Governance For Yutaka Foods Corp

We are a long-term minority shareholder of Yutaka Foods Corporation (stock code: 2806 JP). 
 

Yutaka Foods Corporation (“Yutaka”) is a 51% owned listed subsidiary of Toyo Suisan Kaisha Ltd (stock code: 2875 JP), an international instant noodle company which produces the famous Maruchan brand of noodles.
 

Yutaka is primarily engaged in the manufacture and sale of liquid seasoned foods, granular foods, chilled foods and instant noodles and essentially acts as a manufacturing agent of the listed parent: more than 840% of raw materials is purchased from the parent, and 80% of sales is to the parent company

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Currently the market significantly undervalues Yutaka. Its market cap is significantly lower than its net cash position. This is not rational given the Company’s long term track record of profitability spanning more than 25 years.
 

We believe this is because of the market’s perception of capital inefficiency and poor corporate governance.
 

Our objective is to work with Yutaka’s management team to improve its capital efficiency and strengthen its corporate governance as this will greatly boost Yutaka’s value for all stakeholders.
 

We also seek Toyo Suisan’s support to improve the corporate governance of Yutaka. As Yutaka is a listed subsidiary of Toyo Suisan, we believe Toyo Suisan, as a respected international company, also has a responsibility to ensure that good corporate governance systems are in place.