In our 2030 Vision, the Group has set out to strengthen global business as a growth axis besides our express package delivery services business. Expolanka is a core company, and even amid the global supply chain disruptions caused by the COVID-19 pandemic, it has grown rapidly by responding to customers' needs and securing space. Over the past year or two, the company has been struggling with a decrease in the volume of goods and a fall in freight tariffs, in addition to controlling costs in line with the volume of goods, but in order to realize the 2030 Vision, it is important to get Expolanka back on a growth trajectory.

The first thing we need to do in order to turn around Expolanka is to build a system that can achieve greater synergy with the Group's core business of express package delivery services than has been possible up until now. Next, we need to reexamine current transactions with a focus on profitability. Finally, it is a matter of deploying business sites and employees that have been strengthened through the COVID-19 pandemic to the right places. We recognize that some initiatives are progressing, such as those aimed at creating synergies and the reallocation of business sites and employees, but these initiatives are still only halfway there. We are paying close attention to the results for the fiscal year ending March 31, 2025 and the Company's future global strategy, with an eye to the next Mid-Term Management Plan and the 2030 Vision.

In addition, President Matsumoto has stated that SG Holdings will provide support for Expolanka, and is promoting organizational reforms such as establishing a new department specializing in global business directly reporting to the President's office and starting the process of taking Expolanka private. In light of my own experience, I feel that it is very important to clarify where responsibility lies in the management of acquired companies and to provide solid backup from the head office side, and I appreciate the support system that has been established from Japan. Through these initiatives, I hope that Expolanka will get back on a growth trajectory.

One of the immediate issues arising from the 2024 problem is that there is expected to be the acceleration of the shortage of manpower, particularly at small and medium-sized partner companies, due to the introduction of restrictions on the maximum overtime hours for truck drivers. Under such conditions, if we do not take the initiative to strengthen coordination with partner companies and build a system that allows us to share resources, and if we do not spread these efforts to overcome the shortage of manpower throughout the industry, there is a risk that logistics itself will become unsustainable. I think that, as a means to this end, it is also acceptable to consider capital investment as an option if necessary. Many measures have been considered for strengthening coordination with partner companies, and we are paying close attention to the progress being made.

Another issue related to the 2024 problem is that the freight tariffs we receive from senders are still at a low level. The currentfreight tariffs are insufficient in order to maintain logistics, and it is necessary to convey more strongly than ever that it is necessary to receive appropriate freight tariffs. Initiatives such as these to ensure that we receive appropriate freight tariffs are also a mission that primary contractor must fulfill responsibly from the perspective of ensuring that partner companies that support logistics can continue their business. Also, although this is a somewhat practical matter, as a way of dealing with the shortage of manpower, one way to secure delivery staff is to use ideas that differ from those of traditional logistics companies, such as having them undertake one-off jobs via an online platform like the major e-commerce companies. This is just an example, but in considering the future of sustainable logistics, we should also have a flexible attitude of actively studying and absorbing the efforts of different industries. The 2024 problem is also bringing about changes in the business environment for logistics, such as the progress in receiving appropriate freight tariffs and securing delivery personnel using new methods, and in that sense, I see the 2024 problem as an opportunity for change.

I think that an important point to consider when thinking about human resource development is whether to view human resources as a “cost” or as an “asset.” In the logistics industry, human resources are more often seen as a cost. In such an environment, we recognize that the Group has been focusing on initiatives to make the most of its human resources from an early stage. For example, when I was still at Nichirei Logistics Group Inc., I learned a lot about initiatives to promote the advancement of women from SG Holdings. However, in order to continue to be a company that takes such progressive initiatives, we should be even more conscious of human resource development, so that we can view our human resources as “assets.” More specifically, I feel training is needed not only to acquire knowledge, but also to maximize each individual's communication skills. By communication skills here, I mainly mean “listening skills.” This is of course important for managers, but it is also a skill that is essential for frontline employees who come into contact with partner employees and partner companies on a daily basis. If each employee is able to listen and engage in discussion in their day-to-day work, this will naturally lead to lively discussion, and this kind of accumulation will lead to the creation of a flat corporate culture, and I believe that human resources will function as an “asset.”

In addition, in order to promote international strategies, I think we should also promote the exchange of personnel with overseas Group companies. At present, the Group's ability to dispatch workers overseas and accept workers in Japan is limited due to language barriers, but if we can actively promote cross-border exchanges, the scope of our business will expand. If such human resources become candidates for future executives and officers, I expect them to become a driving force for sustained growth.

Our share price fell mainly at the time of the announcement of the financial results for the fiscal year ended March 31, 2024 and the TOB for Chilled & Frozen Logistics Holdings (C&F). The thing that had the biggest impact was the TOB for C&F. Even looking at the media, there were questions about whether the TOB price was appropriate and whether synergies could be created, and we believe that this led to uncertainty in capital markets and ultimately had a significant impact on the share price.

As an Outside Director, I sometimes have direct communication with institutional investors in one-on-one meetings, and at meetings of officers (regular meetings attended by all Directors of SG Holdings, including Outside Directors, and full-time Audit & Supervisory Board Members), I also share the opinions received from institutional investors. An issue I feel in listening to these opinions, is that we need to further enhance our dialogue with capital markets. Regarding the C&F TOB, the Investment Committee, which deliberates on investment proposals ahead of meetings of the Board of Directors, comprehensively discussed factors such as the significance of the proposal, synergy effects, investment returns and valuation appropriateness, and then approved proceeding with the TOB, which the Board of Directors resolved. We should continue to explain to everyone the investment effects and progress that we have recognized through this process, both qualitatively and quantitatively. Incidentally, when I first joined the Company as an Outside Director, I remember being very surprised at how investment returns were carefully calculated for each investment project and decisions were made based on that. Of course, it is important to be aware of profitability that exceeds WACC for each business, but I think it will become even more necessary to be aware of the business portfolio goals and the cost of capital for the future. At the same time, I think that management should actively explain these future goals to the capital markets.