Announcement of mid-term accounts

On the afternoon of November 15, we announced results for the first half (ended September 30, 2001) of fiscal 2002 ending March 31, 2002 at the Tokyo and Osaka Stock Exchange Press Clubs.

Business Results

Although the business conditions remained harsh throughout the period due to continued weak domestic demand, combined with low-price competition in the deflationary economy, we achieved an increase in both revenue and profit thanks to our aggressive sales approach primarily with proposal of new products and cost cutting efforts.
With safety, quality, and the protection of the environment always at the forefront, our business strategy is to focus on foodstuffs, focus on production, focus on specialties over commodities, focus on intermediate products as well as finished products, aim for a niche product, but make it enjoyed globally, and take sales approach with proposal of "hardware" (products) along with "software" (specific usage and application). Based on the strategy, the Fuji Group is committed to achieving further growth and setting up new businesses, through expanding sales into Chinese and other Asian markets as well as increasing sales of soy bean related products under the slogan of "Endeavor for growth in the 21st century."
Domestically, Kanto Chocolate Factory and Tsukuba Protein Foods Factory, core production facilities based in the Kanto area, began their full-scale operation in August and have been manufacturing products in due course.
In overseas markets, led by Fuji group companies, we are making steady progress toward a goal to expand production and sales in China and other regions in Asia.

Mid-term Results for fiscal 2002 ending March 31, 2002
(April 1 to September 30, 2001)

(1) Consolidated Business Results

(2) Non-consolidated Business Results

Outlook for the business results for fiscal 2002 ending March 31, 2002

<<Summary of Operating Results>>

Strong performance, primarily in confectionery and bread ingredients and specialty products such as functional oil and fat, contributed to growth in both consolidated and non-consolidated sales.

Consolidated pre-tax profit managed to increase from the previous year despite the continued weakness in domestic demand and competitive pricing pressure in the deflationary economy, but non-consolidated pre-tax profit was down, impacted by the effects.

Consolidated net profit for the half year sharply increased, mainly because of the beneficiary effect of posting no extraordinary loss related to retirement benefits for the period, compared with posting extraordinary loss of 1.8 billion yen from the transition adjustment caused by the change in accounting standards for retirement benefits for the previous period.

Non-consolidated profit for the half year significantly increased as well, because of the beneficiary effect of posting no extraordinary loss for the period, compared with posting an extraordinary loss of 1.7 billion yen to cover a shortfall in retirement benefits obligation and an evaluation loss of 1.9 billion yen on investments in securities for the previous term.

<<Summary of Operation by Division>>

Oils and Fats Division

Domestically, with the deflationary mood deepened by the continued recession and plunging material prices, the division suffered from a decline in profit margins, but increased sales volume of specialty products such as functional oil and fat and processed oils, backed by sales approach with new products proposed and promotional activities.
In overseas markets, our group companies in Singapore and Malaysia saw the good performance of specialty product business. Our Chinese group company significantly increased profit thanks to strong domestic demand in the country. In the U.S and Belgium, our group of companies, which had been experiencing tough years, enjoyed great improvement in revenue.

Confectionery Materials Division

A variety of chocolates used as materials for confectionery and bread, in overall terms, remained successful throughout the period.
Good performance was maintained in a variety of cream, cheese and margarine used as materials, thanks to a wide range of product lines to meet customers' needs and prompt response to product quality issues.
The division saw growth in prepared products such as bechamel sauce base for confectionery produced in our group company in Singapore, attributable to the development of new products designed for their specific use.

Protein Division

Soybean protein foods such as prepared food for daily dish, hamburgers, "ganmo," and "kinchaku and shinoda" for manufacture use suffered from pressures on prices, but the results in those for family use were better than a year earlier. Domestic group companies saw a decline in sales due to intensifying competition, resulting in profit margins down from the same period a year earlier.
Soybean protein materials business remained profitable, especially in hum and sausage market, driven by the launch of new products and proposal-type sales approach. Our Chinese group company started its operation with increased capacity and continued to be performing well.
Business in water-soluble soy polysaccharides extracted from "okara", a functional food material, grew and maintained good performance, mainly in overseas beverage markets and domestic cooked rice market.
Sales volume of soybean peptide jumped in healthy foods and sports market, supported by increasing concern about amino acid.

End of report