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Business titans mixed on issue of energy imports from Russia

  • June 21, 2022
  • , The Asahi Shimbun , 6:16 p.m.
  • English Press

An Asahi Shimbun survey found that 31 of 100 major companies across Japan support steps to suspend or curtail imports of resources from Russia over its invasion of Ukraine, while a plurality of firms avoided stating a position.

 

Asked whether Japan should continue importing Russian oil and natural gas, 26 called for a reduction while five said it should stop the imports immediately or in or after next year. Sixty-seven firms answered they could not say one way or the other, or responded “others.”

 

Tokyo has already announced plans to phase out Russian oil imports in line with Europe and the United States. However, it intends to continue importing liquefied natural gas from Russia as the country accounts for about 10 percent of Japan’s LNG imports.

 

Akira Shimada, a senior executive vice president of Nippon Telegraph and Telephone Corp. (NTT), said, “Japan should hedge its risk by shifting to suppliers that can provide a more stable supply.”

 

The heads of the firms which answered neither or others explained their reasons for not stating a firm position.

 

Takeshi Niinami, the president of Suntory Holdings Ltd., said, “We need to make a comprehensive decision, including which countries to favor,” when Japan withdraws from Russia’s Sakhalin 2 LNG project.

 

Akihiro Nikkaku, the president of Toray Industries Inc., said, “The business community should support the government’s policy.”

 

Katsuya Nakanishi, the president of Mitsubishi Corp., which has invested in the Sakhalin 2 project, said, “This is a difficult issue directly related to energy security.”

 

“A decision should be made after considering the impact of a disruption of the supply (from Russia) on the domestic economy and society as a whole,” Nakanishi added.

 

The survey also showed that 53 companies have suspended or downsized their operations or transactions related to Russia  since the invasion started.

 

Excluding companies with no Russia-related business, more than 70 percent of the firms reduced or downsized their operations, which clearly indicates a movement away from Russia.

 

Forty-two said they suspended their operations with Russia while 11 said they have not stopped but downsized their operations.

 

Their operations range from production, sales and transportation in Russia to finance, telecommunications and internet services.

 

Two companies reported that they are still engaged in Russia-related business in the same way as before.

 

When asked about the impact on their operations due to the invasion, 24 firms cited “suspension or downsizing of Russia-related business.” Multiple answers were allowed.

 

However, many of them said the impact on their business performance would be limited as the transaction amounts are small.

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