Japanese cold-storage, logistics, and frozen-food company Yokohama Reito (Yokorei) is reorganizing its Norwegian subsidiaries so that they are not majority foreign-owned, as Norway enacts stricter rules about granting aquaculture sites to foreign companies.
The Yokohama-based company established itself in Norway through a business alliance that included capital participation with Ålesund, Norway-based salmon processor Hofseth International AS in 2015. This gave it a steady supply of Norwegian salmon to sell into North America, Europe, and Japan.
In 2016, Yokorei acquired all shares of Syvde Eiendom AS, the operator of three marine-product processing facilities in Norway, and made it into a subsidiary. A joint venture holding company named HIYR AS was formed with Hofseth and it acquired all shares in trout-farming company Fjordlaks Aqua AS, later renaming it to Hofseth Aqua AS. The new company was able to expand its volumes produced and it nabbed the first Aquaculture Stewardship Council certification for trout in Norway.
Yokorei thus put together an integrated supply chain including farming and processing. However, at a board of directors meeting on 28 July, the company made the decision to change its ownership in Hofseth Aqua.
According to a filing with the Tokyo Stock Exchange, where the company's shares are traded publicly, the Norwegian government is strengthening its stance of protecting the fishing industry as a national policy and is requiring companies to be majority Norwegian-owned. Yokorei's 50 percent stake in Hofseth represents "an obstacle to coordinating with local governments on the relocation of cages" to combat the industry's sea lice problem, according to the company's interpretation of the Norwegian government's new policy. In response, Hofseth Aqua AS will be made into a completely Norwegian company to ensure management freedom, Yokorei said.
Specifically, Yokorei will sell its share of the fish-farming company Hofseth Aqua to Hofseth International, and Hofseth Aqua will be turned into a wholly owned subsidiary of Hofseth International. Yokorei will continue as a shareholder in Hofseth International, with a 14 percent share. The reorganization will be completed by the end of September.
Yokorei reported its consolidated third-quarter results for fiscal year 2021 on 13 August. Its sales were down 3.6 percent compared to the same period last year and its operating income was also down, by 4.3 percent, while its ordinary income increased by 11.6. While the declines reflect the COVID-19-related disruptions in the restaurant business, they are not as severe as the company's losses in Q3 2019, when its sales fell by 19.3 percent, its operating income dropped by 33.1 percent, and its ordinary income fell by 31.5 percent.
Despite the declines, the company remained in the black and continued to pay dividends in both years.
