JETRO—Africa, the untapped business frontier

JETRO—Africa, the untapped business frontier

[INTERVIEW]

Dr. Katsumi Hirano
Executive Vice President of Japan External Trade Organization (JETRO)

JAPAN and the WORLD magazine sat down with Dr. Katsumi Hirano, Executive Vice President of Japan External Trade Organization (JETRO), to find out more about JETRO’s activities in Africa.


—What is a mission of JETRO during upcoming TICAD VI?

As one of the organizers for TICAD VI, JETRO has two main functions. One, we are responsible for inviting African businesspersons to Japan in order to hold a conference and meet with their Japanese counterparts.

Our second mission is the Japan Fair, where we will be showcasing Japanese products to the African participants attending TICAD VI.

The Japanese business sector, as a whole, should see the possibilities of business development in Africa, for it is a benefit to the Japanese economy.

Our goal is to promote, trade and business investment between Japan and the rest of the world. When it comes to Africa, Japanese businesses do not have as big of a presence as other developed countries as China and Korea. The Japanese business sector, as a whole, should see the possibilities of business development in Africa, for it is a benefit to the Japanese economy. We, JETRO, think that Japanese businesses can pay much more attention and efforts on Africa.

—How many Japanese companies did you manage to gather for TICAD VI?

Almost 100 Japanese companies are going to attend. This number is much beyond our initial expectations. The Japanese private sector showed a lot of interest.

Almost 100 Japanese companies are going to attend. This number is much beyond our initial expectations.

The companies will be representing the following sectors: industrialization, healthcare and security. In each session a Japanese company will participate.

—JETRO is the gateway for African businesses to enter Japan, but you also help African businesses to enter the Japanese market. What were the main challenges until now for those African businesses that want to enter the Japanese market?

If you’re talking about small and medium sized African companies, we are making long term plans to invite and provide consultation to our African companies. The main point is quality, and the Japanese market requirements for quality is quite high. So, this is the main topic of the consultation and we provide various assistance to improve the familiarity of the products. You may know the program named, “OVOP” or “One Village, One Product”. That program was initiated by JETRO in collaboration with JICA, where we have opened shops at each airport in Japan for selling locally made products. A very successful story, for example, is of the quality coffee and teas from Africa, which are locally produced by villages in Africa. This kind of promotion of local products will continue as we work to bring more African products to Japan.

—At the end of last year, you signed a Memorandum of Understanding to open an office in Addis Ababa. What were the motivations behind it?

Ethiopia is a very promising country with high economic potential and a large population, which will soon reach around 100 million. In addition, they have a relatively functional government and exhibit strong determination and hardworking attitudes.

The main mission for the new office in Addis Ababa is to promote the expansion of Japanese manufacturers. So, for that purpose, we plan to do a campaign, not only in Japan, but also in Istanbul, Paris, and a city in the Middle East, where Japanese companies are manufacturing and they have the capabilities to expand to the African continent. Kaizen (a Japanese business philosophy of continuous improvement of working practices) itself was started by the private sector and that is how it was introduced to Ethiopia. Ethiopian government voluntarily established “Kaizen Center” for their business models inspired by Japanese experience. Kaizen is one of the main selling points for Japanese business processes and technology. JETRO has the ability to send experts, such as industry experts or management experts to developing countries and will assist the Ethiopian side in its intention to implement and apply the Kaizen business model to Ethiopian businesses. The best way, however, is to bring Japanese manufactures there.

In addition to Addis Ababa, we will open another 3 offices in Africa.

—Can I ask you about the triangular relations? How would it benefit Africa?

For Japanese businesses, especially the small and medium sized companies, Africa is not very well known and they have a lack of information and experience in that continent, but the Turkish private sector, for example, has already established a network in Africa. So, the main function for the collaboration between the Turkish and Japanese businesses is to expose Japanese businesses to Africa. If the Turkish network can be strengthened by Japanese input, it would provide more business opportunities in Africa. Both the Turkish as well as French side share this vision. So, maybe during the next TICAD, the government will start talking with the African side to gain their perspective on this possibility.

Ethiopia is a very promising country with high economic potential and a large population, which will soon reach around 100 million. In addition, they have a relatively functional government and exhibit strong determination and hardworking attitudes.

—Recently, a slow down of African economies was noticed. Yet some countries on the individual level are doing better than others, so do you think that in the future there will be more bilateral relations between countries and less continental – country relations? Could you see that sort of development happening?

You are quite right. Business conditions differ country by country, but on the other hand, each country is very small in size and we cannot expect the economy of scale easily and equally. Thus you should also make businesses on the African continent to expand beyond the country borders. So, we must constantly select more business-oriented countries, but on the other hand we must also see these business opportunities expand throughout the different African regions. From this point of view, the regional economic community is very important. In addition to the domestic and foreign business presence in the region, those activities that expand beyond the border are showing big opportunities for us. In addition to cooperation with other countries such as Turkey or France, Japanese companies can enter business collaborations with companies in the South African private sector, which also allows for South African companies that successfully expand beyond the borders of the African continent.

—In late 2015, JETRO conducted a survey to assess the interest of Japanese firms in overseas business ventures. What were the most significant conclusions from this survey and did you see an increase of interest in investing abroad or less interest from Japanese companies?

Yes, the private sector has the intention to start exporting or expanding activities in overseas markets and this interest is increasing gradually. The base of our general activity is to address the economic situation, but a margin of the profit or business results is depended on the business cycle in each country. In Africa, there are signs of a worsening situation too, but Japanese companies still have the interest in expanding outside of Japan, so JETRO must assess this sort of movement and economic situation.

—Thank you. Do you have a special message to encourage the Japanese people to visit or invest in Africa?

Let’s go to Africa! Please go see a place that will open your eyes. Find more challenges and gain the courage and bravery to start initiating more business in Africa. Take a risk! This is a shared intention of our friends in Africa.

For more information about the Japan External Trade Organization (JETRO), please visit the official website: www.jetro.go.jp.


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