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Ajinomoto

Home / Posts Tagged "Ajinomoto"

Tag: Ajinomoto

Acquire or be acquired – predictions on the future of Japanese mergers and acquisitions

Japanese companies used to be seen as very reluctant to acquire and merge with other companies, but the record breaking £46bn acquisition, finalised in January 2019, of Irish pharmaceuticals company Shire by Japan’s Takeda may not even be the peak of what has been at least 10 years’ of an overseas spending spree by Japanese companies.  Faced with a declining, ageing domestic market, Nikkei Business magazine expects Japanese companies to continue their spending spree in 2019, even if there is not a big ticket purchase like Takeda/Shire.

Autonomous vehicles, Internet of Things and other new technologies are likely to be the focus of future M&A.  For example Japan’s tyre maker Bridgestone has acquired the telematics business of Dutch company TomTom. “Tyre companies are also entering the era of CASE (Connected, Autonomous, Sharing Electric)” says Bridgestone’s CEO Masaaki Tsuya. Sensors can be placed in tyres to understand driving conditions, for example.

In the IT sector, NEC has acquired the UK company Northgate Public Services in January 2019 and in December of the previous year acquired Denmark’s KMD Holding and is looking to acquire a stake in India’s Mindtree.

Food and drink companies are also active – Mizkan, Ajinomoto and Asahi Beer have all made acquisitions recently in Europe.

In the financial sector, Nikkei Business speculates that a Japanese company like SMFG or Orix might be interested in acquiring GE’s aircraft leasing business GECAS, headquartered in Ireland – although GE has since denied GECAS is for sale.  MUFG might be interested in the US Bank of the West.

Most of the acquisitions of Japanese companies have been by Chinese companies, but Nikkei Business also wonders whether some of the big Western automotive suppliers such as Bosch, Continental, ZF, or Magna might not be interested in acquiring Japanese automotive suppliers.

Declutter and dispose

M&A is also an opportunity for Japan’s keiretsus (conglomerates and company groupings) to do a bit of tidying up. The trendsetter in this has been Hitachi, who have been pursuing a rigorous policy of “selection and focus” in rearranging their business portfolio. Over the past 10 years or so they have sold off Hitachi Global Storage Technologies to Western Digital, Hitachi Logistics to SG Holdings, sold a 27% share in Hitachi Capital to MUFG, sold Hitachi Power Tools and Hitachi Kokusai Electric to KKR and Clarion to Faurecia.

Japanese investors and banks are keeping a watch on Hitachi High Technologies, Hitachi Chemical, Hitachi Automotive Systems, Hitachi Construction Machinery and Hitachi Metals as the next possible candidates.  Hitachi Chemical and Hitachi Metals were supposed to be two of the “Three Branches” of Hitachi along with Hitachi Cable, so the idea that they could be sold off would be heresy to some Hitachi old timers.  As the Nikkei Business magazine says, Hitachi is trying to compete as a global company, so any business that has no synergy with its “social innovation” vision is likely to be dropped.

Panasonic already sold off its security camera business and foreign funds are eyeing up Panasonic Avionics – an inflight entertainment company – as a likely next candidate. “It has nothing to do with Panasonic’s main business”, one investor commented.

Takeda seems to be preparing to dispose of its consumer healthcare business to help fund its acquisition of Shire, as it has spun off its vitamin drinks and other products into a separate company.

Fujitsu has also been disposing of its hardware businesses – mobile phones, car electronics and PCs and Sony‘s mobile phone business is still struggling, and rumours that it could be sold continue.

Spark surprise

Nikkei Business concludes with some surprise predictions from the experts it spoke to:

  • Astellas and Daiichi Sankyo merging
  • Pioneer and JVCKenwood merging
  • SoftBank acquiring NEC
  • Fast Retailing acquiring Gap
  • Google acquiring Recruit
  • Amazon acquiring 7&i (7-11 convenience store chain)

Unsettling though it may be for the employees concerned, if clarity in the focus and business of Japan’s iconic companies results from these M&As, ultimately it should make for a more confident Japan Inc.

 

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Japan’s “work style reforms” backlash grows

The number of articles I have seen in the Japanese media full of complaints about the “work style reforms” announced by the Abe government last year seems to have shot up, particularly since the introduction of “premium Friday” in February of this year, when everyone was supposed to leave work at 3pm on the last Friday of each month and go shopping.

The Nikkei Business magazine’s 24th July 2017 edition has highlighted 3 kinds of behaviour attracting criticism in an article entitled “That’s not work style reform!”

Dumping work on overseas subsidiaries…

Mr A, a 30 something manager in a famous Japanese electronics company, is well known for producing great reports and yet somehow always managing to leave work on time, claiming he needs to pick up his kids from school, or do the housework.  He goes on business trips to Asia twice a month, as his area of responsibility is global sales, and is meant to meet customers to understand their requirements for automotive and electrical components. However according to the young staff (presumably either Japanese or Japanese speaking) in the Asian offices, he mostly gets them to write the reports.

This behaviour started when the work style reforms began to be implemented, such as receiving warnings the next morning if your PC was still on after 8pm.  Mr A said he couldn’t take his laptop home because his young children make it hard to work, so asked the Asia office staff to draft reports for him.  “If you try to refuse he starts talking about his kids.  how he has to take them to hospital or it’s their birthday party”.  I wonder though, unless he’s wrongly claiming credit, isn’t this just good delegation?

…and other complaints

Other behaviours which complaints have been received about include – refusing to read customer emails after 4:45, just moving the mouse around to show that you are working from home, lights going out in the middle of important meetings, “last orders” being 2 hours before the end of business.

Nikkei Business lists up the initiatives which have been taken:

  • Ajinomoto: changed the official end of the working day to 4:30 from April 2017 and shortened the working day from 7 hours and 15 minutes by 20 minutes
  • Honda: Introduced a “working interval system” whereby there must be a minimum of 12 hours break between two work periods
  • Fujitsu: Authorised unlimited working from home (but only twice a week maximum after the end of the working day) for around 25000 of its employees
  • Calbee: Has a bi-annual “get rid of unnecessary work” drive
  • Sony: promotes a “flex holiday” system of 16 day consecutive holidays including Saturdays.
  • Astellas: Introduced a “Family Friday” system where work finishes each Friday at 4:30

 

What Japanese companies should do instead

Nikkei magazine asked the Chinese founder of Japanese software company Softbrain Song Wenzhou what he thinks Japanese companies should do instead.  “It’s pointless to expect Japanese people to become more efficient by themselves.  Even if you start an initiative to get everyone to observe 9-5 working hours they will still stay in the office even if they don’t have anything important to do.  Being more efficient is seen as leading to sloppiness and if you just do the essentials of your job this is seen as bad!”

He recommends:

  1. The whole organisation – not just the individual – has to focus on how to improve productivity.  I totally agree – leaving it up to the individual will not work in a collectivist, collaborative workplace.
  2. Then you can reduce working hours

Mitsuo Sekiya, the founder of Disco Corporation, a Japanese manufacturer of precision machinery, led a true reform of work style, resulting in three consecutive quarters of highest ever profit this year.  Sekiya’s view is that true work style reform requires a radical restructuring of the company and that the problem is that employees who increase their productivity are not rewarded either financially or in terms of evaluations.

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。

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Most popular companies with Japanese graduates

I alway find the rankings published each year by various organisations in Japan of which companies are most favoured by university graduates fascinating reading, giving insights into how the economy and societal trends have impacted the reputation of Japan’s blue chips.

The Nikkei Business magazine has focused on the rankings produced by Rakuten’s social networking site for graduates, the biggest of its type in Japan, this year.

Travel companies seem to have done particularly well this year overall – All Nippon Airways is top of the rankings (up from #2) Japan Travel Bureau at #3 (up from 8) and JAL resurgent after its successful restructuring in at #4 from no rank last year.  Maybe this is due to the high profile activities of these companies in trying to get more tourists to Japan, especially in light of the 2020 Tokyo Olympics.

Advertising agencies are also back in favour – Number 2 is Dentsu, the mammoth advertising agency (up from #3), Hakuhodo is at #6 up from #14 and ADK has risen from 112 to 78.

Banks have lost ground –  Bank of Tokyo-Mitsubishi UFJ has dropped to #5 from #1, Sumitomo Mitsui Banking Corp slipped from #6 to #9 and Mizuho is down to #13 from #9 but insurance companies seem to be popular again – Sompo Japan is up to #65 from 128 and Sumitomo Life also rising from 151 to 68.

Other big fallers are Ajinomoto (down to #23 from #11), Mitsubishi Corporation (down to #26 from #13), P&G Japan (down from 10 to #39, whereas domestic rival Kao has improved from #23 to #11) and Canon (down at 94 from 54, presumably following some disappointing financial results in 2013), Lotte (down to 89 from 56), NTT Docomo (86 down from 52).

Graduates from the top ten universities heavily favoured trading companies (Mitsui, Mitsubishi Corp, Itochu, Marubeni and Sumitomo Corp all in their top 10) and advertising agencies (Dentsu and Hakuhodo)

Reasons for favouring certain companies:

I could become President, have authority to make decisions – trading companies ranked highest

I can become a specialist in a certain field and lead projects – Toyota, Kawasaki Heavy Industries

My seniors recommended it – Tokio Marine Insurance, Yokohama Bank, Bank of Tokyo Mitsubishi UFJ

My parents/teachers recommended it – All Nippon Airways, Japan Rail, Mitsubishi Corp, Bank of Tokyo Mitsubishi UFJ

 

 

 

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。

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Last updated by Pernille Rudlin at 2019-02-27.

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