EURObiZ Japan January 2011

Tommy Kullberg EBC chairman

ALSO INSIDE //

FAST TRACK

Going for

Japan’s rail market opens up?

Françoise Morechand

Growth 01 The 2010 EBC White Paper

A style ambassador

2011

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

ARTESIO

速

Poggenpohl Kitchen Design Center Tokyo, 5-1-11 Minamiazabu Minato-ku Tokyo 106-0047, Tel: 03-5798-7950, Fax: 03-3280-2750, www.tokyo.poggenpohl.com

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Knowing what counts.

www.poggenpohl.com

10 Cover photograph Benjamin Parks

FOCUS 10 Going for Growth The EBC White Paper 2010.

By Paul Jackson

20 Fast track Opening the rail market would benefit EU and Japanese companies.

By Martin Koelling

CHAMBER SPOTLIGHT 2

January 2011

26 The Netherlands Chamber of Commerce in Japan continues a 400-year-old trading relationship.

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52 28

COLUMNS 7 From the Editor 9 Inbox – your letters 19 Soundbites Banri Kaieda, Minister of State for economic and fiscal policy, science and technology policy, and space policy. By Julian Ryall.

especially difficult challenge. By Geoff Botting.

33 Green Biz A panoply of green goods at Eco Products 2010.

34 Industry Experts Logistics & Supply Chain Management

25 Executive Notes How well do you understand globalisation, asks Dan Slater of the Economist Corporate Network?

28 Investing in Japan Belgian company Umicore recently arranged a Japanese government grant for a brandnew facility in Kobe. Gavin Blair reports.

30 In Committee For Europe’s aeronautics, space and defence industries, Japan’s market represents an

39 Event Report The Scandinavian Christmas Party was a night to remember.

40 Culture Shock Rob Gilhooly meets Françoise Morechand, author, style ambassador and TV personality.

43 Who’s Who Directory Media and Communications

49 Shop window Convenience stores dominate food distribution – but a saturated market means new challenges.

50 EBC Personality Timo Varhama tells Julian Ryall how he caught the “paper industry bug” at the age of three.

52 Lens Flair Deep in the Tokyo commuter belt is a remarkable feat of Japanese civil engineering.

57 Upcoming Events Europe and Japan business-related events.

58 Work Place Licensing consultant Roger Berman is president of ZenWorks

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

January 2011

3

Join+ support

Publisher Vickie Paradise Green

European Business Council in Japan (EBC)

paradise@paradigm.co.jp

The European (EU) Chamber of Commerce in Japan

Editor-in-chief Tony McNicol

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

tonymcnicol@paradigm.co.jp

Senior Editor David Umeda

Senior Vice-Chairman Michel Théoval

Art Director Paddy O’Connor

Vice-Chairman Duco Delgorge

Designer/Illustrator Akiko Mineshima

Treasurer Erik Ullner

Advertising Sales

Policy Director Bjorn Kongstad

Jay Isaac, Helene Jacquet,

Communications & PR Victoria Fang

Laura Schmelling

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

Chairman Tommy Kullberg

Creative Director Richard Grehan

Production and distribution Yumi Mitsuyama Herman Francesca Penazzi eurobiz@paradigm.co.jp

Published by Paradigm 4-18-12 Takanawa, Minato-ku, Tokyo, Japan 108-0074 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.

Executive Director Alison Murray

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 email 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.

Big in Japan: Celebrating 1st anniversaries

Contributors Paul Jackson writes about the EBC White Paper, page 10

Paul is a Tokyo-based freelance writer who covers political and economic developments in Japan for The Diplomat. Previously he spent a decade working for the Englishlanguage edition of Japan’s biggest daily,

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

Martin is East Asia correspondent for German financial daily Financial Times Deutschland. He also writes a weekly blog, and features on Asian technology for the German edition of MIT’s Technology Review magazine. And he has a long history with trains. In his childhood, he played with Märklin model trains, and as a student he worked as night-train conductor.

“Though my experiences did not turn me into a railways otaku, this fair offered a

Benjamin Parks photographs EBC Chairman Tommy Kullberg, page 10 Benjamin is a Canadian photographer based in Tokyo. He specialises in corporate and editorial portraits, as well as fashion and dance photography, and has worked

The Yomiuri Shimbun, where he reported on everything from arts and entertainment to the latest social trends.

“While working on the White Paper story I was told about a Japanese pacemaker that is in use in Germany but not in Japan. Apparently the device has yet to be approved here. Now that strikes me as very strange, even without conjuring up potentially misleading images of Japanese patients flying all the way to Europe to get a lifesaving, made-in-Japan device fitted.

If this is the result of Japan’s excessive red tape, who on earth is benefiting from it?”

Martin Koelling visits a rail industry trade show in Tokyo, page 20

fascinating glimpse into the business behind rolling-stock and tracks.”

for publications such as The Japan Times, In Style, Idealog, Columbia Law School Magazine, Simply You, Signature, Colors and other magazines.

Photographing Tommy was a great pleasure. We had a good conversation about IKEA, H&M, hiring a housewife to be a manager, and many other interesting topics. He’s got a sharp mind, a charismatic manner, and is incredibly knowledgeable about doing business in Japan.

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F rom the E ditor

Thanks The scope of the EBC White Paper – and by extension the work of the organisation itself – is astonishing. It contains 31 committee reports that identify key issues and offer recommendations for reform. It is nothing less than a blueprint for overhauling Japan’s business relations with Europe. On page 10 of this issue, Paul Jackson writes about the White Paper, the Sisyphean task of producing it, and why it is so necessary.

Our other main feature, by Martin Koelling, looks at one area where EBC pressure seems to be achieving traction: railways (page 20). Attendees at Mass-Trans 2010, Japan’s first ever rolling-stock fair, were impressed by the positive atmosphere and sense that new business opportunities are around the corner.

NEXT MONTH

3 The Good Stuff

Whisky roundtable

sometimes bewildering EU-Japan business relationship. There are many more stories yet to tell.

Many thanks to the EBC staff for their assistance and enthusiasm so far, not to mention our talented writers, photographers and designers, as well as the many EBC members who have generously given their time to cooperate with stories.

There’s a lovely – almost untranslatable – Japanese word that neatly applies here. Okagesama (thanks to you).

This issue also marks the first anniversary of EURObiZ Japan’s launch. As editor, I’m hugely enjoying my exploration of the intriguing, often surprising, 3 Sayonara Galapagos

Europeans sell iPod and iPad apps

Tony McNicol Editor-in-Chief

tonymcnicol@paradigm.co.jp

3 Committee Report

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L etters

inbox

Contact us via: eurobiz@paradigm.co.jp or www.eurobiz.jp Letters to the editor may be edited for length and style.

Applause for diversity (The right staff, December 2010) Thank you for a fantastic article that proves that change in Japan is possible, and that entrepreneurship must be at the forefront of making that change. Shinohara-san is a wonderful role model for other potential female executives in Japan and her efforts to bring more female participation in the workforce in Japan should be applauded. I hope we can see many more people like Shinohara-san stand up and build a new Japan that is full of diversity!

Steve Burson, EBC Human Resources Committee chair

Green Leaders Many thanks for the article last month on Communicating Sustainability. The Green Leaders Forum is a networking

event that we at the British Council are very happy to organise together with eQualC. This year has seen the launch of the monthly forum, which has included topics such as Green Media, CSR Sustainability Communications, Socially Responsible Investment, Eco Entrepreneurship, as well as sessions on COP 10 and Biodiversity and the COP 15 and Climate Change.

On January 17th, we will be holding the first Green Leaders Forum of 2011 at the British Council in Iidabashi (www.britishcouncil.org/japan-about-us-tokyo-centrecontact-details.htm ) from 19:00-21:00 (doors open at 6:30pm). The first GLF of 2011 will give participants an opportunity to feed into the speaking schedule for 2011 and also provide ideas for the development of the new bilingual Green Leaders website. If you are interested in attending and being part of an exciting bilingual green network, please register at http://equalc.com/en/events/139-glf11-registration.

Huw Oliphant, Head of Science and Environment, British Council Japan

The Evolution of Public Relations The environment for public relations is becoming increasingly complex.

A number of spectacular scandals – along with greater visibility of corporate activity and the activity of politicians and government – has contributed to the traditional pyramids of authority being replaced by spheres of interdependence. Nothing works in isolation anymore. People are becoming interconnected and interdependent with the stories advanced by shared interests binding them together. Never before have consumers been so closely connected with business, brands and governments.

At the same time, the traditional model for the media is breaking down.

The age of broadcasting – when mass audiences were “spoken at” – is being transformed by the digital revolution.

Information flows freely now and at speeds previously unimaginable between multiple stakeholders.

Conversations take place continuously within the sphere of interdependence.

Such a combination of interdependency and acceleration brings about a fragility of trust and reputation. No longer is it just enough for governments and businesses, or even individual brands, to build relations with their customers and other stakeholders. What is required in this era is active engagement, which represents the evolution of public relations into public engagement, building far greater trust with stakeholders.

This analysis is by no means a push for “digital media”. Public engagement can use many platforms, both traditional and digital. However, a key difference in public engagement is that traditional demographic segmentation of stakeholders is being replaced by psychographics – how people behave, rather than their age or status.

It presents an opportunity to examine how businesses, governments and brands can embrace a new dynamic to deepen communities, build increased trust – thus bringing about the kind of desired behavioural change that can lead to business success.

Ross Rowbury is President of the Japan office of Edelman, the world’s largest independent public relations firm. He has been advising companies on building success through public relations for more than 15 years. ross.rowbury@edelman.com

Going for

Growth The 2010 EBC White Paper Text Paul Jackson

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January 2011

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T

he re-entry permit is a classic example of pointless paperwork in Japan. After submitting all the documentation needed to get a working visa, applying for an additional stamp to protect you from losing your hard-earned status seems utterly absurd. It’s a waste of time, effort and money.

Foreign workers are not alone in wrestling with Tokyo’s reams of red tape.

Foreign businesses also face a daunting array of bureaucratic hurdles that sometimes border on the meaningless. This sticky web of regulatory control slows down all aspects of doing business here, forcing up costs and deterring some companies from even bothering to enter the Japanese market.

But help is at hand. Each year the European Business Council in Japan issues a report on the Japanese business environment that seeks to pinpoint pressing regulatory issues in each industry and make recommendations to the government on how to improve conditions for doing business here.

If that sounds like an exercise in

F ocus

Aeronautics & Space 3 Airlines 3 Animal Health 3 Asset Management 3 Automobiles 3 Automotive Components 3 Banking 3 Business Aviation Business Continuity Management 3 Construction 3 Cosmetics 3 Defence 3 Environmental Technology 3 Food 3 Human Resources 3

Information Communication Technology 3 Insurance 3 Legal Services 3 Liquor 3 Logistics & Freight 3 Materials 3 Medical Diagnostics 3 Medical Equipment 3 Patents, Trademarks & Licences 3 Railways 3 Retail & Wholesale 3 Sustainable Development 3 Tax 3 Telecommunications Carriers 3 Telecommunications Equipment

whistling in the wind, think again.

The impending demise of the re-entry visa (in most cases) is just one success story of the EBC’s annual report, better known as the White Paper.

“The White Paper is a catalogue for defining all these problems and a onestop shop for 27 countries [of the EU],” says EBC Chairman Tommy Kullberg, who commends the hard work of all the committees that draft recommendations for the report on behalf of 2,500 European companies.

The White Paper focuses on Japan’s maze of regulatory obstacles and other non-tariff barriers (NTBs), which restrict trade and ultimately serve as de facto protection of Japanese industry.

Kullberg argues that NTBs are not only bad for consumers in Japan looking for wider choice and European businesses looking to expand here, they’re also bad for Japanese firms and for Japan’s economy.

“Yes, it’s a wish list for European business, but there’s nothing wrong with that,” says Kullberg. “There’s a reason why we foreign companies are trading far below our international market

3

shares in Japan and why Japan is at the bottom of the OECD countries in terms of foreign direct investment: it’s these non-tariff barriers giving an advantage to local industry.

“European industry in Japan isn’t asking for any favours. We’re simply asking for a level playing field. We’re asking for competition on the same terms and conditions. That’s it.

“We’re advising the government what to do to get Japan back in business, to get growth in the economy by triggering investment. Our key point is that we need to expose Japanese industry to more competition. Lack of competition does not create any development; it freezes development.”

Kullberg gives some examples of NTBs varying from bureaucratic hairsplitting and jurisdictional overlap to policymaking interference. Must the size of a bed be measured in millimetres not centimetres, he asks. Must the firmness of its mattress be measured in newtons?

“This is largely due to the mindset of the bureaucrats. Government officials around the world tend to be January 2011

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Jakob Joergensen’s BARCA lounge chair was showcased at the 2008 International Furniture Design Competition Asahikawa, revealing the designer’s remarkable, fascinating attention to detail. The 28 pieces of plywood align into a semi-spherical shape—reminiscent of a boat—and the curling ends extend at varying lengths, giving the impression of the wood returning to its original state.

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We offer chairs, tables, sofas and cabinets manufactured to suit individual customer needs.

All of our furniture is crafted at our mill in Japan on the northernmost island of Hokkaido.

We specialise in solid and veneer wood construction using traditional techniques and modern computerised tools to create products which are uniquely styled, beautifully constructed and reasonably priced.

In Japan, Conde House has eleven shops throughout the country. Conde House has opened our own showrooms in the United States in 1984 and Germany in 2005.

Visit our shop in Shinjuku to experience other dream-inspiring interior appointments.

FOCUS

European industry in Japan isn’t asking for any favours. We’re simply asking for a level playing field

Benjamin Parks

Tommy Kullberg

cope with this bureaucratic morass.

“In Europe and the United States, we have extremely transparent rules telling you what you have to do to get a device approved. In Japan you can be told it’s not safe enough, but not why,” Kullberg says. “There’s also an enormous risk of leakage of knowledge through the certification process, because sometimes the so-called experts in the approval process are technicians close to Japanese companies.”

Achieving growth The White Paper catalogues these issues, and its recommendations for solving them essentially fall into three categories: harmonising standards; Copenhagen Economics IPSI inventory of Japanese NTMs

practitioners of systematic caution, and the Japanese seem to have perfected the art. I can go on forever with these stupid standards that don’t make any sense and are full of contradictions,” he says.

Another example he rails against is the decision to give impractical 11pm – 7am slots to European airlines at Haneda airport, while some Asian airlines have been allocated more reasonable operating times. Haneda now tops Narita as the world’s most expensive air hub, and those high charges, Kullberg reminds us, are helping to pay for the policy pipe-dream of having a gleaming (albeit empty) new airport in every prefecture.

As for trying to clear the bureaucratic minefield that accompanies a new product launch in Japan, this is a process Kullberg compares to the pastime of orienteering. Equipped with map and compass you repeatedly do your best to reach each checkpoint only to find there’s another one to get to before you arrive at your destination. You never know where and when you will reach the goal. Only firms well established in Japan have the economy of scale to

Non-tariff measure issues in manufacturing, by sector Pharmaceuticals

32

Food

24

Office equipment

20

Automotive

10

Cosmetics

7

Medical

4

Paper

4

Aerospace

2

Chemicals

1

ensuring fair competition and market access; and revising company law and the tax environment to encourage foreign investment.

This year’s 102-page document was compiled by EBC Policy Director Bjorn Kongstad. It sets out recommendations covering 31 sectors of the economy, from telecommunications and banking to cosmetics and liquor. While it isn’t intended to be a cover-to-cover read, it is a very digestible reference material.

Each committee sets out the background to its sector in a one-page summary, outlining the most pressing issues, typically three, on the facing page. Flagged for attention are new recommendations, such as introducing international standards on environmental technology or developing guidelines for investment reporting.

“The most difficult aspect of putting the White Paper together is that the final draft needs to be done in approximately one month, and with 28 committees that’s more than one per day. However, this enables us to have an up-to-date product that takes into consideration the very latest developments,” Kongstad says.

January 2011

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FOCUS

Benjamin Parks

A matter of life or death

Danny Risberg, EBC Medical Equipment Committee

As for the title of the EBC’s 11th White Paper, Going for Growth, Kongstad explains that growth is the buzzword of the year. “We wanted to show that by implementing our recommendations, Japan will indeed achieve growth.”

A copy of the report is given to all cabinet ministers, Diet representatives, members of the European Parliament and EBC members, among others. It serves as a focal point for EBC committee work, and also as a calling card when visiting government ministries.

Kullberg adds that it can help brief those doing, or about to do business in Japan, while also informing officials at company headquarters back in Europe, or EU negotiators in Brussels, of the kind of country-specific issues faced by firms in the Japanese market.

Kenko Sone, director of the international economy division at the foreign ministry’s Economic Affairs Bureau, is among those Japanese government officials who receive the White Paper.

“We very much appreciate this report and I’d like to share it with as many people as possible including politicians and the general public,” Sone says. “We get a lot of information from the European Commission and

Excessive regulatory control in the medical equipment sector is not just delaying the introduction of cutting-edge technology into Japanese hospitals, it’s making frustrated manufacturers take their devices elsewhere. The result is potentially a matter of life or death for patients in Japan.

Danny Risberg, president and CEO of Philips Electronics Japan, estimates that between 30% and 70% of medical devices in use in other countries are not available in Japan. Many firms, he says, simply don’t bother trying to gain approval for products in Japan, citing the lengthy submission process and the risk of not knowing how much of a key government reimbursement the product will be eligible for after approval, if at all.

It’s easier to make the choice to invest in China, says Risberg, who is also chair of the EBC Medical Equipment Committee.

He gives the example of a home-use INR blood coagulation monitor. The device tests a finger prick of blood and gives an internationally recognised figure that doctors can use to tailor a patient’s

EU member states, but sometimes it’s better to hear from the industry itself, the people who have been having problems doing business with Japan.

“In the EBC’s report, they have been tracking issues over many years, noting progress and stagnation. That’s a convenient advantage,” Sone says, although he points out that regulation is not necessarily just a problem for foreign businesses. “Some regulations are preventing business activities by foreigners, but I don’t know whether this is protecting Japanese industry per se. Japanese businesses are also suffering under some of these regulations.”

Other government officials with a keen interest in the report include those from the justice ministry, according to James Lawden, head of the EBC Legal Services Committee.

“There’s no doubt that it has an effect on the ministry when they see it,” says Lawden, who is a partner at Freshfields Bruckhaus Deringer, Tokyo.

“Two or three years ago the ministry said they’d like to see it before it was even finalised.”

Legal services is a sector that has seen progress during the last 12 months, with foreign law firms and

We want to get the focus back on the patient and technology that will help everyone Danny Risberg dosage of blood-thinning medication. It reduces the burden on medical facilities and keeps patients out of hospitals, but regulatory red tape keeps out of Japan this device that is standard issue in the rest of the world.

If Tokyo could at least agree on a common quality management system for approving manufacturing facilities, so that companies need not re-file for facility approval each time they have a new product, this would go a long way to improving the situation, Risberg says.

“We want to get the focus back on the patient and technology that will help everyone, rather than on finding more people to write more documents.”

joint foreign-domestic lawyer operations set to get a green light to start up additional branches in Japan.

“With so much manufacturing down in Osaka, some people have talked about opening branches there. At the moment that’s something we can’t do, but Japanese law firms have been allowed to have branches since about 2002. We said this was clearly discriminatory,” Lawden explains, adding that the ministry is now planning legislation to address the issue.

An issue of even greater concern has been the long application process for foreign lawyers. But Lawden notes that last summer a statement section in the application process was reduced in size from a whopping 37 pages to a more manageable four, and that a Japanese translation of this section is now deemed unnecessary.

Tooth and claw Yet, some committee chairmen suggest there are industry and professional associations that resist attempts to change regulations in their sectors. One chairman talks of an association that fights “tooth and claw” any move to liberalise his sector.

These kinds of groups represent some January 2011

15

FOCUS

tony mcnicol

My kingdom for a sausage

Benoit Chauvel, EBC Food Committee

of the “vested interests” blocking change to which Kullberg often refers.

The sweeping election victory of the Democratic Party of Japan in autumn 2009 created great expectations of a shakeup of the bureaucracy and even a weakening of these vested interests that seek to protect Japanese business.

In his chairman’s message in this year’s White Paper, though, Kullberg points out that with so much internal party wrangling, the DPJ has been too distracted to deliver much on its promise to put politicians in control of the bureaucrats. Still, he notes a distinct change in attitude.

“These bureaucrats have been working with the LDP and Keidanren for a long time; there’s still a deep, deep network there. You have a DPJ politician who won in the election saying to the bureaucrats, ‘Hey guys, we don’t need you!’ That same minister then asks these bureaucrats for help in doing things that might be against their beliefs or against their network. It will take a long time to change all this. It’s a process, but it’s definitely going in the right direction.”

Are you craving a tastier selection of hams at your supermarket? Are you frustrated by the slim pickings of salami and sausage at the meat counter? One reason that consumers in Japan are denied a greater choice of ready-to-eat meats from Europe is the nation’s zero tolerance of listeria traces. While in the EU the bacteria is acceptable in miniscule amounts in foods that do not provide a growth environment, in Japan any trace in any food warrants seizure by customs.

“That’s why you can not easily find really tasty foods from Europe in the supermarkets,” says Benoit Chauvel, president of food importer Nichifutsu Boeki and chair of the EBC Food Committee. “What you find has been pasteurised, sterilised or packed with preservatives.”

According to Chauvel, coming up with a common approach to dealing with listeria is a great example of how Japan and Europe could cooperate to give consumers a better choice.

But as in other sectors, making headway with the regulatory framework

Kullberg is also relatively optimistic about the potential for progress under the administration of Prime Minister Naoto Kan, who, as the foreign ministry’s Kenko Sone points out, has committed himself to greater political involvement in tackling non-tariff barriers.

Kullberg notes that he has been representing the EBC at investment roundtable talks with the prime minister and Minister of Economy, Trade and Industry Akihiro Ohata – and the thrust of what he has been saying in these meetings is the essence of the White Paper.

Re-engineering “Are we facing a pivotal change right now?” Kullberg asks, referring to the government’s interest in liberalising trade, as seen at November’s AsiaPacific Economic Cooperation forum in Yokohama. “I have survived 16 prime ministers in Japan. None of them has stood up to pick a fight with the farmers,” Kullberg says. “But the prime minister is doing that and he’s given them until June 2011 to work with the government to revitalise the agriculture

(Food in Japan) has been pasteurised, sterilised or packed with preservatives Benoit Chauvel is a slow process. In 2002 the Ministry of Health, Labour and Welfare embraced an approval priority list of 46 food additives it described as safe. Eight years later the number that had gained clearance was still only 31, an indication of how glacial progress can be even on issues earmarked for attention.

Still, this is progress, according to Chauvel, who notes that during this period the ministry has considered and approved other new additives, especially flavourings, that are not on the original list. Chauvel also says he has detected a definite change towards a speedier and more active attitude among ministry officials since the DPJ came to power.

industry and open up Japan.

“Secondly, when have we ever heard a Japanese prime minister saying we need to open up our markets to foreign competition? In the roundtable meetings, the prime minister and METI minister Ohata seriously discussed all these questions. They’re not just sitting there sleeping. In my 22 years in Japan I have never ever seen this type of dialogue.”

So perhaps we are on the threshold of major progress on White Paper issues.

While it is too early to say, at least this change in the direction of the wind may mean more officials listen to the tune of the EBC’s report.

Says Kullberg, “At the first meeting we had with the prime minister, his first sentence was, ‘Gentlemen, we need to re-engineer Japanese industry from the bottom up.’

“I would also love to hear him say, ‘We need to re-engineer our bureaucracy from the bottom up, too.’”

Do you have an opinion on this topic you’d like to share?

Please post comments at www.eurobiz.jp or send them to eurobiz@paradigm.co.jp

January 2011

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soundbites

Banri Kaieda

Minister of State for economic and fiscal policy, science and technology policy, and space policy Foreign Correspondents’ Club of Japan press conference 8 December 2010 Report Julian ryall Photo Jeremy Sutton-Hibbert

I’m an optimist by nature and when it comes to the compilation of the budget and tax revisions, these are on track – contrary to reports in the media.

I believe Japan should have made a far clearer statement of its intention to participate in the Trans-Pacific Partnership (TPP) at the recent APEC meeting in Yokohama.

The global community is about to enter a period of instability and it is important for Japan to take a firm diplomatic stance.

We have to find opportunities beyond our borders and open up to the rest of the world.

There have not yet been tangible discussions on a raise in the consumption tax and any debate will have to take place after we have resolved the issue of corporate taxes.

One approach to the consumption tax is to have the raise as a one-time event, or it could be done in a phased approach of 3% initially followed by another 2% or 3% increase at a later date. I believe that the phased approach would be most appropriate.

January 2011

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Fast

track 20

January 2011

FOCUS

Opening the rail market would benefit EU and Japanese companies alike Text Martin Koelling

V

isitors to Japan’s first international rolling stock fair got a tantalising glimpse of the untapped potential of the hitherto closed rail transport market.

Mass-Trans Innovation Japan 2010, held in November at Makuhari Messe, was tiny compared to the global industry’s biannual fair InnoTrans in Germany, but the space was packed with engineers and managers from all over Japan – and not a few exhibitors from Europe.

Many of the latter said they were overwhelmed by the interest from their Japanese counterparts and the excellent opportunities for business contacts.

Hopes are high that such contacts can help open up the Japanese market.

For decades, a handful of companies have supplied systems, components and machinery, such as brakes or equipment for the maintenance of wheels and tracks. But compared to the share European companies enjoy in other parts of the world, their presence in Japan is tiny – estimated at less than 1%.

The European Business Council in Japan has been working hard to convince Japanese partners that it is in their own interest to open up the market. The EBC Railways Committee is asking that Japan clarify its safety and procurement standards, ideally to bring them in line with international norms.

European companies are ready to do business, says committee chair Kai Taylor, general manager of the security

But it is not just about selling Japan more European technology . . . it is much more about how we can cooperate with each other globally Kai Taylor, EBC Railways Committee chair solutions and services division of Thales Japan. They want to meet, and exceed, the requirements of local customers.

But it is not just about selling Japan more European technology,” says Taylor.

“It is much more about how we can cooperate with each other globally.” He suggests that €1 billion in sales per year to Japanese companies could be possible.

Hitachi’s successful bid for an $8 billion railway project in the United Kingdom increased the pressure on Japan to reciprocate. And, judging by the atmosphere at the Mass-Trans event, Japan Inc. may finally be shifting its industrial strategy.

In the face of competition from China and South Korea, the government is pushing for free trade agreements.

And it is already aggressively promoting exports of infrastructure projects like nuclear power stations, bullet train January 2011

21

Martin Koelling

FOCUS

Rail technology on show at Mass-trans Innovation Japan 2010

technology and even the maglev superfast linear motor car.

Companies have started to look abroad because their home markets are stagnating or even shrinking.

“Recently, companies in many industrial fields feel that they have reached a dead end,” explains Yoshiyuki Kasai, chairman and representative director of JR Central. “The mood in the industry is that they are looking for breakthrough opportunities.”

But their first overseas endeavours must have been a shocking eye-opener for Japanese managers and officials.

Suddenly, but not surprisingly for industry insiders, they not only faced tough competition from Europe and other countries, they also found their technology lacking.

While Japan is still among the global leaders in rolling stock, the country lags significantly behind Europe in track superstructure and signalling, says one industry insider, who preferred not to be named.

A similar predicament faces other closed sectors of the Japanese economy, such as construction. Insulated from the pressure of globalisation by tariffs, regulations and local business practices, these industries have missed 30 years of rapid development abroad.

Now even China has managed to catch up in some fields. “In an oligopoly like the one you have in the Japanese railway industry, companies do not have the same pressure to innovate as does an open market like Europe,” said one manager at the event.

Stiffening pressures on cost and burgeoning environmental awareness in Japan might also open doors. After all, European suppliers possess unique technology that could help local railway operators increase efficiency, cut costs and reduce the impact of railroads on society and the environment.

Mass-Trans Innovation was a welcome opportunity for both sides to nurture contacts.

“We have already been in Japan for 10 years with our own sales organisation,” said Thomas Dorfner, head of international distribution for Getzner Wekstoffer, an Austrian manufacturer of railroad sleeper pads.

“Understanding the needs of your customers and fast after-service are the alpha and omega of doing business in Japan.”

Patience is another sine qua non. It typically takes five to 10 years from initial contact to final contract. In the end, patience pays off, but persistent effort is needed.

… insulated from the pressure of globalisation by tariffs, regulations and local business practices, industries have missed 30 years of rapid development abroad

Perhaps no company at the event went to as much trouble as Austria’s Plasser & Theurer to show appreciation to its customers.

The leading supplier of machinery for track maintenance in Japan had one of the trade show’s largest booths, right in the centre of the hall. It also lubricated its long-standing relationships with Japanese railway companies with Gösser draught beer and red wine from Austria.

And if the optimism of European companies at the fair proves well founded, before long there may be plenty of new business success to toast.

January 2011

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EXECUTIVE NOTES

A broad perspective What does globalisation actually mean?

It’s remarkable how these days, the supposedly familiar concept of globalisation is taking up the attention of executives, both Japanese and foreign. As one senior executive at a foreign firm in Japan pointed out to me, it’s not just that Japanese firms need to be more pro-active; foreign firms here must also decide what globalisation actually means.

His firm, for example, did not seem to be completely clear about how they were supporting their clients. The crisis had forced cost-savings on the firm. Relatively easy cost savings could be achieved by closing down the local joint venture, it was decided at the New York HQ. Given that it had always been a struggle to compete in the domestic market, this seemed a good idea.

In practice, however, the move did not provide clarity. Thus, while it made sense, in some ways, to introduce outbound Japanese companies to his company’s overseas offering, this executive suddenly found himself unable to support Western companies setting up in Japan, since he had just got rid of his local partners. So despite having just gone through the traumatic process of breaking up with his Japanese partner, he realised that he still needed his help – quite an embarrassing situation to be in.

It seems that, when it comes to globalisation, most companies are lazy, or at least unclear about what they want to achieve. They want to work with highly professional, very large companies that pay very well. But to really service such customers, you also have to provide difficult, messy local services.

You have to go outside your comfort zone. If you are a foreign company in Japan, you need to focus just as much on helping foreign companies set up in Japan as in selling your services to Japanese companies setting up in the United States or the EU. The latter is much easier, but you have to offer both in-bound and out-bound services – if you claim to be a global company, that is.

Make no mistake – providing services locally is not easy. In a market as big and as sophisticated as Japan, people have special requirements. The success of IKEA, for example, is so impressive precisely because the Swedish store has not produced any Japan-specific items. However, through investing a huge amount into market research and understanding its customers, IKEA has been extremely successful in providing the right formula to grow its sales in Japan.

For another foreign company – the manufacturer of

It seems that, when it comes to globalisation, most companies are lazy, or at least unclear about what they want to achieve.

an iconic toy series – it’s been more complicated. Having originally launched a product somewhat tailored for Japan, the Japan office came under pressure: HQ no longer wanted to fund the special manufacturing facilities needed for the Japan market.

The Japan general manager reluctantly agreed, but told his HQ that they needed to behave more like IKEA: adapt their global product offering to the Japan market, not by manufacturing “made-for-Japan” items, but by spending on advertising and marketing.

Actually, for companies bold enough to take the plunge, producing something specially for the local market can reap unexpected dividends, despite the prospect of extra upfront cost. One global logistics firm came up with a clever wheeze to capitalise on Japan’s eco-sensitivities. Instead of using pristine cardboard packaging, it started to recycle used packaging.

But in a nod to Japanese sensibilities it plastered a big gomensai (sorry) on the side of the boxes, followed by an explanation of the environmental benefits. This idea was subsequently adopted worldwide, and saved the company hundreds of thousands of dollars. This is an example of that rare phenomenon which is becoming known as “reverse globalisation” – a useful concept applied in Japan then rolled out worldwide.

Globalisation comes in many forms. It’s important for executives to distinguish which form they think is most applicable to their particular role and position.

Dan Slater Dan Slater is director of the Economist Corporate Network (www.corporatenetwork.com) in Tokyo, and you can reach him at danslater@economist.com.

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The Netherlands Chamber of Commerce in Japan 30-17 Honmoku Wada, Naka-ku, Yokohama 231-0827 Tel: 045-625-6363 Email: nccj@nccj.jp

http://nccj.jp

Management Committee Honorary Chairman: Ambassador Philip de Heer Chairman:

Jeroen Dalderop

Vice-Chairman:

Leon Halders, Chairman Deshima Business Awards Committee

Secretary:

Bruce Dönszelmann

Treasurer:

Anton Timpers

Committee Chairs: Duco Delgorge – Activities Committee

Reykjavik

ICELAND

Takeo Nishitani — External Relations Committee

Maarten Molenaar — Communications Committee

Wendela Elsen — Membership Committee

Director:

Martin van der Linden

Director:

Nobuo Takei

Director:

Hans van der Tang

Director:

Yoshiaki Yamamoto

F

Four hundred years of trade

The Netherlands’ trading relationship with Japan started over 400 years ago. And while they weren’t the first Europeans here, they were arguably the most successful, continuing trade throughout the Edo period.

“The Portuguese were first,” says Leon Halders, vice-chairman of The Netherlands Chamber of Commerce in Japan (NCCJ). “They went after the soul and the wallet, but the Dutch only went after the wallet.”

The chamber was established in 1978 and has 55 company

Oslo

members. In addition to promoting trade, it provides a range of networking opportunities.

“We want to help our companies network and improve their level of knowledge. We mostly do that by experience sharing,”

SWEDEN DENMARK

UK

POLAN Amsterdam

GERMANY BELGIUM LUXEMBOURG

CZECH REP.

FRANCE

SLOVA Vienna

Leon Halders, NCCJ Vice-Chairman (left), and Jeroen Dalderop, NCCJ Chairman

FRANCE 26

January 2011

HUNGA SWITZERLAND

Geneva

SLOVENIA

CROATIA

C hamber S potlight

says NCCJ Chairman Jeroen Dalderop.

“We would like to play a facilitating role in getting more companies here,” adds Halders. “We realise there is a barrier; it’s difficult. We would really like to reach out a helping hand.”

Halders outlines some of the challenges faced by executives at European companies already in Japan. “You need a very patient head office,” he says. “That is a major difficulty; things move at a slower pace.

“Everything you sell, you have to sell twice,” he adds. “You sell it inside Japan, and then you have to sell the concept in Holland, because it’s not exactly what head office is used to.”

Major markets for Dutch companies in Japan include food, chemicals and health care.

Dalderop gives the example of Agendia, a young Dutch company that offers innovative molecular cancer diagnosis and which recently moved into the Japanese market. “They are very courageous because entering the medical field in Japan is really an uphill battle,” he says.

He notes that the character of the NCCJ membership is changing. “We see more and more people who were here once with a big company now

start their own,” he says. “For them the chamber is very important in a different way; it is important to get business.”

“It’s never easy, but you can still make money here,” adds Halders. “There are still massive opportunities in Japan.”

Due to the ageing population, and a need for affordable solutions, business opportunities in health care are sure to crop up.

“Japan will be a country in the lead, where a lot of concepts are going to be tested,” Halders notes. Dutch companies can assist in tackling these issues with supplements, health food, and pharmaceuticals, he says.

“Japanese companies, because of their shrinking domestic market, are more open than ever to working with foreign companies,” adds Dalderop.

He predicts many more opportunities for EU firms to cooperate with their Japanese counterparts.

But ultimately, according to Halders, the problems of an ageing population will have to be tackled by the Japanese themselves.

“They are massively confronted with it,” he says, “but they are innovative, and they don’t want traditional solutions.

They will innovate themselves out of many, many problems.”

Japanese companies, because of their shrinking domestic market, are more open than ever to working with foreign companies Jeroen Dalderop Innovation is rewarded by the NCCJ at its biannual “Deshima Business Awards” ceremony. The event, named after a small Nagasaki island home to Dutch traders during the Edo period, aims to recognise both small and large companies.

At the ceremony held in Tokyo on 19 November, joint winners were cancer diagnostics company Agendia, and Randstad, a specialist in the field of flexible work and human resources services. Randstad was chosen for it’s innovative efforts to enter the closed HR field. “The Japanese labour market is extremely rigid,” says Halder, “and that rigidity prevents them solving problems.”

Ernst & Young’s Tokyo office was designed by chamber member Van der Architects

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Materials world Umicore Japan

Text Gavin Blair Photo Tony McNicol

28

January 2011

I nvesting I n J apan

O

ne common preconception about business in Japan is that there is a hollowing out of the nation’s manufacturing base. Another is that there is little support for foreign companies investing here. But Belgium’s Umicore is helping disprove both those assumptions by building a manufacturing plant in Kobe, for which it will receive a grant from the Japanese government.

The Brussels-headquartered specialist in advanced materials and precious metal recycling has a 200-year history, and a presence in Japan going back to 1926, when it began supplying cobalt to local companies. Originally a mining company with vast interests in the Congo, Umicore has evolved over the years through mergers, acquisitions and divestments to become focused on advanced materials.

These include those used in automotive catalysts, rechargeable batteries, substrates for advanced photovoltaic panels, and in semi-conductors. Umicore is also active in recycling various industrial by-products, such as electronic scrap, batteries and catalysts – from which it recovers more than 20 types of precious and special metals.

Umicore also operates the largest precious and special metals recycling facility on the planet, a Belgian plant that processes 350,000 tonnes a year from over 200 materials.

“Our business model is built around metals; we convert metals into high-tech material solutions using our competencies in chemistry, material science and metallurgy, but then close the loop by offering recycling to our customers,” explains Luc Gellens, president of Umicore Japan. The group boasts around 14,000 employees worldwide and sales of €6.9bn last year.

Umicore plans to expand its business in Japan. The company already has a small manufacturing operation for precious metals-based chemicals in Tsukuba, northwest of Tokyo, that employs 15 staff. In addition, Umicore has a 50-50 venture with Nippon Shokubai, and a joint production facility in Himeji, Hyogo prefecture, that supplies companies such as Toyota, Nissan, Honda and Mitsubishi with automotive catalysts.

When the Japanese government announced an initiative to support companies that invest in green technology, Umicore applied along with 200 other companies. Its proposal was for a plant in Kobe to manufacture materials for rechargeable batteries. Forty-two companies were awarded subsidies in the end, with Umicore being the only successful foreign applicant.

The plant in Kobe – an investment of more than ¥3bn (€26.7m) – is now under construction, and will start operations in April. The grant is for a quarter of the cost of the production equipment, over ¥500m (€4.4m).

“The subsidy is calculated by a formula and is dependent on the level of investment. Then, if the plant is profitable, the after tax profit determines how much we have to pay back,” says Gellens. “So it’s a kind of refundable grant.”

Gellens concedes that it may seem strange to be setting up manufacturing facilities in Japan when many companies, including some of Umicore’s customers, are shifting their own production overseas.

The plant in Kobe is now under construction, and will start operations in April

“But key components and materials are still designed, and often built, here in Japan. So if you want to be a supplier of the newest generation of materials, you have to be based in Japan,” he explains. “There’s a lot of co-development; everything is made to order. It’s not enough to be supplying from overseas.”

That’s why Umicore is setting up an applied technology laboratory in Kobe to undertake product development and manufacturing in close collaboration with its customers.

Gellens, who arrived in August 2009, is unashamedly upbeat about Umicore’s prospects here. “There are still a number of industrial areas where Japan is leading, and luckily we are suppliers in many of those areas.”

Even an apparent problem like the tussle over rare earth supplies could become an opportunity for the company.

“There are rare earths in one of our catalysts,” says Gellens.

“And some of the materials we recycle contain some rare earths, so it’s in our interest now to see if it’s worth extracting them.”

So far, all materials for recycling have been shipped back to Umicore’s plants in Europe, but the company is considering establishing local operations.

At some point, batteries from hybrids and electric vehicles will reach the end of their useable lives.

“There’s going to be a need to recover all those metals because there are some valuable materials there,” says Gellens. “And there are also regulations that provide a mandate for recycling them. Shipping to Europe may not be the most economical solution; there will have to be facilities in Japan.”

According to Gellens, by 2012 the company will have doubled its workforce from 2009’s levels. He says he is settling in well in Japan and sees things improving already. “In comparison with 2009, there’s a much stronger business climate, especially in the automotive sector. We can not complain; 2010 was a fairly good year for us.”

Umicore Japan 3 World HQ in Brussels 3 Active in Japan since 1926 3 Worldwide approximately 14,000 staff, in Japan around 70 3 Main products are advanced materials, including those used in automotive catalysts, rechargeable batteries, substrates for advanced photovoltaic panels and semiconductors, as well as about 20 other materials that are recycled.

January 2011

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Aeronautics, Space and Defence// The final frontier Text Geoff Botting

F

or Europe’s aeronautics, space and defence industries, Japan’s market represents an especially difficult challenge. The problem, in a nutshell, is a historic dependence on the United States for hardware.

Airbus is a case in point. Though the European manufacturer enjoys a worldwide market share of 54% for airliners, in Japan it accounts for a mere 7%. United States-based Boeing enjoys a whopping 90%.

The reason for American dominance in Japanese aeronautics and defence has a lot to do with post-war politics and security, and little to do with competition. For the last 65 years, the United States has been a close strategic ally to Japan, a situation that has led to Japan becoming heavily reliant on United States equipment to meet its aerospace and defence needs.

Even so, some members of the EBC Aeronautics, Space and Defence Committee are starting to sense a shift.

Japanese government and industry, ever so slowly, appear to be more willing to at least consider European companies.

30

January 2011

In November, Airbus reported it was hoping to secure orders for four A380 superjumbos from low-cost Japanese carrier Skymark Airlines. Bloomberg news agency reported the deal could help European plane-makers finally “pry open” the Japanese market.

It’s abnormal to do so little business with Japan Jean-Louis Claudon “Concrete moves towards a significant rapprochement with European industry have yet to be seen, but Japan’s Ministry of Economy, Trade and Industry has made efforts to at least look at Europe in the fields of aeronautics and space, and Japanese industry has started to follow along,” says committee chairman Jean-Louis Claudon, an adviser at the Tokyo office of Arianespace.

Eurocopter, for instance, is well established in Japan, with a 55% share of Japan’s civilian market and successful collaborations with local industry.

And when Japanese companies launch

commercial satellites, in a majority of cases over the last two decades they have chosen Arianespace.

Rolls-Royce, Thales and AgustaWestland have also penetrated the very difficult defence market and established collaborative relationships with Japan’s defence industry.

But in many key areas, European companies are either absent or have a very limited presence in Japan. It’s a particularly frustrating situation, as Japan is one of the world’s largest markets for commercial aircraft and helicopters.

One of Claudon’s missions as committee chairman – and the raison d’être of the 24-year-old committee – has been to rectify this situation.

The defence element of the committee was spun off on 1 January 2011 to create a new EBC Defence and Security Committee to respond to a set of new political and fiscal developments in these sectors in Japan.

Two workshops have been held to bring together executives from the relevant European and Japanese industries, as well as government officials. The first was held in November 2009 and the second on 6 and 7 December, both in

I n C ommittee

Tokyo. The idea was to get businesspeople and officials talking, submitting proposals, and figuring out funding contributions from government and industry.

In the lead-up to the first workshop, Claudon and his committee colleagues helped bring the two sides together.

“Japanese and European aerospace need an industrial relationship that has no precedent. We have to push and push. It takes time,” he says.

“Now all the parties know each other much better. The Japanese understand the European system and vice versa.”

The committee’s key aim is for Japanese industry and government to realise that European manufacturers offer hardware equal to – or better than – that from the United States.

In the 2010 EBC White Paper, the committee stresses the importance of transparency over loyalty when it comes to procurement.

More transparency would lead to lower prices for Japanese customers. Often, particularly in the area of defence, that ultimately means a better deal for Japanese taxpayers.

European defence products are generally better suited to Japan than their

Key advocacy issues k Competition. Procurement should be done on the basis of competition, not politics, and the process needs to be more transparent. k Collaboration. Japanese industry, which has long collaborated with American partners, should be more open to working with European companies as well. k Satellite Launching. The European and Japanese space agencies should sign a backup launch agreement, allowing them to back up each other’s launches, a move that would prevent launch delays and loss of government-related business.

United States equivalents, according to Claudon. “In terms of [defence] budgets, Japan is more similar to Europe than to the United States,” he says.

“Interoperability with United States forces is not a problem since it is a common requirement that Europe is very much accustomed to satisfying.”

The United States is a superpower with an arsenal designed to have an extensive reach. That is

clearly not the case for Japan’s SelfDefense Forces – nor the armed forces of European Union nations.

A bright sign for the Europeans is that the Japanese government has developed a new cost-consciousness towards defence spending. One reason is the dire state of the country’s finances. The other is the change in Japan’s government, now led by the Democratic Party of Japan, which in the past has pledged to place greater scrutiny on defence spending.

An important committee activity is organising annual receptions.

Representatives of Japanese industry are invited to a large reception room at a downtown Tokyo hotel to connect with people working for European companies. The social events have grown in size over the years, hopefully a sign of greater interest in what European companies have to offer.

“The potential is much, much bigger than what is being realised,” Claudon says. “We should do more business with Japan. It’s abnormal to do so little business with Japan, not only for this committee, but for the whole of European industry.”

January 2011

31

because there’s no place like home, especially when you’re sick.

Hospitals are excellent establishments. It’s just that no-one likes going into them unless they have to. So why not have the hospital come to the patient instead? Getting healthcare at home is a simple solution that makes patients less anxious and hospitals less crowded. Find out more at www.philips.com/because

G reen B i z

Eco Products 2010 A panoply of green goods on show in Tokyo Text and photos Tony McNicol

F

rom electric cars to microbubble soapless dogwashers, a kaleidoscope of eco-friendly ingenuity was on display at Eco Products 2010.

Held at Tokyo’s Big Sight exhibition centre, Japan’s largest environment trade show attracted 183,140 visitors over three days in December.

Many of Japan’s best-known corporate names were represented among the 1750 booths at the Nikkei-sponsored event. There were construction companies, power companies and automobile companies. Mister Donut had recyclable uniforms and cooking oil, Bandai had toy containers that could be turned into Sony

radios, and Pansonic had 3D TVs showing animation on the “diversity of life”.

There were even a few names you might not expect at an environment event, such as the Japan Atomic Energy Agency, Narita airport and the Japan Aerospace Exploration Agency. The event’s tagline hinted at the green tsunami washing over Japan: “Green x Clean Revolution! Expand the power to connect lives to the world”.

Green x Clean Revolution! Expand the power to connect lives to the world

Here are just a few examples of the products and services on show: 3 FP Corporation’s tray-to-tray recycling method is used to create new food trays collected from stores around the country. www.fpco.jp/en 3 IDEC has a microbubble generator that washes dogs without the need for soap or shampoo. Instead Wan Love Yu (dogs love to bathe) uses only water and bubbles to thoroughly and safely wash canines. www.dog.idec. com/japan/ 3 Linksinternational’s iCharge solar-powered chargers for devices work with the iPhone, iPod, PSP, Nintendo DS, as well

as other portable and mobile devices.

The chargers come in a wide variety of sizes and colors. www.icharge.links.co.jp 3 The Japan Portable Rechargeable Battery Recycling Center provides free collection and recycling services for batteries via a network of receptacles throughout Japan. www.jbrc.com 3 Japanese auto makers showcased some of the latest green vehicles, including Mitsubishi Motors’ i MiEV, a zero-emissions automobile that costs three times less to drive than a comparable petrol-fuelled vehicle. www.mitsubishi-motors.com/ special/ev.

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Industry experts | Logistics & Supply Chain Management

“We have chosen to become a ‘single point’ service provider, simplifying communication with customers and providing an even more efficient service”

Japan has always been renowned for its great level of service, developed thanks to a culture that gives extremely strong attention and importance to the customer, the “okyakusama”.

So it is easy to understand why, in Japan, customer’s expectations of your services as a logistics provider and supply chain management company are very high.

Being a logistics services provider puts you in a position where, due to customers lacking infrastructure and/ or resources, they are delegating to your company the whole management of their products, in term of both transportation and warehousing, and, quite often, distribution.

Such requests mostly come from mid- to small-sized companies where the scale of the company itself requires a flexible and multiple use of available resources, normally for sales activities rather than operational/logistics ones.

On the other hand, large multinational companies tend to be self-sufficient, with their own logistics departments and their own facilities and specialists.

Having said that, and in order to provide proper service as well as effectively assist the customer in all their procurement and related activities, a high degree of specialisation is required to guarantee smooth handling of all transactions and keep the customer’s supply chain moving.

Bearing this in mind, we have developed our food and beverage logistics

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January 2011

division within the a.hartrodt group, enhancing the value of our experience accumulated over the years and consolidating our ability to serve a market where food culture is hugely important and, at the same time, regulations and requirements are very strict.

Also, in a market where fierce competition and diversified demand have forced food and beverage importing companies to widen their products portfolio, we have chosen to become a “single point” service provider, simplifying communication with customers and providing an even more efficient service.

To cover such a sensitive role, insideout knowledge of all Japanese Health Ministry food regulations is a must.

That helps avoid long import procedures, delays that could halt the supply chain and put at risk product availability and shelf life.

Further to this, and depending on the size of the customer’s company, the logistics provider and supply chain management role calls for the ability to educate customers on all the required steps for correct import procedure, assistance in planning product orders, as well as flexibility and customisation of services. These are all aspects for which we pride ourselves on our special expertise and reliability.

That’s why the food and beverage logistics division of a.hartrodt has become our flagship service within a market segment that is developing

quickly and accompanied by the challenges of strict import regulations and high customer requirements.

We are well aware of the great level of risk management that such service requires, and understand that the current economy requires increased control and optimisation of costs. Yet we believe strongly in a “Trustworthy Expertise” approach where visibility and reliability make the cost of our services well worthwhile.

Guido Ghiselli Managing Director Sales: hisanori.kinoshita@hartrodt.co.jp yasuko.ito@hartrodt.co.jp a. hartrodt ( japan) Co., Ltd. Toranomon 1-22-13 Minato-Ku,Tokyo, 105-0001, Japan Phone: +81 (0) 3 3596 8150 Fax: +81 (0) 3 3596 8160 www.hartrodt.co.jp

Industry experts | Logistics & Supply Chain Management

“Logistics in Japan is starting to change faster than many ever expected”

“Over the past few years, several trends in logistics and supply chain management have accelerated and started complementing each other,” says Andreas Behnke, managing director of Panalpina Japan. “We are seeing the convergence of continuously improving information technology, globalisation, shorter product life-cycles, and cost-reduction pressures all influencing the supply chain in mutually reinforcing ways”.

“Because of this, logistics in Japan is starting to change faster than many ever expected,” he says, “and is posing important challenges to our customers no matter what sector they operate in”.

Rapid change in the industry represents an opportunity for a company such as Panalpina, who specialises in introducing new supply chain technologies and techniques to markets around the world. But Behnke recognises that different companies have different comfort levels and knowledge of supply chain management.

“On the one hand, we have early adopters that are proactively aligning their supply chain with their global corporate strategy, turning it into part of their competitive advantage,” he says.

“Panalpina works with these customers at the highest level, usually on a global scale, although it is not necessarily the biggest companies that have the most advanced supply chain strategies.

“On the other hand, some customers have not yet formulated their supply chain strategy and solicit our advice at

the ‘drawing-board’ stage of supply chain design,” Behnke explains. “Often we spend months, or even years, consulting with these customers before we touch the first physical operations. We see it as part of our service to offer ideas and knowledge, not just physical assets such as trucks and warehouses”.

The vast majority of companies will be somewhere between these two poles.

The most common users of third-party logistics providers such as Panalpina have a strategy, but want the concrete capabilities and experience of a third party to implement and translate the strategy into value. Naturally, as corporate supply chain strategies become more complex and integrated, thirdparty logistics providers are having to step-up the breadth and sophistication of their services.

“Panalpina has a historic strength in air and ocean freight recognised around the world,” says Behnke. “Our strategy has been to bring our warehousing and distribution activities up to this level”.

“Now that Panalpina is in a position to provide our customers in Japan best-inclass warehouse operations alongside their freight operations, we are seeing enormous interest from customers that want to integrate the two,” he adds.

“Then we start to talk about real value creation, and the realisation of the true end-to-end supply chain strategies”.

Panalpina’s advice to customers is to take a broad view of supply chain management. One Panalpina customer

stated that one of the biggest savings from switching to Panalpina’s warehouse in Tokyo has been quicker and more accurate inventory reporting; it’s now managed automatically through an interface into their ERP system. This kind of improvement has real cash value, but is often forgotten in business cases that focus on purely transactional costs.

Another Panalpina customer, a leading global lingerie retailer, commented on the importance of extending inventory visibility across the entire supply chain: “For us it’s very simple – from the time of the goods enter the warehouses from the factories, we get the data and this means there is complete visibility of the supply chain. This means we can better plan our receivables and stock inventory much better and this avoids unnecessary levels of stock being held”.

For companies that are seeking to reconcile the sometimes contradictory trends of the modern competitive environment, implementing a supply chain management strategy – and finding a partner that can help make it a reality – will be the key to success. info.japan@panalpina.com Phone +81 3 3451 7957 Fax +81 3 3451 7886 www.panalpina.com

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Industry experts | Logistics & Supply Chain Management

“No business is too big for us to handle.

No customer is too small for us to care.”

It is important that solutions are tailormade to your customers’ requirements, whether simply transportation from A to B or more complex logistics solutions.

With proactive and competitive solutions, our mission is to keep our customers one step ahead.

Our values are Simplicity, Independence, Reliability.

No matter how complicated our customers’ logistics requirements may be, our objective is to simplify these processes with dedication, knowledge and comprehensive IT solutions. It’s about their needs – it couldn’t be any simpler.

We are not dependent on any other parties to make decisions on our behalf.

Nonetheless, we continue to work with the best within the industry! With a horizontal global organisation and Scandinavian management mentality, our employees and partners are fully capable of making quick and effective decisions. It is a matter of having the right employees and competencies.

Trust is a key word within Scan Global Logistics. We strive to exceed our customers’ expectations and always deliver what we promise – at the right time and place.

In Japan, with Danish management and a Japanese operations and sales team, we service both local Japanese companies and foreign companies in 36

January 2011

Japan. The range of customers is from global industry leaders to small private companies. We have a saying: “No business is too big for us to handle. No customer is too small for us to care.”

We understand the demands and requirements of Japanese customers, as well as the European suppliers’ way of thinking. This gives us an advantage in supplying the best possible transportation solution and living up to our customers’ expectations.

One of the world’s leading pharmaceutical companies has entrusted us to handle their test studies to and from Japan. A highly sensitive and delicate logistics set up is required, where nothing must go wrong. When developing a solution, we always start by analysing our customer’s value chain so that we can optimise the entire process.

Aid & development When every second counts, cooperation between specialists is imperative to achieve fast, effective and safe distribution. We are one of Europe’s largest operators in this field, with over 35 years’ experience in emergency relief logistics, development projects and charter operations.

Scan Global Logistics is a global logistics organisation with offices and

partners all over the world. We hold a leading position not only in the Nordic markets, but also globally with a network in more than 190 countries. For more than 35 years, we have been developing a flexible international organisation, with experts within air, sea, road and logistics, providing solutions and top service within all aspects of supply chain management. We always aim to exceed our customers’ expectations!

We are wherever you need us. We support all processes in supply chain management, in every field and market.

We are experts within conventional freight, as well as vertical markets such as pharmaceuticals, furniture, ship and aircraft spares.

Scan Global Logistics opened its office in Tokyo in September 1995. With 15 years in Japan, the company has continuously expanded its business and operations. We handle cargo from any seaport and airport anywhere in Japan.

Henrik Irmov – Managing Director – hir@scangl.com General information – Tokyo@scangl.com www.scangl.com

Romantic Rendezvous Friday, February 25, 6:30 pm until late Location:

The Westin Tokyo, Galaxy Ballroom ウェスティンホテル東京「ギャラクシールーム」

Guest Chef:

Elio Orsara from “Elio Locanda Italiana” 「エリオ ロカンダ イタリアーナ」シェフ エリオ・オルサラ氏

Minimum donation per person ¥35,000, or ¥350,000 for a table of 10 seats 35,000 円／席 350,000 円／テーブル（10 席）

Still looking for volunteers to help on the day! 当日ボランティアも募集しております。

For more information please contact us at inquiries@runforthecure.org or 03-5422-8591. 詳細は inquiries@runforthecure.org または 03-5422-8591 までお問い合わせ下さい。

www.runforthecure.org

EVENT REPORT

Festive fun

Scandinavian Christmas Party 3 December 2010, Happo-en in Shirokanedai Text Tony McNicol Photos Clas G Bystedt

T

his is a great way to show how Scandinavians celebrate Christmas,” said Finnish chamber executive director Clas G. Bystedt as staff at the Happo-en in Shirokanedai began welcoming the first guests to the 18th Scandinavian Christmas Party.

Organised by the Nordic Chambers of Commerce (Sweden, Denmark, Finland, Iceland and Norway), the spectacular event is one of the highlights of the Tokyo business calendar.

“It’s always a big operation,” said Bystedt. “We bring in our own drinks and that requires some flexibility from the venue.” Over 300 chamber members plus their guests enjoyed an evening of food, drink, music and performance. As well as beer and wine there was aquavit from Sweden, Denmark and Norway, plus Finnish and Icelandic vodka.

“It’s kind of formal now, but it’s going to be very relaxed later,” said Bystedt enthusiastically. “There’s a lot of meishi exchanging at first, but after that mainly just having a good time.

“It’s always a bit of a problem getting people to go home at midnight. I had 20 people in my room until 3am last year.”

A total of 87 lottery prizes were won during the evening. The top prizes were tickets to Europe from Finnair and SAS. The star turn of the evening (a secret until the very last minute) was rakugo

artist Kaishi Katsura. Other entertainment included a Norway-inspired violin recital from Rio Yamase, rock and pop from Brad and the Hitmen and, of

There are always good spirits when Scandinavians meet Michal Louis Berg

course, a visit from Scandinavia’s most famous native – Santa himself.

This year, preparations started in June, a little earlier than usual, due to it being the event’s first time at Happo-en.

Nevertheless the room was completely full, pointed out organising committee member Taiko Nakazato of the SCCJ. “Deciding the seating arrangements is probably the most important task. We have to think about it very carefully,” she said.

Among the early arrivals enjoying glögg and ginger cookies before the main doors opened was Alison Murray, EBC executive director. “This is my fifth or sixth time and it’s really fantastic,” she said, adding that she expected the Scandinavian drinking songs to start not long into the evening.

Jens Peterson of Space Design, a serviced-apartment and office space firm, joined the Swedish chamber just last November.

“This is a great opportunity to meet people from the other chambers,” said Peterson. “Personally, I’m most looking forward to the herring, Christmas ham and glögg.”

Michal Louis Berg, executive director of the Norwegian Chamber of Commerce, was another new face, also having taken up his role in 2010.

“I’m expecting something Scandinavian and that can always be a surprise,” said Berg. “I’m looking forward to the aquavit. I’m Norwegian, but when I’m in another country, I’m Scandinavian.

“There are always good spirits when Scandinavians meet.”

Do you have an opinion about this article you’d like to share?

Please post comments at www.eurobiz.jp or send them to eurobiz@paradigm.co.jp

January 2011

39

Text and photos Rob Gilhooly

40

January 2011

C ulture S hock

I

t takes about five minutes with Françoise Morechand to understand what has made her one of the bestknown and respected foreign residents in Japan. In that time, she has fielded three telephone calls, in three different languages, and demonstrated a disarming grace and style that befits a woman who was once a manager for Chanel.

“I was made for communication,” she says. “People have referred to me as a chameleon because I can change my colour to adapt to any environment. I know how to survive. It’s something I learned from an early age.”

Morechand was born in Paris just before the start of the second world war, her mother a professor at the Académie des Beaux-Arts, her father an engineer.

Both raised her to embrace the cultures of the world and respect racial differences.

“My mother would take me to the Louvre, my father, who was very curious about world cultures, to [the anthropology and ethnology museum] Musée de l’Homme. They hid Jews in our house during the war and promoted world peace through art and science.

They never told me what I should do with my life; their actions said enough.”

When in turn she chose to dedicate her life to promoting global awareness, she made what was then an unpopular choice among globetrotting Europeans.

Morechand arrived in Japan in 1958 at a time when Japan was still viewed by many in a less than favourable light.

“Japan was still very much looked down on, but I fell in love with it immediately. The Japanese people were so wide-eyed, humble and kind. There was a hope that today seems to have vanished.”

Morechand began her professional life here as a French teacher at Ochanomizu Women’s University, before gaining celebrity status via NHK’s Frenchlanguage education programme, Tanoshii Furansugo. The programme was a hit not just with aspiring linguists, but among

young Japanese women who were mesmerised by Morechand’s panache and exotic fashion sense.

“Unlike today, people had no confidence in their appearance, their fashion.

I would change my hairstyle frequently and the media reported that women on the street would copy me. Japanese people were so hungry for Western culture and lifestyles and, as there were so few French living here in those days, I became a kind of ambassador for all things French.”

She quickly became a regular on primetime TV, where she was quizzed on anything from French food and fashion to the contraceptive pill and atomic warfare. Emboldened by her popularity, she proffered her opinions – but therein lay an unforeseen problem.

“The media didn’t want this. Young women on TV shouldn’t be intelligent.

They had to be kawaii (cute) and act as though they were stupid and hide their intelligence. But I wasn’t brought up to be this way. It was OK for a while, when I was in my twenties and thirties, but the standard of TV here was low and has, if anything, become even lower.”

Morechand, who graduated from the prestigious La Sorbonne (Paris University) with a degree in Japanese, subsequently turned her talents to the business world, first working in management for Chanel, then Christian Dior and Revlon.

She began penning essays and articles, and has authored more than 30 books, including “La Gaijine”, a best-seller in France. She also turned her hand to design, developing clothing, jewellery and ceramics that fused Japanese and European aesthetics.

“I took Japanese items such as kimono and adapted them, but I never changed their essential form,” she says. “This has always been my philosophy from my earliest years here. People here often say how wonderful my country’s lifestyle is and I always say ‘but so is yours’. Neither is better than the other; both are good.”

Morechand’s professional activities, insights into Japanese culture and her

work with numerous charities, including Médecins du Monde, and as special advisor to UNESCO Japan, have won her numerous accolades, including the Ordre national de la Légion d’honneur, France’s highest decoration.

Today her business card introduces her simply and unambiguously as a “lifestyle advisor”, a moniker she adopted after commencing a career as a public speaker and lecturer at various institutions throughout Japan.

The majority of the talks she gives are centred on her long-held belief that Japan has a key role to play in the future of the globe’s most pressing issues.

“I believe it is time for Japanese to re-examine their roots, their indigenous religion and ideologies.

I was made for communication

“In Shintoism, for example, there are gods of nature, of water, of the trees, and so on. It is the only country to experience atomic warfare. In other words it is a country that is meant to be a leader in promoting a healthy environment and world peace.

“Japanese people must remember what makes Japan so unique and special, and work towards that goal.”

January 2011

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St. Mary’s International School Brand New Campus

The 2010-2011 school year marks another important milestone for St. Mary’s International School, a boys’ school founded in 1954.

The second phase of our reconstruction project, which began in 2006-2007 with Phase I, is completed, with a new gym, art and music building, pool and cafeteria, and baseball field in full operation from August 2010. Phase III spans September 2010 to March 2011 with the opening of a new Multi-Purpose Hall and parking lot. It has been 40 years since our international school moved to its present location in the picturesque residential district of Setagaya. We have nearly 950 boys in Readiness Programme through Grade 12, representing about 55 countries.

IB regimen St. Mary’s International School provides an academically challenging high school programme with its college preparatory curriculum and optional International Baccalaureate (IB) Degree Programme.

The IB offers a comprehensive and rigorous two-year curriculum leading to examinations. The baccalaureate programme is not based on the pattern of any given country. Rather, it is a middle road between the specialisation required in some national systems and the breadth preferred in others.

The general objectives of the IB are to provide students with a balanced education, to facilitate geographic and cultural mobility, and to promote international understanding through a shared academic experience. In the more than 25 years since its founding, the IB diploma has become a symbol of academic integrity and intellectual promise. The student who satisfies its demands demonstrates a strong commitment to learning, both in terms of the mastery of subject content and in the development of the skills and discipline necessary for success in a competitive world.

St. Mary’s high school students also take advantage of the many opportunities for extra-curricular activities, and virtually all of the graduates go on to higher education, many at some of the finest colleges and universities in the world. St. Mary’s students participate in inter-scholastic competitions spread across three seasons and have won many titles in the past several years. They also enjoy intramural sports such as badminton, table tennis, floor hockey, and volleyball. The fine arts and activities include school bands and our awardwinning choirs, theatre, debate and the brain bowl.

Value teamwork

Our middle school programme places strong emphasis on the personal development of the individual, nurturing his understanding of appropriate values, his interpersonal and social skills, and his spiritual development. This is achieved through teacher-student guidance and interaction, along with an after-school programme that includes intramural activities highlighting cooperation and participation rather than competition.

Students may also join team sports to learn healthy competition and the value of teamwork.

Tapping potential Our elementary school programme seeks to develop the whole child – academically, physically, socially, spiritually and morally. The academic programme is built upon core subjects that challenge each student to achieve his maximum potential, the physical education programme to meet his growing physical needs through individual and group activities, and the religion/ethics programme to nurture his spiritual dimensions in order to foster respect, tolerance and understanding. St. Mary’s provides an outstanding array of specialist teachers and facilities: in painting, drawing, printing, ceramics, sculpture, vocal and instrumental music, Japanese language, computer, physical education and swimming classes.

Find out more, visit www.smis.ac.jp

Who’s Who

Media + Communications in Japan

January 2011

43

Who’s Who // Media + Communications in Japan

The design imperative

I

n a recession, the natural instinct is to draw inward: cut spending, slash budgets, pull back on product initiatives, and horde cash and resources.

The problem with this approach is that in a soft economy it may, in fact, be the best time to win by being creative. To leverage an investment in innovation and design thinking requires an investment not only of capital, but risk as well.

Taking a long view Design success relies on a simple formula: creativity + risk = reward.

Experience suggests that for a real hit, all three elements are required in abundance. Remove risk, and reward opportunities are diminished. Without a creative approach, risk is simply ill-advised. Too little of each, and the return may not be worth the effort.

Companies that slash investment in their innovative efforts may find that the damage to their long-term interests far outweighs the short-term financial

savings. After all, the playing field in almost every industry is now global, and the competition may not be withdrawing. For example, the annual Technology, Entertainment and Design conference (TED), held in California, is perhaps the world’s most expensive design gathering.

Despite expanding its capacity by changing venues, it still sold out in record time.

The following elements are essential to promote creativity long term: 1. Use design language to advance brand aspirations 2. Operate with a clear and focused design strategy 3. Encourage controlled chaos 4. Promote environmental sustainability 5. Create premium positioned products by delivering real value 6. Generate consumer demand by emphasising pull marketing 7. Understand tribal behaviour and rituals: narrow segmentation models do

Fred Kendall Managing Director Brand Image not define the consumers of today 8. Leverage viral influence Companies that succeed by leveraging design adhere to the counterintuitive notion that innovating quickly requires long-term thinking and preparation. This perspective is what allows capital to be aligned, efficiencies to occur, and leadership to orchestrate the efforts of diverse teams on wide-ranging assignments.

Regional differences in mindset for information

I

&S BBDO, part of BBDO Worldwide, conducted the National Consumer Value Research 2010 in May 2010, targeting 2,500 men and women aged 18-69 across Japan, and has analyzed people’s mindset for information as follows.

Most advanced mindset for information Looking at the mindset for information by region, we note the Fukuoka area scoring the highest for the item, “I adopt new or fad things rather quickly”, among the seven areas surveyed. Fukuoka also gains the highest score in the item, “I communicate with people rather actively”. Fukuokans on the southern main island of Kyushu are known to be open, free and vigorous, possessing a strong initiative spirit. This view is substantiated in the survey’s findings, suggesting that people in the Fukuoka area have a high awareness of information, love fad items, and actively communicate with other people.

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January 2011

• I adopt new or fad things rather quickly 1st place Fukuoka 33.3% 7th place Miyagi 23.3% • I communicate with people rather actively 1st place Fukuoka 46.3% 7th place Nagoya Zone 34.8% The survey shows other aspects regarding Japanese consumer behaviour in the same seven areas of the country, such as “I try visiting spots, shops and landmarks that are new or hot”; and “I catch information on new products, services and shops more quickly”. In both responses, Hiroshima was 1st, while Tokyoites surveyed were least likely to visit trendy places and Osakans in the Kansai region were the slowest to notice information on what’s new.

For further details, please visit our website at www.isbbdo.co.jp

J

apan is one of the most mediasaturated markets in the world, and Japanese media are considered a “mega-power”. There are five dominant major newspapers with large circulations, and with a couple of them even boasting the largest circulations in the world. Thus, it can be said that public relations in Japan is unique, and successful communications programs depend on the working relationships that agencies may (or may not) have with influential media.

The PR market landscape is represented by domestic agencies, which have the history, experience, and human resources to fully support their clients.

The larger, older agencies with strong media relations have around 150 to 250 PR specialists. On the other end of the spectrum, there are smaller (staffed by between 20 to 70 PR specialists) branches of international PR agencies,

which mostly serve regional and global accounts. There are also several domestic boutique PR agencies specialising in specific areas of PR. Companies in Japan are still learning how to properly utilize public relations as part of their marketing strategy, which, in turn, has been traditionally dominated by advertising. However, public relations has grown into an effective and strategic tool to communicate companies’ key messages.

Firms have finally come to realize that – in concert with the highly influential Japanese media – coverage in publications can indeed convince their current and potential customers to adopt their products and services.

Due to Japan’s uniqueness, multinationals when first entering the market often stumble in their communications strategies. Most frequently, these companies tend to group Japan with

Sakae Ohashi, CEO and President Kyodo Public Relations Co., Ltd.

the rest of Asia in terms of budget and PR approach. Yet, Japan remains one of the leading global economies, and, as a mature market, PR costs here are higher compared to the rest of Asia.

Furthermore, since most major media are based in Tokyo, media relations tends to be done face-to-face.

Leader development in Japan

D

iscussions about the development of leaders have been in vogue of late, reflecting the hardships and needs Japanese companies and the society face under a globalising environment.

Discussions mainly focus on improving programmes to develop a new type of leader who can play an effective role under these new circumstances. Such leader development programmes are very important. However, a more critical and basic challenge for Japanese society in tackling the leader shortage seems to rest with a cultural attitude deeply rooted in our society.

The most important talent required for leaders in traditional Japanese organisations has been the ability to build and maintain harmony among group members. There has been an unwritten rule of decision making by consensus, whereby decisions could only be made when unanimous agreement was possible.

The system functioned successfully

when there was economic growth without any need to make fundamental changes that could hurt any vested interest in Japanese society.

The world has changed All organisations are now required to make decisions quickly for their survival and future prosperity – and these may not necessarily garner unanimous support. A leader who is capable of making such unpopular decisions is keenly needed.

Japan’s current problem is that society still firmly believes in values of harmony and consensus, providing barriers to the development of leaders who can get the job done under the new world order.

What is the solution?

Unfortunately, I am very pessimistic about the near future. It will not be possible to succeed until a majority of people in Japanese society feel severe pain and arrive at a consensus that we

Homare Takenaka Chairman & CEO LBS Co., Ltd.

need a new way of thinking for our own survival.

We may not be able to see the new culture during even our children’s lifetime. Personally, I sincerely hope that we will be able to make the necessary changes for our grandchildren’s sake.

In the meantime, efforts to improve various current leader development programmes should continue to be encouraged.

January 2011

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Who’s Who // Media + Communications in Japan

What makes a difference here

Who’s Who // Media + Communications in Japan

Brandimage Co., Ltd. Komiya Building 3F, Mita 1-11-19 , Minato-ku, Tokyo Tel: 03-5427-8001 Fax: 03-5427-8003 E-mail: mtamura@brand-image.com or

fkendall@brand-image.com Web: www.brand-image.com Contacts: Fred Kendall- Managing Director, Makoto Tamura- Account Director Established: 1992 (Tokyo) 1947 (Cincinnati) 1971 (Paris) Staff: 250 (main offices) and 12 (Tokyo) Company Activities BRANDIMAGE is an independent design and branding boutique firm with a global network of over 20 strategy, marketing and creative professionals. BRANDIMAGE was created in 2008 by the merger of two renowned design firms: Desgrippes Gobé, an international design and branding agency headquartered in Paris, and LAGA, a major innovation and design agency based in North America.

We help our clients reveal and strengthen the personality of their brands through products, services and retail environments by creating unique brand experiences and strong emotional bonds with the consumer. This is accomplished by creating a vision for our clients’ brands – leveraging the power of insight and design to create rich experiences that are emotionally compelling and unique. To create engaging brand experiences, we offer a wide range of holistic services – from brand strategy, innovation and consumer insight; to brand identity, industrial design, package design, web design, retail experience and architecture. We give life to brands.

Destination West #205 Chateau Polaire Shibuya, 22-20 Sakuragaoka-cho, Shibuya-ku, Tokyo 150-0031 Tel: 03-3463-8565 Fax: 03-3463-7038 E-mail: naoko@destwest.com Web: www.destwest.com Contacts: Naoko Suzuki, President Established: 1983 Staff: 8 Company Activities English- & Japanese-language corporate & product advertising, research, planning, execution & tracking; media planning & buying; Internet & intranet site development; video and commercial film production, brochure & collateral print production.

Notable clients include; Toyota Motor Corp., Tokyo Stock Exchange, Eizo Nanao, Asahi Kasei Medical, New Japan Philharmonic, McGill MBA Japan, Hotel Okura, Simplex Investment Advisors, Sheraton

Hill & Knowlton Japan Roppongi-Yamada Bldg. 8F, 3-5-27 Roppongi, Minato-ku, Tokyo 106-0032 Tel: 03-4520-5800 Fax: 03-4520-5801 E-mail: HKJINFO@hillandknowlton.co.jp Web: www.hillandknowlton.com/ Contacts: Shoichi Yoshikawa, President & CEO; and Jesse Green, Executive Director Established: 1958 in Japan Staff: 30+ Company Activities A company’s most valuable asset is its reputation. A strong reputation underpins brand image, customer loyalty, market positioning, and corporate influence. Through targeted communications programs, including being one of the first in the country to effectively leverage digital media, Hill & Knowlton Japan works with executive leadership to reach out to all of an organisation’s key stakeholders in conveying the decisions and strategies that will ultimately increase corporate value and secure competitive advantage.

Our services extend far beyond just traditional media outreach activity in developing and enhancing corporate and product reputation in the marketplace. Hill & Knowlton Japan provides targeted strategic and tactical communications programming, stakeholder mapping, articulation of vision and brand values, an integrated corporate and marketing communications platform, management of special events, crisis and issues management, and media training 46

January 2011

I&S BBDO Inc. Harumi Triton Square X, 1-8-10 Harumi, Chuo-ku, Tokyo 104-6038 Tel: 03-6221-8523 Fax: 03-6221-8641 E-mail: prdiv@isbbdo.co.jp Web: www.isbbdo.co.jp Contacts: Aya Miyashita, Director of Corporate Communications Established: 1947 Staff: 463 Company Activities I&S BBDO is the Japanese arm of the BBDO Worldwide network operating in 79 countries. With over 450 employees in 10 key Japanese cities, we are the largest multinational agency in Japan.

BBDO’s Mission is to create and deliver the world’s most compelling commercial content.

We focus on providing truly holistic communication solutions to our clients and creating world-class content that has one simple goal – to influence Japanese consumer behaviour.

In an independent survey of leading advertisers in Japan, I&S BBDO ranked number one across all measured categories, and in overall agency satisfaction.

Dowa Bldg. Ginza, 7-2-22, Chuo-ku, Tokyo 104-8158

LBS Co., Ltd.

Tel: 03-3571-5257 Fax: 03-3569-0862 E-mail: g-saa@kyodo-pr.co.jp Web: www.kyodo-pr.co.jp Contacts: German Saa Established: 1964 Staff: 312 Company Activities Kyodo PR is one of Japan’s fastest growing, and largest listed independent public relations counseling firms. Our depth and level of achievement in media relations are without comparison in Japan.

Established in 1964, Kyodo PR is engaged in all aspects of public relations, including overall counseling, media relations and promotional support for marketing and consumer sales.

It is staffed with 312 employees including 260 specialists in all aspects of communications programming and planning, including professionals who have served Japanese and multinational clients across a range of industries. Our expertise covers academia, agriculture, air travel, automobiles, aviation, banking, broadcasting, chemicals, computers, consumer appliances, cosmetics, electronics, energy, entertainment, fashion, financial services, food & beverage, heavy industry, horseracing, horticulture, insurance, medicine, pharmaceuticals, regional promotion, securities, shipping, software, sporting goods, steel, telecommunications, textiles, tourism and trade promotion.

Kyodo PR is experienced in serving global clients, especially working in close collaboration with leading public relations agencies in the US, Europe and Asia.

da Vinci Tamachi Bldg., 10-5 Shiba 4-chome, Minato-ku, Tokyo 108-0014 Tel: 03-3769-1350 Fax: 03-3769-5180 E-mail: takenaka@lbs.co.jp, mchiba@lbs.co.jp Web: www.lbs.co.jp Contacts: Homare Takenaka, Chairman & CEO / Masanobu Chiba, President & COO Established: 1993 Staff: 30 Company Activities LBS’s corporate slogan is “Bringing the World to Japan and Japan to the World”.

We help foreign-affiliated companies succeed in Japan, enhance their brand image and expand their human networks by providing external affairs related services.

Notable clients include: IBM Japan, Samsung Japan, Ericsson Japan and F5 Networks Japan.

PharMa International Inc. Hamacho Center Building 9F, 2-31-1 Nihonbashi Hamacho, Chuo-ku, Tokyo 103-0007 Tel: 03-3663-5770 Fax: 03-3663-5779 E-mail: jinji_pi@pharma.co.jp Web: www.pharma.co.jp Contacts: Masaki Yamagata, President Established: 1987 Staff: 90 Company Activities PharMa International is a healthcare marketing and communications company specialising in the pharmaceutical, medical diagnostics, medical devices, and consumer healthcare fields in Japan.

We are a full-service agency dedicated to creating influential advertising and communications delivered to doctors and other healthcare specialists to build successful brands. Our services areas include advertising, brand strategy and communications, design and development of digital and online marketing tools, e-learning programs, promotional materials, medical education, visual aids, patient education materials, and planning and production of seminars and conferences both in Japan and overseas.

Notable clients include; Abbott Japan Co. Ltd., Astellas Pharma Inc., AstraZeneca K.K., Bayer Yakuhin, Ltd., Banyu Pharmaceutical Co. Ltd., Bristol-Myers K.K., Chugai Pharmaceutical Co. Ltd., Eisai Co. Ltd., Eli Lilly Japan K.K., GlaxoSmithKline K.K., Janssen Pharmaceutical K.K., Nippon Boehringer Ingelheim Co. Ltd., Novartis Pharma K.K., Novo Nordisk Pharma K.K., Pfizer Japan Inc., Schering-Plough K.K., Wyeth K.K.”

Saatchi & Saatchi Fallon Tokyo KK 4-9-3 Jingumae, Shibuya-ku, Tokyo 150-0001 Tel: 03-6438-1255 Fax: 03-6438-1254 E-mail: phil.rubel@ssftokyo.com Web: www.ssftokyo.co.jp Contacts: Phillip Rubel, CEO Established: 2003 Staff: 50 Company Activities Saatchi & Saatchi Fallon is a full-service advertising and communications company, part of the Publicis Group, and founded on the principal that creativity is an economic multiplier. Saatchi & Saatchi is among the most famous of global advertising agency networks, with ideas based on the brandbuilding strategy known as Lovemarks. Fallon is renowned as an agency micro-network based on the singular objective of using creativity to help clients outsmart the competition rather than outspend them. Saatchi & Saatchi Fallon Tokyo is the culmination of both sister agencies in Japan, providing global and local clients with world-class network resources combined with bespoke locally rooted creativity. Please visit our website to learn more.

January 2011

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Who’s Who // Media + Communications in Japan

Kyodo Public Relations Co. Ltd.

Only the best

should come

between friends

Prepared in Elio’s own food preparation facility and delivered fresh on the day of your event, all catered dishes are derived from the recipes offered at Elio Orsara’s own award-winning restaurant, Elio Locanda Italiana, uncompromisingly devoted to recreating and bringing you Southern Italy. Only the finest natural ingredients define dishes of unsurpassed quality, suitable for home catering, weddings and special events.

Elio Orsara’s personal selection of authentic and genuine Italian food and lifestyle items brings all the best products born from Italy’s ancient traditions and boundless creativity directly to your home.

Convenience stores dominate food distribution but a saturated market means new challenges

¥3,000,000

¥2,000,000

¥1,000,000

3 Since launching in the early 1970s, the two biggest chains, Seven-Eleven and Lawson, have become the largest single retailers of food overall, with other large chains close behind.

3 But saturation and lack of innovation for Japan’s 42,000 conbini have led to falls in same store sales for the past three years.

3 Four top chains make up 81.2% of stores and 84.5% of sales. Seven-Eleven leads with 27.9% of stores and 34.2% of sales.

3 The use of a “dominant area strategy” means a convenience store on almost every street corner, and leads to cannibalisation. But unhappy franchisees take most of the risk.

JC

JapanConsuming

Inagega

Sogo Seibu

Mitsukoshi

Valor

Takashimaya

Yaoko

Okuwa

Izumiya

Heiwado

Kasumi

Summit

OK Super

Max Valu West

Arcs

Tokyu Store

Mandai

York Benimaru

Isetan Mitsukoshi

Ministop

J-Front Retailing

Maruetsu

Daiei

Life Corporation

Uny

Circle K Sunkus

Ito-Yokado

Familymart

Lawson

Aeon Retail

Seven & I

Seven-Eleven

Aeon Group

0

food retailers with food sales of ¥150bn or more

SHOP WINDOW

3 Solutions to saturation include expansion into new markets and formats. Seven-Eleven is still only in 38 prefectures, up from 32 just five years ago and FamilyMart is already bigger outside Japan.

3 New formats include the more upscale Natural Lawson and a 1,000 store discount option Lawson Store 100. FamilyMart differentiates through upgraded merchandise and higher end Famima format.

3 Latest innovation is hybrid drug-convenience stores: Seven-Eleven has Ain Pharmaciez and Aeon has linked Ministop and CFS to make the Recods chain.

JapanConsuming is the leading provider of intelligence on consumer and retail markets in Japan. The monthly report provides news and in depth analysis on current trends. For more information, please see www.japanconsuming.com or contact Sally Bedown at subs@japanconsuming.com

January 2011

49

Timo Varhama Paper money Interview Julian ryall Photo Tony mcnicol

In a nutshell Title: General manager and area sales director, UPM-Kymmene Japan.

Time in Japan: 23 years.

Business career highlight: Record sales in my first year in Japan and the same again this year – although there have been numerous “valleys” in between.

Business career regret: Too many or none at all so far. Time will tell which one.

Favourite saying: “Just use common sense.”

Favourite book or music: My favourite book is Miyamoto Musashi by Eiji Yoshikawa. For music, anything by Miles Davis or Louis Jordan.

Cannot live without: Music in any form.

Most important lesson learnt in Japan: Always keep your cool (although that proves very difficult time and time again).

The secret of business success is: “Nemawashi” [consensus-building and preparation].

Do you like natto? I eat it for breakfast every time I visit my Ibaraki golf club (but that doesn’t mean I like it).

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E B C personality

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imo Varhama reckons he caught the paper industry bug at the tender age of three, but he never expected it would have him spend nearly one-third of his life in Japan. Not that he has many regrets about swapping Finland for the Far East.

Twenty years ago, Varhama took a position in Tokyo as general manager of UPM-Kymmene Japan, one of the biggest paper manufacturing companies in the world. He has seen vast changes in both business and society here in the intervening years.

And being a Finn, he says, means he has always insisted on doing things his own way.

“I grew up in a small town called Lahti, 100km north of Helsinki, that was known then for its saw mills and furniture industry,” says 62-year-old Varhama.

“It was a small place; you could bike from one end to another in 20 minutes.

Big logs were hauled to the end of a lake in barges and we used to bike over to see them being unloaded.”

Lahti was famous for producing ski jumpers, while the former Ajax Amsterdam footballer Jari Litmanen is a local lad.

Varhama’s father worked in sales and marketing for a furniture company and his grandfather worked at a local paper mill, both part of the forestry industry which was, at that time, the main export earner for Finland.

“I was fascinated from the very first time I went to see my grandfather at his work place at the age of three,” he recalls. “American-made clamp trucks were putting big paper reels onto railway wagons to go to the port and ships that would carry them to exotic overseas destinations. When I learned to read, I understood the names on the labels: London, New York, Paris, Buenos Aires.”

Varhama worked at a local saw mill as a teenager, starting in the log yard and progressing on to drawing up export documents. Later, he discovered Miles Davis and The Rolling Stones and deciding to stretch his wings away from Lahti.

The obvious move was to study business at university and find work with a forestry company.

“My first permanent job was as a sales assistant at the head office of Finnpap, the international sales organisation for UPM and several other Finnish papermakers – so you could say I am still working for the same company.”

At 24, his first customer contact was a Californian company that wanted to print Bibles, attach them to balloons and send them over the border to the Soviet Union, Varhama says.

His sales section did business with the United States, Canada, South America, Australia and Japan; he spent time living and working in Britain, Norway and twice in Australia.

Coming to Japan was a fluke, Varhama admits, as he just jumped at the opportunity when it was offered to him.

“The first Japanese customers I had met and accompanied around Finland years earlier gave me their support when I came to live and work in Japan for the first time in 1987,” he says. “One of them even wanted to arrange an o-miai marriage for me and told me ‘If you marry her, you will never have to work hard in your life’. But being a Finn, I naturally said I would have to find my own way – which I did.”

Varhama admits his knowledge of Japan, outside of his own business, was initially limited to judo and sumo and the works of Kurosawa and Mishima.

“Japan was a fascinating place in the bubble years, although I would never wish those times to come back,” he says.

“All the Japanese seemed to believe the country was on its way to becoming number one in the world; there was no limit on spending for business, whether it be for entertainment, which was fun, or investment, which was often stupid.

“When I visit China today, I see much of the same behaviour there and worry what it will all lead to.

“Of course, the old Japan was there also to be found – and still is,” he says.

“I seldom went to church in Finland except for the obligatory weddings and funerals, maybe Christmas sometimes, but I love to visit temples and shrines in Japan with my wife Mayumi. By now I have seen most of the famous ones around the country and countless others which are not that famous.”

Varhama happily says that his wife, “puts up” with him. “It’s really thanks to

At 24, his first customer contact was a California company that wanted to print Bibles, attach them to balloons and send them over the border to the Soviet Union

her that I am still here.” Their 17-year-old son, Ken, has two more years of school.

“He is more Japanese than Finnish and speaks only Japanese and English – which shows I was out with customers every night during all those important years,” Varhama says with a smile. “Still, he says he would like to keep his Finnish nationality and do his national service in the Finnish Army.

“I advised him never to become a paper salesman and, luckily, he is not inclined to business either,” he adds.

“He likes natural sciences so he could become, say, a biologist. The world seems to be realising that basic, natural things are the most important elements for a sustainable life – not making lots of money quickly or inventing new electronic gadgets.”

Varhama says he considers Japan his home now and rarely returns to Finland; the obligatory summer holiday is “a very short affair these days.”

Although Tokyo is constantly busy, Varhama likes Japan because it is safe and a pleasant place to live, plus the weather is better than in Finland – although he wishes there was some way to skip the rainy season.

“Of course, I still miss basic Finnish food and end up adding 2kg or 3kg by eating all that bread and potatoes when I’m there,” he says.

“A summer cottage with a sauna and beside a quiet Finnish lake is still an experience that thrills me every time.

But it’s all so far away and difficult to arrange, so once or twice a year is enough … and there are so many other places to see as well.”

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L ens F lair

The Parthenon of Saitama Photos and text Tony McNicol

L ens F lair

Deep in the Tokyo suburbs, behind a grey door in an empty field, and down a long narrow staircase, is a 177m by 78m cavern. Its 18m-high ceiling is supported by fifty-nine 500 ton pillars. Designed to help channel rainwater safely into the Edo river and help protect the flood-prone Naka basin, the cavern has been dubbed Saitama Prefecture’s Parthenon.

The project’s official name – the Water Discharge Tunnel on The Outskirts of the Metropolitan Area – is less charismatic. But the facility is a breathtaking feat of Japanese civil engineering. As well as the cavern, it includes five underground water storage tanks joined by 6.3km of tunnel, each large enough to house the Statue of Liberty. The system’s four pumps are driven by modified aircraft turbine engines with enough power to drain a 25m swimming pool every second.

Since its completion in 2002 the system has been used more than 60 times, saving countless residents from injury and thousands of homes from destruction.

See all the photographs at www.eurobiz.jp

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Is this a taxi?

Luxury at affordable fixed rate

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Narita & Haneda Airport Chauffeured Car Service at 25-40% off the metered taxi fare

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大前研一学長を始め、世界の経営者の指導のもと、一流の経営戦略と思考 プロセスを学び、 国際的なビジネスリーダーに成長できます。 本校は日本で唯一、文部科学省が認可した、 サイバー（インターネットや衛星 放送） ネットワークを利用した遠隔教育方式の経営大学院です。時間や場所 の制約を受けないので、 企業に在籍したまま、 いつでもどこからでも講義を受け ることが可能です。 異なるビジネス環境 （英語環境） においても 「仕事をやりぬく」 「 、結果を出すこと ができる」 人材の育成を目指した、 まさに実践的なプログラムです。 働きながら、 MBAを取得できます。

ビジネスブレークスルー大学院大学 TEL: 03-5860-5531 Email: bbtuniv@ohmae.ac.jp http://www.ohmae.ac.jp/gmba_j/

events

Upcoming events Austrian Business Council www.abc-jpn.org

ABC-JAS* ski outing Saturday 5 – Sunday 6 February Venue: Okushiga-Kogen, Nagano Fee: To be decided (members only) Contact: tokio@advantageaustria.org * Japan Austria Society

British Chamber of Commerce in Japan www.bccjapan.com

BCCJ 51 Night 20 January, Thursday, 19:00-21:00 Venue: ANA InterContinental Tokyo, MIXX Bar and Lounge, 36F Fee: ¥4,000 (members & their guests) Contact: info@bccjapan.com

Danish Chamber of Commerce in Japan www.dccj.org

Global economic growth – how strong, for how long?

French Chamber of Commerce and Industry in Japan www.ccifj.or.jp

Marketing committee – The power of the brick 18 January, Tuesday, 18:30-20:00 Speaker: Kenneth Millhouse, vice president & representative director, LEGO Japan Venue: French Chamber of Commerce in Japan, CCIFJ meeting room, 1F Fee: ¥4,000 (cash at door) (CCIFJ & DCCJ members only) Contact: reservation@ccifj.or.jp

www.iccj.or.jp

L’Italia delle regioni – second Sardinia seminar: pasta & wine 15 January, Saturday, 16:30-18:30 Speaker: Eiro Horikawa, owner and chef Venue: Trattoria Sarda Rena Bianca, Ebisu Fee: ¥3,000 (members), ¥4,000 (non-members Contact: iccj@iccj.or.jp

L’Italia delle regioni – third Sardinia seminar: main dishes & wine

Finnish Chamber of Commerce in Japan

Netherlands Chamber of Commerce in Japan

FCCJ club evening 27 January, Thursday, 19:00-21:00 Venue: Moomin Bakery & Café, Tokyo Dome City, La Qua, Korakuen Fee: ¥4,000 (members), ¥5,000 (non-members) Contact: fccj@gol.com

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Italian Chamber of Commerce in Japan

17 January, Monday, 12:00-14:00 Speakers: Michael Blom, executive wealth manager, Danske Bank International; Bo Bejstrup Christensen, chief analyst, Danske Capital; Erik Herlev, executive wealth manager, Danske Bank International Venue: Mandarin Oriental, Tokyo, Nihonbashi Fee: No charge, includes lunch Contact: dccj@um.dk

www.fcc.or.jp/

JANUARY

12 February, Saturday, 16:30-18:30 Speaker: Eiro Horikawa, owner and chef Venue: Trattoria Sarda Rena Bianca, Ebisu Fee: ¥3,000 (members), ¥4,000 (non-members Contact: iccj@iccj.or.jp

http://nccj.jp

NCCJ shinenkai 13 January, Thursday, 19:00-21:00 Venue: Roppongi Hills Club Fee: To be decided Contact: nccj@nccj.jp

FCCJ luncheon meeting

Breakfast meeting

24 February, Thursday, 12:00-14:00 Speaker: Tsutomu Okuda, Chairman & CEO, J-Front Retailing Venue: Hotel Okura, Mayfair Room, South Wing 12F Fee: ¥6,000 (members), ¥8,000 (non-members) Contact: fccj@gol.com

26 January, Wednesday, 8:00-10:00 Speaker: Rudie Filon, Head of Press, Public and Cultural Affairs Section, Delegation of the European Union to Japan Venue: Deshima Lounge, Netherlands Embassy in Japan Fee: To be decided Contact: nccj@nccj.jp

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Luncheon meeting: lotgenoten, partners in circumstance* 23 February, Wednesday, 12:00-14:00 Venue: Rabobank & Robeco office, Otemachi Fee: ¥2,000 (members) Contact: nccj@nccj.jp * Open exchange on challenges in creating partnerships

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

January luncheon 20 January, Thursday, 12:00-14:00 Speaker: Hiromichi Shirakawa, chief economist, Credit Suisse Securities (Japan) Venue: Hotel Okura, Kensington Terrace Fee: ¥8,000, or one SCCIJ voucher 2011 Contact: sccij@gol.com

Compiled by David Umeda

January 2011

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W ork P lace

Roger Berman Managing Director, ZenWorks Licensing Consultancy Entrepreneur Berman has twenty-plus years of character and brand licensing under his belt, having marketed a wide array of properties, including the iconic Paddington Bear. “I advise content owners in Japan, Europe and the United States hoping to build licensing in this exciting â‚Ź138 billion global market.â€?

Photo Tony McNicol

www.paddingtonbear.com

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