Japan Chemical Trading Blog

The latest chemical trading industry insights from Japan, Asia and the world, reported by the President of Daishin Corporation, Masa Oguchi.

Resource Business Caused Loss to Sumitomo Corporation

On September 29, Sumitomo Corporation announced, “in addition to the impairment loss of JPY 170 billion (Approx USD 1 billion and 7 hundred million) in the US shale oil development project, the losses of the Australian coal project (JPY 30 billion (Approx USD 3 hundred million)), Brazil iron ore project (JPY 50 billion (Approx USD 5 hundred million)), the US tire project (JPY 20 billion (Approx USD 2 hundred million)) make the total of JPY 270 billion (Approx USD 2 billion and 7 hundred million) loss in this period”.

Traditionally the company’s area of expertise has laid in the non-resource business, while the resource business was dominated by Mitsubishi Corporation and Mitsui & Co., who were early movers to acquire resource rights.

Is this a significant loss because of Sumitomo Corporation’s hasty foray into an unfamiliar field?
The focus from now on is if the company will add any further impairment loss.

Resource Business Caused Loss to Sumitomo Corporation

On September 29, Sumitomo Corporation announced, “in addition to the impairment loss of JPY 170 billion (Approx USD 1 billion and 7 hundred million) in the US shale oil development project, the losses of the Australian coal project (JPY 30 billion (Approx USD 3 hundred million)), Brazil iron ore project (JPY 50 billion (Approx USD 5 hundred million)), the US tire project (JPY 20 billion (Approx USD 2 hundred million)) make the total of JPY 270 billion (Approx USD 2 billion and 7 hundred million) loss in this period”.

Traditionally the company’s area of expertise has laid in the non-resource business, while the resource business was dominated by Mitsubishi Corporation and Mitsui & Co., who were early movers to acquire resource rights.

Is this a significant loss because of Sumitomo Corporation’s hasty foray into an unfamiliar field?
The focus from now on is if the company will add any further impairment loss.

Unchanged Chronic Deficit State of Sony

On September 17, Sony made a downward revision of its previous prospects, announcing that the final result for this quarter will be a deficit of 230 billion Japanese yen.
Looking at their recent quarterly results, the last 5 consecutive quarters ended with a deficit (although March 2013 looks like it is in the black, deducting an extra income from the real estate disposal, it is substantially deficit).
The enormous legacy established by great predecessors such as Masaru Ibuka, Akio Morita, Norio Oga has been eaten away.
The main cause of this time’s downward revision is a slump of the smartphone business.
Looking at their way of doing this business as an outsider, it is like they just do it without any tactics and just get defeated.

If this quarter is in the red again, that makes 3-quarter consecutive deficits since Mr. Hirai took the president position.
From the common sense of the business world, he should be replaced.

Unchanged Chronic Deficit State of Sony

On September 17, Sony made a downward revision of its previous prospects, announcing that the final result for this quarter will be a deficit of 230 billion Japanese yen.
Looking at their recent quarterly results, the last 5 consecutive quarters ended with a deficit (although March 2013 looks like it is in the black, deducting an extra income from the real estate disposal, it is substantially deficit).
The enormous legacy established by great predecessors such as Masaru Ibuka, Akio Morita, Norio Oga has been eaten away.
The main cause of this time’s downward revision is a slump of the smartphone business.
Looking at their way of doing this business as an outsider, it is like they just do it without any tactics and just get defeated.

If this quarter is in the red again, that makes 3-quarter consecutive deficits since Mr. Hirai took the president position.
From the common sense of the business world, he should be replaced.

The Crybaby Politician Almost Never Took Any Business Trips

Ryutaro Nonomura, who served in the Hyogo Prefectural Assembly, quickly became an international sensation on YouTube.
According to a Nikkei Newspaper article dated September 18, “in response to the police investigation, he confessed that he almost never took any business trips”.
According to the statement for fiscal 2013, Mr. Nonomura had claimed approximately 3 million Japanees Yen (approx.USD 30,000) in expenses for 195 day-return business trips during 2013.

This is a ridiculous story in every way.
I hope to this will serve as a brake on the non-transparent ways of spending public money by politicians.

The Crybaby Politician Almost Never Took Any Business Trips

Ryutaro Nonomura, who served in the Hyogo Prefectural Assembly, quickly became an international sensation on YouTube.
According to a Nikkei Newspaper article dated September 18, “in response to the police investigation, he confessed that he almost never took any business trips”.
According to the statement for fiscal 2013, Mr. Nonomura had claimed approximately 3 million Japanees Yen (approx.USD 30,000) in expenses for 195 day-return business trips during 2013.

This is a ridiculous story in every way.
I hope to this will serve as a brake on the non-transparent ways of spending public money by politicians.

Asahi Newspaper

According to an Asahi Newspaper article dated September 14, an article on an interview with the president of Nintendo dated June 8, 2012 was compiled by citing his statements from the company website, so, in reality, no interview was conducted.
Asahi Newspaper published an article apologizing. We really shouldn’t believe everything newspapers say.

Recently, we have quite often heard news about false reports made by Asahi Newspaper.
Although I feel embarrassed as a Japanese person, I guess this shows the real capabilities of the present Japanese media.
If you introduce innovations combined with up-to-date technology into the world of mass media, you might unexpectedly, and easily, be able to rule the world.

Asahi Newspaper

According to an Asahi Newspaper article dated September 14, an article on an interview with the president of Nintendo dated June 8, 2012 was compiled by citing his statements from the company website, so, in reality, no interview was conducted.
Asahi Newspaper published an article apologizing. We really shouldn’t believe everything newspapers say.

Recently, we have quite often heard news about false reports made by Asahi Newspaper.
Although I feel embarrassed as a Japanese person, I guess this shows the real capabilities of the present Japanese media.
If you introduce innovations combined with up-to-date technology into the world of mass media, you might unexpectedly, and easily, be able to rule the world.

Where Is Abechronomics Going?

The Cabinet Office of Japan announced the revised GDP for the April-June period at the real annualized rate decreased by 7.1% compared with the previous quarter.
The flash report figure of 6.8% was revised downward and the negative gap is the widest seen since the global financial crisis triggered by the Lehman Brothers’ bankruptcy.
Unless the July-September period result shows a dramatic recovery, the clouds will begin to gather over the whereabouts of Abechronomics.

Recently, the depreciation of the JPY and higher stock prices have been ongoing day by day.
However, as an exporting company, our results are not benefiting, and judging from everyday business confidence, it is hard to believe that the July-September period result will show significant positive growth.
In no time, articles on an economic downturn may be out in newspapers. Unless things change for the better before that, Mr. Abe might be in trouble.

Where Is Abechronomics Going?

The Cabinet Office of Japan announced the revised GDP for the April-June period at the real annualized rate decreased by 7.1% compared with the previous quarter.
The flash report figure of 6.8% was revised downward and the negative gap is the widest seen since the global financial crisis triggered by the Lehman Brothers’ bankruptcy.
Unless the July-September period result shows a dramatic recovery, the clouds will begin to gather over the whereabouts of Abechronomics.

Recently, the depreciation of the JPY and higher stock prices have been ongoing day by day.
However, as an exporting company, our results are not benefiting, and judging from everyday business confidence, it is hard to believe that the July-September period result will show significant positive growth.
In no time, articles on an economic downturn may be out in newspapers. Unless things change for the better before that, Mr. Abe might be in trouble.

Three and a Half Years after the Earthquake Disaster

Today marks the 13th anniversary of the 9/11 terrorist attacks in New York, U.S.A., and 3 and a half years after the Great East Japan Earthquake.
At that exact moment, even we felt the shock in our office, which is located over 800 km from the earthquake epicenter.
The tragic situation caused by the tsunami that followed was reported worldwide.

Although the earliest possible reconstruction was expected, according to a report by the Nikkei Newspaper dated September 11, “rebuilding of houses has been delayed, and as of the end of July, only about 10% of the total public housing units for affected people planned to be constructed in Iwate and Miyagi prefectures have been built”.

I have the impression that the recovery process was faster after the Great Hanshin Earthquake, which I experienced when I was a university student. Is this because of the difference between urban and rural areas?
I hope houses will be rebuilt as soon as possible in areas other than the coastal area where tsunami have hit so many times.

Three and a Half Years after the Earthquake Disaster

Today marks the 13th anniversary of the 9/11 terrorist attacks in New York, U.S.A., and 3 and a half years after the Great East Japan Earthquake.
At that exact moment, even we felt the shock in our office, which is located over 800 km from the earthquake epicenter.
The tragic situation caused by the tsunami that followed was reported worldwide.

Although the earliest possible reconstruction was expected, according to a report by the Nikkei Newspaper dated September 11, “rebuilding of houses has been delayed, and as of the end of July, only about 10% of the total public housing units for affected people planned to be constructed in Iwate and Miyagi prefectures have been built”.

I have the impression that the recovery process was faster after the Great Hanshin Earthquake, which I experienced when I was a university student. Is this because of the difference between urban and rural areas?
I hope houses will be rebuilt as soon as possible in areas other than the coastal area where tsunami have hit so many times.

Thailand’s Military Government Plans to Increase Tax on the Wealthy

A Nikkei Newspaper article dated September 10 said, “Thailand’s interim military government will implement tax reforms including new taxes on the wealthy, including a fixed asset tax and an inheritance tax, while providing benefits to people with low incomes”.
The government plans to impose a tax on land and buildings of 0.5% to 2% of their value and an inheritance tax of 10%.
These taxes, never introduced before in the country, might become unpopular among the wealthy in Thailand.
However, the tax rates are still very low compared to Japanese equivalents.

Maybe the wealthy have thus far been too privileged in Thailand.
I will be looking closely to see if the military government is able to carry through these reforms.

Thailand’s Military Government Plans to Increase Tax on the Wealthy

A Nikkei Newspaper article dated September 10 said, “Thailand’s interim military government will implement tax reforms including new taxes on the wealthy, including a fixed asset tax and an inheritance tax, while providing benefits to people with low incomes”.
The government plans to impose a tax on land and buildings of 0.5% to 2% of their value and an inheritance tax of 10%.
These taxes, never introduced before in the country, might become unpopular among the wealthy in Thailand.
However, the tax rates are still very low compared to Japanese equivalents.

Maybe the wealthy have thus far been too privileged in Thailand.
I will be looking closely to see if the military government is able to carry through these reforms.

Toyo Aluminum Partners with an Indian Company

Toyo Aluminum K.K. announced on September 8 that it had signed a letter of intent for a joint business with MMP Industries Ltd., India.

Toyo Aluminum is a subsidiary aluminum maker of Nippon Light Metal Holdings Company, Ltd., and is strong in aluminum paste, an aluminum pigment mainly used as automotive paint.
Nippon Light Metal‘s consolidated sales for the previous fiscal year were 94.3 billion Japanese yen, with a workforce totaling 2,500.
The sales of MMP for the previous fiscal year were 2.2 billion yen, with a workforce totaling 320.

Their aim seems to be strengthening the sales structure in the Indian market, where many Japanese manufacturers in related industries such as Suzuki Motor, Toyota Motor, Nissan Motor, Honda Motor, Isuzu Motors, Kansai Paint and Nippon Paint have been expanding their business.

Toyo Aluminum Partners with an Indian Company

Toyo Aluminum K.K. announced on September 8 that it had signed a letter of intent for a joint business with MMP Industries Ltd., India.

Toyo Aluminum is a subsidiary aluminum maker of Nippon Light Metal Holdings Company, Ltd., and is strong in aluminum paste, an aluminum pigment mainly used as automotive paint.
Nippon Light Metal‘s consolidated sales for the previous fiscal year were 94.3 billion Japanese yen, with a workforce totaling 2,500.
The sales of MMP for the previous fiscal year were 2.2 billion yen, with a workforce totaling 320.

Their aim seems to be strengthening the sales structure in the Indian market, where many Japanese manufacturers in related industries such as Suzuki Motor, Toyota Motor, Nissan Motor, Honda Motor, Isuzu Motors, Kansai Paint and Nippon Paint have been expanding their business.

Barter?

I found two articles related to Bangladesh in the Nikkei Newspaper on September 7.
One is, “Prime Minister Abe had a meeting with Ms. Sheikh Hasina, Prime Minister of Bangladesh, during his visit to the country, and told her Japan would provide financial aid up to 600 billion yen over 4 to 5 years to develop industrial infrastructure”.
The other one is, “Both countries had been competing for a seat assigned to the Asia-Pacific region in the United Nations Security Council non-regular commissioner election, but now, Bangladesh has withdrawn its candidacy and announced that the country would support Japan”.

I visited Bangladesh several times on business trips and saw the country needed to develop infrastructure on a large scale.
So I really hope Japan can help with this.
However, I wonder, what do the Bangladeshi people think about these two news items?

Barter?

I found two articles related to Bangladesh in the Nikkei Newspaper on September 7.
One is, “Prime Minister Abe had a meeting with Ms. Sheikh Hasina, Prime Minister of Bangladesh, during his visit to the country, and told her Japan would provide financial aid up to 600 billion yen over 4 to 5 years to develop industrial infrastructure”.
The other one is, “Both countries had been competing for a seat assigned to the Asia-Pacific region in the United Nations Security Council non-regular commissioner election, but now, Bangladesh has withdrawn its candidacy and announced that the country would support Japan”.

I visited Bangladesh several times on business trips and saw the country needed to develop infrastructure on a large scale.
So I really hope Japan can help with this.
However, I wonder, what do the Bangladeshi people think about these two news items?

Record-High Budget Request at More Than 100 trillion Japanese Yen

A Nikkei Newspaper article dated August 29 says, “Japan’s government ministries are set to demand 101 trillion Japanese yen (about 1 trillion US doller), which is the highest in history, for the 2015 fiscal budget”.

I think this is ridiculous. With the national debt exceeding 1,000 trillion Japanese yen (about 10 trillion US doller) and still increasing, the passage of such a mega-budget will cause the risk of hyperinflation.
It is hard to imagine that a budget of 100 trillion Japanese yen is being planned while annual government revenue is only about half that amount.
Anything that is not covered by the annual government revenue will depend on a debt that will become a burden on future generations.

This tells us very clearly what politicians and bureaucrats are thinking of future generations.
The expenditure should be reduced as much as possible and issuance of deficit-covering bonds should be as limited as possible.

Record-High Budget Request at More Than 100 trillion Japanese Yen

A Nikkei Newspaper article dated August 29 says, “Japan’s government ministries are set to demand 101 trillion Japanese yen (about 1 trillion US doller), which is the highest in history, for the 2015 fiscal budget”.

I think this is ridiculous. With the national debt exceeding 1,000 trillion Japanese yen (about 10 trillion US doller) and still increasing, the passage of such a mega-budget will cause the risk of hyperinflation.
It is hard to imagine that a budget of 100 trillion Japanese yen is being planned while annual government revenue is only about half that amount.
Anything that is not covered by the annual government revenue will depend on a debt that will become a burden on future generations.

This tells us very clearly what politicians and bureaucrats are thinking of future generations.
The expenditure should be reduced as much as possible and issuance of deficit-covering bonds should be as limited as possible.