EURObiZ Japan May 2011

Bricks economy LEGO Japan The Keidanren calls for urgent action Ken Millhouse LEGO Japan

Moshi moshi – on communicating with HQ Eco-friendly underwear

05

2011

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

Fukuoka Ideal for access to Japanese and Asian markets

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Gateway to Asia

8 FOCUS

8 Recovery and restoration EURObiZ Japan talks to Tadashi Saito about the Keidanren’s urgent policy proposals

12 Comrades in arms EU defence manufacturers seek a beachhead in the Japanese market

By Geoff Botting

18 Moshi moshi Japan bosses on communicating with HQ

By Gavin Blair 2

May 2011

2437 2250 Cover photograph Benjamin Parks

COLUMNS 7 From the Editor 16 Q&A

by the Economist Corporate Network and charity KIBOW.

30 Culture Shock

David McNeill discusses Japan’s ageing society with Florian Coulmas of the German Institute for Japanese Studies.

Karl Mallia came to Japan from Malta to study sushi.

21 Executive Notes

32 EBC committee schedule

Dan Slater explains why we should thank the flyjin.

35 Green Biz

22 Investing in Japan

Japan’s oldest manufacturer of underwear has a new line of “eco-pants”. By Alena Eckelmann.

LEGO’s business in Japan has undergone an amazing turn-around.

24 In Committee The EBC Materials Committee says that reducing tariffs will benefit Japanese industry. By Geoff Botting.

27 Event Report

37 Event Report The “Italian Notes for Tohoku” concert featured world-famous accordionist Coba.

38 Who’s Who Directory Management Consulting in Japan

44 Shop Window Home centres are doing well and helping the relief effort. By Roy Larke.

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

48 EBC Personality Holger Wittich arrived in Japan three years before the Tokyo Olympics. By Julian Ryall.

50 Lens Flair Damon Coulter photographs the Kintaro Duck Race

52 Work Place Nick Waddington is CEO of Montblanc GBU Japan.

The “Rebuilding Japan” event was organised

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

May 2011

3

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, Fred Moustin

Communications & PR Victoria Fang

Production and distribution

Subscription is free for members of the EBC and national European chambers of commerce.

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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.

Executive Director Alison Murray

If you prefer not to receive this magazine, and for all matters related to distribution, please send an email to eurobiz@paradigm.co.jp EURObiZ Japan welcomes story ideas from readers and proposals from writers and photographers. Letters to the editor may be edited for length and style.

Big in Japan: Galoshes, shovels and elbow grease

Contributors Geoff Botting reports on EU defence exports to Japan, page 12

Geoff is a freelance journalist and translator based in Tokyo. He was a military brat as a child, spending his early years on army bases in West Germany and Canada, so defence

Gavin is a freelance journalist who covers Japan for The Christian Science Monitor, The Hollywood Reporter and Global Post, as well as magazines in Asia, Europe and the United States.

“Listening to heads of Japan operations describe how, despite all the challenges, this is still a very lucrative market was reassuring to someone who makes their living here.”

Alena Eckelmann writes about eco-friendly underpants, page 35 Alena is a German freelance writer based in Tokyo. A researcher by profession and at heart, she has a wide range of interests and regularly contributes articles on Japan-related topics, including business,

issues have long held special interest for him.

“Throughout the postwar period, Japan’s government and people have had an uncomfortable, if not antagonistic, relationship with their Self-Defense Forces (SDF).

However, attitudes seem to be changing.

In light of recent territorial disputes and reports of North Korea’s nuclear weapons programme, more and more decision-makers and members of the public alike are finally coming to terms with the people and institutions whose job is to defend the country.”

Gavin Blair writes about dealing with HQ, page 18

community, non-profit and education, to publications in Japan and abroad. She came to Japan on EU’s Executive Training Programme in 2005 and currently also works for the Japan Market Expansion Competition (JMEC) as assistant program director.

“I first envisaged eco-pants as ivory-white cotton undies worn by dyed-in-the-wool environmentalists. But I hadn’t heard of Gunze’s sporty designer wear with green credentials. Eco means fun. Is this the marketing strategy to persuade consumers?”

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F rom the E ditor

Black swans and black ships A black swan. That was how one panelist at an Economist Corporate Network event on 14 April (page 27) described the triple calamity that has struck Japan – an event so unlikely as to seem inconceivable beforehand, but one that is quickly rationalised after. It is hard to believe it is only two months since the earthquake.

Others talk of black ships. Will the crisis trigger change just as Commodore Perry’s warships did in 1853? It’s a clichéd narrative familiar to those who have been in Japan a while – a “third opening” to the West. But the very scale of this crisis could well make change inevitable.

Let’s hope it’s not negative change due to inaction. Standard & Poor’s 27 April downgrading of Japan’s credit rating was a warning shot across the nation’s bows. Japanese business is as concerned about the situation

NEXT 3 Nestlé Japan 98 years in business MONTH

as foreign business, and the EBC has been in close contact with the Nippon Keidanren since 11 March. The Keidanren’s Tadashi Saito details the organisation’s urgent recommendations to the Japanese government on page 8.

Nevertheless, business is quickly getting back to (a new) normal. This issue includes stories on how to deal with 3 NTT’s “Green Fax” service The fax lingers on

HQ back home (page 18), LEGO Japan’s remarkable turnaround (page 22) and Gunze’s eco-friendly and varicolored underwear (page 35).

Thank you again to everyone who provided information on relief efforts for our April issue. I know that many EBC members have been even busier since. It’s been truly inspiring to see how quickly and effectively professional decision-makers can move into action.

I’ll be travelling up to Tohoku in a few days to see how money donated to the EBC’s Disaster Relief Fund is being used.

That report will be in next month’s magazine.

Tony McNicol Editor-in-Chief

tonymcnicol@paradigm.co.jp

3 Wet, wet, wet

Photos of the rainy season

The importance of communications Our prayers and hearts continue to go out to the many thousands of people who continue to face incredible hardship and difficulties in the regions most impacted by the recent earthquake and tsunami.

One side effect of this disaster has been a heightened consciousness among all people of the need for open and transparent communications.

While communicating in a disaster is never easy, the general and business public has generally found the efforts of particularly the government and Tokyo Electric Power Company to be lacking in both quantity and quality of information. In one sense, this has raised the level of expectation of corporate communications. Companies

will eventually be held to higher communications standards by their stakeholders.

This heightened level of expectations comes at a time when the challenge for foreign companies in communicating with both their internal and external stakeholders has never been stronger.

This disaster will result in a new definition of “good purpose” in Japan.

Companies will need to proactively communicate how they are contributing to the rebuilding effort, whether directly or through co-operation in power and other resource conservation. Some companies may have to face the challenge of justifying actions taken during the dark days immediately following the disaster. Others may have

to communicate to overseas customers effectively on perceived radiation risks in their products.

The need for a solid communications strategy to build and maintain corporate reputation, as well as inform and motivate employees, has never been greater.

Ross.Rowbury@edelman.com

Recovery and restoration 8

May 2011

Tadashi Saito talks to EURObiZ Japan about the Keidanren’s urgent policy proposals Photo Benjamin Parks

F ocus

Following the 11 March earthquake and tsunami, the Nippon Keidanren made urgent policy proposals to the Japanese government and set up a special committee for recovery and restoration on 24 March. The director of the Keidanren’s Political and Social Affairs Bureau, Tadashi Saito, explains how his organisation wants urgent action and strong political leadership.

How did the Keidanren respond to the crisis?

Initially, there was a shortage of petrol and other fuel, so we contacted the Petroleum Association of Japan, which is also in this building.

They said there was enough petrol.

Hundreds of tanker lorries were coming to Tokyo, but they couldn’t go north because they didn’t have the right paperwork. So we asked the police to ease those rules.

In normal times, police and government officials should maintain laws and regulations, otherwise the administrative system cannot work. But during an unprecedented incident like this the government should be flexible. On 16 March, on our recommendation, the government completely changed the procedure; when tankers reached highway gates they were given stickers to let them pass.

What are the most pressing issues now?

For the first week or two there were shortages of food and relief goods; now there is a shelter problem. More than 130,000 people are living in temporary shelters. So the prefectural and town governments will try to build temporary apartments.

The Sanriku area is similar geographically to Norway; the mountains are very close to the coast. In order to be safe from tsunami those temporary apartments should be built on high ground, but there isn’t enough space. That’s why it will take a very long time.

After the Niigata earthquake enough apartments were built in a couple of months. It is estimated that more than 80,000 temporary apartments will be needed this time, but it will take three or four months to complete that many.

How are Keidanren member companies helping?

One initiative is to send volunteers from companies to work with NGOs as they assist people affected by the earthquake and tsunami. Volunteers from member companies would go for about five days at a time. We are trying to charter buses from Tokyo. The volunteer centres are requesting help with various jobs, such as delivering goods and food, or cleaning out homes.

Did you do something similar after the Kobe earthquake?

Kobe is very close to Osaka, where many companies have their Kansai headquarters. Kobe was very badly damaged but Osaka less so, so corporations sent many staff to Kobe to help their employees, their families and other people. In that sense, it was quite simple. But this time, the area is more remote – and much bigger. That’s why we are cooperating with volunteer centres, run by local governments and NGOs, to coordinate efforts. It is very important to send people with management expertise. We are asking for managers to help lead the volunteers.

How can Japan recover quickly from this crisis?

We have issued two sets of proposals for early recovery from the earthquake, but the damage is huge. Government estimates are ¥15 to 20 trillion, and those figures don’t include compensation following damage to the nuclear plant.

One problem is the damage to factories and supply chains. The power shortage is another. We have asked our members to make plans to cut energy consumption; they have to reduce usage by 25%. But TEPCO has recently revised their power-supply shortage estimate,

so it looks like less than 25% will be OK. That’s good news. We have also asked members to shift production activities to western Japan.

Up till now the government has found it hard to get public support for, say, changing the tax system. Could the crisis change that?

Many Japanese people are very cooperative if the target is clear, but if the target is not clear, it is very difficult. That is why we asked the government to establish strong political leadership and a disaster command centre. It needs clear vision, and that vision should reflect the wishes of local people; not top-down, but local consensus.

Only a small number of people anywhere support raising taxes. But if the purpose is clear, the Japanese people can accept higher tax. As our chairman Hiromasa Yonekura has said, a corporate income tax reduction was scheduled for this year, but if the government offers a clear vision then the Keidanren is prepared to accept the postponement of that tax cut.

The government has several ideas for raising funds, such as increasing consumption tax, corporate tax or income tax, or issuing special earthquake bonds.

Our view is that income from a consumption tax rise should be used for social security purposes. But currently there is a dearth of practical ideas.

In Europe, flexitime and working from home are much more common than in Japan. Could that help solve energy shortages?

Our members are talking about this a lot: for example, how to encourage employees to travel during the summer.

The best solution would be for people to take long summer vacations in western May 2011

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Back in business and better than ever !

For any of us caught in the events surrounding March 11 – we have all experienced something we will never forget.

Our thoughts and prayers go out to everyone impacted by this tragic event. In the ensuing month, we have seen an incredible country respond to an unprecedented natural disaster with remarkable bravery, determination and compassion.

McCann Worldgroup is a leading global marketing communications company, with over 50 years experience in Japan.

We recently conducted a detailed research study in the Kansai and Kanto areas to understand current thoughts and attitudes in the market plus an additional study of global perceptions of Japan. I would be delighted to share the findings with any of the members of the EBC who may be interested.

The results are truly inspirational.

The Fukkatsu (revival) spirit is high. The Japanese people and business community are confident and determined.

Their ability to re-build is supported by a strong spirit of resilience and endurance.

As we all know, Japan has the commitment to make the necessary effort and indications are that the recovery is already underway – and it will happen fast.

As a business community, I believe we have a collective responsibility to show the market – and the world – that Japan is back in business and will be better than ever !

Built on the core foundations of quality, consistency and reliability – we firmly believe business in Japan will recover fast and continue to flourish in the future.

Michael Mclaren CEO & Representative Director McCann Worldgroup Holdings Japan Inc. http://www.mccann.co.jp

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

To join the EBC visit

www.ebc-jp.com For more information please contact the EBC Secretariat.

Alison Murray, EBC Executive Director.

Tel: 03-3263-6222. E-mail: ebc@gol.com

FOCUS

during an unprecedented incident like this the government should be flexible

Japan. Otherwise, even if offices are closed, people will use electricity at home.

Car manufacturers are discussing staggering vacations and production line stoppages. Remote working is one idea, but the remote location would have to be outside the TEPCO area to reduce peak usage.

Another idea is to have something like a Spanish siesta – people would go home after lunch and sleep. Or companies could ask staff to start work early in the morning, at four or five o’clock, then finish work at noon or one o’clock.

That might be the best, albeit a drastic, solution.

After Fukushima, do you anticipate a dramatic change in Japan’s energy policy?

First, the government should look at the cause of the accident and set more rigorous safety targets. But it is almost impossible for Japan to close down every nuclear power station. Currently more than 30% of Japan’s electricity is generated from nuclear power. Also, the government has CO2 reduction targets to meet. The most effective way to reduce CO2 is to use nuclear power. There has

to be some kind of change, but not a radical change such as giving up nuclear power.

What lessons do you think have been learnt from the disaster by Keidanren members?

There are lessons regarding management and software, but we should be more proud of our technology. Even at the Fukushima power station, there was damage from the tsunami, but not from the earthquake itself.

After the Hanshin earthquake (1995) it took three or four months to restart Shinkansen trains. After the Niigata earthquake (2004) it took two months.

But the Tohoku Shinkansen has restarted only one-and-a-half-months after the earthquake.

I heard that 15 to 20 Tohoku Shinkansen trains were running on the line at the time of the quake, and stopped for safety reasons. But no trains derailed.

The problem was the tsunami. People living in the Sanriku area have suffered tsunami before – that’s why the highest sea walls were 10m, to help people feel safe. But this time a 15 to 20m tsunami came. No one had imagined that.

Will it be possible to rebuild the communities in the same place?

There are lots of ideas, such as building new towns on higher ground and having residents commute to the port.

But it is very difficult to get local people to agree to live away from the port.

Fishermen do not want to live away from their boats; that’s natural. But the government should convince people.

The government needs a more concrete vision, and ideas.

The rights of land use are very complicated and, in order to make new town projects the government will have to remove some private rights. It will need a very good plan to convince people. But time is short. If the government takes too much time, people will go back and build new houses. And after that, it’s too late.

What role can the Keidanren play in the rebuilding?

Last year we had already announced a new town project, comprising eco or IT towns in the countryside; for example in Kamaishi, Iwate prefecture.

Our member companies could participate in similar plans in the devastated areas.

May 2011

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Comrades in arms EU defence manufacturers seek a beachhead Text Geoff Botting

12

May 2011

The Ministry of Defense calls the shift “Dynamic Defense Force”, and it means moving away from the old Cold War arrangements and towards creating units of troops and equipment that can respond to threats quickly and flexibly.

The concept was announced back in December when the cabinet of Prime Minister Naoto Kan unveiled its National Defense Program Guidelines, along with a Mid-Term Defense Program for 2011 to 2015. The plans detail a shift in focus away from Hokkaido, where Japanese personnel have long faced off against the old Cold War enemy Russia, and towards island groups beyond Okinawa, the scene of recent territorial skirmishes with China, whose military might continues to grow.

European defence contractors are monitoring Japan’s new plans with particular interest. Although they have only a tiny share in Japan’s defence market, they hope that the new strategic and tactical approaches will open the door for greater business opportunities, in particular through collaboration and cooperation with Japanese partners.

“With the new defence guidelines, the mid-term defence plan and Japan’s willingness to enter into free trade agreements, I’m hoping this is the dawn of a new era,” says Anthony R. Ennis, chairman of the recently formed EBC Defence and Security Committee.

European companies have long tried to increase their relatively small presence in Japan’s defence market, with little success. When Japan needs hardware, it typically turns first to domestic suppliers. It will then look to its security-alliance partner, the United States, for additional needs. European companies come a poor, and rare, third.

According to estimates by European defence industry officials, about 90% of all hardware is procured from domestic sources, and nine tenths of the other 10% is procured from the United States.

But the Europeans, namely the EBC committee, want Japan’s Ministry of Defense to consider them more seriously when procurement needs arise. After all, they argue, European companies are in a position to deliver equipment that is often more cost-efficient and better suited to Japan’s tactical needs than that supplied by United States contractors.

“The defence needs that Japan has are rather closer to those of European countries,” says Jean-Louis Claudon, committee member and adviser at the Tokyo office of Arianespace. “The scale of budgets is also similar. [Japan wants] the same kind of solutions that have already been implemented in many European countries.”

Cost has indeed become a leading procurement issue.

The administration led by the Democratic Party of Japan (DPJ) came to office in 2009 with a promise to keep a lid on government spending and deal with Japan’s staggering national debt.

Although the defence guidelines call for a number of

improvements in the way Japan’s Self-Defense Forces (SDF) operate and respond, the administration wants this done at a more affordable price tag.

Under the five-year plan, the defence budget is ¥23.49 trillion, about ¥750 billion less than for the government’s previous five-year defence programme. In other words, Japan is aiming for armed forces that are meaner yet leaner.

That is where European companies believe they can play a role. Firstly, throughout the post-war period, they have been forced to perform in tough fiscal environments similar to the environment in Japan, and amid a lot of competition.

“European defence industries, because of the tight budget controls imposed on them by the nations where they’re incorporated, have to come up with cutting-edge, competitively priced solutions,” says Ennis, who is president of North East Asia for Group Business Development at BAE Systems International.

The United States, as a superpower meanwhile, has hardware largely designed to serve the demands of a military that needs to extend itself throughout the world, with costs a secondary factor. “The United States has developed some pretty powerful capabilities, which only the United States can afford to develop or operate,” Ennis says.

I’m hoping this is the dawn of a new era Anthony R. Ennis, chairman of the EBC’s recently formed Defence and Security Committee

Clearly, Japanese taxpayers would get a better deal should the Ministry of Defense look to a wider range of suppliers and more extensive cooperation between Japanese and foreign contractors.

However, Japan’s heavy reliance on the United States for defence hardware would be a hard habit to break. The arrangement stems from the close security alliance the two nations forged throughout the post-war years. It has long been assumed that Japan would by default procure from the United States when looking at foreign contractors.

Much of that reliance is out of a sense of loyalty to an old friend and ally. But there is also the belief among some Japanese and United States officials that relying solely on one nation ensures that all the different hardware meshes smoothly in the field.

Ennis says that assumption is false. The most important requirement, he says, is really “interoperability”, which means all the operators of the equipment can communicate with each other.

“Interoperability has been built into the DNA of European defence planners and the defence industry,” Ennis said in a speech in January to announce the inauguration of his committee.

Jean-Louis Moraud, chairman and president of Thales Japan, says, “There have been many examples, such as in Afghanistan, that show European systems work really well with American ones by cooperating and interfacing with them.

May 2011

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F ocus

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FOCUS

“But some people in the United States say that if you don’t buy from the United States, then you won’t be able to work with your existing United States equipment, an idea that is completely wrong.”

Still, a big political hurdle obstructs European and other foreign contractors: Japan’s “three principles”. Unveiled in the Diet in 1967 and then bolstered in 1976, these principles effectively ban the country from exporting arms. They are seen as part of Japan’s policy of being an international advocate of peace.

However, the security environment surrounding Japan has changed drastically since the principles appeared. The end of the Cold War and the growth of China’s military power are just two developments. What’s more, the last couple of years have seen a number of alarming incidents, including a second test blast by North Korea of what it said was a nuclear weapon, its artillery bombardment of a South Korean island, and a prolonged diplomatic row triggered by the collision of two Japanese Coast Guard ships and a Chinese trawler in disputed waters.

A lifting of the export ban could be a boon for Japanese and foreign contractors alike, according to industry officials, as the move would give equipment and technologies developed in Japan access to other markets overseas. As it stands, Japan tends to get poor value out of the development it does carry out, according to Robin Wilson, naval director at Thales Japan.

“The Japanese, like everyone else in the world, are trying to balance things with a budget that is limited. But in Japan, because of the way they’ve done procurement, which has basically been on a domestic, non-competitive basis, and because there are no exports for the defence industry, it is expensive,” he says.

As Ennis puts it: “The industry is constrained to recovering all its overheads within Japan. The Japanese market is so small that you can’t recover your investment.”

The government’s guidelines seem to recognise that fact, stating: “It has become the mainstream among developed countries to improve the performance of defence equipment and to deal with rising costs of equipment by participating in international joint development and production projects.”

Now the big question for both Japanese and foreign defence contractors is when the three principles will be relaxed. Many observers, including Robert Dujarric, director of the Institute of Contemporary Asian Studies at Temple University Japan Campus, had expected that the guidelines would announce such a move. But as it turned out, there is only brief wording that merely recommends that the policy be considered.

Dujarric believes the principles will eventually be relaxed, but he stops short of predicting when.

“It’s complicated,” he says. “I think they will be relaxed, due to technological, economic and political pressure. But as you know, things tend to move slowly in Japan.”

Tokyo’s current political situation doesn’t bode well for an overhaul in the near future, mainly thanks to the role of the left-leaning Social Democratic Party (SDP) in the administration. The DPJ in 2009 formed a coalition with the SDP, which has been among the country’s loudest advocates of peace, although the former junior partner has since opted to leave the alliance over a quarrel about a United States military airfield in Okinawa.

“They [the DPJ] have dug themselves into a hole, because they wanted the socialists for peacemaking, and they want to portray Japan as a country that is opposed to nuclear weapons,” Dujarric says.

He adds that, at any rate, defence is now not a priority for the government, despite the alarming incidents that have flared recently along and just beyond the nation’s borders. The defence industry is relatively small and the defence budget is only around 1% of GDP, a rate that has remained unchanged for many years, and is now declining slightly. Healthcare and a host of other issues are topmost in politicians’ minds these days, according to Dujarric.

Yet potential threats to Japan’s national security, if anything, are expected to grow in the coming years.

“My view is that Japan can’t deal with the increased threats given its reduced budgets,” Moraud says. “There is less money to invest, and the only way Japan can solve the problem is by looking to Europe.”

The Defence and Security Committee was spun off from the Aeronautics, Space and Defence Committee at the start of this year.

Jean-Louis Claudon of Arianespace – head of the former committee, currently chairman of the Aeronautics and Space Committee, and also member of the Defence and Security Committee – says the spin-off was largely prompted by anticipation that Japan’s Ministry of Defense would start reforming its procurement practices in the near future.

The new committee, headed

by Anthony R. Ennis of BAE Systems, has a dozen member companies, including RollsRoyce International, Airbus Japan and AugustaWestland Japan.

Its recommendations essentially call for a greater amount of competition and transparency in the way Japan’s Ministry of Defense procures its hardware. The committee also says Europe has much experience and expertise of value to Japanese defence planners, and that the two sides should cooperate more.

One recommendation, for instance, is for greater use by the Japanese of Life Cycle Cost (LCC), an analysis method that determines the total cost to the government of equipment throughout its life. The committee argues that Europe can help Japan in this regard, as LCC models used in EU countries are more relevant to Japan than those in the United States, where the values stemming from training, maintenance, and other factors tend to be especially high.

May 2011

15

Grey future David McNeill talks to Florian Coulmas, director of the German Institute for Japanese Studies, Tokyo.

Photo Benjamin Parks

16

May 2011

Q&A

Japan’s population began falling in 2004 and is ageing faster than any other on the planet. Over 22% of Japanese are 65 or older, a figure set to hit 40% by mid-century. At the other end of the population pyramid the nation is running out of babies: Japanese women now have roughly 1.3 children in a lifetime, well below the level needed to maintain the population of 127 million. That inverted pyramid spells a national crisis, says Florian Coulmas, who heads the Tokyo-based German Institute for Japanese Studies.

Why the particular interest in ageing?

This is Japan’s biggest problem. It affects every aspect of the country’s society, economy, culture and polity.

Japan is ahead of the rest of the world.

The issue has come about because this is an enormously successful society, especially since World War II. Ageing means that people don’t die until they are elderly, and if there is any measure of a society’s success, it is that. But it brings huge problems, as we are experiencing now. The demographic equilibrium is out of kilter.

Specifically, what kind of problems?

There are two. The first is Japan’s huge government debt. Who is going to pay it off if you only have pensioners? The second is population decline. The population will shrink by a quarter within 20 to 30 years. That’s huge and means Japan’s position in the world will diminish. That requires adjustments that no other country has had to make in the absence of war, epidemics or famine.

But Japanese politics is totally incompetent. The politicians haven’t woken up to the fact that this is a national crisis.

You study national comparisons, particularly with European countries. What has that taught you?

In all countries, an increase in female participation in the workforce has the immediate impact of lowering the birth rate. But eventually this turns around and translates into higher birth rates once structures have settled and people make a cultural change. You can see this very clearly in the Nordic countries.

So that’s important. Also, immigration is an obvious solution. Between 10% and 20% of the German population has a non-native background. How much immigration can you absorb without destroying your social order? Japan is at the lowest of the low end (about 2%).

Will Japan follow either of those routes?

The Japanese government really has no policy. Bureaucracies are responsible for tiny little segments: the budget for 1,000 childcare facilities in one specific region, say. That’s a drop in the bucket. Nobody has the big policy stick, and nobody cares about family policy. The elderly go to the polls three times more often than the young, and there are more of them! Japan could reduce pensions and take away money from the elderly to give more to young families, or it could take money from United States bases. But that’s not going to work.

The conservative Minister of Justice is strongly opposed to immigration, whereas the Ministry of Foreign Affairs is more liberal and permissive. They’ve had their [immigration] loopholes for many years, which everyone knows, and which everybody knows is an abuse of the law, but nobody does anything about it.

These don’t commit the government to an immigration policy, which they need. I asked Koichiro Gemba [DPJ policy chief]: “Are you going to do anything on immigration”, and he said a flat “No. We have too many problems and we don’t need another.” [Yet,] he is an extremely open-minded, liberal and bright guy.

Doesn’t Japan also study European policy to find a way forward?

Yes, Japanese bureaucrats say: “We have studied German policy.

You have shelled out money for new kindergartens, tax incentives, everything, but Germany’s birth rate is still as low as Japan’s. Why not save your money?” What we say is, “you don’t know how low Germany’s birth rate would be without those policies” (laughs).

Thirty percent of women of marriageable age say they never intend to marry

What’s your view?

The Japanese rely less on the state than the Germans – and the birth rate is about the same. I’m at a loss to say which is the better model. It’s very difficult to compare social policies because they’re all embedded in social systems.

On paper, maternity provisions, parental leave, financial provisions and so on are not that different here. But the reality is different. Just 2% of Japanese fathers take parental leave. If you work in a company and take leave, your colleagues will suggest you’re a sissy.

And corporate leave in Japan is for the upper-income range.

I shy away from advocating policies, but I think the country must change its work culture and encourage a more family friendly environment. We’re living in a society where typical potential fathers, aged 30 to 50, are working 60 hours a week. It’s very hard to combine that with a congenial family life.

And it seems that women are really fed up; 30% of women of marriageable age say they never intend to marry. That’s amazing.

Will that happen? What we can say is that the Japanese are waking up to the fact that increases in material wealth do not increase their happiness, and this is a grave threat to capitalist societies.

May 2011

17

Moshi moshi Japan bosses on communicating with HQ

Text Gavin Blair

W

inston Churchill once described Russia as “a riddle wrapped in a mystery inside an enigma”. This could be used to sum up the feelings of many in Europe towards Japan, even some companies that have chosen to set up offices and do business here. And the task of translating and communicating this mystery falls on Japan heads.

Time is always an issue in business, and making headquarters understand the lengthy periods that it can take to reach decisions and get things done in Japan remains a challenge.

“For my company, at the top management level, they’re prepared to go through the pain and the long process it takes to get the result,” says John MacGoey, managing director of automotive lighting and electronics component specialist Hella Japan. “[But] down at the working level [at HQ] there are some people who just think it’s too much trouble, too much time, too many questions, and they can lose focus.”

“You need time, time and more time,” concurs Jon Band, general manager at Heineken Kirin KK. “Anything you want to do, add six months – time for the relationship, time for understanding each other’s position, time for consensus.”

Yet while the decision-making process may be slow, “Japanese expect immediate action on any request,” says Didier Leblanc, general manager of chemicals producer Arkema Japan. “They expect regular updates. We Europeans

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May 2011

FOCUS

having someone [in hq] who will fight Japan’s corner for you

are not very strict on such points.”

According to Heineken Kirin’s Band, many of the difficulties faced by local bosses relate to the fact that knowledge of Japan and doing business in Japan at HQ is likely to be low.

“Many specifics crop up which only apply in Japan,” he says.

“Often this won’t fit with the HQ drive to streamline processes and keep down costs. It is unrealistic to expect that all at head office will understand the complexities and rules of doing business in Japan.”

Arkema’s Leblanc points out that HQ “knows the Japanese are different, but [they] don’t know how and what to do about it. It is our role to translate and be the interface.”

Lost in translation Translation of a more literal kind can also be an issue.

MacGoey, a Japanese-speaking Irishman working for a German company, has encountered language problems in a variety of forms.

“At the management level [in Germany] the English is generally excellent, but if you go down a level, then it can drop off quite a lot,” says MacGoey, who has just begun German classes himself.

Nevertheless, MacGoey says that senior German staff are “a little surprised” at the low level of English spoken by their Japanese counterparts when they visit.

Olaf Kliesow, representative director of Allianz Life Insurance Japan, points out that this looks unlikely to improve in the near future. “The number of students who want to study and work abroad is decreasing year by year in Japan, while the number is dramatically increasing in China and South Korea,” he notes. “That concerns me a lot.”

Japan’s reputation as a difficult and demanding market is now compounded by a feeling that its glory days are past.

“Of course China is booming so experienced people are being sent there,” says the Japan head of a European firm,

who asked not to be identified. “It is getting the focus and resources that Japan used to get 20 or 30 years ago.”

The key to a successful relationship with HQ is having someone there who will fight in Japan’s corner for you, he says. “If you don’t have that, you’re lost. And that person needs to come to Japan, talk to the customers, to see and experience certain aspects of the market here beyond the figures, to understand it.”

Loyalty and fairness But while customers in Japan are famously difficult to please in terms of quality and specifications, there is also a loyalty and fairness in Japanese business rarely encountered elsewhere.

“A few years back, we experienced a situation in which one of our customers had pushed the price down too low and realised we and other vendors wouldn’t be able to make a sufficient margin,” recalls Fredrik Alatalo, head of Nippon Ericsson’s operations.

“This customer then increased the price. Obviously this was happy news for HQ. It shows the strong tie in Japan between customer and vendor, and that there is an interest in a longterm business relationship.”

Contrary to what many believe, Japan remains a lucrative market with strong margins in many sectors. The head of one European company’s Japan branch told EURObiZ that, despite the challenges of this market, his operation had the highest profits of any foreign branch in his company – and that wasn’t just due to the current exchange rates.

Despite the differences, MacGoey says he never uses the “because it’s Japan” line as an excuse, nor does he accept it from his local staff.

“OK, it’s a unique market and has different requirements, but ‘that’s the way we do things’ just can’t be used as an excuse. HQ doesn’t accept that.”

May 2011

19

ADVERTORIAL

reaches

out to

Japan Service Programs at ASIJ

Now more than ever The American School in Japan is striving to live up to its mission of “developing compassionate, inquisitive learners prepared for global responsibility.” The ASIJ community around the world has truly come together to do what it can to help those affected by the earthquake and tsunami. At ASIJ, we are highly dedicated to service yearround, but the devastation in the north of Japan has called on us to go above and beyond to dedicate ourselves to helping the country we are so fortunate to live in.

Our alumni quickly spearheaded fundraising efforts around the world and have already given over $2 million to the relief efforts through various initiatives.

Alumnus Andrew Ogawa and his family challenged the community to donate to the Red Cross and matched all gifts given up to $500,000. ASIJ also launched a Japan Relief Fund that will support our own direct relief efforts.

The ASIJ community and our friends, including international schools and organizations from all over the world, have already contributed over $75,000 directly into the ASIJ Japan Relief Fund.

With the money raised already ASIJ purchased 400 desks and school supplies for schools in Ishinomaki City that lost everything in the earthquake and tsunami.

Long term, we hope to identify schools in the Fukushima and/or Miyagi areas that ASIJ can assist in their rebuilding efforts.

Members of the ASIJ community have not only donated supplies and funds, but are also volunteering their time to coordinate relief projects and work in the affected areas.

We have had three faculty and staff relief trips to Tagajo and Kesennuma to take up specific supplies and cook dinner for over 1,100 people. For many evacuees, it was their first hot meal in a couple of weeks. Another group will travel to Tagajo to volunteer to clean up homes so residents can move back to their neighborhoods. We have shipped van and truck loads of vegetables as far north as Yamada City, and provided generators to relief organizations that are providing power cleaning equipment to speed up those efforts.

As time goes on, more groups of faculty, students and parents will participate in the rebuilding as the school refocuses its normal service activities such as Habitat for Humanity, the Student Councils, Global Initiatives Network and other student groups on grass-roots projects in the area.

It is clearer than ever that the ASIJ community is caring, connected and compassionate.

Service plays an important role in life at The American School in Japan throughout the year and at all grade levels. ASIJ believes that the emphasis we place on service helps students form connections between school activities and the outside world, whether it is helping make rice balls for the homeless or participating in a Global Initiatives Network conference.

The school’s varied service programs help give students the sense that their actions do count in helping create a better community and while much of the service work takes place outside the school, the concept of serving others must begin at home. For example, students are expected to help keep the school building and grounds, as well as the surrounding neighborhood, clean and neat. Service in a family or community setting is another way to meet ASIJ’s service commitment.

Pre-K through grade 12. Accredited by WASC. For complete admissions information please visit: <http://community.asij.ac.jp> or call 0422-34-5300 ext. 720

EXE C UTI V E N OTE S

Go West Why we should thank the flyjin One of the unacknowledged positive aspects of the flyjin phenomenon is their pioneering role in diversifying business away from Tokyo.

I’m not being facetious. A big problem for the Japanese economy is its highly centralised nature. This is common to other economies, especially that of France and the UK. But it’s probably no coincidence that the most vibrant economies feature highly decentralised political regimes; for example, Germany, China (its massive provinces have a great deal of authority, contrary to popular perception) and the United States.

Japan’s centralisation comes at a high price. The tsunami dealt a fatal blow to already weak communities; many towns and villages on the east coast of Japan were the equivalent of the famous “zombie companies” – sustained solely by the provision of cheap credit and a slack tax collection regime.

As in rural Ireland and the eastern parts of Germany, the only good thing about these locations – at least from the point of view of the young and ambitious – is the railway line running to the capital. The flight of the young and mobile to the big city leaves behind the sick and the aged. Thus, the success of Tokyo creates an especially acute zero sum game.

The capital’s success comes at the expense of the rest of the country.

Left to itself, the Japanese establishment would maintain its hold over the provinces. Despite the well-known need to give local democracy an active part in reconstructing the north-east, and despite the clear lesson on needing to diversify out of Tokyo, inertia and self-interest would maintain the status quo.

One of the ways the “centre” has been able to maintain its hold over the provinces is the grant system. This allows the central government to raise taxes from the provinces, bring it to Tokyo, and then farm it back out again to the provinces. Rather than allowing the provinces to make their own decisions with their own tax revenue, they have to rely on the central bureaucracy. This is clearly a nice situation for the bureaucrats. And it breeds a lack of initiative, which at least one journalist commented upon while travelling in the north-east.

“It’s as if they couldn’t make any decisions themselves; they wanted Tokyo to tell them what to do,” the journalist noted of local officials in the aftermath of the disaster.

He estimated that most of his business costs were 20% lower than in Tokyo So we should thank the flyjin for delivering what will hopefully be an effective attack on the unsatisfactory relationship between provinces and centre described above. A move by companies to bring some much-needed investment to these regions is much to be welcomed.

The negative effects of centralisation, incidentally, aren’t just limited to the countryside. Osaka, the most powerful industrial city in Japan during the early stages of economic development, has been hit by both the rise of cheap rivals in China, and the concentration of economic activity in Tokyo. A visit to Japan’s second-largest city confirms that the gap between the two is very wide. The number of foreign companies is very low: indeed, the atmosphere is a reminder of what one reads about the 19th century, when the foreign community was so small that people all knew each other.

Foreign companies can benefit by saying goodbye to Tokyo.

As one Economist Corporate Network (ECN) member told me, it was a real revelation how cheap the cost of doing business was in Osaka. He estimated that most of his business costs (rent, salaries) were 20% lower than in Tokyo.

He has already decided to stay in western Japan for three to six months, on an experimental basis, but very much with an eye to a permanent move. Another ECN member mentioned that they had decided to move one of their most important plants down to Fukuoka, an outstanding location for businesses that need to maintain close contact with China and South Korea – which are a short flight away.

Of course, the distance of these locations from Fukushima’s leaking reactors is another plus, even if the radioactivity risk in Tokyo is negligible.

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

May 2011

21

we have a huge opportunity to expand our sales to older children

LEGO lore 3 The LEGO Group produces 1,000 elements a second 3 If all the LEGO bricks in the world were shared out equally, each person would own 70 3 There are 915 million ways to combine six LEGO bricks 3 There are 11 professional LEGO builders officially certified by the LEGO Group 3 4 billion LEGO minifigures have been produced, making them the worldâ&#x20AC;&#x2122;s largest population group 3 The moulds used to produce LEGO bricks are accurate to within 0.01mm 3 All LEGO elements made since 1958 are fully compatible 3 Until 2004, all LEGO minifigures had yellow faces

22

May 2011

I nvesting I n J apan

Bricks economy LEGO Japan Ltd. Text Tony McNicol Photo BENJAMIN PARKS

T

he way Ken Millhouse of LEGO Japan describes it, the toy business is far from child’s play. “We are in a massively competitive market,” he says. “We call it a white knuckle industry.”

How else to describe an industry where product ranges are largely replaced each year, and as much as one third of all sales are concentrated during the short Christmas and New Year period? Add to that a shrinking customer base as birthrates drop across the developed world, and the business hardly sounds like fun.

LEGO, however, is one of the best loved of childhood icons.

When Danish founder Ole Kirk Kristiansen started making wooden toys in 1932 he chose the name LEGO from the first two letters of “leg” and “godt”, which mean “play well” in Danish. The first plastic LEGO brick appeared in 1949, and the first LEGO figure in 1974.

Today, the founder’s grandson Kjeld Kirk Kristiansen and his children run the company, the fourth-largest toy manufacturer in the world by sales, behind Mattel, Bandai-Namco and Hasbro. It has 9,146 employees worldwide, including 50 in Japan. Over two-thirds of global LEGO sales are in the United States and EU, while Japan represents less than 10%.

Although LEGO was first distributed here by (now archrival) Bandai in 1962, Japan has had a wholly-owned subsidiary since 1978.

“We are the only Western toy company that has been represented in Japan so long on a consistent basis,” says representative director and vice president Millhouse, before adding wryly that, “Some might have said that is because we didn’t know how much money we were losing.”

For much of its history LEGO Japan struggled to match profits from other operations around the world, but the last few years have seen a remarkable turn-around. Millhouse arrived in Japan in 2005, after heading LEGO in South Africa.

“We weren’t making huge amounts of money,” says Millhouse. “Japan was in deflation, but the rest of the world was not.” Production costs were going up while income stayed the same or dropped.

“We had lost our relationship with our customers. We had gone away from our core business in Japan and focused on areas which were not really suited to the market.” He gives the example of the BIONICLE series of character figures that struggled to compete against similar Japanese toys.

The turnaround was acheived through a restructuring of LEGO’s sales operation, more focussed marketing strategy and by driving down costs. The number of staff has reduced by over 20% through natural attrition.

Today the company is back in the black. “This year’s portfolio is the best we have ever had,” says Millhouse. A top-seller is their range of “Ninjago” ninja LEGO. .

LEGO Japan has had PR success too. The company supports a programme on Tokyo TV called “TV Champion” that features spectacular LEGO building projects. They supply bricks but have no direct control over the programme’s contents.

An ongoing challenge, but also opportunity, for LEGO Japan is that the “exit age” (when children grow out of the toy) is just five or six in Japan, compared to 12 or older in Europe or the United States.

“We are seen as a preschool toy here,” says Millhouse, “so we have a huge opportunity to expand our sales to older children.”

Another challenge is to find more female fans. “We would really like to be more successful with girls, but we are still predominately a boy’s toy,” he says. But interestingly, and for reasons that are not completely clear, the number of girls playing with LEGO is higher in Japan than in other countries.

A major change during Millhouse’s 17 years with LEGO was a 1998 decision to license characters. “When I joined the company in 1995, I remember being told in no uncertain terms that LEGO would ‘never’ do a licensing agreement,” he says.

But it did, in 1998, with a set of Star Wars LEGO. The range is still one of the company’s best-sellers, and has been followed by tie-ups with Thomas the Tank Engine, Toy Story, Harry Potter and others.

LEGO does, however, have strict rules on what can and cannot be licensed – “nothing dark or evil”, as Millhouse puts it. “We have done pirates, but we have never done a military set.”

The company recently added an office in China to operations in Hong Kong and South Korea. “We definitely see Asia as a growth opportunity,” says Millhouse.

Meanwhile, the LEGO brand is stretching well beyond just bricks. “We are constantly pushing the boundaries of what we do,” says Millhouse. As well as LEGO board games, in 2010 the LEGO Group launched an MMOG (massively multiplayer online game) called LEGO Universe.

Adult fans of LEGO (known as AFOLs) are growing in number. A unique feature of the Japanese market is a range of LEGO apparel that is hugely popular with young women.

In fact, the brand is so strong that it can almost be a disadvantage, jokes Millhouse.

“It’s difficult to talk to anyone about LEGO, because everyone is an expert,” he says. “Everyone played with it when they were a child.”

May 2011

23

Materials// Reducing tariffs on EU materials would benefit Japanese industry Text Geoff Botting

F

or Japanese industry, a stable supply of industrial materials is a matter of life or death.

A serious disruption of rare earths, for instance, could well shut down production of some of the country’s most successful and strategic exports, such as hybrid vehicles and semiconductors.

Yet despite that, Japan slaps tariffs on a number of imported materials that are key to keeping Japanese industry competitive.

Nickel, for instance, used in producing stainless steel, is subject to duties ranging from 3% to 3.3%. It’s a similar story with fused aluminium oxide, silicon carbide and manganous-manganic oxide.

The tariffs translate into higher procurement costs for Japanese companies, and higher costs are the last thing manufacturers and tech companies here need right now as they struggle with the strong yen and the ongoing loss of global market share to South Korean and Chinese companies in electronics, autos and many other important industries.

“You don’t have raw materials in Japan: very few at best. So they need to 24

May 2011

Materials committee key advocacy issues k Tariff removal – The scrapping of all of Japan’s import tariffs on raw materials, including nickel and fused aluminium oxide. The duty on nickel, which is used to make stainless steel, ranges from 3.0% to 3.3%, while fused aluminium oxide is hit with a 3.3% tariff. k Tariff reform — The end of arbitrary tariff classifications and revisions, as customs offices throughout Japan are at times inconsistent in this regard. Further, there is no appeal process. The committee wants Japan to rationalise its classification regime and bolster its dispute mechanism. import, and it seems very, very illogical to keep the tariffs,” says Carl-Gustav Eklund, a member of the EBC Materials Committee.

No surprise, then, that in the EBC 2010 White Paper, the committee’s key recommendations overwhelmingly are for tariff reduction. “Tariffs damage competitiveness and threaten the future of Japan’s domestic industry,” the committee states in no uncertain terms.

“One simple message that we try to

convey is that tariff reduction is good for Japanese industry,” committee chairman Ulf Melin says. “We’ve said in our meetings that this request to remove the tariffs is not specifically benefiting European companies; it’s for Japanese industries [too].”

So why do the duties continue to exist?

One answer is that a small number of domestic material makers benefit from the tariffs and are keen to see them remain. In addition, some duties are a legacy of the post-war period when the government wanted Japanese mining protected from imports.

Another reason concerns the Doha Round under the World Trade Organization. The round was launched in 2001 but quickly got bogged down over disagreements, and now its future hangs in the balance.

Japan had wanted agreements from the round that would involve tariff reduction. With that hope dashed, Japan has lately been working on bilateral agreements such as free trade agreements and regional agreements, namely the Trans-Pacific Partnership.

The committee’s concern, however, is that Japan seems to be overly

I n C ommittee

focused on the Asia-Pacific region and the United States. Nor is the committee optimistic about having its issues resolved through Japan-EU negotiations.

“It’s so clear that [lifting tariffs on materials] would benefit Japan directly, and there would be very little Japan could gain from negotiations with Europe,” says Eklund, president of Höganäs Japan, which supplies iron and metal powders to Japan’s auto industry.

That leaves unilateral action. On that front, progress was seen in 2008 with the abolishment of a tariff on high carbon ferro-chromium, another ingredient for stainless steel.

But according to Eklund, the move came only after Japan’s own production stopped entirely, although he adds: “It is a sign that things can move pretty fast.

It shows that Japan can act, and that they have acted in the past when they realised they really needed to.”

Reading the Material Committee’s list of key recommendations in the White Paper, a person could well assume that tariff issues totally dominate its activities. Not so. Representatives of the halfa-dozen members spend much their time together covering topics such as

best practices, information exchange on how to do business in Japan, environmental issues, and so on.

However, a frustration for Melin, Eklund and other committee members has been a failure recently to speak directly with senior officials at the Ministry of Economy Trade and Industry (METI), despite strenuous efforts by the EBC office to arrange meetings.

“We can’t get through to the proper people,” admits Melin, chief representative for Northeast Asia at Eramet International, a French mining and metallurgical group of companies.

The last meeting was in November, attended by non-senior-ranking METI officials who appeared highly distracted. At the time, China had imposed a temporary ban on its exports of rare earths to Japan, which many observers said stemmed from a territorial dispute between the two countries concerning the Senkaku islands.

“They immediately started talking about rare earths,” the committee boss recalls. “My interpretation was that they were saying, ‘We hear you, but this is not one of our top priorities.’

“One thing we’ve discussed in the committee is to try to

Tariffs damage competitiveness and threaten the future of Japan’s domestic industry EBC 2010 White Paper

publicise ourselves more and to do more lobbying.”

Still, committee members are hopeful that once the distraction over China subsides and the global trade issues start to move forward, Japan’s tariffs on materials will start to come down.

“I think Japan will be more open, they will listen better. Because they understand more and more that it is beneficial for the whole of Japanese industry,” Eklund says.

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

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

May 2011

25

EVENT REPORT

Rebuilding Japan

An Economist Corporate Network and KIBOW event 14 April 2011, ANA InterContinental Tokyo Text and photos Tony McNicol

Judging by the Economist Corporate Network’s 14 April event, the initial gung-ho confidence in Japan’s ability to rebuild is being replaced by a more tempered realism. Kenneth Cukier, Tokyo correspondent for The Economist, set the tone with his assessment. “I believe that Japan will change, but only a little,” he said.

Proceeds from the half-day event were donated to KIBOW, a new charity supported by Japanese firms such as Globis, Rakuten, Mixi and Marui.

Discussion touched on some of the big questions thrown up by the crisis.

Could the disaster bring political and economic change? What effect will the disaster have on economic growth?

Will Japan’s energy policy change?

What business continuity planning

lessons have been learnt? How should Japan rebuild Tohoku?

In the first discussion, on “Vision for a new Japan”, Daisuke Iwase of the Lifenet Insurance Company predicted that the disaster will make muchneeded change more difficult in the short term. But he also expected business opportunities.

The DPJ’s Keiro Kitagami agreed that it was too early for any paradigm shift that may or may not come; politicians are still too busy dealing with the immediate crisis. He also had a recommendation, perhaps slightly tongue-in-check, to make Fukushima the administrative and legislative capital of Japan. It would be a symbol of confidence in the stricken area, he said.

the light at the end of the tunnel [in Japan] is a new dimension of energyefficiency Tatsuo Masuda, Nagoya University of Commerce and Business

Naresh Sethi, president of British American Tobacco Japan, noted that Japan has a reputation for responding well to crises. It has already survived the end of the bubble, lost decades and the global financial crisis although, May 2011

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Osaka International School

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Informed, caring, creative individuals, contributing to a global community

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www.senri.ed.jp 4-4-16 Onohara-nishi, Minoh-shi, Osaka 562-0032 tel: 072-727-5050

EVENT REPORT

he added, “The record [of recovery] recently has not been so good.

On a more positive note, Yoshito Hori, chairman and CEO of the GLOBIS Group, pointed out that Kobe-born Hiroshi Mikitani started Rakuten just two years after the Great Hanshin earthquake. The crisis could be a spur to innovation.

In the discussion on “The politics and business of energy”, Martin Schulz, a senior economist at the Fujitsu Research Institute, echoed Kan’s comment.

“What the hell is going on?” he said of the government’s response to the energy crisis so far. “We were expecting to see something better.” He did make a positive observation, however. Change – perhaps in the form of new energy or a smart grid – will have to come, he argued, or Tokyo simply won’t be able to function.

Tatsuo Masuda, a professor at Nagoya University of Commerce and Business, described the Fukushima

crisis as “a huge game changer worldwide”, much more so than the BP oil spill last year. He expects the energy mix to be reviewed all over the world with a return to fossil fuels. And, he added, “the light at the end of the tunnel [in Japan] is a new dimension of energy-efficiency.”

The crisis put even the best-laid business continuity plans to the test – the topic of the next discussion. Moira Lynam, head of human resources at CITIBANK Japan, issued a challenge to the audience. “This [crisis] requires true leadership from each of you in this room,” she said.

In her job less than a year at the time of the earthquake, she noted that in the immediate aftermath, accurate information was paramount. She quipped that she “became a nuclear expert very quickly”.

“Risk tolerance is a personal thing,” she said. “But if you provide people with information, at least they can make a decision.”

She stressed that employees continued coming to work at CITIBANK during the crisis because the company had become “a place of information”.

Stephan Lippert, a professor at Temple University, called the disaster a “black swan” event. Companies need to “invest in preparedness, not prediction”, he stressed. He called for an “opensource” model for crisis response: adaptability and a globally dispersed group to model crises and response.

Manuel Ploch, principal and founder of NAE Partners, an independent consultancy, made a worrying observation.

If an earthquake struck Tokyo, he said, supply chain problems would be 10 to 30 times worse than after the Tohoku disaster – resulting in total business paralysis.

The remedy is to decentralise supply

Try to move as many corporate functions as you can away from Tokyo Manuel Ploch, NAE Partners

chains and use technology such as cloud computing.

“Try to move as many corporate functions as you can away from Tokyo,” he said. “None of them will be completely safe from earthquakes, but you have to do something.”

The final, forward-looking, discussion was on reconstruction. Yoshihisa Godo, a professor at Meiji Gakuen University, argued a parallel between overconfidence in the strength of Japan’s nuclear technology, and overconfidence in the resilience of its food production and supply. He calls for the relocation of farmers from the afflicted areas to some of Japan’s plentiful underused farmland.

Hari Srinivas, professor at Kwansei Gakuin University, noted that many of the communities would have to be built from “absolute zero”. But he sensed a strong message that Japan plans to not just build back, but build back better.

Steve Yamaguchi, director of the Japan Soft Power Research Institute and a Tohoku construction industry insider, had a more hard-headed take.

He warned of a secondary “policy disaster” and rampant wastage and corruption in the rebuilding process.

There is an urgent need to “help Tohoku people assert themselves and use this reconstruction project to become empowered,” he said.

May 2011

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Raw talent Text and photo Tony McNicol

30

May 2011

C ulture S hock

I

t is a long way from a “super-yacht” in the Mediterranean to a sushi school in Nishi-Shinjuku, but Karl Mallia looks perfectly at home deftly slicing a kappamaki cucumber roll and arranging it neatly on a small wooden board.

The Malta national is spending half of his two-month trip to Japan at the Tokyo Sushi Academy, which offers classes for tourists, cooks and aspiring sushi chefs.

Mallia has worked as a chef for 18 years, for the last 20 months on a 36-metre Turkish gulet (a two-masted sailboat).

“The advantage of working on superyachts is that your budget is quite high,” says Mallia. The boat, one of four belonging to his boss, has room for 12 guests and six staff. Sometimes fish is flown in from London; at other times, it is sourced from closer to home.

“I once caught a 27-kilo tuna off the boat,” he remembers. “I cooked it over the next three weeks.”

Since freshness and speed are essential to sushi, the practice exercises are done to a time limit. Mallia is noticeably handier than most with the knife, rice and fish. He even had time to help an elderly Japanese man opposite him finish his dragon roll.

“Even two months of this would only give you a hint,” says Mallia modestly.

Born in Australia to Maltese parents, Mallia has travelled and worked all over the world. “This is the forty-second country I have visited,” he notes, before adding rather ruefully that “that’s still only 19% of the world”.

After Japan he will enrol on a cooking course in India. “I am trained in a couple of other cuisines. One day, I want to open a restaurant and amalgamate all these cuisines.”

He has made sushi before, but only self-taught from the internet and magazines. “What I was seeing wasn’t really sushi,” says Mallia. He first made sushi using risotto rice – with less than ideal results. “The rice here is perfect of course.”

One of the most important lessons he has learnt at the school is that, “in sushi, everything is part of the equation,” he says. “If you start wrong, the end result will be wrong. Every part of the process has to be perfect.

“The amount of rice must be perfect.

The pressure when you press it in your hands must be perfect. They say that if the rice is good all the grains will face in the same direction.”

They say that if the rice is good all the grains will face in the same direction The course has cost him close to €7,000 for four weeks, including food and uniform. Classes get through a considerable amount of expensive fresh fish – although Mallia says that they try to eat as much of it as possible.

Mallia shows me the set of knives he bought for ¥70,000 in Kappabashi (a part of Tokyo famous for its kitchen supply shops).

“Now I know what a sharp knife is,” he says, admiring the blade.

After today’s lesson Mallia plans to return to Kappabashi to buy more equipment and ship it home.

He’s also been enthusiastically sampling other cuisine. “I’ve tried almost every kind of Japanese food this month. There are no bad restaurants here. Japanese people know what good food is.”

He has sampled some Japanese hospitality too. When one of the other students learnt that Mallia was staying at a hotel, he invited him to stay at his apartment. “I’ve been cooking for them to try and repay their kindness,” he says.

Back home he plans to include some new sushi techniques in his galley repertoire. “The challenge will be to use the foreign ingredients to make good sushi.”

He’s keen to learn as much about sushi as possible during his limited time at the school. “I ask a lot of questions,” says Mallia.

There are, however, still some things that remain a puzzle. For instance, why does the fish always have to be filleted with the head facing left? “There is a reason for everything in Japan,” he says.

“I have cooked for 18 years, and I still don’t know anything really. The learning will never stop.”

May 2011

31

EU and Japan working together This month marks the 61st anniversary of the Schumann Declaration, viewed as the first official step in the foundation of the present EU. On 9 May 1950, coal and steel resources were pooled in a common European organisation.

The European Business Council (EBC) is the European (EU) Chamber of Commerce in Japan, whose 2,500 member companies operate

in 30 industries in this country. The 18 European chambers of commerce and business affiliations that comprise the EBC stakeholders include firms that are the leaders in certain key market sectors.

We pay tribute to an EU-Japan partnership that remains both unwavering and reciprocal, generating 40% of the worldâ&#x20AC;&#x2122;s GDP.

committee schedule

â&#x20AC;&#x17E;

Upcoming meetings R Animal Health

25 Aug, Thu, 08:30-, EBC

R Medical Equipment

27 May, Fri, 14:00-, off-site 23 Sep, Fri, 14:00-, off-site

R Food

26 May, Thu, 14:00-, off-site 23 June, Thu, 14:00-, off-site

R Asset Management 27 May, Fri, 12:00-, EBC 22 July, Fri, 12:00-, EBC

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

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

R Environmental Technology

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

R Human Resources 24 May, Tue, 19:00-, EBC 28 June, Tue, 19:00-, EBC

R Legal Services 19 May, Thu, 18:30-, off-site 8 Sep, Thu, 18:30-, off-site

R Materials 10 May, Tue, 17:30-, EBC 29 Aug, Mon, 17:30-, EBC

R Railways 7 June, Tue, 08:30-, EBC 23 Aug, Tue, 08:30-, EBC

R Sustainable Development 13 May, Fri, 09:00-, EBC 2 Sep, Fri, 09:00-, EBC

R Telecommunications Carriers R Telecommunications Equipment 16 June, Thu, 10:00-, EBC 15 Sep, Thu, 10:00-, EBC

23 June, Thu, 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

32

May 2011

BAE Systems Website: www.baesystems.com

BNP Paribas Website: bnpparibas.jp

Arianespace created commercial satellite launch services and is the world’s top player. Satellites of any type, mass and size can be launched to any orbit by one of our three launchers: Ariane 5, Soyuz and Vega, launched from the north-eastern coast of South America.

Japanese companies such as SKY Perfect JSAT and B-SAT are steady users of our launch services. A cooperation with Japan’s launcher H-IIA was established.

BAE Systems is a global defence and security company with approximately 100,000 employees worldwide. The company delivers a full range of products and services for air, land and naval forces, and advanced electronics, security, information technology solutions and support services. In 2010 BAE Systems reported sales of £22.4 billion ($34.6 billion). BAE Systems has been supporting Japan’s Self-Defense Forces for over 40 years and looks forward to continuing this important relationship.

BNP Paribas is a European leader in global banking and financial services, and is one of the strongest banks in the world according to Standard & Poor’s. The Group is present in over 80 countries, with more than 200,000 employees, and holds key positions in three major segments: Corporate & Investment Banking, Investment Solutions, and Retail Banking.

The history of BNP Paribas in Japan dates back to 1867, with over 800 specialists now offering financial services.

Euler Hermes Kreditversicherungs-AG Email: info.jp@eulerhermes.com Website: www.eulerhermes.co.jp

LEGO Japan Website: www.lego.com

Euler Hermes Kreditversicherungs-AG, Japan Branch, is the world’s leading credit insurer with 34% market share. Our primary product credit insurance protects companies against losses arising from buyers’ insolvencies in their domestic or export markets, or from political risks.

Our group headquarters is located in Paris, France, and our 6,000-plus employees in more than 50 countries assist companies of all sizes to grow their business securely. Our Japan Branch opened in April 2002.

Our deepest sympathies go out to all those affected by the recent tragic events in Japan. We wish them the utmost strength for the future and hope the situation will improve quickly. LEGO Japan, established in 1978, has been a market leader in the brick toy category here, with headquarters in Billund, Denmark. We are a one-brand company of 9,767 employees worldwide. Children are our role models and our vital concern.

Toys“R”Us Website: www.Toysrus.co.jp

Umicore Email: ujpinfo@ap.umicore.com Website: www.umicore.jp

Our hearts and hopes are with Japan, as Toys“R”Us helps families recover from the devastation through Save the Children Japan. For over 20 years, Toys“R”Us has been a proud member of the business community in Japan. With 167 stores across the country, we continually strive to provide an exceptional experience for families. We remain committed to growing and investing in our business, and to being a good corporate citizen.

Umicore is a global materials technology group whose expertise in materials science, chemistry and metallurgy makes a real difference in Catalysis, Energy Materials, Performance Materials, and Recycling.

Umicore generates the majority of revenue from clean technologies to fulfill our mission: materials for a better life.

The Group has industrial operations on all continents and serves a global customer base generating a turnover of €9.7 billion in 2010 and employing 14,400 people.

Arianespace Website: www.arianespace.com

Philips Electronics Japan Website: www.philips.co.jp

In 1953, Royal Philips Electronics started to export its products to Japan.

In 2008, Philips acquired Fuji Respironics that deals with products for respiratory diseases and sleeping disorders. In 2010, the latter changed its organisation and company name to Philips Respironics GK. Currently, Philips Electronics Japan consists of Healthcare, Lighting and Consumer Lifestyle divisions. We employ approximately 1,700 staff and deploy about 75 offices.

Würth Japan Co., Ltd. Website: www.wuerth.co.jp

We wish to extend our heartfelt condolences to those affected by the Great East Japan Earthquake. Established in 1987, Würth Japan Co., Ltd. provides a wide range of high-quality products for the Japanese automotive and construction industry.

The Group’s core business is in fixing and assembly materials – screws, dowels, chemical products, furniture and construction fittings, tools, installation material, automotive hardware, storage and retrieval systems. Würth stands firm with our customers to support Japan’s recovery.

May 2011

33

G reen B i z

Fancy pants

You can have any colour as long as it is green Text Alena Eckelmann

photos: Gunze

E

co-friendly production has reached the most intimate of regions with BODY WILD fit, a line of “eco-pants” from Gunze, Japan’s oldest manufacturer of underwear. Last spring, the Kyoto-based company set up a new production line for technicoloured, body-hugging, eye-catching underwear for men and women. Gunze also boasts “pants boutiques” in Tokyo’s Harajuku and Odaiba.

In conventional underwear production, several hundred units of cloth are dyed together. To ensure the dye dissolves properly in the water, and to keep the colouring even, the temperature of the water is gradually raised. The process uses large amounts of water, dye and energy. The cloth is then cut by machine, with considerable wastage.

But using Gunze’s new production method, pants are sewn individually to meet customers’ requests for style, colour and pockets. This considerably reduces cloth

wastage. The pants are then dyed in small numbers, even just one if necessary, in small containers. Far less water and dye are used, the heating time

explains Kenzo Ishikawa, general manager in production administration at Gunze. “The amount of water is reduced by 58% and dye by 19%. This

The amount of water is reduced by 58% and dye by 19% of the water is reduced, an even colouring achieved, and the company can offer no less than 100 colours.

“Compared to the traditional way of manufacturing underwear, the production of BODY WILD fit reduces the amount of waste cloth to only 5%, as compared to 22% before,”

leads to a CO2 emission reduction of 41%.”

Predictably, pink tints are popular with women and conservative black, grey and blue hues with men. “I choose the colour of my pants depending on how I’m feeling that particular day,” says Ishikawa.

Pants with quirky patterns

created for Gunze by young artists have proved extremely popular among young Japanese. These “Collabo Pants” designs come with lively names, such as DEVILROBOTS, Gen and Mushroom Café. Gunze’s website guides creative-minded customers step-by-step through the process of designing their own pants. There are even “pair pants” that allow you to colour-coordinate your underwear with your partner’s.

Teaching customers about the “green” aspect of the pants is central to Gunze’s marketing strategy.

“First and foremost, our customers enjoy the high-quality design and the fun colours,” says Ishikawa. “The fact that the pants were produced in an environmentally friendly way is a bonus. Hopefully that sways their purchasing decision when faced with products of a similar quality and price.”

After all, how many products can boast of being shown at both Japan’s fashion shows and eco-products fairs?

May 2011

35

EVENT REPORT

World music Italian Notes for Tohoku 12 April 2011, Zojoji Temple Text and photo Tony McNicol

“It wasn’t even a week ago when we started organising this. We just thought, ‘what can we do?’” said Davide Fantoni, secretary general of the Italian Chamber of Commerce in Japan, as the audience took their seats.

Money raised at the impromptu concert was donated to the charity project “Italians of Japan for the re-birth of Tohoku”. The venue was one of Tokyo’s best-known temples, Zojoji, founded in 1393 and located close to Tokyo Tower.

Italian singer-songwriter and guitarist Luca Saccogna opened the concert with two of his own Japanese songs. They were “made up from all the thoughts and feelings from my years in Japan”, he told the audience. Next on stage were saxophonist Marcus Pittman and percussionist Alessio D’Alessandro.

“What can we do? We can play music,” said Pittman before the concert. “Any musician can get involved in something.

“Generally for music you get positivity and you get community. The way they will get through this in northern Japan is by coming together.

“If anyone can play music up there, they will be playing now.”

But the star of the evening was worldrenowned accordionist Coba. During his bombastic one-hour set, backed by acoustic guitar, electric bass and drums, he handled his instrument not unlike Jimmy Page handles a guitar.

The Japanese-born musician studied accordion in Italy from the age of 18 and is friends with Francesco Formiconi, the president of the Italian Chamber.

Coba showed a text message he received from Formiconi after the earthquake, saying that all Italians in Japan are “Tohokujin” (Tohoku residents) now.

Coba was in Italy at the time of the 1980 Irpinia earthquake, when almost 3,000 people died. He remembers how Japan provided aid then.

“We are all people, so it’s important to help each other at a time like this.”

Formiconi himself gave a short speech as part of the concert. “Japan is our home. If we don’t do something now, then that fact has no meaning,” he said. “As Italians, we will do our best.”

May 2011

37

Whoâ&#x20AC;&#x2122;s Who

Management Consulting in Japan

38

May 2011

I

n 2008 Robert J. Thomas wrote a book called Crucibles of Leadership.

His central thesis was that it is events and experience that form leaders and leadership behaviour.

Leaders are shaped through crucible moments. Since the triple disasters of March 11, the Japanese have taught us all a lot about leadership.

The general mood is that those who should have been leaders, such as at TEPCO and in the government, have hardly covered themselves in glory.

The decision to leave the country by many Western business leaders – albeit often forced by pressure from HQ, their governments, or for family reasons – was looked on by others as deserting the bridge, often leaving local Japanese staff to their own devices.

Contrast all of that with the courage, authenticity and sheer stoicism of the many Japanese who have stepped up to the plate when the moment came.

A senior executive of a global pharmaceutical company immediately commandeered a bus to take supplies to the needy in the worst hit areas and bring the company’s employees based in the region to safe housing. There were leaders who could only patiently wait to get confirmation that all their employees in the affected region were safe, and remained calm all the while communicating a clear message to their teams, business partners and clients. A hospital manager in the Fukushima exclusion zone would not desert his post despite obvious personal danger.

These are local heroes who have shown genuine leadership.

Leadership is about being and doing.

The qualities and attitudes that have been on display over the last weeks – accountability, responsibility, authenticity, courage and vision – have been humbling, gratifying and moving to witness.

Who’s Who // Management Consulting

Real gems

Anne Konishi President Canning Professional K.K.

By having a clear talent management program in place, companies do not have to wait for external events to reveal the real gems in their organisations.

Toward leaner project management

M

anagers will have had experience from time to time as stakeholders in large projects such as ERP or CRM rollouts. Our recommendation is to keep your project management as lean and as practical as possible:

• Get a strong project manager, not a

manager using MS Project. You do not need a 5,000-item Gantt chart, because it is impractical to print, and no executive will have the time to pore over it. Keep a Gantt for the high-level activities, and use other types of documents to discuss details.

For stakeholder meetings, insist that handouts or email attachments are kept to a minimum. There is quite an art to summarising complex information in a single A3-size page, but it lets you keep focus where it is important for an executive team – upon areas of weakness that need

•

the support of each leader to rectify.

• If meetings are going too long with-

out purpose, we like to remind members of the cost, to emphasise the importance of getting to the point quickly and in an articulate manner.

“That meeting just cost 500 grande lattes” will get the point across in a humorous but completely true way.

Politics is present in any project and in any organisation, but it should be avoided when possible. Managers should endeavour to let the project management team state status as is, without fear of repercussions just because they set the “Finance Data Cleanup” activity to red.

Make use of a project collaboration system, provided you can get a full dump of the data and files when the project is complete. IT may not be able to implement an internal equivalent in time, so it is worth finding some budget for it.

•

Rick Cogley CEO eSolia Inc.

•

If there is a legal reason to create voluminous documentation, then by all means do so, but do not add unneeded layers of bureaucracy.

May 2011

39

Who’s Who // Management Consulting

Canning Professional K.K. Address

1-7-13, Tsukiji, Chuo-ku, Tokyo 104-0045

Tel

03-3546-7440

Fax

03-3546-7441

E-mail

info@canning.co.jp

Website

www.canning.co.jp

Year established

1986

Staff Size:

16

Contact

Anne Konishi, President

Company Activities / History Canning Professional is a talent development organisation based in Tokyo. As part of the Canning Group set up in the UK in 1965, we have delivered programmes to over 70 different nationalities, in over 70 different countries worldwide.

The increasing globalisation of many industries presents our clients with many different yet specific challenges in terms of developing their talent. For example: • A division finds itself part of a global team as a result of an organisational change, and team members lack the communications skills to have real influence on the global strategy.

• A Japanese manufacturing company is forced to look for growth outside of Japan, and therefore needs to ensure they have a pool of talent ready with the required leadership ability.

• A talented manager is to be promoted, but lacks the English-language skills to really perform in his new role.

• A team is deployed overseas for a project, and is unfamiliar with the local culture and its impact on the business environment.

These are all recent examples of our clients’ needs, and we pride ourselves on our ability to design, develop and deliver highly customised programmes that address these specific needs, and more. We are able to do this by building strong partnerships with our clients, and by drawing on our expertise and experience in four disciplines: Talent Management, Business Communications Skills, English for Business Leaders, and Global Mindset.

CHPM (CH Projects Management, Ltd.) Address

Chiyoda House 301, 2-17-8 Nagatacho, Chiyoda-ku, Tokyo 100-0014

Tel

03-3503-1571

Fax

03-3503-1575

E-mail

info@chpm.co.jp

Website

www.chpm.co.jp

Year established

1988

Staff Size:

15

Company Activities / History CH Projects Management, Ltd. is a consulting company active in Tokyo since 1988. It started its activities supporting Swiss companies and has since extended its clientele mainly to small and medium-size companies from Europe, China, India and the USA in connection with their operations in Japan.

CHPM provides a large range of services including setting up representative offices, branches and subsidiaries in Japan. CHPM handles all non-core activities on an outsourced basis. The services include bookkeeping, accounting, tax matters, employment management, product registration and other operational assistance services.

CHPM aims at developing long-term and close relationships with its clients by offering flexible, tailor-made solutions in English, Japanese, French and German. With a strong Japanese and international staff, CHPM has developed a good knowledge and understanding of Japanese culture and values, which facilitate communication with local business partners.

40

May 2011

Address

Sawa Building 6F, 2-2-2 Nishi-Shinbashi, Minato-ku, Tokyo 105-0003

Tel

03-6273-3501 (Cogley direct) 03-6273-3510 (main)

Fax

03-3593-3511

E-mail

info@esolia.co.jp

Website

www.esolia.com

Year established

1999

Staff Size:

20

Contact

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

Who’s Who // Management Consulting

eSolia Inc.

Company Activities / History eSolia is a globally minded information technology management firm providing superior business-centric consulting, project and outsourcing services to a variety of blue-chip foreign and Japanese organisations in Japan and abroad. Our focus is on multi-cultural, multi-language organisational environments, with a vision to consistently provide our clients with just the right mix of helpful goods and services.

Founders Rick Cogley and Takumi Fukuoka have been delivering services together from Japan for 17 years, with a successful track record in handling complex, high-pressure projects, and providing creative problem-solving for our clients’ challenges. eSolia offers a full range of IT services, from governance and management, to automated system builds, to websites for information or collaboration, to unified communications systems for phone and presence, and day-to-day user support. Our services are always standards-based, unbiased by maker affiliation, built and grown with an awareness of your business and culture, and are delivered by a team of experienced experts who act with the highest standards of ethics, professionalism and integrity. eSolia sows the seeds that help you build a strong foundation for your Japan business success and meet your commitments.

Promar Consulting Address

No. 3 Ishibashi Bldg. 6F, 1-10-12 Shinkawa, Chuo-ku, Tokyo 104-0033

Tel

03-6222-0003

Fax

03-3206-0004

E-mail

jward@promarconsulting.com

Website

www.promarconsulting.com

Year established

2000

Staff Size:

20

Contact

John Ward, President

Company Activities / History Promar Consulting (formerly Promar Japan) is Asia’s pre-eminent consulting firm specialising in food and agribusiness with emphasis on new business development. Promar also has its own office in Beijing – which is growing rapidly – and affiliates in Bangkok; Washington, D.C.; London; Sofia; and São Paulo. We work primarily for large companies, industry associations and governments throughout the world – organisations seeking to resolve problems, capitalise on new business opportunities, or obtain regular and reliable information. Our motto is to provide clients with “Actionable Market Intelligence”.

Promar assists clients with issues that span the food chain: • Land and basic investment (Itochu, Asahi Beer) • Agro chemicals (E.I. DuPont, Tokyo) • Commodity crops (American Soybean Association, Tokyo, worldwide) • Seafood (Norwegian Seafood Export Council) • Branded food business expansion (Meiji Seika, Shanghai) • Drinks expansion (Isklar, Japan) We help governments and other organisations with major trade policy problems: • Market access (Government of Thailand) • GMO acceptance (US Department of Agriculture) • Free Trade Agreements (Ministry of Agriculture, Forestry and Fisheries, Japan) We regularly work with clients on specific issues: • Developing a 5-year strategic plan • Evaluating the “fit” of possible acquisition or JV prospects • Finding the best possible importer/distributor in an unfamiliar foreign market Whether your issue is a new marketing opportunity or a pressing distribution problem, or simply regularly obtaining inside market intelligence, Promar Consulting can help – in Japan or China, elsewhere in Asia, or worldwide. Check us out at www.promarconsulting.com/, or send us an email – jward@promarconsulting.com.

May 2011

41

Who’s Who // Management Consulting

Quint Wellington Redwood Japan K.K. Address

Bunsendou Bldg 6F, 1-13-2 Kanda Jinbo-cho, Chiyoda-ku, Tokyo 101-0051

Tel

03-5281-0901

Fax

03-5281-0902

E-mail

info_japan@quintgroup.com

Website

www.quintgroup.jp

Year established

2004

Staff Size:

8

Contact

Jean-Luc Creppy, President & Country Manager - Japan

Company Activities / History Quint is a private company and is fully independent from any IT vendor. We believe our independent status enables us to live the promise of looking after your organisation’s best interests and nothing else.

Providing education and advisory services – as well as continuously creating, collecting and distributing the latest and best solutions in IT management – Quint is truly dedicated to IT management advancement. Providing a complete portfolio of state-of-the-art services in an integrated and coordinated way, we ensure maximising your chances of success.

Quint’s result-based approach is as simple as it is effective.

Together with you, we identify your business ambitions. We then provide you with a customised leverage-based approach that will enable you to achieve your goals. We take the responsibility to work with your organisation and achieve the envisioned results.

With over 18 years of global experience in 49 countries, Quint has the capability to: - Increase efficiency in your projects by cutting costs and delivery time.

- Establish management and control systems, as well as processes, for quality control of both the services you deliver and the services delivered to you, on a daily basis, regarding operations and projects.

- Assess, reshape and enhance your demand/supply management.

- Measure improvements in performance on services provided.

- Train your staff in best practices for IT management.

- Provide risk management for BCP and DR projects.

- Help your resource leverage and apply the best standards to meet your objectives in outsourcing as experts in service management and outsourcing.

We dare to challenge ourselves as well as your organization to devise and realize measurable business returns.

Right Management Japan Address

Chiyoda First Bldg-East, 3-8-1 Nishikanda, Chiyoda-ku, Tokyo 101-0065

Tel

050-3163-5222

Fax

03-5216-8351

E-mail

marketing.jp@right.com

Website

www.right.com/jp

Year established

1994

Staff Size:

200 in Japan

Contact

Harufumi Hasegawa, Marketing

Company Activities / History Right Management is the talent and career management expert within ManpowerGroup, the global leader in employment services.

Right Management helps clients win in the changing world of work by designing and executing innovative and practical workforce solutions that align talent strategy with business strategy. Our expertise spans Talent Assessment, Leader Development, Organizational Effectiveness, Employee Engagement, and Workforce Transition and Outplacement.

Right Management has over 30 years experience in the broadest range of client solutions, large and small. Our firm has earned its reputation as a true pioneer in strategic workforce management for the sustained excellence of our execution, for our responsiveness and for the wisdom of our counsel.

Right Management has grown to more than 300 service locations in our 50 countries worldwide. Today we serve 80% of the Fortune 500 and 50% of the Fortune 1000, as well as over 70% of the Fortune Global 500 companies, by helping them to grow talent, reduce costs, accelerate performance and realize their business goals.

42

May 2011

DEVOTED TO BOTH CLIENTS AND CANDIDATES, WE POWER THE WORLD OF WORK. We are the experts in recruiting qualified, professional and skilled people across a wide range of specialised industries and professions for permanent positions, contract roles and temporary assignments.

At hays, we believe the right job can transform a person’s life and the right person can transform a business. We’re passionate about connecting our candidates with the right job for them.

The breadth and depth of our expertise distinguishes us from our competitors.

We are experts across a wide range of specialised industries and professions, and our actions have a lasting impact on both our candidates and the businesses we work with.

From our osaka office we provide services across the West of Japan. Its location allows us to meet with more candidates to share information about job opportunities and give objective advice on how to achieve career aspirations. our expert consultants are available to manage job searches for

Hays Specialist Recruitment Japan K.K. Osaka office: Azuchi-machi Bldg. 5F, 3-4-10 Azuchi-machi, Chuo-ku, Osaka 541-0052 Tel: 06-4705-5545 | Fax: 06-4705-5546 | Email: Osaka@hays.co.jp Hays Japan this year celebrates its 10th anniversary.

our clients with local support and local candidates. our recruiting experts in osaka are available to you in the following specialisms: accountancy & finance, banking, human resource, information technology, office professionals, pharma, and sales & marketing. hays Japan is also the only foreign recruitment company in Japan to operate three local offices, serving the Kanto region from Akasaka and shinjuku, and the Kansai region from central osaka.

SHOP WINDOW

Home centres are doing well and helping the relief effort in Tohoku Leading home centres: Total and same store sales 2010-2011 5.25 Year on year (all stores) Year on year (same store)

Year on year % change

3.50 1.75 0 -1.75 -3.50 -5.25 -7.00 Jan

Feb

Mar

Apr

May

Jun

3 Home centres are a Japanese version of the Western DIY store. They sell DIY products to consumers, but also to tradesmen, offering add-on services, such as phone pre-order for parts and materials, or branded business items such as business cards 3 During the last decade, home centres became bigger with a larger variety of goods; many now even sell pets. A key change has been the expansion of own-branded ranges.

3 Recent results have been encouraging. From October 2010 through January 2011 sales improved by an average of 2.7% per month for the roughly 4,500 stores in the sector (see graph).

3 The major chains, DCM Holdings, Cainz Home, Kohnan Shoji and Komeri, have all been pushing ahead with store expansion. Komeri for example, the largest chain by store numbers with 1,049 outlets, opened eight new stores in the first 10 weeks of the year.

44

May 2011

Jul

Aug

Sept

Oct

Nov

Dec

Jan

3 All of the major home centre chains have contributed to the relief efforts in Tohoku since they stock many items useful for rescue and repair. Chains such as Cainz Home and Komeri, which have stores in affected areas, have donated large volumes of materials for shelter and recovery out of their existing stocks, and have been among the first retailers to resume operations.

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 > Belgian-Luxembourg Chamber of Commerce in Japan www. blccj.or.jp

Breakfast meeting with H.E. Kris Peeters, minister-president of the Government of Flanders 17 May, Tuesday, 08:00-09:30

Venue: Embassy of Belgium Contact: 03-6457-8662 or info@blccj.or.jp

The DCCJ Social Circle 12 May, Thursday, from 18:30

Venue: Balcony Restaurant and Bar, Roppongi-itchome station Fee: no cover charge Contact: dccjsocial@gmail.com

> Finnish Chamber of Commerce in Japan www.fcc.or.jp

Luxembourg investment seminar: FCCJ Luncheon Meeting 24 May, Tuesday, 12:30-14:30 “Developing business in Europe Speaker: Mika Vehviläinen, president & from Luxembourg” CEO, Finnair 17 May, Tuesday, 15:00-17:00

Speakers: HRH the Crown Prince, H.E. Jeannot Krecké, minister of Economy and Foreign Trade; Takeshi Mori, senior consultant, Nomura Research Institution; Kentaro Hyakuno, managing director, Rakuten Venue: Grand Hyatt Tokyo, 2F, Coriander Room Fee: free of charge Contact: 03-3265-9621

Venue: Hotel Okura, Kensington Terrace Fee: ¥6,000 (members), ¥8,000 (non-members) Contact: fccj@gol.com

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

Liability exposure and > British Chamber of Commerce in Japan protection in Japan – knowing www.bccjapan.com how to deal with statutory and contractual liability in Japan Less than perfect: why Japan has a problem with English, and what government and business can do about it 19 May, Thursday, 12:00-14:00

Speaker: Jason James, director, British Council Venue: ANA InterContinental Tokyo, B1, Aurora Room Fee: ¥5,500 (members), ¥6,500 (non-members) Contact: info@bccjapan.com

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

Charity exhibition & auction: Danish art and design aid for Japan* 5-22 May, Thursday-Sunday

Venue: Hillside Forum Gallery (across the street from the embassy) Contact: www.dccj.org * With support from The Royal Danish Embassy in Tokyo

19 May, Thursday, 18:30-21:00

Speakers: Ulrich Kirchhoff, ARQIS Foreign Law Office; Ryoko Kondo, TMI Associates Venue: GCCIJ conference room Fee: ¥5,250 (members), ¥8,400 (non-members) Contact: events@dihkj.or.jp

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German asparagus dinner 2011 10 June, Friday, 18:00-21:00 (Hilton Nagoya)

Fee: ¥5,250 (members), ¥8,400 (non-members) Contact: events@dihkj.or.jp

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

Social media and crisis management during the Fukushima nuclear crisis 24 May, Tuesday, 12:30-14:00

Speakers: David Wagner, director, communications training group, Edelman Japan; Adrian Roche, deputy director

Venue: Ristorante Il Desiderio, Aoyama Fee: ¥4,500 (members), ¥5,500 (non-members) Contact: iccj@iccj.or.jp

> The Bellwether Series: Japan 2011

The future of finance in Asia-Pacific 27 July, Wednesday: all day

Venue: to be confirmed Fee and contact: www.economistconferences. asia/event/bellwether-series-japan-2011

Compiled by David Umeda May 2011

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Summer Education Programmes The American School in Japan

K.K. Evergreen Outdoor Center

1-1-1 Nomizu, Chofu-shi, Tokyo 182-0031 Tel: 0422-34-5300 Fax:0422-34-5303 Email: info@asij.ac.jp Website address: http://community.asij.ac.jp

4377 Happo One, Hakuba Village, Nagano-ken 399-9301 Tel: 0261-72-5150 Fax: 0261-72-8056 Contact: David Enright Email: tours@evergreen-outdoors.com Web: www.evergreen-hakuba.com

Serving students from over 40 countries, The American School in Japan operates on two campuses and has offered a coeducational, international college preparatory program since 1902. The challenge to students of all ages to passionately pursue excellence in everything they do, forms the basis for a lively educational community and students at all grade levels have the opportunity to engage in extended campus learning. Internationally recognized Advanced Placement (AP) courses provide diverse learning opportunities that open the gateway to higher education around the world and 2010 graduates were accepted by top-tier universities in the United States, Canada, the United Kingdom, Australia and Japan. ASIJ offers 50 levels of Japanese, in addition to Spanish, French and Chinese. An extensive program of over 100 K-12 extracurricular activities complements classroom learning and includes many service opportunities. Excellent facilities on the 5.5ha main Chofu campus and at the Early Learning Center in Roppongi are complemented by 150 highly qualified faculty, who provide a challenging academic experience designed to “develop compassionate, inquisitive learners prepared for global responsibility.” Our faculty average over 20 years of teaching experience each and over 60% hold advanced degrees.

For the past decade, Evergreen Summer Camps have been the ultimate get-away for kids who are keen to have some serious fun and learn about mountain ecosystems! From canoeing, kayaking, raft building, firefly viewing to hiking, mountain biking, and arts-andcrafts making, our camps have something for everyone, aged 8-16.

Campers will explore, with English-speaking outdoor instructors, natural water springs, pristine and working forests, heritage areas, mountain streams and crystal-clear Lake Aokiko, where we will do plenty of swimming and boating, while at the same time learn about the geography, history and biology of Japan’s Northern Alps.

Campers stay in lakeside cabins for the duration, except for our overnight camping trip using tents. Every day we will prepare and cook our own meals, and clean up, with assistance from our very own Roots Café, which uses only locally grown organic produce. Camp meals are nutritional and kid-friendly with pancake breakfasts, picnic lunches, BBQ dinners and marshmallows toasted over the campfire.

With programmes that run year-round, Evergreen Outdoor Center aims to incorporate a sense of respect and stewardship for the natural environment – as it is not only a great place to play, but home to a vast array of life, including ourselves!

McGill MBA Japan Program

Mitsui Garden International Preschool

6-6-2 Nishi-Shinjuku, Shinjuku-ku, Tokyo 160-0023 Tel: 03-3342-3430 Fax: 03-3342-3431 Email: inquiry@mcgillmbajapan.com www.mcgill.ca/desautels/mbajapan

2-1-1 Roppongi, Minato-ku, Tokyo Tel: 03-3224-6796 Fax: 03-3224-6487 Email: ewapreschooldirector@gmail.com www.ewatokyo.org/Home.html

The McGill MBA Japan program is the leading Master of Business Administration program in Japan, and one of the best weekendMBA programs available anywhere in the world. The program is designed and taught by professors who fly in from the Desautels Faculty of Management of McGill University, Montreal, Canada.

McGill’s MBA is ranked within the top programs in the world by the Financial Times, and the university is among the most prestigious centres of research and teaching.

The MBA Japan program caters to early- to mid-career executives who are looking to make the leap into senior management or entrepreneurship. The weekend format of the program allows students to continue working full-time, while receiving a top-class business education in English, with classmates from all over the world. Located at the Hilton Tokyo in Nishi-Shinjuku, at the center of business in Japan and Asia, the McGill MBA Japan program is the ideal starting point for companies and individuals to re-invent their future. McGill alumni are found in every corner of the globe, taking leadership positions in industries ranging from manufacturing, to retailing, consulting, advertising, finance, as well as government and non-profits. To find out more: visit our website at www.mcgill.ca/desautels/mbajapan

The US Embassy-Tokyo, EWA (www.ewatokyo.org) is hosting its 17th annual Summer Camp program for ages 3½ to 12 year olds inside the U.S. Embassy housing compound in the heart of Tokyo.

This is an all-English-speaking program with many fun activities for your child to enjoy and build wonderful cultural memories. It is a great opportunity to introduce or improve their English ability and confidence. Each session is from 09:00 to 16:00 for one week, and you can sign up for as many weeks as you want. Due to high demand, we recommend early registration. Registration period begins April 27. The actual date of the summer camp is from June 20 to August 19. We also offer a Toddler Playgroup Program for children ages 18 months to 3½ years old. It would be a good introduction for your kids in preparing them for an international preschool environment. Mitsui Garden International Preschool is now accepting applications for the 2011-2012 school year.

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New International School of Japan

Osaka International School

3-18-32 Minami-Ikebukuro, Toshima-ku, Tokyo 171-0022 Tel: 03-3980-1057 Fax: 03-3980-1154 Contact: Steven Parr Email: sparr@newis.ed.jp http://newis.ed.jp

4-4-16 Onohara-nishi, Minoh-shi, Osaka 562-0032 Tel: 072-727-5050 Fax: 072-72-5055 Contact: John Searle, head of school Email: jsearle@senri.ed.jp Website address: www.senri.ed.jp

Our summer programme (ages 5-15) is fun and educational, and includes reading, writing, science, mathematics, and music activities. It is open to children of any nationality and also to members of the wider community. Parents may choose a programme conducted only in English, only in Japanese, or in English with one Japanese class daily. The final day of each programme will involve presentations and performances, with the participating families invited.

Parents are expected to provide a box lunch and drink for their children.

The schedule is from 10:00 a.m. to 2:30 p.m., Monday through Friday, with a choice of a one-month programme from July 6-August 3; or a two-week programme from July 6-20, or July 21-August 3. There will be a maximum of 10 students for a class with one teacher, or up to 20 students for a class with two teachers. An aftercare option to 4:00 p.m. is provided, as well as a school bus option to routable locations. Application forms are available from our website.

Ideal for families already in Japan, or for families who used to live here and would like their children to return in the summer to help maintain and develop their Japanese- and/or English-language proficiency.

Osaka International School provides the highest-quality International Baccalaureate education from kindergarten to high school. This culminates in the final two years of school with a 97% success rate in the Diploma (compared to the worldwide rate of 80%), allowing our students to move on to some of the most selective universities in the world.

OIS, though, offers more.

No other international school in the world works in such close cooperation with a domestic school as OIS does with its sister school, SIS. Through this two-school synergy, OIS offers an educational experience unlike any other: a world-class music programme; superb Japanese-language instruction; participation in sports, music and theatre events all across Asia; and authentic experience of the host culture.

Our school prepares students not just to cope with a changing world, but also to lead the change. We expect them to be open-minded and tolerant, caring and thoughtful, principled and persuasive, and to be able to apply knowledge to creative problemsolving. To participate in an education at OIS is to aim high.

Summerhill International School

Yokohama International School

2-13-8 Moto-Azabu, Minato-ku, Tokyo 106-0046 Tel: 03-3453-0811 Fax: 03-3453-0820 Email: info@summerhill.jp www.summerhill.jp

258 Yamate-cho, Naka-ku, Yokohama 231-0862 Tel: 045-622-0084 Fax: 045-621-0379 Contact: Admissions Office or Shohei Nishihara for Summer Programmes Email: yis@yis.ac.jp Website address: www.yis.ac.jp

Nestled in the heart of Moto-Azabu, Summerhill International School has been catering to children aged 16 months through to six years old for over 44 years. Our caring, warm and environmentally conscious environment – coupled with our highly trained and qualified teaching teams – ensure that a child’s potential is fostered and encouraged to blossom. We always try to find innovative ways to introduce something special that other schools generally don’t offer, such as our gymnastics, art and music, and soccer programmes. Our Kindergarten programme recognises that children will soon be entering schools that have a range of expectations for a child’s social and academic performance. The programme provides a comprehensive, learningcentred approach that challenges children and supports all areas of development. It recognises both the value of emergent curriculum and the need for directed, sequential instruction to ensure that children enter first grade with the skills and knowledge expected of them. Our high expectations for children’s academic achievement, the attainment of appropriate social skills, and the development of self-assured, confident children make our programme highly desirable. Children are enthusiastic about learning and participate in a balanced, multi-sensory curriculum that includes the development of literacy skills, mathematics, science, social studies, computer studies, art, movement, music and drama.

Located in the historic Bluff District of Yokohama, just 35 minutes from central Tokyo by express train, Yokohama International School is an independent, not-for-profit, co-educational day school for children ages 3-18 years old. Established in 1924 as a pioneer in international education, YIS offers a rich cultural mix, exciting learning environment, and excellent academic programme. At the same time, we emphasise the social and emotional development of our students, and offer an extensive range of co- and extra-curricular activities. An IB World School, YIS is accredited by the Council of International Schools (CIS) and the New England Association of Schools and Colleges (NEASC).

The 2011 Summer Programmes at YIS include Summer’s Cool, a fun and engaging three-week learning programme for elementary students ages 4-11 years old, with particular attention on fostering academic improvement in language arts and mathematics.

There are also individualised enrichment courses in English and mathematics for middle and high school students. Both programmes will run from June 20 - July 8, 2011.

See www.yis.ac.jp/summer for details.

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Holger Wittich Bright ideas Text JULIAN RYALL Photo Tony mcnicol

E B C personality

W

hen Holger Wittich first stepped off the transpacific liner at Yokohama, everyone wanted to meet and touch this tall, strikingly blond, foreigner. Later, on a street car in Tokyo, he was unable to fish the ¥10 fare out of his pocket in time and the Japanese passengers began to argue over who should have the pleasure of paying the conductor on his behalf.

Japan, says Wittich, was a very different place in 1961.

“The boat from Los Angeles took 14 days, but when I got off it was a complete revelation to a 21-year-old,” Wittich told EURObiZ. “I felt like the centre of the world, a celebrity and, I must admit, it felt great. You have to remember that this was before tourism and before the arrival of colour TV, so a blond person was quite something.”

Six weeks travelling around the country was Wittich’s first taste of Japan, but even after returning to Munich in his native Germany to start university he felt Japan’s pull. He planned to return shortly before Tokyo hosted the 1964 Olympic Games, but unable to wait that long, he arrived a year early with nowhere to live, no money and no contacts.

“I had hitch-hiked as far as Tehran, then taken buses to Saigon where I caught a boat,” says Wittich, now 71.

“I tried to learn Japanese at a school, but all the other students were either from embassies or were missionaries; it was all just too slow for me. So I began exchanging language classes with young Japanese, learning whole sentences by heart.”

That did not solve the problem of finances or accommodation. But after being interviewed for the Yomiuri Shimbun he received numerous offers of a place to stay. He later got a job with the Nikkan Sports newspaper as a translator for the Olympics. Afterwards, he went back to Munich to complete his degree in economics.

Before he left Japan, however, Wittich had taken out insurance in the form of setting up a company. Armed with a business visa, he flew back to Tokyo the day after he graduated in 1969

and began exporting plastic goods to Germany. That quickly evolved into a working relationship with a Japanese household goods wholesaler, where he started a lighting fixtures division.

“And in all those years, doing business in this sector has not changed very much at all,” says Wittich, who is now president of Akane Lighting.

“There are still just 10 large companies selling lights and light fittings, such as Panasonic, Hitachi, Koizumi and others.

He describes the distribution process as “very complicated”, resulting in higher prices for consumers in a market almost completely closed to foreign companies.

Still, Akane Lighting has carved out a firm niche for itself.

“Our speciality is in identifying European designs and then making products that work in Japan,” he says.

“Here, ceilings are lower, rooms are smaller, and the standards and bulb sizes are different.

He arrived with nowhere to live, no money and no contacts “Personally, I like chandeliers, but here they would be much too low, so we have to adapt our designs,” says Wittich. “We have been fortunate to find a niche in Japan. People here still see European lighting as superior, so that makes us almost a brand.”

The company has around 20 employees and includes a design section. The designs are turned into all the required parts in Europe – primarily Italy and Spain – before being shipped back to Japan for assembly to meet domestic standards and deliveries at short notice.

The company’s warehouse in Kawaguchi, just over the border into Saitama prefecture from Tokyo, is an Aladdin’s cave of components, new designs, reference books and completed fittings hanging from cross beams in the high ceiling.

During two decades of involvement with the EBC, Wittich has spent 15 years as chair of the Machinery Committee.

He also runs his own consulting company, JBS Inc., which represents the

Do you like natto?

Title: President, Akane Lighting Time in Japan: “I first stepped onto Japanese soil in 1961, at the age of 21. I have been a permanent resident for 42 years.”

Business career highlight: “Starting my own business in Japan without any business experience in Germany.”

Business career regret: “My sole regret is that, compared with the chances the Japanese market offers, I ended up with only a niche business instead of being able to establish my own conglomerate.”

Favourite saying: “If people do not react to what you are saying, you are not saying it right.”

Favourite book or music: “Classical music, especially Baroque” Cannot live without:: “Beer” Most important lesson learnt in Japan “Don’t get mad at anything or anybody; think first.”

Do you like natto? Definitely. It reminds me of a certain kind of young German cheese that I make sure to eat whenever I visit Germany.”

3,000-member Association of German Industrial Machinery Makers (VDMA) and was for almost 30 years also the representative office of the Deutsche Messe AG, famous for the annual Hannover Fair, the largest industrial technology fair in the world.

The domestic lighting market is worth ¥400 billion a year – almost double that of Germany’s. And even though he will turn 72 later this year, Wittich has no plans to turn out the light on his career just yet. Partly that is because none of his employees, capable though they are, are yet ready to take on the extra responsibilities.

Wittich’s wife of 35 years, Etsuko, died in 2009, and his son, Akira, and daughter, Mayumi, are more Japanese than German, so he has no plans to return to Germany. He says he still feels “useful” here, not least as the caring grandfather of an infant grandson.

“I don’t feel typically European any more,” says Wittich. “I have many German friends here, but I don’t really feel a part of the foreign community.

“For me, Japanese is a natural language to work in, I like the country and so many things about life here, like when you walk into a supermarket and they thank you so politely for coming in.

That’s so very different.”

May 2011

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off the mark Photos and text DAMON COULTER

Japanese festivals are entertaining and meaningful events on the calendar of this country. I love them and, as I left the station in Matsuda en route to the Ashigara River Festival, I was excited to find colourful bunting decking the streets with a promise of tradition and exuberance. Yet Japan’s ancient rituals and storied culture were not the inspiration for this particular festival; pride of place was instead given to the humble rubber duck.

Fifteen thousand of them, in fact.

The festival’s highlight is the Kintaro Duck Race, inspired by a similar race held in the UK. After the ducks are unceremoniously dumped into the

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Sakawa river, they are keenly followed along the kilometre-long course. Local people who have paid for a duck and an all-important number hurry along the river banks, eager to see if theirs crosses the finish line first.

This time, the first-placed duck won its owner a vacation in Hawaii. The next 99 ducks over the line picked up prizes ranging from Nintendo Wii’s to restaurant vouchers. The money from the sale of the ducks (¥500 each) is used to clean up the local river basin and encourage environmentalism.

See all the photographs at www.eurobiz.jp

L ens F lair

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W ork P lace

Nick Waddington CEO, Montblanc GBU Japan Montblanc GBU Japan, which is part of the Richemont group, sells pens, watches, leather goods and jewellery. Pens range in price from 30 thousand yen to 30 million. The company has a maintenance department that often restores pens produced decades ago. “Our products are built to stand the test of time,” says Waddington. “We are not in the fashion business.”

Photo Tony McNicol

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