Konoike Transport : Group Integrated Report 2022

Konoike Transport Co., Ltd.

Website: https://www.konoike.net/en/

KONOIKE GROUP videos: https://www.konoike.net/company/library/

Osaka Head Office	4-3-9 Fushimimachi, Chuo-ku, Osaka 541-0044, Japan
	Phone: [phone] (General Affairs Department)
Tokyo Head Office	6-10-1 Ginza, Chuo-ku, Tokyo 104-0061, Japan
	Phone: [phone] (General Affairs Department)

Striving to Go Beyond Expectations

Brand Promise

Our

C O V E R D E S I G N C O N C E P T

The banded lines of the design express the idea of "alpha," or "beginning." The design foreshadows the new beginning of the KONOIKE Group as we head toward the next stage, including the formulation of our 2030 Vision.

Our Promise

Going beyond the expectations of people and society, advancing lifestyles and creating new value. At KONOIKE, this has been our job for over 100 years.

We promise to continue to evolve, unwaveringly, over the next 100 years.

At all of our locations, from where we got our start, you can nd a true and unmatched dedication. People are trained, and grow in order to help other people. Our dedication is one of relationships, where we sometimes must be responsible for the lives of other individuals.

We challenge ourselves to achieve what society asks of us. Our dedication is one of innovation, where we sometimes change the lifestyles of our country.

Let us exceed expectations, break through our boundaries, and defy conventional wisdom.

Going beyond what you were yesterday is the rst step towards becoming who you will be tomorrow.

Promise

Our

OUR BRAND

KONOIKE

STORY

The Future and Our Strategies

Our Promise and Our Mission	1
Our Roots	3
The Source of Value Creation	6
Businesses That Have Blossomed	7
in a Variety of Fields, Responding to
the Needs of Society
Unique Business Model That	9
Creates Value for Society
Top Message	11
The KONOIKE Group Vision and	15
Management Strategy
Director and Senior Managing	19

Our Mission

Our Business Strategy

Our Value

We pursue innovation at the foundations of					Brand
our society that creates unique value, driven by
respect for humanity and relationships of trust
		Corporate
Treating people as important, and being loved by the people. We know the precious value of these things.		Philosophy
Customers, consumers, employees, families, shareholders, and investors.			Our
We work to build true bonds by always thinking of these important people to whom we are connected.
and society.			Mission
These bonds enable us to truly push ourselves, surpassing the expectations of both individuals
Let us bring innovation to the foundations of society, and create new value for people's lives.
KONOIKE 2030 VISIONto take in 2030
	Form that the Konoike Group aims
People, leveraging technology		2030 Vision
		Our
to reach for new heights
technologies, we will evolve concepts on how to approach on-site solutions to the	Business Strategy
Through the next-generation Konoike spirit that involves the use of cutting-edge
problems facing our customers and society.
Safety	| We take responsibility for life
		Principle
Passion | We are dedicated to quality			Our
Growth	| We go further than yesterday		Value

Sustainability

Foundation

Supporting

Value Creation

Data

Executive Officer Message
External Director Messages	20
The KONOIKE Group Business	21
Segment Structure
Steel Division		23
Food Division		25
Food Products Division	27
Life Related Division	29
Medical Division		31
International Business Division	33
Airport Division		35
Environmental & Engineering Division	37
Business Development Division	39
The KONOIKE Group and	41
Sustainability
ESG Director Message	42
Sustainability Implementation	43
Structure
TCFD		45
• Environment			Environment	47
• People			People	55
• Technology			Technology	59
			Innovation
			ICT and DX Promotion	61
			Safety and Quality	63
Management Structure	69
Corporate Governance	71
Compliance Initiatives	76
Crisis Management	77
Shareholders/Investors	78
Financial Highlights	79
Analysis of Business Status/	81
Corporate Performance, Etc.
Consolidated Financial Statements	83
Sustainability Data	87
Company Data		88

KONOIKEChapter 01STORY

Our Roots

For more than 140 years since our founding, the KONOIKE Group has built a history of pursuing innovation at the foundations of our society that creates unique value, driven by respect for humanity and relationships of trust. This spirit has been passed down from generation to generation and remains the core of our value creation as the KONOIKE Spirit.

1852

The Birth of Our Founder, Chujiro Konoike, Origin of the KONOIKE Spirit

Our founder, Chujiro Konoike, was born in 1852 in Kitadenpo, Nishinari County, Osaka Prefecture (currently Denpo 4-chome,Konohana-ku, Osaka City). Located near the mouth of the old Nakatsugawa River in the vicinity of the Yodogawa River in Osaka, Denpo was the birthplace of Japan's barrel transport ship business in the 17th century. Many ships, including large Japanese junks, came and went in the area, making it a busy gateway to open water transportation. In 1871, Chujiro took over his father's wholesale shipping business from his father, Toshichi. In parallel with the shipping business, which had begun to face difficulties keeping up with the new wave of modernization, Chujiro began a

KONOIKE STORY

The Future and Our Strategies

Sustainability

Foundation Supporting Value Creation

Data

1880

The Founding of Konoike Transport

Respect for Humanity and Relationships of Trust in Our DNA

In 1880, Chujiro's company began a worker placement business and transport business under the name, Konoike Gumi. This is the year that we recognize as the founding of the modern Konoike Transport Co., Ltd. In Denpo, which is located at the mouth of the Yodogawa River, floods have occurred frequently since ancient times. But Chujiro demonstrated his natural leadership ability, mobilizing great numbers of people for reconstruction work and

cargo handling at various factories in the aftermath. In anticipation of the expansion of factories in the area, he established a lumberyard and engaged in the lumber business. In this and other ways, Chujiro demonstrated his entrepreneurial spirit from a young age. In 1900, Konoike took on cargo handling and transportation work at Japan's first privately owned steel

mill, which had been established in Denpo the previous year with the aim of producing steel domestically. This was the very beginning of the on-site contract operations that we continue to this day.

Group Photo Taken on June 18, 1921

1898

Work on the National Directed Shin-Yodogawa River Excavation Project

so-called worker placement business. He provided workers to civil engineering and construction works, as well as for manufacturing industries.

Map of the Denpo Area During the Meiji Era

Portrait of Mr. Chujiro Konoike (Digital Reproduction)

More Than 140 Years of Respecting

Humanity and Building

Relationships of Trust

The Yodogawa River basin had long been an important political, economic, and cultural center. But the river itself suffered tremendous damage from repeated flooding and inundation. Therefore, foreign ships gradually moved away from the port of Osaka, which became inundated with large amounts of earth and sand after every major flood. However, although work had been attempted sporadically to repair the Yodogawa River, these efforts were never very effective and the river continued to suffer from massive flooding. Therefore, the Meiji government decided to implement an improvement project on the Yodogawa River under the direct control of the government. One of the greatest challenges was where to procure materials and secure a large work force. Chujiro Konoike was the one selected for the task, receiving a contract to construct a 16 kilometer section. He invested a large amount of labor, based on his personal connections and trust built up over many years, spending the five-year

period from 1898 to 1903 to complete construction on the Shin-Yodogawa River. The areas previously plagued by flooding from the old Yodogawa River in central Osaka included the areas of Tenmabashi and Yodogawabashi. It is not exaggeration to say that this project laid the foundation for the prosperity of central Osaka in the modern era following the Meiji era. In 1917, when the Yodogawa River basin was severely flooded due to a series of typhoons, the Osaka prefectural government launched

a reconstruction project. Konoike worked with the Army Corps of Engineers and the Ministry of Home Affairs in completing the work. At the time, Chujiro was already 65 years old, but with an indomitable spirit and unparalleled leadership skills, he inspired his subordinates and surprised everyone by completing the work the following year, with even more vigor than shown by the army. As a result, this KONOIKE Spirit became widely known for working with integrity and honesty, never giving up until the work is done.

Tenmabashi Bridge on the old Yodogawa River washed away in the Great Flood of 1885 (Image courtesy of the Yodogawa River Office, Ministry of Land, Infrastructure, Transport and Tourism)

Yodogawa River Improvement Work (Image courtesy of the Yodogawa River Office, Ministry of Land, Infrastructure, Transport and Tourism)

Shin-Osaka Station

River -Yodogawa Shin

(Ogawa) River Yodogawa Old

Port of Osaka

©2022 Google - Image ©2022 Terra Metrics

Overall View of the Yodogawa River Improvement Work

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KONOIKEChapter 01STORY

1945

Growing Our Business Base With the Progress of Industrial Development

Adding Business Domains in the Confusion of Postwar Japan

KONOIKE STORY

The Future and Our Strategies

Sustainability

Foundation Supporting Value Creation

Data

Businesses That Have

Blossomed in a Variety of Fields,

After the end of the war in 1945, Japan experienced a period of great turmoil. Lives were impoverished and business activities suffered due to shortages of raw materials, coal, and electricity. Amid these circumstances, KONOIKE achieved growth by providing postwar disposal-related services, such as dismantling factories that had been bombed during the war, as well as by building housing for the families of the occupation forces. In 1951, KONOIKE began a new food- related business. In-factory transportation services for sugar refiners and liquor manufacturers rode the economic boom and became a success for the company. As more sales offices opened across the country in the 1960s, KONOIKE embarked on more new business ventures.

In 1963, we began transporting coke between Osaka and Wakayama, which marked the beginning of our marine transportation business. At the same time, we began

warehousing operations, wharves and large-scale warehouse complexes in Osaka City offering the latest functions, including piers for fruit and vegetable handling and grain silos. In this way, KONOIKE made great strides, taking on a wide range of new business challenges during the chaotic postwar period and the period of rapid economic growth.

The

Responding to the Needs of Society

The capacity to open new markets by listening

to the needs of society and customers,

providing solutions in any business domain,

based on the KONOIKE spirit

P.7

The Source

1979

Further Development and the Relentless Pursuit of New Businesses

Overseas Expansion, Responding to New Social Needs

KONOIKE

Spirit

of

Value Creation

In 1979, we acquired the management rights for Japan Airways Co., Ltd. By incorporating the air cargo and passenger divisions under one umbrella, we established an integrated land, sea, and air transportation structure, creating a nationwide network built on ground and air transportation. Our network also expanded overseas. In 1982, the Phoenix was put into service on a regular route sailing between Japan and Taiwan. The ship was responsible for the import and export of small-lot sundries and chemical products. To develop international logistics further, KONOIKE established representative offices and local subsidiaries around the world. We made great strides toward internationalization after

establishing offices in Singapore in 1984, and in Beijing and Los Angeles in 1985. With the transition to the Heisei era (1989 to 2019), KONOIKE entered the medical-related field as part of our efforts to create new businesses. In 1994, we took advantage of our logistics expertise to begin providing sterilization services to hospitals. We later expanded our medical-related business to include the delivery of meals to patients and patient transportation. As Japan became more affluent and the needs of society changed, we responded by expanding globally and developing new businesses, entering a second period of growth.

A spirit of working with integrity and honesty, never giving up until the work is done

Unique Business Models That

Create Value for Society

Unique business models not found among companies

in the general logistics/manufacturing industry,

combined with skills and systems in the transport and

outsourcing businesses

P.9

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KONOIKEChapter 01STORY

KONOIKE STORY

The Future and Our Strategies

Sustainability

Foundation Supporting Value Creation

Data

Businesses That Have Blossomed in a Variety of Fields, Responding to the Needs of Society

Food-Related Business

In 1951, we received an order to provide on-site transportation services for a sugar refining manufacturer. Since that first contract, we have expanded our food-related business domain steadily over the years, including orders for dairy-related services during the summer off-season as we grew our fertilizer-related business in Tokyo, on-site transportation services for beverage manufacturers as we expanded into the greater

Medical-Related Business

As part of our efforts to develop business in new industries, we launched a medical business division, first providing sterilization services in hospitals. Subsequently, we focused on

May 2020 of this year marked the 140th anniversary of the KONOIKE Group, founded in 1880 by Chujiro Konoike as a worker placement and transport business. From our earliest days, we expanded from the transport business into a variety of other industries. As we answered customer requests, we expanded beyond transport, leveraging the expertise we gained along the way to enter new industries. Our Brand Promise, Striving to Go Beyond Expectations, is what has supported the development of the KONOIKE Group. This is the promise that links our past to our future.

Steel-Related Business

In 1900, the first-ever privately owned steel foundry was established in Denpo, Osaka, the same district as the founding of the KONOIKE Group. Here, Chujiro Konoike received an order to load and unload raw materials, provide on-site transport, and perform other work that became the foundation of our steel business. With the subsequent development of the steel industry, we expanded our business to include the installation of machinery, special transportation of heavy items and machine tools, in addition to unloading and transportation, building a broader base of factory construction work. Today, our Steel Division provides a wide range of

services. These services include logistics- related operations both on-site and off- site, off-line operations and production refining processes related to blast furnace and converter steel-making, continuous casting, refining, and other processes. The

Life-Related Business

Our Life-Related Division, which supports general living, began when we received an order from a gas company for on-

site transport and barge transport of coal, coke, ammonium sulfate, and other materials. We provided support through integrated transport operations, and received contracts to conduct warehouse operations in response to customer requests based on our experience. Subsequently, we began our own warehouse operations. Today, we offer services across a wide range of industries, including apparel, general household goods, and more. As we diversified from transport to warehouse operations to

facility maintenance, we have expanded as a multifaceted provider gaining the support of a broad range of customers. In that time, this business has grown to become a KONOIKE Group core business.

Life-

Related

Tokyo area, and more. Today, we have leveraged our expertise in maintaining food freshness and quality to perform contract services for temperature-controlled logistics, the receiving and preparation of raw materials, packaging, and a

wide variety of other operations. At the same time, we have expanded into other areas that include factory equipment inspections, manufacturing line efficiency consulting, and waste processing.

Airport-Related Business

Our first real foray into the airport business was providing a range of services in preparation for the opening of Kansai International Airport in 1994. KONOIKE integrated services included shipping, landing and loading goods, land transportation, heavy cargo transport, machinery installation, maintenance, and more that became the foundation

of our airport-related business. After the opening of the airport, we received orders for the handling of import and export goods, aircraft cleanup services, etc., expanding the scope of our business. In 2010, Japan Airlines transferred three

ground handling companies to the KONOIKE Group. With the new additions, KONOIKE began offering customer service, aircraft operations management, and other services. Today, we serve seven major airports in Japan, including Kansai and Haneda.

Airport-

Related

efficiency issues related to managing goods within hospitals. Leveraging our expertise in transportation, we began providing services for in-hospital logistics systems, which grew steadily over time. In the year 2000, we established Konoike Medical Co., Ltd. Since then, we have continued to expand by taking over the businesses of

other companies and establishing new locations. We are diversifying even further, aiming to create a comprehensive medical SCM service that includes logistics for medical supplies, instruments, and more.

Environmental & Engineering Business

In 2018, the business was split off from Steel Division based on the technical capabilities and trust cultivated in the steel business. This business now provides engineering for customers across a wide range of industries, including major steel manufacturers and parts manufacturers. The business provides integrated solutions encompassing the manufacturing and processing of various plant equipment and facilities in our own plants, followed by installation and maintenance work. In

addition, the business is involved in recycling projects, such as the Perfect Recycling System that recycles industrial waste containing iron, zinc, and carbon generated in steel mills without producing secondary waste.

division also offers engineering services and conducts by-product recycling operations.

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Steel-	Food-
Related	Related

Medical-

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1880 Founding 1900

1939 1951

Corporate Philosophy

We pursue innovation at the foundations of our society that creates unique value, driven by respect for humanity and relationships of trust

1984 1991 1994

Expansion Into Singapore

2013

2018

G r e a t e r G r o w t h

IPO on the First Section of the Tokyo Stock Exchange

KONOIKE became widely known for a spirit that supports the foundations of society based on respect for humanity and building relationships of trust through worker placement and transport businesses. These values have become part of the DNA of the KONOIKE Group.

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