April 28, 2011
Nissui to Incur Extraordinary Losses
Please be informed that, due to the Great East Japan Earthquake that struck Japan on March 11, 2011, Nissui expects to record 5 billion yen in extraordinary losses in the consolidated financial statements for the fiscal year ended March 31, 2011 as follows.
1. Outline of disaster damages
(1) Damage to noncurrent assets
The buildings and facilities of the Onagawa Plant and Onagawa Fish Feed and Oil Plant suffered catastrophic damage. Furthermore, damage was incurred to facilities at the Kashima Plant and Nissui Logistics Corporation's Sendai Minato Logistics Center. The cost of the damage to these facilities is estimated at approximately 2.6 billion yen.
(2) Damage to inventories
In addition to the raw and other materials stored at the Onagawa Plant, Onagawa Fish Feed and Oil Plant, and Kashima Plant, the marine products and other processed products stored in the Sendai and Ishinomaki areas sustained damage due to collapses in stocked piles in the earthquake, as well as being swept away in the ensuing tsunami. The cost of the damage to inventories is estimated at approximately 1.4 billion yen.
(3) Other extraordinary losses
Expenses for provision of allowance for doubtful accounts in relation to claims on disaster-struck clients, fixed cost at non-operating plants, condolence and retirement payments to employees,* and expenditures in the form of emergency supplies and others are estimated to be approximately 900 million yen.
*Because the damages to the Onagawa Plant and Onagawa Fish Feed and Oil Plant were particularly devastating and there is currently no way to predict when or if they can be repaired, contracts of the contracted employees whose contract terms ended as of March 31, 2011 were terminated as of the end of March, with the proviso that efforts will be made to find them future employment with Nissui or group companies, and that they shall be provided with special disaster condolence payments and severance packages.
2. Future outlook
(1) Effects on ongoing businesses
It has been decided that we will shift the production of major brands of frozen prepared foods, chikuwa, and canned foods that had been produced at the Onagawa Plant and Hachikan's Kuji Plant, to plants located mainly in western Japan operated by Nissui or its group companies. Part of this transition is already underway, and products produced at the Onagawa Fish Feed and Oil Plant will be produced through existing facilities of Nissui and its group companies.
(2) Effects on the (consolidated/non-consolidated) financial statements for the fiscal year ended March 31, 2011
The revisions to the performance forecast are currently being calculated, taking into account additional factors not mentioned here. They will be released in a timely fashion once they have been arrived at.