1.Business operation risks |
All operations |
- Demonstrations, terrorism, war, infectious or communicable disease, and other unforeseen matters
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- Construct globally distributed, alternative systems
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1.Ceramic Products Business |
- Drop in demand for NGK Group products due to decline in demand for internal combustion engine vehicles
- Drop in market share due to rising competition from Chinese market
- Inability to recover prior investment due to downturn in business, delayed timing of regulations, or other factors
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- Compensate for drop in demand by increasing number of new and high-performance products in line with stronger exhaust regulations
- Strengthen competitiveness via technical responsiveness that anticipates environmental regulations, and via supply stability
- Respond appropriately to automaker planning and changing business conditions, and then make revisions to capital investment planning
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2.Process Technology Business |
- Deterioration in performance and financial status due to declining demand for semiconductors
- Delayed responsiveness to customer needs
- Emergence of innovative semiconductor manufacturing process
- Drop in market share due to growth of competition in kilns for lithium-ion battery cathode materials and electronic components
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- Work together with direct customers who manufacture semiconductor manufacturing equipment, and make revisions to equipment capacity and personnel and production systems, etc., where appropriate
- Carefully monitor semiconductor manufacturing process trends and revise production systems where appropriate to ensure quick response to changes in demand
- Carefully monitor customer trends and pursue production system innovation where appropriate to ensure quick response to changes in demand
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3.Electronics Business |
- Sudden drop in base station and data server demand
- Inability to develop new technology or release products compatible with customer technology innovations
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- Carefully monitor customer trends and pursue production system innovation where appropriate to ensure quick response to changes in demand
- Carefully monitor customer trends and pursue timely technological development
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4.Energy Infrastructure Business |
- Change in energy policies overseas
- Capital investment cutbacks by power companies in Japan
- Trends among competitor companies and products
- Delay in timing of market expansion for large-capacity and long-life batteries
- Spread of competitors’ products, such as lithium-ion batteries, that use innovative technologies
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- Carefully monitor energy policy trends in each country and revise production systems where appropriate to ensure quick response to changes in demand
- Strengthen competitiveness via technical responsiveness and supply stability
- Carefully monitor customer trends and revise production systems where appropriate to ensure quick response to changes in demand
- Strengthen partnerships with leading overseas companies
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2.R&D-related risks |
- Inability to achieve adequate results with the input received due to increasingly complicated technological competition
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- A total of 300 billion yen will be set aside for research and development expenses over the next 10 years, 80% of which will be allotted to the carbon neutrality (CN) and digital society (DS)
- Set a target of 100 billion yen in sales from new products and new businesses by 2030
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3.Legal compliance, human rights and safety, and quality-related risks |
1.Legal compliance-related risks |
- Decline in NGK Group’s reputation due to actions in opposition to society’s expectations with regard to legal and regulatory compliance, respect for human rights, contract compliance, etc.
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- Utilize employee training and handbook distribution to ensure employees are familiar with relevant laws and regulations and have a more compliance-focused mindset
- The Business Ethics Committee, which comprises outside directors and compliance officers, investigates serious improprieties or legal/regulatory violations that could have a significant impact on management, and recommends preventive and corrective measures.
- Reducing the possibility of compliance violations through a whistleblowing system
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2.Human rights and safety-related risks |
- Human rights violations in the Group’s business activities
- Employee occupational hazards, illness, or physical and mental health problems
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- Formulation of the NGK Group human rights policy
- Undertake human rights due diligence via HR Committee
- In accordance with NGK Safety and Health Policy, identify serious hazard risks and use risk assessment to facilitate strengthening of preventative measures
- Follow up on employees who work long hours, and conduct job grade-specific mental health education
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3.Quality-related risks |
- Quality-related risks such as loss of trust or profits, or contraction in growth, due to serious market complaint, contractual violation, or other unsatisfactory operations
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- Have Quality Management Department perform monitoring of each Business Group’s quality activities, in line with NGK Quality Policy and under direct supervision of senior management
- Regarding serious issues, convene quality review meetings in order to find a solution quickly
- Company-wide deployment of quality risk elimination process activities
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4.Information systems-related risks |
- Negative impact on societal trust or business continuity due to shutdown of data processing, or to theft, destruction, manipulation, loss, etc., of data, following external cyber-attack or unauthorized system access, or after unexpected system failure or security issue
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- Establishment of an IT security system based on the Basic NGK Group Information Security Policy
- Conduct information security training for employees
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5.Currency exchange, capital, and procurement-related risks |
- Decreased sales and profits and deterioration of business performance due to strong yen
- Risk of negative impact on business operations, performance, and financial situation of NGK Group as a result of financing difficulties stemming from serious regional financial crises and other factors
- Rising production costs due to rise in prices of certain materials and equipment
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- Keep production close to local demand centers, perform financing in local currency, and optimize purchasing according to currency exchange situation
- Hedge risks with forward foreign exchange contracts and other financial instruments
- Reflect risk in sale price
- Reduce costs through competitive purchasing, increased productivity, and other means
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6.Climate change and disaster-related risks |
- Deterioration in business performance due to additional costs incurred by future international GHG regulations, environmental taxes, carbon taxes, etc.
- Operational decline due to global warming-caused sea level rise, increased size and magnitude of typhoons, increased frequency of local torrential rains, etc.
- Deterioration in business performance due to shutdown of production following major disaster, fire, or other serious incident or accident
- Serious damage to facilities at major production bases due to disasters, fires, or other serious incident or accident
- Decline in operations and negative impact on product manufacturing and sales due to emergence and spread of major infectious disease, such as influenza or COVID-19 pandemic
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- Formulation of the NGK Group Environmental Vision
- Begin looking into disclosing information on risks and opportunities based on recommendations from the Task Force on Climate-related Financial Disclosures (TCFD)
- Development and introduction of products and services that contribute to the realization of a carbon-neutral society
- Establishment of a production system that enables alternative production
- Promote business continuity plan (BCP) for entire Group
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