Pressure on profitability from higher raw material prices and intercompany price competition

「Securing profits is becoming increasingly difficult because costs are rising faster than prices can be passed on.」

「Retort products benefited from solid sales of private-label pasta sauces, but production of the core OEM curry products was reduced at times for inventory adjustments following lower sales by customers. Manufacturing expenses also increased due to initial costs associated with preparations to begin operating the expanded retort plant and the commencement of depreciation after operations began. As a result, net sales were ¥1,284 million and the operating loss was ¥30 million.」

「Price increases resulting from higher raw material, energy, logistics and labor costs are becoming commonplace, while securing profits is becoming increasingly difficult because costs are rising faster than prices can be passed on.」

「Meanwhile, price competition and securing profit have become increasingly difficult amid successive increases in prices and labor costs.」

「農業用資材につきましては、黄麻製品である雑穀用麻袋や米麦用の紙袋・フレコンの販売が前年度を上回ったものの、麻シート製品需要が漸減傾向にあり、加えて円安による輸入コストの上昇や物流費の急激な上昇により利益を圧迫しました。その結果、売上高は539百万円と前連結会計年度と比べ０百万円（0.1%）の減収、営業損失は28百万円（前連結会計年度は20百万円の営業損失）となりました。」

「黄麻商品は、インテリア用資材向けは前年並みに推移しましたが、円安による輸入コストの上昇、急激な物流経費の上昇により収益を圧迫しました。包装資材の農業資材用ではクラフト米袋はホームセンター向けが増加しましたが、一般袋は値上げ交渉の進展が芳しくありませんでした。その結果、売上高は317百万円と前中間連結会計期間と比べ12百万円（3.8％）の減収、営業損失は4百万円(前中間連結会計期間は6百万円の営業利益）となりました。」

「In the Food Business, despite efforts to pass on costs, the situation remains difficult amid soaring energy and raw material prices and higher logistics costs.」

「Raw material prices have risen due to soaring grain and energy prices caused by war, climate change and other factors. Combined with higher logistics costs and labor shortages, this has made efforts to pass on costs to selling prices difficult. There is also a trend toward consumers holding back on purchases of retail pasta, while demand from inbound tourism for foodservice products continues to recover gradually, and both pasta and retort products are performing steadily.」

「In pasta, raw material prices rose due to soaring grain prices caused by poor weather and other factors, as well as persistently high crude oil prices. Although we attempted to raise prices, the increases did not keep pace with the cost increases. In addition, successive price increases led consumers to hold back on purchases, affecting sales of consumer products. Meanwhile, sales of pasta and sauces for the foodservice industry remained solid. As a result, net sales were ¥642 million, down ¥8 million, or 1.2%, from the same quarter of the previous year, and operating profit was ¥16 million, down ¥25 million, or 61.6%.」

「Sales of consumer products struggled due mainly to successive food price increases resulting from soaring raw material costs. However, total Food Business net sales were ¥341 million, up ¥16 million, or 4.9%, from the same quarter of the previous year, and operating profit was ¥14 million, up ¥1 million, or 12.8%.」

「In Packaging Materials, selling price increases for customers were unable to keep pace with higher procurement prices resulting from soaring base paper prices.」

「The Industrial Materials Business closely monitored cost estimates for overseas transactions and conducted early price negotiations in sales and procurement to secure profit.」

「The Industrial Materials Business closely monitored cost estimates for overseas transactions and conducted early price negotiations in sales and procurement to secure profit.」

「Jute products faced higher costs due to the weaker yen amid continued instability in production and uncertainty over shipments from India, the source country. Some MA rice flexible intermediate bulk container bags incurred further cost increases due to Vietnam's lockdowns, putting pressure on profit.」

「The Industrial Materials Business sells jute products, paper bags and other products, but exchange-rate fluctuations and soaring raw material prices could reduce price competitiveness.」

「Pasta revenue declined due to the impact of imported products and competitors, but we worked to review the cost ratio and reduce selling, general and administrative expenses.」

「Pasta revenue declined due to the impact of imported products and competitors, but we worked to review the cost ratio and reduce selling, general and administrative expenses.」

「In addition, the profit margin on MA flexible intermediate bulk container bags declined due to lower selling prices. As a result, net sales were ¥719 million, down ¥16 million, or 2.3%, from the previous consolidated fiscal year, while operating profit was ¥15 million, down ¥4 million, or 24.3%.」

「Pasta sales declined due to the impact of imports and competitors, while sales of curry products, including OEM production orders, increased among retort products.」

「However, higher raw material and logistics costs put pressure on profit.」

「In pasta, we expanded sales of extra-thick noodles that showcase our distinctive strengths, but sales were affected by low-priced imports and competitors' low-price offerings.」

「Sales were affected by an increase in low-priced imported products and frozen noodles offering greater convenience in preparation.」

「Pasta products, including the thick noodles for Napolitan and ankake spaghetti, have been well received, but sales were affected by an increase in low-priced imported products and frozen noodles offering greater convenience in preparation.」

「For imported products, the Company worked on new products such as gluten-free products amid price competition resulting from an increase in importers, but these efforts did not contribute to sales.」

「Domestic pasta supply volumes have remained flat, while the share of imported pasta in domestic supply exceeded 50% for the first time. In this environment, sales of both retail and food-service products stagnated, resulting in lower revenue. Although some improvement was achieved in the gross margin, the business did not achieve profitability.」

「In pasta, the Company focused on selling the thick noodles for which it is known, but this did not produce significant results. In retort products, sales of private-label products increased, and the development and marketing division worked to develop new products and services by strengthening cooperation with the sales division, but sales of national-brand products remained sluggish. In addition, soaring prices of raw materials such as vegetables due to adverse weather put pressure on profits. As a result, revenue was ¥657 million, down ¥56 million, or 7.9%, from the same quarter of the previous year, and operating loss was ¥17 million, compared with an operating loss of ¥6 million in the same quarter of the previous year.」

「The food business posted lower revenue as price competition intensified amid sluggish consumption. As a result, revenue was ¥316 million, down ¥36 million, or 10.4%, from the same quarter of the previous year, and operating loss was ¥18 million, compared with an operating loss of ¥2 million in the same quarter of the previous year.」

「Weak domestic consumption and price competition among companies put pressure on revenue and profits.」