We would like to thank our shareholders and other investors for their understanding and support of Nichirei.
The Japanese economy experienced a difficult period in the fiscal year ended March 2009. The first half was marked by appreciation of prices for oil, grains and other natural resources, while in the second half the turmoil in the global financial system and slowdown in consumption led to abrupt fluctuations in stock prices, exchange rates, and prices for marine products, agricultural products and other natural resources, together with a steep decline in corporate earnings. Curbs on capital expenditures and a worsening employment situation resulted in one of the worst economic downturns ever.
In the food and logistics industries, a series of incidents involving food safety and labeling caused heightened awareness among consumers of food safety and security. Price consciousness prevailed increasingly as consumption slowed in the recession, while overall logistics volume declined as conditions remained harsh.
Facing these conditions, the Nichirei Group placed priority on making a proper and timely response to the sweeping changes in the business environment, and took steps to enhance its corporate value, including expansion of its future growth base both in Japan and overseas. In addition, because financing options for businesses have tightened, we took steps to ensure financial stability with sufficient liquidity on hand, securing long-term loans in preparation for bond redemption, construction of a new logistics center, and other capital expenditures planned in the next fiscal year.
The fiscal year ending March 2010 is the final year for the Nichirei Group’s Medium-Term Business Plan (April 2007 to March 2010), which we have designated as a period for going on the offensive and taking on challenges. The government predicts a record contraction for the Japanese economy, and we anticipate that business conditions will remain harsh. The Nichirei Group, by enabling each business to exercise its unique capabilities, and by implementing measures to respond quickly and appropriately to the changes in the business environment, will strengthen the earnings base to provide the next step for future growth, and move steadily forward to realize the vision for each business.
June 2009
