EURObiZ Japan February 2010 by Paradigm

Cleaning up

diesel Japan’s newest green fuel?

Hans Tempel chairman of the Automobile Committee of the EBC

ALSO INSIDE //

PREPARED FOR ANYTHING Business continuity planning

AN UNHEALTHY SITUATION Japan’s medical equipment market

2010

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

8 Cover photograph Rob Gilhooly

COVER STORY

FEATURES

8 Cleaning up diesel

12 An unhealthy situation Foreign companies have a substantial share of Japan's medical equipment market, the third largest in the world. But a slow and cumbersome approvals process is hobbling European importers, reports Martin Foster.

Diesel now has a credible claim to be a green automobile fuel. But European companies hoping to sell diesel-driven 16 Prepared for anything No company can afford to neglect business cars in Japan first need to continuity planning (BCP) â&#x20AC;&#x201C; contingency plans in the event of a major earthquake, pandemic or clean up its grimy image, other disaster. Justin McCurry reports on what needs to be done before the worst happens. finds Julian Ryall.

CHAMBER SPOTLIGHT 2

February 2010

The Italian Chamber of Commerce in Japan was set up in 1972 to promote business relations between Italy and Japan. The chamber helps companies of all sizes with information services, training courses, networking events and more.

32 COLUMNS 7 From the Editor

28 Executive Notes

45 Culture Shock

21 Talking EURObiZ

The Economist Group’s Dan Slater looks at the EBC’s 2009 White Paper.

Frenchman Stephane Danton takes a refreshingly new approach to the sale of green tea.

Guenter Zorn, z-anshin K.K. founder, tells Rob Gilhooly how environmental protection, alternative energy and related products are the future of business in Japan.

24 Event Report The 9th Economist business roundtable with the government of Japan. Can a once-in-acentury crisis become a once-in-a-century opportunity? 7 December, 2009.

25 Upcoming Events Europe and Japan business-related events.

26 Q&A Meglena Kuneva, the EU’s consumer affairs commissioner, talks to Justin McCurry about safeguarding consumers’ rights in a globalised economy and welcomes the establishment of Japan’s consumer affairs agency.

29 Investing in Japan Paris-based company Trend Union tracks and forecasts trends from Tokyo, one of the world’s major design and fashion centres. John Boyd talks to Japan office head Kaori Ieyasu.

30 In Committee Japan is world leader in energy saving, but many of its buildings are desperately energy-inefficient. Geoff Botting hears from the EBC Construction Committee and companies hoping to bring European building technology to Japan.

32 Green Biz After over a decade in Japan, patience and canny marketing have finally paid off for Freitag bike messenger bags made from recycled materials. Christopher Thomas hears how Japan got a brand new bag.

34 Who’s Who Directory IT & Telecommunications in Japan

40 Who’s Who Directory Legal Services in Japan

46 Lens Flair Photographer Alfie Goodrich visits one of Tokyo’s most photogenic, and lively, locations: Tsukiji Fish Market.

48 Work Place Muriel Milian imports fine foie gras.

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

February 2010

Publisher Vickie Paradise Green

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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

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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 Justin McCurry Justin McCurry writes about how Japanese businesses prepare for the unthinkable – page 16 Justin McCurry is the Tokyo correspondent for The Guardian and The Observer newspapers in London. He also reports on Japan for

British photographer Alfie Goodrich’s work covers commercial photography, photojournalism and various points in between. He is freelance, shooting for various commercial and editorial clients in Japan including: The Wall Street Journal, BBC, Nippon News, Metropolis, Q Magazine, Asahi Public Relations and many more. “Every occasion I go there, I see something new. But despite shooting there on and off for 10 years, Tsukiji is one of those sorts of

John Boyd John writes on the business of trend forecasting in fashion and design – page 29 John Boyd, who hails from Liverpool in the UK, has been covering science and

GlobalPost and contributes to the The Lancet medical journal and several other publications in Japan and the UK. He spent several years working as a copy editor and reporter for the The Daily Yomiuri in Osaka before joining the The Guardian full time in 2003. “I was living in western Osaka when the Great Hanshin Earthquake hit nearby Kobe in January 1995, an experience that left me keenly aware of the need to prepare for the worst.”

Alfie Goodrich Alfie Goodrich photographs the world’s largest fish market – page 46 places I may never truly ‘know’. It has so many faces, so many moods. To capture just a few is maybe all I can ever hope to do.”

technology and their impact on business in Japan for the past two decades. He is the Japan correspondent for IEEE Spectrum, and also writes on a variety of topics for various magazines. “Trend Union has turned the presentation of forecasting what’s coming next in areas like textiles and design into an art form. Its catalogues are produced to please the eye and trigger the imagination.”

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F rom the E ditor

Social networks, business networks Have you tweeted today? At EURObiZ Japan we are trying out these 140 character haiku, as well as setting up pages on several other social and business networking services. When you access our website, you will find all our articles are ready for comments, with two published below. This issue features other topics ripe for discussion. Julian Ryall asks whether diesel is now a green fuel, while Martin Forster examines the unhealthy state of medical equipment market regulation. Geoff Botting wonders why Japanese industry leads the world in energy saving, but homes here are so desperately inefficient.

inbox

Over the coming months we will use our website, as well as social network services, to post updates on topics reported in the magazine. Perhaps you have stories you’d like us to cover too? Let us know of any suggestions, please. We are also uploading slideshows and videos. Take a look at Alfie Goodrich’s fish market photos, and our video-interview with foie gras specialist Muriel Milian. Meanwhile, as I tap this out on my trusty iMac, Apple just announced its great white hope for the moribund media – the iPad, a tablet computer to offer newspapers and magazines in truly multimedia format.

Perhaps I’ll tweet on that while I’m waiting in the queue? You can find EURObiZ Japan on: Twitter twitter.com/Eurobizjapan LinkedIn (search for “eurobiz”) Facebook (search for “eurobiz”) … and our website: www.eurobiz.jp

Tony McNicol Editor-in-Chief

tonymcnicol@paradigm.co.jp

Working parents

Regarding your article on women working in Japan (“Women in Business,” January 2010): this is a topic I am always thinking and talking about with my business department students at a women’s university in Hiroshima. On the one hand, changes the government is making toward gender support and legal guidelines help women already are employed full time. But they are an

obstacle to women trying to get fulltime work. If the rules and guidelines are aimed only at women (not being asked to do overtime if you have school age children, for example) they simply cannot be successful. In this climate, if an employer has to choose between a male or female freshman, the male worker is much more of a workhorse and the female worker comes with baggage of family commitments that the company must allow time off for. This is a problem that handicaps our young career minded women. Unless there is a quota system in place, employers are not going to choose to employ more women. There is a lot of talk about the shrinking workforce, but our new female graduates are finding it harder than ever to get hired in full time work this year. Last year we had a 90% employment rate. In previous years we had 100%. This

year we are struggling to get 80% of our graduates employed. Something is wrong with this situation. It needs to be fixed to support all Japanese people, both working men and women, as well as their dependents, young and old. JJ Walsh, posted on eurobiz.jp My family in Yokohama had no problems at all finding childcare facilities for our boy in his infant and toddler years. Indeed we found a kindergarten very close to my Japanese wife’s place of work and consider it to have been excellent in all the key terms of quality of care, convenience and value for money. I accept that finding cheap, high quality childcare facilities on the doorstep may be difficult, but is there really “nowhere to go”? John Starr, Yokohama, by email

February 2010

Cleaning up

Text Julian Ryall

Rob Gilhooly

diesel

Diesel can now claim to be a green fuel. But it has a serious image problem in Japan

February 2010

C leaning up diesel

Japanese car makers are at the head of the race to develop eco-friendly energy technology; from hybrid and fuel-cell vehicles, to plug-in electric autos, and hydrogen as a fuel. But an out-of-date prejudice remains against a familiar fuel that can also be gentle on the planet. Recent advances mean diesel can now be considered a “green fuel.” And while that fact is widely accepted in Europe, Japanese consumers still have a mental block to overcome. “Diesel has this historic image that is not good; that it is dirty and pollutes, that diesel engines are noisy,” says Gerry Dorizas, president and CEO of Volkswagen Group Japan, “and that is no longer the case.” This entrenched attitude plus extremely strict rules on emissions mean the market for diesel cars is “almost non-existent,” says Dorizas, who is also vice-chairman of the Japan Automobile Importers Association. The Japanese government’s latest emissions rules went into effect in October 2009. According to Tappei Tsutsumi of the Climate Change Policy Division, Ministry of the Environment, the new regulations require emissions of nitrogen oxide to be reduced by 47% from 2005 regulations to 0.08g/km. Particulate matter must be cut 64% to 0.005g/km. The first car to meet the requirements, tougher at present than in both the United States and Europe, was Nissan’s X-Trail 20GT. On the other hand, Honda has announced that its plans to release lowemission diesel vehicles in the United States and Japan in 2009 are on hold

and has switched its focus to hybrid technology. The company has cited the cost of developing systems to make sure emissions are within required limits.

The advantage of a diesel vehicle is that it uses less fuel than a gasoline engine and we have now developed technology to deal with the remaining environmental issues

Europe and reduced emissions of nitrogen oxide by as much as 90%. “It is not only the fuel that has changed, but also the engines that are making the emissions cleaner,” he points out. “They are fitted with particulate filters, and the nitrogen oxide is treated with injections of urea to break it down into harmless nitrogen and water.” And with Europe updating its own emissions regulations, further efforts are being made before the 2014 deadline for the Euro 6 standards. “We need our latest technology to comply with the regulations in both Europe and Japan, and we are in the process of introducing it across the entire range into the Japanese market,” says Hans Tempel, president and CEO of Mercedes-Benz.

Hans Tempel, president and CEO of Mercedes-Benz

Other requirements – such as proving that copper in the filter does not violate other emissions standards – have acted as impediments to Volkswagen. But Dorizas believes there is a place here for his company’s BlueMotion technology, which has already been applied to its vehicles in

Nissan’s X-Trail 20GT — The first car to meet Japan’s latest emissions rules

February 2010

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C leaning up diesel

Diesel has this historic image that is not good; that it is dirty and pollutes … and that is no longer the case Gerry Dorizas, president and CEO of Volkswagen Group Japan

Mercedes has made strenuous efforts to establish green diesel in the Japanese market, Tempel points out, being the first foreign carmaker to meet the strict emissions rules in place in 2006 when it introduced the E320 CDI. In the spring of 2010, that model is being replaced with the E350 BlueTEC, in both sedan and station-wagon versions, to meet the even tighter petroleum storage tank (PST) long-term emissions regulations. And he believes that Japanese car manufacturers’ rush to embrace hybrid fuel vehicles at the expense of improving their diesel engines is a mistake. Those companies will still need to comply with tightened emissions regulations in Europe after 2014 and there will not be an overnight change in a market where, in some places, diesel accounts for 80% of the fuel used in vehicles. One size will simply not fit all, says Tempel, who is also chairman of the EBC’s Automobile Committee and a member of the board of the German Chamber of Commerce and Industry in Japan. “We are working towards zero emissions, and we started from conventional

gasoline and diesel engines,” he said. “The advantage of a diesel vehicle is that it uses less fuel than a gasoline engine and we have now developed technology to deal with the remaining environmental issues.

BlueMotion: Volkswagen’s eco-friendly car technology

“This means that diesel is available, it has proven merits, it is reliable, there is a cost advantage component, and it is now clean.” Nevertheless, Mercedes-Benz is still looking to improve the potential of all its engines, including hybrids, because certain systems are more suited to different driving situations, he says. An electric car with a range of around 100km is efficient in an urban environment where it can be recharged during the night, for example. It will be far

more difficult to replace the combustion engine entirely for longer journeys, although that engine could increasingly be supplemented by hybrid diesel engines. “This is why we need this range of different technologies,” Tempel emphasises. The Mercedes-Benz solution to stiffer emissions regulations is its BlueTEC technology, a range of coordinated measures that include a Selective Catalytic Reduction (SCR) converter, combined with AdBlue injection that reduces nitrogen oxide, and a particulate filter that has reduced emissions to a virtually undetectable level today. But while the technological side of the equation may have been largely solved, problems of perception remain, he agrees. “The negative image of diesel engines are old-fashioned and unfounded,” Tempel says. “There are other countries where diesel is more popular than any other fuel and there is no reason why it should not be more widely used here. It is something that we have to keep working on.”

Fuel-saving features such as Automatic Start/Stop technology and improved aerodynamics mean BlueMotion cars are kinder to the environment © VOLKSWAGEN AG

February 2010

unhealthy situation Slow approval process for overseas-made medical equipment puts off foreign companies Text Martin Foster

he Japanese healthcare budget is under increasing strain, burdened by a rapidly ageing population of which one in four people will top the age of 65 in 2013, and more than one in three by 2035, according to figures from the National Institute of Population and Social Security Research. But while the implications for the nation’s coffers are ominous, there are robust business opportunities for domestic and foreign medical equipment makers as more Japanese look to stay healthy longer. With a global share of 11%, the Japanese medical equipment market ranks third behind the United States (45%) and the European Union (nearly 33%), according to a presentation entitled Medical Technology in Europe given on 6 March, 2009 12

February 2010

by John Wilkinson, Chief Executive of the European Medical Technology Industry Association (EUCOMED). Almost 50% of Japan’s medical equipment is imported, with the United States accounting for 55.7% of that figure and Europe for 27.9%, according to data from Japan’s Ministry of Health, Labour and Welfare. United States and European makers of medical equipment have helped pioneer noninvasive therapies via the use of MRI (magnetic resonance imaging) scans, CT (computed tomography) scans and PETs (positron emission tomography). But despite these opportunities, the Japanese medical equipment market can be a daunting place to operate, and some medical equipment makers pass over Japan for more amenable, or profitable, markets including China. Makers cite

high regulatory barriers, costly test requirements and inadequate returns on investment. “Only 50% of the medical devices marketed and sold in the EU and the United States are available in Japan,” says Seiji Kamijo, chair of the Medical Equipment Committee at the European Business Council, and president and CEO of Philips Electronics Japan. The list of products available in Europe and the United States for over five years but not imported into Japan includes phakic intraocular lenses, which help sight function recovery in nearsighted patients not treatable with LASIK, and cardiovascular port-access technology, which facilitates minimally invasive valve replacement. The Japanese approval process averages between 12 and 36 months compared to just six months in the EU. Matters are complicated by the fact that documentation screening and application approval are handled by different organizations. Screening is the responsibility of the Pharmaceuticals and Medical Devices Agency (PMDA), while final approval of applications depends on the Ministry of Health, Labour and Welfare (MHLW). Screening may take approximately 12 months, and the approval process about a further seven months. Japan recognizes that this process contributes to a delay in introducing new medical technology, and in December 2008, the MHLW came up with a five year Action Program designed to reduce the 19-month period. It is worth noting the 19-month period roughly tallies with the 18-month to 24-month product cycles in place for most medical machinery, and suggests equipment approved in Japan [may be] at least one generation obsolete compared to equivalent United States and European models. Chronic delays have also been aggravated by a lack of PMDA inspectors, who are outnumbered by their United States counterparts by a ratio of almost ten to one. There were 35 inspectors in 2008, and the MHLW program aims to boost that number to 104 over five years from April 2009, according to Hidehito Sekino, director of the Office of Medical Device Evaluation in the Pharmaceutical and Food Safety Bureau at the MHLW. The number of inspectors rose by 12 to 47 in 2009, and Japan is broadly on schedule to achieve its goal, but will still fall short of United States levels. PMDA inspectors tend to be drawn from medical,

China

Japanese medical equipment imports, by origin

Others

€4 billion (2%)

Others

€20 billion (9%)

China

(10%)

(6%)

Japan €23 billion (11%)

€98 billion (45%)

US (56%)

(28%)

€72 billion (33%)

pharmaceutical, engineering and physical science backgrounds, and are more academically focused than their counterparts in private industry. Those with private sector experience are restricted from making a direct switch to the agency – with the result that communications problems exist. “The consultation structure remains complicated,” says Takeshi Fujiwara, chairman of the EBC’s Regulatory Subcommittee of the Medical Equipment Committee, and president of the medical technology company Gambro. “It would be difficult for first timers to figure out what they need to do.” Mutual recognition of medical equipment standards could make negotiating this process easier, cut costs and lead to better treatment for patients. Japan and the United States maintain a cooperative framework to develop global clinical trials, known as Harmonization By Doing (HBD). But, the EU is not part of this framework. This is partly because the EU operates a system of self-certification known as CE marking, in contrast with the official approvalbased systems in place in the United States and Japan. At present, the MHLW has difficulties accommodating the European model. “We do not have enough intelligence about CE marking, or its structure,” says Sekino. “We are attempting to learn about the system, but there is just not enough information.” He draws a diagram of railway tracks. “It’s a question of the gauge,” he says. “The FDA and MHLW gauge have gotten closer, but we would have to say we don’t know what kind of gauge Europe operates on at present.” That suggests room for further discussion, and Sekino calls on EU medical equipment representatives saying, “if they wish to talk to us we would tell them to make their point, and find out how we both feel about the issues.” The EBC, however, takes a more robust stance. “We have been talking to the Ministry of Health, Labour and Welfare for more than 10 years about the need for standards harmonisation and mutual recognition of market authorisation processes. Such change would eliminate the delays caused by the long approval process,” says EBC Policy Director, Bjorn Kongstad. “There has been plenty of talk. Now it is time to act.” February 2010

A n unhealthy situation

Equipment approved in Japan [may be] at least one generation obsolete compared to equivalent United States and European models

Medical equipment – total global market value

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February 2010

Is your company ready for the worst? Text JuSTIN MCCURRY Photos Alfie Goodrich

Yoshio Kitazawa, president of the consultancy BCP Corporation

Cultural resistance is preventing Japanese companies from embracing business continuity planning with the same enthusiasm as their overseas counterparts Yoshio Kitazawa

investment, says Kitazawa, as landlords and potential business partners find it harder to attract foreign firms if they are unable to prove their BCP credentials. “But if you can say your buildings have been designed or adapted to prepare for disaster, or if you have a programme ready for implementation when the unthinkable happens, you stand a much better chance,” he says. “Exporters in particular are under increasing pressure to prove their BCP credentials, for obvious reasons.” Japan, though, is learning from the experience of other countries, including Britain, whose history of dealing with terrorist attacks and threats has put it at the forefront of the BCP community. The British Standards Institution in 2006 introduced an independent standard for BCP that covers private and public bodies, and all sectors of industry, while essential services and local authorities are required by law to plan for emergencies. In the United States, compliance with several federal laws requires proven strategies for business continuity and disaster management, particularly in the healthcare, government, finance and utilities sectors.

Recent improvements in Japan’s BCP environment have been driven by the Bank of Japan (BoJ) and its determination to maintain market liquidity in the event of a catastrophe. BoJ pressure has forced more banks to open backup centers, identify key personnel who would be expected to continue working in the wake of a disaster, and protect data that, if lost, could cripple operations. In a 2008 report on risk management, the central bank found that among 84 Japanese financial institutions, 29 of them foreign, 90% had established institution-wide BCP. However, only around 40% said they were confident of the feasibility of their plans. The BoJ said business continuity management had “continued to progress steadily,” but added that preparedness levels on such issues as swine flu fluctuated considerably, with many companies citing human resource and budgetary constraints as the main challenges to a longer-term strategy. HSBC is one of several foreign banks that believe forward planning helped them emerge unscathed from the H1N1 flu pandemic. The UK-based bank has been doing business in Japan since 1866 and has approximately 1,000 staff spread among 10 buildings. Preparing for the unthinkable is critical to its future operations here, says Jason Quigley, manager of business continuity planning in HSBC’s security and fraud department in Tokyo. The bank’s presence in Hong Kong enabled it to learn valuable lessons from the 2003 SARS outbreak in Asia. “It was unfortunate, but it was a learning experience for our bank,” he says. “The most important thing is to plan ahead and be clear about what you’re going to do before the pandemic strikes.” The bank’s country crisis committee for Japan meets regularly to plan policy and review the results of its drill regime, while its crisis team is ready to keep employees and other stakeholders updated in the midst of a disaster recovery effort. Should disaster strike, HSBC February 2010

P repared for anything

t is a scenario that every company in Tokyo dreads: a major earthquake that kills or injures thousands, paralyses public transport and communications, and leaves business operations in tatters. Last year’s outbreak of the H1N1 strain of influenza was a reminder of the myriad threats companies must confront to survive: pandemics, earthquakes, floods, fires, utility outages, terrorism, cyber attacks and even financial scandals. The possibility of widespread and prolonged disruption to the service, retail, banking or manufacturing sectors has made business continuity planning (BCP) an integral part of the operations of the prudent Japan-based business. Safeguarding corporate infrastructures involves a whole raft of considerations, from how to protect offices housing millions of dollars’ worth of technology, to gauging how much data loss or enforced absenteeism is sustainable before operations grind to a halt. A typical BCP strategy should include contingencies for every possible form of disruption as well as procedures for recovering and restoring critical functions, all detailed in a manual available to employees. If the 11 September, 2001, terrorist attacks in the United States marked a BCP watershed for corporate America, the arrival of new flu strains in 2009 has focused the minds of the domestic and foreign business communities in Japan. But Yoshio Kitazawa, president of the consultancy BCP Corporation, believes cultural resistance is preventing Japanese companies from embracing BCP with the same enthusiasm as their overseas counterparts. “There is a kind of fatalism that is hard to shrug off,” says Kitazawa, a former international banker. “As a consultant, I am also aware that firms here are reluctant to pay for something they can’t see, such as advice on business continuity management.” That poses a problem for Japan’s attempts to woo more inward

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.

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

P repared for anything

A disaster in Tokyo could leave millions stranded

companies to review their crisis management provision. Consumer electronics company Sharp established an emergency headquarters in Osaka last April, and runs seminars on preventive measures and post-crisis working practices. In addition, 31,800 employees in Japan take part in regular drills. “We have also put lots of measures in place to make our network more secure,” says Miyuki Nakayama of Sharp’s corporate public relations division. “And all of our employees have to learn how to use our internal communications system in case disaster strikes.” But Japan will struggle to establish standard BCP practices as long as government and business continue to refuse to cooperate more closely, says Neil Katkov, head of Asia research at Celent, a financial services consultancy. “Many of the obstacles in the way of better BCP strategies are linked to the culture of secrecy surrounding financial institutions,” he says. “They want to protect their confidentiality, which is only natural, but that is why there needs to be some form of overarching regulation put in place. Otherwise the coordination won’t happen. “The United States investment banks are most conscious of the need for preparedness. Major EU banks and securities firms are also working hard on this, although their plans are not as robust as those of their United States counterparts.” Katkov called for more integration between government, manufacturers, emergency services and the financial sector.

Plenty to worry about: Potential disaster scenarios identified by respondents to a Bank of Japan survey 0%

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100%

90%

Earthquakes Large-scale computer system failure

85% 83%

Fire and water leakage

81%

Wind and flood damage

77%

Pandemics Terrorist bombings

71%

Service suspension of public infrastructure

70% 65%

Cyber terrorism Large-scale failure of financial infrastructure

58%

Others 24% BANK OF JAPAN

can switch its operations to two backup sites in Tokyo and Yokohama. Senior management is equipped with satellite phones, while all employees have been issued three-day earthquake survival kits. “Foreign banks have fewer resources compared with our domestic counterparts, so we have to ensure we can use them properly and wisely when the time comes,” Quigley says. “The Financial Services Agency wants reassurance that we can provide service to customers during a market outage and ensure the safety of staff.” Firms must also be able to allay fears among employees caught up in a crisis, says Keiko Suzuki, a human resources expert and president of the business consultancy Footsteps. In the event of a flu pandemic, for example, what are the pay entitlements for workers forced to take a prolonged leave of absence? “Although the Health Ministry created a panic last year, it at least stimulated BCP preparations for flu pandemics,” says Suzuki. “Firms are more serious about drills, provisions for working from home and so on as compliance requirements.” But she adds: “They haven’t reached the point where business can be sustained. They have worst-case scenario simulations, but they have yet to answer basic questions, such as who will do certain jobs if someone is sick or a member of their family dies. The importance of these issues can’t be underestimated. They might end up saving your company.” The flu pandemic prompted several

8% Causes unidentified

“New York is a good example, as it involves the fire department, the stock exchange and public utilities. But the planning in Japan is fragmented. More coordination between the financial sector and the government would be the simplest, most cost-effective way forward, but that seems to be on the back burner.” The European Business Council (EBC) is establishing a Business Continuity Planning (BCP) Committee and will be holding a free BCP seminar on March 29. Anyone interested in these activities should contact Alison Murray at ebc@gol.com for information.

February 2010

T alking E U R O bi Z

Guenter Zorn The president of the German Chamber of Commerce in Japan on opportunities in green technology Interview and photo Rob Gilhooly In my opinion, some of the largest opportunities in a mature economy like Japan are in environmental protection and renewable resources. In 2006, under my guidance, DHL Express started the first green logistics program in Japan, possibly globally. We had the first fuel-cell vehicles and hybrid trucks running here. Utilizing this experience, since starting my own business, z-anshin KK, I have worked on several projects relating to renewable energy. Japan has the technology, the R&D, the intellectual resources and the financial clout, and can develop the technology to sell worldwide. Most people here have a car, at least one TV, an i-Pod, maybe two mobile phones. And, like many other places, the population is shrinking, so by definition markets will not grow unless you develop a completely new business field. Industries, governments, organisations and cities worldwide should all recognise that alternative energy offers a huge opportunity. For example, if a city can incorporate alternative energy sources and reduce costs, that can make a city more liveable for its citizens, as well as more competitive and attractive for potential enterprises. Creating alternative energy is the first step; developing products that use that energy is the next. The products we see now will bear little resemblance to those we will be using in the near future. Electric vehicles today are still based on traditional car design. Thatâ&#x20AC;&#x2122;s not how they will look in five to 10

years from now. The same goes for other appliances. Japan is developing highly energy-efficient electronic household goods. Unfortunately, Japanese homes already have everything except decent insulation. Many related companies in EU countries, especially Germany, are strong in this area. They have the technology, experience and materials, and I think they can develop significant business in Japan because this market has a huge number of houses that are not very energy efficient or environmentally friendly, and need to be enhanced or rebuilt to meet the new energy requirements. Of course, it is not easy to break into the Japanese market, but this country is a world leader in terms of intellectual property. Coming here offers companies the chance to benchmark their own products, or to cooperate with Japanese manufacturers, not only in Japan, but also in the Asian and global markets. An interesting field, for example, would be lithium-ion batteries. Whatâ&#x20AC;&#x2122;s more, the sheer size of the affluent population means that if you have a product that is different

Japanese homes have everything except decent insulation

and suitable, you have enormous opportunity. Even given the difficulties of entering some markets, like construction or pharmaceuticals, we can present our business skills and experience not only to customers, but also to the various government agencies here. This is where the EBC comes into play â&#x20AC;&#x201C; to overcome visible and less visible import hurdles. Guenter Zorn is president of the German Chamber of Commerce in Japan, founder of z-anshin KK, an author of detective novels, a columnist for the Nikkei Shimbun and a fourth-dan black belt in Aikido. He has lived in Japan for almost 20 years.

February 2010

The Italian Chamber of Commerce in Japan Camera di Commercio Italiana in Giappone Murmansk

Enokizaka Bldg. 3F 1-12-12 Akasaka, Minato-ku, Tokyo 107-0052 Tel: 03-3560-1100 Fax: 03-3560-1105 E-mail: iccj@iccj.or.jp

Reykjavik

www.iccj.or.jp

Narvik

ICELAND Oulu

Umea

Board of Directors President:

FINLAND

SWEDEN

Trondheim

Vaasa

Alberto Montanari Magneti Marelli Japan K.K. NORWAY

Turku

Vice-President: Flavio Gori Savino del Bene Japan Co., Ltd.

The Italian Chamber of Commerce in Japan was set up in 1972 to promote business relations between Italy and Japan. Dublin Its members include 125 companies and Cork UNITED around another 30 individuals. KINGDOM

Helsinki

Stockholm

Sankt Peterb

Tallinn

Treasurer:

Paolo Pagani Cobra Japan KK

Director:

Riga Andrew Clayton, Piaggio Group Japan Corporation

Director:

Pio D'Emilia, Sky TG24 Italy

Director:

Cinzia Latronico, Natuzzi Japan

ESTONIA

LATVIA

LITHUANIA

DENMARK

Vilnius

Director:

Romano Mazzucco, R&M Japan

Director:

Renzo Villa, Villa Consulting Japan

Minsk

RUSSIA

Gdansk

BELARU

Director: Hiromi Yamada, Berlin Al Mondo Co., Ltd. NETHERLANDS Poznan

Warsaw

POLAND GERMANY L'vov

Far more than just food and Ferraris BELGIUM

Kraków

Prague

Frankfult

CZECH REP.

LUXEMBOURG

SLOVAKIA

Bratislava

“There are four main industries making up our membership: food and beverage, fashion, mechanics, and electronics,” says Chamber President Alberto Montanari. While Italy’s designer goods companies are probably the country’s highest profile export to Japan, less charismatic industries such as chemicals Bordeaux La Coruna and pharmaceuticals also have a large presence. So, of course, does mechanical engineering, says Montanari. Luxury car Bilbao manufacturers such Ferrari and Lamborghini are well-known PORTUGAL examples of Italy’s world leading technology. The recession, however, has transformed the luxury goods Madrid market. “They are used to very high investment and high Lisbon returns, but now SPAIN they are going back to a more normal level of Valencia profits,” says Montanari. Sevilla “The Japanese Malaga market was very overinflated, so there is a Algiers Rabat 22

Casablanca

February 2010

MOROCCO

ALGERIA

AUSTRIA

HUNGARY

ROMANIA

SWITZERLAND SLOVENIA

Buc

CROATIA

Milan SERBIA

BOSNIA AND HERZEGOVINA

FRANCE

BULG MONTENEGRO

Rome

KOSOVO

MACEDONIA ALBANIA

GREECE

Athen

TUNISIA

C hamber S potlight

rebalancing.” Yet, subcategories of fashion such as sunglasses are still doing very well, he notes. So are middlelevel brands. “Maybe the name is not a top designer brand, but the quality is almost the same.” The Italian chamber assists companies of all sizes, but it is to the small and medium-sized companies that they have the most to offer. “The smaller companies have language issues and do not know so much about Japan,” says Montanari. “We help them learn how to work in Japan. They need to know how to make a deal in Japan.” The ICCJ’s Business Center at their Akasaka office provides help to companies starting up in Japan, from helping with initial paperwork, to providing moderately priced office space. The chamber issues a daily press review with a selection of articles from Japanese newspapers, while a monthly newsletter offers articles, interviews, government statistics and information on business events. The chamber also does market research for potential investors. Talking business The chamber recently started business Italian courses. “We thought we might

have five or six participants,” says Secretary General Davide Fantoni, “but over 15 people signed up.” The chamber hopes to organise business Japanese courses in the near future. Other past events include seminars on import and export, tasting events for wine and olive oil, and workshops on Italian design. Last year the chamber worked hard on promoting the Calabria region of southern Italy, a major food producer. Japanese food-and-beverage maker Kagome has invested in the region, which is receiving funds from the EU to aid development. Another event the chamber organized was a seminar at Waseda University on the commercial and cultural image of Italy. “For Japanese people, Italians are nice, funny, amusing and high-spirited, but not very reliable,” says Fantoni. Adds Montanari: “They like us, but they would think twice about working for us or starting a business with us.” That stereotype – of course – is not true,

The Fiat 500 was voted “Best Compact Car in Japan”

There are four main industries making up our membership: food and beverage, fashion, mechanics, and electronics Alberto Montanari, iccj president

they stress. “Our members are serious businessmen doing serious business,” says Montanari. Nevertheless, the chamber must surely be one of the most socially active in Tokyo. Every two months they host an event with another chamber, European or from further afield, to promote new business relationships. Their L’Aperitivo della Camera event at a different Italian restaurant each month regularly gets 200 to 250 people. Only restaurants offering the best authentic Italian food are chosen. The year’s networking calendar culminates in a Grand Gala Dinner Party. “We have a growing mailing list of 2,000 people, thanks to our events,” says Communication and Web officer Paolo Soldano.

February 2010

EVENT REPORT

Opportunity in adversity

The ninth business roundtable with the government of Japan 7 December 2009, Imperial Hotel, Tokyo Text and photos Tony McNicol

to use Japan’s world-leading research “Can a once-in-a-century crisis become a and development to sharpen the nation’s once-in-a-century opportunity?” was the competitive edge. question asked at the Economist’s ninth Opening remarks came from Motohisa business roundtable with the Japanese Furukawa, senior vice minister of the Cabinet government. Around 150 people came to the Office for Economic and Fiscal Policy, Science Imperial Hotel in Tokyo to hear an impressive and Technology Policy, and Government line-up of politicians, journalists, academics Revitalization. Just a few months after his and business leaders discuss the crisis conparty’s dramatic election win he coyly admitfronting Japan, as well as possible solutions. ted, “To tell you the truth I never expected to Chairs Graham Davis of The Economist be standing here.” He stressed the DPJ’s deterGroup and Kazuyo Katsuma of the Chuo mination to break from old LDP ways, and Graduate School of Strategic Management light-heartedly informed the audience that he, were clear on the gravity of the situation. not a bureaucrat, wrote his speech. Davis urged participants not to give up on Furukawa’s speech helped set a tone of cauJapan despite challenges such as economic Furukawa, senior vice minister tious optimism. “A quiet revolution has already malaise, political deadlock, an ageing society Motohisa of the Cabinet Office for Economic and begun” he said, explaining that Japan needs and regional tensions. Katsuma highlighted Fiscal Policy, Science and Technology a new system to replace the discredited LDP Japan’s high suicide rate as evidence of crisis. Policy, and Government Revitalization growth model. “It is a Japanese characteristic The full day of discussion covered Japan’s that we can turn on a pin,” he said. “This is a one-in-aopportunities in Asia, the need to “reinvent” Japan’s economic hundred- year chance.” model, how to overcome “institutional fatigue,” and how

A quiet revolution

February 2010

events

Upcoming events Belgian-Luxembourg Chamber of Commerce in Japan www.blccj.or.jp/

BLCCJ New Year Party 10 February, from 19:00 Venue: Hillside Banquet Terrace C, B1, Sarugakucho 29-10, Shibuya-ku (www.hillsideterrace.com/access/index.html) Fee: contact BLCCJ Contact: info@blccj.or.jp Finnish Chamber of Commerce in Japan www.fcc.or.jp/

FCCJ Club Evening 2 March, 19:00 to 21:00 Venue: Moomin Bakery & Cafe, La Qua, Korakuen Fee: ¥4,000 members, ¥4,500 guests (collected at the door) Contact: fccj@gol.com German Chamber of Commerce and Industry in Japan www.japan.ahk.de/en/home/index.html

Evening Seminar “Dealing with the Fair Trade Commission — Notification Duties and Cartel Investigations”  4 February, 18:30-21:00 Speakers: Setsuko Yufu & Andreas Kaiser, Atsumi & Partners Venue: German Chamber of Commerce and Industry in Japan Fee: ¥5,250 (members), ¥8,400 (nonmembers) invoiced after the event Language: English Registration: events@dihkj.or.jp

GCCIJ Luncheon Meeting* “Japan after the Crisis: Domestic Demand Stimulation and Foreign Investment in Asia” 18 February, 12:00-14:00 Speaker: Dr Martin Schulz, Senior Economist at Fujitsu Research Institute Venue: The Westin Tokyo, B2, Star Room

Fee: ¥5,500 (members) invoiced after the event Language: English Registration: events@dihkj.or.jp *In cooperation with the Austrian Business Council and the British Chamber of Commerce in Japan

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

San Valentino – Valentine Italian style 8 February, 19:00-21:00 Venue: FIAT CAFFÉ, Aoyama-Itchome Detail: One drink and buffet of Italian chocolate included. Win a romantic stay for two in a gorgeous resort in Nara. Fee: ¥2,000 (members), ¥2,500 (non-members) Contact: iccj@iccj.or.jp

Chambering* 23 February, 19:00-21:00 Venue: Melagrana d’Oro restaurant, Yotsuya Detail: An Italian serata. Italian wine & delicacies. Great prizes offered by member companies of both chambers in a draw. Fee: ¥4,500 (members), ¥5,500 (guests). Only 100 tickets, pay by 15 Feb Contact: iccj@iccj.or.jp

FEBRUARY S

MARCH S

*In collaboration with the Australian and New Zealand Chamber of Commerce in Japan (ANZCCJ)

Netherlands Chamber of Commerce in Japan http://nccj.jp/

Corporate Social Responsibility – Basics, Definitions and Practices 10 February, 12:00-14:00 Speaker: Rio D. Praaning Prawira Adiningrat, Founder and Managing Partner of PA Europe and PA Asia, PA Russia, PA Middle East and PA CSR Venue: Hilton Tokyo, Katsura Room Fee: ¥5,000 (members), ¥6,000 (non-members) Registration: nccj@nccj.jp or 044-246-1355 Swedish Chamber of Commerce and Industry in Japan www.sccj.org

Monthly Club Evening

9 February, from 18:30 Venue:  Restaurant Stockholm Contact:  sccj@twics.com Swiss Chamber of Commerce and Industry in Japan www.sccij.jp/

Luncheon at Hotel Okura 4 March Speaker: Conrad Heraud, Heraud Associates Ltd. Venue: Hotel Okura, Toranomon Contact: sccij@gol.com

February 2010

Consumer

Champion Justin McCurry speaks to Meglena Kuneva, EU commissioner for consumer affairs Photo Rob Gilhooly

Growing concerns over food safety and labeling, consumer credit scams and personal data leaks led to the creation last September of Japan’s first consumer affairs agency. Meglena Kuneva, the European Union’s commissioner for consumer affairs, says the agency’s launch sends a “strong political signal” that Japan is getting serious about consumer rights. During a recent trip to Tokyo, Kuneva spoke about the challenges the global economy poses to consumer advocacy, and what Japan can learn from Europe. How aware are Japanese consumers of their rights? I have encountered a very vibrant society during my visit. I met the state minister for consumer affairs, Mizuho Fukushima, members of both houses of parliament, and consumer NGOs – which for me are a sign of how much importance a society attaches to consumer policy. I think our traditions might be different, but the goal is the same: better protection. By that I mean the exact opposite of protectionism. To keep markets open we need to provide high-quality, safe goods and services, respect the rules with the same conviction and diligence, and assume our global responsibility. 26

February 2010

What can Japan learn from the EU? Europe has a lot to share, but it took us about 100 years to get to the point where we have strong market surveillance and strong consumer rights. We can learn from each other’s experiences. In these days of global governance, we should be ready to exchange information and ideas. Our Japanese colleagues have stressed their willingness to follow the best practices from Europe. And as a technologically advanced society, Japan can teach us, for example, about the traceability of dangerous goods. We could cooperate more in exchange and training, and provide technical

assistance in certain areas. Normally, parties tend to guard information, sometimes because they want to protect a company’s reputation. Now we are opening up the flow of information, and the global market will benefit from that. What advice do you have for the new agency? Organizing an agency is an internal matter, but my one piece of advice would be to cooperate with civil society. The sooner the agency does that, the better the results will be. Japanese products have a good reputation, but if you aren’t vigilant

Q&A

Japanese products have a good reputation. but if you aren’t vigilant at all times, something can slip through

at all times, something can slip through. I have the same confidence in the European economy, but I tell manufacturers there that they have to maintain public trust. Trust is the currency of the modern economy, and the moment you lose it, somebody else will gain. Which consumer issues interest you most? I think we need to move our focus from products to services, and from offline to online. That’s a great challenge for legislators. We also need to strengthen the international dimension of consumer bodies. It would be wrong, in difficult economic times, to protect national markets. But it is also wrong for people to take advantage of market freedoms by ignoring safety and environmental regulations. The EU is not protectionist. Remaining open is our bread and butter. Naturally, the EU wants to sell its products to our trading partners, thereby giving them

access to more and cheaper goods. But not at the expense of safety. What has the EU done to improve the safety of goods from China? We have an excellent partnership with China because we understand each other. In the future the key will be for standards to converge. At present, the United States and Europe do not have common standards with regard to the safety of products from China. But we are nearer to achieving commonality, on toy safety for example. That will help China tremendously, because now it is producing in one way for the European market and another for the American market. China is the world’s biggest manufacturer of toys, so it is only natural that the highest percentage of substandard goods should come from there. I like to use another scale: how willing are our partners to listen and improve? In that respect, I have found China willing to cooperate. And the Chinese will feel more confident about

investing in safety if they know that observing standards will guarantee them access to all markets. The EU and Japan can cooperate on the traceability of dangerous goods. In recent years we have worked very hard to make the Chinese realise that without safety, our market will be closed to them. What are your hopes for EU-Japan cooperation on consumer affairs? This new agency will bring some order to our relationship, because now we know who our counterparts are. It is only a beginning, but I think our relationship will develop very quickly. We might arrive at the same place eventually, but by different routes. The more sophisticated the global market becomes, the more we need to converge. Public authorities are not enough. They can’t do their job without very vigilant and well-educated citizens. No market is 100% safe. It would be misleading for me to say that we alone can close all of the loopholes. February 2010

EXECUTIVE NOTES

Talk or action?

The DPJ needs to decide

It will be interesting to see how the Democratic Party of Japan responds to the business issues raised in the latest EBC White Paper (available at www.ebc-jp.com/). The paper vividly describes a market which is organised for the benefit of a narrow range of producers, in close collaboration with government ministries. The paper’s authors will be keen to persuade the DPJ to their point of view, but it’s not clear how Japan’s new governing party will react. The DPJ claims to be the champion of the “little people” against big business and the bureaucracy. But the question is whether the DPJ can reconcile battling vested interests while protecting employment. I suspect that the DPJ is trying to conduct a fundamentally schizoid policy. Attacks on the bureaucracy and their business partners should lead to a shake out in those industries, involving layoffs and plant closures. But this goes against the DPJ’s very strong commitment to protect employment. The white paper clearly lays out many of the issues the DPJ must tackle. A typical example is the lack of an independent regulator in the telecommunications industry. Thus, the Ministry of Internal Affairs and Communications is the main telecom regulator, despite the fact that the government owns a one-third equity stake in NTT – and must do so in perpetuity, according to law. The white paper goes on to point out that interconnection fees (whereby smaller players pay NTT to use its infrastructure) in Japan are very high compared to the OECD average. A rare legal action by foreign and Japanese carriers was brought against the regulator to rectify this. However, progress was disappointing, with a fee reduction being phased in over five years, and NTT being allowed to recover the funds by different means. We know that, in the past, former Prime Minister Junichiro Koizumi would have looked at deregulation to inject competition into the market and lower prices. The DPJ certainly wants to help consumers with lower prices. It also 28

February 2010

Will the government really push for increased competition in the telecom sector to the extent of breaking up the carrier’s dominant position?

wants to limit the power of the bureaucracy. But will it really push for increased competition in the telecom sector to the extent of breaking up the carrier’s dominant position? That would clearly go against its philosophy of protecting employment at all costs. Another interesting case the EBC highlights is Japanese airports. Air fares are kept high by the cost of flying through Narita. The EBC points out that this is due to a government “special account” charge levied on Narita airport, which is passed on to the airlines. The government earmarks the special account proceeds to build local airports. The proliferation of local airports then drains air traffic from secondary hubs at Nagoya and Kansai. The result is an over-dependence on Narita, and higher prices for everybody. According to the DPJ’s own rhetoric, this special account is an ideal candidate for elimination. But will they keep their promise if that means throwing construction company employees out of work? We will only know in the coming months. Text Dan Slater, The Economist Group

I nvesting I n J apan

Cataloguing Tokyo’s Trends Trend Union

Text John Boyd

s there a more vibrant, dynamic city than Tokyo when it comes to setting trends in fashion, lifestyles and industry? Trend Union SAS, the Paris-based trend-forecasting company, decided the answer was no, which is why it established its second overseas branch office in Tokyo (following New York) in February 2008. Tasked with setting up the business was Kaori Ieyasu, 37, a representative director of the company. Earlier, she had studied at the Design Academy Eindhoven in The Netherlands, where Li Edelkoort, the Dutch founder and president of Trend Union, also happens to be the academy’s director. After graduation, Ieyasu was invited by Edelkoort to come and work in the Trend Union Paris headquarters and then to set up operations in Japan. Before the Japan branch office was established, Trend Union had relied on a local trading company to market its trend forecasting data in the form of attractively designed catalogues, flagstone-sized and twice as thick. These hefty volumes contain not only graphs and charts, but also artful concepts and motifs to help clients such as textile-makers, fashion designers, interior decorators and lifestyle businesses grasp the significance of trends. A motif used in the catalogues forecasting trends in 2011, for instance, is water, which aims to reflect people’s desire to move away from ostentation to simple designs and colours and more sustainable lifestyles. To explain such concepts in depth, Trend Union decided it needed one of its own people in Japan. “Educating clients on what trends these concepts show, and helping

them see how they can be used in their businesses, is so important,” says Ieyasu. “It’s like mathematics. Once you know the rules, you can find answers to many questions.” This side of her work is different from how the catalogues are marketed in Europe and the United States “Li Edelkoort is so well known in Europe and the United States but not yet in Japan,” she says. “Our clients here need such explanation.” Another important part of her work is translating the catalogues into Japanese. The typography used to explain the trends is chosen to enhance the aesthetic concepts used to represent them; so the original English remains unchanged. Instead, Ieyasu supplies separate Japanese booklets. Given some eight to 10 catalogues are produced twice a year she is constantly busy. When she arrived in 2008, Japan was reeling from the Lehman Brothers financial shock. With companies cutting back on expenditures, catalogue purchases were declining. “It was a tough time to come,” she says. Nor had her background in fashion and design prepared her for establishing a company from scratch. The nuts and bolts of setting up the branch office were no big challenge. She says it was a case of following a series of procedures; she also took advantage of various support services provided by the Japan External Trade Organization (JETRO). What did prove to be an obstacle was meeting potential new clients. “You can’t just walk up to the main gate at Toyota and say you want to talk with their design group,” she explains. “You need to get noticed first.” So she created a Japanese-language Trend Union website employing the same template as the parent company.

“But I made accessing it easier, less complicated,” a prerequisite, she notes, to attracting Japanese people’s attention. The site generated a lot of interest and brought in many enquiries. Ieyasu now employs a full-time web designer who has expanded the site and added sophisticated features like e-sales. Another step she has taken to gain recognition is to give seminars on trends and invite potential clients to attend free of charge. This is in addition to the twice-yearly visits that Endelkoort pays to conduct seminars in conjunction with the publication of each season’s catalogues. The result is an increase in visibility and number of requests to attend seminars, which is leading to increased sales of the catalogues. And her next step? “I need to broaden our base of clients, especially in industry.” Trend Union, she says, has already had success consulting on design with manufacturing companies like Nissan. In the future, she wants to reach a wider audience, including housewives who would like to use their creative talents to design and make things. “I’m not here just to sell information,” says Ieyasu. “I want to help people use their creative talents.” February 2010

Construction// Building better efficiency Text Geoff Botting

ony, an analyst at an investment bank in Tokyo, recalls the first time he brought his Japanese wife back to his family home in England. It was the Christmas holiday season, and Tony had a certain item on his “to-do list” for the trip – to point out to his wife the joys of modern central heating combined with thick insulation. “Look, Sayako” he announced moments after entering his parents’ house. “It’s freezing cold outside but inside it’s nice and warm. All the rooms are warm, the hallway’s warm, even the bathroom’s warm around the clock! Not like in our freezing flat in Tokyo, eh?” he said with pride, and not a bit of smugness. His wife’s terse reply: “But in Japan, we have kotatsu”. Sayako’s assumption that a heated Japanese-style table – that warms the feet and nothing else – was somehow comparable to modern central heating left Tony scratching his head. Yet, it’s an attitude with which members of the EBC Construction Committee are familiar. Japanese homes 30

February 2010

and public buildings tend to be energy wasters. They’re inefficiently heated and air conditioned. And because they’re inadequately insulated, they leak energy like a sieve. Most Japanese occupants, meanwhile, are complacent about their discomfort and excessive energy bills. This, in a resource-poor country that sees itself as a world leader in energy efficiency. “We hear a lot of unusual arguments in Japan, such as, ‘But we like to feel the seasons,’ ” says committee member Philippe Valery, former-president of Saint-Gobain HanGlas Japan. “But then, when we go into offices in winter, the heating is on and it’s really hot. Then in summer, the air conditioning is on, and it’s really cold.” Trying to improve that situation – making buildings more energy efficient – is one of three areas on which the Construction Committee focuses. The others are public procurement, and harmonization of building standards leading to mutual recognition of market authorisations. Energy conservation has become a pressing issue in light of Prime Minister Yukio Hatoyama’s September 22 promise, at the United Nations Summit

on Climate Change in New York, to lower Japan’s CO2 emissions by 25% from 1990 levels by 2020. Cynics doubt whether that highly ambitious goal will even come close to being achieved. The committee, however, believes that the answer lies in new building construction. Why? Because, while Japanese industry is already highly energy-efficient, the construction industry is rife with inefficiency and still has vast scope for improvement. Japanese industry’s thirst for energy grew only slightly from 1970 to 2005. On the other hand, energy use by Japan’s commercial and residential buildings tripled during the same period. And it shows no signs of slowing: from 1990 to 2005 the energy use by buildings expanded by around 30%, according to The Institute of Energy Economics. “I don’t understand why such an energy-efficient country, that boasts of its energy efficiency and is good in energy savings in the automotive industry, in the electronics industry, and in solar panels, is so backward in terms of its energy-saving standards in construction,” Valery says. “The requirements in China and South Korea, for example, are much more exacting, never mind the standards in Europe.”

I n C ommittee

This issue of standards explains a lot about the shortcomings in Japan’s construction industry, and is at the centre of the committee’s advocacy efforts. In short, legally binding standards are lacking in many aspects of Japan’s construction industry. Regulators often rely merely on recommendations. General contractors in Japan – as elsewhere – are focused on cutting costs. But in Japan, the absence of standards means constructors can cut corners when it comes to environmentally friendly materials and innovations. For instance, windows in office buildings still tend to be single-glazed. In Europe, standards require the installation of double- or triple-glazed coated windows, which are up to 12 times more efficient than single-pane windows. The upfront costs may be reduced, but the running costs – passed on from the builders to the occupants – become excessive as a result. “If you offer your customer something that’s not properly insulated, then you’re offering them a really terrible product. Not just for them, but for the future generations who have to occupy the place,” says committee member Francois-Xavier Lienhart, president of

I don’t understand why such an energyefficient country … is so backward in terms of its energysaving standards in construction Philippe Valery, committee member

insulation manufacturer MAG. As for the standards that do exist, the committee wants to see harmonization between Europe and Japan. Materials made in Europe are often subjected to Japanese tests – after already having been approved in Europe under very similar standards. This double-layered process results in higher costs that hurt the competitiveness of European products in the Japanese market. Obtaining accreditation is part of this problem, as very few testing facilities in Europe are certified by Japanese authorities.

As for the committee’s advocacy efforts, it was represented at a conference in November through the European Union. Discussions were held among committee members, Japanese ministry officials and members of the Diet. “If you could sum up the concept we’re trying to get across, I think ‘sustainability’ would be the key word. Practices in the Japanese construction industry are not sustainable,” says Eric De Groot, a committee member at Forbo Flooring B.V. Japan. “There is no real consciousness of – and, therefore, no significant demand for – sustainable building in Japan at the end-user or grassroots level. Until the big contractors have a profit motive or a regulatory requirement to embrace sustainability, nothing will change.” Even so, Japan’s €363 billion construction market is clearly one worth working on, according to Gordon Hatton, committee chairman and executive officer at Bovis Lend Lease Japan. “The market is sophisticated. The general contractors are very good at carrying out projects. But it’s a tough market. Even so, we think there are a lot of opportunities here,” he says. February 2010

bag Green cred in a

Freitag

Text Christopher Thomas

February 2010

G reen B iz

a ‘recontextualised’ product, with a history of many miles on the roads of Europe

hen Freitag bags came to Japan in the mid-1990s, they were a good example of a product that had arrived before its time. A must-have item for hipsters in Europe, they got their start when two Swiss brothers began making bike messenger bags from used truck tarps: bags that were colorful, functional, durable, waterproof, and – since each is made from a different tarp – unique. Most importantly, being made of recycled materials, including bicycle inner tubes for the trim and seat belts for the straps, they had outstanding green cred. Ken Jungnickel, a former professional windsurfer based in Zushi, Kanagawa Prefecture, met the Freitag brothers while on a trip to Zurich and, impressed with their story, decided to add the products to the European bikes, snowboards and windsurfing gear he was selling through his company, Jykk Japan Inc. Over the years he has marketed the bags carefully, building a loyal customer base by sponsoring events that appeal to the target customer (young, design-oriented people into urban fashion), and selling through bike, apparel and design shops, rather than luggage stores. That way, he builds the brand and the customer base, as well as selling the products, thereby circumventing the inevitable boom-bust cycle of a hip item, and the equally inevitable copycat products eating away at his sales and weakening his brand. His marketing materials prominently feature his customers and their relationship to their bag and the company. When he first started selling Freitag, in 1996, Jungnickel had to do a lot of awareness-raising, even having to explain what a truck tarp is. “All the trucks here are enclosed in aluminium,” he notes. “Also, at that time, recycled meant cheap, and people weren’t going to pay a lot of money for something recycled, no matter how cool it was.” But in the long run smart marketing has paid off. “In Japan especially, people are sensitive to products and their meaning. Our customers know they are buying a unique, one-of-a-kind product, as well as participating in the company’s story. They like that these are a ‘recontextualised’ product, with a history of many miles on the roads of Europe.” So far, the strategy has worked well, with sales steadily increasing and Jungnickel adding a few more stores a year to his roster. Worldwide sales are steady at 150,000 units a year, and the company has branched out beyond bags into a successful line of accessories, also made of recycled materials.

FREITAG's award-winning flagship store in Zürich is built entirely of recycled shipping containers, stacked 26 meters high. Copyright: Freitag lab AG

February 2010

Whoâ&#x20AC;&#x2122;s Who

IT & Telecommunications in Japan

February 2010

The recent recession afforded yet another opportunity to polish cost-cutting strategy, but is this all that IT managers need to focus on in the first year of the new decade? It is imperative to make sure that IT spending decisions are based on – and working towards – implementing the organisation’s business objectives. Developing a bespoke IT strategy aligned with the business strategy and defining clear links between business objectives and IT contributions is critical to successful IT investment. Once the IT strategy has been determined, IT managers need to develop a technology roadmap which identifies all means to implement the IT strategy and which is closely mapped within agreed timelines. It’s anticipated that the two major focus areas for enterprise IT investment in Japan in 2010 will be ‘Service Innovation by IT’ and ‘Servicisation of IT’. An example of the former may be opening customer channels by mobile broadband – typified by WiMAX and LTE (Long Term Evolution). Enhancing the corporate unified communication infrastructure – including interaction monitoring and telepresence – is another. In order to respond quickly to the changing business environment, it’s essential to ‘servicise’ IT activities for flexibility, agility and resource efficiency. Many service providers have introduced virtualised solutions which cover components such as servers, storages, network and desktops. Virtualisation can enhance IT asset utilisation and availability improvement, while also contributing to your BCP/BCM with a more resilient IT environment. However, you also need to consider integrated design solutions and consolidated management platforms to minimize related management overhead. Implementing a Business Intelligence (BI) infrastructure can provide a real-time analytic platform to business that encourages informed and fast decision-making. However, without investing a reasonable amount of time and effort into the methods/process of input, source accuracy and integrity of the data, you may find yourself just putting garbage in a milliondollar box. Take measures to cleanse existing data, develop a data integration plan and utilise Master Data Management systems, together with linking BI output with business application systems, such as for ERP and CRM. Due to rapidly maturing and greater quality SaaS (Software as a Service) and cloud computing solutions, competitive advantage will be enhanced through IT managers’ decisions on what not to have, rather than merely well negotiated

Tsutomu Yoneyama Senior Technology Consultant, PTS Consulting

procurement of IT assets. While security and inter-operability need to be considered, IT strategies utilising externally managed IT infrastructure such as public/private clouds or SaaS stored offsite are becoming increasingly common. After achieving consensus among IT stakeholders on ‘what’ needs to be done and ‘when’ based on the technology roadmap, the focus should shift to ‘how’ and ‘with whom’ to implement the strategy. According to a recent CHAOS report, only 32% of IT projects are completed on time, on budget, and with the required features and functions. Some 44% of IT projects finished late, over budget, or not-compliant with the required functions, while the remaining 24% were considered failures. The selection of an appropriate IT project manager, who can aptly deal with a variety of stakeholders, is the most important project milestone. In smaller organisations, often the responsibility of IT decisions can fall on a single individual whose primary function is not with technology, leading to ill-informed purchasing, or vendor agreements not providing the appropriate scope of services required by the business. Such organisations may decide to source first-level support to a remote internal IT hub (e.g., regional support desk) and outsource onsite second-level support locally. Some prefer to outsource both support levels locally for convenience, or because the organisation does not have shared services in the technology domain. This has led to a niche of smaller service companies evolving with the flexibility, touch and focus the large global outsource companies cannot supply. Technology is integrated into every transaction, communication and sale. It makes sense for every business to consistently review where the ‘IT budget’ goes, and how this expenditure is enhancing business operations.

February 2010

Who’s Who // IT & Telecommunications

IT Savvy

A guide to technology investment in the new decade

Who’s Who // IT & Telecommunications

How to Run a Business’ IT An IT director’s job is to advise companies on how best to manage, implement and support their IT. There is no magic turnkey solution for every business need, however. One current goal is to be able to run a whole business from a mobile device like the iPhone – and only recently has this become possible. What makes a smartphone so smart? E-mail – the most critical IT function for any business. Microsoft Exchange 2007, for example, enables you to access mail, calendar and address book from your iPhone, as well a PC and Mac. The Exchange shared calendars can check your division manager’s schedule, as well as set meeting requests and create task requests. Exchange 2007 also auto archives old e-mail, thereby keeping client mail lean and mean. One of the other essential tools is Microsoft SharePoint which allows you to centralise, view and edit Word, Excel and PDF documents from other devices simply through a browser. Tasks can be assigned to team managers and their status checked. Links to sites you want to share can be posted, and so forth. You also can use a “software as a service” (SaaS) to allow for a complete online general accounting system, including estimates and invoices you have created on the road. For your main business, you have the ability to log into any of the workstations and servers

February 2010

on any networks that are supported in case of emergency through a secure connection on your iPhone. For security, Cisco Firewall/VPN (Virtual Private Network) allows staff to work, administer, develop and support from anywhere, including from home/iPhone, in a secure manner. The phone system can be BizPhone, which allows for a Cisco phone system to integrate with Customer Relations Management (CRM) such as saleforce. com and time track the database, as well as forward to your iPhones when on the move. Bizphone is unique as it can support all your offices in Asia, keeping costs low and keeping things easily managed via a web-based portal. All the infrastructure and servers should be in a datacenter, because datacenters are the right place for servers. You can virtualise most of your servers, allowing them to move around from hardware to hardware, creating flexibility and scalability as needed. Your datacenter has great security, loads of bandwidth, and proper environmental conditioning to keep the servers and infrastructure healthy and happy. For marketing and for your website, a CMS (Content Management System) allows you to make real-time updates to clients websites on the fly – anytime you need to. You’re able to check

David Arthur Kinney Managing Director, METHOD IT KK the results of the clients’ SEO (Search Engine Optimization) via mobile Google analytics. Your project management for website development projects can be all web-based, allowing your team and clients to check on milestones and “To Do Lists” as needed – and all of this via your iPhone – and not through the browser, but all through iPhone Apps. The key to great business IT is for all applications to have an API, be secure, backed up and accessible from any device including PCs, Macs, iPhones – or just via the web. An API (Application Programming Interface) is a function that allows software to talk to software like pieces of the business puzzle fitting together. An IT supportive team’s skills should include software development, rich internet applications, iPhone/iPad app development, database administration, intranet development, business process management, software-orientated architecture, security analysis (perimeter as well internal) server administration and, of course, bilingual support and IT management. Operations should be secure, stable, scalable and backed up, as well as multilingual and multiplatform whenever possible. Experience in many kinds of networks and businesses through the years has shown that the best IT method is simply “keep it simple”.

Who’s Who // IT & Telecommunications

BizPhone Address

5-25-1 Shimbashi, Minato-ku, Tokyo 105-0004

Tel

03-4550-2372

Fax

03-4550-2373

E-mail

jason@biz-phone.com

Web site

http://biz-phone.com

Year established

2004

Staff Size:

Contact

Jason Dibbin

Company Activities / History BizPhone offers hosted business phone systems in Japan and across Asia. We provide standard business phone packages for small to medium-sized companies, as well as large enterprise phone systems for large inbound and outbound call centers across the Asia-Pacific. Our service is a fully managed business telephony system, and we have pricing as low as 3,000 yen per extension per month with no other capital outlay. We have an advanced bilingual web interface so that you can manage your phone settings and routing without contacting our support team. BizPhone has a comprehensive yet flexible list of features and proven reliability. Whatever your requirements, small business phone system or enterprise solution, our advanced features include the following: • • • •

Virtual Conference Room Instant Call Recording Full integration with CRM for Click to Dial Download your Call Records in Excel Format (real time)

• • • •

Incoming Call Queues Interactive Voice Response Systems Full Integration with Outlook Advanced Voice Mail Options Call Monitoring (Sales Training)

eSolia Inc. Address

Otowa Bldg. 3F, 3-11-2 Otsuka , Bunkyo-ku, Tokyo 112-0012

Tel

03-5940-6880

Fax

03-5940-6881

E-mail

info@esolia.co.jp

Web site

www.esolia.com

Year established

1999

Staff Size:

Contact

Rick Cogley, CEO (rick.cogley@esolia.co.jp)

Company Activities / History eSolia is a globally minded Information Technology Management firm providing superior business-centric consulting, project and outsourcing services to a variety of blue-chip foreign and Japanese organisations in Japan and abroad. Our focus is on multicultural, multi-language organizational environments, with a vision to consistently provide our clients with just the right mix of helpful goods and services. Founders Rick Cogley and Takumi Fukuoka have been delivering services together from Japan for 16 years. In 2009, we’re pleased to say that our firm eSolia has reached its 10th anniversary with a successful track record in handling complex, high-pressure projects, and providing creative problem-solving for our clients’ challenges. Whether it’s managing a Japan IT Department as an interim CIO or a fully outsourced IT team; providing end-user support directly or over the phone; managing projects coming from mergers, acquisitions, divestitures or joint ventures; or translating a software user interface, we have the confidence to find solutions for all your systems or process challenges. Our concept is simple – our services are always standards-based, unbiased by maker affiliation, built and grown with an awareness of your business and culture, and are delivered by a team of experienced experts who act with the highest standards of ethics, professionalism and integrity. eSolia sows the seeds that help you build a strong foundation for your Japan business success and meet your commitments. Let us begin developing a long-term relationship with you today.

February 2010

Who’s Who // IT & Telecommunications

SAS Institute Japan Ltd. Address

Roppongi Hills Mori Tower 11F, 6-10-1 Roppongi, Minato-ku, Tokyo 106-6111

Tel

03-6434-3000

Fax

03-6434-3001

E-mail

JPNSASInfo@sas.com

Web site

www.sas.com/jp

Year established

1985

Staff Size:

210 in Japan

Contact

Marketing Division

Company Activities / History SAS is the leader in business analytics software and services, and the largest independent vendor in the business intelligence market. Through innovative solutions, SAS helps customers improve performance and deliver value by making better decisions faster. Since SAS was founded in the US in 1976, it has continued to enhance its software and services in response to various industry-specific business issues. SAS currently has 45,000 customer sites in 120 countries; and in Japan, about 1,500 companies have introduced SAS solutions. SAS Institute Japan, Japanese subsidiary of SAS, is approaching its 25th anniversary. To help customers achieve optimization to solve their business issues quickly, SAS elicits insight from advanced analysis and forecast, supporting accurate decision-making to survive in an era of uncertainty. SAS gives you THE POWER TO KNOW®.

PTS Consulting Address Tel Fax E-mail Web site Year established Staff Size Contact

Shinagawa NSS Bldg. 2F, 2-13-31 Konan, Minato-ku, Tokyo 108-0075 050-5532-7615 03-4496-5414 marketing@pts-consulting.jp www.ptsconsulting.com 1997 (in Japan), 1983 in London 330 Worldwide Jon Senycia

PTS Managed Services - (IT Solutions) Address Tel Fax E-mail Web site Year established Staff Size Contact

Shinagawa NSS Bldg. 2F, 2-13-31 Konan, Minato-ku, Tokyo 108-0075 050-5532-7615 03-4496-5414 marketing@pts-consulting.jp www.ptsconsulting.com 2006 20 Simon Parode

Company Activities

PTS Consulting provides world-class IT Consulting, Project Management and Mechanical and Electrical Consultancy Services to some of the world’s biggest names. Founded in 1983 we have built a strong reputation for “substance over style”. We are renowned for our impartial, vendor-independent advice, the quality of our processes and, above all, the friendly expertise of our staff. We are recognised as being the global leader in IT Relocation projects where our experience, independence, professionalism and quality of service come together in the most demanding of environments. Operating in Japan for over a decade, PTS Consulting is as well known for our technical competence as we are for our strategic thinking. We are also easy to work with - and for. We are not a ‘body shop,’ but rather offer our clients a delivery model based on a ‘best of breed’ approach with strong project leadership.

PTS Managed Services is part of the PTS Consulting Group. The PTS Managed Services - IT Solutions offering is designed to enable business growth by relieving small and medium-sized organisations of the day-to-day problems associated with technology operation, planning and management. From start-up services and operational management through to fully co-sourced solutions, PTS Managed Services works actively with its clients and, as such, provides the necessary levels of support to help keep their operations functioning smoothly, 24 hours a day. PTS Managed Services has the local knowledge on the ground to be able to assist clients with specific elements of particular IT projects, or offer ongoing IT support throughout the entire IT Service lifecycle.

February 2010

Address Tel Fax E-mail Web site Year established Contact

Computec Ichigaya Bldg. 3rd Floor, 2-20 Ichigayahonmuracho, Shinjuku-ku, Tokyo, Japan 162-0845 03-5225-7017 03-5225-7015 sales@computec.co.jp www.computec.co.jp 1991 Mr. John Lemkuil, President

Eyenoo KK Address Tel Fax E-mail Web site Year established Staff Size Contact

Cerulean Tower 15F, 16-1 Sakuragaoka-cho, Shibuya, Tokyo 150-8512 03-5456-5510 03-5456-5511 info@eyenoo.com www.eyenoo.com 2008 5 Milton Miltiadous, Managing Director

Company Activities

Computec Engineering, Ltd. is a leading provider of enterprise-level IT global solutions in Japan and Asia. Since 1991, we have worked for over 650 multinational clients in Japan and more throughout our offices in China (Beijing and Shanghai), Taiwan and South Korea. Computec’s LAN/WAN and network-security development and implementation have been at the vanguard in implementing VPN, VOIP, IP clustering and firewall security. We are one of Cisco System’s top Certified IP telephone-system vendors in Japan, and are one of the few companies with bilingual Cisco-certified IP telephone engineers. We lead the way in the use of virtual systems in Japan as a VMware-certified partner and with other VMware-compliant hardware and software companies. Our certified team’s advanced knowledge of Sun, EMC, Microsoft and Linux clustering and blade configurations enables us to make highly redundant systems. Computec also provides structured LAN cabling systems; Audio Visual design and implementation; IT Relocation Project Management; and Helpdesk, Server and Network support.

Innovative application service provider focusing on business processes. Via our SaaS model, our application is available to companies that want to improve their business processes with minimal costs through reduced investment in infrastructure and resources. For companies that prefer total control of their processes and applications, a packaged solution version is provided. Our flagship application is the EyenooRMS. It is a recruitment management service application for Clients (companies that are hiring now or in the future) and Executive Search to manage the recruitment process: Clients: Online information management and centralisation of candidate applications from the company website, internal referrals and from recruitment agents/executive search. The innovative feedback and comment system keeps track of internal comments, interview feedback and agent feedback. Executive Search: A business differentiator through implementing managed data & communication process with your clients. Improve the QoS available to your candidates by information feedback. All: Reduce loss of critical information and experience due to employee churn.

Fidel Technologies KK Address Tel Fax E-mail Web site Year established Staff Size

Cosmos Gyoen Bldg. #501D, 1-16-10 Shinjuku, Shinjuku-ku, Tokyo 160-0022 03-3351-3160 03-3351-3160 infofidel@fideltech.com www.fideltech.com/ 2002 20

Who’s Who // IT & Telecommunications

Computec Engineering, Ltd.

METHOD IT Address Tel Fax E-mail Web site Year established Staff Size

Pacific Tower Roppongi #2003, 7-6-18 Roppongi, Minato-ku, Tokyo 106-0032 03-4577-4545 03-4577-4547 info@methodit.co.jp www.methodit.co.jp 2003 10

Company Activities

Fidel Technologies KK offers business solutions that are based on proprietary as well as open source models. We aim to have technology to suit the business and the client needs, and not vice versa. We believe that the more seamless and flexible the network, the more successful the business is. Keeping ahead of the competition requires a fresh approach to building relationships, processes, and the way of doing business. Our solutions include IT services (application development, managed services), consulting services, and localized business process outsourcing (BPO) to system integrators, and small and medium-sized end-user companies. Our domains center on IT, finance, CRM & marketing, ERP, SCM, e-commerce, mobile, and localization in both English and Japanese. Fidel Technologies handles a wide range of technologies which include Microsoft (SqlServer, NET, C#, Sharepoint, Microsoft Dynamics); Opensource (php, mySql, pSql, Ruby, Linux); Oracle (Oracle EBS); IBM (Websphere, Tivoli); and Sun (Solaris, java, J2EE, J2ME). Check our latest SaaS initiative www.evaluateapps.com

METHOD IT KK provides business of all sizes with Systems Integration & IT Services: Consulting, Projects, Management, SLA, and Support and Hosting Contracts. Network Administration & Support, IT Management, IT Policy Analysis & Consulting, Exchange, ISA, SMS, SCCM, LAMP, Virtualised Servers, Cisco, Sonicwall, Symantec, Websence, ActiveSync for iPhones, Blackberry Server. Web & Code Development - Design, Development, Rich Internet Applications (RIA): FLEX, Air, and Silverlight Languages: C, C++, C#, Java, PHP, Perl, Python, and ActionScript. Frameworks: Sharepoint, DotNetNuke, Alfresco, Symfony, Hibernate, iBatis, Spring, and Struts, Database Administration MSSQL, MySQL. Data Center Co-Location - Hosting and Admin Per U and half-rack yearly contracts for Mission Critical Web & Application Servers, Disaster Recovery Office Setups, BizPhone Managed Cisco PBX Project Management, Structured Cabling,Rack Setup, Procurement of Local Hardware and Software, Inventory Services, Business ISP.

February 2010

Whoâ&#x20AC;&#x2122;s Who

Legal Services in Japan

February 2010

Management buy-outs (MBOs) and privatizations of publicly listed companies by parent companies involving the freezingout of minority shareholders contain inherent conflicts of interest for the target company’s management. This can stem from management’s desire to reduce the consideration paid to shareholders for their shares, notwithstanding the duty to maximize shareholder value. Some Japanese courts have handed down decisions regarding the “fairness” of freezeout prices, often determining that freeze-out payments to minority shareholders were insufficient. However, a court opinion issued in September 2009 suggests that the manner in which Japanese courts will review the fairness of such prices may be changing. With respect to the fairness of MBOs and privatizations, given the recent rise in these types of transactions in Japan, and increased public debate on how they ought to be carried out, the Ministry of Economy, Trade and Industry issued on 4 September 2007 certain “Guidelines on Management BuyOuts to Enhance Corporate Value and Secure Due Process”. These guidelines emphasize the need for adequate due process to achieve fairness in MBO transactions, and suggest that company boards should (without limitation): (i) properly disclose to the minority shareholders information that is relevant to the transaction; (ii) seek advice from lawyers and other outside advisors; and (iii) establish an independent committee to approve the transaction itself and the freezeout price. Although these guidelines are not technically “hard” legal requirements, they have been broadly accepted and widely followed. The Cybird Case On 18 September 2009, the Tokyo District Court delivered a decision regarding the fairness of the freeze-out price paid to the minority shareholders of Cybird Co., Ltd. (a publicly listed company that underwent an MBO). The decision is significant because it is the first case involving an MBO that occurred after the publication of the aforementioned guidelines. In the Cybird case, the court concluded that the price paid to the ex-minority shareholders was fair and rejected their request for additional compensation. In doing so, the court explained that the extent to which the freeze-out price can be viewed as the result of an “arm’s-length” determination was a key factor in its decision. Furthermore, the court also gave weight to these facts: (i) Cybird’s board obtained advice from

Asa Shinkawa Partner, Nishimura & Asahi

Atsushi Mizushima Senior Associate, Nishimura & Asahi

financial advisors and lawyers in deciding whether to approve the transaction; (ii) an independent committee was utilized; and (iii) the company disclosed adequate information to the minority shareholders. The Cybird decision is important insofar as it represents the principle that if a freeze-out price can be viewed as the product of an arm’s-length deliberation, Japanese courts are more likely to respect the proposed price and refrain from second-guessing it. As a result, boards have received additional incentives and instructions from the court to mitigate conflicts of interest as the boards structure and implement a process that will lead to a fairer freeze-out price determination. Given that the factors contained in the Cybird judgment closely resemble those found in the aforementioned guidelines (although such guidelines were not specifically cited in the Cybird decision itself), the implication may be that so long as a board strongly adheres to these guidelines, it might be able to enjoy a significant level of protection against litigation brought by disgruntled minority shareholders who get frozen-out. Also worthy of consideration is the way in which the logic of the Cybird decision might be applied to privatizations, given that privatizations involve management conflicts of interest that are similar to those in MBO transactions. Please note, however, that the Cybird decision has been stayed, pending appeal, as of the writing of this article. Therefore, higher court judgments on this matter may prove to be illuminating. February 2010

Who’s Who // Legal Services

Freeze-Out Prices and the Need for Due Process

Who’s Who // Legal Services

ARQIS Foreign Law Office Foreign Law Joint Enterprise with TMI Associates Address

Roppongi Hills Mori Tower 23F, 6-10-1 Roppongi, Minato-ku, Tokyo 106-6123

Tel

03-6438-2770

Fax

03-6438-2777

E-mail

tokyo@arqis.com

Web site

www.arqis.com

Year established 2006 Staff Size

238 through joint venture with TMI Associates

Contact

Thomas Witty, Partner

Practices & industries

Corporate and commercial law, M&A, intellectual property and media law, labour law, anti-trust, distribution and competition law, private equity, corporate reorganization, dispute resolution and litigation.

Company Activities / History ARQIS Foreign Law Office is an international German law firm with additional offices in Munich and Düsseldorf. The Tokyo office is operating as a joint enterprise with TMI Associates, one of the 5 largest law firms in Japan. It is serving foreign investors, mainly from German-speaking countries, to Japan in all areas of corporate, commercial and business law. Together with the Düsseldorf office, ARQIS also advises Japanese companies investing in Germany and Europe. The unique combination of a German and Japanese law firm offers first-class legal advice designed for today’s multinationals’ needs. Teams of legal experts experienced in cross-border transactions and proficient in the laws of their jurisdiction deliver business-oriented solutions in view of the client’s specific situation and industry background. Correspondence languages include English, German, French and Japanese.

Nagashima Ohno & Tsunematsu Address

Kioicho Building, 3-12 Kioicho, Chiyoda-ku, Tokyo 102-0094

Tel

03-3288-7000

Fax

03-5213-7800

E-mail

info@noandt.com

Web site

www.noandt.com

Year established 2000 Staff Size

352

Contact

Yuko Tamai, Jiro Mikami (Dai-ichi Tokyo Bar Association)

Practices & industries

Corporate/M&A, Finance, Corporate Governance/Compliance, Restructuring/ Insolvency, IP/IT/Entertainment, Tax Practise, Dispute Resolution, Real Estate and J-REITs, Antitrust Practise, Environmental Law Practise, Employment and Labor Practise, Overseas Support Services, China Legal Practise

Company Activities / History Nagashima Ohno & Tsunematsu is widely known as a leading law firm in Japan, and a foremost provider of international and commercial legal services. The firm represents domestic and foreign companies and organizations involved in every major industry sector and in every legal service area in Japan. The firm has structured and negotiated many of Japan’s largest and most significant corporate and finance transactions, and has extensive litigation strength spanning key commercial areas, including intellectual property and taxation. As of 31 January 2010, the firm comprises 352 lawyers (including 11 foreignlicensed lawyers) capable of providing its clients with practical solutions to meet their business needs.

February 2010

Who’s Who // Legal Services

Nishimura & Asahi Address

Ark Mori Building, 1-12-32 Akasaka, Minato-ku, Tokyo 107-6029

Tel

03-5562-8500

Fax

03-5561-9711/12/13/14

E-mail

info@jurists.co.jp

Web site

www.jurists.co.jp

Year established 1966 Staff Size

484

Practices & industries

Nishimura & Asahi’s practice can be divided into 10 principal areas—Corporate, Finance, Restructuring/Insolvency, Corporate Crisis Management, Dispute Resolution, International Trade, Antitrust, IT/IP, Trusts & Estates, Educational Services.

Company Activities / History Nishimura & Asahi’s commitment to professionalism and client service has facilitated the firm in becoming one of Japan’s leading providers of domestic and international corporate and business legal services. Nishimura & Asahi is one of Japan’s premier full-service law firms, covering all aspects of domestic and international business and corporate activity. Established through the integration of Nishimura & Partners and Kokusai Bumon (International Division) of Asahi Law Offices on 1 July 2007, Nishimura & Asahi is the largest law firm in Japan. The firm currently has 484 Japanese and foreign lawyers, and employs over 550 support staff, including tax accountants, and one of the largest teams of paralegals in Japan. Through the enhancement of professional and organisational synergies due to the expansion in scale of the firms, Nishimura & Asahi is able to share expertise and assist clients cost-effectively in all areas of legal services and provide an unprecedented level of client service in highly specialised and complex areas of commercial law. Nishimura & Asahi understands its clients’ growing needs, and its fully integrated team of lawyers and professional staff is proud to share the same fundamental philosophy: an uncompromising commitment to quality. The firm has established relationships with most major foreign investment banks with a presence in Japan and advises not only top-tier Japanese and foreign companies and financial institutions, but also Japanese administrative agencies, foreign government entities, international organisations, and new economic enterprises. It has long served leading companies in the traditional manufacturing, distribution and retail industries; and its representation of clients in the rapidly evolving communications, information technology, e-commerce and service industries is also prominent. The firm represents its international clients in the establishment of their business ventures in Japan and worldwide, and further advises Japanese companies requiring legal representation in international investment projects both in and outside Japan.

years

Advocating structural and regulatory change to benefit European companies in Japan, as well as the Japanese consumer.

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

February 2010

C ulture - S hock

teas mixed with baked roast potato, and chocolate-mint Text and photos Tony McNicol Stephane Danton came to Japan from France in 1993 hoping to work in the wine business. But although he was a qualified wine sommelier back home, he found it impossible to break into Japan’s closed wine world. So looking for another line of work, he settled on green tea. “I thought that tea was very similar to wine,” says Danton. A visit to Danton’s tea shop and café, Ocharaka, in western Tokyo, shows the refreshingly new approach he took to a traditional part of Japanese culture. The 24 kinds of tea on sale include green tea blended with natsu-mikan (a citrus fruit), and also with peach. He has teas mixed with baked roast potato, as well as chocolate-mint. “At first no one wanted to believe in me. ‘What is this foreigner doing?’ they asked.” While such avant-garde blends might raise eyebrows among green tea traditionalists in Japan, they have been a hit overseas. “We have to adapt the taste to the country we go to,” stresses Danton. “Most foreigners want to import something to Japan, but I thought it was better to export – because I understand what French people need.”

Ocharaka was even invited by the Japanese government to serve green tea at the 2008 International Expo in Zaragoza, Spain. Danton and his staff prepared 970,000 Valencia-orange flavoured cups over 93 days using 735 kilos of loose tea. Danton lives in Yokosuka with his wife and two children, and has been making the four-hour, round trip journey to Kichijoji for a decade – something he much prefers to living in the city. “That’s my time. Without such a thing I would not be in Japan.” Almost all of Ocharaka’s tea comes from the famous Kawane tea-growing area of Shizuoka prefecture, where Danton has become deeply involved in the local community. Several times a year he takes groups of customers from his shop to visit tea farms, and he hopes to set up an agri-tourism NGO. But most tea growers are already in their fifties and Danton is concerned for the future of the industry. “If we don’t do something for green tea in Japan, it will be destroyed in 15 years.”

See the full set of photographs at www.eurobiz.jp Ocharaka www.ocharaka.net/en/

February 2010

From sea to sushi Photos and text Alfie Goodrich

Tsukiji market is the embodiment of the word “frenetic.” From before dawn Tokyo’s Central Wholesale Market pulses with activity. Fishermen mix with dockhands, auction staff, food inspectors, wholesalers, shoppers and sushi masters. Each has a part to play in

February 2010

the final journey of Tsukiji’s crown-jewel catch, tuna. On arrival the fish are auctioned, the biggest and best fetching up to millions of yen. Then, still frozen, they are cut using band-saws. Next the pieces find their way to wholesalers for further

dissection – often to the exacting specifications of sushi chefs. Final preparation of the finest fish takes place on the hinoki counters of Ginza’s many sushi restaurants. And the last dispatch is by lunching salaryman. Journey’s end.

L ens F lair

See the full set of photographs at www.eurobiz.jp

February 2010

W ork P lace

Muriel Milian is marketing manager for Japanâ&#x20AC;&#x2122;s number one producer and importer of foie gras, RougiĂŠ. She talks to two-Michelin-star chef Philippe Etchebest, in Tokyo to host a foie gras workshop. Photo Tony McNicol Visit www.eurobiz.jp to see the video interview

February 2010