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Maruha-Nichiro Announces New Mid-Term Plan

July 23, 2008

Maruha-Nichiro HD announced its three-year mid-term business plan, named “Double Wave 21,” on July 22, 2008. The plan will run from April 2008 through March 2011.

The company believes that elimination and consolidation of production bases, restructuring of group companies, continuing efforts to improve system maintenance, utilization of strong sourcing capability, overseas distribution of marine products, its preeminent abilities of product development and domestic distribution, will enable it to achieve total sales of 1 trillion yen (930 billion yen in 2008) and operating profit of 24 billion yen (19 billion yen in 2008) by the year of 2010.

A goal of ROA (return of asset) will be 4.6 percent (3.5 percent in 2008). The company furthermore aims to inflate its capital-to-asset ratio to 15.7 percent from 13.9 percent and to diminish an interest-bearing debt balance of 335.9 billion yen to 299.9 billion yen, in three years. The company as a 600 billion-yen business investment plan, will put 17 billion yen into fisheries business, 20 billion yen into food business, and another 23 billion yen into other matters, such as new M&A (merger and acquisition).

Mentioning the previous mid-term business plan (from 2005 to 2007) at the press conference, the President Yuji Igarashi said, “We had goals to strengthen the core business operations and overseas business strategies; however global demand for seafood being more volatile than expected hindered our achievement of desired profits.”

“In the next three years, with passing costs to retail prices, thorough cost reduction efforts, and development of synergy effect of a merger with Nichiro, we will focus on consistent procurement and supply of superior food materials and our challenge to the growing world market,” further said Igarashi.

For total sales of overseas ventures, the company has set a goal of reaching 120 billion yen, or a 15 percent increase in total sales, in the next three years.

The quality assurance department (CSR) under Maruha-Nichiro HD will deploy 85 employees to establish “Food Trace System,” to work with operational companies of fisheries, food, and livestock. In the field of fisheries, Maruha-Nichiro has ambitions to rebuild its fisheries business and expand its aquaculture business through construction of large purse seiners and collaborations with fisheries cooperatives and fish markets.

The elimination and consolidation of production bases mentioned earlier will start from Hokkaido and Tohoku regions, reducing 19 bases to 13 - 15 bases. Total sales of health and chilled food products will be increased to 10 billion yen from a current total of 3 billion yen.

Translated by Kiyo Hayasaka on July 24, 2008

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