Conquering Japan

Being the second largest ship owning country after Greece and before China and having the third largest vessel order book in the world after China and Korea, Japan surely is a global player in the maritime industry. As Japan also decided to become more active in the offshore industry again and is more and more open to innovations from abroad, it is time to explore the possibilities for the Dutch maritime cluster in the land of the rising sun.

During the seminar ‘Market opportunities in Japan’, organised by HME BV in November 2013 in cooperation with Justus Schoemaker, initiator of the Dutch-Japanese Maritime Desk, the challenges of the Japanese maritime industry were identified: Japan heavily relies on bulk carriers, the consolidation of yards has started, labour is expensive and inflexible, but Japan has to compete on price with China and Korea. Next to that, yards need to innovate, diversify and work more internationally. The Japanese shipbuilding industry is actively looking for partners to help it innovate; the Netherlands could be a perfect partner for Japan, as the country is home to leader firms in most of the segments that Japan wants to expand into and can provide complex equipment in areas where the usual suppliers like Japan, China and Korea fall short. Another advantage is that the Japanese have a positive perception of the quality of Dutch products.

Promotion

However, the Dutch maritime cluster is not very well known in Japan and 95 per cent of the marine equipment is still sourced from Japan itself, the top three foreign suppliers consists of Norway, Korea and China, and the Netherlands needs to get a foot in the door to be able to do business in Japan. To achieve this, the Dutch maritime cluster first and foremost needs to promote itself better to Japanese interests, as currently there is simply not enough awareness, and to create awareness, the Dutch need to be present in Japan. One of the possibilities to create more awareness is joining the Dutch-Japanese Maritime Desk. Initiator Schoemaker, a Dutch Master Marine, has been living in Japan since 2005 and has a lot of experience with the Japanese maritime industry as having worked for seven years at the head office of Mitsui O.S.K. Lines in Tokyo.

”I am surprised that no one even thought of opening a Dutch-Japanese Maritime Desk before”, says Schoemaker. ‘‘Japan offers so many possibilities, but only a few Dutch companies are successful here. My experience is that Dutch maritime companies do not immediately think of Japan as a country to do business in because the general opinion is that it is a difficult market. That might be true, but first of all, we need to put the Netherlands on the map in Japan and show the Japanese what the Dutch maritime industry can do. The desk currently counts four members: AEGIR-Marine, Innovative Input, Huisman Equipment and Cryonorm. Next to that there are several companies who are seriously interested in becoming a member. Japan looks for knowledge and experience abroad to be able to work together. Huisman is a good example, they build cranes Japan does not have any experience with, just like the projects Innovative Input is working on. Cryonorm specialises in LNG bunker technology, again specific experience that Japan lacks, and AEGIR-Marine offers good products and service for a competitive price.”

Companies that become a member of the desk will be provided with market research results, Japanese maritime cluster information, subsidy opportunities and relevant business leads. Moreover, Schoemaker is involved in lobby activities: “I give interviews to Japanese newspapers and promote the Dutch maritime cluster whenever I can. I work together with my Japanese partner Exeno Yamamizu, who has a big network in the Japanese maritime cluster. If companies look for individual support, I can offer them additional consultancy and project management services. I am in close contact with the Dutch Embassy, give presentations on a governmental level and work together with HME, which means we exchange information how to assist Dutch maritime companies in Japan best.”

That is exactly what the members expect of him, says Jan Groenendijk, sales manager at Innovative Input, an engineering company for the development and construction of heavy duty equipment: ”We want to expand and look into the possibilities in Japan. Our company is small, so we do not have the capacity to do a complete market research ourselves. Therefore we are interested in the Dutch-Japanese Maritime Desk. We were present at the seminar in November and became enthusiastic by Justus’ story. We expect him to familiarise us with Japan and its culture, show us where we can find business opportunities and introduce us to interesting parties. We see him as a mediator.”

Holland Marine House Japan

Depending on the number of members of the Dutch-Japanese Maritime Desk Holland Shipbuilding Association might decide to open a Holland Marine House Japan after participating in the maritime exhibition SEA Japan, held in Tokyo from 9 to 11 April. This would mean that HME BV will actively support the office, among others. Schoemaker: “I really hope that I can convince Dutch maritime companies that I can make the Holland Marine House Japan a success. The opportunities are tremendous, every day I run into an opportunity of which I think: a Dutch maritime company could easily do this, too.”AEGIR-Marine, specialised the field of stern tube seals and bearings and the service to go with it, is already active in Japan, but still needs support, says sales director Hans Dekker: “I am in close contact with Justus and I expect him together with his partner company Exeno Yamamizu as an agent to support us in the sales course, introduce us to the right people and to advise what is possible and what is not. In the future, he might become our local representative who can manage our projects there and maintain the contacts. I think he can be of added value to us. I do not want to wait to see if the Holland Marine House Japan will be established or not, I want to go on now.”

During SEA Japan, a Maritime by Holland Pavilion is present. Also a network drink will be organised to which the Ambassador is invited, who is also willing to assist by promoting and facilitating space for network meetings.The exhibition is also of interest to Groenendijk: “I want to get a feeling with the country and find out if and which of our products have added value for the Japanese market.”

Opportunities

Japan offers several opportunities for Dutch companies, explains Schoemaker: “Japan is interested in the offshore industry and wants to compete with the dominant parties, Europe, China and Korea. Japan also focuses on Brazil and Africa, mainly in regard to FPSOs and FRSUs, as they want to manifest themselves in this area. Therefore Japan is expanding abroad: they bought yards in Asia and bought themselves into big, important Brazilian yards. If you have a good relationship with the Japanese, there are worldwide possibilities to sell your products, as the decisions are still made in Japan itself.”

”Japan also found rare earth metals in the sea and currently developments in this field are taking place”, he continues. ”Therefore, deep sea mining is also something the Dutch maritime cluster can contribute to. Renewable energy is also high on the agenda, especially after Fukushima, and will clearly develop in the future. Also interesting: LNG. Japan already has experience with the transport of LNG, but there are more and more vessels running on LNG and the supply chain needs to be developed. Dutch technologies are renowned, our experience is bountiful in LNG and renewable energy and therefore we can surely play a role in the Japanese maritime industry. However, before we can join in, we need to make sure that attention is drawn to the Netherlands, we have to show that we are here and what we can do. It is difficult to get into the Japanese market, but as soon as you are in, you are in for life.”

Innovative Input is mainly interested in the offshore industry: ”If Japan indeed will focus again on offshore, we can offer interesting ingredients to help them. We also look into offshore wind farms, the Japanese use deepwater windmills and I am sure we can contribute something to this industry. However, first we have to explore what Japan can mean to us and vice versa.” AEGIR-Marine focuses on shipping companies and ship owners, a big market in Japan. Dekker: ”A lot is being outsourced, but the decisions are still made in Japan itself. I visited Japan three times now, and we started in Tokyo, where the big three are located: MOL, K-Line and NYK. That was very difficult, only to make an appointment was almost impossible, as these companies are very reserved but with the support of Justus and Exeno Yamamizu we were able to get a foot in the door.”

He continues: ”Then I came in contact with a small shipping company in Kobe, that became our first client. He tipped us to go to Imbari, which is home to a large number of shipping companies and shipyards and its people are more open-minded regarding companies from outside Japan. The Japanese like to do as much as possible themselves, they are very introverted and therefore not as open to foreign products as we see in Europe, but I am convinced that with the right products and the right assistance it is possible to conquer the Japanese market and therefore the Holland Marine House Japan could become a success. We are a service company, but also offer very specific products; as we can offer our services and products for a competitive price, and as we are very specialised, we are of added value to the Japanese maritime industry.” 

Tips to keep in mind

When doing business in Japan, the cultural differences should be kept in mind. ”A reliable local representative, who can initiate the first contacts and give follow-ups, is important to open doors at the highest level within a Japanese company”, advises Schoemaker. ”As in Japan, the middle management is involved in the process of decision making, but needs to discuss this with the higher management internally, having a lot of patience is necessary. Doing business in Japan means socialising; going out drinking is part of the Japanese business culture. Also keep in mind that the Japanese language is very flexible, there is no word for ‘yes’ or ‘no’, something one has to get used to if you are used to getting clear ‘yes’ or ‘no’ answers.”

Also Dekker experienced communication difficulties: ”English can be a problem, although English is the international maritime language. Be patient, they are patient, too. I suggest not to start in Tokyo, but in Kobe, Osaka or Imabari; I know from experience that the people there are more open-minded.” Groenendijk adds: ”Building a trusted relationship is a lot more important than scoring a one-off contract in the Japanese culture.”

Gail van den Hanenberg