The path we have pursued together with our mission of “ensuring a safe and steady food supply and protecting quality of life”

Ever since Nihon Nohyaku was founded in 1928 as Japan’s first agrochemical manufacturer, we have
developed businesses centered on agrochemicals under our corporate philosophy of “ensuring a safe and steady food supply and protecting quality of life.” I believe this principle has motivated and guided my own actions many times. The history of Nihon Nohyaku is also a story of deep involvement in the agrochemical industry, laying the foundation for the entire industry during its early years. This included the establishment of production and sales systems, commercialization channels, and quality
control frameworks, as well as the dissemination of scientifically-based information. Our pioneering efforts went beyond business activities, promoting recognition of the important social role of agrochemicals.
I believe that agrochemicals are an essential technology for stable and safe food production. As a company, we believe they are fundamentally significant in terms of supporting people’s survival and health, as well as underpinning the sustainable activities of society. We have enhanced the value of agrochemicals through numerous technological innovations. Since shortly after our founding, we have been driven by this sense of mission to focus on the importance of properly evaluating agrochemical performance and safety. We have led the way in establishing evaluation and research systems, such as introducing safe manufacturing facilities and actively incorporating advanced knowledge and technologies from overseas.
Our commitment to trust in scientific knowledge and address social demands, as well as our thorough dedication to safety and security, have remained at the core of our business activities throughout our history. Today, we are channeling this spirit into the creation of our own active ingredients with unique qualities and high safety standards, and present this as our clear, research and development-oriented management policy. It is my responsibility and pride to ensure that this philosophy is faithfully passed on to the next generation.

A sure sense of achievement in an uncertain market

In FY2024, Nihon Nohyaku saw an approximately 3% decrease in revenue amid a 6% decline in the overall global demand for agrochemicals. Despite this underwhelming result, we believe that we put in a relatively solid performance considering the volatility of the overall market.
We also secured an increase in profit. Our efforts to reduce costs proved particularly effective, with operating profit reaching 8.5 billion yen. Revisions to the cost structure and the optimization of the global sales system, among other structural reforms, are steadily yielding results.
By region, the North American market saw remarkable growth. In the United States, net sales finally exceeded USD 100 million, achieving a long-standing goal for us. This was one of the most moving events for me. It represents the fruits of the North American team’s tireless efforts and years of steady trust-building. We also strengthened our presence in the regions formerly covered by the NAFTA, such as Canada and Mexico. In Mexico, specifically, where avocado demand is vigorous, the direct sales system established with the incorporation of a local subsidiary made a positive contribution.
Meanwhile, the regulatory environment remains stringent in the European market. This includes the Farm to Fork strategy, which targets sustainability in the food system, including the reduction of chemicals. In this context, our eco-harmonized products are highly valued in the market, and we are enjoying “survivorship benefits” due to the withdrawal of competitors. This result underscores our technological reliability and also contributes to the expansion of our market share.
Meanwhile, in the Indian market, factors such as the monsoon led to rising instability, forcing us to recognize an impairment of goodwill for Nichino India Pvt. Ltd. We responded swiftly and flexibly by overhauling that company’s management system, dispatching executives from our head office, and rebuilding the local personnel structure, among other measures. This crisis management capability is also one of Nihon Nohyaku’s strengths.
In this way, our recent performance has generally remained stable, but uncertainty is increasing across the industry as a whole. The agrochemicals market is vulnerable to weather conditions and geopolitical risks in any given year, and complex external factors such as the situation in Ukraine, unrest in the Middle East, and constraints on the supply of raw materials may potentially impact our performance.
Our ability to maintain stable performance in the face of this uncertainty is due to the structural reforms we have progressively implemented and our shift toward a profit-focused structure. Specifically, the steady accumulation of careful choices—such as reviewing our portfolio based on product-specific profitability management, reducing costs through the relocation of production sites, and strategically focusing or withdrawing based on market-specific profitability assessments—has formed the foundation for our development. With this in mind, we will continue to move forward through progressive, careful decision-making.

Our future strategy as a drug discovery-focused agrochemical manufacturer

In our medium-term management plan for 2030, we have set three targets for our ideal business model: net sales exceeding 165.0 billion yen, an operating profit margin of 10% or more, and ROE of 10% or more. Additionally, to further enhance our global presence, we aim to be among the top 10 companies by sales in the crop protection field.
The key phrase in achieving these numerical targets will be “Global Innovator for Crop & Life.” This represents our strategic vision for delivering value that extends beyond the manufacture and sale of agrochemicals, the core of our business, to encompass improving efficiency and safety throughout the agricultural sector. It even extends to pharmaceuticals and biotechnology, which are closely connected to people’s daily lives.
For example, we are venturing into the life sciences sector with products such as athlete’s foot medicine and toenail fungus treatments, applying the knowledge we have cultivated in the agricultural field to areas that can contribute more directly to people’s daily lives. Initiatives in these new fields have the potential to become new pillars of revenue in the future. We aim to generate 15.0 billion yen or more in sales in new sectors by 2030.
Continuing investment in research and development is also at the core of our strategy. We plan to invest an amount equivalent to approximately 10% of the sales of Nihon Nohyaku Co., Ltd. (approximately 7% on a consolidated basis) in research and development annually, aiming for a total investment of 20.0 billion yen over three years. Among these efforts, the next generation insecticide cybenzoxasulfyl (CBX), scheduled for launch in 2028, is expected to be a major product developed ahead of the rest of the world. We have previously created global products such as buprofezin and flubendiamide, establishing a solid track record and development capabilities in the insecticide field. I will continue to nurture this mindset of nurturing long-term value, as we look ahead to the next decade.
Research and development are dependent on people. At Nihon Nohyaku, we continuously hire both new graduates and experienced young researchers. We actively recruit foreign researchers as well, striving to build global research systems.
The development of agrochemicals is a high-risk business that requires over a decade and research investments on the scale of several billion yen before a product is even launched. Corporate conviction and the ongoing investment of resources over the medium- to long-term are indispensable to sustainably promote these endeavors.
We have maintained our status as a drug discovery-focused agrochemical manufacturer with the ambitious goal of developing a new compound every three years. Of course, there have been failures along the way. However, it is precisely the knowledge, technical skills, and evaluative capabilities accumulated from these experiences that form the Group’s core competence. I also believe that our corporate DNA of a culture that does not fear failure is what will lead to the next breakthrough. In addition to strengthening our development capabilities, we are also focused on strategically managing the intellectual property that forms the foundation of these capabilities. The number of patent applications we file globally is steadily increasing, and we are utilizing intellectual property rights not only for “defense” but also as “offensive” asset to generate alliances and technological collaborations.
Our Research & Development Division is more than a team of technicians; it embodies both the imagination to discover the future of agriculture faster than anyone else and the practical mindset to reliably deliver these innovations to farmers. Researchers and local personnel stand together in the farm fields, coming into contact with issues firsthand and taking on the challenge to develop new products. This attitude, deeply rooted in our company culture, is the source of our value creation. We are confident that the integration of technology and fieldwork in addressing challenges will not only benefit Nihon Nohyaku but also potentially shape the future of agriculture as a whole.

Rooted locally, changing the world

Already, approximately 70% of our sales come from overseas, and our next goal is to increase this to 80%. As global food issues become more serious, we must take on an ever more important role. I hope that we can contribute to future food security by delivering technologies and products that are genuinely useful in the field of agriculture. The key to achieving this lies in developing our businesses in emerging markets such as India and Brazil.
Brazil, the world’s largest agrochemicals market, is seeing demand in the specialty crop* sector (fruit trees, vegetables, coffee, etc.) comparable to that of the Japanese market (approximately 300.0 billion yen). This is an area where we can make full use of our advanced technological capabilities.
Meanwhile, in India, agriculture is primarily dependent on the monsoon, so there are weather-related risks. However, with the population increasing, the demand for agrochemicals is expected to grow. Recent years have also seen advances in the mechanization of agriculture and the introduction of smart agriculture, making India an important market for accelerating the local use of our products.
We are also focusing on the Middle East and Africa, regions with high potential for future growth. It is predicted that by 2050, most of the world’s population growth will be concentrated in these regions, making the development of agricultural infrastructure an urgent issue. We are already preparing to file local product registrations, and we plan to advance gradually, using the trend toward regulatory easing as a tailwind.
Underpinning our global growth strategy are the global simultaneous development of in-house developed products and a local direct sales system. NICHINO Group currently operates in 17 locations. Rather than relying solely on licensing out, we deploy human capital and establish facilities locally, establishing our own sales channels and brands. This autonomous and sustainable deployment model forms the core of our competitive advantage.
A defining feature of our global strategy is our locally-rooted business model. Sales representatives visit farmers directly, understand the challenges on the ground, and propose the most suitable products. Researchers also work closely with sales personnel to incorporate local needs into product development. By developing products in close connection with local farm operations, we can provide valuable solutions tailored to each region. I am convinced that the insights we gain on the ground, not just abstract strategies, lead to the creation of products that our customers genuinely need.
This system functions through locally-led management. For example, in Mexico, local managers have the authority and responsibility to work on promoting and establishing products. By enabling human capital well-versed in the local culture, business practices, and customer needs to take the lead, we achieve localized globalization, or “glocal management.”
From the perspective of development speed, we are also strengthening our “global simultaneous development system.” Conventionally, we would register products in Japan first, then expand them overseas. Under this new system, however, we now concurrently carry out data collection and applications for registration in major markets such as Japan, Europe, North America, India, and Brazil. This system significantly shortens the lead time to market, reducing lost opportunities and maximizing the speed of revenue generation.
In my view, 2030 is merely a stepping-stone milestone in the development of Nihon Nohyaku. Beyond that lies our evolution into a company that provides fundamental solutions to global agricultural challenges. By 2050, the world population is expected to exceed 9.7 billion, increasing the risk of food shortages. As a comprehensive agricultural technology company, we are determined to contribute more broadly to society through technology, 3,000 data, and services, and we look forward to your support.
* Specialty crops: According to the U.S. Department of Agriculture (USDA), these are crops primarily grown for food or ornamental purposes, such as fruits, vegetables, nuts, flowers, and herbs. In contrast, row crops refer to staple crops suitable for large-scale mechanized cultivation, planted in rows, such as corn, soybeans, wheat, and cotton.

Supporting the sustainability of the pesticide business by enhancing non-financial value

Agriculture is an “artificial endeavor” between nature and humans, and agrochemicals are a technology that supports this endeavor. Balancing the sometimes conflicting challenges of increasing food production and harmonizing with ecosystems, we have pursued the potential of this technology.
Based on this aspect of our business activities, we integrate elements of sustainability—such as the environment, society, and human capital—into our management strategy. In this context, we focus particularly on four areas: the development of eco-harmonized products with low environmental impact; the promotion of natural agrochemicals that contribute to the conservation of biodiversity; workstyle reform, improving engagement, and promoting diversity; and the thorough implementation and reconstruction of health and productivity management and culture for safety.
At Nihon Nohyaku, we view the agrochemicals business not merely as a provider of products but as an essential infrastructure that contributes to the national issue of food security. Given the characteristics of this business, we pursue deeper connections with environmental and ecosystem conservation. In Japan, amid the decline and aging of the agricultural population and the need to consolidate farmland, we focus on supporting the introduction of smart agriculture and biopesticides to achieve efficient and sustainable farming. We place particular importance on developing technologies in the field of smart agriculture. We aim to leverage the power of technology to help overcome structural challenges in Japanese agriculture, such as labor shortages and climate change. To this end, we contribute to advancing agriculture as an agricultural support company by developing new formulations compatible with drone application and proposing systems that suggest application spraying timing based on field data.
Specifically, we are already developing drone-compatible formulations designed to reduce drift risk, as well as offering digital services that enable the unified management of application histories and field information through integration with other systems. We are also building a “smart agriculture co-creation platform” in collaboration with government agencies, JA, and university research institutions, strengthening the systems that support agricultural management from a digital perspective.
The promotion of smart agriculture and the use of ICT exemplify our research and development ethos, which aims to balance eco-harmony and productivity enhancements. Through technologies that optimize the use of fertilizers and agrochemicals, as well as data-driven agricultural support, we strive to leverage sustainability in our management, not merely as a constraint but as a source of differentiation.
We have also incorporated ESG items into the goalsetting process for all employees, to practice the creation of non-financial value across the entire organization. This has begun to cultivate a culture where sustainability is perceived not just as a “management issue” but as a personal concern. Corporate value cannot be measured by financial performance alone. In my view, our earnest efforts to address sustainability—such as engaging in workstyle reform and other non-financial challenges—are crucial elements that enhance engagement and build long-term competitive strength and social trust.
In 2024, an accident occurred during operations at one of our plants. As the top executive, I regard every accident as a personal responsibility. Employee safety and health are the foundation of any company, and should be prioritized above all else. We are working to reconstruct the culture for safety on a company-wide basis. This attitude is symbolized in the Safety Management Declaration we issued this year. We perceive the health and well-being of each employee, as well as workplace safety, as the foundations that support corporate survival.

Trust and autonomy support corporate value

 At Nihon Nohyaku, we continuously work to strengthen corporate governance as a foundation for the sustainable enhancement of corporate value. In FY2025, a majority of members of the Board of Directors (six out of eleven members) are Outside Directors, including human capital from diverse backgrounds such as lawyers, accountants, and experienced corporate executives. Additionally, four of the six Outside Directors are women, which we believe is significant from the perspective of promoting diversity.
By operating the Governance Committee, which is led by Outside Directors, and holding meetings to exchange views exclusively among Outside Directors, we are enhancing the effectiveness of our management oversight system. We are also working on implementing effectiveness evaluations and reviewing the executive performance evaluation system to improve the quality of discussions at meetings of the Board of Directors, as well as developing the decision-making and value creation cycle to be more transparent and agile.
Additionally, we are implementing stronger monitoring by Outside Directors and enhancing the Sustainability Committee’s review structure as mechanisms to enable the integrated management of our progress against both ESG and financial targets. This will improve the visibility of non-financial information at the Board level, enabling management decisions that prioritize sustainability.
Meanwhile, from the perspective of capital efficiency, we recognize that improving the PBR (price-to-book ratio) is an important management issue. As we aim for the sustainable enhancement of corporate value, it is our responsibility as senior managers to link the company’s strengths to profitability. We endeavor to achieve more radical management of the cost of capital by improving ROE. We aim to enhance long-term shareholder value through initiatives such as expanding the ratio of in-house products, reducing costs, and developing highly profitable markets.
As the listed subsidiary of a publicly listed company, we emphasize transparency and independence in our relationship with our parent company. We maintain a distance in terms of business, personnel, and capital, and engage in strategic technological collaborations based on economic rationality and consistency. To prevent conflicts of interest that could potentially harm the interests of our shareholders, we have established an internal control system and are committed to fair and autonomous management. We will continue to promote highly transparent management, balancing sustainability and capital efficiency, while deepening trust with our stakeholders.

Creating the next 100 years together with society

Society views the agrochemicals industry with a mixture of expectation and concern. We acknowledge this reality and strive to pursue rationalization based on ensuring safety through scientific evidence. At the same time, we engage in the transparent dissemination of information, fulfilling our responsibility as a research and development-driven company.
Nihon Nohyaku has experienced many turning points during its 97-year history, and we are constantly aware of our responsibility to carry that baton into the future. Today, we are entering an era of preparation for the next century of our history. We aim to take on challenges without fear of change, continually reassess our purpose in society, and help to build a better future.