A sushi plant in Thailand owned by a Japanese-Thai joint venture is expanding production, with capacity of a mackerel line being doubled, to meet growing demand in Europe. The new line should go into service by the end of this month.
Sushi of group Kyokuyo, Inc. is a K & U Enterprise joint venture, equally owned by or affiliated with major fisheries companies, and local Kyokuyo UFP in the province Samuttosakon, which has as its main activity a large frozen sushi factory. Kyokuyo UFP is in turn a joint venture, established in 2006, between Japans Kyokoyo Co. Ltd. and the Union Frozen Food Company (UFP).
From August 2006, annual production volume was around 3,400 tons. The plant produces about 15 fish species but the mainstay is sushi shrimp and squid. They have stable funding from the company UFP and good raw material procurement from the Kyokuyo group. Total sales are stable around ¥4.2 billion to ¥4.5 billion
($53 milliom to $57 million). Frozen sushi production is about 400 tons per year. About 70% of that is sold to Japan, 25% to Europe, the US, and Southeast Asia, and about five percent is sold locally in Thailand. Growth has been in Japan and Germany in recent years.
"Business is in a stable orbit since fiscal 2009, and we have continued to pay a dividend of 10% of capital ratio," said Tetsuo Matsumoto, president. Labor cost as a percentage of sales was between 9-10% for the past 10 to 11 years, but since April has risen to 13%. This is due to the 40% increase in the minimum wage rate, and gross profit fell about 3 percent. another pressure on earnings is the high cost of raw materials such as shrimp. Therefore, the company has implemented price increases for some products in Taiwan and Hong Kong and Germany.
With the increase in global sushi demand in Europe widening the company expects to complete the expansion of mackerel production line by the end of October. Production capacity will double to more than 50 tons per month. That product performed well in Europe,said Matsumoto.
