Regional Expansion of Overseas Sales

「New customer development is beginning to produce results, and we began doing business in certain areas with the Kroger group, one of the largest US companies.」

「At the U.S. subsidiary HOKTO KINOKO COMPANY, sales remained at the previous-year level, but sales and operating income, including operating income, fell below the initial plan because of unsuccessful bids by major customers and declining demand. At the Taiwanese subsidiary 台灣北斗生技股份有限公司, vegetable prices declined because of oversupply under stable weather conditions, and mushroom prices also softened. As a result, neither sales nor operating income reached the initial plan. At the Malaysian subsidiary HOKTO MALAYSIA SDN. BHD., both sales and operating income fell below the initial plan because of generally weak sales.」

「Developing new customers, focusing on high-end retailers with high selling prices.」

「As a result of strengthening efforts to expand sales to new customers, transactions with major retailers began, and we steadily advanced initiatives to expand sales.」

「At the U.S. subsidiary HOKTO KINOKO COMPANY, sales and operating income fell below plan, partly because orders declined following price increases implemented for all customers. However, steady efforts to develop new, high-margin customers resulted in a substantial improvement in operating income compared with the previous year. At the Taiwanese subsidiary 台灣北斗生技股份有限公司, demand expanded and high selling prices were maintained as cold weather arrived during the winter and Lunar New Year demand season, resulting in higher sales and operating income. At the Malaysian subsidiary HOKTO MALAYSIA SDN. BHD., sales remained sluggish throughout the year except for certain periods. Although sales and operating income improved from the previous year, both fell below plan.」

「In Malaysia and Singapore, the effect of inexpensive Chinese mushrooms was limited because we strengthened proposals and promotional activities. In other ASEAN regions, however, sales conditions remained difficult because of intense competition for market share with Korean products in addition to inexpensive Chinese products.」

「At the U.S. subsidiary HOKTO KINOKO COMPANY, sales remained firm and the effect of price increases helped both sales and operating income exceed plan. At the Taiwanese subsidiary 台灣北斗生技股份有限公司, price competition among retailers continued to intensify, and difficult conditions persisted, including difficulties raising prices for individual customers. As a result, both sales and operating income fell slightly below plan.」

「At the Taiwanese subsidiary 台灣北斗生技股份有限公司, price competition among retailers intensified, and price increase requests were rejected by individual customers, creating difficult conditions. As a result, sales and operating income fell below plan. At the Malaysian subsidiary HOKTO MALAYSIA SDN. BHD., restrictions on in-store promotions and events were lifted as COVID-19 moved toward an end. We therefore held events including in-store sampling and pick-your-own sales, mainly in Malaysia, to increase sales. However, although the impact of Chinese mushrooms had diminished, the effect of inexpensive mushrooms from other sources caused both mushroom sales and operating income to fall below plan.」

「At the Taiwanese subsidiary 台灣北斗生技股份有限公司, no typhoons struck Taiwan during the previous 3 years, but 3 typhoons had already made direct landfall in southern Taiwan this fiscal year. This reduced the overall supply of vegetables and increased demand for mushrooms, allowing sales to remain firm and exceed budget. However, difficult pricing conditions continued, and operating income fell below plan. At the Malaysian subsidiary HOKTO MALAYSIA SDN. BHD., inflation from the previous year had begun to ease, but large volumes of inexpensive Chinese mushrooms were imported into ASEAN amid an uncertain economic outlook, significantly affecting our mushroom sales.」

「At the U.S. subsidiary HOKTO KINOKO COMPANY, sales increased year on year as a result of two price increases implemented since the second half of the previous year.」

「In March 2018, we opened a sales office in Taipei, a major consumption center, to improve sales efficiency, and worked to strengthen communication with major chains, marketing and information gathering. As transactions with new customers, including Taiwan's leading Uni-President Enterprises Group and major food-service companies, became established during that period, we were able to establish a more stable management structure. We therefore closed the Taipei office at the end of December 2022 to address Taiwan Hokuto's future challenges and strengthen administrative functions at our base in Pingtung.」

「At the U.S. subsidiary HOKTO KINOKO COMPANY, the benefits of price increases implemented at the end of November were offset by lower sales volume caused by production defects in some products, and sales growth was sluggish. At the Taiwanese subsidiary 台灣北斗生技股份有限公司, the easing of COVID-19-related movement restrictions boosted domestic tourism and food-service demand, reducing opportunities for home cooking and depressing sales across the retail market.」

「At the U.S. subsidiary HOKTO KINOKO COMPANY, sales remained firm, but operating income fell slightly below plan because of competition from imported products and higher prices. At the Taiwanese subsidiary 台灣北斗生技股份有限公司, domestic tourism and the food-service industry expanded rapidly as COVID-19-related movement restrictions were eased. However, the retail market as a whole struggled, and mushroom sales also declined.」

「At the U.S. subsidiary HOKTO KINOKO COMPANY, sales remained firm, but operating income fell slightly below plan because of higher raw material costs and other factors. At the Taiwanese subsidiary 台灣北斗生技股份有限公司, vegetable prices remained high because temperatures did not rise after the Lunar New Year in February and the rainy season front remained stagnant for an extended period. In addition, the explosive increase in COVID-19 cases boosted demand for home cooking, allowing sales at high price levels to be maintained and contributing to sales and operating income. Sales volume declined in June as extremely hot weather reduced consumption, causing sales to fall slightly below plan, while operating income exceeded plan. At the Malaysian subsidiary HOKTO MALAYSIA SDN. BHD., restrictions were lifted in the ASEAN countries to which we sell, increasing travel, including overseas travel, and dining out. Consumers therefore had far fewer opportunities to buy ingredients at retail stores and cook at home, affecting mushroom sales. Competition for market share with mushrooms from China also intensified in all countries where we sell, and mushroom sales overall struggled amid weak consumption caused by inflation. As a result, both sales and operating income fell below plan.」

「At the U.S. subsidiary HOKTO KINOKO COMPANY, sales centered on food service remained firm during the first half of the fiscal year as economic activity accelerated with the expansion of vaccinations. At the Taiwanese subsidiary 台灣北斗生技股份有限公司, vegetable prices fluctuated sharply during the year, and retail-focused sales were unstable. However, efforts to develop new retail sales resulted in sales falling only slightly below plan, while operating income exceeded plan.」

「Containers from Malaysia to ASEAN countries were frequently omitted from sailings or canceled because of disruptions in cargo volumes, affecting sales. Despite focusing on sales centered on promotional campaigns and reducing expenses in this difficult environment, sales fell below plan.」

「At the U.S. subsidiary HOKTO KINOKO COMPANY, economic activity accelerated as vaccination rates increased, and both sales volume and unit prices exceeded plan. As a result, sales and operating income significantly exceeded plan. At the Taiwanese subsidiary 台灣北斗生技股份有限公司, demand for home cooking increased because of tighter regulations to prevent the spread of COVID-19. Mushroom prices also remained firm as vegetable prices rose because of heavy rainfall, allowing both sales and operating income to exceed plan.」

「Despite these difficult conditions, we focused on retail sales, made proposals online and pursued new business. As a result, sales were only slightly below plan.」

「At the U.S. subsidiary HOKTO KINOKO COMPANY, conditions remained difficult as the effects of COVID-19 persisted.」

「At the U.S. subsidiary HOKTO KINOKO COMPANY, consumer sales were recovering as the effects of COVID-19 persisted, but sales to food-service customers such as restaurants remained sluggish, causing sales to fall below plan. At the Taiwanese subsidiary 台灣北斗生技股份有限公司, the impact of COVID-19 on the domestic economy was limited, but demand for nationwide barbecues during the Mid-Autumn Festival holiday in early October was weak. This led to an oversupply of vegetables overall, continued price declines and difficult sales conditions. At the Malaysian subsidiary HOKTO MALAYSIA SDN. BHD., restricted movement orders were introduced from mid-October in response to the spread of COVID-19, causing consumers to refrain from shopping. In addition, container shortages and difficulties securing vessels affected exports to Vietnam and Indonesia, significantly affecting sales and resulting in difficult conditions.」

「At the Malaysian subsidiary HOKTO MALAYSIA SDN. BHD., the spread of COVID-19 significantly affected sales in all ASEAN countries to which we sell, resulting in difficult conditions.」

「At the U.S. subsidiary HOKTO KINOKO COMPANY, we continued to focus on non-Asian markets, particularly food service. However, many restaurants were forced to close because of the COVID-19 pandemic, and sales remained sluggish.」

「On the sales side, amid intense competition for market share with Chinese and Korean products, we strengthened campaigns and promotions at mass retailers with strong sales capabilities. This enhanced the branding effect and led to expanded new customer acquisition efforts.」

「On the sales side, amid intense competition for market share with Chinese and Korean products, we strengthened campaigns and promotions at mass retailers with strong sales capabilities, thereby enhancing the branding effect and intensifying new customer acquisition efforts.」

「At the Taiwan subsidiary, 台灣北斗生技股份有限公司, strong sales channels and brand strength enabled stable trading, while new customer acquisition also progressed steadily, allowing sales to exceed plan. At the Malaysian subsidiary, HOKTO MALAYSIA SDN. BHD., core customers were gradually being established, and proposal-based sales were advanced mainly through these customers. Sales were also expanded broadly across Southeast Asian markets, not only within Malaysia, gradually expanding the mushroom market.」

「In Malaysia, the production division had reached a stage of stable cultivation four years after construction of the plant. On the sales side, while competition for market share with Chinese products remained intense, core customers were being established and the brand strategy enabled us to gradually advance higher-priced sales. Expanding sales broadly across Southeast Asian markets, not only within Malaysia, also enabled us to gradually expand the mushroom market.」

「Sales to the core supermarket chain remained strong and stable trading continued, allowing us to exceed plan.」

「The US subsidiary, HOKTO KINOKO COMPANY, continued to focus on developing the non-Asian customer market and expanded sales. The Taiwan subsidiary, 台灣北斗生技股份有限公司, focused on brand building and proposal-based sales. The Malaysian subsidiary, HOKTO MALAYSIA SDN. BHD., expanded sales broadly across Southeast Asian markets, not only within Malaysia.」

「Sales initiatives with a core supermarket chain have been successful, enabling stable sales. Sales were also expanded broadly across Southeast Asian markets, not only within Malaysia. Strong sales to Singapore and Indonesia also resulted in higher sales than in the previous fiscal year.」

「At the Taiwan subsidiary, 台灣北斗生技股份有限公司, the sales environment was challenging due to hot weather and low-priced sales of competitors' products. However, active initiatives including TV commercials, brand building and proposal-based sales successfully differentiated the business from competitors, resulting in higher sales than in the previous fiscal year.」

「To expand business with major chains and strengthen information gathering in response to intense competition, we opened a sales office in Taipei in March 2018.」

「The Malaysian subsidiary, HOKTO MALAYSIA SDN. BHD., expanded sales not only within Malaysia but also in markets across Southeast Asia, including Singapore. In addition, the Overseas Sales Department continued marketing activities in Asian countries and Europe.」

「The US subsidiary, HOKTO KINOKO COMPANY, continued to focus on developing the non-Asian customer market and sought to expand sales. The Taiwan subsidiary, 台灣北斗生技股份有限公司, focused on brand building and proposal-based sales, but mushroom prices remained under pressure as distribution volumes increased due to higher production by competitors and other factors. The Malaysian subsidiary, HOKTO MALAYSIA SDN. BHD., expanded sales broadly across Southeast Asian markets, not only within Malaysia. The Company's Overseas Business Division also continued marketing activities in Europe.」

「The Taiwan subsidiary, 台灣北斗生技股份有限公司, focused on brand building and proposal-based sales. The US subsidiary, HOKTO KINOKO COMPANY, focused on developing non-Asian customers and sought to expand sales. Marketing activities in Europe also continued. The Malaysian subsidiary, HOKTO MALAYSIA SDN. BHD., expanded sales broadly across Southeast Asian markets, not only within Malaysia.」

「The Taiwan subsidiary, 台灣北斗生技股份有限公司, sold locally produced bunashimeji and Bunapi mushrooms, as well as maitake imported from Japan. It also conducted market research and strategic sales activities with a view to selling mushrooms in China, aiming to expand the market.」

「The Taiwan subsidiary, 台灣北斗生技股份有限公司, focused on brand building and proposal-based sales, but conditions remained difficult due to intensifying competition and the effects of extremely hot weather. The US subsidiary, HOKTO KINOKO COMPANY, continued to focus on developing non-Asian customers and sought to expand sales. Marketing activities in Europe also continued. The Malaysian subsidiary, HOKTO MALAYSIA SDN. BHD., expanded sales broadly across Southeast Asian markets, not only within Malaysia.」

「To strengthen market research and information-gathering activities in northern Southeast Asia, we opened a representative office in Bangkok, Thailand, in July 2016.」

「The Taiwan subsidiary, 台灣北斗生技股份有限公司, focused on building the brand and strengthening its sales capabilities. The US subsidiary, HOKTO KINOKO COMPANY, continued to focus on sales to non-Asian customers. The Malaysian subsidiary, HOKTO MALAYSIA SDN. BHD., expanded sales not only within Malaysia but also into neighboring countries.」

「The subsidiaries in Taiwan and Malaysia will continue developing markets centered on Southeast Asia and China, while the US subsidiary will focus on acquiring new non-Asian customers and work to further expand sales.」