With the chance to make something good from the Great East Japan Earthquake tragedy, the government should compile an ambitious rebuilding plan that extends for 100 years, says Kentaro Ohyama, president of the household goods manufacturer Iris Ohyama Inc.
With the chance to make something good from the Great East Japan Earthquake tragedy, the government should compile an ambitious rebuilding plan that extends for 100 years, says Kentaro Ohyama, president of the household goods manufacturer Iris Ohyama Inc.
The company's headquarters were moved from Higashi-Osaka to Sendai in 1989.
Excerpts of the interview with Ohyama follow:
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Question: With six months having passed since the Great East Japan Earthquake, how much progress has been made in rebuilding the disaster-stricken areas?
Ohyama: There are two major disparities.
One is between different business sectors. Some companies that were once representative of the region, such as Tohoku Electric Power Co., regional banks and the maritime industry, are not doing very well. But, companies in the construction and civil engineering sectors that are handling the rebuilding are so busy that they face manpower shortages. With support groups and volunteers entering the disaster areas, hotels and inns have also enjoyed good business.
The other disparity is between regions. While those regions hit by the tsunami are still struggling, the other regions have returned to a normal business environment ever since the Golden Week of national holidays in late April and early May.
Q: An increase in demand due to the rebuilding effort will only be temporary. What will be required for long-term rebuilding?
A: A considerable amount of time will have to be set aside to reconstruct the manufacturing sector by trying to make something good out of a tragedy.
The central part of Sendai was the area that was burned to the ground during World War II. Because the area was burned, new, large roads could be built and buildings could be constructed to create one of the biggest cities in the Tohoku region.
For that reason, the rebuilding program should seek to construct industrial parks and distribution centers in what may have been rice paddies if the sites are ideal because of proximity to airports and harbors.
While it is difficult to say due to emotional reasons, the rebuilding should be thought of as a 100-year plan undertaken by the nation.
Q: Will the extremely strong yen serve as a burden on the rebuilding process?
A: I do not believe a strong yen will continue to remain in place in a nation whose population is decreasing and aging.
While things may be difficult temporarily, in another five years personnel expenses will increase in China and Southeast Asia due to personnel shortages. Companies that left the Tohoku region in search of cheaper personnel expenses will be forced to return to the region.
However, for companies in the secondary industrial sector that depend on mass production, the fundamental point is to manufacture and sell in gigantic markets where demand is huge.
In Japan, where the market continues to shrink, that will not be possible in the long term, regardless of what happens to the yen.
Q: What should companies in the disaster-stricken areas be doing?
A: From before the natural disasters, a major issue facing the Tohoku region was that there were few well-known companies, with many doing subcontracting work.
For example, while Ishinomaki is known for its "tarako" (cod roe), tarako that is sold for several thousands of yen to Hakata is turned into "mentaiko" (marinated cod roe) in Hakata and sold for several tens of thousands of yen. If that is the case, there should be more famous tarako companies in Ishinomaki.
In the future, the only companies that will survive are those that can come up with products and services developed from the standpoint of consumers and which have value added that can only be provided in Japan, such as by insisting on high quality or using designs rooted in Japanese history.
Q: What do you want the central government to do regarding the rebuilding process?
A: I hope it will move swiftly with rebuilding measures, such as providing broad assistance to the disaster victims and removing debris. Rebuilding should also not only be about distributing money, but regulations should also be reviewed. If regulations, such as the ban on selling farm land, were eliminated, companies would more naturally accumulate in the region.