Dependence on China-Centered Overseas Production and Sourcing
First written in FY2016. 5 of 16 entries say "Materialised", first in FY2020. Latest entry: FY2026.
Hiraki moved to the "Worse" side of this theme in 2019, 2 years before the typical company in this theme (2021).
The whole theme swung hardest in 2022: 29 of 61 companies on the "Worse" side.
18 other companies' latest entry also says "Mitigated".
- FY2026MitigatedAnnual report
「In the fiscal year under review, purchases from China accounted for 37.8% of total purchases, while imports from China accounted for 93.4% of all import transactions, indicating a high degree of dependence on China. To hedge production-country risk, the company is working to relocate production. Approximately one-quarter of apparel is produced in third countries outside China, including Bangladesh, but China has advantages in footwear technology and materials procurement, and production outsourcing to countries outside China has not progressed.」
Dependence on China has continued, but China's share declined from 41.8% to 37.8% on a total-purchases basis and from 96.5% to 93.4% on an import-transactions basis, while apparel production in third countries increased from just over 10% to approximately one-quarter. - FY2025WorsenedAnnual report
「In the fiscal year under review, purchases from China accounted for 41.8% of total purchases, while imports from China accounted for 96.5% of all import transactions, indicating a high degree of dependence on China. Just over 10% of apparel is produced in third countries outside China, including Bangladesh, but China has advantages in footwear technology and materials procurement, and production outsourcing to countries outside China has not progressed.」
China's share of purchases increased from 36.5% to 41.8% on a total-purchases basis and from 96.3% to 96.5% on an import-transactions basis. Apparel production in third countries contracted to just over 10%, while dependence on China for footwear continued. - FY2024China's share of total purchases declined, while its share of import transactions increasedAnnual report
「In the fiscal year under review, purchases from China accounted for 36.5% of total purchases, while imports from China accounted for 96.3% of all import transactions, indicating a high degree of dependence on China. Just under 20% of apparel is produced in third countries outside China, including Bangladesh, but China has advantages in footwear technology and materials procurement, and production outsourcing to countries outside China has not progressed.」
China's share declined on a total-purchases basis, while rising to 96.3% on an import-transactions basis. Production of apparel in third countries remained just under 20%, while dependence on China for footwear continued. - FY2023China's share of total purchases increased, while its share of import transactions declinedAnnual report
「In the fiscal year under review, purchases from China accounted for 50.4% of total purchases, while imports from China accounted for 90.6% of all import transactions, indicating a high degree of dependence on China.」
China's share of total purchases increased from 44.9% in the previous fiscal year to 50.4%, while its share of import transactions declined from 91.9% to 90.6%. The high level of dependence on China has continued. - FY2023-Q3RestatedAnnual report
「However, the business environment remained challenging, as lockdowns related to COVID-19 in China and elsewhere delayed imports of original products and resulted in lost sales opportunities, while the rapid depreciation of the yen drove up procurement costs.」
Import delays and lost sales opportunities caused by lockdowns in China and elsewhere have continued. There has been no material change from the previous quarter in the nature of the impact associated with dependence on sourcing centered on China. - FY2023-Q2MaterialisedAnnual report
「However, the business environment remained challenging, as lockdowns related to COVID-19 in China and elsewhere delayed imports of original products and resulted in lost sales opportunities, while the rapid depreciation of the yen drove up procurement costs.」
Lockdowns in China and elsewhere delayed imports of original products and resulted in lost sales opportunities, with the impact of dependence on overseas production and sourcing centered on China also emerging in the current quarter. - FY2023-Q1MaterialisedAnnual report
「However, the business environment remained challenging, as the spread of COVID-19 in China and elsewhere delayed imports of original products and resulted in lost sales opportunities.」
The spread of infectious diseases in China and elsewhere delayed imports of original products and exposed the risk of dependence on overseas production and sourcing centered on China through lost sales opportunities. - FY2022WorsenedAnnual report
「In the consolidated fiscal year ended March 2022, purchases from China accounted for 44.9% of total purchases, while imports from China accounted for 91.9% of import transactions, indicating a high degree of dependence on China.」
The percentage of purchases from China rose from 42.1% to 44.9% on a total-purchases basis and from 90.7% to 91.9% on an import-transactions basis. Third-country production of apparel remained at approximately 30%, and the relocation of footwear production had not progressed. - FY2021Dependence on China continues, while progress has been made in third-country production of apparelAnnual report
「In the consolidated fiscal year ended March 2021, purchases from China accounted for 42.1% of total purchases, while imports from China accounted for 90.7% of import transactions, indicating a high degree of dependence on China. Approximately 30% of apparel can now be produced in third countries outside China, including Bangladesh, but China retains advantages in footwear technology and materials procurement, and production outsourcing outside China has not progressed.」
China accounted for 42.1% of total purchases and 90.7% of import transactions, remaining at high levels and indicating continued dependence on China. Meanwhile, approximately 30% of apparel production had shifted to third countries, but the relocation of footwear production had not progressed. - FY2021-Q3MaterialisedAnnual report
「In the mail-order business, despite delays in the arrival of some products and restrictions on travel to China, we minimized the impact by outsourcing management of partner factories to our Chinese subsidiary and continued normal operations.」
Travel restrictions to China and delays in the arrival of some products occurred. The company stated that the impact was contained by entrusting management of partner factories to its Chinese subsidiary, allowing normal operations to continue. - FY2021-Q1MaterialisedAnnual report
「In the mail-order business, some products from China were delayed due to the spread of COVID-19, and catalog distribution had to be delayed, causing April orders to stagnate.」
Delays in products from China and catalog distribution occurred, and the risk of dependence on China materialized in sluggish April mail-order bookings. - FY2020MaterialisedAnnual report
「Due to the impact of the COVID-19 pandemic, overseas contract manufacturing plants were shut down for approximately 1 month, causing delays in imports of some products. Although dependence on China remains high, we believe the impact was mitigated by our efforts to actively visit trade fairs to develop new manufacturing partners and diversify suppliers in China to avoid concentration.」
While dependence on China remained high, at 39.2% of total purchases and 91.0% of import transactions, overseas factories were actually shut down and imports were delayed. The company also stated that the impact was mitigated through supplier diversification. - FY2019WorsenedAnnual report
「In the consolidated fiscal year ended March 2019, purchases from China accounted for 41.4% of total purchases, while imports from China accounted for 91.6% of import transactions, indicating a high degree of dependence on China.」
The percentage of purchases from China rose from 39.5% in the previous fiscal year to 41.4%, while China's share of import transactions rose from 90.9% to 91.6%, increasing dependence again. - FY2018Share of total purchases declined, while share of import transactions increasedAnnual report
「In the consolidated fiscal year ended March 2018, purchases from China accounted for 39.5% of total purchases, while imports from China accounted for 90.9% of import transactions, indicating a high degree of dependence on China.」
The percentage of purchases from China declined from 42.5% in the previous fiscal year to 39.5%, while China's share of import transactions rose from 87.3% to 90.9%, reflecting changes in opposite directions in the degree of dependence. - FY2017WorsenedAnnual report
「In the consolidated fiscal year ended March 2017, purchases from China accounted for 42.5% of total purchases, while imports from China accounted for 87.3% of import transactions, indicating a high degree of dependence on China.」
The percentage of purchases from China rose from 32.5% in the previous fiscal year to 42.5%, while China's share of import transactions rose from 80.2% to 87.3%, increasing the degree of dependence. - FY2016First statedAnnual report
「In the consolidated fiscal year ended March 2016, purchases from China accounted for 32.5% of total purchases, while imports from China accounted for 80.2% of import transactions, indicating a high degree of dependence on China. To hedge production-country risk, we have diversified suppliers in China to avoid concentration and are also advancing the relocation of production to other countries.」
The company quantified its dependence on China and identified supplier diversification and relocation of production countries as countermeasures.