Sustainability
Business Risks
Among the matters related to business status, accounting status, etc., stated in the securities report, the major risks that management recognizes as having the potential to significantly impact the consolidated company’s financial condition, business performance, and cash flow situation are described below, and we are working on risk countermeasures which take into account the possibility of these risks actualizing and their degree of impact on management. Please note that matters discussed herein which relate to the future are based on judgments made by our group as of the end of the consolidated fiscal year ended March 31, 2023. Furthermore, the risks discussed here do not necessarily represent all risks that may occur in the future.
(1) Industry Trend-related Risks
If the amount of newly-started housing construction and privately-owned housing construction, or remodeling demand, decreases significantly, the Group’s business performance may be affected. We will respond to these challenges by enhancing our product lineup for both new construction and remodeling.
In addition, competition between companies is becoming increasingly intense, and future trends may have an impact on the Group’s business performance. In response, we will work to differentiate ourselves from other companies by promoting our unique, high-grade enamel material, as well as by operating showrooms in around 160 locations nationwide, the largest number in the industry.
(2) Materials/Raw Materials-related Risks
In the event that factors such as unstable international conditions cause markets conditions to soar and lead to increased raw material prices or shortages or stoppages from suppliers, the Group's business and performance may be affected depending on market trends. In response, we will continue working to strengthen cost competitiveness by reducing manufacturing costs, as well as seeking to ensure stable procurement by purchasing from multiple companies, gathering information on suppliers, and thoroughly managing credit.
(3) Product, Construction , and After-sales Service-related Risks
In the unlikely event that a serious accident occurs with regard to products, construction , or after-sales service, the Group’s business and performance may be affected. In response, we always emphasize product safety, including construction and after-sales service, and have established a system to ensure quality from the product development stage; however, we will work to enhance our internal systems so that we can respond quickly and appropriately to the unlikely event that a serious accident occurs.
(4) Environment and Climate Change-related Risks
As laws and regulations regarding air pollution, water pollution, waste disposal, global warming countermeasures and the like become stricter, there is a possibility that new capital investment and compliance cost increases, among other factors, could affect the Group’s business and performance.
In response, our business departments work together with the legal department to ensure compliance with laws and regulations and make capital investments that are environmentally friendly, such as by conserving energy and reducing carbon dioxide emissions.
Further details can be found under “Environmental Initiatives.”
(5) Talented Human Resources Procurement-related Risks
If it is not possible to systematically secure and develop talented human resources due to such factors as a decline in the working population, caused by the declining birthrate and aging population in Japan, or an outflow of human resources, the efficiency of our business operations may be impaired, and this may have an impact on the Group’s business and performance.
In response, we promote diverse work styles and develop various training programs to foster human resources. In addition, we will promote operational efficiency and labor-saving efforts and will build a system that can respond to the changing work environment.
Further details can be found under “
Human Capital Initiatives.”
(6) Information Security-related Risks
As part of the production, sales and other processes, we come into possession of a large number of customers’ personal information, and, in the event of a disaster, cyberattack, unauthorized access, computer virus infection, software or equipment defect, or other such situation, the leakage, falsification, or damage of internal information, including personal information, could lead to a stagnation of business activities and a decline in the trust society has in us, which could have an impact on the Group’s business and performance.
In response, we will thoroughly implement appropriate security measures and strict information management.
(7) Natural Disaster and Pandemic-related Risks
In the event of a natural disaster, such as an earthquake or typhoon, or the spread of an infectious disease, such as COVID-19, there is a possibility that our business locations may be damaged, some or all of our business activities may be disrupted, and our business and performance may be affected, such as by the burden created by recovery costs. In response, we are striving to minimize the damage caused by disasters and reduce the impact on our business performance by decentralizing our production bases and formulating a business continuity plan (BCP).
With regard to infectious diseases like COVID-19, depending on the status of infectious spread, a situation could arise which involves a global economic downturn, changes in consumer spending behavior, factory shutdowns, delivery delays of our products or suspension of orders due to supply delays from suppliers, and other factors that would affect our business performance.
