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Interview with Maruha Nichiro's Subsidiary Taiyo A&F: Japan's Domestic Tuna Production May Reach 10,000t Level

June 3, 2010

In the past three years newcomers to the domestic tuna aquaculture business emerged one after another; the number of business entities has now grown to more than 40. Taiyo A&F is a pioneer company in the field of aquaculture. Taiyo A&F Director Nobusuke Sawa was interviewed about the last year's business performance and the future prospect.

Q: Tell us about the last year's bluefin farming.

Sawa: We have been in this field for ten years; in a nutshell, it was the worst last year. We did make shipments as planned, however we failed to reach our target sales goal because prices crumbled. About 8,000 tons of domestically farmed tuna were yielded last year. Just because there were 1,000 or 2,000 tons more than the previous year, I wondered why the market had to topple in the way it did. Some producers just got their feet wet and made the first shipment last year. Newcomers don't have a well-established client base. Therefore they tried to make sales by lowering prices.

Lower Market Prices Ruin Sales Last Year

Sawa: Farmed bluefin of Taiyo A&F and our parent company Maruha Nichiro Suisan have well-cultivated client recognition due to our long experience in this business area and our fish are considered as a brand to some extent. Our clients do know the difference in quality. Nevertheless, when there is a huge price gap between cheaply priced bluefin and ours, it will end up ruining our profit.

When you want to aim at the year-end sales, you need begin adjusting shipment amounts from May or in the beginning of fall at the latest. Then you can make a decent amount of shipment at the end of the year. There are several advantageous occasions for the tuna business throughout the year, like the year-end sales and the Girl's Day season. We ship out a severalfold amount of tuna compared to ordinary business days at the end of the year. For an effort to accumulate a sufficient amount of fish, we ask for extra price markup of several dozen to several hundred yen. Manufactured goods can be easily stored, however there is a limitation of how much we can process a day when letting raw bluefin circulate.

Yet, we heard our clients' request to lower our prices a bit at the end of the year. That was because there was a prevailing concern over the future: if you don't sell as much as you can at the year-end sales, you don't know what the future holds.

Sushi restaurant chains and fish retailers procured domestically cultured tuna cheaper than past years, ending with a higher margin rate. I assume purchasing pries fell to the level of \2,000 from the \3,000 level. Retailers made some profits, but producers ended up struggling.

Juvenile Tuna (Yokowa) Prices May Not Increase This Year

Q: What about this year?

Sawa: Based on the current price condition, I don't believe any more newcomers are joining in this business. However, existing businesses are increasing production yields. Therefore, we project that the overall amount will increase to 10,000 tons from 8,000 tons of last year.

From July to August yokowa (juvenile tuna) fishing will be performed. Yokowa prices won't change, even if poor catches result. Considering what happened to the tuna retail prices, the honest truth is that anyone wants to lower yokowa introductory prices.

Taiyo A&F Director
Nobusuke Sawa

Q: The Fisheries Agency will start regulating Pacific tuna fisheries from 2011. How do you think this will affect the way you secure juveniles?

Sawa: That will not affect yokowa caught by coastal towing net fishing. But, some restrictions will be set for purse seine fisheries. Based on what the Agency said mid May, catching juveniles for farming by purse seiners will worsen an operation efficiency rate; in actuality, it will therefore end up working out well. I still don't know what will exactly take place; a problem with tonnage management arises, if fishing quotas must be given to juveniles captured by purse seiners.

Q: How about feed costs?

Sawa: It doesn't seem that feed costs will drop. That is because rising worldwide demand on fish converts more fish for exports. Compound feed "Tuna Feed," jointly patented by Hayashikane Sangyo and Maruha Nichiro Suisan, is partly used. Circumstances surrounding fish feed will remain changeable.

Q: Tell us about the influence of overseas ranched tuna.

Sawa: I don't think Mediterranean tuna ranch operations will greatly influence Japan's farmed tuna. But, I just heard that Mediterranean bluefin stopped for customs clearances have begun slowly moving. I am paying attention to it.
The production amount of overseas ranched tuna certainly will decrease from last year. There is only one fishing season this year; so, they may just end up catching half of planned amounts. In the past, they were able to capture more tuna than planned. But now that regulation is getting tougher and tougher, they will not be able to obtain more than regulated amounts this year.

Q: Tell us your outlook on the future of tuna farming.

Sawa: Brand power with the added distinct differentiation in quality is a key for survival. We struggled last year, but the overall economy is improving. I am convinced that we can therefore bring about favorable results this year. I believe in our clients who highly praise the quality of our products.

The original article was published on June 3, 2010 and was translated by Kiyo Hayasaka.

Seafood Imports for April Indicate 8% Increase to 251,700t

June 2, 2010

Based on foreign trade statistics (quick estimation) released by the Ministry of Finance, the total seafood import amount was 251,720 tons, up eight percent year over year. The average unit price contracted eight percent to \492/kg. The total import value remained similar to the previous year's figure, \123.9 billion.

The following remarkable increases were noted compared to the corresponding period last year: yellowfin tuna 18 percent, bonito 18 percent, cod roe 45 percent, octopus 123 percent, Japanese horse mackerel 22 percent, pollack surimi 90 percent, and prepared eel products (BBQ eel 75 percent). In contrast, bluefin tuna (77 percent), bigeye tuna (23 percent), salmon/trout (30 percent), and squid (12 percent) displayed declines.

Russian cod roe tripled its amount to 7,560 tons in comparison with the same period last year. An American kind, on the other hand, slumped 26 percent to 4,110 tons. Unit prices of roe from the two places both shrank 20 percent. American pollack surimi was 9,260 tons, a 68 percent rise. Its unit price dropped six percent, ending in \327/kg.

Frozen octopus, mainly from Morocco (up 173 percent to 2,800 tons) and Mauritania (seven-fold increase to 1,400 tons), increased. Its unit prices as a whole went up by eight percent. Japanese horse mackerel also grew, mostly coming from Britain (up 84 percent to 1,100 tons) and Holland (up 47 percent to 2,300 tons).

Chilean coho salmon tumbled 28 percent to 10,000 tons. Its unit price was \444, remaining unchanged from the last year. The amount of trout was slashed by half as a whole. Chilean trout totaled 4,000 tons, down 52 percent. Its unit price showed a 10 percent increase.

The original article was published on June 2, 2010 and was translated by Kiyo Hayasaka.

NSEC Promotes "Beautiful Skin by Salmon"

June 2, 2010

After a Norwegian seafood seminar hosted by the Norwegian Seafood Export Council (NSEC) and the Japan Fisheries Association (JFA) on May 28, a lunch reception took place.

Norwegian Ambassador to Japan Arne Walther gave a speech: "It was such a pleasure to be able to work with the JFA and also to see many experts here at the seminar." JFA Chairman Toshiro Shirasu followed by saying, "In order to reconstruct Japan's fishing industry, we are determined to boost fish consumption utilizing what we learned today at the seminar." He then gave a toast.

As a special guest a nutritionist Erica Angyal presented a short talk show as to the effect of Norwegian salmon on skin.

She maintained that "Omega 3 contained in fish oil has such health benefits" that she advices Miss Universe pageants consume salmon. She also introduced "Super Beauty Salmon Roll" made up of beneficial ingredients on skin and health - Norwegian salmon, brown rice, avocado, and sugar cane. Sample rolls were provided.

Picture 1: Erica Angyal

The original article was published on June 2, 2010 and was translated by Kiyo Hayasaka.

Maruha Nichiro's Fish Survey: "Cheap" Saury and "Expensive" Tuna

June 1, 2010

According to "Survey on Fish" conducted by Maruha Nichiro Holdings, consumers' view of fish when purchasing revealed they consider saury "the cheapest" and tuna "the most expensive." Fish varieties given a brand of "cheapness" are in the order of 1) saury, 2) salmon, 3) Japanese horse mackerel, 4) mackerel, 5) sardine, 6) flounder, 7) bonito, 8) amberjack (buri), and finally 9) tuna. Only 10 percent of people say tuna is actually "cheap." 63 percent think otherwise.

In terms of the way fish are cooked, 90 percent of saury and 84 percent of salmon are "broiled on a grill and skillet and/or in the oven." In contrast, tuna and bonito are mainly consumed raw; 92 percent of tuna and 88 percent of bonito are "enjoyed uncooked (sashimi, carpaccio, and marinated, including seared)." More flounder and mackerel are "boiled (with the flavors of ginger, miso, or salt)"; 65 percent of flounder and 38 percent of mackerel are cooked in such a way. Moreover, 12 percent of amberjack is cooked in the way called "Arani" (the leftover parts of fish, as head and bones, are boiled in soy sauce, for instance); Japanese horse mackerel at 13 percent is "fried."

Sardine receives the highest percentage of "fish consumers have never cooked before," at 16 percent. Contrarily, fish at less than one percentage point (0.2 percent) is salmon, proving that the fish is clearly relished on the dining table.

The most popular reference source of fish recipes is "cooking sites via cellular phone," more than 50 percent of the surveyed answered in this way. 80 percent seek to absorb DHA from fish. Though the awareness of astaxanthin is still low, over 10 percent of those residing in the Hokkaido and Tohoku areas recognize the component as what they wish to take in, exhibiting a much higher percentage compared with other areas of Japan. As for collagen, a tendency of "higher in the West and lower in the East*" is seen.

Over half of the surveyed want to see "seasonal fish" in their children's school lunches. There is a recent trend seen among magazine models who engage in agricultural activities and who are called "Nou-gal" and there are models, named "U-gal," who are promoting fish consumption. Between the two model groups, 70 percent of the surveyed show their recognition of "Nou-gal," as opposed to 30 percent given to "U-gal."

The survey was carried out during a period of April 30 through May 12, targeting females of 16-34 years old with children younger than elementary school. Out of this cluster, the survey focused on only those who answered that "they are the main cook in the house and prepare fish more than three times a week." The survey was conducted by way of the Internet (mobile research). Useful answers were received from 1,000 people.

* The West here means the western part of Japan, represented mainly by Osaka and its surrounding areas; and the East is the Tokyo metro area.

The original article was published on June 1, 2010 and was translated by Kiyo Hayasaka.

NSEC Holds Seminar on Norway: Theme of Consumer Perspective and Trend of Seafood

June 1, 2010

The Norwegian Seafood Export Council (NSEC) and the Japan Fisheries Association (JFA) held a Japan-Norway seafood seminar in Tokyo on May 28. Under the theme of consumer perspective and trend of seafood, experts discussed consumer needs and purchasing trends. Roughly 250 people, mainly of industry-related attendees, showed up.

This event began jointly hosted by the NSEC and the JFA back in 2003 and it was the 8th event this year. Following an opening speech by Norwegian Ambassador to Japan Arne Walther, JFA Chairman Toshiro Shirasu said, "Amid rising demand of marine foods on a global basis, it's regrettable to say the Japanese are progressively avoiding fish. I wish to somehow vanquish this current trend. Not to mention consumption boost in the domestic market, we should extend exports to the worldwide market. In that point, the giant seafood exporter, Norway, is making conscious efforts on every sector to broaden her markets through marketing and promotion, leading to fruitful results. Not excluding resource management, Japan ought to absorb wisdom and ingenuity of Norway."

Mr. Yagi Comments, "Once Unit Price Rises, There Is No Need to Catch More"

Nobuyuki Yagi, Special Associate Professor of Graduate School of Agricultural and Life Sciences, The Univ. of Tokyo, explained a correlation between stock management, eco-label, and fish price based on a research survey.

Using cases in Norway and New Zealand, he pointed out, "Once unit prices go up, there will be no need to catch plenty more of fish. Resources resultantly recover, giving rise to the preservation of the ecosystem. In the case of Japan, fishermen find themselves trapped in a vicious cycle of not being able to make a living unless they catch a large amount of fish due to a plunge in unit prices." Additionally, he shared the results of a survey how much consumers are willing to spend on eco-labeled products. In the instance of a package of salted salmon (two slices), "an eco-labeled product received the second highest evaluation result, following a domestic kind."

NSEC Japan Office Representative Hans Petter Nas presented "Fiskesprell" a project conducted in Norway to stimulate fish consumption.

In Norway, just like in Japan, there is a rising concern over a decline in seafood consumption. The five-year project (2007-2011) targeting kindergartens, elementary and junior high schools has been under way. The project consists of priority policies, such as dietary education using a textbook and a partial government subsidy to purchase marine foods.

Mr. Aoba Suggests "Need to Suggest Menu and Indicate Benefit"

Daisuke Aoba, Research Planner of Micromill, introduced a research method called "Mind-Mill" as a way to bring consumers' unconscious needs up to the surface. The method first involves the visualization of associated words as a map when consumers are given a key concept to think of associations with. Then, an attempt to untangle an association network toward a brand is carried out.

In fact, a research survey targeting 210 females, 20-59 years old, with a key concept "fish recipes" was done. Words associated with "mackerel" were mostly "misoni" (fish boiled in miso paste) and "nizakana" (just boiled fish). After "nizakana" a negative connotation tended to follow, such as "time-consuming." Mr. Aoba pinpointed, "[Based on the research results] in the case of mackerel, less-time-consuming recipes need be created."

He further commented, "A crucial point is what type of a brand image (an association network) you want the minds of consumers to formulate. First, proposing concrete menu suggestions by fish needs to be done. Then, it becomes essential to repeatedly convey what benefits those suggestions will bring to consumers in a simple manner."

Before the end of the seminar, Mr. Nas shared the NSEC's undertakings designed based on a consumer spending trend in Japan.

When it comes to mackerel, easily servable salted mackerel is mainly advocated. Convenient, healthy salted mackerel recipes are developed and put forward. Salmon in the forms of sashimi and sushi, popular among children, are proposed. Salmon's healthiness and anti-aging effect are called upon, aiming at a female demographic with strong interest in beauty.

Picture 1: Mr. Nas speaking
Picture 2: Panel discussion was held, as well.

The original article was published on June 1, 2010 and was translated by Kiyo Hayasaka.

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