November 12, 2021

What factors will accumulate profits from the next fiscal year onward, excluding temporary positive factors such as rising fish prices and PCR test drugs?

We are considering the following as the factors from the next fiscal year onward;

  • In the Marine Products Business, we will create a system that will generate profits even if the fish price drops by reducing costs in the domestic aquaculture business.
  • We are considering raising prices in the domestic food business and expect profits to improve next fiscal year. If the raw material price rises further, it may be necessary to review the narrowing down of production items. We would like to further support the expansion of the overseas food business.
  • In the Fine Chemicals Business, demand for PCR test drugs may slow down, but the expansion of overseas exports of pure EPA will cover the decline.

On what timeline are you thinking about further improving the profitability of the domestic aquaculture business?

Aquaculture is a business that does not make a profit without a certain scale. We are working to expand the scale and change to a profitable structure in a span of about 5 to 10 years.

There is a statement in the financial results briefing material that "the Ministry of Homeland Security has pointed out that the transporter has violated the law regarding the transportation of white fish from Alaska, and the supply of raw materials has been suspended." Please tell us the details.

A carrier entrusted by our equity-method subsidiary was pointed out to be in violation of the law, and logistics was temporarily stopped. As a result, the supply of raw materials was delayed, and the opportunity to sell products was lost and shipments were delayed at a food manufacturing subsidiary in the United States. In addition, there is a possibility that costs will increase due to changes in transportation routes in the future.

Please tell us more about the price increase in the domestic food business.

We are considering raising prices only for items for which cost-increasing factors such as raw materials are clear. Although profits are expected to decline by 1 billion yen compared to the second half of last year, it will be difficult to recover all during this term even if the price increase is realized.

What are your thoughts on the impact of price increases for household products?

Sales of frozen foods and surimi-based products for home use are strong, and we believe that they have gained some support in the demand for nesting. We would like to carry out campaigns and raise prices so that the willingness to purchase will not decline.

What are the factors behind the strong performance of the overseas food business?

In North America, shrimp products for home use, which were rarely handled so far, are growing, and sales for major restaurant chains and Asian foods for commercial use are also rising. In Europe, sales centered on France have expanded to Germany and the three Benelux countries, and the company is responding to growing categories such as chilled fried white fish and alternative proteins.

The overseas food business is performing significantly better than it used to be. Please tell us about the factors behind the improvement in business performance and the outlook for the future.

It gained competitiveness by improving productivity during periods of poor performance. That has led to the current high profits.

What kind of measures are you taking for alternative production after the fire accident in Kitakyushu Nissui? How will the production system be rebuilt in the future?

Alternative production is being carried out at other plants, and recovery is expected to be possible in the second half of this fiscal year. The future production system is currently under consideration.

What is the scale of future shipping plans for pure EPA for overseas markets?

At present, several tens of tons have been shipped. We are currently negotiating the sales volume for next year and beyond.

Are you thinking of increasing the production capacity of pure EPA for overseas at this point?

Depending on the demand in the United States and the trend of drug approval in Europe and China, we are considering making it possible in the next medium-term business plan.

Globally, there are multiple suppliers of pure EPA, but what are the strengths of Nippon Suisan?

Since the standards for pharmaceutical raw materials have been set as products, the quality will be the same no matter which company makes them. However, since the manufacturers that can supply and their production capacity are limited, our strength is that we can respond to future increases in demand in Europe and China.

Please tell us about the concept of the next medium-term business plan.

We are currently studying the mission of the Nippon Suisan Group and the long-term vision for 2030 with a backcasting approach. We will put global expansion and sustainability management at the center of the strategy.