Business Risks

Our group reviews business risks on a periodic basis, based on our policy on internal contorol, and takes the necessary steps to manage such risks. In cases involving any business risks that are deemed significant, responsible divisions or specialized committees formulate regulations and guidelines, conduct training, prepare manuals, and undertake additional activities asn deemed necessary.

Business Risks

Risk Description Response
1.Drastic changes in demand and market structure Contracted demand for exsiting products due to technological innovation, or fluctuation of price or supply of products due to intensified competition. Speed up R&D, respond to new needs through aggressive sales.
2.Capital expenditure risks Significant change in demand forecast, shortage of plant capacity, sudden change in price of major equipment or materials. When and however necessary, build new production facilities and continuously upgrade them.
3.Risks related to certain products Change in investment or sales plan or material procurement policy of our major customers. Diversify our customer base.
4.Risks related to procurement of materials and other items Tight supply or delay of special raw materials or materials whose suppliers are limited, or escalating price of such materials. Maintain good relations with suppliers, find new suppliers, increase the number of suppliers, and switch to general-purpose materials.
5.Risks related to legal restrictions Violation of the laws or regulations of the country or region where we operate. Comply with laws and regulations, survey changes in legal revisions, and hold periodic in-house education and audits.
6.Risks related to intellectual property rights A litigation related to intellectual property rights. Obtain intellectual property rights useful for business, survey and monitor other companies’ intellectual property rights, develop alternative technologies, and take over or license intellectual property from other companies.
7.Environmental risks A shift to stricter environmental regulations, or more corporate responsibilities related to the environment demanded by society. Develop environmentally friendly products, ensure that facilities and management systems exert minimal impact on the environment, raise production efficiency, and practice the 3Rs(reduce, reuse, recycle).
8.Risks related to fluctuations in exchange and interest rates Change in exchange or securities market, or interest rate environment. Utilize forward exchange contracts, properly manage interest-bearing debt, and carry out interest rate swap transactions.
9.Risks related to overseas business operations Unanticipated change in laws or regulations, international tax risk, particular trade practices, change in political or social conditions, social turmoil due to terrorism or war, or others. Facilitate close communiation between overseas subsidiaries and local authorities, and get advice from experts.
10.Securing human resources Difficulty in securing human resources appropriate for future business. Aggressively hire and train a diverse range of people; secure an optimal, effective workforce that matches our efforts to save labor through automation.
11.Inpairment accounting for fixed assets Occurrence of impairment loss of fixed assets due to the impact of business profitability or market trends. Conduct capital expenditure aimed at profitability and recouping investment; reorganize, sell, or transfer idle fixed assets.
12.Risks related to information management A filed claim for damages due the leak of confidential information, which our group obtained in course of business; tarnished corporate reputation due to such problems; or a decline in competitiveness due to a leak of information on newly developed technology. Establish an information Management Committee, utilize security systems, hold in-house education, and comply with the EU’s GDPR(General Data Protection Regulation).
13.Risks related to natural disasters and accidents Delay of production or shipment caused by natural disasters(such as earthquakes or typhoons), fires, or other accidents; and repair costs for damage to facilities caused by such disasters. Inplement a BCP, seismically reinforce buildings, implement disaster preparedness measures, and disperse duties among manufacturing sites.