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Genki Sushi Restaurant Ready to Saturate Seattle Market

June 18, 2009

The Genki Sushi Group, specializing in sushi boat restaurants and headquartered in Utsunomiya, Tochigi Prefecture, runs 200 restaurants in Japan; the group is also aggressively making continuous efforts to expand its business worldwide. Since the opening of the first restaurant in Hawaii in 1993, the company has built businesses in Hong Kong, Taiwan, and Kuwait. Another one was just opened in Seattle, WA, in January 2009.

The company promotes global business strategies, which entail worldwide demand on "SUSHI"; Tsuruo Hirota, Chairperson of the Board, mainly takes charge of overseas operations. The company currently owns 12 directly managed restaurants in the US and 41 franchises, a total of 53 restaurants.

Though the first one was just opened in Seattle in January this year, the company considers the city strongly marketable. Chairperson Hirota said, "During this term, we aim to open three more, and we hope to increase the number up to ten within the next three years." One motivating factor is that the state regulations are loose compared to Los Angeles and San Francisco.

Another two to three restaurants will be added to Hawaii, which already has 12, in this fiscal year. With the new one in Seattle in mind, the company is slated to set up an overseas subsidiary, "USA Genki Sushi," in the US, where the company possesses many of directly controlled restaurants.

In Hong Kong and Indonesia, the company intends to create a high-end restaurant, "Senryo," targeting the affluent. With regard to the restaurant in Kuwait, which became the talk of the town, Mr. Hirota said, "Once the construction of a 60-story office building is completed, it will become quite busy and exciting all at once."

Referring to the Chinese market, he said, "The World Expo in China will mark the growing trend of Japanese cuisine. The Japanese market is oversaturated, but overseas markets hold infinite possibilities."

Currently, the Genki Group earns sales of \25 billion in the domestic market and another \8 billion overseas. Chairperson Hirota said, "We must show successful cases in the development of overseas sushi business, which is a task of a dream and romance. I am dreaming of a day when overseas markets catch up with the domestic one, or surpass it."

Mr. Hirota outlines the conditions for the development of successful overseas sushi boat franchise: 1) having an excellent partner company; 2) partner's preference of sushi; 3) passion possessed by partner's management; 4) trustworthiness of a partner and its company; 5) marketability of a partner's country or regions; 6) ability to obtain a business license for restaurant, e.g. construction permit, health department, fire department, alcohol license, and infrastructure; 7) capacity to hire excellent employees; 8) ability for stable procurement of necessary materials; and 9) profitability and ability to run more than 10 restaurants.

The original article was published on June 18, 2009 and was translated by Kiyo Hayasaka.

Report on Shimonoseki Plant of Maruha Nichiro Foods

June 17, 2009

Maruha Nichiro Foods' Shimonoseki Plant manufactures fruit flavored jelly, kneaded fish, and freeze-dried products. Starting with the acquisition of the Food and Drug Administration's HACCP by the kneaded fish products in 1996, the entire plant became certified with ISO9001 in March 2003 and ISO14001 last February. The company aims for the attainment of ISO2000 next year.

Maruha Nichiro Foods owns plants in Kushiro, Mori, Sendai, Ooe, Utsunomiya, Hiroshima, as well as Shimonoseki. As a result of a business merger between Maruha and Nichiro, the reorganization and consolidation of production sites have been put into practice, beginning from Hokkaido and Tohoku. Compared to the Eastern region of Japan, fewer production bases are located in the Western part of Japan; therefore, reorganization and consolidation have not been implemented in this particular region, even though the expansion of plants are possible. Especially, the segment of fruit jelly products, which has been exhibiting tremendous growth, and is placed as a growth field of the future. Though the history of fruit jelly operation is still young, Factory Director Hiroaki Kato said, "In comparison with our competitors, our long cultivated global network through our can business puts us in an advantageous position, when we procure fruit materials."

Prior to the merger, Maruha was ranked number one in the category of the seafood segment. In Foods Business, Nichiro's expertise in the streamlining of production and quality management has been best harnessed.

The manufacturing of fruit jelly entails only the repacking of raw materials, which come in bulk; and therefore, the most crucial task is to prevent unwanted substances from tainting products. In order for human hair to not affect the quality of the products, the development of the company's own machine to brush fruits in running water and then level them with rollers was accomplished. This particular machine is attracting interest from partner plants. The Shimonoseki Plant rigorously follows regulations, and instructs decisions, procedures, and directions to be thoroughly followed. Furthermore, the plant makes great efforts to improve the systems by constantly scrutinizing them, in order to achieve planned results without fail. By setting the ideal product quality, the plant reevaluates the status of the achievement on a regular basis.

One of the company's undertakings is to aggressively work against environmental pollution by laying out four items of 'Environmental Policies,' reducing waste materials, and promoting energy efficiency and resource saving.

The original article was published on June 17, 2009 and was translated by Kiyo Hayasaka.

Nippon Suisan Changes Product Name Due to Alleged False Labeling

June 17, 2009

Nippon Suisan received an order to eliminate the name of 'Zuwaigani Croquette' (Snow Crab Croquette) by the Fair Trade Commission, with the allegation of acting against Unjustifiable Premiums and Misleading Representations on June 15. The product, renamed to 'Beni Zuwaigani Croquette' (Red Snow Crab Croquette) with no changes in its product code, standard, and price, is now selling more than before.

The product in question uses red snow crab as a raw material. It was alleged that the labeling of the product, as if snow crab was being used, would not depict that fact, and that the product was presented as something superior than it actually was.

With respect to this issue, Nissui voluntarily inquired with the Fair Trade Commission about the grade misidentification of this alleged product on February 21. The Commission, then, requested further explanations from the company. As a result, the company received a notice of the decision from the Commission to treat this matter as a violation of the truth-in-advertising laws on April 1.

Though Nissui voluntarily initiated this matter, the company seriously accepted it and renamed the product to 'Beni Zuwaigani Croquette' (Red Snow Crab Croquette) for sales as of May 2009. Furthermore, to avoid shipping of the wrong products, the company disposed of all of the inventories, worth approx. \20 million. However, the company did not recall products in circulation, for a reason being that there is no quality problem as a product; attention was brought up to only a false labeling.

The original article was published on June 17, 2009 and was translated by Kiyo Hayasaka.

Norway's Seafood Exports from Jan Thru May Rise 14%
Salmon filet exports to the US Increase Six-Fold

June 15, 2009

According to the Norwegian Seafood Export Council (NSEC), Norway's seafood exports rose 14 percent year over year, amounting to NOK17.243 billion. In terms of quantities (round calculation), there was a 6.1 percent increase to 112,000 tons. Exports to EU rank first, totaling NOK10.1 billion. The export amount to Japan came to NOK731 million, marking a 45.2 percent increase.

The total amount of salmon exports from the period of January through May registered 304,500 tons (round calculation), up 6.7 percent, and NOK8.631 billion, or a 25.1 percent rise. The salmon exports to EU, the top client, totaled 220,000 tons and NOK6.2 billion, which took up 70 percent of the total.

The salmon exports to the US on a year round basis tripled to 12,600 tons, compared to the corresponding period last year. The amount of 11,600 tons, a seven percent growth, which Japan received, was surpassed by the US. Salmon products preferred by the US were fresh filet, rather than round product, which had a higher tariff duty. On a product basis, fresh filet exports to the US added up to 5,400 tons, a six-fold increase.

The exports of salmon trout from January to May indicated a contraction of 12.4 percent, totaling 31,000 tons (round calculation) and amounted to NOK790 million, or a 17.5 percent rise. This type of fish was exported mainly to Russia, reporting a 4.8 percent increase to 16,000 tons and a 32.4 percent spike in value to NOK400 million. Exports to Japan ran to 3,900 tons, or up 13.9 percent year over year, and totaled NOK100 million, or a 61.1 percent growth.

Shishamo Smelt Shipped to Japan Indicates Tremendous Increase to 15,300 Tons

The total mackerel exports increased 51.9 percent to 46,400 tons, reporting a 93.2 percent hike in value to NOK570 million.

Russia topped the ranking, registering 10,000 tons, four times as much as the prior year. The total value came to NOK139 million. Mackerel purchased by Japan totaled 5,400 tons, or down 6.3 percentage points, and NOK81 million, or a 32.1 percent surge. The mackerel exports to China declined 43.8 percent to 4,700 tons. In contrast, Korea imported 4,600 tons of mackerel, as opposed to 120 tons at the same period last year.

The exports of shishamo smelt, for which the embargo was just lifted this year, reported the total amount of 119,800 tons (26,000 tons at the corresponding time last year) and the total value of NOK517 million for the period of January through May. Shishamo smelt exported to Japan indicated a drastic increase to 15,300 tons, in comparison to 1,800 tons from the corresponding period of the previous year.

The original article was published on June 15, 2009 and was translated by Kiyo Hayasaka.

Seafood Supply-Demand Review Committee:
Shipment of Frozen Black Tiger Delayed

June 15, 2009

The first Frozen Seafood Supply-Demand Review Committee meeting in 2009 was held to discuss the frozen seafood supply-demand trend forecast. The following is the result of the discussions:

<Salmon/Trout> Both the quantity and the value of domestic production for the period of April through June will move in a similar manner to last year. From this point on, mainly new chum salmon, wild coho salmon from Hokkaido, and farmed Sanriku coho salmon will be the focus of attention. As for imported varieties, it is certain that the fish from Chile will decline as a result of a fish disease. The production amount of cultured coho salmon is dramatically contracting and fewer shipments are arriving.

In the market, Atlantic salmon comes from Norway; however, Norway is shipping an increasing amount of the fish to the United States, and therefore Japan will receive less. Price-wise, fewer arrivals of goods, compared to the previous year, contribute to gradual price hikes; and therefore, it is projected that prices will move relatively bullishly. At retailers, consumers' tighter wallets overall generate a price trend that refuses to go upward. Chum salmon prices' tending to be high engenders the contracted sales growth. In contrast, trout and coho salmon maintain their sales by lowering the unit prices.

<Shrimp> The aquaculture of whiteleg shrimp (litopenaeus vannamei) is slumping due to a disease outbreak in Indonesia. The unfavorable weather has caused delays in harvesting black tiger shrimp, leading to deferred shipments.

In the market, sales are in a slump overall. Small sizes are relatively moving well; however, the fact that larger types are struggling creates a bearish trend of wholesale prices verses last year. At retailers, efforts to maintain sales are made by selling frozen shrimp individually.

<Squid> Domestic production has been faring well since the end of the Golden Week, resulting in the forecast that more products will be in the market. Fishing grounds are centered in the area of Noto, and, from that point, they are gradually shifting Northbound. In terms of frozen squid, 35 fishing boats from Hachinohe and Sendai sailed out in the Pacific Ocean in the mid of May for the harvesting of neon flying squid, enjoying favorable catch. Prices at the production sites tend to be rather bearish.

In the market, in spite of a small inventory amount, a bearish move is predicted due to the anticipated increase in products from adjacent waters, which have been delayed. At retailers, it appears that cooked products, made mainly from frozen sagittated calamari, are selling well.

<Mackerel> The domestic production of mackerel displayed a tremendous contraction as a consequence of a fishing quota reduction. A decline in exports owing to the influence of currency exchange rates, ended in an inventory increase.

In the market, a frozen kind comes mostly from Norway. Its price tends to be higher than that of last year; nevertheless, it is settling at around \450 away from \500, due to such factors as a 1.5 times increase in a fishing quota and expected future arrivals. As a result, its market price is predicted to move weakly. At retailers, both fresh and frozen mackerel are being consumed less. There is a new direction to convert small mackerel, which was used for feed, for human consumption by processing the fish in various different ways. Canned mackerel is showing healthy sales thanks to consumers' growing health consciousness.

The original article was published on June 15, 2009 and was translated by Kiyo Hayasaka.

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