Nippon Suisan Kaisha

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Incorporated: 1943
NAIC: 424460 Fish and Seafood Merchant Wholesalers
SIC: 5146 Fish & Seafoods

Nippon Suisan Kaisha, Ltd., also known as Nissui, is one of the world's leading fishing and seafood companies. In Japan, the world's largest fish market, Nissui holds the second position, trailing only the Maruha-Nichiro group. The company operates through two primary divisions: Marine Products (including fishing, fish farming, and fish purchasing) and Foods (including frozen and prepared seafood).

Marine Products are the company's historic core; the division represents the firms globally operating fishing fleet, as well as its growing fish-farming operations in Chile, the United States, Australia, and New Zealand. This division continues to represent 42.4 percent of the company's sales.

In efforts to diversify, however, Nissui is also focusing on its Foods division. This division includes the company's production of frozen and shelf-stable processed seafood, including breaded fish and shrimp and the like. The Foods division includes the popular Nissui brand in Japan, and Gorton's, the leading processed seafood brand in the United States. In 2006, the Foods division accounted for more than 50 percent of Nissui's total revenues of Y552.87 billion ($2.5 billion).

Other divisions include General Distribution, which supports the group's other division with freezing and cold storage operations, as well as specialized logistics; and Pharmaceuticals, especially seafood-derived substances for medical use and nutritional supplements. Japan remains the company's core market, accounting for 85 percent of its sales, but it has been building its presence in the United States, acquiring Georgia's King & Prince Seafood, and Gloucester, Massachusetts-based FW Bryce. The company also operates fishing and processing subsidiaries in Redmond, Washington, and in Alaska. Other Nissui subsidiaries are present in the Netherlands, Singapore, Spain, Thailand, Denmark, Canada, and Indonesia. Nissui is listed on the Tokyo Stock Exchange and is led by president and CEO Naoya Kakizoe.

First Trawler in 1908

Advances in fishing technology at the beginning of the 20th century launched the transformation of Japan's fishing industry from one based on small-scale, coastal fishermen into the world's largest, most sophisticated, and, some would say, most voracious fishing fleet. The development of stronger engines, netting machinery, and new communications devices in the years leading into World War I provided the setting for the creation of Japan's first large-scale fishing companies.

An important moment came in 1908, when Ichiro Tamura built Japan's first steel-frame trawling vessel. In 1911, Tamura created the Tamura Kisan Company and its Tamura Steamship Fishery Division, which began trawling operations in partnership with Kosuke Kunishi. This partnership would grow into the latter-day Nippon Suisan. However, Japan's entry into World War I, and the concentration of the nation's resources on the war effort, meant that the domestic fishing industry grew little during the war years.

Renamed Kyodo Gyogyo Kaisha, Ltd., 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 Mexico's Gulf of California to begin shrimp fishing, and still another went to fish in Argentine waters. By 1937, the company, renamed Nippon Suisan Kaisha, Ltd., was the largest company in Japan involved in conducting trawler and factory-ship operations. On factory ships, marine products were processed and canned or packaged right on the ship and then transported directly to distribution centers to be sent to markets worldwide. Nissui, however, distributed 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. The waters of the Pacific were already churning with Japanese naval maneuvers, however, 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 nation's borders. After Japan's 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 owners--the Soviets--less than hospitable.)

During nearly seven years of occupation by the Allied forces, profound changes were made in the structure of Japan's government, economy, and businesses. Free enterprise with firm government controls, plus some financial help from the United States, helped many struggling businesses--including Nissui--gain or regain a substantial portion of their markets. The company went public in 1949, listing its stock on the Tokyo exchange. In that year, too, Nissui relaunched its first processing operations, opening a canning plant in Hakodate. 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.

Postwar Expansion

In that year, too, the company launched production of fish sausages, which became one of its bestsellers in Japan. By 1962, the company was ready to launch its processed foods operations on an industrial level and set up a new factory in Hachioji. 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 Nissui's, 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 Nissui's 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. The company also set up subsidiaries in North America, in Halifax, Canada, and, in 1974, in Seattle, Washington.

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

In 1974, Nissui began sending large trawlers to the Antarctic seas to fish for krill, several varieties of small sea creatures rich in protein and highly marketable when harvested and processed into feed for livestock, poultry, and farmed fish. 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. Nissui, however, was 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. Nonetheless, by the late 1980s (particularly after the United States abolished the granting of fishing quotas to foreign vessels in the North Pacific Ocean) Nissui was forced to recognize the need to adapt in the face of the looming depletion of the world's oceans.

Shifting to Food Processing for the New Century

Nissui developed a twofold strategy, calling on the one hand to develop its own fish-farming operations, and, on the other, to expand its food processing business. This led the company to found a new subsidiary, called Great Land Seafood in Redmond, Washington, which began producing crab-flavored fish paste. In 1990, the company formed a joint venture with foods giant ConAgra to develop and market frozen foods for the Japanese market. Meanwhile, the company had also boosted its surimi production with the launch of a new, state-of-the-art processing vessel. The company also extended its seafood processing operations to Thailand, setting up the A&N Foods Company joint venture, and to South Korea, through another joint venture, Dongil Frozen Foods, from 1987.

Nissui's fish-farming efforts were also gaining speed. The company, which had established fishery bases in Chile in 1978 and Argentina in 1981, returned to the region to establish its first fish-farming operations. In 1988, the company acquired Chile-based Salmones Antártica, which specialized in the production of salmon and trout. Nissui's aquaculture operations also spread to the Southeast Asian region, notably in Indonesia, and then in mainland China. Into the 2000s, the company acquired a 50 percent stake in New Zealand's Sealord. The company also established a yellowfish farm in Japan in 2004. In 2006, the company acquired tuna-farming operations through its acquisition of Natakani Suisan.

Yet Nissui's major growth came through the development of its food processing operations. For this, the company focused on two primary markets: Japan, which remained the world's single-largest consumer of fish and seafood products, and the United States. The company's U.S. presence took a giant leap forward in 2001, when the company paid Unilever $175 million to acquire Gorton's, based in Massachusetts, the country's leading producer of branded frozen fish products. That purchase also gave the company control of the Blue Water brand, the second largest in Canada. The following year, the company acquired 25 percent of Alaska Ocean Seafood, and then turned to Peru, where it bought NAL Peru, which focused on fish meal and fish oil.

Nissui raised industry eyebrows through its purchase of breaded shrimp specialist King & Prince Seafood, based in Georgia, in the United States. The acquisition, which cost nearly $150 million, gave the company stronger access to the country's restaurant sector. By 2006, the company had added to its U.S. presence through its purchase of Gloucester-based FW Bryce, a leading importer of frozen seafood to the United States.

By the end of that year, Nissui's Foods division had become its largest operation, accounting for more than 50 percent of its sales. Yet Nissui continued to invest in its Marine Products division. The company targeted expansion into Europe, opening a seafood laboratory in the Netherlands, and buying the Europacifico seafood marketing group in Spain. The company also acquired a stake in Nordic Seafood in Denmark in 2006. In Japan, Nissui launched a partnership with Kyowa Suisan and completed construction of a new factory in Kashima. By then, too, the company had built a new factory for its Chinese operations, in Qingdao. At the end of 2007, the company's Chilean subsidiary announced the launch of a local joint venture to market its production of fish fillets and processed foods there.

Nissui's vertical integration efforts had enabled it to transform itself from primarily a fishing company to an integrated marine products group. The company's research and development efforts had also enabled it to build its Pharmaceuticals division, notably with the launch of fish-derived EPA products in 2004. The company had also established strong specialized frozen foods logistics operations, regrouped under a new subsidiary in April 2007. Nissui appeared to have prepared itself for the challenges facing the international seafood industry in the 21st century.

Principal Subsidiaries

Carry Net Co., Ltd.; Chilldy Co., Ltd.; Emdepes (Chile); Gorton's Inc. (United States); Hohsui Corporation; Kanesho Co., Ltd.; Kitakyushu Nissui Co., Ltd.; Kurose Suisan Co., Ltd; Kyowa Tecnos Co., Ltd; N.A.L. (Chile); Nippo Shokuhin Kogyo Co., Ltd; Nippon Cookery Co., Ltd; Nippon Suisan (U.S.A.),Inc.; Nishisho Co., Ltd; Nissui Engineering Co., Ltd; Nissui Marine Industries Co., Ltd; Nissui Pharmaceutical Co., Ltd; Nissui Shipping Corporation; Pesantar (Argentina); Pespasa (Argentina); Salmones Antártica S.A. (Chile); Seibu Reizo Shokuhin Co., Ltd; Teion Co., Ltd; Tobu Reizo Shokuhin Co., Ltd; Unisea,Inc. (United States); Yamatsu Suisan Co., Ltd.; Yokohama Trading Corporation.

Principal Divisions

Marine Products; Foods; General Distribution; Pharmaceuticals.

Principal Competitors

SYSCO Corporation; Marubeni Corporation; EDEKA ZENTRALE AG; Maruha Group Inc.; Marine Harvest; Pesca S.A.; Dagrofa A/S; Thai Union Manufacturing Company Ltd.; Brake Brothers Ltd.; Icelandic Group hf.

Further Reading

"Gorton's Enters into Merger with King & Prince Seafood," Quick Frozen Foods International, July 2005, p. 52.

Hedlund, Steven, "Nissui Buys FW Bryce," Seafood Business, May 2006, p. 6.

"Japan's Nippon Suisan Launches Grouper Cultivation in China," AsiaPulse News, October 8, 2003.

"Japan's Seafood Cos Stepping Up Overseas Sales," AsiaPulse News, October 11, 2007.

McNeill, David, and Michael McCarthy, "Canned! Food Firms Bail Out of Whaling," Independent, April 5, 2006, p. 3.

"Nippon Suisan Kaisha in Consortium to Expand Saury Fish Exports," AsiaPulse News, October 22, 2007.

"Nippon Suisan Raising Branded Stakes with Takeover of Gorton's, BlueWater," Quick Frozen Foods International, October 2001, p. 34.

"Nippon Suisan to Construct European Satellite Lab," JCNN News Summaries, June 11, 2007.

"Nippon Suisan to Expand Chilean Fish Farming Ops by 50 Pct.," AsiaPulse News, March 1, 2007.

Redmayne, Peter, "Nippon Suisan Gambles on Breading Shrimp," Seafood Business, August 2005, p. 16.

"Seafood Maker Nippons Suisan Sees 38.8% Profit Surge in FY 2006," Kyodo News International, May 16, 2007.

Wright, James, "NGOs Confront Gorton's over Parent Nissui's Whaling," Seafood Business, January 2006, p. 6.

— M. L. Cohen

Nippon Suisan Kaisha Ltd. (日本水産^?) (TYO: 1332), more commonly known as NISSUI, is a marine products company based in Japan. It had annual revenues in 2004 of 4.7 billion USD.^[1] The company was established in 1911, and is a commercial fishing and marine product procurement operation. Its goal is to “Establish a global supply chain of marine products.” The company is the second-largest of its kind in Japan and owns Gorton’s, a US frozen seafood company.^[2]. Its main competitors are Maruha Nichiro Holdings and Kyokuyo co., ltd.

Its former headquarter, built in Tobata (Kita Kyushu) in 1929, is now a exhibit center^[3].

The Company has 75 subsidiaries and 31 associated companies.^[4]

See also

• Fishing industry in Japan

References

1. ^ Nippon Suisan Kaisha, Ltd. Company Profile - Yahoo! Finance
2. ^ Crocodyl company profile [1]
3. ^ http://www.nissui.co.jp/english/corporate/frontier/21/02.html
4. ^ "FIS company profile" Fish Information and Services

External links

• Company website
• Yahoo! Finance company profile

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