Investor Relations

Business Risks

The Nippon Kayaku Group works to minimize risk by preventing the various kinds of risk that accompany the operation of our business from arising, dispersing risk, and other means. Risks which could potentially have a significant impact on the business performance and financial status of the Group are listed as “business risks” in the Annual Securities Report.
 The content of the Annual Securities Report submitted in June 2020 was completely revamped mainly by the Internal Control Management Division. In addition to risks directly related to business, we identified management risks from all organizations spanning the Strategic Corporate Planning Group, Research and Development Group, Administration Group, Financial Group, and Technical Operation Group. After assigning a priority ranking following the level of importance of each risk, we compiled each risk and its countermeasures.
 As a chemical manufacturer, “5. Product quality” and “6. Accident occurrence” are risks that we must be aware of constantly. “7. Research and development” and “8. Intellectual properties” are also risks that are deeply related to our sustainable growth. “9. Raw materials procurement” is an important risk for management because it relates to the elevated prices of raw materials and procurement difficulties in China that occurred in the fiscal year ended March 31, 2020. Also, “12. Information leakages” and “13. Suspension of computer systems” related to the main operations of the Financial Group are recognized as risks with a major impact on the entire Nippon Kayaku Group.

Business Risks Appearing in the Annual Securities Report Submitted in June 2020

*For details of reach risk, see pages 14 to 18 of the Annual Securities Report.

Global Risk Management Activities

At the Nippon Kayaku Group, the Internal Control Management Division leads global risk management activities, having defined the development of the BCP framework of overseas Group companies as well as training and drills as important themes. Until now, we have conducted initial response drills at overseas Group companies based on the scenarios of reporting a disaster and safety confirmation of employees. As part of global risk management activities, we have completed the compilation of BCP manuals for four Group companies in China. We select one or more locations from among those Group companies with a manual in place to conduct BCP drills locally in the presence of staff of the Internal Control Management Division.
 In October 2019, we conducted a drill at Kayaku Chemical (Wuxi) Co., Ltd. based on the scenario of a fire. This drill included initial response, restoration, and even revisions to the production plan. Based on the issues brought to light through the drill, we established an improvement plan including making changes to the BCP manual and reviewing approaches to emergency response organizations. This plan is now being implemented using the PDCA cycle.
 Looking ahead, the Safety Systems Business, which demands an even higher level of safe operations, will take the lead in expanding these activities to Group companies in regions outside of China, while working closely with each business segment.

Risk Management

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