TOKYO (Nikkei)--The death of North Korean leader Kim Jong-il creates a precarious situation in the country, requiring Japanese companies to quickly assess the political and economic implications of the dictator's demise for their business in the region.
The transfer of power to the deceased leader's third son and anointed successor, Kim Jong-un, is not yet complete and the outlook for the new leadership remains murky.
The news that Kim had died of a heart attack stirred up a hornet's nest at the South Korean Embassy in Tokyo, sending diplomats scrambling for information. At the moment, South Korea has few active business dealings with the North, after the "Sunshine Policy" pursued by Presidents Kim Dae-jung and Roh Moo-hyun produced little more than frustration.
Open for business?
Under that policy, Hyundai Group began offering tours of the North's scenic Mt. Geumgang to South Korean travelers and built an industrial park in the North Korean city of Kaesong, close to the border village of Panmunjom in the Demilitarized Zone. Hyundai's efforts to build business ties with the North, however, were consistently undermined by Pyongyang's fickleness.
After President Lee Myung-bak came to office and announced a review of the Sunshine Policy, North Korea hardened its attitude toward economic relations with the South, forcing the Hyundai Group to suspend the tour business, in which it had invested heavily.
Other South Korean conglomerates have remained mostly indifferent to doing business with the erratic regime. Steelmaker POSCO imported iron ore from North Korea for a while, but only in small amounts. With dilapidated facilities and an underdeveloped infrastructure in the impoverished country, coal and iron ore from North Korea are uncompetitive with Australian and Brazilian imports.
The Samsung Group built a TV assembly plant in North Korea under a bilateral economic cooperation project, but has long since shuttered the facility. Most South Korean conglomerates feel doing business in the North simply does not pay. They would rather spend their time and money expanding in fast-growing emerging markets.
For better or worse
Kim's death, however, underscores the risks South Korean companies are exposed to when it comes to their neighbor. After the news hit the market on Monday, the share price of LG Display and LG Chem plunged by over 5%, compared with a 3.43% fall for the benchmark Korea Composite Stock Price Index. Investors dumped shares in the two LG Group firms, apparently because it runs key manufacturing facilities for LCD panels near the North-South border.
Japanese companies are just as unenthusiastic about North Korea's business prospects -- understandable since Tokyo bans trade with the country. With the outlook for formal diplomatic ties between Tokyo and Pyongyang grim, Japanese companies show no zeal for gathering information on opportunities in North Korea.
The dictator's death, however, has made it impossible for Japanese or South Korean companies to ignore the situation in North Korea. They must first assess its implications for East Asia. "We see no possibility of direct effects (on Japanese firms), but the situation could destabilize all of Asia, including South Korea and China," said a senior executive at a major Japanese trading house. It is also possible that over the long term North Korea will move toward economic reforms, creating more opportunities. Some economists point out that untapped resources in North Korea could lead to the development of profitable businesses. -- Translated from an article by Nikkei staff writers Sotaro Suzuki and Haruhiko Kudo
(The Nikkei Business Daily Dec. 20 edition)
TOKYO (Kyodo)-- Visiting Assistant U.S. Trade Representative Wendy Cutler indicated Thursday that the countries involved in negotiations on the U.S.-led Trans-Pacific Partnership free trade pact hope Japan will not exclude any products when it joins the negotiations, warning against calls in Japan for exceptions to be made for products such as rice when removing tariffs under the envisioned framework.
Speaking to a group of Japanese media representatives in Tokyo, Cutler also said the United States has begun to consider suggestions for Japan to further open its market to the U.S. automobile industry, following Japan's decision last month to seek participation in negotiations for the trans-Pacific free trade accord.
Concerning the removal of tariffs under the TPP framework, Cutler said the United States and its TPP partners see the pact as "a high-standard, comprehensive agreement" and expect countries such as Japan that express an interest in participating "to say that everything will be on the table for the TPP negotiations."
She said the U.S. government is consulting with stakeholders, including members of Congress, to assess Japan's readiness to join the trade pact talks as well as inviting opinions through Jan. 13 from concerned parties in the United States about Japan's interest in joining the TPP negotiations. "How long this process will take, we don't know frankly," Cutler said. "It will take as long as it needs to. We're trying to move as quickly as possible, but recognizing that this is a detailed process and we need to be thorough."
The assistant trade representative emphasized that the United States will also "work very closely with Japan" in the assessment process, but her comments indicate that current TPP members are unlikely to compromise easily over the calls in Japan for exclusions in the removal of tariffs.
On auto trade, Cutler said, "Our auto companies have already expressed their views on TPP and Japan's entry, and now we are trying to work with them to understand their concerns in more detail so we can be in a position to not just express our concerns to Japan but also to offer suggestions with respect to how we can open Japan's market to U.S. autos."
She said the longstanding issue is one "of key importance and an issue that we need to do more work on," adding that U.S. carmakers, workers in the auto industry and members of Congress representing auto companies continue to be concerned over the matter.
She also reiterated U.S. concern over moves in Japan to scale back the planned privatization of Japan Post that are viewed as hampering fair competition between the entity and the private sector handling insurance products.
"There should be a level playing field with respect to the sale of these products and private sector companies should not have to compete against government entities with respect to these types of products," Cutler said, adding that the view is shared by Canada and European countries as well as Japanese insurance companies.
Cutler stopped short of commenting directly on the possibility that China and South Korea may also show interest in joining the TPP negotiations, only saying that she thinks the two countries "are watching very closely what happens with respect to Japan's bid to join TPP."
She also said the United States views the TPP accord as a "vehicle" that now has nine members but would eventually be expanded to include all members of the Asia-Pacific Economic Cooperation forum.
In addition to the United States, the countries currently involved in the TPP negotiations are Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam. So far, Japan, Canada and Mexico have expressed readiness to join the talks.
(The Nikkei Dec. 15 edition)
TOKYO (Nikkei)--The government plans to issue a proposal to standardize maritime transportation and logistics guidelines with the Association of Southeast Asian Nations, in a bid to expand Japan's trade ties with the organization through the establishment of a more efficient logistics system. The government will float the plan at a meeting of Japanese and ASEAN transport ministers in Cambodia on Friday. Earlier, Prime Minister Yoshihiko Noda announced that the government will spend 2 trillion yen to improve infrastructure in ASEAN countries. Some of these funds will be allocated to Tokyo's logistics standardization proposal. Pallet plan
The government's plan involves standardizing the transport pallets used on ships. Pallet sizes tend to vary by country and region, and some ASEAN nations do not even use pallets for shipping purposes. As a result, it can take a long time for port workers to unload cargo from ships. Japan has been promoting the use of standardized pallets with China and South Korea since 2008, and it hopes to expand this system to the rest of Asia.
The government will also urge ASEAN member states to adopt Japan's system for simplifying port entry procedures for ocean vessels. Currently, Japanese ships entering ASEAN ports are forced to individually contact port authorities via radio or fax to handle a number of procedures, spanning applications to port authorities, immigration-related issues, customs-clearance methods and quarantine policies. If the Japanese system were adopted, these procedures would be conducted online.
ASEAN is Tokyo's second-largest trading partner after China, accounting for nearly 15% of the total value of Japan's exports and imports. This figure has roughly doubled since 1995. This year's devastating floods in Thailand disrupted production for many Japanese companies with operations in the country. ASEAN nations now serve as a critical parts supply center for Japanese firms.
(The Nikkei Dec. 14 evening edition)
TOKYO (Nikkei)--Retailers, food service providers and other lifestyle-related businesses are expanding product lineups and shelf space that targets baby boomers now turning 65. With declining birthrates expected to dampen domestic consumption, these businesses are targeting elderly consumers, fostering them as main revenue sources.
Retailers, food service providers and other lifestyle related businesses are expanding their service lineups for senior customers.
Aeon Co. (8267) opened its first gardening speciality shop that caters to consumers 60 and above, in Shizuoka Prefecture in November, offering around 2,900 items in the roughly 1,000 sq.-meter-space. It plans to increase the number of such stores to 100 within the next few years. It also plans to hold workshops for beginners that focus on topics such as pest control.
Daimaru Matsuzakaya Department Stores Co. will set up its Madame Selection floor space that exclusively handles popular clothing brands for women aged 60 and older at its flagship stores in major cities. The Madame Selection floor is currently available at the Matsuzakaya outlet in Tokyo's Ueno district and at the Daimaru department store in Kyoto. Free beverages are provided to shoppers to help give the floor a relaxed ambience. Watami Takushoku, a food delivery service provider for the elderly run by Watami Co. (7522), will build 95 new delivery stations by February, bringing its total to 242, up 60% from a year earlier. It also plans to roll out the food delivery service throughout the country, except Hokkaido and Okinawa, by February 2013.
Human Academy Co., a school operator of career qualification classes, opened its first school that offers senior citizens culture-related classes, in Yokohama this autumn, and plans to open 30 such schools over the next three years. Major cram school operator Eikoh Inc. will also launch similar services.
(The Nikkei Dec. 19 evening edition)
TOKYO (Nikkei)--The Ministry of Economy, Trade and Industry, leading home appliance producers and other firms are set to agree Friday on common standards for connecting electronics with energy management systems for residences and buildings.
Home energy management systems (HEMS) automatically control temperature settings when connected to such appliances as air conditioners and refrigerators to help curb energy consumption. METI and its private-sector partners seek to have HEMS work even when connected to products from different manufacturers.
Panasonic Corp. (6752), Toshiba Corp. (6502), Daiwa House Industry Co. (1925) and Toyota Motor Corp. (7203) are expected to sign the pact with the ministry, as are Tokyo Electric Power Co. (9501) and Nippon Telegraph and Telephone Corp. (9432). The standards will cover more than 150 items, including elevators, automatic doors and electric vehicles.
The group will propose the new format by March to an international organization that will determine international standards.
(The Nikkei Dec. 16 morning edition)
There are many traditional "machiya" townhouses in Kyoto's old town.
TOKYO (Nikkei)--The city of Kyoto will introduce an ordinance aimed at preserving the former capital's traditional aesthetic by encouraging the renovation of historic buildings, The Nikkei has learned.
Many wooden structures fail to meet the latest earthquake-resistance standards and exceed current limits on building-to-land ratios. Under existing rules, many such buildings that are renovated to increase their quake-resistance have to be made smaller to meet the land-coverage regulations, which can ruin their previous appeal.
The new ordinance, which will cover all historic buildings -- such as "machiya" townhouses -- built before the building standards law was implemented in 1950, will exempt them from the size rules. Kyoto believes the new ordinance, which it aims to put into effect in spring, will encourage quake-proofing renovation of historic buildings and thus promote their use as lodging or stores.
(The Nikkei Dec. 16 evening edition)
TOKYO (Nikkei)--Major property developers will introduce systems in which all residents of a condominium building join to buy electricity together in order to reduce power bills by 5-10%. The moves come in response to concerns over higher electricity rates following the March earthquake.
Mitsubishi Jisho Residence Co., a unit of Mitsubishi Estate Co. (8802), will adopt such an arrangement at newly built 100 condo buildings by fiscal 2013. The system requires transformers, meters and other equipment to be installed in these facilities. In principle, condo buildings with at least 40 units each will be equipped with such a system.
Households generally use low-voltage electricity, which is more expensive than high-voltage power for commercial use. Condo facilities will buy high-voltage power in bulk from Tokyo Electric Power Co. (9501) and other utilities and convert it for use by residential units. Even with the equipment installation cost of about 100,000 yen per unit, electricity rates will be 5-10% lower.
Nomura Real Estate Development Co. will employ a similar system at several of its new sites, including condos in Tokyo's Koganei city and Kita Ward as well as Yokohama. Chuou Denryoku Co. will handle equipment installation for the Nomura Real Estate Holdings Inc. (3231) unit as well as for Mitsubishi Jisho Residence.
Daikyo Inc. (8840) will start bulk purchases of power at condo developments in the Tokyo and Osaka metropolitan areas. The system will be set up at buildings that have at least 50 units each under a tie-up with Orix Electric Power Corp. It will employ technology that allows equipment to be installed outside a building for more effective use of space. Mitsui Fudosan Residential Co. will adopt the scheme at a condo building set to open in August in Nishitokyo, Tokyo.
(The Nikkei Dec. 16 morning edition)
Yoshiaki Kawashima recently came up with a new coffee-brewing method that works under the low pressure environment of a flying aircraft. So now Japan Airlines Co. passengers can enjoy a decent cup of the stuff. Call him the java maestro.
"I was most thrilled when I was told (by JAL) that the cost had doubled but (the coffee) tastes 10 times better than before," the 55 year old said. So this autumn, freshly brewed coffee's pleasant tartness and rich aroma began wafting through the aisles on the carrier's flights.
Pyramid structure
The complimentary coffee for passengers is not made of and breathes coffee. particularly expensive coffee beans. "You can improve taste by removing subpar quality beans at the farms, and paying attention to transportation and storage," the maestro explained.
He flew back and forth between Tokyo International Airport at Haneda and Naha Airport in Okinawa Prefecture to test brewing methods in low-pressure aircraft cabin with limited equipment. He also had JAL stop brewing coffee in advance of when it would be served. Kawashima's family ran a coffee-roasting business in Shizuoka Prefecture. In his teens, Kawashima studied coffee farming in El Salvador. He later joined UCC Ueshima Coffee Co. During his career there, he helped run coffee plantations in Hawaii and elsewhere. Kawashima is also known as a coffee hunter. He travels the globe to help preserve near-extinct varieties of coffee.
To introduce fine and rare types of coffee beans from around the world, Kawashima opened a cafe in Tokyo three years ago. There, Kawashima said, people can purchase "distinguished coffee beans." Hoping to increase the population of coffee drinkers, Kawashima has offered know-how to numerous companies and shops. "I want to build a pyramid-shaped consumer market structure, where, like wine, exquisite varieties of coffee are highly appreciated," he said, "while a broader base of coffee drinkers enjoys regular grade but still tasty varieties."
Kawashima also works to achieve sustainability in coffee production, helping protect the environment of coffee-producing countries and the rights of workers. But now, he is more concerned about the direction of Japan's coffee industry.
"I think the sustainability of the domestic (coffee) industry is at stake," Kawashima said. "That is because it is being plagued by higher raw materials prices and deflation." He is critical about businesses moving to cut costs while sacrificing quality. If the trend continues, he said, "bad coffee will come to dominate the market, and more people will end up hating coffee."
(Nikkei Weekly December 12 edition)
TOKYO (Nikkei)--The tides are shifting in the world of sushi, with salmon overtaking tuna as the preferred variety among Japanese. Salmon has long had a strong following overseas because of its low price and a fat content similar to that of more expensive "toro" (tuna belly). Old-school chefs in the capital may grumble that Salmon, because its not among the species native to Tokyo Bay, has no place on the sushi counter, but that has not stopped the pink fish from becoming the top seller at "kaiten" (conveyer-belt) sushi shops.
Sushi restaurants at Tsukiji market are popular with overseas visitors. "I'd like to have one piece of salmon," said Michelle Smith, a 29-year-old traveler from Chicago, at a sushi restaurant in Tokyo's world-famous Tsukiji fish market. She was not ordering lunch. Smith was among the throng of customers standing in line at 5:00 a.m., braving the predawn cold for a taste of Tsukiji's finest.
"I love sushi, and salmon is my favorite. I wanted to eat good salmon sushi before leaving Japan," said Smith. Sushidai, a restaurant on the grounds of the huge market, started serving salmon two or three years ago.
"At first it didn't seem right to serve salmon. But there were so many foreign customers and younger Japanese guests who wanted to eat salmon, so we decided to add it to our menu," said Satoshi Urushibara, head chef at Sushidai. The restaurant searched for salmon that goes well with the traditional Edo-style sushi popular in Tokyo. It settled on a variety from Hokkaido, the northernmost of Japan's main islands.
Salmon on top
The numbers point to the growing taste for salmon among sushi lovers. In a survey of diners at "kaiten" (conveyor belt) sushi restaurants by condiment maker Mizkan, salmon climbed to the top spot as the fish that "stood out the most" in customers' minds, ahead of tuna. In Mizkan's 2008 ranking of popular sushi fish among homemakers, salmon came in second, making the list for the first time.
Salmon is also popular at this kaitenzushi restaurant in Kawaguchi, Saitama Prefecture. Another survey of kaitenzushi patrons ranging from teenagers to people in their 50s, this one by Maruha Nichiro Holdings Inc., saw salmon swim past tuna as people's favorite fish to eat first. Women said it was also their favorite to wrap up a meal. Women and younger people apparently like salmon because it is not as fatty as tuna belly.
The changing Japanese palate has left restaurants and supermarket scrambling to expand their offerings of salmon. Kappa Create Co., which runs a chain of kaitenzushi restaurants, offers six types of salmon sushi, including salmon and avocado, as well as grilled salmon. Popular at home Isetan Mitsukoshi Food Service, which operates the high-end Queen's Isetan grocery store chain, began selling sashimi-grade aurora salmon from Norway three years ago. December sales of the variety are expected to grow 20% on the year.
Salmon sashimi sells for about 300 yen per 100 grams, half the price of medium-fat tuna belly. "Salmon is cheaper than maguro (tuna), so my seven-year-old daughter, who loves salmon, can eat a lot," said a 31-year-old woman in Kawaguchi, Saitama Prefecture. "Salmon is something that often makes it to our dinner table," she adds.
As Japanese consumers increasingly prefer tuna belly and other fatty fish, attention on salmon has grown because it offers good value for the price. Ito-Yokado Co. reports a 20% rise in sashimi and other salmon sales for the March-November period. With the year-end holiday season approaching, demand for salmon is expected to grow. Daiichisuisan Co., an importer of Norwegian salmon, forecasts December sales will jump 80% on the year.
Farming it out "Because tuna is difficult to raise, the fish sold on the market is mostly wild, resulting in quality variations. But salmon is farmed, so supplies are stable," said a wholesaler at Tsukiji, giving another reason for salmon's growing popularity.
Salmon production is increasing globally. According to the United Nations' Food and Agriculture Organization, worldwide production of salmon and trout totaled 3.12 million tons in 2008, up a whopping 165% from two decades earlier. Most of the increase comes from farmed salmon produced in Chile, Norway and elsewhere.
"Farmed salmon is uniform in size, fattiness and price," said an official at the Fisheries Research Agency, a semipublic body that studies and promotes development of marine resources, noting the uniform quality appeals to restaurant operators and wholesalers. Chilean salmon is particularly affordable, the official said, explaining the South American country's 17% share of global production, second only to Norway at 27%.
There are, of course, holdouts against the salmon onslaught. Kyubey, a high-end restaurant in Tokyo's Ginza district, politely refuses requests for salmon from Hollywood stars and foreign leaders. "We recommend other super-fresh sushi, and our customers are satisfied with that," said owner-chef Yosuke Imada.
And salmon is also nowhere to be found on the menu of Bentenyama Miyakosushi, a 145-year-old restaurant in the Asakusa district. "Traditional Edo-style sushi used fish that can be eaten raw at a time when there were no refrigerators," said owner-chef Tadashi Uchida, explaining his restaurant's adherence to tradition.
"Most sushi salmon needs to be frozen. Plus, when considering the balance among the four traditional ingredients of vinegared sushi rice, wasabi, fish and soy sauce, salmon just does not fit. This is why we don't use salmon," he declared.
Uchida admits, however, that, "The culture of sushi has spread the world over," thanks to the growing use of salmon -- which is readily available in many parts of the world -- in sushi at Japanese restaurants overseas.
Salmon's surging popularity among young Japanese and people from overseas is a sign of sushi's transformation from the quintessential Japanese dish to a truly international food. --Translated from an article by Nikkei staff writer Sachiko Kishida
(The Nikkei Dec. 7 online edition)
The Office of Commercial Affairs, Royal Thai Embassy in Tokyo, Japan
Source : http://www.depthai.go.th