Overview of the business of Ichimasa Kamaboko <2904>.

1. Business Environment

Fish paste products produced about 1 million tons in 1975, but following the 1977 200 nautical mile shock (sea area restrictions), production has been gradually decreasing since then. The production volume in 2022 was 471 thousand tons, a decrease of 10.8% compared to 2013, but from a recent trend perspective, there is a slight sense of stabilization, although it is gradual. Annual consumption expenditure per household peaked in 1992, fell below 10 thousand yen in 2002 and showed a declining trend, but recently, it has gently increased to 8,908 thousand yen in 2022 from a low of 8,233 thousand yen in 2018. This is thought to be influenced by the renewed recognition of the high nutritional value and convenience of fish paste products, leading to a re-evaluation as healthy food. Moreover, crab sticks, initially introduced as flavored kamaboko, have continued to perform well in the industry. The entire industry is also working on stimulating further demand through the development of new products that align with changes in lifestyle, such as shorter cooking times, the behavior of consumers seeking convenience, preferences for health, safety, and security, and the evolution of electrical appliances.

2. National sales and production bases.

The company has sales branches in eight major cities: Niigata, Sapporo, Sendai, Tokyo, Nagoya, Osaka, Hiroshima, and Fukuoka, as well as 11 sales offices covering each region. Dedicated sales personnel tailored to the actual market conditions of each region enhance the communication density with clients. The production bases include five factories in Niigata Prefecture, one factory in Otaru City, Hokkaido, one factory in Moriyama City, Shiga Prefecture, and one maitake cultivation center in Niigata Prefecture, totaling eight factories. The second factory at the headquarters, which started full operations in April 2023, consolidated production of the main product "Salad Stick" for crab sticks from multiple factories, achieving a 20% increase in total production of "Salad Stick" across the company. The company focuses its investments on products with the number one market share to establish a competitive advantage.

(Author: FISCO Guest Analyst Shuji Matsumoto)