McDonald’s boosts exports to Japan after quake

By Dow Jones Newswires-Wall Street Journal
Posted March 31 at 6:52 a.m.

McDonald’s Corp. has been forced to step up imports to Japan of items like sauces, oil and lettuce by between 10 percent and 20 percent to counter supply-chain disruptions and damage from the earthquake and resulting tsunami.

A McDonald’s spokeswoman declined to estimate the impact on the company’s bottom line, but noted that McDonald’s Corp. is a 50 percent partner with McDonald’s Japan. Profits from the partnership and a small royalty fee from Japan contribute less than 5 percent to the company’s operating income, she said.

The fast-food giant, which has more than 3,300 restaurants in Japan, saw hundreds of store closings in the initial days following the March 11 disaster. As of Wednesday, only 88 restaurants remained shut.

A number of the company’s processing plants and a distribution center were damaged by the tsunami, said Simone Hoyle, vice president of supply chain for McDonald’s Asia, Pacific, Middle East and Africa region.

In the aftermath of the quake, logistical problems, such as delays at ports and the short shelf life of produce, have cropped up, said Hoyle.

McDonald’s is also grappling with fuel shortages in Japan, making it difficult to transport food around the country, she said.

McDonald’s, which has long exported products to supply its restaurants in Japan, so far hasn’t faced any government hurdles, Hoyle says.

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