Risk Management
Risk Management Structure
We strive to maintain a systematic risk management structure to respond to risks in various areas, such as business, management, markets, and credit (including risk prevention), and to accurately ascertain, analyze, and address risks such as human risks, natural disasters, and both internal and external risks.
In the sphere of legal and regulatory compliance, we have established The Pack Group Code of Conduct to set forth principles to serve as standards for actions and judgments with which executives and employees of Group companies must comply.
Promoting Supply Chain Risk Management
The Pack recognizes the importance of maintaining the continuity of production lines and supply chains in the face of uncertainty and unpredictability. We recognize external risks that threaten supply chain continuity and their impacts on the value chain and we consider such matters as part of important materiality topics. Touched on below are the related internal systems and efforts to promote supply chain risk management.
Recognition of external risks
① Political risks
- Interruption or rising cost of imports of raw materials due to disputes or national security policies
② Raw material procurement risks
- Rising cost of raw materials, manufacturing, or shipping
- Rising cost of hedging in raw materials procurement
③ Environmental risks
- Supply chain interruptions or suspension of production associated with more frequent natural disasters
- Rising procurement costs due to climate-induced changes in forestry resources
- Rising tax burdens due to the introduction of carbon taxation, etc.
④ Legal risks
- Rising cost of responding to legal, regulatory, and litigation risks
Identification of materiality topics
Strengthening the supply chain to be ready for various risks in procurement, production, and sales
Company initiatives
Strengthening the supply chain
- Information sharing on and effective joint use of suppliers with Group companies in China and the United States
- Enhancing supply capabilities in accordance with demand forecasts (surveying, technical guidance, and periodic quality patrolling of partner firms in Japan and overseas)
Strengthening resilience
- Japan: Leveraging the strengths of our main plants in eastern (Saitama Prefecture) and western (Osaka Prefecture) Japan. Enhancing the strengths of the Osaka Plant through reconstruction.
- Overseas: Building supply chains across multiple countries to avoid geopolitical risks
Responding to cyber risks
- Reducing system downtime by updating the internal backbone system