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Using Overseas Market Development to Power Iwate’s Recovery | Michiro Hayashi, Chief Director JETRO Morioka Japan External Trade Organization [Date of Issue: 29/February/2012 No.0204-0833]

Date of Issue: 29/February/2012

Using Overseas Market Development to Power Iwate’s Recovery

Michiro Hayashi
Chief Director
JETRO Morioka
Japan External Trade Organization

In Iwate Prefecture, various projects are underway to expand business as a means of supporting the area’s recovery from the March 2011 disaster. JETRO, for example, is channelling resources into business expansion overseas and offshore PR for companies in the prefecture. Steady progress is being made with efforts to develop new markets around the world toward a full-scale recovery of the prefectural economy.

On 11 March 2011, Eastern Japan was literally shaken by a disaster of historic magnitude—the Great East Japan Earthquake. With massive tsunami waves battering the coastline, Iwate stands alongside Miyagi and Fukushima Prefectures as the areas most severely affected in Japan. Various efforts are now underway by the local governments and other parties to restore the region, as reported regularly in the media.

One aspect of the recovery process is to strengthen local companies’ business foundations from an economic perspective. The Japan External Trade Organization (JETRO) which has offices in all prefectures of the Tohoku region, looked for ways that it could support the offshore market expansion of local firms as a means of contributing to recovery from the disaster.

Providing Business Opportunities toward Market Expansion Overseas

Utilizing its existing market expansion program as a base, JETRO used some of the funds earmarked in the supplementary budgets for disaster recovery and instituted some measures of its own to set up a number of projects that would be easily for local small and medium enterprises (SMEs) from the most heavily-affected areas to participate in. In some cases, programs were specially designed in response to local requests. Schemes in which Iwate companies participated are shown in the attached table.

JETRO's Programs Supporting Offshore Market Development in which Businesses in Iwate Participated
Business talks at Food Business Matching in Hong Kong

Business talks at Food Business Matching in Hong Kong

The Food Business Matching in Hong Kong noted in the table comprised a mission of eight Iwate firms and institutions handling prefectural foodstuffs. Absorbing around one fourth of Japan’s agricultural, forestry and fisheries exports (in monetary terms), Japan’s biggest offshore food market, and has long evinced a strong interest in Iwate’s food products. The mission was to provide chances again to advertise the superiority of Iwate Prefecture’s high-quality foodstuffs for local buyers in this important market. Since business matching events with local food-related buyers have been held annually in late October at the Hong Kong Japanese Club, JETRO made use of this opportunity. Under the program, the participating Iwate companies ware provided not only with the opportunity for foreign business meetings but also with individual consultations beforehand, a briefing by the our Hong Kong office, and a local retail market tour. JETRO worked hard to see that the mission did not end with abstract information but also provided an insight into the state of the actual market as well as relevant background knowledge.

Seven Iwate firms handling traditional products, daily goods and foodstuffs participated in the Business Matching in Dalian, China. While Iwate Prefecture and Miyagi Prefecture had been organizing business talks in Dalian for the past several years, the program had to be postponed last year because of the disaster. Given the circumstances, JETRO lent its full cooperation to set up a substitute scheme, working in close cooperation with both prefectures on preparation, planning and public relations. For example, the advanced business-matching setting with local firms, which forms the core of the program, was achieved with the close cooperation of JETRO Dalian and the prefectural Dalian offices. A wide range of channels were utilized, including the respective networks of companies that usually participate in the prefecturally-hosted business talks, as well as introductions from the Dalian municipal government, the local Japanese Chamber and local prefectural associations. Before this Business Matching, the participating Iwate companies were also provided with related information and special briefing opportunities, e.g. from an expert in Tokyo, on issues such as key points in beginning business with Chinese firms.

We can see that the projects bore fruit, sometimes even better than the ones targeted for other prefectures. In addition, many of the participating Iwate companies have previously had little interest in foreign markets, a fact which merits close attention.

Comprehensive Measures to Combat Rootless Radiation-related Reputational Damage

One repercussion of the March 2011 disaster which remains a major issue is the nuclear power plant accident. Iwate Prefecture was fortunate enough not to be severely affected by radioactive contamination. What is surprisingly very little known, even in the prefecture, is that the average environmental radioactivity level (air dose rate) in Iwate came in at the second lowest among all the 47 prefectures in Japan. The level has been read at the monitoring posts in every single prefecture every hour since the disaster, and the result shows that the only prefecture with a rate lower than Iwate has been solely Okinawa, isolated in the far south of Japan.

Despite this fact, there have been cases where Iwate products have been shunned due to rootless concerns over the radioactive contamination, perhaps because the image associated with Iwate’s location in the quake-hit Tohoku region has run ahead of the reality. In particular, immediately after the disaster, sales of not only food products but also miscellaneous goods and machine parts suffered. In a survey which Iwate Prefecture and JETRO Morioka launched regarding local companies’ business conditions as of late September, 26.2 percent of the respondents noted radiation-related reputational damage as a business problem. For respondents handling agricultural, forestry, marine or food products, that ratio rose steeply to 50.0 percent.

These really are unfounded rumours, and, moreover, serious ones. Recognizing that this prefecture stands in the front line in terms of taking the necessary countermeasures, and that such measures could have a substantial and practical effect, JETRO Morioka brought together information from Japan and all over the world and proposed comprehensive countermeasures. For example, in early May when the problem began to become marked, we worked with the Iwate Industrial Research Institute to hold a seminar on measures related to radiation-related reputational damage for international businesses. The seminar drew 110 participants, a scale that was extremely unusual for Iwate, and was the very first occasion anywhere in Japan on the theme. JETRO Morioka has now held eight such seminars and briefings in Iwate and around the country.

Communicating Local Facts Offshore

Unfortunately, however, the facts noted above—that businesses in Iwate are driving strongly toward recovery with their eyes on developing markets overseas, and that the radioactive contamination is basically only a rumour with little basis in reality—are not well-known overseas. To redress this situation, JETRO has also been actively working to inform people offshore of true conditions.

One such effort has comprised delivering correct information to media in other countries. For example, foreign journalists from China and Hong Kong were invited to Iwate in late July and in late September respectively. The information provided for journalists was not only on international business and industrial activities, but also on tourism resources, headed by Hiraizumi’s designation as a World Cultural Heritage site, which was reported back in China and Hong Kong.

In addition, the opportunity was created to introduce industrial and tourism resources from the three disaster-hit prefectures of Iwate, Miyagi and Fukushima at the Autumn China Import and Export Fair (also known as the Canton Fair), the largest trade fair in China and one of the biggest in the world. This plan originally grew out of agreement between the Japanese and Chinese governments, and the booth was visited by Chinese Premier Wen Jiabao and Japanese METI Minister Yukio Edano. Thanks to the high profile of these visits, the booth attracted considerable attention, including coverage by the mass media from not only China and Japan but around the world.

As is apparent from the above, companies in Iwate Prefecture are making steady progress in developing offshore markets on the way to locking in a full-scale recovery for the region.

(original article : Japanese)
(For the Japanese version of this article)

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