Kyushu Electric Power reported that it had recorded a loss of 90.5 billion yen on its consolidated account from April to December 2011. Major contributors to the loss were the long-term shutdown of the utility’s nuclear power plant and the increased purchases of fuel for thermal plants to offset their unavailability. The loss is likely to exceed 100 billion yen for the full fiscal year ending in March, the highest ever for Kyushu Electric. It will be the first loss suffered by the company in 32 years. They have decided to cut their dividend from 60 to 50 yen per share, the first reduction in nine years, and reduce corporate officer and director remuneration by 15% to 20% starting in February.
Toyota Kyushu expects to increase its vehicle production in FY 2012 to the 350,000 level, the company revealed. This is just under a 20% increase from the roughly 300,000 units the company produced in FY 2011, and will be the highest total in five years. The recovery from the impact of the Tohoku earthquake and the higher demand for the luxury Lexis model in North America are the factors behind the decision.
Kitakyushu-based Yaskawa Electric announced it will expand a new plant at its main site manufacturing industrial robots for the semiconductor, food products, and medical equipment industries. The objective is to strengthen the company’s manufacturing presence in growth sectors other than its mainstay businesses. Plans call for the new plant to begin operations in the summer of 2013.
The four automakers producing cars in Kyushu revealed that regional production for 2011 totaled 1.1757 million units. This was 3.8% higher than the year-before total, and the highest production in Kyushu ever. The increase came despite a temporary shutdown of the production lines after problems with the supply chain emerged after the Tohoku earthquake.
Ohga Pharmacy, which operates drugstores and pharmacies in northern Kyushu, presented its new business plan that calls for expanding the number of outlets from 73 to 100 and reaching 30 billion yen in sales by 2015. They also will begin selling food products at their suburban stores this year. In contrast, they will try to change the image of their outlets near urban cores to appeal to upscale customers by forming ties with salons.
Electrical construction company Kyudenko announced plans to open two business offices in Southeast Asia to extend their operations to that region. The offices will be located in Indonesia and Malaysia. The company has one overseas office at present in Taiwan, and hasn’t opened an office outside of Japan since it established a company in The Philippines in 2002 that was liquidated four years later.
Omuta-based Shingo Denzai, Kyushu’s only traffic signal manufacturer, will enter the outdoor illumination business and begin sales of products in May. They will use LEDs because they last longer than conventional lights and use less energy. The company hopes to achieve one billion yen in sales in this sector in three years.
Nissan Motor Co. revealed that its vehicle production in Kyushu for FY 2011 would total roughly 580,000 to 590,000 units. This is more than 100,000 units above the previous year’s total, and the most Nissan has ever manufactured in the region. The two primary models produced in Kyushu are an SUV for import and a minivan for the domestic market.
In an interview with the Nishinippon Shimbun, Fukuoka City-based Saibu Gas President Yuji Tanaka said the company was considering entering the electrical power generation business, to provide electricity to the existing utilities and corporations. It is part of their long-term vision for 2030, which will be the company’s 100th anniversary. At present, Kyushu Electric Power has a near monopoly on electric power generation in the region.
Credit card company JCB has announced the start of a service for holders of South Korean credit cards with which they are affiliated that would provide bonus points equivalent to 5% of the purchase amount for purchases at commercial establishments in Fukuoka City. The objective is to boost consumption by South Korean visitors to the area. South Korean cards provide bonus points at a level of .01% to 0.3% of the purchase price. The service will continue until May 15.
The Fukuoka Branch of Tokyo Shokoh Research revealed that bankruptcies of companies in Kyushu and Okinawa Prefecture with at least 10 million yen in liabilities for 2011 rose for the first time in three years. A total of 892 firms closed their doors during the year, a year-on-year increase of 4.0%. The aggregate amount of liabilities was 213.3 billion yen, a 24% increase. About 60% of the bankruptcies involved companies with liabilities of less than 100 million yen, and only four were for more than five billion yen.
South Korean low cost carrier Jeju Air informed officials in Kitakyushu that it would suspend regularly scheduled flights on its Seoul – Kitakyushu route and focus instead on a Seoul – Fukuoka route. The airline is waiting for the approval of both governments for the latter route, which it hopes to begin March 30. Airline officials denied their efforts for the Fukuoka route was a factor, but they also admitted the latter city had greater demand, as well as better access to the Shinkansen. Jeju Air began operating flights to Kitakyushu in March 2009.
Kyushu Electric Power subsidiary Kyuden Infocom (QIC) has created a Korean language website and will use it to sell Kyushu products to South Korea, starting on the 18th. The objective is to promote the appeal of Kyushu using products that are little known nationwide. The site is part of the Ministry of Economy, Trade, and Industry’s Cool Japan project to disseminate Japanese culture overseas. It is unusual for a website in Japan to be devoted to selling regional products in foreign countries.
The Kyushu Bureau of Economy, Trade, and Industry and the Kyushu Regional Agricultural Administration Office announced they would form a new council in March to promote the export of Kyushu’s agricultural products. The public and private sector is teaming up to boost the growth of exports to Asia in particular, as domestic markets continue to shrink. The two organizations will call on other economic groups and prefectural governments to participate in the council.
Jem Co. of Yamaga, Kumamoto Prefecture, which is primarily involved with organic fertilizer, will handle the greening work for one of the largest of the new Chinese eco-cities, Caofeidian, located on the Bohai Sea coast. Jem is a small company with only 30 employees, but the Chinese government was reportedly impressed by their soil improvement technology. They will be responsible for improving the soil in the district, which has suffered heavy salt damage.
The Nishi-Nippon City Bank of Fukuoka City announced the implementation of a new policy called Asset Direction, in which it will provide graphs and charts analyzing the assets that customers have entrusted to it, in a move to increase transparency. The service will be offered at some branches starting January 4th and at all 206 branches by the end of the month. The bank says it will be the first service of its kind in Kyushu.
Kitakyushu-based Yaskawa Electric announced they will build a robot production facility in China’s Jiangsu Province, which will begin operations in March 2013. Their objectives are to respond to the growing demand for robots in the newly emerging countries, avoid the risks of counterfeiting and natural disasters, and enhance their international competitiveness. They are the first major Japanese robotics company to establish production facilities overseas.
Fukuoka-based tmsuk, which manufactures and sells robots with medical and long-term healthcare applications, has formed a company in Taiwan with Haneda, a Nagoya trading company. The new company, called tmsuk Formosa, is headquartered in Taipei. It will manufacture robots for training dental and medical students, as well as electric wheelchair robots. They project 10 billion yen in sales in five years.
The Kagoshima Regional Economic Research Institute released the results of their study showing that the opening of the Kyushu Shinkansen this year has resulted in an economic benefit of 26.3 billion yen for the prefecture. They also reported a 14% increase in overnight lodgers from outside the prefecture. They also caution, however, that the number of lodgers will decline 2% next year as the novelty wears off.
The Kyushu Economic Research Center has released the results of its survey of foreign capital-affiliated firms with offices in the seven Kyushu prefectures, Okinawa Prefecture, and Yamaguchi Prefecture. There were 516 such offices in the region as of the end of September 2011, two and a half times the total in 2000. Companies from the United States accounted for nearly half, at 48%, followed by Germany at 17.3% and France at 6.6%
Lawson Farm Oita, an agricultural production company created by convenience store chain Lawson’s, has begun selling the tomatoes it has grown in the prefecture to the 42 of the 142 local Lawson’s outlets that sell produce. They expect to produce 20 tons of tomatoes by next February, and their sales target is seven million yen. This is the parent company’s fourth agricultural enterprise nationwide, and the second in Kyushu.
Fukuoka City-based discount store operator Trial Co. announced plans to open their first outlet in China in 2012. Combined with the 10 they already have in South Korea, the company would have more than 100 stores by 2014. They also established a subsidiary in the U.S. in October for developing and selling distribution management systems. Trial has the second-highest sales for discounters in Japan.
The Fukuoka branch of Teikoku Databank released its ranking of Kyushu/Okinawa companies in the food service industry by sales. The leading company for the eighth straight year was Fukuoka City-based Plenus, which operates to the Hotto Motto bento chain. It is worth noting that business remains strong for bento companies and other companies offering home meal replacements even though consumers are cutting back on restaurant meals.
Mentaiko manufacturing and sales company Yamaguchi Aburaya Fukutaro announced they will open a public bath/lodging/eating place complex in Sasaguri-machi, Fukuoka Prefecture, by the summer of 2015. They’ve already purchased an older facility on 24,700 hectares of land, and will begin remodeling and new construction work next year. The company is already operating two other restaurant/lodging facilities, one of which was a money-loser before they purchased it. Both are now profitable.
More than 9,000 new accounts have been opened at the Kitakyushu Bank, a member of the Yamaguchi Prefecture-based Yamaguchi Financial Group, since it opened on October 3. They are likely to exceed their initial target of 10,000 new accounts by the end of the year. One factor boosting the total was a special campaign conducted by the financial group’s subsidiary, Izutsuya With Card. If card holders shifted their card settlement bank accounts to Kitakyushu Bank, they would receive 2,000 yen worth of points that could be applied to shopping.
The presidents of five regional auto parts manufacturers and representatives from local universities held a conference in Fukuoka City to promote industry-academia ties and publicize the technology of those companies. The conference is one of the activities related to the new auto industry personnel training center due to open in the prefecture in April. They also pledged to work together to develop advanced technology in the future.
Aichi-based auto parts maker Taisei Plas has decided to build a new plant in the city of Iizuka, Fukuoka Prefecture, and signed an agreement to that effect with city officials. They are the first company to establish a plant in the city’s controversial Namazuta Industrial Park, which has been plagued by problems with the weak ground in the area. Work on the plant is due to start next June, and plans call for it to begin operation in January 2013.
In the 10 years since power purchases have been deregulated, most local governments are not tendering bids for power purchases that could reduce their operating expenses, and most continue to purchase their power from the large utilities. In 2010, Miyazaki Prefecture saved 60 million yen by purchasing more than 90% of its power from prefecture-owned facilities, but the level of purchases in the other six prefectures ranges from 10% to 20%. Fukuoka Prefecture purchased 10% of its power from these sources. The second-highest level of purchases was by Kagoshima Prefecture at 24%, and the lowest was by Nagasaki Prefecture at 4%.
The Kyushu Economic Federation announced the signing of memorandum of understanding with the Chinese General Chamber of Commerce, Hong Kong’s largest economic organization. The objective is to spur cooperation between companies and universities in the two regions. Kyushu is looking to Hong Kong as a destination for its exports, while Hong Kong is interested in Kyushu’s agricultural products and technology.
Consumer electronics mass merchandiser Laox announced plans to open their largest duty-free shop in Canal City Hakata next April. With a planned 4,500 square meters of floor space, it will be the largest duty-free shop in Kyushu. Their objective is to reap the benefits of the growing numbers of Chinese and South Korean tourists to the region, particularly with the increase in cruise ships from Shanghai calling on the Port of Hakata.
The Sasebo, Nagasaki Prefecture resort Huis ten Bosch released its financial results for the year ended September 2011, which shows the resort posted the first full-year profit in its 20-year history. It has been about 18 months since the large travel agency HIS assumed control of the resort’s business operations. Their success was attributed to a change in employee attitudes, the active promotion of new enterprises, and a growing preference of Japanese for domestic rather than overseas travel after the Tohoku disaster.
Toshiba announced it will restructure its semiconductor operations, and as part of that restructuring, it plans to close three plants by next spring, one of which is in Kitakyushu. They will also cut back on production at their Oita plant, and accelerate their shift of production to overseas locations. They plan to transfer the roughly 530 employees in Kitakyushu and 500 surplus Oita employees from the downsizing to other locations in Japan.
Fukuoka City-based Plenus, which operates the Hotto Motto chain selling takeout bento meals, announced they will establish a company in South Korea in January. That company would open the first Hotto Motto shop in that country in the spring. Their intention is to open 30 shops in that country in the next three years.
Kyushu Bureau of Economy, Trade, and Industry and the Kyushu Economic Federation formed the provisionally named Kyushu Global Industry Personnel Council on the 28th. The objective is to increase the percentage of foreign students studying in Kyushu who go on to employment at local companies. Participating in the council will be all the Kyushu prefectures, specially designated cities, regional economic groups, and universities. Statistics show that 17,488 foreign students were attending Kyushu universities as of May 2010, 12.3% of the national total. That same year, however, only 419 students had been employed at local companies, just 5.3% of the national total.
Best Denki, the consumer electronics mass merchandising chain headquartered in Fukuoka City, announced it is soliciting 300 people in house to accept early retirement. This is nearly 10% of the company’s 3,300-employee workforce. Best Denki already accepted 334 volunteers for early retirement in September 2010, but intensified competition with other companies has forced them to go through the process once again.
The Nishinippon Shimbun reports that the merger of the Tokyo and Osaka stock exchanges is likely to call into question the continued existence of the Fukuoka Stock Exchange, where trading has been slack. The creation of the larger stock market will bring about greater efficiency, so it is possible that many companies with stocks listed on both exchanges will delist from the Fukuoka exchange. There are now 119 stocks on the FSE, apart from the Q Board, roughly half the peak reached in 1997. Trading this year in the April-October period was down 12% from the previous year.
The Nishinippon Shimbun reports that competition among bookstores in Fukuoka City is intensifying. The main Iwata-ya department store reopened a large bookstore in the Tenjin area after eight years. Junkudo also plans to expand its Fukuoka City outlet in December. With the opening of the new JR Hakata Station building in March, there are now five large bookstores in the central part of the city, three in or near the station building.
Fukuoka City-based Reevo announced it will launch in the city next spring a rental car business based on a short-distance, single passenger electric vehicles manufactured by a Toyama company. It will employ a membership system also used by car sharing businesses. The cars have top speeds of 50-60 kph, and a maximum driving distance of 60 kilometers. The Ministry of Land, Infrastructure, and Transport says it will be the first business of its kind in Japan.
Nishi-Nippon Railway Co. will launch a major expansion of its supermarket operations. This will involve the opening of more Nishitetsu stores and Spina outlets, primarily in Fukuoka Prefecture, They are also mulling expansion through merger and acquisition of other companies, and the use of an Internet shopping/home delivery scheme. By 2018, they hope to boost their revenue from this sector 40% from 2010 to 100 million yen.
The Kyushu branch of the Development Bank of Japan released the results of its survey into the effect of the new JR Hakata Station building on local shopping patterns. The survey showed there was a sharp increase in the frequency of shoppers going to the Hakata area to shop, and a relative decline in the importance of the Tenjin district, Kyushu’s largest shopping area. While 75% of the survey respondents said they frequently went to Tenjin, compared to 25% for Hakata, those who said they went to Hakata for shopping more than once a month rose from 34.0% before the station facility opened to 51.5% after it opened.
