Nippon Suisan Kaisha, Limited

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Nippon Suisan Kaisha, Limited

262 Otemachi
Tokyo 100
(03) 2447000

Public Company
Incorporated: 1911 as Fishery Department of Tamura Kisen Company
Employees: 3,772
Sales: ¥481.1 billion (US$3.85 billion
Stock Index: Tokyo Osaka Nagoya

Japan, home of the worlds largest fishing industry, is also the home of Nippon Suisan Kaisha (Nissui), the harvester of Japansand the worldslargest fishing haul. Nissui procures fish not only from Japanese waters but from worldwide deep-sea trawling operations and fish farming. The company describes itself as a vertically integrated marine-based food company, but it also produces, processes, and markets agricultural and livestock products and has developed a line of pharmaceuticals. But unlike Taiyo Fishery, its chief competitor, Nissui seems content to remain primarily a fishing company.

The warm, dark-blue Japan Current runs through cold, pale Pacific waters along Japans southern and eastern coastlines. Teeming with marine life, the current has always been a major nutritional source for coastal residents. Shoreline farmers who found it difficult to eke out a living from the rocky soil became fishermen, selling their fish further and further inland. But, as individuals, they were limited in the size of the boats they could manage and the size of the nets they could cast. It was not until the early 20th century that improved technology and communications enabled them to work together to begin making the fishing industry a significant part of the Japanese economy.

The first substantial step was taken in May, 1911, when the Tamura Kisan Company established its fishery department. But in August, 1914, Japan entered World War I, declaring war on Germany. Concentration of the nations resources on the war effort helped raise Japans status, as one of the victors, to that of a world power, but domestic industries made little progress during the war years.

Renamed Kyodo Gyogyo Kaisha, Limited, the young fishery department made a fresh start in 1919. The success of its operations during the following ten years sparked a bolder venture. On April 6, 1929, the company sent a trawler far beyond Japanese waters to begin fishing operations in the Bering Sea. Six years later, another trawler was sent to Mexicos Gulf of California to begin shrimp fishing, and still another to fish in Argentine waters. By 1937, the company, renamed Nippon Suisan Kaisha, Limited, was the largest company in Japan conducting trawler and factory-ship operations. On factory ships, marine products are processed and canned or packaged right on the ship and then transported directly to distribution centers to be sent to markets worldwide. But Nissui distributes most of its fresh seafood to large coldchain wholesale stores with vast refrigeration facilities to be sold in local markets.

In 1938, Nissui launched what was at the time the largest trawler in the world: the 980-ton Suruga Maru. But the waters of the Pacific were already churning with Japanese naval maneuvers in preparation for a massive war effort. To an even greater degree than World War I, World War II devastated domestic businesses, particularly fisheries, whose operations depended on venturing beyond the nations borders. After Japans defeat, the fisheries lost valuable island bases on four small islands in the Kurile chain north of Hokkaido, whose waters had afforded particularly rich harvests. (Although the waters were technically accessible to Japanese fishing boats, they found the new ownersthe Sovietsless than hospitable.)

During nearly seven years of occupation by the Allied forces, profound changes were made in the structure of Japans government, economy, and businesses. Free enterprise with firm government controls, plus some financial help from the United States, helped many struggling businessesincluding Nissuigain or regain a substantial portion of their markets. By the time the Treaty of San Francisco and the United States-Japan Security Treaty were signed in April, 1952, ending the occupation, Nissui was ready to resume fishing operations in the northern seas. Along with the rapid recovery of the Japanese economy, the fishing industry boomed, and by the end of the decade Nissui had extended trawling operations along the coasts of Africa, Australia, and New Zealand.

The largest trawler built in Japan in 1960 was Nissuis, at 2,500 tons. The company continued to build larger and larger vessels; by 1970 a 5,000-ton trawler and 21,700-ton factory ship had been added to Nissuis fleet. In 1967, the company began trawling operations off the east coast of North America.

The first outpost Nissui built after World War II was in Las Palmas, on the Canary Islands, off the west coast of Africa in 1962. During the following ten years, two more were set up, in Halifax, on the east coast of Canada, and in Seattle, on the west coast of the United States.

In order to broaden the companys line of marine products and reach new markets, Nissui began to enter into joint ventures with companies in foreign countries during the 1970sthe first four were in Indonesia, Spain, Chile, and Argentina. These joint ventures, cooperatives, and overseas trawling operations have added a variety of seafoods from remote waters to the extensive array Nissui harvests in Japans coastal waters. Nissui also cultivates large fish farms, oyster beds, and edible seaweed in Japanese waters. Seaweed has gained in importance with the growth in popularity of health foods and natural foods during the 1970s and 1980s.

Krill refers to several varieties of small sea creatures that Nissui, like other fisheries, catches in northern waters. Antarctic krill is a tiny variety of shrimp that is rich in protein and easily harvested. Though too bland to appeal to humans, it is highly marketable when harvested and processed into feed for livestock, poultry, and farmed fish.

In 1974, Nissui began sending large trawlers to the Antarctic seas to fish for krill. At that time, the market for krill was undeveloped because of the high cost of transporting krill from Antarctica. During the next decade, many companies tried fishing for krill, but most were unable to make it cost-effective. The problem was particularly acute during and after the OPEC oil embargo of 1973. But Nissui is one of the few fisheries other than Soviet fisheries to persevere and succeed in making money from krill.

In 1976 an international agreement extended the jurisdiction of each coastal nation by 200 miles into its bordering waters. Nissui, like other fisheries that routinely ventured into foreign waters, had to make major changes in the conduct of its business. One solution was to concentrate more on fishing on the open sea. Another was a quota system negotiated by the Japanese government with nations whose waters Japanese fishermen wanted to enter. Still another solution was to purchase seafood from the foreign fisheries entitled to fish within the 200-mile limit. Nissui has done all these, and also has entered into new business relationships with companies overseas, forming a number of new joint ventures.

In 1985 Nissui established a subsidiary in the United States called Great Land Seafoods, Inc. Based in Redmond, Washington, Great Lands manufactures and markets a crab-flavored fish paste.

The following year, the company added another vertical dimension to its operation when it launched a chain of restaurants in Japan; it also launched a state-of-the-art mother ship for the production of surimi (fish paste).

Since the days of Nissuis post-World War I fresh start, the company has conducted a continuous research program. When it was established in 1920, it was Japans first private-sector research institution devoted to the study of marine life. In 1987, Nissuis Central Research Laboratory added a new department; the Fine Chemical and Biotechnology Division. Two examples of health foods developed as a result of this research are taurine, an amino acid, and EPA, an unsaturated fatty acid. The pharmaceutical product EPA-E was developed by Nissuis researchers in conjunction with Mochida Pharmaceutical Company, Limited.

Two more joint ventures were started in 1987: A&N Foods Company in Thailand and Dongil Frozen Foods Company in Korea.

Despite its relatively undiversified operations in a rapidly changing industry, Nissuis financial structure is quite solid. Streamlining its fishing operations and taking advantage of the growth of the frozen-food business has kept Nissuis profits at a healthy level; although seafood sales offer a low profit margin, those sales continue to increase. In the future, Nissui will have to face the challenge of growing environmental concerns about the fishing industry and adapt to the new legal restrictions the industry is beginning to face.

Principal Subsidiaries

P.T. West Irian Fishing Industries (Indonesia); P.T. Irian Marine Product Development (Indonesia); New Guinea Marine Products Pty., Ltd., (New Guinea); Empresa de Desarrollo Pesquero de Chile, Ltda., (Chile); Explotacion Pesquera de la Patagonia S.A. (Argentina); Nippon Suisan (U.S.A.), Inc.; Nippon Suisan (Halifax), Ltd. (Canada); Nippon Suisan (Singapore) Pte., Ltd.; UniSea, Inc. (U.S.A.); UniSea Foods, Inc. (U.S.A.); Dutch Harbor Seafood, Ltd., (U.S.A.); Great Land Seafoods, Ltd. (U.S.A.); Intersea Fisheries, Ltd. (U.S.A.); Northern Deep Sea Fishers, Inc. (U.S.A.); Ocean Products, Inc. (U.S.A.); Bangkok Shrimp Cultivation Co., Ltd. (Thailand); K. K. Hosui; Nissui Shipping Corporation; Wakamatsu Zosen K.K.; Nagasaki Zosen K. K.; Tobata Unyu Seikan K. K.; Fuji Seikan K. K.; Sapporo Hinomaru Reizo K. K.; Hakodate Teion Reizo K.K.; K. K. Hachitei; Sendai Hinomaru Reizo K. K.; Tobu Reizo Shokuhin K. K.; Kinki Reizo Shokuhin K.K.; Kita-Kyusha Reizo Shokushin K. K.; Seibu Reizo Shokuhin K. K.; Nippon Shokohin K. K.: Hokkaido Teion Shokoshin K.K.; Mogami Kanzume K. K.; K. K. Chilledy; Kyowa Protein K. K.; K. K. Nishisho; Nippo Sangyo K. K.; K. K. Tosuko; Seafood-Now Inc.; Kyowa Yushi Kogyo K. K.; Nissui Pharmaceutical Co., Ltd.; Nippon Marine Enterprises, Ltd.; Nissui Engineering K. K.; A&N Foods Co., Ltd. (Thailand); Dongil Frozen Foods Co., Ltd. (Korea).