Basic approach and policy

In order to provide customers with products that can be used with peace of mind, it is essential to build a supply chain that enables stable sourcing of good quality and price-competitive raw materials.

By gaining their long-term trust with suppliers through fair, impartial, and transparent transactions, we will promote procurement activities that take into consideration resources, the environment, and human rights, so that the entire supply chain will be able to grow sustainably.

For the purpose of promoting responsible procurement across the entire supply chain, we have established the “T. Hasegawa Group Procurement Policy” and “T. Hasegawa Group Supplier Guidelines.” We request existing suppliers to submit a consent letter to our Supplier Guidelines, and also require new suppliers to do the same at the start of any business relationship.

T. Hasegawa Group Supplier Guidelines

For more details, please refer to the T. Hasegawa Group Supplier Guidelines (PDF) .

Related policies

Governance and risk management

Raw material procurement is mainly promoted by the Procurement Division. The Risk Management Committee is a Group-wide organization that is chaired by the CEO and consists of directors as members. It manages and verifies procurement-related risks. The Procurement Division collects risk information related to procurement and reports it to the Risk Management Committee.

Note that the Group does business with chemical manufacturers, flavor and fragrance manufacturers in the same industry, food additive manufacturers, food manufacturers, trading companies, contract manufacturers, and packaging material manufacturers.

In FY2024, the total number of suppliers that the Company had business with was around 400, with a total number of 3,000 purchased items. The main breakdowns are flavor and fragrance raw materials (natural and synthetic) and food (including food additives), which have the same percentage. The ratio of imports to domestic procurement is 35 : 65, and our suppliers are located in Japan, China, the United States, the European Union, the United Kingdom, India, Brazil, Argentina, and other countries around the world. A distinctive characteristic of our suppliers is that they engage in high-mix, low-volume production and offer raw materials with relatively high unit prices.

Strategies

Increase in business opportunities

• Overseas local procurement and local production

Measures

• Implementation of global raw material procurement
• Investigation and development of alternative raw materials
• Sustainability survey and support for suppliers

Implementation of supplier assessment

To promote responsible procurement, the Group conducts supplier assessments related to human rights, labor, the environment, fair corporate activities, quality and safety, information security, supply chain, local communities, and corporate governance.

In addition, when initiating new transactions, we request suppliers to sign a consent letter to the T. Hasegawa Group Supplier Guidelines and conduct a supplier assessment using the CSR Procurement Self-Assessment Tool.

FY2024 survey

Survey format

Questionnaire using the CSR Procurement Self-Assessment Tool

Target

Top 174 suppliers in terms of the purchase amount out of approximately 400 suppliers

Response rate

97% (169 companies responded/174 companies surveyed)

Results of response from 169 companies (scoring percentage)

Trends, etc., based on the response

1. Suppliers with a high scoring rate in corporate governance have built a sufficient CSR promotion system and tend to score high points overall.
2. Even if they have not developed a CSR promotion system, the companies generally scored high points in quality and safety, which means they have effectively implemented quality management.
3. Some suppliers that scored relatively high points had low scores in human rights and supply chain. Consequently, human rights and supply chain management can be considered to be future issues, even for companies that have developed a CSR system to some extent.

The response rate increased by 4 points compared to the previous year. While there were no major changes in overall trends, improvements were observed in areas such as environment, information security, and local communities.

Based on the questionnaire results, we understand that there were no suppliers with significant risks in the area of environmental practices, in terms of child labor or forced labor, or that the suppliers in which the freedom of association or the right of collective bargaining might be at risk.

Implementation of supplier monitoring

The Group has been conducting on-site audits of product safety and quality at several of its suppliers on an ongoing basis, and these audits also include checks on the environment, human rights, and occupational safety. Based on the audit results, we have determined that no violations were identified in the areas of environmental or social compliance. If any issues are found, we conduct additional audits to investigate the root cause, request the submission of a corrective action plan, and follow up with the supplier until the issues are fully resolved.

Plan for the future

We will further advance the supplier assessment, extract issues based on survey results, and cooperate with suppliers to solve the issues together, thereby solidifying the relations with suppliers and promoting sustainable procurement.

• We will continue to share the T. Hasegawa Group Supplier Guidelines with more suppliers.
• We will continue to request suppliers in the supply chain to promote sustainability.
• We will continue to request responses from suppliers using the CSR Procurement Self-Assessment Tool from the Global Compact Network Japan.
• We will request overseas subsidiaries to conduct assessments of local suppliers and promote dialogue with domestic and overseas suppliers.

Procurement training

To promote awareness and understanding of the T. Hasegawa Code of Conduct, the T. Hasegawa Group Procurement Policy, and the T. Hasegawa Group Supplier Guidelines, we regularly conduct training sessions for members of the procurement division.

Supplier engagement

To ensure that our suppliers understand and put into practice the T. Hasegawa Group’s approach to responsible sourcing, we actively promote awareness of the T. Hasegawa Group Procurement Policy and the T. Hasegawa Group Supplier Guidelines. Specifically, we request both new and existing suppliers to sign a consent letter to the Supplier Guidelines. Through these efforts, we strive to reduce negative environmental and social impacts within our supply chain.

Procurement of certified raw materials

We purchase raw materials from certified farms through Japan Good Agricultural Practices (JGAP), ASIAGAP, or Rainforest Alliance.

Procurement of perilla oil

We promote the active use of distinctive flavor and fragrance raw materials in Japan as part of our challenge to develop uniquely Japanese flavors. To procure perilla oil, which is an important flavor and fragrance raw material, we collaborate with a producers’ association, as described below, to support stable production in terms of quality and quantity, as well as for business continuation.

Provision of seeds

We provide seeds to producers every year for stable quality and yield of perilla oil. With the cooperation of seed and seedling producers, we confirm the conditions of production sites.

Technical support

To improve productivity, we dispatch researchers and engineers to give advice and support on production improvement and equipment modification.

Quality improvement support

We dispatch researchers to provide training and support for quality inspection procedures that are difficult to learn only from a producers’ association.

Supply of packaging, etc.

We provide containers for filling and packaging materials to a producers’ association.

Business continuity

We promote planned procurement for years ahead that will not significantly increase or decrease the growing area so that producers’ revenue will be stable.

Indicators and targets

The T. Hasegawa has set targets for supplier assessments and is working to improve its supply chain management.
In FY2024, the supplier assessment implementation rate was 82% based on procurement value.
For more details, please refer to the T. Hasegawa Group ESG Data Book (PDF) .