Toyota Home Announces New Home Energy Management System

Toyota Home, Denso Corporation, Misawa Homes and Shin-KobeElectric Machinery have jointly developed a 7-inch touch-screen controlled HomeEnergy Management System (HEMS) that enables central monitoring and control of home energy supply and consumption. The system can be linked to solar power sources, EcoCute CO2-based heat pump water heaters, rechargeable batteries for home power storage, and electric and plug-in hybrid vehicles. It is the first such commercially viable system in Japan that enables residents to recharge electric vehicles and also to draw energy from such vehicles to power home devices during power outages.

The system also enables users to monitor energy use in individual rooms, displays previous month and year-on-year comparisons of energy use, and provides readings on water and natural gas consumption.

The details provided on this website are for general informational purposes only, and accordingly posting of this material does not imply endorsement by the author or any of the individuals or companies mentioned. 

To inquire about Japanese to English translation services regarding this content and other related materials, contact David Hathaway of Hathaway Translation Services at:

IDEC builds automated LED production facility

11 Oct 2011 — IDEC Corporation has announced that it will transform its former Hamamatsu Distribution Center in Shizuoka, Japan into an LED plant. Slated to begin operation in April 2012, the new plant will boast an automated production line and will act as the company’s main LED production facility.

The new facility consolidates LED module production now performed at IDEC’s Fukuzaki plant with lighting assembly operations now performed at its Kyoto plant, and features an integrated production system that combines an automated module production line with an automated assembly line using a robotic production cell control system. The advanced production systems of the new facility will enable IDEC better LED Module and LED lighting production capabilities while lowering production costs, thereby making the company more competitive in the LED market.

The details provided on this website are for general informational purposes only, and accordingly posting of this material does not imply endorsement by the author or any of the individuals or companies mentioned.

To inquire about Japanese to English translation services regarding this content and other related materials, contact David Hathaway of Hathaway Translation Services at: 

TUV Rheinland Halves Photovoltaic Module IEC Certification Testing Time

(11 OCT 2011) TUV Rheinland Japan’s Solar EnergyAssessment Centre (SEAC) has successfully completed specification testing of photovoltaic modules in 1.5 months, half the usual time required. The testing involved 11 test modules in a total of 124 tests to verify compliance with IEC 61730 (photovoltaic module safety qualification) and IEC 61215 (crystalline silicon terrestrial photovoltaic modules – Design qualification and type approval) standards.

TUV Rheinland’s SEAC now boasts the world’s shortest turn-around time for specifications testing of photovoltaic modules.

The details provided on this website are for general informational purposes only, and accordingly posting of this material does not imply endorsement by the author or any of the individuals or companies mentioned.

To inquire about Japanese to English translation services regarding this content and other related materials, contact David Hathaway of Hathaway Translation Services at:

Fuji Kosan Embarks on Neodymium Magnet Recycling Venture

(8 Sep 2011) According to an article in the Nikkan KogyoShimbun, Fuji Kosan Company, Ltd. has begun a feasibility study to look into commercial opportunities regarding collection and re-use of neodymium magnets used in hybrid vehicles. Fuji Kosan plans to have a recycling network in place four or five years down the road that can help provide Japanese manufacturers access to stable supplies of Neodymium.

China now accounts for 98% of the world’s production of the high-priced rare earth material.

The details provided on this website are for general informational purposes only, and accordingly posting of this material does not imply endorsement by the author or any of the individuals or companies mentioned.

To inquire about Japanese to English translation services regarding this content and other related materials, contact David Hathaway of Hathaway Translation Services at:

Global Strategy of Mori Seiki

“How successful is the unorthodox global strategy of machine tool manufacturer Mori Seiki?”

(07 Sep 2011) This article from Toyo Keizai looks at the unconventional business strategy implemented by machine tool manufacturer Mori Seiki, and evaluates the success of that strategy.

Increased investment in Gildemeister

In spring 2011, Mori Seiki increased its holdings in leading German machine tool manufacturer Gildemeister AG, thereby making Gildemeister an equity method affiliate. Mori Seiki borrowed heavily to finance this investment, thereby lowering its equity ratio to 54.6%, from a previously healthy ratio in the 70% range.

Strategy going forward

Sales and Service: Mori Seiki gains access to Gildemeister’s competitive network in Europe, South America and Russia, thereby complementing Mori Seiki’s Asian and North American sales and service operations. The two companies plan to integrate sales operations in various countries, and have recently opened a marketing headquarters in Switzerland.

Production: By gaining access to Gildemeister factories in Germany and Shanghai, and by opening its first overseas factory in North America in 2012, Mori Seiki hopes to shift from a dependence on exports to global production in Japan, America, Europe and Asia. They also intend to achieve economies of scale by integrating R&D operations of the two companies.

Financial standing

Mori Seiki has been significantly curtailing capital investment while drastically increasing its investment outlays overall. Also, its cash flow from operations has been in negative territory two years running, and its balance of cash and deposits has marked a year-on-year decrease for five consecutive years.

Mori Seiki in relation to its competitors

Cash flows: Whereas most companies in the industry have been cutting back on capital investment since the collapse of Lehman Brothers, Mori Seiki has been ramping up outlays in this area. Moreover, although Mori Seiki’s competitors Okuma and Makino have averaged positive free cash flows over the last five years, Mori Seiki shows negative results for that same period.

Operating income: Although many companies in the machine tool industry are likely to achieve positive operating results for Q1 of FY2012, Mori Seiki looks poised to report negative figures.

Return on investment and synergies with Gildemeister

It will be some time before Mori Seiki realizes a gain on its significant investment in Gildemeister, and any revenues realized are likely to be used to offset goodwill write-downs. Moreover, there are likely to be many challenges to overcome before production- and marketing-related economies of scale will be realized.

Article overview

Equity Finance in Japan: private placement (第三割当増資)

In this post, I will look at how companies, specifically in Japan, use private placement.

Companies can use private placement as a means of:

1. Facilitating strategic alliances with other companies

This can result in cross shareholdings, such as in the case of Hitachi's and Toyo Denki Seizo's purchases of the other party's respective shares. (English, Japanese)

2. Raising funds to drive corporate rehabilitation initiatives

Real estate developer ES-Con Japan has issued press releases concerning its efforts to use private placement as a means of raising funds for its rehabilitation efforts (English, Japanese, refer to press releases dated September 25, 2009).

3. Raising funds for use toward improvements of business operations

4. Thwarting hostile takeover attempts

Some companies have used private placement as a takeover defense strategy whereby shares of the target company are privately placed with a white knight, thereby diluting shareholdings of the party attempting the takeover.

In 2006, for instance, Hokuetsu Paper Mills thwarted a hostile takeover bid launched by Oji Paper through a private placement of newly-issued shares with trading company Mitsubishi Corp. and Nippon Paper.

To learn more about the Hokuetsu incident, see this Japan Times article and these Mitsubishi press releases (Japanese, English) concerning the private placement of Hokuetsu shares.

The Daiwa Institute of Research has released a report on private placement as part of its Corporate Governance Reform series. The report details concerns related to private placement in Japan and provides examples of disputes related to private placement. 

Equity Finance In Japan: What is meant by an "allocation of new shares to a third party"?

第三者割当増資 (daisansha wariate zoshi)

You may have seen a term such as allocation of [new] shares to a third party, third-party allotment, or similar used in reference to security offerings of Japanese companies—and may have wondered what exactly was meant by it. Some IR departments in Japan opt to use such terms as a direct translations for daisansha wariate zoshi. Other IR departments, business publications, and so forth opt for the more globally recognized term, private placement of newly-issued shares (第三者割当による新株発行) or private placement of treasury shares (第三者割当による自己株式の処分). Refer to the table below for various ways the term daisansha wariate is translated, frequency of use of those translations (measured in Google hit counts), and for links to websites using the respective translations.

 

Companies in Japan can raise additional capital (増資, zoshi) through: (1) a public offering (公募, kobo¹), (2) a private offering (私募, shibo) involving a rights issue (株主割当, kabunushi wariate) to all current shareholders, or (3) a private offering involving private placement (第三者割当, daisansha wariate²) of shares to one or more specified third parties, such as employees or business affiliates, who may or may not currently hold shares in the company.

In a future blog entry, I will show how certain companies in Japan have used private placement.

Notes:

1. 有価証券の募集 (yukashoken-no-boshu) is an alternative term for kobo.

2. 縁故募集 (enkoboshu) is an alternative term for daisansha wariate.

 Translations of 第三者割当増資 and Frequency of Use

Notes:

1. The terms listed are sometimes used as translations for daisansha wariatezoshi (第三者割当増資)

2. Figures indicate Google hit counts for material posted over the last one year, on '.jp' websites only and on all websites.

3. Used by Nomura Securities in a terminology glossary.

4. Used by SoftBank in a press release.

5. Used by Sumitomo Mitsui Financial Group in a press release.

6. Used by Panasonic in a press release.