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Interview with Mr Masao Nishimura

Mr Masao Nishimura
Mr Masao Nishimura
VP & Director General
Japan Chemical Fibers association (JCFA)
Japan Chemical Fibers association (JCFA)

With head offices in Tokyo and Osaka, Japan Chemical Fibres Association (JCFA) was founded on August 19, 1948. JCFA, through its varied activities, is engaged in boosting the overall growth of the chemical fiber industry in Japan. Functional since 50 years, JCFA has been proactively acquiescent in representing industry’s opinions in the textile administration and in financial, taxational and other government policies. Born on May 4, 1952, Mr Masao Nishimura is the Vice President and Director General at JCFA. He is an alumnus of University of Tokyo in faculty of Economics. Post his graduation in 1977, Mr Nishimura began his professional career joining Ministry of International Trade and Industry (MITI). Having completed 13 years at MITI, in 1990, he took charge as Director of International Coal Policy Office, Coal Department, Agency of Natural Resources and Energy. From 1991 to 1994, he was First Secretary in the Embassy of Japan in Korea. During 1994, he was Counselor there, and also Director General in General Coordination and Policy Planning Department of Tohoku Bureau of International Trade and Industry. After two years, Mr Nishimura was entrusted the responsibilities as Director of Fiber and Spinning Division, Consumer Goods Industries Bureau, MITI. In 1997, he became the Director of Textiles Division, Consumer Goods, Industries Bureau, MITI. In 1999, he was Director of Planning Division, Public Utilities Department, Agency of Natural Resources and Energy; in 2001, Director for Policy Planning, Science and Technology Policy, Cabinet Office; 2002, Director-General, Kyushu Bureau of Economy, Trade and Industry; 2003, Director-General, Business Support Department, Small and Medium Enterprise Agency; 2004, Director-General for Small and Medium Enterprise Policy, Small and Medium Enterprise Agency; and 2006, Executive MD, the Japan Economic Foundation (JEF). It was in 2007 Mr Nishimura assumed the post of VP & Director General of JCFA. Currently, he is also discharging his duties as VP and Secretary General at Japan Textile Federation (JTF). In this interview with Face2Face team, Mr Masao Nishimura delineates the present state of chemical fibre industry worldwide, and the services of JCFA encouraging the sector's overall growth.

How had JCFA been instrumental in the prosperity of textile and allied industry of Japan and world over? What are the activities and services that it provides?

Main activities of JCFA are as follows:

(1) In order to promote the development of the chemical fiber industry, we are using our efforts to reflect industry opinions in the textile administration and in financial, taxational and other government policies. For these purposes, we urge the government to revise or improve the relevant laws and regulations.

(2) We promote ties of cooperation with relative industries such as raw materials, textile manufacturing and apparel etc, to enhance the status of textile industries as a whole.

(3) We also provide needed information to governments and relevant international organizations who seek understanding of the position that Japanese industry actually holds in the international trade.

(4) We have also established contacts with countries viz China, Taiwan and other South East Asian countries for the purpose of promoting mutual understanding and trust, and to exchange information for the common interests. We also have had opportunities of meeting European and American industrial colleagues for the same purpose when necessary. In this connection, we have made a big contribution to establish the Asian Chemical Fiber Industries Federation in April 1996. The Federation was created to the effect that participating Asian chemical fiber manufacturers could share the common recognition about the future prospects of the chemical fiber industry in the world as well as in the Asian region within the framework of the market economy while establishing mutual understanding and trust among them.

 

JCFA has been functional in the textile industry since five decades. How does it read the present state of textile industry in Japan and world over?

Chemical fiber industry has pulled the high economic growth period during 1950 to 1960, as leading industry. But, during past 20 years, we experienced this period was followed by a decrease in exports and a sharp increase in imports because of the appreciation of the Yen after following the Plaza Accord of 1985, which caused our foreign trade to plunge into a huge net deficit and accelerated de-industrialization hollowing out the textile industry. Both the number of business’ establishments and the number of people employees involved in the Japanese textile industry have reduced to less than half of their early-80s level.

Even so, Japan’s textile industry’s presence in the economy remains quite large. It represents as much as 7% of the total manufacturing industry, with around 600 thousand employees. The industry occupies more than 10% of the business establishments in the total manufacturing industry, and the shipment goods to the value of 6,600 billion yen, accounting for 2% of the value of goods shipped by the total manufacturing industry. Also, we have formed textile manufacturing regions producing communities in many areas of our country, and they have substantial influence, particularly on local economies.

In Japan, sharp increase in textile imports has resulted in the import penetration ratio reaching nearly 90%. The chemical fiber industry has successfully exploited new markets for their chemical fiber products because it has energetically developed advanced technologies that would be adapted to the characteristics of markets. The mill consumption of fibers for apparel uses has shrunk rapidly but because tremendous efforts have been made to exploit markets for non-apparel items, non-apparel uses thus accounts for nearly three-fourth of the total mill consumption of chemical fibers.

The production of chemical fibres in Japan can be noticed to be reduced remarkably in a decade. Can you please enumerate the factors behind?

With the influx of imports, the Japanese textile production including chemical fiber has continued declining. In Japan, the sharp increase in textile imports has resulted into the import penetration ratio reaching nearly 90%, and the mill consumption of fibers for apparel uses has shrunk rapidly. In 2007, Chemical fiber production decreased by 1.3% from the previous year to 1.19 million tons, running behind the year-earlier level for seven years in a row. The scale of Japan’s chemical fiber production has decreased to lower than two-thirds of the recorded high annual figure registered in 1979 (1.86 million tons).

Under the difficult business environments in the past, the Japanese chemical fiber companies have promoted profit-oriented management on an individual company basis through 'selection and concentration', such as (a) globalization, (b) shifting their production to a small niche of a variety of luxury, differentiated and higher value-added products, (c) emphasis on growth fields such as non-apparel sectors, (d) withdrawal from unprofitable businesses, (e) spinning off part or all of fiber/textile business into a subsidiary company or a business division of a holding company, and so on.

As a result of these efforts, chemical fiber production has reduce remarkably but at the same time, many Japanese chemical fiber companies are now finally beginning to make profits.

Market, today, is pushing through severe headwinds in the form of hi-rising costs for petrochemical products, transportation and for energy whether its oil, gas or electricity. How will it affect industry in Japan and worldwide? What activities of JCFA shoulder the burden of your members in fight with such situations?

One of the largest concerns at present is a rise in the price of raw materials and fuels due to the high crude oil price. The crude oil price (WTI) increased by 94% from $54.4 in January 2007 till now around $120. The high crude oil price has caused a rise in prices of raw materials of synthetic fibers.

As for the trends of prices of apparels, on the other hand, the prices remain almost unchanged in Japan.

With high raw material prices and low product prices, the chemical fiber industry has found it difficult to pass the rise in the cost of raw materials and fuels on to product prices. In such environment, the profitability of the industry is worsening.

In order to cope with such serious situation, it is absolutely important to supply value-added products, less subject to market prices, that meet the needs of users in close cooperation with users.

Geographically, in which countries do you visualize the growth potential of this sector the most?

For Japanese textile industry, China has been the most important partner and largest exporter and importer. However, in recent years, we are viewing the moves to avoid over concentration on China, due to the reported Chinese risks as a production center or product sourcing center for Japanese textile industry. The risks include foreign exchange risks, revaluation of Chinese Yuan, labor shortage, rising wages, shortage of electric power, and other policy changes. In view of such moves, many Japanese textile companies feel the need to strengthen collaboration with countries outside China such as ASEAN countries, India and Bangladesh, with ‘China-plus-one’ strategy.

At this moment, some Japanese companies would like to make maximum use of Japanese EPAs with ASEAN countries. Among others, Vietnam is one of the most promising partners.

At the same time, as we are very much interested in the Indian textile industries, during our Business Year 2008, JCFA is focusing on the ‘Study on Indian Textile Industries’.

What is your say on the role of trade fairs and events in the select sector? Do JCFA organize any events or trade fairs? Which are they?

Actually, there are not many trade fairs relating JCFA, but new initiatives the textile industry has taken of late to create new markets include: cooperation in the 'TOKYO FIBER' exhibition -the first of which took place in April 2007.

Nowadays, a lot of stress is being given on ecologically safe products and production. How does JCFA encourage this move?

Regarding the environmental issues, we think- it is a permanent challenge for businesses to carry on productive activities. The challenges that JCFA is now facing are further reinforcement of measures against global warming, energy conservation, and chemical substance control.

The Japanese chemical fiber industry has achieved about 50% reduction in energy intensity (from 1.74 to 0.85) during the approximately 30-year period from 1973 (the first oil shock) to 2006.

In order to achieve CO2 reductions to combat global warming, JCFA came up with the goal of 'reducing energy intensity by 10% from the 1990 level by 2010' and this goal was practically attained by 2006. Moreover, JCFA member companies are deeply committed to global environmental problems and announce their activities in an 'environment report'.

Working to solve the various problems, JCFA formulated guidelines for an environmental action plan in 2003 and based on these guidelines such as ;

1) JCFA created an environmental management system in compliance with the ISO14000 and is carrying out activities to acquire ISO certification. At present, all Japanese chemical fiber plants have acquired the ISO14000 certification.

2) JCFA aimed to reduce energy intensity by 10% from the 1990 level by 2010.

3) JCFA is carrying measures against air pollutants and water contaminants, is working to achieve compliance with the PRTR Law (the Law Concerning Reporting of Releases to the Environment of Specific Chemical Substances and Promoting Improvements in Their Management), and is implementing measures against soil pollution and groundwater contamination.

4) JCFA is pushing ahead with reductions in the production and effective use of industrial wastes, and is seeking to reduce the quantity of industrial wastes disposed of in landfills by outsourcing contracts by 40% from the 1990 level by 2010. Also it aims to increase the amount of industrial waste recycled by 15% from the 1990 level in 2010.

5) JCFA is pushing ahead with 3R’s (Reduce, Reuse and Recycle) activities. Chemical fiber plants have long been working to reduce the volume of textile wastes produced by chemical fiber plants and recycle these wastes. In 2006, the plant-produced textile waste recycling rate reached 98%, an already sufficiently high level, but nonetheless this industry continues to promote activities in order to maintain the current level of textile waste recycling.

What could be said for Japan’s Chemical Fibre industry by 2010?

Report entitled ‘the Prospects of the Japanese Textile Industry and Challenges Confronting the Industry’ commonly known as ‘Textile Vision’ was provisionally compiled in May 2007.

Textile Vision describes the significance of existence of the Japanese textile industry and the direction in which the industry will grow in the years ahead, analyzes problems facing the textile industry and drawbacks it should overcome, defines the roles the industry and the government have to play in coming to grips with challenges ahead, and prescribes actions the Japanese textile industry should take, focusing on the three pillars, they are;

1) promotion of structural reforms; 2) reinforcement of technology; and 3) reinforcement of proactive dissemination of information and brand power.

For survival in the future, as in Textile Vision, the Japanese chemical fiber industry will try very hard to maintain our technological superiority. As a result, we are anticipating a bright future.

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Published on: 01/09/2008

DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.