EURObiZ Japan April 2010 by Paradigm

Fast

fashion The recession hasn’t slowed European clothing retailers in Japan Christine Edman, H&M Japan country manager

ALSO INSIDE //

LONDON, NEW YORK ... AND TOKYO?

Can Tokyo ever become a major financial centre?

READY TEDDY THROW

Japanese bear-shaped bin bags are big in Denmark

2010

THE MAGAZINE OF THE EUROPEAN BUSINESS COUNCIL IN JAPAN / THE EUROPEAN (EU) CHAMBER OF COMMERCE IN JAPAN

COVER

FOCUS

8 Fast fashion

12 London, New York … Tokyo?

Recession hasn’t slowed “fast fashion” clothing retailers in Japan – and European companies such as H&M and Zara are at the head of the race, reports Catherine Shaw. Cover photograph Benjamin Parks

CHAMBER SPOTLIGHT 2

April 2010

At number seven in the Global Financial Centres Index, Japan lags behind not just London and New York, but also Hong Kong and Singapore. What future for Tokyo as a major financial centre, asks Rob Goss?

18 Knocking on Japan’s door European companies are ready to bring green technology to Japan, and the EU Gateway Programme is here to help them, discovers Alena Eckelmann.

22 The Swedish Chamber of Commerce and Industry in Japan (SCCJ) represents world-leading companies in a broad range of sectors.

COLUMNS 7 From the Editor

31 Event Report

47 Executive Notes The Economist Group’s Dan Slater believes the worst is behind us.

Chanel’s Richard Collasse, a former head of the EBC, argues that an economic integration agreement could be part of a “new alliance” between Japan and the EU.

The Swedish chamber introduces three companies that have not only survived recession, but also found it an opportunity for change. Growth Strategies for Small and Medium-sized Companies in Japan at the Embassy of Sweden, 9 March 2010.

25 Upcoming Events

32 In Committee

Europe and Japan business-related events.

Working in logistics in Tokyo can require a keen insight into the psychology of traffic wardens, hears Geoff Botting when he talks to the EBC Freight and Logistics Committee.

20 Talking EURObiZ

26 Q&A Shinichi Yokoyama, co-chairman of the Keidanren Committee on Europe tells Julian Ryall why his organisation supports an EIA between Europe and Japan.

28 Investing in Japan Can central heating sell in Japan? To find out, Ty Holland visits Dimplex Japan, part of the world’s largest electrical heating business.

34 Green Biz Christopher S Thomas meets Popet, a polyethylene teddy-bear with an appetite for rubbish.

36 Who’s Who Directory

48 Culture Shock Niigata-based architect Karl Bengs disassembles kominka traditional farmhouses then rebuilds them in his own distinctive style, reports Kai Kurosawa.

50 Lens Flair Photographer Rob Gilhooly hot-foots it to Takao for a unique fire-walking festival.

52 Work Place Puratos’s Jean-Pierre Bernardino sells ingredients to bakers, pâtissiers and chocolatiers.

Real Estate and Property Services in Japan

The Mission of the European Business Council To promote an impediment-free environment for European business in Japan.

April 2010

Publisher Vickie Paradise Green

European Business Council in Japan (EBC)

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The European (EU) Chamber of Commerce in Japan

Editor-in-chief Tony McNicol

The EBC is the trade policy arm of the seventeen European national chamber of commerce and business associations in Japan

tonymcnicol@paradigm.co.jp

Senior Editor David Umeda Creative Director Richard Grehan Art Director Paddy O’Connor

Now with even more support

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Tel: 03-5447-8831 Fax: 03-5447-8832 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.

Subscription is free for members of the EBC and national European chambers of commerce. Subscription rates are: one year ¥9,000; two years ¥15,000; three years ¥22,000. ¥800 per copy. Rates include domestic postage or surface postage for overseas subscribers. Add ¥7,500 per year if overseas airmail is preferred. Please allow eight weeks for changes of address to take effect. Subscription requests should be sent to eurobiz@paradigm.co.jp If you prefer not to receive this magazine, and for all matters related to distribution, please send an e-mail to eurobiz@paradigm.co.jp EURObiZ Japan welcomes story ideas from readers and proposals from writers and photographers. Letters to the editor may be edited for length and style.

Contributors Catherine Shaw reports on “Fast Fashion” – page 8

Long-term Tokyo resident Catherine writes on business and cultural matters for a range

Originally from Dartmoor in the UK, Rob has been living in Tokyo for the past 10 years. His work is split between travel writing and Japan-related features on a variety of topics for a range of publications around the globe. For the past two years he has also been covering Japan’s financial services job market for eFinancialCareers. “Through reporting on finance recruitment, I’ve seen on the one hand an industry that really wants to compete internationally, while on the other a

Kai Kurosawa meets architect Karl Bengs – page 48

Journalist and copywriter Kai covers a range of topics in Japan. A freelancer, he currently

of publications including the Financial Times, Monocle and the South China Morning Post. “The emergence of affordable fashion companies like H&M as leaders of the retail pack is a fascinating new phenomenon. They are not only redefining the meaning of a ‘luxury’ shopping experience but also transforming the shopping habits of young Japanese.”

Rob Goss asks if Japan can become a major financial centre – page 12

government that largely seems oblivious to the obstacles it is putting in the way of progress.”

works with The Economist and EURObiZ Japan. “Our family still has an old house in Gunma-ken, but like many other traditional houses in Japan, it is now empty. Hearing Karl Bengs talk about the strength and beauty of such houses, I am now tempted to move back in. That is, if Karl could help me shift it a bit closer to Tokyo.”

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FROM TH E EDITOR

Japan’s hidden strengths In this issue, two of our interviewees make the case for an economic integration agreement between Europe and Japan. Chanel’s Richard Collasse (page 20) argues that Japan’s “humanistic and holistic” approach to capitalism means such an accord is desirable and possible. His call is echoed by the Keidanren’s Shinichi Yokoyama in our Q&A (page 26). Amongst other benefits, an EIA could help Japan and the EU set global standards for environmental technology, he says. We will pursue this important topic again in a special May issue feature. Just before this magazine went to press, the City of London released its

twice-yearly ranking of world financial centres. Despite recession, Tokyo has actually climbed two places up the table to number seven. Is this a sign that Japan has a future as a financial hub? Our feature on page 12 offers an answer. Likewise, our columnist from The Economist Group, Dan Slater, asks how strong is the Japanese economy, and how real the recovery? The real strength of the Japanese economy, he argues, isn’t necessarily apparent from bare statistics (page 47). Maybe we need a new economic model, he suggests. In this issue, as ever, we report on the diverse activities of Europeans

Join + support EBC members can not only learn about important changes taking place in Japan, but also play a critical role in inﬂuencing change themselves.

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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

in Japan. Writer Kai Kurosawa talks to Karl Bengs (page 48), a German architect based in Niigata prefecture who has spent decades reinvigorating traditional Japanese architecture. Last but not least is our cover feature on fast fashion (page 8) – a colourful example of how European companies can more than hold their own in a highly competitive Japanese retail market.

Tony McNicol Editor-in-Chief

tonymcnicol@paradigm.co.jp

inbox

In defence of parallel imports In my opinion, parallel imports (“A grey area” March 2010) provide consumers with a way to fight back against overseas brand owners and Japanese distributors who conspire to inflate prices sometimes to a multiple of those charged in US and European markets. The conspiracy extends to brand owner websites that identify visitor IP addresses and lock Japan-based consumers into a Japan-only site and Web shop. If you have friends overseas, or a proxy server, you can see what the prices are in markets where price fixing is not so widespread and tolerated. (I regularly see overseas prices that are 50-70% cheaper.) Parallel imports are a typically non-confrontational Japanese workaround. Roberto De Vido, posted on eurobiz.jp CORRECTION Our March article “Red tape tangle” stated that a new “residence card” is available. In fact, it is still being trialled and a date for introduction has not been set. April 2010

Fast fashion Europe’s clothing retailers head the race Text CATHERINE SHAW

t is a “democratisation of fashion” says Christine Edman, country manager in Japan for Swedish clothing retailer H & M Hennes & Mauritz. Despite the recent recession, sales of affordably priced but stylish clothes (often known as fast fashion) are booming. And at the head of the race in Japan are European companies. In 2008 H&M launched its first Japan store in Ginza, followed by six other stores in Tokyo, Yokohama, Saitama and Osaka. Edman describes the opening of the Ginza store as “one of the most successful openings in H&M history.”

April 2010

“We were able to illustrate that design is not a question of price, and that fashion should be attainable by all,” says Edman, although she also points out that, with a history of 60 years in the industry, the company is reluctant to be pegged as fast fashion. “Our business simply focuses on delivering fashion and quality at the best price,” she says. In the wake of Japan’s worst recession in over half a century, the time couldn’t be better for fast fashion. Mid-priced clothing retailers are vying to move into the market space left by luxury brands

hit hard by the economic downturn. That is literally the case, according to Kyodo News, for US retailer Forever 21 which may move into a space in Ginza vacated by Gucci. Meanwhile, Gap, also from the US, has its eye on Louis Vuitton’s spot. Nor are foreign retailers the only ones in the running. Fast Retailing, owner of Japan’s Uniqlo, has its flagship store in Ginza. The company reports that operating income at their Japan stores rose 28.2% to ¥110.7 billion in the year to August 2009. According to Forbes magazine, CEO Tadashi Yanai is Japan’s richest person.

COVER A long-term design consulting agreement signed with Jil Sander in 2009 has involved the German luxury clothing designer in all aspects of the design and manufacture of men’s and women’s apparel, as well as the development of a special collection, for Uniqlo. The company has also built strategic alliances with other popular brands, such as a character-license agreement with Walt Disney. According to Brian Salsberg of consultancy firm McKinsey & Company’s

Parent company Headquarters Founded Stores – worldwide Stores – Japan Website

H&M Hennes & Mauritz Stockholm, Sweden 1947 2,000 7 www.hm.com

Japan consumer and retail practice, the high-profile store locations and sophisticated presentations of fast fashion leaders have stolen luxury’s thunder. “Luxury retailers no longer have a monopoly on exciting and innovative shopping experiences,” he says. H&M’s high-impact outdoor advertising is closely tied to location, says Edman. “Interiors and graphics are specially designed for each location, and each store is very different. We also tailor our product selection to the market in

Fast Retailing Yamaguchi city, Japan 1963 908 792 www.uniqlo.com

Inditex Group A Coruña, Spain 1975 1,608 50 www.zara.com

each particular location.” H&M uses huge eye-catching storefront advertisements from fashion label Comme des Garçons, and fashion designers Jimmy Choo and Sonia Rykiel, who also collaborate on their own fashion ranges. Meanwhile, Spain’s Inditex Group opened a Zara flagship store in Shibuya late last year, its fiftieth outlet in Japan. As secretive as it is innovative in its business model – rarely talking to the press – Inditex is second in size worldwide only to H&M. Other fast

Arcadia Group London, UK 1964 400 plus 1 www.topshop.com

Forever 21 Los Angeles, California 1984 around 400 1 www.forever21.com

April 2010

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COVER

DESIGN IS NOT A QUESTION OF PRICE, AND FASHION SHOULD BE ATTAINABLE BY ALL Christine Edman, H&M

Love of luxury But the rise of affordable fashion doesn’t necessarily mean Japan’s love affair with luxury is over. According to marketing research company Yano Research Institute, Japan is still the second-largest luxury goods market in the world with 10-20% of global sales. It comes behind the US and before China, although Japan’s Asian neighbour is rapidly catching up. “Shoppers haven’t fallen completely out of love with quality,” stresses leading

Japan fashion stylist, and owner of a Tokyo luxury-goods store, Sonya Park. “They may be less likely to wear a luxury brand from top-to-toe, but Japanese are still investing in one good piece while mixing it with cheaper items.” McKinsey’s Salsberg notes that a few luxury retailers are meeting the challenge of fast fashion by frequently offering new colours and designs. But he suspects that the majority are wisely “doing the opposite … going back to basics, timeless designs and not trying to compete on ‘fashion’ but on the brand story, craftsmanship and heritage.” But if the Japanese economy picks up again, as it seems to be doing, could one-time luxury brand aficionados ditch

An ecosystem of style Interview TONY MCNICOL What is fast fashion? I assume the name is a joke on fast food in that it’s disposable, cheap and not meant to be high fashion. The name also reflects the speed at which the fast fashion brands are able to take ideas and elements from high-end designer collections to the mass market. But I don’t think it’s a label that most fast fashion companies particularly enjoy. Why has Uniqlo been so successful? First, Uniqlo has brought US and European standard mass retailing prices to a Japanese customer who had previously been asked to pay much, much more. Second, the quality and design are relatively good, and Japanese consumers have been extremely appreciative of these reasonably priced, very basic clothes. Japanese fashion these days is very non-logo oriented, and so Uniqlo provides the neutral building blocks for lots of different groups to put together an outfit. And the company smartly produces on-trend items that consumers want. Also, the company has branded itself well as modern and fashionconscious, yet still neutral enough to not alienate anyone. Everyone thinks Uniqlo is for them without worrying that people not in their segment are also buying the goods. Do you think this “new frugality” is here to stay? The Japanese always paid too much for apparel and lived up to luxury consumption expectations that would be seen as impossible in any other country. Wages have dropped every year since the late 1990s. Without an economic miracle, it’s hard to believe that this narrative of malaise will cease.

chic and cheap clothing, and cheerfully return to paying more? Salsberg has a one-word answer. “Unlikely.” He suspects the recent recession has brought Japanese consumer patterns into line with other Western economies – something that should be good news for European retailers. It looks like fast fashion is here to stay.

BENJAMIN PARKS

fashion retailers dipping their toe in the Japanese market include Forever 21 and Topshop/Topman from the UK which both have shops in Tokyo’s fashionable Harajuku district.

Does the move away from luxury brands signal a cultural change from homogeneity to individual expression? Absolutely not. Young female consumers still want to wear clothing in the same genre as everyone else, although the number of acceptable options has increased. What has happened is just that luxury bags and brands are no longer the “recipe” for the proper outfit. And as fewer and fewer girls wear their luxury bags, the girls around them take that as a signal not to wear their own. But when you see less Louis Vuitton and Gucci out on the streets these days, that’s not because less people own them. Women are just choosing not to wear them. What are the opportunities for European fashion retailers? Japanese fashion culture is the most complex in the entire world. There are more brands here than anywhere else. There are at least 60 regularly publishing fashion magazines for women alone, compared to a dozen in either the US or UK. This is a massively complex ecosystem. Japanese consumers just know what they like and have attached meanings to every brand. European fashion retailers do have opportunity in Japan, but they cannot waltz in believing that their product is more sophisticated or has an “aura” just because it’s European. The most successful brands of late succeeded because they placed their brand within the Japanese fashion ecosystem — and didn’t try to play outside it.

W. David Marx, fashion market analyst and contributing writer for The Business of Fashion

April 2010

London, New York… TONY MCNICOL

Tokyo? The capital’s uncertain future as a major ﬁnancial centre Text ROB GOSS

April 2010

FOCUS April 2010

CITY OF LONDON AND ZYEN GROUP

wenty years ago Tokyo was Asia’s leading financial centre with aspirations to rival London and New York. How times have changed. According to the City of London Corporation’s 2009 Global Financial Centres Index, which ranks the world’s financial centres by competitiveness, Tokyo now languishes behind not just London and New York, but also Hong Kong and Singapore. To make matters worse, last Global Financial year Tokyo lost its status as Asia’s Centres Index biggest stock market by trading Rank City value when it was overtaken by booming Shanghai. 1= LONDON 1= NEW YORK The situation certainly seems 3 HONG KONG grim. But what are the chances 4 SINGAPORE of a Japanese recovery? Could 5 TOKYO Tokyo one day regain its position 6 CHICAGO as the number one Asian finan7 ZURICH cial centre and again challenge 8 GENEVA London and New York? 9= SHENZHEN The simple answer to that – for 9= SYDNEY the foreseeable future at least 11 SHANGHAI – is no, says Philippe Avril, BNP Paribas’ chief country representative for Japan and general manager for BNP Paribas Securities in Japan. “I think the debate now is more about how to revitalise Tokyo and how to make sure Tokyo can continue to compete with markets like Hong Kong, Singapore and, to a lesser extent, Shanghai,” says Avril, who is also chairman of the EBC Banking Committee. To do that, however, Tokyo will need to overcome several major handicaps. “The first thing to recognise is that the cost of operating in Tokyo is very high in many ways … and the tax rate is high,” says Avril. “So there is a very strong rationale for foreign companies to say, ‘if we have to establish a regional centre in this time zone, let’s do it in a way that’s cheaper and go to Hong Kong or Singapore.’ ” A 2009 survey by KPMG highlights one crucial cost difference: corporate tax. It lists Hong Kong’s corporate tax rate at 16.5%, Singapore’s at 18% and Japan’s at 40.69%. If costs are one hurdle, then the next, says Avril, is Japan’s banking and finance regulations, which are not always in step with the rest of the world. “The biggest problem we have as Europeans is the regulatory separation in Japan between the various business areas, such as banks, securities, trust banks, asset management and insurance. In Europe we work on a universal banking model,” says Avril.

Refine + improve The EBC is a key player in the Japanese trade and investment policy arena with a core mission to promote an impedimentfree business and investment environment and make it cheaper and easier for companies to operate.

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

FOCUS

HOW CAN YOU COMPARE THE REAL VALUE OF A COMPANY OR SOCIETY, WHERE PROFIT LEVELS ARE LOW BECAUSE THEY FOLLOW ENVIRONMENTAL POLICIES AND ARE CONCERNED ABOUT THE WELLBEING OF EMPLOYEES, WITH THOSE WHERE THE OPPOSITE IS TRUE?

standards. That’s as well as Paying the price giving developing companies Corporate tax rate: the advantages that come CHINA 25% with being listed – such as HONG KONG 16.5% greater opportunities to JAPAN 40.69% raise capital, and increased credibility and branding SINGAPORE 18% within Japan. SWITZERLAND 21.17% Avril, too, points to UNITED KINGDOM 28% improvements – particularly UNITED STATES 40% on the regulation side, where there have been government initiatives to increase transparency and improve communication among banks and securities houses, and the regulatory authorities. But as Asian competitors surge ahead, Tokyo simply hasn’t been able to keep up, he says. “A lot of effort and progress has been made in Japan and I think there is a chance for Tokyo to catch up, but long term it’s more a case of managing the decline.”

THERE IS A VERY STRONG RATIONALE FOR FOREIGN COMPANIES TO SAY, ‘IF WE HAVE TO ESTABLISH A REGIONAL CENTRE IN THIS TIME ZONE, LET’S DO IT IN A WAY THAT’S CHEAPER AND GO TO HONG KONG OR SINGAPORE’ JEREMY SUTTON HIBBERT

Then there is the difficulty that firms face attracting the best staff to Tokyo. Pete Millett, director of People Services International, a recruitment firm that operates in the finance and banking sphere in Japan, Hong Kong and Singapore, says Japan experienced an exodus of foreign human resources to Hong Kong, Singapore and other markets during the recent financial crisis. For a myriad reasons, he doubts most of that talent will want to return to Japan anytime soon. “The language barrier, strict visa policies, small apartments, excessive red tape, high taxes, and declining importance of the market globally are some core issues that currently make Japan less attractive than Singapore or Hong Kong to many foreign bank employees,” says Millett. “Remedying these issues is just a small part of the total solution needed by Japan to bounce back and to stay.” In defence of Tokyo, Atsushi Saito, president and CEO of the Tokyo Stock Exchange Group, says Tokyo’s true merits don’t necessarily show up in statistics, especially when compared to its Asian rivals. “People outside the industry tend to judge the competitiveness of stock exchanges in terms of trading value or volume; I’m more concerned by the real differences in quality between each trading venue,” says Saito. “How can you compare the real value of a company or society, where profit levels are low because they follow environmental policies and are concerned about the well-being of employees, with those where the opposite is true?” Tokyo can point to tangible progress in recent years. In June 2009, the Tokyo Stock Exchange and London Stock Exchange jointly launched Tokyo AIM. The market seeks to provide a new funding option for developing firms in Japan and the rest of Asia, as well as investment opportunities for professional investors from Japan and overseas. Tokyo AIM’s president and CEO, Tetsutaro Muraki, says he is optimistic that Japan can once again become the premier Asian hub, but admits there are obstacles to overcome, particularly a lack of English-speaking ability. AIM also allows companies to conduct their listing in English only, and in accordance with international accounting

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Atsushi Saito, Tokyo Stock Exchange Group

Philippe Avril, BNP Paribas – chairman of the EBC Banking Committee

April 2010

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Knocking on The EU Gateway Programme Text ALENA ECKELMANN Photos TONY MCNICOL

April 2010

FOCUS

What is the connection between an EU export promotion programme and Japan’s policy on climate change? More than you might think … Last year Prime Minister Yukio Hatoyama pledged to cut greenhouse gas emissions 25% to 1990s levels by 2020. Keen to assist this ambitious goal is a plethora of European small and medium-sized enterprises. So the timing was perfect when 41 European firms from 16 EU member states visited Japan this February. Under the umbrella of the EU Gateway Programme, the trade mission showcased construction technologies as well as environmental and energy technologies, two of six sectors promoted under the programme in Japan. Participants say they hope for real business opportunities from Hatoyama’s pledge. Thorsten Hickmann, CEO of Eisenhuth, a German maker of components for fuel cells, noted that their fuel cell business grew

10% in 2008. Meanwhile, their traditional business areas declined. “This reflects the overall trend in Europe,” says Hickmann. “Environmental technology is set to grow. It is a future industry. We believe that Japan and the rest of Asia have great potential as markets, and we are expecting some concrete moves by the government to reduce CO2 emissions soon.” The EU funded and managed Gateway Programme offers European firms logistic and financial help to develop business in Japan. At the core of the week-long missions are two-day trade shows that, together with pre-arranged meetings, allow European firms to meet a large number of potential Japanese business partners in a short period of time. Sometimes things move very quickly,

as Gerold Hacker, sales representative of RZ Holzindustrie, an Austrian firm in the wood business, can attest. Participating in his first mission in 2005, Hacker showed a homemade video of their Austrian production facilities to potential Japanese clients. To his surprise, he returned from Japan with orders for 10 containers of wood. “You need a little luck to meet the right people,” says Hacker. “The EU Gateway Programme is a great help in finding those people.” But sometimes more patience is needed. Vladimír Crhonek, sales manager at AGROP NOVA, has participated in four missions and is hoping for his first contract with a Japanese client. The Czech firm sells NOVATOP, a system of large glued and laminated wood components for the construction industry.

At first they came with the “wrong product,” he says. “Although our solid wood product was good quality, it was too expensive for the Japanese market and Japanese clients couldn’t find uses for it.” What’s more, Japanese industry standards only covered chipboard and plywood, not solid wood. Crhonek says they learnt a useful lesson and now offer a product of the same high quality, but better suited to the Japanese market and standards. Rudie Filon, counsellor, head of press, public and cultural affairs section for the Delegation of the European Union to Japan, is an old hand when it comes to EU Gateway. He saw the programme emerge from an idea in the mid-1980s and later managed the first round of Gateway in Japan. Since its official launch in 1994 the programme has come a long way, he says. “Some 2,750 European companies

have participated in 101 events attended by over 85,000 Japanese potential business partners,” says Filon with evident pride. Although, he also notes that there is no data on new business that the programme has

mind of the Japanese to quality. To put the EU flag on this kind of activity not only raises visibility, but it also automatically adds value. “Europe is a source of high-quality products, not just luxury goods but also industrial goods and technologies. This is what the EU Gateway brings to Japan.” Will the Hatoyama administration help bring more of those European goods to Japan? Filon is cautious. “We will have to judge Japan on what it does, and not on what it says,” he stresses. “Our message is this: we Europeans are ready to enter the Japanese market with technologies needed here. We are waiting for the doors to open.” For more information about the EU Gateway Programme, see www.eu-gateway.eu/ and to apply for participation in one of the EU Gateway Business missions see: www.eu-gateway.eu

Japan’s door Sectors covered by the programme CONSTRUCTION AND BUILDING TECHNOLOGIES HEALTHCARE AND MEDICAL TECHNOLOGIES ENVIRONMENT AND ENERGY-RELATED TECHNOLOGIES INFORMATION AND COMMUNICATION TECHNOLOGIES FASHION DESIGN INTERIOR DESIGN

facilitated. “We need to monitor this in the future to know what return we get on our investment.” One of the EU Gateway Programme’s strongest points is EU branding, Filon argues. “The EU is often linked in the

April 2010

Richard Collasse President and Representative Director of Chanel K.K., EBC Chairman 2002 to 2008

Interview and photo TONY MCNICOL

believe that Europe and Japan share a similar approach to capitalism. It is based on human beings, on respect for the individual. This shared holistic and humanistic approach is one reason we should strive to increase trade with an economic integration agreement (EIA). In the process, we can bring down some of the barriers that obstruct the exchange of goods, people, services and capital. We need an EIA. Take just one sector: the medical devices industry. Because of old fashioned rules that make the approval process incredibly slow, Japanese hospitals have devices that are one, two, or even three generations older than in Europe or the US.

April 2010

The process to approve a drug in Japan is incredibly tough. It is tough anywhere in the world; that’s fine, you are talking about the health of people, and it’s a matter of life or death sometimes. But it’s tough to a level that is unbelievable and unacceptable. And why can’t a doctor who has studied in this country practice in Europe? Or why can’t a European doctor practice in Japan? We are talking about very sophisticated countries. So why doesn’t an EIA happen? Because some industries don’t want it to happen. There’s a fear that tariffs would fall on both sides. But the problem is that Europe has more tariffs than Japan. The European automobile industry, for example, doesn’t want

those tariffs to fall. In essence, I think it’s one bloc of industry or another just refusing to allow competition. So we believe that an integration agreement can’t happen overnight; it will take many years. But why don’t we proceed step by step, starting with some industries that are more or less ready to talk? I believe that the pharmaceuticals industry could be one. The medical device industry could be another. There are lots of small ones. In fact, there can always be a tradeoff, and I’m sure even the automobile industry can benefit. It is really interesting that even within the automobile sector some European manufacturers think an EIA isn’t a bad idea because they believe more is to be gained than

TA L K I N G E U R O B I Z

lost from increased competition. Also, I’m not saying that the automobile industry should just drop tariffs unilaterally. There are non-tariff barriers here affecting them that we should discuss with the administration. Easy excuses Sometimes people talk about cultural differences, telling us that so-called nontariff barriers are differences in culture between Japan and Europe. That’s absolute nonsense, just a too easy excuse to avoid change. You know, a while ago they said that because Japanese people’s intestines were longer than those of Europeans, Japanese people couldn’t eat European meat. I’ve been in Japan for 38 years. I’ve been with Chanel for 25 years, a French consular for trade for 20 years, chairman of the French Chamber of Commerce for three years, and for seven years I was the chairman of the EBC. Things have changed in Japan and they haven’t changed. Now you can hire people who can speak good English or French, when it

was next to impossible before. You can get cheese; back then I had to smuggle it in. All these tall buildings in Ginza weren’t here when I arrived. We are lucky that Japan is still a very safe place, and services are still excellent. Japanese people will tell you that their country is not what it used to be. But it has changed less than the rest of the world. Business change? There are a lot of regulations that have been discussed for 30 years. Not much progress has been made. Now the DPJ actually seems more protectionist than the LDP. Koizumi tried to initiate change. I met him and he was a very interesting man, very open to discussion. But you can tell how inward looking the DPJ is. It is no secret that Japanese industry thinks the DPJ has no idea what business is. They just aren’t doing anything. I don’t think I will ever go back to France. Absolutely no thanks. But even when people say I’m very Japanese, I reply that I am very French in my way of thinking, and proud of what France has given the world. It is a beautiful country to visit.

WE NEED A NEW ALLIANCE BETWEEN EUROPE AND JAPAN My life is busy. Now I am writing my third novel. Finding time to do that and still spend time with my five children is a challenge; my eldest is 32 and youngest six years old. People ask me how I manage to write, and I usually tell them that I don’t play golf. You never ask people who play golf how they find time, do you? We live in interesting times. The world is changing very fast. New powers are rising: China, India, eventually Brazil. I think that Europe and Japan have to reassess their relationship. Today, everyone’s talking about the relationship between China and America. If we just keep on sitting on our backsides nothing will happen. We need a new alliance: an alliance between Europe and Japan.

April 2010

The Swedish Chamber of Commerce and Industry in Japan Kioicho Fukudaya Bldg., 6-12 Kioicho, Chiyoda-ku, Tokyo 102-0094 Tel: 03-5211-2101 • Fax: 03-5211-2102 E-mail: office@sccj.org

The SCCJ promotes Sweden-related business in Japan by supporting the Swedish business community and by creating a more favourable market environment for its Swedish, Japanese, and other member companies.

www.sccj.org

BOARD MEMBERS Chairman:

Carl-Gustav Eklund

Vice Chairman:

Ulf Nilsson and Yukio Yogo

Treasurer:

Kanichiro Hirata

Directors:

Carl-Gustav Eklund, Höganäs Japan Ulf Nilsson, Nobel Biocare Japan Fredrik Alatalo, Nippon Ericsson Anders Pentelius, Alfa Laval Magnus Wetter, Embassy of Sweden Mats Bruzæus, Garuda Japan Kanichiro Hirata, Swedbank Koh Tokuda Yukio Yogo, IKEA Japan

Selling to a frugal Japan “Sweden is a small country if you just look at the nine million population, yet we have very strong and diversified industry,” says Carl-Gustav Eklund. He points to world-leading Swedish companies in sectors that range from heavy industry to dental implants. “But we have three or four times the export dependency of Japan,” he adds. “We are a humble people who know that we have to export to survive.”

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April 2010

CHAMBER SPOTLIGHT

WE HAVE THREE OR FOUR TIMES THE EXPORT DEPENDENCY OF JAPAN. WE ARE A HUMBLE PEOPLE WHO KNOW THAT WE HAVE TO EXPORT TO SURVIVE” Carl-Gustav Eklund

Eklund is chairman of the Swedish Chamber of Commerce and Industry in Japan (SCCJ). Founded in 1992, the chamber has 140 members, including internationally known companies such as IKEA (home products), Electrolux (electrical appliances), Sandvik (engineering) and Ericsson (telecommunications). The chamber works closely with the Swedish embassy and trade organisations to promote investment. Last year they organised 24 events in which 1,400 people participated (see page 31 of this issue for a report on one event). The economic relationship between Sweden and Japan began a century ago with steel, wood and paper pulp exports. Later it shifted to technical engineering, pharmaceuticals, design, software and retail. Most recently, Swedish retailers such as IKEA and H&M have become household names in Japan. “The timing is very good now,”

Electrolux cooking appliances

explains Eklund. “Over the last decade Japan has turned into a frugal society. It’s popular to buy high-quality products at low cost.” Sweden’s positive image in Japan is thanks not only to such companies, but also to Sweden’s natural environment, sophisticated product design, and social system. “Since I first came here 30 years ago, Japanese people have been telling me how they envy the Swedish system,” says Eklund. Swedish ergonomics Some Japanese look to the way Sweden is dealing with its ageing society. Already, Sweden has managed to raise its birth rate through policies such as childcare and sexual equality in the workplace. Sweden has also turned its design expertise to products for the elderly, a potential business opportunity in Japan. “Japan has a lot to learn about

ergonomics in hospitals and elderly care,” says Eklund. But to succeed in Japan, Swedish companies need more than just image, namely, “a good product and patience,” says Eklund. A presence in Japan is also essential, i.e., a local subsidiary, not just a representative or distributor, he says. Without that, it is difficult to get the “true story” about the Japanese market. While it is easier for Swedish companies to enter the Japanese market than it was before, Eklund is disappointed at the “very slow” rate of change – something he views as more inertia than active attempts to obstruct foreign business. “There is much more that European companies can do in Japan,” says Eklund. “We hope that the EBC can be a strong force for deregulation. If we can reduce non-tariff barriers, there should be a win-win situation.” Like their Japanese counterparts, Swedish companies traditionally place a strong emphasis on long-term relationships, notes Eklund. “Both partners and customers in Japan look very carefully to see if a foreign company has a long-term commitment,” he says. “We are doing very well because we have many similarities with Japan.”

April 2010

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EVENTS

Upcoming events Belgian-Luxembourg Chamber of Commerce in Japan

Norwegian Chamber of Commerce in Japan

www.blccj.or.jp/

www.nccj.or.jp/

Breakfast meeting with H.E. Yves CSR seminar Leterme, prime minister of Belgium 7 April, Wed 8 April, Thu, 7:30-9:00 Venue: Hotel New Otani, Edo room. Nearest station: Akasakamitsuke Fee: ¥6,000 (members), ¥8,000 (non-members) Contact: info@blccj.or.jp

Venue: The Royal Norwegian Embassy, Nearest station: Hiroo Contact: Stein Saugnes, 090-2936-6491

Finnish Chamber of Commerce in Japan

17 & 18 April Venue: Enoshima, Kanagawa prefecture Contact: Stein Saugnes, 090-2936-6491

www.fcc.or.jp/

Luncheon Meeting: The Finnish Institute in Japan / HIRAMEKI Design Exhibition 20 May, Thu, 12:00-14:00 Venue: Hotel Okura Fee: ¥6,000 Contact: fccj@gol.com

German Chamber of Commerce and Industry in Japan www.japan.ahk.de/en/home/index.html

Luncheon Meeting: “Coaching and Mentoring the Sales Manager” 20 April, Tue, 12:00-14:00 Speaker: Ziya Muhamedcani, Madison Company Venue: Hotel Okura Tokyo, Kensington Terrace, South Wing 12F Fee: ¥7,000 (members) invoiced after the event Contact: events@dihkj.or.jp by 13 April

Norway-Japan Friendship Yacht Race in Enoshima

Swiss Chamber of Commerce and Industry in Japan www.sccij.jp/

APRIL S

MAY S

Luncheon at Hotel Okura 16 April, Fri, 12:00-14:00 Speaker: Loic Rethore, Nestlé Nespresso Japan Venue: Hotel Okura Tokyo, Kensington Terrace Fee: ¥8,000 Contact: sccij@gol.com

May Luncheon “Coaching: a must for managers”

S 1

13 May, Thu, 12:00-14:00 Speaker: Philippe Grall, Executive Coaching and Trainer, Equilibre K.K. Venue: Hotel Okura Tokyo, Kensington Terrace Fee: ¥8,000 Contact: sccij@gol.com

EU-Japan Centre for Industrial Cooperation www.eu-japan.gr.jp/english/

Italian Chamber of Commerce in Japan www.iccj.or.jp/

J-BILAT 1st Seminar

Networking: Aperitivo della Camera*

Launch of the J-BILAT project for the promotion of EU-Japan partnership in S&T* joint research projects

15 April, Thu, from 19:00 Venue: Via Quadronno (VQ – Aoyama) Fee: Free (members), ¥1,000 (non-members); cash bar (¥500/drink) Contact: iccj@iccj.or.jp

14 April, 14:00-20:00 (registration 13:30-) Venue: Akihabara UDX Gallery, 4F Fee: Free, but advance registration required. Contact: Toshiyasu Ichioka, J-BILAT project manager, toshiyasu.ichioka@eu-japan.gr.jp

*light buffet included

* scientific & technological

April 2010

â&#x20AC;&#x153;Please

â&#x20AC;? let us in! 26

April 2010

Shinichi Yokoyama, co-chairman of the Nippon Keidanren Committee on Europe, tells Martin Foster why his organisation wants an economic integration agreement with the EU Photo ALFIE GOODRICH

Q&A

WHAT CAN WE LEARN FROM THE EU? IN A WORD, STANDARDISATION Progress on an economic integration agreement (EIA) between the European Union and Japan is lagging. What is the Keidanren doing to speed things up?

Foreign direct investment into Japan has sunk to one of the lowest in the OECD. What should Japan be doing to increase investment from Europe?

The Keidanren has made several proposals. The EU response to the first one in 2007 was negative to the point of being a flat refusal! One reason for this was tariffs. Japan places no tariffs on industrial products, while the EU has a 14% import duty on electrical products and 10% on automobiles. From the standpoint of the EU, there was no need to negotiate on tariffs, or enter into an EIA. A further proposal was made in April 2009, and the EBC welcomed the Keidanren’s call for an EU-Japan economic integration agreement immediately. The Keidanren was impressed by what Chairman Tommy Kullberg said, namely, “extending the four freedoms of goods, services, people and capital between the EU and Japan promises to bring many benefits of the European single market to Japan, spurring competition to the benefit of industry and consumers alike.” The Keidanren also seeks to deliver consumer convenience, and we can take coordinated action with the EBC. The third one was issued in November 2009, calling upon the government of Japan, the European Commission and the EU member states to start negotiations on an EIA as soon as possible. This year, as leader of the Keidanren mission, I am planning to visit the commission and the EU countries to convey how we are enthusiastic about an EIA.

EU representatives tell us that non-tariff barriers are still high, or that there are too many regulations. I feel there is some misunderstanding at work here. One factor is culture. The roots of Japanese and Western culture are different, but I feel there is a tendency to classify this difference as an obstacle. Overcoming cultural differences requires a lot of hard work, but it is important to make the effort to understand and overcome these differences.

The EU provisionally signed a free trade agreement with South Korea in October 2009. As a result, South Korean businesses may soon enjoy better access to European markets. What can Japan do to maintain the EU-Japan economic relationship in the face of closer bilateral relationships between Europe and other regions? The FTA between the EU and South Korea is a damaging blow to the Japanese economy. The FTA puts Japan at an outright disadvantage on the tariff front, and threatens to rob Japan of its competitiveness. It is imperative that Japan and the EU enter into negotiations. The situation has become so serious that the only solution is an EIA.

Efforts to combat global warming are in the spotlight. How would an EIA affect environmental issues? I believe the EU and Japan can cooperate on environmental issues. The EU and Japan possess superior environmental technology, and the EU has a well-developed awareness of environmental issues. The EU is leading the world in global CO2 reduction efforts. Japan survived the oil shocks, and made major advances in technological development while conserving resources and reducing energy consumption. We can be proud that Japanese technology stands alongside that of the EU, and is top-class when it comes to cutting CO2 emissions. If our two regions enter into an EIA, we will be able to set global standards for environmental technology among other things. We believe that the reduction of tariffs on environment-friendly goods should be incorporated in the EIA. How can Japan maintain its position in the global economy, and what can Japan learn from the European example? Japan was originally an under-developed economy that took off in the post-war period thanks to hard work, and the adoption of Western economic liberalism. Once an economy takes off in this way, it tends to expand to the level of more advanced nations. China and India have now taken off, and will continue to grow until they, too, have caught up. Japan needs to absorb the dynamism of those emerging economies in order to grow. At the same time, we can support them through technology transfer and so on. Such efforts will enable Japan and emerging economies to develop together. What can we learn from the EU? In a word, standardisation. The EU has brought together 27 countries, under the same treaty, and signed the Treaty of Lisbon. That is an achievement based on a kind of standardisation. Bringing together 27 nations, with different cultures and races, is a miracle. I believe this is something we should learn from the EU. An EIA would be one form of participation in this process, and what I want to say is, “Please let us in!”

April 2010

Warming to central heating Dimplex Japan Text TY HOLLAND

Bringing white goods to electronics powerhouse Japan must have been a daunting prospect, even for Irelandâ&#x20AC;&#x2122;s Glen Dimplex Group, the largest electrical heating company in the world. Equally daunting was the task set by its subsidiary, Dimplex Japan: convince local consumers to replace an array of heating devices and electric carpets with a single appliance. 28

April 2010

I N V E ST I N G I N J A PA N

The company is positioning its heating system as an alternative to portable electrical devices or wall-mounted air-conditioner-cum-heater units. “We don’t have central heating systems or anything like that in Japan, so we have to educate consumers,” says Kasama. A typical Dimplex heating system comprises a heat-storage unit, panelheating units for the bedrooms, a heat pump with electric boiler to distribute

reach customers via homebuilders and housing manufacturers who included the heat-storage units as part of home sales packages. The arrangement also fit Panasonic’s needs. “Their group manufacturers don’t have this product. But they need our heat-storage units to promote allelectric concept homes in Japan,” says Kasama.

DIMPLEX JAPAN’S PARTNERSHIP WITH THE PANASONIC GROUP HAS BEEN KEY Seiji Kasama, CEO of Dimplex Japan

DIMPLEX JAPAN

he problem: why just heat the air around you when you can keep an entire room toasty? The answer: an electric heatstorage unit. The device consumes electricity overnight when rates are cheapest, storing the energy in specially formulated bricks for the next day. “It’s a 24-hour heating system. So that means the fabric of the home — the walls, floors and ceiling — gets heated well,” says Seiji Kasama, CEO of Dimplex Japan since April 2006. “You can enjoy the same heat as if going outside in the sunshine.” Kasama started selling Dimplex products 13 years ago in Hokkaido with distribution agent Globally, a subsidiary of homebuilder Matsumoto Kenko. In 2004, the Glen Dimplex Group established its first Japan office as a joint venture with Globally. Then in 2007, it assumed 100% ownership, retaining Kasama to head operations. Dimplex’s main product, the electric heat-storage unit, can be up to 1.5 meters wide, 67 cm high and 25 cm deep, and is a serious space investment for the average Japanese home. But over the years, Kasama has seen a gradual shift in customers’ attitudes. “When I started to sell those products in the north of Honshu, people asked, ‘How come we need to install such huge heating appliances?’ But now people have definitely accepted them, even in Kyushu in southern Japan,” says Kasama. Dimplex Japan’s partnership since 1997 with the Panasonic group has been key. Its heat-storage units cost ¥500,000 when installed – not the type of product customers will normally order from a catalogue. Thanks to Panasonic, Dimplex Japan was able to

Dimplex has earned a 40% market share of such heating units in Japan. However, with 25% of their total sales in Hokkaido, and 70% of total sales heat-storage units, the company knows it must diversify. “This is our biggest challenge at the moment,” says Nobuhiro Asai, Dimplex Japan’s director of business development. He explains that the overall market for heat-storage units will shrink in coming years due to a push toward more energy-efficient products. “If we continue at our current level with the current products, even with a 70% market share in three years our turnover will be the same,” he says. “So to survive and develop, we need more than that.”

the energy in water form, and a piping system to connect it all together. This year is crucial for the company, says Asai. The company is conducting feasibility studies in Hokkaido, with plans to launch a full-scale field test on heating systems there next winter. “Next year will be the time to reap the fruits of our labour,” says Asai. “Last year at this time the economy was very difficult and people’s minds shrank. But this year people are thinking more positively. And with the new government in power, more attention is being paid to environmental and global-warming issues.” Dimplex Japan hopes to tap current sentiment with environmentally friendlier products. For example, the electric heat pump, of which the Glen Dimplex Group is Europe’s largest producer, takes heat from air, water or ground sources and outputs four times the energy it consumes. “Global warming concerns will be a big chance for us,” says Asai.

April 2010

Get involved Some 300 of the over 2,500 aďŹ&#x192;liated local European companies and individuals participate directly in one or more of the EBCâ&#x20AC;&#x2122;s 29 industry committees covering a wide variety of economic sectors.

COMMITTEES Aeronautics,

Space & Defence Airlines Animal Asset

Liquor Logistics

Health

Management

Automobiles Automotive

Components

Banking Business

Aviation

Media

& Communications

Medical

Diagnostics

Medical

Equipment

Organic

Products

Patents,

Trademarks & Licences

Construction

Railway

Cosmetics

Retail

Environmental

Shipping

Technology Food Human

Resources

Insurance Legal

& Freight

Materials

Services

Tax Telecommunication

Carriers Telecommunication

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

EVENT REPORT

Getting ready to grow Growth Strategies for Small and Medium-sized Companies in Japan 9 March 2010, Embassy of Sweden Text and photo KAI KUROSAWA The recent recession has hit Japan’s small and medium-sized enterprises hard. But attendees at the Swedish Chamber of Commerce and Industry in Japan’s recent Knowledge Evening also heard how three companies have not only survived the downturn, but set the stage for growth too. Fujio Ota, president and CEO of Tumlare, said that investing in his employees has paid dividends. “Once outside conditions improve, employees function as the driving force, bringing about the smooth recovery of business,” he said. Tumlare is a European tour operator with 65% of the Japanese tour market to Scandinavia. Ota knew he had to cut costs to survive, but he found an alternative to culling his workforce. The results were astounding. The plan reduced costs by ¥1 million per employee. “Many companies cut their training budget in severe times,” said Ota, “but we did the opposite – we invested in training.” His sales team gained the skills to negotiate with suppliers, using empathy and understanding to help them close deals. “Of course some suppliers are tired [of negotiation],” he said, “but in exchange for short-term concessions, our salespeople offer long-term business.” Ota joined the training sessions and attended staff meetings at all levels, while dipping into his own pocket to pay for

L-R: Jacob Laurin of Smoke Free Systems, Takeshi Fujiwara of Gambro and Fujio Ota of Tumlare

company events. “Success for the company was no longer about me,” he said, “but about us.” Jacob Laurin, Japan country manager of Sweden’s Smoke Free Systems, which sells innovative open-design smoking cabins, likes to keep things simple. With a staff of just four, he sells a single product, and outsources much of his work to local partners. “We don’t want to build up huge sales organisations; we want to give our partners tools for service and installation,” he said. This has made operating in Japan easier, especially at a time when the SUCCESS FOR THE Japanese yen – Swedish COMPANY WAS NO krona exchange rate went “a little haywire.” LONGER ABOUT ME, With limited financial BUT ABOUT US resources, Laurin doesn’t Fujio Ota, Tumlare advertise his product, and instead approaches customers directly. Being a small, little known company certainly doesn’t help. “You have to be a sales person that sells the opportunity for the meeting, not the product,” he said. Like Ota and Laurin, Takeshi Fujiwara, president of medical equipment manufacturer Gambro K.K., stressed that capable staff were essential. “I must have a team who can make it happen,” he said. Fujiwara, however, has no qualms about weeding out unproductive employees. In 2006, he replaced 80% of management. His smaller team focused on a single product, resulting in a 40% increase in sales. Gambro also revamped its sales system. “We need a good weapon,” said Fujiwara. All employees have access to an internal database of medical information, while the sales team is updated daily on any new developments. Customers were sorted into categories and plotted on Google maps, allowing sales members to make a maximum 80 calls per month. April 2010

Logistics and Freight//

Getting things moving Text GEOFF BOTTING

orking for a parceldelivery company in Tokyo requires expert driving skills, the ability to pinpoint locations quickly, and a keen insight into the psychology of traffic wardens. Drivers without the third capability can end up costing their employers dearly. As a former logistics consultant explains: “When the driver of a truck is double-parked and about to make a delivery, he’ll use a felt pen and a piece of cardboard or something to write ‘Now doing a delivery’ to avoid having the parking warden give him a ticket. “The driver doesn’t use a nicely printed sign, because that would show that he double-parks on a regular basis. And the handwriting makes the warden realise that he’s dealing with a hard-working person like himself.” Trucks with two drivers, meanwhile, play another type of game with the 32

April 2010

parking enforcers, who also work in pairs. “One guy will run into the building to make his delivery while the other will be sitting in the vehicle ready to come up with excuses for the guys in green,” says the ex-consultant, referring to the colour of parking wardens’ uniforms. “ ‘Oh, my partner will be out in a minute,’ he’ll say, with a sense of urgency. But if the warden sees that the truck is still there 10 minutes later, then the driver needs to make a follow-up excuse, like, ‘I just called him on my mobile a second ago, and he said he was coming out now.’ ” When all excuses fail, the vehicle is ticketed and the fine borne by the drivers’ employer. This game of cat and mouse may seem amusing, but it also illustrates a broader problem that the EBC Logistics and Freight Committee takes very seriously. At issue is the discriminatory treatment private parcel and express companies endure in relation to Express

Mail Service (EMS), the parcel delivery service of the privatised Japan Post. Although EMS is now in direct competition with the likes of DHL and TNT, Japan’s armies of traffic wardens still view the post office as part of a public service. Hence, they’re willing to look the other way when the red postal trucks double park, despite chasing after EMS’s competitors. The Committee claims that EMS enjoys a raft of other privileges thanks to its legacy status. For instance, EMS packages are subject to customs declaration only on goods valued over ¥200,000, considerably higher than the level for the private-sector competitors. The situation has created an uneven playing field in a highly competitive industry. Due to the parking problem, many companies are forced to employ extra drivers with well-honed diplomatic skills, or otherwise pay an endless stream of parking fines. “EMS certainly gets preferential treatment,” says Donald McGarva,

IN COMMITTEE

committee chairman and senior vicepresident of DHL Supply Chain, for North Asia. “That’s given us additional costs, no doubt about that … and it creates issues all the way through the supply chain.” McGarva says the committee is in the process of compiling evidence on unfair parking enforcement. The figures are to be handed over to the Ministry of Land, Infrastructure, Transport and Tourism (MLIT), as part of the committee’s advocacy efforts. A separate issue for the committee is a legal ban on foreign freight forwarders participating in Japan’s domestic air-freight forwarding business. Andreas Behnke, Japan country manager for Panalpina World Transport (Japan), says, “This basically means that we’re forced to rely on our competitors to move cargo domestically by air. As you would imagine, being forced to rely on your competitors is not a great situation to be in.”

DUE TO THE PARKING PROBLEM, MANY PRIVATE COMPANIES ARE FORCED TO EMPLOY EXTRA DRIVERS WITH WELLHONED DIPLOMATIC SKILLS, OR OTHERWISE PAY AN ENDLESS STREAM OF PARKING FINES

Behnke, whose Swiss-based company is a global freight forwarder, says the regulation banning foreigners from that segment of the forwarding industry has no rationale whatsoever. Then there’s the issue of customs clearance. As the 2009 EBC White Paper points out, the minimum value

for imported shipments subject to duties is ¥10,000, a level the committee views as too low. In EU member states, by comparison, the figure is €150 (approximately ¥18,000). These were among the issues that McGarva, along with his counterparts from the EBC committees of Automobile, Airlines and Railways, raised directly with the Japanese Government. The EBC delegation met with Mr. Seiichi Ohkuchi, the viceminister for international affairs of the Ministry of Land, Infrastructure, Transport and Tourism in the ministry’s building on 16 February. “The challenge is not just speaking up for European companies. I think it’s really about making sure Japan has a competitive landscape domestically that will benefit Japanese companies as well,” says McGarva, whose committee comprises eight member companies. “That, in the end, will be good for Japan and Japanese consumers.” April 2010

April 2010

CHRISTOPHER THOMAS

GREEN BIZ

Ready, Teddy, Throw EDING:POST Text CHRISTOPHER S THOMAS

nyone who knows Japan knows that, in Japan, cute cannot fail. So why not harness this fundamental fact of marketing to get people involved with recycling and raise environmental awareness? Tomohiro Kato, art director at design firm Eding:post, has been thinking about that very subject. “If people can pick up garbage with a nicely designed bag, it’s more fun, and they feel better about participating,” he says. Kato has come up with a new kind of garbage bag, the Popet. The concept is elegantly simple. Popet (short for polyethylene pet) is a bear-shaped bag that comes in a handy chewing gum-size case, and is made in a factory that also produces official Tokyo government dioxin-free garbage bags. At 39.3x57.3cm, with a volume of only two litres, the bag is intentionally small; the idea is that with such a small space to fill, one is more inclined to think about what is going into the bag, and might choose to reduce garbage instead.

It also comes with a story. “Popet is a bear who grows by eating garbage,” explains Kato. “If you put unnecessary things in, he might get sick. Therefore, what’s good for Popet is good for the environment.”

WE HOPE THAT, IF PEOPLE CONNECT WITH THE BAG, THEY MAY THINK ABOUT WHAT THEY PUT INTO IT AS WELL Tomohiro Kato, Eding:post

Popet has turned into a small but significant hit for Eding:post. Buzz is gradually building, and retailers are reporting positive comments, including plenty of excited cries of “kawaii!” (cute!) – music to any marketer’s ears.

The bags are being sold through design, souvenir and museum shops, as well as convenience stores all over Japan. A Winnie the Pooh version will be available soon, and Kato has inked a deal with a distributor in Singapore. He showed the product at Copenhagen Fashion Week in summer 2009, and the product is now being sold at both Hay and WOOD WOOD shops in Copenhagen. As of February, sales had topped 40,000 units; at ¥180 a pop, not huge, but respectable for this kind of product. But more importantly, Popet is doing its job, helping open people’s eyes to garbage bags, and therefore to garbage as well. “We hope that, if people connect with the bag, they may think about what they put into it as well,” says Kato. “Ordinarily, garbage bags are sold through supermarkets and hardware stores. Now, with Popet, they are being sold in stylish stores, and other places that normally do not sell such things,” notes Kato. “This, I hope, will help boost green awareness.” April 2010

Whoâ&#x20AC;&#x2122;s Who

Real Estate and Property Services in Japan

April 2010

ollowing the Lehman collapse in September 2008, the credit crunch commenced and, at the same time, banks began hoarding capital. The real estate investment sector also suffered. As a result, throughout 2009 the industry struggled as capital was not made available and cheap properties were acquisitioned – making the year very tough for the industry. The previous “Heisei Bubble” was different. Back then, the bad debts of the megabanks were not being put out on the open market for bidding, but rather were being held within their own conglomerate’s debt collection agency. As a result, the banks were allowed to successfully bid on their own bad debt, making bank portfolios appear stronger than they actually were. Once the foreign investment vehicles started to feel the squeeze back in their home countries, they commenced hoarding capital and sending home more money out of Japan. The Tokyo market experienced long-term prime interest transitioned to a 3-5% capped rate, and in October 2009 the REIT index rose from a 700-point level to 850 points. Large corporate investment bodies made a successful public offering for ¥100 trillion which enabled them to firmly prop up real estate earnings. In regards to residential housing, despite government policy and tax system breaks which would allow for ease of purchase, demand expectations actually fell to just under 800,000 new construction projects, a decrease of 250,000. After the Heisei Bubble, first-time acquirers of residential locations such as in the so-called exclusive residential districts of Azabu,

Aoyama, and other sectors inside the Yamanote Line also remained. But after this mini-bubble, Meguro and Setagaya residential districts saw their values rise as well. If you were to take a look at someone who saw the peak of the bubble and someone else who was brought up in the midst of the subsequent recession, the differences in dwelling would be stark. The recession ushered in very conservative young residents. They didn’t need a car; the train was fine. Interiors of homes were modern but simple, and many of these new homeowners tended to construct housing very close to their parents’ homes. Entering into 2010, it is safe to assume that the trends of the preceding fiscal year will most likely accelerate. There is a feeling in the real estate world, for example, that things have bottomed out. The reasons for such an outlook include (1) banks will have more money to lend; (2) the Bank of Japan’s lending will expand; (3) due to the attraction of a cheap yen, stock prices will rise from foreign investment; (4) financial institutional lending will improve thanks to low interest rates being maintained; and (5) the government-backed guarantee of debt held by corporate investment bodies. As a result, we will most likely see, after June of this year, an increase in the values of large apartments and also a greater flow of new large apartment sites into the real estate market. However, the elimination of rapid-growth market players has ended. Now, developers and new stock regulations have everyone waiting, keeping an eye out for fresh, young investment opportunities.

Who’s Who // Real Estate and Property Services

Investment Opportunities

The real estate industry is looking up.

Katsuhiko Yama President, Atomic Asset Advisers Co., Ltd.

This is the time for embracing new investment regulations, and having a knowledgeable partner

The upward trend of this new real estate sector will not be lost. This is the time for embracing new investment regulations, and having a knowledgeable partner. Again, the borrowing ratios of banks will most likely fall, and reliable equity guarantees and close scrutiny of available market information proceed. We should all sharpen our investment minds. April 2010

Who’s Who // Real Estate and Property Services

Building in Japan

rchitecture in Japan is a broad canvas. A great deal of history – and a legacy of craftsmanship – is behind the formidable engineering and the highly regarded aesthetic sensibility driving the reputation today. Japanese architects have designed for Armani and Dior, and several of the world’s leading art institutions. Kenzo Tange, Fumihiko Maki, Tadao Ando and just this March, Kazuyo Sejima and Ryue Nishizawa have been awarded the prestigious Pritzker Architecture Prize. One irony of Japan’s high-end design output is that it is mostly achieved through the smaller atelier-type design offices. The big, all-inclusive general contractors are very competent at the macro scale of multistory and infrastructural projects in which they specialize. Yet, the really exquisite, tailored, small to mid-scale projects are almost exclusively the domain of the design-driven atelier offices. The more famous atelier offices in Japan – like elsewhere in the world – are infamous for ‘eating their young’. They attract many of the best graduates from the best schools (and more than a few from the West), who then work diabolical hours for survival wages. Through this system, these atelier offices are able to devote huge amounts of hours to labour-intensive prototyping and presentation. Almost every undertaking is a research project where the young staff gain remarkable experience in return for their durability. Atelier offices are often untidy and chaotic as various alternatives are being worked and re-worked. But the final results are highly sophisticated conclusions to a strenuously wrought design protocol. The main strategy remains research and development. The main objective is remarkable, sculptural creations called buildings. On the other hand, general contractors and ‘homebuilder’ companies are very much commercial enterprises consisting of marketing specialists and financial controllers, and involving long-fostered complex business relationships. The better companies also attract the better graduates, those preferring stability and regularity. The companies are certainly good at what they do – in the same way that successful chain retailers Uniqlo or Seven-Eleven are, though their emphasis can be quite different. Having developed a successful methodology, GCs and homebuilder companies like to stay within their comfort zones. They tend to be cautious about new systems, methods and ideas. They have a diverse and emminently charming array of strategies that avoid stepping out of their

April 2010

Small atelier design oﬃces and big general contractors established zones. They are business machines and their medium is construction. Their main strategies are marketing and ‘service’. Many people are very comfortable working with this kind of company. But perhaps the most important commercial consideration for a prospective client is transparency. The ateliers operate as architecture-only offices and, as such, are firstly their clients’ representative. Their only income is from the client, to whom all costs and decisions are presented. In particular, the tender process remains a key element in delivering best-cost performance. The tender documents from each contractor are substantial (typically 40 to 80 pages on just a single residential project). When three to four documents are compared, it becomes very clear what the cost of a building project should be. Also, by cross-referencing, further economies can be realized. All this information is made directly available to the client by atelier offices.

In particular, the tender process remains a key element in delivering best-cost performance. Many, if not all, general contractors and homebuilders price their projects in-house. They rely on their own construction department or established working relationships with trusted subcontractors to satisfy their clients. But for the client, such pricing can offer little clarity as to genuine market costs and margins. On the other hand, of course, there is the ease that comes from having a single company directly responsible for everything. Clearly, there are good points for each approach. As the market becomes more informed about design, price and quality control, however, it is likely that more people will take advantage of the flexibility and transparency of architectdriven building projects.

Peter Boronski atelier BORONSKI

Who’s Who // Real Estate and Property Services

atelier BORONSKI

241-21 Hozui-cho, Shichihonmatsu-nishiiru, Shimochojamachi-dori, Kamigyo-ku, Kyoto 602-8357

Special Features/Facilities Thinking outside the square? How about living outside the square? Atelier BORONSKI is an award-winning design office based in Kyoto, led by a New Zealand-born architect educated in Japan. With Western and Japanese staff, we design, project manage and hand over designdriven and cost-effective projects that are intimately tailored to our clients’ circumstances and expectations, across Japan. Our involvement often begins early with discussion regarding suitability and confirmation of regulatory issues prior to site purchase. Through extensive dialogue and multiple review stages, the finished design emerges. The tender process ensures the most competitive price, and construction surveillance ensures the work is carried out as specified. Over the years a diverse range of projects has been completed and a significant body of professional expertise has been developed. By incorporating the fundamentals of durability, insulation, day-lighting and cost control into poetic and forward-looking design solutions, we expect to exceed client expectations – upon hand over and through the years ahead. As a client’s representative, our objective is the best building for the best price, built as specified. Inquiries: Peter Boronski Tel: 075-464-4457 Email: lets-talk@atelier-boronski.com Website: www.atelier-boronski.com/ April 2010

Who’s Who // Real Estate and Property Services

Coldwell Banker Aoyama

Special Features/Facilities Flat Midorigaoka 304 Flat Midorigaoka 304 provides hotel amenities and private-home quality. A fully furnished, comfortable living space equipped with all the necessities, including bilingual staff to make visitors from overseas feel at home. Room Type: 2 Bedroom Service Apartment Ebisu Service Apartment Ebisu provides hotel amenities and private-home quality. A fully furnished, comfortable living space equipped with all the necessities, including bilingual staff to make visitors from overseas feel at home. Type: 1 Studio • 1 Bedroom 36.512-64.632 – Monthly Rent: ¥369,000-619,000 2 Bedroom: 88.962-98.292 – Monthly Rent: ¥708,000-888,000 Service Office Kioicho Concierge helps you find out location of a company anywhere in Japan. Service Office Kioicho is a 3-min walk to Nagatacho Station, defining superior convenience to Tokyo’s business districts Also, conference rooms available for rent. Monthly Rent: ¥88,000 Common Service Fee: ¥21,000 *Admission fee and security deposit are not included. Inquiries: Atomic Asset Advisers Co. Ltd. Minamiaoyama NS Bldg. 6F, 2-27-20 Minamiaoyama, Minato-ku, Tokyo 107-0062 Tel: 03-5411-5455 Fax: 03-5411-5456 www.cbj-tokyo.com

April 2010

Who’s Who // Real Estate and Property Services

Pacific Royal Court Minato Mirai

Special Features/Facilities > > > > > > >

Size Range of Units: 38.98sm - 147.43sm Bedrooms: studio - 3LDK Parking Facilities: ¥26,250-28,350 Monthy Rental: ¥105,000-790,000 Management Fee: ¥12,000-39,000 Facilities: Fitness Room, Sky Lounge, Guest Room, Lounge Individual Equipment: Flat TV in Living room (all units), Garbage disposal; From 25F: Dishwasher, Washer/Dryer, Oven, Refrigerator > 7-min walk from Shintakashima Station, 15-min walk from Yokohama Station > Lease term: 2-yr fixed contract The spatial concept underpinning Pacific Royal Court Minato Mirai is to provide a space where the healing of nature can be felt in an urban area. The sun-drenched wide-open space is perfectly counterbalanced by the contrast of blue sea and sky seen from the windows. There, the comfortable air and gentle spirit of the place allow you to forget the noise of the city. 5-3-2 Minatomirai Nishi-ku, Yokohama (Ocean Tower) 5-3-3 Minatomirai Nishi-ku, Yokohama (Urban Tower) Inquiries: Ken Corporation Yokohama Tel: 045-650-7895 Fax: 045-650-7891 Email: yoko-br@kencorp.co.jp www.kencorp.com/yokohama April 2010

Who’s Who // Real Estate and Property Services

EPC

Europe Promotion Center Co., Ltd. Prime Bldg. 8F, 2-13 Hayabusa-cho, Chiyoda-ku, Tokyo 102-0092

Special Features/Facilities EPC offers our clients sophisticated and comprehensive real estate consulting services by coordinating with our affiliate architecture and design company, S’ International Architects Co., Ltd. and our construction management affiliate company, Enterprise Co., Ltd. We achieve clients’ goals by focusing on their needs and delivering a quality project, on time and within budget. EPC provides a wide range of property services to our clients individually or as a mix & match package: - Real estate strategy consulting asset management, facilities management and property management - Acquisition support (introduction of investment opportunity, investment analysis, development of investment strategy, and preparation and execution for investment) - Brokerage and representation for sales and lease of real estate - Sublease management services - Due diligence (legal, land, building, and environment) Company Information: Founding: November 28, 1997 Capital Stock: ¥95,000,000 License and Registration: Real Estate License / Tokyo (1) #85751, and Investment Advisor and Agency / Kanto Finance Bureau #2078 Contact: N. Masuda, Europe Promotion Center Co., Ltd. Tel: 03-3239-9248 Fax: 03-3221-6960 Email: info@e-p-c.co.jp

April 2010

Who’s Who // Real Estate and Property Services

www.japanhomesearch.com

2F EXOS Ebisu Bldg., 1-24-14 Ebisu, Shinuya-ku Tokyo 150-0013

Special Features/Facilities Japan Home Search is a comprehensive property search engine targeted specifically at expatriates relocating to Japan. This popular site lists thousands of rental properties for a real-time snapshot of what is available on the market today. The site also features the “Pin Pointer” tool, which allows visitors to zoom in on the areas surrounding potential properties. Powering this website, our team prides itself on promptly answering all enquiries, and strives to find properties that meet each individual client’s needs. Anyone can find a house - with Japan Home Search you can find a home! Japan Home Search is also part of The H&R Group. The H&R Group offers complete coordination of any move to Japan, with support targeting not only the assignees and their families, but also the companies for which they work. Personalized and reliable service, clear communication, and cost-effective service programs set us apart as the leaders in Japan’s relocation industry. H&R Consultants Tel: 03-5449-6061 Fax: 03-5449-3267 Email: InfoRequest@morethanrelo.com http://www.MoreThanRelo.com

April 2010

Whoâ&#x20AC;&#x2122;s Who // Real Estate and Property Services

Minatomirai Grand Central Tower 4-6-2 Minatomirai, Nishi-ku, Yokohama, Kanagawa

Special Features/Facilities In the summer of 2011, the Minatomirai Grand Central Tower will be the newest addition to this admired urban project. > Office Efficiency In addition to improving space-usage efficiency, office consolidations also improve communications within the floor. > High Environmental Performance The building has obtained an S rank, the highest available under the CASBEE environmental performance evaluation. Due to its using the latest office specifications, as well as being environmentally friendly, it also achieves low-energy consumption. > Disaster Prevention Features bring Peace of Mind In addition to the disaster-protection functions of the whole town, tenantsâ&#x20AC;&#x2122; businesses are protected from disasters by office features such as a high level of earthquake resistance and electrical blackout countermeasures. > Very convenient access to global market through Haneda International Airport Inquiries: Y. Itani, Marubeni Corporation 1-4-2 Ohtemachi, Chiyoda-ku, Tokyo 100-8088 Tel: 03-3282-4176 Fax: 03-3282-7014 Email: mm-gct@cbre.co.jp www.mm-gct.com/english

April 2010

Who’s Who // Real Estate and Property Services

CR Kamiyacho

1-11-9 Azabudai, Minato-ku, Tokyo 106-0041

Special Features/Facilities > > > > > > > > > > > >

3-min walk from Tokyo Metro Kamiyacho Station Few minutes from the Tokyo American Club (re-opening 2011) Good view of Tokyo Tower High-efficiency floor layout Individually controlled air-conditioning Quiet entrance lobby 50mm-raised floor system 2.55m ceiling heights Mechanical car parking available Size: 170m2 − 830m2 State-of-the-art security system Additional incentives available – please enquire

Inquiries: Christian Mancini, Savills Japan Co., Ltd. Aoba Roppongi Bldg. 3F, 3-16-33 Roppongi, Minato-ku, Tokyo 106-0032 Tel: 03-5562-1700 Fax: 03-5562-1705 Email: cmancini@savills.co.jp www.savills.com

April 2010

EXECUTIVE NOTES

The worst is behind us And a peculiar new economic model Well, the worst is over – but have people realized? Punch-drunk from bad news, it’s easy to overlook change. The latest economic figures show that the danger of a double-dip recession is receding. Add to that the prospect of the governing Democratic Party of Japan consolidating its hold on power in the summer upper house elections, and you have some grounds for optimism. Let’s look at the macro figures. True, there was some upset about the GDP revision in the fourth quarter, reducing quarter-on-quarter growth from 1.4% to 0.9%. But the catastrophic decline which set in during the first quarter of 2009, and which continued for most of the year, has been halted. The scene is now set for some positive growth, even if it is modest (The Economist Intelligence Unit, the research arm of The Economist Group, expects 1.3% growth in 2010). The apocalyptic scenario has been averted. It is noticeable how traditional the Japanese recovery has been, evidence of the huge challenge facing the DPJ. Once more, it’s the export sector that has dragged Japan out of its funk; up 45% in February compared with the same month a year ago. In a sense, that’s perfectly normal: the global market is far larger than the domestic market, so any recovery there will have a large swing effect on Japan’s growth rates. But the domestic (excluding the stimulus package) market is not even keeping up with the recovery in the export market. What economists call a “selfsustaining recovery” is still hard to find. By this, they mean a recovery which sees top-line growth feed into more jobs and higher salaries, which in turn triggers a consumption boom, helping those sectors of the economy that don’t

depend on exports – often the service sector and the construction sector, and other non-manufacturing areas. Much of this domestic malaise has been blamed on deflation. As I mentioned in my last column, this is unavoidable when the machinery is lying idle as a result of the export slowdown. As exports pick up (spurred more by China and the rest of Asia than traditional markets in the US and Europe), machinery starts moving again, and deflation will slow. It may even turn positive at some point, if demand picks up sufficiently.

The other important thing to remember about deflation is that when it occurs as wages are coming down, it’s not necessarily a bad thing. In fact, if prices go down faster than wages, then the average person is actually benefiting from the equivalent of a pay rise. Is this the situation in Japan now? It’s hard to say, but genuine concerns about declining wages need to be balanced with the fact that prices are falling quite rapidly, too. It sometimes seems to me that Japan has invented a completely new economic model, where real growth does occur, but is not translated into nominal growth. In other words, the volume of actual goods and services

WESTERN ECONOMIES HAVE ALREADY ADOPTED OTHER JAPANESE “HERESIES” SUCH AS QUANTITATIVE EASING Japan produces is increasing, but is not reflected in the monetary size of the economy. This is very peculiar by standards in the West, where prices rise along with output. The Western process diminishes the value of debt, and encourages present consumption. One might expect the Japanese model to eschew debt (since debt becomes more onerous in deflation), and thus grow less fast. It does, however, have the benefit of keeping asset prices extremely stable, preventing booms and busts. In addition, debt repayment costs are kept low, since interest rates only rise when nominal growth is rising (very slowly, in Japan’s case). The final piece of the puzzle is that savers put their money into government bonds, which are issued to fund the government debt. Bond prices go up under deflation, thus rewarding bond investors. What will be really interesting is whether this Japan model is exported. Western economies have already adopted other Japanese “heresies” such as quantitative easing. Maybe they will learn to love deflation, too. Text DAN SLATER, THE ECONOMIST GROUP

April 2010

Text Kai Kurosawa Photos Tony McNicol

April 2010

C U LT U R E - S H O C K

Kominka in Takedokoro rebuilt by Karl Bengs

In the tranquil village of Takedokoro, Niigata prefecture, sits a cluster of traditional Japanese farmhouses. The kominka are aged and elegant, supported by beams of fine-grained and sturdy keyaki, a Japanese elm. But there is something unusual about these houses. They are painted in striking colours, some yellow and others pink, while their interiors are bright and airy. They are the work of Karl Bengs, a German architect with a passion for Japan’s traditional architecture. “Japan has the best wooden buildings in the world,” says Bengs. He has dismantled and rebuilt 43 houses in the Niigata and Tokyo areas, and even exported entire houses to Germany, Switzerland and Spain. At Takedokoro, Bengs lives in a kominka of his own design, a rose-coloured house where the floor has been lowered 10cm to accommodate his height. Bengs first visited Japan in 1966, but it was in 1993 while seeking kominka to export that he stumbled upon the village of Takedokoro. He decided to build a home there and was embraced

by its residents. “We celebrate festivals together, clean the village and even go for small drives to the seaside,” he says.

JAPAN HAS THE BEST WOODEN BUILDINGS IN THE WORLD As each kominka is taken apart, every piece of wood is numbered and its position jotted down. Hardly any nails hold the structures together, but rather, most beams are locked into one another. This style is maintained when rebuilding the structure, preserving its natural feel, but with a modern and personal touch too. The kominka cost from ¥30 million to ¥40 million. Japanese homes tend to have poor insulation but Bengs re-assembles his kominka to be energy-efficient. He installs double-glazed windows and heated floors, and even imports thatch and black-slate tiles from Germany.

Many of the kominka are dilapidated and falling apart when Bengs finds them. Yet they only look rotten, he says. He has confidence in the strength of the keyaki beams and the workmanship of the houses’ carpenters. “Keyaki is a strong wood,” says Bengs, “and concrete actually rots faster than wood.” Keyaki is also more flexible than concrete, well able to withstand the violent earthquakes that rock Japan. But much like Japan’s depopulated rural communities, kominka are facing a crisis. Japanese architects aren’t interested in traditional buildings, says Bengs, while older people are worried that if they renovate their kominka their children might one day tear it down again. The art of building traditional farmhouses is also fading. “Young carpenters don’t even know how to sharpen a saw,” says Bengs sadly. “Maybe this beautiful art of Japanese architecture will disappear because there aren’t any more carpenters.” www.k-bengs.com/en/index.html See all the photographs at www.eurobiz.jp

April 2010

Firewalk Priests, impeccably dressed in traditional robes and delicately woven sashes, shake sacred rattles to warn insects of the ceremony soon to begin. Others blow on conch shells that give clear resonant notes like the warning blasts of an approaching ship. Reverberating throughout is the monotone drone of priests and followers chanting sacred sutras. Smoke billowing up from the fire before them adds to the mystique. Then, the main

Photos and text ROB GILHOOLY See all the photographs at www.eurobiz.jp

April 2010

event begins. The head priest leads the way, casting fistfuls of salt like a farmer sowing seeds as he makes his way barefoot across the smouldering embers. The Hiwatari fire-walking festival is a purification ritual that takes place across Japan. At Mount Takao, 50km from central Tokyo, yamabushi mountain priests from the Shingon sect and brave members of the public tread gingerly across smouldering embers,

the remnants of a gigantic bonfire set ablaze by a sacred arrow. The event is replete with symbolic ritual, such as the burning on the bonfire of thousands of wooden tablets. On them worshipers seeking purification have written their names. Though popular with sightseers, the deep spiritualness of the event is very much in evidence. The festival takes place on the second Sunday of March every year.

LENS FLAIR

April 2010

WORK PLACE

Jean-Pierre Bernardino President and representative director, Puratos Japan Belgian company Puratos sells ingredients to the bakery, patisserie and chocolate sectors. â&#x20AC;&#x153;We are a businessto-business company. Ordinary members of the public may not know our name, but probably everyone in Japan has eaten a product containing one of our ingredients.â&#x20AC;?

Photo TONY MCNICOL

April 2010