Japan eyes the Visegrad Four

THE VISEGRAD region is clearly marked on the map of many Japanese diplomats, business leaders, academics and tourists, who are carefully exploring the business and landscape details of the region, including those of Slovakia.

THE VISEGRAD region is clearly marked on the map of many Japanese diplomats, business leaders, academics and tourists, who are carefully exploring the business and landscape details of the region, including those of Slovakia.

While Slovakia is looking towards Japan with expectations of gaining additional investments, developing more exports to Japan or luring more Japanese tourists to visit Slovakia, Japan is seeking European partners to cooperate in areas such as development aid, energy security and conservation, nuclear technology for power generation, and even sharing the technology of Japan’s bullet trains.

Japanese companies have started viewing Slovakia as an optimal gateway to enter European Union markets as well as Ukraine and Russia, Dagmar Hlavatá of Slovakia’s Economy Ministry told The Slovak Spectator.

Hlavatá said last year’s visit to Slovakia by representatives of Nippon Keidanren, the Japan Business Federation, which has 1,600 member companies, confirmed the interest of Japanese companies in Slovakia. The representatives of Nippon Keidanren, who not only influence trade and investment decisions but also societal developments in Japan, met Slovak state officials as well as representatives of the Slovak Trade and Investment Development Agency (SARIO).

Peter Bohov, the chairman of the Slovak-Japanese Chamber of Commerce, told The Slovak Spectator that the global economic downturn has changed the way Japanese firms are planning their investments in central Europe.

“Before it was more typical that Japanese companies were planning their investments independently within their supplier and buyer relationships and mostly greenfield and brownfield investments prevailed,” Bohov said. “Today, in their efforts to eliminate possible negative risks linked to turbulence in the global market they are instead trying to find local partners. Through such partner firms, they continue securing supplies for their own customers. Such cooperation is regularly linked with investment from the Japanese side, mainly to the technological side of the firm, which of course brings along know-how.”

Bohov added that Japanese firms are also becoming more interested in the possibility of purchasing firms that have well-developed customer networks and in creating joint-venture projects. He also noted that a couple of small trading companies have come to Slovakia and he expects this trend will accelerate.

Japanese firms which are already operating in Slovakia in the electro-technical and automotive industry are expected to focus on preserving their positions as key suppliers, Bohov said.

Slovakia regularly organises business seminars and presentations to introduce Slovakia to potential Japanese partners.

“The Japanese market is very specific but it represents an interesting and potential market for Slovak firms,” Hlavatá stated.

“The Japanese market is characterized by its high consumption of food products, machines, raw materials, and consumer goods and there are prospective export items on Slovakia’s side in all these areas.”

Bohov said that Japanese investors, like those from other countries, perceive bureaucracy as one of the drawbacks of the Slovak business environment and as a real obstacle to dynamic development of business. He added that the process of arranging some of the required permits in Slovakia is frustrating not only for foreign businesses but for domestic ones as well.

Last year Sony's LCD TV assembly factory in Nitra, which had been the largest Japanese investment in Slovakia, was purchased by Foxconn, a Taiwan-based firm, he noted. Bohov also said the most important Japanese investments in Slovakia at this time are the facilities of Brother Industries in Krupina, SEBN-SK in Nitra, Dia Moulding in Nitra, Yamagata in Šurany and Panasonic in Krompachy.

According to Lucia Guzlejová of SARIO, there are approximately 50 companies with a Japanese presence operating in Slovakia, employing about 9,000 people. The established Japanese companies operate primarily in the electro-technical industry and in production of plastic and plastic components. Last November, SARIO co-organised its third investment seminar in Japan, which was also attended by representatives of Japanese companies currently operating in Slovakia who shared their practical experience of the Slovak business environment.

“Unlike the other seminars which were focused on the electro-technical industry and research and development, this meeting was devoted to the general investment environment in Slovakia and to a comparison of the performance of the Slovak economy before the eruption of the economic crisis and the current situation, along with predictions for the coming years,” Guzlejová told The Slovak Spectator.

The Japanese perspective

When reflecting on Slovak-Japanese relations, Daisuke Yamashita of the Japanese Foreign Affairs Ministry’s European Affairs Bureau in the Central and South Eastern Europe Division, pointed out that in the area of development assistance, Japan contributed to Slovakia’s development when the independent country emerged two decades ago, while noting that Slovakia is now an EU member and a donor country itself.

“We want to look into the possibility of cooperation [with Slovakia] in the area of developmental aid provided to other countries since we share common values in this area,” Yamashita told The Slovak Spectator.

Yamashita confirmed that Japan is interested in extending its cooperation with countries of the Visegrad Group (V4), of which Slovakia currently holds the presidency. Recently representatives from Japan attended a joint seminar on energy saving with V4 countries and a year ago another joint Japan-V4 seminar focused on climate change.

“The V4 countries share many characteristics and they are Japanese-friendly countries,” Yamashita explained. “When Japan aspired to become a permanent member of the UN Security Council the V4 countries supported its candidacy and we share the same values in many foreign policy areas.”

Yamashita noted that the Japanese business presence in this region is extensive: there are 253 Japanese companies operating in Poland, 240 companies in the Czech Republic and Hungary has become home to 120 Japanese companies.

He explained that there had been a trend for Japanese manufacturing companies to invest in this region but said the situation is now changing as V4 countries are reshaping their investment priorities and are trying to attract different types of investments. Yamashita stressed that there are several additional areas where V4 and Japanese business interests could intersect.

“Japan is geared towards cooperation in the area of energy security,” Yamashita said, adding that Japanese companies are seeking opportunities to export not only technology for nuclear power plants but also for things like high-speed trains. “When we talk about exports we do look at neighbouring Asian countries first, but we are now looking for opportunities in other regions as well.”

Yamashita noted that V4 countries have already absorbed a considerable amount of foreign investment which he said indicates that the investment environment of these countries is attractive enough for investors.

“I believe that if the economic climate in Europe is stable and predictable Japanese companies will consider additional investments in the region,” he concluded.

(Beata Balogová visited Japan last year through the Japanese Foreign Affairs Ministry’s programme for visiting foreign journalists)

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