2004 Volume 56 Issue 5 Pages 531-547
The purpose of this paper is to clarify the relation between Japanese trading firms and their chicken procurement bases in China, from the viewpoint of economic geography. The results of this analysis are summarized as follows.
The import quantity of chickens into Japan has expanded since 1985. In this expansion of imported chickens, Japanese trading firms have played a very important role. In particular, the top 10 chicken importers procured more than 50per cent of raw chicken products imported into Japan in 1992.
The chicken procurement strategies by Japanese trading firms are examined, taking the cases of three typical firms ("S" Bussan Corporation, ITOCHU Corporation and Marubeni Corporation). These three firms held positions in the top 10 chicken importers in 1992, but procured chickens by different strategies. As the result of this analysis, it is clear that the three firms have increased their procurement quantity of processed chicken products in China since 1993. However, in China, they are apt to ensure multiple chicken suppliers, so they seem to develop their procurement bases inefficiently.
In China, the number of chicken suppliers exporting their products to Japan increased remarkably in the 1990s. In 1999, more than 50per cent of these chicken suppliers were located in Shandong province, where the increase rate of chicken production in the 1990s was the highest in China. Thus, the chicken procurement strategies by Japanese trading firms have had an influence on the remarkable development of chicken production in Shandong province. In fact, most of chicken suppliers of the three firms are located in Shandong province.
The selection mechanism of chicken suppliers by the three firms is examined. As the result, it is clear that they make much of the procurement alliances with foreign capital suppliers in China. As the foreign capital suppliers have the largest and newest processing factories, Japanese trading firms can procure chicken products stably. Moreover, the three firms think much of the procurement alliances with suppliers located in Shandong province. In Shandong province, they can procure various sub-materials for processed chicken products and can give frequent technical guidance to their suppliers.
Eventually, the chicken procurement strategies by Japanese trading firms are founded not only on reductions in costs, but also on dispersion of risk and diversification of procurement items.
