V-shaped recovery Q&A with equities analyst Ryoji Musha Home healthcare Speaking to the government with one voice Energy unlimited Geothermal energy advocates turn up the heat No substitutes allowed Protection sought for European speciality foods
Painless cuts Pierre Lasry Lowendalmasa誰
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2012
THE MAGAZINE OF THE EUROPEAN BUSINESS COUNCIL IN JAPAN / THE EUROPEAN (EU) CHAMBER OF COMMERCE IN JAPAN
Rewards Price Match
Rewards Price Match
Deals
Deals
18 8 Home healthcare Industry group speaks to government with one voice By David C Hulme
18 Energy unlimited Geothermal energy advocates turn up the heat By Alena Eckelmann
24 No substitutes allowed Protection sought for European speciality foods By Tim Kelly
2
November 2012
3344 2646 Cover photograph Benjamin Parks
COLUMNS 7 From the Editor
28 In Committee
43 Upcoming Events
12 Q&A
Japan’s market for animal health products badly needs a pick-me-up. By Geoff Botting.
Henry Scott-Stokes talks to equities analyst Ryoji Musha, president of Musha Research.
Events for the European business community in Japan.
31 Green Biz
44 EBC Personality
With a little artificial fizz, Tohoku oysters make a rapid comeback. By Ginger Vaughn.
Taiko Nakazato lives in two worlds – both of them rich and intriguing. By David C Hulme.
17 Executive Notes Dan Slater gives Japan’s economic joker a pat on the back.
33 Event Report
22 EBC committee schedule
Up close and personal with cars and drivers at Fuji Speedway. By David C Hulme.
23 Chamber Voice
34 Culture Shock
Fabrice Tilot, president, The BelgianLuxembourg Chamber of Commerce in Japan. By David C Hulme.
Rosie Slater gets pushed to the limit in the riot police aikido course. By David C Hulme.
26 Investing in Japan Cost-cutting the Lowendalmasaï way preserves key profit drivers. By Gavin Blair.
42 Shop Window
46 Lens Flair David C Hulme visits wasabi farmers high in the Okutama area’s mountain gullies.
48 Work Place Doctors of the World reaches out to the homeless in Ikebukuro.
At last, real competition in food pricing. By Roy Larke.
The Mission of the European Business Council To promote an impediment-free environment for European business in Japan. November 2012
3
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The European (EU) Chamber of Commerce in Japan
Editor-in-chief David C Hulme
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Published by Paradigm 6F West Park Osaki, 3-6-28 Osaki, Shinagawa-ku, Tokyo 141-0032 Tel: 03-5719-4660 Fax: 03-349-1202 www.paradigm.co.jp Published monthly in Tokyo. All rights reserved. The views and opinions expressed herein (other than editorials by the EBC ) are solely the opinions and views of their authors. The EBC is not responsible or liable for any portions thereof.
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Big in Japan: Fake plastic leaves
Contributors This collection includes outstanding Tribal, Village and Master Workshop items from Persia, India, Pakistan, Turkmenistan, Belouchistan, Afghanistan, etc. Wool, pure silk & silk interknot,
Alena Eckelmann delves into geothermal energy, page 18
Contemporary, Antique, Semi-Antique, precious and collectable items from Qum, Esfahan, Nain, Kashan, Agra, Srinagar. The Bailee instructs 100% clearance to finalise a protracted settlement. Each lot to go under the hammer and sold piece by piece to the highest bidder for immediate realisation.
NO PRE-SET RESERVES - ALL LOTS OFFERED AT THE SOLE DISCRETION OF THE SPECIALIST AUCTIONEER CERTIFICATES OF AUTHENTICITY & CURRENT FAIR RETAIL VALUATIONS AUCTION TO BE CONDUCTED IN JAPANESE YEN. HOWEVER, OTHER CURRENCIES ACCEPTABLE BY ARRANGEMENT.
Alena underwent business training in Tokyo on the Executive Training Program (ETP), then began to write about business, culture, travel and people in Japan. A researcher
Gavin has been writing about Japan for about a decade and currently contributes articles to magazines, websites and newspapers in Asia, Europe and the United States on a wide range of topics, from business and politics to culture and entertainment. “It was good to hear about a management consultancy that specialised in costcutting, but was focussed on everything but making people redundant. When some companies appear hell-bent on axeing personnel even when times are good and
CASH – CHEQUES – MAJOR CREDIT CARDS For further information:
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Ginger Vaughn visits the fizzing Tohoku oyster beds, page 31
Asran Rugs 2-11-8 #9F, Shiroganedai, Minato-ku, Tokyo Tel: 03 5447 2047
Ginger Vaughn is a freelance writer and TV reporter with a deep interest in environmental issues, eco-tourism and mountaineering. She is the first foreign woman to summit all of the 100 peaks of Japan, known as
at heart and by profession, she enjoys onthe-ground investigation and observation. She contributes articles to magazines and websites in Japan and in Europe. “Small-scale hot-spring power generation projects seem a perfect way to utilise Japan’s existing geothermal power potential in the short term, provided that local authorities and the public cooperate. A number of 50kW projects are already in the process of installation. They could serve as model for the country’s 28,000 hot springs.”
Gavin Blair meets the genius behind Lowendalmasaï, page 26
profits are growing, it was refreshing to see the opposite approach being recommended, especially in these challenging days.”
the “Hyakumeizan”. She spends her time researching the use of social media to raise public awareness about global environmental issues. Ginger is co-host of NHK World’s Green Style Japan and is an environmental blogger for the Eco Channel. “When oyster farmer Mr Shida cracked open a plump, juicy, fresh oyster, I figured it would be rude to decline and hoped that I had outgrown my oyster allergy. I was ill for five days and nearly had to be hospitalised. Looking at the photos now brings back interesting memories.”
leisure and relaxation at PaciďŹ c Islands Club Saipan
www.picresorts.com +1 670 234-7976 reservations@picsaipan.com
industry voice | Pharma Recruitment
Leading from afar The International Executive Search Federation (IESF) held
"When we work as a team, but rarely see each other, it becomes harder, not easier"
its global meeting in September, in Milan, Italy. One of the keynote speakers was Peter Hägglund, an expert in leadership, governance and organisational behaviour. Peter described the ways in which leadership has taken on a new dimension in the 21st century, explaining that an organisation’s teams –
Philip Carrigan Founder and Representative Director, Morunda K.K.
and managers – are just as likely to be on another continent as they are in a cubicle in the same office. We are connected virtually, as well as updated by social media. According to research that Peter’s team has collated, today’s leaders are frustrated at times with the complexities
weekend, are good ways to stay connected. Trust is increased
of distance leadership, such as cultural differences,
when people know that their boss, their employees, or their
communication barriers (not being able to pick up on subtle
colleagues know and care about the whole person – not just
body language cues, etc.) and complicated technology. Leaders
the job they do.
and managers no longer have the convenience of being able
Look for ways to make deposits in the “trust bank”. In
to “pop in” and have informal meetings with their colleagues
challenging times, people are more likely to be open and
and employees, or just make casual conversation with people
honest. Use the phone as often as possible; email is passive, but the
about their families. As a result, there has been an increase in
phone is active. Leave messages using voice mail. Emails can
work-related stress. On a virtual team, it is almost as if some of the traditional,
be easily misunderstood; we are all guilty of confirmation bias,
strong characteristics of leadership are being minimised, while
which is a tendency to favour information that confirms pre-
the weaknesses are magnified. The qualities of a leader with
existing beliefs or hypotheses.
great verbal communication skills may diminish in a virtual
In a traditional office situation, we quickly learn that one
world. As advanced as technology has become, there is no
person is a football nut, while another has kids, and yet
substitute for live, person-to-person communication. A weak
another enjoys the arts. We naturally learn this from observing
leader’s skill may also be magnified. After all, it is much easier
people’s desks, overhearing their conversations, or catching
to ignore an email or be evasive in the virtual world.
up at the water cooler.
One-on-one communication makes a significant difference.
A little information can go a long way. One of the conference
Having coffee, brainstorming together and sharing what’s
participants reported she always finds out the scores of her
going on in our lives are important factors in developing
boss’ football team, even though she has little interest in the
teamwork. When we work as a team, but rarely see each other,
sport. Virtual leadership has become commonplace. However,
it becomes harder, not easier.
it requires a different set of skills and techniques to those needed for leading a team that sits down the corridor.
More IESF conference tips Immediate availability not only is important for fast, effective communication and getting work done quickly, but it also
Morunda is Japan’s representative of IESF and one of the
provides social interaction. Informal catch-ups help us to feel
leading pharmaceutical search companies in Asia. IESF is
like part of a team – and a part of each other’s lives. In the
the largest retained executive search group in the world,
virtual world, we need to find new ways to achieve this. Instant
identifying talent and leadership in 130 offices and 40
messaging, texting or quick phone calls, just to ask about the
countries globally.
Isshin Building 7F 2-11-7 Yaesu, Chuo-ku Tokyo 104-0028 Tel : +81-3-4520-5590
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F rom the E ditor
Tell me a story I don’t mind telling people that I am just a sucker for a good story. Show me a unique corporate profile, a newsworthy fact or an analysis of an important issue, and I will pick the cracking yarn every time – the one that is really about people. EURObiZ Japan represents the advocacy position of the EBC, but that position is formulated and driven by individuals and groups with very personal concerns and particular cultural or business backgrounds. This magazine is mostly about people for a very good reason, which is illustrated by our story this month on home healthcare (page 8). The importance of the issue for millions of Japanese, for the Japanese economy, and for the healthcare industry, is immeasurable. However, we have the story because of the belief, energy and passion of a certain individual, Philips Electronics Japan CEO Danny Risberg. Risberg was featured in our
September issue. He loves to tell a story. He is very candid. We all got to know him a little better. We can appreciate to some degree the depth of his passion for healthcare. For many of us, this is a very personal story. In that sense, geothermal energy is less of a hot topic, but it certainly is one that is beginning to ignite debate. Can Japan unravel the web of regulations deployed by the conflicting fragments of its turf-conscious bureaucracy in order to access what appears to be unlimited cheap energy. Alena Eckelmann has worked hard on her guide to the pros and cons on page 18 Where to put your money? Equities analyst Ryoji Musha does the brainwork and the grunt work and, in a Q&A with veteran financial reporter Henry ScottStokes (page 12), makes a forceful case for Japanese equities. To return to the personalities in these
pages, this month you can meet two really extraordinary women. Rosie Slater (Culture Shock, page 34) has set aside a successful career to take on one of the toughest challenges in martial arts. Her story will have you pondering on what you think are your limitations. Then, our EBC personality (page 44) is Taiko Nakazato of the Swedish Chamber of Commerce and Industry in Japan. Nakazato’s personal story is as impressive as her contribution. This community that we call the EBC is crammed with great stories about technologies and businesses, as well as about the people behind them. I do love a good yarn. David C Hulme Editor-in-Chief
hulme@paradigm.co.jp
Home
healthcare Industry group speaks to government with one voice Text David c hulme
T
he Japanese medical system was set up for acute care. That’s when the patient is injured or gets sick, the hospital fixes them up and sends them home. But now the burden is chronic care, where you are helping the patient but not curing them,” says Philips Electronics Japan CEO Danny Risberg. He is explaining the urgency, and the difficulty, of developing home healthcare in Japan.
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November 2012
The Japanese government is already responding to the pressures of burgeoning medical costs, bulging hospitals and an ageing population, in ways that triggered alarms for Risberg. “I was very concerned that policies were being formulated for hospitals that did not cover home care – and that we might be left with policies that seriously impede the development of home care.” Thus was born an ambitious study group that involves the EBC Medical
Equipment Committee (which Risberg chairs), the American Medical Devices and Diagnostics Manufacturers’ Association (AMDD), and The Japan Federation of Medical Devices Associations (JFMDA). The study group, headed by Koji Tomimori, general manager of Teijin Pharma’s home healthcare sales planning department, is called the Japan Industry Forum on Home Care Innovation.
F ocus
For a child to spend 10 years in a hospital, instead of at home, is really something to think about
“Everyone was very keen to get involved once we started talking about it,” says Risberg, whose career has been built around home healthcare and who will talk passionately about the topic at the drop of a hat. “It is better to speak to the government with one voice on healthcare,” says Tomimori, noting that the group had its first formal meeting on 25 July, after first having been mooted just half a year earlier. “We were having a casual discussion with Danny at a New Year’s party in January, about the fact that there was no industry group focusing on home healthcare,” recalls Eriko Asai, general manager of government affairs and policy for GE Healthcare Japan, who also chairs the AMDD Capital Equipment Committee. It will not be easy for such a diverse group to distil a coherent message on such a potentially vast topic. “Working together like this is a new challenge,” admits Izumi Hamada, who is director of professional and public affairs for Philips Electronics Japan and secretary-general of the EBC Medical Equipment Committee. The prime beneficiaries of home healthcare are patients – such as the elderly, people with degenerative conditions, those with impaired lung capacity, and people undergoing cardiac rehabilitation. Risberg points to patients suffering from neuromuscular disease, many being bedridden, in wheelchairs or on a ventilator. “Unfortunately, many of the victims of this kind of condition are children,”
Danny Risberg, Philips Electronics
he says. “For a child to spend 10 years in a hospital, instead of at home, is really something to think about.” Many such patients have home care already, he notes. However, there is much more to be done, not only with regard to equipment, technology and the priorities of the medical profession, but also the legal framework. “One big issue concerns who is really responsible [for the patient under home care],” says Risberg. “In Japan, when someone dies at home, the police are supposed to investigate. If the patient was on a ventilator, the police want to know how they died, and who is responsible for it. Is it the hospital? The maker of the equipment? The caregiver? The physician? There is a large grey area that needs to be worked out, and there is no simple answer.” The manufacture, importation and sale of drugs and medical devices come under Japan’s Pharmaceutical Affairs Law, which currently makes no distinction between medical devices used in hospitals and those used in the home. With technologies rapidly emerging to allow remote monitoring of patients’ vital signs and other information, another major issue concerns responsibility for data, how the information is transmitted and safeguarded, and who has access. One of the first acts of the new study group was to feel out the Ministry of Health, Labour and Welfare. The response was encouraging. “The idea was very well received. The government wants an industry
counterpart on this topic,” says Asai of the AMDD. “Usually two or three officials will come to a briefing. This time, even at short notice, there were about 15 officials in the same room to hear about this initiative.” Hospitals also stand to benefit. “Hospitals understand it and, at the highest level, they want it,” says Risberg. “We have talked to a lot of people and they are asking the right questions. We want some of them to come and explain [to the forum] what they think works and what doesn’t work, and what they expect from home healthcare.” Again, there is no easy answer, he adds. “It involves discharge planning, home nursing, home practitioners, pharmaceuticals delivery . . . what the hospital needs to do is huge.” “There are 16 types of home healthcare approved under National Health Insurance,” says Teijin’s Tomimori. “For example, about 100,000 people [in Japan] with insufficient lung function use an oxygen concentrator [taking in air and increasing the oxygen content of the gas from 21% to 90%]. Then there are ventilators, home dialysis systems, infusion therapy, CPAP [continuous positive airway pressure] therapy for sleep apnea, and the self-administering of insulin for diabetes.” In many of these categories, patient groups have formed for mutual support, to conduct research, and to communicate their needs to industry and the government. The Japan Industry Forum on Home Care Innovation plans to collect information from such groups, some of which are large and very proactive. The
November 2012
9
Run for the Cure Walk for Life
®
Saturday, December 1, 2012 5K run, 10K run & 5K walk Time
9:00 a.m. – 2:00 p.m. Sign-up & Entertainment
Hibiya Park, Fountain Area
Fee
Adult: ¥5,000 6-11 year olds: ¥2,500 5 year olds and under: FREE
Course
Around the Imperial Palace
Register now at
www.runforthecure.org Organized by the 2012 Run for the Cure ®/Walk for Life Committee
Alfie Goodrich
FOCUS
Koji Tomimori, Teijin Pharma
group will also gather data from abroad, knowing already that there are some stark differences. “Wound care is already a big home healthcare category in the US, but not at all in Japan, because patients here stay longer in hospital,” notes Tomimori. This may not change anytime soon, but Risberg sees categories that do represent significant opportunity, such as at-home cardiology. “People with cardiovascular disease need care and therapy. Does their rehabilitation have to be in the hospital? If they are at home, can they be monitored effectively?” The questions indicate changes that must happen, in Risberg’s view. When a cardiac patient is discharged, for example, medical dosage is established according to the results of a blood-coagulation test, which in Japan can only be done at the hospital. “Everywhere else it is done at home,” says Risberg. “It is against the rules in Japan because 30 years ago it was defined as a hospital procedure. So patients are travelling to the hospital just to have the test.” Similar issues attach to cancer treatment. “Right now, a person on chemo goes to the hospital and has a blood test, and if the white-cell count is too low they are sent home. Why can’t they do that test at home?” says Risberg. Many of the tests routinely done at hospitals
Eriko Asai, GE Healthcare Japan
could be done at home, he adds, and the information collected could certainly be managed online. “Elderly people often record their weight and blood pressure, but nobody sees the information. If you could trend that information, put it together with their activities, and present it to them in a way that means something to them, then they could be more motivated and manage their own conditions much better,” he says. “Telemedicine is a very important issue,” agrees Tomimori, when patients are separated from their doctors. “There are some systems, but they are not fully developed, and not covered by insurance. When those systems develop, they have to be covered by the Pharmaceutical Affairs Law.” Asai notes that many health-industry players have been working on telemedicine for a long time, but that development until recently has been slow. “After 3/11, public demand for these solutions has increased, so government and industry action has accelerated,” she says. Much will have to change for home healthcare to fulfill its promise. Risberg notes the cultural mindset that “if you are sick you should stay home”. Also, most homes are not welldesigned for people in wheelchairs or on crutches, and too many elderly people still have to regularly negotiate steep staircases.
Izumi Hamada, Philips Electronics Japan
Japan will have to find an army of volunteers from somewhere, plus an expanded system of respite centres. Home visits by therapists and psychiatrists come into the picture. “Part of our activity will be to raise awareness of the potential of home healthcare among both the general public and the medical profession,” says Tomimori. “The more you think about it, the bigger it gets,” says Risberg. “But we have to see the big picture, otherwise changes will happen that are not what society needs, or what the patient needs or can afford, or what the hospitals can sustain. It is very important now to be as holistic as possible.” However, it is also important to keep the task manageable, he adds. “At the beginning, in the first six months, we are only tackling the medical equipment side of it, because the government already has a reimbursement system for it, and it is very tangible to everyone.” He hopes to be able to offer some guidance to industry as well as government, “by the end of this calendar year,” on how to allow home care to expand. “Realistically, it is a daunting task,” Risberg admits, “but we have to be proactive now, because changes are happening now anyway. If we wait, in 10 years it will be very difficult to improve.”
November 2012
11
V-shaped
recovery Henry Scott-Stokes talks to Ryoji Musha, president of Musha Research Photo BENJAMIN PARKs
12
November 2012
Q&A
Despite problems elsewhere, no country in the world has more potential for demand creation than Japan. In Europe and the United States, growth is restricted by non-performing loans and inadequate bank capital. Japan is free of these stifling burdens says renowned equity strategist, Ryoji Musha. What must Japan do to overcome deflationary pressure from China? In response to rising global deflationary forces from China, industrialised countries must enact reflationary policies. With interest rates at all-time lows in the US, Germany and Japan, these countries can enact demand-creation policies that utilise excess capital. Among these three countries, the US has the strongest commitment to creating demand. Stock prices are high as a result. In Europe as well, deflationary pressure from financial rebuilding measures peaked in 2012, and the European Central Bank’s outright monetary transactions [OMTs] will probably function adequately as a safety net. With its extremely undervalued assets, Japan has the potential to generate huge capital gains if a correction in asset prices occurs. Japanese stocks have an average PBR of 0.9. If this multiple rises to the global average of 1.7, stock prices will almost double and stock market capitalisation will increase by more than ¥200 trillion. This rally would probably end deflation by bringing about a resumption of risk-taking and interest-rate arbitrage in Japan’s financial markets. Now is precisely when Japan needs to enact financial policies for weakening the yen, boosting stock prices and increasing investments in real estate and other assets. Japan should use demand creation to make a contribution to the global economy. Have the world’s central banks evolved to these challenges? In the wake of the Lehman Shock [2008], non-traditional financial policies and quantitative easing have become the norm. There are two reasons for this. One, during a financial crisis, central banks have become the buyer of last resort instead of the lender of last resort; and two, in the past, bank loans were the primary channel for supplying liquidity. Today, buying power
can be created by raising market prices, which equates to a reduction in the risk premium. Pessimists believe it is a sign of decadence. But optimists, like me, regard this as the evolution of central banks and believe that prospects for the success of current policies are excellent. I believe that the role of central banks is shifting. This involves a change in what stands behind the currency that these banks issue. The shift in assets from gold to government bonds, and then from government bonds to marketable securities is very significant. As in the past, the system is changing because the markets demand a change. Marketable securities are the first form of economic value to appear in the assets of central banks. These securities represent the present value of future cash flows that can be predicted with reliability. In this sense, we can say that securities have a more solid backing than gold and government bonds. The mechanism of issuing money backed by marketable securities is just now emerging. Here, the US Federal Reserve may have started to implement economic policies that look ahead to the next generation. What must be done to address the overly large gap between the yen’s exchange rate and its actual value? As a result of that gap, some manufacturers in Japan have lost their competitive edge. Also, the allocation of resources in Japan has become distorted and unfair. The Bank of Japan’s [BOJ’s] quantitative easing measures will be decisive. Now is the time for Japan to take control of its currency. This is why the BOJ should increase base money by implementing a significant monetary easing programme while allowing its balance sheet to grow. Central banks worldwide are
beginning to shift their focus from manipulating interest rates to enacting quantitative easing. The BOJ should be at the forefront of this trend. Ending the yen’s deflation-backed strength and pushing up prices of assets will add significant purchasing power to Japan’s domestic demand. Will Japan learn from its loss of leadership in key industries, such as semiconductors? Once a country loses industrial clusters, regaining them is impossible. The central cause of this crisis is improper financial and economic policies that resulted in an extremely strong yen, deflation and other problems. The BOJ and Japanese government must take responsibility for the collapse of industrial clusters in Japan. The nation’s full-set industrial structure has long been a key strength and defining characteristic. From the mid1980s to about 2000, Japan’s industries were far ahead of those of other countries, enabling Japan to consistently maintain very large trade surpluses. This era has come to an end. There are two major causes of Japan’s decline. First are the macroeconomic problems. The other cause is cronyism, which prevents Japanese companies from competing based on the global standard. Resources are not channelled to young and energetic business sectors. As a result there is no change in Japan’s practice of allowing giant, old trees to block the growth of sprouting trees. Why would a reversion to a weaker yen probably spell the end of Japan’s “lost 20 years”? A decline in the yen will make wages in Japan comparatively low, thereby creating room for wage hikes. This explains why a weaker yen would have the additional benefit of triggering a November 2012
13
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Q&A Figure 1: Unprecedented level – Japan’s stock return/bond return
Source: Bloomberg, nikkei needs, musha research
Figure 2: US stock return/bond return
The shift in assets from gold to government bonds, and then from government bonds to marketable securities is very significant Source: Bloomberg, wright Investors’ service, musha research note: annual data prior to 1993
V-shaped earnings recovery at Japan’s multinational companies. If suitable reflationary measures return wages and asset prices to levels that reflect intrinsic value, we will see increases in wages and stock prices. Japanese stocks are obviously undervalued after having dropped by two-thirds over the past 20 years. This translates into an annual decline of 5%, so investors have been buying stocks at prices that factor in this 5% downturn. Higher stock prices will be the start of a virtuous economic cycle. If the BOJ learns a lesson from the Fed and establishes a floor for stock prices by increasing asset purchases, investors will rush to buy Japanese stocks so they can capture the 5% extra return. Real estate prices will benefit from the same investor sentiment. If Japan enacts full-scale reflationary measures, we are very likely to see a shift from asset deflation to asset inflation. With problems in the US, China, Europe and resource-producing countries, could Japan become the starting point for risk-taking? I believe there are several important
reasons to expect a rally in Japanese stocks, other than merely a correction from a decline that went too far. A reevaluation of Japan’s political power is the first reason. A consumption tax hike was approved by the Lower House with the support of the ruling and opposition parties. Reforming taxes and the social security system at once will probably focus investor’s attention on the resurgence of Japan’s ability to enact political initiatives. Second is the renewed respect that Japanese companies are receiving for several reasons. They have expanded globally with the strong yen; they remain strong in hightech niche categories that have not become commodities; they have an overwhelming competitive edge in terms of quality; and, despite adversity, they have managed a steep earnings recovery. The most important reason is the undervaluation of Japanese stocks, which has reached an unprecedented level [see Figures 1 and 2]. Interest rates have fallen too far in the US, Germany, the UK and other major countries. Confidence that the risk of a depression has ended and
sustained economic growth has started will reverse the “flight to quality”. The start of this reversal will signal the beginning of a massive movement of capital. The long uptrend in bond prices is probably over. If indeed this “age of bonds” has come to an end, the “age of stocks” will be next. In other words, many companies are issuing bonds to raise funds, and then using the proceeds to buy back their own stock. This explains why some people are saying that a bull market is about to begin in Japan. I am in fundamental agreement with this view. Japan’s weighting of stock investments, which is very small, is likely to be a major contributing factor to an improvement in the supplydemand dynamics for Japanese stocks. The prolonged strength of the yen appears to be nearing its end. Investors around the world have started to closely watch Japanese stocks and investors for signs of change. Japan is one of the few remaining virgin territories among the world’s financial markets. This is why I strongly recommend that, when investors decide to resume risk-taking, they should start by purchasing Japanese stocks. November 2012
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EXE C UTI V E N OTE S
The joker Why the Japanese economy still outperforms Doom and gloom! But it’s not that bad – honest. 2008 redux? That’s the sense I’m getting from Economist Corporate Network (ECN) members these days. But it’s not so much the real performance of the Japanese economy that is the issue. Rather, it’s the sense of powerlessness as things play out in distant markets (China, Europe and the US). And it’s the way global HQ immediately squeezes investments in Japan as an easy way to cut costs globally. This is because there is apparently little bandwith at HQ to recognise when Japan is outperforming – as it is, in fact. I also get the strong sense from members about the waning power of the Japan country manager – a problem obviously linked to the decreasing influence of Japan as a market. Said one country manager: “I don’t really get consulted much about strategy. Japan HQ tells me what it is, and although I can try to tweak it, it’s pretty much a top-down process.” So it is really a paradox: Plenty of gloom to go around, but the situation on the ground is not as bad as it feels. I can provide a very good example of this paradox. One ECN member grew his top line 40% last year. But this was not appreciated at the company’s London group HQ. Asia is far from the UK, and Japan is treated as if it were far from Asia – in a (low) class of its own. So the member was included in across-theboard cost-reduction strategies, rather than being rewarded with more investment. One hears these stories quite frequently. Similarly, one foreign airline country manager told me that expat business
travel had collapsed, although Japanese business travel was holding firm. But the slowing expat traffic out of Japan is the response to global concerns, not to concerns about Japan. Turning to the Japanese economy, the good news is that it is still holding up. Because the out-performance in the first quarter was so great (more than 5% on an annualised basis over last year),
80% of the economy barely moves. But when it does, the effect can be enormous we could still squeeze out 2% annual growth in 2012. That would put us close to the top of the class as regards the “rich economies”. That’s the good news. Unfortunately, analysts are scrambling to revise their forecasts downwards. Nobody really expected China to slow quite so fast as it has. On top of that, there are the anti-Japanese riots in China. When leaders like Toyota talk about monthly car production plunging by 50%, it’s easy to get anxious. But bear in mind that a capital machinery CEO (Japanese) told me that his China plant was left intact by the recent turmoil. The police came and told the Japanese expats to go home, but there was no damage to property or staff. In other words, most likely, thousands of lesser-known
Japanese companies were left completely unscathed. Another bright spot is renewable energy. One lawyer told me that the only deals coming into Japan are foreign investments in the renewable energy sector – a direct result of the new feed-in tariffs launched by the Japanese government. The focus on renewable energy is a reminder of the importance of Japan’s domestic economy. Usually, there is little growth – but the Tohoku disaster is the ‘joker in the pack’. In theory, rebuilding ought to provide a steady push to GDP growth. In practice, it’s different. The region is so ruined that there is a lack of capacity. Although money is plentiful, outside firms have not flocked to the area, which slows down rebuilding. My guess is, however, that growth from this region will be similar to pouring ketchup: it will come in spurts, not in a regular flow. That means that quarterly GDP growth could be volatile, but overall Tohoku should provide a strong impetus. This is more important than it sounds: most GDP growth comes from Japan’s export sector, even though exports are less than 20% of the economy. In effect, 80% of the economy barely moves. But when it does, the effect can be enormous – easily enough to outweigh the downturn in exports. Bottom line: We Westerners in Japan may feel anxious, but things are not that bad. Honest. Dan Slater Director of the Economist Corporate Network in Tokyo
November 2012
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Energy unlimited Japan prepares to tap geothermal energy Text ALENA ECKELMANN
18
November 2012
F ocus
Geothermal energy has a capacity utilisation ratio of almost 100%, compared to just 25% for solar and 30% for wind power Frenk Withoos, ABB
H
ot spring bathing is a favourite pastime in Japan, but the waters of the nation’s 28,000 onsen is just the tip of the hot rock. Deep underground lie massive potential sources of geothermal power to enhance Japan’s renewable-energy mix. Worldwide, the total installed capacity of geothermal plants has been increasing rapidly in recent decades, from 2,110 MW in 1980 to 10,715 MW in 2010. Japan has been left behind, despite having the world’s thirdlargest estimated potential for geothermal energy (some 23.5 GW), after Indonesia and the United States. However, development has stagnated, with installed capacity hovering around 500 MW for the past decade. “The fundamental problem is that there is no dedicated law to support geothermal energy development, such as a mining law, although there are several laws to regulate development, including the National Parks Law and Hot Spring Act,” says Haruya Nakata, president of Geothermal Energy Research & Development (GERD). There are currently 18 sites for geothermal power generation in Japan, located mainly in the northeast Tohoku region and on the southern island of Kyushu, and they account for just 0.3% of the total national electricity output. Only five of the 18 plants can be considered large-scale, at a capacity of 50 MW or more. By comparison, Japan’s 50 nuclear reactors have an average capacity of 1,000 MW, and had been used to generate around 30% of the nation’s electricity. “In the past, Japan’s decision makers preferred power volume over the best energy mix,” laments Hirofumi Muraoka, professor and vice-director at the North Japan Research Institute for Sustainable Energy (NJRISE) at Hirosaki University, Aomori prefecture. There is good reason for recent government moves to put geothermal energy back into Japan’s alternative-energy mix. “Being independent from weather conditions, geothermal energy has a capacity utilisation ratio of almost 100%,
compared to an average of just 25% for solar and 30% for wind power,” explains Frenk Withoos, vice-president in charge of ABB’s power products and power systems division in Japan. “It is a reliable energy source that can be utilised as baseload – 24/7, year-round. There is also near-zero CO2 emission in the generation process.” The energy crisis triggered by the 3/11 quake and tsunami, and subsequent Fukushima Daiichi nuclear power plant disaster, may have pushed geothermal energy as an option, but there is a long way to go before this becomes a reality. This past March, the Japanese government eased regulations on geothermal energy development inside national parks, beneath which 79% of the nation’s potential geothermal resources are located. New allowances include diagonal drilling starting outside, then entering the boundaries of parks classified as Special Protection Zones, as well as vertical drilling in parks that are Class Two or Class Three Protection Zones. Even so, resistance does not simply melt away. Nakata of GERD notes objections being raised by lobbyists of the Hot Spring Union and environmental concerns voiced by local authorities. Some of the regulations cited that prolong the development time for geothermal projects by up to 10 years are the National Parks Law, Hot Spring Act, Forest Law, and Environmental Impact Assessment Law. “This is not acceptable. We need to mitigate these regulations,” argues Nakata. Feed-in tariffs, in force since 1 July, require utilities to purchase electricity generated from renewable-energy sources at a premium rate and for a set period of time. The price per kWh from geothermal power plants with a capacity of up to 15 MW is ¥42, and from plants of higher capacity, over a period of 15 years, ¥27.30. “The price is splendid, but considering the long lead-time for developing geothermal resources, there will be no return for developers in the short term,” says Muraoka of NJRISE. This makes investment in geothermal energy an entirely different proposition to investment in other renewables. November 2012
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reads
FOCUS
International comparison of geothermal resource volume
Country
Number of active volcanos
Geothermal resource volume (MWe)
Indonesia
150
27,791
USA
133
23,000
Japan
100
23,476
Philippines
53
6,000
Mexico
35
6,000
Iceland
33
5,800
New Zealand
19
3,650
Italy
14
3,267
Geothermal power plant
Turbine
Generator
Steam Cooling Tower Hot water
Injection well
“Geothermal Development”, METI, 26 March 2012
“Geothermal should not be considered in the same framework as solar and wind power,” Withoos explains. “While the potential is the best, the time and cost for development is the worst. Now, feed-in tariffs are reviewed every year, but for geothermal there should be a long-term view.” Leading Japanese turbine manufacturers – Mitsubishi Heavy Industries, Toshiba and Fuji Electric – currently account for a 75% share of the world’s capacity for steam-power plants, according to GERD. During the past decade, they have concentrated on exports since there is a dearth of projects in Japan. Prompted by the recent positive policy changes, they are returning to their home turf, albeit rather reluctantly. In September, the central government approved an R&D budget for geothermal exploration and development, and a geothermal department was established at Japan Oil, Gas and Metals National Corporation (JOGMEC), a government agency. JOGMEC will investigate promising geothermal sites, help potential investors by partially covering surveying costs, and provide funds to construct geothermal plants, according to some news reports. Japan’s 10 regional utility companies each have their own power grid, and so far there is no incentive for them to invest in access to a grid by geothermal plants in mountainous areas, to increase the capacity of the transmission networks, or to ensure inter-regional compatibility. “The improvement of grid infrastructure involves a high cost. The Japanese government should encourage investment by public utilities and make the transmission grid a national asset,” argues Muraoka of NJRISE. In 1995, Japan recorded the world’s highest down-hole temperature, over 500°C, 3.7km below the surface at Kakkonda in Iwate prefecture. “At a depth of more than 3km, the temperature is higher than 150°C, ensuring a high resource potential,” notes Muraoka. “The only barrier to deep drilling is the high cost.” Public acceptance is very important for any new development in Japan, but so far, consumers are not very familiar with geothermal energy.
“We need dissemination of information and promotional campaigns by the government, similar to those that introduced the benefits of solar and wind power to consumers,” says Muraoka. An ideal angle for such a campaign, he adds, might be “hot spring power generation”. This is geothermal power generation on a small scale (50-100kW) from high temperature hot springs using binary cycle technology. “You can bathe in and generate power from the same hot spring. People who enjoy hot spring bathing might look at hot spring power generation favourably, but it requires some education,” he says. A number of hot spring power systems have recently been put on the market by Japanese firms, including Fuji Electric, Kawasaki Heavy Industries, Kobe Steel and Ulvac-Riko. GERD’s Nakata points out that there are many opportunities for direct use of geothermal energy. Geothermal heat pumps (GHPs) can be used for heating or cooling buildings, ranging from residential houses to public facilities, office blocks and hotels. This market is still very small in Japan, though. In Iceland, by contrast, 87% of all heating and hot water requirements are already met by geothermal heat. Nakata suggests that European firms gain access to the Japanese power-generation market by first providing consultant work for the geothermal power industry. ABB already has a long history of working with Japan’s three leading turbine manufacturers on overseas geothermal projects. “We can bring to Japan everything surrounding turbines and steam engines in terms of controls and electrical equipment, to make a geothermal project and connect to the transmission grid efficiently. Such products are much more expensive here than internationally,” says Withoos. “We see opportunities to enter the Japanese geothermal market through our established business connections, but this will be in the long term. There are still too many unknowns to make geothermal energy the [thriving] business that it should be in Japan. November 2012
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committee schedule
Upcoming meetings R Animal Health
R Food
R Tax
7 December, Friday, 10:00-, off-site
5 December, Wednesday, 09:00-, EBC
14 December, Friday, 12:30-, EBC
R Asset Management
R Legal Services
22 November, Thursday, 12:00 noon-, EBC
15 November, Thursday, 18:30-, off-site
R Telecommunications Carriers Telecommunications Equipment
R Construction
R Materials
12 November, Monday, 17:00-, EBC
19 November, Monday, 17:30, EBC
R Environmental Technology
R Medical Equipment
12 December, Wednesday, 08:30-, EBC
22 November, Thursday, 14:00-, off-site
13 December, Thursday, 10:00-, EBC
Committee meeting dates are subject to change. Please contact the EBC secretariat for confirmation. Tel: 03-3263-6222. E-mail: ebc@gol.com
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C hamber voice
Fabrice Tilot
President, The Belgian-Luxembourg Chamber of Commerce in Japan www.blccj.or.jp/
There are not many chamber-related events that can draw 30,000 people. Yet the Belgian Beer Weekend achieved this feat (an attendance record) over five days in September at Tokyo’s Roppongi Hills Arena. The “weekend” started on the 5th of the month, a Wednesday. “This event originates from a very large gathering in Brussels, once a year, to showcase and celebrate our wide diversity of beers,” says Fabrice Tilot, president of The Belgian-Luxembourg Chamber of Commerce in Japan (BLCCJ). The festival is now a fixture in Tokyo, Nagoya and Osaka, with plans to add other cities soon, he says. “We sponsor and participate in the Tokyo event, giving our members the opportunity to display and sell Belgian products,” Tilot adds. Another milestone event for the BLCCJ was the visit in June of a Belgian Economic Mission, one of the largest missions ever from Belgium. The 300 visitors included Belgian Crown Prince Philippe and Princess Mathilde, the deputy prime minister, academic officials and a large business delegation. “Such an event happens once every . . . well, many years!” says Tilot. “So of course we prepared for it and planned very carefully. The chamber organised a breakfast seminar at which eminent speakers addressed the entire mission on the topic: “Japan: Strong Opportunities for Sustainable Growth, NOW!”. “It was a great success, and a good reminder of how important the Japan market remains for European exporters, however fashionable it is to prioritise China,” notes Tilot. The timing of the mission allowed it to be synchronised with the chamber’s eighth bi-annual Young Executive Stay (YES) Programme. “It was very timely indeed, since our Crown Prince gives his patronage to the YES Programme, and could meet the participants in person here,” Tilot remarks. The YES Programme supports
companies in their first try to penetrate the Japanese market. “We select Belgian and Luxembourg small and medium-sized enterprises wishing to approach the Japanese market,” the chamber president explains. “We then help participants to prepare by assigning them a Japanese student who is sent to their European headquarters, then we arrange their stay here and we coach them while they are in Japan.” Tilot feels that a recent board of directors shakeup, along with the appointment of general manager Sophie Bocklandt and an assistant, have brought new energy. “All this new blood blends well with our experienced directors, and there are clear signs of revitalisation. Members feel the enthusiasm, and have been coming in greater numbers to our recent activities,” he says. These are activities such as the monthly Belgian Beer Gathering, and a Pool and BBQ Party in September. Then there is the organisation’s premier social event of the year, the BLCCJ Gala Ball on 13 November at the Conrad Tokyo hotel. “We are indeed strong believers in social networking, which in turn will induce business networking and returns,” notes Tilot. “This probably applies even more to a smaller community such as ours, where it is easy to get to know and be able to help each other.” Scheduled for 17 November is the annual Delighting Customers in Japan seminar, featuring a unique panel of high-profile CEOs sharing their experiences about adapting their products and strategies to the Japanese market. As with all chambers, the BLCCJ feels the effects of 3/11. “Nevertheless, we are stable in terms of numbers, although the ratio of individuals to corporate members has increased,” says Tilot. The BLCCJ, he adds, is “extremely lucky” to enjoy close relations with the
BLCCJ
Text DAVID C HULME
We are indeed strong believers in social networking, which in turn will induce business networking and returns embassies of Luxembourg and Belgium, as well as the three regional offices that Belgium has in Japan. “We are a small, multicultural community, and the door is wide open for anybody wanting to join. Both our embassies are very supportive, and open to our members and their business partners.” He also emphasises the variety of Belgian-Luxembourg exports represented by chamber members. “It’s much more than the traditional chocolates and beer – which are still booming for Belgium, by the way – and Luxembourg’s financial or air-cargo industries. There are also chemicals, pharmaceuticals, electronics, other foods, fashion and more.” The BLCCJ also has many members in the top management of large foreign entities. As for 2013, Tilot wants to keep up the blistering pace of this year, and to see progress towards an EU-Japan free trade agreement. “It is a huge disappointment to see how little has been done over so many years,” he reflects. November 2012
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No substitutes allowed
Protection sought for speciality European foods Text TIM kelly
F
or Athanasios Fragkis, the biggest importer of Greek produce in Japan, there is no room for debate over what counts as feta cheese and what doesn’t. To qualify, he explains that the brined curd cheese must be made from the milk of sheep and goats that have been left to graze in the countryside of the Greek mainland. Fragkis’ strict adherence to centuries of tradition isn’t because of an uncompromising palate, but rather is a definition enshrined in EU labeling rules. A cheese that fails to tick any of the criteria explained by the Greek businessman is not feta, even if it comes from a Greek island not covered by the geographical designation. In that case, it has to appeal to consumers by a different name, and is usually called white cheese. Outside the EU, however, labeling of European food remains a free-for-all. The “feta” sold to Japanese consumers, therefore, usually isn’t feta, coming instead from producers as far afield as Turkey, the United States, Australia and even, according to one European diplomat who asked 24
November 2012
not to be identified, from other parts of Europe. “The price [for an imitation, usually made from cows’ milk] is considerably lower,” explains Fragkis, whose company, Nostimia, has been shipping feta cheese, olive oil, wines and other Greek produce into Japan for more than a decade. Much of what he sells ends up at restaurants, speciality supermarkets and hotels. The unfettered sale of factory-made food masquerading as traditional European delicacies in Japan affects not only Greek farmers, but also their counterparts in France, Spain, Italy and other regions of the EU. In a system begun in 1992, the EU has two main categories guarding producers of cheese, fruit, olives and other agricultural goods. The first, protected designation of origin (PDO), is for products exclusively or significantly determined by environment. The second is protected geographical indication (PGI), with a looser definition that says the product must have characteristics attributable to a region. Companies granted the registration
are allowed to use the PDO or PGI stamp on their products and in marketing. So far, adoption of the geographic designation outside the EU has been limited. If Japan agrees, it will be the first major industrial nation and the only Asian country to do so. Although Japan is sensitive about opening up its agricultural markets, getting an agreement to honour European labeling rules may not be too hard, says Marios Mathioudakis, first secretary in charge of economic and commercial affairs at the Embassy of Greece in Tokyo. “The Japanese are not against geographical indications” he says. Lower tariffs, allowing lower retail prices, will add to the appeal of authentic European produce. “If we could exclude copies, with a good promotion campaign at the European level, we could at least double sales,” says Fragkis. Even without the benefits of a trade agreement, he says his import company is posting annual revenue growth of 25%. Shuichi Sato, a manager in the food section of Japanese importer Nosawa &
F ocus Co., says the adoption of EU PDOs and PGIs will require the education of local traders and producers. The company imports cheese and pasta from Europe. “European produce is selling strongly,” adds Sato. “Consumers are beginning to recognise the health benefits of cheese, and the westernisation of the Japanese diet is also driving growth. Japanese consumers in their 60s have the knowledge and the money to be able to indulge in European food.” Beyond the special Greek cheese, hundreds of European foods and other goods, especially those of the Mediterranean coastal regions, either have been recognised or have registration pending. Italy has 289 products in its basket including Parmigiano-Reggiano (parmesan) and Gorgonzola, which local farmers claim has been made in the region for a millennium. France boasts 252 products. Among its best known is Roquefort, a name that can only be applied to cheeses matured in natural caves (which are infested with a particular mould spore) in a small area of the country. Spain has 199, while feta-proud Greeks claim 107. Further north, Germany lists 108, including liverwurst and fleischwurst. The UK has only 63, the most famous being the half-moon-shaped Cornish pasty, filled with mince and beef chunks,
that Cornish tin miners traditionally carried to work. The Cornish Pasty Association says that it applied for a PGI to “protect the reputation” of the pasty and to “safeguard the future of Cornish pasty-making industry”. With sales growing fast throughout Britain, partly due to interest from supermarket chains, it is natural for imitations to appear. The association also aims to protect secondary stakeholders, such as the Cornwall-based suppliers of potatoes, beef, onions and swede turnips. Cornwall also sends its pasties overseas, and it is conceivable that Japan will be a target market. It could certainly be a while before some other European exporters need to worry about some of their products being copied for the Japanese market. Clas Bystedt, executive director of the Finnish Chamber of Commerce in Japan, points to the example of kalakukko. “It is a hard-baked rye pie – like a big, thick bread – filled with chunks of fatty pork and fish. I guess it would be a shock to the Japanese,” he says. In many cases, PDO and PGI designations for foodstuffs go together with certification as natural or organic. Duco Delgorge, president of Tokyo-based Mie Project, notes that his company imports Pesto Genovese from a company based in Genoa. “Can’t get better than that,” he says. Anyone in Japan can sprinkle parmesan cheese on a pizza, but only the powdered variety churned out by factories. Genuine Parmigiano-Reggiano is a hard cheese made from cows’ milk in Italy, concocted in copper-lined vats and matured for more than a year. Quality controllers grade the cheese by listening to the sound made by tapping it with a hammer. The whey from the process is fed to pigs that become Prosciutto
di Parma (cured ham) another delicacy registered as a PDO. Joining Roquefort on the French PDO list is Camembert de Normandie, one of the first French foods to win protection from would-be copycats. Normandy is the home of the soft cheese that began gracing French tables over 200 years ago. The Spanish lineup of PDOs is also flush with a variety of cheeses, such as hand-molded Queso Casin, and includes products ranging from Estepa cakes and Sobao Apsiego butter sponge to Antequera olive oil.
If we could exclude copies … we could at least double sales Athanasios Fragkis The Greek list is expanded by products such as sun-dried yellow Santorini Fava split peas, Krokos Kozanis red saffron from western Macedonia and handpicked Kalamata olives, named after the city of the same name in southern Greece. In addition to its sausages, Germany has also won protection for other products, including Rheinisches Apfelkraut a preserve made from both apples and pears, and Kolsch beer, a pale lager made in Cologne at only a dozen or so breweries. Copycat produce will not be shoved off Japanese store shelves anytime soon, though, as it could be several years before an EU-Japan trade agreement is signed. Japan’s regional food specialists, however, need not wait. Kobe beef farmers and other producers can already register PDOs or PGIs in the EU system, which is open to foreigners. China already has 10 products either registered or under review, including handmade Longjing roasted tea from Hangzhou, the capital of Zhejiang province on the country’s eastern seaboard. Japanese producers have yet to make their first application. November 2012
25
Painless cuts Lowendalmasaï
Text GAVIN BLAIR Photo Benjamin Parks
M
anagement consultants brought in to advise on cost cutting during periods of economic uncertainty are rarely a welcome sight for employees of the companies they visit. In most cases, it means downsizing, rationalisation or some other euphemism for staff cuts. France-headquartered Lowendalmasaï, however, approaches cost cutting from an employee-friendly perspective. “The idea at Lowendalmasaï is to provide high added-value consulting in order to preserve human capital, by generating cash through savings that are completely painless for companies,” says global CEO Pierre Lasry. “Because we improve efficiency, achieve savings through a whole range of areas – including taxes, purchasing, working capital and R&D financing – we don’t touch the personnel base of the companies,” he says. “We believe very strongly that human capital should be the last thing to touch, if you’ve been through every other option.” Founded in Paris in 1992, Lowendalmasaï now employs 400 people in nine countries, expanding through both organic growth and buyouts. The Tokyo subsidiary was started as a separate company in 2005, and subsequently taken over through an acquisition in 2007. The Japan operation currently employs 20 staff, and is expanding its headcount. Over the past 20 years, Lowendalmasaï has steadily increased the range of services it offers, both by developing new ideas in-house and by adopting selected methodologies of its acquisitions. “The idea has been to get the biggest portfolio of cost-saving services. The reality of today is that companies – if they want to innovate, invest and survive – need to generate financing 26
November 2012
themselves, as they can’t rely on the banks for funds,” says Lasry. The operations in Japan are currently focused on the purchasing consultancy services side of the business, and Lowendalmasaï works with both domestic and multinational companies here, of varying sizes and across a range of sectors. Clients include Astellas, LVMH, Heineken Japan, adidas Japan, United Arrows and Christian Dior, plus many others, some of whom it cannot name for reasons of confidentiality. With pressure on public finances being felt globally, Lowendalmasaï is also working increasingly with local and national government organisations around the world. “Not in Japan yet, but maybe in future,” Lasry suggests. The targeted markets for purchasing change very fast, and each spend category has its own peculiarities and rules that need to be understood, he explains. When looking into purchasing for clients, Lowendalmasaï “always achieves savings greater than 15%,” according to Lasry. “Return on investment for our projects is almost immediate; clients can see results within a few months,” he adds. In Japan, habits are harder to change because the relationship between companies and their suppliers is “very obviously stronger than anywhere else”. After the Lehman Shock (2008), and even more since the 3/11 triple disaster, the company has seen significant changes in the attitudes of its Japanese clients. They are now keen to diversify their supplier base to include sources outside Japan. “First, because of globalisation and competition, they need to find cheaper suppliers outside their own country. This is a big challenge, because sourcing abroad is different from in-country sourcing. And there are issues with quality, which is very high in Japan,” says Lasry.
“Second, they want to diversify to suppliers abroad as part of their risk management strategy,” he continues. One of Lowendalmasaï’s main activities in Japan is to help clients change their purchasing organisation, so as to function efficiently in a new environment, where they are dealing with suppliers from around the world. “In some countries, companies are very keen to outsource activities that they believe are not part of their core business. The less they do in-house, the happier they are; that’s not the case at all in Japan. They are not against the idea of being helped by people like us, provided they are able to learn how to do it internally in the future,” explains Lasry. While the idea of reducing purchasing costs doesn’t sound inherently difficult, there is clearly more to it than simply buying at a better price. Lowendalmasaï prides itself on attracting top-level personnel, for example, University of Tokyo PhD holders in mathematical game theory and former laser researchers. Their rigorous approach to problem solving and analyses allows them to implement cost-saving methodologies and create new solutions for a client that take into account previously unexplored factors. “I tell clients in Japan that we have rocket scientists working for us, and it’s not a joke,” says Carlo La Porta, business development director at Lowendalmasaï K.K. Despite Japan’s economic problems, Lasry sees opportunity for market expansion, some of which is driven by resolving the challenges posed by lowcost Asian rivals. “At least in the short to medium term, there are still forecasts for growth in the Japanese economy, which is different to the current situation in Europe,” points out Lasry. “And profit margins remain good.”
I nvesting I n J apan
November 2012
27
Animal Health// In harmony Text Geoff Botting
Japan’s market for animal health products may be one of the biggest in the world, but it has also been losing its lustre over the years, in the eyes of many industry insiders. The market for pharmaceutical and biological products for livestock and pets in Japan has seen scant growth for many years, generally around 1.5%, while global growth is generally in the range of 3-4%. At the same time, Japan’s market is heavy with regulation, including requirements for rigorous testing – much of it unnecessary. That tends to push up costs throughout the industry and creates lags for the latest products to come to market. Combined with the low growth rates, the regulation has made Japan’s market for animal health products less and less attractive for European and other foreign manufacturers. To help fix the problem, the EBC Animal Health Committee has long been calling for harmonised technical standards among Japan, the EU and other countries, including the elimination of duplicate testing.
28
November 2012
Animal Health Committee Major advocacy points k Product approvals – The government should speed up product approvals and fully harmonise its regulations with international standards. k Seed lot system and national assay of vaccines – Eligibility requirements should be aligned with international standards, and extra testing for dogs and cats should be scrapped. k Withholding period on oil adjuvant vaccine – The period for food-producing animals should be shortened or eliminated. Products already approved and registered in Europe and other developed countries often require further testing exclusively to satisfy Japanese authorities – a process that is not only extensive, but frequently lacking in scientific rationale. “Repeating the same tests we’ve already done seems a little bit
redundant,” says Dr Bruce Quinn, the committee’s chairman. The result? Higher costs for both the product’s manufacturers and their customers, and delays with new products entering the market. And as for the end result, the competitiveness of Japan’s livestock industry ends up suffering. Quinn points out that the production of pharmaceuticals often takes place in large factories overseas, with a single plant churning out products that are shipped to a variety of countries around the globe. “But if you have to apply these different test methods, especially during the manufacturing process, just for the Japanese market, then it becomes really difficult for the manufacturing plant to implement that,” he says. Another dimension to the problem is the welfare of the animals that serve as test subjects. The extra rounds of testing “create serious animal welfare concerns”, the committee states in the EBC 2010 White Paper. “We like to use as few animals as we
I n C ommittee
can in testing,” says Quinn, who worked as a veterinarian in Canada before joining the pharmaceutical industry. For the EU, Japan and the United States, the major force behind harmonising the standards for animal-health product registration is the International Cooperation on Harmonisation of Technical Requirements for Registration of Veterinary Medicinal Products (VICH). Officials at VICH have been at work since 1996. But whereas Europe and the US have made “major progress” over many years, says Quinn, Japan is still lagging in several areas. The process is often marked by the Japanese representatives being quite positive and open during the talks, only for the momentum to drain away by the time concrete regulatory changes are needed. “In general terms, what we see is that the Japanese are willing to participate in these international forums, but then there’s this failure to act at the local level,” says Quinn, who is president and representative director of Boehringer
Ingelheim Vetmedica Japan. “When it actually comes down to implementation, they’re sometimes hesitant.” One reason for the delays in getting products registered can be traced to the regulatory authorities involved – all three of them. The involvement of the ministries of Agriculture, of Health, and the Food Safety Commission – as opposed to just one body – delays production registration for “an extremely long time”, the White Paper states. The committee recommends that all three bodies work “in parallel” instead of in their own separate time frames. Documentation is another area of concern. Japanese regulators have long required technical reports to be in Japanese. The Ministry of Agriculture, Forestry and Fisheries (MAFF) has recently started to accept reports in English, although progress has been patchy. According to Quinn, there has been “some progress, but it must move in tandem with the regulators’ ability to
It’s in the hands of Japan’s officials to rectify the situation Dr Bruce Quinn, chairman manage English-language dossiers, and I think the pace is there”. The committee, with five corporate members, meets three times a year, in addition to ad-hoc sessions when necessary. Members also meet with MAFF officials at least once a year. In the meantime, many overseas pharmaceutical manufacturers in animal health have been losing interest in the Japan market. And now, it seems, it’s in the hands of Japan’s officials to rectify the situation. “The challenge for Japan is that it doesn’t limit itself from the leading edge of technology due to unnecessary regulation and various NTBs [non-tariff barriers],” Quinn says. “Change can occur if the willingness is there to do it.”
November 2012
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E nglish - speaking dental clinics
Nakashima D.D.S. Nakashima Dental Office, Roppongi U Bldg. 4F, 4-5-2 Roppongi, Minato-ku, Tokyo Tel: 03-3479-2726, Fax: 03-3479-7947. Email: hahaha@dentist-nakashima.jp Appointments also through whatclinic.com www.dentist-nakashima.jp We provide laser root canal treatment with five-times better results than conventional methods. Qualified in advanced laser gum and cavity treatments. Laser is the only tool available to kill bacteria at the site; in one session, mouth odor problems solved. All treatment phases performed under a microscope to ensure optimum precision. Can install porcelain crown in one week. Can set aside 1-3 hours for busy patient’s appointment. Offer whitening and cosmetic procedures using porcelain or direct bonding composite resin. Adult orthodontics another specialty. Dr. Kazuya Nakashima has received distinguished awards from The American Biographical Institute and International Biographical Centre, Cambridge, England. Comprehensive General Dentistry ADA, AAP, AAE, ALD, AACD, AGD and JDA member Can fill out foreign insurance form to be filed for claim purposes.
Certified laser dentistry for cavity, root canal and gum treatment
Hanzomon Dental Office General Dentistry | Oral Surgery Implant Dentistry | Esthetic Dentistry | Whitening We provide cutting-edge dentistry with a gentle touch for all your dental needs, specializing in all phases of General & Cosmetic Dentistry, and we accept all insurance. Our waiting room is elegant, yet cozy and comfortable; the music is soft and the ambiance is inviting. Our highly skilled staff are friendly and caring. We have taken great care to provide an environment in which you will feel at home. After obtaining her dental degree at Fukuoka Dental College, Dr. Ayako Zenitani went on to become a specialist in cosmetic and implant dentistry. She trained at the UCLA School of Dentistry, Department of Esthetics Dentistry, and then at the New York University College of Dentistry, Advanced Education in Periodontics and Implant Dentistry. She received an award for Best Poster Presentation at the Academy of Osseointegration in 2006. Ayako Zenitani D.D.S. Hanzomon Dental Office Hirakawacho Court 1F, 1-1-1 Hirakawacho, Chiyoda-ku, Tokyo 30-sec walk from Hanzomon Station, Exit #1 Mon-Fri, 10:00-14:00, 15:00-19:00 (Sat, -17:00) Closed: Sundays, public holidays
Tel: 03-3239-4182
http://hanzomon-dental.com
Trained in Europe and the US Specializing in implants, esthetics, laser and Anti-Aging medicine RYO KITAMURA D.D.S.
RYO DENTAL CLINIC
Operating hours: Mon-Sat 10:00 a.m.- 1:00 p.m. Mon-Fri 2:00 p.m.- 6:30 p.m. tel: 03-3444-4200 fax: 03-3444-4202 3-25-2 Ebisu, Shibuya-ku, Tokyo, 150-0013 Japan info@ryodental.com www.ryodental.com
G reen B i z
Oyster rebound Fizzy water aids bumper crop of oysters Text ginger vaughn
Even nature needs a little encouragement sometimes Hirofumi Ohnari sharing their boats, along with other resources, but everything was different. Everything was uncertain. “Some thought it would take at least five years for the oysters to come back,” he says, “but a lot of us thought that it might never happen at all.” However, after less than 18 months, oysters are not just growing, they are thriving. They are plumper and tastier, an even better product than before. Nature repairs all, say some locals, but more of them, including Shida, are pointing to a new appearance of tiny bubbles on the surface of their familiar bay. Areas where the water seems fizzy indicate places where microbubble generators have been placed. Ichinoseki Technical College in Iwate and Hachinohe Technical College in Aomori prefecture provided the bubble machines, in a programme called “Resuscitation of Enclosed Coastal Seas and its Aquaculture by Large-Scale Micro-bubble Generators”, initiated by the Japan Science and Technology Agency. “Even nature needs a little encouragement sometimes, and this technology has greatly helped to make bigger, tastier oysters,” says Prof Hirofumi Ohnari of Tokuyama College, who leads the ¥9.1 billion project. The resulting excellent oysters are helping rebuild lives in the area, he adds. “Slowly but surely we are seeing signs of progress. Things are looking better.” Ohnari and local fishermen such as
Ginger Vaughn
K
enshi Shida, an oyster farmer for over 40 years, used to think nothing of tiny bubbles appearing on the water’s surface around the oyster beds in Ofunato bay, Iwate prefecture. After all, the seas are rich with life. For generations, the oyster farmers of Akasaki, a remote coastal town in Ofunato, have been accustomed to bounteous waters. Their delectable Akasaki oysters fetched premium prices at top restaurants around Japan. Then the Great East Japan Earthquake and tsunami of 3/11 destroyed much of the town, swept away boats and obliterated much of the marine life in the area. A thousand oyster beds were washed away, and the sea was tainted with oil and debris. Almost half of the 70 local oyster farmers were forced to leave. Those remaining were at a loss regarding the fate of their businesses, as many operations, such as the processing and transport of oysters, were shared. Even if there was a harvest, departures had put a huge dent in the skilled work force. In times past, Iwate accounted for over 6% of Japan’s 200,000-tonne annual oyster yield, according to the Ministry of Agriculture, Forestry and Fisheries. Many locals have spent their lives gaining income from the sea, either by working as deckhands and fishermen, by selling seafood or by working as cleaners and packers in nearby processing centres. The tsunami swept away the only means of livelihood for many. “I’ve always owned a boat, and suddenly I didn’t have anything,” says Shida. “Having a boat is more important than owning a house when you’re a fisherman.” A while after the tsunami, he says, fishermen and oyster farmers began
Kenshi Shida
Shida, through the Kami-takonoura Oyster Farming Association, placed more than 100 bubble generators at depths up to about 10m. The generators operate 24 hours a day, drawing air from above and producing tiny bubbles (about two hundredths of a millimetre in diameter) that spread out over distances of several hundred metres. The bubbles release oxygen into the sea, thus reducing harmful bacteria and encouraging beneficial bacteria to produce extra nutrients for the oysters. The oysters in commercial beds grow from tiny seed oysters placed strategically along thick ropes. Our boat stops in various places so that Shida and his fellow fishermen can pull in long lengths of rope laden with large, clunky oysters that have grown in less than a year. Shida cracks open some of the shells to demonstrate how large and thick the molluscs have become. “Micro-bubbles are important in reviving oysters, but that’s not all,” he says. “We fishermen have joined hands and really worked hard to get this far.” Then he looks around the desolate bay, at the broken houses along the shore, and lets out a sigh. “A lot of progress has been made, but there is a still a lot to be done,” he remarks. November 2012
31
Get
CommittEES
involved Some 400 of the over 2,500 affiliated local European companies and individuals participate directly in one or more of the EBC’s 30 industry committees covering a wide variety of economic sectors.
Aeronautics & Space Airlines Animal Health Asset management Automobiles Automotive Components Banking Business Aviation Business Continuity management Construction Cosmetics Defence & Security Environmental technology Food Human Resources information Communication technology insurance
Legal Services Liquor Logistics & Freight materials medical Diagnostics medical Equipment Patents, trademarks & Licences Railways Retail & Wholesale Sustainable Development tax telecommunications Carriers telecommunications Equipment
To join the EBC visit www.ebc-jp.com
For more information please contact the EBC Secretariat. Alison Murray, EBC Executive Director. Tel: 03-3263-6222. E-mail: ebc@gol.com
Away on business or leisure, find comfort in a familiar environment — luxurious in Oakwood Premier, elegant in Oakwood Residence or stylish in Oakwood Apartments. Come home to the ease of Oakwood living in Asia. Oakwood offers a choice of 6 hot spot locations in Asia's most cosmopolitan city, Tokyo — Aoyama, Akasaka, Azabujyuban, Midtown, Roppongi and Shirokane. For further details, please visit our website or call (81-3) 5412 3131 or email us midtown@oakwoodasia.com.
EVENT REPORT
CCIFJ Super GT Round 6 tour
9 September, Fuji Speedway, Shizuoka prefecture Text and photos DAVID C HULME
“Whatever you do,” barked the Fuji Speedway official, “do not open the window. Don’t wave. The drivers are concentrating. Just watch – like watching lions.” As the bus tootled along the left-hand lane of the racing circuit, with high-performance cars screaming by at 250 km/h (just warming up), no passenger was tempted to flout any of the rules. As the official said, this was a “once-in-alifetime opportunity”. After a full circuit, the bus was allowed to switch to the right-hand lane, giving passengers on the other side a perfect view of the overtaking speedsters. Fuji Speedway, in the foothills of Mt Fuji, is 4.563km in length, with 16 turns. The venue is petrolhead heaven, but even for a non-mechanically minded pedestrian a day at the Super GT track, with chances to get close to the powerful cars and their celebrity drivers, plus thrilling races, was memorable indeed. Organised by the French Chamber of Commerce in Japan (CCIFJ), in close cooperation with Nihon Michelin Tire, the speedway tour gave participants extraordinary access. Besides the circuit tour, visitors were able to see the paddocks (where cars undergo pre-race maintenance, adjacent to the pits) and walk the length of the grid before the main race. At this time, many of the drivers agreed to give autographs and be photographed with fans, especially the delighted children. Racing fan Christophe Xerri, a counselor at the Embassy of France in Japan, welcomed the opportunity to visit the speedway for the first time after living in Japan for five years. Having witnessed races at Le Mans and Monaco, he compared Fuji Speedway very favourably with those venues. “Having good access made all the difference,” he said. Tour participant Jean-Marc de Royere, Tokyo-based chairman and CEO of Air Liquide Asia-Pacific, who, with his two sons, joined the tour “out of sheer curiosity”, agreed that the sense of participation was exceptional. “Being able to visit the grid and the pit area just before the race was really surprising,” he said. Tour members were treated to the air-conditioned hospitality of a Platinum Room atop the grandstand building,
with a TV showing race coverage as well as a great view of the home straight. “Being all in Japanese, it was a little difficult to follow exactly what was going on in the race, but it was a splendid day,” said de Royere. “It is not just the speed that is amazing,” commented Xerric, “but also the precision of the driving and the stability of the cars.” Another surprise was a visit to the Platinum Room by the large, white, bulging Michelin Man. As Xerric kindly explained for the benefit of the anglophone, Michelin’s original name for the 118-year-old mascot is Bibendum, and the name derives from a triumphant opening line in the Latin “Odes of Horace”. Nunc est bibendum means “Now is the time for drinking”. Michelin adopted the mascot and the motto together, and for the company they came to mean that Michelin tyres drink up every obstacle. Anyway, the blue car won.
November 2012
33
Beyond the limit Text and photo DAVID C HULME
34
November 2012
C ulture S hock
“Doing 400 sit-ups is not a big deal,” says Rosie Slater. “Six months ago it would have seemed crazy to me, but now it is one of the easier fitness sessions that we do.” Slater is a little more than halfway through the gruelling 11-month senshusei (specialist) course in Yoshinkan aikido. She has endured endless hours of seiza (kneeling), sweated through tortuous exercise routines, done thousands of break falls and suffered various injuries. And the hard part is yet to come. “There is still the black belt and the instructor’s license. The further you go, the more is expected of you. It does not get easier,” she says. The course, inaugurated in 1957 to train Tokyo riot police, takes the student from beginner to black belt and instructor level within a year, as opposed to at least five years by any other means. A 1997 book, Angry White Pyjamas, by course graduate Robert Twigger, spread the fame of Yoshinkan aikido beyond Japan. What makes a woman give up a great job and leave behind a husband in Hong Kong so she can come to Tokyo to study and practice martial arts five days a week from 7:30am to 2pm, while learning Japanese at the same time? “I was in an exciting city, with wonderful destinations at my doorstep, disposable income . . . but I kept wondering why I was not happier,” says Slater, who in any case had had this challenge in the back of her mind since reading Twigger’s book years ago while living in France, where she grew up. At first the notion of spending a year in Japan seemed like an impossible dream, but things gradually fell into place. Having studied archaeology at university in England, she began a career in journalism and landed a job in Hong Kong as a bond reporter for FinanceAsia. Another flagstone in the path to the dojo (training hall) was laid when her brother moved to Tokyo. She convinced herself (and her husband and her employer) that at last it was time to make the dream come true. No prior experience with martial arts is required, but applicants have to be fit. Slater devised a rigorous weekly training regime. “There were three sets of interval training and some gym work, plus a run up Hong Kong’s Peak,” she says. “My pulse rate came down from about 65 to 44 beats per minute.” Physical preparation alone, however, counts for nothing. Aikido stands out among martial arts as a mental, even spiritual, discipline. Students undergo a great deal of self-analysis in order to eliminate wasteful and negative emotion. “That has been a revelation,” says Slater. “You find that you can endure much more than you would have believed, without feeling sorry for yourself. One of the key aspects of the course is that you have to stay positive, or you will not get through it.”
If you are not positive and confident, you will injure yourself
This is not simply a matter of sticking to the task, she adds. “You realise how negativity affects your performance. If you are not positive and confident, you will injure yourself.” She sees aikido as more than a mere sport. “It is an art,” she explains. “There is so much detail. It is so intellectual, and there is so much pressure to get everything right, at speed.” Self-improvement is required to control the emotions, because aikido is about neutralising the opponent without causing injury. “You have to see your opponent clearly and control yourself. You have to work quite hard on yourself so as not to be provoked to aggression or anger,” Slater says. Throughout pain, exhaustion, frustration and emotional battering, Slater has not thought seriously of giving up. “It has gone from forcing myself, out of sheer pigheadedness, to not wanting the course to end,” she says. A few, who may have underestimated the challenge, dropped out. Others, Slater says, have grown. She describes the “complete transformation” of a fellow student who at the beginning was “quite obviously lost . . . but now is much less defensive, more flexible, calmer, quieter, and really fit.” Her own experience is somewhat similar. “Knowing what you are capable of gives you serenity. You can’t have that without being pushed past what you believe are your limits,” she says. “When I first started,” she adds, “I wanted to tell everyone how tough it was and what was happening to me. Now I just say, ‘Oh, I study aikido.’ If they are unimpressed, it doesn’t bother me.” What happens when the course is completed? “The sensei [senior instructors] are interested, because they invest a lot in you,” says Slater, who is gradually bringing into focus the possibility that her teachers can take her to the level of being able to credibly impart to others what she has learned. “I would like to teach aikido,” she admits. “I would like to teach children to be like the young instructors at the dojo – very confident, alert, aware of their capabilities, non-aggressive.” This student of aikido is already a credit to her teachers.
November 2012
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Education in Japan
“International” remains a constant when describing a global company’s mission. But when it comes to education of future leaders, the word drives the curriculum, the extra-curricular activities, school cafeteria menu – the relationships among faculty, students, families and community.
Tokyo YMCA International School
Cezars Kitchen K.K.
Ohana International School
http://tokyo.ymca.or.jp/tyis/
info@cezarskitchen.com
Ohana.International.Sch@gmail.com
TYIS has been serving the international community since 1998, providing quality curriculum and education through Grade 6. TYIS uses a North American-based curriculum as its foundation for the core subjects of language arts, mathematics, science and social studies, which are adapted to international content standards. Integrated into the curriculum are classes in physical e sducation/swimming, music, art, computer skills, and Japanese. TYIS has access to the YMCA Wellness Center facilities, with two swimming pools, full-size gymnasium, and rooftop tennis courts. English is the language of instruction, however native English ability is not required to enroll at TYIS. All applicants are screened for English-language skills. Students may be placed in the English as an Additional Language (EAL) program until prepared to perform full-time in the mainstream classroom. Please check our website for further information. We look forward to welcoming your family to our school.
www.cezarskitchen.com
www.school-in-tokyo.com
Cezars Kitchen is a Japan-based, onsite catering solution for schools, universities and businesses interested in having more than only a Japanese-style food & beverage programme for their students, faculty and/ or employees. The parent company, Cezars International K.K., was founded 17 years ago and has been serving the international and Japanese communities ever since. We specialise in authentic international, nutritious menus, made by passionate chefs from all around the globe, including Germany, the United States, England, Australia, Malaysia and, of course, Japan, just to name a few. To learn more about our services or to request a site visit, please contact us at 052-229-8571 or at info@cezarskitchen.com. We hope to have the chance to improve the culinary experience of your students, faculty and/or employees!
Ohana International School in Azabu-Juban, Tokyo is an inclusive preschool with a difference. We cater for children between 18 months and five years, and our students are a wonderful mix of nationalities. What sets Ohana apart is that we are one of the only international preschools where the owners are the teachers and live the philosophy of the school. We believe in building the character of our students through academics and life skills – how to be a team player; respect others; consider one another; take care of one another, our community and environment. Through our lessons and projects, students are “hands-on” participants. A graduate of our school will have not only academic skills, but also depth of character to succeed in interactions with others. Our learning programme is designed to build on the strengths of each child, valuing families and their ethnicity, as well as everyone’s contribution to the school.
Pola Nagoya Bldg. 2F, 2-9-26 Sakae, Naka-ku, Nagoya City 460-0008
ASIJ:learning
ADVERTORIAL
global
The American School in Japan (ASIJ), Punahou School, Sidwell Friends School, The Dalton School and Lakeside School—What do these leading independent schools have in common? Students at each of these schools, and over 14 others around the world, can take challenging online courses in a wide variety of subject areas through Global Online Academy (GOA). Students opting to take these courses, taught by master teachers from each member school, learn with virtual classmates from around the world, each bringing their own unique perspectives to the class. Diverse subjects that range from bioethics and comparative government to urban studies and iPad/iPhone app development provide a broad range of opportunities for students to engage with new topics and ideas. Member schools of Global Online Academy boast an impressive array of former students that include Bill Gates and Paul Allen (Lakeside), Barack Obama (Punahou), Mitt Romney (Cranbrook), Claire Danes and Anderson Cooper (Dalton), Gore Vidal and Nobel Prize-winner George Akerlof (Sidwell), Edwin Reischauer and Sony CEO Kaz Hirai (ASIJ). Students at ASIJ will benefit from the innovative and stimulating
educational opportunities we are developing with our partners in GOA. “Over the past few years we’ve worked on integrating technology into our classroom instruction and had begun moving towards eLearning as a way to provide a broader set of learning opportunities for our students beyond our campus. GOA enables us to provide a rich set of rigorous, interdisciplinary course offerings in the context of a global classroom,” says Rick Weinland, High School Principal. “More and more of our information is delivered online and both teachers and students need to be skilled at using this medium for learning. One in three college students now takes a course online and so I believe that GOA will play a part in helping prepare our students for their college experience,” says Ed Ladd, Head of School. ASIJ is very excited to be part of this unique group of schools and the only member of GOA in Japan. To find out more about the many other ways that we are innovating and how we love to learn, please visit our website.
Courses include: An Introduction to Bioethics Comparative Government: Campaigns and Elections Declaring Our Humanity: Applying Philosophy to Modern Global Issues Grassroots History of Modern China The Hispanic Experience Medical Problem Solving Multivariable Calculus Using Geographic Information Systems to Solve Global Issues Environmental Economics Global Health iPhone/iPad App Development Modern Ethical Dilemmas
Pre-K through grade 12. Accredited by WASC. For complete admissions information please visit: <http://community.asij.ac.jp> or call 0422-34-5300 ext. 720
Urban Studies: The Evolution of Cities Playwriting 2.0
St. Mary’s International School High praise for academic, physical and artistic accomplishment Following the fun-filled, exciting evening of St. Mary’s Bingo, we brought the month of October to a close with the Halloween Parade, where all the elementary school students turned out in their adorable costumes. Parents joined in the fun, and wowed us with their creativity. As the leaves turn colours, we trade in our tennis and cross-country uniforms for gear more suited to winter sports. The St. Mary’s Titans are known throughout the Kanto Plain, and indeed the Far East, for their prowess. Athletics Our soccer team has always been favoured to capture the championship, bringing the trophies home year after year. Indeed, the Titans’ rivalry with another international school in Tokyo is legendary. Also, basketball is one of the most popular sports we offer. Our new gymnasium bears a plaque commemorating Coach Sava, who led St. Mary’s International School to two
Men’s Choir, Varsity Ensemble and
boys first pick up an instrument, they
Far East Championships. Huge crowds
International Show Choir, which is a
are filled with the desire to create a
turn out to fill the gymnasium and see
mixed choir with students from two
performance which matches the music
the Titans take on all comers.
girls’ schools in Tokyo. St. Mary’s
of their imaginations.
Our winter sports programme is
choirs have participated in several
Both the Choirs and Bands host
rounded out by the Titans wrestling
choral festivals in the United States and
Christmas Concerts in December, which
team, which has produced numerous
have received many awards with high
bring colour and joy to the festive season.
MVP wrestlers at the Kanto Plain
accolades.
Tournament. The photos of the Far East
St. Mary’s International School,
Since welcoming our new band
conveniently located in Setagaya ward,
Champions from St. Mary’s adorn the
director last school year, St. Mary’s
has been providing quality education to
wall of fame, stretching back through
Band has risen to an even higher level
the international community in the Tokyo
the decades of St. Mary’s history.
of performance. The Jazz Band was
area for over 50 years. The 850 boys
a huge hit at last year’s Gala Dinner
attending St. Mary’s – from elementary
Fine arts & activities
Show, hosted by the St. Mary’s Alumni
school to middle school and high school –
Our fine arts programme has a radiance
Association. Students are introduced to
come from 55 different countries.
that sparkles throughout the year.
instrumental music from the elementary
St. Mary’s Choirs include the
school onwards. From the moment the
To learn more, please visit www.smis.ac.jp
Seisen International School Tokyo, Japan
K-12 Catholic School ~ 50 Years of Love in Action ~
Coed, Montessori Kindergarten offering full-day and half-day programs Girls only, grades 1-12 offering PYP and IB Diploma programs
www.seisen.com
eccj-ois2.pdf
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Osaka International School
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Informed, caring, creative individuals, contributing to a global community
M
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www.senri.ed.jp 4-4-16 Onohara-nishi, Minoh-shi, Osaka 562-0032 tel: 072-727-5050
Japan Council of International Schools
T
he first school in Japan to include the word “international” in its name was founded in 1924. However, there has been a long history of international education in Japan, with schools offering an education in English and serving members of the expatriate community in Japan since 1872, and four current JCIS member schools can trace their origins to before the First World War. Many more were founded in the 1950s and 1960s, and it was in October 1965 when representatives of such schools met formally for the first time to discuss mutual matters of administration and curriculum. The value of such meetings was immediately apparent, and schools started meeting on a regular basis. On January 12, 1972, a number of schools met and founded the Japan Council of Overseas Schools (JCOS). It was originally decided that membership would be based on schools being in EARCOS, the East Asia Regional Council of Overseas Schools, and that school heads would meet regularly to exchange information and discuss matters of mutual interest. In 1982 a constitution was adopted that opened membership to schools offering an English-based curriculum, irrespective of membership in EARCOS. In 1987, the name of the organisation was changed to the Japan Council of International Schools (JCIS), following the lead of the European Council of International Schools (ECIS). Schools applying for membership to JCIS must meet a number of important criteria including authority, stability, continuity, professionalism, and an explicit commitment to internationalism. Underpinning this is that the education must be offered in English. Beyond that, however, there are no requirements concerning curriculum, ethos or ownership; there is a variety of curricula and backgrounds. Some schools offer programmes of the International Baccalaureate. Others offer an education rooted to a greater or lesser degree in a national curriculum. Some schools offer a full “kindergarten to grade 12” education while
others specialise in certain age groups. Some are faithbased while others are strictly secular. The smallest JCIS member school has fewer than 100 students and the largest has more than 1,500. Collectively, our schools currently enrol just short of 10,000 students from 109 countries. About half of the member schools are located in Tokyo or Yokohama. The others are spread throughout the country from Fukuoka in the west to Sapporo in the north. The heads of member schools meet twice a year – usually in September and April. Meetings are held at member schools: once a year in the Kanto region and once elsewhere in Japan. A President (Chair), Vice President, Secretary and Treasurer are elected by, and from among, the heads of member schools. JCIS schools network on collective issues such as changes in employment legislation, actions concerning pandemics and disasters, and advice about service providers. JCIS also encourages professional development among member schools and faculty. Opportunities are taken to share the cost of visiting speakers or performers with neighbouring schools, to coordinate professional development initiatives, to bring together specialist staff, and to support schools introducing new educational programmes. JCIS schools are being asked for their input into the developments within Japanese education. JCIS exists to create a forum for the continued development and improvement of international education in Japan and the enhancement of the school experience for all families seeking an international education. John Searle President, Japan Council of International Schools www.jcis.jp Head of School, Osaka International School www.senri.ed.jp
Japan Council of International Schools Links to the member schools may be found at www.jcis.jp
American School in Japan
International School of the Sacred Heart
Seisen International School
Aoba-Japan International School
Kyoto International School
St. Mary’s International School
British School in Tokyo
Marist Brothers International School
Saint Maur International School
The Canadian Academy
Montessori School of Tokyo
St. Michael’s International School
Canadian International School
Nagoya International School
Tohoku International School
Christian Academy in Japan
New International School
Tokyo International School
Fukuoka International School
Nishimachi International School
Tsukuba International School
Hiroshima International School
Osaka International School
Yokohama International School
Hokkaido International School
Osaka YMCA International School
Join + support Picturing changing frontiers? EBC members can not only learn about important changes taking place in Japan, but also play a critical
Kyoto is picturing change in your business meetings and events
role in influencing change themselves. Kyoto Convention Bureau
Contact James Kent for consultation on event planning
www.hellokcb.or.jp kyoto@hellokcb.or.jp Telephone 075 212 4140
To join the EBC visit
www.ebc-jp.com For more information please contact the EBC Secretariat. Alison Murray, EBC Executive Director. Tel: 03-3263-6222. E-mail: ebc@gol.com
SHOP WINDOW
A new era of cheaper food? Consumption expenditure: Total and Food, 2011-12 20 15
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10 5 0 -5 -10 -15 2011 J
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Until recently, food retailers steered away from outright price competition. The industry continued to insist that Japanese consumers were only interested in quality, and were happy to pay for it. This may never have been true and certainly isn’t now. The success of Seiyu-Walmart’s Everyday Low Price (EDLP) strategy has forced competitors to lower prices in response. In some important product categories, especially food, consumers are looking to stretch their budgets further. The upcoming increase in consumption tax, alongside rising utility bills, are two factors. Daiwa Institute of Research says household disposable income will shrink 5.1% in real terms on average in 2016. Even without these pressures, the food sector is long overdue for some real competition after years of prices (and costs) being kept artificially high, and consumers are demanding more savings on essentials. Led by Seiyu, food retailers like Yaoko, Inageya, Daiei and even Aeon are introducing price cuts for daily necessities. These are not one-off special offers, but a new era of lower prices. Yaoko, one of the most respected supermarket chains in the country, introduced an experimental EDLP range of 700 basics – packs of bean sprouts for just ¥19, for example – in 26 stores in 2009, and by last year the range already accounted for 6.9% of sales. The cheaper produce has been so popular Yaoko now plans to expand the lower prices to the entire chain by the end of 2013. Seiyu itself continues to cut prices. By the end of this 42
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year, it will have lowered prices by 5-10% on some 1,400 products, including famous Japanese brands, and plans cuts on another 1,000 in 2013. Already the new prices have helped soft drink sales rise 1.2 times, while sales of noodles have doubled. In late September, Daiei, which is controlled by Aeon and Marubeni, lowered prices on some 1,700 products. Aeon also says it aims to double sales of discounted food lines by the end of 2013, and in mid-October it emulated Seiyu with cuts on 600 items. This shift to lower prices is unprecedented, all the more so because not only are these discounts permanent, many of the price cuts are on major food brands, not just store branded merchandise. It reflects the rapid shift in the balance of power from manufacturers to retailers in food distribution, a shift that presages a new era of value food retailing.
Roy Larke JapanConsuming is the leading provider of intelligence on consumer and retail markets in Japan. The monthly report provides news about, and in depth analysis of, current trends.
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events
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any airlines reduced services to Narita International Airport as European business travellers cancelled trips following the triple disaster of 11 March. But now European airlines are coaxing passengers back to Tokyo. “We are trying slowly and steadily to get the whole business back to normal,” says Jenny Fürstenbach, passenger sales manager for Japan at SAS, which > Belgian-Luxembourg Chamber of celebrated 60 years of business in Japan Commerce in Japan in www.blccj.or.jp April. SAS put a lot of energy into counAnnual the gala ball: “Django teracting negative image of Japan Reinhardt” following revelations of the meltdown 13 the November, Tuesday, 18:30-23:00 at Fukushima nuclear plant. “For Conrad a long time foreign media Venue: Tokyo,the Annex 2F, Kazanami Ballroom, Shiodome portrayed the image that Japan Fee: ¥20,000 ¥25,000 was had sunk in (members), the sea, everything (non-members) radioactive, and we all lived in shelters,” Contact: info@blccj.or.jp Fürstenbach says. “So, we realised that Business Seminar: “Delighting we needed to help our crew and sales staff understand the situation in Customers in that Japan” Tokyo is quite normal.” 26 November, Monday, 17:00-20:30 In May and June SAS ran Country a points Speakers: François Stroobant, campaign for travellers looking to Manager Japan, Perfetti Van Melle; Loic Rethore, President andthe Representative visit Tokyo through end of 2011. Director, Nestlé Nespresso K.K.; Toshifumi Members of the SAS EuroBonus mileage Okui, former President, Harley-Davidson Japan program have the chance to visit Japan Venue: NYK Building, Tokyo for 40,000 points for an economy class Fee: TBD seat on ainfo@blccj.or.jp roundtrip basis, compared to Contact: the standard 80,000 points. > Finnish Chamber remain of Commerce in Leisure travellers wary about Japan visiting Japan, but SAS has seen a pick www.fcc.or.jp up in business travellers. “That is a good sign, because if business travellers feel FCCJ luncheon meeting safe then leisure travellers 14 November, Wednesday, 12:00-14:00will follow,” Fürstenbach says.Kasai, Chairman and Speaker: Yoshiyuki Turkish Airlines set up a special Representative Director, Central Japan fare Railway Company in April and May, donating part of the Venue: Grand Hyatt Tokyo, Room, proceeds of ticket pricesDrawing to the victims Roppongi of the disaster, according to information Fee: ¥6,000 (members), ¥8,000 on the company’s website. A donation (non-members) of ¥3.9 million was made to the disaster Contact: fccj@gol.com area through the Japanese Red Cross Stora Enso Cup - SwedenSociety. Finland Golf German Challenge For Lufthansa Airlines, which 30 November, Friday celebrated 50 years of doing business in Tokyo January, the Japanese Venue:in Taiheiyo Club Narita Course,market Chiba prefecture is the second most important interconFee: ¥18,000 tinental market after the United States. Contact: fccj@gol.com The company intends to focus on Japan during the autumn and winter period, Scandinavian Christmas Party offering 7 December,attractive Friday, 18:30-prices. 24:00 “We The want to show that Japan can be Venue: Westin Tokyo, Ebisu one of the more attractive places when Fee: ¥18,000 it comesfccj@gol.com to cost,” says Otto F. Benz, Contact: general manager for Japan.
Compiled by David Umeda
Lufthansa also organised a oneweek study tour to Japan for about 25 representatives of the German travel industry in early August, allowing decision makers to gather information and get a firsthand impression of the postdisaster situation. “They got a clear picture that Tokyo is a safe place, and that tourists can visit,” Benz says. “It was important they came here because only when the agents are convinced Tokyo is safe will they gener> French Chamber of Commerce and ate new programmes.” Industry in Japan For Finnair, 2010 saw Japanese sales www.ccifj.or.jp overtake Finland-based sales, and it CCIFJ Annual Party is no surprise thatGala the airline aims to 12 November, Monday, from 18:00 boost the number of Japanese leisure passengers visiting Europe. CCIFJ joint event with Tokyo Finnair was helped by the fact that, Chamber of Commerce along with Lufthansa, it is one of only 20 November, Tuesday, from 18:30 two airlines that fly daily services to Central Japan > Ireland JapanInternational Chamber of Airport Commerce near Nagoya, and Kansai International www.ijcc.jp Airport near Osaka. Third Thursday Finnair promotes Networking the shortest flight 15 November, December,of Thursday, 19:00-21:00 times to a20number regional European Contact: secretariat@ijcc.jp locations where no direct Japan flights exist, such as Manchester. It is also IJCC Business Awards Dinner hoping to cash in on the natural beauty 29 November, Thursday, 19:00-23:00 of the polar lights. Venue: Conrad Tokyo, Shiodome “We compete with other countries Contact: secretariat@ijcc.jp and regions – such as Canada and IJCC Christmas AlaskaFamily – for ownership of the aurora, but this isSunday, really something for Japanese 9 December, 11:00-15:00 people to come and see,”(3-18 saysy.o.), Sakari Fee: ¥3,500 (adults), ¥1,500 free Romu,3sales (below y.o.) director Japan. Contact: secretariat@ijcc.jp Opinions differ on when the Japanese market will fully recover. > Italian Chamber of Commerce in Japan Romu believes that European travelwww.iccj.or.jp lers are unlikely to return until spring Disco Night: Italian 2012. The Finnair sales director has Underground advised Japanese tourist authorities to 16 November,all Friday, 21:00-23:30 conserve their energies for a market rebound Venue: Fiatthen. Space, Aoyama year’s cherry¥3,000 blossom viewing Fee:“Next ¥1,700 (members), (non-members) is the next key period for Europeans to Contact: iccj@iccj.or.jp return,” Romu says. But SAS’s Fürstenbach is reluctant to– Gran Concorso di Cucina 2012 write off 2011 yet. III Edition “Threecompetition weeks after I arrived in March National open to professional chefs 2010,and westudents experienced the Icelandic ash 19 November, cloud, andMonday we said ‘Oh! This is not a normalHattori year’,”Nutrition she says.College, “2009Yoyogi, wasn’tTokyo a Venue: Contact: normal iccj@iccj.or.jp year either as we had the swine flu. So, if you start looking at it that way, ICCJ Gala Dinner & Concert you will never have a normal year. 2012: “I nostri primi 40 anni” “Tokyo has been back to normal for 4 December, Tuesday, 18:00-23:00 some time, and we want to mirror that Venue: Hyatt Tokyo, as much as Regency possible,” sheShinjuku adds. Fee: ¥21,000 (members), ¥23,000 Lufthansa’s Benz asks a rhetorical
question: Is this the country to invest in? And his answer is an unequivocal Yes! “Japan is in a difficult situation, but the trend is positive rather than negative,” Benz says. “European business travellers will return in full by next year.”
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Aperitivo della Camera Special Edition: drink, network, concert 5 December, Wednesday, 19:00-21:00
Singer: Simona Molinari Venue: 1633 Tokyo, Roppongi Contact: iccj@iccj.or.jp
> Swiss Chamber of Commerce and Industry in Japan www.sccij.jp
Year-end Party 2012 30 November, Friday, from 18:00
Venue: Hilton Tokyo, Kiku Room, Shinjuku Fee: ¥12,000 Contact: info@sccij.jp
(non-members) Contact: iccj@iccj.or.jp
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Taiko Nakazato Immersion in two worlds Taiko Nakazato lives in two worlds: one very European and business-oriented, the other a place of Japanese tradition and culture. “Sweden made my career,” says the general manager of the Swedish Chamber of Commerce and Industry in Japan (SCCJ), explaining that her first job after graduating from university was in the financial department of Scandinavian Airlines System. After almost two decades with SAS, she moved to England, and for about two years divided her time between London and Sweden. “I really liked England. My boyfriend was a Swedish business owner, so it was very easy for us to exchange visits,” she says. One problem, however, was a relative lack of sunshine in the winter months. “That was unbelievable for me,” says Nakazato. After two years, she decided to return to Tokyo and joined Belgian bakery company Puratos Japan as an assistant to the president. After about a year, Sweden called once more. She responded to a classified advertisement for the position of general manager of the SCCJ. Quickly overcoming her initial surprise that the extensive list of responsibilities – from day-to-day running of the office to accounting and budgeting, to member recruitment, planning and conducting events and activities, and arranging meetings – would be hers alone, Nakazato began building a support structure that now wins high praise throughout the Swedish business community. “There was almost no handover process. I just investigated what had happened in the past, cleaned up the computer, and got on with the job,” she recalls. Much of the work is done in close cooperation with the other Nordic chambers – for example, helping to organise the Joint Scandinavian Christmas Party – she points out. Nostalgia and love are two words 44
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Text DAVID C HULME Photo IRWIN WONG
Nakazato uses to describe her feelings for the SCCJ. “It’s like my child,” she says, adding that she feels she has fulfilled the request made of her, about 13 years ago, by the SCCJ chairman who hired her (there have been four others since): “He asked me to make the SCCJ professional as well as comfortable [for the members].” Nakazato’s flair for business came from her father and grandfather, who were both successful small-business owners. Her grandfather also inadvertently triggered an interest in learning English. “As a girl, I hated studying English,” she says, recalling a childhood, in the Yotsuya area of central Tokyo, full of activities such as baseball and judo, “but I suddenly became interested when I heard my grandfather talking English in his sleep.” Upon graduating, Nakazato needed a well-paying job in order to save for a high-grade musical instrument. Her grandfather’s company made a vacuum vehicle used by SAS to suck wastewater from aircraft. With the family connection and sufficient English, she was able to land a job in the airline’s Tokyo office. Then, in 1994, came a major restructuring. “I had to help with the termination of 141 people. It was very tough and very disappointing for me,” says Nakazato. Nakazato’s other world reflects her mother, who taught the koto and other traditional Japanese instruments. It is the world in which Nakazato plays the koto (13-stringed 180cm-long instrument), sangen (or three-stringed shamisen) and jyushichigen (17-stringed bass koto) under the stage name of Taiyu Nakazato. Performances with the jyushichigen, providing the lower register in a koto ensemble, are particularly in demand, as masters of this instrument are quite scarce. She herself is an instructor in playing these instruments, as well as a teacher of ikebana and the
art of the tea ceremony. Then there is poetry. “I compose a lot of haiku and tanka poetry, and sometimes ghost-write for foreigners,” she reveals. キラキラと、 光る水面に 遠き日の 我懐かしき、 鎌倉の地に
This tanka translates roughly as “Shimmering sunbeams on a pond, take me back to sweet childhood in Kamakura”. The image indeed comes from early memories of the family’s small second home in Kamakura, and of another cultural pursuit. Nakazato also crafts engraved Kamakura lacquer ware, giving away most of the elegantly styled items as gifts on birthdays and other occasions. “My university days were all about Japanese culture,” she says. Nakazato also loves to cook, but not only in a traditional Japanese style. Her annual visits to southern Sweden’s Småland province (birthplace of furniture retailer Ikea) are a chance to collect indigenous ingredients, such as the Swedish anchovy used in a rich casserole dish called “Jansson’s temptation”. She also has a fondness for Småland’s famed glassware and beautiful fabrics. “Also, I can’t survive without Swedish coffee,” she confesses. For the future, expect Nakazato to establish her own business someday, and to run it with calm efficiency. During an eight-month break from the SCCJ last year – a period of upheaval on many levels for her – she enrolled in business school. With her current tenure nearing its conclusion, she reflects on her continuing fondness for the chamber and the people with whom she deals. “Meeting people is the most exciting part of this job,” she says. “I like inviting people to come to events, or encouraging them to join the chamber, or just having a chat.”
E B C personality
As a girl, I hated studying English... but I suddenly became interested when I heard my grandfather talking English in his sleep
Do you like natto? Title: General Manager, Swedish Chamber of Commerce and Industry in Japan Time outside Japan: “Three years in total” Career highlight: “SCCJ” Career regret: “Nothing at all” Favourite saying: “Joy and sorrow are today and tomorrow” Favourite book: “Moment of Truth, written by the president of SAS in the 1980s” Cannot live without: “Swedish coffee” Secret of success in business: “It is not a secret” Do you like natto?: “I also cannot live without natto” November 2012
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Wasabi
Photos and text DAVID C HULME
Eichi Kawamura and his fellow wasabi farmers nurture their crops on terraces built in deep mountain gullies of Okutama, western Tokyo, making sure that the plants enjoy a continuous flow of clear, pure water. Up here, an hourâ&#x20AC;&#x2122;s walk above the road, stout netting is necessary to protect the crop from wild boar, 46
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deer and pesky monkeys that will uproot the plant in their search for tasty freshwater crustaceans. Ageing farmers such as Kawamura, with few heirs willing to take on this labour-intensive pursuit, value highly the simple monorail that allows them to continue tending their crops by themselves.
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Azusa Nakamura Tokyo Project Coordinator, Médecins du Monde
Azusa Nakamura can be found regularly helping the homeless in Tokyo’s Ikebukuro Chuo-koen. Doctors of the World (MDM) organises activities, counselling, medical checkups and food distribution as part of the NGO’s effort to make contact with the homeless, with the broader aim of bringing individuals back into society. “Working with the homeless has taught me a lot about being happy and seeing the brighter side,” says Nakamura. MDM Japan director’s assistant Marjorie Meyssignac comments: “The first contact is not always easy. The homeless are not used to receiving help, and many feel ashamed about their situation. It is surprising, though, how a real bond of trust can be created once the ice has been broken.” Photo david c hulme
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because there’s no place like home, especially when you’re sick.
Hospitals are excellent establishments. It’s just that no-one likes going into them unless they have to. So why not have the hospital come to the patient instead? Getting healthcare at home is a simple solution that makes patients less anxious and hospitals less crowded. Find out more at www.philips.com/because