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Kyokuyo’s Q2: Operating Profit Slashed in Half

November 2, 2009

Kyokuyo announced its consolidated financial settlement for the second quarter (April to Sep); a 4.3 per cent decline in sales to \70.4 billion; a 53.8 per cent fall in operating profits to \1.29 billion; a 37.5 per cent drop in ordinary earnings to \1.55 billion; and a 53.4 per cent contraction in net income to \686 million year to year.

Marine Products Purchasing suffered declines in northern fish transactions, consumer frugality, as well as slumping market trends at both home and abroad. Plunging sales of high unit price merchandises, like crab, caused sales and profit to fall short of last year’s results. Last year, Marine Products Purchasing contributed to a consolidated operating profit of \2.6 billion as a result of solid market trends; it performed so well a year ago that its rebound generated a considerable adverse effect this year.

The Division of Processed Food reported a revenue increase and a profit reduction. Although livestock products of Processed Frozen Food Business ended up lessening transaction amounts due to the situation of raw materials, such room temperature foods as canned products, canned marine foods in particular, witnessed sales expansion because of the growing demand stemming from measures against the H1N1 flu and consumer choice of dining in. Kyokuyo’s subsidiary Jokki Co., a seafood delicacy maker, was another contributing factor to the revenue increase.

In Logistics Business, cold storage ship operations underwent declines in both revenue and earnings, resulting from the sudden appreciation of the yen and slumping international markets. Tuna Fishery Business also registered reduced revenue and earnings due to decreased catches by far seas purse seiners and plunges in bonito prices.

The financial forecast for the entire fiscal year is sales of \150 billion; operating earnings of \2.7 billion; ordinary profit of \3 billion; and net income of \1.5 billion.

The original article was published on November 2, 2009 and was translated by Kiyo Hayasaka.

OPRT Conducts Wild Tuna Sashimi Campaign

October 30, 2009

The Organization for the Promotion of Responsible Tuna Fisheries (OPRT) and the All Japan Fish Retailers Union (AJFRU) are slated to conduct the annual “Wild/Sashimi Tuna Campaign” for a week from Nov. 7 to 13 with the slogans of “For Youth and Health!” and “Tuna’s Nutrients Are The Best!” The campaign will take place at fresh fish retailers nationwide at the 13 different areas. Other than the OPRT members of the National Liaison Committee of Consumers' Organizations, the National Central Market Fish Wholesale Association, and the Joint Association of Marine Product Wholesalers' Unions, eight foreign organizations provided financial support for the first time.

Flyers Disseminated at 500 Fish Retailers

1,200 fish stores participated in the last year’s event; however, “this year, the AJFRU carried out a preliminary survey twice to select 500 retailers that were eager to take part in the campaign,” AJFRU Executive Managing Director Mitsuji Murai said.

Pamphlets with a request postcard for tuna gifts and a banner, stating “Important Health: Tuna Campaign,” were distributed to each participating retailer.

OPRT Executive Managing Director Yuichiro Harada said, “We would like to encourage young people to consume tuna.” To this end, the details of nutrition and such trendy recipes as carpaccio, avocado salad, and uncured ham in tuna style, were printed in the pamphlets.

As a featured project, 500 people will be randomly selected for a gift set of wild, frozen, and sashimi tuna (about one kg), once a gift request postcard attached to the pamphlet and a short essay titled “Tuna and Me” are submitted. Additionally, ideas for the name of a promotion of longlined wild tuna will be simultaneously accepted. A winner of the best name will be awarded a gift set of bluefin and Southern bluefin tunas (total of two kg). Two runner-ups will receive one kg of bluefin; and an honorable mention will be rewarded with one kg of bigeyed tuna.

The original article was published on October 30, 2009 and was translated by Kiyo Hayasaka.

September Seafood Import Stats: Total Amount Drops 20%

October 30, 2009

According to trade statistics released by the Ministry of Finance, the total import amount for the month of September this year added up to 207,232 tons, a five percent fall on a year by year comparison. In addition to bigeyed and yellowfin tunas, salmon, trout, and octopus increased their import amounts; however, pollack surimi, squid, and flounder varieties displayed significant declines. Excluding cod roe, squid, and mackerel, other unit prices dropped all across the board, resulting in a 20 percent tumble in the average unit price to \484 per kg. A total import value showed a 23 percent contraction to \100.4 billion.

The hot commodity of bigeyed tuna swelled 12 percent to 6,350 tons; yellowfin ended in 5,500 tons, up five percent compared with the same month a year ago. Their unit prices fell 20 percent each. Salmon and trout exhibited a 22 percent rise to 18,800 tons; within which, sockeye salmon grew 55 percent to 9,671 tons (3,300 tons from the US; 6,300 tons from Russia). Its unit price finished in \544, or a four percent increase. Chilean coho salmon came to 2,300 tons with a 57 percent jump; its unit price was \452, remaining similar to the previous year. Chilean trout, on the other hand, marked a 40 percent tumble to 1,000 tons; its unit price, however, rose 11 percent, finishing in \544.

What exhibited a tremendous decline was pollack surimi. 10,000 tons of pollack surimi were imported a year ago; however, this year its amount was slashed in half to 5,300 tons. Its unit price also reduced 40 percent. The following fish varieties showed considerable contractions: flounder varieties 30 percent; Matsubara Stingfish 40 percent; and squid 34 percent.

Declines in unit prices were seen in most of the fish commodities: crab 28 percent; octopus 22 percent; Japanese horse mackerel 23 percent; and bonito 29 percent.

Main Item	Quantity (t)	Year-over-year comparison	Unit Price (yen/kg)	Year-over-year comparison
Live Eel	499	63.9%	1,251	75.7%
Fresh/Chilled/ Frozen
Bluefin Tuna	1,043	103.2%	1,845	59.2%
Albacore	543	27.3%	311	75.5%
Bigeye Tuna	6.350	111.9%	714	81.9%
Yellowfin Tuna	5,505	105.4%	373	83.6%
Southern Bluefin	1,532	36.1%	1,366	71.2%
Other Tuna Varieties	1,473	175.1%	1,082	94.0%
Marlin	823	135.1%	492	95.1%
Bonito	1,453	79.1%	129	70.7%
Sardine	1,540	51.2%	61	56.4%
Cod Roe	539	98.0%	1,275	147.0%
Sablefish	798	76.7%	1,093	82.8%
Flatfish	5,164	70.5%	333	83.8%
Herring	258	70.7%	85	46.5%
Salmon/Trout	18,847	122.4%	591	98.7%
Matsubara Stingfish	3,188	60.1%	327	86.1%
Cod/Merluza	603	240.2%	252	62.0%
Cuttlefish	1,297	84.9%	664	84.2%
Squid	3,650	66.0%	435	115.4%
Fish Meat	14,022	123.9%	311	64.3%
Crab	4,982	88.3%	652	71.7%
Shrimp	17,935	97.1%	791	82.0%
Octopus	3,864	249.1%	502	78.3%
Horse Mackerel	2.711	84.4%	144	77.3%
Mackerel	317	34.6%	404	202.3%
Pollack Surimi	5,251	50.0%	310	60.4%
Salted/Dried/Smoked
Herring Roe	716	91.0%	1,466	88.2%
Cod Roe	96	46.6%	1,479	87.8%
Salmon Roe	618	180.7%	1,105	74.3%
Prepared/Cooked
Eel	829	179.4%	1,065	70.6%
Others
Fishmeal	32,963	106.1%	97	84.1%
Total	207,232	94.6%	484	80.9%

The original article was published on October 30, 2009 and was translated by Kiyo Hayasaka.

Kyokuyo Aims for \20B from Sushi Related Business

October 26, 2009

Kyokuyo widely supplies major sushi boat restaurants, take-out sushi restaurant chains, and mass retailers with sushi toppings, having its joint venture K&U Enterprise (KUE) in Thailand as a main production site. Kyokuyo has been proceeding with the midterm business plan “Kyokuyo Group Challenge 2012” that aims to expand its sushi topping operations, excluding bonito and tuna, to \20 billion.

The company deals with shrimp, spear squid, sepia esculenta, northern shrimp, salmon, salmon roe, and eel as sushi toppings; however, a global poor catch of squid for this term has affected the overall transaction amounts. Kunio Akiyama, Chief of the Department of Frozen Seafood Section One, said, “Our fundamental policy is to procure any sushi topping that our clients desire. Also, we focus on reasonably priced fish species, taking fishing conditions and market trends into consideration. We attempt to differentiate ourselves from our competition by making the best of the group’s network strength, including bonito and tuna, and by realizing cost reductions through streamlining processing.” For the time being, the company is planning to expand sales of salmon roe and Thai farmed shrimp (vannamei); the situation of those raw materials and market trends are more advantageous.

Following live Sanriku cultured coho salmon “Sugata Bijin” and Korean (Jeju-do) farmed flounder “Saboten Hirame”, the third item of the series is scheduled to hit the market as one of the spring collection.

Solid Popularity of Shime-Saba (Marinated Mackerel)

Shime-saba products that use “Kinka Mackerel” are showing favorable growth. With Sanriku farmed coho salmon, which promotes a tie-up with a producing site, the company is developing new products with a twist, such as broiling or marinating, which “will contribute to the revitalization of sushi boat and take-out sushi businesses.”

Sushi toppings manufactured by KUE are shipped to Japan; 80 percent of the company’s products, shrimp, spear squid, sepia esculenta, salmon, marinated mackerel, tuna, and northern shrimp, are procured by Kyokuyo. Mr. Akiyama expressed his enthusiasm by saying; “We will continue providing the Japanese sushi market with safety assured sushi toppings under a thorough management system.”

The original article was published on October 26, 2009 and was translated by Kiyo Hayasaka.

\100 Sushi Boat Chain Company Announces Profit Gain for Six Consecutive Months

October 23, 2009

Akindo Sushiro Co., a major sushi boat restaurant chain, has maintained a monthly sales record surpassing 100 percent year to year, since April. April marked 102 percent; May showed a considerable rise to 108 percent. June recorded 105 percent; July 101 percent; August 103 percent; and September 104 percent. Average customer spending is remaining similar to last year or slightly going downward; however, an increase in the number of customers can be ascribed to the overall sales growth.

The “gourmet sushi boat” sector of the sushi boat industry has been suffering consumer frugality as a result of a financial downturn. Therefore, restaurants that specialize in “all \100 sushi” are facing fierce competition. Akindo Sushiro has managed to differentiate itself from others with sushi fish procured by the President, a sushi chef himself. The company said, “Our President, who is a sushi chef himself, meticulously checks fish for sushi and the only fish acknowledged by him can be purchased.”

A high cost percentage is also the company’s strong point. A demand trend is analyzed by the company’s own “Total Sushi Boat Management System.” Reducing as much waste as possible generates a wider profit margin, which can be spent to procure good quality fish. The company’s cost percentage, 51 percent, is the highest in the industry.

Freshness management is also thorough, utilizing a system that automatically disposes sushi which ends up floating for 350m.

The number of customers at average stores is 750 per day. Average customer spending is around \950; popular locations mark 1,300 customers a day and customer spending jumps up to \1,100.

The company is eager to aggressively open more restaurants as long as potential sites meet its standards. For this fiscal term (from Oct 2009 to Sep 2010), the company is slated to open 33 more restaurants. Recent scheduled openings are in Chiryu, Aichi Pref, and Matsuyama, Ehime Pref. in December.

The original article was published on October 23, 2009 and was translated by Kiyo Hayasaka.

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