A joint venture in Nebraska: FREMONT BEEF (1989)

What it means to own a plant for a cut with no price

The heart of this decision was not going abroad to sell, but placing the entrance of the raw material on your own side. A business that rests on a price gap — organ meat discarded in the United States, saleable goods in Japan — sends its profits wherever the gap is captured. Stay a buyer, and the better Kotetchan sells, the more bargaining power accrues to the local packers and the trading houses. Putting its own processing plant in Fremont in 1989 looks less like an investment to grow sales than an investment to protect the company’s share of the sales it had already grown. That Morishima Yukio kept the chairmanship of the American subsidiary for thirteen years while running the parent as president says the same thing.

Taking the form of a joint venture meant that decisions had to be discussed with a partner. Still, the fact that sole ownership came only sixteen years later is the other side of a plain truth: in 1989 the company did not have the strength to own an American plant alone. Against consolidated sales of ¥41.3bn in the year to February 1990, recurring profit fell from ¥2.6bn to ¥1.8bn. Marubeni’s 4,841,000 shares have not moved by a single share between the year to February 2006 and the year to February 2026. A relationship that began as a joint venture has continued for thirty-six years, with only the shareholding left of it.