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Business Insight

Echoes of 3.11: Disaster-Hit Seafood Industry Fishes for Foreign Business

Keiko Aso

The huge earthquake and tsunami that pummeled Japan's northeast region in 2011 devastated local businesses. The key regional industry of seafood processing was hit especially hard. Four years later, there has been some recovery, but 80% of small and medium-sized operations along the coast say sales are still lower than they were before the disaster. Some are making up for lost sales by reaching out to the global market.

The tsunami was over eight meters high when it hit the city of Ishinomaki in Miyagi Prefecture in 2011. It swept away houses and shops along the coast. It also came close to wiping out the local seafood processing industry.

Four years on, 40% of the processing facilities that lined the coast before the disaster are still not back in operation. The plants that managed to reopen face serious challenges.

One of the companies that did managed to get back on its feet processes oysters, scallops, seaweed and other products. Its factory was destroyed and two months later operations started in a makeshift building.

Sales manager Yasushi Kotouno was dismayed to find that some long-time buyers started getting seafood from suppliers in other areas. Now it is difficult to win those clients back. "I don't think supermarkets can turn their backs on the producers that helped them out while they couldn't buy from us," he explains.

The lack of clients in Japan forced the company to seek business opportunities overseas. It is a small company with a limited line of products, and doesn't have the brand power of its bigger rivals. Kotouno decided to establish a business consortium of five local seafood processors.

By working together, the group can offer over 100 products, including oysters, scallops, grilled mackerel and smoked yellowtail.

The change didn't come cheaply. In order to be competitive overseas, a new refrigeration system was bought at a cost of hundreds of thousands of dollars.

The system freezes seafood instantly, preventing cell damage that can lead to a loss of flavor.

With its expanded product lineup and new refrigeration system in place, the consortium launched sales abroad.

In February, Kotouno met with representatives of a food importer based in Taiwan. He offered them product samples, including oysters and salmon. The prospective customers were impressed. Kotouno explained that frozen oysters maintain freshness and taste even after 6 months. The technology had given him a competitive edge.

"We have the processing techniques to preserve the natural flavor of the food," he says. "I hope to take full advantage of Japan's great freezing technology in order offer foods that can be enjoyed in all seasons."

Kotouno and his partners are exporting to Hong Kong, Singapore and other territories. Their next goal is to double the consortium's exports.

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