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10 years on: auto industry leading biz expansion into Tohoku

  • February 15, 2021
  • , Jiji Press , 4:11 p.m.
  • English Press
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Sendai, Miyagi Pref., Feb. 15 (Jiji Press)–The automobile industry is leading a wave of business expansion into the Tohoku northeastern Japan region to support a revival there after the March 2011 earthquake and tsunami.
   

In order to accelerate the region’s postdisaster reconstruction, boosting production and other business activities is essential. How to secure human resources and create new industries is key, according to company and government people.
   

Shipments of goods produced at factories in 2018 totaled 12.6 trillion yen in the three heavily hit Tohoku prefectures of Miyagi, Iwate and Fukushima, up about 20 pct from 10.8 trillion yen in 2010.
   

The transport machinery industry, mainly automakers, logged a whopping 80 pct increase.
   

Toyota Motor Corp. <7203> regards Tohoku as its third domestic production center, after its home region of Chubu in central Japan and the Kyushu southwestern region.
   

Based in Ohira, Miyagi, subsidiary Toyota Motor East Japan Inc., created in July 2012 through the merger of three group companies, accounts for 15 pct of Toyota’s domestic production. It plans, develops and makes subcompact vehicles such as the Yaris.
   

“We are building a solid foundation of the auto industry in Tohoku,” said Shintaro Hayashida, a senior official for regional cooperation promotion at Toyota Motor East Japan.
   

In 2019, his company had parts procurement transactions with 170 business establishments in Tohoku, up about 70 pct from 2011.
   

Toyota-affiliated parts suppliers also moved into Tohoku. Toyoda Gosei Co. <7282> built a rubber parts factory in Miyagi in 2015.
   

“In terms of risk diversification, the establishment of the new production base was very meaningful,” said Satoshi Morikawa, president of Toyoda Gosei subsidiary TG East Japan Co., based in Kurihara, Miyagi.
   

The Toyoda Gosei group plans to start making resin products in Tohoku in 2022.
   

In other industries, optical parts maker Topcon Corp. <7732> put its new factory in Tamura, Fukushima, into operation in December last year.
   

President Satoshi Hirano praises the quality of Tohoku workers. “Many show dedication when dealing with things,” he said. “It’s easy to secure people here who are ready to acquire the sophisticated skills needed to make high-precision lens.”
   

Tokyo-based frozen food maker Yayoi Sunfoods Co., which had some facilities hit by the 2011 disaster, started operations at a new factory in Kesennuma, Miyagi, in November last year.
   

“We can now work together again,” factory manager Mizuki Onodera said, sounding happy.
   

The coronavirus epidemic has dampened corporate appetite for investment. Meanwhile, a severe supply shortage of face masks in spring last year drove many companies to review supply chains.
   

Tohoku may draw attention for possible sites of new domestic bases from manufacturers looking to shift some of their production back to Japan.
   

Meanwhile, the pace of land acquisitions and leasing for setting up plants has slowed from levels before the disaster, according to the industry ministry’s Tohoku regional bureau.
   

 

Between 2011 and 2019, there were only 234 deals to acquire or lease at least 1,000 square meters of Tohoku land for plant establishment by companies based in other regions, the bureau said.
   

“We can’t secure enough employees for administrative work or in the field of information technology,” said the president of a Tohoku company.
   

The situation is even worse in Fukushima, hit also by the nuclear disaster at Tokyo Electric Power Company Holdings Inc.’s <9501> Fukushima No. 1 power plant triggered by the massive temblor and tsunami.
   

Some companies struggle to find people willing to work at new factories even if they built them in the prefecture.
   

“It is necessary to make the region more attractive, including by creating new industries,” said Masayoshi Watanabe, director-general of the Tohoku bureau.

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