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Delmar Co. Runs MacDonald’s Franchise

September 4, 2008

Delmar Co. Ltd., under Pres. Hayashi Komoda, located in Chiba Prefecture, and Japan MacDonald’s reached an agreement on August 25, 2008, that Japan MacDonald’s would transfer business entities of about 90 directly managed restaurants in Coastal and Northern Chiba Prefecture to Delmar.

Delmar’s new group company-to-be will take charge of managing MacDonald’s franchises.

Delmar was established as a seafood manufacturer with a capital of 200 million yen in 1938. The company conducted business transactions with Japan MacDonald’s through supplying materials for fish burgers. Delmar is aiming to strengthen its management base and expand business operations, harnessing benefits of managing MacDonald’s franchises.

At this time, the affected areas of the business agreement are coastal and Northern Chiba Prefecture and part of Ibaragi Prefecture.

Japan MacDonald’s this year’s business approach to convert restaurants under its direct management into franchises was implemented by this business transaction with Delmar. Japan MacDonald’s owns roughly 3,700 restaurants; 70 percent of which is directly managed and the rest franchised. The company created a business end to reverse this ratio.

Reduction of the number of directly managed restaurants and personnel will enable the company to refocus on product development and improve earnings.

Masafumi Yanagihara, Vice President of Delmar, commented; “This is a new business opportunity for us to take; we are determined to aggressively pursue it. Japan MacDonald’s is in the people business; we are eager to further develop excellent personnel and create close relations with the involved communities.”

Surimi Prices of B-Season End in Unexpected Increase of \100

September 4, 2008

According to a major surimi dealer, the negotiation of the American B-Season surimi prices ended in a significant \100 increase in all grades. The prices are as follows: Grade SA, \660; FA, \630-640; A, \580; KA, \520; B, \490; RA, $3.70 (there will be a slight change in prices, depending on the amount purchased)

The B-season surimi prices have already hit the ceiling; it was speculated that demand for Grade SA and FA for a high-end traditional New Year’s cuisine would force a slight upward move of those prices; and that increased surimi production in Hokkaido and shipment from South East Asia, awaiting the fishing season, would defer the price raise of low grade surimi. Upon the price negotiation, American producers insisted; “Europe agreed upon a price increase of \100 per kg. We demand that Japan accept the same deal; otherwise everything will be shipped to Europe.”

With a 28 percent decline in Alaskan pollack catches, totaling one million tons, resultantly anticipated scarcity of surimi supply triggered a price hike of \80 in all grades at the A-season, ending in a dealer price of \480 per kg for Grade A surimi. This was another drastic price escalation, following a \40-50 price upsurge at the B-season last year.

Prior to the price negotiation, expressing his determination to avoid accepting another price hike, a major dealer said, “fish paste product manufacturers already passed the soaring material costs onto consumers by a 20 percent price raise twice in the recent past; however the price revisions are stagnating sales. It is impossible to consider another price revision. However, the surimi prices are already staying sky high.”

Europe’s Strong Demand, followed by South Korea

With inflation causing price increases in Europe, more than expected eagerness of European purchasers to procure surimi resulted in an increase of \100 per kg at the B-season. South Korea, which did not participate in the A-season purchasing event, followed suit; Japan resultantly found it inevitable to accept this deal.

The fish paste product prices are already hitting the ceiling; the manufacturers are now facing a seemingly insurmountable problem of bridging the gap between the high surimi costs and the product prices.

Original article published on September 4, 2008; translated by Kiyo Hayasaka

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