Japan’s Nippon Suisan Kaisha, also known as Nissui, is investing more outside of its century-old seafood business.
Nissui has long been a major player in the nation’s fisheries industry, now facing difficult times.
One goal is to become the world’s largest producer of eicosapentaenoic acid, or EPA, a fatty acid found in the flesh of coldwater fish thought to boost brain function and cardiovascular health.
For the year to March 2016, the company is seen reporting a record-high group net profit for the second year in a row. Credit goes to an aggressive restructuring effort.
Since EPA can prevent blood from easily clotting, it is used to prevent arteriosclerosis, the buildup of fats, cholesterol and other substances on the walls of arteries; heart attacks; and other conditions.
For the second-largest player in Japan’s seafood industry, becoming the world’s largest EPA producer might not be that tall of an order. The Tokyo-based company likely already controls the biggest slice of the market for medical-use EPA, which can be used to treat hyperlipidemia, an elevated level of fat particles in the blood.
In December, Nissui announced that it would spend 8 billion yen ($71.2 million) to build an EPA production plant in the Kashima Industrial Zone, in Ibaraki Prefecture, northeast of Tokyo. The facility will be next to an existing plant that turns out a variety of products, including EPA. The new plant will begin operations in 2018, when Nissui plans on doubling its current EPA production of 400 tons a year.
After the announcement was made, on Dec. 18, the company’s share price rose 40% through the last trading day of the year.
Nissui is stepping up production and cost-cutting efforts as it expands into the U.S., China and other markets. The company sees a lot of potential in the U.S., where EPA-related products remain little known. U.S. demand for EPA supplements and pharmaceuticals is expected to swell, Nissui board member Yoichi Sekiguchi said. The company hopes to get out in front of competitors in the country.
The fine chemicals division, which includes EPA and other pharmaceutical operations, expects fiscal 2015 sales to have been 26.1 billion yen, accounting for only 4% of the company’s total sales. But the division’s operating profit is seen at 4.5 billion yen, nearly 30% of total operating profit.
2016 Nikkei Inc.