Overall optimization of the domestic sugar business through J-Sugar2022

「Across a supply chain covering the entire country, we will promote reforms in production, sales, and logistics, including through the use of AI to improve operational efficiency.」

「In the domestic sugar business, as the industry leader by market share, we will promote transformation to maintain and strengthen our competitiveness.」

「As measures to improve production efficiency, we will reorganise the Group's production sites in Kyushu and build a robust nationwide production structure for both refined and beet sugar through a business alliance with Wada Sugar Co., Ltd. in the Kanto region and a capital and business alliance with Nippon Beet Sugar Manufacturing Co., Ltd. in Hokkaido, creating the industry's largest production structure.」

「Overall, the impact of persistently high ocean freight, packaging material and logistics costs resulting from the weaker yen and surging energy prices was absorbed through the increasing penetration of higher selling prices and stable procurement of raw materials. As a result, the sugar business recorded revenue of ¥74,484 million, up 4.6% year on year, and operating profit of ¥5,395 million, up 635.5%.」

「In the domestic sugar business, we will fundamentally review the entire value chain and improve transport and delivery efficiency by expanding the Group's sales structure, further rationalising distribution channels and establishing an optimal logistics structure.」

「Domestic raw sugar sales benefited from higher profit at the consolidated subsidiary in Hokkaido, but lower production volume at the consolidated subsidiary in Okinawa due to adverse weather and a higher cost ratio resulting from increased repair costs affected profit.」

「In terms of profit, increases in various costs, including raw material costs, ocean freight, packaging materials and logistics, continued to have a substantial impact. To absorb these cost increases, shipment prices were raised by ¥12 per kilogram in July and by a further ¥10 per kilogram in October. As a result, the sugar business recorded revenue of ¥70,130 million, up 4.0% year on year, and operating profit of ¥817 million, up 41.0%.」

「As a result, the sugar business recorded revenue of ¥35,244 million, up 5.3% year on year, and an operating loss of ¥41 million, compared with operating profit of ¥360 million in the previous year.」

「In refined sugar production, the company worked to maintain stable operations, but costs increased substantially due to the sustained high level of overseas raw sugar prices, the weaker yen, and surging fuel prices and logistics costs. To absorb these various cost increases, the company plans to raise its shipment price by ¥12 in July.」

「In the domestic sugar business, we will fundamentally review the entire value chain and improve transport and delivery efficiency by establishing optimal raw material procurement and logistics systems. We will also reduce energy consumption under an environmentally conscious production structure and promote value-added sales strategies.」

「Following the merger, in the sugar business, the core business of both companies, we will establish a profit base based on an appropriate pricing structure together with our distribution and logistics partners, under a unified sales strategy, amid a challenging business environment in which consumption continues to decline gradually.」

「We have optimised the production structure in line with sales conditions, reduced various expenses and further strengthened cooperation among the companies.」

「Under a unified management strategy, we will concentrate the management resources of both companies, improve efficiency by reviewing the supply chain and operations, and strengthen the sugar production structure. In this way, we will maintain a safe, secure and sustainable supply system while working to further enhance corporate value.」

「In sales, shipments for commercial and household use temporarily improved due in part to various government measures aimed at balancing economic activity with infection control. However, commercial demand for souvenirs and food-service businesses did not recover after the subsequent resurgence of COVID-19 led people to refrain from returning to their hometowns and shortened operating hours at restaurants. Although the company worked to maintain stable operations in production, revenue and profit declined.」

「In sales, the impact of COVID-19 remained significant, and domestic shipments of commercial products for food-service businesses and beverages declined due to the cancellation of summer events and people refraining from returning to their hometowns. Shipments for both commercial and household use began to recover in late September, partly due to various government measures aimed at balancing economic activity with infection control, but had not yet fully recovered. In production, the company adjusted output in line with downward revisions to sales volume and worked to maintain stable operations, but revenue and profit declined. As a result, the sugar business as a whole recorded revenue of ¥42,695 million, down 7.1% year on year, and operating profit of ¥1,249 million, down 46.1%.」

「In sales, commercial demand for souvenirs and food-service businesses fell sharply as people refrained from going out amid the spread of COVID-19, resulting in sales volume substantially below the previous year. Sales volume gradually began to recover after the state of emergency covering all of Japan was lifted at the end of May, but had not yet fully recovered. In terms of costs, the company implemented production adjustments in response to lower sales volume, while depreciation increased due to equipment renewals to maintain stable operations. As a result, revenue and profit declined.」

「In the domestic sugar business, we will (1) maintain investment to ensure a stable supply while investing in automation and labour-saving measures to address changes in social structures such as population decline, (2) pursue optimisation of the entire supply chain from production and sales through logistics, in anticipation of nationwide issues such as labour shortages at production and logistics sites, (3) develop competitive products using the Spoon brand, and (4) promote customer-oriented sales activities that respond to changing market needs.」

「Costs increased due to higher logistics and fuel costs resulting from labour shortages and higher depreciation from equipment renewals to maintain stable operations. However, efforts to procure raw sugar appropriately improved raw material costs, and operating profit exceeded the previous year. As a result, the sugar business as a whole recorded revenue of ¥70,219 million, up 13.0% year on year, and operating profit of ¥3,619 million, up 100.9%.」

「Costs increased due to higher logistics and fuel costs and higher depreciation from equipment renewals to maintain stable operations. However, efforts to procure raw sugar appropriately improved raw material costs, and operating profit exceeded the previous year. As a result, the sugar business as a whole recorded revenue of ¥45,978 million, up 13.8% year on year, and operating profit of ¥2,319 million, up 192.4%.」

「Costs increased due to higher freight and fuel costs and higher depreciation from equipment renewals to maintain stable operations. However, efforts to procure raw sugar appropriately improved raw material costs. As a result, the sugar business as a whole recorded revenue of ¥23,168 million, up 9.3% year on year, and operating profit of ¥992 million, up 58.6%.」

「In the domestic sugar business, while fulfilling our social responsibility to ensure a stable supply, we will optimise every phase from production, pricing strategy, sales structure and logistics, and further improve efficiency.」

「In production and sales, sales volume for household use declined during the year-end peak demand season, although commercial shipments remained strong, and revenue for the period was broadly in line with the plan. However, profit declined due to higher fuel and logistics costs, higher manufacturing fixed costs including depreciation from equipment renewals to maintain stable operations, and relatively high-cost raw material inventories resulting from the sustained low level of overseas raw sugar prices.」

「In production and sales, manufacturing variable costs, logistics costs and manufacturing fixed costs, including depreciation from equipment renewals to maintain stable operations, increased due to the surge in international crude oil prices. In addition, the company reduced shipment prices in late July in response to the decline in overseas raw sugar prices. Shipments in the Kansai and Chugoku-Shikoku regions remained weak due to the impact of the torrential rains in western Japan, while the Kobe plant was damaged by Typhoon Jebi in September. Although the impact was not severe, it could not be avoided, and sales volume for the period consequently fell below the previous year. However, the company worked to reduce selling, general and administrative expenses, resulting in operating profit in line with the plan.」

「Year on year, the sugar business posted lower profit as anticipated factors emerged, including downward pressure on domestic selling prices against a backdrop of weak raw sugar prices, higher freight and fuel costs, and a temporary decline in sales volume at a subsidiary due to weather conditions. However, shipments of products were relatively strong, and overall performance was broadly in line with the initial forecast.」

「In production, the company appropriately controlled and managed processes in line with the quality of raw sugar from each origin and worked to maintain stable operations, but manufacturing variable costs increased slightly year on year in response to higher fuel costs.」

「In production, manufacturing variable costs increased slightly year on year in response to higher fuel costs. However, the company maintained stable operations by appropriately controlling processes in line with the quality of raw sugar from each origin.」

「In the domestic sugar business, we will use the 3 plants efficiently and effectively from an overall optimisation perspective, while working to reduce costs further and strengthen profitability.」

「In production, manufacturing variable costs decreased year on year, owing in part to lower gas procurement costs against a backdrop of low crude oil prices.」

「In production, manufacturing variable costs decreased year on year, owing in part to lower gas procurement costs against a backdrop of low crude oil prices.」

「In production, manufacturing variable costs decreased year on year, owing in part to lower process burdens resulting from smooth operations since the beginning of the period and lower gas procurement costs.」

「In the domestic sugar business, we will pursue greater overall optimisation than ever before, while working to reduce costs and increase profit.」