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An Interview with Mr. Igarashi, President of Maruhanichiro HD

June 2, 2008

Maruhanichiro is facing a crucial stage two months after an establishment
of a new business corporation. This is an interview with Mr. Igarashi, President of
Maruhanichiro HD conducted by The Suisan Times.

The Suisan Times (ST): How did you accept settlement of account of the
previous business term?

Pres. Igarashi (Pres.): It was not great for sure; but we cannot simply compare
the results of the previous term to the term before, since merger with Nichiro took
place last October. By adding Nichiro’s results of the first half, total sales amount
to 960 billion yen and operating profit is 14.5 billion yen. These figures can be our
starting line.

4 Billion Yen, Benefit of the Merger

ST: It has been eight months since the merger and two months since the new
business corporation set off; have you seen any sign of benefit of the merger?

Pres: We have not seen any concrete results, yet. In the first year, including
temporary employees both old Maruha and old Nichiro lost 200 employees and
we will begin to see the resultant numbers from this term. Moreover, we will
annually let go of 100 people, a total of 400 people over the course of next three
The generation of “Dankon*” has been retiring and consequently we will
lose 600 employees for the next three years. Considering new hiring, we will end
up losing 400. We will resultantly achieve cost reductions amounting to 3.2
billion yen. This is a clear result of the merger at this point, however we ought to
accomplish higher profit gains.

ST: As a matter of course, that will be expected.

Pres: We will gain 2.6 billion yen from downsizing and consolidation of branches.
We have expected 4 billion yen as the benefit of the merger, and therefore the
rest of 1.4 billion yen will have to come from business itself. We have estimated
operating profit of 19 billion yen for this term after adding 14.5 billion yen, the
result of last term, and 4 billion yen, a benefit of the merger. Analysts consider
these figures unfeasible.
Combined operating profit of Maruha and Nichiro in 2007, ended up in a
loss of 1.7 billion yen from the year before. It was a tough year for fishery and
food industries last year because of difficulty passing high costs onto consumers
and the Tenyo Foods scandal.

ST: What about consolidation of production bases?

Pres: There are a large number of production sites disproportionately located in
Eastern Japan. We will establish a department of production integration to deal
with this issue, which we expect will temporarily require a major expense. We,
however, are hoping that this move will improve productivity and quality.

ST: What about plans for the fishery section?

Pres: Balance between resource access and production/distribution is crucial.
Europe, the United States, and China are expected to grow. China, in particular,
is the largest exporter as well as importer. How we access growing global
markets and utilize adequate supply capacity become the next questions. These
years both Maruha and Nichiro had made aggressive investments in resource
access in order to strengthen the supply capacity of fishery products.

Fishery Industry Holding a High Potential of Growth

ST: You announced that you would launch a new midterm business plan in July.

Pres: The questions are if we can create our business model to be a growing
industry and how we can break out of share competition in this shrinking food
market. Completely matured domestic industries inevitably pushed us to the
merger. We now target at a growing overseas market, which leads us to a
question of resources and access to them.
Globally speaking, the fishery industry is another growing business. The
amount of imports is stagnant, but we are exporting more than before. The
fishery industry has a huge potential and the merger will bring us more “power.”

ST: What is your resolution of the first year of the merger?

Pres: The first step is the key in business. Achievement of good results in the
first year will give a boost to the second year and on.

*Dankon means a generation of people born between 1947 and 1949, the first baby
boom after the WWII.

Translated by Kiyo Hayasaka on June 1, 2008

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