Kikkoman Corporation

In the fiscal year ended March 31, 2008, evidence of a global economic slowdown increased, largely as a result of disruption in financial and capital markets and other problems triggered by the subprime loan crisis. In Japan, modest economic growth continued, but showed signs of slowing.
   In the domestic food, beverage and liquor industries, soaring raw material prices and other factors caused a succession of companies to hike product prices. Moreover, greater interest in food safety among consumers has made it even more of an imperative for all involved in the industry to implement measures to ensure safety and reliability. In this climate, the Kikkoman Group benefited domestically from sales growth in soy sauce and soy sauce derivative products, as well as a strong performance in the Coca-Cola business, largely thanks to favorable weather conditions. Sales growth was hampered, however, by lackluster performance from Kibun Food Chemifa’s soy milk drinks.Overseas operations continued with robust sales in soy sauce and the foods-wholesale segment. As a result, consolidated net sales rose 5.4% to ¥413,938 million, operating income increased 10.2% to ¥23,854 million, and net income was up 6.6% to ¥11,447 million.

Looking at our overseas operations, in North America, we will prioritize sustaining growth in the soy sauce business with measures that include promoting high value added products for home use and aggressive development of channels for foodservice and industrial use. In addition, we will focus on health foods to foster new business beyond the area of soy sauce.
   In Europe, we are expanding the soy sauce market, with the goal of maintaining double-digit growth. Alongside cultivating existing key markets, we will also develop new markets, including Central and Eastern Europe, and Russia. In Asia, we aim to grow our soy sauce and Del Monte businesses. At our R&D base in Singapore, we will advance development of new products for Asian markets.
   In the foods-wholesale business, we will continue taking advantage of the increasing interest in Japanese food overseas to achieve strong growth in every operating region.
   In Japan, we will take steps to increase sales of value-added products, such as our Tokusen Marudaizu Shoyu (premium soy sauce) and Tokusen Marudaizu Gen-en Shoyu (premium low-sodium soy sauce) in the home use market. In the foodservice and industrial use sector, in addition to continuing to provide safe, high-quality products, we will also further our efforts to leverage the company’s collective strengths by providing technical support and other services.
   In soy sauce derivative products, we will strive to extend our market share by further expanding sales of tsuyu (soy sauce soup base), led by Hon Tsuyu, and of tare (dipping and marinade sauces). In addition, we will work to expand the market for the Uchi-no-Gohan series (a handy Japanese-style seasoning mix) as we continue to target strong growth. In our Del Monte operations, we will push ahead with expansion efforts centered on Lact-Vege, a new type of vegetable juice that contains a blend of vegetables fermented using lactobacillus of plant origin. To achieve growth in the chilled beverages market, we will reinforce initiatives to leverage synergies with Kibun Food Chemifa. Our sake and wine business will focus on increasing market share in home use mirin (sweet sake for cooking), while developing high value added wine products to exert competitive advantage in the premium wine market. In the biochemical business, we will pursue growth through sales of clinical diagnostic reagents and hygiene inspections, along with other products and services.

In June 2008, the Kikkoman Group commenced full-scale use and active promotion of its new corporate brand logo and slogan. We aim to continue focusing on the consumer’s perspective to fulfill our stakeholders’ expectations, and enhance our corporate value. Meanwhile, on June 18, 2008, we decided to form an equity-based alliance with Riken Vitamin Co., Ltd.
   These objectives emphasize our group-wide resolve to be increasingly aggressive in our efforts to achieve our targets for the current fiscal year.

July 2008