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Maruhanichiro HD Announces the First Year Sales of 844.7 Billion Yen

May 13, 2008

The merger between Maruha and Nichiro raised sales volume and operating profit in the business year ending in March. However, both the new company’s ordinary profit and net income significantly dropped.

Maruhanichiro’s sales profit amounted to 844.7 billion yen, up by 14.5%; operating profit increased to 13 billion yen, up by 7.1%; ordinary profit decreased to 7.316 billion yen, down by 34.0%; and the net revenue decreased to 60 million yen down, by 96.1%. Despite aggressive growth strategies and measures, the company fell short of their original estimate. It was the final year of the three-year-plan named “New wave 21.”

Manruhanichiro projects overall volume of sales this year to reach 930 billion yen; 19 billion yen for operating profit; 14 billion yen for ordinary profit; and 2.5 billion yen for net income.

Seafood Division Had Fierce Competition Overseas

The seafood division enjoyed a 5.0% growth in total sales, amounting to 584.1 billion yen and an operating profit of 8.581 billion, up by 10.8%, as a result of steady performance from the fishery market and aquaculture industry market. Despite these gains, inefficient operation of fisheries, rising fuel costs, and a slumping domestic market caused declines in business profit in Northern America. The fishery division in this region faced declines in sales profit of shrimp, salmon, and trout in particular, resulting from fierce purchasing competition.

The consignment division remained unchanged from the previous year after aiming at efficient business operation. The division of marketing strategy suffered profit losses due to rising costs of processed materials, such as tuna. The company acquired capital in Sakurajima fish farm in Kagoshima pref. and a shrimp farm in Malaysia in order to strengthen its access to resources. Taiyo A&F provided large seine boats.

The processed food division gained 235.5 billion yen in sales profit, up by 48.5%, and 6.238 billion yen in operating profit, up by 20.4%. Though the business merger created an expansion of commercial frozen products, the Tenyo Food’s incident caused a considerable decline in sales of Chinese frozen products. Despite rising costs of main and auxiliary materials, such as crude oil and grains, the merger resulted in an increase in sales and profit of this division.

The storage and distribution division experienced losses both in sales profit and operating margin: 14 billion yen, down by 3.2%, and 1.095 billion yen, down by 28.5% respectively. Clients’ diminishing demand for this service caused profit loss from storage fees. Moreover, a revision of the taxation system increased the burden of depreciation.

Kibun Foods Increases Prices by 15% in July

May 13, 2008

Kibun Foods will implement revisions to increase prices and alter quantities of individual packages of some of their products (110 items) on July 14th, 2008, as a result of rising cost of raw materials. The average percentage of price raise is 15%.

The company said that restrictions on fish catches and an increasing health consciousness in the Western societies, have affected the balance between supply and demand, triggering price increases in fish surimi, a main ingredient in some products. Moreover, costs of such grains as wheat and soybeans have risen dramatically. In February, the company implemented revisions of product standards. Despite this move, costs of main and auxiliary materials, packaging materials, energy cost, and distribution expenses continue to rise drastically. According to the company, Kibun Foods has been resilient in dealing with these changes; however the effort to maintain balance in product quality and consumer price, still proves extremely difficult given market issues. The company resultantly was forced to implement the said srevisions.

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