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Nichirei's Marine Business Achieves Profit by Focusing on Certain Fish For the First Time in Six Quarters

March 19, 2009

Nichirei Group's marine business promoted structural improvement with strong unyielding resolve for departure from years of chronic deficits. In this fiscal year, fruits of such enduring efforts seem to turn out to be sweet. Hisashi Hasagawa, President of Nichirei Fresh was interviewed about the trend of the current business year and plans for this coming fiscal year.

Q: Nichirei has been working for the marine business recovery plans. How's the current situation?
A: We are sure of the surplus for the first time in six quarters. The first part of this term went great, but the last part was tough. Not having extra inventories saved us. It can be said, in terms of the figures, recovery was achieved, and yet, we are facing unsolved matters.

Q: In the seafood industry, we do not hear that money is made from fish any more.
A: Marine business has small margins, and taking labor costs into consideration, there is not much room to make profit. Compared to our counterparts, the ratio of labor costs of our company should have been lowered. The key is to reduce fixed costs, as retaining sales. It is not an easy task to take care of existing clientele and simultaneously cultivate new distribution network with a smaller number of personnel; nevertheless, we cannot break the deadlock unless we challenge it. The higher the numbers get, the more motivated employees feel.

Q: Tell us about improvements the company made in business practice.
A: Well, there are several, for instance, we unified inventory management, which used to be done by each area, now the headquarters control it. Though products were already gone, the prime costs were unknown, causing postponed settlements. Such strange things became commonplace. Unification of inventory management was a huge assignment, however, clerical work became quite efficient.

Q: The company refined fish species in the seafood operation.
A: Of course, we did it to a certain extent. Business can exist because of clients. We have to deal with demand. Originally, shrimp, octopus, fish roe, and seashells are top sellers, but we cannot tell our clients we don't transact anything else. What differentiates marine business from livestock business is the number of fish species. They can be modified based on one's ingenuity and this business stimulates your ingenuity. Other than refining fish species, there should be a way to generate profit.

Q: Livestock business is one of the two main pillars.
A: Generally speaking, this business has better capital efficiency. Dealing with live chickens helps us maintain low stock amount. The industry tremendously suffered in the last part of the term as a result of a plummet in Brazilian chickens, a large amount of which was imported. In our company's case, we were saved this turmoil thanks to drastic inventory clearance carried out in September. It was just like a rollercoaster ride for both seafood and foods operations.

The original article was published on March 19, 2009 and was translated by Kiyo Hayasaka.

Maruha Nichiro HD: Senior Managing Director Kushiro Assigned As V. President

March 3, 2009

Maruha Nichiro HD will assign Senior Managing Director Toshio Kushiro as Executive Vice President/Representative Director, effective April 1, 2009. Chairman /Representative Director Tatsuhiko Tanaka, and Executive Vice President/Representative Director Yuzuru Nakabe will resign to become Executive Advisor.

Yuji Igarashi, President of Maruha Nichiro HD, commented on the retirement of Chairman Tanaka to an advisor, stating: "After an announcement of a merger in late 2006, we completed the first phase: management integration in October 2007 and the start of business operations in April 2008. Chairman Tanaka is now 68 years of age. It was not a bright idea for us two to leave the position simultaneously, and therefore we decided that I would stay. Executive Vice President Nakabe has just reached a retirement age."

In response to a question made by the Suisan Times if a drastic reshuffle of management seemingly made old Maruha dominate the Holdings, Igarashi said, "That is not the case, at all. 50 to 60 years old of the managerial generation didn't just have that many from old Nichiro. Fewer new hiring was made in around 1973 and 1974. The management reorganization was aimed at generation transition and rejuvenation."

The following is a list of position changes in Maruha Nichiro HD:

Effective March 31, 2009:

Resignation, Tatsuhiko Tanaka (Chairman)
Resignation, Yuzuru Nakabe (Executive Vice President)
Resignation and next Maruha Nichiro Logistics Advisor, Seigo Kawazoe (Managing Director)

Effective April 1, 2009:

New Executive Vice President and Representative Director: Toshio Kushiro (former senior managing director)
New Senior Managing Director: Kazuaki Kanda (former director of the board and corporate officer)
New Managing Director: Masao Anzai (former director of the board)
New Executive Advisor: Tatsuhiko Tanaka (former Chairman)
New Executive Advisor: Yuzuru Nakabe (former Executive Vice President)
New Corporate Officer/Public Relations IR General Manager: Fumihito Kawa
New Corporate Officer/Director of Maruha Nichiro Management: Chihiro Mitamura

The original article was published on March 3, 2009 and was translated by Kiyo Hayasaka.

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