« April 2008 Table of Contents
One on One: Junichiro Yoneoka
President, Maruha Capital Investment, Seattle
By Steven Hedlund
April 01, 2008
"We are always interestsed in growing our business. Most likey we will be looking for prospective companies and brands that will position us closer to our customers and the market."
Japanese seafood heavyweights Maruha Group and Nichiro Corp. shook the seafood world in late 2006 when they announced plans to merge. The transaction was completed less than a year later, forming Maruha Nichiro Holdings, by far the world's largest seafood company, with annual sales of about $8 billion. The deal included eight Pacific Northwest seafood companies: Westward Seafoods, Supreme Alaska Seafoods, Alyeska Seafoods, Premier Pacific Seafoods, Peter Pan Seafoods and Golden Alaska Seafoods, all of Seattle; Orca Bay Seafoods of Renton, Wash.; and Trans-Ocean Products of Bellingham, Wash.
At the helm of Maruha Nichiro's U.S. operations is Junichiro Yoneoka, president of Maruha Capital Investment in Seattle. Yoneoka's 30-year tenure with Maruha Group has brought him from Tokyo to London in 1985 and back to Tokyo in 1990. He moved to Seattle in 2005.
Yoneoka is cautiously optimistic about the future of the company and the global seafood market overall. Maruha Nichiro expects its sales to reach $ 10 billion worldwide by 2011. About three-quarters of the company's products are marine-based.
I sat down with Yoneoka during the International Boston Seafood Show, which he attended for the first time, to chat about the merger and the challenges that Maruha Nichiro and the industry face in 2008.
HEDLUND: Why did Maruha Group and Nichiro Corp. merge?
YONEOKA: Both companies recognized the opportunity to create a larger and more efficient entity. Our goal is to become the leader in the industry. We expect great synergy by combining both companies' strengths. Maruha 's strength is sourcing and marketing. Nichiro's strength is research, development and marketing of value-added products.
How does the merger affect Maruha Nichiro's U.S. operations?
Operationally, the combination of Peter Pan and Westward is a good fit. Both occupy significantly different product niches. Peter Pan is largely a salmon company. Westward, on the other hand, is primarily a whitefish producer. None of our plants are located in the same area so we have no need to downsize. We expect to compete more effectively for raw material in Alaska and, in particular, offer a more diverse sales-and-marketing strategy to the U.S. market.
What's the biggest challenge Maruha Nichiro faces in 2008?
The continued managing of the global consolidation of companies. The merging of two distinct business cultures will produce a partnership that builds on the unique qualities of both Maruha and Nichiro. Our North America group will also focus on directing the merger of Maruha and Nichiro with regards to our Alaska operations. Managing through the reduction in the pollock quota in 2008 will be one of the year's biggest challenges. But we believe that from challenges arise opportunities.
Alaska's Bering Sea pollock quota was cut 28 percent to 1 million metric tons. What will the effect be on Maruha Nichiro and the global whitefish market?
Even though the quota reduction will certainly affect our bottom line, we firmly believe in sustainability. Well-managed fisheries have upward and downward cycles, and Alaska's sustainable fisheries practices will ensure the resources will be available for future generations. T he drastic quota cut will require us to operate more efficiently and increase pricing. The demand for whitefish globally will be stronger due to the quota cut.
How are rising fuel prices affecting Maruha Nichiro's bottom line?
Fuel costs have affected every company worldwide and their bottom lines. Both our Alaska operating and freight costs are up significantly. Fuel costs are hitting the fishing fleet especially hard. Westward and Alyeska are doing their part in reducing their dependency on petroleum-based fuels by burning fish oil, a byproduct produced at their plants. They are producing their own bio-fuels, which reduce costs and are better for the environment.
What is Maruha Nichiro doing to ensure its seafood comes from sustainable resources?
Sustainability is becoming very important in the United States and worldwide. It is good to see that the important message of sustainability is reaching the consumer. Alaska is a leader in sustainable fisheries and has many species that are now Marine Stewardship Council certified.
What is Maruha Nichiro doing to ensure the safety of its seafood?
One of our most important goals is to ensure food safety , and we aim to become the most reliable company in the industry by achieving more traceability and quality control. At Maruha Nichiro, safety initiatives are in place throughout our worldwide system to ensure food safety and quality.
In January, Trans-Ocean Products launched its first national advertising campaign. Will the merger allow Maruha Nichiro's U.S. operations to invest more in marketing?
Trans-Ocean launched its marketing campaign for two reasons: The first is to help Trans-Ocean sell more product and improve its position in the surimi seafood category. The second is to support Trans-Ocean's retail customers and help drive consumers, particularly new consumers, to the seafood department. Surimi seafood is a healthy and affordable seafood choice. Trans-Ocean is attempting to educate consumers about the benefits of surimi seafood. We are investing more capital and manpower into marketing in the United States to build our groups' brands.
Is Maruha Nichiro looking to expand its U.S. presence?
We are always interested in growing our business. Most likely we will be looking for prospective companies and brands that will position us closer to our customers and the market.
Do you expect continued consolidation within the global seafood industry?
More than likely, as the seafood industry continues to mature worldwide and the marketplace becomes ever more global, we can expect firms to consolidate for cost efficiency and better market penetration. More and more seafood products are becoming of a commodity nature, and, as in the U.S. agriculture industry in the past 50 years, consolidation is a common method to achieve better cost control and product development.
Are you optimistic about Maruha Nichiro's future?
We are cautiously optimistic. The health benefits of seafood are unquestionable, and our conservative science-based resource management in Alaska guarantees a sustainable future. Maruha Nichiro has been investing in the future of the seafood industry since [Maruha was founded in] 1880.
Associate Editor Steven Hedlund can be e-mailed at firstname.lastname@example.org