Sustainability Management Division,
Nichirei Corporation
Nichirei Higashi-Ginza Building, 6-19-20 Tsukiji, Chuo-ku,
Tokyo 104-8402, JapanThe Nichirei
WebsiteNichirei Group
Integrated ReportContents

Overview of Nichirei Communication
Financial Information
Information
Financial		2 Nichirei Management Principles and Sustainability Policy

Non-financial Information
Non-financial
Information• Announcements of financial results

Management Strategy

		4
12
14
16
18
20
21

Message from the President
Working to Realize Our Vision for 2030
Financial Strategy
Promoting Sustainability Management
Nichirei Group Material Matters
KPIs for Material Matters
DX Strategy

Value Creation Story

22
24
26
28
30
32
34
42
44

Business Overview
Nichirei by the Numbers
History of the Nichirei Group
Our Path for Creating Value: Nichirei’s History in Frozen Foods
Value Creation Process
Nichirei’s Business Model and Advantages
Helping to Resolve Social Issues through Our Business
Creating New Value
Nichirei’s New Businesses: Challenges beyond Current Fields

Business Portfolio
Medium-term Business Plan

46 Business Portfolio
48 Previous Medium-term Business Plan: Review of WeWill 2021
50 Medium-term Business Plan Compass Rose 2024

Business Strategy

52
56
60
64
66

Processed Foods Business
Temperature-controlled Logistics Business
Marine, Meat and Poultry Products Business
Bioscience Business
Development of New Technologies

Sustainability

68
72
74
76
78
80
82
83
84
86

Addressing Climate Change (TCFD)
Decarbonization and the Elimination of CFCs
Conserving Water Resources and Biodiversity, and Using Less Plastic
Building a Sustainable Supply Chain
Human Resource Strategy
Cultivating Human Resources and Improving Work Satisfaction
Health Management
Occupational Health and Safety
Providing Safe Products and Services
Stakeholder Engagement

Corporate Governance

88
92
100
102
104
106

A Dialogue between Outside Directors
Corporate GovernanceInternal Control/Compliance
Risk Management
Directors, Audit & Supervisory Board Members and Executive Officers
Officer Career Summaries

Data

108
110
112
114
116
117
118
120
122
130
131
132

Financial and Non-financial Highlights
Overview of Medium-term Business Plans
11-Year Financial Highlights
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statement of Comprehensive Income
Consolidated Statements of Changes in Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Investor Information
Company Information
Global Network•• PPresentation
resentation meetingsbusinessplans
meetingsfor
formedium-term
medium-termbusinessplans

Engagement•• BBusinessusinessbriefings
briefings• S
takeholder Engagement
ステークホルダーエンゲージメント•• TTeleconferences
eleconferenceswith
withsecurities
securitiesanalysts
analystsand
andinstitutional
institutionalinvestors
investors• General Meeting of Shareholders• General Meeting of Shareholders• Annual securities report(Japanese only)

Reports•H
 OPPE report forshareholders and individual
investors (Japanese only)•• Integrated
ntegrated Report​

ニチレイグル ープ

CSRレポート

Integrates
I Report​
ntegrates
importantfinancialnon-andimportantand
financialfinancialinformation
non-financial information• Information on• サステナビリティ情報• ESG Information• ESG Information

Sustainability

WebsiteESGESG
information​
information​

Scan here for information
サステナビリティ情報はこちらから​
on sustainability

important tool for communicating with shareholders, investors and all other

Nichirei Corporation and its consolidated
subsidiaries in Japan and overseas

stakeholders. We aim to communicate financial information, non-financial(As of March 31, 2022)

information and business strategies in an easily understandable way in order tofacilitate a clear understanding of Nichirei’s corporate value and vision.
We would also like readers to know about our efforts toward achieving
sustainable growth, enhancing corporate value and resolving social issues throughour business activities.
Notes: 1. Amounts and percentages are rounded to the nearest whole unit.
2. We have omitted trademark (™) and registered mark (®) symbols where applicable.
3. Fiscal years begin on April 1 of the previous year, and end on March 31.

Statements in this report pertaining to the future, such as forecasts of businessperformance, are rational judgments based on currently available information and(Some information from before and after thisperiod is included.)Referenced Guidelines
GRI Standards
I FRS Foundation (formerly VRF)
* International Integrated Reporting FrameworkT ask Force on Climate-related Financial
Disclosures (TCFD)

contain a degree of uncertainty. Actual business performance may differ due to a

Issue Datevariety of factors.

November 2022

Nichirei Group Integrated Report 2022

Data

Note on Forward-looking Statements

Reporting Period
April 1, 2021 to March 31, 2022

Corporate Governance

Reporting Companies

The Nichirei Group considers the Nichirei Group Integrated Report 2022 to be an

Sustainability

Editorial Policy

Business Strategy

Scan
Scan here
here forfor IRIR information
nformation​

Scan here
Scanforhere forBusiness Portfolio
Medium-term Business Plan

• IR Information• IR information

Value Creation Story• CSR Reports

Management Strategy• Announcements of financial results1Nichirei Management Principles and Sustainability Policy
ニチレイグループ企業経営理念

MissionG uiding Principles

1. Prioritize customers, safety, and quality
2. Ethical operations
3. Transparent management
4. Sustainable communities
5. Value creation

Good corporate
governance
Cooperative
relationship with
communities

Sustainable supply
chain and circular
economyWe aim to realize an ethical andsustainable supply chain as well as a
circular economy by building enduring
and positive partnerships, whileconsidering the environment, humanrights and working conditions.

Creating new value
We constantly strive to create new
products and services, while pursuingbusiness activities that help solve
issues faced by our customers andcommunities.

- Making Our Communities
More Sustainable -Diversityand decent work2

We engage only in honest corporate activities
that comply with the laws and regulations ofeach country in which we operate, respecting
international norms of behavior and ensuringsound corporate ethics.

We continuously work to earn thetrust of our customers andcommunities by meeting diverse
demands as well as offering safe,
stable, and high-quality supply.

Nichirei Group Integrated Report 2022

Data

Thoroughcompliance

We respect the diversity of our employees,
and strive to ensure occupational health andsafety, provide fair treatment and opportunities
for personal development, and continuously
improve the workplace to enable every
employee to thrive.

We strive to preserve the global
environment and biodiversity by
reducing greenhouse gas emissions
and managing food and water
resources appropriately.

Safe, high-quality
products and services

Corporate Governance

Climate change
initiatives andbiodiversity
conservation

The Nichirei Group is committed toresolve social issues and create newvalue through its business activities,
which include the procurement,
production, logistics and sale of food,
while considering the impact of those
activities on the global environment
and local communities and respectfor human rights. We publicly
disclose the details of these activities topromote stakeholder dialogue andincrease transparency. Furthermore,
we work to create more sustainablecommunities by fulfilling our
responsibilities as a company that
supports good eating habits andhealth.

Sustainability

The Nichirei
PledgeBusiness Strategy

We work to develop our communities andresolve social issues as a responsible
corporate citizen by engaging in dialogue
and close cooperation with our
stakeholders.

Business Portfolio
Medium-term Business Plan

We are committed to employing highly
transparent and fair management practices
through stakeholder dialogue andinformation disclosure, while striving for
appropriate resource allocation and swift
management decisions.

Value Creation StoryS ustainability
PolicyWe will continue to support good eating habits
and health by leveraging our state-of-the-art
manufacturing practices that optimize nature’s
bounty, along with our leading-edge logistics
services.

Management Strategy

Focus on Lifestyles, andProvide True Satisfaction

Vision3

Message from the PresidentManagement Strategy
Value Creation Story
Business Portfolio
Medium-term Business Plan
Business Strategy

We will pursue sustainability
management that grows
our business as we help toresolve social issues.

Sustainability

Kenya Okushi
Corporate Governance

Representative Director, President
Nichirei Corporation

Data

4

Nichirei Group Integrated Report 2022

5

Message from the President

Challenges in a Changing Operating Environment

the business environment undergoes major change. Nichirei’s logo is positioned as the “N” for north.
Our destination is the achievement of our Management Principles and our long-term management goals
toward 2030, which we established in 2019.
Our operating environment has changed significantly in recent years. In addition to the prolonged
disruption caused by the COVID-19 pandemic, climate change is causing problems in supply chainsand geopolitical risks such as the war in Ukraine have emerged. I believe that dealing with these abrupt

Under its previous medium-term management plan, WeWill 2021 (FY2020-FY2022), Nichirei aimed tochanges requires us to fundamentally reconsider our assumptions about the nature of our business.

strengthen its foundation for growth by making capital expenditures, mainly in the processed foods andtemperature-controlled logistics businesses. We also conducted initiatives to realize sustainable growthstart in terms of our business results, the impact of abrupt changes in our operating environment
caused operating profit in the final year to fall substantially short of the plan.

Sustainability Management at Nichirei and theGrowth Strategies of Compass Rose 2024

By business, we increased net sales and profits in the processed foods business up to the second

Establishment of the Nichirei Group Sustainability Policy

impacted by the COVID-19 pandemic and the sudden jump in prices for raw materials in the plan’s final

In Compass Rose 2024, we have revised our former Basic CSR Policy as the Nichirei Group

year. On the other hand, we achieved stable growth and improved profitability in the temperature-

Sustainability Policy: The Nichirei Pledge. Through business activities based on this policy, we willcontrolled logistics business by strengthening its foundation for quickly adapting to changes in theramp up sustainability management to improve both social and economic value as we fulfill ouroperating environment. Expansion of the overseas business progressed steadily through corporate

responsibilities as a company that supports good eating habits and health. Because it deals with food,acquisitions in Europe and other measures.

the Nichirei Group cannot avoid addressing the issues of climate change countermeasures andAs a Group-wide initiative, we clearly identified five material matters (materiality) for which we set

sustainable procurement of raw materials and other products. These issues were included in thetargets consisting of measures and KPIs. These material matters cover areas including creating newmaterial matters we identified in FY2021, but we have updated the material matters in line with thevalue that helps to resolve social issues from the perspective of the SDGs, sustainable procurement,

times and reiterated them in a policy that will form the basis of our management.

Processed Foods

focus on achieving these targets while ramping up our ESG initiatives.

The COVID-19 pandemic has changed our eating habits. The growth in home cooking has increased
the need to save time and trouble, and in turn has strengthened demand for frozen foods. In order toConcept behind New Medium-Term Business
Plan Compass Rose 2024

keep growing as lifestyles change, we must develop high-value-added products that meet these newneeds and deliver them to customers. In FY2022, we invested in equipment at the Yamagata Plant andBusiness Strategy

and initiatives to address climate change. In the new medium-term business plan, we will maintain our

Business Portfolio
Medium-term Business Plan

year of the plan through concentrated investment in mainstay product categories, but the business was

Value Creation Story

throughout the Nichirei Group with the aim of improving capital efficiency, expanding shareholder
returns, and creating new value that supports good eating habits and health. Although we made a goodManagement Strategy

Review of the Previous Medium-term Business
Plan WeWill 2021

began operation of a production line that can handle personal-use1 single-serving products. Demand forsuch products is growing, backed by the prevalence of telework and the increasing number of elderly
meal for one person and can be prepared with only a microwave, are not limited to household use. Restaurants andother businesses where there is a shortage of labor are also expected to use them, thus helping toresolve a social issue. On the other hand, the pandemic, climate change and the war in Ukraine have

Sustainability

single-person households, among other factors. In addition, single-serving frozen foods that offer a complete

made stable procurement of raw materials difficult. The processed foods business has production
bases in Japan and overseas, including a factory in Thailand for our mainstay chicken products.
However, operations at that factory were substantially reduced in FY2022 as the COVID-19 pandemic
dragged on. Many of the factory’s employees are from Cambodia or other neighboring countries, and
GrowthTransformation
Paradigm shift
Embark on the road to 2030

Ramp up sustainability
management

Improve social andeconomic value

2025–2027

2022–2024

2019–2021

restrictions on cross-border movement made it difficult to maintain an adequate workforce. This
resulted in delays in supply to Japan, which was a factor in reduced sales and profits.
The experience brought home the urgent need to rethink our production network and systems forsustainable procurement of raw materials. From the perspective of sustainability, human rights issues in

Corporate Governance

A medium-term business plan serving as a roadmap to 2024,
for assured navigation toward improvement in corporate value

the supply chain are also a high priority. Under Compass Rose 2024, we will restructure our supply chain.
This will include considering a shift of some of our production network to Japan and stepping up domestic
procurement of raw materials for which we are highly dependent on overseas markets. By accomplishing6

our selling prices to reflect soaring raw material prices and other rising costs. Failing to do so will result inis the figure on maps and nautical charts that indicates north, south, east and west. The concept

a drop in cash flow that will make it impossible for us to sustain the business.

behind the plan is that the entire Nichirei Group will use it to navigate forward with assurance, even as

1. Personal-use products: Single-serving meals (one-person meals), and foods meant to be eaten on the go, with one hand

Nichirei Group Integrated Report 2022

Data

these measures, we intend to get back on a growth track. Another priority will be to appropriately adjust
Our new medium-term business plan for FY2023-2025 is called Compass Rose 2024. A compass rose7

Message from the President

Temperature-controlled Logistics

installing solar power generation equipment, using natural refrigerants at new facilities and converting
equipment at existing main bases, and reducing power consumption by introducing high-efficiency

container shortages. Meanwhile, various needs for temperature-controlled logistics increased infreezing and refrigeration equipment. We are also taking concrete steps to address growing demands

overland transport. However, the logistics industry is experiencing a chronic shortage of drivers that isfrom investors and other stakeholders for the elimination of chlorofluorocarbons. This will be a large

2

expected to worsen from 2024 onward, when the so-called Work Style Reform Act goes into effect forinvestment that entails a trade-off with profit from a short-term perspective, but we will maintain control

truck drivers in Japan. The amount of cargo is expected to continue increasing, so the question ofof the balance between investment and profit in our medium- to long-term planning.

whether all these goods can be transported has become a major social issue.

Another area of focus for investment is digital technology. We have been working to upgrade our core

We have been working to strengthen trunk-route transport since the previous medium-term businesssystems and strengthen information security, but achieving sustainable business growth will requirebusiness process improvements and restructuring driven by digital technology. We will bring together

Tokyo and Osaka. Under Compass Rose 2024, we will continue to make proactive capital

initiatives from both inside and outside the Group to advance technologically and enhance our

expenditures to complete our truck-route infrastructure as soon as possible. Moreover, by combining

competitive advantages in the market.

a review of labor practices in the logistics industry with various measures such as our truck loading
dock reservation system, we will reduce drivers’ on-duty hours, thus helping to resolve a social issue

Managing Our Business Portfolio

and generating new business opportunities. This strategy leverages Nichirei’s advantages of having

We have adopted ROIC as a KPI for capital efficiency in Compass Rose 2024. Although we have planned
for a slight decline in ROIC due to the increase in new investments, we intend to maintain ROIC at 7% orvarious types of cargo.

higher to avoid an excessive decrease in capital efficiency, then to increase it to 9% or higher by 2030.
Doing so will require targets for each business in accordance with our portfolio. In Compass Rose 2024

In Japan, we will further expand our frozen food logistics platform, which handles domestic
distribution of products from the Nichirei Group and other companies, and utilize digital technology to

we have set weighted average cost of capital (WACC) and ROIC targets for each business. We will break

improve process innovation and raise the efficiency of onsite work. Overseas, we are steadily expanding

down ROIC to a level that enables management within each business, and monitor those KPIs.

business through proactive investment in the port business in Europe and other growth areas. We will

Investment decisions must also consider non-financial aspects. Discussions of potential investments

make the capital expenditures required to make full use of port facilities and coordinate functions acrossat Board of Directors meetings encompass CO2 emissions and water risks. We are considering

the organization with the aim of maximizing earnings from our businesses in Europe.

introducing internal carbon pricing,3 which will help us visualize non-financial value. Given that athorough response in the area of ESG could lower the cost of capital, we will allocate resources while

2. Formal name: the Act on the Arrangement of Related Acts to Promote Work Style Reform

Investing in Infrastructure
We plan to invest ¥120 billion over the three years of Compass Rose 2024. Half of that, approximately¥60 billion, will be the investments for growth I mentioned above, mainly in the processed foods andtemperature-controlled logistics businesses. The remainder will be focused on investment for theenvironment. Reducing our environmental impact is an urgent matter, and our initiatives include

3. A mechanism to promote low-carbon investments and measures, by which an organization sets its own carbon pricing to convert its CO2 emissions
into costs. This mechanism is used in reducing emissions, creating incentives to promote energy conservation, changing awareness inside theorganization, and decision-making guidelines for investments.

Creating New Value in Food and Health
We take a dual approach to creating new value, both within each operating company and under theBusiness Strategy

balancing factors such as a business’s evaluation based on ROIC and WACC and its growth potential.

Business Portfolio
Medium-term Business Planbases in key locations and its capabilities for handling a large volume of cargo and for combining

Value Creation Story

plan, and have established a large-scale logistics facility in Nagoya, which is located halfway between

Management Strategy

Maritime transport was significantly disrupted during the COVID-19 pandemic due to vessel delays andleadership of the holding company. New value is difficult to define, but I believe it is created byaddressing customer needs through business activities in areas close to our existing businesses. At
Long-term Management
Goals toward 2030

Material Matters (Materiality)
Backcastingfrom 2030

Focus on Lifestyles, and Provide
True Satisfaction

Promote innovation
Create new value that resolves social issues
Create high added value and maximize
capital efficiency

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

Net sales¥1 trillion
Overseas sales ratio
30%
Operating profit/Net sales 8%
ROIC
9% or higher

2027
2025

Contribute to good eating habits
and healthLong-term goals (measures and KPIs)

2024

Medium-term Business Plan Compass Rose 2024
Help to resolve social issues through our business; pursue capital efficiency

outside of our current business areas; rather, I believe that generating some sort of synergy with ourexisting businesses will ultimately enable us to provide new kinds of value unique to the Nichirei Group.
One of the Nichirei Group’s advantages is the supply chain it has created that extends from foodprocurement to production, distribution and sales. However, the pandemic has exposed vulnerabilities
in our procurement, driving home the need to strengthen the upstream part of our food supply chain.
We looked back over Nichirei’s history to consider how we can help resolve social issues using ourtechnologies and advantages. Potential areas included health, nutrition, and food ingredients that
reviewed the measures and KPIs of our material matters. In the meat and poultry products business,
we are working to develop new products with health value. We have been conducting research ofanimal feed that uses ingredients derived from flaxseed to improve the quality, taste and nutritional
value of meat. We are communicating the value of these products to consumers with the aim of
expanding sales by FY2025.
Food prices are projected to rise as the growth of the global population increases demand. For
stable procurement 10 or 20 years from now, we must consider expanding our focus to new foods

Data• Conduct business portfolio management• Grow core businesses and improve
low-profit businesses

The Nichirei Group has adopted self-management
based on the Japan Quality Award, the premierquality management framework.
Upon analysis of current conditions and organizing
data on changes in the environment, each Nichirei
business identifies its ideal form over a medium- tolong-term timeframe and creates an organizational
profile as a management strategy orientated towardrealizing that form. On this basis, Nichirei formulates
its medium-term business plans (each currently spanninga three-year period).

Medium-term
Business Plan

Reallocation ofmanagement resources• Create new value• Strengthen ESG response

expectations of current consumers and customers. The resulting products and services will not be far

take those factors into account, such as acerola. Focusing once again on these areas, we thenOrganizational Profile2022

the same time, our holding company should address latent needs to create value that exceeds the

Corporate Governance• Creating new value in food and health• Strengthening food processing and production
technology capabilities; enhancing logistics services• Realizing sustainable food procurement andresource recycling• Climate change initiatives• Securing and developing a diverse arrayof human resources

MissionSustainability

Nichirei Group Management Cycle

and ingredients. Some initiatives are already under way, and we will also allocate resources to research
Nichirei Group Sustainability Policy: The Nichirei Pledge

8

Nichirei Group Integrated Report 2022

9

Message from the President

and development of ingredients, including new protein sources such as plant-based meat analogues,
cell-cultured meat and edible insects.
Management Strategy

Establishing Sustainability Management in Practice and in Employee Mindsets
In addition to formulating the Nichirei Group Sustainability Policy, we reviewed our governance systemand established an advisory body to the Board of Directors in the form of the Group Sustainability
Committee, which deliberates on long-term sustainability initiatives. We concurrently established adepartment in our holding company for promoting sustainability and assigned persons in charge ofsustainability at each operating company.

Value Creation Story

We have dealt with sustainability issues before, but I think our officers and employees tended to focus
on financial value. Compass Rose 2024 therefore has a greater emphasis on sustainability management.
Our goal is to ensure that every employee is fully aware of sustainability in current or new work.
Without that perspective, those employees will not come up with new ideas, and I think it will bedifficult for them to make on-the-spot decisions. There is a limit to what I can communicate toemployees on my own, so in FY2023 we began holding study sessions for Company officers tohave participated, including those from related departments. We need every officer to understand therelevance of sustainability in their work, and to support and be fully conversant in our approach, sothey can discuss sustainability in their own words.
We also intend to use the Company intranet to enable all employees to access the latest information
the background and content of the issues being presented, they will not be able to choose the specificissues they must deal with or carry out their plans if they do.

FY2023 Launch of Three Portal Sites Accessible by All Employees to Communicate andExchange Information

digital technology and sustainability. I want to set up a system that not only raises all employees to a

We are establishing conditions that support the development of our human resources in the areas ofhigher level, but also allows motivated people to go even further. There are various approaches tohuman resource development, but I think individuality will be key going forward. In other words, weneed to consider development that suits each individual, so employees can succeed by displaying theirindividuality. That is why is essential that our vision for Nichirei defines and invests in the humanresources we require. Our human resources departments are also creating mechanisms that
Digital transformation (DX) portal site

Innovation portal site

Sustainability portal site

Business Strategy

and updates on the Company’s activities in order to promote dialogue and establish a sustainability
mindset among employees.

Business Portfolio
Medium-term Business Plan

deepen their basic understanding of sustainability and its historical context. More than 100 people

incorporate DX to focus on individuals. In FY2022, we replaced our core personnel information systemwith a new system that integrates management of all our human resource data for use in everything

Nichirei Three Years from Now:
A Corporate Group Where All Can Succeed by Displaying Their Individuality

integrated personnel information system for our succession plan in the future.

Strategic initiatives over the next three years will be crucial to attaining our long-term management goals
toward 2030. Our human resources are the key to achieving these goals. One of our material matters is

We have positioned the term of Compass Rose 2024 as a period of transformation that will take us tosecuring and developing a diverse array of human resources, and the development of the Nichirei

the midpoint of our drive toward 2030. Moving forward with sustainability initiatives, restructuring, andGroup depends on whether our diverse human resources are motivated and able to play an active role

upgrading and strengthening our business foundation will advance us to a new stage. To reiterate, inand grow. Naturally, we will promote the advancement of female employees and health management

order to do so it will be crucial for each employee to recognize how their own work relates to sustainability.

among all employees. We will also allocate management resources to developing talent in the field ofConstant attention by all of us in the Nichirei Group to social issues, thinking about how we can contribute,

digital technology. I fear that Nichirei may be falling behind in utilizing digital technology for businessand then acting on our own initiative will generate change.
The Nichirei Group will continue to value dialogue with its stakeholders as it fulfills its responsibilities

word “reskilling” means adding the skills society will require in the coming era, not re-learning what one

to society as a company that supports good eating habits and health through business activities, based

already knows.

on its Management Principles and the Group Sustainability Policy. We will also continue working for

The same can be said for sustainability. The study session for Company officers drove home one
point to me: Even if people have seen or heard about sustainability in the media, unless they understand10

sustainability management and capital efficiency to improve social and economic value. As we do so,Datainnovation. It is therefore imperative that our employees acquire the necessary digital skills. To me, theCorporate Governance

Toward Our Transformation

Sustainability

from training to job assignments. I also intend to use the human resource development system andwe look forward to your ongoing support.

Nichirei Group Integrated Report 2022

11

Working to Realize Our Vision for 2030

Contribute to good eating
habits and health2030
Overseas sales ratio

Operating profit/Net sales

ROIC

1 trillion

30%

8%

9% or higher

Promoting innovation to contribute to good eating habits
and health for all people by creating new valuethat helps to resolve the issues of customers and society

Address material matters

Create high added value andmaximize capital efficiency

FY2023-FY2025 Medium-term Business Plan

Compass Rose 2024

2022 to 2024
A period oftransformation
toward 2030

Identify material mattersfor the GroupR amp up sustainability
management
Pursue capital efficiencyR esolve social
issuesE xpand overseas
businessI mprove capitalefficiency

RealizeOur Vision
for 2030

Help to resolve social issues through our business; pursue capital efficiency
Create new value

Strengthen ESG
response

Conduct businessportfolio management

Commentary ( Page 16)

Commentary ( Page 14)

Commentary ( Page 42)

Grow core businesses
and improve low-profit
businesses
Details ( Page 46)

Corporate Governance

Set Our Long-termManagement Goals
toward 2030

2025 to 2027

2030

Details ( Page 50)

Allocation of Management Resources
Growth investment

Overseas businessexpansion

New business

Environmental measures

Promotion of IT and DX

Human resource development

Details ( Page 68)

Details ( Pages 21, 67)

Sustainability

The Path to Realizing Our Vision for 2030

To 2021

Business Strategy

Net sales

economic
value

Business Portfolio
Medium-term Business Plansocial value

Achieving Our Long-term Management
Goals toward 2030

Improve

Realize Sustainability
Management

Improve

Value Creation Story

TOWARD¥Management Strategy

Long-term Management Goal:
Realize Our Vision for 2030

Commentary ( Page 78)

Data

12

Nichirei Group Integrated Report 2022

13

TOWARD

2030

Financial Strategy
Message from the Officer in Chargecommunicate our growth story, investment approach,procurement and climate change countermeasures, andsustainability initiatives and other matters to ourit is crucial that these investments lead to concrete results.

stakeholders in a way that is easily understood.

To improve economic value, we must also be strongly
focused on lowering the cost of capital. Good financial*R etained Economic Profit. Our original indicator showing profit after deduction ofcapital costs.

results are important, but we will also endeavor to(Billions of yen)
Business Plan (Period)

POWER UP 2018

WeWill 2021

Compass Rose 2024

(FY2017-FY2019)(FY2020-FY2022)(FY2023-FY2025) Plan

Cash flows from operating activities

102.0

119.6

142.0

Director, Executive Officer;
in charge of Accounting & Tax,Business Management and Real Estate Division,
General Manager of FinanceCash flows from investing activities(49.6)(82.5)(109.0)Free cash flow

52.4

37.0

33.0

Business Portfolio
Medium-term Business Plan

Kenji Suzuki

Financial Strategy and Capital Policy

During the three-year period of the previous medium-term

Overseas sales in FY2022 totaled ¥97.6 billion.

In managing the balance sheet for the Group as a whole,with a dividend-on-equity (DOE) ratio of 3% as ourI am responsible for ascertaining the external environment

criterion, and flexibly conduct stock buybacks after

as well as internal financial conditions and demand forconsidering our capital requirements, the progress of ourfunds. Nichirei uses the debt-to-equity (D/E) ratio as a KPI

investment plans, and our share price level.

business plan, cash flows from operating activities were

Although we did not reach our target of ¥100 billion, wefor assessing the balance between financial soundness

largely in line with the plan at ¥119.6 billion, and capitallaid the groundwork for future earnings by making multiple

and capital efficiency. As such, we have a target D/E ratio

rationality and stability in fund procurement, we have set

expenditures totaled ¥93 billion, far exceeding any

corporate acquisitions and expanding refrigeratedof approximately 0.5 times to enable us to maintain ourstandards for both the short-term to long-term ratio andmedium-term business plans in the past. These were notwarehouse space in the logistics business in Europe.

credit rating and capacity to take on leverage, and in so

the direct to indirect financing ratio. In this way, we

doing secure funding for flexible strategic investments.

endeavor to diversify funding sources and methods,

Keeping in mind a balance between economic

investments from a medium- to long-term perspective,

returns, we steadily increased dividends and conducted

We plan to invest approximately ¥120 billion underincluding corporate bonds, borrowings and commercial

such as business process innovation and environmental

stock buybacks totaling ¥10 billion, maintaining ROE at

Compass Rose 2024, a significantly higher amount thanpaper, so we can respond to sudden changes in the

countermeasures, to strengthen the management base.

10% or higher. Profit attributable to owners of parent induring the previous medium-term business plan, but wefinancial environment. We also intend to consider

However, some issues remained in terms of asset

the final year of the plan was ¥23.4 billion and profit per

should be able to keep operating cash flow above ¥140

sustainable finance, which has been attracting attention

efficiency and return on our investments.

share was ¥176, both exceeding the initial target.

billion and maintain the D/E ratio and equity ratio at theiras a mechanism that facilitates the resolution ofcurrent levels.

environmental and social issues from a financial

Priority Measures of Medium-term Business Plan Compass Rose 2024
Helping to resolve social issues and pursuing capitaland we intend to improve capital efficiency throughout theefficiency are the core tenets of our current medium-termGroup by using ROIC-based business evaluations tobusiness plan, further increasing the importance ofdecide allocation of resources. We aim to increase ROIC

appropriately allocating management resources. Business

to about 7.5% in the final year of Compass Rose 2024,

portfolio management is a priority strategy. To promote
greater awareness of efficiency, we have introduced ROIC

and to 9% or higher as we head toward 2030.
The importance of intangible assets continues toincrease. Compass Rose 2024 calls for proactive

already using as KPIs, and will conduct logic tree analysis

investment in environmental measures and allocation ofaccording to the characteristics of each business andmanagement resources to areas such as human resource

monitor profitability and efficiency. The ROIC targets willdevelopment, promotion of digital transformation andalso be used as KPIs for determining officer remuneration,

brand building. We have also set quantitative targets forperspective.

Dividend per Share and ROE■■ Dividend per share

Equity Ratio and D/E Ratio (Including lease obligations)*

ROE■■ D/E ratio

(%)

(Yen)

14.0

100

11.9
80

11.7

10.9

10.9

11.3

50
42

40

30

(Times)

75

1.0

12.0
10.0

60

Equity ratio

(%)

0.8
50

8.0

50

0.6

6.0

32

4.0

20

44.3

25

46.9

47.3

50.1

0.5

0.5

0.5

49.4
0.6
0.4

0.5

0.2

2.0
0

0

2018

2019

2020

2021

2022

(FY)

Data

targets in addition to EBITDA and REP,* which we were

Dividends are our primary method of returning profits toshareholders. We will continuously increase dividends

Corporate Governance

To improve capital efficiency and expand shareholder

Sustainability

only expenditures for growth; we also allocated funds for

Business Strategy

Summary of the Financial Aspects of Medium-term Business Plan WeWill 2021

Value Creation Story

Cash Flows

Management Strategy

We will increase corporate value
by emphasizing capital efficiency
in resource allocation andmaintaining the optimal capital
structure.

non-financial matters such as creating new value, sustainable

0

0

2018

2019

2020

2021

2022

(FY)

* Interest-bearing debt ÷ Net assets

14

Nichirei Group Integrated Report 2022

15

TOWARD

2030

Promoting Sustainability Management
Message from the Officer in Charge

We will integrate our businessand sustainability strategies toachieve sustainable growth.

Board of Directors

Group Sustainability Committee

Secretariat: Sustainability Management
Division, Nichirei Corporation
Note: C ommittee members include all outside
directors and outside Audit & Supervisory
Board members.

Yuichi Takaku

Nichirei Biosciences

Strategic Planning
Department
Sustainability Promotion
Department

Strategic Planning
Department
Sustainability Promotion
Department

Strategic Planning
Department

Strategic Planning
Department

Sustainable food procurement is another urgent issue

infrastructure that takes the environment and humanfor us. The emergence of geopolitical and climate changerights into account. Initiatives include risk analysis

risks has significantly impacted raw material procurement

covering the entire supply chain and procurement thatthroughout the food industry, so we need to take action

complies with the Nichirei Group Supplier Code of
Conduct and Guidelines.

To achieve our long-term management goals toward

execution. Moreover, by consolidating Sustainability

2030, we identified five material matters for the Nichirei

Management, Strategic Planning, IT Strategy, Innovationfrom a medium- to-long-term perspective. In addition, weGroup, including climate change initiatives and sustainable

Planning & Development and Technology Management

are conducting initiatives to build sustainable procurement

procurement. For each, we set Group targets, consisting

into the Strategy Headquarters, we intend to strengthenof measures and KPIs. In FY2023, we established thethe link between management strategy and our SDG andGroup Sustainability Committee as a consultative body to

ESG initiatives.

Integrating Our Business and Sustainability Strategies

into the KPIs for determining officer remuneration. This

The Nichirei Group has grown with a business portfolio

single-year targets and action plans centered on ourcreates a mechanism that links remuneration to thebased on frozen foods and ingredients that support

material matters. The Group Sustainability Committee willholding company has been reorganized into aachievement of non-financial as well as financial targets,

people’s diets, and our logistics infrastructure. The

monitor progress and work with each operating company

dual-headquarters structure consisting of the Strategy

thereby strengthening our response to sustainability-

environment and society are the foundation of ourto steadily promote initiatives to achieve the targets.

Headquarters and the Corporate Management

related issues.

economic activities, so we must continue to fulfill ourI have witnessed how the importance of sustainabilitysocial responsibilities as a company that supports goodhas been widely shared within the Company. In addition

Headquarters. This will expedite decision-making andEnvironmental and Procurement Initiatives

eating habits and health. With a clear understanding ofto the material matters, the Nichirei Group Sustainability

this premise, we are implementing management

Policy: The Nichirei Pledge, which we established in April
2022, has become a part of the Company’s common

We are giving particular priority to addressing issues

under Medium-term Business Plan Compass Rose 2024.

language. We intend to extend this focus on sustainability

related to the environment and procurement. Due to theenergy including the introduction of solar power

I believe my role is to adopt a medium- to-long-term

further, until it permeates the entire Group. At the same

substantial impact of climate change on Nichirei as a foodgeneration equipment, using natural refrigerants in newly

perspective in devising strategies for helping to resolvetime, our officers and employees will work together toand logistics company, we are stepping up ourconstructed facilities, and converting to naturalsocial issues through our business activities andresolve social issues and create new value. In this way,environmental measures. We have set Group targets forrefrigerants at existing core sites. We believe that

formulating specific measures to link those strategies to

Nichirei will gain a competitive advantage and achieve

reducing CO2 emissions with the aim of becoming carbon

responsible initiatives for the environment will improve ourorganizational management.

sustainable growth.

neutral by 2050, and have been disclosing information

corporate value and lead to higher economic value, andbased on the TCFD recommendations. We are reducing

as such we are proactively conducting such initiatives

electricity consumption by installing high-efficiency

Group-wide.

Data

strategies to improve our social and economic value

freezing and refrigeration equipment, utilizing renewable

Corporate Governanceto the material matters, the Group’s initiatives to realize asustainable society, and similar issues. Concurrently, theSustainability

We have also incorporated third-party ESG evaluations

the Board of Directors. It deliberates on strategies related

16

Nichirei Logistics Group

Business Strategy

Enhancing Our Structure for Promoting Sustainability

Nichirei FreshBusiness Portfolio
Medium-term Business Plan

Executive Officer;
in charge of IT Strategy,
General Manager of Strategic Planning,
General Manager of Sustainability Management

Nichirei Foods

Value Creation Story(Meets at least 3 times a year)

Chairperson: Representative Director,
President

Management Strategy

Sustainability Promotion Structure

Sustainability-related targets are incorporated in the
management plans of our operating companies as

Nichirei Group Integrated Report 2022

17

Nichirei Group Material Matters

In 2020, we identified five material matters for the Nichirei Group in achieving our Long-term Management Goals for 2030

Nichirei Group Integrated Report 2020
https://www.nichirei.co.jp/sites/default/files/inline-images/english/ir/integrated/pdf/nichirei_IntegratedReport2020_all.pdf

Nichirei Group Material Matters

Discovering new potential for the health value andcooling properties of materials, and using digitaltechnologies to contribute to good eating habits andlonger healthy life expectancy.

S ales of ingredients that explore newpotential and products and services fordelicious taste and high health value:¥100 billionT otal number of people who receive
information for good eating habits andhealth: 200 million per year

Further refine core competencies infood processing, production andlogistics to resolve social issues andimprove profitability throughcompetitive advantages in global
markets

Ability to generate cash improved by concentrating
management resources on core businesses

Promote capacity expansion, work process innovation,
reduction of environmental impact and developmentof business foundations through proactive capital
expenditures in the processed foods andtemperature-controlled logistics businesses

EBITDA margin: 12%
E
 BITDA CAGR: 7% or higher

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

Overseas sales ratio: 30%

All raw materials and ingredients are procured fromsuppliers and partner companies that comply with the
Nichirei Group Supplier Code of Conduct andSupplier Guidelines.

Establish a supply chain with consideration forhuman rights and the environment and conduct
due diligenceR ate of procurement from suppliers andOEMs that comply with the Nichirei
Group Supplier Code of Conduct andSupplier Guidelines: 100%R
 ate of implementation of ESG due
diligence for main raw materials andmajor suppliers: 100%

Promoting a circular economy by creating new
business models

Work to conduct sustainable resource
procurement and help to realize a circular
economyR ate of attendance for the SDGs
educational program aimed at realizing
a circular economy: 100% (all employees)R ate of waste recycling at all sites: 99%

Identify water-related risks through risk
assessments at all sites and conserve waterC onduct regular water-related risk
assessments at all sites, as well as inconservation activities and the BCP

Resolving various social issues
related to the supply chain, which isthe foundation of our business, andcontribute to sustainable foodprocurement and the realization ofa recycling-based society

Overseas business has become a new pillar of earnings

Improving resilience of water resources through anunderstanding of water-related risks

8.bReduce CO2 emissions per unit of production
and utilize renewable energy at food factories
and logistics centers, and disclose information
based on the TCFD recommendations

Reduction in CO2 emissions: 50%(Compared with FY2016; Scope 1 and 2
in Japan)

Elimination of CFCs progressing at production andlogistics facilities as a global warming countermeasureR eplace all refrigerants used in freezing andrefrigerating equipment in Japan with naturalrefrigerantsS witch to natural refrigerants overseas asnecessary, based on on-site confirmationR ate of conversion to natural refrigerants
Production equipment (Japan): 100%
Logistics (Global): 75%

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

8.7

12.2
12.6

14.4

4.7

12.5

6.3

13.1

7.2
7.3

13.3

R
 atio of female directors and female
Audit & Supervisory Board members(HD*): 30% or higherR atio of female line managers (HD*): 30%* HD: Nichirei Corporation (Holding Company)*E ngagement survey: A survey that shows degree of understanding ofand resonance with the Management Philosophy and independent
involvement in the organization (job satisfaction)P romote communication activities andimpartially provide learning opportunities inorder to create a work environment andcorporate culture in which employees arehealthy, lively and satisfied with their jobs

9.1
9.4

4.3
4.4

5.1
5.5

Data

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

9.5

Corporate Governance

Securing anddeveloping a diverse
array of humanresources

2.4

Efforts underway to reduce CO2 emissions both insideand outside the Group toward the goal of becoming
carbon neutral by 2050

Introduce a Group-wide engagement survey* tomonitor the effectiveness of measuresE stablish a personnel system that enables Group
employees to choose work styles according totheir career outlook and contributes to
productivity improvementE stablish and provide support for applicationof rules8.2

Sustainability

Climate change
initiatives

As a food and logistics company thatis greatly affected by climate change,
we will work with stakeholders tocounter global warming and reduceenergy consumption throughout the
supply chain

3.d

Business Strategy

Create new markets and customer
value by taking on challenges
outside existing business areas inboth food and healthS tep up R&D to develop new eco-friendly foodresources and ingredients with health value
Allocate resources to marketing and DX todevelop delicious, healthy products andprovide services for better eating habitsE stablish mechanisms to create and cultivate value
in new fields and conduct innovation activities

Applicable SDGs

Business Portfolio
Medium-term Business Plan

Realizing sustainable
food procurement andresources recycling

Group KPIs for FY2031

Value Creation Story

Strengthening foodprocessing andproduction technology
capabilities; enhancing
logistics services

Group Measures

Management Strategy

Creating new value infood and health

Vision for 2030

D
 ouble investment in human resourcesby 2030**C ompared with the average annual investment in humanresources in FY2019-FY2021

8.5

Note: Group KPIs for the material matter “Creating new value in food and health” were revised in 2022 ( Pages 42-43).

18

Nichirei Group Integrated Report 2022

19

DX Strategy

In 2021, we set Group targets for 2030, consisting of measures and KPIs for initiatives for the Group’smaterial matters.
Medium-term Business Plan Compass Rose 2024, which began in FY2023, sets Group KPIs for FY2025
as milestones on the road to 2030, as well as measures and quantitative targets for the holding company
and each operating company. We aim to achieve our targets by continuously monitoring KPIs andcarrying out the plan-do-check-act (PDCA) cycle.

For the Nichirei Group, digital transformation (DX) consists of data technology-driven business
transformation activities linked to its five material matters, with the aim of creating new value.

Nichirei Group
Material Matters

Group Targets(KPIs)Creating new value infood and health

FY2025
Targets

FY2031
Targets——¥100 billion

Main Operating
Companies Involved
Nichirei Foods Pages 52-55
Nichirei Fresh Pages 60-63——

EBITDA margin

9%

10%

12%

Note: FY2022 figure is CAGR for FY2020-FY2022.
FY2025 figure is CAGR for FY2023-FY2025.
FY2031 figure is CAGR for FY2026-FY2031.

4%7%7% or higher

Overseas sales ratio

16%

20%

30%

200 million
peopleNichirei (Holding Company) Pages 44-45
Group-wide initiatives Pages 42-43

Overview of DX Strategy
To raise the awareness of employees, we will launch a new portal site focusing on our DX activities and conduct DX
training for each Group employee to acquire digital literacy. By promoting DX throughout the Group, we will help
to innovate existing work, generate new work and resolve supply chain issues, among other benefits. Throughthese measures, we aim to realize the Nichirei Group Vision.

Strengthening foodprocessing andproduction technology
capabilities; enhancing
logistics services

EBITDA CAGR

Rollout of DX Training ( Page 81)

Realizing Our Vision

Nichirei Foods
Nichirei Logistics Group Pages 56-59

Nichirei Group Material Matters—

Underconsideration

100%

Rate of implementation of ESG due
diligence for main raw materials andmajor suppliers

—

Under
consideration

100%

Rate of waste recycling at all sites

99%

Climate change
initiatives

99%

Flood risk
survey of allsites in Japan

Conduct in
FY2024

Conduct regularwater-related risk
assessments at all sites,
as well as in conservation
activities and the BCP

– 20%

– 30%

– 50%

Rate of conversion to naturalrefrigerants
Logistics (Global)

53%

80%

100%

20%

63%

20% or higher(Compared with the average annual investment in
human resources in FY2019-FY2021)

Nichirei Logistics Group Pages 56-59

0.8 times

1.7 times

Sustainability DX

Human Resources
DX

Creation ofdigital services

Greater on-site
process innovation

Building a sustainable supply chain

Adopting new work styles

Value Creation DX

Production/Logistics DX

We will utilize data and digital technology to create new
businesses that contribute to good eating habits and a longer
healthy life expectancy, and to offer improved experience value
for customers. Through initiatives that go beyond our own
industry, we also aim to build new ecosystems and work tomonetize them.

We will work for automation using IoT, AI, robotics and othermethods, and for overall optimization to link factories andwarehouses in areas such as ascertaining production volume atfactories and incoming, outgoing and storage volume atrefrigerated warehouses. We will also work to achieve optimal
equipment operation and maintenance that mobilizes our factory
and warehouse management know-how, and to conduct
all-inclusive control of multiple sites.

Sustainability DX

Human Resources DX

We will work to create a sustainable supply chain by collecting,managing and analyzing information on the sustainability of our
suppliers and all other parties throughout the chain.

We will deploy the right human resources to the right places in
the Company. At the same time, we will improve work efficiency
by promoting cooperation with external human resources.

75%

30% or higher

Nichirei Foods Pages 52-55
Nichirei Fresh

20%

Production/
Logistics DX

Global Group IT

Nichirei Logistics Group

12%

Value Creation DX

Management Base DX

Group-wide initiatives Pages 68-73* HD: Nichirei Corporation (Holding Company)

Ratio of female line managers (HD*)

Nichirei Biosciences Pages 64-65

Nichirei Foods

58%

Investment in human resources

20

99%

30%
2.0 times

Securing anddeveloping
a diverse array ofhuman resources

Data

Securing anddeveloping a diverse
array of humanresources

100%

Group-wide initiatives Pages 74-77

Rate of conversion to naturalrefrigerants
Production equipment in JapanR
 atio of female directors andfemale Audit & Supervisory Board
members (HD*)

Nichirei Logistics Group(All employees)

Climate change
initiatives

Corporate Governance

Reduction in CO2 emissions(Compared with FY2016; Scope 1
and 2 in Japan)

100%(Executives)

Realizing sustainable
food procurement
and resource recycling

Sustainability—

Strengthening foodprocessing andproduction technology
capabilities; enhancing
logistics services

Nichirei Foods
Nichirei Fresh Pages 60-63

Rate of attendance for the SDGs
educational program aimed atrealizing a circular economy

Conduct water-related risk
assessments at all sites

Creating new value
in food and healthBusiness Strategy

Realizing sustainable
food procurement andresources recycling

Rate of procurement from suppliersand OEMs that comply with the
Nichirei Group Supplier Code of
Conduct and Supplier Guidelines

Business Portfolio
Medium-term Business Plan

Number of consumers and otherexternal parties who receive
information (total per year)

Each employee should have a command of data technology to continue
providing new value for the Earth and its people.

Value Creation Story

Sales related to this material matter

FY2022
Results

DX Strategy

Management Strategy

KPIs for Material Matters

Nichirei Biosciences
Nichirei (Holding Company)

Management Base DX

Group-wide initiatives Pages 78-81

We will collect, manage and analyze internal and external data to be converted into valuable information and provided to management ina timely manner for speedy decision-making.

Nichirei Group Integrated Report 2022

21

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

Processed Foods

Logistics

35.9%

Nichirei Logistics Group Inc.

FY2022
Real Estate

0.7%

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

Business Portfolio
Medium-term Business Plan

602.7 billion

23.7%

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

Temperature-controlled Logistics

Breakdown of
Net Sales

Marine,Meat and Poultry
Products

Nichirei Foods Inc.

Value Creation Story

39.1%

Processed Foods

Management Strategy

Under a holding company responsible for overall Group strategy, each operating company aims to

OthersMeat and Poultry Products

0.7%

12.8%)

Marine, Meat and Poultry Products

Business Strategy(Marine Products: 10.8%

Nichirei Fresh Inc.
In promoting the development of premium marine, meat and poultry products weutilize our global procurement abilities and emphasize freshness, deliciousness,safety, security, health and eco-friendliness. We also keep sustainability in mind,
paying attention to resources and the environment while aiming to create better
value for consumers.

Logistics

44.1%

45.3%
Breakdown of
Operating Profit

Nichirei Biosciences Inc.
By making the best use of biotechnologies to conduct business in the three fields
of molecular diagnostics, biomedical materials and immunochromatographic
diagnostic reagents, we are able to contribute to the physical and mental health ofa large number of people. We provide high-quality products and services with theaim of becoming a technology-oriented company with outstanding expertise.

billionFY2022Marine,Meat and Poultry
Products

6.6%

Real Estate

3.0%

Meat and Poultry Products

5.1%
3.6%)

Others-1.0%

Nichirei Corporation(Holding Company)
Real Estate

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

Data(Marine Products:

Bioscience

Corporate Governance

31.4

Sustainability

Processed Foods

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

22

Nichirei Group Integrated Report 2022

23

Nichirei by the Numbers
Our core business is built on cooling power: the ability to ensure the long-term storage of food and, atthe same time, preserve the original quality of the raw ingredients used. This enables us to improve eating
Management Strategy

habits, and to meet the expectations and earn the trust of society as we seek further growth.

Temperaturecontrolled
LogisticsR efrigerated Warehouse Capacity

Refrigerated Warehouse Companies’ Share of Total
Facility Capacity: Top Five in JapanS
 ales of Frozen Foods

in Japan

Capacity

Ranking Company/Group Name

(Thousandsof tons)

RankingCompany

Net Sales (Billions of yen)

11Nichirei

238.6

2

YOKOREI Co., Ltd.

2Company A

221.7

3

Maruha-Nichiro Logistics, Inc.

3

Company B

183.3

4

4

Company C

173.6

5

5

Company D

96.3

Source: F rom an August 12, 2022 article in Reishoku Nippo , which is published by
Shokuhin Sangyo Shimbunsha Co., Ltd.

Nichirei Logistics Group Inc. 155

years

years

Capacity

Main Countryof Business1

Lineage Logistics

2,940

USA

94

5.5%

2

Americold Logistics

1,599

USA

66

3.9%

3

United States Cold Storage

479

USA

Toyo Suisan Kaisha, Ltd.

61

3.6%

4

NewCold Advanced Cold Logistics

244

USA

Chilled & Frozen Logistics Holdings Co. Ltd.

52

3.1%

5

Nichirei Logistics Group Inc. 226

Japan

6

Interstate Warehousing, Inc.

131

USA

7

Frialsa Frigorificos S.A. De C.V.

123

Mexico8

VersaCold Logistics Services

120

Canada9

VX Cold Chain Logistics

111

China

10

Constellation Cold Logistics

99

Belgium

Source: P repared based on “Refrigerated Warehouse Statistics,” November
2021 materials from the Japan Association of Refrigerated Warehouses

Approximately

21(Thousandsof tons)

8,000

Source: P repared based on the “Global Top 25 List,” March 2022 materials
from the International Association of Refrigerated Warehouses(per day)

Corporate Governance

years

34

Ranking Company Name

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

24

Obento-ni-Good!
Karaage Chicken(fried chicken)

Honkaku-ItameChahan(fried rice)

More than

30

Data

Obento-ni-Good!
Mini Hamburg(hamburger steak)Sustainability

53

(%)

9.1%

D
 omestic and Overseas
Vehicles in OperationL ong-selling Household-use Frozen Foods

Share of
Total Capacity

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

Business Strategy

No.1

Sales Ranking of Frozen Food Manufacturers (FY2022)

No.5

GlobalShare

Business Portfolio
Medium-term Business Plan

No.1

Share inJapan

Value Creation Story

Processed
Foods

Nichirei Group Integrated Report 2022

25

History of the Nichirei Group
Creating Value to Provide True Satisfaction
2010s

to create the products and services required in each era. The Nichirei Group will continue to

2000s

support eating habits through business activities covering a wide range of foods.

1960s to 1970s
1940s to 1950s

The spread of electric refrigeratorschanges eating habits.
Expanding into the broiler andprocessed marine products
businesses

Junwakei chickens
GFPT Nichirei (Thailand)Company Limited

Newspaper announcement of the change
in the company nameTerrace Nichirei cafeteria
at the Japan World
Exposition in Osaka

Antarctic expedition

1960	Established Kamagaya Laboratory(establishment of a rotating poultry house)	Launched Tender Tuna (cooked canned tuna)
1964	Provided frozen foods to the athletes’ village
at the Tokyo Olympics

1946 Launched Reika fruit juice popsicle

1968	Ranked No. 1 in share of African octopus andCentral and South American shrimp handled1952	Launched frozen prepackaged tempura set
1955 Started offshore exporting of marine products
1956	Launched meat and poultry products
business	Provided frozen food to Antarctic expedition
1959	Developed Hayabusa, a long-distance frozen
cargo vehicle

1970	Opened a cafeteria at the Japan World
Exposition (Osaka)

1982 Expanded into the biotechnology field
1985	Changed company name to Nichirei
Corporation
1987 Launched Acerola Drink
1988	Started European logistics business in the
Netherlands

2011	Established Higashi-ogishima DC(Kawasaki City) and added a secondbuilding in 2013 to meet strong
demand for logistics
2012	Started sales of Asian food in the
United States2013	Launched Southeast Asian logistics
business starting in Thailand
2014	Established Nichirei Foods Funabashi
No. 2 Plant
2017	CSR Basic Policy revised as The
Nichirei Pledge
2018	Opened the MIRAIterrace company
day care center2019	Established the Global Innovation
Center as a bioscience business basefor research, development andproduction	Established the Nichirei Group Human
Rights Policy

2020	Established Nagoya Minato DC, amodel center for business innovation
Junwakei chicken became the first	poultry product in Japan to acquire
Specific Japanese Agricultural Standards(JAS) certification for sustainability for
eggs and chicken meat2021	Joined the United Nations Global
Compact	Launched Immunofine SARS-CoV-2
antigen test kit for the SARS coronavirus
2022	Established Sustainability Policy: The
Nichirei Pledge	Launched Inochi-no-Umi-Project toregenerate Zostera (eelgrass) beds
(Billions of yen)

600

500

1993	Full-scale launch of cross-docking
operations (XD)

400

1997	Established the Nichirei Technology
Development Center

1977	Established a subsidiary to handle transport

300

1979	Established a subsidiary to collect and sell
agricultural, marine, meat and poultry
products in the United States

Corporate Governance1945	Reorganized as Nippon Reizo Inc., a privatecompany

1980 Started Tomorrow’s Nichirei

2004	Started a logistics business in China(Shanghai)2005	Converted to a holding company
structure	Established Jinzhu (Yantai) Food
Research and Development Co., Ltd.
in China for food analysis, inspection,and research and development
2006	Started the Inochi-no-Mori-Project inIndonesia (sustainable shrimp
procurement using extensive
aquaculture and mangrove tree
planting)
2007 Started Junwakei chicken business2008	Established GFPT Nichirei (Thailand)Company Limited, a Thai production
subsidiary, for stable supply ofprocessed poultry products

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

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

Sustainability

1942	Established Teikoku Marine Products Control
CompanyWith brisk economic growth, electric
refrigerators became common household
appliances and household-use frozen foods
began to be accepted. We contributed to
the government-led creation of a cold
chain logistics network to maintain food
freshness during transport from producing
areas to stores.

A management crisis led to Tomorrow’s
Nichirei, a bottom-up in-house campaign
soliciting employee proposals for innovationand improvement, which led to a series of
new businesses. In addition, rising numbersof women working outside the homespurred growth in demand for highly
convenient frozen foods. From the latter halfof the 1980s, we started full-scale overseas
expansion in the fields of processed foods
and temperature-controlled logistics.

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

Global Innovation Center

Business Strategy

Rotating poultry
house in Kamagaya

Nippon Reizo was established to take overthe marine products, refrigeration andice-making businesses. With a mission toprovide a stable food supply after WorldWar II, we diversified our businesses asconsumption rose rapidly in the 1950s.

Nagoya Minato DC

Business Portfolio
Medium-term Business Plan

Launch of the Nichirei Group to
rebuild the postwar food supply
system and respond to risingconsumption

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

Value Creation Story

1980s to 1990s

Addressing diversifying eating habits andconsumer concerns about food safety.
Accelerating business operations by
converting to a holding company
structure

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

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

2020 onward

We have provided true satisfaction by identifying the needs of individuals and society, enabling us

200

100

Data

Nichirei Group Net Sales

0
FY1948

FY1951

FY1961

FY1971

FY1981

FY1991

FY2001FY2011

FY2022

Note: Consolidated net sales from FY2005

26

Nichirei Group Integrated Report 2022

27

Our Path for Creating Value: Nichirei’s History in Frozen Foods

Spread of lunch service throughout
Arrival of family-style restaurants
the compulsory education systemand fast food in Japan led to adue to the School Lunch Act.
boom in eating out.
Major supermarkets began
1969: Japan Frozen Food Association establishedselling frozen foods.
1954: School Lunch Act enacted

1940

1950

Spread of school lunches

Established in 1945, Nippon Reizo (currently the
Nichirei Group) supplied foods likely to be inshort supply to each region during the postwar
food shortages. In response to booming
consumption in the 1950s, we diversified ourbusiness and pioneered the market for preparedfrozen foods.

Growing demand forhousehold-use frozen foods

2010

2020

Convenience backed by technology

To develop products that took greater advantage of the deliciousness of
their ingredients, we established production facilities overseas, where theingredients were produced, to process them while they were still fresh. As
women made advances in society, and diversification and preparation offood outside the home accelerated, we launched a series of innovative
products including delicatessen products for supermarkets and microwaveablecroquettes that reproduce the texture of freshly fried food. As a measure toaddress rising concerns about food safety spurred by residual pesticides
found in frozen spinach, we introduced a traceability system that could
promptly identify the cause in the event a problem occurred.

Initiatives for sustainability

The household-use frozen food market expanded,
capitalizing on stay-at-home demand during the COVID-19
pandemic. In addition, as Japan’s working population
declines, demand for easy-to-prepare commercial-use
frozen foods increased to reduce the burden of on-sitecooking at sales points. We were also helping torealize a sustainable society through initiatives suchas making packaging materials smaller and thinner,and supporting food banks and programs offering
free or low-priced meals for children.

In 1994, we launched Koromo-ga-Sakusaku Gyuniku-croquette as partof our Shin-Renji-Seikatsu series. It took three years of research anddevelopment to succeed in creating freshly-fried crispiness even whencooked in a microwave oven. In addition, we insisted on using Danshaku
potatoes from Hokkaido to recreate
the proper croquette flavor. Our
technology enabled a significant
reduction in cooking time, thus
responding to changes in lifestyles
such as the increase in doubleincome households.

Since 2006, Nichirei Foods and Nichirei Logistics Group have supported
the activities of Second Harvest Japan. So far, they have donated a totalof more than 20,000 cases of frozen foods to various welfare facilities,
including foster homes, mother and child support centers, and disability
support facilities. In addition to the products, they also provide logisticalsupport for frozen foods to maintain their quality.

In 2001, we introduced Honkaku-Itame-Chahan (fried rice), the firsthousehold-use frozen fried rice, made by frying rice in large volumes on acontinuous production line. By capturing demand as a substitute for friedrice made from scratch, this product changed the concept of frozen riceproducts. In 2004, we launched the mail-order-only Kikubari-Gozen , ameal set of nutritionally controlled frozen dishes for people whose diets
tend to be nutritionally unbalanced.

In 2019, we launched the commercialuse Boil-de-Sakutto series for croquettes
and other fried foods that can beprepared by boiling. In 2020, we launched
the Vegedelica series of products fordelicatessens. These meal kits
containing multiple ingredients andseasonings help to resolve the problem
of worker shortages and insufficientcooking facilities.

Nichirei Group Integrated Report 2022

Data

Initiatives for Ecofriendly Packaging

FY2007 Imagawa-Yaki (Japanese waffles): Elimination of trays
FY2010 Yaki-Onigiri (grilled rice balls) 10-pack: Elimination of trays
FY2012 Honkaku-Itame-Chahan (fried rice): Thinner packaging
FY2015 Yaki-Onigiri (grilled rice balls) 10-pack: Thinner packaging
FY2016 H onkaku-Itame-Chahan (fried rice): Thinner packaging(second reduction)
FY2019 E bi-Pilaf (shrimp pilaf) and Chicken Rice:
Thinner packaging
FY2021 E bi-to-Cheese-no-Gratin (shrimp gratin) andEbi-to-Cheese-no-Doria (shrimp rice gratin): Thinner trays, reduced tray handle width
FY2022 Yaki-Onigiri (grilled rice balls): Elimination of trays for entire lineup

Corporate GovernanceCommercial-use prepared frozen foods caught on at once in the foodservice industry. Our easy-to-eat fish sticks made from fish paste andoffering uniform quality and standards were delivered pre-breaded andfrozen. The convenience of being able to deep-fry a large quantity on-site
helped to make it a major hit in meals at schools, hospitals and SelfDefense Forces mess halls.

As the variety of its household-use prepared frozen food products
increased, in 1974 Nichirei integrated all the different brands that hadcome into being under the Green Belt brand. In 1978, we launched
the White Pack series of household-use versions of the commercialuse products in our Restaurant Pack series. We catered to a variety ofdining situations with a lineup that ranged from products for boxedlunches to premium-priced dinner items.

Expansion of overseas
production facilities

2000

2013: Frozen food production exceeds 1.5 million tons

Sustainability

Chawan-Mushi (savory egg custard), which we launched in 1954 asJapan’s first heat-and-eat prepared frozen food, was made by adding
chicken, gingko nuts and other ingredients to soup stock containing
beaten eggs, and then freezing. It had to be thawed, then put in acontainer and steamed, but it was revolutionary at a time when there
were no microwave ovens. As nuclear
families increased in number, thedifficulty of preparing the multiple
ingredients required in small quantities
also helped to make the productpopular.

At the 1964 Tokyo Olympics, meals had to be provided to a large
number of people, including about 7,500 participating athletes andofficials from 94 countries, as well as the press. To prevent a spike inprices for domestic perishables, the decision was made to use frozen
foods. We repeatedly considered the most serviceable standards andportion sizes to deliver high-quality frozen food to the athletes’ village.
Praise from hotel chefs who had gathered from all over Japan to workin the athletes’ village gained attention for frozen food from the hoteland food service industries.

1990

2009: Microwave ovens in more than 90% of households

Business Strategy

Nichirei’s Products and Technology Solutions

1980

We delivered frozen food to the athletes’ village at the 1964 Tokyo
Olympics (the 18th Olympic Games). High praise from hotel chefs
gave us a foothold in the food service industry. With the spread ofelectric refrigerators in homes, demand for household-use preparedfrozen foods also increased rapidly. The arrival of family-stylerestaurants and fast food in Japan led to a boom in eating out.

Partly because a cold chain network had not yet been established inJapan, there were no permanent frozen food sales sections in stores.
In 1952, we opened frozen food sections at the Fujiya and Toyoko
department stores. Most sales at first were of frozen fish, but as we
gradually raised the level of our processing, our lineup expanded toinclude prepared frozen foods such as Shumai (Chinese dumplings) andfried foods. At the time, an electric refrigerator was not yet common in
ordinary households, so a full-scale rollout required time.

28

1970

United Nations formulates
the SDGs. Demands forresponses to environmental
and social issues.

Business Portfolio
Medium-term Business Plan

Key Points

Dawn of frozen foods

1960

1970: Japan’s first family-style restaurant opens
1975: Electric refrigerators in
96.7% of households

Advancement of women
Rising healthin society. Increase in food consciousness anddiversity and preparationinterest in food safety.
outside the home. Importliberalization. Collapse of
the economic bubble.

Value Creation Story

Historical Context

An era of postwar food shortages,
with a need for stable food supply
throughout Japan.

Management Strategy

Since developing frozen foods more than 70 years ago, the Nichirei Group has solved the various issues ofeach era to support more diverse diets. We will use the technological development capabilities we havecultivated to continue to provide new value.

29Value Creation Process
External Environment

Opportunities

Creating new value
in food and healthStrengthening foodprocessing and production
technology capabilities;
enhancing logistics services

Realizing sustainable
food procurement andresources-recycling societyManagement Strategy

Nichirei Group
Material Matters

Securing and developing
a diverse arrayof human resources

Climate change
initiatives• Stable procurement ofsustainable raw materials• Rising demand forfrozen foods• Rising demand for health-conscious products

diets and medical care•P roviding new products

and services in response
to labor shortages andlegal regulations•P roviding value throughresource-recycling
products and services

Economic Value

Financial Capital
Equity ratio• Labor shortage•F ree cash flow
(before dividends)¥8.6 billion

know-how•D isruption or difficulty inmaintaining a sustainablesupply chain

procurement costs• Increase in environmental

investment due to shift torenewable energy• Market changes spurred bydemographics• Stricter regulations onimports and exports ineach country

20%

30%

Operating profit/Net sales

5.6%

8%

Manufactured Capital

7% or higher

9% or higher

10%

12%

ROIC

•P
 roduction facilities
22 in Japan,
6 overseas

EBITDA margin

Continuing to create new value
for the times with our•R efrigerated warehousestorage capacity

Social Value

capabilities as afood pioneer

1,550 thousand tons in Japan,
710 thousand tons overseasIntellectual Capital

Realizing sustainable food procurement and resource-recycling societyGroup KPIs

• L ogistics expertise•B rand strength

Human Capital•N umber of employees(consolidated)
15,296•E
 xpert human resources• Average length of service(males) 17.5 years(females) 15.4 years

Refined and advanced

Ability tohelp resolve
social issues

capabilities infood processing,production technology
and temperature-controlled
logistics services

Rate of attendance for the
SDGs educational program
aimed at realizing a circular
economy: 100%Rate of waste recycling at
all sites: 99%

FY2025 Targets

FY2031 Targets

100%(executives)

100 %(all employees)

99 %ComprehensiveGroupcapabilities

Conduct regular water-related
risk assessments at all sites,
as well as in conservation
activities and the BCP

based onour own cold chain
network

Climate change initiatives
Group KPIs
Reduction in CO2 emissions: 50%•S ales network• L ogistics network

FY2025 Targets

FY2031 Targets- 30 %- 50 %

Rate of conversion to naturalrefrigerants
Production equipment
in Japan: 100%

80 %

100 %

Logistics (Global): 75%

63 %

75 %

(Compared with FY2016; Scope 1 and 2 in Japan)

Social and Relationship Capital

Conduct in
FY202499 %Conduct regularwater-related risk
assessments at allsites, as well as inconservation activities
and BCP

Securing and developing a diverse array of human resources•D onations to social
causes¥350 million

Natural CapitalGroup KPIs

FY2025 Targets

FY2031 Targets

Ratio of female directors andfemale Audit & Supervisory Board
members (HD1): 30% or higher

20% or higher

30% or higher

20%

30%

1.7 times

2.0 times

Ratio of female line
managers (HD1): 30%•G lobal procurement
network for agricultural,meat, poultry and marine
products
 More than 30 countries

Double investment in
human resources by 20302

Data

1. HD: Nichirei Corporation (Holding Company)
2. Compared with average annual investment in human resources during FY2019-FY2021

Corporate Governance• Increase in raw material

Overseas sales ratio

Sustainability• Disruption in passing down

¥1 trillion

Achieve ourlong-term
management
goals toward2030

Business Strategy

water resources due toclimate change¥660.0 billion

Net sales

49.4%

•T
 echnological strengths in
cooking and processing•D epletion of food andFY2031 Targets

Total assets ¥427.6 billion•P roduction expertise

Risks

FY2025 Targets

Business Portfolio
Medium-term Business Plan

• Promotion of personalized

Note: D ata as of March 31, 2022, except
where noted

OUTCOME

Realize a Sustainable Societyfrozen storage, supply andcontrol functions for food

OUTPUT

Value Creation Story• Higher expectations for

INPUT

Contribute to good eating habits
and health•E nhanced food traceability

Sustainability Policy
30

Management Principles

Nichirei Group Integrated Report 2022

31

Nichirei’s Business Model and Advantages
Synergy among Our Three Advantages Generates

The Nichirei Group leverages the advantages and functions arising frompushing the frontiers of food, its comprehensive Group strengths and its
capabilities in food processing, production technology and temperatureled to the growth of the Group's businesses. In collaboration with our

Continuing to create
new value for the times with ourcapabilities as a foodpioneerstakeholders, we will continue to create both social and economic
value as we aim to further improve our corporate value.

Microwaveablecroquettes

Our Heritage
Seventy-six years of creating
unprecedented meal options and new
food cultures by continuing to provide
products and services with new value
for society

Pioneering preparedfrozen food productChawan-Mushi(savory egg custard)

Expanded into thebiotechnology field*S pecific Japanese AgriculturalStandards (JAS) certification
for sustainability for eggs andchicken meat

Guinness World
Record for largest
frozen fried ricebrand for HonkakuItame-Chahan(fried rice)First in Japan
to commercialize
acerolaRefined and advancedD evelopment and production
technology capabilities forreproducing deliciousness

Total logistics
Proprietary material
development
capabilities

Quality assurance
capabilities thatenhance safety andreliabilityH uman resources with high-level
expertise and experience

Providing productswith optimal
processing

Case studies of helping to resolve social issues through our business (Pages 34-41)

based on our own cold chain
network

Nationwide
transportation anddelivery network

Our Fields
8,000 vehicles
in operationworldwide
every dayProcurement
capabilities from
more than 30
countries
No. 5 globallyin refrigerated
warehouse
capacity
No. 1 in Japan in
refrigerated
warehouse
capacity

32

In-house
manufacturing
facilities:
22 in Japan,
5 overseas

Nichirei Group Integrated Report 2022

Data

Providing consistent value with acold chain network from foodprocurement to processing,
distribution and sales using thecomprehensive strengths of the
Nichirei Group’s functions

Corporate Governance

Able to handle awide range ofcustomers andbusiness types

No. 1 in sales offrozen foods inJapan

Comprehensive Groupcapabilities

Ability to develop,
produce and evaluate
the quality ofdiagnostic agents

Sustainability

Ability tohelp resolve
social issues

Long-standing
relationships oftrust with suppliersJ apan’s leading advanced
temperature-controlled logistics

Business Strategy

capabilities in foodprocessing, production
technology andtemperature-controlled
logistics servicesU nique ingredients procurement
network

Processing andproduction
technology

Proposal andresponse
capabilities

Original
development ofrefrigeration
facilities andequipment

Developed longdistance frozen
cargo vehicle(reefer) Hayabusa

Business Portfolio
Medium-term Business PlanOur UniquenessJunwakei chicken
received Japan’s
first Specific JAS
Certification*

Value Creation Story

controlled logistics services. Helping to resolve social issues has in turn

A history ofhandling sources ofanimal proteins since
our founding

Management Strategy

The Ability to Help
Resolve Social Issues

Cross-docking
centers(XD business)

33

Helping to Resolve Social Issues through Our Business2

Nichirei Foods

Systematic, Effective Use of the Entire Chicken

A Chicken Processing
Factory That Uses the
Entire Chicken (Thailand)eliminates food waste by using the entire chicken in various ways. GFN considers effective uses and sales channels foreach part, from the meat to the head, feathers and blood, then adds value and sells those parts (see the figure below).
For example, feathers are processed and sold for use in feed for farmed fish; bones, intestines and heads areprocessed and sold as raw materials for pet food; and feet are sold in China, where demand for this part is strong.
Aside from product quality, consideration for the environment and human rights is also important, especially inEurope, to which breast products are exported. GFN focuses on initiatives such as creating a comfortable working

Cooked and processed for export to Japan and Europe
As blood cake for school lunches
in Thailand and other uses

Thigh

BreastTenderSold in Thailand

Wings

Effective Use of the Entire Chicken
Carcass

Food Waste:
Thigh and Breast Meat Are Only About 40%
of Total WeightFried, sauteed or prepared in various other ways, chicken isubiquitous in daily dining. Thigh meat is the most popular partof the chicken in Japan, but it only accounts for about 20% of

Flat
About 4%
Drumette
About 4%

United States and Europe, also only accounts for about 20%.
On the other hand, non-meat parts such as bones andfeathers account for more than 40%, and become waste if
they cannot be utilized. Devising processing and sales

Thigh (boneless)
About 18%

OrgansBlood

Breast (with skin)
About 23%
Tender
About 4%channels for well-balanced use of the entire bird is necessary

Feed

Feathers

Heads

Intestines

Bones

Gizzards

stock to production at GFN, have earned a positive response from customers in Japan and elsewhere. The factory has* Weight may differ among individual chickens

E stablishment of a Joint Venture with a Major Poultry Processing Company
in Thailand (2008)

environmental impact. Moreover, expanding business by increasing the number of value-added products leads toreturns to the local community and provides employment. GFN will continue working to address a variety of social
issues through a sustainable chicken business.

Social Value•R educing food waste andenvironmental impact by using theentire chicken• I mproving employee engagement

community and employment•E xpanding business by selling all partsof the chicken• Improving profitability by adding value•C ontinuing safe, reliable and stableprocurement

Nichirei Group Integrated Report 2022

Data

•P
 roviding returns to the local

Economic Value

Corporate Governance

Demand for chicken continues to increase worldwide, and Japan is one of the world’s leading chicken importers, with
consumption far exceeding domestic production.
Aiming for stable procurement of raw materials, in 2008 Nichirei Foods established GFPT Nichirei (Thailand) Company
Limited (GFN), a joint venture with a major Thai poultry processing company (GFPT Group). As a joint venture, GFN utilizes
the functions of the GFPT Group for fully integrated processing from raw materials to finished products. Under the system,
live chickens from poultry farms that use only the best feed and breeding stock are brought in, slaughtered and cut, thencooked, frozen and packaged at a directly connected processing plant.

no concept of waste when it comes to raw materials. Fully using all resources reduces not only food waste but also

Sustainability

Initiatives to Resolve the Issue

34

Feet

Our integrated measures for safety and reliability, from utilizing GFN Group functions to raise chickens from breeding

to avoid food waste from carefully raised chickens.

1

To China

Raw material for
pet foodBusiness Strategy

the whole bird by weight. Breast meat, which is popular in the

Breakdown of Chicken Parts by Percentage of Total Weight*

Business Portfolio
Medium-term Business Plan

Social Issue

Value Creation Story

environment and animal welfare, and has acquired ISO 14001 and other international certifications.

Management Strategy

In addition to facilitating stable procurement and production of safe and reliable raw materials, GFN essentially35

Helping to Resolve Social Issues through Our Business2

Nichirei Logistics Group

SULS was initially introduced for transportation and delivery among the Nichirei Logistics Group’s facilities in Tokyo,
Nagoya and Osaka, with plans for a nationwide rollout in stages. We will continue to support our customers’ supply chains

Next-generation Transportation
and Delivery Systemthrough the evolution of our temperature-controlled logistics’ transportation and delivery operations into higher-quality,
more sustainable formats.

The Logistics Industry’s 2024 Problem:
A Shortage of Truck Drivers and Long Working Hours
Long hours have become the norm for truck drivers.
In addition to long distances, drivers must contend
with factors such as dwell time at logistics facilities

2024 Problem for logistics refers to issues such

Annual Working Hours for Truck Drivers(Hours)
3,000

2,592

2,616

2,580

2,580

2,400

2,200

Work Style Reform Act imposes a mandatory
improve the working environment.

2,604

2,604

2,580

2,592

2,124

2,124

2,580

2,532

2,568

2,484

2,124

2,136

2,124

2,496

2,484

2,076

2,100

2019

2020

Kansai

Kanto

Long driving/unloading time

2015

2016

2017

2018

S
 ULS

Source: Ministry of Health, Labour and Welfare, Basic Survey on Wage Structure

SULS is an acronym for S&U Logistics System,
in which “S” stands for speedy, sustainable andsolution, and “U” stands for utility, usability and

The Three “S”sProvided by Nichirei Logistics GroupS peedy
S ustainable
S olution

The Three “U”s

A conventional large truck with 16 pallets can transport 32 pallets with a single driver taking a totalof about 48 hours to make one return trip. SULS has demonstrated the capability of transporting48 pallets, taking a total of about 10 hours for one return trip.

Why Nichirei Logistics
Group Is Uniquely Capable

1. N ichirei Logistics Group-owned logistics facilities in approximately 80 locations throughout Japan
2. Dominant lead in volume of storage consignors' products handled as base cargo
3. C ollaborative partnerships spanning more than 30 years with about 100 companies nationwide

of Customer Value

U tility
U sability
U ser Experience

Japan’s No. 1 temperature-controlled logistics network for foodspeedy, sustainable logistics solutions andSocial Value• Achieving stable and sustainable transportationand delivery

provide utility, usability and superior user
One of Japan’s largest
base cargo volumes

About 80 selfoperated distribution
centers nationwide

Robusttransportation anddelivery network(Collaborative partnerships with approx.
100 companies)•R educing truck drivers’ work load byshortening their on-duty work hours•R educing environmental impact•R educing risk of inability to transport cargo

36

Economic Value•S ignificantly reducing total driving time•C reating an efficient and sustainabletransportation infrastructureDataexperience to our customers and society.

Same-dayreturn possible

Expected Effectuser experience. By synergizing the advantagesof Nichirei Logistics Group, we will generate

Kanto

Corporate Governance

Next-generation Transportation and
Delivery System

Increasing the Sophistication of the Services We Provide

KansaiPre-loaded trailer prepared.
Immediately proceed to next destination.

2,000

2014

Tokai
Relay
CenterSame-dayreturn possible

Initiatives to Resolve the Issue
1

SULS Operation

Sustainability

limit of 960 hours of driver overtime per year to

TractorLong driving/unloading time

2,800

2,600

Detachable

Current Operation

Working hours (large trucks)
Working hours (small and medium-sized trucks)
Working hours (all industries)

as those that the shipping and logistics industry
must address from April 1, 2024, when Japan’s

Reduction of
dwell time
at logistics facilities
Trailerbeen subcontracted to do, which has become
standard business practice in the industry. The

Nichirei Logistics Group-owned trailers at relay
points that are loaded and ready to go at all
times allow drivers to proceed to their next
destination immediately after arrival

Introduction of Japan’s largest-capacity
trailer, able to carry a 24-pallet loadBusiness Strategy

and incidental non-driving work that they have

Help truck drivers
devote theirtime to driving

Business Portfolio
Medium-term Business Plan

Social Issue

Loading, unloading and related work are
performed by the Nichirei Logistics Groupfacility rather than the truck drivers

Value Creation Story

Reduction of
long-distancetransport

Using low-temperature trailers with detachable
cargo beds enables return trips from relay points

Management Strategy

SULSU sing SULS to Build a New Transportation and Delivery Infrastructure
for Temperature-controlled Logistics•S ignificantly expanding transportation

capacity

Nichirei Group Integrated Report 2022

37

Helping to Resolve Social Issues through Our Business2

Introduction at 30 Locations throughout Japan

However, the truck loading dock reservation system enables shipping companies to send the bill of lading, invoice andTruck Loading Dock
Reservation Systemother details about the cargo to distribution centers ahead of time. Advance confirmation allows smooth assignment oftrucks to loading docks upon arrival. In FY2021, we introduced this system at 30 locations nationwide.
For distribution centers where the reservation system has been steadily operating, dwell time, which had been twohours or more for about 70% of trucks before complete introduction of the system, was reduced to less than one hourfor 97% of trucks. Meanwhile, the system has reduced both the number of trucks waiting late at night and early in theduties by reducing the frequency of calls to confirm loading dock arrival time.

BeforeTruck Dwell Time at Distribution Centers(%)

59

Social Issue

71%

Reserved

14

Truck Dwell Time at Distribution Centers

Less than
30 min.

8
30-59
min.

2
60-89
min.

8

6

4

90-119min.

120-149min.

150-179min.

180 min.
or moreTruck drivers are forced to wait for long periods of time at distribution centers due to the inability to unload and loadcargo smoothly. This dwell time has become a social issue. The main reason for the long dwell time and on-duty work
hours is that, especially during busy periods, there are periods during the day when the distribution centers’ processing
capacity cannot keep up with the numerous vehicles entering and leaving due to the bottleneck created by the limited
be unloading or loading, because trucks from many shippers come and go, making it difficult for the center tocoordinate operations with drivers in advance.

97 %

12
Less than
30 min.

Initiatives to Resolve the Issue
1

100%
Unreserved 0%

Reserved

Dwell time
under 1 hour
30-59
min.

2

2

0

0

0

60-89
min.

90-119min.

120-149min.

150-179min.

180 min.
or moreBusiness Strategy

number of loading docks. In addition, it is burdensome for distribution centers to keep track of when each vehicle will

(%)

85

After

Business Portfolio
Medium-term Business Plan

12%
Unreserved 88%

Dwell time of
2 hours or more

Value Creation Story

morning and the number of trucks parked around the distribution center. It has also alleviated the burden of reception

Management Strategy

Confirmation of shipping companies and orders was previously performed by distribution centers after the truck arrived.

Nichirei Logistics Group

Truck Loading Dock Reservation System to Alleviate or Eliminate Dwell Timetime or eliminate it entirely. The system allows truck operators (the shipper or shipping company) to reserve a desired
time for loading or unloading trucks, in line with the loading and unloading time slot framework at each distribution
center. As a result, it is no longer necessary to line up and wait.

Social Value

Economic Value

reducing the number of trucks waiting
Truck congestion
early in themorning

Scheduled arrivaland departure
times

Long waitloading andunloading inorder of arrival

operational hours, etc.
• Increasing the number of employed truck•R educing truck drivers’ work load bydrivers and curbing driver turnovershortening time on duty•R
 educing environmental impact (CO2 reduction)

Vicious cycle of•R educing economic loss due to truck non-•C reating efficient and sustainabletransportation infrastructure

Virtuous cycle of
Trucks waitingfrom earlymorning

Efficient truck
operation in terms of
reducing non-driving
work hours

truck loading dockreservation
systemCorporate Governance• Alleviating traffic congestion and noise by

Sustainability

In October 2017, Nichirei Logistics Group began operating a truck loading dock reservation system to alleviate dwell

Elimination of
dwell time

Data

Notable reduction in number of trucks waiting

38

Nichirei Group Integrated Report 2022

39

Helping to Resolve Social Issues through Our Business

1

Extensive Shrimp Aquaculture

Nichirei Fresh

number of juvenile shrimp are released into a pond larger than 10 hectares that is surrounded by berms andInochi-no-Mori-Projectmangroves. No feed is given, and the shrimp grow by eating plankton from the sea. As a result, impact on the soil islow, diseases peculiar to shrimp are less likely to spread, the shrimp grow larger, and electricity is not used during thecultivation period.
Pond

Harvesting rtificial feed is administeredAElectric-powered paddlewheel aerators
are used during breeding period.

 or harvesting, the pond is drained usingF
an electric vacuum and a conveyor is used
to remove the shrimp from the water.

Intensive
aquaculture ivided into sections of 1 hectare orDsmallerLow
tideExtensive
aquaculture

Environmental Disruption and Impact on Biodiversity
from Intensive Shrimp Aquaculture onds are larger than 10 hectares andP
use natural topography.

Shrimp farming requires large plots of land. In many Asian countries, wide areas of mangrove forests, which buffer the effects

 hrimp grow by eating plankton from the sea
SElectricity is not used.

Harvesting makes use of the tides.

of tsunamis and strong winds, have been cut down to make way for artificial ponds for shrimp farming, a practice called
intensive aquaculture.
and the sea by runoff containing the antibiotics and drugs in formula feed. Such marine pollution has become a social issue.

2

Mangrove Planting

Indonesia

The mangrove planting that started in Tarakan City,
Kalimantan in 2006 has expanded to the islands ofInitiatives to Resolve the Issue

Kalimantan

Java and Sumatra. We have been planting for 15

Tawau (scheduled from 2022)

years, reaching a total of approximately 380,000

Inochi-no-Mori-Projectmangrove trees in 2021. The soil and ecosystem in

The Inochi-no-Mori-Project is a joint mangrove planting project started in 2006 by Nichirei Fresh, a local shrimp

A portion of the proceeds from this extensive shrimp aquaculture, which has been practiced in Indonesia for hundreds

Samarinda (from 2013)

planting has spread.

enable sustainable procurement of safe and reliable shrimp.
of years, is donated to a fund for systematic mangrove planting in ponds that have been abandoned after intensive

Lampung (from 2020)

Pati (from 2018)
Inochi-no-Mori-Project activity reports

Java

Lombok(scheduled from 2022)

https://www.nichireifresh.co.jp/inochinomori/ (Japanese only)

Sustainability

supplier, and Tarakan City in Kalimantan, Indonesia to reduce environmental impact from local shrimp farming andand around Tarakan City have been recovering as

Tarakan (from 2006)

SumatraBusiness Strategy

In addition to affecting the ecosystems of birds, fish and small animals, this practice results in contamination of soil, local rivers

Business Portfolio
Medium-term Business Plan

High
tide

Social Issue

Value Creation Story

Breeding

Management Strategy

A traditional shrimp farming method in Indonesia, extensive aquaculture makes use of the natural topography. A small

aquaculture, in local parks, and elsewhere. We are currently expanding our activities into Java and Sumatra incooperation with local suppliers.

•C ontributing to the restoration of local natural

ecosystems•R educing energy usage• I ncreasing CO2 absorption through larger

Economic Value•P roviding high-quality, safe and reliable shrimp• Improving product brand value

Corporate GovernanceSocial Value•P roviding sustainable shrimp

mangrove forests

Sign commemorating the project’s 10th anniversary

40

Data

•C
 oexisting with local communities

Mangrove planting in coastal areas

Nichirei Group Integrated Report 2022

41

TOWARD

2030

Creating New Value
Message from the Officer in Charge
Taking on New Challenges beyond Our Current Domains of Food and
Health to Create New Markets and Value for Customers

Value Provided by the Nichirei Group
HealthContribute togood eating habits
and health

Secure the Necessary
Amount of Food

Eco-friendlinessEnjoyment
Deliciousness

Stable supply

Simplicity and convenience

Business activities
with consideration
for food resource
sustainability

Value Creation Story

Reasonable priceFreshness
Reliability and safety

Junji Kawasaki

Vision for 2030: Where We Want to Be

Discovering new potential for the health value and chilling properties of materials, andutilizing digital technologies to contribute to good eating habits and longer healthy life expectancy.
S tep up R&D to develop new eco-friendly food resources and ingredients with health value
Group
MeasuresAllocate resources to marketing and DX to develop delicious, healthy products and provide services
for better eating habitsE stablish mechanisms to create and cultivate value in new domains and conduct innovation activities

Under its Mission to “Focus on Lifestyles, and Provide

Initiatives for Achieving Our Longterm Management Goals andRealizing Our Vision for 2030

True Satisfaction,” Nichirei has grown along with society.

In drawing up Compass Rose 2024, our current

Our Sustainability Policy: The Nichirei Pledge, which we

medium-term business plan, we had a series of discussions

established in April 2022, states that “We constantly

eating habits. We will therefore focus on an initiative toof reaching a total of 200 million people annually.

eliminate the contemporary health problem of malnutrition
brought on by the double threat of concurrent

about the new value Nichirei aims for in the domain of

Initiatives to Create New Valueunder Medium-term Business Plan
Compass Rose 2024

Nichirei Corporation and to roll it out throughout the

strive to create new products and services, while pursuingfood. Ultimately, we decided to focus on three kinds ofDuring WeWill 2021, our previous medium-term

entire Group. This will help us foster a corporate culturebusiness activities that help solve issues faced by ourvalue: health, enjoyment and eco-friendliness. We consider

business plan, we launched the Gohan-no-Mirai projectof taking on challenges, thus facilitating the creation ofcustomers and communities.” These issues arefood tech and digital transformation (DX) to be key

to offer new staple foods with health functions. We also

value worthy of the Nichirei brand.

inadequacies—inconveniences, impossibilities,

concepts for creating this value. By allocating more

took our first step in providing services via an app by

insufficiencies and dissatisfactions—and resolving them

resources to these two areas in addition to our existing

acquiring me:new, a startup that operates the AI-basedorganizations has been separately promoting andis the way to create new value.

core competencies in the areas of deliciousness andapp of the same name that generates menu ideas. In

building frameworks for these new business themes andovernutrition and undernutrition.
We will work to establish our IMS more firmly withinstable supply, we will promote the development ofaddition, we established an innovation management

creating mechanisms to carry them out. To ramp up ourhealthy and sustainable ingredients, products andsystem (IMS) based on ISO 56002 to systematicallyefforts to create new value, we combined the two

those caused by abnormal weather due to climate

services worthy of the Nichirei brand.

conduct activities for innovation.
In addition to Gohan-no-Mirai and me:new , underfunctions of the IMS and new business development toestablish Innovation Planning & Development.

Revision of Group KPIs

Compass Rose 2024 we have started dealing with edible

considered on a global level: even as Japan’s population

To realize our Vision for 2030, we reexamined theinsects, which are attracting attention as a new protein

other major changes society faces. I believe it isshrinks, the world’s population continues to grow, and isspecific meaning of “creating new value in food andsource along with plant-based and cell-cultured meat.

comparable in scope to the food shortages Japan faced

eventually expected to exceed 10 billion. Along with thehealth” as stated in the Nichirei Group material matters,

Among our existing products in areas with strong

after the Second World War. We realize that creating

many inadequacies to be resolved in the domain of food,and the Group measures required to do so. This led us

potential, we will enhance our Amani-no-Megumi seriesboth economic and social value is a prerequisite foras we see them now, new needs are also sure to arise.

to a target of a total of ¥100 billion in sales from theand other meat products with health value and conduct

corporate success and growth going forward, thus we

These are the areas we must address.

new ingredients we develop and delicious products andfurther research on new functions for acerola, which iswill continue to promote innovation worthy of theservices with a higher level of health value, as mentioned

rich in natural vitamin C. In addition, we consider initiatives

Nichirei brand.

above. We will also work to provide a range ofto promote nutrition to be key to forming good, healthy

This is a critical moment in terms of sustainability andNichirei Group Integrated Report 2022

Data

expected of it have changed as well. Food must be

Corporate GovernanceSociety is undergoing major changes, including

Sustainability

Over the past four or five years, each of ourpandemic-driven changes in consumer lifestyles andchange. A company’s reason for existing and the roles

42

information for good eating habits and health, in the hopeBusiness Strategy

The New Value the Nichirei Group
Aims to Create

Business Portfolio
Medium-term Business Plan

Director, Executive Officer;
in charge of Innovation Planning & Development
and Quality Assurance,
General Manager of Technology Management

Management Strategy

Based on the understanding that
achieving both social andeconomic value will be impossible
unless we create new value, we
are working to foster a corporate
culture of taking on challenges.

Improve the Quality of
Eating Habits

43

Nichirei’s New Businesses: Challenges beyond Current Fields

1

2AI-based meal
proposal business

https://gohannomirai.jp (Japanese only)

In Japan, the consumption of rice, which is the bedrockof the country’s food culture, has fallen by half over the
past 50 years. Current health fads have led people to
avoid carbohydrates, with a tendency to go to extremesin limiting intake. There is also the recent health issue of
new types of malnutrition caused by unbalanced diets.
Moreover, given the time and trouble required to cook
rice, consumption looks likely to continue falling. Nichirei
wanted to create an opportunity for Japan to rediscover
its rice-based food culture by offering simple andfunctional new staple foods made from rice, while3

Online sales modelfor new healthy foods

Initiative for edible insects

Technical/Analytical/
Marketing Support

Meat and poultry productswith health value

4(Amani-no-Megumi series,
other seeds)

5

Marine productswith new value

Seek out new sales models/R&D of new ideas for healthFreezing research

Initiatives for nutrition

Psychological statistics

Antifreeze proteins, etc.

Create original
nutritional targets

Visualization of Mental Processes
Psychological statistics is the science of quantifying
mental processes to visualize them in numerical data andmodels. It is possible to intuitively identify a consumer’s
train of thought through quantification and visualization
using sophisticated statistical methods such as carefully
designed questionnaire surveys, multivariate analysis andstructural equation modeling to provide numericalsubstantiation. Through its joint research with the University,
Nichirei is applying and deploying unique psychologicalstatistics techniques in its surveys of employee
satisfaction, corporate image and other topics. Goingforward, we intend to also use these techniques fororiginal consumer marketing.
Freezing Research
Nichirei is conducting ongoing research on antifreeze
proteins (AFPs) for a wide range of practical applications.

AFPs bind to ice crystals, inhibiting their growth. Other
effects of AFPs include inhibiting recrystallization, promoting
uniform dispersion of solutes and protecting cells in
low-temperature environments above the freezing point.
Applications are expected in a wide range of fields fromfood to medicine, cosmetics, reagents and industry. Nichirei
will combine the results of this research with its freezing
technologies to create new products and services.
Initiatives for Nutrition
We will step up our initiatives for nutrition to help resolve
the health problem of the double threat of concurrent
overnutrition and undernutrition. Initiatives will include
participation in the Ministry of Health, Labour andWelfare’s Strategic Initiative for a Healthy and Sustainable
Food Environment with the aim of being able to set
targets that ensure intake in recommended amounts
while avoiding excessive intake of substances of concern.

Nichirei Group Integrated Report 2022

Data

44

that parents and children can eat together, as well asallergy-friendly recipes. Needs for such services arerising in the BtoB as well as the BtoC market. Goingforward, we will work to provide new value in the form ofa data service business based on our research into foodpreferences and deliciousness.

Platform

Corporate GovernanceDue to factors including changes in work styles,
advances made by women in the workplace and thedevelopment of a super-aging society, the need toreduce meal preparation time at home is growing among
Japanese consumers. Likewise, needs are rising formeals that take health factors into account, such as
nutritional balance and food allergies. Many consumers
are finding it difficult to plan daily menus because of
these issues. To help resolve them, in August 2021
Nichirei entered the AI-based menu proposal service
business by acquiring all the shares of me:new, a startup
that operates an automatic menu generator app of thesame name, and created a new business by integrating
me:new’s services with the conomeal kitchen app andservices Nichirei developed in-house. The me:new app
creates up to a week’s worth of menus. Mainly geared
toward families with young children, it suggests recipes

https://info.menew.jp (Japanese only)

ingredients like vegetables, fish or
meat. By investing in TAKEO andcombining its know-how with ourprocessing technologies, we will
broaden the potential of edible insects
to create a new culinary domain.
As a new challenge, Nichirei aims todevelop products and provide services
that are eco-friendly, good for people,
and help make edible insects a morefamiliar ingredient in meals.

Sustainability

A Data Service Business Based on Food Preference Analysis:
me:new Automatic Menu Generator App

Providing new foods is an important subject for Nichirei,
which has an obligation to maintain a stable and sustainablesupply to meet potential future food shortages.
Insects have a low environmental impact and excellent
nutritional value and production efficiency. As such, they
are expected to be a sustainable food resource andhave therefore been attracting attention as a new foodingredient over the past several years.
TAKEO Inc., a trailblazer in Japan’s edible insect
market, has developed a diverse range of products andservices for meals in which insects can be enjoyed as

https://about.takeo.tokyo (Japanese only)

Business Strategy

Platform

Visualization ofmental processesInvestment in Edible Insect Startup TAKEO

Business Portfolio
Medium-term Business Plan

(Investment in TAKEO Inc.)

New Business
Models beyond
Current Fields

eliminating concerns about carbohydrate intake. Gohanno-Mirai is a new staple food made from rice flour andrice-derived dietary fiber using our original restructuring
technology. It contains a full day’s recommended
allowance of fiber with about half the carbohydrates,
and nutrients such as iron and calcium can be added
according to the health condition of the person eating it.
Because it uses ingredients derived from rice, it reproduces
rice’s familiar texture and flavor. Furthermore it can beprepared by simply adding hot water, making it a stressfree healthy staple food that can be eaten regularly. We
also offer personalized health support by providing
nutritionally balanced recipes and consultation services
with a registered dietitian. We will use customer dataobtained through direct sales and communication on
our Gohan-no-Mirai website to improve our products
and services, ensuring that our services consistently
match needs.

Value Creation Story

New Business Models for Health and Sustainable FoodsN ew Healthy Food: Gohan-no-Mirai

Management Strategy

To create new value in food and health, which is one of its material matters, the Nichirei Group will step
up development of original new healthy and sustainable ingredients, products and services that areworthy of the Nichirei brand, as well as initiatives for nutrition. We select priority themes for our
initiatives from three perspectives: helping to resolve health issues; new food resources and ingredientsthat are sustainable and eco-friendly; and taking on the challenge of new business models.
Out of a total of five themes, three are being carried out by Nichirei Corporation and two are being
conducted in collaboration with operating companies. We will focus our resources on the visualization of
consumers’ mental processes using our unique psychological statistics, research to discover new value infreezing, and initiatives to create our own nutritional targets.

45

Business Portfolio
The Nichirei Group’s Business Portfolio

Processed Foods Business

Temperaturecontrolled
Logistics

No.1

Greaterstability
Business Details

Frozenfoods sales

No.1

Processed
Foods

share in Japan

IssuesSales Growth and High Capital Efficiency

Volatility46• Ongoing stable growth with fixed volumes in Japanand overseas• Capital equipment is the source of competitive
advantage and barriers to entry are high
• Low ratio of variable costs

FY2022
Sales
Composition

138.0

900

105.3

106.7

140.4

113.4
875.4

Overseas

17%600

Others

728.4

6%

734.6

769.0

844.6

300

 ain sales outlets for ain sales outlets for・M・MHousehold-use
Commercial-use Prepared
Prepared Foods:
Foods: Volume retailers
Volume retailers, drug(delicatessen items),
stores and convenience
convenience storesstores(delicatessen items),
restaurants and foodservices

0

2017

2018

2019

2020

2021

Source: M arket scale calculated by INTAGE Inc. SCI
consumer panel (Spending per 100 people (age 79
and under); all industry categories)

Nichirei Logistics Group is the largest logistics
group in Japan, consisting of a logistics
network business focused on transportation,
XD, LLP and 3PL businesses; a regional
storage business that operates logistics
facilities; an overseas business that has
operations in Europe, China and theASEAN region; and engineering services
for all stages from planning and design
to maintenance and management oflogistics facilities.
We provide the value of universal,
one-stop service through highperformance facilities that have theleading capacity in Japan and that offer
meticulous services.

Number of
Facilities

Capacity(Thousands of tons)

Hokkaido

7

94

Tohoku

4

64

Kanto

18

563

Chubu

11

221

Kansai12274

Chugoku/
Shikoku

12

130

Kyushu

12

175

Total

76

1,523

(Millions of tons)

30

Marine products

Meat and poultry products(Including processed foods)(Including processed foods)

Agricultural products

Frozen foods

Others(Including processed foods)

1.08

1.15

1.48

1.17

20

10

0

7.51

7.56

1.08

7.29

6.96

3.59

3.58

3.72

3.49

6.05

6.08

6.44

6.27

6.06

4.79

4.76

4.74

4.86

4.34

7.42
3.19

Marine, Meat and Poultry Products BusinessBusiness Details
Marine Products Business
ShrimpFish roe
Ratio of Sales
byMarine Species

Octopus(FY2022)

Others• Large initial investment, long recovery period

Area

Quantity of Goods Stored by ProductCategory in the Refrigerated
Quantity of Goods
Warehousing
IndustryStored by Product Category in th2016 2017 2018 2019 2020
Source: C ompiled by Nichirei based on Japan Associationof Refrigerated Warehouses documents•H igh ratio of overseas production andpurchasing necessitates sensitivity to theexternal environment

Capital Efficiency and Immediate
Return on Investment

Market Environment in Japan

Domestic Refrigerated Warehouse
Facility Capacity (As of March 31, 2022)

Meat and Poultry Products BusinessRestaurant

Wholesale fisherymarketRatio of Sales
byBusiness Sector(FY2022)

Shellfish

Volumeretailer/Others

Delicatessen/Home meal
replacement(HMR)

ChickenRatio of Sales
by Type ofLivestock Product

Pork

Ratio of Sales
byBusiness Sector(FY2022)

Beef(FY2022)

Volume retailer(Processed meat)

Co-op
Restaurant/
OthersMarket Environment

Market Environment

Amid ongoing high demand for marine products worldwide,
procurement conditions remain challenging due to soaring prices
in production areas and rising distribution costs, as well as theimpact of the weaker yen. In Japan, consumption continues todecline due to consumers’ deep-rooted and unchanging
inclination toward low prices.

Ongoing increases in feed prices have had an impact on procurement
prices for meat and poultry products in general. Concerns in Japan
about procurement of imported poultry products, and about the
supply of pork due to an outbreak of disease overseas have led
to higher domestic market prices for both.

Nichirei Group Integrated Report 2022

Data

Temperaturecontrolled
Logistics

Prepared frozen foods

1,200

Corporate Governance

Advantages

Profit Stability

8%

Frozen vegetables(Billions of yen)

Sustainability

Although the processed foods business has the advantages of high sales growth and capital efficiency, the recent
decline in profitability has made its high volatility an issue. In addition, although temperature-controlled logistics can be
expected to generate stable earnings, the business is characterized by heavy initial investment burdens that take time torecover, making immediate post-investment improvements in capital efficiency difficult.

• Sustainable growth is expected in a market withstrong demand• Differentiated product development capabilities• High capital efficiency

Processed
Agricultural
Products

38%

Business Strategy

Meat and
Poultry
Products
CapitalEfficiency

Processed
Foods

31%

Household-use Frozen Foods Market Scale

Temperature-controlled Logistics Businessshare in Japan

MarineProducts

Nichirei Foods provides frozen foods(household-use and commercial-use),
retort pouch foods and wellness foods
that utilize the company’s uniquecapabilities in product development andquality assurance. Our frozen foods
business in Japan is characterized byhigh market share for chicken, processed
rice products, frozen vegetables, andspring rolls in both the household-use
and commercial-use categories, and thelarge number of commercial-use
products handled for the home meal
replacement (HMR) and delicatessen
categories. Our overseas business isfocusing on the development and sale of
Asian food products in North America.

Commercial-use
Prepared Foods

Business Portfolio
Medium-term Business Plan

Refrigerated
warehousestorage capacity

Highercapitalefficiency

Market Environment in Japan
Household-use
Prepared Foods

Value Creation Story

ProfitStability

Business Details

Management Strategy

We have achieved results from our business portfolio in terms of growth, profitability and stability by concentrating
resources on processed foods and temperature-controlled logistics. The current portfolio is broadly divided into the twobusinesses of foods and logistics. Our full range of frozen food categories, encompassing marine, meat and poultry
products as well as prepared foods and vegetables, gives us the advantage of being able to respond to numerous
customers and business categories over the long term. These food products are the base cargo for our temperaturecontrolled logistics business, and have been indispensable to its growth.

47

Previous Medium-term Business Plan

Review of WeWill 2021
Review of Investment Strategy

Under our previous medium-term business plan WeWill 2021, we aimed to strengthen our foundation for growth bymaking capital expenditures, mainly in the processed foods and temperature-controlled logistics businesses. In addition,
we conducted initiatives to realize sustainable growth throughout the Group, to improve capital efficiency and expand
shareholder returns, and to create new value that supports good eating habits and health. The processed foods businessincreased sales through concentrated investment in mainstay categories, and the temperature-controlled logistics businessachieved stable business growth and improved profitability by strengthening its foundation for adapting to changes in its
operating environment. However, we fell short of the consolidated targets for FY2022, the final year of the plan, due topandemic-related cutbacks in operation at production bases and the rapid rise in raw material prices and other costs.

During the three years of WeWill 2021, capital expenditures totaled ¥93.0 billion out of a planned ¥100.8 billion, as we
invested for growth and strengthened our foundation, mainly in the processed foods and the temperature-controlled
logistics businesses.
Total Capital Expenditures over 3 Years

Initial Plan

WeWill 2021

(FY2017-FY2019)(FY2020-FY2022)(Billions of yen)

40
70 0

32.9

¥47.1 billion

Actual: ¥93.0 billion

Processed Foods Business¥34.0 billion

Temperature-controlled
Logistics Business¥49.9 billion(Japan: 80% / Overseas: 20%)

Capital Expenditures in Each Business

Capital Expenditures(Billions of yen)

31.4

30

657.0

598.0
580.1

20

602.7
584.9

27.9

27.3
2.2

627.0
60 0

4.4
30
20
10

572.8

2.6

8.1

12.5

17.1

19.9
12.9

0
2020

2021

2022

Processed Foods

Others

2019
Net sales (Targets)

2020
Net sales (Results)

2021
Operating profit (Targets)

2022

FY2021

Established Nagoya Minato Logistics Center
Established Honmoku Logistics Center

FY2022

Expanded Lyon Center of Entrepots Godfroy S.A.S. (France)
Expanded Maasvlakte Center of Eurofrigo B.V. (Netherlands)
Expanded Le Havre Center of Entrepots Godfroy S.A.S (France)

FY2021

Kevin Hancock Limited (U.K.)

FY2022

Norish Limited (U.K.)
Armir Logistyka Sp. z o.o. (Poland)(FY)

Operating profit (Results)

Financial Condition and Cash Flow
WeWill2021

Priority Measures

Net sales reached record highs from responding
to changes in the operating environment caused
by COVID-19.
Processed foods increased sales of household-use
products by capturing demand for eating at home.

Improve capitalefficiency and expand
shareholder returns

M aintained ROE of 10% or higher; continuously
increased dividends.

Cash flows fromfinancing activities

Free cash flow

Dividends paid

Share buybacks

Total return ratio

D/E ratio (Including
leased debt)¥119.6 billion(¥82.5 billion)¥37.0 billion¥17.7 billion¥10.0 billion

43 %0.5 times

IssuesD ecrease in profit (and profit margin) ofprocessed foods
 elay in responding to soaring raw
・D
material prices and yen depreciation
 educed operation at production
・R
factories in ThailandD elay in reform of marine products
business structureD eterioration of the earnings base in thebioscience business due to delay inresponding to changes in the operating
environmentD ecline in capital efficiency of processed
foods and meat and poultry productsReview by Segment

Processed Foods Business

Operating profit from temperaturecontrolled logistics was strong throughout
the three years of the medium-termbusiness plan, but a decline in operating
profit from processed foods in the final
year (FY2022) caused the Group as awhole to fall short of the plan. Profit
exceeded the plan due to recording
extraordinary income.**D etails of extraordinary income (FY2022 results)
Gain on sale of investment securities ¥3.9 billion
Mainly gain on sales of shares of the startup company inIndia in which the Company had invested

FY2022 Operating and Other Levels of Profit(Billions of yen)

FY2022 (Results)C onducted initiatives to create new value.
Improved external evaluation by upgrading
infrastructure for sustainability and ramping up
ESG initiatives.

Geopolitical risks and other factors are expected to make the procurement environment increasingly challenging
going forward. Under these conditions, we consider conducting profit structure reforms, including appropriate priceadjustments and cost reductions, and establishing a sustainable supply chain to be priority issues.

Processed Foods
Marine Products
Meat and Poultry Products
Operating Logistics
profitReal Estate
OthersAdjustment
Operating profit

Ordinary profit
Profit attributable to owners of parent

14.2
1.0
1.2
14.6
1.7
(0.3)
(0.9)
31.4
31.7
23.4

(4.5)
0.1
(0.6)
1.9
(0.1)
(0.9)
0.5
(3.6)
(3.5)
1.4

Net sales (Targets)

280

Operating profit (Targets)

14.6

16.9

15.9

263.0

Net sales (Targets)

240

11.8

11.4
220

11.6

12

244.2

235.0 234.8

200

225.5

16

Operating profit (Results)

14.6
227.0

11.4

12.7

218.4

12

224.5
212.3

8

220

(Billions of yen)

Net sales (Results)

Operating profit (Targets)

13.1

16
14.2

226.6

(Billions of yen)

18.7

247.0
240

20

Operating profit (Results)

17.2

16.7
260

Temperature-controlled Logistics Business(Billions of yen)

Net sales (Results)

201.0

204.4

8

206.5

4

4

0

0
2019

2020

2021

2022

Net sales (Targets)

80

75.0

(Billions of yen)

3

Operating profit (Results)

75.0(Billions of yen)

Net sales (Targets)

120

2021

2022

(FY)

91.1

67.7

2

94.0
88.3

80

63.1

3

Operating profit (Results)

98.0
84.1
1.6

60

(Billions of yen)

Net sales (Results)

Operating profit (Targets)

75.0

71.2
65.8

2020

Meat and Poultry Products BusinessNet sales (Results)

Operating profit (Targets)0
2019

Marine Products Business(Billions of yen)

0

(FY)

103.0
80.3

2

1.8

1.4
1.0

1

40

0

0

1.5

0.7
0.4
0.2
0.4

0
2019

2020

0.9

1.3

2020

2021

1.2

Data

Create new value that
supports good eating
habits and healthvs. Plan(Billions of yen)

Corporate GovernanceTemperature-controlled logistics enhanced its
operating condition by ensuring the appropriate
collection of payments due and promoting
business innovation, and achieved profit growth
exceeding the plan.

Cash flows frominvesting activities

Sustainability

Realize sustainableprofit growth: Raise
profitability bystrengthening themanagementfoundation andtransforming thebusiness structure

Results

Systematically allocated resources to corebusinesses.

48

Expanded production line at Yamagata Plant

0

50 0

3

(FY)

Group overall

FY2022Business Strategy

Logistics

Expanded production line at Funabashi Plant
Opened second plant at GFPT Nichirei (Thailand) Company Limited

Investments

10

550

13.4

Temperature-controlled logistics

31.5

30.5

650

37.8

35.0

FY2021Business Portfolio
Medium-term Business Plan

31.0

29.5

2

Temperature-controlled
Logistics Business

40(Billions of yen)1

¥43.2 billion

Processed foods

POWER UP 2018

Processed Foods Business

Value Creation Story

ResultConsolidated Net Sales and Operating Profit¥100.8 billion(Japan: 69% / Overseas: 31%)

Management Strategy

Overall Review

1

0.8
0.5
2021

2022

(FY)

0
2019

2022

(FY)

Nichirei Group Integrated Report 2022

49

Medium-term Business Plan Compass Rose 2024
https://www.nichirei.co.jp/sites/default/files/inline-images/english/ir/pdf_file/presentation/220510_e.pdf

Basic Policy of the Medium-term Business Plan

FY2022 (Results)

FY2025 (Plan)

vs. FY2022

Processed foods

244.2

275.0

30.8

4.0%

Marine products

67.7

44.0

(23.7)(13.4)%

Meat and poultry
products

80.3

95.0

14.7

5.8%

Logistics

224.5

260.0

35.5

5.0%

Real estate

4.3

4.8

0.5

3.6%

Others

4.2

6.7

2.5

17.0%

Adjustment(22.6)(25.5)(2.9)—

Net sales

602.7

660.0

57.3

3.1%

Net Sales

Improvesocialvalue

Realizing Sustainability
Management

Improveeconomic
value

Address material matters

Priority Measures

FY2025 (Plan)

vs. FY2022

CAGR

18.4

4.2

8.9%

Marine products

1.0

10

0.0

1.5%

Meat and poultry
products

0.8

19.6%

14.6

16.2

1.6

3.5%

Real estate

1.7

2.2

0.5

10.0%

(0.3)

0.5

0.8

—

Adjustment

(0.9)

(3.3)

(2.4)

—

31.4

37.0

5.6

5.6%

600

Capital Expenditures (Overview and Rough Breakdown)

3

Conduct business portfolio
management

Set cost of capital and target ROIC for each business
Promote the PDCA cycle by setting KPIs for profit margin and asset turnover
Consider business evaluation and resource allocation based on ROIC

Grow core businesses andimprove low-profit
businesses

Improve profitability of processed foods through pricing strategiesI mprove capital efficiency of temperature-controlled logistics by increasing third-party logistics,
transportation and delivery, and proactively utilizing assets held by other companies estructure marine products business and rebuild the earnings base of the bioscience business
R

Capital Expenditures

3-YearConsolidated Total

43.6

42.7

5.0

4.3

¥ 120.0 Billion

14.5

13.2

(Billions of yen)

50
40
30

D

24.1

Others25.3

Processed foods

0

Logistics

2025 (Plan) (FY)2024 (Plan)

Breakdown of Capital Expenditures by Purpose
PurposeFY2023 (Est.) FY2024 (Plan) FY2025 (Plan) 3-year Total

Growth investment

44%

61%

48%

Environmental measures¥29.2 billion investment in environmental measures (Installation of solar power generationequipment; investment in equipment upgrade for conversion to natural refrigerants)

Strengthening infrastructure

36%

24%

35%

31%

Maintenance/Others

20%

15%

17%

18%

¥8.7 billion in information-related investment(of which, environmental measures)

15%

23%

39%

24%

I ncrease number of human resources with skills in digital technology, global operations andsustainability
 onduct initiatives for reskillingC

Financial Strategy

F

Human resource
development

 romote business innovation using digital technology
P

Financial/Non-financial Targets (Consolidated)
FY2025 (Plan)

vs. FY2022

660.0

57.3

3.1%

Overseas sales

130.0

32.4

10.0%

We are targeting compound annual growth rates (CAGR) of
5.6% for operating profit and 7.4% for EBITDA during the plan
period. Although we expect ROIC to decline temporarily due toinvestment in growth and environmental measures, we will aim
for improvement as we move toward FY2028.

Operating profit

37.0

5.6

5.6%

Non-financial Targets(Billions of yen, except where noted)

Financial Targets
Net sales

CAGR

0.4%

—

37.8

6.1

6.1%

• Create new businesses

Profit attributable to owners of parent

24.5

1.1

1.6%

•P
 rocurement rate in accordance with

65.0

12.5

7.4%

9.8%

1.1％

—

Operating profit/Net sales

Profit per share
EBITDAEBITDA margin¥190 or more

ROIC

7% or higher

ROE

10% or higher

Creating new value

Sustainable procurement

Securing and developing
a diverse array of humanresources•E nhance production capacity for processed chicken and other products• Invest in environmental measures (elimination of CFCs, etc.)• Replace aging equipment•B uild new refrigerated warehouses (metropolitan areas in Japan)• Invest in environmental measures (conversion to naturalrefrigerants, upgrades to energy-saving equipment, etc.)•B uild new refrigerated warehouses (Europe)

Breakdown of Capital Expenditures by Location
Location

FY2023 (Est.)

FY2024 (Plan)

FY2025 (Plan)

3-year Total

Japan

85%

84%

85%

85%

Overseas

15%

16%

15%

15%

Details of Investment in Environmental Measures
Total investment¥29.2 billion

guidelines•3 0% reduction in CO2 emissions• Investment in education/training•U pgrading to natural refrigerant equipment: ¥11.3 billion

We will allocate operating cash flow to investment in core businesses for future growth and returns to shareholders. In
addition to providing ongoing, steady dividend increases with a target dividend on equity (DOE) of 3%, we will conduct flexible
share buybacks based on a comprehensive assessment of our financial condition and free cash flow outlook. We have set a
debt-to-equity (D/E) ratio of 0.5 times as a yardstick from the viewpoint of financial soundness and capital efficiency.

Allocation of Operating Cash Flow (Plan)

Financial Condition and Cash Flow

(Billions of yen, except where noted)

POWER UP2018

WeWill2021

Compass Rose2024 (Plan)

Operating

CapitalCash flows from operating activities

expenditures

102.0

119.6

142.0

cash flow

Cash flows from investing activities(49.6)(82.5)(109.0)¥ 142.0 billion¥120.0 billion

Free cash flow

52.4

37.0

33.0

Dividends paid

11.7

17.7

21.0

Share buybacks

23.0

10.0

•N
 atural refrigerant ratio•R atio of female managers• Introduction of solar power generation equipment: ¥5.0 billion(Including construction of new•U pgrading to other energy-saving equipment, etc.
refrigerated warehouses)• Provide high-value-added products• Implementation rate of ESG due diligence

Climate change
countermeasures

51%• Increase production capacity for cooked rice products

Shareholder returns

Increase/decreasein borrowings, etc.

Dividends• Flexible share buybacks•

Flexible investment
in growth strategies

Total return ratio
D/E ratio (including leased debt)

60%

43%

0.5 times

0.5 times

Nichirei Group Integrated Report 2022

Data

5.6%

Ordinary profit

Operating profit

Corporate Governance llocate resources to R&D, DX and marketing to create new valueA

Promotion of IT and DX

Temperaturecontrolled
logistics(¥64.9 billion)

Group overall

15.52023 (Est.)

Processed
foods(¥38.7 billion)

7.1

New business

E

(FY)

SustainabilityC¥63.8 billion)
 0% overseas sales ratio
22025 (Plan)

Capital Expenditures

33.6

11.0

10

¥130.0 billion in overseas sales (Processed foods: ¥51.0 billion; Temperature-controlled logistics:

Net sales

2024 (Plan)

We intend to strengthen our competitive advantages by continuing our concentrated investment in the processed foods
and temperature-controlled logistics businesses to increase production capacity and the number of storage facilities. We
will also increase investment in environmental measures to help achieve a sustainable society.

20

Overseas businessexpansion

02023 (Est.)

Business Strategy

Implement ESG due diligence for core suppliers
Expand use of renewable energy
Continue to strengthen corporate governanceIntroduce an ESG index target achievement system for executive compensation

B

20

602.7

2022

Strengthen ESG responsecontrolled logistics: ¥43.5 billion)

640.5

0

2

Growth investment30

10Operating profit

A

660.0

618.0

Use cooling power to develop ingredients and provide products that offer new health value
Utilize digital technology to provide new services and information that make meals better
Promote innovation activities by creating frameworks for generating and cultivating new value¥61.5 billion total Group growth investment (Processed foods: ¥16.5 billion; Temperature-

40

37.0

34.0

31.5

650

Create new value

Allocation of Management Resources(Billions of yen)

Business Portfolio
Medium-term Business Plan

Others(FY2023-FY2025)

31.4

14.2

2.0

Compass Rose 2024

700

Operating Profit FY2022 (Results)

1.2

WeWill 2021
(FY2020-FY2022)(Billions of yen)

Processed foods

Logistics

Consolidated Net Sales and Operating Profit

1

4

50

CAGR

We aim to increase net sales and operating profit by offsetting increased
costs for sustainability and other strategic purposes with business growth.

Value Creation Story

Group Strategy Help to resolve social issues through our business; pursue capital efficiency(Billions of yen, except where noted)

Management Strategy

The medium-term business plan Compass Rose 2024
is positioned as a period of transformation that will takeus to the halfway point toward realizing the long-term
management goal of our Vision for 2030.
The basic policy of the plan is to fulfill our social
responsibility as a company that supports good eating
habits and health through business activities based on
our sustainability policy, as we aim to improve oursocial and economic value by ramping up sustainability
management and pursuing capital efficiency.

Financial Targets (By Segment)

51

Processed Foods Business

Nichirei Foods Inc.
https://www.nichireifoods.co.jp/en/corporate/

Review of Medium-term Business Plan
WeWill 2021

The first product off the new line was Hiyashi-Chuka,

Due to the impact of factors related to the COVID-19

which offers the new value and enjoyment of a delicious

to the COVID-19 pandemic, the numbers of households

chilled dish that can simply be prepared using a

on movement, a slump in sales of commercial-use

using frozen foods and eating opportunities havemicrowave oven. We will also develop and produce

frozen foods led to a short-term decline in net sales, but

expanded, and frozen foods have started to becomecommercial-use products that help resolve the social

business conditions at restaurants and otherestablished among consumers as an everyday mealissue of labor shortages, and provide a high level of value

establishments have been recovering. Net sales

option. Against the backdrop of a chronic labor shortage,

for consumers. For cooking ingredients, we are enhancing

increased over the three years of the plan due tothere are high expectations for the special qualities ofmeal kits, which include vegetables, meat, sauces and othercontributions from household-use product andcommercial-use frozen foods to meet the market needs

ingredients and frozen vegetables, which have been

e-commerce sectors, which continue to grow as a resultof delicatessens, hospitals and senior care facilities in all

attracting renewed attention due to the COVID-19 pandemic.

stages of preparation, from raw materials to finished

As for health, our number one consideration is to provide

mainly in North America.

products. Under these circumstances, we will leveragedeliciousness, the universal value of food. Predicated on

our advantages—technologies for reproducing

that, we will utilize the unique formulation and cooking

decline in operating profit, especially in the final year ofdeliciousness, and a broad customer base—to further

technologies that our R&D and product development

the plan. First was disruptions in our network of suppliers

revitalize the market as we grow our business.

processing factory in Thailand, as well as sea freight

expanding rapidly in North America, with ongoing strong

delays, among other factors. The second issue was highof chicken products, we will strengthen our supply systemsales centered on household-use products. In addition toresource prices, which were brought about by the post-by promoting mechanization and labor saving at our

expanding our mainstay categories of chicken products

COVID restart of the global economy, resulting in higher

processing factory in Thailand, and begin diversifying

and cooked rice products, we will enter new categories

product costs and reduced profitability. Reorganizing ourpotential risks by producing some products in Japan for awith the aim of achieving the top share in the Asian foods

supply chain and rebuilding our profit base will be urgent

model that is mutually complementary with operations

market. In the acerola business, the strong antioxidant

issues for business continuity going forward.

overseas, including in China. For cooked rice products,

effect of natural vitamin C derived from acerola is gaining

our other mainstay category, we will bolster our supply

renewed recognition in the growing “clean label” market,

chain with a renewed emphasis on domestic rice, a mainmainly in Europe and the United States. This winter,

ingredient that is not affected by the overseas procurement

production of acerola powder will begin at a new facility atenvironment or exchange rates. Demand for cooked rice

our acerola raw materials subsidiary in Brazil, ramping up

products has grown significantly due to the COVID-19

our efforts to globally provide the value we have identified

pandemic and is expected to remain strong. To ensure a

9,013

through years of research.

Food production
factories

20 (15 in Japan, 5 overseas)
Mori Plant, Shiroishi Plant, Yamagata Plant, Funabashi Plant, Kansai Plant, Kyurei Inc., CHUREICo., Ltd., GFPT Nichirei (Thailand) Company Limited, Surapon Nichirei Foods Co., Ltd.

Main products

Advantages
A frozen foods pioneer with Japan’s top market share

Ability to make proposals tailored to diverse business types and consumer needs
Quality assurance and traceability that support safety and reliability

Material Matters for the Groupat the beginning of FY2024. From the perspective of our

We consider the five material matters Nichirei has identified

business continuity plan (BCP), this will also help toto be crucial for medium- to long-term growth and business

improve the distribution of our production facilities, which

continuity. For the material matter of “creating new value in foodhave been concentrated in Funabashi City, Chiba

and health,” we will use Nichirei’s strengths in reproducing

Prefecture. We will also work to improve rice varieties fordeliciousness and superior processing technologies as themore efficient harvesting and stable quality, thus

basis to develop and utilize new ingredients that address

contributing to improving Japan’s overall food self-

health and environmental concerns, provide new products

sufficiency through the cooked rice products category.

and services, and offer value unique to frozen products.

Procurement costs are rising due to soaring raw
material and energy prices in addition to the depreciationof the yen. In response, we will cut costs by improving
production efficiency and reviewing procurement

Data

Development and processing/production technology capabilities for reproducing
the deliciousness of homemade meals or meals prepared by chefs

production facility in Munakata City, Fukuoka Prefecture

Corporate Governance

Main production
facilities

more stable supply, we plan to start operation of a new

Sustainability

In the overseas business, the market for Asian foods isand rebuilding the profit base. For our mainstay category

Business Strategy

above-mentioned issues of reorganizing the supply chain

6 in Japan, 11 overseas

Employees(consolidated)

departments have refined to contribute to good eating
habits through a diverse product lineup.

pandemic-related curtailment of operations at our chicken¥150,150 million

Group companies

Compass Rose 2024 gives top priority to the two

Business Portfolio
Medium-term Business Planof changing lifestyles, and from our overseas business,

Value Creation Story

pandemic from the end of FY2020, such as restrictions

Management Strategy

We believe that Japan’s frozen food market will continue

Business Scale
Total assets

at the Yamagata Plant for personal-use, single-serving products.

to grow, even amid challenging business conditions. Duefor products and raw materials due to substantial

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

profitability. In February 2022, we added a production line

Major changes have occurred over the past three years.

On the other hand, two issues led to an unavoidable

Masahiko Takenaga

Policies of Medium-term Business Plan
Compass Rose 2024

methods, and make appropriate selling price adjustmentswith customer understanding.
In addition to the above measures, we will focus on
personal-use, single-serving products, cooking ingredientsand health to increase added value for our products andenhance brand power, thus building new sources of52

Nichirei Group Integrated Report 2022

53

Processed Foods Business

Basic Strategy

Material Matter

Creating New Value in Food and HealthImprove profit using original technologiesS trengthen production system/raw material procurement,
diversify risks

Supply chain
disruptions

Achieve stable operation of production factory in Thailand nhance new value-added products (health, personal-use,Esingle-serving products, cooking ingredients)
Intensively cultivate strategic categories

Expanding market
for frozen foods

Ramp up initiatives for growing business formats

4 Achieve earnings growth in overseas businessYamagata Plant can flexibly meet diverse needs, allowing us to offer awide range of meals and container formats. With a commitment todeliciousness that encompasses aroma and appearance, we will create
In the area of health, our focus is on developing new technologies thatfully utilize the characteristics of freezing. We currently sell calorie-, sodium- and other contentcontrolled wellness foods online and through other channels, and are developing products with a highlevel of health value, such as low-sugar and high-protein foods, for use in a wide range of meal options,
including restaurants and delicatessens.
Rich in natural vitamin C and with a strong antioxidant effect, acerola has inrecent years been used in a widening range of non-food applications, such as
cosmetics. We will further advance research and development to discover andutilize new functionalities.

Expand operations in North America
Conduct global rollout of acerola business

2 Reorganize supply chain infrastructure

Adjust prices in line with soaring costsS trengthen production system/raw material procurement, diversify risks

Adjust selling prices to reflect the impact of high raw material prices and currencytranslation

 ooked rice products: Work with producers to build a sustainable raw materialC
procurement system chieve both increased production capacity to meet brisk demand and BCP supportAChicken products: Establish a mutually complementary model by increasing the
proportion of overseas chicken products that are shifted to production in JapanR
 aw materials: Shift to domestic in-house production of raw materials originally
imported for use in main products

Acquire new sources of profitability
Further enhance brand power and added value through digital marketing andproduct development to establish higher price ranges

Improve profit using original technologies

Securing and Developing a Diverse Array of Human Resources

Establishing a New Department and Promotion
System to Increase Diversity

Achieve stable operation of production factory in ThailandImprove efficiency by automating raw material processing and avoid labor
shortages by securing staff
Increase production at GFPT Nichirei (Thailand) No. 2 Factory (expanded in 2020)
by developing products using new technologies

In April 2022, Nichirei Foods established the Diversity
Promotion Department. The new department
Diversity Promotion
Department

Human Resources Strategy
Department

Develop and Deploy Diverse
Human Resources

Build a Foundation of Trust for
Human Resources and Labor

will cooperate with the Human Resources
3 Create markets with new added value

4 Achieve earnings growth in overseas business

Strategy Department and the HAMIDASE
 nhance new value-added products (health, personal-use, singleserving products, cooking ingredients)

Expand operations in North America

Promotion Department in organizational

Intensively cultivate strategic categories

Expandthe cooked rice product lineup for the vibrant Asian foods market andensure supply by stabilizing the procurement and production systemE nter new categories to increase share in the North American market

Conduct global rollout of acerola businessR amp up pace of new value offerings for the “clean label” market that leverage
the strong antioxidant effect of acerolaD evelop high-value-added products that span strategic categories where Nichirei
is strong, such as cooked rice products and chicken products

OthersOperating profit

54

S ecure diverse human resources
and increase employee
retentionS upport human resource
deployment (Human Resources
Development Committee)P romote work style reformO ffer career support by age

 ork Environment
W
Counseling Desk

(Billions of yen)

FY2022 (Results)

FY2025 (Plan)

Increase (Decrease)

CAGR

244.2
76.8
92.6
20.0
40.8
14.0
14.2

275.0
85.2
102.8
21.8
51.0
14.2
18.4

30.8
8.4
10.2
1.8
10.2
0.2
4.2

4.0%
3.5%
3.5%
3.0%
7.7%
0.6%
8.9%

By doing so, we aim for individual growth and corporate
growth that creates new value through innovation. In
particular, we are focusing on measures to increase theratio of female managers, to provide opportunities for skill
development in response to changing times, to create
appropriate training and evaluation systems, and to

HAMIDAS Promotion
Department

Manage Based on Empathy and TrustR eform corporate cultureE mployee dialogue (Agura)P rovide streaming video andinformationP romote dialogue

Data

Overseas

resources who respect values that differ fromD esign a human resource
system that respects eachindividualIncrease the ratio of female
managers

most of their strengths and work with a sense of purpose.

Processed Foods Business Financial Targets

Processed agricultural products

We will develop and utilize diverse humanC reate human resource
development programs

environment in which everyone can make theE xpand lineup of products with enhanced functionality for the rapidly growing
e-commerce and welfare meal business formats

Commercial-use prepared foods

inclusion and improve job satisfaction.

their own and foster a corporate culture andR amp up initiatives for growing business formats

Household-use prepared foods

management to promote diversity andCorporate GovernanceD evelop products with health value based on our original freezing technologiesP rovide new value in the household-use and commercial-use categories (welfare meal
services, etc.) with personal-use, single-serving products that capture expanding
individual demandC onduct a further rollout of meal kits for labor-saving freshly cooked meals

Sustainability

 evelop original equipment to achieve differentiation based on quality, andD
reduce costs
Use AI, automation and other advanced technologies to improve production
efficiency

Material Matter

Business Strategy

1 Rebuild profit base

Net sales

New individual-serving production line at the
Yamagata Plant

a new market for personal-use, single-serving frozen foods.

Business Portfolio
Medium-term Business Plan

Opportunities

3 Create markets with new added value

The new production line for personal-use, single-serving products at the

Value Creation Story

2 Reorganize supply chain infrastructure

Sustainable growth that drives the GroupAcquire new sources of profitability
Establish suitable price ranges for high-value-added products

Establish new profit drivers

Adjust prices in line with soaring costs

Restore profitability

Risks

1 Rebuild profit baseNormalization ofhigh costs

Creating Markets Based on the Three Areas of
Personal-use, Single-serving Products, Healthand Acerola

Medium-term Business Plan Compass Rose 2024 Basic Strategies

Business Risks and Opportunities

Management Strategy

Achieve sustainable growth by restoring profitability and establishing new profit drivers

promote more dialogue within the organization.

Nichirei Group Integrated Report 2022

55

Temperature-controlled
Logistics BusinessAlthough our operating environment has changed
significantly, the temperature-controlled logistics
business achieved record-high consolidated net sales
and operating profit in FY2022. In Japan, householduse products remained strong, and we made progressin improving operational efficiency, resulting in steady
performance. In the European logistics business,growth in results was driven by capturing Brexit-related
demand for customs clearance, together with arecovery in consumption. Altogether, sales of ouroverseas logistics business exceeded ¥40 billion.
Under WeWill 2021, we strengthened our businessstructure as we were able to implement businessprocess innovation and receive appropriate paymentsthat reflect higher costs. We also made progress injoint logistics initiatives with frozen food manufacturers
and others. As we generated business results, wewere also able to make steady investments for growth,
including the construction of a new large-scale
distribution center in Japan, and M&A and expansionof warehouse capacity overseas.

In addition to having to deal with a labor shortage,
Japan’s logistics industry is about to enter a period ofmajor change with the imminent “2024 Problem,”
when penalties will be imposed on trucking companies
for exceeding the ceiling on working hours for truck
drivers. Viewing this as both a significant challenge anda business opportunity, Nichirei has designated thethree years of Compass Rose 2024 as a period forstrengthening the business foundation for dramatic
growth, and efforts are under way. In response to the2024 Problem, we have begun developing the nextgeneration S&U Logistics System (SULS) with the aimof building new transportation and delivery infrastructure.
We plan to start with trailer switching operations inTokyo, Nagoya and Osaka, and then gradually expand
to other areas. Because the 2024 Problem is a major
issue, we believe it requires an integrated approachthat includes a review of the frequency of individual
operations and lead times. In one of our initiatives toreduce vehicle waiting time, we generated results during
WeWill 2021 by introducing a truck loading dockreservation system and rolling it out to 30 facilities
nationwide. Through similar ongoing initiatives, we aim
to become an indispensable partner for our customers
and to secure predominance in the industry.

Business Scale¥194,503 million

Total assets

SULS ( Pages 36-37)
Truck Loading Dock Reservation System ( Pages 38-39)

Employees(consolidated)

4,609

Facilities

206 (Japan: 148, overseas: 58

Main facilities

Distribution centers: F unabashi DC, Higashi-ogishima DC, Heiwajima DC, Daikoku DC, Nagoya
Minato DC, Osaka Futo DC, Osaka Shinnanko DC
Cross-docking centers: Kawasaki FAZ XD, Kansai XD

Main businesses

・Storage・Overseas business

46 in Europe, 8 in China, 1 in Thailand and 3 in Malaysia)

・Transportation
・Third-party logistics (3PL)

・Cross-docking (XD)・Engineering services

Advantages
Japan’s leading advanced temperature-controlled logisticsO perational capabilities at logistics sites that provide ongoing support for foodbased on increasing value through better user experience

56

Data

F
 ull utilization of storage capacity and transportation and delivery network,
enabling optimal solutions that help resolve social and customer issues

We will also continue working to strengthen our
infrastructure in metropolitan areas. In addition to
networking our facilities in the Kanto region, in thesecond half of 2023 we will start operations at a new
facility in the Rokko district of Kobe that will mainly
handle fruit juice and dairy products.
Moreover, as we continue our efforts from theprevious medium-term business plan to promotebusiness process innovation, we will further refine ourmeasures for data-driven operations, automation andlabor-saving, and upgrade our technical infrastructurewith enhanced engineering. At the same time, we will
work to accumulate intangible assets by improving job
satisfaction, promoting diversity and conducting
internal as well as external branding.
In our overseas business, we will work to grow bothsales and profit. During WeWill 2021, we expandedfacilities at three bases in the Netherlands and France
and acquired temperature-controlled logistics
companies in the United Kingdom and Poland. TheseAs stated in Compass Rose 2024, we will work to help
resolve social issues with a business strategy centeredon enhancing logistics services. Another material
matter is climate change initiatives. We will meet social
demand by steadily converting our own assets tonatural refrigerants. Through capital investment andvarious measures to improve efficiency, we have
reduced CO2 emissions while growing our business.
Going forward, we will also promote the use ofrenewable energy, including the installation of solar
power generation equipment.

Corporate Governance

20 in Japan, 17 overseas (affiliates: 6 in Japan and 2 overseas)

Material Matters for the Group

SustainabilityGroup companies

moves increased the total storage capacity of ouroperations in Europe by approximately 160,000 tons
and enabled us to enhance the services they provide.
Under Compass Rose 2024, we will generatesynergies from these investments. By region, we will
expand cargo collection in port areas in the
Netherlands, offer one-stop services based on full-linefunctions in the United Kingdom, and use the networksof our enhanced infrastructure to improvetransportation and delivery efficiency in France, Poland
and Germany.
In Asia, we will continue our efforts from WeWill 2021
to steadfastly respond to the business expansion of
our existing customers in China, where the need fortemperature-controlled logistics is increasing, whilefurther expanding our own business by rolling out ourexpertise to other areas. In the ASEAN region, we willramp up cargo collection by providing support for
multiple temperature ranges and value-added services
at our newly expanded facility in Thailand. In Malaysia,
we will work to expand business by strengthening
collaboration between our Group company NL Cold
Chain Network (M) SDN BHD, which has strengths instorage, and NL Litt Tatt Group Sdn Bhd, a company
with strengths in transportation in which we haveacquired an equity interest.

Business Strategy

Policies of Medium-term Business Plan
Compass Rose 2024

Business Portfolio
Medium-term Business Plan

Review of Medium-term Business Plan
WeWill 2021

Value Creation Story

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

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

Management Strategy

Kazuhiko Umezawa

Nichirei Logistics Group Inc.

Nichirei Group Integrated Report 2022

57

Temperature-controlled Logistics Business

Basic Strategies

Material Matter

Enhancing Logistics ServicesE nhance trunk-route transport functions
S trengthen infrastructure in metropolitan areas

2 Overseas businessAdd new bases in major European regions

Supply chain
disruptions

S trengthen our wide-area transport network in EuropeE xpand in China and ASEAN

D evelop technical infrastructure (enhance business process
innovation and engineering)

Needs forsustainablelogistics

H elp resolve social issues in the industry (address the 2024
Problem,* elimination of CFCs, decarbonization, etc.)

Netherlands, in 1988. For more than 30
years, we have provided high-quality
temperature-controlled logistics services,
mainly to local companies in various parts ofEurope, contributing to improvements
throughout the supply chain in a wide area.
Current sales are 3.5 times those of 20 years
ago (FY2022 vs. FY2003). Including
branches and sales offices, we have
expanded to nine countries, and ourrefrigerated warehouse capacity has grown
to the fifth largest in Europe. We will continue
business, both qualitatively and quantitatively,

Business Strategy

as we strive to become an indispensable* Foreseen shortage of drivers following introduction of mandatory new limits on overtime in 2024

partner for our customers on a global scale.

1 (Domestic) Strengthen the business foundation for the next generation
Establish a frozen food logistics platform

Achieve high-level utilization of warehouse storage capacity by increasing the amount of frozen foods and processed

Enhance trunk-route transport functions

products handled

Maximize the effectiveness of our nationwide network

cold storage company in Rotterdam, theworking to further deepen and expand ourM ake capital investments that will lead to improved capitalefficiency in the next medium-term business plan

Strengthen infrastructure in metropolitan areas

Maximizing Investment Synergies
in the European BusinessBusiness Portfolio
Medium-term Business Plan

3 Initiatives for sustainable growth

operations started with the acquisition of a

Value Creation StoryM aximize the effectiveness of our nationwide network

Nichirei Logistics Group’s European

Improve profitability and capital efficiency

Normalization ofhigh costs

Strengthen the business foundation for the next generationE stablish a frozen food logistics platform

Achieve both sales and profit growth

Risks

1 Domestic business

Opportunities

Making Our Advanced Logistics the Global Standard

Medium-term Business Plan Compass Rose 2024 Basic Strategies

Business Risks and Opportunities

Management Strategy

Help to resolve social issues and strengthen the business foundation for the next generation to improve future
capital efficiency

Invest in increasing capacity in metropolitan areas and develop gateway functions
G row asset-light businesses such as lead logistics provider (LLP), transport and cross-docking businessesE xpand warehouse storage capacity under management by proactively utilizing assets held by other companies

Material Matter

Climate Change Initiatives

2 (Overseas) Achieve both sales and profit growth• Netherlands: Expand port business in tandem with port warehouse capacity expansion• UK: Leverage the effects of the acquisition of Norish Limited and expand business through further capital investment

Expand in China and ASEAN• Expand our regional transportation and delivery network through high-level cooperation across Germany and Poland• China: Expand business outside East China

Initiatives to Convert to Natural Refrigerants
and Reduce CO2 Emissions• ASEAN: Expand integrated logistics services by enhancing coordination between storage and transportation functions

Nichirei Logistics Group is engaged in various
initiatives to reduce its environmental impact. We are

3 Initiatives for sustainable growthpromoting the use of natural refrigerants in ourdomestic and overseas facilities, and plan to reach a

Gain a competitive advantage by establishing business infrastructure that addresses the 2024 ProblemP romote environmental measures such as reducing CO2 emissions and converting to naturalconversion rate of 75% by 2030. Over the past 10

refrigerants

years, we have grown our business while reducing

Accelerate digitalization and proactively introduce automation and labor-saving technology

Address the 2024 Problem
Implement measures for elimination of CFCs and decarbonizationelectric power usage through various ongoing

Temperature-controlled Logistics Business Financial Targets
Net sales
In Japan
Overseas

In Japan
Overseas
Others/Intersegment

58(Billions of yen)

FY2022 (Results)

FY2025 (Plan)

Increase (Decrease)

CAGR

224.5
174.4
45.9
4.3
14.6
13.4
2.1
(0.9)

260.0
191.6
63.8
4.6
16.2
14.0
3.2
(1.0)

35.5
17.2
17.9
0.3
1.6
0.6
1.1
(0.1)

5.0%
3.2%
11.6%
2.6%
3.5%
1.4%
15.5%
—

to improving efficiency though a review of work
operations. We are also proactively implementing
and planning to expand measures to use renewableenergy, including the installation of solar power
generation equipment.

Data

Others/Intersegment

Operating profit

initiatives, from introducing energy-saving equipment

Corporate Governance

Develop technical infrastructure (enhance business process
innovation and engineering)
Help resolve social issues in the industry

Sustainability

Add new bases in major European regionsS trengthen our wide-area transport network in Europe

Solar panels installed at the Honmoku Distribution
Center of Kyokurei Inc. in February 2022

Nichirei Group Integrated Report 2022

59

Marine, Meat and Poultry
Products Business

Policies of Medium-term Business Plan
Compass Rose 2024

Operating profit for FY2022 in the marine, meat andpoultry products business increased compared withthe previous fiscal year.
In the marine products business, although ouroperations for restaurants faced difficulties due to the
COVID-19 pandemic, profit increased as we
responded flexibly to a wide range of businessformats and channels. Sales that captured newneeds in e-commerce and other business formats,and sales of ingredients such as crab in North
America and China were particularly strong.
In the meat and poultry products business,changing social conditions and other factors led to adownturn in sales of perishables produced in Japanfor home cooking. Pandemic-related delays inoverseas production and shipping of processedchicken for import to Japan and increased global
market prices of imported pork and beef also had asignificant impact on business performance. On theother hand, we made steady progress in developing
new markets for meat products with health value.

Under Compass Rose 2024, with a focus on
maintaining healthy lifestyles we will work for stableprocurement of food by promoting selection andconcentration based on capital efficiency and by
ramping up our efforts for sustainability.
The business environment will require flexible
responses to the post-COVID resumption of
economic activity, supply chain disruptions due tochanges in the international situation, and rising costs
for grain, energy and other commodities.
While keeping in mind environmental and social issues
in our production areas and logistics, we will build asustainable cycle of production, procurement and sales,
and increase profitability by using premium ingredientsand optimal processing to improve added value.

Marine products: ¥28,029 million

Meat and poultry products: ¥19,793 million

Group companies

Marine products: 2 companies in Japan, 6 companies overseas
Meat and poultry products: 5 companies in Japan

Employees(consolidated)

Marine products: 771

Food production
factories

8 (7 in Japan, 1 overseas)

Main production
facilities

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

Meat and poultry products: 457

Meat and Poultry Products Business

Advantages
Procurement of premium ingredients from around the worldP remium ingredient development capabilities that consider health and sustainabilityQ uality assurance and a thorough production management system that support safety and securityP rocurement network based on long-term relationships of trust with suppliers

60

Data

C
 apabilities for getting products to customers through optimal processing that combine our
trading company and manufacturer functions

Under Compass Rose 2024, we will work tostrengthen the domestic fresh product supply chainthat links production areas and customers. We will
strengthen our own factories to build a system forend-to-end handling of everything from thedevelopment of premium ingredients from theconsumer’s viewpoint to production and sales, andwork to increase logistics efficiency. We will also work
to expand sales of premium ingredients producedwith sustainability in mind, such as Junwakei chicken,
and aim to become a leader in the new market for

For creating new value in food and health, we will work
to expand sales of the Amani-no-Megumi series andother meat products with health value. For realizing
sustainable food procurement and resource recycling,
we will promote harmonious coexistence with theenvironment through the Inochi-no-Mori-Project andInochi-no-Umi-Project in the marine products
business, and take measures to counter global
warming by reducing methane emissions from cattle
belches. We will also work to address human rights
and environmental issues in the supply chain and to
expand regional recycling models.

Corporate Governance

Main businesses

1. M arine Stewardship Council (MSC) certification requires that wild seafood used
has been caught using methods that do not deplete the natural supply.
2. Aquaculture Stewardship Council (ASC) certification requires that marine
products used have been cultivated in a sustainable manner.

Material Matters for the Group

Sustainability

Total assets

Overseas Sales
We will work to expand overseas sales of marine
products, which we have set as a growth area. We
intend to increase sales of shrimp, crab, processed
foods and other products in the booming North
American market, and products such as scallops andfrozen fish in the Chinese market. The market forJapanese food is growing globally, and Japanesekaiten-zushi (conveyor-belt sushi) shop chains andother stores selling Japanese food are opening in rapid
succession overseas. We will also utilize the functionsof Trans Pacific Seafood Co., Ltd., our processing
base in Vietnam, to expand sales through procurementthat leverages our advantages.
Although overseas sales of our meat and poultry
products are still small, we will expand them by exporting
domestic products such as Junwakei chicken andJapanese beef in coordination with our overseas bases.

Business Strategy

Business Scale

Marine Products Business
Under Compass Rose 2024, we will promote selection
and concentration of the product categories we handle.
To improve capital efficiency, we will concentrate
management resources on products such as fishroe, for which we have advantages in procurement,
and shrimp, for which we have long-standing goodbusiness relationships with producers. As an initiative
for sustainable procurement in light of the global
depletion of marine resources, we will also work to
expand sales of our own eco-friendly products(Inochi-no-Mori-Project and others) and MSC1 andASC2 certified products.
In addition, we will build a system at our own factories
that continuously generates added value, establishingprocessing capabilities to meet consumer needs andimproving production efficiency.

meat products with health value such as the Amanino-Megumi series.
From the perspective of capital efficiency, we aim to
improve profit margins by optimizing our portfolio of
product categories, including strengthening the lineup
of processed meat and poultry products, and byincreasing added value through optimal processing.

Business Portfolio
Medium-term Business Plan

Review of Medium-term Business Plan
WeWill 2021

Value Creation Story

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

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

Management Strategy

Wataru Tanabe

Nichirei Fresh Inc.

Nichirei Group Integrated Report 2022

61

Marine, Meat and Poultry Products Business

Basic Strategies

Material MatterReduce capital usedIncrease productivity and reduce costsS trengthen the domestic fresh food supply chain (meatand poultry products)

Expand overseas sales

Increased demandfor high-valueadded productsE nter new markets such as products with health value(meat and poultry products)R amp up initiatives in growing business formats

and sells meat with a focus on omega-3 fatty acids. Omega-3 fatty acids are called essential fatty acids because
the human body cannot synthesize them, so they must be ingested in food or through other sources. However,they tend to be lacking in the diet of today’s Japanese people, so finding a way to achieve a balanced intake
is considered important. One omega-3 fatty acid, -linolenic acid, is abundant in blue-backed fish, flaxseed oiland perilla oil. Nichirei Fresh gives chickens, pigs and cattle* a formula feed that uses flaxseeds as aningredient. This results in tender and juicy meat that is abundant in omega-3 fatty acid ( -linolenic acid), which
it sells as the Amani-no-Megumi series.
The Amani-no-Megumi series was the first

Comparison of Amount of Omega-3 Fatty Acid ( -linolenic
Acid) That the Body Can Absorb from 100 Grams of Meat

product in the meat products category to berecognized by physicians on the AskDoctors

Pork

medical advice website. Nichirei Fresh willcontinue to offer support for health management
and balanced diets through meat products foreveryday meals.
* There are individual differences among cattle.

(mg)
450
400
350
300
250
200
150
100
50
0

Amani-no-Megumi

Chicken Breast

436

4

Approx. -foldincrease
110

Standard
pork loin

Amani-no-Megumi
pork (domestic)

http://www.goodbalancemeat.jp/ (Japanese only)

4

Approx. -foldincrease

220

50Standard
chicken breast

Amani-no-Megumi
chicken (domestic)

Source: Nichirei Fresh study

Restructure the businessC onduct selection and concentration of productcategories

Increase handling of high-profit products and review low-profit products:
Concentrate management resources on products with advantages in procurement, processing and sales, and use less capitalR educe capital usedR
 educe inventories by reviewing procurement methods

Increase productivity and reduce costsU tilize Trans Pacific Seafood (Vietnam) and improve its productivity (marine products)
Increase logistics efficiency (meat and poultry products)

Material Matter

Realizing Sustainable Food Procurement and Resource Recycling
Nichirei Fresh Products That Have Obtained
MSC/ASC Certification (As of June 2022)

Promoting Sustainable Food
Procurement with Stakeholders

2 Strengthen the supply chainA chieve harmonious coexistence with the environment by promoting the Inochi-no-Mori-Project and Inochi-no-Umi-ProjectIncrease the proportion of MSC/ASC-certified products handled and ramp up sustainable procurement initiativesS trengthen the domestic fresh food supply
chain (meat and poultry products)

Strengthen in-house factories
B uild a system for end-to-end handling of everything from the development of premium ingredientsfrom the consumer’s viewpoint to production and sales

3 Cultivate growth areas

ASC-C-01632

Nichirei Fresh works with local governments, suppliers
and business partners in production areas to realize

MSC

Certification Number

MSC-C-52165

sustainable procurement of the foods that underpin its

Giant tiger prawn, Whiteleg shrimp, Pacific oyster,Atlantic salmon, Coho salmon, Rainbow trout
Arctic surf clam, Arrow-tooth flounder, Flathead sole, etc., Atka
mackerel, Capelin, Chinook salmon, Silver salmon, Pink salmon, Herring,
Japanese carpet shell, Longfin inshore squid, Pacific cod, Pacific oyster,
Chum salmon, Red king crab, Snow crab, Sockeye-red salmon, Walleye
pollock, Yesso scallop

business. In the marine products business, Nichirei
Fresh has been working with local suppliers in

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

 xpand overseas sales in North America and China based on increased demand in the global JapaneseEfood market (shrimp, crab, scallops, frozen fish, sushi ingredients, etc.) (marine products)
Coordinate with overseas bases to expand sales locally by exporting products from Japan (meat and poultry products)

Kalimantan, Indonesia since 2006 to promote aE nter new markets such as meat products withhealth value (meat and poultry products)

Expand sales of Amani-no-Megumi series products with health value and Junwakei chicken, which is
produced using a sustainable regional agricultural and livestock cycle (meat and poultry products)C reate meat products that offer new health value from various aspects including functionality,
sustainability and animal welfare (meat and poultry products)

also jointly launched a mangrove tree planting fund called the Inochi-no-Mori-Project , and uses the profits fromR amp up initiatives in growing business formatsR amp up initiatives in the growing business formats of e-commerce, mail order, home delivery and gift markets

shrimp farming method called extensive aquaculture, which does not use electricity or feed. The company has
the shrimp it raises through extensive aquaculture to plant trees in local coastal areas. In addition, the company
is increasing the proportion of MSC/ASC-certified marine products it procures from outside Japan.
In the meat and poultry products business, since 2009 Nichirei Fresh has

Marine, Meat and Poultry Products Business Financial Targets(Billions of yen)

FY2022 Results

FY2025 Plan

Increase (Decrease)

Net sales (total)

148.0

139.0

(9.0)

(2.1%)

Marine products

67.7

44.0

(23.7)(13.4%)

Meat and poultry products

80.3

95.0

14.7

5.8%

Operating profit (total)

2.2

3.0

0.8

10.9%

Marine products

1.0

1.0

0

1.5%

Meat and poultry products

1.2

2.0

0.8

19.6%

Hirono, Iwate Prefecture through the production of the Junwakei breed of

CAGR

chicken (a crossbreed of two native Japanese species). In 2020, Junwakei
chicken became the first poultry product in Japan to acquire SpecificJapanese Agricultural Standards (JAS) certification for sustainability.
First Specific Japanese AgriculturalStandards (JAS) certification given toa poultry product for sustainability

Nichirei Fresh will continue to work with its stakeholders to help resolve

Data

62

been implementing a sustainable regional agricultural and livestock cycle in

Corporate GovernanceE xpand overseas sales

SustainabilityIncrease handling of eco-friendly products(marine products)

ASC

Certification Number

Business Strategy

1

(mg)
450
400
350
300
250
200
150
100
50
0

Business Portfolio
Medium-term Business Plan

3 Cultivate growth areas

Nichirei Fresh conducts research and development of meat products with enhanced health value, and produces

Value Creation StoryIncrease handling of eco-friendly products (marine products)

Worseningprocurement
environment

Achieve business growth while maintaining stable earnings

Normalizationof high costs

Establish a competitive business foundationC onduct selection and concentration of product categories

Shift to a stable profit structure

Risks

1 Restructure the business

2 Strengthen the supply chain

Opportunities

Aiming to Lead the Industry in the New Market for Meat
Products with Health Value

Medium-term Business Plan Compass Rose 2024 Basic Strategies

Business Risks and Opportunities

Management Strategy

Shift to a stable profit structure and establish a competitive business foundation to proceed to the next stage

Creating New Value in Food and Healthsocial issues through its business.
Inochi-no-Mori-Project ( Pages 40-41)

Junwakei Chicken ( Page 77)

Nichirei Group Integrated Report 2022

63

Bioscience Business

Nichirei Biosciences Inc.
https://www.nichirei.co.jp/bio/english/

Transformation of the
Bioscience Business

Representative Director, Executive Officer, Nichirei Corporation
President, Nichirei Biosciences Inc.

Review of Medium-term Business Plan
WeWill 2021

Total assets

Employees(non-consolidated)

96

Nichirei Biosciences Global Innovation Center (production and R&D facilities)
Pathcom Systems Corporation (California, U.S.A.)

Molecular diagnostics,

Main products

Close Up

biomedical materials
and immunochromatographic
diagnostic reagents

Histofine ALK iAEP ® Kit
companion diagnostic

Histostainer-AT
automated immunostaining device

Accumulated technologies for development, production, and quality evaluation ofdiagnostic agents that use antibodies
A molecular diagnostics business model that combines the development and productionof both diagnostic agents and immunostaining devices

64

Letter of Appreciation from the Ministry of Health, Labourand Welfare and the Ministry of Economy, Trade andIndustry for the Supply of COVID-19 Antigen Test Kits

As the Omicron variant of COVID-19 spread
rapidly in January 2022, the Ministry of Health,Labour and Welfare asked manufacturers toincrease production of antigen test kits. We
received a message of gratitude from theministry for fulfilling our corporate responsibilityof providing a stable supply of such kits.

Data

Advantages

4. E
 coVadis, which provides comprehensive assessmentsof corporate sustainability, has rated approximately
80,000 companies in 200 industries in 160 countries in
the areas of the environment, labor and humanrights, ethics, and sustainable procurement. The
silver rating is awarded to only the top 25% of allcompanies that undergo the assessment.

Corporate Governance

Main facilities¥7,847 million

Nichirei Biosciences’ vision is to offer ongoingsupport for health by providing new value.
Consequently, the Nichirei Group’s material matter of“creating new value in food and health” is not somuch a focus area for us as the very essence of ourbusiness. We also work for “realizing sustainable
food procurement and resource recycling” as acommon theme throughout the Nichirei Group. In the
FY2022 sustainability assessment by EcoVadis, we
received a silver rating,4 an evaluation we intend tomaintain and improve.

Sustainability

Business Scale

Material Matters for the Group

Business Strategy

In the molecular diagnostics business, sales wereweak due to a decline in the number of pathologicalexaminations as people tended to refrain from visiting
medical institutions during the COVID-19 pandemic.
On the other hand, we launched two types of diagnostic
agents for automated immunostaining devices in
FY2022, and we expect to expand sales during
Compass Rose 2024. Although it took time to integrate
the medical instrument manufacturing subsidiary in the
United States that we acquired in 2019, as a growth

Under Compass Rose 2024, we will redirect
management resources to the molecular diagnostics
business, which is a growth area. Histofine ALK
iAEP ® Kit , our mainstay companion diagnostic,3 isrepresentative of our diagnostic agents that use
antibodies to detect biomarkers in oncology tests.
The number of cancer patients is rising globally,
including in Japan, where the population is aging.
Given this, the need for diagnostic reagents inselecting optimal treatment methods is expected tocontinue increasing. In addition to developing,producing and selling diagnostic reagents, we sell
automated immunostaining devices for
immunohistochemical staining tests. A businessmodel that integrates these product areas is not one
that other companies can immediately copy. In
addition to antibody-based diagnostics, we are also
moving forward with an application for regulatory
approval for a molecular diagnostic product from

Business Portfolio
Medium-term Business Plan

Hideo Yokoi

Policies of Medium-term Business Plan
Compass Rose 2024

3. In-vitro diagnostics for testing one’s biomarkers or genes, enabling patients toreceive appropriate drugs or therapies. They are used to improve the efficacy andsafety of certain drugs, and now several companion diagnostics are used to assess
whether patients are eligible for molecular targeted cancer therapies.

Value Creation Story

1. The functional materials business was transferred to Nichirei Foods in June 2021.
2. T he rapid diagnostics business changed its name to the immunochromatographic
assay business in April 2022.

Biocartis SA, a Belgian company with which weformed a business alliance in 2019, with plans for alaunch during Compass Rose 2024.
In the biomedical materials business, given
expectations of growth in the biopharmaceuticaldevelopment and regenerative medicine markets, wewill work to maintain and expand sales of serum,
which has been an area of strength for us.
Sales of the immunochromatographic assay
business are dependent on the state of the
COVID-19 pandemic. However, once influenza
becomes prevalent again, we foresee increased
needs for simultaneous testing for influenza and
COVID-19. We therefore intend to provide thenecessary test kits in line with market needs to help
resolve social issues and generate economic value.

Management Strategy

Nichirei launched its bioscience business in the
1980s as part of a drive to create new businesses. In
addition to the import and sale of fetal bovine serum
required for cell culture, we expanded our businessthrough the manufacture and sale of cow placenta
extract, which is a raw material for cosmetics.
Since the 1990s, we have also been conducting abiomedical materials business (involving the importand sale of growth media used for cell culture), afunctional materials business1 (involving the sale ofpowders and other products made from acerola), a
molecular diagnostics business (involving the development,
manufacture and sale of diagnostic agents using
antibodies produced from cultured cells), and an
immunochromatographic assay business.2

business it has steadily increased sales.
The impact of COVID-19 was greatest in the
immunochromatographic assay business, where
there was a decrease in sales volume of influenza
antigen test kits, which had accounted for about
80% of sales. Although we increased sales ofantigen test kits for COVID-19, it was not enough tocompensate, due in part to the smaller overall
number of test kits in the market in comparison withthose for influenza.
Thus the COVID-19 pandemic led to substantialchanges in the market, resulting in decreases insales and profit during WeWill 2021. Selection andconcentration to rebuild our businesses in line withthese changes in our operating environment is an
issue to address in Compass Rose 2024.

Nichirei Group Integrated Report 2022

65

Development of New Technologies
Needs relating to good eating habits have been growing and diversifying among customers and within society at large.
In the drive to further strengthen its core competencies and proactively resolve social issues, Nichirei will leverage its
autonomous driving, and robotics.

Following field tests, in FY2021 Nichirei Logistics Group began introducing anManagement Strategy

production technologies and logistics expertise, while drawing on new developments including those in AI, IoT,

Expiration Date Reader AI Solution for Tablet Inspections*
AI solution for automatically reading expiration dates from image data at 50
bases nationwide. As part of its efforts to fully digitalize warehouse operations,
the Group has adopted tablet devices and is using AI solutions to enhanceL aunch of Single-serving Noodles Using Original Technology That Keeps Noodles Cold
When Prepared in a Microwave
https://www.nichireifoods.co.jp/news/2022/info_id13305 (Japanese only)

their functionality. Previously input manually, expiration date input can now becompleted hands-free using AI, enabling highly accurate readings of 93% orhigher and fast processing speeds of about two seconds. This has further
improved quality control as it enables us to capture expiration date images
and to then convert those images into data records, simplifying overall(chilled Chinese noodles), a household-use frozen foodoperations so that they can be performed by anyone, thus facilitating stress-

product it developed as the first in a series of single-serving

free work.

noodle products that can be prepared in a microwave. A
microwave oven heats food by causing the water molecules* Automated expiration date reader AI solution: Preprocessing
technologies that use AI-OCR (Optical Character
Recognition/Reader) and image recognition to identify thecharacters of the expiration date from the image andcross-reference the recognized expiration date withinformation in the cloud, thereby achieving higher reading
accuracy.

Autonomous Driving Forklifts

in food to vibrate. The bonded hydrogen molecules in ice are

In January 2018, Nichirei Logistics Group began conducting field tests ofBusiness Portfolio
Medium-term Business Plan

less affected by microwaves, so they are harder to melt, whileautonomous driving forklifts at refrigerated warehouses. In 2021, they werethe molecules of the frozen noodles are further apart, making

introduced at the Daikoku Distribution Center of Group company Kyokurei. Athem easier to warm. We put these different characteristics of

distinctive characteristic of autonomous driving forklifts is that they can beeach food product to use in developing an original

given instructions using a tablet device, thereby making safe operation

technology* for producing chilled noodles that remain cold

possible for employees who might otherwise lack the physical strength oreven after they have been prepared in a microwave. This

operating skills to manually operate a forklift. Going forward, we will steadily

product took about five years to bring to market from theincrease the number of facilities with autonomous driving forklifts and tie that

initial concept, with about three of those years for

An autonomous driving forklift featured in OriOri, an in-house
Group publication

work, and improving occupational health and safety at our warehouses.

frozen foods, we take pride in the concept behind this uniqueproduct, which is the first in the industry to utilize theAutomated Guided Vehicles (AGVs)

characteristics of ice in a microwave.

In 2021, Nichirei Logistics Group introduced automated guided vehicles (AGVs)*Patent pendingat the Sendai Distribution Center of Nichirei Logistics Tohoku. AGVs are used
for transporting pallets supplied by Phoxter Corporation (Headquarters: Toyonaka
3. T wo-level tray that attractively displays

the ingredients

coldness of noodles once prepared

City, Osaka; President & CEO: Junichi Sonoda), which develops image

Sustainability

1. P atented technology for maintaining

processing technology and AGVs. AGVs for transporting roll pallets have also
been introduced at five transfer centers.

2. F
 rozen noodles that retain

The Group is focused on process innovation to address labor shortages,

a chewy texture

reduce the load on workers, and revolutionize on-site work so that anyone
can do it. We will continue to work on building an optimal labor environment

AGV for transporting
pallets

AGV for transporting roll pallets

series, Gokubuto-Tsukemen (chilled thick Chinese

wheat flour and a rich broth with a seafood and pork flavor.
The development of these products was driven by thenoodles served with a dipping sauce). This product also

move toward lifestyles that rely on cooking and eating

applies our original technology that uses ice to keep theoutside the home, as well as an increase in single-person

noodles cold while enabling the broth to warm. It features

households that has in turn increased demand forhomemade-style extra-thick noodles made with whole

personal-use, single-serving meals containing a staple
food and a main dish, as well as snacks that can be eaten
Foods’ Yamagata Plant in Tendo City, Yamagata
Prefecture invested approximately ¥4 billion in a
production line for personal-use, single-serving frozen
foods. It began operating in February 2022. This will help
us meet personal-use product demand, which is expected
to grow, and capture stay-at-home consumption.

66

S tart of Proof-of-Concept for Introductionof New Robot
Nichirei Logistics Group Inc. collaborated with Telexistence Inc. to conduct ademonstration test in which Telexistence’s remote-controlled robot loaded
mixed cargo on basket carts in the refrigerated area of a logistics facility.
The test confirmed the feasibility of creating a remote, stress-free work

Robot loading cargo on a basket cart

environment in logistics centers in which an operator in an office remotely
controls a robot in a refrigerated area. The work involved the operator visually

Datawith one hand. In response to this situation, Nichirei

Corporate Governanceand system leveraging the characteristics of both humans and machines.
In fall 2022, we will launch the second product in thisBusiness Strategy

measure into reducing working hours, economizing on manpower for on-sitecommercialization. With our many years of research intoThree Features

Value Creation Story

In March 2022, Nichirei Foods launched Hiyashi-Chuka

confirming each piece of cargo and its place of loading, them moving therobot and its arm by remote control.
We will continue to proactively introduce cutting-edge technology anddigitalize operations in working to achieve sustainable logistics that support
the supply chain.

Robot operator using goggles to check the
cockpit view for remote control operation

Nichirei Group Integrated Report 2022

67

Addressing Climate Change (TCFD)
The effects of climate change are becoming increasingly serious and climate change is considered to be a contributing
factor in the frequent abnormal weather patterns and natural disasters currently occurring. The Nichirei Group’s businessthreat to business continuity.
In June 2020, the Nichirei Group expressed its support for the recommendations of the Task Force on Climate-related
Financial Disclosures (TCFD) and announced its participation in the TCFD Consortium. The Group has positioned climatechange initiatives as one of the material matters it identified for achieving its vision for 2030. As such, we are actively
promoting initiatives to help resolve social issues related to climate change.
In addition to appropriately responding to risks posed by shifts in the external environment caused by climate change,

Forestry and Fisheries” issued by the Ministry of Agriculture, Forestry and Fisheries; and the Representative Concentration
Pathway (RCP) scenarios described in the Fifth Assessment Report of the Intergovernmental Panel on Climate Change(IPCC). The analysis showed that, in terms of transition risks (risks related to transitioning to a low-carbon economy), bothrice and chicken would be impacted by increasing costs associated with the introduction of a carbon tax and low-carbon
production methods.
For physical risks (risks related to the physical impact of climate change), we conducted the following investigation toclarify how a temperature rise would affect our suppliers in terms of the impact on production volume.

business opportunities, and conduct timely disclosure.

Physical Risk Impact Assessment (Analysis of Estimated Change in Yield by Climate Scenario)

Governance1

using the “Introduction to Information Disclosure on Climate-related Risks and Opportunities for Food, Agriculture,

The Nichirei Group has established a Group Sustainability Committee that formulates sustainability strategies, including
initiatives related to climate change, and manages the progress of those strategies. The committee (chaired by the representative

We analyzed future yield forecasts for each climate scenario, in terms of changes in rice and chicken production. For
each climate scenario, we used the IPCC RCP scenarios (2.6, 4.5, 6.0, and 8.5).

the strategic planning and sustainability divisions of each operating company. Climate change-related strategies andtargets discussed by the committee are reported to the Board of Directors by the officer responsible for climate change
initiatives. Strategies, targets and plans are reviewed as appropriate. The Group Environmental Protection Committee was

Area

Kanto, Tohoku and Hokkaido production regions: 11 zones

Climatescenarios

RCP 2.6, RCP 6.0

Data used

ISIMIP (the Inter-Sectoral Impact Model Intercomparison Project)

Japan: 6 zones, Thailand: 2 zones, Brazil: 1 zone

over the functions of the Group Environmental Protection Committee, and began serving as the secretariat for the Group

Japan: RCP 2.6, RCP 8.5
Overseas: RCP 4.5, RCP 8.5

Data used

Bias corrected climate scenarios over Japan based on
CDFDM method1 using CMIP52 (National Institute forEnvironmental Studies)M aterial Risks and Opportunities by Business and Scenarios Identified in 2020

2100

•S
 ubmerged agriculture farms, aquafarms
and processing factories• Increased cost for measures forconverting to renewable energy andequipment electrification, eliminationof emissions

Environmental
countermeasures
within the
supply chain• Curtailment of transactions; higher costof measures such as the maintenanceof global certifications

Low-carbon
policies• Damage to refrigerated warehouses
and logistics centers• Difficulty securing human resources indisaster risk areas• Increase of investment in naturalrefrigerants and opportunity loss
caused by the slow adoption oftechnological platforms such as
electrical and low-carbon vehicles

Strengthening ofenvironmental
countermeasures
within the supply
chain

Baseline
scenario• Increased demand for frozen andprocessed foods• Increased demand for ethical productsthat are compliant with the Sedex
platform and are created using globallycertified raw materials• Increased demand for the curtailmentof food loss within the supply chain
through the development of ecofriendly products and technologicaldevelopmenty = -0.3239 x ^2 + 15.042x - 74.632

y = Meat production volume when production volume for temperatures below 23°C is 100
x = Average temperature during the season to be analyzed (unit is °C)

Source: Yamazaki, et al., Animal Science Journal Vol. 77 (2), p. 231–235 (2006)

Using 2020 as the base year, we carried out a rice yield simulation (through to 2090) for our major domestic suppliers.
The table below shows the results of analyzing climate scenarios RCP 2.6 and RCP 6.0 for yields in 2030, 2050, and2080, when the base year is 1.00. (Values are the average of 12 simulations, combining four global climate models andthree yield models.) Even in the scenario where temperatures rise (RCP 6.0), yields increase, rising to between 1.11 and• Development and expansion ofdemand for products created using
sustainable raw materials

1.50 in Hokkaido in 2080.

Baseline
scenario• Difficulty in obtaining raw materials
and production delays due to supply
chain disruptions

Low-carbon
policies

Generalabnormalweather

Opportunities
Changes inweatherpatterns

literature, meat production decreases when the average temperature rises to 23°C or higher.

Generalabnormalweather• Increase in sales resulting from expanding
customer base through strengthened
disaster countermeasures and greater
resilience

Average Value of Yield Simulations When the Yield
for the Base Year (2020) Is 1.00

1.5˚C scenario

Flooding, rising
sea levels

Foods Business• Difficulty in obtaining raw materials andproduction delays due to logistics
network disruptions

Modal shift• Cost reduction achieved through amodal shift that improvestransportation efficiency

Increased
environmental
awareness• Increase in number of business partners
due to higher evaluations as a company
that actively discloses information
related to environmental countermeasures

Increased
environmental
awareness

Logistics BusinessBaseline scenario• Deterioration in the quality of
raw materials• Reductions in production efficiency andvolume and submerged aquafarms

Baseline
scenario

1.5˚C scenario

2050

RCP 2.6
Ishikari area
Hokkaido Kamikawa area
Sorachi area
Ibaraki Prefecture
Kanto

Note: The bioscience business is characteristically resistant to the impact of climatechange. Accordingly, we have not currently identified any material factors in ourbioscience business.

Climate Change Scenario in FY2022 https://www.nichirei.co.jp/sites/default/files/inline-images/ir/integrated/pdf/p58_p61.pdf (Japanese only)
Climate Change Scenario in FY2021 https://www.nichirei.co.jp/sites/default/files/inline-images/ir/integrated/pdf/p21_p24.pdf (Japanese only)

Gunma Prefecture
Tochigi Prefecture
Aomori Prefecture
Akita Prefecture

Tohoku Yamagata Prefecture
Miyagi Prefecture
Iwate Prefecture

2030
1.06
1.09
1.04
0.99
1.01
1.00
1.02
1.02
1.01
1.02
1.03

2050
1.15
1.27
1.09
1.04
1.05
1.05
1.06
1.05
1.05
1.06
1.07

Analysis Model Example(Ishikari Area, Hokkaido, RCP 6.0, Rice Yield)

RCP 6.0

2080
1.13
1.26
1.10
1.02
1.02
1.02
1.06
1.03
1.03
1.04
1.05

2030
1.06
1.13
1.04
1.02
1.03
1.02
1.03
1.03
1.04
1.04
1.03

2050
1.14
1.26
1.08
1.04
1.05
1.03
1.06
1.06
1.05
1.06
1.06

2080
1.24
1.50
1.11
1.09
1.11
1.09
1.10
1.10
1.10
1.13
1.11

Data

Logistics Business

Generalabnormalweather

1.5˚C scenario

Foods Business

2000

Corporate GovernanceCommonBusiness

1.5˚C scenario

Risks• Soaring prices due to shrinking
agricultural production

Chicken

Vegetables,
marineproducts,
and meatand poultry
products

1950

Sustainability

Business

Shrimp1900

Source: IPCC https://www.ipcc.ch/report/ar5/wg1/

For chicken yield, the analysis used the following formula (based on material published in 2006). According to the

In FY2023, we conducted a scenario analysis on the procurement of rice and chicken.

Rice

-2.0

1. CDFDM method: Cumulative distribution function-based downscaling method
2. CMIP5: Coupled Model Intercomparison Project Phase 5

Strategy20.0

Business Strategy

Area
Climatescenarios

have been conducted since 2019. The latest disclosure includes content discussed at a committee meeting held in July 2022.

68

2.0

climate change, we established a Sustainability Management Division within the holding company. This organization took
Sustainability Committee. The Group Sustainability Committee also discusses the details of various scenario analyses that

Range ofvariation

RCP 8.5
RCP 6.0
RCP 4.5
RCP 2.6

4.0

Chicken Analysis Criteria

responsible for these matters until FY2022. In April 2022, to respond to a wider range of sustainability issues, including

6.0

Business Portfolio
Medium-term Business Plan

officers including outside directors and outside Audit & Supervisory Board members, as well as relevant personnel fromTrends in Global Average Temperature Deviation (°C)

Rice Analysis Criteria

director, president of the holding company), also comprises the officer responsible for climate change initiatives, all other

Value Creation Story

we will consider numerous scenarios in which climate change could give rise to

We examined the risks and opportunities created by climate change in relation to the procurement of rice and chicken,

Management Strategy

benefits from nature. Therefore, in addition to its importance as a social challenge, we see climate change as a potential

Rice and Chicken Procurement Risks and Opportunities

Nichirei Group Integrated Report 2022

69

Addressing Climate Change (TCFD)

Using 2020 as the base year, we carried out a chicken yield simulation (through to 2090) for our major domestic andoverseas suppliers. The table below shows the results of analyzing climate scenarios RCP 2.6 and RCP 8.5 for domestic
models are used for domestic suppliers, and 21 for overseas. The average value of the simulations is for the period ofeach year when the average temperature is the highest. The results shown for all domestic suppliers are from July to
September.) In Iwate Prefecture, yields do not decrease even in the RCP 8.5 scenario, but under the same conditions
yields in Miyazaki and Kagoshima prefectures decrease to 95-97% by 2050. In Thailand, the yield values decrease to92% by 2050 in the RCP 8.5 scenario.

RCP 8.5

2050

2030

2050

Kuji City

100.00100.00100.00100.00Hachimantai City

100.00100.00100.00100.00

Karumai-cho,
Kunohegun

100.00100.00100.00100.00Hyuga City

99.30

98.40

99.00

97.40

Koyugun

99.20

98.00

98.80

96.90

98.80

97.10

98.10

95.10

Average Value of Yield Simulations When the Yield
for the Base Year (2020) Is 100

Braziloperations. However, due to the need to respond more quickly and accurately to various ESG-related issues, weestablished the Group Sustainability Committee as a separate entity in FY2023 to deal with ESG-specific risks andAnalysis Model Example(Karumai-cho, Kunohegun, Iwate Prefecture, RCP 8.5,
Chicken Yield from July to September)

The Group Sustainability Committee works with the strategic planning and sustainability divisions of each operatingcompany to identify important ESG-related issues and risks. The most important themes are then discussed by thecommittee. Specifically, the risk associated with climate change is positioned as a major risk for the Group. The
committee discusses and manages business risks and opportunities arising from scenario analyses.

4

Indicators and Targets

We have set forth the following as material matters: climate change initiatives; and realizing sustainable food procurement
and resource recycling.

N ichirei Group Material Matters (Materiality)
Analysis Model Example(Thailand, RCP 8.5, Chicken Yield from April to June)

Material Matter: Climate change initiatives
Group Measures

RCP 8.5

2050

2030

2050

Group KPIs

(January to
March)

Paraná

99.8

99.3

99.6

98.4

ThailandLop Buri

98.4

95.6

97.5

92.6

Chon Buri

98.3

95.6

98.1

92.7

(April toJune)

representative director, president. The committee has been managing our responses to major risks related to business

FY2025: 30% reduction in CO2 emissions (compared with FY2016; Scope 1 and 2 in Japan)
FY2031: 50% reduction in CO2 emissions (compared with FY2016; Scope 1 and 2 in Japan)

Material Matter: Realizing sustainable food procurement and resource recycling
Group Measures
Group KPI

Conduct sustainable resource procurement and help to realize a circular economy.
FY2031: 100% implementation rate of ESG due diligence for main raw materials and major suppliers

For Nichirei Foods, cooked rice products account for about 10% of net sales, while chicken products account for about 30%.
For Nichirei Fresh, the chicken business accounts for about 40% of net sales in the meat and poultry products business.
In these most recent investigations, even in the scenario of continued global warming, rice yields increase in ourhigher temperatures can lead to deterioration in rice quality, such as an increase in unripe grains, giving rise to concerns
about procuring rice that is suitable for processing.
In some areas, chicken yields would decrease in the 2050 temperature increase scenario. However, the chicken farms
where we currently procure chicken meat are equipped with air conditioning. Yields are therefore not likely to decrease

As part of its low-carbon policy, the Nichirei Group is

Nichirei Group GHG Emissions(Scope 1, 2 and 3 in Japan)

promoting measures to reduce Scope 3 emissions.* As

Scope 1

Scope 2

2.0 %

8.6 %

If climate change mitigation measures are strengthened (transition scenario), tighter regulations on greenhouse gas(GHG) emissions could increase the cost of raw material procurement.

procurement (category 1). We therefore recognize that, in

17.0 %

order to achieve a reduction in Scope 3, supplier efforts
to reduce GHG emissions are essential.
A cooperative relationship with suppliers is also

GHG Emissions(2021)
2,143,000 t-CO2eessential to realizing sustainable procurement. Based on
the Nichirei Group Sustainable Procurement Policy, we
Supplier Code of Conduct and the Nichirei Group

sectors as outlined in the Ministry of Agriculture, Forestry and Fisheries’ Act to Promote Environmental Burden Reduction
suppliers and reducing GHG emissions related to raw materials, we believe we could gain an advantage even in thetransition scenario. We will use life cycle assessments (LCAs) to evaluate the environmental impact of each product, as
well as develop livestock feeds that reduce such impact. We will also gather data from external research institutions toDatawill promote initiatives that follow the Nichirei GroupOn the other hand, we expect decarbonization measures to be promoted in the agriculture and livestock farming
Activities for Establishment of Environmentally Harmonized Food System (effective July 1, 2022). By working with ourof Scope 3 emissions comes from raw material

Scope 3 (Other)

due to an increase in temperature. However, there could be an increase in cost and amount of energy used to run the air
conditioning systems to ensure temperatures suitable for chicken farming.

shown in the figure on the left, the highest proportion

Corporate Governancecurrent supply areas. However, according to the Ministry of Agriculture, Forestry and Fisheries, there are reports that

SustainabilityF inancial Impact and Strategy

Promote reduction of CO2 emissions per unit of production and utilization of renewable energy atfood factories and logistics centers, and disclose information based on the TCFD recommendations.

Business Strategy

RCP 4.52030

The risks are also discussed and reviewed by the Group Risk Management Committee, which is chaired by theBusiness Portfolio
Medium-term Business Plan

2030

Kagoshima
Kagoshima City
Prefecturerisks) have on business management from a comprehensive standpoint employing both rational and optimal methods.

Value Creation Story

RCP 2.6

MiyazakiPrefecture

Nichirei ensures that appropriate divisions manage the impact that a variety of risks (including climate change-related

opportunities, including climate change.

Average Value of Yield Simulations When the Yield
for the Base Year (2020) Is 100

Iwate
Prefecture

Risk Management
Management Strategy

yields and RCP 4.5 and RCP 8.5 for overseas yields in 2030 and 2050, when the base year is 100. (Four global climate

3

Supplier Guidelines established in April 2022. We will
Scope 3 Category 1

72.4 %

also address human rights and environmental issues,
including Scope 3 emissions.
* See the next page for Scope 1 and 2 reduction efforts in Japan.

work toward breeding rice with a higher temperature tolerance and higher yield.
70

Nichirei Group Integrated Report 2022

71

Decarbonization and the Elimination of CFCs
The Nichirei Group Environmental Policy

The Nichirei Group Environmental Policy and Biodiversity Policy
https://www.nichirei.co.jp/english/sustainability/environment/policy.html

Utilizing Electricity Generated from Solar Powerto pass on to future generations the natural abundance that is the source of food and good health and to continue

The Nichirei Group is working to reduce CO2 emissions by installing solar power generation equipment on the premises

providing freshness and good taste—together with its stakeholders, it must use its superior products and first-classof food factories and on the rooftops of refrigerated logistics warehouses. We will further strengthen these initiatives as

logistics network to reduce the environmental impact of its business activities throughout the entire supply chain and help

part of Medium-term Business Plan Compass Rose 2024.

create a sustainable society.”

Solar Power Generation and CO2 Emission Reduction

The Nichirei Group Environmental Policy focuses on three priority issues: climate change initiatives, promotion ofsustainable recycling, and symbiosis with nature. For climate change initiatives, we recognize that food and logistics
carbon policies.

Long-term Environmental Goals and Low-carbon Policies
We will implement low-carbon policies to address one of our material matters and in pursuit of our long-term environmental

FY20202,068 Mwh

1,003 tFY2021

2,149 Mwh

986 t

FY2022

2,974 Mwh

1,408 tPurchase of Green Energy
Since 2007, the Nichirei Group has been purchasing and stockpiling

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

Renewable Energy Certificates (RECs)* every year. As a result, in
FY2021, the head office building (Nichirei Higashi Ginza Bldg.)

Pillar of low-carbon policy

Overview

Target scope

The establishment oflong-term CO2
reduction goals•5 0%* reduction in Scope 1 and 2 CO2 emissions (comparedwith FY2016) in Japan in 2030

Scope 1 and 2purchased RECs to cover all electricity used in production lines forin Japan

Honkaku-Itame-Chahan (fried rice). It is also making the shift to1

Business Portfolio
Medium-term Business Plan

goals. We will actively implement the following three measures during the 10 years from 2021 through 2030.

CO2 Emission Reduction

shifted to renewable energy (making use of RECs) for all of its
power usage. In addition, since March 2020, Nichirei Foods has

3

The promotion of
CO2 reduction
countermeasures
overseas•S tart data collection and other efforts at overseas worksites

The promotion of
Scope 3 CO2 reduction
countermeasures•P romote Scope 3 data collection and other efforts

Scope 1 and 2•R eview and promote CO2 reduction countermeasures atoverseas worksites

Overseas•R eview and promote Scope 3 CO2 reduction countermeasures

Scope 3*G reen power is power generated from renewable energy sources, such as biomass, solar and wind. The CO2 emission reductions achieved through the use of power generated fromrenewable energy are traded in the form of RECs.

Eliminating Chlorofluorocarbons (CFCs)
Switching to Natural Refrigerants
By 2030, we will have switched to natural refrigerants for 75% of

Sustainability

equipment used by Nichirei Logistics Group (based on tons ofequipment excluding leased equipment), including overseas* In June 2021, the target was revised upward from 30% to 50%.

Initiatives to Prevent Refrigerant Leaks(Thousand tons of CO2)

0.8

268

259

(market standards)1

224

228

0.6

0.54
0.46

(tons of CO2 per ton of production)2

0.42

0.41

0.41

199

182

185
0.2

43

44

43

42

42

43

2016

2018

2019

2020

2021

2022

0

72

0
(FY)

24-hour measurement.

Change of Fuel for Manufacturing Equipment

1. The CO2 emission coefficient for
power is the adjusted emission
coefficient used by powercompanies (Ministry of theEnvironment).
2. C O2 emissions per ton of production
include those from some Nichirei
Foods and Nichirei Fresh factories inJapan.

processes, including frying and baking. For the boilers that create
the heat energy used in manufacturing, we are systematically

Data

215

100

for refrigerant leakage, in FY2022 it introduced detectors capable ofFood factories use heat energy in a variety of manufacturing

0.4

224

existing refrigerators. In addition to carrying out regular inspections

CO2 emissions (total)
Emissions intensity

0.47

243

■■ Scope 1 emissions in Japan■■ Scope 2 emissions in Japan

241
200

Nichirei Logistics Group works to reduce refrigerant leakage from

(Tons of CO2 per ton of production)

286

Corporate Governance

In FY2022, we reduced our CO2 emissions by 20.2% compared with FY2016.

300

facilities, and 100% of the freezers used by Nichirei Foods at its
food factories and investee factories in Japan.

Nichirei Group CO2 Emissions

Business Strategy

renewable energy.
2

Value Creation Story

companies are greatly affected by climate change. We are implementing the following initiatives as part of our low-

Power Generation

Management Strategy

The Nichirei Group formulated the Nichirei Group Environmental Policy under the following theme: “If the Nichirei Group is

Renewable Energy Procurement

switching from kerosene and heavy oil to city gas and propane,
which produce fewer CO2 emissions.

Nichirei Group Integrated Report 202273

Conserving Water Resources and Biodiversity,and Using Less Plastic
Initiatives for Conserving Water Resources

https://nichirei.disclosure.site/en/themes/166

water resources in producing raw materials and conducting business, and strives to conserve such resources.

the Yellow Sea coast of China. Since 2006, Nichirei Fresh has procured

Water Risk Assessment
In FY2020, the Group conducted water risk assessments at all of its facilities (152 facilities in Japan and overseas) andidentified facilities where water risk was high as a result of internal and external factors. In FY2021, interviews wereconducted at the three facilities identified as having high water risk, and the Group confirmed at that time that there wereat facilities in Japan with respect to river flooding and storm surge risk due to typhoons and heavy rains.

Results of Aqueduct Water Risk Atlas Evaluation (Evaluation of external factors)
Water quantity risk

Water quality risk

Regulatory and reputational risk

Setting of questionnaire items

Step 2

Wastewater volume

Benthonic organism ecosystem

Shellfish (clams)

Water quality

Regulatory and reputational

Investigations at domestic facilities with respect to flooding andstorm surge risks posed by small, medium, and large rivers

Step 5

indispensable as a resting and feeding place for migratory birds. The
certification was the first example of a shellfish fishery improvement
project in China involving cooperation between participants in the supply
Nichirei Fresh will continue to increase the number of products that

MSC-C-52165

Since 2006, Nichirei Foods has been striving to reduce the amount of plastic used for household-use frozen food productcontainers and packaging. Recently we achieved a reduction of over 200 tons for seven items (series) of products,
compared with before these initiatives began. While continuing to reduce plastic use by reviewing product containers andpackaging, we will also work toward reducing our CO2 emissions.

Risk analysis based on worst case scenario

Initiatives for Thinner Packaging
Fiscal year

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

Smaller packaging

Protecting Endangered Orchids
Since FY2004, the Nichirei Group has helped in the conservation and regeneration

FY2007

Imagawa-Yaki (Japanese waffles)

Elimination of trays

FY2010Yaki-Onigiri (grilled rice balls) 10-packElimination of trays

FY2012

Honkaku-Itame-Chahan (fried rice)

Thinner packaging

FY2015Yaki-Onigiri (grilled rice balls) 10-packThinner packaging

FY2016

Honkaku-Itame-Chahan (fried rice)

Thinner packaging(second reduction)

FY2019

Ebi-Pilaf (shrimp pilaf) and Chicken Rice

Thinner packaging

FY2021

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

Thinner trays, reduced
tray handle width

FY2022Yaki-Onigiri (grilled rice balls)

Elimination of trays for
entire lineupof the endangered orchid Cypripedium macranthos var. macranthos and otherspecies through research on and the breeding of orchids and other plants in
Fujimi-machi, Nagano Prefecture. In 2014, some artificially propagated orchids ofSmaller and thinner trays

Thinner packaging

this species flowered and, in FY2020 they produced 32 blooms. Consequently,

Measures

Corporate GovernanceInitiatives for Conserving Biodiversity

Products

Sustainability

Third-party water risk assessment service employedconsiders the rich natural environment of the Yellow Sea coast, which isBusiness Strategy

Water quantity

Stewardship Council (MSC) certification for sustainable fishing that

Reducing Plastic Used in Frozen Food Containers and Packaging

Confirmation that risks have not manifested

Step 6(WWF) in a fisheries improvement project.

Plastic Reduction Initiatives

Interviews

FY2023

Co., Ltd., a supplier of clams, and the World Wide Fund For Nature

Production volume

Identification of priority facilities

FY2022

In 2016, Nichirei Fresh collaborated with Dandong Taihong Foodstuff*M SC certification requires that wild seafood used has been caught using methods that do not deplete thenatural supply.

Evaluation of business characteristics

Step 4and the deterioration of the natural environment.

bear the MSC certification* for sustainable fishing.

Identification of high-risk facilities

FY2021

Peoplehowever, we have become concerned about the declining yield of clams

chains of China and Japan.

Examining the composition of the water risk management questionnaire

Water intake quantity

Shellfish fishery
workers

Business Portfolio
Medium-term Business Plan

Implementation of water risk management questionnaire(Japanese and English; evaluation of internal factors)

Step 3

Snipes andplovers

In 2021, the shellfish fishery of the Yalu Estuary received Marine

Water Risk Assessment

FY2020clams from China for use as a premium ingredient. In recent years,

Birds (waders)Value Creation Story

no water risks in terms of quantity, quality or regulatory and reputational risks. In FY2022, investigations were conducted

Step 1

About 60% of Japan’s imported clams are sourced from wetlands along

Key Elements of the Coastal Wetland
Ecosystem of the Yalu River EstuaryManagement Strategy

As one factor in achieving its goal of building sustainable supply chains, the Nichirei Group recognizes the importance of onserving Biodiversity and MaintainingC
Sustainable Production: MSC Fisheries Certification
at Clam Fishery

Nichirei entered a biodiversity conservation partnership agreement with Fujimi-machi,
the technologies necessary for the conservation and regeneration of Cypripedium macranthos orchids and cover a
portion of the costs. In June 2021, the Committee began selling artificially propagated blooms and seedlings, which it

74

Data

Nagano Prefecture, and the Fujimi-machi Atsumorisou Regeneration Committee in February 2019. The Group will provide

Switching to Biomass Film and Ink

hopes will help prevent excessive picking of wild indigenous species. In our artificial pollination efforts, we avoid mixing

Since FY2020, we have used biomass film and ink on some product packaging and trays. Biomass

plants from the same lineage as much as possible in order to preserve genetic diversity.

ink is made from renewable, plant-derived materials, and its use helps reduce environmental impact.

Biomass ink logo

Nichirei Group Integrated Report 2022

75

Building a Sustainable Supply Chain
The Nichirei Group is working to build a sustainable supply chain. On April 1, 2022, the Group established the Nichirei
Group Human Rights Policy, the Nichirei Group Sustainable Procurement Policy, the Nichirei Group Supplier Code ofon Business and Human Rights and the Ten Principles of the United Nations Global Compact as well as on The Nichirei
Pledge, which is the Group’s basic sustainability policy. They also provide the foundation for “realizing sustainable foodprocurement and resource recycling,” one of the Group’s material matters. Going forward, we will continue to promote
the Nichirei Group Supplier Code of Conduct and Guidelines. We will evaluate risk factors in the supply chain and workwith suppliers to mitigate these risks in accordance with the potential impact on business.
We will work to build a sustainable supply chain by sharing values and building close relationships within the Groupand the Amakusa Fisheries Cooperative in launching the Inochino-Umi-Project. This initiative focuses on regenerating Zostera
beds, which are areas of the seabed where this type of marine
eelgrass grows. The project is funded using a portion of sales ofnatural shiba shrimp caught in Amakusa City, Kumamoto Prefecture.
Zostera beds are a spawning and nursery ground for marine life.
They play an important role in the marine ecosystem. However,
Zostera beds are declining in number each year, which impacts

Key Points for Amendment and Enactment

the habitat of marine life and causes water quality to deteriorate.

Respect for human rights in the Group and throughout the supply chain, implementationof human rights due diligence, introduction of system for filing grievances, etc.

gained overseas to protect ecosystems in Japan that support

PolicyNichirei Fresh will use the expertise and experience it has
Nichirei Group Human
Rights Policy

Respect for human rights throughout the supply chain, reduction of environmental
impact, consideration for animal welfare and biodiversity, etc.
https://www.nichirei.co.jp/english/sustainability/social/supplychain/supply.html©2010 Kumamoto Prefecture Kumamon #K32003

Sustainable Regional Agricultural and Livestock Cycle through Junwakei Chicken
https://www.nichireifresh.co.jp/product/livestock/detail/?id=347 (Japanese only)

In 2009, Nichirei Fresh launched a feed rice project inClarification of requirements for suppliers based on the Nichirei Group Sustainable
Procurement Policy

collaboration with the Japan Agricultural Cooperative in Iwate
Prefecture and farmers from Karumai and Hirono in 2009,https://www.nichirei.co.jp/english/sustainability/social/supplychain/regulation.html

and in the 13 years since then the project has been
implementing a sustainable regional agricultural and livestock
Nichirei Group
Guidelines Supplier

Explanation of items in the Nichirei Group Supplier Code of Conduct

High-speed manure processing plant

https://www.nichirei.co.jp/english/sustainability/social/supplychain/guideline.html

Organic fertilized made fromchicken manurearound 15 hectares. By FY2022, this area had expanded to

Sustainable Cycle

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

The fertilizer is usedin the rice paddies.

Feed-use rice paddies

Initiatives for Sustainable Procurement

The feed-use rice is stored andthen blended into feed.

In FY2023, we are inviting experts tofertilizer is spread over the feed rice paddies that were
Unhulled feed-use
rice harvested
from the paddies

JA Shin-Iwate Hokubu Shiryo-yo
Kome Puroject Iinkai (Feed-Use Rice Project Committee)
Karumai-machi Suiden Nogyo Suishin Kyogikai(Karumai-machi Council for the Promotion of Rice Paddy Agriculture)
Hirono-cho Suiden Nogyo Suishin Kyogikai(Hirono-cho Council for the Promotion of Rice Paddy Agriculture)previously fallow rice fields, providing nutrients for the soil.
Rice harvested from these paddies is fed to Junwakei
chickens as formula feed. Moreover, waste heat energy fromthe manure processing plant is used to heat the chicken coops.

participate in study sessions onsustainability for management. We plan tohold five such sessions. At the third session,
Mr. Hidemi Tomita of LRQA Sustainability

Initiatives for Sustainable Palm Oil (RSPO Oil Credits)

K.K. gave a lecture on sustainableprocurement and human rights. A total of

In August 2018, the Group became a member of the non-profit organization Roundtable on

139 people* attended the event, which

Sustainable Palm Oil (RSPO), which promotes the production and use of sustainable palm

created greater awareness of human rights

76

Data

oil. We are advancing efforts to ensure that the palm oil used to make our products is fromissues in the supply chain.
* Including 85 directors from the holding company and operatingcompanies and 54 officers from related divisions

Corporate GovernanceStudy Sessions on Sustainability for Management

Manure from the poultry farm is made into organic fertilizer
at an on-site high-speed manure processing plant. This

Sustainability

around 249 hectares yielding a harvest of roughly 1,700 tons.

Chicken manure is processed
into organic fertilizer.

Junwakeichicken (a crossbreed of two native Japanese species). Whenthe project was first launched, paddies for feed rice covered

The specialized feed isused to raise
Junwakei chickens.

Japanese
purebred chicken

cycle through the production of the Junwakei breed ofBusiness Strategy

Nichirei Group Supplier
Code of Conduct

Business Portfolio
Medium-term Business Plan

Nichirei Group Sustainable
Procurement Policy

seafood and the marine environment, and engage in sustainableprocurement of marine products.

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

Value Creation Story

and with suppliers.

In June 2022, Nichirei Fresh joined Fukuoka Uoichiba Co., Ltd.

Management Strategy

Conduct, and the Nichirei Group Supplier Guidelines. These polices are based on the United Nations Guiding Principles

Regenerating Marine Habitats

sustainable sources. Since 2018, Nichirei Foods’ factories (at consolidated subsidiaries in
Online study session

Japan and overseas) that use palm oil have been purchasing RSPO oil credits (via the bookand claim method) corresponding to 100% of the palm oil they use.

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

Nichirei Group Integrated Report 2022

77

TOWARD

2030

Human Resource Strategy
Message from the Officer in Charge

Optimizing the Organization’s Human Capital Portfolio

Visualize and centrally administer data on employee skills,
orientation, performance and other matters, and take timely
measures to maximize and enhance employee performance.

Based on employee data shared throughout the Group,
visualize the organization’s status on a dashboard. Based on
analysis results, take the personnel measures required to
optimize the human capital portfolio.

Redeployment and rolesetting for next fiscal yearS
 DGs/sustainability/
digital education

Appropriate deploymentof personnelP rovide personalized
learning opportunitiesE mployee rotationO pen recruiting ofGroup human resourcescompetencies/Evaluation

u

n
tio
ca s
l
il
Sk

n
tio
ra
a
l
ec
rd
ee
r
Ca

From
in
orga dividualnization to

En
ga
ge
sa
tis menfa
ct t/Em
Tr
io
ain
p
n
su loy
ing
rv
e
his
ey e
to
ry
Interview record

Visualize organizational dataH uman capital disclosure dataR
 atio of female managers
Labor management/
Organizational data analysis
S tatus of talent scouting, etc.

“Encourage empathy; use business to resolve social

somewhat with “health management.” In addition, we

employee checkups. As a result of this and otherissues,” “Generate value by linking knowledge, digitalintend to consolidate information on individuals on our

measures, we were recognized by the Ministry oftechnologies,” and “Cultivate a safe, secure corporate

new personnel data platform, and use it for matching

Economy, Trade and Industry under the Certified Healthculture to tackle challenges.” The Nichirei Group’s

and scouting talent. “New value creation” predicated on

work style reforms, construction of a new personnel data

& Productivity Management Organization Recognitionbusinesses and the work each employee handles are all

sustainability entails cross-fertilizing various kinds ofplatform, health management and revision of the officer

Program under the large enterprise category for theconnected to consumer and customer issues, thus

knowledge and ways of thinking, while new value in the

remuneration system.

sixth consecutive year.

ultimately to social issues. Behind the Sustainability Policy

digital realm is generated by combining various kinds ofis our desire to keep our employees attuned to thisknowledge. We will focus on training for each of theseto enhance governance by making our management

connection and encourage them to take on new challenges

types of value creation. We will begin by conducting DX

overtime and to increase the rate of use of annual paidteam acutely aware of sustainable growth and medium-in seeking out new value, without fear of failure.

training for all employees during Compass Rose 2024.

leave in line with policies we formulated in FY2018.

to long-term improvement in corporate value. We
therefore revised the system, adding a new stockcompensation component and incorporating ROIC andbeen difficult to roll out to our logistics centers and food

our ESG evaluation as KPIs.

production facilities, where more than half of our

The “personalized learning opportunities” we provide will
be tailored to the issues individuals face in advancing
their careers, and will complement conventional rankbased training. For example, the training we will conduct

We have reorganized our human resources strategy

for general manager candidates at the holding company

from five perspectives. Upon a foundation of “improving

is oriented toward dialogue with Company officers. Thisjob satisfaction” and “health management”—twoshould also be effective in promoting the advancement

Head Office and other business sites where telework

Establishing a Human Resources Policy
Linked to Our Sustainability Policy

has been adopted, figuring out methods for

For the Nichirei Group to conduct sustainability

perspectives we previously emphasized—we addedof female employees, which we have made a KPI for thecommunication between supervisors and their staff has

management and realize its Vision for 2030, thethe three perspectives of “diversity, equity andGroup’s material matters.

been an issue, so we will continue to develop rules for

Company needs to show employees what it expects ofinclusion,” “new value creation,” and “personalized

new work styles.

the Group’s human resources and make clear what thelearning opportunities.”

employees work. Meanwhile, in departments at the

The revision of our human resources policy will makeit easier for all employees to understand the linkage

Company must do to make those expectations a reality.

“Diversity, equity and inclusion” means providing fairbetween the policy and our measures. Management is

We have revised our approach to human resources andopportunities and promoting an environment, culture,sincerely committed to the human resources policy, inlinked to our talent management system, and started

our human resources policy from this standpoint.

For health management, we enhanced ourorganization by increasing the number of public healthpersonnel system design and other elements thatthe belief that it will serve as a guide for the career tracks

We view our human resources as critical to ourenable each individual to play an active role. We alsoof all employees. We therefore intend to conduct activities

Sustainability Policy. Based on this, the Group Humanplan to invest in femtech to support the advancement

to promote awareness and mutual communication.

Resources Policy consists of three principles:of female employees, although this will overlap

Nichirei Group Integrated Report 2022

Data

For the new personnel data platform, we completely
reviewed our core systems, constructed a new platformfull-scale operation in February 2022.

Corporate Governance

Telework was rapidly adopted, partly due to the impactof the COVID-19 pandemic, but this style of work has

Human Resources Strategy underMedium-term Business Plan
Compass Rose 2024

Sustainability

For revision of the officer remuneration system, we aimof our labor union in Group-wide efforts to reduce

Business Strategy

nurses in our workforce to focus on follow-ups toBusiness Portfolio
Medium-term Business Plan

Q

fi
al i

s/

Business execution/
Interim interview

During WeWill 2021, we mainly addressed four issues:

For work style reforms, we enlisted the cooperation

78

H uman resources withcompetency in digitaltechnology/
sustainability

Pulse Survey

Yutaka Karino

Human Resource-related Initiatives
during Medium-term Business Plan
WeWill 2021

Utilize in
deploymentS uccession

Review of goals andExecutive Officer;
in charge of Legal Affairs, General Manager ofGeneral Affairs & Public Relations,
General Manager of Human Resources,
General Manager of Secretarial OfficeAcquire/transfer skills

Value Creation Story

Goal setting

on
izati
rgan ualodFrom indivi
toIdentify strategic
human resources

Management Strategy

We will dynamically promotesustainability management
by developing human resources
and building organizations thatcan create new value and help
resolve social issues.

Improving Employee Performance79Cultivating Human Resources andImproving Work Satisfaction
In conducting business, the Nichirei Group places the greatest importance on human resources. To realize our vision for2030 based on our Sustainability Policy, we need to make our stance on human resources clear. We therefore
we need and the organization that we aim to be under the Group Human Resources Policy.
We have set out five human resource-related strategies based on our philosophy and the Group Human Resources
Policy. We will consider and then implement specific human resource initiatives, share information, and check their progress.

Medium-term Business Plan Compass Rose 2024, which began in FY2023, promotes the use of data and technology
within the Nichirei Group as a high-priority human resource development measure. We continue to provide educational
opportunities in line with this aim.
As global digitalization continues to accelerate, the use of data and technology will increasingly be needed to help
resolve issues for consumers, business partners and society. That is why we believe that being prepared will enhance the
Nichirei Group’s competitiveness.

Our Philosophy on Human Resources

Specifically, in the final year of Compass Rose 2024 we aim to appoint a Digital Leader at each department of our main

Human Resources Are Critical to Our Sustainability Policy

Bronze (the basic course for acquiring essential digital literacy) to DX Silver and DX Gold. Of the three, the DX Bronze
course is being rolled out for all employees (approximately 3,500 people) at our main companies in Japan. We expect all
employees to complete the DX Bronze program by FY2024.

• They are key to helping us support good eating habits and health, which will lead to a more sustainable society• Through diversity and motivation, they boost the Group’s development

Promoting DX is a vital business transformation initiative for realizing the Nichirei Group’s vision. We will work as one tomove that transformation forward.

• Their strategies, linked to those of management, underpin the social value of our human resources and promote behavioral change(The Kind of Human Resources We Need and the Organization That We Aim to Be)
DIgitally competent human resources
needed to promote DX

Develop proactive human resources by aligning employee aspirations with theGroup’s targeted social impact, based on the idea that food connects people

Encourage empathy; use businessto resolve social issues

DX training
Phase 3: Execute

Create an organization that contributes to good eating habits and health byincorporating a range of perspectives, as well as using data and digitaltechnologies in response to environmental change
Communicate work-related ideas, develop mutual trust, and cultivate a
corporate culture that can tackle challenges without fear of failure

Cultivate a safe, secure corporate culture
to tackle challenges

Requirements to beappointed as a
Digital Leader(Human resources who will
drive DX)

Able to carry out the planningand testing needed to apply data
and digital technology to work and business
Phase 2: Utilize

Able to use data and digital technology for workand business, based on consideration of their value and risks

DX Gold(Implement DX)

DX Silver(Experience DX)

Business Strategy

Generate value by linking knowledge,
digital technologies

Business Portfolio
Medium-term Business Plan

Development of Education for DX

Group Human Resources Policy

Value Creation Story

companies in Japan to promote the use of data and technology. The DX program will be implemented in tiers, from DX

Management Strategy

established the Nichirei Group philosophy on human resources. We have also determined the kind of human resources

Development of Education for Digital Transformation (DX)

Human Resources Strategies(Five Perspectives to Help Bridge the Gap between the Ideal Situation and Now)
Diversity, equity and inclusion (DE&I)

Creation of new value

Personalized learning opportunities•A ccept individual ways of thinking, as well
as strengths and weaknesses in terms ofknowledge, experience and work styles•U nderstand our purpose, and continuallychallenge ourselves to solve customer
and social issues•E ncourage personal growth, instill a
sense of continuous learning, and carryout reskilling•C reate an environment and a culture thatplace importance on providing fair
opportunities so that each individual canplay an active role

Phase 1: UnderstandCorrectly recognize and understand the need forand importance of digitalization

DX Bronze(Learn DX)

Corporate Governance•P rovide not only standard learning
opportunities, but also learning
opportunities tailored to the individual

Promoting the Advancement of Female Employees
Creation of
new value

DE&I

Work
satisfaction

Personalized
learning
opportunities

At Nichirei Foods, we launched an internal project to promote the advancement offemale employees. We send out video messages, and conduct surveys in order togain an accurate grasp of the current situation. We also hold “Women’s Agura”
roundtable discussions with female executives. We held these discussions 23 times in

Healthmanagement

FY2022, with 94 employees taking part. The sessions gave participants anopportunity to consider their future careers and helped them to create aWork satisfaction

Health management•P artner with employees to create aworkplace environment where they cantake pride in their jobs and workplaces
and feel a sense of motivation based on
mutual trust (improve engagement)•M aintain the physical and mental healthof employees, and create a stimulating
workplace environment where they cancommunicate openly and safely

Datacommunication network for sharing concerns with peers and supporting each other.

80

Sustainability

Company-wide
essential literacy

These activities have created a foundation for enabling female employees to takeon various challenges. By continuing to promote the project, we will support the
career aspirations of female employees and help improve work satisfaction for all
employees, regardless of gender.

Nichirei Group Integrated Report 2022

81

Health Management

Occupational Health and Safety

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

Since 2015, the Nichirei Group has been promoting initiatives based on the concept that the health and wellbeing of
employees is fundamental to increasing their work satisfaction. The maintenance and improvement of employee health

The Nichirei Group established health and safety committees to fulfill the requirements of Japan’s Industrial Safety and
Health Act, and is working to promote health and safety management aimed at preventing occupational accidents andCreating Savory Moments. With that core value deep in our hearts, every single
person who works at Nichirei Group will strive for good health maintenance.

The Nichirei Group
Health Declaration

managing the health of employees. At our head office, as well as at each branch office, we strive to eliminate long
working hours and reduce overtime work, while at food factories and refrigerated warehouses, we do our best to
prevent accidents. This is in addition to other workplace environment improvement efforts we undertake, tailored tothe conditions of each workplace.

Basic Policy

Renovation of Safety and Quality Training Centers
That Use Virtual Reality (VR)

Value Creation Story

1. W
 e will promote the creation of a workplace that has a lively cooperation between labor and management, based on theideal that states that good work has its basis in a healthy mind and body.
2. E ach of our employees will work hard to increase his/her health awareness, and will take an active role in creating a work
environment that promotes good health.
3. W
 e will strive for health management based on the three pillars of “health maintenance and improvement,” “mental healthmeasures,” and “safety and hygiene control.”Aiming to further improve safety and quality at its work sites, Nichirei Logistics
Group completed renovation of its Nagoya training center in June 2022, following
renovation of the Tokyo training center in September 2021.

Health Management Strategies

We work to promote safe behavior at worksites through interactive education

Investments in HealthIndicators of the status ofinvestment measures (outputs)

Share healthinformation acrossvarious media

Increase in view counts
and individual viewers

Use of healthmanagement
systems

Hold health-related
events and seminars

Increase in the numberof participants

Improvements
to regular
health checkups

Recommend healthcheckups/implement
follow-up measures

Higher rates of detailed
medical examinations

Carry out enhanced
stress checks

Provide education
on mental health

Increase in thenumber of participants

Ensure adequate
number ofhealthcare staff

Provide healthguidance during
workplace visits

Number ofvisits/interviews

Indicators of employee
mindset and behavior
changes (performance)

Higher percentage of
employees withgood lifestyle habits

Decrease inpeople/conditions
left untreated

Increase in people
practicing self-care

Indicators of health-related final targets(outcomes)

Management Issues
to Be Resolved byHealth Management

zero accidents by building a safe and secure workplace environment foreveryone at Nagoya Nichirei Service. Renovation involved creating an open
design classroom to provide trainees with a relaxed classroom environment.

Fewer issues foundduring health checks

Fewer people
with high stress levels

Increased
health literacy

Decline inpresenteeism1
levelsDecline inabsenteeism2
levels

Improved work
engagement3
levelsEmbodying
the Health
Declaration
Our employees, who
are responsible for“Creating Savory
Moments,” always
work vigorously
and in good physicaland mental health,regardless of theirage or gender.

1. Presenteeism: Continuing to work despite health issues
2. Absenteeism: Taking time off work
3. Work engagement: A concept indicating the mental health of employees, a state of mind in which three criteria (dedication, absorption and vigor) are met

Main Initiatives

For practical training, instructors participate in safety checks twice permonth at each worksite, with training tailored to actual onsite conditions. We
have also introduced training that utilizes digital technologies such as VR.

(Lower photo) VR training

Safety at Food Factories
Nichirei Foods has identified three priority measures for safety-related activities at food factories: safety patrols,near-miss-related activities and the mandatory observation of safety rules.
Monthly safety patrols are tailored to each factory, with effective checklist items determined based on work site
We also ask employees to share work-related issues and opinions.

Enhancing
our occupational
health system

We will gradually increase the number of regional public health nurses by FY2028. Our aim is for employees to have access to the same levelof health promotion services anywhere in the country.

then taken as needed.

Held as needed, near-miss-related activities are designed to reinforce reporting practices and inform employees
about possible dangers through the sharing of information about accident near misses. Activities reconfirm evaluation
criteria, thus ensuring consistency in methodologies for classifying an incident as a near-miss. Preventive steps are

Having started with stress checks, we now implement a fully integrated mental health strategy. In addition to helping employees with mental
health concerns, we promote good mental health via self-care and line care* and work to revitalize workplace communication. We also offere-learning courses about self-care and line care, and hold webinars 10 times a year, with over 400 employees taking part.
* Line care: A system in which managers/supervisors are attentive to changes in employees, provide opportunities for consultation, and work to make the workplaceenvironment better.

Ensuring healthmanagement andfollow-up measures

Since FY2019, we have achieved a 100% annual health check rate for our employees, even during the COVID-19 pandemic. In addition, we
follow up after health checks with interviews and guidance from public health nurses via e-mail or other online tools, based on the individual
employee’s diagnosis by an occupational physician. We continue to provide timely guidance to remote employees.

Countermeasuresagainst COVID-19

We are building a support system for preventing COVID-19 infections and handling confirmed cases. Occupational health staff at the Health
Promotion Center work closely with the Group Countermeasures Headquarters, the Nichirei Health Insurance Association and the Nichirei
Labor Union.

Occupational Health and Safety Initiatives for Foreign Technical Interns
Foreign technical interns working in Japan at the Nichirei Group
undergo training including occupational health and safety training.

Corporate GovernanceImprove health literacy(use of seminars
and intranet)

Sustainability

feedback. Patrols are conducted mainly in the early morning and late at night, when fewer managers are on staff.
To provide employees with specific health promotion opportunities and help them avoid lifestyle-related diseases, we have been holding
regular health-related events since FY2017. In questionnaires, more than 92% of participants at each seminar responded that the event was
beneficial. In addition, in June 2021 the Nichirei Health Insurance Association introduced a subsidy program for outpatient smoking cessation
treatment. It is working with the Health Promotion Center to support employees who want to quit smoking. In March 2022, we conducted asurvey of all employees in an effort to promote women’s health. Based on the results, we formulated our Women’s Health Promotion policy.
By FY2024, we will introduce online medical care for female employees (menstruation and menopause) in order to better visualize ways inwhich improvements in physical condition can contribute to increased work productivity.

Promoting mental
health(Upper photo) T raining textbooks created by Nagoya
Nichirei Service

Business Strategy

Measures to improvehealth literacy

Business Portfolio
Medium-term Business Plan

that involves active trainee participation. These activities are aimed at achieving
Results of Investments in HealthManagement Strategy

has been set as a management issue, and the Nichirei Health Promotion Center plays a key role in our efforts.

Management Framework

This helps to prevent occupational accidents and facilitates healthmanagement for those adjusting to life in another country, while atData

the same time helping them improve their Japanese-language
skills. Our goal is to create workplaces where all Nichirei Group
employees can work safely and healthily with purpose.

Bilingual poster in Japanese and Japanese language speech
Vietnamesecontests
Sharing of information on the intranet

82

Nichirei Health Promotion Center worksite plan

In-house mental health seminars
Nichirei Group Integrated Report 2022

83

Providing Safe Products and Services
Basic Policy on Quality Assurance

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

Quality Assurance Approach and Improvement Cycle
Improvements

To prevent intentional contamination of food products, the Nichirei Group believes it is critically important to foster

quality and safety of the food products and services it provides, sostrong bonds of trust with employees at worksites, creating environments in which accidents are unlikely. Furthermore,

Risk managementthat they are safe for consumers. At the same time, we are maintaining

it is necessary to employ both procedures and physical safeguards, as well as verification methods in the event of anand improving Group-wide levels of quality control, quality assurance

accident. We have established food safeguard (food defense) systems tailored to each product type. In-house rules

and customer satisfaction.

covering visitors and contractors, as well as self checks, are in place, and audits of our plants are conducted regularly

Food safety

We aim for further enhancements by implementing the PDCA cycle

to confirm safety. We are also working to improve the workplace environment based on employee satisfaction surveys

in our quality management system and food safety management

and interviews. We have installed cameras and face recognition systems at all of our plants in Japan and overseas.
Foodsafeguards

through internal audits and quality audits at factories.

(Food defense)

Food fraud
prevention

To protect the safety of food, we have created a system that is based on the distinguishing characteristics of eachproduct and enables follow-up investigations should issues arise. If an issue does arise, a link is established with ourfood crisis management system, which facilitates the dissemination of accurate information and quick responses.

Regular Audits (FY2019–FY2022)
Quality Assurance
Audit

FY2019FY2020

FY2021

FY2022

Overseas

Japan

Overseas

Japan

Overseas

Japan

Overseas

Number of Annual
Group Audits (Japan/
Overseas)

66

38

52

20

40

10

46

16

Annual Group
Implementation Rate
(Compared with plan)97%

Building a Traceability System

Internal audits
Factory audits

To always provide safe, reliable and high-quality food, the Nichirei Group conducts rigorous quality control and inspections,from ingredients to final products and has built a traceability system suited to the distinguishing characteristics of each

100%

87%

80%

58%

28%

66%

product. In the event of an accident, enhanced traceability prevents damage from spreading and enables rapid

48%

investigation of the cause. We also provide prompt and accurate information to alleviate consumer concerns.

Regular audits are conducted by each operating company based on an annual plan. The plans are formulated byrationally and objectively evaluating the magnitude of possible risks (based on risk management), ascertaining whether

Building a traceability system requires collaboration and cooperation on the part of ingredient suppliers, manufacturers
and distributors in our supply chain. The Nichirei Group regularly holds study sessions to deepen shared awarenesswith regard to quality-related information. To digitalize and link information, we are also promoting the utilization of ourannually and product characteristics. The PDCA cycle is also used in regular audits. Audit results are used as aproprietary system for central control.

Business Strategy

or not certification of international standards has been obtained, and determining the quantity of products handledreference when determining audit policies and target worksites when developing audit plans for the upcoming year.
Note: S ince FY2021, we have not been able conduct as many regular audits as planned due to restrictions on movement caused by the COVID-19 pandemic. However, we haveworked to expand and review our use of remote audits in order to confirm compliance with requirements and ensure safety.

Traceability of Frozen Green Soybeans (Illustration)

The Nichirei Group offers products and services with a variety of distinguishing characteristics. In addition to having internal

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

rules and regulations that support these characteristics, we are working to acquire international standard certification,
while strengthening our quality control system to ensure we continue to provide safe products and services.

Certification Status (FY2019–FY2022)
Certification

Operating Company

Rate of Certification4

2022. 10. 23 EB
Best-by date

Factorycode

13B 03 1 F401
Arrived Feb. 13

Truck number

Production
line number

Farm code

The information displayed in this row can be used to trace the following:

FY2019FY2020

FY2021

FY2022

Nichirei Foods

3/15

3/15 5

3/15 5

3/15

Nichirei Fresh

8/9

8/9

5/8

5/8

Nichirei Logistics Group

104/115

81/115

83/117

86/117

Nichirei Foods

14/15

14/15

14/15

15/15

Nichirei Fresh

6/8

7/7

7/7

7/7

Nichirei Logistics Group

2/115

2/115

2/117

2/117

Safe Workplaces, Better Service

ISO 14001(Environmental management system)

Nichirei Foods

11/15

11/15

11/15

10/15

Nichirei Logistics Group sets themes four times a year designed to prioritize safety andISO 13485(Medical devices and in vitro diagnostics)

Nichirei Biosciences

2/2

2/2

2/2

2/2

ISO 9001(Quality management system)

1

2

3

FSSC 22000, ISO 22000, SQF(Food safety management system)

The farm at which the product was harvested
The truck used to transport the harvested product
When the product arrived at the processing factory
Production line number

Corporate Governance

Information Contained in theTrace Code

Sustainability

Quality Control Based on International Standards

Business Portfolio
Medium-term Business PlanJapan

Value Creation Storysystem, and encouraging improvements when deficiencies are foundManagement Strategy

The Nichirei Group’s basic policy on quality assurance is to ensure theFood Safeguard (Food Defense) Initiatives

The information displayed in this row can be used to trace the following:

Date when the product was packaged
The factory at which it was packaged

Dataquality at warehouses. Accident prevention activities are conducted under these themes at
all domestic facilities (114 locations).

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

84

Nichirei Group Integrated Report 2022

85

Stakeholder Engagement
The Nichirei Group engages in global business activities, and as such recognizes the importance of maintaining
dialogue with its diverse stakeholders. We work to promote understanding of our business through various methods ofthe expectations and concerns of stakeholders in its business activities to establish long-term relationships of trust.

Joined the UN Global Compact

Management Strategy

communication with stakeholders and by disclosing information. The Group works to build corporate value by reflecting

Participation in International Initiatives
In November 2021, the Company joined the UN Global Compact, a global initiative torealize sustainable growth in the international community.

Objective

Customers

Better customer satisfaction
and corporate branding:
to be achieved throughprompt, appropriate andsincere responses to
consumer requests andfeedback

Issues Recognized

Means and Method of Communication•Q uality assurance for•C ustomer Service Center

the ten principles of the UN Global Compact in the areas of human rights, labor, theproducts and services•P roper delivery of
information•S upply of delicious foodand a rich variety of meal
options•C ustomer satisfaction surveys

environment and anti-corruption.

• Websites•S ocial media•G eneral Meetings of Shareholders•M aintaining and improving

corporate value• Appropriate distributionof profits•T imely and appropriate
disclosure of information•F inancial results briefings•B usiness information sessions, facility tours•D etailed interviews with individual investors in Japanand overseasof the NPO Second Harvest Japan. So far, we have donated a total of more than
20,000 cases of frozen foods to various welfare facilities, including foster homes,•E SG website

mother and child support centers, and disability support facilities.

• I ntegrated Report•S ustainable procurement•S ustainable procurement survey for suppliers•M utual development•M eetings and seminars with participation fromachieved throughcustomer intimacy

Since 2006, Nichirei Foods and Nichirei Logistics Group have supported the activities

In addition to supplying these products, we also provide temperature-controlled
logistical support to ensure that the items can be consumed with peace of mind.
Nichirei Group

Second Harvest Japanbusiness partners

C onsult with facilities to determine which

Nichirei Foods ships the

products are needed

requested products, which are•C ompile a list of requests from all facilities

then delivered to facilities by•C ontact Nichirei Foods

Nichirei Logistics Group•

Provide Second Harvest Japan with•E stablishment of an internal reporting centera list of available products•E stablishment of an employee assistance and mental•O ccupational health andsafety• Job satisfaction• Workstyle reform•H ealth management

Taking on the Challenge of Upcycling Products
Upcycling non-standard rice from Yaki-Onigiri (grilled rice balls) 10-packNichirei Foods has worked to reduce food loss by making donations to children’s cafeterias and food banks. We also
make use of the food residue generated during the production process by recycling it into fertilizer and feed. As a

Sustainability

Employees

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

health consultation center•L abor–management council•H ealth and safety committee•S ymposiums involving management and employees•P R brochures• I ntranet•E mployee award system•E mployee satisfaction survey•E mployee stress checks

Nichirei Group
Business Strategy

Strong, favorable, andstable long-term relationships
with business partners
throughout the supply chainF ood Bank

• I R website•S hareholder Report

Business
Partners

Main Activities to Reduce Food Loss

Business Portfolio
Medium-term Business Plan

Shareholders
and Investors

Deeper understanding of
the Company and higher
corporate value: to beachieved through timely
and appropriate disclosure

We will continue to contribute to resolving social issues through our business operations,create new value, and support the realization of a sustainable society in accordance with

Value Creation Story

Stakeholder

company that deals with food, however, we also want to add “social value” to food residue by upcycling it as part of•P articipation in local events• Volunteer activities•D ietary education activities (ethical consumption)

As a first step, we have collaborated with Fermenstation Co., Ltd., a company that uses proprietary fermentation
technology to upcycle non-standard products and by-products generated during the food and beverage manufacturing•F ood factory and distribution warehouse tours

processes, as well as agricultural non-standard products. We provide antibacterial wet wipes made by transforming•S ponsorship of sporting events

non-standard rice from our long-selling product Yaki-Onigiri (grilled rice balls) 10-pack.

•T CFD Consortium

Creation of Yaki-Onigiri Antibacterial Wet Wipes• Japan Frozen Food Association•H uman rights• Japan Association of Refrigerated Warehouses•C limate change• Japan Fisheries Association•F ood loss

• World Wide Fund for Nature•S ustainable procurement•R oundtable on Sustainable Palm Oilof food

our efforts to create a more abundant society.

Ethanol•T he UN Global Compact

Non-standard
grilled rice balls

UpcycleFermentationand distillation
Rice fermentation
lees

86

Antibacterial wet wipes•C aux Round Table Japan•T he Consumer Goods Forum

Yaki-Onigiri
antibacterial wet wipes

Non-standard rice from
Yaki-Onigiri(grilled rice balls) 10-pack

Data

Trade
Organizations,
NGOs and
NPOs

Collaboration with othercompanies: to be achieved
through participation inassociations and otherentities relating to tradeorganizations; resolution ofsocial issues throughcollaboration andcooperation with NGOs
and NPOs in Japan andabroad.

with local communities•P reservation of local
environments•E ducational activities inlocal communities•S ocial contribution activities

Corporate Governance

Local
Communities

Stable, enduring business
operations as a trusted andrespected company: to beachieved by building
favorable relations withlocal communities.

•H armonious coexistence

Chicken feed

Nichirei Group Integrated Report 2022

87

A Dialogue between Outside Directors
members are truly diverse, and all remarks are to
the point. Moreover, opinions expressed at theBoard of Directors meetings are immediatelyreflected in improvements, which is commendable
and vividly shows Nichirei’s trustworthiness.

What aspect of the discussions at the Board of Directors left a particularly strong impression?

Outside Director since 2021

The Nichirei Group’s Corporate Culture and Board of Directors
What is your impression of the Nichirei Group’s corporate culture and the Board of Directors?

88

Rather than engaging in a particularly wide range ofbusinesses, it focuses on its core competencies andfunctions dependably.
Shoji: I also appreciate that the Company has

How do you view the role of an outside director?
Shoji: I am aware that the role required of outside
directors is to prevent corporate misconduct, increase
competitiveness and profitability, and contribute toimprovement in corporate value over the long term.
Personally, I emphasize compliance, propriety andefficiency. When it comes to compliance, simply
observing the law is not enough in this day and age.
An ethical perspective is required. When we weredrawing up the medium-term business plan, I kept inmind my role in considering the environment andsociety as I gave my opinions.
Nabeshima: I believe my role as an outside
director is to keep track of whether the Nichirei
Group is conducting business in line with its Mission
and Vision. In addition, as is generally expected ofoutside directors, I try to check whether thebusiness portfolio will lead to an increase incorporate value, whether it is being managed
appropriately, and whether it is consistent from anexternal perspective. I also pay attention to whether

Nichirei Group Integrated Report 2022

Data

Nabeshima: One year has passed since I was
appointed an outside director, and I have theimpression that Nichirei is a very trustworthy
company with high-quality products and services.

The Role Required of an Outside Director and Personal Points of Focus

Corporate Governance

The Nichirei Group is working to strengthen its corporate governance.
Efforts to formulate Medium-term Business Plan Compass Rose 2024 began in FY2022. We asked two of ouroutside directors their candid impressions of our governance system and their expectations for the Nichirei
Group in the future, based on the progress of those discussions.

Sustainability

The Open, Constructive Discussions in Drawing Up
the New Medium-term Business Plan Drove Home
Once Again the Transparency of Nichirei’s Governanceand the Effectiveness of Its Board of Directors.

Business Strategy

Outside Director since 2018

Business Portfolio
Medium-term Business Plan

Mana Nabeshima

impressed by our discussions on establishing the
Sustainability Policy. I formerly had the impressionthat corporate sustainability policies were aimed
solely at reducing environmental impact, but hearing
the opinions of people with a wide range ofknowledge made clear the approach of helping toresolve social issues. After many discussions, wereached a consensus.
Shoji: The Sustainability Policy was discussed by
the Management Committee before the Board of
Directors in order to incorporate diverse,
multifaceted perspectives.
At Nichirei, outside officers can participate as
observers at meetings of the Management
Committee as well as the Board of Directors. The
agendas of both are divided according to theimportance and scale of the matters covered, andcan be viewed before the meetings on the
Company’s intranet, along with supporting
materials. Participating in Management Committee
meetings and reviewing materials in advance gives
us an understanding of the background for efficient
discussions at the Board of Directors.

Value Creation Story

Kuniko Shoji

Shoji: I was very impressed by our lively discussions
when formulating the medium-term business plan
Compass Rose 2024. Aside from the Board of
Directors, the Group Strategy Committee also has
outside directors as members, and we held discussions
there as well. In 2019, Nichirei formulated its long-term
management goals toward 2030. Although thenumerical targets of Compass Rose 2024 are ofcourse important, the plan was drawn up with thisVision for 2030 in mind. We were able to havethorough discussions premised on how to increase
corporate value based on Nichirei’s purpose in society.
It took about half a year to devise the “compass rose”
concept that gives the plan its name, as well as theessential strategies and themes for Nichirei from thetwin perspectives of economic and social value.
With this plan in particular, I feel that we made great
progress over the past year by emphasizing an
ethical perspective.
Nabeshima: It was my first time to participate indiscussions on a medium-term business plan, so I
have no basis for comparison. However, as foragenda items at Board of Directors meetings, I wasManagement Strategy

steadily built up its businesses and technologies. On
the other hand, I sense that steadiness makes itslightly difficult for the Company to be adventurous.
Nabeshima: All attendees, including Audit &Supervisory Board members, have their say at
Board meetings. The backgrounds of Board

89

A Dialogue between Outside Directors

countermeasures, overseas assignments, andhandling private equity. I realize I am expected touse that perspective in my role, so I try to beparticularly proactive in giving my opinion on
overseas acquisitions and climate change.

 hat are your thoughts on the operation of the Nominating Advisory Committee andW
Remuneration Advisory Committee?

What are the challenges in implementing Compass Rose 2024?
drawing up the plan and established a Sustainability
Committee and a dedicated department to achievethem, so aside from my expectations for the future, I
feel we have gotten off to a tangible start. In
switching to renewable energy, the division of roles
between the holding company and operating

Sustainability

Nabeshima: I think very highly of the approachtaken in Compass Rose 2024 of promoting bothsocial and economic value through sustainability
management. In addition, since taking on social
issues generates innovation, I think it is moving in agood direction for growth. We set definite targets inimportant to do so without hesitation when the needarises.
Nabeshima: Nichirei’s long-term management goals
toward 2030, which were established prior toCompass Rose 2024, include an overseas sales ratioof 30%. Investments by the Group’s operatingcompanies, especially overseas corporate acquisitions,
often appear on the Board of Directors’ agenda.
This shows these companies’ stance of aggressive
expansion, but at the same time a more strategic
approach is necessary. I think it is important to also
make top-down decisions on which countries andcontinents to target for expansion. For its frozen
foods, temperature-controlled logistics and otherbusinesses, Nichirei can seek corporate acquisitions
and other projects after identifying which regions havethe highest growth rates.
Shoji: I agree. Going forward, I think it will benecessary to thoroughly discuss what specific steps
Nichirei will take to expand its overseas business.

Business Strategy

Expectations for the Nichirei Group 

companies has become clearer, and the form that
their cooperation will take has become apparent. I
think a challenge in implementing the plan will beidentifying issues. Nichirei needs not only people
who resolve issues, but also people who point out
problems. Social and corporate requirements forhuman resources are changing, so Nichirei must
diversify its human resources by placing the right
person in the right position, reskilling, or bringing inpeople from outside in cases where the Company
immediately needs a higher level of skills in a highly
specialized field.
Shoji: Compass Rose 2024 was developed throughexhaustive discussions, but as the COVID-19
pandemic has shown, situations can easily change in
unpredictable ways in terms of both timing andcontent. It is important to constantly think about how
to stay aligned with society as it changes going
forward while conducting business. The plan may
need to be revised in the future, but it will be

Business Portfolio
Medium-term Business Plan

one of the items listed. I think a strategic approachis also necessary at the Board of Directors level.
Shoji: In the Remuneration Advisory Committee,
our review of the policy for deciding officer
remuneration started from the design of the systemitself, and we changed the KPIs for evaluation for
performance-linked bonuses to coincide with thestart of the new medium-term business plan. Withmajor changes including the addition of new ESG
evaluation items, I feel that the system has become
quite progressive for a Japanese company.

Nichirei’s Sustainability
Policy was the product of
lively discussions.

Value Creation Story

Shoji: The Nominating Advisory Committee createda skill matrix last year, starting by selecting the items
to be included. The matrix clearly shows what kindof human resources we will need in the future, but
the skill items themselves are only as of thismoment, so we should continue to review them asnecessary. We also agree on the importance of a
succession plan, and intend to discuss that further
at committee meetings.
Nabeshima: Naturally, skill matrixes differ from one
company to another. “Innovation/marketing” wasManagement Strategy

management decisions are made based on
appropriate information, using my input fromoutside Nichirei’s industry to compare common
practices in Japan and overseas. My background isin finance, with experience including climate change

What do you expect from the Nichirei Group in the future?

Nichirei Group Integrated Report 2022

Data

90

Shoji: When all is said and done, I would like
Nichirei to be a company that is respected bysociety. I would also like it to be a company where
employees are happy in their work. No company
can embody every one of its employees’ desires,but they should be able to express themselves
freely. Such a corporate culture will lead to employee
happiness and fulfillment that goes beyond mere
work-life balance. I would like the Nichirei Group to
aim to be a place where its employees can achieve
what they themselves most value.

Corporate GovernanceNichirei should aim to be acompany respected by society,where its employees are
happy in their work.

Nabeshima: I want the Nichirei Group to be a place
where employees can put their skills and ideas to work.
I want them to take on greater challenges to meetthe demands of society and consumers. Areas related
to food are very broad, so I think many employees
can find possibilities for expansion outside their existing
businesses—it could take the form of a sort of “sidebusiness” within the Company. I would like employees
who are so inclined to take on such challenges. I also
think there is still hidden potential in marketing ande-commerce, so I would like Nichirei to improve its
brand management.

91Corporate Governancehttps://www.nichirei.co.jp/english/corpo/governance

Basic Policy and Structure

Board of Directors

Group Sustainability Committee*

Please refer to the next page for details.

wide range of fields that includes processed foods, marine products, meat and poultry products, logistics andAudit & Supervisory Board

biosciences. In pursuit of sustainable growth and the enhancement of corporate value over the medium to long term,

Please refer to the next page for details.

the Company’s Board of Directors formulates Group strategies and supervises the business execution ofPlease refer to the next page for details.

The holding company adheres to the principles of the Corporate Governance Code and views the achievement offair and transparent management as an important management issue. Accordingly, under the supervision of the Board

Remuneration Advisory Committee
Please refer to the next page for details.

decision-making and ensuring thorough compliance.
design specified within the Companies Act of Japan.

Corporate Governance Structure (As of June 24, 2022)

General Meeting of Shareholders
Appointment/Dismissal

Report

6 inside directors

Group

Audit

4 outside directors

Audit & Supervisory Board 5 members

2 inside Audit& Supervisory
Board members

3 outside Audit& Supervisory
Board members

Audit
Audit
Cooperation• Group Human Resources Committee• Group Quality Assurance Committee• Social Action Program Committee

Representative Director, President
Audit

Management Committee(Executive Officers)• Examination Committee• I ntellectual Property
Management Committee

Corporate Internal
Audit Departments

Cooperation

Consulting lawyer

The committee ensures the fairness of rewards and punishments
for directors and executive officers of the holding company
and four core operating companies.*

Group Strategy Committee
Number of meetings
held in FY2022: 2

Chairperson

Kenya Okushi
Representative Director, President

The committee works to maximize the Nichirei Group’s
corporate value through deliberation and decision-making on
strategies and quantitative targets for the medium to long termor the next fiscal year for the holding company and four core
operating companies.

Number of meetings
held in FY2022: 1

Audit

Audit

Chairperson

Group Quality Assurance Committee
Yutaka Karino
Executive Officer

Chairperson

Management Committee
Junji Kawasaki
Director, Executive Officer

The committee works to achieve the product and service
quality expected by customers and society.

Social Action Program Committee
Number of meetings
held in FY2022: 1

Chairperson

Yutaka Karino

Number of meetings
held in FY2022: 23

Kenya Okushi
Representative Director, President

The conference works to maximize the Nichirei Group’s
corporate value by clarifying and making decisions related to
the next fiscal year’s management policy and budget for theholding company and four core operating companies, andthrough the promotion of Group-wide efforts to achieve
management targets.

Group Monitoring Committee
Chairperson

Kenya Okushi
Representative Director, President

The committee works to maximize the Nichirei Group’s corporate
value by discussing matters other than those to be resolved by
the Board of Directors as well as matters to be deliberated on
before resolution by the Board.

Number of meetings
held in FY2022: 3

Chairperson

Kenya Okushi
Representative Director, President

The committee works to maximize the Nichirei Group’s
corporate value by monitoring the status of business execution,budgets, and the progress of the “check and act” part of the
PDCA cycle for each Group company. In this way, it ensures
the holding company and four core operating companies fulfill
their responsibilities regarding matters to be reported.

Data

Under a basic policy of creating an employee-oriented
workplace and promoting diversity and health management,
the committee works to create new value by improving work
satisfaction through the monitoring of human resource policies
and health promotion initiatives at Group companies, sharing
information about effective measures, and promoting crossdepartmental development.

Number of meetings
held in FY2022: 2

Chairperson

Corporate GovernanceGroup Human Resources Committee

92

Chairperson

Group Commitment Conference

Holding Company Divisions(Business Execution) Operating Companies

Number of meetings
held in FY2022: 2

Kenya Okushi
Representative Director, President

Sustainability(Business Execution)

Chairperson

Group Officer Examination Committee

SupervisionGroup

Number of meetings
held in FY2022: 1

Number of meetings
held in FY2022: 1

Accounting Auditor• Group Strategy Committee• Group Commitment Conference• Group Monitoring Committee

Group Internal Control Committee

Business Strategy

Group

Kenya Okushi
Representative Director, President

Cooperation(2 female directors)• Group Sustainability Committee• Group Risk Management Committee• Group Internal Control Committee• Group Officer Examination
Committee

Chairperson

The committee supports the business operations of Group
companies and improves efficiency by establishing, operating,monitoring and improving internal control systems at eachGroup company.

Holding Company(Advisory Bodies)

Board of Directors 10 directors

Number of meetings
held in FY2022: 2

Business Portfolio
Medium-term Business Plan

Appointment/Dismissal

Appointment/Dismissal

Group Risk Management Committee

The committee uses the most appropriate and rational methods
to comprehensively manage uncertainties that could damage
the Nichirei Group’s corporate value.

In addition, we have established ourselves as a company with an Audit & Supervisory Board system, an institutional

Remuneration Advisory Committee

The committee deliberates on efforts to realize a sustainable
society and works to maximize the Nichirei Group’s corporate
value by balancing social and economic value.

Value Creation Storyof Directors, we will continue to strengthen governance by promoting appropriate resource allocation, speeding up

Appointment

Kenya Okushi
Representative Director, President

Nominating Advisory Committee

operating companies.

Nominating Advisory Committee

Chairperson

Management Strategy

On the basis of its holding company structure, the Group engages in business through its Group companies across a*N ewly establishedin FY2022

Executive Officer

The committee promotes social contribution activities that are
unique to the Nichirei Group, such as education on food andlogistics and contribution to local communities and environmental
protection as a good corporate citizen, by leveraging thebusiness characteristics of Group companies.

*F our core operating companies: Nichirei Foods Inc., Nichirei Logistics Group Inc.,
Nichirei Fresh Inc. and Nichirei Biosciences Inc.

Nichirei Group Integrated Report 2022

93

Corporate Governance

Board of Directors Composition
Directors

Audit & Supervisory Board Members
New Appointment

New Appointment

Designation as Independent Officer

Designation as Independent Officer

Designation as Independent Officer

Designation as Independent Officer

Kenji Suzuki2

Kuniko Shoji

Mana Nabeshima

Itsuo Hama2

Kenji Hamashima2

19/19

15/15 1

New Appointment

Designation as Independent Officer

Designation as Independent Officer

Designation as Independent Officer

Tetsuro Katabuchi2

Yuhiko Saito

Kiyoshi Asahina

Muneaki Kiyota

15/15 1

19/19

19/19

19/19

11/11 1

16/16

16/16

16/16

Name

Kenya Okushi

Junji Kawasaki

Kazuhiko Umezawa Masahiko Takenaga

Board of Directors
Meeting Attendance

19/19

19/19

Nominating Advisory Committee
Meeting Attendance

6/6

6/6

4/4 1

Remuneration Advisory Committee
Meeting Attendance

6/6

5/6

4/4 1

19/19

Wataru Tanabe
15/15 1

18/19

Audit & Supervisory Board
Meeting Attendance

Tatsushi Kato

Corporate Management(Logistics)(Processed foods)

Business Portfolio
Medium-term Business Plan

Experience and Skills(Marine, meat and poultry products)

ESG/Sustainability
GlobalInnovation/Marketing

Business Strategy

Financial Accounting/
Finance
Legal Affairs/
Compliance
1. M
 r. Tanabe, Ms. Nabeshima, and Mr. Kato were newly appointed at the 103rd General Meeting of Shareholders held on June 22, 2021. Their attendance reflects meetings of the Board of Directors,
Nominating Advisory Committee, Remuneration Advisory Committee or Audit & Supervisory Board held after that date.
2. A
 s Mr. Suzuki, Mr. Hama, Mr. Hamashima and Mr. Katabuchi were newly appointed a the 104th General Meeting of Shareholders held on June 24, 2022, their attendance for FY2022 is not presented.

Overview of Board of Directors

Overview of Audit & Supervisory Board
Composition

5 Audit & Supervisory Board members (3 outside
Audit & Supervisory Board members)

Number of
Meetings in
FY202219

Number of
Meetings in
FY202216

Descriptionof Operations

As a body that is independent from the Board of
Directors, the Audit & Supervisory Board
communicates with directors, the corporate
internal audit departments and other departmentsof the holding company in accordance with theannual audit policy and audit plan to gather
information and prepare the audit environment.

Status of the Establishment of Voluntary Committees, Their Composition,and the Attributes of Their Chairpersons
Role

Nominating Advisory
Committee

Discusses the suitability of candidates for senior managementand directors/Audit & Supervisory Board members, as well as
successor plans, and reports its findings to the Board of Directors.

Kuniko Shoji
Outside Director

6

Remuneration Advisory
Committee

Discusses the remuneration system, remuneration levels, theappropriateness of remuneration amounts, and otherrelated matters, and reports to the Board of Directors.

Kenji Hamashima
Outside Director

6

Skills Required for Decision-making in Management (Contributing to Medium- to Long-term Corporate Value)
Corporate
Management

Demonstrated leadership in corporate management as a top executive; management experience at a listed company
with diverse stakeholders

ESG/Sustainability

Experience and expertise in promoting ESG initiatives; knowledge of and experience in making value judgments
about ESG and social significance and sustainability for companies; knowledge and experience in promoting
corporate sustainability; experience and expertise in human resource development related to continuously
developing diverse human resources

GlobalCross-cultural communication skills and a high level of ability to get things done in overseas business as well as
knowledge and expertise about markets, economies and business in specific countries and regions gained throughexperience including the management of local subsidiaries

Innovation/Marketing

Knowledge and expertise that contribute to promoting innovation; experience and expertise in sales and marketing

Skills Required for Supervision in Management (Contributing to Ensuring Continuity of Management)
Corporate
Management

Demonstrated leadership in corporate management as a top executive; management experience at a listed company
with diverse stakeholders

Financial Accounting/
Finance

Expertise in financial accounting related to financial reporting and auditing; experience and expertise in corporate
financing and management

Legal Affairs/
ComplianceExperience and expertise in legal compliance, regulatory compliance, internal controls, and promotion of norms and corporate
behavior required by society; experience in the legal profession; expertise and network related to quality assurance

Nichirei Group Integrated Report 2022

Data

94

Chairperson

Number of Meetings
in FY2022

Committee

The Nichirei Group believes that in order for the Board of Directors to effectively fulfill its roles and responsibilities, it must
be composed of members with sufficient knowledge and experience, both internal and external, in fields related tobusiness management. We have designated the following knowledge and experience as important from a corporate
management perspective. In addition to having appropriate experience in all of the following areas, the Company selects
director candidates based on the areas in which the Company has particular expectations.

Corporate Governance

10 directors (4 outside directors)

Skill Matrix

Sustainability

Composition

Promotes proper allocation of Group resources,
swift decision-making and thorough compliancethrough supervision of the Group’s strategy
planning and business execution of operatingcompanies. After discussion by the Group Strategy
Descriptionof Operations Committee, which meets twice a year, the Board of
Directors formulates and approves the Group’s
strategies and conducts quarterly checks of thestatus of implementation at each Group business. It
also engages in highly effective supervision of
executive directors and executive officers.

Value Creation Story

New Appointment

Management Strategy

Classification

95

Corporate GovernanceEfforts to Ensure Meaningful Discussions3. Size andCompositionof the Boardof Directors

Board of Directors Evaluations

In addition to identifying the knowledge required due to achanging external environment, we will continue to consider
ways in which we can provide opportunities for theacquisition and study of such knowledge. For example, wehave organized study sessions by outside experts onsustainability management, a material matter, and willconduct five sessions in 2022.

As necessary, and with the assistance of outside experts, the Company conducts analyses and evaluations of the Boardof Directors’ activities to ensure its decision-making is effective. Summaries of the results are subsequently disclosed.
Subjects: Directors and Audit & Supervisory Board members (15 individuals in total)
Period: January–February 2022

Evaluation
Results for
FY2022

Although some of the methods of management by Nichirei’s Board of Directors changed due to COVID-19
as in the previous fiscal year, discussions were free and lively and the atmosphere conducive to speaking
up. Moreover, there were many positive opinions to the effect that the Nichirei Board of Directors hasachieved a considerable degree of overall effectiveness, reflecting efforts such as further improving thecontent and timing of materials in order to enhance discussions.

Method: Self-assessment involving questionnaires conducted by third-party experts

Activities Aimed at Strengthening the Nichirei Group’s Corporate Governance Structure
FY2002

IssuesIdentified

Although we do not consider a change in the institutional
design to be necessary at this time, the Nominating
Advisory Committee confirmed at its meeting held in May
2022 that it will continue to address the issue of theeffectiveness of the current institutional design of acompany with an Audit & Supervisory Board system. The
committee considers it a medium- to long-term issue andwill look at it in light of management strategies, changes inthe business environment going forward and Corporate
Governance Code requirements. The Nominating Advisory
Committee will continue to hold concrete and lively
discussions, including comparing the company with an
Audit & Supervisory Board system with other institutional
designs, and will report and deliberate on these issues at
Board of Directors meetings as appropriate.

While many respondents were of the opinion thatagenda items for meetings of the Board of Directors
were appropriate, there was also concern thatmeetings are becoming longer due to the large
number of agenda items and the time required todeliberate on each one. Some were also of theopinion that the agenda items could be reevaluated(further narrowed down). In addition, several
respondents mentioned that one of the roles of
the Board of Directors is to set the direction of
medium- to long-term management strategies.

In order to prevent lengthy meetings and to ensuresufficient time for the deliberation of important agenda
items, such as setting the general direction of corporate
strategy, which is listed as one of the roles and responsibilitiesof the Board of Directors in the Corporate Governance
Code, we decided to create an annual agenda scheduleand reorganize the current agenda items. We also decided
to review the agenda items and consider issues related to
institutional design mentioned above.

OutsideDirectors

FemaleOutsideDirectors

FY2017FY2019FY2020

FY2021

FY2022

FY2023

Implementationof executive
officer system

Shift to three
independent
outsidedirectors

Fouroutsidedirectors

One
First female
outsidedirector
appointed

Two

Two
Three

Outside Audit& Supervisory
Board Members

Three

Establishmentof Voluntary
Committees
Board ofDirectors
effectivenessevaluations
startedEvaluation of
Effectivenessof Board of
Directors
Officer
Remuneration

OthersRetirement
bonuses for
directors
discontinued

Revision of
officerremuneration
systemBasic Policy on
Corporate
Governanceestablished

Discontinuationof rulesregarding thehigh-volume
purchase of
Nichirei sharecertificates, etc.
(Anti-takeovermeasures)

Formulation ofGroup
Disclosure
PolicyRevision of
officerremuneration
system

Revision of Basic Policy on Corporate
Governance (Revisions to policy on
capital management and otherprotocols and adjustments tomaximum terms of office for outside
Audit & Supervisory Board members
to ensure their independence)

Data

96

The current institutional design of a company
with Audit & Supervisory Board system wasdeemed appropriate, and many respondents
were of the opinion that there was no need totransition to a different institutional design.
However, several respondents said that it isnecessary to clarify the pros and cons of thecurrent design and examine it again, and to
consider transitioning to another institutional
design, taking into account changes in thebusiness environment going forward.

Separation ofManagement
Supervision
and Execution

FY2016

Corporate Governance

2. Agenda Items
for the Boardof Directors

Future Approach

FY2013

Sustainability

1. Institutional
DesignEvaluation and Opinion

FY2007

Shift to holding
companysystemGroup
Structure

Issues to Be Addressed

FY2006

Business Strategy

Evaluation
Procedure

4. T raining for
Officers

Business Portfolio
Medium-term Business Plan

While many respondents gave a positive
assessment of training opportunities (provisionof basic training, etc.) designed to help them
fulfill their roles on the Board of Directors, somecommented that training and knowledge
acquisition opportunities were not always
adequate during FY2022. Several respondents
expressed the desire for more opportunities forknowledge acquisition and learning in order tokeep pace with the rapidly changing external
environment.

Evaluations of EffectivenessValue Creation Story

Through the development of a skill matrix, the Company
identifies the skills and other attributes that the Board of
Directors should possess in light of management strategies
and discloses them in the Corporate Governance Report. In
addition, for “securing and developing a diverse array ofhuman resources,” which is one of the material mattersidentified as necessary for achieving our long-term
management goals (vision for 2030), we have set achieving aratio of female line managers at Nichirei Corporation of 30%
as a KPI and are working toward that goal. Increasing thenumber of female managers will link with efforts to appoint
female inside directors and ensure diversity of the board.
We will continue to review the size and composition of theBoard of Directors and revise the skill matrix as appropriate
in response to changes in management strategies and thebusiness environment.

Management Strategy

Nichirei distributes materials for use at Board of Directors meetings to each director and Audit & Supervisory Board
member at least three days in advance of meetings in order to ensure meaningful discussions.
When internal communication and coordination are required to accurately provide Company information in response to
instructions from independent outside directors or independent outside Audit & Supervisory Board members, the secretaryin charge acts as the contact point to ensure necessary coordination with relevant departments.
Newly appointed directors and Audit & Supervisory Board members are given training as necessary on the Companies
Act of Japan and other related laws, management strategy, financial analysis and other such matters. Additional training
on legislative revisions and management issues is provided as necessary after new members assume office. Moreover,
explanations of the Group’s businesses and tours of the major facilities are provided to outside officers as necessary.

The size and composition of the Board of
Directors was evaluated positively as a whole.
However, many respondents expressed theneed for more female directors (especiallyfemale inside directors). In addition, some
expressed a desire for an academic expert tojoin the board as an outside director, and several
others wanted a person with expertise in DX.

Disclosure ofskill matrix

Nichirei Group Integrated Report 2022

97

Corporate Governance

Officer Remuneration System
1 Policies and Methods for Determining Officer Remuneration and Changes

Director Allowance

Policies and Methods for Determining Officer Remuneration
The policy for determining individual director remuneration is for the Remuneration Advisory Committee to discuss
the appropriateness of each director’s remuneration each fiscal year and for the decision to be made by the Boardof Directors. In these discussions, the Remuneration Advisory Committee reflects changes in the management
environment and the opinions of shareholders and investors, and obtains information necessary for discussion fromthird-party agencies with extensive global knowledge and experience.

We have decided to change the performance-linked bonus key performance indicator (KPI) in conjunction with the startof Medium-Term Business Plan Compass Rose 2024 in FY2023. Specifically, ROIC and profit were selected to replace
REP1 in order to optimize the business portfolio and improve capital efficiency and shareholder returns. In addition, we
adopted a new way of utilizing ESG third-party assessments2 to strengthen our response to sustainability-related
issues. There are no other significant changes in the policy for determining officer remuneration.

Stock Compensation(Restricted Shares)

Remuneration for Outside Directors
Only basic (fixed) remuneration is paid to outside directors. The level of remuneration is set at an appropriate
amount, taking into consideration the time and effort spent by each outside director fulfilling expected roles andfunctions, as well as objective compensation market survey data (compensation levels of companies similar inbusiness type and size to that of the Company).

Before Revision (Up to FY2022)
Consolidated net sales
Consolidated EBITDA
Consolidated REP—

After Revision (From FY2023)
Consolidated net sales
Consolidated EBITDA
Consolidated profit
Consolidated ROICESG third-party assessment

Reasons for Selection of KPIs
Expansion of size of Company
Improvement of ability to generate cash and profitability of core businesses
Improvement of shareholder returns
Optimization of business portfolio and improvement of capital efficiency
Strengthen response sustainability-related issues

ESG Third-party Assessments
FTSE4Good Index Series
MSCI ESG Ratings
CDP Climate Change

Reason for Selection
 ppropriate management of ESG-related risks andA
opportunitiesS trengthening of response to climate change

Amount of individual bonus = Base amount by position × Performance evaluation coefficient (0–200%)
Performance evaluation coefficient = (a) Company-wide performance evaluation coefficient + (b) Business performance evaluation coefficient + (c) Individual performance evaluation coefficient

Evaluation
WeightRepresentative
Director,
President
Director (InCharge ofBusiness)
Director (InCharge ofFunction)(a) Company-wide Performance Evaluation

Net sales

EBITDA

ProfitROIC(b) Business Performance Evaluation

ESG

Net sales

100%
10%

40%

10%

20%

5%

30%

10%

20%

20%

10%

10%

15%

15%

—

30%
5%

70%
5%

ROIC

—

60%
10%

EBITDA

15%—(c) Individual
Performance Evaluation

10%
10%
30%

Business Strategy

1. Retained Economic Profit (REP) is a unique business management indicator used by the Group and is calculated by deducting capital costs (capital used x WACC) from NOPAT.
2. F or ESG third-party assessments, we utilize the assessments of multiple ESG assessment organizations to ensure objectivity and fairness. Specifically, we will utilize the following three types ofassessment.

The amount of money to be paid to each individual as a performance-linked bonus varies within a range of 0% to200% of the base amount for each position, depending on the achievement of Company-wide, business andindividual performance targets.

Business Portfolio
Medium-term Business Plan

Performance-Linked Bonuses
Company-wide KPIs for Performance-linked Bonuses

Value Creation Story

Changes in Policies for Determining Officer Remuneration

Performance-linked
Bonuses

Purpose/DescriptionB asic remuneration performance of dutiesS et according to the significance of the role of each directorR emuneration for the responsibilities of making and supervising the execution of management decisionsS et at a uniform amount for all directorsR emuneration for motivating directors to achieve annual financial and strategic goalsT he amount paid when achieving goals (“standard amount”) is set as a percentage of role-based compensationP aid within a range of 0-200% of the standard amount according to degree of achievementR emuneration for encouraging management from a long-term/Group-wide perspective and the perspective ofshareholders and investors
Value of shares issued each fiscal year (“standard amount”) is set as a percentage of role-based compensationR estricted shares are issued annually in an amount equal to the standard amount, and restrictions are lifted
upon a director’s retirement

Management Strategy

Remuneration CompositionRole-based
Remuneration

2 Policies for Determining Officer Remuneration

Basic Policies

Procedures for Determining Remuneration
In order to ensure appropriateness and objectivity in matters related to remuneration for individual directors, theRemuneration Advisory Committee, comprising mainly independent outside directors, discusses matters first andreports its findings to the Board of Directors, which then makes its decisions.
The amount of officer remuneration for FY2022 is presented in the 104th Annual Securities Report.

OutsideDirectorsIn light of their role of supervising the Company’s management from an independent and objective standpoint,
outside directors are paid only basic (fixed) remuneration.

Approach to Cross-Shareholdings

Remuneration for Directors Other Than Outside Directors

Guideline for the Ratio of Remuneration for Directors Excluding Outside Directors
Fixed remuneration
Director
allowance

98

Role-based remuneration 60%

Variable remuneration
Performance-Linked Bonuses 20%

Stock compensation 20%

Cross-shareholdings are only utilized when it is determined that they will contribute to improvement of the Company’s
corporate value: for example, by maintaining and strengthening trade and cooperative relationships. In addition, every
year the Board of Directors reviews the economic rationale of individual shareholdings of this type from a medium- tolong-term perspective. If the importance of a particular shareholding is determined to have diminished, the shares are
sold. In conducting such reviews, the Board of Directors carefully examines and makes a comprehensive judgment onwhether the benefits, such as profits from transactions, and dividends or risks are commensurate with the cost of capital,
followed by consideration of a qualitative evaluation of the strategic importance of the shareholding.
In regard to the exercise of voting rights for cross-shareholdings, the Company will review all the details of the relevant
proposals in the investee company’s shareholders meeting agenda, and if any of the following apply to the investee
company, the Company will make a decision after carefully examination on a case-by-case basis:(1) The investee has engaged in acts that will lead to a loss of shareholder value(2) The investee’s performance or stock price has deteriorated significantly(3) There are other serious doubts with respect to agreeing to the proposal

Nichirei Group Integrated Report 2022

Data

Basic (fixed) remuneration consists of role-based remuneration and a director allowance, and variable
remuneration consists of performance-linked bonuses and stock compensation. Remuneration levels are set atappropriate amounts with reference to objective compensation market survey data (compensation levels ofcompanies competing with the Group in terms of business and human resources, including those in the food andlogistics industries), taking into consideration the responsibilities and number of directors, changes in the businessenvironment going forward, and the opinions of third-party organizations.

https://www.nichirei.co.jp/sites/default/files/inline-images/ir/pdf_file/yuhohh-pdf/yuho_22.pdf (Japanese only)

Corporate Governance

Remuneration Composition and Levels

Sustainability

Directors(Excluding
OutsideDirectors)R emuneration shall strongly encourage directors to perform their duties in accordance with the Group’s
Management Principles, Sustainability Policy, The Nichirei Pledge and management strategies.
In order to achieve long-term management goals, remuneration is set to strongly motivate directors to achieve
specific management goals with regard to the Group’s material matters and medium-term business plans.
In order for remuneration to serve as an incentive toward the Group’s sustainable growth, the ratio of remuneration
linked to short-term results, performance of duties, etc. (performance-linked bonuses) and remuneration linked tomedium- to long-term results and corporate value (stock compensation) will be set in an appropriate manner.
D irectors and executive officers shall be treated in a manner befitting their positions as officers of the Company inconsideration of the significance of the Group’s social role and responsibilities, trends at companies competing with
the Group in business and human resources, including those in the food and logistic industries, and changes in thebusiness environment.

99Internal Control/ComplianceApproach to Internal Control

https://www.nichirei.co.jp/english/corpo/governance/internal_control.html

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

Nichirei Group Code of Conduct (Table of Contents)

Internal Whistleblower Hotline and Consultation Service
In October 2003, we introduced an internal whistleblower hotline and consultation service (Nichirei Hotline) to respond toreports and consultations from employees regarding actions that violate laws and regulations, the Articles of Incorporation,internal rules, or actions that are ethically questionable. In FY2016, we updated our internal whistleblower hotline system
in response to the requirements of Japan’s Corporate Governance Code, which specifies that internal whistleblower
hotline systems are to be independent from company’s management, and introduced monitoring/checking functions
through Audit & Supervisory Board members and outside officers. In 2022, we updated the system again in line with theamended Whistleblower Protection Act that went into effect in June of that year and in compliance with the government
guidelines. The response system is being redesigned to strengthen whistleblower protection and confidentiality, and to
expand the scope of whistleblowers.
To ensure that all officers and employees are aware of the new hotline, the Company created promotional posters fordisplay at workplaces nationwide and distributed reminder cards to all employees. All reports and consultations received by
the Nichirei Hotline are investigated by the administration office to confirm the facts and, if necessary, corrective
measures are taken in accordance with the Group Whistleblowing Regulations. Whistleblowers
are assured anonymity and any adverse treatment is prohibited, including retaliation by theCompany, those who are the subject of complaints, or any other party. The whistleblower
may also receive feedback from the administration office if he or she so requests.
The status of response to whistleblowing and consultation is regularly reported to theBoard of Directors and monitored to ensure that it is being properly managed.

Data

Number of Internal Reports Received

Presentation materials related to the Code of Conduct

Corporate Governance

The Nichirei Group aims to continue to operate and develop as a company that is widely trusted and favorably received bysociety due to the high ethical standards of its officers and employees. In order to foster a sense of ethics in each andevery officer and employee, the Code of Conduct (in addition to the Management Principles and The Nichirei Pledge) is
included at the beginning of the employee handbook, so that officers and employees can refer to it anytime, anywhere asa basis for their actions.
In addition, we have created a monthly series of slideshow-style materials designed to help employees understand casestudies related to the code of conduct, and post them on the Group’s intranet.
The Nichirei Group is committed to continue providing compliance training, including offering e-learning sessions to
educate and train employees, based on its in-house educational rules.

The Nichirei Group has established the Bribery and Corruption Prevention Standards and the Bribery and Corruption
Prevention Manual. They clarify the basic matters that all officers and employees must follow to prevent bribery of public
officials and others. In addition to Japanese laws and regulations, the documents provide an overview of laws andregulations in major countries such as the United States, the United Kingdom, and China, and present specific mattersthat require caution in a Q&A format.
For overseas subsidiaries, the Nichirei Group Global Governance Basic Rules stipulate the prohibition of bribery, andwe are raising awareness of applicable laws and regulations of each country and the bribery and corruption standards
among employees.

Sustainability

Educating Employees about the Code of Conduct to Ensure Compliance

Initiatives to Prevent Bribery and Corruption

Business Strategy

1. C ompliance with Laws and Regulations Concerning
Respect for Human Rights and Labor
2. E
 nvironmental Protection
3. C ompliance with Laws and Regulations and Internal
Regulations
4. M
 anagement and Preservation of the Company’s Property
5. P rohibition on Personal Use of the Company’s Property
6. P rohibition on Insider Trading
7. E
 nsure the Reliability of Financial I nformation
8. M anagement and Use of Information
9. P rohibition of Personal Acts Conflicting with theCompany’s Interests
10. P rohibition on Unfair Benefits Given to/Received from
Public Officers or Business Partners
11. P rohibition on Involvement/Trade with Antisocial Forces
12. C ompliance with/Reporting of and Consultation on
Code of Conduct

Business Portfolio
Medium-term Business Plan

The Nichirei Group is implementing various initiatives to promotehighly ethical business activities in compliance with the laws andsocial norms of all the countries in which it operates. We haveestablished a code of ethics, which serves as a guideline for officers
and employees for following laws and regulations and the Articles
of Incorporation and for acting in accordance with corporate
ethics, and a code of conduct, which sets forth basic matters tobe observed by everyone working for the Nichirei Group to ensure
thorough compliance. The code of conduct also includes
information concerning prevention of corruption-related mattersthat have been deemed important from the perspective ofinternational compliance, including insider trading bans and theprohibition of engagement or trading with antisocial forces.
In addition to providing this information, the Group conducts
compliance training for officers and employees aimed at ensuringa more pervasive understanding of compliance management
and a more universal compliance management framework.

Value Creation Story

Compliance

In 2021, we established the Nichirei Group Global Governance
Basic Rules, which are based on existing policies and rules andhave been reorganized for overseas subsidiaries to make themeasier to understand. Laws and cultures differ in Japan andoverseas, and companies acquired through M&As have theirown corporate climates built up over time. These rules therefore
only incorporate the most important concepts for Nichirei, while
respecting the autonomy of each company. The rules areavailable in five languages (Japanese, English, Chinese,
Vietnamese and Portuguese), and are gradually being applied,disseminated and implemented. Through these efforts, we will
strengthen the governance of overseas subsidiaries in order toachieve our vision for 2030 of an overseas sales ratio of 30%.

Management Strategy

The Group recognizes that developing and operating an internal control system to facilitate operational effectiveness andefficiency, ensure the accuracy of financial reports, comply with laws and regulations pertinent to business, and tosafeguard its assets will translate into higher corporate value.
In terms of the development of systems necessary to ensure that the execution of the duties by the directors complies
with laws and regulations and the Articles of Incorporation, and other systems prescribed by ordinance of the Ministry ofJustice as systems necessary to ensure the propriety of operations of the Company and the operations of the group ofenterprises consisting of the Company and its subsidiaries pursuant to the Companies Act of Japan, the Company has
established the basic policy for its internal control system. The Company will endeavor to improve the policy by reviewing
it annually to adapt to changes in the business environment, etc.

Establishment of the Nichirei Group Global Governance Basic Rules

FY2018FY2019FY2020

FY2021

FY2022Five-year Total (FY2018–2022)

35

12

21

27

20

115
Nichirei Hotline card

100

Nichirei Group Integrated Report 2022

101

Risk Management
Approach to Risk Management

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

Representative Director, President

Risk Management

Management Committee

Group Risk Management
Committee

Group Strategy Committee

Group Internal Control
Committee

Group Monitoring Committee
Group Commitment ConferenceGroup Officer Examination
Committee

Group Sustainability CommitteeF luctuations in currencies including the U.S. dollar, Thai baht and euro that
impact procurement prices of commodities and raw materials, as well as
the impact of currency translation on the results of overseas subsidiariesU se of forward exchange contracts, etc.

S
 trategic
management

10. C hanges inlaws andregulations, etc.

C hanges in laws, regulations and soft laws in Japan and overseasM onitoring of trends in laws and regulations in eachcountry and region, and thorough compliance with suchlaws and regulationsS trategic
managementH andling of MSC/ASC-certified marine productsD ifficulty in ensuring stable procurement of raw materials and otherresources or damage to social credibility due to inadequate efforts
or those deemed insufficientImplementation of initiatives related to the procurementof sustainable palm oil and conducting of a sustainablecycle poultry businessS ocial demand for reduction of greenhouse gas emissions, andstrengthening of regulations such as the imposition of a carbon tax
and other policies (our fundamental technologies are for freezing
and refrigeration, and we consume energy, mainly electricity)

Switching from fluorocarbon to natural coolants, use ofrenewable energy sources through installation of solar
power generation equipment and the purchase of green
power certificatesImpact of rising temperatures and extreme weather associated with
global warming on supply chains, including raw material
procurement, production and logisticsO ngoing climate change impact assessment andinformation disclosure in accordance with TCFD
recommendations

13. L
 arge-scale
naturaldisastersE xtensive damage to roads, ports and railroads at or near theGroup’s sites, market contraction, supply chain disruptions, or
restrictions on business activities due to factors such as a massive
earthquake or localized rain stormsS eismic retrofitting work; deployment of emergency
generators; establishment of an employee safety
confirmation system, disaster prevention manuals andbusiness continuity plans (BCPs); and use of multiple
data centers

14. T echnologicalinnovationD ecline in competitiveness of the Group’s technologies and products
and services due to technological innovations, including rapid
progress in digital technologies and food tech

11. S ustainablefood
procurement

Group Human Resources
CommitteeF ormulate risk countermeasurepoliciesE stablish targets for the coming
fiscal yearD
 raw up an action planDE
 ducational and developmental
activities
Implement action plan

C
Social Contribution
Activities
Social Action Program
CommitteeC heck status of Group-wide
controls
Working evaluation of risk
countermeasuresU nderstand and evaluate risks
Internal and external auditsO perational testingA
Reviews for responsible
individualsM odify and improve risk
countermeasures

Ensure Compliance

15. H
 olding of
fixed assets

Impairment loss due to deterioration of conditions at logistics
centers caused by relocation of shipping companies and changes inroad transportation networks
Impairment loss due to aging and obsolescence of equipment at
production plants or poor salesG roupSustainability
CommitteeG roupSustainability
CommitteeG roup Risk
Management
CommitteeR eform of business processes and promotion of innovation
through the use of digital technologies and dataImplementation of an innovation management system
based on ISO 56002

S trategic
managementC larification of items for consideration when preparing
investment plans, and the rules for post-investment
verificationS trategic
management→ See page 99

Yearly report to
the Board of
Directors

Impairment and write-down of goodwill and investment securities
due to deviation from the business plan at the time of investment

16. C rossshareholdingsS ignificant changes in the market value of cross-shareholdings or in
the financial position of the issuing company

Business Strategy

Group Quality AssuranceCommittee

Human Resource
Management

PD evelopment of a Sustainable Procurement Policy, Supplier
Code of Conduct and Guidelines, and implementation of
ESG questionnaires for business partners

G rowing social demands for consideration of human rights and the workplaceenvironment in the supply chain, management of natural marine resources,
reduction of food loss, and resolution of the marine plastic problem, as
well as changes in and establishment of laws, regulations and soft laws

Business Continuity Plan Initiatives
Employee Safety
Group Countermeasures Headquarters in Response to COVID-19

Important Risks and Countermeasures of the Nichirei GroupManagement SystemP romotion of innovation and creation of new value to solve
social issues

2. S ituation in
UkraineI mpact on financial marketsR ising energy prices and impact on supply chainC lose monitoring and minimization of impact on
business activities

S trategic
management

3. I mpact of
COVID-19F urther global economic stagnation and supply chain disruptions
Interruption of business activities due to an outbreak within the GroupL abor shortages due to restrictions on cross-border movementof workers

Implementation of various infectious disease control measuresthat place the highest priority on employee health and safetyP romotion of automation that uses advanced technologiesC reation of new business opportunities in line with changes inpeople’s lifestyles and valuesS trategic
managementG roup Risk
Management
Committee

4. F
 ood quality
issuesF ood quality problems, such as not meeting sanitation andpesticide and animal drug residue standards, contamination withforeign materials, and specified livestock infectious diseasesO ccurrence of large-scale product recallsIntroduction of a food safety management system
Appropriate quality and production control of raw materials andproducts, traceability system, food defense, training and proper
allocation of personnelG roup Quality
Assurance
Committee

5. S ecuring anddeveloping
diverse humanresourcesS ecuring and developing the necessary human resourcesR esponding to labor shortages due to Japan’s declining birthrate
and aging population

Improvement of workplace environment and productivityP romotion of health managementI nvestment in human capitalG roup Human
Resources
Committee

6. I nformation
securityS ystem outages, leakage or falsification of important information
due to operational problems or cyberattacks in systems used forbusiness purposesE stablishment of firewalls and intrusion detection andauthentication systemsE stablishment of internal rules and regulations, e-learning andother training for employees, and an information management
structureG roup Risk
Management
Committee

7. P rice fluctuationsof commodities
and raw materials

S ignificant fluctuations in raw material prices (including meat,
poultry and marine products) due to market conditions and yieldsC ost reduction through productivity improvementsD evelopment of products with enhanced value and expansion of
distinctive productsP rocurement and sales balanced with supply and demandS trategic
managementS trategic
management

Confirming Safety in Emergency Situations
We have introduced a Group-wide safety confirmation system using a dedicated website. In the event of a disaster, such as an earthquakewith an intensity of five or higher, messages will be sent via email to employees to check whether they are safe, and relevant local information
will be provided promptly on the website. The system allows for the rapid collection and sharing of information.

BCP for Information Systems
The Group’s main core system is redundant for the purpose of business continuity, andincludes a disaster recovery (DR) system. Specific examples are as follows.

Core Logistics System BCP
Conceptual Diagram

Enhancing Core Logistics System BCP
As part of its risk management, Nichirei Logistics Group has been enhancing BCP support
for its core logistics system since February 2018. Assuming the possibility of damage tothe data center, where operations are heavily concentrated, the company created a DR
system that enables rapid resumption of business. In the event of a large-scale disaster,
the company can quickly resume operations through the use of two bases, each of which
can switch from the system at its main site to the DR site.
Approximately one hour is needed from the activation of the system until an online
restart is possible. The system is designed to ensure that customer businesses and food
distribution are not affected. Nichirei Logistic Group plans to implement advanced
initiatives to provide a food logistics lifeline that will contribute to the business continuity ofits business partners.

Main site
Western Japan Data Center

Disaster recovery site
Eastern Japan Data Center

Normal operations

Response to disasterin western Japan

Normaltimes

Disasterin western
Japan

Data

1. E
 conomic
conditions
and businessenvironment

Corporate GovernanceRisks
M arket in Japan: Long-term contraction of total demand due todeclining population/new demand due to changes in householdcomposition and lifestylesO verseas markets: Rise of different needs in each region
underpinned by factors including economic growthG rowing expectations and demands for the achievement of asustainable society

In January 2020, the Nichirei Group Countermeasures Headquarters, headed by the president, was established to respond to COVID-19. In
addition to collecting, analyzing and sharing information throughout the Group, we sent out messages and notifications 50 times from January
2020 to July 2022 regarding infection prevention measures from the perspective of business continuity. We are creating a crisis management
system that will help prevent infection while enabling our employees to carry out their work.

Sustainability

102

Risk Category

Countermeasures and Initiatives

Business Portfolio
Medium-term Business PlanClassify risks andmanage themrationally throughthe most
appropriate
methods andbest-suited
departments

9. Impact of
exchange rate
fluctuations

Risk Management Cycle

Outside officers are not included as committee members

Strategic ManagementS trategic
management

12. C limatechangeBoard of Directors

Outside officers are included as committee membersC ost reductions through the introduction of newtechnologies and improvement of operations

Value Creation Story

Risk Management StructureIncrease in electricity, diesel oil, heavy oil and other fuel procurement
costs due to soaring crude oil prices; increase in procurement costs ofcommodities and raw materials

Management Strategy

The Nichirei Group has established the Group Risk Management Committee, chaired by the representative director,
president, to manage the various risks associated with its business activities in the most appropriate and rational way froma comprehensive standpoint, and to maximize the Group’s corporate value. The committee identifies and evaluates
Group-wide risks, and Nichirei and its operating companies take countermeasures to these risks on their own accord
based on the established risk management cycle. Important items are reported to the Board of Directors of Nichirei
Corporation, the holding company, which considers countermeasures.

8. F
 luctuations
in crude oil
prices, etc.

Normal operations structure

Nichirei Group Integrated Report 2022

103

Directors, Audit & Supervisory Board
Members and Executive Officers(As of June 24, 2022)

Management Strategy
Value Creation Story
Business Portfolio
Medium-term Business Plan
Business Strategy
Sustainability

	Representative Director,
President

2. Junji Kawasaki

3. Kazuhiko Umezawa
Director, Executive Officer

7. Kuniko Shoji

10. Kenji Hamashima

Director, Executive Officer

Outside Director

Outside Director

5. Wataru Tanabe
Director, Executive Officer

6. Kenji Suzuki
Director, Executive Officer

8. Mana Nabeshima
Outside Director

9. Itsuo Hama		Outside Director

11. Tatsushi Kato	Audit & Supervisory
Board Member

12. Tetsuro Katabuchi	Audit & Supervisory
Board Member

13. Yuhiko Saito
	Outside Audit & Supervisory
Board Member

14. Kiyoshi Asahina
	Outside Audit & Supervisory
Board Member

15. Muneaki Kiyota	Outside Audit & Supervisory
Board Member

16. Yutaka Karino

16

6

Executive Officer

17. Hideo Yokoi

4
10

3
8

11

5

2
1

13

12

14
7

15

17

18

9

Executive Officer

Data

Director, Executive Officer

4. Masahiko Takenaga

Corporate Governance

1. Kenya Okushi

18. Yuichi Takaku
Executive Officer

To prevent the spread of COVID-19, participants removed their masks only for the moment this photograph was taken.

104

Nichirei Group Integrated Report 2022

105

Officer Career Summaries(As of June 24, 2022)

Directors 

Audit & Supervisory Board Members Junji Kawasaki

Tatsushi Kato

Tetsuro Katabuchi

Representative Director, President

Director, Executive Officer

Outside Audit & Supervisory
Board Member

Significant concurrent positions outside the Company

In charge of Innovation Planning & Development and Quality
Assurance, General Manager of Technology Management

Audit & Supervisory
Board Member

Chairman, Japan Frozen Food Association

Number of years in office5

Number of shares held

25,615

5

Number of years in office1

Number of years in office

New appointment

Number of shares held

8,798

Number of shares held

400

Number of shares held

300

Kazuhiko Umezawa

Masahiko Takenaga

Director, Executive Officer

Director, Executive Officer

Yuhiko Saito

Kiyoshi Asahina

Significant concurrent positions outside the Company

Significant concurrent positions outside the Company

Outside Audit & Supervisory
Board Member

Outside Audit & Supervisory
Board Member

Representative Director, President, Nichirei Logistics Group Inc.

Representative Director, President, Nichirei Foods Inc.

Number of years in office4

Number of years in office3

Number of years in office3

Number of years in office2

Number of shares held

17,973

Number of shares held

18,411

Number of shares held

1,200

Number of shares held

200

Kenji Suzuki

Director, Executive Officer

Director, Executive Officer

Significant concurrent positions outside the Company

In charge of Accounting & Tax, Business Management and Real
Estate Division, General Manager of Finance

Representative Director, President, Nichirei Fresh Inc.

Number of years in office1

Number of years in office

New appointment

Number of shares held

3,554

Number of shares held

2,363

April
1983 Appointed Public Prosecutor
September 2012	Director-General of the Rehabilitation Bureau, Ministry of Justice
July
2014 Chief Prosecutor, Kyoto District Public Prosecutors Office
April2015 Chief Prosecutor, Yokohama District Public Prosecutors Office
September 2016	Superintending Prosecutor, Takamatsu High Public Prosecutors OfficeMarch2017 Superintending Prosecutor, Hiroshima High Public Prosecutors Office
January
2018 Retired from officeMarch2018 Registered as an attorney (Dojima Law Office) (to the present)June2019	Outside Audit & Supervisory Board Member, the Company (to the present)

Significant concurrent positions outside the Company

Kuniko Shoji

Mana Nabeshima

Outside Director

Outside Director

Significant concurrent positions outside the Company

Significant concurrent positions outside the Company

Outside Director, MEDIPAL HOLDINGS CORPORATION
Outside Director, DIC Corporation
Professor, Kanagawa University of Human Services Graduate
School, School of Health Innovation

Representative Director, Wakiaiai Co., Ltd.

Number of years in office4

Number of shares held

1,600

March
June

106

1,500

Joined Citibank, N.A., Tokyo Branch
Joined Goldman Sachs Japan Co., Ltd.
Joined DBS Bank Ltd.
Representative Director and CEO, DBS Securities (Japan) Co., Ltd.
Country Head of Japan, DBS Bank Ltd.
Executive Officer; Head of Sales, HiJoJo Partners Inc.
Vice Chairman, DIGITAL GRID Corporation (to the present)
Representative Director, Wakiaiai Co., Ltd. (to the present)
Outside Director, the Company (to the present)

April
June
June
June
April
April
June
June
June

200

1981 Joined The Fuji Bank, Limited (currently Mizuho Bank, Ltd.)
2004	General Manager of Forex Department, Mizuho Corporate Bank, Ltd. (currently
Mizuho Bank, Ltd.)
2007 General Manager, Bangkok Branch, Mizuho Corporate Bank, Ltd.
2009	Executive Officer, Mizuho Securities Co., Ltd.; President, Mizuho Bank
(Switzerland) Ltd.
2010 Director, Mizuho Securities Co., Ltd.
2010 Audit & Supervisory Board Member, OKAYA ELECTRIC INDUSTRIES CO., LTD.
2012 Managing Executive Officer, OKAYA ELECTRIC INDUSTRIES CO., LTD.
2014 Director, Managing Executive Officer, OKAYA ELECTRIC INDUSTRIES CO., LTD.
2018	Director, Senior Managing Executive Officer, OKAYA ELECTRIC INDUSTRIESCO., LTD.
2020 Director, OKAYA ELECTRIC INDUSTRIES CO., LTD.
2020 Outside Audit & Supervisory Board Member, the Company (to the present)
2020 Outside Corporate Auditor, Komori Corporation (to the present)
2021 External Director, JCU Corporation (to the present)

Executive Officers 

Itsuo Hama

Kenji Hamashima

Outside Director

Outside Director

Significant concurrent positions outside the Company

Significant concurrent positions outside the Company

Representative Director, Chairperson, Lion Corporation

Outside Director, Inabata & Co., Ltd.

Number of years in office

New appointment

Number of years in office

New appointment

Number of shares held—

Number of shares held—

1977 Joined Lion Fat & Oil Co., Ltd. (current Lion Corporation)2008	Director, Executive General Manager of Household Products Division, Lion
Corporation2009	Director, Executive General Manager of Household Products Division, responsible
for Advertising Department, Behavioral Science Research Institute, Distribution
Policy and Customer Development Department, Lion Corporation2010	Executive Director, responsible for Health Care Products Division, Household
Products Division, Gift and Channel-Specific Products Division, Advertising
Department, Behavioral Science Research Institute, Distribution Policy andCustomer Development Department, Lion Corporation2012	Representative Director, President, Executive Officer, Chief Operating Officer,
responsible for Risk Management, Lion Corporation
2016	Representative Director, President and CEO, Chairman of the Board of Directors,
Executive Officer, Lion Corporation
2019	Representative Director, Chairman of the Board of Directors, Chief
Executive Officer, Lion Corporation
2022	Representative Director, Chairman of the Board of Directors, Lion
Corporation (to the present)
2022	Outside Director, the Company (to the present)

April
April

2

Number of shares held

April
April
November
April
April
June
April
October
April
April
June
June
June

1982 Joined Ushio, Inc.
1999 Director, President, CEO, Ushio America, Inc.
2000 Director, President, CEO, Christie Digital Systems, Inc.
2004 Senior Group Executive Officer, Ushio, Inc.
2007 Group Managing Executive Officer, Ushio, Inc.
2010 Director, Senior Managing Executive Officer, Ushio, Inc.
2014 Representative Director, Senior Executive Vice President, Ushio, Inc.
2014 Representative Director, Chief Executive Officer, Ushio, Inc.
2019 Corporate Advisor, Ushio, Inc.
2020 Special Counselor, Ushio, Inc. (to the present)
2020 Outside Director, Inabata & Co., Ltd.
2022	Outside Director, Audit and Supervisory Committee Member, Inabata & Co., Ltd.
(to the present)
2022	Outside Director, the Company (to the present)

Yutaka Karino

Hideo Yokoi

Executive Officer

Executive Officer

In charge of Legal Affairs, General Manager of General Affairs& Public Relations, General Manager of Human Resources,
General Manager of Secretarial Office

Representative Director, President, Nichirei Biosciences Inc.

Significant concurrent positions outside the Company

Yuichi Takaku
Executive Officer

Data

January

Number of shares held

April
June

Number of years in office

Corporate Governance

March

1991
2000
2015
2016
2016
2020
2020
2020
2021

1

Outside Corporate Auditor, Komori Corporation
External Director, JCU Corporation

Sustainability

January

AugustOctoberJanuary
AugustSeptember
January
July
December
June

Number of years in officeBusiness Strategy

March

July
April
April
June

1978	Joined Ministry of Agriculture and Forestry (currently Ministry of Agriculture,
Forestry and Fisheries)
1994 Planning Manager, Vegetable Supply Stabilization Fund1997 Counselor, Embassy of Japan in the United Kingdom
2001 Counselor, Cabinet Secretariat (to Assistance Chief Cabinet Secretary)
2003	Director of Administration Division, Forest Policy Planning Department,
Forestry Agency
2004	Director-General, Cooperatives Inspection Department, Minister’s Secretariat
2008	Director-General, Kinki-Chugoku Regional Forest Office2010	Auditor, Fisheries Research Agency
2014	Advisor, International Business Division, Japan Association for International Racing
and Stud Book
2020 Outside Audit & Supervisory Board Member, the Company (to the present)

Outside Audit & Supervisory
Board Member

April1977 Joined Mochida Pharmaceutical Co., Ltd.
July
1986	Joined Johnson & Johnson Medical K.K. (currently Johnson & Johnson K.K.)
September 2002	Joined Terumo Corporation; General Manager of Regulatory Affairs Department,
Terumo CorporationJune
2004	Executive Officer; General Manager of Regulatory Affairs Department, Terumo
CorporationJune
2010	Director, Senior Executive Officer; General Manager of Regulatory Affairs
Department; General Manager of Clinical Development Department, Terumo
Corporation
April
2017 Director, Corporate Advisor, Terumo Corporation
June
2018 Outside Director, the Company (to the present)		Outside Director, MEDIPAL HOLDINGS CORPORATION (to the present)
March2019 Outside Director, DIC Corporation (to the present)
April2019	Professor, Kanagawa University of Human Services Graduate School, School of
Health Innovation (to the present)

JanuaryMay
May
January
July

June

Muneaki Kiyota

Outside Directors 

April
March

April

Business Portfolio
Medium-term Business Plan

Wataru Tanabe

Value Creation Story

Number of years in office*T hree years in office since being appointed representative director in 2019.

Management Strategy

Kenya Okushi

In charge of IT Strategy, General Manager of Strategic Planning,
General Manager of Sustainability Management

For detailed information on each officer, see
https://www.nichirei.co.jp/english/corpo/outline

Nichirei Group Integrated Report 2022

107

Financial and Non-financial Highlights
EBITDA(Billions of yen)(Billions of yen)

Waste Discharged Outside Worksites andRecycling Rate

CO2 Emissions
Domestic Scope 1 emissions

600

568.0

580.1

584.9

572.8

602.7

(Thousands of tons of CO2)

60

300

46.1
400

47.0

49.4

52.6

(Tons of CO2 per ton of production)

0.6

0.54

52.5

0.47

40

0.46

200

243
200

Waste discharged outside worksites

Domestic Scope 2 emissions (Market standard)1

Emissions intensity (Tons of CO2 per ton of production)2

20

224

(Thousands of tons)

60
50

0.42

0.41

0.41

0.4

99.6

99.5

46.3

45.4

Recycling rate
(%)

99.4

98.7

98.9

100

47.9

47.1

47.9

80

40

60

30

215

100

199

185

182

0.2

40

20

0

0

2018

2019

2020

2021

2022

p112
Operating Profit and Operating Profit/Net Sales
(%)

10

5.3

29.5
5.1

31.0
5.3

32.9
5.8

31.4

8

5.2

6

0

2019

2020

2021

2022

43

42

42

43

2019

2020

2021

2022

0

25
20

19.1

10

2

5

0

0

19.9

19.6

21.2

2020

2021

2022

2021

2022

Due to steady profit, among other factors, ROE hascontinued to meet the medium-term business plantarget of 10% or higher.

(FY)

93

89
2.3

82
2.1

94
2.4

82
2.1

3.0

76
1.9

2.0

0

97.7

96.0

44.3

46.9

47.3

96.4

50.1

2020

2021

0

2018

(FY)

2019

2020

2021

2022

(FY)

We continuously strive to create a good working
environment, facilitate diverse work styles and improve
job satisfaction.

Training and Education Time andNumber of Participants

General Regular Health Checkup Rate andStress Check Coverage(%)(Hours)100

100,000

80

80,00060

60,00040

40,000* Total number of resignations for personal or other reasons

Number of participants

General regular health checkup rate
(Participants)

2,800

2,651

104.7

49.4

2022

We have set a target of increasing the ratio of female line
managers at Nichirei Corporation to 30% by FY2031 as a
KPI for one of the Nichirei Group’s material matters, and weare proactively working to promote the advancement offemale employees.

■■ Training and education time

Equity ratio

96.4

2019

2,400

1,699

1,569

49,73047,1901,379
45,46968,552

(%)

100

99.8

100.0

100.0

1,600

89.2

90.1

89.6

1,200

37,201

2019

2020

100.0

90.8

90.1

2021

2022

95

2,000

1,495

Stress check coverage

100.0

90
85

800
20

20,000

2018

2019

2020

2021

2022

0

0

(FY)

Interest-bearing debt increased ¥8.3 billion to ¥104.7 billion.
The equity ratio in FY2022 was 49.4%.

400
0

2018

2019

2020

2021

2022

(FY)

We have been working to enhance the content of training
and education as an investment in human resources.
Due in part to the impact of COVID-19, we offer online
educational programs.

0

2018

(FY)

Data

2020

4.0
100

1.0

2018

0

2019

88

(FY)

30

0

5.0

Corporate Governance

5

（%）

150

0

2019

11.3
60

Turnover rate

Sustainability

10

We have been actively working to reduce the amount of andrecycle food residue and waste generated by our businessactivities.

40

2018

90

(FY)

50

120

15

2022

120

120

(Billions of yen)

20

2021

140

15

4

2020

Number of Resignations* and Turnover Rate
160

160

23.4

■■ Interest-bearing debt

10.9

2019

(Employees)

Interest-bearing Debt and Equity Ratio

10.9

0

2018

(Billions of yen)

ROE

11.7

0

(FY)

Number of Female Line Managers

Profit increased as a result of recording gain on sales ofinvestment securities, among other factors.

2018

44
2018

Our goal is a 50% reduction by FY2031 (compared with
FY2016). In addition to promoting energy conservation in
FY2022, we expanded our use of renewable energy,
including the installation of solar panels and purchase of
Tradable Green Certificates.

Profit Attributable to Owners of Parent

Despite growth in the temperature-controlled logistics andmarine products businesses, operating profit decreased as
the processed foods business faced tough conditions due
to a pandemic-related slowdown in operations at a Thai
production subsidiary and higher raw material andpurchasing costs.

11.9

43
2016

1. The CO2 emission coefficient for electricity has been adjusted for each electric
power company (Ministry of the Environment).
2. The scope of coverage for emissions intensity per ton of production is thedomestic plants of Nichirei Foods and Nichirei Fresh (excluding some plants).

Although operating profit decreased, EBITDA remained
essentially unchanged from the previous fiscal year due
to an increase in depreciation expenses.

(FY)

(%)

108

(FY)

80

10

2018

2022

Business Strategy

20

2021

■■ Number of resignations

40

29.9

2020

Operating profit/Net sales(Billions of yen)

30

2019

Business Portfolio
Medium-term Business Plan

Net sales increased 5% due to firm growth in the core
processed foods and temperature-controlled logistics
businesses. In processed foods, sales of both household-use
and commercial-use products increased, centered on
mainstay categories. In the logistics business, overseas
business revenues grew.

■■ Operating profit

0

2018

(FY)

Value Creation Story

20

10

Management Strategy

Net Sales

Under the Nichirei Group Health Declaration, we are striving
for health management based on the three pillars of healthmaintenance and improvement, mental health measures, andsafety and hygiene control. The general regular healthcheckup rate has reached 100%.

Nichirei Group Integrated Report 2022

109

Overview of Medium-term Business Plans
RISING 2015

POWER UP 2018

WeWill 2021

Concept

Aim to achieve FY2013 targets by conducting business activities
based on employee (1) energy/vitality, (2) ability to act/execute and(3) strong efforts/initiatives

With the goal of achieving medium-term management vision GROWTH
2016, increase the corporate value of the Nichirei Group by realizing thesustainable growth targeted in the plan

Steadily strengthen the foundation of the Group and steadily implement
structural reforms to generate the potential that enables sustainable growth

Aim to realize the long-term management goals toward 2030 with a strong
intention to create a distinctive future

PeriodApril 2010 to March 2013

April 2013 to March 2016

April 2016 to March 2019

April 2019 to March 2022

President

Toshiaki Murai

Kunio Otani

Kunio Otani

Kenya Okushi

Basic Strategy

Stock Price/Currency
Exchange Rate
(At end of plan period)
Figures(Overseas Sales)
Operating Profit(Operating Profit/Net Sales)
Ordinary Profit

Each operating company will, by displaying its unique capabilities and helping
to resolve social issues through business development, fulfill its “six responsibilities”
and establish a foundation for sustainable growth responsive to changes in theoperating environment in Japan and overseas.

 reat East Japan Earthquake and subsequent nuclear power・G
plant accident

 ocus on food safety and security resulting from factors including cases of・Fpesticide problems and meat sold after its sell-by date

 ising nationalism in the United States and elsewhere, and slow progress of・R
negotiations for the United Kingdom’s departure from the EU・Appreciation of the yen as European financial instability becomeswidespread
tax rate hike to 8% as Abenomics starts, and the yen
・Consumption
depreciates

・The Paris Agreement and TPP come into effect eries of natural disasters in Japan・Son business innovation and new business development for medium- to long・Focus
term growth.

Through planned investments significantly higher than the previous medium-termbusiness plan, we aim to further accelerate sustainable profit growth and create
new value that supports good eating habits and health.
 onsumption tax rate hike to 10%・C・The global COVID-19 pandemic drastically changes social conditions
・The United Kingdom leaves the EU・Tokyo Olympics and Paralympics postponed for one year

Nikkei Stock Average: ¥12,397.91

Nikkei Stock Average: ¥16,758.67

Nikkei Stock Average: ¥21,205.81

Nikkei Stock Average: ¥27,821.43

Dollar/Yen exchange rate: ¥94.19

Dollar/Yen Exchange Rate: ¥112.56

Yen/Dollar Exchange Rate: ¥110.84

Yen/Dollar Exchange Rate: ¥121.68

Final year results

Final year results

Final year results

Final year results¥470.1 billion¥535.3 billion¥580.1 billion¥602.7 billion¥37.5 billion¥75.5 billion¥79.2 billion¥97.6 billion¥17.9 billion¥21.5 billion¥29.5 billion¥31.4 billion

3.8%

4.0%

5.1%

5.2%

¥17.2 billion¥21.4 billion¥29.9 billion¥31.7 billion¥9.8 billion¥13.4 billion¥19.9 billion¥23.4 billion

EBITDA¥32.2 billion¥38.0 billion¥47.0 billion¥52.5 billion

ROE

8.2%

9.1%

11.7%

11.3％

EPS

¥33.40¥94.30¥149.65¥176.72¥47.5 billion¥64.4 billion¥63.0 billion¥93.0 billion

Total 3-Year Capital
Expenditures
Incl. Processed Foods¥15.5 billion¥24.7 billion¥21.3 billion¥34.0 billion

Logistics¥27.8 billion¥34.4 billion¥29.6 billion¥49.9 billion

Achievements

Achieved the plan targets for operating profit in the core processed
foods and logistics businesses; marine, meat and poultry products fell
substantially short
Processed Foods
・Expanded sales of prepared frozen foods for the household-use and
HMR markets
 tarted full-scale operation of two factories for processed poultry
・S
products in Thailand
Logistics
・Expanded earnings base by starting operation of Higashi-ogishima DC
and other sites
・Increased contracts for XD outsourcing

Made investments for sustainable growth and achieved Group targets fornet sales and operating profit
Processed Foods
 Strengthened the domestic in-house production system
・・Expanded business scale in the United States
Logistics
 tarted operation of large-scale refrigerated warehouses in the Tokyo and・S
Osaka metropolitan areas

Achieved Group targets for net sales and operating profit by improving profitabilityof processed foods and stably expanding logistics
Processed Foods
・Improved profitability in Japan on expanded sales of mainstay products
Logistics
・Expanded cargo pickups mainly in metropolitan areas and improved balance oftransport income
Meat and Poultry Products
・Increased earnings

・FY2011(Processed Foods) Start of operation of GFPT Nichirei (Thailand) Co.,
Ltd., Surapon Nichirei Foods Co., Ltd. Kabinburi Plant Building No. 2
expansion(Logistics) Fukuoka Higashihama DC, acquisition of Transports
Godfroy S.A.S. (France)

・FY2014(Processed Foods) Newly established Funabashi No. 2 Plant(Logistics) Higashi-ogishima DC Phase 2 Building

・FY2018(Logistics) Heiwajima DC (rental)(Marine Products) Trans Pacific Seafood Co., LTD. (Vietnam) established・FY2015(Processed Foods) E xpanded cooked rice products production line
(Logistics) Sakishima DC, Tokachi DC

・FY2019(Biosciences) Global Innovation Center established

Main Investments

・FY2012(Logistics) Higashi-ogishima DC, Kagoshima So DC
・FY2013(Processed Foods) Acquisition of InnovAsian Cuisine Enterprises Inc.
(USA)

110

・FY2016(Logistics) Funabashi DC (rebuilding)See pages 48-49 fora detailed review.

Start of Medium-term Business Plan

Compass Rose 2024

Data

General Strategy(1) E nsure sustainable earnings growth and raise capital efficiency.
(2) Pursue continued expansion in scale for overseas business.
(3) F urther enhance the Nichirei Group’s capabilities for quality assurance.
(4) C ontinue to strengthen corporate governance and other ESG-related efforts.
(5) F ocus more intently on utilizing diverse personnel.
Financial Strategy
・Maintain return on equity (ROE) of at least 8%.
・Provide a continual, stable dividend with a target DOE of 2.5%.
 onsider share buy-backs of around 20 million shares (approx. 7% of total issued
・C
shares)Corporate Governance(1) B olster the earnings capacity of individual Group companies in Japan andoverseas to achieve sustainable growth.
(2) Build a global quality assurance system.
(3) Allocate the Group’s management resources appropriately and continue to
implement a policy of providing appropriate returns to shareholders,
including the acquisition of treasury stock and a dividend increase.
(4) U pgrade corporate functionality in the holding company structure.
(5) S trengthen the strategy on technological innovation in response to majorchanges in social and economic circumstances.

Sustainability

Main Initiatives(1) B olster earnings capacity and achieve sustainable growth of theGroup by effectively allocating management resources.
(2) F acilitate the self-sustained growth of the core operating companies
by identifying and capturing growth opportunities.
(3) O btain the trust of society by providing valuable food safety andreliability.
(4) S trengthen the source of the Group’s competitiveness by further
improving management quality.
(5) S trengthen the Group’s abilities to collect and analyze newtechnologies to create new business models that will ensuresustainable growth.
(6) E xamine the possibility of acquiring treasury stock as part of a capital
policy.
(7) Redevelop the retirement benefit system.

Business Strategy

ProfitBusiness Portfolio
Medium-term Business Plan

Net Sales

Achieve sustainable earnings growth by steadily pursuing businessstrategies and responding promptly to the operating environment.

Value Creation Story

Operating
Environment

・Aim for profit growth from strengthening the earnings base and improving asset
efficiency in domestic businesses and for accelerated expansion of scale in theoverseas business.

Management Strategy

energy 2012

(April 2022 to March 2025)
See pages 50-51 for details.

Nichirei Group Integrated Report 2022

111

11-Year Financial Highlights
Compass Rose 2024
energy 2012
FY2012RISING 2015

FY2013

FY2014

WeWill 2021

POWER UP 2018

FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

Sales and Income:

FY2022(Millions of yen)

539,657

568,032

580,141

584,858

572,757

602,696

368,012378,652

417,928

446,180454,265448,516

475,194

486,926

485,784

473,954

500,451

70,74173,541

77,47256,37659,501

61,831

62,94063,704

68,03865,85370,835

Operating profit

16,177

17,932

15,78917,406

21,58329,30929,89729,511

31,03532,94931,410Non-operating income:

2,025

1,880

2,113

1,993

1,704

1,433

2,102

1,753

1,891

1,798

1,444

622

575

1,060

616

664

716

817

871

896

880

903

49

224

―

140

131

278

715

399

387

376

116

2,952

2,609

3,459

2,498

1,893

1,637

1,350

1,399

1,150

1,215

1,187

1,445

1,438

1,295

1,138

1,053

954

898

870

791

709

619

―

―

795

―

―

―

―

―

―

―

—

Ordinary profit

15,25017,202

14,443

16,902

21,394

29,10530,65029,864

31,77733,532

31,667Extraordinary income

1,308

1,690

2,347

137

220

468

102

1,085

505

870

5,188

2,333

5,291

1,432

1,167

1,014

1,756

1,515

1,410

2,489

2,799

1,747

14,225

13,601

15,357

15,871

20,60027,81829,23729,54029,792

31,60335,107

6,406

5,489

5,480

4,850

5,933

7,322

8,601

8,773

9,008

8,954

10,839(85)(1,712)

978

1,504

1,195

1,744

1,538

822

1,174

1,437

886

Profit (loss) attributable to owners of parent

7,904

9,823

8,898

9,516

13,471

18,751

19,097

19,943

19,60921,212

23,382

Depreciation and amortization

14,97814,302

14,475

15,621

16,455

16,057

16,155

17,481

18,355

19,66921,089

11,177

10,522

10,748

11,871

12,65812,347

12,543

13,91014,69015,89417,503

12,24813,171

24,041

24,171

16,175

13,887

24,952

24,132

27,287

37,776

27,9139,400

10,724

21,20919,75013,216

10,25322,312

21,32024,86433,851

25,404

1,697

1,817

1,607

1,730

1,600

1,559

1,986

2,359

2,486

2,403

1,939

Cost of sales
Selling, general and administrative expenses*

Interest and dividend income
Share of profit of entities accounted forusing equity method
Non-operating expenses:*

Interest expenses	
Share of loss of entities accounted forusing equity method

Extraordinary losses*

Profit before income taxes
Income taxes*

Profit (loss) attributable to non-controlling interests(Excluding leased assets)
Capital expenditures(Excluding leased assets)
Research & development expenditures

Share Information:
*

26.35

33.40

31.12

33.29

47.15

135.11

142.23149.65147.16159.19176.72

Dividends per share

*

9

10

10

10

12

28

30

32

42

50

50

34%

30%

32%

30%

26%

21%

21%

21%

29%

31%

28%

Payout ratio

Data

Profit per share

Corporate Governance535,351

Sustainability

519,963

Business Strategy

511,189

Business Portfolio
Medium-term Business Plan

470,126*

Value Creation Story

454,931

Net sales

Management Strategy

Nichirei Corporation and Consolidated
Subsidiaries for the Years Ended March 31

Notes:
1. Figures in the consolidated statements of income are based on the Securities Report and presented in million-yen units, with units less than one million yen rounded down. However, figures
for items marked with an asterisk “ ” have been fractionally adjusted for convenience purposes.

*

2. From FY2016, the accounting policy regarding standards for recording sales in the processed foods business was changed (the portion that had previously been recorded as promotional
expenses has been excluded from net sales). Accordingly, the FY2015 figure has been retroactively changed to reflect the change in the accounting policy standards.
3. From FY2017, profit per share (yen) and dividends per share (yen) are shown as numerical values after the reverse stock split implemented on October 1, 2016.

112

Nichirei Group Integrated Report 2022113

Consolidated Balance Sheets (Unaudited)
Consolidated Balance Sheets (Unaudited)

Consolidated Balance Sheets (Unaudited) (Continued)
Thousands of
U.S. dollars(Note 1)
2022

Millions of yen
Assets¥Intangible assets¥

191,267
743,121(920)
425,850
113,591
1,472,911

259,690
115,963
38,68337,1993,716
12,117467,371(293,409)
173,962

261,489
125,441
41,07536,267
4,904
12,866
482,045(300,939)
181,106

2,136,175
1,024,768
335,557
296,28140,067105,1123,937,962(2,458,454)
1,479,507

8,394

14,781

120,755

33,66331,086

253,953

7,244
52
2,260
10,814(245)
53,789236,146

7,492
49
2,607
10,552(369)
51,419247,307

61,205403
21,302
86,208(3,015)420,058
2,020,322

405,719¥427,606$

3,493,233

The accompanying notes are integral parts of these statements.

114

¥

6,948

¥

－

4,797
10,00028,0733,572
5,911
35,483

13,4902,000
14,798$110,211
16,338120,894－－

29,254
3,395
4,779
34,909238,989
27,74039,048285,181238
13,481
108,506

198
17,947
120,775

1,623
146,618
986,646

30,00029,01040,00019,882

326,770
162,428131
1,996
12,093
4,265
4,037
5,251
86,786
195,293

102
2,029
11,149
5,853
4,180
5,729
88,928
209,703836
16,57691,08647,82034,152
46,807
726,478
1,713,125

30,418
5,795
172,436(17,648)
191,00230,472
5,495
172,369(11,841)
196,494

248,936
44,892
1,408,129(96,738)
1,605,219

12,344
1,639(1,660)12,323
7,100
210,426

11,9842,360
329
14,674
6,733
217,903

97,90819,2792,695
119,883
55,005
1,780,108

Net assets:
Shareholders’ equity (Note 7):
Share capital

Authorized- 360,000,000 shares for 2021 and 2022
Issued and outstanding - 140,003,877 sharesfor 2021 and 134,007,795 shares for 2022

Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income:
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Total accumulated other comprehensive income
Non-controlling interests
Total net assets

Total liabilities and net assets¥
405,719
The accompanying notes are integral parts of these statements.

¥

427,606

$

Data

1

Current liabilities:
Short-term borrowings
Commercial papers
Current portion of long-term borrowings
Current portion of bonds payable
Accounts payable – trade
Lease liabilities
Income taxes payable
Accrued expenses
Provision for bonuses for directors (andother officers)
Other
Total current liabilities
Non-current liabilities:
Bonds payable
Long-term borrowings
Provision for retirement benefits for
directors (and other officers)
Retirement benefit liability
Lease liabilities
Deferred tax liabilities (Note 8)
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities

Corporate GovernanceTotal assets$

Sustainability

Investments and other assets:
Investment securities (Note 5)
Shares and investments in capital ofsubsidiaries and associates
Retirement benefit asset
Deferred tax assets (Note 8)
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets

23,41390,965(112)
52,12813,904
180,299

Business Strategy

Accumulated depreciation
Property, plant and equipment, net

¥

2022

2021

Business Portfolio
Medium-term Business Plan

Non-current assets:
Property, plant and equipment (Note 6):
Buildings and structures
Machinery and equipment
Land
Leased assets
Construction in progress
Other

28,93381,749(109)
47,867
11,131
169,572

Liabilities and net assets

Value Creation Story

Current assets:
Cash and deposits
Notes and accounts receivable – trade
Allowance for doubtful accounts
Inventories
Other
Total current assets

2022

2021

Thousands of
U.S. dollars(Note 1)
2022

Millions of yen

Management Strategy

Nichirei Corporation and Consolidated Subsidiaries
As of March 31, 2021 and 2022

3,493,233

2

Nichirei Group Integrated Report 2022

115

Consolidated Statements of Income (Unaudited)

Consolidated Statement of Comprehensive Income(Unaudited)

Consolidated Statements of Comprehensive Income (Unaudited)

Consolidated Statements of Income (Unaudited)2021
Net sales¥
Operating costs and expenses:
Cost of sales
Selling, general and administrative expenses¥

572,757

602,696$

4,923,590
4,088,321
578,671

539,808
32,949571,286
31,4104,666,993
256,597880(709)(1,517)(1,345)31,603

904
(619)
3,412
3,697
35,107

7,389(5,064)27,88130,206
286,803

ProfitProfit attributable to non-controlling interests

9,684
(730)
8,954
22,6491,437

Profit attributable to owners of parent

10,233605
10,83924,268886

83,5964,950
88,546198,256
7,238

21,212

Operating profit
Non-operating income (expenses):
Interest and dividend income
Interest expenses
Other – net
Profit before income taxes
Income taxes (Note 8):
Income taxes – current
Income taxes – deferred¥¥

23,382$¥

1,525.76

1,630.84

24,268$198,256

3,319
837
(973)

(356)
693
1,983

(2,914)
5,661
16,205(224)
2,959
25,609

¥

203
2,523
26,792$

1,665
20,617
218,874

24,452¥25,733$

210,226

1,156

1,058

8,647

The accompanying notes are integral parts of these statements.

191,018$

13.323176.72－

Corporate Governance159.19－¥¥¥Sustainability

Net assets
Profit:Basic
Diluted

2022

2021

Comprehensive income attributable to:Comprehensive income attributable toowners of parent
Comprehensive income attributable tonon-controlling interests

22,649U.S. dollars(Note 1)
2022

Yen
Amounts per share (Note 9):

Profit¥Other comprehensive income:
Valuation difference on
available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Share of other comprehensive income ofentities accounted for using equity method
Total other comprehensive income
Total comprehensive income¥

Business Strategy

500,451
70,835

2022

2021

Thousands of
U.S. dollars(Note 1)
2022

Business Portfolio
Medium-term Business Plan

473,954
65,853

Millions of yen

Value Creation Story

2022

Thousands of
U.S. dollars(Note 1)
2022

Millions of yen

Management Strategy

Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2021 and 2022

Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2021 and 2022

1.444
－

The accompanying notes are integral parts of these statements.

Data

3
116

4
Nichirei Group Integrated Report 2022

117

Consolidated Statements of Changes in Equity (Unaudited)
Consolidated Statements of Changes in Equity (Unaudited)

Consolidated Statements of Changes in Equity (Unaudited) (Continued)

Millions of yen

Thousands of U.S. dollars (Note 1)
Shareholders’ equity

Shareholders’ equity

Net changes in items other than shareholders’ equity

Total changes during period
Net assets at March 31, 2021
Cumulative effect of changes in accounting policies

Net changes in items other than shareholders’ equity¥ 5,750¥ 156,953

59

59(5,729)21,212(14)
059¥ 30,418

44¥ 5,795

30,418

5,795

53

53

(7)

0
15,482¥ 172,436(574)
171,862(6)¥ (17,648)(17,648)

Net assets at April 1, 2021

¥ 175,421

Cumulative effect of changes in accounting policies

Restated balance
Changes during period
Issuance of new shares
Dividends of surplus
Profit attributable to owners of parent
Change in ownership interest of parent due totransactions with non-controlling interests
Purchase of treasury shares
Disposal of treasury shares
Cancellation of treasury shares

119(5,729)21,212(14)(7)
0
15,580¥ 191,002(574)
190,428(7,063)23,382

106(7,063)23,3820(0)(15,811)(10,006)
0
15,812(352)(10,006)
0－(299)¥ 5,495506¥ 172,369

5,806¥ (11,841)

6,066¥ 196,494

(352)

53
¥ 30,472¥ (17,642)

Net changes in items other than shareholders’ equity

Total changes during period
Net assets at March 31, 2022

Valuationdifference on
available-forsale securities

Purchase of treasury shares
Disposal of treasury shares
Net changes in items other than shareholders’ equity

Cumulative effect of changes in accounting policies

Net changes in items other than shareholders’ equity

Total changes during period
Net assets at March 31, 2022

¥

802

(736)

¥ 9,082

Net assets at April 1, 2021
Cumulative effect of changes in accounting policies

Noncontrollinginterests

Total net
assets¥ 6,884¥ 191,388

3,327
3,327
¥ 12,344

836
836¥ 1,639

(923)
(923)
¥ (1,660)

3,240
3,240
¥ 12,323

216
216¥ 7,100

12,344

1,639(1,660)12,323

7,100$ 47,341$ (144,173)

248,500

47,341$ 1,408,677(4,689)1,403,988

435

435

870
(57,706)
191,018(57,706)
191,018(2,882)435$ 248,936(144,173)0(1)(129,171)(81,742)4
129,172(2,449)$ 44,892

4,140$ 1,408,129

47,434$ (96,738)

119(5,729)21,212
(14)
(7)
0
3,456
19,037¥ 210,426(574)
209,851

Restated balance
Changes during period
Issuance of new shares
Dividends of surplus
Profit attributable to owners of parent
Change in ownership interest of parent due totransactions with non-controlling interests
Purchase of treasury shares
Disposal of treasury shares
Cancellation of treasury shares
Net changes in items other than shareholders’ equity

Total changes during period
Net assets at March 31, 2022

Valuationdifference on
available-for-salesecurities

Deferred gains
or losses onhedgesForeign currencytranslation
adjustment$ 100,844$ 13,394$ (13,564)

100,844

13,394(13,564)$ 1,560,347(4,689)1,555,657

Total accumulated
othercomprehensive
income(2,882)(81,742)
4－
49,561$ 1,605,219

Noncontrollinginterests$ 100,674$ 58,004

100,674

58,004

Total net
assets$ 1,719,026(4,689)1,714,336
870(57,706)
191,018(2,935)(2,935)$ 97,908

5,884
5,884
$ 19,279

16,25916,259$ 2,695

19,20819,208$ 119,883(2,882)(81,742)
4－(2,998)
16,209(2,998)65,771$ 55,005 $ 1,780,108

The accompanying notes are integral parts of these statements.

106(7,063)23,382

(359)
720
(359)
720
¥ 11,984 ¥ 2,360

¥

1,990
1,990
329

2,351
2,351
¥ 14,674(352)(10,006)
0
－
1,984
8,051
¥ 217,903

(367)
(367)
¥ 6,733

Data

Restated balance
Changes during period
Issuance of new shares
Dividends of surplus
Profit attributable to owners of parent
Change in ownership interest of parent due totransactions with non-controlling interests
Purchase of treasury shares
Disposal of treasury shares
Cancellation of treasury shares¥$ 248,500

Total shareholders’equityCorporate GovernanceTotal changes during period
Net assets at March 31, 2021

¥ 9,016

Total
accumulated
othercomprehensive
incomeTreasury shares

Sustainability

Net assets at April 1, 2020
Changes during period
Issuance of new shares
Dividends of surplus
Profit attributable to owners of parent
Capital increase of consolidated subsidiaries

Deferred gains
or losses onhedgesForeigncurrencytranslation
adjustment

Retained earnings

Thousands of U.S. dollars (Note 1)
Accumulated other comprehensive income

Millions of yen
Accumulated other comprehensive income

Capital surplus

Business Strategy

Total changes during period
Net assets at March 31, 2022

¥ 30,359

Treasury shares

Share capitalBusiness Portfolio
Medium-term Business Plan

Restated balance
Changes during period
Issuance of new shares
Dividends of surplus
Profit attributable to owners of parent
Change in ownership interest of parent due totransactions with non-controlling interests
Purchase of treasury shares
Disposal of treasury shares
Cancellation of treasury shares

Capital surplus

Total
shareholders’equityValue Creation Story

Net assets at April 1, 2020
Changes during period
Issuance of new shares
Dividends of surplus
Profit attributable to owners of parent
Capital increase of consolidated subsidiaries
Purchase of treasury shares
Disposal of treasury shares

Share capital

Retainedearnings

Management Strategy

Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2021 and 2022

6

The accompanying notes are integral parts of these statements.
5
118

Nichirei Group Integrated Report 2022

119Consolidated Statements of Cash Flows (Unaudited) (Continued)
Consolidated Statements of Cash Flows (Unaudited)
Consolidated Statements of Cash Flows (Unaudited) (Continued)
Millions of yen
2022

2021
Cash flows from operating activities:

¥

¥

$

(116)
(26)
1,216
(3,923)(7,943)(3,902)935(1,221)
2,461
43,688
1,102
1,221
(630)
(10,721)

(376)
(42)
1,380
(144)
531
(477)
(234)
(565)
(4,470)47,958
1,190
565
(712)
(3,547)45,45335,10721,089
196
100
(904)
619

¥

34,660286,803172,284
1,601
821(7,389)
5,064
(951)
(216)
9,940
(32,050)(64,888)(31,884)
7,643(9,979)20,106356,905
9,003
9,979(5,154)(87,583)$

283,150

Cash flows from investing activities:

Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of shares of subsidiaries resulting in change
in scope of consolidation
Other, net
Net cash provided by (used in) investing activities¥

Cash flows from financing activities:

Net increase (decrease) in short-term borrowings
Net increase (decrease) in commercial papers
Proceeds from long-term borrowings
Repayment of long-term borrowings
Proceeds from issuance of bonds
Redemption of bonds
Repayments of lease liabilities
Purchase of treasury shares
Dividends paid
Dividends paid to non-controlling interests
Purchase of shares of subsidiaries not resulting in change
in scope of consolidation
Other, net
Net cash provided by (used in) financing activities

Cash and cash equivalents at end of period¥¥(21,289)142(1,422)
(80)
5,611

$

(173,919)
1,166(11,622)(657)
45,840(27)(3,019)(32,213)(8,432)(545)(26,016)(68,889)(4,455)(212,538)

2,456(2,000)
409
(955)
9,951
(10,000)(3,886)(7)(5,722)
(955)

5,790
2,000
5,454
(4,832)
9,951(10,000)(3,699)(10,012)(7,053)(899)

47,301
16,33844,563(39,478)
81,293(81,692)(30,218)(81,795)(57,623)(7,351)－
0(10,709)(878)
0(14,179)(7,177)
4(115,838)

45
2,577
25,434865(4,670)28,011

7,072(38,154)
228,831

28,011¥

23,340$190,676

The accompanying notes are integral parts of these statements.

Sustainability

Effect of exchange rate change on cash andcash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period

The accompanying notes are integral parts of these statements.

(28,529)
1,623(2,124)(392)
257

Business Strategy

Net cash provided by (used in) operating activities

31,603
19,669
1,273
(17)
(880)
709

2022

2021

Thousands of
U.S. dollars(Note 1)
2022

Business Portfolio
Medium-term Business Plan¥

Millions of yen

Value Creation Story

Profit before income taxes
Depreciation
Impairment losses
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expenses
Share of loss (profit) of entities accounted for using
equity method
Loss (gain) on sale of non-current assets
Loss (gain) on retirement of non-current assets
Loss (gain) on sale of investment securities
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Compensation for expropriation
Other, net
SubtotalInterest and dividends received
Proceeds from compensation for expropriation
Interest paid
Income taxes paid

Thousands of
U.S. dollars(Note 1)
2022

Management Strategy

Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2021 and 2022

Corporate Governance
Data

7
120

8

Nichirei Group Integrated Report 2022

121

Notes to Consolidated Financial Statements (Unaudited)
Notes to Consolidated Financial Statements (Unaudited)
Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2021 and 2022

Notes to Consolidated Financial Statements (Unaudited)

Note 1: Basis of Presentation

The Company applies “Accounting Standard for Disclosure of Accounting Estimates” (ASBJ Statement No.
31). Under the accounting standard, items whose amount is recorded in the consolidated financial statements
for the current fiscal year based on accounting estimates, and which would have a significant impact on the
consolidated financial statements for the following fiscal year, should be disclosed.

Note 4: Additional Information
Accounting estimates for the effect of COVID-19 spread
Regarding the effect of the COVID-19, it is still difficult to predict the future such as how it would spreadfrom now on or when it would be contained, etc. The Group implemented accounting estimates based on
the assumptions that it will be curbed and turn toward recovery through the fiscal year 2023 along with thevaccination progress, etc.

Unrealized gain¥

17,361¥

16,654$136,055

Data

Non-listed equity securities amounting to ¥3,850 million as of March 31, 2021 are not included in theabove table because they are not traded on the market and it is very difficult to determine their fairmarket value as of March 31, 2021.
Non-listed equity securities amounting to ¥1,937 million ($15,825 thousand) as of March 31, 2022
are not included in the above table because they are equity securities without market prices, etc.

Corporate Governance(1) Acquisition costs, carrying value and unrealized gain on available-for-sale securities as of March 31,
2021 and 2022:
Thousands ofMillions of yen
U.S. dollars
2021
2022
2022
Equity securities:
Acquisition costs¥
12,451¥
12,494$
102,073
Carrying value
29,812
29,149238,128

Sustainability

Note 5: Securities

Business Strategy

Application of accounting standards for revenue recognition
The Group has applied “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March
31, 2020, hereinafter the “Revenue Recognition Accounting Standard”), etc. from the beginning of the
fiscal year ended March 31, 2022. Accordingly, the Group recognizes revenue in the amount expected to bereceived in exchange for promised goods and services at points where control over such goods or services
is transferred to customers.
Applying the alternative handling prescribed in Paragraph 98 of “Implementation Guidance on
Accounting Standard for Revenue Recognition” (ASBJ Guidance No. 30, March 31, 2020), as for therevenues from the domestic sale of merchandise or finished goods, the Group recognizes revenue at the
points of their shipment in cases where control over the concerned merchandise or finished goods moves tocustomers in a normal period after their shipment.
Major changes as a result of the application of the accounting standards are shown below.
n For charged supply materials transactions, in which the company is not obligated to repurchase thesupplied goods, the Group has changed to a method of not recognizing the consideration received
from recipients as revenue.
n As for the warehousing and shipping charges that were recorded as sales at the time of entry into thelogistics warehouse, the Group changed the method of allocating the transaction price to theperformance obligation related to the delivery service and recognizing revenue when theperformance obligation is satisfied.
Regarding the application of the accounting standards, the Group follows the provisional treatment
stipulated in the proviso of Paragraph 84 of the Revenue Recognition Accounting Standard. The cumulative
impact of the retroactive application of the new accounting policy to before the beginning of the fiscal year
is added to or deducted from retained earnings at the beginning of the fiscal year, and the new accounting
policy is applied from this initial balance.
In the consolidated balance sheet for the previous fiscal year, refund liabilities were presented as“Accrued expenses” under “Current liabilities,” but from the current fiscal year, they are included in“Other” under “Current liabilities”. The Group follows the transitional treatments set forth in Paragraph 892 of the Revenue Recognition Accounting Standard and the balance of the previous fiscal year is notreclassified to match with the current fiscal year.

Note 3: Significant Accounting Estimates

Business Portfolio
Medium-term Business Plan

Note 2: Change in Accounting Policy

As a result, “Current liabilities - Other” in the consolidated balance sheet for the current fiscal year
increased ¥769 million ($6,286 thousand) compared to before applying the accounting standard. In the
consolidated statement of income for the current fiscal year, “Net sales” and “Cost of sales” decreased ¥7,272
million ($59,407 thousand) and ¥7,329 million ($59,879 thousand), respectively, and “Operating profit” and“Profit before income taxes” increased ¥57 million ($472 thousand).
For the consolidated statement of cash flows for the current fiscal year, “Profit before income taxes”
increased ¥57 million ($472 thousand) and “Cash flows from operating activities - Other, net” decreased ¥57
million ($472 thousand).
With cumulative impacts reflected on net assets as of the beginning of the current fiscal year, the beginningbalance of “Retained earnings” in the consolidated statement of change in equity decreased ¥574 million($4,689 thousand).
For the impact on per share information, please refer to Note 9: Per Share Information.

Value Creation Story

The accompanying consolidated financial statements of Nichirei Corporation (the “Company”) and its
consolidated subsidiaries (together, the “Group”) are prepared on the basis of accounting principles generally
accepted in Japan, which are different in certain respects as to application and disclosure requirements ofInternational Financial Reporting Standards and are compiled from the consolidated financial statements
prepared by the Company as required by the Financial Instruments and Exchange Law of Japan.
Certain reclassifications have been made to present the accompanying consolidated financial statements
in a format which is familiar to readers outside Japan.
Certain amounts in the prior year’s financial statements have been reclassified to conform to the current
year’s presentation.
As permitted by the Financial Instruments and Exchange Law of Japan, amounts of less than one million
yen have been omitted. As a result, the totals in yen shown in the accompanying consolidated financial
statements do not necessarily agree with the sums of the individual amounts.
For the convenience of the reader, the accompanying consolidated financial statements have beenpresented in U.S. dollars by translating Japanese yen amounts at ¥122.41 = US$1.00, the exchange rate
prevailing on March 31, 2022.
Due to significance, only selected notes are disclosed in the consolidated financial statements. The
other notes which are not selected are disclosed on EDINET.

Management Strategy

Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2021 and 2022

9

10
122

Nichirei Group Integrated Report 2022

123

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited)

Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2021 and 2022

Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2021 and 2022

Notes to Consolidated Financial Statements (Unaudited)(2) Sales of available-for-sale securities for the years ended March 31, 2021 and 2022:

Proceeds from sales
Gains on sales
Losses on sales

¥

2021
258
144
(0)

¥

2022
6,029
3,924
－

(3) Impairment loss of securities for the years ended March 31, 2021 and 2022:
2022

2021
Available-for-sale securities:
Stocks with market value
Stocks without market value
Total

¥
¥

－
10
10

¥
¥

1
4
6

$

15
40
56

$

¥

Net increase (decrease)

9,324

¥

9,354

$

(16)

30

76,420(137)

Carrying value as of March 31

¥

9,354

¥

9,337

$

76,283Market value as of March 31¥

47,065¥

45,106$368,484

1.

3.

4.

124

139,965,587

38,290－140,003,877

6,739,790

2,454

316

6,741,928(Reasons for changes)
1. The increase in the number of issued shares of common stock resulted from the following:･Issuance of new shares for stock-based compensation with restriction on transfer 38,290 shares
2. The increase in the number of treasury shares of common stock resulted from the following:
2,454 shares・Request for redemption of odd-lot stock
3. The decrease in the number of treasury shares of common stock resulted from the following:
316 shares・Request for purchase of odd-lot stock(b) For the year ended March 31, 2022
Type of stock
Issued shares:
Common stock (1,2)
Treasury shares:
Common stock (3,4)(Number of shares)
As of March 31,2022

As of April 1,
2021

Increases

Decreases

140,003,877

37,5186,033,600

134,007,795

6,741,928

3,814,668

6,033,788

4,522,808(Reasons for changes)
1. The increase in the number of issued shares of common stock resulted from the following:･Issuance of new shares for stock-based compensation with restriction on transfer 37,518 shares
2. The decrease in the number of issued shares of common stock resulted from the following:
6,033,600 shares･Retirement of treasury shares
3. The increase in the number of treasury shares of common stock resulted from the following:・Acquisition of treasury shares based on the resolution at the board of
3,810,000 shares
director's meeting
2,363 shares・Increase of shares, of which restriction on transfer are released, acquired
without contribution
2,305 shares・Request for redemption of odd-lot stock
4. The decrease in the number of treasury shares of common stock resulted from the following:
6,033,600 shares･Retirement of treasury shares
188 shares・Request for purchase of odd-lot stock

12

Nichirei Group Integrated Report 2022

Data

11

Decreases

Corporate Governance2.

Carrying value on the consolidated balance sheets is calculated as acquisition cost deducting
accumulated depreciation and cumulative impairment losses.
For the year ended March 31, 2021, major increase represents capital expenditures of ¥786 million.
Major decrease represents depreciation of ¥510 million and change in the use of property of ¥169
million.
For the year ended March 31, 2022, major increase represents capital expenditures of ¥1,087 million($8,886 thousand). Major decrease represents depreciation of ¥550 million ($4,497 thousand) andchange in the use of property of ¥460 million ($3,763 thousand) and sales of property of ¥30 million($248 thousand).
Market value of major assets is based on appraisals obtained from outside real estate appraisers. The
market value of other relatively immaterial assets is based on certain valuation and other indicators
properly reflected by market prices.

Issued shares:
Common stock (1)Treasury shares:
Common stock (2,3)

Increases

Sustainability

Carrying value as of April 1

Type of stock(Number of shares)
As of March 31,
2021

As of April 1,
2020

Business Strategy

The Company and some of its subsidiaries own buildings and land for lease in Tokyo and other areas.
Net rent income on the property related to the investments and rental properties was ¥2,033 million forthe year ended March 31, 2021.
Net rent income and gain on sales on the property related to the investments and rental properties were
¥1,786 million ($14,593 thousand) and ¥31 million ($255 thousand), respectively, for the year ended March
31, 2022.
Gross rent revenue and expense are included in net sales and cost of sales, respectively, on the
consolidated statements of income. Gain on sales of the property is included in other income on the
consolidated statements of income.
Carrying value on the consolidated balance sheet, increase or decrease during the year, as well as market
value of the investments and rental properties as of March 31, 2021 and 2022:
Thousands ofMillions of yen
U.S. dollars
2021
2022
2022

(a) For the year ended March 31, 2021

Business Portfolio
Medium-term Business Plan

Note 6: Investments and Rental Properties(1) Types and numbers of outstanding shares and treasury stock

Value Creation Story

Thousands of
U.S. dollars
2022

Millions of yen

Note 7: Changes in Net Assets
Management Strategy

Millions of yen

Thousands of
U.S. dollars
2022$
49,25932,056－125

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited)

Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2021 and 2022

Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2021 and 2022

Notes to Consolidated Financial Statements (Unaudited)(2) A breakdown of tax loss carryforwards and deferred tax assets by expiry date as of March 31, 2021 and 2022

(2) Cash dividends distributed

Resolution

Total dividends Dividend perType of Source of (Millions of yen
sharestock dividends and Thousands of (Yen and U.S.
U.S. dollars)

dollars)¥ 3,731$ 30,482¥

Board of Directors’
meeting on
November 2, 2021

¥ 3,332$ 27,223¥

Common Retainedstockearnings28$ 0.22

Effective
date

March 31, June 23,
2021
2021

25 September December$ 0.20 30, 2021
3, 2021

Dividends of which the record date falls in the current fiscal year but the effective date falls in thefollowing fiscal year

U.S. dollars)

General shareholders’Common Retained
meeting onstockearnings
June 24, 2022

dollars)¥ 3,237$ 26,444¥25$ 0.20Recorddate

Effective
date

March 31, June 27,
2022
2022

2023
¥
8
(8)
¥ －

2024
¥ 29
(29)
¥ －

2025
¥ 38
(38)
¥ －

2026
¥ 40
(38)
¥
1

2027 and
thereafter
¥ 749
(685)
¥ 63

Total
¥ 878
(813)
¥ 64

(b)

(Millions of Yen)
Fiscal Year Ending
March 31, 2022
Tax loss carryforwards (a) .....
Valuation allowance..............
Deferred tax assets ................

2023
¥
7
(7)
¥ －

2024
¥ 21
(21)
¥ －

2025
¥ 28
(28)
¥ －

2026
¥ 31
(31)
¥ －

2027
¥ 43
(43)
¥ －

2028 and
thereafter
¥ 964
(834)
¥ 129

Total
¥ 1,096
(966)
¥ 129

(b)

(Thousands of U.S. Dollars)
Fiscal Year Ending
March 31, 2022
Tax loss carryforwards (a) .....
Valuation allowance..............
Deferred tax assets ................

2023
$ 61
(61)
$ －

2024
$ 175
(175)
$ －

2025
$ 229
(229)
$ －

2026
$ 256
(256)
$ －

2027
$ 358
(358)
$ －

2028 and
thereafter$ 7,875(6,816)$ 1,059

Total$ 8,956(7,897)$ 1,059(b)(a) Tax loss carryforwards represent the amount multiplied by effective statutory tax rate.
(b) Since taxable income is expected for the next fiscal year, the Group considers a part of the tax loss carryforwards isrecoverable.

Note 9: Per Share Information
Net assets per share as of March 31, 2021 and 2022 are calculated based on the following:

Note 8: Income Taxes(a) For the year ended March 31, 2021
The Company and its consolidated subsidiaries are subject to Japanese national and local income
taxes which, in the aggregate, resulted in a statutory tax rate of approximately 30.6% for the year
ended March 31, 2021. Reconciliation between the statutory tax rate and the effective tax rate
reflected in the accompanying consolidated statement of income is as follows:

7,100

6,733

55,005203,325

211,169

1,725,102

133,261

129,484

129,484¥

Profit per share for the years ended March 31, 2021 and 2022 are calculated based on the following:

2022
23,382Thousands of
U.S. dollars
2022$
191,018－－－

21,212

23,382

191,018

133,251

132,317

132,317

Millions of yen(b) For the year ended March 31, 2022
Since the difference between statutory tax rate and effective tax rate is less than 5% of the statutory
tax rate, note related to reconciliation between the tax rates is omitted.

Profit attributable to owners of parent
Amounts not attributable to commonshareholders
Profit attributable to owners of parent forcommon stock
Average number of common stock during
the fiscal year (in thousands)¥

2021
21,212¥

14

Nichirei Group Integrated Report 2022

Data

13

126

¥

Corporate Governance

2021
30.6%
0.4
0.1
0.5
(2.8)
(1.2)
(0.1)
(0.4)
0.2
1.1
28.3%

Net assets
Amounts excluded from net assets:
For non-controlling interests
Net assets attributable to common stock
Number of common stock used for the
calculation of net assets per share(in thousands)

2021
210,426

Sustainability

Statutory tax rate
Entertainment and other non-deductible expenses
Dividends exempted for income tax purposes
Inhabitants’ tax per capita
Change in valuation allowance
Tax credit for research and development expenses, etc.
Tax rate differences of overseas affiliates
Equity in earnings of affiliates accounted for by the equity method
Undistributed earnings of affiliates
Other, net
Effective tax rate2022
217,903

Thousands of
U.S. dollars
2022$
1,780,108

Millions of yen

Business Strategy(1) Tax rate reconciliation for the years ended March 31, 2021 and 2022

Business Portfolio
Medium-term Business Plan

Resolution

Total dividends Dividend perType of Source of (Millions of yen
sharestock dividends and Thousands of (Yen and U.S.

2022
¥ 12
(12)
¥ －

Value Creation Story

General shareholders’Common Retained
meeting onstockearnings
June 22, 2021

Recorddate(Millions of Yen)
Fiscal Year Ending
March 31, 2021
Tax loss carryforwards (a) .....
Valuation allowance..............
Deferred tax assets ................

Management Strategy

Dividends paid during the year ended March 31, 2022

127

equipment andintangible assets
Outstanding balanceof goodwill
Impairment loss on
fixed assets

Notes to Consolidated Financial Statements (Unaudited)
Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2021 and 2022¥

13,438322

110

19,9732,300

36,145

66

36,212

1,617

37,829

951

－

－

542

－

1,493

－

1,493

－

1,493

254

¥ 1,019

¥

222

¥

－

Total

¥

1,273

¥

Total

－

¥

1,273

¥

269

107

2,414

16,597

1,568

20,957

Total

Other (*1)

568,654

¥

Total

2,650

17,304

1,413

21,720244,236

67,74180,297

224,547

4,314

621,137

Total

Other (*1)

599,417¥

Adjustment

Consolidated

602,696¥－¥ 602,696

900

22,620(22,620)－

4,179

625,317(22,620)602,696

3,279¥

14,244956

1,167

14,626

1,653

32,648(329)

32,319(909)

31,410150,150

28,02919,793

194,503

16,582

409,059

8,146

417,205

10,401

427,606

7,474
Amortization of105
goodwill
Investments inequity-method
2,358
investees
Increase in property,
plant and
12,460equipment andintangible assets
Outstanding balance910
of goodwill
Impairment loss on¥
139
fixed assets

182

249

10,817771

19,495325

19,8201,268

21,089

－

－

128

－

234

42

277

－

277

－

－

3,358

－

5,717

－

5,717

1,775

7,492

Notes to Consolidated
Financial
Statements(Unaudited)
188
255
19,2871,164
33,356426
33,782928

34,711

Nichirei Corporation and Consolidated Subsidiaries
For
March 31,－2021 and2022 325－ the years－ ended
5,464
6,375
¥

－

¥

－

¥

56

¥

－

¥

196

¥

－

6,700
¥

196

6,700

－

¥

－

¥

196

Processed
foods

Marineproducts

Meat andpoultry
products

Logistics

Real estate

Total

Other (*1)

Total

$1,992,999$ 552,760$ 634,317$ 1,693,017$ 23,703$ 4,896,797$ 26,793$ 4,923,590

2,234

640

21,654

141,368

11,546

177,443

7,353

1,995,233

553,400

655,971

1,834,385

35,2495,074,240

34,146

Adjustment$

Consolidated－$ 4,923,590

184,796(184,796)－

5,108,387(184,796)

4,923,590

16

Segment profit

116,365

7,817

9,539

119,485

13,509266,718(2,688)264,029(7,431)

256,597

Segment assets

1,226,617

228,977

161,698

1,588,954

135,465

3,341,712

66,5503,408,263

84,9703,493,233

61,061

1,492

2,037

88,371

6,300

159,2632,658

161,922

10,361

172,284

859

－

－

1,052

－

1,912

350

2,263

－

2,263

19,267－－27,438－46,705－46,705

14,50061,205

101,794

1,540

2,087

157,565

9,510

272,498

3,482

275,980

7,585

283,566

7,440

－

－

44,643－52,083

2,656

54,740－54,740

Other items:
Depreciation
Amortization of
goodwill
Investments inequity-method
investees
Increase in property,
plant andequipment andintangible assets
Outstanding balanceof goodwill
Impairment loss on
fixed assets

Adjustment

Consolidated¥－¥ 572,757

796

21,753(21,753)－
572,757¥

78¥

Segment assets

Total

572,757

4,103

273

2,901

$

1,138

$

$

－

$

462

$

－

$

1,601

$

－

$

1,601

$

－

$

1,601

(*1) “Other” represents operating segments not disclosed as reportable segments, which include biosciences business, humanresources and payroll-related services, tree planting management and cleaning services related to tree planting.

225,450

63,09584,099212,320

4,646

589,611

4,899

594,511(21,753)

Segment profit

17,167521

1,298

13,084

2,017

34,089(325)

33,764(814)

32,949Note 11: Subsequent Events

Segment assets

138,592

26,005

19,344

181,136

16,702

381,781

8,992

390,774

14,945405,719

Not applicable.

6,525

148

257

10,473712

18,117380

18,497

1,171

19,669

103

－

－

53

－

156

90

247

－

247

2,401

－

－

3,157

－

5,558

－

5,558

1,685

7,244

Other items:－¥

13,438322

110

19,9732,300

36,145

66

36,212

1,617

37,829

951

－

－

542

－

1,493

－

1,493

－

1,493

254

¥ 1,019

222

¥

－

¥

－

¥

32

¥

－

¥

¥

1,273

¥

－

¥

Data

15

Corporate Governance¥ 195,723¥

Sustainability¥ 81,685¥ 207,242

Business Strategy

Real estate¥ 62,987¥ 77,646

Business Portfolio
Medium-term Business Plan

Logistics¥ 225,180

Real estate¥ 67,663

Value Creation Story

Meat andpoultry
products

Logistics¥ 243,963

Segment profit

Sales:
External sales
Intercompany sales
and transfers

Year ended March 31, 2021 (Millions of yen)

Marineproducts

Meat andpoultry
products

Year ended March 31, 2022 (Thousands of U.S. dollars)

Reportable segment

Processed
foods

Marineproducts

Reportable segment(3) Sales, profit or loss, assets, liabilities and other items by reportable segment for the years ended March
31, 2021 and 2022 were summarized as follows:

Amortization of
goodwill
Investments inequity-method
investees
Increase in property,
plant andequipment andintangible assets
Outstanding balanceof goodwill
Impairment loss on
fixed assets¥

Processed
foods

Depreciation(2) The basis of measurement for sales, profit or loss, assets, liabilities and other items of reportablesegments
Accounting policies and methods used at operating segments are the same as those applied to theCompany. Profit or loss of reportable segments is equal to operating profit on the consolidated
statements of income. Intercompany sales and transfers are based on third-party transaction prices.
As described in Note 2: Change in Accounting Policy, the Group has applied the Revenue
Notes
to Consolidated
Financial
Statements(Unaudited)
Recognition
AccountingStandard and changes
the accounting
policy for revenue
recognition as well
NichireiandorConsolidated
Subsidiaries
as the basis of measurement
forCorporation
segment profit
loss. As a result,sales of “Marine products” and“Meat poultry products” Fordecreased¥5,208million($42,546
thousand)and ¥2,121 million ($17,333
the years
ended
March
31, 2021
and 2022
thousand), respectively, and sales and segment profit of “Logistics” increased ¥57 million ($472
thousand) for the current fiscal year compared to before applying the accounting standard.

Depreciation－

Other items:(1) General information about reportable segments
Reportable segments are components of the Company and its consolidated subsidiaries for which
separate financial information is available and whose operating results are regularly reviewed by theboard of directors to make decisions about resources to be allocated to the segments and to assess theirperformance. Reportable segments are determined by product and service as “Processed foods,”“Marine products,” “Meat and poultry products,” “Logistics,” and “Real estate.”
General information about the segments is as follows:(a) Processed foods: Production, processing and sales of frozen cooked foods, agricultural processed
foods, retort-pouch foods, wellness foods, acerola and packed ice(b) Marine products: Processing and sales of marine products(c) Meat and poultry products: Processing and sales of meat and poultry products, and breeding andsales of chicken(d) Logistics: Distribution/transportation services and distribution center functions, logistics
consulting, storage services, production and sales of ice, and construction work and planning(e) Real estate: Leasing of office buildings and parking lots and management of real estate

Total

¥

Management Strategy

Sales:
External sales
Intercompany sales
and transfers

Note 10: Segment Information¥

32

Reportable segment

Note: As described in Note 2: Change in Accounting Policy, the Group has applied the Revenue
Recognition Accounting Standard and follows the provisional treatment stipulated in the proviso of
Paragraph 84 of the Revenue Recognition Accounting Standard. As a result, net assets per sharedecreased ¥4.12 ($0.03) and net profit per share increased ¥0.30 ($0.00) for the current fiscal year.

3,077

¥

Year ended March 31, 2022 (Millions of yen)

Notes to Consolidated Financial Statements (Unaudited)

Sales:
External sales
Intercompany sales
and transfers

－

1,273

Year ended March 31, 2022 (Millions of yen)128

Reportable segment

Processed
foods

Marineproducts

Meat andpoultry
products

Nichirei Group Integrated Report 2022

Logistics

Real estate

Total

Other (*1)

Total

Adjustment

Consolidated

129

Data

Investor Information

Data

Company Information(As of March 31, 2022)

Essential Stock Information

Ratings

Total Number of Authorized Shares

360,000,000

Total Number of Outstanding Shares

134,007,795(including 4,522,808 treasury shares)

Share Unit

100 shares

Year-end Dividend Record Date

March 31

Interim Dividend Record Date

September 30

Number of Shareholders

23,648

Shareholder Register Administrator

Mizuho Trust & Banking Co., Ltd.

Annual General Shareholders Meeting

June

Auditors

Ernst & Young ShinNihon LLC

Rating Institution

RatingRating and Investment
Information, Inc. (R&I)

A+

Japan Credit Rating
Agency, Ltd. (JCR)

A+

Company Name

Nichirei Corporation

Established

December 1942*

Paid-in Capital

30,472 million yen

Head Office

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

Telephone[+81] 3-3248-2101 (Main)

Number of Employees(Consolidated)

15,296

Business Network

14 countries and regions (Domestic and overseas offices and subsidiaries)* Date of establishment of predecessor Teikoku Marine Products Control Company. Reorganized as Nippon Reizo Inc. in December 1945.

Composition of Shareholders
Shareholding
Ratio (%)

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

26,656

20.6

Custody Bank of Japan, Ltd. (Trust Account)

11,824

9.1

Nippon Life Insurance Company

5,744

4.4

Mizuho Bank, Ltd.

3,813

2.9

MUFG Bank, Ltd.

3,406

2.6

Nisshin Seifun Group Inc.

2,719

2.1

The Norinchukin Bank

2,675

2.1

The Dai-ichi Life Insurance Company, Ltd.

2,323

1.8

Fukoku Mutual Life Insurance Company

2,050

1.6

SUMITOMO LIFE INSURANCE COMPANY

1,855

1.4

Shareholder Name

Individuals and Others

14.6%

Financial
Institutions

54.7%

18.7%

Inclusion in Indexes

Securities Companies

2.5%

Note: “Individuals and Others” includes “Treasury Stock(4,522 thousand).”

TOPIX

TOPIX Foods

Trading volume (Thousands of shares)(Index)The MSCI Indexes are the exclusive property of MSCI. MSCI and the MSCI Index
names and logos are trademarks or service marks of MSCI or its affiliates.

1,000

100,000

Share Price Performance (TSR)

Sompo Sustainability Index

3 Years
5 Years
10 Years
Cumulative Annual Cumulative Annual Cumulative Annual

Nichirei-15.1%

-8.0%

-2.7%

-6.6%

-1.4%

246.0%

13.2%

TOPIX

2.0%

31.2%

9.5%

44.3%

7.6%

183.3%

11.0%

TOPIX Foods

0.6%

-3.2%

-1.1%

1.4%

0.3%

131.0%

8.7%

800

600

Recognition for Employee Health Management/
Safety and Health Management

Other

Note: Annual figures are the geometric mean of cumulative returns.

40,000400

20,000200

2012/3

Also selected in FY2022 for the JPX-Nikkei
400, jointly developed by Japan ExchangeGroup, Inc. (JPX) and Nikkei Inc.

0
2013/3

2014/3

2015/3

2016/32017/3

2018/3

Notes:
1. March 31, 2012 closing prices for Nichirei and TOPIX are indexed at 100.
2. TSR is based on a holding period to March 31, 2022.
* The sum of capital gains and dividends, representing the total yield on a shareholder’s investment.

130

Certified as an Excellent
Occupational Safety and HealthEnterprise by the Ministry of Health,Labour and Welfare.

2019/32020/32021/32022/3

Selected from 2013 through 2022

Data

0

Recognized by the Ministry of Economy, Trade and Industry
under the Certified Health & Productivity Management
Organization Recognition Program under the large enterprise
category for six consecutive years.

Corporate Governance

1 Year

80,00060,000The inclusion of Nichirei in any MSCI Index, and the use of MSCI logos, trademarks,
service marks or index names herein, do not constitute a sponsorship,endorsement or promotion of Nichirei by MSCI or any of its affiliates.

2022

Sustainability

Disclaimer:

Total Shareholder Return (TSR)*
Nichirei

Continuing Adoption as a Constituent Stock of All FiveESG Indexes (Domestic Stocks) Selected by theGovernment Pension Investment Fund

Other JapaneseCompanies 9.5%

Note: Shareholding ratio calculated after subtracting repurchased stock (4,522 thousand
treasury shares). Rounded off to the first decimal place.

(Thousands of shares)

External Review

ForeignInvestors

Business Strategy

Number of
Shares Held(Thousands)

Business Portfolio
Medium-term Business Plan

Major Shareholders

Value Creation Story

Tokyo Stock Exchange(Prime Market) Securities code: 2871

Corporate DataManagement Strategy

Stock Exchange Listing(As of March 31, 2022)

Period of certification:
July 2021 to June 2024

Nichirei Group Integrated Report 2022

131

Global Network(As of May 31, 2022)○ Shandong Nichirei (Yantai) Foods Co., Ltd.
○ Taian Jiayu Foodstuff Co., Ltd.
△ Nichirei Fresh Dalian Co., Ltd. Qingdao Branch□ Kevin Hancock Limited△ RIZHAO MAI LENG FOOD TRADING COMPANY LIMITED○ Nichirei Foods U.S.A., Inc.
○ InnovAsian Cuisine Enterprises Inc.
○△ Nichirei U.S.A., LLC△ Nichirei Seafoods, Inc.

● Mori Plant● Shanghai Representative Office□ Thermotraffic UK Ltd.

○ Nichirei Corporation Shanghai Ltd.

Rotterdam (The Netherlands)
Newark(England)Versmold (Germany)
London Gateway
Znin (Poland)(England)Ruda Śląska (Poland)
Bury St. Edmunds(England)
Carpiquet(France)□ Shanghai Fresh Line Express Co., Ltd. (4)□ Nichirei Logistics Holding (Shanghai) Co., Ltd.

Ho Chi Minh City
(Vietnam)Tienzan(Vietnam)△ Nichirei Fresh Dalian Co., Ltd.

Bình Thuân(Vietnam)

Dalian (China)

Shandong(China)Jiangsu(China)□ Frigo Logistics Sp. z o.o. (5)Samutprakarn(Thailand)□ Thermotraffic GmbH (15)△ Fresh Maruichi Corporation (3)□ Jiangsu Freshline Logistics Co., Ltd.
□ Nanjing Freshline Logistics Co., Ltd. (2)◇ Pathcom Systems Corporation● Funabashi Plant● Funabashi No. 2 Plant● Funabashi No. 3 Plant△ Nichirei Fresh Hong Kong, Limited

Selangor(Malaysia)○ Nichirei★● Nichirei Group Technology Development Center

Australia Pty. Ltd.

Petrolina(Brazil)
Sapporo○ Nichirei do Brasil Agricola Ltda.

Mori□ Transports Godfroy S.A.S.
□ Entrepots Godfroy S.A.S. (3)Sydney(Australia)△ Trans Pacific Seafood Co., Ltd.

● Shiroishi Plant△ Nichirei Fresh Vietnam Co., Ltd.
○ Surapon Nichirei Foods Co., Ltd. (2)○ GFPT Nichirei (Thailand) Company Limited○ Nichirei Suco Vietnam Co., Ltd.

Domestic Network□ NL Cold Chain Network (M) SDN BHD (3)△ FRESH MEAT SAKUDAIRA Inc.

☆ me:new Inc.

Nichirei Logistics Group Inc. …■

Nichirei Group companies …☆

Nichirei Foods Group companies …○

Nichirei Logistics Group companies …□

Takatsuki○ Kyurei Inc.
Omura

Nichirei Fresh Group companies …△

Nichirei Biosciences Group companies …◇

Note: Figures in parentheses indicate number of facilities.

132▲ Higashi-Nippon Branch (3)□ Kyokurei Inc. (3)Munakata□ Kyokurei Operation Inc.

Fukuoka△ Nichirei Fresh Process Inc. (2)● Kyushu Branch

Kagoshima

Miyazaki○ NICHIREI WELLDINING Inc.

□ Nichirei Logistics Kyushu, Inc. (14)○ NICHIREI AGRICULTURE Inc.
○ SHIN SUNFOOD INDUSTRY CO., LTD.

● Kansai Branch● Kansai No. 2 Plant□ Nichirei Logistics
Kansai, Inc. (13)□ Osaka Nichirei
Service Inc.
▲ Nishi-Nippon Branch (3)● Chubu Branch

Data

Nichirei Biosciences Inc. …◆

Funabashi

Chiba
Toyoyama Yokohama Tokyo
Nagoya■ Nichirei Logistics Group Inc.
□ Logistics Network Inc. (46)□ NK Trans Inc. (9)□ Tokyo Nichirei Service Inc.
□ Nichirei Logistics Engineering Inc. (11)□ Nichirei Logistics Kanto, Inc. (8)□ Tokyo Industrial Complex Storage Inc.

★◆ Global Innovation Center□ Kyushu Nichirei Service Inc.
Nichirei Fresh Inc. … ▲Saitama● Metropolitan Branch○ Nichirei Ice Inc. (4)Corporate GovernanceNichirei Foods Inc. …●

Iwaki
Saku

Okayama Osaka
Hiroshima
Shimonoseki○ CHUREI Co., Ltd.

Nichirei Corporation …★

Shiroishi

Sayama□ Nichirei Logistics Chushikoku, Inc. (12)□ Chushikoku Nichirei Service Inc.

● Nagasaki Plant

SendaiTendo● Kanto Shinetsu Branch● Chushikoku Branch

At present, the Nichirei Group conducts business in 14 countries
and regions around the world.

◆ Nichirei Biosciences Inc.

● Yamagata Plant

Sustainability●▲ Bangkok Representative Office□ SCG Nichirei Logistics Co., Ltd.

Karumai
Hirono★ Nichirei Corporation★ Nichirei Training Center ( Sukore Yukigaya )☆ New Housing Inc.
☆ Nichirei Business Partners Inc.
☆ Nichirei Aura Inc.
☆ Imperial Hotel Kitchen Corporation☆ Hitachi Foods & Logistics Systems Inc.
● Nichirei Foods Inc.
▲ Nichirei Fresh Inc.

Business Strategy□ Nichirei Holding Holland B.V.
□ Eurofrigo B.V. (5)□ Hiwa Rotterdam Port Cold Stores B.V.
□ TThermotraffic Holland B.V. (3)Chon Buri(Thailand)● Tohoku Branch□ Nichirei Logistics Tohoku, Inc. (4)□ Tohoku Nichirei Service Inc.

San Francisco (United States)

Shanghai (China)

Hong Kong
Bangkok (Thailand)△ Nichirei Fresh Farm Inc. (2)Business Portfolio
Medium-term Business Plan

□ Armir Logistyka Sp. z o.o. (4)□ Armir Dystrybucja Sp. z o.o.

△ Fresh Chicken Karumai Inc.
Seattle (United States)

Value Creation Story● Hokkaido Branch□ Nichirei Logistics Hokkaido, Inc. (7)□ Sapporo Nichirei Service Inc.

○ Nichirei Enterprise Management Consulting (Shanghai) Co., Ltd.

□ Norish Limited (6)Management Strategy☆ Jinzhu (Yantai) Food Research and Development● Yantai Representative Office□ Nichirei Logistics Tokai, Inc. (11)□ Nagoya Nichirei Service Inc.
● Kansai Plant

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133