TOKYO SKY TREE
Weekly News From Tokyo
DITP TOKYO (2013 April13 – April19)
20 Oct. 2014 ~ 24 Oct. 2014 (No.201442)
October 20, 2014
Japan pushes rice to snare a bigger share of global market
TOKYO -- Exports of high quality Japanese rice are increasing to meet the surging global
demand. Shipment figures for 2013 had exports at a record high of over 3,000 tons.
If both private and public stakeholders work to overcome current barriers, global demand
for Japanese rice may grow even more.
Japan's rice already has a worldwide reputation for quality. Takaya Ishizuka, chief chef of
Nadaman at Shangri-La in Singapore, often receives requests from patrons wishing to buy the
same rice served in his restaurant.
According to Ishizuka, the rice used by traditional Japanese restaurants in Hong Kong and
Singapore tastes far better now that they are buying rice from Japanese agricultural machinery
maker Kubota.
Good reputation: This photo taken in Shanghai shows
rice grown and sold in China being promoted by
claiming that it is as great as that made in Japan.
According to Gen Takahashi, Kubota's manager in
charge of strategic planning, the secret to their rice's
great flavor is -- freshness. Previously, chefs at
Nadaman in Singapore cooked stale old rice milled in
Japan after it had made the long boat journey.
However, the Japanese company established the subsidiary Kubota Rice Industry
(Singapore) to import, mill, and sell Japanese rice in Singapore. The rice served to customers at
Shangri-La is now milled only three days before. It goes without saying that Kubota only buys
from contract rice farmers of high quality.
As more and more restaurants buy rice from Kubota, the company is expecting to export
2,000 tons of rice, a 100% on year increase, in 2014.
The export of good rice continues to grow, with the volume expected to keep rising. Japan
hopes to double exports of agricultural products to 1 trillion yen ($9.25billion) by 2020, with rice
and rice products such as sake and rice confectionery estimated to reach 60 billion yen.
The government is confident about reaching the goal, thanks to the good reputation of its
Japanese rice.
Extremely difficult:: However, 3,000 tons annually is less than 0.01% of the global rice export
market. The low figure was previously attributed to the high price of Japanese rice. However, it
seems that a variety of other export barriers are also causing Japanese rice exports to lag.
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TOKYO SKY TREE
Weekly News From Tokyo
DITP TOKYO (2013 April13 – April19)
20 Oct. 2014 ~ 24 Oct. 2014 (No.201442)
In particular, exporting to China is extremely difficult. For example, Chinese authorities
require any rice brought into the country to be milled in Japan at a facility that meets safety
standards specified by China's Inspection and Quarantine Services.
Unfortunately, there is only one such mill house in Japan at the moment. The result is that
rice exports to China from Japan stood at just 46 tons in 2013. Makoto Hirayama, president of
major rice wholesaler Kitoku Shinryo, said that Chinese inspectors will not come to Japan to
certify mills , even if one is built.
However, the quality crop does not match every palette. Rice grown in Japan is soft and
sticky. An official from Oedo Food Services, the operator of yakitori chargrilled chicken chain
ToriQ in Singapore, said that Japanese rice goes well with dishes from that country, but it is not
as good when served with other Asian cuisines often accompanied by sauce or soup. (Nikkei)
October 20, 2014 8:00 pm JST
Japanese food companies gather in Singapore
Photo: Japanese producers from Tochigi Prefecture
resent strawberries and beef at the Oishii Japan
exhibition in Singapore.
SINGAPORE -- Japanese food companies, from rice
producers to confectionery makers to restaurants to
processing machine manufacturers, gathered in
Singapore to sell their products to the Southeast
Asian market.
They participated last week in two separate trade-shows that took place concurrently in the
city state. Oishii Japan was an exhibition to bridge between suppliers from Japan and Southeast
Asia's food and beverage industry, and Franchising & Licensing Asia was a business matching
event.
Oishii Japan, organized by OJ Events and supported by the Japanese Ministry of Agriculture,
Forestry and Fisheries, had 266 exhibitors. The show, in its third-year, started Oct. 16 at Suntec
Singapore Convention & Exhibition Centre. The show is the largest Japanese food-dedicated
trade show outside of the Northeast Asian nation, according to the organizer. This year it
attracted more than 5,000 trade buyers from 23 countries and economies, up from 3,800 last
year.
Municipal governments and industry bodies from prefectures such as Tochigi, Gunma and
Kagoshima showcased high quality agricultural products, such as strawberries and beef. To
answer demand from the regional buyers, the show featured 41 confectionery exhibitors under
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TOKYO SKY TREE
Weekly News From Tokyo
DITP TOKYO (2013 April13 – April19)
20 Oct. 2014 ~ 24 Oct. 2014 (No.201442)
the "J Sweets" theme. Individually-packaged Japanese sweets are gaining traction in Asia.
One of the first-time exhibitors under spotlight was Yamakichi Seika Shokuhin, a vegetable
processing company from Fukushima Prefecture. The company brought a series of fruit-flavored
jelly drinks made of Konnyaku with Halal certification, which shows the product is permissible to
consume under Islamic law. The company acquired the certificate ahead of Tokyo Olympics in
2020 to appeal Muslim visitors. In the meantime, it is testing the market in countries such as
Malaysia and Indonesia.
Another crowd-puller was Kojima Giken Kogyo, a skewering machine maker from
Kanagawa Prefecture, coveted by yakitori, or grilled chicken skewer, restaurants. Its wide range
of machines cater to various sizes of business.
Held in Marina Bay Sands convention center a stone's throw away, Franchising & Licensing
Asia featured the very first Japan Zone. Twelve food and beverage brands participated in the
zone, searching for franchise partners in Southeast Asia.
One of the exhibitors, Bincho Ohgiya yakitori restaurant, brought in by VIA Holdings
headquartered in Tokyo, has more than 300 outlets in Japan, but none overseas. "We are keen
to expand to Southeast Asia, to build a foundation for long-term growth", Executive Officer
Hidefumi Buto said at the event. "To succeed in expanding overseas, we need partners who
understand the local markets well. Singapore is the first step to penetrate to other parts of
Southeast Asia."
Japanese food businesses in Southeast Asia will continue to grow, buoyed by consumer
demand and the weaker yen, according to Masanao Nishida, director of OJ Events. "The
demand from hotels and event caterers has room for further growth," he added. (Nikkei)
October 22, 2014 2:00 am JST
Japan to crack down on wealthy tax dodgers fleeing abroad
TOKYO -- Japan is considering taxing the capital gains on stocks and other financial assets held
by residents moving overseas, part of an effort to prevent the super rich from escaping tax bills.
When Japanese residents sell stocks, capital gains are subject to a 20% tax, including
income and residential taxes. But if they move abroad while owning stocks that have unrealized
gains, they do not pay taxes to the Japanese government but to their new country when the
stocks are sold. A growing number of Japanese are ducking payment by moving to places that
do not tax capital gains, such as Singapore, Hong Kong and Switzerland.
France, Germany and Canada are among those nations that already tax unrealized capital
gains when residents move abroad. Japan plans to adopt the same measures for those with
financial assets of more than 100 million yen ($927,000). About 100 people are expected to be
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TOKYO SKY TREE
Weekly News From Tokyo
DITP TOKYO (2013 April13 – April19)
20 Oct. 2014 ~ 24 Oct. 2014 (No.201442)
subject to this levy each year.
Those moving abroad temporarily will not be taxed on unrealized capital gains as long as
they notify the government and move back to Japan within the specified period. If they do not
return by the deadline, the government intends to collect the tax through local authorities
overseas.
The Finance Ministry presented the proposal to the government's tax commission on
Tuesday. With some in the ruling Liberal Democratic Party are calling for swift action, the
government hopes to include the new levy in a tax reform package for fiscal 2015, which the
ruling coalition will draw up in December.
By closing a loophole that favors the wealthy, the government hopes to demonstrate the
fairness of its tax policy before raising the consumption tax, a regressive tax that puts a
disproportionate burden on low-income households.(Nikkei)
October 22, 2014 4:44 am JST
Drugstore market primed for realignment
TOKYO -- By moving to restructure its drugstore business via the acquisition of Welcia Holdings,
Aeon aims to boost profitability in an increasingly cutthroat environment.
The company expects group sales to total 7 trillion yen ($64.9 billion) for the year through
February 2015, up more than 50% from five years earlier.
Core businesses are growing. But among these, streamlined operations with clear centers of
gravity, such as malls and financial services, are generating more profits than the less-efficient
supermarket business, where resources are spread thin across various affiliated retail operators.
The drugstore business has been a key revenue source for Aeon, but its group chains are
partners in a loose alliance. Aeon generally holds stakes of 10-30% in major regional drugstore
operators, with their team-ups limited to such areas as developing private-label drugs and
training personnel.
Amid intensifying competition among drugstores, Aeon plans to sharpen its competitive edge
by turning Welcia into a subsidiary, getting a jump on an emerging industry trend.
Sales across the country's drugstores topped 6 trillion yen for the first time ever in fiscal 2013,
according to the Japan Association of Chain Drug
Stores. But year-on-year growth came to just 1.2% -the smallest gain on record.
No single company dominates. From industry leader
Matsumotokiyoshi to seventh-ranked Cocokara Fine,
everyone is scrambling in a crowded market.
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TOKYO SKY TREE
Weekly News From Tokyo
DITP TOKYO (2013 April13 – April19)
20 Oct. 2014 ~ 24 Oct. 2014 (No.201442)
Top operators have begun buying up major regional chains with strong local followings in an
effort to gain ground. Matsumotokiyoshi has acquired the Simeno Yakkyoku chain in Kanazawa,
Ishikawa Prefecture, while Tsuruha Holdings has bought Hearty Wants in Hiroshima.
Independent regional chains are finding it harder to stay afloat amid aggressive expansion by
national giants. "Chains with low marketing capabilities that make 30 billion yen or less in sales
are clearly in dire straits," says Tsuneo Watanabe of the Nihon M&A Center.
"Right now we are still in the semifinals," says an executive at a leading drugstore operator.
"The finals will start when the industry realignment reduces the entire market to three or four
companies." (Nikkei)
October 22, 2014 11:48 am JST
Japan logs record trade deficit for April-Sept.
TOKYO --Japan logged a record deficit of 5,427.1 billion yen in goods trade for the first half of
fiscal 2014, against a backdrop of continuous rises in fossil energy imports amid the prolonged
halt in nuclear power plant operations, the government said Wednesday.
The deficit expanded 8.6 percent from a year earlier to the largest amount for the
April-September period since comparable data became available in 1979, as the value of imports
increased 2.5 percent to 41,324.0 billion yen, the Finance Ministry said in a preliminary report.
Imports of liquefied natural gas and petroleum products gained 8.7 percent and 7.6 percent,
respectively, the ministry said.
Exports also rose 1.7 percent to 35,896.9 billion yen, with those of metal processing
products surging 26.8 percent and automobiles climbing 2.6 percent, it added.
The results underscored how the net outflow of money from Japan has continued with
utilities bolstering fossil fuel-based power generation as an alternative to stalled nuclear power in
the wake of the March 2011 Fukushima nuclear emergency.
The depreciation of the yen has also helped the country's trade deficit inflate. During the six
months through September, the yen slid against the U.S. dollar by 4.1 percent year on year to
102.55 yen, according to the ministry.
A falling yen usually supports exports by making Japanese products cheaper abroad and
boosts the value of overseas revenues in yen terms, but it pushes up import prices. Japan
depends on imports for around 90 percent of its energy needs and about 60 percent of its food
supplies.
Some analysts say Japan's trade deficit is expected to shrink, given that crude oil prices
have been falling sharply with fears of a global economic slowdown growing.
"This may push down import prices, which could significantly contribute to an improvement
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TOKYO SKY TREE
Weekly News From Tokyo
DITP TOKYO (2013 April13 – April19)
20 Oct. 2014 ~ 24 Oct. 2014 (No.201442)
of (Japan's) trade balance," said Taro Saito, senior economist at the NLI Research Institute.
Indeed, crude oil imports decreased 3.5 percent from the previous year to 6,567.2 billion yen
in the April-September period, the ministry said.
But Takeshi Minami, chief economist at the Norinchukin Research Institute, disagreed with
the view, saying a possible slump in the world economy would drag down Japanese exports, in
turn preventing the nation's trade deficit from contracting.
In the first half of this fiscal year, shipments to the United States fell 0.1 percent to 6,550.4
billion yen, while imports gained 6.2 percent to 3,717.8 billion yen.
Exports to China -- Japan's biggest trade partner - increased 3.7 percent to 6,643.5 billion
yen, and imports rose 2.8 percent to 9,079.3 billion yen.
In September alone, Japan posted a goods trade deficit of 958.3 billion yen, the biggest for
the month, marking the 27th straight month of red ink. The deficit increased 1.6 percent from a
year earlier due in part to robust imports of Apple Inc.'s newest iPhone models, the ministry said.
The figures were measured on a customs-cleared basis. (Kyodo)
October 23, 2014 6:48 am JST
Japan on course to host 13 million foreign visitors this year
TOKYO -- Japan is enjoying a tourism boom, with the number of foreign visitors rising at a rapid
clip and their voracious spending propping up the domestic economy.
Some 9.73 million foreign travelers visited Japan in the first nine months of this year, an
increase of 26% on the year, the Japan National Tourism Organization said on Wednesday.
The number of foreign visitors has likely crossed 10 million since September, and is on
course to approach 13 million before year's end. With Japan's economic recovery more gradual
than hoped, the lively shopping done by foreign tourists is playing an increasing role in Japan's
consumer spending.
Spending by foreigners reached 487.4 billion yen ($4.5 billion) for the April-June period,
marking a record for the second consecutive quarter, according to the Japan Tourism Agency.
The average individual tourist spent 143,942 yen, 6% higher than in the year-earlier period.
Duty-free sales totaled 42.4 billion yen at 46 stores from January to September, according to
the Japan Department Stores Association. That exceeds the 38.4 billion yen logged in all of 2013.
Department stores in big cities, in particular, enjoyed brisk sales. At Mitsukoshi's Ginza store in
Tokyo, sales of tax-exempt items accounted for 25% of sales in the first seven days of October,
which coincided with a Chinese national holiday.
Granvista Hotels & Resorts is renovating its Ginza Grand Hotel, anticipating 30% of
customers to be foreign visitors. Fujita Kanko, owner of the hotel chain Washington Hotels and
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TOKYO SKY TREE
Weekly News From Tokyo
DITP TOKYO (2013 April13 – April19)
20 Oct. 2014 ~ 24 Oct. 2014 (No.201442)
others, began building business hotels with larger rooms in 2013.
In September, confectionery maker Morinaga began decorating packages sold at Narita
Airport and elsewhere with illustrations evocative of Japan, depicting Mt. Fuji and five-story
pagodas. It also used the words "Made in Japan" to appeal to foreign visitors. (Nikkei)
October 23, 2014, 12:14 am
Supermarket Sept. sales down for 6th straight month
Sales at supermarkets in Japan in September fell 1 percent from a year earlier on a same-store
basis, down for the sixth consecutive month, an industry group said Tuesday.
Overall sales at 9,262 stores run by 60 companies stood at ¥1.01 trillion, according to the Japan
Chain Stores Association.
Food sales dropped 0.8 percent, the first fall in two months. Sales of beer and ice cream were
sluggish due to a fall in temperatures caused by bad weather.
Sales of tomatoes and lettuce declined as prices went up reflecting supply shortages, while
mushrooms and other food items used for hot pot dishes sold well.
Clothing sales fell 2.6 percent. Sales of underwear and men’s suits were weak. Sales of
home-related products were down 1 percent.
“The pace of recovery from the slump caused by the consumption tax hike in April has been
weak,” said Atsushi Inoue, a senior official of the association.
Sales in January-September sagged 0.3 percent from a year earlier on a same-store basis.
Overall sales came to ¥9.58 trillion. (Jiji Press)
October 24, 2014 2:00 am JST
Itochu to take stake in Vietnamese textile giant
HO CHI MINH CITY -- Trading house Itochu will invest in Vinatex, Vietnam's largest state-owned
textile company, acting ahead of a potential free trade agreement that could boost exports from
the country.
Itochu will soon acquire about 5% of the company's stock for over 1 billion yen ($9.25 million),
making it Japan's first leading nonfinancial company to
buy into a state-owned business here.
It plans to procure fiber and other materials locally,
as well as from Thailand and other neighboring
countries. It will then process these materials at Vinatex
facilities and export the finished product to the rest of the
world.
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TOKYO SKY TREE
Weekly News From Tokyo
DITP TOKYO (2013 April13 – April19)
20 Oct. 2014 ~ 24 Oct. 2014 (No.201442)
Vinatex, officially known as the Vietnam National Textile and Garment Group, operates some
200 factories around the country. About 30 of them sew garments for Itochu on contract.
Itochu currently trades with about 100 Vietnamese textile companies. It deals in everything
from the procurement of raw materials to sewing, and supplies suits, shirts and other products in
Japan, the U.S. and Europe. It is the largest Japanese player in the country's textile industry.
Vietnam is the fifth-largest garment exporter in the world. While labor costs here are higher
than in Bangladesh or Myanmar, the country's sophisticated infrastructure and distribution
network make it a competitive export base.
The country is also participating in the Trans-Pacific Partnership talks, which means tariffs to
the U.S. and Japan could be abolished if the regional free trade agreement comes into being.
Vietnam is extremely dependent on the Chinese economy, and 50-70% of materials used in
the textile industry are imported from China. The government here is now looking for ways to
curb the reliance, especially as territorial disputes in the South China Sea cool bilateral ties.
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