Where to Find Safe Food??

Written by Terrie Lloyd for Terrie’s Take.

On July 4th we wrote a piece joining the dots on radiation concentrations in places around Tokyo where there　 should not be any. It seemed to us that radioactive nuclides, like non-radioactive heavy metals, appear to be able to be concentrated under certain circumstances and therefore even though the atmosphere registers as clean, perhaps we should still be worried about our food supply.

That article generated a lot of response, especially from readers with children, wondering what they could do to limit possible exposure to contamination. Normally we don’t stick to a subject like this — we like to move our focus around a bit. However, barely ten days after our Take, it emerged in the Japanese press that in fact cattle from Fukushima which tested clean on the outside were found to have 2,300 becquerels per kilo (2,300 bq/kg) of Cesium-137, about five times the legal limit, when slaughtered. What’s
worse, over one ton of the meat found its way into the food supply, being sold all over the country.

Since then a number of other disturbing “finds” have arisen in the press, indicating that not only were there some very ill-informed decisions made by authorities as to what to do with animal products (meat, milk, fish) in the period immediately after the explosions at the Fukushima plant, but that there still seems to be some sleight-of-hand going on for government food health statistics.

The latest thing to catch our attention, which we appreciate receiving from the well-informed folks at www.safecast.org, is the news that contaminated milk from Fukushima has been mixed with product at factories located as far as the northernmost parts of Tohoku. So if you thought you were buying from a safe producing area, the milk authorities have had different ideas.

This milk mixing revelation, so far unsubstantiated, comes from a Prof. Takeda in his blog, but it appears to be backed up by a Sankei newspaper article revealing that the authorities stopped monitoring Cesium levels at individual milk producers in April, and instead started monitoring cooling stations where the output comes from many farmers, including those from safe areas. Naturally the numbers were evened out and those farms with “hot” output were no longer obvious as they got diluted with less-contaminated product. Thus it was that on April 26 the ban on the sale of milk from Fukushima was lifted.

If you want to see which brands have been engaging in this dubious practice, go here.

OK, so we have the authorities trying to keep the dairy business in Fukushima going through what we think is a quite unethical practice. We suppose that in a twisted logic sort of way, their rationale of diluting dirty product with clean makes sense, since it keeps radiation numbers below the limits. But would you drink it if you knew this?

Our take on what to buy, what to avoid:

1. Leaf and Root Vegetables
The advice we’ve had so far is to generally avoid any vegetables from Fukushima and possibly northern parts of Ibaraki. If you can’t do this, and often vegetables are not labeled as to their source anyway, then you’ll be wanting to eat veges that grow deeper in the ground (Cesium tends to stick to the top 5cm surface layer) or better still, eat hydroponically grown veges for a while. There is a plentiful supply of hydroponic Romaine lettuce, sprouts, rucola, sunny lettuce, and other veges.

2. Rice
More concerning in a couple of months time will be new harvest rice. It seems that rice planting was given the go ahead in Fukushima after what appears to have been faulty soil testing procedures. The government cut-off for soil samples is 5,000 bq/kg of Cesium-134/137, and the Fukushima government was getting 4,000bq/kg in their samples. However, they were taking samples 5-15cm deep, while Cesium sticks to the surface. Apparently a rice farmer took a sample from the top 5cm of his land rather than below that depth and had it independently tested. He found it was contaminated to the tune of 35,000 bq/kg!!! Documented here.

Incompetence? Purposeful manipulation of the tests? Hard to say, but our advice about rice is clear. We would stock pile with last year’s crop, before the new Fukushima product makes its way into the food system. Rice keeps forever in the fridge anyway, so we advise buying some month’s supply and let the media do the sleuthing of whether or not the new season’s product is safe or not.

3. Mushrooms
We would stay away from mushrooms that come from Fukushima and any neighboring prefectures to the West and North — since this is where the wind patterns blew some of the Cesium-137 from the explosions. Mushrooms with gills, such as shiitake, are apparently very efficient at absorbing nuclides due to their not having roots and stems. Wild mushrooms near Chernobyl are still showing up with contamination 25 years after the event.

4. Fruits
The best thing about summer is peaches, and fall the apples — two kings of Japanese fruit growing industry. Our guess is that only a small quantity of these fruits are grown in Fukushima and surrounds, and considering the volume you’d be eating they pose a low risk. However, berries of all types grown outdoors in and around Fukushima-ken should probably be avoided — these are another source of contamination from Chernobyl experience.

5. Proteins
Probably the biggest concern is about milk. As mentioned, it has come out that the milk authorities have been mixing Fukushima-sourced product with clean milk from other areas, presumably so as to dilute it. We ONLY buy milk that expressly says it comes from Hokkaido right there on the packet. Our rationale is that it would constitute false advertising if they were to mix it with product from somewhere else.

Fukushima is a major producer of eggs and pork, which we would avoid for the time being, unless they’re labeled as being from somewhere else, or are imported product. What to do with beef is less clear, despite the scandal over mixing contaminated product, because public awareness will probably keep supplier shenanigans to a minimum from now on. However, thanks to the fact that Japan imports so much of its food anyway, as one consumer said on TV recently, “If it’s Aussie beef, I’ll eat it.” Yup, you have plenty of alternatives. Try Costco if you want foreign food.

No one seems to know what to do about fish. Personally, we’d stay away from fish that obviously comes from the area, Sanma (Pacific Saury), etc. Instead, it’s not that hard to stick to imported salmon, colder water fish such as Hokke (Mackerel) which comes from the Sea of Okhotsk, shrimp, and other varieties that are unlikely to be locally sourced.

6. Bread and Processed Soy Products
Most of Japan’s cereals are imported, particularly flour (wheat), so we think these products are safe. Soy on the other hand may wind up being a “mixed bag” (like milk?). Right now about 2/3 of Japan’s soybeans come from abroad, primarily the USA and South America, but of the remaining 1/3, 25% comes from Tohoku. We don’t know how much comes from Fukushima in the south, but our guess from agriculture production figures, is that it’s not much.

7. Local Organic and Traceable Sources
If you are particularly concerned about source of produce, then consider shopping online. If you use Radish Boya (http://www.radishbo-ya.co.jp), an organic food supplier which is extremely popular and well priced, they state where the food comes from. Lots of Ibaraki-ken sourced product, though, so we’re not sure how good this is. Other prefectures where they appear to have contract farms producing in large volume are in Chiba and Gunma — both of which had less exposure to the fall-out from the explosions. Radish Boya also tests its food for radiation and generally to date they have been reliable with food safety awareness — their brand would be destroyed overnight if they weren’t.

8. Kyushu sourcing
If you are really concerned, then you could consider sourcing from Kyushu and other further locations. Here are some links to such sites. Again all in Japanese.

www.green-grace.co.jp
www.vegetaberus.com
www.k-vf.com

Lastly, we wish to keep things in perspective. At the levels Cesium is being detected in our food in and around Tokyo (versus right next to the Fukushima plant), the situation appears to still be safe for adults. As an indication, the US government says that if 100,000 people were continuously exposed to a layer of soil with an initial average concentration of 1 pCi/g (by our calculations, about 37bq/kg) of Cesium-137, then 6 individuals would be predicted to die of cancer that could be related to the exposure. This compares to about 20,000 people who would die from other types of cancer (US average). The Japanese limit for food is 300 bq/kg, and in eating such food, you would be excreting most Cesium-137 nuclides within 30 days.

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Terrie Lloyd.
COO of BiOS, Inc.
BiOS, Inc.

Looking for Business After a Disaster

Written by Terrie Lloyd for Terrie’s Take.

In every cloud there is supposed to be a silver lining, and in the case of the Tohoku-Kanto earthquake, the silve 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?

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.

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Terrie Lloyd.
CEO of LINC Media, Inc.
BIOS Inc.

Budget Airlines Change Things

Written by Terrie Lloyd for Terrie’s Take.

The announcement two weeks ago that the Narita International Airport Corporation will reduce their landing charges is certainly a sign of the times. The NIAC (used to be called the NAA) is going to drop fees at least temporarily from ¥310,000 per aircraft to just ¥50,000 — a whopping reduction of 86% and enough to push decision makers of a certain type of carrier to decide Narita over Haneda.

Which type of carrier? Well, probably the only type that will see substantial growth out of Japan in the future — budget carriers. The impact of the JAL bankruptcy, the recent Open Skies agreement with the USA, and also Haneda airport’s opening of its fourth runway in October, have all had a dramatic effect on how air travel is run in Japan. The authorities are now, belatedly perhaps, realizing that they have to get competitive, or they will get left behind by Incheon (S. Korea), Singapore, and Shanghai as air hubs in Asia.

Last month, the NIAC announced that it will construct a new terminal for low-cost carriers in an effort to attract the budget airlines to use Narita over Haneda. In line with its construction plans, Narita will also increase landing/take-off slots by 10% (to 330,000) in FY2011, and up to 30% more by FY2014. Of course, that will only occur if they can attract the air traffic volumes, and therefore Narita’s efforts can’t go unaided by the government’s continuing push for tourists. As a comparison, Haneda currently offers about 60,000 landing/take-off slots annually.

There is nothing like competition to cause old organizations to change, and it’s good to see this happening at Narita. They are certainly going to have some catching up to do, as budget air travel seems to be the wave of the future, and Haneda and other airports in Japan are already attracting some high volume players.

First of the budget airlines to use Haneda will be AirAsia X from Malaysia. The airline will launch a route from Haneda to Kuala Lumpur in early December, and reckons that its flights are already 90% full for December, and over 80% for January. AirAsia X is going to start with 3 flights a week and expects this to increase to daily flights. Already the company has applied for a second route between Osaka and KL.

JTB knows a good thing when it sees it, and is marketing low-cost package tours with AirAsia X. You’ll be able to go for two-nights, four-days, including accommodation, for just ¥30,000. These prices are about 40% lower than other travel agencies are offering using aircraft out of Narita. OK, yes, the flights will leave Haneda at 11:45pm and get you into KL at some ungodly hour in the morning, but at ¥30,000, these are going to be snapped up. Budget travel agency HIS would have to be concerned about this tie-up and also the fact that JTB is now going after the low-cost traveler who was once HIS’ domain.

Another budget airline, which is only just being established and doesn’t yet have a name, is a joint venture between ANA and First Eastern Investment Group announced back in September. This airline will start operations in the second half of FY2011, meaning this time next year, from its Osaka hub. It will compete for low-cost passenger traffic both within Japan and also between China and Japan and Korea and Japan. On the international side of things, this j/v doesn’t come a minute too soon as ANA experienced a 7% decrease in passenger volumes in November (compared to last year).

Another concern for existing players in the air travel industry is that likely change of destination for Japan’s holiday makers. Whereas JetStar and Australia were offering some of the best access to warm climates and great holiday destinations, AirAsia X and some other budget operators still in the pipeline are going to be diverting Japanese out-bound traffic to new locations. Actually, we see Hawaii suffering from the incursions of Asian budget airline operators as well. These more traditional locations are going to have to work on their marketing to keep their numbers up.

So the advent of budget airlines being able to operate into Japan should bring some interesting changes in inbound tourism. Until now the Japanese government seems fixated with China, but with the availability of great deals like AirAsia X’s, this means that tourist traffic from other countries is likely to soar as well. This can only mean greater demand for budget accommodation, and those hotel and hostel management companies who’ve been hurting since the exodus of western foreigners, and who are not on the Chinese tour agencies’ approved lists, will see some welcome respite.

It will be interesting to see also, to see if the surge in travelers pushes up the price of real estate for ski resorts, hot spring areas, and downtown Tokyo apartments, whether the interest of Chinese buyers in the last couple of years, is just a blip in the big scheme of things.

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Terrie Lloyd.
CEO of LINC Media, Inc.
BIOS Inc.

Poverty Amongst Young Adults

Written by Terrie Lloyd for Terrie’s Take.

There was a disturbing news item in the Nikkei this week about many young singles in Japan falling below the poverty line and having to live at home to make ends meet. While the world was fascinated with parasite singles some years ago, it seems now that many young people are forced by the economy rather than by choice to live with their parents.

According to the Labor Ministry, which is starting to reveal facts and figures about poverty in Japan that were previously kept quiet by the LDP, fully 69.7% of young singles aged 15-34 who work outside of full-time employment are unable to support themselves from their job income alone. Since 32.9% of Japan’s 64m-person employed workforce consists of people aged 15-34, and about 1/3 of them are part-time or contract workers, then we can surmise that somewhere around 4.4m young people are unable to live from their work incomes alone.

The report notes that most of those people unable to support themselves through their jobs are working in the IT, communications, hospitality and food services industries. No surprise there. IT may sound technical, but on the low end you are talking about help desk work that essentially consists of being nice on the phone and learning some basic responses and escalation strategies. Waiting tables, tending bars, or flipping burgers are famously underpaid in any country, but with no tipping system and plummeting patronage, it makes more sense to go live in Okinawa on the beach and register as unemployed for a while.

41 of the nation’s 47 prefectural governments have just set the minimum wage numbers for their workforces, and in Tokyo this was set at ¥821/hour, up 30 yen from last year. At that rate, a person working 160 hours a month would make ¥131,360, barely enough to pay rent, food, and transport, and not much more. Yes, this is the minimum wage, but if you look at what part-time work is paying recently in the arbeit magazines, the going wages are not much more than this.

Indeed, a recent poll by employment information company DIP found that nationwide temps (and these are the better jobs which yield sufficient profit for the temp agencies to be brokering them) were earning ¥1,349/hour in July, down 0.7% over the month before. Employment agency Recruit found through its survey that the nation’s average income for temp workers in June was ¥1,450, the 24th straight monthly drop.

These numbers do put a worker above the poverty level, but not by much. And if you’re in hospitality or similar area of business, then the chances are that if you’re under 30, you’re also under the ¥2m/year poverty line.

The problem is that in days gone by, kids with lesser education could still access a stable job by first sweating out an entry level position in office administration. Over time and with hard work, these positions would convert into regular employment and maybe management responsibility. However, with the difficult economy, companies other than some exporters are still cutting their back office positions significantly.

And things are probably going to get worse, not least of which because of a growing trend to outsource lower end work to other countries. You have companies such as InfoDeliver, a Tokyo-based Business Process Outsourcing (BPO) firm that plans to increase its office staff in Dalian to 2,000 Chinese nationals by the end of this year. The company outsources Japanese-language data entry, accounting, and HR tasks from insurance companies and took ¥1.74bn of orders last year. This year it plans to record revenues of ¥3.32bn — a two-fold increase.

There are many other players in this space, including the likes of Transcosmos (300 employees planned in Suzhou), Pasona Tech (200 employees in Dalian), and Nomura Research, with an undisclosed employee headcount. Research firm Gartner reckons that the Japanese BPO market last year was worth around ¥1.28trn, and will hit 1.45trn in the next four years. Fewer of those jobs will go to the current temp and contracting generation of workers, and thus the spiral will worsen.

There is something seriously wrong when young workers can’t support themselves. Yes, in any country, getting started with your working life when under educated is a struggle. But given that these same people comprise 1/6 of the tax base for Japan’s future generations of retired people, one wonders how things are going to turn out?

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Terrie Lloyd.
CEO of LINC Media, Inc.
BiOS – A Division of LINC Media, Inc.

Tokyo Gaming Show 2010

If you’re a game lover then you know that September is a can’t-let-it-pass-unnoticed month on your calendar! Tokyo Gaming Show 2010 is on in less than 2 weeks and despite following a year-over-year attendance drop-off in 2009, organisers of this year’s TGS are doing their best to attract punters to the Makuhari Messe halls from September 16 – 19.

At TGS 2010, new and renewed exhibition corners will be introduced, including new eight zones to meet visitor’s needs as well as to celebrate its 20th anniversary!

Here is a brief idea of what you can expect from this year’s TGS 2010:

• General Exhibition Area
Showcasing digital entertainment-related products and services, including game software.

• Merchandise Sales Area
Dedicated to selling game-related products. From this year, sales of game software will be allowed to companies (publishers) who are also exhibitors in the General Exhibition Area or other areas.

• Family Area
This area will exhibit home-use and arcade video games, game related goods and services targeting children. From this year, there will be no limit on the number of game machines to be exhibited. The area will be opened to a wider range of exhibitors, also allowing sales of game-related goods targeting children at the booths. The aim is to make the area more enjoyable for families with children.

• Game School Area
This area will introduce game-related schools for our future creators.

• PC Online Game Business Area
This area will provide opportunities to present and discuss licensing, sales, and partnership regarding PC online games. Regardless of the size of the booth, this will surely prove to be a cost-effective means for exhibitors to promote products to general consumers as well as to businesses.

• Game PC Area
Introducing high-performance game PCs, mother boards, graphic boards,processors, memories, and HDD for game PCs, as well as original game PC products and PC game software.

• Audio-Visual & Gadget Area
For display of audio-visual equipment and gadgets to enhance the game-playing environment, including 3D
television, LCD and plasma televisions, 5.1ch audio systems, headphones, controllers, and chairs specially manufactured for game playing.

• Mobile Area
This space provides for exhibitions of mobile phone contents and mobile-related products (including accessories and peripheral devices) designed for mobile terminals such as iPhone, Android, and Windows Phone.

• Business Solution Area
This area dedicates to B2B purpose.

• International Career Pavilion
To meet the global need for hiring new talent by providing opportunities for companies and visitors from Japan and abroad to meet prospective employers and employees.

TGS 2010 Exhibitor List
• Alchemist
• Capcom
• Konami
• Square Enix
• Sega
• Namco Bandai Games
• Microsoft
• Level-5
• Arc System Works
• Ignition Entertainment Ltd
• Tecmo Koei Games
• Konami
• The Behemoth
• Square Enix
• Sega
• Sony Computer Entertainment
• D3 Publisher

Tickets are also available for purchase online. Click on the button below to purchase your ticket(s)!※Please note that you will be redirected to another site and BiOS has no liability on the policies governing the selling of the tickets

And if you are still wondering how to get there then click HERE for maps and directions.

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Alex Kawano.
Official BiOS Blog Author
BiOS – A Division of LINC Media Inc.

Brazil Festival @ Yoyogi Park This Weekend

Bringing the vibrant, dynamic culture of contemporary Brazil to the heart of Tokyo, Brazil Festival celebrates the country’s rich cultural heritage – including music, visual arts, dance, literature, debates and food.

A collaboration between Câmara de Comércio Brasileira no Japão (Brazil Chamber of Commerce Japan) and related sponsors, the V Festival Brasil 2010 – A Brazilian Day features performances by the legendary rock band Kid Abelha, TV star Serginho Groisman, Pagode do Ramos (former soccer player in Japan) and much more.

Enjoy an exclusive taste of Brazil this summer: from samba to traditional moqueca and xinxim, an array of caipirinhas, food markets and outdoor stalls, you’ll find a feast of Brazilian food, drink and gifts.

September 4 (Sat) Program Schedule
13:30 – 14:00	Opening Ceremony
14:00 – 14:10	Girl Brazilian Day Pageant Contest – Semi Final
14:10 – 14:20	DJ
14:20 – 14:50	Band Via Brasil (MPB)
14:50 – 15:00	DJ
15:00 – 15:10	Girl Brazilian Day Pageant Contest – Final
15:10 – 15:20	DJ
15:20 – 15:50	Chiquinho (MPB, samba, Pop)
15:50 – 16:00	DJ
16:00 – 16:20	Garota Brazilian Day Winner Award
16:20 – 16:30	DJ
16:30 – 17:00	Serginho Groisman
17:00 – 18:00	Rock band – Kid Abelha
18:30	End
Sept 5 (Sun) Program Schedule
14:30 – 14:40	DJ Jin Nakahara
14:40 – 15:20	Brazilian Art – Drum and dancers
15:20 – 15:30	DJ Jin Nakahara
15:30 – 15:50	Silvio Anastácio – Passion (MPB)
15:50 – 16:00	Musica Passion
16:00 – 16:10	Ruy Ramos (former soccer player)
16:10 – 16:40	Pagode do Ramos
16:50 – 17:00	DJ Jin Nakahara
17:00 – 18:00	Kazufumi Miyazawa (THE BOOM / GANGA ZUMBA)
18:30	End

Check out the map below to learn how to get there:

View Larger Map

Access: JR Harajuku Station / Yoyogi Koen (Metro Chiyoda Line) Station / Yoyogi Hachiman (Odakyu Line) Station

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Alex Kawano.
Official BiOS Blog Author
BiOS – A Division of LINC Media Inc.

Local Foreign Entrepreneurs Earn M&A Windfalls

Written by Terrie Lloyd for Terrie’s Take.

It’s been a busy week for foreign company owners selling their businesses. While your average Japanese CEO might want to turn his company into a lifetime affair, there is plenty of opportunity in M&A-hungry Japan for enterprising foreign entrepreneurs to sell locally.

First up, on August 20th, was the announcement that private equity firm Appreciate, led by Hiroyuki Kurihara, bought the H&R Consultants and ReloJapan businesses off Oak Lawn Marketing for an undisclosed sum. Appreciate has purchased 100% of the operations, and this transaction ends an 18-year association between H&R and its founders Harry Hill and Robert Roche. The businesses will still be run by the very capable Steve Burson, however, and will continue providing the same high-grade real estate and relocation services they have done over the last two decades.

We asked Harry why he sold the firm. He responded that since NTT DoCoMo bought out a majority stake in Oak Lawn Marketing, one of Japan’s largest direct marketing and TV shopping companies, the compliance environment that came with DoCoMo, as a public company, has meant that keeping H&R as a group business has become increasingly expensive and time-consuming. This is of course understandable, and we assume represents the natural evolution from small to big, an evolution which only gets interrupted if the owner decides to jump out altogether and retire to a deserted island some where…!

The H&R story is truly one of a bootstrapped start-up, and should be an inspiration to other young entrepreneurs thinking about starting a company in Japan. We asked Harry Hill to give us the start-up story in a nutshell. He responded: “H&R Consultants was founded in January of 1991. In December of 1990, Robert Roche and I met at the inaugural meeting of the American Business Community of Nagoya (ABCN), which became the Chubu Chapter of the ACCJ 10 years ago. Robert was one of the organizing members. At the time he had a company called Robert Business Consulting (RBC) and I had a company called Hilco International. We had both just hung a shingle to do business and were pretty much ready, willing and desperate to create business.”

“This was the height of the US Japan Trade Friction years and there was tremendous pressure on Japan and Japanese companies to buy US [products and services]. This created a big rush in joint venture projects between the major aerospace companies, with Boeing, Raytheon, Pratt and Whitney, General Dynamics, Lockheed Martin, etc… all announcing joint development deals that required US engineers and their families to relocate in Nagoya. The first meeting of the ABCN essentially was Robert and myself, representing local, young and hungry entrepreneurs, hosting a forum for executives from the aerospace industry.”

“At the time, the representatives were estimating an influx of 200 families within an 18 month period. Robert and I looked at each other and realized we could either hate each other or become partners. We chose the latter and H&R Consultants was born. While H&R was never Robert’s nor my primary business, during the first 5-6 years of its existence it provided both of us with steady supplementary income that was essential to survive. Robert and I were very involved in the operations, sales, and day-to-day business for the first 6 years, but over time an incredible group of dedicated, hard working and motivated individuals from Scott Reid, current managing director for brands at OLM, to Steve Burson, have taken over H&R.”

“Over the years, in addition to housing and relocation, H&R was involved in marketing of international telephone services and satellite television sales to expats. As well, we invested in a 2X4 house builder and import construction materials company…! While humility is one of Robert’s and my more under-stated attributes, the hands-on experience we gained in the early years by being on 24-hour call taught us humility and gratitude to all the companies who gave us a chance at the beginning of our careers. We are indebted to the ABCN (now the ACCJ Chubu chapter) members who gave us a chance and this has inspired us to want to mentor and provide opportunity to this generation of entrepreneurs coming of age in Japan. Certainly here in Nagoya, I believe that both OLM and H&R has been open to giving a foreign entrepreneur a shot.”

While the price paid by Appreciate for H&R is not public, Harry did say: “The price is not public, but Robert and I founded H&R as a Yugen Kaisha. H&R pretty much supplemented our incomes at a nice annual salary per year until 1999 when we sold H&R to OLM for JPY120m. OLM has steadily received dividends and sold H&R for a healthy capital gain, so over the years H&R has certainly generated several hundred million yen off of an initial investment of JPY3m.”

The next deal is that of Wall Street Associates, owned and run by Nick Johnston. Nick founded WSA in 2000, and although in a mature industry without the advantage of a dotcom model, he has been able to build up his business over the last 10 years to an impressive level. The main tools he has had at his disposal are: focusing on growth segments of the market, leveraging with mass (recruiters and clients), running the operation at a very personal level and staying part of the team, bringing his core management team along for the ride (stock options), and of course personal leadership qualities.

This mix has served Nick well. The buyer is an online and Japan-specialist recruitment company called En-Japan, which is actually the second largest online recruiter in Japan after Recruit. They paid the well-priced amount of JPY1.7bn for WSA, making it, as far as we know, the biggest earn-out amongst the 3 foreign recruiting firms to have been sold so far in the last 5 years or so.

When we first saw the earn-out amount, we were surprised, because the En-Japan press release that came out on Friday said that sales for the last financial year were ¥1.859bn and more importantly, Ordinary Income was JPY296m. If correct, that means En-Japan paid 5.7 times last year’s earning for the company. In the current economic environment, this is a fairly high multiple, so we contacted Nick to confirm why this price was paid. He responded that apart from the people and systems, the business itself is on track for a strong recovery this year, and that sales are running 25% ahead of last year. So clearly En-Japan was pricing this performance into their
purchase price.

Why would En-Japan, a Japanese online recruiter with a remarkably small number of bilingual candidates in their database, be interested in a foreign-company specialist like WSA? It seems that for much the same reason as Recruit was interested in another recruiter, CDS, several years ago — to bring more aggressive western-style recruiting skills into the Japanese operation, and perhaps more importantly, to take the business abroad. It is no secret that Japanese firms have given up on their domestic markets for expansion, and that this philosophy has really hit home over the last 12 months. Therefore, with WSA, En-Japan gets a foreign markets-capable platform to do what Recruit has gone on to do with CDS.

Anyway, we want to congratulate the latest group of foreign businesspeople for showing that although tough, the Japanese market for venture companies can also be very rewarding. Well done, Robert, Harry, Steve, and Nick.

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Terrie Lloyd.
CEO of LINC Media, Inc.
BiOS – A Division of LINC Media, Inc.

BellyBuds! Music To Your Baby’s Ears!

It’s not news for all of us that parents and doctors all around the world have been talking about the benefits of playing music for babies during pregnancy. This was when Bellybuds™, a North American company, developed the BellyPhones™ (a.k.a. BellyBuds™).

With these BellyPhones™ you can play music for just the baby no matter where you’re at. With the pair of BellyPhones™ attached to your stomach the music won’t be able to be heard by the rest of the room. Plus since they’re just a pair of earphones for your belly, you can hand pick exactly what music you’d like to be played.

They are also really convenient and there is no need for settings. Just plug-and-play!

This is what you can get with BellyPhones™:
• Play music to your baby in utero!
• Plugs into all common digital music players and computers, splitter included for simultaneous listening.
• Can be worn discreetly under your clothing – play music anywhere, anytime!
• Easy on, easy off! No straps! No belts! No buckles!
• Comfortable and portable – toss it in your purse!

BellyPhones™ make an ideal pregnancy or baby shower gift. Click on the image to find out where to shop for some BellyPhones™!

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Alex Kawano.
Official BiOS Blog Author
BiOS – A Division of LINC Media Inc.

September 18: No Device Day

Portion of this article was taken and adapted from Sharon Vaknin’s original text.

Remember those days when the first thing you’d do in the morning was looking out your window, feel the morning sunshine bathing your skin and listen to the birds chirping. Not Anymore!

These days the first thing that comes to our mind right after getting out of bed is clicking, sending, texting, like”ing”, tweeting, deleting… it just seems like there is no end to it. Which is why a couple of marketing guys are dubbing September 18 “No Device Day” for anyone who might be too involved with their gadgets.

Though the idea of dedicating an entire day to shutting devices off may seem silly (or virtually impossible) to some, Mark DiMassimo, CEO of ad firm Digo, and Eric Yaverbaum say they believe Americans need to be reminded to turn off their electronics from time to time. Thus, their “lifestyle intervention.”

But why September 18? Again, it seems like they haven’t randomly chosen September 18 for the latest installment of their Offlining campaign, though. It’s also Yom Kippur, considered by many Jews to be the holiest day of the year. On this day, also known as the Day of Atonement, observant Jews disengage from things like playing on their BlackBerrys, as well as other daily activities like writing, playing instruments, and even eating.

DiMassimo and Yaverbaum are applying the same tradition to No Device Day, but here’s their shtick–”You don’t have to be Jewish…”

Offlining is making examples of celebrities in their No Device Day campaign.

(Credit: Offlining)

In an attempt to further their persuasion, they’ve taken photos of Lindsey Lohan, Mel Gibson, and Tiger Woods and plastered on phrases like, “You don’t have to be Jewish… to make amends for your tweets on Yom Kippur.” That sentiment specifically addresses Lohan’s infamously provocative tweets.

To be clear, the aforementioned celebrities haven’t signed on to the campaign. Although after Gibson’s embarrassing meltdown, he might want to consider it.

Not everyone will participate in No Device Day, to be sure, but the campaign day some food for thought: are we too dependent on our gadgets?

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Alex Kawano.
Official BiOS Blog Author
BiOS – A Division of LINC Media Inc.

3D Technology: Touch, Poke, Pinch, Mutate.

Portion of this article was taken and adapted from Jennifer L. Thompson’s original text.

It’s needless to rephrase how overwhelming the tech world has made us feel this year with new gadgets to supposedly make our entertainment and everyday life tasks easier but it doesn’t stop there. Researchers working with 3D have come up with a next generation 3D technology – Touchable 3D Images.

A Japanese research team said Thursday it had developed the world’s first 3D television system that allows users to touch, pinch or poke images floating in front of them.

“It is the first time that you can feel images in the air,” said Norio Nakamura, senior scientist with the research team at the National Institute of Advanced Industrial Science and Technology.

The technology for touchable 3D is comprised of several basic, yet complex components. The first is a concave mirror with a projected display of an object, giving the object the visual illusion of being physically there.

Next is a set of cameras, strategically placed, that track the hand movements of the user. These are actually Nintendo Wiimotes. Partnering with these is a devices to place on the fingertip. The fingertip device communicates with the cameras via a system of infrared LED lights, telling these Wiimotes the hand positions, which are then communicated to the image on the screen. This then changes the image accordingly, all in a matter of nanoseconds.

The technology changes the shape of three-dimensional images in response to “touches”, aided by cameras that monitor how the fingers move, Nakamura said.

The future of touchable 3D technology is expected to be used in any number of ways. At this stage, predictions for its use include medical applications, potentially surgery. Other uses will likely be a thrill for gamers, and could include things like holding virtual weapons in game play.

“This technology could create a virtual museum where visitors, including vision-impaired people, can put their hands on valuable sculptures that are usually untouchable,” Nakamura said.

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Alex Kawano.
Official BiOS Blog Author
BiOS – A Division of LINC Media Inc.