Sustainability
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- Sustainability
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Message from the CEO
I am Takao Umino, Representative Director, Chairman & CEO.
I would like to express my sincere gratitude for your continued support and cooperation
in the corporate activities of the Group.
In October 2024, the Group has renewed its management structure. I was appointed
Representative Director, Chairman & CEO, and Kenji Hasegawa was appointed Representative
Director, President & COO.
From now on, Hasegawa and I will work hand in hand to promote various sustainability
measures.
Corporate statement
Looking at the global environment and developments in the world, climate change and natural
disasters have exacerbated a wide range of social challenges, such as poverty, food
shortages, and increasing income disparity between people all over the world. Furthermore,
the flavor and fragrance industry is greatly affected by the declining birthrate and aging
population in Japan, changes in consumer needs, and so on. Specifically, abnormal weather
and loss of biodiversity due to climate change are expected to have a significant impact on
the yields and quality of natural raw materials derived from plants and animals, as well as
on changes in customer needs and consumer trends as a result of temperature rises.
By accurately identifying such changes in customer needs and consumer trends, the Group has,
since its founding, worked to help address various social issues, including food shortages,
through initiatives such as developing flavor ingredients that serve as alternatives to
depleting food resources and responding to increasing health consciousness. In FY2025, the
Group established a new corporate statement: “To be a company that generates value and
excitement to enrich lives, we utilize a broad range of technologies extending beyond
flavors and fragrances.”
This statement expresses the Group’s aspirations and the direction it seeks to pursue.
Moving forward, the Group will continue to act in accordance with the spirit of this
corporate statement, striving as one to achieve sustainable growth and enhance corporate
value.
In order to achieve sustainable growth for the Group, we need to build a resilient
organization that can flexibly respond to changes in the business environment and unforeseen
circumstances and strengthen our global expansion further while striving to expand our
market share in the domestic market, which is maturing due to the declining birthrate and
aging population. We will efficiently allocate management resources to the United States,
which is our priority region, and to Asia, centering on China and Southeast Asia, to capture
market growth potential and consumer preferences accurately. Furthermore, we will formulate
and implement business strategies in response to changes in the business environment. We
will also make investments to achieve sustainable growth in the future and aim to expand our
business performance in overseas markets.
Improving corporate value and solving social challenges
The Group will center its efforts around three core strategies: expanding compound flavor and fragrance, increasing profitability in the domestic market, and driving growth in overseas markets. At the same time, we will promote sustainability initiatives, strengthen human capital, and pursue strategic selection and concentration of business operations.
Research
In Japan, under the Business Solution Division, which oversees sales, research, and marketing, we are attempting to refine existing technologies and develop new technologies by clarifying priority areas in order to promote strategic research and development. Our aim is to improve our technological development capabilities, which will contribute to the sustainable growth of our Group. In addition, we will enhance our business acumen to capture market trends and our competitive mindset through collaboration with sales and marketing and differentiate ourselves from our competitors by developing products with unique characteristics. We will then focus on creating new value by leveraging outside knowledge and promoting technological innovation through the sharing and integration of intellectual assets. Furthermore, we will contribute to solving challenges facing society by utilizing the technologies we have developed in the flavor and fragrance business.
Food (flavor)
In the Flavor Sector, we will continue to develop flavors by pursuing an ongoing expansion of health consciousness in society, which brings delicious taste to low-sugar, low-salt, and low-fat foods, as well as flavors that are stable and long-lasting, thereby ensuring safety and security as our first priority. In addition, we will focus our efforts on the development of flavors that can be used as substitutes for food materials to solve social challenges, such as the shortage of food resources.
Fragrance
In the Fragrance Sector, we will work to continue expanding our market share in Japan by conducting thorough basic research and creating new fragrances with superior safety and stability. Overseas, we will endeavor to create fragrances preferred by local consumers based on the results of market research and preference surveys.
Sales
In the Sales Sector, through collaboration with research and marketing, we will strive to understand the potential customer desires by utilizing market research and analysis, thereby providing the right solutions that leverage our comprehensive strengths. Through these efforts, we aim to establish ourselves as a trusted partner to our customers, expand sales, and increase our sales share by contributing to customer success. We will also strengthen our search for and development of new customers and expand our sales base to support our future growth.
Procurement
To realize stable procurement of high-quality and price-competitive raw materials, we promote procurement activities that take into consideration resources, the environment, and human rights. We will engage in dialogue with our suppliers through supplier assessments and other means related to human rights, labor, the environment, fair corporate activities, quality and safety, information security, supply chain, local communities, and corporate governance.
Production and quality control
We will promote further safety measures and develop an occupational health and
safety system. We will also restructure our factories and integrate production
equipment to accommodate changes in production items. Furthermore, we will promote
coexistence with local residents by preventing the spread of odors around the
factories and reducing GHG emissions over the long term. Efforts to improve
manufacturing methods, review distribution systems, and optimize inventories will
also continue to reduce manufacturing costs.
We will continue to place the highest priority on complete quality control and
assurance of safety and attempt to provide safe and reliable products that satisfy
our customers under a comprehensive quality assurance system covering research and
development, raw materials procurement, production, and sales under the leadership
of the Quality Assurance Division, which communicates directly with the President &
COO.
Overseas expansion
The global flavor and fragrance market continues to grow at an average annual rate
of around 3%. The Group will continue striving for sustainable growth by allocating
management resources efficiently, expanding sales overseas, and further
strengthening partnerships with customers.
In the United States, we are actively promoting local sales activities with the aim
of increasing sales in the savory, health, and beverage segments. We will also work
to expand our business in the U.S. market by leveraging synergies with ABELEI, which
we acquired in September 2024, to broaden our sales channels in the Midwest region,
and by promoting the application and expansion of Japanese technologies that are
highly valued by our customers.
In China, the Group has established a new manufacturing subsidiary to prepare for
the construction of a third production site aimed at increasing capacity. We are
working to strengthen both our research and production systems, while also enhancing
our sales operations by leveraging collaboration with R&D and utilizing our
marketing capabilities. Through these efforts, we aim to expand sales by tapping
into new sectors and uncovering latent demand.
In Southeast Asia, we are working to expand sales through collaboration between our
manufacturing and sales base in Malaysia and our sales offices in Thailand and
Indonesia. We have already secured land in the Enstek Industrial Park in Malaysia
for a new production facility and will increase production capacity to meet growing
demand in both the Asian and halal markets.
We will also accelerate our responsiveness to customer needs by promoting the use of
our application laboratories, expanding our ingredient library, and improving
efficiency through the use of flavor kits.
Sustainability
There is a greater demand for initiatives that not only pursue the growth of one’s
own company, but also build a sustainable society with a greater focus on its
stakeholders. Amid these circumstances, we first organized CSR activities that we
have engaged in for many years. Next, we expressed our support for the IFRA-IOFI
Sustainability Charter and the UN Global Compact, which were both signed in 2020.
Finally, we determined that our materiality is categorized into two types: solving
social issues through our business process and by our products. Then, based on the
materiality set forth, we have stipulated six CSR policies (“Procurement,”
“Environment,” “Human rights and labor,” “Quality safety,” “Governance—Fair
corporate activities,” and “Innovation”) in 2020.
We established the Sustainability Committee to promote initiatives under the six CSR
policies. In March 2022, we expressed our support for the recommendations of the
Task Force on Climate-related Financial Disclosures (TCFD), and in June 2024, we
disclosed information based on the recommendations of the Taskforce on
Nature-related Financial Disclosures (TNFD), integrating them with our TCFD-based
disclosures.
We also identify human rights risks that should be dealt with to prevent or mitigate
the negative impact of business activities on human rights. We take measures to
address identified risks and regularly monitor and disclose information to improve
our efforts.
Human capital
Since our founding, our people (“our human capital“) have supported the Company. As
the external environment changes on a daily basis, it is necessary to hire and
develop human resources who can flexibly respond to change (without regard to race,
nationality, gender, religion, disability, or other attributes) and enhance our
human capital in order to solve a range of problems facing the world. The Group
considers human resources as capital and promotes human capital management. This
approach aims to maximize the value of human resources and increase corporate value
over the medium to long term by continuously considering and implementing
improvement measures.
In line with our management policy of promoting human capital management, enhancing
employee engagement, and creating a comfortable working environment, we continue to
align our management and human resources strategies through initiatives such as
reforming our personnel systems and advancing talent development programs. We aim to
build a workplace where employees embrace change, take on new challenges, and feel a
sense of purpose and fulfillment.
Gaining and strengthening trust with stakeholders
As a member of society, the Group strives to gain and strengthen relationships of trust with
each of its stakeholders.
For example, to ensure timely and appropriate information disclosure, transparency, and
accountability to shareholders, we are strengthening IR activities by holding individual
meetings with analysts and institutional investors, holding financial results briefings for
institutional investors, and enhancing information disclosure.
Conclusion
To achieve the sustainable growth of the Company and the realization of a sustainable
society, we must look not only one or two years from now, but also evolve with a broader
perspective of the future 10 or 100 years ahead. The world of flavors and fragrances still
leaves uncharted territory, but we have the latest science and the sensibilities we have
inherited from more than a century of history. To pursue the limitless possibilities of
flavors and fragrances, we aim to make proposals that exceed expectations as a partner in
manufacturing by analyzing flavor and fragrance trends, developing new technologies, and
strengthening our ability to make proposals that anticipate potential needs.
The world is facing a variety of challenges, such as worsening global environmental
problems, maturing and diversifying markets, aging societies, and food resource shortages.
To help address these issues, we aspire to be a company that goes beyond flavor and
fragrance, leverages a broad range of technologies to create new value and inspiration, and
contributes to a richer, more fulfilling life.