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CONFIDENTIAL
FOR INTERNAL USE WITHIN CLIENT COMPANY ONLY
MATERIALS &
MANUFACTURING
OPPORTUNITIES IN JAPAN
BUSINESS SWEDEN
Tokyo
January, 2016
OVERVIEW OF DIFFERENT SEGMENTS
CONSISTS OF FOUR DIFFERENT AREAS:
Machinery
Japan is a world leader within the automobile industry as
well as electrical machinery and other types of
manufacturing related machinery.
Oil and gas
The oil and gas market has been experiencing extensive
consolidation during the last couple of years, yet remain
a very sizeable industry.
Forest products
Like Sweden, Japan is covered by dense forests, but the
mountainous terrain require specific solutions to utilize
this abundant natural resource
Metals and mining
Japan is a major market for metal working, with two
companies in the worldwide top 10 list, but with very
limited mining activities.
27 JANUARY, 2016 BUSINESS SWEDEN 2
MATERIALS AND MANUFACTURING
INDUSTRY OVERVIEW
Japan's major export industries include machinery,
automobiles, consumer electronics, computers,
semiconductors, copper, iron and steel.
Additional key industries in Japan's economy are
petrochemicals, pharmaceuticals, bioindustry,
shipbuilding, aerospace, textiles, and processed foods.
Manufacturing and industry accounts for 19 percent of
Japan’s economy, as share of GDP.
MANUFACTURING INDUSTRY SHARE OF GDP (2015)
27 JANUARY, 2016 BUSINESS SWEDEN 3
MANUFACTURING IS A LARGE SHARE OF JAPAN’S GDP
SOURCE: WORLD BANK
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Sweden Japan Germany
OVERVIEW
Japan has a long tradition of heavy industry and
machinery. Main industries include electronics,
shipbuilding/offshore, chemicals and steel making.
With many industry giants, Japan is highly competitive
within these industries also on a global level.
Japan is world famous for its manufacturing prowess and
the industrial framework is innovation and quality driven
focus on cutting edge technology.
CONSOLIDATED VALUE PER INDUSTRY 2013 (BN JPY)
0 20000 40000 60000
Forestry products
Metal products
Oil, gas &chemicals
Machinery
27 JANUARY, 2016 BUSINESS SWEDEN 4
MACHINERY IS THE BIGGEST INDUSTRY SEGMENT
SOURCE: NIPPON STEEL & SUMITOMO METAL, METIL, ISSB, JAPAN GAS, JAPAN MINISTRY OF ECONOMY,
TRADE AND INDUSTRY
STRONG GROWTH FOR INDUSTRIAL AND METAL CUTTING MACHINERY
OVERVIEW
Industrial machinery, metal cutting machinery, rolling
machinery and boilers & power units are the categories
showing the strongest growth 2012-2014.
In the industrial machinery category, industrial robots,
chemical machinery, construction machinery and other
industrial machinery are the sub-segments indicating the
strongest growth.
By industry classification, non-ferrous metals, general
machinery, electrical machinery and other manufacturing
are the machinery with the strongest growth 2012-2014,
with machines for non-ferrous metals growing 27 %
since 2012.
CORE MACHINERY PRODUCTION 2012-2014 (BN JPY)
27 JANUARY, 2016 BUSINESS SWEDEN 5
CORE MACHINERY SEGMENTS INDICATING GROWTH
0
2 000
4 000
6 000
8 000
10 000
Boilers andpower units
Industrialmachinery
Metal cuttingmachines
Rollingmachines
0
500
1 000
1 500
2 000
Industrial robots Chemicalmachinery
Constructionmachinery
Other industrialmachinery
0
2 000
4 000
6 000
8 000
10 000
Boilers andpower units
Industrialmachinery
Metal cuttingmachines
Rollingmachines
+15%
+20%
+36%
+26%
+43% +6%
+17%
+19%
GAS HEATING AND COOLING EXPECTED TO FURTHER PENETRATE THE MARKET
SPREAD OF GAS AIR CONDITIONING
With their wide ranging application, gas heating and
cooling systems are spreading from office buildings,
schools and hospitals to shopping centres and other
general use buildings.
Gas heating and cooling systems are expected to
spread even further as a result of the development of
absorption chillers and gas heat pumps.
BUSINESS SWEDEN 27 JANUARY, 2016 6
THE GAS MARKET IS GOING THROUGH BIG CHANGES
SOURCE: JAPAN GAS ASSOCIATION
39 46
49,1
136,4 152,4 154
0
50
100
150
0
10
20
30
40
50
60
2004 2009 2013
Th
ou
sa
nd
insta
lled
un
its M
illio
n r
efr
ige
ratio
n to
n
Cooling capacity Number of units
Stores, supermarkets
15%
Offices 23%
Schools 16%
Industrial 13%
Medical facilities
10%
Others 23%
1,7
3,6
4,5 4,9
1 26
112
191
0
50
100
150
200
250
0
1
2
3
4
5
6
2000 2005 2010 2013
Th
ou
sa
nd
un
its
Gig
aw
att
s
Installedcapacity
Installedunits
EXPANSION OF GAS COGENERATION
GAS COOLING CAPACITY BY APPLICATION (%)
MARKET OVERVIEW
Excess refining capacity remains an industry wide issue
and oil companies are expanding into other energy
businesses, such as electric power, LNG, and the
distributed energy sector, where new energies like fuel
cells and solar photovoltaic power generation are
expected to grow and oil demand will continue to
decrease. For further information please also refer to
Business Sweden Japan’s energy fact pack.
Companies are also accelerating their movement toward
becoming a total energy industry through realizing
integrated operations, utilizing existing facilities in
refineries. This movement can be seen across many
types om companies in the industry.
EMPLOYEES AND PRODUCTION 1995 AND 2014
27 JANUARY, 2016 BUSINESS SWEDEN 7
THE OIL INDUSTRY IN JAPAN HAS EXPERIENCED
EXTENSIVE CONSOLIDATION SINCE 1995
SOURCE: JAPAN GAS ASSOCIATION
36 000
19 000
5,41
4
0
1
2
3
4
5
6
7
8
9
10
0
5000
10000
15000
20000
25000
30000
35000
40000
1995 2014
Mill
ion
ba
rre
ls p
er
day
Oil
ind
ustr
y e
mp
loye
es
Employees Million BPD
OVERVIEW
After the Lehman Shock, with the decrease in demand
for paper and paperboard, pulpwood consumption
decreased dramatically, but it is now moving sideways.
Import ratio of pulpwood has remained almost
unchanged.
Exports and imports in 2014 are 1,200 thousand tons
and 1,737 thousand tons respectively.
Major import markets are China, Indonesia, USA,
South Korea and Finland.
Paper and paperboard production in 2014 was 26,478
thousand tons, 0.9% increase over the previous year.
Japan is the third largest paper and paperboard
producer after the China and US.
27 JANUARY, 2016 BUSINESS SWEDEN 8
PAPER AND PULP SECTOR SHOWS STAGNANT GROWTH
SOURCE: JAPAN MINISTRY OF ECONOMY, TRADE AND INDUSTRY
2005
2013
2014
Hardwood Softwood Total Import rate
12 800 6 500 19 300 71.9%
10 700 5 000 15 700 67.7%
11 100 5 200 16 300 69.9%
31.5% 26.3%
China Indonesia USA Finland
9.1%
Germany
8.0% 7.9%
Sweden
10%
58.9% 24.8%
Taiwan
6.9%
South Korea USA
Imp
orts
Pa
pe
r P
aper
bo
ard
Pu
lpw
oo
d
consum
ptio
n
Co
nsu
mp
tion
IMPORTS OF FOREST PRODUCTS TO JAPAN 2002-2012
BUSINESS SWEDEN 27 JANUARY, 2016 9
IMPORTS OF FOREST PRODUCTS HAS STABLISED
SOURCE: JAPAN MINISTRY OF ECONOMY, TRADE AND INDUSTRY
0
2 000 000
4 000 000
6 000 000
8 000 000
10 000 000
12 000 000
14 000 000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Cu
bic
metr
es
LOGS LUMBER WOODEN PANEL LAMINATED LUMBER
SECTOR IS MOVING SIDEWAYS SINCE 2009
OVERALL TREND FOR METAL IMPORTS IS STAGNANT
OVERVIEW
27 JANUARY, 2016 BUSINESS SWEDEN 10
SPECIALTY STEEL PRODUCTS SHOW STRONG GROWTH
SOURCE: NIPPON STEEL & SUMITOMO METAL, METIL, ISSB
Japan produces most of the steel required within the
country so imports are fairly negligible.
Steel exports tend to be steady over time and Japan was
the largest exporter in the world 2009 and 2010 before it
was overtaken by China in 2011.
Japanese exports were fairly steady in 2014 compared
to the previous year.
Imports of “other specialty steel products” is showing
solid growth since 2010 and has increased 238% this
includes specialty metals, such as high corrosion- and
heat-resistant alloys, acid-resistant alloys and alkali-
resistant alloys.
0
2000000
4000000
6000000
8000000
10000000
12000000
14000000
16000000
18000000
20000000
2010 2011 2012 2013
Millio
n J
PY
Iron and Steel Non-ferrous metal and products Fabricated metal products
0
50 000
100 000
150 000
200 000
250 000
300 000
350 000
400 000
450 000
2010 2011 2012 2013
Metr
ic t
on
nes
IMPORTS OF METAL AND PRODUCTS
OTHER SPECIALTY STEEL PRODUCTS
Japan is the world’s third largest market in terms of GDP (nominal) and home to some of the most famous car and
consumer electronics companies in the world.
Re-shoring efforts due to the weakening of the Japanese yen as well as rising costs in e.g. China is driving demand for
machine tools. In 2013 were 40% of all machine tools older than 20 years, spurring an increase in replacement orders.
Japan’s manufacturing industry needs the following in order to continue to drive the economy:
Demand from emerging nations, which indicate strong growth.
A strengthened industrial base for Japan’s manufacturing industry, in order to ensure that the country’s position can
be strengthened and maintained as a supply base for sophisticated products and components.
The Japanese Ministry of Economy, Trade and Industry (METI) has identified 5 focus areas for manufacturing in Japan:
Japan has also launched an industry initiative called IVI to counter the German Industrie 4.0 manufacturing initiative. IVI
is backed by major players such as Mitsubishi Electric, Nissan Motors, Fujitsu, Panasonic, etc. In total 30 companies.
BUSINESS SWEDEN 27 JANUARY, 2016 11
HIGH-LEVEL PRODUCTS AND COMPONENTS HAVE BEEN
IDENTIFIED AS FUTURE FOCUS AREAS FOR JAPAN
SOURCE: WORLD BANK, NIKKEI ASIAN REVIEW
High-level Products High-level Components
Vehicles Aircrafts Robots Fine Chemicals Carbon Fibre
Business Sweden
1-10-3-200 Roppongi, Minato-ku,
Tokyo, 106-0032, Japan
T +81 3 5562 5000
http://www.business-sweden.se/japan/
CONTACT US
BUSINESS SWEDEN IN TOKYO
