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Nichirei to Reorganize Food Business as Part of Strategic Integration

JAPAN
Friday, December 13, 2024, 00:10 (GMT + 9)

President Akiya Okushi Highlights "New Innovation 2025" Goals

At a year-end press conference on December 10, Nichirei Corporation President Akiya Okushi outlined the company’s plans to reorganize its food business to drive growth, enhance profitability, and accelerate overseas expansion. Speaking from the company’s headquarters, Okushi addressed the challenges facing the industry, including rising global food demand, escalating costs, natural disasters, and currency fluctuations.

"The yen’s continued depreciation impacts procurement, and we will monitor this closely to ensure a robust response," Okushi said.

Enhancing Efficiency Through Integration

To improve capital efficiency, Nichirei plans to integrate overlapping functions such as procurement and sales across its food-related subsidiaries. This reorganization includes the consolidation of two North American subsidiaries, scheduled for January 1, 2025.

While the integration aims to strengthen the group’s competitiveness, its direct impact on business performance is expected to be minor. Okushi clarified that downsizing or selling businesses is not under consideration, though the company may withdraw from or scale down operations in less competitive areas.

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“This reorganization is designed to position Nichirei for sustained growth, leveraging management resources from across our group. By aligning with our long-term goals outlined in 'Vision 2030,' including an 8% operating profit margin and 9% ROIC, we aim to accelerate global expansion and enhance profitability,” Okushi stated.

Focus on Strategic Growth

Nichirei has already achieved progress in improving profitability in its processed food division and stabilizing earnings in the marine and livestock sectors. However, Okushi emphasized that structural reforms are necessary to meet long-term objectives.

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The company plans a full integration of its food business by April 1, 2026. This initiative involves a comprehensive review of all functions, including purchasing and sales operations, both domestic and international. The first step, restructuring North American subsidiaries, reflects Nichirei’s broader goal of enhancing efficiency and competitiveness on a global scale.

Minimal Performance Impact

Nichirei’s management projects that the reorganization will have only a limited effect on consolidated and individual business performance. Additional details on the integration process and methodologies will be shared as they are finalized.

"This is a forward-looking transformation aimed at fostering innovation and creating long-term value for the Nichirei Group," Okushi concluded.

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