Pernille Rudlin - Rudlin Consulting

About Pernille Rudlin

Pernille Rudlin was brought up partly in Japan and partly in the UK. She is fluent in Japanese, and lived in Japan for 9 years.

She spent nearly a decade at Mitsubishi Corporation working in their London operations and Tokyo headquarters in sales and marketing and corporate planning and also including a stint in their International Human Resource Development Office.

More recently she had a global senior role as Director of External Relations, International Business, at Fujitsu, the leading Japanese information and communication technology company and the biggest Japanese employer in the UK, focusing on ensuring the company’s corporate messages in Japan reach the world outside.

Pernille Rudlin holds a B.A. with honours from Oxford University in Modern History and Economics and an M.B.A. from INSEAD and she is the author of several books and articles on cross cultural communications and business.

Since starting Japan Intercultural Consulting’s operations in Europe in 2004, Pernille has conducted seminars for Japanese and European companies in Belgium, Germany, Italy, Japan, the Netherlands, Switzerland, UAE, the UK and the USA, on Japanese cultural topics, post merger integration and on working with different European cultures.

Pernille is a non-executive director of Japan House London, an Associate of the Centre for Japanese Studies at the University of East Anglia and she is also a trustee of the Japan Society of the UK.

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Here are my most recent posts

Survey of Japanese companies in Europe

Normally by this stage of the year, JETRO (the Japan External Trade Organization) would have issued the English translation of the top level findings of their annual surveys of Japanese companies in Europe (and internationally), but this does not seem to have happened this year. What is happening in Ukraine and the impact on Europe may well make any conclusions meaningless, but here, for what they’re worth, are the points which stood out for us.

Overall trends

More Japanese companies were forecasting profitability for 2021/2 than the previous year (65.7% vs 48.5%) but this is not yet back up to the pre-pandemic levels of profitability. The only countries where more than half of the Japanese companies there expected to see improved profitability – even compared to pre-pandemic levels – were Slovakia, Italy, Portugal and Sweden. Less than half of the Japanese companies in the UK, Czech Republic, Belgium, Spain, Denmark or Romania expected to see improved profitability in 2021 compared to 2019 or 2020.

This can be explained by the fact that in terms of sectors, ceramics and minerals, rubber, foods, machinery and wholesale were expecting a recovery, but banking, automotive, electronics and trading companies were all expecting conditions to worsen – sectors which are particularly active in the UK, Czech Republic and Belgium.

Many companies said that they were reviewing their supply chains and purchasing. Procurement costs and lead times have become new issues for manufacturers. UK based Japanese manufacturers seemed more pessimistic than in other countries in their forecasts, with nearly a quarter expecting conditions to worsen. Most Japanese companies were looking to procure more from central and Eastern Europe and between 14 to 28% were looking to reduce their procurement from the UK, dependin g on location and sector.

EU-Japan Economic Partnership Agreement

Nearly 50% of the respondents to the survey said they were using the EU Japan EPA for their imports into the EU – this was 80% for Japanese companies in Hungary, 65% Czech Republic, 64.3% Belgium, 53.3% Poland, 53.8% Netherlands, 48.4% Germany. This would probably reflects imports of automotive components into the EU from Japan, for at least the first 4.

EU UK TCA

25% of companies who are involved in UK-EU trade were using the TCA for exports from the UK to the EU and 10.4% were using it for exports from the EU to the UK. Around 50% of Japanese companies in the UK were using the UK Japan EPA to import from Japan to the UK and 39.1% were using it to export from the UK to Japan. 39.1% of Japanese companies in the UK were procuring from Japan, a 3.6% increase on the previous year.

More than 40% of Japanese companies in the region said that they did not know if the TCA had an impact on them or not and were concerned about the burdens of coordinating with suppliers and partners and the cost of making changes and self regulating.

Top issues

As in pre-pandemic years, employee recruitment and retention and high labour costs continue to be top concerns, with logistics and procurement costs also climbing up the list of priorities.

Brexit

Brexit has continued to be the top concern of Japanese companies in the UK, but less concerning than in 2020. Nonetheless, nearly 50% of Japanese companies in the UK see Brexit as having had a negative impact, two thirds if looking at manufacturers alone. Nearly half of Japanese manufacturers in the UK were experiencing issues with exporting to the EU from the UK and around 35% were experiencing problems with importing from the EU to the UK.

The second most concerning issue for Japanese companies in the UK is the pandemic, with employee recruitment and retention moving up from 5th to 3rd place, customs clearance still in 4th place (but a growing concern) and labour costs and GDPR at about the same level as the previous year.

Over half of Japanese companies in the UK were concerned about any deviation by the UK from GDPR, and 44% about having to deal with a UK CA mark in addition to the CE mark. 42% were worried about the movement of people between the UK and the EU – more so in the services sector than manufacturing. A third or so were also concerned about the REACH regulations and regulations on the movement of capital.

Unsurprisingly, there was an increased proportion of domestic UK sales by Japanese companies in the UK and a corresponding fall in sales to the EU.

Sales prospects

Poland was cited as the most promising sales destination for the third year running, with Germany second for the third year running too. Czech Republic, Hungary and Turkey are next most popular, then France and then Russia, with Slovakia and Spain also in the top 10. Overall, even including the UK, most Japanese companies were expecting to expand in the region in 2021/22. How the events of 2022 will affect this remains to be seen.

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Top 30 Japanese employers in Europe, Middle East and Africa – 2021

The total number of people employed by the 30 largest Japanese companies in Europe, Middle East and Africa (EMEA) has grown over the past year – despite the pandemic – but only by 3% overall. The top 30 employ around 557,000 people between them in the EMEA region, representing around 14% of their total global workforce. The average masks a wide range, from only 6% of the workforce (Itochu, TDK) through to 45% (Nippon Sheet Glass/Pilkington).

The growers

The company group which grew the most over 2020-21 was Hitachi (by 82%), now the fourth biggest Japanese employer in Europe, with over 32,000 employees, due to their acquisition of ABB Power Grids, now Hitachi Energy. The Hitachi group have almost tripled in size in Europe since 2014/5, despite various divestments, due not only to Hitachi Energy but also the growth of Hitachi Rail.

We estimate Outsourcing (does pretty much what it ‘says on the tin‘) has also grown considerably, but as they do not publish employee figures by region in their annual report it’s hard to be accurate. It acquired CPL, Otto Works, Orizon and other recruitment and staffing companies over the past few years, and is now the 11th biggest Japanese employer in the region. Their rival Recruit also grew considerably, thanks to their acquisition of Indeed in 2019.

Toyota Tsusho, the trading company within the Toyota group, has also grown both in the past year (21%) and over the past few years (52%), since the acquisition of French company CFAO in 2016 and consequent expansion in Africa. It is now the sixth largest Japanese employer in EMEA.

The shrinkers

Fujitsu shrank the most from 2020-2021, by 20%, but this was largely to do with India being removed from what was the EMIEA region. Since 2014/5 Fujitsu has restructured, with fewer people employed in Western Europe and more more employees added in global delivery centres in Eastern Europe.

Sony has also been through restructuring in the region, and now has fewer than 10,000 employees, compared to over 13,000 six years’ ago. Other companies that have shrunk both over the past year and over the past six years are Ricoh, Nissan and Honda. Honda will no doubt drop out of the Top 30 for 2021/22 once the closure of the Swindon UK plant shows in their annual report.

The Top 3

The two largest Japanese employers in the region, Sumitomo Electric Industries and Yazaki, have dominated throughout the past six years – both manufacture labour intensive wire harnesses, with factories in North Africa and Eastern Europe. SEI grew by a third since 2014/5 and Yazaki has cut back in the past few years and has more or less the same number of employees as six years ago.

NTT and its subsidiary NTT Data overtook Fujitsu a couple of years’ ago and are now the third largest employer in the region, having more than doubled in size thanks to the acquisitions of Dimension Data, Keane and Dell Services in recent years.

The new entrant

The new entrant into the Top 30 for 2021 was trading company Mitsubishi Corporation, who expanded following their acquisition of Dutch energy company ENECO in 2019. They displaced bathroom fittings company LIXIL whose employee numbers decreased after their divestment of Italian company Permasteelisa.

FREE PDF DOWNLOAD OF TOP 30 JAPANESE EMPLOYERS IN EMEA 2021

France as a global brand manager

Nippon Paint Holding’s November 2021 acquisition of French company Cromology initially caused me some confusion. The acquisition was done via Nippon Paint’s consolidated subsidiary, the Australia based DuluxGroup and their newly established UK based company DGL International UK Ltd. To most British people, Dulux is a British consumer brand, famous for using an Old English Sheepdog in its marketing since the 1960s. Because this breed of sheepdog has been used in the Dulux commercials and on its paint tins for so long, it is even known as the Dulux Dog.

It turns out that the Dulux Dog was also used for advertising Dulux paints in Australia, but Dulux in the UK and Dulux in Australia are now owned by separate companies. Dulux brand paints first appeared in the UK the 1930s, developed by the British company ICI, with the brand name being a combination of “Durable” and “Luxury”. By 1986, ICI Australia had 100% ownership of Dulux Australia but ICI plc then sold off ICI Australia in 1997.

In 2008 the Dutch company AkzoNobel acquired ICI, whereas the DuluxGroup listed on the Australian stock market as an independent company in 2010 and acquired various Australian, British and French paint companies and brands since then.

Cromology is Europe’s fourth largest architectural paints manufacturer with 20 paint brands that it sells across Italy, Spain, Portugal and France. Nippon Paint is apparently seeing its acquisition as a way of expanding its various brands, including Dulux, into Central and Eastern Europe too.

Up until recently France has not been as big a base for Japanese companies to expand regionally as the UK or Germany. But this acquisition by Nippon Paint and also the acquisition of French company CFAO by Toyota Tsusho and French multinational Leroy-Somer by Nidec in 2016 makes me wonder whether this might be changing.

CFAO is rather similar to Japan’s trading companies, with a history stretching back nearly 170 years, and has a substantial presence in 39 African countries, including what is sometimes known as Francophone Africa, as well as other former French colonies such as Vietnam. It has over 21,000 employees worldwide and as well as distributing Toyota vehicles, it also has brewing, pharmaceutical, retail and car servicing businesses

France has a long experience of managing famous brands globally, but as I have mentioned before in this column, multinationals are often reluctant to invest in a country that is costly to do business in, with poor labour relations and a complex bureaucracy. French President Emmanuel Macron has been trying to reform labour laws, extend the retirement age and make pensions less costly, but this has been stalled by the pandemic, and the need to maintain his popularity until he seeks a second term as President in April next year. It will not be until later in 2022 that we will see if France is in the mood to redecorate its house.

This article was originally published in Japanese in the Teikoku Databank News on 8th December 2021

Japan’s less equal companies

I often cite in my seminars that one obvious sign of the ethos gap between Japanese listed companies and the top 350 US companies is that Japanese presidents generally earn a multiple of 10-20 of the average salary in their companies, whereas the multiple for American CEOs is 350 or so.

There are exceptions of course, but even the board directors of the company at the top of Toyo Keizai’s income gap ranking (Toshin) earn an average of just under 60 times the average salary in the company. Many of the other companies at the top of Toyo Keizai’s rankings have non-Japanese executive directors, who are usually paid closer to American levels, such as Takeda Pharma (#3), SoftBank (#5) but there are other companies whose executives are all Japanese, such as Toyota (#6), JT (#15), Itochu (#16), Horiba (#17) and Canon (#20). Even so, only the top 10 have multiples of over 30, and only the top 25 have multiples of over 20. So the ethos gap is still holds.

Impact of Brexit on Japanese companies in the UK, 6 months on

(This article was first published in Japanese in the Teikoku Databank News in July 2021)

It has been six months since the UK left the EU and the transition period ended. According to my research and also a recent survey compiled by METI and MUFJ Research, the impact on Japanese companies in the UK has not been as severe as many were expecting.

This is partly because Japanese companies have been thorough in their preparations for a worst-case scenario over the five years since the 2016 referendum. The METI survey points out that larger (over Y10bn/$90m revenue companies, which is around 60% of the Japanese companies in the UK) are more positive about further expansion in the UK than smaller ones. They have had the resources and the networks to stockpile, set up logistics and warehousing on the continent and bear the costs of increased paperwork at the customs borders. They still see the UK as an important market and a useful base for regional coordination across Europe, Middle East and Africa.

Even amongst the larger companies, however, there is some diversion in views. The METI survey summarises the Japanese automotive companies as viewing the outlook for the UK market as bleak whereas chemicals, pharmaceuticals, foods and electrical machinery manufacturers are more positive. This diversion is clear in the employee totals – Nissan has 11% fewer employees year ending 2020 compared to a year previously. Honda is closing its UK plant in July and its employee numbers were 14% down in the year ending 2020 compared to the year before. Other double digit falls in UK employee numbers were Nomura and Konica Minolta.

It is becoming increasingly difficult to be accurate about employee trends, however, as one impact of Brexit has been that some of the larger companies such as Sony and Panasonic have moved their incorporated European subsidiaries to the Netherlands and Germany. The UK operations are now branches, so do not have to file their full accounts, including employee numbers, with Companies House.

Many of the financial services companies such as Mizuho and MUFG were branches of Japan or a European subsidiary anyway, and several others have moved to this model, as well as opened up subsidiaries on the continent, to ensure they are still approved to offer financial services in the EU. The EU has indicated it may put further pressure on financial services companies to move decision making and client facing personnel to the EU.

The UK is increasingly a services sector economy, and this shows in the Japanese companies where employment is growing – NTT, who have moved their global headquarters to London and Outsourcing, who continue to acquire recruitment companies across Europe.

According to METI’s survey, the reasons for choosing to continue to expand in the UK were the ability to use English, the presence of other multinationals and a transparent legal system. It would seem that the UK is still going to be the base for coordinating an increasingly dispersed network of people and businesses across the region.

What needs to change for Japanese companies to adopt hybrid working

The UK government allowed companies to encourage their staff to return to work from mid-July 2021. There are conflicting views in government, however, about whether flexible working should be the default from now on. Some worry that a permanent reduction in commuting will hit those businesses which rely on commuters for income, such as the train companies, sandwich shops, and office landlords.

British employees have been able to request flexible working since 2003. I used to work from home 2 or 3 days a week 10 years’ ago. My team was global, so most of them were based in other countries. Our team meetings were via teleconferencing, which I preferred to do from home than having to commute 1.5 hours into the office to start the call at 8:00am. I still found it important to be in the office at least two if not three days’ a week, however. I needed to interact with my peers, both for gossip on office politics and in order to be creative, to swap ideas and insights.

A survey by the Institute of Directors shows that 63% of UK business leaders are planning to shift their workforce towards hybrid working – asking employees to work from home anywhere between 1 to 4 days a week.

British employers are of course concerned about the impact on mental and physical health, data security and productivity that remote working might have. The latter seems to be even more of a concern for Japanese employers. A Lenovo Japan survey shows that 40% Japanese employers think that working from home will reduce productivity, compared to only 11-15% of European employers.

I suspect this is because Japanese employers are used to the collaborative, co-located way of working where employees can immediately turn to their bosses or colleagues for support or to exchange ideas.

European teams where there is a lot of creative work also need to be co located. If they have to work remotely, an investment needs to be made in advance in team building events, to develop strong bonds of trust between team members so they can communicate easily with each other.

Boston Consulting Group recommends such “creative collaborators” should be in the office 50-60% of the time. Other categories they propose include those who require focus without too many interruptions, for example people working in accounts. This group could work remotely 50-80% of the time. Those whose work follows defined processes and patterns, so do not need much support, can work almost entirely from home. And of course there is the group who have to be physically present to do their jobs, in factories or physically interacting with customers, so cannot work remotely.

If Japanese companies adopt these categories to enable a hybrid approach to flexible working, they will have to adopt what in Japan is being called a “job gata system”, where the job scope, place of work and hours of work are clearly laid out in a contract. Insisting on the same working conditions for all employees, regardless of job content, will not be possible in this new style of work.

This article by Pernille Rudlin was first published in Japanese in the Teikoku News, 9th June 2021

Top 30 Japanese Employers in the Netherlands 2021

There’s no doubt the Netherlands has done well from Brexit in terms of Japanese investment into Europe. Its strong services sector has made it a useful alternative regional coordination hub to London and there is a longstanding thriving Japanese community in the Amsterdam area. Both the numbers of Japanese nationals living in the Netherlands and the numbers of Japanese companies in the Netherlands have shot up the past few years, in contrast to a clear decline in Japanese companies in the UK, and a rather more bumpy but downward trend in Japanese nationals in the UK. There have also been some significant acquisitions of Dutch companies by Japanese companies since 2016.

The number of Japanese companies in Germany, the largest host in Europe, has also grown steadily over the past few years, making the sudden rise in Japanese companies in the Netherlands and Italy in the past two years look somewhat anomalous. The Ministry of Foreign Affairs (MoFA) does not explain what caused this sudden leap but they are sticking to their guns with the recent release of the data for 2020.

Cross referencing the MoFA data with the Toyo Keizai directory and our own desk research, we think the sudden jump in the number of Japanese companies in the Netherlands and Italy are probably to do with the recent acquisitions – perhaps Outsourcing acquiring Netherlands headquartered Otto Work Force in 2018, supplemented by Mitsubishi Corporation acquiring Dutch energy company ENECO in 2020. In the case of Italy, it could be due to Hitachi acquiring various companies from Ansaldo STS.

Our database contains 352 Japanese companies in Italy, sitting neatly betwen the 415 registered by MoFA and the 269 recorded in the Toyo Keizai directory. But our estimate of 503 Japanese companies in the Netherlands is lower than both the 525 in the Toyo Keizai and the 639 in MoFA’s records. We only enter companies which we can verify have employees into our database, which is why we appear to have under-recorded the number. Many of the companies identified by Toyo Keizai and presumably MoFA are brass plate, holding company type entities. As was seen in the acquisition of Otto Work Force, even one company in the Netherlands turns out to have multiple legal entities attached to it – at least 9 different subsidiaries are associated with Otto Work Force in the Netherlands. According to Dun & Bradstreet, Outsourcing’s holding company in the Netherlands now has over 50 companies associated with it.

Some of the Netherlands based companies we have not recorded may well have employees, but it seems Dutch companies are not obliged to disclose as much information as similar companies in the UK, for example – where employee numbers, even for the smallest company, are disclosed and freely available on Companies House.

Bearing the lack of data in mind, our Top 30 Japanese companies in the Netherlands needs to be treated with caution, but we can certainly see that Outsourcing and Mitsubishi Corporation‘s recent acquisitions have pushed them into the Top 30. Recruit, another major Japanese recruitment company, also entered the Top 30 with its acquisition of USG People in 2015 and Orix, the Japanese financial services company, acquired Dutch asset manager Robeco in 2013.

As these acquisitions show, Japanese companies have mainly been investing in the Netherlands’ services sector. There are some companies with manufacturing operations such as Omron, making control equipment, factory automation systems, electronic components, automotive electronics, ticket vending machines and medical equipment. Toyota Industries entered the Top 30 with its acquisition of materials handling systems manufacturer Vanderlande in 2017 and Canon manufactures printing production systems, as one of its legacies of acquring Oce more than ten years ago. Other major manufacturers are Astellas (pharmaceuticals) and Teijin (fiber). The notable absences from the Top 30 in terms of manufacturing are from the automotive sector – no Japanese car companies have plants in the Netherlands, and as a consequence, none of their suppliers do either.

The 30,000 employees who work for the Top 30 largest Japanese employers in the Netherlands represent around 70% of the total number of Netherlands based employees working in Japanese companies. This puts the Netherlands in equal 7th place with the Czech Republic in terms of largest numbers of employees in Europe, after Germany, UK, France, Poland, Italy and Spain. As the Netherlands is host to the fifth largest number of Japanese nationals and fourth largest number of Japanese companies, this is a further indication that the Netherlands has relatively few manufacturers with large numbers of employees and rather more in the way of holding companies with no employees, and a relatively higher density of Japanese expatriates compared to some other European countries.

See our 2022 top 30 Japanese employers for the Netherlands for updates.

What the vaccination levels tell us about attitudes to risk and innovation in Europe

(This article was published in Japanese for the Teikoku Databank News in May 2021)

The coronavirus vaccine rollout in Europe is providing many insights into how countries in the region deal with risk.

The UK has now vaccinated over half its population, at least with a first dose. This is far ahead of other countries such as Germany, France and the Netherlands where less than 20% of the population had been vaccinated by the beginning of April.

However, EU countries are expected to catch up rapidly over the coming weeks as the supplies of vaccines, including single dose ones, become more available. It is also sobering for me, as a British person celebrating my first vaccination dose, to remind myself that over 127,000 people have died of coronavirus in my country, one of the worst death rates globally. Perhaps we took the risks too lightly at first.

The UK did not join the EU’s vaccination procurement programme, even though it could have done. Instead, it appointed a venture capitalist who was a bio scientist with experience in investing in biotech and gave her free rein to invest a substantial amount of money in many different vaccination candidates.

Unsurprisingly, with over 25 member countries, the EU vaccination procurement programme took rather longer to reach decisions, but ultimately the European Medicines Agency has approved 4 vaccination types, more than any other Western agency.

Germany was cautious about rolling out the vaccinations, as it wanted to make sure that a second dose was going to be available within the time limit for effectiveness, before starting. The UK has not been so cautious and now there are supply difficulties. I hope I will get my second dose in June, but whether many people aged 18 or under will be vaccinated by the summer is unclear.

There has been some speculation as to whether, if the UK had been in the EU vaccination programme, the EU programme would have moved more quickly. The British tend to march into unknown territory without too much planning and preparation, and then “muddle along”, fixing things pragmatically as problems occur.

I discussed this with my German business partner and she said that Germans like to come up with a technologically outstanding solution, and then spend a lot of time worrying about how to deal with any risks, before starting on the project. Unfortunately, this is no guarantee that the technologically outstanding solution will actually work. This is how Germany approached the vaccination roll out – building centralized high tech vaccination centres, which meant it started slowly and resulted in a large stockpile of unused vaccinations.

The UK had a similar issue with the billions of dollars it spent on a supposedly “world beating” coronavirus test and trace app and centralized system, which is still not showing much success. It might have been better for both countries to go for a decentralised, low tech solution. Ultimately all countries were constrained as much by their existing technology infrastructure and processes as their attitude to risk – as companies also discovered as they tried to transform themselves during the pandemic.

(6 months on from when this was published, I did get my second vaccination in June, and am having my booster in two weeks. It seems Germany is undergoing a fourth wave of the pandemic, with much graver consequences than in the UK so far – one of the causes seems to be that it took Germany much longer to reach a similar vaccination level of its population to the UK. Whether a centralized system was or wasn’t the way forward is difficult to judge, as in a way the German system was decentralized – at a federal level – perhaps federally centralized would be the way to describe it?)

Trends in Japanese companies and Japanese nationals in Europe in 2020 – did the pandemic have any impact?

The number of Japanese nationals resident in Western Europe had grown steadily over the past seven years to reach over 220,000 by 2019. But by October 2020, according to Japan’s Ministry of Foreign Affairs, that number had dropped 5% to around 212,000. Of course the pandemic may have been an influence on this, evidenced by the fact that the number of Japanese residents overseas fell consistently around the world, with a global decline of 3.7% from October 2019 to 2020. But the latest statistics also show that some longer term trends continue and that the UK, while dominant as a host of Japanese companies and nationals, is also something of an outlier.

I’m surprised the numbers only fell 5% in Western Europe, as anecdotally I had heard of Japanese managers who were supposed to be moving to Europe staying in Japan, and ending up doing European working hours, trying to do their coordination job in a Japanese time zone. I have a sinking feeling they were also glued to their laptops during Japanese working hours too.

The fall in numbers of Japanese nationals resident in the UK had been a long term trend since 2015, but had shot back up in 2019. Since Japan’s Ministry of Foreign Affairs stopped giving breakdowns by visa category in 2017, it’s hard to work out what was behind this decline. It seems likely as I mentioned in previous posts, that it was more to do with how student visas were classified, with a secondary impact of Brexit on corporate expatriation to the UK.

The number of Japanese nationals in the UK fell 5%, the Western European average, from October 2019 to October 2020, compared to an 6.7% drop for Germany and an 8.4% drop for France. The UK is still the biggest host of Japanese nationals in Europe, with 63,000, compared to Germany with 42,000 and France with 31,000.

The Nordics buck the trend?

Some European countries hosted more Japanese nationals in 2020 compared to 2019 – mostly the Nordics – Finland, Norway, Denmark – and Austria. If this was anything to do with which countries were safer in the pandemic, this must have been more to do with perception than reality, as no country in Europe had been particularly badly affected until November 2020, just after the statistics were collated.

As the Financial Times charts show, in the winter of 2020, UK, Austria and Denmark all had a higher number of cases and the UK and Austria had a higher number of deaths than the European Union average. But it does seem that Norway and Finland were good choices in terms of staying healthy.

The rising phenomenon of non-resident Japanese directors

I’ve also seen a rise in Japanese directors of UK companies, who used to be resident in the UK, now being resident in the Netherlands. Although the Netherlands is still a much smaller host of Japanese nationals than the UK, Germany or France, the trend for Japanese nationals resident there is strongly upwards, with only a slight (-1%) downward turn in 2020.

Maybe the trends and impact of coronavirus will become clearer when the statistics for October 2021 are published in autumn of next year. It may turn out that COVID-19 accelerated trends that were already there, of consolidating and reducing the number of Japanese corporate expatriates, as Japanese directors and managers of UK and other European Japanese companies decided that they can manage their European subsidiaries remotely.

Turning to the statistics for Japanese companies in Europe, the rise in the number of Japanese nationals in Netherlands clearly has something to do with the numbers of Japanese companies in the Netherlands shooting up these past two years. I had previously speculated as to what was the cause of the sudden rise in Japanese companies in the Netherlands and also Italy. Both have continued at that level for 2020, so it was clearly not a glitch and more a rebasing or redefinition of what counted as a Japanese company as there is no evidence that a sudden jump in the number of new Japanese entrants happened in either country.

The UK managed to claw back some of the 12% decline in the number of Japanese companies it hosts since 2012, but is the only country in Europe, along with Belgium, to show a decline over the 9 years, when the numbers rose 23% on average for the whole of Europe. As we have outlined before, this decline is less about a complete withdrawal from the UK, and more about some long overdue tidying and consolidation, accelerated by Brexit, of shifting European regional bases to the continent and turning UK subsidiaries into branches.

Top 30 Japanese employers in France 2021

It’s been 4 years since we last looked at the top 30 Japanese employers in France. Much of what was true four years’ ago is true today. The top 30 partly reflects France’s traditional strengths, at least in Japanese minds, of food and drink, fashion, beauty and imaging technology – with Ajinomoto and Suntory still in the top 30 along with Shiseido, Fast Retailing (Uniqlo, Princesse Tam Tam and Comptoir des Cotonniers), Canon, Ricoh, Toshiba and Konica Minolta.

The automotive sector is still a big employer, as you might expect with Toyota having a plant in Onnaing making the Yaris, and Nissan having some of its models made by Renault, supplied by NTN, JTEKT and Nidec.

Some of the new entries are in the pharmaceuticals sector, including Taisho Pharma, who acquired UPSA from Bristol Myers Squibb in 2018 and Otsuka who have grown and made several acquisitions since they bought Nutrition et Santé in 2009.

SoftBank is still in the Top 30 as they have a substantial number of employees via ARM, which they still have not managed to get approval to sell. They have also said they are cutting half of the staff in France who were working on robotics, including the not very popular Pepper, brought in with their acquisition of Aldebaran in 2012 and may be planning to sell it to a German company.

According to our estimates, France is still the third largest base for Japanese company employees in the European region, with 76,000 employees. This is still less than half the employees of Japanese companies in the UK (176,000) or Germany (167,000) however. Around 60% of these employees are working for the top 30 largest Japanese employers (see below).

The largest employer is Toyota Tsusho, (the trading sister company to Toyota Motor) who shot to the top of the rankings after their acquisition of French company (with a major presence in Africa), CFAO in 2016. Nidec have also become a substantial presence in France thanks to their acquisition of Leroy-Somer, also in 2016.

The most recent acquisition in France by a Japanese company is Nippon Paint‘s acquisition of Cromology, Europe’s fourth largest architectural paints manufacturer. The acquisition was done via a new UK based company, DGL International, which is in turn owned by the DuluxGroup, an Australian paints company acquired by Nippon Paint in 2019. Nippon Paint sees this acquisition as a way of accessing markets across Europe, particularly France, Spain, Italy and Portugal, and then into Central European countries.

Up until now France has hosted far fewer regional headquarter companies than the UK or Germany. Perhaps these recent acquisitions show the start of a trend towards France becoming a base for Japanese companies to expand into the wider EMEA region.

Update:

We have received some more recent data regarding Hitachi’s employee numbers in France, following their acquisition of ABB Power Grids and JR Automation and other growth, so have updated the Top 30 for France accordingly. We welcome such updates so please do get in touch if you think we are missing something.

You can download the (updated) Top 30 Japanese employers in France below:

FREE PDF DOWNLOAD OF TOP 30 JAPANESE EMPLOYERS IN FRANCE 2021

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