Financial Results Presentation
for the Year
Ended March 31, 2013

May 16, 2013
Financial Results Presentation for the Year Ended March 31, 20131

Contents

1. Business Overview
2. Results for Year Ended March 31, 2013
3. Outlook for Year Ending March 31, 2014
4. Medium-Term Management Plan
5. Appendix<Disclaimer>
The opinions, outlooks, forecasts and other forward looking statements contained herein are
based on Nitta Gelatin Inc.’s judgments as of when this presentation was compiled.
Accuracy of information contained in this presentation is by no means guaranteed. Please beaware that the Company’s earnings going forward may vary materially from the content of thispresentation depending on various variables including the market environment.
Financial Results Presentation for the Year Ended March 31, 20132

1. Business Overview

Financial Results Presentation for the Year Ended March 31, 20133

1 Company Overview
Company Overview
Name

Nitta Gelatin Inc.

Representative

Norimichi Soga, Representative Director and President

Head Office

4-4-26, Sakuragawa, Naniwa-ku, Osaka (P.C.556-0022), Japan

Establishment

January 1918

Stock ListingFirst Section of the Tokyo Stock Exchange (Stock code: 4977)

CapitalConsolidated
Net Sales
Consolidated
Employees¥1,577 million¥28,700 million (Year ended March 31, 2013)

624 (As of March 31, 2013)

Financial Results Presentation for the Year Ended March 31, 20134

1 Company Overview
Business Segments, Divisions and Main Products
Business
Segment

Division
For food

For capsules

Hard and soft capsules, mini-capsules, etc.

For photography

Color film, X-ray film, photographic paper, etc.

PeptideCollagen peptide

Dietary food supplements, health supplements,
functional nutrient foods, etc.

CasingCollagen casing

Sausages, frankfurters, snack sausages, salamis, etc.

Life Science

Collagen, gelatin

Testing reagents for laboratory research, synthetic
tissue, synthetic bones, DDS, cell transplants, etc.

agents, Stabilizers
Food Materials Gellingand quality enhancers

FormulaSolution

Application
Gummy candy, marshmallow and other confectionery,
food products, convenience store delicatessen items,
frozen foods, etc.

Gelatin

CollagenMaterial

Product

Adhesives

Dessert jellies, delicatessen items, meat products, etc.

Sealants (Highperformance gaskets)

Smartphones, mobile phones, tablets, digital
cameras, etc.

Hot-melt adhesives

Packaging, bookbinding, construction material,
hygiene products, etc.

Animal glues

Bookbinding, paper packs, paper crafts, etc.

Financial Results Presentation for the Year Ended March 31, 2013

5

2. Results for Year
Ended March 31, 2013

Financial Results Presentation for the Year Ended March 31, 20136

2 Results for Year Ended March 31, 2013
Business Performance (1) Overseas: Demand-driven growth Japan: Deflationary sluggishness

 Rising material costs
 Rising energy costs in Japan(¥ million)(¥ million)

30,0002,400

Net Sales

Operating Income

28,722
27,923

27,763

2,015

25,000

1,600

1,618
1,486

20,000800

15,0000

2011/3

2012/3Financial Results Presentation for the Year Ended March 31, 20132013/3

2011/3

2012/3

2013/37

2 Results for Year Ended March 31, 2013
Business Performance (2) Increase in equity-method
investment income
 Foreign exchange gains

 Decrease in tax burden(¥ million)(¥ million)

2,700

Ordinary Income

1,800

Net Income
1,565

2,002

1,800

2,002

1,375

1,200
1,051

1,383

900

600

0

0

2011/3

2012/3

2013/3Financial Results Presentation for the Year Ended March 31, 20132011/3

2012/3

2013/38

2 Results for Year Ended March 31, 2013
Results Compared With Forecasts
 Net sales: Decrease in photographic gelatin Operating income: Rising material costs, rising energy costs in Japan
 Net income: Decrease in tax burden(¥ million)

Net Sales
Operating
IncomeOrdinary
IncomeNet Income

2013/3
Forecasts

2013/3Results

Variance% Variance

28,90028,772

△127

△0.4%

2,070

1,618

△451

△21.8%

2,100

2,002

△97

△4.7%

1,370

1,565

＋195

＋14.3%

Financial Results Presentation for the Year Ended March 31, 20139

2 Results for Year Ended March 31, 2013
Collagen Material Business Sales rose, income fell from the year before
 Sales and income rose from two years before
 Highlights
 Gelatin Division:(Japan)・Strong performance in gelatin for capsules
・Cooling YoY demand for food gelatin・Sharply lower performance in photographic gelatin(Overseas) ・Robust demand in gelatin for food and capsules
・Price revisions

 Peptide Division:(Japan)・Competition against other materials(Overseas) ・Sluggishness in Chinese and Asian markets
 Casing Division:・Strong sales in North America and exports to China(¥ million)
20,000

Sales (Left)
Segment Profit (Right)

19,0002,200

18,0002,000

17,0001,800

16,0001,600

15,0001,400

2011/3Financial Results Presentation for the Year Ended March 31, 2013

2,400

2012/3

2013/310

2 Results for Year Ended March 31, 2013
Formula Solution Business Sales fell, income rose from the year before
 Sales and income rose from two years before(¥ million)
13,000

1,400

Sales (Left)
Segment Profit (Right)

 Highlights
 Food Materials Division:・ Strong performance in gelling agents for desserts andstabilizers for meat products
・ Sluggishness in delicatessen applications
 Adhesives Division:・ Sealant (high-performance gaskets) sales begin
・ Sluggishness in bookbinding usage
・ Sales decline from partial business divestment

12,0001,200

11,0001,000

10,000

800

9,000

600

8,000

400

2011/3Financial Results Presentation for the Year Ended March 31, 20132012/3

2013/311

2 Results for Year Ended March 31, 2013
Statement of Income (P/L)(¥ million)

Net Sales
Gross Profit
Operating
IncomeOrdinary
IncomeNet Income

MarginMarginMarginMarginFinancial Results Presentation for the Year Ended March 31, 20132011/3

2012/3

2013/327,923

27,763

28,772

+3.6%

6,325

6,838

6,691

△2.1%

22.7%

24.6%

23.3%

---

1,486

2,015

1,618

△19.7%

5.3%

7.3%

5.6%

---

1,383

2,002

2,002

△0.0%

5.0%

7.2%

7.0%

---

1,051

1,375

1,565

+13.8%

3.8%

5.0%

5.4%

---

Change12

2 Results for Year Ended March 31, 2013
Balance Sheets (B/S)
 Total assets increased ¥2,077 million, driven by property, plant and equipment, inventory andinvestment securities
 The equity ratio rose from 34.4% to 38.6%, driven by retained earnings and foreign currencytranslation adjustments(¥ million)

Current assets

2012/3

2013/3

ChangeOther investments, etc.

14,935 15,319 +383
2,098 2,278 +180
6,449 5,839 △609
5,971 6,831 +860
△47
417
369
8,436 10,129 +1,693
5,387 6,287 +900
+30
18
48
2,055 2,768 +713
+50
975 1,025

Total assets

23,371 25,449 +2,077

Cash and deposits
Notes and accounts
receivable-trade
Inventory
Other

Noncurrent assets
Property, plant andequipment
Intangible assets
Investment securities

Financial Results Presentation for the Year Ended March 31, 2013(¥ million)
Total liabilities
Notes and accounts
payable-trade
Interest bearing debt

2012/3

2013/3 Change
15,263 15,481 +217

Retained earnings
Foreign currency translation
adjustments
Other

4,865
7,070
387
2,158
782
8,108
6,889
△1,3502,569

Total liabilities and net
assets23,371 25,449 +2,077

Income taxes payable
Provision for retirement
benefits
Other

Total net assets

5,323 +457
△40
7,030
81 △305
2,276 +118
△11770
9,968 +1,859
8,235 +1,345
△662
+688
2,395 △17313

2 Results for Year Ended March 31, 2013
Consolidated Statements of Cash Flows (C/F)
 Net cash provided by operating activities increased, driven by ¥1,938 million in income before
income taxes and minority interests and ¥825 million in depreciation and amortization
 Net cash used in investing activities increased, driven by purchase of property, plant andequipment and purchase of stocks of affiliates Net cash used in financing activities increased, driven by ¥330 million in redemption of bonds

2011/3

2012/3

2013/3

Net cash from operating activities

1,570

568

2,050

Net cash from investing activities△1,094475△1,557
492

△363
70

△733
△165
713
540

1,467

1,538

2,078

1,538

2,078

2,258

(¥ million)

Free cash flow
Net cash from financing activities
Increase in cash and cash equivalents
Beginning balance of cash and cash
equivalents
End balance of cash and cash equivalents
Financial Results Presentation for the Year Ended March 31, 2013

△376
180

14

2 Results for Year Ended March 31, 2013
Key Performance Indicators(¥ million)

2011/3

2012/3

2013/3

Net sales

27,923

27,763

28,772

Overseas sales ratio

29.5％

27.8％

33.6％

Operating income

1,486

2,015

1,618

Operating margin

5.3％

7.3％

5.6％

Net income

1,051

1,375

1,565

Net margin

3.8％

5.0％

5.4％

Shareholders’ equity

6,125

8,033

9,820

Equity ratio

28.5％

34.4％

38.6％

Financial Results Presentation for the Year Ended March 31, 201315

2 Results for Year Ended March 31, 2013
Topics (1) Overview of New Group Companies
China

Name

Beijing Nitta Collagen Casing Co., Ltd.

Location
Beijing, China
Establishment
September 2012
Business activities Production and sale of collagen casingsShareholding ratio
Nitta Hong Kong Ltd.
70％
Beijing Qiushi Agriculture Development Co., Ltd. 30％

VietnamName

Nitta Gelatin Vietnam Co., Ltd.

LocationLong An Province, Vietnam
Establishment
January 2013
Business activities Production and sale of gelling agents
Shareholding ratio
Nitta Gelatin Inc.
Shanghai International Trading Co., Ltd.
Financial Results Presentation for the Year Ended March 31, 2013

75％
25％
16

2 Results for Year Ended March 31, 2013
Topics (2) Gelatin-related Mass Media Coverage
TV Program : Tameshite Gatten
NHK General TV, February 27, 2013
Episode : One Shake of That Magic White Powder
Can Change the Way You CookTV Program : Hanamaru Market
TBS TV, April 18, 2013
Segment : New Surprising Waysof Using Gelatin

Nikkan Gendai newspaper, March 25, 2013
Column: Woman Investors Lead The Market (Episode 13)“Nitta Gelatin of Skin Moisturizing Collagen Fame”
Financial Results Presentation for the Year Ended March 31, 201317

2 Results for Year Ended March 31, 2013
Share Distribution
Number of shares issued
15,770 thousand shares

Individuals
41.5%

Domestic
companies
38.9%

Securities
companies Financial
1.3%
institutions
17.5%
Foreigninvestors
0.8%
2012/3

Number of Shareholders
3,812

3,014

Individuals
96.9%

Individuals
95.5%

Individuals
32.8%

Domestic
companies
37.6%

Financial
Securities
institutions companies
25.9%
1.7%
Foreigninvestors
2.0%
2013/3Financial Results Presentation for the Year Ended March 31, 2013

Domestic
companies
1.7%
Financial
institutions
0.4%
Securities
companies
0.6%
Foreigninvestors
0.3%
2012/3

2013/3

Domestic
companies
1.3%
Financial
institutions
0.9%
Securities
companies
0.9%
Foreigninvestors
1.4%
18

3. Outlook for YearEnding March 31, 2014

Financial Results Presentation for the Year Ended March 31, 201319

3 Outlook for Year Ending March 31, 2014
External Business Environment in Year Ending March 31, 2014
 International gelatin prices are projected to remain high based on increased demand andtight raw material supplies.
 Asian countries should see steady economic growth, along with higher internal demand.
 Procurement costs in Japan will be impacted by the weakening yen.
 Energy costs are projected to rise in Japan.
(US$/kg)
10

Gelatin price (US$/kg)
8

6

4

13/03

12/12

12/09

12/06

12/03

11/12

11/09

11/06

11/03

10/12

10/09

10/06

10/03

09/12

09/09

09/06

09/03

08/12

08/09

08/06

08/03

07/12

07/09

07/06

07/03

2

Source: IMR INTERNATIONAL
Financial Results Presentation for the Year Ended March 31, 201320

3 Outlook for Year Ending March 31, 2014
Forecasts for Year Ending March 31, 2014(¥ million)

Net sales
Gross profit
MarginOperatingincomeOrdinary
incomeNet income

MarginMarginMargin2012/3 2013/3 2014/3
Vs. 2012/3 Vs. 2013/3(Forecast)
27,763

28,77232,700+17.8%+13.7%

6,838

6,691

7,000

+2.4%

+4.6%

24.6%

23.3%

21.4%

－

－

2,015

1,618

1,700

△15.7%

+5.0%

7.3%

5.6%

5.2%

－

－

2,002

2,002

1,890

△5.6%

△5.6%

7.2%

7.0%

5.8%

－

－

1,375

1,565

1,380

+0.3%

△11.9%

5.0%

5.4%

4.2%

－

－

Financial Results Presentation for the Year Ended March 31, 201321

3 Outlook for Year Ending March 31, 2014
Sales Forecasts by Segment
Segment profit

Net sales
売上高(¥ million)

2013/3 2014/3 Change 2013/3 2014/3 Change(Result)(Forecast)(Result)

Collagen Material business

18,674

22,200 +18.9%

1,817

2,070 +13.9%

Formula Solution business

10,097

10,500

+4.0%

1,151

960 △16.6%

－

－

－

(Elimination or corporate expenses)

Total

28,772Financial Results Presentation for the Year Ended March 31, 2013

32,700 +13.7%

1,349

△

1,618

(Forecast)

△

1,330

－

1,700

+5.1%

22

3 Outlook for Year Ending March 31, 2014
Investment Plan(¥ million)

2011/3

2012/3

2013/3

2014/3

Capital investment
Depreciation

946

673

1,193

3,400

898

841

825

900

(Forecast)

2014/3 Outline of Main Capital Investments(¥ million)

Investment
amountUpgrade collagen casing production
facilities in North America

400

Build a North American peptide plant

1,200

Others1,800

Financial Results Presentation for the Year Ended March 31, 2013

Investment benefit (goal)
Improve productivity and quality
Production capacity of 1,000 tons (Start operations inyear ending March 31, 2014)
Developing a casing production and sales framework in
China, and facilities for expanding the sealing material
business and improving energy and production
efficiency, among others23

3 Outlook for Year Ending March 31, 2014
Shareholder Returns<Dividend forecast>Year ended March 31, 2013 :¥8 per share year-end dividend( ¥6 ordinary dividend )( ¥2 commemorative dividend )Year ending March 31, 2014 : ¥12 per share annual dividend( ¥6 interim dividend )( ¥6 year-end dividend )<Shareholder Benefit Program>
Plans call for continuing the program
Benefit details■ 100 to less than 500 shares : ¥1,000 shopping certificate for Nitta Gelatin products■ 500 or more shares : Nitta Gelatin products worth ¥3,000, such as health foods
Financial Results Presentation for the Year Ended March 31, 201324

4. Medium-Term
Management Plan

Financial Results Presentation for the Year Ended March 31, 201325

4 Medium-Term Management Plan
Growing Asian Economies
Projected per-capita GDP(US$)
14,000(Millions)
1,600
2020

China

12,000Population projections
2010

1,400

10,000

1,200

Thailand

8,000

1,000

Indonesia
6,000

800

4,000

600

Vietnam

2,000

India

0

400
200

2011

2017

2020

China

India

ASEAN6

Source: Estimates from IMF-World Economic Outlook
Financial Results Presentation for the Year Ended March 31, 201326

4 Medium-Term Management Plan
Gelatin Consumption Per Person(Consumption: grams/person)(Per-capita GDP: US$ thousand)

60

160

Japan 133 g

133 g

45

120

30

80
58 g

15

China

56 g

37 g
23 g

Japan’s GDP(left axis)

10 g
9g

0

1970

1980

1990

2000

ASEAN6
India

2010

40

30 g
15 g

0

2020

Sources: Nitta Gelatin estimates, IMF-World Economic Outlook
Financial Results Presentation for the Year Ended March 31, 201327

4 Medium-Term Management Plan
Outlook for Global Gelatin Demand(Tons)

2010

2020

Growth rateJapan

17,000 → 17,000

0％

Asia

72,500 → 129,000 78％

World 346,000 → 425,000 23％

Financial Results Presentation for the Year Ended March 31, 201328

4 Medium-Term Management Plan
Annual Asian Meat Consumption Per Person
(ｋｇ)
60

Beef

Japan

China

Vietnam

Poultry

The Philippines

Pork

India

50
40
30
20

10

128

1,347

2011 Population (Millions)
Financial Results Presentation for the Year Ended March 31, 2013

89

96

2009

2000

1990

2009

2000

1990

2009

2000

1990

2009

2000

1990

2009

2000

1990

0

1,207

Sources: FAOSTAT, IMF-World Economic Outlook29

4 Medium-Term Management Plan
Trends in China’s Real GDP and Cosmetics Market(Retail sales : billion yuan)
150

120

(Real GDP : billion yuan)
1,500

Cosmetics retail sales
Real GDP

1,200

90

900

60

600

30

300

0

0

2005

2006

2007

2008

2009

2010

Sources: Euromonitor International, IMF-World Economic Outlook
Financial Results Presentation for the Year Ended March 31, 201330

4 Medium-Term Management Plan

Basic Strategy

Five Strategic Priorities
1. Achieve globally competitive costs
2. Reinforce supply capabilities and expand sales
3. Promote development-based sales
4. Pursue product development and basic research
5. Implement global management and humanresource development
Financial Results Presentation for the Year Ended March 31, 201331

4 Medium-Term Management Plan

Corporate Slogan

Financial Results Presentation for the Year Ended March 31, 201332

4 Medium-Term Management Plan
Medium-Term Management Plan(¥ million)(¥ million)

50,0005,000

Net sales (left scale)Operating income (right scale)
40,00038.6
billion30,00027.9
billion27.7
billion28.7
billion41.0
billion32.7
billion

4,000

3,000

20,0002,000

10,0001,000

2011/3 2012/3 2013/3 2014/3 2015/3 2016/3
Financial Results Presentation for the Year Ended March 31, 201333

4 Medium-Term Management Plan
Overseas Sales Ratio(¥ million)

Overseas sales
Domestic sales

40,00044%

30,000

45%

39%

29.5%

27.8%

33.6%

70.5%

72.2%

66.4%

61%

56%

55%

2011/3

2012/3

2013/3

2014/3

2015/3

2016/320,00010,000

0

Financial Results Presentation for the Year Ended March 31, 201334

4 Medium-Term Management Plan
Trends in Composition of Net Sales and Segment Profit
Net sales(¥ million)

Segment profit(¥ million)

Formula Solution business
Collagen Material business

6,000

Formula Solution business
Collagen Material business

40,00029%

29%

30,000

32%

35.1%

3,000

20,000

71%
64.9%

34%

4,000

32%

10,000

5,000

71%

38.8%

32%

2,000

66%

68%
1,000

0

61.2%

68%

2013/3

2014/368%

0

2013/3

2014/3

2015/3Financial Results Presentation for the Year Ended March 31, 20132016/3

2015/3

2016/335

4 Medium-Term Management Plan
Business Strategies
Division

Gelatin

PeptideCasingFood materials
Adhesives

Strategy• Hone competitiveness by achieving globally competitive costs• Convert Group companies in India into subsidiaries• Increase supply capabilities: Boost production in North America andIndia, and strengthen new supply bases• Expand sales: Develop differentiated products and new applications,and create new markets• Strengthen supply capabilities and expand sales• Expand business in China• Popularize the global brand Wellnex• Enhance North American plant productivity and expand sales• Promote efforts to build a production and sales framework in China• Expand sales by strengthening application lab functions• Expand business in Vietnam• Enlarge business by expanding sealing materials globally

Financial Results Presentation for the Year Ended March 31, 201336

4 Medium-Term Management Plan
R&D Strategy (Life Science)• Expand the materials business for regenerative
medicine (drug delivery systems(DDS), artificial bones,
skin substitutes, etc.)• Promote the development of cell culture materials for
iPS and ES cells, etc.

Strengthen the management system• Enhance management transparency• Enhance the global management system: Put Groupwide IT infrastructure in place• Implement global human resource development
Financial Results Presentation for the Year Ended March 31, 201337

4 Medium-Term Management Plan
Capital Investment
Planned investment: ¥11.0 billion(April 2013 to March 2016)• Construct U.S. peptide plant• Deploy new facilities in the casing business• Improve North American plant productivity• Develop a production and sales framework in China• Deploy facilities to boost efficiency at the Osaka Plant• Deploy facilities to ramp up gelatin production

Financial Results Presentation for the Year Ended March 31, 201338

4 Medium-Term Management Plan

Financial Results Presentation for the Year Ended March 31, 201339

Thank you for your attention.

Financial Results Presentation for the Year Ended March 31, 201340

5. Appendix

Financial Results Presentation for the Year Ended March 31, 201341

5 Appendix
Corporate Philosophy
Corporate Philosophy
Based on a spirit of empathy andsincerity, we, the members of the
Nitta Gelatin Family, arededicated to the development ofour business and contributions to
the global community.
We will lead prosperous andfulfilling lives through ourcompetence and utmost efforts.

Nitta Gelatin handbooks
Medium-Term Management Plan
Corporate Philosophy
Code of Conduct

Code of Conduct (English version)
Financial Results Presentation for the Year Ended March 31, 201342

5 Appendix
Founding History
Chojiro Nitta
Moved alone from Matsuyama to Osaka at age 20
Apprenticed in a leather factory

Nitta Belting Co., Ltd.

With ingenuity and resolve, founded

Nitta Leather Belting Limited
Partnership Company
The first producer of leather powertransmission belts in Japan
Procurement of tanning for
producing leather belts
Bought and cultivated large tractsof wilderness in Hokkaido tosecure bark from oak trees(logging, planting, and reclamation as
pasture and farming land)Business expansion and diversification

Nitta Corporation
Production of rubber belts inaddition to leather

Nitta Rubber Industrial Co., Ltd. 1914

Produced animal glue from scrap
cowhide, the byproduct of belt
production

Nitta Glue and Gelatine Co., Ltd.

Produced plywood from oak trunks
and scrub, the byproduct of tannin
production

Nitta Veneer Mfg. Co.

Went into horse ranching after
logging the land

Financial Results Presentation for the Year Ended March 31, 2013

1885

Nitta Gelatin Inc.

Nittax Corporation
Nitta Ranch Corporation

1918

1919

1948
43

5 Appendix
Gelatin and Two Types of CollagenHigh

Molecular Size

Molecular

Property

Application

Low

CollagenGelatin- Film forming ability- Water retention- Skin care
- Beauty benefits- Gelling property- Water retention- Foamability- Film forming ability

CasingCosmetics
Advanced healthcare

Food
Pharmaceuticals
Photographic
materials
Advanced healthcare

Financial Results Presentation for the Year Ended March 31, 2013

Molecular

Collagen
Peptide

Amino
Acid

- Protein reinforcement- Bones, joints and skin

Food
Health foods
Healthcare
44

5 Appendix
Addressing a Changing Market Landscape････ Functional peptides,
Medical gelatin and collagen2010s Food for seniors :Easily swallowed foods,
Protein-rich foods
2000s Delicatessen items and Desserts soldat convenience stores
Pharmaceuticals and health foods : Capsules
1990s Confectionery : Gummy candies, Chewable candies
1980s Silver-halide photos : Photographic film, printing paper

1960s Microcapsules : Pressure sensitive paper
1918 Commenced production of animal glue and gelatin:
Matches and Record jackets
Financial Results Presentation for the Year Ended March 31, 201345

5 Appendix
HistoryJan. 1918
Jan. 1935
Feb. 1945
Feb. 1968
Mar. 1971
Aug. 1974
Apr. 1975
Jul. 1979
Apr. 1982
May 1990
Aug. 1996
Apr. 1998
Jan. 1999
Apr. 2004
Sep. 2004
Dec. 2004
Dec. 2010
Sep. 2011
Dec. 2011
Mar. 2012
Sep. 2012
Dec. 2012
Jan. 2013

Started production of gelatin and glue for the first time in Japan
Completion of Osaka Factory
Established Nitta Glue and Gelatine Co., Ltd. [Renamed Nitta Gelatin Inc. in 1960]
Established Hikone Gelatin Inc. (currently a consolidated subsidiary)
Launched the Adhesives Division
Launched the Food Division
Established Nitta Gelatin India Ltd. (India) (currently an affiliate company)
Established Nittta Gelatin NA Inc.(U.S.A.) (currently a consolidated subsidiary)
Established Bostik-Nitta Co., Ltd. (currently an affiliate company)
Established Nitta Gelatin Canada, Inc.(Canada) (currently a consolidated subsidiary)
Established Nitta Casings Inc.(U.S.A.) (currently a consolidated subsidiary)
Established Nitta Casings (Canada) Inc.(Canada) (currently a consolidated subsidiary)
Established Aibis Co., Ltd. (currently a consolidated subsidiary)Completed a gelatin plant at Nitta Gelatin India Ltd.(India)
Established Alma Corporation Inc. (currently a consolidated subsidiary)
Established Nitta Biolab Inc. (currently a consolidated subsidiary)
Established Nitta Gelatin Holding, Inc.(U.S.A.) (currently a consolidated subsidiary)
Established Nitta Gelatin USA, Inc.(U.S.A.) (currently a consolidated subsidiary)
Established Guangdong Baiwei Bio Material Co., Ltd. (China) (currently an affiliate company)
Established Shanghai Nitta Gelatin Co., Ltd. (China) (currently a consolidated subsidiary)
Listed shares on the Tokyo Stock Exchange Second Section
Established Nitta Hong Kong Ltd. (China) (currently a consolidated subsidiary)
Established Beijing Nitta Collagen Casing Co., Ltd. (China) (currently a consolidated subsidiary)
Listed shares on the Tokyo Stock Exchange First Section
Established Nitta Gelatin Vietnam Co., Ltd. (Vietnam) (currently a consolidated subsidiary)

Financial Results Presentation for the Year Ended March 31, 201346

5 Appendix
Nitta Gelatin’s Highlights
 Gelatin share
1st in Japan, 4th worldwide
 Three growth drivers
Gelatin, peptide, and casing Global network
Business sites and sales networks
in North America and Asia
 Solution capabilities
Application development and proposals
High-performance gaskets development
Financial Results Presentation for the Year Ended March 31, 201347

5 Appendix
Nitta Gelatin’s Growth Strategies

Domestic

Develop new products
Cultivate new markets

Overseas

Expand business in
Asia and North America

Financial Results Presentation for the Year Ended March 31, 201348

5 Appendix
Gelatin Share

Global Gelatin manufacturers
and Production Capacity

Gelatin Sales Volume in Japan
Domestic
Company B

Dominant
No.1 share

Others

8.3%

7.2%

World’s 4th
Asia’s largest
Overseas
Company A(France)

OthersDomestic
Company A

24.8%

31.8%

Nitta Gelatin

59.7%

24.9%

Overseas
Company D(France)

Nitta Gelatin
Group

5.3%

4.7%

Overseas
Company C(Belgium)

Overseas
Company B(Germany)

22.3%

11.0%

Source: Gelatin Manufacturers Association of Japan (Year ended March 2012)
Data compiled by Nitta Gelatin based on reports by Gelatin Manufacturers ofEurope and Gelatin Manufacturers Association of Asia Pacific

Domestic Company A: Engaged in leather-related, non-leather-related (gelatin division, collagen division) and other businesses.
Discontinued integrated gelatin production and outsourced production to partner plants in Japan and overseas.
Overseas Company A: A business division of a global food company
Overseas Company B: A company specializing in gelatin and peripheral businesses
Overseas Company C: A business division of an international chemicals manufacturer
Financial Results Presentation for the Year Ended March 31, 201349

5 Appendix
Gelatin : A Well-Established Yet Innovative
Global Niche Product
Global gelatin production

400

GDP correlation(Thousand tons)

Economic growth in Asia
350

Gelatin demand expansion
300

Trends in major Asian countries’
economic growth rates (%)
Country250

0'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11

Source: Estimated by Nitta Gelatin based on reports by Gelatin Manufacturersof Europe and Gelatin Manufacturers Association of Asia PacificFinancial Results Presentation for the Year Ended March 31, 20132012
Population2010 2011(Millions)
est.

China

1353.8 10.4

9.2

7.8

India

1223.2 10.1

6.8

4.9

Indonesia

244.5

6.2

6.5

6.0

Vietnam

90.4

6.8

5.9

5.1

Source: IMF-World Economic Outlook 2012.10

50

5 Appendix
Gelatin Production Volume by Region (2010)
Total production volume: 346,000 tons
Total population: 6.83 billion
EuropeProduction
volumePopulation

North America

34.7％

Production
volume

10.4％

15.8％

Population 5.0％

Asia and Oceania
AfricaProduction
volumePopulation

Production
volume30.9％

Population

0.6％
14.6％

61.2％

Latin America
Production
volume17.9％

Population

8.6％

Production volume: Nitta Gelatin estimates
Financial Results Presentation for the Year Ended March 31, 201351

5 Appendix
Collagen Material Business :Raw Materials Procurement Capability
By-products of meat industry
Bovine bones(10 million head’s worth)

Pig skin(10 million head’s worth)Fish scales(2,000 million fish)

Gelatin 10,000 tons

Reference
Japan’s Livestock (FY2009)
Cows : 1.2 million head
Pigs : 16 million head
Japan’s farmed fish (FY2008)
1,600 million fish

Financial Results Presentation for the Year Ended March 31, 201352

5 Appendix
Japan Leads the World in Collagen Peptide
Trends in collagen peptide
sales volume in Japan (tons)
6,000

Overseas
Japan acts as a global trend-setter

4,000

2,000

0

'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11
Source: Gelatin Manufacturers Association of Japan

Functional research :For bone, joint and skin
Financial Results Presentation for the Year Ended March 31, 2013

Author: Professor Hiroshi Manoof Josai University

Nihon Ryutsu Sangyo Shimbun,
January 1, 2011 issue53

5 Appendix
An Expanding Collagen Casing Market
Collagen casing production volume

8,000(million meters)
OthersChina
Asia-Pacific (outside China)
EuropeNorth America

6,000

Collagen casing

4,000

2,000

0

'06

'07

'08

'09

Financial Results Presentation for the Year Ended March 31, 2013'10

Sausage manufacturing54

5 Appendix
Focused on Asia : Platform for Expanding Businessin 9 Asian Countries Already in PlaceJapan Nitta Gelatin [Production and sales]● : Nitta Gelatin Group

Hikone Gelatin [Production]
Aibis, Alma, Nitta Biolab [Sales]

China
Shanghai Nitta Gelatin [Sales]
Guangdong Baiwei Bio Material [Production]●
Beijing Nitta Collagen Casing [Production and sales]

■
●
■

●

●

●●
●

■

●

●

■

India

■
●

Nitta Gelatin India [Production and sales] ■Bamni Proteins, Reva Proteins [Production]

Nitta Gelatin Vietnam[Production and sales]■
Financial Results Presentation for the Year Ended March 31, 2013

Vietnam■ ： Overseas agents
South Korea
China
TaiwanVietnamSingapore
Indonesia
Thailand55

5 Appendix
Sealant Revolution [High-Performance Gaskets]
Automated dosing by robot
Conventional: Manual work

Financial Results Presentation for the Year Ended March 31, 201356

5 Appendix
Sealant Revolution [High-Performance Gaskets]
１mm

Gasket size

４mm

Type

CIPG

UVFG

FIPFG

Application
examplesDigital cameras
Smartphones

Gas meters
LED lights

Electrical cabinet
Automobile doors

UV curing system
Non-foam gasket
Financial Results Presentation for the Year Ended March 31, 2013

Two component
systemFoam gasket
57

5 Appendix
Sealant Revolution [High-Performance Gaskets]

Smart meters

Financial Results Presentation for the Year Ended March 31, 201358

5 Appendix
External Business Environment in Year Ending March 31, 2014
 International gelatin prices are projected to remain high based on increased
demand and tight raw material supplies.
 Shift to a weakening yen
 Asian countries such as China and India should see steady economic growth, alongwith growing demand for casing, gelatin and peptide.
Gelatin price （US$/kg）

Forex rate (¥/US$)

10

140

Gelatin price : US$/kg (left)

Forex rate : \/US$(right)

13/03

12/12

12/09

12/06

12/03

11/12

11/09

11/06

11/03

10/12

10/09

10/06

10/03

09/12

09/09

09/06

09/03

08/12

60

08/09

2

08/06

80

08/03

4

07/12

100

07/09

6

07/06

120

07/03

8

Source : IMR INTERNATIONAL, TTM rate
Financial Results Presentation for the Year Ended March 31, 201359

5 Appendix
Global Mobile Phone Market Outlook (Shipment Volume)(Million units)
2,000

Mobile phones
Smartphones
1,500

1,000

500

0

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: Yano Research Institute Ltd.
Financial Results Presentation for the Year Ended March 31, 201360