Risk of Manufacturing Process Interruptions Due to Disasters and Other Events
First written in FY2016. 8 of 15 entries say "Materialised", first in FY2019. Latest entry: FY2023.
Toho Chemical Industry moved to the "Worse" side of this theme in 2019, 1 year before the typical company in this theme (2020).
The whole theme swung hardest in 2018: 32 of 131 companies on the "Worse" side.
34 other companies' latest entry also says "Materialised".
- FY2023MaterialisedAnnual report
「The consolidated subsidiary 東邦化学（上海）有限公司 temporarily suspended production due to the lockdown in Shanghai. Accordingly, manufacturing fixed costs incurred during the production stoppage, including personnel expenses and depreciation, were recognized as an extraordinary loss associated with the production stoppage.」
The Shanghai lockdown resulted in an actual production stoppage, and the company recognized ¥61 million as an extraordinary loss associated with the production stoppage in the fiscal year ending March 2023. - FY2023-Q3MitigatedAnnual report
「At overseas subsidiaries, most of the negative factors that arose in the second quarter had largely been resolved, resulting in a significant improvement in operating profit compared with the first and second quarters and an increase in profit year on year.」
The factors causing operating interruptions in the second quarter, including the Shanghai subsidiary's shutdown due to the Shanghai lockdown and the explosion and fire at a nearby company, were described as having largely been resolved in the third quarter. - FY2023-Q2MaterialisedAnnual report
「In the second quarter, the temporary suspension of operations at 東邦化学（上海）有限公司 due to an explosion and fire at a nearby company also became a negative factor for earnings.」
The Shanghai subsidiary temporarily suspended operations in the second quarter due to an explosion and fire at a nearby company, resulting in a negative impact on earnings. - FY2023-Q1MitigatedAnnual report
「The consolidated subsidiary 東邦化学（上海）有限公司 had suspended operations since 18 June 2022 due to the effects of the explosion and fire at 中国石化上海化工股份有限公司, which occurred in the early hours of that day. Following the resumption of utility supplies from Shanghai Petrochemical on 23 June 2022, it resumed operations on 27 June 2022.」
The Shanghai subsidiary suspended operations due to the explosion and fire at Shanghai Petrochemical, but resumed operations on 27 June after utility supplies were restored. The impact of the manufacturing process interruption partially subsided. - FY2022MaterialisedAnnual report
「Some of the utilities used by 東邦化学（上海）有限公司 are supplied by Shanghai Petrochemical. As part of that supply is currently suspended, 東邦化学（上海）有限公司 has suspended operations. Operations are expected to resume after utility supplies are restored.」
The explosion and fire at Shanghai Petrochemical caused a partial suspension of utility supplies, resulting in the shutdown of the Shanghai subsidiary. The timing of the restart was uncertain, and the manufacturing process interruption risk newly materialized as an actual operating shutdown. - FY2022-Q3MaterialisedAnnual report
「Losses associated with production stoppage － 203」
Losses including manufacturing fixed costs associated with the production stoppage at the Shanghai subsidiary totaled ¥203 million for the cumulative third-quarter period, showing the manufacturing process interruption risk continuing to materialize as a specific loss amount. - FY2022-Q2MaterialisedAnnual report
「Losses associated with production stoppage － 144」
The company recognized ¥144 million in manufacturing fixed costs incurred during the production stoppage at the Shanghai subsidiary as an extraordinary loss. The impact of the manufacturing process interruption materialized as a specific loss amount. - FY2022-Q1MaterialisedAnnual report
「Toho Chemical (Shanghai) Co., Ltd., a consolidated subsidiary of the Company that received an order to suspend production from the Jinshan District Emergency Management Bureau of Shanghai, China, dated 30 April 2021, was granted permission to resume production by the same bureau on 27 July 2021 and resumed production activities on 28 July 2021.」
The interruption of manufacturing processes actually occurred in the form of an order to suspend production at the Shanghai subsidiary. Even after production resumes, sales could continue to be affected by reduced inventories, and the timing of a return to normal business operations was described as uncertain. - FY2020WorsenedAnnual report
「In addition, because most of the Group's domestic production capacity is located in the three Kanto prefectures of Chiba, Kanagawa and Ibaraki, a disaster causing extensive damage across the Kanto region could result in those production functions being shut down simultaneously. Moreover, if the disaster causes disruption or interruption in the supply chain and logistics, it could affect the procurement of raw materials described in (2) ② and adversely affect shipments to customers.」
In addition to the existing risks involving a single plant and dedicated equipment, the company explicitly identified the risk of simultaneous shutdowns due to production concentration in the three Kanto prefectures and shipment impacts caused by supply-chain and logistics disruptions. - FY2020-Q3RestatedAnnual report
「Revenue from fine-processing resins for the electronic information industry declined slightly due to shipment delays resulting from scheduled maintenance at the company's plant in the first quarter and weak semiconductor market conditions.」
The impact of shipment delays caused by scheduled plant maintenance in the first quarter continued to be disclosed, while weak semiconductor market conditions also contributed to the decline in revenue. - FY2020-Q2RestatedAnnual report
「Although demand for semiconductor-related applications remained firm, revenue from fine-processing resins for the electronic information industry declined due to delayed shipments and other factors resulting from scheduled maintenance at the company's plant in the first quarter.」
The impact of shipment delays caused by scheduled plant maintenance in the first quarter continued into the cumulative second-quarter period and became a factor behind the decline in revenue. - FY2020-Q1MaterialisedAnnual report
「Although demand for semiconductor-related applications remained firm, revenue from fine-processing resins for the electronic information industry declined due to shipment delays and other factors resulting from scheduled maintenance at the company's plant.」
Shipment delays resulting from scheduled maintenance at the company's plant became a factor behind the decline in revenue from fine-processing resins. - FY2019MaterialisedAnnual report
「The company recognized ¥39 million as an extraordinary loss for repair costs and other expenses relating to the damage caused by a typhoon in September 2018 to its consolidated subsidiary 近代化学工業株式会社, and recognized ¥25 million as an extraordinary gain for insurance proceeds received in connection with the disaster.」
The typhoon caused losses of ¥39 million in repair costs and other expenses, and the company received ¥25 million in insurance proceeds. The disaster had an actual impact on manufacturing and business operations. - FY2017RestatedAnnual report
「In addition, the company is progressively enabling products that can be manufactured using general-purpose equipment to be produced at multiple plants, thereby diversifying the risk of manufacturing process interruptions. However, some products can only be manufactured using dedicated equipment, and in some cases the dedicated equipment is located at only one plant.」
While continuing measures including safety training, equipment inspections, seismic reinforcement and production at multiple plants, the company retains the risk of supply interruptions involving dedicated equipment at a single plant. - FY2016First statedAnnual report
「However, some products can only be manufactured using dedicated equipment, and in some cases the dedicated equipment is located at only one plant. If a major earthquake or another event that interrupts plant operations occurs, production capacity for these products could decline significantly, adversely affecting supplies to customers.」
The company also discloses safety training, equipment inspections, seismic reinforcement and risk diversification through production at multiple plants.