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Eyeing Japanese investmentsJapanese business missions may indicate possible expansion in economic cooperation
11 Aug 2014 Foreigners in Slovakia
SLOVAKIA has never been a traditional destination for Japanese investors, some of whom view this small country simply as part of a bigger central-European region. But the Slovak Investment and Trade Development Agency (SARIO) believes that Slovakia can serve as an entry point for Japanese investors into Europe. While the Slovak-Japanese Chamber of Commerce (SJOK) does not register any change in the interest of Japanese investors in Slovakia, SARIO reports growing interest among Japanese companies in investing in Slovakia.
“Slovakia is for Japanese entrepreneurs the gate into Europe,” SARIO’s Richard Dírer told The Slovak Spectator, adding that Slovakia has several positives that Japanese businessmen can utilise. “One of them is proximity to the Russian market and knowledge of the Russian language among part of the population.”
Dírer specified that last year Japanese investors focused their interest especially on the automotive industry and manufacturing of machinery and technology.
“The fact is that Japanese companies need to expand beyond their country,” said Dírer, adding that this is because the Japanese market does not provide them the opportunity to grow to such an extent. “The expansion of a company into Slovakia, as a country with a wide portfolio of EU consumers within the free market, is one of the solutions to this problem.”
According to the SJOK, in the past, Japanese companies in Slovakia operated mostly in the electro-technical industry, but this sector has declined significantly and as a consequence some firms have left the country.
“Currently, we are in a transition period and new stimuli is expected which would support new investments,” the SJOK wrote to The Slovak Spectator.
The SJOK stressed that Japanese investors do not have a special relationship with Slovakia and Slovakia is not high on their investment map. This is especially because Japanese companies traditionally invest elsewhere, much like Slovak companies, which also first invest in neighbouring countries and only then in countries outside the EU. Japanese companies focus first on Asia and only then the US, Australia and Europe.
According to the SJOK, the Japanese view Slovakia in the context of the whole region, as the economic relations of EU member countries are strongly inter-connected, and this is especially the case with neighbouring countries and the strongest economies.
“It is not completely possible to imagine a strong Slovakia without Hungary, Poland and the Czech Republic and vice versa,” the SJOK wrote, adding that a strong region is beneficial for everybody.
SARIO also cooperates with the Slovak Embassy in Japan and the Japan External Trade Organization, and this long-term cooperation has contributed to work on successful investment projects.
“Japanese companies explore very well the possibilities of where to put their new investments,” said Dírer. “They often address Japanese banks sitting in Europe to check opportunities for investing in neighbouring countries. This is why we established at the beginning of this year cooperation with a large Japanese bank sitting in Vienna, offering the aforementioned services to their clients.”
Between 2002 and 2012, SARIO helped 10 Japanese companies become established in Slovakia. These investment projects, valued at over €229 million, created almost 3,000 jobs.
“The strong position of Japan in the field of nanotechnologies and quality of production are two sectors which we consider to have the best prospects for Slovak-Japanese cooperation, as well as from the viewpoint of the potential for development of Slovakia,” said Dírer.
“On the other hand, Japanese companies would find in Slovakia a highly qualified labour force, which easily accepts the decisions of management and applies them to the process of production, ” said Dírer. “The automotive and electro-technical industry should be dominant sectors in which Japanese companies can establish themselves.”
According to the survey of the Japanese Embassy to Slovakia, 48 Japanese companies have factories or offices in Slovakia. These companies have created approximately 11,000 jobs in total and are contributing to the Slovak economy as well as the regions where they are located.
“We’d say all the Japanese investors here are significant,” the Political and Economic Section of the Embassy of Japan in the Slovak Republic wrote to The Slovak Spectator. “While there were Japanese companies that decided to withdraw, Slovakia attracted new Japanese investors, like Aoki Seiki Industry and U-Shin, last year. In Trenčín, the construction of a new factory by Akebono Brake Industry is underway.”
In this respect, the SJOK said that in addition to a pad manufacturing site in Arras, France, Akebono Brake Slovakia will manufacture brake components in a new plant in Slovakia.
The SJOK has not registered any change in the interest of Japanese investors in Slovakia, but also stressed that no bigger Japanese investors have arrived in the neighbouring countries either.
“This is a sign of possible expansion in economic cooperation, and we look forward to hearing the next news about new Japanese investments in Slovakia,” the embassy wrote.
Economic cooperation is a key part of the bilateral relations between Japan and Slovakia. Last year, Slovakia’s exports to Japan continued a growing trend and new investments were made by Japanese investors in Slovakia, according to the Political and Economic Section of the Embassy of Japan.
“However, we still see potential for further expansion in bilateral economic cooperation and, in this respect, we regard the workshop on advanced materials in Smolenice organised by the Japan Science and Technology Agency, the Slovak Academy of Sciences and International Visegrad Fund in July last year, as a positive development in science and technology cooperation, which could also have a good impact on our economic relations,” the embassy wrote.
The embassy sees the economic situation around the world, and Europe in particular, as greatly affecting bilateral cooperation.
“In this regard, it is good news that the European economy is showing signs of recovery,” the embassy wrote. “Positive developments have also been seen in the Japanese economy, since Japan’s Prime Minister Shizo Abe introduced the economic strategy for growth called ‘Abenomics’.”
“In order to further strengthen bilateral economic cooperation in the future, it is important that both Japan and the EU, including Slovakia, will continue efforts to lead this momentum to sustainable economic growth,” the embassy wrote.
Dírer believes that bilateral cooperation should also deepen on the basis of a signed memorandum of understanding between SARIO and JETRO.More from Foreigners in Slovakia
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