Otafuku Group Social Activities Report 2016-2017

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Otafuku Group Social Activities Report 2016-2017
OTAFUKU GROUP
                                                                                                                       Otafuku Group Social Activities Report

                                                                                                                                    2016-2017

The Joy of Otafuku
“Otafuku,” whose unique face has often been pictured alongside “Hyottoko” dating back to ancient times, is not
an archetypal image of a beautiful woman. However, her thin eyes (showing an ever smiling face), her low nose
(representing humility), her tiny mouth (implying that she does not waste her words), her large ears (signifying her
ability to listen), her robust cheeks (indicating a healthy body and mind), and her wide forehead (portraying her
wisdom), show us that her beauty was internal. The basic flavors (sweet, sour, salty, bitter, and umami) are not
only sensory tastes, but are also things that we experience every day. The bittersweet nature of life is something
that Otafuku knew very well. She is a beloved figure in Japan as our brand mascot and we hope that in time she
will come to be widely loved throughout the rest of the world as well.
Otafuku Group Social Activities Report 2016-2017
TOP MESSAGE

     Otafuku Group Corporate Philosophy                                                                                                                           since1922

                                                                                                                                       In our 95th year, we are
        Our Mission                                                                                                                 incorporating the philosophy
     To contribute to a joyous society with health, wellness and happiness through food.                                         handed down over all these years
        Our Pledges
                                                                                                                                 into our 100th anniversary vision.
     Pledge to Our Customers           : To consolidate our expertise and knowledge in order to impress our
                                         customers and bring a smile to their face.
     Pledge to Our Employees           : To constantly improve our work environment and develop human                                     As we approach the 2020 Tokyo Olympics four years away,
                                         resources so that our employees work with a lively attitude.                                     Japan continues to garner attention from all over the world.
     Pledge to Our Business Associates : To create new value together as a good partner.
     Pledge to the Local Community : To root ourselves in the local community in order to contribute to
                                                                                                                                    2016 was a year when Hiroshima, the location of our group head office,
                                     society through our core business activities.
     Pledge to the Global Environment : To demonstrate our great love for the global environment by carrying                           also received a great deal of attention for various notable events.
                                        out activities to achieve a balance with nature.                                             The G7 Foreign Ministers' Meeting, a visit from US President Obama,
                                                                                                                             and the Hiroshima Carp baseball team won their league for the first time in 25 years...
                                                                                                                    Amidst this excitement in our hometown of Hiroshima, we are looking forward to the 100th anniversary
                                                                                                                       of the Otafuku Group five years from now and have been working on establishing our vision for our
        Our Action Guidelines
                                                                                                                                 100th anniversary based on the inventive and original ideas of our employees.

     1. Challenge ourselves and each other to learn, and be creative and innovative.
                                                                                                                    This vision does merely consist of the scope of our business and sales figures, but also includes more
     2. Take pleasure in changes and act swiftly when they occur.
                                                                                                                          clearly defined qualitative measures such as efforts to provide customer satisfaction and the
     3. Respect one another to create an open and natural corporate environment.
                                                                                                                         establishment of a corporate culture with the goal of making positive contributions to society.
     4. Earnestly comply with laws and corporate ethics.
     5. Take on any problem or challenge with ambition, passion, courage and a sense of responsibility.
                                                                                                                                    With this vision as our central axis, we aspire, united as a single group,
                                                                                                                                           to provide customer satisfaction and contribute to society.

        Monozukuri (Art of Manufacturing) Spirit

     Pursue natural tastes that are safe and secure with our spirit and history imbued in every single drop.                   Otafuku Group Mission for FY2016-17

                                                                                                                   ● Create a strong corporate structure that is
                                                                                                                     able to thrive in these uncertain times.
                                                                                                                   ● Let's improve our customer sensitivity and
        Employees' Motto
                                                                                                                     promptness!
     We look at everything in a positive light, acting in a proactive manner while always looking forward with     More than simply concentrating on dealing with unforeseen
     a bright spirit of gratitude.                                                                                 occurrences, the mission of the Otafuku Group consists of
                                                                                                                   accurately perceiving changes in the business environment and the
                                                                                                                   needs of our customers so as to convert these into products, with
                                                                                                                   the goal of providing useful products and services in a sincere
                                                                                                                                                                                                  Shigeki Sasaki, President
                                                                                                                   manner, and promptly making them available.                                      Otafuku Holdings Co., Ltd.

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Otafuku Group Social Activities Report 2016-2017
Overview and Business Details of Otafuku Group Companies

     < Otafuku Group >
                                                                                                   Otafuku Holdings Co., Ltd.                                                 Otafuku Vinegar Brewery Co., Ltd.
       Sasaki Shoten
         Co., Ltd.
                                        Otafuku Holdings Co., Ltd.                                 Founded      November 1922                                             Vinegar was the starting point of Otafuku                     Established    October 1999
                                                                                                Established     October 1952                                              production. It is essential as the primary ingredient       Representative   Katsunori Sasaki, President
                                                                                               Representative   Shigeki Sasaki, President                                 of our sauces. In Daiwa Town, blessed by natural               Location      1-1 Ogu, Daiwa-cho, Mihara-shi, Hiroshima 729-1323
                         Otafuku                                                                   Location     7-4-27 Shoko Center, Nishi-ku, Hiroshima-shi,             water and clear air that are optimal for fermenting,                         Tel. 0847-34-0124
      Otafuku                           Okonomi
                         Vinegar                    Union Sauce         OPP
                                                                                                                Hiroshima 733-8670                                        we produce various products from jummai (pure                   Capital      10 million yen
       Sauce                             Foods
                         Brewery                     Co., Ltd.         Co., Ltd.
      Co., Ltd.                         Co., Ltd.
                                                                                                                Tel. 082-277-7112                                         rice) vinegar to a variety of vinegars and flavored            Business      Development, manufacture and sales of fermented
                         Co., Ltd.
                                                                                                                                                                                                                                                       products such as vinegar, flavored vinegar, sweet
                                                                                                   Capital      100 million yen                                           vinegars with the spirit and history of our company
                                                                                                                                                                                                                                                       half-sake and fermented seasonings
                                                                                                   Business     Business planning for the Otafuku Group and               imbued in every single drop.
                                       OTAFUKU                                                                                                                                                                                       No. of Employees 14
                       Otafuku Foods
      Otafuku                           SAUCE                                                                   supervisory management of each company
                        (Qing Dao)                                                                                                                                                                                                        Sales        800 million yen
     Foods, Inc.                       MALAYSIA
                         Co., Ltd.                                                           No. of Employees 45
                                       SDN.BHD.

                                                                                                                                                                              Okonomi Foods Co., Ltd.
         Otafuku Sauce Co., Ltd.                                                                                                                                          Specializes in development and sales of flour,                Established    July 1986
                                                                                                                                                                          mainly for okonomiyaki, as well as flour-related            Representative   Eishi Sasaki, President
     This company, which was founded as Sasaki Shoten, a sake                                   Established     October 2009                                              ingredients. By utilizing the know-how and ideas               Location      7-2-7 Shoko Center, Nishi-ku, Hiroshima-shi, Hiroshima
     and soy sauce wholesaler/retailer, in 1922, has entered its 95th                         Representative    Naoyoshi Sasaki, President                                gained from developing together with the history of                          733-0833 Tel. 082-278-5430
     year, and currently focuses on the manufacture and sales of                                   Location     7-4-27 Shoko Center, Nishi-ku, Hiroshima-shi,             okonomiyaki, this company features a rich variety               Capital      10 million yen
     Okonomi Sauce, Yakisoba Sauce and Takoyaki Sauce, as well                                                  Hiroshima 733-8670                                        of products that can be used to create great                   Business      Sales of okonomiyaki ingredients (such as flour,
     as various sauces and dipping sauces for everything from                                                                                                                                                                                          tempura batter scraps, dry fish shavings and aonori
                                                                                                                Tel. 082-277-7111                                         flavors by anyone from professionals to families.
                                                                                                                                                                                                                                                       (green laver))
     business to household uses.                                                                   Capital      100 million yen
                                                                                                                                                                                                                                     No. of Employees 6
     The company is additionally making efforts to spread                                          Business     Development, manufacture and sales of sauces,
                                                                                                                                                                                                                                          Sales        3.3 billion yen
     okonomiyaki culture from Hiroshima to all across Japan and                                                 vinegar, dipping sauces and other seasonings
     the world through projects such as okonomiyaki classes,                                       Offices      23 locations in Japan
     support and training for opening a related business, and                                No. of Employees 434
     management of the WoodEgg Okonomiyaki Building. All of                                         Sales       22.8 billion yen                                              Union Sauce Co., Ltd.
     these efforts share the goal of increasing nutritional value in
     simple ways, and spreading the enjoyment of interpersonal                              ■ Okonomiyaki Training Centers                                                Under our philosophy of "Contributing to people's             Established    December 1949
     communication when gathered around the okonomiyaki grill                               Sendai, Tokyo, Nagoya, Osaka, Okayama, Hiroshima,                             health and future of our food culture with great            Representative   Yasuhira Sasaki, President
     with friends and family, a key attraction of okonomiyaki culture.                      Takamatsu and Fukuoka
                                                                                                                                                                          taste and high quality," this company produces                 Location      3109 Kiwadashima, Nikko-shi, Tochigi 321-2345
                                                                                                                                                                          sauces using only the finest fresh vegetables and                            Tel. 0288-26-4896
                                                                                                                                                                          in-house ground spices. In addition to the Union                Capital      62.5 million yen
                                                                                                                                                                          Sauces with the penguin logo, the company also                 Business      Manufacture and sales of sauces, ketchup, mayonnaise,
                                                                                                                                                                                                                                                       dipping sauces and other liquid seasonings
         Otafuku Foods,                                              Otafuku Foods                                            OTAFUKU SAUCE                               produces business-use Otafuku sauces for
                                                                                                                                                                                                                                     No. of Employees 41
                                                                                                                                                                          eastern Japan.
         Inc.                                                        (Qing Dao) Co., Ltd.                                     MALAYSIA SDN.BHD.                                                                                           Sales        2.2 billion yen

       Established       January 1998                             Established      February 2012                            Established     April 2016
      Representative     Takamitsu Ozawa, President            Representative      Shigeki Sasaki, Chairperson             Representative   Kazutaka Amada, President
        Location         13117 Molette St. Santa Fe                  Location      No. 16, Ronghai Road,                     Location       No.61, Jalan 5/KU6, Kawasan
                                                                                                                                                                              OPP Co., Ltd.
                         Springs, Ca                                               Jihongtan Sub-district Office,                           Perindustrian Sungai Puloh,
                                                                                   Chengyang District, Qingdao                                                            Specializing in packaging, this new company                   Established    June 2016
         Capital         6.1 million USD                                                                                                    42100 Klang, Selangor.
                                                                                   City, Shandong Province, China
        Business         Manufacture of Okonomi                                                                               Capital
                                                                                                                                                                          performs all tasks from planning and design of              Representative   Yoshihiko Suga, President
                                                                     Capital       7 million USD                                            MYR2,000,000
                         Sauce, Yakisoba Sauce,                                                                              Business       Manufacture, sales and
                                                                                                                                                                          interior and exterior packaging, as well as                    Location      5-2-5 Shoko Center, Nishi-ku, Hiroshima-shi, Hiroshima
                         flavored vinegar, dipping                   Business      Manufacture of Okonomi Sauce,
                                                                                                                                            export of halal seasonings    wrapping, packing and shipping of Otafuku Group                              733-8678
                         sauces and other liquid                                   Yakisoba Sauce, flavored
                                                                                   vinegar, dipping sauces and                              such as Okonomi Sauce,        products. This company also promotes fixed-term                 Capital      10 million yen
                         seasonings and sales in North,                                                                                     Yakisoba Sauce and Takoyaki
                         Central and South America                                 other liquid seasonings and                                                            employment of retirees, employment for the                     Business      All packaging processes (such as wrapping, packing
                                                                                   sales in China and neighboring                           Sauce                                                                                                      and shipping) for seasonings, processed foods and
     No. of Employees 15                                                                                                                                                  handicapped, and community involvement.
                                                                                   countries                              No. of Employees 2                                                                                                           similar products
                                                              No. of Employees 27                                                                                                                                                    No. of Employees 5
                                                                                                                                                                                                                                  Note: The numbers of employees are as of Oct. 2016 and the sales figures are as of Sept. 2016

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Otafuku Group Social Activities Report 2016-2017
Message from the President                                                                                                                                                       Contributing to a joyous society with health,
                                                                                                                                                                                         wellness and happiness through food.

                                                                                                                                                                                  Mental and               Physical and              "Harmony" as the
                                                                                                                                                                                 physical health         mental abundance           source of happiness

                                                                                                                                                                                Health                Wellness Happiness
                                                                   Healthy
                                                                      ~ Health, wellness and                                 happiness for the world ~
                                                                   Our mission is to contribute to a joyous society with     everyone eats separate meals and solitary eating.At             together for a meal as well as being a meal rich in
                                                                   health, wellness and happiness through food.              Otafuku, we attempt to perceive unavoidable social              vegetables that provides excellent nutritional
                                                                   Although this philosophy has not changed since our        changes in order to properly respond to emerging                balance.We built a factory in Malaysia last fiscal year,
                                                                   company was founded, as our modern society moves          food needs such as smaller portions and simplicity              allowing us to produce halal-compliant Okonomi
                                                                   towards a decreasing birthrate and aging population,      for single-person meals while also constantly propo-            Sauce so that Muslims can also enjoy eating okono-
                                                                   increasing "health expectancy," the period during         sing products related to the mental and physical                miyaki. Although Japanese food is widely recognized
                                                                   which people can actively engage in activities, is        health of our customers. What our company would                 throughout the world as being healthy, this is espe-
                                                                   becoming an ever-increasingly important topic. Food       like to communicate, more than anything else, is the            cially true with okonomiyaki as it largely consists of
                                                                   is simply the cornerstone of health. As a food manu-      enjoyment and pleasure found in sitting around a                vegetables. Moreover, as it is increasingly recognized
                                                                   facturer, we consider our social mission to be the        table with others to share a meal. Although it is               as an excellent menu item that can be made accor-
                                                                   expansion of our business by placing maximum              certainly necessary to respond to current food needs,           ding to a regional food culture, it has an excellent
                                                                   importance on finding ways to be even more useful in      we will continue to carry out activities that link health       potential for becoming even more popular. In addition
                                                                   regards to the health of our customers.                   and happiness through food with a prosperous future             to perceiving the inbound demand within Japan to
                                                                                                                             as based on our corporate philosophy.                           increase the global recognition of okonomiyaki as a
                                                                   The current environment in relation to food is one of a                                                                   health food, we are also making promotional efforts
                                                                   decreasing number of households and an increasing         Otafuku has spread the good word about okono-                   from the perspective of health using our founding
                                                                   number of persons living alone, resulting in a corres-    miyaki throughout Japan and the world, as it is a food          product of vinegar as we continue to expand our
     Naoyoshi Sasaki                                               ponding rise in the amount of families where              that truly communicates the pleasure of gathering               efforts to provide our customers with healthy meals.
     President, Otafuku Sauce Co., Ltd.

                                  Unavoidable social changes such as the shrinking
                               population, decreasing number of household members,
                                    and increasing number of persons living alone

                     Responses to family                               Enjoyment
                   members eating separate                        and pleasure of eating
                   meals and solitary eating                             together
                       Individual Convenience/Health            Gathered around the table for a meal
                                                                           Fun To Cook
                 Responses to individual needs such as               Continue our mission by           Okonomiyaki
                                                                                                                                        Our mission is to contribute to the health of people all across the globe both within Japan and abroad.
                    convenience and health aspects                    continuing to spread              Yakisoba
                                                                            the word                    Takoyaki                          With "Healthy" as our key word, we have strengthened product and menu development in order to
                                                                                                                                                      provide a healthy diet to all our customers from a variety of perspectives.
                        Responses to changes                  Activities based on our philosophy                                             We are working to provide "health, wellness and happiness" across the globe through food.

05                                                                                                                                                                                                                                                        06
Otafuku Group Social Activities Report 2016-2017
Otafuku Group Production Bases
                                                                                                                                                     Otafuku Sauce Co., Ltd.       Head Office Factory
     "Otafuku" to the world
     - Health, wellness and happiness for the world -
     The Otafuku Group has six production bases within Japan and abroad that safely and securely
     manufacture delicious seasonings.
     In accordance with our philosophy of providing health, wellness and happiness across the world, we are
     creating products and rich menus that match the characteristics of each region, as well as expanding
     Japanese food culture through okonomiyaki which is, firstly, healthy and embodies the idea of harmony
     being enhanced when everyone is gathered around the table for a meal.                                                                          Location    : 7-4-27 Shoko Center, Nishi-ku, Hiroshima-shi, Hiroshima
                                                                                                                                                    Factory Space : 10,212 ㎡
      Otafuku Foods (Qing Dao) Co., Ltd.         Quing Dao Factory

                                                                                               China
                                                                                                                                                      Union Sauce Co., Ltd.        Nikko Factory                      Otafuku Foods, Inc.         Los Angeles Factory

       Location      : No. 16, Ronghai Road, Jihongtan Sub-district Office,
                       Chengyang District, Qingdao City, Shandong Province, China
       Factory Space : 20,000 ㎡                                                                                                           Tochigi
                                                                                          Qing Dao

                                                                                                                 Hiroshima                          Location    : 3109 Kiwadashima, Nikko-shi, Tochigi                  Location     : 13117 Molette St. Santa Fe Springs, Ca
                                                                                                                                                    Factory Space : 23,100 ㎡                                            Factory Space : 4,000 ㎡

                  Otafuku Sauce Malaysia Sdn. Bhd.                                  Otafuku Vinegar Brewery Co., Ltd.   Daiwa Factory
                       Malaysia Factory

                                                                                                                                                                                                                            U.S.A.

                                                                                    Location    : 1-1 Ogu, Daiwa-cho, Mihara-shi, Hiroshima
                                                                                    Factory Space : 6,160 ㎡
       Location      : No.61, Jalan 5/KU6, Kawasan Perindustrian
                       Sungai Puloh, 42100 Klang, Selangor.
       Factory Space : 780 ㎡                                                                                                                                                              Los Angeles

                                        Malaysia

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Otafuku Group Social Activities Report 2016-2017
Activities Report

          Pledge to Our Customers
                                                                                                                           Topics    Otafuku R&D Center Starts Operation
          Pursuing Manufacturing Basics and Originality                                                                     This center opened in Sept. 2015 as a means to concentrate all the research and
                                                                                                                            development functions and capabilities of the Otafuku Group with the goal of creating
                                                                                                                            new value. The center has adopted a free-seating system where no employee has a fixed
                                                                                                                            desk, so that personnel from research, product development, marketing, purchasing and
                                                                                                                            Okonomi Foods are all gathered and mixed together. Surpassing the normal borders of
                                                                                                                            corporate organization in this manner spurs the lively exchange of ideas and encourages
          Starting out with a spirit of creating products imbued with our sincerity in every drop, we create unique         personnel to challenge themselves to constantly create new value. The nickname
                                                                                                                            "WillEgg" embodies the idea of creating new value through one's own will or intent.
          products in order to please and impress our customers by consolidating our expertise and knowledge.

     Vinegar: The Starting Point for Our Production                                                                    Developing Order-Made Seasonings

     Seiichi Sasaki, who founded "Sasaki Shoten," a sake                                                               We are developing and producing commercially
     and soy sauce wholesaler/retailer, in 1922, started to                                                            available products for household use as well as
     produce vinegar in 1938 with the idea of further                                                                  products for businesses to be used by restaurants such                                                           Number of
     expanding the appeal of delicious and healthy products.                                                           as okonomiyaki shops and by other food product                                                                  Product Items
     We have inherited his spirit of manufacturing products
     under the mottoes of "Never use anything harmful to the
                                                                                                                       manufacturers. We work every day on developing
                                                                                                                       special-order seasonings to match a wide variety of                                                               2,157
     body" and "Each drop is imbued with our spirit and                                                                menus, which allows us to accumulate a great deal of                                                                  items
     history," and continue to apply that spirit in the vinegars                                                       know how and ideas, and further develop our
                                                                                                                                                                                                                                     Regardless of household
     and other seasonings we still produce to this day.                                                                development capabilities.                                                                                         or business use
                                                                   1922: Founding of Sasaki Shoten   Otafuku Vinegar                                                                                                                    (As of Sept. 2016)

     Sauce Production from After the War
                                                                                                                       Expanding Originality Through
     In postwar Hiroshima, which had suffered the dropping
                                                                                                                       Application Research
     of the A-bomb, Seiichi Sasaki thought, "The age of
     western food is coming," and started to make sauces.                                                              Our objectives at the WillEgg R&D Center are to improve
     Sasaki heard complaints from owners of okonomiyaki                                                                the quality and functionality of our products as well as                 OTAFUKU Voice
     stores, which had just started to increase in those days,                                                         create unique new value through continuous research of
                                                                                                                       ingredients and recipes, as well as research seeking
     that "the thin sauce flows right onto the grill," and in
                                                                                                                       ways to commercially apply our discoveries. We have
                                                                                                                                                                                                       Joint Research with
     response, he repeatedly tried to create a sauce to
     match the okonomiyaki until finally succeeding with one                                                           signed a comprehensive collaboration agreement with                             Hiroshima University
     in 1952.                                                                                                          Hiroshima University enabling us to perform joint
                                                                                                                                                                                                       We have started joint research with Hiroshima
                                                                                                                       research with the university focused on our own unique
                                                                                                                                                                                                       University focused on our own research topics in
                                                                                                                       topics.                                                                         order to research and develop new technology that
                                                                   Photo by Hiroshi Akeda              Okonomiyaki
                                                                                                       Sauce                                                                                           can be used to create never-before-seen products.
                                                                                                                                                                                                       It is as if attending university every week where we
     Responding to the Needs and Desires of Our Customers                                                                                                                                              can perform analysis and experiments using
                                                                                                                                                                                                       equipment and devices not available at our
     As we created Okonomi Sauce according to the desires                                                                                                                                              company while also being provided advice based on
     and needs of okonomiyaki restaurant owners, we listen                                                                                                                                             expert knowledge as we constantly challenge
     carefully to the valuable opinions expressed during our                                                                                                                                           ourselves to develop new
     daily business activities and consultations with our                                                                                                                                              technology. We will continue to
     customers, carefully monitor changes in society and                                                                                                                                               perform such research with the
                                                                                                                                                Studying how to grow even more                         goal of providing useful new
     market environments, and swiftly perceive our                                                                                              delicious cabbages
                                                                                                                                                                                                       technologies to the world and
     customers' desires as we constantly strive to produce                                                             Signing of comprehensive                                                        applying these to our products.
     and improve our products in order to please our                                                                   collaboration agreement
     customers.                                                                                                        with Hiroshima University                                                       Momoko Hasegawa
                                                                                                                                                                                                       Laboratory

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Otafuku Group Social Activities Report 2016-2017
Pledge to Our Customers
                                                                                                                                                  Topics   Pursuing Ease-of-Use
          Pursuing Great Flavor and Ease-of-Use                                                                                                            ~ Container and Packaging Innovations ~
                                                                                                                                                  In response to customer opinion and changes in the
                                                                                                                                                  social environment, we are pursuing not only great
                                                                                                                                                  flavor but also ease-of-use for containers and
          In imagining the smiling face of our customers, we seek not only to provide delicious flavor created                                    packaging, constantly improving and developing our
          from safe and secure ingredients, but we also seek to provide containers and packaging that are easy                                    technology to correspond to the need for individual                                                              Smart Bottle
                                                                                                                                                  packages and similar packaging.                       Zippered Pouch                                             (Smart-Fuku Bottle)
          to use and understand, as well as recommend recipes and complete menus.

     Only the Choicest Ingredients                                       Inspection of Production Sites                                       Delicious Taste Enjoyed by Everyone from Children to Adults
                                                                                                                                              ~ Response to Food Allergies ~
     Putting an abundant amount of vegetables, fruits and                We visit fields and other growing locations around the
     spices in our sauces creates a natural taste that                   world for our ingredients, taking the opportunity to talk
                                                                                                                                              We develop products whose delicious flavor can be
     translates to rich flavor and true deliciousness. We seek           directly with owners and producers. We carefully check
                                                                                                                                              enjoyed by everyone. Our "From One Year Series" for
     out the highest quality ingredients from around the globe.          the surrounding environment, production processes and
                                                                                                                                              children when they finish baby food and "Mild Flavor
                                                                                                            sanitation conditions
                                                                                                                                              Okonomi Sauce," which is aimed at satisfying palates
                                                                                                            while also talking with
                                                                                                                                              from children to adults, do not contain any of the main
                                                                                                            owners and producers
                                                                                                                                              seven allergic ingredients (eggs, milk, wheat, soba,
                                                                                                            to create a relationship
                                                                                                                                              peanuts, shrimp and crab), and they are subject to
                                                                                                            of trust and improve
                                                                                                                                              specialized inspection to ensure that they can be safely
                                                                                                            quality.
                                                                                                                                              consumed.

                                                                         Australian Tomato Field
                                                                                                                                                                                                                    Okonomi Sauce
                                                                                                                                                                                                                      Mild Flavor
                                                                                                                                                                                                                                                       From One Year Series
     Only the Finest Production Methods
                                                                                                                                                                                                                                    Do not contain any of the seven
                                                                                                                                                                                                                                       main allergic ingredients
     We are continually seeking innovative production methods
     in order to attain the maximum flavor and quality from our
     ingredients. For example, our Head Office Factory has
     four millstones to slowly grind our pepper in-house and
     achieve the maximum deliciousness. At our Daiwa Factory                                                                                  Providing Delicious Recipes and New Ways to Eat
     (Otafuku Vinegar Brewery), we use both a traditional
     standing fermentation as well as deep fermentation using                                                                                 We not only provide products in order to spread the joy experienced when enjoying a delicious meal, but also provide
     the most recent technology, amid a rich natural              Millstone grinding pepper              Making vinegar by standing           delicious recipes and new ways of eating, as well as demonstrations in classrooms and shops, information diffusion via the
     environment, in order to produce delicious vinegars.         (Head Office Factory)                  fermentation (Daiwa Factory)         Internet, and similar methods to expand the ways to enjoy food.

                                                                   Dates: Blessed Fruit
                                                                                                                                                                                                                The trick is to
                                                                         Dates, one of the crucial ingredients of Okonomi Sauce, are a                                                                          thoroughly fry the
                                                                         fruit with great vitality as they are cultivated in the deserts of                                                                     noodle for five minutes
                                                                         the Near and Middle East. It is described in the Koran as a                                                                            first.
                                                                         food given to us by God and is an essential food for Muslims
                                                                         when fasting during Ramadan. It has been loved as a
                                                                         nutritional food of the caravans that have roamed the desert
                                                                         since ancient times, and is known as
                                                                         the "Blessed Fruit" due to containing
                                                                         plentiful amounts not only of sugar but                                                                                                                          See our website for the recipe.
                                                                         also various minerals such as iron and                               We recommend square takoyaki that is easy
                                                                         calcium, as well as dietary fiber and                                to make using a rolled-egg making pan
                                                                         various vitamins.                                                    instead of a takoyaki plate.
     Making paste from dates       Processing vegetables
     (WillEgg)                     (Nikko Factory, Union Sauce)

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Otafuku Group Social Activities Report 2016-2017
Pledge to Our Customers
                                                                                                                                                                    Topics     Acquisition of FSSC 22000 ~ Creation of a Safe and Secure System ~
         Safety and Security with Ensured Quality                                                                                                                    The Head Office Factory (Otafuku Sauce) and Daiwa Factory (Otafuku Vinegar Brewery) acquired FSSC
                                                                                                                                                                     22000 certification, an international standard of food safety management systems, in April 2014 and have
                                                                                                                                                                     also renewed the certification.

          Inheriting the attitude of our founder who said, "We will not sell a single drop of anything that                                                          Date Registered : April 2014
                                                                                                                                                                     Registration Scope: Head Office Factory, Otafuku Sauce (Production of liquid seasonings and edible vinegar)
          adversely affects our customers," we are pursuing natural tastes that are safe and secure with our
                                                                                                                                                                                         Daiwa Factory, Otafuku Vinegar Brewery (Production of liquid seasonings and edible vinegar)
          spirit and history imbued in every single drop.

     Food Product Safety Policy                                                                                                                                 Factory Inspection

     This food safety policy establishes our basic stance in order to produce safe products and realize the Otafuku Group                                       Quality is confirmed by the Quality Assurance Division
     philosophy of "Pursuing natural tastes that are safe and secure with our spirit and history imbued in every single drop"                                   that performs periodic inspections of all group factories
     which embodies the heart and soul of our production efforts.                                                                                               according to thorough strict standards. Business to
                                                                                                                                                                business customers also provide strict inspections in
         Food Product Safety Policy of the Otafuku Group                                                                                                        order to maintain and improve our already high quality.

         I. Provide safe products in a secure manner to meet the constant need of our customers for only the best products.
         II. Pursue high levels of hygiene and quality control to aid our efforts to produce products where each drop is valuable                                Acquisition of ISO 9001
              to us.
         III. Maintain good communication within and outside of the company to aid our efforts to acquire new knowledge and                                     Union Sauce acquired an ISO-series quality certification
              technology corresponding to changes in the world.                                                                                                 in Aug. 2015.
         IV. Strictly obey laws of Japan and foreign countries, and social norms, and strive to appropriately provide information in
              order to earn the trust of our customers.

     Strict and Thorough Quality Control

     Our seasonings are made using various ingredients gathered from around the world. Hygiene management is thoroughly
     performed at all of our factories, and inspections to check quality are performed during the manufacturing process to                                                                                                                   OTAFUKU Voice
                                                                                                                                                                   Action Guidelines of Head Office Factory
     ensure that we provide our customers with safe and secure products.
                                                                                                                                                                    1. We will obey all corresponding rules to create a
                                                                                                                                                                       trustworthy factory.
                                                                                                                                                                                                                                                     Improvements from the
               For Okonomi Sauce
               Hygiene management is thoroughly performed from procurement of ingredients until shipping out from the
                                                                                                                                                                    2. We will constantly maintain a desire for                                      Voice of the Customer
                                                                                                                                                                       improvement and willingness to take on any
               factory by utilizing various innovative techniques to ensure quality at each process.                                                                                                                                                 We are always striving to listen to comments and
                                                                                                                                                                       challenge.
                                                                                                                                                                                                                                                     suggestions from the customer perspective by
                                                   Heat                                                Product Inspection,                                          3. We are food manufacturing professionals who
            Ingredients        Mixing           Sterilization                To Product Tank          Filling and Packaging                    Shipping                                                                                              transmitting and sharing the questions and ideas
                                                                                                                                                                       work to make our families proud every day.
                                                                                                                                                                                                                                                     received daily from our customers throughout the
                                  Heat Sterilization at 100˚C                                                        Prevent Contamination by                                                                                                        company in the form of the "voice of our
            Procurement of        or more                                       Sampling Inspection                  Foreign Material
            Safe Ingredients      Sauces pass through a heat sterilization      ・Physico-chemical inspection         Filters and magnets are used to remove                                                                                          customers." We ascertain issues from this voice of
                                                                                                                     foreign material at the processes before
                                  line with a total length of 200 m where       ・Microorganism inspection                                                                                                                                            the customer, the information is shared with related
                                                                                                                     filling, and products are checked by
                                  they are sterilized at 100℃ or more.          ・Sensory inspection                  use of a metal detector after filling.                                                                                          departments such as factories and marketing, and
                                                                                                                                                                                                                                                     have periodic meetings related to finding solutions
                                                                                                                                                                                                                                                     and improvements. We are dedicated to handling
                                                                                                                                                                                                                                                     the issues raised in an attentive and considerate
                                                                                                                                                                                                                                                     manner in order to create
                                                                                                                                                                                                                                                     fans who want to use our
                                                                                                                                                                                                                                                     products.

                                                                                                                                                                                                                                                     Kyoko Ito
                                                                                                                                                                After hearing from our customers, we share it with the whole                         Customer Consultation Office,
                                                                                                                                                                company and take actions immediately                                                 Quality Assurance Div.

13                                                                                                                                                                                                                                                                                                          14
Otafuku Group Social Activities Report 2016-2017
Pledge to the Local Community

          Activities to Popularize Okonomiyaki within                                                                               Japan and Abroad
          Based in Hiroshima, we strive to disseminate the food culture including Okonomiyaki in accordance
          with the characteristics of the area of our locations throughout the whole country, deepening area
          communication at each site.

                                                                                                                         16,690                                                                   Visits 87                                                               Visits 25
                                                                                                                         visitors                                                                  schools            Caravan Car: "Danran-go"                            locations
                                                                        WoodEgg Okonomiyaki Museum                       per year   Elementary School Dietary Classes                             per year            Harmonious Circle Mobile                             per year

                                                                        This building was opened in 2008 as a facility for          We visit elementary schools in Hiroshima Prefecture to                            The "Danran-go" is a small truck packed with a griddle
                                                                        spreading okonomiyaki history and culture. In addition to   give okonomiyaki classes. Through this practical                                  and other cookware that visits kindergartens and child
                                                                        the Okonomiyaki Training Center, the building includes a    hands-on experience, children not only learn about                                welfare facilities all across Japan to give the children the
                                                                        hands-on facilities where okonomiyaki classes are held      nutritional value and how to cook, but they also learn                            opportunity to sample okonomiyaki.
                                                                                                                                    about the enjoyment and importance of food.
                                                                        using the installed griddles and hot plates, as well as a
                                                                        museum that describes the history and culture of
                                                                        okonomiyaki and sauces. Since its opening in 2008, the
                                                                        building has received some 140,000 visitors.

                                                                        Okonomiyaki Museum Tour       Using the griddle at a
      * Numbers of participants/visitors are as of Sept. 2016.                                        hands-on okonomiyaki
                                                                                                      experience

                                                                                                                                                                                                       440
                                                          13,728                                                         17,146     Support and Training for                                     participants
                                                         participants                                                    visitors                                                                 per year
     Okonomiyaki Cooking Classes                          per year      Factory Tour                                     per year   Opening an Okonomiyaki Shop                                  (As of Sept. 2016)   Okonomiyaki Trade Shows

     We are providing okonomiyaki cooking classes, mainly               Our Head Office Factory features tour courses that are      With the aim of increasing "beloved local okonomiyaki shop owners                 As a means to express our constant gratitude to the owners of
     at the WoodEgg and our Tokyo Division Building, so that            mostly focused on the sauce filling and packaging line,     and staff all across Japan," we provide support for persons thinking of           okonomiyaki shops and other restaurants, we provide new
                                                                                                                                    opening their own okonomiyaki shop. Support consists of everything                menus and recipes, verification of delicious taste, and similar
     families can enjoy making and eating okonomiyaki at                and explain the various processes and innovations           from an explanatory meeting for persons in the consideration stage to             services and suggestions with the desire to help stores prosper
     home.                                                              related to our manufacturing activities.                    special intensive training courses for persons who are ready to open a            by using our products.
                                                                                                                                    shop, with advice provided for all stages according to individual
                                                                                                                                    circumstances. In addition to practical technical instruction using
                                                                                                                                    actual griddles, we also provide consultations regarding facilities and
                                                                                                                                    impart business management know-how.

                                                                                                                                        Locations
                                                                                                                                    ●   Sendai   ●   Tokyo   ●   Osaka   ●   Hiroshima   ●   Fukuoka

                                                                        Observing the sauce production process                                                                                                        Held in Tokyo, Osaka and Hiroshima

15                                                                                                                                                                                                                                                                                      16
Otafuku Group Social Activities Report 2016-2017
Pledge to the Local Community
                                                                                                                                                        Topics    Muslims can also enjoy okonomiyaki.
          Okonomiyaki for the World                                                                                                                      Although Islam prohibits pork and alcohol, in order to encourage

          ~ Market Creation: Domestic, Inbound and Overseas ~                                                                                            Muslims to try okonomiyaki, the Malaysia Factory of our joint
                                                                                                                                                         venture Otafuku Sauce Malaysia, established in April, is
                                                                                                                                                         manufacturing halal-compliant sauces that do not use any
          Okonomiyaki is great not only because it provides excellent nutritional balance no matter what you add
                                                                                                                                                         ingredients derived from meat or alcohol, and is aiming to receive
          to the main base of flour and vegetables, but also because it provides a meal that can be made                                                                                                                                                       Production of halal sauce
                                                                                                                                                         halal certification in 2017.                                                                          at Malaysia Factory
          anywhere in the world with ingredients matching the particular region and local tastes. We would like to
          spread it all across the globe along with the joy of gathering together for a meal.

     Number of Okonomiyaki Shops in Japan and Abroad                                          Japan                                                 State of Okonomiyaki in the US                                            Spreading Okonomiyaki Culture in China
                                                                                             Approx. 16,000 shops
     There are persons who receive okonomiyaki training in Japan
                                                                                            From the number of stores under "Okonomiyaki,           In 2015, Otafuku Foods, based in Los Angeles, posted                      At our Qingdao Factory, we are developing and
     and then go to another country to open a shop. Additionally, we                        Takoyaki and Yakisoba Stores" of the 2014 Economic
                                                                                            Census for Business Frame of the Statistics Bureau of
                                                                                                                                                    employees in New York City to help popularize                             producing various seasonings to match the local needs.
     are trying to increase the number of delicious okonomiyaki
                                                                                            the Ministry of Internal Affairs and Communications     okonomiyaki through food sampling sales at                                In addition to okonomiyaki training at the Qingdao
     restaurants across the globe through activities such as
                                                                                                                                                    supermarkets and providing guidance at restaurants.                       Okonomiyaki Training Center, we are working on
     okonomiyaki training in China using Otafuku products. The                                Foreign Countries                                     Other efforts for new products consisted of frozen                        popularizing the food by means such as communicating
     popularity of okonomiyaki is spreading to foreign countries with
     some 300 shops in countries outside of Japan.
                                                                                             Approx. 300 shops                                      okonomiyaki and "Okonomiyaki Bites" (square bite-size                     okonomiyaki techniques to chefs so that they introduce
                                                                                            Number of specialty restaurants with okonomiyaki as     okonomiyaki), which have been received quite favorably.                   the dish into the menus at their restaurants.
                                                                                            their main menu item as estimated by our company

     Okonomiyaki and Inbound Tourists ~ Appealing to Foreign Tourists Visiting Japan ~
     We implemented various innovative activities so that persons from throughout the world can enjoy the delicious taste of
     okonomiyaki during 2016, a year which saw some 20 million foreign tourists visit Japan.                                                                                              Bite-Size Okonomiyaki
                                                                                                                                                                                          "Okonomiyaki Bites"
                                                                                                                                                                                          (above)                                                                              Training Center at
                                                                                                                                                                                                                                                                               Qingdao Factory

                                                                                                                                                    Okonomiyaki Academy                                                       OTAFUKU Voice
                                           Approx.
                                           1,500                                                                                                    We carry out various activities with a global perspective in                 Increasing Popularity of
                                           persons
                                           per year
                                                                                                                                                    collaboration with industry, government and academia in                      Okonomiyaki in New York
                                                                                                                                                    order to popularize okonomiyaki across the globe as it is a                  Last year I was assigned abroad for the first time to work in
     Foreigner attendance of okonomiyaki                  Okonomiyaki classes for foreign          Okonomiyaki exhibits on foreign cruise           symbol of the revival of Hiroshima and peace. This year, we                  New York. Japanese food is already quite well established in
     classes is increasing.                               exchange students in Osaka               ships when docked                                focused on strengthening our services and attractiveness to                  the city with numerous shops specializing in ramen,
                                                                                                                                                                                                                                 tonkatsu (pork cutlet) and similar popular Japanese dishes,
                                                                                                                                                    member okonomiyaki shops and inbound tourists, as well
                                                                                                                                                                                                                                 as well as there being a real boom in high-class gourmet
                                                                                                                                                    as expanding the recognition of the "Peace-Yaki," which                      Japanese food. We are focusing on strengthening product
          Tools for Foreign Tourists in Japan                                                                                                       communicates the desire for peace using okonomiyaki                          ideas and methods for further penetration by okonomiyaki
                                                                                                                                                    during August (anniversary of the A-bomb in Hiroshima).                      and takoyaki into the menus of specialty shops and izakayas
                                                                                                                                                                                       "Peace-Yaki" with a                       (Japanese gastropubs). I was really pleased when our sales
                                                                                                                                                                                       message of peace                          were ranked as number one at a demonstration event at a
                                                                                                                                                                                                                                 local supermarket, and hearing
                                                                                                                                                                                                                                 people say "It's delicious"
                                                                                                                                                                                                                                 encourages me to work even
                                                                                                                                                                                                                                 harder to further popularize
                                                                                                                                                                                                                                 okonomiyaki in the area so that
                                                                                                                                                                                                                                 people will kindly think,
        Sales of Red Fire Sauce                                                                                                                                                                                                  "Okonomiyaki in New York means
        This spicy red sauce was developed            Posters and stickers to welcome           Communication tools to help                            Practical Training in                                                     Omoto."
        as a topping for Okonomi Sauce for            visitors to okonomiyaki shops             ordering in English and Chinese                        Hiroshima Okonomiyaki
        foreigners.                                                                                                                                    in El Salvador, Central
                                                                                                                                                                                                                                 Yohei Omoto
                                                                                                                                                       America                                                                   Otafuku Foods, Inc.
                                                                                                                                                                                                                                 Sales & Marketing

17                                                                                                                                                                                                                                                                                                  18
Pledge to Our Employees
                                                                                                                                                             Topics     Okonomiyaki Chef
          Creating a Lively Work Environment /
                                                                                                                                                                                                                                                          Expert in okonomiyaki who is representative of
                                                                                                                                                                                                                               Meister
                                                                                                                                                                        (In-house Qualification)                             (Advanced)      1 person     our company in terms of skills, experience and
                                                                                                                                                                                                                                                          character

          Human Resources Development                                                                                                                                 As a further means to popularize okonomiyaki,
                                                                                                                                                                      we have created an in-house certification in
                                                                                                                                                                                                                             Coordinator
                                                                                                                                                                                                                           (Intermediate) 136 persons
                                                                                                                                                                                                                                                          Completely knowledgeable in all aspects of
                                                                                                                                                                                                                                                          okonomiyaki with the skills to provide training
                                                                                                                                                                                                                                                          and instruction
                                                                                                                                                                      order for employees to first acquire knowledge
           It is most important that employees can be happy in their surroundings in order to achieve our                                                             and skills related to okonomiyaki. Written and                                      Possesses fundamental knowledge of
                                                                                                                                                                                                                             Instructor                   okonomiyaki, with practical knowledge of how to
           mission of contributing to the health and joy of society.                                                                                                  skill tests for beginner, intermediate and             (Beginner)
                                                                                                                                                                                                                                           351 persons
                                                                                                                                                                                                                                                          make okonomiyaki, and related theory and skills.
           Starting with a cheerful forward-looking corporate culture, we have created an environment in                                                              advanced are given once a year.
                                                                                                                                                                                                                                                                                     As of October 2016
           which all employees can work in a lively manner while fulfilling their potential.

     Employee Gatherings                                                        Employee Cafeteria "Maru-ki Cafeteria"                                  New Employee Training

     The "Policies Announcement Convention" at the beginning of a               This cafeteria was opened at our Head Office in 2014 as a means         Training for new employees starts with a training camp
     term and the "Employees' General Assembly" on Labor                        to improve employee awareness of health management and to               right before entering the company followed by basic
     Thanksgiving Day allow all employees to meet and socialize with            stimulate communication between our employees. The menu offers          training to be a working adult, and training to acquire
     each other in the same place. There are additional opportunities for       a full selection of items such as dishes using our own seasonings       the knowledge and philosophy that are considered as
     employees to meet together and improve communication such as               and health-conscious set meals, while items such as caloric intake      fundamentals for being an employee of the Otafuku
                                        welcome parties for new                                                       and nutritional information are
                                                                                                                                                        Group.
                                        employees and the BBQ                                                         displayed when paying so that
                                        Picnic where families can also                                                employees can use this
                                        mingle together.                                                              personal data to manage their
                                                                                                                      own health.
                                         Families can also join the
                                                                                                                                                                                                                                 Cabbage Training
                                         Miyajima BBQ Picnic.
                                                                                Employees even painted the                                                                                                                       Cultivation training is performed at the Otafuku cabbage farm. New
                                                                                murals.                                                                                                                                          employees are able to gain hands-on experience in planting and
                                                                                                                                                                                                                                 harvesting cabbage, an essential okonomiyaki ingredient, in order to
     Creating an Environment for a Variety of Employment Scenarios                                                                                                                                                               deeply study the characteristics of cabbage.
     ~ Work-Life Balance ~                                                     Lively Debate Meeting ("Waigaya Dojo")

     We are implementing measures to provide our employees with a               Cross-departmental meetings using the "Work-Out" method have
     balance between work and family. The implementation of                     been held since 2016 to provide the opportunity for employees to
     programs such as time off for childcare and care-giving, shortened         have a lively, even noisy, meeting where they can freely exchange
     working hours, reemployment system, system for transitioning to            ideas to achieve prompt decision-making, and to propose
     part-time positions with indefinite employment periods, and                measures and solutions for existing issues. The limitations of
     full-time employee promotion system provide flexibility to handle a                                                organizational structures,
     variety of work and employment scenarios and create an                                                             including friendship, are
     environment in which all employees can fulfill their potential.                                                    exceeded so that ideas
                                                                                                                        can fly back and forth          Okonomiyaki Training                                                     Handmade Sauce Practice
      "Fukkuru Nursery School" Office Daycare Center
                                                                                                                        freely, enabling the            New employees practice making okonomiyaki numerous times                 New employees grate fruits and vegetables, measure out the
                                                                                                                        effective sharing of issues     using a real griddle or hot plate in order to acquire the basic skills   spices, and boil them all together in a pot to learn the basic
     The nursery school opened in Oct.
                                                                                                                                                        of okonomiyaki cooking.                                                  points of sauce-making.
     2009. School lunches and snacks                                                                                    and progress towards their
     are handmade using our own                                                                                         resolution.
     seasonings and natural broths.                                                                                                                     Promotee Training on Uninhabited Island
            Fukkuru Nursery School: 12
     children enrolled (as of Sept. 2016)                                                                                                               Among the training divided by years of experience and
                                                                                                                                                        positions is a very distinctive training experience that is
                                                                                                                                                        held on an uninhabited island. Participants immerse
                     Certified as a "Eruboshi" company that is working to                                                                               themselves in nature and reflect in an environment
         Topics                                                                                                                                         different from their everyday one. The training enables
                     promote the participation of women in the workplace.
                                                                                                                                                        participants to refine and improve their sensitivities and
                     In recognition of being considered an excellent company for its efforts to
                                                                                                                                                        resilience by cooperating, and exercising imagination
                     promote the participation of women in the workplace, Otafuku Sauce Co., Ltd.
                     was certified as a Class 2 "Eruboshi" company by the Minister of Health, Labour                                                    and creativity in this unique environment.
                     and Welfare, as based on the Act on Promotion of Women's Participation and            Aug. 2016: Second company
                     Advancement in the Workplace.                                                         certified in Hiroshima Prefecture

19                                                                                                                                                                                                                                                                                                           20
Pledge to the Global Environment                                                                                                                 Company History
           Our Measures to Protect the Environment
            Based on the wise words of our founder, "We must consider the affects on our children and                                                      Company History
            grandchildren before acting," we solemnly pledge to cherish the global environment and act in
            harmony with nature so that future generations will be able to enjoy an abundant and beautiful natural                                         1922     Company founder, Seiichi Sasaki, opens "Sasaki Shouten" as a sake and soy sauce wholesaler/retailer in the town of Yokogawa (Hiroshima City).
            environment, as well as the deliciousness that nature provides.                                                                                1938     Vinegar brewing production starts under the brand name of "Otafuku-su."
                                                                                                                                                           1945     The city of Hiroshima is entirely destroyed by the atomic bomb.
                                                                                                                                                           1950     Sauce production and sales start.
                                                                                                                                                           1952     Sales of the new Okonomiyaki Sauce start.
                                                                                                                                                           1975     Use of dates starts.
       Efficient Use of Resources and Energy Conservation                           Energy-Saving Actions at All Factories                                          Name changed to Otafuku Sauce Co., Ltd.
                                                                                                                                                           1978     Head Office Factory moves to the Commerce and Industry Center (Nishi Ward, Hiroshima City).
                                                                                                                                                           1982     Sales of 500g "bag bottle" of Okonomi Sauce as a top runner in the market                                                                       "Sasaki Shoten"
                                                                                  At the Daiwa Factory of the Otafuku Vinegar Brewery,                                                                                                                                                                              at the time of its founding
                                                                                  systematic operation of equipment such as acetators,                     1987     Okonomiyaki Training Center opens in Tokyo.

                                                                                  and the optimization of coolant pumps, ice storage                       1990     Daiwa Factory is completed and starts operation dedicated exclusively to vinegar production.
                                                                                                                                                           1998     Okonomiyaki Foods introduces the new "Okonomiyaki Gourmet Set" product.
                                                                                  equipment and refrigerators has resulted in a substantial
                                                                                                                                                                    Formation of Okonomiyaki Department.
                                                                                  decrease in electricity use and a 30% reduction in CO2
                                                                                                                                                           2000     Establishment of the Okayama Okonomiyaki Research Center
                                                                                  emissions over a three-year period.
                                                                                                                                                           2005     Business and capital tie-up with Union Sauce Co., Ltd.
                                                                                                                                                           2008     WoodEgg Okonomiyaki Building opens.
                                                                                                                                                                                                                                                                      Okonomiyaki Sauce
                                                                                                                                                           2009     Conversion to a holding company.
                                                                                                                                                                    "Otafuku Fukkuru Nursery School" office daycare center opens.
                                                                                                                                                           2013     Qingdao Factory (China) is completed and starts operation.
     Eco Station                            Methane Fermentation                                                                                                                                                                                                                                                         Early design of the
     Garbage is divided into very           The power of microbes is used to                                                                                        Los Angeles Factory (USA) is completed and starts operation.                                                                                         Okonomi Sauce
                                                                                                                                                                                                                                                                                                                         squeeze bottle
     specific categories so that it can     subject waste seasoning to                                                                                     2014     Okonomiyaki Academy is established.
     be used as recycled resources.         methane fermentation in order to
                                                                                                                                                           2015     Otafuku R&D Center WillEgg opens.
                                            convert the waste into boiler fuel.
                                                                                                                                                           2016     Otafuku Sauce Malaysia Sdn. Bhd. is established.
                                                                                                                                                                    OPP Co., Ltd. is established.
                                                                                                                                                                                                                                                                                      Research and development in the 1960s

                                                                                                                                                            Otafuku Group Sales and Number of Full-Time Employees by Fiscal Year
                                                                                                                    Nikko Factory, Union Sauce
                                                                                                                    Methane Fermentation                      Number of Full-Time Employees
                                                                                                                    Equipment                                                                                                                               Sales (sales account closing month: Sept.) Units: Billion yen
                                                                                                                                                              (As of October 2016; All nine companies)
                                                                                                                                                                                                                                                                              Units for no. of employees: Number of persons
                                                                                                                                                              * The numbers of employees are only for Otafuku Sauce Co.,
                                                                                                                                                                Ltd. for the years up to 2009, and those for 2010 and after
                                                                                                                                                                are the total for the entire Otafuku Group.
     Coolant Reuse                          Preventing Heat Radiation Loss        Daiwa Factory, Otafuku                                                                                                                                                                                             23.6
                                                                                                                                                                                                                                                                                                22.9
     Water used as equipment coolant        Insulating jackets have been          Vinegar Brewery                                                             589 employees (393 males, 196 females)                                                                        22.2 21.8 22.2 22.4 591 589
                                                                                                                                                                                                                                                                                       *
     and similar applications is filtered   installed to the joints of steam      High-Efficiency Chiller for Ice                                                                                                                                            20.5 20.7
                                                                                                                                                                                                                                                                       21.1           562 572
     and subjected to ultraviolet           pipes. This prevents heat from        Storage                                                                     Avg. age: 36.1 years                                                                      19.8                     540
                                                                                                                                                                                                                                                   19.0                     532
     sterilization before being reused as   being radiated and subsequent                                                                                                                                                                     18.4                     522
     cleaning water and for similar         heat loss.                                                                                                                                                                17.5 17.5 17.7
     purposes.                                                                                                                                                                                        16.2 16.6                                                         470     473
                                                                                                                                                                                             15.0                                                              451
                                                                                                                                                                             13.7 14.0
                                                                                                                                                                      12.8                                                     415                     417
                                                                                                                                                                                                                      408              402     400
                                                                                                                                                             11.5                                             397
          Topics       Cardboard Usage Reduced by 127 Tons Annually                                                                                                                                   378

                       ~ Redesign of 500-gm Okonomi Sauce Case ~                                                                                                                              326
                                                                                                                                                                                      318
           Our measures to reduce the environmental impact of packaging materials and                                                                                        304
           containers, and to improve productivity, together with the updating of our                                                                                 285
                                                                                                                                                             271
           box-packing machinery, have resulted in the elimination of the inner partitions of the
           cardboard cases for our main 500-gm Okonomi Sauce, enabling a 127-ton reduction
                                                                                                                                 New design
           in the amount of cardboard we use annually. This has also resulted in reduced labor                                   eliminates the inner        1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
           time spent opening boxes for store displays as well a decrease in garbage.                                            partitions as well as
                                                                                                                                 the tear-off top panel.
                                                                                                                                                                             * The sales figures are only for Otafuku Sauce Co., Ltd. for the years up to 2009, and those for 2010 and after are the total for five companies of the Otafuku Group.

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