Announcement of the Mid-Term Accounts for the Period Ending September 2007

(Note) Figures shown have been rounded down to the nearest million yen.

We announced our mid-term accounts for the period ending September 2007 on the afternoon of Thursday, November 8 at the Tokyo Stock Exchange and Osaka Securities Exchange Press Clubs. An outline of the accounts is presented below.

Conditions Influencing the Results

During this term the domestic economy in Japan saw an overall trend of gradual recovery due to improvements in corporate profitability and increases in capital investment, however, the food industry, to which we belong, faced a severe business environment due to the mature nature of domestic markets and ongoing increases in raw material prices. In such an environment, our group was engaged in revising our sales prices to offset increasing material costs and actively promoting the "three-pronged development strategy: development of new products, development of new production technologies and development of new markets", as well as "cost reduction" and "proactive sales" to expand our sales and enhance our cost competitiveness.
Through these efforts, we achieved a record high interim sales volume of 98,193 million yen (an increase of 11.2% over the previous term). On the other hand, ensuring profits was a challenge because sales increases in new products and new materials and cost reductions were not enough to offset high raw material prices; with operating income of 2,277 million yen (a decrease of 26.2% over the previous term), ordinary income of 1,986 million yen (a decrease of 26.7% over the previous term) and net income for the term of 1,063 million yen (a decrease of 21.3% over the previous term).

Breakdown of Results by Divison

<Oils and Fats Processing Business>

In the Japanese market, both the sales volume and net sales increased as a result of our efforts to enhance the marketing and sales of palm oil-related products in particular, however cost increases due to high raw material prices and the operation of Chiba Plant resulted in a year-on-year decline in profits. Although influenced by high raw material prices as well, our overseas group companies achieved increases in both sales and profits thanks to ongoing steady growth of specialty products such as hard butters for chocolate and products with a low trans acid content, especially in the European and American markets.
Through these efforts, this business group achieved a sales volume of 37,899 million yen (an increase of 19.0% over the previous year) and an operating income of 1,025 million yen (a decrease of 35.1% over the previous year).

<Confectionery and Baking Ingredients Business>

Domestically, various types of ingredient chocolate enjoyed sales growth compared to the previous term owing to increases in sales for new markets and new uses through proactive sales, however high raw material prices led to a year-on-year decline in profits. Cream products saw a decline in profits despite satisfactory sales of new products including products with "scrumptiousness sustaining functions." Margarines, shortenings and fillings experienced decreases in both sales and profits due to high raw material prices and weak markets. The import and sales of confectionery and baking ingredients did well overall thanks to steady growth in the sales of various products using butter, even under such severe conditions as the skyrocketing prices of overseas dairy products.
Our group companies in Japan aggressively introduced new dessert products but saw a year-on-year sales decline.
Overseas, our group companies in Singapore and Indonesia enjoyed good performance by meeting customers' needs and increasing their sales.
Through these efforts, this business group achieved a sales volume of 41,642 million yen (an increase of 11.5% over the previous year) and an operating income of 2,031 million yen (an increase of 9.3% over the previous year) as the profit growth overseas offset the drop in profits in the Japanese market.

<Soy Protein Business>

Soy protein ingredients saw a year-on-year decline in both sales and profits due to sluggish demand in the meat and fish markets, a slowdown in the growth of the health-food market and high material prices.
While soy protein products sold through co-ops enjoyed an increase in both sales volume and net sales, products for industrial use saw a year-on-year decrease.
Among food function-enhancing ingredients, water-soluble soy polysaccharides expanded sales in the beverage market but the products for cooked rice and noodles experienced a decline in demand. The sales of soy peptides increased in the fermentation and culture markets.
Soy milk and mail order sales saw decreases in both sales and profits from the previous term due to a shrinkage of the markets and intensified competition, even though a new sales company was established to expand the sales of new products.
Through these efforts, this business group achieved a sales volume of 18,651 million yen (a decrease of 2.4% over the previous year) and an operating loss of 779 million yen (an operating loss of 355 million yen was recorded in the previous year) owing to lower sales, higher material prices and a fierce price war.

Predictions of Consolidated Results for the Year Ending
(April 1, 2007 to March 31, 2008)

Regarding future prospects, the severe business environment is expected to continue for various reasons including, the slowdown of the US economy, increases in the prices of oil and raw materials and intense global competition.
In such an environment, our group will continue to concentrate on revising our sales prices to offset increasing material costs, and also strive to reduce costs via improved productivity and enhance profitability through the development and sales growth of high value-added products.
We forecast a consolidated sales volume of 211,000 million yen (an increase of 14.1% over the previous term), a consolidated operating income of 7,400 million yen (an increase of 4.3% over the previous term), a consolidated ordinary income of 6,500 million yen (an increase of 0.0% over the previous term) and a consolidated net income for the term of 3,300 million yen (an increase of 1.3% over the previous term).

(Note) The forecasts above have been made based on the information available at the time of this announcement, and the actual results may differ from these forecasts due to various factors.

End of report