TOKYO -- Sumitomo Corp., Mitsubishi Corp. and other Japanese general traders are racing against each other to expand their poultry businesses as the country's consumers eat more of the meat amid lower prices and growing awareness of healthy eating.
Sumitomo plans to start importing the meat from Turkey, while Mitsubishi will start processing chicken in Thailand.
Chicken has become the most consumed meat in Japan, with demand also increasing elsewhere in the world partly because it is cheap and there are few religious taboos against it.
Sumitomo will start importing Turkish chicken in May, becoming the first Japanese company to do so. It will purchase thigh and breast meat from Turkish chicken processor HasTavuk and sell it to supermarkets in Japan. The Japanese company said HasTavuk's prices are about 20% lower than domestic products.
Sumitomo's plan became possible after Japan's Agriculture, Forestry and Fisheries Ministry sanctioned the import of Turkish chicken last September. The company aims to achieve annual sales of 2.5 billion yen to 3 billion yen ($22.9 million to $27.5 million) in the next few years.
Chicken has been the top selling meat in Japan since fiscal 2012. Annual per capita chicken consumption in fiscal 2016 was 13kg, an increase of 20% over the previous decade. About 60% of the country's chicken consumption is supplied by domestic producers. Products from Brazil and Thailand represent 90% of the imported amount, while Chinese imports are currently restricted following a bird flu outbreak in the country. The addition of Turkish chicken helps Sumitomo diversify the sources of its imports.
As Turkey is a Muslim-majority country, its producers are equipped to obtain halal food certification, which acknowledges the food is permissible under Islamic law for consumption.
"We can expect the Turkish halal chicken to capture demand from Muslim visitors to Japan as more of them are expected to come here ahead of the 2020 Tokyo Olympics," said Soshi Saimaru, executive officer of chicken importer and Sumitomo subsidiary SC Foods.
Itochu has increased its processed chicken imports in recent years from Thailand for group convenience store chain FamilyMart, which sells them as Famichiki fried chicken. Sales of the product tripled to over 200 million packs in fiscal 2016 from 66 million packs in fiscal 2009.
Mitsubishi plans to start processing chicken in Thailand as early as January 2019 through a local joint venture with Tokyo food processor Itoham Yonekyu Holdings and Thai animal feed and meat producer Betagro Group. The joint venture will build a 6 billion yen plant to produce products including fried and steamed chicken for export to Japan and Singapore, as well as for local consumption.
Japanese trading companies have also expanded their chicken business upstream in the supply chain, including such products as animal feed, expanding from just the middle and downstream levels where they raise chicken and process meat.
Mitsui & Co. is set to boost production of an amino acid product used in chicken feed through its U.S. subsidiary Novus International, which will build an additional plant by 2020 to increase its production capacity to about 380,000 tons annually, up 50% from the current level.
The product, called methionine, is an essential substance animals need for their growth, and helps them grow faster and bigger.
Global demand for methionine is estimated to total around 1.1 million tons a year and has been growing at 5% annually.
In 2017, Marubeni made Orffa International Holding, one of Europe's largest feed additive makers, its subsidiary. The Dutch company sells nutrition-enhancing feed additives to poultry growers in Asia and elsewhere. Marubeni's move is aimed at achieving synergy by combining its feeds with Orffa's additives.
The Japanese agriculture ministry estimates the global chicken consumption will grow to 115.7 million tons by 2027, up 26% from the average between 2014 and 2016.
Japan's general traders have traditionally grown by pursuing resource businesses, including energy and metals, but after suffering significant losses in the year ended March 2016 amid falling commodities prices, they have been boosting the shares of nonresource businesses in their portfolios to achieve more stable revenues.