The government plans to subsidize businesses that manage their earthquake and tsunami risks by dispersing production within Japan rather than moving plants abroad. The idea is part of a package of post-earthquake measures expected to be approved on June 22 at the Industrial Structure Council of the Ministry of Economy, Trade and Industry (METI), according to sources.
Funding for the subsidy program is expected to be incorporated into a third supplementary budget for the current fiscal year, the sources said. The proposed measures also include payments to companies in growth sectors that set up new bases in Japan, subsidies to encourage Japan's auto industry to standardize its parts network and incentives to deal with power shortages following the Great East Japan Earthquake.
The necessity of paying firms to keep production in Japan was driven home to officials by a METI survey that found that 69 percent of companies thought that factories could be moved out of Japan at an increasing rate following the March 11 disaster.
Under the proposed initiative, leading parts suppliers will be eligible for subsidies if they disperse their factories across Japan, thus reducing the threat to the industry from a major natural disaster in a particular part of the country. The alternative solution for many manufacturers, shaken by the badly disrupted supply chains following the massive quake and tsunami, is to move production overseas. Businesses with operations in potential growth sectors will also be entitled to subsidies if they establish new manufacturing bases in Japan, and the ministry is considering providing financial assistance to small and midsize part suppliers that sustained damage in the disaster.
Officials also want to provide subsidies to encourage automakers to standardize the parts in their vehicles, so that different manufacturers are using common components. The thinking within METI is that such standardization would strengthen Japan's supply network and cut costs. Another key issue identified by the ministry is the looming power crisis following the accident at the Fukushima No. 1 nuclear power plant.
A shortfall in power is expected to continue until next year or later, with the quake-hit northeastern region expected to be one of the areas affected. METI is concerned that shortages could encourage a further "hollowing-out" of Japan's industrial base. It plans to issue a decree obliging industrial users in the disaster-affected Tohoku and Kanto regions to limit their electricity usage this summer. Those with contracts to receive at least 500 kilowatts of electricity under the jurisdictions of Tohoku Electric Power Co. and Tokyo Electric Power Co., operator of the crippled plant, will be covered by the measure.
But officials also plan to introduce a mechanism to encourage businesses to voluntarily save energy. The idea is for utilities to buy the difference between the amount actually used by industrial customers and the amount they contract to buy, effectively giving discounts.
The ministry is also looking to encourage businesses to install privately owned electricity generation equipment by getting utilities to purchase electricity generated by that plant through the Japan Electric Power Exchange, a market for electricity. The new measures are expected to be added to the "Industrial Structure Vision" formulated by the ministry last June.
Souce:The Asahi Shimbun June 23,2011
TOKYO (Kyodo)--Products made from rice including rice crackers, rice balls and Japanese sake will be required to display the rice's country of origin from July 1.While many rice crackers are made from foreign-grown rice, an official at a nationwide association of rice biscuit manufacturers said, "Consumers want to know the production area of rice. We have to be aware that we should not betray them."
Those who violate the law will face a fine of up to 500,000 yen. Japanese rice for home consumption is already required to indicate origin by prefecture on the product package under the Japan Agricultural Standards.
Source: The Nikkei, June 25, 2011
TOKYO (Nikkei)--Japan and Singapore will sign an agreement in Belgium on Saturday recognizing each other's programs of simplified customs procedures for approved companies. Japan has made similar deals with the U.S., South Korea and other countries, but the agreement with Singapore will be its first with a member of the Association of Southeast Asian Nations. It is ultimately aimed at promoting exports to Asia.
In what are called authorized economic operator (AEO) programs, companies that meet certain financial and security standards receive easier customs clearance when importing and exporting goods. When two countries recognize each other's programs, approved firms in one enjoy the same status in the other. Japan and Singapore will seek to implement their agreement this summer.
Source:The Nikkei June 25,2011)
TOKYO (Nikkei)--Online advertising agency CyberAgent Inc. (4751) and virtual mall operator Rakuten Inc. (4755) are among major Japanese Internet businesses pushing into Asia to tap the region's surging Internet use.
CyberAgent established an online ad joint venture in Indonesia with the PT Global Mediacom Tbk group, the country's largest media firm, on Wednesday. A CyberAgent subsidiary took a 49% stake in the joint venture, which was capitalized at roughly 18 million yen.
Indonesia's Internet users are still limited to less than 20% of its population. Even so, global social networking service leader Facebook already has more than 38 million users in that country, second only to the U.S. CyberAgent anticipates a sharp expansion in its Net-related business in Indonesia as more people gain access to cyberspace. The company also has plans to bring its online advertising business to Vietnam and Thailand by year-end. Other online ad firms are also targeting the Asian market. Adways Co. (2489) plans to boost sales personnel at its Chinese unit by about 40% to 100 this year, and it will move into Indonesia next month. Opt Inc. (2389) hopes to penetrate the Chinese market soon via a joint venture. And D.A. Consortium Inc. (4281) has its sights set on expanding into Southeast Asia by the end of the year.
Japanese firms are also aggressively tapping Asia in the area of online shopping services because of the region's rising population and economic growth. Rakuten has launched its Rakuten Ichiba mall in Indonesia through a joint venture with Global Mediacom, after earlier advancing into Taiwan, China and Thailand.
Japan's leading portal site operator, Yahoo Japan Corp. (4689), has tied up with Taobao, the largest online shopping site in China, to direct consumers to each other's shopping malls, with the help of automatic translations of product descriptions.
Source:The Nikkei June 23,2011
TOKYO (Nikkei)--The Cabinet Office estimates direct damage to roads, houses and farms caused by the March 11 earthquake and tsunami at 16.9 trillion yen, 80% higher than the 9.6 trillion yen in damage caused by the 1995 Great Hanshin Earthquake. Regions along the Pacific coast took the hardest hit, causing more damage to agriculture, forestry and fishery than the 1995 quake.
The estimate covers areas along the Pacific coast from Aomori to Chiba prefectures, along with Tochigi, Niigata and Nagano prefectures. The estimate includes damage to facilities and equipment at Tokyo Electric Power Co.'s (9501) Fukushima Daiichi nuclear power plant, but does not cover the cost of cleaning up the plant or damage from radioactive contamination.
Damage to structures such as houses, stores and factories is estimated at 10.4 trillion yen, 60% higher than the 6.3 trillion yen of damage from the Kobe earthquake. Damage to agriculture, forestry and fishery -- farmland, forests and fish nurseries -- is estimated at 1.9 trillion yen, approximately 24 times the 80 billion yen of damage from the 1995 quake. Lifelines such as nuclear power plants, waterworks and gas lines took damage estimated at 1.3 trillion yen. Other infrastructure, including Sendai airport, river embankments and roads, is estimated to have suffered 2.2 trillion yen of damage, while other facilities had 1.1 trillion yen worth of damage.
"Total damage is likely to rise in the end," the Cabinet Office said, because the government is still struggling to calculate the full extent of losses within the 20km exclusion zone around the Fukushima nuclear power plant.
In March, soon after the massive earthquake struck, the government roughly estimated the total damage at 16-25 trillion yen. The latest estimate is calculated by totalling the money needed to restore property to its original state.
Source:The Nikkei June 24,2011
Japan is no stranger to cataclysms. The postwar reconstruction was undoubtedly the single most exacting challenge the country has experienced to date. But in various ways and degrees, the oil shocks of the 1970s, the yen revaluation following the 1985 Plaza Accord, the end of the bubble economy in the early 1990s, and the Great Hanshin Earthquake of 1995 all left indelible marks.
As Japan struggles to recover from the heartbreaking tragedy of March 11, world confidence in its ability to restore normalcy is high. Viewed from Ground Zero, however, the situation is less clear. After three months, efforts to resolve the nuclear crisis and rebuild remain critical. And the cracks do not seem confined to the three destroyed reactors at Fukushima Daiichi either.
The Kantei (administration) itself appears to be in disarray, and public frustration at the speed of recovery efforts is all too evident. Can Japan escape the dreaded prisoner's dilemma, where individual and sectarian interests triumph over those of the country? To borrow a common software term, can a new and vastly improved "Japan Version 6.0" be engineered?
Twenty-first century Japan finds itself in unfamiliar circumstances. The ascendancy of Asia -- notably China but also India and the ASEAN -- and the receding superiority of the U.S. are geopolitical realities. This has set off a mad scramble not just for markets, investment opportunities and technology but also energy, food and every imaginable resource.
On this score alone, Japan's future diverges from the past. At home, however, the constraints of demographic decline are beginning to bite deep. And with the volatile world economy and currency markets offering little respite, Japan's ability to rebuild and, more importantly, confront the structural factors behind its economic malaise cannot simply be assumed.
With all this in mind, making small improvements in the context of continuity would seem woefully inadequate. Yet to many, the kaizen philosophy of constant incremental improvement remains the dominant ethos. To be sure, this has been the genius of the Japanese people. But given the scale of the issues Japan faces, as well as time pressure, it is doubtful whether excellent craftsmanship or engineering alone can result in the needed changes.
More than any other resource, Japan needs extraordinary people -- people with vision, creativity, boldness and culture-changing influence. Which is why, in times of great crisis, the political establishment needs to enlist people with precisely these qualities from inside and outside government and place them in leadership positions -- not just advisory roles -- where they can drive change.
This is usually the prerogative of presidential democracies -- appointing highly empowered professionals and technocrats who are relatively free from political dictates will not sit well with parliamentarians and bureaucrats anywhere. Still, bipartisan and popular support, selective application and adequate safeguards can go a long way toward gaining acceptance.
Albert Einstein once said that insanity is doing the same thing and expecting different results. Japan needs very different results domestically and abroad and ergo cannot afford to do the same thing. A policy of cooptation of the very best professionals into the polity could well be mission critical. At the very least, it bears consideration and investigation.
Source:The Nikkei Weekly June 20,2011
The prospect of a long, hot summer without air conditioning is fueling sales of Father's Day gifts at Tokyo's top department stores. Father's Day has traditionally been a relatively unimportant date in Tokyo's shopping calendar, with only half the sales of Mother's Day.
But Matsuya Co., which runs Matsuya department stores, says its Father's Day business is up 15-20 percent compared with last year. Sogo & Seibu Co., which operates Sogo department stores and Seibu department stores, has seen an increase of 20 percent. Much of the interest seems to be in "cool biz" garments designed for Japan's intensely hot and humid summer. With power shortages in the aftermath of the March 11 quake forcing companies and transit networks to economize on air conditioning, it seems children are kitting out their dads to endure the summer misery.
At Matsuya's Ginza outlet, a jacket made of very lightweight shirt fabric is a hit. It has no lining and boasts seven pockets, a key selling point to men who want to ditch their bags. "Shoppers used to find it difficult to think what they should buy their fathers," according to a sales clerk at the Matsuya store. "But this year they are focused on cool biz items."
At outlets operated by Sogo & Seibu, men's "suteteko" light-weight long drawers are the hot item. Sales of the underwear grew more than five times at Seibu department store's Ikebukuro outlet and more than 28 times at its Shibuya outlet compared with last year. One novel "suteteko" design, priced at 3,990 yen ($50) including tax, that can be worn without trousers inside the home is flying off the shelves. The underwear is also selling well at department stores operated by Isetan Mitsukoshi Holdings Ltd. At Takashimaya Co.'s department store in Nihonbashi, a small wallet for men that fits into shirt pockets is proving popular because it can be easily carried without a jacket. Ninety of the wallets were bought in May, even though it came from a relatively unknown brand and was priced at 12,600 yen including tax.
"It sold more than double that of a big-name brand," according to a sales clerk. Department store representatives say more shoppers are arranging delivery of presents to distant fathers. A week before Father's Day, about 10 percent more deliveries had been arranged at Sogo & Seibu stores this year compared with 2010.
Source:The Asahi Shimbum June 19,2011
Supermarkets and convenience stores are expanding their selections of prepared dishes, selling them in smaller portions than competing prepackaged products.
Aeon Co. has set up a new section for ready-made side dishes, offering items from boxed meal chain Origin Toshu Co. on a trial basis at six of its supermarkets. About 20 side dishes, including nikujaga beef and potato stew, are available and sell for 178 yen per 100 grams.
Since Aeon made the products available, sales of prepared dishes at the six stores have risen by 20-40% on the year. To boost sales further, Aeon plans to offer Origin Toshu dishes at 120 stores within the next three years.
Lawson Inc. now sells side dishes by weight at 41 of its outlets. The convenience store chain plans to offer the service at 3,000 of its shops by the end of fiscal 2015. Right now, some 10-20 ready-made foods are available for 1-1.2 yen per gram.
At a supermarket Ito-Yokado Co. opened in Tokyo's Suginami Ward last October, roughly 200 side dishes can be bought in single-serving portions. Ito-Yokado is focusing especially on single people, who make up about 60% of the residents in the neighborhood. It will offer similar products at 100 stores in the future.
The trend toward smaller, more convenient portions is being driven by shrinking household sizes. According to preliminary census data from last year, the average household in Japan had 2.46 people, falling below 2.5 for the first time ever. This reflects an increase in households with only one resident, whether they are unmarried or elderly. And these singles are increasingly taking advantage of the convenience of prepared foods sold in small packages.
Source: The Nikkei Weekly June 20,2010
TOKYO (Nikkei)--Major retailers are expanding their offerings of adult care products, hoping that giving customers a wider range of products to choose from will help them grow sales in a promising market.
Ito-Yokado Co., a supermarket unit of Seven & i Holdings Co. (3382), has adult care sections measuring 120-130 sq. meters at 98 of its outlets. Later this year, the company will bring the sections to 120-130 stores, doubling the space at some of them. It will also expand its product line to cover such items as health food and walking shoes.
Ito-Yokado stores will also work with major food processor Kewpie Corp. (2809) to put on tastings where visitors can sample food aimed at people who have difficulty chewing and swallowing. The supermarket chain hopes to increase its sales of adult care products by 20% to 5 billion yen this fiscal year.
Homac Corp., a subsidiary of DCM Holdings Co. (3050), Japan's largest home improvement chain, recently set up an adult care section at its Nishioka Super Depot store in Sapporo. The section offers about 1,500 products, ranging from food, walking canes and diapers, to railings and equipment to make restrooms more accessible. Sales in the new section have risen by 50% more than initially planned, according to Homac.
At 15 Daiei Inc. (8263) stores, there are sections of about 50 sq. meters dedicated to health food and adult care items. The company plans to place such sections in 75 or so additional outlets this fiscal year.
Aeon Co. (8267) is designing an adult care section that will also offer sundry goods for seniors, as well as clothing that is stylish and easy to wear. The firm plans to open the new sections at its roughly 400 shopping centers, with the first one likely to be set up before the end of the year. According to Yano Research Institute Ltd., sales of 15 adult care items, including wheelchairs and diapers, rose to 250 billion yen in fiscal 2010 from 224.8 billion yen in fiscal 2006. Sales are forecast to grow to nearly 280 billion yen by fiscal 2013.
Source:The Nikkei June 27,2011
TOKYO (Nikkei)--While economic gloom is choking overall domestic consumption, women in their 40s are still keen to spend. Companies are trying hard to figure out what makes these people so willing open their purses and come up with products and services that excite them.
One explanation for their shopping passion is the equal employment opportunities law that came into force in 1986, when most of them were at university or high school. The law bans discrimination based on gender at workplaces, and opened the door for women to gain greater economic independence.
The law has led to steady growth of the ratio of female workers over years, according to Ministry of Internal Affairs and Communications data. A relatively high proportion of women in their 40s have full-time jobs, indicating they have more disposable income than women of other age groups. Single fortysomething women have an average monthly disposable income of 240,000 yen -- higher than the figure for other single women of any age group.
Bubble children
Another possible factor behind their propensity to consume is that they were in their 20s -- an impressionable age -- during the bubble years of the late 1980s. Luxury-brand products sold like crazy during these years of speculative frenzy, perhaps making women in their 40s more willing to splash cash on expensive items than those in other age groups.
"Women in their 40s were the first to break free from the prevailing feeling of self-restraint following the Great East Japan earthquake in March," says Hiroyuki Nishibe, deputy editor-in-chief of the Nikkei Trendy magazine.
Companies offering beauty products are especially keen to woo free-spending fortysomethings. Nishibe says such companies try to market products to these women with a message that they can look as young as they did when they were 35. Epitomizing this trend is a bra that underwear maker Wacoal Holdings Corp. (3591) launched in 2009. The company markets the bra mainly at women in their 40s, stressing that it can make their breasts look five years younger. The strategy seems to be working, with sales from last July through March surging 55% on the year to 135,000 units. "People in the clothing industry are paying more attention than ever to the market for fortysomethings," said Reiko Ishii, a marketing manager at Tokyo Style Co., a clothing unit of TSI Holdings Co. (3608).
Growing market
Department stores are renovating women's clothing sections in response to significant growth in the number of fortysomething women with youthful tastes. Tokyo Style, in cooperation with Hankyu Hanshin Department Stores Inc. -- a department store chain operated by H2O Retailing Corp. (8242), and Takashimaya Co. (8233) -- rolled out in late February its Tool Faith brand of products with vivid colors that target women in their 40s.
Cosmetics maker Shiseido Co.'s (4911) Revital Granas series of basic skin care products is aimed at women in their 30s and 40s who are willing to pay extra to maintain beauty. The series' skin lotion has sold well since going on sale in 2008, despite a relatively high price tag of 7,350 yen, including tax, for a 150ml bottle.
Sales of electrical appliances such as facial massagers and high-performance hair dryers have also grown briskly. The market for such appliances was worth 120 billion yen in 2010, and is expected to surpass 150 billion yen in 2013, according to Nomura Research Institute Ltd.
Looks not all
A growing number of women in their 40s with busy careers are looking for products that allow them to quickly care for their skin at home or the office. But looks are not everything, with today's fortysomethings equally interested in self-improvement. A Dentsu Communication Institute Inc. survey conducted in July last year found that women in this age group have a strong interest in living and traveling overseas. This desire is borne out by the fact that learning English was one of the most popular study activities for these women. This bodes well for companies such as Benesse Holdings Inc. (9783), owner of language school operator Berlitz Corp., and English conversation school operator Gaba Corp. (2133). Their penchant for overseas travel could also help boost the bottom lines of travel agents such as H.I.S. Co. (9603) and Kinki Nippon Tourist Co. (9726).
Source:The Nikkei Veritas June 26,2011
TOKYO (Nikkei)--The Great East Japan Earthquake has left the government's blueprint for the country's economic revival in tatters. That plan focused on three policy goals: promoting exports of infrastructure technology; expanding use of renewable energy; and opening the nation further to people, goods and money from abroad.
As the government struggles to rebuild the shattered northeast, the drive by the public and private sectors to export Japanese infrastructure technology has sputtered. Meanwhile, rising Asian economic powers like China are pulling out all the stops to expand in the global market. Recently, Japan bagged a contract to build a gigantic coal-fired power plant in Indonesia, its first successful bid for a major international infrastructure project since the March 11 quake. Its cutting-edge technology to curb carbon dioxide emissions was the clincher. But it was a narrow victory against two Chinese groups that are rapidly expanding abroad by taking advantage of their cost competitiveness. Unlike Chinese firms, which receive extensive support from Beijing as it pushes exports, Japanese infrastructure companies get little help from the government.
Left behind
Despite the disaster at the Fukushima Daiichi nuclear power plant, Japan remains competitive in nuclear technology. Vietnam and Turkey are going ahead with plans to use Japanese technology for their nuclear power programs. The government should provide policy support to help Japanese companies make deeper inroads in international markets.
Hobbled by damage from the disaster, Japan is in danger of falling behind in several other key areas. It invested less than China, Germany and the U.S., for example, in renewable energy last year. In just 2010, China built eight times as much generating capacity as Japan's entire stock of wind farms. The government's lack of commitment to clean energy is all the more troubling because the nuclear disaster has underscored the importance of increasing the share of renewable energy in the nation's overall energy supply.
To become mainstream, green energy must become much more cost-effective and reliable, and it requires better distribution infrastructure. Prime Minister Naoto Kan has announced a target of installing solar panels in 10 million homes. But achieving such ambitious goals requires specific, workable plans to foster investment in key technologies.
Greener pastures
The accelerating trend among Japanese companies toward shifting operations overseas also has worrying implications for the country's economic future. Since the disaster, a number of companies that traditionally focus on the domestic market are moving operations to Singapore. In April, Kirin Holdings Co. (2503) moved some of its mergers and acquisitions planning to the city-state. Ryohin Keikaku Co. (7453), which sells Muji brand clothes and household products, will set up distribution facilities in Singapore as early as next year. And Japanese manufacturers continue shifting production elsewhere in Asia.
Fueling such moves are poor prospects for corporate tax reform and power supplies at home. "Concerns about supplies of electricity have reinforced the trend among Japanese companies toward expanding operations overseas," said Mitsuhiro Fukao, a professor at Keio University.
Recent decisions by the government have only deepened the economic gloom. The Kan administration, for instance, has put off plans to study an economic partnership agreement with the Mercosur, a free trade grouping of four South American countries, due to opposition from the Ministry of Agriculture. The decision ignores Japan's need to open itself up to the world to increase business opportunities for Japanese companies.
Source:The Nikkei June 27,2011
The Office of Commercial Affairs, Royal Thai Embassy in Tokyo, Japan
Source : http://www.depthai.go.th