Hakubaku Japan (Hakubaku) opted to invest in Australia in the late 1980s. In Hakubaku’s own words, Austraila’s wheat ‘delivered the perfect taste, appearance and texture for the perfect udon noodle’. It identified a suitable site at Ballarat and began operating the $A13 million factory in 1998, creating a thriving export business to the United States, Europe and Asian countries. Hakubaku has established itself as a significant contributor to the local economy and has forged close relationships with nearby farmers and an organic flour mill.
Investing in quality Australian wheat to produce Japanese noodles
Hakubaku is a family-owned company based in Yamanashi Prefecture, immediately northwest of Tokyo. The business which produces a variety of cereal based food staples for consumption in a range of marketsenjoys a 75 percent share of Japan’s barley market and is one of the country’s largest noodle manufacturers.
Hakubaku has a long-standing relationship with Australia, having imported wheat from this country since the 1980s. Late in the decade, the business determined that Australian wheat was the best possible raw material for making high-quality udon noodles. To produce these noodles, Hakubaku would need to establish a factory at a suitable location in Australia.
In 1996, the business settled on a site at Ballarat north-west of Melbourne, Victoria. This location was close to the organic wheat farmers of south-eastern Australia that produced the Rosella variety. Furthermore, Ballarat was relatively close to the Port of Melbourne and associated road and rail infrastructure.
An organic flour mill in Ballarat run by Allied Mills provided further incentive to Hakubaku to locate its manufacturing facility nearby. Hakubaku had already established a relationship with Allied Mills in the early 1990s when it imported value added wheat flour from the region for trials.
In 1996, Hakubaku invested $A13 million to build a plant that quickly increased production to a rate of about 2,000 tonnes. The Japanese company provided additional business and technical assistance to Allied Mills, and built an alliance with farmers at Balranald in the Riverina district of New South Wales.
These farmers were keen to supply organic wheat. Being able to supply the product as “certified Australian organic wheat” would make Hakubaku’s udon noodles unique in the company’s home market.
Hakubaku is a powerful advocate of organic farming in Australia. The business believes it is not widely appreciated that Australia has nearly one third (32 percent) of the world’s certified organic land.
The Japanese company made full use of Australian Government assistance when preparing to establish the plant. “They paved the way for our investment, with useful information, access to state governments, site visits and streamlined visa applications,” explained Hakubaku Australia Managing Director, Mr. Ryuji Nakamura.
Opening up markets for regional Victoria
The investment in the Ballarat-based plant has helped Hakubaku springboard successfully into Australian and international export markets.
The business initially was solely to target the Japanese dried noodle market with the added value of being organic. However, securing market growth in Japan proved challenging, due to entrenched competition in the Japanese domestic market from traditional non organic noodle suppliers who were able to supply at a cheaper price. The company appreciated that it needed to reconsider its export strategy and diversify away from Japan.
Hakubaku then focused on the Australian domestic market and secured a contract with major supermarkets. However, despite the strong level of interest, the small initial market size meant only 10 percent of Hakubaku’s production was geared to meet demand.
While this later climbed to 35 percent as Hakubaku redefined its supermarket categories, at the time the business wanted to springboard into lucrative new markets to maximise returns on its investment in capacity at the Ballarat plant.
Given the similarities of its food culture to those of North America and the United Kingdom, Australia proved to be an excellent test market to trial products that suited Western tastes.
Hakubaku explored opportunities in the United States and realised its consumers appreciated organic products. Its products quickly won acceptance in a market interested in Japanese cuisine and organic foods. The business then secured additional sales in the European Union and in South East Asian countries where noodles are very popular.
During a drop in supply of organic wheat, Hakubaku sought assistance from the Victorian Government. The Government assisted by finding a longer-term agribusiness partner for the company. Now, with the rise in price and popularity of organic foods, Hakubaku is confident of its longer-term future in Australian and international markets.
Hakubaku’s contribution to Australia extends into educating business partners about stringent requirements for packaging for international markets. Furthermore, the company has impressed upon its partners the need to maintain a very high and exacting standard across the supply chain, and this has been a mutually beneficial journey.
As Hakubaku Australia Director Shigetoshi Nagasawa says: “ Australians are never afraid to say what they think and their ideas have helped to develop Hakubaku Australia into the success it is today. Our factory staff have taken on even greater responsibility and we have come to trust in their capacity for high quality work and innovative solutions to problems.”