General Edition Sunday, May 14, 2006 Issue No. 374
+++ INDEX
- What's new
- Services lineup
- News
- Candidate roundup
- Upcoming events
- News credits
BiOS is Recruiting Due to continuing expansion of our systems integration and outsourcing businesses, BiOS is actively recruiting BILINGUAL engineers and IT trainees. Wide range of positions open, with competitive salaries and working conditions. Join our team of more than 50 engineers and get the BiOS stamp of quality on your resume. For more info: [email protected]. |
| +++ WHAT'S NEW |
There appears to be a major ground shift in thinking about credit and
lending for smaller companies in Japan. For so long, the only way to
get credit here was to go to the People's Finance Corporation, the
"Kokumin Kinyukoko" -- now the Kokumin Seikatsu Kinyukoko (National
Life Finance
Corporation) and follow their guidelines on allowable
lending -- or to have land to put up as collateral. Going with the
NLFC meant following lending guidelines which seldom matched the
company's actual financial situation. As we recall, in the first year
of lending you could get JPY5-10m, depending on whether you made a
profit or not, then in the second year it was JPY10-15m, and so on. We
assume that this pre-determined scale was the government's
way of keeping most lenders on a short leash and avoiding
any major blow-outs of companies that might otherwise grow
too fast.
Having land to put up as collateral, of course, made
anything possible. Even during the precipitous fall of the economy in
the 90's, land was still the most likely key to secure business loans.
The problem these days is that whereas in the past only those with
some money and substance behind them could form a company, now thanks
to the change in the commercial code back in 2003, anyone can
set up a one yen company, and they are, in droves. But
most of these new players are in Internet, retail, or
services and have little or no financial backing -- and
certainly no land to use as collateral.
The government knows that a continuing flow of new
companies is vital for a healthy economy and so has to come up with
new types of collateral to assist this new wave of entrepreneurs --
especially since there is so little risk capital is available. Thus,
it is probably not surprising that there have been two notable press
announcements in the last week about making more capital
available to more companies on a softer basis than ever
before.
Earlier this week, the Tokyo Metropolitan Government's own bank,
ShinGinko, announced that it would start making loans to Tokyo
companies by allowing them to use their cash flow as collateral. This
is interesting, because it means that even the smallest consulting or
service firm can now bid for large deals that may need expenditure
before the contract pays out -- so long as the customer has substance,
such as public sector entities. It also means that
companies with recurring income in competitive sectors,
such as food and apparel, can get cash to make earlier
investments in their systems and outlets and thus establish
a virtuous cycle of investment-and-results... and not have
to wait 20 years to eke out a small pool of investment
capital.
A similar announcement was made yesterday by METI, which
says it will facilitate bank lending to SMEs based on those companies'
inventory and other non-fixed assets. How they intend to do this is by
introducing a certification process for credit assessors and thus
introduce some discipline and risk awareness into the lending
industry. METI reckons that SMEs around the nation hold about JPY43trn
(US$390bn) in inventory and a inventory-based credit could unlock a
similar amount in borrowings.
Apparently the overall market for SME loans is currently around
JPY419trn (US$3.8trn), so the new evaluation system would increase
loan amounts by around 10%.
Lending on cash flow and inventory for collateral is
nothing new overseas, nor for that matter in Japan either,
so long as you're a larger firm with a strong credit
history. But with more than 80% of Japanese companies being SMEs and
most being inexperienced in how to get business- based (rather than
asset-based) loans, a lot of responsibility for getting the risk-loan
formula right will fall to the so-called experts that METI is
certifying, along with those that ShinGinko will be outsourcing to. We
worry that now the Japanese economy is moving again, the
credit restraints may be loosened too much -- as happened
in the late 80's.
Right now we're at the peak of corporate earnings, and
things are looking pretty good. But it only takes a falling market in
2007 or 2008 (highly likely in our opinion) to reverse the sales of
these new companies and put their inexperienced CEOs into financial
difficulty. And once that happens, since the only source of collateral
is the cash flow, if this dries up up in a downturn, the lenders
will be left with little but empty dreams and some
traumatized staff. And one thing we have learned about
lenders is that they seldom want to step in and help fix a
company in such a state.
...The Information Janitors/
| +++ SERVICES LINE-UP |
Contact [email protected] if you want your company here.
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MAGAZINE INTERNSHIP The J@pan Inc magazine currently has an internship opening for a web programmer. |
| +++ NEWS |
-Chuo Aoyama in disarray
- ORIX net income soars 82%
- Solar cell leadership
- Flavoured oxygen
- FSA crackdown on brokers
-> Chuo Aoyama in disarray
Shades of the Arthur Andersen debacle... The Financial Services Agency
(FSA) has decided to slap a 2-month business suspension on Big 4
auditing firm Chuo Aoyama PricewaterhouseCoopers. The suspension is
punishment for Chuo's role in the Kanebo window dressing scandal. The
total business ban is considered to be one of the most
severe administrative actions by the FSA to date, and
experts are saying that it may cause the demise of the
auditing firm -- similar to what happened to Andersen in
2002 in the USA. Indeed, on a daily basis, major corporate
clients are announcing in the media that they are either
switching vendors or putting Chuo under review. Although
some, like Toyota, are holding tight for the time being.
(Source: TT commentary from reuters.com, May 10, 2006)
-> ORIX net income soars 82%
The saying "money makes money" was never truer than for financial
services company Orix, which announced a record busting year. On
revenues of JPY947.8bn (US$8.6bn), Orix earned JPY252bn (US$2.29bn) in
pretax profit and JPY166bn
(US$1.8bn) in net income -- up an amazing 82% over the previous
financial year. All of the company's 9 divisions had strong results.
(Source: TT commentary from investors.com, May 12, 2006)
http://www.investors.com/breakingnews.asp?journalid=37683340&brk=1
-> Solar cell leadership
Japan appears to be leading the world in its R&D efforts in
next-generation dye-sensitized photovoltaic cells. Filings during a
5-year period from 1988 through 2003 with the US PTO resulted in about
51% of all patents filed in the field coming from Japan. Leading
filers include Fuji Film, Sharp, Sony, Fujikura, and AIST (National
Institute of Advanced Industrial Science and Technology). (Source: TT
commentary from nikkei.co.jp, May 12, 2006)
http://www.nni.nikkei.co.jp/AC/TNKS/Nni20060510D10JSN03.htm
-> Flavoured oxygen
An interesting competitor to "genki drinks" is about to hit Tokyo. You
will soon be able to pick up a can of flavored oxygen at your local
7-11 conbini store. The new product is called "O2 Supli". It will come
in 3.2 liter cans, in peppermint and grapefruit flavors. You ingest
the contents by way of a transparent mask attached to the can's
nozzle. One can is expected to last about a week if used in the
recommended 6 doses a day. (Source: TT commentary from
newkerala.com, May 12, 2006)
http://www.newkerala.com/news2.php?action=fullnews&id=58099
->FSA crackdown on brokers
The FSA has said that it will crack down on unauthorized brokers of
shares in privately held companies, after many complaints from
consumers about being pressured to buy stocks in such firms. The surge
in the stock market and desirability of pre-IPO shares have created an
ideal greed-reward environment for unscrupulous brokers. By law,
private companies are allowed to solicit up to 49 investors
on a one-by-one basis and do typically use brokers. But
recently scamsters are selling shares without delivering
share certificates or proof of purchase. Apparently the
National Consumer Affairs Center received 1,296 such
complaints in the 9 months between April 2005 and January
2006. (Source: TT commentary from nikkei.co.jp, May 10,
2006)
http://www.nni.nikkei.co.jp/AC/TNKS/Nni20060510DA0J5101.htm
NOTE: Broken links
Many online news sources are now removing their articles after just a few days of posting them, thus breaking our links -- we apologize for the inconvenience.
| +++ CANDIDATE ROUND UP |
DaiJob, Inc's executive placement team, Daijob Consulting
-----------------------------------------------------------------------------------------------
DaiJob has great candidates. Contact Andrew Peters at
[email protected], or Ph: 03-3499-3040 for details.
-> Proj. Mgr/SE/Technical Consultant, Finance Industry
Male, late-20's, native Chinese, fluent Japanese, business English
Experience:
- Project leader and design engineer of 3 member team in charge of development of Finance station system
- Database design through to testing
- 8yrs web and applications dev.
- C++, JAVA, VB, VC
- Web/application servers, framework technologies, design patterns
- Windows, UNIX, Linux, IBM/AS400 and MacOS
- 4yrs as Leader and systems engineer between Japan/China
- 5yrs Project Manager, System Analyst, Software Engineer
- Well seasoned systems integrator with vertical knowledge of Telecom, customer care and billing, semi-conductor business sectors
- Tri-continentally educated & experienced (Asia, US, Eur)
- ICT Project Management, Project methodology and Change Management, ICT Vendor management, ICT software development and Best Practices, Outsourcing & vendor management
- Worked for top-5 SI-ers and industry leaders in Europe, Japan and US
- Handled project budgets of JPY600m
- Ran international project, 80 team members
- Serviced Chinese SOEs using Japanese technologies
- Successfully managed various time-critical rollouts of production-live platforms
- Seeks employment in foreign capital company, or overseas posting in Japanese company
*Looking for JPY9M+. Available 1 month's notice.
--------------------------------------------
-> ICT Manager
Male, early-40's, fluent English, Japanese, French, Italian
Experience:
* Looking for JPY15M. Available 1 month's notice.
- History of excellence in sales/PM for large Japanese co.
- Achieved 120% sales increase 4yrs running
- Intiated new sales & marketing strategies
- Expanding repeat sales by 150%
- Most recent experience in Recruitment, HR/Management planning and consulting, across multiple industry sectors
- Also back office, HR, and general affairs administration
--------------------------------------------
-> Sales
Female, 33, native Japanese, business English
Experience:
* Looking for JPY5M. Available immediately.
DaiJob has great candidates. Contact Andrew Peters at
[email protected], or Ph: 03-3499-3040 for details.
| +++ UPCOMING EVENTS/ANNOUNCEMENTS |
Entrepreneur Association of Tokyo Interested in expanding your business into the world's fastest growing
economy? If so, then you are in luck because EA-Tokyo will be
gathering a panel of experts on doing business in China for their
third anniversary panel discussion. The panelists will be addressing
some common questions, such as how to get started up in China and the
major cultural and bureaucratic issues encountered there.
Website: http://www.ea-tokyo.com. |
IT events announcements are priced at JPY50,000 per week. |
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