Snow Brand Foods Co., a meat processor and subsidiary of Snow Brand Milk Products Co., said Friday that it will sell its imported food additives operation to trading house Nissho Iwai Corp. on March 31.
Snow Brand Foods said it and Nissho Iwai have yet to formally agree on the transfer price, but Nissho Iwai said it plans to purchase the business for about 1 billion yen.
The operation in question is Snow Brand Foods’ imported products division, excluding health-care products. The division sells imported pectin and other food-thickening agents used in jellies and jams, as well as coffee and cocoa ingredients.
Snow Brand Foods said the food additives and ingredients business posted sales of 6.3 billion yen in the year to last March 31, accounting for 6.97 percent of the firm’s total sales.
Snow Brand Foods bought pectin and other food additives from trading companies, including Nissho Iwai, and sold them to food makers.
Nissho Iwai said that it has decided to buy the additives business because of its stable profitability, and that the purchase will be in line with the firm’s new three-year management plan starting in April, which designates the food business as one of its core operations.
In February, Snow Brand Milk Products announced a decision to liquidate Snow Brand Foods at the end of April because of the affiliate’s meat-mislabeling scandal, in which it falsely labeled imported beef as domestic to get governmental subsidies. intended to help the industry cope with the outbreak of mad cow disease in Japan.
The parent company is currently searching for buyers for Snow Brand Foods’ three main businesses, including its pork-processing operations, while it continues to seek ways to boost its own capital.
The National Federation of Agricultural Cooperative Associations, or Zenno, and trading firms, including Marubeni Corp., are currently in talks with Snow Brand Milk Products for a capital tieup with the parent company.
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