Taking hold of the overseas opportunities
Japanese companies facing the dilemma of decreasing domestic demand are focusing on strengthening their presence in the U.S., Europe and South East Asia The ASEAN, the Association of Southeast Asian Nations founded in 1967, has become one of the world’s most vibrant, dynamic, and competitive regions, where GDP growth has surpassed any other region in the world consistently over the last decade and continues to do so.
The ASEAN opportunity comes at an ideal moment for Japanese companies across the board, as they look abroad for sales growth to offset the impact of decreasing domestic demand due to Japan’s shrinking and aging population.
“The negative demographic line in Japan has reduced the demand for frozen food. Therefore, the frozen food market has been evolving thanks to emerging countries such as China, South Korea, Thailand or Vietnam, where increasing income rate is coupled with clear demographic growth. In the future, it will be our objective to respond to the demands of these nations for frozen food, a market which is bound to increase in size and volume,” says Mr. Toshio Yoshikawa, Chairman of Yokorei, a multinational engaged in import and export of agriculture and seafood products and refrigerated housing and transport.
To strengthen its presence in the region, Yokorei last year invested in Agrobest, a Malaysian back tiger shrimp operation. Yokorei is also targeting the U.S. and European markets and has acquired Fjordlaks Aqua and Hofseth International in Norway, through its subsidiary Alliance Seafoods.
“One of the main milestones for us was the M&A with Alliance Seafood, originally a trading company specialized in the export business. For our company to facilitate its overseas operations, it was crucial to ally with a company that had expertise in exportation,” says Mr. Yoshikawa.
“There is more room for growth in Europe and in the U.S., where there is tremendous demand for Japanese culinary products. Although there are areas in South East Asia that are growing, there are still many issues to be tackled within the region. While we will be focusing on the Asian regions, I believe that the European and the American markets have the greatest potential.”
Principally engaged in the manufacture and sale of packagingrelated materials for the food and chemical industries, Ohishi Sangyo is another company looking to expand its presence in South East Asia, where consumer demand for higher quality is increasing.
“In South East Asia, the packaging material business is developing similarly to the U.S. and to the EU. Many consumer-packaging players, such as Dai-nippon, have therefore moved to these areas. Previously, we used newspapers and basic materials for wrapping and packaging. Today, consumers require aesthetic and high-performance products,” says company president, Mr. Norio Okubo.
“At Ohishi Sangyo, we have already relocated our factories to South East Asian countries, where the labor force is more cost effective. Japanese corporations know that domestic demand is declining, and that applies to every business line. Therefore, our customers have moved from Japan to Asian countries.”
As they have expanded their presence overseas, both Yokorei and Ohishi have ensured that they provide their overseas customers with the same level of quality that their customers in Japan demand.
“For the food and chemical businesses, high-quality, performance and reliability are required,” says Mr. Okubo. “We specialize in creating stable, high-quality and technologically advanced products. We provide to our clients the stability required to attain a safe level of productivity.”
“Japanese people are excessively sensitive to the quality and safety of their food,” says Yokorei’s Mr. Yoshikawa. “It is impossible for the frozen food market to evolve without warehouses and freezers where frozen food can be stored with quality maintenance.”
“One of the most important things for us when entering into the U.S. and the European markets is being able to offer a high-quality product that enjoys clear traceability. Our strength lies in having refrigerators that can maintain high quality and low temperatures.”
“Although there are areas in South East Asia that are growing, there are still many issues to be tackled within the region” Toshio Yoshikawa, Chairman, Yokorei “Our products have great performance unmatched by our competitors. We successfully expanded into the overseas market because of the uniqueness of our products” Norio Okubo, President, Ohishi Sangyo