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Air Water Co., Ltd. Regarding capital and business alliance with Shinmei Holdings Co., Ltd.

[Air Water Co., Ltd.] Regarding capital and business alliance with Shinmei Holdings Co., Ltd.

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Press release: March 28, 2024
Regarding capital and business alliance with Shinmei Holdings Co., Ltd. *~ Four-company alliance including Veggie Tech and Delica Foods HD strengthens rice and fruit and vegetable distribution processing platform ~*
As Japan’s agriculture and fruit and vegetable distribution face various challenges, we aim to build a sustainable agricultural model from the perspective of producers and consumers by strengthening our fruit and vegetable distribution and processing platform.
To achieve this, we have established Shinmei Holdings Co., Ltd. (Representative Director and President: Fujio
On March 22, 2024, we entered into a capital and business alliance agreement with Masuo (hereinafter referred to as “Shinmei Holdings”), and on March 29 of the same year, we will acquire 600,000 shares of the company’s shares (4.7% of the total number of outstanding shares). Therefore, I would like to inform you.
On March 28, 2024, a press conference was held regarding the capital and business alliance with Shinmei Holdings Co., Ltd., as well as collaboration with Vegetec Co., Ltd. and Delica Foods Holdings Co., Ltd.
1. Background and purpose of capital and business alliance
Amidst the need to respond to changes in the global food situation and global environmental issues, Japan’s policy is to aim for a stable supply of food and sustainable agriculture, with revisions to the Basic Act on Food, Agriculture and Rural Affairs being deliberated in the current Diet session. is being launched. On the production side, there are structural issues such as a decrease in the number of farmers due to aging and an increase in abandoned farmland, as well as a mismatch between consumer needs and supply. In terms of logistics, it is estimated that due to the 2024 Logistics Problem, there will be a 32.5% shortage in transportation capacity for agricultural products by 2030 (according to research by NX Research Institute).
In order to face these social issues, it is essential to build a large-scale collaborative system with partners involved in everything from production and procurement to processing and sales of fruits and vegetables, and from February 2023, our company will be collaborating with Veggietech Co., Ltd. and Delica Foods Co., Ltd. We have been working on a three-company collaboration with Holdings Co., Ltd. Through this collaboration, we will strengthen our raw material procurement functions and utilize mutual resources in processing, logistics, and sales, leading to expanded transactions among the three companies, as well as contributing to the creation of a stable supply system and the promotion of local agriculture. .
Through this capital and business alliance, Shinmei Holdings, which owns Shinmei Co., Ltd., the largest domestic rice wholesaler, as well as fruit and vegetable wholesalers such as Tokyo City Seika Co., Ltd. and Toka Osaka Co., Ltd., will join the collaboration system. The four companies handle approximately 900,000 tons of fruits and vegetables per year, the largest in the industry (7% of domestic fruit and vegetable shipments), and have a combined sales of 700 billion yen, making them one of the largest alliances in Japan. With the
participation of Shinmei Holdings, we will take on new mainline logistics services that include rice, strengthen the lineup of processed products that utilize rice, and expand the company’s B We will promote collaboration in areas such as expanding sales of products by utilizing toC sales channels.
Furthermore, through a coalition of four companies, we are expanding our agri-support business nationwide, which mechanizes and performs harvesting work in production areas where labor shortages are becoming more serious. We aim to stabilize agricultural management by purchasing all quantities, including those for processing, and strengthen our procurement capabilities by expanding contract cultivation. In addition, we will expand contract farming by specifying items that meet consumer needs, and will lead to
transactions at appropriate prices by eliminating the supply-demand mismatch. On the logistics side, we will refine our freshness preservation technology that utilizes low-temperature technology for industrial gases, and build an efficient logistics system that contributes to traceability, focusing on cargo collection at production areas and trunk logistics from production areas to consumption areas. .

By strengthening this rice and fruit and vegetable distribution processing platform, we will build a sustainable agricultural model that includes decarbonization, and help resolve issues facing Japan’s agriculture and fruit and vegetable distribution.

2. About collaboration with Shinmei Holdings
Our company, Shinmei Holdings, Veggietech, and Delica Foods Holdings are working to achieve sustainable domestic agriculture by leveraging each other’s procurement, processing, sales, and logistics functions in the supply chain from rice and fruit and vegetable production to sales. In addition to contributing to the development of rice and vegetables, we aim to strengthen the distribution and processing platform for rice, fruits and vegetables that connects production areas and dining tables.

-Specific collaboration details-
1. Raw material procurement utilizing four contracted farmers and procurement routes in Japan and overseas
2. Mutual sales of processed agricultural products such as rice, fruits and vegetables, cut vegetables, heated vegetables, and frozen vegetables, as well as development and expansion of business partners mainly in the retail, EC channel, restaurant, and ready-made meal industries.
3. Rice and fruit and vegetable distribution business utilizing the logistics network, bases and facilities of 4 companies
4. Joint development of freshness preservation and food processing technologies, joint operation of processing centers, and establishment of new processing centers
5. Improving the added value and branding of rice, fruits and vegetables using component analysis data

3. About Shinmei Holdings
Shinmei Holdings is centered around Shinmei Co., Ltd., the largest rice wholesaler in Japan, and is engaged in aseptic packaged cooked rice business, rice export business, fruit and vegetable wholesale business, restaurant business, fruit and vegetable wholesale business, mushroom and bean sprout production and sales business, and logistics business. A pure holding company with group companies. The company group aims to “build an agri-food value chain” that connects the production area to the dining table, and is expanding its business areas into upstream, midstream, and downstream areas. In addition, by disseminating Japanese food culture to overseas users, we are working to revitalize Japanese agriculture by promoting overseas expansion centered on rice exports and expanding exports of Japanese
agricultural products.

(1) Overview of Shinmei Holdings Co., Ltd.
Established: 1950
Head office location: 6-1-21 Sakaemachi-dori, Chuo-ku, Kobe, Hyogo Prefecture Representative: Masuo Fujio, Representative Director and President Capital: 100 million yen (as of the end of March 2023)
Business content: Group-wide business planning, business management, and incidental or related operations
Number of employees: 38 (non-consolidated), 10,753 (consolidated) (as of the end of March 2023)
Sales: 406.9 billion yen (consolidated for the fiscal year ending March 2023)

(2) Regarding capital and business alliance with Shinmei Holdings Number of shares owned before acquisition: 0 shares (investment ratio: 0.0%) Number of shares acquired: 600,000 shares
Number of shares held after acquisition: 600,000 shares (investment ratio: 4.7%) Schedule: Contract conclusion date: March 22, 2024, payment date: March 29, 2024 (planned)
*The acquisition price will not be disclosed due to consultation with the stock acquirer.

Four. (Reference) About our agri & foods business
Our Agri & Foods business operates a variety of businesses related to food, including the procurement and processing of fruits and vegetables, ham and delicatessen products, frozen foods, sweets, vegetable and fruit drinks, and retail of fruits and vegetables. In the agribusiness (agricultural products and processing), we will strengthen and expand the value chain that we have cultivated mainly in Hokkaido, from production and procurement to processing and sales of fruits and vegetables, and utilize our freshness preservation technology and logistics network. , aims to strengthen the fruit and vegetable distribution processing platform.

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