Nichirei Group Integrated Report 2020

Nichirei
Nichirei
Group
Group
Integrated
Integrated
ReportReport2020
2020

Nichirei Management Principles
Mission

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

Guiding Principles

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

Brand Slogan

Creating Savory Moments

Basic CSR Policy

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

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

Provide safe products
and services
We ensure that everything
we offer our customers ischaracterized by high quality
and safety.

Maintain a sustainablesupply chain
We work to ensure that our
supply chain is sustainable.

Reduce environmental
impactWe strive to reduce theenvironmental impact of ouroperations, while giving fullconsideration to theirpotential effects on the
global environment.

Foster cooperative
relations with
communities
As a responsible corporate
citizen, we foster close
cooperation with local
communities in the interestsof the public good.

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

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

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

1Index1
3
5
7Management Strategy
915

Business Strategy
Medium-term Business Plan WeWill 2021
Message from the CFO
Processed Foods Business
Temperature-controlled Logistics Business
Marine, Meat and Poultry Products Business
Bioscience BusinessBusiness Strategy: Overseas

45
47
49
51
53
55

Stakeholder Engagement
Supporting the Food Supply Chain

Financial Data
77
79
81
82
83
85

11-year Financial Highlights
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statementsof Comprehensive Income
Consolidated Statementsof Changes in Net Assets
Consolidated Statements of Cash Flows

Investor Information/
Corporate Information
95
96
97

Investor Information
Company Information
Global Network

Topics57
59

On the Environment and Climate Change
Water Risk, Biodiversity, Using Less Plastic
Food and Health: Creating New Value
New Technologies Improve Efficiency
Building of Sustainable Supply Chains
Improving Work Satisfaction,
Cultivating Human Assets
Occupational Health and Safety
Providing Safe Products and Services

73
75

Reporting Companies

The Nichirei Group considers the Nichirei Group Integrated Report 2020
to be an important tool for communicating with shareholders, investors
and all of our stakeholders. We aim to communicate financial
information, non-financial information and business strategies in aneasily understandable way in order to facilitate a systematic
understanding of Nichirei's corporate value and ideal state.
We hope readers also develop an understanding with regard to ourefforts toward achieving sustainable growth, enhancing corporate value
and resolving social issues through our business activities.

Nichirei Corporation and its consolidated
subsidiaries in Japan and overseasStatements in this report pertaining to future business performance andso on consist of rational judgments based on currently available
information and contain a degree of uncertainty. Actual businessperformance may differ due to a variety of factors in the future.

(As of March 31, 2020)

Reporting Period
April 1, 2019 – March 31, 2020

(Some information from outside of this period is included)

Investor Information/
Corporate Information

Notes about Future Prospects

Financial Data

Editorial Policy

Amounts and percentages are rounded off.

Corporate GovernanceInitiatives to Resolve Social Issues

Topics

Initiatives to Resolve
Social Issues

29
31
35
37
39
41
43

Message from the Chairman
Message from the Outside Directors
Corporate GovernanceDirectors, Auditors and Officers
ProfileBusiness Strategy

21
25
27

Message from the President
Nichirei Group Materiality
Determination Process
Climate Change Initiatives
Creating Innovation
Value Creation Process

61
63
65
69
71

Management Strategy

Nichirei Management Principles
Nichirei’s History
Business Overview
Nichirei Group Comprehensive Capabilities
in Mass Retailers

Corporate GovernanceGroup Overview

Group Overview

Referenced Guidelines• GRI Standards• IIRC (International Integrated Reporting Council）• TCFD (Task Force on Climate-related
Financial Disclosures)
Issue Date

September 20202

Group Overview

Nichirei’s History
Nichirei was established to provide a safe and reliable supply of food products during the postwar era, when food shortages
were a serious problem. It has steadily grown while developing a variety of businesses to support Japan’s dietary habits.
We 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.

1940s to 1950s

1960s to 1970s

Launched Nichirei Group businesspromoting diversification

1942

Group’shistory

1980s to 1990s

Expanded business based on refrigeration
Expanded logistics network

Established Nichirei brand
Promoting business internationalization

1945

1985

Established Nippon
Reizo Inc. as a
private company

Established Teikoku
Marine Products
Control Company

sales of1946 Launched
Reika ice candy

1952

Launched sales offrozen tempura set

1954

Launched sales of frozen
chawan-mushi(savory egg custard)
Cooked frozen
foods pioneer

1955

Changed company
name to Nichirei

1960

into the1982 Expanded
biotechnology field

Established Kamagaya
Laboratory for researchon agricultural andlivestock products(establishment of arotating poultry house)

1987

Created acerola
drink, currently soldby SUNTORYFOODS LIMITED1963

Developed long-distancefrozen cargo vehicles
Created logistics network, contributing
to “cold chain plan” spearheaded by
the government

Launched at-sea
exportation of marine
products

1970

Created Terrace Nichirei
cafeteria for the Japan
World Exposition (Osaka)

1988

Launched logistics
business in Europe

1956

1943

Launched meat andpoultry business

Fishery company regulations,established marine products
business and ice-making, cold
storage and freezing business

1956

1964

Provided frozen foodto Antarctic
expedition teamContributed to the Tokyo Olympic Games
Provided large amounts of various frozen foodsin the Olympic village

1974

Launched Green Belt
brand frozen family
dinner series

Trends in Net Sales
Net Sales

1942

3

1950

1960

1970

1980

Group Overview

2000s to present

2000

Enhanced quality assurance systemtransfer center
1990 Launched
operation

Converted to aholding company
structure

2019

� Establishment of the Nichirei Group Human Rights Policy
� Revision of the Nichirei Management Principles and Formulation of Long-term Management
Goals toward 2030
� Revised remuneration system for Directors (excluding Outside Directors) and Executive Officers
� Revision of the Basic Policy on Corporate Governance (Revisions to capital policy and otherprotocols and adjustments to maximum terms of office for Outside Audit＆ Supervisory Board Members）
� Certified as a Sports Yell Company and a Tokyo Sports Promotion Company in FY2020
� Selected for the 2020 Health & Productivity Stock Selection

2007

Established directly managed poultry farm

Started raising Junwakei chickens in Hirono Town,
Iwate Prefecture

Launched sales of Shin·Renji-Seikatsu,
one of the first microwaveable frozen
food products

Established biosciencebusiness base for research,development and production

Established fully integrated plant forprocessed chicken products in Thailand

Launched logistics business inThailand

2011

2019

Corporate Governance2013
Launched sales offrozen food
Honkaku-Itame
Cha-Han (fried rice)for home use

Full-scale operation of food plant
optimal production and personnel
planning automated formulation system

2008

Global Innovation Center

2001

2019

Initiatives to Resolve
Social Issues

1994

2019

Business Strategy

Enhanced management system and quality
assurance in the wake of problems with
agricultural chemicals residue in China-produced frozen vegetables and other issues

2005Management Strategy

Creating new customer value
Aiming for further growth

Held a briefing session forrecruiting of joint research andco-creation partners

2019Constructed high-performancelarge refrigerated warehouses

Support for victims and regions
damaged by typhoon No. 19
in 2019

Introduced a seismic isolation
system and other industry-leading
technologies(Billions of yen)

600
Topics500

Financial Data

400

300

Investor Information/
Corporate Information

200

100

1990

2000

2010

2019

0

4

Group Overview

Business Overview
Group Overall

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

The Nichirei Group is expanding its business initiatives in areas, including marine, meat and poultry products; bioscience; and real estate.
Its main focus, however, is on processed foods and logistics.
Each of the companies under the holding company—responsible for overall Group strategy—aims to create new value for customers
through the flexible conduct of business and by planning to raise corporate value over the medium-to-long term.

Net Sales Distribution Ratio*

Operating Profit Distribution Ratio*

FY2020

FY2020Logistics

Processed Foods

34.1 %

38.7 %

Logistics

Processed Foods

37.4 %

52.9 %

Operating profit

Net sales

584.9
billion yen

Marine,Meat and Poultry
Products

25.5 %(Marine Products

0.8 %Others10.9

Meat and Poultry Products

0.9 %

%,

14.6 )

31.0

Real Estatebillion yen

Marine,Meat and Poultry
Products

4.3 %(Marine Products

Real Estate

1.4

%,

Meat and Poultry Products

%

6.3 %

2.9 )
%

Others-0.9 %* Monetary amounts and percentages have been rounded

Processed Foods

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

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

Sales Ranking of Frozen Foods Manufacturers

Breakdown of Sales in the Processed Foods Business*
FY2020

FY2020RankingCompany

Net sales(billions of yen)

1

Nichirei

229.6

2

Ajinomoto

211.2

3

Nippon Suisan

193.4

4

Maruha-Nichiro

179.8

5

TableMark

108.0

Source: From a July 12, 2019 article in the Reishoku Nippo,
which is published by Shokuhin Sangyo Shimbunsha Co., Ltd.

5

1

No.

Others6.7 %Prepared Frozen Foods(Commercial-use)

Overseas42.4 %

14.8 %

in Japan

Processed
Agricultural Products

PreparedFrozen Foods(Household-use)

8.4 %* Does not include eliminations within subsegments.

27.6 %

Group Overview

Logistics
Top Company Ranking in Terms of Cold Storage Capacity

Description of Business

Others/Intersegments

1.7 %Overseas18.2 %
31.2 %

48.9 %* Does not include eliminations within subsegments.

Nichirei Logistics Group

2

1,490

10

Yokohama Reito

880

6

3

Maruha-Nichiro

660

4

4

Toyo Suisan

540

4

5

Chilled & Frozen Logistics
Holdings

5003Note: As of April 2019
Source: Compiled by Nichirei based on Japan Association of Refrigerated
Warehouses documents

Top Ten Companies Worldwide
Ranking Company/Group Name

6

No.

worldwide

Capacity(thousands of tons)

Main Countries
of Business1

Lineage Logistics

17,040

USA, etc.

2Americold Logistics

13,120

USA, etc.

3

United States Cold Storage

4,210

USA, etc.

4

AGRO Merchants Group, LLC

3,100

USA, etc.

5

NewCold Advanced Cold Logistics

2,200 Netherlands, etc.

6

Nichirei Logistics Group

2,160

7

Kloosterboer

1,940 Netherlands, etc.

8

VersaCold Logistics Services

1,390

9

Interstate Warehousing, Inc.

1,310

USA

10

Frialsa Frigorificos

1,200

MexicoJapan, etc.

CanadaNote: As of April 2020
Source: Compiled by Nichirei based on International Association of Refrigerated
Warehouses document “Global Top 25 List”

Bioscience
Description of BusinessWe promote the development of premium marine, meat and poultry
products by utilizing our global procurement abilities and emphasizing
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.

We provide high-quality products and services in order tocontribute to the physical and mental health of as many people
as possible through biotechnology and we are highly engaged in
the cell biotechnology field and the functional material field thatutilizes the Nichirei Group’s material procurement capabilities.

Financial Data

Description of Business

TopicsMarine, Meat and Poultry Products

in Japan1

Corporate Governance

Logistics
Network

Regional
Storage

1

No.

Capacity(thousands of tons) Share (%)

Company/Group Name

Initiatives to Resolve
Social Issues

FY2020Ranking

Business Strategy

Breakdown of Sales in the Logistics Business*

Top 5 Companies in Japan

Management Strategy

We are the largest domestic temperature-controlled logistics group.
Our business comprises a logistics network, focused on transportationand delivery; a regional storage business responsible for our
refrigerated warehouses functions; an overseas business sectionthat handles operations in Europe, China, Thailand and Malaysia; andengineering services, which are responsible for matters fromtemperature-controlled logistics facility planning and design tomaintenance management.
Throughout our supply chain, we provide high-quality service,including transportation and delivery, storage and processing.
All parts of our supply
chain are linked by anadvanced logistics
information system tothe design, construction
and maintenance oflogistics centers.

Investor Information/
Corporate Information

Real Estate
We rent and manage office building space to make the most ofcompany-owned land.

6Group Overview

Nichirei Group Comprehensive Capabilities
in Mass Retailers
In addition to providing household-use and commercial-use frozen foods and raw materials for fisheries, livestock, and poultry, Nichirei mainly
focuses on business areas that support eating habits, such as temperature-controlled logistics, which handles the storage and delivery of foods.
For mass retailers, who constitute our main customers, we provide products to various sales floors, such as fresh foods, delicatessen
and frozen foods, while enhancing efforts throughout the Group, such as conducting store delivery operations by region, in an effort to build
long-term relationships of trust.
Example of mass retailer sales floor development
Delicatessen backyard

Meat backyard

Delicatessen

Daily deliveries

Meat

Beverages

Meat

Accountant

Meat

Daily deliveries

Processed meat

Meat

Truck
serviceentrance

Frozen foods

Fish
Fish

GroceryFish

Grocery

Grocery

Fish

Processed Foods BusinessSushi and sashimi

Sushi
and
sashimiFishbackyard

Fish

Industry-leading sales

Household-use frozen foods and commercial-use
frozen foods for delicatessen sales area
Household-use

Marketingresearch

Product
development

Commercial-use

7

Commercialization

Sales
negotiation

Sales promotion
activities

・TV commercials,
Posters, Campaigns,
etc.

Customerfeedback

Sales among major
food logistics
companies

Temperature-controlled
Logistics Business

Sales ratio outside
the Nichirei Group92%

Industry top class

Domestic vehicles inoperation: Approximately

7,000Group Overview

Providing optimal logistics services
customized exclusively for customers
24-hours per day, 365 days per yearTo
storesDaily
deliveries

Management Strategy

Delivery of daily delivery products
Daily delivery productmanufacturers
Our logistics
center for daily
delivery products(contracted
operations)

Business Strategy

Deliveries from manufacturers areconcentrated in centers. Products are
sorted for each store delivery destination

Daily delivery productmanufacturers

Frozen products distribution
To
storesFrozenproducts

million tonnesof refrigerated
warehouse capacity

Food manufacturers

Corporate GovernanceRefrigerated warehouses

1.48

Pursuing safe and high-quality
temperature-controlled logistics services

Frozen foods
distribution

Storage offishery, livestock,
poultry, produce,
and frozen foods

Initiatives to Resolve
Social Issues

From throughout Japan to eachdelivery destination

Industry’s top

refrigerated warehousestorage capacity

Trunk Line Transport
Collection and distribution
from each region

Marine Products, Meat and Poultry BusinessFoodprocurement
Mass retailer
headquarters

Investor Information/
Corporate Information

Processing Center (meat processing plant)
management = meat processing alternative

Sell the best materials procured
through our own global network

Financial Data

To stores

TopicsHigh quality assurance capabilities
Product proposals using Nichirei
Fresh materials

8Management Strategy
Message from the President

9Group Overview
Management Strategy

Resolving Social Issues,
Eyeing Further GrowthBusiness Strategy

On December 1, 2020, we will celebrate Nichirei’s 75th anniversary. And as I recall
now, when I was appointed president, I announced our aim to be a Company that
continues to do business for the next 100 years.
long-term management goals toward 2030, and launched the new medium-termbusiness plan WeWill 2021. We have identified materiality for realizing our vision for2030, and have begun formulating measures and KPIs that need to be reflected in the

Corporate Governancenext medium-term business plan.

Initiatives to Resolve
Social Issues

In fiscal 2020, we formulated what might be called a milestone in terms of

Nichirei Group business activities involve a wide range of food which, by its very
nature, brings with it a great social responsibility that forms a strong connection
between the sustainable growth of the Company and the realization of a sustainable
society. For this reason, the Nichirei Group will incorporate in its management strategy
such approaches as will link business activities with the resolution of social issues.

TopicsAs we face society and take on challenges without fear of failure, we shallcontinue to support people’s good eating habits over the long term.

Financial Data

Kenya Okushi
Representative Director, President
Nichirei Corporation

Investor Information/
Corporate Information

Note: Coined word “WeWill” is the theme of Nichirei’s present medium-term business plan. It represents plan initiatives and our strong intention tocreate our own future.

10

Management Strategy
Message from the President

Results and Issues in the First Year of WeWill 2021
In the food industry, lifestyle changes continue to drive the externalization of food. Although theready-made meal market has expanded, factors such as soaring labor, distribution, and raw material
costs have caused increasingly severe hikes in expenses. In the area of food distribution, as labor
shortages become more prominent, efforts to develop technologies and introduce equipment to savelabor are accelerating.
Amid these conditions, in the first year of the medium-term business plan WeWill 2021, theNichirei Group is working on measures, focused on our core businesses, that are aimed at realizing
the creation of new value to support good eating habits and health.
In the processed foods business, enhanced sales promotion efforts, including televisioncommercials broadcast throughout the fiscal year, resulted in favorable sales of cooked rice andprocessed chicken products, which are the mainstay categories of household-use frozen food.
In the logistics business, we were able to absorb cost increases stemming from labor shortages
and other issues by improving operational efficiency and charging appropriately, while at the sametime the amount of goods handled increased.
As a result, with the core processed foods and logistics businesses driving Group performance,
net sales reached ¥584.9 billion, up 0.8 % year on year. By the same comparison, operating profit
rose 5.2 % to ¥31.0 billion, while ordinary profit increased 6.4 % to ¥31.8 billion.
Loss on retirement of fixed assets due to equipment upgrades and increased removal costs
resulted in a 1.7 % year-on-year decline to ¥19.6 billion in the profit attributable to owners of the parent.
With regard to capital investment, as demand was stronger than expected in our main business,
we were unable to suspend production, and we had to postpone equipment upgrades due to highlevels of operation at production plants. Bearing in mind the importance to our growth of capital
investment, we will reorganize our plan for such outlays in fiscal 2021.
In addition, while we recognize that expanding overseas business is important, we also
acknowledge that, as a result, business alliances and M&A may be affected by negotiations withpartner companies, and so shall make the necessary adjustments to our plans starting in the second
year of WeWill 2021.

COVID-19 Brings a New Perspective
The social and economic environment has been undergoing drastic changes, due to the spread of
the COVID-19 virus since March 2020. The Group has set up a countermeasures headquarters, as itplaces the highest priority on the health and safety of our employees and, in line with our social
responsibility, is continuing its business activities to help prevent food shortages.
Demand for home-cooked and ready-made meals has increased as consumers refrain fromdining out to avoid infection, although demand for commercial-use products in the food service
industry has decreased significantly. We thus will continue to promote business that prioritizes thehealth and safety of our employees and respond as appropriate to customers facing difficulties.
In addition, I believe that what we eat is changing, and will become even more varied after
COVID-19. Rather than simply going back to the way things were, markets will be created that are
different from anything we have known up to now. And should some players create their own
markets, that would be a chance to generate new business opportunities.
In such an environment, it is important to acquire the macro information necessary for
management decisions, as well as to understand the micro changes perceived by those working in
the field, and quickly to incorporate both in our business activities.

11

Group Overview

With the transition made to telework during the COVID-19 pandemic, I have come to realize thesignificant potential of communication tools. I am confident that it will become easier toexchange information in real time, while sharing information and collaborating with a sense ofurgency will lead to the rapid delivery of new and abundant dietary items.
The spread of the pandemic also has provided us with an opportunity to reassess risks.
Assuming disasters such as massive earthquakes and recent typhoons and heavy rains to berisks that hinder business continuity, we created business continuity plans (BCP) in recognitionof the need to respond to each scenario. Also clear is the need to develop measures to counter
infectious diseases such as COVID-19.
Based on recent experience, the Group will improve its BCP so as to be ready in the eventof an outbreak of another infectious disease. It is important to anticipate change and adequately
estimate risks when planning, ahead of new threats requiring us to employ a BCP.

Management Strategy

Creating New Customer ValueBusiness Strategy
Initiatives to Resolve
Social Issues
Corporate GovernanceIn the second year of WeWill 2021, the focus will be on creating systems and mechanisms toprovide new value that will become the foundation of Group growth.
In 2017, Nichirei set up a body within its Strategic Planning department tasked with creating new
business by exploring business models not bound by existing business areas or ways of thinking.
As a next step, we have begun to develop an innovation management system (IMS), in
accordance with ISO 56002, intended to verify and evaluate the creation of a wider variety ofbusinesses. The existing Business Innovation Group merged with the Technology Management
Department, which oversees IMS, enabling them to work together.
With the new system in place, the Nichirei Group will be better able to discover and nurture
new businesses from a long-term perspective. The system will increase our opportunities toutilize and support good ideas, focus our efforts on meeting challenges, and increase theaccuracy of commercialization.

TopicsFinancial Data
Investor Information/
Corporate Information
12

Management Strategy
Message from the President

Identifying Materiality
In June 2020, the Nichirei Group identified five material matters for implementing a management
strategy that captures business opportunities and risks in order to achieve the long-term management
goals sought by 2030.

Nichirei Group
Materiality

Creating value in food and healthStrengthening food processing and production technology capabilities;
enhancing logistics services
Realizing sustainable food procurement and resources recycling
Climate change initiatives
Securing and developing a diverse array of human resources

The Nichirei Group, being in the food provision business, is intimately connected to society. We
recognize that our business activities affect the lives of our stakeholders and society, and that we thus
have tremendous social responsibility. This is the reason we believe that building relationships of trustwith our stakeholders is essential and so, in 2017, we formulated our CSR basic policy, The Nichirei
Pledge: Working to Make Our Communities More Sustainable.
Our purpose is to realize a sustainable society and the sustainable development of the Company.
To ensure the links between business activities and the resolution of social issues are firm, we havedetermined it necessary to identify material matters and incorporate them into our business strategy.
All officers, including outside directors, participate in the identification process. We positionbusiness opportunities and risks as being proactive or reactive, and identify material matters from both
perspectives. For proactive material matters, we provided all office holders with a questionnairesummarizing “social needs” and “affinity with business and willingness to execute.” From this wecreated a rough draft.
Throughout this process, I realized that, as we resolve social issues, the Company will grow. While
we can imagine growth in some areas, we are also aware of the potentially negative impact on
corporate value of maintaining the status quo. However, I believe the successful management ofnegative issues can render them an opportunity to enhance corporate value.
Outside officers with insights in various fields have expressed opinions based on diverse values.
One officer even asked: “In terms of resource recycling, can the business of food provision be describedas stable and secure?”
We spent a considerable amount of time narrowing down our rough draft of proactive andreactive material matters. In our discussions, we were guided by our mission, vision, and the Nichirei
Pledge, as well as all the resulting efforts and achievements. This is where I thought Nichirei truly
distinguished itself.
We engaged in dialogues with experts concerning the rough draft, and the frank opinions
expressed resulted in new perspectives, ideas, and advice that was incorporated into the draft.
One of the material matters we identified is climate change initiatives. The impact of climate changeon the Group is significant, as we handle food products that are blessings of nature while, at the sametime, the energy consumed by our logistics and food manufacturing activities impacts the environment.
Based on recommendations made by the Task Force on Climate-related Financial Disclosures (TCFD),
the Group conducted scenario analyses and established Group environmental targets and measures
aimed at reducing CO2 emissions.
In June 2020, we announced our support for TCFD recommendations and participation in the
TCFD Consortium, steadily intending to promote climate change-related initiatives.
Further, we will proactively respond to food loss, which is becoming a social issue. As a food
manufacturer, we have already taken appropriate measures to dispose of waste at the production
stage, and are making progress in reducing the amount of waste generated.
In future, we will focus efforts on measures including the creation of ideal supply chains to “Realize
sustainable food procurement and resources recycling,” one of our material matters.
13

We 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.

Nichirei Group Materiality

The Nichirei Pledge● Promote innovations● Create new valuethat resolves issues
faced by customers
and society

Vision for FY2031¥1 trillion
8%■ Overseas sales ratio
30 %■ Net sales■ Operating profit / Net sales

Contribute to the good dietand health of all people.
Working Backwards
from 2030

FY2022
Reallocation ofmanagement resources

The Nichirei Group has adopted self-management basedon the Japan Quality Award, the premiere quality
management framework.
Upon analysis of current conditions and organizingchanges in the environment, each Nichirei business
identifies its “ideal form” over a medium- to long-term
timeframe and creates an organizational profile as amanagement strategy orientated toward realizing that form.
On this basis, Nichirei formulates its medium-term businessplans (currently spanning a three-year time period).

Corporate Governance• Realize sustainable profit growth(Japan: strengthen earnings base, Overseas: expand scale)• Improve capital efficiency and expand shareholder returns• Create new value that supports a good dietary life and healthOrganizational profile

Initiatives to Resolve
Social Issues

Long-term goals(measures and KPIs)

Next medium-termbusiness plan

FY2025The Medium-term Business Plan WeWill 2021

Business Strategy• Creating value in food and health• Strengthening food processing andproduction technology capabilities;
enhancing logistics services• Realizing sustainable food procurement andresources recycling• Climate change initiatives• Securing and developing a diverse array ofhuman resources

FY2028FY2020Management Strategy

VisionMission

Focus on Lifestyles,
and Provide True Satisfaction

Nichirei GroupCSR basic policyGroup Overview

The first action we can take as a Group is to design products and services. We will consider what
can be done with existing products, as well as incorporate environmental considerations into the designof new products and services.
Further, we can achieve differentiation by creating something with added value that is unique to Nichirei.
Creating products in this way can lead to initiatives by other supply chain companies, such as foodsuppliers and logistics companies. In the near future, I would like to proactively exchange opinions withrelated companies and take a series of steps aimed at reducing food loss.

Vision for 2030—and the Next 100 Years

TopicsFinancial Data
Investor Information/
Corporate Information

Human resources are the key to the Group’s goal of creating new value and resolving environmental andsocial issues. When systems and mechanisms are created, it is the employees who use and apply them.
Thus, it is essential to provide an environment in which each employee can devote themselves totheir work with a sense of purpose. At the same time, we will continue to promote work style reforms
and formulate Group goals (measures and KPIs) so that employees can take the initiative in tackling thefive material matters.
This presents the Company with an opportunity to create measures under a major theme and so,together with Group companies, we are currently considering how Nichirei’s unique aspects might be
expressed in 2030. Rather than relying on existing processes and measures, I believe my role is to drive
measures that are not merely extensions of current business activities.
This year, Nichirei celebrates its 75th anniversary; the year is also the centenary of the birth offrozen food in Japan. A hundred years ago, the value of frozen food lay in the fact that it could bedelivered far away from its source without sacrificing quality.
Today, we not only guarantee quality, but also make it possible to put an abundance of food on dining
tables in a limited amount of time, while at the same time supporting human health and healthy lifestyles.
In order for Nichirei to continue supporting people’s good eating habits over the long term, we must
respond flexibly and quickly to changes in consumer demand and society.
Nichirei, as an organization driven by the independent actions of each employee, creates new
customer value, conducts business activities, and helps resolve social issues.

14

Management Strategy

Nichirei Group Materiality
Determination Process
In June 2020, Nichirei identified five material matters fitting its concept of materiality
through which it would realize its vision regarding long-term management goals for2030. All officers, including outside directors, participated in the process.
Viewing rising expectations for the realization of a sustainable society as abusiness opportunity, Nichirei will work with stakeholders to resolve social issues
and enhance corporate value. To do so, we will continue to formulate goals
食と健康を支える広い領域で事業を展開するニチレイグループの強みを活かし、(measures and KPIs) that link Group strategies and business strategies.
以下の５つの重要事項（マテリアリティ）に取り組みますWe will leverage our strengths as we develop business in fields that support
good eating habits and health and work on the following five material matters.
Material matters

Group ideal mode

Creating value in food and healthCreate new markets and customer value by taking onchallenges outside existing business areas in both foodand healthStrengthening food processing andproduction technology capabilities;
enhancing logistics services

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

Realizing sustainable foodprocurement and resources
recycling

Resolving various social issues related to the supply
chain, which is the foundation of our business, andcontribute to sustainable food procurement and therealization of a recycling-based society

Climate change initiatives

As a food and logistics company that is greatly affectedby climate change, we will work with stakeholders tocounter global warming and reduce energy consumption
throughout the supply chain

Securing and developing diverse
human resources

Secure and develop a diverse array of human resources
and foster an inclusive corporate culture to achievesustainable growth

Nichirei will cultivate new business areas through innovation, further develop its core processed food and logistics businesses,
and strengthen material procurement, which is essential if the supply of commercial products is to be stable.
Because we have designated initiatives related to climate change as being material matters, we have endorsed the Task
Force on Climate-related Financial Disclosures (TCFD) and will apply this framework to our activities. In addition, to promotethese efforts we will incorporate and implement specific measures to develop a personnel system and corporate culture thatallow a range of human resources to play an active role.

15With the representative director and president responsible for
execution, two projects involving materiality and climatechange scenarios were implemented simultaneously between
September 2019 and June 2020. We conducted repeatedexaminations while linking information from both parties.
The project to formulate the materiality was led by the
executive officer who is the general manager of Strategic
Planning, and was examined by members of the Board of
Directors and all corporate officers, including executive officers.
The climate change scenario examination project was led
by the executive officer who is the director, and who serves as
the managing director in charge of the environment. This wasdone according to advice from experts and the framework
recommended by the TCFD. The reviews themselves wereconducted mainly with Technology Management staffers incharge of the environment, as well as each Group company’s
Strategic Planning department and the managers undertaking
environment-related activities.

Group Overview

Examination System
Relationship between Materiality andLong-term Management Goals toward 2030
Realization of the goals

Management Strategy

Realization economic and social value
Resolve social issues
New value creation and innovation

Food and healthBusiness Strategy

Diverse human resources
Food processing andproduction
Logistics

Sustainable food procurement andresources recycling

Initiatives to Resolve
Social Issues

Climate changes

Examination Schedule
Materiality Formulation and Climate Change Scenario Examination Project Grand Schedule

Materiality
analysis

Nov.

Dec.

FY 2021
Jan.

Feb.

Mar.

May

Jun.

1 Identification of stakeholders
2 Identification of social issues

3 Social issue criticality evaluation

June:
Make decision

4 Material matters mapping
October:First
discussion

Group
Strategy
Committee

November:
Seconddiscussion

November:Third
discussion

November:First
deliberations

5 Draft creation

7 Categorization/
Integration
February:
Seconddeliberations

・Materiality
・Risk identification
・Long-term lowcarbon measures

8 Finalization

Financial Data

December:
Dialog withexperts

Dialogue6 Dialogue with experts

TCFD
study group

Assess climatechange risks andopportunities

Examine key
drivers

Create scenariosand examine
business impacts

・Identify risks and opportunities
for each scenario
・Formulate Group long-term
low-carbon policies andindicators (proposed)

Investor Information/
Corporate Information

May: Proposals
and deliberations

Group
Environmental
Protection
Committee
Climate change
scenario
examination

Apr.

TopicsBoards of
Directors

September:project
kickoff

Oct.

Corporate Governance

FY 2020
Sep.

16

Management Strategy

Nichirei Group Materiality Determination Process
1 Identifying stakeholders

Since our business domain is food provision, we are aware of our tremendous social responsibility, being involved,
as we are, with many stakeholders and impacting their lives and society at large. For this reason, we have identified
stakeholders based on the size of their demand and the degree of impact we have on society.

2 Identifying social issues (risks and opportunities)

After pinpointing our stakeholders, we have identified social issues from future and global perspectives.

3 Evaluating social issue criticality

We then evaluated the importance of those social issues, based on the fact that proactive measures result inbusiness growth, and reactive ones prevent corporate value from being damaged.

4 Mapping material matters

We mapped material matters that would require proactive and reactive steps to be taken and, in November 2019,held initial deliberations on the details of mapping during the Nichirei Group Strategy Committee meeting, at which
we usually discuss overall management strategies.

Futuresocial issues

SDGs

Futureinvestment
strategy

Industryissues

TCFD（IPCC）

Past
projects

Addition of ESG index evaluation
items, global guidance andframeworks

ESG index(FTSE, MSCI, CDP, etc)

Affinity and intention
with management andbusiness

Size ofsocial needs

Evaluation fromperspective of affinity withbusiness and intention
with management

Future market size (= sizeof social needs: results ofexternal surveys) and sizeof social issues based on
future society inputs(management
questionnaires)(realizes businessgrowth)Reactive

ESG framework(SASB)

Material Most
matters material
matters
Material Material
matters matters

Affinity with management
and business

Proactive

Proactive

Reactive(prevents damage
to corporate value)

ESG guidance(ISO 26000, GRI standard)

Mapping material matters

Size of social needs

In addition to future social issues, we take
into account the results of considerations
such as the SDGs, future investment
strategies and past future forecast projects.

Evaluating social issue criticality

Importance toNichirei Group

Importance tostakeholders

Importance tostakeholders

Identification of social issues

Degree of importance of
Impact on business
management, future-oriented stakeholder demands ofNichireimanagement sustainability
perspective

Material Most
matters material
matters
Material Material
matters matters

Importance toNichirei Group

References: United Nations Global Compact, United Nations Guidelines for Business and Human Rights, OECD Guidelines for Multinational Enterprises, ILO, Japan SDGs
Action Plan 2019/2020, Ministry of Economy, Trade and Industry, TCFD Guidance, Society 5.0, etc.

5 Creating drafts

We created separate drafts for those issues that would require a proactive or reactive approach.

17

Group Overview

6 Dialog with experts

In December 2019, outside experts evaluated the validity of the drafts under consideration and exchanged opinionswith Company corporate officers, including the president.
■ Experts(Nichirei Corporation)members

Hidemi Tomita

Yumiko Murakami

Development Bank of Japan Inc.
Executive Officer, Deputy Chief Research Officer,
Chief Manager of Sustainability Management Office,Corporate Planning & Coordination Department

Lloyd's Register Japan K.K.
Director

Organisation for Economic Co-operation
and Development (OECD)
Head, Tokyo Center

Kunio Otani

Kenya Okushi

Takumi Taguchi

Yoshifumi Kaneko

Junji Kawasaki

Representative
Director, Chairman

Representative
Director, President

Director, Executive Officer,
in charge of Nichirei Groupplanning and management
division

Director, Executive Officer;
Representative Director,
President, Nichirei Fresh Inc.

Director, Executive Officer,
in charge of Nichirei Grouptechnology management
and quality assurance

Kazuhiko Umezawa

Masato Takenaga

Kazunori Miki (facilitator)

Director, Executive Officer;
Representative Director, President,
Nichirei Logistics Group Inc.

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

Executive Officer
General Manager,
Strategic Planning

Business Strategy

Masahiko Takenaga
Director, Executive Officer;
Representative Director,
President, Nichirei Foods Inc.

Management Strategy■ Nichirei Group

Keisuke Takegahara

Opinions of outside experts

Initiatives to Resolve
Social Issues■ Granularity of future measures
・ Efforts should be made, for example, to reduce CO2
emissions and switch to natural refrigerants to makedevelopmental leaps part of a long-term strategy.

■ Quality assurance

・ Perspectives should be divided into two groups: newmanagement-related goals and the means by which they
are to be achieved.
・ A way should be devised to apply global standards, suchas by using responsible business conduct as a guideline.

・ Quality and safety could be made the most importantmanagement issues.
・ This is currently a basic proactive item. However, should newrisks arise, quality assurance could be positioned as aproactive risk factor needed to strengthen quality control.

Financial Data

■ Ethics
・ There are still few Japanese companies making significant
efforts in business ethics, which fact could lead to acompetitive advantage for Nichirei.
・ An ethical angle is missing in marketing. We should convey
the message that Nichirei products are deliciousand ethical by world standards.

Topics■ Sustainability
・ Sustainable food production is linked to climate change
response (CO2 reduction) through expanding agricultural
productivity.
・ In maintaining temperature-controlled logistics, RE100
may be difficult. One should be aware of any linkage
among target items.
・ Since the food business is a high-risk industry, risks
should be broken down in a way that is tied to particularareas of business.

Corporate Governance■ Timeline to 2030

■ Distinctive aspects of Nichirei

Investor Information/
Corporate Information

・ The Company would benefit were its distinctive features put in avisual format. In addition to its processed foods, these features
would include important issues related to temperature-controlled
logistics, marine items, as well as meat and poultry products.
・ Given that the company is a cold chain leader, one should be
able to demonstrate distinctive aspects of Nichirei's temperaturecontrolled logistics within the TCFD framework. One might
consider sending out a message regarding CFC issues.

18

Management Strategy

Nichirei Group Materiality Determination Process
7 Integration and narrowing-down

Based on opinions received from experts, we integrated and narrowed down material matters as proactive or reactive.

8 Finalizing the draft

In February 2020, at the second Group Strategy Committee meeting, after repeated deliberation on both the validity
evaluation by experts and opinions on distinctive Nichirei features, agreement resulted in a draft containing fivematerial matters.

“Proactive” and “Reactive” material
matters draft formulation

High“Proactive”

Dialog withexperts

Climate change
risk response

Provide value related to foodSize of social needs

Provide value related to logistics

・Provide value related to logistics
・Improve logistics standards

Production and distribution ofsustainable food ingredients

Low

・Develop competitive human resources
・Promote innovation
・Build external collaborative relationships

Extremely
high“Reactive”

Affinity with management and businessmaterial matters draft
Resources
・Water resources ・Food loss
・Plastic
・Resources
・Pollution
・WasteClimate change
Quality and safety
Sustainableprocurement

Responsible marketing
As a “universal principle” forming
the basis of management, we willcontinue to work solemnly as before
・Compliance・Respect forhuman rights
・Environmental
management
・Corporate governance・Corruption
・Risk management
prevention
・Community

High

High

・Sustainable procurement
・Animal welfare
・Biodiversity

Human resources

・Occupational safety ・Health・Labor practices
・Human resource
development

Importance to Nichirei Group

Extremely
highDialog with experts

・Sustainable food production system
・Eliminate food loss

Low

Importance tostakeholders

Creating value infood and health・Respond to diversifying food needs
・Foods and services leading to long,
healthy lives
・Foods and services that alleviate poverty
・Provision of new food valueCompetitive human resources
and innovation

High

Finalizationmaterial matters draft

・Use of sustainableenergy・Respond to climatechange19

Categorization andintegration

Strengthening foodprocessing andproduction technology
capabilities; enhancing
logistics services

Realizingsustainable foodprocurement andresources recycling

Climate change
initiatives

Securing anddeveloping
diverse humanresources

Group Overview

Designation of Materiality

Management Strategy

In June 2020, five material matters were designated by the Board of Directors chaired by the Representative Director,
Chairman. Nichirei has set long-term Group goals for climate change initiatives, and will continue to consider long-term goals(measures and KPIs) for the other four material matters.
We are discussing the five material matters with Group companies and will incorporate them into each of their businessstrategies through the formulation of an organizational profile.

Ideas Inherent in the Materiality
Material matter

Ideas inherent in the materiality

Securing and developing
diverse human resources

Human resources are the Group’s most important management resource. In
addition to respecting human rights, fair labor practices and ensuring health andsafety, which are standard, Nichirei will promote the creation of workplaceenvironments in which human resources with diverse backgrounds can work. We
will also develop an organizational culture in which employees can demonstrate
their creativity through the development of human resource systems and thedevelopment of skills that will lead to the creation of new value and the resolutionof social issues.

Investor Information/
Corporate Information

Climate change initiatives

While the entire planet is required to take measures to prevent global warming, asa food and logistics company greatly affected by climate change, Nichirei will
accelerate efforts to reduce greenhouse gas emissions by setting long-term
environmental targets. We aim to reduce CO2 emissions 30% by 2030 comparedwith 2015 levels.

Financial Data

Sustainable food procurement efforts that take into consideration the environmentand human rights are the foundation of our business, and are directly linked to theprovision of customer value and to Group growth. This will also lead to the realizationof a recycling-oriented society that circulates resources as much as possible, and to
the strengthening of comprehensive business continuity management.

TopicsRealizing sustainable foodprocurement and resources
recycling

Corporate Governance

Expectations for frozen foods and temperature-controlled logistics are increasing interms of meeting diversifying food industry needs and resolving new social issues.
Through the utilization of new technologies such as AI, IoT and autonomous
driving, we will realize our core competence of enhancing food processing andproduction technologies, and advancing logistics services, to establish a solid
position in Japan and global markets.

Initiatives to Resolve
Social Issues

Strengthening food processing
and production technology
capabilities; enhancing
logistics services

Business Strategy

Creating value in food andhealthIn Japan—which constitutes Nichirei’s main market—changes are expected in the
future, including reduced consumption reflecting the population decline, diversifying
consumer needs, and the personalization of food and medical care. For the Groupto continue growing in this environment, while building on the core areas of foodand health, Nichirei will promote innovation and create new markets and customer
value without being bound by the framework of existing businesses.

20

Management Strategy

Climate Change Initiatives
Supporting TCFD Recommendations
The effects of climate change are becoming increasingly serious and being blamed for frequentabnormal weather patterns and natural disasters. Together, these factors are impacting the foodsupply chain, on which is based the value provided by the Nichirei Group.
We recognize the importance of appropriately responding to risks posed by shifts in theexternal environment caused by climate change. On top of that, we are considering and preparing
multiple scenarios in order to turn climate change into a business opportunity.
To this end, we are assessing climate change scenarios put forward by the Task Force on
Climate-related Financial Disclosures (TCFD), created by the Financial Stability Board (FSB), aninternational body that monitors and makes recommendations about the global financial system.
As a result, the measures we introduce are based on four aspects of the recommended
framework: governance, strategy, risk management, and metrics and targets. By conducting
appropriate disclosures of associated information, we hope to continue building a constructive
dialogue with our stakeholders.
It is in line with these ideas and because we support its recommendations that, in June 2020,
we announced our participation in the TCFD Consortium.

GovernanceIn October 2019, we began analyzing climate change scenarios as aninterdepartmental Group project, headed by the Representative Director,
President. Since Director, Executive Officer is responsible for implementing
climate change strategy, he leads the project and teams up withenvironmental personnel and joint project members from the Strategic
Planning department of both the holding company and Group companies
to discuss and evaluate risks and opportunities with reference to theUnited Nations Intergovernmental Panel on Climate Change’s (IPCC’s)
Fifth Assessment Report (AR5, the climate change scenario currently ineffect) and the Special Report on Global Warming of 1.5°C.
Through these activities, we identified the most important associatedrisks and opportunities based primarily on advice from outside experts.
In May this year, the Group Environmental Protection Committee,
which reviews environmental policies and action plans, made proposals
and conducted discussions concerning risks and corresponding
countermeasures.
The committee’s decisions were subsequently approved by the
Board of Directors in June and are reflected in our current management
strategy. The Group views climate change initiatives as one of thematerial matters in the achievement of its vision for long-term management
goals toward 2030.
In future, the director-cum-executive officer in charge will report at
least once a year on the progress of the initiatives at Board of Directors’
meetings. Relevant strategies, goals, and plans will be revised as
appropriate on the basis of the reports.

21

Project Organization
Project head

Representative Director,
President
Project for the establishment of materiality
Cooperation

Project for the analysisof climate change scenarios
Leader: Directors, Executive Officer
Responsible department: Technology Management

Departments participating in the project・ Technology Management,
Nichirei Corporation
・ Group Communication,
Nichirei Corporation
・ Strategic Planning, Nichirei Foods Inc.
・ Strategic Planning,
Nichirei Logistics Group Inc.
・ Strategic Planning, Nichirei Fresh Inc.
・ Strategic Planning,
Nichirei Biosciences Inc.

Group Overview

Strategy
Worldwide, the Nichirei Group is developing a range of food-centered businesses that it expects will be impacted by climate change.
Based on recent baseline scenario analyses of how climate change might affect our business activities, we hope to achieve a greater
understanding of the risks and opportunities that lie ahead and thus to incorporate appropriate responses into our management
strategy based on the following activities.

Management Strategy

1

Selecting Scenarios for Analysis; Developing a World View

This involves assessing the impact of climate-related risks and opportunities under the baseline (3–4°C)1 and the 1.5°C scenarios.2

1.5℃ Scenario (Socioeconomic Transition)

Storm surges; coastal flooding and rising sea levels;
flashfloods; abnormal weather patterns; extreme heat;torrential rainfall; drought; water shortages; anddeterioration in marine and terrestrial ecosystems

Decarbonization of energy; reduction of CO 2 emissions in demand sectors;
spreading electrification of technologies; achievement of zero real emissions by
2050; particular focus on CO 2 as a greenhouse gas; increase in renewableenergy-related investment; proper balance between sustainable development andthe environment; and the implementation of decarbonizing technologies

Notes: 1. IPCC AR5: Physical risks

2. IPCC Special Report on Global Warming of 1.5 °C: Transition risks

Assessment of Risk and Opportunity Materiality

The risks and opportunities associated with each scenario are identified and their materiality is evaluated based on their potential
impact1 (on sales in each business) and probability2 (the likelihood that a risk-bearing, climate-related event will occur).
Notes: 1. Degree of impact: This metric assesses the financial impact of businesses that are expected to incur impact from climate-related events.
2. Probability: In cases of physical risks, such as natural disasters, this metric assesses frequency of occurrence. In cases of transition risk, it measures the anticipated degree of risk.

Identification of Material Risks and Opportunities

Corporate Governance3

Initiatives to Resolve
Social Issues

2

Business Strategy

Baseline Scenario (Key Risks)

Based on assessments of materiality, material risks and opportunities associated with each business are selected, and from among
them those with a particularly large financial impact are identified as risks and opportunities facing the entire Nichirei Group.

General Low-carbon
Policies

Rising sea levels (Japan)(Business continuity risk
caused by factory flooding
and higher groundwatersalinity)

MediumGeneral abnormal weather(Decrease in sales and profit
caused by damage to factories andstorage warehouses anddisruptions to our logistic network)(Curtailment or suspensionof transactions due toinsufficient environmental
response)(Increase in raw material
procurement prices due tochanges in power sources)

Information disclosure

Electrification of technologies

Rise in temperature(Increased costs associated withthe mandatory disclosure of
information related to eco-friendly
products)(Increase in cost ofelectricity required tomaintain freezing
temperatures)(Rise in production factory
costs associated withchanges in powersources)● Physical events (baseline scenario)

Rise in temperature (Japan, North America and China)● Transitional events (1.5°C scenario)(Increase in food poisoning risks and decrease inopportunities for in-store purchasing)

Low(Increased purchaseprices for rice andchicken)Electrification of technologies,
conversion to renewable energy(Increased in
reputational risk for thefreezing business)

Small

Financial impact(Increased capital
expenditures in the reductionand elimination of CO2
emissions)

MediumHigh

Probability

Investor Information/
Corporate Information

・Indirect(outside the Company)
・Direct (the Company)

General abnormal weather

Environmental countermeasures
within the supply chain

Increased
environmental
awareness

Risks/opportunities(course ofoccurrence)

General low-carbon
policies(Japan and Thailand)

Financial Data

Businesses(Business continuity risk
caused by flooding of major
cities and roads, etc.)

We have identified general low-carbon (CO 2
emission reduction) policies in response to risks
and opportunities that have the highest levels ofmateriality for each of our businesses.

TopicsRegions(CO2 emission reduction)

Rising sea levels (Thailand)

Large

Climate-related
eventsDegree of impact

Matrix of material risks
and opportunities

22

Management Strategy

Climate Change Initiatives
Material Risks and Opportunities by BusinessBaseline scenario

Logistics

Common・Reductions in production
efficiency and volume andsubmerged aquafarms

Flooding,
rising sea
levels・ Submerged agriculture farms,
aquafarms and processing factories

Low-carbon
policies

・ Increased cost for measures forconverting to renewable energy
and equipment electrification,
elimination of emissions

Environmental
countermeasures
within the
supply chain

・ Curtailment of transactions; higher
cost of measures such as themaintenance of global certifications

Baseline
scenario・ Difficulty in obtaining raw materials
and production delays due tosupply chain disruptions

・ Damage to refrigerated
warehouses and logistics centers

GeneralabnormalweatherBaseline
scenario

1.5℃ scenario

Vegetables,
marine products,
and meat andpoultry products

・ Difficulty in obtaining raw materials
and production delays due tologistic network disruptions

Opportunity

1.5℃ scenario

Baseline scenario

ShrimpGeneralabnormalweather

1.5℃ scenario

Foods Business

Rice・ Reduction of agricultural and dairy
production, and steep rise inpurchase prices due todeterioration in quality

Foods Business

ChickenBusiness

1.5℃ scenario

Risks

Business

Logistics

4

Changes inweatherpatterns

Strengthening ofenvironmental
countermeasures
within our
supply chain

・ Increase demand for ethical productsthat are compliant with the SEDEX
platform and are created using globallycertified raw materials
・ Increase demand for the curtailmentof food loss within the supply chain
through the development of
eco-friendly products andtechnological development

Increased
environmental
awareness

・ Develop and expand demand for
products created using sustainable
raw materials

Generalabnormalweather・ Increase in sales thanks to customer
base expansion achieved throughstrengthened disastercountermeasures and resilience

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

・ Difficulty securing humanresources in disaster risk areas

Low-carbon
policies

・ Increased demand for frozen andprocessed foods

・ Opportunity loss caused by theslow increase of investment innatural refrigerants and the slow
adoption of technologicalplatforms such as electrical andlow-carbon vehicles

Bioscience business is characteristically resistant to impact from climate change-related events. Accordingly, we have not currently
identified any material factors in our bioscience business.

5

Impact of a Future Carbon Tax

We estimate that, through 2030, baseline emissions will present an approximate total carbon tax burden of between ¥10.5 billion and¥13.0 billion, for an annual average of between some ¥1.7 billion and ¥2.2 billion.
We expect that, by achieving our Group CO2 emission reduction targets (decrease of 30 % from FY2016 levels by 2030), we canreduce this burden to between about ¥6.7 billion and ¥8.3 billion, down approximately ¥3.7–4.7 billion from the baseline level.
Estimated Group Carbon Tax Burden and Amount of Reduction (average during 2025–2030 and cumulative total)(Billions of yen)

Reduction of burden achieved upon
fulfillment of emission reduction targets

Burden (baseline)

Burden (upon achievementof emission reduction targets)

Cumulative total

Approximately 10.5–13.0

Approximately 6.7–8.3

Approximately 3.7–4.7

Average(2025–2030)

Approximately 1.7–2.2

Approximately 1.1–1.4

Approximately 0.6–0.8

Compared to baseline

Note: Carbon tax assumption: Estimated as 100 yen / dollar, assuming $ 30 / t-CO2 in 2025, $ 75-100 / t-CO2 in 2030, and assuming a fixed amount increase each year from 2026 to 2029.

23

Group Overview

Risk Management

Management Strategy

Nichirei is a global operator of food-related businesses. Accordingly, we ensure that appropriate divisions manage the impact of avariety of risks (including climate change-related risks encountered through business activities) on business management, while
adopting a holistic perspective and employing both rational and optimal methods.
The risks are also discussed and reviewed by the Group Risk Management Committee, which is chaired by the Representative
Director, President.
We believe that risks associated with climate change scenarios are major and impact the entire Company. Thus, the Group
Environmental Protection Committee, chaired by the Representative Director , President, reviews both physical and transition risks
twice a year, based on information gleaned from relevant reports and experts’ advice.
In addition, at least once a year the committee will review the Board of Directors’ report produced by directors responsible forenvironmental management.

Business Strategy

Indicators and Targets
We implement the following three measures to reflect our low-carbon policies, which constitute one of the Group’s long-term environmental targets associated with the most significant risks identified by climate change scenarios.

Initiatives to Resolve
Social Issues

Related press release

https://www.nichirei.co.jp/sites/default/files/inline-images/english/ir/pdf_file/news/20200624_1e.pdf

Corporate GovernanceNichirei Group Low-carbon Policies
Having endorsed TCFD recommendations,
the Nichirei Group is promoting the following low-carbon policies.
Overview

Target Scope

The establishment of long-term
CO2 reduction goals

・30% reduction in CO2 emissions (compared to fiscal 2016)
in Japan, Scope 1 and 2 in 2030

Japan
Scope 1 and 2

The promotion of CO2 reduction
countermeasures overseas

・Promote data collection and other efforts atoverseas worksites
・Review and promote CO2 reduction countermeasures at overseas worksites

Overseas
Scope 1 and 2

The promotion of CO2 reduction
countermeasures within Scope 3

・Promote data collection and other efforts within Scope 3
・Review and promote CO2 reduction countermeasures
within Scope 3

TopicsPillar of Low-carbon Policy

Financial Data

Scope 3

Effective period: FY2022–2031 (10 years)
Investor Information/
Corporate Information
24

Management Strategy

Creating Innovation

The Challenge:
New Value Generation
Junji Kawasaki
Director, Executive Officer
In charge of Nichirei Grouptechnology management andquality assurance

Innovation is essential if we are to create new value and, by 2030, achieve the vision of our long-term
management goals. As food and health become ever more important concerns and the need forGroup-wide promotion of new value becomes increasingly evident, we have begun to create a mechanismwith that in mind.

Company Innovation
The Group’s long-term management goals formulated in FY2020 state that, “the Company will promote innovation to create
new value that solves the problems of customers and society.” Another of our goals is to achieve net sales of ¥1 trillion by 2030.
Enter into the picture COVID-19. The pandemic has significantly changed the world, the previously commonplace is gone,
and the creation of new value is more necessary than ever.
Nichirei believes that innovation is not limited to be innovative, but includes combining existing knowledge and resources tocreate new economic and social value. This can be achieved by transforming our core business model and creating new
business opportunities.
When it comes to realizing our long-term management goals, the one of the material matters is the creation of new markets
and customer value by taking on challenges that don’t adhere to our existing food- and health-related business areas.

Producing New Value
While the Nichirei Group already has taken on many challenges, we recognize the difficulty of continuing to do so in these timesof uncertainty. We thus decided to discuss, with those in charge at the time, how in the past they had dealt with obstacles.
Over the course of nearly three months, we asked some 50 people about close to 40 challenges they had handled. We
learned that, although these people had tried to generate ideas and take on challenges, they had tended to rush through theirpaces in order to achieve results quickly, rather than take a medium- to long-term approach. Further, the Company had notsupported or nurtured their efforts.
25

Conceptual Diagram of Innovation Management System
Context of the Organization (4)External and internal issues, culture, collaboration

Leadership (5)Commitment, vision, strategy, policy
Develop solutions

Create concepts

Opportunities
IntentIdentify opportunities

Validate concepts

Deploy solutions

Management Strategy

Innovation
Value

Operations (8)
DO

PLAN

Planning (6)Source: ISO 56002 Innovation Management—Innovation Management
System Guide
Note: The numbers in parentheses in the diagram indicate ISO 56002
chapter numbers.

Support (7)Resources, competencies
and other support

CHECK

Performance
Evalution (9)Business Strategy

Innovation activities (identifying
opportunities, creating and verifying
concepts, developing and implementing
solutions) are shown in the central red
frame; uncertainty is reduced throughrapid trial and error of hypothesis testingthat goes back and forth within theframe leading to the creation of value
through innovation. In addition, we aim
to more smoothly promote the activities
through organizational support. Human
resource development, which we arefocusing on this year, is an initiative
related to the “competence” of the
support system.

Group Overview

Diagram Explanation

ACT

Improvement (10)employees who, as ideas are generated, will pull together to support the taking on of challenges, resulting in greater innovation.
To this end, we must create a Company culture that fosters and nurtures challenges.
The mechanism currently being developed is based on ISO 56002, the 2019 internationally validated guideline for how to set
up an innovation management system (IMS). We now are creating a Nichirei-specific IMS to reflect the Group’s distinctive features.

Initiatives to Resolve
Social Issues

It became clear that innovation is not achieved by one specific and capable individual. Rather, it is realized by all the Group’s

The aim of our IMS is to provide organizational support for nimble trial and error attempts to cultivate ideas, from conception to
Corporate Governancefruition. The mechanism has two special features.
Regarding the first special feature, it is through the development of human resources that we aim to inculcate a sharedawareness and understanding of innovation. At present, we are conducting workshops on how to use the Business Model Canvas(BMC), a tool for game changers that helps design thinking.
We expect that using the BMC strategic management building blocks as a common language will facilitate smooth communication
among those engaged in innovating and those who support them, thereby enabling the entire Group to promote innovation activities.

TopicsSome 200 employees have attended BMC-related workshops to date, and our goal is to have 80 % of our employees participate
in these over the coming five years.
The second special feature is the development of infrastructure to collect and refine ideas. We plan to stimulate innovation byencouraging new ideas and innovative techniques, refining and evaluating them for all involved to see.

Financial Data

Future Developments
Societal issues related to food and health—including food loss, a super-aged society, and problems resulting from natural
stakeholders, other companies (including ones in other industries), universities, and research institutes.
In the face of the major changes that society is undergoing, we believe that it is up to us to propose, from perspectives unique
to Nichirei, the adoption of values that the world and consumers are demanding.
As innovation efforts are not quick to bear fruit, we plan to allow a little more time before the IMS currently being developed isused to establish a culture that will enable the entire Nichirei Group to create new value.

Investor Information/
Corporate Information

disasters—are diverse and complex. For this reason, we wish to make the best use of Nichirei resources and work together with our26

Management Strategy

Value Creation Process
External environment

Input (source ofcompetitive advantage)(risks and opportunities)■：Riskschanges in regions where
raw ingredients areproduced

Total assets■

Equity ratio■

Free cash flow (before dividend)

Production Factories■

Storage Warehouse Capacity■ Cost of creating a● Demand for frozen foods■■

Logistics expertise
Brand strength

by changing demographics* Fiscal years (FY) indicate years ended March 31.

27

Average employment longevityl(males)17.0years (females)15.3years

Social and
Relationship Capital■

Sales network■

Logistics network■■

Product andservicedevelopment
capabilities

Donations to social causes(FY2019) ¥ 310 million

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

Stakeholder
engagementnt■ Shrinking markets caused

Expert human resources

Top share infrozen foods
in Japanem eand passing down
technology and know-how

15,824ppnag■ Lack of human resources

Number of Employees Group-wide

Most advanced
temperaturecontrolled logistics
in Japan

ma

■

Su

ns

■

● Demand for new foods andservices that address labor
shortages

Bioscienceaiconvenient food products
resulting from changes inhousehold composition

Marine, Meat andPoultry Productsch■medical care that is
optimized for individuals● Demand for simple andTemperature-controlled
Logistics

Human Capital● Demand for food andDecrease in Japan’s
Population

Processed Foodsyscious productsTechnological strengths in
cooking and processing■

adjustment function bycold storage● Demand for health-con-

Production expertise■● Demand for food supply

Health-consciousness

Innovation

Utilization of collective abilities

Intellectual Capitalsustainable supply chain

Food Waste

24 domestic factories, six overseas

1,480 thousand tons domestically,
550 thousand tons overseas

raw ingredients

issuesCreation of
new value

factories● Demand for sustainable■ Response to plastic-related¥15.1 billion■

Supply Chain Management● Demand for food traceability

Resolution of social issues

Manufactured Capital■ Increased cost of warming

countermeasures

47.3 %g■ Warming may cause¥390 billion■

tinproducts and services

rke● Demand for eco-friendly

Realize mission and vision

Financial Capital

Climate Change

Ma●：Opportunities

Business Model

Financialsoundness
R

is

k

m

an

Qualityassurance
ability

Diverse humanresources

ag

em

ent

Globalingredientprocurement

Co

li
mp

Corporate GovernanceanceThe Medium-term Business Plan

WeWill 2021
Priority measures

Targets

FY2020 results

Processed Foods
Expand existing
businesses, create
new growth drivers▶ P. 35

Temperature-controlled▶ P. 37
Logistics
Marine, Meat andPoultry Products▶ P. 39

Bioscience▶ P. 41■■■

Net sales¥

Operatingprofit / Net sales

1trillion

Overseas sales
ratio

8%
30 %

Targets

Total Group investment ¥100.8 billion

Materiality

FY2020 results

27,287million▶ P. 31

Strengthen initiatives froma long-term perspective▶ P. 31

Priority measures

Financial strategy

Revise dividend standards toenhance shareholder return
FY2020 results

39,441 million

ROE: 10% or higher maintained

10.9 %

Dividend: target fromDOE 2.5 % to 3.0 %3.1 %Strengthening foodprocessing andproduction technology
capabilities; enhancing
logistics services

Realizing sustainable
food procurement andresources recycling

Priority measures

ESG

Results

Environmental Impact▶ P. 45

Creating New Value for Customers▶ P. 49

Building of Sustainable Supply Chains▶ P. 53

Provision of Safe Products and Services▶ P. 59

Support good corporate governance▶ P. 61

Climate change
initiatives

Securing anddeveloping diverse
human resources

Secure and develop
diverse humanresources and foster
an inclusive corporate
culture to achievesustainable growth

Investor Information/
Corporate Information

Targets

Financial Data

Efforts to resolve social issues
through businessAs a food and logistics
company that is greatly
affected by climatechange, we will workwith stakeholders tocounter global warming
and reduce energy
consumption throughout
the supply chain

TopicsOperating cash flow (3-year
cumulative forecast): ¥130billion

Creating value in foodand healthResolve various social
issues related to the
supply chain, which isthe foundation of ourbusiness, and contributeto sustainable foodprocurement and therealization of arecycling-based society

Corporate Governance

Proactive capital investment toenhance competitivenessTargets

Further refine corecompetencies in foodprocessing, production
and logistics to resolve
social issues andimprove profitability
through competitive
advantages in global
markets

Initiatives to Resolve
Social Issues

Investment strategy

Priority measures

Allocate resources toachieve sustainable growth

Create new markets
and customer value by
taking on challenges
outside existing
business areas in bothfood and healthBusiness Strategy

Business strategy

Maximally leverage overall Group capabilities,
create new customer value(Value to create)

Management Strategy

Realization of
long-term
management
goals toward 2030

OutcomeGroup Overview

Long-termManagement Strategy

Output28

Business Strategy

Medium-term Business Plan

WeWill 2021
Seek sustainable growth by raising profitability
in Japan and expanding overseas operations.
FY2020■ Consolidated net sales and operating profit
Net sales■ Plan■ Result

Operating profit(Billions of yen)(Billions of yen)

35

700

35

31.5

31

30

657

650

627
600

598

25
20

585

584.9

15

550

10
500

5
450

0

2020 (Result)2021 (Forecast)

2022 (Plan)* Fiscal years (FY) indicate years ended March 31.

■ Progress of Management Strategies in FY2020

Business Plan Main Measures

Progress

Raise profitability in Japan by trans1 forming the business structure

・ Mainstay Processed Foods and Logistics businesses
are driving sales and earnings.

Allocate resources to achieve
2 sustainable growth・ Investments for growth and to strengthen the management foundation are slightly behind schedule.

Expand scale of overseas
operations

・ Business in the U.S. and Europe is firm, but increasing
the speed of expansion remains a challenge.

4 Improve capital efficiency andexpand shareholder returns

・ Continued increase in returns, with rise in the payout ratio
・ ROE of 10% or higher maintained

3○ Sales of household-use processed foods were positive, and logistics services (storage, transfer centers, etc.) continue to expand steadily,with operating profit up 5%.
○ Loss on retirement of noncurrent assets has increased with renewal of facilities, resulting in a year-on-year declined in profit.

29

GeneralGroup Overview

1. Realize sustainable profit growth
2. Improve capital efficiency and expand
shareholder returns

3. Create new value that supports aManagement Strategy

good dietary life and health

FY2021
FY2021 Main Measures

Business Strategy

Adapt quickly to the changes in the business environment due
to COVID-19, strengthen the business base, and pave the way
for the final year of the medium-term business plan.
Logistics• Effective facility utilization and smooth businessexecution during COVID-19 epidemic.
• Early startup of stable operations at large refrigerated
warehouses in Nagoya and Yokohama.
• Make investments for growth to respond to changing
business environment in Europe.

Marine Products

Corporate Governance• Impact from COVID-19 will mainly be on commercial-use
demand, so we will secure earnings through expanded
sales of household-use products, and improvements tothe product mix.
• Develop new value-added products centered on
individual servings and health consciousness.
• Improve and expand the production structure in Japanand overseas.

Initiatives to Resolve
Social Issues

Processed Foods

Meat and Poultry Products• Build a business model with both sustainable resource
procurement and greater profitability.

• Restore earnings for domestic chicken throughoptimization of procurement and sales.

■ Consolidated Target Figures

FY2020 Result

FY2021 Forecast

Net sales

584.9

585.0

0.1

0.0 %

Operating profit

31.0

31.5

0.5

1.5 %

Operating profit /Net sales

5.3 %

5.4 %

-

0.1 ptProfit

19.6

20.0

0.4

2.0 %

EBITDA 1

49.4

51.3

1.9

3.8 %

EPS 2

147.16 yen

150.12 or higher

yen

-

-

ROE

10.9 %

10 % or higher-(As of August 4, 2020)

Investor Information/
Corporate Information

2. EPS：Earnings per share% Change

Financial Data

Notes: 1.EBITDA = Operating proﬁt + Depreciation expense (including lease, excluding goodwill)

Variance

Topics(Billions of yen)30

Business Strategy

Message from the CFO

Takumi Taguchi
Director, Executive Officer
In charge of Nichirei Group planningand management division
Nichirei Corporation

Despite Uncertainty,
New Capabilities Will AriseI supervise the Nichirei Group planning and management unit, which includes the finance division.
To help realize its long-term management goals toward 2030, I promote the Group’s major objectives:
ensuring a solid financial position is maintained, and motivating people—the most important management
resource for business. At the same time, I facilitate the following of the investment PDCA cycle.
From a position that integrates Group financial and non-financial elements in the holding company, I focus
on three perspectives, namely, our ability to perceive, collaborate, and unify.
I perceive present, assumed, and potential risks, and collaborate data with digital technology to makeappropriate decisions. Then, unifying the direction of the Group with the five material matters items
designated this year, we demonstrate the Group’s comprehensive capabilities by creating synergies
among businesses and divisions.
Corporate value encompasses both the economic and social values that are at the core of ourmanagement principles, namely, our mission—To Focus on Lifestyles, and Provide True Satisfaction.
If finance is the foundation that supports the Group, then social value is its central pillar. With thefoundation and main pillar firmly established, we will realize medium- to long-term growth and enhance
the corporate value of the Nichirei Group. At the same time, we will effectively engage with internal andexternal stakeholders.

31

Group Overview

FY2020 Financial Results and Issues (Including COVID-19)
In fiscal 2020, profit attributable to owners of parent was slightly lower than the previous year due to extraordinary income
and losses. As a result, it did not reach 20 billion yen. However, the operating profit was a record high ¥31 billion, marking agood start for the first year of the medium-term business plan. The operating cash flow increased ¥8.1 billion year on year to¥39.4 billion, and my assessment is that financial indicators are in line with plans.

Management Strategy

FY2020 Consolidated Results（Millions of yen）

Net sales

584,858

EBITDA

49,391

D/E ratio

0.5 times

DOE2

3.1 %

Annual dividends
per share

Business Strategy

9,850

Shareholders
Returns

REP1

Financial
Soundness

10.9 %
GrowthCapital Efﬁciency

ROE（Millions of yen）

An increaseof ¥10 to¥42 per share

Notes: 1. Our original indicator. Shows proﬁt after deduction of capital costs.
2. Dividend on equity ratio

Initiatives to Resolve
Social Issues
Corporate GovernanceAt the same time, the capital expenditure was ¥27.3 billion, which is slightly behind our initial plans for investments aimed atstrengthening our foundation, business innovations, and new developments. The total Group capital expenditure for fiscal
2021 (ending March 31, 2021) is expected to total ¥38.8 billion, as planned.
In addition, despite concerns about the spread of the COVID-19 pandemic, in the Logistics segment the Nagoya Minato
Distribution Center (cold storage capacity: 37,294 tons) commenced operations as planned in April 2020, enabling us toestablish a base for profit expansion in the Nagoya area.
Since we anticipate that financing conditions will continue to be uncertain due to the pandemic, we are considering
increasing liquidity on hand for the time being.

WeWill 2021 Last Year Focus Points: Risk and Business Management
Enhanced Risk Management

TopicsFinancial Data
Investor Information/
Corporate Information

So far this fiscal year, in order to enhance the disclosure of business and other risks—including actual and potential risks—we haveanalyzed the impact of each risk from business and financial perspectives and considered countermeasures.
We have designated responding to climate change to be a material matter and, as part of our response to the Task Force on
Climate-related Financial Disclosures, we conducted an impact survey taking into consideration the frequency of climate change andits impact on business.
We have analyzed the degree to which our business and finances would be affected by extreme weather conditions, physicalrisks (such as floods and rising sea levels), transitional risks (such as legal and regulatory revisions), and environmental measurestaken in the supply chain. Then we began to consider appropriate responses.
At the same time, potential risks in the supply chain must also be taken into account. In the food industry, there are invisible
risks involving reputation and operations, involving human rights and environmental issues in a broad range of areas, from raw
materials procurement to production processing and logistics.
We include these non-financial factors in our business activities and finances in order to facilitate comprehensive risk management.
In addition, we carry out appropriate risk management for actual risks. Aware of the increasing scale of natural disasters,such as typhoons and torrential rain, we had been improving our business continuity planning system for use in the event of
a disaster when, at the end of last fiscal year, the COVID-19 virus began to spread rapidly.
Having established a Group countermeasures headquarters and ensured safety throughout the entire supply chain—including that of Group employees—we continue to engage in the business of supporting food infrastructure such as foodfactories and logistics centers.

32

Business Strategy

Message from the CFOThis is the first time we have had to deal with an infectious disease that has spread so widely, so we have struggled a bit.
Nevertheless, we will incorporate all necessary countermeasures.
The offensive tactic of creating new value is indispensable for enhancing corporate value. Nevertheless, I believe it ispossible to adopt a defensive stance that minimizes negative risks and prevents corporate value from being damaged.
The current risk management system is described on page 68. We are now working to create a new risk management
system. Under this system, we aim to be able to respond accurately and efficiently by covering risks that affect the entire
Group, and then categorizing the corresponding items according to the Group's common characteristics and businesscharacteristics. This new system is scheduled to begin operation in April 2021.

Data and Digital Technologies in Business Management
COVID-19 presents an opportunity to further accelerate various environmental changes.
In the field of business management, it is necessary to select and quickly incorporate information that is truly important
into the decision-making cycle.
First, it is necessary to analyze and understand Group financial figures. By linking these to non-financial information, one
is able to provide useful data to management and business companies.
In addition, it is necessary to combine this with data from outside the Group and develop it into a data source able tofacilitate timely and appropriate decisions. Some external data are publicly available, some are difficult to collect, and somebecome useful with advanced analytical processing. It is also important to have a variety of sources of information.
In order to collect, analyze, process, and predict such data by making full use of AI and digital technologies, we must
discover and develop human resources who have excellent data processing and system construction skills, and who canfully understand and analyze the Group's business characteristics and trends in lifestyles and markets. But, since it is people
who create the mechanisms, we must find and develop human resources who understand the Group’s business characteristics,
as well as consumer and market trends.
These tasks take time to complete, so while drawing a grand design during this medium-term business plan period, I
would like to proactively take on challenges without fear of failure in terms of the processes necessary for such important
issues as expanding our overseas business.

Data and Digital Technologies in Business Management

Internal
Group Data

What is happening?
(ascertain reality)

Financial
Data
Non-financial
Data

Data External
to the Group
Disclosed
Information
Big Data

33

OptimalManagement
Decision-making(strategies, measures)

Data
Accumulation,
Analysisand Processing

Why is it happening?
(analyze results)

・Human resources
・Facilities
・R&D
・Ｍ＆Ａ

What will happen
from now?
(predict future)・Capital(investment)

Group Overview

Linking Materiality to Management, Business Strategy

Initiatives to Resolve
Social Issues
Corporate GovernanceAs the fifth material matter, we selected Secure and develop an array of human resources. Regardless of how well a strategy
is constructed and mechanisms are created, it is people who think and act. Thus, in the discussion of material matters,
Group management was unified in selecting this matter.
We are working on rebuilding our core personnel system as a tool to achieve this goal, and aim to commence operations in
September 2021. The core system incorporates talent management functions (human resources development and appropriate
allocation), and improves the efficiency of practical work such as payroll calculation and personnel changes.
We will create a system that makes maximum use of human resources and contributes to demonstrating the comprehensive
capabilities of the Group.

Business Strategy

Securing and Developing Human Resources

Management Strategy

The ultimate role of the holding company is to decide how to allocate management resources to enhance corporate value.
Capital and people are our resources. In addition to actively investing to expand and strengthen our business foundation
while responding to various issues, the capital allocation policy also focuses on efforts to realize a sustainable society.
Regarding capital expenditure, which is a material matter in terms of the allocation of funds, our medium-term businessplan calls for capital expenditure of approximately ¥100 billion, of which 50% will be targeted for growth; 30% for infrastructure enhancement, business innovation, and new development; and 20% for rationalization and maintenance. In fiscal 2020,
Group management engaged in earnest discussions and identified five material matters for achieving our vision for 2030.
We will establish specific goals and KPIs for these five material matters, while keeping our management and businessstrategies consistent.
During fiscal 2020, confronted with risks including the expanding scale of natural disasters and the infectious disease
COVID-19, we had no choice but to focus on defensive measures to prevent damage to our corporate value.
That said, at all times the focal point of resource allocation has remained whether it contributes to the enhancement ofcorporate value. In order to create a mechanism for obtaining the desired results, we will focus on the Group CSR basic
policy, the Nichirei Pledge, and five material matters, and will invest resources with an emphasis on attaining a balance
between offensive and defensive tactics, all while bearing in mind the stakeholders within and outside the Group, andallocations being made to financial and non-financial sectors.

TopicsFinancial Data
Investor Information/
Corporate Information
34

Business Strategy

Processed Foods Business
The Taste of Happiness
By intimately following the way people live,
we provide foods that ensure a healthier,more satisfying world.
President’s message
To ensure growth in an era of drastic change, it is important toanticipate changes and continue taking on the challenge ofcreating new things.
We will continue to create new value in food and health,aiming for business growth and the resolution of social issues.

Masahiko Takenaga
Director, Executive Officer, Nichirei Corporation
Representative Director, President, Nichirei Foods Inc.

■ Business Scale

・Main production facilities
・Total assets: ¥128,407 million
Mori Plant, Shiroishi Factory, Yamagata
・Group companies: 21 companies (6 in Japan, 15 overseas) andFactory, Funabashi Factory, Kansai
Nichirei Technology Development Center (R&D Department)
Factory, Kyurei Inc., CHUREI, Co. Ltd.,・Employees (consolidated): 10,161 persons (1,870 in Japan, 8,291 overseas)
GFPT Nichirei (Thailand) Co., Ltd.,・Food production factories: 19 facilities (15 in Japan, 4 overseas)
Surapon Nichirei Foods Co., Ltd.

■ Market Environment○ Stable trend in household-use market

Net Sales for Frozen Foods

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

70.1
400

436.0

300
200
2016

2017

2018

2019

Source: Market scale calculated by INTAGE Inc. SCI consumer panel (Spending per 100 people on preparedfrozen foods. Excludes purchases through consumer cooperatives.)■ Business Details

Processed
agricultural products

7%35

FY2020YoY

Nichirei

226.6

2.7 %

229.6

2.3 %

39:61

Company A

212.6

2.7 %

211.2

-0.8 %

57:43

Company B

175.3

5.9 %

193.4

4.0 %

53:47

Company C

178.2-0.2 %

179.8

0.9 %

33:67

Company D

111.6-1.8 %

108.0-2.7 %

55:45

Source: Shokuhin Sangyo Shimbunsha Co., Ltd［Main sellers］
Commercial-use preparedfrozen foods

28 %OthersYoY

・Household-use Prepared Frozen Foods

Household-use
prepared frozen foods

8%

FY2019

506.1

500

2015

(Billions of yen)

Household-use:
Commercial-use
ratio■■ Frozen vegetables

42 %FY2020 sales
composition

Volume retailers,
drug stores andconvenience stores

・Commercial-use Prepared Frozen Foods［Main sellers］
Overseas

15 %［Main Products］

Volume retailers(delicatessen),convenience stores,
restaurants andfood services［Main Products］

Nichirei Foods

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

Group Overview■ Performance ・Favorable performance on expanded sales of processed rice products and processed chicken products

・In FY2020, sales rose for household-use prepared foods, driven by Honkaku-Itame Cha-Han (fried rice)
and Tokukara (fried chicken). Operating profit increased 15% on expanded sales as well as contributions
from the improved performance of affiliates.
Net Sales for Household-use Products

Performance
Net sales(Billions of yen)

6.0

240

5.4

3.4

200

16.0

15.8

14.5

30.5
19.4

32.6
19.3

34.8
19.8

36.3
20.2

57.2

60.3

64.8

71.5

89.0

97.3

98.4

99.5

90.3

17/3

18/3

19/3

20/3

21/3E

16.2

26.7
17.2

30.5
18.5

28.5
18.8

44.5

46.2

47.0

52.5

76.9

83.1

88.3

86.2

13/3

14/3

15/3

16/3

13.9
12.2
16.2
42.4

120
80
40
0

21.8
17.0

(FY2015=100)

Household-use overall
Household-use rice productsHousehold-use processed chicken products

155

12
5

Household-use market

135

115

Business Strategy

16.3

17.0

160

19

17.0

16.7

Operating profit

8.0

15.5

14.3

14.6

175

Management Strategy■■ Commercial-use Prepared Frozen Foods■■ Household-use Prepared Frozen Foods■■ Processed Agricultural Products■■ Overseas
14.6
13.9
■■ Others

280

（％）

Operating profit(Billions of yen)

95
16/3

17/3

18/3

19/3

20/3

FY2021 Measures
Demand for household-use prepared foods is projected to expand due to COVID-19 pandemic while difficult circumstances continues inbusiness for commercial-use prepared foods, mainly for restaurants.
(Billions of yen)Japan

FY2020Net sales

8.2

4%

232.8

-2.0

-1 %

64.8

4.5

8%

71.5

6.7

10 %

99.5

1.2

1%

90.3

-9.2

-9 %

19.8

0.5

3%

20.2

0.4

2%

Overseas

34.8

2.2

7%

36.3

1.5

4%

Others

15.8

-0.2

-1 %

14.5

-1.3

-8 %

Operating profit

16.7

2.1

15 %

17.0

0.3

2%

Financial Data

25

23.5

EBITDA

22.6

19.6

20

17.25
9.90

4.02
17/3

20.3

7.37

Operations to commence in October 2020 (plan) ¥4.0 billion total investment

8.05
15

18/3

19/3

20/3

21/3E

Investor Information/
Corporate Information

18.7

5
0

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

15
10

Variance % change

Opened second plant at GFPT Nichirei in Thailand

Capital expenditures (Billions of yen)

20

YoY

To p i c

Capital Expenditures and EBITDA
25

Variance % change

Forecast

Topics■ Capital Investment Status

YoY

234.8

Household-use
Prepared Frozen
Foods
Commercial-use
Prepared Frozen
Foods
Processed
Agricultural
Products

Overseas• In North America, InnovAsian Cuisine expands sales ofexisting Asian frozen foods, and launch new products.

ResultFY2021

Corporate Governance• Expand capacity and build an efficient production system byconsolidating rice-based items and bolstering productionlines.(Enhance existing lines at the Funabashi plant)• Expand the Tokukara (fried chicken) production line (Thailand).
• Develop products to meet growing demand for at-home main
dishes and individual servings.
• Enhance access to growth categories such as co-op delivery
services and e-commerce business

Processed
Foods

Initiatives to Resolve
Social Issues

External
Environment36

Business Strategy

Temperature-controlled Logistics BusinessTo make our advanced temperature-controlled
logistics, already the best in Japan,
the global standard.
Pursuing innovative know-how and providing optimal solutions to social andcustomer issues. We will continue to earn customer trust and become an irreplaceable
partner in temperature-controlled logistics.

President’s message
As a food logistics company supporting everyday life, we willcontinue to promote work style reforms and maximize use ofhuman resources. In addition, we engage in business innovation,
establish business models as a solution company, expand
overseas business and achieve stable growth even in uncertain
environments.

Kazuhiko Umezawa
Director, Executive Officer, Nichirei Corporation
Representative Director, President,
Nichirei Logistics Group Inc.

■ Business Scale

・Total assets: ¥169,648 million
・Main facilities
・Group companies: 22 companies in Japan, 15 companies overseas
Funabashi DC,(affiliates: 6 companies in Japan, 2 companies overseas)
Higashi-ogishima DC,
・Employees (consolidated): 4,237 persons (2,841 in Japan, 1,396 overseas)
Heiwajima DC, Osaka Futo DC,
・Facilities: 115 in Japan, 23 overseas
Osaka Shinnanko DC, Daikoku(17 in Europe, 4 in China, 1 each in Thailand and Malaysia)
DC, Kansai XD, Koriyama XD■ External Environment○ Strong demand for storage is ongoing, centered on imported livestock products and frozen foods.

Trends Changes in Quantity of Goods Received
by Item in the Domestic Refrigerator Industry（Ten thousand of ton） ■■ Marine products (including processed food)■■ Meat and Poultry (including processed food)
2,500■■ Agricultural products (including processed food)

2,000

148

108

115

736

729

696

751

337

359

358

372

558

615

605

608

644

455

498

479

476

474

2014

2015

2016

2017

2018

135
609

1,000

252

0

5%

■■ Frozen foods■■ Others

120

1,500

500

Others

Source: Compiled by Nichirei based on Japan Association of Refrigerated Warehouses documents■ Business Details
Domestic Refrigerated Warehouse Facility Capacity
Area

37

Number of
Facilities

Capacity(thousands of ton)

Hokkaido

7

88

Tohoku

4

64

Kanto

18

544

Chubu

10

195

Kansai14

278

Chugoku/Shikoku

12

130

Kyushu

14

176

Total

79

1,475

Frozen foods

17 %Agricultural products(including
processed food)18 %Marine products(including processed food)Inventory composition
by item(FY2019)34 %Meat and poultry(including processed food)26 %Group strengths
Equipment andcargo collection
capacity

Largest storage capacity in Japan
In addition to metropolitan areas offering a large amount of
resources and strong location advantages, we also have
warehouses in agricultural and livestock production areas.

Variousservices

Utilizing storage facilities and logistic networks nationwide,
we develop total services, from storage and ancillary
services to distribution
We operate 36 logistic centers for major retailers

Quality
management,
brand power

Know-how enabling high-quality management
Transact with approximately 5,000 companies annuallybased on the power of the Nichirei brandNichirei Logistics Grouphttps://www.nichirei-logi.co.jp/english/index.html

Group Overview■ Performance ・Regional storage and Cross Docking (XD) were robust, stable growth continued

・In the previous fiscal year, profits increased due to inventories remaining at a high level andbusiness improvements
Logistic Network Sales Breakdown

Performance
Net sales(Billions of yen)

250

8.9

8.6

150

2.2

1.9
18.9

26.3

100

92.2

88.4

8.7
2.3
31.3

91.4

10.6

2.7

4.2

33.9

32.0

90.8

88.5

11.4

11.3

11.8

5.5

3.5

3.6

35.3

38.3

37.6

93.7

100.9

90.5

4.2

9

34.4

100
80
60

100.3

4

50
47.6

53.3

57.4

62.2

63.7

65.5

64.5

74.2

13/3

14/3

15/3

16/3

17/3

18/3

19/3

20/3

21/3E

■■ Cross Docking■■ Third party logistics/Others■■ Transport and delivery
12.0

16.2

16.0

17.1

16.7

18.1

19.1

53.2

54.7

56.5

58.7

64.6

17/3

18/3

19/3

20/3

21/3E

23.7

26.1

21.2

40
20
0

Business Strategy

47.1

0

Net sales(Billions of yen)Management Strategy

10.0

200

Operating profit(Billions of yen)
12.1
12Operating profit■■ Regional storage■■ Logistics network■■ Overseas■■ Others/Intersegments

FY2021 Measures
・COVID-19 impact will slow cargo movements of commercial products, spurring a shortage of storage in metropolitan areas
・Due to structural labor shortages, transportation and warehouse work costs will continue to rise(Billions of yen)Japan

Overseas

20

EBITDA

5

7.59

10.09

11.90

17.07

17.29

20

6.2

4%

174.5

9.1

6%

Logistics network

100.9

7.2

8%

100.3

-0.6

-1 %

Regional storage

64.5

-1.0

-2 %

74.2

9.7

15 %

Overseas

37.6

-0.8

-2 %

34.4

-3.2

-8 %

Others

3.6

0.0

0%

4.2

0.6

18 %

Operating profit

11.8

0.4

4%

12.1

0.3

2%

Subtotal

10.9

0.6

5%

11.7

0.8

7%

Logistics network

4.1

0.3

7%

4.5

0.3

7%

Regional storage

6.7

0.3

5%

7.2

0.5

7%

Overseas

1.2

0.0

1%

0.9

-0.3 -27 %Others

-0.3

-0.1

－

-0.5

-0.2

19/3

－

Total investment: ¥10.2 billion (of which, land: ¥1.7 billion)
Facility capacity: 37,294 tons (F-class refrigerated warehouse: 30,892 tons, cold room: 6,402 tons)
Komaki DC

Shiratori DC
Nagoya Minato DC
Nagoya Futo DC

15
18/3

3%

165.4

Haruhi DC

0
17/3

6.6

Subtotal

Variance % change

Nagoya-area reorganization target facility
22

21.0

20.0

213.1

20/3

Base nameMain categories

Nagoya Minato DC Frozen food co-delivery/
Home Delivery Service “Cool C”/trunk line relay
Haruhi DC

Ice cream co-delivery/volume sales operations

Komaki DC

Volume sales/Restaurants

Shiratori DC

Fisheries raw materials/manufacturer raw materials

Nagoya Futo DC

Livestock raw materials

Hub function as an import cargo unloading
and shipping transit point
Kansai area:
Port of Osaka

NagoyaMinato DC

Kanto area:
Port of Tokyo

Investor Information/
Corporate Information

10

3%

22.5

21.7
20.7

5.4

Variance % change

YoY

Nagoya Minato DC
EBITDA (Billions of yen)■■ Capital expenditures (including leased assets)

15

206.5

Forecast

To p i c

Capital Expenditures and EBITDA
Capital Expenditures (Billions of yen)25

Net sales

YoY

Financial Data

■ Capital Expenditures Status

ResultTopics• In Europe, we will strengthen storage functions in port
areas in the Netherlands and the United Kingdom, andestablish transportation facilities in inland areas.
• In China, in addition to expanding the CVS distribution
business, we will capture new demand for storage andtransportation.

FY2021

Corporate Governance• Aim for stable expansion of profits by maximizing storage
and transportation functions in metropolitan areas andregional facilities• In the XD business, which has 36 facilities in Japan, we areresponding to increases in volumes handled by mass retailers• We plan to make capital investments and further promotebusiness innovation to strengthen future competitiveness

FY2020Temperaturecontrolled
Logistics

Initiatives to Resolve
Social Issues

Marketenvironment

21/3E

38

Business Strategy

Marine, Meat and Poultry Products BusinessConnecting Sea, Land and People
We continue to provide consumers with heartful satisfaction under the keywords
fresh, delicious, safe, secure, health and eco-friendly.

President’s message
We will focus efforts on providing premium ingredients andexpanding the handling of processed products, implement
measures to obtain stable profits and work to resolve social
issues to creation of a sustainable supply chain.

Yoshifumi Kaneko
Director, Executive Officer, Nichirei Corporation
Representative Director, President, Nichirei Fresh Inc.

■ Business Scale

・Total assets: Marine products: ¥26,928 million Meat and Poultry: ¥18,949 million
・Internally-operated: 8 factories (7 in Japan, 1 overseas)
food factories
Marine Products ・8 companies (2 in Japan, 6 overseas)
・Marine products: 523 persons(216 in Japan, 307 overseas)
Meat and Poultry ・5 companies in Japan・476 persons in Japan

Meat and Poultry Products
Business

Marine Products
Business■ Market Environment

・Main production facilities
Marine products: Fresh Maruichi Inc.,
Trans Paciﬁc Seafood Co.,LTD
Meat and poultry products: Fresh Chicken Karumai Inc.,
Nichirei Fresh Process Inc.

■ Business Details (FY2020)

・Although eating fish is becoming lesscommon in Japan, global demand for marine
products remains high.
・The ongoing rise in market prices for someproducts has passed its peak and is on a
downward trajectory

Fish roe

ShrimpRatio of sales
by type offishery fish
(FY2020)

Others・Demand for chicken and pork remained firm due to growing
health consciousness and a relative sense of cheapness
Demand for Meat and Poultry (2013=100)
120

Beef

115

Pork

Ratio of sales
by type of
livestock(FY2020)

105
100
95

Beef

90
85

2013

2014

2015

2016

2017

Volumeretailer/Others

Delicatessen/Home
meal replacement
Volume retailer(HMR)(processed meat)

Chicken

Chicken

110

Ratio of sales
by fisheryindustry(FY2020)

Octopus
Shellfish

Fisheries wholesalemarketRestaurant

Pork

Ratio of sales
by livestockindustry
Restaurant/ (FY2020)

Co-op

Others2018

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

Main
Products

Large variety of natural andcultured shrimp

39

Wide range of sushi toppings

Amani-no-Megumi series (chicken, pork and beef)Nichirei Fresh

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

・Focus efforts on selling highly processed products,
mainly the four major fish species, including themainstay shrimp products
・Profit increased in the previous fiscal year due tosales of processed products for home meals
replacements (HMR) and restaurants.

MarineProducts
Business

Net sales(Billions of yen)

140
120

Net Sales and Operating Profit for Meat and Poultry Products
Operating profit(Billions of yen)

Operating profit

1.6■■ Net sales

100
0.1

60

63.7

68.6

0.8
0.3

0.2
68.7

68.8

69.4

71.5

0.2
71.2

0.4
0
65.8

Net sales(Billions of yen)

140

Operating profit

1.2

120

■■ Net sales

0.8

100

0.5

0.4
0

59.0

40

40

20

20

0

0.1

80
60

1.6

75.5

80.1

13/3

14/3

Operating profit(Billions of yen)

1.3

1.5

1.6

1.3

1.2

0.9

0.8

0.4

0.4

89.5

92

88.1

90.4

91.1

88.3

91

15/3

16/3

17/3

18/3

19/3

20/3

21/3E

0.4
0

Business Strategy

80

0.4

0.7

・Sales of fresh chicken and processed products forready-to-eat meals remained strong, made thorougheffort to focus on profitability of imported product sales
・In the previous fiscal year, we focused on selling
processed products, but profits declined due to the impactof domestic chicken and imported pork market prices.

Management Strategy

Net Sales and Operating Profit for Marine Products

Meat and
Poultry
Products
Business

Group Overview■ Performance

0

13/3

14/3

15/3

16/3

17/3

18/3

19/3

20/3

21/3E

Initiatives to Resolve
Social Issues

FY2021 Measures
Marketenvironment

Due to the spread of COVID-19, the handling of products for restaurants is decreasing, but the demand for at-home meals and homemeals replacements (HMR) is expanding, mainly at volume retailers.

Corporate Governance(Billions of yen)

Marine Products

Meat and Poultry
Products

・We will strengthen sales of fresh products for volume retailers,
processed products for co-ops and processed products for homemeals replacements (HMR), such as convenience stores.
・We aim to increase sales and profits by steadily meeting expanding
demand for at-home meals and home meals replacements (HMR).

Variance % change

Forecast

YoY
Variance % change

Net sales

65.8

-5.5

-8 %

59.0

-6.8 -10 %Operatingprofit0.4

0.3 143 %0.0-0.4 -100 %Net sales

88.3

-2.7

-3 %

91.0

2.7

3%

Operatingprofit0.9-0.5 -38 %

1.3

0.4

44 %

TopicsMeat and Poultry Products

FY2021YoY

ResultMarineProducts

・While focusing on sales for at-home meals and home meals
replacements (HMR) where demand is strong, we will strive tosecure profits by thoroughly implementing profit-oriented
procurement and sales and cost controls.

FY2020Financial Data

Top icEnhancing Collaboration between
Group Companies, Developing New Products（The photos are for illustrative purposes only)

Investor Information/
Corporate Information○ We will provide fishery and livestock business premium ingredientsto the processed food business and engage in collaborations todevelop products leveraging the strengths of each business.
○ In addition to supplying ingredients, we will share processing
technologies and production functions with Group businesses inorder to meet new demand in the future, while strengthening
proposal capabilities throughout the Group.

40

Business Strategy

Bioscience Business
Through biotechnology, we provide new value that
customers demand in order to contribute to themental and physical health of as many people aspossible.

Masato Takenaga
Executive Officer, Nichirei Corporation

President’s message
In Nichirei Biosciences’ business domain, market expansion andtechnological innovations continue. In seizing such opportunities,
we will strengthen our competitiveness in existing fields and work
to create innovation utilizing the Nichirei Biosciences Global
Innovation Center to promote growth in Japan and overseas.

Representative Director, President,
Nichirei Biosciences Inc.

■ Business Scale

・Total assets (non-consolidated): ¥10,985 million
・Employees(non-consolidated): 98 persons■ Bioscience Business Changes

1980s

・Main Facilities:
Nichirei Biosciences Global Innovation Center(production and R&D base)Pathcom Systems Corporation（California, U.S.）

Molecular
diagnostics

Launched sales of byproductsin the meat products business・Import and sales of fetal bovine serum required for cell cultures
・Manufacture and sales of cow placenta extract effective for beauty

Business expansion

1990s

Rapid
diagnostics

・Import and sales of growth media used for cell culture (biomedical
materials business)
・Sales of extracts and powders utilizing acerola (functional material
business)・Development, manufacture and sales of diagnostic agents using
antibodies produced from cultured cells (molecular diagnostics andrapid diagnostics businesses)
・Acquired a US medical device company

Ratio of Sales

Functional
material

Biomedical materials■ Current Medium-term Management Plan Measures and Progress
Main measures
・Develop and commercialize next-generation diagnostic drugs
and devices
・Promote overseas business・Create a business model that captures technologicalinnovations and changing needs

41

Progress
・Promote the development of in-vitro diagnostics for cancer andinfectious diseases that utilize technologies for testing genes
and proteins
・Sales of medical devices to the United States, Europe andChina, and sales of animal serum for cell culture, mainly in the
United States
・Promote new business construction by integrating technologies
through joint developments (open innovation) with universities
and corporations

Nichirei Biosciences

https://www.nichirei.co.jp/bio/english/• Development and stable supply system of high-quality
products that meet market needs in cancer diagnosis(companion diagnostics)• Development and production of medical devices
using immunostaining technology, one of the only
such technologies in the world

Customer

Medical facilities for pathological examinations, universities and pharmaceutical companies for research anddevelopment

Strategy

Expand sales of competitive staining equipment and unique immunohistochemical staining reagents anddiagnostic agents in Japan and overseas

Management Strategy

StrengthGroup Overview

Bioscience business Growth Driver- Molecular Diagnostics

Pathological Examination Market and Domestic Market Share (immunostaining antibodies and devices)
Market scale(Millions of yen)Domestic Share (2018)2■■ Amount

Growth rate with 2016 as 100

Growth rate (%)

Amount (Millions of yen)

Share

8,000

110

Company A

3,125

40.2 %

6,000

100

Company B

2,24028.8 %

Nichirei Biosciences

1,545

19.9 %

4,000

7,082

7,420

7,770

8,100

8,505

Company C

735

9.5 %

2,000

Company D

25

0.3 %

0

Other

100

1.3 %

2016

2017

2018

2019 F2019 E

Total

7,770

100 %

Notes: 1 and 2. Source: Compiled by Nichirei based on FUJI KEIZAI CO., LTD. documents

Initiatives to Resolve
Social Issues

Sales company name120

Business Strategy

Market Scale1

Corporate Governance

Main
Products

About Companion
Diagnostics

TopicsHistofine ALK iAEP® Kit

Histostainer-AT immunostaining device

In-vitro diagnostics that enables patients to receive appropriate drugs or therapies by testing one’s biomarkers or genes.
Used to improve the efficacy and safety of certain drugs, and now several companion diagnostics are used to assess
whether patients are eligible for molecular targeted cancer therapies.
Financial Data

■ Organization Information

Investor Information/
Corporate Information

Global Innovation Center

Molecular diagnostics business employees
42Business Strategy

Business Strategy: Overseas
Processed Foods Business

Strategies to Boost Asian Food Sales in North America■ Overview of US-based InnovAsian Cuisine Enterprises, Inc.
Household-use
FeaturesMain categories
Main sales
channelsCommercial-use

・Product development capabilities based on market trends from an American perspective
・Ability to sell to major US mass retailers
Main dishes (processed chicken, etc.), cooked rice, such as fried rice
Leading mass retailers, discount store frozen foodsections

・Volume retailers (delicatessen counters)
・School and restaurant chains

Products for single serving meals centered on themost well-known Asian menus in the United States

Providing Asian food solutions mainly in thedelicatessen section

Products

U.S. Market Share for Asian Frozen Foods(as of March 2020)

InnovAsian Cuisine Net Sales(Millions of dollar)
150

100

103

108

118

134

139

50

InnovAsian Cuisine 19%(second rank)

0
16/12

17/12

18/12

19/12

20/12E

Source: Compiled by Nichirei based on Nielsen
ASIAN Brand Share documents

Marine, Meat and Poultry Products Business

Strategies to Push Up Sales in Chinese, North American Markets
To boost the development and sale of Japanese food products we will:●

Expand our lineup of processed marine products, focusing
on sushi toppings● Strengthen our overseas sales system● Promote sales with area partners in emerging markets thathave room to expand● Promote sales of high-quality ingredients in China (forprocessed and unprocessed meat and poultry products)

43

Group Overview

Temperature-controlled Logistics

Promoting Comprehensive Logistics Services in Europe, Startingin the Netherlands

CountryYear

Company name1988 Eurofrigo B.V.
Netherlands 1990

Hiwa Rotterdam Port
Cold Stores B. V.

1989 Thermotraffic Holland B.V.

CapitalCapacity

Business

Features(thousands of ton)

€4,910 ・Cold storage (waterfront area,
inland area)
thousand

233

・The port area mainly stores import/export cargo (livestock products,etc.) to and from Europe. Includes an animal quarantine station€2,270 ・Cold storage (specializing in fruit juice)
thousand186

・Largest storage for juice brought into Europe
・Also provide additional services, such as blendingー・In addition to Western Europe, delivery network expanded toCentral and Eastern Europe and Russia
・Also handles pharmaceutical products that require strict
temperature control

1989 Thermotraffic GmbHEngland2014 Thermotraffic UK Ltd.

£500
thousandー

Poland2004 Frigo Logistics Sp. z o.o.

PLN 11,800 ・Cold storage andthousand temperature-controlled transportation

79

・Entrusted with storage, sorting, and delivery operations for major
retail storesFrance2010

47

・Providing storage and transportation and delivery services for local
manufacturers and wholesale and mass retailer centers

Transports Godfroy S.A.S.

€152,
thousand ・Cold storage andEntrepots Godfroy S.A.S.

€7
thousandtemperature-controlled transportation(actual forwarding)ー

Nichirei Holding Holland B.V. (Head Office)Expansion of Business in China and Solutions Business in ASEAN
・Enhancing facilities in response to vigorous demand for temperature-controlled storage in China and Thailand
Capacity(ton)Company name

Capital

2004

Shanghai Fresh Line
Express Co., Ltd.

$3,930thousand82.4 % ・Cargo storage, sorting and delivery

2018

Jiangsu Fresh Flower
Logistics Co., Ltd.

CNY 15
million65.0 %

Thailand2013

SCG Nichirei Logistics
Co., Ltd.

THB 720
million49.0 %

Malaysia

2018

NL Cold Chain
Network(M) SDN BHD

MYR 53,380
thousand

40.0 %

China

Business

・Temperature-controlled
logistics-related consulting business・Cold storage andtemperature-controlled
transportation

Features

Corporate Governance

Investment
ratio

Year

Country

Initiatives to Resolve
Social Issues

Germany

・Forwarding€1,200(temperature-controlled
thousandtransportation, customs)

Business Strategy€500
thousandManagement Strategy

・In the latter half of the 1980s, Nichirei entered the Netherlands in anticipation of the expansion of the EU's economic zone, andsubsequently, expanded its business domain mainly through the execution of acquisition strategies
・Focused on strengthening storage functions in major port areas, cross-border transportation and expanding logistics of mass retailers

Providing a one-stop service with product storage,
3,694 ・
transportation and delivery functions in threetemperature zones (frozen, refrigerated and room
3,029
temperature)・With the same equipment standards as Japan, we
provide “Japanese quality” temperature-controlled
logistics services overseas and in Thailand

41,472

・As the largest logistics company specializing in halal
handling, contributes to halal logistics inside and outside
the region as well as halal international transportation

Topics22,800■ Main capital investments

Netherland

Expanded temperature-controlled warehousein Rotterdam port area

China

Construction of Shanghai No. 2 Center(commenced operations in May 2020)
Financial Data

120,000

Net sales (Thousands of yuan)

114,423

110,000

98,038100,000

Facility expansion in Maasvlakte (rendering)

Scheduled completion date: June 2021
Total investment amount: approximately €17 million
Capacity: 14,000 pallets

90,00087,16680,00071,19070,00060,00050,00056,210
15/12

16/12

17/12

18/12

Investor Information/
Corporate Information

Shanghai Fresh Line Express Net Sale

19/12

44

Initiatives to Resolve Social Issues

On the Environment and Climate Change
The Nichirei Group has devised the Nichirei Group Environmental Policies focused on three priority issues: prevention of
global warming, promotion of sustainable recycling, and living in harmony with nature.
Since Group activities span the entire supply chain—food factories, logistics centers, and other worksites—it must playa part in the environmental initiatives and activities of both its customers and business partners.
At the same time, the Group is aware of the substantial impact that climate change is having on its business, as its
support of food-related infrastructure depends on natural ecosystems for raw materials. Accordingly, the Group and its
business partners undertake the following:・Use energy efficiently in the production of food products
・Cut greenhouse gas emissions by using more efficient temperature-controlled storage and transportation
・Promote the use of renewable energy, from procurement and production, through to storage, logistics, and sales■ Nichirei Group Environmental Policy

https://www.nichirei.co.jp/english/csr/environment/concept.html■ Nichirei Group Bio-diversity Policy

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

Long-term Environmental Goals and Low-carbon Policies
We will implement low-carbon policies in response to one of the material matters (see page 15) and in pursuit of our long-term
environmental goals. We will actively implement the three measures during the 10-year span extending from 2021 through 2030.

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

Overview

Target scope1

The establishment of long-term
CO2 reduction goals

30% reduction in CO2 emissions (compared to fiscal 2016) in Japan,
Scope 1 and 2 in 2030

Japan
Scope 1 and 2

2

The promotion of CO2 reduction
countermeasures overseas

・Promote data collection and other efforts at overseas worksites
・Review and promote CO2 reduction countermeasures at overseas worksites

Overseas
Scope 1 and 2

3

The promotion of CO2 reduction
countermeasures within Scope 3

・Promote data collection and other efforts within Scope 3
・Review and promote CO2 reduction countermeasures within Scope 3

Scope3

Nichirei Group CO2 Emission Trends
Fixed power emission coefficient1

Variable power emission coefficient2(Thousands of tons of CO2)

Emissions intensity3(Tons of CO2 per ton of production)

400

300

1

287
226

280
228

200

0.56

0.52

269
226
0.49

228

260

0.46

0.75

225

241

0.25

100

0

45

0.5

0.44

FY2016FY2017FY2018FY2019FY20200Notes:
1. Fixed power emission coefficient: The CO2 emission
intensity unit of 0.412 [t-CO2/MWh] announced by theFederation of Electric Power Companies of Japan in
FY2010, used nationwide.
2. Variable power emission coefficient: Power conversion
coefficient used by power companies in fiscal year
utilized at each worksite.
3. Scope of power emission intensity: Nichirei Foods(Nichirei Foods-operated factories and affiliated factories
in Japan) and Nichirei Fresh (affiliated factories in Japan).
Excluding the following factories: Nichirei Foods: Nichirei
Ice Inc.; Nichirei Fresh: Nichirei Fresh Farm Inc., Fresh
Chicken Karumai Inc., Fresh Meat Sakudaira Inc.

■ Solar Power Generation

As it promotes the use of renewable energy, the Nichirei Grouphas installed solar power generation equipment in plants,
refrigerated warehouses and other facilities, while purchasing
Renewable Energy Certificates (RECs).* Each year since 2007,
we have purchased certificates worth one million kilowatt hours(kWh) in biomass-generated power.
In addition, since March 2020, Nichirei Foods haspurchased ten million kWh worth ofRECs to cover all the electricity used
to power production lines for
Honkaku-Itame Cha-Han (fried rice).

The Nichirei Group has installed solar power generation equipment
at all its Group companies. In FY2020, the equipment generated
2,068,000 kWh of electricity and helped reduce CO2 emissions by
1,003 tons.
・Funabashi Plant

Nichirei Foods

・Nichirei Ice Inc.
・Sugito DC

・Matsue DC

・Kushiro DC

Business Strategy

Nichirei Logistics Group* These represent units of environmental value(e.g., the reduction of CO2 emissions resulting
from the generation of electricity by using
renewable energy sources) that can be bought
and traded, allowing certificate owners to claim
to have purchased electricity generated using
renewable energy sources (offsetting).

・Sakishima DC・Kyokurei Inc. Daikoku DC
Nichirei Biosciences

・Global Innovation Center■ Natural Refrigerants and Leakage Prevention■ Receives Special Review

Hitachi, Ltd.
StorageAnalysis

Field data
sensing

OT
gate way

OT
platform

Financial Data

Collection

Nichirei Logistics Engineering Inc. (representative director,
president: Tsutomu Ito), which handles engineering
operations for Nichirei Logistics Group Inc., won theSpecial Review Committee Award in the 22nd Protect
the Ozone Layer, Prevent Global Warming Awards
sponsored by the NK Industrial Research Institute,operated by the Nikkan Kogyo Shimbun, Ltd.
The award was received on September 12, 2019, inrecognition of efforts to reduce CFC leaks andenvironmental impacts through the use of systems thatpredict and diagnose refrigerant leaks.
In addition to further reducing our environmental
footprint and responding to customer demands, we plan
to better oversee refrigeration equipment maintenanceand repair plan proposals, so as to provide overall
support that includes recommendations for energy
conservation and cost reduction through low-pricepurchasing.

TopicsConceptual Diagram

Committee Award

Corporate Governance

The Nichirei Logistics Group uses natural refrigerants in both new
refrigerated warehouses and facilities that it enlarges, while encouraging the
replacement of equipment that uses CFC refrigerant with that which uses
natural refrigerant.
In addition, since FY2014, we have stepped up inspections at
distribution centers nationwide to reduce refrigerant leakage fromrefrigerators and introduced highly sensitive detectors that are 10 times
more accurate than conventional sensors.
Since September 2018, in collaboration with Hitachi, Ltd., we have been
testing methods of predicting and diagnosing refrigeration equipment failure. We
have done this at our Funabashi DC, using cutting-edge IoT technology toenhance the operation of equipment and maintenance efficiency.
By visualizing energy consumption data and analyzing operational
improvements, refrigeration equipment can be more efficiently operated.

Initiatives to Resolve
Social Issues

Chlorofluorocarbon (CFC) Initiatives

Nichirei
Logistics GroupManagement Strategy■ Purchase of Green Energy

Group Overview

Renewable Energy

Weather data
Refrigerator
operation data

● Reduction in energy costs● Reduction inmaintenance/repair costs● Elimination of sudden
failures/recovery work
● Reduction in number ofpatrol inspections

OT:Operational
Technology● Early and highly accurate detection of

failure signs● Support for highly efficient operation ofrefrigeration equipment by visualization ofenergy consumption and operational
improvement analysis

Investor Information/
Corporate Information

Warehouse
environment data46

Initiatives to Resolve Social Issues

Water Risk, Biodiversity, Using Less Plastic
Water Risk Assessment
https://nichirei.disclosure.site/en/themes/88

To achieve its goal of building sustainable supply chains, the Nichirei Group recognizes the importance of water resources to
producing raw materials and conducting business. At the same time, it is striving to conserve these resources and reduce
its environmental impact.
Realizing the importance of understanding local circumstances and the initiatives implemented at local facilities
regarding water risks, Nichirei uses a third-party water assessment service to evaluate water risk at its facilities.
Our most recent assessments used Aqueduct,1 a data platform run by the World Resources Institute. Questionnaires inEnglish and Japanese were distributed at all Group facilities in Japan and abroad in order to better understand the initiatives
they were implementing.
This water risk assessment covered 152 Nichirei Group facilities and looked at four indicators included in the Aqueduct
Framework: water quantity, water quality, as well as regulatory and reputational risk (see figure 1).
Figure 1 illustrates the relationship between the number of Nichirei facilities located in water-stressed regions and theirwater intake. We will implement water risk reduction initiatives at three facilities (one in China, two in Thailand) found to be
associated with extremely high water stress.
■ Water Risk Assessment (Figure 1)

Step 1Results of Aqueduct evaluation (external factors)
Water quantity

Step 2

Water quality

Regulatory and reputational risks

Implementation of water risk management questionnaire (Japanese and English; evaluation of internal factors)
Setting of question items on questionnaire
Examining the composition of the water risk management questionnaire

Identification of high-risk facilities
Step 3

Evaluation of business characteristics
Water intake quantity

Wastewater volume

Production volume

Identification of priority facilities■ Water Stress and Water Intake Quantity2

Water stress

Number of facilities

Fiscal 2019 water intake quantity (m3/year)
Surface water

Groundwater

Third-party assessment

152

2,497,656

1,809,223

2,811,264

7,118,143

Extremely High (80 % or more)

32,371,459

0468,3822,839,841

High (40–80 %)

0

0

0

0

0

Medium to high (20–40 %)54

0458,403

1,491,420

1,949,823

Low to medium (10–20 %)

77

2,400

1,323,084

737,805

2,063,289

Low (10 % or less)

18

123,797

27,736113,657

265,190

Total

Notes:
1. Offered by this international environmental NGO, the tool facilitates the evaluation of global water risk using position coordinates or addresses.
2. Excludes facilities to be scaled down, and overseas offices and warehouses.

47

Total

Biodiversity Initiatives
Group Overview■ Fukushima: Environmental Research and Protection, Conserving Biodiversity

https://nichirei.disclosure.site/en/themes/89

Water quality survey in the Urabandai area wetland

Initiatives to Resolve
Social Issues

https://nichirei.disclosure.site/en/themes/89

A Cypripedium macranthos var.
macranthos in bloom

TopicsFinancial Data

Since 2006, Nichirei Foods Inc. has been striving to reduce the amount of plastic used
for commercial frozen food product containers and packaging.
Most recently, the efforts have succeeded for containers and packaging used forseven target items. Some 200 tons less is now used compared with the amountpreviously used. Nichirei is still working to cut back the amount of plastic it uses toreduce even further its discharge of CO2.

Corporate Governance

Reducing Container and Packaging CO2 Emissions

Business Strategy

New species Caenis sp.CU discovered in the survey■ Protecting Endangered Orchids, Biodiversity Conservation

Since FY2004, the Nichirei Group has helped in the conservation and regeneration of
the endangered orchid Cypripedium macranthos var. macranthos and other species
through research on and the breeding of orchids and other plants in Fujimi-machi,
Nagano Prefecture.
In FY2015, some artificially propagated orchids—of the genus Cypripedium
macranthos var. macranthos—ﬂowered and, in FY2020, they produced 32 blooms.
As a result, Nichirei entered into Biodiversity Conservation Partnership Agreementwith the Fujimi-machi Atsumorisou Regeneration Committee in February 2019.
Under a three-year (April 1, 2019 to March 31, 2022) agreement, the Group will
provide the technologies necessary for the conservation and regeneration ofCypripedium macranthos orchids and cover a portion of the costs.

Management Strategy

Nichirei owns land near Lake Hibara in Fukushima Prefectureʼs Urabandai region. The
Company supports research on the natural environment in the surrounding areas andenvironmental and biodiversity conservation based on that research.
Following the 1888 eruption of Mount Bandai, all vegetation disappeared from the
Urabandai area, but more than 130 years on, one can see vegetation returning: red pine
forests, white willows, reeded wetlands, and aquatic plant clusters in marshlands.
The red pine forests, planted by people who want to see the return of greenery,continue to spread.
But since the Companyʼs land remains unforested, it provides a valuable area forobserving the transition of virgin nature.
Nichirei has supported the research activities—carried out since FY2012 in the
Urabandai area—by the Support Division for Projects in Natural Symbiosis andRegeneration at Center for Practical and Project-Based Learning, Graduate School of
Symbiotic Systems Science and Technology, Fukushima University.
In FY2020 (ended in March, 2020), we supported an investigation of insect fauna
inhabiting reed marshes in Urabandai area Nichirei-owned land, as well as a study into thediversity of plant species conducted with the goal of publishing a book on Urabandai flora.

Reduced tray handle width

Past Plastic Reduction Initiatives
Fiscal year

Products

Measures

Imagawa-Yaki (Japanese waffle)

Elimination of trays

Since FY2010

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

Since FY2012

Honkaku-Itame Cha-Han (fried rice)

Thinner packaging

Since FY2015

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

Since FY2016

Honkaku-Itame Cha-Han (fried rice)

Thinner packaging (second time)

Since FY2019

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

Thinner packaging

Since FY2020

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

Thinner trays, reduced tray handle width

Thinner packaging

BeforeAfter

Investor Information/
Corporate Information

Since FY200748

Initiatives to Resolve Social Issues

Food and Health: Creating New Value
Japan is currently facing concerns regarding shrinking consumer markets as the population declines.
Meanwhile, changes such as the diversification of consumer needs and the personalization of food and medical care are
expected to progress ever faster.
Further, we must consider methods of responding to risks associated with unidentified infectious diseases such as
COVID-19.

Addressing Problems of Drug-resistant Bacteria■ Antibiotic-free Chicken

https://www.nichireifresh.co.jp/product/livestock/detail/?id=376(Japanese only)

Chemical agents, such as antibiotics and synthetic
antibacterials, are used in general broiler chicken farming totreat diseases, prevent the spread of illnesses due to farming
conducted in tight spaces, and generate growth.
Nichirei Fresh Inc. has been selling antibiotic-free chicken
since 2004. While vaccinated, our poultry is not exposed tochemical agents, including antibiotics and synthetic
antibacterials, that could generate antibiotic‐resistant bacteria.*
Instead, our poultry farming methods take full advantage of the
innate immunocompetence of chickens.
Our farming technology takes into consideration therearing environment and also applies its own expertise topoultry farming, thereby raising the natural immunocompetenceof chickens and developing their natural resistance to diseases
through the use of such substances as lactic acid, otherprobiotics, and plant-based herbal medicines that help maintainthe health of chickens and boost their immunity.
Since the manure of chickens exposed to antibiotics
affects soil bacteria and groundwater, the poultry farming
methods used to produce antibiotic-free chicken also
contribute to the natural cycles intrinsic to ecosystems.

■ Reliable Management System: Inspections to

Ensure Use of Antibiotic-free Chicken

Nichirei Fresh is performing its own inspections to ensure thatpoultry is antibiotic free. These inspections roughly break
down into verification of production processes and productinspections.
Personnel responsible for the inspections regularly visit
production areas to verify that all production processes (fromthose in feed mills to those in breeding farms and processing
factories) are being performed to the Company’s standards.
In addition, the Nichirei Quality Assurance Division’s Food
Safety Research Center performs product inspections involving
testing for antibiotic residue in special feed used in the productionof antibiotic-free chicken and in final chicken products.
Nichirei Fresh ensures that quality control is adequate byinspecting all its processes, from the animal feed it uses to
final product shipments.

49

Antibiotic‐resistant Bacteria That Threaten Ecosystem Cycles
Antibiotics andsynthetic antibacterials

HumansInfection

Food

Livestock
Outbreak ofantibiotic-resistantbacteria
ManureAtmosphere

PlantsFeed

Soil

Nutrients

Environmental
pollution

Rivers

Oceans* Drug-resistant bacteria: Protecting people from drug-resistant bacteria (not affectedby antibacterial agents) is becoming an issue worldwide. Those with weakened
immunocompetence who are exposed to such bacteria may not respond totreatment with antibiotics.
Drug-resistant bacteria have been found in livestock continuously exposed tochemical agents such as antibiotics and synthetic antibacterials. As a result of
growing consumer interest in the United States, meat from animals not exposed to
antibiotics is becoming increasingly popular.
We will continue to assess the issue of drug-resistant bacteria as we produce
chicken that helps maintain human health.

Quality Control: Antibiotic-free Chicken
Nichirei Fresh management items
Breeding farms● Shipping lot records● Shipping records ● Daily production report

Hatcheries

Feed mills● Daily production report● Incoming raw material delivery records● Feed shipment records● Raw material inventory records

Rearing farms● Rearing records (vaccinations, etc.)● Incoming delivery records (chicks, feed)● Shipment records

Processing factories● Microorganism testing records● Temperature and humidity control records● Daily production report

Nichirei FreshHealth Initiatives
Group Overview■ Meat Production: Focus on Omega-3 Fatty Acids

Amani-no-Megumi Meat

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

Comparison of amount of omega-3 fatty acid
(α-linolenic acid) that body can absorb from
100g pork loin
（mg）

450

300

436

110

0

Standard pork loin

* There are individual differences.

Omega Balance Pork
(domestic)
Source: Nichirei Fresh

Provision of In-Vitro Diagnostics
for Personalized Cancer Therapies■ Joint Research and Development Associated■ Companion Diagnostics(Japanese only)(Japanese only)

In 2014, Nichirei Biosciences became the first company to get
an approval of manufacturing and marketing of “Companion
Diagnostics”, which can enable cancer patients to receive anappropriate therapy or drug depending on one's constitution
and pathology, in Japan.
We contribute advancement of personalized medicine,which can enable patients to receive more effective therapies
or drugs with fewer side effects, by using our accumulated
immune-related technologies.

TopicsFinancial Data

Recently, the search for alternatives to animal proteins has been
receiving a large amount of attention due to a variety of factors,
including the increasing world population, food issues causedby more frequent patterns of inclement weather, the need formeasures to reduce environmental impact through better foodproduction efficiency, and higher awareness regarding fooddiversity and health. In January 2020, Nichirei Foods invested in
DAIZ Inc., a frontrunner in the search for alternative proteins thatis conducting advanced research regarding soybeans.
The germinated soybeans that DAIZ Inc. owns andresearches are delicious and nutritious and have the potential toresolve existing issues related to vegetable proteins, including
peculiar flavors and unsatisfactory textures. Moving forward, we
will conduct joint research and development aimed at creating
new value along with DAIZ Inc.

https://www.nichirei.co.jp/news/2018/321.html

Corporate Governancehttps://www.nichireifoods.co.jp/news/2020/info_id8335/

Initiatives to Resolve
Social Issues

Food Shortage Response Initiatives
with Germinated Soybeans

Business Strategy

150

About
4 timesManagement Strategy

Nichirei Fresh produces and sells meat with a focus on omega-3 fatty
acids, which are essential for human health. We have improved the balanceof omega-3 and omega-6 fatty acids by giving chickens, pigs and cattle* aformula feed that uses ingredients derived from ﬂax, which is rich in
α-linolenic acid. As a result, we have developed tender meat that we havebeen selling since 2006.
Omega-3 fatty acids, abundant in blue-backed ﬁsh, ﬂaxseed oil andwild sesame oil, are converted into eicosapentaenoic acid (EPA) anddocosahexaenoic acid (DHA) in the body. However, the diet of today’s
Japanese is often lacking in the essential fatty acids that cannot be made in
the body, especially omega-3 fatty acids. Thus, Nichirei Fresh is helping
support the health of its customers through the meat that appears
frequently in everyday meal settings.

Histofine ALK iAEP® Kit

Top icJapan’s “conomeal kitchen” app

https://www.nichirei.co.jp/news/2020/357.html(Japanese only)

Investor Information/
Corporate Information

Many people are feeling stressed by having to plan meals and eat at home. With the spreadof COVID-19 expected to bring an increase in opportunities for bulk food purchases, theNichirei Group has recently developed an app—called the “conomeal kitchen” in Japanese—that suggests meal menus and preparation procedures to suit a variety of individual tastes.
We believe that the eating habits of consumers will be enriched if they are able to quickly set
the dinner table with dishes that match their personal preferences.

50

Initiatives to Resolve Social Issues

New Technologies Improve Efficiency
Awareness of the need for good eating habits is growing among customers and society at large.
In its drive to further strengthen its core competence and proactively engage in the resolution of social issues, Nichirei willdraw on such current production technologies as AI, IoT, autonomous driving, and robotics.
■ Automated Optimal Production, Personnel Plan

https://www.nichireifoods.co.jp/news/2020/info_id8338/(Japanese only)

Nichirei Foods has collaborated with Hitachi, Ltd. to create a system that automatically formulates optimal production and personnel plans
using AI. The system, introduced at four factories in Japan in January, uses advanced AI technology to reproduce and advance plans thatexperts have formulated based on complex constraints.
In addition to the legal regulations involved in creating personnel plans, these include a variety of other conditions must be considered,including individual abilities, overtime, and paid leave.
Until now, experts have relied on experience-based intuition to formulate plans based on these prerequisites. The new system, however,has allowed us to automate planning and achieve optimal solutions using AI, which takes into consideration prerequisite conditions.
As a result, the time now required for planning can be reduced to about one-tenth that of that formerly needed and, since non-expert
employees can also engage in planning, the system is expected to contribute to work style reforms such as a reduction in the number ofhours worked and more employees taking advantage of paid leave.
In recent years, as food manufacturers have been required to produce and supply products in response to fluctuations in demand,the system is expected to improve customer satisfaction by utilizing advanced digital technology and creating efficient production systems.
The system is planned to be gradually used in other domestic plants.
Nichirei Foods will use digital technologies to promote further improvements in productivity, reductions in lead time and inventories,
as well as work style reforms.
Production Planning Formulation Image
A maximum of
16 trillion combinations
in one factory

A maximum of
16 trillion combinations
in one factory
Master settings(narrowing down)
Introduction of
optimal planning
formulation
system using AI

From a maximum of 16 trillion combinations in one factory,
production plans encompassing daily production products
and volumes for each line and personnel plans involving shiftschedules are formulated automatically.

Absolute constraints(narrowing down)
Discretionary
constraints

Selection using
intuition basedon experience・Scoring with evaluationindex from multiple
proposalsOneplan fixed・Time used for planning
reduced to 1/10

■ Food Waste Reduction

https://www.nichireifoods.co.jp/news/2018/info_id5715/(Japanese only)

In February 2018, in partnership with Kindai University, Nichirei Foods developed
technologies powered by artiﬁcial intelligence (AI).
We maintain and control the quality of the ingredients for processed chicken
products as we receive them, by using such sorting technologies as metal detection,
X-rays, near-infrared rays, optics, and colors.
However, additional manual or visual inspection is often required, since theaccuracy of these methods in distinguishing the quality of ingredients decreases
depending on the position and angle of the foreign matter and impurities.
In the selection of the ingredients for cuts of chicken, in particular, the three major
impurities that must be eliminated are bones, feathers, and bloodstains. Due to its ability
to locate such impurities with pinpoint accuracy, AI-powered technology does notremove unnecessary amounts of impurity-free meat, leading to reduced food waste.

51

Bloodstains

Bruising

■ Expiration Date Reader for Tablet Inspections*Group Overview

https://www.nichirei-logi.co.jp/news/2020/20200713.html(Japanese only)* Automated expiration date reader AI solution: AI-OCR (Optical
Character Recognition/Reader) recognizes images using image
preprocessing technology to identify
the characters of the expiration
5
date from the image and match the recognized expiration date withinformation in the cloud, to enable more accurate readings.

プログラムに従って、荷物を倉庫内へ。

■ Demonstration of Unmanned Forklift
第1回

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

キョクレイ 大黒物流センター

無人フォークリフト
実証実験チーム

株式会社ニチレイ代表取締役社長

大櫛櫛櫛（おおくし・けんや）

キョクレイ 大黒物流センター
所長代理

エラーなどで 停 止した
ときには 、内 蔵され ている有 線リモコンで 操作して動かします。
若林慶司（わかばやし・けいじ）

キョクレイオペレーション
大黒事業所
所長代理

こんな狭いところにも一発入庫！
無人フォークリフト

キャサリン

品川知也

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

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

1

パレットを持った爪の先のセンサーで感知して、決められた位置にピタリと入庫。
Unmanned forklift operation

スピードは割とゆっくりですね

有人フォーク
の半 分
くらいです

見 事な
方 向 転 換！

Topics■ Truck Reservation System

Corporate Governance

Since January 2018, the Nichirei Logistics Group’s Kyokurei Daikoku
Distribution Center has been conducting demonstrations of unmanned forklift
operations to move cargo in refrigerated warehouses. The aim is to save labor
at refrigerated warehouse sites, given the industry-wide labor shortage.
Unmanned forklifts can be operated using a tablet device, making it
possible for employees lacking physical strength or operating skills to use it
without making mistakes. We thus plan to increase the number of
warehouses where unmanned forklifts can be used, to shorten working hours
and improve occupational safety and health.

Initiatives to Resolve
Social Issues

床の青い磁気テープを感知することで位置を把握して移動しています。
6

Business Strategy

4Management Strategy

The Nichirei Logistics Group is in the process of introducing, at its bases
nationwide, an AI solution to automatically read expiration dates on captured
images. As part of the Group’s efforts to fully digitize warehouse operations,tablet devices are being used to introduce AI and expand functionality.
Previously done manually, expiration date input now can be completedusing AI. enabling highly accurate readings of 93% or more and fast
processing speeds of about two seconds. This has led to improved quality
control enabling anyone to capture expiration date images, simplifying overall
operations, and facilitating stress-free work.
Nichirei Logistics is also collaborating with the AI solution’s developer,
Automagi Inc., to demonstrate image analysis.
Amid concern regarding labor shortages in Japan, the Nichirei Logistics
Group will continue its efforts to realize sustainable logistics to support
customer supply chains by promoting business innovation with the goal of
digitization and efficiency.

ゆっくり
ですが、
正 確です

https://www.nichirei.co.jp/news/2017/298.html(Japanese only)
4

Financial Data
Investor Information/
Corporate Information

At distribution centers, truck deliveries are concentrated at certain times, andbecause the cargo on each truck is not known, smooth unloading and loadingis hard, leading to long wait times for truck drivers and rising concerns insurrounding communities.
To alleviate and eliminate the problem of waiting trucks, in October 2017
the Nichirei Logistics Group launched an advanced truck reservation system.
The system allows the truck side (shipper or shipping company) toreserve a desired time for loading or unloading trucks, in line with the loading
and unloading time slot framework at each distribution center.
We are attempting to improve efficiency through the introduction of asystem related to procedures after trucks arrive, and involving the sending ofcargo details from the truck side to the distribution center side ahead of time.
The introduction of the system has led to reductions in the time required for
unloading and loading, truck operations, and truck emissions (CO2 reductions).

52

Initiatives to Resolve Social Issues

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

Nichirei Group Sustainable Supply Chain Policy
https://www.nichirei.co.jp/english/csr/supplychain

To work on building sustainable supply chains, the Nichirei Group undertakes the procurement of products and services inaccordance with its policy and encourages its suppliers to understand the policy and put it into practice.
Legal compliance

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

Fair business practices

We employ fair, transparent, and impartial business practices.

Human rights

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

Environment

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

Product quality and safety We work hard to deliver safe, high-quality products and services.
Information management We manage information properly and disclose information related to our business activities in a timely, appropriate manner.
Local communities

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

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

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

The policy is applicable to all employees andofficers of the Nichirei Group. We will also requirebusiness partners to support the policy and work
towards ensuring respect for human rights.

In addition to our efforts to promote respect for2. Basic
Principles human rights based on the United Nations Guiding

Principles on Business and Human Rights, theNichirei Group supports and upholds the followinginternational standards:• The United Nations International Bill of Human
Rights (the Universal Declaration of Human Rights
and the International Covenants on Human Rights);• The International Labour Organization’s
Declaration on Fundamental Principles and Rights
at Work; and• The United Nations General Assembly Resolution:
The United Nations Declaration on the Rights ofIndigenous Peoples.

3. Identification of,
Response to andDisclosure ofIssues Related to
Human Rights

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

Inaugural Supply Chain Meeting to Promote CSR Procurement
Since 2019, in accordance with the OECD Guidelines for Multinational Enterprises and the United Nations Global Compact, the Nichirei
Group has been promoting the understanding of, and working toward attaining, the Nichirei Group Sustainable Supply Chain Policy andensuring that our supply chain business partners are in step with the Group’s CSR procurement activities.
In FY2021 (ending in March 2021), we launched a Supply Chain Meeting to enable Group companies to participate in formulating GroupCSR procurement guidelines, as well as to share with us and examine issues regarding the addressing of human rights due diligence.
In addition to Nichirei Foods having joined the July 2019 Sedex* London conference, the Group is engaged in ethical and responsible
business practices throughout our global supply chain.
* Supplier Ethical Data Exchange, a non-profit organization established in the United Kingdom in 2004 to provide a platform for managing and sharing corporate ethical information with theaim of realizing responsible business practices in supply chains.

53

Sustainable Ingredient Procurement
Group Overview■ Aquaculture Stewardship Council, Marine Stewardship Council Certification

Nichirei Fresh products that have obtained
ASC/MSC certification (as of June 2019)

ASC

Certification Registry Number ASC-C-01632

MSC

Certification Registry Number MSC-C-52165

Management Strategy

Since 2006, Nichirei Fresh has been engaged in the Forest of Life Project1 nature
conservation activities involving sustainable black tiger prawn farming and mangrove tree
planting in Kalimantan, Indonesia.
These activities were extended to whiteleg shrimp ponds in Sumatra, Indonesia, andobtained Aquaculture Stewardship Council (ASC) certification2 in 2018. From 2020,
mangrove planting will begin in earnest, with plans to plant about 280,000 trees.
In addition, we are gradually increasing the handling of marine products certified 3 by
the Marine Stewardship Council (MSC) and, June 2019, we have been handling 17 fish
species of marine products. In the years ahead, we plan to increase the variety ofsustainable marine products we handle.

● Black tiger shrimp ● Whiteleg shrimp ● Pacific oyster● Salmon varieties (pink salmon, king salmon, coho salmon,
chum salmon, sockeye salmon) ● Flatfish varieties

Business Strategy

Notes:
1. Forest of Life Project: https://www.nichireifresh.co.jp/inochinomori/
2. ASC certification requires that marine products used have been cultivated in a sustainable manner.
3. MSC certification requires that wild seafood used has been caught using methods that do not deplete the natural supply.

(Kamchatka flounder, yellowfin sole, dusky sole, whiteflounder) ● Walleye pollack ● Pacific cod ● Scallops● Herring ● Capelins ● Snow crabs ● Arctic surf clams● Red king crab

■ Junwakei Chicken, Recycled Agriculture, Domestic Chicken Breeds Model for Self-Sufficiency

Groundbreaking Business Cycle Involving Agriculture
and the Public and Private Sectors
Junwakei chicken raised on feed rice are sold at stores and delivered toconsumers in collaboration with manufacturers and distributors,
creating a new business model centered on a circulating cycle.

Tax

Ministry of Agriculture,
Forestry and Fisheries

Consumers

Subsidies forfeed riceAwarded!

Initiatives to Resolve
Social Issues(Local Government)
Iwate Prefecture

Corporate Governance

Increases motivation andproduction of farmers
who grow feed rice

Supermarkets, restaurants,
pubs and so on
Feed rice is cultivated using
less pesticide chemicalcompost, so fireflies are
returning near rice paddies
Planning and sales in collaboration with
distributors, retailers and local companies that
understand feed rice cultivation project activities

Chicken manure
purification plant

ChickenmanureChicken manure from poultry
farms is purified for use asorganic fertilizer
Returned to local farmers andfeed rice paddies(Producer)
Nichirei Fresh Farm
Hirono Facility

Certified Sustainable Palm Oil

Junwakei

Junwakeichicken raisedeating feed rice

Investor Information/
Corporate Information

Palm oil from the fruit of the oil palm is used as a raw material in such products as cooking oil, soap, anddetergent. In recent years, the ongoing large-scale development of oil palm plantations has led to environmental
problems, including deforestation of tropical rain forests and CO2 emissions from peat areas, as well as forcedlabor and child labor among plantation workers, which are global problems.
In August 2018, the Group joined the non-profit organization Roundtable on Sustainable Palm Oil (RSPO),
which promotes the production and use of sustainable palm oil. In FY2020, these efforts resulted in the total
amount of palm oil used for frying oil at Nichirei Foods plants (at consolidated subsidiaries in Japan and overseas)
totaled, and a corresponding amount of RSPO certified oil credits (book & claim method) were purchased. The
Nichirei Group is supporting RSPO initiatives to promote sustainable procurement throughout the supply chain.

Utilizes abandoned
land and fallow rice
fields to cultivate feed
rice paddies
͢ Increases feed
self-sufficiency rate

Financial Data

(Supplier)
Nichirei Fresh Inc.

TopicsThe Junwakei breed of chicken is raised at the Nichirei Fresh Farm Hirono
Facility, an affiliate of Nichirei Fresh. The chickens are a Japanese breed,
selectively bred from foundation stock crossed with the Japanese Koyuki
and Benizakura breeds of chickens at the National Livestock Breeding
Center Hyogo Farm.
The self-sufficiency rate of chickens used for meat in Japan is relatively
high at about 70%. That said, the parents (broiler breeders) andgrandparents (ancestors) account for only about 1% of current broods, asa result of which we must rely on imports from overseas. This means that,in the event of an epidemic overseas such as of the bird flu, domestic
poultry farming would be adversely affected were imports stopped.
For this reason, Nichirei Fresh is making every effort to raise chickens
that are not dependent on overseas breeds to improve Japan's foodself-sufficiency rate.
In addition, with the cooperation of the JA Shin-Iwate Agricultural
Cooperative, Nichirei Fresh has signed contracts with rice farmers in thetowns of Karumai, Hirono and their suburbs in Iwate Prefecture to produce
feed rice using abandoned and fallow rice fields. Locally harvested feed
rice is included in the mixed feed given to Junwakei chickens.
Chicken manure is heat-treated at a high-speed chicken manure
processing plant at the Hirono facility, and the energy thus generated isused to heat the chicken house. The heat-treated chicken manure is bothsold to local farmers as organic fertilizer, and used in the feed-producing
rice fields included in Nichirei Fresh contracts.
The Junwakei chicken regional agriculture and livestock recycling
model won the Excellence Award in the product category at the 2010
Food Action Nippon Awards sponsored by the Ministry of Agriculture,
Forestry and Fisheries.

4-1055-18-100-00

54

Initiatives to Resolve Social Issues

Improving Work Satisfaction,
Cultivating Human Assets
In conducting business, the Nichirei Group places the highest importance on human assets. Further, in order to invigorate
our organization, improve productivity, and create a vibrant workplace it is not only on our values and ideas that we depend
but, to a large extent, on our diverse human assets.
In 2017, we formulated the Nichirei Group Workplace Improvement Policy, set targets for each Group company basedon it, and commenced promoting a number of initiatives over a five-year period to FY2022.
The Diversity Promotion Council and the Group Health Promotion Liaison Committee have been organized under theGroup Human Resources Committee to improve work satisfaction. They discuss human asset-related strategies to realize
Group-wide sustainable growth, exchange opinions, and share information on specific measures, after which they confirm
their progress.

Workplace Improvement Policy
https://www.nichirei.co.jp/english/csr/work/policy.html■ Workstyle Reforms: Main Measures and Activity Progress

Ensure Equal Opportunity

Prevent excessive
working hours

Enable Diverse Style

Policy55

Ideal State

Priority
MeasureMain Activity

FY2018FY2019FY2020

Employees shall have a certain
degree of freedom to choose
their workplace and working
hours, to suit personal
circumstances. Systems tomaintain these conditions are tobe put in place.

Provideworking
condition
options

Systems are to be established toprevent employeesʼ careers frombeing disrupted or ended
because of such circumstances
as childbirth, childcare, nursing
care, poor health, relocation of a
spouse, or disease.

Set up systems
to prevent
disruption of
employee
careers■ Implementation of career

Through collaborative labor andmanagement initiatives forworkplace improvement, working
hours shall be limited to levels
that allow each employee todemonstrate their ability andperform satisfying work ingood health.

Promotion of
paid leave■ New working hours

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

Promote theadvancementof female
employees■ Logistics Group: 3rd and 4th■ Logistics Group: 5th and 6th “Sakaseru■ Logistics Group: 7th and 8th “Sakaseru

Diversity andinclusion■ Nichirei Foods: Diversity■ Nichirei Foods: Diversity Forum “SPIRAL UP”■ Nichirei Foods: Diversity Forum “SPIRAL UP”

Job positions and employment
opportunities for people withdisabilities shall be created toallow them to earn a living
through stimulating work, with avision to ultimately.

Providestimulating
employment
opportunities
for people withdisabilities■ Disabled employment rate:■ Disabled employment rate: 2.56%■ Disabled employment rate: 2.75%

As the healthy life span of people
becomes longer, we will create
spaces enabling seniors to leverage
their distinctive experience and play
an active role reflecting theirindividual values and workstyles.

Createemployment
opportunities
for olderpeople■ 44 employees rehired after■ 59 employees rehired after retirement■ 57 employees rehired after retirement■ New in-house childcare facility■ Full-scale introduction of telework■ Implementation of career development■ Introduction of comeback system

Opened in the Tokyo head office building in
April 2018

development programs forfemale employees
Career training for 3 terms(3rd–5th terms)
Target: 32 people

management system
introduction test
■ Implementation of
overwork countermeasuresthrough labor-management
collaboration“Sakaseru Roji-Jo Forum”
Target: 132 female employees(275 participants in total)■ Nichirei Foods: LADY GO UP
Target: Female employees at
the five food manufacturers(eight female Nichirei Foods
employees)
Summary: Seminar forbuilding external networks
and career development

Forum “SPIRAL UP”
Target: Deepen understandingof various work styles
centered on the department
and section managers at eachof the five food manufacturers.
31 Nichirei Foods employees(21 men, 10 women)
2.5% (32 people withdisabilities employed)

retirement (48 retirees)

programs for women
Women's success event “Next Step for 2021”
Target: 163 people■ Nursing care seminar
Held four times, 115 participants■ 100% introduction of new working hours

All worksites except food factories andlogistics offices

Purpose: Ongoing career support for life
events and growth■ Leave system due to spouse transfer

Purpose: Examination and introduction ofmulti-career formation in collaboration withother companies■ Nursing care seminars and nursing carehandbook creation
Conducted four times, 103 participants

management system■ Introduced new expense settlement system■ Five-day introduction of planned annual

introduction of a working time management system■ Implemented e-learning: Revised labor laws,■ Guidance on long working hours through■ Implementation of measures against

overwork through labor-management
collaboration■ Nichirei Group working hours guidelines
formulated through labor-managementRoji-Jo Forum”
Target: 129 female employees (404
participants in total)
Theme: Work values and workplace forwomen■ Nichirei Foods: LADY GO UP
Target: Female employees at the six food
manufacturers (eight female Nichirei Foods
employees)
Summary: Seminar for building external
networks and career development

Deepen understanding of various work
styles centered on the Department andSection managers at each of the six food
manufacturers. 35 Nichirei Foods employees(26 men, nine women)(30 people with disabilities employed)(64 retirees)

leave system

working hours awarenessTarget: 5,101 employees participated■ Implementation of measures against

overwork through labor-management
collaborationRoji-Jo Forum”
Target: 118 female employees (522participants in total)■ Nichirei Foods: LADY GO UP
Target: Female employees at the six food
manufacturers (eight female Nichirei Foods
employees)
Summary: Seminar for building external
networks and career development

Deepen understanding of various work
styles centered on the Department andSection managers at each of the six food
manufacturers. 60 Nichirei Foods employees(46 men, 14 women)(34 people with disabilities employed)(65 retirees)Supporting Non-Japanese Trainees’ Careers
Group Overview

The Nichirei Group provides educational opportunities for career paths and advancement so that diverse human assets are able
to play an active role in their respective workplaces with satisfaction and vitality.
We also strive to create workplaces in which foreign technical intern trainees can work in Japan with a sense of satisfaction.
In addition, we introduce the workplaces of each Group company in the countries in which they operate, and makeproposals there, so that workers are able to continue their careers utilizing Japan-acquired know-how. This expertise includes
hygienic methods of food management, occupational safety norms, and health-related practices.
これが、「冷めてもふっくらおいしい」と評価の高い小名浜工場の定塩鮭工場を見学して感じた

品 質 を 左 右 する「 人 」の力

大のは、建物は古いですが、非

常にきちんときれいに管理が;dƌŽŶŐңŶŚƚӉƚƌĄŝƐĂŶŐͿƶŝdŚҷWŚӇҿŶŐ>ĂŶ͕EŐƵǇҴŶdŚҷŶŚăŽ͕,ŝƌŽǇƵŬŝEĂŐĂƐĞ͕,ŝƌŽƚĂŬĂKŬĂ͕EĂŽŬŝ<ĂƚŽƵŶŽ͕<ĞŶŝĐŚŝ^ĂƚŽ͕EŐƵǇҴŶdŚƶǇDӎŚŝ͕<ĞŶǇĂKŬƵƐŚŝ

フレッシュまるいち
代表取締役社長
岡 寛孝
部長代理

上遠野直樹

（ながせ・ひろゆき）（かとうの・なおき）

工場長
佐藤謙一

（さとう・けんいち）

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

その中でベトナム人実

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

大習生が活躍しているわけです

が、文化も言葉も違う人たちに教えるのは大変では？

エール！
「思いをきちんと持っていると伝わベトナム人技能実習生
グエン・ティ・アイン・ダオ

る」ということを、今回は実感しま

ベトナム人技能実習生
ブイ・ティ・フーン・ラン

われも努力してちゃんと会話ができるレベルになっていかした。それがないと、いくら上から株式会社ニチレイ代表取締役社長
大 顕也

ひとくちに「鮭」と言っても、種類や産地、季節などによってサイズや形、脂ののりも違う。ムダなく安定した味と品質に仕上げるためには、人の目と手が不可欠

言っても現場はバラバラになってし（おおくし・けんや）どんなチャレンジ？

まいます。皆さんの目指すところが、
ዞ ዛዅǫ

機械化が難しい水産加工業では、人手不足が大きな課題。小名浜工場は、
東日本大震災で大きな被害を受けた福島県いわき市にあり、人口減少や高齢化などが相まって地元の働き手減少が深刻化している。そこで2015
年から外国人技能実習生を受け入れ、高い加工技術と品質を守りながら事業を発展させていこうとしている。

vol. 57

OriOri

一人ひとり表現は違っても、ዒ዆× ዓዔ×ዛ ዅዅዚ኷኷¿ዉ ዅ¯ዒዒኸ¯዆ዔǤኾዖዎ ǡዊ Ǧዓዜ ዋዉ኶዁዆ዖኼ¯ዒ¯ኸዔÀ0Øኼ኷ǡዎ኷×ǡ¿኶ዅ¯ዒ¯ዋዛዓ
²ዌǤ¿ኼǡዝ£ʹͲͳͷ ïØኽ¯ኹዅኼዠ ኼዛዔ ǡዑዠ ዇኶¯ዒኽ዆ዉ ኷ዏኺ ኸǡዣኼ ዅዅ Ǥ

ちゃんと一つになっていvol.57て頼もしいと思いました。
1

22

そういう状態が続いてい

みです。

25

OriOriト み ラ か そ 大 な 方い 言
ナ ん ン ら れ
な は
。 も
ム な
わ
人 私 で い 私 あかと が も （ も笑 わ あらわ ベ 、 ）
、

は り
わ し
か て
、
ら 最
な 初

Dialogue with a Former
Vietnam Trainee via
Videophone!
Do Thi Yen
Visited Japan in 2015. After
working at the Fresh
Maruichi Wakamatsu Plant
as a technical intern trainee
for three years, she learned
the basics of quality control
at the Onahama Plant for
one year. Since returning home to Vietnam, she has
been working at the marine product processing
factory (TPS) established by Nichirei Fresh in 2018.

Fresh Maruichi is a very employee-friendly
company. Everyone, from the president topart-time workers, is kind and friendly, whichmakes every day enjoyable. I had been
studying pharmaceuticals at university in
Vietnam, so when my training ended at the
Wakamatsu Plant, Fresh Maruichi President
Onishi (president at that time) told me to try
working in quality management, so I went to
the Onahama Plant. I have come to feelstrongly about the importance of quality control.
I wanted to work in Japan longer, butwhen I heard the Company planned to build aJapanese factory in Vietnam, I was happy sincethat would enable me to live with my children.
My current goal is to work hard alongside my
TPS colleagues, and first and foremost,generate solid profits!

vol. 57

Human Asset Development

水産加工品の品質と寧な仕事でつくられ（上）機械で三枚にに残ったヒレや血（中）刺身用鮭は中セットで抜く（下）ないように皮など異

さ
ん
が
話
す
の
は
短
く
省
略
さ
れ

Corporate Governance

Each fiscal year, the Nichirei Group provides employees with a one-year educational program. It is devised by the Human Resources
Committee in accordance with Group Education and Training Rules to support the career advancement of each employee.
In addition, to improve employees’ skills, we conduct e-learning courses focused on quality, safety, governance,and compliance for all employees in Japan using the Nichirei intranet.
Level-based training plan
Training plan

Objective

TargetGeneral managers,
department managers

Leader Training

Creating true managers: Fostering human assets able to play a part in creating a strong
and autonomous organization which discovers problems that need to be solved andcreates its own solutions to become an organization that is relied on by businesses.

Managerial staff

Evaluator Training

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

New attendees (such as
recent graduates, careerhires, transferred employees)

Facilitation Training

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

All employees

Training for Newly
Appointed Managers

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

Newly appointed
managers

First Career Training

To inculcate basic behaviors essential for human assets to produce results expected by theCompany and supervisors.

New hires, employees
in their second and thirdyears of employment

New Employee Training• To reorient the mindset from that of a student to that of an employee (teaches proactive
behavior, disciplined behavior, and expected business etiquette)• To promote understanding of the Nichirei Group and a sense of belonging

New hires, employees
in their second and thirdyears of employment

Investor Information/
Corporate Information

To foster management capabilities, world-standard leadership, and decision-making
criteria by cultivating ideas based on broad perspectives.

Next-generation Management
Team Development Program

Financial Data

Executive officers

Topics

To stimulate better management decisions, improve organizational growth, and businessperformance. Changes in the thinking of executives is expected to have a ripple effect on
employees, resulting in improved productivity.

Executive Coaching

ダ で
オ 使
う
勉 言
強 葉
し が
た わ
と か
き ら
は な
、 く
丁 て
寧 。

Initiatives to Resolve
Social Issues

けば、伝統を受け継ぐ人
Articles introducing the Onahama Factoryin theも出てきて、新しいチャレンGroup's in-house magazine (left: Japanese,right:
ジもできる。次Vietnamese)の飛躍が楽し

ダ す く
オ 。 り
話
工
し
場
て
の
く
専
れ
門
る
用
。
語
優
は
し
、
い
毎
日
で

Business Strategy

水産加工の現場は年々高齢化。小名浜工場では1/3が外国人技能実習生

佐藤の問題ですね。まずはこちら

あぁ！ 私も仕事で中国

OriOri

水産加工の人手不足に外国人技能実習生と挑む（おか・ひろたか）

A Vietnamese technical intern trainee who worked at the Fresh
Maruichi Onahama Plant for four years starting in 2015 continues
to perform quality control work at the newly established Nichirei
Fresh fish processing plant in Vietnam. She plays an active role inher home country by utilizing what he learned at food
manufacturing sites and by doing quality control-related work inJapan. In FY2021, one former foreign technical intern trainee
began work at the same Vietnamese plant. Nichirei plans tocontinue supporting the career advancement of its foreign trainees.
230዇¯ዐዛዓǡኼ¯ ዄዞ዆ዛዓ  Øዉ Ǥ¯ዎ ዄ¯ዅ£   ዓዖ²ዎ  ዚኼ¯ 
ዔÂǲØዎኼኽ¿¿ዓዉ ǡዎዠ ዅ× ዉዔ²ǳǤ

第2回

製造課長代理
長瀬弘行

で
大
、
日
本 将 皆
に 来 さ
行 の ん
き 夢 の
た は 将
い 、 来
人 ベ の
に ト 夢
日 ナ は
本 ム ？

立 こ ま ベ い 教 勉 ダ の 強
ち ろ だ ト つ え 強 オ 店 しや たた が 衛 ナ も た しい 多 生 ム き い て 私 会 い
で い 管 の れ で 、 は 社 です の 理 一 い す ベ 日 を す。 で の 般 に 。 ト 本 持 。
の ち そ
、 意 的
し 小 ナዠ
îዔዠ
ኼዛዔ
ዉ
改 識 な て 名 ム 衛 た れ ዜ ǣ ኷ዅኸ¯዆ዅዙ¯ዒ善 が 工 い 浜 の 生 い で኶  
工 工 管 で 、の 低 場 ま ዅዅዚ኷኷Ǥ役 い は す 場 場 理 す 自に と 、 。 は で を 。 分

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

フレッシュまるいち小名浜工場

ま ず は 日 本 人の教 育 か らの言っていることを理解してえ出すと、話ができなくなっと、比較的単純なのかと思っちゃうんですよね。スピードた の で す が、 現 場 を 見 る と、にもついていけないし。でも、もらわないと、会話も仕事も忙しい現場の人たちには嫌が成り立たないので。特に、地られませんでしたか？

細かい気配りが必要な工程が長瀬 なくはないです。でも、多く、さらに「鮭」と言ってよ。それで、まずは受け入れ

元の浜の人は早口なんです

る側の日本人従業員の教育かもサイズも形もマチマチなこら始めました。とにかくゆっ

もう日本人だけでは現場が回

長瀬

くり易しい言葉で、文章より

自 然 の 生 き 物 な の で、

本当に一匹ずつ違います。同

らないのは事実なので、われじ塩分濃度の液に同じ時間漬も 単 語 で 話 し て、 と。「 明 日ないとダメだと。

は事務所に集まってくださ佐藤 「言ったのにやってくれ

け込んでも、同じ味には仕上に行っていた時期があるので、がらないんです。

よくわかります。文法とか考い」ではなく、「明日」「事務じるんです。

所 」「 来 る ね 」 の ほ う が、 通

大はい。ただ、われわれ

ベテランの技術と経験

佐藤

大

ベテランが引退したときのこが不可欠なわけですね。

とを考えないといけないので、近年はデータをきちんと取っとに驚きました。

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

行き届いていること。働いている皆さんも、きびきびと元

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

現 在 小 名 浜 工 場 で は、人のベトナム人実習生を受

14

佐藤

け入れています。従業員全体の約３分の１で、大きな戦力

鮭と魚卵の加工というになっています。

大Top ic

工 い
場 。
に 私
来 は
て 、
、 日
い 本
い に
経 来
験 て
が 、
で こ
き の

Management Strategy

せ 工 ラ をる 場 ン 勉強
仲 に
間 も 日 しが い 本 たで ろ で い友でき いて ろ だ す、 な ち 。
と こ が
て と で
も を き
嬉 話 て
、

56

Initiatives to Resolve Social Issues

Occupational Health and Safety
If employees are to maximize their abilities and potential, they must be physically and mentally healthy, and work in a safe,
comfortable environment. Because Nichirei considers our employees to be irreplaceable, we are working with them to createa safe, open, and invigorating work environment.

で
き
て
い
た
の
か
、
教
え
方
に
問

Health and Safety Committee

き な
あ い
り 」
ま と
す い
。 う
そ 苦
の 情
と は
き 、
は と
、 き
相 ど

大

https://nichirei.disclosure.site/en/themes/125

The Nichirei Group established Health and Safety Committees, to fulﬁll the requirements of Japan’s Industrial Safety and Health
Act, while striving to promote health and safety management aimed at preventing occupational accidents and managing thehealth of employees. At our Head Ofﬁce, as well as at each branch ofﬁce, we strive to prevent 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 toother working environment improvement efforts we undertake, tailored to the conditions of each workplace.

両 訳
方 し
を て
渡 ベ
す ト
よ ナ
う ム
に 語
し と
て 日
い 本
ま 語
す の
。

逆
に
、
ベ
ト
ナ
ム
人
実
習
生

を 大
終
え
て そ
帰 し
国 て
し 、
た 実
人 習
が 期
、 間

ト
ナ
ム
の
水
産
加
工
場
ト
ラ

Health Management Initiatives
https://nichirei.disclosure.site/en/themes/125

Nichirei Group Health Declaration

愛称「ランさん」2018年来日
愛称「ダオさん」2017年来日
愛称「チーさん」2016年来日

OriOrivol.5724

Creating Savory Moments.
With that core value deep in ourhearts, every single person who
works at Nichirei Group will strive
for good health maintenance.
Basic policy
1. We will promote the creation of a workspace thathas a lively cooperation between labor andmanagement, based on the ideal that states that
good work has its basis in a healthy mind and body.
2. Each of our employees will work hard to increase
his/her health awareness, and will take an activerole in creating a work environment that
promotes good health.

Recognizing employees as corporate assets and these people’s health as animportant management issue for a company seeking sustainable growth, in fiscal
2016 Nichirei set up the Health Promotion Group. It is a dedicated healthmanagement section within the Human Resources Strategy & General Affairs division.
In fiscal 2017, we formulated the Nichirei Group Health Declaration andGroup Health Management Standards. In addition to disseminating thedeclaration both inside and outside the Company, to promote Group-wide health
we have appointed a holding company health promotion manager, as well as
health promotion managers and representatives at each Group company.
Regular medical checkups—including X-ray screening for the early detectionof TB and cancer—together with thorough follow-up measures are led byoccupational health staff. For our small offices and employees overseas,
we conduct remote interviews using information and communication
technology systems.
■ Post Medical Exam Follow-up
JudgmentD

3. We will strive for health management based on
the three pillars of “health maintenance andimprovement,” “mental health measures,” and“safety and hygiene control.”High-risk
segment

C
B■ Health Management Action Plan (Five-Year)

Healthmanagement

FY2017FY2018FY2019FY2020

FY2021

Organization
construction

Penetration Establishment

Top runner

Ambassador

Formulation ofGroup healthmanagement standards

Formulation ofhealth promotion
center concept

Nichirei brandestablishment

Health school deployment

Distribution

Organizational
structure &
professionals

57

Disseminate information
on health management,
implementation system
and initiatives

Healthpromotion group

Disseminate stories about healthmanagement details and achievements

Health promotion center

Extremely high-risk
segment

A

Moderate risk
segment
At risk segment

・Recommended consultation,
consultation confirmation(Health Promotion Center, industrial
physicians + business owners)
・Specific health guidance(health insurance association)

Healthy segment

1. Normal work is possible
Employment
determination

・Consultation confirmation(Health Promotion Center +business owners)
・Exacerbation prevention program(health insurance association)

2. Conditional employment
restrictions
3. Employment restrictions

・Interview with industrial
physician・Consultation confirmation
・Public health nurse
interview
・Consultation
recommendations
・Self-management

After health examinations, based on the judgment of an industrial physician, follow-ups will be
conducted with those who should consider employment restrictions (some of D rank segment) via
the persons in charge at each operating company.
Afterwards, if ongoing support is required, a public health nurse will contact the employee via
email or in writing. After confirming consultation status, interviews by public health nurses andindustrial physicians will be conducted as needed.

■ Overall Health and Smoking Cessation ProgramsGroup Overview

Since 2016, the Nichirei Group has been providing lectures and participatory
events led by professionals. These include public health nurses, registereddietitians, and health fitness professionals, who provide employees at risk forlifestyle-related diseases with specific health promotion opportunities.
In FY2020. a total of 1,200 people participated in 14 meetings on a wide
range of themes, such as exercise guidance, diet, sleep improvement, andthe health of working women.
In addition, we launched a smoking cessation program in 2019. Of the88 people who participated, 34 succeeded in quitting smoking.

Management Strategyॽॳঞॖ௏೨ஜછ

■ Health White Paper, Health Management Guidebook

ॽॳঞॖॢঝ‫ش‬উ௏೨്੉
َउःखःໍ৑॑ඍऐञःُ
जभ୳ः॑পજप
ॽॳঞॖॢঝ‫ش‬উद௮ऎ঳যऱधॉभ
௏೨तऎॉप਄ॉੌाऽघ

Business Strategy

Nichirei publishes a health white paper and a health management guidebook(provided to all employees in July 2020) in order to foster awareness of healthissues among employees and encourage them to improve their health.

‫ق‬ফ২ৰౚ‫ك‬⌆ॽॳঞॖযহ੕ਜ৖ॽॳঞॖ௏೨௓ਤ७থॱ‫ش‬ॽॳঞॖ௏೨৳૫ੌ়

Logistics Center Safety and Quality-related Training

Specialized course for developing
the skill of conﬁrming safety whiledriving a forklift using the “pointand call out” method

Initiatives to Resolve
Social Issues
Corporate Governance

Placing importance on quality, the environment, and safety, the Nichirei
Logistics Group has opened safety and quality-related training centers acrossJapan. These facilities enable logistics staff to acquire knowledge regarding
safety and quality, as well as to develop skills and an appropriate mindset.
The core training content includes “reconﬁrmation of basic knowledge
through classroom learning,” information about “dangerous experiences,” andthe “reconﬁrmation of basic forklift operations.” Videos and illustrations areused to enable students to develop an intuitive understanding of the topics.
All training programs and teaching materials are original, and veteranemployees with a wealth of knowledge and experience give lectures whileproviding hands-on experience as part of a systematic curriculum.
At logistics centers, heavy loads are carried using forklifts to enablecargo to be sorted at high places. We thus strive to improve occupationalsafety and quality by incorporating into the curriculum practical training toensure that equipment is correctly used to prevent items from falling.

Health white paper (left) , health management guidebook (right)

Conﬁrming the usefulness of“falling prevention equipment”
while suspended in midair

Food Factory Safety
TopicsThe Nichirei Group provides occupational safety- and health-related training for technicalinterns from abroad. We are doing this to prevent occupational accidents and facilitate healthmanagement for those unfamiliar with life in Japan, while at the same time helping the trainees
improve their Japanese-language skills. Our goal is to create workplaces where all Nichirei
Group employees can work safely and healthily with purpose.

A poster for Vietnamese
employees

A poster for Japanese
speech contest

Investor Information/
Corporate Information

Occupational Safety and Health Initiatives for Foreign Technical Interns

Financial Data

Nichirei Foods has set up three pillars of its safety-related activities, namely, safety patrols, near-miss-related activities, and the
mandatory observation of safety rules. These are food factory priority measures.
Safety patrols are customized for each factory and their efficacy is based on site feedback. Patrols are conducted mainly in theearly morning and late at night, when managers are short-handed. We ask employees to share work-related problems and opinions
relevant to those times.
Near-miss-related activities are designed to inform employees about possible dangers through the sharing of information about
near accidents. Evaluation criteria have been reconfirmed, to ensure that there are no variations in near-miss evaluation methods,
while a mechanism is in place to ensure preventive steps are taken.
We try to ensure that safety-related rules are recognized, correctly understood, and strictly observed.

58

Initiatives to Resolve Social Issues

Providing Safe Products and Services
Quality Assurance Approachand Improvement Cycle

Basic Policy on Quality Assurance
https://www.nichirei.co.jp/english/safety/concept

Improvements

The Nichirei Group’s fundamental policy on quality assurance ensures thequality and safety of the food products and services we provide, so thatthey will not be hazardous to the health of consumers. At the same time,
we are maintaining and improving on Group-wide levels of quality control,
quality assurance, and customer satisfaction.
We aim for further enhancements by implementing the PDCA cyclein Quality management system and Food safety management systemand encouraging improvements when deficiencies are found throughinternal audits and quality factory audits.

Risk
management

Food safety■ Regular Audits
Quality assurance
audit

FY2018FY2019Foodsafeguards

FY2020Japan

Overseas

Japan

Overseas

Japan

Overseas

Number of annual
Group audit(Japan/Overseas)

156

15

66

38

54

20

Annual Group
implementation rate(compared to plan)

100 %

88 %

97 %

100 %

89 %

80 %

Internal audits
Factory audits

Regular audits are conducted by each Group company based on an annual plan. The plans are determined by rationally andobjectively evaluating the magnitude of possible risks, based on risk management, whether or not certification ofinternational standards has been obtained, the quantity of products handled annually, and product characteristics.
PDCA is also used in regular audits. Audit results are used as a reference when determining audit policies and target
sites when developing audit plans for the upcoming year.

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

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

Operating Company

Rate of Certification5
FY2018FY2019FY2020Nichirei Foods

13/15

14/15

14/15

Nichirei Fresh 6

6/7

7/7

7/7

Nichirei Foods

13/15

3/15

3/15

Nichirei Fresh

8/8

8/9

8/9

Nichirei Logistics Group

105/112104/115

81/115

Nichirei Foods

13/15

14/15

14/15

Nichirei Fresh

6/8

7/9

7/9

Nichirei Logistics Group

2/112

2/115

2/115

ISO14001 (Environmental management system)

Nichirei Foods

11/15

11/15

11/15

ISO13485 (Medical devices / In vitro diagnostics)

Nichirei Biosciences

2/2

2/2

2/2

The HACCP system1

ISO9001(Quality management system)FSSC220002,ISO220003,SQF4(Food safety management system)

7* Fiscal years (FY) indicate years ended March 31.

59

Notes:
1. HACCP: Developed in the United States during
the 1960s for the aerospace industry, the
HACCP system is an international management
method for food production that aims to prevent
hazards during the manufacturing process byanalyzing hazards and establishing important
control points.
2. FSSC 22000: An international management
system related to food safety that is based on
ISO 22000.
3. ISO 22000: An international standard related tofood safety management systems for reducing
food safety risks that is based on the HACCP
food sanitation control techniques.
4. SQF (Safe Quality Food) certification provides
assurance that the product being purchased
meets strict international food safety and quality
standards such as HACCP. In countries outsideof Europe, it is the program recognized by the
Global Food Safety Initiative (GFSI).
5. Target business establishments ratio:
Consolidated subsidiary businessestablishments in Japan (food factories,
logistics centers, etc.)
6. Target business establishments excluding
Nichirei Fresh Farm
7. Switching to FSSC22000

Group Overview

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

Management Strategy

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

Business Strategy

Building of Traceability
https://sustainability-cms-nichirei-s3.s3-ap-northeast-1.amazonaws.com/uploads/response_file/file/142/csr2019en.pdf#page=68

Initiatives to Resolve
Social Issues

To always provide safe, reliable, and high-quality food, the Nichirei Group conducts rigorous quality controls and inspections,from the ingredients to the products and has built a traceability system that matches the distinguishing characteristics ofeach product. In the event of an accident, enhanced traceability would prevent damage from spreading and enable rapid
investigation of the cause. We would also provide prompt and accurate information to alleviate consumer concerns.
The building of traceability requires collaboration and cooperation on the part of the ingredient suppliers, manufacturers
and distributors in the supply chain.
The Nichirei Group regularly holds study sessions to deepen shared awareness with regard to quality-related information. To
digitize and link information, we are also promoting the utilization of our own system that can be centrally controlled.

Corporate GovernanceTraceability in the case of frozen green soybeans (illustration)
What the Trace Code Tells You

２０２０．１０．２３／ＥＢ
Best-by date

Factory code

１３Ｂ０３ １ Ｆ４０１
Arrived Feb. 13 Truck number

Farm code
Production line number
Topics

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

Financial Data

The trace code allows you to trace aproduct back to its place of cultivation.
Trace codes are printed on these
Nichirei Foods’ frozen green soybeans
to trace the cultivation and production
management. If you know how to readthese codes, you can trace the entire
history of a product, from thecultivation management status in thefield to the conditions in the factory.
Nichirei Foods is using the trace codes
to conduct ongoing improvements
based on its discussions with local
producers, in order to better respondto customers’ needs.

安全第一 品質第 一
安全・品質の目標

Safe Workplaces, Better Service

The Nichirei Logistics Group sets themes four times a year designed to put safety andquality first in warehouses. It also conducts accident prevention activities at all domestic
facilities (114 locations).

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

第1回

第2回

Safety and quality awareness poster

2020年4月13日
（月）
～19 日
（日）

リーチイン走行の徹底

第3回

商品溶解事故の防止

第4回

（月）
～26日
（日）
2020年7月20日

実施期間

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

Investor Information/
Corporate Information

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

60Corporate Governance

Message from the Chairman

Managerial reforms,
better Groupmanagement ahead
Kunio Otani
Chairman of the Board
Representative Director, Chairman

Characteristics of Nichirei Group Governance and Expectations of Outside Directors
Companies that are public organizations and, as such, must facilitate the mutual coexistence of stakeholders, must conduct theiractivities according to societal norms and market standards.
Corporate governance plays an important role in this regard, ensuring that transparent, fair, swift, and resolute decisions are
made, thereby increasing long-term corporate value. At the same time, corporate governance requires the implementation ofself-directed reforms to function properly.
Separating the execution and supervision of management, corporate governance requires two monitoring activities. The first is
scrutinizing through internal risk controls by executive officers responsible for management.
The second is scrutinizing management through external controls, namely, the board of directors and audit and supervisoryboard members, as well as by shareholders and accounting auditors. In both cases, a spirit of corporate compliance and a healthy
corporate culture are vital for proper governance.
The Nichirei Group has a holding company structure that integrates four Group companies, and our basic management policy under
this structure emphasizes transparency, simplicity, and decentralization of authority. As we apply this policy, we are promoting thecreation of a corporate culture that enables us to generate value while sharing the abundant wisdom we have acquired through thediversity of our Group businesses.
Furthermore, in accordance with our Group mission to Focus on Lifestyles, and Provide True Satisfaction, in April 2019 we
adopted a long-term vision that we 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. Essentially, our vision is
focused on resolving social issues through all of our businesses.

61

The Board of Directors, which is responsible for monitoring through external controls, has added three outside directors since theGroup Overview

fiscal year ended March 31, 2006, and currently has 10 members, including seven inside and three outside directors. Despite its
small size, the structure of our Board of Directors enables it to properly supervise operational execution.
Outside directors are expected to use their respective independent standpoints to contribute to effective and efficientdecision-making within the Board. Their duties include general supervision of management, which entails the oversight of potential
conflicts of interest from a practical perspective based on the directors’ abundant expertise and experience in the field of corporate

Management Strategy

management, and providing advice on the direction of Group management strategies and medium- to long-term policies and issues.
Outside directors meet with members of the Audit & Supervisory Board when necessary. This board currently has a total of fivemembers, two of whom are inside (full-time), while three are outside Board members.

Evaluating the Governance of the Board of Directors
Business Strategy

Improving management efficiency by ensuring sound management practices (to improve corporate value and business performance) is one of the major purposes of corporate governance. In order to fulfill this purpose, proper corporate governance must
examine whether the Board of Directors is performing as expected.
Accordingly, Nichirei’s Board of Directors and Audit & Supervisory Board (totaling 15 individuals) conduct an annual Board ofutilizes the results of retrospective questionnaires and individual interviews. We have increased the objectivity of the entire evaluation
process by accepting support from outside experts and outsourcing elements of the procedure when necessary.
In fiscal 2020, these evaluations produced the opinion that Nichirei’s Board of Directors conducts productive discussions, while
maintaining an atmosphere in which it is easy to speak one’s thoughts.

Initiatives to Resolve
Social Issues

Directors evaluation. The final evaluation report is compiled based on a five-stage evaluation process and a comment section, andCorporate Governance

Based on this assessment, we feel that procedures and the current state of discussions within the Board of Directors are
steadily evolving. The fiscal 2020 evaluations favorably viewed adjustments to the Nominating Advisory Committee and theRemuneration Advisory Committee, which are advisory bodies to the Board of Directors.
Meanwhile, the free comment section of the evaluation report has several remarks related to increasing the depth of the
discussions held by the Board of Directors, including comments concerning the achievement of an ideal degree of Board diversity,
the reinvigoration of discussions regarding succession plans within the Nominating Advisory Committee, and the improved quality ofagenda items submitted to the Board for discussion.

Topics

We will continue to conduct regular evaluations of our directors in a bid to make the Board increasingly effective.

Efforts to Enhance Corporate Governance
Financial Data

It is said that management results are determined by the quality of on-site capabilities and decision-making, and I find thathigh-quality decision-making results when management teams can produce timely, rational decisions and quickly adjust theirtrajectories as necessary. Thus, we will continue to implement self-directed managerial reforms based on the results of Board of
Director evaluations as we work to boost the quality of our Group management.
our endeavors to strengthen our effective corporate governance with the goal of raising our medium- to long-term corporate value.
We humbly request continued support from our shareholders, investors, and other stakeholders as we pursue these targets.

Investor Information/
Corporate Information

In future, we will strive to achieve sustainable growth through value creation that is unique to the Nichirei Group, and continue

62

Corporate Governance

Message from the Outside Directors

Management Should Evolve,
Flexibly Respond to Market Changes
Shizuka Uzawa
Outside Director

our years have passed since I was blessed with the opportunity
to participate in Nichirei’s management as an outside director. I
feel that procedures and the state of discussions held by the
Board of Directors have steadily evolved during this period, as we havebecome able to regulate and adjust matters for discussion within the
Board and voluntarily participate in the Management Committee, which
serves as an advisory body to the president.
During the meetings held by these bodies, I am afforded theopportunity to speak based upon my management experience, and am
confident that my views have been particularly helpful when examining
overseas investment projects, as I have provided notable examples ofboth successes and failures in this regard.
Further, when we revised Nichirei’s director compensation system,
the Company’s management was fully prepared for a significant
increase in the variable portion of compensation and accepted thatmanagement results would impact stock compensation.
Under the leadership of the president, we have identified thematerial matters through discussions held during the Nichirei Group
Strategy Committee. Management personnel and representatives ofsenior staff from all Group companies participate in these meetings,
which serve as a good opportunity to share information regarding

F

Nichirei’s managerial aims. They also help me identify next-generation
human resources as chairman of the Nominating Advisory Committee.
When incorporating the material matters that have been identified
into our measures, I would like management to take final responsibility
for their implementation while respecting objective and professional
opinions from external think tanks and experts.
The COVID-19 pandemic has caused rapid changes in the way
business is conducted. However, Nichirei’s two main pillars—frozen
foods and temperature-controlled logistics—have incurred negligible
impact compared with other businesses, due to their importance interms of societal infrastructure.
As someone who has experienced the rise and fall of the textile
industry, I nevertheless believe in the need to discover and develop
next-generation cash cows while the central pillars hold firm.
Thus I sincerely hope that Nichirei management will continue to
evolve, while flexibly responding to changes in the market throughexpansion in sales from pending projects overseas and active
participation in the bioscience business, which is currently experiencing
heavy demand. I wish to continue contributing as an essential asset for
Nichirei by maintaining my status as one of its firm—and sometimes
potentially irritating—supporters.

Food Enriches People’s Lives,
Boosts Sense of Well-being
Kuniko Shoji
Outside Director

63Group Overview

Materiality Indicative ofNichirei's Resolve
Mieko Wanibuchi
Outside Director

Management Strategy
Corporate Governance
TopicsFinancial Data
Investor Information/
Corporate Information

strive to objectively monitor the progress made toward
these goals.
Nichirei’s Board of Directors serves as an open forum forfree and easy discussion. I am permitted to participate in theManagement Committee, which functions as an advisory bodyto the president, and am granted opportunities to frankly sharemy opinions within the Nominating Advisory Committee andthe Remuneration Advisory Committee.
By allowing our participation in these organizations, theNichirei Group ensures that its management remains soundand transparent. In the future, I would like to visit Nichirei’s
regional facilities and factories to hear firsthand the opinionsof employees.
As food and health become subjects of ever greater
societal interest, I will support all employees of the Nichirei Groupas they perform their work with collective pride in their objectiveof continuing to provide support for good eating habits andhealth. At the same time, I wish to contribute to the Company’s
growth by sharing my past experience for its ultimate benefit.

Initiatives to Resolve
Social Issues

believe that Nichirei’s vision to support good eating
habits and health is splendid. I have been involved in
the medical care business for a long time and am
convinced of the importance of perceiving human health fromvarious standpoints, ranging from medical treatment tohealthcare, of which food is an important component.
I also believe that food enriches people’s lives and leads toa sense of well-being through the delicious flavors and fun
opportunities it provides.
At the same time, in order to ensure that food continues
to enrich people’s lives, we cannot forget that we must show
consideration for the environment, emphasize quality andsafety, and see that our activities are ethical.
I think that the proactive and reactive measuresestablished in response to issues which Nichirei recently
identified as materiality are well balanced when combined withassociated references concerning human resources. In future,
the Company’s businesses will all endeavor to achieve goals
associated with materiality, and I; as an outside director, I willIdecisions represent a guidepost that is both indicative ofNichirei’s resolve and a major step forward in terms ofindicating the goals its employees should pursue.
I believe that the role of outside directors is to provide expert
opinions that offer perspectives that differ from those comingfrom within the Company. As a woman and a small business
manager, I have a relatively close connection with consumers.
I aim to provide insight from the perspective of customers andusers that is not accessible from within the Company.
Nichirei, which was like an airplane ready to take off after it
had undergone the necessary inspections, has had its visibility
clouded by the fog of the novel coronavirus. The Company
thus must reconsider its course, reevaluate its global
development, and reexamine climate change-related risks.
Under the leadership of the representative director andpresident, I hope that all individuals and organizations within
the Nichirei Group unite under a single strong bond to
implement meaningful reforms.

Business Strategy

he Nichirei Group maintains a close relationship with
consumers, and its existence is grounded incustomer trust.
The Nichirei Group has quickly and steadily reformed its
governance and management. To this end, it has conducted
self-directed evaluations regarding the operational status ofits Board of Directors with support from external experts.
Further, it has appointed outside directors to serve as
chairmen of the Nominating Advisory Committee and theRemuneration Advisory Committee.
In pursuit of the long-term management goals toward for2030, we have held repeated discussions regarding materiality
based on The Nichirei Pledge, the 2017 revision of our CSR
basic policy. We are also striving to enrich our understandingof shareholders, so that Nichirei can fulfill its role as a company
that contributes to the achievement of a sustainable society
by supporting good eating habits and health.
The materiality has been identified and approved by the
Board of Directors through discussions with experts. SuchT

64Corporate GovernanceCorporate Governance
Basic Policy and Framework
On the basis of its holding company structure, the Group engages in business through its Group companies across a wide range of ﬁelds
which include processed foods, marine products, meat and poultry products, logistics, and biosciences. In pursuit of sustainable growth
and the enhancement of corporate value over the medium to long term, the Company's Board of Directors formulates Group strategies
and supervises the business execution of operating companies.
The holding company maintains awareness regarding the principles of the Corporate Governance Code and views the achievementof fair and transparent management as an important management issue. Accordingly, under the supervision of the Board of Directors, wewill promote appropriate resource allocation, speed up decision-making, and ensure thorough compliance while continuing to strengthen
our governance.
In addition, we have established ourselves as a company with Audit & Supervisory Board system, an institutional design specified
within the Companies Act of Japan.
Corporate Governance https://www.nichirei.co.jp/english/corpo/management/governance.html

107

Inside Directors

35Outside Directors

Audit & Supervisory
Board Members

Directors

2

3

Female Directors

Diagram of Corporate Governance Structure (As of June 24, 2020)

Outside Audit &Supervisory Board
Members

General Meeting of Shareholders
Appointment/dismissal

Appointment/dismissal

Holding company

Appointment/
dismissal

Consultative bodies
Nominating Advisory
Committee
Remuneration Advisory
Committee• Examination Committee• Intellectual Property
Management Committee

AnswerBoard of Directors
10 Directors including
3 Outside Directors• Group Strategy
Committee• Group Commitment
Committee• Group Monitoring
Committee

Audit

The Audit &Supervisory Board
5 Audit &Supervisory Board
Members including
3 Outside Members

Cooperation

Supervision

Representative Director,
President
Management Committee(Executive Officers)
Corporate Staff Divisions

Operating Companies

Cooperation

Audit
Audit

Corporate
Internal Audit
Division

Cooperation

Accounting Auditor• Group Human Resources
Committee• Group Risk Management
Committee• Group Environmental
Protection Committee• Group Quality AssuranceCommittee• Group Internal Control
Committee• Group Officer Examination
Committee• Social Action Program
Committee

Appointment

Audit
Audit

Corporate Governance Report https://www.nichirei.co.jp/sites/default/files/inline-images/english/corpo/pdf/governance_e.pdf

65Activity Aimed at Strengthening
Nichirei Group’s Corporate governance Structure

Status of the Establishment of a Voluntary Committee,
Its Composition and the Attributes of Its Chairperson

Nominating Advisory
Committee

Voluntary commitment thatis functionally equivalent
to a remunerationcommittee

2001

2003

Remuneration
Advisory Committee

Number of members

5

4Inside Directors

2

1

Outside Directors

3

3

Audit & Supervisory
Board Members

00Chairperson

Outside Director

Outside Director

2005

・Shift to three independent outside
directors structureFirst female outside director (one) installed
・Retirement bonuses for directors discontinued

ーーーーーー

Board of Directors

19

19

18

Nominating Advisory Committee

1

2

2

Remuneration Advisory Committee

1

6

3

Management Committee

21

23

20

Group Human Resources Committee

2

2

2

Group Risk Management Committee

2

2

2

Group Environmental Protection Committee

3

3

2

Group Quality Assurance Committee

2

2

2

Group Internal Control Committee

1

1

1

Group Officer Examination Committee *ーーSocial Action Program Committee

11*Meetings are called by the chairperson on an as-needed basis

2015

・Board of Directors effectivenessevaluations started
Discloses result summaries

・Discontinuation of rules regarding the
2016high-volume purchase of Nichirei sharecertificates, etc. (Anti-takeover measures)
・Number of female outside directors
increased to two

2018

・Formulation of Nichirei Group
Disclosure Policy
・Revision of director compensation system

11

Established the Nomination and Remuneration
Advisory Committees as advisory bodies for the
Board of Directors

2019・Revision of the Basic Policy on
Corporate Governance

Revisions to capital policy and other protocols andadjustments to maximum terms of office for
Outside Audit ＆ Supervisory Board Members that
aim to ensure their independence

Investor Information/
Corporate Information

FY2020・Corporate Governance
Basic Policy establishedFinancial Data

FY2019・Shift to five auditor structure(including three independent outsidecompany auditors)

Topics

FY2018

・Shortening of director tenure to one year

Tenures were shortened to increase the mobility of
our response to changes in the management
environment.

2012

Outside Audit & Supervisory
Board Members

Number of Meetings Held2006

Corporate GovernanceOutside Directors• Management Committee• Group Human Resources
Committee• Group Environmental
Protection Committee• Group Quality AssuranceCommittee• Social Action Program
Committee

These were abolished to enable us to review ourdirector compensation system as part of our efforts to
conduct management reform and implement acompensation system that is linked to businessperformance and results.

Initiatives to Resolve
Social Issues

Audit & Supervisory Board
Members

This move is aimed at establishing a management
system through which both the holding company,
which is responsible for Nichirei Group’s overall
strategy and the Group’s operational companies,
which handle business execution, can demonstrate
their responsibility and mobility.

Business Strategy

Inside Directors• Boards of Directors• Group Risk
Management
Committee• Group Internal
Control Committee• Group Officer
Examination
Committee

Increasing the transparency of management andstrengthening the supervisory function of the Board of
Directors

・Shift to holding company system

Status of appointment

Representative Director,
President

Enhancement of the Board of Directors’decision-making and supervisory functions

・Implementation of outside director system

Status of Appointment of Members
to the Board of Directors and Various Committees

Representative Director,
Chairman・Implementation of executive officer system
Management Strategy

Voluntary commitment thatis functionally equivalent
to a nominating committee

Group Overview

Composition of Committees, Structure Reinforcement

66

Corporate GovernanceCorporate GovernanceEvaluations of Effectiveness, Director Compensation System
Board of Directors Evaluations
As necessary, and with the assistance of outside experts, the Company conducts analyses and evaluations of the Board of
Directors’ activities to ensure its decision-making is effective. Summaries of the results are subsequently disclosed.

Evaluation
procedure

Opinions fromoutsideexperts

Subjects

Directors and Audit & Supervisory Board Members (15 individuals in total)

PeriodJanuary–February 2020

MethodSelf-assessment involving questionnaires conducted by third party experts.

・After combining the opinions of all corporate officers who participated in the questionnaire, I have determined that
Nichirei’s Board of Directors conducts discussions while maintaining an atmosphere in which participants are
comfortable in sharing their views.
・To increase the depth of discussions held by its Board of Directors, ahead of meetings Nichirei is improving thematerials provided, and making more information available, to Outside Directors. They also benefit from receiving
advance briefings, and are permitted to attend internal meetings. Through these and other efforts, Nichirei’s Board
has achieved a considerable degree of overall effectiveness.
・The composition of the Nominating Advisory Committee and the Remuneration Advisory Committee, which function
as advisory bodies for the Board of Directors, have become more relevant due to systemic changes implemented on
January 1, 2020.
・Notable improvements have been made in response to issues identified during the previous fiscal year throughevaluations of the Board’s effectiveness.

Initiative ❶Initiative ❷Initiative ❸Board of Directors
membership

Succession plan

Proposal documents

In recent years, there has been agrowing demand for management toachieve an optimal balance between
diversity and scale, while institutional
investors have been seeking a higher
proportion of independent Outside
Directors. The Nichirei Group has thus
decided to continue conducting
analyses in order to achieve an
optimal Board composition based on
the Group’s management strategy.

Nichirei has confirmed that relevant Group-wide, medium- to long-term
measures are being implemented, primarily by the Nominating Advisory
Committee (which includes the Representative Director, President), in
accordance with Nichirei management principles. In addition, we haveresolved to resume discussions within the Nominating Advisory Committee
concerning personnel requirements for next-generation CEO and corporate
officer candidates, the selection of sample groups for consideration,
training policies, and training plans. Reports on these matters shall bemade to the Board of Directors as necessary. The Company also has
decided to consider increasing opportunities for direct contact between its
outside directors and next-generation management candidates.

Proposal documents concerning
specific agenda items such as
investment and equity participation
projects tend to be lengthy. To
facilitate better understanding on thepart of Board members, we havedecided to provide set-format
executive summaries that present
information drawn from the main textof proposal documents andaccompanying materials.

Director Compensation
To achieve the targets of our medium-term management plan, we have strengthened
director incentives and devised a compensation package for Internal Directors andExecutive Officers. By making stock compensation part of their remuneration, we seethat they share in the same value as our shareholders.

270 million yen or

130 million yen or

Basic compensation

Performance-linked
bonusesless annually

Compensation issued to grant
restricted shares to Directors

Monetary claims
Total amount

100 million yen orless annuallyStockcompensation

Structured remuneration to include stock compensation in addition tobasic compensation and performance-linked bonuses.

less annually

Total number of ordinary sharesissued or sold

70,000 shares orless annually* Executive Officers are eligible for performance-linked
bonuses and stock compensation

67Compliance

Nichirei Group Code of Conduct
1. Compliance with Laws and Regulations Concerning
Respect for Human Rights and Labor
2. Environmental Protection
3. Compliance with Laws and Regulations
and Internal Regulations
4. Management and Preservation of the Company's Property
5. Prohibition on Personal Use of the Company's Property
6. Prohibition on Insider Trading
7. Ensure the Reliability of Financial Information

Business Strategy

8. Management and Use of Information
9. Prohibition of Personal Acts Conflicting with theCompany's Interests
10. Prohibition on Unfair Benefits Given to/Received from
Public Officers or Business Partners
11. Prohibition on Involvement/Trade with Antisocial Forces

Risk Management

Corporate Governance

The Nichirei Group has set up the Group Risk Management Committee, chaired by the Representative Director, President, tomanage the various risks associated with its business activities, in the most appropriate and rational ways from a comprehensive standpoint, and to maximize the Group’s enterprise value. The committee identiﬁes and evaluates Group-wide risks
and Nichirei and its business companies respond 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 the response.
We have also established and implement the Nichirei Group internal control systems to facilitate operational effectiveness and staff ability, ensure the accuracy of ﬁnancial reports, comply with laws and regulations pertinent to our business,and to protect assets.

Initiatives to Resolve
Social Issues

12. Compliance with/reporting of and Consultation on Codeof Conduct

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

Management Strategy

The Nichirei Group is engaging in a variety of initiatives aimed at
improving its corporate ethics by ensuring compliance with thelaws and social norms of all the countries in which it operates.
Accordingly, we have created guidelines for proper employee
behavior in line with laws, our internal regulations, and corporate
ethics, as well as a Code of Conduct and a Code of Conduct
casebook, which provides clear examples of appropriate behavior. These documents also include information concerning
matters related to the prevention of corruption that have been
deemed important from the perspective of international compliance, including insider trading bans and the prohibition ofengagement or trading with antisocial forces. In addition toproviding this information, we conduct employee compliancetraining aimed at ensuring a more pervasive understanding ofcompliance management and a more universal compliancemanagement framework.

Group Overview

Compliance, Risk Management

The Board of Directors

Group Risk Management
Committee

Strategic
businessriskGroup Quality
Assurance Committee
Group Internal
Control Committee
Group Officer
Examination CommitteeIntellectual Property
Management Committee
Examination Committee● Educational anddevelopmental
activities● Implement
action plan

P D
A C

● Reviews forresponsible individuals● Modify andimprove risk
countermeasures● Check status ofcompany-wide controls● Working evaluation of risk

countermeasures● Understand and evaluate risk
● Internal and external audits● Operational testing

Investor Information/
Corporate Information

Risk associatedwith the reporting anddisclosure of financial
information

Classify risks
and manage
them
rationallythrough themostappropriate
methods andbest-suited
departments● Formulate risk
countermeasurepolicies● Establish targets forthe coming fiscal year
● Draw up an action plan

Financial Data

ComplianceriskGroup Environmental
Protection Committee

TopicsRepresentative
Director, President

68Corporate GovernanceDirectors, Auditors and Officers(as of June 24, 2020)

Back row, from left

Kazunori Miki
Executive Officer

Tatsuo Udagawa
Executive Officer

Masahiko Takenaga
Director, Executive Officer

Kazuhiko Umezawa

Director, Executive Officer

Junji Kawasaki

Director, Executive Officer

Yoshifumi Kaneko

Director, Executive Officer

Front row, from left

Kuniko Shoji

Outside Director

69

Mieko Wanibuchi
Outside Director

Kenya Okushi

Representative Director,
President

Group Overview
Management Strategy
Business Strategy
Initiatives to Resolve
Social Issues
Corporate Governance
TopicsAudit & Supervisory
Board Member

Kazuhiko Yasuda
Audit & Supervisory
Board Member

Representative Director, Chairman

Outside Audit& Supervisory
Board Member

Takumi Taguchi

Kiyoshi Asahina
Outside Audit& Supervisory
Board Member

Director, Executive Officer

Muneaki Kiyota
Outside Audit& Supervisory
Board Member

Shizuka Uzawa
Outside Director

Masato Takenaga
Executive Officer

Yutaka Karino
Executive Officer

Investor Information/
Corporate Information

Kunio Otani

Yuhiko Saito

Financial Data

Yasunari Shigeno

70Corporate Governance

Profile(as of June 25, 2020)

Directors

Kunio Otani

Kenya Okushi

Takumi Taguchi

Representative Director,
Chairman

Representative Director,
President

Director, Executive Officer

Number of shares held:

Number of shares held:

Number of shares held:

Board of Director
meeting attendance:

Board of Director
meeting attendance:

Board of Director
meeting attendance:

20,100 shares

12,200 shares

18/18 meetings(100 %)
Mr. Kunio Otani has attained a wealth of experience indivisions such as accounting & tax, strategic planningand corporate supervise as well as corporate
management experience as President of the Company
and its group company. Mainly at the Board of
Directors and other various internal meetings, heprovides opinions and advice from the viewpoint of aposition governing the Group management.
Significant concurrent positions outside the Company
Outside Director, Japan Finance Corporation

18/18 meetings(100 %)
Mr. Kenya Okushi has gained a wealth of experiencein divisions such as manufacturing and businesscoordination of the processed foods business andstrategic planning as well as corporate management
experience as President of a Group company. Mainly
at the Board of Directors and other various
internal meetings, he provides opinions and advice
from his viewpoint as the person in command of theGroup management.

6,100 shares

18/18 meetings(100 %)
Mr. Takumi Taguchi has acquired extensive
experience in accounting & tax and finance divisions.
Mainly at the Board of Directors and other various
internal meetings, he provides opinions and advice
based on his knowledge in accounting, finance andothers.

Outside Directors
Masahiko Takenaga

Shizuka Uzawa

Mieko Wanibuchi

Director,
Executive Officer

Outside Director

Outside Director

Number of shares held:

Number of shares held:

Number of shares held:

Board of Director
meeting attendance:

Board of Director
meeting attendance:

Board of Director
meeting attendance:

10,000 shares

1,500 shares

14/14 meetings*(100 %)

18/18 meetings(100 %)

1,500 shares

16/18 meetings(88.8 %)

Representative Director, President, Nichirei Foods Inc.
Mr. Masahiko Takenaga has gained a wealth ofexperience working at sales divisions in theprocessed foods business and in brand promotion,
manufacturing, and household-use business division.
In addition, he has served as President of a Group
company. Based on his abundant experience, he is
happy to share ideas and makes suggestions at
Board and other internal meetings.

Mr. Shizuka Uzawa has extensive experience as acorporate executive coupled with a wide-ranging
knowledge of finance and accounting and, in theinterest of Group management, provides opinions andadvice during meetings of the Board of Directors andvarious other internal meetings (including meetings of
the Nominating Advisory Committee andRemuneration Advisory Committee).

Ms. Mieko Wanibuchi has worked in corporate
management for many years and leverages theexperience and knowledge acquired through theseendeavors to offer opinions and advice during meetingsof the Board of Directors and various other internal
meetings (including meetings of the Nominating
Advisory Committee and Remuneration Advisory
Committee) from perspectives that include the productand service purchasing behaviors of consumers.

* Mr. Takenaga was appointed at the 101st Ordinary General
Meeting of Shareholders, on June 25, 2019. His Board meeting
attendance record covers the period since then.

Significant concurrent positions outside the Company
Outside Director, Sapporo Holdings LimitedSignificant concurrent positions outside the Company
Representative Director, Chairperson, GINZA TAILOR GROUP CO., LTD.
Representative Director, Chairperson, GINZA TAILOR CO., LTD.
Representative Director, President, GGG Co., Ltd.

Outside Audit & Supervisory Board Members

Yuhiko Saito

Kiyoshi Asahina

Muneaki Kiyiota

Outside Audit &Supervisory Board Member

Outside Audit &Supervisory Board Member

Outside Audit &Supervisory Board Member

Number of shares held:

Number of shares held:

Number of shares held:

Board of Director
meeting attendance:

Board of Director
meeting attendance:

Board of Director
meeting attendance:

300 shares

14/14 meetings *(100 %)Mr. Yuhiko Saito has had a career in the legal
profession, while also holding judicial positions ingovernment office. Having worked as an attorney sinceretiring from public office, he possesses wealth ofexperience and intricate knowledge as a legal expert.

71* Mr. Saito was appointed at the 101st Ordinary General Meeting of
Shareholders, on June 25, 2019. His Board meeting attendance
record covers the period since then.

–

New appointee

Mr. Kiyoshi Asahina engaged in both domestic andforeign business affairs within administrative fields
related to agriculture, forestry, and fisheries for many
years. He has gained a wealth of understanding andexpert insight from having lead independent audits.

–

New appointee

Mr. Muneaki Kiyota has held important positions infinancial institutions, most of which were basedabroad. He then served as a Audit & Supervisory
Board Member and director at a domestic
manufacturing company for approximately 10 years.
He has a great deal of experience in, andunderstanding of, corporate management.

Junji Kawasaki

Kazuhiko Umezawa

Director, Executive Officer

Director, Executive Officer

Director, Executive Officer

Number of shares held:

Number of shares held:

Number of shares held:

Board of Director
meeting attendance:

Board of Director
meeting attendance:

Board of Director
meeting attendance:

5,600 shares

3,500 shares

18/18 meetings(100 %)
Mr. Junji Kawasaki has acquired extensive experiencein quality assurance division through duties that
include performing quality audits and process quality
management and marketing division of the processed
foods business. Mainly at the Board of Directors andother various internal meetings, he provides opinions
and advice based on his knowledge in technology
management and quality assurance.

18/18 meetings(100 %)
Representative Director, President,
Nichirei Logistics Group Inc.
Mr. Kazuhiko Umezawa has abundant operational
experience, including logistics solutions for low-temperaturelogistics business, as well as operational management. He
also possesses considerable management experience frombeing President of a Group company. Mainly at the Board of
Directors and other various internal meetings, he provides
opinions and advice based on his wealth of experience andachievements in the low-temperature logistics business.

Business Strategy

Representative Director, President, Nichirei Fresh Inc.
Mr. Yoshifumi Kaneko has acquired abundant
experience in divisions such as sales, procurement
and logistics of the processed foods business, as wellas corporate management experience as President of
a Group company. Mainly at the Board of Directors
and other various internal meetings, he provides
opinions and advice based on his wealth ofexperience and achievement in Japan and overseas.

7,400 shares

Management Strategy

18/18 meetings(100 %)

Group Overview

Yoshifumi Kaneko

Audit & Supervisory Board Members
Yasunari Shigeno

Kazuhiko Yasuda

Outside Director

Audit & Supervisory
Board Member

Audit & Supervisory
Board Member

Number of shares held:

Number of shares held:

Number of shares held:

Board of Director
meeting attendance:

Board of Director
meeting attendance:

Board of Director
meeting attendance:

700 shares

6,600 shares

Ms. Kuniko Shoji has extensive experience as acorporate manager in the pharmaceutical-relatedindustry and broad knowledge of quality assurance
and R&D. She also offers opinions and advice during
meetings of the Board of Directors and various otherinternal meetings.

18/18 meetings(100 %)Mr. Yasunari Shigeno has attained extensive
experience in sales and administration of the logistics
business as well as corporate management
experience as President of group companies.

18/18 meetings(100 %)

Corporate Governance

17/18 meetings(94.4 %)

4,500 shares

Initiatives to Resolve
Social Issues

Kuniko Shoji

While possessing sufficient knowledge of finance andaccounting, Mr. Kazuhiko Yasuda also has abundant
experience in management, such as accounting & tax
and strategic planning.

TopicsSignificant 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

Executive Officers
Financial Data

Kazunori Miki

Masato Takenaga

Yutaka Karino

Executive Officer
General Manager, Business Management

Executive Officer
General Manager, Strategic Planning

Executive Officer
Representative Director, President,
Nichirei Biosciences Inc.

Executive Officer
General Manager, Human Resources
Strategy & General Affairs

Investor Information/
Corporate Information

Tatsuo Udagawa

72Topics

Stakeholder Engagement
As it engages in global business activities, the Nichirei Group recognizes the importance of communicating and maintaining
dialogue with its diverse stakeholders. To foster deeper mutual understanding, the Group is fostering a number of initiatives,and encouraging the disclosure of relevant information, in order to reflect the expectations and concerns of its stakeholders,
while building corporate value by establishing friendly, long-term relationships.
Stakeholder

Customer

Shareholder/
Investor

Business
partner

TargetPrimary issue

Better customer satisfaction
and corporate branding: tobe achieved through prompt,
appropriate, and sincere
responses to consumer
requests and feedback.

• Quality assurance for
products and services• Proper delivery of information• Supply of delicious food, as
well as greater availability of,and better accessibility to, arich array of meal options• Customer Service Center• Customer satisfaction survey• Website• Social media• Routine• Once a year
• As necessary• As necessary

Deeper understanding of theCompany and higher
corporate value: to beachieved by timely andappropriate disclosures.

• Maintaining and improving
corporate value• Appropriate distributionof profits• Disclosureof accurate information• General Meetings of Shareholders• Financial results briefings• Business information sessions,facility tours• Detailed interviews with individual
investors from Japan and overseas• IR website• Integrated Report• Business Report• Once a year
• Four times a year
• Once a year

Tradeorganization/
NGO/NPO73

Frequency• As necessary• As necessary• Once a year
• Twice a year

Strong, effective, and stablelong-term relationships withbusiness partners
throughout the supply chain• CSR procurement• Mutual development achieved
through customer intimacy• CSR procurement survey
for suppliers• Meetings and seminars with invited
participation from business partners• Survey ongoingsince 2018
• Once a year

Favorable labor–management relations; greater
employee motivation; adynamic organizational
climate• Occupational safety, health• Job satisfaction• Workstyle reform• Health management• Establishment of an internalreporting center• Creation of an employee assistanceand mental health consultation center• Labor–management council• Health and safety committee• Symposiums involving management
and employees• PR brochures• Intranet• Employee award system• Employee satisfaction survey• Employee stress checks• 24 hours per day

Smooth, enduring business
operations as a trusted andrespected company: to beachieved by building
favorable relations withsurrounding communities.

• Harmonious coexistence withlocal communities• Preservation of local
environment• Educational activities in thelocal community• Social contribution activities• Participation in local events• Volunteer activities• Dietary education activities• Food factory and distribution
warehouse tours• Acceptance of internships• Hosting of sporting events• As necessary• As necessary• As necessary• As necessary• TCFD Consortium• Japan Frozen Food Association• Japan Associationof Refrigerated Warehouses• Japan Fisheries Association• Authorized NPO Second
Harvest Japan• World Wide Fund for Nature• Roundtable on Sustainable Palm Oil• As necessary• As necessary• As necessary

EmployeeLocal
community

Mean/method of communication

Collaboration with othercompanies, by taking part inconferences and otherevents involving government
ministries and tradeorganizations; resolving ofsocial issues by collaborating
and cooperating with NGOs
and NPOs in Japanand abroad.

• Climate change• Food loss
• Sustainable public
procurement of food• 24 hours per day• Twice a year
• Once per month• Annual(all worksites)• Four times a year
• Routine• Once a year
• Once a year
• Once a year

• As necessary• As necessary• As necessary• As necessary• Twice per month• As necessary• Once a year

Addressing Social Issues through Food-related Contributions
Group Overview

Since 2006, the Nichirei Group has been supporting the activities of a food bank, the certified NPO Second Harvest Japan. So far, we haveprovided about 20,000 cases of our frozen foods to various welfare facilities, including foster homes for children, mother and child support
centers, and disability support facilities. In addition to delivering these products, we also provide logistical support to ensure that the items
retain their quality.
We intend to continue supporting food bank activities and hope to help resolve social issues through our food-related contributions.

Management Strategy

Cosponsorship of the Tokyo 2020: Food for 100,000 Project

Process Leading Up to Delivery
Our fundamental stance is to provide only what is truly needed without forcing theacceptance of any extra material.
Provide Second Harvest Japan with a listof available products

SecondHarvest Japan• Consult with facilities to determine which
products are needed• Compile a list of requests from all facilities• Contact the Company* Tokyo 2020: Food for 100,000: A project attempting to build a safety net capable ofproviding an adequately life-sustaining amount of food to 100,000 people in Tokyoand 60,000 people in Kanagawa and Saitama during a single year (2020); thisproject involves collaboration with various corporations, governments, and NPOs.
http://2hj.org/english/100000pj

Business Strategy

NichireiGroup

In fiscal 2020, we expressed our support for activities associated with,
Tokyo 2020: Food for 100,000, a project conducted by Second Harvest
Japan, and donated one million yen toward the cause.

Nichirei Foods ships the requested
products, which are then delivered
to their respective facilities by
Nichirei Logistics Group

NichireiGroup

Corporate GovernanceNichirei Fresh procures shrimp from Indonesia. Since 2006, it has participated in the Forest of Life Project, collaborating with local Indonesian partner PT.
Mustika Minanusa Aurora and Tarakan City in the Indonesian province of North Kalimantan. Through its involvement in this project, the Company uses a
portion of its earnings from sales of shrimp to help improve shrimp habitats and plant mangrove trees.
Intensive aquaculture, with its high environmental impact, is the primary method of shrimp farming. In contrast, the Forest of Life Project promotes
the sustainable local development of marine products through extensive aquaculture, which does not use compound animal feed or electricity.
Recently, through its involvement in the Hakuhodo Inc. SDGs project, Earth Mall, that aims to change the future through shopping, the Company
held lectures concerning SDGs at the Saitama Prefectural Ina Gakuen Junior High School with the goal of inspiring people to think about sustainablemarine product development. Through this program, the Company informed students primarily about supply chains used to procure the shrimp theyfrequently eat and global social issues.
In addition, we worked with students to create video messages for local marine product manufacturers, who are farming shrimp in Indonesia. The
local Indonesian population viewed the video and responded with messages, giving the local junior high school students the chance to engage incommunication and learn the importance of sustainable marine products.

Initiatives to Resolve
Social Issues

SDG Lectures Inspire Ideas on Sustainable Marine Product Development

Topics

December 11, 2019
Shrimp taste-testing

December 19, 2019
Video message production

Nichirei Group Social Contribution Spending (three years)

Fiscal 201745

Education
and welfare

July 27, 2020
Review lecture

Community activities, preservation of historic sites and traditional culture, town planning aimed at
disaster prevention, crime prevention, job creation and skill development, and employment support
Health, sports,
and art81

Political donations 0.3
Others 2.5

Environmental
conservation

118

17

17
Political donations

Fiscal 201821

Fiscal 2019

79

32
0

125
96

50

17

17

133
100

150

200

Others 1.1

17
250

0.1
Others 1.6

24300

Investor Information/
Corporate Information

Social welfare
and disaster support

February 28, 2020
Indonesia

Financial Data

December 5, 2019
Lecture(Millions of yen)74

Topics

Supporting the Food Supply Chain
Since our founding, the Nichirei Group has contributed to the development of society and the improvement of people’s lives inJapan as a leading cold chain company.
In this era of major natural disasters and pandemics, we recognize the importance of food to human life. Thus, the Group
undertakes to ensure ongoing support for the food supply chain.
If we are able to establish systems that can sustainably and quickly restore the food supply chain, we believe that we willserve society as an invaluable corporate group. We thus are working to strengthen our risk management system and build acomprehensive business continuity plan (BCP).

Risk Management Structure
In the course of its business activities, the Nichirei Group manages various risks in a rational and optimal manner from an overall
perspective. In order to maximize the corporate value of the Group, we established the Group Risk Management Committee,
chaired by the Representative Director, President. Based on the risk management cycle established by the committee to identify
and evaluate risks facing the entire Group, Nichirei and all Group companies respond to the risks on their own accord andreport important matters to the holding company Board of Directors so that countermeasures can be discussed.

Business Continuity Plan Initiatives■ Employee Safety

Group Countermeasures Headquarters in Response to COVID-19
In January 2020, we set up the Group Countermeasures Headquarters in response to COVID-19. In addition to collecting
and sharing information throughout the Group, between January and July 2020 we sent out, on the Company intranet, 24
messages with instructions regarding work systems and infection prevention measures.
We are creating a crisis management system to strike a balance between the prevention of infection and the need forour employees to engage in business activities.
Confirming Safety in Emergency Situations
The Nichirei Group has introduced a company-wide safety confirmation system using a dedicated website. In the event of adisaster, such as an earthquake with an intensity of five or higher, emails will be sent to each employee to check whether
they are safe, and relevant local information will be provided immediately on the website. The system allows for the rapid
collection and sharing of information.
■ Enhancing Logistics Core System BCP

As part of its risk management, the Nichirei Logistics Group has
been enhancing its BCP support for its logistics core systemsince February 2018.
Assuming the possibility of damage to the data center,
where operations are heavily concentrated, we created a disasterrecovery (DR) system to enable rapid business continuity. In theevent of a large-scale disaster, we would be able to quickly
resume operations through the use of two bases that switch fromthe system at our main site to the DR site.
Approximately one hour would be needed from the activation of the system until an online restart would be possible. Thisis designed to ensure that customer businesses and food
distribution are not affected.
We plan to implement advanced initiatives as a food logistics
lifeline in order to contribute to the business continuity of ourbusiness partners.
75

Logistics Core System BCP Conceptual Diagram

Main site

DR siteWestern Japan Data Center

Eastern Japan Data Center
Response to disasterin western Japan

Normal operations

Normaltimes

Disasterin westernJapan

Normal operations structureNichirei Logistics Group BCP Initiatives

Case Study

Group Overview■ Overview

Management Strategy

In recent years, with a number of areas having experienced enormous damage as a result of natural disasters, the Nichirei
Logistics Group has formulated a BCP to be implemented in the event of earthquakes, tsunamis, typhoons, major storms, andfloods. Such risk management prioritizes ensuring the safety of employees and cargo being handled.
Every year before the typhoon season, in addition to circulating a document detailing our anticipated response to forecast
typhoons and other weather-related disasters on the Company website, we provide business partners with information on how
to deal with temporary closures and changes in business hours.
In response to COVID-19, we are conducting infection prevention measures at businesses, while at the same timechanging work styles by, for example, staggering commuting times, encouraging teleworking, and opening satellite offices tohelp ensure employee safety and business continuity.

Business Strategy■ Countermeasures Headquarters Establishment Flow

Confirm earthquakes with seismic intensity of lower 6 or higher on the Japanese scale of 10
Group company information

Office members: Report temporary impact on Company

Not establish

Division General Manager: Determine establishment
Establish

Approve/deny useof Higashi-Ginza Building

Approve/deny useof Akashicho Building
Deny

Approve

Establish in Akashicho Building

Corporate Governance

Building damage
information

Approve
Deny

Office Manager: Notificationof non-establishmentof countermeasures headquarters

Initiatives to Resolve
Social Issues

Office Manager: Report forecasted results to countermeasures headquarters

Establish alternative
countermeasures headquarters

Office Manager: Determine location of countermeasures headquarters,
time of meeting and convene members
Countermeasures headquarters members: Assemble, collect and organize information



Topics

Hold first countermeasures headquarters meeting XULRNP* 0 3W&C8!=,5:?"$;')0
3&98!D1B3&C:/

COVID-19 Response Manual

7>&C83>
=&C/GFTMD58#>1B!=,5:?-$;')0■. > 4A+=,5:?/% 5:2B8@JVOQAIK(?HSE<6B0

Guidelines for Preventing the Spread of Infection(Close Contact Prevention)

Financial Data

Facility Disinfection Manual(1) Office / Reception:(Reference: Partition method)█

Office / Reception

� Install partitions (substitute with plastic



 

    Investor Information/
Corporate Informationwrap) in front of reception (to prevent
face-to-face droplet infection)
� Install partitions between opposing andadjacent seats (to prevent droplet infection
from opposing and adjacent seats)

76

Financial Data

11-year Financial Highlights
Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31

energy 20122010/3

2011/3

2012/3

2013/3438,111437,808

454,931

470,126

Cost of sales

350,153

350,442

368,012378,652

Selling, general and administrative expenses ＊71,14470,68570,74173,541

Operating profit

16,814

16,681

16,177

17,932Non-operating income:

1,628

1,939

2,025

1,880

528

488

622

575

―

164

49

224

2,992

2,505

2,952

2,609

1,703

1,371

1,445

1,438

0

―

―

―

Ordinary profit

15,450

16,115

15,25017,202Extraordinary income

1,169

5,123

1,308

1,690

2,238

12,378

2,333

5,291

14,3808,860

14,225

13,601

5,142

4,772

6,406

5,489

Profit (loss) attributable to non-controlling interests

(174)

(44)

85

1,712

Profit (loss) attributable to owners of parent

9,064

4,044

7,904

9,823

Depreciation and amortization

13,50614,158

14,97814,302

9,751

10,441

11,177

10,522

24,385

22,11012,24813,171(Excluding leased assets)

18,026

18,076

9,400

10,724

Reseach & development expenditures

1,986

1,806

1,697

1,817

Fiscal Year:Net sales＊Interest and dividend income
Share of profit of entities accounted
for using equity method
Non-operating expenses:＊

Interest expenses
Share of loss of entities accounted
for using equity method

Extraordinary losses＊

Profit before income taxes
Income taxes＊(Excluding leased assets)
Capital expenditure

Share information:
Profit per share

＊

29.24

13.08

26.35

33.40

Dividend per share

＊

9

9

9

10

31%

69%

34%

30%

Payout ratio＊ 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 “Note” havebeen fractionally adjusted for convenience purposes.
2. Due to segment changes in fiscal 2001 and 2004, as well as changes in common cost allocation standards in fiscal 2003 and 2006, it is difficult to accurately follow the profit levels of each business in chronological order.
3. From fiscal 2016, 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 fromnet sales). Accordingly, fiscal 2015 is displayed as a numerical value after the correction is retroactively applied.
4. From fiscal 2017, earning per share (yen) and dividend per share (yen) are shown as numerical values after the reverse stock split implemented on October 1, 2016.

77

2014/3

2015/3POWER UP 20182016/32017/3

2018/3

WeWill2021

2019/3

Group Overview

RISING 20152020/3(millions yen)

584,858

417,928

446,180454,265448,516

475,194

486,926

485,784

77,47256,37659,501

61,831

62,94063,704

68,03815,78917,406

21,58329,30929,89729,511

31,035

2,113

1,993

1,704

1,433

2,102

1,753

1,891

1,060

616

664

716

817

871

896

―

140

131

278

715

399

387

3,459

2,498

1,893

1,637

1,350

1,399

1,150

1,295

1,138

1,053

954

898

870

791

795

―

―

―

―

―

―

14,443

16,902

21,394

29,10530,65029,864

31,777

2,347

137

220

468

102

1,085

505

1,432

1,167

1,014

1,756

1,515

1,410

2,489

15,357

15,871

20,60027,81829,23729,54029,792

5,480

4,850

5,933

7,322

8,601

8,773

9,008

(978)

(1,504)(1,195)(1,744)(1,538)(822)(1,174)

8,898

9,516

13,471

18,751

19,097

19,943

19,60914,475

15,621

16,455

16,057

16,155

17,481

18,355

10,748

11,871

12,65812,347

12,543

13,91014,69024,041

24,171

16,175

13,887

24,952

24,132

27,287

21,20919,75013,216

10,25322,312

21,32024,864

1,607

1,730

1,600

1,559

1,986

2,359

2,486

31.12

33.29

47.15

135.11

142.23149.65147.16

10

10

12

28

30

32

42

32%

30%

26%

21%

21%

21%

29%

Financial Data

580,141

Topics568,032

Corporate Governance539,657

Initiatives to Resolve
Social Issues

535,351

Business Strategy

519,963

Management Strategy

511,189

Investor Information/
Corporate Information
78

Financial Data

Consolidated Balance Sheets (Unaudited)
Nichirei Corporation and Consolidated Subsidiaries
As of March 31, 2019 and 2020

Thousands of
U.S. dollars(Note 1)
2020

Millions of yen
2019

AssetsCurrent assets:
Cash and deposits
Notes and accounts receivable - trade
Less allowance for doubtful accounts
Inventories
Other current assets
Total current assets
Fixed assets:
Property, plant and equipment (Note 5):
Buildings and structures
Machinery and equipment
Land
Leased assets
Construction in progress¥

20,82987,219(118)
45,734
6,889
160,5542020¥

25,93382,269(131)
47,93414,303
170,308$

238,292755,940(1,211)
440,454
131,425
1,564,901

Less accumulated depreciation
Property, plant and equipment, net

244,223
113,026
35,664
38,121
657
431,694(276,237)
155,456

252,672
118,098
36,00737,3234,534
448,636(285,402)
163,233

2,321,717
1,085,164
330,863
342,948
41,663
4,122,357(2,622,461)
1,499,895

Investments and other assets:
Investment securities (Note 4)
Investment in affiliates
Net defined benefit asset
Deferred tax assets (Notes 3 and 7)
OtherLess allowance for doubtful accounts
Total investments and other assets
Total fixed assets

35,886
4,993
56
1,612
18,985(287)
61,246
216,703

28,904
7,246
57
1,912
18,609(268)
56,462
219,696

265,593
66,585525
17,576
170,998(2,467)
518,8122,018,708¥
377,257
Total assets
The accompanying notes are integral parts of these statements.

¥

390,004$

3,583,609

1
79Consolidated Balance Sheets (Unaudited) (Continued)

2019

Liabilities and net assets
¥

7,336
2,000
5,202

¥

39,43918,377
8,791
91,886
261,51233,131
48,693
320,625
2,095
171,675
996,227
275,659
307,089

154
1,893
13,449
5,138
3,884
4,986
93,890
193,451

175
2,014
12,076
2,830
3,935
5,742
90,196
198,615

1,615
18,509110,969
26,011
36,162
52,765
828,782
1,825,010

30,307
7,617
142,274(17,443)
162,756

30,3595,750
156,953(17,642)
175,421278,961
52,837
1,442,190(162,106)
1,611,881

13,997661(594)
14,063
6,985
183,805

9,016
802
(736)
9,082
6,884
191,388

82,852
7,376(6,769)83,45963,257
1,758,599

Corporate Governance

30,00033,420Initiatives to Resolve
Social Issues

40,00024,385㸫$Business Strategy

27,742
3,578
4,368
30,919215
18,19899,561

4,292
2,000
956
10,00028,4603,605
5,299
34,893228
18,683
108,419

Management Strategy

Current liabilities:
Short-term loans
Commercial paper
Current portion of long-term debt
Current portion of bonds
Accounts payable
Lease obligations
Income taxes payable
Accrued expenses
Provision for directors’ bonuses
Other current liabilities
Total current liabilities
Long-term liabilities:
Bonds
Long-term debt
Provision for directors’ and statutory
auditors’ retirement benefits
Net defined benefit liability
Lease obligations
Deferred tax liabilities (Notes 3 and 7)
Asset retirement obligations
Other
Total long-term liabilities
Total liabilities

2020

Thousands of
U.S. dollars(Note 1)
2020

Group Overview

Millions of yen

Net assets:
Shareholders’ equity (Note 6):
Common stock, with no par value¥

377,257¥

390,004$

3,583,609

The accompanying notes are integral parts of these statements.
2

Investor Information/
Corporate Information

Total liabilities and net assets

Financial Data

Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income:Net unrealized holding gain on availablefor-sale securities
Net deferred gain on hedges
Foreign currency translation adjustments
Total accumulated other comprehensive income
Non-controlling interests
Total net assets

TopicsAuthorized- 360,000,000 shares for 2019 and 2020
Issued and outstanding - 139,925,532sharesfor 2019 and 139,965,587 shares for 2020

80

Financial Data

Consolidated Statements of Income (Unaudited)
Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2019 and 2020

2020

Thousands of
U.S. dollars(Note 1)
2020

584,858$

Millions of yen
2019¥
Net sales
Operating costs and expenses:
Cost of sales
Selling, general and administrative expenses

580,141¥

5,374,057

486,926
63,704

485,784
68,0384,463,696
625,182

550,630
29,511

553,822
31,0355,088,878
285,178

871
(870)
27
29
29,540896(791)(1,348)(1,243)29,792

8,238(7,269)(12,390)(11,421)273,756

ProfitProfit attributable to non-controlling interests

8,631
142
8,773
20,766
822

Profit attributable to owners of parent

9,566
(557)
9,008
20,784
1,174

87,903(5,124)
82,779190,977
10,794

19,943Operating profit
Other income (expenses):
Interest and dividend income
Interest expense
Other – net
Profit before income taxes
Income taxes (Note 7):
Current
Deferred¥¥

19,609

$

U.S. dollars(Note 1)
2020

Yen
Amounts per share (Note 8):
Net assets
Profit:Basic
Diluted2019¥

1,326.81
149.65
㸫

2020¥

1,384.90

180,182$

12.725147.16
㸫

1.352
㸫

The accompanying notes are integral parts of these statements.

381

Consolidated Statement of Comprehensive Income (Unaudited)
Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2019 and 2020

2019

¥

¥

20,766¥

20,784$

190,977(1,450)1,393(1,705)(4,978)151(10)(45,743)
1,391
(99)

(47)
(1,809)18,956154(4,683)
16,1001,418(43,033)
147,944¥

14,6281,471$$

134,419
13,524

The accompanying notes are integral parts of these statements.

Initiatives to Resolve
Social Issues

18,278677¥

Business Strategy

Total comprehensive income attributable to:
Owners of parent
Non-controlling interests¥

Management Strategy

ProfitOther comprehensive income:Net unrealized holding gain (loss) on
available-for-sale securities
Net deferred gain (loss) on hedges
Foreign currency translation adjustments
Share of other comprehensive income(loss) of affiliates accounted for by theequity method
Total other comprehensive income (loss)
Total comprehensive income

2020

Thousands of
U.S. dollars(Note 1)
2020

Group Overview

Millions of yen

Corporate Governance
TopicsFinancial Data
Investor Information/
Corporate Information

482

Financial Data

Consolidated Statements of Changes in Net Assets (Unaudited)
Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2019 and 2020

Millions of yen
Shareholders’ equity
Common stock

Net assets at April 1, 2018
Changes of items during the period
Dividends from surplus
Profit attributable to owners of parent
Change in scope of equity method
Acquisition of treasury stock
Disposal of treasury stock
Net changes of items other thanshareholders’ equity
Total changes of items during the period
Net assets at March 31, 2019
Changes of items during the period
Issuance of new shares
Dividends from surplus
Profit attributable to owners of parent
Change in ownership interest of parent due totransactions with non-controlling interests
Acquisition of treasury stock
Disposal of treasury stock
Net changes of items other thanshareholders’ equity
Total changes of items during the period
Net assets at March 31, 2020

¥ 30,307

Capital surplus

¥

7,617

Retainedearnings¥ 126,510

Treasury stock¥ (17,432)(4,131)
19,943
(47)

0
7,617

51

51

15,764¥ 142,274

(10)
0
(10)
¥ (17,443)

15,754¥ 162,756
103(4,930)19,609(4,930)19,609(1,918)(199)
0(1,918)
(199)
0

(199)
¥ (17,642)

12,664¥ 175,421

051¥ 30,359¥(1,867)5,750

14,679¥ 156,953

Millions of yen
Accumulated other comprehensive income
Net unrealized
holding gain on
available-for-salesecurities

Net assets at April 1, 2018
Changes of items during the period
Dividends from surplus
Profit attributable to owners of parent
Change in scope of equity method
Acquisition of treasury stock
Disposal of treasury stock
Net changes of items other thanshareholders’ equity
Total changes of items during the period
Net assets at March 31, 2019
Changes of items during the period
Issuance of new shares
Dividends from surplus
Profit attributable to owners of parent
Change in ownership interest of parent due totransactions with non-controlling interests
Acquisition of treasury stock
Disposal of treasury stock
Net changes of items other thanshareholders’ equity
Total changes of items during the period
Net assets at March 31, 2020

¥ 15,451

Net deferredgain on hedges

¥

(739)

¥ 147,002(4,131)
19,943
(47)
(10)
0

0
㸫
¥ 30,307 ¥Total
shareholders’equityForeign currencytranslation
adjustments

¥

1,014

Total
accumulated
othercomprehensive
income¥ 15,726

Noncontrollinginterests

Total net
assets¥¥ 169,680

6,951(4,131)
19,943(47)(10)
0(1,454)(1,454)¥ 13,997

1,400
1,400
¥
661

(1,609)(1,609)¥(594)(1,663)(1,663)¥ 14,063

¥

33
33
6,985

(1,629)14,124¥ 183,805
103(4,930)19,609(1,918)199
0(4,980)(4,980)¥ 9,016

¥

141
141
802

¥

(141)
(141)
(736)

(4,980)(4,980)¥ 9,082

¥

(101)
(101)
6,884

(5,081)
7,582¥ 191,388

The accompanying notes are integral parts of these statements.
583

Consolidated Statements of Changes in Net Assets (Unaudited) (Continued)
Thousands of U.S. dollars (Note 1)
Shareholders’ equity
Capital surplus

Retainedearnings

Treasury stock$ 278,487$ 69,994$ 1,307,308$ (160,277)

473

473

$ 1,495,513

0(17,631)(1,833)
4(1,828)$ (162,106)

116,368$ 1,611,881

Business Strategy(17,157)
134,882$ 52,837 $ 1,442,190(1,833)
4

Management Strategy

946(45,300)
180,182(45,300)
180,182(17,631)473$ 278,961

Total
shareholders’equityGroup Overview

Net assets at April 1, 2019
Changes of items during the period
Issuance of new shares
Dividends from surplus
Profit attributable to owners of parent
Change in ownership interest of parent due totransactions with non-controlling interests
Acquisition of treasury stock
Disposal of treasury stock
Net changes of items other thanshareholders’ equity
Total changes of items during the period
Net assets at March 31, 2020

Common stockThousands of U.S. dollars (Note 1)
Accumulated other comprehensive income
Net deferredgain on hedges

Foreign currencytranslation
adjustments$ 128,615

$

$

6,074

(5,467)

Total
accumulated
othercomprehensive
income$ 129,222

Noncontrollinginterests$

64,185

Total net
assets$ 1,688,921
946(45,300)
180,182(45,762)(45,762)$ 82,852

$

1,302
1,302
7,376

$

(1,302)(1,302)(6,769)(45,763)(45,763)$ 83,459$

Corporate Governance(17,631)(1,833)
4

Initiatives to Resolve
Social Issues

Net assets at April 1, 2019
Changes of items during the period
Issuance of new shares
Dividends from surplus
Profit attributable to owners of parent
Change in ownership interest of parent due totransactions with non-controlling interests
Acquisition of treasury stock
Disposal of treasury stock
Net changes of items other thanshareholders’ equity
Total changes of items during the period
Net assets at March 31, 2020

Net unrealized
holding gain on
available-for-salesecurities(928)(46,691)(928)
69,677
63,257 $ 1,758,599

The accompanying notes are integral parts of these statements.

TopicsFinancial Data
Investor Information/
Corporate Information

684

Financial Data

Consolidated Statements of Cash Flows (Unaudited)
Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2019 and 2020

Millions of yen
2019
Cash flows from operating activities:

2020

Thousands of
U.S. dollars(Note 1)
2020

Profit before income taxes
Depreciation and amortization
Impairment loss on fixed assets
Increase/(decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expense
Equity in earnings of affiliates
Gain on sales of property, plant and equipment
Loss on disposal of property, plant and equipment
Gain on sales of investment securities(Increase)/decrease in notes and accounts receivable-trade
Increase in inventories
Increase/(decrease) in notes and accounts payable
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid¥

29,54017,481
52
(24)
(871)
870
(399)
(199)
1,068
(849)
(2,709)(561)(2,530)(637)
40,227962(866)(9,011)¥

29,792
18,355
481
4
(896)
791
(387)
(58)
1,628
(423)
4,750
(2,098)635
2,833
55,408
1,063(798)(16,232)$

273,756
168,6654,426
37(8,238)7,269(3,559)(537)
14,959(3,894)
43,646(19,280)
5,836
26,038509,128
9,774(7,334)(149,158)

Net cash provided by operating activities¥

31,311¥

39,441$

362,409785

Consolidated Statements of Cash Flows (Unaudited) (Continued)

2019
Cash flows from investing activities:¥(187,166)
1,483(12,276)(20,253)
6,500(1,527)

㸫

㸫

㸫
5,067
(17,918)(24)(1,235)(24,300)(227)(11,351)(223,292)

1,324(1,000)
2,997(4,016)
9,948(10,000)(3,654)(10)(4,125)(2,818)㸫
10,000(5,200)㸫㸫
(3,782)(18)(4,923)(25,898)㸫
91,886(47,780)㸫㸫
(34,755)(172)(45,238)

(643)
91 

(803)
㸫

(7,383)㸫㸫
0(9,088)(2,680)0(10,225)(24,625)
4(93,963)

(713)
3,591
17,076(148)
4,765
20,668(1,363)
43,790189,914

20,668¥25,434$

Topics¥$Corporate GovernanceCash and cash equivalents at the end of the year

(20,369)
161(1,336)(2,204)707

Initiatives to Resolve
Social Issues

Effect of exchange rate changes on cash andcash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year¥

Business Strategy

Cash flows from financing activities:

Net increase/(decrease) in short-term bank loans
Net decrease in commercial paper
Proceeds from long-term debt
Repayment of long-term debt
Proceeds from issuance of bonds
Redemption of bonds
Repayments of lease obligations
Purchase of treasury stock
Dividends paid
Cash dividends paid to non-controlling interests ofconsolidated subsidiaries
Proceeds from non-controlling shareholders
Purchase of shares of subsidiaries not resulting in change
in scope of consolidation
Other, net
Net cash used in financing activities(20,062)
1,032(2,008)(2,148)
1,727Management Strategy

Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of shares of subsidiaries resulting in change
in scope of consolidation
Payments for sales of shares of subsidiaries
resulting in change in scope of consolidation
Other, net
Net cash used in investing activities

2020

Group Overview

Thousands of
U.S. dollars(Note 1)
2020

Millions of yen

233,705
Financial Data

The accompanying notes are integral parts of these statements.

Investor Information/
Corporate Information

886Financial Data

Notes to Consolidated Financial Statements (Unaudited)
Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2019 and 2020

Note 1: Basis of Presentation
The accompanying consolidated financial statements of Nichirei Corporation (the “Company”) and its
consolidated subsidiaries (together, the “Group”) are prepared on the basis of accounting principles
generally accepted in Japan, which are different in certain respects as to application and disclosure
requirements of International 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 ¥108.83 = US$1.00, the exchange rate
prevailing on March 31, 2020.
Due to significance, only selected notes are disclosed in the consolidated financial statements. The
other notes which are not selected are disclosed on EDINET.

Note 2: Accounting standards issued but not yet effective(1) Accounting Standard and Implementation Guidance on Revenue Recognition“Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29)“Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No. 30)(a) Overview
This is a comprehensive accounting standard addressing revenue recognition. Specifically, theaccounting standard establishes the five-step model that will apply to revenue from contracts withcustomers.
(b) Scheduled date of adoption
The Company expects to adopt the accounting standard and implementation guidance from the
beginning of the fiscal year ending March 31, 2022.
(c) Impact of adoption of accounting standard and implementation guidance
The Company is currently evaluating the effect of the adoption of this accounting standard andimplementation guidance on its consolidated financial statements.
(2) Accounting Standard for Fair Value Measurement and Related Implementation Guidance“Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30)“Accounting Standard for Measurement of Inventories” (ASBJ Statement No. 9)“Accounting Standard for Financial Instruments” (ASBJ Statement No. 10)“Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No.
31)“Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ GuidanceNo. 19)(a) Overview
The ASBJ has developed “Accounting Standard for Fair Value Measurement” and “Implementation
Guidance on Accounting Standard for Fair Value Measurement” (hereinafter collectively, the “Fair
Value Measurement Standard”), which provide guidance for fair value measurement in order toimprove comparability with internationally recognized accounting standards.

987Notes to Consolidated Financial Statements (Unaudited)
Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2019 and 2020

Group Overview

The Fair Value Measurement Standard is applied with respect to the fair value of the following
items;
͌Financial instruments defined in “Accounting Standard for Financial Instruments”
͌Inventories held for trading purposes defined in “Accounting Standard for Measurement of
Inventories”“Implementation Guidance on Disclosures about Fair Value of Financial Instruments” has beenrevised requiring disclosure of financial instruments broken down by level in the fair value hierarchy.

Management Strategy(b) Scheduled date of adoption
The Company expects to adopt the accounting standards and related implementation guidance fromthe beginning of the fiscal year ending March 31, 2022.
(c) Impact of adoption of revised accounting standard and related implementation guidance
The Company is currently evaluating the effect of the adoption of the accounting standards andrelated implementation guidance on its consolidated financial statements.

Business Strategy

Note 3: Additional information~ Accounting estimates for the effect of COVID-19 spread

Note 4: Securities

Corporate Governance(1) Acquisition costs, carrying value and unrealized gain on available-for-sale securities as of March 31,
2019 and 2020:
Thousands ofMillions of yen
U.S. dollars
2019
2020
2020
Equity securities:
Acquisition costs¥
12,787¥
12,533$
115,164
Carrying value
32,36625,215
231,691
Unrealized gain¥
19,578¥
12,681$
116,527

Initiatives to Resolve
Social Issues

The Group implemented accounting estimates, such as impairment losses on fixed assets and recoverabilityof deferred tax assets based on the available information when the consolidated financial statements wereprepared.
The Company considers, the effect on the group business by the spread of COVID-19 will continue atleast until the 2nd quarter of the fiscal year ending March 31, 2021, even though the impact and level aredifferent depending upon the business.

TopicsNon-listed equity securities amounting to ¥3,519 million and ¥3,689 million ($33,902 thousand) as ofMarch 31, 2019 and 2020, respectively, are not included in the above table because they are nottraded on the market and it is very difficult to determine their fair market value as of March 31, 2019and 2020.

Financial Data
Investor Information/
Corporate Information

1088Financial Data

Notes to Consolidated Financial Statements (Unaudited)
Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2019 and 2020

(2) Sales of available-for-sale securities for the years ended March 31, 2019 and 2020:
2020
708
423

Thousands of
U.S. dollars
2020
$
6,507
3,894

㸫

㸫

Millions of yen
Proceeds from sales
Gains on sales
Losses on sales

¥

2019
1,539
821
24

¥

(3) Impairment loss of securities for the years ended March 31, 2019 and 2020:

Thousands of
U.S. dollars
2020

Millions of yen
2019
Available-for-sale securities:
Stocks with market value
Stocks without market value
Total

¥
¥

2020
64
2
66

¥
¥

㸫
㸫
㸫

$

㸫
㸫
㸫

$

Note 5: Investments and Rental Properties
The Company and part of its subsidiaries own buildings and land for lease in Tokyo and other areas.
Net rent income and gain on sales of the property related to the investments and rental properties were¥2,178 million and ¥108 million, respectively, for the year ended March 31, 2019.
Net rent income, gain on sales and impairment losses on the property related to the investments andrental properties were ¥2,119 million ($19,473 thousand), ¥34 million ($320 thousand) and ¥200 million($1,838 thousand), respectively, for the year ended March 31, 2020.
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, 2019 and 2020:
Thousands ofMillions of yen
U.S. dollars
2019
2020
2020
Carrying value as of April 1
Net increase (decrease)¥

10,065
(220)

¥

9,844
(519)

$

90,455(4,776)

Carrying value as of March 31

¥

9,844

¥

9,324

$

85,678Market value as of March 31¥

43,060¥43,934$

403,697

1.
2.
3.
4.

Carrying value on the consolidated balance sheets is calculated as acquisition costs deducting
accumulated depreciation and cumulative impairment losses.
For the year ended March 31, 2019, major increase represents capital expenditures of ¥355 million andchange in the use of property of ¥258 million. Major decrease represents depreciation of ¥500 million
and sales of properties of ¥306 million.
For the year ended March 31, 2020, major increase represents capital expenditures of ¥251 million($2,309 thousand). Major decrease represents depreciation of ¥512 million ($4,706 thousand) and
impairment losses of ¥200 million ($1,838 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.

1189Notes to Consolidated Financial Statements (Unaudited)
Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2019 and 2020

Group Overview

Note 6: Changes in Net Assets(1) Types and numbers of outstanding shares and treasury stock(a) For the year ended March 31, 2019

Issued stock:
Common stock
Treasury stock:
Common stock (1,2)

Increases

Decreases

139,925,532

㸫㸫

139,925,532

6,655,050

3,626

210

6,658,466

Management Strategy

Type of stock(Number of shares)
As of March 31,
2019

As of April 1,
2018(b) For the year ended March 31, 2020
Type of stock
Issued stock:
Common stock (1)Treasury stock:
Common stock (2,3)

Increases

Decreases(Number of shares)
As of March 31,
2020

139,925,532

40,055

㸫

139,965,587

6,658,466

81,520196

6,739,790

Initiatives to Resolve
Social Issues

As of April 1,
2019

Business Strategy(Reasons for changes)
1. The increase in the number of treasury stock of common stock resulted from the following:
3,626 shares・Request for redemption of odd-lot stock
2. The decrease in the number of treasury stock of common stock resulted from the following:
210 shares・Request for purchase of odd-lot stock

Corporate Governance(Reasons for changes)
1. The increase in the number of issued common stock resulted from the following:㺃Issuance of new shares for stock-based compensation with restriction on transfer 40,055 shares
2. The increase in the number of treasury stock of common stock resulted from the following:㺃Request for purchase of common stock from unknown shareholders
77,818shares
3,702 shares・Request for redemption of odd-lot stock
3. The decrease in the number of treasury stock of common stock resulted from the following:
196 shares・Request for purchase of odd-lot stock

Topics(2) Cash dividends distributed
Dividends paid during the year ended March 31, 2020

U.S. dollars)

dollars)¥ 2,132$ 19,592¥ 16$ 0.14

Board of Directors’
meeting on
November 5, 2019

¥ 2,797$ 25,707¥

Common Retainedstockearnings

Effective
date

March 31, June 26,
2019
2019

21 September December$ 0.19 30, 2019 5, 2019

Investor Information/
Corporate Information

General shareholders’Common Retained
meeting onstockearnings
June 25, 2019

Recorddate

Financial Data

Resolution

Total dividends Dividend perType of Source of (Millions of yen
sharestock dividends and Thousands of (Yen and U.S.

12
90

Financial Data

Notes to Consolidated Financial Statements (Unaudited)
Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2019 and 2020

Dividends of which the record date falls in the current fiscal year but the effective date falls in thefollowing fiscal year
Resolution

Total dividends Dividend perType of Source of (Millions of yen
sharestock dividends and Thousands of (Yen and U.S.
U.S. dollars)

General shareholders’Common Retained
meeting on
earnings
stock
June 24, 2020

¥ 2,797$ 25,707

dollars)¥21$ 0.19Recorddate

Effective
date

March 31, June 25,
2020
2020

Note 7: Income Taxes(1) Tax rate reconciliation for the years ended March 31, 2019 and 2020
Since the difference between effective statutory tax rate and actual effective tax rate is less than 5% ofeffective statutory tax rate, note related to reconciliation between the tax rates is omitted for the fiscal
years ended March 31, 2019 and 2020.
(2) A breakdown of tax loss carryforwards and deferred tax assets by expiry date as of March 31, 2019 and2020(Millions of Yen)
Fiscal Year Ending
March 31, 2019
Tax loss carryforwards (a) ....
Valuation allowance .............
Deferred tax assets................

2020
¥
6
(6)
¥ 㸫

2021
¥
28
(28)
¥ 㸫

2022
¥
39
(39)
¥ 㸫

2023
¥
24
(24)
¥ 㸫

2024
¥
44
(44)
¥ 㸫

2025 and
thereafter
¥ 161
(127)
¥
33

Total
¥ 305
(271)
¥
33 (b)(Millions of Yen)
Fiscal Year Ending
March 31, 2020
Tax loss carryforwards (a) ....
Valuation allowance .............
Deferred tax assets................

2021
¥
11
(11)
¥
㸫

2022
¥
19
(19)
¥
㸫

2023
¥
18
(18)
¥
㸫

2024
¥
33
(33)
¥
㸫

2025
¥
28
(28)
¥
㸫

2026 and
thereafter
¥ 228
(208)
¥
19

Total
339
(319)
¥
19 (b)(Thousands of U.S. Dollars)
Fiscal Year Ending
March 31, 2020
Tax loss carryforwards (a) ....
Valuation allowance .............
Deferred tax assets................

2021
$ 106
(106)
$
㸫

2022
$ 182
(182)
$
㸫

2023
$ 169
(169)
$
㸫

2024
$ 306
(306)
$
㸫

2025
$ 258
(258)
$
㸫

2026 and
thereafter$ 2,096(1,915)
$
181

Total
$ 3,119(2,937)$ 181 (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 Company considers a part of the tax loss carryforwards
is recoverable.

1391Notes to Consolidated Financial Statements (Unaudited)
Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2019 and 2020

Group Overview

Note 8: Per Share Information
Net assets per share as of March 31, 2019 and 2020 are calculated based on the following:

Net assets
Amounts excluded from net assets:
For non-controlling interests
Net assets attributable to common stock
Number of common stock used for the
calculation of net assets per share(in thousands)

¥

6,985

6,884

63,257

176,820

184,504

1,695,341

133,267

133,225

133,225

2019
183,805¥

Management Strategy

2020
191,388

Thousands of
U.S. dollars
2020$
1,758,599

Millions of yen

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)

¥

㸫

㸫

㸫

19,943

19,609180,182

133,269

133,251

133,2512019
19,943¥

Initiatives to Resolve
Social Issues

2020
19,609Thousands of
U.S. dollars
2020$
180,182

Millions of yen

Business Strategy

Profit per share for the years ended March 31, 2019 and 2020 are calculated based on the following:

Corporate Governance

Note 9: Segment Information

Financial Data
Investor Information/
Corporate Information(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.

Topics(1) General information about reportable segments
Reportable segments are components of the Company and its consolidated subsidiaries for which
separate financial information is available and whose operating results are regularly reviewed by theboard of directors to make decisions about resources to be allocated to the segments and to assess theirperformance. Reportable segments are determined by product and service as “Processed foods,”“Marine products,” “Meat and poultry products,” “Logistics,” and “Real estate.”
General information about the segments is as follows:(a) Processed foods: Production, processing and sales of frozen cooked foods, agricultural processed
foods, retort-pouch foods, wellness foods, acerola and packed ice(b) Marine products: Processing and sales of marine products(c) Meat and poultry products: Processing and sales of meat and poultry products, and breeding andsales of chicken(d) Logistics: Providing distribution/transportation services and distribution center functions, logistics
consulting, providing storage services, production and sales of ice, and construction work andplanning(e) Real estate: Leasing of office buildings and parking lots, management of real estate, and sales of
housing land.

14
92

Financial Data

Notes to Consolidated Financial Statements (Unaudited)
Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2019 and 2020

(3) Sales, profit or loss, assets, liabilities and other items by reportable segment for the years ended March
31, 2019 and 2020 were summarized as follows:Year ended March 31, 2019 (Millions of yen)

Reportable segment

Sales:
External sales
Intercompany sales
and transfers

Processed
foods

Marineproducts

Meat andpoultry
products

Logistics¥ 226,176¥ 71,138¥ 88,998¥ 185,385

411

106

2,078

226,588

71,24591,076

Total

Real estate
¥

Total

Other (*1)

3,385

¥ 575,083

15,663

1,408

201,049

4,794

¥

Total

Adjustment

Consolidated¥

㸫¥ 580,141

5,058¥ 580,141

19,669732

20,402(20,402)㸫594,753

5,790

600,544(20,402)580,141

Segment profit

14,596

182

1,452

11,3982,096

29,726338

30,064(553)

29,511

Segment assets

124,938

27,216

19,470165,252

16,400353,278

10,814364,092

13,164377,257

5,700

116

274

9,642

664

16,398148

16,546934

17,481

105

㸫

㸫

93

㸫

198

㸫

198

㸫

198

744

㸫

㸫

2,627

㸫

3,371

㸫

3,371

1,622

4,993

7,368

378

257

12,308558

20,871

3,936

24,8081,120

25,928Other items:
Depreciation
Amortization of
goodwill
Investments inequity-method
investees
Increase in property,
plant andequipment andintangible assets
Outstanding balanceof goodwill
Impairment loss on
fixed assets

1,206
¥

46

㸫
¥

5

830

㸫
¥

¥

㸫

0

2,036

㸫
¥

㸫

¥

52

1,217
¥

㸫

3,254
¥

52

3,254

㸫
¥

¥

㸫

52

Year ended March 31, 2020 (Millions of yen)

Reportable segment

Sales:
External sales
Intercompany sales
and transfers

Processed
foods

Marineproducts

Meat andpoultry
products

Logistics¥ 234,395¥ 65,590¥ 86,173¥ 190,446

386

181

2,153

Total

Real estate

Total

Other (*1)

3,339

¥ 579,946¥

16,050

1,625

¥

Total

Adjustment

Consolidated¥

㸫¥ 584,858

4,912¥ 584,858

20,396769

21,165(21,165)㸫
584,858

234,781

65,772

88,327

206,4964,965

600,343

5,681

606,024(21,165)

Segment profit

16,725443

905

11,824

1,982

31,881(280)

31,600(564)

31,035

Segment assets

128,407

26,92818,949169,648

15,562359,497

10,997

370,494

19,509390,004

5,894

151

267

9,840

701

16,855410

17,266

1,089

18,355

104

㸫

㸫

81

㸫

185

97

283

㸫

283

2,314

㸫

㸫

3,178

㸫

5,493

㸫

5,493

1,753

7,246

8,054

209

138

17,072476

25,952

256

26,2091,078

27,287

1,091

㸫

㸫

524

㸫

1,616

1,137

2,754

㸫

2,754

㸫 ¥

240

Other items:
Depreciation
Amortization of
goodwill
Investments inequity-method
investees
Increase in property,
plant andequipment andintangible assets
Outstanding balanceof goodwill
Impairment loss on
fixed assets

¥

40

¥

0

¥

¥

200

¥

481

¥

㸫

¥

481

¥

㸫

¥

15
93

481

Notes to Consolidated Financial Statements (Unaudited)
Nichirei Corporation and Consolidated Subsidiaries
For the years ended March 31, 2019 and 2020

Year ended March 31, 2020 (Thousands of U.S. dollars)

Sales:
External sales
Intercompany sales
and transfers

Processed
foods

MarineProducts

Meat andpoultry
products

Logistics

Real estate

Total

Other (*1)

Total

$2,153,775$ 602,691$ 791,820$ 1,749,945$ 30,687$ 5,328,921$ 45,136$ 5,374,057

3,549

1,665

19,790147,478

14,934

187,418

7,066$

Consolidated㸫$ 5,374,057

194,485(194,485)

㸫

2,157,325

604,356

811,611

1,897,424

45,6225,516,339

52,2025,568,542(194,485)

5,374,057

Segment profit

153,688

4,071

8,323

108,647

18,212292,943(2,578)290,364(5,186)285,178

Segment assets

1,179,887

247,437

174,123

1,558,843

143,001

3,303,294

101,047

3,404,341

179,267

3,583,609

54,159

1,392

2,461

90,4196,447

154,880

3,770

158,651

10,014

168,665

963

㸫

㸫

744

㸫

1,708

894

2,602

㸫

2,602

21,266㸫㸫

29,207

㸫

50,473

㸫

50,473

16,111

66,58574,011

1,929

1,272

156,874

4,381

238,4692,360

240,830

9,908

250,739

10,032

㸫

㸫

4,823

㸫

14,855

10,45325,308

㸫Management Strategy

Total

Adjustment

Group Overview

Reportable segment

Other items:
Depreciation

$

374

$

㸫

$

㸫

$

2,213

$

1,838

$

4,426

$

㸫

$

4,426

$

㸫

25,308$

4,426

Initiatives to Resolve
Social Issues(*1) “Other” represents operating segments not disclosed as reportable segments, which include biosciences business, humanresources and payroll-related services, tree planting management and cleaning services related to tree planting.

Note 10: Subsequent Events

Business Strategy

Amortization of
goodwill
Investments inequity-method
investees
Increase in property,
plant andequipment andintangible assets
Outstanding balanceof goodwill
Impairment loss on
fixed assets

Corporate GovernanceNot applicable.

TopicsFinancial Data
Investor Information/
Corporate Information

16
94

Investor Information/Corporate Information

Investor Information(As of March 31, 2020)

Essential Stock Information
Stock Exchange Listing

Tokyo Stock Exchange (First Section)

Total Number of Authorized Shares

360,000,000 shares

Total Number of Outstanding Shares

139,965,587 shares (including 6,739,790 treasury shares)

Share Unit Number

100 shares

Number of Shareholders

18,918

Shareholder Register Administrator

Mizuho Trust & Banking Co., Ltd.

Annual Meeting of Shareholders

June

Auditors

Ernst & Young ShinNihon LLC

Composition of Shareholders

Major Shareholders
Number ofshares held(Thousands)

Shareholding
ratio (%)

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

20,656

15.5

Japan Trustee Services Bank, Ltd. (Trust account)

12,694

9.5

Nippon Life Insurance Company

5,744

Mizuho Bank, Ltd.

4.3

3,813

2.9

3,406

2.6

2,799

2.1

2,719

2.0

2,675

2.0

The Dai-ichi Life Insurance Company, Ltd.

2,323

1.7

Japan Trustee Services Bank, Ltd. (Trust account 7)

2,229

1.7

Shareholder NameMUFG Bank, Ltd.
Mizuho Trust & Banking Co., Ltd. Retirement Benefit Trusts,
Mizuho Bank Ltd. Account,
Re-trust Trustee, Asset Management Services Trust AccountNisshin Seifun Group Inc.
The Norinchukin Bank

Individuals and others

14.4%
ForeignInvestors

17.2%

Financial
Institutions

57.0%

Other JapaneseCompanies

10.0%

Securities Companies

1.3%

Notes: 1. Number of shares held rounded up to the nearest thousand.
2. Shareholding ratio calculated after subtracting repurchased stock (6,739,000 treasury shares).
Rounded off to the first decimal place.

Note: “Individuals and others” includes“treasury stock (4.8%).”Stock Price and Trading Volume Trends(Thousands of shares)(Yen)

70,0003,500

60,000Stock price (yen)Trading volume (thousands of shares)

3,000

50,0002,500

40,0002,000

30,0001,500

20,0001,000

10,000500

02016/32017/3

2018/3

2019/32020/30Notes: The stock prices above reflect amounts after the stock consolidation conducted on October 1, 2016. However, trading volume does not reflect the impact of the stock
consolidation.

95

Company Information(As of March 31, 2020)

Corporate Data
Group Overview

Nichirei Corporation

Established

December 19421

Paid-in Capital

30,418 million yen2

Head Office

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

Telephone[+81] 3-3248-2101 (Main)

Number of Employees (consolidated)

15,824

Business Network

14 countries and areas (in Japan and overseas offices and subsidiaries )Management Strategy

Company Name

Initiatives to Resolve
Social Issues

External Review

Business Strategy

Notes:
1. Date of establishment of the predecessor Teikoku Marine Products Control Company. Reorganized as Nippon Reizo Inc. in December 1945.
2. As of July 22, 2020

Incorporation of SRI Index (FY2021)

Corporate Governancehttp://info.msci.com/l/36252/2017-06-27/kj5n9b

TopicsSelected from 2013 through 2019

Financial Data

Review/Awards

Investor Information/
Corporate Information• The Certified Health and Productivity Management Organization
Recognition Program under the large enterprise category(FY2018, FY2019, FY2020, FY2021)

96Global Network☆ Jinzhu (Yantai) Food Research and Development(As of March, 2020)● Yantai Representative Office○ Shandong Nichirei (Yantai) Foods Co., Ltd.
○ Taian Jiayu Foodstuff Co., Ltd.
▲ Qingdao Representative Office△ Rizhao Mei Leng Food Trading Co., Ltd.

Rainham(England)
Carpiquet(France)□ Thermotraffic UK Ltd.

●■ Shanghai Representative Office

Rotterdam (The Netherlands)
Versmold (Germany)
Znin (Poland)□ Shanghai Fresh Line Express Co., Ltd. (3)○ Nichirei Enterprise Management
Consulting (Shanghai) Co., Ltd.
○ Nichirei Corporation Shanghai Ltd.

Ho Chi Minh City
(Vietnam)Tienzan(Vietnam)▲ Dalian Representative OfficeBình Thuận
(Vietnam)

Dalian (China)

Shandong(China)Jiangsu(China)Shanghai (China)

Hong Kong□ Frigo Logistics Sp. z o.o.
（2）Bangkok (Thailand)
Samutprakarn(Thailand)□ Thermotraffic GmbH□ Jiangsu Fresh Flower Logistics Co., Ltd

Chon Buri(Thailand)△ Nichirei Fresh Hong Kong, Ltd.

Selangor(Malaysia)○ Nichirei
Australia Pty. Ltd.

□ Nichirei Holding Holland B.V.
□ Eurofrigo B.V.（5）□ Hiwa Rotterdam Port Cold Stores B.V.
□ Thermotraffic Holland B.V.

□ Transports Godfroy S.A.S.
□ Entrepots Godfroy S.A.S.（4）Sydney(Australia)△ Trans Pacific Seafood Co., Ltd.

●▲ Bangkok Representative Office▲ Ho Chi Minh City Representative Office□ SCG Nichirei Logistics Co., Ltd.

△ Nichirei Fresh Vietnam Co., Ltd.
○ Surapon Nichirei Foods Co., Ltd.（2）○ GFPT Nichirei (Thailand) Co.,Ltd.

○ Nichirei Suco Vietnam Co., Ltd.

□ NL Cold Chain Network (M) SDN BHD

At present, the Nichirei Group
conducts business in 14 countries and areas throughout the world.

97

Nichirei Corporation …★

Nichirei Foods …●

Nichirei Logistics Group …■

Nichirei Group companies …☆

Nichirei Foods Group companies …○

Nichirei Logistics Group companies …□

Nichirei Fresh …▲

Nichirei Biosciences …◆

Nichirei Fresh Group companies …△

Nichirei Biosciences Group companies …◇

○ Nichirei Foods U.S.A., Inc.
○ InnovAsian Cuisine Enterprises Inc.
○ Nichirei U.S.A., LLC△ Nichirei Seafoods, Inc.

● Mori Plant● Hokkaido Branch□ Nichirei Logistics Hokkaido (7)▲ Higashi-Nippon Branch Hokkaido office△ Nichirei Fresh Farm (2)Seattle (US)△ Fresh Chicken Karumai● Tohoku Branch

San Francisco (US)□ Nichirei Logistics Tohoku (4)▲ Higashi-Nippon Branch Tohoku Office△ Fresh Maruichi (3)◆ San Francisco Branch◇ Pathcom Systems Corporation● Funabashi Plant● Funabashi No. 2 Plant● Funabashi No. 3 Plant

Petrolina(Brazil)★ Nichirei Corporation☆ New Housing○ Nichirei do Brasil Agricola Ltda.

Kayabegun
Sapporo☆ Nichirei Business Partners☆ Nichirei Aura
☆ Imperial Hotel Kitchen☆ Hitachi Foods & Logistics Systems

Kunohegun● Nichirei Foods▲ Nichirei Fresh◆ Nichirei Biosciences● Yamagata Plant● Shiroishi Plant

Domestic Network
Note: Figures in parenthesis indicate
number of facilities.

Saitama△ Fresh Meat Sakudaira□ Nichirei Logistics Chushikoku (12)Takatsuki
Hiroshima Osaka○ Churei○ Shin Sunfood Industry

Nishi-kasugaigun
NagoyaIwaki

Yokohama
FunabashiTokyo■ Nichirei Logistics Group□ Logistics Network (42)□ NK Trans (3)□ Tokyo Nichirei Service□ Nichirei Logistics Engineering□ Nichirei Logistics Kanto (18)
□ Tokyo Industrial Complex Storage▲ Higashi-Nippon Branch

Nagasaki□ Kyokurei (4)Fukuoka△ Nichirei Fresh Process (2)● Kyushu Branch○ Nichirei Agri

○ Nichirei Ice (4)Munakata

MiyazakiKagoshima▲ Higashi-Nippon Branch
Kyushu Office

Sayama● Metropolitan Branch

Shimonoseki○ Kyurei□ Nichirei Logistics Kyushu (12)Saku

SendaiShiroishi● Kanto Shinetsu Branch● Chushikoku Branch● Nagasaki Plant

Yamagata● Kansai Branch● Kansai No.2 Plant□ Nichirei Logistics
Kansai (12)□ Osaka Nichirei
Service▲ Nishi-Nippon Branch◆ Global Innovation Center○ Nichirei Well Dinning● Chubu Branch□ Nichirei Logistics Tokai (10)▲ Nishi-Nippon Branch Chubu Office● Kansai Plant◆ Kansai Branch

98Nichirei Group Integrated Report 2020

Overview
Overviewof Nichirei
of Nichirei
Communication
Communication

Financial
Financial
Information
Information

Non-financial
Non-financial
Information
Information• Announcement• Announcementof financialof financial
results
results• Presentation• Presentation
meetings
meetings
of medium-termof medium-termbusinessbusiness
plans
plans
• Business
Briefing
Briefing
EngageEngage-• Business
ments
ments • Teleconference• Teleconference
callscalls
withwithsecurities
securities
analysts
analysts
and andinstitutional
institutional
investors
investors• Shareholders’• Shareholders’meetings
meetings• Annual• Annual
securities
securities
reports
reports(Japanese(Japaneseonly)only)
Reports
Reports • HOPPE• HOPPE
reports
reports
for shareholders
for shareholders
and andindividual
individual
investors
investors(Japanese(Japaneseonly)only)• Dialogues• Dialogues
withwith
influential
influential
individual
individual• Meetings• Meetings
withwith
stakeholders
stakeholders• Integrated• Integrated
Reports
Reports
Reports
Reports
that arethat areintegrated
integrated
importantimportantfinancialfinancial
and andnon-financial
non-financial
information
information

• CSR
• CSR
Reports
Reports

WebsiteWebsiteInvestor
Investor
Relations
Relations

ESGESG
Information
Information

CSRCSR
Information
Information

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

The Nichirei
The Nichirei
WebsiteWebsite