August 2, 2011
Agura Bokujo on the verge of bankruptcy
After the discovery of beef contaminated with radioactive cesium emitted from the tsunami-crippled Fukushima number one nuclear power plant, a key Japanese operator of cattle farms with a distinctive business model, Agura Bokujo, is on the brink of bankruptcy.
The company, based in the town of Nasu, Tochigi Prefecture, eastern Japan, has already stopped making payments to its business partners, Tokyo Shoko Research Ltd. said.
On Monday (Aug 1), the company asked a Tokyo law office to investigate its claims and debt obligations, according to the credit research agency. Its liabilities totalled about JPY62 billion (US$801 million) at the end of March.
Agura Bokujo was forced to destroy some 15,000 cattle following an outbreak of foot-and-mouth disease in Miyazaki Prefecture, southwestern Japan, in 2010.
It now faces funding problems after cows contaminated with cesium have been found in Fukushima Prefecture, northeastern Japan, which hosts the Fukushima number one plant of Tokyo Electric Power Co.
Agura Bokujo, established in 1981, operates on a unique system in which it sells breeding cattle to investors and buys baby cows born to the cattle from the owners. The scheme, which has about 30,000 members, had attracted investor attention as a high-yield financial product.
It is one of the largest operators of cattle farms for high-end beef in Japan. It runs a total of 40 own farms nationwide, including Hokkaido, northernmost Japan, and the southernmost prefecture of Okinawa. In addition, Agura Bokujo has contracts with 338 farms.
Its sales totalled JPY102.7 billion (US$1.3 million) in fiscal 2010 that ended in March.