EURObiZ Japan June 2011

Instant coffee, steady success Nestlé Japan

Does Japan need nuclear power?

Selling kawaii – character licensing Dan Slater worries about stress

Kozo Takaoka Nestlé Japan

06

2011

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

24 Cover photograph Benjamin Parks

FOCUS

8 Roundtable | Changed plans Business continuity preparations reassessed

By Geoff Botting

12 Donations doing good in Tohoku The work of PH-Japan and the All Japan Hospital Association

By Tony McNicol

18 Selling kawaii The world’s second-largest licensing market

By Andy Sharp

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June 2011

2352 3032 COLUMNS 7 From the Editor

30 Culture Shock

48 Shop Window

16 Q&A

Professional rakugo artist Diane Kichijitsu travelled from her home in Osaka to evacuee centres in Tohoku.

Facebook gains traction through offering something different. By Roy Larke.

Does Japan need nuclear power?

David McNeill talks to energy industry commentator Paul J. Scalise.

21 Executive Notes Dan Slater worries about the psychological effects of the earthquake.

32 150 years German companies are celebrating a century and a half of business in Japan.

By Rob Goss.

49 Upcoming Events Events for the European business community in Japan.

49 EBC committee schedule

39 Green Biz

50 EBC Personality

French Chamber of Commerce and Industry in Japan president, Bernard Delmas.

That stalwart of the Japanese office, the fax machine, has gone eco. By David McNeill.

Christoph Saxer is a passionate linguist and long-distance runner.

24 Investing in Japan

40 Event Report

23 Chamber Voice

From instant coffee to wasabi KIT KATs. Justin McCurry visits Nestlé Japan

28 In Committee The EBC Banking Committee has weathered the financial crisis and is still pursuing reform. By Geoff Botting.

Giving Back to Japan was a joint-chamber event held at the Mandarin Oriental Tokyo.

41 Who’s Who Directory Recreation and Relaxation

52 Lens Flair Alfie Goodrich photographs Japan’s rainy season.

54 Work Place John MacGoey is managing director of Hella Japan.

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

June 2011

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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

Chairman Tommy Kullberg

Creative Director Richard Grehan

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

Production and distribution

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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.

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Big in Japan: Oktoberfest in May

Contributors Justin McCurry reports on Nestlé Japan, page 24

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TOKYO HIROO ROTARY CLUB welcomes business and professional men and women to Tokyo’s intercultural Rotary society

Justin is the Tokyo correspondent for The Guardian and The Observer newspapers in London. He also reports on Japan for Global Post and The Christian Science Monitor, and contributes to The Lancet medical journal, as

Andy is an independent journalist and translator based in Tokyo. He regularly contributes business and current affairs articles to publications including The Diplomat and JAL’s in-flight magazine, Skyward. He worked as a staff writer for The Daily Yomiuri for four years, and has written for the video game and semiconductor industries.

“The sheer scale of the character licensing business here surprised me. All the European characters that do well, such as

Fellowship in Community and International Service Meetings: Thursdays 12:30-1:30 at Roppongi Hills Club Information: 03-5789-2592

Alfie Goodrich photographs scenes of the rainy season, page 52 British photographer Alfie’s work covers commercial photography, photojournalism

well as other publications in Japan and the UK. He spent several years working as a copy editor and reporter for the The Daily Yomiuri in Osaka before joining The Guardian full time in 2003.

“As a journalist who writes mainly at home and keeps odd working hours, I get through my fair share of coffee. Admittedly, my preference is for the filtered type, but a Barista machine would probably see plenty of action in my apartment. As for KIT KATs, despite the huge range of flavours on offer in Japan, nothing has ever come close to the good old milk chocolate version.”

Andy Sharp investigates the big business of kawaii, page 18

Peter Rabbit and Miffy, seem to have a timeless appeal.”

and various points in between. He is freelance, shooting for commercial and editorial clients in Japan including: the Wall Street Journal, the BBC, TIME, Q Magazine, Highlighting Japan and many more.

“Four years of shooting people with umbrellas and neon, in the rain, wind, snow and typhoons have almost killed several cameras. It’s worth the effort though.”

www.rougie.jp www.rougie.com

FROM TH E EDITOR

V for recovery Two pieces of good news just as our June issue heads off to the printers. The 20th EU-Japan summit at the end of May produced agreement, in principle, to start preliminary discussions on a “deep and comprehensive free trade agreement”. The EBC and its committees will be working closely with the Commission to identify issues for potential inclusion. The next six to nine months will be an exciting and busy time.

The other piece of good news is that the predicted V-shaped recovery from the crisis may be just round the corner.

Japanese government figures show that factory output rose 1% in April from the previous month.

Much, of course, will depend on whether TEPCO provides enough power during the summer season of peak demand – but perhaps we can be cautiously optimistic that industry will rise

NEXT 3 Summer in the city Saving energy MONTH

to the challenge of energy saving.

On the topic of energy, Germany has pledged to phase out nuclear power by 2022. It seems that when Fukushima sneezed, Germany caught a cold. In our Q&A this month we ask energy analyst Paul J. Scalise, “Does Japan need nuclear power?” (page 16). He argues that it does.

Germany now faces the same challenge as Japan, and perhaps other nations: namely, to wean itself off nuclear without burning more fossil fuels. The International Energy Agency has warned that 2010 emissions are nearly nudging a level that – according to UN climate change talks – was not supposed to be reached until 2020.

Renewable energy technology makers here will face tough competition from their German counterparts.

Meanwhile in Japan, after 11 March, many companies are assessing the 3 Green biz

Waterless urinals

effectiveness of the contingency plans they implemented during the crisis.

Geoff Botting hosts a roundtable on business continuity planning (page 8).

We’ve all learned that no amount of preparation is too much.

Lastly, on page 12, I report from Miyagi prefecture. Earlier this month I travelled there with NGO PH-Japan to see how money from the EBC’s disaster relief fund is being put to use.

As the many of you who have visited Tohoku will know already, the scale of the destruction is staggering and humbling – but so too is the scale of the relief effort.

Tony McNicol Editor-in-Chief

tonymcnicol@paradigm.co.jp

3 Event Report

Social media during the crisis

Roundtable

Changed plans Business continuity preparations reassessed Moderated by GEOFF BOTTING Photos JEREMY SUTTON-HIBBERT

Business continuity is about keeping a business functioning in an emergency so that basic services continue to flow to customers, suppliers, the authorities and others. For many companies in Japan, such preparations were put severely to the test on 11 March.

Four business continuity planning managers discuss the effects of 3/11 and the state of BCP and business continuity management in Japan. R

8

June 2011

FOCUS What did companies in Japan learn from the 11 March disaster?

Shigeki Honda: It was important in terms of companies filling the gap between what their business continuity planning (BCP) stated and what actually happened. If companies did have problems or difficulties with their existing BCP, then this event served as a great chance for them to upgrade, modify or improve their plans.

Daniel Goh: I think this disaster has heightened awareness, particularly from the management perspective. It made management realise the fear factor and that business continuity was a very real thing. As a result, I think companies’ management are now willing to spend more money in order to be more resilient and prepared.

We learned a lot of lessons, including from the human perspective and from the perspective of preparing the infrastructure.

Andreas Gehrmann: I think things are going in two directions. People are relaxing again because, for them, the disaster is over; and maybe they think nothing drastic will happen again for the next 30 years. On the other hand, I think pressure from their customers or suppliers [to be better prepared] will increase because something that was once considered abstract turned out to be real.

Jenny Furstenbach, manager of passenger sales at Scandinavian Airlines System (SAS)

Shigeki Honda, general manager and chief consultant at InterRisk Research Institute & Consulting

Andreas Gehrmann, senior expert at TÜV Rheinland; BCM, ISMS and risk management expert

Daniel Goh, manager of the enterprise risk management division at ING Life Insurance

members and corporate internal matters.

Goh: We learned that transport and communications are key. One of the assumptions we made was that you can continue your business from a backup site in Osaka or somewhere else. But after you move your decision-makers to the new site, if you can’t then bring them back to the original office, you basically have to stop business.

And then there were the communications problems. We found out that you can’t rely on a single communications system. Maybe walkie-talkies are a solution, at least for the main decisionmakers at the company.

A positive result of the disaster is this pressure, from the outside, to be competitive as a supplier and convince your customers that even in a worst-case scenario, you can handle the situation.

Jenny Furstenbach: Airlines have their own perspective. We are quite used to disasters because we have to deal with them from time to time. We operate as a real service, not a virtual service – we have aircraft that need to get to their destinations.

So airlines are one of the few businesses where budgeting for business continuity is very important. That’s because safety is our No. 1 priority. A lack of business continuity planning can actually destroy an airline.

We didn’t have any staff in Sendai or suffer any physical damage, so we were incredibly lucky. But for us, this disaster, which happened outside Tokyo, was a kind of dry run for our own planning, and we were able to determine what worked and what didn’t.

So is it still a good idea for foreign companies with a limited presence in Japan to set up backup sites?

Gehrmann: One solution for disasterrecovery sites is cloud computing. I think IT companies offering cloud computing will now have a lot of opportunity to grow.

What specifically did you learn as a result of the disaster?

Gehrmann: Facebook was an incredibly effective communication tool. We set up a private Facebook group, which effectively supplemented our corporate [communications] system. We could exchange information on private matters, such as employees’ family

What are the challenges of implementing BCP here?

Honda: We have extreme density in Tokyo, and that can cause problems for fire-fighting, etc., due to such factors as narrow streets. That means the recovery stage, the first few days after a disaster strikes, will require extra effort.

On the other hand, corporate people

June 2011

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FOCUS

Tips from the experts on being prepared

FACEBOOK WAS AN INCREDIBLY EFFECTIVE COMMUNICATION TOOL

> Assign someone in the office to monitor NHK news and to give everyone updates > Make sure the battery of your satellite phone is always charged

Andreas Gehrmann

> Know beforehand whom you’re supposed to call first and have that person’s number ready > Make a list of the tasks, ranked by priority, that need to be done in the first moments are well organised. Many use BCP. Goh: People here have been taught about disasters from youth. So there isn’t a big need to educate them further.

Japan is easy from a human perspective.

How aware of business continuity issues are Japanese companies?

Honda: My company did a survey last year, and it found that about 60% of all listed Japanese companies had a business continuity plan or were working on one. It also showed that 87% believed their partners should have a plan, but only 14% had actually asked them for one. Now, however, in the wake of the disaster, more and more of those companies will be asking their partners for plans.

Gehrmann: There’s a huge difference between business continuity planning and business continuity management. I think the understanding of the difference is still almost zero. BCP is having a plan in place and ensuring that it’s updated.

But business continuity management (BCM) is an integral part of a company’s management, and it means that business continuity is understood as an overall process. In general, companies still do not embrace the BCM approach, because to implement BCM properly can be a very demanding task for top management.

The link to management is often not part of the management culture. It’s much more complex than just thinking about your own business, because you have supply-chain and other issues involved.

services to Narita, yet background radiation levels in the Kanto region have remained well below danger levels.

What were the reasons behind the airlines’ decisions?

Furstenbach: We did not suspend our flights here, which is something we’re proud of.

We educated our crews about such things as radiation levels, and we made it optional for crews to work the routes to Tokyo, but we never had problems with this anyway – there was never a shortage of volunteers.

But, several European governments had travel advisories telling their citizens to avoid travel in Japan.

That put the European airlines in a weird situation – employers were telling employees it was safe while their governments were telling them something else.

We all know about the so-called flyjin phenomenon. Did many foreign companies and their employees in Japan overreact to the disaster?

Gehrmann: I think cultural factors were involved. For example, Germans are very nervous about radiation and they tend to be distrustful of official data. Then there are the family pressures, including those from your home country.

Many people were told doomsday scenarios during their long-distance phone calls. So even if you are calm and rational, the others around you may not be. I think the flyjin phenomenon is a complex issue, and needs to be addressed in every business continuity Some of the foreign airlines responded to the Fukushima disaster by suspending plan in international settings.

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June 2011

Furstenbach: The media in your own country also plays a role. There are many different nationalities in my office, and everyone consumes media from their countries, and the nuances in the reporting are different. So everyone had a different picture of the situation during our meetings.

This is another lesson we learned – that the impact of differing perceptions is large.

Honda: I also think the Japanese government should have communicated the situation better, particularly to foreigners.

Many Japanese companies, such as Toyota Motor, are reporting financial losses stemming from the disaster, specifically due to disruptions in their supply chains. Was this preventable?

Honda: Many of the companies had good BCP. But this disaster was just too big. The Tohoku area has a lot of small and medium-size companies that supply big corporations with such products as engine and electronics parts, and the average car has around 20,000 to 30,000 parts. Now is the time for us to realise that our BCP cannot be complete without that of our partners.

Gehrmann: In the automotive industry, not being able to get a product as simple as a door handle can be devastating.

Goh: You will always have a limit on how much you can plan. So you will always have hurdles between what you have in mind and what can practically be implemented. So you can say, “We’re all prepared for BCP.” But in reality, you’ll never be 100% ready.

PROMOTION

Thinking quickly Infineon Technologies Japan’s contingency plans met the challenge

Yasuaki Mori President, Infineon Technologies Japan K.K.

R

ecent events in Japan have demonstrated to the business world that simply having a Plan B plan is not enough.

Even having a Plan C to fall back on is sometimes insufficient, according to Yasuaki Mori, president and representative director of Infineon Technologies Japan K.K. And that’s when a company needs to think on its feet.

“We learned that even the best-laid plans can fall apart when a crisis strikes,” said 49-year-old Mori. “You have to have a resilient system in place, but you can never be completely prepared for these situations, and even with the best business continuity plans it pays to have a backup to the backup.”

The Japanese arm of Infineon – a German company that provides semiconductor solutions in the areas of energy efficiency, mobility and security – has been able to draw many lessons from the events of 11 March.

“We had a BCP that we tested a couple of years ago, when there were concerns about the SARS epidemic, so we tested dial-in conference calls and live log-ins for all staff from their computers at home,” said Mori, whose hometown is Geneva.

“It did not go as smoothly as planned, but we learned from

it. We learned that we needed several layers of plans, but when things do break down that is when you need to be able to write your own rules.

“The ideal situation is to have a clear chain of command for when a crisis strikes,” he said. “But we now know that when that fails, people have to act independently yet continue to try to share information and communicate.”

Alexander Trost, vice president and CFO, agrees.

Alexander Trost Vice President and CFO

“We activated our plans this time and we went through a tough experience,” he said. “I now know that we need to have more disaster drills because not all the staff knew how to react.”

Crucially, Trost says the company now knows that staff require the leadership to show that they care about employees and that they are communicating, while management should also give fewer options in a crisis situation. If the employees are confident that their leaders are in control, then they have

new confidence in the decisions that are being taken.

On the day of the Great East Japan Earthquake, neither Mori nor Trost were in the office, but senior executives quickly took the initiative and instructed the 110 members of staff at the company’s Osaki offices what to do.

With phone lines out of action, gathering information on the whereabouts and safety of staff was the biggest hurdle, Mori said, but efforts were quickly made to find supplies of food and water and to get people home. With railway lines halted, many of those who lived too far away from the office were placed in local hotels, while the rest camped out on the 22nd floor of the office building.

Over the following days, many of the staff were relocated on a voluntary basis to Nagoya and Osaka, a process that entailed securing office space and accommodation for staff, including family members.

“It was safety first, without a doubt,” said Mori.

“Employees who feel secure are the most productive, and when they know they are working in a safe environment then they are more dedicated to that job.”

Mori believes that the support of the home office is also crucial; Infineon’s headquarters in Germany

continues to provide objective and tightly focused analyses of the situation surrounding the Fukushima Dai-Ichi nuclear plant.

And as a member of Japan’s corporate society, Infineon has been active in providing support to the people of the areas hardest hit by the triple disasters of earthquake, tsunami and nuclear crisis.

The company has made donations through the Japanese Red Cross and Second Harvest, sent humanitarian equipment and food supplies to the affected areas, and staff have carried out a number of fund-raising events.

Employees who want to volunteer by donating their time are given special leave days.

“Japanese technology is so prominent and important around the world, but these disasters brought those supplies to a halt,” said Mori.

“A lot of foreign companies are learning from that and are going to be diversifying their supply bases.

“Japan has to take that on board as well,” he said. “This can be a wake-up call for Japan – that it also has to diversify.”

www.infineon.com June 2011

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FOCUS

Donations doing good in Tohoku The work of PH-Japan and the All Japan Hospital Association Text and photos TONY MCNICOL

I

n the devastated city of Kesennuma, a local clinic acts as a temporary administrative centre for emergency medical relief. Twenty-six teams from all over Japan gather here each morning to exchange information about the local situation and find out where they can help best. It is one of many such centres in Miyagi prefecture.

A few minutes before 8am, people start to file into the meeting room past a sign telling them to shake mud off their boots. One corner of the room is given over to a makeshift pharmacy, the rest to long tables that soon fill up. More people stand behind. The volunteers wear colour-coded vests: red for doctor, yellow for administrative staff, green for nurses, blue for pharmacists.

The facility also functions as a centre for volunteers helping clear debris and mud left by the tsunami. By the time the meeting finishes, a long line of masked, rubber-booted, spade-carrying young people has formed outside. The teams of medics jostle past on their way to evacuation centres, hospitals and care homes.

Two teams are from the All Japan Hospital Association (AJHA), the work of which is being supported by the EBC via Peoples’ HOPE Japan (PH-Japan).

PH-Japan was founded in 1997 as the Japan offshoot of the international NGO Project HOPE. With the exception of the 2004 Niigata earthquake, its work to date has been overseas, including helping victims of the 2005 Sumatra tsunami and the 2008 earthquake in Indonesia. It has a long-standing relationship with the AJHA, which supports its work in South-East Asia.

But the 11 March disaster prompted both organisations to urgently consider how they could help in their own country.

The AJHA has 218 member hospitals in the disaster area, half of which were damaged, and six destroyed. The organisation responded by sending their first team three days after the earthquake – and over 100 teams since.

Typically, each team is made up of one doctor, two nurses and an administrator who spend three to six days in the disaster area. The money donated by EBC members via PH-Japan is used for transportation and accommodation for those teams.

PH-Japan has also transported to Tohoku goods such as sanitary towels, blankets and stationery, as well as PCs and printers from Hewlett-Packard Japan.

I travelled to Kesennuma with Toshio Kimura, president of PH-Japan, and Masaru Yokoo, general manager, in early May. The day before they had driven up from Tokyo with a car load of supplies for the medical centre.

After the meeting, we head out to the disaster-hit area.

Nearly two months after the quake, the coast still looks like the tsunami could have struck yesterday. Only the rust on the tangled girders and wrecked cars tells of the time that has passed.

Our destination is the Shunpoen home for the elderly in Motoyoshi. Located about 25m above sea level, it survived the 17m high wave that struck this part of the coast; June 2011

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FOCUS

SEVERAL OF OUR STAFF HAVE FAMILY MEMBERS WHO ARE STILL MISSING Kayoko Sugawara

although areas just a short drive downhill were almost completely destroyed.

Physiotherapist Yasuhisa Arai, a member of one of the AJHA teams, is treating patients at the home. Each morning and evening he travels two hours to and from his accommodation in Mizusawa city. His usual job is at the Saiseikai Central Hospital in Tokyo.

He says there’s an urgent need for physiotherapists and other medics; today he’ll see 70 people at the home. Before the disaster, there were two doctors based nearby, but after helping deal with the disaster’s immediate aftermath they were unable to continue. Now the nearest medical facility is 40 minutes away, much too far for many of the residents to travel.

“This area was already short of doctors before the earthquake,” says Arai. “Noone knows what will happen when the volunteer medical staff go home.”

Those medics now mainly treat chronic illnesses. As Arai explains, there were relatively few injuries to treat even immediately after the disaster. Tragically, it was almost exclusively the healthy and mobile who managed to escape.

Doctors were often left the grim task of helping identify bodies and causes of death.

Arai says that he can physically feel the strain placed on not only the home’s residents, but also local people and relief staff.

“The muscles of people here have seized up,” he says. “They have been on the move non stop since the earthquake. Some can’t even take baths.” Nearly two months after the quake, the home for the elderly still doesn’t have running tap water.

The challenge over the next few months, says PH-Japan’s Kimura, will be to get local medical infrastructure functioning. The AJHA plans to start repairing and rebuilding hospitals in the disaster area. But on top of the physical destruction, hospitals face significant financial difficulties.

With administrative systems wrecked, facilities can’t

collect money from patients, who in any case are mostly receiving medical care free of charge from the volunteer teams.

“The local medical authorities will have to be independent eventually, but getting the balance right between proper care for the patients and financial security for hospitals is difficult,” says Kimura.

Kayoko Sugawara is manager of Shunpoen, which is normally home to around 50 elderly people. Following the quake they made room for 100 residents and evacuees from the local area.

Neighbours on high ground close to the home say they saw it disappear beneath the tsunami, and feared the worst – although Sugawara believes that must have been spray thrown up as the waves hit land.

“I didn’t see the tsunami myself,” she says, “but I could hear the sound of homes being smashed.”

Ten minutes after the quake their electricity was cut off and, like their telephone lines, wasn’t restored until the end of March. She’s not expecting to have running water before June. The home only had food to last three days after the quake, but a local supermarket helped them secure three meals a day for residents.

Soon after the tsunami, Sugawara and other staff evacuated patients to an area of higher ground close by. Those who could walk did, while staff pushed other residents in their wheelchairs or on their wheeled beds. It was snowing heavily at the time, but they only returned inside at 5:30pm, almost three hours later.

Sugawara tells how around one in four of their 52 staff lost their homes in the disaster and 10 resigned in the days following the quake to look after their families. The home was only able to keep going thanks to assistance from volunteer staff.

“Several of our staff have family members who are still missing,” says Sugawara calmly. “They go to look for them on their days off.”

June 2011

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Does Japan need nuclear power?

David McNeill talks to energy industry commentator Paul J. Scalise Photo JAMES FERRARA

Paul J. Scalise is a fellow at the Institute of Contemporary Asian Studies, Temple University, Japan, and contributing analyst to Oxford Analytica and the Economist Intelligence Unit. Formerly a Tokyo-based financial analyst of Japanese energy companies, his forthcoming book on Japan’s electric power restructuring is based on his doctoral dissertation at the University of Oxford.

What does Fukushima mean for Japan’s energy policy?

Since the 1973 oil shock exposed its energy vulnerabilities, Japan has prided itself on being able to juggle multiple objectives and satisfy multiple participants simultaneously. The question is: can they still keep all of these balls in the air?

Whatever the decision, it will not be popular. The country is divided. On one side, Keidanren is joined by various 16

June 2011

business organisations and industries around Japan who have made their thoughts clear: nuclear power is needed, and prices cannot go up. The ministries of economy, trade, and industry (METI), environment and finance agree. On the other side are mostly local host communities and a few anti-nuclear lobbies.

If the prime minister is serious about “going back to the drawing board”, one should watch carefully the fate of the

two nuclear power plants currently under construction: Shimane No. 3, owned and operated by Chugoku Electric Power Company in Shimane prefecture and Ohma No. 1, owned and operated by the Electric Power Development Company in Aomori prefecture.

Both projects took over 10 years to site and build, cost billions of yen in construction, and would cost the taxpayer even more to decommission.

Q&A

WILL [THE JAPANESE MEDIA] CONTINUALLY FOCUS ON THE NEGATIVE ASPECTS OF NUCLEAR POWER IN THE MONTHS AND YEARS TO COME?

Can Japanese capitalism survive without nuclear power?

No. The economics of energy and the current state of renewable energy-generation technology are not suitable for a major shift within the next 10 to 30 years because of the need to accommodate the stable, predictable demand by Japanese industry and residential consumers for power at low, affordable prices.

Nuclear power constitutes 30% of the total installed capacity of the 10 electric power company service regions – 22% if currently off-grid nuclear plants are excluded. METI would like to increase that to 50% by 2050, with 12 additional plants in six prefectures currently in the planning stages.

Obviously, the nuclear crisis has delayed those plans. Some argue that renewable energy’s time has finally come. But there are several problems.

Nuclear power runs 24 hours a day, and theoretically grows cheaper over time. That makes it economically more

attractive compared to conventional thermal power sources fuelled by coal, liquefied natural gas (LNG) and heavy oil.

The energy economics bear this out.

Nuclear power costs TEPCO ¥6.1 per kilowatt-hour (kWh); hydroelectric power costs ¥7.9 per kWh; thermal power costs ¥9.1 per kWh; and renewable energy a whopping ¥30.5 per kWh. Some cite the positive efforts made

by Germany with solar power, Denmark with wind power, and Iceland with geothermal power as examples of what Japan could do. What renewable energy proponents neglect to mention is that geography plays an important role in these efforts.

For instance, is Japan windy enough with the available requisite space to host wind farms large enough to power industry and overlook the danger it poses to birds – and the fact that it is uneconomical compared to fossil fuels and nuclear power?

Why do you think Prime Minister Naoto Kan asked for the Hamaoka plant to be closed?

I think it was more about politics than economics or energy. The public needed to be reassured that steps were being taken to prevent a similar tsunamirelated disaster from happening at other nuclear power plants.

The approval ratings of the Kan cabinet had been deteriorating rapidly month on month since he had taken office in June 2010. Calls for his resignation were increasing. Something had to happen. Hamaoka was a sacrificial lamb.

The official rationale originated with the prediction that it faced an 87% chance of an earthquake of magnitude eight or higher in the next 30 years, according to the Headquarters for Earthquake Research Promotion.

The same organisation reported that the probability of a similar magnitude earthquake occurring at Fukushima Daiichi was zero, calling into question the scientific validity of their probability estimates.

I am sceptical that Kan is serious. His predecessor, Yukio Hatoyama, also made bold speeches two years ago about national energy policy and greenhouse gas emission targets. The Democratic Party of Japan was barely in office for three months before they denied subsidies to renewable energy projects.

Kan cannot unilaterally decide Japan’s national energy policy. Kan has no legal authority to close the plant, nor does METI Minister Banri Kaieda. The decision must come from Chubu Electric’s board of directors. Ultimately, they decided to comply after taking into consideration the company’s supply-demand balance, backup energy sources and financial situation.

Everything now depends on the Japanese media. Will they continually focus on the negative aspects of nuclear power in the months and years to come?

That is the essential question.

Outside Japan, will Fukushima kill off the global nuclear renaissance?

Unlikely, but it largely depends on the image of nuclear power. An award-winning study by political scientists Frank Baumgartner and Bryan Jones found a strong correlation between media depictions of nuclear power and the eventual policy outcomes.

In the United States during the 1950s and 1960s, for example, nuclear power was largely viewed by the media as safe.

After the Three Mile Island accident in 1979, Chernobyl in 1986, and a series of lesser scandals worldwide (including in Japan), this media image slowly shifted in focus to the negative aspects: mushroom clouds, radioactive fallout, leaks, waste, and the like.

The underlying facts never changed much over the past 50 years; what changed was the journalistic emphasis.

Far more people die each year from coalmining accidents, fossil fuel-generated air pollution, and on-site accidents than at nuclear power plants. Yet, it is the negative image of nuclear power – the uncertainties of radioactivity and the possible carcinogenic effects – that scare local populations into believing that it is more dangerous than conventional power.

Currently, the media depictions of nuclear power in India, Korea, and China continue to focus on the economics of energy, citing logistics and crossnational commitments to reduce carbon footprints.

Do you have an opinion on this topic you’d like to share? Please post comments at www.eurobiz.jp or send letters for publication to eurobizletters@paradigm.co.jp

June 2011

17

Selling kawaii European characters are hot properties in the world’s second-largest licensing market Text ANDY SHARP Photos TONY MCNICOL

C

haracters are ubiquitous in Japan.

They are used to help sell everything from mugs to overseas holidays, but behind their adorable façades lies the hefty property licensing industry.

According to License! Global magazine, the worldwide licensing market in 2009 was worth $182.4 billion (as big as railway construction). And Japan is the world’s second-largest market, with Character Databank, a marketing company, valuing it at ¥1.58 trillion in 2009 – bigger than either the shoe or mobile-content market.

The entertainment and character sector accounted for 18.27% of the global licensing market in 2009, according to EPM Communications.

The share in Japan is probably higher.

The International Licensing Industry Merchandisers’ Association (LIMA) defines a licence as “an agreement through which a licensee leases the rights to a legally protected piece 18

June 2011

of property from a licensor – the entity which owns or represents the property – for use in conjunction with a product or service.”

Ownership of a licence for a popular character property can bring large monetary rewards. So it is important to consider why character properties such as Miffy and Peter Rabbit are such huge hits in Japan.

“Uniqueness is a crucial trait for a character property,” says Roger Berman, proprietor of ZenWorks, a Tokyo-based licensing consultancy.

“Hello Kitty’s unique point is that she doesn’t have a mouth, and so she can’t display emotions like happiness or sadness,” the Briton says. “Sanrio’s website says she speaks from her heart and isn’t bound to any language, and that makes her popular worldwide.

“For Peter Rabbit it’s the whole story behind Beatrix Potter – a woman [in a time when women were discouraged from writing], a feminist and a naturalist who O Sachiko Imaizumi, Plus Licens & Design Tokyo

FOCUS

STABLE, LONG-TERM BRANDS WILL CONTINUE TO DO WELL IN THE MARKET David Buckley, Copyrights Asia

loved animals. There’s also the heritage factor. The Japanese love England, afternoon tea and all that stuff.”

David Buckley, president of Copyrights Asia, a firm that holds the licences for British properties such as Peter Rabbit and Paddington Bear, expands on the blue-coated bunny’s lasting popularity.

“He’s a very classic character, one of the first characters in the world,” says Buckley. Potter patented a Peter Rabbit doll just one year after the book’s publication in 1902. “[The property has] got nostalgia and quality of artwork; it’s upmarket, very collectible, and is sold in the nicest department stores. The Japanese consumer responds to the quality and stability of the property.”

Shogo Tetsuda, president of dick bruna japan, sees Miffy’s success stemming from the rabbit’s peerless creator. “Of all the classic characters out there, Miffy is the only one for which the creator is still alive and still drawing … Walt Disney died a long time ago and other people make decisions about Mickey Mouse now,” Tetsuda says.

“But with Miffy, it is completely down to the influence of Dick Bruna himself. He doesn’t do stuff because people ask him to, he does what he likes, and so his taste is respected.”

European characters seem to fare better than their American cousins, notes Goshi Nakano of Hit Entertainment, the licensor of children’s characters such as Thomas the Tank Engine. “With the exception of Disney, American characters don’t do so well in Japan. Characters from Dora, Marvel Comics and Warner Bros. don’t suit Japanese consumers’ tastes,” Nakano says.

“In Japan fluffy things such as dogs, cats and rabbits are popular. Very few human characters become hits.”

A peculiarity of the Japan licensing business is its seisakuiinkai (production consortium) system. “It involves a number of parties interested in a character property, such as the original creator, advertisers, manufacturers, publishers and TV companies,” Berman explains. “They all invest together to produce their own property and reduce risk.”

“It’s important to build an audience for the property,” dick bruna’s Tetsuda stresses. “You can’t just make things and sell them. You have to hold events and demonstrations that grab people’s attention, and then you can start selling to people.

You need this exposure.”

But adaptability is also required. “Licensors need to understand the Japanese consumer, who is extremely fickle and detail-orientated. It’s very important for the European licensor to have an open, flexible mind as to what will work in Japan that won’t work at home,” Berman says.

“Toilet seat covers can work as Japanese culture sees toilets as very clean places. Dog accessories also don’t really work David Buckley, Copyrights Asia R

anywhere else, except perhaps France.”

Sachiko Imaizumi, managing director of Plus Licens & Design Tokyo, a licensing agent of Swedish character properties in Japan such as Pippi Longstocking, believes firms should carefully consider the kawaii (cute) factor. “I think that kawaii is still very important, but it has more variations now, such as kowa-kawaii [scary cute], kimo-kawaii [gross cute] and yuru-kawaii [gentle cute],” she says.

As Japan’s population ages and the licencing market gradually shrinks, building on past performance is key, says Copyrights Asia’s Buckley. “Stable, long-term brands will continue to do well in the market,” he predicts.

Berman believes a new approach is needed: “The Japanese licensing industry needs to find new revenue sources. We’re going to have to appeal to an older demographic.

“The next generation of pensioners will not have any unease or embarrassment about using character products,” he says. “I imagine this might involve products such as walking sticks and other mobility aids emblazoned with Disney or Hello Kitty patterns.”

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EXE C UTI V E N OTE S

Post-trauma The delayed effects of stress After meeting Economist Corporate Network members for the first time post-quake at the end of March, I realised that stress was taking a huge toll. Normally bright-eyed and straight-backed executives from prestigious firms wore a haunted look. Expensive clothes hung loosely on emaciated frames. Others had clearly resorted to the bottle or comfort eating, and were somewhat rounder than before. (I include myself in that category …)

Joking apart, many executives told me that the lack of sleep, the dilemma of whether or not to leave Tokyo, the decision about what to do with immediate family, and heavy pressure from friends and relatives abroad had taken a serious toll. Everybody was aware that in this febrile atmosphere, amidst greatly conflicting sources of information, decisions were going to be made which would either seriously enhance, or damage, an executive’s career. The stakes were even higher when personal and family safety were taken into account.

It was obvious that the next event had to be on stress. I decided to split the programme into two parts. One speaker came from Tokyo English Lifeline (TELL). Her job was to detail the manifestations of stress and offer some helpful suggestions to Western executives.

The second speaker was going to illuminate the effect of stress on the Japanese workforce. Indeed, it struck me that stress might manifest itself in a somewhat different form among Japanese staff. It might thus be an excellent idea to hear from a local expert about what indications Western bosses should heed.

So that was the agenda: remedying personal stress on the one hand, while on the other making sure that stress symptoms among local staff were recognised in time, and treated appropriately.

The first speaker warned us that stress should be understood as a factor that could undermine the quality of our decisions. As stress hormones flood through our bodies, important changes take place. It’s important to bear this in mind when making decisions – for example, by first running important decisions past colleagues in more peaceful locations, whether Osaka, Hong Kong or home office.

The speaker also buried the myth that people who have been through stressful experiences before are “toughened” and can, therefore, cope with the next stressful episode better than neophytes. In fact, stress takes a cumulative toll.

Just as a soldier on the front lines gets steadily closer to collapse the longer he is there, so with civilians. People in Tokyo who had lived through the Boxing Day tsunami of 2004, or the Christchurch quake earlier this year, were more likely to need support than others. The speaker also pointed out that the effects of stress take time to manifest, and that people might suffer post-traumatic stress symptoms many months after an event was already over.

The next topic, about stress in the Japanese workforce, was less easily answered. Partly, this was due to a certain “political correctness” on the part of the first speaker, who declined to believe that nationalities would manifest stress differently.

MAKE SURE YOU GIVE YOUR HR OFFICER A HUG TODAY Nevertheless, executives noted differences in the way their Western and Japanese staff responded. While foreign staff immediately and automatically put their families first, the Japanese speaker explained how he had recently published an article in a leading business magazine urging Japanese workers to put their families first.

He used this as evidence that Japanese attitudes had changed. However, it was pointed out to him that “putting family first” did not have to be urged upon Western staff through articles in the media!

Perhaps the similarities are more interesting than the differences. Although Japan got a lot of credit for its stoicism during the quake, this surely had much to do with companies refusing to close down their operations.

If anybody left of their own accord, they were in danger of being fired. When Japanese staff were given the option of leaving, they frequently did so.

The final point that emerged was that the ability of stress to slide into panic, and bring entire companies to their knees, meant that it had to be taken more seriously – just as seriously as the radiation and power crises.

Just as the danger of stress had to be reassessed, so did the status of the corporate HR officer (who is still not considered worth a seat in the C-suite in most companies). This person is best placed to help staff with stress issues, and needs to be involved at top-level decision-making from the start, especially in an environment as complex as a Western multinational in Japan.

One HR officer present said that her efforts in acting as liaison between global HQ, local top brass and domestic staff played an important role in keeping staff stress levels manageable. So make sure you give your HR officer a hug today, and work more closely with them in the future. They could make all the difference in the next crisis.

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

June 2011

21

CHAMBER VOICE

Bernard Delmas

President, Chambre de Commerce et d’Industrie Française du Japon www.ccifj.or.jp Text EUROBIZ JAPAN Bernard Delmas, president of La Chambre de Commerce et d’Industrie Française du Japon (CCIFJ) is sanguine about the prospects for Japan’s quick recovery. “I don’t think business conditions will be any worse after the crisis,” he says. “The real issue is Japan’s image.”

The danger, Delmas believes, is that people may decide Japan is not a safe place in which to do business or invest.

“We need to explain well that the difficulties arising from this crisis will be overcome, and that the crisis may offer opportunities,” he said. The chamber has already reported an increase in imports from Europe of mineral water, food, chemicals and construction materials.

“We need to show that this disaster will be followed by a recovery. The disaster will have a positive effect on the economy – perhaps even in 2011.”

The largest foreign chamber of commerce in Japan after the US chamber, the French chamber has over 500 members. Delmas, who is also president of Nihon Michelin Tire, has headed the

A CCIFJ event with Mrs Nathalie Kosciusko-Morizet, French Minister for Ecology, Sustainable Development, Transport and Housing

chamber since February 2010.

“We consider the chamber a link to the Japanese business world,” he says. The CCIFJ already has prominent Japanese corporate members such as Akebono Brake, Shiseido, Itochu and Mitsukoshi, but is working hard to reach out to the wider Japanese business community.

It is important for French members to understand how Japanese business works and to have friends in the Japanese business world, says Delmas.

The large companies that are longtime members of the chamber tend to already have a good understanding of the Japanese market, but the CCIFJ also caters to entrepreneurs. Networking is particularly important for those just getting started in the Japanese market.

“There is a trend for entrepreneurs and young businessmen to try and enter the Japanese market. We need to help them.”

Consumers in Japan’s mature market are open to new products and there are plenty of opportunities. Many small to mid-sized companies are taking the plunge. Recent examples from France include apparel retailer Anne Fontaine and Petit-Bateau, confectioners Herme and Ladurée, and café-crêperie Le Bretagne.

“Japanese consumers have changed a lot,” says Delmas. “They are still looking for brands – but different brands.”

The chamber also closely supports the EBC’s lobbying of the Japanese government, particularly recent efforts since the Tohoku disaster. The EBC is encouraging the government to relax import rules to aid the flow of recovery goods.

It is important for members to understand how Japanese business works It is also part of an ongoing push to remove barriers to business. “The work that our members do while participating in EBC committees is fundamentally important,” says Delmas.

“I believe that a momentum has been created to think about starting FTA discussions. It is very important that we maintain this momentum. The crisis may even enhance the Japanese perception of the need for an FTA.” In the short term, however, business in Japan faces potentially crippling power shortages. Many industrial processes last for days and interruptions caused by power cuts could be disastrous. “[The authorities] have realised that the rolling power cuts are not viable,” says Delmas.

But even here, he sees cause for optimism. It will be interesting to see how companies achieve their powerreduction targets: 25% at the time of writing.

“I don’t believe this 25% cut is temporary,” says Delmas. “If they succeed, [Japanese energy usage] will become a benchmark for the world.”

June 2011

23

Instant coffee steady success Nestlé Japan Text JUSTIN MCCURRY Photo BENJAMIN PARKS

“When in Rome, do as the Romans do.” The aphorism won’t win any prizes for originality, but it is at the heart of Nestlé’s success in Japan. The Kobe-based firm has prospered by following the unwritten rules of the Japanese market, yet its 98 years in Japan have included more radical shifts in strategy.

As it looks ahead to its next century in one of the world’s most competitive food and beverage markets, Nestlé Japan’s president and chief executive officer, Kozo Takaoka, says a balance between tradition and innovation will remain the firm’s guiding principle.

Although best known for instant coffee and chocolate, the company, which employs 2,300 people here, also sells creamer, cocoa, seasoning, nutritional products, beverages for vending machines, pet food and, more recently, coffee machines.

But the company behind the KIT KAT chocolate can credit its longevity to a keen nose for changes in coffeedrinking habits. After opening its first Japan branch office in Yokohama in 1913 to sell condensed milk, the catalyst for Nestlé’s big leap forward was its embrace of the instant coffee revolution in the early 1960s.

“We grew very quickly after that, because Nestlé not only introduced instant coffee for the first time in Japan, but we also linked it to the idea of having a European-style breakfast,” Takaoka says.

Through mass marketing in the midst of the post-war economic boom, helped by monthly one-day price reductions of up to 30% (a tactic lifted straight from the Western supermarket rulebook), NESCAFÉ quickly became the top instant coffee brand in Japan, a title it still holds.

Instant coffee sales peaked in 1987 and remained stagnant throughout the 1990s and 2000s, a time that heralded the arrival of coffee chains such as Starbucks that brought

the taste and aroma of the roast, ground version to ordinary consumers. It was time for Nestlé to think again.

The result was the introduction in 2009 of NESCAFÉ Barista – a coffee machine adapted for instant coffee and compact enough to fit in the average Japanese kitchen. “It was a bold innovation, but necessary,” Takaoka says. “Even I no longer drank the instant coffee made by mixing it with boiled water. It was old fashioned.”

Chocolate and instant coffee aside, the company is behind a wide range of food and beverages that have sold well in Japan because, says Takaoka, they combine ease of use and tap into the high level of interest in healthy living. They include creamer for coffee, Hépar mineral water, MAGGI bouillon, and a selection of products aimed at the country’s huge pet-food market.

But it is impossible to discuss Nestlé’s localisation efforts without mentioning KIT KAT. The catchphrase “Have a break, have a KIT KAT” had caught on overseas, but Takaoka says the subtle wordplay – and, perhaps, the fact that the phrase was in English – meant it never resonated in Japan.

Then, 10 years ago, Nestlé executives heard about the chocolate’s growing popularity among students taking university entrance exams, they had noticed the similarity of its name to the Japanese for “surely win” – kitto katsu.

“We thought mothers would want to buy KIT KAT for their kids when they had exams, so we very quietly began this campaign. We didn’t want to steal the idea from the Japanese consumer, so we didn’t Nestlé’s NESCAFÉ Barista coffee machine W

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June 2011

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

WE DO AS THE LOCALS DO, BUT WE ALSO HAVE TO THINK OF SOMETHING NEW Kozo Takaoka, Nestlé Japan

June 2011

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KIT KATS WITH DISTINCTLY JAPANESE FLAVOURS: CHERRY BLOSSOM, ADZUKI RED BEAN, CALPIS AND PUNGENT WASABI advertise, but through other means we gradually penetrated the market.”

The firm started supplying KIT KAT to the hundreds of hotels inundated with students staying near university entrance exam test venues. The hotels would give each student guest the chocolate and a message card, from KIT KAT, wishing them luck. “It had emotional impact,” Takaoka says.

Inventively flavoured KIT KATs for the Japan market don’t stop at green tea. In the past decade, the firm has released about 200 flavours, most of which are on sale for only a few weeks before being replaced by a new line. Many are distinctly Japanese flavours: cherry blossom, adzuki red bean, Calpis (a yoghurtflavoured drink), and pungent wasabi.

Perhaps that kind of nonconformist approach befits a company that has shunned Tokyo as its Japan base. But the real reason for its 1922 move from Yokohama to Kobe has been clouded by the passage of time.

“Nobody knows the reason, but it could be that Kobe resembles Vevey [the Nestlé Group’s Swiss headquarters] due to its seafront, with mountains behind.

There is no proof of that, though.”

Whatever the reason, the company has never seriously considered moving to Tokyo, even in the aftermath of the 1995 Great Hanshin Earthquake. “The living costs in Kobe are lower and the commuting time is much shorter than in Tokyo,” Takaoka says. “Our employees appreciate the better quality of life.”

Nestlé Japan 3 Global HQ is in Vevey, Switzerland 3 Established in Japan in 1913 3 Worldwide approximately 283,000 staff; in Japan 2,300 3 Most successful product in Japan is instant coffee Would he encourage other foreign companies to move to the Kansai region? “In many ways the European corporate culture is different from that of American firms. As long as we have confidence, we can manage our business, even though we’re not in the capital. IT systems are so advanced that we are not at any disadvantage. It doesn’t really matter where you are.”

In any case, the modern-day challenges for European companies in Japan go beyond mere geography, he says: “The question is how to localise a global strategy in the most effective way. Managers of foreign companies in this market need the ability to digest a global strategy and transform it into a local one.

“A good example is confectionery, where no global giant has ever succeeded big time in Japan. That’s because the recipes are the same the world over. Everybody knows the brand name, but sales are negligible.”

For Nestlé, localisation also means producing almost all of its products in Japan. “We have had to operate with practically zero defects, which is why

for the past 98 years we have produced almost everything locally, including all the chocolate.”

In addition, profit margins for Japanese firms in the food and beverage sector are extraordinarily low and accompanied by a frenetic rate of innovation. More than 2,000 new products arrive on the chocolate market every year, yet 95% disappear within a year.

“Is there any other market like that in the world?” asks Takaoka.

“There are so many local restrictions and rules,” he adds, “but our culture at Nestlé is to deal with retailers and consumers on their own terms and digest what it means. In that sense, we operate in a very traditional way.

“Having said that, efficiency in logistics and the supply chain is not at all high in Japan. So although our main business has to go through that route, we have also launched alternative business models, for example using television shopping to communicate directly with consumers.

“So yes, we do as the locals do, but we also have to think of something new.

That’s why my message to all Nestlé Group employees is always the same – to change the rules of the game.

“The Japanese economy hasn’t grown for the past 20 years, yet still some people do things the same way. This is a great opportunity for all foreign manufacturers, but we need to show leadership to change the status quo.”

June 2011

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Banking// Still pursuing reform Text GEOFF BOTTING

A

ccording to Philippe Avril, the head of the EBC Banking Committee, Japan has long been known as a difficult market for financial institutions.

Although, he adds, “the regulatory environment has generally been improving in recent years.”

Difficulties became especially acute in the wake of the collapse of Lehman Brothers, an event that has come to symbolise the global financial meltdown of 2008, and has been followed by debt problems in several EU member states.

After having witnessed those events, Japan’s financial regulators seem all the more convinced that their conservative stance is the right one, according to Avril.

“The Japanese regulators have been saying – probably quite rightly – that, ‘We did not have a financial crisis in Japan. It was mostly in the US and Europe,’ ” says Avril, who is chief country representative for Japan and general manager for BNP Paribas Securities in Japan.

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June 2011

Banking committee Key advocacy issues k Integration of businesses – A law that bans financial companies from operating banking and securities concurrently should be changed to allow integration. k Transparency of inspections — Further efforts should be made to reduce duplication of inspections by the various regulatory agencies, in addition to applying regulations on a consistent basis. k Issuing of business licences — The FSA should streamline the procedure needed to obtain licences, which are required whenever banks introduce Japanese customers to new services offered by other entities.

[They say,] ‘Yes, of course we have different regulations, but maybe that’s why we didn’t have our own crisis.’ ” The committee, however, has long advocated regulatory reform, mainly in the form of streamlining. For instance, it wants the end of regulatory firewalls that force institutions to establish separate organisations for different

fields of business.

The pre-Lehman years saw discussions with Japanese authorities on harmonising regulations in Europe with those in Japan. “But that is clearly not a top priority anymore,” the committee boss says. Since the crisis, Japanese authorities are reluctant to bring their regulations closer to Europe’s.

Still, it’s not all bad news. Avril notes that the inspection process has gradually improved.

“From the EBC’s perspective, we have seen many improvements. Since a couple of years back, the various regulatory bodies, including the Financial Services Agency [FSA], have been notifying banks in advance of inspections – which had not been the case before.”

Joint inspections by two or more of the six regulatory bodies are also more common. In the past, by contrast, the different organisations had conducted their own separate inspections, which “imposed an excessive administrative burden on regulated firms”, the committee states in the EBC 2010 white paper.

Even so, the firewalls remain. The committee argues that they effectively

IN COMMITTEE

prevent financial institutions from integrating their Japan units with their global groups.

As a concrete example, consider the case of a client who wants a certain degree of exposure to equity, but with limited downside risk should the market suddenly head south.

“You could do that as an equitylinked bond, which would be a securities product in Japan; [depending on market conditions] as a deposit, which would be a banking product; as an investment trust, which would be an asset-management product; or you could even consider an insurance policy, which would be an insurance product,” Avril explains.

“In a universal banking environment, as you have in Europe, you would have the same institution design these four types of product, or whichever is the most appropriate for the customer, with just one salesperson.”

But in Japan, due to the restrictions on employees of the same company simultaneously engaging in different fields of business, and on the sharing of customer information, four different entities – each with their own sales

teams – would be required.

“There are lots of things that can be done in Europe just by talking to each other, and finding and designing the appropriate product for the customer,” says Avril. “But that just cannot happen in Japan.”

As a result of the firewalls and other regulations, a range of innovative products and services that clients in Europe and elsewhere in the world take for granted are unavailable in Japan.

Meanwhile, Tokyo’s ambition to become a global financial capital alongside New York and London looks increasingly hard to achieve, partially in light of the ascent of Singapore and Hong Kong.

The EBC Banking Committee has over 10 members, including the largest European financial institutions represented in Japan. Until the change in the regulatory climate following the financial crisis in 2008, the group had held regular meetings every three months.

In the weeks following 11 March, Avril spent much of his working time managing the crisis and keeping business going. Several times a day, he was on the phone to fellow members

JAPAN’S FINANCIAL REGULATORS SEEM ALL THE MORE CONVINCED THAT THEIR CONSERVATIVE STANCE IS THE RIGHT ONE Philippe Avril, EBC Banking Committee of the board of the International Bankers Association to ensure a unified response.

“The stance from day one was that we needed to maintain business as usual. That was extremely important, not only because we are foreign banks in Japan, but because it was also our duty to the financial system in Japan,” he says.

Do you have an opinion on this topic you’d like to share? Please post comments at www.eurobiz.jp or send letters for publication to eurobizletters@paradigm.co.jp

June 2011

29

Sit down comedienne Text and photos TONY MCNICOL 30

June 2011

C U LT U R E S H O C K

T

he show cancellations started soon after the 11 March earthquake. Before long, Diane Kichijitsu’s schedule had almost completely cleared.

The rakugo (Japanese comic story-telling) performer and balloon artist was left with time on her hands and an urge to do something to help the victims of the earthquake and tsunami. So she gathered together some food, a couple of colourful costumes, some warm clothes and 2,000 balloons.

Then, on 3 April she left her home in Osaka and flew up to Yamagata where she met up with staff from outdoor apparel company Mont Bell.

Together they travelled down to evacuation centres in Miyagi prefecture. As Mont Bell staff delivered supplies to the evacuation centre and helped with the clean-up, Kichijitsu performed where she could.

It was the first of several trips over the next few weeks.

Sometimes evacuation centre officials provided a small space for her to perform, sometimes she did balloon shows for children in queues for emergency supplies.

After a few days she set out by herself. “I had my balloon hat and balloon bracelet on all the time, so it was obvious what I was doing,” says Kichijitsu.

Curious locals often stopped her on the road; many offered to drive her to evacuation centres or other places where she could perform.

Ochako English-born Kichijitsu’s career in traditional Japanese entertainment began in 1996 as an ochako (stage assistant) for Shijaku Katsura, a pioneer of rakugo in English. Her modest role was to turn over his cushion between acts.

Having caught the performing bug she joined a rakugo school and started learning the comic tales and how to use the rakugo-ka’s props of paper fan and small cloth. Within a few months she was getting regular gigs at community halls and theatres.

Her career took off with unexpected speed. “It got really busy, really fast,” says Kichijitsu. She chose the stage name of Kichijitsu, which can be read as lucky day – a play on the word Diane which sounds like taian, meaning lucky day.

She’s one of very few foreign professional rakugo artists performing in Japan – and doubly unusual because she is one of very few female performers of the art.

She performs mainly in English, but sometimes in Japanese, and occasionally in sign language, which she started learning three years ago. Her repertoire consists of around 20 stories, some as long as 25 minutes. Over the years she has

performed all over Japan, as well as in the United States and Europe.

Kichijitsu has also studied tea ceremony and ikebana and has teacher’s licenses for both. She keeps a collection of 230 kimono (“maybe more”) in her spacious pre-war Japanese house.

But her trip to northern Japan was the first time she had performed for victims of a natural disaster.

“At first I wasn’t sure if making jokes was appropriate,” says Kichijitsu, “but I didn’t get a sense of gloom at all. A lot of people had a smile for me.

They were fascinated by the fact I am a foreigner, and from Osaka.

“A lot of people just opened up and told me about what happened. I never would have asked.

I think it was because I was a neutral character.

It must be hard to talk to the people around you who have been through the same thing.”

Many parents were glad for her to distract their children for a while.

“Some of the kids were very quiet – they didn’t smile at first. You don’t know if the reason is that they have seen something terrible. The kids have lost all their toys, some of them their friends.”

But many children did come over to watch.

“Kids are kids, whether they have been through something terrible or not,” Kichijitsu says. “All kids love balloons.”

Performing for children in Ishinomaki

June 2011

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150 years

Celebrating a century and a half of German business in Japan

I

n October 1860 a Prussian expedition led by Count Friedrich Albrecht zu Eulenburg arrived in Tokyo bay and began negotiating a treaty of amity and commerce with the Edo government.

The agreement, signed a year later, opened the door for German companies to begin establishing operations in Japan, with many firms that are household names today entering the country in the first few decades that followed: electronics and electrical engineering company Siemens in 1887, automotive and industrial technology firm Bosch and pharmaceutical and chemical giant Bayer in 1911, and automaker Mercedes-Benz in 1912, to name but a few.

The same companies remain at the forefront of Germany-Japan relations today.

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June 2011

Encouraging joint innovation Perhaps one of German business’ most visible collective contributions to Japan over recent years has been the German Innovation Award. Initiated in 2008 by 12 technology-focused German companies and the German Chamber of Commerce and Industry in Japan (GCCIJ), the award is granted for groundbreaking research by young Japanese scientists in the areas of the environment and energy, healthcare, safety and security.

First place for the 2010 award, which was announced on 12 May, went to Dr Motonari Uesugi, from the Institute for Integrated Cell-Material Sciences at Kyoto University, for work related to cell therapy. His reward: ¥4m in prize money plus a scholarship, received by all of this year’s awardees, for a two-month stay at a German research institution or university of his choice. In all, 81

KATSUMI YANAGIYA

Text ROB GOSS

Dr. Motonari Uesugi, winner of the 2010 German Innovation Award

researchers from 36 Japanese universities applied for the award this year.

Bayer is one of the firm’s behind the award. For them, said Hans-Dieter Hausner, senior Bayer representative for Japan, taking part is an opportunity to contribute to continued innovation in what is the world’s second-largest pharmaceutical market and the fourthlargest crop protection market – both important sectors for the firm and other European companies operating in Japan.

S P E C I A L F E AT U R E

KATSUMI YANAGIYA

KATSUMI YANAGIYA

Lufthansa helped transport emergency supplies to Japan after 11 March

Nicholas Speeks, CEO of Mercedes-Benz Japan and Takeju Ogata, President of the Keidanren, with a list of donations that included 50 trucks and off-road vehicles.

“The Innovation Award offers great opportunities for industry-academia cooperation between Germany and Japan,” Hausner added. “And if the prize winners can contribute to society in terms of enhancing both countries’ innovation endeavours, we would be more than delighted.”

Other Germany-Japan initiatives include the German Research and Innovation Forum Tokyo (DWIH Tokyo), which acts as an umbrella for German scientific and research interests in Japan by providing a point of contact for Japanese and German research organisations, universities and businesses.

Set up in 2010 by the German Rectors’ Conference and the GCCIJ, and funded by Germany’s Federal Foreign Office, DWIH Tokyo also supports and supplements the activities of participating German organisations by providing a comprehensive calendar of events and information services.

Otto Benz, president of the GCCIJ and head of Lufthansa German Airlines in Japan, said involvement with the DWIH, as with the Innovation Award, represents a win-win situation for both Germany and Japan.

“Japan is a leading country in terms

of innovation and the number of patents they register, and Germany is a leading innovator, so we will continue to focus on expanding this type of cooperation because the progress we make can be applied to industries in both countries.”

German Firms Responding to 3/11 In recent months, Germany-Japan relations of course have been dominated by the events and aftermath of 11 March. The GCCIJ has been busy helping to coordinate German relief efforts.

“At the GCCIJ we’ve received a lot of interest from German companies that want to get involved with relief projects or give financial aid to help Japan,” Benz says.

“Together with the German Ministry of Foreign Affairs and its Japanese counterpart, the chamber has been coordinating offers from Germany of financial aid and rebuilding support for Japan. The first response was to meet immediate needs after the disaster; now we are looking at how we can help with the second step, which is longerterm structural assistance.”

Daimler, for example, whose interests in Japan include Mercedes-Benz and a majority stake in truck-maker

WE’VE HAD A CLOSE ASSOCIATION WITH JAPAN FOR MANY, MANY YEARS OF WHICH WE ARE VERY PROUD; IN FACT, NEVER PROUDER THAN NOW Nicholas Speeks, CEO, Mercedes-Benz Japan

Mitsubishi Fuso, initially donated €2m to relief efforts. Nicholas Speeks, CEO of Mercedes-Benz Japan, said Daimler has since pledged a further €4m in the form of vehicles.

“We had two tasks in the days after the earthquake: keep the company operations going and galvanise as quickly as possible to do something to help those in Tohuku far, far less fortunate than us,” Speeks said.

“We’ve had a close association with Japan for many, many years of which we are very proud; in fact, never prouder than now. We want to do whatever we can to help.”

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S P E C I A L F E AT U R E

THE INNOVATION AWARD OFFERS GREAT OPPORTUNITIES FOR INDUSTRY-ACADEMIA COOPERATION BETWEEN GERMANY AND JAPAN Hans-Dieter Hausner, senior Bayer representative for Japan

For Speeks that included making sure Mercedes-Benz’s Tokyo office stayed open throughout the crisis, to send a message of solidarity to Japan. For Daimler’s employees back in Germany, it meant setting up an employee fund with donations going to the German Red Cross and its Japan-relief efforts. In its first five days the staff fund raised €500,000.

Bayer also responded swiftly. The company provided the Japanese Red Cross Society with an initial donation of €880,000 in immediate financial aid

as well as urgently needed healthcare products and medicines worth over €700,000.

“Our first priority was to ensure the safety of our employees and their families, and after the disaster we immediately started the necessary preparations to support the relocation of employees living in the affected areas in Tohoku to other locations,” Hausner said.

“But in parallel, we have been working on relief efforts and collecting donations from employees worldwide

to make donations through the Bayer Cares Foundation.”

It’s been a similar story at other German companies. Chemical company BASF has donated €500,000 and is also running a staff fund, while Bosch has donated an initial €1m and says it has plans to give more aid once a clearer picture exists of exactly what’s needed for recovery. As for Bayer’s staff, they raised €300,000, which Bayer then matched, and that is now being used for long-term reconstruction work in the worst-affected areas.

Otto Benz, President of the German Chamber of Commerce & Industry in Japan What are the GCCIJ’s main activities?

First and foremost we are the main body representing German businesses with offices in Japan, but we also function as an incoming partner for German companies with an interest in direct investment in Japan by helping with

market research, consulting for companies entering the Japan market, keeping them up-to-date with market developments and so on.

With our active schedule of events, we also provide a social platform for member companies and their employees that offers many opportunities to meet and greet.

What role did the GCCIJ play in the days following 3/11?

It was a crisis communication operation in which, together with the embassy, we tried our best to give an objective and fact-based description of the situation.

The majority of requests for assistance (after 3/11) came from Germany itself.

Many German companies, as well as media, needed to get immediate advice on the situation here in Japan and to find out how the crisis would affect Germans, and German companies and their staff in Japan.

and the headquarters of German firms with a presence in Japan are aware of what is happening here and the great efforts Japan is making to get back to business as usual as soon as possible.

How will 3/11 affect the GCCIJ’s work from here on?

We are looking at the second half of the year as, first of all, a period to communicate to Germany how Japan is normalising; what efforts the country is making or has made to remedy problems, for example, with the supply and demand chain; what the impact of energy-saving measures will be; and so on.

The main issue is for us to make sure our members

What other activities or events do you have planned this year?

We will be setting up a series of seminars and workshops to help members’ businesses in Japan, particularly dealing with legal and HR issues. Since 3/11, of course, the focus of many events has shifted to coping with the aftermath of the quake and how to improve preparedness for future crises.

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Germany

Population: 81 million Labour force: 43 million By occupation: Services (68%); industry (28%); agriculture (1%) Median age: 44.9

Fast facts According to EU business, among the EU’s 27 member states, Germany was by far the largest exporter to Japan in 2007, with €13.0 billion, or 30% of the total. Germany was also the largest importer, with Japan at €18.2 billion, or 23% of the total.

Global Innovation Barometer, by GE, polled 1,000 senior execs from 12 countries. Germany was second (44%) and Japan was third (43%).

A

Hamburg

A

Berlin A

Cologne

The GGCIJ’s German Innovation Award is granted by a group of 12 major German companies to young Japanese researchers.

A

Frankfurt

A Munich

In 2011, Germany and Japan are celebrating 150 years of diplomatic relations. Trade activity and R&D cooperation remain vital components in the dynamic partnership between these two global economic giants.

Airbus Japan www.airbus.com

Allianz Fire and Marine Insurance Japan Ltd. Email: netadmin@allianz.co.jp www.allianz.co.jp

Audi Japan KK www.audi.co.jp

Airbus is a leading aircraft manufacturer whose customer focus, commercial know-how, technological leadership, and manufacturing efficiency have propelled us to the forefront of the industry. Airbus’ modern and comprehensive family of airliners ranges from the 100-seat Airbus A318 to the more than 500-seat doubledecker A380. Airbus has sold over 10,100 aircraft to some 330 customers worldwide and has delivered over 6,600 since it first entered the market in the early ’70s.

Allianz Fire and Marine Insurance Japan Ltd. (AGCS Japan) was established in 1990 as the first licensed German and European insurer in Japan.

AGCS Japan has an AA-rating (outlook negative) from Standard & Poor’s.

We can offer our clients outstanding financial security, as well as the full range of AGCS’s global services including property, liability, engineering, marine, energy, financial lines, and international insurance programmes worldwide in over 150 countries.

Celebrating strong friendship between Germany and Japan for 150 years, Audi Japan sends a brief message to all readers. Our brand’s slogan, “Vorsprung durch Technik”, has become significant to overcome the tough situation we are currently in. Audi Japan will maintain our challenges as a premium automobile importer, and support challenges the people have. Through a new carline – A1, A8, A7 Sportback, and A6 – in the near future, Audi Japan will keep you up-todate in the future.

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June 2011

GERMAN ANNIVERSARY SPECIAL

Bayer in Japan www.bayer.co.jp

Boehringer Ingelheim Japan Incorporated www.boehringer-ingelheim.co.jp/

Bosch Corporation Email: Japan.PJ-2011@bosch.com www.bosch.co.jp

2011 marks Bayer in Japan’s 100th anniversary, and also the starting point for the next 100 years. We have constantly delivered innovative products and services in the areas of HealthCare, CropScience and MaterialScience. We will always aim for sustainable growth while striving to be a good corporate citizen.

Under our mission “Bayer: Science For A Better Life”, we will contribute to the improvement of people’s quality of life through innovation-focused efforts and vision.

Boehringer Ingelheim is a researchdriven company dedicated to researching and developing, manufacturing and marketing pharmaceuticals that improve health and quality of life. Our business areas consist of Human Pharmaceuticals and Animal Health. We have more than 42,000 employees in 145 affiliated companies, seven R&D facilities and 20 production plants worldwide. Our headquarters is at Ingelheim, the German town where the family-owned company was founded in 1885.

The Bosch Group is a leading global supplier of technology and services. In the areas of automotive and industrial technology, consumer goods, and building technology, 283,500 associates in over 60 countries generated sales of €47.3bn in 2010. In 2011 Bosch celebrates 125 years since establishment and its 100th anniversary in Japan. With 8,000 associates in 36 locations, Bosch Japan is highly committed to provide best-inclass services for customers in Japan and globally.

City-Yuwa Partners Email: mikio.tanaka@city-yuwa.com www.city-yuwa.com

Commerzbank AG Email: tokyobranch@commerzbank.com www.commerzbank.com/corporates

Eurocopter Japan www.eurocopter.co.jp

We wish to extend congratulations on the 150th anniversary of German-Japanese Diplomatic Relations.

With more than 110 fully qualified lawyers in Tokyo, City-Yuwa Partners is one of the leading law firms in Japan, and provides a full spectrum of legal services of business law. The firm’s German practice is led by our tri-lingual Partner who is fluent in German and who has extensive experience working in Germany.

Commerzbank is the second-largest bank in Germany and one of the leading financial institutions in Europe. We serve almost 15 million clients worldwide.

Through our concept of cross-border personal relationship managers and our global network of over 60 offices in 50 countries, we provide our clients with a fully integrated Corporate Banking solution from a single source. Especially in Tokyo, we have a long-established local presence since exactly 50 years ago.

Eurocopter Group – an EADS division with 30 subsidiaries, 17,500 employees and a dense worldwide service network – is the world-leading helicopter manufacturer. Present in Japan for more than 40 years, we enjoy a 55% market share in the civil and parapublic sectors.

The successful co-development with Kawasaki Heavy Industries of BK117 (EC145) led to more than 800 deliveries worldwide. Eurocopter offers innovative, tailored and cost-effective solutions to Japanese customers.

CITY-YUWA PARTNERS

SONDERHOFF & EINSEL Ihr partner in Japan seit 1910

SAP Japan Co., Ltd. www.sap.com/japan/

Sonderhoff & Einsel Law and Patent Office Email: info@sonderhoff-einsel.com www.sonderhoff-einsel.com

Japan Telegärtner Ltd. Email: info@telegaertner.co.jp www.telegaertner.co.jp

SAP helps companies of all sizes and industries run better. From back office to boardroom, warehouse to storefront, desktop to mobile device, SAP empowers people and organisations to work together more efficiently and use business insight more effectively to stay ahead of the competition. We do this by extending the availability of software across on-premise installations, on-demand deployments, and mobile devices.

Since 1910, the partnership of Sonderhoff & Einsel – built on a synergy among its attorneys-at-law, patent attorneys, licensed tax consultants and certified public accountants – has served primarily foreign interests in the areas of corporate law, IP law, accounting and taxation. Located in the heart of Tokyo, more than 30 professionals with a large supporting staff of thoroughly trained assistants proudly work for their clients in German, English and Japanese.

Seventeen years ago, we were born as a member of Telegaertner, Germany. To respond to the increasing demand for broadband networks and faster LAN connections, and the sophisticated infrastructure that came with the expansion of FTTH, we have established a sales system dealing mainly with data and voice products, and fibre optic connection parts. We are also providing various types of coaxial connectors for mobile-communication base stations and wireless LAN systems.

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in over 130 locations worldwide (22 in Japan)

GREEN BIZ

Fax forward Japan’s favourite office device goes eco Text DAVID MCNEILL

W

e’ve all been there: at the other end of the phone line in Japan being asked by a secretary to send a document by fax. While the rest of the developed world has largely decamped online, Japanese businesses, it seems, still prefer documents to be sent over ye olde telephone wires.

The reason is partly historical: Japan was quick to embrace fax machines in the 1980s because offices could then write kanji characters on paper instead of laboriously typing them into teleprinters – and it doesn’t want to let them go. And it’s partly about the presumed solidity of that piece of white paper during important transactions, explains Akiko Suzaki, spokeswoman for NTT Communications.

those companies struggling with office staff who presumONE LIKELY OUTCOME IS THAT THE ably have yet to master the SERVICE WILL PUT ANOTHER NAIL IN THE basics of corporate security: “There is no risk that a docuCOFFIN OF THE FAX MACHINE ment received by fax could be left on the facsimile machine.”

Suzaki is coy about the popuservice means that customers larity of the service. “We are “We mainly use email and not revealing our sales info, without fax machines can attached files for business, but it is growing.” but we still use faxes in some send digitised Excel, Word, So why call it green? Well, PDF or other documents to situations – such as sendfax machine numbers, or vice because apart from saving ing or accepting estimates, on fax charges, switchversa. or sending copies of driver’s ing documents to digital NTT charges a basic fee licenses.” She adds that versions reduces the use of ¥1,050 per month for the smaller businesses in Japan of paper and ink, says NTT are simply not used to email- service, plus a connection Communications. One likely fee. Subscribers can send ing attached files or scanned outcome is that the service each other documents free documents, and tend to fall will put another nail in the back on the dusty facsimile in of charge; otherwise, the coffin of the fax machine. cost is ¥8.4 per three minthe office corner.

But can it short-circuit the utes. In return, the service NTT’s ever-busy markettime-honoured protocol of “contributes to your business ing people have observed Japanese offices, where the efficiency”, promises the this phenomenon and come ubiquitous office lady invariacompany. “Fax contents may up with what it says is an bly prints out documents and be opened with a PC or a celeco-friendly alternative. The takes them, in both hands, to lular phone via the internet 050 Green Fax allows a PC or her often elderly boss’s desk wherever you happen to be, mobile phone to send faxes for perusal? Green fax or not, even from outside the office over the internet using an IP it’s hard to see that changing or during a business trip.” telephone number, startNTT adds another carrot for anytime soon. ing with 050. Essentially the June 2011

39

EVENT REPORT

Giving Back to Japan 25 April 2011, Mandarin Oriental Tokyo, joint chamber event Text and photos TONY MCNICOL

NEVER BEFORE HAS SO MUCH BEEN SAID IN SO LITTLE TIME Duco Delgorge

The earthquake relief event started from “a feeling of helplessness”, co-organiser Martin van der Linden told a packed hall at the Mandarin Oriental Tokyo. Despite its genesis in that very human response, the joint chamber event in April gave much help to companies on how to respond to the worst natural disaster in Japan’s modern history.

“We hope that this forum will help you reduce this feeling of helplessness, and that you will be able to go out and do something,” said Van der Linden.

The NGOs speaking at the event ranged from the local to the multinational, and together gave the 200strong standing room only audience a vivid impression of ongoing relief efforts, as well as long-term challenges. The ¥675,000 raised directly from the event was allocated among participating NGOs. Some 17 chambers took part, including the EBC, European national chambers, American Chamber, Australian and New Zealand Chamber and South African Chamber.

Jack Bayles, director of food bank Second Harvest Japan, described how their work started at 9pm the night of the earthquake, with giving out food to stranded commuters near their warehouse. In the first five weeks after

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June 2011

the quake, they loaded 100 trucks with supplies for north Japan, said Bayles.

“We are almost out of the first phase when people didn’t have enough food,” noted Bayles. But with the food distribution and local employment systems shattered, the food needs of victims will still be an issue for some time. The key, he said, is to help people in a way that they don’t feel like they are receiving charity.

Katsuo Kohtani, chairman of the board of People’s HOPE Japan, detailed their help to the All Japan Hospitals Association. The charity is the recipient of funds of the EBC Disaster Relief Fund (see page 12).

Tatsuya Yoshioka, director and cofounder of Peace Boat, appealed to members of the audience to volunteer in northern Japan, or to loan staff from their company. More than 100,000 houses have been damaged by mud from the black tide, he said, and the NGO’s volunteers are undertaking the laborious task of shovelling mud and clearing debris. They would like to continue the clean-up work for at least a year, but need to raise around ¥500m to do so.

Kimie Moriya, secretary-general of Kokkyo Naki Kodomotachi (Children

without Borders) described their support for stricken communities with festivals and other events to help sustain community links. “All our work is very small scale, but we have a close relationship with the people we help,” she said. “We still need continuous support to maintain the children’s mental health.”

As well as reports from McCann Erickson Japan, Quakebook, Weber Shandwick and PA International, the audience heard from Otohiko Hori, deputy director general of the Japan Red Cross Society. The most prominent NGO involved in the relief effort had (at the time of the event) collected ¥143bn, over a third of which had already been distributed in the disaster zone. The NGO had also dispatched 2,700 staff and given out 137,000 blankets.

The last words before a crowded networking buffet went to the organisers Duco Delgorge and Van der Linden.

“Never before has so much been said in so little time,” remarked Delgorge. Van der Linden paid credit to the enthusiasm of both everyone who took part, and his friend and co-organiser.

“I got 900 emails in two weeks, about half of them from the man standing next to me … incredible energy,” he quipped.

A follow-up event to report on continuing efforts is planned for the autumn.

Who’s Who

Recreation & Relaxation As temperatures and humidity levels rise, you owe it to yourself and your family to enjoy the ease of travel Japan has to offer. You’re just a hop, skip and a jump from multi-star hotels and private resort clubs that define the ultimate in recreation and relaxation.

World-class airlines deliver seamless connections between domestic and international flights at Japan’s main international hubs in Tokyo, Osaka, Nagoya, Chitose and

Fukuoka. Such convenience provides a greater range of destinations from which to choose. Business- and first-class passengers enjoy dedicated check-in lanes and lounges. Exceptional in-flight service, menus, seating and entertainment systems ensure that your vacation starts onboard.

Let your next R&R rendezvous be the best ever.

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Who’s Who // Recreation & Relaxation

Alitalia – Compagnia Aerea Italiana

Tel

03-3568-1603

Web site

www.alitalia.com

Alitalia - Compagnia Aerea Italiana is a completely private airline, operating more than 2,600 weekly frequencies in the Summer season 2011, across a network of 92 destinations – 29 of which are in Italy and 63 the rest of the world – with an operating fleet of 147 aircraft.

Alitalia is leader for direct flights between Italy and the U.S.A., and the only airline that connects Italy and Japan with direct flights to Tokyo and Osaka. Starting from 1st June 2011 Alitalia’s new RomeRio De Janeiro and Rome-Beijing flights will start operations.

Since 2009, 19 new Airbus A320s and three new Airbus A330s with full-flat seats in Business Class and a new Premium Economy Class with superior comfort joined the Alitalia fleet.

A reconfiguration programme of the Boeing 777 fleet has started, leading to a harmonisation of the entire Alitalia intercontinental fleet.

Alitalia renewed the entire in-flight service, offering the recipes of Italian regional cuisine and wine selected from the best Italian wine among the best Italian wine producers by the Italian Sommelier Association.

Until 31 December 2011, passengers who join the Alitalia MilleMiglia Programme will earn double miles on Alitalia direct flights from Tokyo to Rome and Milan, and from Osaka to Rome.

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June 2011

Who’s Who // Recreation & Relaxation

ANA InterContinental Ishigaki Resort

Address

354-1 Maesato, Ishigaki, Okinawa 907-0002, Japan

Tel

0980-88-7111

Fax

0980-88-7211

Reservation 0120-455-655 (toll-free, English/Japanese) isghr@anaintercontinental-ishigaki.jp Email Website

www.anaintercontinental-ishigaki.jp

Tropical Paradise in Japan Overlooking the tranquil waters of Maesato Beach in Japan’s southernmost city, the expansive grounds of ANA InterContinental Ishigaki Resort invite relaxation – whether your time is spent lounging by the pool in our lush gardens, indulging in a deep-sea water spa treatment, or taking advantage of our generous athletic facilities for golf, tennis and marine sports. Our location on Ishigaki Island, the transportation hub of the Yaeyama Archipelago, is only an hour away, yet a world away, from Naha.

Rich cultural traditions, abundant coral reefs, flavourful regional foods – along with the natural warmth of its people – make this island getaway a destination that will bring you back time and time again. The hotel itself is within easy reach of Ishikagi Airport, a convenient 3km away.

Come and discover a leisure side of Japan you never imagined existed! And let the ANA InterContinental Ishigaki Resort define luxury that is genuine and taps the rich isle resources.

June 2011

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Who’s Who // Recreation & Relaxation

Lufthansa German Airlines

Tel

0120-051-844

Website

www.lufthansa.com

Lufthansa celebrated 50-years of operation between Japan and Germany on 24 January 2011. You can depend on Lufthansa to get you to your destination, which includes the airline’s A380 connecting Tokyo-Frankfurt seven days a week. This aircraft, with more than a 500-passenger capacity, has 98 seats set aside for Lufthansa’s top-quality Business Class on the upper deck, providing an exceptional level of comfort and service en route.

At many airports, Business Class guests utilise one of the numerous Priority Check-in counters. On long-haul routes, Lufthansa creates an onboard environment of greater exclusivity, flexibility and peace of mind – where you can sleep soundly, relax or work. The airline’s onboard broadband internet-access service, “FlyNet”, is scheduled for Japan routes in the near future.

Business Class offers a choice of three starters and spoils you with mouth-watering cuisine, thanks to Lufthansa’s cooperation with either luxury hotel chains or popular restaurant chefs. Regional star chefs create delicious local delicacies on selected intercontinental flights. Culinary delights are suitably complemented by tableware designed by Rosenthal. Individual Express Menu and optional “Breakfastto-go” mean you can rest longer.

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June 2011

Who’s Who // Recreation & Relaxation

Pacific Islands Club – Guam

Address Tel

210 Pale San Vitores Road, P.O. Box 9370, Tamuning, Guam 96931 +1 671-646-9171

Fax

+1 671-648-2474

Email

picmail@picguam.com

Website

www.picresorts.com/Guam/Index.asp

The tropical islands of the Marianas are barely 3 hours away from Tokyo. PIC Guam is the largest hotel in the region and Guam’s only true resort. Enjoy our warm hospitality, comfortable accommodations, spectacular restaurants, and the multitude of sports and activities organised by our ambassadors of fun, the PIC Clubmates. Relax on the beach, laze around the Waterpark, or take a tennis or a windsurfing lesson. Later, dine in one of six restaurants and catch the award-winning Pacific Fantasies dinner show or the lively, fun-filled entertainment performed by the Clubmates. And, no vacation at PIC would be complete without a visit to PIC’s signature spa, the Jiivana Spa for Well-being.

Incentive and conference groups find PIC Guam’s hotel services and facilities perfect for business meetings or informal receptions. The Tasa and Halagi rooms form an elegant and intimate banquet facility available for private banquets, meetings, cocktail parties and conferences. PIC also boasts Guam’s largest meeting facility, the 15,000ft2 Pacific Pavilion.

Whether your needs are large or small, PIC Guam can provide you with a fully satisfying incentive/meeting experience.

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Who’s Who // Recreation & Relaxation

Pacific Islands Club – Saipan

Address

P.O. Box 502370, Saipan, MP 96950

Tel

1-670-234-7976

Fax

1-670-234-6592

Email

sales@picsaipan.com

Website

www.picresorts-saipan.com

The Pacific Islands Club Saipan (PIC) provides over 60 different types of sports and recreation free of charge to our guests.

PIC’s concept combines the convenience of an all-inclusive concept for families, couples and solo travelers to experience an unforgettable holiday filled with fun, spectacular cuisine and adventure. Relax on the beach, laze around the Waterpark, take a windsurfing lesson or challenge your friends to an awesome laser tag game.

Try one of the many land or water sports activities such as tennis, rockwall climbing, archery, outrigger canoe or paddle boarding. While your kids amuse themselves at our Kids’ Club, grab a tube and glide along the Lazy River, shop at the Boutiki or relax with a soothing Thai massage. Later, you can dine in one of the four restaurants, enjoy the sunset with a refreshing cocktail and catch the lively, fun-filled nightly entertainment performed by our Clubmates.

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June 2011

Who’s Who // Recreation & Relaxation

Scandinavian Airlines

Tel

03 5400 2331

Website

www.flysas.co.jp

Make it Scandinavia this summer!

“Yesterday I played golf at midnight – in broad daylight!”

Scandinavian summers are simply magnificent. It’s light enough to play golf, go cycling or just read a book outside in the middle of the night. You’ll get less sleep, but have more time and energy to discover Scandinavia’s stylish cities and quaint seaside towns, magical forests and breathtaking countryside.

SAS takes you there from Tokyo, and we have been doing this since 60 years ago. Back in 1951, SAS inaugurated its first flight between Tokyo and Scandinavia.

SAS offers three service classes – Business, Economy Extra and Economy. SAS’s unique “Combinable Fares” allow passengers to combine two of the service classes in one roundtrip ticket.

Copenhagen airport offers world-class transfers, making your travel faster and smoother, not only within Scandinavia, but also to more than 100 destinations in Europe. If you are planning a vacation to one of SAS’s destinations – Bergen, Brussels, Milan or others – you’d better book soon as our summer flights are always popular.

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SHOP WINDOW

Facebook gains traction by offering something different Less than once a month 5.2%

How do you use Facebook?

Keeping up to date with friends

Once a month 8.2% 2-3 times a month 13.8%

Finding old friends

How often do you access Facebook?

Once or more a day 33.4%

Updating own activities Finding friends overseas Chatting with friends

Once a week 17.6% 2-3 times a week 21.8%

Finding like-minded friends Sharing photos 0%

Japan has its own powerful social networking sites (SNS), notably Mixi and Gree. As a result, Facebook has made less headway here so far, but it is catching on fast, particularly among Japanese with friends overseas.

In a January survey by Macromill of 500 Japanese Facebook users, respondents said they find Facebook useful to stay in touch with friends, whereas Mixi is used more as a mini-blog and Gree for games.

A key appeal is the site’s global reach according to 63.8%, as well as its use of real names, which make it easier to find old friends – very different from privacy-obsessed Mixi and Gree. Most Japanese Facebook users (78.6%) display their real names on the site, with 87.6% revealing their gender and 69.4% their age.

Facebook is still playing catch-up with Mixi, but it is making progress. Some 50.6% of those surveyed became Facebook members only in 2010, and a further 15% signed up in 2011. The average number of “friends” was 26, 61.8% linking just

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10%

20%

30%

40% 50%

with people they knew, but a significant 28.4% befriending people they had not met offline.

Although Facebook has been criticised here for a lack of privacy safeguards, it is no worse than any other SNS in Japan. More and more Japanese retailers are tapping Facebook’s vast global reach to target customers abroad. Uniqlo recently launched a Facebook fan page, and the success of one apparel company, Satisfaction Guaranteed, is largely thanks to Facebook. Other companies are likely to follow.

ROY LARKE JapanConsuming is the leading provider of intelligence on consumer and retail markets in Japan. The monthly report provides news about, and in depth analysis of, current trends.

JC

JapanConsuming

For more information, please see www.japanconsuming.com or contact Sally Bedown at subs@japanconsuming.com

EVENTS

Upcoming events > British Chamber of Commerce in Japan www.bccjapan.com

BCCJ 51 informal networking night 14 July, Thursday, 19:00-21:00

Venue: Conrad Tokyo 28F, Twenty Eight Bar and Lounge Fee: ¥4,000 (members, guests)* Contact: info@bccjapan.com * 3 drinks & selection of food

> Danish Chamber of Commerce in Japan www.dccj.org

The DCCJ social circle

> German Chamber of Commerce and Industry in Japan www.japan.ahk.de/en/

Luncheon meeting: “Stop selling, start managing” 23 June, Thursday, 12:00-14:00

Speaker: Ziya Muhamedcani, Sales Institute – Japan KK Venue: Shangri-La Hotel Tokyo, Conway Room 27F Fee: ¥6,000 (members) Contact: events@dihkj.or.jp

> Swedish Chamber of Commerce and Industry in Japan www.sccj.org

9 June, Thursday, from 18:30

Venue: Balcony Restaurant and Bar, Izumi Garden Tower 3F, Roppongi Fee: no cover charge Contact: dccjsocial@gmail. com

Monthly club evening

> Swiss Chamber of Commerce and Industry in Japan

JUNE

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Speaker: Ross Rowbury, Edelman Japan Venue: Hotel Okura Tokyo, Kensington Terrace Fee: ¥8,000 (members) Contact: info@sccij.jp

> The Bellwether Series: Japan 2011

The future of finance in Asia-Pacific

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Venue: The Westin Tokyo Fee and contact: www. economistconferences.asia/ event/bellwether-seriesjapan-2011

14 June, Tuesday, 19:00-21:00

Venue: Restaurant Stockholm Fee: ¥4,000 Contact: office@sccj.org

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Upcoming meetings R Animal Health

24 Oct, Mon, 17:00-, EBC

R Legal Services

23 Aug, Tue, 08:30-, EBC

23 Sep, Fri, 14:00-, off-site 16 Dec, Fri, 14:00-, off-site

R Environmental Technology

8 Sep, Thu, 18:30-, off-site 17 Nov, Thu, 18:30-, off-site

R Sustainable Development

R Asset Management

23 June, Thu, 08:30-, EBC 25 Aug, Thu, 08:30-, EBC

R Materials

2 Sep, Fri, 09:00-, EBC 11 Nov, Fri, 09:00-, EBC

22 July, Fri, 12:00-, EBC 22 Sep, Thu, 12:00-, EBC

R Automotive Components 30 June, Thu, 16:00-, EBC 6 Oct, Thu, 16:00-, EBC

R Construction 30 Aug, Tue, 17:00-, EBC

R Food 9 June, Thu, 09:00-, EBC 14 Sep, Wed, 09:00-, EBC

R Human Resources 28 June, Tue, 19:00-, EBC 26 July, Tue, 19:00-, EBC

29 Aug, Mon, 17:30-, EBC 21 Nov, Mon, 17:30-, EBC

23 June, Thu, 14:00-, off-site 21 July, Thu, 14:00-, off-site

R Telecommunications Carriers R Telecommunications Equipment

R Railways

16 June, Thu, 10:00-, EBC 15 Sep, Thu, 10:00-, EBC

R Medical Equipment

7 June, Tue, 08:30-, EBC

Committee meeting dates are subject to change. Please contact the EBC secretariat for confirmation.

Tel: 03-3263-6222. E-mail: ebc@gol.com Compiled by DAVID UMEDA June 2011

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Christoph Saxer In it for the long-run Text and photo TONY MCNICOL

EBC PERSONALITY

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t the age of 20 Christoph Saxer journeyed from his home in Switzerland to an athletics competition in Prague. It was there that he first met his hero, Emil Zátopek, the legendary Czech longdistance runner. Zátopek gave Saxer an autographed copy of his biography. Saxer, already an enthusiastic linguist as well as runner, promised that next time he visited he would be able to speak Czech.

The book has travelled with Saxer to jobs in North America, South America and Japan, where today he works for Novartis Pharma KK. Meanwhile, Zátopek has remained an inspiration in both Saxer’s business and running careers.

“Zátopek told me that he was not very talented, but that it was his will, his motivation,” says Saxer. “He was famous for exercising his physical limits.”

Five years after meeting his hero, Saxer ran a two-hour, 17-minute marathon, putting him in the top echelon of Swiss athletes. “I wasn’t a talented runner when I started either, [but] I prepared for 10 years.”

Saxer’s interest in Japan goes back to 1993 when he was working in market research for Sandoz (now Novartis) in Colombia. His Japanese boss intrigued him with talk of Japan’s culture and language.

Saxer applied for a job with Sandoz (now Novartis Pharma) in Japan, and arrived in February 1996 for a one-year contract at a research facility in Tsukuba, Ibaraki prefecture. He immediately threw himself into study of his new home.

“To draw a parallel with marathon running, [learning about a new country] is like a preparation phase on sand,” he says. “You take a step forward and you slip a little back.

“Some things seem wrong at first, but when you dig deeper into the culture, you realise that that may be a better way to do things.”

Most important, he says, is to “respect your surroundings”. The support of Japanese colleagues was invaluable, he says.

Alongside running, Saxer’s other great passion is language learning – an interest that really took hold when he was a research fellow in protein chemistry and microbiology at Boston University early in the 1990s.

He started learning Spanish, and also took night-school classes in Czech, joining Harvard University’s Slavic language department as a guest student. In 1994, he was able to travel to Prague again and fulfil his promise to Zátopek.

But the language learning didn’t stop there. Saxer gets by in Swiss German (his mother tongue), a couple of other European languages and, from Asia, Japanese and Thai.

“I am now fortunate to speak about 10 languages, but none perfectly,” he says. (His latest challenge is Mandarin Chinese.)

“In marathon running you often fail before you succeed. It is a good basis for language learning.

“I was not talented at foreign languages at school. But through marathon running I had the opportunity to compete internationally, so I would have felt bad if I couldn’t communicate.”

Yet linguistic proficiency is just one tool the Japan-based businessman can use, he stresses. “The key to managing in Japan is being honest, taking time to listen – and to focus on the long term.”

IN MARATHON RUNNING YOU OFTEN FAIL BEFORE YOU SUCCEED. IT IS A GOOD BASIS FOR LANGUAGE LEARNING That long-term approach is something that Japanese and Swiss companies have in common, he says. It is also something characteristic of the pharmaceutical industry with its huge investments and long development periods.

Saxer served as treasurer of the Swiss chamber in Japan from 2007 to 2010, acting as the chamber’s liaison with the EBC. In autumn 2009 he joined the EBC executive operating board.

“It’s a tremendous opportunity to see what is going on in European business in Japan, and also to see the economy from different angles,” he says, adding that he relishes the chance to learn about

Do you like natto?

Title: Manager, Development Finance group, Novartis Pharma KK Career highlight: “Becoming a permanent employee at Novartis. It sounds basic, but at the time it really was a breakthrough.”

Career regret: “I have no regrets. I want to learn from my mistakes and focus on the future.”

Couldn’t live without: “matcha (green tea) and wagashi (Japanese cakes) after a long run” Most important lesson: “To be patient, see networking as an investment.”

Favourite book: “A biography of Emil Zátopek [a legendary Czech runner]” Do you like natto? “No, I prefer Swiss cheese, although it smells similar.”

industries different from his own. “I like to bridge cultures of all kinds.”

Saxer lives with his wife Yukako not far from Novartis’s offices in Nishi-Azabu.

They were married in Meiji Shrine five years ago. As well as running and cooking, he counts collecting gemstones amongst his hobbies. He has hundreds, “varying hugely in value”, and dug out many of them himself on his travels.

“In conclusion: I am always short of time,” says Saxer. “I want to do many things.”

3,776 runners Shortly after coming to Japan Saxer took a break from running, being too occupied with studying Japan’s language and culture. But three years ago he dusted off his old running shoes. “I started again from zero,” says Saxer, adding that it was “extremely tough”.

Characteristically, he has already set himself a formidable goal. “I plan to run up Mount Fuji in July.”

The annual Fuji Mountain Race involves 3,776 runners (Fuji’s height in metres) competing over two courses: 15km and 21km. Saxer will be running the longer race to the summit – a 3,000m climb.

But his attitude to everyday training is more relaxed. “I never time my runs now,” says Saxer. “I want to enjoy them [and] it is more for health. The running helps me to concentrate at work.” He runs 120 to 140km a week, often before work.

“The early morning in Tokyo is very beautiful.”

June 2011

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Wet, wet, wet Photos and text ALFIE GOODRICH

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June 2011

LENS FLAIR

As fetishes go, I guess shooting pictures of umbrellas and umbrella-toting Tokyoites is pretty tame. And the only trouble I’ve ever encountered is getting too carried-away taking the picture and forgetting that, after a point, cameras don’t do well in the wet.

Some people see rain as a reason to leave the camera at home. Me, well, I can’t resist going out.

First there are all the different kinds of umbrellas that people carry. Then there are the different conditions in which they carry them. Maybe you’d find these sorts of scenes anywhere, but the particular twist in Tokyo is the proliferation of transparent umbrellas and neon (although slightly less neon now that Tokyo is saving energy after the earthquake).

The mix of shape, colour, light and water is what intoxicates me about shooting in the rain. And, for the most part, my Nikons have served me well, despite the definition of “weatherproof” having been pushed to its limits. For the prize, it is always worth getting a little damp.

See all the photographs at www.eurobiz.jp

June 2011

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WORK PLACE

John MacGoey Managing Director, Hella Japan Hella KGaA Hueck & Co. makes lighting and electronic components for the automobile industry, and with 23,000 employees worldwide is one of Germany’s largest automotive supply companies.

Hella Japan was founded in 2006.

“We have a technological edge,” says MacGoey.

“We are the world market leader for many of the components we make, and we bring the latest in European technology to Japan.”

Photo TONY MCNICOL

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June 2011