JPRS ID: 10616 JAPAN REPORT

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• Collection: JPRS
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00850R000500070062-1
• Release Decision: RIF
• Original Classification: U
• Document Page Count: 51
• Document Creation Date: November 1, 2016
• Sequence Number: 62
• Content Type: REPORTS

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JPRS ~L/'10616
25 Ju~E 1982
= Ja an Re ort
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- ~ (FOUO 36/82)
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~ J~RS Z/~10616
~ ~
25 June 1982
-F j .
-i ~
. ~ JAPAN REPORT
' (~?4U0 ~6/82~
CONTENTS
POLITICAZ AND SOCIO?~OG ICAI~
Possibility of 1}iet I?issolution Assessed
(Takehiko Takahashi; MAIN2CHI DAIZY NEWS, 9 Jun 82)..... 1
Tanaka Faction's R~?.ationship With Kor~eito Examined
(Takehiko Takahashi; MAINICHI DAII,Y NEWS, 2 Jun 82) 3
MILITARY
Launching of Military Satellite Proposed by ZDP 5
(NIHON KEIZAI SHINBUN, 5 Jun 82)
;

=I ECONOMIC
' Farmers Seek ?~.37 Percent Boost in R3ce Prices
(MAINICHI DAILY NEWS, 4, 7 J~ 82) 7
Increase S~nallest in History
Rice Price Calculation Viewed, Editorial
Japan Capital Abroad Reaches Record in FY81
- (MAINICHI DAIZY NEWS, 6 Jun 82) 10
April Industrial Qutput Declined 0.9 Percent From March
(MAINICHI DAILY NEWS, 27 May 82) 11
SCIENCE AND TECHNOZOGY
~ Search for Revival in Various Industries Discussed
(NIHON KEIZAI UiilrwLT~1, various dates) 12
Eff'orts To Develop New F~ergy Sources Described 28
(Gene Gregory; SHU~tAN DAIAMONDO, 27 Mar, 3 Apr 82)......
~ ` a - [III - ASIA - 111 FOUO]
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- Recent Activities in Biotechnology Reported
(Various sources, various dates) .............o........ 39
Toyobo Research Foundation
Mitsubishi Chemi.cal, Mitsubishi Corporation
Institute
Ajinomoto Mass Production of I,-Cysteine
Mochida Pharmaceutical Interferon Trials
- Green Cross RBcD Investment
Wakunaga Chemical Strengthened Research Structu,~:.~
SYiow ~rand Milk Products I,aboratory, by Tokunaga
Bri ef s
ISI for Voice Recogiaition ~ 1~7
NTT~s IST Making Company 47
-b-
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' POLITICAL AND SOCIOLOGICAL
POSSIBILITY OF DIET DISSOLUTION ASSESSED
Tokyo MAIIQICHI DAILY NEWS in English 9 Jun 82 p 2
~From "Nagatacho Doings" column by Takehiko Takahashi: "Conditions for
Diet Dissolution"~
LTextl About two yea~ aiter a ~ ~ ~
general election, it is In the case of the Komeito, it
customary tor voices to . be is befng said that Chairman
heard asking when the next TakeUi's statement dces not
general election will take place. imply a desire tor a dlssolutton
I~'ollowing the unusually lengthy o[ the House of Represen-
extension ot the Dlet seasion tattves.
this time, a possible dissolution This is because the lessa~n of
of lhe House ot Repreaenta~lves the previous general election is
is being talked about. � betng kept in mind. W~en a non-
The Komeito is ~strongly contldence motion was
opposed to a revision of the presented by the Japan
House, ot Councillors' national , Socialist Party last time, many
-i � Ll?P Di~t members were ab-
constltuency election system. ~nt lrom the plenary session.
, T~at is wh~ it opposed the Tt~e JSF had ~ver expected
lengthy extension of the Diet ~e nonconfidence motion to
session, which was intended to pass. &ut because of ' the
carry out this revision. Its unexpected development, the
"anger" ls continuing and it nonconfidence motion was
_ refused to accede to Prime approved and the House of
= Minister Ze~~ko Suzukt s request Representatives was dissolved.
for a meeting with Chairman ps the result, although there
~'oshikatsu Takefri prior to the had been a near equ~librium be-
prime minlster's attendanee at tween the government pirty
tliesummitmeeting. and opposltion paities until
Chairmay~ Takeiri has ~hen~ the. LDP won a sizable
' declared that "a revislon of the maiortty in both House of the
liou~e ot Counclllors' natlonal Diet,
constltuency election system , .
- should be referred to the No Repetition ~
people's judgment." . , ,
"To refer to ti~e peopie's ~ The~ Komeito does not want a
jud~menl" meana, in the repetition af such a situatlon.
political worid, to hold a Ryosaku Sasaki, chatrman of
general election in order to th~ Democratic Socialist Party
obtain the people's ~rerdict on has made a statement that ia
an issue, one step ahead of the Komeito.
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Sasaki has declared that that the ~ iudgment ~will be. Tanaka tacllon arE continued. it
resignation en masse o[ the handed down tn March or April. will be possible fnr the Tanaka
Suzuki cabinet or dlssolutiorr ot When the prosecution's attitude . faction, thruugh strength of
the House ot Representatives is up to now is considered, the numbers, to overcome the
- prosecution'S, argument, conditions that may become
� p~Th s~statement by Sasakl was . demanding punishment, can be disadvantageous for it."
made at a national meeting of expected to be very severe..
DSP secretaries general held on "At about that time the LDP's Diet Dissolution
- June 1. The meet[ng was party prestdential election will In addition, voice~ placing
origfnally intended to prepare be taking place. Public opinlon anticipation in a dissolution of~
for next year's House ot is likely to be quite critical of the House of Representatives
Councillors election but before the movements of the Tanaka and the holding of a general
that could be taken up, facton~Moreover, lf a verdict of election are being heard from
Chairman Sasaki issued his guilty is handed down .~n among those connect~d with the
warning 4hat the possibility of a March or April, this will be a gecond Ad Hoc Council on
dissolution ot the House of big blow w both Tanaka and fhe pdministrative Retorm.
Representatives and a general . TBnaka fact(on, The reason for this is the
election has arisen. "The united local election and belief thal "it will not be
� It is said that the length,y 94- the House ot Councillors possible ior Prime Minister
day extension of the Dlet electton wlll follow. It dual Suzuki with his strength to
- session was nol based on Prime elections are held for the House carry out the recommendations
Minister Su~u~i's initiative but of Representatlves and the of the Second Ad Hoc Council.
rather on the iniliative ot for- ~Iouse ot Councillors at the It is des;i~able for a new prime
mer Prime Minister Kakuei same time, these will be elec� minister to handle the
Tanaka. The greatest interest tions under the wor$t conditions problem."
of the political world now is tor the Tanaka (actian. ~ W h e n v o i c e s f o r a
what was in the background of ~~Therefare. after the revision "dissolution of lhe House of
Tanaka's initiative? It is from of the House of Councillors' Representatives" and "the
here that the aeduction has nationat constltuency election holding of a general election"
come that the House of system is' passed forcibly ~ start to be heard, lhese voices
~ Representatlves might be during the current Diet session, generally mount rapidly.
dissolved. The reason is when the opposition by labor Poltticlans become tid~ety. It
gene~~ally as follows: unions to the administratihe cannot be denied that the
"What Tanaka fears is the reform becomes brisk, staEement by DSP Chairman
verdict in the Lockheed trlal. House of Representatives wiil Sasaki w111 play the role of
The prosecution's ar~ument, be dissolved, with 'reterring to abetting this movement.
demandin~ punishment, witl be the people's judgment' given as (The wriler Is an adviser ~o
made this autumn. It is believed the reason. lhe Malnichl, Newspapers ttnd
~'It then the ettorts of the formerchiefeditorial c;~riter).
COPYRIGHT: Mainichi Daily News 1982
CSO: 4120/295
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I'~I,ITICAL AND SOCIOLAGICAL J~~
~
TANARA FACTION'S RELATIONSHIP WITH ROMEITO EXAMINED
Takyo MAINICHI DAILY NEWS in English 2 Jun 82 p 2
[Article by Takehiko Takahashi]
[Text] The Komeito is Grmly op- considered by Prime Mini~�er an oppartuaity for tb~ Koroeito
posed to a change of the election Zenko Suzuki at first. This can bo sever relations with the
system for the House of be imagined from the fact that Tanaka faction ~vo~ld come if
- Councillors' national con- Suzukl's return to his electoral Tanaka is adjudged guilty i~ the
stituency. Its attitude at present district (Iwate Prefecture) vras Lockheed tr:al. The Komeito
� is one of thorough resistance. already scheduled. executives felt that in such a
- The Komeito did not attend if the lengthy extensiun of the case, Chalrmaa Takeiri ~ would
the opposition parties' Dtet Diet sessioa was carried out find it necessary to liquidate the
policy committee meeting held ~der the leadership of former :~lationship with Tanaka.
on May 25. Nor did it accept the p~me Minister Tanaka, an That opportunlty has arisen.
Liberal-Democratlc Party's atmosphere is br.ewing that the however, in an unex~,^~ted
propusal made a~terward fo~ a Komeito will flnd it necessary quarter, namely, the very
Diet policy committee meeting. to sever fhe relatlonship length,y extension of the Dlet
Not only that but the Komeito maintained with Tanaka up to sessioa. The Komeito would like
' executives all went out to now. . to kill the revision ot the House
participate in street lectures p~~ o n g. t h e n o in e i t a of Councillors national con-
expressing opposition to a executives.were thQSe who felt stituency electiou system by all
~ revision of the House nf ~at this relationship would means. It has acted along such
~ Councillors electioa system. Its have to be seveted sooner or a course. The Japan Socialist
= opposition is escalating. later. They hesitated about Party is in favor of a pmpor-
Chalrman Yoshikatsu Takeiri ~y~g ~ p~itively, however, tional represer.~atIon system.
~ and other executives of the ~cause doing so would hav~ Although belon~;:~g t~ the
Komeito are said to have a placed Chalrman Takeiri tir a middle-of-the-r~ad influence
special relationship with for- painfui position. ' also, the Democratic Socla!'lst
mer Prime Minister Kakuei Party and New Liberal C;ub
Tanaka. Even when such a Di38atisfBCtioa differ irom the Kometts, !n
report appears in a newspaper, regard to this problem.
the Homeito does not file a In the terminal organlzations Although the DSP once ex-
protest. Accordingly, the of the Soka Gakkai, the parent. pressed its oppositfon, its in-
_ existence of a close relationship organization of the Komeito, fluential backer, Domei, is i~
between former Prime Minister t h e r e i s c o n s i d e r a b 1 e favor of a revision. Th~s is the
Tanaka and the Komeito is dissatisfaction about 6aving it ~e as in the case of Sohyo
- accep::ct as a fact in the said that the Komeito is close to and the JSP.
political world. the Tanaka faction. The The Komeito Ls the only party
Tanaka is sald to have been Komeito executives are aware that is absolutely opposed to the
the driving force behind the of this. They have felt that some revisiun. In view ot the past
very lengthy extension of the kind of countermove is relationship, the Komeito nevei
Diet session this time. Such a necessary. thought that former Prime
le~gthy extension was not being Up to now it was believed that Minister Tanaka would adopt a
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policy of pressuring the ting a revisio~ of the House of
Komeito to such an eatent as Councillors national coo- ~
this. This prediction has now stituen~;y ~lection system.
been: overturned. There is Up to now, even If Sato were
str~ng consciousness that "we adjudged guilty, the Komeit0
hace been betrayed by the did not intend, because of th~
Tanaka faction." The Komeito past relatlons ~vlth Tanaka, to
has withdrawn into a shell, press for Sato's resignEtion in
refusiag to pat~icipate in a conslderation of Tanaka's case
- meeting of party leaders or a to follow.
meeting oE committee chair- Now, with the strong
mea ~ organization called Soka
Ii Diet member Takayuko Gakkai behlnd It, the k,omeito is
Sato is found guilty on June 8 in ~e1y ~ p~~ge into warfare
_ the Lockheed t;-ial, the Komeito the LDP. If at such a time
will undoubtedly seek Sato's the KomEito severs its relations
resignation as a Dlet member. Wi~ ~e Tanaka taction, the
Further, it will demaad the effect that thls will have on the
settiag up of a special com- political world trnm now oa is
mittee in regard to political bound to be great.
morals. Depending on the at- ~The writer is an adviser to
titude that the LDP takes ~e Mainlchl Newspapers and
- t o w a r d t h i s, t h e D i e t formerchiefeditorlal writer).
di,scussions will grind to a halt.
The Komeito is desirous og
~makinQ this useful in areven- ~
~ COPYRIGHT: Maiaichi Daily Newa 1982
' CSO: 4120/286 .
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" MILITARY
IAUNCHING OF MCLITARY SATELLITE PROPOSED BY LDP ~
Tokyo NIHON KEIZAI SHINBUN in Japanese 5 Jun 1982 p 2
[Text] LDP's Space Development Special CoAanittee (Chairu?an Taro Nakayama)
- drew up a pro~osal which seeks ~o revise the Basic Space Development Policy,
and submitted their proposal yesterday to the Chief Cabinet Secretary
- Miyazawa. The LDP proposal states that "the use of military satellites
would reduce defense costs" and requests that satelYites be uaed not only
for non-military purposes but also for defense purposea.
The Basic Space Developm~nt Policy was formed in 1978 by the Space Develop-
ment Couaaittee (Chairman, Director General of the Science and Technology
- A gency) with the ob~ective to launch a 550kg-coumunications satellite with
the H-1 rocket in 1992. However, the uses of satellites have multiplisd
since then and the United States has already launched coum~unicationa satel-
; lites in the 1,OOOkg-class. Compared to theae developments, the technological
~ lag suffered by Japan is getting u~ore conspicuous. Ttius, the special commit-
tee has asked for a review of the Basic Policy and for a new effort to draw
up a full-fledged space development plan.
The LDP proposal states that:
1. The Science and Technology Council should hammer out a clear space policy,
keep in close contact with the Space Development Co~ittee, and establiah a
horizontal cooperation system among government ministries and agencies;
2o The space development budget should be tripled (currently 100 billion yen
for FY-82) to boost domestic technology;
3. Legislation for space development should.be quickly established;
4. Japan should participate in joint research with the United Statea on the
manned space statian and space shuttle projects.
Tt~e focal point of the proposal is the ob~ecCive to launch a military sa~el-
lite.
~ _ The proposal states that the use of satellites in defense conaminications,
marine surveillance and reconnaissance "will reduce defense coeta because
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"Japan's geographical location." However, the uses of satellites are defined
as "limited to peaceful purposea only" by the plenary seasion of the Diet in
_ May 1959 and the National Spa.ce Development Agency Act. Therefore, objection
to the~proposal is expected from opp~sition parties.
COPYRIGHT: Nihon Reizai Shimbunaha 1982 '
CSO: 4105/130-P
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~CONOMIC
FARMERS SEEK 4.37 PERCENT BOOST IN RICE PRICES
Increase Smallest in History
Tokyo MAINICHI DAILY NEWS in English 4 Jun 82 p 1
[Text]
7'he Central Union of In ftie new computation, �
Agrieultural Cooperatives, ~y ~ent increasea in wages
f~r the largest organizatiaa of other induetYl~~ seCtoc~ and
Japanese farmers, Thursday other faC~Ore were taken ~
limited its demand for rice ~nsiderahoa . �
prices this year to a dibdest The smallest increase
growth of 4.3? percent. reflects mbunting ioreigh
The rate of increase whictl;the criticism 8f the' protectioq
Japanese will have to purc~Ase Provided to Japanese tarme~'s
rice from farmers is th~ ~d also the ri~g complalpte
smallest in tiistory siace ti~ from consumers~over bigbrfce
c~ntral union began making prices,opserve~ssaki..
; demauds to the government ln In acc~epting the., ~and
r fi'0I11 U~OD ~C$d@T5~ ~~11~C1'.Of
1~A union spokesman said that Agriculture, Forest~y ~ and
in deciding the new demand~ the ~F~Sheries Kic~iro ~T~zawB~�said
organization f~ad changed the be appre~iated ~lte Gnion'e ef-
old method of computing new forts to triin c~owp.its d~maqd
_ rice prices. If the old method adding,. I~owev,er; that it ~!ould
was maintained, the~ ,w?ioa enen b~'' ~difficult for.' � t6e
wnuld have delmanded:' a, 28.~ Sovernment to'meet ttie mOd~9f
percent increase in price wfiich demaqd. ~ '
at present is 17,487 yen, per.60 The min9stry has aiready
kilograms, he explaiued. decided to fr~ese the rlce:'pN~l~
for farmers. . .
- COPYRIGHT: Mainichi Daily News 1982
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Rice Price Calculation Viewed
Tokyo MAINICHI DAIL~ NEWS in English 7 Jun 82 p 2
[Editorial: " Rice Price Calculation"]
[ Text ]
' `fhe National Central Council of Agricultural~
Cooperatives has decided on a rice prir,e~'demand~ '
based on a new calculation meti~od..Ac~o~;~d,~ng,to th~
existing calculation system, the price wa;t~i'have td
be raised by about 30 percent, but the cot~nci~'said the�
raise this time would be 4.37 perCent yt~der t~~.~,ew
calculation. ~ "~`'~Y
The Ministry of Agricviture, ~Forestry ~ and
Fishery highly evaluated the att~tude ~of th'e~ coG"dCil,
saying that tiie new rice price calcul~tiorr'mef~rbd~is a
,
step forward toward a better undexstianc~pg,,q . tlie
environment surrounding agricul~ture. -'~'~;~ust~: `b~
remembered, however, that the gov.ernm~t.ls.fac~ng
a severe fiscal condition and that the~co~u~iers':rice
- price is likely to be raised again next,year under th~
prevailing fiscal situation. In thiS r~g~r~;~ we must
say that understanding of the prevailiq~`a3t~t:~tlpd~ is
_ slill superficial. The time is now r~~~~~r th~e.,,n4o~t
- realistic calculation sysEem to be wor,k~~aut. ~
The council's new calculatibn method should be
= called a kind of ;ndex system, taking'fnBo aeCOUnt the
rise of materials to be used for rkepl~nting~at~~~l~bor
cost. This is certainly a step forw`acd ~�glpared',witb
the demand of the All Japan ~Fatmers.t~nio,t~calling
' for a 16.7 percent raise. .
The rice price having so much to ~o ~?ith~people'.s
_ living must be something easy Po~'as atl'to un-
derstand. But, the calculation fnvalved in th~ rice
price has been very compIicated up to now.
Mor~over, i~ contained' political; ~cq~�isid~er.8tions.
Hence, we demand that the r~ce pr~ce~ ca~~lat~oa
- should be simple and rational. ~
lt is also necessary to take ~into accouqt the
change in agriculture in working out . a new
calculation method. Rice used to be the major pillar
ot agricultursl production and subsidizir~g~ tHe~ tarm-
er's income by rice price has had a ju'sttfi~ble
ground. But, things have changed quite' a lot iq the ~
meantime. The recent rise in livestock product~oti has
lowered the position of rice. Rice'producti0n by part-
time farmers has been on the inrrease:
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It Is quite anachronistic to a~ecord favorable
treatment to the rice price alone. The government
should work out a balanced price pa~~Fy, ~1;connQction
with rice, while the rice price should ,xeflect~ the
supply and demand ~ituation of rice its~,~f: ~~h~ rice
- price calculation method must be ch~anged,dr'~tstically
so that the nation's a~ricuTtuxal . indyati~r' ~ C~:n ;;be
reconstructed. ~ ~ ~ ~
~ COPYRIGHT: Mainichi Daily News 1982 ~
CSO: 4120/289
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f?CUNUMIC
JAPAId CAPITAL ABROAD REACHES RECORD IN r7o~
Tokyo MAIIJICHI DAILY NEWS in English 6 Jun 82 p 3
[Text]
.)apan's direct overseas in- Ind~eiie.sia . ded the list of
vestments in fiscal 1981, which regions attcacting Ja~pan's
ended March 31, hit a record d~~ec~~y~ents 1a fisCa1:1981
high oF ~8,906 million, far sur- and ~the tfiltBd States ranked
passing the previous record of ~ j~
;4,995 million set in fisca11979, Investment$ ~ io ~ IndoneeIa. ~
the ~`inance Ministry an- totalecl$2,484~i~tlllion+ ~�4.friold
nounced Friday. jump ~ CrOAi ~e~caD ~1980. The
The ministry said the figure increase i~eflected stepped~up
represented a jump of 89.9 investmente in a 1ep~p~ ,
percent from fisca11980. Indonesia~ ~'oiot. � proiec~~ to
Ti~e sharp increase, the devebp netm'al ~asdepOstts.
ministry said, partly reElected Investmeats �3tt the Uriited
stepped-up investments ~for States ~ ~g~tega't~d ~~~329
development of overseas ~ ~e ~
aaturalresources. ~ prevlousyear~ ,
But the main reason aas that Investmbnls .in , European
_ Japanese companies provided a natio~s as a group amowt~d fo
large amount of low-interest ?n~lllon~, up .38~ p~rCent.
loans to Weir overseas sub- I�~~~~~ ~ g~~~ ~d
Franc~ . ~eased . at ~,L9~ . ~
- sidiaries in the year in vtew of ~
high interest rates abroad, it ~e Ne~pei~tauds, ~ Igtum and
noted. ' Luxet~boll~g`~r~d..
Investtnents.. #he ddle
It said the amount of ,such aad ~Neaz East~
',~eCre~l'~ 39
funds alone is estimatea at �
nearry~.3billion. Percent to i9~ :mil~ot!,' ap-~
parently due to the wiet~ile
situatfoni~t,l~!,regto~�'.,
COPYRIGHT: Mainichi Daily News 1982
CSC: 4120/288 ~
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i
~
i ECONUMIC
~
_f
~
~PRIL 3NDCiSTRIAL OUTPUT DECLINED 0.9 PERCENT FROM MARCH
^r.}:yo MAINICHI DAILY NEWS in English 27 May 82 p 5
[Te;ct] SlUggiSh exports torced in- cluding transpost machinery,
dustrial production to decline metal products and electronlcs,
0.9 percent in April from the sustained month-to-month
preceding month, the Ministry losses in both production and
of International Trade and shipments in April.
~ndustry said in a prelimlvary Precision instrwnents, pulp
report Wednesday. and. chemicals were the sole,
- The April output at the industrles to post (ncreases in
nation's mines and factortes, output and shipments, the of-
however, was up 2.8 percent ficIal added.
. from the same month of last Ipv~torq in the traasport
year to stand at 148.8 agaiast �equipmeht ~ and noaferrous
the 1975 base figure of 100, MITI metal industr[es recorded drops
said. of 2.2 percent and 3.7 perceat
; Shipments in Aprll also feU last month while geaeral
1.9 percent from March but ~achinery, steel and textiles
~ remained unchanged compared showed inclreases of 1.8 percent,
to a year ago level wttb the 1.5 percent and 2.5 percent over ~
index standing at 98.1. March. �
On the other hand, ~iqventory �As a whole, Japanese in-
_ registered increases of 0.9 dustry is depressed and will
percent from March and 1.5 remain so" the MITI official
percent from a ye~r ago to said.
11i.3.
MITI said the Apt~ll gain was The minlstry predlc.ted a 1.6
the sixth straight monthly in- Perceut upturn in industrial
� crease since November when P~~tion in the manufac-
the index stood at 100. turing sector in Jwte atter an
"Exports are certaIaly ~he ~~ated 1.8 percent drop in ,
1Vo. 1 factor," a MITI official May.
said in explaining the April But the MITI ofiiciai said the
drops in output and shipments. increase will be "negligible" if
He said that of 14 industries the current depressed state of
covered in a governmental .lapanese industrtal pr~duct~on
i survey, seven industries, in- is taken into account. �
i
~c~l~YRtGfi'I': Mainichi Daily News 1982
t':O : 4120/287
i
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SCIENCE AND TECHNOLOGY .
= SEARCH FOR REVIVAL IN VARIOUS INDUSTRIES DISCUSSED
Tokyo NIHON KEIZAI SHIMBUN in Japanege 1-3, 6-8 Apr 82
[1 Apr 82 p 7]
[Text] Automobile Industry
To Eat or To Be Eaten; Survival Depends on Domestic Sa1es
"A period of read~ustment has arrived in the automobile industry, in which
automakers are obliged to consider long-range strategies with a premise of
reduced production" (Kiyoshi Kawashima, preside.;~.t of Honda Technological
Research Industry).
"Japan's automobile industry hae not experienced competition in the true
sense. Strict capital theory is expected to pl~y a more important role in
the survival of the industry in the future" (Takashi Ishihara, president
_ of Nissan Motor Co).
The automobile industry is harassed by trouble from within and from without.
From outside, Japan's automobile industry ia labeled the "culprit" of the
trade friction, and under the name of self-regulation, automobile exports
are being placed under the control of the other party. From within, Japan's
automobile industry is suffering from slow demand as a result of the mature
consumer market and the sluggish growth in net industrial income. A high
growth rate cannot be expected.in either exports or ddmestic demand, so a
drastic strategy for survival is about to be unfolded under reduced growth
- rate.
Exports Are About To Crash
The 1981 automobile exports (partial prospect) fell short of the results of
- the previous year for the first time in 3 years, aince 1978, with a reduction
of 6.3 percent to 3,809,700. This was laregely due to the self-regulated
export policy with regarii to the United States implemented since April 1981,
with a reduction of 6.7 percent in tttat of the previous year, to 1,680,000.
Exports to Europe are not bright either. The yen remained high with respect
to the European currencies, and the export competitive edge was dulled
sharply. The sales were so slow that the frame of the European import
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i
restrictions could not be broken. Exporte to the developing nations, which
used to make up for the reduction ix~ expurts to European nations, have also
lost momentum since last fall. ThP actual sales results in 1981 (January to
December) showed growth only ~n two regions: Africa (46.6 percent~increase
_ over those of the previous year) and 'uceania (23.0 percent increase over
- those of the previous year).
The loss in export momentum became more marked this year. The passenger car
- exports in January and February suffered a loss of 16.4 percent from those
in the same period o= the previous year, to 618,400. Nothing exciting can
- be reported up tc~ April either. This is so partly becauae the 1982 exports
to the United S~ates have been restricted to 1,600~000, the same number as
- the previous year. Although automakera are accepting orders in the hope that
~ the regulation frame may be read~usted during the latter half of the year,
- when the U.S. market may pick up activity, it is not likely that this will
be realized. As long as the world ffarket remains stagnant, the import regu-
lation of the United States and the European nations will not be relaxed,
while exports to the developing nations cannot be expected to grow rapidly
either.
According to an unofficial forecast made by the Japanese autouabile indus-
try, its 1982 exports are expected to remain on the same level as the previous
year. However, this figure is based on the premise that the U.S. ecanomy
will in~prove, so there is still danger of there being a drop in the previous
year's ratio 2 years in a row.
However, export profits are in good shape. As a result of an increase in the
, exchange differential profit due to the relatively cheap yen and a shift to
' exporting cars with larger added values, the amount of money taken in
i increased even though the number~of cars exported decreased. The high profit's
_ of the automakers are in practice supported by the cheap yen.
"Domestic Market" Not Optimistic Either
Qn the other hand, bitter battles are being fought on the domestic salea
front. The forecast made by the Automotive Industry Association for
domestic demand in passenger cars is an increase of 3.1 percent over that of
the previous year, to 2,962,000. However, the total sum for all automakers
came to more than 9.6 percent. Beginning with a 10-percent increase intro-
duced by the Toyota Motor Co and its sales department, all other automakers
are equally aggressive in their plans. The idea is to make up for export
losses by domestic sales, but the situation is severe.
The growth in disposable income since January 1981 is either on the decline
or holding at the same level, and personal consumption is still in a long
dark tunnel. "Personal consumption will improve by the fall, and 3.1 per-
- Gent ~rowth in passenger cars can be assured" (Toshio Nakamura, executive
director of the Automotive Industxy Association). Although there are a
number of optimistic observations, postponement of the purchase of automobile
in the latter half period as the official automobile inspection period is
extended may become widespread, so the situation cannot be too optimistic.
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Capital Power Still Counts
Automakers are putting all their energies into domestic sales in this
unfavcrable environment. "Cars with larger added values for exports and
lpss expensive cars for domestic sales wi~l be the 1982 sales strategy1� ~
(Kaichi Kaneo, vice president of Nissan Motor Co).
"To be sure, there will be a price war, but we are prepared" (Hideo Tojo,
president of Mitsubishi Automotive Induatry). They are all showing a
figh: not only to secure their own share but also to cut into the shares
of the other parties.
Beginning with its Sunday opening policy, Toyota is strengthening its tacti-
cal measures, including visiting the dealerships by the company staff and
cultivating new sales channels. Under the circumstances in which the pie
will not become larger, the only way to increase the number of cars sold is
to caFture the rivals' markets. Capital power is the thing tha.t can back up
this effort. If by taking advantage of its superior capital power Toyota
launches itself into the domestic market, then confusion will be unavoidabl.e.
The automobile industry is about to enter itito an era in which superiority
- will settle the matter.
~t) ~*~~1~9wI1~F�Mt~o~#~
, � ~ c~=~a~~
"~~1.
6a
r,
~~g ~ ~
~ ~
1
r ~2 I , I I
( 51~~ S2 53 54 55 56 57
(~)58~~12-~1r~. 57~FI~1l.i~L13
1 ~AY�Ii.lA~l3~a`~E'ttT
Key:
1. Changes in domestic demand and export of passenger cars (based on an
investigation made by the Automotive Industry Association)
2. Domestic
3. Export
4. Million cars
5. Year: 1976, 1977, 1978, 1979, 1980, 1981, 1982
6. (Note) 1981 figures are based on a partial estimate. The 1982 fore-
cast refers to the domestic market only. Exports are not given.
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,
[2Ar 82p 6l
P
i
, [Text] Food Industry
;
~ Heavy Pressure Exerted by Reduction in Income; Betting on Timely Products
'~~fie outstanding hit merchandise in recent years includes only the high-
- quality instant noodles" (Tadao Suzuki, vice president of Ajinomoto Co).
The food industry, which was expected to escape the recession, deepened its
worried look when no movement in demand was perceived after the new year.
Ham sausage is a typical example. Sales of ham sausage, which kept up a
double-digit growth rate riding on the tide of Westernized dining habit, has
lost demand. The 1981 total production was 411,000 tons, with only the
slight increase of.2 percent over the previous year's ratio. The 1980 .
growth rate was also only about 1 percent, so an almost no-growth situation
has continued for 2 years already. "The goods does not sell even when it is
put on sale in the supermarket at reduced prices" (Jo~i Nawada, executive
_ director of Yuki~irushi Food Co). Every maker is at a loss.
Reduction in Quality and Bad Cycle
Reduction in demand for popular pressed ham is particularly significant. Its
sales showed a significant drop las t year, with a 17-percent reduction from
the previous year. As a result, the price also plunged. The price was
successfully raised to an average of 7 percent last May with great diffi-
culty, but today it has plunged to the leveZ before the price riae.
~ In order to maintain profits, some are even making the painful cnoice of
~ lowering the quality lately. As a result, inferior ham is put on the
~ market, which further spurs customers to stay away from ham products, and
the price of ham is forced to drop again. A vicious cycle has been set
:[nto motion. "The pass rate of JAS (Japanese Agricultural and Forestry
Regulation) inspection, which used to be nearly 100 percent, is now down to
90 percent." The worsening quality is a matter of cc;:?~ern.
The reason for slow demand is due mainly to sluggish growth in net personal
income. According to an investigation carried out by a private organiza-.
tion, meat consumption, more than any other food item, ia most sensitive to
personal income. Since there is no prospect for a significant increase in
- net personal income, the pessimistic viewpoint that "we wi11 not be able to
- get out of this tunnel for some time to come" is permeating the industry.
Worse, the hoof and mouth disease among Denma.rk's hogs is creating an even
worse environment in which to operate. Imports of pork from Denmark have
been banned since 1 March. Danish pork occupies approximately 30 percent of
aIl pork imported by Japan. This imported pork constitutes the raw material
for bacon and roast ham. The hoof and mouth disease has spread widely, and
the industry estimates ~hat "the import ban may not be lifted for the next ,
5 years." If so, the price of pork is bound to rise. Taking into consid-
eration the cheap yen of late, the cost is expected to rise approximately
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. 10 percent. Previously, it rained ~oftly; siace April, it has poured"
(Toyoharu Adachi, president of Prima Ham Co). The outlook is getting even
cloudier.
Changes in Consumption Structure, Too ~
- The impact of du11 demand on the meat industry is felt even by the indus-
tries related to anim~l husbandry. For example, the mixed feed industry
registered negative growth for 2 years, 1980 and 1981, and there is no sign
of recovery this year. The impact is further felt by the oil industry, which
supplies soybean residues to the feed industry and their profita are worsen-
ing rapidly.~ "A structural depression may be setting in" (Mitsuo Fukawa,
I3issei Oil Co) .
- The sense of depression is fel~t not only by the industry related to animal
~usbandry. Instant noodles, which peaked in 1979 with 3.8 billion servings
(the number inspected by JAS), experienced negative growth in 1980 and 1981,
2 years in a row. Bread ia also experiencing a low growth rate of 1-2 per-
. cent since 1978. In the case of the instant noodle industry, January pro-
duction suffered a reduction, due to a warm winter, of 18.5 percent from that
of January the previous year. The industry is enveloped in an eerie atmos-
phere: "Some significant changes may be ta~ing place in our consumption
structure" (Nobuo Ida, vice president of Sanyc~ Food Co). In the field of
instant noodles, the sales of high-quality instant noodles with a compli-
cated procedure are going well,~and health drinks, yogurt, and aoybean milk
are also aelling well. The salea of these products are expected to show a
strong increase of 20-30 percent over that of the previous year. In the
field of ineat products, which are in bad shape in general, high-grade roast
ham ssles are showing a healthq growth of 10 percent over those of the
previous year, and the prospect is said to be bright for this year also.
Short-Lived Hit Products
It would be fine if consumption of food as a whole could be stimulated by
these popular items of inerchandise, but the reality is quite bitter. To the
extent that the hit products are gaining in popularity, some other existing
products are losing p~pularity and ground. The population has reached 110
million and is not growing appre~iably any more. The per capita caloric
intake has also peaked at 2,100 kilocalories a day. So if the net personal
income does not increase, then it is no mystery that demand for foodstuffs
cannot increase any ap re.
What is more troublesome is the fact that consumers have been capricious
lately, so the life cycle of a product ie getting shorter and shorter. A
hit product t~?is year does not necesa~rily sell well the following year. .
"We have entered an era in which the food producer is in need of a tech-
nology with which to somehow predict the likes and dislikes of the conswner
and produce timely new products, and management and p*aduction forces that
will carry out thia feat" (Mr Suzuki).
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In any case, the "food induetry has entered into a zero sum society; from now
on, it is either eat, or be eaten" ;Takayuki Nagamochi, president of
~ Shinriken Vitamin). Recently, a chorus demanding "income tax reduction" has
~ been heard from the industry. They have come to a point where, even with
' thic measure, they may have difficulty in getting out of the trouble.
~ -
~ . ~~~1'~I~;~$ICIw#T$
~ \2 ~t#~k)g~t~~
~o ~
_ �
r ~ �4 � ~-r-s~a~
. .
~ 25 ~ 51 52 53 ' S4 55 - 56
i .
Key:
1. Meat consumption levels off
2. (Note) Ministry of Agriculture, Forestry, and Fishery data
' 3. 10,000 tons
4. Ham sausage pYoduction
5. Year: 1977, 1978, 1979, 1980, 1981
~ (3 Apr 82 p 6]
; [Text] Paper and Pulp Industry
Complaint of Foreign Offensive; Implementation of Structural Renovation
i Demands Level Off
~
On the lst of this month, MITI revealed to the paper and pulp indus~ry its
1982 prospect for domestic demand (guideline) for three kinds of paper,
including court paper, which have made up a depression cartel so far.
According to this forecast, the growth rate over the previous year is
2 percent for the top grade paper, 4 percent for court paper, and minus 4
percent for craft paper. Of these, the top grade paper and court paper,
among numerous paper and pulp products, are considered to have surplus power
~ for growth. If these two kinds of paper can expect only so much increase in
demand, then either "the industry as a whole can expect ati best an increase
of 2-3 percent, or the industry should resign itself to zero growth" (Paper
Industry Division of MITI). .
The painful struggle the paper and pulp industry is experiencing today is due
in part to the expansion competition it carried on even after the first oil
shock. As a result, it is said to be 5 years behind, compared wiCh other
industries, in awitching over to a reduced production system Coday. Each
company is aggressively solidifying its own system "to build an enterprise
which can go into the black with 60 percent operation" (O~i Paper Co); "to
be in the black with 75 percent operation" (Sanyo Rokusaku Pulp Co); "to pay
back 200 billion yen in loans in 2 years" (Daishowa Paper). But the fact is
that the paet bills are not so easy to pay back.
~
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However, as a result of drastic measures implemented last year, includ~~g
for.mation of a depression cartel and easing up on construction of new facil-
ities, the prospect ie bright now that they may be able one way c~r another
to ride out this adversity, which has been termed "the wc;rat since the war."
'~The industry will coordinate�more closely on matters related to production
- and sales. No one will act recklessly any more as theq did in the past"
(Fumio Tanaka, president of Oji Paperc Co). It is the common understanding
" of the industry that the businesa performance has hit the bottom and, though
very slowly, it is beginning to make an upturn.
However, just as the constitutional transformation toward low growth began
. gradually to take shape, a new problem cropped up suddenly. Large quantities
- of imports poured in from the United States, Canada, Kor~a and Taiwan. In
_ spite of the cheap yen, imported goods continue to flood the market this
year.
For example, customs statistics of February specifically tell the frightful
story: newspaper stock, 24,900 tons (34.9 times that of the same mpnth last
year); craft paper, 1,700 tons (1.6 times); ~ute liner for corrugated card-
board, 4,600 tons (1.8 times); and craft liner, 15,500 tons (1.7 times). The
import valume of newspaper stock and craft liner reached 13-16 percent of the
domestic production in February.
The United States Demands Open Market
In addition, the U.S. Government demands that the dome~tic protection
measures, such as administrative directive and depression cartel, be discon-
tinued and paper and pulp products be included in the 14 open market items.
MITI would like to avoid responding to the U.S. demand, using the fact that
imports are increasing steadily as an excuse, but it is not yet clear how
this problem will eventually be settled.
Moreover, recently, U.S. and Canadian enterprises, which are in a decisively
superior position on matters related to energy and the ~ost of the raw mate-
rial chips, are more actively making inroads into the Japanese mar.ket. The
largest exporter of chips to Japan, Weyerhaeuser Company of the United
States, revealed that it is going to establish sales headquarters of corru-
gated cardboard (craft liner) in Tokyo and Osaka in July. The corrugated
cardboard industry speculates that "many firms w311 probably jump at the
imported goods if the price is 10 percent cheaper than the domestic
product."
The largest Canadian paper and pulp producer, McMillan Brodel Co, also made
public its intention to export its main product, newspaper stock, to Japan.
"Supply bases will be set up in various major cities, so that the newspaper
companies will not be bothered by a port strike."
After two oil shocks and the subsequent inflation of the imported chip price,
the paper and pulp industry expected and worried about a sudden increase in
imported goods. Their worries materialized at a faster pace than they
anticipated.
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Repeating the Same Mistakes Made by the Aluminum Industry
Imports from Korea and Taiwan are maintained in part by Japan's stable market
condition. The present import pace will be maintained unless the market
' conditions experience a significant decline. The export offensive taken by
the U.S. and Canadian industries are due in part to the pressure building up
in each country as a result of the tremendous rash of facility expansions
that are taking place in each country. No doubt, thia export offensive is
expected to last a long time.
The structural reform measure (surplus facility disposition measure) prepared
by the paper and pulp industry as its trump card for the survival of the
industry is to be automatically carried over one more year, because MITI's
specific depressed industries temporary treatment measure, in which the
paper and pulp industry is included, is to be extended one more year. This
was probably a stroke of good luck for the industry.
Th~ structural renovation measure the industry has been atudying internally
since last year has a strong coloration of being a measure which attempts to
balance the demand and supply of the domeatic market only. Now that a steady
flow of imported goods has become a fact, this fact must also be taken into
consideration. In the meantime, "strengthening the international competitive
edge" will probably be the biggest theme, and the question of reorganizing
the industry may also be raised.
Unless it is handled very carefully, this industry may repeat the same mis-
_ takes made by the aluminum industry and the petrochemical industry whose
livelihood was all but shut off by the foreign offensive. As such, this
structural renovation measure has profound significance for Japan's paper
~ and pulp industry.
_ 1 ~ � ~ )
~
3 BO:F '
_ 65 ~ ME L}~
\ ~60 .
1lE
fi 55 .f
~~~~1 3 5� 7: 9� 11 y ~
Key:
1. Changes in paper and cardboard production �
- 2. Paper, 10,000 tons
3. Paper
4. Cardboard
S. Cardboard, 10,000 tons
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[6 Apr 82 p 8]
[Text] Fiber Industry
5ynthetic Fiber Export Prospects Dark; Novelty Wins Fabric Market
Big Offensive From Korea and Taiwan
The synthetic fiber industry, which is having a hard time due to slow domes-
tic demand, has encountered another sosrce of headache. "At any rate, it is
like having a Naruto whirlpool in your backyard" (Osamu Uno, president of
Japanese Chemical Fiber Association and preaident of Toyo Textile). "While
Japan is holding back on investment in facillties, Korea and Taiwan are
expanding rapidly. Nothing is the matter, but it is like scooping water with
a bamboo basket" (Tsugihide Fujiyoshi, president of Toray). The leaders of
the big synthetic fiber companies are disgusted with the Korean and Taiwan
facility expansion offensive. The ~mportation of cotton yarn from Korea and
Pakistan has increased so significantly that trade friction ~ust opposite to
that of automobile exports is already taking place. The industry is appre-
hensive that what happened to cotton yarn "could also happen to synthetic
fibers..." (President Uno).
- Nb reover, with this happening at a time when Japanese exports have hit a
slump, the countenance of the industry can only darken further. The year
before last and also last year, Japan's fiber exports (chemical fibers
occupying approximately 70 percent) were very strong, breaking the previous
record. The synthetic fiber industry, which was shrinking and balancing due
to the residual symptom of a long depression bxought about by the oil shock,
somehow managed to make up for tne inactive domestic demand by active exports.
S~?ace September last year, h.owever, the export situation has worsened rapidly
and the monthly amount of signed sales contracts suffered a 10-15 percent
decrease over that of the previous year for the same month. This state of
affairs continued until the first quarter of this year, when China, Japan's
major export target, discontinued its contract. The declining trend thus
became~even more acute.
"If the opportunity arises, a recovery may be made that is as rapid as the
- fall was hard; this is the hope held by the synthetic fiber.industry, but it
is also feared that such an opportunity may never come" (Setsuo Taura,
director of fiber headquarters, executive director of Sumitomo Sho~i). Even
if a recovery can be made during the latter half period, the sales are not .
expected to exceed the level of the year before last, that is, approximately
$6.3 billion.
Middle and Far Eastern Countries Withhold Purchases
The worsening export situation is due mainly to the woraening depression in
the advanced nations and consequent reduetion in demand. Moreover, Middle
and Far Eastern nations are withholding purchases because oil money has
become scarce due to a reduction in oil sales, while China, where the import
rights have been delegated to the local government, is in the process of
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sorting out the past excess of imported goods. It is feared that the
prospects for synth~tic fiber exports during the second quarter period on
the basis of the monetary amount will be 20 percent less than the previous .
year--the worst situation so far.
As a result, the matter of reduced production hae suxfaced in the Hokuriku
area, where polyester long fiber fabrics are manufactured. Since April, the
~ Fukui plant has been operating at a 20 p~rcent reduced rate. Af~ter the
textile plant introduced the water~et loom, which is termed a revolutionary
weaving machine, its cloth production capacity increased significantly. And
now exports are declining, sa it has ended up with a considerable amount of
- excess capacity.
Unlike the synthetic fiber industry which is sufferi.ng from inactive exports,
the cotton textile industry is ~uat about at the breaking point, thanks to a
sudden increase in imported goods. The cotton yarn import during the months
of January and February this year was 60,000 bales each, setting the highest
record in history. Even af ter September last year when the depression cartel
was called off, the industry was voluntarily reducing production by approxi-
mately 15 percent and, in order to regulate imports, requer,ting MITI to
- initiate MFA (agreement on an international trade in fi~:er products). Haw-
ever, MITI's attitud~ was that "it ia difficult to im~,lement an exceptional
protective trade policy for the fiber induatry only." Therefore, industrial
circles feel powerless: "The cotton yarn industry cannot he?lp but aink in a
, quagmire."
If you look at clothing materials, you can note a shortage of bright mate-
- rials. An increase in the sum received from sales may be expected due to a
; higher unit price, but there is no sign of an increase in dema.nd itself,
! because the consumers have chests fu11 of stockpiled materials. Therefore,
a movement to introduce a novelty such as a foreign brand is becoming
active, but only a small fraction will succeed and many attempts will make a
poor showing'.
The total February sales of fabrics, which occupy 40 percent of the total
sales, in department stores nationwide registered only a mild increase of 3.7
percent over those of the previous year. However, even this figure is con-
sidered exaggerated. A certain mainatay apparel maker is said to have dis-
patched its staff to the store front and scrutinized the sales situation of
the fabrics. They found out that the results were not that good in reality.
"Al.though we cannot say this for all department stores, it appears that
there are sales unrelated to the true demand. This is like 'an Imperial
Headquarters announcement,"' said a person connected with the apparel maker
with a forced smile.
~
The sales of fabrics recently may be characterized as "clearly limping"
(Hiromichi Inegawa, president of Renown Incorporated). While those items of
merchandise in high demand are showing a high growth rate of a 20-30 percent
increase over the previous year, those items for which demand is low are
showing extremely poor results. Roughly speaking, lightweight fabrics
(pants, blouses, sweaters, and ~ogging-auits) are doing well, while heavy
fabrics (suits, coats) are not.
21
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The sales of apparel fluctuate Widely not only according to the item of
merchandise, but also according to the maker and retail store. This
phenomenon depends on whether the dealer was able to anti~ipate the line of
- ~ goods in high demand, and whether the maker took the riak by tatting on the
line of goods in high demand. 'The fact that the big makers are dotng
satisfac.torily while the medivm and small makers are fighting a desperate
battle for survival is attributable to the difference in the ability to
gather information and also to the robust constitution of the big makera,,
which can take risks.
~ Qitli~ ~ 30
3 ~ ~
~ ~o
~d~ #fi9�tt1*tf~R ~ ~ 10%
� ~b20 0
- . ~ 10 12 B~ 2 t 6 8 10 ~~.1 -10
(5)c~~~ �~aeo~~~ ~
Key:
- 1. Fiber exports 4. Previ~ius year growth rate
2. Export results 5. (Minis try of Finance, Customs statistics)
3. $10 million
[7 Apr 82 p ~ ] .
[Text] Oil Industry
Painful Cheap Yen, Reduced Demand; Cannot Await Improved Constitution
After a month-long hesitation, the oil industry raised the price of oil
products by 3,000 yen per kiloliter. The price rise this time does not have
a"just cauae" such as a crude oil price rise caused by OPEC. The only rea-
- son for the rise is the rise in crude oil cost due to the cheap yen. While
the prospect for recovery from a large amount of red ink incurred in early
1981 is not yet certain, the industry has encountered another difficulty
brought about by the cheap yen. Within the industry is a sense of urgency:
- "We must brace ourselves for what is to come."
At the Limit of Weakened Conatitution
Since the first shock that occurred in late 1973, the oil industry has been
continuously troubled by two "external factors": the crude oil price rise
effected by OPEC and the unusually high yen exchange rate. The difficulCy
encountered this time is slightly different in nature from those of the
' past. While the crude oil price based on the U,.S. dollar is falling as a
result of the oil glut, the crude oil cost based on the yen is rising as a
- result of changes in the yen exchange rate.
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The iridustry has to ride out a pain~ul situation consisting of "a price rise
as a result of the oil glut." What is worse is the fact that the strength
of tre industry has been weakened almost to the limit. During the period
from April to September, the industry accumulated huge losses amounting to
a total of approximately 500 billion yen in operating costs due to poor
sales activiticj, which is compounded by the exchange losses.
The oil industry has had the experience of being in the red 2 years in a row.
- In 1974, immediately after the oil shock, 28 oil companiea lost a total of
- approximately 79 billion yen, and another 84 billion yen in 1975. At that
time, they were able to~balance the books by selling some of their properties.
- Today, they are in such a state that "the red ink can no longer be made up
because they are running out of properties to sell" (Zentaro Nakayama, presi-
dent of Daikyo Oil).
Industrial Demand Plunges
There are further reasons for anxiety. One is the fact that the drop in
demand for oil products which became apparent in 1980 is still going on.
What is pulling the entire market down is the reduction in industrial demand
for naphtha and type C heavy oil. The demand for type C heavy oil was most
significantly affected by the conversion to burning coal by the cement
industry and the halt to burning oil in the blast furnaces by the iron and
steel industry. The sales of type C heavy oil in 1981 (January-December)
was only 65 million kiloliters, a drop of 25 percent from the peak estab-
lished in 1979. Sales of naphtha were also significantly affected by the
- cheaper imports, and the 1981 sales experienced a drop of 31.3 percent from
the pe3k established in 1978.
The 1981 gasoline sales experienced a small increase, 1.9 percent, over that
of the previous year, but showed no appreciable fluctuations in the past 2
years. According to a tentative forecast made by the Resource and Energy ~
Office of MITI, the demand for fuel oil in the first half period (April- ~
_ September) of 1982 is expected to.drop 2.9 percent over that of the same
period of the previous year. The reduction in demand for naphtha (3.9 per-
cent) and type C heavy oil (4.5 percent), in particular, is expected to
continue.
_ Prospect Is Dark for Reduction in Facilities
Surrounded by difficulties including the cheap yen and reduced demand, the
industry is resigned to the fact that "we cannot do anything but to imple- '
ment measures within our own power to improve our own constitution" (Kazuo
Okita, president of Shell Oil). The first problem the industry must tackle
is the disposition of the surplus facilities. The Resource and Energy Office
of MITI is planning to ask each oil company to present its own disposition ~
- ~ plan by the end of June based on an oil supply plan (for 1982-86) which is
to be published in May.
The total capacity of normal pressure distillation (crude oil treatment)
facilities owned by the industry is 5.94 million barrels a day
23
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(1 barrel = 159 liters), and the average operation rate in 1981 was only
60.9 percent. According to the tentative aupply plan of the R~esource. and
Energy Office, the average opera~tion rate during the period April to
September this year will drop further to 53.7 percent. This office fore-
casts, therefore, a long-range daily need of no more than about 1 million
barrels, so that approximately 15 percent of the facilities will become
unnecessary.
Against this background, members of the industry, in groups centered around
the big wholesale companies, have taken up discussion of the optimum opera-
~ tion rate of each refinery. Hawever, this is the first time the oil industry
has been forced to trim the excess fat by its own hand, and there are many
uncertainties including the employment problem and the local reaction asso-
ciated with the disposition of the facilities. There is no knowing how far
- and how deliberatively each company will carry out the countermeasures in
order to rebuild a new production system. ~
Another problem concerns the structural renovation of the circulation depart-
_ � ment. Among the wholesale co~anies is a growing realization that the
presence of "more than 60,000 gasoline stations nationwide constitutes a hot~-
- bed for improper competition." However, the special firms that handle the
distribution are almost all independent operators, so the idea of the whole-
salers may not readily pe~meate to the terminals, and thus rationalization
of circulation and improvement of efficiency is expected to take a long time.
The oil industry was preased by increasing demand during a period of rapid
- growth, so its attention was caught by the rash of price rises after the
- first oil shock. And now, all the hidden problems that have accumulated have
erupted all at once. The industry is treading a thorny path with the aware-
ness that "zero growth in oil demand will continue for a long time to come"
(Tokio Nagayama, president of the Oil League).
(i) ~iv~~�r~c~i~o~�9~R~~~1h1~
~ 2 fl'I ~1 i~3~
~
~ o ~ .
,
1 5)
- . h' i i
lb
( ~3A1~6)-910-IT ' 1~3
- L55~_JL'::~~J L51
Key:
- 1. Gasoline and type C i~eavy oil sales inovement over four half periods
- 2. 10 million kiloliters .
3. Gasoline
4. Type C heavy oil
5. Estimate
6. Months (quarters)
- 7, Years: 1980, 1981, 1982
24
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[8 Apr 82 p 7 ]
[Text] Petrochemical Industry
Troubled by Demand for Lower Price; Reorganization of Industry Unavoidable
"Polystyrene, which used to be an honor student even during the depression,
also failed. Since then, all petrochemical products have become delinquent~" ~
(Takeshi Dokata, president of Sumitomo Chemical Industry).
Polystyrene is one of the five ma~or synthetic resins, together with high
pressure polyethylene, medium and low pressure polyethylene, polypropylene,
and vinyl chloride. It achieved brilliant growth as a material used in
electrical and other industries, packaging, and general merchandise. When
- the depression set in during the summer of the year before last, when the
other four resins failed one another another, the demand for polystyrene
and its market activity still remained strong. Now, the aituation has
become uncertain even for this "good boy."
Directly Hit by Depression in Audio Industry
First of alls it was hit directly by the depression in audio products. In
the past several years, the increase in polystyrene production was almost
all absorbed by the electric industry. However, the market deteriorated
rapidly and "we have considered we had to make production adjustments
without warning at the molding fabrication stage since last fall" (MiCsui
Toatsu Chemical).
As early as last spring, abnormal conditions in the materials used in audio
products such as stereos, radios, cassettes, and tape recorders were
noticed, but the situation has worsened since last fall. Recently, even
material for the VTR is r~~~ in big demand, and the impact of dull export
activity in household electric products is keenly felt.
Another main use of polystyrene, packaging material, is also suffering from
poor market conditions. The white trays used for packaging vegetables and
meat in the supermarket are made almost exclusiv~ly of polystyrene.
"December is usually the month in which the demand peaks. We don't know
why, but the demand dropped last December, and we have been forced to adjust
- production accordingly since January" (Asahi Dow).
The impact of a movement to "ligtit, thin, short, and small" is also pain-
fully felt. Today, almost all TV cases are made of a plastic material such
- as polystyrene. However, miniaturization of TV continues, and the total
number of units smaller than 14 inches in size exceeds 60 percent of all
products. As a result, the amount of plastics used is reduced significantly.
Asahi Dow, which is leading the polystyrene industry, had a huge lucky shot
recently. A plastic toy-model kit "mobile warrior Gandam [phonetic]" made of
its polystyrene became a big hit, and 4,000 tons of resins were sold last
year on this single item alone. The material for cassettes used in the
, 25
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- popular headphone stereo is also selling well. However, these sales are not
big enough to make up for losses due to stagnant demand.
Even Polystyrene
"The slow market is due not only to stagnant demand. It is painful to
realize that it is due to excessive competition among the producers, whose
_ expanded facilities are now in operation" (a person in charge of sales of a
certain polystyrene maker).
In order to absorb the higher raw material cost, since last fall the petro-
chemical companies have been making plans to raise the price of almost all
products. However, the price rise has had a difficult time getting through.
A reduction in price on certain products has neen demanded by consumers,
with a slump in demand as an excuse. Polystyrene makers are receiving a
demand to lower the prices by such big consumers as light electric appliance
makers and supermarkets. The makers are tense with suspense: A month or so
is the crucial period in which either the demand for lower prices will be
- rejected or the makers will buckle under to the demand."
In spite of the dull market activity, a number of powerful polystyrene makers,
including Shukko Petro~::pmical, Dainippon Ink Chemical Industry, and Mitsui-
Toatsu, have started operation of new facilities one after another since last
summer. Although they are aiming at the development of a brand new applica-
tion field, the opening of these new facilities no doubt contributed to the
sag in the supply and demand balance and added fuel to the mood for lower
prices. The wave of excessive competition has caught up with polystyrene, the
honor student of the petrochemical industry.
The offAnsive launched by cheap imported goods is also contributing to the
pressure to lower prices. Polystyrene imports last year amounted to 34
million tons. The same amount was imported in January of this year alone,
and the imports~increased in February. Approximately one-third of the total
imports consist of relatively high-quality U.S. products. The petrochemical
industry laments: "In order to ease the trade friction and also to prepare
for exports to the United States, the household electric appliance makers
have begun to use materials made in the United States aggressively."
- "As to structural reform of the petrochemical industry, ever,ybody agrees that
'the number of enterprises must be reduced,' but everybody c~~sagrees when it
comes to specifics: 'don't shut down mine'; however, there are ways to
reconcile these two, including mutual production consignment" (Yasunobe
_ Kishimoto, president of Showa Electric Industry).
In addition to excessive competition within the industry, the industry ~s
also troubled by the high raw material cost, stagnant demand, and invasion
by cheap imports. The degree of polystyrene slump is relatively light, but
numerous petrochemical products have tradden the path of vinyl chloride resin
since last summer toward a structural depression even with intensified activ-
ities carried out by the collective sales companies. ~
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Good Material in Imported Raw Material
Nevertheless, a number of hopeful materials appeared when the voice of spring
was heard.
The unsettled problem related to the reform of th~ naphtha (crude oil) import
system, which is the raw material for the petrochemical industry, has a
prospect of being settled for the present. Early implementation of public
- works which can sti~ulate the demand for petrochemical products has been
decided on. These measures will no doubt benefit the industry on the cost
side and demand side, but will not be a quick remedy for the depression.
Intensive industrial reorganization as a drastic measure to escape from
depression is being cons~dered; it is believed to be the inevitable route
that must be followed by everybody. Since last fall, mutual production
consignment between two companies has become quite popular in the fields of
vinyl chlori3e resins and other synthetic resins, raw material for ferti-
lizer, and other chemical products. This is an attempt by all parties con-
cerned to increase their benefit by concentrating production on those plants
having a stronger cost competitive edge. There are too many enterprises in
the petrochemical industry. For example, there are 12 companies manufactur-
ing mainly the basic raw material, ethylene. Those companies which are slow
in establishing a cooperative strategy will be forced into a more and more
disadvantageous situation. Competition for leadership in the reorganization
of the industry, on which the survival of the industry hinges, is getting
hotter and hotter.
5 ~~Y~~=~'~�ro~
I ~
~o ,
F 25
~ 0
5/1 2 3 A 5 6 7 8 9 1011 t2 /12
Key:
= 1. Movement of ethylene production, the basic raw material of the
petrochemical industry
2. 10,000 tons
COPYRIGHT: Nihon Keizai Shimbunsha 1982
9113
C50: 4106/97
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SCIENCE AND TECIiNOLOGY
EFFORTS TO DEVELOP NEW ENERGY SOURCES DESCRIBED
= Tokyo SHUKAN DAIAMONDO in Japanese 27 Mar, 3 Apr 82
[Art~cle by Gene Gregory: "Japan To Extricate Itself From Oil Dependence"]
[27 Mar 82 pp 91-93]
[Excerpts] Highly Practical Japanese Nuclear Fusion
Influential Japanese scientists submitted unusually demanding advice to the
Japan Atomic Energy Commission in March 1981, requesting that Japan act
immediately and concentrate its effort on construction and operation of a
_ 400-800 megawatt experimental nuclear fusion reactor costing in 10 figures
in dollars by 1993 and on construction of a large-scale "engineering experi-
mental reactor" by 1984. If this timetable is observed--and the possibility
is extremely high--Japanese industries will lead in the practical application .
of this new technology in the field of thermonuclear fusion control.
In Japan, the Nuclear F~sion Council chaired by Murishige believes that some
of the steps which were previously considered necessary for the development
- of nuclear fusion can be omitted. According to the advanced present time-
table, nuclear fusion generation is predicted to be commercialized by the
year 2010. However, some Japanese scienrists think it possible to expedi~e
the development further if only.more human resources are invested in this
project.
For all, it is clear that nuclear fusion cannot solve the current energy
problems of Japan. Indeed, there is no single answer to these problems.
What are being emphatically pursued now are various conservation practices
and substitute energy pro~ects.
Champion of Energy-Saving
- Japanese industries have consolidated their status as champions in the tech-
nology of producing more with less energy due to the concerted conservation
efforts in 1980. Before the oil crisis of 1979, Japanese industries
increased energy consumption by an average of 0.6 percent for each 1 percent
gain of GNP. However, in 1980, Che total energy consumption on the contrary
- decreased by 0.49 percent for each 1 percent gain of GNP. In FY-80, the
28
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' Japanese econonry showed a 3.8-percent growth while energy consumption was
reduced by 3.8 percent--by 10 percent in the case of oil consumption.
It is clear that this is noC an isolated phenomenon but a long-term trend
which resulted from continuous con'servation efforts. In the 6 years from
1973-1979, GNP rose 24.5 percent while the increase in the total energy
consumption was held as low as 8.25 percent and the increase in oil con-
sumption was only 1 percent.
This fantastic dampening of energy consumption growth can be attributed
primarily to the following three f actors: �
-Power demand by the raw material related energy guzzling industries was
curtailed combined with the effecta of a low econotnic growth rate.
--Electricity conservation technology for home electric appliances has made ~
a giant step forward.
--Consumer energy use was reduced by the 50 percent utility rate peak which
took effect in April 19~0.
These factors definitely reflect not merely a temporary phenomenon but a
basic structural change in power consumption.
The Industrial Structure Council of Japan admitted that the moat important ,
- task of the industrial structural reform was to chsnge the general rela-
tionship between energy and the industrial system. Inversely, they accepted
the fact tha t the most effective approach to achieve large-sc ale energy
i conservation and to introduce substiCute energy sources was a basic reform
; of the indus trial structure.
- The council made the following explicit statement in its latest report:
"For this p urpose, we must intensify efforts from the supply-side, for
- instance eff orts for securing a stable supply of oil and deve loping substi-
tute energy. Simultaneously, the demand-side must promoCe various projects
_ for the development of an industrial structure which is much higher in
energy efficiency and much lower in dependence on oil-base energy than the
present industrial structure through energy conservation technology and
introduction of nonoil energy."
Import Oil Dependence Reduced to 50 Percent .
In May 19$0, a"Substitute Energy Source Law" was enacted in order to pursue
the. objectives, and a public corporation called the "New Energy Development
Organization" was established in October of the same year for coordination of
the substitute energy pro~ects. The simply expressed purpose of the organi-
zation means that the import oil dependence will be reduced to 50 percent by
1990 from the current 75 percent, which, in other words, means a three-fold
_ increase in nonoil energy supplies in the 1980's.
29
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What claims the largest percentage among the substitute energy sources based ~
upon this supply target is coal. Coal imports are expected to be raised to
163.5 million tons per year by 1990 from 92.4 million tons in 1980.. At the
same time, LNG (liquefied natural gas) imports will be raised to 45 million
tons from 17 million tons.
However, in Japan, it is nuclear energy that is considered the most promising
intermediate substiCute energy source in parallel with coal. 5ince nuclear
energy is a model of a system industry which is known for the concentrated
use of advanced technologies, its development is awaited with great expecta-
tions even for the future modernization of the general Japanese infrastruc-
ture.
The high temperature and energy density of atomic energy will open an avenue
- for a revolutionary new energy system which cannot be developed with regular
energy sources.
- Among the types of energy used in an industrial society, electric power
claims only 30-40 percent. The rest is consumed as fuels or thermal energy
- �in the industrial process. The very high temperature reactor (VHTR) cur-
rently being developed ::ill, on the other hand, reduce gas and synthetic gas
_ used as fuels and raw materials for the chemical and iron and steel indus-
tries, and in effect will curtail the dependence on coal and oil energy
sources.
. The Japan Atomic Energy Research Institute is pro~ecting the operation of a
50 megawatt commercial VHTR by 1987. Meanwhile, nuclear power generation by
regular reactors will increase over three times by 1990 to 51-53 megawatts
from 15.5 megawatts in 1980.
Atompolice
The biggest target is the realization of independent nuclear energy by the
end of the 1980`s both in reactors and fuel production. Ever since the
initial oil crisis, the Japan Development Bank has granted low interest
loans to nine power companies for the purchase of Japanese-made nuclear
engineering plants, and�has stimulated both R& D and production of nuclear
engineering plant makers--Hitachi, Toahiba and Mitsubishi Heavy Industries
in particular.
In order to assure independence in nuclear fuel supply by 1990, the Power
Reactor and Nuclear Fuel Development Corporation ~ointly operated by the
private and public sectors has intensified its efforts in studies on fuel
- reprocessing at the Tokai Research Eatablishment of the Japan Atomic Energy
Research Institute. Also, an agreement was concluded in regard to funding
for the establishment of commercial reprocessing facilities by private
corporations. Simultaneously, the Japan Atomic Energy Research Institute
is promoting the development of a fast breeder. The fast breeder does not
require enriched fuels and can ecanomically produce energy supplies on a
large scale until such time as power from nuclear fusion becomes usable.
30
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