Ideal business model for 2030

• We are continuously developing and advancing leading-edge drug discovery technologies. Through a “four-in-one” system that consolidates the three areas of “invention,” “discovery,” and “assurance”—the foundation for creating new agrochemicals—in one place, along with the functions that “facilitate” them, we are advancing drug discovery research aimed at eco-harmonization.
• We leverage AI and data utilization for more efficient drug discovery and expand our global reach.
• These efforts enable us to develop a new active ingredient every three years.
• Leveraging our knowledge and technologies we have developed through agrochemical research and development, we are also creating value in other life science fields and new areas, such as pharmaceuticals, animal health products, and biopesticides.

Challenges to Achieving Our Ideal Business Model and Measures to Address Them

• Addressing the increased difficulty in discovering new chemical structures and the tightening of global registration requirements.
• Leveraging AI to devise diverse molecular design and safety predictions.
• Utilizing external knowledge through open innovation.
• Responding to the resistant pests, pathogens, and weeds that are emerging in various countries.
• Rapidly assessing practicality through quick and accurate data acquisition and the introduction of new assessment systems.

Basic Policy

We uphold the basic policy of “safety first and the further pursuit of legal compliance, along with the discovery, nurturing, and achievement of seeds that contribute to a sustainable society.” To this end, we will work on the following items.

• We plan to invest an amount equivalent to approximately 10% of the sales of Nihon Nohyaku Co., Ltd. (roughly 7% on a consolidated basis) in research and development annually, aiming for a total investment of 20.0 billion yen over three years. We will leverage our “four-in-one system” to create new active ingredients that contribute to a sustainable society.
• Focusing on the field of animal health products, we aim to create synergies through collaboration with ADEKA Corporation.
• There have been cases where chemical substance management was found to violate voluntary standards during internal audits, without necessarily breaching laws or regulations. In light of these cases, we will strengthen employee education to enhance the culture for safety, raise awareness of legal compliance, and respond to regulatory changes.

Well-established R&D System and Outstanding New Product Development Capabilities

We believe that close coordination between three areas—chemistry (synthesis, process chemistry, formulation research), biology (biological evaluation, mode of action studies), and safety (mammalian toxicity, environmental safety research)—is essential for the creation of new agrochemicals. By consolidating these functions in our Research Center and establishing a "four-in-one system” that also integrates research facilitate (intellectual property, research planning, and research administration), we promote and practice daily information exchange among staff members and efficient research activities.

Another feature is our “All-around Screening System.” We evaluate a single compound across all fields, including insecticidal, fungicidal, and herbicidal applications, as well as pharmaceuticals. This ensures that even non-target activities are not overlooked and all our efforts can be directed toward development.

A good example of this is the insecticide Flubendiamide (trade name: PHOENIX). Initially, this research line targeted herbicidal applications, but one researcher noticed a slight muscle contraction effect on lepidopterous pests. Through persistent and diligent exploration, this led to the development of an insecticide that selectively activates the ryanodine receptor in insects.

Likewise, the athlete’s foot medicines Lanoconazole and Luliconazole were originally discovered during fungicide research but were found to be light-sensitive and unsuitable for development as agrochemicals. However, due to their exceptional antifungal properties, they were developed into athlete’s foot medicines suitable for use in dark conditions, earning high acclaim within the industry.

In recent years, we have been leveraging our unique evaluation systems to develop products with new modes of action, such as the rice planthopper control agent Benzpyrimoxan and the broad-spectrum insecticide Cybenzoxasulfyl.

Pillars of Drug Discovery Research: “Strengthening Open Innovation,” “Building a Data-Driven Drug Discovery System,” and “Promoting Global Simultaneous Development and Registration”

Strengthening Open Innovation
As drug discovery becomes increasingly difficult, it has become essential to collaborate with external resources through open innovation. We actively pursue the exploration of new compound scaffolds through collaborative research with other companies and public institutions.

Building a Data-Driven Drug Discovery System
By combining researchers’ ideas with computational science utilizing our unique AI tools, we are efficiently enhancing our products’ effectiveness against target organisms. At the same time, we are advancing drug discovery research aimed at ensuring high safety for humans, animals, and the environment by leveraging experiential knowledge, based on existing safety databases, and AI-based toxicity predictions.

Promoting Global Simultaneous Development and Registration
With the participation of group companies, we operate a system that globally manages and visualizes the progress of various chemical, biological, and safety-related tasks aimed at developing new products. We are advancing the international evaluation of new products from an early stage.

Product Development and Sales Capabilities Based on Our Global Network

Our new rice planthopper control insecticide, Benzpyrimoxan (trade name: ORCHESTRA), was registered and launched almost simultaneously in Japan and India. This has accelerated the development of products that meet the needs of rice-cultivating areas in the monsoon regions of Asia. In addition, we tested a new broad-spectrum insecticide, Cybenzoxasulfyl, in the official field trials conducted by the Japan Plant Protection Association. We have accumulated the effective test results necessary for agrochemical registration application, and we applied for Japan registration in November 2025. Moving forward, we aim to expand its application to other countries, starting with South Korea and India.
The integration of this robust drug discovery foundation with our global network serves as a driving force that stably and continually generates new active ingredients, even as the challenges of drug discovery increase.

Expanding Business Opportunities Through the Development of Active Ingredients

It takes a long time—over a decade—and massive investments to develop active ingredients. This includes safety testing and commercialization studies. However, by obtaining patents and developing products with unique characteristics, companies can pursue their own distinctive business strategies and generate substantial profits.
Through development, we can also accumulate extensive knowledge and know-how in various fields, such as invention, discovery, assurance, and promotion, creating a positive cycle for the development of other active ingredients in the future. Furthermore, the establishment of sales systems in major agricultural countries can enable us to gain new opportunities in the growing global market.

Illustration of Sales and Cumulative Profit from In-house Development

Strengthening the Development of High-safety Eco-harmonized Products

The safety of agrochemical products is guaranteed through strict management under registration systems in each country and region. In response to the worldwide trend towards stricter registration requirements, Nihon Nohyaku has announced a policy of working harder than ever before to develop and sell environmentally conscious products. For products that have already been developed, we define and promote eco-harmonized products that meet multiple criteria related to human and animal safety (toxicity to mammals) and environmental safety (impact on fish and natural enemies, and soil half-life).
In recent years, there has been a trend in Europe, the United States, and Japan to reduce the use of agrochemicals in food and agricultural policies. In response to this, we are also stepping up our product development in the fields of biostimulants and biopesticides. In Japan, we have launched the microbial product Cross Value, which has received widespread acclaim. Moving forward, we plan to further enhance our product portfolio by pursuing the development of microbial pesticides and biostimulants, making this a key pillar of our business in the crop aid products field.