Kyokuyo Company Ltd.

International Directory of Company Histories, Volume 75 (2004) by M. Cohen

Kyokuyo Company Ltd.

3-3-5 Akasaka, Minato-ku Tokyo 107-0052 Japan Telephone: 81 3 5545 0701 Fax: 81 3 5545 0751 Web site: http://www.kyokuyo.co.jp

Public Company Incorporated: 1937 Employees: 1,145 Sales: ¥152.64 billion ($1.45 billion) (2004) Stock Exchanges: Tokyo NAIC: 311712 Fresh and Frozen Seafood Processing; 311412 Frozen Specialty Food Manufacturing

Kyokuyo Company Ltd. is one of Japan's leading seafood products companies. Originally focused on the whaling industry in the 1930s, Kyokuyo has since abandoned that activity in order to transform itself into a full-fledged marine foods company. Kyokuyo's operations include worldwide marine products purchasing and marketing, as well as seafood processing through a global network of more than 220 factories, including seagoing processing facilities. The company also produces food products such as frozen foods and canned seafoods. In addition to its purchasing and processing activities, Kyokuyo remains active in commercial fishing, with a fleet of four tuna seiners. Kyokuyo also has boosted its position in the Japanese sushi market through its partnership with Thailand's Union Frozen Products Co. (UFP). In 2005, that partnership was strengthened with the creation of a joint venture, K&U Enterprise, which began producing sushi for the Japanese and other markets. Kyokuyo is listed on the Tokyo Stock Exchange and is led by Chairman Kiyokazu Fukui.

Whaler in the 1930s

Kyokuyo's history dated back to the beginnings of the Japanese whaling industry in the early 20th century. Ayukawa rapidly became the center of the country's whaling industry, following the establishment of the first slaughterhouse there in 1906. At the beginning of the next decade, nearly all of the country's major whalers were based in Ayukawa.

By the 1920s, the Japanese whaling fleet had expanded operations to include many of the world's primary whale hunting regions. A number of new companies sprang up, such as Ayukawa Hogei, founded in 1925, as Japan began asserting itself among the world's most active whalers. The new company, like many others in the industry, began focusing on hunting smaller whale species in the early 1930s. This led to further expansion in the Japanese whaling industry, with increasing interests in the northern polar region. Ayukawa Hogei's own expansion into polar whaling led it to change its name, to Kyokuyo Hogei KK (literally, Polar Seas Whaling Ltd.), in 1937.

Although Kyokuyo remained an active whaler through the next decades, by the 1950s the company had begun its transformation into a seafood processor. This process was begun in 1954 when the company launched its own fleet of factory ships, providing onboard fish processing facilities. The company then began fishing and processing salmon and ocean trout in the northern Pacific region.

Kyokuyo's success in fish processing encouraged the company to expand its food production operations in the early 1960s. The first food production facilities were built in the Hokkaido and Miyagi regions in 1960. Kyokuyo then launched production of canned goods, and at the same time extended beyond seafood to include production of cured meats and sausages, among others.

Yet seafood remained at the heart of the company's business. In 1963, Kyokuyo set up what was to become one of its core business areas, establishing a marine products imports business. The company then launched its worldwide seafood purchasing activity, with a special focus on the Alaskan market and its highly prized salmon roe and other fish products. By 1970, Kyokuyo also had entered the frozen foods market, building a cold-storage facility in Hiratsuka, Kanagawa. The company also expanded its overall production with the opening of a new factory in Hachinohe, Aomori.

Kyokuyo's expansion into food production helped shield it from the intensifying competition and dwindling whale population in the global whaling industry. By then, the whaling industry had shifted away from its interest in small-type whaling, in favor of larger species and larger vessels. Nonetheless, Kyokuyo remained in the whaling trade into the 1970s. As part of its effort to remain competitive, the company formed a new subsidiary, Hokuyo Hogei, which began operating large-type whalers within the company's fleet.

Shift to Food Production in the 1970s

By then, however, Kyokuyo's shifting emphasis to food production led it to change its name, to Kyokuyo KK, in 1971. In that year, as well, the company added another cold-storage subsidiary, Kyoikuyo Akitsu Reizo, in Osaka, helping to expand its coverage of the Japanese market. Kyokuyo also boosted its purchasing and imports operations with the creation of Kyokuyo Shoki Co. That company began purchasing and selling not only marine products, but livestock and agricultural products as well.

Kyokuyo further solidified both its production and sales operations with the launch of its own fleet of tuna and skipjack seiners in 1973. The company's fleet sailed under the Wakaba Maru name. At the same time, Kyokuyo also entered a new shipping category, launching a fleet of refrigerated transporters, Satsuki Maru. The successful development of these lines of business, coupled with intensifying international pressure on the Japanese government to restrict, and even ban, international whaling, led Kyokuyo to exit the whaling industry in 1976.