 Sure you've had a very interesting and intensive session earlier today with the speech contestants Right now we have four very distinguished speakers On a special 21st anniversary panel discussion on UK-Japan business relations My name is Daisuke Tsuchiya. I work at Brunswick which is a communications consultancy firm and Personally, I do a lot of work advising Japanese companies and international communications and vice versa on issues from MNA and crisis We have here today full of probably the most distinguished representatives to speak about the Japan and UK business From from this side, we have mr. Jun Arima director general of Jatro London We have mr. Haruki Hayashi who is the president of the Japanese Chamber of Commerce and Industry in the UK chairman of Mitsubishi Corporation Europe Mr. Jason Daniel who is a partner in country head of Japan for Simmons and Simmons the law firm and Finally, but not least Martin mr. Martin Wemben Vice president of strategic nuclear programs at Amec Foster Wheeler In terms of format, we would like to ask each of these four participants to start off with five minutes of discussions focusing back on on the 25 years and how the UK and Japanese business relation has evolved of course This is a business speech contest and we think that is quite relevant to to the the great contest that we have just observed today And also we would like to hear from from our guest speakers about how they see the relationship going forward and the potential in the future ahead So without further ado Mr. Arima Thank you very much. Mr. Tsuchiya and 25 years 25 years of Japan UK communications In short, I feel we have come a long way and 30 years ago when I was young. I was deeply engaged in Back in my home ministry ministry will come each only needs industry many In import promotion activities of Japan From overseas at the time as you know, Japan was recording record high trade and Current surplus vis-à-vis the United States and European Union and not surprisingly This has been causing a lot of trade friction between Japan and those countries and UK was not our exception in 1990 UK was marking trade deficit with Japan at almost four billion Pounds and there was a trade friction Issues such as squatch whiskey tariffs and so on and at present You get still marking the third deficit of 2.8 billion pounds to Japan However, we are not already we are not any more talking about bilateral economic relation solely based on trade balances Back in 90 80s and 90 90s Probably we are talking about bilateral economic relations based on trade figures import export figures of trade balances But it is not the case today This is because globalization has substantially increased Japanese investment for indirect investment overseas and this has contributed to enormously to economy and employment in host countries Japan's FTI for indirect investment dates back to 1970s in UK in the field of household electronic appliances Partly in response to trade friction at that time and when Sir Peter Parker Started this competition back in 1990. He was the chairman of the Mitsubishi Electric Europe And in 1986 in response to strong invitation from modern thatcher Nissan started auto production in Sunderland and now over 50% of our automobiles produced in UK are coming from three Japanese companies namely Nissan Toyota and Honda and Minister cable Minister Livingstone and Prime Minister Camelon quite often say that Japanese auto companies have completely transformed UK's auto sectors. So we feel very much proud of that Japanese investment to UK has been widening its scope nowadays a Mitsubishi heavy industry is engaged in offshore wind and Hitachi and Toshiba are engaged in nuclear sector Hitachi Railway will participate in the IEP project. This is indeed not worthy Considering that Sir Peter Parker again was a legendary chairman of the British Railway Board So in addition many Japanese companies are participating and are setting up R&D facilities Focusing on you get strong basic science base So Japan's FTI to UK has more than tripled from 20 billion pounds to 68 billion pounds from 1996 to 2013 Now UK is the fourth largest destination of Japanese investment So over thousand Japanese companies operating in UK and creating 160 billion thousand jobs So why Japanese companies has chosen UK? There must be various factors such as in speaking country or financial center or information center and gateway to European common market But however, I think the biggest factor is UK's Consistent posture of welcoming foreign foreign direct investment UK's strong commitment to free and open trade is also Signified by strong support to early launch and early conclusion of the ongoing Japan EU economic partnership agreement EPA So in short UK Japan economic relation has evolved from trade Trade balance oriented one to more investment oriented one or in other words more Interrelated or integrated one. So that is my comment. Thank you Thank you very much. Mr. Arima for the very comprehensive Overview especially into Japanese companies and how they have Invested into the UK Like now like to ask Mr. Hayashi for his views especially from the perspective of our individual companies have evolved during that time First of all, I feel very privileged to be a part of this very distinguished and Precedious event marking quarter of a century I'm talking to talk about one of these one thousand companies Arima's and just mentioned to me twenty five years is certainly a big proof of Continuity and it's the real living standard After the tradition and which I believe is something common between UK and Japan Today I do represent the Chamber of Japanese Chamber of Commerce in interesting UK but I would like to share with you our own special journey in Same 25 years Time frame you just wonder why I put it out the English company and but this is quite interesting because We're celebrating our 25th anniversary since the start of our involvement in UK food and drink company called Princess and This company was founded back in 1880. It's an old company Our association is a real true pride for our company in working both successfully and harmoniously in UK Out of the city of Liverpool How many people come from Liverpool or born in Liverpool? So you're scoosa, right, right and This story started 25 years ago The company Princess was very small food business trader with only a hundred seventy eight people And with a turnover of just about hundred hundred million pounds There's only one factory nearby the Liverpool When we Mitsubishi corporation acquired a hundred percent interest of this company Today the same company is amongst the top Five food and drink companies in UK generating one point eight billion pounds Revenue revenue per annum employing at the peak over 8,000 people with 14 factories in UK and Continental Europe and Africa The numbers certainly do speak for its growth Over a quarter of the century, but what I want to share with you is not to promote the canned food here but our unique journey in UK, which is Sharing common value and vision Mitsubishi corporation share the vision with princess Some 25 years ago to grow the business in UK and beyond in continental Europe by fully respecting each other and Founders value At the same time sharing common view and vision to expand business via careful succession of merger and acquisition rather than relying on organic growth limited to UK In the past 25 years princess made 23 acquisitions By our joint team of UK and Japan Our vision to become a real insider in UK and European market Was made only possible by continuously having Tireless debate in English, of course in analyzing the fast changing market situation and carefully scrutinizing acquisition opportunities key to success was in the past and will be for the future is to Have continuous effort towards understanding philosophy and the culture of our two companies and countries To achieve this very difficult task one thing we did not do is To inject top management by way of parachuting CEO from Japan To the local management team, but rather we decided to have Mitsubishi people to work and climb The same carrier pass and the same ladder in the company Today we have still only eight Japanese working in the Liverpool headquarter of 400 staff or 8,000 on the global basis One of eight is now enjoying his 15th anniversary in Liverpool Another one is enjoying his eighth year working in the Liverpool There are certainly all becoming real schools are like the gentleman sitting on the top I didn't realize the schools is also a soup That you can have a eat in Liverpool, which I tasted in the Liverpool pub What I observe and learn from our 25 years in this particular journey is value of resilience and coherence and Continuity or tradition which are two nations sharing common language helps as you saw today with everybody's Amazing ability to communicate in the Japanese language It's so much narrows the communication gap that we do not ever want And I always recommend bad English or simple English to my fellow Japanese colleagues and And scrap that hesitation to speak out because We already have lots in common between our two countries in this sense Your speech or your ability to deliver a message today Not only impressed me But also gave me a great pleasure in encouraging Japanese colleagues to communicate in English I'm thrilled that your wonderful achievement will encourage a lot of people in Japan and Hope that you'll continue to be part of UK and Japan relationship Thank you very much. Thank you very much. Mr. Hershey. I was a very interesting example of how a company can expand and and be part of The the environment not be an external factor, but really be integrated in terms of mr. Hershey mentioned 23 acquisitions in the last 20 25 acquisitions in the last 23 acquisitions in the last 25 years I think that's a great lead to our talk from our next speaker mr. Jason Daniel Who will give us an overview on some of the macro trends of M&A between the two countries? Mr. Daniel, please. Thanks. That's good So my name is Jason Daniel. I was On this stage as a as a finalist in 1998 and I'm very It's brought back lots of very intense memories coming back I was very nervous when I was approached to to be one of the panelists because I thought Maybe the discussion would be in Japanese But my fellow panelists I'm afraid they they well, I'm very glad actually they have spared me the need to talk in in in Japanese today If I look back at my experience over During the the sort of the 80s when I first went to Japan and 90 in the 90s when I first started working there Really M&A so that the acquisition of a company or the acquisition of a business was very unusual It really didn't happen very much and there was the the concept of koksaka Which was very topical at the time Often though, I think that meant having having a foreigner having a few foreigners in the organization And investing in in some of your staff going abroad Since then clearly things have changed hugely the Japanese domestic market and the the declining population in Japan Means that many Japanese companies need to go abroad. They need to go out of Japan and Buy companies expand their markets And in the same way the M&A market in Japan has developed Back then there were very few cases of an owner of a business selling it that was felt to be a Bit of a failure perhaps and certainly if you did sell it You probably didn't want to sell it to a foreigner. There was a sort of gaishi Allergy you were worried about what the what the foreign acquirer might do I think all that has changed a tremendous amount What has been perhaps the most interesting thing that I have witnessed in the various transactions. I've been involved with is is trying to get the balance between The local business as it was so before you came along and bought it. This was a local business that was doing very well and now you want to Incorporate that into your global business How do you get the balance between being a global business and a local business? And sometimes this is referred to as the sort of global concept of being both both global and local at the same time And clearly there are some tremendous challenges here Language is is one if your headquarters For example, if your headquarters speaks in Japanese all its reports are in Japanese all the important decisions are taken in Japanese then the people in the overseas business can feel quite isolated and Perhaps they can't really participate in in the global business at all So you've got those language challenges. You have obviously cultural challenges Different customs different values, you know, what is the purpose of a company? What is what are you looking for as an employee of a company? Are you looking for a family that is going to look after you or is this More of a temporary relationship What is your work-life balance? All these are very difficult issues, I think and from my perspective as a lawyer, obviously lots of different laws So Making this work getting the balance right Has always been a challenge. I think right now it's become even more of a challenge because there are some very Tough laws that have come in around the world around areas like competition, so antitrust law or bribery or or data protection looking after your data and These pose a risk for a global business You need to be observing those laws Every way you operate and if you fail to do that The consequences can be very significant very big fines billions of euros of fines perhaps Clearly therefore you need appropriate management and you need appropriate oversight of a business that you acquire But You shouldn't squash it when you buy it As Mr. Hashi was just describing if you buy a business and then you parachute in your people from head office I think that is there have been some examples of that Having a very negative effect on the local business. You need the local managers To stay there. It's the business that they have been running And presumably you thought that they had potential otherwise you wouldn't have bought it So leaving them is a good idea but somehow Enriching the management tying it tying the business tying the management of that business to the global business in some way Is one of the biggest challenges that I think appears here Certainly sending more Junior staff can really help But sometimes they risk being seen as a spy You know, they've been sent by head office and they're just there as a spy So you have to find a role for them. You have to find a meaningful role and I think You know what I'm building towards concluding is is that the role of Integration of of Bringing the local business and the global business together Investing the time investing the effort investing money in flying people around the world to actually meet each other Get to know each other or in video conference systems that really allow people to get to know one another is Is very important and the availability of that technology and the willingness of companies to invest in in this integration In recent years has I think been a big development and has made Companies work groups work Much more effectively than they did if I look back, you know, 20 years ago 15 years ago I think now when a Japanese company comes and buys something here it tends to run it Much more efficiently some good lessons have been learned And some good examples set by Mitsubishi cooperation and others Similarly when UK businesses go into the into Japan I think there is a greater willingness amongst Japanese employees to engage with head office. There's certainly many more international internationally minded Personnel I think and then previously there were and really at the heart of it all I think one thing has stayed the same which is it the individual can be terribly important the Attitude of the individual in making a global business work following an acquisition is It's one of the most critical things and I think all the participants in today's Contest show their willingness and determination to Perform that kind of role so many many congratulations to all of them for participating Thank you very much, Mr. Daniel our final speaker mr. Martin Wendman, I think again following from from mr. Daniel's discussion about about Japanese companies and their involvement and how they have evolved in their relationship with UK Businesses over here. I think gives a different perspective from a UK company and how how working with Japanese companies has changed Mr. Wendman, please Konnichiwa Good afternoon our two island nations each have a long and proud history With a rich and deep cultural tradition which to this day continues to colour and Flavor the style and the behaviors in our mutual business endeavors we're both generally conservative in our approach with a formality and a sense of fair play and Honor which can translate into long and trusting relationships But it may also take a long time to build the foundations upon which this trust and this mutual respect are established in My own area of nuclear power station construction maintenance and more recently nuclear decommissioning Our two countries also share a common and rich nuclear heritage and expertise the Japanese process of meticulous planning and execution Nimawashi is particularly well suited to the capital intensive and very complex program management required in the heavily regulated and Safety conscious world of nuclear power generation But in this respect at least Perhaps the Japanese are even more formal and more cautious than the British with a consensus decision-making and collectivist approach Which contrasts perhaps with a wider acceptance of uncertainty and risk in the British context? When it comes to nuclear decommissioning such as at Fukushima Daiichi These two approaches make very natural and mutually supportive partners The very nature of the challenge at this complex site means that managing Uncertainty and risk is an everyday part of the discovery and the problem-solving Not every eventuality can be anticipated or planned for it cannot be anticipated yet alone worked out in advance in every case My own company a mech foster wheeler is proud to be working with tepco and Their partners to share the lessons learned and the experience gained from facing our own challenges Here in the UK at complex sites such as cellar field We have leak detection fuel debris removal soil and land scanning Sorting and remediation techniques which we can and we are happily sharing with our Japanese colleagues It is then only natural perhaps that we transfer the underlying essence of this business relationship Back here to the United Kingdom Where Hitachi and Toshiba are planning to build nuclear power stations at Anglesey and in Cumbria We are a technology neutral company and as such we've been able to work with a variety of Reactive vendors and suppliers and we're currently working with Horizon and Hitachi GE and have been for over 12 months now Supporting them in an owner's engineer capability with their pre planning licensing and regulatory process That means that we have people deployed in the Hitachi offices both here in the United Kingdom and also in Japan We're also working with Hitachi's Japanese supply chain companies such as Takanaka to support the design development of nuclear power plant components to enable them to be deployed here in the United Kingdom, but within a British bespoke context and With support from JETRO and our own UKTI and the fabulous staff at our embassy in Tokyo under firstly Sir David Warren Who's with us today and now ambassador Tim Hitchens? We are slowly building the foundations of what I hope will be lasting partnerships for helping with the wider decommissioning programs across the older reactors in the Japanese nuclear fleet and We do so in a broader context of shared values in respect Where I understand that the British flag is second only in popularity to the Japanese flag itself in Tokyo And I'm reliably informed the famous cartoon character Miss Kitty was actually born here in London And of course we share an enthusiasm for malt whiskey both space-eyed and from Saka So long may that continue in the spirit of mutual cooperation Domo Arigato, Kasamisu Thank you very much. Mr. Wendman. I just like to ask one question for all the Panelists and then then open to the to the floor for discussion we've heard a lot about how how the Relationship has evolved over the years Could could each of the speakers give a sense of where you think the potential lies going forward into the future And what where is there more scope to do? Better business between the UK and Japan Okay, thank you very much and first of all, you know, we praise UK very much because as I said It's opening posture to foreign active investment. And by the way cumulative investment to the UK per GDP is almost 50% So that's amazing figure. The relevant figure for Japan is only 3.7% so therefore Jets from my organization have turned a lot from our equivalence, you know the counterpart UKTI How to induce more foreign active investment? So we very much expect more UK investment to Japan so that is possible scope of further collaboration and Then we very much expect the investment in such areas as energy environment like, you know, you said and also you know the Life science or ICT or finance or initial education and so on. There are plenty of areas Where Japan the UK could find our common value and also common benefit I think I probably like to not to be protocol because everybody here is very much interested in what's going to happen in May election and What I'm trying to give you a message is that the Japan values UK in a context of a broader continent of Europe because that's what The UK delivers so much value to everybody that the people in UK don't realize so all the new Regulations and policies coming up from in conjunction with UK and the rest of the Europe and That is setting a global scene and later becomes a global standard So the Japanese enterprises are very keen to understand where the trends coming out So I just hope you have a peace of mind that the UK is a very important part of European continent Yes, I certainly think a Lot of the investment that's come into the UK over You know the last couple of decades must be connected surely to the UK's position as a a gateway to Europe and Yes, it has a you know has a flexible work workforce. It has an educated workforce English is the is the language here, but surely the position is Europe as part of Europe must be a very important Aspect to the attractiveness of of the UK to to Japanese investment. So I would set me second what Mr. Hashi has just said Going the other way there is Perhaps as there never has been before Potential for investment from the UK into Japan the yen rate is You know three four years ago the yen rate was very very high and and made buying something in Japan extremely expensive So perhaps there's more potential there and perhaps there is more willingness amongst Japanese business to work in partnership with Foreign companies than there has been to date. I don't I don't say that really based on anything but I'm aware of the you know the number of people that have got MBAs from American universities or UK universities who have gone back to work in Japan who have a very international mindset and who I think will look to Use internationalization globalization as a way to strengthen their companies On the global stage through working closely with with UK companies. I would hope I think we're living In an increasingly or increasingly uncertain world and no more is that the case than in the energy sector Where with increasing uncertainty to keep the lights on in our homes in our industry We have a great opportunity. I think for UK and Japanese companies in the energy sector to work together to help plot a path through the often competing demands of environmental responsibility affordability for our consumers and also security of supply in this uncertain world and I think sometimes sharing Some of our lessons and knowing what not to do is just as important as knowing what to do and In that respect my I come back to my earlier comment about perhaps the the British style of having a greater appetite for risk and Working with our Japanese colleagues to differentiate very subtly between Anzin the technical requirements to be safe versus Anshin the assurance of Society and the comfort that our people get from knowing that we're doing the right things And we can do that by working together and sharing our best practices