JBIC Today

September 2020

Special Feature

The Exciting Russian Far East
Five focal keywords for business in the Russian Far East
Acceleration of energy resources development in the Arctic, following the Sakhalin Projects
Far East JPPV – A bridge between Japanese companies with the seeds and local companies who know the needs
Hokkaido Corporation – Bringing New Vitality to Hokkaido by Supporting Local Companies’ Overseas Expansion

Our Global Challenges- Nihon Kolmar Co., Ltd.
One-Stop-Shop Service Meeting Diverse Needs

Opening up Growing Asian Cosmetics Markets

Project Frontline Our People and Their Work

Generating momentum and a sense of unity are essential to international negotiations
Determining the company’s long-term strategy is key for financing of urban development projects

Special Feature

The Exciting Russian Far East

Five focal keywords of the Russian Far East

Energy Resources

The Far East is the region of the massive country of the Russian Federation that is closest to Japan. When Japan’s Prime Minister
ABE Shinzo presented Russian President Vladimir Putin with the Eight-point Cooperation Plan in May 2016, much attention was
drawn to the inclusion of the Far East as one of the plan’s targets. This article presents what is happening with Far East businesses,
from the large-scale energy projects in Sakhalin to a vegetable factory that produces fresh vegetables in a cold-climate region.

Five focal keywords for businessin the Russian Far East

Agriculture, forestry,
and fishery resources

Recycling

hopes for further expansion of businessdomain that is rapidly attracting attention.

in the Far East. Among the various business

Until now, in many cities in the country,

areas mentioned in the Eight-point

garbage has been collected all together,

Cooperation Plan, we want companies

with no separation, and sent to landfill in

considering participating to focus on

the country’s vast expanses of land. In

With strong support from the Japanesethese five keywords: “agriculture, forestry,

recent years, however, due to growing

and Russian governments, there are highand fishery resources,” “recycling,”

environmental awareness, some local

natural resources. The majority of the“tourism,” “energy resources,” and “mid-tiergovernments have started to introduce

population are concentrated west of the Ural

enterprises and SMEs.”

separated garbage collection and recycling

Great potential lies dormant in a landof extreme cold
Business boosted by effective
relationship between Japan and Russia

Russians a direct sense of the improvement

Abundant resources with expectations
for future development
Russia’s hopes for Japanese advanced
technologies and knowledge

in their daily lives.
The Plan is not limited to the Far East,
covering the nation of Russia as a whole, but
one characteristic of the Cooperation Plan is

The Russian Federation has the largest
land area in the world and an abundance ofthe emphasis it places on the developmentof the Far East.

Mountains, and Moscow, the capital city,

Major Advanced Special Economic Zones (ASEZ)

and St. Petersburg are the nation’s cultural

Top: ASEZ Name
Bottom: Industries with expected demandand economic centers. Those regions may

The first of these, “agriculture, forestry,

initiatives. Japanese technological capability

and fishery resources,” is a particularly

has the potential to contribute to thestrong characteristic of the Far East, with its

environmental beautification of the Far East.

be the image that most Japanese have of

vast land area surrounded by sea on three

Russia. However, the Far East, which is thesides.

The third keyword, “tourism” is another

Although Russia does export marine

Vladivostok, the central city of the region, islocated at the tip of a peninsula in the Sea of

The Far East comprises several regions,still in the developing stages, and theJapan, just two and a half hours by direct

including the Republic of Sakha (Yakutia),

products are often transported without any

flight from Japan. Reached just as easily as a

Khabarovsk Krai, and Kamchatka Krai.

local processing. The equipment anddomestic trip, the area is full of charm as

Located at one of the highest latitudes of thetechnologies used in aquaculture are quite"the Europe closest to Japan," withEurasian Continent, some areas of theoutdated, which means that there is plenty

streetscapes that are brimming withof room for improving this domain with

European atmosphere and places rich inJapanese technology.

culture and art.

Chukotka Autonomous Okrug

slightly different characteristics.

region are exposed to harsh natural

Kamchatka
Krai

Magadan Oblast

environments, with the ground and rivers
frozen for half of the year.
However, under the ground of this vast

Kamchatka

Republic of Sakha(Yakutia)

land lie mineral resources such as gold andsilver, and energy resources such as crude
oil and natural gas. The region is also rich inmarine resources, with the East Siberian

Kangalassy
Khabarovsk Krai

Mineral resources,
agriculture (greenhouses)

Sea to its north and the Bering Sea to the

Manufacturing,logistics

potential, development has not progressed

Many Japanese companies starting up

For example, fishing for herring thrives inbusiness in the Far East have based

Russia, but the roe does not hold any

themselves in Vladivostok, and the city has

particular value there. It is either consumed

become much accessible to businesslocally without processing or thrown away if

travelers, with Japanese airlines launching

not needed. In Japan, however, herring roe

direct flights and Japanese hotel chainsis prized as a delicacy called kazunoko.

planning to open hotels there. Assisted by

Gorny
VozdukhSpotting an opportunity, one Japanesethe growing popularity of Japanese foodTourism,
leisurecompany has started an initiative to provide

culture among locals, there are eventhe technology to process this product inJapanese-run ramen shops and izakaya bars

Russia.

in Vladivostok.

Komsomolsk
Wood processing,food products

Khabarovsk

east. Despite having such great dormant

There is also potential for new business.

Fishery,
seafood processing,tourism

Sakhalin
Oblastin the Far East compared to Russia’s
Amur Oblast

western side, which is closer to Europe.

As well as marine resources, Russia has

The fourth keyword, “energy resources,”an abundance of forestry resources, but inhas long played the leading role inmany cases, it is simply shipped as timber. A

economic exchanges between Japan andJapanese SME that had learned about thisRussia. Even today, new projects are

situation brought sawmill equipment to thebeing launched. Some of these new

economic activities, and energy-related

region and, while teaching locals aboutp r o j e c t s are explained in detail on thebusinesses, in particular, which arewood processing technologies, has beennext page. The fifth keyword is “mid-tierworking to revitalize the forestry industry

enterprises and SMEs.” The three domains

andmentioned earlier, namely, “agriculture,

It was under such circumstances thatJapan proposed its Eight-point Cooperation
Plan to Russia.
To begin with, Japan and Russia havebeen in good relationship regarding

symbolized by the Sakhalin Projects, haveachieved many outcomes. The Eight-point

Zabaykalsky Krai
Republic of
Buryatia

Belogorsk
Agriculture,
food products,
wood processing

JewishAutonomous
OblastPrimorsky
KraiNadezhdinsky
Manufacturing,logistics

Mikhailovsky
Agriculture,
food products

makeeffective

useof

forestry

resources. Wood pellets, which can beforestry,

proposed that Japan would continue tomanufactured as an additional product in“recycling,” and “tourism,” could present

promote initiatives in the energy sector,

wood processing, can be used as biomass

major business opportunities for mid-tierfuel, but they are still almost completely

enterprises and SMEs. These opportunities

untapped as a business.

are discussed in more detail on the following

Cooperation Plan presented in 2016

while also putting efforts into cooperation
projects to leverage Japanese technology
and experience in ways that would give

The Russian government established Advanced Special Economic Zones (ASEZ)
to promote investment from the private sector.
Incentives include easing of regulations and tax benefits for residents.

Recycling initiatives are also proceeding in Russia, and therecycling business is expected to expand

domain that is showing remarkable growth.

products also to Japan, as an industry, it isclosest part of Russia to Japan, has some2

Tourism

Mid-tier enterprises and SMEs

The second keyword, “recycling,” is a

pages.

andfishery

The tourism business of the Far East as the “closest Europe” isalso attracting attention

Japanese support helped to establish a greenhouse growing
facility in cold-climate region

resources,”

Hokkaido-grown onions are being exported to the Far East

3

The Exciting Russian Far East

Energy Resources

Mid-tier enterprises and SMEs

Acceleration of energy resources developmentin the Arctic, following the Sakhalin Projects
Resources development in Russia has
major significance for Japan’s energy
security

Far East JPPV – A bridge between Japanese companies
with the seeds and local companies who know the needs

pipeline to liquefaction plants in

Support in all directions, fromlanguage to funding
Encouraging mid-tier enterprises and
SMEs to take on the challenge ofRussian Far East business

Prigorodnoye on the southern endof

Sakhalin

Island.

Japanesecompanies are involved not only inandcompanies,

and acting with the aim of being abridge between Japan andRussia.

The Sakhalin Oil and Gas Development

upstream gas field development,

Projects are one of the leading energy

but also in midstream andresources development projects in thedowns t r e a m a r e a s , s u c h a sWith the exception of companies thatcompanies need to consider

Russian Far East. Japanese companies are

the construction of liquefaction

have experience doing business in Russia,

starting a business in the Russian

actively involved in Sakhalin I and II.

facilities and pipelines.

for most Japanese companies, the Far East

As well as providing the kind

Far East, it also offers themof local information Japanese

The Sakhalin I project began with a focus

To date, JBIC has provided

should be a whole new world. Many

support to launch their businesson crude oil development. Japanesemore than USD6 billion in loanscompanies probably find it difficult toventurescompanies, including Itochu Corporation

for the Sakhalin I and II projects toenvisage what kind of businesses they could

systems in Russia vary fromand Marubeni Corporation, are investors insupport resource development in

do and where exactly they should start,

region to region, and it can

Sakhalin Oil and Gas Development Co., Ltd.

which Japanese companies arewhen they have no knowledge about local

sometimes be difficult for a lone

Japan for their first venture into overseas(SODECO), which has a 30% interest in

involved.

Major Japanese trading companies are also participating in the Sakhalin II
project. It produces LNG and more.
Photo courtesy of Sakhalin Energy Investment Company Ltd.

lifestyles or the language.

private-sector company to negotiate bybusiness. There are some notable examples

To assist those kinds of Japanese

itself. For these reasons, Far East JPPV

of mid-tier enterprises and SMEs that are

Russia is the fourth largest

the Sakhalin I project. Development began© Sakhalin Energy

there.

Legislative
Far East JPPV official website

http://jppv.tilda.ws/jp

in earnest in the late 1990s, and crude

exporter of LNG (liquefied natural gas) toJapanese companies are involved in both ofcompanies to venture into the Far East,

offers local knowledge and expertise to help

expanding their businesses there. Theyoil shipments began in 2005. In recent

Japan after Australia, Malaysia, and Qatar.

these projects. Plans are underway for LNG

JBIC invested 50% and the Far East

these

and

include a company that is exporting andyears, efforts have been placed into

Almost all of those LNG exports come fromproduced in the Arctic to be transported via

Investment and Export Agency (FEIA) andapprovals from government agencies. Since

selling aquaculture equipment to the Far

the commercialization of natural gas

theprojects’

the Northern Sea Route to the Kamchatka

the Far East and Arctic Development Fundit was established in March 2018, it has

East from Hokkaido and another company

development as well as crude oil production.

proximity to Japan is another important

peninsula, where it will be loaded onto

(FEDF) together invested the remaining

already been involved in more than 20that has already established a local

For Sakhalin II, Mitsui & Co., Ltd.

feature. Whereas it takes more than threetankers at the terminal for export to Japan.

50%

projects

subsidiary

Sakhalin

Projects.

The

Large-scale

resourcesdevelopment

haveweeks to transport LNG to Japan from theinvested in Sakhalin Energy Investment

Middle East, it takes only about three days

involving Japanese companies and energy

Company Ltd., the project developer.

from Sakhalin.

resources development in the Russian Farand

Mitsubishi

Corporationtoestablish

Japanese

Project

Promotion Vehicle in the Far East LLC

companies

after

obtainreceivingsupportrequestsfor

The fact is that nearly every Japanese(Far East JPPV).
The objective of Far East JPPV is tocompany

considering

venturing

there

with

the

aim

of

manufacturing biomass fuels for export toassistance from Japanese companies.

Japan.

into

In addition to equity investment andThis project began with crude oil

Shifting focus to the whole of Russia, theEast, which is close to Japan, are importantcreateforbusiness in the Russian Far East is a mid-tierlending support, JBIC is also focusing on

andexpandopportunities

production but is now focusing mainly

Yamal LNG Project and Arctic LNG 2

keys for Japan’s national energy security

Japan-Russia business in the Far East

enterprise or SME. Some companies haveconsulting and business matching throughon natural gas development. Extracted

Project

and close attention is being paid to theirthrough advisory and consulting services. It

set Russia as their next target afterFar East JPPV in its efforts to create

natural gas is transported through aincreasingly noticeable in recent years.

future expansion.

is building collaborative frameworks withachieving success in Asia, while others havebusiness opportunities between Japan andRussianbeen attracted by the Far East’s proximity to

Russia.

intheArctichave

becomeSakhalin I Overview

Sakhalin II Overview

Project for the development of three oil and natural gas fields,
Chayvo, Odoptu, and Arkutun-Dagi, located off the northeastern
coast of Sakhalin Island.

Project for the development of two oil and natural gas fields,
Piltun-Astokhskoye and Lunskoye, located off the northeastern coastof Sakhalin Island.

Production status and resource trading to Japan (2017 results)

Production status and resource trading to Japan (2018 results)

Crude oil

68.5 million bbl / 7.7 million bbl

LNG

11.4 million tonnes / 6.7 million tonnes

Natural gas

7.1 billion m3/Nil

Crude oil

43 million bbl / 9.9 million bbl(Production volume / exports to Japan)

Major players

includinglocal

The Far East Investment
and Export Agency (FEIA)JBICThe Far East and Arctic
Development Fund (FEDF)
50%

50%

Far East JPPV track record(Number of agreements concluded since company’s establishment)

Cooperation Agreement(Memorandum of Understanding)20

Services Agreement (consultant agreement)

5

As at the end of July, 2020

Japanese Project Promotion Vehicle in the Far East LLC

Exxon Mobil Corporation

30.0%

Gazprom

50.0% + 1 share

Sakhalin Oil and Gas Development Co., Ltd. (SODECO)

30.0%

Shell

27.5% – 1 share

Oil and Natural Gas Corporation (ONGC), India

20.0%

Mitsui & Co., Ltd.

12.5%

Rosneft

20.0%

Mitsubishi Corporation

10.0%

Concluded loan agreement with SODECO for a cumulative total of up
to approx. USD2.4 billion (five loans since 2002) as the necessary
funding for the development of the above fields.

partners,(Production volume / exports to Japan)

Major players

JBIC Financing

4

governments

Greenhouse cultivation

Provision ofadvisory services

Payment ofservice fee

Wood pellet manufacture
Aquaculture and seafood processing
Food residue recycling
Waste recycling

JBIC Financing
Concluded loan agreement with Sakhalin Energy Investment
Company (project company formed by the above players) for a
cumulative total of up to USD3.7 billion as the necessary funding forthe development of the above fields and the production and sale of
LNG.

Major businesses currently receiving
assistance from Far East JPPVWind power generation

Japanese companies

Russian Companies

Wood processing
Farm crop processing and storage
Transportation infrastructure

Contact for advice regarding Far East business support

Division 3, Oil and Gas Finance Department, Japan Bank for International Cooperation

TEL : +81 3-5218-9691

5

The Exciting Russian Far East

Japan-Russia Government Initiative Boosts
Expectations Toward and Interest in Japan.

Bringing New Vitality to Hokkaido by Supporting
Local Companies’ Overseas Expansion

CEO, the Japanese Project Promotion Vehicle in the Far East LLC

Alexey Khachay

Intense gaze on QOL-related fields
What is the potential for business in the
Russian Far East?

governments initiatives is quite apparent.

SHOJI Takeshi

Approaching the issues from different
angles from the large trading firms
Something we can do precisely
because of our close local ties

However, we cannot necessarily say thata sufficient number of those projects havecome to fruition although the various

to provide their children with safe
vegetables to eat.
Another project that was quite
rewarding involved onions. Onions
are a popular vegetable in Russia

In the Russian Far East, there has long

business ideas have been proposed. One

been a strong need for and interest in

barrier that is impeding the progress ofIn the 2000s, there was much discussion

as well, but the standards are not

Japanese technology and investment. Theirbusiness may be the difference in the sense

about new globalization policies for local

as strict as in Japan, which meant

desire of offering untapped markets to Japanof speed between Japan and Russia. In

companies in Hokkaido in the context of

there is inconsistency of size, andseemed to strengthen after Japan proposed

Japanese companies, the process leading tolocal revitalization. Its geographical vicinity

spoiled onions can sometimes

the Eight-point Cooperation Plan in 2016

the conclusion of a contract tends to taketo Russia is one of Hokkaido’s advantages.

be found in shipments. Whenand initiatives of both the Japanese andlonger. There have also been cases in which,

There have been trading firms that excel

conducted some research with

Russian governments were revealed.

even though the project proponents hadin business in China and Asia, but there

the aim of delivering delicious,

Specific markets include resource recycling,

excellent technologies and schemes, they

were none that exceled in business with

Hokkaido-grown onions to Russia,

waste treatment plants, biofuel production,

failed to make their proposal look attractive

Russia, so, in 2015, with investments from

we found that Russian consumers

transport

improvement,

due to a lack of preparation, so they were

the Hokkaido Bank, Ltd., producers'

preferred smaller onions. Thisgreenhouse cultivation, and marine productunable to adequately respond to demandassociations, and other investors, Hokkaido

prompted us to take the small

development for the Japanese market. From

from the Russian side.

Corporation was established as an entity foronions generated through therealizing the globalization of Hokkaido.

distribution process in Japan andinfrastructure

the total number of projects that I have

The approach to risk is also different.

consulted on to date, the effect of the both

Certainly, advancing into the Far East does

Our first project was a greenhouse

export them to Russia. It took

involve some risks, but there is no

cultivation project in the Republic of Sakha.

some effort to set up an export

The

originallyscheme, but the quality of theconsidering the use of greenhouses madeJapanese product was recognized,

such thing as a business without

Mr. Khachay explaining to Japanese companies about thebenefits of having a local partner they can trustrisk, and it is the same in areas

project

ownerswere

other than the Far East. What isand price of imported produce is notwith glass from Europe, but because of theand we are now shipping to a large

important is to have measures inappropriate. So, if we can use Japanese

land’ssupermarket

place to mitigate those risks in ant e c h n o l o g y to establish greenhousetemperature between the seasons caused

Today, we export more than 200

unknown

permafrost,thedifferencesinoverlygrowing environments, it will be possible tothe framework of the greenhouses to warp,

tons

cautious from a fear of risk will

distribute domestically grown vegetables ofbreaking the glass. The Republic of Sakha,

annually.

only take up more time, so wegood quality.

land.

Being

of

chain

in

Kitami-grown

Russia.
onionsthrough the Hokkaido Bank, Ltd., consulted

As well as agricultural produce,

recommend that Japanese parties

There are also high expectations forwith our company about whether Japan

we are involved in the marine

find a local partner they can trust

medical-related technology and investment,

might have a suitable technology. In Japan,

product

and ask us for support when

and there is growing interest among thestretchable

forsalmon and trout farming is a popularnecessary.

public in preventive medicine, which leads

agricultural use are used in greenhouses.

business, and there are several hatcheries in

As these examples show, there will likely

to extension of the average longevity. There

We proposed this material because there is

the Far East. However, the equipment they

continue to be demand in businesses related

promising? The Japanese people

isJapaneseno concern about it breaking like glass, andare using is not necessarily the most up toto the local production activity in the future.

have this strong image that therecycling technology that makes building

I am pleased to say that our proposal wasdate. One of our shareholders has been

The size of the market for food and daily

Russian Far East is rich in natural

insulation materials out of waste products

accepted. We were able to answer the

manufacturingfornecessities is determined by the size of theresources, but the government is(polystyrene foam). Another area we want towishes of the local communities, who wantmore than 30 years, so we have taken on

population, but there is still plenty of room

looking for ways to improve theconsider is the use of wood pellets madethe role of a sales representative andto open up new business areas. I believe that

quality of life (QOL) of the people

from the region’s abundant wood supply.

made a proposal to introduce Japan-madethe people over there are looking forward to

What kind of areas lookalsostrongdemandfor

fluorine-based

films

business.

In

hatcheryRussia,equipment

their products in the Far East.

of Russia and the Far East, so thisWaste treatment and resource recycling

equipment to the local hatcheries. As you

the introduction of Japan-made equipment

is an area in which it may be easiershould also become major markets. In theknow, salmon and trout are very popular inand systems that will help improve theirto get projects going.

new urban zones, initiatives are being

Japan, and they are imported in large

productivity.

Greenhouse cultivation is one

implemented to change the environment

quantities from Russia. If cutting-edge,

example. In Russia, it is difficultfrom a community-building perspective,

Japan-made equipment were to become

to grow produce in open fields

such as apartment building management

more widely used over there, productivity

year-round because of the climaticcompanies introducing bins for the trashwould increase, and Japan could importconditions, so it relies on imports

separation.

for fresh vegetables. However,the balance between the quality
6

Executive Director, Hokkaido Corporation

We look forward to seeing Japanesecompanies move into various areas.

larger quantities of delicious salmon and
Examples of Hokkaido Corporation’s activities can be foundon its website.
https://hkdc.co.jp/en/

trout. The equipment manufacturers would
also be able to open up new markets for

Hokkaido Corporation

Head Office
Minami 3-jo Grand Bldg. 5F, 6-3-2
Minami 3-jo Nishi, Chuo-ku, Sapporo,
060-0063, Japan
TEL : +81 11-232-1113
FAX : +81 11-231-1118
7

Our Global Challenges

One-Stop-Shop Service Meeting Diverse Needs
Opening up Growing Asian Cosmetics Markets
Nihon Kolmar Co., Ltd.

Left: The completed Vietnam factory. Operations will commence
once permits and approvals have been obtained.
Above: Izumo Factory, which has obtained FDA (USA) approval

Nihon Kolmar offers a one-stop-shop service to meet the diverse needs of its clientcompanies, including planning, development, and manufacture of cosmetics.
It is now venturing into Southeast Asian markets, which show conspicuous growth,establishing a local subsidiary in Vietnam to join those in South Korea and China.

Leading contract manufacturer of cosmetics, whosestrengths lie in technology and know-how accumulated
over 100 years
There is a leading cosmetic company tucked away in Osaka.
That company is Nihon Kolmar Co., Ltd.
“In addition to original equipment manufacturing (OEM), in
which we conduct manufacturing based on the customer’s
formula, we have established our own unique business model,
which we call “original design manufacturing (ODM),” to provide
various kinds of contracted services, including planning, concept
design, formula development, packaging design, packaging

President and C.O.O., Nihon Kolmar Co., Ltd.
and Chairman, Kolmar Vietnam Co., Ltd.

KANZAKI Yoshihide
8

selection, and efficacy evaluation, as a one-stop-shop service.” So
explains Nihon Kolmar President, KANZAKI Yoshihide, in his brief
description of the company. The company has established a solid
position as a leader in OEM and ODM in the cosmetics industry.
The company was founded in 1912. The current president’s
grandfather, KANZAKI Yoshiomi, manufactured and sold his own
brand of cosmetic products under the company name Kinryoen,
but the Kinryoen factory burned down during the Second World
War. After the war, president at the time made a fresh start
specializing in contract manufacturing, taking advantage of thecompany’s experience of in-house product development. With
OEM operations alone, the company would have been forced tocompete on cost, so instead, it pursued its own value-adding
efforts, which naturally led to a focus on ODM.
In 1968, the company formed a business alliance with an
American OEM cosmetics manufacturer, Kolmar Laboratories,
Inc., and changed its name to Nihon Kolmar in 1972. This
alliance prompted the company to capture demand from
European and American manufacturers that were entering theJapanese market during Japan’s period of high economic
growth, and it started developing and manufacturing morediverse products.
Through these experiences, Nihon Kolmar has built up a
wealth of advanced production equipment and human capitalthat is unrivaled by any other competitor. Today, it has
production sites in seven locations in Japan, including Yao in
Osaka Prefecture and Unnan in Shimane Prefecture. Althoughmulti-location operations have some cost inefficiencies, they leadto greater stability of management. With its equipment andmachinery, including in-house design facilities, Nihon Kolmar
accommodates all kinds of production needs, from small lots tomass production, in a stable and flexible manner. While many
OEM/ODM manufacturers specialize in development andmanufacture in specific domains, Nihon Kolmar is the only
company of its kind to handle all categories of cosmetic products,
including skin care, makeup, hair care, body care, andfragrances. Its R&D staff account for approximately 15% of thecompany’s entire workforce, and the R&D headcount iscomparable with some of the major cosmetics brandmanufacturers. The R&D staff wear the same kind of workwear
as the factory floor workers instead of white lab coats so that they
can go to the production floor at any time. Nihon Kolmar also hasa marketing department, a rarity among contract-only
manufacturers, in which marketing staff who have transferredfrom the R&D department propose products from the developer’s

perspective, taking market trends and consumer tastes into
account. It sends 1,000 SKUs of new products into the market
every year.
By establishing production and R&D frameworks that arecapable of accommodating client company corporate customers’
every need, it has built up a customer base of some 350-400
companies, including major Japanese and overseas
manufacturers. In the year ended March 2020, it recorded net
sales for Nihon Kolmar alone of about JPY47 billion, increasing
its revenue for the 16th consecutive year.

Also meeting the needs of local companies overseas
Establishes operations in Vietnam with sights on
Southeast Asian market
While building firm foundations in Japan, Nihon Kolmar has
also expanded into overseas markets from an early stage.
“Around 1970, when we were still only the size of a small,neighborhood factory, our spirit of challenge led us to start
exporting to the Philippines and Thailand. I understand that,
because finished products attracted high tariffs, the raw
materials would be prepared to a certain stage before being sent
to those countries, where they would be made into the finishedproduct,” recounts President KANZAKI.
From the 1990s, it started building production plants overseas
and launched its global expansion with OEM/ODM in earnest.
After learning that South Korea, which had previously had tightrestrictions, would be permitting OEM of cosmetics, itestablished Korea Kolmar Co., Ltd. with a local partner in 1990.
As a pioneer OEM/ODM company, it proceeded to capturebusiness from Korean cosmetics manufacturers and opened up
the market in that country.
In the mid-1990s, it began researching the possibility ofentering the Chinese market. “We heard from companies that
had entered the Chinese market before us that pressure fromshareholders was so strong in China that, unless we had awholly-owned subsidiary, it would be impossible to maintaincorporate governance, so we awaited our chance.” In 1997,
when restrictions on foreign capital were eased and it became
possible for foreign entities to have 100% ownership, itestablished a subsidiary, Kolmar Cosmetics (Suzhou) Co., Ltd.,in Suzhou, Jiangsu Province. In addition to Chinese cosmetics
manufacturers, it captured OEM/ODM demand from companies
in Hong Kong and those that had entered the market from otherindustries.

Following Korea and China, from the mid-2010s, Nihon
Kolmar next set its sights on the rapidly growing Southeast Asianmarket. It determined that, given the similarities in skin types with
the Japanese and the high degree of trust in Japanese products,
it would be easier to establish a good reputation in that market.
“Over several years, we researched the individual markets of theSoutheast Asian region and the Indian market and, taking into
account factors such as the living environment for Japanese staff
to be posted there and the national character of the local populace,in 2017, we chose to locate our base of operations in Vietnam.”
In 2018, Kolmar Vietnam Co., Ltd. (KVCL) was establishedand the decision was made to build a factory on the outskirts of
Ho Chi Minh City. Nihon Kolmar had met and had associatedinformally with JBIC at business association meetings and thelike in the past, so it decided to use joint finance with them andSumitomo Mitsui Banking Corporation.
“This was the first time we had done business with JBIC, but it
proved very useful, as we were able to obtain the kind of
information that could only come from a bank that had abundant
experience in overseas loans. As our excellent partner, we lookforward to receiving their support in areas besides financing.”
Construction of the Vietnam factory is already complete.
Production will commence once the permits and approvals,
including a Certificate of Eligibility for Cosmetic Manufacturing,
have been obtained. Armed with the OEM/ODM skills andexpertise it has refined over many years, the company hopes toventure into the Southeast Asian market and make even further
leaps forward.

Nihon Kolmar Co., Ltd.
Head OfficeNissei Fushimimachi Main Bldg.,4F
4-4-1, Fushimimachi, Chuo-ku, Osaka, 541-0044, Japan
URL: https://www.kolmar.co.jp/english/
Employees
2,087(as of March 2020)
Sales Volume
JPY47.037 billion（Year ended March 2020; Nihon Kolmar(unconsolidated))
Business Lines[1] Private Label Cosmetics R&D/Contract Manufacturing[2] Private Label Quasi-Drug R&D/Contract Manufacturing[3] Distribution of Materials related to Items 1 and 2[4] Import and Distribution of Foreign Cosmetics/Toiletries, and Pertinent
Sub-Materials[5] Technical Services and Material Export to Overseas Cosmetics Manufacturers[6] Merchandising Health Foods & Beverages, and Soft Drinks[7] Manufacture and Distribution of Plastic Products

9Project Frontline
Our People and Their WorkJBIC is engaged in an array of different projects in various parts of the world.
JBIC’s leaders talked about their work on the front lines, their commitment toprojects, and what they find most appealing as professionals in theirrespective fields.

Generating momentum and sense of unity are
essential to international negotiations

Director, Division 3, New Energy
and Power Finance Department II

Our team was engaged in providing

Japan to propose a development plan for

finance for a real estate complex

the project, which would serve as a model

development by the Kajima Group in

for public land development throughgreenhouse gas emissions, but after the

instability, but its operations are divided

Myanmar. Myanmar has been achieving

public-private partnership. This eventually

establishment of the Global Facility toamong other locations, such as Colombia

steady economic growth since its transition

led to the adoption of a proposal by the

Promote Quality Infrastructure Investment

and Peru. So, as well as having to coordinate

to civilian rule in 2011. Bordered by China,

Kajima Group, which has an abundant track

for

and

wi t h m u l t i p l e l o c a t i o n s , th e n o ve lIndia, and Thailand, it is located in arecord in development projects in Asia,

Sustainable Growth (QI-ESG) in 2018, we

coronavirus pandemic further complicatedgeographically important area on both land

North America, Europe, and elsewhere.

have expanded the eligibility for finance tomatters, and ultimately, we had to conduct

and sea routes. There is strong potential for

This project is a BOT* project extending

projects that contribute to environmental

the negotiations online while working from

Myanmar’s future growth to impact greatly

for about 70 years ( 50 years after

preservation in a broader manner. This new

home. In circumstances where it is difficulton the growth of the entire Asian region, andconstruction plus two 10-year extensions).

scheme has allowed JBIC to finance a wider

to negotiate face-to-face, it is critical tothe country could really be described as a

As this is not the kind of project that is

range of projects, such as water supply andg e n e r a t e t he m o m e n t u m to r e ach

frontier market.

completed when a property is developed andwater pollution prevention, through CAF.

agreement and to move forward with a

Yankin Township in Yangon, where

sold, it requires looking closely at the futureThis is a major feature of this loan.

sense of unity with our counterparts. In

this project is planned, is an importantof Japan and Myanmar, and properly

Environmental

Preservation

Deputy Director General,
Corporate Finance Department

KATO TaroIn Latin America and the Caribbean, withaddition to aiming towards a predefined

location where business, housing, andidentifying and examining how the project

rapid economic growth and urbanization,

signing date from an early stage, whenadministrative functions are concentrated.

should be positioned and tackled as part ofthere has come the need to develop

CAF’s President and CEO visited Japan

With

urban

the company’s long-term strategy. After“To

infrastructure such as water and sewage

and met with the Deputy Governor of JBIC,

development

futuremultiple discussions with the Kajima Group,

expanding into frontier markets,” “Tosystems and energy. Water supply andwe agreed the importance of this project

economic progress, the Government of

we confirmed that their project had been

support infrastructure projects that arewater pollution prevention projects are notfor both organizations, thus fostering

Myanmar requested the Government of

meticulously designed with a vision thathighly important on the policy front,” andonly meaningful from an environmental

awareness between us and our counterparts

took the interests of all stakeholders into

“To further promote global environmental

perspective, but also are crucial in

about making mutual efforts toward theaccount, in addition to the general realpreservation.” Above all, we could sense

improving quality of life in the local

early achievement of our goals.

estate development plan. With a key

from the Kajima Group’s proposal their

the

aim
in

of

well-ordered

anticipationof

supportJapanesecompaniesincommunity. They also contribute to the

Having said that, CAF is also a group ofconcept of “The Garden for the People,” itcommitment and passion to mobilize all ofachievement of SDGs by the individual

development finance professionals. Theirstrived to contribute to the local community,

the resources at their disposal to create thecountries in the region. My job is to support

way of negotiation is extremely rigid and itwith such things as establishing akind of urban environment that will be bestthese projects on the financial side, as wellhas been no easy task to break that down,children’s library and securing evacuation

for Myanmar and the region. We reallyasJapanesebut there are points on which we are neverzones in the event of a disaster, andwanted to contribute to the realization of thetechnologies in the field of environmental

able to compromise, such as how to respondwork

Kajima Group’s magnificent goal, so we put

I was involved in the establishment of thepreservation. It is a job I find extremelyin the event that economic sanctions

students and architect-engineers. We also

credit line for JBIC’s Global action

rewarding. Because of travel restrictions to

are imposed. While both sides made fullconfirmed that this was a project that took

for Reconciling Economic growth andsome Latin American countries, in someuse of their respective negotiating tactics,

globalENvironmental preservation ( GREEN )cases, it is quite difficult for us to be directly

ultimately, we came to a satisfactory

operations with Corporación Andina deinvolved. I believe that it is significant thatagreement on every matter and they were

Fomento (CAF). This is JBIC’s third

working through CAF in these projects has

greatly appreciative. That sense of

GREEN financing to CAF, following

enabled JBIC to help even in those regions

accomplishment in having find common

similar loans extended in 2011 and 2016.

that are more difficult to reach.

ground with your counterparts as one team

UCHINO Mika

tointroduce

outstanding

Our main focus had previously been on

CAF’s headquarters are located inprojects that are effective in reducing

Venezuela, where there is ongoing politicalis indescribable and one of the best
moments of this job.

UTSUNOMIYA Toshio, Deputy Director, Division1,
Corporate Finance Department (right) said, “Mr. KATO
accurately identified the important points for the formationof this project and gave us appropriate advice from broader
perspectives in a timely manner.”
SUENAGA Makoto (left) of the same division at the time,
added, “It is precisely because Mr. KATO provided direction
on issues where we were struggling to set the right directionthat we were able to close these negotiations successfully.”ontechnology transfer to local

environmental

preservationconsideration, such as the introduction ofand negotiations with the Kajima Group’s

the Building Energy Management Systempeople, I was able to see their passion for(BEMS), which is being used in Japan.

this project and their strong desire for our

The project matched exactly three of theactionplans

statedin

JBIC’ssupport. That was an invaluable experienceThirdfor me. Ultimately, we were most delighted

Medium-term Business Plan, namely,that we were able to meet their expectations.

*BOT (Build Operate Transfer): A form of project delivery in which a private entity is responsible for the construction, maintenance, management, andoperation of a facility, and the ownership of the facility is transferred to a public agency or other entity after the project comes to an end.

JBIC signed on March 23 a loan agreement to set up a credit line totaling up to USD200 million (ofwhich the JBIC portion is USD100 million) with Corporación Andina de Fomento (CAF). This credit

JBIC signed on March 31, 2020 a loan agreement amounting up to USD 276 million (JBIC portion)with Kajima Myanmar Holding Pte. Ltd. (KMH) in Singapore, which is invested in by Kajima

https://www.jbic.go.jp/en/information/press/press-2019/0324-013310.html

Through several visits to Myanmar andSingapore, where I had multiple discussions

Loan for Mixed Use Development Project byJapanese Company in Myanmar

Logo of Corporación Andina de Fomento (CAF)

all our energies into it.

into

Third Credit Line for CAF
under GREEN Operations
line is intended to finance, through CAF, the necessary funds for environment-related projects in the
Latin American and Caribbean member nations of CAF, as part of JBIC’s Global action for
Reconciling Economic growth and ENvironmental preservation (GREEN) operations. This loan
follows similar loans made to CAF in March 2011 and April 2016. The credit line is co-financed with
Mizuho Bank, Ltd. (lead arranger), The Joyo Bank, Ltd., The Bank of Yokohama, Ltd., The Hachijuni
Bank, Ltd., The Bank of Saga, Ltd., and The Gunma Bank, Ltd. under JBIC's Growth Investment
Facility. JBIC will also provide a partial guarantee for the co-financed portion.

10

Determining the company’s long-term
strategy is key for financing
of urban development projects

Corporation (Kajima) together with the Japan Overseas Infrastructure Investment Corporation forTransport & Urban Development (JOIN). This loan is intended to finance the real estate complex
development project by Kajima Yankin PPP Co., Ltd. (KYP), a subsidiary of KMH in Myanmar. The
project, consisting of a hotel, a long-term stay hotel, offices, and commercial facilities, is planned in
Yankin Township, Yangon, Myanmar.

Development and operation of real estate complex
consisting of hotels, offices, and other facilities

https://www.jbic.go.jp/en/information/press/press-2019/0331-013319.html

11NEWS & EVENTThe Eighth Annual Policy Dialogue Meeting
between Mexico and JBIC
Discussing cooperation in the fields of infrastructure,energy and promotion of investment in Mexico
The Japan Bank for International Cooperation (JBIC) held the 8th annual policy dialogue meeting with the Government of
Mexico in Mexico City on February 18, 2020. This annual policy dialogue meeting was organized based on the framework agreed
upon in the Memorandum of Understanding signed on February 22, 2011, with the Ministry of Finance and Public Credit of Mexico.
With the signing of the revised United States-Mexico-Canada Agreement (USMCA) in late 2019 (entered into force on July 1,2020), Mexico will face changes to existing supply chains due to stricter local procurement requirements, as well as an opportunity
for further industrial diversification.
Officials from the Government of Mexico explained the concept of the national infrastructure plan of Mexico, details of the
USMCA, the investment plans of Mexico's state-owned power company and its state-owned petroleum company, and both parties
discussed ways to strengthen their cooperation based on these areas.

United States ofAmerica

UnitedMexicanStates
Mexico City

United Mexican States
Participants of the 8th annual policy dialogue, including Dr. Herrera (Minister of Finance) and Dr. Marquez(Minister of Economy) from Mexico, MAEDA (Governor) from JBIC

Population
Approx. 126.19 million (2018, World Bank)
Area
1.96 million sq. km. (Approx. 5 times Japan)
Capital
Mexico City
Language
SpanishTotal nominal GDP 2018
USD1,223 billion (IMF)
Japan’s major exports to Mexico
Automotive components, automobiles, steel flatroll products, etc.
Japan’s major imports from Mexico
Electric equipment, scientific optical instruments,
pork, etc.
Information from Ministry of Foreign Affairs unless otherwise noted.

The meeting was a forum for enthusiastic sharing of information and exchanges of opinions.

Visit the address below for Topics about this matter
https://www.jbic.go.jp/en/information/topics/topics-2019/0326-013320.html
JBIC Today September 2020
【Published by】Press and External Affairs Division, Corporate Planning Department,
Corporate Planning Group, Japan Bank for International Cooperation
4-1, Ohtemachi 1-chome, Chiyoda-ku, Tokyo 100-8144, Japan
Cover photo : iStock*No part of this magazine may be reproduced without the written permission of JBIC.

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