TT-609 -- Looking for Business After a Disaster, e-biz news from Japan

* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.
(http://www.terrie.com)

General Edition Sunday, April 10 2011, Issue No. 609

+++ INDEX

- What's New -- Looking for Business Opportunities after the Disaster
- News -- Tokyo Office Vacancies at Record High
- Candidate Roundup/Vacancies
- Upcoming Events
- Corrections/Feedback -- PTSD: Post Trauma Stress Disorder
- News Credits

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+++ WHAT'S NEW

In every cloud there is supposed to be a silver lining, and
in the case of the Tohoku-Kanto earthquake, the silver
lining is the massive reconstruction effort that the
government is planning. Estimates are that the nation will
spend around JPY25trn (US$300bn approx.) to re-establish
the communities and businesses destroyed by the quake and
the tsunami. This will mean raw materials for at least
30,000 temporary homes over the next two months, and 60,000
units by August -- even before the main reconstruction
effort and possibly millions of tons of wood, concrete,
steel, and glass are put to use over the next 2-3 years.

With numbers like these, of course many companies around
the world are wondering if there are opportunities for them
to participate in what will be the largest reconstruction
effort anywhere in the world for the next couple of years.
Among those already receiving advance notice of orders from
major trading houses and construction materials suppliers
are foreign suppliers of energy in the form of coal,
LNG/LPG, and oil; timber, especially glue-lam and plywood;
and metals such as iron ore, copper, zinc, etc.

But to cash in on a potential US$300bn rebuilding bonanza,
only companies that are plugged in to the Japanese
materials supplier network are likely to see much
opportunity. Partly because the Japanese are not likely to
reduce import standards or accept sizes and grades that are
unfamiliar, and partly because they are dealing with a
patient population of refugees who know it could be several
years before things are somewhat back to normal. Therefore,
with some extra time up their sleeves, the powers that be
will not feel pressured to step far outside their comfort zone.

And this is why when we see offers on various social media
sites, such as one that came up a few days ago on Facebook
-- a gentleman with 50 ready-to-go prefab housing units and
wondering how to get them in to Japan, we just thought to
ourselves, "Very, very difficult." Yes, Japan has plenty of
need, but the tsunami has not washed away national
characteristics, and the building materials sector was
always a tough space to compete in anyway.

So are there any opportunities to be had for foreign
suppliers and foreigners in Japan, as a result of the
disaster?

[Continued below...]

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------------------------------------------------------------

[...Article continues]

Firstly, there are very clearly a number of opportunities
in the short term for specialist suppliers. As we note in
our news section below, a Scottish firm named Aggreko has
landed a major contract with TEPCO to supply a number of
diesel and gas-fired portable generators for at least a
year, starting from June. The generators will provide
around 200MW of power, a drop in the bucket compared to
what's needed, but a good indication of the possibilities.
We can only imagine that there are other leasing companies
getting similar orders.

Then there have been many companies and organizations which
have lost all their infrastructure. While the government is
planning to offer low-cost loans for reconstruction, these
will probably come with significant hurdles for companies
that may have been struggling anyway, and so we imagine
that there will be plenty of opportunity for long-term
lease of capital equipment, particularly where the leasing
company controls what brand equipment is to be used -- thus
potentially breaking down decades old supplier-customer
relationships in return for cheaper rates.

Where would this be likely to happen? Well, for example, in
hospitals that have lost all their electronic equipment and
have to re-establish themselves. Indeed, with all the
injuries and suffering that has gone on in this disaster,
medical equipment seems to be a sure bet in terms of
demand.

Other opportunities involve soothing people's fears. A
company selling tsunami resistant refugee structures to be
built in the middle of coastal towns would seem obvious.
Not sure what these would look like, but as a model, most
towns already have fire lookout towers that extend 20m-30m
into the air, so maybe a concrete and steel version of that
but with a larger footprint and top platform areas would
work. Then, city offices investing in satellite phones
would seem to be another obvious opportunity. As we have
seen both in the major temblor than in the recent big
aftershock, no power and circuit overloads can mean no
phones, and the authorities at least need to maintain
communications.

Looking a bit further south, we have heard that many people
in Tokyo are worried about pending power restrictions and
blackouts and so are investing in wind and solar power
generation. Recent wind power generators operate with
gentle breezes and can easily fit on a small suburban roof,
producing 500W or so, which is enough when combined
with off-peak batteries to keep a small cooling system
going during the hottest days of summer. Indeed, if we
thought our landlord would be flexible enough, we'd be
looking at one of these for our office, as well.

Then, with all the charity scams going on, there is a clear
need for someone like www.charitynavigator.com to start up
in Japan and provide a ranking system to domestic charities
that are probably too small and under resourced to make it
into that company's international list. The Charity Navigator
organization is quickly becoming a referee to help larger
charity groups in the USA and elsewhere to channel their
funds, and yet you won't find any smaller but effective
local groups anywhere on their site.

But perhaps the biggest opportunities are going to be on
the periphery of the disaster, specifically, investments
and buy-outs of small and medium-sized companies in Tokyo
and surrounds that were already stressed by the weak
domestic recovery and which have now been knocked
on to their backsides by radiation fears, consumers' self
restraint, and impending rolling black outs this summer.
These companies are not going to get government funding
because they are too small, and/or too far away from the
directly affected areas. They will include any company
involved in entertainment, advertising and media, real
estate, hotel accommodation and general tourism, luxury
goods and services, and other businesses impacted by the
reduction in spending of activities seen as being
frivolous. In our opinion, this would be a very good time
for investment funds specializing in SMEs to be reviewing
Japan and moving in with offers of partnerships or majority
buy-outs.

...The information janitors/

***------------------------****-------------------------***

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Also, if you're thinking of Cloud office solutions, take a
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-----------------------------------------------------------

+++ NEWS

- Where there's a cartel there's a way, for OTC drugs
- Tokyo office vacancies hit record
- Japanese ambassador to Ivory Coast rescued
- New Australian ambassador to Japan named
- Large power generators order goes to UK

-> Where there's a cartel there's a way, for OTC drugs

Although the Health Ministry decided it didn't like Rakuten
and other internet companies making money out of drugs sold
online, it is happy to let anyone who wants to include
pharmacists to do so. So it is that the Home Medicine
Association through wholesaler Toho Holdings will be
selling drugs online, but include a twist -- Toho will
ship the medicines to a drug store for customers to pick
up. ***Ed: This makes a mockery of the Health Ministry's
internet ban, in that although the drugs are shipped via a
pharmacy, users are still unlikely to get any supervision
in how to use them. Toho reckons that they will be
shipping to around 10,000 pharmacists around the
nation.** (Source: TT commentary from e.nikkei.com, Apr 5,
2011)

http://e.nikkei.com/e/ac/tnks/Nni20110405D05EE994.htm

-> Tokyo office vacancies hit record

According to the latest commercial real estate survey by
Miki Shoji, office vacancies in Tokyo hit a record 9.19%,
the highest level since Miki Shoji started compiling data in
1990. The company said that the situation in Osaka, despite
firms moving some operations to that location, is even
worse, with a vacancy rate of 12.4%. ***Ed: Clearly we're
near the bottom of the commercial real estate market and
our take is that vacancy rates will stay at this level for
another 6 months or so, as the earthquake bankruptcies
start to take effect. After that, a recovery is likely, and
rents are likely to recover. So now is the right time to be
moving if you have that option.** (Source: TT commentary
from bloomberg.com, Apr 7, 2011)

http://bloom.bg/eFGCSX

-> Japanese ambassador to Ivory Coast rescued

While Tokyo may not have been so happy with the French
Embassy's decision to push all French nationals to evacuate
from Tokyo after the March 11th earthquake, all will have
been forgiven with the assistance that France offered to
Japan's ambassador to the Ivory Coast this last week. The
embassy in Abidjan was caught in the firefights between
defending Gbagbo loyalists and Ouattara fighters invading
the capital. French helicopters apparently landed on the roof
of the embassy and plucked the Japanese staff to safety.
(Source: TT commentary from afp at google.com, Apr 7, 2011)

http://bit.ly/hzgALm

-> New Australian ambassador to Japan named

The new ambassador to Japan replacing long-serving Murray
McLean will be Bruce Miller, who was named for the position
this last week. Ambassador Miller is no stranger to Japan,
having been posted to Tokyo previously from 1992-1996 and
2004-2009. He is a Japanese speaker and the Australian
newspaper says that he should be well-informed, since he
has been serving as deputy director of the intelligence
agency, the Office of National Assessments. (Source: TT
commentary from theaustralian.com.au, Apr 7, 2011)

http://bit.ly/hMCr1g

-> Large power generators order goes to UK

While many firms around the world must be hoping they can
share in the JPY25trn of rebuilding estimated to be
required in Tohoku through to Ibaraki, at least one firm
in the UK has already scored a substantial order for a
number of diesel and gas-fired generators that will deliver
200MW of power by June. The company, Glasgow-based Aggreko,
specializes in temporary power generators and will be
shipping the units under a minimum 1-year contract.
(Source: TT commentary from bbc.co.uk, Apr 4, 2011)

http://www.bbc.co.uk/news/uk-scotland-scotland-business-12956484

NOTE: Broken links
Many online news sources remove their articles after just a
few days of posting them, thus breaking our links -- we
apologize for the inconvenience.

***------------------------****-------------------------***

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-----------------------------------------------------------

+++ CANDIDATE ROUND UP/VACANCIES

=> BiOS, a Division of the LINC Media group, is actively
marketing the following positions for customers setting up
or expanding in Japan, as well as other employers of
bilinguals.

** HIGHLIGHTED POSITION

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Interested individuals may e-mail resumes to:
kenji.sakota@biosjp.com.

-----------------------------------------------------------

***------------------------****-------------------------***

+++ UPCOMING EVENTS/ANNOUNCEMENTS

------------- Entrepreneur Seminar in Tokyo ---------------

Start a Company in Japan
Entrepreneur's Handbook Seminar 23rd of April, 2011

If you have been considering setting up your own company,
find out what it takes to make it successful. Terrie Lloyd,
founder of over 13 start-up companies in Japan, will be
giving an English-language seminar and Q and A on starting
up a company in Japan. Over 450 people have taken this
course so far.

This is an ideal opportunity to find out what is involved,
and to ask specific questions that are not normally answered
in business books.
All materials are in English and are Japan-focused.

For more details:
http://www.japaninc.com/entrepreneur_handbook_seminar
-----------------------------------------------------------

------------------ ICA Event - April 21 -------------------

Speaker: Marc Einstein, Industry Manager - Frost & Sullivan
Title: APAC Mobile & Wireless Outlook in 2011

Details: Complete event details at http://www.icajapan.jp/
(RSVP Required)

Date: Thursday, April 21, 2011
Time: 6:30 Doors open, Buffet Dinner included and cash bar
Cost: 4,000 yen (members), 6,000 yen (non-members) Open to
all. Venue is The Foreign Correspondents' Club of Japan

http://www.fccj.or.jp/aboutus/map
-----------------------------------------------------------

***------------------------****-------------------------***

+++ CORRECTIONS/FEEDBACK

In this section we run comments and corrections submitted
by readers. We encourage you to spot our mistakes and
amplify our points, by email, to editors@terrie.com.

*** TT606 has spurred a lot of feedback. Many thanks for
this. As a reminder, we spoke about how the fear factor has
impacted life and work in Tokyo.

=> Reader One:
My family was directly involved in 9-11 and they took some
months and a little therapy to get "right" with the world.
I think Fukushima is no different. Actually, my step father
is a nuclear chemist and he has been saying since the whole
sordid affair began that the amounts of radioactivity are
negligible and not to worry. To quote him "7 times zero is
still zero". Not sure that helps you at all but it did set
my mind at ease to a certain degree.

Also, it is also important to remember that many in Japan
are now suffering from PTSD. You can get a very good idea
about how this affects people by reading about the after
effects of 9-11 on the residents of NYC. Being originally
from there I can tell you that my friends and family really
truly understand what is going on for us on an emotional
level. They don't panic or freak out, but instead offer
well thought out comments and food for thought.

Lastly, I wanted to share a link that a friend of mine sent
me about radiation. I hope it helps you understand the
situation even better, I know it has for me

http://xkcd.com/radiation/

=> Reader Two:

Great newsletter as usual. I just wanted to respond on one
point in your main article.

"In our part of town, in the shopping triangle represented
by Shinjuku to Shibuya and then through to Roppongi/Akasaka
there is still a lot less people shopping and eating out
than there usually are. Again, the average person is in a
state of nervous agitation and the last thing they are
thinking of is relaxing with friends at a restaurant or
buying new clothes."

I live in Kichijoji and it is a different story there. For
the first few days after the earthquake of course things
were quiet but for the past week the shops and restaurants
have been heaving with people. I'm not sure if people are
spending money as usual but they are certainly out and
about.

I think the reasons for the difference between here and
central Tokyo are:

1) This area is a big residential area and people don't
want to be spending time at home during difficult times
like these. A lot of people in Japan live by themselves so
prefer to go out and be with friends

2) People are leaving the city areas earlier and not
staying to go out with colleagues as they usually would but
returning to local neighborhoods and still spending money
there

3) The proportion of foreigners outside of central Tokyo is
much lower. Most of the people I see in Kichijoji these
days are Japanese and there is noticeable absence of
foreigners although the numbers were not that large to
begin with.

***********************************************************
END

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+++ ABOUT US

STAFF
Written by: Terrie Lloyd (terrie.lloyd@japaninc.com)

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