Itoham Yonekyu Holdings Inc.
1-6-21 Mita, Meguro-ku, Tokyo
URL: https://www.itoham-yonekyu-holdings.com/english/

I toham Yonekyu Gr oup

IN T E G R A T E D R E P O R T

2022

Products you love in your everyday life
Itoham and Yonekyu had been providing delicious, high-quality products
through clever inventiveness in response to customer expectations,

To our stakeholders

based on “contributing to society through business” and “creating excitement”—their respective founding spirits.

The Itoham Yonekyu Group has issued this Integrated Report 2022 as a tool for

Having merged operations in 2016, the Itoham Yonekyu Group will continuecommunicating with all of our stakeholders.

delivering beloved products to our customers, while creating various

Through this report, we explain our Group’s initiatives aimed at offering value to society

synergistic effects through the integration.

and continuously improving corporate value in simple terms to all of our stakeholders.

Isao Miyashita
Introduction

President and Chief Executive Officer
Itoham Yonekyu Holdings Inc.

Vision and Strategy

Contents

Introduction

1
2
3
5

Group Principle and Vision
Editorial Policy
The History of Itoham Yonekyu Holdings
Financial and Non-Financial Highlights

Group Philosophy and Vision

VisionA leading food company that continuously
evolves with its employees by embracing the spiritof fairness and the challenge to progressions.

• Build and expand trust by making good on promises• Capacity development through broad-minded communicationand mutual understanding

Itoham Yonekyu Group Integrated Report 2022

Interview of Employees in Charge of ProductDevelopment
For the “Pursuit of uncompromising flavor and high quality”

22		

25		
27
31
35

Initiatives in Materiality

44
45This integrated report was created to allow
shareholders, investors, and all otherstakeholders to get a better understanding of thehistory of both Itoham and Yonekyu and the
Itoham Yonekyu Group’s medium- to long-termvalue creation process.

Scope
Period Covered
This report covers initiatives during FY2021 (April 1,
2021 to March 31, 2022) and includes some
initiatives beyond and outside this period, as well.
Entities Covered
Itoham Yonekyu Group*S
 cope of personnel and environmental data arelisted separately.

Reference Guidelines

Basic Stance on Sustainability

The International <IR> Framework from the IIRC
The Environmental Reporting Guidelines 2018from the Ministry of the Environment
Sustainability Reporting Standards from GRI

Environmental Initiatives

Disclaimer

Social Initiatives
Governance

Financial and Corporate Data

• Honest and transparent actions with top priority on compliance• Business actions with awareness to global environment

1

15 Business Overview
19		Special Article 2:

Basis for Growth• Supply products and services of high value by pursuing safety,
security and quality

Action Guidelines

Discussion among General Managers ofMeat Business Division
To "Promote sustainable procurement and stable supply"

Editorial Policy

Financial and Corporate Data

Group
Philosophy

Contribute to the realization of soundand affluent society through business.

7 Message from the President
9 Value Creation Process
Special Article 1:
11	Basis for Growth

Vision and Strategy

The perspectives on future strategy and results
listed in this integrated report are based on
currently available information and include someuncertain factors. Please be aware that it ispossible for actual results to differ greatly due toa variety of causes.

Financial Data
Corporate Data

2

Introduction

The History of Itoham Yonekyu Holdings

2016

We have continuously developed “First in the industry.”

B The history of Itoham

R The history of Yonekyu

Ito Foods Industry was reconstructed in
Nada Ward of Kobe, Hyogo.

Founding of Itoham
Denzo Ito founded Ito Food
Processing in Osaka by himself.
At age 19, he founded thecompany believing that
consuming not only fish but alsomeat would lead to richer dietsand healthier lives for people.
There was also a period when his
business could not continue dueto the economic disruptions in theearly Showa period and to the
Pacific War.

1948

Ito Nutrition Food Industry Inc. wasestablished.

1959

The Meguro Plant was built in Meguro
Ward, Tokyo, expanding its business toTokyo area.

1960

The Nishinomiya Plant was built inNishinomiya, Hyogo.

The Start of Japanese-styleWestern Food

Western technology and culture wereincorporated into every field at the beginning of
the Showa period. Curry, Japanese riceomelette, and other Japanese-style western
foods gained in popularity.

Improvements in the Quality of
Eating Habits

Eating habits greatly improved through foodsupply aid from the United States and theestablishment of a school lunch system following
the World War II. Bread came to be an important
staple for Japanese people.

Standard forpeople in the
Kansai region

The Cellophane Wiener(currently Pole Wiener) was
launched.

History of Products

Cellophane scraps were reused as tubeshaped casings. The casings were stuffedwith processed sausage made mainly frompork, and brand new product was born,with each one weighing 37.5g.

1958

A technology to use mutton as an ingredientin ham and sausage was developed.
Mutton, which at the time had been criticized for being
pungent and inedible, was imported from New Zealand.
Inexpensive and delicious pressed ham was developed thanks
to deodorization through unique technology and cleaning.
With this development, ham became widespread assomething that anyone could easily eat.

3

Itoham Yonekyu Group Integrated Report 2022

Kiyokazu Shoji founded
Yonekyu Foods in Shizuoka byhimself.
He trained himself while working at
Yonekyu Co., a famous meat
wholesaler that had built thefoundations of modern meat sales.
One year after the Tokyo Olympics,
he became independent with the
goodwill of Yonekyu.

1967

The company was listed on
the First Section of theTokyo and Osaka Securities
Exchanges.

1981

The industry’s first factory
dedicated to dry-cured ham,
Gotemba Factory, was built.

1960s-

Westernization of Eating Habits

Together with long-term economic growth,supermarkets have emerged. Refrigerated
warehouses became commonplace, andeating habits were quickly Westernized.

1972

Long-selling
product

Smoke ham was made by smoking pork
ham meat which is cut into three pieces.
Daruma Smoke Ham, named for its
resemblance to Japanese daruma dolls,
became a best-selling product.

Handmade Bayern Wieners
were launched.

2017

2013

2019

Mitsubishi Corporation, Itoham Foods
Inc., and Yonekyu Corporation enteredinto a comprehensive business contract.

Itohamrepresentative
product

As the Westernization of diet continues, andthe value of “food” changes, Handmade
Bayern Wieners were launched to take in the
demand for authentic food. Continuously
improved up to the present day, this Itoham
flagship product continues to be loved.

Additional shares of Anzco Foods Japan Ltd.
were acquired and it becomes a wholly-owned
subsidiary.

Kyushu Extract Limited wasfounded as a joint venture with
Mitsubishi Corporation Life
Sciences Limited, producing
meat extracts and seasoning
products.

The Toride Plant
was built in Toride,
Ibaraki, introducing
cutting-edge
equipment for thattime.
Yonekyu entered into acomprehensive partnershipagreement with the city of
Kobe for collaboration andcooperation across a wide
range of areas.

Shares of Meiji Kenko Ham
Co., Ltd. were acquired and it
became a wholly-owned
subsidiary.

1990s-

2020s-

Changes in Lifestyles

To a Post- COVID-19 Era

Following the social progress of women and other changes in lifestyles,
the need for individual meals and small quantity products have increased.
At the same time, interest in safety and security, and a trend towards
health has also grown considerably.

1988

Smallest in
the world at
the time

Pork Bits were launched.

Smoke Ham and Daruma
Smoke Ham were launched.

1985

2009

2020

The Marude Oniku! series was launched.

As a result of marketing research, it became
clear that there were many consumers who
desired ease of cooking. Pork Bits, theworld’s smallest wieners that could becooked easily and could be used as
ingredients in any dish, were developed.

1990

There was an increase in eating meals at home due to the spread of
COVID-19. Demand for cook-at-home food, including frozen cooked
foods, bentos, and prepared meals, increased. Also, the need forenvironmentally-friendly products is increasing.

Yonekyuflagshipproduct

Gotemba Kogen Arabiki Pork was launched.
Gotemba Kogen Arabiki Pork was launchedwith the aim of developing coarsely-groundwieners as a new flagship product for
Yonekyu, as this type of sausage wasrecognized for its flavor. This product wasnamed for its high-class feel and, more thananything else, for its associations with Mt. Fuji.

Financial and Corporate Data

1934

1940s-

Founding of
Yonekyu

The Medium-termManagement Plan 2023 wasestablished.

Basis for Growth

1920s-

1965

A new R&D building
was established at
its head office.

On April 1, 2016, Itoham and Yonekyu
integrated their operations, and a new company
Itoham Yonekyu Holdings Inc. was born.

2021

Vision and Strategy

History of the Companies

1928

1946

2000

Birth of a new company due to integration

Introduction

G The history of the Group since the establishment of
Itoham Yonekyu Holdings

Itoham Yonekyu Holdings Inc.
was established.

Soy-meat products, the Marude Oniku! that
reproduce the textures, flavors, and aromas ofmeat, was launched. A wide variety of products
have been developed, resembling deep-friedmeat cutlets, fried chicken, and more.

アタリ

2022

Switching to environmentally-friendly
packaging.
In order to reduce amount of plastic used andenvironmental burden, and to contribute topreservation of global environment, we have begun toswitch over to environmentally-friendly packaging likethe drawstring bag for “The GRAND Alt Bayern,” oneof our primary brands, and other products.

4

*1• The ratio of women in management positions, percentage of employees taking childcare leave, and percentage of employees returning from childcare leave are joint calculations

Financial and Non-Financial Highlights

Introduction

by Itoham and Yonekyu.

• Companies required to report this information based on laws related to the advancement of the employment of people with disabilities: Itoham, Yonekyu, Itoham Daily, Itoham*2

West Foods, Itoham Food Solutions, Itoham Sales, Tsukushi Factory, Royal Delica, Itoham Business Support, IH Logistics Services, Yonekyu Kagayaki, Yonekyu Delica Foods,
Itoham Meat Sales East, Itoham Meat Sales West, Sankyo Meat, IH Meat Solutions, IH Meat Packer, Yonekyu Oishiitori, Ai Pork, and the Eastern Hiroshima Prefecture Swinery
Cooperative• Itoham Yonekyu Holdings subsidiary companies are included in the calculation (includes 100% of emissions and usage amount of subsidiaries in calculation)• The calculation only included main domestic subsidiary companies until previous fiscal year. Starting from FY2021, the calculation range has been enlarged to include foreignsubsidiaries as well.

Financial Highlights

Non-Financial Highlights
Operating Income

Profit Attributable to Shareholders

854.3 billion¥

24.6 billion¥

Ratio of Operating Income to Net Sales

Ratio of Net Income to Net Sales

2.9%

2.2%

¥

■ Operating Income(¥ billion)(¥ billion)

1,000

30.0

800

831.8

850.7 852.4 842.6

854.3

19.1 billion

2.9

2.6

0

2.0

(¥ billion)

(%)

(%)

3

20.0

3

6

15.0

2

1.7

2019

2018

2020

2021

(FY)

0

2017

24.6

24.0

21.5
14.4

2017

1.9

2018

2019

2021 (FY)

2020

1.3

20.2

15.7

1

17.2

2
1.2
10.5

5.0

0

0

1

11.4

2018

2019

2020

2021

Return on Assets (ROA)

Dividends Per Share

Consolidated Payout Ratio

7.5%

7.1%

¥

23.0

35.2%

(FY)

0

Consolidated Payout Ratio
(%)

10

25

50

8.5
7.3

6.9

2
0

2017

2018

6.3

20

2021

30.6

40

35.2

15

6.6

30

10

2020

43.9

31.9

7.1

5.0
4.7

2019

47.5

(FY)

17.0

17.0

17.0

21.0

23.0

20

5

10

0

0

2017

2018

2019

2020

2021

(FY)

*Income before interest expense and after tax (Interest-bearing debt + Equity capital)
Extraordinary income and loss exclude loss on disaster and insurance income.

Depreciation and Amortization of Goodwill

11.6 billion¥(¥ billion)(¥ billion)

25.0

20.0
15.0
12.6
9.8

10.0

11.5

11.6

10.0

(t-CO2)400,000

2019

2020

381,506

386,909

178,094

180,886

95.7

2.51

2.48

2.61

2.56

100

2021

0

(FY)

100

2017

2018

2019

2020

2021

97.5
1

0.0

1.7

2017

2018

7.4

7.3

2019

2020

12.0
2021

0

(FY)

579.5

578.6

Per Unit Produced

Energy Use

Per Unit Produced

543.8kg-CO /t

6,714,000 GJ

9.8 GJ/t

2■ Scope 1■ Scope 2

378,814370,878

169,726

165,020

160,605

547.1

557.3

543.8

200,000

100,000

203,412

206,023

203,076

213,794

210,273

2017

2018

2019

2020

2021

0

■ Energy Use

Per Unit(kg-CO2/t)

372,802

300,000

6,800

600

6,600

400

6,400

200

6,200

0

0

(FY)

17.6m /t3

■ Service Water Use(Thousand GJ)

800

Per Unit Produced
3(FY)(m3/t)

13,00030

Per Unit(GJ/t)

11

9.9

10.0

9.9

6,719

2018

9.8

9.8

6,718

6,693

6,714

2019

2020

2021

10

9

6,513

2017

Waste Emissions

Per Unit Produced

69,011 t

101.2 kg/t
■ Waste Emissions

Per Unit(Thousand m3)

10.3

11.6

12.5

13.0

12.9

12,000

5.0

2017

2018

2019

19.1

12,556

5.0
0

2018

2.50

(FY)

0

Per unit(t)(kg/t)

70,000200

60,000

150

20.5

20.0
15.0

2017

11,996,000 m

12.9 billion

¥

3

2
100

20

Service Water Use

Capital Expenditures

(%)

100

Financial and Corporate Data

4.1
4.1

5.1

7.5

100

Basis for Growth■ Dividends Per Share

ROIC
(¥)

4

40

2

ROA

100

60

370,878t-CO

(%)

4.8

3.5

2

0

100

80

Greenhouse Gas Emissions(Converted to CO2)

6.6%

6.5
6.4

4

5.2

4.9

100

2.56%

97.5%

■ Environmental Data*2

Return on Invested Capital (ROIC*)

6

4.5

100

Employment Rate of People with
Disabilities

Percentage of Men Taking
Childcare Leave

Percentage of Women Taking
Childcare Leave

3

19.1

Return on Equity (ROE)

ROE

(%)

1
2017

Men

100 % 12.0 %
5.8

5

2.2

*The “Accounting Standard for Revenue Recognition” isapplied starting from the beginning of the consolidated
fiscal year 2021.

8

Women

■ Ratio of Returning to Work

(%)

2.4

200

5.8%

Percentage of
Employees Returningfrom Childcare Leave

Vision and Strategy

10.0

Percentage of Employees
Taking Childcare Leave

Ratio of Net Income to Net Sales

10.0
400

Ratio of Women in Management Positions■ Net Income Attributable to Owners of Parent

Ratio of Operating Income to Net Sales

2.9

20.0

600

■ Personnel Data*1

Introduction

Net Sales

2020

2021

(FY)

0

18.7

12,481

18.3
12,463

19.1

2018

2019

2020

2021

(FY)

0

2017

2018

2019

17.6

50,00012,95011,996

11,000

2017

20

2020

2021

(FY)

10

40,0000075.049,397

2017

83.1
55,584

2018

87.4

89.4

59,53960,774

2019

2020

101.2

100

69,011
50

2021

(FY)

0

*The data on waste emission does not include a portion of data from some foreignsubsidiaries from FY2017 to FY2020.

5

Itoham Yonekyu Group Integrated Report 2022

6

Vision andStrategy

Message from the President

We will vigorously expand our businessusing our tradition and creativity to contribute

Itoham Yonekyu Holdings Inc.
President and Chief Executive Officer

Q3 Can you tell us about your management’s
commitment to sustainability?

years have passed since the business merger.
Q1 SixHow do you see the company’s current situation
and what will the future initiative be like?

We are building a more competitive businessexecution system through reorganization andrevitalization of human resources.

7

Itoham Yonekyu Group Integrated Report 2022

Q2 Can you specifically describe the progress of
the Medium-term Management Plan 2023?

We will seek to further expand our business bystrengthening bases and actively launching new
businesses.
Our Medium-term Management Plan 2023 declares its action
guidelines as “Achieve further rapid growth and leap by defying
stereotypes and reaffirming our strengths.” Its major themes
are “Strengthening management base,” “Strengthening earning
base,” “Initiatives for new businesses and markets,” and“Initiatives for sustainability.”
Since the announcement of the Medium-term Management
Plan 2023, we have faced a challenging business environment
both in Japan and overseas due to the COVID-19 pandemic
with no end in sight, heightened geopolitical risks, andsignificant increases in raw material and energy costs.
Nevertheless, we have been making steady efforts in linewith the four themes. Under the policy of strengthening ourmanagement base, we are implementing reorganization andworking to enhance our digital strategies, as mentioned earlier.
Also, under the policy of strengthening our earnings base,
we are working to boost the meat production business by,

We believe that food companies must play extremely crucial
roles in realizing a sustainable society since food products
involve all kinds of environmental and social issues, such as
climate change, human rights, and animal welfare. This belief
motivated us to choose “initiatives for sustainability” as one of
the major themes of our Medium-term Management Plan 2023.
In FY2021, we not only prepared a system to promotesustainability but also outlined and publicized policies suchas human rights policy and procurement policy that form thefoundation of our sustainability initiatives. Furthermore, in May
2022, we set a target of halving our Group’s GHG emissions
by FY2030, compared to FY2016, and achieving net-zeroHighlights of the first year of theMedium-term Management Plan
2023
Under the Medium-term Management Plan 2023,
which started in 2021, we have implemented four
major themes based on the action guidelines,“Achieve further rapid growth and leap by defying
stereotypes and reaffirming our strengths.” InFY2021, the first year of the plan, we sought toincrease the added value of our business andreturn on invested capital (ROIC) by strengthening
our competitiveness. In addition, both operating
income and ordinary income exceeded the plan.

As part of our Medium-term Management Plan 2023, we aim
to increase dividend steadily with payout ratio of around 40%
as capital policy. We will continue to maximize our shareholder
value.
We are proud that the essence of our Group’s strength lies
in its brand backed by its long history and loved and trusted
by customers across Japan. It also consists of our employees’
stance, awareness, and sincerity toward manufacturing, which
has motivated them to continue supplying safe and reliable
products even during the COVID-19 pandemic. Furthermore,
we are convinced that the impetus for our growth comes fromour product development abilities to create unprecedented
items that adequately meet customer needs and our robust
value chain that covers production, processing, and delivery tocustomers.
Under the vision of “A leading food company that
continuously evolves with its employees by embracing the spiritof fairness and the challenge to progressions,” we will pursue
sustainable growth of our Group while contributing to achieving
a sound and affluent society.
Please look forward to the future of the Group.

+

FY2021

FY2021

FY2023Plan

Results DifferencePlan(¥ billion)(¥ billion)(¥ billion)(¥ billion)

Operating income

23.0

24.6

1.6

28.0

Processed food

11.0

11.0

0

14.5

Meat

13.5

14.8

1.3

15.5

Other

-1.5

-1.3

0.2

-2.0

Ordinary income

25.0

28.5

3.5

30.0

ROIC

6.0%

6.6%

0.6 points

6.8%

Processed food

―

8.2%

―

―

Meat

―

10.3%

―

―

Financial and Corporate Data

During these six years since Itoham Yonekyu Holdings wasestablished, Itoham and Yonekyu have been engaged infriendly competition leveraging each other’s strengths. As thebusiness environment surrounding our Group is changing
drastically, we realized that further growth of our Grouprequired unifying the two chains of command and considering
our strategies and allocation of management resources fromthe perspective of the total optimization of the entire Group.
Therefore, in FY2021, we began restructuring from theprevious Itoham and Yonekyu units to the strategic units. For
example, we merged the product procurement divisions andstrategy divisions of our meat business in October 2021 andthe strategy and headquarters functions of the processedfood business in April 2022. From now on, we will strategicallypromote the expansion of the existing businesses and thedevelopment of new businesses based on diverse productlineups that capitalize on the strengths of both brands.
At the same time, we will revitalize our human resources
by appropriately allocating our employees, regardless of theirprevious assignments, which will encourage our employees togrow. In addition, we are updating and integrating our central

information infrastructure system and enhancing our digitalstrategies. This helps standardize operations and streamline
logistics throughout the entire Group.

As a leading food company, we will contribute toachieving a sound and affluent society.

Basis for Growth

By fulfilling our social responsibility, we will increase
our Group’s value and promote its growth.

Q4 Finally, what is your message to stakeholders?

Vision and Strategy

Isao Miyashita

emissions by 2050. From FY2022 onward, we will focus ondeveloping and implementing plans to put our policies andgoals into action.
In addition, we recognize that environmental and social
issues can be a risk, but also business opportunity for ourbusiness. We will respond appropriately to risks and seize
business opportunities by accurately identifying them andreflecting them in our business strategies.
Introduction

to achieving a sound and affluent society.

for instanse, establishing a new farm for Yonekyu Oishii Tori
and expanding the facilities of Towada Meat Plant. In addition,
we will reorganize our plants to make them cost-competitive,
starting with Yonekyu’s Yume Plant, which has been shut
down. We will reconstruct it as a frozen food manufacturing
plant, for which its market is expanding.
Regarding our initiatives for new businesses and markets,
we believe there are business opportunities in the non-meatbusiness as its market has been expanding in recent years.
We also perceive opportunities in the healthcare business, as
it has a high affinity with our business in terms of effective useof by-product and application of our Group’s technologies.
For example, we are upgrading our existing lineup of nonmeat products while developing products that are more similar
to meat. In FY2021, we acquired, through our consolidated
subsidiary ANZCO, Moregate’s manufacturing and sales
business of animal-derived blood products, which are
expected to have substantial growth for vaccines, regenerative
medicine, and other applications. Moreover, in FY2022, we
opened the New Business Development Office in order to takeon the challenges of developing new businesses and markets
in cooperation with other business divisions.

8Vision andStrategy

The Itoham Yonekyu Group is utilizing the synergistic effect of its integration of operations, while
maximizing Itoham and Yonekyu’s respective brand strengths, such as “uncompromising pursuit”
for “flavor” and “high quality.”
We will create value for our Group and our stakeholders while contributing to achieving a soundand affluent society through business.

Value Creation Process
Co-creation with Stakeholders
Stakeholder engagement p.26

Input The source of value creation

Business Model Business activities that support value creation

Group Philosophy●(FSSC 22000, ISO 22000, and others)

Japan and overseas 56 in total
Environmental management

pr
De
live
rin
g

DeliverySales* According to QPRTM

exp

Procurement

C olla b o ra ti n g w it h p a rt n

Establishing 7 (important) materiality issues p.22

Corporate Governance p.35

Itoham Yonekyu Group Integrated Report 2022

c r e a ti n g
andSpecial Article 1:“Promoting sustainableprocurement and stablesupply”
p.11

6,693,964 GJ
12,950,000 m3

Sustainability p.25

Beef

Pork

Poultry

12 ％

16 ％

12 ％

Contributing to a sustainable global environment
Reduction of greenhouse gas emissions

●

Reduction of water consumption

●

p.17

ers

7,936 t-CO2
954,000 m3
Number of participants in environmental preservation activities 208●

Realizing a society where anyone can be active in their own way

5.8％

●

Ratio of women in management positions (Itoham + Yonekyu)

●Percentage of employees taking childcare leave (Itoham + Yonekyu)
Men 12.0%

Women 100.0%

Sustainably stable shareholder return

Medium-term Management Plan 2023 p.8, p.16, p.18

Technology

32％

p.15

in g
in k

ls

Total energy usage
Total amount of water usedSpecial Article 2:“Pursuit foruncompromising flavor
and high quality”
p.19

Meat Businesskil

p.15–18

Number of sales officesJapan 165, overseas 17
Japan 24
Distribution offices (logistics bases)
Countries and regions offering productsOver 80

High quality

ns

Business Overview

Social and Relationship Capital

Flavor16 ％Financial and Corporate Data

¥239.9 billion
62.7%¥30.0 billion

Special Article 2:“Pursuit foruncompromising flavor
and high quality”
p.19

do w

Shareholder’s Equity
Equity ratioFree cash flow

ManufactureTh

Financial Capital

Product
Development

Uncompromisingdemand21％

Basis for Growth7,239

Pizza, snacks* According to our Group●●

Processed foodProcessed Food Business●

Ham and sausagep.44

Maximization ofIntegration Effects

8,313

Natural Capital9● Our Group market share according to products (fiscal year 2021, in Japan)

Human Capital
Employees
Education and training for
fostering diverse personnel
Job-class-specific training
Compliance trainingQuality assurance training
Education/training participants(fiscal year 2021)

Number of new Group products (including home-use/industry-use, and gifts) 218
Expansion of non-meat business and increase in product value
37
Number of non-meat products
Market share of processed food products and meat

Vision and Strategy

bility
elia
r
d
an
s
t
uc
d
o

Offe
ring
mo
vin
g

s
ce
ien
er

(Qualified ham, sausage, and bacon manufacturing
technicians/Ready-made meal technician)
1,114

●
●

2021 Financial Information

14

H a n din g

Recognition of the External EnvironmentIntellectual Capital

Accumulation of expert knowledge and know-how
Technical certification holders

Action Guidelines

Realizing a sound and affluent society

Japan and overseas 26 in total(Development 12, central research 2
including those located in Numazu)

Vision●(ISO 14001, ISO 14061, and EcoAction 21)

Research and development offices

Offering a variety of products
to meet diverse lifestyles and needs

Desired Corporate Image ▶ p.1

Production factories Japan 42, overseas 14
Factories with external certification
Food safety and quality control●

Outcome Offering value to society
Introduction

Manufacturing Capital

OutputQuality Assurance p.32

●

ROIC

●

Consolidated payout ratio

6.6%
35.2%

10

Vision andStrategySpecial Article 1: Discussion among
General Managers of Meat Business Division

Related Materiality

To “Promote sustainableprocurement and stable supply.”
Itoham and Yonekyu leverageeach other’s strengths

Shinyo Tou

Fumihiro Kanamori

Executive Officer and Senior General
Manager – Imported Meat Div.,
Meat Business Div.

Executive Officer and Senior General
Manager – Domestic Meat Div.,
Meat Business Div.

Executive Officer and Senior General
Manager – Meat Process & Farm Div.,
Meat Business Div.

He joined Yonekyu in 1999. He served as
Manager of Imported Pork Unit, Beef Unit,
General Manager of Meat Business Division,and other posts.

He joined Itoham in 1988. After working in the
Imported Raw Materials Division and Processed
Raw Material Department of the Production
Division, he served as Manager of the Poultry
Department of the Meat Business Division.

He joined Yonekyu in 1987. He served as
Manager for the Imported Chicken Unit,
General Manager of Meat Business Division,and President and Representative Directorof Yonekyu Oishii Tori Corp.

Itoham Yonekyu Group Integrated Report 2022

Yoshino: To import meat, both Itoham and
Yonekyu have a strong cooperative relationshipwith their respective meatpackers*1 overseas.
Since human connections are crucial inprocurement, the two companies maintainthe same staff members in their respective
negotiating windows. Moreover, the sales support
teams of both companies coordinate ideas for

Financial and Corporate Data

11

Hirohiko Yoshino

Basis for Growth

Procurement synergies
created by integration andfuture prospects

Vision and Strategy

Kanamori: First, let me explain the division of
our production business. Itoham’s strength is inproducing Berkshire pork, and Wagyu beef madein Japan. Yonekyu’s strength lies in producing
brand-name white pork, crossbred beef, andchicken. Wagyu beef is mainly produced by
Mirai Farm, Berkshire pork in Kankyo Farm in
Kagoshima Prefecture, crossbred beef in Kirosa
Farms, and chicken by Yonekyu Oishii Tori Corp
in Tottori Prefecture. Futhermore, we also develop
our buisness by working together with otherpartner farms across Japan toward the same goal
and leveraging each other’s strengths.
Tou: It’s true. Yonekyu is good at selling its
products with added value, such as “Rokkoku
ton” (pork fed with six kinds of cereals) and“Oishii Tori” (tasty chicken). On the other hand,
Itoham has its sales offices in every prefecture
in Japan and procures beef, pork, and chickenfrom its partner farms across the country. It
excels in procurement and sales capabilities
that meet consumer needs, such as consuming
locally produced food. I believe that the fusion of
those strengths has created a synergistic effectin the procurement and supply of domestically
produced meat.
Yoshino: The integration of Itoham and Yonekyu
has given us approximately a 20% share of theimported meat market, the second largest inJapan. Since we are just 3 to 4% behind the No.
1 position, we would like to consolidate further
the two companies’ strengths to gain a morefavorable position in this competition.

Introduction

In October 2021, Itoham and Yonekyu’s meat business was reorganized to achieve further growth.
We are leveraging each other’s strengths to steadily advance our effort in “Promoting sustainableprocurement and stable supply.”
We will introduce the synergistic effects of management integration and the future of our
procurement and supply.

prices and quantities to purchase in bulk. We
conduct sales through three channels: Itoham
Meat Sales East, Itoham Meat Sales West, andYonekyu, all of which are our Group companies.
However, we control inventory in a unified andcentralized manner to adjust their excesses
and shortages. We will continue to expand ourmarket share further and reinforce our trust withoverseas meatpackers as global demand formeat is increasing partly due to the rise of newly
developing countries.
Tou: It was in October 2021 when the meat
divisions were integrated, but we had beencollaborating and sharing information for morethan five years before that. For example, we
supplied Oishii Tori chicken from Tottori Prefecture
in response to the request from Itoham’s customers
in the Kansai region, or we procured chickenfrom the Tohoku region when requested by
Yonekyu’s sales office in the Kanto region. As
mentioned earlier, in the case of imported meat,
the synergistic effect of quantity is significant, but
in the case of domestic market, the synergistic
effect of integrating different regions is moresignificant. In addition, we are now talking about
improving our procurement capabilities, but wealso expect synergy in the sales area to manifest
in the future. Our procurement capabilities will
increase accordingly when the Sales Division
starts to push us for more.
Kanamori: From the standpoint of a meatproducer, we are happy to see our sales powerincrease. It is a great pleasure to know that thebeef, pork, and chicken we raise are sold allover Japan through Itoham’s nationwide sales
network. Another factor that motivates us isthat with the recent increase in export of Japanproduced wagyu beef, not only Japanese but
also people overseas appreciate the taste of ourmeat. Of course, management integration has not
only improved our sales network. It has enabled
our production sites to exchange information andshare know-how actively. Good points of one
farm will be applied to the other farms, and issues
will be corrected. I believe that through suchfriendly competition, we can further improve theefficiency and quality of our livestock production.

*1 Meatpacker: A major national industry in the United States,
Australia, Canada, and other countries is the meat industry.
Companies involved in this industry are called meatpackers.
Their business covers a wide range of operations, such as
raising, slaughtering, butchering livestock, and processing anddistributing meat.

12

Vi s i o nan dStr ateg ySpecial Article 1: Discussion among General Managers of Meat Business Division

Group’s current issues andfuture prospects

Defying stereotypes for future goals
Our initiatives for materialities*2 We published “Our Approach to Animal Welfare” and “Animal Welfare Policy” in
May 2022.

Financial and Corporate Data

Kanamori: As a production business, we place greatemphasis on animal welfare. We are improving the animalhusbandry and production system based on the Five
Freedoms for Animals, which outlines the principles of
welfare for domestic animals, such as “Freedom fromhunger and thirst.” The welfare of animals affects livestock
products’ quality, safety, and productivity. By creating ourown policy for that, we can provide guidance to our Group
companies and partner farms. We feel this contributes todeveloping a sense of unity among us as we are involved in
the same production business.*2
Tou: The tie-up with farmers I mentioned earlier is anothermateriality initiative. Proper commitment to animal welfare
costs a considerable amount of capital investment.
Therefore, we are convinced that cooperation to realize
larger-scale farming will lead to sustainable and stableproduction of high-quality meat.
Yoshino: One of our basic rules for importing meat is not
to procure meat from meatpackers who do not comply withthe animal welfare standards of their country. We do notpurchase meat from anyone who violates those standards,
no matter how low a price they may offer.
Kanamori: As part of our initiative to lower greenhouse gas
emissions, we have begun experimenting by giving cattle afeed additive made from cashew nutshell liquid to reduce
methane gas in their burps. The additive helps improve
cattle digestion and absorption efficiency, reducing methanegas emissions. Since the ingredient is derived from natural
sources and feed efficiency will be improved, we think thisinitiative goes with the times and is promising.

Tou: Regarding the earlier discussion of materialities, weare taking the lead to address the materiality of “creating aworkplace where each employee can actively participate.”
Over the past six years, Itoham and Yonekyu have been
capitalizing on each other’s strengths and compensating
for each other’s weaknesses. However, going foward wemust take responsibility for discovering the individuality
and strengths of each employee and consider the best andstrongest assignment for them to carry on our business.
By doing this, we will become an even better company. We
must assign each employee to a position where they can
maximize their strengths, regardless of which company theycame from. I am convinced that if all employees are satisfied
with their assignments, we will not only be able to facilitatesustainable procurement and stable supply but also further
evolve the entire company.
Yoshino: We import both chilled meat and frozen meat.
Chilled meat is considered higher quality than frozen meatbecause umami drips out of the latter during thawing.
However, importing chilled products is possible only from
relatively nearby countries. It would be very difficult toimport from Europe and South America. Therefore, weare currently testing a new technology that will allow us toimport chilled meat from distant countries. So far, we areachieving good results. If this works successfully, we cancreate new culinary delights. For example, we can bring to
the table chilled Iberian pork from Spain or chilled veal andchilled pork from France. This is what “defying stereotypes”(that our Group embraces) truly means. Our future goal is,
as we mentioned earlier, to achieve the No. 1 market shareby intensifying cooperation with overseas meatpackers. We
would like to accomplish this within three years.
Kanamori: At the policy presentation for this fiscal year,
I asked employees at production sites to always imagine
mealtime scenes while they work. It is true that the livestockbusiness is about finding the most efficient way to convert
plant-based feed into animal protein, but the most crucial
things are safety and good taste. We will produce and sellsafe, high-quality, delicious beef, pork, and chicken under
the same meat production concept throughout Itoham
Yonekyu Holdings. To this end, we will continue to further
brush up our meat brand. Additionally, effective utilizationof excrement is becoming more critical than ever in the
livestock business. Currently, we sell it outside the company
as manure. Still, it would be interesting to utilize it within
our Group to produce feed grain and vegetables that canbe used as raw materials for processed products in Japan.
In this way, we would like to create a sustainable, circularbusiness model.

Basis for Growth

Itoham Yonekyu Group Integrated Report 2022

Given that Japan’s self-sufficiency rate in meat is less than
50%, one of our primary roles is to import and supply meatto our customers in a stable manner. Therefore, we areworking out our meat procurement strategy while carefully
monitoring fluctuations in the feed grain market.

Vision and Strategy

13

Introduction

Tou: The lack of successors is a very serious problem
for farmers in Japan. The number of farming households
producing beef, pork, and chicken is decreasing every year.
Parents are too busy in family-run businesses to attend
their children’s school events. The labor shortage due to thedeclining birthrate also gives them a headache. Recently,
we have begun to encourage livestock farmers with suchconcerns to join our group of partner farms and collaborate
with us. When a participating farmer wants to take a day off,
employees from other partner farms come to support them.
Thanks to this support, they are happy as they can now go
to their children’s sports day. If more farmers can utilize such
matching, it will help solve the labor shortage and promotelarger and more efficient farms. We can kill two birds with
one stone.
Kanamori: Related to that, we are undertaking DX
approaches to solve the chronic shortage of manpower.
One example is the system to check appropriate weight for
shipping, introduced to our Group company, Taiyo Pork.
Determining the proper shipping weight of reared pigs
requires experience and skills. However, this system allows
even inexperienced workers to make decisions by converting
pictures of a pig taken with a specialized terminal into 3D
data and showing its approximate weight. It has reduced
the workload on employees. Mirai Farm also improves
production efficiency by utilizing a system that automaticallydetects breeding cows’ estrus and management softwarethat converts the condition of growing calves into data to
reduce accident rates. Furthermore, Taiyo Pork and Kankyo
Farm have begun using automatic barn washers. Barns arecleaned each time the shipment is finished, but it is quite
exhausting. The automatic washers reduce workload. We
believe that saving labor and downsizing workforces on a
farm will lead to sustainable livestock production.
Yoshino: One of the challenges in recent years has beenenvironmental issues. Global warming has made it difficult togrow feed grain stably. The higher feed prices are, the lessanimals can be fed. Consequently, there will be violent ups
and downs not only in prices but also in production volume.

14

Vision andStrategy

Business Overview
Processed Food Business
FY2021 Results and Issues

Toward improving profitability
and promoting growth• Sales ratio according to
product category• Sales trend• Trend of operating income/ratioof operating income to net sales(¥ billion)

300.2

307.0

■ Operating income (¥ billion)

302.3

Ratio of operating income to net sales (%)

12.3
Ham &
sausage

45 %

55 %

6.7

4.1

3.6

Basis for Growth

Processed
food

11.0

We must respond to consumers’ needs and values as theyrapidly change and diversify, considering the changes ofconsumer behavior during the COVID-19 pandemic andacceleration of digitization. First, Itoham and Yonekyu arestrengthening their relative brands, putting effort into growing“standard products” and “only-one products” as a way tostrengthen brand and respond to diversity. To stimulate
communication with various customers, we are further
strengthening our digital marketing. Regarding processed
food, we are moving forward to further expand business areas.
Pouring effort into perfecting taste and fostering products thatwill continue to grow, we aim to create a full lineup for ourcustomers to enjoy. Specifically, we are working to develop
new products and new channels, like soy-meat products andfrozen foods.
Regarding improvement in profitability, we were strived to
streamline our operations, but since it is very difficult to absorb
the entire burden caused by raising prices in raw materials
and such, we will revise the price of products while we makeefforts to reduce cost by building an optimal production anddistribution system plant reform, and other ways. Additionally,
we are building up our foreign bases in growing foreign markets
and making them stronger, so as to create synergetic effects
among business bases. We are using personnel strategies andtraining programs to cultivate personnel who can operate andlead foreign businesses.

Vision and Strategy

Koichi Ito
Director, Managing Executive Officer
Senior General Manager COO – Processed Foods
Business Div.

In FY2021 we faced challenging business environment, withrising raw material and energy prices, but we focused ourefforts on enhancing our product lineup, with new householdproducts, long-life products, and shelf-stable products. By
implementing a new commercial for products such as the
GRAND Alt Bayern and other gifts, we sought to increaseuser awareness, and our market share of household products
steadily increased.
As part of our sustainability response, we switched to theenvironmentally-friendly drawstring bag form of packaging
for products like “The GRAND Alt Bayern.” Thanks to this,we were able to reduce amount of plastic used, reduce CO2
emissions, and even save on space during distribution andtransport.
Furthermore, we redefined Itoham’s and Yonekyu’s
respective brand values, organized our product portfolio, andstrengthened our ability to respond to the market and customer
response, while also moving forward with facility investmentthat included countermeasures to plant decay. This represents
how we redoubled our efforts to improve cost competitiveness.
Moving forward, it will be critical to respond accurately tothe extreme changes in our operating environment throughrapid expansion of business areas, and reorganization ofbusiness portfolio which will lead to improving profitability andstimulating growth.

Towards an organization that
promotes overall optimization throughits strategic organizational structure

Introduction

We will sustainably grow ourprocessed food business throughefforts seeking both increase in profit
margin and increase in sales.

FY2022 Strategies and Initiatives

2.2
2019

2020

2021

(FY)

2019

2020

2021

(FY)

* The “Accounting Standard for Revenue Recognition” is applied starting from the beginning of the consolidated fiscal year 2021

As for the market environment our Group is facing, domestic
food consumption has been in decline due to decreasing
population and an aging society, but we think the needs forprocessed “convenient” products are rising due to increases
in the number of smaller-sized households and employment
rate of women. Also, we expect the buying behaviors of people“with COVID-19” and “post-COVID-19” to remain the main
pattern moving forward. Due to the growth of a sustainability

Strengths• Long-standing brand strength• Product development abilities based on hightechnical skills• Full product lineup• Nationwide sales and logistics network

15

Itoham Yonekyu Group Integrated Report 2022

and ethically-conscious consumer base, social demands relating
to ESG and SDGs have been on the rise, and we think these
conditions will bring about new buying motivations in which
the values of consumption are diversified, segmented, andindividualized. Additionally, we recognize that efficient business
operations featuring less burden on the environment will be more
and more in demand as digital transformation (DX) and energy
transformation (EX) become more common.

Opportunities• Expansion in the need for simple meals,

meals for consumption by individuals, readymade meals, and new processed foods• Social demand for safe, reliable food supply
focusing on trustworthiness• Preparation of a workplace environment
where each employee can actively participate• Demand for environmentally-friendly products• Growing foreign markets

Financial and Corporate Data

FOCUS!

Recognition of the Market Environment

Risks• Unclear environment in which costs of raw

materials continue to increase due to global
inflation• More severe difficulty in acquiring personnel
and lack of personnel at business facilities
due to declining birth rates• Shutdowns at plants due to infectious
disease or livestock illness, and lack ofstability in raw material procurement

Four Initiatives for Achieving the Goals of“Medium-term Management Plan 2023”• Major Theme 1. Strengthening management base

Starting in April 2022, we have established the Processed Foods Division, while we work on unification of Group strategy, proper
placement of personnel via system integration, activation of personnel, and advancement of digital strategies.

• Major Theme 2. Strengthening earnings baseWe have started reorganization of production bases and begun reconstructionof Yume Plant.

• Major Theme 3. Initiatives for new businesses and markets
Proactive collaboration with other companies and use of new raw materials
will lead to technological innovation and improvement of the product value.

• Major Theme 4. Initiatives for sustainability

Changing to the environmentally-friendly packaging of a drawstring bag form
to reduce the amount of plastic used and greenhouse gas emissions.
For more information, please see page 23.

16

Vision andStrategy

Business Overview

Meat Business
FY2021 Results and Issues• Sales ratio according totype of livestock

Other• Sales trend• Trend of operating income/ratioof operating income to net sales(¥ billion)

548.1

7%

■ Operating income (¥ billion)

547.8

531.5

Ratio of operating income to net sales (%)

14 %

11.2

13.4

14.8

Beef

Pork

47 %

2.1

32 %
2019

2020

2021

(FY)

2019

2.5

2.7

2020

2021

Domestically, while the heightened demand for food for eating
at home has settled somewhat, the number of industry-use
products of imported poultry and products for mass sale ofdomestic poultry increased, and the market value of imported
beef and domestic beef remained high, such that net sales
increased. However, profits went down due to the continuing
influence of rising prices of procurement caused by highmarket value and disruptions in maritime container transport.
In business abroad, net sales and profit both increased
markedly, thanks to the spread of internal improvements in
ANZCO, which offers New Zealand beef and lamb business,and rising market prices in main sales destinations in North
America. In the overall Meat Division, net sales were 547.8
billion yen, with an operating income of 14.8 billion yen—our
highest profit on record.
As our main initiative in FY2021, we inherited the assetsof the Towada Meat Center from Towada City, and beganrunning it as the IH MEAT PACKER Towada Meat Plant; wealso began operating the IH MEAT SOLUTION Ishikari Packing
Center. Additionally, we established a new Meat Division,
integrating the Itoham’s and Yonekyu’s Procurement Divisions
and Strategic Divisions as an integrated organization in themeat business. Moving forward, we intend to inaugurate our
project for unifying the core system of our meat business (MEATMIRAIKIBAN project) starting from the beginning of 2023.
We will also seek streamlining of distribution, optimization of
warehouse storage locations, and optimization of transport
methods and routes, as well as reduction in distribution costs
and in greenhouse gas emissions.

Aiming for expansion and optimization of our production
business, we are engaging in large-scale facility investment(new facilities of the Towada Beef Processing Plant) both
domestically and abroad, and pushing for higher added
value through in-house products and widening of production/
processing margins. In our domestic business, we arestrengthening our offerings through a sales network that spans
the whole country, as we seek to enhance operation profitability
through greater sale of brand meats and unheated products.
In our foreign business, we are strengthening ANZCO’s export
competitiveness, while we collaborate domestic wagyu beef
and kurobuta pork export businesses and widen sales margins
in global markets. Additionally, we are implementing cost
reduction strategies for the mid-term, such as distribution
streamlining and promoting digital transformation, starting with
MEAT MIRAIKIBAN project.
We are strengthening our efforts in sustainability, as we planto achieve economic value at the same time as achieving socialand environmental value. Specifically, through our Group’s
wagyu partner farms, we will cooperate with the “Business of
Building a System for Visualization of Reduction in Greenhouse
Gases (GHG) in Cattle Production” operated jointly by theJapan Cattle Industry Cooperative and the Tokyo University ofAgriculture, and proceed with verification experiments using
natural product-derived feed that restricts creation of methane.
Furthermore, regarding the healthcare business operated by
ANZCO, our total share of core products is now among thehighest in the world thanks to the buyout of Moregate Exports
Ltd. These products are used in the manufacture of vaccines,
regenerative medicine, clinical diagnoses, and more, and it isexpected they will continue to see high market growth.

(FY)

Basis for Growth

ChickenTaking initiative in making change
and pioneering a new future

Vision and Strategy

Takamasa Wakaki
Director, Managing Executive Officer
Senior General Manager COO – Meat Business Div.

Creating a change- and riskresistant business structure

Introduction

Take initiative in making changes andpioneering a new future to create andexpand the meat value chain.

FY2022 Strategies and Initiatives

FOCUS!

Recognition of the Market Environment
The environment of the global food industry is changing at a
rapid pace, with population problems and climate change,
as well as the recent spread of the coronavirus and risinggeopolitical risks. Particularly in the meat industry, conquering
the many factors that increase costs—factors such as rising
prices of animal feed ingredients and fuel, global disruptions incontainer distribution, chronic lack of personnel—is the main
issue we face. Also, while we must work on sustainability,

Strengths

Opportunities

Risks• Greater global demand for animal protein• Greater demand for new sources of protein• Influence of climate change on production• Wide array of products and excellent ability• Greater demand for value-added products

to develop products• Domestic meat production and unheatedmeat business• Growth of foreign business (ex. ANZCO)

17

including reducing greenhouse gas emissions in livestock
production and improving animal welfare, the importance ofmeat as a source of protein that sustains human health isgrowing. We believe that this Division’s mission is to achieve
further growth and improvement in our Group’s food production
and sales bases in Japan and abroad, as well as maximizationof not only economic, but also social and environmental value
through the food business.

• Nationwide sales network• Procurement abroad with in-house import as
the main means

Itoham Yonekyu Group Integrated Report 2022

(alternative meat)

due to changes in lifestyle• Optimizations and cost reductions which
utilize rapid technological innovations,
including digital transformations and AI.

Financial and Corporate Data

* The “Accounting Standard for Revenue Recognition” is applied starting from the beginning of the consolidated fiscal year 2021

business• Increase in factors that hinder smoothinternational dealings• Rising prices for animal feed ingredients,
materials, and fuel• Increase in risk of animal diseases• Increase in personnel and distribution costs
due to lack of personnel

Four Initiatives for Achieving the Goals of“Medium-term Management Plan 2023”• Major Theme 1. Strengthening management baseWe will maximize integrated synergy by completing the “MEAT MIRAIKIBAN project” andstreamlining distribution.

• Major Theme 2. Strengthening earnings baseWe will move forward with expanding production and processing business along withimproving cost competitiveness, while we strengthen our ability to reach final customers
in the sales business.

• Major Theme 3. Initiatives for new businesses and markets

We will expand investments into high-growth areas, such as the healthcare business, theextract business, and alternative meat projects.

• Major Theme 4. Initiatives for sustainability

We will strengthen materiality response, especially reducing greenhouse gas emissions
which are deeply linked to the meat business, and pour efforts into animal welfare, while
enhancing efficacy of our procurement policy.

Animal derived blood products fromthe healthcare business operated by
ANZCO

18

Vision andStrategy

Related Materiality

Special Article 2: Interview of Employees
in Charge of Product Development
For the “Pursuit of uncompromisingflavor and high quality”

Leveraging each other’s advantages
to generate new strengths

Soy-based meat products are gaining recognition assustainable foods along with the growing awareness ofenvironmental issues. Itoham launched the products forhome use in March 2020. This attracted the industry’s
attention as its lineup includes hamburgers, meatballs,
cutlets, nuggets, and fried chicken.

The Product Development Department staff works hard
every day to develop and improve our products. The sourceof their commitment to good taste and high quality is thetransmission of skills and communication. The developmentof new products is influenced by the exchange of different
corporate cultures between Itoham and Yonekyu, therelationships that transcend hierarchy within the department,
and the information sharing with the Central ResearchInstitute and other departments.

as the main ingredient in anticipation of
the increased global demand andsupply shortage of meat.

• It offers the pleasure of choosing andeating from more options other thanbeef, pork, and chicken.

• It provides healthy products thatvegetarians can also enjoy.

A wide variety of the soy-based meat lineup
includes hamburgers, barbecue meat, friedchicken, curry, and stew. Since the launch,they have been constantly improved to be evenmore delicious!

“Since I am still new to the Product Development
Department, I am constantly learning from theexperienced members around me. When I make aprototype, I ask them for advice and consult with
the Central Research Institute. I directly talk withfactory workers when I put it into factory production.
Information exchange meetings also help me. Listening
to other’s opinions has broadened my mind andperspective, which has become my strength. I feel that
this is one form of handing down skills.” (Funahashi)“When we develop a new product, we must maintainoriginality without losing productivity in the line. To this end,
it is indispensable to listen carefully to the opinion of the
production sites. Of course, the Quality Control Department
has its own opinions as well. Contentious arguments arise,
but it is because everyone wants to create a good product.
We create together and brush up together. In this respect,
we have open communication.” (Kimura)

Naoko Funahashi

General Manager – the Product Development
Sect. 1, the Product Development Dept., of theProcessed Foods Business Div. /Production Div.

Product Development Sect. 1, the ProductDevelopment Dept., of the Processed Foods
Business Div. /Production Div.

He joined Itoham in 2002. He worked in the First
Production Department of the Tokyo Plant, in
the Engineering Section of the Development
Department, and in the Production Control
Section of the Production Control Department.
He also served as chief of the Development
Section of the Tokyo Plant before he assumed
his current position. He leads development
members in a department responsible fordeveloping new products which are supposed
to be manufactured at Itoham’s plants under thesupervision of the Processed Foods Division. His
department is also responsible for supporting
the development departments of each plant.

She joined Itoham in 2014. She worked in the
Quality Control Section of the Toyohashi Plant
and the Quality Control Office of the Tokyo
Plant before she assumed her current position.
She is mainly in charge of the plant-based
product category and develops soy-based
meat products, among others.

Itoham Yonekyu Group Integrated Report 2022

Financial and Corporate Data

Akifumi Kimura

Basis for Growth19

Soy-based meat with top market
share developed with our technicalcapabilities

Hand down skills and open
communication lead to new productdevelopment• It was commercialized with soy protein

Vision and Strategy

Itoham has valued technology and tradition, whereas Yonekyu
has a reputation for creativity and originality. During these
six years since the two were merged into Itoham Yonekyu
Holdings, various new approaches have been created in thefield of product development. The combination of different
cultures has generated new strengths.
“It was this fiscal year when the two development teams
were merged, but before that, all development staff fromthe two companies gathered remotely to hold crosscultural exchange meetings. Each party explained, tothe other, its products and production lines to share
information on products. I feel that being exposed tototally different ways of thinking has helped us to comeup with new ideas with amazing speed.” (Funahashi)“I believe that Itoham’s major strengths are in its full
lineup of products and its brand power cultivated during
its 94-year history. Yonekyu’s original culture, which wasadded to them, has taught us that there were other ways

to make ham and sausages than what we had taken for
granted. This has been a great advantage in developing
new products.” (Kimura)
By properly recognizing each other’s products andfacilities and learning from each other’s good points, webegan perceiving things from a completely different angle.
This leads us to review production processes and costs to
reduce the time for developing and commercializing new
products. Soy-based meat products are the highlight of thiseffort.

The Achievements of
Soy-based Meat!

Introduction

The tasty and high-quality product lineup of Itoham and Yonekyu Holdings is the result of
the ingenuity of each one of our employees to support people’s healthy and affluent diet.
We interviewed them about their thoughts and efforts in product development.

“To prepare for the launch of soy-based meat products,
all development staff from both companies held
study sessions. We got together in August 2019 andthe plan was to launch the products in March 2020.
The development period was short, only six months.
However, we combined our knowledge and expertiseto go through a significant and intensive development
process.” (Kimura)
Itoham’s soy-based meat products for home use havebeen selling steadily. It began selling soy-based meat forbarbecue and soy-based chicken for salad in February
2021. Jerky started to be sold in August 2021, and curryand stew in March 2022. It continues to improve existingproducts and has become a leading producer of soy-based
meat products for home use.
“Just as with meat products, launching soy-based
meat products does not mark the end of our work.
There is still much room for improvement. Continuous
research is required to make it even tastier andhealthier. Considering this also to be an important
product development mission, we work hard every day.”(Funahashi)

20Vi s i o nan dStr ateg ySpecial Article 2: Interview of Employees in Charge of Product Development

Aiming to create products thatdelight people and a workplace torealize this

Itoham Yonekyu Group Integrated Report 2022

Formulated withconsideration to advice
from outside experts andsocial demands.

Extracting
social issues

Extracted items basedon “ISO26000,” the“GRI Guidelines,” andbusiness strategies
such as “Medium-termManagement Plan 2023.”

Evaluating
significanceMatrix mapping ofvarious social issues
from the perspectiveof their significances
for stakeholders andour Group.

Extraction of
initiative items

Along with mapping,classified the issues
and extracted actionplans.

Meeting of
the Board of
Directors

Dialogue withexperts

Discussion andexchange of
opinions withexperts and outside
stakeholders.

Disclosure upon
decision by the
Board of Directors.

• Materiality
Materiality

Realizing healthy
and affluent dietSee page 23 for details

Considering theenvironment
See page 23 for details

Creating aworkplace where
each employee canactively participate

Promotingsustainableprocurement andstable supply
See page 24 for details

Basic Policy / Background
Offering safe, secure, and high-quality products and services thatwill satisfy customers is our top priority. Furthermore, we willcontinue to provide products and services that meet the needs ofdiverse lifestyles and society, focusing on health-conscious meals,
convenient meals, and reduction of food loss.
We recognize that our business has a close connection to theearth’s environment, and we are moving forward with initiatives thatare considerate of biodiversity, while we work on reducing
environmental burden, through effective use of resources andreduction in greenhouse gas emissions.
We respect a wide variety of value systems and work styles, and
we ensure a working environment that enables every employee towork safely, as they support our business activities. We cultivate an
atmosphere that seeks continuous growth for both employees andthe corporation.

We are building a sustainable supply chain, as we aim to resolve
social issues, such as respect for human rights and animal welfare,by cooperating with all of our business partners, starting with thelivestock industry.

Subjects
Societyvalue in response to diverse lifestyles

Environment

Environment

Society

Environmentwater• Reducing waste emissions• Preserving biodiversity• Reducing the amount of plastic used
• Personnel development and training• Respecting diversity• Promoting a healthy work-life balance• Occupational health and safety, health• Contributing towards a sustainable
livestock industry• Promoting procurement that respects
Society

GovernanceSee page 35 for details

We are aiming for sustainable growth and medium- to long-term
improvements to our corporate value, and we will build an optimal
governance structure based on our basic stance on corporate
governance.

Pursuit ofuncompromisingflavor and highquality

By producing our inherited technologies and the history, we look toprovide products and services that can be enjoyed by all
customers.

Society

Strengthening
corporate
governancereduction in food loss

management, and the respect of humanrightsSociety

See page 34 for details• Expansion of product that leads to• Reducing greenhouse gas emissions• Reducing the consumption of energy andAs a member of the local society and as a conscientious corporate
citizen, we are moving forward with initiatives that emphasize“coexistence with society” through consideration of the earth’s
environment, safety and health, and job creation.

Contributing tolocal communities

Action plan
• Safe and reliable supply of food• Supply of quality protein• Product development and supply of health

Financial and Corporate Data

21

Formulating“Basic Policy on
Sustainability”

See page 24 for details

Making prototypes in the kitchen dedicated to
the Product Development Department

Board ofDirectors

Sustainability Committee

Basis for Growth

In the never-ending product development, Itoham and
Yonekyu Group work hard daily to develop new products by
taking advantage of the respective strengths of Itoham and
Yonekyu. For the “Pursuit of uncompromising flavor and highquality.”• Selection process for materiality

Vision and Strategy

Among the seven materialities that Itoham and Yonekyu
Holdings have set forth, the most critical ones for
the Product Development Department are “Pursuit ofuncompromising flavor and high quality” and “Realizing
healthy and affluent diet.”“We have an enormous responsibility to supply goodquality protein. The source of protein may be meat, soybased meat, or other plant-based alternatives. To offer
our customers a broader range of options and help themenjoy healthy and affluent diet, we must create moreproducts by making good use of the technology andfacilities we have developed. Obviously, good taste also
matters. Our mission as developers is to keep creating
better and tastier products.” (Kimura)“The concept of sustainability will be even more pivotal.
Since demand for meat substitutes, including soy-based
meat, is increasing in Japan as well as in the world,
we will continue researching and pursuing a substitutetastier than real meat.” (Funahashi)
Another important task of the Product Development
Department is to develop products that help people leadwholesome lives. In addition to soy-based meat and healthoriented products already on the market, such as lowsodium or low-sugar foods, we will proactively develop
foods with functional claims, such as foods with additional
ingredients that benefit people’s health.

The Itoham Yonekyu Group has identified important social issues based on the perspectives of stakeholders and theGroup. From these issues, we selected the most pressing issues to our Group as materiality, which were decided onby the Board of Directors. We will incorporate materiality issues into our business strategy and contribute to therealization of a sustainable society through business.

Introduction

Our commitment to materialities
is to bring people tasty andhealthy products

Initiatives in Materiality

Establishing 7 materiality issues

Tasting and discussing newly developed products

Social conditions and people’s preferences change fromone day to another, one moment to another. Researchingfrom various angles to perceive the future is the importantmission of the Product Development Department.
“Consumers desire two things. They want to eat safe
and secure food, and they also want to eat noveland delicious food. We must create products thatsatisfy both. I am now mainly in charge of plant-based
products, but I do not want to limit myself to that. I wantto create new products not just for the immediate future
but also consider the next five to 10 years. Creating new
products that can be promoted in Japan and globally bebetter. I would like to pursue that goal.” (Funahashi)“As the general manager, I would like to create anenvironment where highly motivated members like Ms.
Funahashi can work comfortably. As a developer, I havealways wanted to create long-selling items. Both Itoham
and Yonekyu have products that have been loved for
decades. I would like to create even more popular
products that will be cherished by the next generationand the generation after that.” (Kimura)

Vision andStrategy

human rights• Animal welfare considerations• Promoting compliance• Risk management22Vi s i o nan dStr ateg yInitiatives in Materiality
Creating a workplace where each employee can actively participate

In order to realize our Group Philosophy, we have implemented business operations so as to achieve bothsustainability of society and our business. In particular, we are working on a variety of new tasks through“7 materiality issues” we formulated in 2021.
Here, we will look at specific initiatives for 4 of those materiality issues.

Supporting flexible work styles
through the “Portal Site for Promotion of Work Style Reform”
As work styles become more diverse, whether balancing
work with childcare or nursing, or working “with COVID-19,”

Realizing healthy and affluent eating habits

we are working to notify workers through our “Portal Site for
Promotion of Work Style Reform” regarding the childcare/nursing consultation office, the support system for work-

We are providing customers with new options for obtaining

support such that each Group employee can work coｍfortably.

childcare balance, and the system for at-home work.
By promoting diverse, flexible work styles, we are providing
Also, we are working to create workplaces where a variety

protein in their diet, by expanding the product lineup in eachof people can be active, with initiatives like proactive hiringof the “Marude Oniku!” and “AIRMEAT” series, which are non-and utilization of women, and creation of stable employment

meat brands. Additionally, we are selling our unheated meat

opportunities for the disabled through cooperations with public“Onikuya-san no Daizu MEAT” series which can be used in a

I am mostly just glad I was able toget childcare leave. It’s a toughtime right after a child is born, but I
got to spend that time with my wifeand child, so our family bonds were strengthened. And while I
was on leave, a lot of people helped out, so I felt a renewed
sense of how nice it is to work as part of a team. I am deeply
grateful for everyone at work for being understanding.
Accounting and Finance Department
Takayuki Osawa (29 years old)

Vision and Strategy

institutions.

variety of meals at home, and we organized a supply system

I felt a renewed sense of
how nice it is to work as
part of a teamIntroduction“Safe, reliable” and quality protein
for diverse lifestyles closer to home

VOICE

to respond to the expansion of the non-meat business field,
which is expected to grow in demand.

Formulating and disclosing the “Itoham Yonekyu Group Human Rights Policy”
in order to fulfill social responsibilities as a corporation

In order to provide safe, reliable products and services to ourcustomers, we will continue to fully obey the law and to makecontinuous efforts to properly disclose product information. At
the same time, we hosted a conference with experts from the
NPO Science of Food Safety and Security (SFSS) as an initiative
90% of the participating employees have positive remarks,

related to food safety and security. Employees involved in quality

such as “I learned some techniques for dealing with consumer

control, quality assurance, product planning, and development

psychology regarding additives” and “It led to an improvement

attended the talks, and gained a deeper understanding of

in my consumer response.” We will continue to find links to newthings like consumer psychology regarding additives. Overissues moving forward.

a human rights due diligence system, in order to fulfill our

we recognize that “respect for human rights is at the basis forresponsibility to respect human rights through our businessall decisions and actions,” and so we have formulated andactivities.

disclosed the “Itoham Yonekyu Group Human Rights Policy.”

Clickhere for “Human Rights Policy” (Japanese only).

We will move forward with further initiatives, such as building

Basis for Growth

to raise our customer response level in risk communications

Based on our efforts in various issues related to human rights,

Promoting sustainable procurement and stable supply

23

Expecting to reduce the amount of plastic used by 30% in target products by switching toenvironmentally-friendly packaging.

In order to execute procurement activities responsibly, we havelabor and child labor, and creating a safe working environment,

formulated and disclosed our Group’s procurement policy,

in order to promote sustainable procurement activities along

which declares respect for human rights and consideration

the entire supply chain. Moving forward, we will engage in

In order to contribute to reducing environmental burden andmaintaining the earth’s environment, we began switching overto environmentally-friendly packaging like the drawstring bag
form for “The GRAND Alt Bayern,” one of our core brands, and“Meatballs,” starting in February 2022.
By cutting the top of the packaging, we expect toreduce the amount of plastic used in the entire product line
by approximately 30%*1 (annually, approximately 150 tons,
approximately 850 tons when converted to CO2).
Not only does it contribute to reduction of storage space inrefrigerators and shopping bags, it contributes to reduction oftransport burden*2 (approximately 240 tons when converted toCO2) through improvement of distribution efficiency, since the
cardboard used for transport can hold 12 packs instead of 10,
constituting a 1.2 times improvement in delivery loading efficiency.

for the earth’s environment. Also, through our Supplieradditional initiatives, such as training for Group employees andProcurement Guidelines, we seek the understanding andsurveys of suppliers.

Itoham Yonekyu Group Integrated Report 2022

*1: Calculated value in comparison to current product*2: Our company’s test calculation• Change in packaging for The GRAND Alt Bayern

Financial and Corporate Data

Formulating and disclosing the “Itoham Yonekyu Procurement Policy”
and “Supplier Procurement Guidelines”

Considering the environment

cooperation of all of our Group’s suppliers for prohibiting forced

Formulating and disclosing the “Animal Welfare Policy”

Cut here

We believe that consideration for animal welfare, being closely

and procurement activities that respect the life of livestock.

linked to sustainable production and procurement activities in

We share our Group’s policy with business partners, and in

the farming industry, is a social activity that our Group must

collaboration with them, we will continue to strive to improveengage in. Therefore, we agree with the Five Freedoms policy

animal welfare.

expressed by the World Organization for Animal Health (OIE)
as its animal welfare policy, and we have formulated andDrawstring bag form

Environmentally-friendly packaging

disclosed our “Animal Welfare Policy” for promoting production

Clickhere for “Procurement Policy” and “Supplier Procurement Guidelines”(both Japanese only).

Clickhere for “Animal Welfare Policy” (Japanese only).

24Basis for
GrowthBasic Stance on Sustainability
Message from the Director in charge of Sustainability

At the Itoham Yonekyu Group, we believe that contributing to the realization of a sustainable society
through business based on our Group Philosophy is the key to sustainability. For that purpose, wehave specified “7 materiality issues” as we strive to solve social issues through business.

We will steadily strive
to solve the social issues
facing our GroupFor details on materiality, see page 22.

Recommendations andProposals

Sustainability Committee

Cooperation

RelatedDivisionsSustainability
SectionBusiness
Divisions

Click

25

Itoham Yonekyu Group Integrated Report 2022

here for “TCFD Recommendation Initiatives” (Japanese only).

•

Click

here for “Human Rights Initiatives” (Japanese only).

Clickhere for “Sustainable Procurement Initiatives” (Japanese only).

Financial and Corporate Data

Sustainability Promotion Officer

Basis for Growth

Board of Directors

In April, 2021, we established the Sustainability Committee asa consulting body for the Board of Directors. The purpose of
the committee is to promote sustainability management acrossthe entire Group in order to achieve a sustainable society andsustainable business.
The committee is composed of the joint CAO/CFO as
chairperson, four representatives from each division, and one
outside expert. Additionally, in April, 2022, we establishedSustainability Section as a dedicated department for responding
to management issues related to sustainability throughcollaboration of each division. This will allow us to “fulfill
corporate social responsibility through business,” one of the
major themes of our Medium-term Management Plan 2023, andlead to enhancement of Group value and sustainable growth.
Sustainability Committee meetings were held six times in
FY2021, with repeated discussions across a variety of areas,such as identification of materiality, development of humanrights policy, procurement policy and supplier procurement
guidelines, development of an animal welfare policy, andclimate change initiatives. As one of the specific achievements,
in accordance with the recommendations made by the Task
Force on Climate-related Financial Disclosures (TCFD), thecommittee examined the perspectives of governance, strategy,
risk management, and metrics and targets with advice fromexternal experts and externally disclosed the results on our
website in June, 2022.

Vision and Strategy

Group Philosophy

Contribute to the realization of sound and affluent society through business.

disclosed human rights policy, procurement policy, andsupplier procurement guidelines in order to handle humanrights and environmental risks in the supply chain. Moving
forward, we will engage in efforts to guarantee the efficacyof these policies and guidelines, by constructing humanrights due diligence and grievance mechanism, andimplementing supplier surveys.
Regarding our system, as a consulting body for the
Board of Directors, we established the Sustainability
Committee in FY2021 composed of representatives
from each division and an outside expert. Additionally, in
April, 2022, we established a Sustainability Section as adepartment dedicated to dealing with sustainability issues
through links between business divisions, as we prepare acompany-wide management system.
Our Group aims to improve medium-to-longterm corporate value through information disclosureand dialogue with all stakeholders in accordance withinternationally established frameworks, while we move
forward with individual initiatives. At the same time,
we will engage in business operations that allow forsustainability of both society and business, while wecherish our inherited traditions and history built with all of
our stakeholders as our trusted brands.

Introduction

The Itoham Yonekyu Group will contribute towards the realizationof a sustainable future based on the Group Philosophy.

of the Sustainability Committee

Director, Managing Executive Officer
Chief Compliance Officer
Chairperson of Sustainability Committee

As social needs and values rapidly change and diversify
through changes in consumer behavior and accelerationof digitization caused by the COVID-19 pandemic as wellas heightened interest in sustainability, our Group faces
a diverse array of social and environmental issues. We
believe it is important to contribute to solving these issues
through business and improve the sustainability of both
our Group and society in general. In order to realize thisbelief, we are discussing to develop KPIs and action plansto our seven particularly high-priority materiality issues,
identified in FY2021 which exert an impact on our Group’sbusiness.
Regarding environmental issues, initiatives addressing
greenhouse gases, which crucially require a global
response, is an urgent challenge. We expect our businessto be considerably impacted, in terms of rising prices
for feed and being forced to move to locations suitablefor industry livestock due to climate change. In order toreduce our Group’s greenhouse gas emissions even morewhile moving forward with proper risk response, in May
2022, we proclaimed our targets to halve greenhouse gas
emissions by 2030 (compared to FY2016), and to achieve
net zero by 2050. Also, we will move forward to strengthen
disclosure in adherence with TCFD recommendations.
Regarding special issues, we have developed andBasic Stance on Sustainability• Activities and Management System

Hajime Ogawa

S takeholder Engagement
Stakeholder

Opportunity/Means

Customer● Customer support office ● Consumer monitoring surveys● Implementing various events and campaign sales at stores● Information distribution and communication through website and social networks● Business meetings (introductory meetings for new products)

Local Society● Environmental preservation activities ● Dietary activities in the regions where we have offices● Local communication through sports

Shareholders and Investors● General meeting of shareholders ● Execution of explanatory meetings (financial presentations for investors, etc.)● Information disclosure on website, etc. ● Holding IR meetings with investors

Suppliers andBusiness Partners● Cooperation in business operations, cooperation in quality, safety, legal compliance through factory audits, etc.
● Communication through discussions and business meetings

Employees● In-house notifications and presentations about the Medium-term Management Plan, etc.
● Employee awareness surveys and compliance surveys ● Implementing career interviews and individual interviews● Establishment of internal and external consultation offices ● Round-table discussions with management and employees

Industry and Government
Organizations● Comprehensive links and agreements with local governments ● Dialogue with industry groups and periodic information exchange● Participation of and collaboration with external research events and industry groups

Global Environment● Forest preservation activities and volunteer nature preservation activities ● Efforts in reducing environmental impact● Food waste recycling

26

Basis for
GrowthE

Environmental Initiatives
Environmental Audit and Training

Basic Stance

Related Materiality

Environmental Management

Itoham Yonekyu Group Environmental Philosophy and Code of Conduct

training is also designed to enable a quick recovery in the eventof an accident.
We have defined and use regulations to allow for smoothinternal communication as well as communication withgovernmentalorganizations
and local
residents in theunlikely event ofan accident.
Visual appearance ofan environmental audit
at Toyohashi Plant

Material Flow
At the Group, we plan to move forward with saving energy, conserving resources, and reducing greenhouse gas and waste emissions,as we promote recycling of waste and strive for the formation of a cyclical society and reduction in environmental impact.

INPUT

Environmental Philosophy
We are aware that protecting our planet’s environment is one of the most important global issues and we are taking action
to realize a sustainable society by considering the environment in our business activities.

OUTPUT

We are striving to minimize
use of energy and resources
as much as possible.

5 . Thorough self-management
Hold regular internal and external audits and work to bethorough with self-management.

2. Reducing environmental impact

Improve understanding and awareness among employeesof the Itoham Yonekyu Group Environmental Philosophy
through internal and external environmental training andworkplace communication activities.

Promote recycling of waste and work to respond to theformation of a cyclical society and to reduce the environmental
impact, while also saving energy, conserving resources, andreducing the release of waste, materials that lead to global
warming, and ozone-depleting substances.

awareness

7 . Coexistence with society

3. Preserving biodiversity

Coexist with society through conversations with society andparticipation in environmental preservation activities.

Promote activities to preserve forests, rivers, and the naturalenvironment and work to preserve biodiversity.

8 . Disclosure of environmental information

4. Continually improving environmental

Disclose Itoham Yonekyu Group information related to theenvironment in an appropriate manner.

preservation activities

Define environmental targets in consideration of effects on
the environment and continue to improve environmental
preservation through regular review.

27

6 . Environmental training and raising

Itoham Yonekyu Group Integrated Report 2022

Business activities

Emissions to the atmosphereElectricity・ ・・・・・・・・・・・・434,616 MWh[Research and development]

Greenhouse gases (converted to CO )FuelCity gas・・・・・・・・・・・ 26,819,000 m3
Coal・ ・・・・・・・・・・・・・・・・・・・・・・・・ 11,795 t
Crude oil A・・・・・・・・・・・・・・・ 10,092 kl
LPG (liquid petroleum gas)・ ・・・・・・・ 5,243 t
LNG (liquid natural gas)・・・・・・・・・・・ 2,839 t
Kerosene・・・・・・・・・・・・・・・・・・・・・・・ 288 kl
Automobile fuelGasoline・・・・・・・・・・・・・・・・・・・・・・・・ 704 kl
Diesel・・・・・・・・・・・・・・・・・・・・・・・・ 3,104 kl
Purchased steam・ ・・・・・・・・・・・・ 281 GJ
Purchased warm water・・・・・・ 745 GJ
Irrigation water・・・・・ 11,996,000 m3

Amount of assets used
Raw materials・ ・・・・・・・・・・ 617,579 t[Production]
Amount of production
・・・・・・・・・・・・・・・・・・・・・・・・・・・・

682,054 t[Shipping]
Distribution bases
Sales bases

2・・・・・・・・・・・・・・・・・・・・・・・・・・

370,878 t-CO2

Emissions to water areas

Financial and Corporate Data

1 . Compliance with laws and regulations
Comply with Japanese and international laws, regulations,decrees, and agreements related to the environment, define
self-management standards, and commit to environmental
preservation activities.

Amount of energy used

Basis for Growth

We are striving to minimize
emissions due to businessactivities as much as
possible.

Environmental Code of Conduct
The Group operates in compliance with the following Environmental Code of Conduct to put the Itoham Yonekyu Group
Philosophy and Environmental Philosophy into practice.

Vision and Strategy

Our business activities exert various influences on the environment, such as through greenhouse gas emissions. To grasp these
influences and increase the effects of our environmental preservation activities, we have created and operate an environmental
management system at our main production bases.

Environmental audits are carried out at each office to prevent
environmental contamination and accidents and to further
increase the level of our environmental preservation activities.
We are also thorough in our compliance with laws andregulations by quickly responding to and modifying indicatedissues while also complying with regulation values definedin laws related to the environment and set by environmental
preservation associations.
In addition, we hold regular training at each office as an
emergency response measure to reduce contamination andprevent the spread of effects by assuming sudden accidents
that cause the leakage of wastewater, heavy oil, chemicals, orother spillages that result in environmental contamination. This

Introduction

At Itoham Yonekyu Group, we are aware that protecting our planet’s
environment is one of the most important global issues, and we aretaking action to realize a sustainable society by considering theenvironment in our business activities. In particular, climate change
due to global warming is severely impacting our lifestyles andcorporate activities, resulting in more intense natural disasters anddecreases in crop output. We are working on initiatives in order tocontribute to solving these issues.

Emissions・・・・・・・・・・・・ 7,114,000 m3

Emission of waste
Emissions・・・・・・・・・・・・・・・・・・・ 69,011 t
Amount recycled・・・・・・・・・ 63,964 t
Recycle rate・・・・・・・・・・・・・・・・・・・・ 92.7 %Business partners (store)

Customers

Target: Itoham Yonekyu Holdings and its subsidiary companies
are included in the calculation (includes 100% ofemissions and usage amount of subsidiaries in calculation)

Procurement28Basis for
GrowthE

Environmental Initiatives

Reducing Greenhouse Gas Emissions
Reduction to Half by FY2030 (Compared to FY2016)
annually and 3% reduction in three years (compared to
FY2018).
In order to further promote reduction of greenhouse gas
emissions in the future, in May 2022, we formulated targetsof halving greenhouse gas emissions by FY2030 (comparedto FY2016), and achieving net zero by FY2050 for all Group
companies. Furthermore, we are establishing and executing
our reduction roadmap in order to reach these achievements in
FY2030.

• Trends in greenhouse gas emissions (Scope 1, 2) and reduction targets(t-CO2 )400,000

381,506

181,671

178,094

386,909180,886

372,802

169,726

378,814165,0200

One of our Group’s food waste recycling activities is theinitiative at the Yonekyu Eco Project Center. At the Yonekyu
Eco Project Center, we recycle food waste produced at ourown factories and by our partners, producing about 500 tonsof quality fertilizer annually. This fertilizer is used for a variety of
purposes, such as at contracted farms, and helps to reduce
our environmental impact.

Target: Itoham Yonekyu Holdings and its
subsidiary companies are included in thecalculation (includes 100% of emissions andusage amount of subsidiaries in calculation)■ Scope 1 ■ Scope 2

370,878

Cogeneration
system deployed at
the Asakusa Ham’sKanto Plant

Reduction by half

160,605(compared to FY2016)

200,000

100,000

Starting February 2022, we have deployed a cogeneration
system, which is an energy-efficient electricity generation
facility that can collect and use emitted heat, at the Asakusa
Ham’s Kanto Plant.
By reducing the operating time of current steam boilers, we
expect to reduce CO2 emissions by 300 tons annually. We aregiving consideration to deploying these at other plants in orderto reduce CO2 emissions.

Visual appearance of Yonekyu
Eco Project Center and fertilizer
mixingVision and Strategy

300,000

375,982

Food Waste Recycling

Introduction

In order to respond to environmental issues, including
climate change, on a consolidated basis, our Group acquires
environmental data every year from Group companies.
Regarding reductions in greenhouse gas emissions (Scope1, 2), which are a global issue, we are formulating targets forevery three years for domestic Group companies, and striving
to meet them. In FY2021, we achieved a 6% reduction bysystematically updating to highly efficient equipment andfacilities in production plants and deploying circulatory facilities
to meet our targets of 1% reduction per unit production

Deployment of a Cogeneration System

Preserving Biodiversity
194,3112017

206,0232018

203,076

2019

213,794

210,273

2020

2021

187,9912030 (target)

Net zero

2050 (target)

Biodiversity Restoration Project(FY)

Response to TCFD Recommendations
TCFD Recommendation Initiatives
strategies and response measures at Sustainability Committee
meetings, and had them approved by the Board of Directors.
The content of those proceedings is disclosed on our website,in accordance with TCFD recommendations. Starting in
FY2022, we will implement more concrete impact analysis on
our business, and disclose the results as well as the progress
towards FY2030 targets.
Clickhere for “TCFD recommendation initiatives” (Japanese only).

*An acre is 4,046.9 m

Cluster of plants on the
FIVE STAR farm area

Financial and Corporate Data

The Group is working to strengthen information disclosure
regarding the risks and opportunities related to climate change
in adherence with the recommendations of TCFD (Task Forceon Climate-related Financial Disclosures), which was establishedby the FSB (Financial Stability Board) upon request by G20.
In FY2021, we qualitatively analyzed and evaluated therisks and opportunities related to climate change, discussed

Biological diversity is an important factor in the prosperity of an
ecosystem. There are many rare plants facing extinction in the
FIVE STAR farm area owned by ANZCO. We have teamed up
with Forest and Bird and the QEII Trust to protect these rare
plants on 20 acres* of land. A cluster of kowhai trees (trees
in the Fabaceae family native to New Zealand) remains in the
Ashburton area of this land, and the trees are estimated to be
100 years old. We will continue to work with local conservationgroups to preserve existing ecosystems and promote tree
planting activities.

Basis for Growth2016

203,412

Seeds of rare varieties aregathered and protected withthe goal of propagation

2

Water Resources
Improving and Optimizing Water Usage

Initiatives to Reduce Environmental Impact
Deploying Boilers that Can Use 100% Recycled Cooking Oil Waste
Starting in April, 2021, we deployed boilers that use 100% cooking oil waste generated in
production plants, etc., as fuel in the Tohoku Plant. By using plant-derived cooking oil waste
instead of the crude oil used conventionally, we reduced CO2 emissions by 1,200 tons annually.
We are giving consideration to deploying these at other plants in order to reduce CO2 emissions.

ANZCO puts an emphasis on water use and optimization at
its factories. The Rangitikei factory has reduced its water use
by 40% compared to previous years with a site-wide focus
on identifying where it could change practices and processes.
This significant water reduction has had many benefits acrossthe entire site, but specifically decreased pressure on thewastewater processing system.

An example of water use
at Rangitikei factory
Cooking oil waste boiler used in the Tohoku Plant

29

Itoham Yonekyu Group Integrated Report 2022

30

Basis for
GrowthS

Promoting Diversity

Social Initiatives

For the realization of “creating a workplace where each
employee can actively participate,” which is one of ourmateriality issues, we are building an environment in which
employees can work, regardless of race, gender, age,

Basic Stance

Related Materiality

implementation of theme- and issue-specific trainings,
knowledge acquisition through e-learning, as well as anindependent learning (self-development).
Training was implemented 69 times in FY2021, excluding
self-development and division-specific training, which wasa decrease relative to FY2020. However, we were able tomaintain almost equivalent results as when meeting in person
by utilizing online meetings.

Off-JT
Theme- andissue-specific training

Self-development

Division-specifictraining

For mentors:
Training to enhance
educational guidance ability

Youngemployees

Follow-up training for young employees(first, second-year college graduates; first,
second, third-year high school graduates)
New employee training(college graduates, high school graduates)(Production Division, 40s, Male)It was an opportunity to gain
greater awareness of the changing
times and value systems ofsubordinates and to rethink myview of education and guidance.

“Training for newly appointed
directors and chiefs” class(Corporate Division, 30s, Male)
I realized that as a leader in myorganization, I will have to work on
training personnel and be effective
as a team, not just as an individual
moving forward.

FY2021 Initiatives in Education and Training for the Future
Continuing from FY2020, we are executing training
focused around online programs in order to implement risk
countermeasures against COVID-19 infection. We wereable to establish operation methods as effective as faceto-face training through implementation of group work only
possible online. As for FY2021, as the relationship between
individuals and organizations changed and workstyles
31

Itoham Yonekyu Group Integrated Report 2022

and values diversified, we implemented an “organization
ability strengthening program” to support improvement in
the management ability of our managers. Additionally, we
implemented “evaluator education” through e-learning so thatthe managers can review and confirm their evaluation points on
their own time. In FY2022, we are also implementing training
related to sustainability.

Formulation of a Quality Policy• Quality Assurance System Diagram

In order to deliver safe, reliable, high-quality products
to our customers based on our Code of Conduct,
we have integrated the quality policies of Itoham and
Yonekyu, which have traditionally been separate, andformulated a Group Quality Policy. We expect eachand every employee thinking “customer comes first”
as we aim for quality that customers can safely enjoy.

Itoham Yonekyu Holdings
Management

CustomerFeedback

Business Division

Quality
Assurance
Division

Quality Control Division

Quality Assurance System
The Group carries out inspections and audits, suchas for management of allergens and microbes forsafety and, naturally, legal reasons, as well as fortraceability of raw materials and food defense, tosee if products and services meet the Group’s own
standards at each stage of the process, from raw
material procurement to production, processing,logistics, and sales, including outside suppliers.
We strive to enhance our level of quality control
at each of our facilities by offering suggestions andinformation for daily improvement through theseactions and through daily communication.

Hygiene Management
Specification and Label
ChecksItoham Group
OutsidePartner
Factories

Logistics
and
Sales

Our
PlantsCustomer
SupportCenterAudit

Yonekyu Group
Logistics
and
Sales

Financial and Corporate Data

Training for newly appointed senior staff

VOICE“Manager training” class

Workplace training

Mid-career
employees

Training for newly appointed directors
and chiefs

Distance learning

Basic management training

Evaluator education*e-Learning

Obtaining qualifications

Training for newly appointed managers
Outside schools

Sectionmanager levelJob-specific training(various skills in production, operations, planning, sales, etc.)

Divisionlevel
For managers: Program forstronger organization ability(manager training)

OJT

Quality Initiatives

Basis for Growth• FY2021 Training System Diagram

Vision and Strategy

The Group’s Personnel Training

an activity for the health and safety of each and every one of
our employees, we implement danger notification training,
and raising prior awareness of countermeasures and risks byparticipation in close-call reporting, as we aim to achieve awork environment where employees can be proactive.
With regards to health maintenance, we have established asafety net call center, which is available to all Group employees
and their family members 24 hours a day, in addition toregular health exams and stress checks, such that we havea system which is available for consultation at any time. Also,
we implement meetings between employees and occupational
physicians about long working hours, overwork, mental health,etc., as we work on countermeasures intended to prevent
health problems throughout the entire Group.

Introduction

Human Resources Management

Job-class-specific training

Occupational Health and Safety
In order to realize a work environment in which we can growsustainably along with employees, we engage in initiatives thatgive consideration to safety, health, and health maintenanceof our employees. While we comply with relevant laws andregulations, such as the Industrial Safety and Health Act, forcreating a safe work environment, we are moving forward ina way that adheres to the basic stance of our occupational
health and safety management system.
Regarding health and safety, we are moving forward withestablishment of Health and Safety Committees in each officeand sharing information. In particular, regarding the major issue
of preventing work accidents, we are strategically executing
safety education at the time of entering the company, regular
workplace safety education thereafter, daily workplacesurveillance and workplace accident reports. In addition, as

We deliver safe, reliable products to customers through a full quality
assurance system to give them healthy, rich diets, while also communicating
the joy and fun of eating. As a good corporate citizen, we value our
coexistence with society and fulfill our social responsibilities as a corporation.
Also, we employ a comprehensive training system for employees, and engage
in initiatives that give consideration to safety, health, and work-life balance, as
we aim to realize a work environment in which we can grow sustainably with
our employees.

The Group develops people who can think on their own andtake action with an attitude of taking on challenges, aiming torealize both the development of a corporate culture that praises
taking on challenges to expand corporate value and personal
growth through work.
As we aim to link input and output through Off-JT training
and OJT focusing on on-site practice, we are constructing
an education structure composed of a system for supporting

nationality, or presence of a disability. We foster an atmosphereof respecting and sharing the diverse perspectives and valuesof employees, and aiming for sustainable growth as we
promote diversity.

Our
Plants

Initiatives to Enhance Quality

Initiatives for Easy-to-understand Labels

The Production Division, Sales and Product Planning Division,
Quality Assurance Division, and Customer Support hold regularmeetings and work to improve products so that valuable
customer opinions can be reflected in our products. We also
hold training sessions on quality, work to improve employees’knowledge and awareness, and strive for a stable supply of
quality products.

Food labels contain extremely important information forcustomers. We are working to create easy-to-understandlabeling and package design by establishing our Group’s own
labeling standards based on laws, regulations and customer
feedback we have received. We also hold internal training
sessions on relevant laws and regulations, working to improve
employees’ knowledge.

32Basis for
GrowthS* T HE INCLUSION OF ITOHAM YONEKYU HOLDINGS INC. IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS,SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF
ITOHAM YONEKYU HOLDINGS INC. BY MSCI OR ANY OF ITS AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTYOF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

Social Initiatives

Aiming for Customer Satisfaction
Listening, Sharing, and Improving Products

We regularly check how customers evaluate the responses of
Customer Support and the Customer Response Division throughsurveys. We work to discover and improve issues, and we also
work to improve the quality of our responses to customers.

Customer Feedback

Gotemba Kogen Momo Ham

The mouth grip is small so it’s hard to open.

Yonekyu

Enlarged the“mouth” so it’seasier to open.

Customer Feedback

Zero-Sugar Salad Chicken 3 pieces

The nutrition information label says “per pack,”
but does that mean one piece or three pieces?

ItohamChanged the label to read “per piece”
in order to make it clear that the
information is for one piece.

Overseas Partner Factories

We have formulated and disclosed our Procurement Policy inorder to execute responsible procurement activities with all of ourpartners and promote sustainable procurement through the entire
supply chain.
Clickhere for our “Procurement Policy” (Japanese only).

We visit production facilities outside Japan as necessary tocheck to see that product standards, production systems,
and other local laws and regulations are being followed
and that matters are managed in a way that aligns with
our Group standards. We also visit production facilities incountries where we have employees stationed, as well as
production facilities in major producing countries, and we arebuilding relationships of trust by deepening communicationthat allows for speedy responses.
When a defect in a product is found, we quickly offer
feedback to the production site, request improvements,
and check to ensure it has been improved. Inspections
for residual medications, etc. are carried out on our own
within Japan, in addition to the government-run monitoring
inspections when passing through customs.

Outside Partner Factories
In order to respond to the various product needs of ourcustomers, we obtain products, particularly meat products,
but also dairy products, noodles, and dressings from partner
factories in Japan and overseas. Just like with products produced
in-house, we perform thorough quality management of theseprocured products in collaboration with outside partner factories,
so we can deliver safe, reliable products to customers.
At the Quality Management Division, which is in charge ofoutside partner factories, we perform strict checks in accordancewith internal regulations, such as whether product design
standards pose production problems or whether there are issues
with product labeling or manufacturing stages. Additionally, we
engage in regular plant audits and spot checks at outside partner
factories based on our Group’s quality management standards.
Furthermore, the Quality Assurance Division also performs regularinspections.

33

Itoham Yonekyu Group Integrated Report 2022

Logistics
The job of storing and shipping products that have left thefactory plays an important role in making secure deliveries tocustomers with the product quality maintained as is. This is
managed based on the Group’s own standards and delicious
products are delivered to customers at the appropriate
temperatures.

In November, 2021, Asakusa Ham set up a refrigerated
vending machine in front of their main office at Taito City,
Tokyo, where you can buy standard sausage or grilled pork,
or uncompromisingly-made truffle prosciutto. Automatedand easy-to-use even under the COVID-19 pandemic, it isestablished as a direct sales location where customers canconveniently make purchases
24 hours a day. By placing thisvending machine as a moreconvenient means for selling
products, we aim to further
enhance regional links andincrease new points of contact
with customers, as well as
enhance awareness.

Every year, Yonekyu performs lectures for young students atelementary and middle schools in the city of Numazu, Shizuoka
Prefecture. Participating as the Numazu’s Office for Promotionof Joint Male-Female Participation, we implement these lectureswith the goal of fully spreading awareness of male-female joint
participation from a young age, such that each person candevelop their individuality and talents without regard for genderand choose from a wide range of dreams and paths in the
future, whilelearning about
the importanceof awareness ofgender equality
and respect forhuman rights.

Refrigerated vending machine for easypurchasing 24 hours a day

Visual appearance ofoccupational lecture

Submitting a Shop in Social Application“Gokko Land”

Submitted Panel to Nishinomiya City’s OriginalEnvironmental Learning Business

In July, 2021, Itoham submitted a new pavilion “Let’s makebreakfast!” to the child focused social application “Gokko
Land,” operated by KidsStar Inc. Targeting toddlers toyounger elementary school students, it is a simulation in whichapplication game users cook sausage and dress ham to makebreakfast, so they learn the values of breakfast and eating
a balanced diet from the perspective of dietary education.
We hope that kids and everyone in their families can enjoy it
and utilize it in their actual dietary
lifestyles.

Itoham is certified by Nishinomiya City, Hyogo Prefecture,
as a “Partnership Program with Environmental Learning City
Nishinomiya.” In February, 2022, an environmental panel
exhibit was held as part of a memorial event for the 30 years
since the Earth Watching Club (EWC) was established, which
is Nishinomiya City’s original environmental learning business.
As environmental issues, particularly SDGs, have beenemphasized in recent
years, we collaborated
on the exhibit as anopportunity for ourcompany’s efforts to be
more widely and more
intimately known.

They can interactively learn about social
structures

Financial and Corporate Data

Formulation of a Procurement Policy

Performing Vocational Lectures

Basis for Growth

Supply Chain Management

Initiating Direct Sales through “Dohiemon,”a Refrigerated Vending Machine

Vision and Strategy

Improvements in Response Quality• Examples of Product Improvement

Introduction

We receive a variety of questions from customers each day
regarding product characteristics, how to eat or cook certain
products, product storage, as well as questions regarding
product nutritional information and allergens. We accept thesequestions and opinions as valuable assets, listen to them in aserious manner, and aim to provide information that is easy tounderstand.
We also strive to improve our services so that customers
always feel a sense of safety, focusing on honest and speedy
responses, while also sharing information internally about thekinds of things we hear from customers and what kinds of
responses will lead to satisfaction.
Furthermore, we take and examine customer comments
about improvement requests for our products, and this leads tothe creation of even better products.

Contributing to Local Communities

Panel exhibit of our activities

Shareholder Engagement
Regarding company information relevant to investor decisions
for all shareholder and investors, including our management
policy, initiatives for sustainable growth and corporate valueenhancement, we are implementing timely, proper, andcontinuous disclosure. Through two-way communication, suchas the general meeting of the shareholders, financial results
briefing, and IR meetings, we are establishing a constructive
dialogue, and working to gain the understanding and trust of allshareholders and investors.
For details, please see “IR Information” on our website (Japanese only)

External Evaluation of Our Group
Starting in December, 2018, our Group was selected as arepresentative corporation with excellent gender diversity out of
the top 500 market capitalization companies in Japan for the“MSCI Japan Empowering Women Index (WIN).” Our gender
diversity score was 7.2.
*

Click

34

Basis for
GrowthG

Governance
Board of Directors

Basic Policy on Corporate Governance

Related Materiality

The corporate governance at the Itoham Yonekyu Group is based on our Group
Philosophy, Vision, and Code of Conduct. With the aim to solve social issues throughbusiness and to gain first from stakeholders, we have set up a highly transparent
system of management organization that enhances overall Group monitoring,supervising, and other internal control functions and strive to make accurate businessdecisions and take fast action. Based on this fundamental view, we have establishedthe Itoham Yonekyu Holdings Group Basic Policy on Corporate Governance, which laysout a framework for corporate governance to improve our medium- to long-term
corporate value.

the regulations on decision-making authority.

Group Executive Committee
The Group Executive Committee is established to decide
important issues at the executive level and to discuss theissues the Board decides.
The Committee comprises directors (excluding outside
directors), auditors, and others designated by the chairpersonof the Committee. It holds regular meetings twice per month,and also special meetings are held as necessary. At themeetings, the Committee decides, reports, and discusses theGroup’s managerial strategies and important matters.

Introduction

The Board of Directors consists of six directors, of which two
are outside directors. The Board makes decisions on theGroup’s management policies, strategies, and other essential
management matters, and supervises the execution of duties
at its regular monthly meetings and at extraordinary board
meetings which are held as necessary.
In FY2021, fourteen meetings were held, and theattendance rate of directors and auditors was 100%.
However, to ensure prompt decision-making regarding
business execution that does not require decisions by
the Board of Directors, it delegates authority to the Group
Executive Committee and executive officers in accordance with

Voluntarily Established Committees

Corporate Governance System
As a company with a board of company auditors, we haveappointed several outside directors and outside auditors. The
outside directors seek to strengthen the Board of Directors’supervisory function by utilizing their expertise and extensive
experience in their respective fields to make management
decisions from an independent standpoint without any conflictsof interest with general shareholders. The outside auditors
are believed to make a significant contribution to our effective
corporate governance by ensuring the independence of theaudit system and by expressing their audit views from an
objective standpoint.

General Shareholders Meeting
Appointment / Dismissal

Appointment / Dismissal

Appointment / Dismissal
Reporting

Nomination
Advisory Committee

Internal Directors (4)Outside Auditors (2)ReportingAppointment / Dismissal/ Supervision

Group Executive
Committee

Business Execution
Reporting

Audit & Supervisory
Board (4 members)
Internal Auditors (2)Outside Directors (2)Sustainability
Committee
Compliance Committee

Auditing

Guidance

President

Reporting

Itoham Yonekyu Group Integrated Report 2022

Cooperation

Accounting
AuditsLegal andCompliance Divisions

Reporting

Quality Assurance Division
Executive
Officers

Reporting

Supervision / Instruction

Business Divisions

35

Cooperation

Decision on appointment /Reappointment policy
Decision on accounting audit
equivalency

Internal Auditing Office

Monitoring

Cooperation

Established to strengthen the corporate governance system
and its operation by increasing the effectiveness of the Board of
Directors. The committee consists of three members, including
two independent outside directors. As an advisory body to theBoard of Directors, this Committee reviews the effectivenessof the Board of Directors and makes recommendations andproposals to the Board of Directors.

Matters to be reviewed
1.Matters related to the appointment and dismissal of directors,
auditors, and executive officers for Itoham Foods Inc. andYonekyu Corporation (“the Group” as used in this part)
2.M atters related to basic policies on the appointment anddismissal of the Group directors, auditors, and executive
officers, and the establishment, revision, and abolishmentof regulations and procedures
3.O ther matters deemed necessary by the Committee
related to the appointment of director and auditor
candidates and the dismissal of directors and auditors

Compensation Advisory Committee
Auditing and Monitoring

Governance Committee

Board of Directors(6 members)

Established to ensure transparency and objectivity in the election
process for director, auditor, and executive officer candidates.
The Committee consists of three members, including two
independent outside directors. As an advisory body to theBoard of Directors, this Committee reviews, recommends, andproposes the following matters to the Board of Directors.

Established to ensure transparency and objectivity in thedecision process for compensation for directors and executive
officers. The Committee consists of three members, including
two independent outside directors. As an advisory body to theBoard of Directors, this Committee reviews, recommends, andproposes the following matters to the Board of Directors.

Sustainability Committee
Established to promote Group-wide sustainability initiatives
to achieve both the realization of a sustainable society andthe sustainable growth of our Group through the resolution ofsocial and environmental issues. This Committee consists offive members, including one independent outside director. As
an advisory body to the Board of Directors, this Committee
reviews, recommends, and proposes the following matters to
the Board of Directors.
Matters to be reviewed
1.P roposal of basic plans and strategies for the basic policy
on sustainability management and promotion activities
2.E stablishment of materiality (priority issues) for thepromotion of sustainability management
3.E stablishment of KPIs for materiality and monitoring of
their progress

Financial and Corporate Data

Reporting
Recommendations /Proposals

Accounting Auditor

Supervision

Compensation
Advisory Committee

Governance Committee

Basis for Growth• Corporate Governance System Diagram (as of September 30, 2022)

Nomination Advisory Committee

Vision and Strategy

Corporate GovernanceMatters to be reviewed
1.M atters related to the Officer Compensation System(basic compensation, performance-based compensation,
shares with restrictions on transfer, etc.) for directors
and executive officers of Itoham Foods Inc. and Yonekyu
Corporation. (“the Group” as used in this part)
2.M atters related to performance (managerial indicators,
target values, fluctuation range, etc.) of the Group
directors and executive officers
3.Matters related to compensation standards (compared tocompetitors) for the Group directors and executive officers

36Basis for
GrowthG

GovernanceEvaluations on the Effectiveness of the Board of Directors

Compensation for Directors and Officers

Every October, we hold a self-evaluation survey targeting all
directors and auditors to have the Board of Directors evaluate
for themselves whether or not they are functioning normallyin the way that was originally established, to increase theireffectiveness, and to create an appropriate governance system
for the Group. The results of this survey are discussed by theGovernance Committee and the Board of Directors to evaluate
the effectiveness of the Board of Directors.
In the effectiveness evaluation in FY2021, the survey
consisted of 14 questions on the following seven topics: 1) the
Structure of the Board of Directors, 2) the administration of theBoard of Directors, 3) discussions of the Board of Directors,4) supervision by the Board of Directors, 5) appointment anddismissal of managers, 6) discussions with shareholders,and 7) comments. Consequently, it was determined that theeffectiveness of the Board of Directors was generally secured

The basic policy on the compensation system for directors and officers was determined as follows.

Introduction of an executive officer
systemEstablishment of Sustainability
Committee

Establishment of Group Philosophy,
Vision, and Code of Conduct

Establishment of Compliance
Committee

Establishment of Basic Policy on
Sustainability

Compensation for full-time directors and officers is made up
of basic compensation, performance-based compensation
as a short-term incentive, and share-based compensation(shares with restrictions on transfer) as a medium- to long-term
motivation.
The ratio of basic compensation to performance-based
compensation to share-based compensation is set at roughly
60:25:15. We established this ratio based on an understandingof our financial situation and after comparing and investigatingcompensation ratios and standards for each role at many othercompanies in the same industry and with the same scale so
as to ensure objectivity and validity in compensation ratios andstandard general compensation for each role.
Moreover, compensation for outside directors consistsof basic compensation only, which is not connected to theirbusiness performance, as their main roles are supervising andmaking management recommendations from an independentand objective position.
The maximum amount of compensation is determinedby the resolution of the General Meeting of Shareholders.
However, the overall executive compensation system, including
compensation ratio, individual compensation standards, andits calculation and payment methods, is determined by the
Board of Directors following deliberation by the Compensation
Advisory Committee, in which the majority of members are
independent outside directors.
Compensation for auditors is determined throughdiscussions between auditors. It also consists of basic
compensation only, which is not connected to their businessperformance to ensure a high degree of independence.

Basis for Growth

Holding company system
Establishment of holding company
through the merger of Itoham Foods
Inc. and Yonekyu Corporation

Overview of the Compensation System

Vision and Strategy

Initiatives to Strengthen the Corporate Governance System
and Improve Its Effectiveness

Basic Policy
1.I t will function as a sound incentive for sustainable business expansion and corporate value improvement by sharing value withshareholders, employees, and other stakeholders.
2.I t will be a compensation system that responds to a suitable compensation standard based on the field and scale of business,
responsibility for each role, and role and results in order to employ and keep superior personnel.
3.It will be determined through a process that ensures objectivity and rationality to maintain accountability with stakeholders.

Introduction

as efforts to address the issues identified in the effectivenessevaluation in FY2020 had been progressing.
Some of the issues identified in the effectivenessevaluation in FY2020 that we addressed are the revision of theBoard of Directors’ composition (more than one-third of themembers should be independent outside directors), formationof a Sustainability Committee to promote sustainability
management, the establishment of IT Management Office tofacilitate digital transformation (DX).
We have decided to make further improvements in specificsustainability initiatives, disclosures, and the development ofmanagement personnel.
We will continue to work towards improving theeffectiveness of the Board of Directors based on the results of
the FY2021 evaluation.

FY2021
System of having two independent
outside directors

FY2016

Female directors (2)Establishment of GovernanceCommittee

Female director (1)Establishment of Nomination Advisory
Committee

Establishment of Managerial
Personnel Development Policy

Establishment of Compensation
Advisory Committee

Evaluations on the effectiveness of
the Board of Directors begins

Introduction of performance-based
compensation

Revision of the Basic Policy on
Corporate Governance

Establishment of Basic Policy on
Corporate Governance

Revision of the Cross-shareholding
Policy Management Guidelines

Revision of the Basic Policy on
Corporate Governance

Cross-shareholdingStandards and Policies for the Classification of
Investment Stock
We consider “stocks owned for net investment purposes” tobe those owned exclusively for the purpose of gaining profit
through dividends or changes in stock price. All other stocks
are considered to be “stocks owned for other reasons” (“crossshareholding”).
All stocks owned by the Group are those of its subsidiaries
or affiliate companies. We do not own any stocks for net
investment or strategical purposes.

Basic Policy on Cross-shareholding
Our subsidiaries own cross-shareholdings. However, our basic
policy does not allow the ownership of cross-shareholdings
except for cases where it meets certain standards and isdetermined to assist in maintaining and developing business
transactions.
At the end of each fiscal year, we quickly check to see if
each individual brand meets standards, the results of which areinvestigated by the Executive Committee and reported to theBoard of Directors.

Financial and Corporate Data

FY2018The ratio of independent outside
directors on the Board of Directors
is 1/3

FY2017
Establishment of Cross-shareholding
Policy Management Guidelines

37

Itoham Yonekyu Group Integrated Report 2022

FY2020Establishment of Basic Policy on
Officer Compensation

38

Basis for
GrowthG

Governance
Both attendances at Board of Directors meetings and Audit & Supervisory Board meetings are for FY2021.

Directors, Auditors and Executive Officers (as of September 30, 2022)
Directors

Isao Miyashita
President and Chief Executive Officer
Director, Itoham Foods Inc.
Director, YONEKYU CORPORATION

Takamasa Wakaki
Director, Managing Executive Officer
Senior General Manager COO – Meat Business Div.
Executive Director, Itoham Foods Inc.
Director, YONEKYU CORPORATION

Koichi Ito
Director, Managing Executive Officer
Senior General Manager COO –Processed Foods Business Div.
Chief Executive Officer, Itoham Foods Inc.
Director, YONEKYU CORPORATION

Attendance at Board of Directors Meetings: － (－%)

Director
Managing Executive Officer
Chief Financial Officer
Chief Compliance Officer
Director, Itoham Foods Inc.
Director, YONEKYU CORPORATION

Attendance at Board of Directors Meetings: － (－%)

Aya ItoDirector (Outside)
Independent Director
Significant Concurrent Positions
Partner, Sustainability Transformation Department,
Recruit Holdings Co., Ltd.
President and CEO, Sophiamedi Corp.
Outside Director, eole, Inc.
Outside Director, ewoman, Inc.
Attendance at Board of Directors Meetings:
14 out of 14 times (100%)

Yukie Osaka
Director (Outside)
Independent Director
Significant Concurrent Positions
Outside Director, SAKURA internet Inc.
Chairman, General Incorporated
Association Customer Success Promotion Association
Attendance at Board of Directors Meetings:
11 out of 11 times (100%)39

Itoham Yonekyu Group Integrated Report 2022

Attendance at Board of Directors Meetings:
14 out of 14 times (100%)
Attendance at Audit & Supervisory Board
Meetings: 12 out of 12 times (100%)

Shin Takahashi
Standing Auditor
Auditor, Itoham Foods Inc.
Auditor, YONEKYU CORPORATION
Attendance at Board of Directors Meetings:
11 out of 11 times (100%)
Attendance at Audit & Supervisory Board
Meetings: 10 out of 10 times (100%)

With experience in the meat business andinternational business, he was appointed as an
director in June 2021. He is responsible foroverseeing the Group’s meat business. He is
promoting initiatives to increase corporate value
by restructuring the meat business andimplementing strategies for growth.

Ichiro Ichikawa
Auditor (Outside)
Independent Director
Significant Concurrent Positions
Chief Executive Officer, SWEAT CAPITAL Inc.
Outside Auditor, UNIMEDIA INC.
Outside Auditor, Mediagene Inc.

He is familiar with the Group’s meat, processed
food, and overseas business through his
experience as a managing director of Itoham,
Yonekyu, and overseas Group companies. In
June 2022, he was appointed as a director. He is
responsible for overseeing the Group’s
processed food business. He promotes initiatives
to enhance corporate value by restructuring theprocessed food business and implementing
strategies for growth.
He was appointed as a director in June 2022,
bringing extensive experience and deep insight
into overseas assignments and the corporate
administration field. He is responsible forsupervising the company’s Administration Divisionand the compliance of the Group. He promotes
initiatives for the Group’s sustainable growth andmedium- to long-term enhancement of corporate
value through the improvement of corporate
governance and advancement of sustainability.

She has worked as an outside director sinceJune 2018. She offers objective, expert opinions
and suggestions at meetings for the Board of
Directors, Nominating Advisory Committee,
Compensation Advisory Committee, GovernanceCommittee, and Sustainability Committee. She
contributes with her expert knowledge ofsustainability promotion and her knowledge andexperience as a corporate executive and an
outside director at publicly listed companies.

She has worked as an outside director sinceJune 2021. She offers objective, expert opinions
and suggestions at meetings for the Board of
Directors, Nominating Advisory Committee,
Compensation Advisory Committee, andGovernance Committee. She contributes withher expert knowledge as a marketing consultant,her career as a managing director with publicly
listed companies, and her knowledge andexperience as an outside director.

He has worked as a full-time auditor since June 2021. He has
knowledge and experience in financial affairs and accounting,developed through his career as the person in charge of
Accounting and Finance Department of the Group. He offers
necessary and appropriate remarks to the Board of Directors
to ensure compliance and validity in decision-making. He
audits the execution of directors’ duties with the Audit &Supervisory Board based on auditing policies and plans.

Attendance at Board of Directors Meetings:
14 out of 14 times (100%)
Attendance at Audit & Supervisory Board
Meetings: 12 out of 12 times (100%)

Kei Umebayashi
Auditor (Outside)
Independent Director
Significant Concurrent Positions
Partner, Nishimura & Asahi
Professor, Graduate School for Law and Politics,
The University of Tokyo
Attendance at Board of Directors Meetings:
14 out of 14 times (100%)
Attendance at Audit & Supervisory Board
Meetings: 12 out of 12 times (100%)

Executive
Officers

He has worked as an outside auditor since June 2019. He
has expert knowledge and experience in financial affairs
and accounting as a certified public accountant. He offers
necessary and appropriate remarks to the Board of
Directors to ensure compliance and validity in decisionmaking. He audits the execution of directors’ duties with
the Audit & Supervisory Board based on auditing policies
and plans.

He has worked as an outside auditor since June 2020. He
has gained expert knowledge in corporate legal affairs as alawyer, as well as expert knowledge and experience in crisis
management. He offers necessary and appropriate remarks
to the Board of Directors to ensure compliance and validity
in decision-making. He audits the execution of directors’
duties with the Audit & Supervisory Board based on
auditing policies and plans.

Akihisa Horiuchi

Managing Executive Officer

Chief Executive Officer, YONEKYU CORPORATION

Kazuhiko Misonou

Managing Executive Officer

Executive Chairman, ANZCO FOODS LTD.

Masayuki Yoneda

Managing Executive Officer

Deputy Chief Operating Officer – the Processed Foods Business Div.

Takeshi Koyama

Senior Executive Officer

General Manager – CEO Office, General Manager – Corporate Strategy Planning Office, General Manager – Group Logistics

Tsuyoshi Fukunishi

Senior Executive Officer

Asian Best Chicken Co., Ltd. (temporary transfer)

Yoshiyuki Ishimatsu Senior Executive Officer

Senior General Manager – Production Div., Processed Foods Business Div., General Manager – Purchasing Dept., General Manager – Central Research InstituteTomoyuki Ushimaru Senior Executive Officer

Senior General Manager – Sales Div., Processed Foods Business Div., Chief Executive Officer, Itoham Sales Inc.

Sadaki Iwama

Executive Officer

General Manager – Quality Assurance Dept.

Kouki Haruna

Executive Officer

Senior General Manager – Business Strategy Div., Processed Foods Business Div.

Akira Maeda

Executive Officer

General Manager – Accounting & Finance Dept., Administration Div.

Shinyo Tou

Executive Officer

Senior General Manager – Domestic Meat Div., Meat Business Div.

Fumihiro Kanamori

Executive Officer

Senior General Manager – Meat Process & Farm Div., Meat Business Div.

Katsumi Nozawa

Executive Officer

Deputy Senior General Manager – Administrative Div., General Manager – PMI Office

Shinji Horiuchi

Executive Officer

Chief Executive Officer, Yonekyu Kagayaki Co., Ltd.

Hiroyuki Tamai

Executive Officer

General Manager, New Business Development OfficeHirohiko Yoshino

Executive Officer

Senior General Manager – Imported Meat Div., Meat Business Div.

Takuya Hashimoto

Executive Officer

General Manager – IT Management Office, Administration Div.

Financial and Corporate Data

OutsideDirectors

Since April 2016, he has been leading the entire
Group as president and chief executive officer.
He has been promoting efficient and flexible
management through, for instance, working tobuild the Group’s business execution system andorganizational structure. He utilizes his broad
insight and wealth of experience as a corporate
executive to achieve the Group’s sustainablegrowth and enhance corporate value.

He has worked as a full-time auditor since June 2020. He
has knowledge and experience from his career as thecompany’s executive officer and as the person in charge of
Human Resources Department of the Group. He offers
necessary and appropriate remarks to the Board of Directors
to ensure compliance and validity in decision-making. He
audits the execution of directors’ duties with the Audit &Supervisory Board based on auditing policies and plans.

Basis for Growth

Hajime Ogawa

Standing Auditor
Auditor, Itoham Foods Inc.
Auditor, YONEKYU CORPORATION

Vision and Strategy

Attendance at Board of Directors Meetings:
11 out of 11 times (100%)

Yoshiro Matsuzaki

Introduction

Attendance at Board of Directors Meetings:
14 out of 14 times (100%)

Auditors

40

Basis for
GrowthG

GovernanceCompliance
Promotion System

Audit System
Accounting Audit

The Audit & Supervisory Board meets regularly once permonth. In addition to making decisions on important auditrelated matters, the Board reports on the status of audit
implementation and exchanges opinions. In FY2021, the Board
held 12 meetings, and the attendance rate of auditors was100%.
In addition to attending Board of Directors meetingsand important internal discussions, auditors carry out ample
supervision, including directly hearing about the execution ofbusiness from the Board of Directors and employees.

We have entered into an auditing agreement with KPMG AZSA
LLC for audits under the Companies Act and the Financial
Instruments and Exchange Act. Our corporate and accounting
auditors hold regular meetings for reporting and exchanging
opinions to strengthen cooperation. The regular meetings forreporting and exchange of opinions are as follows.

Internal Audit

Group Company Audits

41

Independent Outside Director Meetings

Director’s Interview

Outside directors and outside auditors regularly hold meetings
consisting solely of independent outside directors to exchange
opinions on various matters, including managerial strategy,
managerial issues, and Board of Directors topics. Twelve
meetings were held in FY2021.

Audit & Supervisory Board members and two outside directors
meet managing directors to exchange opinions and attend toother matters. In FY2021, they were held four times.

Compliance Committee
Reporting

Evaluation

Secretariat
Legal and Compliance Department
Operations / Reporting / Sharing

Compliance Supervisor Meeting

Compliance Supervisor Meeting

Compliance Promotion Committee System

The Compliance Supervisor meeting is held twice per year
to promote Group compliance under the presidency of theexecutive officer in charge of compliance. This meeting
decides the compliance policy and action plans. It also reports
and verifies matters that the Compliance Committee requests
to improve, as well as countermeasures and improvement
measures for compliance issues. In addition, it holds training
sessions by outside experts to share compliance information.

Compliance Promotion Committee members are assigned
to each Group workplace. The Committee members seek toacquire knowledge related to compliance through educationand training programs, so that they can take initiative inpromoting compliance at their workplace and ensuring that all
employees are familiar with laws, regulations, and internal rules
related to their work.

Initiatives
Training

Internal Reporting System

A compliance seminar is held once a year to increase all Group
employees’ awareness of compliance and have employees
understand the importance of compliance. We also offer
compliance seminars by outside experts as necessary,to managers on industry law and harassment prevention
depending on the role.

We have set up the Internal Consultation Hotline (Legal andCompliance Department) and the Outside Consultation Hotline(with outside lawyers) to receive consultations and internalreporting on compliance from all Group employees.
The contact information of each hotline is available in thebooklet, “Corporate Code of Ethics,” compliance cards, andthe internal portal website.
In addition, we seek to protect potential whistleblowers.
Our internal reporting regulations provide for strict confidentialityof the consultation content and prohibition of disadvantageous
treatment of thepotential whistleblower
for reporting or
consulting.

Auditor’s Visit and Inspection of Each Offices

Compliance Awareness Survey

Outside directors accompany auditors to visit office forinspection. In FY2021, two outside directors inspected a totalof six offices.

A Compliance Awareness Survey is conducted for all Group
employees once per year to understand the level of awarenessof compliance in each workplace and to hear employees’
honest opinions on compliance. Survey results and employee
opinions lead to improvements in the workplace, as they are
offered as feedback to all employees, including management.
If problems are found, improvements are made and used incompliance action for the next fiscal year.

Itoham Yonekyu Group Integrated Report 2022

Reporting

Financial and Corporate Data

Collaboration between Outside Directors and Auditors

The Compliance Committee meets once a month. The
Committee consists of the chief financial officer, the generalmanager of the Human Resources Department, the generalmanager of the Quality Assurance Department, and othermembers appointed by the chief financial officer. The
chairperson is selected from the members by a resolution of
the Board of Directors.
To strengthen the Group’s internal control functions
and permanently enhance corporate value, the Committee
regularly checks the risk management status regarding foodsafety, compliance, business law, litigation, and disputes, andindependently evaluates the operational status.

Board of Directors

Basis for GrowthStanding auditors also serve as auditors of important
subsidiaries. They attend such subsidiaries’ key meetings,
including Board of Directors’ meetings, to audit the decisionmaking process on important matters and the status of thedevelopment and operation of internal control systems.
We regularly hold liaison meetings of the Group Company
Auditors to improve the level of auditors and standardize audits
by providing accounting and legal training courses as well as
revising and explaining the auditors’ manual. The meetings also
help share information and exchange opinions.

Compliance Committee

Promotion System Diagram• C(asomplianceof September 30, 2022)

Vision and Strategy

The company has established the Audit Office as anindependent organization. This office conducts internal audits
primarily for the operation of business divisions, including theGroup companies, based on the internal audit regulations
and annual audit plans. It also performs additional audits forparticular purposes as necessary.
Standing auditors attend the Audit Office’s report meetings
to confirm audit findings and instructions from management.
Outside auditors receive reports on audit results directly fromthe Audit Office. They are also provided with information on
improvements made in response to audit findings by standing
auditors at the Audit & Supervisory Board meetings.

Regular meetings for reporting and exchange of opinions● Audit results summary report meeting (once a year)● Q uarterly review results summary report meetings (threetimes a year)● A ccounting auditors’ report meeting (attending the reportmeeting to the president) (once a year)● Auditors’ discussion (once a year)● Opinion exchange meeting on Key Audit Matters (KAM)● T hree-way (Auditors, Accounting Auditors, and Audit
Office) audit liaison meeting (once a year)

The Itoham Yonekyu Group sets fair and transparent conductthat puts compliance first as a compliance policy. The code ofcompliance behaviors, which shows the evaluation standards
that employees should follow, was compiled into a Corporate
Code of Ethics booklet and distributed to every employee. We
are working to spread information through training, etc.

Introduction

Audit & Supervisory Board

42

Basis for
GrowthG

Financial and Corporate Data

Governance

Financial Data

Risk Management■ Major Financial Trends(millions of yen)

FY2017

Risk Management System

Risks

Business and Other Risks, and Countermeasures
Critical risks include rising global grain prices, energy costs,
the spread of livestock epidemics, and the prolonged impact of
COVID-19.
The risks the Group identified as critical and primarycountermeasures are listed in the table below.
Primary countermeasures

Continuous operational reforms to reduce production costs
Diversification of product and raw material suppliers● Maintaining appropriate inventory levels of products and goods● Logistics integration with a focus on efficiency● Optimization of sales prices●●

FY2018FY2019FY2020

FY2021

831,865

850,721852,450

842,675

854,374

Gross profit

130,649

126,821

133,548

139,979

131,904

Selling, general and administrative expenses

109,087

112,326

116,281

115,961

107,292

Operating income

21,562

14,494

17,26624,01824,611

Ordinary income

24,423

15,67919,53427,00028,596

Net income attributable to owners of parent

15,784

10,588

11,43920,204

19,118

Earnings per share (EPS) (yen)

53.22

35.82

38.72

68.61

65.34

Return on equity (ROE) (%)

7.3

4.8

5.1

8.5

7.5

Return on assets (ROA) (%)

6.5

4.1

5.0

6.9

7.1

Return on invested capital (ROIC) (%)

6.4

4.1

4.7

6.3

6.6

Ratio of operating income to net sales (%)

2.6

1.7

2.0

2.9

2.9

Ratio of ordinary income to net sales (%)

2.9

1.8

2.3

3.2

3.3

1.9

1.2

1.3

2.4

2.2

Risks related to infectious diseases, illness, etc.

●

Establishment of manuals to handle infectious diseases, etc.

Total assets

376,204

393,392

389,426

394,086

413,123

Risks related to livestock diseases●

Establishment of manuals to handle livestock diseases

Net assets

219,861

224,074

229,178

247,648

262,740

58.1

56.6

58.5

62.7

63.4

Current assets

213,465

229,580

226,498

226,384

243,405

Current liabilities

127,765

139,456

138,106

123,041

126,533

Book value per share (BPS) (yen)739.77754.14773.26843.52897.66

D/E ratios (times)

0.22

0.28

0.23

0.16

0.13

Interest coverage ratio (times)

6.2

19.2

44.7

113.3

57.9

Risks related to business continuity due todisasters, conflicts, etc.

 stablishing a business continuity plan (BCP) against disasters, etc., and preparing for alternativeE
production and delivery● Periodic disaster drills●

Risks related to changes in domestic andinternational public and legal regulations
and infringement of rights●

Prompt identification and compliance of amendments to relevant laws and regulations

Risks related to changes in financial markets●

Setting up a committed line of credit

Risks related to business investment andcapital investment●

Exchange reservation

 he Board of Directors resolves important investments that contribute to enhancing corporateTvalue based on careful deliberations at the Investment and Lending Committee● Periodic review of progress and deviation from the original plan after investment
●

5,521

15,114

31,84740,862

18,473

Cash flow from investing activities-8,183-19,879-7,855-10,837-11,251

Improving the accuracy of receiving and placing orders and optimizing inventory management
Improvement of delivery lead time
● Improvement of loading efficiency● Stricter temperature-controlled transportation

Free cash flow

-2,661-4,76523,99130,025

7,221

Cash flow from financing activities-20,004

10,084-16,390-21,097-10,653

Cash and cash equivalents at end of period

29,28434,643

41,77150,65147,690 stablishment of a code of compliance behaviors, and distribution of a Corporate Code of Ethics
E
to all employees● Periodic compliance messages from management● Establishment of Compliance Committee chaired by the executive officer in charge of compliance● Conducting compliance seminars● Implementation of Compliance Awareness Survey● Assignment of Compliance Promotion Committee members● Establishment of Internal and External Consultation Hotlines to receive internal reporting

Net increase (decrease) in cash and cash equivalents-23,501

5,358

7,128

8,879

-2,961

Cash and cash equivalents at beginning of period

52,78529,28434,643

41,77150,651

Capital expenditures

12,674

20,560

9,838

11,58011,699Depreciation and amortization of goodwill

10,304

11,666

12,52413,003

12,903

Dividends per share (yen)

17.0

17.0

17.0

21.0

23.0

Consolidated payout ratio (%)

31.9

47.5

43.9

30.6

35.2

●

●

Risks related to compliance

Risks related to the development andoperation of internal control systems●

Internal audits conducted by the Audit Office

Implementation of anti-malware measures and security measures
Strengthening the management system by duplicating and decentralizing the core system anddata storage servers● Establishment of information security policy● Unannounced drills to maintain and improve the awareness of information security compliance●●

Risks related to information security

Risks related to securing and developing
human resources

Recruitment of diverse human resources● 
Promotion of evaluation systems and education/training programs that lead to increased motivation●

 ppropriate identification of, and compliance with, updated relevant laws and regulations inAaccordance with our Environmental Philosophy and Environmental Code of Conduct● Effective use of resources and energy, and environmentally-friendly business activities● 
Implementation of scenario analysis of physical and transition risks associated with climatechange in line with TCFD recommendations
Discussions on countermeasures at Sustainability Committee and Board of Directors meetings●

Risks related to the environment and climatechange■ Segment Information

Financial and Corporate Data

Cash flow from operating activities●

Risks related to logistics and distribution

Capital to asset ratio (%)

Basis for Growth

Strengthening food defense and traceability
Establishment of a strict quality control system based on international control standards

Ratio of net income to net sales (%)●

Food safety risks●

Vision and Strategy

Net sales

Introduction

The Corporate Strategy Planning Office, corporate and otherdivisions grasp and analyze the risks assumed for the Groupbusiness operations and offer necessary reporting to the Boardof Directors. They have designated a department in charge ofeach risk so that it can create and implement countermeasures
to minimize the impact of risks when they become manifest.

Risks related to market changes(See the summary of financial results for the latest detailed information.)(millions of yen)

Processed food segment
Net sales
Sales ratio (%)
Operating income

287,502291,939300,209

307,041

302,309

34.6

34.3

35.2

36.4

35.4

10,764

7,914

6,730

12,397

11,086

540,107554,576

548,184

531,581

547,843

64.9

65.2

64.3

63.1

64.1

11,432

7,364

11,284

13,443

14,860Meat segment
Net sales
Sales ratio (%)
Operating income* The “Accounting Standard for Revenue Recognition” is applied starting from the beginning of the consolidated fiscal year 2021.

43

Itoham Yonekyu Group Integrated Report 2022

44

■ Organizational Chart (as of April 1, 2022)

Financial and Corporate Data

General Shareholders
Meeting

Audit & Supervisory Board
Board of Directors

Corporate Data

Nomination Advisory Committee
Compensation Advisory Committee
Governance Committee

Stock Information (as of March 31, 2022)

Compliance Committee

Stock ticker code

2296

Number of authorized shares

1,000,000,000

Number of issued shares

297,355,059

Number of shares per unit

100

Number of shareholders

59,399

Shareholder registryadministrator

Sumitomo Mitsui Trust Bank,
LimitedSecurities companies
2,076,161(0.70%)

Treasury stock
5,458,762(1.84%)

Foreign investors
28,669,440(9.64%)
Financial institutions
40,155,654(13.50%)3.52

Ito Bunka Foundation

6,200

2.12

Custody Bank of Japan, Ltd.

5,646

1.93

MUFG Bank, Ltd.

3,151

1.07

Sumitomo Mitsui Banking Corporation

3,151

1.07

Nippon Life Insurance Company

2,749

0.94

Koichi Ito

2,731

0.93

*Itoham Yonekyu Holdings is excluded from the above list of major shareholders even though it owns 5,458,000 treasury stocks.
*Ownership ratio is calculated by deducting treasury stocks.

Corporate Information (as of March 31, 2022)
ITOHAM YONEKYU HOLDINGS INC.

Representative

Isao Miyashita, President and Chief Executive Officer

Location of head office

1-6-21 Mita, Meguro-ku, Tokyo

Established

April 1, 2016

Capital¥30 billion (anything less than 100 million is rounded down)

Business description

Business management and all other accompanying duties for Group subsidiaries that handle sales andmanufacturing of processed meat products, processing and sales of meat, processed foods, manufacturing and sales of ready-made meals

Number of employees

8,089 (consolidated)

Fiscal year

From April 1 to March 31

Accounting auditor

KPMG AZSA LLC

Itoham Yonekyu Group Integrated Report 2022

Production, Fattening, Processing, andSales of Meat and Processed Meat Products

Domestic subsidiaries
ITOHAM DAILY Inc.
ITOHAM WEST FOODS Inc.
Itoham Sales Inc.
ITOHAM FOOD SOLUTIONS Inc.
KIKUSUI Inc.
Asakusa Ham Inc., and 3 other companies
Overseas subsidiaries
Itoham Foods Trading (Shanghai) Co., Ltd.
ITOHAM BETAGRO FOODS CO., LTD.
Affiliates: 1 company

Domestic subsidiaries
ITOHAM MEAT SALES EAST Inc.
ITOHAM MEAT SALES WEST Inc.
SANKYOMEAT Inc.
IH MEAT PACKER Inc.
IH MEAT SOLUTION Inc.
Overseas subsidiaries
ITOHAM AMERICA, INC.
ANZCO FOODS LTD.
CMP Rangitikei LTD., and 20 other companies
Affiliates: 8 companies

Other Business Services
Domestic subsidiaries
Itoham Business Support Inc.
Other Business Investments
Affiliates: 1 company

YONEKYU CORPORATION

Trade nameSales and Manufacturing ofProcessed Meat Products

Financial and Corporate Data

4.11

10,279Meat Business

Basis for Growth

12,000

S Planning Inc.

Processed Food Business

Vision and Strategy

The Ito Foundation■ Group Companies

Production Division

7.46

Production Planning Department
Product Development Department
Quality Control Department
Technical Center
Production Management Department
Raw Materials Department

39.66

21,783Business Planning Department
Marketing Department

115,779

The Master Trust Bank of Japan, Ltd. (Trust account)

Business Strategy
Division

Mitsubishi Corporation

Itoham Foods Inc.

Ownership
ratio (%)

Itoham Yonekyu Holdings Inc.

Owned shares(in thousands)

Name

Sales Management Department
Sales Promotion Department■ Status of Major Shareholders (Major 10 Shareholders)

Sales Division

1.84%

Domestic Production Department
Overseas Business Department

5,458,762

Meat Process &Farm Division

Treasury stock

Domestic Beef Department
Domestic Pork Department
Domestic Poultry Department
Global Meat Sales Department

0.70%

Domestic Meat
Division

2,076,161

Processed Meat Department

Securities companies

Other Japanese corporations
153,253,549(51.54%)

Imported Beef Department
Imported Pork Department
Imported Poultry Department
Trading Department

9.64%

Overseas Meat
Division

13.50%

28,669,440

Processed Foods
Business Division

Meat Business Division

Business Strategy Department

40,155,654

Foreign investors

Accounting & Finance Department
General Affairs Department
Human Resource Department
Legal & Compliance Department
IT Management OfficeFinancial institutions

Crisis Management Office

Logistics Department

51.54%

Investment and Lending Committee

297,355,059

Purchasing Department

22.78%

153,253,549

CEO Office
Audit Office

Administration Division

Central Research Institute67,741,493

Other Japanese corporations

PresidentGroup Executive Committee

Individuals and others
67,741,493(22.78%)

Quality Assurance Department

Individuals and others

Crisis Management Committee

Corporate Strategy
Planning Office
PMI Office
New Business
Development OfficePublic & Investor
Relations Office

Introduction

Prime Market ofTokyo Stock Exchange

In charge of Group Logistics

Listed stock exchange

Sustainability Committee

In charge of Purchasing Department■ Distribution of Shares by Shareholder Type■ Distribution of Shares by Shareholder Type45

In charge of Central Research Institute■ Stock Conditions

Manufacturing of Processed Meat Products
Domestic subsidiaries
Yonekyu Kagayaki Corporation
Yonekyu Delica Foods Corporation

Production, Fattening, and Processing of Meat
and Processed Meat Products
Domestic subsidiaries
Yonekyu Oishiitori Corp.
Ai Pork Inc.
MARUFUJI Co., Ltd.
Taiyo Pork Corp.
Eastern Hiroshima Prefecture Swinery Cooperative

Providing services

Distribution Services
Domestic subsidiaries
IH LOGISTICS SERVICE Co., Ltd.

Business Services
Domestic subsidiaries
Itoham Yonekyu Human Services Inc.
Itoham Yonekyu Systems Inc.

Sales and Manufacturing ofProcessed Meat Products
Affiliates: 1 company

Other Businesses46