TOKYO (Nikkei)--Rising labor costs and the likelihood of a currency revaluation are prompting Japanese companies to reconsider their heavy dependence on China for production and procurement.
The apparel industry, which is particularly reliant on cheap labor, has been leading Japanese firms' shift away from China. Roughly 90% of clothing products sold in Japan are made in China. But some local sewing factories are having difficulty even securing enough workers.
Labor costs are going up in Beijing and other parts of China. Fast Retailing Co.'s Uniqlo chain of casual clothing stores sources about 85% of its products in China. It plans to lower the figure to 70% in 2012. "We'll build a system that will let us make and sell products all over the world," Chairman and President Tadashi Yanai said.
"Given the possibility that the yuan may be revalued, we have no choice but to reduce the proportion of production in China," said Takaaki Inoue, an executive officer at Sanei-International Co..
Sumikin Bussan Corp. has decided to lower the percentage of clothing that it procures from Chinese subcontractors to 90% or less in 2012. To meet the target, it has tied up with Myanmar's U.M.H. Co., which will produce 700,000 pieces of clothing a year on behalf of Sumikin Bussan. The company also aims to bolster clothing production in Indonesia and Thailand.
Sanyo Shokai Ltd. will scale back production in China while raising output in Japan to 50% within several years from slightly less than 40% today.
Japanese electronics parts makers are boosting manufacturing in Southeast Asia.
Meiko Electronics Co. has decided to spend at least 50% of the roughly 12 billion yen in capital outlays earmarked for fiscal 2011 and beyond at its Vietnamese factory. The major printed circuit maker sees Vietnam surpassing China to become its biggest overseas production base within a few years.
Hitachi Ltd. is considering beefing up its Thai plant as a base from which to export industrial machinery to the Asian market. The company counts more than 130 affiliates and currently employs nearly 60,000 in China.
In a poll conducted late last year by the Japan Bank for International Cooperation, Japanese manufacturers picked India over China as the most promising country in the next decade. The same poll found that rising labor costs was their top concern in China, with 64% selecting this answer.
Reflecting the tension that flared up between the two countries following a maritime collision earlier last year, about 47% said they recognize the importance of reducing risk by limiting their reliance on China.
Source:The Nikkei Feb. 16,2011
TOKYO (Nikkei)--Trade between Japan and China increased 30% to a record 301.85 billion dollars, or about 25.2 trillion yen, last year, according to the Japan External Trade Organization.
Both exports and imports marked all-time highs, and this was the first time that Japan's trade with any nation surpassed 300 billion dollars.
Exports from Japan to China jumped 36% to 149.09 billion dollars, or 12.4 trillion yen, with shipments of construction and mining machinery enjoying a 105% spike thanks to China's investment in large infrastructure projects. Exports of automobiles expanded 81%.Imports rose 25% to 152.75 billion dollars, or about 12.7 trillion yen, with electronics, such as smartphones, other cell phones and LCD televisions, enjoying a 47% jump.
China accounted for a record 20.7% of Japan's total trade, up 0.2 percentage points from 2009.
Given that export growth outpaced import gains, JETRO says the bilateral trade may swing to a surplus in Japan's favor this year.
Source:The Nikkei Feb. 18,2011
Japanese firms
India's requirement that foreign manufacturers must disclose secret source codes of their telecommunications equipment could deter Japanese companies from seeking new business opportunities in the country, according to observers.
The two countries on Wednesday signed a bilateral economic partnership agreement that will eliminate tariffs on 94 percent of trade within 10 years and should spur bilateral trade, but the source code rule could make Japanese firms think twice about entering the Indian market. The government and businesses should work together to overcome increased regulations and red tape in some emerging countries, they added.
Source codes--detailed software design and information--are key intellectual properties. Once a product's source code is dissected and analyzed, other companies could use the data in their own products. Microsoft treated the source code of its hugely successful Windows operating software as confidential information, which led to huge profits.
In a notice issued last July regarding revised requirements cell phone operators must meet to acquire licenses, the Indian government ordered domestic and foreign manufacturers to submit software source codes of telecommunications equipment that would be newly introduced to their base stations, according to sources. A government-approved organization reportedly will manage the information.
Another government notice required manufacturers to transfer technologies used in their equipment to Indian companies within three years. Manufacturers were left with little choice but to accept one of these two requirements.
Many Japanese companies are itching to enter the burgeoning Indian market, partly to wean themselves off their overdependence on China. Strained Japan-China ties prompted China to restrict exports of rare earth metals to Japan last year, panicking Japanese companies that use the minerals in their high-tech products.
India apparently considers the entry of companies from industrialized countries into its markets as an opportunity to develop its own industries by acquiring these firms' advanced technologies. China and Brazil have employed similar strategies. "This tactic probably could soon spread to other emerging economies," a senior official of the Economy, Trade and Industry Ministry said.
India's newly introduced requirements had a precedent in China. In May last year, China began obliging companies to disclose classified information on IT products, including source codes, which drew fierce opposition from Japan, the United States and European countries.
"Access to the source codes of leading companies' products will enable [Chinese competitors] to instantly close technological gaps that otherwise would have taken them years," an industry insider said.
However, the trade ministry said it will be difficult to take a case that cites security concerns as reasons for these requirements to the World Trade Organization as a violation of international trade rules.
When it comes to the disclosure of source codes, industrialized and emerging economies often end up talking at cross-purposes because of significant gaps in their understanding of intellectual property, according to industry sources. The Japan Electronics and Information Technology Industries Association, a group of electronics manufacturers, hopes India will rethink its position.
"Japan, the United States and Europe all oppose the new rules. We hope [the Indian government] will revise them," an association spokesperson said.
Source:The Nikkei Feb. 18,2011
Striving to keep pace with its rivals, Japan signed its 12th economic partnership agreement to smooth the flow of exports, such as video cameras, auto parts and steel products, to the growing Indian market. Japan and India separately agreed to cooperate on infrastructure projects in and around Chennai, southern India.
The EPA, signed by Foreign Minister Seiji Maehara and Indian Commerce and Industry Minister Anand Sharma in Tokyo on Wednesday, will eliminate tariffs on 86 percent of products within 10 years.
The government will present the deal to the current regular Diet session so that it will take effect by the end of 2011. The EPA will also ease regulations on Japanese investments in India's distribution and telecommunications sectors. For India, the EPA will accelerate procedures for the approval of generic medicines and will also make it easier for Indian cooks and yoga instructors to work in Japan.
But Japan's key agricultural products, such as rice and beef, were excluded from tariff reductions or eliminations. The government made free trade agreements and EPAs a priority after Japanese companies said they have been put at a serious disadvantage by trade deals signed by Seoul.
Under the Japan-India EPA, the trade liberalization ratio, or the percentage of tariff eliminations in 10 years, will be 94 percent in terms of value and 86 percent of the product items. The ratios are similar to those in EPAs Japan concluded in the past. But in terms of products, the ratio is much lower than that under the U.S.-South Korea EPA, at more than 98 percent.
The Chennai infrastructure development cooperation was agreed upon in a meeting of public and private sector representatives of the two nations in Tokyo on Wednesday. Japanese industry minister Banri Kaieda and Indian minister Sharma attended. Because of its proximity to Southeast Asian nations and easy access to raw materials and parts via its port and airport, the industrial city of Chennai has attracted many foreign manufacturers in recent years.
As of October 2010, Japanese businesses had set up 223 factories and offices in Chennai, according to the Japanese Embassy in India. The two nations agreed to build freight port facilities, a trunk road leading to Chennai port and an industrial complex that uses renewable energy. They also agreed to construct commercial facilities and workers' residences. Private-sector funds will be tapped for the projects, according to the agreement.
Source:The Asahi Shimbun Feb.21,2011
TOKYO (Nikkei)--Itochu Corp. is entering the food distribution business in Vietnam through a partnership with a local firm. The Japanese trading company will take a 15% interest in a new food wholesaler being established this summer by a major local distributor of food and daily necessities.
Itochu will invest 200-300 million yen and could raise its stake once business gets on track.
Itochu will provide expertise in distribution center management and temperature management during shipping and will help increase the new company's transaction volume by supplying products from food manufacturers in Japan, the U.S. and Europe. Sales of around 2 billion yen are targeted for the new firm in 2012, rising to around 3 billion yen in 2015.
As the middle class expands in Vietnam, the food market there is growing more than 10% a year.
Smaller family-owned retailers are the mainstay of the Vietnamese food market, and product choices are still limited, but variety is increasing as the number of supermarkets rises.
Source:The Nikkei Feb. 18,2011
TOKYO (Nikkei)--A number of Japanese nursing care providers are preparing to enter China, attracted by surging demand there created by the rapidly aging population.
Tokyo-based firms Comfort Life and Yokohama-based Life Service System will in late 2012 jointly open a home for wealthy seniors in a suburb of Dalian. The center will be designed and operated by an experienced team of Japanese employees and will have 500 single-occupant rooms, a dining hall and facilities for tenants requiring intensive nursing care.
In addition to an admission fee of up to 430,000 yuan (around 5.4 million yen), tenants will be charged about 2,700 yuan a month, including for meals. Similarly, Long Life Holding Co. (4355) will launch a joint venture with a local firm to open a 170-room high-end home for the elderly in Qingdao in October. It targets first-year sales of 30-40 million yen, and plans to have 50 homes across China by 2020.
Aware of the shortage of nursing care aides in China, Saitama-based Wisnet Co. will in April begin offering seminars in Dalian on how to care for and interact with the elderly, Japanese-style. It seeks to produce about 30 graduates annually and hire the top ones to work at a day care facility it plans to open there.
There were about 111 million Chinese age 65 or older last year. According to the United Nations, roughly 13% of the population will be seniors in 2025, with the number jumping to 23% in 2050.
Beijing projects the market will be worth more than 500 billion yuan in 2020. Amid such rapid growth, the government is keen to bolster the country's nursing care services.
Source:The Nikkei Feb. 15,2011
TOKYO (Nikkei)--Japan's Transport Ministry is initiating a project in cooperation with major automakers to develop technologies and set performance standards for small and midsize electric trucks.
Since trucks and buses account for more than 7% of the nation's total carbon dioxide emissions, the switch to electric trucks will have a significant impact. Moreover, the project could give Japan's vehicle makers a global competitive edge in this still-untapped market. The Transport Ministry plans to pump more than 1 billion yen in subsidies into the endeavor over four years.
A key objective will be developing a high-performance control system to efficiently use the stacks of batteries that will power the electric motor. By fiscal 2014 the ministry intends to set basic criteria for battery durability, including such factors as impacts and vibrations, and set manufacturing guidelines.
The ministry in April will call for participation among vehicle makers and hopes to begin verification testing in fiscal 2012. Companies said to have expressed interest include Mitsubishi Fuso Truck & Bus Corp., Isuzu Motors Ltd., Hino Motors Ltd. and UD Trucks Corp., formerly known as Nissan Diesel Motor.
Source:The Nikkei Feb. 18,2011
It's like eating out but without having to dress up, worry about kids
Drive-through sales at fast-food restaurants are rising, as more people see this grab-and-go option as a thrifty way to satisfy their desire to eat out while enjoying the comfort and convenience of dining at home, according to a Nikkei survey.
In the survey, 41.1% of the respondents said they use drive-throughs. Of these, 29.2% said they do so more often than they did three years ago. Half of them were in their 20s, and 36.3% were in their 30s. The results show that drive-throughs are becoming more accepted as an alternative to sit-down restaurants, which people are frequenting less to better cope with the economic downturn.
McDonald's Co. (Japan) has about 1,300 drive-through outlets across the country that have been consistently logging nearly double-digit year-on-year sales increases over the past few years.
Dine and drive
"Highway toll discounts and a fall in gasoline prices are helping to boost our drive-through sales," a McDonald's Japan official said. Other food-service chains, including Starbucks Coffee Japan Ltd. and Matsuya Foods Co., which have been concentrated mainly in big cities until recently, are bolstering their drive-through operations. "I go for long drives almost every week, so it's becoming more convenient now that there are more drive-throughs near highway exits," said a 29-year-old businessman who lives in Tokyo.
Nearly half of the people who use drive-throughs - 47.2% to be precise - said they eat their orders at home. Another 45.5% said they take their meals "in the car while on the move." Nearly 20% said they will hop in their cars specifically to buy food at a drive-through.
Afternoon spike
Many drive-through customers take their orders home "because meals bought from a drive-through share the characteristics of both gaishoku (dining out) and nakashoku (prepared dishes eaten at home)," a Dentsu Communication Institute official said.
Helping spur the popularity of drive-throughs is the increasing variety of items available at these windows. For example, Ringer Hut Co., which runs a chain of Nagasaki-style champon noodle shops, started adding drive-throughs to existing restaurants in June. About 40 outlets now have drive-throughs, and sales at these eateries have climbed 5% on the year.
Ichibanya Co., operator of a chain of curry restaurants, opened its first drive-through in November 2009 and now has 23. "Our monthly sales (at the renovated restaurants) jumped by an average of about 500,000 yen ($6,097)," an Ichibanya official said. On weekends, drive-through sales are up 10-20% from weekday levels, according to the chain.
Many of the respondents said the appeal of drive-throughs is that they offer convenience on several levels. They cited, for example, the pleasure of not having to worry about what they wear or be mindful of other customers. "Eating at a restaurant can be a pain because my kids act up," said a housewife in her early 30s who lives in Hyogo Prefecture. "Using drive-throughs is a lot easier."
This may help explain why a Ringer Hut official said drive-through sales spike after the late afternoon, particularly among women with small children.
The survey was conducted online on Jan. 21-24 via research firm Macromill Inc. It targeted 1,000 men and women in their 20s through 60s.
NIIGATA--A team of researchers has developed new technology to make activated charcoal with high-level absorption capability from rice husks.
The team, from Nagaoka University of Technology in Nagaoka, Niigata Prefecture, said the rice husk-derived charcoal has a wide variety of applications, such as reducing carbon dioxide and other greenhouse gas emissions, and as material for fuel cells that can absorb large quantities of hydrogen.The charcoal is expected to be marketed commercially by the end of this year.
The research project started about two years ago, when Prof. Hidetoshi Saito, also vice president of the university, heard an agricultural cooperative official express concern about the disposal of rice husks.
When rice husks are heated to form charcoal, silicon dioxide remains as a by-product and obstructs the charcoal's absorption function.
The research team was able to neutralize the silicon dioxide by reheating the charcoal after mixing in potassium hydrate or sodium hydrate. Afterward, the charcoal surface had a countless number of 1.1-nanometer diameter holes. One nanometer is one billionth of a meter. The holes expand the charcoal's surface area and imbue the material with high absorption capability.
The average surface area of conventional activated charcoal is 1,000 square meters per gram, but the figure of the newly developed charcoal is 2.5 times that. Fuse Technonet Co., a semiconductor device manufacturer based in Hachioji, western Tokyo, has cooperated in a joint development study with the university team.
The company sees the rice husk charcoal as a promising material for the manufacture of battery electrical poles, and is trying to develop the technology to mass-produce it as quickly as possible.
"Rice husks can be procured in huge quantities from any part of the nation. We don't consider this merely as a way to utilize agricultural waste but as a new kind of industrial material," Saito said.
Source: The Yomiuri Shimbun Feb. 19, 2011
The Office of Commercial Affairs, Royal Thai Embassy in Tokyo, Japan
Source : http://www.depthai.go.th