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8 Ina Food Industry: A New Management Philosophy for Japanese Businesses Ina Food Industry Co. Ltd. was situated in the city of Ina, Nagano Prefecture, and surrounded by the soaring mountains of the Japanese Alps. Hiroshi Tsukakoshi, Ina Food’s 68-year-old chairman (see Exhibit 1), had led the company through an incredible 48 years of continuous revenue and profit growth (see Exhibit 2). The company was a leading manufacturer of powdered agar,1 a traditional gelatin product derived from seaweed (see Exhibit 3). In 2005, news about the medicinal benefits of its product led Company Name Ina Food Industry Co., Ltd. Chairman and CEO Hiroshi Tsukakoshi President and COO Osamu Inoue Date Established June 18, 1958 Capital ¥96.8 million Annual Sales ¥20,074 million (2005) Operating Income ¥3,819 million (2005) Head Office Address 5074 Nishiharuchika, Ina-City, Nagano, Japan Plants Sawando Plant, Kitaoka Plant, Fujisawa Plant, Inosawa Plant Branches Tokyo, Nagoya, Osaka Business Offices Sapporo, Sendai, Nagano, Fukuoka, Okayama Number of Employees 346 (in 2005) Ina Food Industry Co. Ltd. was established in 1958 to produce agar. This natural gelatin was originally developed as an important ingredient and used in traditional Japanese confectionery. Its manufacture was the product of a cottage industry by farmers, who used the coldest three months of the year for its production. Use of the product was avoided by large industry because: a) production was confined to only the three winter months of the year when the farmers were free; b) the quantity and quality was not stable or reliable; c) it appearing in both bars and a fibrous state; and d) it was the victim of a seasonally fluctuating market. Ina Food, therefore, concentrated on producing powdered agar, developed sources from which the raw material could be imported and stored throughout the year, and through the consolidation of production into a highly efficient process, achieved a stable market that eliminated fluctuating prices to develop a stronger demand. The history of the company was actually the history of the development of powdered agar in Japan. Recently, with the discovery of the cancer-resistant properties of oligosaccharides in agar, agar’s effectiveness as a deterrent of constipation, its use in meals for the aged etc., the distinctive effective uses of agar has been on the increase. Exhibit 1 Ina Food Profile ch_08(119-131).indd 119 2007/9/27 11:33:09 AM Cases on International Business and Finance in Japanese Corporations 120 1. Agar for professional use (Sawando plant) A stable quality and supply of agar were assured by an abundant supply of quality cold ground water. Enormous amounts of water go into the production of agar from seaweed. The Sawando plant is favored with a plentiful supply of ground water that remains at 12°C the year round. This natural environment ensures a stable supply and quality of its agar products. 2. Compound of water soluble gums (Fujisawa plant) The modern and hygienic Fujisawa plant produces Inagel, a compound of agar and water soluble gums. Inagel is a medicinal product produced in a completely dust-free environment. 3. Products for households (Kitaoka plant) A healthy product that helps in cooking, Kanten Papa is easy to use and made by hand. This is the very basis that mothers use in cooking at home and preparing family meals. Today, as Japanese people worry about preserving their family life, easy-to-use ingredients become all the more significant in preparing family meals. 4. Agarose business Ina Food is pushing the frontier of biotechnology. This attitude assures the company’s task of exploring new possibilities for agar. By upgrading its refining process, a new application for agar in the field of fine chemicals has been found. Research at Ina Food is not only for making profits, but also allows exited young researchers to pursue their dreams. 5. Processing machines department The company develops unique machinery for agar users. Their know-how of agar production is used to best advantage for agar users. 6. Restaurant business (Kanten Papa Gardens) Bountiful greenery contributes to the beauty of the town. The head office and the Kitaoka plant were built on a site surrounded by a forest of evergreens. The company has tried to preserve as many trees as possible. In 1988, it developed a corporate garden of over 60,000 square meters where wild flowers and grasses abound with mountain azaleas and hydrangeas ——all voluntarily cared for by the employees who treasure their beauty. Exhibit 3 Main Business...

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