International Business Development
Bringing Advanced Technologies of Japanese SMEs to the World
Japanese SMEs have a high reputation in the world for their technology. However, when they set out to explore overseas business development, they find in many cases inadequate information regarding investment climates in foreign countries, and what funding is available to their ventures. This section describes how JBIC supports Japanese SMEs expanding into overseas markets, and showcases an SME which is successfully conducting international operations with financial support from JBIC.
Meeting Corporate Needs with a Specialized Unit
JBIC supports overseas business development not only for large corporations but for SMEs as well. The Advisory and Consulting Office for SMEs (ACOSME) supports overseas business expansion of Japanese SMEs by providing the latest information on local conditions and the investment climate in individual countries. The ACOSME also offers consulting services for obtaining long-term financing.
ACOSME daily receives such inquiries as "What are the procedures and processes for starting trade or overseas business?"; "What are the general local conditions in such and such a country?"; "How can we get funding for long-term investment in plants and equipment?"; and "What conditions have to be met to utilize JBIC loans?" In addition to responding to these inquiries individually, ACOSME prepares an investment guide for each major ASEAN member country respectively, and reports on the investment climate in China and Central and East European countries. ACOSME also sends speakers to the meetings held in many Japanese cities for disseminating information on the foreign investment climate. These meetings, under titles such as "Prospects of the Vietnamese Economy" and "Business Development of Russia's Investment Climate," are usually well-attended.
The advanced technological expertise cultivated by domestic SMEs has often been well-recognized in the world. In fact, there are a number of cases where firms have outdone their rivals in international competition and achieved further growth. Here is an example of the firm which has successfully made a leap in international business development with financial support provided by JBIC.
Realizing Overseas Production with Support from JBIC:
Aikitec in Nagoya
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Aichikiki Autoparts Indonesia (AAI)
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The rendering of the new factory in China
Aikitec (sales: \29.1 billion in FY2007) is a specialized auto parts manufacturer. Since its establishment in 1956 as Aichikiki Industrial Company, the company has produced engine parts, transmission gears and shafts--key parts directly affecting automobile performance. What is special about Aikitec is that it has cutting-edge technology in the metal cutting industry. By concentrating domestic production in the new main factory built in 2006, the 50th anniversary year of its establishment, and by starting production in the adjacent Higashiura factory, Aikitec has established an integrated production line starting from raw materials to end-products at home and abroad.
"Japanese cars have the highest quality in the world. We take pleasure in producing products that meet the needs of the clients at low costs, thereby contributing to society. We have been focusing our efforts on high-precision processing technology, low cost and the efficient "just-in-time" production method that enables us to supply the right products in the right amount at the right time," stated President Hiroyuki Honda.
Aikitec moved the production of its products overseas in response to the overseas production of Honda Motors. In 1998, the company set up Richmond Auto Parts Technology (RAPT), its first overseas production subsidiary, in Kentucky, USA.. This was then followed by PT Aichikiki Autoparts Indonesia (AAI), established in Indonesia in 2002.
"The basic premise of our business is 'we produce where there is demand.' We have received overall support from Honda Motors in terms of personnel, goods and capital based on our long-term relationship with them. Financial support from JBIC had also a positive effect on our credit standing," emphasized Mr. Honda.
This was especially true in Indonesia. Since the investment plan was implemented immediately after the Asian currency crisis, "JBIC's financial support in US dollars was really reassuring," he said.
"We want to move ahead toward 'globally optimum production' among Japan, United States and Indonesia. We have plans eventually to export products from Indonesia to Asian, Latin American and European markets. Furthermore, we will have to produce in China and India as well," confided the President concerning his business prospects. Indeed, his predictions have come true. Aikitec opened its third business outpost in Foshan city, Guangdong province, China, in 2007. Aikitec has made a leap into the world with support from JBIC.
(The interview was conducted in July 2005. In 2006, the company name Aichikiki was changed to Aikitec, and President Hiroyuki Honda has become Chairman.)
SMEs possessing technological prowess like Aikitec have taken a leap forward by expanding their business operations overseas. When SMEs, which constitute the heart of the Japanese economy, take their fight overseas, JBIC will stand right behind them to support their ventures.
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