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Maruha Nichiro establishes a group of wholesalers
(Some 100 wholesalers that distributes Maruha Nichiro products, led by Maruha Nichiro, formed a trade group today)

April 18, 2008

“Maruha Nichiro Gyoei-kai,” an association (chairperson: Mr. Ichio Iwase, CEO of Yokohama Maruuo Co., Ltd.) that has links with Maruha Nichiro Seafoods, was inaugurated on April 17, and 100 senior managers from the main wholesale companies in the Kanto area attended the ceremony. The main points of an address made by Mr. Shigeru Ito, CEO of Maruha Nichiro Seafoods, were as follows.

“Top Share in the Majority of Fish Species Markets” Says Shigero Ito, CEO of Maruha Nichiro Seafoods

Maruha Nichiro Seafoods started with a management division and seven departments. Seven branch offices form the sales department and we employ a total of 460 people including employees overseas. In one year, we handle approximately 310,000 tons in quantity, which on a value basis is about 220 billion yen. The company has the top share in Japan in the markets for most fish species. We plan to optimize the supply and selling of seafood products on a global scale.
We aim to establish Maruha Nichiro Seafoods as the top trader abroad, as the top supplier in Japan, and as the foremost producer of seafood products in the world.
The following are five elements of the specific strategy toward that end. 1. Strengthen our procurement ability. 2. Expand our offering of foreign processed products 3. Reinforce our marketing capabilities in the domestic market. 4. Reinforce our marketing capabilities in markets overseas. 5. Tighten our quality control systems even more.

Seafood Indispensable Just as Energy Resources Are

On the subject of reinforcing marketing capability in the Japanese market, a review of the value of fish is required. While the volume of seafood imports in the last fiscal year, which totaled 2.37 million tons, was 24% (750,000 tons) less than the volume of five years ago, the decrease in value terms for the same period was confined to 9.6%.

Despite the fact that fish prices are rising worldwide due to trends such as increasing health-consciousness in America and Europe, and the development of the Chinese economy, the fact that the Japanese market, which has the final word on retail prices, isn’t responding to the fair prices is causing other markets to operate independently of Japan.

Those of us who make a living from seafood have to take this situation seriously. Seafood needs to be regarded as being in the same category as energy resources such as oil. Don’t we need to show our worth and role and properly secure the seafood needed by the Japanese people?

Adopting a Business Model Based on the Maxim “from Quantity to Quality”

At the same time, we must contribute to the improvement of the value of seafood in our own country (Japan.) To survive, the wholesale companies must build a business model that shifts the emphasis “from quantity to quality” and center this business model on domestically-caught fish including fresh fish. The wholesale companies are coming under pressure to review their fish price measures.

There is no question as to the importance of strengthening the Gyoei-kai relationship. No matter what it takes, a “prosperous coexistence,” a “win-win” relationship linking strong companies must be built. A working-level organization to support that goal needs to be set up, and the substance of the organization needs to be enhanced. While continuing to learn from each other through friendly rivalry, I hope we can forge a strong relationship.

Today, the world’s fishery production is 90 billion tons, and the production of aquaculture is 70 billion tons. In fishery production in particular, resources of all fish species are strictly managed and as it is difficult to imagine that fishery production will increase in the future given international fishery regulations, seafood has become an increasingly precious commodity.

Maruha and Nichiro have played a predominant role in the supply of fish and shellfish to the companies in the Gyoei-kai. Today, although we are no longer able to supply as we did in the past, we are confident that compared to other companies, we are robustly fulfilling that role for all of you.

As you are probably aware, for a few years now, Maruha and Nichiro have actively invested in access to the resources to strengthen our seafood procurement capability. The former Maruha took a stake in the pollack factory vessel, the Ocean Phoenix to strengthen its pollack business. In Japan, it invested in a large overseas purse seine fishing vessel of a Maruha Group company. It acquired a Malaysian shrimp-farming company, Agrobest and took a stake in the biggest amberjack farming company, Sakurajima Yogyo. It is planning to invest in a single purse seine vessel/s in the future.

Last year, the former Nichiro took a stake in Patagonia Salmon, a salmon-farming business in Chile.

Observing this policy of the new company, we will unwaveringly fulfill the role of stably supplying to everybody in the Gyoei-kai.

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