Overview of Nichirei Communication

Financial Information••

Engagement

•
•

•

•

Reports•

Non-financial Information

 nnouncements of financial resultsAPresentation meetings for medium-term business plans
Business briefings
Teleconferences with securities analysts andinstitutional investors
General Meeting of Shareholders

 nnual securities reportA(Japanese only)
HOPPE report forshareholders and individual
investors (Japanese only) ialogue with influential individualsDMeetings with stakeholders•••

Integrated Report​

Integrates importantfinancial andnon-financial
information

CSR Reports

WebsiteInvestor Relations

ESG Information

CSR Information

 can here for▲S can here for▲S can here for▲S

IR information​

Group Communication
Nichirei Corporation
Nichirei Higashi-Ginza Building, 6-19-20 Tsukiji, Chuo-ku,
Tokyo 104-8402, Japan

ESG information​

CSR information​

The Nichirei
WebsiteNichirei Group
Integrated Report

2021

INTEGRATED REPORT 2021

Nichirei Management Principles
Nichirei Management Principles

Focus on Lifestyles, and Provide True Satisfaction
Vision
Revised April 2019

Guiding Principles

We will continue to support good eating
habits and health by leveraging our state-ofthe-art manufacturing practices that optimize
nature’s bounty, along with our leading-edge
logistics services.
1. Prioritize customers, safety, and quality
2. Ethical operations
3. Transparent management
4. Sustainable communities
5. Value creation

Brand Slogan

Creating Savory Moments

Basic CSR Policy

The Nichirei Pledge—Working to Make Our Communities More Sustainable—
As a group of companies that provide value in the fields of food and health, the Nichirei Group
strives to help communities solve the issues they face while creating new value for customers throughits business activities. The Group gives full consideration to the economic, social, and environmental
impact of its endeavors, and publicly discloses the details of its businesses to its stakeholders, inorder to gain their understanding and promote further dialogue.

Create new value for customers
We strive to create new products and services, while helping customers
and communities solve various issues through our business activities.

Provide safe
products andservices

Maintain asustainablesupply chain

Reduceenvironmental
impactWe ensure thateverything we offer
our customers ischaracterized by highquality and safety.

We work to ensurethat our supply chain
is sustainable.

We strive to reduce theenvironmental impactof our operations,while giving fullconsideration to theirpotential effects on the
global environment.

Fostercooperative
relations with
communities
As a responsible
corporate citizen,
we foster close
cooperation with local
communities in theinterests of the
public good.

Continually enhance our workplaces
While promoting respect for the diversity of our employees, we continuously improve the workplaceenvironment to enable every employee to make the most of his or her abilities and work with enthusiasm.

Support good corporate governanceWe employ highly transparent, fair management practices, while ensuring that resources areproperly allocated and management decisions are made in a timely manner.

Ensure strict compliance
We maintain high ethical standards, while complying with the laws andsocial norms of each country in which the Nichirei Group operates.

Contents
Management Strategy
2

Message from the President

10

Vision for 2030

12

Nichirei Group Materiality

Value Creation Story
14

History of the Nichirei Group

16

A History of Creating Value:
Establishing a Temperature-controlled
Logistics Network

18

Business Overview

20

Nichirei by the Numbers

22

Value Creation Process

24

Nichirei’s Business Model and Advantages

		 26

Honkaku-Itame Cha-Han

		

Cross-Docking Business

28

		 30

Junwakei Chicken		

32

Acerola Business

34

Creating New Value

Financial Strategy
38

Strategy and Resource Allocation

42

Medium-term Business Plan WeWill 2021

64	Water Risk, Biodiversity,
Using Less Plastic
66

Food and Health: Creating New Value

68

Development of New Technologies

70

Building a Sustainable Supply Chain

72

Improving Work Satisfaction, Cultivating
Human Resources

74

Occupational Health and Safety76

Providing Safe Products and Services

78

Stakeholder Engagement

80

The Chairman in Conversation with
Outside Directors

86

Corporate Governance

94

Internal Control/Compliance96

Risk Management98

Directors, Audit & Supervisory Board
Members and Executive Officers

100

Officer Career Summaries

Data
104

Financial and Non-financial Highlights

106	Overview of Medium-term Business Plans
108

11-Year Financial Highlights

110

Consolidated Balance Sheets

112

Consolidated Statements of Income

113

Consolidated Statements ofComprehensive Income

114

Consolidated Statements of Changes in
Net Assets

116

Consolidated Statements of Cash Flows

118

Notes to Consolidated Financial Statements

Initiatives for Achieving a Sustainable
Society (Environment/Social/Governance)

126

Investor Information

58

Addressing Climate Change (TCFD)

127

Company Information/External Review

62

Initiatives to Reduce Environmental Impact

128

Global Network

Business Strategy
44

Processed Foods Business48

Temperature-controlled Logistics Business

52

Marine, Meat and Poultry Products Business

56

Bioscience Business

Editorial Policy

Reporting Companies

The Nichirei Group considers the Nichirei Group Integrated Report
2021 to be an important tool for communicating with shareholders,investors and all other stakeholders. We aim to communicate financial
information, non-financial information and business strategies in aneasily understandable way in order to facilitate a clear understandingof Nichirei’s corporate value and vision.
We would also like readers to know about our efforts towardachieving sustainable growth, enhancing corporate value andresolving social issues through our business activities.
Notes: 1.	Amounts and percentages are rounded to the nearest
whole unit.
2.	For Nichirei’s registered trademarks, the ® mark has been
omitted and italics are used, as a general rule.
3.	Fiscal years begin on April 1 of the previous year, and end
on March 31.

Nichirei Corporation and its consolidated subsidiaries inJapan and overseas(As of March 31, 2021)

Reporting Period
April 1, 2020 to March 31, 2021
(Some information from before and after this period is
included.)Referenced Guidelines• GRI Standards• International Integrated Reporting Council (IIRC)• Task Force on Climate-related Financial Disclosures (TCFD)

Issue Date
November 2021

Note on Forward-looking Statements
Statements in this report pertaining to the future, such as forecastsof business performance, are rational judgments based on currently
available information and contain a degree of uncertainty. Actual
business performance may differ due to a variety of factors.

Nichirei Group Integrated Report 2021

1

Management Strategy

Message from the President

2

Nichirei Group Integrated Report 2021

Management Strategy
Value Creation Story
Financial Strategy

We help resolve social issues
through our business as we

Business Strategy

aim for sustainable growth.

Initiatives for Achievinga Sustainable Society

Kenya Okushi
Representative Director, President
Nichirei Corporation

Data

Nichirei Group Integrated Report 2021

3

Message from the President

A Year of Unprecedented Changes
In the fiscal year ended March 31, 2021 (FY2021), which was the second year of our Mediumterm Business Plan WeWill 2021, the global COVID-19 pandemic created unprecedented
challenges. Although we made progress in line with the plan in terms of earnings, we had to deal
with substantial changes in our operating environment.
Due to the impact of the pandemic, sales of commercial-use products were weak, andconsolidated net sales decreased compared with the previous fiscal year. On the other hand,operating profit increased due to strong sales of household-use prepared foods in the processed
foods business and growth in the temperature-controlled logistics business, among other factors.
We expect a certain degree of recovery in demand once the pandemic subsides. However, as
values change along with significantly altered lifestyles in the post-COVID market, Nichirei will not
be accepted unless it offers products and services adapted to the new normal. This will requirechanges in resource allocation and strategy. Moreover, the growth of ESG investment has led togreater interest among investors and greater sensitivity on the part of our suppliers andcustomers, particularly regarding the environment, and discussion of measures to address such
issues has increased.

Medium-term Business Plan WeWill 2021:

Achieving Our Goals for the Group in the Final Year
Regarding initiatives in FY2022, although the logistics business has increased facility capacity inJapan through the establishment of new refrigerated warehouses in Nagoya and the Honmoku
district of Yokohama, and has enhanced its business foundation with innovations utilizing artificial
intelligence (AI) and robotic process automation (RPA), progress has fallen behind the planoverseas, where changes in the operating environment have necessitated readjustments togrowth investments. In FY2022, the business will add refrigerated warehouses in the Netherlands
and France to enhance its logistics service functions and broaden its business base.
The processed foods business has established three policies. First, it is crucial to increase
sales, which are the source of profits, and seek new markets to recoup the decline in sales. The
second is to adopt new approaches that differ from those we have been using, including making
changes to our product development and our sales organization. Third, now that the barriers are
disappearing between household-use and commercial-use products, which we have been
producing at separate facilities, we plan to introduce production facilities that can handle bothtypes of products.
When customers prepare meals, they are increasingly likely to require a variety of products as
ingredients rather than serving a single household-use product. Product needs are also

4

Nichirei Group Integrated Report 2021

diversifying for commercial-use prepared products for sale. As a FY2022 initiative to meetManagement Strategy

these changing needs, we have devised an investment plan that includes revisions toplanned capital expenditures to address new markets.
I have always been proud of the part we play in food infrastructure, and I felt that prideparticularly keenly in FY2021. As I mentioned, the COVID-19 pandemic has spurred changes
in consumer purchasing behavior and the spread of home delivery and e-commerce. As
these and other factors significantly transform the entire supply chain at an unprecedented
speed, I believe they have also led to greater recognition of the value of frozen foods andValue Creation Storylogistics. In an era of change, the Nichirei Group’s role as part of food infrastructure is to seekout and identify diversifying needs for food with the goal of developing businesses in thoseareas, while helping consumers develop better eating habits. It is both our mission and aconstant responsibility.
Medium-term Business Plan WeWill 2021, pages 42-43

Financial Strategy

Material Matters for Sustainable Growth
The environment and climate change are important issues for corporate management. Economic
activities decrease the Earth’s limited resources, and once the world population reaches 8 or 9
billion, we clearly will not be able to maintain our current food procurement methods andBusiness Strategy

infrastructure. For the environment as well, Nichirei used to take a reactive approach, basing its
initiatives on prevailing situations, but those days are over. Now, we must think for ourselves
about how our business activities affect the environment. The material matters we identified in
FY2021 factor in our impact on climate change and food infrastructure. In June 2021, with theaim achieving our long-term vision regarding business goals for 2030 (see pages 12-13) we also
formulated Group goals, consisting of measures and key performance indicators (KPIs) for eachof our five material matters. We have begun considering more concrete growth strategies for theInitiatives for Achievinga Sustainable Society

entire Nichirei Group, looking to the next medium-term business plan and further ahead to 2027
and 2030. The Group Strategy Committee, scheduled to meet in November 2021, will bring
together the Group’s senior management to consider how each business will generate results
and contribute to achieving the Group goals, and then incorporate its conclusions into strategy.
The committee will bring into sharper focus what we will do as a Group and what each businesswill do to achieve our goals.
As Group goals (measures and KPIs) for the material issues we have identified, we will work tocreate new value by designating new products and services for each business as well as the
projected scale of their sales. We will also set quantitative targets for progress in creating new

Databusinesses. We will also use the advantages of our existing businesses—their technologies andknow-how—as the basis for generating cash, and promote the use of information technology (IT)and digital transformation (DX) in helping to resolve issues in food procurement and theenvironment while raising our competitive advantage in the global market.

Nichirei Group Integrated Report 2021

5

Message from the President

Looking at the market in Japan, in addition to environmental issues, I sense impending crisis
from market shrinkage due to the declining birthrate and aging population, as well as a growing
budget deficit. By 2050, one in four people will be over 75 years old, and social security costs
are expected to balloon further. There should be more vigorous discussion of the role of people’s
eating habits in extending healthy lifespans and leading fulfilling lives. Based on its core theme offood and health, the Nichirei Group must show how it can help to resolve these social issues andtake a variety of approaches to create new products and services.
On the other hand, there is still substantial growth potential in many countries and regions
around the world, making our business rollout into overseas markets crucial. Deflationary
conditions have persisted for a long time in Japan, but prices have risen overseas, and there areeven some regions where Japanese products sell for higher prices than in Japan. Particularly
given factors such as the growing purchasing power of Asia’s middle class, I think we should
continue to pursue the rollout of our businesses in markets outside Japan with an emphasis onbalancing forecasting and backcasting, which entails working backward from targeted future
outcomes to identify policies to achieve them. However, there are limits to relying solely on ourown power in such markets, so M&A and alliances should be included as realistic methods ofexpanding overseas sales. Our current overseas sales are about ¥80 billion, and we are aimingfor ¥300 billion in 2030.
In addition, risks in the supply chain these days are directly tied to management issues. The
Nichirei Group procures products and raw materials from suppliers in various regions around theworld as well as Japan. We will therefore establish a system for sustainable procurement in linewith our policies, with a focus on the environment and human rights.
In our climate change initiatives, we aim to become carbon neutral by 2050, and have raised
our FY2031 target for Group CO2 emissions reduction (Scope 1 and 2 in Japan) to 50%. I think
we need to change our approach from simply carrying out a series of measures to one of settingMaterial Matters (Materiality)
Creating value in food and healthStrengthening food processing and production
technology capabilities; enhancing logistics services• Realizing sustainable food procurement andresource recycling• Climate change initiatives• Securing and developing a diverse array of humanresources••

Backcasting from2030

Long-term Management Goals
toward 2030
• Promote innovation• Create new value that resolves social issues¥1 trillion
8%■ Overseas sales ratio 30%■ Net sales■ Operating margin2027

Long-term goals(measures and KPIs)

2021

Organizational Profile

2019

Reallocation ofmanagement resources

Medium-term Business Plan WeWill 2021•••

Realize sustainable profit growth (Japan: Raise profitability bystrengthening the management foundation and transforming the businessstructure/Overseas: Expand scale of operations)Improve capital efficiency and expand shareholder returns
Create new value that supports good eating habits and health

The Nichirei Group has adopted self-management
based on the Japan Quality Award, the premierquality management framework.
Upon analysis of current conditions andorganizing data on changes in the environment,each Nichirei business identifies its ideal form overa medium- to long-term timeframe and creates anorganizational profile as a management strategy
orientated toward realizing that form. On thisbasis, Nichirei formulates its medium-term businessplans (currently spanning a three-year period).

Basic Group CSR Policy —The Nichirei Pledge—

6

Nichirei Group Integrated Report 2021

VisionWe will continue to support
good eating habits and healthby leveraging our state-of-theart manufacturing practices
that optimize nature’s bounty,
along with our leading-edge
logistics services.

Next medium-termbusiness plan

2022

Contribute to people’s good eating
habits and healthMission
Focus on Lifestyles, andProvide True Satisfaction

goals and devising strategies to achieve those goals through backcasting.
Management Strategy

Here and there, some in the capital markets still argue that addressing sustainability in areas
such as food procurement and the environment will increase investments and costs, pressuring
profits. As a manager, I consider sustainability essential for steady business performance andongoing growth. I believe that by proactively communicating this approach, companies will
spread the idea of sustainability initiatives as something to be conducted as a matter of course.
That is why I will stress communication on behalf of the Nichirei Group, including through media
such as this integrated report.

Value Creation Story

The most important management resource in accomplishing our goals for these material
matters is our human resources. One current KPI is to double our investment in human resource
development, and we have also set a target ratio for female officers and line managers to ensure
diversity among core human resources. We will promote these measures as drivers ofsustainable growth.

Material Matters for the Nichirei Group, pages 12-13

Financial Strategy

Becoming an Innovative Corporate GroupA core topic for us is the kind of value we should provide to our stakeholders. As ESG

Business Strategy

investment increases, shareholders—including institutional investors—are changing their views
on corporations. Many say that, more than just returns on their investment, they want to see
evidence of sustainability management. They are asking about the company’s purpose andnature, what it intends to accomplish, and how it will help to resolve social issues going forward.
Securing innovative human resources is also important for conducting sustainability management.
No longer does a high profit margin alone make a company attractive. Nichirei has numerous
research and product development staff, but the volume of innovations they produce has

Initiatives for Achievinga Sustainable Society

tapered off lately. This situation has led me to feel a strong sense of crisis. Therefore, about two
years ago, we carried out a Group-wide survey on innovation. We conducted a detailed
investigation, asking what proposals respondents had made in the past, what processes hadensued, and the outcome. We then asked them how they felt about their efforts and theoutcome. Our findings indicated that throughout the entire Group, many projects had beenlaunched but most had ended partway through, even though there had been initial output. Thiswas due to the movement of individuals within the Company, such as personnel transfers andchanges in the heads of organizations. In its ongoing efforts throughout its history to improve
efficiency, Nichirei has achieved a certain level of results from working to standardize its

Data

operations. However, I think we lacked a perspective on whether the employees who conducted
those operations enjoyed their work. In my visits to front-line workplaces, employees havedirectly shared their thoughts about the work they would prefer to do and their concerns that
Nichirei’s approach is out of sync with current realities. As a manager, I realized that this issue
must be taken seriously. Therefore, as part of our efforts to build a framework that enables the

Nichirei Group Integrated Report 2021

7

Message from the PresidentGroup’s diverse human resources to play more active roles, I introduced an innovation
management system (IMS) based on ISO 56002. I intend to use this system to establish a cyclefor generating meaningful innovation throughout the Group.
However, innovation is not so simple that results can be immediately generated merely by
establishing a mechanism for supporting creation and an environment that facilitates it. I went
further, incorporating a program into IMS that enabled people with the mindset to become
in-house entrepreneurs to start their own businesses. Based on the lean startup concept ofstarting out on a small scale to test a person’s idea, then returning to the drawing board if it does
not go well, the program creates a budget based on a three-step judgment and evaluation axis
that leads to business expansion. By equipping the Company with an environment andmechanism that enables each employee to explore what they really want to do and thenenabling them to do it, and by continuing to develop the human resources that will make themechanism function, we intend to accelerate our transformation into a corporate group thatpractices sustainability management.
Creating New Value, pages 34-37

New Value Creation:

Exploiting and Exploring—A Dual Approach
That Suits the Nichirei Group
Nichirei has adopted two approaches to new value creation. One is to create value by exploiting
existing businesses—looking more deeply into them and asking whether consumers seek orneed a certain item. I think that this approach can still produce results under our current system
and allocation of resources.
The other approach is to explore—to look outward—for new value. I intend to allocate moremanagement resources to this approach going forward. This dual approach is called“ambidextrous management,” but even with a theoretical understanding of this concept, there
have been cases where investing management resources this way has been difficult. I want tocreate a mechanism for ongoing investment with a long-term perspective. As a manager, creating
new value under this approach requires a different mindset from that used for exploiting existing
businesses. But it also has the potential to generate new Nichirei Group businesses. At the sametime, it is a regular topic of debate within the Company, because it will also necessitate taking onchallenges as an outlier, working in areas without restrictions. I would like to think about how we
can help to resolve social issues—what we should do and what we want to do—leveraging new
ways of thinking as opportunities to create value, unconstrained by the conventions of our existing
business domains. Ultimately, however, our foremost priority should not be to enter domains
completely unrelated to our established operations; rather, I intend to emphasize management
decisions that consider how to utilize the advantages of our existing businesses.
In these changing times, my role as a manager is to make the best use of ambidextrous
management to generate synergies among existing and new initiatives.

8

Nichirei Group Integrated Report 2021

Management Strategy
Value Creation Story
Financial Strategy

The Nichirei Group’s Intended Impact on Society
A company’s management is expected to have a sense of purpose and an impact on society. I
set a high value on doing business that consistently adheres to an approach befitting the Nichirei
Group: the idea that food brings people together. As an integral part of our lives at every stage,
food provides the settings for all kinds of occasions where people reaffirm their bonds with eachother, whether in joy or in sorrow. By going beyond food’s intrinsic function as the basis ofBusiness Strategy

nutrition and health to continue creating products and services that play a role in bringing people
together, the Nichirei Group provides broad value to society, a vital element in increasing its own
corporate value. My ambition is to be able to provide our products and services for any occasion
where they are needed so that our stakeholders can lead fuller lives.
Food sustainability has recently come to the fore as a priority global issue, and new initiatives
such as meat analogues have appeared in the food supply chain. Non-food companies have

Initiatives for Achievinga Sustainable Society

also been entering these areas. Of course, meat is unlikely to be completely replaced bysubstitutes, and I realize that the technologies behind these new nutritional sources are only justbeginning to emerge. Nevertheless, I view these new entrants as a threat, so I will keep a close
watch on when these technologies become popular enough and such products versatile enoughto incorporate them into our operations. In this way, I intend to expand the scope of the Group’s
impact on society and make it long-term.
Based on its Mission to provide true satisfaction, the Nichirei Group will continue supporting
the supply of food with the aims of helping to resolve social issues through its business andachieving further business growth. Dialogue and engagement with our stakeholders areinvaluable to us in the evolution of our management. We therefore request your ongoing support.

Data

Nichirei Group Integrated Report 2021

9

Management Strategy

Vision for 2030
The Nichirei Group is conducting management to achieve its long-term management
goals toward 2030. In our rapidly changing society, we view expectations for asustainable society as a business opportunity, and aim to our increase corporate
value by working with our stakeholders to resolve social issues.

Future medium-term business plans
2027

2024

FY2020-2022

Medium-term
Business Plan
WeWill 2021
• Realize sustainable profit growth(Japan: strengthen earnings base, transformbusiness structure/Overseas: expand scale)• Improve capital efficiency andexpand shareholder returns• Create new value that supports
good eating habits and health10

Nichirei Group Integrated Report 2021

2022

Mission

Focus on Lifestyles, andProvide True Satisfaction
VisionManagement Strategy

We will continue to support good eating
habits and health by leveraging ourstate-of-the-art manufacturing practices
that optimize nature’s bounty,
along with our leading-edge
logistics services.

Value Creation Story

Achieving Our Long-termManagement Goals toward 2030

Contribute to people’s goodeating habits and health

New value creation andinnovation

Net sales¥1 trillion

Operatingprofit/Net sales

8%

Overseas
sales ratio

30 %Business Strategy

Sustainable
developmentof theCompany

Financial Strategy

Realize asustainable
society

Initiatives for Achievinga Sustainable Society

Nichirei Groupmaterial matters

Strengthening food processing andproduction technology capabilities; enhancing logistics services
Realizing sustainable food procurement and resource recycling

Securing and developing a diverse array of human resources

Nichirei Group Materiality

Data

Climate change initiatives

The Nichirei Group is intimately connected tosociety through its business of providing food.
We recognize that our responsibility is substantial,
owing to the impact of our business activities on
the lives of our stakeholders and on the generalpublic.
In 2021, we identified Group goals (measures
and KPIs) to accelerate our initiatives for fivematerial matters toward the realization of asustainable society.
▼

Creating value in food and healthPages 12-13

Nichirei Group Integrated Report 2021

11

Management Strategy

Nichirei Group Materiality
Material Matters

Creating value in foodand healthStrengthening foodprocessing andproduction technology
capabilities; enhancing
logistics services

Realizing sustainable foodprocurement andresources recycling

Create new markets andcustomer value by taking onchallenges outside existing
business areas in both foodand health

Further refine core competencies
in food processing, production
and logistics to resolve social
issues and improve profitability
through competitive advantages
in global markets

Resolving various social issues
related to the supply chain,
which is the foundation of ourbusiness, and contribute tosustainable food procurement
and the realization of arecycling-based society

Vision for 2030
Continuing to create new products andservices and to attract new customers inexisting businesses, while developing androlling out new businesses in new areas
related to food and health

Ability to generate cash improved byconcentrating management resources oncore businesses

Overseas business has become a newpillar of earnings

All raw materials and ingredients areprocured from suppliers and partnercompanies that comply with the GroupCSR Procurement Guidelines.

Promoting a circular economy by creating
new business models

Improved resilience of water resources throughan understanding of water-related risks

Climate change initiatives

Securing and developing
a diverse array of humanresources

12

Nichirei Group Integrated Report 2021

As a food and logistics company
that is greatly affected byclimate change, we will workwith stakeholders to counter
global warming and reduceenergy consumption throughout
the supply chain

Secure and develop a diverse
human resources and foster an
inclusive corporate culture toachieve sustainable growth

Efforts underway to reduce CO2 emissions
both inside and outside the Group toward thegoal of becoming carbon neutral by 2050
Elimination of CFCs progressing at
production and logistics facilities as a
global warming countermeasure

Diverse human resources with various
characteristics and skills, maximizing theirpotential to improve their job satisfaction
and support the sustainable growth of
the Group

Group KPIs

Create new high-value-added products andservices by prioritizing allocation of resources tomarketing (consumer understanding), digitaltransformation (DX) and R&D• Set targets and scope for creating new
products and services in each business

Create businesses in new areas by promoting
Group-wide innovation through the innovation
management system (IMS) and other means

Accelerate overseas expansion by securing andtraining global human resources, cultivating partnercompanies, conducting M&A and other means

Work to conduct sustainable resource procurement
and help to realize a circular economy• EBITDA margin: 12%• EBITDA CAGR: 7%• Overseas sales ratio: 30%• Rate of procurement from suppliers andOEMs that comply with the Group CSR
Procurement Guidelines: 100%

Financial Strategy

Establish a supply chain with consideration forhuman rights and the environment and conduct
due diligence• Set quantitative targets for creation ofand milestones for the progress of new
businesses

Value Creation Story

Promote capacity expansion, work process
innovation, reduction of environmental impact anddevelopment of business foundations throughproactive capital expenditures in the processed
foods and logistics businesses

Applicable SDGs

Management Strategy

Group Measures• Rate of implementation of ESG due
diligence for main raw materials andmajor suppliers: 100%
• Rate of attendance for the SDGs
educational program aimed at realizing
a circular economy: 100%
• Rate of waste recycling at all sites: 99%• Conduct regular water-related risk
assessments at all sites, as well as inconservation activities and BCP

Reduce CO2 emissions per unit of production andutilize renewable energy at food factories andlogistics centers, and disclose information basedon the TCFD recommendations• Reduction in CO2 emissions: 50%(Compared with FY2016; Scope 1 and 2
in Japan)• Switch to natural refrigerants overseas asnecessary, based on on-site confirmation• Rate of conversion to natural refrigerants
Production equipment (Japan): 100%
Logistics (Global): 75%

Initiatives for Achievinga Sustainable Society• Replace all refrigerants used in freezing andrefrigerating equipment in Japan with naturalrefrigerants

Business Strategy

Identify water-related risks through risk
assessments at all sites and conserve water• Introduce a Group-wide engagement survey* tomonitor the effects of measures• Establish a personnel system that enables Group
employees to choose work styles according to theircareer outlook and contributes to productivity
improvement• Establish and provide support for applicationof rules• Promote communication activities and impartiallyprovide learning opportunities in order to createa work environment and corporate culture inwhich employees are healthy, lively and satisfied
with their jobs

• Ratio of female line managers (HD*):30%* HD: Nichirei Corporation (Holding Company)

Data* Engagement survey: A survey that shows degree ofunderstanding of and resonance with the management
philosophy and independent involvement in the organization(job satisfaction)• Ratio of female directors and female
Audit & Supervisory Board members(HD*): 30%• Double investment in human resourcesby 2030

Nichirei Group Integrated Report 2021

13

Value Creation Story

History of the Nichirei Group
Creating Value to Provide True Satisfaction
We have provided true satisfaction by identifying the needs of individuals and society, enabling
us to create the products and services required in each era. The Nichirei Group will continue tosupport people’s eating habits through business activities covering a wide range of foods.

1980s to 1990s
1960s to 1970s
1940s to 1950s
Launch of the Nichirei Group to
rebuild the postwar food supply
system and respond to risingconsumption

Nippon Reizo was established to take overthe marine products, refrigeration andice-making businesses. With a mission toprovide a stable food supply after WorldWar II, we diversified our businesses asconsumption rose rapidly in the 1950s.
1942	Established Teikoku Marine Products
Control Company
1945	Established Nippon Reizo Inc. as a
private company
1955	Started export of marine products
1956	Launched meat and poultry products
business	Provided frozen food to Antarctic
expedition team1959	Developed Hayabusa, a long-distancefrozen cargo vehicle (a reefer)[Main sellers]
1952 Frozen tempura set
1954 Chawan-mushi (savory egg custard)	(A pioneering prepared frozen foodproduct)

Providing household-use frozen
foods as the spread of electric
refrigerators changes eating habits

With strong economic growth, electric
refrigerators became common household
appliances and household-use frozen
foods began to be accepted. We
contributed to the government-led
creation of a cold chain logistics network tomaintain food freshness during transport
from producing areas to stores.
1960	Established Kamagaya Laboratory(establishment of a rotating poultry
house)
1964	Provided frozen foods to the athletes’
village at the Tokyo Olympics
1970	Opened a cafeteria at the Japan World
Exposition (Osaka)[Main sellers]
1969 Miniburg (currently Obento ni Good!
Mini-hamburg)
1974	Rolled out the Green Belt brand ofhousehold-use frozen foods
1979	Rolled out the White Pack brand ofpremium household-use frozen foods

Actively developing new businesses
amid increasing interest in frozen
foods as more women began working
outside the home

A management crisis led to Tomorrow’s
Nichirei, a bottom-up in-house campaign
soliciting employee proposals forinnovation and improvement, which led
to a series of new businesses. We also
worked to improve frozen food
performance as well as taste as risingnumbers of women working outside thehome spurred growth in demand forhighly convenient frozen foods.
1980 Started Tomorrow’s Nichirei
1982	Expanded into the biotechnology field
1985	Changed company name to Nichirei
Corporation
1988	Started European logistics business in
the Netherlands
1993	Full-scale launch of cross-docking
operations (XD)
1997	Established the Nichirei Technology
Development Center[Main sellers]
1986 Acerola Drink
1991 Yaki-Onigiri (frozen grilled rice balls)
1994	Launched a series of microwavableproducts; achieved the taste of freshly
fried croquettes without using oil

Nichirei Group Net Sales

FY1948

FY1951

Note: Consolidated net sales from FY2005

14

Nichirei Group Integrated Report 2021

FY1961

FY1971

FY1981

2020 onward
2010s
Addressing diversifying eating habits
and consumer concerns about foodsafety; accelerating business
operations by converting to aholding company structure elected as a brand of the Health andS
Productivity Stock Selection production
Established Nagoya Minato DC, amodel center for business innovation
Identified five material matters for therealization of the long-term
management goals toward 2030
Junwakei chicken became the first
poultry product in Japan to acquire
Specific Japanese AgriculturalStandards (JAS) certification forsustainability for eggs and chicken meat
[Main sellers]
2020 Gokujo Hirekatsu (pork fillet cutlets)
2021
Daizu Meat Hamburg (soy meat
hamburger steak)Daizu Meat Karaage (soy meat friedchicken)

2020

•

•

•

2011	Established Higashi-ogishima DC(Kawasaki City) and added a secondbuilding in 2013 to meet strong
demand for logistics
2012	Started sales of Asian food in the
United States2013	Launched Southeast Asian logistics
business starting in Thailand
2013	Established Nichirei Foods Funabashi
No. 2 Plant
2017	CSR Basic Policy revised as The Nichirei
Pledge2019
Established the Global Innovation
Center as a bioscience business basefor research, development andproduction
Established the Nichirei Group Human
Rights Policy[Main sellers]
2014 Honkaku Yaki-Onigiri (grilled rice balls)
2017 Tokukara (fried chicken)
•

•

•

•

Business Strategy[Main sellers]
2001 Honkaku-Itame Cha-Han (fried rice)2003	Launched Obento ni Good! series of
products that do not use coloring,preservatives or chemical seasonings
2004	Launched Kikubari Gozen series ofcalorie-controlled wellness foods

We will forge a strong link between
sustainable corporate growth and theachievement of a sustainable society,dealing openly with the public as we
continue to support people’s eating habits.

Financial Strategy

2004	Started a logistics business in China(Shanghai)2005	Converted to a holding company
structure
2006	Started the Inochi-no-Mori Project inIndonesia (sustainable shrimp procurement
using extensive aquaculture andmangrove tree planting)2007 Started Junwakei chicken business2008	Established GFPT Nichirei (Thailand)Company Limited, a Thai subsidiarywith a fully integrated plant for stablesupply of processed poultry products

By strengthening our earnings base andimproving asset efficiency, we promoted
profit growth and expansion of the scaleof our overseas business. We also steppedup our ESG initiatives to increase
corporate value.

Value Creation Story

We fundamentally revised the structure of
our traceability system to enhance quality
assurance so we can provide safer, morereliable products. We also converted to aholding company structure and started
new initiatives in each business.

Conducting management with amedium- to long-term perspectivethat addresses simplifying foodpreparation, increasing healthconsciousness, Japan’s labor shortage
and globalization

Becoming a company that creates
new customer value and helps
resolve social issues to achieve asustainable societyManagement Strategy

2000s

•

(Billions of yen)

600

500

Initiatives for Achievinga Sustainable Society

400

300

200

Data

100

0
FY1991

FY2001FY2011

FY2021

Nichirei Group Integrated Report 2021

15

Value Creation Story

A History of Creating Value:

Establishing a Temperature-controlled Logistics Network
The Nichirei Group has resolved various issues in each era of its existence. These issues haveincluded the challenge of meeting increased food demand in Japan’s period of high economic growththrough its ice-making, refrigeration and freezing businesses, and contributing to the improvement ofhealth standards in the 1960s through the development of a cold chain logistics network. In recent
years, globalization and social changes have made food logistics increasingly complex andsophisticated, and demands are growing for eco-friendliness, labor saving and efficient use of foodresources. We will continue to provide value to society through the leading high-performance facility
capacity we have established in Japan and a global rollout of our high-quality, detailed services.

1954 Established a Frozen Food Sales Company
In the early days of frozen foods, there were no vendors equipped tohandle them. We therefore decided to establish a sales company
specializing in frozen foods and start distribution.

1950s

1959
Developed Long-distance Frozen
Cargo Vehicle

Social Issues

Nichirei's long-distance frozen cargo vehicle(reefer) Hayabusa, which was developed
in-house, contributed to the creation of acold chain logistics network that keeps foodat low temperatures.

• Reduction of food loss
and waste• CO2 emission reduction• Response to the labor
shortage

1960s

1970s

1964
Provided a Wide Range of Frozen
Foods to the Athletes’ Village at theTokyo Olympics
We provided a wide range offrozen foods to the athletes’
village at the Tokyo Olympics
for a stable supply of safeand delicious meals to morethan 5,000 athletes fromaround the world.

16

Nichirei Group Integrated Report 2021

1965
Cold Chain Recommendation Issued by
Japan Science and Technology Agency(merged in 2001 with the Ministry of Education,
Science, Sports and Culture, the predecessor to thecurrent Ministry of Education, Culture, Sports, Scienceand Technology)
Nichirei played a central role in establishing a cold
chain logistics network, which included the introductionof forklifts, the construction of large-scale refrigerated
warehouses and the establishment of an industry group.
The cold chain network, which keeps food at a lowtemperature during distribution to maintain freshness
from the production area to the table, also helps toreduce food loss.

More Sophi
EfficientManagement Strategy

2021

2020s

Value Creation Story

These 25-meter double-trailer trucks enable simultaneous bulk
transportation of frozen and room temperature products. Since
simultaneous transport is enabled by simply coupling anddecoupling the second trailer, the trucks are expected tosignificantly lessen the burden on drivers and reduce environmental
impact through an improved percentage of truckload capacity
utilization and other transportation efficiency improvements.

Started Operation of Japan’s First
Trucks That Couple Room-Temperatureand Low-Temperature Trailers

2000s
2000

sticated and• Joint shipping
Logistics• Modal shift• Inspection by tablet device• Truck reservation system• Driverless forklifts etc.

Financial Strategy

Entered the 3PL BusinessWe started a third-party logistics (3PL)
business, which offers logistics strategy
planning and logistics systems on behalf ofcustomer companies. By providing themwith comprehensive outsourcing services,
we optimize the efficiency of their logistics.

1990s

Full-scale Launch of Cross-Docking (XD)
Business
Setting up a dedicated XD
center between vendors andstores significantly improveddelivery efficiency. It also
contributed to more efficient
store operations andreduction of CO2 emissions.

Initiatives for Achievinga Sustainable Society

1980s

Business Strategy

1993

1988
Launched Logistics Business in Europe

Nichirei Group Integrated Report 2021

Data

The rollout of our logistics business in Europe started
with the acquisition of a cold storage company in the
Netherlands. Based on the know-how we have cultivatedin Japan, we have rolled out our logistics business in
China, Thailand and Malaysia as we spread the quality ofJapanese logistics around the world.

17

Value Creation Story

Business Overview
The Nichirei Group conducts business in areas including marine, meat and poultry products; bioscience;and real estate. Its main focus, however, is on processed foods and temperature-controlled logistics.
Under a holding company responsible for overall Group strategy, each operating company aims to create
new value for customers through flexible business operations in order to raise corporate value over the
medium to long term.

Processed Foods

Logistics

37.9%

35.7%
Breakdown of Net Sales¥572.8 billion
FY2021
Real Estate

0.8%

Marine, Meat andPoultry Products

24.7%

Others0.8%(Marine Products: 10.6%
Meat and Poultry Products: 14.1%)

Processed Foods

Logistics

50.8%

38.8%
Breakdown of
Operating Profit¥32.9

billionFY2021Marine, Meat andPoultry Products

5.3%

Real Estate

6.0%(Marine Products: 1.5%
Meat and Poultry Products: 3.8%)

Others-0.9%

Note: Amounts are rounded to the nearest hundred million yen, and percentages are rounded to the first decimal place.

18

Nichirei Group Integrated Report 2021

Management Strategy

Nichirei Logistics Group Inc.

By intimately following the way people live, we contribute to
the realization of a healthy and abundant society throughfood that is characterized by seven basic values: delicious;
healthy; enjoyable to eat; safe; simple and convenient to
prepare; readily available; and reasonably priced. We willcontinue to refine our distinctive abilities and create superb
value through frozen foods, retort pouch foods and wellness
foods, in order to become the most trusted food company
in the world.

We are the largest domestic logistics group. Our businesscomprises a logistics network, focused on third-party
logistics, transportation and delivery; regional storage
businesses providing storage and delivery services that are
deeply rooted in their local areas; an overseas businessthat handles operations in Europe, China, Thailand andMalaysia; and engineering services, which handle mattersfrom logistics facility planning and design to maintenancemanagement. Throughout our supply chain we provide
high-quality service.

Marine, Meat and Poultry Products

Bioscience

Nichirei Fresh Inc.

Nichirei Biosciences Inc.

As the holding company for the Nichirei Group, Nichirei Corporation aims
to maximize corporate value by promoting organizational management.
It carries out the functions of management planning, monitoring and fundprocurement for the entire Group, as well as management support foreach operating company. It also operates a real estate business to makeeffective use of Group-owned land and other assets.

Nichirei Group Integrated Report 2021

Data

Real Estate
Nichirei Corporation(Holding Company)

By making best use of biotechnologies to conduct businessin the three fields of molecular diagnostics, rapid diagnostics
and biomedical materials, we are able to contribute to thephysical and mental health of a large number of people.
We provide high-quality products and services with theaim of becoming a technology-oriented company withoutstanding expertise.

Initiatives for Achievinga Sustainable Society

In promoting the development of premium marine, meatand poultry products we utilize our global procurement
abilities and emphasize freshness, deliciousness, safety,
security, health and eco-friendliness. We also keepsustainability in mind, paying attention to resources
and the environment while aiming to create better value
for consumers.

Business Strategy

Nichirei Foods Inc.

Financial Strategy

Temperature-controlled Logistics
Value Creation Story

Processed Foods

19

Value Creation Story

Nichirei by the Numbers
Our core business is built on cooling power: the ability to ensure the long-term storage of food and, atthe same time, preserve the original quality of the raw ingredients used.
This has enabled us to make Japan’s eating habits even better, and to meet the expectations andearn the trust of society as we seek further growth.

Processed Foods
Sales of Household-use and Commercial-use Frozen Foods

No.1
in Japan

Sales Ranking of Frozen Food Manufacturers (FY2021)
RankingCompany

Net Sales (Billions of yen)

1

Nichirei

220.2

2Company A

198.2

3

Company B

193.9

4

Company C

174.5

5

Company D

99.1

Source: From an August 3, 2021 article in Reishoku Nippo, which is published by
Shokuhin Sangyo Shimbunsha Co., Ltd.

Long-selling Household-use Frozen Foods
Obento-ni Good!
Mini Hamburg(hamburger steak)Obento-ni Good!
Karaage Chicken(fried chicken)

Honkaku-Itame
Cha-Han(fried rice)

52 years 33 years 20 years
20

Nichirei Group Integrated Report 2021

Refrigerated
Warehouse Capacity

No.1

1,494
thousand tons

Industry Share in Japan
Japan: Top Five Refrigerated Warehouse Companies’
Share of Total Facility Capacity

Global: Top Ten Refrigerated Warehouse Companies’
Share of Total Facility Capacity

Share of
Capacity
Total(Thousands
Capacityof tons)(%)

Ranking Company/Group Name

Nichirei Logistics Group2

Yokohama Reito

Main
CapacityCountry(Thousandsofof tons)
Business

Ranking Company Name

1,494

9%

1

Lineage Logistics

20,265

USA

884

5%

2

Americold Logistics

12,571

USA

3

United States Cold Storage

4,236

USA

AGRO Merchants Group, LLC

2,746

USA

3

Maruha-Nichiro Logistics

627

4%

4

4

Toyo Suisan Kaisha

571

4%

5

NewCold Advanced Cold Logistics

2,204

USA

6

Nichirei Logistics Group Inc.

2,074

Japan

5

Chilled & Frozen Logistics Holdings

501

3%

7

Kloosterboer

1,939

USA

Source: Compiled by Nichirei based on Japan Association of Refrigerated Warehouses
materials (As of April 2020)8

VersaCold Logistics Services

1,393

Canada9Interstate Warehousing, Inc.

1,311

USA

10

Frialsa Frigorificos

1,158

MexicoFinancial Strategy

1

Value Creation Story

Refrigerated Warehouse
Storage Capacity

Management Strategy

Temperature-controlled Logistics

Business Strategy

Source: Compiled by Nichirei based on the International Association of Refrigerated
Warehouses’ Global Top 25 List (As of July 2020)

Domestic andOverseas Vehicles in Operation

Approximately

Initiatives for Achievinga Sustainable Society

8,000

Marine, Meat and Poultry Products
Number of Countries andRegions for Food Procurement

30

Data

More than

Nichirei Group Integrated Report 2021

21

Value Creation Story

Value Creation Process
INPUT Note: Data as of March 31, 2021

¥405.7 billion•E quity ratio……

50.1%

•F
 ree cash flow
(before dividends)……

¥13.2 billion

Manufactured Capital• Production facilities……

24 domestic factories,
6 overseas factories•R efrigerated warehousestorage capacity……

1,515 thousand tons domestically,
554 thousand tons overseasIntellectual Capital

Human Capital• Production expertise• Technologicalstrengths in cooking
and processing• Logistics expertise• Brand strength• Number of employees(consolidated)……15,383• Expert human resources• Average length of service……
(males)17.3 years /15.4 years(females)Social and
Relationship Capital• Sales network• Logistics network• Donations to social
causes (FY2021)……

30 countries

Temperature-controlled
Logistics Business▼• Climate change• Food loss andwaste• Healthconsciousness• Decrease in Japan’s
population
etc.

Manufacturing that uses the Earth’s
bounty, and superior logistics services
Procurement

Processing/
Production

Pages 44-57

Processed Foods
Business

Pages.24-25

External
EnvironmentMore than¥340 million

Business Activities

Business Model and Advantages from
Comprehensive Group Strength

Medium-term
Business Plan

WeWill 2021

Marine, Meat andPoultry Products Business

Sales

Storage/Distribution

Bioscience Business

The Nichirei Group utilizes the capital it has accumulated since its founding to provide
frozen foods for household and commercial use and raw materials from fisheries andlivestock, as well as to conduct businesses that support eating habits, such astemperature-controlled logistics for food storage and delivery.
We use the comprehensive strengths of the Group to link our business activities andresolve social issues. This generates profit, which we then invest in strengthening ourbusiness foundation, which in turn creates new value.

22

Nichirei Group Integrated Report 2021

Natural Capital• Global procurement
network for
agricultural, meat,
poultry and marine
products……

▼Financial Capital•T otal assets……

−OUTPUT−Management Strategy

Creation of new markets
and customer value

Pages 12-13▼

Material Matters

Value CreatedContribute topeople’s goodeating habits andhealthRealization of arecycling-oriented society

Climate change
countermeasures andenergy reduction

Data

Securing and developing
a diverse array of humanresources

Vision for 2030

Initiatives for Achievinga Sustainable Society

Climate change initiatives−OUTCOME−Business Strategy

Realizing sustainable foodprocurement and arecycling-oriented society

Sustainable foodprocurement

Financial Strategy

Strengthening foodprocessing and production
technology capabilities;
enhancing logistics services

Value Creation Story

Creating value in foodand healthHelp resolve social issues andimprove profitability throughcompetitive advantages

Securing and developing
diverse human resources(diversity and inclusion)

Nichirei Group Integrated Report 2021

23

Value Creation Story

Nichirei’s Business Model and Advantages

Procurement

NaturalCapitalProcessing/
Production

Manufactured
CapitalBounty of
the Earth

Storage/
Logistics

Manufactured
CapitalMarine, Meat and Poultry Products
Temperature-controlled Logistics

Advantages from Comprehensive
Unique ingredientsprocurement network

Japan’s leading advanced
temperature-controlled logistics

Global sourcing of high-quality ingredientsthat meet Nichirei’s standards

Maximizing storage and transportation
capabilities to provide optimal logistics
services tailored to customer needs

Long-standing relationships of trust with suppliers

Largest refrigerated warehouse storage capacity in Japan

Livestock feeding/crop cultivation management
under long-term contracts

Optimal location of bases to connect logistics hubs,
production areas and consumption areas

Traceability that makes the procurement process clear

Operating capacity of 8,000 trucks per day
Total logistics that proposes and operates optimal systems

Human resources with high-level

24

Nichirei Group Integrated Report 2021

The Nichirei Group meets the needs of its diverse customers through operations
spanning a wide range of fields from food procurement to processing, logistics and sales.
Since our establishment, we have utilized the comprehensive strengths of the functions
we possess as a Group to develop businesses in new areas and achieve sustainable

Sales

Processed Foods

Management Strategy

growth while adapting to changes in society, the environment and economic conditions.

Social and
Relationship
CapitalManufacturing and processingof household-use andcommercial-use frozen foods

Value Creation Story

Contribute topeople’s goodeating habits
and health

Financial Strategy

Sales, procurement and processing of marine,
meat and poultry products

Transportation, storage, cargo handling, distribution processing
and data management of chilled and frozen products

Business Strategy

Group Strengths
Ability to handle a wide range ofcustomers and business types

Meeting customer needs by combining
high-quality ingredients and optimum processing

Meeting customer needs and providing conveniencethrough services and responses tailored to diverse
customer bases and business types

Providing products that have been optimally processed
based on a thorough knowledge of ingredients
Development capabilities for reproducing the flavor anddeliciousness of meals made by professional chefs
Quality assurance that enhances safety and reliability• Fresh seafood shops/
Butcher shops• Kaiten-zushi(conveyor-belt sushi) shops• Family-style restaurants• Hotels• Izakayas(Japanese style pubs)• Bento(boxed lunch) shops• Highway service areas• Fast food restaurants• Drug stores

Initiatives for Achievinga Sustainable Society

Know-how to provide optimal
processing• Supermarkets(seafood, meat and poultry, delicatessen, frozen food, retort pouch and dry foods sections)• Convenience stores• Hospitals• School lunches• Nursing facilities• Online sales• Employee cafeterias• Food co-operatives etc.

Dataexpertise and experience

Intellectual
CapitalHuman
Capital

Nichirei Group Integrated Report 2021

25

Helping to Resolve Social
Issues through Our Business

1

Providing New Value in Frozen Fo
Reproducing the Flavor of Meals
Honkaku-Itame Cha-Han
Advantages
Advantage▼▼

Social Issues
Demand for authenticity as eating
habits diversify
Increase in elderly and single-personhouseholds

In the 1990s, food options increased in Japan
with the expansion of the convenience store,

In-house Development of a Cooking LineThat Reproduces the Processes ofProfessional Chefs
Before the launch of Honkaku-Itame Cha-Han in spring
2001, frozen fried rice was closer to boiled rice withflavoring mixed in than to actual fried rice. To provide
authentic taste, Nichirei Foods observed how fried rice
was cooked at well-known restaurants, learning about thetemperature and time required for heating the oil, when to
add eggs, and other considerations. At a time when it
was considered impossible to fry rice in large volumes, we
perfected a unique frying process that incorporated theskills of professional chefs into a mass production line.

delicatessen, family-style restaurant and other
Advantage

outlet markets.
As eating habits diversified, demand for
products with a more authentic taste began toappear in the early 2000s. In addition, theincreasing number of elderly and single-personhouseholds spurred needs for meals that wereconvenient and easy to prepare.
Honkaku-Itame Cha-Han (fried rice) was
launched in spring 2001 to address this demand.
It was a runaway hit, offering the deliciousness
and texture of fried rice from a Chinese restaurant
at home just by heating it in a microwave. Since

26

Nichirei Group Integrated Report 2021

2

Major Renewal for a Three-stage Stir-fry
Manufacturing Method in 2015
To further refine the deliciousness of Honkaku-Itame
Cha-Han, which had been extremely popular since its
launch, in 2015 Nichirei Foods invested about ¥3 billion
to establish a three-stage stir-fry manufacturing method.
In the first stage, the rice is coated with eggs. In thesecond stage, excess moisture is removed with a blast of
hot air at 250°C or higher, the same temperature as aprofessional chef’s wok when stir-frying, and in the third
stage, the final frying is completed. This new processenhanced the deliciousness of Honkaku-Itame Cha-Han.

then, we have made ongoing improvements tokeep customers smiling.

1

Approx.

250°C

3Commitment to Raw Material Quality
We use 100% first-class rice from Hokkaido for the main
ingredient of Honkaku-Itame Cha-Han.
First-class rice has fewer cracked hulls, is less sticky
when cooked, and has a non-sticky texture even when
prepared in a microwave. It also features uniform-sizedgrains that enable more even application of seasonings.

Value Provided

Value Creation Story

Advantage

Management Strategy

ods through Development Capabilities forMade by Professional Chefs

Supporting good eating
habits in Japan with frozen
food that applies the skillsof professional chefs

Financial Strategy
Business Strategy
Initiatives for Achievinga Sustainable Society

Select first-class rice grown in Hokkaido

Data

Nichirei Group Integrated Report 2021

27

2

Helping to Resolve Social
Issues through Our BusinessHelping to Reduce Traffic Conges
Innovative Logistics System
Cross-Docking BusinessInitiatives
Initiative

▼

▼

▼

Social Issues
Diversification of logistics needs due tostructural changes in the retail industry
Strong public demand for reducing traffic
congestion and CO2 emissions
Need to reduce logistics costs andworkloads at stores

1

Establishing Cross-Docking (XD) Centers
in Line with the Structural Transformationof the Retail Industry
The greater prevalence of retail and restaurant chainsfrom the 1980s rapidly increased the frequency of
warehouse loading, unloading, transportation and delivery.
Therefore, Nichirei Logistics Group established a newlogistics system using cross-docking centers for rapid
sorting and delivery of products without storage. In 1993,
we began full-scale commercialization of the XD businesstailored to a variety of business types including generalmerchandise stores, supermarkets, convenience storesand restaurant chains.

In the 1980s, a drastic structural transformation
occurred in Japan’s retail industry, including the
rapid rise of supermarkets and other retail chains,as the population became more concentrated incities and car ownership increased. This broughtHigh Delivery Costs, ComplicatedOperations at Retailers

Vendor A

Lower Delivery Costs, More Efficient
Operations at Retailers

Retail store A

Vendor A

After
introduction

Retail store A

XD

Vendor B

Retail store B

Vendor B

Retail store B

Vendor C

Retail store C

Vendor C

Retail store C

about major changes in logistics needs, such as
requirements for sorting for just-in-time delivery
and stronger management of cargo freshness.
In addition, spurred by the first environmental
summit held in France in 1989, noise, CO2
emissions and traffic congestion due to trucks
came to be recognized as major issues,
with strong calls to the logistics industry for
greater efficiency.

28

Nichirei Group Integrated Report 2021

Initiative

2

Reducing Both Costs and CO2 Emissions
through Optimized Logistics
Nichirei Logistics Group’s XD business delivers products
to various retail stores and restaurants, mainly the three
perishables—produce, meat and seafood—and chilled
foods. XD centers function as relay points to enable
small lot deliveries with substantially fewer routes
than conventional deliveries from manufacturers andwholesalers to each store. Because fewer trucks areused, this method not only reduces logistics costs, butalso contributes significantly to reducing CO2 emissions
and traffic congestion.

tion and CO2 Emissions by Introducing anManagement Strategy

3

Supporting Deliveries toFood Retailers in Train Stations andDepartment Store Food Floors

Initiative

Helping to improve customer
operating efficiency and reduce
CO2 emissions through total
services that include sorting,delivery and distribution
processing

Financial Strategy

Today, our approximately 40 XD centers provide optimized
logistics services customized to each customer 24 hours aday, 365 days a year. We also handle outsourced deliveries
to commercial spaces inside train stations and food floors
in department stores.
In addition, delivery by category and inventory item
using the minimum number of trucks has the benefit ofmaking it easy for stores to manage personnel for tasks
such as checking and stocking shelves with incoming
merchandise. This enables stores to use the staff hours
saved for customer service.

Value Provided

Value Creation Story

Initiative

4
Business Strategy

Helping to Reduce Store Workloads with
Our Process Center Function

Initiatives for Achievinga Sustainable Society

Nichirei Logistics Group’s XD business also operates
a processing and packaging service called Process
Centers. Process Centers provide rigorously temperaturecontrolled, one-stop services within a single XD Center
ranging from processing meat, poultry and marine
products to weighing, packing, packaging, labelingand delivery.
In addition to reducing workloads at stores, centralizing
the processing work reduces the storage space requiredfor inventory, thus enabling larger sales spaces.

Data

Nichirei Group Integrated Report 2021

29

Helping to Resolve Social
Issues through Our Business3

Procuring Food throu gh a Sustai
Cycle Project
Junwakei Chicken
Initiatives
Initiative1

Born and Raised in Japan

▼

▼

▼

▼

▼

Social Issues
Improving Japan’s self-sufficiency foranimal proteins
Improving Japan’s self-sufficiency foranimal feed
Harmonious coexistence with local
communities
Biodiversity (sustainability of breeds)
Sustainable food production

In cooperation with an independent administrative agency
in Hyogo Prefecture, we succeeded in breeding Junwakei
chickens by crossing the Koyuki and Benizakura pureJapanese chicken breeds. Bred in Japan from grandparent
stock, the Junwakei chicken brand was created for thedomestic market for sustainable food self-sufficiency.

Foundation stock/Great-grandparents
Grandparents
Parent stock

According to a 2018 survey, Japan’s self-sufficiency

Benizakura(Broiler breeders)

Koyukirate for broilers (chickens used for meat) is relatively
high at 64%. However, the self-sufficiency rate for

Junwakei

pure Japanese broiler breeders (the parents) thathave been selectively bred domestically from the
grandparents is only about 1-2%, based on theInitiative

number of chickens shipped. Avian flu, which has
spread repeatedly in Japan and abroad in recent
years, has the potential to halt the import of
grandparent stock. If this happens, it could
devastate the domestic chicken farming industry
and cause chicken dishes to disappear fromJapanese dining tables.

Junwakei chicken

A Method of Raising Chickens That
Minimizes Their Stress
Using an up-to-date computer-based poultry management
system, we strive to create a comfortable environment forour chickens. Since their brooding period is about 60
days, which is longer than other breeds, we take the timeto raise them with care. That is why Junwakei chicken
meat has the quality and deliciousness Japanese
consumers demand, with tender, richly flavorful thighmeat and finely textured, soft and juicy breast meat.

Nichirei Fresh https://www.nichireifresh.co.jp/news/detail/?id=1333 (Japanese only)

Reference : Specific Japanese Agricultural Standards (JAS) certification for sustainability for chicken meat and eggs
https://www.maff.go.jp/j/jas/jas_kikaku/prdouga.html (Japanese only)

30

Nichirei Group Integrated Report 20212

nable Regional Agricultural and Livestock
Management Strategy

Value Provided

3

Sustainable Production Cycle Project

Providing chicken meat withconsideration for resource
recycling, food sustainability
and animal welfare

Financial Strategy

Using a state-of-the-art high-speed biomass processing
plant, we can produce organic fertilizer in about eight hours,
rather than the three months or more required by our former
fermentation-based composting method. Manure from
Junwakei chickens is processed into organic fertilizer for use
in cultivating the feed-use rice that is then used in their feed.
Most of the paddies we use to produce this feed-use rice
are lying fallow due to rice production adjustments. The
sustainable production cycle originating from Junwakei
chicken is also helping to revitalize regional agriculture.

Value Creation Story

Initiative▼

Sustainable Regional Agricultural andLivestock Cycle through Junwakei Chicken Page 71
Japanese purebred chicken

Junwakei
The specialized
feed is used
to raise Junwakei
chickens

Feed-use rice paddies

Business Strategy

Chicken manure is processed
into organic fertilizer

Sustainable Cycle
These rice paddies are used in a sustainableagricultural and livestock cycle initiative

The fertilizer is usedin the rice paddies

Initiative

Introductory video on Specific JAS sustainable
chickens and eggs (Japanese only)

Initiatives for Achievinga Sustainable Society

Unhulled feed-use
The feed-use rice is stored and thenrice harvested
blended into feedfrom the paddies
JA Shin-Iwate Hokubu Shiryo-yo
Kome Puroject Iinkai (Feed-Use Rice Project Committee)
Karumai-machi Suiden Nogyo Suishin Kyogikai(Karumai-machi Council for the Promotion of Rice Paddy Agriculture)
Hirono-cho Suiden Nogyo Suishin Kyogikai(Hirono-cho Council for the Promotion of Rice Paddy Agriculture)

First Specific Japanese AgriculturalStandards (JAS) certification given toa poultry product for sustainability

4

Traceability for Safety and Reliability

Data

To deliver safe and reliable chicken to consumers,
every aspect from receipt of chicks to poultry farming
records and management of vaccines and other drugs
is conducted under a strict program. This enables
traceability by lot back through the genealogy tofoundation stock.

Nichirei Group Integrated Report 2021

31

4

Helping to Resolve Social
Issues through Our Business

Sustainable Procurement That Con
Acerola BusinessInitiatives
Initiative

1

A Pioneer in the Acerola Business

▼

▼

▼

▼

Social Issues
Poverty
Educational issues
Agriculture that takes the local
environment into consideration
Nutrition and health of local residents

Acerola, which has a strong antioxidant effect, is
attracting renewed attention as a superfood richin vitamin C. With the spread of the “clean label”
movement to keep foods as additive-free as
possible, acerola is being used as an alternative
to synthetic vitamin C, which is an antioxidant.
However, acerola fruit is very delicate and after
being harvested can only be kept fresh for two to
three days at room temperature. Nichirei Foods
therefore utilizes the freezing technology it has
cultivated to provide acerola without loss of the
fruit or its vitamin C.
Poverty and educational issues are notable inBrazil, which is our main production area. Nichirei
Foods’ acerola business helps create jobs for
local residents.

32

Nichirei Group Integrated Report 2021

Nichirei was one of the first companies to introduce
acerola to Japan, with the launch of an acerola drink in
1986. In 1990, we made a full-scale start into thisbusiness of using acerola as a raw material, and in 1991
we established a subsidiary in Brazil, Nichirei do Brasil
Agricola Ltda. (“Niagro”), to conduct this business.

Initiative2

Building Relationships of Trust with
Contract Farmers
Niagro distributes free seedlings to contract farmers,
and its employees personally provide guidance forstable cultivation and harvesting of high-quality fruit.
Moreover, Niagro purchases the entire crop, generating
stable income for contract farmers and improving theircultivation skills. Through this initiative, Nichirei Foods
provides a stable supply of high-quality products tocustomers worldwide.

tributes to Local Community Development
Management Strategy

3

Contributing to the Region
Niagro provides acerola puree and juice to local residents.
Measures to support school operations include providing
acerola juice once per week to schools attended bychildren from poor households and repairing school
equipment. Niagro also creates employment throughstudent internships.

Value Provided

Financial Strategy

Creating “clean label”
products by providing
vitamin C derived fromacerola fruit and contributing
to the economy of the
production area

Value Creation Story

Initiative

Business Strategy

4

Initiatives for Achievinga Sustainable Society

Consideration for the Environment
We also conduct eco-friendly initiatives, which we
consider the duty of a company that operates a businessbased on acerola, part of nature’s bounty. We utilize thepomace (the pulpy residue left over from the processing
stage) as feed for livestock, and we are collaborating with
Kindai University on the development of Acerolaburi foruse as feed for farmed yellowtail (buri). In addition, waterused to wash the fruit and water extracted from the fruit
when making concentrated juice is returned to rivers after
microbial treatment.

In the 2021 sustainability assessment by
EcoVadis of France, Niagro received agold rating, placing in the top 5% of allcompanies assessed.
Nichirei do Brasil Agricola Ltda. ("Niagro")
Receives Gold Rating in EcoVadis Sustainability
Assessment (2021) Page 47▼

Initiative

Data

Nichirei Group Integrated Report 2021

33

Value Creation Story

Creating New Value
The New Value Creation the
Nichirei Group Is Working Toward
I would like to begin by looking back over Nichirei’s
history of innovation. Nippon Reizo, which is Nichirei’s
former name, was established at the end of World War II,
in 1945. Its predecessor was Teikoku Marine Products
Control Company, which the Japanese government
created in 1942. We made a new start as a privatecompany with the aim of delivering a stable supply offresh foods and ingredients to people who were
suffering from the postwar food shortage. Our next
major turning point was around 1960, when we beganselling frozen foods that had been pre-processed to alimited degree. Thus, we began helping to eliminate thevarious inadequacies of at-home food preparation: theinconveniences, impossibilities, insufficiencies anddissatisfactions. Even before the establishment of a cold
chain logistics network encompassing food freezing
methods and distribution, Nichirei has consistently takenon new challenges aimed at helping eliminate society’s
challenges and inadequacies using its own technologies.
Now that today’s society has secured the amount offood and water necessary for life and there are no
obvious inadequacies, it has become harder to discern
peoples’ desires, and what they consider “inadequacy”
to be. Nevertheless, it is possible to innovate even in an
era of diversifying values. To make a croquette thatoffers the taste and texture of freshly fried food without

We are establishing a mechanism
in Nichirei for instilling a mindsetof value creation. By promoting
this mechanism, we will work tocreate new markets and customer
value.

using oil, we prepared a seemingly countless series ofprototypes using multiple microwave ovens with different
specifications made by various manufacturers. The result
was a blockbuster product. Later products such as
Honkaku-Itame Cha-Han (fried rice) were also the resultof our employees’ persistence in resolving the issues
customers face. These products were the outcome of
Nichirei employees’ steady and ceaseless pursuit of theirgoals, over and over again. I believe that is what

Junji Kawasaki
Director, Executive Officer
Supervising Quality Assurance andBusiness Innovation
General Manager of Technology Management

innovation is.
The word “innovation” means different things todifferent people. Some think it entails developing newtechnologies to do something unprecedented. However,given the various regulations and restrictions on foodproducts in the Nichirei Group’s main business areas,
and numerous customers with conservative views,
employees sometimes show little interest and are34

Nichirei Group Integrated Report 2021

Conceptual Diagram of Innovation Management System (IMS)Management Strategy

Context of the Organization (4)External and internal issues, culture, collaboration

Leadership (5)Commitment, vision, strategy, policy

Create concepts
Identify
opportunities

Develop solutions

Validate concepts

Innovation
Value

Deploy solutions

Value Creation Story

Opportunities
IntentOperations (8)
DO

PLAN

Support (7)CHECK

Planning (6)Resources, competencies andother support

Performance
Evaluation (9)ACT

Improvement (10)Financial Strategy

Diagram Explanation
Innovation activities (identifying opportunities, creating and verifying concepts, developing and implementing solutions) are
shown in the central red frame; uncertainty is reduced through hypothesis testing by rapid trial and error, back and forth,
within the frame, leading to the creation of value. In addition, we aim to more smoothly promote these activities throughorganizational support. Human resource development, which we are focusing on at present, is an initiative related to thecompetence of the support system.
Source: ISO 56002 Innovation Management—Innovation Management System Guide
Note: The numbers in parentheses in the diagram indicate ISO 56002 chapter numbers.

Therefore, at Nichirei, innovation refers not just to

but also employees who support their efforts in various

breakthroughs, but also to combining existing

ways. This will require creating a corporate culture thatknowledge and resources to generate new economic

fosters a spirit of taking on challenges throughout theand social value, either through changes in our core

Group. Therefore, the Nichirei Group is tackling new

businesses (business models) or the creation of newvalue creation as an organization. We will engage inbusinesses (new opportunities). In other words, we

ongoing communication, including messages from senior

define innovation as delivering the value of new

management, so that our employees understand andexperiences to our customers, a concept we callthink about what we mean by new value creation.

“new value creation.”

President Okushi and I communicate with employees on

Initiatives for Achievinga Sustainable Society

come up with ideas and take on challenges as leaders,Business Strategy

disinclined to get involved when I mention the word.

the Company intranet via streaming videos, some of

Progress of Initiatives

which have had 1,000 or more views depending on thecontent. It is crucial that we present this new approachto Group employees and ensure that they understand it,

Nichirei is not accomplished by specific individuals withand to provide specific examples so that they realize

superior skills, but rather generated by all Group

what their colleagues have accomplished. This process

employees. By establishing a foundation for everyone in

may not fit the definition of innovation as others understandthe Group to take part in new value creation, we intend

it, but we intend to be steadfast in our efforts to create

to add examples of new value created as an organization

new value befitting Nichirei.

Data

We believe that innovation, or new value creation, at

by increasing not only the number of employees who

Nichirei Group Integrated Report 2021

35

Creating New ValueIn FY2022, we also established two organizations in

The educational program provides the skills necessary

Nichirei Corporation, the Nichirei Group’s holding

for engaging in innovation activities. Program participants

company: one to set up the mechanism for ourlearn about business model construction and design

activities, and the other with an incubation function forthinking,* which is important for coming up with ideas

full-scale commercialization of ideas with businessfrom the customer’s perspective. Participants also learn

potential. Our main reason for establishing these

how to use a tool called Business Model Canvas (BMC)

organizations in the holding company is that because

for business model construction, and because BMC can

the holding company is not in charge of businessalso be used to review and improve existing businesses,

operations, it creates an environment where we canwe encourage all employees to learn how to use it. When

promptly and flexibly go through a trial-and-error

all employees can analyze and plan their businesses

process to test ideas free of the constraints of ourusing the same tool, BMC becomes a shared Group

existing businesses.

language. New ideas are difficult to understand, but

In setting up the mechanism for our activities, we

expressing them through BMC enables both those who

referred to the ISO 56002 international standards for an

propose ideas and those who support them to work

innovation management system (IMS), which were

together in studying the ideas, and then to identify andissued in July 2019. ISO 56002 contains guidelines forcorrect each other’s misconceptions, which leads to theencouraging organizations to innovate, but simply

next idea. Even so, BMC is just a tool. The key point isfollowing those guidelines will not result in new value

deciding the themes to focus on in coming up with ideas.

creation. I therefore want to ascertain the true nature ofThat is why the design thinking portion of the program

the Nichirei Group in order to create an IMS that isteaches how to propose goods and services from thesuitable for Nichirei and to see the mechanism throughcustomer’s point of view, and provides opportunities toto fruition. In practical terms, we are now implementing

come up with ideas while keeping in mind the inadequacies

two programs: an educational program and a

I mentioned earlier in talking about the commercializationcommercialization program for putting that education

program.

into practice.
* Essentially another way of describing our IMS, design thinking is a non-linear, iterative process that teams use to understand users, challenge assumptions, redefine problems
and create innovative solutions to prototype and test. Design thinking involves five phases—empathize, define, ideate, prototype and test. It is most useful in tackling problems
that are latent or ill-defined.

36

Nichirei Group Integrated Report 2021

Educational Program Results in FY2021 (Excerpt)

Business Model
Construction (Applied)

Frequency

Total Attendees

Acquire basic knowledge of Business
Model Canvas

12 sessions/year177

4 sessions/year

66

Management Strategy

Business Model
Construction (Basic)

Content•S tudy the business model patterns ofsuccessful companies

We launched our educational program at the

Value Creation Story•F oster thinking about businessmodel innovation by applying it to
one’s own company

Many Nichirei employees are passionate about food. My

beginning of 2020 and it is now in its second year. With

role is to provide them with opportunities to develop

a total of just under 400 employees having taken thetheir enormous potential for the future of Nichirei.

course to date, we have not yet reached our goal of
having all employees take part. As we collect data on

Future Developments
Financial Strategy

the impressions and proficiency levels of the employees
who have already participated in the program, I would

The Nichirei Group has made frequent attempts tolike to further enhance the content and recommend it tocreate value in the past, but many projects have ended

other employees. Going forward, we intend to make it aunsuccessfully. Before starting these programs, over aGroup-wide human resources development program.

period of roughly three months in FY2020, we interviewed
past projects in which they took on new challenges. For

new value in food and health from all Nichirei Group

successful projects, we asked participants why they

employees. FY2022 is the second year of implementation,

went well, and for projects that were discontinued

but already, many ideas have been proposed by a wide

partway, we asked why they did not. In this way, we

range of employees, from young and mid-career to

identified the strong and weak points of innovation

veteran staff. Themes taken up with the aim ofactivities at Nichirei, enabling us to start with ancommercialization go through two stages of verification,

understanding of Nichirei’s true nature. Based on this, byand employees remain in their current departments

considering the likely pitfalls, we are creating aduring the first stage. We plan to establish a personnel

mechanism that will increase the success rate.

evaluation mechanism that includes consideration of

Initiatives for Achievinga Sustainable Society

about 50 employees who had been involved in some 40

Business Strategy

Our second program (launched in FY2021), thecommercialization program, solicits ideas for creating

The Nichirei Group’s long-term management goals

participation in this program. The FY2021 program is

toward 2030 state that “the Company will promote

now advancing into final verification toward commercialization.

innovation to create new value that solves the problems

Assessments at milestones in each stage are beingof customers and society.” Creating new value throughconducted using our unique KPIs.

innovation will also play a large part in achieving ourtarget of ¥1 trillion in net sales in 2030. I want our Group

employees to propose their own ideas and engage into make united efforts in support of the enthusiasm ofinnovation activities without being restricted by existing

employees who have chosen to take on challenges tobusinesses or their day-to-day work. Since starting thiscreate new value toward 2030. By cultivating a Group

program in FY2021, I can say from first-hand experience

corporate culture in which enthusiastic employees dothat it has become a forum for employees wanting to

not hesitate to take on such challenges, we will address

take on new challenges to talk about their ideas andsocial change to offer value that society and consumers

then put them into action. If successes emerge, I am

demand in a way that only Nichirei can.

DataPreviously, there were no such opportunities forconfident that our corporate culture will change further.

Nichirei Group Integrated Report 2021

37

Financial Strategy

Strategy and Resource Allocation
Performance in FY2021
My responsibility in increasing Nichirei’s economic andsocial value is to objectively analyze the Group’s
competitiveness, formulate a management strategy frombusiness strategies based on that analysis, and reflectthat management strategy in our budget and otherquantitative plans. Aside from creating plans, I am also
aware of the need to consider the kind of corporate
organization we should create to enable us tosuccessfully implement those plans.
In FY2021, Group sales decreased compared with theprevious fiscal year due to the impact of the COVID-19
pandemic. However, even though we incurred
depreciation expenses from capital expenditures for
future growth and for bolstering our business foundation,
consolidated profit increased year on year, exceeding our
initial plan. Factors contributing to this result were theenhancements to our customer base we have been
making, cutbacks in expenses, and our promotion ofgreater operating efficiency. In the processed foods
business, although demand has fallen for commercialuse frozen foods for food service and other sectors dueto the pandemic, sales of household-use frozen foods
were strong as we accurately captured growing demandand diversifying needs. Overall, the business was able tomaintain a balance even when the state of emergency
restricted people’s movements and contacts.

We will conduct effective
strategies to enhance ourcorporate value.

In the temperature-controlled logistics business, asrising electricity charges, higher personnel expenses due
to a labor shortage and other factors drive costs up, theintegration of our storage and transportation operations
has improved profitability and enables us to provide

Takumi Taguchi
Director, Executive Officer
Supervising Corporate Internal Audit, Business
Management, Strategic Planning, IT Planning,
Legal Affairs, Human Resources Strategy &General Affairs, Finance, Accounting & Tax andGroup Communication

high-quality services to customers. Logistics is not
simply transporting cargo; providing a variety ofincidental services is crucial. For example, our crossdocking (XD) business collects goods from eachmanufacturer in a batch, then sorts and transports themto individual stores, so manufacturers do not have toship to each store as they used to. Such steady efforts
to maintain businesses that are useful to all have
improved the Nichirei Group’s ability to generate cash.

38

Nichirei Group Integrated Report 2021

FY2021 Consolidated Results

ROE

REP1

Growth¥572,757 million¥10,167 million

EBITDA¥52,618 million

Financial Soundness

0.5 times

Value Creation Story

10.9%

Net sales

D/E ratio

Management Strategy

Capital Efficiency

Shareholder Returns
DOE2

3.4%

Annualdividends
per share¥50 per share

Financial Strategy

Notes: 1. Retained Economic Profit. Our original indicator showing profit after deduction of capital costs.
2. Dividend on equity ratio

Our current medium-term business plan forecasts
around ¥40 billion per year in cash from operating
activities for approximately ¥120 billion over the threeyear period. Approximately ¥100 billion of this amount isinvestments; 30% for infrastructure enhancement,
business innovation and new development; and 20% forrationalization and maintenance), and approximately ¥20
billion for investments and loans, including shareholder
returns and funding. As of the end of the plan’s second
year, capital expenditures totaled ¥65 billion.
We may appear to have fallen slightly behind our initialplan in FY2021 due to revisions to our investments in
response to the conditions caused by the COVID-19
reordered the priorities of the aforementioned capital

expenditures for FY2022 exceeding our record high of¥40 billion for a single year, the total amount for thethree-year period from FY2020 to FY2022 is set to begenerally in line with our initial plan.
Capital expenditures in FY2022 include projects withthe “new normal” and overseas expansion in mind,
centered as before on the processed food and logistics
businesses. Capital expenditures in the processed foodbusiness will total ¥18.9 billion, consisting mainly of
construction of a new production facility for innovative
products, expansion of production lines for maincategories, upgrades to make equipment eco-friendly
and upgrades of aging equipment. Capital expendituresin the logistics business will total ¥19.8 billion, primarily
for the addition of refrigerated warehouses in Europe
and bolstering of the business foundation, includingDatapandemic. However, we have changed the details andplan into our FY2022 plans. With planned capital

Initiatives for Achievinga Sustainable Society

to be allocated to capital expenditures (50% for growththat had been slated for the next medium-term businessBusiness Strategy

Planned Capital Expenditures in
the Final Year of our Medium-term
Business Plan WeWill 2021

digitalization of warehouse operations.

expenditure categories, enabling us to incorporate items

Nichirei Group Integrated Report 2021

39

Strategy and Resource Allocation

Shareholder Returns and Capital
Efficiency
Dividends are our foremost priority in providing returns
to shareholders. We use the consolidated dividend on
equity ratio (DOE) as our yardstick for stable annual
dividend increases as we accumulate profits inindicators. We calculate REP for the Group and for eachbusiness. Moreover, we have been able to maintain thecurrent medium-term business plan target for ROE of
10% or higher. In the next plan we intend to introduce
KPIs that contribute to capital efficiency, such as returnon invested capital (ROIC), to enhance management ofour business portfolio.

shareholders’ equity. Stock buybacks are anothermeasure for providing returns to shareholders, but wehave not conducted one since FY2018, because wehave been prioritizing the allocation of cash to investments
for growth and infrastructure enhancement.
The consolidated balance sheet as of March 31, 2021
shows a debt-to-equity ratio (D/E ratio) below 0.5, which
would normally indicate our capacity to take on a bit
more leverage. However, as mentioned previously,
planned capital expenditures for FY2022 will exceed ¥40
billion. We also expect to use M&A and alliances toexpand overseas operations and create new businesses.
To maintain a financial position that allows us to raise
funds flexibly for such purposes, we intend to maintain asingle A flat credit rating for long-term debt.
Regarding capital costs, we are aware that cost ofequity capital is 6-7% for the market overall. We use
Retained Economic Profit (REP), an original indicatorobtained by subtracting capital costs from net operating
profit after tax (NOPAT), as one of our key performance

40

Nichirei Group Integrated Report 2021

Current Initiatives and Future Issues
in Overseas Operations
Each of our businesses has leveraged its strengths to
expand overseas independently, and overseas sales are
currently approximately ¥80 billion, based on frozen foodsales in North America and storage, transportation anddelivery in Europe. We are aiming for ¥300 billion in
FY2031, but I think that will be quite difficult to achievethrough organic growth alone. M&A and alliances are
effective means to achieve this target, but they are limitedby the absence of intra-Group synergy at each location.
We have a processing base in Vietnam for marine
products, which are shipped to Japan for sale. Since
demand for marine products is growing worldwide, weshould also be able to expand sales in other countries
and regions. In Europe, many frozen foods are more like
ingredients than finished products, and there arecompanies there that make a business of finding

the targeted ratio of female officers and managers, anddifferent brand names by country or region.

achieve diversity among our core talent.

There are countries and regions where there is still

Nichirei Group employees have gained a reputation
outside the Group for being truly earnest andconsider it a management task to integrate the corestraightforward. I am very happy about that, but I feelcompetencies we have cultivated in food processingthat they have not yet been able to fully display theirand production and logistics to create a business model

outstanding qualities at an individual level. To bring thosethat helps to resolve social issues from a global

qualities to the fore, we have established an innovation

perspective. If we can do that, our overseas businesses

management system and have started initiatives toshould continue to roll out profitably.

provide wide-ranging employee training that promotes
thinking about creating new economic and social value.

I stated earlier that dividends are our foremost priority incapital efficiency. We have set EBITDA as an indicator toproviding shareholder returns. We will continue to pay

monitor whether increasing the allocation of resources tostable dividends with DOE as our yardstick and expect

investments for growth and other capital expenditures is

to buy back Company shares while considering theleading to the generation of cash. Evaluation of directors

balance between our debt rating and capital efficiency.

and executive officers for performance-linked compensation

Shareholders also expect an increase in corporate value

consists of three indicators: net sales, EBITDA and REP. We

in terms of stock price. Until now, the focus has been on

disclose targets (performance forecasts) and results byfinancial indicators such as profit growth, but attention

segment for each of these items, with degree of achievement

to ESG has recently picked up, with particular emphasisof the EBITDA target given the highest weighting.

on initiatives for the environment (E) and society (S). The
issues for Nichirei are what the effects will be ofmaterial matters for achieving our long-term management

incorporating these elements into our business model

goals toward 2030, and in 2021 we set Group targets

and how we can develop them into businesses.
Moreover, I believe that such initiatives will positively

forward, we will work together with our businesses to

impact capital costs. Stock prices will reflect not only theformulate and monitor specific action plans to achieve theelements specified in corporate finance theory such asGroup targets. For instance, we will establish action plansleverage, but also sustainability and ESG, and the resultsfor each three-year medium-term business plan period aswill be linked to the cost of capital. Increasing oura way of setting objectives.

reputation for ESG will also raise public awareness of thevalue in food and health” and “Strengthening foodInitiatives for Achievinga Sustainable Society(measures and KPIs) for each material matter. Going

Among these material matters, I believe that “Creating

Business Strategy

plan emphasizes EBITDA for profit growth and ROE for

Financial Strategy

For financial KPIs, the current medium-term business

Enhancing Corporate Value
Going Forward

As for non-financial KPIs, in 2020 we identified five

Value Creation Storyroom for growth in the field of food and health. We

Financial and Non-financial KPIs
for Management

Management Strategy

ingredient sources and selling those ingredients under

Nichirei brand, positively affecting the engagement of
Nichirei Group employees.
In conclusion, enhancing corporate value will require

enhancing logistics services” will drive growth for thethe creation of a corporate culture in which each of ourGroup. Various non-financial assets are linked to foodfour operating companies can create value by sharing

and logistics, which are the two cornerstones of ourthe extensive know-how they have generated throughbusiness, and one such asset is human resources. For

their diversity. I intend to continue working to deploy

the material matter “Securing and developing diverse

Group synergy as we increase the value of our fourhuman resources,” we have set Group KPIs that reflect

operating companies.

Data

processing and production technology capabilities;

the commitment of top management to double ourinvestment in human resource development, increase

Nichirei Group Integrated Report 2021

41

Financial Strategy

Medium-term Business Plan WeWill 2021
In an increasingly unstable global economy, continuing volatility is expected in exchange rates, rawmaterial prices and energy costs. In Japan, as a labor shortage drives up various costs, greater
diversification of consumer behavior is expected due to changes in household composition and lifestyles.
Under this medium-term business plan, we are making capital expenditures for growth andinfrastructure enhancement, mainly in the processed foods and temperature-controlled logistics
businesses, while maintaining an accurate understanding of the changing business environment. By
doing so, we aim to realize sustainable profit growth and create new value that supports good eating
habits and health.
Operating profit/Depreciation and amortization/EBITDA

General Strategy(Billions of yen)

1. Realize sustainable profit growth

60.0

2. Improve capital efficiency and expand
shareholder returns

50.0

3. Create new value that supports eating habits andhealth40.0

Investment strategy

30.0

1. Proactive capital investment to enhancecompetitiveness

57.2
49.4
18.4

20.0
10.0

1. Improve financial soundness

19.7

22.2

x. ６%
appro
R
G
A
ofit Cting pr
Opera
35.0
32.9
31.0

2. Strengthen initiatives from a long-term perspective

Financial strategy

52.6

0

2. Enhance shareholder returns

2020

2021

2022

(FY)

(Plan)

Operating profit

Pages 44-57▼

Strategies by Business

Depreciation and amortization

EBITDA

Note: Fiscal years (FY) indicate years ended March 31.

Consolidated Targets

42

Billions of Yen

FY2020 Result

FY2021 Result

FY2022 Plan

Year-on-Year Change

Growth Rate

Net sales

584.9

572.8

600.0

27.2

4.8%

Overseas salesincl. in above

79.7

76.9

77.3

0.4

0.5%

Operating profit

31.0

32.9

35.0

2.1

6.2%

Operating profit/
Net sales

5.3%

5.8%

5.8%

0.0%

—

Profit

19.6

21.2

23.0

1.8

8.4%

EBITDA

49.4

52.6

57.2

4.6

8.7%

ROE

10.9%

10.9%

10% or higher

—

—

EPS

¥146.16¥159.19¥172.59¥13.40

8.4%

Nichirei Group Integrated Report 2021

Progress of Main Measures
Management Strategy

Main Measures

Progress over Two Years and Outlook• Continued earnings growth in mainstay processed food and logistics

Increase profitability by strengthening
the management base and reforming thebusiness structurebusinesses amid a rapidly changing business environment• Adapted to “new normal” and achieved expanded sales, leading to sustainablegrowth• Improving earnings in marine products and bioscience remains an issue• Despite impact from COVID-19, results in the United States and Europe

Accelerate expansion of overseas businessremain firm

Value Creation Story• Expansion in overseas sales expected to fall short of plan
• Investments made to expand production capacity and for large-scale

refrigerated warehouses
Allocate resources for sustainable growth• Content of investments revised in response to changes in the businessenvironment, but three-year total for capital expenditures projected to be in linewith plan• Built Innovation Management System (IMS) and launched new businessdevelopment
Strengthen measures for longer-term growth• Operations reforms in the logistics business proceeding according to plan,

Contribute to the realization of a sustainable
society by resolving social issues through ourbusinesses• Material matters for the corporate group identified, with Group targets andImprove capital efficiency and expand
shareholder returns• Dividend level raised and stable dividend maintained

Financial Strategy

while pursuing more efficient and advanced operations, focusing on digitaltransformation (DX) for the corporate group as a whole
KPIs set for the current fiscal year and incorporated into the business plan
• Further strengthen response to ESG related issues to meet growing social pressure• ROE projected to remain at 10% or higher during the business plan period1Business Strategy

Main Measures for FY2022
Respond to changes in the business environment due to COVID-19,
focusing on expanding sales and cost management

Sales expansion using new approach• Strengthening existing mainstay products and services• Focus on measures for growing business categories and new market development• Utilize IT to enhance efficiency, and spend funds effectively

Initiatives for Achievinga Sustainable Society

Strict cost management• Invest as planned in R&D and human resource development for thefoundations of growth

Capital expenditures for sustainablegrowth2• Steadily make growth investments in Japan and overseas, and invest to

strengthen business foundations

New business creation/Strengthen ESG response

New business creation• Provide business development acceleration support (acceleration program)based on IMS, and promote commercialization of new ideas

Data• For climate change measures, implement low-carbon policies and pursue aStrengthen ESG response

response based on the TCFD declaration• Focus on further measures for “sustainable food procurement” withconsideration for the environment and human rights

Nichirei Group Integrated Report 2021

43

Business Strategy

Processed Foods Business
Nichirei Foods Inc.

https://www.nichireifoods.co.jp/en/corporate/

President’s Message•P rogress of Medium-term
Business Plan WeWill 2021
Medium-term
Business Plan

Main
Measures• Create new business opportunities• Expand existing business areas

In the processed foods business in FY2021, householduse frozen foods performed strongly as the COVID-19
pandemic led people to eat at home more frequently to
avoid going out. On the other hand, commercial-use
sales decreased in an extremely severe environment due
to the state of emergency and other restrictions inJapan, mainly in urban areas.
Operating profit increased due to factors including
improved productivity at domestic factories resulting
from the sales growth of household-use products, adecrease in general and administrative expenses, andrapid progress at our U.S. subsidiary InnovAsian CuisineEnterprises Inc.
As a new lifestyle has become established, we havebeen able to capture brisk demand for eating at home

Masahiko Takenaga

by enhancing our mainstay products such as cooked

Director, Executive Officer, Nichirei Corporation
President, Nichirei Foods Inc.

rice and chicken, speedily launching products that meet
rapidly changing food needs and increasing production
capacity in Japan and overseas.

Net Sales and Operating Profit by Business Category(Billions of yen)

FY2021
Processed Foods Business
Net Sales

ResultFY2022 Plan
YoY

Variance% Change

Forecast*

YoY
Variance% Change

225.5

-9.3

-4%

243.0

17.5

8%

Household-use Prepared Foods

70.3

5.5

8%

76.5

6.2

9%

Commercial-use Prepared Foods

86.8

-12.7

-13%

95.0

8.2

9%

Processed Agricultural Products

20.0

0.2

1%

20.5

0.5

3%

Overseas

34.8

0.0

0%

37.0

2.2

6%

Others

13.5

-2.3

-15%

14.0

0.5

4%

Operating Profit

17.2

0.4

3%

17.6

0.4

3%
* As of August 3, 2021

44

Nichirei Group Integrated Report 2021

• Business Scale

Management Strategy• Total assets: ¥138,592 million• Main Products• Main Production Facilities• Group companies: 21 companies (6 in Japan, 15
overseas) and Nichirei Technology Development
Center (R&D Department)• Employees (consolidated): 9,588• Food production factories: 19 facilities

 ori Plant, Shiroishi Plant Yamagata
M
Plant, Funabashi Plant, Kansai Plant,
Kyurei Inc., CHUREI Co., Ltd., GFPT
Nichirei (Thailand) Co., Ltd., Surapon
Nichirei Foods Co., Ltd.

(15 in Japan, 4 overseas)commercial-use products; and Product Development, toestablish a structure for rapid response to diversifying

grew a substantial 23% year on year in terms of sales. In

needs. Going forward, we are acutely aware of the needaddition, new needs have arisen as time spent cooking

to conduct product development that leads to new value

at home has increased. There is a stronger preference

for consumers, even when proposing commercial-use

for products fried in oil such as minced meat cutlets andproducts in areas such as delicatessens, hospitals andcroquettes, and there is now greater demand for larger-

senior facilities. Examples include products that are

sized products that can be stored longer now that

healthy, nutritious and offer consumers the quality ofpeople are shopping less frequently. For commercial-well-known restaurants.

Financial Strategy

has increased, and the market for frozen vegetables

use products, the markets for delicatessens and forValue Creation Story

Use of frozen foods as ingredients for home cooking

Many companies have entered the frozen food industry

hospitals and senior care facilities are expected to grow,during the COVID-19 pandemic and competition isand a chronic labor shortage is expanding opportunities

intensifying. As a pioneer in frozen foods, we aim tofor greater use of frozen foods in meals. For example,

improve our brand value by fully leveraging our drive to

expectations are high for the rollout of products that

pursue deliciousness, product development capabilities,

reduce the burden of food preparation, such as mealindustry-leading production capacity and diverse

kits that combine vegetables, meat, fish and sauce.

customer base.

between the conventional household-use and commercial-Business Strategy

As these changing needs break down the barriers• Overseas Strategy

use business categories, our focus in FY2022 will be on
creating new business opportunities and expanding

Outside Japan, we intend to further expand our market

existing business areas.

share in the United States and to enhance our productdevelopment functions and increase product value in• Advantages of Nichirei Foods Inc.

China and Brazil.

Our major advantage is our processing and production

States aims to expand its market share with the launch

technologies, which are dedicated to reproducing theof new household-use products and effective sales

deliciousness of meals made by hand or by professional

promotion activities. It is also considering establishingchefs. How we address consumer changes to create

in-house production functions.

InnovAsian Cuisine Enterprises Inc. of the United

In China, we have established a new productwill be the key to further increasing the value of frozen

development center as part of our growth strategy forfoods in Japan’s rapidly changing macro environment.

internal sales, and aim to differentiate our products

In addition to efforts in our existing business areas, wefrom the design stage through joint development withwill work hard to develop products and provide value incustomers by industry category.

a wide variety of industries.
However, we are aware that we have not been fast

Initiatives for Achievinga Sustainable Society

new business opportunities that utilize this advantage

In addition, in Brazil we aim to increase sustainablevalue in our acerola business from the cultivation stage.
Acerola has gained a positive reputation in the globally

established two new departments in spring 2021:

growing “clean label” market as a natural source ofMarketing, to integrate promotion and branding, which

vitamin C with a strong antioxidant effect. We will work to

had been conducted separately for household-use andexpand this business, mainly in markets outside Japan.

Nichirei Group Integrated Report 2021

Data

enough in our response to change. That is why we45

Processed Foods Business• Business Details
Nichirei Foods Inc. provides frozen foods (household-use
and commercial-use), retort pouch foods and wellness

Household-use
PreparedFrozen Foods

Commercial-use
PreparedFrozen Foods

31%

39%

foods that utilize the company’s unique capabilities in
product development and quality assurance. Our frozen
foods business in Japan is characterized by high market
share for chicken, processed rice products, frozen

9%vegetables, and spring rolls in both the household-use

Othersand commercial-use categories, and the large number ofcommercial-use products handled for the home meal

FY2021
Sales Composition

Processed
Agricultural
Products

Overseas15%

6%• Household-use• Commercial-use Prepared
Prepared Frozen Foods
Frozen Foods

replacement (HMR) and delicatessen categories. Our
overseas business is focusing on the development andMain sales outlets:

sale of Asian food products in North America.

Main sales outlets:

	Volume retailers,
drug stores andconvenience stores	Volume retailers (delicatessens),
convenience stores, restaurants
and food services• Market Environment
Sales Ranking of Frozen Food Manufacturers (Billions of yen)

Household-use Frozen Foods Market Scale(Billions of yen) ■■ Frozen Vegetables■■ Prepared Frozen Foods

800
82.4

84.7

85.7

YoY

YoY

Householduse:
Commercialuse ratio

FY2020110.7
90.3

FY2021

677.7

600
598.8

609.6

606.4

622.9

400

200

0

2016

2017

2018

2019

2020

(Year)

Source: Market scale calculated by INTAGE Inc. SCI consumer panel (Spending
per 100 people (age 69 and under) at retail outlets only (all industry
categories)

Nichirei

229.6

2.3% 220.2-4.1%

45 : 55

Company A

211.2-0.8% 198.2-6.1%

65 : 35

Company B

193.4

4.0% 193.9

1.3%

56 : 44Company C

179.8

0.9% 174.5-2.9%

36 : 64

Company D

108.0

-2.7%

-6.8%

63 : 37

99.1

Source: Reishoku Nippo, Shokuhin Sangyo Shimbunsha Co., Ltd• Capital Expenditures□ xpected 9% compound annual growth rateE
(CAGR) for EBITDA over three years

Capital Expenditures and EBITDA
EBITDA (Billions of yen)

Capital expenditures (Billions of yen)25■■ Capital expenditures (including leased assets)

EBITDA28

26.2□

Invested in labor saving to improve productivity,
the environment and other areas in addition toinvestments for growth

20
15
10

□

 etween March 2017 and March 2021,
B
production capacity increased more than 10%
in Japan and more than 40% overseas

23.7

5

18.89

23

22.6

19.6

13.44

20.3

18.7
9.90

7.37

2018

2019

18

8.05

4.02

0

13

2017

2020

2021

2022
(Plan)

Note: The plan for FY2022 reflects figures announced on May 11, 2021

46

Nichirei Group Integrated Report 2021

(FY)Management Strategy

Close Up

Nichirei do Brasil Agricola Ltda. Receives Gold Rating in
EcoVadis Sustainability Assessment (2021)
Nichirei do Brasil Agricola Ltda. (“Niagro”), a Nichirei Foods subsidiary in

Value Creation Story

Brazil, received a gold rating in the 2021 sustainability assessment by
EcoVadis, placing in in the top 5% of all companies that underwent theassessment. For five consecutive years starting in 2016, EcoVadis, a leading
global organization providing supply chain sustainability assessments, had
given Niagro a silver rating for its ongoing initiatives in the areas of theenvironment, labor and human rights, ethics, and sustainable procurement. Niagro’s received its firstgold rating in 2021 as a result of its high scores in the ethics category for its steady activities in linewith its code of conduct, and in the sustainable procurement category for educating contract

Financial Strategy

farmers about cultivation and conducting CSR training.

Participation in the Japan Project of the “10x20x30”
Food Loss and Waste Initiative

Business Strategy

Nichirei Foods is participating in the Japan Project of the“10x20x30” Food Loss and Waste Initiative, a movement byretailers and food manufacturers worldwide to reduce foodloss and waste. Advocated by the World Resources Institute (WRI), a U.S. think tank that conducts
policy research and develops technologies at the intersection of the environment and humandevelopment, the 10x20x30 initiative brings together 10 of the world’s biggest food retailers andproviders to each engage with 20 of their priority suppliers with the aim of halving rates of food loss andwaste by 2030.

Initiatives for Achievinga Sustainable Society

Initiatives at Nichirei Foods’ Factories in Japan
In joining the 10x20x30 Japan Project, Nichirei Foods set a target for FY2031 to reduce animal andplant residues per unit of production at domestic food factories by 50% compared with FY2020. We
also aim to maintain a recycling rate of at least 99% for waste (including non-food items) at all
business sites in Japan. To achieve these targets, we are working to reduce the amount of waste
generated by revising production processes and product designs, to donate as food what we
previously disposed of as waste, and to conduct recycling, including conversion to animal feed andindustrial products.

Data

Nichirei Group Integrated Report 2021

47

Business Strategy

Temperature-controlled
Logistics Business
Nichirei Logistics Group Inc.

https://www.nichirei-logi.co.jp/english/index.html

President’s Message• Progress of Medium-term
Business Plan WeWill 2021
Medium-term
Business Plan

Main
Measures• Accelerate efforts for operational
reforms and introducing a new
personnel system• Develop innovative logistics solutions• Optimize collection of fees
• Expand overseas businessIn the logistics business, net sales increased in FY2021,
and operating profit increased for the sixth consecutive
year. In the overall market, although cargo handled forsome business categories such as restaurants decreased,
the quantity of household-use products handled increased
both in Japan and overseas as people refrained from goingout. We have been able to minimize the impact from the
COVID-19 pandemic because of the balance we maintainbetween household-use and commercial-use cargo.
During the three-year period of our current Mediumterm Business Plan WeWill 2021, we are working toachieve four objectives: (1) implement work style reforms
through business innovation and the introduction of a new
personnel system; (2) establish a business model as a

Kazuhiko Umezawa

solutions company in the logistics field; (3) receive

Director, Executive Officer, Nichirei Corporation
President, Nichirei Logistics Group Inc.

appropriate payment for the services we provide; and (4)expand overseas business.

Net Sales and Operating Profit by Business Category(Billions of yen)

FY2021
Logistics BusinessNet sales
Japan
Logistics network
Regional storage
Overseas
OthersOperating profit
Japan
Logistics network
Regional storage
Overseas
OthersResult
212.3
172.2
102.8
69.4
36.5
3.6
13.1
12.1
5.1
7.0
1.4
-0.4

FY2022 Plan
YoY

Variance
5.8
6.8
1.9
4.9
-1.0
0.0
1.3
1.2
1.0
0.2
0.2
-0.1

% Change
3%
4%
2%
8%
-3%
1%
11%
11%
23%
3%
14%
—

Forecast*
224.0
180.0
104.0
76.0
39.5
4.5
14.3
13.1
5.4
7.7
1.6
-0.4

YoY
Variance
11.7
7.8
1.2
6.6
3.0
0.9
1.2
1.0
0.3
0.7
0.2
0.0

% Change
6%
5%
1%
10%
8%
25%
9%
9%
6%
11%
12%
—
* As of August 3, 2021

48

Nichirei Group Integrated Report 2021

• Total assets: ¥181,136 million• Main Facilities istribution Centers: Funabashi DC,
D
Higashi-ogishima DC, Heiwajima DC,
Daikoku DC, Nagoya Minato DC,
Osaka Futo DC, Osaka Shinnanko DC
Cross-Docking Centers: Kawasaki FAZ XD,
Kansai XD• Group companies: 22 companies in Japan, 11 companies
overseas (including 6 affiliates in Japan and 2 overseas)• Employees (consolidated): 4,277• Facilities: 114 in Japan, 26 overseas(16 in Europe, 6 in China, 1 each in Thailand and Malaysia)

We are also an industry leader in terms of solution

have targeted, we have been working for the past fiveprovision and consulting capabilities in the field of logistics.

years on introducing advanced technologies such as AI

Our current focus is on consulting, in which we visualize,

and robotics. Regarding our new personnel system, it isanalyze and evaluate data obtained on-site and elsewhere

facilitating greater freedom in working styles, and theto co-create logistics systems that are the best fit for thenumber of women seeking managerial positions, even at

customer’s management strategy and sales policies.

sites other than the head office, has increased. For (2), we

Human resources who can create valuable user experiences

aim to establish a business model for solving customer

are crucial for strengthening our solution provision
capabilities. With this in mind, we are working to enhance

this process we are also expanding our conventional 3PL

training by rank and function. We are also deploying

business and increasing the number of employees with

cutting-edge technologies such as AI and robotics tospecialized skills. To receive the appropriate payment set

automate operations and enable logistics sites to beforth in (3), we have set company-wide targets for theoperated by anyone, without relying on tacit knowledge.

Financial Strategy

issues using our specialized know-how as an LLP.1 Through2

Value Creation Story

For objective (1), regarding the business innovation we• Main Businesses
・Storage・Transportation
・Cross Docking (XD)
・Overseas business・Third-party logistics (3PL)・Engineering services

three-year plan period to work systematically. For (4)expanding overseas business, we have been expanding

Management Strategy• Business Scale•O verseas Strategy

our business base through ongoing investments for growth
Overseas, we will continue to invest for growth and expand

to concentrate on this area, stepping up our pace andour business base. In FY2022, we will expand warehouse

focus with a view toward the post-COVID era.

facilities in the Port of Rotterdam in the Netherlands to

1. LLP (Lead Logistics Provider): A company that supports the formulation of
supply chain management strategies, logistics strategies and businessprocesses for customers, in addition to the logistics operations andmanagement provided in 3PL.

enhance one-stop services for customs clearance, storage

2. 3PL (Third-party Logistics): A logistics business format in which all or part ofa company’s logistics functions are outsourced to a third-party company
with the relevant know-how. 3PL also involves planning, designing andoperating logistics from the standpoint of the shipper.

and transport, and strengthen our business base at our two
facilities in France. Capturing Brexit-related demand forcustoms clearance and storage will also lead to growth inour port business through coordination among facilities. In
Asia, demand for logistics is increasing in China, where

Initiatives for Achievinga Sustainable Society• Advantages of Nichirei Logistics
Group Inc.

Business Strategy

and have secured a solid business model. We will continue

we will continue working to handle existing customers andcapture new demand, mainly in the area around Shanghai.

Nichirei Logistics Group’s refrigerated warehouses have thelargest total storage capacity in the industry in Japan, andtogether with its transportation and delivery network, its
ability to provide universal service is its greatest advantage.
We also have a diverse, exceptionally broad and deeprooted customer base, with companies ranging from thosethat operate in a wide area to local enterprises, products

Data

ranging from raw materials to finished items, anddistribution ranging from upstream to downstream. The
way we integrate our customers and cargo enables us toachieve high operation rates in our own network.

Nichirei Group Integrated Report 2021

49

Temperature-controlled Logistics Business• Business Details
Nichirei Logistics Group is the largest logistics group in

Domestic Refrigerated Warehouse Facility Capacity
Capacity(thousands of tons)

Area

Number of
Facilities

Hokkaido

788refrigerated warehouses; an overseas business that has

Tohoku464

operations in Europe, China and the ASEAN region;

Kanto

18

563

and engineering services for all stages from planning

Chubu

11

221

Kansai12274

We provide the value of universal, one-stop service

Chugoku/Shikoku

12

130

through high-performance facilities that have the leading

Kyushu12

175

capacity in Japan and that offer meticulous services.

Total

76

1,515

Japan, consisting of a logistics network businessfocused on transportation, XD, LLP and 3PL
businesses; a regional storage business that operates

and design to maintenance and management oflogistics facilities.

Note: As of March 31, 2021

• Business Details
Others3%

Quantity of Goods Stored by Product Category in
the Domestic Refrigerated Warehousing Industry

Frozen foods（Millions of tons）

3,000■■ Marine products (including processed food)■■ Meat and poultry products (including processed food)■■ Agricultural products (including processed food)■■ Frozen foods■■ Others
148
117
120
108
115

1,000

0

751

756

358

372

349

608

644

627

729

696

337

359

615

605

498

479

476

474

486

2015

2016

2017

2018

2019

Inventory
Composition by
Product Category(FY2020)

Agricultural
products(including
processed food)

2,000
736

Marine products(including
processed food)

17%

35%

Meat andpoultry products(including
processed food)

18%

27%

(Year)

Source: Compiled by Nichirei based on Japan Association of Refrigerated
Warehouses documents• Capital Expenditures□□□

Expected 5% compound annual growth rate
(CAGR) for EBITDA over three years
Invested in shoring up infrastructure,including investments for long-term facility
utilization and eco-friendliness, in addition
to investments for growth
Between March 2017 and March 2021,
production capacity increased around 10%
in Japan and around 20% overseas.

Capital Expenditures and EBITDA
Capital Expenditures (Billions of yen)

30

EBITDA (Billions of yen)■■ Capital Expenditures (including leased assets)

EBITDA

24.6

25

24

23.6

20
21.7

19.92

19.82

15
10
5

22
20.7
20.0

10.09

21.0

17.07

11.90

20

7.59

18

0

2017

2018

2019

2020

2021

2022
(Plan)

Note: The plan for FY2022 reflects figures announced on May 11, 2021

50

Nichirei Group Integrated Report 2021

26

(FY)

Management Strategy

Close Up

Simultaneous Bulk Transport of Frozen andRoom Temperature Products
Nichirei Logistics Group, together with NEXT Logistics Japan, Ltd. (NLJ), started Japan’s first

Value Creation Story

simultaneous bulk transport of frozen and room-temperature products using double-trailer trucks in
March 2021. These 25-meter double-trailer trucks feature a room-temperature trailer coupled directly
to the tractor, towing a refrigerated trailer. These trucks operate between relay points (XD centers) in
the Kanto and Kansai regions.
Operating Scheme
Sorting
Loading
UnloadingRoomtemperature
products

Nishinomiya
XD

Newly added
scheme(Roomtemperature+ Frozen)

ToyotaSales
OfficeRoomtemperature
products

Sagamihara
XD

Roomtemperature
products
Temperaturecontrolled
products

Temperaturecontrolled
products

Trailer coupling/decoupling

Temperaturecontrolled products

TemperatureTemperature- controlledcontrolled
products
products

Trailer coupling/decoupling

Business Strategy

Double-trailer truck

Roomtemperature
products

Roomtemperature
products

Sorting
Loading
UnloadingFinancial Strategy

Existing
scheme(Roomtemperature+ Roomtemperature)

Logistics Network Inc. container

Initiatives for Achievinga Sustainable Society

Enabling Transport of the Load of Two Conventional Trucks in a Single Trip
By improving transportation and delivery efficiency, double-trailer truck operation can also be used tocope with the problem of Japan’s shortage of drivers, which has become serious. Combining frozen
and room-temperature products for transport in a double-trailer truck enables one driver to transport
the load carried by two conventional trucks. Moreover, simply coupling and decoupling the second
trailer from the tractor enables simultaneous transportation of two different loads, leading to a
reduction in cargo handling work and waiting time at each XD center and substantially reducing theburden on drivers.
Going forward, we will confirm the benefits of this type of operation in areas such as labor saving andreduction of environmental impact. We also plan to increase the types of cargo that can be bundled
and carried to promote the evolution of the high-efficiency trunk-route transport scheme that NLJ is

Nichirei Group Integrated Report 2021

Data

building into a system that can be used by a wider range of shippers and transport companies.

51

Business Strategy

Marine, Meat andPoultry Products Business
Nichirei Fresh Inc.

https://www.nichireifresh.co.jp/en

President’s Message• Progress of Medium-term
Business Plan WeWill 2021

Medium-term
Business Plan

Main
Measures• Conduct sustainable procurement ofmarine, meat and poultry products• Expand sales of premium ingredientsand other value-added products• Develop and step up sales ofprocessed products

In FY2021, net sales in the marine, meat and poultry
products business decreased due to a decline inshipments to restaurants, but operating profit increased
year on year due to growth in sales for home cooking andcutbacks in expenses, among other factors.
In the marine products business, while the market in
Japan is shrinking as consumers eat less fish, demandremains high overseas, making procurement moredifficult. We are aware of the continuing need to focus on
profitability in procurement and sales and to control costs.
In the meat and poultry products business, given thecontinuing firm demand for meat, we will continue toWataru Tanabe

capture demand for products for home cooking and step

Director, Executive Officer, Nichirei Corporation
President, Nichirei Fresh Inc.

up sales of processed products for the home meal
replacement (HMR) category.
Under the keywords fresh, delicious, safe, secure,
healthy and eco-friendly, Nichirei Fresh has been
conducting business mainly through joint development

Net Sales and Operating Profit by Business Category(Billions of yen)

FY2021Marine, Meat andPoultry Products Business

MarineProducts
Meat and
Poultry
Products

ResultFY2022 Plan
YoY

Variance% Change

Forecast*

YoY
Variance% Change

Net sales

63.1

-2.7

-4%

60.0

-3.1

-5%

Operating profit

0.5

0.1

18%

0.7

0.2

34%

Net sales

84.1

-4.2

-5%

88.2

4.1

5%

Operating profit

1.3

0.4

43%

1.6

0.3

23%
* As of August 3, 2021

52

Nichirei Group Integrated Report 2021

• Business Scale• Total assets: Marine products: ¥26,005 million
Meat and poultry products: ¥19,344 million• Group companies:
Marine products: 2 companies in Japan, 6 companies overseas
Meat and poultry products: 5 companies in Japan• Employees (consolidated): Marine products: 636
Meat and poultry products: 452• Food production factories: 8 (7 in Japan, 1 overseas)• Main Production Facilities

Marine products: Fresh Maruichi Inc.,
Trans Pacific Seafood Co., Ltd.
Meat and poultry products: Fresh Chicken
Karumai Inc.,
Nichirei Fresh Process Inc.

Value Creation Story

with suppliers, but going forward we will ramp up our shift

Management Strategy• Main Businesses• Advantages of Nichirei Fresh Inc.

to processed products. In the meat and poultry products
Our advantages are the network and partnerships wevalue, with a focus on sales of premium ingredients such

have built with suppliers worldwide since Nichirei wasas the Amani-no-Megumi meat series and Junwakei

founded, and our functions as a manufacturer and as achicken. In October 2020, Junwakei chicken became thetrading company for both marine products and meat andfirst poultry product in Japan to acquire Specific Japanesepoultry products. We also view our human resources with

Agricultural Standards (JAS) certification for sustainability.

specialized knowledge and experience as anotherWe intend to continue to proactively advance this local

advantage, along with the technological and productlivestock circulating model.

development capabilities that enable us to handle various

In the marine products business, since 2006 we have

Financial Strategy

business, we will work to develop products with healthlevels of processing using our own facilities.

engaged in Inochi-no-Mori Project1 nature conservation
activities involving sustainable extensive farming of• Overseas Strategy

giant tiger prawns and planting of mangrove trees in
We consider our overseas business to be one of ourextended to whiteleg shrimp ponds in Sumatra, Indonesia,

growth fields. Demand for marine products remains

obtained Aquaculture Stewardship Council (ASC)high outside Japan, spurring competition in global

certification in 2018. In 2020, mangrove tree planting

procurement. We aim to ramp up our overseas sales

began in earnest, with plans to plant about 280,000. In

organization to expand sales of sushi and other processed

addition, we are gradually increasing the handling ofmarine products and to conduct ongoing sales promotion

2

marine products certified by the Marine Stewardshipwith area partners in markets where there is room forCouncil (MSC) and as of June 2021, 20 fish species we

expansion. In addition, we plan to increase the utilization

handle are certified marine products. In the years ahead,rate of company-owned overseas production facilities to

we plan to increase the variety of sustainable marine

stabilize profits.

3

Business Strategy

Kalimantan, Indonesia. These activities, which were

Initiatives for Achievinga Sustainable Society

products we handle.
See page 67 for details on Amani-no-Megumi.
See page 30 for details on Junwakei chicken.
1. Inochi-no-Mori Project: https://www.nichireifresh.co.jp/inochinomori/ (Japanese only)
2. ASC certification requires that marine products have been farmed in a sustainable manner.
3. MSC certification requires that marine products are from wild-capture fisheries using methods that
do not deplete the natural supply.

Nichirei Fresh Products That Have Obtained MSC/ASC Certification
MSC Certification Number

ASC Certification Number

MSC-C-52165

ASC-C-01632

Giant tiger prawn, whitelegshrimp, Pacific cupped oyster,Atlantic salmon, coho salmon,
rainbow trout

Data

Chinook salmon, silver salmon,
pink salmon, chum salmon,
sockeye-red salmon, Pacific cod,northern rock sole, yellowfin sole,
English sole, walleye pollock,arrowtooth flounder, great
Atlantic scallop, silver smelt,snow crab, herring, arctic surfclam, red king crab, longfin
inshore squid, Pacific oyster

Nichirei Group Integrated Report 2021

53

Marine, Meat and Poultry Products Business• Business Details (FY2021)
Marine Products Business
ShrimpFish roe
Ratio of
Sales byMarine Species

Meat and Poultry Products Business
Wholesale fisherymarketRestaurant

Ratio of Salesby Marine
Products
Business
SectorOctopus
Shellfish

OthersVolumeretailer/
Others

Delicatessen/
VolumeHome meal replacement
retailer(HMR)(processedmeat)
Ratio of
Co-op
Sales byLivestock
Business Restaurant/
OthersSectorChicken
Pork

Ratio of
Sales by Typeof Livestock
Product
Beef• Market Environment
Consumption of Meat and Poultry Products

Marine Products Business(Thousands of tons)

Demand for marine products remains high worldwide,

Beef

Pork

Chicken
4-Year Average
Growth Rate
2,223
2%

2,500

making procurement increasingly difficult. On the other
hand, competition in the domestic industry is intensifying

2,092

2,140

2,169

2,204

1,763

1,812

1,827

1,812

1,827

861

904

930

937

930

2016

2017

2018

2019

2020

2,000

in Japan’s shrinking market as consumers eat less fish.

1%

1,500

Meat and Poultry Products Business
Rising prices for corn and other grains have driven up the
supply price of compound feed, affecting procurement
prices for meat and poultry. In addition, amid an increase

1,000

500

in consumption spurred by rising demand for homecooking, the market price of domestic chicken has been

2%

(Year)

Source: Compiled by Nichirei Fresh based on Agriculture & Livestock Industries
Corporation documents

trending upward, partly due to supply instability following
an outbreak of avian flu in Japan.

• Performance
Marine Products Business• Focused on selling highly processed products centeredon the four major marine species, including shrimp,
our mainstay• Although handling of products for restaurants decreased
in FY2021, growth in sales of octopus, fish roe and otherproducts for home cooking contributed to increased profit.
Net Sales and Operating Profit for Marine Products
Net sales (Billions of yen)■■ Net sales

Operating profit (Billions of yen)
Operating profit
0.8

140
120
100

0.7

0.7
0.4

80
68.6

0.4
0.3

0.2

68.7

68.8

69.4

71.5

60

Net Sales and Operating Profit for Meat andPoultry Products
Net sales (Billions of yen)160■■ Net sales
1.6

0.6

0.5

0.4

0.2

71.2

0.8

Meat and Poultry Products Business• Sales of fresh chicken and processed products for HMR
remained strong, while increasing the profitability ofimported product sales was a major focus.
• Sales of imported frozen foods were weak in FY2021
but profit increased due to firm sales for the meat market.

120

0.2

63.1

80

60.0

40

0.4

89.5

92.0

0.1

0.0
65.8

0.4

1.3

Operating profit (Billions of yen)
1.6
1.6
Operating profit
1.5

1.3

1.2

0.9

0.6
0.4
88.2

0.0

2014 2015 2016 2017 2018 2019 2020 2021 2022
(Plan)

(FY)

80.1

88.1

90.4

91.1

88.3

84.1

40

20
0

0

2014 2015 2016 2017 2018 2019 2020 2021 2022
(Plan)

54

Nichirei Group Integrated Report 2021

(FY)Management Strategy

Close Up

Environmental Reclamation and Biodiversity Conservation
Activities through the Inochi-no-Mori Project

Value Creation Story

For 15 years since December 2006, Nichirei Fresh has been involved in a project to restore a local
mangrove forest in collaboration with Tarakan City in Kalimantan, Indonesia, and a local supplier. We
sell shrimp raised with an eco-friendly method called extensive aquaculture that utilizes the tides andnatural features of the sea, without electricity or feed. Part of the proceeds from sales are used to fundmangrove tree planting (conducted annually), restoration and conservation activities. At the start of the
project, there were about 6,000 trees, and as of 2018 the mangrove forest we have been planting had
grown to the size of about 65 Tokyo Dome stadiums (just over three square kilometers).
So far, planting has mainly been in and around ponds that had been depleted through use of intensive
aquaculture,* a common shrimp farming method in Asia, and then abandoned. Ongoing mangrove
planting has regenerated the coastal environment and restored the ecosystem of native flora and fauna.
We will continue working in collaboration with stakeholders in the supply chain to help resolve
social issues through extensive aquaculture, a sustainable farming method with low environmental
impact, and through mangrove planting for environmental reclamation.

Financial Strategy

https://www.nichireifresh.co.jp/inochinomori/ (Japanese only)* Intensive aquaculture: A marine farming method characterized by cutting down seaside and waterside woodlands and mangrove
forests to establish large-scale artificial ponds for breeding a large volume of shrimp. Shrimp feed contain antibiotics. These and otherdrugs administered in raising the shrimp negatively impact the ecosystem of soil, rivers and seas. This impact is one reason shrimp
farming is unsustainable. Such farms are abandoned as wasteland, which has become a social issue. Another issue is CO2 emissions
due to the large amounts of electricity and oil consumed to operate paddle aerators that are employed to prevent shrimp in artificial
ponds from dying due to lack of oxygen.

Product from the Inochi-noMori Project

Business Strategy

Large mangrove trees

A large giant tiger prawn raised throughextensive farming

Rollout of MIRAI MEAT
Initiatives for Achievinga Sustainable Society

Supporting Young Athletes with Meat from the Amani-no-Megumi Series

Nichirei Group Integrated Report 2021

Data

Nichirei Fresh is rolling out MIRAI MEAT, a new project to provide meat tosupport young up-and-coming athletes as they train for the future. Top
athletes engage in hard work-outs, so they also need a high-quality dietfor physical fitness, fatigue recovery and weight control. Therefore, welaunched MIRAI MEAT to support young athletes through food. Over thecourse of one year, the program provides each athlete with about 70 kg ofbeef, pork and chicken from the Amani-no-Megumi series of products,
which are made from animals raised on a feed containing ingredients
derived from omega-3 fatty acid-rich linseed meal. Initially, we selected fiveathletes from a number of candidates and started the program in March 2020. The Amani-no-Megumi
series of meats aims for a balance between nutrition and deliciousness. Ideal food for athletes, it haseven been recognized by physicians on the AskDoctors medical advice website.

55

Business Strategy

Bioscience Business
Nichirei Biosciences Inc.

https://www.nichirei.co.jp/bio/english/

President’s Message• Transformation of the
Bioscience Business
Nichirei launched its bioscience business in the 1980s as
part of a drive to create new businesses. In addition toimport and sale of fetal bovine serum required for cell
culture, we expanded our business through manufactureand sale of cow placenta extract, which is a raw material
for cosmetics.
Since the 1990s, we have also been conducting abiomedical materials business (involving the import andsale of growth media used for cell culture), a functional
materials business* (involving the sale of powders andother products made from acerola), and moleculardiagnostics and rapid diagnostics businesses (involving
the development, manufacture and sale of diagnostic
agents using antibodies produced from cultured cells).
* The functional materials business was transferred to Nichirei Foods in June 2021.

• Progress of Medium-term
Business Plan WeWill 2021
Hideo Yokoi
Executive Officer, Nichirei Corporation
President, Nichirei Biosciences Inc.

Medium-term
Business Plan

Main
Measures• Develop and commercialize nextgeneration diagnostic drugs and devices• Promote overseas business• Create a business model that captures
technological innovations andchanging needs• Create an environment where diverse
talent can play active roles

Main Products
About Companion Diagnostics
In-vitro diagnostics for testing one’s
biomarkers or genes, enabling patients toreceive appropriate drugs or therapies.
They are used to improve the efficacy andsafety of certain drugs, and now several
companion diagnostics are used to assess
whether patients are eligible for molecular
Histofine ALK iAEP® Kit companion diagnostic

56

Nichirei Group Integrated Report 2021

Histostainer-AT
automated immunostaining device

targeted cancer therapies.

• Total assets: ¥8,727 million•M ain Facilities• Main Products• Employees (non-consolidated): 110

NichireiBiosciences Global Innovation Center・Molecular diagnostics
・Rapid diagnostics
・Biomedical materials(production and R&D facilities)P athcom Systems Corporation (California, U.S.A.)

Management Strategy• Business Scale

Value Creation Storysystem for stable supply of these products; and the

In FY2021, because of the COVID-19 pandemic there

technology to develop automated immunostaining devices

from going for check-ups at private clinics. This had theused to perform immunohistochemical (IHC) staining withgreatest impact on the rapid diagnostics business, wherethese diagnostic agents. In short, our business model is to sell

there was a decrease in sales volume of influenza antigen

and install medical devices at medical institutions that use ourtest kits, which account for about 80% of sales. The

specialized reagents, and our IHC staining technology ismolecular diagnostics business also continued to facedifficult to replicate. We currently sell raw materials for these

difficult conditions due to the decrease in the number

diagnostics directly and IHC staining devices as an OEM,* andof pathological examinations. As a result, net sales

have received numerous inquiries from all over the world.

decreased. Operating profit also decreased due to toughWe also have advantages in technologies for developing,sales conditions in Japan and a slump in performance at

producing and evaluating antibodies, as well as the know-

our U.S. subsidiary.

how for stable production and supply of high-quality

Financial Strategy

were fewer hospital visits by patients and people refrained

products using the technologies we have cultivated overOn the other hand, development of drugs in the newmany years. Moreover, the number of cancer patients inbeen brisk at pharmaceutical companies, and since their

Japan is rising as the population rapidly ages. Because

manufacturing processes often use serum, demand has

pathological diagnoses are important in cancer treatment,

increased for the serum handled by our biomedical

we believe that the molecular diagnostics business will be amaterials business. Sales of serum products have also

growth driver going forward.

increased partly due to the success of our early switchover* OEM: Original equipment manufacturer

Business Strategy

fields of regenerative medicine and cell therapy has

to online sales. In FY2022, we aim to secure profit by
expanding sales in Japan of our COVID-19 antigen test
kit and improving the performance of our U.S. subsidiary.

Initiatives for Achievinga Sustainable Society• Advantages of Nichirei
Biosciences Inc.
We have three main advantages: possessing technologies fordeveloping diagnostic agents for biomarkers using antibodies,such as the companion diagnostic Histofine ALK iAEP® kit (amainstay product of the molecular diagnostics business); a

Global Innovation Center (Sayama City, Saitama Prefecture)

Close Up

Data

Launch of Rapid Diagnostic Kit for Detecting COVID-19 and
Influenza Antigens• A rapid diagnostic kit that simultaneously detects antigen for COVID-19 andinfluenza A and B went on sale in May 2021.
• Simple determination of positive or negative results in about 15 minutes without
the need for special testing equipment

Nichirei Group Integrated Report 2021

57

Initiatives for Achieving a Sustainable Society

Environment

SocialGovernance

Addressing Climate Change (TCFD)
Climate Change Scenario Establishment and Information Disclosure
The effects of climate change are becoming increasingly serious and climate change is considered to be a contributing
factor in the frequent abnormal weather patterns and natural disasters currently occurring. Together, these events are
impacting the supply chain for food, which is the foundation of the value provided by the Nichirei Group. We recognize
the importance of appropriately responding to risks posed by shifts in the external environment caused by climatechange. At the same time, we are considering and preparing multiple scenarios in which climate change could give rise tobusiness opportunities. To this end, we are assessing climate change scenarios with respect to the four aspects of therecommended framework put forward by the Task Force on Climate-related Financial Disclosures (TCFD): governance,
strategy, risk management, and metrics and targets. By conducting appropriate disclosures of relevant information, we
hope to continue building a constructive dialogue with our stakeholders. It is in line with these ideas and because we
support its recommendations that, in June 2020, we announced our participation in the TCFD Consortium. The Grouphas positioned climate change initiatives as one of the material mattersfor achieving its vision for long-term management goals toward 2030.
As such, we are actively promoting initiatives to help resolve social
issues related to climate change.

1

GovernanceIn October 2019, we began analyzing climate change scenarios as an interdepartmental Group project, headed by thepresident, and are reviewing the scenarios across the Nichirei Group. Following discussion and review by the Group
Environmental Protection Committee in May 2020, the Board of Directors approved low-carbon policies as a long-term
environmental goal in June and disclosed them in August of the same year.
In October 2020, the director, executive officer responsible for implementing climate change strategies was appointed
as project head. The project reviewed and analyzed climate change scenarios in relation to water-related risks arisingfrom abnormal weather, which, out of the risks identified in
FY2020, would have a particularly significant financial impact on

FY2021–2022 Project Organization
Project name

Project for the Analysis of Climate
Change Scenarios

Environmental Protection Committee in May 2021, the Board of

Project head

Director, Executive Officer

Directors approved goals (measures and KPIs) for water-related

Project leader

General Manager, Technology
Management

risks as one of the Nichirei Group material measures in June andDepartment in charge

Technology Management

Departments participatingin the projectGroup Communication

year on the progress of the initiatives at Board of Directors

Controlling committee

Group Environmental Protection
Committee (meets twice annually)meetings. Relevant strategies, goals and plans are revised asReports to Board of
Directors

At least once a year

the Group. Following discussion and review by the Group

disclosed those measures and KPIs in August of the same year.
The director, executive officer in charge reports at least once aappropriate on the basis of these reports.

2

Strategy

Identification of Material Risks and Opportunities
Worldwide, the Nichirei Group is developing a range of food-centered businesses that it expects will be impacted byclimate change in various ways. We are conducting scenario analyses of how climate change might affect our businessactivities. We hope to better quantify the risks and opportunities identified in order to incorporate appropriate responses
in our management strategy. In this way, we aim to become a sustainable corporate group.

58

Nichirei Group Integrated Report 2021

We assessed the material risks and opportunities of the Nichirei Group based on two climate change

FY2021

Management Strategy

scenarios, and identified general low-carbon policies (CO2 emission reduction) as the most significant area ofGroup-wide risks and opportunities. We established long-term CO2 reduction goals and launched initiatives.

Climate-related
events(CO2 emission reduction)

General low-carbon
policies(Japan and Thailand)●

Rising sea levels (Thailand)Business continuity risk due toflooding of major cities androads, etc.)●

Rising sea levels (Japan)

Large

Businesses•

Increased environmental
awareness(Increased reputational risk
for cold storage)

MediumIndirect(outside the Company)●

General abnormal weather(Decrease in sales and profit due todamage to factories and storage
warehouses and disruptions to ourlogistic network)●

Electrification of technologies,
conversion to renewable energy

Strengthening of environmental
countermeasures
within the supply chain(Increase in raw material procurement
prices due to changes in power sources)(Curtailment or suspension of transactions
due to insufficient environmental response)

●

●

●

Information disclosure(Increased costs associated with themandatory disclosure of information
related to eco-friendly products)(Increased purchase prices
for rice and chicken)

Rise in temperature

Electrification of technologies(Increase in cost of electricity required
to maintain freezing temperatures)(Rise in factory production costs due
to changes in power sources)

Financial Strategy

Direct(the Company)(Increased capital
expenditures in the reduction andelimination of CO2 emissions)●

General abnormal weather

●

●

•

●

(Business continuity risk due to factory flooding
and higher groundwater salinity)

Risks/opportunities(course of occurrence)

We have identified general low-carbon(CO2 emission reduction) policies as themost significant area of Group-widerisks and opportunities.

Value Creation Story

Regions

Matrix of Material Risks and Opportunities
Degree of impact

General Lowcarbon Policies

Pages 62–63▼

Initiatives to Reduce Environmental Impact●

Rise in temperature(Japan, North America and China)● Physical events (baseline scenario)

Small

Financial impact● Transitional events (1.5°C scenario)
Low(Increase in food poisoning risks and decreasein opportunities for in-store purchasing)

MediumHigh

Probability of occurrence

Selection of water-related risks arising from abnormal weather, which is a risk common to both

FY2022the foods and logistics businesses.
Business Strategy

Material Risks and Opportunities by Business and Scenario

Environmental
countermeasures
within the supply
chain

Low-carbon
policies

•

•

•

•

Increased cost for measures for converting to
renewable energy and equipment electrification,
elimination of emissions
Curtailment of transactions; higher cost ofmeasures such as the maintenance of global
certifications
Damage to refrigerated warehouses andlogistics centers

Baseline
scenario•

Strengthening ofenvironmental
countermeasures
within the
supply chain

Increased
environmental
awareness••

Generalabnormalweather•

Modal shift•

Increased
environmental
awareness•

Increased demand for frozen and processed
foods
Increased demand for ethical products that arecompliant with the Sedex platform and arecreated using globally certified raw materials
Increased demand for the curtailment of foodloss within the supply chain through thedevelopment of eco-friendly products andtechnological development
Development and expansion of demand for
products created using sustainable raw
materials
Increase in sales resulting from customer base
expansion achieved through strengthened
disaster countermeasures and greater
resilience
Cost reduction achieved through a modal shiftthat improves transportation efficiency
Increase in number of business partners due tohigher evaluations as a company that actively
discloses information related to environmental
countermeasures

Difficulty securing human resources in disasterrisk areas

Data

Generalabnormalweather•

Submerged agriculture farms, aquafarms andprocessing factories
Difficulty in obtaining raw materials and production
delays due to supply chain disruptions

Changes inweather patterns•

1.5˚C scenario

Baseline scenario
1.5˚C scenario

Low-carbon
policies

Reductions in production efficiency and volume
and submerged aquafarms

Logistics Business••Baseline scenario

Foods Business

Flooding,
rising sea
levels

1.5˚C
scenario

CommonLogistics Business

Risks common to both the Foods andLogistics businesses

Vegetables,
marine products,
and meat andpoultry products•

Opportunities

Initiatives for Achievinga Sustainable Society

ShrimpGeneralabnormalweatherFoods Business•

Chicken

Rice

Reduction of agricultural and dairy production,and steep rise in purchase prices due todeterioration in quality• Difficulty in obtaining raw materials andproduction delays due to logistic network
disruptions

Business

Baseline
scenarioRisks

1.5˚C scenario

Business

Opportunity loss caused by the slow increaseof investment in natural refrigerants and theslow adoption of technological platforms suchas electrical and low-carbon vehicles

Note: The bioscience business is characteristically resistant to impact from climate change-related events. Accordingly, we have not currently identified any material factors
in our bioscience business based on the FY2021 Group climate change scenarios.

Nichirei Group Integrated Report 2021

59

Addressing Climate Change (TCFD)

FY2022
Climate Change Scenarios in Relation to Water-Related Risks Arising from Abnormal Weather(1) Risk of Future River Flooding
Results

The location criterion is the scale ofrainfall assumed to result in flooding
according to the hazard maps ofmunicipalities in the region where thefacility is located. The assessment isconducted based on predicted rainfall
amounts.

21 facilities in Japan(8 plants and 13 refrigerated
warehouses)

Facility selection criteria

Facilities tobe assessed

Assessment criteria

Description• Facilities located in regions where
hazard maps have been prepared• Food factories with large production
volume• Refrigerated warehouses (distribution
centers) in areas with high baseflood elevation according to current
hazard maps
• Selected to avoid overrepresentationof certain regions

3

Risk Management

When creating hazard maps forregions where the facilities arelocated, three facilities in Japan
were found in locations where
the number of rainfall events
exceeding the anticipatedmaximum rainfall amount was
expected to be around thesame as the current number ofrainfall events or potentiallyhigher in the future.

(2) Risk of Future Rising Sea Levels (Tidal Flooding)Description
For facilities in areas with either no risk
or unknown risk of flooding according
to the municipal hazard map of theregion where they are located, anassessment was conducted of the riskof flooding assuming the occurrence ofa typhoon on the scale of the Ise Bay
Typhoon, one of the most destructive
typhoons in Japanese history, andfuture rising sea levels (set at 1 meter by
the Japan Meteorological Agency in
Climate Change in Japan 2020).

145 facilities in Japan
1 facility overseas• All facilities in Japan, and facilities
where significant financial risk anddistance from the coast wereconsidered (Thailand: Chicken
production facility)

Results

39 of the 145 facilities were in flood
areas according to municipal hazard
maps.
• No facilities overseas• Based on an Ise Bay Typhoon-scale
typhoon and rising sea levels, a
simple calculation was performed forthe facilities outside of flood areas
according to municipal hazard maps
or in areas for which hazard maps
had not been prepared (106 facilities).
As a result, 27 facilities were foundto be in flood areas when rising sea
levels were not considered, and 32
when rising sea levels associated withclimate change were considered.

Nichirei is a global operator of food-related businesses. Accordingly, we ensure that appropriate divisions manage theimpact of a variety of risks (including climate change-related risks encountered through business activities) on business
management from a holistic perspective, employing both rational and optimal methods. The risks are also discussed andreviewed by the Group Risk Management Committee, which is chaired by the president.
We believe that risks associated with climate change scenarios are major and could impact the entire Group. Thus, theGroup Environmental Protection Committee, chaired by the president, reviews both physical and transition risks twice ayear, based on information gleaned from relevant reports and experts’ advice. In addition, at least once a year the
director, executive officer supervising environmental management reports to the Board of Directors.
We hope to better quantify the risks and opportunities identified in order to incorporate appropriate responses in ourmanagement strategy. In this way, we aim to become a sustainable corporate group.

60

Nichirei Group Integrated Report 2021

Description
Based on actual rainfall amounts
during past droughts, an assessment
was conducted based on predicted
rainfall amounts using annual rainfallof 700 millimeters as the criteria.

Management Strategy(3) Risk of Future Shortages of Water Resources

Financial Impact• We regularly review the financial impact of water-related

Resultsrisks arising from abnormal weather and with respect toour business continuity plan. (BCP).
• The 2018 Japan floods caused some flooding anddamage from storm surges at refrigerated warehouses inValue Creation Story

Three facilities were found to
be in areas where the numberof rainfall events below anannual rainfall amount of 700
millimeters was expected to be
the same as the current numberor potentially higher in the
future.

western Japan.
• In the future, we will work on climate change
scenarios for each raw material.

Note: T his review is a simple

21 facilities in Japan
3 facilities overseas

assessment based on
expected rainfall amounts• The 30 facilities in Japan with thelargest water intake quantity and thefacilities overseas with the highest
financial risk were selected (Thailand:
Chicken production facility)

does not take into accounttransfers of water between

and does not include theimpact of social conditions(such as water intake). It also

Financial Strategy

watersheds. Such factors
are important in water
resource assessments, andtherefore must be included
when conducting a detailed
assessment.

Nichirei Group Materiality

Pages 12–13▼

Indicators and Targets

Business Strategy

4

We have set forth climate change initiatives as one of our material matters and have established the indicatorsand targets below for our key initiatives.

Initiatives for Achievinga Sustainable SocietyGroup Measures: Promote reduction of CO 2 emissions per unit of production and utilization ofrenewable energy at food factories and logistics centers, and disclose
information based on the TCFD recommendations.
Group KPI:
50% reduction in CO2 emissions (compared with FY2016; Scope 1 and 2 in Japan)

Data

Nichirei Group Integrated Report 2021

61

Environment

Initiatives for Achieving a Sustainable Society

SocialGovernanceInitiatives to Reduce Environmental Impact
The Nichirei Group formulated the Nichirei Group Environmental Policy with a focus on three priority
issues: prevention of global warming, promotion of sustainable recycling, and living in harmony
with nature.
Since the Group’s activities span the entire supply chain—food factories, logistics centers, andother worksites—it must play a part in the environmental initiatives and activities of both customers
and business partners.
The Group is aware of the substantial impact that climate change is having on its business, as its
support of food-related infrastructure depends on natural ecosystems for raw materials. Accordingly,
the Group and its business partners undertake the following:• Use energy efficiently in the production of food products• Reduce greenhouse gas emissions by using more efficient temperature-controlled storage and transportation• Reduce climate load throughout the supply chain by promoting the use of renewable energy
Nichirei Group Environmental Policy andNichirei Group Bio-diversity Policy

https://www.nichirei.co.jp/english/csr/environment/concept.html

Environmental management system

https://www.nichirei.co.jp/english/csr/environment/system.html

Long-term Environmental Goals and Low-carbon Policies
Addressing Climate Change (TCFD)

Pages 58–61▼

Pages 12–13▼

Nichirei Group Materiality

We will implement low-carbon policies in response to one of our material matters and in pursuit of our long-term
environmental goals. We will actively implement the following three measures during the 10 years from 2021 through 2030.

Having endorsed the TCFD recommendations,
the Nichirei Group is promoting the following low-carbon policies:
Pillar of low-carbon policy

Overview

1

The establishment of long-term
CO2 reduction goals• 50%* reduction in CO2 emissions (compared with FY2016) in Japan,
Scope 1 and 2 in 2030

2

The promotion of CO2 reduction
countermeasures overseas• Initiate data collection and other efforts at overseas worksites• Review and promote CO2 reduction countermeasures at overseas worksites

3

The promotion of CO2 reduction
countermeasures within Scope 3• Promote data collection and other efforts within Scope 3• Review and promote CO2 reduction countermeasures within Scope 3

Target scopeJapan Scope
1 and 2
Overseas Scope
1 and 2

Scope 3

* In June 2021, the target was revised upward from 30% to 50%.

■Nichirei Group CO2 Emissions■ Fixed power emission coefficient1 ■ Variable power emission coefficient2(Thousand tons of CO2)

300

280
228

Emissions intensity3(Tons of CO2 per ton of production)

269
226

260
228

225

241

Notes:
1.	Fixed power emission coefficient: The CO2 emission intensity unit

1of 0.412 [t-CO2/MWh] announced by the Federation of Electric

0.75

2.	Variable power emission coefficient: Power conversion coefficientPower Companies of Japan in FY2010, used nationwide.
223

232

used by power companies in each fiscal year utilized at each

200

0.52

0.49

0.46

0.44

0.43

0.5

worksite.
3.	Scope of power emission intensity: Nichirei Foods (Nichirei
Foods-operated factories and affiliated factories in Japan) and

100
0.25

Nichirei Fresh (affiliated factories in Japan).
	Excluding the following factories: Nichirei Foods: Nichirei Ice Inc.;

0

0

2017

62

2018

2019

Nichirei Group Integrated Report 2021

2020

2021

(FY)

Nichirei Fresh: Nichirei Fresh Farm Inc., Fresh Chicken Karumai
Inc., FRESH MEAT SAKUDAIRA Inc.

Renewable Energy
Management Strategy■Purchase of Green Energy
Since 2007, the Nichirei Group has been purchasing and stockpiling Renewable Energy Certificates(RECs)* every year for the purpose of promoting the use of renewable energy. As a result, in FY2021,
the head office building (Nichirei Higashi Ginza Bldg.; tenants that are part of the Nichirei Group)
shifted to renewable energy, making use of RECs, for all of its power usage.
In addition, since March 2020, Nichirei Foods has purchased 10 GWh worth of RECs per year tocover all electricity used in production lines for Honkaku-Itame Cha-Han (fried rice). It is also making

Value Creation Story

the shift to renewable energy.
* Green power is power generated from renewable energy sources, such as biomass, solar and wind. The CO2 emission reductions achieved through the use of power
generated from renewable energy are traded in the form of RECs.

■Utilizing Electricity Generated from Solar Power

Solar Power Generation and CO2 Reduction

The Nichirei Group is working to reduce
generation equipment on the premises
refrigerated logistics warehouses.

Chlorofluorocarbon (CFC) Initiatives

FY20191,444 MWh765 t

FY20202,068 MWh

1,003 tFY2021

2,149 MWh986 t

Nichirei Group Materiality

Financial Strategy

of food factories and on the rooftops of

CO2 reduction

Pages 12–13▼

CO2 emissions by installing solar power

Power generation■Switching to Natural Refrigerants
The Nichirei Group is adopting natural refrigerants at newly constructed or expanded
Business Strategy

food factories and refrigerated warehouses. We are also systematically replacing
equipment that uses CFC refrigerants with equipment that uses natural refrigerants.
By 2030, we will have switched to natural refrigerants for 75% of equipment used by
Nichirei Logistics Group (based on tons of equipment excluding leased equipment),
including overseas facilities, and 100% of the freezers used at Nichirei Foods’ domestic food factories and investee factories.

■Initiatives to Prevent Refrigerant Leaks
Initiatives for Achievinga Sustainable Society

In 2013, Nichirei Logistics Group introduced highly sensitive detectors (with more than
10 times the accuracy of previous devices) capable of 24-hour measurement at all
domestic facilities in order to reduce refrigerant leakage from existing refrigerators.
Regular inspections also lead to further leakage reductions.
In September 2019, we received the Special Review Committee Award at the 22nd
Protect the Ozone Layer, Prevent Global Warming Awards organized by Nikkan Kogyo Shimbun, Ltd. (THE DAILYINDUSTRIAL NEWS). The award was in recognition of our total support service for reducing CO2 emissions utilizing our
proprietary refrigerant leak prediction and diagnostic system.

Change of Fuel Used in Manufacturing Equipment
Data■Switching Boiler Fuels
Manufacturing at the food factories of Nichirei Foods entails a variety of processes,
including frying and baking. We are systematically switching from kerosene and heavy
oil to city gas and propane gas, which produce fewer CO2 emissions, in the boilers thatcreate the heat energy used in manufacturing.

Nichirei Group Integrated Report 2021

63

Initiatives for Achieving a Sustainable Society

Environment

SocialGovernance

Water Risk, Biodiversity, Using Less Plastic
Water Risk Assessment
https://nichirei.disclosure.site/en/themes/166

As one factor in achieving its goal of building sustainable supply chains, the Nichirei Group recognizes the importance ofwater resources in producing raw materials and conducting business, and strives to conserve them.
In FY2020, the Group conducted water risk assessments at all of its facilities (152 facilities in Japan and overseas) andidentified those facilities where water risk was high as a result of internal and external factors. In FY2021, interviews wereconducted at the three facilities identified as having high water risk, and the Group confirmed that at this time, there are nowater risks falling under the categories of quantity, quality or regulatory and reputational risks. In FY2022, investigations wereconducted at domestic facilities with respect to river flooding and storm surge risk due to typhoons and heavy rains.

Water Risk Assessment
Results of Aqueduct Water Risk Atlas evaluation (external factors)
Step 1

Water quantity risk

Water quality risk

Regulatory and reputational risk

Implementation of water risk management questionnaire(Japanese and English; evaluation of internal factors)
F
Y
2
0
2
0

Setting of question items on questionnaire

Step 2

Examining the composition of the water risk management questionnaire

Identification of high-risk facilities

Evaluation of business characteristics
Step 3

Water intake quantity

Wastewater volume

Production volume

Identification of priority facilities
F
Y
2
0
2
1

Interviews
Step 4

Water quantity

Water quality

Regulatory and reputational

Confirmation that risks have not manifested

64

F
Y
2
0
2
2

Step 5

F
Y
2
0
2
3

Step 6

Investigations at domestic facilities with respect to flooding and storm surge risks
posed by small, medium, and large rivers
Third-party water risk assessment service employed Risk analysis based on worst case scenario

Establishment of BCPs for each facility based on water risk in worst case scenario

Nichirei Group Integrated Report 2021

Renewable Energy
Management Strategy■Protecting Endangered Orchids
Since FY2004, the Nichirei Group has helped in the conservation andregeneration of the endangered orchid Cypripedium macranthos var.
macranthos and other species through research on and the breeding oforchids and other plants in Fujimi-machi, Nagano Prefecture. In 2014,
some artificially propagated orchids of this species flowered and, in
FY2020, they produced 32 blooms. This led to Nichirei entering a

Value Creation Storybiodiversity conservation partnership agreement with Fujimi-machi,
Nagano Prefecture, and the Fujimi-machi Atsumorisou Regeneration
Committee in February 2019. The Group will provide technologies
necessary for the conservation and regeneration of Cypripedium
macranthos orchids and cover a portion of the costs. In June 2021, theCommittee began selling artificially propagated blooms and seedlings,
which it hopes will help prevent excessive picking of wild indigenous

Financial Strategy

species. In our artificial pollination efforts, we avoid mixing plants from thesame lineage as much as possible in order to preserve genetic diversity.

Plastic Reduction Initiatives■Reducing Plastic Used in Frozen Food Containers and Packaging
Since 2006, Nichirei Foods has been striving to reduce the amount of plastic used for household-use frozen food productcontainers and packaging. Recently we achieved a reduction of over 200 tons for seven target items, compared with

Business Strategy

before these initiatives began. While continuing to reduce plastic use by reviewing product containers and packaging, we
will also work toward reducing our CO2 emissions.
Smaller packaging

Smaller and thinner trays

Initiatives for Achievinga Sustainable Society■Switching to Biomass Film and Ink

Thinner Packaging
Fiscal year

Thinner packaging

Products

We use biomass ink on some

Measures

Since FY2007

Imagawa-Yaki (Japanese waffle)

Elimination of trays

product packaging such as forSince FY2010

Yaki-Onigiri (grilled rice ball) 10-packElimination of trays

our Obento ni Good! series.

Since FY2012

Honkaku-Itame Cha-Han (fried rice)

Thinner packaging

Biomass ink is made from

Since FY2015

Yaki-Onigiri (grilled rice ball) 10-packThinner packaging

renewable, plant-derived

Since FY2016

Honkaku-Itame Cha-Han (fried rice)

Thinner packaging(second time)

Since FY2019

Ebi-Pilaf (shrimp pilaf) andChicken-Rice (chicken rice)

Thinner packaging

Since FY2020

Ebi-to-Cheese-no Gratin(shrimp gratin) andEbi-to-Cheese-no Doria(shrimp rice gratin)

Thinner trays, reduced
tray handle width

Biomass ink logo

materials, and its use helps
reduce environmental impact.

Nichirei Group Integrated Report 2021

Data

バイオマスマーク

65

Initiatives for Achieving a Sustainable Society

Environment

SocialGovernanceFood and Health: Creating New Value
Changes are occurring under the new normal, including diversification of consumer needs andpersonalization of food and medicine. Leveraging the accumulated strengths and functions of
the Nichirei Group, we will continue to provide new value that addresses the changing market
environment and helps resolve social issues.

Addressing Problems of Drug-resistant Bacteria

Marine and livestock products raised
without the use of antibiotics andsynthetic antibacterials throughout
the entire production process.

■Antibiotic-free Chicken
https://www.nichireifresh.co.jp/product/livestock/detail/?id=376 (Japanese only)

Chemical agents, such as antibiotics and synthetic antibacterials,
are used in general broiler chicken farming to treat diseases,
prevent the spread of illnesses due to farming conducted in tightspaces, and promote growth.
Nichirei Fresh has been selling antibiotic-free chicken since2004. While vaccinated, our poultry is not exposed to chemical
agents, including antibiotics and synthetic antibacterials, that could
contribute to the emergence of antibiotic-resistant bacteria.*
Instead, our poultry farming methods take full advantage of the
innate immunocompetence of chickens.
Our farming technology takes into consideration the growing
conditions and applies Nichirei Fresh’s proprietary expertise topoultry farming, resulting in chickens with higher naturalimmunocompetence and greater natural resistance to diseases.
This is achieved through the use of such feed ingredients as lactic
acid, other probiotics, and plant-based herbal medicines that help
maintain the health of chickens and boost their immunity. Since themanure of chickens exposed to antibiotics affects soil bacteria andgroundwater, the poultry farming methods used to produce
antibiotic-free chicken also contribute to the natural cycles intrinsic
to ecosystems.

Antibiotic-resistant Bacteria That Threaten
Ecosystem Cycles
Antibiotics andsynthetic antibacterials
HumansLivestock

Food

PlantsFeed

Antibiotics andsynthetic
antibacterials

Infection
Outbreak ofantibiotic-resistantbacteria

ManureNutrients

Soil

Atmosphere Environmental
pollution

Rivers(Illustration)

Vancomycin-resistant enterococci(VRE)

Oceans* Drug-resistant bacteria: Protecting people from drug-resistantbacteria (on which antibacterial agents have little or no affect) is
becoming an issue worldwide. Those with weakened
immunocompetence who are exposed to such bacteria may not
respond to treatment with antibiotics. Drug-resistant bacteria havebeen found in livestock continuously exposed to chemical agents
such as antibiotics and synthetic antibacterials. As a result of
growing consumer interest in the United States, meat from animals
not exposed to antibiotics is becoming increasingly popular. We willcontinue to assess the issue of drug-resistant bacteria while
producing chicken in a way that contributes to human health.

Reducing Methane Emissions in Beef Cattle Farming■Addition of Key Omega (Flaxseed Oil Fatty Acid Calcium) to Feed
Ruminants such as cattle and sheep have four stomach chambers. In the
Mechanism of Cattle Methane Production(Illustration)
process of breaking down and digesting feed, microbes in the rumen (firstchamber) produce hydrogen and carbon dioxide. Microorganisms called
MethaneFactor contributing
methanogens turn these gases into methane, which is released when the
HydrogenHydrogento greenhouseeffectanimal burps. Methane is said to have 21 times the greenhouse effect ofMethane Methanogens
Hydrogengeneration
Released when
HydrogenCO2, and around 16% of all methane produced around the world comes
livestock burpfrom ruminants. Cattle account for roughly 70% of this total and are
Inclusion of flaxseed oil fatty
considered a factor in the acceleration of global warming.
acid calcium in feed reduces
methane emissions.
Research has shown that including a certain portion of flaxseed oil fatty
acid calcium (feed raw material processed from flaxseed oil) in beef cattle
feed improves the efficiency of weight gain, reducing the fattening period, which in turn leads to a reduction of methane
emissions. In 2009, with the aim of putting this technique to practical use, Nichirei Fresh conducted a series of fattening
trials with the cooperation of domestic beef cattle farmers, JA (Japan Agricultural Cooperatives) and animal research
centers in each region and established optimal fattening programs for each breed of beef cattle. Unsaturated fatty acids,
which are abundant in flaxseed oil, combine with hydrogen in the rumen to suppress methane emissions. The process
also prevents energy loss, which translates into a reduction of feed costs due to a reduced fattening period and increased
shipping weights, bringing an economic benefit to livestock farmers.

66

Nichirei Group Integrated Report 2021

New Value in Food and HealthManagement Strategy■Meat Production: Focus on Omega-3 Fatty Acids Amani-no-Megumi Meat
http://www.goodbalancemeat.jp/ (Japanese only)

Comparison of Amount of Omega-3 Fatty Acid(α-linolenic Acid) That Body Can Absorb from
100-Gram Pork Loin

436

(mg)
450

300

150

110

0

Standard pork loin

Omega Balance Pork (domestic)

Financial Strategy* There are individual differences among cattle.

Flax flowers and seeds

Value Creation Story

Nichirei Fresh produces and sells meat, and has been focusing on
omega-3 fatty acids, which are essential for human health. We
have improved the balance of omega-3 and omega-6 fatty acids inour meat by giving chickens, pigs and cattle* a formula feed thatuses ingredients derived from flax, which is rich in α-linolenic acid.
This results in tender and juicy meat, which we have been sellingsince 2006.
Omega-3 fatty acids, abundant in blue-backed fish, flaxseed oiland perilla oil, are converted into eicosapentaenoic acid (EPA) anddocosahexaenoic acid (DHA) in the body. However, the diet ofpeople in Japan today is often lacking in essential fatty acids, which
the body cannot synthesize, especially omega-3 fatty acids. By
promoting everyday diets that include meat containing a balance of
these fatty acids, Nichirei Fresh supports people’s health.

Source: Nichirei FreshBusiness Strategy■Meat Analogue Containing No Animal Meat: Daiz Meat
Nichirei Foods is developing meat analogue products as a new undertaking infrozen foods that will contribute to a more sustainable society. We reproduce theflavor and characteristics of meat without using animal meat by combining
various kinds of soy meat, including that from germinated soybeans grown using
the proprietary technology of DAIZ, which is engaged in advanced research on
soybeans. Moreover, through the application of our know-how and technology
for reproducing delicious flavors, we have developed products that are both
healthy and tasty.

Initiatives for Achievinga Sustainable Society■Possibilities of New Effects of Acerola
https://www.nichirei.co.jp/news/2021/382.html (Japanese only)

Nichirei Group Integrated Report 2021

Data

In research into the body’s high rate of absorption of vitamin C from acerola, Nichirei Foods analyzed the effects ofacerola powder and acerola juice on gut microbiota.
Our analysis showed that when human gut microbiota were supplied with acerola powder or acerola juice, there wasan increase not only in beneficial enteric bacteria such as Lactobacillus bifidus but also metabolites such as acetic acidand butyric acid, which are known to be good for the body.
We will delve deeper into these results and conduct even more sophisticated research.
With this, we expect to be able to further clarify mechanisms and utilize the results in new
research and development and product development. Food enriches people’s lives andby approaching food from a scientific perspective, we aim to realize a healthier society.

67

Initiatives for Achieving a Sustainable Society

Environment

SocialGovernance

Development of New Technologies
Needs relating to good eating habits have been growing and diversifying among customers andwithin society at large. In the drive to further strengthen its core competencies and proactively
resolve social issues, Nichirei will leverage its production technologies and expertise, while drawing
on new developments including those in AI, IoT, autonomous driving, and robotics.
■Harnessing AI to Automate and Optimize Production and Personnel Planninghttps://www.nichireifoods.co.jp/news/2020/info_id8338/ (Japanese only)

Nichirei Foods has collaborated with Hitachi, Ltd. in creating a system that uses AI to automate and optimize production
and personnel planning. In FY2021, the system was introduced at two model factories in Japan. It uses sophisticated AI
technology to reproduce and refine plans previously formulated by experts based on complex constraints. In addition tolegal and regulatory requirements involved in personnel planning, a variety of other conditions must also be considered,including individual ability, overtime, and paid leave. Until now, experts formulated plans based on such preconditions,
often relying on experience-based intuition. The new system uses AI to automate planning and identify optimal solutions
from among the various permutations, while also quantifying and incorporating intuition-based criteria. As a result,planning requires one-tenth of the time and can be conducted by non-expert employees. The system is expected tocontribute to work style reforms such as by reducing the number of hours worked and encouraging more employees touse paid leave. Given that in recent years food manufacturers have been called upon to make and supply products while
responding to fluctuations in demand, the system is contributing to improved customer satisfaction due to its applicationof advanced digital technologies and the creation of efficient production systems. Nichirei Foods will continue to harness
digital technologies to promote further improvements in productivity, reductions in lead time and inventories, as well aswork style reforms.
Production Planning Concept Diagram
A maximum ofA maximum of

16 trillion
combinations

16 trillion
combinations

in one factoryin one factory

Introduction of
optimal planning
formulation
system using

AI
Selection using
intuition basedon experience

Master settings(narrowing down)
Absolute constraints(narrowing down)
Discretionary
constraints

From a maximum of 16 trillion combinations in one
factory, production plans encompassing daily
production of products and volumes for each line
multiple proposals and personnel plans involving shift schedules areformulated automatically.
• Time used for planning• Scoring with evaluationindex from

One plan fixed

reduced to

one-tenth■Joint Development of AI-Based Foreign Matter Detection and Elimination Technologies with Kindai University
https://www.nichireifoods.co.jp/news/2018/info_id5715/ (Japanese only)

In the process of receiving ingredients for processed chicken products, we control
and maintain the quality of those ingredients using sorting technologies that include
metal detection and X-ray, near-infrared, optical, and color analysis. However,additional manual or visual inspection is often required, since the accuracy of thesemethods in distinguishing the quality of ingredients decreases depending on theregularity of the shape of the ingredient, and the position and angle of foreign
matter or impurities.* In selecting ingredients for chicken products, three major
impurities in particular must be eliminated: bones, feathers and blood spots. In
February 2018, in partnership with Kindai University, Nichirei Foods developed
sorting technologies powered by AI. With the ability to locate impurities with
pinpoint accuracy, AI-powered technology prevents rejection of impurity-free meat,leading to reduced food waste.
68

Nichirei Group Integrated Report 2021

Blood spots

Bruising* Impurities include parts of food normallyconsidered to be inedible, such as bones andfeathers in the case of chicken.

■Expiration Date Reader AI Solution for Tablet Inspections*Management Strategy

https://www.nichirei-logi.co.jp/news/2020/20200713.html (Japanese only)

ニチレイグループには、明日を変えていくために、業務の中でさまざまなチャレ
ンジをしている人たちがいます。
「その現場を見て、直接話を聞きたい！」という思いで、大櫛顕也社長が全国のニチレイ
グループ事業所を訪ねます。

キョクレイ 大黒物流センター

無人フォークリフト
実証実験チーム

株式会社ニチレイ代表取締役社長

大櫛櫛櫛櫛（おおくし・けんや）

キョクレイ 大黒物流センター
所長代理

若林慶司

（わかばやし・けいじ）

キョクレイオペレーション
大黒事業所
所長代理
無人フォークリフト

キャサリン

品川知也

（しながわ・ともや）（品川知也命名）どんなチャレンジ？
※この記事は、『 OriOri 』 56号に掲載された企画のロングバージョンです

冷蔵倉庫内などで荷物の運搬を行う、物流の仕事には欠かせないフォークリフト（フォーク）。その無人運用を目指して無人フォークの試験機を導入、2018年1月から実証実験を行っている。

1

An autonomous driving forklift at the Daikoku DC

Business Strategy

AGV for transporting
pallets

AGV for transporting roll pallets

Initiatives for Achievinga Sustainable Society■Automated Guided Vehicles (AGVs)
In 2021, Nichirei Logistics Group introduced automated guided vehicles (AGVs)
for transporting pallets supplied by Phoxter Corporation (Headquarters:
Toyonaka City, Osaka; President & CEO: Junichi Sonoda), which develops
image processing technology and automated guided vehicles, at the Sendai
Distribution Center of Nichirei Logistics Tohoku. AGVs for transporting roll pallets
have also been introduced at five transfer centers.
The Group is focused on process innovation to address labor shortages,
reduce the load on workers, and change on-site work so that anyone can doit. We will continue to work on building an optimal labor environment andsystem leveraging the characteristics of both humans and machines.

第1回

Financial Strategy■Autonomous Driving Forklifts
Nichirei Logistics Group began conducting field tests of autonomous driving
forklifts at refrigerated warehouses in January 2018. In 2021, they wereintroduced at the Daikoku Distribution Center of Group company Kyokurei.
A distinctive characteristic of autonomous driving forklifts is that they can begiven instructions using a tablet device, thereby making safe use possible for
employees who might otherwise lack the physical strength or operating skills
to manually operate a forklift. Going forward, we will steadily increase thenumber of facilities with autonomous driving forklifts and tie that into reducing
working hours, economizing on manpower for on-site work, and improving
occupational health and safety at our warehouses.

* Automated expiration date reader AI solution:
Preprocessing technologies that use AI-OCR (Optical
Character Recognition/Reader) and image recognition
to identify the characters of the expiration date from theimage and cross-reference the recognized expiration
date with information in the cloud, thereby achieving
higher reading accuracy.

Value Creation Story

Following field tests, Nichirei Logistics Group began introducing an AI solution
for automatically reading expiration dates from image data at 50 bases
nationwide in FY2021. As part of its efforts to fully digitize warehouse
operations, the Group is adopting tablet devices and AI solutions to expand
functionality. Previously performed manually, expiration date input can now becompleted using AI, enabling highly accurate readings of 93% or higher andfast processing speeds of about two seconds. This has led to improved
quality control enabling anyone to capture expiration date images, simplifying
overall operations, and facilitating stress-free work.

■Truck Loading Dock Reservation System
https://www.nichirei.co.jp/news/2017/298.html (Japanese only)

Nichirei Group Integrated Report 2021

Data

At distribution centers, truck deliveries are concentrated at certain times, and without knowing each truck’s cargo,smooth loading and unloading can be difficult, which has led to long wait times fortruck drivers becoming a social issue.
Aiming to alleviate and eliminate the problem of trucks having to wait, in October
2017 Nichirei Logistics Group began operating a truck reservation system. As of
FY2021, the system has been introduced at 30 facilities nationwide. The systemallows truck operators (the shipper or shipping company) to reserve a desired time
for loading or unloading trucks, in line with the loading and unloading time slot
framework at each distribution center. It also improves efficiency with regard to post-arrival administrative procedures byenabling truck operators to inform distribution centers of cargo details ahead of time. The introduction of the system has
led to reductions in the time required for unloading and loading, truck operations, and truck exhaust gas emissions(CO2 reductions).

69

Initiatives for Achieving a Sustainable Society

Environment

SocialGovernance

Building a Sustainable Supply Chain
We recognize that the sustainable procurement of resources is extremely important for the Nichirei
Group to continue to provide value to society. In addition, we recognize that, when conducting global
business activities, it is important to work with stakeholders in our supply chain to respect theenvironment and human rights. In the years to come, we will continue to contribute to the realizationof a sustainable society through efforts to resolve social issues along our supply chain.

Nichirei Group Sustainable Supply Chain Policy

https://www.nichirei.co.jp/english/csr/supplychain

The Nichirei Group is committed to building a sustainable supply chain. The Group procures products and services inaccordance with the following policy and asks suppliers to agree and comply with this policy.
Legal compliance

We comply with the laws and social norms of each country and region where we operate.

Fair business practices

We employ fair, transparent, and impartial business practices.

Human rights

We respect human rights and provide safe, healthy work environments.

Environment

We strive to reduce environmental impact and consider the health of the global environment.

Product quality and safety

We work hard to deliver safe, high-quality products and services.

Information management

We manage information properly and disclose information related to our business activities in a timely,
appropriate manner.

Local communities

We seek to build close cooperative relationships with local communities, as a good corporate citizen.

Human Rights Policy

https://www.nichirei.co.jp/english/corpo/humanrightspolicy.html

Recognizing that our business processes may have direct or indirect effects on human rights, we have established the
Nichirei Group Human Rights Policy (hereafter referred to as the “policy”), based on the United Nations Guiding Principles
on Business and Human Rights. This policy guides us in our efforts to fulfill our responsibility to respect the human rights
of all stakeholders of our business.

1. Scope

The policy is applicable to all employees
and officers of the Nichirei Group. We will
also require business partners to support
the policy and work towards ensuringrespect for human rights.

2. B asicPrinciples

In addition to our efforts to promoterespect for human rights based on the
United Nations Guiding Principles on
Business and Human Rights, the Nichirei
Group supports and upholds the followinginternational standards:•T he United Nations International Bill of
Human Rights (the Universal Declarationof Human Rights and the International
Covenants on Human Rights);•T he International Labour Organization’s
Declaration on Fundamental Principles
and Rights at Work; and•T he United Nations General Assembly
Resolution: The United Nations Declarationon the Rights of Indigenous Peoples.

3. I dentificationof, Responseto andDisclosureof Issues
Related to
Human Rights

The Nichirei Group will establish a system of human rights due diligence toidentify, prevent and mitigate adverse impact on human rights generated by
the Group in society.
• If any business activities of the Nichirei Group cause adverse impact onhuman rights or if it is discovered that the Nichirei Group is involved incausing adverse impact on human rights through our business transactions
with stakeholders and the like, we will take steps to provide a remedy basedon internationally recognized processes.
•T he Nichirei Group will utilize the expertise and knowledge of independent,
external human rights experts in implementing this policy and engage inearnest dialogue and consultation with stakeholders who may be affectedby our business.
•T he Nichirei Group will specifically assign officers with responsibility inimplementing the policy and monitor implementation of this policy.
•T he Nichirei Group will appropriately conduct education and training toensure that this policy is being effectively implemented across all businessactivities of the Nichirei Group.
•T he Nichirei Group will regularly disclose results of, and progress made in,our efforts to promote respect for human rights based on this policy.
•T he Nichirei Group will comply with all laws and regulations of countries andregions in which we conduct our business activities. Where there is a conflict
between national laws/regulations and internationally recognized humanrights standards, the Nichirei Group will seek ways to respect international
human rights to the maximum extent possible.

Promoting CSR Procurement: Sedex Membership and SMETA Audits
https://www.nichirei.co.jp/english/corpo/management/responsibility.html

Since FY2020, we have been promoting understanding of the Nichirei Group Sustainable Supply Chain Policy and our
CSR procurement activities among business partners. In FY2021, we launched our Group Supply Chain Meeting,where we discuss shared issues in addressing human rights due diligence. In FY2022, we launched the Group Supply
Chain Committee.
In addition, Nichirei Foods joined Sedex1 in July 2019. We established the Nichirei Foods Supplier CSR Guidelines in
October 2020 and disclosed them in five languages. In FY2022, we began implementing SMETA2 audits at our domestic
food factories.
Notes:
1. Supplier Ethical Data Exchange (Sedex): A non-profit organization established in the United Kingdom in 2004 to provide a platform for managing and sharing corporate
ethical information with the aim of realizing responsible business practices in supply chains.
2. Sedex Members Ethical Trade Audit (SMETA): An audit methodology developed by the Sedex Stakeholder Forum, whose members consist of brand-owners, companies,
and audit firms, by consolidating best practices related to ethical audits.

70

Nichirei Group Integrated Report 2021

Feed-use rice paddies

Sustainable Ingredient Procurement
Nichirei Fresh Products That Have Obtained
MSC/ASC Certification
ASC

Certification
NumberASC-C-01632

MSC

Certification
Number
MSC-C-52165

Giant tiger prawn, whiteleg shrimp,
Pacific cupped oyster, Atlantic salmon,
coho salmon, rainbow trout salmon,
rainbow trout

Value Creation Story

Chinook salmon, silver salmon, pinksalmon, chum salmon, sockeye-red
salmon, Pacific cod, northern rock sole,
yellowfin sole, English sole, walleye
pollock, arrowtooth flounder, great
Atlantic scallop, silver smelt, snow crab,
herring, arctic surf clam, red king crab,
longfin inshore squid, Pacific oyster

Notes:
1. Inochi-no-Mori Project: https://www.nichireifresh.co.jp/inochinomori/ (Japanese only)
2. ASC certification requires that marine products used have been cultivated in a sustainable manner.
3. MSC certification requires that wild seafood used has been caught using methods that do not
deplete the natural supply.

Shio Sujiko (salted sujiko), processedroe from MSC-certified Alaskan
sockeye-red salmon

Financial Strategy

High-speed chicken manure
processing plant

Chicken manure made into organic
fertilizer

Business Strategy

The specialized feed isused to raise
Junwakei chickens

Japanese
purebred chicken

Chicken manure is processed
into organic fertilizer

Sustainable Cycle

These rice paddies are used in a sustainableagricultural and livestock cycle initiative

Junwakei

The fertilizer is usedin the rice paddies

Feed-use rice paddies

The feed-use rice is stored andthen blended into feed

Data

■Certified Sustainable Palm Oil (RSPO Oil Credits)
Palm oil from the fruit of the oil palm is used as a raw material in such products as
cooking oil, soap and detergent. In recent years, the ongoing large-scale development ofoil palm plantations has led to environmental issues, including deforestation of tropicalrain forests and CO2 emissions from peat areas, as well as forced labor and child labor
among plantation workers, which are global issues.
In August 2018, the Group became a member of the non-profit organization
Roundtable on Sustainable Palm Oil (RSPO), which promotes the production and use ofsustainable palm oil. We are advancing efforts to ensure that the palm oil used to makeour products is sustainable. This includes calculating the total amount of palm oil used
as frying oil at Nichirei Foods’ factories (at consolidated subsidiaries in Japan andoverseas), and purchasing a corresponding amount of RSPO oil credits (via the bookand claim method).

Unhulled feed-use
rice harvested
from the paddies
JA Shin-Iwate Hokubu Shiryo-yo
Kome Puroject Iinkai (Feed-Use Rice Project Committee)
Karumai-machi Suiden Nogyo Suishin Kyogikai(Karumai-machi Council for the Promotion of Rice Paddy Agriculture)
Hirono-cho Suiden Nogyo Suishin Kyogikai(Hirono-cho Council for the Promotion of Rice Paddy Agriculture)

Initiatives for Achievinga Sustainable Society■Sustainable Regional Agricultural and Livestock
Cycle through Junwakei Chicken
Over the 12 years since launching a feed rice project incollaboration with the JA cooperative in Iwate Prefectureand farmers from Karumai and Hirono in 2009, Nichirei
Fresh has been implementing a sustainable regional
agricultural and livestock cycle through the production of theJunwakei breed of chicken (a crossbreed of two native
Japanese species). When the project was first launched,paddies for feed rice covered around 15 hectares. By
FY2021, this area had expanded to around 200 hectares
yielding a harvest of roughly 1,600 tons.
Manure from the poultry farm is made into organic
fertilizer at an on-site high-speed chicken manure
processing plant. This fertilizer is spread over the feed ricepaddies, providing nutrients for the soil, where previously
they were resting rice fields. Rice harvested from these
paddies is fed to Junwakei chickens as formula feed.
Moreover, waste heat energy from the manure processing
plant is used to heat the chicken coops.

Management Strategy■Aquaculture Stewardship Council, Marine StewardshipCouncil Certification
Since 2006, Nichirei Fresh has engaged in Inochi-no-Mori Project1
nature conservation activities involving sustainable giant tiger prawn
farming and mangrove tree planting in Kalimantan, Indonesia. These
activities were extended to whiteleg shrimp ponds in Sumatra,Indonesia, and obtained Aquaculture Stewardship Council (ASC)certification2 in 2018. Since 2020, we have planted about 280,000
mangroves. In addition, we are gradually increasing the number ofmarine products we handle that have obtained Marine StewardshipCouncil (MSC) certification.3 As of June 2020, we had obtained MSC
certification for products of 17 species. We will continue to expand
our lineup of MSC-certified processed marine products.

4-1055-18-100-00
Membership profile pagehttps://rspo.org/members/7750

Nichirei Group Integrated Report 2021

71

Initiatives for Achieving a Sustainable Society

Environment

SocialGovernanceImproving Work Satisfaction,
Cultivating Human Resources
In conducting business, the Nichirei Group places the greatest importance on human resources.
Furthermore, in order to invigorate our organization, improve productivity, and create a vibrant workplace
we not only depend on our values and ideas, but also, to a large extent, on our diverse human resources.
In 2017, we formulated the Nichirei Group Workplace Improvement Policy, set targets for eachGroup company based on the policy, and commenced promoting a number of initiatives for the fiveyear period to FY2022.
The Diversity Promotion Council and the Health Promotion Council have been organized under theGroup Human Resources Committee to improve work satisfaction. They discuss human resourcerelated strategies to realize Group-wide sustainable growth, exchange opinions, and share information
on specific measures, after which they confirm their progress.

Workplace Improvement Policy

https://www.nichirei.co.jp/english/csr/work/policy.html

Workstyle Reforms: Main Measures and Activity Progress (FY2019–FY2021)
PolicyIdeal State

Priority
MeasureEnable Diverse Styles of Working
Prevent Excessive
Working Hours

FY2020

FY2021

Employees shall have acertain degree of freedom
to choose their workplace
and working hours, to suitpersonal circumstances.
Systems to maintain these
conditions are to be put inplace.

Provideworking
condition
options•N ew in-house childcare facility
Opened in the Tokyo head officebuilding in April 2018•F ull-scale introduction of telework
All worksites except food factories andlogistics offices• I ntroduction of super flextime work
systemCore time eliminated except at somework sites such as factories anddistribution centers

Systems are to be establishedto prevent employees’
careers from being disrupted
or ended because of suchcircumstances as childbirth,childcare, nursing care, poor
health, relocation of a spouse,or disease.

Set upsystems
to prevent
disruptionof employee
careers• Implementation of career development
programs for women
Women’s success event “Next Step for
2021”
Target: 163 people•N ursing care seminar
Conducted four times, 115 participants• Introduction of comeback system
Purpose: Ongoing career support forlife events and growth• L eave system due to spouse transfer
Purpose: Examination and introductionof multi-career formation in collaboration
with other companies•N ursing care seminars and nursing carehandbook creation
Conducted four times, 103 participants•E xpansion of childcare and nursing
care leave• Leave can be taken in hourly units• H alf days and whole days can beconverted and taken as accumulated
annual paid leave•N ursing care seminars (held online)
Conducted on November 18 and 26 (60minutes each), 60 total participants
Information (provided on intranet) on
support for balancing nursing care withwork

Through collaborative laborand management initiatives
for workplace improvement,
working hours shall be limited
to levels that allow each
employee to demonstrate
their ability and perform
satisfying work in good health.

Promotion of
paid leave•1 00% introduction of new working
hours management system•G uidance on long working hours
through introduction of a working time
management system• I mplementation of measures against
overwork through labor-management
collaboration•N ichirei Group working hours
guidelines formulated through labormanagement collaboration• I ntroduced new expense settlement
system• I ntroduced planned five-day annual
leave system• I mplemented e-learning: Revised labor
laws, working-hour awarenessTarget: Employees; 5,101 participants• I mplementation of measures against
overwork through labor-management
collaboration•S et quantitative target (average annual
paid leave use of at least 10 days
across the Group), and encouraged
employees to take annual leave•O ngoing implementation of measuresagainst overwork through labormanagement collaboration• I mplementation of human resource
management education via e-learning

In providing employees withequal opportunities andeducation, we support theirdevelopment into a valuable
force for the Nichirei Group.

Promote theadvancementof female
employees• L ogistics Group: 5th and 6th “Sakaseru
Roji-Jo Forum”
Target: Female employees; 129
participants (404 participants in total)
Theme: Work values and workplace forwomen•N ichirei Foods: LADY, GO UP!
Target: Female employees at 6 food
manufacturing companies (8 female
Nichirei Foods employees participated)
Summary: Seminar for building external
networks and career development• L ogistics Group: 7th and 8th “Sakaseru
Roji-Jo Forum”
Target: Female employees; 118
participants (522 participants in total)•N ichirei Foods: LADY, GO UP!
Target: Female employees at 6 food
manufacturing companies (8 female
Nichirei Foods employees participated)
Summary: Seminar for building external
networks•N ichirei Foods: LADY, GO UP!
Target: Female employees at 6 food
manufacturing companies (8 female
Nichirei Foods employees participated)
Summary: Lecture by external female
officer and seminar for building
external networks and careerdevelopment

Diversity andinclusion•N ichirei Foods: Diversity Forum
Deepen understanding of various work
styles centered on department andsection managers at each of 6 food
manufacturing companies. 35 Nichirei
Foods employees (26 men, 9 women)•N ichirei Foods: Diversity Forum
Deepen understanding of various work
styles centered on department andsection managers at each of 6 food
manufacturing companies. 60 Nichirei
Foods employees (46 men, 14 women)•N ichirei Foods: Diversity Forum• L ecture held (February 25, 2021)• T arget: Officers (8 participants) andemployees (approx. 140 participants)•N ichirei Foods: Meeting of generalmanagers from 6 food manufacturing
companies• M eeting of general managers ofplanning departments from 6 food
manufacturing companies• 2 executive officers, 5 generalmanagers, 14 employees fromsecretariat (21 people from 6
companies)• Nichirei Foods: 10th year of J-win• F emale leaders training programorganized by non-profit organization
J-win (one-year program)Job positions and employment
opportunities for people withdisabilities shall be created toenable them to earn a living
through stimulating work, witha vision to ultimately eliminate
the distinction between people
with or without disabilities insociety.

Providestimulating
employment
opportunities
for people
with disabilities•D isabled employment rate: 2.56%(104 people with disabilities employed)•D isabled employment rate: 2.75%(101 people with disabilities employed)•D isabled employment rate: 2.80%(101 people with disabilities employed)

As the healthy life span ofpeople becomes longer, we
will create workplaces thatenable seniors to leverage
their distinctive experienceand play an active role
reflecting their individual
values and workstyles.

Createemployment
opportunities
for olderpeople•5 9 employees rehired after retirement(64 retirees)•5 7 employees rehired after retirement(65 retirees)•5 1 employees rehired after retirement(59 retirees)

Ensure Equal Opportunity

72

Main Activity

Nichirei Group Integrated Report 2021

FY2019

Supporting Foreign Technical Interns’ Careers
Management Strategy

The Nichirei Group provides training opportunities based on career path planning and development so that diverse humanresources are able to play an active role in their respective workplaces, based on satisfying and stimulating work. In Japan,
we strive to create workplaces that offer foreign technical interns a sense of job satisfaction.
In addition, we provide introductions for foreign technical interns to Group company workplaces in their own countries,
and opportunities that enable them to continue their careers utilizing expertise acquired in Japan. Training covers such
topics as food hygiene management and occupational health and safety.
ニチレイグループには、明日を変えていくために、業務の中でさまざまなチャレンジをしている人たちがいます。
「その現場を見て、直接話

大櫛櫛 工場を見学して感じたĐể thay đổi tương lai, Tập đoàn Nichirei sẽ thử nhiều phương pháp khác nhau trong công việc.
Giám đốc Kenya Okushi sẽ đến thăm các cơ sở kinh doanh trên toàn quốc của Tập đoàn Nichirei
với suy nghĩ “Tôi muốn tận mắt mình nhìn nơi làm việc, muốn trực tiếp nói chuyện với nhân viên”.

部長代理

上遠野直樹

（かとうの・なおき）（ながせ・ひろゆき）

工場長

佐藤謙一

（さとう・けんいち）

ベトナム人技能実習生
グエン・トゥイ・ミー・チーて 数 値 化 し て、 そ こ か ら マ

ニュアル化や業務改善を考え一番大きいのは、言葉るプロジェクトを、若手を中心に進めてもらっています。

大櫛櫛 その中でベトナム人実習生が活躍しているわけです

が、文化も言葉も違う人たちに教えるのは大変では？

ベトナム人技能実習生
グエン・ティ・アイン・ダオ

ベトナム人技能実習生
ブイ・ティ・フーン・ラン

Comment from a
Former VietnameseIntern Employedat TPS
Do Thi Yen

なくはないです。
でも、Value Creation Story(Trong ảnh từ trái sang)Bùi Thị Phương Lan, Nguyễn Thị Anh Đào, Hiroyuki Nagase, Hirotaka Oka,
Naoki Katouno, Kenichi Sato, Nguyễn Thùy Mỹ Chi, Kenya Okushi

代表取締役社長岡 寛孝

佐藤の問題ですね。まずはこちらCùng với thực tập sinh nước ngoài thực hiệnthách thức: Giải quyết vấn đề thiếu hụt lao độngtại các nhà máy chế biến thủy hải sản.

フレッシュまるいち（おか・ひろたか）

製造課長代理長瀬弘行

水産加工の現場は年々高齢化。小名浜工場では1/3が外国人技能実習生

ま ず は 日 本 人の教 育 か らの言っていることを理解してえ出すと、話ができなくなっもらわないと、会話も仕事もちゃうんですよね。スピード

成り立たないので。特に、地にもついていけないし。でも、と、比較的単純なのかと思っ

忙しい現場の人たちには嫌がた の で す が、 現 場 を 見 る と、られませんでしたか？

細かい気配りが必要な工程が

長瀬

多く、さらに「鮭」と言ってもう日本人だけでは現場が回元の浜の人は早口なんですよ。それで、まずは受け入れらないのは事実なので、われもサイズも形もマチマチなこる側の日本人従業員の教育かとに驚きました。

ら始めました。とにかくゆっ

われも努力してちゃんと会話

長瀬
自 然 の 生 き 物 な の で、

本当に一匹ずつ違います。同

くり易しい言葉で、文章よりができるレベルになっていかも 単 語 で 話 し て、 と。
「明日ないとダメだと。

じ塩分濃度の液に同じ時間漬

佐藤 「言ったのにやってくれ

け込んでも、同じ味には仕上に行っていた時期があるので、は事務所に集まってくださ

よくわかります。文法とか考い」ではなく、「明日」「事務

じるんです。

所」「 来 る ね 」 の ほ う が、 通

大櫛櫛 あぁ！ 私も仕事で中国はい。ただ、われわれがらないんです。

佐藤

大櫛櫛 ベテランの技術と経験ベテランが引退したときのこが不可欠なわけですね。

とを考えないといけないので、近年はデータをきちんと取っ

OriOri

全国のニチレイグループ事業所を訪ねます。

水産加工の人手不足に外国人技能実習生と挑む

第2回

フレッシュまるいち小名浜工場

Came to Japan in 2015. After working at theFresh Maruichi Wakamatsu Plant as a technicalintern for three years, she learned the basics ofquality control at the Onahama Plant for one
year. Since returning to Vietnam, she has beenworking at the marine product processing factoryof Trans Pacific Seafood (TPS), established by
Nichirei Fresh in 2018.

株式会社ニチレイ代表取締役社長
大櫛櫛顕也

ひとくちに「鮭」と言っても、種類や産地、季節などによってサイズや形、脂ののりも違う。ムダなく安定した味と品質に仕上げるためには、人の目と手が不可欠（おおくし・けんや）機械化が難しい水産加工業では、人手不足が大きな課題。小名浜工場は、

どんなチャレンジ？

Thử thách như thế nào?

東日本大震災で大きな被害を受けた福島県いわき市にあり、人口減少や高齢化などが相まって地元の働き手減少が深刻化している。そこで2015

Một ngành nghề khó cơ giới hóa như ngành chế biến thủy hải sản thì việc thiếu lao động là một vấn đề lớn.
Nhà máy Onahama nằm ở thành phố Iwaki, tỉnh Fukushima- nơi hứng chịu thiệt hại nặng nề bởi trậnđộng đất lớn phía Đông Nhật Bản, dân số suy giảm và già hóa, tình trạng thiếu lao động địa phương ngàycàng nghiêm trọng. Vì vậy, từ năm 2015 chúng tôi bắt đầu tiếp nhận thực tập sinh nước ngoài, và nỗ lực
phát triển hoạt động kinh doanh gắn liền việc bảo tồn phẩm chất, kỹ thuật chế biến cao.

年から外国人技能実習生を受け入れ、高い加工技術と品質を守りながら事業を発展させていこうとしている。

vol.57

OriOrivol.5722

1

Articles introducing the Onahama Plant in the 2020
Spring edition of the Group’s in-house magazine
OriOri were translated and shared at Trans PacificSeafood’s factory in Vietnam(left: Japanese, right: Vietnamese)

Fresh Maruichi is a very employeefriendly company. Everyone, from thepresident to part-time workers, is kindand friendly, which makes every day
enjoyable. Because I had studied
pharmaceuticals at university in Vietnam,
when my training ended at the
Wakamatsu Plant, Fresh Maruichi
President Onishi (president at that time)suggested that I try working in quality
management, and I transferred to the
Onahama Plant. I have come to feelstrongly about the importance of quality
control.
I wanted to work in Japan longer, butwhen I heard the company planned tobuild a factory in Vietnam, I was happy
since that would enable me to live withmy children. My current goal is to work
hard alongside my TPS colleagues, andfirst and foremost, generate solid profits!

Financial Strategy

A Vietnamese technical intern who worked at the Fresh
Maruichi Onahama Plant for four years starting in 2015
continues to perform quality control work at the newly
established Nichirei Fresh fish processing plant in
Vietnam. She plays an active role in her home country,
utilizing what she learned at food manufacturing sites
and by doing quality control-related work in Japan. In
FY2021, one former foreign technical intern began workat the same Vietnamese plant. Nichirei plans to continue
supporting the career advancement of its foreigntechnical interns.
23

を聞きたい！」という思いで、大櫛櫛櫛櫛櫛櫛櫛品 質 を 左 右 する「 人 」の力のは、建物は古いですが、非

常にきちんときれいに管理が行き届いていること。働いている皆さんも、きびきびと元

現 在 小 名 浜 工 場 で は、人のベトナム人実習生を受

気で気持ちがいいですね。外国 人 技 能 実 習 生 の 人 た ち も、現場に溶け込んでいるように見えました。

佐藤

定塩鮭や味付いくらなどの製造を行う小名浜工場。
食品安全システム（FSSC22000）認証などを取得し、安全で品質の高い製品を生産している

け入れています。従業員全体の約３分の１で、大きな戦力になっています。

大櫛櫛 鮭と魚卵の加工という

Nichirei Fresh Maruichi (Head Office: Onahama
Plant in Fukushima Prefecture)14

Human Resource Development
Business Strategy

Each fiscal year, the Nichirei Group provides employees with an educational program for the year. It is devised by the
Human Resources Committee in accordance with Group Education and Training Rules to support the careeradvancement of each employee. In addition, we use the Nichirei intranet to conduct e-learning courses for all employees
in Japan to develop their skills in areas such as quality, safety, governance and compliance.

Level-based Training Plan
Level-based Training Plan

Objective

TargetNext-generation
Management Team
Development Program

To foster management capabilities, world-standard leadership and decision-making
criteria through the cultivation of ideas based on broad perspectives, including
philosophical and cognitive approaches.

General managers

Leader Training

Creating true managers: Fostering human resources able to play a part in creating astrong and autonomous organization capable of discovering issues that need to beaddressed and formulating its own solutions, and in so doing become an organizationthat operating companies can rely on.

Managerial staff

Evaluator Training

To teach the principles of evaluation and deepen understanding of the purpose andsignificance of goal management and evaluation systems.

New entrants (such as
recent graduates,
mid-career hires,transferred employees)

Facilitation Training

To teach understanding of such concepts as meeting preparation, meeting management
and follow-up, in order to conduct efficient meetings.

All employees

Training for Newly
Appointed Managers

To elucidate the role of managers expected to lead the organization, and the viewpoints,
perspectives and key behaviors required.

Newly appointed
managers

First Career Training

To inculcate basic behaviors essential for human resources to produce results expectedby the Company and supervisors while applying logic-based solutions.

New hires, employees intheir second and thirdyears of employment

New Employee Training•T o reorient the mindset from that of a student to that of an employee (teaches proactive
behavior, disciplined behavior and expected business etiquette)•T o foster understanding of the Nichirei Group and team spirit

New hires, employees intheir second and thirdyears of employment

Nichirei Group Integrated Report 2021

Data

Executive officers

Initiatives for Achievinga Sustainable Society

Executive Coaching

To improve management decision making, organizational growth and businessperformance. (Changes in the thinking of executives is expected to have a ripple
effect on employees, resulting in improved productivity of organizations.)73

Initiatives for Achieving a Sustainable Society

Environment

SocialGovernanceOccupational Health and Safety
If employees are to maximize their abilities and potential, they must be physically and mentally healthy,
and be able to work in a safe, comfortable environment. The Nichirei Group considers its employees tobe irreplaceable and works with them to create safe, open and invigorating workplaces.

Health Management Initiatives■Basic Policy
1. We will promote the creation of a lively workplace where labor and management cooperate, based on the ideal thatstates that good work has its basis in a healthy mind and body.
2. Each of our employees will work hard to increase his/her health awareness, and will take an active role in creating awork environment that promotes good health.
3. We will strive for health management based on the three pillars of “health maintenance and improvement,” “mental
health measures,” and “safety and hygiene control.”■Management Framework
2015

Newly established the Health Promotion Group in Human Resources Strategy & General Affairs as a department dedicated tohealth management

2016

•F
 ormulated the Nichirei Group Health Declaration and Group Health Management Standards•A ppointed a holding company health promotion manager as well as operating company health promotion representativeand representatives

2018–

Restructured the Health Promotion Group into the Health Promotion Center and increased the number of occupational health staff(public health nurses)■Main Initiatives in FY2021• Countermeasures against COVID-19
In cooperation with the Group Risk Management Office, the occupational healthstaff of the Health Promotion Center built a support system to provide appropriate
advice, prevent the spread of COVID-19, and prevent discrimination against
individuals in the event that an employee contracts COVID-19.
• 100% Health Check-up Rate and Enhancement of
Post-examination Follow-up
In 2020 and 2021, despite the COVID-19 pandemic, all employees completed
annual health check-ups. In addition, under the post-examination follow-up
system, those determined by an industrial physician to require additional support
were remotely interviewed by public health nurses as appropriate using e-mail orother online tools. Employees who score a D on their health examinations andchoose to undergo detailed examinations are eligible for a subsidy program as
members of the Nichirei Health Insurance Association.
• Health-related Events
Since FY2017, the Nichirei Group has been holding regular health-related events,
providing employees with specific health promotion opportunities and helping
them avoid lifestyle-related diseases. During the COVID-19 pandemic, we haveheld events on themes such as adequate exercise, improving sleeping patterns
and mental health. In questionnaires, more than 92% of participants at each event
responded that the event was beneficial.

Flowchart of countermeasures for COVID-19

Effective ways to use check-up waiting times(health newsletter)■Introduction of Subsidy Program for Outpatient Smoking Cessation Treatment
In FY2021, 34 employees participated in the smoking cessation program, and 24 weresuccessful. In June 2021, the Nichirei Health Insurance Association introduced a subsidy
program for outpatient smoking cessation treatment provided by hospital physicians. In theseand other ways, we are supporting the health of our employees.

74

Nichirei Group Integrated Report 2021

Health-related event in 2021
on mental healthHealth and Safety Committee
Management Strategy

https://nichirei.disclosure.site/en/themes/184

The Nichirei Group established health and safety committees to fulfill the requirements of Japan’s Industrial Safety and
Health Act, and is working to promote health and safety management aimed at preventing occupational accidents andmanaging the health of employees. At our head office, as well as at each branch office, we strive to eliminate long
working hours and reduce overtime work, while at food factories and refrigerated warehouses, we do our best to prevent
accidents. This is in addition to other working environment improvement efforts we undertake, tailored to the conditionsof each workplace.

Value Creation Story

Launch of Safety and Quality Training Using VR

Financial Strategy

In FY2022, Nichirei Logistics Group started using virtual reality (VR) for safety
and quality training at its logistics work sites.
Until now, practical training has been implemented through courses using a
mock-up refrigerated warehouse at certain training facilities (safety and quality
training centers). This made it difficult for employees stationed far away toparticipate. It was also difficult for trainees to envision what accidents might
happen if rules or manuals were not followed correctly.
With the introduction of a new tool that uses VR technology, employees canlearn proper work procedures efficiently without having to attend a safety andquality training center. They can also experience virtual simulations of accidents
that might occur as a result of unsafe behaviors. This has led to further
improvement of safety awareness.
Top: Using VR
Bottom: Image seen through headset

Business Strategy

Food Factory Safety

Initiatives for Achievinga Sustainable Society

Nichirei Foods has identified three priority measures for safety-related activities at food factories: safety patrols, near-missrelated activities and the mandatory observation of safety rules.
Monthly safety patrols are tailored to each factory, with effective checklist items determined based on site feedback.
Patrols are conducted mainly in the early morning and late at night, when fewer managers are on staff. We also ask
employees to share work-related issues and opinions.
Held as needed, near-miss-related activities are designed to reinforce reporting practices and inform employees about
possible dangers through the sharing of information about accident near misses. Activities reconfirm evaluation criteria,
thus ensuring consistency in methodologies for classifying an incident as a near-miss. Preventive steps are then taken
as needed.

Occupational Health and Safety Initiatives for Foreign Technical Interns

Data

Foreign technical interns working in Japan at the Nichirei Group
undergo training including occupational health and safety training.
This helps to prevent occupational accidents and facilitate healthmanagement for those adjusting to life in another country, while atthe same time helping them improve their Japanese-language skills.
Our goal is to create workplaces where all Nichirei Group employees
can work safely and healthily with purpose.

Bilingual poster in Japaneseand Vietnamese

Holding Japanese language
speech contests

Nichirei Group Integrated Report 2021

75

Environment

Initiatives for Achieving a Sustainable Society

SocialGovernance

Providing Safe Products and Services
Basic Policy on Quality Assurance

Quality Assurance Approach and Improvement Cycle

https://www.nichirei.co.jp/english/safety/concept

Improvements

The Nichirei Group’s fundamental policy on quality assurance is toensure the quality and safety of the food products and services it
provides, so that they are safe for consumers. At the same time, we are
maintaining and improving Group-wide levels of quality control, quality
assurance and customer satisfaction.
We aim for further enhancements by implementing the PDCA cycle inour quality management system and food safety management systemand encouraging improvements when deficiencies are found throughinternal audits and quality audits at factories.

Risk
management

Food
safetyFoodsafeguards

Regular Audits (FY2018–FY2021)
Quality assurance
audit

FY2018FY2019FY2020

FY2021Japan

Overseas

Japan

Overseas

Japan

Overseas

Japan

Overseas

Number of annual
Group audits (Japan/
Overseas)

156

15

66

38

52

20

40

10

Annual Group
implementation rate(compared with plan)

100%

88%

97%

100%

87%

80%

58%

28%

Internal audits
Factory audits

Regular audits are conducted by each operating company based on an annual plan. The plans are formulated byrationally and objectively evaluating the magnitude of possible risks (based on risk management), ascertaining whether or
not certification of international standards has been obtained, and determining the quantity of products handled annually,and product characteristics. The PDCA cycle is also used in regular audits. Audit results are used as a reference when
determining audit policies and target worksites when developing audit plans for the upcoming year.

Quality Control Based on International Standards
https://sustainability-cms-nichirei-s3.s3-ap-northeast-1.amazonaws.com/uploads/response_file/file/142/csr2019en.pdf#page=68

The Nichirei Group offers products and services with a variety of distinguishing characteristics. In addition to having
internal rules and regulations that support these characteristics, we are working to acquire international standard
certification, while strengthening our quality control system to ensure we continue to provide safe products and services.

Certification Status (FY2018–FY2021)
Certification

Operating Company
Nichirei Foods

ISO 9001(quality management system)

Nichirei Fresh

Rate of Certification4
FY2018FY2019FY2020

FY2021

13/15

3/15

3/155

3/155

8/8

8/9

8/9

5/8

Nichirei Logistics Group

105/112104/115

81/115

83/117

Nichirei Foods

13/15

14/15

14/15

14/15

Nichirei Fresh

6/8

6/8

7/7

7/7

Nichirei Logistics Group

2/112

2/115

2/115

2/117

ISO 14001(environmental management system)

Nichirei Foods

11/15

11/15

11/15

11/15

ISO 13485(medical devices and in vitro diagnostics)

Nichirei Biosciences

2/2

2/2

2/2

2/2

FSSC 22000,1 ISO 22000,2 SQF3
(food safety management system)

Notes:
1. FSSC 22000: An international management system for food safety that is based on ISO 22000.
2. ISO 22000: An international standard for food safety management systems (for reducing food safety risks). It is based on hazard analysis and critical control points(HACCP) food sanitation control techniques.
3. SQF (Safe Quality Food) certification provides assurance that the product being purchased meets strict international food safety and quality standards such as HACCP.
In countries outside of Europe, this is the program recognized by the Global Food Safety Initiative (GFSI).
4. Rate of certification: Certified worksites ÷ Total worksites of consolidated subsidiaries in Japan (food factories, logistics centers, etc.)
5. Switching to FSSC 22000

76

Nichirei Group Integrated Report 2021

Food Defense Initiatives
Management Strategy

https://www.nichirei.co.jp/english/safety/system.html

Value Creation Story

The Nichirei Group emphasizes people management to protect food. In
areas where food is handled, in addition to restricting access to authorizedindividuals, we have made it possible to determine the when, who andwhere of such individuals at all times. In-house operation rules covering
visitors and contractors, as well as self-checks are in place and audits ofour plants are conducted regularly to confirm safety. We are also working
to improve the workplace environment based on employee satisfaction surveys and interviews. We have installed
cameras and face recognition systems at all of our plants in Japan and overseas. To protect food we have created asystem that is based on the distinguishing characteristics of each product and enables follow-up investigations should
issues arise. If an issue does occur, a link is established with our food crisis management system, which facilitates thedissemination of accurate information and quick responses.

Building a Traceability System
https://www.nichirei.co.jp/english/safety

Financial Strategy

To always provide safe, reliable and high-quality food, the Nichirei Group conducts rigorous quality control and inspections,from ingredients to final products and has built a traceability system suited to the distinguishing characteristics of eachproduct. In the event of an accident, enhanced traceability prevents damage from spreading and enables rapid investigationof the cause. We also provide prompt and accurate information to alleviate consumer concerns.
Building a traceability system requires collaboration and cooperation on the part of ingredient suppliers, manufacturers
and distributors in our supply chain. The Nichirei Group regularly holds study sessions to deepen shared awareness withregard to quality-related information. To digitize and link information, we are also promoting the utilization of our proprietarysystem for central control.

Business Strategy

Traceability of Frozen Green Soybeans (Illustration)
Information Contained in theTrace Code

Best-by date

Factory code

１３Ｂ ０３ １ Ｆ４０１
Arrived Feb. 13

Truck number

Production
line number

Farm code

Initiatives for Achievinga Sustainable Society

The trace code allows a product to be
traced back to its place of origin (cultivation).
Trace codes printed on Nichirei Foods’
frozen green soybeans record cultivationand production management data. Simply
by looking at the trace code, the entire
history of a product can be tracked, from
cultivation management conditions in thefield to production conditions at the factory.
Nichirei Foods is using trace codes to
conduct ongoing improvements based on
its discussions with local producers, in order
to better respond to customers’ needs.

２０２０．１０．２３／ＥＢ

The information displayed in this row can be used to trace the following:• The farm at which the product was harvested• The truck used to transport the harvested product• When the product arrived at the processing factory• Production line number
The information displayed in this row can be used to trace the following:• Date when the product was packaged• The factory at which it was packaged

安 全 第 一 品 質 第一
安全・品質の目標

Safe Workplaces, Better Service
Data

https://www.nichirei-logi.co.jp/english/company/csr.html

Nichirei Logistics Group sets themes four times a year designed to prioritize safety andquality at warehouses. Accident prevention activities are conducted under these themes at all
domestic facilities (114 locations).

理解していないことより理解したつもりになっていることの方がはるかに危険である場合が多い
事故ゼロ強化週間

第1回

第2回

2020年4月13日
（月）
〜19 日
（日）

リーチイン走行の徹底

第3回

商品溶解事故の防止

第4回

（月）
〜26日
（日）
2020年7月20日

実施期間

2020年11月16日
（月）
〜22日
（日）
2021年 2 月 8 日
（月）
〜14 日
（日）

Poster promoting safety andquality

Nichirei Group Integrated Report 2021

77

Initiatives for Achieving a Sustainable Society

Environment

SocialGovernance

Stakeholder Engagement
As it engages in global business activities, the Nichirei Group recognizes the importance ofcommunicating and maintaining dialogue with its diverse stakeholders. The Group works to build
corporate value by establishing long-term relationships of trust while reflecting the expectations andconcerns of stakeholders. It does so by fostering deeper mutual understanding, advancing various
initiatives and proactively disclosing relevant information.
Stakeholder

Objective

Issues recognized

Customers

Better customer satisfaction andcorporate branding: to be achieved
through prompt, appropriate andsincere responses to consumer
requests and feedback.

• Quality assurance for
products and services• Proper delivery of
information• Supply of delicious foodand a rich variety of meal
options

Shareholders
and investors

Business
partners

Employees

Local
communities

Tradeorganizations,
NGOs andNPOs

78

Deeper understanding of theCompany and higher corporate
value: to be achieved throughtimely and appropriate disclosure.

Strong, effective and stable longterm relationships with business
partners throughout the supply
chain.

Favorable labor–management
relations; greater employee
motivation; a dynamic
organizational climate.

Stable, enduring business operations
as a trusted and respected company:
to be achieved by building favorable
relations with local communities.

Collaboration with other companies:
to be achieved through participationin associations and other entities
relating to trade organizations;resolution social issues throughcollaboration and cooperation with
NGOs and NPOs in Japan andabroad.

Nichirei Group Integrated Report 2021

Means and method ofcommunication

Frequency• Customer Service Center•C ustomer satisfaction
surveys• Websites• Social media• Routine• Once a year

• Once a year

• Maintaining andimproving corporatevalue• Appropriate distributionof profits• Timely and appropriate
disclosure of information•G eneral Meetings ofShareholders• Financial results briefings•B usiness information
sessions, facility tours•D etailed interviews withindividual investors in Japanand overseas• IR website• Integrated Report• Shareholder Report• CSR procurement• Mutual development
achieved throughcustomer intimacy•C SR procurement survey forsuppliers•M eetings and seminars withparticipation from business
partners•S urvey ongoing since
2018•O nce a year (heldby three operatingcompanies)•E stablishment of an internalreporting center•C reation of an employee
assistance and mental healthconsultation center• L abor–management council• Health and safety committee•S ymposiums involving
management andemployees• PR brochures• Intranet• Employee award system• Employee satisfaction survey• Employee stress checks• Available 24 hours• Occupational health andsafety• Job satisfaction• Workstyle reform• Health management• As necessary• As necessary• Four times a year
• Once a year
• As necessary• As necessary• Once a year
• Twice a year

• Available 24 hours• Twice a year
• Once a month• Once a year(all worksites)• Four times a year
• Routine• Once a year
• Once a year
• Once a year

• Harmonious coexistencewith local communities• Preservation of local
environments• Educational activities inlocal communities• Social contribution activities• Participation in local events• Volunteer activities•D ietary education activities(ethical consumption)•F ood factory and distribution
warehouse tours• Internships•S ponsorship of sporting
events• As necessary• As necessary• As necessary• As necessary• As necessary• As necessary• Human rights• Climate change• Food loss
• Sustainable procurementof food• TCFD Consortium• J apan Frozen Food
Association• J apan Association ofRefrigerated Warehouses• Japan Fisheries Association• World Wide Fund for Nature•R oundtable on Sustainable
Palm Oil• Caux Round Table Japan•T he Consumer Goods
Forum• As necessary• As necessary• As necessary• As necessary• As necessary• As necessary• Once a year
• As necessary• As necessaryAddressing Social Issues through Food (Activities to Reduce Food Loss)
Management Strategy■“Nichirei Food Loss Research Institute” Website
The Nichirei Group is working to address the social issue
of food loss. Our activities include reexamining causes offood loss from both scientific and supply chain standpoints
to determine effective reduction approaches. We also
propose reduction methods using the cold chain functionof the Nichirei Group.

Food Loss Research Institutehttps://www.nichirei.co.jp/food_loss/ (Japanese only)

Value Creation Story■Main Activities to Reduce Food Loss
Sampling Events at Employee Cafeterias

Since 2006, Nichirei Foods and Nichirei Logistics Group
have supported the activities of the NPO Second Harvest
Japan. So far, we have donated a total of more than
20,000 cases of frozen foods to various welfare facilities,
including foster homes, mother and child support centers,
and disability support facilities.
In addition to delivering these products, we also provide
logistical support for frozen foods to ensure that the items
can be consumed with peace of mind.

At employee cafeterias, Nichirei Foods holds sampling
events through a unique initiative that uses products
whose external packaging has been crushed or otherwise
damaged in logistics or distribution but are otherwise still
fully suitable for consumption.
We have also endorsed the NO-FOODLOSS PROJECT
of the Ministry of Agriculture, Forestry and Fisheries. In
support of this project, we are working to make donations
that reduce food loss and to raise internal awareness.

Financial Strategy

Food Bank

Initiative website

Business Strategy

Process Leading Up to Delivery

https://www.nichireifoods.co.jp/corporate/hamidasu/top/(Japanese only)

Provide Second Harvest Japan with a list ofavailable products

SecondHarvestJapan•C onsult with facilities to determine which
products are needed• Compile a list of requests from all facilities• Contact the Nichirei Group

NichireiGroup

Nichirei Foods ships the requested products,
which are then delivered to facilities by
Nichirei Logistics GroupChildren’s Cafeterias
In 2021, Nichirei Foods begansupporting children’s cafeterias withthe cooperation of the NPO Japan
Kodomo-Shokudo Support Center
Musubie, which provides suchsupport all over Japan.

Initiatives for Achievinga Sustainable Society

NichireiGroup■Nichirei Group Social Contribution Spending (Three Years) (Millions of yen)
33

97

133

17

25 1.6306

FY2019

34

87

138

50

20 0.7330

FY2020

75

134

57

49

1.0

Data

22

338

FY2021050Social welfare and disaster support

100

150

Education and welfare

200

250

Health, sports and the arts

300

350

Environmental conservation

Community activities, preservation of historic sites and traditional culture, town planning aimed at disaster prevention, crime prevention,
job creation and skill development, and employment support
Other

Nichirei Group Integrated Report 2021

79

Initiatives for Achieving a Sustainable Society

Environment

SocialGovernance

The Chairman in Conversation
with the Outside Directors
The Nichirei Group is working to makeits corporate governance stronger andmore effective.

The Nichirei Group is working to make its corporate governancestronger and more effective, and proactively incorporates theopinions of outside directors. Nichirei’s chairman and its threeoutside directors met to talk about further enhancing corporate
governance to improve corporate value over the medium tolong term.

The Nichirei Group’s Foremost
Consideration in Corporate
Governancegovernance is guaranteeing management efficiency andsoundness, which is premised above all on ensuring
management transparency. The process of creatingtransparency is likely to be different for each company,
starting, for example, with the choice under Japan’sCompanies Act of whether to be a Company with an

Otani: A corporation is a public institution whose

Audit & Supervisory Board or a Company with apurpose is mutual prosperity and coexistence with all its

Nominating Committee, etc. It is the role of senior

stakeholders, and it must operate within social norms

management to decide the kind of management

and appropriate market standards. One internal system

structure it will create by designing a system accordingthat plays an important role in achieving this is corporate

to the company’s corporate culture and the issues it

governance. I believe that a major objective of corporate

currently faces.

governance is to improve management efficiency throughAs you are aware, corporate governance separates

sound management—in other words, to improve corporate

management execution and supervision. It consists ofvalue and business performance. It is a mechanism forboth monitoring through internal control by the people inincreasing corporate value over the long term throughcharge of management execution and monitoringtransparent, fair, swift and resolute decision-making, andthrough external control, which includes supervision byrequires ongoing, self-sustaining reforms.

the Board of Directors and Audit & Supervisory Board

In line with that objective, I believe that corporate

80

members. The former refers to internal risk control

governance has two roles: first, to prevent reckless

activities by senior management, while the latter consists

management; and second, to encourage prompt actionof external management supervision by shareholders,for proper decision-making. The essence of corporate

the Board of Directors, Audit & Supervisory Board

Nichirei Group Integrated Report 2021

Management Strategy
Value Creation Story

Representative Director,
ChairmanShizuka Uzawa

Mieko Wanibuchi

Kuniko Shoji

Outside Director

Outside Director

Outside Director

compliance and a sound corporate culture andcore businesses are cash cows, I think it should alreadyatmosphere form an important foundation for both. The

be considering its next businesses. Everyone inbasic management policy of the Nichirei Group, which

management from President Okushi on down has madeconsists of four operating companies integrated by a

the Nichirei Group’s goals clear, including the target ofholding company, is transparency, simplicity andan overseas sales ratio of 30% and the vision for thedecentralization of authority. I intend to cultivate aGroup ten years from now, and is sharing that direction

corporate culture that creates value by sharing the manywith employees and customers. These are all laudable

insights generated by our diversity.

actions, but I feel that Nichirei could be a little more

Initiatives for Achievinga Sustainable Society

limited range, except for bioscience. When a company’s
Business Strategy

members and the accounting auditor. A spirit ofFinancial Strategy

Kunio Otani

adventurous. In order to survive, Nichirei must
restructure its business portfolio.

The Nichirei Group’s Corporate
Culture and Future BusinessDirection

Wanibuchi: Looking back five years to when I became
an outside director, my first impression was also that
Nichirei was serious-minded. As a new member of theBoard of Directors, I thought that Nichirei was a wellgrounded and solid company with a long history, and it
has shown itself to be exactly that. However, I feel thatminded corporate culture. Although marine products

Nichirei has changed considerably over those five years.

and frozen foods (processed foods) are derivative

The biggest change has been in transparency. I thinkbusinesses that originate from the Group’s refrigerated

it is becoming a place where any opinion can bewarehouses, its business domains are still within a fairly

discussed without reservation at various meetings.

Nichirei Group Integrated Report 2021

Data

Uzawa: I feel that the Nichirei Group has a serious-

81

The Chairman in Conversation with the Outside Directors

Frozen foods and logistics are the two drivers of

In addition, when launching innovative businesses andthe Company. I think these businesses will endure

projects, experiencing small personal successes is moreas Nichirei moves toward its next stage, so I would like it

important than relying exclusively on external consultants.

to further increase its predominance as number one in

People must have a sense of entrepreneurship to

the industry in Japan and become a leader worldwide.

generate innovation.

Shoji: When I heard about Nichirei from an acquaintance,
I got the impression that it was an excellent company thatvalues quality—and that is exactly what it is. My overall
impression is that of an amicable and good-natured

Points of Focus as a Nichirei Group
Outside Director

company, and even during intense discussions at
meetings, interactions remain cordial. I have the sensethat people with good character are selected to become

Uzawa: The purpose of a corporation is to make a profit

managers and receive proper training.

in a proper manner, but as Mr. Otani said at the start

Regarding the direction of Nichirei’s business, I amof our conversation, propriety requires transparency.

worried about Nichirei’s over-reliance on its two core

Transparency is essential for a corporation to run its

businesses. At this stage, I think it is better for thosebusiness properly. If the chairman or president engages

businesses to be like a bunch of grapes—each growing

in dubious activity, outside directors must be able to callseparately while remaining connected—rather than afor his resignation. Probably our single most importantcollection of outliers detached from the main business.

quality is the ability to judge what is proper. In addition

At Nichirei Fresh, for instance, rather than limiting theto providing this function, I use my personal experience

items it handles, it would be better to strengthen

in management and overseas business to supervise andrelationships with suppliers by focusing on changes

make decisions from a third-party standpoint. As for thein the supply of vegetables and other products. By

directors’ skill matrix, companies lately have started to

specializing in ingredients, the marine, meat and poultryemphasize selecting people not simply because they

products business will grow equally with the otherhave specialized knowledge, but with a view toward thebusinesses, which will further strengthen Nichirei

kind of company they want to become. For the Nichirei

going forward.

Group to endure, it should think deeply about the skill
matrix and continue to appoint appropriate people.

Otani: Here we have three people with three different
perspectives on the Nichirei Group’s businesses.

Wanibuchi: In aiming to increase corporate value over

Just like you, the seven inside directors all have different

the long term, Japanese companies have recently been

opinions.

shifting toward value for all stakeholders, including

Basically, I think it is good to have a technologicalshareholders. The phrase sampo yoshi has long beenorientation when advancing into a new area. It is betterused in Japan to express the aim of doing what is best

to use technology as the basis for generating innovation

for three parties: the company, its business partners andwhen establishing these “outliers” you mention. I dislike

its customers. I think the role of outside directors is tothe discontinuous approach of simply switching areas

point out matters that executives have either not noticed

or domains, but some internal directors have alsoor are aware of but have not resolved, with the goal of

spoken of our need to enter new areas. I am glad we

steady improvement in corporate value over the long

have a management structure that allows us to discussterm. I hold a very unusual position among Nichirei’s

such matters candidly, without having to read between

directors. As a woman, a housewife, and someone withthe lines.

experience in both raising children and caring for an

One issue that needs to be addressed is that the82elderly relative, I look at Nichirei’s products and services

desire to engage in trial and error is somewhat weak

as a consumer, from the perspective of a buyer andat Nichirei. Addressing this will require reforms bothuser. And since I am also the owner of a medium-sized

in individual awareness and in our corporate culture.

enterprise, my perspective comes from direct experience

Nichirei Group Integrated Report 2021

to a considerable extent, with a feeling that the board’s

eager to be of use in these respects.

way of proceeding and holding discussions is steadily

Management Strategy

rather than simply studying documents. I am always

evolving. Furthermore, directors and Audit & Supervisory
Shoji: Outside directors are in a different position from

Board members pointed out three specific areas where

inside directors. But although we approach issues

the Board of Directors is in need of improvement: its rolefrom different perspectives, we consider it our duty toand institutional design, its composition, and its

cooperate in helping the Nichirei Group grow into aadministration and meeting materials management.
First, regarding the institutional design of the Board ofconsider agenda items at Board of Directors meetings

Directors, the current institutional design of a Company

from three aspects: legality, appropriateness andwith Audit & Supervisory Board system was deemed

efficiency, with legality being first and foremost.

appropriate as decision-making and management

In doing so, I intend to offer my opinion based onsupervision are executed effectively, and thus many

whether the matter at hand will lead to happiness forwere of the opinion that there was no need to transition

stakeholders—meaning employees, shareholders andto a different institutional design (a Company with an

the local community.

Audit & Supervisory Committee or a Company with a

Value Creation Story

respected company. The role of outside directors is toNominating Committee). However, we decided toengage in ongoing discussions and review in light offactors such as the Nichirei Group’s management

Financial Strategy

Evaluation of the Nichirei Group’s
Board of Directors and Matters for
Deliberation at Board Meetings

strategies, changes in the business environment going
forward and Corporate Governance Code requirements.
Next, while the composition of the Board of Directors
was evaluated positively as a whole, taking into accountCorporate Governance Code revisions and the annual
investors, many were of the opinion that the proportion

management—in other words, to improve corporateof outside directors should be increased to one-third orvalue and business performance. One key issue in

more. Additionally, there were many other opinions

achieving this objective is determining whether theexchanged regarding inside director composition and

Board of Directors is fulfilling the functions expected ofoutside director diversity. As of FY2022, one female

it. To do so, since 2016 all Nichirei Corporation directors

outside director has been added, bringing the number

and Audit & Supervisory Board members haveof outside directors to four out of a total of elevenparticipated in a yearly evaluation of the Board of

directors. Because the perspective of women is very

Directors. They fill out a questionnaire consisting ofimportant for Nichirei’s business, it has been appointing

evaluation items and add their comments, and every

female outside directors from a relatively early stage

three years, the results of individual interviews are usedcompared with other companies in the industry, andin compiling the final evaluation. From the very start,some of these directors have management experienceobjectivity of the evaluation process has been enhanced

at major corporations. I think the board has achieved

through outsourcing to external experts who assist ina well-balanced composition that ensures genderanalyzing and evaluating the activities of the Board ofdiversity, but our requirements will change along with

Directors and other matters. Summaries of the findings

changes in factors such as the size of the Nichirei Groupare subsequently disclosed.

and the scope of its businesses. We will therefore
continue to review the optimal ratio of outside directors
by considering inside director composition and outside“discussions remained lively in an atmospheredirector diversity.

Data

In FY2021, the external experts offered a generalfinding that at Nichirei’s Board of Directors meetings,

Initiatives for Achievinga Sustainable Society

tightening of voting rights execution criteria for institutional

improve management efficiency through soundBusiness Strategy

Otani: A major objective of corporate governance is toencouraging the sharing of opinions.” On the whole,most respondents held positive opinions indicating thatthe effectiveness of the Board of Directors was secured

Nichirei Group Integrated Report 2021

83

The Chairman in Conversation with the Outside Directors

As for administration of the Board of Directors andOtani: Different topics are taken up at the Board ofmanagement of materials at meetings, many thought

Directors and the Management Committee meetings

that progress was being made in improving materials.

according to degree of impact on management andOn the other hand, several respondents said that further

theme, and I tell all outside directors they are welcome

improvements were needed in the content and timing of

to attend meetings of the Management Committee asprovision of meeting materials, so our investigation

observers if they have time. Agenda items and related

continues. In addition, when new directors and Audit &materials are available on the Company intranet.

Supervisory Board members are appointed, and after
they have taken their positions, we intend to conduct

Wanibuchi: I also attend Management Committee

training as appropriate on revisions to laws, management

meetings about once a month.

issues and other matters.
Furthermore, President Okushi is promoting a

Otani: Furthermore, the Group was a relatively early

succession plan, as suggested in the latest revision

adopter of an electronic (online) voting system. Thisof Japan’s Corporate Governance Code. Taking asoftware enables users to see the number of approvals,

medium- to long-term perspective based on the Nichirei

disapprovals and abstentions for each agenda item at aGroup’s management principles, we have carefully

Board of Directors meeting. Occasionally during in-considered what we should do about our next

person meetings, instances where attendees offer nogeneration of core human resources and Group

opinions may be considered unanimous consent, but

company management. Our conclusions formed thethrough the use of an online voting system participants

basis for subsequent discussion by the Nominating

at Nichirei Group meetings can see all of the votes.

Advisory Committee. Now that a sample group of

Discussions are especially lively when the topic is anhuman resources has been selected, the Nominating

investment or M&A proposal. All directors, whether

Advisory Committee is now considering the education

inside or outside, engage in a candid exchange on

to be provided and the perspectives to be taken inmatters such as whether a project’s value has beendeveloping the careers of candidates going forward.

overrated and is out of sync with actual conditions, or if

Succession plans are concurrently moving forward atthere are issues with post-merger integration, andthe operating companies, with practical training being

unhesitatingly give their opinions on how to proceed.

conducted during meetings.
Uzawa: To give one example of the lively discussions
we have at Board of Directors meetings, we held three
discussions to review Nichirei’s past overseas expansion

What the Nichirei Group Should Do
to Achieve Sustainable Growthand measures for future success. Discussions over the
past year have been especially open, allowing outside
directors to grasp the situation. The materials outside

Shoji: Since the Nichirei Group’s main businesses are

directors receive are not perfect, but they are more

food and logistics, I think it should work to reduce its

standardized and easier to understand than before.

environmental footprint for the sake of its own corporate

In addition, outside directors are normally requiredsustainability, viewing related investments as expenses

to attend Board of Directors meetings, but in some cases

necessary for maintaining that sustainability. I have

we also have the chance to attend Managementa great deal of confidence in Nichirei’s sustainability

Committee and other meetings and provide our opinions

because when making investment proposals foras reference to executives, so I feel I have a much better

production plants and refrigerated warehouses, materials

understanding than I did when I began here. I sometimes

used in the discussion always mention environmental

attend Management Committee meetings as often as

considerations. Even though the investment amount may

once a week.

be considerable, Nichirei should regard it as a necessity,with the understanding that the sustainability of society
will lead to the sustainability of the Nichirei Group.

84

Nichirei Group Integrated Report 2021

enterprise is a creature of a society and an economy,

to reflect ESG and the SDGs as the Nichirei Group set

and society or economy can put any business out offorth its five material matters. In FY2022, we haveexistence overnight.” A corporation is inextricably linked

summarized the results of our extensive discussions onwith and a member of society. That is why I think that

how to actually manage these material matters, and I

every company is able to help resolve social issues

think that the results of our discussions will be used inthrough its activities based on its mission. The Nichirei

Nichirei’s sustainable management.

Group’s Mission is to “Focus on Lifestyles, and Provide

Management Strategy

Wanibuchi: The Nichirei Pledge was changed last year

True Satisfaction.” Based on this mission, we establishedour long-term vision to “continue to support good

conducting corporate activities for the purpose ofeating habits and health by leveraging our state-of-the-making a social contribution because the activities

art manufacturing practices that optimize nature’s

themselves result in a contribution to society. The ability

bounty, along with our leading-edge logistics services.”to make capital expenditures with a low burden on the

We believe that making this vision a reality will ensure

environment to generate profit, and then return thatsustainability for both Nichirei and society. I am confident

profit to stakeholders is, in a broad sense, fulfilling anthat by steadily continuing corporate activities day after

obligation to all stakeholders, including the Earth. ESG

day in good faith based on our mission, we will help

and the SDGs are one set of guidelines for corporate

resolve social issues.
Our inside and outside directors used this approach

environmental issues should be seen as the result,to decide on Nichirei’s five material matters. Goingrather than the purpose, of those activities.

forward, we will incorporate specific measures andFinancial Strategy

activities, but contributing to resolving social andValue Creation Story

Uzawa: I do not believe it is necessary to think about

quantitative targets based on these matters into our
Otani: In Peter Drucker’s book Management: Tasks,

management strategy in order to share them among

Responsibilities, Practices, he says that “the businessall employees and move forward with implementation.

Business Strategy
Initiatives for Achievinga Sustainable Society
Data

Nichirei Group Integrated Report 2021

85

Initiatives for Achieving a Sustainable Society

Environment

SocialGovernanceCorporate Governance
Basic Policy and Structure
On the basis of its holding company structure, the Group engages in business through its Group companies across a wide
range of fields that includes processed foods, marine products, meat and poultry products, logistics, and biosciences. In
pursuit of sustainable growth and the enhancement of corporate value over the medium to long term, the Company’s Boardof Directors formulates Group strategies and supervises the business execution of operating companies.
The holding company adheres to the principles of the Corporate Governance Code and views the achievement of fair
and transparent management as an important management issue. Accordingly, under the supervision of the Board of
Directors, we will promote appropriate resource allocation, while in terms of continuing to strengthen governance we will
speed up decision-making and ensure thorough compliance.
In addition, we have established ourselves as a company with an Audit & Supervisory Board system, an institutional
design specified within the Companies Act of Japan.
Corporate Governancehttps://www.nichirei.co.jp/english/corpo/governanceCorporate Governance Structure (As of June 22, 2021)

General Meeting of Shareholders
Appointment/Dismissal

Holding company

Appointment/Dismissal

Appointment/
Dismissal(Advisory bodies)

Nominating Advisory
Committee
Remuneration
Advisory Committee

Appointment
ReportBoard取締役会
of Directors

11名

11 directors

Audit

Audit & Supervisory
Board

5 members

Cooperation

2 inside Audit &Supervisory Board members
7 inside directors• Group Risk Management
Committee

4 outside directors (3 women)• Group Environmental
Protection Committee• Group Quality AssuranceCommittee• Group Strategy Committee• Group Supply Chain
Committee• Group Monitoring Committee• Group Commitment Conference• Group Internal Control
Committee• Group Officer Examination
Committee• Social Action Program
Committee• Examination Committee• Intellectual Property
Management Committee

Supervision
Cooperation(Business execution)

Representative Director,
President

Audit

Management Committee(Executive Officers)
Corporate Staff Divisions(Business Execution) Operating Companies

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Nichirei Group Integrated Report 2021

Audit

3 outside Audit &Supervisory Board members

Corporate
Internal Audit
Division

Cooperation

Audit

Audit

Accounting Auditor• Group Human Resources
Committee

Activities Aimed at Strengthening the Nichirei Group’s Corporate Governance Structure
FY2006

FY2007FY2013

FY2016FY2017FY2019FY2020

FY2021

Management Strategy

FY2002

FY2022

Shift toholdingcompanysystemGroup
structure
Separation of
Implementation
management of executive
supervision officer systemand execution

Shift to three
independent
outsidedirectors

Femaleoutsidedirectors

One
First female
outsidedirector
appointed

Four outside
directors

Value Creation Story

Outsidedirectors

Two
Three

Outside Audit& Supervisory
Board
members

Three

Establishmentof voluntarycommittees

Retirement
bonuses for
directors
discontinued

Officerremuneration

Formulationof Group
Disclosure
PolicyRevision of Basic Policy on
Corporate Governance (Revisions
to policy on capital management
and other protocols andadjustments to maximum termsof office for outside Audit &Supervisory Board members toensure their independence)

Business Strategy

Overview of Board of Directors
Composition

Revisionof officer
remuneration
systemDiscontinuationof rulesregarding the
Basic Policy
high-volume
on Corporatepurchase of
GovernanceNichirei shareestablishedcertificates, etc.
(Anti-takeovermeasures)

OthersFinancial Strategy

Board ofDirectors
effectivenessevaluations
startedEvaluation ofeffectivenessof Board of
Directors

Overview of Audit & Supervisory Board
Composition

5 Audit & Supervisory Board members

18

Number ofmeetings in
FY2021

16

Description ofoperations

Promotes proper allocation of Group resources,
swift decision-making and thorough compliancethrough supervision of the Group’s strategy
planning and business execution of operatingcompanies. After discussion by the Group Strategy
Committee, which meets twice a year, the Boardof Directors formulates and approves the Group’s
strategies and conducts quarterly checks of thestatus of implementation at each Group business.
It also engages in highly effective supervision of
executive directors and executive officers.

Description ofoperations

As a body that is independent from the Boardof Directors, the Audit & Supervisory Board
communicates with directors, Corporate Internal
Audit Division and other departments of theholding company in accordance with the annual
audit policy and audit plan to gather informationand prepare the audit environment.

Initiatives for Achievinga Sustainable Society

11 directors (4 outside directors)

Number ofmeetings in
FY2021

Status of the Establishment of Voluntary Committees, Their Composition and
the Attributes of Their Chairpersons
Role

Chairperson

Frequency

Nominating
Advisory
Committee

Discusses the suitability of candidates for senior management and directors/
Audit & Supervisory Board members, as well as successor plans, and reports
its findings to the Board of Directors.

Shizuka Uzawa
Outside Director

Twice a year,
in principle

Remuneration
Advisory
Committee

Discusses the remuneration system, remuneration levels, the appropriatenessof remuneration amounts, and other related matters, and reports to the Boardof Directors.

Shizuka Uzawa
Outside Director

Twice a year,
in principle

Nichirei Group Integrated Report 2021

Data

Committee

87Corporate GovernanceStatus of Appointment of Members to the Board of Directors and Various Committees
Status of Appointment
Representative
Director, Chairman
Representative
Director, President
Inside directors• Management Committee• Group Human Resources
Committee• Group Environmental• Boards of Directors
Protection Committee• Group Quality Assurance• Group Risk
Committee
Management• Social Action Program
Committee
Committee• Group Internal
Control Committee

Audit & Supervisory• Group Officer
Board members
Examination
Committee■Number of Meetings Held2018 2019 2020
Board of Directors

19

18

18

Nominating Advisory Committee

2

2

5

Remuneration Advisory Committee

6

3

5

Management Committee

23

20

17

Group Human Resources Committee

2

2

2

Group Risk Management Committee

2

2

2

1

Group Environmental Protection Committee

3

2

2

Outside directors

Group Quality Assurance Committee

2

2

2

Outside Audit &Supervisory Board
members

Group Internal Control Committee

1

1

1

Group Officer Examination Committee

―

1

1

Social Action Program Committee

1

1

1

2

1. As of January 2020, meets twice a year in principle according to theRemuneration Advisory Committee rules
2. Meetings are called by the chairperson on an as-needed basis

Evaluations of Effectiveness■Board of Directors Evaluations
As necessary, and with the assistance of outside experts, the Company conducts analyses and evaluations of the Boardof Directors’ activities to ensure its decision-making is effective. Summaries of the results are subsequently disclosed.

Evaluation
procedure

Subjects: Directors and Audit & Supervisory Board members (15 individuals in total)
Period: January–February 2021
Method:	Self-assessment involving questionnaires and individual interviews
conducted by third-party experts

Opinions of directors and Audit & Supervisory Board members in their questionnaire
responses and individual interviews

Summary offindings• Although some of the methods of management by Nichirei’s Board of Directors
changed due to COVID-19, such as using an online meeting system, discussions
were still lively and the atmosphere was conducive to speaking up.
• There were many positive opinions to the effect that the Nichirei Board of Directors
has achieved a considerable degree of overall effectiveness, in ways such as
improving the provision of materials in order to further enhance board discussions.
• Furthermore, respondents pointed out multiple areas needing improvement in orderto enhance the board’s effectiveness. They are described on the following page, andare expected to be incorporated in future board deliberations.

88

Nichirei Group Integrated Report 2021

■The Board of Directors Role and Institutional Design

Value Creation Story

Future approach

In light of Nichirei Group management strategies, changes in the business environment going
forward and Corporate Governance Code requirements, the Company decided to engage
in ongoing discussions regarding the role of the Board of Directors, as well as institutional
designs most appropriate for executing that role, while continuing to review options including
the transition to a company with audit and supervisory or nominating committees.

Management Strategy

Initiative

The current institutional design of a company with Audit & Supervisory Board system wasdeemed appropriate as decision-making and management supervision are executed
effectively, thus many were of the opinion that there was no need to transition to a different
institutional (a company with audit and supervisory or nominating committees) design. There
were also many opinions indicating that, depending on future conditions, the board should
examine transitioning to another institutional design that places more emphasis on the Boardof Directors supervisory function.

■Board of Directors Composition

Future approach

In light of Group management strategies and recent requests from institutional investors toincrease the ratio of outside directors, the number of outside directors was increased by one
at the General Meeting of Shareholders held on June 22, 2021. In all, 11 directors, including
four outside directors, were appointed. Going forward, the Company decided to continue
examining inside director composition and outside director diversity and will consider whether
or not to increase the outside director ratio over the medium to long term.

Financial Strategy

Initiative

While the ratio of outside directors among board members was evaluated positively as awhole, taking into account Corporate Governance Code revisions and the annual tighteningof voting rights execution criteria for institutional investors, many respondents were of theopinion that the ratio of outside director appointments should be increased to one-third or
more. Additionally, there were many other opinions exchanged regarding inside director
composition and outside director diversity.

■Board of Directors Administration and Meeting Materials Management

Initiatives for Achievinga Sustainable Society

Future approachWith a view to energizing Board of Director deliberations and improving its efficacy by further
innovating and enhancing the content of meeting materials and providing information inadvance, the Company decided to provide materials even further in advance of meetings,
create opportunities to share required information regarding projects of high importancein advance, and pursue improvements in the format of proposal materials used from 2020
pertaining to investment and financing projects and other specific agenda items that tend to
involve a comparatively large volume of materials.

Business Strategy

Initiative

Many respondents gave positive assessments of the progress made in improving meeting
materials in response to paperless initiatives implemented since October 2018. At the sametime, several respondents were of the opinion that further improvements were needed
regarding the content and timing of provision of Board of Director meeting materials.

Efforts to Ensure Meaningful Discussions
Nichirei distributes materials for use at Board of Directors meetings to each director and Audit & Supervisory Board
member at least three days in advance of meetings in order to ensure meaningful discussions.
When internal communication and coordination are required to accurately provide Company information in response
to instructions from independent outside directors or independent outside Audit & Supervisory Board members, theDatasecretary in charge acts as the contact point in order to ensure necessary coordination with relevant departments.
Newly appointed directors and Audit & Supervisory Board members are given training as necessary on the Companies
Act and other related laws, management strategy, financial analysis and other such matters. Additional training on
legislative revisions and management issues is provided as necessary after new members assume office. Moreover,
explanations of the Group’s businesses and tours of the major facilities are provided to outside officers as necessary.

Nichirei Group Integrated Report 2021

89

Corporate GovernanceOutside Directors and Outside Audit & Supervisory Board Members Appointments■Reasons for Appointment of Outside Directors and Main Activities
Name

Shizuka Uzawa

Mieko Wanibuchi

Kuniko Shoji

Mana Nabeshima

Designation as
Independent
Director

Reasons for Appointment〇

Mr. Uzawa has extensive experience as a corporate executive in
addition to wide-ranging knowledge of finance and accounting
and, in the interest of Group management, provides opinions andadvice during meetings of the Board of Directors and various otherinternal meetings (including meetings of the Nominating Advisory
Committee and Remuneration Advisory Committee).

〇Ms. Wanibuchi has worked in corporate management for many years
and leverages the experience and knowledge acquired throughthese endeavors to offer opinions and advice during meetings ofthe Board of Directors and various other internal meetings (including
meetings of the Nominating Advisory Committee and Remuneration
Advisory Committee) from perspectives that include the productand service purchasing behaviors of consumers.

〇

Ms. Shoji has extensive experience as a corporate manager inpharmaceutical-related businesses and broad knowledge of
quality assurance and R&D. She also offers opinions and advice
during meetings of the Board of Directors and various otherinternal meetings (including meetings of the Nominating Advisory
Committee and Remuneration Advisory Committee).

〇Ms. Nabeshima has extensive experience in overseas operations anda wide range of knowledge in finance. Accordingly, the Company
has appointed her as an outside director in order to take advantageof her experience and knowledge in management.

■Reason for Appointment of Outside Audit & Supervisory Board Members and Main Activities
Name

Yuhiko Saito

Kiyoshi Asahina

Muneaki Kiyota

Designation as
Independent
Director

Reasons for Appointment〇

Mr. Saito has had a career in the legal profession and has held
judicial positions in government office. Having worked as an
attorney since retiring from public office, he possesses a wealth ofexperience and detailed knowledge as a legal expert.

〇

Mr. Asahina engaged for many years in both domestic and foreignbusiness affairs in administrative fields related to agriculture, forestry
and fisheries. He has gained a wealth of understanding and expert
insight from leading independent audits.

〇

Mr. Kiyota has held important positions in financial institutions,most of which were based abroad. He then served as an Audit& Supervisory Board member and director at a domestic
manufacturing company for approximately 10 years. He has agreat deal of experience in, and understanding of, corporate
management.

Note: As Mr. Asahina and Mr. Kiyota were newly appointed at the General Meeting of Shareholders held on June 24, 2020, their attendance reflects meetings held
after that date.

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Nichirei Group Integrated Report 2021

• Chairperson, Nominating
Advisory Committee• Member, Nominating
Advisory Committee• Member, Remuneration
Advisory Committee• Member, Remuneration
Advisory Committee• Member, Nominating
Advisory Committee• Member, Remuneration
Advisory Committee

5

18/18

5

18/18

3

ー

Appointed June 2021

Board of Directors/Audit &Supervisory Board Meeting
AttendanceYears of Service as Audit &Supervisory Board Member

Business Strategy

Advisory Committee(s)18/18Financial Strategy• Member, Nominating
Advisory Committee

Years of Service as Director

Value Creation Story• Chairperson, Remuneration
Advisory Committee

Board of Directors Meeting
AttendanceManagement Strategy

Advisory Committee(s)

ー

18/18
Audit & Supervisory Board

Initiatives for Achievinga Sustainable Society

Board of Directors
2

16/16

Board of Directors
ー

14/14
Audit & Supervisory Board

1

11/11

ー

14/14
Audit & Supervisory Board

Data

Board of Directors
1

11/11

Nichirei Group Integrated Report 2021

91

Corporate Governance

Officer Remuneration System■Policies and Methods for Determining Officer Remuneration
The policy for determining individual director remuneration is for the Remuneration Advisory Committee to discuss theappropriateness of each director’s remuneration every fiscal year and for the decision to be made by the Board of
Directors. In these discussions, the Remuneration Advisory Committee reflects changes in the management environment
and the opinions of shareholders and investors, and obtains information necessary for discussion from third-party
agencies with extensive global knowledge and experience.
■Basic Policies
Directors (excluding outside directors)• Remuneration shall strongly encourage directors to perform their duties in accordance with the Group’s Management
Principles, basic CSR policy, the Nichirei Pledge and management strategies.
• In order to achieve long-term management goals, remuneration is set to strongly motivate directors to achieve specificmanagement goals with regard to the Group’s material issues and medium-term business plans.
• In order for remuneration to serve an incentive toward the Group’s sustainable growth, the ratio of remuneration linked
to short-term results, performance of duties, etc. (performance-linked bonuses) and remuneration linked to medium- tolong-term results and corporate value (stock compensation) will be set in an appropriate manner.
• Directors and executive officers shall be treated in a manner befitting their positions as officers of the Company inconsideration of the significance of the Group’s social role and responsibilities, trends at companies, including those in
the food and logistic industries, that compete with the Group in terms of business and human resources, and changes
in the business environment.
Outside Directors• In light of their role of supervising the Company’s management from an independent and objective standpoint, outside
directors are paid only basic remuneration (fixed) compensation.
Directors (excluding outside directors)• As shown below, remuneration for directors other than outside directors consists of role-based remuneration and a
director allowance, which are basic (fixed) remuneration, and performance-based bonuses and stock compensation,
which are variable remuneration.
Remuneration Composition

Basic (fixed)
remunerationRole-based
remuneration

Purpose/Description

Basic remuneration for performance of duties
Set according to the significance of the role of each director

60%
Director
allowance

Performancelinked bonuses
Variable
remuneration

GeneralPercentage

Stockcompensation(restricted
shares)Remuneration for the responsibilities of making and supervising the execution of management decisions
Set at a uniform amount for all directors

20%

Remuneration for motivating directors to achieve annual financial and strategic goals
The amount paid when achieving goals (“standard amount”) is set as a percentage of role-based
compensation
Paid within a range of 0-200% of the standard amount according to degree of achievement

20%

Remuneration for encouraging management from a long-term/Group-wide perspective and the perspectiveof shareholders and investors
Value of shares issued each fiscal year (“standard amount”) is set as a percentage of role-based compensation
Restricted shares are issued annually in an amount equal to the standard amount, and restrictions are lifted
upon a director’s retirement■Performance-Linked Bonuses
The total amount of monetary remuneration to be paid toeach director as a performance-linked bonus is calculatedby dividing the standard amount set according to thesignificance of the director’s role into three categories,
namely “Company-wide evaluation,” “Business evaluation,”and “Individual evaluation,” multiplying these amounts by
the respective evaluation coefficients and adding therespective results.

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Nichirei Group Integrated Report 2021

Standard amount of performance-linked bonus

Position

Company-wide
evaluation

Representative
Director, President

100%

Director (in charge ofbusiness)

50%

Director (in charge offunction)

70%

Business
evaluation

Individual
evaluation

30%

20%
30%

Amount of individual bonus =Company-wide evaluation standard amount x Company-wide
evaluation coefficient (0-200%)+ Business evaluation standard amount x Business evaluation
coefficient (0-200%)+ Individual evaluation standard amount x Individual evaluation
coefficient (0-200%)

KPIs for Calculating the Company-wide
Evaluation Coefficient

WeightReason for Selection

Consolidated net sales

20%

Indicator of expansion of business scale, which is a sourceof profit growth

Consolidated EBITDA

60%

Indicator of cash flow generation capabilities and profit
growth while actively investing for growth

Consolidated REP

20%

Indicator contributing to improving corporate value by
taking capital cost into accountManagement Strategy

The key performance indicators (KPIs) for calculating each evaluation coefficient are selected from among the financial
and strategic indicators that the Company emphasizes in its medium-term business plan. The KPIs for calculating theCompany-wide evaluation coefficient and the weights are provided below.

Value Creation Story

Notes:
1. The KPIs for calculating the business evaluation coefficient are net sales (25%) and EBITDA (75%), consistent with the Company-wide evaluation. The KPIs forcalculating the individual evaluation coefficient are particularly important items (including initiatives to improve REP in each business and initiatives related to training
successors) selected individually from the Company’s medium- to long-term strategic issues and challenges.
2. Retained Economic Profit (REP) is a unique business management indicator used by the Group and is calculated by deducting capital costs (capital used x WACC)
from NOPAT.

Financial Strategy■Procedures for Determining Remuneration
In order to ensure appropriateness and objectivity in matters related to remuneration for individual directors, theRemuneration Advisory Committee, comprising mainly independent outside directors, discusses matters first and reports
its findings to the Board of Directors, which then makes its decisions. The Remuneration Advisory Committee has
discussions that touch on changes in the management environment and opinions of shareholders and investors, andappropriately obtains information necessary for discussion based on objective and expert standpoints.
In the process of determining the amount of individual performance-linked bonuses, the representative director, president,
who has been delegated by the Board of Directors, interviews each director in regard to individual performance targets andevaluation results and makes a proposal. This proposal is discussed by the Remuneration Advisory Committee, and then the
representative director, president, decides on the final amount. In order to ensure objectivity and fairness in the determinationof individual performance targets and evaluation results, the results are reported to the Board of Directors in a timely andappropriate manner. The final amount of individual bonus payments proposed by the representative director, president, isthen discussed by the Remuneration Advisory Committee and decided by the Board of Directors.

Business Strategy

Total Amount of Officer Remuneration in FY2021
Total amount of remuneration by category (Millions of yen)
Performance-linked
bonuses

Restricted stockcompensation

Total amount of
remuneration (Millionsof yen)Number of eligible
officers

Directors (excluding outside
directors)

262
(162)

81
(48)

85
(85)

428
(295)

7
(7)

Outside directors

32

32

3

Audit & Supervisory Board members(excluding outside Audit &Supervisory Board members)

48

48

2

Outside Audit & Supervisory
Board members

32

32

5

Total

374
(274)

541
(408)

17
(17）

81
(48)

85
(85)

Initiatives for Achievinga Sustainable Society

Basic remuneration

Officer classification

Approach to Cross-Shareholdings

Nichirei Group Integrated Report 2021

Data

Cross-shareholdings are only utilized when it is determined that they will contribute to improvement of the Company’s
corporate value; for example by maintaining and strengthening trade and cooperative relationships. In addition, every
year, the Board of Directors reviews the economic rationale of individual shareholdings of this type from a medium- tolong-term perspective. If the importance of a particular shareholding is determined to have diminished, the shares are
sold. In conducting such reviews, the Board of Directors carefully examines and makes a comprehensive judgment onwhether the benefits, such as profits from transactions, and dividends or risks are commensurate with the cost of capital,
followed by consideration of a qualitative evaluation of the strategic importance of the shareholding.
In regard to the exercise of voting rights for cross-shareholdings, the Company will review all the details of the relevant
proposal in the investee company’s shareholders meeting agenda, and if any of the following apply to the investee
company, the Company will make a decision after carefully examination on a case-by-case basis:(1) The investee has engaged in acts that will lead to a loss of shareholder value(2) The investee’s performance or stock price has deteriorated significantly(3) There are other serious doubts with respect to agreeing to the proposal
93

Initiatives for Achieving a Sustainable Society

Environment

SocialGovernanceInternal Control/ComplianceApproach to Internal Control
The Group recognizes that developing and operating an internal control system to facilitate operational effectiveness andefficiency, ensure the accuracy of financial reports, comply with laws and regulations pertinent to business, and to safeguard
its assets will translate into higher corporate value.
In terms of the development of systems necessary to ensure that the execution of the duties by the directors complies
with laws and regulations and the Articles of Incorporation, and other systems prescribed by ordinance of the Ministry ofJustice as systems necessary to ensure the propriety of operations of the Company and the operations of the group ofenterprises consisting of the Company and its subsidiaries pursuant to the Companies Act of Japan, the Company has
established the basic policy for its internal control system as follows. The Company will endeavor to improve the policy byreviewing it annually to adapt to changes in the business environment, etc.

Internal Controls Basic Policy
1. Compliance with the law and internal regulations
2. Managing information on Company, subsidiary directors
3. Risk management of Company, subsidiary losses
4. Group duties of Nichirei, subsidiaries (besides those in 1-3 above)
5. Exclusion of antisocial forces
6. Audit & Supervisory Board Members and independence of employees
7. Systems for reporting to Audit & Supervisory Board Members
8. Ensuring compliance of Audit & Supervisory Board Members

Compliance
The Nichirei Group is engaging in a variety of initiatives
aimed at improving its corporate ethics by ensuring
compliance with the laws and social norms of all thecountries in which it operates. Accordingly, the Grouphas created guidelines for proper employee behavior inline with laws, its internal regulations, and corporate
ethics, as well as a code of conduct and a code of
conduct casebook, which provides clear examples ofappropriate behavior. These documents also include
information concerning matters related to the preventionof corruption that have been deemed important from theperspective of international compliance, including insider
trading bans and the prohibition of engagement or
trading with antisocial forces. In addition to providing
this information, the Group conducts employee compliancetraining aimed at ensuring a more pervasive understandingof compliance management and a more universal
compliance management framework.

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Nichirei Group Integrated Report 2021

Nichirei Group Code of Conduct
1. Compliance with Laws and Regulations Concerning Respectfor Human Rights and Labor
2. Environmental Protection
3. Compliance with Laws and Regulations and Internal
Regulations
4. Management and Preservation of the Company’s Property
5. Prohibition on Personal Use of the Company’s Property
6. Prohibition on Insider Trading
7. Ensure the Reliability of Financial Information
8. Management and Use of Information
9. Prohibition of Personal Acts Conflicting with the Company’s
Interests
10. Prohibition on Unfair Benefits Given to/Received from
Public Officers or Business Partners
11. Prohibition on Involvement/Trade with Antisocial Forces
12. Compliance with/Reporting of and Consultation on Codeof Conduct

Educating Employees about the Code of Conduct to Ensure ComplianceManagement Strategy

The Group seeks to continue commanding trust, based on the high ethical standards of its board members and employees.
Following the April 2014 revision of our code of conduct, we included it and the Group management principles in theemployee handbook.
In addition, a guidebook on the use of social media has been distributed to all employees and, on the Group’s intranet,
we publish a monthly series of slideshowstyle materials designed to help employees
贈り物の要求公務員への金品贈与
understand case studies related to thecode of conduct.
In addition, the Nichirei Group has beenoffering e-learning sessions to educate
and train employees, based on its inhouse educational rules. The Nichirei「もらうなら ビールが一番」?! あきれます
お礼して お互い捕まる こともある・・・Group is committed to continue providing
Presentation materials related to the code of conduct
compliance training.
あなたは
大丈夫？
その 11

CASE

あなたは
大丈夫？
その 28

Ａさんは、仕入先から毎年のように自宅に送られてくる中元や歳暮を受け取るだけでなく、商品の希望まで伝えていました。

CASE

輸入貨物担当のＡさん。税関の担当職員の配慮で通関できたため、後日、経費で商品券を購入し、お礼として担当職員に渡しました。

Value Creation Story

ニチレイグループでは、業務に直接関わりのある公務員との贈物・飲食・ゴルフを一切禁止しています。

Ａさんの行為は、仕入先に対する「たかり」とみなされても仕方ないもので、会社の信用を失うことにつながります。

お礼の気持ちであっても、金品を贈ってはいけません。

また、仕入先と癒着して公正な取引関係が損なわれた末に会社が高い買い物をすることになれば、背任行為にも当たります。

将来的に利益を受ける可能性を期待したとも受け取られ、職務上の地位や立場を私利私欲のために利用することは、恥ずべき行為で、許されるものではありません。

贈賄罪・収賄罪が成立する危険性があります。

とほ ほ
川柳

とほ ほ
川柳

株式会社ニチレイ

行動規範（３）（９）

株式会社ニチレイ

行動規範（10）

Initiatives to Prevent Bribery and Corruption
Financial Strategy

The Company is working to prevent anyone working for the Nichirei Group from engaging in acts of bribery involving
public officers or others by clarifying the basic matters they should comply with and by using the Bribery and Corruption
Prevention Manual to familiarize them with specific matters that require caution. Applicable laws and regulations include
not only those of Japan but also those of major related countries and regions, including the European Union, the UnitedStates, the United Kingdom and China, and they apply to all officers and employees of Group companies, regardless ofwhether those entities are in Japan or elsewhere.

Internal Whistleblower Hotline and Consultation Service
Business Strategy
Initiatives for Achievinga Sustainable Society

In October 2003, the Company introduced an internal reporting and consultation hotline. This allows employees to report, or
seek advice on, actions that violate laws or company regulations, or that are ethically questionable.
In FY2016, the Company updated its internal whistleblower hotline system in response to the requirements of Japan’s
new Corporate Governance Code, which specifies that internal whistleblower hotline systems are to be independent from acompany’s management. To ensure that all employees are aware of the new hotline, the Company created and distributed
promotional posters for its workplaces and reminder cards for employees.
In accordance with Company policy, all reports received are relayed to top management by the administration office,which also conducts an investigation to confirm the facts,
implements corrective measures and provides feedback to theperson who made the report (when not reported anonymously).
Anonymity is preserved to protect the identity of the person
reporting, while the process is carefully managed to ensure
there is no retaliation against or adverse treatment of theperson reporting by those who are the subject of complaints.
Nichirei Hotline card

Number of Internal Reports Received
FY2018FY2019FY2020

FY2021

20

35

12

21

27

Five-year total(FY2017–2021)

115

Nichirei Group Integrated Report 2021

Data

Total

FY201795

Initiatives for Achieving a Sustainable Society

Environment

SocialGovernanceRisk Management
Approach to Risk Management
The Nichirei Group has established the Group Risk Management Committee, chaired by the representative director,
president, to manage the various risks associated with its business activities, in the most appropriate and rational way
from a comprehensive standpoint, and to maximize the Group’s corporate value. The committee identifies and evaluates
Group-wide risks, and Nichirei and its operating companies take countermeasures to these risks on their own accord,
based on the established risk management cycle. Important items are reported to the Board of Directors of Nichirei
Corporation, the holding company, which considers countermeasures.

Risk Management StructureP

Board of Directors
Representative
Director, President• Formulate risk
countermeasure policies•E stablish targets for the
coming fiscal year

Group Risk Management Committee

Classify risks andmanage themrationally throughthe most appropriate
methods and bestsuited departments

A

Group Environmental
Protection Committee
Group Quality Assurance Committee•R eviews for responsible
individualsGroup Supply Chain Committee• Modify and improve risk
countermeasures

Group Internal Control Committee•D raw up an action plan

Risk management
cycle

C

D

• Educational anddevelopmental activities• Implement action plan

• Check status of Groupwide controls

Group Officer Examination Committee• Working evaluation of risk
countermeasures•U nderstand and evaluate risksIntellectual Property
Management Committee• Internal and external audits•O perational testing

Examination Committee

Committee

PurposeGroup Risk
Management
Committee

To use the most appropriate and rational methods to comprehensively manage
uncertainties that could damage the Nichirei Group’s corporate value. An Overseas
Compliance Subcommittee and Information Security Subcommittee have been
established under this committee to monitor progress on measures related toresponding to important risks.

Group Environmental
Protection Committee

To contribute to coexistence with an environmentally friendly society. This includes
reducing environmental impact, enhancing environmental protection activities andcompliance with legal requirements such as environmental laws, regulations andordinances.

Group Quality
Assurance Committee

Kenya Okushi
Representative
Director, President

To achieve the product and service quality expected by customers and society.

Group Supply Chain
Committee

To plan and review uniform Group-wide initiatives for building and maintaining a soundand sustainable supply chain and to contribute to the mutual prosperity and harmony ofstakeholders of the Nichirei Group and its supply chains.

Group Internal Control
Committee

To enhance the business operations of Group companies and improve efficiency by
establishing, operating, monitoring and improving internal control systems at each Group
company.

Group Officer
Examination
Committee

96

Chairperson

Consulting lawyer

Nichirei Group Integrated Report 2021

To ensure the fairness of rewards and punishments for directors and executive officers of
the holding company and four core operating companies.

Important Risks and Countermeasures of the Nichirei GroupManagement Strategy

Management
SystemIn response to environmental changes, the Nichirei Group is promoting innovation through its
wide-ranging businesses, which provide value in the fields of food and health, and creating new valuethat offers solutions to issues facing its customers and society at large. Through these efforts, theGroup contributes to good eating habits and health for all people.

Strategic
management

Finance

The Company works to minimize the impact of exchange rate fluctuation on business results throughforward exchange contracts and other measures. In regard to fixed asset holdings, the Company has
introduced a PDCA cycle for each investment, and clarifies the items for consideration when preparing
investment plans, as well as the rules for post-investment verification to ensure proper operations.

Finance

Changesin laws,
regulations,and businesspractices

The Nichirei Group works to ensure thorough compliance based on the Nichirei Pledge, which is theGroup’s basic CSR policy. The Group also pays careful attention to trends in the laws and regulationsof each country and region and gathers necessary information. The Group recognizes changes in laws
and regulations related to the environment and society as particularly urgent issues from thestandpoint of both risk and opportunity and takes action accordingly.

Strategic
management

Food quality
issuesIn order to provide customers with reliable products and services, the Nichirei Group works to enhance
its integrated quality assurance system from product development to procurement of ingredients,
production and sales. Ensuring food safety and reliability is the Group’s top priority. This includes
appropriate ingredient and product quality and production control, development of traceability
systems, food defense initiatives, and training and proper allocation of personnel.

Group Quality
Assurance Committee

Supply chain

The processed foods business continually improves formulation technology and production efficiency
to reduce manufacturing costs and develop products that offer greater value. The marine, meat andpoultry products business works to balance supply and demand in procurement and sales, expand thelineup of processed products that are less susceptible to the impact of fluctuating market prices, andincrease sales of differentiated products. In addition, this business makes efforts for sustainable foodprocurement by carrying MSC/ASC-certified marine products, procuring sustainable palm oil, andconducting a sustainable-cycle poultry business.

Group Supply Chain
Committee, Group
Environmental
Protection Committee

Climate change

As climate change initiatives, the Nichirei Group is working to conserve energy in ways such as
introducing highly efficient equipment, and is switching from fluorocarbon to natural coolants. The
Group is also introducing solar power generation equipment and purchasing green power certificatesand other sources of renewable energy that do not produce CO2 emissions. In addition, the Group is
conducting ongoing assessments of the impact of climate change and disclosing information according
to the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

Group Environmental
Protection Committee

Information
systems/
security

In regard to information security, the Nichirei Group has implemented technical measures against
external cyberattacks, including a firewall, an intrusion detection system and a proper authentication
system. At the same time, the Group is working to build an appropriate management structure for its
information systems by preparing rules on information security and providing e-learning and othertraining to employees.

Group Risk
Management
Committee

Disasters

As countermeasures for large-scale natural disasters, the Group is proceeding with seismic retrofitting
work and deploying emergency generators and has established an employee safety confirmation
system as well as a disaster prevention manual and business continuity plan (BCP), and utilizes multiple
data centers.

Group Risk
Management
Committee

Business Strategy

Economic
conditions
and businessenvironment

Financial Strategy

Countermeasure

Value Creation Story

Risk Category

Business Continuity Plan Initiatives

Data

Nichirei Group Integrated Report 2021

Initiatives for Achievinga Sustainable Society

Employee Safety
Group Countermeasures Headquarters in Response to COVID-19
Core Logistics System BCP
Conceptual Diagram
In January 2020, we set up the Group Countermeasures Headquarters in response to
COVID-19. In addition to collecting and sharing information throughout the Group,
between January and July 2020 we sent out 24 messages on the Company intranet,
Main site
Disaster recovery sitewith instructions regarding work systems and infection prevention measures. We areWestern Japan Data Center
Eastern Japan Data Center
Normaloperations
Response to disastercreating a crisis management system to strike a balance between the prevention of
in western Japan
infection and the need for our employees to engage in business activities.
Disaster in
Confirming Safety in Emergency Situations
westernJapan
NormalWe have introduced a Group-wide safety confirmation system using a dedicatedtimeswebsite. In the event of a disaster, such as an earthquake with an intensity of five or
higher, emails will be sent to employees to check whether they are safe, and relevant
Normal operations structure
local information will be provided immediately on the website. The system allows forthe rapid collection and sharing of information.
Enhancing Core Logistics System BCP
As part of its risk management, Nichirei Logistics Group has been enhancing BCP support for its core logistics systemsince February 2018.
Assuming the possibility of damage to the data center, where operations are heavily concentrated, the group created adisaster recovery (DR) system that enables rapid resumption of business. In the event of a large-scale disaster, the group
can quickly resume operations through the use of two bases, each of which can switch from the system at its main site
to the DR site. Approximately one hour is needed from the activation of the system until an online restart is possible. The
system is designed to ensure that customer businesses and food distribution are not affected. The Nichirei Logistic Groupplans to implement advanced initiatives as a food logistics lifeline in order to contribute to the business continuity of ourbusiness partners.
97

Environment

Initiatives for Achieving a Sustainable Society

SocialGovernanceDirectors, Audit & Supervisory Board
Members and Executive Officers(As of June 22, 2021)

Back row, from left

Yuichi Takaku

Hideo Yokoi

Wataru Tanabe

Masahiko Takenaga

Kazuhiko Umezawa

Junji Kawasaki

Executive Officer

Executive Officer

Director,
Executive Officer

Director,
Executive Officer

Director,
Executive Officer

Director,
Executive Officer

Front row, from left

98

Mana Nabeshima

Kuniko Shoji

Mieko Wanibuchi

Kenya Okushi

Outside Director

Outside Director

Outside Director

Representative Director,
President

Nichirei Group Integrated Report 2021

Management Strategy
Value Creation Story
Financial Strategy
Business Strategy
Initiatives for Achievinga Sustainable Society

Tatsushi Kato

Yuhiko Saito

Kiyoshi Asahina

Muneaki Kiyota

Yutaka Karino

Kenji Suzuki

Audit & Supervisory
Board Member

Audit & Supervisory
Board Member

Outside Audit &Supervisory
Board Member

Outside Audit &Supervisory
Board Member

Outside Audit &Supervisory
Board Member

Executive Officer

Executive Officer

Kunio Otani

Takumi Taguchi

Shizuka Uzawa

Representative
Director, Chairman

Director,
Executive Officer

Outside Director
To prevent the spread of COVID-19, participants removed their masks only for the moment this photograph was taken.

Nichirei Group Integrated Report 2021

99

Data

Kazuhiko Yasuda

Initiatives for Achieving a Sustainable Society

Environment

Officer Career Summaries

SocialGovernance(As of June 22, 2021)

Directors
Kunio Otani

Kenya Okushi

Representative
Director, Chairman

Representative
Director, President

Number ofyears in office:3

Number ofyears in office:3

Number ofshares held:

27,038

Number ofshares held:

19,206

April 1980
Joined the Company
April 2005
Director, Managing Executive Officer, Nichirei Proserve Inc.
April 2008
General Manager of Strategic Planning, the Company
June 2010	Executive Officer; General Manager of Corporate Supervisor Division; General
Manager of Strategic Planning, the Company
April 2012
President, Nichirei Proserve Inc.
June 2012	Director, Executive Officer; in charge of Corporate Internal Audit, Corporate
Supervisor Division, General Affairs, Human Resources Strategy, Accounting &Tax, and Public Relations; General Manager of Strategic Planning, the Company
June 2013
Representative Director, President, the Company
June 2016
President, FINET, INC.
June 2017
Chairman, Japan Association of Refrigerated Warehouses
April 2019
Chairman, the Company (to the present)
June 2020
Outside Director, Japan Finance Corporation (to the present)
July 2020	Outside Audit & Supervisory Board Member, Fukoku Mutual Life Insurance
Company (to the present)
Significant concurrent positions outside the Company
Outside Director, Japan Finance Corporation
Outside Audit & Supervisory Board Member, Fukoku Mutual Life Insurance Company

Significant concurrent positions outside the Company
Chairman, Japan Frozen Food Association

Takumi Taguchi

Junji Kawasaki

Director,
Executive Officer

Director,
Executive Officer

Number ofyears in office:8

Number ofyears in office:5

Number ofshares held:

8,935

Number ofshares held:

6,135

April 1987
Joined the Company
April 2011
General Manager of Finance, the Company
April 2012
General Manager of Accounting & Tax, the Company
June 2012	Director, Executive Officer, Nichirei Proserve Inc. Executive Officer; in charge ofFinance & Investor Relations; General Manager of Accounting & Tax, the Company
June 2014	Director, Executive Officer; supervising Corporate Internal Audit, Strategic
Planning, Legal Affairs, Human Resources Strategy & General Affairs, Finance &Investor Relations, and Accounting & Tax; General Manager of Corporate
Supervisor Division; General Manager of Public Relations, the Company
April 2019	Director, Executive Officer; supervising Corporate Internal Audit, Business
Management, Strategic Planning, IT Planning, Legal Affairs, Human Resources
Strategy & General Affairs, Finance, Accounting & Tax and Group
Communication, the Company (to the present)

April 1987
Joined the Company
April 2013
General Manager of Quality Assurance Department, Nichirei Foods Inc.
April 2014	Executive Officer; General Manager of Quality Assurance Department, Nichirei
Foods Inc.
April 2017
General Manager of Technology Management, the Company
June 2017	Director, Executive Officer; supervising Quality Assurance; General Manager ofTechnology Management, the Company
April 2018	Director, Executive Officer; supervising Technology Management; General
Manager of Quality Assurance, the Company
April 2021	Director, Executive Officer; supervising Quality Assurance and Business
Innovation; General Manager of Technology Management, the Company (tothe present)

Kazuhiko Umezawa

Masahiko Takenaga

Director,
Executive Officer

Director,
Executive Officer

Number ofyears in office:4

Number ofyears in office:3

12,737

Number ofshares held:

14,275

Number ofshares held:

April 1988
Joined the Company
April 2008	Executive Officer; General Manager of Solution Development Department,
Logistics Planner Inc.
April 2012	Managing Executive Officer; General Manager of Management Division, Logistics
Network, Inc.
May 2014
President, Nichirei Logistics Tokai, Inc.
May 2016
President, Nichirei Logistics Kansai, Inc.
June 2017	Director, Managing Executive Officer; General Manager of Technology
Information Planning Department; General Manager of Operation Innovation
Promotion Department, Nichirei Logistics Group Inc.
April 2018
President, Nichirei Logistics Group Inc. (to the present)
June 2018
Director, Executive Officer, the Company (to the present)
Significant concurrent positions outside the Company
President, Nichirei Logistics Group Inc.

100

April 1988
Joined the Company
April 2011
General Manager of Business Coordination Division, Nichirei Foods Inc.
April 2013
General Manager of Strategic Planning, the Company
June 2014	Executive Officer; General Manager of Strategic Planning, the Company
June 2015	Director, Managing Executive Officer; supervising Brand Promoting Department,
Human Resources Strategy Department, Business Administration Department,
Business Promoting Department, Imported Products Procurement Strategy
Department, and International Business Division; General Manager of Strategic
Planning Department, Nichirei Foods Inc.
April 2017	President, Nichirei Foods Inc.
June 2017	Director, Executive Officer, the Company
April 2018	Director, Executive Officer; supervising Strategic Planning, the Company
April 2019
President, the Company (to the present)
May 2020	Chairman, Japan Frozen Food Association (to the present)

Nichirei Group Integrated Report 2021

April 1989	Joined the Company
April 2013	General Manager of Brand Promoting Department, Nichirei Foods Inc.
April 2015	Executive Officer; General Manager of Manufacturing Strategy Department, andGeneral Manager of Manufacturing Administration Department, Manufacturing
Division, Nichirei Foods Inc.
April 2016	Executive Officer; General Manager of Consumer Brand Division, Nichirei Foods Inc.
April 2017	Managing Executive Officer; General Manager of Consumer Brand Division,
Nichirei Foods Inc.
June 2018
Director, Managing Executive Officer, Nichirei Foods Inc.
April 2019
President, Nichirei Foods Inc. (to the present)
June 2019
Director, Executive Officer, the Company (to the present)
Significant concurrent positions outside the Company
President, Nichirei Foods Inc.

Shizuka Uzawa

Director,
Executive Officer

Outside Director

Number ofyears in office:New
appointment

Number ofyears in office:5—

Number ofshares held:

1,900

Number ofshares held:

Significant concurrent positions outside the Company
President, Nichirei Fresh Inc.

April
June
June
June

1969	Joined Nisshin Spinning Co., Ltd. (currently Nisshinbo Holdings Inc.)
2001	Director; Chief of Accounting and Finance Division, Nisshinbo Industries, Inc.
2004
Executive Director, Nisshinbo Industries, Inc.
2006	Director, Executive Managing Officer; Chief of General Affairs Division,
Nisshinbo Industries, Inc.
April
2007	Director, Senior Executive Managing Officer; Chief of Paper Products Division,
Nisshinbo Industries, Inc.
June
2009
President, Nisshinbo Holdings Inc.
June
2013
Chairman, Nisshinbo Holdings Inc.
October 2013
Outside Director, Japan Finance Corporation
March
2015
Outside Director, Sapporo Holdings Limited
June
2016
Outside Director, the Company (to the present)

Kuniko Shoji

Outside Director

Outside Director

Number ofyears in office:5

Number ofyears in office:3

Number ofshares held:

1,900

Number ofshares held:

1,100

Significant concurrent positions outside the Company
CEO & Chairman, GINZA TAILOR GROUP CO., LTD.
CEO & Chairman, GINZA TAILOR CO., LTD.
President, GGG Co., Ltd.

April
1977
Joined Mochida Pharmaceutical Co., Ltd.
July
1986	Joined Johnson & Johnson Medical K.K. (currently Johnson & Johnson K.K.)
September 2002	Joined Terumo Corporation; General Manager of Regulatory Affairs
Department, Terumo CorporationJune
2004	Executive Officer; General Manager of Regulatory Affairs Department,
Terumo CorporationJune
2010	Director, Senior Executive Officer; General Manager of Regulatory Affairs
Department; General Manager of Clinical Development Department,
Terumo Corporation
April
2017
Director, Corporate Advisor, Terumo Corporation
June
2018
Outside Director, the Company (to the present)		Outside Director, MEDIPAL HOLDINGS CORPORATION (to the present)
March
2019
Outside Director, DIC Corporation (to the present)
April2019	Professor, Kanagawa University of Human Services Graduate School,
School of Health Innovation (to the present)

Business Strategy

1995
General Manager, GINZA TAILOR CO., LTD.
2000
President, GINZA TAILOR CO., LTD.
2003	President, Warney Creative Japan Co., Ltd. (currently GGG Co., Ltd.) (tothe present)
November 2003	President, Gintei Buildings Co., Ltd. (currently GINZA TAILOR GROUP CO.,
LTD.)
June
2016
Outside Director, the Company (to the present)
September 2019
CEO & Chairman, GINZA TAILOR CO., LTD. (to the present)
September 2019
CEO & Chairman, GINZA TAILOR GROUP CO., LTD. (to the present)

Financial Strategy

Mieko Wanibuchi

April
April
June

Value Creation Story

April
1992
Joined the Company
September 2009
President, Nichirei Fresh Farm Inc.
April
2019	Executive Officer; General Manager of Strategic Planning, Nichirei Fresh Inc.
June
2020	Director, Executive Officer; General Manager of Strategic Planning, Nichirei
Fresh Inc.
April
2021
President, Nichirei Fresh Inc. (to the present)
June
2021
Director, Executive Officer, the Company (to the present)

Management Strategy

Wataru Tanabe

Initiatives for Achievinga Sustainable Society

Significant concurrent positions outside the Company
Outside Director, MEDIPAL HOLDINGS CORPORATION
Outside Director, DIC Corporation
Professor, Kanagawa University of Human Services Graduate School, School of Health Innovation

Mana Nabeshima
Outside Director

New
appointment

Number ofshares held:—

Joined Citibank, N.A., Tokyo Branch
Joined Goldman Sachs Japan Co., Ltd.
Joined DBS Bank Ltd.
Representative Director and CEO, DBS Securities (Japan) Co., Ltd.
Country Head of Japan, DBS Bank Ltd.
Executive Officer; Head of Sales, HiJoJo Partners Inc.
Vice Chairman, DIGITAL GRID Corporation (to the present)
Outside Director, the Company (to the present)

Data

August1991
October
2000
January
2015
August2016
September 2016
January
2020
July
2020
June
2021

Number ofyears in office:Nichirei Group Integrated Report 2021

101

Officer Career Summaries

Audit & Supervisory Board Members
Kazuhiko Yasuda

Tatsushi Kato

Audit & Supervisory Board
MemberAudit & Supervisory Board
MemberNumber ofyears in office:³

Number ofyears in office:New
appointment

Number ofshares held:

4,629

Number ofshares held:

—

April
April
April
April

1984
Joined the Company
2012
General Manager of Corporate Supervisor Division, the Company
2014
General Manager of Accounting & Tax, the Company
2018	General Manager of Corporate Social Responsibility Headquarters,
the Company
June 2018
Audit & Supervisory Board Member, the Company (to the present)

April
1987
Joined the Company
April2013	General Manager of Funabashi Plant, Manufacturing Division, Nichirei Foods Inc.
October 2013	General Manager of Funabashi Plant, General Manager of Funabashi No. 2
Plant, Manufacturing Division, Nichirei Foods Inc.
April
2015	Executive Officer; General Manager of Funabashi Plant, General Manager of
Funabashi No. 2 Plant, Manufacturing Division, Nichirei Foods Inc.
April
2016	Executive Officer; General Manager of Manufacturing Division, Nichirei Foods Inc.
April
2019	Managing Executive Officer; General Manager of Quality Assurance
Department, Nichirei Foods Inc.
April
2020	Managing Executive Officer; General Manager of Quality Assurance
Department, General Manager of Research and Development Department,
Nichirei Foods Inc.
April
2021	General Manager of Corporate Social Responsibility Headquarters,
the Company
June
2021
Audit & Supervisory Board Member, the Company (to the present)

Yuhiko Saito

Kiyoshi Asahina

Outside Audit &Supervisory Board
MemberOutside Audit &Supervisory Board
MemberNumber ofyears in office:2

Number ofyears in office:1

Number ofshares held:

700

Number ofshares held:

—

April
1983
Appointed Public Prosecutor
September 2012	Director-General of the Rehabilitation Bureau, Ministry of Justice
July
2014
Chief Prosecutor, Kyoto District Public Prosecutors Office
April
2015
Chief Prosecutor, Yokohama District Public Prosecutors Office
September 2016	Superintending Prosecutor, Takamatsu High Public Prosecutors Office
March
2017
Superintending Prosecutor, Hiroshima High Public Prosecutors Office
January
2018
Retired from office
March
2018
Registered as an attorney (Dojima Law Office) (to the present)June2019	Outside Audit & Supervisory Board Member, the Company (to the present)

April
May
May
January
July
July
April
April
June
June

Muneaki Kiyota
Outside Audit &Supervisory Board
MemberNumber ofyears in office:1

Number ofshares held:—

April 1981	Joined The Fuji Bank, Limited (currently Mizuho Bank, Ltd.)
June 2004	General Manager of Forex Department, Mizuho Corporate Bank, Ltd. (currently
Mizuho Bank, Ltd.)
April 2007
General Manager, Bangkok Branch, Mizuho Corporate Bank, Ltd.
April 2009	Executive Officer, Mizuho Securities Co., Ltd.; President, Mizuho Bank
(Switzerland) Ltd.
April 2010
Director, Mizuho Securities Co., Ltd.
June 2012	Audit & Supervisory Board Member & Managing Executive Officer, OKAYA
ELECTRIC INDUSTRIES CO., LTD.
June 2014	Director, Managing Executive Officer, OKAYA ELECTRIC INDUSTRIES CO., LTD.
April 2018	Director, Senior Managing Executive Officer, OKAYA ELECTRIC INDUSTRIESCO., LTD.
April 2020
Director, OKAYA ELECTRIC INDUSTRIES CO., LTD.
June 2020
Outside Audit & Supervisory Board Member, the Company (to the present)

102

Nichirei Group Integrated Report 2021

1978	Joined Ministry of Agriculture and Forestry (currently Ministry of Agriculture,
Forestry and Fisheries)
1994
Planning Manager, Vegetable Supply Stabilization Fund1997
Counselor, Embassy of Japan in the United Kingdom
2001
Counselor, Cabinet Secretariat (to Assistance Chief Cabinet Secretary)
2003	Director of Administration Division, Forest Policy Planning Department,
Forestry Agency
2004	Director-General, Cooperatives Inspection Department, Minister’s Secretariat
2008	Director-General, Kinki-Chugoku Regional Forest Office2010	Auditor, Fisheries Research Agency
2014	Advisor, International Business Division, Japan Association for International
Racing and Stud Book
2020
Outside Audit & Supervisory Board Member, the Company (to the present)

Yutaka Karino

Hideo Yokoi

Executive Officer
In charge of Group
Communication
General Manager, Human
Resources Strategy &General Affairs

Executive Officer
Representative Director,
President, Nichirei
Biosciences Inc.

April 1990
April 2018
June 2018
April 2021
April 2021

Joined the Company
Executive Officer, Nichirei Biosciences Inc.
Director, Executive Officer, Nichirei Biosciences Inc.
President, Nichirei Biosciences Inc. (to the present)
Executive Officer, the Company (to the present)

Yuichi Takaku

Executive Officer
General Manager ofBusiness Management andGeneral Manager ofFinance

Executive Officer
In charge of IT Strategy,
General Manager ofStrategic Planning

Financial Strategy

Kenji Suzuki

April 1994
Joined the Company
April 2018
General Manager of Strategic Planning, Nichirei Logistics Group Inc.
April 2021	Executive Officer; in charge of IT Strategy, General Manager of Strategic
Planning, the Company (to the present)

Business Strategy

April 1991
Joined the Company
April 2019
General Manager of Finance, the Company
April 2021	Executive Officer, General Manager of Business Management and General
Manager of Finance, the Company (to the present)

Value Creation Story

April 1988
Joined the Company
April 2011
General Manager, Human Resources, Nichirei Logistics Group Inc.
April 2014	General Manager, Human Resources Strategy & General Affairs, the Company
June 2017	Executive Officer, General Manager of Human Resources Strategy & General
Affairs, the Company
April 2021	Executive Officer; in charge of Group Communication, General Manager of
Human Resources Strategy & General Affairs, the Company (to the present)

Management Strategy

Executive Officers

Initiatives for Achievinga Sustainable Society
Data

Nichirei Group Integrated Report 2021

103

Data

Financial and Non-financial Highlights
Net Sales

EBITDA(Billions of yen)

600

539.7

568.0

580.1

584.9

(Billions of yen)

60

572.8

400

40

200

20

0

45.4

46.1

47.0

2017

2018

2019

49.4

52.6

0

2017

2018

2019

2020

2021

(FY)

2020

(FY)

2021

Net sales decreased 2% due to the impact of the COVID-19
pandemic. In processed foods, household-use and overseas
sales were strong. In the logistics business, XD businessrevenues grew.

EBITDA increased as the Nichirei Group covered increased
depreciation to secure growth in operating profit.

Operating Profit and Operating Profit/Net Sales

Profit Attributable to Owners of Parent■■ Operating profit

Operating profit/Net sales(Billions of yen)

(%)

10

40

30

29.3

29.9

29.5

5.4

5.3

5.1

20

31.0
5.3

32.9

(Billions of yen)

25

8

5.8

6

18.8

19.1

2017

2018

19.9

19.6

2019

2020

21.2

15

4
10

0

2017

2018

2019

2020

2021

2

5

0

0

(FY)

2021

（年度）(FY)In addition to continued good performance by logistics andstrong sales of household-use and overseas processed foods,

Profit has steadily increased due to profit growth incore businesses together with cost control and improved

strict management of Group-wide costs contributed to anincrease in operating profit.

operational efficiency.

ROE

Interest-bearing Debt and Equity Ratio■■ Interest-bearing debt(%)

Equity ratio(Billions of yen)

20

(%)

100

120

90

89.8

10

60

46.0

5

30

15

12.1

11.9

11.7

10.9

10.9

97.7

96.0

96.4

96.4

44.3

46.9

47.3

50.1

80
60
40

0

0

2017

2018

2019

2020

2021

(FY)

Due to steady profit, among other factors, ROE has continued
to meet the medium-term business plan target of 10% or higher.

104

20

Nichirei Group Integrated Report 2021

0

2017

2018

2019

2020

2021

Interest-bearing debt increased ¥71 million to ¥96.4 billion.
The equity ratio in FY2021 was 50.1%.

(FY)Total CO2 Emissions

Waste Discharged Outside Worksites and Recycling Rate

300

(Tons of CO2 per ton of production)(Thousands of tons)

269

260
228

226

225

241

50

223 232

0.75

0.49

0.46

0.44

45.2

46.3

■■ Recycling rate

99.5
45.4

98.7

99.4
47.9

47.1

40

200

0.52

99.6

99.7

60

1

280
228

■■ Waste discharged outside worksites

Emissions intensity

40

0.25

20

10
0

2018

2019

2020

0

2017

(FY)

2021

2018

2019

2020

2021

(FY)

We set a new goal of a 50% reduction by FY2031 (comparedwith FY2016). In FY2021, we conserved energy by introducing
energy-saving equipment and by improving efficiency. In
addition, we utilized Renewable Energy Certificates to expand
our use of renewable energy.

As a material matter for the Nichirei Group, we have set a KPI
for and are actively working to reduce the amount of and recycle
the food residue and waste generated by our business activities.

Number of Female Line Managers

Number of Resignations and Turnover Rate

150

120

79

150

93

88

(%)

5.0

200

140

120
90

Turnover rate

(Employees)

100

60

131
2.0

137
2.3

146

2.1

159

141

4.0
3.0

2.4

2.1

50

30

2.0
1.0

2017

2018

2019

2020

(FY)

2021

Business Strategy

00Financial Strategy■■ Number of resignations

Value Creation Story

0

2017

80
60

20

100

0

(%)

100

30

0.5

0.43

Management Strategy■■ Fixed power emission coefficient■■ Variable power emission coefficient2(Thousands of tons of CO2)

0

2017

2018

2019

2020

2021

(FY)

As a material matter for the Nichirei Group, we will continue toproactively work to increase the ratio of female line managers at

By continuously striving to create a good working environment,
proactively promote young human resources and improve

Nichirei Corporation to 30% by FY2031.

employee engagement, we have maintained a turnover rate well
below the industry average of 9.4%.** Source: Ministry of Health, Labour and Welfare, Summary Report of theSurvey on Employment Trends in 2018, Manufacturing turnover rate■■ Training and education time

General regular health checkup rate
(Participants)

60,00050,00040,000

1,699
1,379

General Regular Health Checkup Rate andStress Check Coverage■■ Number of participants(Hours)49,73045,4691,569
47,190

1,800

1,495
37,201

1,500

(%)

100

90

20,000600

10,000

300

80

0

75

2020

2021

89.2

(FY)

The Group Human Resources Committee is studying measures
to enhance the content and quality of training and education as
an investment in human resources. Due in part to the impact of
COVID-19, we offer online educational programs.

100.0

90.1

89.6

2019

2020

100.0

90.8

85

2017

2018

2021

Data

2019

88.3

Stress check coverage

100.0

95

900

2018

99.5

99.8

1,200

30,0000Initiatives for Achievinga Sustainable Society

Training and Education Time and Number of Participants(FY)

Under the Nichirei Group Health Declaration, we are striving for
health management based on the three pillars of healthmaintenance and improvement, mental health measures, andsafety and hygiene control. The general regular health checkup
rate has reached 100%.

Nichirei Group Integrated Report 2021

105

Data

Overview of Medium-term Business Plans
energy 2012

RISING 2015

Concept

Aim to achieve FY2013 targets by conducting business activities
based on employee (1) energy/vitality, (2) ability to act/execute and(3) (strong) efforts/initiatives

With the goal of achieving medium-term management vision
GROWTH 2016, increase the corporate value of the Nichirei Groupby realizing the sustainable growth targeted in the plan

PeriodApril 2010 to March 2013

April 2013 to March 2016

President

Toshiaki Murai

Kunio Otani

Achieve sustainable earnings growth by steadily pursuing businessstrategies and responding promptly to the operating environment.

Each operating company will, by displaying its unique capabilities andhelping to resolve social issues through business development, fulfill its “sixresponsibilities” and establish a foundation for sustainable growth responsive
to changes in the operating environment in Japan and overseas.

(1) B olster earnings capacity and achieve sustainable growth by effectively
allocating management resources(2) F acilitate the sustainable growth of the core operating companies byidentifying and capturing growth opportunities(3) O btain the trust of society by providing valuable food safety andreliability(4) S trengthen the source of the Group’s competitiveness by further
improving management quality(5) S trengthen the Group’s abilities to collect and analyze new technologies
to create new business models that will ensure sustainable growth(6) E xamine the possibility of acquiring treasury stock as part of a capital
policy(7) Redevelop the retirement benefit system(1) Bolster the earnings capacity of individual Group companies in Japanand overseas to achieve sustainable growth.
(2) Build a global quality assurance system.
(3) Allocate the Group’s management resources appropriately and continue
to implement a policy of providing appropriate returns to shareholders,
including the acquisition of treasury stock and a dividend increase.
(4) Upgrade corporate functionality in the holding company structure.
(5) Strengthen the strategy on technological innovation in response to
major changes in social and economic circumstances.

Achieved the plan targets for operating profit in the core processed foods
and logistics businesses; marine, meat and poultry products fell
substantially short

Made investments for sustainable growth and achieved Group targets fornet sales and operating profit

Basic Strategy

Main
Initiatives

Achievements

Processed Foods• Expanded sales of prepared frozen foods for the household-use and
HMR markets• Started full-scale operation of two factories for processed poultry
products in Thailand

Processed Foods• Strengthened the domestic in-house production system• Expanded business scale in the United States
Logistics• Started operation of large-scale refrigerated warehouses in the Tokyo andOsaka metropolitan areas

Logistics• Expanded earnings base by starting operation of Higashi-ogishima DC
and other sites• Increased contracts for XD outsourcing• FY2011(Processed Foods) GFPT Nichirei (Thailand) Co., Ltd. established, Surapon
Nichirei Foods Co., Ltd. Kabinburi Plant Building No. 2 expansion(Logistics) Fukuoka Higashihama DC, acquisition of Transports Godfroy
S.A.S. (France)

Main
Investments• FY2012(Logistics) Higashi-ogishima DC, Kagoshima So DC• FY2013(Processed Foods) Acquisition of InnovAsian Cuisine Enterprises Inc. (USA)• Great East Japan Earthquake and subsequent nuclear power plant
accident• Appreciation of the yen as European financial instability becomeswidespread

Operating
Environment
Stock Price/Currency
Exchange Rate(at end of plan period)• FY2014(Processed Foods) Newly established Funabashi No. 2 Plant(Logistics) Higashi-ogishima DC Phase 2 Building• FY2015(Processed Foods) Expanded cooked rice products production line
(Logistics) Sakishima DC, Tokachi DC• FY2016(Logistics) Funabashi DC (rebuilding)• Focus on food safety and security resulting from factors including casesof pesticide problems and meat sold after its sell-by date
• Consumption tax rate hike to 8% as Abenomics starts, and the yen
depreciates

Nikkei Stock Average: ¥12,397.91
Dollar/Yen exchange rate: ¥94.19

Nikkei Stock Average: ¥16,758.67
Dollar/Yen Exchange Rate: ¥112.56

Figures

Final year results

Final year results

Net Sales¥470.1 billion¥535.3 billion¥37.5 billion¥75.5 billion¥17.9 billion¥21.5 billion(Overseas Sales)
Operating Profit

3.8%

4.0%

¥17.2 billion¥21.4 billion

Profit¥9.8 billion¥13.4 billion

EBITDA¥32.2 billion¥38.0 billion(Operating Margin)
Ordinary Profit

ROE

8.2%

9.1%

EPS

¥33.40¥94.30¥47.5 billion¥64.4 billion

Total 3-Year Capital
Expenditures
Incl. Processed foods¥15.5 billion¥24.7 billion

Logistics¥27.8 billion¥34.4 billion

106

Nichirei Group Integrated Report 2021

WeWill 2021

Steadily strengthen the foundation of the Group and steadily
implement structural reforms to generate the potential thatenables sustainable growth

Aim to realize the long-term management goals toward 2030 with astrong intention to create a distinctive future

April 2016 to March 2019

April 2019 to March 2022

Kunio Otani

Kenya Okushi

Aim for profit growth from strengthening the earnings base and improving
asset efficiency in domestic businesses and for accelerated expansion ofscale in the overseas business.

Through planned investments significantly higher than the previous medium-term businessplan, we aim to further accelerate sustainable profit growth and create new value that
supports good eating habits and health.

Management Strategy

POWER UP 2018

Focus on business innovation and new business development for mediumto long-term growth.

Financial Strategy• Maintain return on equity (ROE) of at least 8%.
• Provide a continual, stable dividend with a target DOE of 2.5%.
• Consider share buy-backs of around 20 million shares (approx. 7% of
total issued shares)

Financial Strategy• Maintain return on equity (ROE) of 10% or higher.
• Provide a dividend with a target DOE of 3.0%

Financial Strategy

Achieved Group targets for net sales and operating profit by improving
profitability of processed foods and stably expanding logistics

General Strategy(1) Raise profitability in Japan by strengthening the management foundation andtransforming the business structure.
(2) Accelerate the expansion of scale in overseas operations.
(3) Reinforce efforts to develop new businesses, conduct R&D, and reform businesses inorder to ensure longer-term growth.
(4) Help communities deal with issues they face and make them more sustainable throughour businesses.
(5) Focus more intently on work style reform and utilization of diverse personnel.

Value Creation Story

General Strategy(1) Ensure sustainable earnings growth and raise capital efficiency.
(2) Pursue continued expansion in scale for overseas business.
(3) Further enhance the Nichirei Group’s capabilities for quality assurance.
(4) Continue to strengthen corporate governance and other ESG-related
efforts.
(5) Focus more intently on utilizing diverse personnel.

Note: See pages 42–43 for the progress and outlook for Medium-term Business Plan
WeWill 2021.

Processed Foods• Improved profitability in Japan on expanded sales of mainstay products
Logistics• Expanded cargo pickups mainly in metropolitan areas and improved
balance of transport income
Meat and Poultry• Increased earnings

Business Strategy• FY2018(Logistics) Heiwajima DC (rental)(Marine Products) Trans Pacific Seafood Co., LTD. (Vietnam) established• FY2020(Logistics) Naha shinkou DC• FY2021(Processed Foods) GFPT Nichirei (Thailand) Co., Ltd. second plant opened(Logistics) Nagoya minato DC, Honmoku DC• Rising nationalism in the United States and elsewhere, and slow progressof negotiations for the United Kingdom’s departure from the EU• The Paris Agreement and TPP come into effect• Series of natural disasters in Japan• Consumption tax rate hike to 10%• The global COVID-19 pandemic drastically changes social conditions. The United
Kingdom leaves the EU.
• Tokyo Olympics and Paralympics postponed for one year

Initiatives for Achievinga Sustainable Society• FY2019(Bioscience) Global Innovation Center established

Nikkei Stock Average: ¥21,205.81
Yen/Dollar Exchange Rate: ¥110.84
Final year forecast

Plan targets¥580.1 billion¥600.0 billion¥657.0 billion¥79.2 billion¥77.3 billion¥102.3 billion¥29.5 billion¥35.0 billion¥35.0 billion

5.1%

5.8%

5.3%

¥29.9 billion¥35.5 billion¥35.2 billion¥19.9 billion¥23.0 billion¥22.0 billion¥47.0 billion¥57.2 billion¥57.6 billion

11.7%

10％ or higher

10％ or higher¥149.65¥172.59¥164.90 or more

¥63.0 billion¥108.4 billion¥100.8 billion¥21.3 billion¥40.4 billion¥42.3 billion¥29.6 billion¥56.8 billion¥47.1 billion

Nichirei Group Integrated Report 2021

Data

Final year results

107

Data

11-Year Financial Highlights

Nichirei Corporation and Consolidated
Subsidiaries for the Years Ended March 31

energy 20122011/3

2012/3

2013/3

2014/3437,808

454,931

470,126

511,189

350,442

368,012378,652

417,928

70,68570,74173,541

77,472

Operating profit

16,681

16,177

17,932

15,789Non-operating income:

1,939

2,025

1,880

2,113

Interest and dividend income

488

622

575

1,060

	Share of profit of entities accounted forusing equity method

164

49

224

—

2,505

2,952

2,609

3,459

1,371

1,445

1,438

1,295

—

—

—

795

Ordinary profit

16,115

15,25017,202

14,443Extraordinary income

5,123

1,308

1,690

2,347

12,378

2,333

5,291

1,432

8,860

14,225

13,601

15,357

4,772

6,406

5,489

5,480

(44)

85

1,712

(978)

Profit (loss) attributable to owners of parent

4,044

7,904

9,823

8,898

Depreciation and amortization

14,158

14,97814,302

14,475

10,441

11,177

10,522

10,74822,11012,24813,171

24,041

18,076

9,400

10,724

21,209

1,806

1,697

1,817

1,607

Sales and Income:Net sales*

Cost of sales
Selling, general and administrative expenses

Non-operating expenses:**

Interest expenses	Share of loss of entities accounted forusing equity method

Extraordinary losses*

Profit before income taxes
Income taxes*

Profit (loss) attributable to non-controlling interests(Excluding leased assets)
Capital expenditures(Excluding leased assets)
Research & development expenditures

Share Information:
Profit per share

*

13.08

26.35

33.40

31.12

Dividends per share

*

9

9

10

10

69%

34%

30%

32%

Payout ratio
Notes:

1. Figures in the consolidated statements of income are based on the Securities Report and presented in million-yen units, with units less than one million yen rounded down.
However, figures for items marked with an asterisk “*” have been fractionally adjusted for convenience purposes.
2. Due to segment changes in FY2001 and FY2004, as well as changes in common cost allocation standards in FY2003 and FY2006, it is difficult to accurately follow the profit levelsof each business in chronological order.
3. From FY2016, the accounting policy regarding standards for recording sales in the processed foods business was changed (the portion that had previously been recorded as
promotional expenses has been excluded from net sales). Accordingly, the FY2015 figure has been retroactively changed to reflect the change in the accounting policy standards.
4. From FY2017, profit per share (yen) and dividends per share (yen) are shown as numerical values after the reverse stock split implemented on October 1, 2016.

108

Nichirei Group Integrated Report 2021

2015/3

POWER UP 20182016/32017/3

2018/3

Management Strategy

RISING 2015

WeWill 2021
2019/32020/32021/3(Millions of yen)

580,141

584,858

572,757

446,180454,265448,516

475,194

486,926

485,784

473,954

56,37659,501

61,831

62,94063,704

68,03865,853

17,406

21,58329,30929,89729,511

31,03532,949

1,993

1,704

1,433

2,102

1,753

1,891

1,798

616

664

716

817

871

896

880

140

131

278

715

399

387

376

2,498

1,893

1,637

1,350

1,399

1,150

1,215

1,138

1,053

954

898

870

791

709

—

—

—

—

—

—

—

16,902

21,394

29,10530,65029,864

31,77733,532

137

220

468

102

1,085

505

870

1,167

1,014

1,756

1,515

1,410

2,489

2,799

15,871

20,60027,81829,23729,54029,792

31,603

4,850

5,933

7,322

8,601

8,773

9,008

8,954

(1,504)(1,195)(1,744)(1,538)(822)(1,174)(1,437)

9,516

13,471

18,751

19,097

19,943

19,60921,212

15,621

16,455

16,057

16,155

17,481

18,355

19,66911,871

12,65812,347

12,543

13,91014,69015,894

24,171

16,175

13,887

24,952

24,132

27,287

37,776

19,75013,216

10,25322,312

21,32024,86433,851

1,730

1,600

1,559

1,986

2,359

2,486

2,403

33.29

47.15

135.11

142.23149.65147.16159.19

10

12

28

30

32

42

50

30%

26%

21%

21%

21%

29%

31%

Initiatives for Achievinga Sustainable Society

568,032

Business Strategy

539,657

Financial Strategy

535,351

Value Creation Story

519,963

Data

Nichirei Group Integrated Report 2021

109

Data

Consolidated Balance Sheets (Unaudited)
Consolidated Balance Sheets (Unaudited)

Nichirei Corporation and Consolidated Subsidiaries
As of March 31, 2020 and 2021

Thousands of
U.S. dollars(Note 1)
2021

Millions of yen
AssetsCurrent assets:
Cash and deposits
Notes and accounts receivable - trade
Less allowance for doubtful accounts
Inventories
Other current assets
Total current assets

2021

2020
¥

Fixed assets:
Property, plant and equipment (Note 6):
Buildings and structures
Machinery and equipment
Land
Leased assets
Construction in progress

25,93382,269(131)
47,93414,303
170,308¥

28,93381,749(109)
47,867
11,131
169,572$

261,321738,346(987)
432,326
100,536
1,531,544

Less accumulated depreciation
Property, plant and equipment, net

252,672
118,098
36,00737,3234,534
448,636(285,402)
163,233

259,690
128,081
38,68337,1993,716
467,371(293,409)
173,962

2,345,471
1,156,805
349,378
335,978
33,5694,221,205(2,650,015)
1,571,189

Investments and other assets:
Investment securities (Note 5)
Investment in affiliates
Net defined benefit asset
Deferred tax assets (Note 8)
OtherLess allowance for doubtful accounts
Total investments and other assets
Total fixed assets

28,904
7,246
57
1,912
18,609(268)
56,462
219,696

33,663
7,244
52
2,260
19,208(245)
62,184
236,146

304,038
65,426474
20,420173,489(2,213)561,637
2,132,826

Total assets¥

390,004¥

405,719$

3,664,370

The accompanying notes are integral parts of these statements.

1
110

Nichirei Group Integrated Report 2021

Management Strategy

Consolidated Balance Sheets (Unaudited) (Continued)
Thousands of
U.S. dollars(Note 1)
2021

Millions of yen
Liabilities and net assets
¥

¥

6,948

$

62,759－4,797
10,00028,0733,572
5,911
35,483238
13,481
108,506

43,33290,317
253,551
32,26253,388
320,476
2,154
121,762
980,006

30,00033,42030,00029,010270,953
262,020175
2,014
12,076
2,830
3,935
5,742
90,196
198,615131
1,996
12,093
4,265
4,037
5,251
86,786
195,293

1,188
18,029109,227
38,521
36,46747,432783,840
1,763,846

30,3595,750
156,953(17,642)
175,42130,418
5,795
172,436(17,648)
191,002274,738
52,3401,557,408(159,395)
1,725,091

9,016
802
(736)
9,082
6,884
191,388

12,344
1,639(1,660)12,323
7,100
210,426

111,491
14,809(14,996)111,304
64,1281,900,524

Business Strategy－

Financial Strategy

4,292
2,000
956
10,00028,4603,605
5,299
34,893228
18,683
108,419

Value Creation Story

Current liabilities:
Short-term loans
Commercial paper
Current portion of long-term debt
Current portion of bonds
Accounts payable
Lease obligations
Income taxes payable
Accrued expenses
Provision for directors’ bonuses
Other current liabilities
Total current liabilities
Long-term liabilities:
Bonds
Long-term debt
Provision for directors’ and statutory
auditors’ retirement benefits
Net defined benefit liability
Lease obligations
Deferred tax liabilities (Note 8)
Asset retirement obligations
Other
Total long-term liabilities
Total liabilities

2021

2020

Net assets:
Shareholders’ equity (Note 7):
Common stock, with no par value

Total liabilities and net assets¥

390,004¥

405,719$

Data

Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income:Net unrealized holding gain on availablefor-sale securities
Net deferred gain on hedges
Foreign currency translation adjustments
Total accumulated other comprehensive income
Non-controlling interests
Total net assets

Initiatives for Achievinga Sustainable Society

Authorized- 360,000,000 shares for 2020 and 2021
Issued and outstanding - 139,965,587 sharesfor 2020 and 140,003,877 shares for 2021

3,664,370

The accompanying notes are integral parts of these statements.
Nichirei Group Integrated Report 2021

2

111

Data

Consolidated Statements of Income (Unaudited)
Consolidated Statements of Income (Unaudited)
Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2020 and 2021

2021

Thousands of
U.S. dollars(Note 1)
2021

572,757$

Millions of yen
2020
Net sales¥
Operating costs and expenses:
Cost of sales
Selling, general and administrative expenses¥

584,858

5,173,030

485,784
68,038473,954
65,8534,280,659
594,775

553,822
31,035539,808
32,9494,875,435
297,594

896(791)(1,348)(1,243)29,792880(709)(1,517)(1,345)31,603

7,955(6,404)(13,705)(12,154)285,440

ProfitProfit attributable to non-controlling interests

9,566
(557)
9,008
20,784
1,174

Profit attributable to owners of parent

9,684
(730)
8,954
22,6491,437

87,471(6,596)80,874
204,565
12,981

19,609Operating profit
Other income (expenses):
Interest and dividend income
Interest expense
Other – net
Profit before income taxes
Income taxes (Note 8):
Current
Deferred¥¥

21,212$

U.S. dollars(Note 1)
2021

Yen
Amounts per share (Note 9):
Net assets
Profit:Basic
Diluted

2021

2020
¥

1,384.90
147.16－¥

1,525.76

191,584$

13.780159.19－

1.438－

The accompanying notes are integral parts of these statements.

3
112

Nichirei Group Integrated Report 2021

Data

Consolidated Statement of Comprehensive
Income (Unaudited)
Consolidated Statement of Comprehensive Income (Unaudited)

Millions of yen
2021

2020

¥

¥

20,784¥

22,649$204,565(4,978)
151
(10)

3,319
837
(973)

29,984
7,567(8,791)

154(4,683)
16,100(224)
2,959
25,609(2,030)26,729231,295

14,6281,471¥¥

24,452
1,156$$

Financial Strategy

Total comprehensive income attributable to:
Owners of parent
Non-controlling interests¥

Thousands of
U.S. dollars(Note 1)
2021

Value Creation Story

ProfitOther comprehensive income:Net unrealized holding gain (loss) on
available-for-sale securities
Net deferred gain (loss) on hedges
Foreign currency translation adjustments
Share of other comprehensive income(loss) of affiliates accounted for by theequity method
Total other comprehensive income (loss)
Total comprehensive income

Management Strategy

Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2020 and 2021

220,853
10,441

The accompanying notes are integral parts of these statements.
Business Strategy
Initiatives for Achievinga Sustainable Society
Data

4
Nichirei Group Integrated Report 2021

113

Data

Consolidated Statements of Changes in
Net
Assets (Unaudited)
Consolidated Statements of Changes in Net Assets (Unaudited)
Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2020 and 2021

Millions of yen
Shareholders’ equity
Common stock¥ 30,307

Net assets at April 1, 2019
Changes of items during the period
Issuance of new shares
Dividends from surplus
Profit attributable to owners of parent
Change in ownership interest of parent due totransactions with non-controlling interests
Acquisition of treasury stock
Disposal of treasury stock
Net changes of items other thanshareholders’ equity
Total changes of items during the period
Net assets at March 31, 2020
Changes of items during the period
Issuance of new shares
Dividends from surplus
Profit attributable to owners of parent
Capital increase of consolidated subsidiaries
Acquisition of treasury stock
Disposal of treasury stock
Net changes of items other thanshareholders’ equity
Total changes of items during the period
Net assets at March 31, 2021

Retainedearnings

Capital surplus

¥

51

7,617

¥ 142,274

51

Treasury stock¥ (17,443)

103(4,930)19,609(199)
0(1,918)
(199)
0

(199)
¥ (17,642)

12,664¥ 175,421

(7)
0

119
(5,729)21,212
(14)
(7)
0

(6)
¥ (17,648)

15,580¥ 191,002

0

¥

59

(1,867)5,750

14,679¥ 156,953

59(5,729)21,212(14)
059¥ 30,418

¥

44
5,795

¥ 162,756(4,930)19,609(1,918)51¥ 30,359

Total
shareholders’equity15,482¥ 172,436

Millions of yen
Accumulated other comprehensive income
Net unrealized
holding gain on
available-for-salesecurities

Net assets at April 1, 2019
Changes of items during the period
Issuance of new shares
Dividends from surplus
Profit attributable to owners of parent
Change in ownership interest of parent due totransactions with non-controlling interests
Acquisition of treasury stock
Disposal of treasury stock
Net changes of items other thanshareholders’ equity
Total changes of items during the period
Net assets at March 31, 2020
Changes of items during the period
Issuance of new shares
Dividends from surplus
Profit attributable to owners of parent
Capital increase of consolidated subsidiaries
Acquisition of treasury stock
Disposal of treasury stock
Net changes of items other thanshareholders’ equity
Total changes of items during the period
Net assets at March 31, 2021

Net deferredgain on hedges¥ 13,997¥

661

Foreign currencytranslation
adjustments

¥

(594)

Total
accumulated
othercomprehensive
income¥ 14,063

Noncontrollinginterests

Total net
assets¥¥ 183,805

6,985

103
(4,930)19,609(1,918)(199)
0(4,980)(4,980)¥ 9,016

¥

141
141
802

¥

(141)
(141)
(736)

(4,980)(4,980)¥ 9,082

¥

(101)
(101)
6,884

(5,081)
7,582¥ 191,388
119(5,729)21,212
(14)
(7)
0

¥

3,327
3,327
12,344

¥

836
836
1,639

¥

(923)
(923)
(1,660)

3,240
3,240
¥ 12,323

¥

216
216
7,100

3,456
19,037¥ 210,426

The accompanying notes are integral parts of these statements.
5
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Nichirei Group Integrated Report 2021

Management Strategy

Consolidated Statements of Changes in Net Assets (Unaudited) (Continued)
Thousands of U.S. dollars (Note 1)
Shareholders’ equity
Capital surplus

Retainedearnings

Treasury stock$ 274,199$ 51,935$ 1,417,572$ (159,339)$ 1,584,367

538

538

(63)
7

1,077
(51,748)
191,584
(134)
(63)
8

(55)
$ (159,395)

140,724$ 1,725,091(51,748)
191,584

(134)
0
538
$ 274,738

405$ 52,340

139,836$ 1,557,408

Value Creation Story

Net assets at April 1, 2020
Changes of items during the period
Issuance of new shares
Dividends from surplus
Profit attributable to owners of parent
Capital increase of consolidated subsidiaries
Acquisition of treasury stock
Disposal of treasury stock
Net changes of items other thanshareholders’ equity
Total changes of items during the period
Net assets at March 31, 2021

Total
shareholders’equityCommon stock

Net deferredgain on hedges

Foreign currencytranslation
adjustments$ 81,438$ 7,250$ (6,654)

Total
accumulated
othercomprehensive
income$ 82,034

Noncontrollinginterests

Total net
assets$ 62,177$ 1,728,579
1,077(51,748)
191,584
(134)
(63)
8

30,05330,053$ 111,491

7,558
7,558
$ 14,809(8,342)(8,342)$ (14,996)

29,26929,269$ 111,304

1,950
1,950
$ 64,128

Business Strategy

Net assets at April 1, 2020
Changes of items during the period
Issuance of new shares
Dividends from surplus
Profit attributable to owners of parent
Capital increase of consolidated subsidiaries
Acquisition of treasury stock
Disposal of treasury stock
Net changes of items other thanshareholders’ equity
Total changes of items during the period
Net assets at March 31, 2021

Net unrealized
holding gain on
available-for-salesecurities

Financial Strategy

Thousands of U.S. dollars (Note 1)
Accumulated other comprehensive income

31,219171,944$ 1,900,524

The accompanying notes are integral parts of these statements.
Initiatives for Achievinga Sustainable Society
Data

6

Nichirei Group Integrated Report 2021

115

Data

Consolidated Statements of Cash Flows(Unaudited)

Consolidated Statements of Cash Flows (Unaudited)
Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2020 and 2021

Millions of yen
2021

2020
Cash flows from operating activities:

Thousands of
U.S. dollars(Note 1)
2021

Profit before income taxes
Depreciation and amortization
Impairment loss on fixed assets
Increase/(decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expense
Equity in earnings of affiliates
Gain on sales of property, plant and equipment
Loss on disposal of property, plant and equipment
Gain on sales of investment securities(Increase)/decrease in notes and accounts receivable-trade(Increase)/decrease in inventories
Increase/(decrease) in notes and accounts payable
Compensation for expropriation
Other, net
SubtotalInterest and dividends received
Proceeds from compensation for expropriation
Interest paid
Income taxes paid¥

29,792
18,355
481
4
(896)
791
(387)
(58)
1,628
(423)
4,750
(2,098)635－
2,833
55,408
1,063
－
(798)
(16,232)¥

31,603
19,669
1,273
(17)
(880)
709
(376)
(42)
1,380
(144)
531
(477)
(234)
(565)
(4,470)47,958
1,190
565
(712)
(3,547)$285,440
177,647
11,501(156)(7,955)
6,404(3,404)(380)
12,469(1,304)4,800(4,310)(2,113)(5,108)(40,378)
433,149
10,7485,108(6,437)(32,041)

Net cash provided by/(used in) operating activities¥

39,441¥45,453$

410,528

The accompanying notes are integral parts of these statements.

7
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Nichirei Group Integrated Report 2021

Management Strategy

Consolidated Statements of Cash Flows (Unaudited) (Continued)
Millions of yen
2021

2020
Cash flows from investing activities:¥¥(28,529)
1,623(2,124)
(392)
257

$

(257,676)
14,660(19,191)(3,544)
2,328

(27)

(249)

(24)
(1,235)(24,300)－(3,019)(32,213)－(27,269)(290,941)(2,818)－10,000(5,200)－－(3,782)(18)(4,923)2,456(2,000)
409
(955)
9,951
(10,000)(3,886)(7)(5,722)

22,182(18,063)
3,694(8,632)
89,876(90,317)(35,099)(63)(51,683)

(803)

(955)

(8,627)(2,680)0(10,225)－
0(10,709)－8(96,725)

Effect of exchange rate changes on cash andcash equivalents
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year

(148)
4,765
20,66845
2,577
25,434415
23,276
229,716

Cash and cash equivalents at the end of the year¥

25,434¥28,011$

Initiatives for Achievinga Sustainable Society

Net increase/(decrease) in short-term bank loans
Net increase/(decrease) in commercial paper
Proceeds from long-term debt
Repayment of long-term debt
Proceeds from issuance of bonds
Redemption of bonds
Repayments of lease obligations
Purchase of treasury stock
Dividends paid
Cash dividends paid to non-controlling interests ofconsolidated subsidiaries
Purchase of shares of subsidiaries not resulting in change
in scope of consolidation
Other, net
Net cash provided by/(used in) financing activities

Business Strategy－

Financial Strategy

Cash flows from financing activities:(20,369)
161(1,336)(2,204)
707

Value Creation Story

Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of shares of subsidiaries resulting in change
in scope of consolidation
Payments for sale of shares of subsidiaries
resulting in change in scope of consolidation
Other, net
Net cash provided by/(used in) investing activities

Thousands of
U.S. dollars(Note 1)
2021

252,992

The accompanying notes are integral parts of these statements.

Data

Nichirei Group Integrated Report 2021

8

117

Data

Notes to Consolidated Financial Statements(Unaudited)

Notes to Consolidated Financial Statements (Unaudited)
Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2020 and 2021

Note 1: Basis of Presentation
The accompanying consolidated financial statements of Nichirei Corporation (the “Company”) and its
consolidated subsidiaries (together, the “Group”) are prepared on the basis of accounting principles generally
accepted in Japan, which are different in certain respects as to application and disclosure requirements ofInternational Financial Reporting Standards and are compiled from the consolidated financial statements
prepared by the Company as required by the Financial Instruments and Exchange Law of Japan.
Certain reclassifications have been made to present the accompanying consolidated financial statements
in a format which is familiar to readers outside Japan.
Certain amounts in the prior year’s financial statements have been reclassified to conform to the current
year’s presentation.
As permitted by the Financial Instruments and Exchange Law of Japan, amounts of less than one million
yen have been omitted. As a result, the totals in yen shown in the accompanying consolidated financial
statements do not necessarily agree with the sums of the individual amounts.
For the convenience of the reader, the accompanying consolidated financial statements have beenpresented in U.S. dollars by translating Japanese yen amounts at ¥110.72 = US$1.00, the exchange rate
prevailing on March 31, 2021.
Due to significance, only selected notes are disclosed in the consolidated financial statements. The
other notes which are not selected are disclosed on EDINET.

Note 2: Accounting Standards Issued But Not Yet Effective(1) Accounting Standard and Implementation Guidance on Revenue Recognition“Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29)“Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No. 30)“Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ GuidanceNo. 19)(a) Overview
This is a comprehensive accounting standard addressing revenue recognition. Specifically, theaccounting standard establishes the five-step model that will apply to revenue from contracts withcustomers.
(b) Scheduled date of adoption
The Company expects to adopt the accounting standard and implementation guidance from the
beginning of the fiscal year ending March 31, 2022.
(c) Impact of adoption of accounting standard and implementation guidance
The Company is currently evaluating the effect of the adoption of this accounting standard andimplementation guidance on its consolidated financial statements.
(2) Accounting Standard for Fair Value Measurement and Related Implementation Guidance“Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30)“Accounting Standard for Measurement of Inventories” (ASBJ Statement No. 9)“Accounting Standard for Financial Instruments” (ASBJ Statement No. 10)“Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No.
31)“Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ GuidanceNo. 19)(a) Overview
The ASBJ has developed “Accounting Standard for Fair Value Measurement” and “Implementation
Guidance on Accounting Standard for Fair Value Measurement” (hereinafter collectively, the “Fair
Value Measurement Standard”), which provide guidance for fair value measurement in order toimprove comparability with internationally recognized accounting standards.
118

Nichirei Group Integrated Report 2021

9

Notes to Consolidated Financial Statements (Unaudited)
Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2020 and 2021

Management Strategy

The Fair Value Measurement Standard is applied with respect to the fair value of the following
items;•Financial instruments defined in “Accounting Standard for Financial Instruments”•Inventories held for trading purposes defined in “Accounting Standard for Measurement of
Inventories”“Implementation Guidance on Disclosures about Fair Value of Financial Instruments” has beenrevised requiring disclosure of financial instruments broken down by level in the fair value hierarchy.

Value Creation Story(b) Scheduled date of adoption
The Company expects to adopt the accounting standards and related implementation guidance fromthe beginning of the fiscal year ending March 31, 2022.
(c) Impact of adoption of revised accounting standard and related implementation guidance
The Company is currently evaluating the effect of the adoption of the accounting standards andrelated implementation guidance on its consolidated financial statements.

Note 3: Significant Accounting Estimates

Financial Strategy

The Company applies “Accounting Standard for Disclosure of Accounting Estimates” (ASBJ Statement No.
31) from the end of the fiscal year ended March 31, 2021. The notes for the previous fiscal year are notpresented in accordance with the transitional treatment set forth in a provision of paragraph 11 of theaccounting standard.
Under the accounting standard, item whose amount is recorded in the consolidated financial statements forthe current fiscal year based on accounting estimates, and which would have a significant impact on the
consolidated financial statements for the following fiscal year, should be disclosed.
There is no item disclosed as significant accounting estimate as of March 31, 2021.

Note 4: Additional information~ Accounting estimates for the effect of COVID-19 spread
Business Strategy

Regarding the effect of the COVID-19, it is still difficult to predict the future such as how it would spreadfrom now on or when it would be contained, etc. The Group implemented accounting estimates based on
the assumptions that it will be curbed and turn toward recovery thorough the fiscal year 2022 along withthe vaccination progress, etc.

Note 5: Securities

Unrealized gain¥

12,681¥

17,361$

Initiatives for Achievinga Sustainable Society(1) Acquisition costs, carrying value and unrealized gain on available-for-sale securities as of March 31,
2020 and 2021:
Thousands ofMillions of yen
U.S. dollars
2020
2021
2021
Equity securities:
Acquisition costs¥
12,533¥
12,451$
112,457
Carrying value
25,21529,812
269,263
156,805

Data

Non-listed equity securities amounting to ¥3,689 million and ¥3,850 million ($34,775 thousand) as ofMarch 31, 2020 and 2021, respectively, are not included in the above table because they are nottraded on the market and it is very difficult to determine their fair market value as of March 31, 2020
and 2021.

10

Nichirei Group Integrated Report 2021

119

Notes to Consolidated Financial Statements (Unaudited)
Nichirei Corporation and Consolidated Subsidiaries

Notes to Consolidated Financial
Statements
For the years
ended March(Unaudited)31, 2020 and 2021

(2) Sales of available-for-sale securities for the years ended March 31, 2020 and 2021:
Millions of yen
Proceeds from sales
Gains on sales
Losses on sales

¥

2020
708
423

¥

－

2021
258
144
(0)

Thousands of
U.S. dollars
2021
2,331
$
1,305
(1)

(3) Impairment loss of securities for the years ended March 31, 2020 and 2021:

Thousands of
U.S. dollars
2021

Millions of yen
2021

2020
Available-for-sale securities:
Stocks with market value
Stocks without market value
Total

¥
¥

－
－
－

¥
¥

－
10
10

$

－
93
93

$

Note 6: Investments and Rental Properties
The Company and part of its subsidiaries own buildings and land for lease in Tokyo and other areas.
Net rent income, gain on sales and impairment losses on the property related to the investments andrental properties were ¥2,119 million, ¥34 million and ¥200 million, respectively, for the year ended March
31, 2020.
Net rent income on the property related to the investments and rental properties were ¥2,033 million($18,368 thousand) for the year ended March 31, 2021.
Gross rent revenue and expense are included in net sales and cost of sales, respectively, on the
consolidated statements of income. Gain on sales of the property is included in other income on the
consolidated statements of income.
Carrying value on the consolidated balance sheet, increase or decrease during the year, as well as market
value of the investments and rental properties as of March 31, 2020 and 2021:
Thousands ofMillions of yen
U.S. dollars
2020
2021
2021
Carrying value as of April 1
Net increase (decrease)

¥

9,844
(519)

¥

9,324
30

$

84,215273

Carrying value as of March 31

¥

9,324

¥

9,354

$

84,488Market value as of March 31¥

43,934¥47,065$425,084

1.
2.
3.
4.

Carrying value on the consolidated balance sheets is calculated as acquisition costs deducting
accumulated depreciation and cumulative impairment losses.
For the year ended March 31, 2020, major increase represents capital expenditures of ¥251 million.
Major decrease represents depreciation of ¥512 million and impairment losses of ¥200 million.
For the year ended March 31, 2021, major increase represents capital expenditures of ¥786 million($7,104 thousand). Major decrease represents depreciation of ¥510 million ($4,614 thousand) andchange in the use of property of ¥169 million ($1,528 thousand).
Market value of major assets is based on appraisals obtained from outside real estate appraisers. The
market value of other relatively immaterial assets is based on certain valuation and other indicators
properly reflected by market prices.

11

120

Nichirei Group Integrated Report 2021

Notes to Consolidated Financial Statements (Unaudited)
Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2020 and 2021

Management Strategy

Note 7: Changes in Net Assets(1) Types and numbers of outstanding shares and treasury stock(a) For the year ended March 31, 2020
As of April 1,
2019Type of stock

Decreases

139,925,532

40,055－

139,965,587

6,658,466

81,520196

6,739,790

Value Creation Story

Issued stock:
Common stock (1)Treasury stock:
Common stock (2,3)

Increases(Number of shares)
As of March 31,
2020(Reasons for changes)
1. The increase in the number of issued common stock resulted from the following:･Issuance of new shares for stock-based compensation with restriction on transfer 40,055 shares
2. The increase in the number of treasury stock of common stock resulted from the following:･Request for purchase of common stock from unknown shareholders
77,818 shares
3,702 shares・Request for redemption of odd-lot stock
3. The decrease in the number of treasury stock of common stock resulted from the following:
196 shares・Request for purchase of odd-lot stock

As of April 1,
2020

Type of stock
Issued stock:
Common stock (1)Treasury stock:
Common stock (2,3)

Increases

Decreases

Financial Strategy(b) For the year ended March 31, 2021

(Number of shares)
As of March 31,
2021

139,965,587

38,290－140,003,877

6,739,790

2,454

316

6,741,928
Business Strategy(Reasons for changes)
1. The increase in the number of issued common stock resulted from the following:･Issuance of new shares for stock-based compensation with restriction on transfer 38,290 shares
2. The increase in the number of treasury stock of common stock resulted from the following:
2,454 shares・Request for redemption of odd-lot stock
3. The decrease in the number of treasury stock of common stock resulted from the following:
316 shares・Request for purchase of odd-lot stock(2) Cash dividends distributed
Initiatives for Achievinga Sustainable Society

Dividends paid during the year ended March 31, 2021
Resolution

Total dividends Dividend perType of Source of (Millions of yen
sharestock dividends and Thousands of (Yen and U.S.
U.S. dollars)

dollars)

General shareholders’Common Retained
meeting onstockearnings
June 24, 2020

¥ 2,797$ 25,268¥
21$ 0.18

Board of Directors’
meeting on
November 4, 2020

¥ 2,931$ 26,479¥

Common Retainedstockearnings

Recorddate

Effective
date

March 31, June 25,
2020
2020

22 September December$ 0.19 30, 2020 4, 2020
Data

12

Nichirei Group Integrated Report 2021

121

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated
Financial
Statements(Unaudited)
NichireiCorporation
and Consolidated
Subsidiaries
For the years ended March 31, 2020 and 2021

Dividends of which the record date falls in the current fiscal year but the effective date falls in thefollowing fiscal year
Resolution

Total dividends Dividend perType of Source of (Millions of yen
sharestock dividends and Thousands of (Yen and U.S.
U.S. dollars)

General shareholders’Common Retained
meeting onstockearnings
June 22, 2021

dollars)¥ 3,731$ 33,700¥

28$ 0.25

Recorddate

Effective
date

March 31, June 23,
2021
2021

Note 8: Income Taxes(1) Tax rate reconciliation for the years ended March 31, 2020 and 2021
(a) For the year ended March 31, 2020
Since the difference between statutory tax rate and effective tax rate is less than 5% of the statutory
tax rate, note related to reconciliation between the tax rates is omitted.
(b) For the year ended March 31, 2021
The Company and its consolidated subsidiaries are subject to Japanese national and local income
taxes which, in the aggregate, resulted in a statutory tax rate of approximately 30.6% for the year
ended March 31, 2021. Reconciliation between the statutory tax rate and the effective tax rate
reflected in the accompanying consolidated statement of income is as follows:
Statutory tax rate
Entertainment and other non-deductible expenses
Dividends exempted for income tax purposes
Inhabitants’ tax per capita
Change in valuation allowance
Tax credit for research and development expenses, etc.
Tax rate differences of overseas affiliates
Equity in earnings of affiliates accounted for by the equity method
Undistributed earnings of affiliates
Other, net
Effective tax rate

2021
30.6%
0.4
0.1
0.5
(2.8)
(1.2)
(0.1)
(0.4)
0.2
1.1
28.3%

(2) A breakdown of tax loss carryforwards and deferred tax assets by expiry date as of March 31, 2020 and
2021(Millions of Yen)
Fiscal Year Ending
March 31, 2020
Tax loss carryforwards (a) ....
Valuation allowance .............
Deferred tax assets................

2021
¥
11
(11)
¥
－

2022
¥
19
(19)
¥
－

2023
¥
18
(18)
¥
－

2024
¥
33
(33)
¥
－

2025
¥
28
(28)
¥
－

2026 and
thereafter
¥ 228
(208)
¥
19

Total
339
(319)
¥
19

(b)

(Millions of Yen)
Fiscal Year Ending
March 31, 2021
Tax loss carryforwards (a) ....
Valuation allowance .............
Deferred tax assets................

2022
¥
12
(12)
¥
－

2023
¥
8
(8)
¥
－

2024
¥
29
(29)
¥
－

2025
¥
38
(38)
¥
－

2026
¥
40
(38)
¥
1

2027 and
thereafter
¥ 749
(685)
¥
63

Total
878
(813)
¥
64

(b)

¥

¥

13

122

Nichirei Group Integrated Report 2021

Notes to Consolidated Financial Statements (Unaudited)
Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2020 and 2021

2022
$ 109
(109)
$
－

2023
$ 73
(73)
$
－

2024
$ 268
(268)
$
－

2025
$ 346
(346)
$
－

2026
$ 367
(352)
$
15

2027 and
thereafter$ 6,765(6,195)
$
570

Total
$ 7,930(7,345)$ 585

Management Strategy(Thousands of U.S. Dollars)
Fiscal Year Ending
March 31, 2021
Tax loss carryforwards (a) ....
Valuation allowance .............
Deferred tax assets................

(b)(a) Tax loss carryforwards represent the amount multiplied by effective statutory tax rate.
(b) Since taxable income is expected for the next fiscal year, the Group considers a part of the tax loss carryforwards isrecoverable.

Value Creation Story

Note 9: Per Share Information
Net assets per share as of March 31, 2020 and 2021 are calculated based on the following:

Net assets
Amounts excluded from net assets:
For non-controlling interests
Net assets attributable to common stock
Number of common stock used for the
calculation of net assets per share(in thousands)

¥

6,884

7,100

64,128

184,504

203,325

1,836,395

133,225

133,261

133,2612020
191,388¥

Financial Strategy

2021
210,426

Thousands of
U.S. dollars
2021$
1,900,524

Millions of yen

Profit per share for the years ended March 31, 2020 and 2021 are calculated based on the following:

Profit attributable to owners of parent
Amounts not attributable to commonshareholders
Profit attributable to owners of parent forcommon stock
Average number of common stock during
the fiscal year (in thousands)

¥

－

－

－

19,60921,212

191,584

133,251

133,251

133,251

2020
19,609¥Business Strategy

2021
21,212Thousands of
U.S. dollars
2021$
191,584

Millions of yen

Initiatives for Achievinga Sustainable Society
Data

14

Nichirei Group Integrated Report 2021

123

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated
Financial
Statements(Unaudited)
NichireiCorporation
and Consolidated
Subsidiaries
For the years ended March 31, 2020 and 2021

Note 10: Segment Information(1) General information about reportable segments
Reportable segments are components of the Company and its consolidated subsidiaries for which
separate financial information is available and whose operating results are regularly reviewed by theboard of directors to make decisions about resources to be allocated to the segments and to assess theirperformance. Reportable segments are determined by product and service as “Processed foods,”“Marine products,” “Meat and poultry products,” “Logistics,” and “Real estate.”
General information about the segments is as follows:(a) Processed foods: Production, processing and sales of frozen cooked foods, agricultural processed
foods, retort-pouch foods, wellness foods, acerola and packed ice(b) Marine products: Processing and sales of marine products(c) Meat and poultry products: Processing and sales of meat and poultry products, and breeding andsales of chicken(d) Logistics: Providing distribution/transportation services and distribution center functions, logistics
consulting, providing storage services, production and sales of ice, and construction work andplanning(e) Real estate: Leasing of office buildings and parking lots and management of real estate(2) The basis of measurement for sales, profit or loss, assets, liabilities and other items of reportablesegments
Accounting policies and methods used at operating segments are the same as those applied to theCompany. Profit or loss of reportable segments is equal to operating profit on the consolidated
statements of income. Intercompany sales and transfers are based on third-party transaction prices.
(3) Sales, profit or loss, assets, liabilities and other items by reportable segment for the years ended March
31, 2020 and 2021 were summarized as follows:Year ended March 31, 2020 (Millions of yen)

Reportable segment

Sales:
External sales
Intercompany sales
and transfers

Processed
foods

Marineproducts

Meat andpoultry
products

Logistics¥ 234,395¥ 65,590¥ 86,173¥ 190,446

386

181

2,153

Total

Real estate

Total

Other (*1)

3,339

¥ 579,946¥

16,050

1,625

¥

Total

Adjustment

Consolidated¥－¥ 584,858

4,912¥ 584,858

20,396769

21,165(21,165)－

234,781

65,772

88,327

206,4964,965

600,343

5,681

606,024(21,165)584,858

Segment profit

16,725443

905

11,824

1,982

31,881(280)

31,600(564)

31,035

Segment assets

128,407

26,92818,949169,648

15,562359,497

10,997

370,494

19,509390,004

5,894

151

267

9,840

701

16,855410

17,266

1,089

18,355

104

－

－

81

－

185

97

283

－

283

2,314

－

－

3,178

－

5,493

－

5,493

1,753

7,246

8,054

209

138

17,072476

25,952

256

26,2091,078

27,287

－

524

－ ¥

240

Other items:
Depreciation
Amortization of
goodwill
Investments inequity-method
investees
Increase in property,
plant andequipment andintangible assets
Outstanding balanceof goodwill
Impairment loss on
fixed assets

1,091
¥

40

－
¥

0

¥

1,616

－
¥

200

¥

481

1,137
¥

－

2,754
¥

481

－

15

124

Nichirei Group Integrated Report 2021

2,754

－
¥

¥

481

Notes to Consolidated Financial Statements (Unaudited)
Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2020 and 2021

Management Strategy

Year ended March 31, 2021 (Millions of yen)

Reportable segment

Sales:
External sales
Intercompany sales
and transfers

Processed
foods

Marineproducts

Meat andpoultry
products

Logistics

Real estate¥ 225,180¥ 62,987¥ 81,685¥ 195,723

¥

269

107

2,414

16,597

1,568

20,957

Total

3,077

¥

Total

Other (*1)

568,654¥

Total

Adjustment

Consolidated

572,757¥－¥ 572,757

796

21,753(21,753)

－

4,103

¥

225,450

63,09584,099212,320

4,646

589,611

4,899

594,511(21,753)

572,757

Segment profit

17,167521

1,298

13,084

2,017

34,089(325)

33,764(814)

32,949Segment assets

138,592

26,005

19,344

181,136

16,702

381,781

8,992

390,774

14,945405,719

6,525

148

257

10,473712

18,117380

18,497

1,171

19,669

103

－

－

53

－

156

90

247

－

247

2,401

－

－

3,157

－

5,558

－

5,558

1,685

7,244

13,438322

110

19,9732,300

36,145

66

36,212

1,617

37,829

951

－

－

542

－

1,493

－

1,493

－

254

¥ 1,019

Depreciation

¥

222

¥

¥

－

－

¥

32

¥

－

¥

¥

1,273

¥

Total

Adjustment

－

1,493
¥

1,273

Financial Strategy

Amortization of
goodwill
Investments inequity-method
investees
Increase in property,
plant andequipment andintangible assets
Outstanding balanceof goodwill
Impairment loss on
fixed assets

Value Creation Story

Other items:

Year ended March 31, 2021 (Thousands of U.S. dollars)
Reportable segment

Sales:
External sales
Intercompany sales
and transfers
Total

Processed
foods

MarineProducts

Meat andpoultry
products

Logistics

Real estate

Total$2,033,781$ 568,890$ 737,765$ 1,767,734$ 27,794$ 5,135,965

2,436

973

21,802

149,903

14,168189,284

Other (*1)$

37,065$ 5,173,030

7,190

$

Consolidated－$ 5,173,030

196,475(196,475)－
5,173,030

569,864

759,568

1,917,637

41,962

5,325,250

44,2555,369,505(196,475)

155,048

4,712

11,728118,172

18,225

307,887(2,935)

304,952(7,357)

297,594

Segment assets

1,251,740

234,875

174,715

1,635,982

150,8563,448,171

81,2173,529,389

134,980

3,664,370

58,940

1,339

2,321

94,597

6,433

163,632

3,434

167,066

10,581

177,647

936

－

－

480

－

1,417

816

2,233

－

2,233

21,686－－28,519－50,205－50,205

15,221

65,426

121,372

2,915

997

180,395

20,778326,459601

327,061

14,609341,671

8,592

－

－

4,897

－

13,490－13,490－13,490Business Strategy

2,036,218

Segment profit

Other items:
Depreciation

$

2,007

$

－

$

－

$

289

$

－

$

2,297

$

9,204

$

11,501$－$

Initiatives for Achievinga Sustainable Society

Amortization of
goodwill
Investments inequity-method
investees
Increase in property,
plant andequipment andintangible assets
Outstanding balanceof goodwill
Impairment loss on
fixed assets

11,501(*1) “Other” represents operating segments not disclosed as reportable segments, which include biosciences business, humanresources and payroll-related services, tree planting management and cleaning services related to tree planting.

Note 11: Subsequent Events
Not applicable.
Data

16

Nichirei Group Integrated Report 2021

125

Data

Investor Information(As of March 31, 2021)

Essential Stock Information

Ratings

Stock Exchange Listing

Tokyo Stock Exchange(First Section) Securities code: 2871

Total Number of Authorized Shares

360,000,000

Total Number of Outstanding Shares

140,003,877 (including 6,741,928
treasury shares)

Share Unit Number

100 shares

Year-end Dividend Record Date

March 31

Interim Dividend Record Date

September 30

Number of Shareholders

19,635

Shareholder Register Administrator

Mizuho Trust & Banking Co., Ltd.

Annual General Shareholders Meeting

June

Auditors

Ernst & Young ShinNihon LLC

Major Shareholders

Rating Institution

RatingRating and Investment
Information, Inc. (R&I)

A

Japan Credit Rating
Agency, Ltd. (JCR)

A+

Composition of Shareholders
Number of
Shares Held(Thousands)

Shareholding
Ratio (%)

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

21,151

15.9

Custody Bank of Japan, Ltd. (Trust Account)

13,660

10.3

Nippon Life Insurance Company

5,744

4.3

Mizuho Bank, Ltd.

3,813

2.9

MUFG Bank, Ltd.

3,406

2.6

Mizuho Trust & Banking Co., Ltd.–Retirement
Benefit Trusts, Mizuho Bank Ltd. Account, Re-trust
Trustee, Custody Bank of Japan, Ltd.

2,799

2.1

Nisshin Seifun Group Inc.

2,719

2.0

Securities Companies

The Norinchukin Bank

2,675

2.0

1.5%

The Dai-ichi Life Insurance Company, Ltd.

2,323

1.7

Custody Bank of Japan, Ltd. (Trust Account 7)

2,280

1.7

Shareholder Name

Individuals and Others

14.3%

Financial
Institutions

56.3%

ForeignInvestors

18.4%

Other JapaneseCompanies 9.5%

Note: “Individuals and Others” includes “Treasury Stock (4.8%).”Notes:
1. Japan Trustee Service Bank, Ltd. was established on July 27, 2020 as a financial company througha joint share transfer method by Japan Trustee Services Bank, Ltd., Trust & Custody Services Bank,
Ltd. and JTC Holdings, Ltd., and changed its name to Custody Bank of Japan, Ltd.
2. Number of shares held rounded down to the nearest thousand.
3. Shareholding ratio calculated after subtracting repurchased stock (6,741,928 treasury shares).
Rounded off to the first decimal place.

Total Shareholder Return (TSR)*(Thousands of shares)

100,000

Nichirei

1 Year
80,00060,00040,000TOPIX

TOPIX Foods

Trading volume (Thousands of shares)(Index)

1,000

Share Price Performance (TSR)
3 Years
5 Years
10 Years
Cumulative Annual Cumulative Annual Cumulative Annual

Nichirei

-5.1%

0.2%

0.1%

65.4%

10.6%

341.3%

16.0%

TOPIX

42.1%

TOPIX Foods

9.8%

22.1%

6.9%

62.3%

10.2%

179.4%

10.8%

-7.2%

-2.4%

3.8%

0.7%

182.8%

11.0%

800
600

Note: Annual figures are the geometric mean of cumulative returns.

400

20,000200

02011/30
2012/3

2013/3

2014/3

2015/3

2016/32017/3

Notes:
1. March 31, 2011 closing prices for Nichirei and TOPIX are indexed at 100.
2. TSR is based on a holding period to March 31, 2021.
* The sum of capital gains and dividends, representing the total yield on a shareholder’s investment.

126

Nichirei Group Integrated Report 2021

2018/3

2019/32020/32021/3

Data

Company Information(As of March 31, 2021)

Corporate Data

Established

December 19421

Paid-in Capital

30,418 million yen2

Head Office

Nichirei Higashi-Ginza Building, 6-19-20 Tsukiji, Chuo-ku, Tokyo 104-8402, Japan

Telephone[+81] 3-3248-2101 (Main)

Number of Employees(Consolidated)

15,383Business Network

14 countries and regions (Domestic and overseas offices and subsidiaries)

Value Creation Story

Nichirei Corporation

Management Strategy

Company Name

Notes:
1. Date of establishment of predecessor Teikoku Marine Products Control Company. Reorganized as Nippon Reizo Inc. in December 1945.
2. As of August 27, 2021

Financial Strategy

External Review
Continuing Adoption as a Constituent Stock of All FourESG Indexes (Domestic Stocks) Selected by theGovernment Pension Investment Fund

Inclusion in Indexes
Selected as a constituent stock of the FTSE4Good Index Series
for 19 consecutive years.

Business Strategy

Disclaimer:
The inclusion of Nichirei 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 Nichirei by
MSCI or any of its affiliates.
The MSCI Indexes are the exclusive property of MSCI. MSCI and the MSCI Index names and logos
are trademarks or service marks of MSCI or its affiliates.

Recognized by the Ministry of
Economy, Trade and Industry under
the Certified Health & Productivity
Management Organization Recognition
Program under the large enterprise
category for four consecutive years.

Selected by the Ministry of Economy,
Trade and Industry and the Tokyo
Stock Exchange as a brand of the
Health and Productivity Stock
Selection for two consecutive years.

Certified as an Excellent
Occupational Safety and HealthEnterprise by the Ministry of
Health, Labour and Welfare.

Initiatives for Achievinga Sustainable Society

Recognition for Employee Health Management/Safety and Health Management

Other
Also selected in FY2021 for the
JPX-Nikkei 400, jointly developed by
Japan Exchange Group, Inc. (JPX)and Nikkei Inc.

Data

年度選定
2013
- 2020
Selected from2013
through
2020
Period of certification:
July 2021 to June 2024

Nichirei Group Integrated Report 2021

127

Data

Global Network(As of March 31, 2021)☆ Jinzhu (Yantai) Food Research and Development● Yantai Representative Office○ Shandong Nichirei (Yantai) Foods Co., Ltd.
○ Taian Jiayu Foodstuff Co., Ltd.

□ Kevin Hancock Limited

Newark(England)Rainham(England)
Carpiquet(France)△ RIZHAO MAI LENG FOOD TRADING COMPANY LIMITED□ Thermotraffic UK Ltd.

● ■Shanghai Representative Office

Rotterdam (The Netherlands)□ Shanghai Fresh Line Express Co., Ltd. (4)○ Nichirei Enterprise Management Consulting (Shanghai) Co., Ltd.
○ Nichirei Corporation Shanghai Ltd.

Versmold (Germany)
Znin (Poland)□ Nichirei Logistics Holding (Shanghai) Co., Ltd.

Ho Chi Minh City
(Vietnam)Tienzan(Vietnam)△ Nichirei Fresh Dalian Co., Ltd. (1)Bình Thuân(Vietnam)Shandong(China)Jiangsu(China)★Liaison Office BangaloreHong Kong□ Frigo Logistics Sp. z o.o. (5)Bangkok(Thailand)
Bangalore(India)□ Thermotraffic GmbH

□ Nichirei Holding Holland B.V.

Samutprakarn(Thailand)□ Eurofrigo B.V. (5)□ Hiwa Rotterdam Port Cold Stores B.V.

Dalian (China)

Shanghai (China)□ Jiangsu Freshline Logistics Co., Ltd.
□ Nanjing Freshline Logistics Co., Ltd.

Selangor(Malaysia)△ Nichirei Fresh Hong Kong, Limited○ Nichirei
Australia Pty. Ltd.

Chon Buri(Thailand)□ Thermotraffic Holland B.V.

□ Transports Godfroy S.A.S.
□ Entrepots Godfroy S.A.S. (4)Sydney(Australia)△ Trans Pacific Seafood Co., LTD.

●▲ Bangkok Representative Office□ SCG Nichirei Logistics Co., Ltd.

▲ Ho Chi Minh City Representative Office△ Nichirei Fresh Vietnam Co., Ltd.

○ Surapon Nichirei Foods Co., Ltd. (2)○ GFPT Nichirei (Thailand) Company Limited○ Nichirei Suco Vietnam Co., Ltd.

□ NL Cold Chain Network (M) SDN BHD

At present, the Nichirei Group conducts business in 14 countries
and regions around the world.

128

Nichirei Corporation …★

Nichirei Foods Inc. …●

Nichirei Logistics Group Inc. …■

Nichirei Group companies … ☆

Nichirei Foods Group companies …○

Nichirei Logistics Group companies …□

Nichirei Fresh Inc. …▲

Nichirei Biosciences Inc. … ◆Nichirei Fresh Group companies …△

Nichirei Biosciences Group companies … ◇Nichirei Group Integrated Report 2021

Management Strategy○ Nichirei Foods U.S.A., Inc.
○ InnovAsian Cuisine Enterprises Inc.
○△ Nichirei U.S.A., LLC△ Nichirei Seafoods, Inc.
● Mori Plant● Hokkaido Branch□ Nichirei Logistics Hokkaido, Inc. (7)□ Sapporo Nichirei Service Inc.
▲ Higashi-Nippon Branch Hokkaido Office

Value Creation Story△ Nichirei Fresh Farm Inc. (2)△ Fresh Chicken Karumai Inc.

Seattle (United States)● Tohoku Branch□ Nichirei Logistics Tohoku, Inc. (4)San Francisco (United States)□ Tohoku Nichirei Service Inc.
▲ Higashi-Nippon Branch Tohoku Office△ Fresh Maruichi Corporation (3)☆ Nichirei Aura Inc.

◇ Pathcom Systems Corporation● Funabashi Plant

Financial Strategy● Funabashi No. 2 Plant● Funabashi No. 3 Plant

Petrolina(Brazil)★ ● Nichirei Technology Development Center

Sapporo○ Nichirei do Brasil Agricola Ltda.

★ Nichirei Corporation★ σχολείο Personnel Development Center

Kayabegun☆ New Housing Inc.

Business Strategy☆ Nichirei Business Partners Inc.
☆ Imperial Hotel Kitchen Corporation

Kunohegun☆ Hitachi Foods & Logistics Systems Inc.
● Nichirei Foods Inc.

● Yamagata Plant● Shiroishi Plant

Domestic Network□ Chushikoku Nichirei Service Inc.
Hiroshima○ CHUREI Co., Ltd.

○ NICHIREI AGRICULTURE Inc.
○ SHIN SUNFOOD INDUSTRY CO., LTD.

□ Tokyo Nichirei Service Inc.

Chiba

□ Nichirei Logistics Engineering Inc.
□ Nichirei Logistics Kanto, Inc. (8)□ Tokyo Industrial Complex Storage Inc.
▲ Higashi-Nippon Branch

Munakata
Omura□ Kyokurei Inc.(4)□ Kyokurei Operation Inc.

Fukuoka△ Nichirei Fresh Process Inc. (2)◆ Global Innovation Center

MiyazakiKagoshima○ NICHIREI WELLDINING Inc.
● Kansai Branch● Kansai No. 2 Plant□ Nichirei Logistics
Kansai, Inc. (12)□ Osaka Nichirei
Service Inc.
▲ Nishi-Nippon Branch● Chubu Branch

Data□ Kyushu Nichirei Service Inc.

□ NK Trans Inc. (3)Osaka□ Nichirei Logistics Kyushu, Inc. (12)▲ Nishi Nippon Branch Kyushu Office□ Logistics Network Inc. (38)Funabashi

Shimonoseki○ Kyurei Inc.

● Kyushu Branch○ Nichirei Ice Inc. (4)■ Nichirei Logistics Group Inc.

Iwaki
SaitamaNishiYokohama
kasugaigun
Tokyo
NagoyaTakatsuki□ Nichirei Logistics Chushikoku, Inc. (12)● Nagasaki Plant

Saku

Sayama● Chushikoku Branch● Metropolitan Branch

Shiroishi● Kanto Shinetsu Branch△ FRESH MEAT SAKUDAIRA Inc.

◆ Nichirei Biosciences Inc.

Tendo

Initiatives for Achievinga Sustainable Society

Note: Figures in parentheses indicate numberof facilities.

▲ Nichirei Fresh Inc.
Sendai□ Nichirei Logistics Tokai, Inc. (11)□ Nagoya Nichirei Service Inc.
▲ Nishi-Nippon Branch Chubu Office● Kansai Plant

Nichirei Group Integrated Report 2021

129