TOKYO (Nikkei)--Japanese companies are increasing exports from local units based in Southeast Asia to countries with which Japan has not yet signed free trade agreements, including China, South Korea and India.
Japanese companies are taking advantage of free trade agreements between the Association of Southeast Asian Nations (ASEAN) and China, South Korea and India to avoid tariffs.
Over the years, many Japanese firms have built factories in ASEAN countries, where labor costs are lower, using such plants as bases for export. Japan's slow FTA negotiations compared with rivals like South Korea is accelerating this trend. If Japan does not move ahead with the Trans-Pacific Partnership (TPP) and other trade negotiations, the nation's domestic industry may be hollowed out.
According to a survey by the Ministry of Economy, Trade and Industry, Japanese companies' exports from the "ASEAN 4" -- Malaysia, Thailand, Indonesia and the Philippines -- to Asia outside Japan totaled 26.1 billion dollars in the April-September period of 2010, up 50% from a year earlier. The jump was particularly large in motor vehicles, rising 180% over the past five years. Motor vehicles account for 30% of all such exports.
A survey last year by the Japan External Trade Organization showed that roughly 40% of Japanese firms exporting from ASEAN countries to other ASEAN members, as well as China, South Korea and India said they take advantage of FTAs. ASEAN has been active in the FTA game. The regional group has agreements with India and Australia that took effect last year. Under the terms of its FTAs with China and South Korea, about 90% of items are already tariff-free.
Japan has yet to enter into trade pacts with China, South Korea, India or Australia. An FTA between Japan and ASEAN went into force in 2008, but the pact specifies that tariffs will be reduced gradually by 2018, underscoring Japan's late start compared with its neighbors in Asia. Against this backdrop, Japanese companies are increasing exports from countries that have FTAs.
Nissan Motor Co. makes its mainstay March compact car in Thailand and India and shifts parts between factories in these countries through the FTA. Honda Motor Co. began exporting cars from Thailand to India in 2009. "We will increase parts procurement from the most cost-effective areas," said a Honda executive. Sony Corp. ships LCD TVs to India from Malaysia and holds the top market share in India, topping Samsung Electronics Co. and other South Korean rivals. Toshiba Corp. is also ramping up shipments from Indonesia to other ASEAN states and India.
Taking advantage of FTAs requires a certain percentage of inputs be procured locally. If Japanese firms continue increasing exports from outside Japan, domestic employment and the economy as a whole may suffer.
Source: The Nikkei Feb 13,2011
TOKYO (Kyodo)--Japan and Australia ended their latest round of bilateral free trade negotiations Thursday in Tokyo apparently without seeing a substantial breakthrough over the major sticking point of farm trade issues.
Japanese negotiation sources said that Australia is likely to accept Japan's demand to exempt rice from items subject to tariff elimination under their free trade agreement, while the move may mean that it is set to continue pressing Japan on the liberalization of four other sensitive items -- beef, dairy products, wheat and sugar.
The latest round of talks, the first since April 2010, is drawing attention as a process to test Tokyo's seriousness about its recent commitment to promoting free trade and to give clues on whether Tokyo is qualified to join a high-level regional free trade initiative involving Australia and the United States, called the Trans-Pacific Partnership.
A Japanese Foreign Ministry official, who briefed reporters about the four-day negotiations, said, ''If we are asked in which way the talks are heading, it is not in a stalled state and we are deepening mutual understanding and making progress.''
But he also said that he feels ''there is still a long way to go'' and acknowledged that reaching an FTA with Australia by June, as mentioned by some Cabinet ministers, is a ''lofty goal.'' Jan Adams, Australia's first assistant secretary of the Foreign Affairs and Trade Department, told reporters that she cannot comment on the matter, while Australian Ambassador to Japan Murray Mclean said, ''We'll be working hard...over the coming weeks and months.'' Japan and Australia agreed to hold the next round of FTA negotiations around April in Canberra, the Japanese Foreign Ministry said in a press release.
The major sticking point in the negotiations, launched in 2007, has been Japan's reluctance to make concessions on Australia's demand that it eliminate tariffs on sensitive products. Japan, for its part, is calling for the abolition of Australia's 5 percent tariffs on cars. Negotiations resumed after Japan's recent avowed commitment to pursue trade liberalization and institute reform of its agricultural sector, which would likely be adversely affected in the event it reaches FTAs with major trading partners.
The Japanese government has also said it will decide by around June whether to join negotiations for the so-called TPP, which is intended to require members in principle to scrap all tariffs. But strong opposition lingers among farmers, who fear they could be hit hard by an influx of cheap agricultural imports. In both the TPP debate and the Japan-Australia FTA negotiations, Japan is facing the question of whether it can drastically open up its agricultural market.
Japan has so far excluded sensitive agricultural items such as rice and wheat from tariff elimination in FTAs signed with other economies. Japan imposes tariffs of 38.5 percent on beef imports, 252 percent on wheat imports and 778 percent on milled rice imports. If rice is exempted from tariff elimination in the bilateral FTA with Australia, Japan believes the exemption may also be respected in the envisioned TPP agreement that is likely to be built on recent bilateral FTAs reached between member economies.
In the past, Australia has urged Japan to open up its rice market. But with the decline in rice production following droughts in recent years, the level of rice exports to Japan has dropped sharply -- to zero in each of the three years from fiscal 2007. In fiscal 2010, Japan-bound exports of Australian rice will be limited to 12,000 tons.
One of the Japanese negotiation sources said, ''Australia has no interest in rice.'' But even if rice is exempted, the outlook for the bilateral negotiations remains uncertain as Japan is hoping exemptions will also be applied to beef, dairy products, wheat and sugar.
To discuss progress in the bilateral FTA talks and issues related to the TPP, Japanese Minister of Economy, Trade and Industry Banri Kaieda left for Australia on Thursday for a two-day visit.
During his trip to Sydney, Kaieda is expected to hold talks with his Australian counterpart Craig Emerson, as well as with Prime Minister Julia Gillard.
The TPP negotiations are built on a regional free trade agreement that took effect in 2006 among Brunei, Chile, New Zealand and Singapore. Talks are under way to expand the framework to include five other Asia-Pacific countries -- Australia, Malaysia, Peru, Vietnam and the United States.
Source: The Nikkei Feb 10,2011
TOKYO (Nikkei)--Japan's exports of agricultural, forestry and fishery products increased 10.5% to 492.1 billion yen last year, the first gain in three years, according to government data released Thursday.
Although the strong yen has hurt exports of these products in recent years, shipments of rice, apples and dairy products grew sharply in 2010. Imports were also up, climbing 6.7% to 7.1 trillion yen, the Ministry of Agriculture, Forestry and Fisheries reported.
Hong Kong was the biggest importer, accounting for 24.6%, or 121 billion yen, of the total, followed by the U.S. at 68.6 billion yen and Taiwan at 60.9 billion yen. Japan's exports to Asia in these segments jumped 15% to 362.3 billion yen. Hit by foot-and-mouth disease found last April in Miyazaki Prefecture, exports of beef plunged 9.9% to 3.3 billion yen. Shipments to overseas markets were suspended, except for a few locations, such as Singapore and Hong Kong.
Early this month, however, the World Organization for Animal Health recognized Japan as a country free of foot-and-mouth disease. This may help Japanese beef exports return to normal.
The ministry aims to boost the nation's agricultural, forestry and fishery exports to the 1 trillion yen level by 2017.
Source:The Nikkei Feb. 11,2011
TOKYO (Nikkei)--The Japanese economy is widely expected to begin growing again in the January-March quarter, following a 1.1% annualized contraction in Japan's real gross domestic product in the October-December period. The bullish assessment reflects an uptick in factory output on the back of growing exports to Asia and elsewhere.
Japan's economy shrank for the first time in five quarters in October-December, due partly to a sharp decline in auto sales, after the government ended an 18-month subsidy program for green car purchases. But on-month, car sales began to rebound by December and jumped another 10% in January. Auto output -- an important component of the industrial production index -- also began rising after hitting bottom in October.
Exports, which had been slowing since last summer, also began to show signs of recovery. Many Japanese companies make components for smartphones, demand for which is growing quickly worldwide. These companies are expected to give a big boost to exports and capital spending in the months ahead.
On the other hand, surging prices for food, crude oil and other raw materials could pose downside risks to the economy in the near term. Besides putting a damper on the Japanese economy, the price hikes could also heighten inflationary pressure in the emerging economies that have become major markets for Japanese exports.
Source:The Nikkei Feb. 14,2011
TOKYO (Nikkei)--Listed firms in Japan have chalked up 83% of their consolidated pretax profit projections for the current fiscal year in the nine months through December. A total of 777 companies, or 47%, had reached the 80% mark as of Dec. 31, with 236 already topping their full-year projections.
Sony Corp. reported a pretax profit of 273.1 billion yen for the April-December period, soaring past its full-year projection by 37%. But it remains cautious, noting that the January-March quarter is typically slow for the digital home electronics sector and that domestic demand could weaken as the government scales down its incentive program for energy-efficient appliances. Kawasaki Heavy Industries Ltd.'s April-December pretax profit equals 98% of its forecast for the full year. The firm has enjoyed brisk sales of such products as hydraulic components for construction machinery.
By sector, the shipbuilding industry has reached 99% of full-year projections. The rubber sector, including tire manufacturers, is 89% of the way there. And retailers have logged 86% of full-year outlooks. Many of these firms had drawn up conservative forecasts due to the rising yen and higher materials costs.
The strong earnings for Japanese firms have been driven by growth in emerging markets and a recovery in demand in North America. Expectations are growing that many firms will post better-than-expected earnings in fiscal 2010.
Source:The Nikkei Feb. 11,2011
TOKYO (Nikkei)--The market for large office buildings in central Tokyo is unlikely to worsen significantly in 2011, according to a forecast by the local unit of U.S. real estate services firm CB Richard Ellis.
2010 saw demand for new office space in Tokyo's 23 wards grow for the first time in two years, according to the report. Demand is starting to recover for large buildings with the latest equipment and other properties as corporations move and consolidate offices. And with some companies enjoying improved earnings expected to invest in offices, rents for some large buildings will likely rise.
Although supply is seen growing 14% this year in office floor space terms, stronger demand is expected to absorb this increase as long as business conditions do not deteriorate. Signs of an upswing. But there are concerns that companies moving their offices will result in vacancies in older buildings. CB Richard Ellis predicts that more time is needed for rent levels to turn up.
The picture is less rosy for Osaka. Although large numbers of offices are expected to stop hitting the market, large buildings will be completed in 2013. With economic uncertainties keeping firms from spending heavily on offices, the supply glut will be difficult to resolve. Of 12 major cities across Japan, the office vacancy rate rose last year in all except Kanazawa. But new demand turned around to positive territory in seven cities.
Source:The Nikkei Feb. 11,2011
TOKYO (Nikkei)--To ensure the survival of Japanese farming, the government should encourage businesses to enter into the agricultural sector and the consolidation of farmland, the Japan Business Federation said in a report released Thursday.
The report on agricultural reform warns that "the foundation of domestic food production could collapse" from the severe shortage of successors to existing farmers and the increase in abandoned fields. Encouraging young people and businesses to go into farming should thus be made an urgent priority, the federation argues.
The influential business lobby, better known as Nippon Keidanren, recommends that the government make it easier to set up agricultural corporations by lowering barriers to entry. It also urges the government to provide subsidies for training and hiring young people for farming jobs, as well as to support new farmers in acquiring plots, among other areas.
Keidanren calls on the government to help farmers become more competitive by offering financial support and tax incentives for their efforts to expand operations and enhance productivity.
To help consolidate farmland, income tax exemptions and other preferential measures should be introduced for the sale and leasing of plots, the group says.
Keidanren advises the government to enact legislation for promoting the growth of the agricultural sector and to assist in efforts to boost competitiveness. Its recommendations also include setting fiveand 10-year targets that qualifying farmers would get help in meeting, as well as subsidizing farmers who still cannot compete against imports even after reaching the goals.
Source:The Nikkei Feb. 11,2011
TOKYO (Nikkei)--Japanese shipping companies are rushing to establish a foothold in Vietnam to tap growing demand for shipments of daily necessities and auto parts in the Southeast Asian country.
For the first time, Mitsui O.S.K. Lines Ltd. will have Europe-bound container vessels with capacities of 6,500 TEU (twenty-foot equivalent units) stop at a port near Ho Chi Minh City in southern Vietnam. It will deploy 10 such vessels through Vietnam on a weekly basis.
Nippon Yusen KK, meanwhile, has partnered with state-run Vietnam National Shipping Lines (Vinalines) to start freight services between Southeast Asian countries. The two companies currently supply a container ship with a capacity of 1,100 TEU for 14-day round trips between Thailand, Singapore and southern and northern ports in Vietnam.
This month, Kawasaki Kisen Kaisha Ltd. and a Vietnamese logistics firm will set up a joint venture in Hanoi to launch an international freight forwarding business by sea and air. The venture also plans to establish a branch in Ho Chi Minh City.
Source:The Nikkei Feb. 13,2011
Snack foods designed to provide quick nourishment for busy people are gaining popularity. With this in mind, The Nikkei Marketing Journal recently compiled a ranking of confectionery-style nutritional supplements based on ratings collected from major supermarkets' buyers.
The top two slots in the ranking of 12 brands from eight major companies went to CalorieMate and Soyjoy - both produced by Otsuka Pharmaceutical.
CalorieMate, the No. 1 product, was a pioneer in the market for nutritional snacks when it debuted in 1983. The company's Web site says the product enables the balanced intake of five major nutrients: protein, fat, glucide, vitamins and minerals.
When Japanese people think of CalorieMate now, many probably think of "balanced food" - the text printed on the package. The CalorieMate series features an extensive lineup, with the product coming in not just solid form but also as a canned beverage and jelly.
Second-ranked Soyjoy is made from powdered soybeans - which are well-known for their nutritiousness - with pieces of dried fruit mixed in.
Water still contained in the fruit is released when the bars are baked, giving them a moist texture, according to company officials.
Calbee Inc.'s Fruits Granola took the third position. It is a mixture of savory roasted grains, like brown rice and oat bran, and naturally sweet dry fruits.
Products from Asahi Food & Healthcare Co. captured the No. 4 and No. 5 places.
The ranking of producers was topped by Otsuka Pharmaceutical, which emerged far ahead of its rivals in such categories as ability to foster a brand, corporate image, and contribution to the market - i.e. energizing the segment by attracting attention to it.
Marketing prowess
Supermarket buyers have a great deal of faith in the company's marketing capabilities, which have been proven by the long-lasting popularity of not just CalorieMate but also the Pocari Sweat functional drink.
Calbee ranked second, followed by Kellogg (Japan) KK. The fourth and fifth places were occupied by Asahi Food & Healthcare and Ezaki Glico Co. The questionnaire was faxed to 162 supermarkets on Nov. 12 last year, with 91, or 56.2%, replying by the Dec. 6 deadline.
Source:The Nikkei Weekly Feb.7,2011
TOKYO (Nikkei)--The cosmetics industry, which has grown steadily for many years, has arrived at a critical juncture, as the financial crisis has altered the dynamics of the market.
Relative newcomers, including sellers of low-price products and online shopping site operators, are gaining momentum.
Meanwhile, time-honored companies are being forced to rethink their marketing styles.
Basic "Senka"-brand skin care products occupy much of the section containing low-price cosmetics at Sugi Pharmacy's Minami-Aoyama store in Tokyo. The new Shiseido Co. brand is the firm's first line whose items are priced below 1,000 yen.
Since last autumn, more than 3 million Senka products have been sold -- better than expected.
Shiseido's marketing strategy is to spend big to obtain good store space. "Shiseido spends like crazy (on sales promotion) and we cannot keep up," said a representative of a midsize cosmetics maker.
Japan's cosmetics market generated about 1.39 trillion yen in 2009, down 8% from a year earlier, according to shipment data compiled by the Ministry of Economy, Trade and Industry. The market for cosmetics priced below 1,000 yen continues to grow, but Shiseido got a late start in the segment.
Pulling ahead are drugstore chains' private-label brand products and cosmetics sold under Rohto Pharmaceutical Co.'s Hadarabo brand.
In response, Shiseido President Shinzo Maeda ordered that the company's sales operations at Otsuka's CalorieMate and Soyjoy earned the top two places in the ranking of supplement brands, while the firm itself was named the No. 1 producer.
Sugi Pharmacy's Minami-Aoyama store in Tokyo's Minato Ward: Shiseido and other major cosmetics makers are going on a marketing offensive in the low-price segment. drugstores and other retailers be ramped up. Salespeople have been assigned to drugstores and supermarkets since April last year. This represents a major change in Shiseido's marketing strategy, as 30% of its domestic sales still come from 14,000 stores with which it has special sales contracts.
The company is overhauling its operations, but being a long-established firm makes swift reform difficult.
Shiseido's decision to appoint Hisayuki Suekawa, 52, as its next president in April seems due largely to expectations that the relatively young leader will be able to implement reform.
Net rise
Rising online sales are also shaking up major cosmetics makers. According to Fuji Keizai Co., Internet and mail-order cosmetics sales became the second largest after those at drugstores in 2010, outperforming sales at supermarkets and other retailers.
The Avon group of the U.S., the world's largest door-to-door cosmetics sales firm, has virtually exited Japan, selling its Japanese arm to an investment fund last year. TPG Capital Japan Ltd., the new owner of Avon Products Co., intends to turn the business around through online and TV shopping sales networks.
At Clinique, a group company of U.S. cosmetics giant Estee Lauder, the biggest sales come via mail-order. Highly aware of non-store marketing power, Estee Lauder and L'Oreal of France have begun selling some of their products on the Internet, with the aim of eventually selling all products online.
The key customer bases of major cosmetics makers that sell their products by sending beauty advisors to department stores and other retailers, including Kanebo Ltd. and Kose Corp., are on shaky ground due to the new sales trends. "Strengthening online operations is of vital importance," said Hiroshi Kanda, senior executive vice president at Kao Corp., Kanebo's parent firm.
But given the characteristics of cosmetics products, face-to-face sales are unlikely to vanish. Pola Orbis Holdings Inc., Japan's largest door-to-door cosmetics firm, is trying to win over more repeat buyers, such as by sending beauty staff to karaoke establishments and elsewhere to provide skin care massage. With new types of sales networks gaining a strong market presence, cosmetics makers are being forced to become more creative about meeting customer needs.
Source:The Nikkei Feb.8,2011
The Office of Commercial Affairs, Royal Thai Embassy in Tokyo, Japan
Source : http://www.depthai.go.th