Message from ZEN-NOH Representatives

Closer, more in-depth, more forward-looking

The Next Two Years Will Be Decisive in Putting ZEN-NOH on Track for Fresh Success

We wish to offer our sincerest thanks for the tremendous cooperation and support that the ZEN-NOH Group enjoys in its businesses.

In November 2016, the Agricultural Competitiveness Strengthening Program of Japan’s ruling party was approved and the government’s Plan for Creating Dynamism in Agriculture, Forestry and Fishery Industries and Local Communities was revised in response. Among the objectives of this revision were reform of the pricing mechanism for production materials and reorganization of the structure of the agricultural produce distribution and processing industries. In light of these moves, ZEN-NOH has put together its own set of reforms in the shape of specific measures focused on our production materials business and our sales business, along with an annual business plan. These reforms were approved by member organizations in March 2017, following discussion within those organizations. Now the real work starts. In fiscal 2017, we will remain fully committed to raising farmers’ incomes, expanding agricultural production, and invigorating rural communities.

We will move away from our traditional method of purchasing fertilizer and other production materials, under which we determined the price through negotiations based on cost. Instead, prices will be set using tenders and estimates, among other techniques, based on order quantities determined in advance through collective purchasing. In our rice and grain production and fruit and vegetables / farm products businesses, we will switch to a new business model for sales, utilizing dedicated sales teams to enhance our systems for marketing products directly to consumers.

On the production side, we will aim to cut total production costs significantly by reducing expenditure on materials and equipment through the consolidation of brands and specifications of materials and joint use of agricultural machinery. In addition, as well as reducing labor costs by means of labor-saving cultivation techniques, we will pursue productivity improvements by introducing new varieties and technologies. On the sales front, we plan to expand our purchase of food-grade rice for sale and increase the percentage of direct sales to consumers. Imports of fruit and vegetables increased in 2016, due to poor harvests and high prices caused by disasters, among other factors. This year, we will bolster the whole structure from production through to sales, to match growing demand for fruit and vegetables for commercial use and in the restaurant industry. Adopting a relay approach involving production areas nationwide, we will increase the market share of Japanese produce. In our export business, we will enhance our staffing and sales networks.

We will embark on a steady process of self-improvement by proactively appointing external personnel with a wealth of business experience, as well as shifting to personnel better suited to the changing production environment and food market structures. In addition, we will conduct a review of inefficient departments and structures that duplicate the work of other parts of the organization. Through an all-out, intensive effort, we will put a roadmap in place within the next year or two and get our businesses firmly on the right track. We are all determined to pull together in the same direction, without fear of failure, so that we can build a bright, sustainable future for Japanese agriculture.

We will appreciate your continued cooperation and understanding with regard to the operations of the ZEN-NOH Group in the future.