Improving Domestic Profitability through Capital Investment and SCM Efficiency Improvements

「The company opened and began operating its first production facility in the Chubu region, the 湖池屋 Chubu Plant in Kaizu, Gifu Prefecture, primarily to address cost increases across the supply chain and expand production capacity and productivity.」

「継続的なコスト削減施策の計画・実行、中部工場の最大活用による物流効率改善、市場動向を踏まえたフレキシブルな販売戦略及び価格戦略等を組みあわせ、最大限の利益確保に努めました。」

「The impact of higher costs, including raw material and labor costs, remains significant, and the company plans to continue cost-reduction measures and improve logistics efficiency in conjunction with the operation of the Chubu Plant.」

「Despite the continuing impact of higher raw material prices, logistics costs and other expenses, the company is continuing cost-reduction measures including optimizing production and logistics. As a result, sales expanded substantially despite higher costs, bringing domestic sales to ¥25,822 million, up 13.6% year on year, and segment profit to ¥1,727 million, up 13.7% year on year.」

「Although the company continued to be significantly affected by higher raw material prices, utility costs and other expenses, it worked to secure profit by implementing cost-reduction measures including production and logistics efficiencies and a review of product design. As described above, sales volumes increased substantially despite higher costs, and appropriate price revisions resulted in domestic sales of ¥36,380 million, up 24.6% year on year, and segment profit of ¥2,970 million, up 122.2% year on year.」

「Although the company continued to be significantly affected by higher raw material prices, utility costs and other expenses, it worked to secure profit by implementing cost-reduction measures including production and logistics efficiencies and a review of product design. As described above, sales volumes increased substantially despite higher costs, and appropriate price revisions resulted in domestic sales of ¥36,380 million, up 24.6% year on year, and segment profit of ¥2,970 million, up 122.2% year on year.」

「Meanwhile, although costs continue to be affected by higher raw material prices and utility costs, we worked to secure profits by implementing cost-reduction measures, including greater production and logistics efficiency, and revising prices to maintain product quality and secure stable profits.」

「Despite the impact of continuing inflation, the company implemented price revisions to maintain product quality and secure stable profit, while taking cost-reduction measures including optimizing production and logistics through a review of its operating structure.」

「As a measure to address the impact of global inflation, the company is progressively implementing price revisions with the understanding of business partners and working to maintain profit.」

「As a measure to address the impact of global inflation, the company is progressively implementing price revisions with the understanding of business partners and working to maintain profit.」

「Price revisions, one measure to address the impact of global inflation, have progressed smoothly with the understanding of business partners and are contributing to maintaining profit. In addition, the entire company is working on measures other than price revisions, including strengthening its internal cost-management framework to improve production efficiency and reduce manufacturing expenses.」

「Against this backdrop, the company implemented price revisions, mainly for core potato-chip products, from February 2022 to secure profit going forward.」

「Against this backdrop, the company held negotiations on price revisions, mainly for core potato-chip products, to secure profit going forward. In the consolidated second quarter, the sales mix of higher-value-added products increased year on year and profitability improved, and the company worked to secure maximum profit despite factors driving costs higher.」

「The company aims to develop community-based plants and expand sales in western Japan, particularly in Kyushu, including by establishing the 湖池屋GOGO! Factory, where original potato chips can be made. With the operation of the Kyushu Aso Plant, the company also seeks to reduce product transfers between eastern and western Japan, which had been a challenge, improve delivery efficiency in western Japan and continue improving logistics costs.」

「In addition to favorable yields for potatoes, the main raw material, improved production and logistics costs resulting from a higher sales mix of higher-value-added products also increased profit.」

「Higher production volumes have improved the handling of potatoes, the main raw material, and other cost-reduction measures have also taken effect. As a result, the cost ratio improved substantially compared with usual levels, leading to a significant increase in profit.」

「For the fiscal year ending June 2021, the company is pursuing its business under three themes: continuing to expand sales of high-value-added products, developing products to meet demand in the “With COVID-19” era, and rebuilding its logistics system through a fundamental review of its supply chain management structure.」

「Following the price revisions for core standard products such as Koikeya potato chips and Karamucho, implemented progressively from the end of the previous fiscal year, sales declined in the first quarter but recovered from the second quarter onward. Profitability improved despite upward pressure from higher manufacturing and logistics costs.」

「Sales of standard products such as Koikeya Potato Chips and Karamucho, which had softened temporarily after a price revision last year, began to improve from the second quarter onward. This enabled us to absorb increases in logistics expenses and certain raw material costs.」

「Products including the core Koikeya potato chips continue to be affected by higher logistics and other costs, but the effect of price revisions is contributing to improved profitability.」

「In the snack market, potato chips are becoming commoditized as price competition intensifies, while in recent years the industry has faced higher costs due to soaring logistics expenses and other factors. Against this backdrop, the company is working to further differentiate its brands as a long-established potato-chip producer and improve profitability, including by revising prices for core products to address higher costs.」

「In response to consumers' growing interest in safety and security in recent years and soaring logistics costs, the company will promote quality improvements through active capital investment and profitability improvements through greater SCM efficiency.」