Hong Kong’s Fung Group restores historic Hamada soy sauce factory in Japan, aims to grow condiments venture into business worth up to US$1 billion

Kengo Kuma (left), a celebrated architect who grew up in Kumamoto, offered to restore the factory on a pro bono basis. Photo: Denise Tsang

  • With the 200-year-old factory restored and a string of acquisitions, Victor Fung is looking to conquer the global condiments market through his Heritage Foods group
  • In Hong Kong, a 500ml bottle of soy sauce fermented for 180 days is sold for about US$6, while Hamada ferments its soy sauce for 540 days and a 500ml bottle costs about US$76

Nearly three years after a severe earthquake wreaked havoc across Japan’s Kumamoto prefecture, on Kyushu island, the 200-year-old Hamada soy sauce factory has finally been restored.

Unveiling the repaired building on Monday was Hamada’s majority owner Victor Fung Kwok-king, the Hong Kong supply chain veteran and group chairman of the privately owned Fung Group, who is eyeing a slice of the multibillion-dollar condiments market.

Through his Heritage Foods Group, he hopes to grow the condiments venture into a proposition worth up to US$1 billion within a couple of years. He is counting on mergers and acquisitions to help him get there.

“We have begun looking seriously into the food business, and a good place to enter is the Asian sauces market,” Fung said. “People’s tastes around the world have become more diversified and they are willing to try new things, it’s not just ketchup in the West.”

The Fung Group, which he owns with younger brother William Fung Kwok-lun, went on a buying spree between 2015 and 2017, snapping up established household names in soy sauce and condiments in Singapore, Japan and Malaysia.

They took over Singapore’s 83-year-old Woh Hup in 2015, bought an 85 per cent stake in Hamada in 2016, and added 74-year-old Angel of Malaysia in 2017.

It was a change for the 110-year-old family business, which had long focused on supply chain services, with its controlling interest in Hong Kong-listed Li & Fung. It also runs Toys ‘R’ Us in Asia and distributes high-end fashion European brands Kent & Curwen and Gieves & Hawkes.

Victor Fung noted that the global market for heritage Asian sauces was growing at 4 per cent annually, with half that growth coming from Asia.

There are challenges with the ongoing US-China trade war, but he shrugged them off, saying: “Food is a daily necessity.” He also intends to sell his sauces in the United States.

Soy sauce on display at the Hamada factory in Kumamoto. Photo: Denise Tsang

The restored 200-year-old Hamada soy sauce factory in Kumamoto. Photo: Denise Tsang

Heritage Foods was set up four years ago. A month after it paid an undisclosed amount for a majority stake in Hamada, Kumamoto was devastated by a magnitude 7 earthquake.

“There was bad damage, no electricity, no water and it was leaking, but miraculously, the factory structure remained intact. We decided to restore it,” said Heritage Foods managing director Daniel Saw, recalling what he saw when he visited the factory.

Celebrated architect Kengo Kuma, 65, who grew up in the area, offered to restore the factory free of charge, returning its white plaster facade and black roof tiles to the way they looked before disaster struck.

“We used mainly bamboo and wood to retain the original flavour, as it was made of mud and bamboo,” said Kuma, designer of Tokyo’s centrepiece National Stadium for the 2020 Olympic Games.

Fung’s investment in Hamada is the first in Kumamoto by a Hong Kong firm.

Yasunari Hamada, 55, a seventh-generation member of the Hamada family, said: “We are happy to sell the business to Mr Fung, whose family has been in business for more than a century and will keep our tradition going. Our products will be exported, which is something we have never done before.”

Heritage Foods’ Saw said Hamada’s soy sauce concentrate would be sent to Malaysia for processing and bottling, before being put on the market at a relatively lower price than the Made in Japan product.

In Hong Kong, a 500ml bottle of soy sauce fermented for 180 days is sold at HK$40 (about US$6). Hamada ferments its soy sauce in Kumamoto for 540 days, and a 500ml bottle costs about HK$600 (US$76).

Singapore chef Pung Lu Tin, 59, who was also in Kumamoto to visit the Hamada factory, praised the delicate taste of its soy sauce.

“I will use Hamada soy sauce in my two restaurants, even though it costs more,” he said. “A good soy sauce will help me save time blending the right sauce, and bring out the best in my food.”

Press Media: South China Morning Post

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