Event Summary: Japan Business Forum 2012

On behalf of our co-organizers, JETRO would like to thank all our attendees for joining us at the Japan Business Forum: New Initiatives for Sustainable Growth on July 17, 2012. We had a great turnout with over 300 people, many of whom stayed to enjoy the networking reception.

We are sorry if you were unable to attend the event, however, with our speakers' permission, we have uploaded the presentations from the forum below.

Japan Business Forum a Tremendous Success:
Attendees Learn About New Policy and Developments in the Japanese Market

The success of the Japan Business Forum in New York was palpable on Tuesday, July 17^th, 2012. Attracting over 300 attendees and numerous reporters from international news publications, the Forum was well received by speakers and attendees alike.

With increasing governmental support for investment into Japan, the incentives for U.S. companies are growing, particularly with regard to renewable energy industries. For companies considering going to Japan, now is the time. The Japan Business Forum emphasized this, asking attendees to consider the many advantages of expanding to Japan and to learn about the country's new initiatives for sustainable growth.

Companies See Success as Japan Moves Towards Recovery

Senior Vice Minister for Reconstruction, Yoshinori Suematsu started off the event with a short video message and accompanying speech on the current state of Japan's recovery. He encouraged those looking at new opportunities in Japan to act now, emphasizing the many benefits of the Revised Strategy for Economic Revitalization (est. July 12, 2012). This new strategy sets a promising goal of $1.2 trillion in new market value and 3% annual growth rate gains for Japan through fiscal year 2020. So far, $23.8 billion in grants for reconstruction have been made available and newly improved incentives have been established for foreign companies. With approximately 96% of debris cleared from residential zones and the devastated region's transportation infrastructure almost completely restored, focus has turned to economically revitalizing the area. According to Mr. Suematsu, the government has already allocated $240 billion towards reconstruction as well as established the Reconstruction Agency and designated Special Reconstruction Zones to concentrate efforts. These programs, he explains, are part of an endeavor to move efforts "from recovery, to revitalization."

The first keynote speech of the day was delivered by Mr. Charles D. Lake II, Chairman of the Board of Directors, U.S.-Japan Business Council Incorporated and Chairman and Representative for Aflac Japan, who commented on the great potential for U.S. companies to succeed in Japan. Mr. Lake reaffirmed his belief that the Japanese economy has bounced back from the earthquake and is now showing growth thanks to the country's quick response to the disaster.

Charles D. Lake II, Chairman and Representative, Aflac Japan

Japan's New Foreign Direct Investment (FDI) Incentives

Hiroaki Ishii,
Deputy Director General, Cabinet Office

Mr. Takashi Nakamizo, Deputy Director in the Trade and Economic Cooperation Bureau for the Ministry of Economy, Trade and Industry (METI), further elaborated on the many advantages of the new FDI incentives. The new FDI measures, he explained, contain a range of very attractive support programs including: capital investment subsidies, tax reductions (corporate and individual), patent acquisition assistance, and regulatory support and exceptions in special zones. With these incentives, Mr. Nakamizo assured, the goal is to simplify the process of moving to Japan for foreign companies.

Opportunities for Foreign Companies in the Japanese Market

The second keynote speech of the forum was delivered by Mr. Takashi Hatchoji, Chairman of the Board of Hitachi America, Ltd., who spoke about the focus of Hitachi's reconstruction support and smart city strategies. According to Mr. Hatchoji, Hitachi's part in the reconstruction of Japan has come in the form of their smart city projects, which aim to build "safe, resilient, comfortable, and sustainable cities." A smart city, Mr. Hatchoji defined, is an "environmentally conscious city that uses information and telecommunication to utilize energy, transportation, and water as resources," and building 11 Future Cities (smart cities) has been an objective spearheaded by the Keidanren (Japan Business Federation) since before the earthquake. Since the earthquake, the focus in these smart cities has expanded from energy, education and citizen care, to include recovery and reconstruction planning. Hitachi is offering its expertise on energy, transportation, water management, and information telecommunication to build these smart cities. Mr. Hatchoji encouraged other companies to work together towards the reconstruction of Japan, asserting the critical role of private sector contributions in the continued success of Japan's recovery.

Mr. Hatchoji's speech was aptly followed by a panel discussion on "Japan's Path from Reconstruction to a New Energy Future."

Michel Di Capua, Head of U.S. Analysis at Bloomberg New Energy Finance, moderated the event and began the discussion with a quick look at the possible economic implications of the new policies, including lower system prices per watt and increasing IRR of renewable projects.

The panel, made up of three individuals from very diverse backgrounds, included Tatsuya Shinkawa, Lex Heslin, and Yoshikazu Nose. The first panelist, Tatsuya Shinkawa, is Chief Representative for the Washington D.C. office of the New Energy and Industry Development Organization (NEDO), the largest implementation agency in R&D and energy, environmental and industrial technology. Lex Heslin is CEO of Beautiful Earth Group, a renewable energy company which recently formed an office in Fukushima. Finally, Yoshikazu Nose is Senior Vice President for the Global Environment & Infrastructure Business Development Group of Mitsubishi Corporation America, a company with wide influence in a wide variety of industries.

(see below for summary of panel discussion)

Overall, the Japan Business Forum was a huge success. Many attendees stayed for the networking reception, and the positive response was overwhelming. If you were unable to attend and would like more information, please visit the event page to view the handouts from the event or contact us with any questions.

Panel Discussion

The following is a summary of the audience questions and responses during the Panel Discussion:

Feed in Tarrif:
How will FiT drive the growth of renewables? Can it fill the gap from nuclear?

Heslin: It's a big gap to fill, so it is hard to say. But, there are a lot of new renewable projects that are getting a lot of attention in Japan. Many great companies are entering PV on a large scale. But I don't think the nuclear industry will disappear completely anytime soon. I also think that it is surprising that there are not more U.S. companies trying to take advantage of Japan's FiT. Prices are much better in Japan with FiT than in California etc. I encourage more companies to go to Japan.

Is there already activity in different energy sectors? Do some sectors have more activity?

Shinkawa: Japan used to have a buyback program for excess energy, so even before FiT residential PV was growing. Now that the FiT is in place, we are expecting wind power and mega solar to expand rapidly.

Smart Cities:
What are some important aspects of smart city developments in Japan?

Lex: There is lot going on with smart city in Japan, maybe more than anywhere in the world. The Japanese government is focused on getting investment and technology into smart city development. Smart cities are about moving decision making power to the cities and integrating technologies. People are starting to realize that cities themselves can make a huge impact on improving the environment -- not just from the federal or national level.

How can U.S. companies participate?

Shinkawa: In the Kitakyushu project, IBM joined as Japan IBM. In feasibility studies, formation of the project depends on the region. Foreign companies can participate in feasibility studies by approaching regional feasibility teams.

Is it necessary to have a Japanese partner to enter the Japanese market?

Shinkawa: METI is the funding agency for these projects. There is a requirement that the main management company of a consortium must be a Japanese company. If the main management company is Japanese, any foreign company can join them. Heslin: In Japan, decisions are made at the federal level, so it is good to keep relationships with NEDO, JETRO, etc. In the U.S., you might speak directly with a mayor, but in Japan, the mayors do not make those decisions. It will be a smoother and easier process with the help of a Japanese partner. I strongly recommend working with a partner.

Financing:
What is the state of clean energy financing in Japan? How willing are Japanese banks to lend?

Nose: We have been supported by Japanese banks in our overseas projects. Banks are interested in funding big projects (>$100 million). But Japan does not have very large projects yet. Banks will not be interested if project is less than $50m. However, since Japanese banks are very familiar with project financing in the U.S. and Europe, I do expect that they will be willing to fund projects in Japan (can do in their own currency so expect to get better rates).

Lex: Japanese banks are good at project finance, but haven't had a chance to do it in Japan. I believe early deals from FiT will come from utilities, IPPs (independent power producers), & module manufactures who will do financing on their balance sheets. Manufacturers of inverters, racking equipment and others have a strategic interest in getting projects running. Many are subsidiaries of large companies, so they can do things on their balance sheets.

Opportunities for Partnerships:
What are some common barriers you can expect for U.S. players entering Japan?

Heslin: Language, culture, expense, length of negotiations, etc. A problem I often see is companies not putting the time and effort into it due to the companies' own failure to imagine their own long-term success in Japan.

What does Japan lack? What kinds of projects are you looking for?

Shinkawa: Due to electricity capacity limitations, Advanced Metering Infrastructure (AMI) and demand response may be good industries in which to seek new opportunities.

Heslin: The deregulation of the power industry in Japan presents a large market opportunity, especially in terms of separating generation from distribution.

Are there other areas for cooperation between U.S. and Japanese companies?

Nose: One important area is Japanese battery technology with energy saving technology used in U.S. grids.

Shinkawa: NEDO has a smart community project in New Mexico. Collaboration in the smart grid field in the U.S. and world markets as well as energy conservation building are good areas for collaboration.

Heslin: Beautiful Earth is looking at joint projects in Asia. Japanese trading companies know everything about the local area and market, so it's good to work with them in Asia. There are also good financing opportunities if you work with Japanese companies. If you source projects with Japanese and U.S components, you can use export credit agencies from both governments like U.S. Ex-Im bank and Japan Bank for International Cooperation (JBIC), in addition to OPEC and the World Bank.

Presentations

Keynote Speech: "Realizing Japan's Potential: A Business Perspective on the World's Third Largest Economy"
Charles D. Lake II, Chairman of the Board of Directors, The U.S.-Japan Business Council; Chairman and Representative, Aflac Japan
Download Mr. Lake's presentation

The Attractiveness of Japan and the Government's FDI Incentives
Takashi Nakamizo, Deputy Director, Trade and Investment Facilitation Division, Trade and Economic Cooperation Bureau, Ministry of Economy, Trade and Industry (METI)
Email Saori_Ezuka@jetro.go.jp to receive a digital copy of Mr. Nakamizo's presentation

Renewable Energy Panel Discussion: "Japan's path from reconstruction to a new energy future"
Moderator: Michel DiCapua, Head of U.S. Analysis, Bloomberg New Energy Finance
Download Mr. DiCapua's presentation

Panelists:

Tatsuya Shinkawa, Chief Representative, Representative Office in Washington D.C. of New Energy and Industry Technology Development Organization (NEDO)
Download Mr. Shinkawa's presentation

Lex Heslin, CEO, Beautiful Earth Group
Download Mr. Heslin's presentation

Yoshikazu Nose, Senior Vice President, Global Environment & Infrastructure Business Development Group, Mitsubishi Corporation Americas
Download Mr. Nose's presentation

Event Videos

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Event Photos

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