Thursday, Oct 19, 2017
Others | Asia-Pacific | Japan

Nichirei

Optimal processing feeds into growth


1 year ago

Kunio Otani, Representative Director and President of Nichirei
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Kunio Otani

Representative Director and President of Nichirei

Head of frozen food group Nichirei Kunio Otani looks at the potential impact of Abenomics, the TPP and the fourth industrial revolution will have on Japan and his sector in particular, as well as the indisputable importance R&D and CSR have played in the company’s growth.

 

What do you think has been the impact of Abenomics on the economy, and on your industry in particular?

Considering the merits or demerits of Abenomics from just a certain viewpoint is not really fair. There are many different perspectives. Abenomics started in 2012. The first “arrow” was monetary easing. I think the most important aspect is the third arrow, the implementation of growth strategies. The goal of Abenomics is to pull the Japanese economy out of deflation. Consumer spending is not strong, but it is on an upward trend. Many food-related companies achieved a year-on-year increase in earnings for the fiscal year ended March 2016. The pace of change is an area of concern. That’s why it’s necessary for the public and private sectors to work together.

 

If it goes ahead, what are your expectations and position on the Trans-Pacific Partnership (TPP) and do you believe it will open doors to new markets for you?

The economic aspect of the TPP is to stimulate the elements of competition through greater productivity. The export of Japan’s agricultural produce that Prime Minister Abe is stressing is one perspective. In terms of the import of food material and the export of products, along with lowering tariffs within the region, the agreement has the potential to enhance consistency in quality standards and other aspects, and invigorate markets across the entire region.

The inflow of inexpensive products from the TPP region will likely increase, and the way for Japanese companies to survive is not to produce low-cost products, but products of high quality that are not expensive.

 

How do you believe the food sector in particular will be affected by the fourth industrial revolution?

The world has become smaller as a result of globalization, and various regulations regarding the environment and natural resources have been put in place. Demographics are also shifting. The world population continues to grow year by year, while Japan is struggling with an ageing and shrinking populace.

The fourth industrial revolution involves advancements in the Internet of Things (IoT), networking, and automation, and will change the way people live. In the food sector, volume, quality, and health maintenance are important. In a world with a growing population, it’s necessary to secure and provide a stable supply of safe and reliable food. In Japan, we also need to consider how to reduce food loss. The results of the fourth industrial revolution will be utilized to a high degree.

In the logistics sector as well, these advancements will be used in such areas as automated control and traffic flow analysis.

 

The history of the company takes us all the way back to the early 1940’s, and just after the war was over it acquired a very important responsibility that was not just profit-driven. The country was in need and the company was there to support it. Since then, a lot has happened and the technology developed and utilized by the company has completely shaped today’s scenario. Can you please take us over the main milestones that in your own belief have shaped the present and promising future for Nichirei?

Nichirei was established immediately after the war. The company has evolved, building on a foundation of freezing technologies. In the beginning our business was in marine products and refrigerated warehouses. Our first milestone was when we decided to start handling frozen foods. In 1956, the year I was born, Nichirei entered the meat and poultry business, and in 1980 we made major capital investments in large-scale refrigerated warehouses. But it was really in the 1980s, when we took advantage of the widespread use of microwave ovens and other trends to develop microwavable products; the frozen foods market expanded at an unbelievable rate. It was during this period that we changed the company name to Nichirei, and began to shape our corporate identity.

 

What role has technology played in terms of the evolution of Nichirei and what is your strategy for R&D towards the future?

Our R&D program is focused on processed foods. We have basic technologies acquired through research in the nutritional field. We are deepening our research in the areas of product development and quality assurance. Currently, we are conducting R&D aimed at understanding the products that meet the needs of customers and consumers, and utilize feedback from customers in the next stage of development.

 

One thing evident in Japan, regardless of the sector, is that companies are striving to become “total solutions providers” for their clients. How important has it been for Nichirei to be able to provide a “total solution” approach to your clients?

In terms of logistics, we are a 3PL (third-party logistics) operator, providing a comprehensive, efficient logistics service. In the marine products and meat and poultry businesses, rather than simply supplying products, we provide “optimal processing” to deliver products in an ideal form for use by the food manufacturers and restaurants that comprise our main customers.

 

The 1964 Olympics positioned Nichirei’s brand not only towards the athletes, but also the people visiting the country at that time. With the Tokyo 2020 Olympics coming up, how are you planning on taking advantage of such events that are bringing visitors from all over the world?

Looking back to the 1964 Tokyo Olympics, Nichirei was highly regarded as a pioneer in frozen foods, providing meals for the Olympic Village. We will probably not be directly involved with the 2020 Tokyo Olympics, but should be able to find various business opportunities.

 

What would you say is the flagship brand of Nichirei?

Our flagship products are frozen foods. These are products made with premium Japanese ingredients, including rice products with Hokkaido-grown rice, and processed foods made from pure Japan-raised poultry. Food culture varies by country, so we don’t think they would be accepted if we exported them as is.

 

Do you believe the Western world could learn more about CSR from the Japanese culture? And how do you try to impregnate this spirit into your own business?

Only the perspective is different. Things change when shifted to a different perspective. At Nichirei we say, “If employees aren’t satisfied, customers won’t be satisfied.” Many companies focus solely on satisfying customers or consumers. But ultimately, it’s the people who shape a business. To satisfy customers and consumers, employees need to be satisfied in their work.

One of the things we are pursuing at the moment is ensuring the health of employees. We even issued a “Health Management Declaration” outlining our policy as a company. In terms of psychological health, to ensure smooth communication between managers and employees at each business company, we have top management go to business offices to observe the conduct of operations, and create opportunities for dialogue with employees.

 

As a leader in the food sector, running one of the most relevant companies in terms of the perspective towards the future, what would you like your legacy as president of Nichirei to be, how would you like to be remembered?

As for Nichirei, it would be conscientiously providing trusted products and services. I want people to think of our company as one that provides satisfaction of the heart. Nichirei’s aim is to recognize social trends, and achieve growth by providing high-quality services that meet the requirements and demands of customers. The keyword for Japan ahead of the 2020 Olympics is “omotenashi” (hospitality), and the same can be said of Nichirei. We want to grasp minor changes, and apply them to major transformations. We want to satisfy the spirit. 



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