We’ve declared our commitment to undertaking the following priority initiatives to build new partnerships by pursuing mutually beneficial collaboration with suppliers and other businesses working to create value.

1. Mutually beneficial relationships throughout the supply chain and collaboration that transcends conventional scale and business affiliations
   We’re working to improve added value throughout the supply chain by targeting business partners who lie beyond the scope of direct vendors (to transition from “Tier N” to “Tier N+1”). In addition, we’re striving to build mutually beneficial relationships with business partners through collaboration that goes beyond existing business relationships and corporate scale. In doing so, we will provide a range of support by, for example, offering advice to business partners looking to introduce telework or implement business continuity planning (BCP), from the perspective of ensuring business continuity in the event of a natural disaster and realizing workstyle reforms.
2. (Individual items)
   As a trading company specializing in mechanical parts and systems, we will work actively to build production equipment and systems that take into account the needs of local communities and the environment by combining the knowledge, expertise, and leading-edge technologies we’ve gained over our many years of experience with a keen understanding of customers’ needs.
3. Compliance with development criteria
   We follow business practices that are desirable from the perspective of large businesses procuring products and services from subcontractors in accordance with development criteria defined by the Act on the Promotion of Subcontracting Small and Medium-sized Enterprises and those subcontractors. We actively work to address trade and business practices that hinder the building of collaborative relationships with business partners.

(1) Pricing methods

We do not make unreasonable demands on suppliers to lower our costs. Regarding requests made concerning transaction pricing, we hold discussions with subcontractors at least once a year, and make decisions that ensure there are improvements in the subcontractor’s labor conditions and reasonable profit for the subcontractor. At that time, decisions are made only after appropriate action is carried out based on price negotiation guidelines ensuring the proper passing on of labor costs. When raw material and energy costs have risen sharply, we aim to have the entire amount of cost increases passed on. We also ensure subcontractors are clear regarding the setting of transaction prices by entering into written contracts that include such provisions.

(2) Payment conditions (drafts, etc.)

We pay subcontractors in cash whenever possible. When paying by draft, we avoid forcing subcontractors to pay discount fees. We will strive to limit the wait for payments to a maximum of 60 days.

(3) Intellectual property and expertise

We conduct business in accordance with our basic philosophy and our sample contract form, both of which can be found in our guidelines on intellectual property transactions. We do not engage in unfair practices like leveraging our relationship with subcontractors to force them to enter into one-sided confidentiality agreements, disclose expertise, or convey their intellectual property rights to use without compensation.

(4) Shifting of obligations associated with workstyle reforms and other changes

To ensure subcontractors can accommodate workstyle reforms, we do not require them to shorten lead times or make abrupt specifications changes without assuming a fair cost burden ourselves. In the event of natural disasters and other contingencies, we avoid imposing one-sided burdens on subcontractors and give consideration to the need to ensure the continuity of our business relationships when resuming business operations.

May 9, 2023
(Updated on March 6, 2025)
Toshikazu Fuke
Representative Director and President Executive Officer, Nichiden Corporation