Risk of Procurement Disruption Due to Dependence on Imports of Food-Related Products from China
First written in FY2020. 2 of 5 entries say "Worsened", first in FY2023-Q1. Latest entry: FY2026.
Shinyei Kaisha moved to the "Worse" side of this theme in 2022, the same year as the typical company in this theme.
The whole theme swung hardest in 2022: 21 of 32 companies on the "Worse" side.
0 other companies' latest entry also says "Reframed".
- FY2026ReframedAnnual report
「The Group imports most of its food-related products and raw materials from China. Although it is also developing sourcing routes outside China and working to reduce the risks associated with its reliance on imports from China, if sourcing becomes impossible due to unforeseen circumstances such as changes in China's political and economic conditions, amendments to laws, conflicts, climate change, natural disasters or infectious disease outbreaks, the Group's sales activities may be affected, which could affect its financial position and operating results. In addition, for products with a high degree of dependence on supplies from a particular country, region or supplier in any of its businesses, the Group's sales activities may be affected if raw materials, products or other items become difficult to procure due to various circumstances, including regional instability, economic stagnation, labour shortages or a supplier's suspension of operations, which could affect the Group's financial position and operating results.」
The description of dependence on sourcing from China has changed from “most” to “many,” while the development of sourcing routes outside China continues. At the same time, the scope of the risks has been broadened to include dependence on particular countries, regions and suppliers generally, as well as climate change, labour shortages and supplier shutdowns. - FY2023-Q2WorsenedAnnual report
「In addition to higher import costs resulting from soaring factory overhead and raw material costs in China and other sourcing countries and global logistics disruptions, procurement costs rose substantially amid the rapid depreciation of the yen. Supply-side constraints caused by the prolonged situation in Ukraine and the impact of lockdowns in China also contributed to continued difficult conditions for procurement.」
For food-related products sourced from China and elsewhere, in addition to higher raw material and logistics costs and the weaker yen, supply-side restrictions due to China's lockdowns and other factors have been explicitly identified, increasing pressure from the risk of supply disruptions. - FY2023-Q1WorsenedAnnual report
「In the food-related business, sales increased for frozen vegetables, frozen prepared foods and frozen processed seafood products, partly due to adjustments to selling prices in response to the rise in procurement costs described above.」
While sales in food-related operations increased, the main text indicated supply-side constraints caused by China's lockdowns and other factors, increasing pressure from the risk of supply disruptions associated with dependence on imports from China. - FY2021RestatedAnnual report
「However, the Group is also developing procurement routes outside China and working to mitigate the risk of dependence on imports from China.」
The Group reconfirmed the structure in which procurement of food-related products and raw materials depends heavily on imports from China and continues mitigation measures through the development of procurement routes outside China. - FY2020First statedAnnual report
「The Group's procurement of products and raw materials for its food-related business depends largely on imports from China. If procurement becomes impossible due to unforeseen circumstances, such as changes in China's political or economic conditions, amendments to laws, conflicts, natural disasters or infectious disease outbreaks, this could affect the Group's sales activities and its financial condition and operating results.」
The Company identified as a standalone risk its substantial dependence on imports from China for food-related products and raw materials, and also referred to mitigation through the development of procurement routes outside China.