Okamura Foods Co.,Ltd.

Business Details

Salmon trout is farmed at Nippon Salmon Farm Co., Ltd. (domestic) in Fukaura, Aomori Prefecture, and at Danish subsidiary Musholm A/S (overseas), with adult fish and roe sold both domestically and internationally. Domestically, an integrated production system covering everything from hatching to farming has been established. In Denmark, the primary purpose is roe harvesting. This is a vertically integrated upstream business that also supplies raw materials to the group's Domestic Processing Business and Overseas Processing Business. Because it includes overseas subsidiaries that adopt IFRS, fair value gains/losses based on IAS 41 are included in profit/loss.

Recent Overview

Domestic operations improved on higher unit prices and lower costs, but segment profit fell 27.3% year-on-year due to poor growth conditions and lower unit prices overseas

In the cumulative nine months of the current fiscal year (July 2025 to March 2026), the domestic aquaculture business saw manufacturing costs decline due to rising unit sales prices and cost benefits from scale expansion, while overseas, profitability declined due to poor growth conditions at sea farming sites and lower unit sales prices caused by market conditions, among other factors. Segment profit, including fair value gains/losses based on IAS 41 (¥307 million negative impact on cost of sales), was ¥539 million (72.7% of the same period the prior year). Enhanced cooperation with local governments on developing suitable farming sites and capital investment toward the introduction of an intermediate farming site and new barge vessels are progressing smoothly.

Key Products

Growth Drivers

• Expansion of production capacity through new construction and expansion investment in domestic intermediate farming sites (including the start of construction on the Tomarikawa intermediate farming site), targeting a mid-term goal of 12,000 tons
• Improved efficiency of domestic farming through technology transfer from advanced techniques at Danish subsidiary Musholm A/S (outdoor recirculating high-density production system, introduction of feeding barge vessels)
• Rising trend in roe (ikura) sales prices (price increases driven by domestic material shortages stemming from poor Hokkaido autumn salmon catches, etc.)
• Securing new suitable farming sites through enhanced cooperation with local governments on developing suitable farming sites
• Stable raw material supply and strengthened coordination with processing and wholesale businesses through group vertical integration

Risks

• Competitive pressure on fresh product sales volume and pricing from increased supply of Norwegian Atlantic salmon
• Constraints on overseas farming scale expansion due to stricter environmental regulations and lack of new license issuance in Denmark
• Risk of profit/loss volatility from fair value measurement of biological assets under IAS 41 (estimates of net realizable value and survival rates)
• Risk of poor growth and production volume fluctuation due to natural risks such as poor growth conditions, adverse weather, and disease at sea farming sites
• Risk of increased borrowings and rising interest rates associated with capital investment in farming facilities
• Impact on profit/loss from foreign exchange fluctuations (foreign currency-denominated transactions at the Danish subsidiary)
• Risk of declining unit sales prices due to market conditions (price volatility in the overseas aquaculture business)