Umios - Company History

A holding company is formed, and the group is rearranged by business rather than by parentage

In October 2007 Maruha Group Inc. and Nichiro merged. Maruha Group renamed itself Maruha Nichiro Holdings and took Nichiro as a wholly owned subsidiary through a share exchange. It was a pairing of the largest seafood company in Japan with the third-largest in the industry, yet for the year ended March 2006 the two companies’ simple combined figures came to no more than $8.3B (¥970bn) in sales and $129M (¥15bn) in operating profit; the new company set itself the target of lifting operating profit to $341.8M (¥30bn) by the year ending March 2010. It started from an arrangement in which Maruha-side and Nichiro-side operating companies simply stood side by side beneath the holding company, and announced that after a certain interval these would be reorganised and consolidated into four businesses — seafood, foods, meat, and refrigerated logistics.

In April 2008 the operating company Maruha renamed itself Maruha Nichiro Seafoods, and the group’s companies were rearranged not by which of the two predecessors they had belonged to but by the business they carried on. Maruha transferred its own foods business, by company split, to Maruha Nichiro Foods — which was Nichiro renamed — and its meat business to Maruha Nichiro Meat (マルハニチロ畜産); at the same time Maruha Nichiro Seafoods took over the seafood business that had sat inside Maruha Nichiro Foods. The result of this rearrangement was that three operating companies now stood beneath the holding company Maruha Nichiro Holdings: Maruha Nichiro Seafoods for seafood, Maruha Nichiro Foods for processed foods, and Maruha Nichiro Meat for meat.

Eel mislabelled at a subsidiary exposes the holes in group control

On 25 June 2008 the Ministry of Agriculture, Forestry and Fisheries disclosed, as a breach of the JAS Law on food labelling, how the wholesaler Uohide (魚秀) had sold 256 tonnes of Chinese-farmed grilled eel to Shinko Gyorui (神港魚類), a subsidiary of Maruha Nichiro Holdings, passing it off as a domestic product. The affair began with a tip-off to the 食品表示110番 food-labelling hotline, after which the limited company named on the packaging as the manufacturer turned out to be a fiction — its registered address held nothing but woodland. By the middle of June, Shinko Gyorui had sold 49 tonnes of that stock on to outside buyers and sold 15 tonnes back to Uohide. Two small Tsukiji traders had been interposed in the transactions, and ¥10 million in unrecorded money had passed from the president of Uohide to a section manager at Shinko Gyorui; the Hyogo and Tokushima prefectural police moved in with compulsory searches on suspicion of breaching the Unfair Competition Prevention Act.

Maruha Nichiro Holdings had received Shinko Gyorui’s report of the falsification on 18 June, a week before the ministry’s announcement, and from the following day Shinko Gyorui had quietly begun recovering the product it had already shipped. That fact, however, was shared among only a handful of people: Igarashi Yuji (五十嵐勇二), the president, heard it directly from Shinko Gyorui’s own president only on 20 June, and 25 June — the day the ministry published its findings — happened to be the day of the parent company’s annual general meeting, where Igarashi answered a shareholder’s question about the mislabelling by saying that he did not know the outcome. The merger had left the group with more than 200 subsidiaries, and Igarashi said regrettably, it is probably not reaching all the way down to the far ends[1], naming compliance driven through the presidents of the subsidiary companies as the task ahead. In the same interview he disclosed that, with world demand for seafood rising and stocks being depleted, access to resources had become decisive, and that the company would build two vessels — a large distant-water purse seiner and an offshore purse seiner — for the first time in more than a decade[2].

An earnings structure dependent on seafood trading, and a thin overseas base

The merger did not quickly change how the company made its money, and extraordinary losses on unprofitable businesses were booked almost every year, as they had been in the Maruha era. Because the bulk of earnings came from seafood trading — taking a margin on dealing in fish — results were hard to forecast, and after the merger securities analysts dropped coverage one after another. The mid-term management plan passed from “Double Wave” to “Challenge toward” and then “Innovation toward”, and the work of turning merged scale into profit was carried forward each time. At the moment the merger was announced Maruha Nichiro’s market capitalisation was around $1.1B (¥130bn), short of Nippon Suisan’s $1.6B (¥190bn), and Igarashi said that since the disposal of bad assets and unprofitable businesses had only been completed in the year to March 2005, it was unavoidable that the balance sheet should compare poorly.

The two merged companies leaned in opposite directions: at the time of the announcement seafood accounted for 75 per cent of Maruha’s sales, while processed foods accounted for 61 per cent of Nichiro’s. Overseas sales, however, were only 8 per cent at Maruha and 9 per cent at Nichiro, weak beside Nippon Suisan — 52 per cent processed foods, 41 per cent seafood, and 15 per cent of sales from overseas — and the thinness abroad survived the merger untouched. Nippon Suisan, reading the shrinkage of the domestic market, had bought four overseas companies in ten years and had grown a pharmaceutical division into a business earning 40 per cent of its operating profit. In the half-year to September 2006 Nippon Suisan’s operating margin was 3 per cent against Maruha’s 1.7 per cent and Nichiro’s 1.6 per cent: the gap that ran two to one in Maruha Nichiro’s favour on sales ran the other way on profitability.

The Aqli Foods contamination and the gap inside the group behind it

At the end of December 2013 Maruha Nichiro Holdings announced that the pesticide malathion had been detected in frozen food made at the Gunma plant of its group company Aqli Foods, and was forced into a voluntary recall of some 6.3 million packs, worth $13.3M (¥1bn) at retail. In January 2014 a contract worker who had been making pizza bases at the same plant was arrested, and the country was shaken by what proved to be deliberate contamination. The concentration was high enough that a child eating an eighth of a frozen croquette could suffer harm; the Gunma plant stopped production, and the Yubari plant was forced into a steep cut in output. The recall extended to frozen foods made at the Gunma plant generally, and two months after the announcement the plant was still idle, its employees occupied with handling the products consumers were sending back.

Aqli Foods had begun as the frozen-food division of Snow Brand Milk Products, was spun out in 2001 as Snow Brand Frozen Foods in the wake of that company’s food-poisoning scandal, changed its name to Aqli Foods when the Snow Brand name was extinguished by the beef-mislabelling affair at Snow Brand Foods uncovered in 2002, became a subsidiary of Nichiro in 2003, and entered the Maruha Nichiro Holdings group through the 2007 merger. All five security cameras at the Gunma plant were trained on keeping intruders out rather than on the production lines, a different order of supervision from the Maruha Nichiro Foods plants, which had as many as 35 cameras including some over the lines themselves. The arrested suspect, though a veteran of more than eight years’ service, had been kept on contracts renewed every six months; contract staff made up more than 60 per cent of the Gunma plant’s workforce and started on pay 30 per cent below that of permanent employees, and these facts of the plant’s labour arrangements were also pointed to as part of the background to the case.

Operating companies and holding company become one, and quality control is rebuilt

In April 2014 Maruha Nichiro Seafoods renamed itself Maruha Nichiro Corporation and absorbed five companies — its parent Maruha Nichiro Holdings, together with Maruha Nichiro Foods, Maruha Nichiro Meat, Maruha Nichiro Management and Aqli Foods — bringing operating company and holding company together into a single legal person. The arrangement of lining up operating companies descended from the two predecessor houses beneath a holding company was thus undone seven years after the 2007 merger. At the same time the company listed on the First Section of the Tokyo Stock Exchange, and its shape as an integrated food company spanning seafood and processed foods was settled. Because the Aqli Foods contamination had broken four months before the merger of the five, the new Maruha Nichiro was born already carrying a recall and an inquiry into causes.

The president resigned over the contamination, and rebuilding quality control became the new company’s first task. Ito Shigeru, who became president in April 2014, said in an interview five years later: Today I can claim with confidence that our standard of quality control has risen to among the very best. The disposal of unprofitable businesses has also progressed, and we are now in a position to manage the company looking forward[3]. Ito had joined Taiyo Gyogyo in 1972, become a director of Maruha in 2001, served as director and senior executive officer of Maruha Nichiro Holdings from 2007 and then as vice-president from 2010 — a career man of the house — and the rebuilding after the affair was entrusted to a manager who knew the old Maruha shop floor.

Frozen food, a single brand, and a re-rating on the stock market

The route back was laid through frozen food and overseas markets. The mid-term management plan announced on 5 March 2018 set out to strengthen the processing business, frozen foods above all, and the overseas business centred on Australia and North America, aiming at sales of ¥1tn and operating profit of $236M (¥31bn) in the year to March 2022. Results for the year to March 2018 were sales of $8.3B (¥919bn) and operating profit of $221.9M (¥25bn), and the plan carried $996.4M (¥110bn) of investment, of which $439.3M (¥49bn) was earmarked for growth areas. In April the corporate logo was redesigned, and the decision was taken to bring the product brands — until then divided among “Maruha”, “Akebono” and “Aqli” — progressively under the Maruha Nichiro name from the autumn of that year. With domestic frozen-food output setting successive records, Maruha Nichiro stood alongside Nichirei as one of the two largest producers in Japan, placed to take in the growth of the market.

The stock market’s judgement returned with it. The share price rose from a close of ¥3,160 at the end of February 2018 to touch ¥4,230 on 18 May, an all-time high since listing. Among the brokers, Okasan Securities, which had begun coverage in September 2017, raised its target price to ¥4,100. With the equity ratio passing 20 per cent, the improvement of the balance sheet also came into view, and a company once called the analyst’s despair[4] was reassessed as its extraordinary losses receded. Holding one of the largest volumes of seafood handled anywhere in the world, and carrying the whole chain from catching and buying through processing to sale, it even drew market speculation that it might be targeted for acquisition by a Chinese company.

In May 2019 Ito described the direction of growth: From here we go on the offensive. Process worldwide, and sell worldwide[5]. At home, demand for fish and shellfish had been overtaken by meat in 2009 and kept falling; the domestic catch had dropped to close to a third of its peak, and imports had fallen roughly 40 per cent from their own peak as Japanese buyers were outbid. Reading a persistent shortage of domestic supply against world demand expanding with population growth, the company set out to extend the fishing rights it had secured in North America and Oceania to salmon, prawns and whitefish, to process the raw material within the group at home and abroad, and to sell it as finished product on world markets as an integrated food company. Sales of canned mackerel, a category it led, rose 50 per cent in 2018 on the year before, and the growth of processed foods built around health filled in part of the domestic retreat from fish.

Ikemi redefines the company, and sales pass ¥1 trillion for the first time since the merger

In April 2020 Ikemi Masaru became president[6]. In the 2021 integrated report the company redefined its reason for existing as the finest seafood company in the world[7], resetting the measure of management on the creation of value that was not only economic. The mid-term plan passed from “Innovation toward 2021” to “MNV2024 — Creating the Future of the Ocean and Life”, whose first year was the financial year beginning in 2022[8]. On the organisational side, the company withdrew from the salmon and trout business of Peter Pan Seafoods in North America by selling it in 2021[9], folded the overseas units that had been divided between North America and Europe on one side and Asia and Oceania on the other into a single unit, and likewise re-bundled the segments that had been split into fishing, aquaculture, trading and overseas.

Results grew through the 2020s. Sales for the year to March 2023 were $7.3B (¥1.02tn), above ¥1tn for the first time since the merger, with operating profit of $210.7M (¥30bn) and profit attributable to owners of the parent of $132.4M (¥19bn)[10]. A full year’s contribution from a subsidiary acquired in Europe was joined by an investment in a North American frozen-food company and a joint venture with Mitsubishi Corporation to thicken the overseas business, and in March 2024 a capital and business alliance was concluded with Kibun Foods[11]. The year to March 2025 brought sales of $7.2B (¥1.08tn), operating profit of $203.1M (¥30bn) and net profit of $155.7M (¥23bn)[12]; operating profit set a new high for the period since the merger, and every indicator set out in the preceding mid-term plan, EBITDA and ROIC among them, was met[13].

Fully cycle farmed bluefin tuna, and the economics of raising fish

Aquaculture was a field in which Maruha Nichiro had moved early: the team developing bluefin tuna fingerlings was formed and trials of seedling production begun in 1987, in the Maruha era. The work was suspended once in 1996 and resumed in 2006, when the survival rate was under 0.1 per cent — yet the fingerlings produced in that same year of 2006 went on to spawn successfully and to grow into juveniles, adults and breeding stock, and in 2010 the company achieved fully cycle farmed bluefin tuna, the first private company to do so. The survival rate later rose to around 3 per cent, and in April 2022 six aquaculture subsidiaries were consolidated into two, Maruha Nichiro AQUA and Maruha Nichiro Marine. In the year to March 2024 the group produced 4,200 tonnes of farmed bluefin tuna, close to 30 per cent of the domestic market and first in the country.

The returns, however, are not high: in the year to March 2024 the aquaculture division, amberjack and yellowtail included, had sales of $105.6M (¥16bn) and operating profit of $4.6M (¥700m), and the following year was expected to fall to $2.7M (¥400m) on soaring feed prices and a falling yellowtail market. Because the full cycle means raising the fish from the egg, it takes about four years to reach shipment, and costs more than farming from wild-caught fingerlings. At the Amami works the fish are stunned electrically when they are lifted out, and in full-cycle farming every fish is vaccinated, in keeping with animal-welfare practice; 90 per cent of the works’ 98 employees are hired locally in the town of Setouchi. Investment in the growing side has not stopped at bluefin tuna — the company made a further investment in Atland (アトランド), which farms salmon on land[14].

The renaming to Umios and the next three years toward the ocean and health

In March 2026 Maruha Nichiro changed its name to Umios Corporation[15]. The new name, built on a word for the sea, was a declaration of a long-term vision that keeps seafood at the core while putting the creation of health value and sustainability at the front, and it was published together with a long-term management vision looking a decade ahead[16]. In the results briefing for the year to March 2025, which preceded the renaming, the company had explained that the next mid-term plan would carry an operating-profit target of $267.3M (¥40bn) and that it would begin work on changing its corporate identity[17]; the change of name belongs to that programme. In Europe it acquired a company versed in local conditions and added it to the consolidation[18], thickening its footing for selling and processing overseas.

With the renaming, the mid-term management plan “For the ocean, for life 2027”, whose first year is the year to March 2026, began[19]. Under this plan the company has pursued structural reform — withdrawing from unprofitable fishing operations and consolidating its North American production sites[20] — and in the year to March 2026, its first full year under the new name, it booked $72.7M (¥12bn) of extraordinary gains from reducing its cross-shareholdings and selling property[21]. On shareholder returns it has committed to progressive dividends with a payout ratio of at least 30 per cent, raising the year-end dividend to ¥28[22]. From the 2025 financial year the company moved to a structure in which Ikemi serves as representative director, chairman and chief executive officer and Yasuda Daisuke as representative director, president, executive officer and chief operating officer[23], and it names the review of its domestic processed-food production sites as a task to be settled within the term of the mid-term plan[24].