MAY 2 0 0 6
Vol 10 No. 42
In this Issue
JETRO NEWS
A publication of the Japan External
Trade Organization (JETRO) Manila
FOODEX Japan 2006 successfully concludes
page 01
Japanese Business Sentiment in East Asia
Improved Slightly in April
page 02
Turning Japanese 10 BIO-Search firms eye the
fast-growing LOHAS market
page 03
BICOL is IFEX 2006 Partner Region
page 04
JETRO MARKET
Building Conversions Spark Urban Renaissance
page 05
FAQ
What are the Procedure for Investing in Japan?
FOODEX JAPAN
2006 Successfully Concludes
The No. 1 Food & Beverage Trade Show in the Asia Pacific
FOODEX JAPAN 2006 / The 31st International Food &
Beverage Exhibition held at
Makuhari Messe, Japan,
closed its doors for this year’s
FOODEX 2006 on March 17,
2006.
This year's exhibition, has
drawn 2,475 exhibitors/
3,409 booths from 79
countries and regions.
FOODEX JAPAN is a once a
year opportunity for buyers
and sellers to meet, exchange
ideas and perform business
negotiations.
A special feature of this year's
exhibition is the FOOD FROM
JAPAN, which introduced new trends in Japanese food
and food culture. This special event included seminars
led by well-known industry professionals, and a
Japanese Food Export Promotion Corner.
The Japanese Exhibition Zone also featured the following
focus displays: Health, Organic & Natural Plaza, Tea &
Coffee Plaza and the Japanese Food Plaza. 1,351
Japanese exhibitors participated in the Japanese
Exhibition Zone representing most regions of Japan. A
large variety of Japanese foods and ingredients were
exhibited filling the needs of buyers from all over the
world. The International Exhibition Zone welcomed 2,058
exhibitors, including an increase in the number of Asian
exhibitors.
page 06
RP Exhibitors
El Coco Manufacturing has participated more than 10
times at the International Food Exhibitions in Japan
under the Department of Agriculture. At the FOODEX
Japan, they exhibited their sweetened and unsweetened
banana chips, rippled banana chips and cavendish
banana chips.
Nattural Quality Corp., a
100% Filipino owned corporation established in 1996,
introduced
a
unique
Filipino product, the
Philippines Traditional
Herbal Tea with green tea
and
calamansi.
The
product is a healthy
alternative to high sugar,
high fat, high calorie drinks
available in the supermarket shelves or offered by
coffee shop, and fast food
outlets.
Festive Foods International Inc., is recognized by the
European Union (EU), they have accreditation of the
Hazard Analysis and Critical Control Point (HACCP)
system and the Halal Seal. Festive Foods exhibited their
processed banana chips, nata de coco, sweet fruit
preserves and other marine products.
M. Kokubo Philippines Trading Company Inc.,
participated at FOODEX Japan to promote Filipino
products for the 2nd time. Arengga palm vinegar &
syrup, coffee beans, fresh cavendish banana and
pickled okra were the products brought for exhibit.
con’t. on pg. 02
NEWS
from pg 01
FOODEX Japan
Amley Food Corporation, a company whose plant is
situated in Misamis Oriental, is currently exporting their
premium quality dried mangoes to the United States,
Hong Kong and Singapore. Participating with the same
products at the FOODEX Japan is part of their
continuous thrust to improve and innovate and to enter
the Japanese Market.
Celebes Agricultural Corporation, established in 1981,
started as a manufacturer of wood products exporting
all its production in Japan, USA and Europe. Celebes
Exhibited their organic and conventional products in
FOODEX Japan such as desiccated coconut, coconut
chips, banana chips, coconut oil, and virgin coconut
oil.
AAMC Foods Corporation is a Philippine fruit and
vegetable export and processing company. It was in
year 2003 when they expanded their products lines and
included food preserves and dried seafoods. Fresh okra,
banana, mango, pineapple, vaccum fried banana, okra,
ampalaya, and string beans were the products they
introduced at the recent FOODEX Japan 2006.
KSK Food Products introduced the well-known corn
snack Boy Bawang (garlic flavored cornick) in the
Philippines. Having garnered numerous awards
for manufacturers, K S K
ensures that the products
are made from quality
corns and use only the
finest
ingredients to
ensure its freshness and
delicious crunchiness.
Guaranfood Manufacturing, was established in
1988. Their products are
made from locally grown
fruits that have a distinctive unique flavor that you
can only find in the
P h i l i p p i n e s .
Guaranfoods, introduced
their banana, green
mango, carrot, tamarind
sauces,
and
salad
dressings.
Prime Fruits International
Inc. participated in the
FOODEX Japan for the
2nd time this year.
Products they brought to
the said exhibit was their
all natural banana chips,
acidified nata de coco and
fresh cavendish bananas.
See’s International Food
Mfg., Corporation, has
almost 15 years of
experience in the export
industry. Taking part in
international food exhibitions such as the recent
DATELINE
FOODEX Japan is one way of introducing Philippine
products such as their banana chips and dried fruit
cocktail.
Frescano Food International Inc., a first timer in FOODEX
introduced their Premium Frozen Foods such as
milkfish, fruit cocktail, mango halves, cooked
Philippine octopus and cooked frozen milkfish. Their
products boast of using the latest freezing technology
from Europe with high speed cooking with controlled
climate and blast freezing immediately after cooking,
which eliminates the growth of bacteria and stops
evaporation.
Number of Visitors
On the First day alone, 22,933 visitors/buyers came to
the International Food Exhibit. Mr. Nakagawa,
Minister of Agriculture, Forestry and Fisheries of Japan
came to visit on the 2nd day, wherein the number of
visitors had increased to 26,661.
With the successful publicity, the total number of
visitors during the 4-day exhibition reached 95,772,
averaging at 23,943 per day.
Japanese Business
Sentiment in East Asia
Improved Slightly in April
JETRO's monthly survey of Japanese companies and
affiliates operating in 12 countries/regions of East Asia
revealed that overall current business sentiment
improved slightly in both the ASEAN region and
Northeast Asia in April; sentiment among firms in
Mainland China continued on the gradual rise that
started at the end of 2005.
JETRO polls the companies to measure year-on-year
changes, expressed as diffusion indices, in their
business outlooks for the current month and the next
two to three months going forward.
Overall current business sentiment for the five ASEAN
countries included in the survey improved 3.9 points
(the index, however, remained in negative territory in
April). By country, indices for Malaysia, Singapore and
Thailand improved over the previous month, on the back
of strong demand for electric/electronics and transport
equipment in both domestic and overseas markets. The
index for the Philippines improved slightly (although it
also remained in negative territory in April), led by
improved performance in the country's electric/electronics equipment sector. The index for Indonesia-where
sentiment has been depressed among firms in both
manufacturing and non-manufacturing sectors-remained in negative territory for the sixth straight month
in April, the survey revealed.
Overall forward business sentiment for the ASEAN
region improved 4.0 points in this month's survey; the
index for Indonesia, however, remained in negative
territory in April.
con’t. on pg 03
May 2006
page 02
N ENW
E SW S
10 BIO-Search firms eye the
fast-growing LOHAS market
The Philippines is looking into Japan’s Lifestyles of Health
and Sustainability (LOHAS) market to boost the country’s
organic and natural product exports.
Food supplements manufacturers Ecarma Health Options,
Green Leaf Herbals, Inc., Herbcare Corporation, Nattural
Quality Corporation, and Pascual Laboratories; virgin
coconut oil (VCO)-based food supplements distributors Elixirs Pacific International, Corp., Prosource Int’l. Inc., and
Viviendo Philippines, Inc.; and, personal care product makers Rainiers R & D Inst., Inc., and RCC Amazing Touch Int’l,
Inc. met with Nobuo Iwasawa, a Japanese health and wellness
expert, to present their respective credentials and manufacturing capabilities to supply the growing LOHAS market.
These companies are also participating in BIO-Search, a
health and wellness show organized by the Center for
International Trade Expositions and Missions (CITEM), an
export promotions agency of the Department of Trade and
Industry.
RP – a LOHAS prospect for Japan and the world Iwasawa, -founder, president & CEO of Health & Business Magazine
Co. Ltd. -- was appointed by the ASEAN Japan Centre (AJC)
to evaluate the Filipino herbal and organic food supplement production and manufacturing companies. During
his three-day visit, Iwasawa tirelessly toured each
company’s factories for further assessment of each
candidate’s current Good Manufacturing Practices (cGMP)
and quality compliance certification.
The three companies who will pass Iwasawa’s evaluation
will also be granted an opportunity to exhibit in the
upcoming 1st ASEAN Health and Wellness Exhibition to be
held at the AJC Permanent Exhibition Hall in Tokyo, Japan
on 17 May to 31 July 2006.
Japan’s LOHAS movement LOHAS, or the Lifestyles of
Health and Sustainability (LOHAS) movement, have dictated Japan’s fast growing health conscious public. An integrated market for goods (including health care and natural
cosmetics) and services that primarily appeals to consumers’ environmental and social awareness and responsibility, LOHAS includes, among other things, advocacy for
Healthy Lifestyle Attitudes; Renewable Power/Energy;
Alternative Transportation (Hybrid Vehicles); Energy-Efficient Electronics & Appliances, aside from Natural and
Organic Foods and Beverages; Personal Care Products (Skin
Care, Hair Care, Cosmetics); Vitamins, Minerals, and
Dietary Supplements/Alternative Healthcare.
A recent study revealed that 29% of Japan’s population is
into LOHAS. Its primary consumers are in their 20s to 50s,
strongly LOHAS-inclined, and consists of young families
with children, educated women, and those who are in their
early retirement age. They are described as shoppers who
DAT E LI N E
Overall current business sentiment for China and North
Asia improved 3.3 points over the previous month in April.
Driven by strong domestic demand, the overall index for
mainland China rose 10.7 points, with sentiment improving in all surveyed locations in the region. Although the
index for the Republic of Korea (ROK) slipped 11.9 points in
April, sentiment among firms in the country continued
strong; the index for Taiwan dipped into negative territory,
falling 3.3 points, against a backdrop of stagnant auto sales
in the domestic market.
Business Sentiment (DI index) of Japanese Companies in ASEAN
Thailand
50.0
40.0
30.0
20.0
10.0
0.0
-10.0
-20.0
-30.0
-40.0
-50.0
-60.0
-70.0
-80.0
Singapore
Malaysia
Indonesia
Philippines
June 2001
July
August
Septembe
October
November
December
January
February
March
April
May
June
July
August
Septembe
October
November
December
January
February
March
April
May
June
July
August
Septembe
October
November
December
January
February
March
April
May
June
July
August
Septembe
October
November
December
January
February
March
April
May
June
July
August
Septembe
October
November
December
January
February
March
April
April
Turning Japanese
from pg 02 BUSINESS SENTIMENT
Overall forward business sentiment for China and North
Asia improved only slightly in April; business confidence
in China, however, remained buoyant, while sentiment in
ROK and Taiwan declined.
A total of 695 replies were received in ASEAN countries
(109 in Indonesia, 110 in Malaysia, 182 in the Philippines,
208 in Singapore and 86 in Thailand), 221 in China (45 in the
North, 69 in the Northeast, 66 in the East and 41 in the
South); 135 in Hong Kong; 35 in the ROK and 118 in Taiwan.
Business sentiment among Japanese companies operating
in Asia rose in April, though by a slight margin, for ASEAN
as a whole. In Indonesia, however, the deterioration of business sentiment continued. Business sentiment among Japanese companies in China has continued on a moderate upward trend since the end of last year. The outlook for the
Republic of Korea had been favorable, but it has begun to
take a somewhat negative turn due to the effects of the rise
in the value of the won.
“put premium on information, especially about products
and services, attuned to trends and brand images, and considerably goes for quality.
Iwasawa, a noted LOHAS authority who not only wrote
extensive articles advocating such conscientious living, but
also a distinguished authority and active speaker at various
health and nutrition conferences, disclosed that the Japanese nutrition market alone has reached US$29,000 million,
or 3,200 billion Japanese yen in sales in 2004. This market
includes dietary supplements and functional foods, and is
only one of the components of the LOHAS movement.
If Japan has LOHAS, United States has Cultural Creatives
Japan’s LOHAS movement has a counterpart in the United
States called Cultural Creatives.
con’t. on pg 06
May 2006
page
03
NEWS
BICOL is IFEX 2006
Partner Region
The Bicol Peninsula is a land of unraveling wonders. The
place does not only offer charm and enchantment visibly
familiar through the majestic Mayon; it also offers
nostalgia, like the rushing Bicol Express, both the trains
and the stations now in urgent need of rehabilitation, but
nonetheless commemorated by the spicy, fiery regional
delicacy named after it.
Bicol Express can be prepared ultra spicy hot as the
Bicolanos love their chilies, after which there is indeed a
mad rush for several gulps of water. There is also the
appetite-arousing laing, a taro and coconut milk
concoction which can be cooked equally tongue-biting,
and not to forget, food as gift in the form of the very much
chosen must-take-home pili nut delicacies. There is
simply an overwhelming wealth of images to delight in
and store lovingly.
On 12 to 14 May, the Bicol Peninsula is the partner region
to be showcased at the International Food Exhibition
(IFEX) Philippines in the World Trade Center Metro
Manila on Roxas Boulevard, Pasay City. For the foreign
and local buyers and the general public who await this
annual food trade show mounted for the sector by the
Department of Trade and Industry (DTI) through its
export promotions agency, the Center for International
Expositions and Missions (CITEM), the lores and lures of
the Bicol Peninsula are expected to fascinate and add to
the flavor of the food products to be highlighted and
sampled.
Immediately after IFEX 2005 and having selected the Bicol
Peninsula, the PRP Team began the preliminary
evaluation of the companies recommended by the
provincial and regional DTI offices. The DTI Regional
Operations Group (ROG), Packaging Research and
Development Center of the Philippines-Department of
Science and Technology (DOST), Philippine Trade
Training Center (PTTC), and San
Miguel Packaging Products (SMPP)
actively participate in this yearlong
activity intended to upgrade and
update regional food preparation,
processing, and packaging.
Going into its sixth year, the PRP is
highly instrumental in helping
inculcate the principles of Good
Manufacturing Practices (GMP) and
the HACCP among the small and
medium enterprises which are
participating in the project. A total of
26 companies were finally selected:
From Albay come Jarahfra Food and
Beverages, Dy’s Bakeshop, Albay
Pilinut Candy, Herbal Tea Enterprises,
Ben’s Baker, Mayon Pilinut Candies,
Star Food Products, Lolo Ponching’s
Food Products, FD Gonzales Food Product, and Llomar
Fod Enterprises.
DATE LI N E
Sorsogon is represented by Banaag/ABG Food Products, Ding
and Adeth Pili Sweets, Edgeline’s Pili Candies, J.C. Pili
Center, J Emmanuel Pastries, Leslie Pili Products, Joenky
Food Product, Tia Bening’s Pili Candies and Handicraft, and
Sorsogon Foods Enterprises. Cely’s Pilinut Cand comes from
Naga City as well as Sweetven Enterprise, while Kiddy
Industries and Matacla Multipurpose Cooperative hail from
Camarines Sur. Kuya Henry and Queen’s Delight both come
from Camarines Norte. Morning Joy Seafoods Processing
represents the wealth of the seas around Masbate with its
bottled crabmeat. It also has the biggest and most extensive
operations among the participants.
There is a particular strong challenge for the PRP participants
to start with the right foot forward. The PRP Special Showcase
will sit within the CERTIFIED ZONE, an IFEX innovation for
2006. Here, IFEX participants, who have received
international certifications for kosher, halal, and organic and
passed the Hazard Analysis Critical Control Points (HACCP)
food safety standards level, are provided a special showcase
for their certified products. The Certified Zone in IFEX 2006 is
an aggressive bid to declare Philippine compliance to the
growing global demand for flavor-filed, innovative but safe
Filipino foods.
While the Partner Region Program has become a major
component of IFEX Philippines in extending product and
labeling development and marketing promotions assistance
to regional companies, it has also evolved to be an effective
avenue for inculcating the principles of global food safety
standards in micro-, small and medium enterprises.
The sorties conducted in the Bicol Peninsula in the course of
implementing the IFEX 2006 Partner Region Program
witnessed the intensive drilling the participants received
regarding Good Housekeeping Practices and HACCP
principles. While instructions were mostly basic in nature,
the participants had been ushered into the right global safety
standards by which to structure their future plant expansions,
should they decide to take the course to exports.
For more details, please contact the Agrimarine Division of
CITEM at (63 2) 831.1282 or (63 2) 831.2201 ext. 204 and 238.or
fax (63 2) 832.3965 or (63 2) 834.0177 or email
agrimarine@citem.com.ph or check out website
www.citem.com.ph or www.ifexphilippines.com.
May 2006
page
04
N EMWA SR K E T
SERIES
Building Conversions
Spark Urban Renaissance
The business of converting building for
new uses is turning into a growing market in Japan. An increasing number of
companies in
the
real
estate,
construction and condominium fields
have entered the market, as have a
growing number of foreign firms,
including investment funds. Demand for building
conversion is expected to grow not only in major cities, but
also in less populated areas.
Recycling Office Buildings
80-Year-Old Building Converted into Restaurant
Major construction companies are also starting to become
involved with conversions. Taisei Corporation was among
the first, beginning with its American subsidiary, which
converted six buildings in the United States. The Standard
Hotel, which opened in downtown Los Angeles in 2002 after
being converted from a 12-story office building, received
critical acclaim and won two architectural awards. In 2003,
taisei produced an English-language brochure on adaptive
reuse of buildings in Japan for foreign investors eying the
market.
Building conversion is the renovation of an existing structure
to serve a puporse different from which it was originally
designed for. In the West, building conversion has a long
story. For example, the original Orday railway station in
Paris was converted into the Musee d’ Orsay art museum.
The Gasometer-town in Vienna, comprising housing
complexes office buildings and shopping centers, was
originally four gas tanks constructed in the 19th century.
In the prestigious Ginza district of Tokyo, Taisei converted
an office building erected in 1920 into a restaurant. Kumiko
Kamakami of the company’s Architectural Design group,
explained: “ The earthquake resistance, and changes such as
a vaulted ceiling to reduce weight load. We are working the
development of technologies for other kinds conversions.”
In Japan, there are examples of warehouses being converted
into shops, and schools into lodgings. However, the idea of
turning building-conversion into a business did not catch on
until recently. Until 2000, there were very few examples of
the office-to-housing conversion model. This changed in 2003,
when several concurrent urban redevelopment products were
completed in Tokyo, leading to concerns about a glut of new
office in central Tokyo sent waves of fear throughout the
market’s supply side. This is when attraction was refocused
on the possibility of converting older office building into
residences.
The demand for building conversion is expected to increase,
including in no-metropolitan areas, especially now that
building owners, real estate dealers and construction
companies clearly understand that adaptive reuse is an
effective way to renovate aging buildings and ad to their
value.
Until recently, old office buildings that had
lost
competitiveness were torn down and rebuilt for the same
use. However, reuse of an existing structure is far more
economical because there are no demolition costs, offering
owner of smaller buildings a
chance to regain
competitiveness with comparatively less investment. At the
same time, the reuse of buildings reduces waste and CO2
emissions generated during construction.
Complying with Regulations
Many companies in the real estate and construction
industries are now entering the conversion industry.
This led to the final option: converting the building for
another use. The major problem with this was the fact that
converting an office building for housing involves many
regulations. Office building are classified as general
buildings, but housing complexes are considered special
buildings subject to more stringent regulations. For example,
building and fire codes require a window-to-floor ratio of at
least 1:7, ans at least two evacuation routes. In some cases,
local government apply additional regulations.
DATE LI N E
Foreign Companies Enter the Market
A building that housed a technical school in downtown
Fukuoka for 20 years was converted into a commercial
property by an investment fund and opened in 2006. Also, a
former school in Fukuoka will reopen as a commercial
property in November 2006. a growing number of
investment funds are being established to facilitate building
conversions, using methods that involved the securitization
of real estate. Foreign companies are strengthening their
presence in this area. However, because Japan’s legal system
and modes of construction differ from those of the west, it is
difficult for foreign companies to initiate building
conversions directly, so they are accessing the market
through funds. Conversely, foreign companies have
advantages over their Japanese counterparts in terms of
greater experience and expertise in both the conversion
business and the securitization of real estate.
There is still much room for new entrants in Japan’s nascent
building-conversion market. In view of the favorable
prospects, foreign corporations are expected to become
increasingly involved in the market, working closely with
Japanese partners by providing consulting and other
value-added know-how.
May 2006
page
05
F A QN sE W S
(In this section, we will be including frequently asked questions at
the JETRO business library and answers to such queries)
What are the procedures for
Investing in Japan?
Procedure for establishing a company
TYPES OF OPERATION IN JAPAN
Foreign companies generally engage in business operations
in Japan by establishing a branch office, subsidiary company
or Yugensekinin Jigyo kumiai (limited liability partnership).
Representative office. Representative offices are established
as locations for carrying out preparatory and supplemental
tasks aimed at enabling foreign companies to engage in fullscale business operations in Japan. These offices may conduct
market surveys, collect information, purchase goods, and
implement publicity/advertising efforts, but hey are not
permitted to engage in sales activities. The establishment of
representative offices does not require registration. A
representative office cannot ordinarily open bank accounts or
lease real estate in its own name, so agreements for such
purposes must instead be signed by the head office of the
foreign company or the representative at the representative
office in an individual capacity.
Branch office. The simplest means for a foreign company to
establish a base for business operations in Japan is to set up a
branch office. The branch office can begin business operations
as soon as an office location is secured, the branch office
representative determined, and the necessary information
registered. A Japanese branch office is a business location that
conducts business activities in Japan as determined by a duly
authorized organ of the foreign company, and ordinarily is
not expected to engage in independent decision making.
A branch office does not have its own corporate status, and
instead is legally deemed encompassed within the corporate
status of the foreign company. Consequently, the foreign
company is ultimately responsible for all debts and credits
generated by the activities of its Japanese branch office. A
Japanese branch office may open bank accounts and lease real
estate in its own name.
Subsidiary company. A foreign company establishing a
subsidiary company in Japan must choose o establish the
subsidiary company as either a joint-stock corporation
(Kabushiki-Kaisha) or a limited liability company (LLC: a
new type of corporation called “Godo-Kaisha”) after the new
Corporate enters effect in around May 2006. (The current law
for the limited liability company (Yugen-Kaisha) will be
abolished and will not be granted.) All types of subsidiary
companies can be established by completing the required
procedures stipulated by law, then registering the corporation.
A subsidiary is a separate corporation from the foreign
company, so the foreign company will only assume
responsibility as an equity participant stipulated by law
concerning the debts and credits pertaining to the subsidiary.
from pg 03
TURNING JAPANESE
The term, culled by sociologist Paul Ray together with
psychologist Sherry Anderson, revealed that this is the
newest American subculture that is fast gaining ground.
It amounts to $228.9 billion and growing, and “includes
over 50 million people who care a lot about the
environment, women's
rights,
spiritual and
psychological growth, a better future for all - rich and
poor.”
Iwasawa also conducted a half-day seminar on LOHAS
on the third day of his visit (13 March). The event has
drawn local natural and herbal product exporters and
exposed them to various opportunities in the Japan
market.
CITEM executive director Felicitas Agoncillo-Reyes is
confident that Philippines can be one of the top major
suppliers of LOHAS-inspired products. “Informing our
local manufacturers, specifically the health and wellness
sector about LOHAS,” she believes, “is a key strategy
towards product diversification and export market base
expansion.”
Japan External Trade Organization
JETRO Manila
44th Floor Philamlife Tower
8767 Paseo de Roxas, Makati City
1226 Philippines
Tel: (+63 2) 892.43.76
Fax: (+63 2) 818.74.90
E-mail: jetroinfo@jetro.com.ph
BSCP email: jetrobscp@jetro.com.ph
www.jetro.go.jp/philippines
Business Library hours: Mondays to Fridays
9:00 A.M. to 12:00 noon & 1:30 P.M. to 5:00 P.M.
DATELINE
is a
monthly newsletter of JETRO Manila
Other methods besides the establishment of a subsidiary by
which a foreign company may invest in Japan are: creation of
a joint venture company with a Japanese company or an
investment company as partner, or equity participation in a
Japanese company.
Limited liability partnership (LLP). It is also possible to do
business by using a Yugensekinin Jigyo Kumiai. This type of
entity, the Japanese version of the limited liability partnership
(LLP), is not a corporation, but a partnership formed only by
equity participants, who have limited liability.
DAT E LI N E
May 2006
page
06