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Nichirei will focus on the revival of the Processed Foods business in the first half of the period

COMPANY OF THE WEEK: Nichirei Announces New Medium-Term Business Plan

  (JAPAN, 5/21/2010)

Nichirei Corporation (Public, TYO:2871) has announced a summary of consolidated financial report for the Financial Year ended March 31, 2010 and a new medium-term business plan for the period 2010-2011.

The new medium-term business plan for the Nichirei Group will be executed over the period from fiscal 2010 through fiscal 2012. The Company has named the plan “Energy 2012,” symbolizing its commitment to meeting stakeholder expectations by managing its operations based on the energy of its employees and confidently executing the plan to achieve sustainable growth and its visions for the future.
Review of the Previous Medium-Term Business Plan (Fiscal 2007-2009)
In its previous medium-term business plan, Nichirei focused on more aggressive business growth and new challenges by taking advantage of its improved financial situation. Under this plan, the Company sought to expand its profit base by allocating cash flow generated from its operating activities to investments in growth fields.
The Company expects that the significant capital investments it has made – including the construction of a chicken processing plant in the Processed Food business and the rebuilding of refrigerated warehouses and distribution centers in the Logistics business – will steadily contribute to the Company’s earnings from the current fiscal year onward. The Marine Products business has also returned to profitability, thanks to a successful revitalization plan.
Despite the above initiatives and the progress made during the period of the previous medium-term business plan, the Company was affected by the severe changes in the business environment, which included slowing demand, declining prices, and fluctuating exchange rates, stemming from the global economic downturn that began in the fall of 2008, in addition to the surge in prices of raw materials that far exceeded any expectations. As a result, primarily reflecting the severe business environment in the Processed Food business, the Company failed to achieve the numerical goals set out in the plan.
As a result of the severe business environment in the Processed Food business, the Company failed to achieve the numerical goals set out in the previous plan 
Summary of New Medium-Term Business Plan (Fiscal 2010-2012)
During the period of the new medium-term business plan, the business environment is expected to remain severe. In response, Nichirei has adopted a basic concept of achieving sustainable earnings growth by reviewing the current business situation, while steadily pursuing its business strategies and responding promptly to changes in the operating environment. The Company will, in particular, focus on the revival of the Processed Foods business in the first half of the period of the plan. In the second half of the period, it will seek to steadily capture profits from capital investments made under the previous medium-term business plan, and will take steps such as developing overseas markets, to ensure that it retains the leading position in each business.
Group Strategies
  • Bolster earnings capacity, and achieve sustainable growth by effectively allocating management resources.
  • Facilitate the sustainable growth of the core operating companies by identifying and capturing growth opportunities.
  • Obtain the trust of society by providing valuable food safety and reliability
  • Strengthen the source of the Group’s competitiveness by further improving the management quality.
  • Strengthen the Group’s abilities to collect and analyze new technologies to create new business models that will ensure sustainable growth.
  •  Examine the possibility of acquiring treasury stock as part of a capital policy.
  • Redevelop the retirement benefit system.
Strategies for Operating Companies
Nichirei Corporation's Business Segments
Processed Foods (Nichirei Foods Inc.)
  • In addition to the existing production structure of processed chicken products, develop a new structure for stable supply in terms of quality, price and quantity through the new plant in Thailand, and establish a dominant position in the industry.
  • Ensure category-leading positions are maintained in mainstay products, such as rice, processed meat products, spring rolls, and croquettes by taking advantage of the Group’s ability to procure high quality materials and introduce attractive products.
  • In processed agricultural products, focus on competitive products and develop new products through new technologies.
  • In addition to operations in China, develop operations in the global market through production bases in Thailand and Brazil.
  • In health-value products, improve the earnings base by streamlining current operations in view of efficiency, while focusing on health support services for seniors.
  • Bolster sales of the acerola raw material business in overseas markets, especially Europe, aiming to achieve a global market share of 40 percent.
  • Continue with cost cutting.

Nichirei Logistics offers a range of services including freezing, thawing and processing

  Marine Products and Meat & Poultry Products (Nichirei Fresh Inc.)
  • Promptly respond to customer requirements through the renewed sales structure, and strengthen product development with a focus on the quality required by the market.
  • Bolster sales in the home meal replacement market by strengthening the development of highly processed products. (Marine Products)
  • Bolster the upstream business field of quality ingredients. (Meat & Poultry Products)
  • Strengthen overseas sales, mainly in emerging countries, and improve the global quality assurance capability.
  • Restructure overseas bases in line with changes in the procurement routes of resources.
  • Hub-to-hub transportation
    Use the establishment of the Higashi Ogishima Logistics Center, a large new base in Kawasaki City, and existing facilities, to attract new customers and expand the customer base. (Regional Storage)
  • Continue to develop a local transportation business, and help customers expand their operations nationwide. (Regional Storage)
  • Improve price competitiveness by using vehicles efficiently and reviewing the procurement base. (Logistics Network)
  • Also expand operations in both the chilled and room temperature sectors, which are highly desired by customers. (Logistics Network)
  • In the European business, enhance the functions of the local holding company, effectively use the logistics company that has obtained a license in France, and expand the customer base of the new center in Poland.
  • In the Chinese business, seek to set up a second center at the earliest opportunity.

NLG subsidiaries are Logistics Network Inc., Shangai Fresh Line Express Co., Ltd. and Eurofrigo B.V.Thermotraffic GmbH, Eurofrigo Venlo B.V., HIWA Rotterdam Port Cold Stores and Frigo Logistics Sp. zo.o. its shareholders.

Real Estate (Nichirei)
  • In preparation for the end of lease contracts for principal properties in 2011, collaborate with Group companies in boosting Group earnings by effectively using the sites of closed operating bases and other facilities.
Bioscience business (Nichirei Biosciences Inc.)
  • Bolster sales of mainstay culture media products, and build an installment sales model for products in the immunohistochemical stain business.
  • Continue to develop and commercialize new functional materials, and seek to make the cosmetic sales business profitable for the fiscal year.
Shared Services (Nichirei Proserve Inc.)
  • Develop and allocate human resources to help Group companies achieve sound operations and growth.
About Nichirei Corporation
Nichirei headquaters in Tokio
Nichirei Corporation is a Japan-based holding company engaged in five main business segments along with its subsidiaries and associated companies.
The Processed Foods segment is engaged in the production, processing and sale of frozen foods, processed agriculture products, retort-pouch foods, packed ice and wellness products. Its Marine Products segment is involved in the processing and trading of seafood products.
The Meat and Poultry Products segment is engaged in the processing and sale of poultry, pork and beef, as well as the management of restaurants. Its low-temperature logistics segment is engaged in the provision of storage, inventory control, import clearance, freezing and unfreezing services. It is also engaged in the third party logistics business as well as the design, construction and maintenance of buildings.
The Real Estate segment is involved in the sale of building lots; the leasing of office buildings and parking lots, and the management of real estate properties.
Related News
Margaret E.L. Stacey
Editor Companies and Products


Information of the company:
Address: 6-19-20 Tsukiji, Chuo-ku
City: Tokyo
State/ZIP: (104-8402)
Country: Japan
Phone: +81 3 3248 2235
Fax: +81 3 3248 2159
E-Mail: [email protected]
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