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Corporate Report

President's Message

Takahisa Kuno: President and Representative Director

Promoting a solutions-based business through the provision of high value-added products

Changing environment surrounding the Nisshin OilliO Group

 The environment in which the Nisshin OilliO Group operates is undergoing a considerable change. The rise in food demand owing to an increase in the global population is contributing to escalating grain prices and is also have a substantial impact on earnings at the Nisshin OilliO Group, as we rely on overseas markets to procure raw materials. Moreover a growth in the middle-income class in Asia is triggering demand for high-quality luxury items. We are beginning to see changes in the market, including demand for functions that add good flavor, including a melt-in-the-mouth sensation, to specialty fats (cocoa butter equivalent). Meanwhile, in Japan consumers are once again recognizing the importance of consuming healthy fats through food. The need to actively consume fat for one’s health is evident in the demand for vegetable oils. As with these vegetable oils, a major product, demand is continuing to grow for fats that contribute to good flavor and health. Consequently, the Nisshin OilliO Group, which possesses a high level of technological expertise for extracting and producing fats from vegetables, is experiencing an unprecedented favorable market conditions.
In accordance with goal 12 of the United Nation’s SDGs, to ensure sustainable consumption and production patterns, sustainable raw material procurement is one standard being used to assess corporate value. We recognize that as a company we cannot avoid undertaking sustainability initiatives so that the Nisshin OilliO Group can support the food and nutritional needs of the world’s growing population and continue to grow moving forward.

Reviewing the first year of the medium-term management plan

 In FY2017, we launched OilliO Value Up 2020, a four-year medium-term management plan. The three keywords in the plan, which is set to run through FY2020, are globalization, technological innovation and strategic marketing. In FY2017, the first year of this plan, we steadily produced results.
First, focusing on Japan, we continued to expand demand for vegetable oils. In particular, we increased demand for commercial-use oils owing to the shift in sales from household cooking to ready-made meal manufacturers and restaurants. Meanwhile, demand for household-use oils is not necessarily slipping. Sales are also rising in the household-use domain. One distinct trend is stronger demand for olive oil, sesame seed oil, flaxseed and other healthy oils, owing to active use by health conscious consumers. To this end, the Nisshin OilliO Group is creating a new market. In line with our keywords strategic marketing and technological innovation, we are promoting the consumption of edible oils used directly on food like a condiment.
Meanwhile, as a step towards further globalization, another keyword, FY2017 was the year for building our infrastructure. In the Processed Oil and Fat Business, we built a global supply chain, centered around Intercontinental Specialty Fats Sdn. Bhd. (ISF) in Malaysia, and are making preparations to expand our business domains. We are also developing a platform to get a foothold in the market itself. We are also making business investments in regions where we forecast a high level of demand for high-quality products in the future owing to regional economic development. As a first step in this direction, our consolidated subsidiary Daito Cacao Co., Ltd. established PT. Indoagri Daitocacao in Indonesia. This is a joint venture that will produce and sell commercial-use chocolate. Construction on a local plant is underway. We are also aiming to enhance our global presence in the Fine Chemical Business by enhancing our production capacity in Japan and abroad and by strengthening sales in China and Southeast Asia.

Deriving unique added value from solutions

 As we implement our medium-term management plan in a changing global market climate, the Nisshin OilliO Group is placing significance on “added value.” We believe that the source for differentiation with rivals is a solutions-based business in which we aim to accurately pinpoint customer needs, develop and supply products that meet such needs so that customers realize value.
In the commercial-use domain, our goal is to fulfill our responsibility as a supplier so that our customers can continue to carry out their business operations and bolster their value. Consequently, stable supply is not enough. We believe it is necessary to pool together the technical expertise and marketing capabilities of the Nisshin OilliO Group to work in cooperation with our customers to confront their issues and needs. Accordingly, we aim to establish a system that provides technology, knowhow and services aim by setting up local production and sales sites overseas so that we are closer to our customers.
In the Health Science Business, we are focusing on a wide range of domains. We are operating a value-added business, mainly the Medium Chain Triglycerides (MCT) business. Based on the steps we tackled in FY2017, we plan to take more in-depth actions in FY2018.

Positioning ESG management as our foundation

 In recent years, companies operating businesses globally, in particular, are being required to place emphasis on ESG (environment, sustainability, and governance). This holds true for the Nisshin OilliO Group as well. In 2011, we signed the United Nations Global Compact. One of the measures for strengthening platforms and infrastructure in our medium-term management plan is to “implement ESG management.” In line with this, we are currently implementing environmental management, transparent management, and workstyle reforms, among other initiatives. We have also been recognized as a one of the White 500 companies in the Health and Productivity Management Organization Recognition Program. In 2017, we issued a health management declaration for all employees. This reflects our desire to take the initiative to ensure our own health given that the focus of our business is to enrich the lives of consumers. In addition, we are promoting workstyle reforms. We are implementing work-life balance so that our employees possess more flexible ideas and are more creative in their jobs. We believe that this will contribute to the development of products that customers deem valuable. Through this, we ultimately aim to support the healthy life and extend the healthy life expectancy of people in Japan, where the population is aging rapidly.
A year has passed in since I was appointed president. During this time, I have come to fully realize the magnitude of the expectations that our customers and the general public has in the Nisshin OilliO Group. Our oil and fat business extensively supports the public’s dietary infrastructure, including ready-made meal manufacturers and restaurants, as well as household cooking. In accordance with our corporate statement, The Natural Power of Plants, we are constantly aware of our social contribution and the significance of our social mission. Amid this, we aim to achieve sustainable growth by pursuing profit and through the collective strength of all of our employees.

T.Kuno

Takahisa Kuno
President and Representative Director
July 2018

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Corporate Report 2018

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