News Release

2004.11.11Announcement of the Mid-Term Accounts for the Period Ending September 2004

We announced our mid-term accounts for the period ending September 2004 on the afternoon of Thursday, November 11 at the Tokyo and Osaka Stock Exchange Press Clubs. An outline of the accounts is presented below.

Operating Results

The domestic economy in Japan during this mid-term continued the trend of sustained recovery, fueled by a gradual increase in personal consumption and an expansion of capital investment brought about by improved corporate profitability and an increase in exports. The economies in the U.S.A. and Asia also exhibited positive growth. The food industry, although in a stage of recovery, continued to suffer from a lack of strength due to reasons such as, the transition of the price indication method to one of gross amounts (including consumption tax), and further low-price competition.

Through the "three-pronged development strategy: development of new products, seeking of new production technologies and development of new markets " and "proposal sales", our group has exerted aggressive efforts to increase the sales volume and profit.

Regarding the prospects for the future of the economy, while the Japanese domestic economy is basically in a stage of recovery, we are concerned about the influence of the high price of crude oil. Regarding overseas economies, we are concerned about such factors as the slow down which has occurred in the U.S.A. and China, and foresee that the uncertainty of the future will continue to grow. While a severe business environment is expected in the future (for a variety of reasons both inside and outside Japan), we will strive to advance the "management of competitive advantage" and become the No. 1 Niche Special Provider.

Our oils and fats division will focus on the promotion of sales through the strengthening of products by fractionation technology and the development of new products by utilizing the advantages of our group.

Our confectionery and baking ingredients division will develop new products and new markets based on our new technologies and endeavor to secure the existing market share. Its production department will lead efforts to actively reduce costs.

The soy protein division will aggressively continue its marketing activities under the "SOYAFARM" brand-stratega and aim to increase the sales volume by expanding the markets. It will plan to reestablish soy protein food products, mainly in the production and sales system, and to strengthen the business basis through a reduction in costs and an increase in the sales volume.

Results for the Mid-Term Ending September 2004
(April 1, 2004 to September 30, 2004)


(1) Consolidated Operating Results

(Note) Figures shown have been rounded down to the nearest million yen.
(%)is a comparison to the previous year

  Net sales Operating income Odinary income Net income
for the year
(millions of yen) (%) (millions of yen) (%) (millions of yen) (%) (millions of yen) (%)
Mid term ending
September 2004
82,852 106.6 5,027 106.9 4,870 104.6 3,127 135.7
Mid term ending
September 2003
77,717 106.7 4,701 95.7 4,656 100.3 2,304 99.4

(2) Non-consolidated Business Results

Net sales Operating income Odinary income Net income
for the year
(millions of yen) (%) (millions of yen) (%) (millions of yen) (%) (millions of yen) (%)
Mid term ending
September 2004
51,820 104.1 3,794 101.8 4,304 102.7 2,548 120.8
Mid term ending
September 2003
49,796 105.2 3,727 103.9 4,190 105.6 2,110 105.4
The dividend per share for this mid-term is 7.5 yen (an increase of 1.5 yen).

Forecast Results for the Year Ending March 2005 (Whole Year)

Net sales Operating income Odinary income Net income
for the year
(millions of yen) (%) (millions of yen) (%) (millions of yen) (%) (millions of yen) (%)
Consolidated 170,000 105.5 11,500 104.5 11,000 103.8 6,500 114.8
Non-Consolidated 108,000 103.7 9,200 104.7 9,500 102.5 5,700 112.5
The annual dividend per share is expected to be 15 yen (an increase of 3 yen).

Breakdown of Results by Division

Breakdown of Results by Division

Oils and Fats Division

In the Japanese domestic market, the fats for frying, which make use of the features of palm oil, continued to perform well from the previous term, and their sales volume to the food-service and restaurant industries increased significantly. The demand for hard butters for chocolate was stagnant due to the effects of the heat wave this summer, and consequently their sales volume was slow to increase.
Each overseas group company increased its sales quantity and the amount of the specialty products, typified by hard butters for chocolate, through product developments and proactive sales which involved close contact with customers. The group companies in China were faced with stiff competition as the price war became fiercer and fiercer in the market.

Confectionery and Baking Ingredients Division

In the Japanese domestic market, the sales volume of various types of ingredient chocolate for ice creams and frozen desserts increased remarkably due to the effects of the heat wave this summer. We were able to increase the sales quantity through; the development of new products by adding new functions; the low cost of operations starting from raw materials to production and delivery; and quick responses to requests from customers on quality and delivery. While we retained the same sales level as that of the previous year for margarines, shortenings, ingredient cheese and fillings, the sales of cream were slow to increase in the severe market conditions.
The sales volume of the group company in Singapore remained at the same level as that of the corresponding term of the previous fiscal year due to the effects of the strong yen. However, the sales of high value-added products such as cream expanded. The profit of the group company in Indonesia was below that of the corresponding term of the previous fiscal year due to the increased cost of raw-materials.

Soy Protein Division

In the Japanese domestic market, the sales volume of soy protein ingredients increased smoothly in the health-food market "a new market" as our proactive sales and the functionality of our new products were highly regarded.
Among soy protein food products, the sales volumes of new products combined with soy milk, Yuba (skimmed soy protein film) and products relating to tofu increased. However, as the number of product orders received decreased, in addition to the severe market conditions for both industrial use and household use, the sales volume of the soy protein food products as a whole remained below that of the corresponding term of the previous fiscal year.
The sales of "soy peptides", our original food function-enhancing ingredients, increased remarkably due to reasons such as our successful marketing activities, the highly regarded and highly recognized functions of soy peptides, and their introduction to and selection by beverage manufacturers. The quantity of "water-soluble soy polysaccharides" used for noodle products increased due to the effects of the heat wave this summer, and their export for use in acidic lactic beverages also increased. As a result, the sales of this product rose remarkably.
"Soy milk" did well as a result of the aggressive marketing and sales activities we performed to make it the key product of the "SOYAFARM BRAND". Industrial use sales increased, as did the sales for a wide range of markets, such as the confectionary and baking market and the daily dish market, due to the success of our proactive sales combined with the development of software.

End of report

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