Rudlin Consulting Rudlin Consulting
  • About
  • Services
  • Blog
  • Clients
  • Publications
  • Contact us
  • Privacy
  • English
  • About
  • Services
  • Blog
  • Clients
  • Publications
  • Contact us
  • Privacy
  • English
  •  

Foreign Direct Investment

Home / Archive by Category "Foreign Direct Investment"

Category: Foreign Direct Investment

Japanese companies in “wait and see mode” for 2023 overseas expansion

Japanese companies are increasingly in “wait and see” mode with regard to expanding their business overseas, according to a JETRO survey at the end of 2022. Although 43.5% of all those who responded to the survey (3,118) who already had operations outside Japan said they were going to invest further in their global business, this was outstripped by the 49.1% who said they would maintain their investment levels overseas “as is” and 5.2% who said they would reduce or withdraw from overseas business. This compares to 2019 where 66.9% who said they would invest more, 28.5% said they would maintain investment levels and 1.7% who were shrinking or withdrawing from overseas.  This trend is stronger in larger companies than small and medium sized ones. 51% of those respondents who did not have any overseas operations said they were not intending to invest outside Japan in 2022, compared to 40.9% in 2019.

EU selected by 20.7%, UK by 2.6% for expansion

Chemicals, foods, electrical machinery and software were the bright spots in terms of overseas expansion.  Top 3 destinations were USA (selected by 29.6%), Vietnam (26.5%) and China (26.4%), with the EU at number 4 (20.7%). The UK was 16th, selected by 2.6%. Product areas most focused on the EU were textiles and clothing and timber products – furniture and pulp.

Reasons for choosing regions to expand in were primarily around market size and growth potential, that there is a concentration of purchasers there – interestingly there is a clear difference between the USA (most of the sectors being targeted being manufacturing, so presumably Japanese companies B2B sales to other Japanese or US companies) whereas to Vietnam it is non-manufacturing, and more B2C, logistics and construction.

Onshoring

13% of respondents with overseas operations have already onshored or are looking at onshoring, particularly in health and beauty products, petrochemical and plastic products and IT equipment and components. Unsurprisingly, the key reason cited by 60% for doing so was the increased cost of manufacturing outside Japan.  Other concerns are the falling yen and the long term the shortage of supplies – however it seems global logistics is becoming easier again.

Business transformation and hiring non-Japanese employees

In terms of changing business strategy or business model to deal with global trends, 30.5% said they were already undertaking business transformation, 39% said there was a need to change their strategy or model but they had not done it yet and 26.8% did not see any need for change.

Those who were transforming their businesses were doing it through acquiring new personnel (both domestic and overseas), or redeploying existing personnel.  51.5% have now hired someone non-Japanese in Japan – the highest level yet.  A shortage of domestic personnel was the top reason for doing so, but not far behind were reasons to do with improving overseas marketing, management and negotiation strength, and also to globalise the HQ.

33.5% are undertaking digital transformation in 2022, compared to 28% in 2021, particularly in financial services and IT services. Reducing carbon emissions is well advanced in Japan (78.4% of large companies are undertaking zero carbon initiatives) but not so advanced with their overseas supply chains, with 40.6% of large companies having taken any steps and only 11.6% of small and medium sized companies including their overseas supply chains in any initiatives. Japanese customers are more demanding on carbon emission standards than overseas customers – 17% of Japanese have asked for statements of compliance on carbon emissions, but only 12% of overseas customers have done so.

Only 10% of Japanese companies have been conducting due diligence on human rights, but over 50% intend to do so within the next year. Over 50% of large Japanese companies have been asking for statements of compliance on human rights from their suppliers.

For more content like this, subscribe to the free Rudlin Consulting Newsletter. 最新の在欧日系企業の状況については無料の月刊Rudlin Consulting ニューズレターにご登録ください。

Share Button
Read More
Japanese companies’ employee numbers shrinking more in Europe than elsewhere

The quarterly survey by Japan’s Ministry of Economy, Trade and Industry reveals that employment in Japanese companies in Europe fell more than other regions in October to December 2020, a reflection of the continued declines in capital investment and sales in the region.

Globally, Japanese companies’ sales improved 3.8% on the previous year, the first increase in 8 quarters, but for Europe there was a 1.8% decline, the tenth consecutive quarterly decrease. Sales in North America fell slightly more, by 2%, but the decline has been more recent – over 5 quarters. Sales in Asia rose 9.3% (and comprise over half of Japanese companies’ sales overseas), the first growth in 8 quarters.

Capital investment declined across the board, by 17.6% – the fifth quarterly consecutive decline. The fall in investment in Europe was 19.6%, greater than North America’s 16.2% drop, but lower than the 23% fall in investment in Asia.

The total number of employees fell globally by 4%, the 7th consecutive quarterly decline, and by 7.9% in Europe, the 4th consecutive quarterly decline. The number of employees only fell by 3.8% in Asia (7th consecutive quarterly decline) and 3% in North America (4th consecutive quarterly decline).

Sectorally, the decline in sales in Europe was mainly in electrical machinery (13.9% drop) and transportation equipment (which includes automotive) with a 2.9% fall. Capital investment in the European transportation equipment sector fell by nearly 40% and there was a 15.4% decline in capital investment in the European electrical machinery sector too. European employee numbers fell 26.5% in electrical machinery and 3.8% in transportation equipment. There were increases in sales, investment and employment for Japanese companies in Europe in the chemical and general purpose machinery sectors, however.

For more content like this, subscribe to the free Rudlin Consulting Newsletter. 最新の在欧日系企業の状況については無料の月刊Rudlin Consulting ニューズレターにご登録ください。

Share Button
Read More
Top 30 Japanese employers in Europe, Middle East, Africa 2021

The major Japanese employers in Europe, Middle East and Africa employ over 540,000 people, a 1.4%* rise comparing financial year 2018/9 to 2019/20, even though their global employee numbers have shrunk by around 1% over the same period. As in previous years, acquisitions of companies in the region are the main growth drivers.

The top 5 largest employers remain the same – Sumitomo Electric Industries, Yazaki, NTT Data, Fujitsu and Canon.  The rest of the top 10 are the same, apart from Hitachi rising from 14 to 9, bumping Toyota Tsusho to number 11.

Exiting the Top 30 are Mitsubishi Corporation, Mitsubishi Electric and Olympus – not so much due to any decline as the growth of the new entrants LIXIL (following its acquisition of Grohe), NEC (acquiring KMD in Denmark and Northgate in UK) and Asahi (having acquired various European beer brands such as Peroni, Fullers and Grolsch).

Which company to work for

We have previously recommended that people wanting to work for a Japanese company should consider not just whether it is growing in the region but also what proportion of its employees are in the region. The greater the proportion, the more influence the region is likely to have in headquarters’ decisions.

The average for proportion of employees in the EMEA region of the top 30 is around 14%. Those with more than a quarter of their global employees in EMEA are NSG (due to its acquisition of Pilkington), Asahi Group (due to the acquisition of the beer brands mentioned above), Asahi Glass (the continuing influence of the 1981 Glaverbel acquisition), Sumitomo Electric Industries (the continuing influence of acquiring Volkswagen Bordnetze in 2006), Toyota Tsusho (acquired French company – mainly operating in Africa – CFAO in 2012).

The companies who score highly both in terms of growth and proportion of employees in the region are Sumitomo Electric Industries, Toyota Tsusho and NTT Data. The latter grew through acquisitions of Dimension Data, Keane and Itelligence but appears to have shrunk its EMEA employees over the 2018/9 to 2019/20 period. This is actually due to Latin America being excluded from the regional total in 2019/20, having been previously included.  Dentsu also has nearly a quarter of its employees in EMEA and has grown nearly 50% since 2014/5 due to the acquisition of Aegis Network and subsequent smaller acquisitions, but the numbers are starting to decline as it starts to consolidate and restructure, aiming to cut its overseas roles by 12.5%.

Dentsu does not publish consolidated regional employee numbers, and neither do trading companies such as Mitsubishi Corporation, Toyota Tsusho and Itochu.  Some have been inconsistent in publishing details – JT International for example – so we have had to use our best guesses and our own database. Overall the level of transparency in Japanese companies’ reporting on overseas employees has improved tremendously over the six years we have been tracking them, thanks to Japanese companies’ enthusiastic adoption of UN Sustainable Development Goals.  Perhaps a lack of transparency on employee details should be a factor to consider in terms of desirability as an employer.

If you’re thinking of working for a Japanese company, a good way to signal that you know what you’re letting yourself in for would be to obtain the certificates from doing the e-learning modules on working in a Japanese company from the leading global Japan focused intercultural training company, Japan Intercultural Consulting.

*If NTT Data is excluded, as the 2018/9 employee numbers for the EMEA region in their annual report included Latin America, but Latin America was not included in the 2019/20 regional employee numbers.  Including NTT Data in 2019/20 figures produces a small decline in the regional employee total for the Top 30  of -0.24%.

FREE PDF DOWNLOAD OF TOP 30 JAPANESE EMPLOYERS IN EMEA

For more content like this, subscribe to the free Rudlin Consulting Newsletter. 最新の在欧日系企業の状況については無料の月刊Rudlin Consulting ニューズレターにご登録ください。

Share Button
Read More
Japanese companies in the UK are shrinking – is Brexit to blame?

The number of Japanese companies and their employees in the UK is starting to decline. Given that this is against the trend elsewhere in Europe, it is hard to avoid the conclusion that this is a reaction to Brexit.

Brexit has put up barriers to the UK trading within the Single Market, damaging sectors it used to have a comparative advantage in such as automotive manufacturing and financial services. The UK is now left with its global strength in services such as professional services, IT, design, marketing and education. It remains to be seen how much of this strength was also reliant on being part of the Single Market, in terms of being able to sell those services to the EU and benefit from the freedom of movement of the people providing or benefiting from those services. So far, Japanese companies seem to be happy to continue to access these services by basing their regional head offices in the UK, regardless of Brexit, or through acquiring British companies in the services sector.

The decline is from a high base. The UK has the highest stock of Japanese foreign direct investment, the highest number of employees of Japanese companies, and the most resident Japanese nationals in Europe.

The decline in numbers of Japanese companies in the UK is mainly due to a reduction in Japanese companies in the manufacturing and financial sectors. There has also been a drop in the number employed in automotive manufacturing. On top of this, the main driver of the past few years behind the rising employee and company numbers – big-ticket M&As followed by expansion in employee numbers – has been less of a force more recently.

To understand more about the trends in Japanese companies in the UK in terms of investment and employee numbers, how this compares with Germany, France, the Netherlands and Italy and what this might mean for the UK in future years, please download our report below:

Japanese companies in the UK

FREE DOWNLOAD

Send download link to:

I confirm that I have read and agree to the Privacy Policy.

I would like to subscribe to the free monthly Rudlin Consulting newsletter on Japanese companies in Europe. Rudlin Consultingの在欧日系企業についての最新リサーチとレポートを掲載した無料月間ニュースレターに登録したい。

For more content like this, subscribe to the free Rudlin Consulting Newsletter. 最新の在欧日系企業の状況については無料の月刊Rudlin Consulting ニューズレターにご登録ください。

Share Button
Read More
The advantages of investing in smaller countries

I was asked to speak at a Portugal-Japan Investment event at the end of 2019. Initially I was worried about what I could say as I was not sure there would be much that would interest Japanese companies in Portugal. The population is only around 10 million and multinationals mostly either have a small sales office there, or cover it from Spain.

For British people Portugal is mainly seen as a nice place to go on holiday – for golf or the beaches or to enjoy the rich history, culture and port wine.  There are also some similarities in temperament between Portugal, the UK and even Japan – a gentility, understatement and a slight melancholy which contrasts with bigger European nations like Spain or France or Germany.

Portugal is the UK’s longest standing ally – for more than 650 years –  and the Portuguese Prime Minister and officials who spoke at the event emphasised that they saw Portugal as an additional base for Japanese companies, rather than an alternative to the UK.

Portugal has strengths in traditional sectors such as food, apparel and automotive manufacturing. For example, Toyota has a joint venture with Caetano, who also have a joint venture with Mitsui, manufacturing electric buses.  There are also some emerging strengths, such as energy and IT services, particularly business process outsourcing.

The two Japanese companies that spoke on the panel with me were Fujitsu, who employ nearly 2000 people in Portugal now, providing business process outsourcing and IT services and Marubeni, who have invested in various energy projects.

All the presentations emphasised the obvious advantages of Portugal. Firstly, that the economic and political risks are low. Portugal has recovered well from the Lehman Shock recession, does not have much populism, and the coalition government has been in power for over 5 years.

Secondly, Portugal has a well-educated (particularly in science, technology and maths), multilingual workforce. And thirdly, as well as being in the EU, it also provides a bridge to Portuguese speaking markets, most notably Brazil.

But there was an additional reason, given by the Marubeni representative which caught my interest. He said that starting a new business in a smaller economy meant it was more “manageable”.  A foreign direct investment expert at the event confirmed what I had found out through my own researches on Japanese companies in Europe – smaller European countries are becoming popular foreign direct investment destinations.

Japanese companies in Portugal have quadrupled (from a small base) over the past 6 years, but other European countries of 6-11 million population size have also seen an increase in Japanese acquisitions or greenfield manufacturing investment, such as Finland, Sweden, Hungary and Czech Republic.

The number of Japanese expatriates in Portugal has not risen quite so rapidly.  Growth in the Japanese communities in the Netherlands, Poland and Ireland has been greater. From a business, as well as a weather, food, golfing and cultural perspective, I wonder whether this might be about to change.

This article by Pernille Rudlin was originally published in Japanese in the Teikoku Databank News on 15 January 2020

For more content like this, subscribe to the free Rudlin Consulting Newsletter. 最新の在欧日系企業の状況については無料の月刊Rudlin Consulting ニューズレターにご登録ください。

Share Button
Read More

Last updated by Pernille Rudlin at 2023-04-28.

Search

Recent Posts

  • Clear trends from less data on Japanese companies in Europe
  • Toshiba launches quantum technology hub in Cambridge, UK
  • Japan’s M3 acquires British medical staffing company Messly
  • Japan owned British crypto currency firm B2C2 acquires France based Woorton
  • Dentsu acquires Germany’s RCKT

Categories

  • Africa
  • Brexit
  • China and Japan
  • Corporate brands, values and mission
  • Corporate culture
  • Corporate Governance
  • cross cultural awareness
  • CSR
  • customer service
  • Digital Transformation
  • Diversity & Inclusion
  • European companies in Japan
  • European identity
  • Foreign Direct Investment
  • Globalization
  • History of Japanese companies in UK
  • Human resources
  • Innovation
  • Internal communications
  • Japanese business etiquette
  • Japanese business in Europe
  • Japanese customers
  • M&A
  • Management and Leadership
  • Marketing
  • Middle East
  • negotiation
  • Presentation skills
  • Reputation
  • Seminars
  • speaker events
  • Trade
  • Uncategorized
  • Virtual communication
  • webinars
  • Women in Japanese companies
  • Working for a Japanese company
  • Zero carbon

RSS Rudlin Consulting

  • Clear trends from less data on Japanese companies in Europe
  • Toshiba launches quantum technology hub in Cambridge, UK
  • Japan’s M3 acquires British medical staffing company Messly
  • Japan owned British crypto currency firm B2C2 acquires France based Woorton
  • Dentsu acquires Germany’s RCKT
  • Nippon Express acquires Switzerland based Tramo Group
  • Hitachi divests UK’s Temple Lifts
  • GMO Internet to close GMO-Z.COM London forex brokerage
  • SMFG continues its restructuring in EMEA
  • Japanese financial services companies in the UK

Search

Affiliates

Japan Intercultural Consulting

Cross cultural awareness training, coaching and consulting. 異文化研修、エグゼクティブ・コーチング と人事コンサルティング。

Subscribe to our mailing list

* indicates required
Email Format

To receive the newsletter, please tick "Email" below. Rudlin Consulting Ltd will also use the information you provide on this form to be in touch with you and to provide updates and marketing by email.

You can change your mind at any time by clicking the unsubscribe link in the footer of any email you receive from us, or by contacting us at pernille.at.rudlinconsulting.dot.com. We will treat your information with respect. For more information about our privacy practices please visit our website. By clicking below, you agree that we may process your information in accordance with these terms.

We use MailChimp as our marketing platform. By clicking below to subscribe, you acknowledge that your information will be transferred to MailChimp for processing. Learn more about MailChimp's privacy practices here.

Recent Blogposts

  • Clear trends from less data on Japanese companies in Europe
  • Toshiba launches quantum technology hub in Cambridge, UK
  • Japan’s M3 acquires British medical staffing company Messly
  • Japan owned British crypto currency firm B2C2 acquires France based Woorton
  • Dentsu acquires Germany’s RCKT

Rudlin Consulting on Twitter

  • RT @Ravilious1942: Road by an Airfield, Eric Ravilious, c.1942. The original artwork was sold at @ChristiesInc in 2008 and is now believed… 09:11:29 PM May 22, 2023 from Twitter Web App ReplyRetweetFavorite
  • RT @EmilieCope91: Calling female colleagues Karens is a new and exciting way for men to be sexist at work. 09:31:03 PM May 20, 2023 from Twitter for Android ReplyRetweetFavorite
  • RT @Ravilious1942: The Causeway, Wiltshire Downs, Eric Ravilious, 1937. The original artwork is in the collection of @V_and_A. #Wiltshire… 06:20:26 PM May 20, 2023 from Twitter for Android ReplyRetweetFavorite
  • @katebevan Eww. Wish I hadn't asked now. Can't unread. 12:27:37 PM May 20, 2023 from Twitter for Android in reply to katebevan ReplyRetweetFavorite
@pernilleru

Meta

  • Log in
  • Entries feed
  • Comments feed
  • WordPress.org
Privacy Policy

Privacy Policy

Web Development: counsell.com