Maruha Nichiro Gyoei Kai: President Ito Speaks
April 19, 2010
The following is the statements made by Maruha Nichiro Suisan President Shigeru Ito at the general meeting of the Maruha Nichiro Gyoei Kai:
Organization: To alter the organization a great deal for this year, the Head Office Marketing Department consolidated ten divisions to seven and launched the Division of Marine Processed Foods. Operations geared towards processed foods will be strengthened in order to further optimize the company's strong procurement ability and to directly respond to consumer needs. The Marketing Department for the domestic market will act on a block basis. The sectioned Marketing Department consists of four area blocks, Hokkaido, Kanto/Tohoku, Kansai/Chubu, and Kyushu/Chugoku.
Consolidated Group Financial Results for FY09: We are in the midst of counting the numbers. The final figures are believed to be better than last year because there are no losses on appraisal of shares to report like a year ago. In the segment of marine operations, the Fisheries & Aquaculture Unit and the North America Operation Unit experienced drastically slumping performances. The Marine Products Tradings Unit was forced to face a great uphill struggle because of the slacking sales of high-end products, mostly tuna and crab, as well as plunges in overall prices, including surimi, falling far short of the business projections. Food Operations benefited from the consumer tendency to eat in, significant drops in raw material prices, and the second year merger effect.
Financial Trend: In terms of the financial environment surrounding the fishery and food industries, it is crucial to keep your mind focused on the keys concepts, the perpetuating tendency of 'low prices' and 'market downsizing' for this year, as well. This resulted from an inability to exit a hostile environment with no end in sight, such as 'deflationary economy' and 'slumping consumption.' What is behind the current deflation is a collapsing balance of supply and demand and one of the factors is the dramatic sliding of salaries.
When a salary, the ultimate source of individual spending, declines to this extent, a level of fair price and consumption amounts tremendously fall. It is imperative to understand that a consumer freeze, the 'downsizing of market,' is progressively taking place beyond our imagination.
'Fish Prices' and 'Fair Price': The future course of seafood will be drastically headed for the BRICs, represented by China, which have responsibility for large populations, economic growth, and resulting changes in food cultures, and Europe and the US, where strong health consciousness is seen.
On the other hand, in Japan, an old traditional way of eating has collapsed; there is a prevailing view among stakeholders that the only measure that can be taken is to offer appealing prices. If this situation continues on, fish may vanish from the Japanese market entirely in the future.
We must face a dearth of food stemmed from global level competition over seafood that we can picture. Moreover, we need be proud of our role as a supplier of the true value of fish, that is, a highly valuable product that contributes to better health. We must doggedly encourage consumers to understand 'fair price' that certainly enables continuous supply of fish to the Japanese market. The 'fair price' that convinces consumers, helps producers survive, and lets us win at the auctions of international markets.
"Movement to Promote Fish Diet On National Level"
What is important when having consumers comprehend the 'value of fish' is 'dietary education.' The reason behind our ability to proudly maintain a country with the highest life-expectancy rate in the world lies in age-old Japanese food culture. And its core is rice and fish. Increasing health care costs on the elderly is becoming one crucial issue and a concern over the growing burden on social security spending is heightened. Preventative methods are more effective than measures that become useful after illnesses emerge. The government needs to take action from this point of view to improve dietary habits, that is, the recovery of our traditional food culture.
Subject of Reorganization of Wholesale Market: The final points summarized by the 'Study Group of Wholesale Market' are right on the target. Particularly, I personally value what was talked about in the mid-term action agenda: one is the industry level reorganization to eradicate the saturation of wholesale markets by wholesalers; and the other is the promotion of coalition and cooperation among wholesalers and middle traders to reform the starting point of distribution.
For Maruha Nichiro Suisan, the very presence of Gyoei Kai provides extra power our counterparts don't have and the significance of its existence has become bigger and bigger since the merger. The bottom line principle is 'coexistence and co-prosperity,' and it is to structure a relationship based on the 'Win-Win' concept.
We cannot help but face that the current circumstance of wholesale markets is an accelerating decline to an annual rate of 10 percent, compared to gradual slow-down seen two to three years ago.
If I dare to say, except large metropolitan markets, there is a notion of one wholesaler for one market. Circumstances surrounding wholesaling are dramatically transforming, and conventional ways of responding to changes are not good enough to survive. I want the companies of Gyoei Kai to realize that we must directly address the reorganization issue that will affect our future progress.
The original article was published on April 19, 2010 and was translated by Kiyo Hayasaka.
Suisan Shincho Publishes 2010 Skipjack and Tuna
April 7, 2010
Suisan Shincho published " 2010 Skipjack and Tuna," an annual reference book.
The book encompasses all aspects of bonito and tuna from production, processing, to consumption; it also covers the latest information of the skipjack and tuna industry. The main contents of the reference book consist of 1) fuel measures; 2) fishery institution reform; 3) new Southern bluefin quota management; and 4) various statistics of tuna fishing boat reductions, the securement of global fishing grounds, production, distribution, and consumption.
The reference book is priced at \12,000 (including shipping and tax). It is a case-bound book printed on A5 paper with 300 pages.
The original article was published on April 7, 2010 and was translated by Kiyo Hayasaka.
Japanese Supermarket Receives MSC's CoC Certificate
April 6, 2010
Shizutetsu Store, which runs 33 food supermarkets mainly in the area of the City of Shizuoka, just got certified with Chain of Custody (CoC) of Marine Stewardship Council (MSC). This is the second CoC certificate given to a Japanese retailer, following Aeon.
With this newly given CoC certificate, all the Shizutetsu Stores become eligible to process and market seafood products obtained from MSC certified sustainable fisheries. Shizutetsu Store is planning on selling seared bonito (katsuo tataki) of Tosakatsuo Suisan's pole and line skipjack tuna fishery, which became MSC certified last November. Naoto Nakayama, Fresh Produce Division Director of Head Sales Office, said, "We intend to market eco-labeled products at all of our stores, and continue to increase amounts we will deal with. In addition, at a seafood section of each store, we are slated to promote environmentally conscious fisheries and marine products. The decision to obtain the CoC certificate was a part of our company's policy to encourage environmental consciousness and products of 'reassurance, safety, tastiness, and health'; the company aims to offer such marine foods for generations to come."
Furthermore, MSC Japan Office Program Director Kozo Ishii made the following statement: "It is of great significance that the community based retailer is to sell MSC labeled fresh marine products. I hope that purchases of certified, familiar seafood products will provide an opportunity to reflect on the current and future condition of marine resources, which will lead to a higher consumer awareness of the importance of sustainable fisheries."
The original article was published on April 6, 2010 and was translated by Kiyo Hayasaka.
Maruha Nichiro's New President Kushiro Speaks
April 5, 2010
Toshio Kushiro, who just became the President of Maruha Nichiro Holdings as of April 1, responded to the Suisan Times' interview and made the following comments:
Q: It has been two and half years since the merger with Nichiro and two years have passed since the new business enterprise commenced.
A: As we hear news of some failed merger plans, like a merger between Suntory and Kirin, I believe that the union between Maruha and Nichiro has been carried out quite smoothly without much struggle.
Q: Give us some examples.
A: Nichiro excels at processed foods, frozen foods in particular, and Maruha has overwhelming procurement ability in the Marine Products Tradings Unit; when these two mutually complementing entities came together, business fields deepened and operational units also got larger. It's just like fishery and food operations functioning as two wheels of one cart and now this new system is getting ready for a flight with both engines.
Even though, realistically speaking, volatile economic fluctuations have set us slightly away from the originally planned figures, I consider that the fighting basis has been well prepared. With a triangle system made up of three of us with a representation right, myself, Vice Presidents Ito and Sakai, I want to keeping fighting.
Q: This new fiscal year is the last one of the Medium-term Management Plan "Double Wave 21."
A: Since the bankruptcy of Lehman Brothers, there have been drastic economic upheavals. Thinking of the financial settlement for the previous business year and the future economic trend, I want to positively formulate the next three-year plan.
Q: Maruha-Nichiro Kita Nihon was just launched on April 1 to consolidate the Hokkaido and Aomori areas into a system of six plants under one company.
A: There were numerous production bases located mostly in Hokkaido and since the first year of the merger, we have taken various measures. From this point on, aiming for the uniform management of the frozen foods section, like Maruha Nichiro Foods, Aqlifoods, and Nichiro Sun Foods, I like to finalize the merger from production, development, quality management, to distribution.
Q: What about workforce adjustment?
A: This aspect is moving in an initially planned direction. We can see noticeable merger effects now, especially in the area of costs mainly of the foods segment. 20 percent of the combined former Maruha, former Nichiro, and temp staff were adjusted. In terms of the business system, we are experiencing benefit in order receipts of the logistics operation.
Q: How are you feeling about being the President?
A: I understand that my ultimate responsibilities are to further develop the history and tradition of Maruha Nichiro and to realize stable business management. The past two years proved that the merger was such a timely act. Making sure that the paths of Maruha's unparalleled procurement power and Nichiro's expertise in product development and technology will continue on, I aim to make Maruha Nichiro an indispensible presence in the industry.
The number one priority is to establish a solid, profitable business system in the both Fishery and Food Operations. When it comes to the Storage & Logistics Unit, its numbers can be figured out to a certain extent, and currently we are contemplating its next move.
Q: What is your take on overseas operations?
A: The following three points are the current main tasks: 1) Development of overseas operations; 2) reinforcement of each group company's management system (about 200 companies); and 3) finalization of the merger. Pertaining to overseas operations, it is quite difficult to draw up growth strategies only targeting the domestic market, when Japan is facing a progressively dwindling birthrate and an aging population. Unless we take on overseas development, it is obvious that we will keep shrinking. We will also aggressively tackle M&A.
Predecessors of former Maruha and former Nichiro masterfully made business structure modifications, challenging new operations all the time. This is one particular heritage we would like to keep alive.
Especially, we are looking to expand the areas of health foods, functional foods, as well as nursing care foods. We will also focus on fine chemicals and DHA/EPA related operations, the very areas where Nippon Suisan is running ahead of us.
Integration of Procurement Ability and Development/Technology Strength
Q: I understand that one of the biggest themes is an integration of "Fishery" and Foods."
A: Once a competition over marine resources on a global level begins, Maruha's strong acquisition function will be needed more and more. The strongest point of the Maruha Nichiro Group is this combined power of procurement and processing/distribution functions. I acknowledge that, in this regard, we are a group of companies with high hopes for the future. By expanding these functions further more, our presence will grow even bigger.
|Picture 1: President Kushiro|
The original article was published on April 5, 2010 and was translated by Kiyo Hayasaka.
Federation of Japan Skipjack and Tuna Fisheries Cooperatives Expresses Gratitude for CITES Result to Minister
April 5, 2010
Delegates from the Federation of Japan Skipjack and Tuna Fisheries Cooperatives paid a visit to Hirotaka Akamatsu, Minister of Agriculture, Forestry, and Fishery, on April 2, to express their gratitude for the CITES decision not to list Atlantic bluefin tuna. On the day of the visit, on-time arrival of Mr. Ishikawa, the head of the Cooperatives, was deterred by heavy winds; Managing Director Yasuo Sato took Mr. Ishikawa's place to thank the Minister.
House of the Representatives Member Jun Azumi, who is Chairman of the Federation of Diet Members for Promoting Fisheries of the Democratic Party of Japan, came along with the Cooperatives and made the following statement: "This was the result of collective effort beyond party lines. However, Minister Akamatsu in particular put massive effort into this. Mr. Machida, Director-General of Fisheries Agency, also spearheaded the frontline at the conference. I feel elated about the result. This gave an opportunity for a lot of people like consumers and distributors to understand the gravity of issues concerning tuna. I certainly realized again that Japan must take the initiative when it comes to tuna. We ought to carry out thorough resource management."
In this regard, Minister Akamatsu said: "People in Japan deepened their understanding, through this CITES related matter that the issue of tuna wasn't all about toro (fatty tuna), but it was the issue of resources. I want to make sure that we will firmly work on resource management."
Managing Director Sato also made a remark: "The success of the conference resulted from earnest fishery diplomacy efforts showed by ODA, fishery grant aids, and the Overseas Fishery Cooperation Foundation of Japan. After the previous sorting work, we just ran out of fishery grant aids; however, we understand the importance of fishery diplomacy, so we want to keep sending financial support."
House of the Representatives Member Azumi pointed out that: "There is a fact that the desperate business situation shipowners are facing doesn't allow independent efforts. There is a need to support such shipowners in the way that will help strengthen the backbone of the industry. Additionally, we must begin formulating rules for resource management."
Mr. Ishikawa: It Was Collective Effort of Tuna Fishing Countries
Mr. Ishikawa, the head of the Cooperatives, made it in after the meeting with the Minister ended. He, then, stated: "The CITES bluefin proposal generated a sense of crisis in the minds of tuna fishing countries and made them think that after the Atlantic bluefin their tuna fisheries would be the next target subject. Resultantly, these tuna countries got together to stand against the proposal and it was then disapproved. Moreover, Japan's long-term, steady fishery diplomacy led to this fruitful result. This made us cognizant of the need for continuing efforts of powerful fishery diplomacy."
|Picture 1: Mr. Azumi (left) and Mr. Ito|
Conversing with Minister Akamatsu (right)
The original article was published on April 5, 2010 and was translated by Kiyo Hayasaka.
Maruha Nichiro Aims for Revenue Increase from 100th Anniversary of Akebono Salmon Can
March 30, 2010
The Canned Foods Division of Maruha Nichiro Foods, which boasts of its overwhelming market share of canned seafood products (except tuna cans), may manage to gain profits for the current fiscal term despite a slight decrease in sales. This accomplishment was contributed in part by integrating products overlapped after the merger of Maruha and Nichiro. For the coming business year, the company aims at increases in both sales and profit from "Akebono Salmon's 100th Year Anniversary Special Campaign."
Maruha Nichiro Foods occupy 50 percent of mackerel, 55 percent of saury, and 45 percent of sardine in the canned foods market. Particularly, salmon and crab take up monopolizing market shares of 80-90 percent, followed by 65 percent of scallop.
Spring new products introduced rectangular shaped "Sanma Kombu-maki" (saury wrapped in kelp) and "Nishin Kombu-maki" (herring wrapped in kelp). Each piece of fish is hand-wrapped with kelp, finished with an appropriate amount of sweetness. These products are a part of a deli series that can be just served with rice right away. Each contains three pieces of one-bite size fish. The product (drained weight of 50g, a total content weight of 80%) contains just a right amount and size for one time consumption, responding to consumer needs for low prices. Each product uses the company's new invention of "NEW Pakkan," whose characteristics are 1) easy to open; 2) easy to take out its content; 3) easy to wash an empty can; and 4) easy on space in a trash can.
For this upcoming new fiscal year, the company will place its focus on salmon flake products. Lately, Nippon Suisan has expanding its share of salmon flakes: this category was initially a strong sales point of Nichiro as "Salmon is Nichiro." The company is firing up for a fight: "Using the 100th anniversary of the salmon can as a perfect opportunity, we will make a move to regain our position."
"Akebono Salmon 100th Anniversary Campaign: '100-Year Brand: Akebono Salmon'" will be carried out from May 2010 to January 2011.
It has been 100 years since Nichiro - its name at the time was "Tsutsumi Shokai"-, the precursor of Maruha Nichiro Group, began canned salmon production on the island of the Kamchatka back in 1910. An aggregate production quantity of "Akebono Salmon" since its inception adds up to roughly 3.9 billion cans. In the months long campaign, a variety of memorial activities are arranged: a release of a commemorative version "100-year anniversary commemorative Akebono Salmon Can," a publishing of "100th year commemorative book," and a couple of events "100-year anniversary promotion" and "Summer vacation: family food education." Furthermore, there will be a few campaigns to engage consumers in throughout the year, such as an opening promotion: a trip to Hokkaido for four days and three nights ("Eat salmon until you drop") and a closing one: a gift of \10,000 to four hundred selected people.
The original article was published on March 30, 2010 and was translated by Kiyo Hayasaka.
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