Business / Corporate

Kansai railways branch out into new businesses to head off depopulation

JIJI

As part of efforts to raise earnings before population decline strikes their service areas, railways in the Kansai region are trying to expand into other businesses.

West Japan Railway Co. (JR West), for example, is marketing fish raised in land-based aquaculture facilities. It began cultivating mackerel at a facility that uses seawater pumped through underground pipes to tanks in Iwami, a coastal town in Tottori Prefecture, in 2017. The brand name is Ojosaba, a portmanteau of ojōsama (madam) and saba (mackerel).

JR West now raises six types of fishery products in four prefectures, including Beppin Sakura-Masu Urara cherry salmon in Imizu, Toyama Prefecture, and Tore-Ebi-Yan (Japanese tiger prawn) on an island in the Seto Inland Sea in Hiroshima.

JR West launched online sales in October.

“New businesses in areas along our rail lines will promote residency there in the long term,” Hiroaki Ishikawa, head of JR West’s division for creative projects, said. The railway aims to boost sales by holding day trips to the cultivation facilities and offering the fish during events at hotels it runs.

Osaka-based Keihan Holdings Co., the parent of Keihan Electric Railway Co., sells cosmetics and shampoo containing camellia and yuzu (citron) grown at partnered farms via subsidiary Biostyle Co.

“It may seem distant from (the railroad business), but it is very close from the perspective of safety and caring for the environment,” Keihan Chairman Yoshifumi Kato said of the new business.

Nankai Electric Railway Co., on the other hand, now runs a funeral hall business, while Hanshin Electric Railway Co. uses space under its elevated tracks to grow vegetables. “The business model used in the high economic growth period, such as the development of residential areas, has come to a turning point,” said Masayuki Taniuchi, an associate professor at Osaka University of Commerce who is an expert on the railway business.

“Promoting intangible businesses offering ‘experience-based consumption’ is the challenge for railway companies.”