Osaka – Sunday, December 18, 2011
It is over 9 months since the Japan disaster of earthquake and tsunami hit Tohoku district on March 11 this year. There are yet so many wreckages that need to be removed, people living in temporary housing, and so forth. Large-scale post-disaster reconstruction is about to start. The journey of the reconstruction, a nation-level issue, will be a long one.
In such a situation, Christmas Live Charity Events http://kitekesain.com/evtdisp.php?id=3905 have been held in Sendai, an important central city as the hub of Tohoku district that was hardly hit by the Japan disaster, in the afternoons of this weekend on 17th and 18th.
1. Who are the girls?
They are 8 members in early teens of a Japan pop group/idol unit called “Michinoku Sendai ORI☆HIMETAI” http://orihimetai.com/. The girls are all from Sendai, Miyagi prefecture; i.e. they are the victims of the Japan disaster. “Micninoku” is a Japanese word that means “Tohoku”, the North Eastern Japan.
“Orihime” literally means a female weaver but in this case, ORIHIME is the legendary Princess Weaver for whom Sendai holds famous Star Festival called “Tanabata” festival. According to the legend, ORIHIME meets the prince she loves called Hikoboshi once a year on July 7. The day is called “Tanabata” day and on this day people write their wish on Origami papers and put it on a bamboo tree, which is decorated like a Christmas tree. 4 famous festivals are held in Tohoku in summer and Tanabata festival the one held in Sendai, often called “City of Trees”.
2. Who produced Michinoku Sendai ORI☆HIMETAI?
It was a company called Muratac http://muratac.com/ based in Sendai. The company originally started its business from designing, manufacturing and supplying unique T-shirts upon request for events etc. and indeed it is the designer and supplier of the T-shirt for “24-Hour TV Programme” that has become a nationwide TV programme broadcasted every August. The events are also held aligning with the programme in major places/cities throughout Japan and the T-shirts are worn by the MCs and all staff members of the programme and the events.
The company has expanded the business to overall apparel such as stage costumes and festival costumes, and to planning and hosting events/stages including promotions (promotional goods, human resources for the events/stages).
With such business expansion, the company recently has entered scouting, developing and utilizing models and TV stars as well. For this reason, the company already had core competencies of producing and promoting a Japan pop group of Michinoku Sendai ORI☆HIMETAI.
3. What has Michinoku Sendai ORI☆HIMETAI been doing and why?
Since the group was produced in August, the members, although still amateurs, have been practicing hard to sing and dance day in day out so that they can deliver smile and courage to the people in the area where the progress in reconstruction has been slow through their stage event activities as well as reaching out to reconstruction-markets and visiting temporary houses.
With the earthquake and tsunami, everyone from adults to children has suffered from unprecedented damage, devastating them all. Everything from houses, schools and everything washed away and flattened.
The group wants to support areas which still face many hard-to-solve challenges in not only Miyagi but also Iwate and Fukushima. They also want to extend their gratitude to all people who sent money and goods from Japan and abroad for the sake of disaster victim children ever since immediately after the disaster outbreak.
They are determined to continue supporting not only disaster from victim children to elders side by side in the disaster-hit areas through their volunteer activities. Taking the advantage of their location, Sendai, they aim to send out information on not only the disaster but also wonderful charm of Sendai, Miyagi and Tohoku district to people around the globe.
They will be happy if readers of this blog post find people here in Tohoku forward-looking, cheerful and strong through ORIHIMETAI as seen in the lyric of ORI☆HIMETAI reconstruction supporting song “I’m Home” – “Once I was a bird I could not fly. But now no tear no time to cry. Believing you, it's nice to know you'll standby me〜”
It was with such a background that the Christmas live events performed by the group have been held in Sendai this weekend.
4. What are the author’s final thoughts?
The company and the group members must have overcome mental hardships as well as physical ones to have started this kind of initiative. It is because the author assumes that the victims of the disaster had been (or still are) mentally damaged and that there are so many things they would not really want to think or say about the disaster.
The author, just like many other people, feels it was with the characteristics of Tohoku people who are known for their patience that there has not been violence, chaos etc. even if the reconstruction process has been slow. If it had been in Kansai (western Japan), for example in Osaka, it probably had been quite different because Osaka people are known for being rather short-tempered.
The author is very much impressed with the initiative originated from Sendai by the company based in Sendai and their girls and that the initiative is planned to be spread to Iwate and Fukushima. Large-scale post-disaster reconstruction initiative is about to start and she believes there are things that each one of us around the globe can do to help drive such an initiative.
Resources:-
When post-disaster reconstruction has been slow, Muratac, an apparel company based in Sendai (an important city as a hub in Tohoku region, hardly hit by the Japan disaster in March 2011), produced Michinoku Sendai ORI☆HIMETAI, Japanese pop group of 8 girls in early teens from Sendai established in August to deliver smiles and encouragement through singing, dancing and visiting temporary housings. Large-scale reconstruction is about to start. Each one of us has something that we can do to help such an initiative.
2011年12月11日日曜日
Japan, China and South Korea Start FTA Negotiation
Osaka - Sunday, December 11, 2011
Nikkei, Japanese leading newspaper specialized in business and economy, reported today that Japan, China and South Korea are to start negotiation to conclude a FTA (Free Trade Agreement) in summer 2012. The three countries plan to define the direction of the negotiation start kickoff in the joint study about FTA among the three countries next week, and to officially confirm in the summit among the three countries to be held in spring 2012.
They also plan to reach a substantive agreement on Investment Agreement including such topics as preservation of intellectual properties.
1. Why Japan decided to start the negotiation now?
In November Japan expressed its intention of joining the negotiation to become a member of TPP. According to the analysis of the Japanese government, China and South Korea have become more proactive in negotiating with Japan about the topic in this trend and thus would like to take the opportunity to move forward on the FTA negotiation with the two countries.
2. How will the FTA negotiation proceed?
The 7th meeting of joint study among industry, academia and public sector to discuss conclusion of FTA among the three countries will be held in Pyeongchang December 14 – 16. It is anticipated that in the report to be announced on the last day a proposal to start the negotiation soon will be included, in addition to stance of each country regarding liberalization of trade and investment.
After the announcement of the report, governments of the three countries are to start drafting organization and schedule of the negotiation on the practical level. It is planned that in spring 2012 the official agreement discussion of the FTA is to be included in the summit agenda participated by the three countries to be held in China. The three countries aim to start the negotiation in summer 2012 to reach an agreement and sign smoothly and quickly.
3. What would be the focus of the negotiation?
It would be whether how cooperative the three countries can be to reach an agreement.
Japan would like to promote region scale economic alliance in Asia Pacific through Investment Agreement and FTA. China is rather reactive in lowering tariff of industrial products because they feel it would be a negative factor in developing the industry of their country.
In such a situation, it will not be easy for the three countries to reach an agreement. There are many hurdles to overcome regarding conditions even after the FTA negotiation started among the three countries.
4. What is the additional discussion planned between Japan and South Korea?
The Japanese government will also proceed simultaneously with negotiation to liberalize bi-lateral FTA with South Korea. The government started to coordinate to re-start in the first half of 2012 the negotiation of EPA (Economic Partnership Agreement) between Japan and South Korea that has been halted since 2004. This topic is planned to be included in the agenda of the meeting between Prime Minister Noda of Japan and President Lee Myung-bak of the Republic of Korea when the President visits Japan on December 17.
5. What is the plan of the Investment Agreement among the three countries?
It is anticipated that the substantive agreement is reached regarding the Investment Agreement among the three countries to deregulate investment from foreign capitals in the 14th meeting to be held on December 14. And then the leaders of the three countries are to sign the agreement in spring 2012 to make it effective by the end of 2012.
In the Investment Agreement, topics such as rules for intellectual property preservation and dispute settlement based on the International Law will be included. The agreement also aims to loosen the regulation of local content and technology transfer.
Resources:-
Japan, China and South Korea are to start negotiation to conclude FTA in summer 2012. The three countries plan to define the direction of the negotiation start in the joint study about FTA among the three countries next week, and to officially confirm in the summit among the three countries to be held in spring 2012. They also want to reach a substantive Investment Agreement including such topics as intellectual properties preservation.
Nikkei, Japanese leading newspaper specialized in business and economy, reported today that Japan, China and South Korea are to start negotiation to conclude a FTA (Free Trade Agreement) in summer 2012. The three countries plan to define the direction of the negotiation start kickoff in the joint study about FTA among the three countries next week, and to officially confirm in the summit among the three countries to be held in spring 2012.
They also plan to reach a substantive agreement on Investment Agreement including such topics as preservation of intellectual properties.
1. Why Japan decided to start the negotiation now?
In November Japan expressed its intention of joining the negotiation to become a member of TPP. According to the analysis of the Japanese government, China and South Korea have become more proactive in negotiating with Japan about the topic in this trend and thus would like to take the opportunity to move forward on the FTA negotiation with the two countries.
2. How will the FTA negotiation proceed?
The 7th meeting of joint study among industry, academia and public sector to discuss conclusion of FTA among the three countries will be held in Pyeongchang December 14 – 16. It is anticipated that in the report to be announced on the last day a proposal to start the negotiation soon will be included, in addition to stance of each country regarding liberalization of trade and investment.
After the announcement of the report, governments of the three countries are to start drafting organization and schedule of the negotiation on the practical level. It is planned that in spring 2012 the official agreement discussion of the FTA is to be included in the summit agenda participated by the three countries to be held in China. The three countries aim to start the negotiation in summer 2012 to reach an agreement and sign smoothly and quickly.
3. What would be the focus of the negotiation?
It would be whether how cooperative the three countries can be to reach an agreement.
Japan would like to promote region scale economic alliance in Asia Pacific through Investment Agreement and FTA. China is rather reactive in lowering tariff of industrial products because they feel it would be a negative factor in developing the industry of their country.
In such a situation, it will not be easy for the three countries to reach an agreement. There are many hurdles to overcome regarding conditions even after the FTA negotiation started among the three countries.
4. What is the additional discussion planned between Japan and South Korea?
The Japanese government will also proceed simultaneously with negotiation to liberalize bi-lateral FTA with South Korea. The government started to coordinate to re-start in the first half of 2012 the negotiation of EPA (Economic Partnership Agreement) between Japan and South Korea that has been halted since 2004. This topic is planned to be included in the agenda of the meeting between Prime Minister Noda of Japan and President Lee Myung-bak of the Republic of Korea when the President visits Japan on December 17.
5. What is the plan of the Investment Agreement among the three countries?
It is anticipated that the substantive agreement is reached regarding the Investment Agreement among the three countries to deregulate investment from foreign capitals in the 14th meeting to be held on December 14. And then the leaders of the three countries are to sign the agreement in spring 2012 to make it effective by the end of 2012.
In the Investment Agreement, topics such as rules for intellectual property preservation and dispute settlement based on the International Law will be included. The agreement also aims to loosen the regulation of local content and technology transfer.
Resources:-
Japan, China and South Korea are to start negotiation to conclude FTA in summer 2012. The three countries plan to define the direction of the negotiation start in the joint study about FTA among the three countries next week, and to officially confirm in the summit among the three countries to be held in spring 2012. They also want to reach a substantive Investment Agreement including such topics as intellectual properties preservation.
Japanese Companies Joining War for Global Talent (Part 2)
Osaka – Sunday, December 11, 2011
This is the succeeding article of the previous article Japanese Companies Joining War for Global Talent (Part 1) in which how Japanese companies started in earnest acquiring, developing and retaining global talent.
In this article, the author would like to introduce how 3 Japanese companies have started to develop global talent.
1. Hitachi
1) Overview of the company
Hitachi, established in 1910, is a leading Japanese company in electronics and heavy industry. The company initiates global businesses focusing on “society innovation business” that provide social infrastructure supported by information and telecommunication system businesses.
There are approximately 33,000 employees (non-consolidated) and 360,000 employees (consolidated) as of March 2011.
2) Basic concept of the global talent development
The objective of global talent development is to promote local driven management and accelerate business globalization by transforming to their management to a new human resource management from globalization perspective.
Their policy is to roll out human resource management and development aligning to each business of the variety of businesses the company is engaged in.
3) Main targets of the development programmes
The company has developed programmes for 4 types of global businesses; international (e.g. electron microscope business), global (e.g. semiconductor business), multi-national (e.g. home electronics business) and trans-national (e.g. large system business such as thermal power business. The company identified requirements and calculated the number of employees necessary for each type.
4) Main development programmes
(1) Globalization of Japanese employees working in Japan
Young employees are sent to International Assignments 1-3 months leveraging internal posting system.
(2) Developing global leaders
Off-JT developing programme for lines managers in Japan are reviewed focusing on developing leadership skills required in global business.
2. JGC Corporation
1) Overview of the company
JGC Corporation, established in 1928 as the Japan’s first engineering company, has been managing projects by engineers around the globe. Their business and management policy is to strengthen their core business and expand/grow business investment to become “Program Management Contractor & Investment Partner”.
There are 2,137 employees as of March 31, 2011.
2) Basic concept of the global talent development
The objective of global talent development is to develop employees so that they can lead diverse people of different background, work style and values, thus the company can initiate and manage projects as a global engineering company.
The total programme focuses on experience in real business OJT in addition to classroom lectures.
3) Main targets of the development programmes
The company aims to make all their employees be able to work globally, and not developing only selected employees as “global talent” or “employees to be sent to International Assignment”.
This is because the company believes that all employees in all functions in all layers of the organization require skills to lead and manage diverse people.
4) Main development programmes
The company provides various development programmes by layers of organization.
For example, all employees with work history in their company of maximum 4 years are sent to an International Assignment 3 – 6 months such as working in a shop floor of overseas plant construction. Also some employees with more work experience are selected to be sent to an International Assignment for 1 year such as working in western companies.
3. Fuji Xerox
1) Overview of the company
Fuji Xerox, a global company of copy/fax and information/communication equipments, was established in 1968 as the joint venture of Fuji Film (now Fuji Film Holdings) and Xerox (now Xerox Limited). The company has a slogan of “Best Partner, Fuji Xerox” and provides document services for office productivity improvement and management quality enhancement.
There are 9,627 employees as of March 31, 2011.
2) Basic concept of the global talent development
The comprehensive development programme is designed based on the philosophy that developing operation and communication skill required in live global business for practical use is more important than simply developing English language skills.
3) Main targets of the development programmes
The main target used to be a group of selected employees, who were sent overseas for International Assignment.
However, the company realized that all employees need to have a certain level of global business skill and mindset and therefore added a new course for sales person responsible for Japan market.
4) Main development programmes
(1) Overseas business training, integrating English language training and International Assignment
There used to be only a 1-1/2 year course for 10 employees a year. Now the company added a 2-1/2 year course for 20 employees a year, from which employees from in Japan domestic sales department also can benefit.
(2) Addition of global education in current training
Session of global business is added to current annual trainings and trainings for selected sales persons.
4. The author’s final thoughts
Japanese companies are far behind their western counterparts in global talent development. Most of their development programmes used to be targeting only on a selected employees who are to be appointed long-term International Assignment (3-5 years) and/or employees who are to be engaged in international and overseas related operation. Also their development and training programmes used to focus on English skills.
However, at least some of them started to realize all their employees need to have skills, competencies and mindset to work globally to certain extent. Also a few leaders in global talent development are now aware of the necessity and importance of leading and managing members of diverse team.
The author sincerely hopes that more Japanese companies would follower such companies. She hopes that they would implement programmes to make their employees learn from live experience the skills, competencies and mindset required to work in a global business environment, collaborating with members of the global network.
References:-
“Global Talent Development”, featured article of Vol. 3808 of Rosei Jiho issued on October 28, 2011, p10-p73 (in Japanese)
https://www.rosei.jp/readers
Resources:-
Japanese companies are still far behind their western counterparts but they have started to evolve their global talent development programme when they used to provide such programme to only selected employees, focusing on English language skills. Some of them started to provide programmes to all their employees including those in Japan sales department, aiming to develop their employees so that they can lead and manage diverse team members.
This is the succeeding article of the previous article Japanese Companies Joining War for Global Talent (Part 1) in which how Japanese companies started in earnest acquiring, developing and retaining global talent.
In this article, the author would like to introduce how 3 Japanese companies have started to develop global talent.
1. Hitachi
1) Overview of the company
Hitachi, established in 1910, is a leading Japanese company in electronics and heavy industry. The company initiates global businesses focusing on “society innovation business” that provide social infrastructure supported by information and telecommunication system businesses.
There are approximately 33,000 employees (non-consolidated) and 360,000 employees (consolidated) as of March 2011.
2) Basic concept of the global talent development
The objective of global talent development is to promote local driven management and accelerate business globalization by transforming to their management to a new human resource management from globalization perspective.
Their policy is to roll out human resource management and development aligning to each business of the variety of businesses the company is engaged in.
3) Main targets of the development programmes
The company has developed programmes for 4 types of global businesses; international (e.g. electron microscope business), global (e.g. semiconductor business), multi-national (e.g. home electronics business) and trans-national (e.g. large system business such as thermal power business. The company identified requirements and calculated the number of employees necessary for each type.
4) Main development programmes
(1) Globalization of Japanese employees working in Japan
Young employees are sent to International Assignments 1-3 months leveraging internal posting system.
(2) Developing global leaders
Off-JT developing programme for lines managers in Japan are reviewed focusing on developing leadership skills required in global business.
2. JGC Corporation
1) Overview of the company
JGC Corporation, established in 1928 as the Japan’s first engineering company, has been managing projects by engineers around the globe. Their business and management policy is to strengthen their core business and expand/grow business investment to become “Program Management Contractor & Investment Partner”.
There are 2,137 employees as of March 31, 2011.
2) Basic concept of the global talent development
The objective of global talent development is to develop employees so that they can lead diverse people of different background, work style and values, thus the company can initiate and manage projects as a global engineering company.
The total programme focuses on experience in real business OJT in addition to classroom lectures.
3) Main targets of the development programmes
The company aims to make all their employees be able to work globally, and not developing only selected employees as “global talent” or “employees to be sent to International Assignment”.
This is because the company believes that all employees in all functions in all layers of the organization require skills to lead and manage diverse people.
4) Main development programmes
The company provides various development programmes by layers of organization.
For example, all employees with work history in their company of maximum 4 years are sent to an International Assignment 3 – 6 months such as working in a shop floor of overseas plant construction. Also some employees with more work experience are selected to be sent to an International Assignment for 1 year such as working in western companies.
3. Fuji Xerox
1) Overview of the company
Fuji Xerox, a global company of copy/fax and information/communication equipments, was established in 1968 as the joint venture of Fuji Film (now Fuji Film Holdings) and Xerox (now Xerox Limited). The company has a slogan of “Best Partner, Fuji Xerox” and provides document services for office productivity improvement and management quality enhancement.
There are 9,627 employees as of March 31, 2011.
2) Basic concept of the global talent development
The comprehensive development programme is designed based on the philosophy that developing operation and communication skill required in live global business for practical use is more important than simply developing English language skills.
3) Main targets of the development programmes
The main target used to be a group of selected employees, who were sent overseas for International Assignment.
However, the company realized that all employees need to have a certain level of global business skill and mindset and therefore added a new course for sales person responsible for Japan market.
4) Main development programmes
(1) Overseas business training, integrating English language training and International Assignment
There used to be only a 1-1/2 year course for 10 employees a year. Now the company added a 2-1/2 year course for 20 employees a year, from which employees from in Japan domestic sales department also can benefit.
(2) Addition of global education in current training
Session of global business is added to current annual trainings and trainings for selected sales persons.
4. The author’s final thoughts
Japanese companies are far behind their western counterparts in global talent development. Most of their development programmes used to be targeting only on a selected employees who are to be appointed long-term International Assignment (3-5 years) and/or employees who are to be engaged in international and overseas related operation. Also their development and training programmes used to focus on English skills.
However, at least some of them started to realize all their employees need to have skills, competencies and mindset to work globally to certain extent. Also a few leaders in global talent development are now aware of the necessity and importance of leading and managing members of diverse team.
The author sincerely hopes that more Japanese companies would follower such companies. She hopes that they would implement programmes to make their employees learn from live experience the skills, competencies and mindset required to work in a global business environment, collaborating with members of the global network.
References:-
“Global Talent Development”, featured article of Vol. 3808 of Rosei Jiho issued on October 28, 2011, p10-p73 (in Japanese)
https://www.rosei.jp/readers
Resources:-
Japanese companies are still far behind their western counterparts but they have started to evolve their global talent development programme when they used to provide such programme to only selected employees, focusing on English language skills. Some of them started to provide programmes to all their employees including those in Japan sales department, aiming to develop their employees so that they can lead and manage diverse team members.
2011年12月4日日曜日
Japanese Companies Joining War for Global Talent (Part 1)
Osaka – Sunday, December 4, 2011
As explained in the previous articles How Japanese Companies Started Acquiring and Retaining Global Talent and Japanese Companies Are Changing Global Talent Development Strategy, globalization of their human to globalize their organization and business is now the focus of the Japanese companies to compete and survive in today’s global economy. That is to say they have entered the War for Global Talent with their competitors of non-Japanese global companies.
There have been online and offline articles in variety of media about this topic lately and having read them the author realized that there are 4 main things the Japanese companies are focusing on, which she would like to briefly introduce in this article.
1. Acquire Non-Japanese New Graduates
Recruiting non-Japanese employees used to be only done locally; i.e. local employees used to be hired, assigned and developed all locally and they were mostly assigned to local positions.
However, Japanese companies started to realize that they need to acquire talent from around the globe. And because recruiting mid-careers is still not so popular in Japan, they have started to recruit non-Japanese new graduates.
1) Recruit Non-Japanese Who Have Studied in Universities in Japan
This is the first attempt by the Japanese companies because non-Japanese students who have been studying in universities in Japan would be fluent in Japanese and are used to Japanese culture. This is extremely important for Japanese companies because one of the requirements that most Japanese companies present in recruiting non-Japanese new graduates is proficiency in Japanese.
This was the case of an American colleague of the author of her previous employer and the case of her colleagues in her current site. They are both very fluent in Japanese, especially the latter, who has married to a Japanese wife and has the visa with which he can to live in Japan forever.
2) Recruit Non-Japanese Who Have Studied in Universities Outside Japan
This option is quite new for Japanese companies. The new graduates who are recruited are mostly Chinese university students from prestigious universities in China.
For example, Nikkei, Japan’s leading newspaper specialized in business and economy, reported on December 3 that a Japanese leading recruiting company called Recruit planned and hosted events in Beijing and Shanghai in November. 42 Japanese companies including NTT, Kyocera, Kao and Mitsubishi Corporation participated in the event.
They interviewed university students who are to graduate from top class universities such as Tshinghua University in summer of 2012. They were successful in meeting and interviewing as many as 1,000 students who were fluent in Japanese as well as English. Such students are interested in working for Japanese companies because they want to see whether their competencies and skills are competitive outside their country. Approximately 150 students were offered the job.
The reason for Japanese companies now proactively recruiting Chinese new graduates is the fact that they would be able to hire globally competitive Chinese students, when China is an important market in their global business strategy. This attributes to the fact that there are as many as 7 million students in China in a year group, which is 10 times as many as in Japan.
Chinese students who attend such an event are in general more fluent in English than Japanese students, and can speak Japanese as well.
Also according to Mr. Obata, who had started his career in the company Recruit and has recently been engaged in business of recruiting Chinese university new graduates in China, Chinese university students are in general also more conscious than Japanese students in improving their competitiveness in the global labour market.
The company Recruit commented that majority of the 42 companies are expecting to hire students who could be potential candidates to fill key management positions in the future.
2. Assign Non-Japanese to Key Management Positions Throughout the Group Company
Most employees working in Global HQ in Japan have been Japanese and the top and/or senior management of the worldwide local sites have been Japanese expatriates from the Japan HQ; however, that will also change gradually.
1) Diversify Employees Working in Global HQ in Japan
According to Nikkei, Aeon, the leading retailer in Japan, has set a target of making half of their employees working in Global HQ in Japan non-Japanese by 2020.
This is why they only did seminar for recruiting new graduates only once in Japan this year and they spent all remaining resources to doing seminars abroad to recruit non-Japanese students. In fact, 400 students out of 2,000 who will join them in April 2012 are non-Japanese students who are to graduate from universities abroad.
2) Localize and/or Diversify Local Management
This had started in such companies as Panasonic around 2005 and according to Nikkei, Aeon and Hitachi also started.
This is to allocate optimum human resource to key management positions of worldwide local sites, breaking the “glass ceiling”. This very often is assigning high-performing local employees to such positions who better understand all the circumstances of the country thus they would have better chance of managing the site and the employees compared to Japanese expatriates from the Global HQ.
For this reason, Aeon assigned a Malaysian female who had been working with them throughout her career as the top management of their Malaysia site this June.
Hitachi started to review their human resources of senior management positions of their worldwide sites this year, with the objective of achieving optimum allocation of their human resources based on their HRM system around the globe, especially in emerging markets.
3. Integrate Worldwide Human Resource DB and Evaluation System
Global companies such as IBM and P&G have been going through globalization since 1990s to establish a system in which information of high-performing worldwide employees are shared so that they can allocate with optimization employees to key management positions around the globe. Senior management of the group company of global companies is composed of diverse talent, such as Nestle, whose senior management is composed from people from 9 different nationalities.
Such HR system inevitable to attract and retain best talent from around the globe had not been established in Japanese companies; however, a few innovative Japanese companies started to realize the necessity of such system.
According to Nikkei, Hitachi integrated information of their 370,000 group-wide human resources in their DB and grades of worldwide line managers earlier this year. This is to select optimum human resources from worldwide for key positions and projects in order to compete with their global counterparts.
Fuji Xerox also has a plan of establishing a similar human resource DB with the very same objective, according to Rosei Jiho, a Japanese HRM magazine. They are fully aware that they need to integrate HR system which is currently different from country to country to develop a common platform throughout the group, especially evaluation and rewards system.
4. Provide Ttraining and International Assignments
This has been the primary ways of developing global talents and similarly to their global counterparts, Japanese companies have been improving and evolving their global talent development.
The author would like to introduce some of the examples in the upcoming article.
References:-
Nikkei’s article on p1 issued on December 3, 2011, about leveraging human resources by Japanese companies (in Japanese)
“Global Talent Development”, featured article of Vol. 3808 of Rosei Jiho issued on October 28, 2011, p10-p73 (in Japanese)
https://www.rosei.jp/readers
Online articles about recent recruiting trends in China and Japan by Japanese companies written by Mr. Shigekazu Obata (in Japanese)
http://diamond.jp/category/s-syukatsurepo
Resources:-
Japanese companies have been far behind in acquiring, developing, retaining and allocating with optimization global talent but they have realized that globalization of their business and organization is critical to compete and survive in the today’s global economy and that they would need to join War for Global Talent. Thus they have in earnest started recruiting non-Japanese new graduates from around the globe, localizing and diversifying people assigned to key worldwide management positions, and integrate group-wide human resource information, in addition to improving training and International Assignments.
As explained in the previous articles How Japanese Companies Started Acquiring and Retaining Global Talent and Japanese Companies Are Changing Global Talent Development Strategy, globalization of their human to globalize their organization and business is now the focus of the Japanese companies to compete and survive in today’s global economy. That is to say they have entered the War for Global Talent with their competitors of non-Japanese global companies.
There have been online and offline articles in variety of media about this topic lately and having read them the author realized that there are 4 main things the Japanese companies are focusing on, which she would like to briefly introduce in this article.
1. Acquire Non-Japanese New Graduates
Recruiting non-Japanese employees used to be only done locally; i.e. local employees used to be hired, assigned and developed all locally and they were mostly assigned to local positions.
However, Japanese companies started to realize that they need to acquire talent from around the globe. And because recruiting mid-careers is still not so popular in Japan, they have started to recruit non-Japanese new graduates.
1) Recruit Non-Japanese Who Have Studied in Universities in Japan
This is the first attempt by the Japanese companies because non-Japanese students who have been studying in universities in Japan would be fluent in Japanese and are used to Japanese culture. This is extremely important for Japanese companies because one of the requirements that most Japanese companies present in recruiting non-Japanese new graduates is proficiency in Japanese.
This was the case of an American colleague of the author of her previous employer and the case of her colleagues in her current site. They are both very fluent in Japanese, especially the latter, who has married to a Japanese wife and has the visa with which he can to live in Japan forever.
2) Recruit Non-Japanese Who Have Studied in Universities Outside Japan
This option is quite new for Japanese companies. The new graduates who are recruited are mostly Chinese university students from prestigious universities in China.
For example, Nikkei, Japan’s leading newspaper specialized in business and economy, reported on December 3 that a Japanese leading recruiting company called Recruit planned and hosted events in Beijing and Shanghai in November. 42 Japanese companies including NTT, Kyocera, Kao and Mitsubishi Corporation participated in the event.
They interviewed university students who are to graduate from top class universities such as Tshinghua University in summer of 2012. They were successful in meeting and interviewing as many as 1,000 students who were fluent in Japanese as well as English. Such students are interested in working for Japanese companies because they want to see whether their competencies and skills are competitive outside their country. Approximately 150 students were offered the job.
The reason for Japanese companies now proactively recruiting Chinese new graduates is the fact that they would be able to hire globally competitive Chinese students, when China is an important market in their global business strategy. This attributes to the fact that there are as many as 7 million students in China in a year group, which is 10 times as many as in Japan.
Chinese students who attend such an event are in general more fluent in English than Japanese students, and can speak Japanese as well.
Also according to Mr. Obata, who had started his career in the company Recruit and has recently been engaged in business of recruiting Chinese university new graduates in China, Chinese university students are in general also more conscious than Japanese students in improving their competitiveness in the global labour market.
The company Recruit commented that majority of the 42 companies are expecting to hire students who could be potential candidates to fill key management positions in the future.
2. Assign Non-Japanese to Key Management Positions Throughout the Group Company
Most employees working in Global HQ in Japan have been Japanese and the top and/or senior management of the worldwide local sites have been Japanese expatriates from the Japan HQ; however, that will also change gradually.
1) Diversify Employees Working in Global HQ in Japan
According to Nikkei, Aeon, the leading retailer in Japan, has set a target of making half of their employees working in Global HQ in Japan non-Japanese by 2020.
This is why they only did seminar for recruiting new graduates only once in Japan this year and they spent all remaining resources to doing seminars abroad to recruit non-Japanese students. In fact, 400 students out of 2,000 who will join them in April 2012 are non-Japanese students who are to graduate from universities abroad.
2) Localize and/or Diversify Local Management
This had started in such companies as Panasonic around 2005 and according to Nikkei, Aeon and Hitachi also started.
This is to allocate optimum human resource to key management positions of worldwide local sites, breaking the “glass ceiling”. This very often is assigning high-performing local employees to such positions who better understand all the circumstances of the country thus they would have better chance of managing the site and the employees compared to Japanese expatriates from the Global HQ.
For this reason, Aeon assigned a Malaysian female who had been working with them throughout her career as the top management of their Malaysia site this June.
Hitachi started to review their human resources of senior management positions of their worldwide sites this year, with the objective of achieving optimum allocation of their human resources based on their HRM system around the globe, especially in emerging markets.
3. Integrate Worldwide Human Resource DB and Evaluation System
Global companies such as IBM and P&G have been going through globalization since 1990s to establish a system in which information of high-performing worldwide employees are shared so that they can allocate with optimization employees to key management positions around the globe. Senior management of the group company of global companies is composed of diverse talent, such as Nestle, whose senior management is composed from people from 9 different nationalities.
Such HR system inevitable to attract and retain best talent from around the globe had not been established in Japanese companies; however, a few innovative Japanese companies started to realize the necessity of such system.
According to Nikkei, Hitachi integrated information of their 370,000 group-wide human resources in their DB and grades of worldwide line managers earlier this year. This is to select optimum human resources from worldwide for key positions and projects in order to compete with their global counterparts.
Fuji Xerox also has a plan of establishing a similar human resource DB with the very same objective, according to Rosei Jiho, a Japanese HRM magazine. They are fully aware that they need to integrate HR system which is currently different from country to country to develop a common platform throughout the group, especially evaluation and rewards system.
4. Provide Ttraining and International Assignments
This has been the primary ways of developing global talents and similarly to their global counterparts, Japanese companies have been improving and evolving their global talent development.
The author would like to introduce some of the examples in the upcoming article.
References:-
Nikkei’s article on p1 issued on December 3, 2011, about leveraging human resources by Japanese companies (in Japanese)
“Global Talent Development”, featured article of Vol. 3808 of Rosei Jiho issued on October 28, 2011, p10-p73 (in Japanese)
https://www.rosei.jp/readers
Online articles about recent recruiting trends in China and Japan by Japanese companies written by Mr. Shigekazu Obata (in Japanese)
http://diamond.jp/category/s-syukatsurepo
Resources:-
Japanese companies have been far behind in acquiring, developing, retaining and allocating with optimization global talent but they have realized that globalization of their business and organization is critical to compete and survive in the today’s global economy and that they would need to join War for Global Talent. Thus they have in earnest started recruiting non-Japanese new graduates from around the globe, localizing and diversifying people assigned to key worldwide management positions, and integrate group-wide human resource information, in addition to improving training and International Assignments.
2011年9月25日日曜日
Will Mt. Fuji Become A World Heritage At Last?
Osaka - Sunday, September 25, 2011
Recent hot topic in Japan that has been discussed in TV news and other programmes is the fact the Mt. Fuji and City of Kamakura are to be applied to be registered as World Heritage.
City of Kanakura, famous for the largest Buddha statue in Japan (called in Japan “Kanakura Daibutsu”) and a impressive shrine called Tsuruoka Hachimangu, used to be the capital of the Muromachi Government (1336 – 1573), which opened the era governed by samurai; therefore, it is to be applied to be registered for its importance in Japanese history and culture.
Regarding Mt. Fuji, a symbol of Japan that everyone around the globe are familiar with, numerous attempts had been made for the World Heritage registration but in vain so the focus of the discussion in the TV programmes has been about Mt. Fuji.
There had been attempts since 2003. First in 2003 Mt. Fuji’s application was made as World Natural Heritage. However, it was not accepted mainly because of garbage issues attributing to the fact that many climbers leave behind garbage instead of taking them back. After this incident, there were some initiatives of clearing up garbage of Mr. Fuji.
Another attempt was made in 2005, when Mt. Fuji’s application was made as World Cultural Heritage. However, it was not accepted because the lower part of Mt. Fuji has already been developed to quite an extent, with motorways and national roads. Also, at first Mr. Fuji’s beautiful shape of the mountain was an appealing point but then other countries claimed that their mountain(s) are of similar beautiful shape, such as the one in Kilimanjaro.
2. What is the appealing point of Mt. Fuji in making application for World Heritage this time?
Currently their idea is “mountain of religion”. This is because in Japanese literatures from Manyoshu, one of the oldest Japanese literatures in history, to works from Edo era (1600 - 1868), Mt. Fuji is mentioned as a mountain in which people have religions faith.
3. How experts view of the possibility of Mt. Fuji to be registered to be a World Heritage?
They think currently the possibility is 50%. They feel the appealing point and reason for the registration needs to be more focused. The reason for the registration needs to be something that makes Mr. Fuji “the only one” rather that “number 1” of something, with concrete, logical explanation supported by facts.
4. What is the author’s final thoughts?
This is really about marketing; i.e. segmentation, positioning, and targeting followed by branding then creating and delivering message based on the defined USP (unique selling point).
We all now the theory and steps of effective marketing but successfully planning and implementing marketing strategy is difficult, especially when it is of something like Mt. Fuji that has possible multiple options of USP.
How would you market Mt. Fuji so that it will be registered as a World Heritage?
Resources:-
Mt. Fuji, together with Kamakura City, will be applied to be registered as a World Heritage, after multiple attempts. Mt. Fuji is a symbol of Japan but it has been difficult to identify USP making it “the only one” with reason of the registration with concrete, logical explanation supported by facts. After all, this is all about now to successfully marketing Mt. Fuji with the goal of being registered as a World Heritage.
Recent hot topic in Japan that has been discussed in TV news and other programmes is the fact the Mt. Fuji and City of Kamakura are to be applied to be registered as World Heritage.
City of Kanakura, famous for the largest Buddha statue in Japan (called in Japan “Kanakura Daibutsu”) and a impressive shrine called Tsuruoka Hachimangu, used to be the capital of the Muromachi Government (1336 – 1573), which opened the era governed by samurai; therefore, it is to be applied to be registered for its importance in Japanese history and culture.
Regarding Mt. Fuji, a symbol of Japan that everyone around the globe are familiar with, numerous attempts had been made for the World Heritage registration but in vain so the focus of the discussion in the TV programmes has been about Mt. Fuji.
1. Why previous attempts of Mt. Fuji
There had been attempts since 2003. First in 2003 Mt. Fuji’s application was made as World Natural Heritage. However, it was not accepted mainly because of garbage issues attributing to the fact that many climbers leave behind garbage instead of taking them back. After this incident, there were some initiatives of clearing up garbage of Mr. Fuji.
Another attempt was made in 2005, when Mt. Fuji’s application was made as World Cultural Heritage. However, it was not accepted because the lower part of Mt. Fuji has already been developed to quite an extent, with motorways and national roads. Also, at first Mr. Fuji’s beautiful shape of the mountain was an appealing point but then other countries claimed that their mountain(s) are of similar beautiful shape, such as the one in Kilimanjaro.
2. What is the appealing point of Mt. Fuji in making application for World Heritage this time?
Currently their idea is “mountain of religion”. This is because in Japanese literatures from Manyoshu, one of the oldest Japanese literatures in history, to works from Edo era (1600 - 1868), Mt. Fuji is mentioned as a mountain in which people have religions faith.
3. How experts view of the possibility of Mt. Fuji to be registered to be a World Heritage?
They think currently the possibility is 50%. They feel the appealing point and reason for the registration needs to be more focused. The reason for the registration needs to be something that makes Mr. Fuji “the only one” rather that “number 1” of something, with concrete, logical explanation supported by facts.
4. What is the author’s final thoughts?
This is really about marketing; i.e. segmentation, positioning, and targeting followed by branding then creating and delivering message based on the defined USP (unique selling point).
We all now the theory and steps of effective marketing but successfully planning and implementing marketing strategy is difficult, especially when it is of something like Mt. Fuji that has possible multiple options of USP.
How would you market Mt. Fuji so that it will be registered as a World Heritage?
Resources:-
Mt. Fuji, together with Kamakura City, will be applied to be registered as a World Heritage, after multiple attempts. Mt. Fuji is a symbol of Japan but it has been difficult to identify USP making it “the only one” with reason of the registration with concrete, logical explanation supported by facts. After all, this is all about now to successfully marketing Mt. Fuji with the goal of being registered as a World Heritage.
2011年9月19日月曜日
Energy Saving Obligatory Criteria Set for New Constructions in Japan
Osaka - Monday, September 19, 2011
Nikkei, Japan’s leading newspaper specialized in business and economy reported today that Ministry of Land, Infrastructure, Transport and Tourism (MLIT) has set up a policy of giving obligations to real estate and construction companies to meet a specified energy saving criteria set by the Japanese government for all new housings and buildings to be constructed in the future.
1. What is the overview of the policy?
The government is to set limits to energy consumption according to types of housings and buildings and to request efficiency enhancement of energy consumption such as air conditioning using heat insulators. The government aims to control and reduce Green House Gas (GHG) emission the they believe this kind of policy is effective because according to MLIT, GHG emission from constructions cover over 30% of total GHG emitted in Japan.
After 2020 construction will be not approved unless it meets the requirements set by the government. Until 2020, companies and individuals who have met requirements will be given tax incentives.
2. Isn’t there any energy saving criteria today?
Yes, there is. Such criteria for housings were set in 1999 but it is not obligatory. It costs addition 10% to construct houses meeting the criteria; therefore, only less than 40% of new houses meet the criteria.
3. How will the government proceed with setting and implementing the policy?
MLIT will set up a meeting with authorities from industries and academia in October to discuss concrete measures for obligation of meeting energy saving criteria. MLIT aims to revise the legislation regarding energy saving construction in 2013, discussing and collaborating with Ministry of Economy, Trade and Industry (METI) and Ministry of the Environment （MOE）.
To achieve such a timeline, the government is to draft new criteria by the end of the year, including limits of energy used in air conditioning and lighting depending on the types of housings and buildings. The details of the criteria will be tailored to meet local needs depending on the regions, considering regions with heavy snow in winter.
4. What is the concept of the new criteria?
New criteria will be set so that energy consumption will be 20-30% less than normal housings and buildings. To meet the criteria, heat insulators are to be used in walls and ceilings. When solar battery is implemented, energy generated by solar power will be subtracted from the energy consumption calculated.
5. When will auditing of energy saving construction be implemented?
It will be implemented in 2012. When construction companies make application in building new housings or buildings, local government will check the types of materials to be used.
When energy saving criteria is met, cost of energy saving materials used in construction will be subtracted from income to be taxed.
And for individuals, the government is to study incentives such as increase tax reduction of their housing loans.
Full implementation of the policy requires much preparation and time so the government aims to implement fully in 2020. Until then, the government would like to implement auditing systems and tax incentives to proliferate energy saving materials meeting the criteria.
6. Will obligation to meet the criteria applied to current housings and buildings?
No. This is because it is time consuming to audit all current housings and buildings, and if renovation of current housings and buildings is to be made compulsory it is quite possible that the general public will refuse.
Having said that, MLIT believes that the renovations will take place because in general market value of energy saving housings and buildings are higher.
There is also a concept of distinguishing energy saving housings and buildings from those that are not of energy saving.
Resources:-
MLIT of Japan will set up a policy of giving obligations to real estate and construction companies to meet a specified energy saving criteria set by the Japanese government for all new housing and buildings to be constructed in the future. The government is to set limits to energy consumption according to types of housings and buildings and to request efficiency enhancement of energy consumption such as air conditioning using heat insulators. The auditing system will be implemented in 2012. The policy will be fully implemented from 2020 and until then incentives will be given to companies and individuals that meet the criteria.
Nikkei, Japan’s leading newspaper specialized in business and economy reported today that Ministry of Land, Infrastructure, Transport and Tourism (MLIT) has set up a policy of giving obligations to real estate and construction companies to meet a specified energy saving criteria set by the Japanese government for all new housings and buildings to be constructed in the future.
1. What is the overview of the policy?
The government is to set limits to energy consumption according to types of housings and buildings and to request efficiency enhancement of energy consumption such as air conditioning using heat insulators. The government aims to control and reduce Green House Gas (GHG) emission the they believe this kind of policy is effective because according to MLIT, GHG emission from constructions cover over 30% of total GHG emitted in Japan.
After 2020 construction will be not approved unless it meets the requirements set by the government. Until 2020, companies and individuals who have met requirements will be given tax incentives.
2. Isn’t there any energy saving criteria today?
Yes, there is. Such criteria for housings were set in 1999 but it is not obligatory. It costs addition 10% to construct houses meeting the criteria; therefore, only less than 40% of new houses meet the criteria.
3. How will the government proceed with setting and implementing the policy?
MLIT will set up a meeting with authorities from industries and academia in October to discuss concrete measures for obligation of meeting energy saving criteria. MLIT aims to revise the legislation regarding energy saving construction in 2013, discussing and collaborating with Ministry of Economy, Trade and Industry (METI) and Ministry of the Environment （MOE）.
To achieve such a timeline, the government is to draft new criteria by the end of the year, including limits of energy used in air conditioning and lighting depending on the types of housings and buildings. The details of the criteria will be tailored to meet local needs depending on the regions, considering regions with heavy snow in winter.
4. What is the concept of the new criteria?
New criteria will be set so that energy consumption will be 20-30% less than normal housings and buildings. To meet the criteria, heat insulators are to be used in walls and ceilings. When solar battery is implemented, energy generated by solar power will be subtracted from the energy consumption calculated.
5. When will auditing of energy saving construction be implemented?
It will be implemented in 2012. When construction companies make application in building new housings or buildings, local government will check the types of materials to be used.
When energy saving criteria is met, cost of energy saving materials used in construction will be subtracted from income to be taxed.
And for individuals, the government is to study incentives such as increase tax reduction of their housing loans.
Full implementation of the policy requires much preparation and time so the government aims to implement fully in 2020. Until then, the government would like to implement auditing systems and tax incentives to proliferate energy saving materials meeting the criteria.
6. Will obligation to meet the criteria applied to current housings and buildings?
No. This is because it is time consuming to audit all current housings and buildings, and if renovation of current housings and buildings is to be made compulsory it is quite possible that the general public will refuse.
Having said that, MLIT believes that the renovations will take place because in general market value of energy saving housings and buildings are higher.
There is also a concept of distinguishing energy saving housings and buildings from those that are not of energy saving.
Resources:-
MLIT of Japan will set up a policy of giving obligations to real estate and construction companies to meet a specified energy saving criteria set by the Japanese government for all new housing and buildings to be constructed in the future. The government is to set limits to energy consumption according to types of housings and buildings and to request efficiency enhancement of energy consumption such as air conditioning using heat insulators. The auditing system will be implemented in 2012. The policy will be fully implemented from 2020 and until then incentives will be given to companies and individuals that meet the criteria.
2011年9月11日日曜日
6 Months from the Japan Disaster – The Reality
Osaka - Sunday, September 11, 2011
It is 6 months since 3.11, the Japan Disaster of the earthquake and tsunami followed by the Fukushima Nuclear Plant Accident broke out on March 11 this year. It is also 10 year anniversary of the U.S. 9.11 WTC incident. Thus this weekend, almost all TV channels in Japan have been broadcasting special programmes about 9.11 and 3.11.
In this article, the author would like to outline the reality of the Japan disaster, focusing on the hard hit area from the tsunami.
1. What are the key numbers of the Japan disaster?
The status as of today is that over 15,000 people are dead and over 4,000 people are still missing.
The government had promised to provide temporary housing to people in need by the end of August but only 90% of the temporary housings originally planned are complete and only 83% are filled because some are built in area that is of bad access.
Removal of wreckage is 50%+ complete but this includes those of houses and building that needs to be demolished anyway. And how to dispose the wreckage is still yet to be decided.
2. How are victims without temporary housing living today?
A case of a lady living in one of the hardest hit area in Miyagi was introduced in a special programme broadcasted by NHK, a national TV company. She has a house of 3 floors (in Japan, ground floor and 2 floors in the U.K.), of which the 2 floors became flooded by the tsunami.
She first thought of start living in temporary housing but did not win the housing by lottery. Also the available temporary housings are in mountainous area, a place that are inconvenience for her who cannot drive a car; therefore, she started living in the 3rd floor of her house.
However, lifelines such as electricity and water cannot be supplied. Thus she uses battery instead of electricity, walks to the nearby city hall with a bucket to get water, and goes to a nearby hospital for toilet.
The lady has no idea when this kind of life would end.
3. How have towns been recovering that once their administration system paralyzed due to tsunami?
In another TV programme a case of a town was introduced in which 20% of the population became dead or missing from the tsunami, including the mayor and many of his staff members working in the local government. Also the local government buildings/offices were all swayed by the huge tsunami.
In such a situation, local administration function stopped completely and recovery from the disaster did not move forward at all. A manager of the local government had an extremely tough time being a pig in the middle of the administration and the general public.
It was only recently that the manager was elected as the new mayor. He is now determined to develop a recovery plan of the village by the end of the year, but the task would be not easy and execution would be less easy.
4. The author’s final thoughts
What the author is more familiar is the Kobe earthquake that occurred in 1996. She was shocked to see the devastated town that used to be really beautiful and prosperous after a few months from the earthquake. But after about 6 months the roadmap of the recovery was made and the recovery plan was implemented with relative smoothness.
That is not the case of the 3.11 Japan Disaster. It is true that the scale of the 3.11 disaster is far greater and there are multiple factors that make the recovery extremely difficult.
However, it seems to the author that the primary reason for the slow recovery is the ambiguous distinction of the roles between the national government and local government/administration.
The national government insists democracy to say that it is the responsibility of the local government to take the initiative. And the local government claim that the national government should execute stronger leadership, especially when the local government function of the local area is stopped completely.
The author agrees more to the stance of the local government. She also believes that it is because of the “gembaryoku” (strengths of the general public) of the Japanese people/victims that minimized chaos. She strongly feels that if it had been in other country there had been turmoil.
Strong “gembaryoku” and weak management/leadership in typical Japanese companies in comparison to strong management and relatively weak “gembaryoku” in many western countries is often mentioned in management and such a trend came out in this case as well, as well as the plan the author introduced in her previous article Eco-Town Development in Sendai– Recovery from the Japan Disaster.
The author sincerely would like the new Noda administration start executing stronger leadership
Resources:-
Recovery from the Japan disaster of earthquake and tsunami after 6 months is yet still very slow. Not everyone has been able to live in temporary housing. Due to the scale and multiple factors making it complicated it is difficult to compare with recover from other disasters such as the Kobe earthquake in 1996; however, and the timing of when the victims can lead their lives as they used to before the disaster is yet known. One requirement that had been lacking for the recovery is strong leadership from the national government, when “gembaryoku”, the power of the general public is strong.
It is 6 months since 3.11, the Japan Disaster of the earthquake and tsunami followed by the Fukushima Nuclear Plant Accident broke out on March 11 this year. It is also 10 year anniversary of the U.S. 9.11 WTC incident. Thus this weekend, almost all TV channels in Japan have been broadcasting special programmes about 9.11 and 3.11.
In this article, the author would like to outline the reality of the Japan disaster, focusing on the hard hit area from the tsunami.
1. What are the key numbers of the Japan disaster?
The status as of today is that over 15,000 people are dead and over 4,000 people are still missing.
The government had promised to provide temporary housing to people in need by the end of August but only 90% of the temporary housings originally planned are complete and only 83% are filled because some are built in area that is of bad access.
Removal of wreckage is 50%+ complete but this includes those of houses and building that needs to be demolished anyway. And how to dispose the wreckage is still yet to be decided.
2. How are victims without temporary housing living today?
A case of a lady living in one of the hardest hit area in Miyagi was introduced in a special programme broadcasted by NHK, a national TV company. She has a house of 3 floors (in Japan, ground floor and 2 floors in the U.K.), of which the 2 floors became flooded by the tsunami.
She first thought of start living in temporary housing but did not win the housing by lottery. Also the available temporary housings are in mountainous area, a place that are inconvenience for her who cannot drive a car; therefore, she started living in the 3rd floor of her house.
However, lifelines such as electricity and water cannot be supplied. Thus she uses battery instead of electricity, walks to the nearby city hall with a bucket to get water, and goes to a nearby hospital for toilet.
The lady has no idea when this kind of life would end.
3. How have towns been recovering that once their administration system paralyzed due to tsunami?
In another TV programme a case of a town was introduced in which 20% of the population became dead or missing from the tsunami, including the mayor and many of his staff members working in the local government. Also the local government buildings/offices were all swayed by the huge tsunami.
In such a situation, local administration function stopped completely and recovery from the disaster did not move forward at all. A manager of the local government had an extremely tough time being a pig in the middle of the administration and the general public.
It was only recently that the manager was elected as the new mayor. He is now determined to develop a recovery plan of the village by the end of the year, but the task would be not easy and execution would be less easy.
4. The author’s final thoughts
What the author is more familiar is the Kobe earthquake that occurred in 1996. She was shocked to see the devastated town that used to be really beautiful and prosperous after a few months from the earthquake. But after about 6 months the roadmap of the recovery was made and the recovery plan was implemented with relative smoothness.
That is not the case of the 3.11 Japan Disaster. It is true that the scale of the 3.11 disaster is far greater and there are multiple factors that make the recovery extremely difficult.
However, it seems to the author that the primary reason for the slow recovery is the ambiguous distinction of the roles between the national government and local government/administration.
The national government insists democracy to say that it is the responsibility of the local government to take the initiative. And the local government claim that the national government should execute stronger leadership, especially when the local government function of the local area is stopped completely.
The author agrees more to the stance of the local government. She also believes that it is because of the “gembaryoku” (strengths of the general public) of the Japanese people/victims that minimized chaos. She strongly feels that if it had been in other country there had been turmoil.
Strong “gembaryoku” and weak management/leadership in typical Japanese companies in comparison to strong management and relatively weak “gembaryoku” in many western countries is often mentioned in management and such a trend came out in this case as well, as well as the plan the author introduced in her previous article Eco-Town Development in Sendai– Recovery from the Japan Disaster.
The author sincerely would like the new Noda administration start executing stronger leadership
Resources:-
Recovery from the Japan disaster of earthquake and tsunami after 6 months is yet still very slow. Not everyone has been able to live in temporary housing. Due to the scale and multiple factors making it complicated it is difficult to compare with recover from other disasters such as the Kobe earthquake in 1996; however, and the timing of when the victims can lead their lives as they used to before the disaster is yet known. One requirement that had been lacking for the recovery is strong leadership from the national government, when “gembaryoku”, the power of the general public is strong.
2011年9月3日土曜日
Eco-Town Development in Sendai– Recovery from the Japan Disaster
Osaka - Saturday, September 3, 2011
Nikkei, the leading Japanese newspaper specialized in economy and business, reported on September 1 that Sendai City and some 20 companies started studying to develop an eco-town in the devastated area of the Japan disaster.
This includes establishment of mega solar (huge solar generation plant), and using the power generated by the mega solar to start new businesses of hydroponic cultivation and food processing in the autumn of 2012. This will take place in the agricultural lands of the coastal area near Sendai City where it was severely hit by the tsunami.
The operating company will be established by the end of 2011. Thus, agriculture renewal and recovery from the disaster initiated by private sector is to start.
1. What is the background and positioning of the project?
On August 31 Sendai City announced the draft of the recovery plan from the Japan disaster, in which concept of creating an “eco-town (eco = ecology)” leveraging natural energy is stated. Energy shortage became a critical issue after the disaster; therefore, the project aims to develop a system that can supply minimum energy even in urgency. The new business will be a focus of the plan.
Sendai City’s Recovery Plan from the Japan Disaster (Outline of the Draft)
- Basic philosophy is “new dimensional town of disaster prevention and environment preservation”.
- Timing of the project is from 2011 to 2015.
- Anticipation of flooding from tsunami will be implemented by multiple protections of both software and hardware.
- Develop model of “eco town” implementing natural energy.
- Private sector will invest in agriculture. Production, processing and supply chain facilities will be integrated and arranged.
- Develop and attract industries related in new energy and disaster prevention.
- Adopt system of designated recovery zone to attract group relocation and land use restructuring.
2. Which companies are to join the project?
Companies that are to join the project include IBM Japan, Sharp, Kagome, Mitsui & Co., Ltd., Itochu Corporation, Tohoku Electric Power Co., Inc., Seven Eleven Japan (convenience store), York-Benimaru Co., Ltd. and local agricultural production related companies, which will be announced soon.
3. What are some examples of the focuses of the project?
1) Implementation of hydroponic cultivation that does not require water
Hydroponic cultivation that does not require water will be implemented leveraging know how provided by Kagome. This is to be implemented because it would require much investment to remove salt (included in the sea water) from the land that once was flooded by the tsunami and use the land again for agriculture.
The new company will establish a vegetable production factory with an area of 10 hectare (approximately twice as large as Toyo Dome, a large popular baseball stadium in Japan) and 1 hectare processing factory, to integrate and manage from vegetable production to processing.
2) Selling of the agricultural products
Approximately 2,000 tons of vegetables are to be produced then processed annually, which will be sold by retailers such as Seven Eleven and York-Benimaru Co., Ltd. Annual revenue of 2.5 billion yen is expected.
3) Enhance efficiency of electricity use generated by natural energy
Energy required to operate production and processing factories will be generated by mega solar capable of generating approximately 4,000 kW and thermal power generated by burning chaff in the boilers. System to enhance efficiency of energy use leveraging IT will be provided by IBM Japan.
4. How will Sendai City proceed?
Sendai City has set up a policy of making an application of designated recovery zone to the Japanese government because such application is required in constructing factories in the agricultural land.
Sendai City will conclude long term lease contract with agricultural land owners of the area and the revenue generated from the new business will be allocated as rent. The city is to start negotiating with agricultural land owners who is thinking of closing their business after the disaster.
5. The author’s final thoughts
So many people including the author have been advocating for months that the recovery from the Japan disaster should be taken as the opportunity of developing a new, advanced eco (ecological and economical) town resistant from natural and technological disasters.
To the author, the Nikkei’s report about the project is the long awaited first step in developing such a town.
What the author questions is the fact that the project is initiated by private sector and Sendai City, not by the Japanese government because the recovery from the disaster is a nationwide issue and therefore she feels it really should be initiated by the government. Following the election held on August 29, there was a change in the leadership; new Prime Minister and his cabinet just took off. She sincerely hopes the new Noda Administration will take stronger initiative for the recovery from the disaster and the Fukushima nuclear plant accident.
Resources:-
Sendai City and some 20 companies started studying to develop an eco-town in the devastated area of the Japan disaster. This includes establishment of mega solar (huge solar generation plant), and using the power generated by the mega solar to start new businesses of hydroponic cultivation and food processing in the autumn of 2012 in the agricultural lands of the coastal area near Sendai City where it was severely hit by the tsunami. This is a big step initiated by the private sector and Sendai City for the recovery, a nationwide issue, which is ideally to be initiated by the government.
Nikkei, the leading Japanese newspaper specialized in economy and business, reported on September 1 that Sendai City and some 20 companies started studying to develop an eco-town in the devastated area of the Japan disaster.
This includes establishment of mega solar (huge solar generation plant), and using the power generated by the mega solar to start new businesses of hydroponic cultivation and food processing in the autumn of 2012. This will take place in the agricultural lands of the coastal area near Sendai City where it was severely hit by the tsunami.
The operating company will be established by the end of 2011. Thus, agriculture renewal and recovery from the disaster initiated by private sector is to start.
1. What is the background and positioning of the project?
On August 31 Sendai City announced the draft of the recovery plan from the Japan disaster, in which concept of creating an “eco-town (eco = ecology)” leveraging natural energy is stated. Energy shortage became a critical issue after the disaster; therefore, the project aims to develop a system that can supply minimum energy even in urgency. The new business will be a focus of the plan.
Sendai City’s Recovery Plan from the Japan Disaster (Outline of the Draft)
- Basic philosophy is “new dimensional town of disaster prevention and environment preservation”.
- Timing of the project is from 2011 to 2015.
- Anticipation of flooding from tsunami will be implemented by multiple protections of both software and hardware.
- Develop model of “eco town” implementing natural energy.
- Private sector will invest in agriculture. Production, processing and supply chain facilities will be integrated and arranged.
- Develop and attract industries related in new energy and disaster prevention.
- Adopt system of designated recovery zone to attract group relocation and land use restructuring.
2. Which companies are to join the project?
Companies that are to join the project include IBM Japan, Sharp, Kagome, Mitsui & Co., Ltd., Itochu Corporation, Tohoku Electric Power Co., Inc., Seven Eleven Japan (convenience store), York-Benimaru Co., Ltd. and local agricultural production related companies, which will be announced soon.
3. What are some examples of the focuses of the project?
1) Implementation of hydroponic cultivation that does not require water
Hydroponic cultivation that does not require water will be implemented leveraging know how provided by Kagome. This is to be implemented because it would require much investment to remove salt (included in the sea water) from the land that once was flooded by the tsunami and use the land again for agriculture.
The new company will establish a vegetable production factory with an area of 10 hectare (approximately twice as large as Toyo Dome, a large popular baseball stadium in Japan) and 1 hectare processing factory, to integrate and manage from vegetable production to processing.
2) Selling of the agricultural products
Approximately 2,000 tons of vegetables are to be produced then processed annually, which will be sold by retailers such as Seven Eleven and York-Benimaru Co., Ltd. Annual revenue of 2.5 billion yen is expected.
3) Enhance efficiency of electricity use generated by natural energy
Energy required to operate production and processing factories will be generated by mega solar capable of generating approximately 4,000 kW and thermal power generated by burning chaff in the boilers. System to enhance efficiency of energy use leveraging IT will be provided by IBM Japan.
4. How will Sendai City proceed?
Sendai City has set up a policy of making an application of designated recovery zone to the Japanese government because such application is required in constructing factories in the agricultural land.
Sendai City will conclude long term lease contract with agricultural land owners of the area and the revenue generated from the new business will be allocated as rent. The city is to start negotiating with agricultural land owners who is thinking of closing their business after the disaster.
5. The author’s final thoughts
So many people including the author have been advocating for months that the recovery from the Japan disaster should be taken as the opportunity of developing a new, advanced eco (ecological and economical) town resistant from natural and technological disasters.
To the author, the Nikkei’s report about the project is the long awaited first step in developing such a town.
What the author questions is the fact that the project is initiated by private sector and Sendai City, not by the Japanese government because the recovery from the disaster is a nationwide issue and therefore she feels it really should be initiated by the government. Following the election held on August 29, there was a change in the leadership; new Prime Minister and his cabinet just took off. She sincerely hopes the new Noda Administration will take stronger initiative for the recovery from the disaster and the Fukushima nuclear plant accident.
Resources:-
Sendai City and some 20 companies started studying to develop an eco-town in the devastated area of the Japan disaster. This includes establishment of mega solar (huge solar generation plant), and using the power generated by the mega solar to start new businesses of hydroponic cultivation and food processing in the autumn of 2012 in the agricultural lands of the coastal area near Sendai City where it was severely hit by the tsunami. This is a big step initiated by the private sector and Sendai City for the recovery, a nationwide issue, which is ideally to be initiated by the government.
2011年8月21日日曜日
Risk Management and BCM – Implementing Learning from the Japan Disaster
Osaka - Sunday, August 21, 2011
Nikkei, the leading Japanese newspaper specialized in economy and business, reported today that the Japanese government is to set up a back-up system in which western Japan can complement government function when a disaster should occur such as a huge earthquake that directly hits Tokyo, the capital of Japan.
This is because from the Japan disaster that occurred in March this year it became prominent that a system in which regions outside Tokyo can complement government and administrative functions in an emergency is critical for as business continuity and risk management.
1. What kind of functions are planned to be backed-up outside Tokyo for an emergency?
They are administrative including foreign diplomacy, defense, police and central government offices that are responsible for economic policies. Each function will set up complementary offices in western Japan so that the newly set-up offices will be able to replace the administrative functions should an emergency occur in Japan.
2. Where will such new complementary offices be established?
Locations of the new complementary offices will be decided based on disaster risk analysis including strength of the ground, possibility of landslides and earthquakes, and transportation convenience. Candidate prefectures include Osaka, Nagoya and Fukuoka.
3. How will new complementary offices be equipped?
New offices in western Japan will be equipped with video conference rooms and satellite phones that are less unlikely to fall into communication failure should a disaster such as earthquake occur. Data centre and IT systems will be established so that information and data necessary for each ministry to continue operating in emergencies will be stored. Also staff members required to manage the offices will be allocated.
4. Why the Japanese government made such a decision?
Simply put, it is a Business Continuity Management (BCM) of Japan by minimizing risk of government/administrative functions becoming paralyzed and economic activities falling into a chaos even if a disaster should strike Tokyo.
Currently the Japanese administrative organizations have no back-up organization/system(s) based on an assumption that a disaster covering a large area occurs and whole of Shutoken (Tokyo and its neighbours such as Yokohama, Chiba and Saitama) becomes paralyzed, which is almost equivalent to the country becoming paralyzed.
Complementary offices of central government offices are mostly located in Tokyo. Aligning with such a situation, over 60% of head quarters of large companies are currently located in Tokyo, and over 25% of GDP and population are concentrated in Tokyo. Thus, Japan is often said as “a country heavily concentrated in Tokyo, its capital”.
From the March 11 Japan disaster, it became clear that if a disaster should occur in Shutoken area it is quite possible that the economic activities throughout Japan will be in a chaos and the country will become paralyzed. Therefore, the Japanese government concluded that they would need to strengthen risk management by strengthening back-up organization/system of administrative functions by setting up complementary offices in western Japan.
5. Has there been any discussion of changing “Tokyo centralized country” before?
Yes, there has been such a discussion, such as relocating the Diet and administrative functions outside Tokyo. However, the discussion has cooled down because such a plan would require more than 10 trillion yen. Long lasting economic stagnation is a negative factor as well.
In comparison, establishment of back-up organization/system of government and administrative functions would require less cost, which is the reason why the Japanese government decided to study and discuss in earnest to put into action.
6. How the Japanese government is to proceed?
Ministry of Land, Infrastructure, Transport and Tourism (MLIT) that is responsible of mid- and long-term land and infrastructure planning is to request budget for the study (tens of million yen) in the upcoming 2011 budgeting revision in autumn. Committee constituting from experts from various fields will be established by the end of September, which is to create a report by the end of the fiscal year (March 2012) about the topic.
MLIT, Ministry of Finance, Ministry of Internal Affairs and Communications etc. are to set up cross-ministry meetings in 2012 to start discussing concrete issues of the topic, including review and improvement of legislation if necessary.
Resources:-
Japanese government/administrative functions have long been concentrated in Tokyo, the capital of Japan but the government decided to establish a back-up system in western Japan by setting up complementary offices of central government offices etc. This is because from the March 11 Japan disaster, it became prominent that business continuity and risk management is necessary to avoid paralysis of administrative function and economic activity chaos should a disaster covering large area occur, hitting Tokyo.
Nikkei, the leading Japanese newspaper specialized in economy and business, reported today that the Japanese government is to set up a back-up system in which western Japan can complement government function when a disaster should occur such as a huge earthquake that directly hits Tokyo, the capital of Japan.
This is because from the Japan disaster that occurred in March this year it became prominent that a system in which regions outside Tokyo can complement government and administrative functions in an emergency is critical for as business continuity and risk management.
1. What kind of functions are planned to be backed-up outside Tokyo for an emergency?
They are administrative including foreign diplomacy, defense, police and central government offices that are responsible for economic policies. Each function will set up complementary offices in western Japan so that the newly set-up offices will be able to replace the administrative functions should an emergency occur in Japan.
2. Where will such new complementary offices be established?
Locations of the new complementary offices will be decided based on disaster risk analysis including strength of the ground, possibility of landslides and earthquakes, and transportation convenience. Candidate prefectures include Osaka, Nagoya and Fukuoka.
3. How will new complementary offices be equipped?
New offices in western Japan will be equipped with video conference rooms and satellite phones that are less unlikely to fall into communication failure should a disaster such as earthquake occur. Data centre and IT systems will be established so that information and data necessary for each ministry to continue operating in emergencies will be stored. Also staff members required to manage the offices will be allocated.
4. Why the Japanese government made such a decision?
Simply put, it is a Business Continuity Management (BCM) of Japan by minimizing risk of government/administrative functions becoming paralyzed and economic activities falling into a chaos even if a disaster should strike Tokyo.
Currently the Japanese administrative organizations have no back-up organization/system(s) based on an assumption that a disaster covering a large area occurs and whole of Shutoken (Tokyo and its neighbours such as Yokohama, Chiba and Saitama) becomes paralyzed, which is almost equivalent to the country becoming paralyzed.
Complementary offices of central government offices are mostly located in Tokyo. Aligning with such a situation, over 60% of head quarters of large companies are currently located in Tokyo, and over 25% of GDP and population are concentrated in Tokyo. Thus, Japan is often said as “a country heavily concentrated in Tokyo, its capital”.
From the March 11 Japan disaster, it became clear that if a disaster should occur in Shutoken area it is quite possible that the economic activities throughout Japan will be in a chaos and the country will become paralyzed. Therefore, the Japanese government concluded that they would need to strengthen risk management by strengthening back-up organization/system of administrative functions by setting up complementary offices in western Japan.
5. Has there been any discussion of changing “Tokyo centralized country” before?
Yes, there has been such a discussion, such as relocating the Diet and administrative functions outside Tokyo. However, the discussion has cooled down because such a plan would require more than 10 trillion yen. Long lasting economic stagnation is a negative factor as well.
In comparison, establishment of back-up organization/system of government and administrative functions would require less cost, which is the reason why the Japanese government decided to study and discuss in earnest to put into action.
6. How the Japanese government is to proceed?
Ministry of Land, Infrastructure, Transport and Tourism (MLIT) that is responsible of mid- and long-term land and infrastructure planning is to request budget for the study (tens of million yen) in the upcoming 2011 budgeting revision in autumn. Committee constituting from experts from various fields will be established by the end of September, which is to create a report by the end of the fiscal year (March 2012) about the topic.
MLIT, Ministry of Finance, Ministry of Internal Affairs and Communications etc. are to set up cross-ministry meetings in 2012 to start discussing concrete issues of the topic, including review and improvement of legislation if necessary.
Resources:-
Japanese government/administrative functions have long been concentrated in Tokyo, the capital of Japan but the government decided to establish a back-up system in western Japan by setting up complementary offices of central government offices etc. This is because from the March 11 Japan disaster, it became prominent that business continuity and risk management is necessary to avoid paralysis of administrative function and economic activity chaos should a disaster covering large area occur, hitting Tokyo.
2011年8月14日日曜日
More M&A and Manufacturing Industry Restructuring in Japan?
Osaka - Sunday, August 14, 2011
Following the previous article Hitachi and Mitsubishi Heavy Industries Discuss Integration – Why and Its Meaning, the merger that provoked comment and interview by Mitsubishi Heavy Industries top management and his spokesperson as well as discussion online articles by leading Japanese business media, the author would like to explain what Nikkei, the leading Japanese newspaper specialized in economy and business, means by “Japan is facing historical turning point and restructuring of manufacturing industries is to come in the near future”.
1. How are Japanese automobile and electronics industries that have been the “engine” of Japanese economy?
Number of Japanese manufacturing companies in electronics including heavy industries and automobile are far greater than that of other countries, simply because mergers leading to industry restructuring have been extremely rare unlike other countries.
Today there are 8 automobile companies, 12 including companies specialized in trucks. Among 12 companies, there are only 2 that are truly “independent manufacturer” without investment from other company; Toyota and Honda. This is because there has been some restructuring in automobile industry in Japan. Market and business environment has been challenging nowadays and it is not surprising that investments (capital alliances) lead to M&A, similarly to recent M&A of the two Japanese leading iron and steel companies of Nippon Steel and Sumitomo Metal Industries. This would mean further restructuring of the industry.
Electronics is the industry that has been extremely slow in restructuring which is why even today the industry structure remains almost the same as that of just after World War II. There have been crisis such as economic depression attributing to high yen after Plaza Accord and the collapse of the bubble economy. However, electronics companies never thought of strategic alliances and M&A, leading to restructuring of the industry.
2. Why electronics industry restructuring has bee extremely slow in Japan?
It is because the electronics companies benefited from abundant domestic demand supported by businesses of electricity and telecommunications companies. Equipment investment of electricity companies (Tokyo Electric Power Co., Inc = TEPCO etc.) was as much as 4.9 trillion yen at the peak in 1993, and of Nippon Telegraph and Telephone Corporate (NTT), the leader of telecommunications that used to dominate in Japan, was as much as 3 trillion yen at the peak in 1996.
Heavy industries and consumer electronics that rely on businesses of electricity companies and NTT could assure sufficient profit generated from the 8 trillion yen market. This is why Japanese electronics companies could survive without drastic industry restructuring even if they lost the semiconductor competition with South Korea counterparts and suffered from depressions attributing to high yen, the bubble economy collapse and so forth.
3. Can Japanese electronics companies expect to continue benefiting from domestic electricity and telecommunications businesses?
No, they cannot. Equipment investment of electricity companies (TEPCO etc.) has plunged to as low as 2.12 trillion yen in 2010, and of NTT as low as 1.87 in 2010. This means the total equipment investment has become half from that of 1990s. In such a situation, electricity companies and NTT cannot possibly look after/support their “family” of electronics companies.
Liberalization of electricity companies has been slow but it is prominent that abundant investment from TEPCO cannot be expected when TEPCO is responsible for liability obligation of the Fukushima Daiichi nuclear plant accident. Abundant investment from other electricity companies cannot be expected either in the current ambiguous business environment.
Telecommunications companies have been “thrown out in the sea of competition” with liberalization, which is why NTT group was privatized and split in latter 1990s. NTT now handles all mobile terminals including those of the U.S. and South Korea manufacturers to compete and win over competitors such as SoftBank. This has much meaning because it was NTT, not NEC nor Fujitsu that was the “engine” of Japan’s IT industry growth. This is because even NEC and Fujitsu, the leading Japanese IT companies, have been subcontractors of NTT.
4. How can Japanese electronics companies survive in the future?
It is to convert “the current historical crisis since World War II” to “opportunity to change the old industry structure that has remained the same since World War II”. This is to get out of over-competition in the domestic market to compete in the global market.
Japanese consumer electronics and IT related companies would need to get out from a business environment in which NTT decides various standards and make investments because that would refrain them from generating creativity to compete with the global counterparts including Apple, Google and Sumsung. This means getting out to global market and they would need to do so now.
Japanese heavy industries would need to follow that, too. It might be a little harder for them than consumer electronics and IT related companies under the current structure in which “10 electricity companies dominate” avoiding competition; however, it is quite possible that such a industry structure is to collapses in the near future.
Japanese electronics manufacturers have technologies such as of smart grid, transportation (railway) and water supply, which were highly re-evaluated by other countries although it was barely reported because of nuclear accident news. Despite critical damages by the disaster, railways avoided fatal accidents and social infrastructure such as water and electricity supply and telecommunications recovered in such a short time.
With their world-class technologies, Japanese manufacturers can be competitive again in the global market as long as they get out there. What they need is change in mindset, courage and action.
This may well mean strategic alliance or M&A, leading to restructuring of the industry. The recent news of Panasonic acquisition of Sanyo, Panasonic selling of a part of Sanyo business to Haier, and merger of Hitachi and Mitsubishi Heavy Industries is quite possible to trigger such an industry restructuring.
Although this would mean more global competition, this would also be good for the world because countries, developed and developing, would be able to benefit from the world-class technologies the Japanese companies have.
Resources:-
Restructuring of the Japanese automobile and electronics industries (consumer and heavy industries), has been insufficient since World War II, although companies of such industries have been the “engine” of Japanese economy. This is primarily because they have been benefiting from abundant domestic demand/market supported by electricity and telecommunications businesses. However, such domestic market has become half from 1990s and they are facing historical crisis. They do have world-class technology especially in social infrastructure segment so one possible way for them to survive is to take this opportunity to get out to global market, from which countries could benefit from their technologies. This may well mean more M&A among manufacturers leading to industry restructuring in Japan.
Following the previous article Hitachi and Mitsubishi Heavy Industries Discuss Integration – Why and Its Meaning, the merger that provoked comment and interview by Mitsubishi Heavy Industries top management and his spokesperson as well as discussion online articles by leading Japanese business media, the author would like to explain what Nikkei, the leading Japanese newspaper specialized in economy and business, means by “Japan is facing historical turning point and restructuring of manufacturing industries is to come in the near future”.
1. How are Japanese automobile and electronics industries that have been the “engine” of Japanese economy?
Number of Japanese manufacturing companies in electronics including heavy industries and automobile are far greater than that of other countries, simply because mergers leading to industry restructuring have been extremely rare unlike other countries.
Today there are 8 automobile companies, 12 including companies specialized in trucks. Among 12 companies, there are only 2 that are truly “independent manufacturer” without investment from other company; Toyota and Honda. This is because there has been some restructuring in automobile industry in Japan. Market and business environment has been challenging nowadays and it is not surprising that investments (capital alliances) lead to M&A, similarly to recent M&A of the two Japanese leading iron and steel companies of Nippon Steel and Sumitomo Metal Industries. This would mean further restructuring of the industry.
Electronics is the industry that has been extremely slow in restructuring which is why even today the industry structure remains almost the same as that of just after World War II. There have been crisis such as economic depression attributing to high yen after Plaza Accord and the collapse of the bubble economy. However, electronics companies never thought of strategic alliances and M&A, leading to restructuring of the industry.
2. Why electronics industry restructuring has bee extremely slow in Japan?
It is because the electronics companies benefited from abundant domestic demand supported by businesses of electricity and telecommunications companies. Equipment investment of electricity companies (Tokyo Electric Power Co., Inc = TEPCO etc.) was as much as 4.9 trillion yen at the peak in 1993, and of Nippon Telegraph and Telephone Corporate (NTT), the leader of telecommunications that used to dominate in Japan, was as much as 3 trillion yen at the peak in 1996.
Heavy industries and consumer electronics that rely on businesses of electricity companies and NTT could assure sufficient profit generated from the 8 trillion yen market. This is why Japanese electronics companies could survive without drastic industry restructuring even if they lost the semiconductor competition with South Korea counterparts and suffered from depressions attributing to high yen, the bubble economy collapse and so forth.
3. Can Japanese electronics companies expect to continue benefiting from domestic electricity and telecommunications businesses?
No, they cannot. Equipment investment of electricity companies (TEPCO etc.) has plunged to as low as 2.12 trillion yen in 2010, and of NTT as low as 1.87 in 2010. This means the total equipment investment has become half from that of 1990s. In such a situation, electricity companies and NTT cannot possibly look after/support their “family” of electronics companies.
Liberalization of electricity companies has been slow but it is prominent that abundant investment from TEPCO cannot be expected when TEPCO is responsible for liability obligation of the Fukushima Daiichi nuclear plant accident. Abundant investment from other electricity companies cannot be expected either in the current ambiguous business environment.
Telecommunications companies have been “thrown out in the sea of competition” with liberalization, which is why NTT group was privatized and split in latter 1990s. NTT now handles all mobile terminals including those of the U.S. and South Korea manufacturers to compete and win over competitors such as SoftBank. This has much meaning because it was NTT, not NEC nor Fujitsu that was the “engine” of Japan’s IT industry growth. This is because even NEC and Fujitsu, the leading Japanese IT companies, have been subcontractors of NTT.
4. How can Japanese electronics companies survive in the future?
It is to convert “the current historical crisis since World War II” to “opportunity to change the old industry structure that has remained the same since World War II”. This is to get out of over-competition in the domestic market to compete in the global market.
Japanese consumer electronics and IT related companies would need to get out from a business environment in which NTT decides various standards and make investments because that would refrain them from generating creativity to compete with the global counterparts including Apple, Google and Sumsung. This means getting out to global market and they would need to do so now.
Japanese heavy industries would need to follow that, too. It might be a little harder for them than consumer electronics and IT related companies under the current structure in which “10 electricity companies dominate” avoiding competition; however, it is quite possible that such a industry structure is to collapses in the near future.
Japanese electronics manufacturers have technologies such as of smart grid, transportation (railway) and water supply, which were highly re-evaluated by other countries although it was barely reported because of nuclear accident news. Despite critical damages by the disaster, railways avoided fatal accidents and social infrastructure such as water and electricity supply and telecommunications recovered in such a short time.
With their world-class technologies, Japanese manufacturers can be competitive again in the global market as long as they get out there. What they need is change in mindset, courage and action.
This may well mean strategic alliance or M&A, leading to restructuring of the industry. The recent news of Panasonic acquisition of Sanyo, Panasonic selling of a part of Sanyo business to Haier, and merger of Hitachi and Mitsubishi Heavy Industries is quite possible to trigger such an industry restructuring.
Although this would mean more global competition, this would also be good for the world because countries, developed and developing, would be able to benefit from the world-class technologies the Japanese companies have.
Resources:-
Restructuring of the Japanese automobile and electronics industries (consumer and heavy industries), has been insufficient since World War II, although companies of such industries have been the “engine” of Japanese economy. This is primarily because they have been benefiting from abundant domestic demand/market supported by electricity and telecommunications businesses. However, such domestic market has become half from 1990s and they are facing historical crisis. They do have world-class technology especially in social infrastructure segment so one possible way for them to survive is to take this opportunity to get out to global market, from which countries could benefit from their technologies. This may well mean more M&A among manufacturers leading to industry restructuring in Japan.
2011年8月7日日曜日
Hitachi and Mitsubishi Heavy Industries Discuss Integration – Why and Its Meaning
Osaka - Sunday, August 7, 2011
Following the announcement made by Panasonic on July 28 of selling their refrigerator and washing machine business originally of Sanyo to Haier explained in the previous article Increasing Chinese Companies Acquiring Japanese Companies – How and Why?, Nikkei, Japan’s leading newspaper specialized in business and economy, reported on August 5 that Hitachi and Mitsubishi Heavy Industries are to start discussing integration of their main businesses including social infrastructure, with a possibility of future merger (management integration) of the two companies.
Taking this opportunity, Nikkei also made a special article insisting that Japan is facing a historical turning point in its core industries. This is because the recent M&A related announcements are the signs that restructuring in manufacturing industries, the “engine” of the Japanese economy.
1. Why the two companies decided to start discussing integration of their social infrastructure business?
It is because although the two companies are leading companies in this business domain in Japan, it is extremely difficult for them to compete and survive in the global market. The two companies do have world-class R&D capability but to compete in the global market they need to further become competitive in total power.
They realized this because recently they have been losing business negotiations for order intakes and their western counterparts winning. This attributes primarily to the fact that they were slower than their western counterparts to start developing business in future growth markets, in emerging countries in particular in earnest.
Such examples include the business negotiation for order intake of coal-fired thermal power station of Malaysia in March this year, the largest one in South East Asia, in which Mitsubishi lost and Alstom won (Hitachi also was involved in this at the beginning). In September of 2010, Hitachi lost and group of Canadian companies including Bombardier won the business negotiation of order intake of monorail construction of Sao Paulo, Brazil.
2. What is the positioning of the two companies in the global market?
This is summarized below (Source: Nikkei, translated by the author).
Company / No. of Employees (kilo) / Sales (trillion yen) / Net Profit (billon yen)
GE / 280 / 11.8658 / 916.4
Siemens / 400 / 8.5880 / 463.3
Hitachi / 360 / 9.3158 / 238.8
Mitsubishi Heavy Industries / 2.9037 / 30.1
* GE: for fiscal year ending December 2010, Siemens: for fiscal year ending September 2010, Hitachi and Mitsubishi: for fiscal year ending March 2011. 1 USD = 79 yen, 1 Euro = 113 yen
For gas turbine sector, #1 is GE with market share of 44%. #2 is Siemens with market share of 28%. #3 is Mitsubishi but with market share of only 8%.
And for railway sector, total market share of the big 3 companies (Bompardier of Canada, Alstom of France, Siemens of Germany) reach over 50%, with solid manufacturing and maintenance sites worldwide, when it is only just less than 5% for Hitachi.
3. Which market(s) do the two companies regard as the promising, future growth market(s)?
It is the worldwide infrastructure market, such as power generation. According to Organization for Economic Co-operation and Development (OECD), worldwide amount of power to be generated will be more than 3 trillion kW/h in 2035, which is increase by 80% from 2008. Investment in power generation infrastructure is expected to reach as much as 130 trillion yen between 2010 and 2035, of which 1/4 (approximately 32 trillion yen) is expected to be in China.
4. In which sector(s) the two companies could generate synergy if they are integrated?
One possible sector that the two companies generate synergy by leveraging their strengths is “Smart City” business. This is a city in which energy is efficiently used leveraging IT, of utilizing natural energy such as wind and solar.
This is because Hitachi is engaged in both social infrastructure and IT system, and Mitsubishi has world class technology in renewable energy such as wind and geothermal power.
In the next article, the author would like to introduce what Nikkei means when they say “historical turning point in industries in Japan”.
Resources:-
Hitachi and Mitsubishi Heavy Industries started discussing integration of their main businesses including social infrastructure, with a possibility of future merger (management integration) of the two companies. This is because although they are the two leaders in Japan with world class technology in R&D, they are not competitive enough to survive and compete in the global market. With integration, they aim to generate synergy in promising market expected to grow in the future such as power generation, leveraging their strengths. Their discussion, together with recent M&A related announcements, means that Japan is facing a historical turning point in its core industries.
Following the announcement made by Panasonic on July 28 of selling their refrigerator and washing machine business originally of Sanyo to Haier explained in the previous article Increasing Chinese Companies Acquiring Japanese Companies – How and Why?, Nikkei, Japan’s leading newspaper specialized in business and economy, reported on August 5 that Hitachi and Mitsubishi Heavy Industries are to start discussing integration of their main businesses including social infrastructure, with a possibility of future merger (management integration) of the two companies.
Taking this opportunity, Nikkei also made a special article insisting that Japan is facing a historical turning point in its core industries. This is because the recent M&A related announcements are the signs that restructuring in manufacturing industries, the “engine” of the Japanese economy.
1. Why the two companies decided to start discussing integration of their social infrastructure business?
It is because although the two companies are leading companies in this business domain in Japan, it is extremely difficult for them to compete and survive in the global market. The two companies do have world-class R&D capability but to compete in the global market they need to further become competitive in total power.
They realized this because recently they have been losing business negotiations for order intakes and their western counterparts winning. This attributes primarily to the fact that they were slower than their western counterparts to start developing business in future growth markets, in emerging countries in particular in earnest.
Such examples include the business negotiation for order intake of coal-fired thermal power station of Malaysia in March this year, the largest one in South East Asia, in which Mitsubishi lost and Alstom won (Hitachi also was involved in this at the beginning). In September of 2010, Hitachi lost and group of Canadian companies including Bombardier won the business negotiation of order intake of monorail construction of Sao Paulo, Brazil.
2. What is the positioning of the two companies in the global market?
This is summarized below (Source: Nikkei, translated by the author).
Company / No. of Employees (kilo) / Sales (trillion yen) / Net Profit (billon yen)
GE / 280 / 11.8658 / 916.4
Siemens / 400 / 8.5880 / 463.3
Hitachi / 360 / 9.3158 / 238.8
Mitsubishi Heavy Industries / 2.9037 / 30.1
* GE: for fiscal year ending December 2010, Siemens: for fiscal year ending September 2010, Hitachi and Mitsubishi: for fiscal year ending March 2011. 1 USD = 79 yen, 1 Euro = 113 yen
For gas turbine sector, #1 is GE with market share of 44%. #2 is Siemens with market share of 28%. #3 is Mitsubishi but with market share of only 8%.
And for railway sector, total market share of the big 3 companies (Bompardier of Canada, Alstom of France, Siemens of Germany) reach over 50%, with solid manufacturing and maintenance sites worldwide, when it is only just less than 5% for Hitachi.
3. Which market(s) do the two companies regard as the promising, future growth market(s)?
It is the worldwide infrastructure market, such as power generation. According to Organization for Economic Co-operation and Development (OECD), worldwide amount of power to be generated will be more than 3 trillion kW/h in 2035, which is increase by 80% from 2008. Investment in power generation infrastructure is expected to reach as much as 130 trillion yen between 2010 and 2035, of which 1/4 (approximately 32 trillion yen) is expected to be in China.
4. In which sector(s) the two companies could generate synergy if they are integrated?
One possible sector that the two companies generate synergy by leveraging their strengths is “Smart City” business. This is a city in which energy is efficiently used leveraging IT, of utilizing natural energy such as wind and solar.
This is because Hitachi is engaged in both social infrastructure and IT system, and Mitsubishi has world class technology in renewable energy such as wind and geothermal power.
In the next article, the author would like to introduce what Nikkei means when they say “historical turning point in industries in Japan”.
Resources:-
Hitachi and Mitsubishi Heavy Industries started discussing integration of their main businesses including social infrastructure, with a possibility of future merger (management integration) of the two companies. This is because although they are the two leaders in Japan with world class technology in R&D, they are not competitive enough to survive and compete in the global market. With integration, they aim to generate synergy in promising market expected to grow in the future such as power generation, leveraging their strengths. Their discussion, together with recent M&A related announcements, means that Japan is facing a historical turning point in its core industries.
2011年7月31日日曜日
Increasing Chinese Companies Acquiring Japanese Companies – How and Why?
Osaka - Sunday, July 31, 2011
Nikkei, Japan’s leading newspaper specialized in business and economy, reported on July 29 that more Chinese companies have been acquiring Japanese companies, taking the opportunity of reporting the announcement made by Panasonic on July 28 that refrigerator and washing machine business originally of Sanyo is to be sold to Haier, a leading Chinese consumer electronics company.
1. What is the acquisition by Haier of Panasonic’s business all about?
1) What is the overview of the acquisition?
On July 28, Sanyo reached a basic agreement with Haier to transfer stocks of 9 companies of refrigerator and washing machine business including Sanyo Aqua by the end of the year. Sanyo will also transfer home appliance businesses including air conditioners for 4 South East Asia countries including Vietnam, allowing the use of “Sanyo” brand for a few years.
The business size of the business to be acquired by Haier is approximately 70 billion yen (for 2010), engaged by 2,300 employees worldwide. The acquisition cost is not revealed but experts estimate that it is around 10 billion yen. Panasonic (Sanyo) and Haier are to reach the final agreement by the end of September.
2) Why Haier decided to acquire Sanyo’s refrigerator and washing machine business?
It is to develop high value products leveraging leading edge technologies of washing machines and refrigerators that Sanyo poses. In this way, Haier will be able to meet the needs of drastically increasing middle class in emerging countries and accelerate globalization of their businesses. Such technologies include washing clothes without water using Sanyo’s washing machines and minimizing noise during operation of Sanyo’s washing machines and refrigerators.
Haier started to globalize their business from the end of 1990s and has been expanding sales channels in the U.S., the Middle East etc. The company also had established development sites outside China to launch products meeting local needs. In addition, the company had been manufacturing locally to improve cost competitiveness to grow their business.
Today, their 1/4 of the worldwide business (1,640 billion yen in 2010) is generated from production and sales outside China. The company’s vision is to become the worldwide leader in home appliances, with their business generated from production and sales outside China reaching 1/3 of their worldwide sales.
With the acquisition, the company will be able to obtain sales/distribution channel in Japan and in some major South East Asia, a great “weapon” to achieve their vision. Sanyo had spent 40 years establishing production sites and sales channels and penetrating their brand in South East Asia. That is why recently Sanyo has been enjoying market share of 30% in washing machine and refrigerator business in Vietnam and 10% in Indonesia. In fact, 1,600 employees out of 2,300 employees that have been engaged in the businesses acquired by Haier are in Vietnam and Indonesia.
3) Why Panasonic decided to sell Sanyo’s refrigerator and washing machine businesses to Haier?
It is to focus their limited management resources to other businesses and markets especially emerging markets such as India and Latin America. This would enable them to strengthen product competitiveness and grow business.
Panasonic’s home appliance business for April – June was strong with operation income of 9.8% largely attributing to strong demand of energy saving products after the Japan disaster. However, to further grow their business, strengthening their overseas business in such markets as India, Latin America and Europe is a challenge they currently face.
2. What other acquisitions of Japanese companies/businesses have been made by Chinese companies?
The major ones are summarized in the chart below, followed by a brief outline of a few major M&As.
Recent acquisitions and funding of Japanese companies by Chinese companies
(Source: Nikkei, translated by the author)
Japanese Companies (business seller) / Chinese companies (acquirer or investor) / Timing of announcement / Overview of the M&A
Panasonic Haier July 2011 Acquire Sanyo’s home appliance business
Laox Suning June 2011 Raise investment ratio to make Laox its affiliate. Open new shops in Greater China
NEC Tianma Feb 2011 Acquire 70% stock of small-mid sized LCD panel business affiliate
Panasonic Hunan Corun New Energy Feb 2011 Acquire Nickel-Hydride battery business for bicycles with 500 mil yen
NEC Lenovo Group Jan 2011 Merger in PC business. Lenovo invests 50%+
Renown China Ruyi Group May 2010 Acquire 40% stocks with 4 bil yen
Ogihara BYD March 2010 Acquire factory to obtain molding technologies
Evatech A-Power Feb 2011 Acquire solar battery venture under restructuring with 4.5 bil yen
Honma Golf Marlion Holdings Acquire 50%+ stock owned by the 2 parent companies
1) Why Lenovo acquired NEC’s PC business?
After announced the M&A in January 2011, Lenovo completed acquisition of management right of NEC’s PC business in Japan, a big step forward to gain #1 market share in Japan as well as in Greater China. Lenovo aims to enhance purchasing power and reduce component cost.
2) Why BYD acquired Ogihara’s factory?
It is to expand manufacturing capacity of high quality molding of automobile bodies. Thus, BYD, a new and growing Chinese automobile company, acquired molding factory of Ogihara, a leading Japanese molding company in March 2010.
3) Why Suning made Laox one of its affiliates?
It is to absorb know how of Japanese style shop management and acquire more customers in the Chinese market leveraging Japanese brand.
3. Why have acquisition of Japanese companies by Chinese companies been increasing despite high yen?
It is, as prominent from the above cases, Chinese companies would be able to leverage leading technologies, brand and sales/distribution channel cultivated by Japanese companies, to accelerate their growth and globalization of their business.
It is case by case for Japanese companies. Japanese companies can sell businesses that have little value to them such as the case of Panasonic and Evatech, or obtain an access to Greater China market such as the case of Laox.
In addition, a Japanese M&A advisor pointed out that the mindset and attitude of Japanese companies towards M&A has been changing. He says that more Japanese executives now believe that selling their businesses of little value to them to Chinese companies would result in more growth than restructuring and integrating their domestic businesses.
Resources:-
Increasing Chinese companies have been acquiring businesses of Japanese companies to leverage technologies, brand and sales/distribution channels that Japanese companies have been cultivating for years, to boost their business globalization and worldwide business growth. Such trend is driven by the change in mindset of Japanese executives, many of whom now believe that selling their businesses with little value to them to Chinese companies would result in greater growth than restructuring and integrating the businesses.
Nikkei, Japan’s leading newspaper specialized in business and economy, reported on July 29 that more Chinese companies have been acquiring Japanese companies, taking the opportunity of reporting the announcement made by Panasonic on July 28 that refrigerator and washing machine business originally of Sanyo is to be sold to Haier, a leading Chinese consumer electronics company.
1. What is the acquisition by Haier of Panasonic’s business all about?
1) What is the overview of the acquisition?
On July 28, Sanyo reached a basic agreement with Haier to transfer stocks of 9 companies of refrigerator and washing machine business including Sanyo Aqua by the end of the year. Sanyo will also transfer home appliance businesses including air conditioners for 4 South East Asia countries including Vietnam, allowing the use of “Sanyo” brand for a few years.
The business size of the business to be acquired by Haier is approximately 70 billion yen (for 2010), engaged by 2,300 employees worldwide. The acquisition cost is not revealed but experts estimate that it is around 10 billion yen. Panasonic (Sanyo) and Haier are to reach the final agreement by the end of September.
2) Why Haier decided to acquire Sanyo’s refrigerator and washing machine business?
It is to develop high value products leveraging leading edge technologies of washing machines and refrigerators that Sanyo poses. In this way, Haier will be able to meet the needs of drastically increasing middle class in emerging countries and accelerate globalization of their businesses. Such technologies include washing clothes without water using Sanyo’s washing machines and minimizing noise during operation of Sanyo’s washing machines and refrigerators.
Haier started to globalize their business from the end of 1990s and has been expanding sales channels in the U.S., the Middle East etc. The company also had established development sites outside China to launch products meeting local needs. In addition, the company had been manufacturing locally to improve cost competitiveness to grow their business.
Today, their 1/4 of the worldwide business (1,640 billion yen in 2010) is generated from production and sales outside China. The company’s vision is to become the worldwide leader in home appliances, with their business generated from production and sales outside China reaching 1/3 of their worldwide sales.
With the acquisition, the company will be able to obtain sales/distribution channel in Japan and in some major South East Asia, a great “weapon” to achieve their vision. Sanyo had spent 40 years establishing production sites and sales channels and penetrating their brand in South East Asia. That is why recently Sanyo has been enjoying market share of 30% in washing machine and refrigerator business in Vietnam and 10% in Indonesia. In fact, 1,600 employees out of 2,300 employees that have been engaged in the businesses acquired by Haier are in Vietnam and Indonesia.
3) Why Panasonic decided to sell Sanyo’s refrigerator and washing machine businesses to Haier?
It is to focus their limited management resources to other businesses and markets especially emerging markets such as India and Latin America. This would enable them to strengthen product competitiveness and grow business.
Panasonic’s home appliance business for April – June was strong with operation income of 9.8% largely attributing to strong demand of energy saving products after the Japan disaster. However, to further grow their business, strengthening their overseas business in such markets as India, Latin America and Europe is a challenge they currently face.
2. What other acquisitions of Japanese companies/businesses have been made by Chinese companies?
The major ones are summarized in the chart below, followed by a brief outline of a few major M&As.
Recent acquisitions and funding of Japanese companies by Chinese companies
(Source: Nikkei, translated by the author)
Japanese Companies (business seller) / Chinese companies (acquirer or investor) / Timing of announcement / Overview of the M&A
Panasonic Haier July 2011 Acquire Sanyo’s home appliance business
Laox Suning June 2011 Raise investment ratio to make Laox its affiliate. Open new shops in Greater China
NEC Tianma Feb 2011 Acquire 70% stock of small-mid sized LCD panel business affiliate
Panasonic Hunan Corun New Energy Feb 2011 Acquire Nickel-Hydride battery business for bicycles with 500 mil yen
NEC Lenovo Group Jan 2011 Merger in PC business. Lenovo invests 50%+
Renown China Ruyi Group May 2010 Acquire 40% stocks with 4 bil yen
Ogihara BYD March 2010 Acquire factory to obtain molding technologies
Evatech A-Power Feb 2011 Acquire solar battery venture under restructuring with 4.5 bil yen
Honma Golf Marlion Holdings Acquire 50%+ stock owned by the 2 parent companies
1) Why Lenovo acquired NEC’s PC business?
After announced the M&A in January 2011, Lenovo completed acquisition of management right of NEC’s PC business in Japan, a big step forward to gain #1 market share in Japan as well as in Greater China. Lenovo aims to enhance purchasing power and reduce component cost.
2) Why BYD acquired Ogihara’s factory?
It is to expand manufacturing capacity of high quality molding of automobile bodies. Thus, BYD, a new and growing Chinese automobile company, acquired molding factory of Ogihara, a leading Japanese molding company in March 2010.
3) Why Suning made Laox one of its affiliates?
It is to absorb know how of Japanese style shop management and acquire more customers in the Chinese market leveraging Japanese brand.
3. Why have acquisition of Japanese companies by Chinese companies been increasing despite high yen?
It is, as prominent from the above cases, Chinese companies would be able to leverage leading technologies, brand and sales/distribution channel cultivated by Japanese companies, to accelerate their growth and globalization of their business.
It is case by case for Japanese companies. Japanese companies can sell businesses that have little value to them such as the case of Panasonic and Evatech, or obtain an access to Greater China market such as the case of Laox.
In addition, a Japanese M&A advisor pointed out that the mindset and attitude of Japanese companies towards M&A has been changing. He says that more Japanese executives now believe that selling their businesses of little value to them to Chinese companies would result in more growth than restructuring and integrating their domestic businesses.
Resources:-
Increasing Chinese companies have been acquiring businesses of Japanese companies to leverage technologies, brand and sales/distribution channels that Japanese companies have been cultivating for years, to boost their business globalization and worldwide business growth. Such trend is driven by the change in mindset of Japanese executives, many of whom now believe that selling their businesses with little value to them to Chinese companies would result in greater growth than restructuring and integrating the businesses.
Japanese Electronics Business and Performance – Why Strong and Weak?
Osaka - Sunday, July 31, 2011
Nikkei, Japan’s leading newspaper specialized in business and economy, reported on July 30 that announcement of financial performance of 8 major Japanese electronics for April – June 2011 (consolidated base) was complete and that there were large contrasts among them.
It is true that the Japan disaster that occurred on March 11 have negatively impacted them all attributing to shortage of components; however, it is apparent that some companies performed far better than others. This attributes to the differences in recovery and strength of business sectors. Some have started to recover and some others have been rather strong when some others have been weak.
1. How was the financial performance of the eight major Japanese electronics?
It is summarized in the chart below.
For Fiscal Year 2011, Consolidated
Company name / Sales (amount) / Sales (change from previous year) / Profit (amount) / Profit (change from previous year)
Hitachi* April-June / 2,150.6 / 0% / 2.9 / -97%
Hitachi* April-March / 9,500.0 / 2% / 200.0 / -16%
Panasonic* April-June / 1,929.5 / -11% / -30.3 /Fell to negative
Panasonic* April-March / 8,700.0 / 0% / 30.0 /-59%
Sony* April-June / 1,494.9 / -10% / -15.5 / Fell to negative
Sony* April-March / 7,200.0 / 0% / 60.0 /Returned to positive
Toshiba* April-June / 1,326.1 / -9% / 0.4 / 1%
Toshiba* April-March / 7,000.0 / 9% / 140.0 / 2%
Fujitsu April-June / 986.0 / -6% / -20.4 / Fell to negative
Fujitsu April-March / 4,600.0 / 2% / 60.0 / 9%
Mitsubishi Electric* April-June / 813.6 / 4% / 27.1 / 4%
Mitsubishi Electric* April-March / 3,790.0 / 4% / 135.0 / 8%
NEC April-June / 669.1 / 0% / -29.7 / Remained in negative
NEC April-March / 3,300.0 / 6% / 15.0 / Returned to positive
Sharp April-June / 640.3 / -14% / -49.2 / Fell to negative
Sharp April-March / 3,050.0 / 1% / 6.0 / -69%
* GAAP: Generally Accepted Accounting Principles
2. Which sectors started to smoothly recover from the disaster?
It is automobile related business sectors, which have started to recover above the original outlook.
Mainly for this reason, Hitachi made upward revision in their estimation of net profit for April – September from zero to 10 billion yen. The company also revised upward of their operation income estimation from 80 billion yen to 100 billion yen and expects 76 billion yen operation income in black. The growth in their construction machinery business in Asia and other emerging countries also is the reason for their upward adjustment. As a result, although high yen is a negative factor, the company did not revise downward their estimation for the fiscal year 2011 ending March 2012.
For the very similar reason, Mitsubishi Electric made upward revision their estimation of net profit for April – September from 45 billion yen to 55 billion yen. The order they received in June for automobile related business recovered to the same level as a year ago, and their factory automation related business in Asia remains strong. As a result, the company revised upward their estimation of the net profit for the fiscal year 2011 ending March 2012 from 135 billion yen from 10 billion yen.
3. Which sector in consumer electronics was strong?
It is home appliance. This is because after the disaster the general public became extremely aware of the eco (ecology and economy, i.e. energy saving) due to nationwide electricity shortage. This led to strong revenue in many home appliance businesses of energy saving products, in particular air conditioners, resulting in stronger performance of Mitsubishi Electric, Toshiba and Hitachi compared to other 5 companies.
Home appliances, although their price is stable compared to digital AV products, have been regarded as not as strong as digital AV because replacement cycle is long. However, home appliances profitability improved because each company launched value-added products of energy saving, antibacterial system/coating and so forth. Home appliance sales were strong in emerging countries where their life standard has been uplifting.
Mitsubishi Electric benefited from such strong home appliance businesses in addition to the recovery of automobile related businesses and strong social infrastructure businesses in Asia. Their worldwide sales of air conditioners and other energy saving home appliances such as refrigerators were strong. This contributed to 4% increase in the operating income for April – June from a year ago for their consumer electronics business.
For the very similar reason, Toshiba’s operating profit for April – June came back to black (positive) after 9 years.
4. Which sector in consumer electronics was weak?
It is digital AV. Flat panel TV demand has been sluggish especially in Europe. Prices have dropped dramatically in most products due to severe competition. As a result, revenue and profitability deteriorated yet there is no sign of improvement for the time being.
For this reason, Panasonic, Sony and Sharp, the three companies with large portion of their business in digital AV products fell in red (negative) for April – June.
Resources:-
The recent contrasts of financial performance announcement of 8 major Japanese electronics companies attributes to which business sectors each of them focuses in. Automobile related sector recovery is above original expectation when others are not, Asia social infrastructure businesses have been strong, home appliances businesses were strong but digital AV businesses were weak.
Nikkei, Japan’s leading newspaper specialized in business and economy, reported on July 30 that announcement of financial performance of 8 major Japanese electronics for April – June 2011 (consolidated base) was complete and that there were large contrasts among them.
It is true that the Japan disaster that occurred on March 11 have negatively impacted them all attributing to shortage of components; however, it is apparent that some companies performed far better than others. This attributes to the differences in recovery and strength of business sectors. Some have started to recover and some others have been rather strong when some others have been weak.
1. How was the financial performance of the eight major Japanese electronics?
It is summarized in the chart below.
For Fiscal Year 2011, Consolidated
Company name / Sales (amount) / Sales (change from previous year) / Profit (amount) / Profit (change from previous year)
Hitachi* April-June / 2,150.6 / 0% / 2.9 / -97%
Hitachi* April-March / 9,500.0 / 2% / 200.0 / -16%
Panasonic* April-June / 1,929.5 / -11% / -30.3 /Fell to negative
Panasonic* April-March / 8,700.0 / 0% / 30.0 /-59%
Sony* April-June / 1,494.9 / -10% / -15.5 / Fell to negative
Sony* April-March / 7,200.0 / 0% / 60.0 /Returned to positive
Toshiba* April-June / 1,326.1 / -9% / 0.4 / 1%
Toshiba* April-March / 7,000.0 / 9% / 140.0 / 2%
Fujitsu April-June / 986.0 / -6% / -20.4 / Fell to negative
Fujitsu April-March / 4,600.0 / 2% / 60.0 / 9%
Mitsubishi Electric* April-June / 813.6 / 4% / 27.1 / 4%
Mitsubishi Electric* April-March / 3,790.0 / 4% / 135.0 / 8%
NEC April-June / 669.1 / 0% / -29.7 / Remained in negative
NEC April-March / 3,300.0 / 6% / 15.0 / Returned to positive
Sharp April-June / 640.3 / -14% / -49.2 / Fell to negative
Sharp April-March / 3,050.0 / 1% / 6.0 / -69%
* GAAP: Generally Accepted Accounting Principles
Source: Nikkei, translated by the author
2. Which sectors started to smoothly recover from the disaster?
It is automobile related business sectors, which have started to recover above the original outlook.
Mainly for this reason, Hitachi made upward revision in their estimation of net profit for April – September from zero to 10 billion yen. The company also revised upward of their operation income estimation from 80 billion yen to 100 billion yen and expects 76 billion yen operation income in black. The growth in their construction machinery business in Asia and other emerging countries also is the reason for their upward adjustment. As a result, although high yen is a negative factor, the company did not revise downward their estimation for the fiscal year 2011 ending March 2012.
For the very similar reason, Mitsubishi Electric made upward revision their estimation of net profit for April – September from 45 billion yen to 55 billion yen. The order they received in June for automobile related business recovered to the same level as a year ago, and their factory automation related business in Asia remains strong. As a result, the company revised upward their estimation of the net profit for the fiscal year 2011 ending March 2012 from 135 billion yen from 10 billion yen.
3. Which sector in consumer electronics was strong?
It is home appliance. This is because after the disaster the general public became extremely aware of the eco (ecology and economy, i.e. energy saving) due to nationwide electricity shortage. This led to strong revenue in many home appliance businesses of energy saving products, in particular air conditioners, resulting in stronger performance of Mitsubishi Electric, Toshiba and Hitachi compared to other 5 companies.
Home appliances, although their price is stable compared to digital AV products, have been regarded as not as strong as digital AV because replacement cycle is long. However, home appliances profitability improved because each company launched value-added products of energy saving, antibacterial system/coating and so forth. Home appliance sales were strong in emerging countries where their life standard has been uplifting.
Mitsubishi Electric benefited from such strong home appliance businesses in addition to the recovery of automobile related businesses and strong social infrastructure businesses in Asia. Their worldwide sales of air conditioners and other energy saving home appliances such as refrigerators were strong. This contributed to 4% increase in the operating income for April – June from a year ago for their consumer electronics business.
For the very similar reason, Toshiba’s operating profit for April – June came back to black (positive) after 9 years.
4. Which sector in consumer electronics was weak?
It is digital AV. Flat panel TV demand has been sluggish especially in Europe. Prices have dropped dramatically in most products due to severe competition. As a result, revenue and profitability deteriorated yet there is no sign of improvement for the time being.
For this reason, Panasonic, Sony and Sharp, the three companies with large portion of their business in digital AV products fell in red (negative) for April – June.
Resources:-
The recent contrasts of financial performance announcement of 8 major Japanese electronics companies attributes to which business sectors each of them focuses in. Automobile related sector recovery is above original expectation when others are not, Asia social infrastructure businesses have been strong, home appliances businesses were strong but digital AV businesses were weak.
2011年7月24日日曜日
Sluggish Direct Investment in Japan – Why and How to Improve
Osaka - Sunday, July 24, 2011
Nikkei, Japan’s leading newspaper specialized in business and economy, explained today about the target that was set by the Japanese government in the Koizumi Administration and its achievement.
The target wet was to double the direct investment in Japan by foreign capital in four years to increase to 5% of GDP by the end of 2010; however, the achievement was 3.7% of GDP. Percentage of the increase in the direct investment in Japan was only around 50% of the original target.
This did not draw much attention from the economists and general public because the target was set by the Liberal Democratic Party (LDP), the leading party of that time and not Democratic Party of Japan (DPJ), the current leading party. However, this has much meaning to the economy.
1. What is the main reason/background that the target was not achieved?
It is the drastic decrease in the importance of Japan in Asia. According to a survey executed by Ministry of Economy, Trade and Industry (METI), the number of foreign capitals/companies withdrawing from in Japan has been larger than the number of foreign capitals/companies that has been entering Japan.
The recent survey executed by METI targeting foreign capitals/companies asking how attractive Japan is as a business site in Asia explicitly supports it. Japan was #1 for R&D site in 2007 but the #1 position was taken over by China and Japan became #2. Japan was #1 also as APAC Regional HQ but fallen to #4.
2. Why Japan is not as attractive as other Asian countries to invest in?
The main reason for decrease in the attractiveness of Japan as a business site in Asia (i.e. a country to invest in) might be summarized as the smaller growth compared with other countries but that is not all.
Other reasons include slow start of joining the competition with other countries of providing incentives to attract foreign investment in the country. Countries such as China, Korea and Singapore have been proactively providing incentives in the area of tax and regulation to promote foreign capitals entering their country.
The Japanese government also started to set policies to promote Japan as an attractive country to invest in but is rather slow. The plan of decreasing corporate tax that is currently extremely high compared with other countries is yet to be implemented. Tax incentives to be given to foreign capitals when requirements of investment, employment etc. are met is still being studied in the Diet and it seems that it takes a while for its implementation.
3. Is this issue only about foreign capitals? Would it affect decision making of Japanese companies as well?
It is not only about foreign capitals and it is more than likely to affect global strategy of Japanese companies as well. This is because all global companies including those based in Japan would need to develop and execute their global strategy pursuing optimum location in the world.
Indeed, a few Japanese global companies started to relocate “strategic and intelligence-oriented functions” such as strategic planning, R&D and marketing to other countries in Asia. Today, when more than half of the business is operated and revenue is generated outside the home country, global companies located in Japan would be asked for accountability to locate strategic department in Japan.
This means that not only manufacturing sites but also strategic and intelligence-oriented functions may well outflow from Japan to other countries in Asia if appropriate measures are not taken by the government, academia, and industries, both public and private sectors.
4. What is one possible primary solution in avoiding outflow of strategic and intelligence-oriented functions?
It is attracting and acquiring globally-competitive talents. According to Ms. Sanae Tachibana Fukushima, the advisor of Korn/Ferry International APAC, top management of Japanese global companies started to realize this in the last year or two. They did not understand the significance of recruiting non-Japanese talent in the global HQ located in Japan but now they are extremely proactive in acquiring talent from around the globe.
If globally-competitive talent can be attracted and acquired in Japan from around the globe, the significance of locating HQ and other strategic and intelligence-oriented functions in Japan as the site to develop and execute global strategy would drastically increase.
5. What would be necessary to create an environment to attract and acquire globally-competitive talents?
1) Talents from around the globe
The most important policy would be creating an environment for non-Japanese talents to work in Japan such as making them easier to acquire visa to live and work in Japan. Providing them with tax incentive could be another option. Of course, providing talents with attractive work environment and challenging opportunities for development would also be vital as well.
2) Japanese talents from Japan
Improve education level of universities in Japan to up-level new graduates and increase the talent pool especially of scientists and engineers. And provide talents with attractive work environment and challenging opportunities for development.
6. What other requirements are necessary to make Japan more attractive country to invest in?
One is to make Japan be involved in the global network of EPA. Another is globally-competitive financial (stock/capital) market.
Both requirements are vital in today’s global economy, which requires initiative from the government meaning strong leadership.
Resources:-
Direct investment to Japan by foreign capitals has been sluggish when direct investment to other countries in Asia has been increasing. This attributes mainly to the differences in tax and regulation incentives to attract investments by foreign capitals, which would impact global strategy of Japanese companies as well. Creating an environment to attract globally-competitive talents worldwide, joining EPA and improving globally competitive financial market are requirements to improve the attractiveness of the country to invest in.
Nikkei, Japan’s leading newspaper specialized in business and economy, explained today about the target that was set by the Japanese government in the Koizumi Administration and its achievement.
The target wet was to double the direct investment in Japan by foreign capital in four years to increase to 5% of GDP by the end of 2010; however, the achievement was 3.7% of GDP. Percentage of the increase in the direct investment in Japan was only around 50% of the original target.
This did not draw much attention from the economists and general public because the target was set by the Liberal Democratic Party (LDP), the leading party of that time and not Democratic Party of Japan (DPJ), the current leading party. However, this has much meaning to the economy.
1. What is the main reason/background that the target was not achieved?
It is the drastic decrease in the importance of Japan in Asia. According to a survey executed by Ministry of Economy, Trade and Industry (METI), the number of foreign capitals/companies withdrawing from in Japan has been larger than the number of foreign capitals/companies that has been entering Japan.
The recent survey executed by METI targeting foreign capitals/companies asking how attractive Japan is as a business site in Asia explicitly supports it. Japan was #1 for R&D site in 2007 but the #1 position was taken over by China and Japan became #2. Japan was #1 also as APAC Regional HQ but fallen to #4.
2. Why Japan is not as attractive as other Asian countries to invest in?
The main reason for decrease in the attractiveness of Japan as a business site in Asia (i.e. a country to invest in) might be summarized as the smaller growth compared with other countries but that is not all.
Other reasons include slow start of joining the competition with other countries of providing incentives to attract foreign investment in the country. Countries such as China, Korea and Singapore have been proactively providing incentives in the area of tax and regulation to promote foreign capitals entering their country.
The Japanese government also started to set policies to promote Japan as an attractive country to invest in but is rather slow. The plan of decreasing corporate tax that is currently extremely high compared with other countries is yet to be implemented. Tax incentives to be given to foreign capitals when requirements of investment, employment etc. are met is still being studied in the Diet and it seems that it takes a while for its implementation.
3. Is this issue only about foreign capitals? Would it affect decision making of Japanese companies as well?
It is not only about foreign capitals and it is more than likely to affect global strategy of Japanese companies as well. This is because all global companies including those based in Japan would need to develop and execute their global strategy pursuing optimum location in the world.
Indeed, a few Japanese global companies started to relocate “strategic and intelligence-oriented functions” such as strategic planning, R&D and marketing to other countries in Asia. Today, when more than half of the business is operated and revenue is generated outside the home country, global companies located in Japan would be asked for accountability to locate strategic department in Japan.
This means that not only manufacturing sites but also strategic and intelligence-oriented functions may well outflow from Japan to other countries in Asia if appropriate measures are not taken by the government, academia, and industries, both public and private sectors.
4. What is one possible primary solution in avoiding outflow of strategic and intelligence-oriented functions?
It is attracting and acquiring globally-competitive talents. According to Ms. Sanae Tachibana Fukushima, the advisor of Korn/Ferry International APAC, top management of Japanese global companies started to realize this in the last year or two. They did not understand the significance of recruiting non-Japanese talent in the global HQ located in Japan but now they are extremely proactive in acquiring talent from around the globe.
If globally-competitive talent can be attracted and acquired in Japan from around the globe, the significance of locating HQ and other strategic and intelligence-oriented functions in Japan as the site to develop and execute global strategy would drastically increase.
5. What would be necessary to create an environment to attract and acquire globally-competitive talents?
1) Talents from around the globe
The most important policy would be creating an environment for non-Japanese talents to work in Japan such as making them easier to acquire visa to live and work in Japan. Providing them with tax incentive could be another option. Of course, providing talents with attractive work environment and challenging opportunities for development would also be vital as well.
2) Japanese talents from Japan
Improve education level of universities in Japan to up-level new graduates and increase the talent pool especially of scientists and engineers. And provide talents with attractive work environment and challenging opportunities for development.
6. What other requirements are necessary to make Japan more attractive country to invest in?
One is to make Japan be involved in the global network of EPA. Another is globally-competitive financial (stock/capital) market.
Both requirements are vital in today’s global economy, which requires initiative from the government meaning strong leadership.
Resources:-
Direct investment to Japan by foreign capitals has been sluggish when direct investment to other countries in Asia has been increasing. This attributes mainly to the differences in tax and regulation incentives to attract investments by foreign capitals, which would impact global strategy of Japanese companies as well. Creating an environment to attract globally-competitive talents worldwide, joining EPA and improving globally competitive financial market are requirements to improve the attractiveness of the country to invest in.
2011年7月18日月曜日
Retailers Invest in Toyoku for Recovery from the Japan Disaster
Osaka - Monday, July 18, 2011
Nikkei, Japan’s leading newspaper specialized in business and economy, reported today that leading Japanese retailers are heavily investing in Tohoku area, the most hard hit regions by the earthquake and tsunami that broke out on March 11 such as opening new shops and reforming current shops.
Population of Tohoku region has been on the decrease and recovery plan of local government from the disaster has not been proceeding quickly; however, the retailers believe that recovery consumption from the disaster to rebuild everyday lives of the victims would be sustainable and therefore they have started to heavily invest in the area.
1. How has been the recent business trend of retailers in the Tohoku area?
According to sales trend of large retailers recently announced by Ministry of Economy, Trade and Industry (METI), sales of department stores and supermarkets for May in the 6 Tohoku prefectures (Aomori, Akita, Iwate, Miyagi, Yamagata and Fukushim) was 1.5% increase from May 2010 when it was 1.3% decrease from Ma 2010 for nationwide. Similarly, it was 10.9% increase for convenience stores in six Tohoku prefectures when it was 7.3% increase for nationwide.
This partly attributes to the fact that large franchise retailers have been investing to cover up for the local shops that went out of business immediately after the disaster.
Consumer electronics mass merchandisers and others follow the very similar trend as well.
2. How are retailers aggressively opening new shops in Tohoku?
1) Convenience Stores
Mini Stop (under the umbrella of Aeon, the leading supermarket in Japan), is to open 100 new shops in Miyagi and Fukushima in three years starting 2011. This is three times more new shops to be opened from the original plan made before the outbreak of the disaster. The locations of the new shops are concentrated in such cities as Imaki in Miyagi and coastal areas of Sendai where the recovery and rebuilt of the area is needed the most. The company plans to employ victims as contract workers and support relocation and housing.
Family Mart plans to open 85 new stores in Iwate, Miyagi and Fukushima including temporary ones, which is five times that of the original plan made before the disaster outbreak.
Seven Eleven Japan and Lawson have not changed their plan of new store opening but they are to proactively open temporal stores in the devastated area according the local needs.
2) Others
K’s Holdings, a consumer electronics mass merchandiser, say that their sales for June in the six Tohoku prefectures were 50% increase from June 2010, when it was 40% increase nationwide. The chairman of the company commented that the recovery consumption is estimated to continue for the next two or three years and therefore the company is to increase the number of new stores to be opened from its original plan of one to four.
Yamada, the consumer electronics mass merchandiser leader in Japan, also plans to open 15 to 20 stores in the six Tohoku prefectures this year.
Tsuruha Holdigs, a leading drug store in Japan, plans to open 34 new stores in 2011. This is 60% increase from the previous year.
3. How retailers plan to meet recovery demand by reviewing their current shops?
Aeon is to invest 12 – 13 billion yen in reforming their current supermarket stores in Tohoku, in addition to their regular reform investment. The company also plans to expand shop floors of housing related products and services and so forth to meet the local needs that are to go through recovery from the disaster.
Itoyokado, supermarket franchise company under the umbrella of Seven and i Holdings, originally planned to close seven stores nationwide in 2012 but revised to close two stores because the recent consumption is strong. The five stores that are now to continue their business seem to include those located in Tohoku. The top executive of the company commented that their plan revision is also to support the recovery of the devastated area.
4. Is it only retailers that are proactively investing in Tohoku?
No, because the recovery consumption is expected to range not only in other sectors as well.
For example, Kohnan, a leader in Do It Yourself (DIY) industry in Japan, is to open new stores specialized BtoB in selling building materials and industrial tools for construction companies operating in Tohoku in order to benefit from increase in construction demand in the area. The company plans to open the first store in October in Sendai City and five or six more stores in Miyagi by the end of this year.
Resources:-
When many factories etc. are being relocated away from Tohoku and eastern Japan, retailers are proactively investing in Tohoku, especially in the devastated area, in order to benefit from recovery consumption from the disaster and also to support the recovery and reconstruction of the devastated area. The recovery consumption is likely to be not limited to retailers (products and services related to everyday lives of people) but also to other sectors such as BtoB of construction related industries.
Nikkei, Japan’s leading newspaper specialized in business and economy, reported today that leading Japanese retailers are heavily investing in Tohoku area, the most hard hit regions by the earthquake and tsunami that broke out on March 11 such as opening new shops and reforming current shops.
Population of Tohoku region has been on the decrease and recovery plan of local government from the disaster has not been proceeding quickly; however, the retailers believe that recovery consumption from the disaster to rebuild everyday lives of the victims would be sustainable and therefore they have started to heavily invest in the area.
1. How has been the recent business trend of retailers in the Tohoku area?
According to sales trend of large retailers recently announced by Ministry of Economy, Trade and Industry (METI), sales of department stores and supermarkets for May in the 6 Tohoku prefectures (Aomori, Akita, Iwate, Miyagi, Yamagata and Fukushim) was 1.5% increase from May 2010 when it was 1.3% decrease from Ma 2010 for nationwide. Similarly, it was 10.9% increase for convenience stores in six Tohoku prefectures when it was 7.3% increase for nationwide.
This partly attributes to the fact that large franchise retailers have been investing to cover up for the local shops that went out of business immediately after the disaster.
Consumer electronics mass merchandisers and others follow the very similar trend as well.
2. How are retailers aggressively opening new shops in Tohoku?
1) Convenience Stores
Mini Stop (under the umbrella of Aeon, the leading supermarket in Japan), is to open 100 new shops in Miyagi and Fukushima in three years starting 2011. This is three times more new shops to be opened from the original plan made before the outbreak of the disaster. The locations of the new shops are concentrated in such cities as Imaki in Miyagi and coastal areas of Sendai where the recovery and rebuilt of the area is needed the most. The company plans to employ victims as contract workers and support relocation and housing.
Family Mart plans to open 85 new stores in Iwate, Miyagi and Fukushima including temporary ones, which is five times that of the original plan made before the disaster outbreak.
Seven Eleven Japan and Lawson have not changed their plan of new store opening but they are to proactively open temporal stores in the devastated area according the local needs.
2) Others
K’s Holdings, a consumer electronics mass merchandiser, say that their sales for June in the six Tohoku prefectures were 50% increase from June 2010, when it was 40% increase nationwide. The chairman of the company commented that the recovery consumption is estimated to continue for the next two or three years and therefore the company is to increase the number of new stores to be opened from its original plan of one to four.
Yamada, the consumer electronics mass merchandiser leader in Japan, also plans to open 15 to 20 stores in the six Tohoku prefectures this year.
Tsuruha Holdigs, a leading drug store in Japan, plans to open 34 new stores in 2011. This is 60% increase from the previous year.
3. How retailers plan to meet recovery demand by reviewing their current shops?
Aeon is to invest 12 – 13 billion yen in reforming their current supermarket stores in Tohoku, in addition to their regular reform investment. The company also plans to expand shop floors of housing related products and services and so forth to meet the local needs that are to go through recovery from the disaster.
Itoyokado, supermarket franchise company under the umbrella of Seven and i Holdings, originally planned to close seven stores nationwide in 2012 but revised to close two stores because the recent consumption is strong. The five stores that are now to continue their business seem to include those located in Tohoku. The top executive of the company commented that their plan revision is also to support the recovery of the devastated area.
4. Is it only retailers that are proactively investing in Tohoku?
No, because the recovery consumption is expected to range not only in other sectors as well.
For example, Kohnan, a leader in Do It Yourself (DIY) industry in Japan, is to open new stores specialized BtoB in selling building materials and industrial tools for construction companies operating in Tohoku in order to benefit from increase in construction demand in the area. The company plans to open the first store in October in Sendai City and five or six more stores in Miyagi by the end of this year.
Resources:-
When many factories etc. are being relocated away from Tohoku and eastern Japan, retailers are proactively investing in Tohoku, especially in the devastated area, in order to benefit from recovery consumption from the disaster and also to support the recovery and reconstruction of the devastated area. The recovery consumption is likely to be not limited to retailers (products and services related to everyday lives of people) but also to other sectors such as BtoB of construction related industries.
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