MA K E T H E L E A P

FEED ONE CO., LTD.
2-23-2 Tsuruyacho, Kanagawa-ku, Yokohama-shi, Kanagawa
TEL: +81-45-311-2300
URL: https://www.feed-one.co.jp/english/

Integrated Report 2023
Fiscal Year Ended March 31, 2023

About FEED ONE

About FEED ONE

FEED ONE’s Strategy

Sustainability Management

Data Section

P01-08

P09-30

P31-56

P57-66

Contents

Our Values

About FEED ONE
01
03
05
07

Cor p or a te S loga n

T he S ou rc e o f D e l i c i o u s n es s

Our Values
History of FEED ONE
At a Glance
Financial and Non-Financial Highlights

FEED ONE’s Strategy
09
13
15
17

The slogan represents our strong commitment to making as many people aspossible aware that feeds are deeply connected with the production of meat, fish,

Message from the
President
Talent Strategy
Value Creation Process
Business Vision andMedium-Term
Management Plan

19
23
25
27
29

Business Strategy
Global Strategy
Financial Strategy andCapital Policy
R&D Strategy
Sustainability Policy

Sustainability Management

eggs, and dairy products we routinely eat and that FEED ONE is producing

31
33
39
45

and delivering the feeds to customers every day.

Efforts for ESG/SDGs
Environment
SocialCorporate Governance

Data Section
Ma na ge m e nt P hilos op hy

L ogo

59

The first step in producing feed is to form an image of the future

Missionof food, in terms of contributing to the sustainability of theValues

We aim to be a Company that consistently produces food that istrustworthy and exciting to the palate.

61
65
66

Consolidated Financial
Statements
Company Information
Share Information

FEED ONE wants to be a company that isalways grateful for the bounty of the good earth,
as it contributes to the world’s food culture
through the production and sale of compound
feeds. The FEED ONE logo crystallizes thesethoughts, along with the motifs of earth, sea
and sun, in a single image. At the same time,
the logo expresses the energy of life (yellow)
and the operations by which it grows: thelivestock industry (green) and the fisheries
industry (blue). Enclosing all of these elements
in a shape resembling an egg expresses ourdesire to deliver to customers a stable supply ofsafe, trustworthy feeds.

FEED ONE CO., LTD. places great importance on proactive dialogue
with stakeholders in all of its business activities.
The purpose of this report is to report our management strategies
and our business and CSR activities to help readers comprehensively
understand the social and economic value we create.
Guideline Used as Reference
The International Integrated Reporting Framework published by theInternational Integrated Reporting Council (IIRC)
Scope of Report
The report covers business activities from April 1, 2022 throughMarch 31, 2023 (including the content of some business activities
that started in or after April 2023).
Communication Map
Summary

We constantly strive to provide solutions that address the needs and issues ofcustomers and consumers.
To supply our customers with safe and reliable foods in a stable manner, we
conduct thorough compliance with regulations.
We develop highly specialized personnel who can grasp changing trends andconstantly tackle challenges.
We sincerely strive to build trust with society through thoughtfulness, fairness, andhumility.

Financial Data for theLast 7 Years
Financial Summary

Editorial Policy

livestock and fishery industries.

Vision57

Integrated Reports (Japanese/English)
Corporate
Governance
Reports

Details

AnnualSecurities
Reports

Financial Results
Briefing Materials

Financial Information

01

FEED ONE Integrated Report 2023

Sustainability(Website)Non-financial Information
Integrated Report 2023

02

About FEED ONE

T O PICSHistory of FEED ONE
The FEED ONE Group was established in 2014 through the integration of Kyodo Shiryo Co., Ltd. and Nippon Formula Feed
Mfg. Co., Ltd., two long-established companies.
FEED ONE has continued to enhance its corporate value by combining the strengths that the two companies had accumulated
since their foundation.
Since its foundation, the Company has contributed to the development of the livestock and fishery industries by delivering
products and services to customers under the FEED ONE brand, drawing on the strengths of the two companies. The Company
will continue to take on new challenges through delivering food security and the enjoyment of eating to ultimately contribute to
the sustainable development of the industry, society, and planet.

Nippon Formula Feed Mfg. Co., Ltd.,established in 1929
Kyodo Shiryo Co., Ltd.,established in 1946
FEED ONE HOLDINGS CO., LTD.,established in 2014

FEED ONE’s Strategy

Sustainability Management

Data Section

P01-08

P09-30

P31-56

P57-66FY2022

Installed Vietnam’s first equipment that produces a milk substitutefor cattle at the animal feed factory (affiliated company) in Vietnam

Installed LNG-based cogeneration systems at the Kitakyushu
Animal Feed Factory and Kitakyushu Aquatic Feed Factory

We installed Vietnam’s first equipment that
produces a milk substitute for cattle at Kyodo
Sojitz Feed Co., Ltd., following the installationof the flake cattle feed production facility lastyear. We aim to grow further by tapping into themarket for cattle feed through the provision ofnutritional management support and technicalguidance.

Aiming to reduce CO2 emissions and achievecarbon neutrality, we installed liquefied natural
gas-based cogeneration systems at the
Kitakyushu Animal Feed Factory andKitakyushu Aquatic Feed Factory to improveenergy efficiency during steam generation byeffectively using part of the waste heatproduced from power generation.

First Medium-Term Management Plan (FY2015–FY2017)

Second Medium-Term Management Plan (FY2018–FY2020)

Third Medium-Term Management Plan (FY2021–FY2023)

FEED ONE CO., LTD.
established
Set the stage for its
10-year ideal state

Optimizing Our Bus iness Portfolio

Putting the Finishing Touches on Business Integration—To Become a True Leading Company!—

Establishment ofcompanies and factories

FY2014FY2015

FEED ONE HOLDINGS
CO., LTD. established(business integration)

FEED ONE CO., LTD. established (full integration)
Completed the construction of an aquatic feedfactory in India, namely Nippai Shalimar Feeds
Private Limited (affiliated company)

FY2016

Bas ic s t ra t eg i es

Increase 2
Establish the 3
Optimally 4
1 the brandpower
p rofit base of the allocate management

Strengthen
production facilitiesof the food business ov erseas businesses

FY2017FY2018Completed the constructionof the Kitakyushu factory(renamed the Kitakyushu
Aquatic Feed Factory in
April 2020)

Feed One Foods Co., Ltd. established throughthe integration of FEED ONE’s meat businessand two affiliated companies

FY2019resources

Bas ic s t rat eg ies

Further strengthen the
profitability of Animal Feed,which is our core businessAccelerate growth of 2
1 Aquatic
Feed, Food Business,
and Overseas Businesses

FY2021

FY2022

Magic Pearl Co., Ltd. established throughthe integration of two affiliated companies

Installed Vietnam’s first flake feed production facility at
Kyodo Sojitz Feed Co., Ltd. (affiliated company), an animal
feed factory in Vietnam

Installed LNG-based cogeneration systems at the Kitakyushu
Animal Feed Factory and Kitakyushu Aquatic Feed Factory

ESG/SDGs andother topics
FEED ONE Integrated Report 2023

Began shipping
fully-farmed Pacificbluefin tuna

Installed Vietnam’s firstequipment that produces
a milk substitute for cattle

Started genomic analysis services for dairy cattle
Started analysis services for raw milk fatty acid compositions

Launched Red sea bream DP Force ONE,low fish meal feed

Launched new food products
Yamitsuki horumon (porkoffal you will crave)
Tongisukan (pork version of
Jingisukan, a Hokkaidospecialty grilled mutton dish)Kokusan Buta Shiro Motsu(white offal of domestic pork)

Launched a new food productShobu-noMotsu Nikomi(finest stewed
pork offal)

Concluded anagreement to support
for a parent-childcommunication
program launched by
the Kanagawa
Prefectural
Government

Formulated a plan of action for general employers
according to the Act on the Promotion of Women’s
Active Engagement in Professional Life
Developed a common employers’ action plan
according to the Act on Advancement of Measures
to Support Raising Next-Generation Children
Accredited Class AA in the Yokohama Health andProductivity Management Certification 2021
Became a recognized organization in the large
enterprise category under the 2021 CertifiedHealth & Productivity Management Outstanding
Organizations Recognition Program
Registered as Kanagawa SDGs Partner
Launched the ESG Committee

New products
and services
Started internal andexternal initiatives
Food and nutrition
seminarsChildren’s visits toparents’ workplaces

Started sponsoring andparticipating in social
contribution events
Yokohama Marathon
WFP’s Walk the World
event

3

Promote ESG management
and strengthen business platform

FY2020Completed theconstruction of theKitakyushu Animal
Feed Factory
Launched FIBEGEAR DROP (dedicated feed forautomatic milking system), a patented product03

About FEED ONE

Launched Trout EP Seika, low fish meal feed for trout
Launched Feed Care, synthetic milk for pigs

Launched Lumino Scratch, synthetic milk for cows

Launched a new food productOnikuyasan-no
Kodawari Motsu Nikomi(Butcher’s finest
stewed pork offal)

Accredited Class AAA in the Yokohama Health and Productivity Management
Certification 2022
Became a recognized organization in the large enterprise category under the 2022 CertifiedHealth & Productivity Management Outstanding Organizations Recognition Program
Joined e-dash, a service platform to support decarbonization initiatives
Developed a human rights policy
Launched the “My SDGs Declaration” project
Registered in the Kitakyushu SDGs Registration System (the Kitakyushu Animal
Feed Factory and Kitakyushu Aquatic Feed Factory)
Issued an Integrated Report as the first company in the feed industry
Green Farm Sogo Co., Ltd. (affiliated company) awarded as a contributor toagriculture, forestry and fisheries in Kyoto
Joined open innovation with startups (The Bank of Yokohama Accelerator Program)

Disclosed a TCFD Report
Green Farm Sogo Co., Ltd. registered as a SDGs partner of
Fukuchiyama City
Kitakyushu Feed One Hanbai Co., Ltd. registered as abusiness operator working on the SDGs both in Kumamoto
and Nagasaki prefectures
Joined Save Earth Foundation’s Zero Food Loss and Waste(FLW) Kyoto Project “Zero Edible FLW & 100% FLW
Recycling”
Became a recognized organization in the large enterprise
category under the 2023 Certified Health & Productivity
Management Outstanding Organizations Recognition
Program
Integrated Report 2023

04

About FEED ONE

FEED ONE operates in three business segments: the feed business deals in animal, lab animal, aquatic, andbeekeeping feeds; the food business delivers meat and eggs; and the other businesses include the sale of livestockand fishery equipment and the real estate leasing business. As the most reliable partner of customers, FEED ONE
aspires to become a leading company that contributes to the sustainable growth of the industry.

Feed Business

Sustainability Management

Data Section

P01-08

P09-30

P31-56

P57-66

Although domestic demand for formula
feeds has remained unchanged, our sales
volume has increased over the years. We
are one of the top sellers in the animal
formula feed industry.

Production, Purchase, Processing,and Sale of Livestock Products

We leverage the technologies and development skills we haveaccumulated over many years to provide safe and reliable feeds
tailored to the needs of customers, which contribute to improving
customers’ productivity.

We have built an integrated food value chain,spanning from production to sale of products, withmeat and eggs as the mainstay of its business.

Animal Feed

Food BusinessWe provide safe and reliable feeds, primarily for poultry, pigs, and cattle,
which help solve problems at production sites and address differentiationneeds based on experiments at our facilities and analyses of field data.

We manufacture and sell products meeting theneeds of our customers through a nationwide
network of affiliated companies processing meatand those processing and distributing eggs.

Aquatic Feed

Livestock Farm Business

Fish are essential to Japan’s food culture. A lot of fish are farmed. We deliver
high-quality formula feeds indispensable for aquaculture by leveraging thetechnologies we have long accumulated as a pioneer in this field.

We own an affiliated company farming eggs in
Kyoto Prefecture and other affiliated companies
farming pigs in Aomori and Iwate Prefectures to
produce safe and reliable eggs and pork.

Lab Animal Feed
In animal experiments, nutritional factors are one of the important factorsthat have a great impact on experimental animals. We produce feed for thoseanimals by strictly managing processes, ranging from the procurement of
raw materials, blending, granulation, storage, and analysis to transportation.

Beekeeping Feed
We sell pollen substitutes, which are supplied during thebuilding-up period when it is desired to increase thenumber of bee larvae or during the period when
there is not much pollen, and beekeeping
sugar, which is supplied when there is notmuch nectar, supporting beekeeping
businesses and contributing to thedevelopment of the beekeeping industry.

Amount of formula feeds distributed (thousand metric tons)

27,0003,700

20,000

3,000

2016

2

Nationwide manufacturing
capability that underpins
stable supply

We operate 14 animal and aquatic feedfactories (including joint-venture factories)
in Japan. We actively make capital
investments to help the stable supply of
formula feeds.

2017

2018

2019

2020

2021

2022 (FY)

Contribution to the development of
the industry with our reliable
research and development capability

4 Competitive
procurement capability

We have a strong research and development
capability. We meet the needs of society andcustomers by applying the technologies that wehave long accumulated and the cutting-edge
technologies to product development, quality
control, feed technologies, etc.

We will purchase raw materials in astable and competitive way by procuring
them from multiple production areas andassigning personnel in charge ofprocuring raw materials to manufacturingbases nationwide.

3

expansion from Asia, where the demand is expected
5 Businessto grow, to the world

India
VietnamWith our feed manufacturing technologies accumulated in Japan, we have developed ourbusiness centered in Asia, where markets are expected to expand. We will also expand ourbusiness more broadly to the world.

Industry Trends Related to the Feed Business
Sales in the Feed Industry

86%

13%
Other Businesses
1% Sale of Livestock andTotal sales

307.9

FEED ONE’s
Our sales volume (thousand metric tons)
Strengths

Comparison between the amount of animal feeds
distributed and our sales volume

leading sales
1 Industry’s
capability

Food Business

Animal Feed, Aquatic Feed, Lab Animal Feed, Beekeeping Feed

Fishery Equipment

billion yen

Fiscal year ended
March 31, 2023

Overseas Businesses
Manufacture and Sale in Vietnam and India
In Vietnam, the world’s seventh largest country
in terms of the number of pigs raised, we
manufacture and sell animal feed primarily forpigs. In India, the world’s second largest country
in terms of aquaculture production volume, wemanufacture and sell aquatic feed.
Note: Sales of our overseas affiliated companies are not included in the Group’s total sales because they are all entities accounted for using equity method.

FEED ONE Integrated Report 2023

FEED ONE’s Strategy

One’s PowerAt a Glance05

About FEED ONE

Besides feeds, we make proposals related
to the environment of livestock barns.
Livestock and Fishery Equipment
We not only sell feeds but also
propose solutions tailored tocustomers’ requests such as
pre-mixed feeds, construction
materials for livestock barns, and avariety of supplies, materials, andequipment.

Cost of sales

Sales prices of our animal feed products

In the feed industry, imported grains account for a majority of raw
materials. As imported grains are susceptible to market conditions
and foreign exchange rates, their prices are revised in January,
April, July, and October every year in line with changes in market
2021.4 5678910 11 12 2022.1 2
3
4
5
6
7
8
9
10 11 12 2023.1 2
3 (Month)
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
conditions and exchange rates. The situation over the past few
years has seen raw material prices soar and remain high mainly due to the effects of grain market prices, exchange rates, ocean freight charges, and tensions
in the global situation. In the aquatic feed industry, fish meal accounts for more than 40% of raw materials. South America, the leading producer of fish meal,
had a sharp decline in fish catch, causing continuous price hikes. We therefore had no choice but to revise the sales prices of our aquatic feed products. As aresult, while the sales volume of our formula feeds in FY2022 increased by approximately 2% year-on-year, their sales increased by approximately 27%
year-on-year as we raised sales prices due to the aforementioned soaring prices of raw materials. This suggests that, in the feed industry, sales do not serve as
the metrics to measure business growth as the prices of raw materials greatly impact our sales prices.

How the Formula Feed Price Stabilization System Works
This system aims to mitigate the impact of rising feed prices on the livestock business.
As compensation claims were filed, fund collection was resumed in the fiscal year ended March 31, 2022. Contribution per ton
increased and fund collection for extraordinary compensation started in the fiscal year ended March 31, 2023.

How the system works (case of the 2nd half of the fiscal year ended March 31, 2023)
Government
Formula feed manufacturers

Livestock farmers

Contribution(same amount as manufacturers)

Contribution 51 yen per ton

Extraordinarycompensation fundChanges in reserve funds (by formula feed manufacturers)
Ordinary compensation: basic

Ordinary compensation: special

the government andmanufacturers make contributions

Extraordinary compensation (yen)

52

51

225

600 600 600

Contribution (basic + special)
1,200 yen per ton

Extraordinary compensation

Contribution (basic only)

Ordinary
compensation fund500

farmers and manufacturers
make contributions

1st half 2nd half 1st half 2nd half 1st half 2nd half 1st half 2nd half 1st half2020.32021.32022.32023.3 2024.3

Ordinary compensation
Extraordinary compensation

250
0
250

0
0

0

400

400 400

600 600 600

Integrated Report 2023

06

About FEED ONE

About FEED ONE

FEED ONE’s Strategy

Sustainability Management

Data Section

P01-08

P09-30

P31-56

P57-66

Financial and Non-Financial Highlights
Financial Highlights
Sales

Sales Volume of Formula Feed

(Million yen)(Thousand metric tons)

307,911 million yen

3,686 thousand metric tons

Capital Expenditures / Depreciation

2,103 million yen / 3,235 million yen

3,686

243,202

215,050

3,577 3,581

214,120

212,886

36,011 million yen / 0.79 times
Interest-bearing liabilities (million yen)
D/E ratio (times)
36,011

Capital expenditures (million yen)
Depreciation (million yen)

307,911

Interest-Bearing Liabilities / Debt to Equity (D/E) Ratio

7,934 8,120

3,613

3,475

Total assets (million yen)
Equity ratio (%)

90,88021,82920,902

3,198

2,395 2,513

127,913 million yen / 35.0%
88,93421,303

3,811

Total Assets / Equity Ratio

3,157
2,659

3,235
2,103

13,75440.5

42.3

127,913

0.55

0.49

(7,816) million yen(Million yen)

108,504
99,251

7,737
4,842

42.6

40.8

0.79

0.38

Net Cash Provided by (Used in) Operating Activities

2,740

1,127

35.0

0.49

(7,816)2019.32020.32021.32022.32023.32019.32020.32021.32022.32023.32019.32020.32021.32022.32023.32019.32020.32021.32022.32023.32019.32020.32021.32022.32019.32023.32020.32021.32022.32023.3∙ The amount of interest-bearing liabilities at the end of each fiscal
year is the sum of short-term borrowings and long-term borrowings.

Operating Profit / Operating Profit to Sales

1,422 million yen / 0.5%
Operating profit (million yen)
Operating profit to sales (%)

Ordinary Profit / Ordinary Profit to Sales

1,711 million yen / 0.6%

Profit Attributable to Owners of Parent / ROE

1,030 million yen / 2.3%

Ordinary profit (million yen)
Ordinary profit to sales (%)

Profit attributable to owners of parent (million yen)
ROE (%)

4,657
5,414 5,672
4,293

4,123
2.5

2021.32022.3

3,842

2.1

13.5

0.5

0.6
2020.3Market capitalization (million yen)
P/B ratio (times)

2021.32022.3

Dividend per share (yen)Dividend payout ratio (%)

22.5

25,55929,717

10.3

11.0

0.96
8.5

0.77

Number of New Graduates Hired
Male:

137
496

Female:10

Female
Male

4

1,030

2019.32020.32021.32022.32023.3

508

139
508

142
496

0.58

0.58

2019.32020.32021.32022.32023.32021.32022.32023.3

FEED ONE Integrated Report 2023

19.0

25.6

22.2

25.0
91
74

71

74

2022.32023.3

26.4

2019.32020.32021.32022.32023.32019.32020.32021.3

時間外労働時間

6.7 hours

5.9 hours

Hours worked in excess of contract-based standard working hours
Hours worked in excess of statutory working hours

Number of Days of Paid Leave andSummer Vacation Taken Per Year

Participation Rates for Stress
Check Tests and Health Checkups

Average number of days of
paid leave taken:

Participation rate for stress check tests: Participation rate for health checkups:

14.0 days

Average number of days ofsummer vacation taken:

2.9 days

Average number of days of summer vacation taken
Average number of days of paid leave taken

10.6

17

2019.3

8.9

8

8

484

∙ The numbers above include employees excluding officers(i.e., full-time employees, contract employees, part-time
employees, rehired employees, and temporary employees).

07

Hours worked in excess of
Hours worked in excess of statutory
contract-based standard working hours: working hours:

(%)

11

2020.3

Average Overtime Working Hours Per Month138

42019.3

Turnover Rate

4.1%

Female
Male

140

25.0

∙ Effective October 1, 2020, the Company carried out a consolidation of shares in which five of theCompany’s common shares were consolidated into one share. The dividend per share in thegraph, however, has been converted based on the number of shares after the share consolidation.

Male:

138

25.0

74%
(%)

2.3

2023.3

Number of Employees

484

25.0

92.6

Total Shareholder Return

84

0.85

Non-Financial Highlights
Female:25.0 yen / 92.6%

36,00834,634
3,659

Dividend Per Share / Dividend Payout Ratio

25,8091,422

2019.325,809 million yen / 0.58 times

2.8

1,711

2023.3

4,438

5,067
2.7

2.1
1.8

2020.3

4,466

2.6

1.9

2019.3

5,737

6,081

Stock Valuation Metrics

3
14

18

4

3.0

2.9

2019.32020.3102020.32021.32022.32023.3

3.8

4.1

6.9

6.5

6.8

6.7
6.0

5.9

2022.32023.3

2.7
10.1

2.8

2.9

11.4

11.2

2020.32021.3

2.9
12.3

2.9

99.3%

99.8%

Participation rate for stress check tests (%)
Participation rate for health checkups (%)

99.8 100.0 99.8 100.0 99.8

14.0

92.6

96.7

96.7

99.3

2020.32021.32022.32023.375.1

2.1

2021.32022.32023.3∙ The figures above represent the rates of employees
who resigned for personal reasons, except full-time
employees who have reached their retirement age.

2019.32020.32021.3∙ Overtime hours worked by full-time employees in non-management
positions, contract employees, part-time employees, and rehired employees∙ Data on hours worked over statutory working hours is available from thefiscal year ended March 31, 2021, the year when the Company began
aggregating it.

2019.32022.32023.3∙ Full-time employees, contract employees, rehired
employees, and temporary employees∙ The number of days of summer vacation granted tothe eligible employees is 3.

2019.3∙ Full-time employees, contract employees, part-time
employees, rehired employees, and temporary
employees

Integrated Report 2023

08

FEED ONE’s Strategy

About FEED ONE

FEED ONE’s Strategy

Sustainability Management

Data Section

P01-08

P09-30

P31-56

P57-66

Message from the Presidentdelivering enriching and enjoyable diets. Another of our
missions is to contribute to the sustainability of society as
food industry infrastructure by providing support forrecycling within supply chains. We have positioned therealization of a resource recycling society as an importantmanagement theme and are working to fulfill our
corporate responsibilities through our business activities.
A specific example is our efforts to collaborate with local
communities and partners in the retail, restaurant, andother industries on initiatives such as effectively using
food production byproducts as ingredients in formulafeed, and reducing food loss by actively using “fried meal”
made by heating, drying and processing food loss,
thereby building food recycling loops. Going forward, we
also plan to engage in upcycling (adding value to anunused resource and making it into a new product) in ourformula feed business.
A year has passed since I was appointed as
Representative Director and President in June 2022. As a

Hidehiro Shoji
Representative Director and President

We will press forward to create value fromthe source of deliciousness as a lifeline that
supports food supply chains.
FEED ONE’s Significance of Existence and Aims to Be Achieved Through Business
FEED ONE is contributing to food supply chains throughbusiness development that aims to support the
production of livestock and marine products as a formula
feed manufacturer and to deliver food products. We must
maintain this role without being swayed by changes in thetimes and continue to constantly fulfill our functions. In
recent years we have seen major societal changes,
including the progression of global warming, the outbreak

09

FEED ONE Integrated Report 2023of the COVID-19 pandemic, and the crisis in Ukraine, andthese have had a considerable impact on food supply
chains. However, they have also made us more keenly
aware of our own responsibilities and we will strive tocontinue fulfilling our role.
Our mission is to continue to provide stable supplies
of safe and reliable feed and foods and by doing this, wewill contribute to improving the health of people by

new president, I worked to share my thoughts on the roleand missions of the Company, as outlined above, with all
employees and this confirmed to me that they are firmly
entrenched within the Company as a fundamental of ourbusiness activities. Also, FY2023 will be the 10th fiscal
year since the business integration of our two
predecessor companies. We recognize that we cannot
realize future growth solely by continuing with current
initiatives, so we are working to spread awarenessthroughout the Company of our new direction of“continue, discontinue, and begin.” We are positioning
the period of FY2024, the start year of the next Mediumterm Management Plan, and thereafter as our second
growth phase, during which we will drive further
development by revising initiatives that are unfeasible orwasteful, regardless of past successes experience, whileat the same time taking on the challenge of new businessareas with a firm awareness of risk.

The Current Business Environment and Progress on the Medium-Term Management Plan
FY2022 was the second fiscal year of the Third MediumTerm Management Plan “Make the leap! 2023,” and in
the first quarter we recorded our first-ever operating loss
since our establishment due to a considerable increase incost of sales following steep rises in the prices of energy
and imported raw materials, including corn. We returned
to profitability from the second quarter onward by revisingsales prices and working to reduce costs, but the effectsof the increases in cost and SG&A expenses were felt
throughout the year, resulting in a large and unavoidable
decrease in profit.
Speaking of this deterioration in the cost environment,
the price of corn, which is one of the main ingredients ofanimal feed, reached a historic high due to global
instability of grain supplies. This was driven by an increasein demand for ethanol in the US, as well as the crisis in
Ukraine. The price of fish meal, which is one of the main
ingredients of aquatic feed, also increased due to a
decline in catch quantities of South American sardines
resulting from unseasonable weather, as well as a rise indemand from China. The yen depreciated even more thanin the previous fiscal year, which had an impact on theprices of imported raw materials. Energy costs also roseyear on year and price indexes that include electricity,gas, and water soared. In addition to this, an increase inreserve contributions to the Formula Feed Price
Stabilization System had a considerable impact on SG&A
expenses.
On the other hand, we made steady progress on thematerial issues for each of our businesses outlined in our
Medium-term Management Plan, which led to an
improvement in sales and production capabilities.

Specifically, in the animal feed business, we
completed efforts to strengthen production systems in
Hokkaido by adding extra facilities for cattle feed, thereby
enabling increased production of flake feed, and thein-house production of milk substitute for calves, which
contributed to firm sales of strategic products. Also, ourtotal consulting services, which leverage the high levels of
expertise possessed by our sales personnel to provide
services in areas such as genome analysis for dairy cows,
consulting for livestock feeding and the enhancement offarm environments, has become one of our strengths,
and it contributed to raising sales volumes while also
solving the issues of producers.
In the aquatic feed business, we have made progresson the development and sales expansion of sustainable
feeds that preserve marine resources. In addition toincreasing sales volumes of low fish meal feeds,
development of fish meal-free feeds is progressing
smoothly and we have successfully launched Sustena
ZERO, a fish meal-free feed for red sea bream.
Also, as I mentioned, the price of fish meal remains
high, the growth in demand for low fish meal and fishmeal-free feeds with price advantage serves as a tailwind
for the Company.
In the food business, we enhanced our lineup offrozen food products, represented by products such asprocessed foods on skewers, to meet the need ofretailers such as supermarkets to save on manpower, andthis has increased sales volumes. By focusing on thesekinds of consumer products, which are less affected bymarket forces, we are aiming to build a sales base thatwill ensure profit.

Integrated Report 2023

10

FEED ONE’s Strategy

About FEED ONE

FEED ONE’s Strategy

Sustainability Management

Data Section

P01-08

P09-30

P31-56

P57-66

Message from the President
In our overseas business, we are producing andselling feeds in Vietnam and India. In FY2022, ourVietnamese business performed well and is now making
a considerable contribution to profits and our Indianbusiness also recorded a profit. We have completed
Vietnam’s first facilities for producing flake feeds and milk
substitute for cattle, and we will leverage excellent
Japanese technology to improve business performanceand expand our share of the Vietnamese market.
FY2023 will be the final year of our current Mediumterm Management Plan, and while we are forecasting tosell approximately 3,720 thousand metric tons of feed,roughly in line with our target of 3,780 thousand metrictons, we also expect results to fall considerably below ourtargets of 6.2 billion yen for ordinary profit and 9.0% forROE. Even though this is attributable to the deteriorationof business environment beyond what we anticipatedwhen formulating the plan, our management team also
recognizes our responsibility.
Although this severe cost environment is expected tocontinue in the final year of our current Medium-termManagement Plan, we will work to improve profits byincreasing sales volumes in the feed business, expanding
sales of high value-added products, and adjusting sales
prices to reflect the prices of raw materials and energy.
The entire Company will work together to make steadyprogress on material issues so that we can outperform
our current forecasts as much as possible.

Long-Term Outlook on Sustainable Growth and Reforms Going Forward
Taking a long-term perspective on future growth
opportunities, I think in general, a lot of people are
anticipating that the Japanese market will shrink due tothe declining birthrate and aging population, but in termsof the business environment around the Company,
demand for domestically produced animal protein is
expected to remain stable into the future, so we think that
we can cultivate a stronger position in this market andexpand the value created at the front line. While formula
feed production volumes in Japan have remained at thesame level for the past 30 years, formula feeds havemade the rearing and weight gain of livestock and farmed
fish considerably more efficient and it has supported
increases in the production of domestic livestock andmarine products. I think we can say that Japanese
producers and feed manufacturers have both worked

11

FEED ONE Integrated Report 2023

together to overcome the many crises they have faced,
including the liberalization of beef imports, in a way thathas maintained and developed the livestock and fisheryindustries while also making them more resilient.
I am confident that we can continue to play a leadingrole in the feed industry and ensure the domestic market
remains appealing.
Alongside our domestic efforts, we are also
considering growing business overseas where greater
opportunities exist. We will use our current achievements
in Vietnam and India as a foothold for accelerating
business development in order to take advantage of
growing protein consumption in Asia.
Another growth opportunity we are looking at is thegrowing number of business opportunities that are arising
due to new technologies. There is still plenty of room forproduction improvements and value addition at livestockand marine production sites. Innovations achieved
through introduction of cutting-edge nutritional
technologies and AI, as well as the realization of DX, etc.
present chances to create unprecedented new value.
We plan to capture these growth opportunities andrealize sustainable growth into the future by utilizing thehigh-level knowledge and expertise of formula feed
production and the livestock and farmed fish feed
management technologies we have cultivated to date andby actively investing in the incorporation of advanced
technologies and in human resource development andutilization.
Currently, we are operating an animal feed business,
which is our mainstay business, and an aquatic feedbusiness, food business, and overseas businesses as thefour pillars of our operations. We are currently formulating
our next Medium-term Management Plan, which will
begin in FY2024, and we intend to clarify our future vision
for this business portfolio through the plan, andimplement necessary changes to our business model.

Regarding the overarching direction we plan to take,in the animal feed business we will focus on adding value
at the business sites of producers. Rather than selling at
low cost, we will deepen and develop systems for eachtype of livestock to build high-level expertise that cansolve customer issues. In the aquatic feed and foodbusinesses, we need to continue supporting the current
recovery in profitability while also determining the scale offuture profit contributions. In the overseas business, wewill formulate our growth strategy based on the certain
amount of progress we have made on the current
Medium-term Management Plan.
In regard to future initiatives, the most pressing issues
are to renew factories for the animal feed and aquatic
feed businesses and to rebuild production structures toenhance production efficiency. In the food business, weare also considering capital investment aimed atstrengthening production related to meat processing andeggs, as well as enhancing sanitation standards.
On the development side, we will focus on themes
such as exploring the potential of new food byproducts
as feed ingredients, expanding the scope of the fish mealfree feed, reducing substances of concern included inlivestock excretion and belching, and livestock healthenhancement and animal welfare.
Furthermore, we plan to take on various challenges
with the aim of transforming the entire livestock andfishery industries in Japan, including tackling labor
shortages at production sites and in the logistics industry
through initiatives to reduce the manpower required byoperations, such as promoting the use of tank levelmonitoring systems.

Contributing to the SDGs and Practicing ESG Management to Keep Our Place in Society
We recognize that contributing to the achievement of theSDGs and promoting ESG management are essential if
we are to keep our place within society. In particular, there
are many environmental themes that are closely associatewith our business, such as the realization of a resource
recycling society, response to climate change, resourceand environmental conservation, and biodiversity
protection. We will protect the global environment andraise food sustainability by working to address each ofthese themes.
In regard to social themes, we think that we should
focus on strengthening human resources base andensuring respect for human rights within the Company.
From a human capital management perspective, we also
believe that efforts on personnel measures such as
work-style reforms, diversity promotion, and health andproductivity management are some of the most importantmatters concerning the sustainable growth of theCompany. By creating attractive workplaces, we will raise
the engagement of each individual employee and makethe Company more dynamic.
We will also strengthen the governance that supports
these endeavors and underpins the relationships of trust
we have with our stakeholders. We will enhance

management transparency and raise corporate value by
maintaining the levels of corporate governance requiredof companies listed on the TSE Prime Market and by
actively utilizing the supervision and advice provided byour external directors, who make up more than half of themembers of our Board of Directors. We view that our
corporate governance has just started to satisfy theminimum level of the Prime Market requirements and wewill continue to further strengthen and enhance
governance structures.
FEED ONE is a lifeline that upholds food supply chains
and we are proud of the role we play in supporting thestable supply of livestock and marine products in Japan.
We are particularly happy to have contributed to theimprovements in physical constitution and strength, andthe lengthening of lifespans seen among Japanesepeople in recent years as a result of increases in animal
protein intake.
Going forward, we will continue to work with all
stakeholders to share the benefits of an enriching foodenvironment by creating value in supply chains throughformula feed that is the source of deliciousness.

Integrated Report 2023

12

FEED ONE’s Strategy

About FEED ONE

FEED ONE’s Strategy

Sustainability Management

Data Section

P01-08

P09-30

P31-56

P57-66

Talent Strategy

Kazuo Kubota
Director,
Managing Executive Officer
General Manager,
Administrative Unit and in
charge of Aquaculture Feed
Division

Message from the Officer in Charge of Human Resources

Building an attractive company as the biggest fan of our employees
Human capital at FEED ONE: From theperspective of the General Manager,
Administrative Unit
I joined FEED ONE from the Bank of Yokohama, Ltd. in
April 2021, and have been serving as General Manager of
Administrative Unit since April 2023. After joining theCompany, I have traveled across the country and been
impressed to see every one of our employees involved in
the source of deliciousness (our corporate slogan), andfeeling a strong sense of responsibility toward contributing
to the sustainable development of the livestock andfishery industries as part of our corporate philosophy. We
have many sincere and dedicated people, and I canpersonally sense how the elements of our management
philosophy—thoughtfulness, fairness, and humility—are
being embodied by our staff, giving me confidence in ourcompany’s potential for future growth.

What FEED ONE’s ideal talent looks like andthe role of the Administrative Unit
The qualities we look for in the people we work with are
the ability to take the initiative and act, a sincere
disposition and ability to work together with others, anda willingness to take on challenges driven by a curiosity
about everything. Each and every employee needs tocontinually drive innovation as the strongest partner of ourcustomers, and we recognize that the perspectives and

13

FEED ONE Integrated Report 2023

sensibilities of the younger generation are valuable assets
for the Company.
Recently, the term human capital has been gaining
attention. I fully agree with the notion that humanresources equal capital. I recognize that it is essential tograsp our company’s issues and challenges, and tohonestly disclose our efforts and results toward achieving
the ideal state and direction we are aiming for. To elevate
FEED ONE’s human capital, I feel it is the mission of theGeneral Manager of Administrative Unit not only tounderstand the needs of our employees, but also to
proactively provide opportunities for them.

Enhancing organizational strength anda focus on developing the next generationof leaders
Regarding talent development, we first conduct grouptraining for new employees, where they learn about thebusiness outline and roles of every department. After that,they undergo two weeks of sales training and lab training,
followed by a 7-month training program at the factory. Bylearning the fundamentals of manufacturing at the
beginning, they can acquire the knowledge needed to
become a full-fledged employee of an formula feed
company. After that, with an eye on medium to long-term
career development, we implement job rotation, allowing
employees to gain experience in multiple departments
during the early part of their careers.

For our mid-career employees, we offer positionbased training aimed at acquiring the skills necessary for
their roles. In addition, we also provide meticulous
educational and training programs, including themebased training on topics such as communication and IT
skills, as well as specialized sales training to meetadvanced customer needs and legal training aimed atmaintaining the safety and reliability of our products. I
believe that these programs contribute to both fostering
employee motivation and gaining the trust of ourcustomers.
One of the key themes we focus on in our talentstrategy is the development of the next generation ofleaders. Being an executive in a company listed on thePrime Market requires strong senses of moral and ethics
as a major premise. But I also believe that qualities suchas foresight, a willingness to take on new challenges, andthe ability to empathize with their subordinates are
essential for leaders. I feel it’s a critical responsibility of the
management team to strategically place talent andnurture future leaders within the company.

I strongly believe that we need to continually review
and update our policies in a flexible way, in response toboth shifts in the perspectives of the younger generation
as well as other changes in the external environment. I
aim to fine-tune our systems by maintaining open
communication, to ensure that our employees cancontinually perform at their best.
Number of paid leave days taken per employee:(days)
16.0
12.0
8.0

10.1
8.0

11.4

11.2

FY2019FY2020

12.3

14.0

7.3

4.0
0
FY2016FY2017FY2018FY2021

FY2022Average overtime working hours per month

Enhancing engagement throughsupporting the performance and growth of
our employees(hours)16.0

For FY2023, in response to inflation, we implemented thefirst base pay increase since our foundation, resulting in
an approximate 6.8% raise for union members whencombined with regular pay increases. This increase washigher than that requested by the labor union,
implemented out of strong management intent to create
an environment where all our employees can live
comfortably.
We’re committed to providing a comfortable work
environment through measures such as improving paid
leave utilization rates, reducing overtime, as well as
implementing flexible working arrangements and remote
work options for employees with children. I feel that these
efforts are gradually beginning to yield results.
I believe that a balanced approach to work, along withfulfilling time off, contributes to enhanced job
performance.
When it comes to initiatives for promoting active
participation of female staff, we have significantly revised
our hiring policies and other company programs. In
FY2022, our ratio of female full-time employees increased
to 20%. The ratio of female staff taking childcare leaveremains at 100%, while for male staff it has increased
from 13.3% in the previous year to 34.8%. We have also
introduced new programs such as the pair transfer
system, which allows employees who marry within the
Company to work in the same area, as well as the life
event system, which exempts employees from relocation
for a certain period without needing to provide a specificreason. We’re committed to valuing the diversity of ouremployees while ensuring a comfortable work
environment for the long term.

8.0

12.0

12.8
10.5

10.6

8.9
6.9

6.8

6.7

FY2020

FY2021

FY20224.0
0FY2016FY2017FY2018FY2019Childcare leave uptake
Female

(%)
100
75

100

100

100

100

100

100

50

100

34.8

25
0

Male

13.3
0

0

0

0

0

FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

Enabling each and every employee to workwith a sense of fulfillment and pride
FEED ONE is engaged in a business with high social
significance. I believe it is the role of management toensure that, while solving social issues, each and every
employee is able to continually carry out their work with asense of fulfillment and pride.
As the biggest fan of our employees, the entire
Administrative Unit is committed to working together with
one another to build an attractive company.

Integrated Report 2023

14

FEED ONE’s Strategy

About FEED ONE

FEED ONE’s Strategy

Sustainability Management

Data Section

P01-08

P09-30

P31-56

P57-66

Value Creation Process
Business Model

Output/Outcome
Value Creation

4

Climate changeOn

Declining birthrate and aging
population

Procurement
capability

Measures to protect
biodiversity

Respect for human rights
Enhancement of diversity

Business Environment
Increasing geopolitical risks

Changing eating styles

Manufacturing
capability

Prospering inharmony withsociety

Diversifying consumer needs

Compliance

Number of employees(consolidated): 910

Number of researchbases: 4
Number of patents
held: 16

Financial capital

Risk
Management

Total assets:127,913 million yen
ROE: 2.3%
Net assets: 45,314 million yen

Feed manufacturing bases of the Group: 14 factories
Food processing bases of the Group: 11 factories
Farms of the Group: 4 farms
Aquaculture bases of the Group: 2 bases
Capital expenditure: 2,103 million yen

Contribute tosociety through businessSocial and related
capitalShareholders
Local communities
Suppliers/partner companies
Distributors/customers

Create a comfortable
work environment

Offer safe andreliable food products

External Capital
Manufacturing capital

Ordinary profit

Group-wide targets

Quality Philosophy

Employee
Code of
Conduct

Pursue the sustainability of
the global environment

6,200 million yen

Management Foundation

Internal CapitalIntellectual capital

Food Business

Overseas
Businesses

ESG Philosophy

Sales volume

3.78 million metric tons

Sales
capability

Corporate
Governance

Human capital(Targets for the fiscal year
ending March 31, 2024)

Management
Philosophy Talent

Outbreak of infectious
diseases in livestock

Post-COVID society

Aquatic Feed

R&D
capability

Creating
attractive
workplaces

Strengtheningof governance

Third Medium-Term
Management Plan

Enhance corporate value
through sustainable growthkConservation of resources

3

MaChanges in the structure ofhouseholds

Solvingenvironmental
issues throughbusiness

wer
Po
e's

Declining domestic
population

Animal Feed

e
a
l
p
e
! 20
h
t
e
2

Material issues

s
esse
sin
Bu

Social Issues

Natural capital
Energy/water resources

Bringing reliable food and the enjoyment of eating every day

External Environment(Fiscal year ended March 31, 2023)

15

FEED ONE Integrated Report 2023

Integrated Report 2023

16

FEED ONE’s Strategy

Business Vision

About FEED ONE

FEED ONE’s Strategy

Sustainability Management

Data Section

P01-08

P09-30

P31-56

P57-66

Quantitative Plan (Consolidated)

A leading company that contributes to the sustainable growth of the entire
industry as the strongest partner for our customers
We are focusing on four main revenue-generating pillars: animal feed business,aquatic feed business, the food business, and the overseas businesses. With
this approach, starting from our year of integration in FY2015, we aim to
expand profits and establish a value chain with the animal feed business at its
core over a 10-year period, enabling us to achieve sustainable growth andincrease corporate value.

(Million yen)

Ordinary profit

6,000

5,737

5,000

6,081

4,000

3,473

0

5,400

(Thousand metric tons)

4,000
3,800

(Results)

Aquatic feed

3,580

3,582

3,600

FY2019FY2020

FY2021

3,600

3,780

3,700

3,400
0

FY2018(Results)(Results)

FY2022(Planned)

Second Medium-Term Management Plan

Food

6,200

5,800

4,466

3,000

Overseas

Sales volume(Planned)

FY2023(Planned)

Third Medium-Term Management Plan

FY2022 Progress and Issues in Relation to the Basic Strategies

Food
Livestockfarm

Aquatic feed

Value chain

Livestockfarm

The fiscal year ended in March 31, 2023, which marks the second year of the Third Medium-Term Management Plan, faced
significant challenges in terms of profitability due to major changes in the international landscape and historically high raw
material costs. However, we have steadily moved forward in implementing our various strategies.

Value chain
Specific strategies

Animal feed
Animal feed

Further strengthen the profitability of Animal Feed, our core business

Revenue expansion
Other

The animal feed business, theaquatic feed business, the foodbusiness, and overseas
businesses will serve as fourpillars of profitability

Other

FY2015, the first yearof our integrationRole & Basic Policy

fully utilizing the business

GrowthPlan is to increase profits by

Basic Policies

Putting the Finishing Touches on Business Integration—To Become a True Leading Company!—

platform strengthened in thebuild a further foundation to

FY

FY

2015
First Medium-Term Management Plan

Basicstrategies

Develop and expand sales of sustainable feed
Expand of sales of feed for juvenile fish, suchas Ambrose

Aimed for the early launch of fish meal-free feed (scheduled for August 2023)
Achieved a 123.6% year-on-year increase in sales volume of feed for juvenile fish
Made efforts to increase exports to the Asia region, in addition to expanding domestic sales

Food
Business

Build a foundation for sales of consumer
goods that are less affected by market
fluctuations

Achieved over 20 product lines in the consumer goods range
Achieved 2.1 times increase in net sales compared to the fiscal year ended March 2021
Leveraged the advantages of having production bases in consumption areas

Overseas
Businesses

Proactively expand into rapidly growing Asianmarkets leveraging “Japanese Quality” as ourstrength

Introduced Vietnam’s first cow milk substitute production facility, following
the establishment of a flake feed production facility during the previous year
Considering a supply base in the northern region of Vietnam to enable further sales expansion

Promote ESG management and strengthen business platform

Declared our support for the recommendations of the Task Force on Climate-related
Financial Disclosures (TCFD) (April 2022) and disclosed our TCFD Report (June 2022)
Installed LNG-based cogeneration systems at the Kitakyushu Animal Feed
Factory and Kitakyushu Aquatic Feed Factory (November 2022)
Created Health and Productivity Management Strategy Map
Adopted the healthcare management app “WellGo”

Respond to climate change
Address human rights

Proactively invest in human capital

2023

2018

enable sustainable growth.

Aquatic
Feed

FY

2020

Management Plan, and to

FEED ONE Integrated Report 2023

Make the leap!

FY

Second Medium-Term

17

Expanded our flake feed production line at two bases in Hokkaido(established a system to increase production by 10%)
Established a new facility for the production of cow milk substitute atTomakomai Feed Co., Ltd (January 2023)
Improvement of genome analysis, feed provision and farm environment
Progress toward further expanding cattle feed quantities through a combination of equipment and services

Accelerate growth of Aquatic Feed, Food Business, and Overseas Businesses

The Third Medium-Term Management Plan: Make the leap! 2023

Medium-Term Management

Expand sales of cattle feed
Expand our total consulting services to support
customers’ management

FY2024

Medium-Term Management Plan

The role of the Third

Progress

1 Further strengthen the profitability of Animal Feed, which is our core business
2 Accelerate growth of Aquatic Feed, Food Business, and Overseas Businesses
3 Promote ESG management and strengthen business platform

Second Medium-Term Management Plan Third Medium-Term Management Plan

Business Plan for Fiscal Year Ending March 31, 2024
Sales volume for the fiscal year ending
March 31, 2024 is expected to be 3,617
thousand metric tons for animal feed and
104 thousand metric tons for aquaticfeed. While the future outlook remains
uncertain, in this fiscal year, we aim tobecome a true leading company throughsteadily implementing our fundamental
strategy as the final year of the Mediumterm Management Plan.

(Thousand metric tons)

Sales volume(Million yen, %)Sales
Cost of sales

2023.33,687

2024.33,721

2023.3 Composition
307,911 100.0

2024.3 Composition
323,000 100.0

YoY

285,218

92.6

296,800

91.9

+4.1

+4.9

22,693

7.4

26,200

8.1+15.5

21,2706.9

22,700

7.0+6.7

Operating profit

1,422

0.5

3,500

1.1

+146.0Ordinary profit

1,711

0.6

3,500

1.1

+104.5

Profit attributable to owners of parent

1,030

0.3

2,300

0.7

+123.1Gross profit
SG&A expenses

Integrated Report 2023

18

FEED ONE’s Strategy

About FEED ONE

FEED ONE’s Strategy

Sustainability Management

Data Section

P01-08

P09-30

P31-56

P57-66

Business Strategy

Animal Feed

Aquatic Feed

Officer, Deputy Chief Operating Officer, Animal Feed Business Unit,
Kazuhiko Kumagai Executive
and General Manager, Animal Feed Division

Business Vision

Business Vision

Due to the prolonged conflict between Russia and Ukraine, livestock production is in a difficult situation resulting from thesoaring prices of raw materials for feed, fuel, and other resources.
We will be unrestrained by fixed ideas and continue taking on the challenge of value creation, contribute to theimprovement of farmers’ business management, and provide feeds that help improve production efficiency and profit margins.
We are constantly striving for technological innovation by incorporating the latest nutritional theories from our overseas
partnership system.
We are also pursuing the SDGs, taking action to accomplish the twin goals of reducing environmental impact andimproving productivity. Specifically, we will strengthen our efforts to create feeds that reduce methane emissions from cattle
and phosphorous and nitrogen excretions from poultry and swine.
We will contribute to the sustainable development of livestock production using formula feed by strengthening
comprehensive sales support, including feed management, disease control services, and the provision of the latest
information, so that customers can operate their livestock businesses in a manner they desire.

Fish meal accounts for about 40% of all raw materials for aquatic formula feeds, which support the production of farmed
fish in Japan. Most of the fish meal is made from wild-caught fish that were conventionally considered unsuitable forhuman consumption. Amid growing concerns about the “protein crisis,” wild-caught fish, used as raw materials for fish
meal, may be diverted for human consumption. We will develop sustainable and high-quality formula feeds that are notdependent on fish meal, and will also strive to ensure a stable supply of formula feeds. Further, we will propose the best
possible way of feeding that unlocks the full potential of formula feeds. We will also make efforts to preserve theenvironment of fishing grounds by reducing the emissions of phosphorus, nitrogen, and other substances, thereby
supporting our customers in operating their business.
We will contribute to the development of the aquaculture industry by developing, producing, and selling safe andsecure formula feeds catering to the needs of customers.

Business Overview and Strengths

Surrounding Environment
Increasing importance of environmental conservation and
SDGs
Diversification and increasing scale of domestic salmon
farming business
Increasing importance of artificially hatched larvae

In FY2022, for our efforts to develop feed that is notdependent on natural resources, we succeeded indeveloping a high-performance fish meal-free feed forred sea bream. We are on track to become a pioneer in
the industry for the commercialization of a fish meal-free
feed that outperforms high fish meal feed. We also
explored the potential for aquaculture technology
innovation to contribute to the achievement of the SDGs
and the improvement of production efficiency, and tothat end, we actively collaborated with entities in othersectors. Such collaborations are enabling us to graduallyobtain new insights.

Challenges

Launch innovative new products incorporating the latest nutritional
theories through strengthened overseas partnerships
Speed up IoT and DX technology initiatives (assign dedicated DX
division personnel)
Promote efficiency and visualization of sales structure (sales
structure evolution)

A broad network of factories designed to produce feeds invarious forms
Research facilities that can conduct feeding trials
expeditiously
Distribution structure for farmed fish that is directly
connected with producers

Achievements and Challenges in FY2022

Achievements

FEED ONE Integrated Report 2023

Strategy

Risks

Risks

Soaring prices of raw materials for feed, fuel, and otherresources due to the prolonged conflict in Ukraine
Decrease in the number of animals raised due to the spreadof infectious diseases such as AI (avian influenza) and CSF(classical swine fever)Changes in legal systems regarding animal welfare, etc.
(higher production costs)
Soaring prices of raw materials for feed and other resources andthe declining productivity of livestock farming due to global warming

Contribute to the improvement of farmers’
business management by proposing productdevelopment and feed management technologies
to improve productivity while feed prices remain
highStrengthen efforts towards logistics efficiency
enhancements to address logistics challenges in
2024 (tank level monitoring systems, restructuringof regional distribution systems, etc.)

We produce nearly 100,000 metric tons of aquatic formula
feeds per year at the Kitakyushu Aquatic Feed Factory andother factories, distributing feed to every corner of Japan, from
Hokkaido to Okinawa. We also export high-quality feed forjuvenile fish. In addition, a specialist department for distributing
marine products also handles farmed fish. Nanyo Gyogyo Co.,
Ltd. and Kyokuyo Feed One Marine Co., Ltd., affiliatedcompanies of the Company, produce fully farmed Pacificbluefin tuna, demonstrating the fruits of their many years of
bluefin tuna research.

Opportunities

Opportunities

Need for products that are aligned with the SDGs (ecofriendly)
Need for smart livestock-rearing technology (IoT and DX, etc.)
Ensuring animal welfare

Although approximately 17.71 million chickens were
culled nationwide due to an outbreak of AI (avian
influenza), our sales volume exceeded that of theprevious year (up 2% from FY2021).
In FY2023, the final year of the Third Medium-Term
Management Plan, we aim for sales volume of
approximately 3,620,000 metric tons (up 0.9% fromFY2022).

Business Overview and Strengths

Strengths

Surrounding Environment

Challenges

Strengths

Supply products stably from strengthened production
foundation
Launch products with patented technologies (pending), suchas Nori Nori Pork (a feed for improving thin-fat pork)
Facilitate the spreading of advanced technologies such as
genome and raw milk fatty acid analyses (customer service)
Regularly obtain the latest information on livestock nutrition
and feed management technology from overseas

Achievements and Challenges in FY2022
Achievements

We operate seven business divisions nationwide, and ourmanufacturing and sales activities are fully integrated. We
satisfy customers’ needs in a highly customized andexpeditious manner from eight branch offices across Japan.
We also operate 14 factories nationwide (including
joint-venture factories), producing and selling approximately
3,500,000 metric tons of animal feed per year. In FY2022,
Tomakomai Feed Co., Ltd. began producing cattle milk
replacer. Well-suited to meet needs in Hokkaido, the cattle
milk replacer has been well received.

19

Hiroshi Yamagami Senior Executive Officer, General Manager, Aquatic Feed Division

With the unprecedented deterioration of the raw material
situation becoming more pronounced, raw materials foraquatic feed are in the worst state, not only in terms ofsoaring prices but also in terms of unstable supply. We
will make every effort to quickly rebuild a stableproduction and supply system with new profitable raw
materials, breaking away from the conventional formula
design that is dependent on natural resources.

Strategy
Bring products to market that are the number-one for quality
Establish an optimal supply structure
Fully leverage marine product distribution functions
Develop feed that is not dependent on natural resources
Pursue aquaculture technology innovation (collaboration with othersectors)

Soaring prices and unstable supply of raw materials
Unstable supply (collection) of wild-caught fish eggs

Integrated Report 2023

20

FEED ONE’s Strategy

About FEED ONE

FEED ONE’s Strategy

Sustainability Management

Data Section

P01-08

P09-30

P31-56

P57-66

Business Strategy

Overseas
Businesses

Food Business
Mineyuki Nitta General Manager, Foods & Retail Business Division

Shozo Ota General Manager, Overseas Business Department

Business Vision

Business Vision
While it is difficult to expect market expansion in Japan, the population of Asia and the world as a whole is growing, andmany countries are experiencing significant economic growth. The demand for food, and especially for protein, is steadilyon the rise in the global market, and expectations placed on formula feed manufacturers who supply ingredients therefor
are growing year by year.
In addition to our core business of feed manufacturing, our involvement in the distribution and processing of animal
and aquatic products is also one of our strengths. Our policy is to contribute to the world’s food supply by developing ouranimal and aquatic-related businesses globally, not limiting ourselves to feeds, and then incorporating their growth andresponding to the increasing demand for protein with our technological expertise.

As a leading supplier of formula feed, we contribute to building an affluent and healthy society by making maximum
effective use of our know-how in livestock farming and ensuring a stable supply of protein-based food products incollaboration with farmers. In addition, we will deliver not only delicious but also safe and secure food to consumers sothey can enjoy meals that bring both physical and mental wellbeing. To this end, we will build an integrated food value
chain spanning everything from production farms to processing, distribution, and sale of products.

Business Overview and Strengths

For pork and eggs, which account for 90% of the
products we handle, the market environment was
extremely volatile, and the high market prices continued
throughout the year, resulting in a challenging profit
environment. We will continue to improve our profit
structure to reduce the burden of market risks bypromoting thorough condition revisions and increasing
the sales proportion of processed and value-added
products, which are less affected by market fluctuations.
We are in the process of expanding our production
capacity for processed and value-added products, aswell as updating the facilities of each company, and areconsidering investment plans for the construction of a
new factory and enhancement of production lines.

Strengths

Surrounding Environment
Opportunities

Surrounding Environment
Strategy

FEED ONE Integrated Report 2023

Expand and renovate production facilities to make them ecofriendly and capable of utilizing resources effectively, and increase
the volume of supply from these facilities
Upgrade processed products and develop more products that areeasier to use
Decarbonize the food supply chain in a way that only feed
manufacturers canEnsure the welfare of animals at Group farms

VietnamIndia

Vietnam

Risks

Opportunities and Risks

21

Obtaining international certifications that require higher
levels of food safety (FSSC and SQF)
Pursuing ESG/SDGs management (e.g., food recycling, local
production and local consumption)
Ensuring animal welfare
Enhanced traceability, automation, and labor-saving by
pursuing DX

Production management framework that can meet local
needs and assure Japanese quality
Formula design technology that makes the most of diverse
local profitable raw materials
Utilization of a global network

India

India

Increased demand for dairy products due to thewesternization of diets and the accompanying
expansion of domestic dairy production
Positioned as a protein supplying country for the
global market with a focus on prawns
Loss of feed demand due to a decrease in thenumber of animals raised resulting from livestock
disease outbreaks and farmers’ postponing
livestock introductions
Decrease in the number of farmed prawns and thedemand for feed, triggered by shrinking demandfor eating out in major export destinations ofprawnsHeat waves, monsoons, and other adverse effects
on aquaculture due to abnormal weather conditions

In Vietnam, profitability improved significantly by
expanding sales of highly profitable brands, reducing
production costs, and appropriately transferring higher
raw material costs to sales prices, resulting in an
approximately 250 million yen profit increase year-onyear and the record-high profit.
In India, we have strengthened profitability by
improving production efficiency and quality as wells as
by improving capital efficiency through optimizing
inventories. The company achieved a profit for thesecond time on a yearly basis since its foundation.

Challenges

In Vietnam, we established Kyodo Sojitz Feed Co., Ltd. jointlywith the Japanese general trading company Sojitz Corporationin 2011 to produce and sell animal feed, mainly for chickens,pigs, and cattle.
In India, we established Nippai Shalimar Feeds, a joint
venture company with the local broiler integrator ShalimarGroup, in 2014. The company is engaged in the aquatic feedbusiness for prawns and fish.

Achievements and Challenges in FY2022

Achievements

Partly due to the changing needs of customers from the
COVID-19 pandemic, the development of chilled andfrozen food products, such as barbeque meats in thesummer and hot pot meats in the winter, has
accelerated, and we now offer a lineup of more than 20
processed food items. As a result, sales of processed
foods have grown 2.1 times in two years. We willcontinue to develop and offer new products that meetcustomer needs to further strengthen and expand our
profit base.

Challenges

Strengths

Safe and secure foods that only feed manufacturers candeliver
Supply products finely tailored to the needs of consumers asa packer with manufacturing bases in the areas ofconsumption
Develop high-quality specialty products in collaboration with
farmers

Business Overview and Strengths

Achievements

Sales from the food business amount to approximately 41.3
billion yen per year, accounting for around 13% of FEED ONE’s
overall sales. We produce and distribute products that meetthe needs of consumers across Japan, with affiliatedcompanies nationwide, which include food processing
companies (Feed One Foods Co., Ltd. and Yokohama MeatCo., Ltd.) and poultry and egg processing and distribution
companies (Gold Egg Corp., Magic Pearl Co., Ltd.). We also
produce safe and secure pork, sows, and eggs at the Group’s
farms (Nambu Farm Co., Ltd., Daiichi Genshu Farm Co., Ltd.,
Mihono Pork Co., Ltd., and Green Farm Sogo Co., Ltd.) incooperation with our animal feed business.

Achievements and Challenges in FY2022

Regarding our Vietnam business, we are facing thechallenge of securing a new manufacturing base inorder to further expand our profit base. We are currently
exploring various possibilities, such as entering into a
production outsourcing contract, selecting an optimal
production location, or acquiring an existing factory.
In our India business, since shipping volume
fluctuates greatly due to weather, the global commercial
environment, seasonality, and other factors, werecognize that pursuing even higher quality andacquiring core demand are our challenges. We aresending our technicians on more frequent business trips
and working to improve quality.

Strategy
VietnamFurther strengthen profitability by optimizing productquality and production costs
Further expand sales volume and profit base by
securing new manufacturing bases
Recruit and train local staff capable of providing guidanceon feed management technology in cattle feed sales

India

Differentiate from competitors by leveraging thoroughproduction cost reduction and quality improvement
tailored to local needs

New
Businesses

Establish new overseas operating companies inbusiness fields where synergies can be generated withexisting overseas operating companies

Integrated Report 2023

22

FEED ONE’s Strategy

About FEED ONE

FEED ONE’s Strategy

Sustainability Management

Data Section

P01-08

P09-30

P31-56

P57-66

Global Strategy
What growth scheme isyour overseas business isaiming for?

Shozo Ota
General Manager,
Overseas Business Department

Leveraging the strengths that the Group has
cultivated over the years, we aim to seize global
qualitative and quantitative growth opportunities byaddressing the issue of worldwide protein supply,
thereby creating a sizeable profit base.
What are some of thechallenges you face in youroverseas business?
In the Third Medium-Term Management Plan, “Make theleap! 2023,” we have positioned our overseas businessas a pillar of earnings next to animal feed, aquatic feed,
and food business. At present, our overseas business is
steadily increasing its presence, even though it has not
yet reached our targets for scale and profitability.
The Vietnam business, now in its 12th year, is steadily
gaining strength by capturing the country’s economic
growth, and the India business is gradually improving its

23

FEED ONE Integrated Report 2023

profitability, having recorded a profit on an annual basis
for the second time last fiscal year. However, based on
current results alone, we believe it will be difficult todevelop this business into an earnings pillar during thenext mid-term management plan period as we aim for.
Therefore, in addition to strengthening our existing
businesses, it is essential that we acquire a foundation for
new businesses. In order to develop new overseas
businesses, we recognize following issues as significant
challenges: understanding global protein supply issues;
redefining our strengths to make full use of them; andexpanding the pool of human resources to promote
overseas businesses. We are in the process of developing
various measures to address these challenges.

The Overseas Business Department operates two bases:
Kyodo Sojitz Feed Co., Ltd. in Long An Province,
Vietnam, established in August 2011, and Nippai Shalimar
Feeds Private Limited (Japan–India joint venture) in West
Bengal, India, established in March 2014.
In Vietnam, the company produces and sells animal
feed. It has been highly acclaimed for its Japanese quality,
advanced Japanese-style production management andquality standards, and marketing style tailored to the local
market, and in the past few years, it has finally turned to
profit. For the fiscal year ended March 31, 2023, itrecorded its record-high profit, with a 250 million yen
increase year-on-year.
In India, the company is engaged in the production
and sale of feed for Indian major carp and Pacific white
shrimp.
Going forward, we will expand our profit base,leveraging quantitative and geographical expansion by
securing a new manufacturing base in our Vietnam
business, which is steadily strengthening its profitability.
We will develop new businesses with a focus on synergy
with existing businesses. We will proceed with thedevelopment of new businesses and the selection ofpotential locations for expansion with a focus on
Southeast Asia, where growth is continuing, without
limiting to existing business regions. This is not limited tothe horizontal development of animal feed production andsales but also includes provision of the technologies andfunctions that the Group has developed in Japan, suchas consulting and technology to support local customers’
livestock businesses and the entire value chain. We hopeto thus solve problems faced by the region, andeventually link this to earnings. We have alreadyestablished a task force in October 2022 to begin
considering potential projects. In the fiscal year ending
March 31, 2024, we will be making preparations todevelop specific projects based on these concepts. In
addition, we intend to actively appoint overseas personnel
who have been trained through the Group’s overseas
trainee program as personnel for these new businesses.

our strengths in many regions and taking action to solve
issues in global protein supply, such as proposing factory
facility improvements and feed quality improvements forpoultry farming integration in Morocco and outsourcing
work related to feeding technology in our dairy farming
business in Indonesia.
We will continue to utilize the overseas trainee
program promoted by the Group, to dispatch trainees totarget regions where there is a large gap between the
future expansion of demand for protein and the supply ofanimal and aquatic products and feeds, in addition toVietnam and India, where we have existing overseas
business locations. We will conduct on-site surveys toaccurately understand the issues facing the region and tobuild new businesses that will contribute to solving theseissues by leveraging our strengths. It our policy to have
the Overseas Business Department support the trainee
program, to build business based on the results of the
training, and through the process, to realize theenhancement of the pool of our overseas humanresources.
In addition, for regions such as North America andEurope, the Animal Feed Division has been collaborating
through technical exchanges of its advanced
technologies, and we expect to utilize these relationships
to make a significant contribution to the global strategy of
the Group.
When the New Business Development Task Force of
the Overseas Business Department started considering
potential businesses, we first discussed what we could
do and what we wanted to do, without considering
feasibility. From there, we narrowed it down to the work
each of us truly wanted to do. These discussions fosteredan environment in which each staff member took initiative
to move forward with the projects for which he or she
was responsible. With a determination to createbusinesses and expand overseas, we believe that ourteam members who have shown growth will help us
achieve our overseas business goals.

What global strategy is theFeed One Group pursuing?
The Overseas Business Department effectively utilizes theFeed One Group’s relationships in all directions to improvebusiness quality through practical overseas humanresource development and to achieve dramatic growththrough new business development.
To date, through opportunities to collaborate withstakeholders in businesses in which we do not have a
stake, the Group has accumulated knowledge by utilizing

Integrated Report 2023

24

FEED ONE’s Strategy

About FEED ONE

FEED ONE’s Strategy

Sustainability Management

Data Section

P01-08

P09-30

P31-56

P57-66

Financial Strategy and Capital Policy
material for the livestock and fish farming industries, profit
margins are not particularly high. However, the structureof the business is not overly weighted toward a particulartarget animal (cattle, pigs, chickens, fish, etc.) or aparticular customer, and we have established a wide
network of production sites comprising 14 factories
across Japan, thereby diversifying business risks.

Please explain the main points ofyour financial strategy based on
the business environment in thefiscal year ended March 31, 2023.

Koji Mochizuki
General Manager,
Finance & Accounting Division

We will establish a presence fitting of a leading
company and pursue sustainable growth byenhancing financial soundness and promoting
group-wide business management.
Please tell us about FEED
ONE’s strengths and issues.
The animal feed industry depends on imported grains forabout 80% of the ingredients that go into feed. This
makes the price highly volatile as it can be impacted by
not only changes in overseas market prices of grain, butalso factors such as changes in foreign exchange rates
and ocean freight rates. This is the reason prices in theJapanese animal feed industry are revised every quarter
based on changes in the prices of ingredients. Our animal
feed business accounts for almost 80% of the Company’s
net sales. Therefore, one of our biggest characteristics isthat net sales, our top line, do not serve as an indicator
for judgements regarding the growth of the business, as
they can fluctuate in accordance with price revisions.

25

FEED ONE Integrated Report 2023

Price revisions are affected by the trends in competingcompanies, so sometimes there is a discrepancy between
the amount that we revise prices and the amount ofchange in raw material prices, but from a long-term
perspective, we always maintain a certain level of grossprofit. However, if reserve contributions to the Formula
Feed Price Stabilization System (see p. 6) increased due
to a sudden rise in the price of imported grain, it would
have a considerable impact on operating profit. While westrive to maintain stable profits by revising sales prices inline with rises in raw material prices, this also increases
working capital. This means we will also face the risk ofincreased borrowings, which in turn leads to a downturnin our equity ratio.
Another characteristic of the Company is thediversification of our business risks. Formula feed
production is a primary industry. As feed is a production

In the first quarter of the fiscal year ended March 31,
2023, we recorded our first quarterly operating loss since
the business integration, which was a turbulent start tothe year, but we were able to end the year in the blackwith an ordinary profit of 1.7 billion yen.
In the feed business, raw material prices soared as
the market price of imported grain rose due to factors
including the outbreak of conflict between Russia andUkraine in February 2022, and the rapid depreciation ofyen, mainly due to the gap between interest rates in the
US and Japan. In the first quarter, the increase in raw
material prices was so rapid it outpaced sales pricerevisions, but from the second quarter onward, we wereable to adjust sales prices in line with changes in raw
material prices. This meant we were able to maintainannual gross profit at around the same level as theprevious fiscal year. However, reserve contributions to the
Formula Feed Price Stabilization System also increased
due to the rising prices of imported materials, so
operating profit in the feed business decreased by 2.6
billion yen year-on-year to 3.9 billion yen.
In the food business, factors such as bird flu andswine fever put a strain on supplies, leading to higher
prices. Furthermore, as sales prices to customers suchas volume retailers were not revised, the food businessrecorded an operating loss of 300 million yen, its second
consecutive year of operating loss.
Our cash conversion cycle (the number of days it
takes to collect trade receivables after trade payables arepaid) is about one and a half months, so in the fiscal year
ended March 31, 2023, the steep rise in raw material
prices led to a sudden increase in working capital. This
resulted in increases in interest-bearing liabilities of 65%
and total assets of 18% year on year. We procure ourworking capital through loans from financial institutions
and in August, we became the first feed producer toprocure a total of 10 billion yen through long-termsustainability linked loans. Furthermore, in considerationof the uncertain outlook regarding the external
environment, we have also moved to improve our financial
soundness by accumulating cash and deposits andsecuring 10 billion yen in commitment line agreements.

Please share your financial
strategy for realizing sustainablegrowth as a leading company.
The fiscal year ending March 31, 2024 will be the final
year of our Third Medium-Term Management Plan and an
important year leading to our next Medium-termManagement Plan.
In the Finance & Accounting Division, we haveidentified three challenges to be addressed as a division
supporting the continued existence and development of
the Company.
The first of these is to further enhance financial
soundness. We recognize that we are in a period of
VUCA (Volatility, Uncertainty, Complexity, and Ambiguity)where the outlook on factors such as grain markets,
exchange rates, and interest rates is difficult to forecast.
We will focus on anticipating all kinds of risk and building
schemes for avoiding each risk, particularly by securingliquidity on hand. In June 2023, we procured a total of 3
billion yen in long-term borrowings in order to ensurestable working capital.
The next challenge is to promote group-wide business
management. Our Group has 20 subsidiaries withdiffering business descriptions and establishment
histories, and each of these companies operates
independently. We will work to strengthen group
governance through operational reforms by integrating
back-office operations and outsourcing part of them,drawing on accounting systems and other digital tools.
The third challenge is to enhance value as a company
listed on the Prime Market. Going forward, we will include
financial indicators that are conscious of capital cost,such as ROIC (return on invested capital), in our KPIs as
we explore new ways to evaluate businesses. The
Finance & Accounting Division will also support efforts torealize sustainable growth and to enhance corporate
value in a way that is suitable for a leading company byactively disclosing non-financial information, such asmeasures to address environmental issues throughformula feed and human capital initiatives.
In order to realize sustainable growth, it will beessential to invest capital into our factories, particularly byintroducing environmentally-friendly equipment.
Furthermore, we will also need to strengthen our overseas
business and to consider the acquisition of new
businesses through M&A, and we recognize that raisingfund for this is the key mission of the Finance &Accounting Division. Although the fund-raising andmanagement of tens of billions of yen is a big challenge,
we will tackle it as an opportunity to enhance corporate
value. By doing so, we intend to take on challenges witha forward-looking attitude to not only grow FEED ONE’s
share of the feed market, but also to ensure that we are
evaluated as a leading company in terms of finance.

Integrated Report 2023

26

FEED ONE’s Strategy

About FEED ONE

FEED ONE’s Strategy

Sustainability Management

Data Section

P01-08

P09-30

P31-56

P57-66

R&D Strategy

Yoshinao Tashiro

Hiroshi Yamagami

Director, Managing Executive Officer
General Manager, Animal Feed Business
Unit and in Charge of Research &Development Center

Senior Executive Officer, General
Manager, Aquatic Feed Division

We contribute to domestic
food security by creatinghigh value-added products
and technologies that
support livestock and dairy
farmers.

27

We will pursue the development,
production, and sales structure ofsustainable and high-quality formula
feed that contributes to theadvancement of the aquacultureindustry.

Could you please explain the structure
and activities of the research anddevelopment function that supports
the Animal Feed Business?

Could you tell us about thethemes you are currently
focused on and the direction of
for the future?

As Feed & Livestock Research Department, we haveestablished Poultry Section and Swine Section at the
Fukushima Research Center (in Ono Town, Fukushima
Prefecture), and Ruminant Section at the Iwaki ResearchCenter (in Iwaki City, Fukushima), where we conduct
experimental research on feed development for different
types of livestock. Additionally, at the research facilities in
our Quality Control Department at the Kashima ResearchCenter (in Kamisu City, Ibaraki Prefecture), we performchemical analyses and microbiological tests, the resultsof which are utilized for quality control throughout thecompany.
The primary objective of our research anddevelopment is to ensure the quality and safety of ourfeed, as well as to create novel and differentiatedproducts and technologies that meet the needs of
livestock and dairy farmers. In addition to feed, we also
develop various technologies, including genomic analysis,that contribute to improving the productivity of livestockand dairy farmers. This ability to provide value through“total support” is a unique strength of our company.
In the field of cattle farming, our achievements to dateinclude the development of FIBEGEAR DROP (Japan’s
first feed product designed specifically for automatic
milking system), the introduction of the first genomic
analysis technology for selecting highly productive
successor cattle in Japan, and the provision of a feed
design system that utilizes genomic analysis data to drawout genetic potential. In the area of pig farming, ourartificial milk Feed Care, which contributes to the stabledevelopment and health maintenance of piglets, hasreceived high acclaim. Most recently, we launched Nori
Nori Pork, a thin-fat control feed for meat pigs, in May
2023.

Our major challenges are improving feed efficiency andreducing environmental impact. We are aiming to achieveboth of these things.
Improving feed efficiency means aiming for higher
growth rates and production levels using less feed. We
are focusing on research into low-protein feed that
achieves efficient nutrient supply through available aminoacid design. In regard to reducing environmental impact,
there is a growing demand for sustainable livestock
farming through measures such as reducing thegreenhouse gases and nitrogenous wastes emitted bylivestock, as well as utilizing food waste. In particular,
since the methane gas emitted by cattle is significantly
affected by the feed they are given, we are advancing ourresearch in this area and focusing on the development offeed designed specifically to reduce methane emissions.
Additionally, in response to labor shortages within the
livestock industry, we have assigned dedicated staff tocommence our Livestock DX initiative, which promotes
the development of tools and the introduction oftechnology that utilize digital means, such as devices toreduce the workload at production sites and feed tankremaining amount management systems.
Going forward, we will be focusing on cultivating thetalent who will be responsible for next-generation
research and development, while striving to streamline
and accelerate development operations and enhance ofquality control. With a long-term perspective, we willcontinue to create high value-added formula feed that
supports livestock and dairy farmers, in order tocontribute to domestic food security.

FEED ONE Integrated Report 2023

Could you say a bit about thedevelopment themes of aquaticformula feed?
There are two development themes surrounding aquaticformula feeds that support the aquaculture industry,
against the backdrop of the protein crisis.
One is the reform of Japan’s aquaculture schemes toreplace low-cost proteins with high-cost proteins. Aquaticcompound feeds are manufactured using fishmeal as themain ingredient, which is made from low-cost fish thatwere previously not considered fit for human consumption.
Recently, due to several factors including a reevaluation ofthese fish as being in fact fit for human consumption, a
sharp decrease in catch due to resource depletion, as wellas increasing demand for fishmeal stemming from an
expansion in global demand for aquaculture, theinternational price of fishmeal has surged. Furthermore,from the perspective of the Sustainable Development
Goals (SDGs), the development of formula feeds that do
not rely on marine resources like fishmeal is becoming amatter of urgency, as it is anticipated that securing
fishmeal will become difficult due to growing demand forprotein ingredients internationally.
The other theme is the development of formula feeds
to address the advancements in full-cycle aquaculture
and artificially hatched larvae production technologies(breeding), which have been brought about by the
instability and extinction concerns around natural
resources. The production of fully-farmed Pacific bluefin
tuna has garnered attention; however, the production ofhatched larvae for aquaculture requires feed for thejuvenile fish stage immediately after hatching that isextremely high-performing in terms of feeding habits andnutrition. The development of feeds for juvenile fish is very
challenging and is drawing attention as a key point toevaluate the technological level of different companies.
At FEED ONE, our sales department, research
department, and raw materials department are all working
together on developments related to this theme.

Could you talk about FEED
ONE’s research anddevelopment achievements
and future initiatives?
The Group has concluded an initiative to develop feedthat resolves these two development themes. We havelaunched this product to high acclaim.
In terms of developing formula feeds that are notdependent on fish meal, we have launched low fish meal
feed for trout and sea bream, reducing the fish meal
content from 40% to between 10 and 20%. This has
been received positively by our customers. As the next
phase, we are advancing the development of fishmeal-free feeds that do not contain fish meal at all.
Having obtained favorable results in field tests, we plan tolaunch a new fish meal-free product for sea bream called
Madai DP Sustena ZERO in August 2023. With thisproduct, we aim to pioneer a new market in fish meal-free
feeds. Additionally, alongside developing the feed itself,
we are also actively engaged in developing aquaculture
techniques that include feeding methods, in order tomaximize the performance of the feed.
In regard to starter feeds for juvenile fish and prawns,
we have successfully developed high-quality productsthat surpass our competitors, to high acclaim. Although
the impact of feeds for juvenile fish and prawns on net
sales is small due to low absolute feeding volume, wevalue securing strong reputation in the starter feedmarket. Supplying excellent products for juvenile fishcontributes to the reliability evaluation of our technicalcapabilities and quality, including our manufacturingmethods. Going forward, we plan to develop our businesswith an eye on expanding exports of our highperformance products leveraging our cultivated technicalprowess to Asian region, which is set to grow, in addition
to the domestic market.

Integrated Report 2023

28

FEED ONE’s Strategy

About FEED ONE

FEED ONE’s Strategy

Sustainability Management

Data Section

P01-08

P09-30

P31-56

P57-66

Sustainability Policy
reducing environmental impact, it is also important toaddress the methane gas contained in cattle’s eructation.
It is said that it produces 4% of the world’s greenhousegases. We are selecting effective materials through ourunique measurement methods and conducting researchand development into technology that not only reduces
methane gas emissions from the eructation, but also
optimizes nutritional balance and improves digestibility.
We aim to balance environmental impact reduction withincreased production efficiency.
Moreover, in the area of aquaculture feed, as thedepletion of natural resources becomes increasingly
severe, we are among the first in the industry to focus on
the development of low-fish meal and fish meal-free
feeds. We are committed to reducing the amount of fishcaught and lessening the impact on marine ecosystems
by using alternative protein sources, such as insectbased raw materials, to replace fish meal. We believe that
this will not only facilitate a sustainable feed supply but
also contribute to the protection of marine resources.

Yutaka Nagoya
Senior Executive Officer, General
Manager, Corporate Planning &Strategy Division

Could you explain the progressthat has been made in tackling
the risks of climate change?

As a leading company in the feed industry, we will overcome
the present crisis and contribute to the sustainable
development of the livestock and fishery industries.
What are your thoughts on
the role that FEED ONE
plays in achieving asustainable society?
Before the global spread of COVID-19, the food supply
chain was relatively stable. However, the unexpectedcrisis revealed how fragile this supply chain actually is.
The rise in geopolitical risks has made commodity prices
and exchange rates extremely unstable, and fluctuations
continue to this day. In these unpredictable times, it isvery important to have a mindset of protecting oneself.
The rising cost of feed is often the sole focus within the
media. However, with the important role we play in thefood supply chain, we feed manufacturers are committed
to procuring competitively priced, profitable raw
materials from various domestic and international

29

FEED ONE Integrated Report 2023

sources, in order to protect the stable supply of food inJapan.
In addition to securing stable supplies of feed
ingredients, we are currently preoccupied in dealing withimmediate crises such as rising fuel costs and chroniclabor shortages—with little room to spare. However, totake a longer-term view, it is necessary to tackle current
issues in a way that doesn’t compromise what future
generations will need, while preserving the global andnatural environment appropriately.
As feed manufacturers, we are enhancing
environmental and social sustainability in resource
circulation. We do so by exploring options with lessenvironmental impact, including food by-products andresidues generated in the manufacturing process of foodproducers, and using these as raw materials. In addition,
we have recently been focusing on the development offeeds with low environmental impact that also reduce
phosphorus and waste excretion levels. In terms ofWe have set reduction targets to decrease CO2 emissionsin Scope 1 and Scope 2 by 50% from FY2020 levels by
FY2030, as well as achieving carbon neutrality by 2050.
(Refer to page 36, “Metrics and Targets”)
As reduction measures to achieve these goals, we areconsidering major investments into restructuring our
production systems (factories). However, we are initially
focusing on improving carbon intensity at each location
as well as implementing and upgrading energy-saving
equipment. Plans include switching from heavy oil boilers
to gas boilers and increasing boiler combustion efficiency
through the introduction of heat pumps. We are also
considering the installation of solar panels and biomass
generators that utilize factory waste. In particular, forbiomass power generation, we recognize the need to
explore from a broader perspective, including ways ofcollaborating with neighboring feed factories.
In addition to this, beyond reducing our own
emissions, such as the methane gas reductions I
mentioned earlier, we also aim to contribute togreenhouse gas reductions at the producer level throughour feed.
As a leading company in the feed industry listed on
the Tokyo Stock Exchange’s Prime Market, we are awareof our responsibility to take a leading role in contributing
to the industry’s efforts toward Environmental, Social andGovernance (ESG) management and the achievement of
the Sustainable Development Goals (SDGs). We intend to
pursue grounded, practical initiatives to fulfill this
responsibility.

Could you talk about thecurrent state of sustainability
awareness within the company
and the themes you will befocusing on going forward?
We have ongoing awareness-raising activities, with ESG
and SDGs initiatives being steadily instilled throughout theorganization. We hold an ESG committee meeting
quarterly, where each department shares the policies they
are pursuing and the progress being made. This way, we
are able to confirm that each department has a goodunderstanding of what they should be focusing on
currently, such as research and development ofsustainable feed, the introduction of energy-saving
equipment and various sensors, 5S activities in thefactories, as well as work-style reforms and the healthand productivity management.
In addition to existing initiatives, we have strengthened
our efforts regarding human rights since last year.
Recently, there has been increasing interest in corporate
initiatives related to human rights. Our commitment torespecting human rights and taking appropriate actions
leads to increased trust and transparency with our
stakeholders, which in turn enhances our brand value
and market competitiveness.
We have engaged human rights consultants andconducted lectures on the characteristics of human rights
risks highlighted by international organizations and NGOs.
This has heightened awareness of human rights within
the company. Following this, we began a process ofhuman rights due diligence and pinpointing key areas
with potential human rights risks. Through interviews withvarious departments, we have carried out assessmentson the significance of human rights risks that should beconsidered. In terms of “Severity” (the seriousness ofdamage to human rights if the risk materializes), we haveidentified risks of forced labor and child labor among raw
material suppliers. As for “Likelihood of Occurrence” (theease with which the risk can materialize), we haveidentified risks such as work safety within the company,
long working hours, and consumer safety.
As you know, our work is never finished when it
comes to human rights efforts; it’s an ongoing challengethat corporations should address by finding creative ways
to improve and mitigate the risks and issues they face. By
proactively addressing human rights, feed manufacturers
can positively impact the entire livestock and fisheryindustries, reducing human rights risks across the sector.
We have established a medium-to-long-term roadmap forhuman rights initiatives and are enhancing our training
programs to deepen understanding of human rights
issues within the company. Additionally, after
communicating our procurement policies to suppliers, we
aim to assess human rights risks within the supply chain
and steadily proceed with measures to mitigate them.

Integrated Report 2023

30

Sustainability Management

Efforts for ESG/SDGs

About FEED ONE

FEED ONE’s Strategy

Sustainability Management

Data Section

P01-08

P09-30

P31-56

P57-66

Material issues identified
Environment
Solvingenvironmental issues
through business

FEED ONE’s ESG Philosophy
Our business supports the food value chain centering on formula feed, which serves as the “source of deliciousness,” andit is based on blessings of nature and social infrastructure. We will strive to earn the trust of all stakeholders by fostering
harmony among humans, society and the environment while acting in accordance with our management philosophy andcode of conduct, and will contribute to the realization of a sustainable society as well.

Material issues

Creating
attractive
workplaces,
andprospering inharmony withsociety

We will strive to solve environmental issues through our business so as to have both the Company and society
grow sustainably. Such efforts include the proactive utilization of food by-products and food loss, the response
to climate change, and the conservation of resources.
SocialGovernance

Strengthening governance

We will strive to further strengthen our corporate governance and systems for governing the entire Company
and disclose information appropriately. That will ensure objectivity and transparency of management.
Board of Directors

Key initiatives for the Group’s targets for ESG/SDGs in FY2022

Executive Committee

ESG Committee

Company-wide RM meetings
Owner : Representative Director and President
Members: Directors, Executive Officers, andDepartment Heads

Chairperson : Representative Director andPresident
Members : Directors, Executive Officers, andDepartment Heads
Secretariat : Sustainability Promotion Department

RM Promotion TeamESG Administration Department
Administrative Unit

Quality Assurance
Division

Research &Development Center

Corporate Planning &Strategy Division

Food Service
Unit

Aquatic Feed
Division

Animal Feed
Business Unit

FEED ONE Group set up the ESG Committee topromote ESG/SDGs initiatives. The ESG Committee
considers and discusses the Group’s issues andmeasures related to ESG including climate-relatedrisks and opportunities and human capital. The
Committee has also set the Group’s targets for
ESG/SDGs linked with the Medium-termManagement Plan and business plan, provides
support and advice on the initiatives, and manages
their progress.
The Committee adopts a cross-organizational
structure chaired by the Representative Director andPresident, and persons responsible for each of thebusiness and administrative departments anddepartments reporting to the President are
appointed as members of the Committee. The
Board of Directors regularly receives reports fromthe ESG Committee on ESG/SDGs including
climate-related risks and opportunities and humancapital, and provides supervision and advice onsuch measures.

Creating attractive workplaces, and prospering in harmony with society

We endeavor to create attractive and meaningful workplaces where employees can have pride in the Company andexercise their abilities. Also, we will support the society by seeking to prosper in harmony with local communities, andproviding education and supports as well as making donations to contribute to the rich and varied diet of local people.

Strengthening
governance

Sustainability Promotion System

Solving environmental issues through business

Material issues
The Group has identified three material issues from the perspective of ESG management, which are important to thesociety and stakeholders and has a great impact on the Group’s business. We have also set the Group’s targets for ESG/
SDGs based on the business strategy of each department in the Medium-Term Management Plan as an embodiment of
the ideas of the material issues, and will work on the issues by linking them with SDGs, thereby aiming to achieve our
medium- to long-term targets and realize a sustainable society.

We have implemented the following initiatives in FY2022 and are steadily making progress to achieve the Group’s targets for
ESG/SDGs. ESG Committee manages the progress of initiatives, reviews them annually and revises them as necessary.
The Group’s targets for ESG/SDGs

Major relevant SDGs

FY2022 key initiatives

R&D of sustainable feed

Effective use of domestic byproducts materials
Effective use of food loss and building food recycling loops
Active use of domestic grain materials
R&D of phosphorus-reducing feed
R&D of feed which can reduce methane emitted by cattle’s eructation
R&D of manure-reducing feed to help reduce methane and nitrous oxide
emissions from livestock excreta

Reduce production cost and CO2 emissions by implementing
and using energy-saving equipment and various sensors
and by sourcing renewable energy

Implementation of LNG-based cogeneration systems
Implementation of boiler-pressure regulators (Bison Cyclone)
Installation of LED-lighting for factories

Reduce waste materials and industrial waste by promoting
5S activities

Reduction of rendering shipment volume
Reduction of food packaging materials (plastic usage of vacuum bag)

Develop and commercialize low fish meal and fish meal-freefeeds

R&D of fish meal-free feeds for red sea bream and rainbow trout
R&D of low fish meal feeds for yellowtail

Promote fully-farmed Pacific bluefin tuna business(development and use of feeds for Pacific bluefin tuna andrelated technologies)

Improvement in formula feeds for the production of hatched larvae andin-house production of enzyme treated fish meal
Development of technologies related to Pacific bluefin aquaculture business

Drive work-style reforms and health and productivity
management

Implemented the online application WellGo for health management
Rollout of online stretching lessons for the entire company
Recognition as an organization in the large enterprise category under the2023 Certified Health and Productivity Management Outstanding
Organizations Recognition Program

Work on initiatives for human rights

Trainings on human rights (Officers and Department Heads of Head Office)Identification of major human rights risks

Process of identifying material issues
Identification of social issues

STEP2

Assessment of importance
Assess the importance of the identified issues to the Company’s business and the society

STEP3

Selection of candidates for material issues
Select candidate items for material issues by verifying their appropriateness in considerationof the Company’s business policies

STEP4

Identification of material issues
Determine material issues at a meeting of the ESG Committee chaired by the Representative
Director and President and formulate measures to be taken

STEP5

Setting the Group’s targets for ESG/SDGs
Set the Group’s targets for ESG/SDGs based on the business strategy of each department in
the Medium-Term Management Plan as an embodiment of the ideas of the material issues.

31

FEED ONE Integrated Report 2023

Considerably highIdentify environmental and social issues of high relevance to the Group’s business activities

Importance to the society and stakeholders

STEP1

My

Material issues

SDGs Declaration

We share through in-house newsletters what we noticed in the course of implementing the My SDGs Declaration inorder to arouse the interest of every employee in ESG and SDGs and have them contribute to achieving the SDGs.

Adding kitchen waste compost to thesoil of my kitchen garden.
Assistant Section Chief ofHigh

Considerably highImportance to the GroupI declare...

Return food trays to therecycling box!

I declare...

Manager ofI will grow more flowers
to increase green plants.

re...
I declaDeputy Section Chief,

Shinya Murayama Aquatic Research Center

Moemi Nishikawa Minamikyushu Branch

Hirotaka Arai the Kitakyushu Animal Feed Factory

I add kitchen waste to the soil of
my kitchen garden, and growonions and potatoes.
What used to be disposed can be used as valuable
resources.

I cook for myself whenever possible
and return food trays to the recycling box located at
supermarkets, etc.
I am even more aware of recycling in daily life, and shopwith recycling in mind.

My entire family is obsessed withroses and now growing 10 varieties of roses. Increasingroses from receiving new seedlings or from cutting, andthe garden is full of greenery.

Integrated Report 2023

32

Sustainability Management

Environment
Solving Environmental Issues Through Business

About FEED ONE

FEED ONE’s Strategy

Sustainability Management

Data Section

P01-08

P09-30

P31-56

P57-66Conservation of Marine Resources —Research and development of low fish meal and fish meal-free feeds—
Japanese aquatic feed mainly contains fish meal derived

Based on the environmental issues of “climate change,” “resource conservation”, and “environmental conservation–conservation of biodiversity”, FEED ONE will fulfill its social responsibility by actively working to prevent global

With the growing depletion of natural resources

warming, conserve biodiversity, and foster environmental awareness among its employees.

Contribution to the Realization of a Resource Recycling Society—Effective use of food by-products—
Some ingredients of formula feeds contain by-products,
such as soybean meal and wheat bran, which are
generated during food production. We are helping toProcessing
Manufacturing
by-products

Production

low fish meal feeds which maintain good breeding
performance and we sell many types of low fish mealaround the world, the demand for aquaculture isfeeds. In addition, we are further promoting low fish mealincreasing year by year, and the feed that does not

and fish meal-free feeds by searching for new materials

depend on fish meal is required.

that can replace fish meal.

Shipment

Feed

Oil extraction plant
Milling plant
Starch plantfrom natural resources (wild fish).

Under such circumstances, we are working to develop

Processing
by-products

Processing
factory
Processing

Food loss

recycle food by effectively utilizing those by-products asfeed materials.

Distribution

Distribution

Conservation of Marine Resources/Environmental Conservation —Fully-farmed Pacific bluefin tuna——Initiatives to build food recycling loop through collaboration across industries—
In Japan, a total of 24.02 million metric tons of foodfeed ingredient. The production volume, however, iswaste is generated annually by businesses andlimited due to quality control, logistics and costs, and thehouseholds, of which a 5.23 million metric tons is foodchallenge is how to expand its use in the future.

loss that is still edible but is discarded (on FY2021

To overcome this issue, we have collaborated withestimate). While Japan relies on imported food, there isfood -related business and recycling business operators

massive food waste, reduction of which is deemed an

to participate in the project to build a food recycling loop.

issue to address, and industries have taken various

We are working to fundamentally reduce food loss byinspiring people to cherish food in food and nutrition

initiatives to tackle this.
We are the pioneer in the industry to use “fried meal,”
which is made by drying and processing food loss as aseminars held as part of local contribution activities, withthe aim of realizing a resource recycling society.

Amid the increasing global demand for food from a rise in

In addition to conservation of aquatic resources withthe global population, to appropriately conserve aquatic

R&D on formula feed for Pacific bluefin tuna, we areresources, we have collaborated with Kyokuyo Feed One

working to reduce marine pollution.

Marine Co., Ltd. for fully-farmed bluefin tuna.
Shipment of Hon-Maguro no Kiwami TUNAGU,
fully-farmed bluefin tuna product has started in 2017.

Conservation of Biodiversity —Production and sale of beekeeping feed—
Beekeeping is not just about harvesting honey but has a
key role to perform pollination of farm products.
Honeybees used to perform pollination of farm products
also contribute to pollinating plants of nature, and help

Food loss reduction/food recycling

conserve biodiversity.

Formula feed manufacturer
FEED ONEManufacturing andsales of poultry
formula feed

Recycler
Manufacturing of
formula feed materials”fried meal”

33

and Beebreed which are supplied during the building up

Poultry/egg distribution

period when it is desired to increase the number of bee
larvae or when there is not much pollen to support
feeding management of honeybees which protect

Zero food loss and waste
initiative by Kyoto City,
Kyoto University,and SEF

Restaurants, hotels andretail stores in Kyoto City

Recyclable food resourcesuch as kitchen scraps

Joint collection

Sorting and weighing of leftovers

More efficient collection and cost reduction

Sorting manual weighing and data gathering/analysis

FEED ONE Integrated Report 2023

We manufacture the substitute pollens Beehatcher

Agriculture and livestock farmers

biodiversity.

Conservation of Biodiversity —Production support for organic livestock products (Supply of organic JAS-certified feed)—
We have been supporting the production of organic

formula feeds. By supporting the production of organic

livestock products for many years, procuring organic feed

livestock products not dependent on chemical

ingredients, and manufacturing organic feed in

substances, we contribute to the conservation of theaccordance with JAS organic standards at the only

global environment and biodiversity.

factory in Japan that can produce organic JAS-certified

Integrated Report 2023

34

Sustainability Management

Responses to climate change—Disclosure of information based on TCFD Recommendations—
The Group’s business is based on blessings of nature,and efforts for climate change are among its priorities. In
recognition of this, we declared in April 2022, our support
for the recommendation of the Task Force on Climaterelated Financial Disclosures (TCFD), and disclosed

GovernanceRelevant pages

About FEED ONE

FEED ONE’s Strategy

Sustainability Management

Data Section

P01-08

P09-30

P31-56

P57-66

Metrics and Targets

climate-related information in June 2022 around fourthematic areas of Governance, Risk Management,
Metrics and Targets, and Strategy.
Outline of FY2022 initiatives and relevant sections arestated below.

The Group has set CO2 emissions as key metrics tominimize risks and maximize opportunities related toclimate change, and set the medium-term to long-termtargets for FY2030 and FY2050.
We have started various initiatives to achieve thereduction targets, and firstly set three reduction measures(t-CO2)

P.31 Sustainability Promotion System

The Group recognizes climate change-related risks andopportunities as major issues of its business activities,
and the ESG Committee chaired by the Representative
Director and President considers and discusses theGroup’s issues and measures.

Medium-term targets
The ESG Committee regularly reports to the Board of
Directors on climate-related risks and opportunities, andthe Board of Directors provides supervision and advice
on such measures.

FY2030We have established the ERM regulations, and undertake
risk management mainly at company-wide risk
management (RM) meetings. We have set up 57
promotion teams in total nationwide, and implement the
PDCA cycle of risk management through the year. (Figure 1)
On climate-related risks, the Task Force on TCFD andcompany-wide RM meetings will collaborate together andmanage overall risks to minimize group-wide risks andmaximize opportunities. (Figure 2)

35

FEED ONE Integrated Report 2023

Energy-saving and energygenerating activities

40,000vs. FY2020 level

Scopes 1 and 2 CO2 emissions

50% reduction vs. FY2020 levels* Target scope: FEED ONE and its main subsidiaries and associates−50%

30,000Switch to renewableenergy electricity

GHG reduction
targets

20,000Carbon offsets with avoided emissions

10,000FY2050

Risk Management(3) Integration of the process to identify, assess, andmanage climate-related risks into overall risk
management

Business-as-usual CO2 emissions in line with business growth

50,000Long-term targets(1) Process to identify and assess climate-relatedrisks
Task Force on TCFD under the ESG Committee identifies
climate-related risks and opportunities in light of internaland external factors.
For the identified climate-related risks andopportunities, we will utilize the system/framework(process, metrics) adopted under the enterprise risk
management (ERM) regulations to analyze and assess
the quantitative and qualitative impact on the Group anddevelop measures.
(2) Process to manage climate-related risks
The ESG Committee will monitor measures taken forclimate-related risks and opportunities, improve measures
for such risks and opportunities by checking theirappropriateness, and report important matters to theBoard of Directors.
The Board of Directors supervises and advises on themeasures for climate-related risks and opportunities
which are reported by the ESG Committee.

to achieve the medium-term targets: (1) energy-saving
and energy-generating activities, (2) switch to renewableenergy electricity, and (3) carbon offsets with avoided
emissions. We then prepared a decarbonization roadmap
by taking account of increased emissions due to businessgrowth until the target fiscal year of 2030.

(Figure 1) Process to identify, assess, and manage climate-related risks and opportunities
Identify assumed risks
and opportunities in lightof internal and external
factors

Identifying risks
andopportunities

Monitoring/
improvement
Monitor measures taken
Confirm appropriatenessof measures andimprove as necessary

Analyze and assess risks
and opportunities interms of the impact andtimeframe
Create a measure
Analyzing and implementationassessingplanrisks andopportunities
Implementing
measures forrisks andopportunities

Achieve carbon neutrality
in entire supply chains

0

Avoided emissions-10,000
21/3

Climate-related risks identified by the Task Force on TCFD will beshared with company-wide RM meetings to deepen the process
to identify, analyze, and assess climate-related risks in self-checks.
Utilize the ERM system

ESG Committee
Task Force on
TCFD

The system and structure
adopted under the ERM
regulations are utilized in theprocess to identify, assess,and manage climate-relatedrisks and opportunities.

25/3

26/3

27/3

28/3

29/3

30/3

31/3
(Year/Month)

FY2020

FY2021

FY2022

Scopes 1 and 2
Emissions (Scopes 1 and 2)

40,774

40,66443,914—(0.3)%+8.0%

FEED ONE and its major subsidiaries and associates (factories)

14,435

15,347

18,739(Heat)

FEED ONE and its major subsidiaries and associates (factories)

2,280

1,108

820

(Electricity)

FEED ONE and its major subsidiaries and associates (factories)

24,05924,20924,3561,420,061

1,784,969

1,860,584+25.7%+4.2%

1,418,931

1,783,749

1,859,445—

Scope 2
Scope 3Emissions

Collaborate with company-wide RM meetings

24/3

Target scope

Scope 1

(Figure 2) Collaboration between the ESG Committee and company-wide RM meetings

23/3

Actual CO2 emissions (Unit: t-CO2)

YoY

Execute based on themeasure implementation
plan

22/3

—

YoY

Category 1 [Purchased goods and services] FEED ONE (purchased raw materials)—

Category 5 [Waste generated in operations]

FEED ONE (factories and Research & Development Center)and its major subsidiaries and associates (factories)

724

782

688

Category 6 [Business travel]

FEED ONE (Head Office)

71

78

104

Category 7 [Employee commuting]

FEED ONE

336

359

346

Company-wide
RM meetings

Collaborate with the ESG Committee
Risks including climate-related risks are identified, analyzed,
and assessed at the self-checks of each department. We
will create specific measures for climate-related risks asnecessary, in collaboration with the ESG Committee.

Implement gas cogeneration system

FY2022
achievements

A system to effectively use some waste heat produced
when generating electricity with liquefied natural gas toimprove energy efficiency upon steam generation
Quantitative effect CO2 emissions: ca. 200 t-CO2/year reduction

Integrated Report 2023

36

Sustainability Management

Strategy

Sustainability Management

Data Section

P01-08

P09-30

P31-56

P57-66

We have considered the following two types of the
Scopes 1 and 2 emissions, covering the Company andthree subsidiaries and associates with high CO2emissions.
In the 1.5°C scenario, if the Group does not address
the reduction in CO2 emissions and such emission
increases in line with growing business activities, theIn the scenario analysis, we made reference to several
scenarios issued by the International Energy Agency (IEA)
and the Intergovernmental Panel on Climate Change(IPCC).

FEED ONE Group’s climate-related scenarios
Classification

Outline of scenarios

1.5°C andwell-below 2°C
scenario

A scenario in which policies and regulations are implemented toward achieving adecarbonized society, and the global temperature will be controlled at around 1.5°C towell-below 2°C above the pre-industrial levels

IEA World Energy Outlook 2022 “NZE”
IEA World Energy Outlook 2022 “SDS”
IPCC SSP 1-2.6
IPCC RCP2.6

Main referenced scenarios

4°C scenario:

A scenario in which no new policies and regulations are introduced to address climatechanges, and the global temperature will rise about 4°C above the pre-industrial levels

IEA World Energy Outlook 2022 “STEPS”
IPCC SSP 5-8.5
IPCC RCP 8.5

Magnitude offinancial impact

High: Impact on profit and loss is over 500 million yen or a material impact on business
operation
Moderate: Impact on profit and loss is over 100 million yen but 500 million yen or less or asomewhat significant impact on business operation
Low: Impact on earnings is 100 million yen or less or a minor impact on business operation

Risks/opportunities

Timeframea. If the Group took no initiatives to reduce CO2 emissions b. If the Group reduced CO2 emissions by 50% in FY2030 (vs. FY2020)

Short : Within five years
Medium: Over five years but within 10
yearsLong : Over 10 years

Description of risks/opportunities

carbon tax amount in FY2030 will amount toapproximately 600 million yen.
Meanwhile, if the Group could reduce CO2 emissions
by 50% in FY2030 (vs. FY2020 levels) as planned, carbon
tax amount will decrease by approximately 230 million
yen to approximately 370 million yen. Cost related to CO2emissions reduction is not included.

The Group’s carbon tax amount expected in 2030 and calculation method (Unit: Million yen)

Results of scenario analysis and relevant measures

Type

1.5°C scenario:

4°C scenario:

Calculation method

a

605

417

Calculate by multiplying a carbon tax* rate to FY2030 CO2 emissions which was adjusted with a business growth rate

b

371

239

Calculate by multiplying a carbon tax* rate to the CO2 emissions in FY2030 when the emissions are reduced by 50%,
and after adjusting with a business growth rate

*Carbon tax: 1.5°C scenario $140/t-CO2 (Refer to IEA World Energy Outlook 2022 “NZE” for advanced economies)
4°C scenario $90/t-CO2 (Refer to IEA World Energy Outlook 2022 “STEPS” for EU)
Calculated at 140 yen to the US dollar

Magnitude of financial impact
Timeframe
Beyond 1.5/2°C
4°C

Measures for risks and opportunities

Rising cost by a carbon tax
implementation

A potential cost increase from a carbon tax implementation following more stringent global rules on CO2 emissions to achieve a decarbonizedsociety
If a carbon tax is levied on the Group’s CO2 emissions (Scopes 1 and 2)*Please refer to the above for calculation details
If a carbon tax is levied on the supply chain
If a carbon tax is levied on logistics or packaging companies, such cost will be passed on to the freight cost of vehicles and cargo ships whichmainly use fossil fuels, and to the cost of plastic packaging materials derived from fossil fuels. As a result, the Group may bear higher cost.

High

High

MediumInitiatives to reduce CO2 emissions (Scopes 1 and 2)
Improve intensity by energy saving activities (productivity improvement, etc.)
Install more energy-saving equipment to factories
Renovate aging factory facilities
Reduce energy consumption by improving productivity by leveraging IoT technology
Install solar photovoltaic equipment to factories and offices
Initiatives to reduce carbon tax cost in the supply chain
Animal feed: Increase bulk-loading of formula feed, and reduce disassembling of used flexible container bags at factories
Aquatic feed: Consider use of a plastic feed bag which contains recycled plastic materials
Food business: Continue using pulp mold for commercial egg products, and reduce the consumption of plastic packaging materials used in meat processing

Reputation

Declining profit due to a shift in demand
toward sustainability-conscious,
plant-based meat, etc.

A potential decline in profit due to a shift in demand toward sustainability-conscious, meat alternatives, etc. with an adverse reputation aroundruminants emitting methane, a potent GHG

Low

Low

Long

Methane emitted by cattle when they belch and from livestock excreta
R&D of feed with lower environmental impact to reduce nitrous oxide emissions
Branding of environmentally friendly livestock products by promoting sale of livestock products fed with feed with lower environmental impact

Physical damage to livestock farmers
and farms due to natural disaster, anda decrease in feed sales volume from a
disruption of distribution network

With climate change predictions, the frequency of typhoons of unprecedented scale will increase
A potential decrease in feed sales volume due to concerned damage to a livestock barn of livestock producers in the mountainous areas of weakground, or to a fish tank of aquaculture producers
Assume risk of distribution network disruption due to the rising level of rivers, landslide, etc. caused by increased rainfall

Low

Low

Short

Measures for producers
Build a system to provide necessary and timely support in case of disaster, by strengthening cooperation with livestock producers and local administration
Gather and share with aquaculture producers the information on farms which can withstand waves, etc. to minimize damage, and develop feeds for such farms
Measures to prevent disruption of distribution network
Establish a system to have alternate supply routes based on the business continuity plan

Suspended factory operation due to anatural disasterWith climate change predictions, the frequency of typhoons of unprecedented scale will increase
Assume increased risk of suspended factory operations due to extended damage from storm surge
Potential delay in delivering materials to factories caused by late arrival of cargo ships or disrupted road transportation

Low

Low

Short

Under the business continuity plan, we strive to secure safety of employees and conserve production and sale of feed
In case a factory suffers a damage, minimize risk by ensuring manufacturing support from undamaged factories

Low

ModerateLong

Animal Feed : Technological innovations are progressing such as breed improvement and development of equipment to ensure stable air conditioning of a livestock
barn. We will continue to gather and issue information on feed management technology to contribute to improving the productivity of livestock.
Aquatic Feed: Water temperature is expected to rise 2 to 3°C over the long term (by 2100). Growth in demand for land-based closed recirculating aquaculture system,
not subject to environment changes, is expected and we will consider the development of products for this system.

Acute

Policy and regulation

Transition risks

Impact on livestock
Under the 4°C scenario, we assume higher risk of declining breeding performance of swine and poultry in Japan toward 2060 due to heat stress from risingtemperature, as well as higher risk of death of cattle and declining milk yield. As such, impact of a chronic rise in temperature on livestock is concerned.
Impact on farmed fish
The rate of sea temperature rise at the surface of 30° to 40° north latitude is +0.5°C in the short- to medium-term. We assume the rising sea
temperature will have a minor impact on farmed fish.

Declining profit due to the impact on
raw material production/cost caused byclimate changes

Impact on corn and fish meal production
The crop yield of corn, which is the main raw material of animal feed, is expected to decrease by 25% in 2030 in the US, the leading producerof corn. However, stable procurement is possible because corn is expected to increase globally with the advancement of agricultural techniques
and breed improvement.
Fish meal, the main raw material of aquatic feed, is expected to decline globally in the medium to long term. However, its decline rate is small
and we assume stable procurement is possible.
Impact on corn and fish meal prices
Corn prices are expected to rise toward 2030 with a higher demand for bioenergy production, etc.
A rise in fish meal price is expected in the medium to long term due to rising energy cost and an increase in capital expenditures associatedwith technological innovations.
Sales price of formula feed
Prices of animal feed are revised each quarter to reflect changes in raw material costs to prevent fluctuation risk. However, profit may decline
due to a surge in raw material costs, making it difficult for us to revise the price appropriately.
Prices of aquatic feed are not revised regularly and profit may decline if the increased raw material cost may not be passed on to sales price.

High

High

Long

Active use of raw materials with good price and quality advantage
Animal Feed : To diversify the risk of material procurement and price fluctuation for animal feed, we will import from various countries, and actively use domestic
raw materials as alternatives to imported materials, such as feed rice whose production is increasing in recent years.
Aquatic Feed: We will conduct R&D on low fish meal and fish meal-free feeds to promote switching of materials. We will also build a system to respond flexibly byenhancing collaboration with fish meal producers in and outside Japan, while monitoring the supply condition of producers.
Appropriate price revision
Animal Feed : Continue quarterly revision of the sales prices to an appropriate level
Aquatic Feed: Sales prices will be revised to reflect changes in raw material cost, though not regularly.

Assume IoT technology will advance and penetrate into the market, with a rising demand for IoT solutions to reduce carbon emission in the entire
society
Improve profit with implementation and use of IoT technology, to achieve production efficiency at factories and to reduce energy consumption

Low

Low

Medium

We improved the energy efficiency of the Kitakyushu Animal Feed Factory by 17%, while improving its productivity by controlling the electricity and steam amount ofeach process, and reducing energy consumption. Implement IoT technology at all factories to further improve energy efficiency

Resource
efficiency

Reduce energy consumption by
efficient production based on IoTtechnology

Products and services

Opportunities

Impact on livestock and farmed fish bya rise in temperature and sea watertemperature, and a decline in feedsales volume due to a change in
optimal production location in Japan

Chronic

Physical risks

37

FEED ONE’s Strategy

Impact of a Carbon Tax Introduction

The Group considers addressing climate changes as the
management’s top priority, and analyzed the scenario in
2030 to understand the financial impact of climatechanges.

Classification

About FEED ONE

An increase in feed sales volume bydevelopment and sales of sustainable
feed and use of sustainable raw
materials

Animal Feed: Expect a higher demand for feed that will reduce GHG emissions. Expect an increase in feed sales volume by promoting R&D offeed with lower environmental impact such as the feed to reduce methane emission from cattle and to reduce manure
Aquatic Feed: Expect higher demand of low fish meal and fish meal-free feeds not dependent on natural resources. Conduct R&D of feed
containing insect-derived materials to replace fish meal and feed material with GHG absorbing function (algae, methanotroph) toincrease sales volume

Moderate

Moderate

Short

Animal feed : We will develop and sell products that will improve the feed conversion rate of livestock and the feed to reduce manure. Develop products ahead ofother companies such as developing feed to reduce methane emission from cattle to increase the sales volume of feed
Aquatic feed: We are developing low fish meal and fish meal-free feeds, and started sale of low fish meal feed for some fish species. Use of insect-derived
materials, algae, and methanotroph may be costly, and limited in volume. However, we will work towards implementing them ahead of othercompanies to increase the sales volume of feed.

An increase in feed sales volume due
to advanced technology to prevent heatstress of livestock

Assume breeding performance of swine and poultry may decline toward 2060 in Japan due to heat stress from rising temperature, and risk may
increase such as death of cattle and declining milk yield. Expect a rising demand for feed to prevent heat stress.

Moderate

Moderate

Short

We have developed and sold feed and supplements to prevent heat stress, which has largely contributed to improving livestock productivity. We will further focus on
R&D, continue gathering information on feed management technology and provide services.

FEED ONE Integrated Report 2023

Integrated Report 2023

38

Sustainability Management

About FEED ONE

FEED ONE’s Strategy

Sustainability Management

Data Section

P01-08

P09-30

P31-56

P57-66SocialCreating Attractive Workplaces, and Prospering in Harmony with Society
To meet expectations from society and fulfill our responsibilities as a corporate citizen, we respect human rights, create acomfortable environment for anyone to work in, and give back to society through our business, based on our materiality
target, “Creating attractive workplaces, and prospering in harmony with society,” aiming for a sustainable world.

In addition to these internal education and training
systems, we carry on human resources development
internally through a self-development support system
under which employees are provided subsidies for taking
correspondence courses or incentive money for taking
examinations to acquire qualifications.
Status of Specialized Training Held (hours)(hours)
5,000

Aquatic Feed Division
Production Management Division
Animal Feed Division
Quality Assurance Division

4,000

Human Capital Management

Self-development Support
We also actively support employees who want to learn
and develop themselves by providing subsidies andincentives for taking correspondence courses and taking
examinations to acquire qualifications. Under this support
system, many employees have obtained various
qualifications.
Educational expenses for employees(Million yen)
40

2,000
30

FEED ONE considers employees as an asset of prime importance.
We are committed to creating an environment for employees to work enthusiastically and developing humanresources.

The Qualities of People Sought by FEED ONE and Our Education System
Instilling Value Standard for Employees’ Action
The Company’s Management Philosophy consists ofMission, Vision, and Values. We provide various trainings
to develop employees who can act in accordance with
the Values, which show a value standard for employees.
Through these trainings as well as a human resource
evaluation and its feedback, we develop human resources
who meet the expectations of society in an age of
uncertainty.

Recruitment

EducationandTraining

Human
Resource
Evaluation

EducationandTraining

Human
Resource
Evaluation

PeopleSought by
FEED ONE

Recruitment Standards

Qualities of People Sought by FEED ONE

Recruitment
We focus on taking a time to communicate with job
seekers, recruiting people who have the right qualities weseek, and nurturing them.

New employee training
This program primarily comprises onsite experiencebased training at sales locations, factories, research
centers, livestock farms, and other such locations. New
employees learn about the Company’s systems, the roleof each department, and the basic knowledge on animals
and manufacturing.

Position-based training
After the new employee training, we provide positionbased training programs comprised of six hierarchies. We
also organize leader training for the candidates ofdepartment heads to change their awareness.

Theme-based training
Who takes theinitiative and act

Who has a sincere
Who has a willingness todisposition and ability to take on challenges driven bywork together with others a curiosity about everything

Management Philosophy

Values
We constantly strive to provide solutions that address
the needs and issues of customers and consumers.
To supply our customers with safe and reliable foods ina stable manner, we conduct thorough compliancewith regulations.
We develop highly specialized personnel who cangrasp changing trends and constantly tackle
challenges.
We sincerely strive to build trust with society throughthoughtfulness, fairness, and humility.

39

FEED ONE Integrated Report 2023

We hold various theme-based training courses as follows:
training for newly appointed managers and line managers;
career design training for female employees to promote
female participation and career advancement; training formale managers who have female subordinates; and “myown career” design training to help all employees in thedepartment consider unexpected life events that occur toindividual employees in the same department regardlessof gender as their own events—this reflects the arrival ofera for males to take a greater part in childcare andnursing care.

Specialized training
We provide all employees with training programs on the
Feed Safety Law. We also hold many other specialized
training programs aiming to help employees acquire
advanced knowledge and skills to address diverse
customer needs.

Educational expenses
for employees

150

20

FY2019FY2020

FY2021

FY2022• Hours of the Animal Feed Division in FY2019 include a sales skill training held at
the Kansas State University in the United States. The training has beensuspended since the outbreak of COVID-19.

10

200

29

1,000
0

Amount per employee (Thousand yen)

50

7

22

23

38

42

FY2021

FY202213

0

FY2019FY2020100
50
0Employee Engagement
To measure employee engagement, we implement a questionnaire survey in every term of the Medium-Term Management
Plan covering all employees and a questionnaire survey on career plans in every August. During mandatory stress checktests, we also conduct an engagement survey using the Utrecht Work Engagement Scale. These results are carefully
handled to consider new systems in light of changes of the times.

Current status of work-style in the Company
The company-wide averages for FY2022 were 5.9 hours
for hours worked in excess of statutory working hours,
97.8% for the rate of employees who took summer
vacation, 14.0 days for the number of days of paid leave
taken, and 4.1% for the turnover rate. We were able tomaintain hours worked in excess of statutory working
hours at a relatively low level, and the number of days of
paid leave taken remained at a positive level. While theturnover rate has remained at a low level, we have astrong sense of crisis over the loss of valuable humanresources.

Wage gap between male and female employees
Detail data regarding wage gap in the Company are
published on the Database on Companies Promoting
Women’s Participation and Advancement in the Workplace(https://positive-ryouritsu.mhlw.go.jp/positivedb/
detail?id=42650) (available in Japanese only) on thewebsite of the Ministry of Health, Labour and Welfare. At
FEED ONE, at an entire worker level, assuming that awage per one male worker is 100%, a wage per one
female worker is 59.4%. This is because there aredifferences between males and females, for instance, in
the ratio of managers and others. There is, however, nodifference of treatment in a salary system by gender.

Gap between regular and non-regular employees
Between regular and non-regular employees, there aredifferences in salary, retirement payments, and bonuses
reflecting the scope of duties, the degree of
responsibilities, possibility of transfers, and others. Thereis, however, no difference of treatment in a welfare
program, which does not relate to a nature of job types,
duties, or abilities.

Our Issues
The ratio of female employees has gradually increased(22.2% of full-time employees) as a result of various
initiatives, such as the introduction of the earlyreinstatement support from maternity leave or childcare
leave and the reduced work hour system for childcarethat can be used for the period until children reach thethird grade of elementary school, both of which were
implemented based on suggestions from the project teamfor promoting active participation of female employees, aswell as our efforts to proactively recruit female employees.
The ratio of female managers, however, has remained low(1.9%). Currently we have a pair transfer system thatenables married couples within the Company to work inthe same area and a life event system that temporarily
exempts employees from transfer regardless of reasons.
Yet, to prevent career discontinuation resulting from life
events, we are still seeking how systems supporting tobalance personal life and work should be.
We believe that promoting diversity, including
promoting active participation of female employees, also
contributes to improving work environments of male
employees and employees with disabilities, not justfemale employees. Such initiatives, we believe, also
contribute to work-style reforms.

Integrated Report 2023

40

Sustainability Management

Work-style Reforms

Relevance to SDGs

We are actively striving to improve work environments and enhance welfare programs so that employees can work putting
a high value on work-life balance.
Leave systems exceeding statutory leaves
Annual paid leave up to 23 days
Institutional leave including consecutive days leave
and anniversary leave
Paid leave reserve system up to 60 days
Caregiver leave up to one year
Leave system up to 29 months
Initiatives for promoting active participation of
female employees
Career design training for female employees
Training for managers who have female subordinates
Holding exchange meetings for female sales staff
Assigning female employees to various departments
F leave (menstrual leave exceeding statutory leaves)
Support grant system for employees who return towork early from maternity leave or childcare leave
This system allows employees to reserve theirsoon-to-be-expired paid leave of up to 60 days anduse the leave for treatment of their own illness or injury
not caused while on duty, fertility treatment, nursing
care, or gradual entry to daycare for their children.
Under the system, employees can use maternity leave,
which is usually unpaid, as paid leave. Additionally, thesystem has been available for childcare leave since
January 2023, enabling both male and female
employees to take childcare leave without feelingconcern about income decreases.
This system exempts employees from accepting atransfer that results in the relocation of their residence
for a limited period of time of up to six years if they ask
to be exempted from such a transfer due to personal
life reasons. Employees are allowed to use this system
no matter whatever the reason is, for example,
marriage, childbirth, school enrollment, attachment towhere they live, or reasons related to a partner.

Voice

Career maintenance and continuation
Job return system
Local job transition system (life event)Simultaneous transfer system for married couples(pair transfer)
Diverse work-styles
Staggered work hours system
Telecommuting system
Reduced work hour system for childcare for theperiod until children reach the third grade ofelementary school
Reduced work hours for caregivers for an indefinite
periodPromoting active participation of rehired employees
Incentive special pay in accordance with evaluation
Second career support system
This system makes an arrangement of a transfer for amarried couple who are both employees of theCompany to be able to work in the same area as
their spouse as long as possible. If an employee
works in a different area from his/her spouse, we will
make an arrangement to transfer either one or bothof them so that they can work in the same area. After
that, the transfer of the employee to the other area
will be made at the same timing of his/her spouse’stransfer.
This system allows employees to advance or delay
the start and end times up to one hour. With thesystem having no limits on the reason or the numberof days, employees can use it for reasons, forexample, that they want to commute at off-peaktimes, or they want to delay the time arriving at theoffice on a specific day due to affairs related to theirchild.

Striving to Balance Work and Childcare Yuta Kimoto, Shikoku Branch, Aquatic Feed Division

My wife and I were blessed with the second child in 2023. Although there was an option that my wife went
back to her hometown and gave birth there, we decided to have the baby at our current place of residence inconsideration of our first-born daughter, who is a three-year-old kindergarten pupil. I wanted to care ourchildren in cooperation with my wife considering anxiety that my wife would feel right after childbirth. So, I
decided to take childcare leave. During childcare leave, I strongly felt how hard it is to do daily householdchores and to rear children. By actually getting involved in housework and childcare, I believe I was able toget close to the feeling of my wife. At the same time, I believe the bond between me and my children
deepened as I took my daughter to and from kindergarten and spent time with my second-born child at the
precious time of the newborn period. I was deeply anxious for taking childcare leave because of my duty as asales position that involved a lot of onsite business. When I consulted with my supervisor about taking
childcare leave, however, he gave a willing consent to my decision. In addition, my colleagues gave me somecaring words, “We, all the members in the branch, will back you up,” and gave me encouraging support.
Thanks to them, I was able to spend the period of childcare leave in peace.

41

FEED ONE Integrated Report 2023

About FEED ONE

FEED ONE’s Strategy

Sustainability Management

Data Section

P01-08

P09-30

P31-56

P57-66

Health and Productivity Management

Relevance to SDGs

In 2019, we have established the post of Chief Health Officer (CHO) and announced our Health and Productivity
Management Declaration. Considering employees as the most important asset, the Company is promoting Health andProductivity Management by enhancing the mental and physical health of each individual employee to remain a vibrantcompany.

Challenges and Numerical Targets for
Health and Productivity Management
We are promoting our initiatives by setting numericaltargets for health and productivity management KPIs to
be achieved by the end of FY2023, the final fiscal year of
the Medium-Term Management Plan. In order to improve
the health level of our employees, we have set targets
and then taken necessary measures primarily for KPIs
with figures worse than the national average*. We ban
smoking during working hours starting from April 2022
and offer subsidies for non-smoking outpatient expenses
to lower the smoking rate and improve employees’ healthconditions. We also implement a walking campaign twicea year to make exercise habits established among
employees and take a preventative measure for lifestylerelated diseases, with approximately 30% of ouremployees participating in the campaign every time. Our
on-going measures have helped employees become
more aware of the idea of Health and Productivity
Management, resulting in gradual decreases in thesmoking rate and the percentage of employees with a
BMI of 25 or higher. The results in the last fiscal year are
shown on the Company’s website.
Details about the Health and Productivity Management

https://www.feed-one.co.jp/csr/social/health.html

Health and Productivity Management KPIs
Targets to be achieved by the end of FY2023
Participation rate for health checkups
100%
Medical consultations after health checkups
100%
Participation rate for stress check tests
100%
Of which, percentage of highly-stressed employees
10% or lessSmoking rate*
18% or less
Percentage of employees with a BMI of 25 or higher*
30% or lessNumber of employees with a monthly overtime hours over 60 hrs
0
Of which, employees in non-managerial positions
0
Average hours worked in excess of statutory working hours per month
10 hours or less
Of which, employees in non-managerial positions
10 hours or less
Average number of days of paid leave taken per year
12 days or more

Results for FY2021
100%
59.2%
96.7%
12.2%
26.3%
33.5%
4
1
8.4 hours
6.0 hours
12.3 days

Results for FY2022
99.8%
50.6%
99.3%
14.4%
22.4%
31.8%
2
0
8.4 hours
5.9 hours
14.0 days

Certified Health and Productivity Management Organization
For the third consecutive year from 2021, the Company was qualified as a Certified Health andProductivity Management Organization in 2023 under the Certified Health and Productivity
Management Organization Recognition Program, jointly selected by the Ministry of Economy, Tradeand Industry and the Nippon Kenko Kaigi. Under the Certified Health and Productivity Management
Organization Recognition Program, the Nippon Kenko Kaigi examines large enterprises, SMEs, andother organizations engaging in initiatives for overcoming health-related challenges in communities
or for promoting health-conscious activities led by the Nippon Kenko Kaigi, and it recognizes
outstanding enterprises carrying out efforts for health and productivity management.

Voice

Building Career Using Job Return System Misako Sato, Nagoya Factory, Chubu Division, Animal Feed Business Unit

I joined the Company as an employee on the main career track, who has the possibility of a transfer nationwide, and retired
once when got married. After my pregnancy and childbirth, I was considering to work again flexibly with cherishing our family
time together. At that time, I knew that FEED ONE newly introduced a pair transfer system. I thought this system would allow
me to build career tapping into my experience thus far as well as balance work and childcare. So, I decided to go back towork using a job return system.
Although assigned to unexperienced department, I had little anxiety as I already understood the corporate culture. In addition,colleagues around me gave me a warm welcome. Currently I am working with reduced work hours and utilize hour-based
paid leave system and other systems depending on my child’s health conditions and other circumstances, aided bycooperation of those around me.
As activities outside my duty, I belong to a mountaineering circle, one of the clubs in the Company. These days I participate in its activities with my
two-year-old son.

Integrated Report 2023

42

Sustainability Management

Respect for Human Rights

ensuring good labor practices. Therefore, in accordancewith a basic policy set forth in the FEED ONE Group
Employee Code of Conduct, we require all groupcompanies to conduct sincere business in compliancewith laws and regulations and with respect for humanrights.
This policy applies to all the Group’s officers andemployees, with respect for “human rights” as set out in
the International Bill of Human Rights and the International
Labour Organization (ILO) Declaration on Fundamental
Principles and Rights at Work. The policy aims to promote
initiatives based on the United Nations Guiding Principles
on Business and Human Rights and drive respects forhuman rights in cooperation with business partners andother related parties under the supervision of the Board of
Directors.

Considering human rights as one of the most material
issues to be addressed in its initiatives for sustainability,
the Company instituted the Human Rights Policy on
March 24, 2022. Additionally, in the fiscal year ended
March 31, 2023, the Company worked on human rights
due diligence with the support of Owls Consulting Group,
Inc. Specifically, we assessed and identified major humanrights risks of the Company and formulated a policy tomitigate and prevent such risks.

Outline of the Human Rights Policy
We respect the human rights of all stakeholders involvedin our business activities, including employees andbusiness partners, and recognize the importance ofOverview of Human Rights Due Diligence and Risk Identification Process
Overview of human rights due diligence

Risk identification process

Human rights risk assessment

Step1

Step2

Step3

Identification, analysis, and evaluationof negative impact on human rights

Analyzing industry andgrasping the current situation

Identifying major
human rights risks

Formulating
countermeasures

Survey human rights risks
considering the development of
key international rules and thecharacteristics of the industry

Conduct hearings to major
departments and analyze them

Developcountermeasures tomajor risks

Information disclosure
Disclosure of information
on human rights risk
assessment results, etc.

Implementation of appropriate actions
Actions to mitigate andprevent negative impact
identified

Sort out existing measuresrelated to human rights

Clarify human rights risks
based on the characteristicsof the Company’s business

Disclose information
about the results

Create a risk map

Advice from an outside expert*

Tracking
Assessment of actions taken*We got support from Owls Consulting Group, Inc., an expert in human rights.

Identification of Human Rights Risks and Formulation of Action Policies
Subject of human rights violation: The Company

Major human rights risk identified

Subjects

Rights of workers and community residents in the supply
chain (assuming human rights violation including childlabor, forced labor, and land rights violation)

Community residents, consumers, etc.

Action policies
Establish a management scheme of suppliers in accordance witha procurement policy
1. Develop a procurement policy and communicate it to suppliers
2. Examine the status of their compliance with the policy throughSelf-Assessment Questionnaire (SAQ), on-site audit, etc.

Technical intern trainees

Conduct actual condition surveys of foreign technical intern trainees

Harassment (power/moral harassment)

Enhance and improve training on harassment

Occupational safety and health in the Company andcooperating companies

Maintain and strengthen existing measures

Long working hours, overwork

Maintain and strengthen existing measures

Rights of community residents associated with theCompany’s facility operation

Maintain and strengthen existing measures

Consumers’ safety and their rights to know

Maintain and strengthen existing measures

Future Initiatives for Human Rights
The Company will launch on establishing a suppliermanagement scheme as one of its initiatives to be taken
for human rights going forward. At the same time, we will
work on the enhancement and improvement of training

43

Suppliers

FEED ONE Integrated Report 2023

FEED ONE’s Strategy

Sustainability Management

Data Section

P01-08

P09-30

P31-56

P57-66

Contribution to Society

Relevance to SDGs

Initiatives for Human Rights

About FEED ONE

on human rights issues including harassment. Throughthese activities, we aim to build right understanding andawareness of such issues among all officers andemployees so that they can think about the issues as
their own problem and act accordingly.

Formula feed the Company manufactures day after day is absolutely indispensable for our food. On top of this, as acorporate citizen, we believe that we have an obligation to work on initiatives contributing to the global environment
protection, formation of dietary culture, support for education, or developments of the industry and local communities as amember of society. We also believe that these activities will earn the trust of society and lead to prosperity in harmony withsociety. Based on this belief, FEED ONE will pursue initiatives contributing to the development of the whole society.

Introducing New Technologies
in the Livestock Industry

Relevance to SDGs

As a shortage of humanresources and aging ofproducers in the livestockindustry have become serious social issues, the Company
is endeavoring to solve such issues by introducing newtechnologies.
Developing and selling dedicated feed for automatic
milking system (AMS)
Amid the ongoing smarter use of technologies in the livestockindustry, we have worked on the development of dedicatedfeed for AMS and support for farmers, including disseminationof AMS and feed management advice based on AMS data
analysis after its introduction. AMS obtained a patent in 2016and has been well received by producers.
Providing genomic analysis service for dairy cows
FEED ONE was the first domestic feed manufacturer tointroduce a genomic analysis service for dairy cows. With thisservice, dairy cows’ genetic abilities can be quantified byanalyzing DNA.
This enables us to forecast individual cow’s performancewith high precision and use analysis results to propose cattle
feed plans, which contributes to improving the production
performance and management of producers.

Initiatives for Milk
Consumption Support

Food and Nutrition Seminars

Relevance to SDGs

Through our food and nutrition
seminar, we help the young
generation develop skills tochoose good food bythemselves and enhance health awareness and help
them enjoy learning accurate knowledge about food andthe importance of food. In doing so, we pass on
knowledge on food value chain system, differences indomestic and imported products, differences in wild andfarmed fish, and nutrition, and so on, by taking advantage
of our characteristics as a formula feed manufacturer. At
the same time, the seminar also aims to enlighten
consumers about the significance of our industry, which
they have few opportunities to be directly involved in.
In the seminar, we are striving to fulfill our social
responsibility as a company engaged in food by appealing
participants to make good use of food and to reducefood waste to zero.

Relevance to SDGs

Milk consumption falls during
the spring vacation and theyear-end and New Yearholidays because schools are closed for a long time,
whereas raw milk production increases in these seasons.
This disturbs the supply-demand balance and affects the
management of dairy farmers, presenting a challenge tothem. The Company is striving to solve this challenge.
Boosting milk consumption
within the Company
At the head office andbranches throughout thecountry, we purchase milk (amilk preservable at normal
room temperature) producedin the area where they arelocated and serve it to visitors.
Through this effort and others,
we are promoting milk consumption.
Supporting sales promotion and donating to foodbanks, etc.
We are implementing activities to promote milk sales at retailstores. Meanwhile, we are actively working on donating milk tofood banks. This activity supports families in need for food andin turn supports producers.

Work Experience Program

Relevance to SDGs

As part of a career education
support, we hold a work experience
program by directly inviting middle
and high school students fromacross the country to the Company. The work experience
program aims to get students to have an image of how
they work in the future by knowing people working at acompany. In the program, we present a lecture about our
initiatives to achieve SDGs and others to provide
opportunities to learn
the issues of society
today and what acompany can do tosolve the issues.
Through these efforts,
we contribute to thecareer education of thegeneration who will
shoulder the future.

Integrated Report 2023

44

Sustainability Management

About FEED ONE

FEED ONE’s Strategy

Sustainability Management

Data Section

P01-08

P09-30

P31-56

P57-66

Corporate Governance
Strengthening Corporate Governance

Skills Matrix
Comprehensively considering the composition of theBoard of Directors to enhance governance, the Company
has appointed members of the Board of Directors asshown in the previous page to fully utilize their skills inbusiness activities.

FEED ONE aims to enhance its corporate value by ensuring more objective andtransparent management as well as further strengthening andimproving the compliance framework.

We will flexibly review the skills of each Director
responding to changes in the business and social
environment, to enable flexible corporate management
and ensure appropriate governance.
List of skills

Corporate
Industry expertise Marketing and Finance, accounting
management (feed, raw materials, etc.)
sales
and economics

The Company aims to expedite decision-making andstreamline business execution without compromising theenhancement of supervisory functions. To these ends, theCompany appoints External Directors to enhance theBoard of Directors’ risk management framework andensure transparent management. In addition, we haveadopted the Board of Corporate Auditors system,comprising three Corporate Auditors including two External
Corporate Auditors to ensure an objective supervision froman independent position over the Company’s decision on
management and business execution.
The Board of Directors, which is composed of
Directors and Corporate Auditors, makes important
decisions on business execution, and meets at least once

Yukihiro Arakida
Kazuo Kubota
Kikue Kubota
Keizo Goto
Takao Tsuji
Yasushi Handa
Shuichi Matsuzawa

External Officers Framework / Evaluation of the Effectiveness of the Board of Directors
External Officers Framework
The Company has five External Directors and two External Corporate Auditors.
External Directors
Name

Kikue Kubota
Title

Board of Directors Board of Corporate Auditors Nomination and Remuneration Committee

Representative Director

Hidehiro Shoji

Chairman—MemberDirector

Yukihiro Arakida

Member——Director

Kazuo Kubota

Member——Director

Yoshinao Tashiro

Member——External Director

Kikue Kubota

Member—MemberExternal Director

Keizo Goto

Member—MemberExternal Director

Takao Tsuji

Member—ChairmanExternal Director

Yasushi Handa

Member—MemberExternal Director

Shuichi Matsuzawa

Member—MemberExternal Corporate Auditor

Eiichi Yano

Observer

Chairman—

Corporate Auditor

Toru Aoyama

ObserverMember—Naohiro Chikada

ObserverMember—External Corporate Auditor

45

Name

FEED ONE Integrated Report 2023

Academic
research

Yoshinao Tashiro
External Directors

Governance Framework and Design

per month in principle. Furthermore, the Company has
introduced an executive officer system. The Executive
Committee, which is composed of Executive Officers, inaddition to the Board of Directors members, meets atleast once per month in principle to deliberate importantmatters related to the management. The Board of
Corporate Auditors, which is composed of Corporate
Auditors, meets at least once per month in principle.
In addition, the Company has the Compliance
Committee, the Credit Committee, and other committees,
which are composed of Directors in charge, Executive
Officers, and employees to manage risks that may arise
from the business development of the Group and to
discuss important matters. Corporate Auditors, including
two External Corporate Auditors, attend important
meetings and committees according to their roles.
The Company also has the Nomination andRemuneration Committee composed of External Directors
and Representative Director. We follow procedures
designed to ensure objectivity and transparency in thenomination and remuneration of Directors, and theNomination and Remuneration Committee submits a
proposal to the Board of Directors after consultation andrecommendation.
The members of the Company’s major committees
are as below:

Directors

The Group regards corporate governance as amanagement priority. Our basic policy is to establish an
optimal management structure to ensure efficient,transparent, and sound management practices to gain
trust of stakeholders including shareholders, customers,
business partners, local communities, and employees,
while striving to increase corporate value.

International
business experience

Hidehiro Shoji

Basic Policy and Framework for Corporate Governance
Basic Policy

Legal affairs

Keizo Goto

Takao Tsuji

Reason for nomination and expected roles
Ms. Kikue Kubota has long been engaged in studies in food science and other fields at
Ochanomizu University, where she serves as Professor Emeritus, and has expertise
mainly in the food business of the Company. She also serves as an auditor of anational university corporation. The Company believes that she can provide helpfuladvice and suggestions concerning the Company’s overall management from an
objective perspective.
The Company expects that she will play roles in supervising corporate management from aviewpoint of an expert in the field of food business as well as from an objective position
independent of business executors.
Mr. Keizo Goto has experience of working at regional taxation bureaus and serving as
Designated Professor at the Graduate School of Economics, Rikkyo University, and therefore
has expertise in finance and economics, etc. The Company believes that he is qualified tooversee management from an objective and independent perspective leveraging his
experience from serving as a Full-time Auditor of Japan Freight Railway Company and canhelp improve the transparency and reinforce the supervisory functions of the Company’s
Board of Directors.
The Company expects that he will play roles in supervising corporate management from aviewpoint of an expert in the field of finance and economics, etc. as well as from an
objective position independent of business executors.
In addition to work experience at trading companies, Mr. Takao Tsuji has wealth ofexperience and broad insight which he gained through managing two listed companies. The
Company believes that he is qualified to oversee and supervise management from an
objective and independent perspective as an experienced corporate manager and can help
improve the transparency and reinforce the supervisory functions of the Company’s Boardof Directors.
The Company expects that he will play roles in helping reinforce the management structureof the Company by leveraging his corporate management experience and providing advice
on the Company’s business activities from a broad perspective.

Attendance at Independent
Significant
meetings
Officer concurrent positions

17/17

Professor Emeritus,
Ochanomizu University
Auditor (part-time),
Tokyo University ofMarine Science andTechnology
Auditor (part-time),
Tokyo University ofAgriculture

17/17

—

13/13*1

Outside Director (Audit& Supervisory
Committee Member),
SNT Corporation
Outside Director,
TACHIBANA ELETECH
CO., LTD.
Outside Director, FUJI
SOFT INCORPORATED

Integrated Report 2023

46

Sustainability Management

Name

Yasushi Handa

Shuichi Matsuzawa

Reason for nomination and expected roles
Mr. Yasushi Handa has wealth of legal expertise based on his experience as a judge that hegained through serving as Presiding Judge at district courts and a high court as well as his
service as an attorney-at-law. The Company believes that he is qualified to oversee
management from an objective and independent perspective and can help improve thetransparency and reinforce the supervisory functions of the Company’s Board of Directors.
The Company expects that he will play roles in supervising corporate management from aviewpoint of a legal expert as well as from an objective position independent of businessexecutors.
Mr. Shuichi Matsuzawa has primarily experienced M&As and business investment instartups at Mitsui & Co., Ltd. Then, he accumulated broad work experience in business
investment and corporate management in the area of food and food products both in Japanand abroad. The Company believes that he can help reinforce the management structure of
the Company by providing advice on the Company’s business activities from a broad
perspective.
The Company expects that he will play roles in helping reinforce the management structureof the Company by leveraging his work experience in food business and overseas businessand providing advice on the Company’s business activities from a broad perspective.

Attendance at Independent
Significant
meetings
Officer concurrent positions

Reason for nomination and expected roles

Eiichi Yano

Mr. Eiichi Yano has broad insight on management and finance acquired at a financial
institution. He has been serving as a full-time External Corporate Auditor of the Company
for six years, during which he has accumulated knowledge of the feedstuff, livestock, andfisheries industry. Furthermore, he has also been serving as an auditor at an important
subsidiary of the Company and well versed in management conditions of the Group
companies.
The Company expects that he will help further strengthen the audit system for its
businesses by leveraging his wisdom and expertise acquired from a company-wide
viewpoint.

Naohiro Chikada

Mr. Naohiro Chikada has professional knowledge accumulated as a certified public
accountant and a tax accountant, and serves as an audit & supervisory committee member
at another listed company. The Company expects that he will help further strengthen theaudit system for its businesses by reflecting his wealth of experience in corporate audits in
the Company’s audits.

— *1

—

— *1

Senior General
Manager; Assistant toGeneral Manager,
Food Business Unit,
Mitsui & Co., Ltd.
Outside Director,
Mitsui DM Sugar
Holdings Co., Ltd.

— *2

Attendance at Independent
Significant
meetings
Officer concurrent positions

17/17

17/17

— *2

—

Representative, Chikada Certified
Public Accountant Office
Representative Partner, Koa Audit
Corporation
Outside Director (Audit &Supervisory Committee Member),
SKIYAKI Inc.
Representative Director, Chiyoda
Accounting OfficeEvaluation of the Effectiveness of the Board of Directors
consider that the Board of Directors as a whole functions
effectively. The Company ensures the anonymity of the
respondents by having them answer the questionnaire
directly to an external institution.

Initiatives for Enhancing Corporate Governance / Policy and Procedures for Nomination

47

FEED ONE Integrated Report 2023

Data Section

P01-08

P09-30

P31-56

P57-66

Basic Design of Officer Remuneration
monetary remuneration and that of non-monetary
remuneration, as well as a comparison with the
remuneration of other companies in the same industry orcompanies of similar size.
The index for performance-linked remuneration is theordinary profit in the Medium-term Management Plan of
the Company, in order to clarify the performance
evaluation of each Director, taking into account a wide
range of factors including changes in the businessenvironment and risks associated with the operation ofequity method affiliated companies. Of the monetary
remuneration and non-monetary remuneration,
performance-linked remuneration accounts for 0 to 25%,
corresponding to the status of achievement of theMedium-term Management Plan by position, while
non-monetary remuneration accounts for 9 to 15%, byposition.
The remuneration for Corporate Auditors isdetermined based on consultation among Corporate
Auditors.
The target for performance-linked remuneration for
the fiscal year under review was an ordinary profit of 5.8
billion yen, and the achieved result was 1.7 billion yen.

In principle, the Company shall delegate theNomination and Remuneration Committee, which ismainly composed of External Directors, to decide theindividual remuneration, etc. for Directors. The
remuneration shall follow a process that ensures thetransparency and objectivity of the procedures fordetermining officer remuneration.
The remuneration shall be designed to be an incentive
linked to short-term performance, based on theMedium-term Management Plan, and for the mediumto long-term enhancement of corporate value.
The amount of remuneration for each position shall notdeviate from that of other companies in the same
industry or companies of similar size, while maintaining
a level that can secure and maintain excellent humanresources.

Remuneration for Directors consists of monetary
remuneration (fixed remuneration and performance-linked
remuneration) and non-monetary remuneration (stock
remuneration). The remuneration for External Directors
consists of fixed remuneration only. Based on the above
policies, monetary remuneration and non-monetary
remuneration are each calculated by comprehensively
considering factors such as position, the achievement
rate against performance targets, division evaluations, themarket environment, and social situations. The payment
ratio for each type of remuneration is determined by the
Nomination and Remuneration Committee, taking into
consideration the balance between the total amount of

Reason for the Board of Directors (Nomination andRemuneration Committee) to have judged that thedetails of individual remuneration, etc. for each Director
for the fiscal year under review is in line with the policies
The Nomination and Remuneration Committee makes
judgments by comparing the amount of remuneration foreach position with remuneration of other companies inthe same industry or companies of similar size.

(Reference) Formula for calculating individual remuneration for each Director and the composition ratio thereof
1. Fixed monetary remuneration and non-monetary remuneration
Remuneration is set for each position based on a median of officer remuneration survey data from an external research
institution, which takes into account the size of listed and unlisted companies (sales, number of employees, market
capitalization, etc.).
2. Performance-linked monetary remuneration
The following formula is used to calculate remuneration with the ordinary profit in the Medium-term Management Plan of theCompany as an indicator.
(Formula) Performance-linked monetary remuneration*1 = Base amount + allocation amount: (actual ordinary profit − (ordinary profit in theMedium-term Management Plan + 100 million yen))*2*3 × allocation ratio by position × evaluation coefficient*1 The maximum of the performance-linked monetary remuneration is 150% of the base amount.
*2 The total allocation to Directors and Executive Officers is 3.5% of the difference between actual ordinary profit and ordinary profit in the Medium-term Management Plan + 100 million yen. The
allocation amount for Directors for the fiscal year ended March 31, 2022 is 1.7% of the difference stated above.
*3 Performance-linked monetary remuneration is not paid if actual ordinary profit is less than 80% of ordinary profit in the Medium-term Management Plan + 100 million yen.

3. Composition of remuneration
The composition of individual remuneration by position is as shown in the following table. (rounded down to the nearest
decimal place)

Policy and Procedures for Nomination
The Company takes into account all the abilities,
credentials, and proven track record a candidate
possesses in the nomination of a Director or Corporate
Auditor candidate. In addition to such consideration,
when nominating an External Officer, we select a person
who can provide opinions from an objective perspective.
In line with the above policy, the Company has
established the Nomination and Remuneration

Sustainability Management

Outline of Details in Policies*1 The attendance above covers the meetings of the Board of Directors held in FY2022. The attendance of Mr. Takao Tsuji covers the meetings of the Board of Directors held
since he assumed office at the Ordinary General Meeting of Shareholders held on June 24, 2022. As Mr. Yasushi Handa and Mr. Shuichi Matsuzawa assumed office at theOrdinary General Meeting of Shareholders held on June 23, 2023, their attendances at the meetings of the Board of Directors in FY2022 are not presented.
*2 The Company has not designated Mr. Shuichi Matsuzawa and Mr. Eiichi Yano as independent officers because Mr. Matsuzawa currently works at a business partner of theCompany and Mr. Yano previously worked at a business partner of the Company.
Furthermore, the Company has not set out independence criteria or policies for selecting External Directors and External Corporate Auditors. However, the selection process
follows the independence criteria prescribed by the Tokyo Stock Exchange so as not to cause conflicts of interest with general shareholders.

The Board of Directors of the Company conducts a survey
including self-evaluation for all Directors and Corporate
Auditors including External Directors and External
Corporate Auditors on a yearly basis to analyze andevaluate its effectiveness. Based on these analyses, we

FEED ONE’s Strategy

Basic Policies

External Corporate Auditors
Name

About FEED ONE

Committee, which is mainly composed of independent
External Directors, to review the appropriateness of thecandidate screening process and remuneration for
Directors.
The Board of Directors selects candidates for Directoror Corporate Auditor based on the procedures above
including the recommendation at the Nomination andRemuneration Committee.

Position

Actual ordinary profit < (ordinary profit in the Medium-term
Actual ordinary profit = ordinary profit in the
Allocation amount ≤ base amount × 150%
Management Plan + 100 million yen) × 80%
Medium-term Management Plan + 100 million yen
Performance-linked Non-monetary
Fixed
Performance-linked Non-monetary
Fixed
Performance-linked Non-monetary
Fixed
remuneration
remuneration remuneration
remuneration
remuneration remuneration
remuneration
remuneration
remuneration

Representative Director and President

84%

0%

15%

69%

18%

12%

63%

25%

11%

Director, Managing Executive Officer

87%

0%

13%

73%

15%

10%

68%

21%

10%

Integrated Report 2023

48

Sustainability Management

Management Structure
Representative Director

Keizo Goto External Director

April
1988
August 2007

April
1973 Joined the Ministry of FinanceJuly
1998 Director, Kanto Shinetsu National Tax Tribunal
August 1998 Regional Commissioner, Sendai Regional Taxation
BureauJuly
1999 Regional Commissioner, Nagoya Regional Taxation Bureau
July
2000 Deputy Director-GeneralJuly
2001 Deputy General Manager, National Tax Tribunal
July
2002 Trustee, The Open University of Japan Foundation
June 2005 Full-time Auditor, Japan Freight Railway Company
July
2008 Senior Managing Director, The Financial Futures Association of Japan
April
2014 Designated Lecturer (Designated Professor), Graduate School of Economics,
Rikkyo University
June 2020 External Director, the Company (present position)

April

2013

June
April
April
April

2015
2017
2018
2020

April
June

2021
2022

Yukihiro Arakida Director

Takao Tsuji External Director

April1984 Joined Kyodo Shiryo Co., Ltd.
April
2008 General Manager, Kansai Branch
April
2010 Executive Officer
October 2014 Executive Officer, the Company
April2017 Senior Executive Officer
June 2018 Director, Senior Executive Officer
April2019 Director, Managing Executive Officer; General Manager, Food Service Unit
(present position)

April

Kazuo Kubota Director
April1987 Joined The Bank of Yokohama, Ltd.
October 2010 General Manager, Tamachi BranchMay
2015 General Manager, International Operations
Department
April
2017 Executive Officer; Deputy General Manager, Sales
Division; in charge of Wholesale Department
April
2018 Executive Officer; General Manager, Southern Region Division
April
2021 Senior Executive Officer; General Manager, Finance & Accounting Division, theCompany
April
2023 Senior Executive Officer; General Manager, Administrative Unit
June 2023 Director, Managing Executive Officer; General Manager, Administrative Unit and in
charge of Aquatic Feed Division (present position)

Yoshinao Tashiro Director
April
April
April
April
April
June

1988 Joined Kyodo Shiryo Co., Ltd.
2012 General Manager, Minamikyushu Branch2017 Executive Officer, the Company
2022 Senior Executive Officer
2023 Managing Executive Officer; General Manager, Animal Feed Business Unit
2023 Director, Managing Executive Officer; General Manager, Animal Feed Business
Unit and in charge of Research & Development Center (present position)

FEED ONE’s Strategy

Sustainability Management

Data Section

P01-08

P09-30

P31-56

P57-66

Message from an External Director

Hidehiro Shoji and President

Joined Mitsui & Co., Ltd.
General Manager, Crude Sugar Office,Carbohydrate Fermentation Division,
Food & Retail Business Unit
General Manager, Carbohydrate Fermentation
Division, Food Business Unit
General Manager, Grain Logistics Division, Food Business Unit
General Manager, Grain & Feed Division, Food Business Unit
General Manager, Planning & Administrative Division (Food & Services)
Senior Executive Officer; General Manager, Corporate Planning & Strategy
Division, the Company
Managing Executive Officer
Representative Director and President (present position)

About FEED ONE

1973 Joined Nissho Iwai Corporation(current Sojitz Corporation)
June 1999 Director, NISSHO ELECTRONICS CORPORATIONMarch 2001 Managing Director
June 2002 President and Representative Director
June 2009 Chairman of the Board of Directors
June 2013 External Director, JVCKENWOOD CorporationMay
2014 President, Representative Director of the Board, COO, CIO, CRO
April
2016 President, Representative Director of the Board, CEO
April
2018 Representative Director of the Board, Chairman & CEO
April
2019 Representative Director of the Board, Chairman
June 2019 Outside Director, Dexerials Corporation
July2021 Special Advisor, JVCKENWOOD Corporation
June 2022 External Director, the Company (present position)
Outside Director (Audit & Supervisory Committee Member), SNT Corporation
Outside Director, TACHIBANA ELETECH CO., LTD.
December 2022 Outside Director, FUJI SOFT INCORPORATED

Keizo Goto
External Director

Yasushi Handa External Director
April
April
April

1982 Assistant Judge, Tokyo District Court
1992 Judge, Nagoya District Court
1996 Judge, Nagano District Court; General Manager,
Iida Branch
April
2000 Judge, Tokyo High Court
April
2004 Presiding Judge, Sapporo District Court
April
2007 Presiding Judge, Tokyo District Court
August 2018 Chief Judge, Kochi District Court and Family Court
January 2020 Presiding Judge, Fukuoka High Court
January 2022 Registered as an attorney-at-law
February 2023 Waseda Legal Commons, LPC
June 2023 External Director, the Company (present position)

I will support sharing of value derived from thesource of deliciousness from an external standpoint.
FEED ONE’s Strengths From an External Perspective

Shuichi Matsuzawa External Director
Kikue Kubota External Director
June1972 Research Associate, Faculty of Education,
Saitama University
October 1982 Lecturer, Faculty of Home Economics,
Ochanomizu University
April1999 Professor, Faculty of Human Life and Environmental
Sciences
April
2005 Trustee, Vice President
April2013 Professor Emeritus, Ochanomizu University
Professor, Nodai Research Institute, Tokyo University of Agriculture
Visiting Professor, Kanagawa Institute of Technology
April2016 Auditor (part-time), Tokyo University of Marine Science and Technology
June 2019 External Director, the Company (present position)
July
2019 Auditor (part-time), Tokyo University of Agriculture

49

FEED ONE Integrated Report 2023

April
1988 Joined Mitsui & Co., Ltd.
October 2007 Representative Director and President;
Managing Partner, WR Hambrecht Japan, Inc.
April
2014 General Manager, Overseas Business Strategy Office,
Food Business Unit, Mitsui & Co., Ltd.
October 2017 General Manager, Business Development Department, Nutrition & Agriculture
Business Unit
March 2020 General Manager, Food & Retail Products Unit, Americas Business Unit; SVP,
Mitsui & Co. (U.S.A.), Inc.
September 2022 Senior General Manager; Assistant to General Manager, Food Business Unit,
Mitsui & Co., Ltd.
June 2023 Outside Director, Mitsui DM Sugar Holdings Co., Ltd.
External Director, the Company (present position)

I originally worked at the Ministry of Finance and after
many years of involvement in operations related tobudgets, taxation systems and tax affairs, and thefinancial and securities markets, I also taught atuniversities and graduate schools. I was appointed as anExternal Director of the Company in June 2020, making
this my fourth year of service.
Over the past three years, factors such as the
COVID-19 pandemic and the crisis in Ukraine have had ahuge impact on the business environment, and with anadditional impact of the outbreaks of diseases such as

bird and swine flu, we find ourselves in a situation where
the underlying strength of the Company is fully tested. I
have been incredibly impressed by how the Company
has demonstrated powerful resilience in the face ofdramatic changes in the environment and how it has
worked to overcome difficulties. When I was first
appointed as an External Director, Takashi Yamauchi, who
was president at the time, gave me a letter. It expressed
his firm resolve to maintain feed supplies and to continue
supporting people’s diets no matter how severe thebusiness environment would be.

Integrated Report 2023

50

Sustainability Management

As shown by our corporate slogan, “the source ofdeliciousness,” we are positioned at the starting point offood value chains. Being conscious of our role in securingand maintaining these value chains is key to creating thevalue expected by society and is also the prerequisite forour business to keep its place in society and keep
growing continually.
I recognize the strengths of the Company as goodinternal coordination and communication, strong
technological capabilities in regard to productdevelopment and manufacturing, and speedy decisionmaking and response.
In regard to internal coordination and communicationin particular, I feel the atmosphere within the Company isgood, with young employees actively expressing theiropinions in meetings and a proactive organizational
culture that supports and respects taking on challenges. I
especially want to praise the way senior management
and executives communicate with employees andmaintain proper dialogue. I believe that the social capitaland human capital generated from these internal bonds,
combined with our technological excellence, leads to thecreation of value that is unique to FEED ONE. Additionally,
the Company always take swift and precise action to turnthreats into opportunities, leading to continued growth.
For example, the measures taken in response to therecent, sudden deterioration of the cost environment
mean that profits are expected to recover within FY2023.
In July, we launched ONE’s Channel, FEED ONE’s
official social media account. I think an issue going
forward will be to actively publicize the future potential of
the Company and make it more widely known throughthis kind of communications activity. In the future, I
believe we should also expand growth opportunities bydemonstrating our technological capabilities in productdevelopment and manufacturing, which are our uniquestrengths, in the global market with the aim ofaccelerating the development of the overseas business.

Features of the Company’s Board of Directors and Corporate Governance
Majority of our current Board of Directors, five of the nine
members, are External Directors. Majority of our Board of
Corporate Auditors are external members, too,comprising one full-time external corporate auditor, one
external corporate auditor, and one inside full-time
corporate auditor. When I was first appointed as anExternal Director in FY2020, the Board of Directors
comprised five inside directors and four External

51

FEED ONE Integrated Report 2023

Directors, so I think you can say that the increase in the
proportion of External Directors since I joined reflects anapproach that puts greater value on external oversight.
In addition to Board of Directors meetings, weExternal Directors also attend monthly Executive
Committee meetings, as well as various other meetings
held remotely. At each of these meetings, External
Directors possessing corporate management experienceand expert food science knowledge actively participate in
dynamic discussions. I also leverage my knowledge andexperience to give opinions regarding intellectual property
rights, thereby striving to contribute from diverse
perspectives.
We also strive to comply with every principle of the
Corporate Governance Code, including adapting torecent revisions, in order to achieve a level of corporate
governance that is beyond what is required of companies
listed on the Tokyo Stock Exchange’s Prime Market.
As part of our efforts to enhance corporate
governance, we voluntarily established the Nomination
and Remuneration Committee as an advisory body to
the Board of Directors. This committee considers
matters such as the selection of director candidates
and the appropriateness of remuneration systems for
directors, and in FY2022, it thoroughly deliberated on
the appointment of Hidehiro Shoji as the new president
and reported its conclusion to the Board of Directors.
The Committee is composed of all representative
directors and External Directors, and an External
Director also serves as the chair. It has a structure thatshows respect for the opinion of External Directors andAbout FEED ONE

FEED ONE’s Strategy

Sustainability Management

Data Section

P01-08

P09-30

P31-56

P57-66that ensures the objectivity and transparency of each
discussion process.
Also, in order to analyze and evaluate theeffectiveness of the Board of Directors, each year we
carry out a questionnaire survey of all directors andauditors. The results of the FY2022 survey evaluated theBoard as being effective overall. However, it also
highlighted an issue particularly, that deliberations
regarding the execution of duties are taking up too muchtime, so there is not enough time for deeper discussion
on matters such as medium- to long-term strategy,
sustainability initiatives, and risk management.
My personal opinion is that to enhance corporate
value, the Board of Directors needs to have deeper, morewide-ranging discussions that take a medium- tolong-term perspective. When deliberating on theexecution of duties, I think it is important that we remain
conscious of themes that support our goal of medium- tolong-term growth, such as the promotion of ESG
management, strengthening of technologicaldevelopment, and development of the overseas business,so that we can take a stance that is not solely focused on
immediate matters but that also encourages discussion
with a view to the future.
As an External Director, I will contribute to making theBoard of Directors more effective by further deepening

my understanding of the Company’s business and thefeed industry so that I can provide useful opinions from anexternal perspective.

Future Expectations of Feed One and Our Role
The Mission under our Management Philosophy states,“The first step in producing feed is to form an image ofthe future of food, in terms of contributing to thesustainability of the livestock and fishery industries.” I
think that as we plant this “first step” firmly onto theground, ahead of us lies a broad land of value provisionthat spreads across the world, and a prosperous future
where we share prosperity with all stakeholders. I want allof our employees to aim high and make steady progressso that we can expand the value we provide and realize
this prosperous future.
Our products and technologies, which are the sourceof deliciousness, not only support the development of the
livestock and fishery industries in Japan, as well as the
everyday diets of the Japanese people, but can also
contribute to food cultures in every part of the world,having the potential to be an essential component of foodvalue chains on a global basis. We are particularly
focused on using genome analysis technology to improve
breeding practices and raise productivity and on reducing
environmental impact through recycled feeds, and low
fish meal and fish meal-free feeds. The global potential ofthese is considered to be enormous.
To date, as External Directors, we have received awealth of information aimed at providing an understandingof the details of the Company’s business and also
obtained knowledge through various opportunities to visit
business sites and observe operations first hand. Goingforward, I hope to be provided with further enhanced
information and observation opportunities, and havedialogues with even more employees, so that I can
support further development of our business. At the sametime, I would also like to be able to hear evaluations andsuggestions for External Directors.
My father and elder brother both did work that was
related to agriculture so I was the only one who lived a life
working outside of a field. However, as a member of
FEED ONE, I am finally able to work in a way that isconnected to food and agriculture. The Company’s
initiatives have increased my interest in the SDGs andhealth and productivity management, and as a result, I
have also changed my lifestyle. I am greatly looking
forward to creating the future of food together.

Integrated Report 2023

52

Sustainability Management

Risk Management

materializing. As part of our crisis management, we have formulated a business continuity plan (BCP) to minimize
damage in the event of a large-scale disaster and to ensure that we can continue our business.

Enterprise Risk Management (ERM) System
Executive Committee
ReportFeedback

Company-wide RM meetings
Chairperson: Representative Director and President

Secretariat

Report

RM Promotion members (at each business location)

Risk Management Activities
Each business location of the Group has established therisk management promotion team, which engages inminimizing risk and improving operational efficiency acrossthe Group by implementing the PDCA cycle of identifying

risks, analyzing/assessing risks, developing andimplementing risk response measures, and monitoring/
improving the activities throughout the year.

Main activities led by company-wide RM meetings

Regular meetings

Report to the Executive
Committee(through company-wide RM meetings,
and interim report meetings)

Training

Activities

P09-30

P31-56

P57-66

Annually

Confirm the annual activity plan
Confirm the status of company-wide priority
risk responses
Confirm the monitoring status
Share information to enhance risk awareness

Quarterly

Confirm the annual activity plan andcompany-wide priority risks
Report on progress of activities
Report on results of annual activities

Biannually

New employee training
Facilitator training

Multipletimes a year

Monitoring/improvement

Analyze risks

Respond to risks

Overview of BCP
Disaster

Initial response plan
Evacuation
Safety confirmation
First aid to the injured and fire fighting
Initial information gathering
Procurement of goods

Crisis response plan
Establishment of
the emergency
headquarters

Information gathering activity
Information dissemination activity
Logistics support
Decision on BCP policy
Invoke a BCPBusiness continuity plan
Continuation of operations with alternative means, reduction or suspension of operations
Business recovery activity
Decision to terminate BCP
Immediately
after crisis

Up to 3 days

Up to several weeks/months

We recognize that the following items may have a major impact on the Group’s business: Details of risks are also describedin our Annual Securities Report (filed on June 23, 2023 at https://pdf.irpocket.com/C2060/ba4w/ALy7/IY6Y.pdf [available
in Japanese only]).
Risk item

Assess risks

An example of risk mapping based on risk analysisHigh

A decrease in sales volume
resulting from the outbreak of adomestic animal infectious disease
ImpactLikelihood

52ImpactLikelihood

Low

Main response measures

Risk of raw
material pricefluctuations

The profit margin may decline due to inability to pass on the increased raw material cost to a feed price
Changes in the reserve for the Formula Feed Price Stabilization System, which are recorded as selling,
general and administrative expenses, may have an impact on the Group’s operating results.

Strive to strengthen relationships with business
partners and diversify producers while
maintaining quality

Risk of diseases,
etc. of livestockand farmed fish

An outbreak of a disease or deterioration of breeding environment may force a mass disposal and sales
suspension of products.
An outbreak of a disease at a formula feed buyer may cause a negative impact on the manufacturing andsale of formula feed.
Deterioration of management conditions of a formula feed buyer may cause us to have difficulties incollecting debt, or force us to fulfill guarantee obligations under a financial guarantee contract.

Have our veterinarian team strengthen aquarantine system to prevent our feed
manufacturing factories and farms, which are
our consolidated subsidiaries, from becoming asource of infection or transmission.

Risk of disease,etc. among
employees

The infection of employees due to the spread of an infectious disease may affect our normal business
operations as well as the supply of the Group’s products and foods.

Develop the action policy and guidelines for
employees’ action, and promote active use of
remote working, staggered commuting, etc.
Develop and review a BCP

Risk of climatechangeClimate change or climate change-induced natural disasters may cause a hike in raw material prices ordamage to feed manufacturing factories.
Levying of a carbon tax to mitigate climate change

Develop and implement measures in response to
specific climate-related risks by analyzing andassessing the risk factors and financial impact.
Develop products and services and enhance
corporate value by promoting climate change
measures.

5
4

Risk of internal factors including management resources
A decline in profit due torising freight costs

Weak business activity
due to the spread of an
infectious disease
ImpactLikelihood

Risk description

Risk of external factors including management environment

Suspended operations
due to a natural disaster

Impact

The materiality of the risks identified at the annual
self-checks are assessed quantitatively and qualitatively
based on their impact and likelihood. We then understandand manage the risks of each location by plotting themon the risk map. Among the risks identified at eachlocation, those determined to be material to the Company
and of a company-wide nature are defined as the“company-wide priority risks,” against which supervisoryand other relevant departments take measures.

from spear-phishing emails, unauthorized access to
information systems, sophisticated cyberattacks,
computer virus infections, etc. Such an event may affectour business activities, including a decrease in revenue
caused by a loss of credibility, as well as claims fordamages. We are therefore working to strengthen our
security system by, for example, making our internal
network access control system more secure, conducting
spear phishing awareness training, and confirming how todeal with a cybersecurity incident when it occurs.

Business Risks

Frequency

Identify, analyze and assess risks
Develop risk response measures

FEED ONE Integrated Report 2023

P01-08

Identify risks

Risk Identification and Definition of Company-wide Priority Risks

53

Data Section

Protection of human life Continuation of business

The Group manages risks at 57 locations nationwide
under the same standards by establishing the enterpriserisk management (ERM) regulations and the companywide RM meetings to operate the ERM system.
The plan, progress and results of the ERM activities at
each business location are reported to the Executive
Committee twice a year. Given the feedback from the
Executive Committee, the activities will be further
invigorated and improved across the Group.

(self-assessment by eachbusiness location)

Sustainability Management

The Group has developed a business continuity plan
(BCP) at each business location including feed
manufacturing factories, to prepare for the events that
may have a material impact on the corporate
management (hereinafter, the “managerial crisis event”)
such as large-scale disasters, contingencies, and spreadof infectious diseases.
The managerial crisis events are handled by the Crisis
Response Committee chaired by Representative Director
and President, and such crisis response comprises aninitial response plan, a crisis response plan, and a BCP.
The initial response plan addresses such matters as
emergency actions to be taken immediately after theoutbreak of crisis, securing of personal safety, emergency
evacuation and rescue, safety confirmation, initial
information gathering, and prevention of secondary
damage. The crisis response plan covers the proceduresfor crisis response measures to be taken by the Company
from the recognition to the end of a crisis. The BCP
outlines the actions to be taken for business continuity
and recovery. We verify the effectiveness of the BCP every
year by conducting a desktop exercise.
As computer networks and information systems haverecently been playing increasingly important roles,
information security measures have become
indispensable for companies to continue their businessactivities. There is a risk of an information system failure
or internal information leakage to external parties resulting

Management Plans, business plans, etc.) to be risks, and implements measures to prevent those risks from

Items

FEED ONE’s Strategy

Business Continuity Plan

The Group considers factors hindering the achievement of management and business objectives (Medium-term

Self-check

About FEED ONE

ImpactLikelihood

2
4

Likelihood

3
5

Risk at feed
manufacturing
factories

In the event of a factory being damaged by a disaster, feed manufacturing may become difficult until its
recovery, depending on unforeseeable causes and the scale of disaster.
A large-scale earthquake may cause buildings to collapse or machinery and equipment to break down.
Tsunami flooding and subsequent damage to buildings, machinery and equipment may cause difficulty in feed
manufacturing until their recovery.
A long absence of an employee infected with a disease may cause difficulty in manufacturing operations.

Promote job rotation, build a structure to confirm
the safety of employees, and conduct anemergency drill.
Develop and review a BCP

HighIntegrated Report 2023

54

Sustainability Management

Quality Assurance
Quality assurance system

As a part of the food chain linking farm to table, we will provide safe, secure, andhigh-quality products and services to meet the expectation and trust of our customers.

DesignSafety,quality, andlaws andregulations

P01-08

P09-30

P31-56

P57-66

There is a growing needalso in Japan to acquirecertifications such as SQF (Safe Quality Food), ASC(Aquaculture Stewardship Council (for aquaculture thathas been independently assessed and certified as being
environmentally and socially responsible)), and MEL(Marine Eco-Label), and we will further manage raw
material data properly to gain trust from customers.
Quality andregulatorycheck

On-siteconfirmation

Basic Policy for Compliance
1 Conform to laws and regulations, corporate ethics, andsocial norms, and strive to maintain social orders
2 Identify problems from client and consumer
perspectives, and focus on solving them to enhance
corporate value

Compliance Framework

Acceptanceinspection andmonitoring

Conducting a Supplier Audit
ensure that the raw materials and products we receive
satisfy our quality standards.

Design Control
For the labelling and advertising materials, we check
whether the description and labelling of both the feeds andfood products comply with the laws and regulations, toprovide correct information to customers.

Initiatives to Provide High-quality Feed and Food Products, and Certifications on Food Safety and Process Control
We are working to improve our product and service
quality by building and operating the in-house quality
management system. Our feed factories and affiliatedfood companies have been certified as FSMS (Food
Safety Management System) to ensure product safety.
In addition to raw material management and hygiene
control, we respond to managing food safety byconducting a hazard analysis for each manufacturing
process.

Data Section

Production andprocessing

Sale

Data Management of Raw Materials

We have a systemized process to check regulatorycompliance, let alone a design control, to ensure feed
performance.

Sustainability Management

The Company has defined the following complianceactions based on the Employee Code of Conduct in orderto enhance its corporate value while pursuing solid andefficient corporate management.

Raw materials

Quality Philosophy

We will conduct a periodic audit of the suppliers of feeds/
feed ingredients as well as food processing factories, to

FEED ONE’s Strategy

Compliance

By ensuring quality assurance covering from the manufacturing and sale offeeds to the processing and sale of livestock and aquatic products, we
contribute to sustainable development of the livestock and fishery industries.

We ensure safety, quality and regulatory compliance forraw materials used for feeds by confirming the documents
required to be filed, specifications, constituents, andmanufacturing flows. Further, we conduct an in-housemonitoring of hazardous substances. If raw materials ofhigh risk are identified, we will take measures such as
notifying so to the relevant raw material suppliers andrestricting their use in feeds.
We ensure a system to supply safe raw materials also
at affiliated food companies by managing breeding at
production farms and confirming the monitoring results
related to safety.

About FEED ONE

To ensure safety of feeds, our feed factories are also
certified under the Guidelines of Good Manufacturing
Practice (GMP) for feed set by Food and Agricultural
Materials Inspection Center (FAMIC), an incorporated
administrative agency of Japan, while complying withvarious guidelines including the Guidelines for Preventing
the Contamination of Feed Products with Toxic
Substances.

The Company regularly holds meetings of the Compliance
Committee, which was established by the Representative
Director and President, and investigates and deliberates
on various issues related to the Group’s compliance.
In addition, the Company conducts compliancetraining sessions for Directors, Executive Officers,

employees, and other staff to increase complianceawareness, and introduced the internal reporting system,
which has an outside attorney, an External Corporate
Auditor, and the Internal Auditing Division as contact
points.

Internal Control Basic Policy
The Company has set forth the following policies toensure compliance with laws and regulations and the
Articles of Incorporation by Directors, Executive Officers,
and employees in their executing duties:(1) In accordance with laws and regulations, the Articles
of Incorporation, resolutions at the General Meeting of
Shareholders, and internal regulations, the Board of
Directors of the Group shall decide on importantmatters related to management and supervise theexecution of duties by Directors.
(2) To ensure that the Directors, Executive Officers, andemployees of the Group comply with laws andregulations and promote appropriate corporate
activities, the Group shall make them aware of the
FEED ONE Group Employee Code of Conduct.
(3) Corporate Auditors shall audit the execution of duties
by Directors in cooperation with the Accounting
Auditor and the Internal Auditing Division.
(4) The Company shall ensure that the Regulations forInternal Reporting are recognized within the Group andperiodically report the status of reporting each year to
the Board of Directors of the Company. The Board of
Directors shall conduct follow-up activities on suchreports and take necessary measures to improve theeffectiveness of the internal reporting system. In
addition, the Board of Directors shall evaluate theinternal reporting system and continuously improve thesystem.

(5) The Board of Directors of the Company shall educate,train, and familiarize the Group regarding compliance,
including the internal reporting system, and shallassign and train personnel in charge of compliance
who possess the necessary skills and aptitude.
(6) The Compliance Committee shall decide on matters
including action policies, by investigating anddeliberating on various issues related to the Group’s
compliance, and inform and instruct the Groupaccordingly.
(7) The Group will not engage in any relationship with antisocial forces that threaten civil society and will neverconduct anti-social transactions with such forces. In
addition, the entire company shall take a resolutestance against such anti-social forces by closelycollaborating with the police and other external
specialized institutions.

Company Structure to Ensure Quality
The Quality Assurance Committee, chaired byRepresentative Director and President, meets monthly totake measures for ensuring quality through reporting anddiscussion on feedback and requests from customers
and quality data.

55

FEED ONE Integrated Report 2023

We work to improve operations by promoting activities
based on our quality management system regulations
and regularly holding training sessions on ISO.
We also work to ensure regulatory compliance byholding briefing sessions on the Feed Safety Law andother relevant laws and regulations.

Integrated Report 2023

56

Data Section

About FEED ONE

FEED ONE’s Strategy

Sustainability Management

Data Section

P01-08

P09-30

P31-56

P57-66

Financial Data for the Last 7 Years
Fiscal year ended March 31, 2017 Fiscal year ended March 31, 2018 Fiscal year ended March 31, 2019 Fiscal year ended March 31, 2020 Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Fiscal year ended March 31, 2023

Operating results (Million yen)
Sales

207,920

207,562

212,886

215,050

214,120

243,202

307,911

Cost of sales

182,917

183,629

189,757

191,401

192,163

220,490285,218

Selling, general and administrative expenses

20,171

20,22519,005

18,234

16,284

18,41821,270Operating profit

4,831

3,706

4,123

5,414

5,672

4,293

1,422

Ordinary profit

5,131

4,103

4,466

5,737

6,081

5,067

1,711

Profit attributable to owners of parent

3,937

2,971

4,657

3,842

4,438

3,659

1,030

Total assets

79,90487,082

88,93490,88099,251

108,504

127,913

Net assets

30,96833,30436,41338,906

42,79444,84045,314

Capital expenditures

5,033

6,448

3,811

7,934

8,120

2,659

2,103

Depreciation

1,855

2,370

2,395

2,513

3,157

3,198

3,235

Net cash provided by (used in) operating activities

11,777

9,199

4,842

1,127

7,737

2,740

(7,816)

Net cash provided by (used in) investing activities(891)(7,454)(158)(7,475)(5,989)(952)(1,187)

Net cash provided by (used in) financing activities(10,373)(1,330)(4,937)6,512(1,550)1,174

12,881

2,333

2,748

2,492

2,657

2,830

3,444

7,322

Basic earnings per share*1

19.98

15.08

23.66

97.64

112.78

94.65

27.01

Dividend per share

4.50

4.50

4.50

5.00

25.00

25.00

155.20166.86182.90977.82

1,074.63

1,161.40

1,172.57

Operating profit to sales

2.3

1.8

1.9

2.5

2.6

1.8

0.5

Profit to sales

1.9

1.4

2.2

1.8

2.1

1.5

0.3

Return on equity (ROE)

13.7

9.4

13.5

10.3

11.0

8.5

2.3

Return on assets (ROA)

6.3

4.9

5.1

6.4

6.4

4.9

1.4

Equity ratio

38.3

37.8

40.5

42.3

42.6

40.8

35.0

Cash and cash equivalents at end of period

Per share information (Yen)Net assets per share*1

15.00*2

Financial indicators (%)*1. Effective October 1, 2020, the Company carried out a consolidation of shares at a ratio of one share for every five common shares. Basic earnings per share and net assets per share
are calculated on the assumption that the share consolidation was conducted at the beginning of the fiscal year ended March 31, 2020.
*2. The dividend of 15.00 yen per share for the fiscal year ended March 31, 2021 is the sum of an interim dividend of 2.50 yen and a year-end dividend of 12.50 yen. Effective October 1,
2020, the Company carried out a consolidation of shares at a ratio of one share for every five common shares. As a result, the interim dividend is the amount before the shareconsolidation (12.50 yen if the share consolidation is taken into consideration), and the year-end dividend of 12.50 yen is the amount after the share consolidation (the annual dividend
per share is 25.00 yen if the share consolidation is taken into account).
*3. The Company has applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29; revised on March 31, 2020) and its implementation guidance since thebeginning of the fiscal year ended March 31, 2022. The key management indicators, etc. for the fiscal year ended March 31, 2022 and the following fiscal year are the figures thatreflect the application of the accounting standard and its implementation guidance.

57

FEED ONE Integrated Report 2023

Integrated Report 2023

58

Data Section

Financial Summary

About FEED ONE

FEED ONE’s Strategy

Sustainability Management

Data Section

P01-08

P09-30

P31-56

P57-66

Financial Position

Operating Results
The Group formulated the Third Medium-Term
Management Plan for the three-year period from FY2021
to FY2023, aiming to maximize its profit centered on fourbusinesses—the animal feed business, the aquatic feedbusiness, the food business, and the overseas
businesses. Positioning the three-year period as a phaseto put the finishing touches on business integration, we
have sought to diversify raw material procurement
sources, streamline the production system, and improve
product quality and service, among other initiatives.
During the fiscal year under review (from April 1, 2022
to March 31, 2023), the prices of raw materials used forfeed remained at historical highs throughout the year. Thisis mainly due to the concerns over the supply of grains
following the Russia-Ukraine situation and othergeopolitical risks in the midst of a globally continued risein prices of corn, one of the primary feed materials, given
increased demand for ethanol. In addition, the raw
material prices in Japan were also affected by thedepreciation of the yen against the dollar resulting fromthe widening interest rate gap. The market prices of
livestock products, such as pork and eggs, remained highas well, due to supply shortages of the products, etc.

During the fiscal year under review, the Group posted
sales of 307,911 million yen, up 64,709 million yen
year-on-year. This was mainly due to year-on-yearincreases in the sales volumes and sales prices of bothanimal and aquatic feeds and a significant rise in the sales
prices of foods with the soaring market prices of livestock
products. The Group posted cost of sales of 285,218
million yen, up 64,728 million yen year-on-year. This was
attributable to rising prices of raw materials and energy.
The year-on-year increase in cost of sales exceeded thatin sales.
During the fiscal year under review, selling, generaland administrative expenses increased 2,852 million yen
year-on-year to 21,270 million yen. This was mainly due
to an increase of 2,301 million yen in reserve funds for the
Formula Feed Price Stabilization System.
As a result, during the fiscal year under review, theGroup posted an operating profit of 1,422 million yen andan ordinary profit of 1,711 million yen, decreasing by
2,870 million yen and 3,355 million yen, respectively, fromthe previous fiscal year.

The Group depends on the overseas supply of raw
materials, such as corn, to manufacture and sell formulafeed, which is its main product. We therefore face the riskof large fluctuations in raw material costs, mainly due tochanging crop yields affected by changes in crop plantedareas and weather in locations including the U.S.;
increasing demand in China; and changing ocean freightcosts. We therefore revise the sales price of animal feed
quarterly, but this factor has a material impact on theGroup’s financial position.
Total assets at the end of the fiscal year under review
increased 19,408 million yen compared to the end of theprevious fiscal year. This was mainly due to an increase of
20,533 million yen in current assets primarily resulting
from an increase in trade receivables following theincreased sales prices of animal and aquatic feeds.
Total liabilities increased 18,934 million yen comparedto the end of the previous fiscal year. This was mainly due
to an increase of 10,052 million yen in current liabilities
primarily resulting from an increase in trade payables
following the rise in the prices of raw materials, and anincrease in short-term borrowings to raise working capital,
as well as an increase of 8,882 million yen in non-current
liabilities primarily resulting from an increase in long-termborrowings to ensure financial stability.

Net assets increased 474 million yen compared to theend of the previous fiscal year. This was mainly due to anincrease in retained earnings resulting from the posting of
profit attributable to owners of parent, and an increase invaluation difference on available-for-sale securities, whichwere partially offset by a decrease resulting from thepayment of dividends, etc.

(Billion yen)
Figures in parentheses
indicate year-on-yearchanges

Total assets

Total liabilities and net assets

127.9

127.9

(+19.4)(+19.4)

Increase in cash
and deposits

Increase in notes
and accounts payable- trade(+3.8)

Increase in notes
and accounts
receivable - trade

Current assets

Increase ininventories(+20.5)(+11.0)(+4.6), etc.

(+5.5)

Total liabilities

Increase in
short-term borrowings

82.5

85.8

(+18.9)(+5.4)

Increase inlong-term borrowings

Decrease inproperty, plantand equipment(+8.7), etc.

(−1.8)

Increase inintangible assets

Non-current
assetsTotal net assets(+0.3)

Increase in investments
and other assets(−1.1)

42.0(+0.4)(+0.3), etc.

Increase in valuationdifference on available-for-sale securities

45.3(+0.2), etc.

Cash Flows(Billion yen)

Sales

Operating profit

Ordinary profit

Profit attributable to owners of parent

307.9
5.0
4.2

3.6

243.2

+26.6%−66.9% 1.4

year onyear

2022.3−66.2%

year onyear

2023.32022.3

1.7−71.8% 1.0
year onyear

year onyear

2023.32022.32023.32022.32023.3

Factors for changes in operating profit(Million yen)

Feed Business −2,606

Food Business −316

4,293
Increase in gross
Increase in sales margin of
volume ofanimal feed
animal feed
+662

Increase in
Decrease insales volume of gross margin
aquatic feed of aquatic feed

+231

+180

Increase in SG&A
expenses ofanimal feed

−676

Decrease inprofit of
Increase inFood Business
SG&A expenses ofRise inaquatic feed Other feed, etc.
purchase prices

−94

−68

−316

Other, etc.

+52

1,422
−2,870year on year

−2,8422022.359

FEED ONE Integrated Report 2023

2023.3

The Group’s main financing needs are for operating
expenses to manufacture and sell formula feed in the feedbusiness; to nurture, purchase, and sell pigs, etc. in thefood business; and to purchase, partially process, and sell
livestock and aquatic products, as well as investing tobuild, renew, and streamline production facilities, etc. Suchfinancing needs are in principle covered by the Group’s
own funds and loans from financial institutions.
Cash and cash equivalents (hereinafter, “cash”) at theend of the fiscal year under review was 7,322 million yen,
an increase of 3,877 million yen compared to the end of
the previous fiscal year. This was because we
accumulated cash and deposits to strengthen ourbusiness security and financial soundness in response to
growing financing needs in the face of the changing
external environment with an uncertain outlook.
Net cash used in operating activities amounted to
7,816 million yen (cash inflow of 2,740 million yen in theprevious fiscal year) because cash decreased due tosignificantly increased demand for working capital,
partially offset by an increase in cash due to therecognition of profit before income taxes.
Net cash used in investing activities amounted to 1,187
million yen (cash outflow of 952 million yen in the previous
fiscal year) because cash decreased mainly due to thepurchase of property, plant and equipment and intangible
assets, partially offset by an increase in cash mainly due toproceeds from sale of investment securities.

Net cash provided by financing activities amounted to
12,881 million yen (cash outflow of 1,174 million yen in
the previous fiscal year) because cash increased mainly
due to an increase in borrowings to respond to demand
for working capital, partially offset by a decrease in cash
mainly due to the payment of dividends. In August 2022,
the Company concluded a commitment line agreementwith the maximum limit of 10,000 million yen and asustainability-linked loan agreement with the total amountprocured of 10,000 million yen. We set CO2 emissions
reduction rates as sustainability performance targets(SPTs) based on our sustainability-related material issues.

(Billion yen)
Cash flows Cash and cashfrom financing equivalents at
activities
end of period

Cash flows
Cash and cash
equivalents at from operating
beginning of period activities

3.4

−7.8

+12.8

7.3

Cash flows
from investing
activities−1.1

2022.32023.3Integrated Report 2023

60

Data Section

About FEED ONE

FEED ONE’s Strategy

Sustainability Management

Data Section

P01-08

P09-30

P31-56

P57-66

Consolidated Financial Statements
Consolidated Balance Sheets(Million yen)
As of March 31, 2022

As of March 31, 2023

Assets

As of March 31, 2023

Liabilities

Current assets

Current liabilities

Cash and deposits

3,500

7,379

Notes and accounts receivable - trade

40,35951,375

Electronically recorded monetary claims - operating

2,427

3,885

Merchandise and finished goods

2,345

3,070

Raw materials and supplies

13,269

Animals
Other
Allowance for doubtful accounts
Total current assets

Notes and accounts payable - trade30,90336,482

Short-term borrowings

11,35016,803

Lease liabilities

128

126

17,156

Income taxes payable

441

467

335

357

Provision for bonuses

685

558

3,100

2,791

Other

6,513

5,636

(34)

(180)

Total current liabilities

50,02260,07465,30385,836

10,47819,208Non-current assets

Non-current liabilities
Long-term borrowings

Property, plant and equipment
25,521

24,177

Lease liabilities

759

658

Accumulated depreciation(12,082)(11,174)

Deferred tax liabilities

10

203

Buildings and structures, net

13,43813,002

Provision for share awards for directors (and other officers)

156

173

Machinery, equipment and vehicles

30,322

29,123

Accumulated depreciation(18,050)(17,905)

2,194

2,234

Machinery, equipment and vehicles, net

12,271

11,217

Asset retirement obligations

3

3

Land

6,355

6,114

Other

38

42

Leased assets

1,046

1,045

Total non-current liabilities

13,641

22,523

Accumulated depreciation

(227)

(318)

63,66382,598

Leased assets, net

818

727

Construction in progress

45

68

2,211

2,137

(1,627)(1,599)

Share capital

10,00010,000583

538

Capital surplus

9,737

9,737

33,513

31,668Retained earnings

23,882

23,952

Treasury shares

(271)

(244)

Other

530

916

43,34843,445

Total intangible assets

530

916

8,215

8,531

Valuation difference on available-for-sale securities

948

1,229

Long-term loans receivable

16

12

Deferred gains or losses on hedges

72

32

Distressed receivables

239

327

Foreign currency translation adjustment

(1)

61

Deferred tax assets

315

274

Remeasurements of defined benefit plans

(61)

(0)

Other

630

702

Total accumulated other comprehensive income

957

1,323

Allowance for doubtful accounts

(259)

(356)

Total investments and other assets

9,157

9,491

534

546

43,20042,076

Total net assets

44,84045,314

108,504

127,913

Total liabilities and net assets

108,504

127,913

Buildings and structures

Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets

Investment and other assets
Investment securities

Total non-current assets
Total assets

61

As of March 31, 2022

FEED ONE Integrated Report 2023

Retirement benefit liability

Total liabilities
Net assets
Shareholders’ equity

Total shareholders’ equity
Accumulated other comprehensive income

Non-controlling interests

Integrated Report 2023

62

Data Section

About FEED ONE

FEED ONE’s Strategy

Sustainability Management

Data Section

P01-08

P09-30

P31-56

P57-66

Consolidated Financial Statements
Consolidated Statements of Income(Million yen)

Consolidated Statements of Cash Flows

Fiscal year ended March 31, 2022 Fiscal year ended March 31, 2023
Sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity method
Stockpile storage revenue
Subsidy income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Sales discounts
Share of loss of entities accounted for using equity method
Commission expenses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Subsidy income
Insurance claim income
Total extraordinary income
Extraordinary losses
Loss on sale of non-current assets
Loss on retirement of non-current assets
Loss on tax purpose reduction entry of non-current assets
Impairment losses
Loss on liquidation of subsidiaries
Loss on valuation of shares of subsidiaries and associates
Loss on closing of factory
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

243,202220,490
22,712
18,4184,293

307,911285,218
22,693
21,270
1,422

14
138
109
138
379
188
969

10
145
—
141
163
210
670

94
35
—
1
65
195
5,067

158
46
42
78
56
382
1,711

6
45
196
18
266

37
305
61
—
404
13
43
—
208
0
—
211
476
1,639
492
103
596
1,042
12
1,030

25
59
12
143
—
2
—
243
5,090
1,317
83
1,401
3,689
29
3,659

Consolidated Statements of Comprehensive Income(Million yen)

Fiscal year ended March 31, 2022 Fiscal year ended March 31, 2023
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities accounted for using equity method
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

63

FEED ONE Integrated Report 2023

3,689

1,042

88
44
(14)
107
226
3,915

280
(39)
60
63
365
1,408

3,885
29

1,396
12

(Million yen)
Fiscal year ended March 31, 2022 Fiscal year ended March 31, 2023

Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment losses
Share of loss (profit) of entities accounted for using equity method
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in retirement benefit liability
Increase (decrease) in provision for share awards for directors (and other officers)
Interest and dividend income
Interest expenses
Loss (gain) on sale of investment securities
Commission expenses
Loss on liquidation of subsidiaries
Loss on valuation of shares of subsidiaries and associates
Loss (gain) on sale and retirement of non-current assets
Loss on tax purpose reduction entry of non-current assets
Subsidy income
Insurance claim income
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Other, net
Subtotal
Income taxes paid
Proceeds from insurance income
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment and intangible assets
Proceeds from sale of property, plant and equipment and intangible assets
Purchase of investment securities
Proceeds from sale of investment securities
Proceeds from liquidation of subsidiaries
Loan advances
Proceeds from collection of loans receivable
Income from subsidies
Interest and dividends received
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Interest paid
Dividends paid
Repayments of lease liabilities
Commission expenses paid
Purchase of treasury shares
Proceeds from sale of treasury shares
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

5,090
3,198
143
(109)
1
(49)
74
52
(153)
94
(45)
1
—
2
77
12
(196)
(18)
(6,483)(3,362)
5,358
1,058
4,748
(2,025)
18
2,740

1,639
3,235
208
42
242
(127)
127
16
(155)
158
(305)
78
0
—
19
—
(61)
—
(12,565)(4,635)
5,579(774)(7,278)(538)—(7,816)(2,623)
166
(20)
282
—
(200)
603
696
164
(21)
(952)

(2,070)
101
(4)
484
6
(25)
168
1
162
(12)
(1,187)

1,740
1,145
(1,958)
(96)
(971)
(136)
(1)
(1,027)132(1,174)
614
2,830
3,444

5,560
10,500(1,877)
(147)
(967)
(132)
(78)
(1)
27
12,881
3,877
3,444
7,322

Integrated Report 2023

64

Data Section

Trade name:

FEED ONE CO., LTD.

Established:

October 1, 2014

Share capital:

10,000 million yen

Head office:2-23-2 Tsuruyacho, Kanagawa-ku,
Yokohama-shi, Kanagawa

Number of employees 910(consolidated):
Accounting
auditor:Deloitte Touche Tohmatsu LLC

Fiscal year-end: March 31
Principal
businesses of
the Group:

Production, processing, and sale offeeds; and purchase, production,
processing, and sale of livestock andaquatic products

Directors and Corporate Auditors (as of June 23, 2023)

Animal Feed Business Unit

Data Section

P01-08

P09-30

P31-56

P57-66

Hidehiro ShojiTotal number of shares 100,000,000 sharesauthorized to be issued:

Director

Yukihiro Arakida

Director

Kazuo Kubota(New)

Total number of shares issued: 38,477,128 shares

Yoshinao Tashiro(New)

Director
Director

(External) Kikue Kubota

Director

(External) Keizo Goto

Director

(External) Takao Tsuji

Director

(External) Yasushi Handa

Director

(External) Shuichi Matsuzawa (New)(New)

Corporate Auditor (External) Eiichi Yano
Corporate Auditor

Stock listing:Tokyo Stock Exchange, Prime Market

Securities code:

2060

Ordinary General Meeting Every Juneof Shareholders:Record date:

Toru Aoyama

Animal Feed Division branch offices

Hokkaido Division

Animal feed factories

Tohoku Division

Year-end dividend resolved at theOrdinary General Meeting of
Shareholders
March 31 every year
Interim dividend
September 30 every year
Public notices are posted on our
website. However, if public notices
cannot be posted on our website
for unavoidable reasons, they will begiven in the Nikkei newspaper.
Our website at:https://www.feed-one.co.jp/english/

Shareholder registrar: 1-4-1, Marunouchi, Chiyoda-ku, Tokyo
Sumitomo Mitsui Trust Bank, Limited

Kanto Division

P re s i de n t

Board of Directors

Shareholders Meeting

Chubu Division
Kansai Division

Production Management Division

Kitakyushu Division

Feedstuff Materials Division

Minamikyushu Division

Aquatic Feed Division branch offices

Food Service Unit
Internal Auditing Division

Board of Corporate Auditors

Corporate Planning & Strategy Division

Aquatic Research Center

Foods & Retail Business DivisionCorporate Planning & Strategy Department
Sustainability Promotion Department
Overseas Business Department
System Planning Department

Mitsui & Co., Ltd.
The Master Trust Bank of Japan, Ltd.
(Trust Account)
Daiwa Kogyo LLC
Custody Bank of Japan, Ltd.
(Trust Account)
THE KEIHIN CO., LTD.
Tokio Marine & Nichido Fire
Insurance Co., Ltd.
Asahi Mutual Life Insurance Company
The Bank of Yokohama, Ltd.
State Street Bank and Trust
Company 505223
Yonkyu Co., Ltd.

9,838

25.60

3,438

8.95

1,207

3.14

1,188

3.09

1,047

2.72

857

2.23

803
781

2.09
2.03

722

1.88

600

1.56

Notes: 1. The major shareholders presented above are based on the shareholder
registry as of March 31, 2023.
2. The ratios of shareholding are calculated after deducting treasury shares(43,559 shares).
3. 253,960 shares of the Company, held by the Custody Bank of Japan,
Ltd. (Trust Account) as trust assets for the “trust for share-based
remuneration for directors (and other officers),” are not included in thenumber of treasury shares.

Distribution of Shareholders
Financial institutions

Individuals/other

24.7％

25.8％

Foreigninvestors

Aquatic feed factories
Aquatic Feed Division

Number of shares held Ratio of(thousand shares) shares held (%)

Shareholder

Number of shareholders: 17,494 shareholders

Corporate Auditor (External) Naohiro Chikada

Animal Feed Division(as of March 31, 2023)

Major Shareholders

Representative Director
and President

Organizational Chart
https://www.feed-one.co.jp/english/company/about.html

Sustainability Management

Status of Shares

Method of public
notices:More detailed chart is available at

FEED ONE’s Strategy

Share Information

Company Information
Company Profile (as of March 31, 2023)

About FEED ONE

Number of shares

38,477,128 shares

8.2％

Financial
instruments
business operators

Other corporations(Unit: thousand shares)

Trading volume (left axis)

1.3％

40.0％

Trend of Share Price
Share price (right axis)(Yen)

12,000

1,200

8,000

800

4,000

400

Research & Development Center
Quality Assurance Division
Finance & Accounting Division
Administrative Unit

General Affairs Division
Human Resources Division

0

19/3

20/3

21/3

22/3

23/3

0

Note: Effective October 1, 2020, the Company carried out a consolidation of shares at a ratio of one share for every five common shares.

65

FEED ONE Integrated Report 2023

Integrated Report 2023

66