Taiyo Fishery Company, Limited

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Taiyo Fishery Company, Limited

112, Otemachi
Tokyo 100
(3) 2160821

Public Company
1943 as Nishi Taiyo Gyogyo Tosei K. K.
Employees: 3,296
Sales: ¥1.05 trillion (US$8.44 billion)
Stock Index: Tokyo Nagoya Osaka

Although the Taiyo Fishery Company has achieved prominence as Japans second-largest fishery, combined sales of fish and shellfish account for only about 60% of Taiyos sales. An aggressive new management is steering the companys course toward a future as a giant food conglomerate. The idea of diversification is not new to the Taiyo, however; already the range of its products and services include real estate warehousing, cosmetic ingredients, pharmaceuticals, mink, and pearls.

Taiyos history goes back to the late 19th century. Ikujiro Nakabe and his father founded Hayashi Kane Shoten in 1880. The business prospered, and they operated markets in several locations. By 1913, the family business had its main store and headquarters in the western port city of Shimonoseki.

By that time the business had survived two wars: Japan had fought China from 1894 to 1895, gaining Taiwan; Russia ten years later, gaining additional territory; and had also annexed Korea in 1910. Fishing boats were venturing farther and farther into Pacific waters. As Japan entered World War I in 1914, the nation was becoming a major sea power; it eventually ousted Germany from its islands in the Pacific, as well as from Shantung.

With the freedom to operate large trawlers in many rich Pacific seabeds, the company grew rapidly during the postwar years. In 1924, the company went public, establishing three corporations: Hayashikane Shoten K.K., Hayashikane Gyogyo K.K., and Hayashikane Reizo K.K., the latter two to process and can foods. However, the corporate structure did not work out as planned. By the following year, the companies were reorganized and a new corporation was formed: Hayashikane Shoten K.K., with ¥10 million in capital. With Ikujiro Nakabe as president, the company began another period of rapid growth.

During the late 1920s and the 1930s, Taiyo expanded into deep-sea operations in the North and South Pacific and developed processing, canning, and packaging technology onshore.

In the 1940s, however, as Japanese losses began to mount in World War II, the domestic economy was shattered. The destruction of Taiyos physical resources and the depletion of its workforce were severe blows. As major fishing areas had to be abandoned, the companys operations shrank to the point of requiring another reorganization. In the thick of the war, in 1943, the company became a new corporation: Nishi Taiyo Gyogyo Tosei K.K. This name was changed in 1945 to Taiyo Gyogyo K.K., and for the first time the company was referred to as Taiyo Fishery Company, Limited.

Kaneichi Nakabe became president, launching a new period of rapid growth that is now in its fifth decade. In 1949, Taiyos headquarters was moved to Tokyo, where it remains. From that base of operations, the company carried out a plan to extend its fisheries around the world, using new technology to more fully exploit the waters it fishes.

Mother-ship operations on large trawlers in the Bering Sea, for example, began to carry the equipment to make extensive catches of Alaska pollack and immediately process it into surimi (fish paste), fish meal, and fish oil ready for marketing.

Other trawlers were sent into the South Pacific for merluza, king clip, squid, and Antarctic krill. Because of the distance to Antarctic waters, however, costs cut deeply into profit margins for such expeditions. Operations such as pair trawling in the West China Sea for pomfret, frostfish, and prawns, and salmon fishing in the northern waters of the Pacific were more cost-effective ventures.

In the early 1950s Taiyo used both experimental and traditional fishing methods as it expanded its operations. Surface fishing with purse seines was used to catch tuna, a major product worldwide, and skipjack, a staple of the Japanese diet. And longline fishing for tuna continued to be profitable, with lines extended as much as 140 kilometers into the open sea.

Also in the 1950s, Taiyo began to form international joint ventures, particularly in developing countries, to explore new resources, introduce new technology, and broaden the range of food products it could bring to the market. For example, the joint venture that Taiyo established in the Solomon Islands, sends canned fish to Europe and frozen fish to the United Statesand makes up some 40% of the Islands business. Several joint ventures have been established in the United States as well: Alyeska Seafoods Company, to produce surimi; Trans Ocean Products, to produce crab-flavored fish sticks; and Western Alaska Fisheries, to process herring, sable, flounder, salmon, and roe. In 1985, the China Zhouyang Fishery Company, Limited was formed in the Peoples Republic of ChinaTaiyos 25th joint venture.

Even as early as the late 1950s, the market for seafood showed signs of outdistancing Taiyos ability to supply it, despite its newly developed resources, and Taiyo began to cultivate a new source that could be continually replenished: fish farming. The research-and-development functions that had been a part of the companys operation since the 1920s took on new importance as aquaculture techniques were developed to farm sea bream, yellowtail flounder, and prawns. By 1985, Taiyo was reputed to be the foremost harvester of cultivated fish in the world, producing 10% of the companys total annual catch through fish farms in 20 locations in Japanese waters.

But even these efforts have not been enough to meet the demand for seafood products. During the past three decades, Taiyo has built up an extensive international network of import operations, bringing seafood from European, African, North Atlantic, and Far Eastern waters to its markets and distribution centers.

Developing new and more efficient methods of maintaining the freshness of its products and speeding them to market has been an important part of Taiyos function since the first big market expansion of the postWorld War I days. Thirteen Taiyo companies operate refrigeration and cold storage facilities, and another ten operate refrigerator ships, oil tankers, and overland shipping vehicles. Automated equipment pioneered in the 1960s and 1970s now contributes to the year-round efficiency of Taiyos advanced-design pelagic trawlers.

Taiyo began to share this expertise with companies in other countries in 1971, when its companys plant engineers built a cold-storage facility in Kenya, the first of many projects that have created fishing bases, food-processing plants, and factories in Africa, South America, Asia, and the South Pacific islands. The company operates a business consultant service in connection with these projects.

Packaging is another important Taiyo function. Aluminum cans were virtually unknown in Japan when Taiyo introduced them, but they quickly became popular in the late 1940s. Similarly, Taiyos research-and-development personnel have come up with efficient designs in paper and plastic packaging for freeze-dried and frozen foods, gelatin, and natural seasonings.

Taiyo has diversified over the years from the fishing industry, and the company now includes such diverse entities as agricultural and stock-breeding companies, mink farms and furriers, pearl cultivation centers, real estate warehousing operations, and even a baseball team.

But it is in the area of food products that Taiyo has steadily sought expansion. Western-style and Asian fruits and vegetables were added to their wares decades ago, as was sugar in 1965. Health foods and natural seasonings were added during the 1970s and 1980s. A new margarine, made with sardine oil, was introduced in 1984.

Taiyo built a large plant in Tochigi Prefecture in 1985 to develop new food products and pharmaceuticals. That same year one of its first projects was completed: an advanced canning process for fish-meat sausages. Within two years, Taiyo had also developed a drug to combat arteriosclerosis.

As pressures from environmentalists and new legal restrictions place limits on large-scale fishing operations in waters where Taiyos fleets have been active, onshore and coastal businesses have been given greater emphasis in the companys plans. Taiyo will have to meet the challenges of the rapidly changing fishing industry at the same time that it pursues new opportunities in the food industry if its progress toward a future as a good conglomerate is to be steady, but given Taiyos steady attention to diversification in the past, its prospects look strong.

Principal Subsidiaries

Taiyo Fishery Co., Ltd., Seattle, Washington, (U.S.A.); Taiyo Fishery Co., Ltd., New Jersey (U.S.A.); Taiyo Fishery Co., Ltd. (U.K.); Taiyo Fishery Co., Ltd.. (New Zealand); Taiyo Fishery Co., Ltd. (China); Taiyo Fishery Co., Ltd. (Singapore); Western Alaska Fisheries, Inc. (U.S.A.); Taiyo (U.S.A.) Inc.; Alyeska Seafoods Co., Ltd. (U.S.A.); Trans Ocean Products, Inc., (U.S.A); Sociedad Pesquena Taiyo Chile Ltda. (Chile); Reefer Express Lines Pty. Ltd. (Bermuda); Taiyo (U.K.) Ltd.; Iberia Taiyo S.A. (Spain); Solomon Taiyo Ltd. (Solomon); Amaltal Taiyo Fishery Co., Ltd. (New Zealand); P.T. Nusantara Fishery (Indonesia); China Zhouyang Fishery Co. Ltd. (China); Taiyo Gyogyo Co. (Hong Kong) Ltd., (Hong Kong); Bengal Fisheries Ltd. (Bangladesh); Societe Malgache de Pecherie (Madagascar) Malagasy; Societe des Pecheries du Boina (Madagascar); Efripel (Mozambique); Senepesca (Senegal); New Eastern Ltd. (Liberia).