The basis of global business development - Expansion of the business in Asia with RHQ-Asia as the base of operations

The instant noodle industry was born 54 years ago when Nissin hatched a new invention, Chicken Ramen. In 2011, the industry saw 98.2 billion servings consumed worldwide and is on course to reach 100 billion within two years. In contrast, total demand in Japan is no more than 5.5 billion servings. To us, that fact clearly marks the start of a new era in which NISSIN FOODS Group will significantly expand its growth by raising its focus from Japan to include the spreading global market.

We are pursuing globe-wide business growth with core brands, including pillow-type noodle brands Top Ramen (in the U.S., Europe, Indonesia and India), Nissin Lamen (Brazil) and Demae Iccho (Hong Kong), and cup-type noodle brands Cup Noodles (the U.S., Mexico, Brazil, China, India, Thailand, Indonesia, the Philippines and Germany), CHOW MEIN (the U.S.) and Nissin Yakisoba U.F.O. (Hong Kong and China).

Our geographic strategy is to place the greatest emphasis on developing countries in Asia, where economies are booming and the instant noodle market is expanding.

Accordingly, on April 1, 2012 we established the Regional Headquarters of Asia (RHQ-Asia) in Singapore. It will control the business in Singapore, India,Thailand, Indonesia, the Philippines and Vietnam, as well as other developing countries in Asia, except China. RHQ-Asia will devise and execute strategies for Asia with support from the corporate divisions in Japan. As a regional headquarters in Asia, it will speed up decision-making and make the best use of local ideas and sensibilities in strategy formulation.

Yen appreciation on top of soaring energy and materials costs has dulled the competitiveness of the processed food industry in Japan. In addition, the Japanese market is mature and growing slowly. In such circumstances, management often becomes conservative, and companies tend to make decisions slowly out of excessive concern for risk. At the same time, in the developing countries of Asia, markets are expanding and people are striving to fulfill ambitious dreams. The NISSIN FOODS Group must acknowledge the power of these developing countries and the energy of their people.

Eventually, every corporate function, not only marketing, but also production, materials procurement, personnel, finance and general affairs will be sequentially transferred to Singapore. We also plan to establish a research institute and move some technology development to the region, itself. Our intention is to completely shift the business structure to a global management basis.

Driving our competitiveness, first and foremost, is technological strength, and to create excellent instant food products, we must accumulate new innovations. However, they alone are insufficient. Also important are marketing power to capture innovation as new products, sales power and the nurturing of employees who possess the global awareness to succeed on the world stage.

I want our employees to demonstrate the kind of keen sensitivity to what is happening in the market that led to the U.S. introduction of Top Ramen, our first overseas product, 40 years ago. For example, although the noodles and ingredients used in Cup Noodles in Asian countries are nearly the same as those in Japan, we have adapted the soup to recipes to the preferences of local people. Our objective is to provide the flavor of home cooking in each country, and that kind of sensibility can only be learned in the markets. I want our employees to have the keen sensitivity to accurately identify local food needs and to speedily link that understanding to product strategies.

One thing never changes for us. As a company whose business is food products, we place the highest importance on product safety. This is because we have cherished the legacy of our founder: the profound awareness that we are involved in a business essential for human life and the philosophical principle "Food-related jobs are a sacred profession." Accordingly, we will further upgrade our quality control systems and establish our own global quality assurance system.

Abnormal weather, including a widespread drought and localized torrential rains, has caused prices of corn, soybeans and other staples to rise. Wheat, the main ingredient of instant noodle products, is likely to be no exception.
Accordingly, the world must secure its food supplies as efficiently as possible.For instance, each kilogram of beef represents eleven kilograms of wheat or corn consumed as feed. By contrast, when wheat is processed into instant noodles, nearly 80% of the volume can be used. That's why instant noodles can not only help to support the food supply for the world's seven billion people, but also remain a tasty, inexpensive, convenient and safe food product. I hope you will give our products a try. Nothing would make me happier.

NISSIN FOODS HOLDINGS CO., LTD. will continue to aim for further growth to reward the expectations and trust of our stakeholders. I ask your continued steadfast support and encouragement in the years to come.