Expansion of the African food business through an investment in Promasidor

「For the nine-month consolidated cumulative period (1 April 2019 to 31 December 2019), the investment in プロマシドール・ホールディングス社 accounted for under the equity method in the Overseas Food segment was reduced to its recoverable amount, measured at fair value less costs of disposal. This was primarily because the profitability of the dairy business in Algeria had deteriorated due to higher raw-material costs and stagnation in the domestic economy, and an early recovery in the business was expected to be difficult. As a result, an impairment loss of ¥4,232 million on the equity-method investment in プロマシドール・ホールディングス社 was recorded as other operating expenses. In addition, the trademark rights related to プロマシドール・ホールディングス社 were reduced to their recoverable amount, measured at fair value less costs of disposal, and an impairment loss of ¥3,897 million was recorded in share of profit or loss of associates.」

「As a result, an impairment loss of ¥4,232 million on the equity-method investment in プロマシドール・ホールディングス社 was recorded as other operating expenses. In addition, the trademark rights related to プロマシドール・ホールディングス社 were reduced to their recoverable amount, measured at fair value less costs of disposal, and an impairment loss of ¥3,897 million was recorded in share of profit or loss of associates.」

「The investment in プロマシドール・ホールディングス社 accounted for under the equity method was reduced to its recoverable amount, measured at fair value less costs of disposal, because competition intensified in the major African countries where the company operates amid changes in the business environment, reducing the profitability of its subsidiaries. As a result, an impairment loss of ¥14,107 million on the equity-method investment in プロマシドール・ホールディングス社 was recorded as other operating expenses.」

「As we acquired a 33.33% stake in プロマシドール・ホールディングス社, a major processed foods manufacturer operating in African countries, on 8 November 2016, the company has been included in the scope of equity-method accounting from the third quarter of the current consolidated fiscal year. As the deemed acquisition date is 31 December 2016, the company's results are not included in the quarterly consolidated statement of income for the nine-month period of the current consolidated fiscal year.」

「Through our investment in プロマシドール社, we aim to establish, together with the company, a leading position in the seasonings and processed foods business by combining its strong African distribution platform with our broad product development capabilities and production technologies, thereby contributing to a richer diet in local markets. We will consider actively participating in management and business operations, including by dispatching directors to the company, and will begin examining the integration of the Nigerian entities of both companies.」