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Nov. 09, 2012
Katosangyo Co., Ltd.
Sumitomo Corporation

Establishment of New Investing Company and Expansion to Vietnamese Market in Overseas Wholesale Food Distribution Business

Katosangyo Co., Ltd. (Head Office: Nishinomiya-shi, Hyogo; President and CEO: Kazuya Kato) and Sumitomo Corporation (Head Office: Chuo-ku, Tokyo; President and CEO: Kuniharu Nakamura) hereby announces that they have jointly established Kato SC Asia Investment Co., Ltd. ("Kato SC") on October 23, 2012. This joint company has been organized as a holding company that will own shares of wholesale food distributors operating overseas.

 

In Asian countries, consumer spending has been increasing along with the economic growth, which is expanding the retail market at the same time. The retail industry in this region is undergoing a tremendous transformation in its distribution structure, in which traditional business models centering on small-sized local stores are being replaced by widely-spread networks built by flocks of leading retail chains rushing in from Japan, Europe and the US, as well as cost-effective local production functions deployed by major overseas food manufacturers. As the retail sector is developing, wholesale distribution functions, particularly those related to food products, are expected to play a greater role in supplying requested goods to stores in an efficient and timely manner. In this field, the Japanese-style wholesale system is highly effective in meeting the diverse needs and preferences of individual consumers utilizing established know-how in conducting and using detailed product and market analysis. Sharing these views, particularly on the expected increase in demand for food wholesale service, Sumitomo Corporation and Katosangyo jointly acquired shares of a food wholesale company under the Huaxin Group based in Guangzhou, capital city of Guangdong Province, China in 2007.

 

After five years, the two companies, who are long-term business partners, set up Kato SC with the intention of expediting managerial decision-making, thereby accelerating their overseas expansion in this business area. The first target selected for this recent collaborative project is Vietnam, where Kato SC plans to set up a food wholesale company and start operations by the end of 2013. The Vietnamese retail market, growing rapidly at an average annual rate of 23% over six years from 2004 to a total of 6.8 trillion yen in annual sales in 2010, has recently witnessed a rapid and extensive spread of new supermarkets, shopping malls and convenience stores throughout the country. In this growing market, Kato SC will develop business with grocery and shopping store chains from outside the country and large-scale local retail operators by promoting Japanese-style wholesale service models.

 

Following the launch of the Vietnam project, Katosangyo and Sumitomo Corporation are considering to integrate their Huaxin business with Kato SC and further expand their operation to other regions. They will work to develop this business with a view of helping enhance diet quality and diversity in Asian countries.

 

<About Kato SC Asia Investment Co., Ltd.>

-- Based in : Nishinomiya-shi, Hyogo, Japan
-- Capital : 200 million yen
-- Ownership ratio : Katosangyo Co., Ltd.:65%; Sumitomo Corporation: 35%
-- Main business : Supervision and management of overseas subsidiaries engaged in the wholesale distribution of food and consumer products
-- Established : October 23, 2012

Inquiries

Corporate Communications Department,
Sumitomo Corporation

TEL:+81-3-5166-3100News Release Contact Form

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