MonthlyCompanyMagazine

ONDO

月刊おんどＮｏｖｅｍｂｅｒ
No.５４２ ２０２２２０１９

１１月

月刊おんど編集部（総務部）〒341-0037
埼玉県三郷市高州２－１７６－１
TEL： 048-955-4181
FAX： 048-956-1310
E-mail： info@uchiya.co.jp

The best prescription is the improvement of added value
23rd October, Reiwa 4th
President : Sumito Shimizu
Commentators and some politicians are making a fuss, saying that South Korea has
surpassed Japan concerning the per capita GDP among the OECD countries. Accroding tothe data published by IMF(International Monetary Fund) and OECD, in 2018 the percapita GDP(PPP<Purchasing Power Parity> calculated by the price level in 2017) ofJapan was surpassed by that of South Korea and the gap has been increasing.
In addition, the yen has gotten weaker, temporarily fell to ¥150 against the US dollar. TheBank of Japan intervened in the foreign exchange market to support the yen by reducing
foreign exchange reserve, and after that it has fluctuated around the ¥145 level. In short,
this means that the Japanese economy has been in a very serius situation. I should judge
that the decline of Japan has been progressing. Even so, Japan has managed to keep theposition of the third largest economy power in the world(the United States, China andJapan). However Japan temporarily has almost caught up with the largest economy
power, America in the past(bubble period from1986 to 1991), but it was so long ago. For
Japan to recover as a genuine economy power, Japanese companies must regain
credibility (quality problems such as data falsification and management problems such asaccounting fraud) and spread high value-added products to the world, I have thought.

They have given themselves to developing 100 yen products with no added value in Japanand it has caused all the Japanese people to seem poor. Japanese people should stop thiskind of situation. They should make production innovation that Japanese have been good-1-

at, and provide products that all the people in the world are willing to purchase at 1,000yen, even at 10,000 yen. As the result, companies would become prosperous, theiremployees and families would happy, and would make the country rich with their tax .
This is the essential role of a company. If a company runs a deficit, neglects their duty topay tax(national tax), and does not increase the income of its employees, it can be called azombie company. According to "International Comparison of Labor Productivity 2021," ofthe Japan Productivity Center, Japan's labor productivity was $49.5 (5,086 yen), whichranked 23rd among the 38 member countries of OECD, and has been the lowest in theseven major countries (G7). In other words, it is essential to increase the added value ofthe products. Also, we need to raise the selling price and lower the production cost byraising the automation rate. It is said that the higher the sales becomes, the higher theexpenses becomes. However it is a false common sense. We need to make our sales themaximum and try to suppress expenses to a minimum thoroughly, which could bringhigher profit.
This is the direction that Japanese companies should aim at as a leader. Uchiya has takena management strategy while being deeply aware of this fact.

Considering from macro perspective, the below things have been often appointed out.
① Innovations have been rarely created(could not be created).
② Investment for human resources and equipments has been decreased.
③ Lower prices competition has progressed due to past deflation. As the result,companies could get less profits(added value) when they provide similar products andservices as other countries.
④ There have been few newly started business and M&A.
⑤ The Japanese productivity of the service industry which needs a large working
population is lower than that of other countries.
In the early 1990s, when the bubble had bursted, the word "price collapse" became
popular in Japan. It can be said that this is a symbol of the "beginning of a deflationaryspiral." After the burst of the bubble, being rushed to dispose of non-performing loans, debt
repayment had been prioritized as a way to use money, and the sales of companies and-2-

stores hade been decreased. Companies and stores try to increase sales even a little bylowering prices. As the result, → Decrease of profit → No increase of wages of workers→ people spend even less money → sales of goods and services fall further → then lower
prices again. We have fallen into the spiral of “nothing good at all”. Even now, there aremany embarrassing companies that set up the price destruction as their business strategy.
@ 100 Yen shops are typical ones !

In fiscal 2018, internal reserves of all corporate companies (2.8 million companies) had
swelled to 463 trillion yen, and that of only 5,000 large companies with capital of 1 billion
yen or more had swelled to 234 trillion yen. It has become clear that only 0.2% large
corporations out of all corporations hold the half of their internal reserves. Retained
earnings are the amount profit left over in their companies after paying dividends toshareholders from the profits of each period. The reason why large profits were made eventhough sales weren’t actually increased was that workers' wages and welfare expenses
had been reduced and reduction of corporate tax had been completed.
Wages and welfare costs per one worker have been kept very low, and corporate tax has
been reduced while the consumption tax has been increased. As the result, internal
reserves have been higher and higher.

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Developed countries in Europe and the United States have been moving away from theindustrial society in the 20th century to the creation of new industries that is based on"digitalization" in the 21st century. Wage increases and capital investment in Europe andthe United States have been carried out in order to bring out the vitality of humanresources for this purpose. However, Japanese companies have prioritized increasing
internal reserves and they have not invested enough money to transform their industrial
structure through digitalization.
Based on this situation, Uchiya has promoted digital transformation by investing so-called
people, things, money, and information in wage increases, human investment, capital
expenditure, new product development, and investment in the construction of information
systems.

-4-Presented with Gold Meritorious Award from the Japan Red Cross Society
25th October, Reiwa 4thPresident : Sumito Shimizu
On Tuesday, October 25th, the Tokyo Chapter of the Japanese Red Cross Society held the2021 Tokyo Red Cross Convention at Meiji Jingu Kaikan in Shibuya Ward. Originally, thehonorary vice-president of the Japanese Red Cross Society, Her Imperial Highness Princess
Takamado, and branch manager Yuriko Koike (Governor of Tokyo) were to attend, but due
to the coronavirus infection, they were absent. More than 1,000 members usually attend
this ceremony, but the number of people present were restricted to about 250 people due tocorona infection measures. This is the award ceremony in which the Japan Red Cross
Society commends Red Cross people(members) who have made large donations in Tokyoand people who have made achievements in volunteer activities. Uchiya also made adonation in February of this year, so I attended the ceremony on behalf of Uchiya
Thermostat Co., Ltd. The manager(deputy) of Tokyo branch of the Japanese Red Cross
Society gave some commemorative mementos(plaques) to some associations, companies
and individuals which were chosen in advance from the attendants. The actualcommemorative plaques have already been received by the recipients when Tokyo branchof the Japanese Red Cross Society visited them in advance. Uchiya also has already received
one when the Japanese Red Cross Society visited Uchiya in August.
Fundamentally, donation should be done secretly, purely, cleanly, and beautifully. However,because I am a person who cannot get rid of worldly desire in the real world, I was happy
to attend such a grand ceremony and experience a little pleasant feeling. We were able tomake a donation to the Japanese Red Cross Society as a result of the hard work of everyone
at Uchiya. Because this activity was highly evaluated, we received the "Kinshoku(Gold)yuukoushou(Meritorious award) award" this time. It is a great honor to receive such anaward for our contributions. I think that all of us who work at Uchiya should be united inheart and be encouraged to continue our social contribution activities by this award..

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<Kind of Award>
Gold Meritorious Award：Awarded when one or total(accumulated) amount of donation is morethan 500,000 yen. (Individual：Medal、Corporation：Shield)
Silver Meritorious Award：Awarded when one or total(accumulated) amount of donation is from
more than 200,000 yen to less than 500,000 yen.
A letter of appreciation from President: Awarded when one or total amount of another donation is more than
500,000 yen after receiving Gold Meritorious Award.

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