payout ratio

25% or

30% ormore

more

Trends in Ordinary Profit¥7.0 billion¥8.7 billion ¥12.4 billion¥16.0 billion

Trends in Net Profit before
Income Taxes¥7.2 billion¥9.3 billion ¥12.8 billion¥16.0 billion

DOE of 3.5%
or more*1 Ordinary profit of M&A subsidiaries, amortization of goodwill, etc.

Note: Effective fiscal 2020, the Company has adopted the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29) and the Implementation Guidance on
Accounting Standard for Revenue Recognition (ASBJ Guidance No. 30, issued on March 30, 2018).

Review of Chori Innovation Plan 2022 

CIP2019

A New Stage

Chori Innovation Plan 2022

of ¥10.0 billion or more

Chori Innovation Plan 2025 KPIs 

In fiscal 2022, the final year of Chori Innovation Plan 2022, we posted our highest results ever for ordinary profit, at ¥12.4 billion, andnet profit attributable to owners of parent, at ¥8.1 billion, and achieved all our numerical targets of the medium-term management
plan. We reached the ¥10.0 billion level for ordinary profit two years in a row, in fiscal 2021 and fiscal 2022, despite the recording ofprovision of allowance for doubtful accounts in fiscal 2020 in relation to a chemical manufacturing group in China. As a result, weestablished a foundation for our new stage of consistently delivering ordinary profit at the ¥10.0 billion level.

Financial Targets

Non-Financial Targets
FY2025 plan

Net Sales¥360.0 billion

Net Profit before Income Taxes¥16.0 billion

Net Profit Attributable to Owners of Parent¥11.0 billion

Fibers,Textiles, andGarments
Business

 e moved ahead with the creation of synergies with STX Co., Ltd. and bolstered our collective strength in the Fibers, Textiles, and Garments
W
Business by virtue of our BLUE CHAINTM concept (a new concept for all aspects of our sustainability) and the expansion of our global supply
chain management.

Chemicals
Business e accelerated our transformation to a business model based on business investments by strengthening our supply chain, making additions toW
our line of new products, reinforcing and promoting business investments and new product development, and expanding our business scale bystrengthening subsidiaries and engaging in M&As.

ROA (Net Profit*2 Basis)

7% or more

ROE (Net Profit*2 Basis)

12% or more

MachineryBusiness e proceeded with the development of markets in the four regions of Mexico and Central and South America, the Middle East and Africa, Southeast
W
Asia, and Europe, as well as India. Moreover, in light of geopolitical and country risks, such as COVID-19 and the conflict between Russia and Ukraine,
we dedicated our efforts to the automobile and automobile-related businesses and focused on our business in Europe and Central America.

ROIC*3

Approx. 10% • Expansion of business revenue• Risk management¥20.0 billion

11.0
280.0

8.5

7.2

CHORI CO., LTD.

A company that contributes tothe well-being of each stakeholder
and provides employees with arewarding and enjoyable
workplace environment.

14.0

329.4

7.8

11

Net Profit before
Income Taxes

12.4

356.5

¥400.0 billion

Net Sales

16.0(Billions of yen)

Ongoing challenges

VISION2030:
The Company We
Aspire to Be

Well-Being(Billions of yen)

Net sales (target)
Net sales (result)
Ordinary profit (target)
Ordinary profit (result)

ROE(Net Profit Basis)

A company that can coexist inharmony with society andcontribute to the realization ofits sustainable andprosperous future.

For more details on our basic strategies, please refer to pages 13 to 14.

In April 2023, we established Chori Innovation Plan 2025, our new medium-term management plan covering the three-year
period from fiscal 2023 to fiscal 2025. Chori Innovation Plan 2025 is a continuation of the Chori Innovation Plan, which we beganpromoting in fiscal 2017, and is the final stage of our commitment to achieving VISION2030. The Chori Group will strive tofurther increase corporate value based on its basic policy of becoming a corporate group that continues to evolve and change
on a global scale, underpinned by its outstanding capabilities and expertise.

ROA(Ordinary Profit Basis)

Sustainability• Sustainability response• Management structure suited to the new stage (human capital and DX)*2 Net profit attributable to owners of parent*3 R
 OIC (return on invested capital) = Operating profit after income taxes /(Equity + Interest-bearing debt)• Expand our line of environment-friendly SDG-oriented products• Increase the percentage of women among career-track hires
and employees who have transferred to career-track positions
to over 30%• Increase the percentage of male employees taking childcareleave• Increase the percentage of women in management positions• Continue to acquire certification as an outstanding organization
under the Ministry of Economy, Trade and Industry’s CertifiedHealth & Productivity Management Outstanding Organizations
Recognition Program• Invest approximately ¥5.0 billion in DX measures, including
the adoption of SAP software

Tsumugu Report 2023

12

Overview of Chori

The Basic Strategies ofChori Innovation Plan 2025
Promote ESG Management

Chori will press ahead with the following three basic strategies in its bid to become a corporate group that continues to evolveon a global scale, underpinned by its exceptional capabilities and expertise, while addressing the drastically changing social
environment.

Climate Change
We are proceeding with a variety of measures based on the TCFD recommendations to ensure that the Chori Group
becomes carbon neutral by 2050.

Promote Consolidated Management Centered on Our Global Business

Category

Chori will strengthen the operating bases of its major overseas business sites by implementing its mission-critical system and enhancing
its overseas workforce while enhancing the profitability of its overseas operations. In addition, by reviewing and refining our businessportfolio and promoting integrated operations as a specialized company through the leveraging of Group synergy, we will strive todevelop next-generation products and expand our line of existing products.

Specialized committees to study and promote specific measures tobe takenStrategy

Analyzed under 2°C and 4°C scenarios

Brush up scenario analysis, including 1.5°C scenario

RiskManagement

Organized risks related to climate change

Promote and strengthen establishment throughout the GroupFY2020 emissions: 1,705 (t-CO2) (Scope 1, 2, 3 (Category 6:
Business travel, 7: Employee commuting)). Small amount ofemissions. Ongoing regular inspections

Continue calculation and disclosure of Scope 1, 2, and 3 results,
aiming for carbon neutrality by 2050

Indexes andTargets

Human capital investment andredeployment&

New Initiatives in CIP2025

Regularly reported and discussed at Board of Directors’ meetings

GovernanceE

Results of CIP2022

More Environmentally Friendly Products
Expand sales of environment-friendly SDGs products such as ECO BLUETM, a recycled polyester fiber made from usedplastic bottles, and biodegradable resin, etc. Aim for sales of ¥50.0 billion in FY2025 (2.5 times the FY2022 level)

Development of next-generation products
Expansion of existing products

Human Resource Development
Ensure well-being = Be company that provides employees with a rewarding and enjoyable workplace environment

Develop Sustainable Businesses That Adapt Quickly
to the Changing Business EnvironmentS

We will respond to the drastic changes in this era of volatility, uncertainty, complexity, and ambiguity by taking a bird’s-eye view ofbusiness risks and opportunities, diversifying our global supply chain, and actively undertaking business investments, new development
projects, and M&As in growth sectors and regions.

Diversification of Global Supply Chains

Pandemics

Extreme weather

Conflicts

Develop suppliers to meet diversifying customer needs
Turn changes in the global supply–demand balance into
opportunitiesG rowth areas: environment, health and comfort,G
globalMarket entry
Complement strengthened areas with business
investment and M&A

Achieving work that is rewarding

Diversity & inclusion

Effective two-way communication

Enhancement of recruiting capabilities

Creation of a better working environment

Strengthening of Governance
The Company is working to strengthen its governance system by enforcing an array of corporate governance,compliance, and risk management measures.

+Others
North America &South andCentral America“Nurture people, and develop with them.”

Respect for Human Rights
In addition to conducting CSR-based procurement surveys on a regular basis, we are strengthening our initiatives
with ESG-conscious companies with the aim of realizing a sustainable supply chain.

EuropeAsia &
Middle East

2 Boost engagement

3 Promotion of health and productivity management

 roactive Business Investment in Growths
P
Areas and Regions

Greater
China

1 Invest in human capital

Corporate GovernanceCompliance

Risk Management

Strengthening governance through theGovernance Committee

Focus on reinforcing corporate ethics andzero compliance violations

Strengthening risk management
capabilities

Awareness of cost of capital andstock priceContinuing to develop internal­ histleblower system and conductingwinternal training sessions and surveys

Systematizing and managing risks andstrengthening of risk sensitivity

Enhanced dialogue with shareholders andinvestors to improve PBRStrengthening product safety and quality
assurance systems

Strengthening response to emerging
market risks and geopolitical risks

Business and Management Transformation through DX
For more details, please refer to pages 15 to 16.

13

CHORI CO., LTD.

Tsumugu Report 2023

14

Overview of Chori

CARAT: A Companywide Business Transformation Project
Based on the Renewal of Our Mission-Critical System
In April 2022, Chori launched its Companywide business transformation project Chori Accelerate Renovation Achievement
Transformation (CARAT). Through this project, we aim to deploy our digital functions across the entire Group, streamline andstandardize business operations, strengthen business management using data, and improve productivity while exploring thepossibility of retraining our workforce and restructuring our organization.

Chori’s Digital Management
In accordance with the basic policy of Chori Innovation Plan
2025, Chori will become “a corporate group that continues to
evolve and change on a global scale, underpinned by its
exceptional capabilities and expertise.” Along with the threebasic strategies we have established in order to realize thisPromotion Structure
The project is conducted under the direction of the Company’s
president, CEO & COO, who assumes the role of the project
leader, with the overall policy formulated mainly by members
selected from each department and Chori’s new businessCompanywide Business Transformation Project Leader

basic policy, we are promoting “business and managementtransformation through DX.” The Company plans to invest
approximately ¥5.0 billion into its DX activities over the courseof Chori Innovation Plan 2025.

President, CEO & COO

General Manager of
Textile Division

General Manager ofChemicals Division

SAP introduction project CARAT launched in April 2022 (full-scale operation from fiscal 2025)

Textile BusinessTransformation Team

Chori Accelerate Renovation Achievement Transformation

Chemicals BusinessTransformation TeamManagement
Transformation Team

Digital Transformation(DX) Leader
Department Manager ofInformation System Department

ComplianceTransformation Team
Application Team

Introduction of SAP & creation of DX management structure

Utilization of SAP & improvement of corporate value

Defensive DX

Offensive DX

Business transformation and standardization

Realization of flexible management resistant to change

Data-driven management and establishment ofa platform for the use of data

Strengthening of sales competitiveness through useof dataDX human resource development and diversity

Business model reform

Infrastructure andTransition Team

Business Standardization Consultant

Development of Digital Experts
Chori will secure and develop the business unit personnel and systems personnel necessary to promote DX.
• Business unit personnel are well-versed in the Company’s business activities and understand the role of digital technology. They are
responsible for securing the human resources who will spearhead DX in each business segment and implementing DX throughout
the organization.
• Systems personnel are well-versed in digital technology and the use of data. They are capable of designing and developing a
Companywide platform for data use.

Goals

Our Companywide business transformation project was
launched in April 2022 with the intention of completely rebuilding
Chori as an organization. The project was named “CARAT” toliken Chori, which consists of the Fibers, Textiles, andGarments, Chemicals, and Machinery businesses, to a diamondwith several facets and incorporate the meaning that theCompany will continue to refine its attractiveness and shineeven more brightly in the future. We aim to develop a nextgeneration mission-critical system (SAP S/4HANA Cloud ERP)

We aim to launch full-scale operations of our new mission-critical system in April 2025.
FY2022

FY2023Business design

Implementation

Overseastransactions

that facilitates our business and management transformation bystandardizing and then automating and visualizing operations
and further restructuring our operations and organization.
By deploying DX functions across the entire Group,
streamlining and standardizing business operations, enhancing
business management, and improving productivity, we aim tobuild a foundation that will enable us to continue to achievesustainable growth.

Timeline for Implementation of New Mission-Critical System

CHORI CO., LTD.

Job Transformation (JX) Officer
Department Manager ofCorporate Management
Department

Post-CIP2025

Project Outline

15

Subleader
Deputy General Manager of Corporate Planning Division (Human Resources &General Affairs Department and Information System Department)

Secretariat

CARAT (Company-wide business transformation project)

Project
preparation

General Manager ofCorporate Planning Division

Human Resource
Transformation (HRX) Leader
Department Manager of
Human Resources & General
Affairs Department

Promotion of DX strategy: defensive and offensive perspectives

CIP2025

model created through the participation of all employees.
Discussions are held between project members and at eachbusiness site to create a framework that will serve as thefoundation for Chori’s further growth.

FY2024
Testing

Domestictransactions

Standardize and streamline
data entry work

SAP
S/4HANA

Management
accounting

Inventory
management

Financialaccounting

Strengthen business
management using data

1

Establish a platform for data use, realize strategic
management, and strengthen sales competitiveness toachieve increases in corporate value

Implement a management dashboard and make quick and accurate management
decisions through the use of data

2

Enhance productivity of administrative duties bystandardizing, automating, and consolidating operations
and transition to a more sophisticated human resource
and organizational structure

Reduce the workload of data entry and other tasks and transition to a moresophisticated and strategic operational system for data analysis and other duties

3Standardize and automate business operations across theGroup to mitigate internal control risks and ensurecompliance

Ensure compliance by strengthening system controls and reduce the workload ofinternal control audits

4

Promote new workstyles, such as remote work andpaperless operations

Enhance productivity and quality of remote work through digitalization andimproved workflow

FY2025Full-scale
operations

Creditmanagement

Tsumugu Report 2023

16

Overview of Chori

Chori’s Strengths
Stemming from Its Commitment
to Making a Variety of Dreams Come True

Diverse product lineup
centered on emerging markets

Chori has been aggressively expanding its business in emerging countries since the prewar period through efforts
including the export of rayon yarn to China, India, and Mexico since the 1930s. Since then, the Company has expanded
its global network to Southeast Asia, Europe, the United States, the Middle East, and other parts of the world,

UniqueGlobal Network

and its overseas transactions now account for roughly 70% of its total net sales.

Diverse product lineup
centered on emerging markets
Page 18

Overseas:
Procurement
Capabilities

Network

30 business sites*1

Consolidated employees:

1,285

*2
*1 As of June 2023
*2 As of March 2023

Ability to Develop a

History

Global Supply Chain

Solid business foundation

Market development
capabilities as demonstrated

built over the course of
our history

Pages 19–20

Human
Resources
by our highly specialized personnel

Responsiveness(Promptness)

Pages 21–22

Handling of Products with High Import Barriers
Since the establishment of its first overseas subsidiary, Chori has developed a variety of product procurement routes centered on emerging
markets through its more than 60 years of doing business outside of Japan. We have expanded the scale of our business by leveraging this productprocurement route, and our years of doing business worldwide have allowed us to also handle an array of products with high import barriers.

Lithium Salt
Securing access to lithium salt is believed
to be difficult in the producing nations ofChile and China.

17

CHORI CO., LTD.

Examples of
Products Handledby Chori

Pharmaceutical Ingredients /Food Additives
Ensuring the stable procurement ofquality raw materials in India andChina is essential to the production ofpharmaceutical ingredients and foodadditives.

Tsumugu Report 2023

18

2004–

Overview of Chori

Chori’s Strengths

Solid business foundation
built over the course of our history

1861 Founded in the Nishijin District of Kyoto, Japan

1975–
2003

Chori was founded as a raw silk wholesaler during a turbulent time when Japan wastransitioning from the Edo Period to the Meiji Era. Moreover, the name “Chori”
originates from the combination of the Japanese characters “ ” (cho), derived fromthe image of a moth creating raw silk, and “ ” (ri), stemming from the first name ofChori’s first president, Riichiro Ohashi.

A Period of

Breakthrough Results
Four Consecutive Years of Record-High Ordinary Profit

1948–
1975

A Period of

Setbacks

Selection and Concentration ofwith drastic stream­lining anddownsizing of management

A Period ofGrowthHandling of Synthetic Resin, Chemical Products, andVarious Types of Machinery
1929	Establishes branch office inFukui Prefecture

1934	Establishes branch office in
Ishikawa Prefecture1948	CHORI CO., LTD.
established1952	Moves head office to Osaka

Our Connection with the Hokuriku Region,
the World’s Largest Textile-Producing Region 
Chori has been working together with the Hokuriku region of Japan, oneof the world’s largest producing regions for textiles, for more than 90
years. Over the years since establishing the Hokuriku Branch in the earlydays of the Showa Period, we have sold synthetic yarn to companies in
the region and developed fabrics together that are marketed in both
Japan and overseas.
This diverse network we have developed with business partners in the
Hokuriku region has become the foundation of the supply chain of theFibers, Textiles, and Garments Business, which handles a wide range ofhigh-performance, high-quality materials.

1953	Commences exclusive salesof woolly nylon through theestablishment of a joint
venture for the manufactureof woolly nylon with Toyo
Rayon Co., Ltd. (currently
Toray Industries, Inc.)

1956	Launches the Chemicals
Business

1957	Establishes Chori New YorkCo., Ltd. (currently CHORIAMERICA, INC.), Chori’s
first overseas subsidiary1976	Establishes Fukui Chori

Committee and Kanazawa
Chori Committee (currently
Hokuriku Chori Committee)
with twisted yarn
manufacturers and otherbusiness partners in the
Hokuriku region

1987	Establishes subsidiary1959	Stock listed on Osaka
Securities Exchange

1961	Stock listed on Tokyo Stock
Exchange	Designated as one of thefirst friendly trading
companies by China

1963	Establishes subsidiary ChoriGmbH (currently Chori
Europe GmbH)1972	Develops a large-scalecondominium

1973	Establishes subsidiary

CHORI SINGAPORE PTE
LTD1974	Establishes subsidiary THAICHORI CO., LTD.

CHORI CO., (HONG KONG)
LTD.

1989	Establishes subsidiary

CHORI TRADING(MALAYSIA) SDN. BHD.

1993	Establishes CHORI(SHANGHAI) CO., LTD. as
first subsidiary in China

subsidiary of Toray
Industries, Inc.

	Establishes subsidiaries
CHORI (TIANJIN) CO., LTD.
and CHORI (DALIAN)
TRADING CO., LTD.

2005	Establishes CHORI (CHINA)

Businesses Due to Significant Losses
Begins company restruc­turing
1975	

2004 Becomes a consolidated

1995	Establishes PT. CHORIINDONESIA

1996	Secures order for railway
project in Kazakhstan

1997	Establishes joint venture
Chongqing Dazu
Red Butterfly Strontium
Industry Co., Ltd.

2001	Establishes Chori Middle
East FZE

2002	Spins off the Synthetic

Resin Business Division into
a separate company

2003	Launches the Reborn

Management Plan andundergoes sweeping
structural reforms

	Holds Textiles Exhibition(currently CHORI Exhibition)CO., LTD., the firstJapanese trading company
subsidiary with the rights tosell and trade in China

2010	Establishes a representative
office in Dhaka, Bangladesh

2012	Establishes subsidiary

CHORI KOREA CO., LTD.

2016	Holds first annual Hokuriku
Yarn Fair	Establishes subsidiary
CHORI VIETNAM CO., LTD.
Participates in lithium compound2017	
production project in Chile	Splits off the Machinery
Business and establishes
Chori Machinery Co., Ltd.
	
Makes ASADA U CO., LTD., asales company of automotive
interior and packaging materials, a consolidated subsidiary	Establishes subsidiary
CHORI COMERCIAL DE
MEXICO, S.A. DE C.V.

2013	Makes PTI Japan Limited

2018	Makes KOZAKURA SHOKAI2014	Relocates Tokyo head office	Establishes subsidiary TAIWANCHORI MERCHANDISE
COOPERATION LTD.

(currently CHORI GLEX CO.,LTD.), a trading company
specializing in chemicals, a
consolidated subsidiary
to Shinagawa

CO., LTD., a trading company
specializing in chemicals, a
consolidated subsidiary

Establishes subsidiary
CHORI TRADING INDIA
PRIVATE LIMITED2015	Makes Miyako Kagaku Co.,
Ltd., a trading company
specializing in chemicals, a
consolidated subsidiary

Establishes joint project with2019	

Utsumi Recycle Systems Inc.
for the sale of recycled pellets

Makes STX Co., Ltd., a trading
2021	

company specializing in textiles,
a consolidated subsidiary2022	Launches Companywide
business transformation
project CARATOur Commitment to Niche Markets 
In the 1970s, Chori expanded its lifestyle-related business and bolstered its
business results. However, the Company began selecting and concentratingon certain businesses as a result of incurring significant losses in thefinance and real estate segments of its operations. The organizational
system was restructured, leading to the establishment of the Fibers,
Textiles, and Garments Business; the Chemicals Business; and theMachinery Business as our core business segments and of our strategy
of focusing on the handling of highly profitable products. As a result, ROA(ordinary profit basis) has grown to 9.0% (as of March 31, 2023). Chorihas been expanding its business in niche markets where it can utilize its
knowledge and expertise to the fullest, rather than in products with fiercelycompetitive prices and overwhelming competition.

Our Supply Chain in China 
In 1961, prior to the normalization of Japan–China diplomatic relations, Chori
became one of the first to be designated as a friendly trading company by
China, which paved the way for the launch of its China business ahead of thecompetition. Meanwhile, in 2005 we established the first Japanese trading
company subsidiary with the rights to sell and trade in China, and currently, in
2023 we boast a network consisting of 14 business sites in Greater China.*
Chori has established a robust supply chain in China through theextensive ties it has developed with the country over the years. We continue
to expand our operations in the country as a hub for the production,
procurement, and domestic sales activities of the Fibers, Textiles, andGarments Business as well as for exports to third-party markets in theChemicals and Machinery businesses.
* Consisting of China, Taiwan, and Hong Kong

19

CHORI CO., LTD.

Tsumugu Report 2023

20

Overview of Chori

Chori’s Strengths

Market development capabilities

as demonstrated by our highly specialized personnel
At Chori, our employees engage in the same line of business for many years and therefore boast a wealth ofexpert knowledge in everything from product quality and manufacturing know-how to the technological capabilities ofour suppliers. Drawing on their expertise, these employees are contributing to the creation of major markets forour products in the Fibers, Textiles, and Garments, Chemicals, and Machinery businesses. In this section, we will discuss thestrengths of the fine chemicals field, which played a major role in the success of the Chemicals Division in fiscal 2022.

2

Strengths of the Fine Chemicals Department: Leveraging the Ability to Provide
Meticulous Responses toward Becoming the Company of Choice for Customers

The Fine Chemicals Department caters to a wide range ofcustomer needs by not only drawing on Chori’s long-cultivatedoverseas network but also developing an outsourcing business
in which products that are difficult to manufacture in Japan are
outsourced to overseas manufacturers. Our ability to address
the needs of customers for niche products and specific quality
requirements, in particular, has led to the creation of added
value and the development of new markets. Such meticulous
responses require a high level of expertise in the chemicals
field. For that reason, we conduct internal and external

3

Create new markets throughChori’s ability toinnovate as a trading company

Mumbai, India

Hiromasa Kondo
President of CHORI TRADING INDIA PRIVATE LIMITED

1

After joining the Company in 2010, Mr. Kondo was assigned to
the Chemicals and Machinery Logistics Department in 2011. In
2013, he was reassigned to the Fine Chemicals Department,
and in April 2021 he was appointed as the temporary presidentof CHORI TRADING INDIA PRIVATE LIMITED in India, where hehas been stationed since April 2023. The Fine Chemicals
Department handles a wide range of products from pharmaceuticaland agrochemical ingredients and intermediates to raw materials
for dyes, resins, and semiconductors, spanning 200 to 300
items in the Indian market alone.

Chori’s Long-Cherished Strengths

It has been 10 years since I was assigned to the Fine Chemicals Department. The strength of the Fine Chemicals Department is theclose relationships it has built with its customers, and the department has worked to develop new markets by leveraging Chori’s
meticulousness in making proposals, which has been passed on as part of the Company’s DNA from generation to generation. This
meticulousness means our ability to identify the suppliers that meet the niche needs of our customers and provide customers with theappropriate information on these suppliers. For example, when we find multiple suppliers that meet customer needs, we provide suchinformation as differences in quality and price and the risks faced by each supplier. When we are unable to find a suitable supplier, we
will propose that the manufacturing be outsourced by drawing on Chori’s network of outsourcing partners. The most rewarding partof my job is seeing the smiles on the faces of our customers when, after three to five years, their new product has been completedusing the raw materials we have procured from scratch. Although the products they handle are different, whether it be textiles,
chemicals, or machinery, our sales representatives’ meticulous responses to customer needs have, I believe, spurred the expansionof these businesses and the growth of Chori as a whole.

21

CHORI CO., LTD.

4seminars, provide chemistry textbooks, and hold on-the-job
training led by senior staff in order to build a foundationthat allows even sales representatives with non-science­backgrounds to engage in discussions on an equal footingwith customers. Another strength of Chori’s Fine Chemicals
Department is its highly reliable support system that includes
the Pharmacovigilance & Quality Assurance Office, which isstaffed by pharmacists, the Business Administration Department(Chemicals), which assists in legal proceedings, and an analysis
center in Suzhou, China.

Expansion of Our Business in India, aHighly Promising Country with Distinctive Advantages

Along with Japan, South Korea, and China, India is one of the few countries in Asia whereorganic synthesis can be performed. The country has cemented its position as a finechemical producing nation through its role as a supplier while doing business with­manufacturers in Europe and the United States. In addition to the impact of population
growth and the expansion of the middle class, the Indian market will likely continue togrow due to the current national policy to expand the proportion of its overall economy
accounted for by the manufacturing industry from the current 18% to 25%. India’s governmentis also taking measures to develop its electronics and semiconductor industries, whichhave lagged behind other countries, and has provided significant incentives to promote thelocal production of products that are largely imported from overseas, which is expected toincrease the line of products handled by the Fine Chemicals Department.

Honing of Our Strengths in Pursuit of Our Customers’ Dreams

In order to continue to reinforce Chori’s strengths going
forward, we must incorporate more digital tools into our
information sharing. By integrating the knowledge that has
been accumulated by each individual in our departments into asingle system using digital tools, the knowledge of the entire
department can be outputted to customers as if it was theirown. We have high hopes for the impact that our adoption of
SAP, which we are promoting under CARAT, will have, particularlyon the Fine Chemicals Department due to the large number of
products it handles.
Moreover, the development of our market-in approachbeing promoted by the Chemicals Division is also a matter ofimportance. Although CHORI TRADING INDIA’s product sales
are currently based mainly on the product-out approach, wewill identify the needs of our customers in India and propose

and sell products that reflect their needs by seeking them fromaround the world. Having been assigned to and lived in India,
I can sense how much the people in this country value theirethnic background, that there is a culture of being kind to thosein need, and that they have a positive outlook on everything. For
those reasons, I would like to build a business that contributes
to the mutual growth of India and Japan. To this end, I will
ensure that I am fully aware of my role as a leader and that
we respond even more meticulously to customer needs andstrengthen our ability to develop new markets while continuing
to expand the scale of CHORI TRADING INDIA, which is still
relatively small in scale. In so doing, we aim to pass on a
successful business to our younger generation of employees
who will shape the future of our company.

Tsumugu Report 2023

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