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Japanese companies divest as well as invest in Europe

The eagle eyed will have spotted that our revised ranking below for the top 30 largest Japanese employers in Europe for the year ending 2016 is not quite in rank order. Only a third of the reports covering the financial year ending 2017 are available but based on what we can dig out, we can say that acquisition hungry Nidec have topped 10,000 employees in Europe so will be higher than their 2016 ranking. Dentsu Aegis have also been gobbling up agencies and Bridgestone has acquired a couple of tyre companies in France.

Some of the more established technology brands have been acquiring around Europe too such as Panasonic (Ficosa in Spain, Zetes in Belgium), Konica Minolta (Mobotix in Germany, Dactyl & OMR in France) and Sony (eSaturnus in Belgium, Plumbee and Ministry of Sound and TruTV in the UK).

At the same time, Japanese companies are beginning to consider exiting investments, which is a relatively new development. Some have had this forced on them of course, like Toshiba selling Landis & Gyr and Westinghouse. Lixil was a new entrant into the top 30, having acquired Grohe, the German bathroom company and Permasteelisa, the Italian construction company but is now in the process of selling the latter to a Chinese company. “It may have been forced to sell assets it had trouble integrating” according to a source quoted in the Financial Times.

Hitachi, having acquired German company Metabo in 2015/6 is now selling it off with the sale of its power tools division to KKR.

Toshiba may well fall out of the rankings as a consequence of selling off its businesses and Takata may no longer qualify as a Japanese company, as it is about to be acquired by Chinese company Key Safety Systems.

For the full report of the M&A activities of the biggest Japanese companies in Europe, please contact Pernille Rudlin (pernille dot rudlinrudlinconsulting dot com)

Top 30 Japanese companies in Europe 2021

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*Best estimate as figures not disclosed in annual report

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Why work for a Japanese company? (#1) Corporate Social Responsibility

For most Japanese companies, despite recent changes to corporate governance and the occasional scandal, the main motivation is the long term survival of the firm, not shareholder value maximisation.

Obviously you have to make some money to invest back into the company to survive, but above all longevity means being a good citizen in the environment and communities you operate in. There are some exceptions to this of course, but by and large, Japanese companies are pretty sincere about corporate social responsibility, to the point where I used to joke when I worked in corporate communications in a Japanese IT company, that if we didn’t watch out, our mission statement would be identical to every other Japanese technology company’s mission statement as it could be summarised as “contributing to society through innovation”.

So if you are looking to work for a company that will be supportive of your wish to make a positive contribution to society, then you may find Japanese companies congenial places to work.

Some are more active in CSR than others, so when Toyo Keizai has published its latest rankings by industry, we matched these to our Top 30 Europe, UK and Germany largest Japanese employers rankings and put them in rank order as below.

As Toyo Keizai points out, it is easier for manufacturers to score highly in their CSR rankings, which is why they dominate the top 50 overall, and also why Toyo Keizai publishes rankings by industry, to ensure like for like comparisons are made. Banking and financial services are not included in their analysis. Toyo Keizai explains its scoring system (in Japanese) here. It has around 150 criteria, across the categories of diversity (gender, age, disability), environment, corporate governance and social contribution.

Fujifilm – #1 overall and #1 in pulp/paper/chemicals
Canon #4 overall and #1 in electronics and fine engineering
Denso #8 overall and #1 in automotive
Ricoh #9 overall and #3 in electronics and fine engineering
Konica Minolta #12 overall and #4 in electronics and fine engineering
Honda #14 overall and #2 in automotive
Nissan #17 overall and #3 in automotive
Daiichi Sankyo #25 overall and #1 in pharmaceuticals
Toyota #28 overall and #4 in automotive
Fujitsu #30 overall and #9 in electronics and fine engineering
Astellas #34 overall and #2 in pharmaceuticals
Sumitomo Rubber 36th overall and #2 in oil/rubber/glass/ceramics
Mitsubishi Corporation #42 overall and #1 among trading companies
Lixil 44th overall and #1 in metal products
Sony #45 overall and #12 in electronics and fine engineering
Nidec #49 overall and #13 in electronics and fine engineering
Takeda #50 overall and #4 in pharmaceuticals
Sumitomo Electric Industries #52 overall and #2 in metal products
Itochu #55 overall and #2 among trading companies
Panasonic #57 overall and #15 in electronics and fine engineering
NYK #58 overall and #1 in logistics
Japan Tobacco 60th overall, 3rd amongst food companies
Brother Industries #71 overall and #16 in electronics and fine engineering
Sumitomo Corporation – #73 overall and #3 amongst trading companies
NTT Data #75 overall and #4 in telecommunications
Olympus #84 overall and #17 in electronics and fine engineering
Dentsu #95 overall and #2 out of service sector companies
Sumitomo Heavy Industries #138 overall and #11 amongst machinery companies
Calsonic Kansei #138 overall and #18 in automotive
Fast Retailing (Uniqlo) #531 overall and #19 out of 20 amongst retailers

Top 30 Japanese employers in France -reflecting France’s traditional strengths

Le quatorze juillet seems a good moment to announce our new Top 30 Japanese companies in France.

The total number of employees covered by the 30 largest Japanese employers in France is 35,000 – lower than the totals employed by the Top 30 in Germany (56,000) and the UK (80,000) but the automotive sector is still dominant with nearly half of the Top 30 being automotive or having some automotive business. Obviously some of the larger employee groups are related to manufacturing workforces – Toyota, JTEKT and NTN for example.

M&A’s have played a part too – NTN, a bearings company, acquired French company SNR Roulements (which was part of the Renault group) in 2006. Toyota Tsusho acquired CFAO in 2012 – a trading company with over 10,000 employees in Africa. Fast Retailing added French brands Princesse Tam Tam and Comptoir des Cotonniers to its retail group alongside Uniqlo.

As you might expect, food and drink companies also feature – Nippon Suisan acquired Cite Marine, and Suntory has its Orangina Schweppes brands based out of France. Ajinomoto is also headquartered in France for the region.

The other key sector is technology, particularly imaging – Canon, Ricoh,Toshiba, Konica Minolta, Olympus and Fujifilm. Once again, each country’s historical comparative advantage is clear (cars, food, films for France, engineering for Germany and cars, finance and other services for the UK) showing how trade and integrated markets encourage specialisation.

Rank	Company	France employees 2016
1	Toyota	3,475
2	Ricoh	3,335
3	JTEKT	3,212
4	NTN	4,200
5	Fast Retailing	2,300
6	Canon	2,077
7	Toshiba	1715
8	Konica Minolta	1,250
9	Bridgestone	1,036
10	Horiba	971
11	Nippon Suisan	911
12	Suntory	900
13	Sanden	850
14	Nissan	800
15	Toyota Tsusho	653
16	Ajinomoto	600
17	Yamaha Motor	571
18	U-Shin	553
19	Fujifilm	550
20	Asahi Glass	550
21	Shiseido	550
22	Amada	519
23	Dentsu	485
24	Toray	456
25	Fujitsu	450
26	Olympus	450
27	Otsuka Pharma	449
28	Toyota Boshoku	440
29	Kubota	353
30	NTT	350
	TOTAL	35,011

Japanese automotive companies represent 1/3 of top 30 Japanese employers in the UK

Fujitsu continues to be the largest Japanese employer in the UK despite recent restructuring. We’ve added Sumitomo Rubber to the list, following its recent acquisition of UK tyre wholesaler and retailer Micheldever. Along with Kwik Fit, another UK tyre dealer and car servicing company is owned by Itochu at #3, this means that over a third of the companies in the list are automotive or have a substantial automotive component to their business.

We’ve also revised upwards our estimate of the total number of Mitsubishi Corporation employees, having confirmed from various sources that its main subsidiary in the UK, Princes, the foods company, has around 3000 of its 8000 employees in its UK operations.

The top 30 now cover around 80,000 of the 140,000 employees that Japanese companies in the UK employ. Individual profiles of each company, including trends in employment, regional headquarters, European organisation and CSR and diversity analyses are available – please contact pernille dot rudlinrudlinconsulting dot com

Rank	Company	UK employees 2016
1	Fujitsu	9,905
2	Nissan	7,657
3	Itochu	6,697
4	Honda	4,565
5	Ricoh	3,702
6	Mitsubishi Corp	3,482
7	Hitachi	3,317
8	Toyota	3,233
9	Sony	2,937
10	Canon	2,744
11	Dentsu	2,571
12	Nomura	2,468
13	NSG	2,167
14	Mitsubishi UFJ Financial Goup	2,100
15	Denso	1,925
16	NYK Group	1,919
17	Mitsui Sumitomo & Aioi Nissay Dowa	1,867
18	Yazaki	1,846
19	Calsonic Kansei	1,729
20	SoftBank	1,700
21	Sumitomo Rubber	1,574
22	JT Group	1,473
23	Sumitomo Corporation	1,366
24	Fujifilm Holdings	1,292
25	Brother Industries	1,174
26	Olympus	1,157
27	Fast Retailing	1,100
28	Unipres	1,095
29	Konica Minolta	1,055
30	NSK	866
TOTAL		80,683

Top 30 Japanese employers in Germany in 2017 includes Takata at #3 – who’s about to become Chinese…

The bankruptcy of Takata and acquisition of its assets and operations by a Chinese owned US based company Key Safety Systems is not perhaps the most auspicious moment to announce our new Top 30 Japanese employers in Germany – where Takata, for the time being, is at #3. Its substantial presence in Germany (in contrast to the UK, where it has no operations at all) is due to the acquisition of Petri AG in 2000.

Another Japanese company which should perhaps be classified as Chinese (or rather, Taiwanese) is Sharp. Since Hon Hai/Foxconn’s acquisition, Sharp has radically reorganised itself in Europe. There is Sharp Devices Europe, headquartered in Munich, with what was Sharp Laboratories and is now renamed a Design Centre in Oxford UK and Sharp Business Systems Europe, headquartered in the UK along with the Information Systems unit, with Visual Solutions in Munich and Energy Solutions in Hamburg. Sharp Telecommunications in the UK is being closed down. Sharp’s white goods brand (microwaves etc) is now under license to the Turkish company Vestel but there was a rumour last year that Sharp under Foxconn wanted to buy the brand back.

Many of the other large Japanese companies in Germany are also the result of acquisitions, like Takata – Musashi Seimitsu acquired Johann Hay in 2006, Lixil acquired Grohe/Josef Gartner 2011-2013, Panasonic acquiring Vossloh in 2000 etc.

Comparing to the UK Top 30 – there are some similarities – Fujitsu at the top and Sony, Ricoh, Canon, JTI and Hitachi all featuring. No doubt the list will be revised as we uncover more companies, but it does seem that there are not quite so many employees per large company in Germany as there are in the UK. This might be partly to do with the car factories – Honda, Nissan and Toyota and their associated suppliers in the UK – and also the trading companies such as Itochu, Sumitomo Corporation and Mitsubishi Corporation have acquired larger companies in the UK than they have in Germany.

Rank	Company	Germany employees 2016
1	Fujitsu	5,000
2	Sharp	4,226
3	Takata	3,311
4	Lixil	3,200
5	Musashi Seimitsu	3,140
6	Panasonic	2,935
7	Olympus	2,573
8	NSG Pilkington	2,500
9	Konica Minolta	2,399
10	NTT Data	2,300
11	Canon	1,842
12	Ricoh	1,804
13	Daiichi Sankyo	1,705
14	JT International	1,699
15	Nidec	1,394
16	Sumitomo Heavy Industries	1,386
17	Sony	1,372
18	Mitsubishi Hitachi Power Systems	1,352
19	Toshiba	1,287
20	Yaskawa	1,281
21	Takeda	1,262
22	Astellas	1,037
23	Toyoda Gosei	1,034
24	ARRK	955
25	Nintendo	900
26	Nissan	835
27	Renesas	831
28	Toyota Industries	830
29	Hosokawa Micron	760
30	Hitachi	742
TOTAL		55,892

For a 2022 Top 30 Japanese companies in Germany, see our blog post here.

Fewer women on the boards of Japanese companies in Europe than in Japan

We’ve revised our Top 30 Japanese companies in Europe again. Where possible we have updated the number of employees, which means the Suntory Group is now in the Top 30 along with Konica Minolta (and Kao and Daiichi Sankyo are out). This time we wanted to take a look at the gender and nationality diversity on boards, both in Japan and Europe, and have discovered that there are actually fewer women on the boards of Japanese companies in Europe than in Japan.

Only two out of 19 (10%) of European headquarter boards of Japanese companies have women on them – Astellas and Suntory (the latter including Makiko Ono, an executive in Suntory Japan) and only 3 of the 14 (21%) UK based Japanese companies we looked at (in cases where the European HQ was not in the UK or there were separate European and UK companies in the UK) had women members – Lucite (subsidiary of Mitsubishi Chemical Holding/Mitsubishi Rayon), Komatsu and NTT Data. Komatsu UK’s female director is Keiko Fujiwara, who is the CEO of Komatsu Europe, in Belgium. This contrasts with 13 (43%) out of the Top 30 companies’ boards in Japan having women directors. In case you were wondering, only 6% of FTSE250 companies have no women on them.

4% of the Top 30 Japanese companies in Europe’s board members in Europe and/or the UK are female
6% of the Top 30 Japanese companies in Europe’s board members in Japan are female
8% of the Top 30 Japanese companies in Europe’s board members in Japan are non-Japanese
16% of the board members of the Top 100 listed Japanese companies in Japan are female
19.6% of FTSE250 board members are female

Around 62% of the members of European and UK boards of of the Top 30 Japanese companies are European, on average. Companies whose boards in the UK and Europe only had Japanese directors were Toshiba, Fast Retailing (Uniqlo), Fujifilm and Sharp. Sharp and Toshiba’s troubles are well known. Fast Retailing recently reported struggles in the US market and falling profits in Europe for Uniqlo, Comptoir des Cotonniers and Princess Tam Tam. Fujifilm has made a remarkable transformation from a B2C camera film to a B2B imaging company but the last set of quarterly results, issued last month were deemed “mixed”.

(Note: only main boards, not executive or supervisory boards were analysed, and company secretaries were excluded)

The full chart is here (highlighted means “above average) and can be downloaded here :Top 30 Japanese companies in Europe board diversity Nov 3 2015

Only 17% of Japan’s CEOs have global experience thanks to takotsubo (octopus pot) appointments

Only 17% of CEOs in Japan have worked outside Japan, according to a survey of 2500 listed global companies in 2012 by Booz & Co. This compares to the overall global average of 45%, and is barely higher than China’s 15%. 25% of Japan’s CEOs have worked in another company (and I bet many of them are related subsidiaries or joint ventures of the Japan parent) whereas 86% of North American and 88% of Western European CEOs have worked elsewhere.

The Nikkei Business magazine quotes this survey, in an article (Japanese, subscription) speculating as to whether a new CEO can really help Japanese companies compete globally. The positive side to hiring from within, it points out, is that it encourages a competitive but also united spirit within the company, but the negative side is that it leads to a reluctance to make risky decisions such as undertaking M&As or restructuring unprofitable businesses.

Booz & Co also comments that “it will be difficult for a company headed by a senior executive who has not had to make tough decisions about subsidiaries and overseas operations to compete globally”. There are some signs that Japanese companies are aware of this judging by the appointments being announced for this April – for example Konica Minolta’s next President headed a US acquisition.

This “takotsubo” (literally “octopus pot” – a way of catching octopus by trapping it in a pot) management selection style means that Japanese companies are also not very adept at bringing in outside management experience. Shiseido has just hired the former chairman of Coca Cola Japan as its President and LIXIL has hired executives from Misumi and Calbee, but these are rare examples.

Similarly, most instances of hiring foreign executives (Sony, NSG) have not gone well. Only 1% of CEOs appointed in Japan over 2009-2012 were “foreign” compared to 17% in North America and 30% in Western Europe. As noted previously, it is not surprising there is much doubt as to whether Takeda’s new President, Christophe Weber, from GSK, will be able to buck the trend.

Last updated by Pernille Rudlin at 2022-06-22.

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