Analysis of EU-Japan businesscooperation in third countries

Masami MARBOT
April 2020

About the EU-Japan Centre for Industrial Cooperation
The EU-Japan Centre for Industrial Cooperation (http://www.eu-japan.eu/) is a unique venture
between the European Commission (Directorate-General for Internal Market, Entrepreneurshipand SMEs, “DG GROW”) and the Japanese Government (Ministry of Economy, Trade andIndustry, “METI”). It aims at promoting all forms of industrial, trade and investment cooperation
between the EU and Japan and at improving EU and Japanese companies’ competitiveness andcooperation by facilitating exchanges of experience and know-how between EU and Japanesebusinesses. The EU-Japan Centre has its head office in Tokyo and an office in Brussels.
This report has been conducted as part of the MINERVA Market & Policy Intelligence Programmeof the EU-Japan Centre for Industrial Cooperation.
The first version of this report has been completed on 10 April 2020. This document is a second
version that has been completed on 23 April 2020, and which includes some additional
information on the characteristics of business cooperation (Part 2.2.).

About the author
Masami Marbot is a Master of Public Policy candidate, majoring in public
administration, at Sciences Po Paris, France, class of 2021. Prior to the
MINERVA Programme, Masami Marbot has worked at L’Oréal Group in France,
Institutional Affairs Department, as well as at French Government Agency
Business France in China, in the Tech, Services and Aeronautics Department.
The author can be reached via LinkedIn or by email at mmarbot@hotmail.fr .

Disclaimer and Copyright
The information contained in this publication reflects the views of the author and not necessarily
the views of the EU-Japan Centre for Industrial Cooperation, the views of the EU Commission or
the Japanese authorities. This report does not constitute legal advice. While utmost care wastaken to check and translate all information used in this study, the author may not be held
responsible for any errors that might appear.
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Executive Summary
Cooperation between European and Japanese companies in third markets is a growing
and promising business trend. For example, a study conducted by the German Chamber ofCommerce and Industry in Japan in 2019 reveals that 69% of German companies in Japan are
involved in business activities with Japanese partners outside Japan, a number being on aconsistent increase from 64% in 2018 and 54% in 2017. In addition, 46% of German companies
in Japan are generating revenues with Japanese customers outside Japan at least to the same
extent as in Japan, and depending on the industry, this revenue ratio is 1 to 4. Indeed, suchcooperation allows European and Japanese companies to better compete as they may possess
complementary strengths in technologies, market intelligence, financing, existing infrastructuresand facilities – notwithstanding historical and cultural ties between several EU member states, orJapan may have in Africa, Southeast Asia, and Latin America.
Cooperation between European and Japanese companies in third markets is also the
backbone of EU-Japan Connectivity. In itself, such business cooperation has high political stakes
as it advances common values and principles of freedom, democracy, and open markets. Even
further, the cooperation of European and Japanese companies in third countries also defends
and promotes globally high social, environmental and technological standards. This comes asincreasingly strategic facing assertive Chinese and United States foreign and economic
diplomacy, especially with regard to their respective Belt and Road Initiative and Blue Dot Network.
Against this background, this report aims to provide an overview of the current situation,
notably through a review of 30 case studies. Although it appears that there is great potential in avariety of industrial sectors and third markets, Japanese corporate and institutional demand forthird country business cooperation seems to be particularly high in the power sector and inparticular in renewables, in developing countries and more specifically in Africa. Besides,
Japanese interest also appears important in smart cities in ASEAN, and in particular digital (suchas IoT and AI) applied to dimensions of mobility, governance and quality of life.
If general recommendations for any business cooperation prevail for European andJapanese companies, two highlights can be made. The first is that privileged stakeholders for any
European company looking for Japanese partners for overseas projects are the Japanese general
trading companies: they are intermediaries, managing and taking charge of orders fromcontractors; but also financing coordinators, as well as considerable investors. The second is thatthe recent shift of Japanese companies to a strategy of open innovation, in particular in theindustries of telecommunications, automotive, electronics and railway, is also an important
window of opportunity for European companies.
As for trade promotion organisations, this report suggests three priorities to enhancefurther EU-Japan business cooperation in third countries. The first is the promotion of the benefits
and opportunities of such cooperation to relevant EU, Japan and third countries’ institutional andcorporate stakeholders. The second is the support of the matchmaking of businesses of all sizes,
with different strategies proposed according to the situations in which companies are. Lastly, afocus should be made on reinforcing institutional cooperation to align interests and third-country
business strategies, as well as and coordinate mobilised resources and initiatives.
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Table of Contents
Executive Summary ................................................................................................................. 3
List of tables and figures ......................................................................................................... 5
List of abbreviations ................................................................................................................ 7
1. Introduction .......................................................................................................................... 8
1.1 Context ............................................................................................................................. 8
1.2. Aim of the research and problem statement ...................................................................11
1.3. Methodology ...................................................................................................................11
2. ANALYSIS OF THE OVERALL TREND ...............................................................................142.1. Case studies ...................................................................................................................162.2. Characteristics of cooperation ........................................................................................61
2.3. Drivers for cooperation ...................................................................................................70
2.4. Cooperation schemes .....................................................................................................78
2.5. Challenges .....................................................................................................................81
3. OPPORTUNITIES .................................................................................................................84
3.1. Third-market strategies ...................................................................................................85
3.2. Infrastructure and Development......................................................................................95
3.3. Japanese general trading companies ...........................................................................100
3.4. Japanese companies and Open Innovation ..................................................................101
4. RECOMMENDATIONS .......................................................................................................105
4.1. Recommendations for the EU-Japan Centre for Industrial Cooperation and otherorganisations .......................................................................................................................105
4.2. Recommendations for businesses & Best practices .....................................................124
Acknowledgments ................................................................................................................126
References ............................................................................................................................127
ANNEX 1: Complementary list of case studies ...................................................................135
ANNEX 2: Implementation of the EU-Japan Interinstitutional Working Group .................137

4

List of tables and figures
List of Tables
Table I. List of case studies .......................................................................................................18
Table II. Project details of the JV “Heolios EnTG” (Source: Tokyo Gas and ENGIE) .................42
Table III. Ambitions of Japanese companies for overseas expansion by country and region(Source: JETRO) ......................................................................................................................67
Table IV. Achievements and current status of third country alliances between governments andgovernment agencies – as of 17 October 2018 (Source: Japanese Government) .....................92
Table V. Global Startup Ranking: Top 30 Countries (Source: StartupBlink) ............................102
Table VI. Contrasting Principles of Closed and Open Innovations (Source: Henry Chesbroughand Jason M. Eichenholz) .......................................................................................................103
Table VII. Top 20 Japanese Companies Embracing Open Innovation selected by startups(Source: Innovation Leaders Summit Executive Committee, METI) ........................................104
Table VIII. Mapping of relevant governmental institutions for EU-Japan business collaborations inthird countries .........................................................................................................................120
Table IX. Mapping of relevant non-governmental organisations for EU-Japan businesscollaborations in third countries ...............................................................................................121
Table X. Complementary list of case studies ...........................................................................135
Table XI. Institutional stakeholder mapping for the EU-Japan Interinstitutional Working Group...............................................................................................................................................139
List of Figures
Figure 1. Expansion of business activities in 53 out of 54 African countries thanks to theacquisition of CFAO by Toyota Tsusho (Source: Japanese Institute for Overseas Investment).58
Figure 2. Country Origin for Promising Third-Country Alliance in Africa, for Japanese companies(Multiple Answers) (Source: JETRO) .......................................................................................62
Figure 3. Japanese subsidiary of German companies’ involvement in projects/business activities
with Japanese partners outside Japan in 2019 (Source: AHK Japan) ......................................64
Figure 4. Regions in which projects are planned, currently in progress or have already been
carried out between German and Japanese companies in 2019 (Source: AHK Japan) ............66
Figure 5. Geographical distribution of identified business cooperation of French and Japanesecompanies in third countries (Source: French Embassy in Japan) ............................................66
Figure 6. Sectorial distribution of identified business cooperation of French and Japanesecompanies in third countries (Source: French Embassy in Japan) ............................................68
Figure 7. Geographical distribution of identified business cooperation of French and Japanesecompanies in third countries (Source: French Embassy in Japan) ............................................69
Figure 8. Perceived investment environment risks (multiple answers) for Japanese companies forbusiness in Africa (Source: JETRO) ..........................................................................................745

Figure 9. Japanese subsidiary of German companies’ main reasons for involvement in thirdcountry projects with Japanese companies (Source: AHK Japan) ............................................75
Figure 10. Perceived opportunities and advantages (multiple answers) for collaboration withThird-Country Companies for Japanese companies for business in Africa (Source: JETRO) ....76
Figure 11. Challenges for overseas business for Japanese companies (Source: JETRO) ........77
Figure 12. Comparative cultural trends between startups and large companies (Source:
Accenture) ................................................................................................................................82
Figure 13. Perceived third-country companies with the most competitive relationship by Japanesecompanies for business in Africa (Source: JETRO) ..................................................................83
Figure 14. Third market strategies between market and political interests (Source: Martin Schulz).................................................................................................................................................86
Figure 15. Map of the Asia-Africa Growth Corridor project (Source: Institute for Security andDevelopment Policy) ................................................................................................................94
Figure 16. Average global infrastructure annual need, 2017-2035, in trillion US dollars (Source:
McKinsey Global Institute) ........................................................................................................95
Figure 17. Investment needs by geography, 2017-2035, in trillion US dollars (Source: McKinsey
Global Institute) .........................................................................................................................96
Figure 18. Infrastructure needs in developing countries, depending on GDP per capita (Source:
JBIC, from Mizuho Financial Group) .........................................................................................97
Figure 19. Investments needs over 2016-2030 in Asia, in trillion US dollars (Source: ADB) ......98
Figure 20. Market value of Japan’s seven sogo shoshas in 2019 (Source: Forbes) ................101
Figure 21. Presence and motivations for open innovation policy in surveyed companies (Source:
Rie Fujisawa) ..........................................................................................................................102
Figure 22. Recommendations for the implementation of an EU-Japan Third Market Business
Helpdesk .................................................................................................................................105
Figure 23. Visuals from the web page on UK-Japan Collaboration for 3rd Country Infrastructure
Development (Source: British Market Council) ........................................................................109
Figure 24. Visuals from the brochure on UK-Japan Collaboration for 3rd Country Infrastructure
Development (Source: Department of International Trade, Third Country Business Team) .....110
Figure 25. Visuals introducing China’s third-market cooperation strategy (Source: NDRC) .....112
Figure 26. Visuals on China’s third-market cooperation success stories (Source: NDRC) .......114
Figure 27. Required company support for Japanese companies for business in Africa (Source:
JETRO) ...................................................................................................................................123
Figure 28. Japanese companies’ opinion on whether more Japanese government support should
be given for business in Africa (Source: JETRO) ...................................................................123
Figure 29. Some key principles on France-Japan collaboration in third party countries (Source:
Pierre Mustiere) ......................................................................................................................125
Figure 30. Implementation of the EU-Japan Interinstitutional Working Group ..........................138

6

List of abbreviationsAAGC
AHK Japan
ADB
AFD
ASEAN
BDN
BRI
CIS
DIT
EU
EBRD
ECFR
EIB
EIF
EPA
EPC
FTA
FY
IT
IoT
JBIC
JETRO
JICA
JV
METI
MW
MOFA
MoU
NEXI
ODA
O&M
PPP
R&D
SDGs
SME
TICAD
UAE
UK
UKEF
US
WTO

Asia-Africa Growth Corridor
German Chamber of Commerce and Industry in Japan
Asian Development Bank
French Development Agency
Association of Southeast Asian Nations
Blue Dot Network
China’s Belt and Road Initiative
Commonwealth of Independent States
UK Department of International Trade
European Union
European Bank for Reconstruction and Development
European Council on Foreign Relations
European Investment Bank
European Investment FundJapan-EU Economic Partnership Agreement
Engineering, Procurement and Construction
Free Trade Agreement
Fiscal Year (in Japan from 1 April to 31 March)
Information Technology
Internet of Things
Japan Bank for International Cooperation
Japan External Trade Organization
Japan International Cooperation Agency
Joint Venture
Ministry of Economy, Trade and Industry of Japan
Megawatt
Ministry of Foreign Affairs of Japan
Memorandum of Understanding
Nippon Export and Investment Insurance
Official Development AssistanceOperation and maintenancePublic-private partnerships
Research and Development
United Nations Sustainable Development Goals
Small Medium EnterpriseTokyo International Conference on African Development
United Arab Emirates
United Kingdom
UK Export Finance
United States
World Trade Organization

7

1. Introduction
1.1 Context
Business collaboration between European and Japanese companies does not necessarily
aim at accessing each other’s market but may also take the form of alliances for operating in third
countries. This particular scheme is supported by strong political momentum, as the EU andJapanese authorities strive to strengthen their ties in the context of increasing geopoliticaltensions and multilateral trade uncertainties.
Three landmark agreements have been reached by the EU and Japan in recent years.
The EU-Japan Economic Partnership Agreement (EPA), which was signed on 17 July 2018
and entered into force on 1 February 2019, has abolished tariffs and other trade barriers in key
sectors while reinforcing cooperation on international standards and regulatory convergence. The
EU-Japan Strategic Partnership Agreement (SPA), also signed on 17 July 2018 and legallybinding, focuses on the political dimension of the EU-Japan relationship with a commitment toshared values such as democracy, the rule of law, human rights and fundamental freedoms.
Additionally, the agreement calls for cooperation on the issues of security and justice, and in
addressing global challenges such as terrorism, climate change, cyberspace, or nuclear
proliferation. Then, on 27 September 2019, Prime Minister Shinzo Abe and President of theEuropean Commission Jean-Claude Juncker signed the Partnership on Sustainable
Connectivity and Quality Infrastructure between the European Union and Japan,
representing a major step forward for the EU and Japan to increase cooperation with partner third
countries.
What is connectivity? Connectivity is defined by the European Commission as being“essentially about networks,” and can be appreciated according to three dimensions: physical,
institutional, and people-to-people connectivity. Physical connectivity focuses on enhancing
transportation infrastructures, digital and energy networks and flows, and as such, has a key
economic and industrial dimension. Then, institutional connectivity revolves around theconvergence of values and standards on the facilitation of free and fair trade and investment, butalso to social and environmental criteria, and in particular of the United Nations’ Sustainable
Development Goals (SDGs). Finally, connectivity has at its core a people-to-people dimension,
the latter mainly addressing cooperation in the fields of education and research. 1
Why is connectivity important? The rationale for these agreements, and in particular of
the Connectivity Partnership, is to develop further what the EU and Japan can do together on the
global scene, following common ambitions in securing new markets and trade routes in third
countries. This mutual interest is twofold. First, alliances of European and Japanese companies
allow them to better compete by joining forces. They may possess complementary strengths intechnologies, market intelligence, financing, infrastructures, and facilities – notwithstanding
historical and cultural ties between several EU member states, or Japan may have in Africa,
1 European

Commission, Explaining the European Union’s approach to connecting Europe and Asia, 19 September 2018,
MEMO/18/5804, https://ec.europa.eu/commission/presscorner/detail/en/MEMO_18_5804 (accessed 14 January 2020).

8

Southeast Asia, and Latin America. Then, another objective of this EU-Japan enhanced
cooperation is to advance common values and principles of freedom, democracy, and open
markets. Even further, such cooperation also aims to strategically defend and promote globallyhigh standards in key areas such as sustainability, the guarantee of human rights, and digitalrules on key technologies such as 5G, artificial intelligence, and facial recognition.
EU-Japan connectivity has a crucial geopolitical dimension. In January 2016, theEuropean Council on Foreign Relations (ECFR) think tank published a collection of essays titled:“Connectivity Wars: Why Migration, Finance, and Trade are the Geo-Economic Battlegrounds ofthe Future.” 2 In its introductory remarks, Mark Leonard explains: “the wall between economics
and politics has fallen, and political conflicts are fought through the system that manages theglobal economy.” The Director of the ECFR then highlights three new “battlegrounds” which fallwithin the realm of connectivity: “economic warfare”, including trade, access to finance, andinvestment; “weaponizing of international institutions” characterized by the deadlock of several
multilateral institutions such as the World Trade Organization (WTO) and the trend for exclusive“mini-lateral” groupings; 3 and lastly “infrastructure competition.”
China and the United States (US) have already seized the strategic importance ofconnectivity. As for China, it is pursuing a gigantic global development strategy under its Belt andRoad Initiative (BRI) launched in 2013. The project aims to enhance regional connectivity throughinfrastructure and funding, aiming to “link China to cities as far as Bangkok and Budapest”. The
BRI includes: “hard infrastructures such as railways, highways, ports, pipelines, industrial parks,
border custom facilities, and special trade zones; and soft infrastructure such as development
finance, trade, and investment agreements, and multilateral cooperation forum.“ According to the
OECD: “BRI investment projects are estimated to add over US dillars 1 trillion of outward funding
for foreign infrastructure over the 10-year period from 2017.” 4 5 As for the US, it is leading theBlue Dot Network (BDN), to which Australia and Japan are also participating, and which has beenlaunched on 4 November 2019 at the Indo-Pacific Business Forum in Bangkok. The BDN is acertification program for big infrastructure projects, aiming to “serve as a globally recognizedsymbol of market-driven, transparent and financially sustainable development projects” forcountries, companies and local communities. Its vision is based on the G20 Principles for Quality
Infrastructure Investment, the G7 Charlevoix Commitment on Innovative Financing forDevelopment, and the Equator Principles. 6 7

European Council on Foreign Relations, Connectivity Wars: Why Migration, Finance and Trade are the Geo-Economic Battlegroundsof the Future, January 2016, London, https://www.ecfr.eu/page/-/Connectivity_Wars.pdf (accessed 5 March 2020).
3 Mark Leonard refers on this point to the essay “gated globalization” of Hina Rabbani Khar.
4
European Council on Foreign Relations, Connectivity Wars: Why Migration, Finance and Trade are the Geo-Economic Battlegroundsof the Future, January 2016, London, https://www.ecfr.eu/page/-/Connectivity_Wars.pdf (accessed 5 March 2020).
5
Chapter 2 from the 2018 edition of the OECD Business and Financial Outlook, “China’s Belt and Road initiative in the global trade,investment and finance landscape,’ p3. Accessed at : https://www.oecd.org/finance/Chinas-Belt-and-Road-Initiative-in-the-globaltrade-investment-and-finance-landscape.pdf
6
U.S. Department of State, “Blue Dot Network,” U.S. Department of State website, https://www.state.gov/blue-dot-network/ (accessed
5 March 2020).
7
Japan Times Editorials, “A ‘Michelin guide’ to infrastructure in Asia,” The Japan Times, 13 November 2019,https://www.japantimes.co.jp/opinion/2019/11/13/editorials/michelin-guide-infrastructure-asia/#.XmBUlJMzb-Y (accessed 5 March
2020).
29In light of this, how does the Connectivity Partnership between the EU and Japan aim
to support connectivity? First, the agreement states that “the EU and Japan endeavour toensure synergies and complementarity between their respective cooperation on connectivity andquality infrastructure with partner third countries and coordinate action”. It aims to address “alldimensions of connectivity” as defined above (art. 2 and art. 3) and underlines a regional focus
on “the Western Balkans, Eastern Europe, Central Asia, Indo-Pacific, as well as Africa.” (art.2).
Furthermore, the Connectivity Partnership calls for a bilateral and multilateral cooperation,
including within international and regional bodies on regulatory matters, “with respect for theachievement of the EU-Japan Economic Partnership Agreement as a model of high standards
rules in the 21st century for free, open, rules-based and fair trade and investment, and policy
coordination for boosting innovative technology” (art. 4). Lastly, the EU and Japan announced
their “inten[tion] to cooperate to facilitate financing of sustainable connectivity, including throughjoint projects, with the engagement of private together.” (art. 5) Concurrently, the Connectivity
Partnership welcomes the Memoranda of Understanding (MoU) already concluded between theEuropean Investment Bank (EIB) and the Japan International Cooperation Agency (JICA), EIB
and the Japan Bank for International Cooperation (JBIC), and the EIB and the Nippon Export andInvestment Insurance (NEXI). 8
Against this background, benefiting from a favourable political agenda from the authorities,
the impetus for European and Japanese companies to boost collaborations in activities overseas
is strong. Cases of such collaborations are already plentiful, as they reflect the internationalisationof European and Japanese companies in an increasingly globalised world. This report aims toanalyse and discuss this growing trend to provide some suggestions on how to encourage further
such partnerships, ultimately aiming to enrich the general reflection towards the better
operationalization of the Connectivity Partnership.
Although this report has been commissioned by the EU-Japan Centre for Industrial
Cooperation and thus, primarily serves its internal interests, it addresses a great variety of
institutional and corporate stakeholders. To begin with, this report can be of interest to
governmental and non-governmental trade promotion organisations. Such organisations include
national or EU public departments and agencies working on topics related to trade and/or EUJapan relations, industry and trade associations, and chambers of commerce. Besides, this report
may also hold business’ attention by providing an overview of past examples of such cooperation,
as well as some key points on the institutional framework sustaining cooperation in third countries.
The targeted audience is mainly European and Japanese, but also of third countries from theperspective of encouraging a true three-party beneficial cooperation.

“The Partnership on Sustainable Connectivity and Quality Infrastructure between the European Union and Japan,” signed on 27
September 2019, European External Action Service (EEAS) website, https://eeas.europa.eu/headquarters/headquartershomepage/68018/partnership-sustainable-connectivity-and-quality-infrastructure-between-european-union-and_en (accessed 5
November 2019).
810

1.2. Aim of the research and problem statement
This report aspires to provide a better understanding of the current situation in terms of EU-Japanbusiness cooperation in third countries. Ultimately, the report aims to determine what theopportunities are for European and Japanese companies and propose key measures fororganisations such as the EU-Japan Centre for Industrial Cooperation to support and toencourage those partnerships, in line with identified business needs.
The research questions and the parameters this report attempts to address are:•

What are the characteristics of the companies involved in the collaboration? In whichcountry is their head office registered? What is their size? Other from European andJapanese businesses, is there a potential third-party company involved in the partnership?

•

What are the characteristics of the partnerships? In which form of collaborations the
projects are conducted? When and in which country are they operated? In which industrial
sector the business partnership occurs? Was the partnership successful?

•

What are the business needs and the drivers and rationale for such collaboration?
What is the magnitude of the current trend? To which extent do enterprises rely on aprevious relationship between the parties involved? As those partnerships are designed
to enhance each parties’ competitiveness, to which extent are they motivated by technicalcomplementarities, strategies to reduce costs, or sharing market intelligence?

•

How to encourage and support partnerships of European and Japanese businesses for
operating in third countries? What are the opportunities for businesses, including in termsof sector or third markets? What are the challenges and best practices for suchcollaboration to be successful? What roles and services an organisation like the EU-Japan
Centre for Industrial Cooperation could offer to facilitate such alliances?

1.3. Methodology
1.3.1. Definitions and scopeThis research has been carried out between November 2019 and April 2020.
A “Japanese company” has been defined as registered and possessing headquarters inJapan. A “European/EU company” has been defined as a company registered and possessing
main headquarters in a country participating in “COSME,” the EU programme for thecompetitiveness of enterprises and SMEs. COSME countries include EU member states that are,as of April 2020: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czechia, Denmark, Estonia, Finland,
France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta,
Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden. Furthermore,
the COSME programme also includes non-EU Participants that are, as of April 2020: the United
Kingdom, Montenegro, North Macedonia, Turkey, Albania, Serbia, Bosnia and Herzegovina,
Kosovo, Moldova, Armenia, Ukraine and Iceland. “Third country” has been defined as any country11

in which business operations occur other than Japan, or the European country of origin of theEuropean partner company. When subsidiary companies were involved, the country ofheadquarters of their parent company was taken into account.
The appreciation of business size has been made according to the definition of SMEs
provided by the Commission Recommendation of 6 May 2003. According to the latter, a SMEs isdefined as employing less than 250 persons, having an annual turnover of no more than EUR 50
million, or a balance sheet total up to EUR 43 billion. 9 Other companies have been considered aslarge enterprises. However, the reader should be aware that this report refers to several studies
conducted by Japanese entities which usual rely on different appreciation of business size as
defined in Japan’s Small and Medium-sized Enterprise Basic Act. 10 The industrial sectors
covered by this report are transportation, waste & water management, energy, IT &telecommunications, machinery & industrial equipment, construction, wholesale & retail trade.
This report distinguishes different forms of cooperation between European, Japanesecompanies, and a potential third-party. Although, a great diversity of terms is utilised in eachlanguage to define such relationship, and that sometimes cooperation may be multi-level andmulti-dimensional, this study has attempted to classify business cooperation according to thefollowing categories:

9•

A collaboration is a form of cooperation that is not necessarily bound through a legal
contract. Two or more companies collaborate when they share common interests in acertain area of activity. The term “collaboration” has thus often been used in this report asa default term for any relationship between European and Japanese companies.
Collaborations are sometimes formalised in a document such as Memorandum ofUnderstanding (MoU).

•

A partnership is the broadest term in defining a legal contract between two or morecompanies, whereby two or more companies agree to pursue a certain set of objectives
while remaining independent organisation. Such a relationship may induce thatparticipating companies share risk and responsibility. For this research, “partnership” hasbeen considered as a synonym to “alliance.”•

A joint-venture is a third company made by the investment of two (or more) companies.
The investing companies share the ownership of the new company and manage it(depending on the share of investment) together, as well as responsibility and risk.

•

A consortium is an association of two or more companies by which parties pool theirresources as needed for achieving a set objective. Aside from the consortium, they retain
their separate legal status.

•

An investment is a form of cooperation under which one company invests in anothercompany to expand certain activities such as business development or research anddevelopment (R&D). This financial outlay comes with a risk and uncertainty in how much
returns will be or how long the returns will take.

For reference: https://ec.europa.eu/eurostat/web/structural-business-statistics/structural-business-statistics/sme
For reference: https://www.chusho.meti.go.jp/sme_english/outline/08/01_01.html

10

12

•

An acquisition is a situation in which one enterprise buys all of the stock of another, so
as the acquired company becomes a subsidiary of the acquiring company. This
purchasing of stocks tends to happen gradually and may happen over several years.

•

A contractor/supplier relationship is a form of cooperation in which the first, thecontractor, is designated by a client in charge of completing construction work, and thesecond, the supplier, is chosen by the contractor to support the project.
1.3.2. Analysis methodology

This research has been carried out through deskwork and discussions with corporate andinstitutional stakeholders. 11 The analysis is primarily qualitative: it relies on a review of selectedbusiness cases combined with a study of secondary sources. The latter originate fromorganisations such as government-affiliated organisations related to industrial, trade, andinvestment cooperation, chambers of commerce and industry, and business associations.
Sources consisted of articles of newspapers and communication from such entities, including
reports, press releases, websites, public interventions, written and verbal exchanges.
Limits to this study include that sources related to business partnerships, may they stemfrom companies or other organisations, predominantly focus on portraying successful cases. It
thus made it difficult to assess possible negative aspects or challenges encountered in thepartnerships. Another bias that might have arisen from this study is that it could solely rely on
information disclosed publicly. It thus sets aside partnerships deemed highly strategic or
sensitive in terms of business strategy or link with governments. Lastly, the study might probably
be biased by the languages the author as a command of – that are English, French, andJapanese – and that may have restricted the author’s access to some valuable resources.
Notwithstanding, a core challenge to this research was the absence ofcomprehensive quantitative data. Indeed, this report remains a preliminary work to offer a real
overview of the dynamic of EU-Japan business cooperation in third countries. We hope it will
open the door to more extensive research on the topic to enable a true understanding of
this trend, and support for decision-making. In this regard, the surveys conducted by theGerman Chamber of Commerce in Japan (AHK Japan), and the Japan External Trade
Organisation (JETRO), Middle East and Africa Division, Overseas and Research Department,
and to which this report extensively refers to, can be a great source of inspiration for further workon the topic. 12 13 Similarly, the mapping and data compiled by the Sustainable Development
Division of the Tokyo Regional Economic Service of the French Embassy in Japan is also a

As for corporate stakeholders, a total of 10 companies have been interviewed by the author with questions covering specific projects,
future ambitions, as well as suggestions for institutional support of EU-Japan business cooperation in third countries. Although suchinterviews made significant contributions to this research, the author recognizes that they remain “anecdotal” inputs. Some names ofinterviewees and their company are not disclosed in this report.
12
German Chamber of Commerce and Industry in Japan (AHK Japan) and KPMG AG Wirtschaftsprüfungsgesellschaft , German
Business
in
Japan
2019,
January
2019,
Tokyo,
https://japan.ahk.de/fileadmin/AHK_Japan/Dokumente/German_Business_in_Japan_2019_EN.pdf (accessed 7 November 2019).
13
JETRO, Overseas Research Department, Middle East & Africa Division, 2019 Survey on Business Conditions of Japanese AffiliatedCompanies in Africa (original title in Japanese: (アフリカ進出日系企業実態調査（2019 年度調査) ), 16 January 2020, Tokyo,
https://www.jetro.go.jp/ext_images/_News/releases/2020/dea99c70c5f8d086/1_0121.pdf (accessed 24 January 2020).
11

13

valuable study. 14 Finally, it is worth mentioning the Ministry of Foreign Affairs of Japan is also
currently conducting a survey on Japan-EU business collaboration in third markets.

2. ANALYSIS OF THE OVERALL TRENDIn this section, the report focuses on the general trend of EU and Japan businesscooperation in third markets. This section aims to provide an analysis of the main dynamics atplay in the cooperation, as well as their main characteristics, their drivers, and a review of thechallenges encountered by companies. This part is illustrated with a compilation of case studies.
Section summary
Several comments can be made on the characteristics of European and Japanesecompanies that engage in such cooperation. To begin with, most cases found throughout thisresearch involved companies from Western Europe and of a large size. This might be
explained by limited and biased access to information: for example, perhaps such businesscooperation might be more strategic for SMEs to the extent they would not publicly
communicate on it in general; but also perhaps such communication is not being done in alanguage understood by the author. Nonetheless, several patterns are observable.
As for the country of origin of the European companies, it seems that in most cases,
it was not immediately relevant to the extent that business cooperation remains mainly driven
by market motivations such as cost competitiveness or particular technologies. Otherwise,
when the country of origin of the European company did matter, it has been for two main
reasons. The first is in the case the latter is somehow correlated to industry specialisation,such as Germany in automotive, or Turkey in manufacturing and construction. The second
reason is the link between this European country and the third country in which the projecttakes place. This link may by cultural, historical, linguistic, but also based on present economic
and diplomatic ties, as well as development policy. This is for example particularly relevant inbusiness partnerships implicating Spanish companies in Latin America, or French companies
in French-speaking Africa.
As for the size of the companies involved in such partnerships, as a rule of thumb,business cooperation in third countries often involve large-scale infrastructure projects ofwhich by nature, the investments and the risks are more likely to be undertaken by large
companies, though SMEs may be, for example, involved as suppliers. Furthermore, businesscooperation of large-size companies and SMEs in third countries usually occur when a cashrich and large Japanese company is interested in investing in innovative technologies of

Directorate-General of the Treasury of France (in French: DG Trésor), Tokyo Regional Economic Service (in French: Serviceéconomique régional de Tokyo), Sustainable Development Division (in French: Pôle Développement Durable), “Energy Transition andSustainable
Cities:
Mapping
Franco-Japanesecooperationin
third
countries,”
15
april
2020,
https://www.tresor.economie.gouv.fr/Articles/2020/04/15/energy-transition-and-sustainable-cities-mapping-franco-japanesecooperation-in-third-countries (accessed on 23 April 2020).
14

14

a European SME, which have applications particularly tailored for a specific demand in a third
market.
There are various forms of business cooperation in which European and Japanesecompanies engage when working together in third countries. To start with, they may notnecessarily engage in a legally binding relationship. We observe, for example, that several
companies prefer to rely on a MoU to initiate and formalise business cooperation, for instancein committing to exploring opportunities together with joint bidding, or on business developmentof a certain technology or service. Then, not surprisingly, for industrial and specific projects,
European and Japanese companies will cooperate on a clear legal basis that defines risks andresponsibilities undertaken by each party, such as JV, consortia, or contractor / supplier
relationship. Last but not the least, investment and acquisition are also significant forms ofcooperation in the case that one company is particularly interested in expanding its portfolio interms of technology and geographically.
Geographically, the study of the German Chamber of Commerce and the data gatheredby the French Embassy in Japan indicates that such business cooperation seems particularlyinteresting in Asia, Europe, South America, and Africa. When asked in which regions
projects are planned, currently in progress, or have already been carried out in cooperation
with Japanese businesses, surveyed German companies answered for 59% of them
Association of Southeast Asian Nations (ASEAN) countries, 37% Greater China, 37% Europe,
20% India, 14% South America, 11% Africa. 15 As for cooperation between French andJapanese companies overseas, they occur for 35% of them in Asia-Pacific, 23% in SouthAmerica, 15% in Africa, and 13% in the Middle East, 10% in Europe and 4% in North America.
Moreover, it is also to be noted that, as for the Japanese side, if companies have particularstrengths in the Indo-pacific region, there seems to be a particular demand for cooperation with
European business counterparts in Africa in which Japanese companies have a weak
presence. This demand is also sustained by the Japanese authorities, such as the Japan
External Trade Organisation (JETRO) which has developed several initiatives to this effect.
Although this report has primarily focused on the industrial dimension of businesscooperation, the sectors in which it seems particularly relevant for European and Japanesecompanies to work together in third markets are large-scale industrial contracts includingtransportation, waste and water management, machinery and industrial equipment, andconstruction; but also raw materials, power generation and in particular renewables; andfinally in the domain of IT and telecommunications.
Business cooperation of European and Japanese companies in third countries can be
categorized in five schemes: cooperation in products and services to provide total solutions
to customers in third markets, especially in industrial projects; cooperation inengineering such as on Engineering-Procurement-Construction (EPC) contracting or joint15
German Chamber of Commerce and Industry in Japan (AHK Japan) and KPMG AG Wirtschaftsprüfungsgesellschaft , German
Business
in
Japan
2019,
January
2019,
Tokyo,
https://japan.ahk.de/fileadmin/AHK_Japan/Dokumente/German_Business_in_Japan_2019_EN.pdf (accessed 7 November 2019).

15

bidding; cooperation in investment, through for example mergers and acquisitions as well as
JV; cooperation in industry and finance combination; and last, strategic cooperation
among businesses in a wide range of areas such as Research and Development (R&D),
manufacturing or logistics. 16
Drivers for business cooperation include, first and foremost, a long-term
relationship between the partner companies, which sometimes have gradually cooperated
and built trust over several decades. Additionally, cooperation between European andJapanese companies in third countries is also, of course, driven by complementary
technologies and expertise, market intelligence and local know-how, andcorresponding human resources. Furthermore, business cooperation is also based on great
motivations of pooling risks of large-scale projects, reducing costs, by, for instance, relying
on the partner company’s local infrastructures as well as enjoying the financial contribution of
the partner company country’s public financial institutions, and in particular those from Japan.
Business cooperation may also be driven by general ambitions of expanding activities
overseas, and for European companies in strengthening the strategic importance of their
Japanese subsidiaries. The last driver for cooperation may be the relative similarities incompliance standards and corporate cultures between European and Japanesecompanies.
There are also several challenges for entering into business cooperation and jointly
conducting projects in third countries. A first is the language, culture and management
differences between the European and Japanese partner companies, which may be
aggravated by the fact that conflicts may not be judged in the light of the local legal or
mediation system, as the latter can be embryonic in certain third countries. A second
challenge is that companies might consider their counterparts as more competitors thanpotential partners - although this problem varies greatly from one sector to another.
Henceforth, companies might fear business cooperation because of too high risks in leakageof technology or strategic information, as well as introducing their counterparts to prospective
clients that ultimately, they may lose.

2.1. Case studies
30 examples of EU and Japanese business collaborations in third markets are presented
in this section. They were chosen as illustrations to reflect a certain diversity of situations in termsof the characteristics of the companies, of the partnerships and their drivers, and based on
sufficient availability of information. Cases presented are also recent ones, that are which took
place in the last 20 years. 17

16This categorisation originates from: National Development and Reform Commission, People’s Republic of China, Third-Party
MarketCooperation
Guidelines
andCases,
4
September
2019,
Beijing,
p46,
https://www.ndrc.gov.cn/xxgk/zcfb/tz/201909/W020190905514523737249.pdf (accessed 4 February 2020).
17
The selection was restricted to 30 case studies, but other examples are listed in ANNEX 1. Complementary list of case studies.

16

Examples include business cooperation in various industrial sectors and in different
business relationships. Targeted third country and regions are developing markets in Africa,
Southeast Asia, and Latin America, but also mature economies such as the US, Australia, orEurope. Nonetheless, business cases that were found mostly involve large companies, andcompanies from the Western part of Europe. This might be explained by specific industrial andfinancial strength related to company size and country origin, but also by limited access to
information.

17

Table I. List of case studies
Characteristics of the companies
Case
number

SectorJapanese company

Characteristics of the partnership

European Company

Form ofpartnership

Third
MarketYear

Details on joint
project(s)

Name

Size

Name (COUNTRY)

Size

1

Sumitomo Corporation

large

Thales SA (France)large

Consortium

Philippines

2013

Air traffic control
building andsystems2

Mitsubishi Corporation

large

Construcciones y Auxiliar deFerrocariles SA (Spain)

large

Consortium

Turkey,Australia,
Philippines

2014

Urban transport
infrastructures

3

Mitsubishi Heavy
Industries Ltd ;Mitsubishi Co. ; Kinki
Sharyo Co., Ltd

large

Thales SA (France)large

Consortium

Qatar

2015

Automated
driverless metro

4

Hitachi Ltd

large

Ansaldo STS SpA (Italy)

large

Collaboration,acquisition

Panama2018

Monorail system

MiddleEast,
Africa and
AsiaPacific2014

Desalination plantin Iraq, Sewage
treatment facility
in Vietnam

2017“Energy-fromwaste” facility

Transportation

5

6

Water & Waste
Management

Hitachi Ltd

large

Veolia Environnement SA

ITOCHU Co.

large

SUEZ SA (France)

7

Mitsubishi Corporation

8

INPEX Co. ; ITOCHU
Co.

Energy(France)large

Collaboration,
consortium

large

Joint-venture

SerbiaPortugal,
Australia,
Chile,
Qatar

2009

Renewableenergy and water
management
treatment

Azerbaijan,
Turkey,Georgia

2002

Crude oil pipeline

large

Acciona SA (Spain)

large

Collaboration,
investment

large

BP p.l.c. (UK) ; Equinor. ASA(Norway) ; TPAO (Turkey) ; Eni
S.p.A. (Italy) ; Total SA(France)large

Joint-venture

9

Sumitomo Corporation

large

ENGIE SA (France)large

Consortium

Indonesia

2010

Geothermal power
plant

10

Mitsubishi Heavy
Industries Ltd

large

Vestas Wind Systems A/S

large

Joint-venture

2013

Offshore windturbines

11

Mitsubishi Corporation ;Toshiba Plant Systems& Services Co.

Europe,Asia,
Americalarge

thyssenkrupp AG (Germany)large

Contractor/supplier

Philippines

2014

Thermal power
plant

12

Marubeni Corporation

large

Siemens AG (Germany)large

Consortium

Thailand2017

Power plant

13

Toyota Tsusho Co.

large

ENGIE SA (France)large

Joint-venture

Egypt

2017

Wind farm

14

Tokyo Century Co. ;Kyudenko Co. ; Kyuden
Mirai Energy Co.,

large

Ciel et Terre SAS (France)

SME

Investment

Taiwan2018

Floating solar
power plant

Mitsubishi Corporation

large

Electricite de France SA

large

Joint-venture

Africa2018

Investment
platform forrenewables

Energy15(Denmark)(France)

16

Tokyo Gas Co.

large

ENGIE SA (France)large

Joint-venture

Mexico2019

Onshore windfarms and solar
photovoltaic
plants17

Marubeni Corporation

large

Azuri Technologies Ltd. (UK)

SME

Investment

Africa2019

Pay-as-you-go
solar energy
equipment

18

Nippon Koei Co. Ltd

large

YUSO BV (Belgium)

SME

Investment

Europe2019

Battery energy
storage solutions
and energy
platform

19

NTT DATA Co.

large

Everis Participaciones, S.L.

large

Acquisition

Latin
America2013

Consulting intechnologicalapplications

NTT DATA Co.

large

Citibeats (Spain)

SME

Collaboration

Global2018

Citizenengagement
platform

20

IT &Telecommunications(Spain)19

Bolt Technology OÜ(Estonia); Combinostics Oy(Finland); Einride AB(Sweden); Flexound Systems
Oy (Finland); MaaS Global
Ltd (Finland)

Hondar Motor Co. Ltd ;OMRON Co. ;Panasonic Co.

large

22

ACCESS Co., Ltd

large

23

Mitsubishi Heavy
Industries Ltd

large

Rocla Oyj (Finland)

large

Acquisition

Chlorine Engineers Co.
Ltd

large

Industrie De Nora SpA (Italy)

large

Acquisition

Panasonic Co.

large

Viko Elektrik Elektronik
Endüstrisi San. ve Tic. A.Ş.

large

Acquisition

26

Toyo Kohan Co. Ltd

large

Tosyali Holding (Turkey)

large

Joint-venture

27

Taisei Co.

large

Bouygues SA (France)large

Joint-venture

Myanmar

21

24

25

IT &
Telecommunications

Machinery &Industrial
equipment

IoTerop SAS (France)(Turkey)

SME /
large

Investment

SME

Partnership(through VC
NordicNinja)

Global

2019

Innovation (esp.
mobility)Southeast
Asia

2019

Software solution

Europe2008

Manufacturing ofelectric
warehouseequipment

Asia (esp.
China)

2011

Manufacturing ofelectrode2013

Manufacturing
and sales ofwiring devices

2015

Steel
manufacturing

2017

Construction of
office, hotel andresidential towers

2018

Collaboration to
explore joint
opportunities inconstruction

MiddleEast,
CIS, 18
AfricaEurope,MiddleEast,
AfricaConstruction
28

29
30

Wholesale &Retail trade

Azusa Sekkei Co. Ltd

large

Ingérop SAS (France)

large

Partnership

Europe,Africa, Asia

Toyota Tsusho
Corporation

large

CFAO SA (France)large

Acquisition

Africa2012

Distribution in
AfricaToyota Tsusho Co.;
NYK LINE

large

Bolloré SA (France)large

Joint-venture

East Africa

2016

Vehicle logistics

The Commonwealth of Independent States (CIS) market is comprised of former Soviet Union nations. It is comprised of: Armenia, Azerbaidjan, Belarus, Kazakhstan, Kyrgystan, Moldova, Russia,
Tajikistan, and Uzbekistan.

18

20

2.1.1. Case studies in transportation
Case 1: Air traffic control building and systems in the Philippines 19 20
CHARACTERISTICS OF THE COMPANIESSumitomo Corporation

Thales SA

Size

large

Size

large

HQ

Tokyo, Japan

HQ

Paris La Défense, France

About

Sumitomo Corporation is a general
trading company. The Company
imports and exports a wide variety ofgoods such as metals, machinery,
chemicals, fuel, food products, andtextiles. Sumitomo also operates realestate,construction,
shipping,
insurance, finance, and, leasing
businesses.

About

Thalesdesignsandbuildsaerospace and defense electricalsystems. The Company offers flightdeck systems, avionics equipment,
and navigation solutions, as well as
providestelecommunications
satellites, signaling systems, and air
management
andtraffic
maintenance services.

CHARACTERISTICS OF THE PARTNERSHIP
Form of partnership

Third market

Year

Details on joint project(s)Consortium

Philippines

2013

Construction of air traffic
control building and deliveryof control systems

DETAILS ON THE PARTNERSHIPOn 24 December 2010, Sumitomo Corporation announced the company won the contract to deliver“next-generation air traffic control systems to the Philippine Department of Transportation andCommunication,” together with the Australian subsidiary of French company Thales. The contract
amounted to about 9 billion yen. However, the initial contract was turned down by the Commission
on Audit in 2011, and an amended contract was signed by both parties in March 2013.
The contract covered the “construction of a new air traffic control centre building within the Ninoy
Aquino International Airport in the Philippines, and delivery of air traffic control systems (including
systems for communications, aeronautical information processing, satellite signal monitoring, andweather) at the new air traffic control centre and major airports in the Philippines (about 25 sites).”
The modernization of the Philippines’ air traffic control system has been supported by Official
Development Aid (ODA) from the Japanese Government. Indeed, in 2002, JICA committed toprovide yen loans amounting to about 22 billion yen to the Department of Transportation andCommunication.
19
Sumitomo Corporation press release, “Sumitomo Corporation wins contract to deliver next-generation air traffic control systems to
the Philippine Department of Transportation and Communication,” Sumitomo Corporation website, 24 December 2010,https://www.sumitomocorp.com/en/jp/news/release/2010/group/20101224 (accessed 17 March 2010).
20
Airport Technology, “Philippines signs deal with Sumitomo-Thales JV to modernize aviation safety system,” Airport Technology, 3June 2013, https://www.airport-technology.com/uncategorised/newsphilippines-signs-deal-sumitomo-thales-jv-modernise-aviationsafety-system/ (accessed 17 March 2020).

Case 2: Urban transport infrastructures in Turkey, Australia and the Philippines 21

22 23 24 25

CHARACTERISTICS OF THE COMPANIES
Construcciones y Auxiliar
de Ferrocarriles SA

Mitsubishi Corporation
Size

large

Size

large

HQ

Tokyo, Japan

HQ

Beasain, Spain

About

Mitsubishi Corporation is a general
trading company. The company has
business groups such as new
business
initiatives,ITandelectronics, fuels, metals, machinery,
chemicals, living essentials, andprofessional services.

About

Construcciones y Auxiliar deFerrocarriles(CAF)
SA
manufactures railroad cars andcomponents, as well as complete
turnkey transportation systems.

CHARACTERISTICS OF THE PARTNERSHIP
Form of partnership

Third market

Year

Details on joint project(s)Consortium

Turkey, Australia,
Philippines

2014

Urban transport
infrastructures

DETAILS ON PARTNERSHIP
Mitsubishi Corporation and CAF have been collaborating in third countries in the area of urban
transportation infrastructure since 2014. Three joint projects seem to have been conducted:
In 2014, Mitsubishi Co. and CAF were awarded by the Istanbul Metro a project to supply automatic
underground units to Istanbul. The contract amounted to 119 million euros and comprised thedelivery of 21 trains made of 6 cars each.
In 2016, the Canberra Metro Consortium is awarded by the Australian Capital Territory aconcession to undertake Light Rail Transit design, construction, operation and maintenance(O&M) for 20 years in Canberra, under a public-private cooperation scheme. The consortium iscomprised of eight companies of which Mitsubishi Corporation and CAF.
In 2017, the Republic of the Philippines Department of Transportation and Communications hasawarded Mitsubishi Corporation and CAF a new rolling stock supply contract for Manila Light
Rail Transit. The contract amounted to 225 million euros and was funded through a Japanese ODA
Loan Agreement subscribed by the governments of Japan and the Philippines.
CAF press release, “Istanbul Metro Award (Turkey),” CAF website, 19 June 2014, https://www.caf.net/en/sala-prensa/nota-prensadetalle.php?e=148 (accessed 26 November 2019).
22
CAF press release, “CAF awarded the supply of Canberra trams, in Australia,” CAF website, 1 February 2016,
https://www.caf.net/en/sala-prensa/nota-prensa-detalle.php?e=182 (accessed 26 November 2016).
23
Mitsubishi Co., “Mitsubishi Co. Signs Concession for Canberra Light Rail Project,” Mitsubishi Co. website, 17 May 2016,
https://www.mitsubishiCo.com/jp/en/pr/archive/2016/html/0000030228.html (accessed 26 November 2019).
24
CAF press release, “CAF to supply 30 LRVS to Manila (The Philippines), CAF website, 20 November 2011,https://www.caf.net/en/sala-prensa/nota-prensa-detalle.php?e=232 (accessed 26 November 2019).
25
Mitsubishi Co. press release, “Mitsubishi Co. Awarded Contract to Supply Rolling Stock for Manila LRT Line-1 in the Philippines,”
Mitsubishi Co. website, 20 November 2017, https://www.mitsubishiCo.com/jp/en/pr/archive/2017/html/0000033623.html (accessed 26
November 2019).
21

22

Case 3: Qatar’s Doha automated driverless metro 26 27
CHARACTERISTICS OF THE COMPANIES
Mitsubishi Heavy
Industries Ltd

Thales SA

Size

large

Size

large

HQ

Tokyo, Japan

HQ

Paris La Défense, France

About

Mitsubishi Heavy Industries, Ltd. is acomprehensive heavy machinerymaker. The company manufacturesmachinery, ships, turbines andengines, prime movers, aircrafts, andmachine parts for military andcommercial use. Mitsubishi Heavy
Industries also researches anddevelops nuclear power plants.

About

Thalesdesignsandbuildsaerospace and defense electricalsystems. The Company offers flightdeck systems, avionics equipment,
and navigation solutions, as well as
providestelecommunications
satellites, signaling systems, and air
traffic
management
andmaintenance services.

CHARACTERISTICS OF THE PARTNERSHIP
Form of partnership

Third market

Year

Details on joint project(s)Consortium

Qatar

2015

automated driverless metro

DETAILS ON PARTNERSHIPIn a press release of 20 February 2015, Mitsubishi Corporation announced that a consortium
consisting of Mitsubishi Heavy Industries, Ltd.; Mitsubishi Corporation; Hitachi, Ltd.; The Kinki Sharyo
Co., Ltd.; and Thales received a Letter of Conditional Acceptance from the Qatar Railways Company
for a systems package for the Doha Metro.” The construction has been scheduled for completionby October 2019. NEXI has provided Export Credit Insurance covering construction andmaintenance. The package refers to the “turnkey construction of a fully automated driverless metro
system,” including “75 sets of three-car trains, platform screen doors, tracks, a railway yard, andsystems for signaling, power distribution, telecommunications and tunnel ventilation” and also
“expected to include maximum 20-year maintenance services.”
The press release then details: “Mitsubishi Heavy Industries, the leader of the consortium, will supply
the power distribution system, platform screen doors, tracks and tunnel ventilation work, and will also
undertake overall project management and system integration. Mitsubishi Corporation and Kinki
Sharyo will jointly provide the railway cars. Thales will supply the advanced Communications Based
Train Control (CBTC) signaling, telecommunications & security, integrated Operational Control
Center and automatic fare collection systems. Hitachi will perform some project management duties
and also handle facilities maintenance, including the supply of special maintenance vehicles thatcomprehensively inspect the safety of infrastructures such as railway tracks and electric train lines.”
26 Mitsubishi Corporation press release, “Five Member Consortium of Mitsubishi Heavy Industries, Mitsubishi Corporation, Hitachi,

Kinki Sharyo and Thales Receives Letter of Conditional Acceptance for Doha Metro Construction,” Mitsubishi Corporation website, 20
February 2015, https://www.mitsubishicorp.com/jp/en/pr/archive/2015/html/0000026741.html (accessed 17 March 2020).
27 NEXI press release, “Qatar/Support for Doha Metro Construction and Maintenance – Qatar’s First Subway System,” NEXI website,
20 June 2016, https://www.nexi.go.jp/en/topics/newsrelease/2016061602.html (accessed 17 March 2020).

23

Case 4: Monorail System in Panama 28 29
CHARACTERISTICS OF THE COMPANIES
Hitachi Ltd.

Ansaldo STS SpA

Size

large

Size

large

HQ

Tokyo, Japan

HQ

Genoa, Italy

About

HitachiLtd.
manufacturescommunications
andelectronicequipment, heavy electrical andindustrial machinery, and consumer
electronics. Hitachi also operates
subsidiaries in the wire and cable,
metal, and chemical industries.

About

Ansaldo STS SpA designs andimplements signalling systems andcomponents
for railway
andunderground traffic management
and control. It designs, plans andcarries out the activities required toprovide high technology for railway
and underground systems.

CHARACTERISTICS OF THE PARTNERSHIP
Form of partnership

Third market

Year

Details on joint project(s)Collaboration,acquisition

Panama2018

Monorail system

DETAILS ON THE PARTNERSHIP
Hitachi, and its subsidiary Hitachi Rail Italy Investments S.r.l. took a majority 51% stake in Ansaldo
STS in 2015, before completing the takeover of the Italian company in January 2019. Ansaldo
STS was officially renamed Hitachi Rail STS on 30 January 2019.
Hitachi and Ansaldo STS have been indeed collaborating in projects such as in providing a monorailsystem for Line 3 of Panama Metro, together with Mitsubishi Corporation, and for Metro de Panamá,
S.A. (MPSA). It was announced that an MoU between the four companies was signed on 30 August
2018. Under the latter, Hitachi would provide 28 six-car trains, while signalling, telecommunications
and power systems would be delivered by Ansaldo STS, and Mitsubishi Corporation would be incharge of commercial affairs.
The project would have received a yen-loan “to support the improvement of urban transportation
systems and efforts to combat climate change, which [would have] be allocated to civil works projects
and the procurement of the monorail system” from JICA.

Hitachi press release, “Hitachi and Mitsubishi Corporation Sign a Memorandum of Understanding with Metro de Panamá, S.A. to
Provide a Monorail System”, Hitachi website, 30 August 2018, http://www.hitachi.us/press/Hitachi-and-Mitsubishi-to-Provide-aMonorail-System-to-Metro-de-Panam%C3%A1 (accessed 3 March 2020).
29
Railway Gazette International, “Hitachi completes Ansaldo STS takeover," Railway Gazette International, 22 January 2019,https://www.railwaygazette.com/business/hitachi-completes-ansaldo-sts-takeover/47912.article (accessed 3 March 2020).
28

24

2.1.2. Case studies in water and waste management
Case 5: Desalination plant in Iraq and sewage treatment facility in Vietnam 30 31 32 33
CHARACTERISTICS OF THE COMPANIES
Hitachi Ltd.

Veolia Environnement SA

Size

large

Size

large

HQ

Tokyo, Japan

HQ

Paris, France

About

Veolia Environnement SA operates
utility and public transportation
businesses. Veolia Water Solutions& Technologies is the technology
subsidiary of Veolia Water, adivision of Veolia Environnement
focusing on water and wastewater
services and specialising in theengineering,
designandconstruction of turnkey facilities.

About

HitachiLtd.
manufacturescommunications
andelectronicequipment, heavy electrical andindustrial machinery, and consumer
electronics. Hitachi also operates
subsidiaries in the wire and cable,
metal, and chemical industries.

CHARACTERISTICS OF THE PARTNERSHIP
Form of partnership

Third market

Year

Details on joint project(s)Collaboration,
consortium

Middle-East, Africa
and Asia-Pacific2014

Desalination plant in Iraq,
Sewage treatment facility in
Vietnam

DETAILS ON THE PARTNERSHIPOn 11 June 2014, Hitachi and Veolia Solutions & Technologies announced the completion of a MoU,
settling the framework for collaboration on the joint rollout of business targeting city and sewage
treatment, seawater desalination, and other water infrastructure projects. The targeted locations
are primarily the Middle East, Africa, and the Asia-Pacific regions. Through this enhanced
collaboration, both companies aim to join forces in utilizing respective sales channels and expertisein Engineering Procurement and Construction (EPC) and O&M in the concerned regions.

Hitachi press release, “Hitachi to Promote Cooperation with Veolia Water Technologies, the World Leader in Water Treatment, on
Overseas
Water
Infrastructure
Projects,”
Hitachi
website,
11
June
2014,
http://www.hitachi.com/New/cnews/month/2014/06/140611b.pdf (accessed 18 November 2019).
31
Hitachi press release, “Hitachi and Veolia part of a consortium awarded a contract to supply the largest sewage treatment facility in
Vietnam,” Hitachi website, 9 February 2015, http://www.hitachi.com/New/cnews/month/2015/02/150209a.pdf (accessed on 18
November 2019)32
Veolia press release, “Hitachi and Veolia Win Contract to build Pretreatment Facilities for Large-scale Water Desalination Plant in
Basrah, Iraq,” Veolia website, 22 October 2014, https://www.veolia.com/en/veolia-group/media/press-releases/hitachi-and-veolia-wincontract-build-pretreatment-facilities-large-scale-water-desalination-plant-basrah-iraq (accessed on 18 November 2019).
33
John Lee, “$240m Iraq Desalination Contract,” Iraq Business News, 23 October 2014, https://www.iraqbusinessnews.com/2014/10/23/240m-iraq-desalination-contract/ (accessed on 18 November 2019).
30

25

The companies have already worked together on several other water-related projects, and the MoU
came six months after Hitachi and OTV, a subsidiary of Veolia Water Solutions & Technologies,
secured an order for a large-scale desalination plant in Iraq .Two joint projects, including the latter,appear so far to be falling within the framework of this MoU.
The first is the water desalination plant in Iraq. In January 2014, the consortium comprised of
Hitachi, Veolia and Egyptian firm ArabCo received a comprehensive order in January 2014 for EPC
on the water desalination plant as well as O&M for a period of five years. In addition, in October
2014, the consortium “received an order from the Iraqi Ministry of Municipalities and Public Works forthe engineering, procurement and construction of pre-treatment and surrounding facilities at awater desalination plant in Basrah, Iraq,” with “Hitachi and Veolia […] responsible for the design,delivery, and test operation of mechanical and electrical facilities, and ArabCo […] responsible forcivil engineering, construction, and on-site installation work.” The order amounted to about 24 billion
yen, of which 10 billion yen for Hitachi and Veolia. The completion of the construction was scheduled
for April 2017. The Japanese government has provided loan assistance to the construction ofthese pre-treatment facilities.
The second joint project pertains to the expansion of a large-scale sewage treatment facility in
Vietnam in 2015. A consortium formed by Hitachi and Veolia subsidiary OTV, together with South
Korean construction company POSCO E&C received an order from the Urban Civil Works
Construction-Investment Management Authority of Ho Chi Minh City. The contract amounted toaround 130 million US dollars. The project has been fully funded by loan assistance from theJapanese government.

26

Case 6: Energy-from-waste facility in Serbia 34 35 36 37 38 39
CHARACTERISTICS OF THE COMPANIESITOCHU Corporation

Suez SA

Size

large

Size

large

HQ

Osaka, Japan

HQ

Paris, France

About

ITOCHU Co. is a general trading firm
handling textiles, wood, machinery,
metals, food, chemicals, construction
materials, commodities, and energy
related products such as oil and gas.

About

SUEZ produces and distributes
electricity and natural gas. The
company provides environmental
services such as water treatment,
and waste management. SUEZ
offers design, construction andmaintenance of installations.

CHARACTERISTICS OF THE PARTNERSHIP
Form of partnership

Third market

Year

Details on joint project(s)Joint-venture

Serbia2017“Energy-from-waste” facility

DETAILS ON THE PARTNERSHIP
A consortium of Suez and ITOCHU, through its UK subsidiary, signed a 25-year public-privatepartnership (PPP) contract with the City of Belgrade on 29 September 2017, following a competitive
international tender organised by the city with the support of the International Finance Corporation,member of the World Bank Group. The two companies entered in cooperation under the form of a
50-50 JV called Beo Čista Energija Ltd. On 30 November 2018, Marguerite Fund 40 acquired a 20%
stake in the project company.

34
Suez press release, “The city of Belgrade chooses SUEZ and ITOCHU for a 25-year waste-to-energy project,” Suez website, 29
September 2017, https://www.suez.com/en/news/press-releases/the-city-of-belgrade-chooses-suez-and-itochu (accessed 19
December 2019).
35
ITOCHU press release, “ITOCHU has signed a waste management contract with the City of Belgrade, the First Major PPP Projectin Republic of Serbia,” ITOCHU website, 2 October 2017, https://www.itochu.co.jp/en/news/press/2017/171002.html (accessed 19
December 2019).
36
Suez press release, “Marguerite joins SUEZ and ITOCHU in their public-private-partnership with the city of Belgrade (Serbia) forthe construction and operation of modern waste management facilities,” Suez website, 30 November 2018,https://www.suez.com/en/news/press-releases/marguerite-joins-suez-and-itochu-in-their-public-private-partnership-with-the-city-ofbelgrade (accessed 19 December 2019).
37
ITOCHU press release, “ITOCHU announces the commencement of activities for public-private-partnership waste management
project with city of Belgrade,” ITOCHU website, 2 October 2019, https://www.itochu.co.jp/en/news/press/2019/191002.html (accessed
19 December 2019).
38
European Bank for Reconstruction and Development, Belgrade to get new waste management facilities, 2 October 2019,https://www.ebrd.com/news/2019/belgrade-to-get-new-waste-management-facilities.html (accessed 19 December 2019).
39
Marguerite, “About Us, Background,” Marguerite website, unknown, http://www.marguerite.com/about-us/background/ (accessed
19 December 2019).
40
The Marguerite Fund is a pan-European equity fund investing in renewables, energy, transportation and digital infrastructure. The
EIB has committed to it EUR 200 million, of which half are guaranteed by the European Fund for Strategic Investments, and the otherhalf from five National Promotional Banks.

27

The project encompasses the design, construction, financing and operation of a greenfieldenergy-from-waste (EfW) facility, a recycling facility for construction and demolition waste, theremediation of the existing dumpsite of Vinča and the development of a new sanitary landfill
for residual waste. The EfW facility aims to generate renewable electricity (30 megawatt (MW)) andheat (56MW) for households of Belgrade. According to Suez, “the project is an important milestone
for Serbia in the context of its EU accession process, as it contributes to Serbia’s compliance with EU
environmental requirements.” Furthermore, it has a development dimension to the extent that, as
stated by the European Bank for Reconstruction and Development (EBRD), it “addresses
environmental risks from one of Europe’s largest uncontrolled landfills.”
The partnership between Suez and ITOCHU was motivated by an extensive track record of joint
development and investments in “energy-from-waste” projects in the UK. Furthermore, SUEZ
advances it has been “the first company to deliver a fully project-financed waste-to-energy facility inCentral Europe under a PPP scheme […] in Poznań (Poland), which started operation in 2016.”
The project is the result of a joint investment by international lenders: 128.5 million euros provided by
the EBRD, 72.25 million euros provided by the International Finance Corporation, member of theWorld Bank group, and 35 million euros provided by Oesterreichische Entwicklungsbank, thedevelopment bank of Austria.

28

Case 7: Renewable energy and water management and treatment worldwide41 42 43
CHARACTERISTICS OF THE COMPANIES
Mitsubishi Corporation

Acciona SA

Size

large

Size

large

HQ

Tokyo, Japan

HQ

Alcobendas, Spain

About

Mitsubishi Corporation is a general
trading company. The company has
business groups such as new
business
initiatives,ITandelectronics, fuels, metals, machinery,
chemicals, living essentials, andprofessional services.

About

Acciona S.A. is a global developerand service provider of solutions inrenewable energy, large civil
infrastructures, and water treatment
and reverse osmosis desalination.

CHARACTERISTICS OF THE PARTNERSHIP
Form of partnership

Third market

Year

Details on joint project(s)Collaboration,
investment

Portugal, Australia,
Chile, Qatar

2009

Renewable energy and water
management and treatment

DETAILS ON THE PARTNERSHIP
On 3 April 2009, Mitsubishi Corporation acquired 34% equity interest in Amper Central Solar, a
company 100% owned by Acciona and in charge of developing and operating a photovoltaic projectin Amareleja Portugal. The plant required an investment of 261 million euros. This investment
marked the first collaboration between the two companies.
On 13 July of the same year, the two companies signed an MoU, agreeing to enter into “a strategic
alliance to develop and operate renewable energy projects and share innovation aimed at leading
the development of sustainable solutions worldwide.” The agreement also includes collaboration inwater management and treatment, sustainable construction and transportation; as well as atarget of two billion euros “for working together on renewable energy projects worldwide.” A press
release of Acciona details further on the mechanisms sought in order to ensure the effectiveness of
the alliance: “both partners may take equity stakes in projects or companies that fall within the joint
strategy framework or that strengthen their partnership.”

41
Tetsuji Nakagawa and José Díaz-Caneja, “Infrastructure and Collaboration, Japan-Spain, Mitsubishi Co.-Acciona,” Presentation,
25th Japan-Spain Joint Business Conference, The Japan-Spain Business Cooperation Committee and The Spain-Japan Business
Cooperation
Committee,
Tokyo,
14
April
2016,
https://www.jcci.or.jp/kokusai/Acciona.pdf;
https://www.jcci.or.jp/kokusai/Mitsubishi%20Co..pdf (accessed 17 November 2019).
42
Acciona press release, “Mitsubishi Corporation partners with Acciona by taking a 34% stake in world’s largest solar photovoltaic
plant,” Acciona website, 4 March 2009, https://www.acciona.com/pressroom/news/2009/march/mitsubishi-corporation-partners-withacciona-by-taking-a-34-stake-in-world-s-largest-solar-photovoltaic-plant/ (accessed 17 March 2020).
43
Acciona press release, “Mitsubishi Corporation and Acciona sign an international strategic alliance focused on sustainability,”
Acciona website, 13 July 2009, https://www.acciona.com/pressroom/news/2009/july/mitsubishi-corporation-and-acciona-sign-aninternational-strategic-alliance-focused-on-sustainability/ (accessed 17 March 2020).

29

Collaboration between Mitsubishi Corporation and Acciona has been motivated by complementarities
to the extent that, while Acciona has an extensive track record as an EPC contractor and a top player
in renewable and water industry, Mitsubishi Corporation profits from advanced technologies andstrong financial support by export credit agencies and lenders. Furthermore, from this cooperation,
both companies stated that Mitsubishi Corporation benefits from Acciona’s experienced capability of
EPC in third countries, and Acciona from Mitsubishi Corporation’s world-wide track record ininfrastructure investment.
Beyond the Amaraleja photovoltaic plant, it seems that five projects have been jointly conducted by
Mitsubishi Corporation and Acciona in third markets. There were two water projects in Australia, theAdelaide Desalination Plant and the Mundaring Water Treatment Plant, in which Mitsubishi
Corporation acted as an investor and Acciona as an EPC contractor, with both companies in chargeof O&M. Another project was a desalination plant for a mining group in Chile, in which Mitsubishi
Corporation acted as a developer and Acciona as an EPC Contractor. Acciona has also won twodesalination projects in Qatar as main equipment supplier and O&M for the first, Facility D and Ras
Abu Fontas A3, projects in which Mitsubishi Corporation is respectively in charge of the development
and O&M, and an EPC contractor.

30

2.1.3. Case studies in energy
Case 8: Crude oil pipeline from Azerbaijan and Georgia, to Turkey 44 45 46
CHARACTERISTICS OF THE COMPANIESITOCHU Corporation

INPEX Corporation

Size

large

Size

large

HQ

Osaka, Japan

HQTokyo, Japan

About

ITOCHU Co. is a general trading firm
handling textiles, wood, machinery,
metals, food, chemicals, construction
materials, commodities, and energy
related products such as oil and gas.

About

INPEX Co. is a holding company
managing
subsidiaries
that
explores, produces, and sells oil andnatural gas.

BP p.l.c.

Equinor ASA

Size

large

Size

large

HQ

London, UK

HQ

Stravanger, Norway

About

BP p.l.c is an oil and petrochemicals
company. The Company explores forand produces oil and natural gas,refines, markets, and supplies
petroleum products, generates solar
energy, and manufactures andmarkets chemicals.

About

Equinor ASA operates as anenergy company. The Company
develops oil, gas, wind, and solar
energy projects, as well as focuseson offshore operations andexploration services.

Turkish Petroleum
Corporation (TPAO)Eni S.p.A

Size

large

Size

large

HQ

Ankara, Turkey

HQ

Rome, Italy

About

TurkishPetroleumCo.
wasestablished as the National Oil
Company in 1954. Today, Turkish
Petroleum is merely an upstream(exploration, drilling, well completionand production) company.

About

Eni SpA explores for and produceshydrocarbons, and both produces
natural gas and imports it for salein Italy and elsewhere in Europe.

Mark
Tran,
“Q&A:
The
Baku-Tbilisi-Ceyhan
pipeline,”
The
Guardian,
26
May
2005,
https://www.theguardian.com/business/2005/may/26/businessqandas.oilandpetrol (accessed 23 December 2019).
45
EuropeanCommission,
Baku-Tbilisi-Ceyhan
pipelinefactsheet,
13
July
2006,
MEMO/06/282,
https://ec.europa.eu/commission/presscorner/detail/en/MEMO_06_282 (accessed 23 December 2019).
46
European Bank for Reconstruction and Development, BTS pipeline and cross-border energy projects: working for energy security,
28 April 2016, https://www.ebrd.com/news/2016/btc-pipeline-and-crossborder-energy-projects-working-for-energy-security.html(accessed 23 December 2019).
44

31

Total SA
Size

large

HQ

Paris La Défense, France

About

TOTAL S.A. explores for, produces,refines, transports, and markets oiland natural gas. The Company also
operates a chemical division which
produces
polypropylene,
polyethylene, polystyrene, rubber,
paint, ink, adhesives, and resins.

CHARACTERISTICS OF THE PARTNERSHIP
Form of partnership

Third market

Year

Details on joint project(s)Joint-venture

Azerbaijan, Turkey,
Georgia

2002

Crude oil pipeline

DETAILS ON THE PARTNERSHIPThe construction of the Baku-Tbilisi-Ceyhan (BTC) pipeline started in 2002, and the pipeline
began operating in June 2006. It stretches for 1,770 kilometres from the Azerbaijani capital Baku
through the capital of Georgia, Tbilisi, all the way to the port of Ceyhan on the Mediterranean coastof Turkey. Furthermore, the same year Kazakhstan and Azerbaijan signed an oil transportationagreement under which Kazakhstan joined the BTC pipeline. The pipeline has a throughput capacityof 1 million barrels per day, and has a lifetime projected to be at least 40 years in operation.
The operator of the BTC pipeline is BP Baku-Tbilisi-Ceyhan Pipeline Company, which was created in2001 to construct, own and operate the pipeline. It is a joint-venture of several companies,
including several European and Japanese ones. As of today, its shareholders are: BP (30.1 per cent);
AzBTC (25.00 per cent); Chevron (8.90 per cent); Equinor (8.71 per cent); TPAO (6.53 per cent); Eni(5.00 per cent); Total (5.00 per cent), ITOCHU (3.40 per cent); INPEX (2.50 per cent), ExxonMobil(2.50 per cent) and ONGC (BTC) Limited (2.36 per cent)
One certain driver for the partnership is the important scale of the project. Indeed, according to the
EBRD, “the cost was initially estimated at 3.6 billion US dollars before settling slightly higher aftersome amendments to the route,” the largest private construction project in the world at its time. For
its financing, “in 2003 the EBRD approved a 12-year loan for BTC of up to 125 million US dollars
for its own account and syndicated a 10-year 125 million US dollars loan to commercial lenders. In
addition to the EBRD, the IFC, a member of the World Bank Group; governmental agencies including
US-Exim, JBIC, Nexi, Hermes, SACE, Coface, ECGD, OPIC; and a number of commercial banks
such as Société Générale, ABN Amro, Citibank and Mizuho, also provided finance to the BTC
project.”
The BTC pipeline has a key geopolitical dimension. Indeed, according to The Guardian, the US
favoured the pipeline on the grounds that it would lessen western dependence on Middle East oil andRussian pipelines, as well as avoiding Iran. Similarly, for the EBRD, the project equals a matter ofenergy security: “for Georgia, the project promised to become the first major alternative source ofenergy to its traditional supplies from Russia [and] for Azerbaijani – and Caspian – oil, it was the firstalternative route to the West.”
32

Case 9: Geothermal power plant in Indonesia 47 48 49
CHARACTERISTICS OF THE COMPANIESSumitomo Corporation

ENGIE SA

large

Size

large

HQ

Tokyo, Japan

HQ

Courbevoie, France

About

Sumitomo Corporation is a general
trading company. The Company
imports and exports a wide variety ofgoods such as metals, machinery,
chemicals, fuel, food products, andtextiles. Sumitomo also operates realestate,construction,
shipping,
insurance, finance, and, leasing
businesses.

About

ENGIE SA offers a full range ofelectricity, gas and associatedenergy and environment services.
The company produces, trades,
transports, stores, and distributes
natural gas, and offers energy
management and climatic andthermal engineering services.

Size

CHARACTERISTICS OF THE PARTNERSHIP
Form of partnership

Third market

Year

Details on joint project(s)Consortium

Indonesia

2010

Geothermal power plant

DETAILS ON THE PARTNERSHIPPT Supreme Energy Muara Laboh consortium of Sumitomo Corporation, ENGIE, and Indonesiancompany Supreme Energy, was awarded a geothermal power generation project in Muara Labohin 2010 under a “build, own and operate” scheme. In December 2019, the three companies
started operations at the plant, claiming its capacity can supply electricity to 420,000 households.
The Japanese and French companies both own 35% of the plant, with Supreme Energy holding theremaining 30% stake. The construction of the Muara Laboh plant has cost 70 billion yen (640 million
US dollars). A financing agreement amounting to 440 million US dollars was reached between the PT
Supreme energy Muara Laboh consortium with JBIC, the ADB and several commercial banks
under a guarantee of NEXI under the objective of supporting clean energy development in Indonesia.
The project was eased by a long-lasting partnership between Sumitomo Corporation and ENGIE,
which have been involved and co-investing in desalination and energy projects around the world. A
second geothermal plant project in Rajabasa, Indonesia, involving the two companies and otherpartners is underway, with a target for the beginning of operations in 2025. According to the Nikkei
Asian Review, this project in Indonesia is intended to be used by Sumitomo Corporation as“steppingstones into the geothermal power generation business in the Philippines and the U.S,” andpart of the Corporation’s strategy to “raise its ratio of renewable energy sources to its total power
output capacity to 30% by 2035 from the current 20%.”
Kenta Ando, “Indonesia lures Sumitomo to its geothermal power sources,” Nikkei Asian Review, 19 December 2019,https://asia.nikkei.com/Business/Energy/Indonesia-lures-Sumitomo-to-its-geothermal-power-sources2 (accessed on 14 January2020).
48
ENGIE press release, “ENGIE builds in Indonesia its first geothermal power generation plant in the world,” ENGIE website, 27
January 2017, https://www.engie.com/en/journalists/press-releases/indonesia-geothermal (accessed 14 January 2020).
49
PT Supreme Energy, “PT Supreme Energy Muara Laboh,” PT Supreme Energy Website, http://www.supremeenergy.com/?page_id=5 (accessed 14 January 2020).
47

33

Case 10: Offshore wind turbines in Europe, Asia and America 50 51 52 53 54 55 56
CHARACTERISTICS OF THE COMPANIES
Mitsubishi Heavy
Industries Ltd

Vestas Wind Systems SA

Size

large

Size

large

HQ

Tokyo, Japan

HQ

Aarhus, Denmark

About

Mitsubishi Heavy Industries, Ltd. is acomprehensive heavy machinerymaker. The company manufacturesmachinery, ships, turbines andengines, prime movers, aircrafts, andmachine parts for military andcommercial use. Mitsubishi Heavy
Industries also researches anddevelops nuclear power plants.

About

VestasWind
Systems
A/S
develops,
manufactures,
andmarkets wind turbines that generate
electricity. The company also
installs the turbines and offers
follow-up and maintenance servicesof the installations.

CHARACTERISTICS OF THE PARTNERSHIP
Form of partnership

Third market

Year

Details on joint project(s)Joint-venture

Europe (North Sea
coastal countries)

2013

Offshore wind turbines

DETAILS ON THE PARTNERSHIP
According to an article from the Nikkei Asian Review of July 2019, if Mitsubishi Heavy Industries
formerly relied on gas turbines as the main infrastructure product, the company sought to actively
invest in renewable energy amid tougher environmental regulations. On 17 September 2013,
Mitsubishi Heavy Industries and Vestas agreed to form a joint-venture dedicated to business inoffshore wind turbines. The joint-venture MHI Vestas was established in April 2014 with equal
equity ownership ratios. The JV initial agreement indicated the transfer of Vestas offshore order
book, service contracts and approximately 300 employees to the JV, and an initial investment of 100
million euros from Mitsubishi Heavy Industries to the JV, with a second investment conditional tocertain milestone achievements.

Vestas Wind Systems company announcement, “Vestas and Mitsubishi Heavy Industries form a joint venture dedicated to offshorewindenergy,”VestasWind
Systems,
27
September
2013,
https://www.vestas.com/en/media/~/media/c25bb62b1a6d4d0d8a8873a36597fb46.ashx (accessed 21 November 2019).
51
Mitsubishi Heavy Industries press release, “MHI and Vestas agree to form a joint-venture company dedicated to offshore windturbines,” 27 September 2013, https://www.mhi.com/news/story/1309271718.html (accessed 21 November 2019).
52
Naoki Watanabe, “Mitsubishi Heavy to make offshore wind turbines in US and Asia,” Nikkei Asian Review, 12 July 2019,https://asia.nikkei.com/Business/Companies/Mitsubishi-Heavy-to-make-offshore-wind-turbines-in-US-and-Asia(accessed
21
November 2019).
53
MHI Vestas Offshore Wind, “our story,” MHI Vestas Offshore Wind website, http://www.mhivestasoffshore.com/#/Our-Story/2014/(accessed 21 November 2019).
54
Natashi Li, “MHI Vestas inks purchase contract with Mitsubishi,” Taipei Times, 22 August 2019,http://www.taipeitimes.com/News/biz/archives/2019/08/22/2003720895 (accessed 21 November 2019).
55
Ryoichi Abe, “Collaboration with EIB and JBIC’s support to EU-Japan Projects,” Presentation, EU-Japan Centre for Industrial
Cooperation seminar on EU-Japan Business Collaborations in Third Markets, Tokyo, 3 December 2019, https://www.eujapan.eu/sites/default/files/imce/jbic_for_web_20191203_eu_japan_connectivity.pdf (accessed 3 December 2019).
56
Koichi Hayama (Business Development Manager at MHI Vestas), in discussion with Masami Marbot and Réka Lóczi, Tokyo, 17
February 2020.
50

34

JBIC played a significant role in the formation of the JV by co-investing together with MHI Holding
Denmark ApS, and thus reducing MHI’s required investment. Furthermore, the collaboration between
Mitsubishi Heavy Industries and JBIC also focuses on the development of new products and accessto new markets such as in Japan, Taiwan, South Korea and the US.
The JV was in part motivated by a rapidly growing demand worldwide to supersede outdated coalfired and nuclear plants, with the most vibrant markets for offshore wind turbines identified at the timeof the creation of the JV in the North Sea coastal countries, particularly the UK and Germany.
Furthermore, the two companies proved to have several complementarities. Indeed, if MHI had
extensive experience in the onshore wind business, in the APAC region, and with harsh natural
conditions such as typhoons, earthquake and lightning, the company was aiming to develop its
offshore wind business and penetrate the European market. As for Vestas, the company had
experience in offshore wind business and in Europe and the Americas but was looking for a partner
to bring additional investment.
MHI Vestas’s focus is to design, manufacture, install and service wind turbines for the offshore windindustry. Since the JV, several projects have been ordered and carried out in Denmark, Belgium,
Netherlands and the UK.
MHI Vestas is also geographically expanding its activities beyond its initial focus of the North Sea,
with plans on manufacturing offshore wind turbines in the US and Asia, more particularly Taiwan and
Vietnam, as soon as 2021. According to the same article from the Nikkei Asian Review, MHI Vestas
Offshore Wind holds 33% of global market share in offshore wind turbines, behind Spain’s
Siemens Gamesa Renewable Energy, and managed to secure profitability in 2018.
Delving more particularly into the projects in Taiwan, it is interesting to remark that MHI Vestas
activities are related to multiple partnerships between Japanese, European and local firms. Indeed,
MHI Vestas is involved in three projects: two with Danish fund management company Copenhagen
Infrastructure Partners (CIP) in Chang Fang and Xidao, and one project co-developed by CIP, China
Steel Co. and Diamond Generating Asia, a subsidiary of Mitsubishi Corporation. Meanwhile, MHI
Vestas signed a conditional contract of purchase with Mitsubishi Electric (Europe) Co., the latter tocooperate with long-time Taiwanese partner Shihlin Electric & Engineering Corp to deliver highvoltage switchgear to MHI Vestas.

35

Case 11: Thermal power plant in the Philippines 57 58
CHARACTERISTICS OF THE COMPANIES
Toshiba Plant Systems &Services Co.

Mitsubishi Corporation
Size

large

Size

large

HQ

Tokyo, Japan

HQ

Yokohama, Japan

About

Toshiba Plant Systems & Services
Co. is a plant engineering company
specializinginthermal,hydroelectric, and nuclear power
plant construction. The company
also develops production facilities
as well as civil infrastructure such as
water treatment, electrical, andcommunication systems.

About

Mitsubishi Co. is a general trading
company. The company has businessgroups such as new businessinitiatives, IT and electronics, fuels,
metals, machinery, chemicals, living
essentials, and professional services.

thyssenkrupp AG
Size

large

HQ

Essen, Germany

About

Thyssenkrupp
AG
manufacturesindustrial components. The Company
produces flat rolled and cast steel,automobile parts, elevators andescalators, machine tools, bearings,
nonferrous metals, and plastics.
Thyssenkrupp develops and manages
real estate as well as designs andconstructs factories.

CHARACTERISTICS OF THE PARTNERSHIP
Form of partnership

Third market

Year

Details on joint project(s)Contractor / Supplier

Philippines

2014

Thermal power plant

57 Nikolaus Boltze, “Drivers, challenges and opportunities for EU-Japan business collaboration in third markets,” Presentation, EUJapan Centre for Industrial Cooperation seminar on EU-Japan Business Collaborations in Third Markets, Tokyo, 3 December 2019,https://www.eu-japan.eu/sites/default/files/imce/ahk_eu-japan_business_partnerships_in_3rd_countries_031219.pdf (accessed 3
December 2019).
58 Hindu Business Online Bureaus, “ThyssenKrupp bags deals worth Rs 1,000 cr,” Hindu Business Online, 12 June 2014,
https://www.thehindubusinessline.com/companies/thyssenkrupp-bags-deals-worth-rs-1000-cr/article20797195.ece1# (accessed 27
January 2020).

36

DETAILS ON THE PARTNERSHIPOn 31 January 2014, Mitsubishi Co. and Toshiba Plant Systems & Services Cooperation announced
they concluded a contract with Filipino company Cagayan Electric Power & Light Company, to build
a thermal power plant in Northern Mindanao, in the Philippines. The project is comprised of twounits of 55MW each, and is being undertaken on a full turn-key basis by which the two Japanesecompanies execute the project in its entirety, including engineering, civil work, procurement, erection
and testing.
ThyssenKrupp’s Indian subsidiary announced on 10 June 2014 that it would supply three boilers
to the thermal plant project. ThyssenKrupp Industries India Managing Director SivasubramanianNatarajan explained that “ThyrssenKrupp’s business, particularly in the material-handling equipment
and boilers divisions in India and South East Asian countries, has seen a significant boost owing toboth increased demand and an aggressive international market outreach.” The order volume would
have amounted to approximately 30 million US dollars.

37

Case 12: Power plant in Thailand 59 60
CHARACTERISTICS OF THE COMPANIESMarubeni Corporation

Siemens AG

Size

large

Size

large

HQ

Tokyo, Japan

HQ

Munich, Germany

About

Marubeni Corporation is a trading
company with business divisions iniron and steel, information technology,
utility and infrastructure, energy, food,metals and mineral resources,development
andconstruction,industrial machinery, and chemicals.

About

Siemens AG is an engineering andmanufacturing
company.
The
company focuses on areas ofelectrification, automation, anddigitalization.
Siemens
also
provides engineering solutions in
automation and control, power,transportation,
andmedicaldiagnosis.

CHARACTERISTICS OF THE PARTNERSHIP
Form of partnership

Third market

Year

Details on joint project(s)Consortium

Thailand2017

Power plant

DETAILS ON THE PARTNERSHIP
On 25 January 2017, the consortium of Marubeni and Siemens announced it was awarded the South
Bangkok Power Plant Replacement Project Phase 1, from state-owned utility Electricity
Generating Authority of Thailand (EGAT). The new power plant aims to replace an existing thermal
power plant. The combined order for Marubeni and Siemens approximately amounts to 550 million
US dollars. It is a full turn-key project, with the scope of the consortium including engineering,procurement, construction and commissioning. The cooperation was defined as: “main equipment
such as gas turbines, steam turbines, generators and heat recovery steam generators will be suppliedby the Siemens Group, while Marubeni is in charge of supplying the balance of plant equipment, civilengineering/construction and installation work.”
Commenting on the background which led to this partnership, Will Meixner, CEO of the SiemensPower and Gas Division stated: “Within the last 10 years in Thailand, the Marubeni and Siemens
consortium has jointly succeeded in a total of 4 combined cycle power plant projects, and theextensive experience and reliable performance of the technology in these past projects contributed
to winning the award for this project. This marks not only the fifth order from the Electricity Generating
Authority of Thailand for the two consortium partners for a power plant in Thailand but is also the firsttime that Siemens will supply its largest and most efficient gas turbine to the country."

Marubeni press release, “Marubeni Awarded Combined-Cycle Power Plant Project in Thailand,” Marubeni website, 25 January 2017,https://www.marubeni.com/en/news/2017/release/00003.html (accessed 25 December 2019).
60
Siemens press release, “Siemens to supply turnkey combined power plant to Thailand,” Siemens press release, 26 January 2017,https://press.siemens.com/global/en/pressrelease/siemens-supply-turnkey-combined-cycle-power-plant-thailand?content[]=PG(accessed 25 December 2019).
59

38

Case 13: Wind farm in Egypt 61 62 63 64
CHARACTERISTICS OF THE COMPANIES
Toyota Tsusho
Corporation

ENGIE SA

Size

large

Size

large

HQ

Nagoya, Japan

HQ

Courbevoie, France

About

Toyota Tsusho Corporation is a
trading company. The company
markets automobiles, trucks, steel
products,
industrial
machinery,
chemical products, and energy in both
domestic and overseas markets.

About

ENGIE SA offers a full range ofelectricity, gas and associatedenergy and environment services.
The company produces, trades,
transports, stores, and distributes
natural gas, and offers energy
management and climatic andthermal engineering services.

CHARACTERISTICS OF THE PARTNERSHIP
Form of partnership

Third market

Year

Details on joint project(s)Joint-venture

Egypt

2017

Wind farm

DETAILS ON THE PARTNERSHIPIn December 2017, Toyota Tsusho and its group company Eurus Energy, together with ENGIE andEgyptian construction company Orascom, were awarded a wind farm project in the Gulf of SUEZ.
The project is led by joint-venture company Ras Ghareb Wind Energy, owned respectively at 40%,
40%, and 20%. The JV was in part motivated by complementarities in ENGIE’s expertise in onshore
windfarm, and Toyota financial strength. Contractors include the German and Spanish JV Siemens
Garmesa for the supply of wind turbines. The total project cost is estimated at 400 million US dollars.
JBIC provided approximately 60% senior loan with 40% coming from Japanese and Frenchcommercial banks Sumitomo Mitsui Banking Co. and Société Générale covered by NEXI. Commercial
International Bank (CIB) Egypt is acting as the working capital bank and Attijariwafa Bank provided
an equity bridge loan for Orascom Construction.
In November 2019, the consortium completed the construction of the wind farm. Under an
independent power producer (IPP) scheme, the companies started the commercial operation of
the plant and the sale of generated electricity for 20 years. The energy produced by the wind farm issold under a 20-year Power Purchase Agreement to the state-owned Egyptian Electricity
Transmission Company.
Toyota Tsusho Co. press release, “Toyota Tsusho to win the first wind power IPP project in Egypt,” Toyota Tsusho Co. website, 4
December 2017, https://www.toyota-tsusho.com/english/press/detail/171204_004069.html (accessed 16 December 2019).
62
ENGIE press release, “ENGIE Africa consortium starts Commercial Operation of Egypt’s first private & large wind farm,” ENGIE
website, 4 November 2019, https://www.engie-africa.com/en/consortium-commercial-operation-egypts-first-private-largest-wind-farm/(accessed 16 December 2019).
63
Doaa Farid, “Orascom-Engie-Toyota seal financial closure for 250MW wind farm,” Egypt Today, 18 December 2017,https://www.egypttoday.com/Article/3/37339/Orascom-Engie-Toyota-seal-financial-closure-for-250MW-wind-farm(accessed
16
December 2019).
64
Ryoichi Abe, “Collaboration with EIB and JBIC’s support to EU-Japan Projects,” Presentation, EU-Japan Centre for Industrial
Cooperation seminar on EU-Japan Business Collaborations in Third Markets, Tokyo, 3 December 2019, https://www.eujapan.eu/sites/default/files/imce/jbic_for_web_20191203_eu_japan_connectivity.pdf (accessed 3 December 2019).
61

39

Case 14: Floating solar power in Taiwan 65
CHARACTERISTICS OF THE COMPANIESTokyo Century Corporation

Kyudenko Corporation

Size

large

Size

large

HQ

Tokyo, Japan

HQTokyo, Japan

About

Tokyo Century Corporation provides
businesses with lease financing fortheir equipment needs, such as
information/communicationequipment and machinery.

About

Kyudenko Corporation constructs
powertransmission
andtransformation
facilities.
The
Company also performs indoor
electrical wiring, water treatment,
air-conditioning, and piping works.

Kyuden Mirai energy
Company

Ciel et Terre SAS

Size

SME

Size

SME

HQ

Fukuoka, Japan

HQ

Sainghin-en-Mélantois, France

About

Kyuden Mirai Energy Co., Inc. plans,builds and operates power plants
based on renewable energies.
Kyuden Mirai Energy Co., Inc. is awholly owned subsidiary of Kyushu
Electric Power Co., Inc., which is aJapanese electric utility company.

About

Established in 2006 in France as a
specialist in the integration ofphotovoltaic systems and ‘floating
PV,’ developing its Hydrelio®
technology in 2011. The company
develops projects with privatecompanies, industries and public
institutions all over the world.

CHARACTERISTICS OF THE PARTNERSHIP
Form of partnership

Third market

Year

Details on joint project(s)Investment

Taiwan2018

Floating solar power

DETAILS ON THE PARTNERSHIPOn 9 April 2018, Tokyo Century Corporation, Kyudenko Corporation and Kyuden Mirai Energy
Company announced they reached an agreement with Ciel et Terre “to jointly invest in a special
purpose company which is engaged in the floating solar power plant project developed by Cielet Terre in Taiwan.” The project is estimated to generate “6,400 megawatt hours (MWh) per year byinstalling a total of approximately 5.1 megawatt (MW) solar modules over a 50,000m2 freshwater
surface area of two ponds owned by Tainan City.” As for the agreement, it specifies “to invest in Valleyof Trees (1.1 MW plant) which is scheduled to start operating in April 2018. […] All electricity
generated at these plants will be sold to Taiwan Power Company.”
Tokyo Century press release, “Tokyo Century Entered into Floating Solar Power Plant Project in Taiwan,” Tokyo Century website,
9 April 2018, https://www.tokyocentury.co.jp/_cms/wp-content/uploads/2018/04/180409_Tokyo-Century-Entered-into-Floating-SolarPower-Plant-Project-in-Taiwan.pdf (accessed 17 March 2020).
65

40

Case 15: Investment platform for renewables in Africa 66 67 68
CHARACTERISTICS OF THE COMPANIES
Mitsubishi Corporation

Electricite de France SA

Size

large

Size

large

HQ

Tokyo, Japan

HQ

Paris, France

About

Mitsubishi Co. is a general trading
company. The company has businessgroups such as new businessinitiatives, IT and electronics, fuels,
metals, machinery, chemicals, living
essentials, and professional services.

About

ENGIE SA offers a full range ofelectricity, gas and associatedenergy and environment services.
The company produces, trades,
transports, stores, and distributes
natural gas, and offers energy
management and climatic andthermal engineering services.

CHARACTERISTICS OF THE PARTNERSHIP
Form of partnership

Third market

Year

Details on joint project(s)Joint-venture

Africa2018

Investment platform forrenewables

DETAILS ON THE PARTNERSHIPOn 10 September 2018, Mitsubishi Corporation announced its investment into NEoT Offgrid Africa(NOA), which is “an investment platform focused on developing distributed renewable projects
in Africa,” aiming to “promote new businesses that use batteries to bring power to areas without
access to electricity” on the continent. As of now, NOA is “developing its business around the provisionof solutions such as power sources (solar power generation systems and storage batteries) andhousehold appliances (lighting fixtures, radios, TVs, etc.) to households in off-grid areas in Africa.”
The platform itself is managed by investment company NEoT, to which Mitsubishi Corporation
became a strategic investor, “tak[ing] a significant minority share” alongside French companies EDF
and Forsee Power.
Mitsubishi Corporation indicated this investment was motivated by a desire to “expand its distributed
power business in Sub-Saharan Africa, starting with Côte d’Ivoire, and to further develop related to
power supply services for business customers such as mobile towers in off-grid areas.”
Mitsubishi Corporation and EDF have cooperated on several projects. Among the latter are windfarms projects in Northern France since 2013, and electric mobility solutions in Europe since 2017.

Mitsubishi Co. press release, “Mitsubishi Co. to Invest in Distributed Power Supply Project in Off-Grid Areas in Africa,” Mitsubishi
Co. website, 10 September 2017, https://www.mitsubishiCo.com/jp/en/pr/archive/2018/html/0000035685.html (accessed 31 January2020).
67
EDF Energies Nouvelles press release, “EDF Energies Nouvelles teams up with Mitsubishi Co. to build four wind farms in France,”
EDF website, 15 July 2013, https://www.edf-renouvelables.com/en/press/press-releases/edf-energies-nouvelles-teams-up-withmitsubishi-Co.-to-build-four-wind-farms-in-france/ (accessed 31 January 2020).
68
NEoT Capital press release, “NEoT Capital welcomes Mitsubishi Co. as strategic investor,” NEoT Capital website, 14 September
2017, https://neotcapital.com/new-blog/2017/9/13/neot-capital-welcomes-mitsubishi-Co.-as-strategic-investor# (accessed 31 January2020).
66

41

Case 16: Onshore wind farms and solar photovoltaic plants in Mexico 69 70 71
CHARACTERISTICS OF THE COMPANIESTokyo Gas Corporation

ENGIE SA

Size

large

Size

large

HQ

Tokyo, Japan

HQ

Courbevoie, France

About

Tokyo Gas Corporation produces andsupplies liquefied natural gas toTokyo and the surrounding areas,
maintains and manages gas supply
equipment and sells air conditioning
appliances. Tokyo Gas also operates
power generation business as welland provides real estate services.

About

ENGIE SA offers a full range ofelectricity, gas and associatedenergy and environment services.
The company produces, trades,
transports, stores, and distributes
natural gas, and offers energy
management and climatic andthermal engineering services.

CHARACTERISTICS OF THE PARTNERSHIP
Form of partnership

Third market

Year

Details on joint project(s)Joint-venture

Mexico2019

Onshore wind farms andsolar photovoltaic plants

DETAILS ON THE PARTNERSHIPOn 8 April 2019, ENGIE and Tokyo Gas, through its US subsidiary, announced their intention to invest
in the 50-50 joint-venture company Heolios EnTG. The JV aims to develop renewable energy
projects in Mexico. It is the first renewable project joint venture that Tokyo Gas participated in outside
Japan and the cooperation was in part driven by a long-term relationship between Tokyo Gas and
ENGIE, which dates back to 1983. The projects were secured by ENGIE in the Mexican government’s
renewable energy auctions. Heolios EnTG was set up to develop, finance, construct, own, operate,
and maintain six renewable energy projects in Mexico: two onshore wind and four solar photovoltaic(Table II). The projects were granted 15-year power purchase agreements.
Table II. Project details of the JV “Heolios EnTG” (Source: Tokyo Gas and ENGIE)
Name
1
2
3
4
5
6

Type

Location

Tres Mesas 3 Wind
Tamaulipas
Trompezon
Solar
Aguascalientes
Villa Ahumada Solar
Chihuahua
Tres Mesas 4 Wind
Tamaulipas
Abril
Solar
SonoraCalpulalpan
Solar
Tlaxcala
Total capacity

Generation
Capacity (MWp)
52
159
200
101
134
254
900

Generation
Capacity (MWe)
50
126
150
96
99
200
721

Expected COD
In operation
Under commissioning
Under commissioning
March 2020
September 2020
November 2020-

Tokyo Gas press release, “ENGIE and Tokyo Gas to establish renewables joint venture company in Mexico,” Tokyo Gas website,
8 April 2019, https://www.tokyo-gas.co.jp/IR/english/library/pdf/tekijikaiji/20190408-01e.pdf (accessed on 20 December 2019).
70
Tokyo Gas press release, “Acquisition of equity interests in renewables joint venture company in Mexico,” Tokyo Gas website, 12
December 2019, https://www.tokyo-gas.co.jp/Press_e/20191212-03e.pdf (accessed on 20 December 2019).
71
Sladjana Djunisic, “Tokyo Gas lands in Mexico with 50% stake in renewables JV with Engie,” Renewables Now, 17 December 2019,https://www.renewablesnow.com/news/tokyo-gas-lands-in-mexico-with-50-stake-in-renewables-jv-with-engie-680583/ (accessed on
20 December 2019).
69

42

Case 17: Pay-as-you-go solar energy equipment for Africa 72 73 74
CHARACTERISTICS OF THE COMPANIESMarubeni Corporation

Azuri Technologies Ltd

Size

large

Size

SME

HQ

Tokyo, Japan

HQ

Cambridge, UK

About

Marubeni Corporation is a trading
company with business divisions iniron and steel, information technology,
utility and infrastructure, energy, food,metals and mineral resources,development
andconstruction,industrial machinery, and chemicals.

About

Azuri Technologies Ltd produces
and distributes solar energy
equipment. The company offers
solar energy lighting devices forstudents which replace the use ofkerosene, candles, and disposable
batteries.

CHARACTERISTICS OF THE PARTNERSHIP
Form of partnership

Third market

Year

Details on joint project(s)Investment

Africa2019

Pay-as-you-go solar energy
equipment

DETAILS ON THE PARTNERSHIPIn June 2019, Marubeni Co. led an investment of 26 million US dollars in Azuri Technologies.
Representatives of the companies had initially met at a conference. The investment is part of a wider
strategy of Marubeni to expand in the developing market. Following the same reasoning, theJapanese company indeed has invested in 2018 into WASSHA, a community-based power businessin Tanzania.
According to the British Chamber of Commerce in Japan (BCCJ): “The first phase of the partnership
involved bringing significant additional equity capital to Azuri, allowing the business to invest in newtechnology development. Since June 2019, the partnership has helped Azuri to reach customers
more effectively using the latest artificial intelligence tools and to build the infrastructure necessary toscale off-grid solar to a mass market.” Other investors include shareholders of Azuri Technologies IP
Group, a UK fund proving capital to technology companies, and Fortune 500.
The partnership draws on Marubeni’s network and Azuri’s extensive experience in Africa, with thelatter possessing offices in Kenya, Nigeria, Tanzania, Uganda and Zambia. It aims at addressing thegrowing demand in Africa for energy provision, especially for low-income and rural households,
relying on Azuri’s pay-as-you-go solar home system. It thus ambitions to ensure universal access tomodern and clean energy. The firms were awarded the UK-Japan Partnership British Business Awardat the BCCJ’s UK-Japan Partnership British Business Award. The BCCJ commented indeed that thispartnership is “an excellent example of how established businesses and fast-growing technologybased organisations can collaborate to accelerate growth.”
72
British Chamber of Commerce in Japan, “2019 BBA Winner Profile-UK-Japan Partnership,” BCCJ website, 13 December 2019,https://bccjapan.com/news/2019-bba-winner-profile-uk-japan-partnership/ (accessed on 18 December 2019).
73
Azuri Technologies, “UK-Japan Energy Partnership of Azuri and Marubeni Wins at British Awards,” PR Newswire, 13 November
2019,
https://www.prnewswire.com/news-releases/uk-japan-energy-partnership-of-azuri-and-marubeni-wins-at-british-businessawards-300957451.html (accessed on 18 December 2019).
74
Akihiko Suzuki (Strategy Director at Azuri Technologies), in discussion over the phone with Masami Marbot and Joana Vaz, 3
February 2020.

43

Case 18: Battery energy storage solutions and energy platform in Europe 75 76 77
CHARACTERISTICS OF THE COMPANIES
Nippon Koei Corporation

YUSO BV

Size

large

Size

SME

HQ

Tokyo, Japan

HQ

Waregem, Belgium

About

Nippon Koei Co., Ltd. provides
construction
consulting
andengineering services to the public andprivate sectors. The Company
operatesinthehydroelectric,
irrigation, and power transmission
fields. Nippon Koei also operates its
own construction division.

About

YUSO is active in the energy
aggregation business, bringing
together all players of modern
electricity
market:consumers,
prosumers,
producers,
grid
operators and power wholesalemarket exchanges. YUSO provides
services to renewable energy
generators using its own platform(“My YUSO”).

CHARACTERISTICS OF THE PARTNERSHIP
Form of partnership

Third market

Year

Details on joint project(s)Investment

Europe2019

Battery energy storage
solutions and energy platform

DETAILS ON THE PARTNERSHIP
On 18 December 2019, it was announced that Nippon Koei “increased its strategic investment in
YUSO to 29% as part of a funding round.” The investment will be held through the Japanesecompany’s 100% owned subsidiary, Nippon Koei Energy Europe B.V. It follows notably a successful
collaboration started in 2018 between the two companies on the joint development of a battery energy
storage project in Belgium, through the JV Ruien Energy Storage.
The collaboration was initiated by Nippon Koei, as the Japanese company was looking out for aEuropean in this sector to invest in, in order to strengthen its position within the European energy
market to prepare for the future energy transition in Japan following the unbundling of electric power
generation, transmission and distribution. YUSO was chosen following the shortlisting of a dozen ofcompanies by a consultancy firm. As for YUSO, with this investment, the Belgian company intends togrow its business, in particular considering the further expansion of its “My YUSO” energy platform
its terms of customer segments and geographies, and the launch of battery energy storage solutions.
Commenting on the details of the relationship between the two companies: “Yuso’s technology willplay a vital role to commercialize the grid-scale energy storage assets developed by Nippon Koei inthe European energy and flexibility markets. In addition, Nippon Koei will second engineers to Yuso
to transfer specific know-how and technology to the Japanese market,” with an ambition to enter thelatter in 2021.
Yuso press release, “Nippon Koei makes a strategic investment in Yuso,” 18 December 2019, https://yuso.be/fr/2019/12/18/nipponkoei-makes-a-strategic-investment-in-yuso/ (accessed 22 January 2020).
76
Nippon Koei press release, “Investment in YUSO, Belgium – Further Promotion of Energy Business & Start of Aggregation Business,”
18 December 2019, https://pdf.irpocket.com/C1954/yUG5/XSgA/j8ia.pdf (accessed 22 January 2020).
77
Bart Pycke (Co-Founder and Managing Director of YUSO), in phone discussion with Masami Marbot and Joana Vaz, 29 January
2020.
75

44

2.1.4. Case studies in IT & telecommunications
Case 19: Consulting in technological applications in Latin America 78 79 80 81
CHARACTERISTICS OF THE COMPANIESEveris Participaciones
S.L.

NTT DATA Co.
Size

large

Size

large

HQ

Tokyo, Japan

HQ

Madrid, Spain

About

NTT Data Co. mainly provides large
scalesystemintegration
andnetworking system services. System
integration involves data transmission
system design, sales, leasing, andservices. Network System Services
include Internet related and linked
computer
networks,
anddata
provision and management of data.

About

Acciona S.A. is a global developerand service provider of solutions inrenewable energy, large civil
infrastructures, and water treatment
and reverse osmosis desalination.

CHARACTERISTICS OF THE PARTNERSHIP
Form of partnership

Third market

Year

Details on joint project(s)Acquisition

Latin America

2014

Consulting in technologicalapplications in Latin America

DETAILS ON THE PARTNERSHIPIn November 2013, both companies reached an acquisition agreement, and in January 2014, Everis
became a wholly-owned subsidiary of NTT DATA. The acquisition amounted to about 50 billion
yen and was part of NTT DATA’s strategy to accelerate its globalization of activities and to widen its
global offering portfolio and presence outside Japan. Indeed, the acquisition of Everis represented to
the Japanese company a gate to the Spanish and Latin American markets in which the Spanish
company had several clients. Sharing of competences, knowledge and resources has also been at
the core of the collaboration.

Everis press release, “NTT DATA announces a capital alliance with everis,” Everis website, 4 November 2013,https://www.everis.com/global/en/news/newsroom/ntt-data-announces-capital-alliance-everis (accessed 26 November 2019).
79
NTT DATA press release, “NTT DATA has completed the capital alliance with everis Group,” NTT DATA website, 29 January 2014,
https://in.nttdata.com/en/news/press-release/2014/january/press-release-29-jan-2014 (accessed 26 November 2019).
80
Kaz Nishihata and Fernando Francés, “Everis + NTT DATA = New Tomorrow Together” Presentation, 25th Japan-Spain Joint
Business Conference, The Japan-Spain Business Cooperation Committee and The Spain-Japan Business Cooperation Committee,
Tokyo, 14 April 2016, https://www.jcci.or.jp/kokusai/NTT%20Data%20Everis.pdf (accessed 26 November 2019).
81
Rohit T. K., “NTT DATA to buy Spanish IT firm for about 50 billion yen: Nikkei,” Reuters, 31 October 2013,https://www.reuters.com/article/us-nttdata-acquisition-everis/ntt-data-to-buy-spanish-it-firm-for-about-50-billion-yen-nikkeiidUSBRE99T18620131030 (accessed 19 March 2020).
78

45

Case 20: Citizen engagement platform worldwide 82 83 84
CHARACTERISTICS OF THE COMPANIESNTT DATA Co.

Citibeats

Size

large

Size

SME

HQ

Tokyo, Japan

HQ

Barcelona, Spain

About

NTT Data Co. mainly provides large
scalesystemintegration
andnetworking system services. System
integration involves data transmission
system design, sales, leasing, andservices. Network System Services
include Internet related and linked
computer
networks,
anddata
provision and management of data.

About

Citibeats, is an AI text analytics toolthatleveragesaclustering
technology to grasp regional issues
from the opinions and feedback of
local citizens.

CHARACTERISTICS OF THE PARTNERSHIP
Form of partnership

Third market

Year

Details on joint project(s)Collaboration

Global, East Africa

2018

Citizen engagement platform

DETAILS ON THE PARTNERSHIPIn 2016, Citibeats was in contact with Spanish consulting company Everis, which had been acquiredby NTT Data in 2014 (see Case 18). Everis introduced Citibeats to a local pitching competition, which
in turn led the startup to the finals of NTT Data’s Open Innovation Contest. This contest is organised
globally and biannually by the Japanese company since 2014 to promote collaborations with startups
with cutting-edge solutions to issues in global societies. Citibeats was the champion of the 2016-2017
edition of the contest, which initiated the collaboration between the two companies. Citibeats and NTT
DATA signed an MoU on the joint development of a citizen engagement platform which enables
social understanding of citizen opinions and emotions in certain areas by analysing social media orother big data sources, using AI. The technology enables ultimately to develop solutions to discoverregional issues and supplying them to the client. The fact that Citibeats’ technology is not sensitive tolanguage would have been one of its key advantages.
In February 2018, the companies were aiming to receive mandates for analyses and consulting
services from 10 clients in Japan and 20 clients outside Japan within fiscal 2018. So far, they
communicated on two projects. The first is ongoing in regions in East Africa and fosters on financial
inclusion by analysing local residents’ needs and problems related to financial services. The second
is held in Japan, following the large-scale floods resulting from heavy rain in summer 2018. The
project consisted in giving structured data on 23 affected prefectures for response prioritization to theGovernment, with the aim of enlightening them on infrastructure repair needs.
NTT DATA Open Innovation Contest, “AI Analytics of the Underlying Opinions & Emotions of Citizens: Solution that solves local
issues as well as addresses the UN Sustainable Development Goals,” NTT DATA Open Innovation Contest website,
http://oi.nttdata.com/en/contest/9th/achievement/service03/ (accessed on 22 November 2019).
83
Citibeats, “Social Impact Report for 2018,” Citibeats website, https://citibeats.net/ (accessed on 22 November 2019).
84
Cristian Pi (Business Development Director at Citibeats), in phone discussion with Masami Marbot and Joana Vaz, 13 February
2020.
82

46

Case 21: Innovation in the Nordic and Baltic regions 85 86 87 88 89 90 91 92
CHARACTERISTICS OF THE COMPANIES
Honda Motor Co. Ltd

Panasonic Co.

Size

large

Size

SME

HQ

Tokyo, Japan

HQ

Kadoma, Japan

About

Honda Motor Co., Ltd. develops,
manufactures,
anddistributes
motorcycles, automobiles, and power
products such as generators and farmmachinery. The Company also
operates a financial credit business.

About

PanasonicCo.
manufactureselectric and electronic products. The
Company
produceshomeappliances, car navigation systems,
digitaldevices,
computer
peripherals,
telecommunications,industrial equipment, and electronic
parts

OMRON Co.
Size

large

HQ

Kyoto, JapanAbout

OMRON Co. manufactures electronic
components, equipment and systems
used for factory automation. The
company provides products andservices in a variety of fields including
industrial
automation,
electronic
components, automotive electronics,
and social systems.

85 Japan Times Global Media Post, Estonia Report 2019, “BaltCap: Japan’s partner to build Europe’s Silicon Valley,” The Japan

Times, 29 June 2019. https://www.japantimes.co.jp/country-report/2019/06/29/global-media-post/estonia-report-2019/baltcap-japanspartner-build-europes-silicon-valley/#.XgRDD9L7SM8 (accessed 26 December 2019).
86 OMRON Co. press release, “OMRON invests in JB Nordic Fund I” OMRON website, 15 January 2019,https://www.omron.com/media/2019/01/20190115.html (accessed 26 December 2019).
87
JBIC press release, “Investment in fund targeting leading IT companies in the Nordic and Baltic regions (original title in Japanese:
北 欧 ・ バ ル ト 地 域 の IT 先 端 企 業 を 投 資 対 象 と す る フ ァ ン ド に 出 資 )," JBIC website, 15 January 2019,https://www.jbic.go.jp/ja/information/press/press-2012/0129-6355.html (accessed 26 December 2019).
88 “NordicNinja,” Nordic Ninja website, https://nordicninja.vc/ (accessed 26 December 2019).
89
Einride press release, “Einride raises $25 million series A to accelerate commercialization of its Autonomous, Electric Transport
System,” Einride website, 10 October 2019, https://www.einride.tech/news/einride-raises-25-million-series-a-to-acceleratecommercialization-of-its-autonomous-electric-transport-system (accessed 27 October 2019).
90
Tomosaku Sohara (Managing Partner at NordicNinja), in discussion over the phone with Masami Marbot and Joana Vaz, 21 January
2020.
91
Bolt press release, “Bolt enters €50 million funding partnership with EU Investment Bank,” Bolt website, 16 January 2020,
https://blog.bolt.eu/en/bolt-enters-e50-million-funding-partnership-with-eu-investment-bank/ (accessed 6 February 2020).
92
European Investment Fund press release, “Baltcap is establishing a new fund with target size of EUR 50m to invest in small andmedium enterprises,” EIF website, 4 May 2017, http://www.eif.europa.eu/what_we_do/equity/news/2017/eif-and-baltcap-launch-newfund.htm (accessed 6 February 2020).

47

Bolt Technology OÜ

Combinostics Oy

Size

large

Size

SME

HQ

Tallinn, Estonia

HQ

Tampere, Finland

About

Combinostics’ mission is to support
healthcare professionals in the
diagnosis
andtreatmentofneurodegenerative diseases. The
company’s“cNeuro”
platform
combines imaging data with clinicaldata and provides an intuitive andholistic view of patient data thathighlights important relationships
early on and supports early
diagnosis.

About

Bolt is a transportation network
company developing and operating
the Bolt mobile application. The latterprovides ride-hailing and scooter
sharing services.

Einride AB

Flexound Systems Oy

Size

SME

Size

SME

HQ

Stockholm, Sweden

HQ

Espoo, Finland

About

Einride AB is a transport company
based focusing on electric and selfdriving vehicles known, the “Einride
pods.” The pods are electric trucks
remotely controlled by drivers, andare notable for their lack of adriver’s cab. The Einride pods aredesigned for autonomous, all-electric
which for an example means that thevehicles do not have a cab or room onboard for human drivers.

About

The company provides FLEXOUND
Augmented Audio™ that adds thesense of touch to audio-visual
listening experience — be it music,
games, television, streaming or
movies. Its proprietary technologies
combine high-quality audio withphysical sound wave vibration. The
company’s
customers
areessentially in the automotive,
aviation, and cinema industries.

MaaS Global Ltd

Sensible 4 Oy

Size

SME

Size

SME

HQ

Helsinki, Finland

HQ

Espoo, Finland

About

MaaS Global is a company that aims
to bring a multi-modal subscription
transport service to cities globally bybuilding a mobility ecosystem. The
company operates the all-in-one
mobility service application Whim.
MaaS is short for Mobility as aService.

About

Sensible 4 is a Finnish technology
startupwithentirely
in-housedeveloped software allows forcomplete automation of vehicles.
Sensible 4’s unique combination of
LiDAR-based software and sensor
fusion makes self-driving cars able tooperate in even the most challenging
weather conditions.

48

CHARACTERISTICS OF THE PARTNERSHIP
Form of partnership

Third market

Year

Details on joint project(s)Investment

Global

2019

Innovation (mobility)(through VC NordicNinja)

DETAILS ON THE PARTNERSHIP
NordicNinja venture capital is an official auxiliary name of JB Nordic Ventures Oy, which is a Helsinkibased 50-50 joint-venture between JBIC IG Partners, a subsidiary of JBIC engaged in overseas
investment advisory and agency business, and BaltCap, a private equity and venture capital investor
in the Nordic and Baltic region. According to Managing Partner Tomosaku Sohara, NordicNinja isprobably the first Japanese VC in Europe and JBIC-backed VC. It was initially founded as JBIC wasinterested in investing in these regions and was looking for local stakeholders until it eventually found
BaltCap.
NordicNinja VC started with over 100 million euros in January 2019 and is backed by Japanese
blue-chip companies, Honda, Omron, and Panasonic, as well as the Japan Bank for International
Cooperation. Its website states that “it [primarily] aims to support scale-up goals in the Nordic andBaltic region through supporting the region’s startups expand into and develop business opportunities
in Japan.” The region indeed appears as a strategic startup ecosystem beyond the three main onesof Silicon Valley, China and Israel, in which Japanese companies are interested in acquiring a foothold
through NordicNinja. Another important dimension of the work of VC is related to the support of theinternationalization of the companies it invests in.
OMRON Co. presented indeed the company’s motivation for its investment in the JB Nordic Fund.
Indeed, the company has in recent years focused on three business strategies: “redefine our focus
domains,” “evolve our business model,” and “reinforce our core technologies.” Hence, the company
aims to “accelerate these strategies through an open innovation strategy aiming at “collaborative
creations with partners.” Furthermore, OMRON intends to “search for influential local start-ups andtechnological seeds, thereby accelerating the drive in this regard through open innovation,” “byutilizing the business matching opportunities service offered by BaltCap, which possesses networks
with start-ups in the Nordic and Baltic region.”
NordicNinja VC has so far invested in 6 companies, accelerating their expansion globally. Bolt is
considered as “one of the fastest-growing transportation platforms in Europe and Africa,” and alreadyavailable in more than 150 cities worldwide and 30 countries (mainly on the European and African
continent). Then, Combinostics states it already has clients throughout the EU, in the US, Japan andSouth Korea. As for Einride, the Swedish company aims to rely of the funds provided by NordicNinja
VC to start expanding in the US. The application “Whim” of MaaS Global, is already available in
Helsinki, Norway, Birmingham, UK, Antwerp, Belgium, and Vienna, Austria. As for Sensible 4, thefunding brought by NordicNinja together with ITOCHU “will be used to further develop the softwareand part will be used to build more GACHA busses, which aims to enter the Japanese and Chinese
market.”
The last aspect of EU-Japan collaboration with regard to this startup ecosystem is that beyond thefinancial products provided by NordicNinja, startups such as BOLT may receive funding from the EU’slong term lending institution the European Investment Bank (EIB), while BaltCap has joint projects
with the European Investment Fund such as the Baltic Innovation Fund.

49

Case 22: Software solutions in Southeast Asia 93 94 95
CHARACTERISTICS OF THE COMPANIESACCESS Co, Ltd

IoTerop SAS

Size

large

Size

large

HQ

Tokyo, Japan

HQ

Courbevoie, France

About

IoTerop is a software solution
provider for security, interoperability
and remote management ofconnected objects in the world of theInternet of Things. The company
provides solutions that enable IoT
manufacturers to build a newgeneration of secure, interoperable
and remotely manageable solutions
and connected objects.

About

ACCESS CO., Ltd. develops browser
software for the Internet. The
Company designs custom browsers
for manufacturers of electronics suchas cellular phones, portable e-maildevices, handheld PCs, video game
consoles, and car navigation systems.

CHARACTERISTICS OF THE PARTNERSHIP
Form of partnership

Third market

Year

Details on joint project(s)Partnership

Southeast Asia

2019

Software solution

DETAILS ON THE PARTNERSHIPIn October 2019, IoTerop and ACCESS Systems have signed a partnership agreement. Thispartnership was enabled by the fact that IoTerop executives have had a long-term relationship withACCESS. Some of them used to work for a company belonging to ACCESS, before this company
was acquired by another. They reconnected with ACCESS after founding IoTerop in 2016 and signed
a partnership agreement in 2019.
The partnership is as follows: as IoTerop is currently actively expanding its activities overseas, it relieson the market intelligence and business development expertise of ACCESS Systems inSoutheast Asia, with one of the ultimate goals being to then enter the Japanese market. According
to IoTerop, ACCESS Systems motivation in the partnership relies on its interest in IoTeroptechnology.

IoTerop press release, “IoTerop, a leading provider of security and management solutions for connected devices, raises €1.5 million,”
IoTerop website, 24 October 2019, https://ioterop.com/ioterop-a-leading-provider-of-security-and-management-solutions-forconnected-devices-raises-e1-5-million/ (accessed 22 November 2019).
94
Hubert Vialatte, “Ioterop lève 1,5 million pour solutions de gestion à distance des objets connectés," Business Les Echos, 24 October
2019, https://business.lesechos.fr/entrepreneurs/financer-sa-creation/0602024268598-ioterop-leve-1-5-million-pour-ses-solutionsde-gestion-a-distance-des-objets-connectes-332613.php (accessed 22 November 2019).
95
Hatem Oueslati (CEO and Co-founder at IoTerop), in discussion with Masami Marbot, Yokohama, 21 November 2019.
9350

2.1.5. Case studies in machinery & industrial equipment
Case 23: Manufacturing of electric warehouse equipment in Europe 96 97
CHARACTERISTICS OF THE COMPANIES
Mitsubishi Heavy
Industries Ltd

Rocla Oyj

Size

large

Size

large

HQ

Tokyo, Japan

HQ

Järvenpää, Finland

About

Mitsubishi Heavy Industries, Ltd. is acomprehensive heavy machinerymaker. The company manufacturesmachinery, ships, turbines andengines, prime movers, aircrafts, andmachine parts for military andcommercial use. Mitsubishi Heavy
Industries also researches anddevelops nuclear power plants.

About

Rocla Oy designs, manufactures,and markets indoor electric trucks
and automated guided vehicles. The
Company offers a range of
warehouse trucks including pallet,
stacking equipment, reach, and lift
trucks.

CHARACTERISTICS OF THE PARTNERSHIP
Form of partnership

Third market

Year

Details on joint project(s)Acquisition

Europe2008

Manufacturing of electricwarehouse

DETAILS ON THE PARTNERSHIPOn 24 December 2008, Mitsubishi Caterpillar Forklift Europe B.V. (MCFE), a European subsidiary of
Mitsubishi Heavy Industries, announced that it had successfully completed a public tender to acquire
Rocla. Under this offer, MCFE would have obtained 99.3% of all shares and voting rights in Rocla.
The total payment amount was around 40 million euros. MCFE and Rocla have had a “long historyof cooperation”: “Rocla began supplying warehouse equipment to MHI affiliates in Europe in 1987,”
and “MHI forged a strategic alliance with Rocla in 2002 through investment by MCFE and Mitsubishi
Caterpillar Forklift America Inc.”
Mitsubishi Heavy Industries explained the motivations behind the acquisition: the Japanese company“aims to reinforce and further expand its material handling equipment portfolio, strengthen its
capability to address the needs of European customers, and aggressively develop comprehensive
solution-oriented products and services to customers in Europe, one of the largest markets formaterial handling equipment”.

Mitsubishi Heavy Industries press release, “MHI to acquire Rocla, a Finnish Electric Warehouse Truck Manufacturer, To Stregnthen
its Material Handling,” Mitsubishi Heavy Industries website, 28 October 2018, https://www.mhi.com/news/story/0810231261.html(accessed 2 March 2020).
97
Mitsubishi Heavy Industries press release, “MHI successfully completes public tender offer for Rocla, A Finnish Electric Warehouse
Truck Manufactuer,” Mitsubishi Heavy Industries website, 24 December 2008, https://www.mhi.com/news/story/0812241268.html(accessed 2 March 2020).
96

51

Case 24: Manufacturing of electrode in Asia 98 99
CHARACTERISTICS OF THE COMPANIESChlorine Engineers
Corporation Ltd

Industrie de Nora SpA

Size

large

Size

large

HQ

Tokyo, Japan

HQ

Milan, Italy

About

Chlorine
Engineers
providesengineering and manufacturing ofelectrolysis devices. The company
offers products including processdevelopment,
electrolysis
technology,
watertreatment
technology,
andseparation
technology.

About

De Nora manufactures anddistributes
chemicals.
The
companyofferschlorate,
diaphragm, amalgam, cells, anode
coatings, and electrodes.

CHARACTERISTICS OF THE PARTNERSHIP
Form of partnership

Third market

Year

Details on joint project(s)Acquisition

Asia (esp. China)

2014

Manufacturing of electrode

DETAILS ON THE PARTNERSHIPDe Nora entered the Japanese market in 1969 as a 50-50 JV with Mitsui under the name of “Permelec
Electrode Ltd”. Permelec Electrode was then fully acquired by De Nora in September 2010. The same
year, the company entered into a partnership with Chlorine Engineers, which was also a subsidiaryof Mitsui. The acquisition proceeded in two steps: De Nora acquired 51% of Chlorine Engineers in
2011, before acquiring the remaining 49% in 2012.
De Nora was primarily motivated by its desire to expand its activities in Asia and interested by Chlorine
Engineers strengths in those markets, and in particular In China, where the Japanese company washolding a third of market share. According to the Ministry of Economy, Trade and Industry of Japan(METI) Casebook on Investment Alliance with Japanese companies which dates from 2015, theacquisition enabled De Nora to double its sales amount.

Industrie De Nora, “De Nora Japan,” Industrie De Nora website, unknown, https://www.denora.com/company/electrodetechnologies/De-Nora-Japan.html (accessed 23 December 2019).
99
Ministry of Economy, Trade and Industry in Japan, Casebook on Investment Alliances with Japanese Companies, April 2015, p5253, https://www.meti.go.jp/english/policy/external_economy/investment/pdf/casebook_01a.pdf (accessed 12 November 2019).
98

52

Case 25: Manufacturing and sales of wiring devices in the Middle East, CIS, andAfrica 100 101
CHARACTERISTICS OF THE COMPANIESViko Elektrik Elektronik
Endüstrisi San. ve Tic.
A.Ş.

Panasonic Corporation
Size

large

Size

large

HQ

Kadoma, Japan

HQ

Istanbul, Turkey

About

Panasonic Co. manufactures electricandelectronic
products. The
Company
produceshomeappliances, car navigation systems,
digitaldevices,
computer
peripherals,
telecommunications,industrial equipment, and electronicparts.

About

Viko designs and manufactures
innovative low voltage products
and services. The product range ofViko includes wiring devices, groupsockets, miniature circuit breakerboxes, accessories, low voltage
switchgears,
smart
meters,automated meter reading systems
and building automation systems.

CHARACTERISTICS OF THE PARTNERSHIP
Form of partnership

Third market

Year

Details on joint project(s)Acquisition

Middle East, CIS,
Africa2013

Manufacturing and sales ofwiring devices in Africa

DETAILS ON THE PARTNERSHIPOn 31 October 2013, Panasonic Co. announced that it has concluded a share purchase of the wiring
devices Turkish company Viko Elektrik, acquiring by this agreement 90% of the issued shares of thelatter at a purchase price of 460 million US dollars.
The acquisition is justified as “Panasonic expects expansion in the sales of wiring devices and otherproduct ranges as well as electrical equipment and materials produced by Panasonic, such as lighting
devices and fans, not only in Turkey, but in the Middle East, CIS and African market. In addition, by
introducing new products making use of Panasonic’s product competitiveness and development
capacities, and by making improvements in productivity through sharing manufacturing know-how
with VIKO, Panasonic will create synergy with VIKO and is aiming for further expansion of thebusiness”.

Akihiro Sano, “Japanese firms exporting to Africa via Turkey,” Nikkei Asian Review, 9 July 2017,https://asia.nikkei.com/Business/Japanese-firms-exporting-to-Africa-via-Turkey (accessed 1 February 2020).
101
Panasonic press release, “Panasonic signs share purchase agreement for Turkish Wiring Device Maker VIKO,” Panasonic website,
31 October 2013, https://news.panasonic.com/global/press/data/2013/10/en131031-9/en131031-9.pdf (accessed 1 February 2020).
100

53

Case 26: Steel manufacturing for Europe, the Middle East, and Africa 102 103 104 105
CHARACTERISTICS OF THE COMPANIES
Toyo Kohan Co.

Tosyali Holding

Size

large

Size

large

HQ

Tokyo, Japan

HQ

Istanbul, Turkey

About

Toyo Kohan Co., Ltd. manufacturesand distributes steel products. The
Company produces resin coatedsteel sheets, iron foils, nickel plated
steel sheets, cold-rolled steel sheets,and more. Toyo Kohan also provides
consulting services.

About

Tosyali Holding manufactures steel
products. The Company products
and markets steel welded pipes,
billets, hot rolled coils, tubes, andmetal bars. Tosyali also produces awide range of pipes for water andnatural gas, scaffolding, andindustrial use.

CHARACTERISTICS OF THE PARTNERSHIP
Form of partnership

Third market

Year

Details on joint project(s)Joint-venture

Europe, Middle East,
Africa2015

Steel manufacturing

DETAILS ON THE PARTNERSHIPOn 2 February 2012, Tosyali Holding and Toyo Kohan announced the companies reached anagreement to form a joint-venture in Turkey to produce steel. The Turkish company has a 51%
stake in the JV, and its Japanese partner 49%. The production facility of Tosyalı-Toyo Çelik A.Ş. wasbuilt in Osmaniye, in southern Turkey, with a total investment cost of 650 million US dollars, andthe beginning of trial production in December 2016. The plant represents about 1.06 billion US dollars
in consolidated sales annually for Toyo Kohan.
The products “don’t meet the needs of just Turkey but of a wide geography stretching from Europe
to the Caucasus and from the Middle East to North Africa.” Indeed, quoted by the Nikkei Asian
Review, Fuat Tosyali, chairman of the JV company, explained that “the location of the plant allows
the company to ship product by ocean vessel to Ethiopia and other East African locations in three-tofour days.”
JBIC provided two loans, respectively totalling up to 87 million US dollars to the JV, and 91 million
US dollars to the Turkish commercial bank Yapi ve Kredi Bankasi A.S. Each of these loans is cofinanced with Sumitomo Mitsui Banking Corporation, and NEXI is providing insurance for part of theloan portion of SMBC. The overall co-financing amount is about 297 million US dollars.
Tosyali Holding, “Tosyali Toyo Steel Joint-Stock Company,” Tosyali website, https://www.tosyaliholding.com.tr/en/our-scope-ofactivity/group-companies/en-our-scope-of-activity-group-companies-joint-ventures-1571041901055/tosyali-toyo-steel-joint-stockcompany (accessed 1 February 2020).
103
Akihiro Sano, “Japanese firms exporting to Africa via Turkey,” Nikkei Asian Review, 9 July 2017,https://asia.nikkei.com/Business/Japanese-firms-exporting-to-Africa-via-Turkey (accessed 1 February 2020).
104
Seda Sezer, “Turkish steelmaker Tosyali partners Japan’s Toyo Kohan,” 2 February 2012, Reuters,
https://www.reuters.com/article/tosyali-toyo-idAFL5E8D232L20120202 (accessed 1 February 2020).
105
JBIC press release, “Loan for Manufacturing and Sales of Cold Rolled Steel Sheets and Surface Processed Steel Sheets in Turkey,”
JBIC website, 2 March 2015, https://www.jbic.go.jp/en/information/press/press-2014/0302-35355.html (accessed 1 February 2020).
10254

2.3.6. Case studies in construction
Case 27: Construction of office, hotel and residential towers in Myanmar 106 107 108
CHARACTERISTICS OF THE COMPANIESTaisei Corporation

Bouygues SA

Size

large

Size

large

HQ

Tokyo, Japan

HQ

Paris, France

About

Taisei Co. is a general contractor
operating nationwide and overseas.
The company builds residential,commercial, and institutional buildingssuch as condominiums and singlefamily houses. Taisei also performs
civil engineering works for roads.

About

Bouygues SA offers construction
services, develops real estate,cellular communications services,
produces television programmingand movies, and manages utilities.

CHARACTERISTICS OF THE PARTNERSHIP
Form of partnership

Third market

Year

Details on joint project(s)Joint-venture

Myanmar2017

Construction

DETAILS ON THE PARTNERSHIPOn 29 November 2017, Taisei Corporation and Dragages Singapore, a subsidiary of Bouygues,
announced that through their joint-venture “BTJV Myanmar”, they were awarded by Singaporean
developer Yoma Strategic Holdings, the Yoma Central project. The construction project inYangon is comprised of two office towers, one hotel tower, and one residential tower, on top of a large
retail podium with. An aspect of the construction project is the conservation of the former headquartersof the former Burma Railway Company.
In a speech of Cyrus Pun, Executive Director of Yoma strategic, it appears that the joint-venture wasappealing for the project because “Bouygues Construction has unrivalled experiences in the field of
heritage conservation, coming from a history of restoration projects which includes some of the mostprestigious historic hotels in Europe, [while] Japan's Taisei Co. is one of the oldest and biggest
construction companies in Japan.”
The Yoma Central project comes under Meeyahta Development Ltd, a joint-venture between Yoma
Strategic (48%), First Myanmar Investment Company Limited (12%) ("FMI"), the Mitsubishi
Corporation and Mitsubishi Estate (30%), the International Finance Co. (5%) ("IFC") and the AsianDevelopment Bank (5%).
GCR Staff, ”Bouygues, Kajima, Taisei win $1.1bn of work in Myanmar as Rohingya crisis continues,” Global Construction Review,
29
November
2017,
http://www.globalconstructionreview.com/news/bouygues-kajima-taisei-win-11bn-work-myanmar-rohin/(accessed 9 December 2019).
107
Yoma Strategic Holdings Ltd. press release, “Peninsula Yangon to be built by Construction Giants, Bouygues Construction andTaisei,” Markets Insider, 30 November 2017, https://markets.businessinsider.com/news/stocks/yoma-central-and-the-peninsulayangon-to-be-built-by-construction-giants-bouygues-construction-and-taisei-1010017784 (accessed on 9 December 2019).
108
Myanmar Insider, “Yoma Central and the Peninsula Yangon to be built by Construction Giants,” Myanmar Insider, 12 January 2018,https://www.myanmarinsider.com/yoma-central-and-the-peninsula-yangon-to-bebuilt-by-construction-giants/(accessedon9
December 2019).
106

55

Case 28: Collaboration to explore joint opportunities in construction in Europe,
Africa and Asia 109 110
CHARACTERISTICS OF THE COMPANIES
Azusa Sekkei Corporation
Ltd

Ingérop SAS

Size

large

Size

large

HQ

Tokyo, Japan

HQ

Reuil Malmaison, France

About

Azusa Sekkei is an architecturaldesign firm. Its activities vary fromprojects related to the airport market,
sport business, and public facilities
such as government buildings andschools, medical and health carefacilities, and in fields including urban
planning, logistics and production.

About

Ingérop is an engineering andconsulting
firm
focusingonsustainablemobility,energytransition, and living environment. It
operates along four business lines:
building, water & environment,
energy & industry, and urban
development & transportation..

CHARACTERISTICS OF THE PARTNERSHIP
Form of partnership

Third market

Year

Details on joint project(s)Partnership

Europe, Africa, Asia

2018

Collaboration to explore joint
opportunities in construction

DETAILS ON THE PARTNERSHIP
On 25 April 2018, Azusa Sekkei and Ingérop announced the two companies have entered into a“strategic alliance.” The relationship was probably facilitated by French Government agency BusinessFrance, as it was communicated on its twitter account. Both companies expressed this collaboration
was driven by a desire to geographically expand their activities: for Ingérop in Asia, and Azusa Sekkei
in Europe and Africa, and more particularly French-speaking countries.
Furthermore, the strategic alliance plans on fostering exchanges between structural engineers andarchitectural designers between the two companies. Furthermore, Azusa Sekkei and Ingérop areplanning to collaborate on projects in Europe, Africa, and Asia, and specifically thosecommissioned by JICA, the French Development Agency (AFD) and the Asian Development
Bank (ADB).

Azusa Sekkei press release, “Strategic alliance with INGEROP (France) (original title in Japanese: フランス INGEROP (アンジェロップ)社と戦略的提携), Azusa Sekkei website, 26 April 2018, https://www.azusasekkei.co.jp/information/news/view/191 (accessed
5 February 2020).
110
Business France Japan Office (original name in Japanese : フランス貿易投資庁・ビジネスフランス), Twitter post, 26 April 2018,
8:23 a.m, https://twitter.com/i/web/status/989283666378608642 (accessed 6 February 2020).
109

56

2.3.7. Case studies in wholesale & retail trade
Case 29: Distribution in Africa 111 112 113 114 115
CHARACTERISTICS OF THE COMPANIES
Toyota Tsusho
Corporation

CFAO SA

Size

large

Size

large

HQ

Nagoya, Japan

HQ

Sèvres, France

About

CFAO SA is a French company
specialising in the automotive
distribution,
pharmaceuticalproducts and services, shopping
centerandsupermarket
management, manufacturing ofmass consumption products as wellas in the new technologies andenergy sectors.

About

Toyota Tsusho Co., is a trading
company. The company markets
automobiles, trucks, steel products,
industrial
machinery,
chemicalproducts, and energy in both domestic
and overseas markets.

CHARACTERISTICS OF THE PARTNERSHIP
Form of partnership

Third market

Year

Details on joint project(s)Acquisition

Africa2012

Distribution

DETAILS ON THE PARTNERSHIPAs early as in the 1990s, Toyota Tsusho recognized CFAO as a competitor in automobile-related
business and sought for possibilities of collaboration. The French company had indeed been doing
business in French-speaking African countries since the 1880s, mainly in the Northern and Westernareas of the continent. As in 2012, CFAO parent company started selling stocks, Toyota Tsusho
started to gradually buy shares of the French trading company. As of December, Toyota Tsusho
owned 97.8 percent of CFAO. The investment represented approximately 2.3 billion euros, the mostimportant M&A deal for Toyota Tsusho at the time. The financing of the acquisition was supported by
JBIC, together with the commercial banks of Tokyo-Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho,
which concluded a loan agreement covering part of the necessary acquisition funds (approximately
2.26 million euros). This financing was agreed within the framework of a specific program to support
overseas M&A of Japanese companies despite a strong yen.

Toyota Tsusho Co. press release, “Toyota Tsusho Co. Completes Tender Shares of CFAO S.A.,” Toyota Tsusho Co. website, 24
December 2012, https://www.toyota-tsusho.com/english/press/detail/121224_001825.html (accessed 14 November 2019).
112
Japanese Institute for Overseas Investment, “Collaboration of Toyota Tsusho with CFAO on African strategy (original title inJapanese: 豊 田 通 商 、 CFAO と 協 業 す る ア フ リ カ 戦 略 ),” Japanese Institute for Overseas Investment, September 2015,
https://www.joi.or.jp/modules/downloads_open/index.php?page=visit&cid=22&lid=1865 (accessed 14 November 2019).
113
ToyotaTsushoCo.,“Collaboration
with
CFAO,”
ToyotaTsushoCo.
website,https://www.toyotatsusho.com/english/csr/business/case04.html (accessed 14 November 2019).
114
Olivier Caslin, “Richard Bielle: “CFAO et Toyota Tsusho Co. sont très complémentaires," Jeune Afrique, 27 July 2016,
https://www.jeuneafrique.com/345005/economie/richard-bielle-cfao-toyota-tsusho-Co.-tres-complementaires/(accessed
14
November 2019).
115
JBIC press release, “Financing for the acquisition of French CFAO S.A. supporting overseas M&A of Japanese companies basedon the emergency system facing strong yen (original title in Japanese: フランス共和国法人 CFAO S.A.の買収資金融資について、円
高 対 応 緊 急 フ ァ シ リ テ ィ に 基 づ き 日 本 企 業 の 海 外 M&A を 支 援 )," JBIC website, 29 January 2013,https://www.jbic.go.jp/ja/information/press/press-2012/0129-6355.html (accessed 14 November 2019).
111

57

In an interview with the Japanese Institute for Overseas Investment in 2015, Kenji Suzuki, Head of PanAfrica Regional Strategic Business Unit Office, Strategic Alliance Department, General Manager of
Toyota Tsusho highlighted three main motivations behind the acquisition, Firstly, he indicated that there
was an affinity between the corporate strategies of both companies. Secondly, he argued that a coreadvantage of CFAO is the deep knowledge its employees have of the African continent. The vast majorityof them had worked in Africa, often in several countries, and sometimes for an extensive period of timeof over 30 years. Lastly, the acquisition was greatly driven by complementary geographical coverage, as
CFAO business was primarily in northern and western Africa, while Toyota Tsusho's operations wererooted in eastern and southern Africa.
Expansion of business activities in 53 out of 54 African countries

East/South –focused
33 countries

West –focused
34 countries

CFAO
Toyota Tsusho
Both companies

Complementary relationship with CFAO

Figure 1. Expansion of business activities in 53 out of 54 African countries thanks to theacquisition of CFAO by Toyota Tsusho (Source: Japanese Institute for Overseas Investment)
Since the acquisition of CFAO by Toyota Tsusho, several projects have been jointly conducted in Africa.
Some examples include: a joint venture of CFAO and Yamaha to produce and sell motorcycles in Nigeria,
the sale and import of Japanese tool manufacturer Makita in Cameroon, or a retail shopping mallbusiness with Carrefour in 8 countries in Africa (Cameroon, Congo, Côte d’Ivoire, Gabon, Ghana,
Nigeria, Democratic Republic of Congo and Senegal).
Toyota Tsusho and CFAO have indicated combining their approaches in doing business have been
beneficial: for example, while Toyota Tsusho introduced CFAO the culture of safety and improvement(‘kanzen’), CFAO stressed its know-how in terms of risk management. The acquisition also enabled
Toyota Tsusho to enlarge its business portfolio, notably in the pharmaceutical sector and in mass retail.
Lastly, commenting on the management of the partnership in an interview with Jeune Afrique in July
2016, Richard Bielle, at the time Chairman of the Management Board of CFAO, stated that CFAO hasretained autonomy as Toyota Tsusho is “leaving [the] group to operate exactly as before”. The latter also
highlighted that Toyota Tsusho has conversely referred to the acquisition more as an “alliance”. However,Richard Bielle also mentioned in the same interview that the acquisition induced the loss of certain
distribution contracts for the French group with other Japanese companies such as Isuzu or Nissan, towhich CFAO was previously customer or supplier.

58

Case 30: Vehicle logistics in Africa 116 117
CHARACTERISTICS OF THE COMPANIES
Toyota Tsusho
Corporation

NYK LINE

Size

large

Size

large

HQ

Nagoya, Japan

HQTokyo, Japan

About

Toyota Tsusho Co., is a trading
company. The company markets
automobiles, trucks, steel products,
industrial
machinery,
chemicalproducts, and energy in both domestic
and overseas markets.

About

Nippon Yusen mainly provides
marine transportation services andtransportation management solution
from international hub ports to both
domestic and international ports.
The Company operates containertransportation, specialized carriers,
logistics, and cruise lines.

Bolloré SA
Size

large

HQ

Puteaux, France

About

Bollore operates as a holding
company. The Company offers
transportation,
logistics,
communications, and electricity andstorage solutions, as well as
managesaportfolioofcommunication and agricultural
sector and manufacturing of steel
tubes. Bolloré Transport & Logistics
is the result of the union between the
Bolloré Group's four traditional
businesses: Bolloré Ports, Bolloré
Railways, Bolloré Energy and
Bolloré Logistics

CHARACTERISTICS OF THE PARTNERSHIP
Form of partnership

Third market

Year

Details on joint project(s)Joint-venture

East Africa

2016

Vehicle logistics

Toyota Tsusho Co. press release, “Toyota Tsusho Enters Agreement to Establish Vehicle Logistsics Company in Kenya –Launching services in East Africa, which is experiencing vehicle import growth,” Toyota Tsusho Co. website, 18 October 2016,
https://www.toyota-tsusho.com/english/press/detail/161018_003848.html (accessed 5 February 2020).
117
NYK LINE press release, “NYK Established First Exclusive RORO Terminal in Egypt,” NYK LINE website, 28 January 2020,
https://www.nyk.com/english/news/2020/20200128_01.html (accessed 5 February 2020).
11659

DETAILS ON THE PARTNERSHIP
On 18 October 2016, a joint-venture agreement was signed between NYK LINE, Toyota Tsusho, andthe Kenyan subsidiary of French Bolloré Transport & Logistics to establish Bolloré NYK Auto Logistics
Limited. The JV is a vehicle company for new car imports into East Africa, offering a variety ofservices ranging from inland transport, pre-delivery inspection, as well as car storage andcustoms clearance. Kenya was chosen as the country is experiencing strong economic growth, it is“expected to see a rise in finished car imports and become a gate pot for countries in East Africa”.
The establishment of this venture was announced previously at the occasion of the sixth Tokyo
International Conference on African Development (TICAD) on 27 and 18 August 2016, during which washeld a ceremony celebrating the MoUs reached between Japanese enterprises, African countries, andothers. Furthermore, this collaboration follows a letter of intent signed in January 2016 by Toyota Tsusho
and Bolloré “to work towards a collaboration in Africa and other regions,” including on infrastructure andlogistics businesses.
Then, on 28 January 2020, NYK LINE, Toyota Tsusho, and Bolloré Africa Logistics reached anagreement with the General Authority for the Suez Economic Zone “to set up and operate a dedicatedautomotive terminal at East Port Said in Egypt.” The collaboration was explained by the complementarystrengths of the three companies, as “the knowledge and experience that Bolloré has accumulated
through its port operations in Africa will be utilized together with the achievements and know-how that
Toyota Tsusho has acquired in a wide range of businesses inside Egypt and the skill and expertise that
NYK has gained in its automotive transportation and terminal operations throughout the world, resulting
in a rather valuable service from the three companies.”60

2.2. Characteristics of cooperation
Some trends are observable in the characteristics of the companies involved incooperation in third countries, in terms of country of origin of the European company, andcompany size; as well as in the business cooperation itself, with regard to the type of relationship,
the targeted third country, and the sector.

2.2.1. Characteristics of partner companies
2.2.1.1. Country of origin of the company
Although for several stakeholders interviewed for this research, the country of origin of thepartner company was not immediately relevant compared to other parameters such as pricecompetitiveness and technological advantage, two dynamics can be highlighted. First, sometrends are observable when considering the country in correlation to a certain industrial
focus. For instance, German companies benefit from a leading position in automotive supply,
and Turkish companies are highly competitive in the area of construction and manufacturing (case25 and 26).
Second, some patterns arise when considering the partnerships through the prism of therelationship between the country of origin of the company, and the third party or region.
This link may be historical, cultural and linguistic, as reflects, for example, the important relations
between some countries and their former colonies. Additionally, this closer link between theEuropean country or Japan and the third country or region may also be the result of a proactive
stance in economic diplomacy. This concretely induces that the European or Japanese partnercompany is more likely to have already experiences of business activities in this third country or
region, and a better understanding of the market. Furthermore, it can also mean that the partnercompany is more likely to interact directly or indirectly through its government with the governmentof the third country, which can be of strategic importance for, for instance, projects relating to
public services and infrastructures, or more generally information collection on the local businessenvironment. 118 Conversely, business collaborations overseas may be affected when diplomaticand trade relations between the country of origin of one of the companies and the third country inwhich the project is based deteriorate. 119
In this respect, the link between the country origin of the company and the third country
seems particularly important in Africa. Indeed, between 24 September and 25 October 2019,
JETRO surveyed Japanese companies in Africa, asking which country origin is more promising
for third-country alliance on the continent, leaving the possibility for multiple answers. For

See 3.1. Understanding third market strategies, and in particular 3.1.2 Regional focuses for a geographical breakdown.
Japanese Government, Agenda of the 39th Meeting on Strategy relating Infrastructure Export and Economic Cooperation (17October 2018) on the theme of third country cooperation (original title in Japanese: 第３９回経協インフラ戦略会議（2018 年 10 月17 日）テーマ：第三国連携 議事次第), 17 July 2018, https://www.kantei.go.jp/jp/singi/keikyou/dai39/siryou1.pdf (accessed 26
February 2020).
118
119

61

Japanese companies, four European companies emerged as quality partners: France (14.1% of
respondents), Germany (5.2%), Turkey (3.0%) and the UK (2.0%) (Figure 2). 120
Following the same reasoning, when a third company is involved in European andJapanese business cooperation, in general in a consortium or a joint-venture, it is often a local
one. Illustrations include case 9 with a tripartite partnership between Sumitomo Corporation,
ENGIE, and Indonesian company Supreme Energy in geothermal plant projects, and case 13 withthe cooperation of Toyota Tsusho, ENGIE, and Egyptian construction company Orascom.
Reasons may be that a local partner might have an advantage in terms of knowledge of the market
and its stakeholders, as well as benefit from cost competitiveness.

Figure 2. Country Origin for Promising Third-Country Alliance in Africa, for Japanesecompanies (Multiple Answers) (Source: JETRO) 121
2.2.1.2. Size of the company

JETRO, Overseas Research Department, Middle East & Africa Division, 2019 Survey on Business Conditions of Japanese AffiliatedCompanies in Africa (original title in Japanese: (アフリカ進出日系企業実態調査（2019 年度調査) ), 16 January 2020, Tokyo,
https://www.jetro.go.jp/ext_images/_News/releases/2020/dea99c70c5f8d086/1_0121.pdf (accessed 24 January 2020).
121
Ibid.
120

62

Two observations can be made on the size of the companies involved in EU-Japanbusiness cooperation in third markets. Firstly, one common scheme for business cooperation inthird countries is in a large-scale project of infrastructures, especially in energy andtransportation. Those projects induce high risk-taking and high costs that can only be
assumed by the largest companies together in a consortium or joint-venture. 122 Nonetheless,this does not prevent SMEs to be involved as suppliers for example.
A second observation is projects involving SMEs are often a case in which a large,
cash-rich company is investing in, or acquiring a specific technology. Indeed, this approachseems to be particularly relevant when the first is a Japanese company, and the second a
European. Examples include case 14 with Tokyo Century Corporation, Kyudenko Corporation,
and Kyuden Mirai Energy Company jointly investing in a special purpose company engaged in a
project developed by Ciel et Terre SAS, as well as case 17 with the investment of Marubeni in
Azuri Technologies. As for Japanese SME, one Japanese business organisation underlined that,as a rule of thumb, Japanese SME tend to rely primarily on general trading companies 123 when
considering internationalisation.

2.2.2. Characteristics of business relationship2.2.2.1. General trend
There are unfortunately little data available on the magnitude of European and Japanesebusiness partnerships for operating in third countries – or in other words, to which extent they areinterested in engaging in such alliance, to which extent they have had already experienced some,etc. Nonetheless, the business climate survey conducted by the German Chamber of Commerceand Industry in Japan in 2019 offers a first insight of the general trend. 124
When asked whether German companies’ subsidiaries in Japan have been or are involvedin business activities with Japanese partners outside Japan, 69% answered “yes” (Figure 3);
the latter number being on a consistent increase from 64% in 2018, and 54% in 2017. Furthermore,
46% of the surveyed companies have indicating generating revenues with Japanesecustomers outside Japan at least to the same extent as in Japan itself; and depending on
the industry, revenue ratio is 1 (Japan) to 4 (outside) Japan. 125 Thus, for German companies
having already a presence in Japan, partnerships with Japanese businesses in third countries arehighly strategic and profitable. It would be interesting to also consider to what extent German
companies that do not have a foothold in Japan are considering, or have experienced suchpartnerships. 126
See 2.3. Drivers for cooperation, and 3.2. Cooperation schemes in third countries.
See 3.3. Japanese general trading companies.
124
German Chamber of Commerce and Industry in Japan (AHK Japan) and KPMG AG Wirtschaftsprüfungsgesellschaft , German
Business
in
Japan
2019,
January
2019,
Tokyo,
https://japan.ahk.de/fileadmin/AHK_Japan/Dokumente/German_Business_in_Japan_2019_EN.pdf (accessed 7 November 2019).
125
Nikolaus Boltze, “Drivers, challenges and opportunities for EU-Japan business collaboration in third markets,” Presentation, EUJapan Centre for Industrial Cooperation seminar on EU-Japan Business Collaborations in Third Markets, Tokyo, 3 December 2019,https://www.eu-japan.eu/sites/default/files/imce/ahk_eu-japan_business_partnerships_in_3rd_countries_031219.pdf (accessed 3
December 2019).
126
German Chamber of Commerce and Industry in Japan (AHK Japan) and KPMG AG Wirtschaftsprüfungsgesellschaft , German
Business
in
Japan
2019,
January
2019,
Tokyo,
https://japan.ahk.de/fileadmin/AHK_Japan/Dokumente/German_Business_in_Japan_2019_EN.pdf (accessed 7 November 2019).
122
123

63

Considering
involvement
6.0%
Yes
69%
No
28%
Figure 3. Japanese subsidiary of German companies’ involvement in projects/businessactivities with Japanese partners outside Japan in 2019 (Source: AHK Japan) 127

2.2.2.2. Form of cooperation
The analysis of the form of business cooperation has been limited by the use of a vast
vocabulary of sometimes unclear (legal) definition, especially in terms of task and risk-sharing
between the companies involved. Nonetheless, from the review of business cases, three patterns
seem to stand out.
A first observation is that memoranda of understanding appear to be important andfrequent practice to formalize closer collaboration between a European and Japanesecompany, especially in its initial stages. It represents a sort of ‘declaration of interests’ wherebycompanies express their will to cooperate, on which grounds, and perhaps more importantly,
targeting which third markets. This can be illustrated by case 5 with Hitachi and Veolia: the MoU
between both companies was signed a couple of months only after they secured a joint project in
Iraq. Furthermore, while the MoU explicitly identified the Middle East, Africa and the Asia Pacificregions as the targets of this collaboration, it can be said that it enabled a favourable backgroundfor Hitachi and Veolia to then secure another project in Vietnam in 2015. Another example is thecooperation between NTT DATA and Citibeats which lays out the terms for the joint developmentof the citizen engagement platform (case 20).
A second observation is that the formalisation of the business partnerships under the formof a joint-venture or consortium is the standard approach in the case of project-specificcooperation. One advantage is that setting up a JV or consortium enables to rather clearly define
the investment, tasks, and risks undertaken by each company, as it seems to be the case between
Mitsubishi Heavy Industries and Vestas Wind Systems (case 10), or Toyo Kohan and Tosyali
Holding (case 26). Setting a JV or consortium has the advantage of leaving the room for a thirdpartner, as is the case for example between Toyota Tsusho and ENGIE in Egypt (case 13).
German Chamber of Commerce and Industry in Japan (AHK Japan) and KPMG AG Wirtschaftsprüfungsgesellschaft , German
Business
in
Japan
2019,
January
2019,
Tokyo,
https://japan.ahk.de/fileadmin/AHK_Japan/Dokumente/German_Business_in_Japan_2019_EN.pdf (accessed 7 November 2019).

127

64

Project-specific cooperation also encompasses contract/supplier business relationship, such as
between Mitsubishi Corporation, Toshiba Plant Systems, and thyssenkrupp in case 11.
A third observation is that acquisitions appear to be particularly strategic for European
and Japanese partnerships overseas, enabling the acquiring company to diversify its
geographical coverage and enlarge its business portfolio. It is particularly relevant to thecases 19, 24 and 29: the acquisition of Everis by NTT Data enabled the Japanese company to‘acquire’ its Latin American portfolio, the acquisition of Chlorine Engineers by the Italian company
De Nora its activities in Asia, and the acquisition of CFAO by Toyota Tsusho its foothold in Frenchspeaking Western Africa. Conversely, investments from one company into another seem tofollow the same ambitions and are particularly driven by innovative and attractive technologies.

2.2.2.3. Third country/regions
Although no comprehensive study enables to obtain a comprehensive understanding ofwhat are the targeted markets for European and Japanese business partnerships for operationsin third countries, once again, the business climate survey conducted by the German Chamber ofCommerce and Industry in Japan in 2019 provides a useful insight on projects that have been
carried out, and German companies’ ambitions. The survey asked to German companies present
in Japan the “regions in which projects are planned, currently in progress or have already been
carried out” between German and Japanese companies. Results demonstrate that Japan
represents for German companies a strategic business hub for Asian markets which areperceived as the most promising with ASEAN (Vietnam, Thailand, Singapore, Philippines,
Myanmar, Malaysia, Laos, Indonesia, Cambodia, and Brunei) concerning 59% of surveyed
companies, Greater China 37% and India 20%. The European market was also considered asa market with great potential for business partnerships (37%). However, South America and Africa
were not considered as appealing markets, respectively concerning 14% and 11% of surveyed
companies (Figure 4).
The data provided by the French Embassy in Japan offers a slightly different picture of thetargeted third markets when considering cooperation between French and Japanese companies
overseas. Indeed, out of the 52 projects identified, a majority of them are conducted in regionswith mainly developing economies, with 35% projects in Asia-Pacific, 23% in South America,
15% in Africa, and 13% in the Middle East; with only 10% of projects in Europe and 4% in North
America (Figure 5). 128 This difference might be explained by factors related to the country of originof the company as exposed before, or by different statistical methods. 129

Directorate-General of the Treasury of France (in French: DG Trésor), Tokyo Regional Economic Service (in French: Serviceéconomique régional de Tokyo), Sustainable Development Division (in French: Pôle Développement Durable), “Energy Transition andSustainable
Cities:
Mapping
Franco-Japanesecooperationin
third
countries,”
15
april
2020,
https://www.tresor.economie.gouv.fr/Articles/2020/04/15/energy-transition-and-sustainable-cities-mapping-franco-japanesecooperation-in-third-countries (accessed on 23 April 2020).
129
We notice in particular that the study of the French Embassy in Japan focuses on specific sectors that are “renewable energies(solar, wind, geothermal) and natural gas, railway and public transportation, water and sewerage, as well as waste treatment,”
128

65

ASEAN

59.0%

Greater China

37%

Europe

37%

India

20%

South America

14%

Africa

11%

Other

11%
0

20

40

60

80

Figure 4. Regions in which projects are planned, currently in progress or have alreadybeen carried out between German and Japanese companies in 2019 (Source: AHK Japan)
130

North America
4%Asia-Pacific35%

Europe10%Middle East
13%

Africa15.0%

South America
23%

Figure 5. Geographical distribution of identified business cooperation of French andJapanese companies in third countries (Source: French Embassy in Japan) 131

German Chamber of Commerce and Industry in Japan (AHK Japan) and KPMG AG Wirtschaftsprüfungsgesellschaft , German
Business
in
Japan
2019,
January
2019,
Tokyo,
https://japan.ahk.de/fileadmin/AHK_Japan/Dokumente/German_Business_in_Japan_2019_EN.pdf (accessed 7 November 2019).
131
Directorate-General of the Treasury of France (in French: DG Trésor), Tokyo Regional Economic Service (in French: Serviceéconomique régional de Tokyo), Sustainable Development Division (in French: Pôle Développement Durable), “Energy Transition andSustainable
Cities:
Mapping
Franco-Japanesecooperationin
third
countries,”
15
april
2020,
https://www.tresor.economie.gouv.fr/Articles/2020/04/15/energy-transition-and-sustainable-cities-mapping-franco-japanesecooperation-in-third-countries (accessed on 23 April 2020).
13066

As for Japanese companies, another survey conducted by JETRO offers some hints onmarkets that are targeted for overseas expansion. Surveyed companies were asked whether they“currently have an overseas base and planning to further expand operations.” Results
demonstrate first that most targeted regions are in Asia with 67.3% for “ASEAN6” (Singapore,
Thailand, Malaysia, Indonesia, Philippines and Vietnam), 55.4% for China, 21.3% for Taiwan,
13.5% for Hong Kong, 13.6% for Korea, and 20.9% for India. Then, Japanese companies showinterest for business expansion in European market with 21.9% for Western Europe, 4.5% forCentral-Eastern Europe, and 4.1% for Russia & CIS. North America, with the US and to a lesser
extent Canada, respectively 32.3% and 3.2% are also among targeted regions. Lastly, otherpromising market seems Mexico for 4.6% of surveyed companies (Table III) 132
Table III. Ambitions of Japanese companies for overseas expansion by country andregion (Source: JETRO) 133

Nonetheless, it is worth mentioning that the picture might be different on the Japaneseside in terms of the targeted and ambitions vis-à-vis third country market when considering
partnerships per se with European companies. Indeed, from the discussions of the author withseveral Japanese companies, business organisations and officials, it appears Japanesebusinesses are more inclined to seek partnerships with Europeans when considering regionsin which they have poor foothold and European companies have experience, such as theAfrican market. 134 This is reflected at the level of the Japanese authorities, which have indeed
been concentrating their efforts on encouraging business partnerships in Africa.

JETRO, Overseas Research Department, FY 2018 Survey on the International Operations of Japanese Firms, 7 March 2019,
Tokyo, https://www.jetro.go.jp/ext_images/en/reports/survey/pdf/jafirms2018.pdf (accessed 5 December 2019).
133
Ibid.
134
See 3.1,2. Regional focus: Africa
132

67

2.2.2.4. Sectors
In his 2008 study on the cooperation between French and Japanese companies in third
countries, Aya Yamazaki highlights several privileged sectors, offering a helpful insight for thecase of cooperation between European and Japanese companies. Firstly, large-scale industrial
contracts seem to draw together companies that have better chances to secure a project as aconsortium, and or keen to reduce their own costs and risk-taking. Secondly, raw materials andenergy, and in particular renewables, is a sector in which French and Japanese companies areoften jointly awarded projects ranging from exploration rights, to production and commercial
exploitation in third markets. Then, other significant areas of cooperation are electricity
production and water treatment, a pattern that seems to be confirmed by the numerous cases
compiled in this report. 135
The data gathered by the French Embassy in Japan confirm these observations (Figure6). Even more, the study highlights a specific geographical distribution (third market) by sector.
Among its main findings are that projects in solar and wind energies tend to be in South American
markets (respectively 70% and 56%), while projects in the natural gas sector and in railway andpublic transportation tend to be located in Asia-Pacific (for both sectors 45%) (Figure 7). 136
Miscellaneous
6%

Solar
19%

Railway & Public
transportation
17%

Wind
17%

Enery - Others
6%

Natural Gas
17%

Energy-fromwaste & Waste
treatment
4.0%
Water &
Sewerage
8%

Geothermal
6%

Figure 6. Sectorial distribution of identified business cooperation of French andJapanese companies in third countries (Source: French Embassy in Japan) 137

Aya Yamazaki, “Cooperation of French and Japanese companies in third markets (original title in French: La coopération desentreprisesfrançaisesetjaponaises
enpays
tiers”),
Conference
paper,
October2008,
p9-18,
https://www.researchgate.net/publication/322419827_La_cooperation_des_entreprises_francaises_et_japonaises_en_pays-tiers(accessed 19 December 2019).
136
Directorate-General of the Treasury of France (in French: DG Trésor), Tokyo Regional Economic Service (in French: Serviceéconomique régional de Tokyo), Sustainable Development Division (in French: Pôle Développement Durable), “Energy Transition andSustainable
Cities:
Mapping
Franco-Japanesecooperationin
third
countries,”
15
april
2020,
https://www.tresor.economie.gouv.fr/Articles/2020/04/15/energy-transition-and-sustainable-cities-mapping-franco-japanesecooperation-in-third-countries (accessed on 23 April 2020).
137
Ibid.
135

68

SolarEurope11%

Africa10%

AsiaPacific11%

MiddleEast
10%

South
America70%

AsiaPacific
10%
North
America11%
Africa11%
Europe11.0%

WindAfrica22%

Natural Gas

SouthAmerica
56%
Water & Sewerage Treatment

AsiaPacific45%

Middle
East
50%

AsiaPacific50%

MiddleEast
22%
Railway & Public Transportation
North
America
11%
AsiaPacific45%

Africa22%⇒ Geothermal energy: 100% of the projects
are located in the Asia-Pacific region.
⇒ Energy-from-waste & Waste treatment:
100% of the projects are located in Europe.

Middle East
22%
Figure 7. Geographical distribution of identified business cooperation of French andJapanese companies in third countries (Source: French Embassy in Japan) 138

138
Directorate-General of the Treasury of France (in French: DG Trésor), Tokyo Regional Economic Service (in French: Serviceéconomique régional de Tokyo), Sustainable Development Division (in French: Pôle Développement Durable), “Energy Transition andSustainable
Cities:
Mapping
Franco-Japanesecooperationin
third
countries,”
15
april
2020,

69

In addition to these sectors, it seems transportation and digital (in particular for SMEs) arealso promising areas of cooperation for European and Japanese companies.

2.3. Drivers for cooperation
If some drivers presented in this section are a prerequisite to any business cooperation,some are also specifically related to a third-country project. Such latter motivations are rooted in
a common ambition of the partner companies to create the most favourable conditions for
operating in this third country while enhancing the competitiveness of the products and services
they offer together. Additionally, collaborations for third-country projects are also driven by thecompany’s respective broader strategy in expanding their activities and for European companies,vis-à-vis their position in Japan.

2.3.1. Long-term relationshipThe first driver for the establishment of cooperation between European and Japanesecompanies is the existence of a long-term relationship between them.
First of all, the case studies demonstrate that relying on a previous relationship or the
background of a previous collaboration, is in most cases a preliminary condition for engaging ina more perennial form of partnership. It is a crucial step for both companies to get acquainted andbuild trust with respect to each other’s’ quality of services and technology, management. For
instance, in case 5, in the press release announcing the signature of their MoU for collaboration
third-country projects with Veolia Water Technologies, Hitachi explains “the two companies haveworked together on numerous other water-related projects. It was this background which led tothis most recent and closer collaboration.” 139 Similarly in the case of the joint-venture between
Tokyo Gas and ENGIE, with both companies stating that their relationship dates back to 1983.
Another example is case 24: if De Nora fully acquired Chlorine Engineers in 2010 from Mitsui, it
was in contact with the latter as early as in 1969 as they formed the JV “Permelec Electrode”.
Cooperation in third countries is also for European and Japanese companies a strategic
approach to build on a long-term relationship that, beyond the project at stake, may open doors
to new opportunities. The partnership can thus set the background for other projects. Indeed,
an illustration of this dynamic is in the survey of JETRO of Japanese companies for business inAfrica. The organization reveals that 25.9% of surveyed companies esteem that advantages forsuch collaboration reside in the fact that “joint project with partner countries is already showing
tangible progress or has the likelihood of moving forward,” and 13.0% that in the fact that“business related to project that future partner countries are responsible is either moving forward

https://www.tresor.economie.gouv.fr/Articles/2020/04/15/energy-transition-and-sustainable-cities-mapping-franco-japanesecooperation-in-third-countries (accessed on 23 April 2020).
139
Hitachi press release, “Hitachi to Promote Cooperation with Veolia Water Technologies, the World Leader in Water Treatment, on
Overseas
Water
Infrastructure
Projects,”
Hitachi
website,
11
June
2014,
http://www.hitachi.com/New/cnews/month/2014/06/140611b.pdf (accessed 18 November 2019).

70

or has the likelihood of emerging” (Figure 10). 140 Additionally, for some European companies, andin particular SMEs, partnership in a third country with a Japanese company may also be an initial
step to build on the relationship and prove the quality of services and products beforehand to,ultimately, enter the Japanese market. This last point may be illustrated by case 22 as French
SME IoTerop has expressed that their cooperation with ACCESS has first occurred in Southeast
Asia, now targeting the Japanese market.

2.3.2. Complementary technologies and expertise
Another core motivation for European and Japanese companies to enter in businesscooperation is, surely, the presence of complementary technologies and expertise.
The first aspect of this complementariness is to benefit from access to newtechnologies or new business activities from one company to another. For example, the case
20 of collaboration between NTT DATA and Citibeats demonstrates the appetite for the Japanesecompany to benefit from the unique technology of the Spanish start-up. Another example is thecase 29 of the acquisition of CFAO by Toyota Tsusho whereby Toyota Tsusho enlarged its
business portfolio in the pharmaceutical and mass retail sectors, in which it did not haveexperience previously.
Meanwhile, complementary technologies and expertise enable to enhance thecompetitiveness of the partnership of the two companies. An illustration of this is thecollaboration between Taisei Corporation and Bouygues in a construction project in Myanmar(case 27). Drivers for cooperation include the significant importance of companies’ respective
strengths in the field, but also of Bouygues’ particular experience with heritage conservation andrestoration projects in Europe. In fact, complementary technologies and expertise may be at theheart of the business collaboration and imposed by the bid itself to which the companies aim toanswer.

2.3.3. Reducing costs / financial contribution
A third driver for European and Japanese partnerships is a financial one: reducing costs
and securing the necessary financing may be a crucial challenge for overseas projects.
A study of JETRO on the international operations of Japanese firms reveals that among
the main difficulties in doing overseas business is to ensure cost competitiveness, as expressedby 36.9% of surveyed companies; a number that rises as up as 49.8% for large-scale enterprises(Figure 11). 141 Against this background, cooperation between European and Japanese firms is ofstrategic importance to reduce costs as it can enable the companies to rely on their partner local
resources. This observation is confirmed in part by the survey of JETRO on perceived advantages
JETRO, Overseas Research Department, Middle East & Africa Division, 2019 Survey on Business Conditions of Japanese AffiliatedCompanies in Africa (original title in Japanese: (アフリカ進出日系企業実態調査（2019 年度調査) ), 16 January 2020, Tokyo,
https://www.jetro.go.jp/ext_images/_News/releases/2020/dea99c70c5f8d086/1_0121.pdf (accessed 24 January 2020).
141
JETRO, Overseas Research Department, FY 2018 Survey on the International Operations of Japanese Firms, 7 March 2019,
Tokyo, https://www.jetro.go.jp/ext_images/en/reports/survey/pdf/jafirms2018.pdf (accessed 5 December 2019).
140

71

for such collaboration for Japanese companies in Africa, in which 15.6% of them answered the“us[e] the infrastructure network developed” by the partner company as one of them (Figure10). 142 This latter point is particularly relevant in the case 26: by manufacturing steel in a JV
located in Turkey, Toyo Kohan has gained easier access to markets in the Middle East and Africa.
The same observation can be made for case 25. Furthermore, an article of the Nikkei Asian
Review explains such partnerships can have the advantage of reducing costs for sectors such as
the agrochemical industry because the government approval and the regulatory barriers may becomplicated to overcome: “by supplying key chemicals and jointly developing new products, thehurdles can be cleared with far less hassle and financial outlay.” 143Another challenge highlighted by Japanese firms to internationalize is for 21.0% of them,of which 23,3% for SMEs, to acquire the necessary funding (Figure 11). 144 Partnership canindeed be an advantage with respect to a particular financial strength of one of the partnercompany, as in the case 7 between Acciona and Mitsubishi Corporation, in which the latter
pointed out benefitting from “strong financial support by export credit agencies and lenders.”
Additionally, for European companies, partnering with a Japanese company might induce easieraccess to information related to projects to which JICA has provided assistance, as well as toexport credits provided by JBIC, and vice versa. This approach is illustrated by the strategic
partnership concluded by Azusa Sekkei and Ingérop, and which mentions specific cooperation
for projects commissioned by JICA, AFD and ADB (case 28).

2.3.4. Market intelligence, local know-how and human resources
Market intelligence, local know-how and human resources are one of the main drivers for
European and Japanese partnerships for operating in third countries, as it appears for instancein the JETRO Survey on the international operations of Japanese firms. Among the maindifficulties highlighted by surveyed companies are first, 54.5% of them, of which 67.3% largescale enterprises, having employees that can handle overseas business, and for 54.2% ofthem have local business partners. Other challenges include for 45.1% of them having
information about local markets, such as on the likes and needs of consumers, and for 42.5%of them obtaining information about local systems, such as on tariffs, regulations, permits
and licenses (Figure 11). 145
European and Japanese partnerships thus appear as answering considerably to theseneeds. Indeed, 34% of German companies in Japan affirm that one of the advantages of suchpartnerships is the “easier accessibility of foreign markets due to internationalization” (Figure

JETRO, Overseas Research Department, Middle East & Africa Division, 2019 Survey on Business Conditions of Japanese AffiliatedCompanies in Africa (original title in Japanese: (アフリカ進出日系企業実態調査（2019 年度調査) ), 16 January 2020, Tokyo,
https://www.jetro.go.jp/ext_images/_News/releases/2020/dea99c70c5f8d086/1_0121.pdf (accessed 24 January 2020).
143
Tomohiro Arao and Takahisa Miwa, “Partnering with overseas players a win-win situation,” Nikkei Asian Review, 8 December 2015,
https://asia.nikkei.com/Business/Partnering-with-overseas-players-a-win-win-situation (accessed 19 December 2019).
144
JETRO, Overseas Research Department, FY 2018 Survey on the International Operations of Japanese Firms, 7 March 2019,
Tokyo, https://www.jetro.go.jp/ext_images/en/reports/survey/pdf/jafirms2018.pdf (accessed 5 December 2019).
145
JETRO, Overseas Research Department, FY 2018 Survey on the International Operations of Japanese Firms, 7 March 2019,
Tokyo, https://www.jetro.go.jp/ext_images/en/reports/survey/pdf/jafirms2018.pdf (accessed 5 December 2019).
142

72

6). 146 Conversely, 65.0% of Japanese companies in Africa also underlined that such partnerships
represent an opportunity for the “ab[ility] to leverage the network including business connection
owned by companies of the future partner countries” (Figure 10). 147 This driver of acquiring market
intelligence, local know-how and human resources is particularly illustrated in the case 29. Toyota
Tsusho executives indeed affirmed that “the biggest achievement we noticed after the acquisition
was that we had gain human resources with over 20, 30 years of experience in Africa.” 148

2.3.5. Pooling risks
Another driver that is not expressively mentioned by companies when entering
partnerships, despite being nonetheless important, is the advantage of pooling risk. This benefit
is crucial in some risky markets such as in Africa (Figure 8). 149 As pointed out by some trading
companies in a study of JETRO, these risks are diversified and difficult to predict, even forcompanies having a strong knowledge and experience on the local conditions. Indeed, JETRO
recalls business conditions may be considerably affected by many brutal changes among whicha change of government following a coup d’état, popular uprising, economic fluctuations greatly
influenced by the price of resources, or the lack of foreign currency. 150 Moreover, risks may also
arise not primarily from the characteristics of the project itself, but also from ’solely’ its large-scale,making it impossible for a company alone to assume all the risks and costs alone. 151 It is, forexample, the case in the sector of geothermal energy, in which the Nikkei Asian Review argues
that “companies have been reluctant to participate in projects that harness the planet’s thermalenergy because of the large investments needed,” suggesting that business partnerships might
be part of the solution to this problem. 152
This need for pooling risk is in part observable when looking at the financing of projects
such as in case 13 of collaboration between Toyota Tsusho and ENGIE for a wind farm project inEgypt. The project is indeed being financed by several Japanese, French and Egyptian banks,
covered by NEXI, an insurance corporation owned by the Japanese government.
German Chamber of Commerce and Industry in Japan (AHK Japan) and KPMG AG Wirtschaftsprüfungsgesellschaft , German
Business
in
Japan
2019,
January
2019,
Tokyo,
https://japan.ahk.de/fileadmin/AHK_Japan/Dokumente/German_Business_in_Japan_2019_EN.pdf (accessed 7 November 2019).
147
JETRO, Overseas Research Department, Middle East & Africa Division, 2019 Survey on Business Conditions of Japanese AffiliatedCompanies in Africa (original title in Japanese: (アフリカ進出日系企業実態調査（2019 年度調査) ), 16 January 2020, Tokyo,
https://www.jetro.go.jp/ext_images/_News/releases/2020/dea99c70c5f8d086/1_0121.pdf (accessed 24 January 2020).
148
JETRO, London Office, Overseas Research Department, Middle East & Africa Division, Possibilities of collaboration with Japanesecompanies in Africa (original title in Japanese: 主 要 国 企 業 の ア フ リ カ 展 開 と 日 本 企 業 と の 提 携 可 能 性 ), April 2018,https://www.jetro.go.jp/ext_images/_Reports/01/599d8aef3f68f9ff/20180001.pdf (accessed 25 November 2019).
149
JETRO, Overseas Research Department, Middle East & Africa Division, 2019 Survey on Business Conditions of Japanese AffiliatedCompanies in Africa (original title in Japanese: (アフリカ進出日系企業実態調査（2019 年度調査) ), 16 January 2020, Tokyo,
https://www.jetro.go.jp/ext_images/_News/releases/2020/dea99c70c5f8d086/1_0121.pdf (accessed 24 January 2020).
150
JETRO, London Office, Overseas Research Department, Middle East & Africa Division, Possibilities of collaboration with Japanesecompanies in Africa (original title in Japanese: 主 要 国 企 業 の ア フ リ カ 展 開 と 日 本 企 業 と の 提 携 可 能 性 ), April 2018,https://www.jetro.go.jp/ext_images/_Reports/01/599d8aef3f68f9ff/20180001.pdf (accessed 25 November 2019).
151
Aya Yamazaki, “Cooperation of French and Japanese companies in third markets (original title in French: La coopération desentreprisesfrançaisesetjaponaises
enpays
tiers”),
Conference
paper,
October
2008,
p3,
https://www.researchgate.net/publication/322419827_La_cooperation_des_entreprises_francaises_et_japonaises_en_pays-tiers(accessed 19 December 2019).
152
Kenta Ando, “Indonesia lures Sumitomo to its geothermal power sources,” Nikkei Asian Review, 19 December 2019,https://asia.nikkei.com/Business/Energy/Indonesia-lures-Sumitomo-to-its-geothermal-power-sources2 (accessed on 14 January2020).
14673

Development and Implementation of regulation or legislation

77,8%

Social & Political Instability

75,6%Financial Affairs, Financing or Foreign Affairs

67,2%

Hiring and workforce problems

59,5%

Poor infrastructure

57,2%Trade regulation

48,9%

No specific problem
5,1%
0

5.1%
20

40

60

80

Figure 8. Perceived investment environment risks (multiple answers) for Japanesecompanies for business in Africa (Source: JETRO) 153
2.3.6. Expansion of business activities
Naturally, drivers for European and Japanese partnerships for overseas projects are also
anchored into each company’s broader strategy in terms of expansion of its businessactivities, including geographically. For example, German companies are 51% assert that oneof their motivation for partnership is to “mak[e] use of the [the] company’s global sales & services
network” (Figure 9). 154 This approach can be illustrated by case 17, with Marubeni’s investment
in Azuri Technologies being driven by very innovative technology, but also by an ambition to
expand in developing markets.

2.3.7. Strategic importance of the Japanese subsidiary
Another key driver for European companies to engage in partnership with Japanesecompanies overseas is also to reinforce the strategic importance of their Japanesesubsidiary to the company. This advantage was indeed considered by 30% of surveyed
German companies as an advantage of such a cooperation. This parameter may be also

JETRO, Overseas Research Department, Middle East & Africa Division, 2019 Survey on Business Conditions of Japanese AffiliatedCompanies in Africa (original title in Japanese: (アフリカ進出日系企業実態調査（2019 年度調査) ), 16 January 2020, Tokyo,
https://www.jetro.go.jp/ext_images/_News/releases/2020/dea99c70c5f8d086/1_0121.pdf (accessed 24 January 2020).
154
German Chamber of Commerce and Industry in Japan (AHK Japan) and KPMG AG Wirtschaftsprüfungsgesellschaft , German
Business
in
Japan
2019,
January
2019,
Tokyo,
https://japan.ahk.de/fileadmin/AHK_Japan/Dokumente/German_Business_in_Japan_2019_EN.pdf (accessed 7 November 2019).
153

74

100

reinforced to the extent that some of them (13%) consider the Japanese market as saturated, andthus feel the need to explore third markets through the Japanese subsidiary (Figure 9). 155

2.3.8. Compliance standards and corporate culture
The last parameter that seems to contribute to driving European and Japanese companies
in collaborating in third countries is convergences in compliance standards. For instance, one
company representative has highlighted in a public intervention that one of the key assets ofpartnering with French companies has indeed been to gain leverage on avoiding corruption
and ensure transparency, facing sometimes some challenging third-country counterparts.
Similarly, if the differences between European and Japanese corporate culture might bechallenging for business cooperation, some similarities can stand out. In this regard, Aya
Yamazaki stresses for example that collaboration between Japanese and French companies
might be eased by the fact that French companies are traditionally rather aiming for the long-term
management of their activities. It contrasts with, for instance, their American counterparts that are
more likely to prioritize short-term profit.
60
50
40

51%
40%

43%
34%
25%

30

18%

20

30%
20% 19%8% 10%

100

Making use of ourcompany's global
sales & service
network

Increasing theEasier accessibility(strategic)
of foreign markets
importance of ourdue tointernationalisation Japanese subsidiary
2017

2018

13%

Saturation ofJapanese market

3%

5%

5%

Being able to attainhigher margins

2019

Figure 9. Japanese subsidiary of German companies’ main reasons for involvement inthird-country projects with Japanese companies (Source: AHK Japan) 156

German Chamber of Commerce and Industry in Japan (AHK Japan) and KPMG AG Wirtschaftsprüfungsgesellschaft , German
Business
in
Japan
2019,
January
2019,
Tokyo,
https://japan.ahk.de/fileadmin/AHK_Japan/Dokumente/German_Business_in_Japan_2019_EN.pdf (accessed 7 November 2019).
156
Ibid.
155

75

Able to leverage the network including businessconnection owned by companies of the future partnercountries
Joint project with future partner countries is either
already showing tangible progress or has the likelihoodof moving forward
Business related to project that future partner countries
are responsible is either moving forward or has thelikelihood of emerging

65.0%
26,5%

16,3%

Using infrastructure network developed by future
partner countries

15,6%

Other

14,8%

0

20

40

60

Figure 10. Perceived opportunities and advantages (multiple answers) for collaboration
with Third-Country Companies for Japanese companies for business in Africa (Source:
JETRO) 157

JETRO, Overseas Research Department, Middle East & Africa Division, 2019 Survey on Business Conditions of Japanese AffiliatedCompanies in Africa (original title in Japanese: (アフリカ進出日系企業実態調査（2019 年度調査) ), 16 January 2020, Tokyo,
https://www.jetro.go.jp/ext_images/_News/releases/2020/dea99c70c5f8d086/1_0121.pdf (accessed 24 January 2020).

157

76

80

Figure 11. Challenges for overseas business for Japanese companies (Source: JETRO) 158 159

JETRO, Overseas Research Department, FY 2018 Survey on the International Operations of Japanese Firms, 7 March 2019, Tokyo,
https://www.jetro.go.jp/ext_images/en/reports/survey/pdf/jafirms2018.pdf (accessed 5 December 2019).
159
JETRO’s appreciation of the size of enterprises (large-scale/SME) differs from the definition used in this report, and is based on Japan’s Small and Medium-sized Enterprise BasicAct. For more information: https://www.chusho.meti.go.jp/sme_english/outline/08/01_01.html
158

2.4. Cooperation schemes

In terms of cooperation schemes for business cooperation in third countries, two studies
provide a helpful classification. The first is the paper of Aya Yamazaki on the case of French andJapanese business cooperation in third countries and cited previously several times already. The
second is the Chinese government report on “Third-Party Market Cooperation Guidelines andCases,” released by China’s National Development and Reform Commission on 4 September
2019. 160 Combined, the two documents introduce five models of cooperation in third markets thatcan be applied to the cooperation of European and Japanese businesses.

2.4.1. Cooperation in products and services
Cooperation in products and services is defined by the Chinese government as a situation
whereby “Chinese businesses and their international counterparts collaborate in equipment
procurement, certification and licensing, legal and business consulting and other aspects,
providing total solutions to customers in third-party markets.” 161 An example is case 3, in
which equipment provided by each of the partner companies for Doha’s metro is greatly detailed.
Furthermore, an important area of cooperation highlighted by several Japanese companies withwhom the author discussed is O&M. Indeed, on the Japanese domestic market, O&M are often
left to a utility company or a general trading company so Japanese companies might be interested
in collaboration with EU companies that are more familiar with handling it.
Similarly, Aya Yamazaki distinguishes a cooperation scheme revolving around the supplyof equipment and services for projects in third countries. He defines it as having two main
characteristics: on the one hand a production facility located in a third country, and on the other
hand, a supplier of capital goods or services to the first. Indeed, beyond a mere seller-to-buyer
relationship, it reveals particularly stronger ties to the extent that “the acquisition of funds is basedon Project Financing and that in that the very feasibility depends a lot on the capacity of EPC
contractors.” 162An illustration of this approach applied to EU-Japan business cooperation is thecase 11 where thyssenkrupp’s Indian subsidiary supplies three boilers to Mitsubishi Corporation
and Toshiba Plant System & Services Corporation thermal plant project in the Philippines. Other
examples include projects Japanese production centres in Asia in which SUEZ or Veolia or
conferred water treatment.

2.4.2. Cooperation in engineering
The second cooperation scheme is cooperation in engineering, defined by the Chinese
guidelines as when “Chinese businesses and their international counterparts collaborate on
projects in third-party markets in such forms as EPC contracting, sub-contracting, joint
National Development and Reform Commission, People’s Republic of China, Third-Party Market Cooperation Guidelines andCases, 4 September 2019, Beijing, https://www.ndrc.gov.cn/xxgk/zcfb/tz/201909/W020190905514523737249.pdf (accessed 4
February 2020).
161
Ibid.
162
Aya Yamazaki, “Cooperation of French and Japanese companies in third markets (original title in French: La coopération desentreprisesfrançaisesetjaponaises
enpays
tiers”),
Conference
paper,
October
2008,
p7,
https://www.researchgate.net/publication/322419827_La_cooperation_des_entreprises_francaises_et_japonaises_en_pays-tiers(accessed 19 December 2019).
160

bidding, and etc.” 163 Likewise, Aya Yamazaki identifies joint-orders as a particular framework ofcooperation by which French and Japanese companies are jointly awarded large-scale industrial
and infrastructure projects, often under an Engineering Procurement and Construction (EPC)
contract. These joint orders have costs ranging between several hundred million and several
billion dollars, and thus, companies alone may not undertake them in terms of resources,
technique, and risks. The partnership of several companies hence appears as imperative to
conduct the project. In terms of contractual responsibility, Aya Yamazaki underlines that there arecases where the responsibility is assumed jointly by both parties and others in which one acts asa subcontractor. 164
An illustration of this scheme is the cooperation of Hitachi and Veolia on the desalination
plant in Iraq and the sewage treatment facility in Vietnam (case 5). Another example may also be
the geothermal power generation project in Indonesia undertaken by a consortium comprised of
Sumitomo Corporation, ENGIE, and Indonesian company Supreme Energy, and of which theconstruction cost amounted to 640 million US dollars (case 9).

2.4.3. Cooperation in investment
Another scheme is cooperation in investment that is defined by the NDRC guidelines as
when “Chinese businesses and their international counterparts invest together in third-party
markets through mergers and acquisitions, establishment of joint ventures, shareholding
etc., in which they share both risks and benefits.” Parties jointly participate in the capital of theactivity and share the risks in terms of operations and management. 165 166
Plenty of the above cases fall within this category. In terms of large-scale infrastructure
projects, an example is the Bakou-Tbilisi-Ceyhan oil pipeline where parties had acquired
exploration and production rights, sharing the risks and the profits of the activity by co-investing(case 8). As for acquisitions, they are the examples of NTT DATA and Everis Participaciones(case 19), or Toyota Tsusho and CFAO (case 29). For joint-ventures, the examples of Mitsubishi
Heavy Industries and Vestas Wind Systems (case 10) or Mitsubishi Corporation and EDF for theinvestment platform on renewables in Africa (case 15), and most cases of collaborations between
large and companies and SMEs.

National Development and Reform Commission, People’s Republic of China, Third-Party Market Cooperation Guidelines andCases, 4 September 2019, Beijing, p24, https://www.ndrc.gov.cn/xxgk/zcfb/tz/201909/W020190905514523737249.pdf (accessed 4
February 2020).
164
Aya Yamazaki, “Cooperation of French and Japanese companies in third markets (original title in French: La coopération desentreprisesfrançaisesetjaponaises
enpays
tiers”),
Conference
paper,
October
2008,
p4-5,
https://www.researchgate.net/publication/322419827_La_cooperation_des_entreprises_francaises_et_japonaises_en_pays-tiers(accessed 19 December 2019).
165
National Development and Reform Commission, People’s Republic of China, Third-Party Market Cooperation Guidelines andCases, 4 September 2019, Beijing, p46, https://www.ndrc.gov.cn/xxgk/zcfb/tz/201909/W020190905514523737249.pdf (accessed 4
February 2020).
166
Aya Yamazaki, “Cooperation of French and Japanese companies in third markets (original title in French: La coopération desentreprisesfrançaisesetjaponaises
enpays
tiers”),
Conference
paper,
October2008,
p5-6,
https://www.researchgate.net/publication/322419827_La_cooperation_des_entreprises_francaises_et_japonaises_en_pays-tiers(accessed 19 December 2019).
163

79

2.4.4. Cooperation in industry and finance combination
The fourth scheme is the cooperation in industry and finance combination, a situation
whereby: “Chinese financial institutions and their international counterparts collaborate throughsyndicated loans, joint-financing, on-lending, equity investment, and etc. in third-party
markets to broaden financing channels for businesses and reduce financing risks forthemselves, so that the co-existence and co-prosperity of industry and finance can bepromoted.” 167
Similarly, Aya Yamazaki highlights project financing as a cooperation scheme in itself.
Indeed, several cases demonstrate that the partnership between the two parties can be driven
by the access to financing provided by the other party’s government and financial
institutions. Indeed, several financial products granted by the Japanese public sector are
particularly flexible compared to their European counterparts and may cover a wide range of nonJapanese products in the field of development, such as export credits, investment credits or
credits for the development of natural resources provided by JBIC. For example, as a rule ofthumb, Japanese products need to represent only around 30% for the entire package to becovered by JBIC export loans. Additionally, Aya Yamazaki underlines that cooperation in project
financing may also involve coordination of aid between France and Japanese institutions for the
project at stake, but also cooperation from the two countries’ commercial banks. 168 169
An illustration of this cooperation in industry and finance combination is the wind farmproject in the Gulf of Suez (case 13) of Toyota Tsusho and ENGIE. Indeed, the total cost
amounted to 400 million US dollars, with JBIC providing 60% senior loan, and 40% coming from
Sumitomo Mitsui Banking Co. and Société Générale, covered by NEXI – which is, speaking of, avery typical financing arrangement with 60% provided by JBIC and 40% by commercial banks. 170
Another example can also be the “energy-from-waste” facility project in Serbia undertaken by
SUEZ and ITOCHU, which is a joint investment of the EBRD, the IFC, and the Austriandevelopment bank (case 6).

2.4.5. Strategic cooperation among businesses
The fifth cooperation scheme consists in cases of strategic cooperation among
businesses: “by entering into strategic cooperation agreements, establishing alliances or making
other efforts, Chinese businesses and their international counterparts carry out all-round, multifield and multi-level cooperation in third-party markets, involving R&D, manufacturing,
engineering, logistics, funding and talents. While drawing upon each other strengths, they

National Development and Reform Commission, People’s Republic of China, Third-Party Market Cooperation Guidelines andCases, 4 September 2019, Beijing, p62, https://www.ndrc.gov.cn/xxgk/zcfb/tz/201909/W020190905514523737249.pdf (accessed 4
February 2020).
168
Aya Yamazaki, “Cooperation of French and Japanese companies in third markets (original title in French: La coopération desentreprisesfrançaisesetjaponaises
enpays
tiers”),
Conference
paper,
October
2008,
p7-9,
https://www.researchgate.net/publication/322419827_La_cooperation_des_entreprises_francaises_et_japonaises_en_pays-tiers(accessed 19 December 2019).
169
Aya Yamazaki (Executive Officer at JGC Holdings, and Vice-President of the Paris Club), in discussion with Masami Marbot,
Yokohama, 20 January 2020.
170
Ibid.
167

80

bring more development opportunities to third-party markets.” 171 Several examples of EU andJapan business cooperation may belong to this category such as the collaboration between NTT
DATA and Citibeats (case 20) on the joint development of a citizen engagement platform.

2.5. Challenges

Notwithstanding the benefits of business cooperation of European and Japanesecompanies in third markets, several challenges may affect the cooperation itself, such as ofdifferences in language, culture and management; but also prevent companies from seeking
cooperation, with the issue of distinguishing whether their counterparts are more promisingpartners than competitors.

2.5.1. Language, culture and management
A first challenge that appears when entering negotiations for cooperation, as well as tojointly conduct a project, are the problems of language and cultural barriers, together withdifferences in management views. The latter can significantly impact negotiation processes,
handling of the delivery of the final product, and perhaps even compliance standards. It can also
be emphasized by parameters such as geography and time difference between the local teamsin the third country, and the European and Japanese headquarters.
Differences in management views and corporate culture may also impact business
partnerships more tangibly. As a matter of fact, in his study on French and Japanese business
partnerships for operating in third countries, Aya Yamazaki has compiled several comments ofcompanies on significant differences in management views. For French companies, among themain challenges encountered when working with their Japanese companies was organisational
pitfalls, whereby Japanese companies would attach more importance to formality and procedure
at the expense of results. Similarly, French companies would deplore the slowness of decisionmaking as Japanese companies’ decision-making is more based on consensus, as well as thelength of time to build a trust-based relationship with Japanese businesses. As for Japanesecompanies, they would be bothered by French “Cartesian spirit,” that is the highly logical andanalytical decision-making and management, and the subsequent harshness in negotiations,while conversely recognizing these characteristics as virtues. 172
Complications due to differences in management views on the partnership canconsiderably escalate when operating in third countries. Furthermore, in particular in Africa where
the legal system is in some places often underdeveloped, differences on matters such as

National Development and Reform Commission, People’s Republic of China, Third-Party Market Cooperation Guidelines andCases, 4 September 2019, Beijing, p74, https://www.ndrc.gov.cn/xxgk/zcfb/tz/201909/W020190905514523737249.pdf (accessed 4
February 2020).
172
Aya Yamazaki, “Cooperation of French and Japanese companies in third markets (original title in French: La coopération desentreprisesfrançaisesetjaponaises
enpays
tiers”),
Conference
paper,
October
2008,
https://www.researchgate.net/publication/322419827_La_cooperation_des_entreprises_francaises_et_japonaises_en_pays-tiers(accessed 19 December 2019).
171

81

compliance, investment ratio, or the leading team of the project at stake can be emphasized by
the fact that conflicts may not be judged in light of local legal or mediation system. 173
Additional to cultural differences between European and Japanese companies, culturaldifferences between SMEs and large enterprises are also to be taken into account. In Figure 12,
Accenture realized a breakdown of the “cultural divide” between startups and large companies,
ranging from innovative or decision-making process, to risk aversion and investors’
expectations. 174

Figure 12. Comparative cultural trends between startups and large companies (Source:
Accenture) 175
2.5.2. Partners and competitors
Another challenge that appears as perhaps an obstacle to new partnerships between
European and Japanese is that beyond being potential partners, they may also be competitorson those specific third-country markets, which matters if the companies are solely considering apunctual partnership. Fear of leakage of technology and strategic information can be a

JETRO, London Office, Overseas Research Department, Middle East & Africa Division, Possibilities of collaboration with Japanesecompanies in Africa (original title in Japanese: 主 要 国 企 業 の ア フ リ カ 展 開 と 日 本 企 業 と の 提 携 可 能 性 ), April 2018,https://www.jetro.go.jp/ext_images/_Reports/01/599d8aef3f68f9ff/20180001.pdf (accessed 25 November 2019).
174
Accenture,
Harnessing
the
Power
of
Entrepreneurs
toOpen
Innovation,
2015,
https://www.accenture.com/t20151005t162506_w_/us-en/_acnmedia/accenture/next-gen/b20/accenture-g20-yea-2015-openinnovation-executive-summary.pdf (accessed 9 March 2020).
175
Accenture,
Harnessing
the
Power
of
Entrepreneurs
toOpen
Innovation,
2015,
https://www.accenture.com/t20151005t162506_w_/us-en/_acnmedia/accenture/next-gen/b20/accenture-g20-yea-2015-openinnovation-executive-summary.pdf (accessed 9 March 2020).
173

82

hindrance to cooperation. 176 Furthermore, the ultimate concern is thus that company A, bypartnering with company B for a specific project, will introduce its network including its clients,
expertise of the local market and technologies to company B. After the project, company B will
have acquired local know-how and could stand on its own feet, and even compete with company
A for future projects with the clients it was introduced. We indeed observe that for instance inAfrica, if European companies are perceived as promising for business cooperation, they are also
considered by Japanese companies as serious competitors (Figure 13). Notwithstanding, it isworth mentioning the issue of competition may vary greatly from one sector to another: if
competition might heavily prevent collaboration in for instance the automotive sector, it might beless relevant for example in construction in which companies may have clearer specialization andexpertise.
Another challenge that may appear is in the case that the potential partner company A is
having business with the competitors of the company B. Indeed, this problem happens in the case
29 of the acquisition of CFAO by Toyota Tsusho: CFAO lost certain distribution contracts withother Japanese companies such as Isuzu or Nissan.
European companies

26,9%Chinese companies

18,8%Japanese companies

17,5%

Local capital companies

15,5%

US companies

7,4%

Other Asian companies

5,8%

Other

2,3%

No competitor

5,8%
0

10

20

30

Figure 13. Perceived third-country companies with the most competitive relationship by
Japanese companies for business in Africa (Source: JETRO) 177

Japanese Government, Agenda of the 39th Meeting on Strategy relating Infrastructure Export and Economic Cooperation (17October 2018) on the theme of third country cooperation (original title in Japanese: 第３９回経協インフラ戦略会議（2018 年 10 月17 日）テーマ：第三国連携 議事次第), 17 July 2018, https://www.kantei.go.jp/jp/singi/keikyou/dai39/siryou1.pdf (accessed 26
February 2020).
177
JETRO, Overseas Research Department, Middle East & Africa Division, 2019 Survey on Business Conditions of Japanese AffiliatedCompanies in Africa (original title in Japanese: (アフリカ進出日系企業実態調査（2019 年度調査) ), 16 January 2020, Tokyo,
https://www.jetro.go.jp/ext_images/_News/releases/2020/dea99c70c5f8d086/1_0121.pdf (accessed 24 January 2020).
176

83

3. OPPORTUNITIESThis third section endeavours to provide some hints on the opportunities for EU and Japanbusiness cooperation in third markets. It offers a snapshot of the political and market conditions
for business collaboration in third countries, including on development issues, while providing
some suggestions on interesting business trends that may favour EU-Japan business cooperationin third markets.
Section Summary
As for the political landscape, it is important to notice that the EU is not the only
institutional actor to reach out to Japan with a third-market strategy. At the bilateral level, France
since 2015, and the UK since 2017, have had several initiatives following those purposes.
Besides, in the past five years, the Japanese government has strengthened ties with otherprivileged partner countries for jointly exploring business opportunities in third markets, of whichin particular the US, China, India, and South Africa.
Another important parameter to take into account is that EU-Japan business cooperationin third countries may be greatly supported by the EU and Japan joint andrespective infrastructure export strategy and development policies. Indeed, the global
demand for infrastructures is expected to increase in both developing countries which aim toanswer to the basic needs of their people, but also in advanced economies because of a needto renovate and modernise aging infrastructures. According to a 2017 study from the McKinsey
Global Institute, 3.7 trillion US dollars a year of investment in economic infrastructure areneeded to 2035, of which 54% in Asia and 63% in emerging economies. 178
On the financing of the EU-Japan Connectivity per se, the Connectivity Partnershiprefers to the 2018 MoUs between the European Investment Bank (EIB) and the Japan Bank forInternational Cooperation (JBIC), as well between the EIB and the Nippon Export andInvestment Insurance (NEXI). Some hints are provided on their approach as they “aim topromote cooperation between the parties to support sustainable economic and social
development and to create business opportunities for Japan and the EU both within and outside
Europe,” and innovation and environmental conservation are cited as examples of common
areas of interest. Similarly, the MoU concluded between the EIB and the Japan International
Cooperation Agency in 2019 indicates the ambition of the two institutions to explore “cofinancing and co-investment opportunities in projects conducted in developing countries”
concerning “relevant issues – for example: transport, quality infrastructure investment,
microfinance and renewable energy sources.”
In addition, companies might be interested in delving into the EU and Japan’s
respective agenda for infrastructure export. Indeed, last November 2019 marked a turning
178
Jonathan Woetzel, Nicklas Garemo, Jan Mischke, Priyanka Kamra and Rob Palter, “Bridging Infrastructures Gaps – Has the World
made progress?,” McKinsey Global Institute, October 2017, https://mck.co/2SxJt7D (accessed 10 February 2020).

84

point for the EIB as it announced its new climate strategy and Energy Lending Policy. The lattercomprises a key commitment of the EU Bank to end financing fossil fuel energy projects fromthe end of 2021, as well as an engagement to prioritise clean energy innovation, energy
efficiency and renewable energy. As for the Japanese government, its 2019 revised strategy
relating to infrastructure export and economic cooperation highlights four priorities: thepromotion of public and private sector cooperation to strengthen competitiveness, including
increasing the risks covered by JBIC and expand measures in public finance; strategic efforts
for getting orders by notably relying on cooperation with foreign governments and companies;
an approach to a wide range of infrastructure fields with a focus on smart cities and IT, and thepromotion of the concept of “quality infrastructure,” which was endorsed by the G20 at the 2019
Osaka Summit.
Key stakeholders for European companies looking for Japanese partners for overseas
projects are the Japanese general trading companies. Unique Japanese actors because of
their large size and scope, their extremely diversified activities, products, services, industrywise and geographically, there are currently seven of them: Mitsubishi Corporation, Mitsui &Co, Itochu Corporation, Sumitomo Corporation, Marubeni Corporation, Toyota Tsusho
Corporation, Sojitz Corporation. Japanese general trading companies together have a total
sales volume which approximately accounts for 15% of the country’s GDP, 30% of imports,
and 18% of exports. 179 Their multifaceted role with regard to third-country businesscooperation makes them privileged contact points to European companies. They areintermediaries, managing and taking charge of orders from contractors and thereby choosing
products and equipment from manufacturers or to engage in joint-bidding and consortia; but
also financing coordinator, including with Japanese public financial institutions, as well as
considerable investors. Another important window of opportunity for European companies, andin particular SMEs, is the recent shift of Japanese companies to a strategy of open
innovation, which is particularly relevant in the industries of telecommunications, automotive,
electronics and railway.

3.1. Third-market strategies
3.1.1. General overview: between markets and politics
As mentioned in the introduction of this report, the Connectivity Partnership has a key
political dimension, being portrayed as a response and alternative to, in particular, China’s BRI
and US initiatives which have been increasingly bilateral in recent years. Beyond infrastructure
exports and trade, the Connectivity Partnership calls for in-depth cooperation with third countries.
However, Martin Schulz reminds us that business cooperation in third countries is “nothingnew”, and a market-led “natural process of globalisation.” The Senior Economist at Fujitsu
Patrick Ryan, “Reflecting the nation’s history, ‘sogo shosha’ are unique to Japan,” The Japan Times, 16 October 2018,https://www.japantimes.co.jp/news/2018/10/16/business/reflecting-nations-history-sogo-shosha-unique-japan/#.Xi56Xk_7SM8(accessed on 27 January 2020).
179

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Research Institute emphasises that “connectivity aligns market and political interests,” but thatdifferentiating in which cases market or political interests are at stake, and to whom, is crucial forany stakeholders. Martin Schulz then argues that Japan has been essentially politically driven in
its approach of globalization, governance and investment, while the EU and its member states
have had a mixed approach (Figure 14) 180 181

Figure 14. Third market strategies between market and political interests (Source: Martin
Schulz) 182
Martin Schulz’s analysis echoes to a comment made by several companies interviewed:
institutional support, for example from the EU-Japan Centre for Industrial Cooperation, isparticularly relevant in projects where institutional stakeholders are already involved, suchas projects in which JBIC is providing funding support.

3.1.2. Regional focus: Africa
Historical, societal, economic, and political ties between Japan or the European countryof origin of the company with the third country, can set a strong background for businesscollaborations in overseas markets. As pointed out by Japanese stakeholders, this seems to beparticularly relevant for projects in Africa. A JETRO study indeed explores the possibilities ofcooperation between European and Japanese companies in Africa by assessing the particular
links between the country of origin of the European company and the continent. 183

Martin Schulz (Senior Economist at Fujitsu Research Institute), in phone discussion with Masami Marbot, 12 March 2020.
Martin Schulz, “EU-Japan Business Collaborations in Third Markets,” Presentation, EU-Japan Centre for Industrial Cooperation
seminar on EU-Japan Business Collaborations in Third Markets, Tokyo, 3 December 2019, https://www.eujapan.eu/sites/default/files/imce/fri_2019.12.03_-_eu-jp_third_market_cooperation_03.pdf (accessed 3 December 2019).
182
Ibid.
183
JETRO, London Office, Overseas Research Department, Middle East & Africa Division, Possibilities of collaboration with Japanesecompanies in Africa (original title in Japanese: 主 要 国 企 業 の ア フ リ カ 展 開 と 日 本 企 業 と の 提 携 可 能 性 ), April 2018,https://www.jetro.go.jp/ext_images/_Reports/01/599d8aef3f68f9ff/20180001.pdf (accessed 25 November 2019).
180
181

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For France, links between the country and Africa are in part rooted in the colonial era,
especially in French-speaking Africa in the Western part of the continent, combined with thepresence of a large-scale diaspora. Additionally, French and African relations are characterized
by a strong political and economic commitment from France to the continent, ranging from military
cooperation to its role vis-à-vis the CFA franc currency. 184 The French government is also
considered as actively supporting infrastructure projects in Africa.
Similarly, the UK’s relationship with the African continent also finds its origins in thecolonial era. This aspect is as of today partly formalized with the Commonwealth. Moreover, theUK has also a long history of welcoming immigrants from Africa, with thus the presence of a large
diaspora from the continent in the UK’s society. The JETRO study also considers that as a global
financial centre, the UK has been able to gather a considerable knowledge of the African market
and industries.
As for Germany, links with the African continent are to a lesser extent related to historicalcolonial past compared to other European counterparts, with only ‘few’ former colonies such as
the equivalent today of Namibia, Rwanda, Tanzania, Togo and Cameroon. Some large German
companies such as Siemens have had nevertheless a large presence on the continent. As for theGerman government, if it has been initially reluctant to support companies directly, the refugee
crisis from 2015 has been a turning point for a more resolute diplomatic stance in Africa.
Turkey is then viewed in the JETRO study as having proactive diplomacy in Africa under
the Erdogan government. Strengths of Turkey in doing business on the continent are particularly
relevant in the domains of infrastructure/construction and consumer goods, being highly
competitive in terms of price, business management, and risk appetite. Another important
advantage of Turkey is the operation of regular flights throughout the continent by Turkish Airlines.
Then, for JETRO, other European countries enjoying particular relations with Africa
relevant to business include the Netherlands, Portugal, Norway and Poland. The Netherlands
benefits from great know-how of the continent with several companies well-established such as
Philips, Heineken, Shell, or Unilever; and strengths in specific industries such as dairy farming,
livestock and agriculture, or port development. Portugal has also former colonies in Africa, withthe main ones being Angola and Mozambique, inducing that Portuguese is spoken in several
African countries and the presence of a significant diaspora. As for Norway, if Africa used to be
an important target of assistance, the government strategy has henceforth shifted to encouraging
business relations. Norway benefits from strengths in key sectors such as the oil and gas industry
or renewable energies. Lastly, Poland’s relationship is also dynamic in Africa. As a former
communist power, it has a rather deep history of exchanges with many African countries such as
Tanzania and Mozambique, with notably many government officials and ministers that have
A set of reforms have been announced on 21 December 2019 by French President Emmanuel Macron, and his Ivorian counterpart
Alassane Ouattara on the CFA franc, including the role of France vis-à-vis the currency. For more information:
https://www.cnbcafrica.com/news/west-africa/2020/01/10/op-ed-from-cfa-franc-to-eco-what-you-need-to-know-about-west-africasnew-currency/
184

87

received education in Poland. The country also enjoys expertise in the agriculture and informationand communication technology fields.
As for Japan’s relations with Africa impacting businesses, it has to be contextualized in
the history of a strong presence of Japanese businesses in the 70s and 80s on the continent, butthat then left Africa due to political instability, preferring to it the Asian market which was
encountering a remarkable growth at the time. As a result, Japanese businesses have thus
gradually lost their local know-how, and have today a very small presence on the continent. In aninterview with The Japan Times, JETRO’s Chairman and CEO of JETRO’s Nobuhiko Sasaki
outlined that just over 1 percent of the Japanese company’s overseas business sites are in
Africa. 185,186 Nobuhiko Sasaki further highlights that simultaneously, the government strategy
has greatly evolved from “aid” to “business” in Africa since the fourth TICAD in 2008. If
Japanese business in Africa has been traditionally leaning toward infrastructure, natural
resources and automobiles, the government is now inclined to support Japanese companies inAfrica as contributors to the continent’s development, and in more diversified economic fields.

3.1.3. Bilateral initiatives of European countries for third market collaboration withJapan
In parallel with the initiatives at the EU and Japanese level for cooperation in third
countries, among EU member states (or COSME programme participating countries), it seems
France and the UK have also endeavoured to work bilaterally with Japan on the topic.
3.1.3.1. France and Japan collaboration in third markets
France has been active since 2015 in strengthening cooperation with Japan in third
countries. The first major initiative is the Franco-Japanese Plan for Sustainable Development,
Health and Security in Africa, adopted by the French and Japanese Prime Ministers ManuelValls and Shinzo Abe adopted on 5 October 2015 in Tokyo. The plan mentions in particular that
"France and Japan will promote trade and investment projects and partnerships in Africa between
French and Japanese businesses. They will particularly focus on initiatives that could contributeto the development of high-quality infrastructure, which is crucial in the field of sustainable cities”(art. 5). Cooperation between AFD, JICA, JBIC and NEXI (art. 2), and Business France and
JETRO (art. 6) is also mentioned. 187
A joint event on the “Franco-Japanese Partnership for Africa” was then held as a side
event of TICAD 7 on 26 August 2016. On this occasion, several MoUs were signed: between the
Nobuhiko Sasaki, “Africa commerce succeeds through new partnerships,” The Japan Times, 27 August 2019,https://www.japantimes.co.jp/news/2019/08/27/business/economy-business/africa-commerce-succeeds-new-partnerships/(accessed 14 November 2019).
186
JETRO, London Office, Overseas Research Department, Middle East & Africa Division, Possibilities of collaboration with Japanesecompanies in Africa (original title in Japanese: 主 要 国 企 業 の ア フ リ カ 展 開 と 日 本 企 業 と の 提 携 可 能 性 ), April 2018,https://www.jetro.go.jp/ext_images/_Reports/01/599d8aef3f68f9ff/20180001.pdf (accessed 25 November 2019).
187“Franco-Japanese plan for sustainable development, health and security in Africa,” adopted by the Prime Ministers of France and
Japan
on
5
October
2018,
FrenchEmbassyinJapanwebsite,https://jp.ambafrance.org/IMG/pdf/francojapanese_plan_for_sustainable_development_health_and_security_in_africa.pdf?20949/dfa13a290c8790be74e5f776f5aa6c23b3de
3ba8 (accessed 27 February 2020).
185

88

Government of Ivory Coast, AFD and JICA; the subsidiaries of Total and Mitsubishi Corporation
intending to develop solar energy in Kenya; and two memoranda between Egis and Mitsubishi
Corporation (one covering the continent as a whole and concerning the fields of the sustainable
city, road, water, energy and construction; and the second targeting Ivory Coast and moreparticularly drinking water supply projects). 188 Additionally, a three-day Forum on France-Japan
Cooperation in Third Countries was organised by Business France and the French Embassyin Japan, supported by JETRO, in November 2017. The forum included a panel discussion with
French and Japanese companies sharing their experience, networking sessions, presentationsof the political and macro-economic states of such collaboration, a panel discussion on public aid
for financing, and discussions on opportunities in specific sectors and targeted third markets. 189
In 2019, there were two other joint initiatives between France and Japan covering
cooperation in third countries. On the occasion of the official visit of President Emmanuel Macron
to Japan on 26-27 June 2019, the Roadmap on Japan-France Cooperation for Opening New
Horizons between Japan and France under an Exceptional Partnership (2019-2023) was
adopted. This roadmap mentions in its article 1 that: “France and Japan […] undertake to carryout concrete cooperation within the framework of a partnership for the Indo-pacific in order toensure that this region is an area of peace and prosperity, inclusive, free and open to all partners,
based on three axes: freedom of navigation and maritime security, climate, environment andbiodiversity as well as quality infrastructure ”. 190 The second major initiative is the holding of thefirst Franco-Japanese world maritime dialogue in Noumea on 20 September 2019. The
dialogues have reiterated the axes of cooperation mentioned in the roadmap relating to the Indopacific. 191
3.1.3.2. The UK and Japan collaboration in third markets
The UK has also been active in terms of collaboration with Japan in third countries. The
year 2017 marked a significant milestone for UK-Japan institutional cooperation on the topic. On
30 August, NEXI and the UK Export Finance (UKEF) reached a One-Stop-Shop Reinsurance
Agreement. 192 Then, the Department of International Trade (DIT) concluded on 30 August an
MoU with JETRO, and on 1 September, an MoU with JBIC, aiming to enhance UK-Japan
188
MOFA and French government joint press release, “Joint event on the “France-Japan Partnership for Africa” organised in theframework of TICAD VI,” MOFA website, 26 August 2016, https://www.mofa.go.jp/files/000183524.pdf (accessed 14 November 2019).
189
Business France, “Programme of the Forum on France-Japan Cooperation in Third Countries,” Business France website,
https://export.businessfrance.fr/EmailingResources/Files/885a3e42fc7c292c52d3fe91e891d03e/27510/programme-du-forumfranco-japonais-en-pays-tiers-2017.pdf (accessed 27 February 2020).
190
Translated by the author from French to English. “Roadmap on Japan-France Cooperation for Opening New Horizons between
Japan and France under an exceptional Partnership (2019-2023)”, adopted by the Prime Minister of Japan and the President ofFrance on 26 June 2019, MOFA website, https://www.mofa.go.jp/files/000492473.pdf (accessed 27 February 2020).
191
France-Japan joint press release, “First Franco-Japanese global maritime dialogue," French Embassy in Tokyo website, 25
September 2019, https://jp.ambafrance.org/Communique-conjoint-France-Japon-tenue-du-premier-dialogue-maritime-global-francojaponais (accessed 27 February 2020).
192
Note on One-Stop-Shop Reinsurance (source: NEXI, https://www.nexi.go.jp/en/topics/newsrelease/2017091503_2.html): “When aJapanese company joins a project in a third country in conjunction with a foreign company, One-Stop-Shop Reinsurance agreements
make it possible for NEXl to undertake the risk portion of exports made from Japan. Suppose a Japanese company exports to a third
country with a foreign company under a consortium, and the foreign company obtains insurance from its own ECA for the entire
contract amount including the portion exported by a Japanese company; NEXl will provide reinsurance to the foreign ECA for the
portion exported from Japan. It is called One-Stop-Shop because it allows you to apply for trade insurance at a single window for allexport contracts involving companies from multiple countries.”

89

collaboration such as in facilitating cooperation in promoting Japanese investment in the UK, as
well as promoting joint investment and business cooperation in third countries. 193 On 10 January
2019, at the occasion of the Japan-UK Summit Meeting, Prime Minister Abe and Prime Minister
Theresa May issued a UK-Japan Joint Statement whereby they agreed that: “[…] Contributing
to a free and open Indo-Pacific, [the UK and Japan] will strengthen intergovernmental cooperation
including through a designated dialogue mechanism, and including cooperation with third
countries and engagement with the private sector in support of quality infrastructure investment
in accordance with international standards […]“ (article 5). 194
A website and brochure provide then more details on the focus of such UK-Japan thirdcountry collaboration. 195 196 In terms of vision, “contributing to the sustainable growth ofsociety and citizens is a key point in providing high-quality infrastructures.” The targeted regions
or the Asian and African countries, and the diverse needs this collaboration aims to answer toare health, safety, employment, housing, education, and transportation. Against this background,the UK has proposed some priority sectors for such UK-Japan collaboration for third-country
infrastructure development: smart city, regional development, intercity highways / suburban
railroad (commuting), roads, airport maintenance and operation, water and sewage, healthcare /medical. A 2-day UK-Japan 3rd Country Infrastructure Collaboration – Workshop &Business Forum had been scheduled in March 2020 but had to be postponed because of thecoronavirus outbreak. 197 The first day had been designed as a workshop for UK participants witha briefing by Japanese stakeholders on the infrastructure perspectives in Japan, and exchangesof views between companies; and the second day as a business forum in which UK companies
would have had the opportunity to present their expertise to a Japanese audience.

3.1.4. Other partner countries for third market collaboration with Japan
Before the Connectivity Partnership with the EU, the Japanese government has striven toenhance third country business partnership with several strategic countries’ government andcompanies of which in particular the US, China, India, and South Africa. In fact, in a document
published by the 39th “Meeting on Strategy relating Infrastructure Export and Economic
Cooperation,” (経協インフラ戦略会議 in Japanese) held on 17 October 2018 and of which thetheme was third-country collaborations, there is no mention of Europeans as privileged
partner countries at the exception of Turkey (Table III). It has to be noted that these othercountries cited remain, as of today, among preferred partner countries for Japan vis-à-vis third
market business collaboration. 198
193
Department of International Trade, Third Country Business Team, Japan-UK Collaboration for 3rd Country Infrastructure
Development, Tokyo, https://www.british-mc.com/japan_uk/form/ (accessed 4 March 2020).
194"UK-Japan Joint Statement," adopted by the Prime Ministers of the UK and Japan on 10 January 2019, Gov.uk website,
https://www.gov.uk/government/publications/uk-japan-joint-statement-10-january-2019 (accessed 4 March 2020.
195
British Market Council, “Japan-UK Collaboration for 3rd Country Infrastructure Development,” British Market Council Website,
https://www.british-mc.com/japan_uk/index.html (accessed 4 March 2020).
196
Department of International Trade, Third Country Business Team, Japan-UK Collaboration for 3rd Country Infrastructure
Development, Tokyo, https://www.british-mc.com/japan_uk/form/ (accessed 4 March 2020).
197
Details of the event: https://exporttojapan.co.uk/uk-japan-3rd-country-infrastructure-collaboration-seminar/
198
Japanese Government, Agenda of the 39th Meeting on Strategy relating Infrastructure Export and Economic Cooperation (17October 2018) on the theme of third country cooperation (original title in Japanese: 第３９回経協インフラ戦略会議（2018 年 10 月

90

As for Japan-US cooperation in third countries, a recent milestone is the Memorandumof Cooperation on Strengthening Energy and Infrastructure Finance and Market Building
Cooperation Concluded between the Japanese Ministry of Economy, Trade and Industry and theMinistry of Finance, and the US. Department of the Treasury on 4 February 2020. Under thismemorandum, the two governments agreed on “work[ing] together to address regulatory, market,
and legal barriers to private sector investment, and develop innovative solutions to deepen
regional debt markets for energy and infrastructure projects; crowd in institutional investors;
enhance liquefied natural gas and other commodity trading markets; and boost bilateral
infrastructure investment between the United States and Japan.” The memorandum focuses on
the Indo-Pacific region, building on the Japan-US Strategic Energy Partnership agreed upon by
Prime Minister Abe and President Trump in November 2017. 199

17 日）テーマ：第三国連携 議事次第), 17 July 2018, https://www.kantei.go.jp/jp/singi/keikyou/dai39/siryou1.pdf (accessed 26
February 2020).
199
U.S. Department of The Treasury, “United States and Japan Sign Memorandum of Cooperation Strengthening Energy andInfrastructure Finance and Market Building,” U.S. Department of Treasury website, https://home.treasury.gov/news/pressreleases/sm894 (accessed 23 March 2020).

91

Table IV. Achievements and current status of third country alliances between
governments and government agencies – as of 17 October 2018 (Source: Japanese
Government) 200
Partnercountry

US

India

ExamplesSecond Public-Private Sector
Roundtable Discussion on U.S.Japan Cooperation on Third Country
Infrastructure•

Memorandum of Cooperation topromote third country cooperation•

Concluded between JBIC and NEXI (2017) / JICA (2018) and US
Overseas Private Investment Corporation (OPIC)•

Under the "Japan-India ICT Cooperation Framework,"
government and other officials from third countries (Africa and
ASEAN countries) are invited to India, and a capacity building
program is provided jointly by Japan and India.

•

Concluded between JBIC and Exim Bank of India (2014)••

Agreed upon at the Japan-China summit meeting in May 2018
Forum for discussing Japan-China private economic cooperationin third countries under the Japan-China High-Level Economic
Dialogue, involving the private sector across ministries, and awide range of business managers and relationships to further
promote exchanges between private companies and officials••

Forum attended by 150 officials from both countries••

Concluded an MoU for construction services in third countries•

Japan and Singapore collaborate to develop human resources inthird countries, mainly in ASEAN countries. Implementation oftraining courses provided for the development of soft
infrastructure that supports economic development andinfrastructure development in each country, in particular in areasin which Japan and Singapore have strong know-how, such assystem development such as customs and protection of
intellectual property rights, disaster prevention, food security,urban development, etc.

•

NEXI and MIGA (Multilateral Investment Guarantee Agency),
member of the World Group, concluded a MOU in the field ofreinsurance (May 2018)•

NEXI has concluded reinsurance agreements with Export
Development Canada (September 2018), UK Export Credit
Guarantee Agency (2017) among others.

India-Japan cooperation project on
ICT capacity building in Africa and
ASEAN countries
Memorandum of Cooperation topromote third country cooperation

China

TurkeyEstablishment of "Committee on
Promotion of Private-Sector
Business in Third Countries" and"Japan-China Third Market
Cooperation Forum"
Fourth Turkish-Japanese Overseas
Construction Cooperation
Conference
Memorandum of Understanding topromote third country cooperation

Singapore

Others

Details•

Japan-Singapore Partnership
Programme for the 21st century(JSPP21)

Promotion of third country
cooperation

Development of third country infrastructure cooperation as acomponent of the US-Japan Economic Dialogue
Joint press release and announcement of a list of Japan-US
infrastructure cooperation projects.

Confirmed the promotion of joint construction projects in Africa,
the Middle East, Central Asia etc.
Concluded between NEXI (2017) and JBIC (2018) and Türk
Eximbank

Japanese Government, Agenda of the 39th Meeting on Strategy relating Infrastructure Export and Economic Cooperation (17October 2018) on the theme of third country cooperation (original title in Japanese: 第３９回経協インフラ戦略会議（2018 年 10 月17 日）テーマ：第三国連携 議事次第), 17 July 2018, https://www.kantei.go.jp/jp/singi/keikyou/dai39/siryou1.pdf (accessed 26
February 2020).
200

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As for Japan-China initiatives, the Third Market cooperation forum was indeed held on
26 October 2018, attended by about 1,500 stakeholders from governmental organizations andbusinesses. It was the occasion for 52 memoranda of cooperation to be reached between the
public and private sectors, including in the fields of infrastructure, logistics, information technology,
healthcare and finance. 201 Then, on 21 May 2019, JBIC held the Japan-China Third Country
Market Financing Cooperation Forum together with China Development Bank, based on an
MoU signed in October 2018, stating their ambition to collaborate on supporting projects involving
both Japanese and Chinese companies in third countries. 202 Beyond government-level
collaboration, third country business cooperation between Japan and China seem indeed
significantly strategic. For instance, a JETRO survey indicates that 6.6% of Japanesecompanies identified China as a country origin for promising third-country collaboration,in particular as a supplier of goods and materials; a position behind France (14.1%), and in front
other European countries (Figure 2). 203
Similarly, governments of Japan and India have endeavoured to encourage third country
business cooperation. A significant project is the Asia-Africa Growth Corridor (AAGC), which
took shape at the occasion of the annual meeting of the African Development Bank in May 2017
(Figure 15). AAGC aspires to develop the economic links between the two regions and would
include beyond Africa, India and Japan: South Asia, Southeast Asia, and Oceania. This ambitionis based on four major axes: development and cooperation, improvement of quality infrastructureand know-how, as well as the establishment of an environment favourable to interpersonal
partnerships. Furthermore, this project is based on an Indo-Pacific order with liberal values as
defined in the Indian and Japanese bilateral strategic partnership ‘Vision 2025’. India-Japanbusiness cooperation in Africa seems already significant. Indeed, the JETRO survey highlightsthat 10.6% of Japanese companies identified India as a country origin for promising thirdcountry collaboration (Figure 2), pointing out that India has not only an excellent strategy withregards to the African market but also that Japanese companies were able to launch operationsin Africa utilizing their Indian bases. 204 205 206
Other recent examples of Japan-India initiatives towards third country businesscooperation included a Memorandum of Cooperation on a digital partnership concluded by
METI and the Indian Ministry of Electronics and Information Technology on 29 October 2018. The
latter aims to encourage collaboration “between startups, inter-company collaboration, IT humanresources, research and development in the field of AI, next-generation networks, and electronics.”
It also covers joint efforts on digital infrastructures, and on “designing architecture and improving
the ability of implementing architecture in society conducted in third-party countries in Africa, Asia
JETRO press release, “1st Japan-China Third Country Market Cooperation Forum,” October 2018,https://www.jetro.go.jp/en/jetro/topics/2018/1810_topics11/ (accessed 16 January 2020).
202
JBIC
press
release,“JapaneseandChinese
Co.s
in
Third
Countries,”
21
May
2019,
https://www.jbic.go.jp/en/information/press/press-2019/0521-012173.html (accessed 16 January 2020).
203
JETRO, Overseas Research Department, Middle East & Africa Division, 2019 Survey on Business Conditions of Japanese AffiliatedCompanies in Africa (original title in Japanese: (アフリカ進出日系企業実態調査（2019 年度調査) ), 16 January 2020, Tokyo,
https://www.jetro.go.jp/ext_images/_News/releases/2020/dea99c70c5f8d086/1_0121.pdf (accessed 24 January 2020).
204
Ibid.
205
Title Basu, “Thinking Africa: India, Japan, and the Asia-Africa Growth Corridor,” The Diplomat, 3 June 2017,https://thediplomat.com/2017/06/thinking-africa-india-japan-and-the-asia-africa-growth-corridor/ (accessed 16 January 2020).
206
Jagannath Panda, “The Asia-Africa Growth Corridor: An Indian-Japan Arch in the Making?,” Focus Asia Perspective & Analysis,
August 2017, http://isdp.eu/content/uploads/2017/08/2017-focus-asia-jagannath-panda.pdf (accessed 16 January 2020).
201

93and other regions.” 207 Another example is the meeting held in November 2019 between Indian
Prime Minister Narendra Modi and Japanese Prime Minister Shinzo Abe on the side-lines of theEast Asia Summit, whereby they “agreed to foster bilateral cooperation in third countries for peace,
prosperity and development in the region” of Indo-Pacific. 208

Figure 15. Map of the Asia-Africa Growth Corridor project (Source: Institute for
Security and Development Policy) 209
A last privileged partner country for Japan, and in particular on the African market, isSouth Africa. Indeed, the JETRO survey highlights that 15.4% of Japanese companies
identified South Africa as promising third-country collaboration, highlighting, indicated thecountry as an attractive regional foothold, but also as possessing great local know-how andnetworks. On 27 August 2019, JBIC and the Development Bank of Southern Africa indeed signed
an MoU, “for business promotion between Japan and the African countries” (Figure 2). 210 211

207 METI press release, “Promotion of Japan-India Business Cooperation in the Field of Digital Infrastructure Welcomed,” METI
website, 12 December 2019, https://www.meti.go.jp/english/press/2019/1212_003.html (accessed 16 January 2020).
208
The Economic Times, “India, Japan review situation in Indo-Pacific; resolve to ramp up cooperation in third countries,” 4 November
2019,
https://economictimes.indiatimes.com/news/defence/india-japan-review-situation-in-indo-pacific-resolve-to-ramp-upcooperation-in-third-countries/articleshow/71888924.cms (accessed 16 January 2020).
209
Jagannath Panda, “The Asia-Africa Growth Corridor: An Indian-Japan Arch in the Making?,” Focus Asia Perspective & Analysis,
August 2017, http://isdp.eu/content/uploads/2017/08/2017-focus-asia-jagannath-panda.pdf (accessed 16 January 2020).
210
JBIC press release, “JBIC signs MoU on Business Cooperation with the Development Bank of Southern African (DBSA),” 27 August
2019, https://www.jbic.go.jp/en/information/press/press-2019/0827-012477.html (accessed 26 February 2020).
211
JETRO, Overseas Research Department, Middle East & Africa Division, 2019 Survey on Business Conditions of Japanese AffiliatedCompanies in Africa (original title in Japanese: (アフリカ進出日系企業実態調査（2019 年度調査) ), 16 January 2020, Tokyo,
https://www.jetro.go.jp/ext_images/_News/releases/2020/dea99c70c5f8d086/1_0121.pdf (accessed 24 January 2020).

943.2. Infrastructure and Development
EU-Japan business collaboration in third markets involves greatly infrastructure projects,
often tied with development (and public financing for development), as well as infrastructure
export agendas. This part aims to provide some key facts and figures on priority sectors about
these two points.
3.2.1. Global infrastructure needs
Global demand for infrastructures is expecting to increase in both developing andadvanced economies. It is undeniable that this represents a business opportunity for EU andJapan business cooperation in third markets, as illustrated by several successful case studies
presented above. Indeed, according to the McKinsey Global Institute, the world has spent 9.5
trillion US dollars on infrastructure in 2015, or 14% of global GDP. Nonetheless, 3.7 trillion US
dollars a year of investment in economic infrastructure are needed to 2035, of which the
breakdown by sector can be observed in Figure 16. Overall, there is a 5.5 trillion US dollars
spending gap between now (October 2017) and 2035. 212
Roads
Rail
Ports
Airports
Power
Water
Telecom
TOTAL

0,9 trill. US dollars

0,4 trill. US dollars
0,1 trill. US dollars
0,1 trill. US dollars
1,1 trill. US dollars
0,5 trill. US dollars
0,5 trill. US dollars
-

1,0

2,0

3,7 trill.
US dollars
3,0

4,0

Figure 16. Average global infrastructure annual need, 2017-2035, in trillion US dollars(Source: McKinsey Global Institute) 213
In terms of geography, 54% of the investment need is in Asia, and 63% is in emerging
economies (Figure 17). For the Asian continent alone, and more precisely 45 of ADB’s
developing member countries, infrastructure investment needs amount to 26.2 trillion US
dollars over the period 2016 to 2030¸”if the region is to maintain its growth momentum, eradicate
poverty, and respond to climate change.” (Figure 19).
Nevertheless, it remains that the infrastructure needs between developing andadvanced economies differ. In this regard, an article from JBIC first identifies developing
economies as having diverse demand for infrastructures according to their level of economic
development (Figure 18). For instance, countries with a GDP per capita less than 2,000 dollars
such as Haiti or Madagascar, the infrastructures needed are those to support the daily needs ofthe people and their business activities: electricity, roads and ports. As the level of economic
Jonathan Woetzel, Nicklas Garemo, Jan Mischke, Priyanka Kamra and Rob Palter, “Bridging Infrastructures Gaps – Has the World
made progress?,” McKinsey Global Institute, October 2017, https://mck.co/2SxJt7D (accessed 10 February 2020).
213
Ibid.
212

95

development increases, infrastructure needs to bear more on high-quality and environmentfriendly infrastructures, and infrastructures aiming at improving the quality of life. 214 As foradvanced economies, infrastructure needs are primarily about renovation and modernisation in
dealing with aging infrastructures. For example, as quoted by JBIC, according to 2013 data fromthe US Department of Transportation, 25% of bridges across the country are inadequate or
obsolete and 12% of tunnels are more than 100 years old. 215
120

100
20

United States and Canada

80

Western Europe

10

Eastern Europe

4Latin America
Middle East6
2
4

Other emerging Asia

6

Africa

60

India
China

8
40

Developed Asia
63% of theinvestment need will
be in emerging
economies
54% of theinvestment need will
be in Asia

34

20

6

0

Needed Investment, 2017-35

Figure 17. Investment needs by geography, 2017-2035, in trillion US dollars (Source:
McKinsey Global Institute) 216
JBIC,“Capturing
diverseinfrastructure
needs
of
the
world,”JBIC
Today,
March2018,
https://www.jbic.go.jp/en/information/today/today-2018/contents/jtd_201805_en.pdf (accessed 10 February 2020).
215
Ibid.
216
Jonathan Woetzel, Nicklas Garemo, Jan Mischke, Priyanka Kamra and Rob Palter, “Bridging Infrastructures Gaps – Has the World
made progress?,” McKinsey Global Institute, October 2017, https://mck.co/2SxJt7D (accessed 10 February 2020).
21496Figure 18. Infrastructure needs in developing countries, depending on GDP per capita (Source: JBIC, from Mizuho Financial
Group) 217

JBIC, “Capturing diverse infrastructure needs of the world,” JBIC Today, March 2018, https://www.jbic.go.jp/en/information/today/today-2018/contents/jtd_201805_en.pdf (accessed
10 February 2020).
217

Transport

8,4 trill. US dollars

Power14,7 trill. US dollars

Water and sanitation

0,8 trill. US dollars

Telecom

2,3 trill. US dollars

26,2 trill. US
dollars

TOTAL
0

5

10

15

20

25

30

Figure 19. Investments needs over 2016-2030 in Asia, in trillion US dollars (Source: ADB)
218

3.2.2. Financing EU-Japan connectivity
Although joint institiutional financing of EU-Japan connectivity is still being discusses in its
initial stages, respective financial institutions have provided some information on their upcoming
collaboration, and thus for joint projects in third countries.
As mentioned in article 5 of the Connectivity Partnership, financing of EU-Japan
connectivity is first expected to rely on a closer collaboration between the EIB and JICA. 219 In
this respect, an MoU was signed between the two institutions on 26 September 2019 at theoccasion of the EU-Asia Connectivity Forum. This collaboration would bear on “co-financing andco-investment opportunities in projects conducted in developing countries.” The examplesof sectors quoted in which such collaboration appears relevant are “transport, quality
infrastructure investment, microfinance and renewable energy sources.” Furthermore, theEIB and JICA have indicated that they also aim to cooperate “on technical assistance/project
preparation and create synergies and exchanges at the level of their local offices to extent thepositive impact of their work.” The two institutions have already co-invested in a women-focusedmicrofinance fund in Sub-Saharan Africa. 220
Another financial lever mentioned in the Connectivity Partnership are the memoranda
between the EIB and JBIC, and the EIB and NEXI. Both were signed on 22 October 2018 during
the Japan-EU High-Level Dialogue for Industry, Trade and Economy, “aim[ing] to promote
cooperation between the parties to support sustainable economic and social development
and to create business opportunities for Japan and the EU both within and outside Europe.”
Innovation and environmental conservation are cited as examples of common areas of interest
between the two institutions. 221
ADB, “Meeting Asia’s infrastructure needs,” ADB, Manila, 2017, https://www.adb.org/sites/default/files/publication/227496/specialreport-infrastructure.pdf (accessed 10 February 2020).
219“The Partnership on Sustainable Connectivity and Quality Infrastructure between the European Union and Japan,” signed on 27
September 2019, European External Action Service (EEAS) website, https://eeas.europa.eu/headquarters/headquartershomepage/68018/partnership-sustainable-connectivity-and-quality-infrastructure-between-european-union-and_en (accessed 5
November 2019).
220 EIB press release, “EIB expands its partnership with Japan’s JICA,” EIB website, 27 September 2019,https://www.eib.org/en/press/news/eib-expands-partnership-with-japan (accessed 10 February 2020).
221
EIB press release, “EIB new cooperation with the Japan Bank for International Cooperation (JBIC) and with the Nippon Export andInvestment Insurance (NEXI),” EIB website, 23 October 2018, 2018-264-EN, https://www.eib.org/en/press/all/2018-264-eib-new218

3.2.3. The EU and Japan respective agenda for infrastructures export
In parallel to the discussions on the specifics of EU-Japan collaborations in third markets
in infrastructures, the EU and Japan have been respectively advancing their agendas in terms ofinfrastructure financing and export. This subpart aims to provide some highlights of those.

3.2.3.1. Highlights on the EU’s agenda for infrastructure export
A recent milestone in the EU’s agenda for infrastructure export is the announcement of
the EIB last November 2019 of its new climate strategy and Energy Lending Policy. The latterhas is composed of four key policies. The first policy pertains to a commitment of the EIB to end
financing fossil fuel energy projects from the end of 2021. The second is that future financing
will prioritize clean energy innovation, energy efficiency and renewables. The third point isthat the EIB Group will unlock 1 trillion euros for climate action and environmentally
sustainable investment in the decade to 2030. The last point is the commitment of the EIB toalign all its financing activities with the goals of the Paris Agreement from the end of 2020. 222
Other hints on the future orientations of the financing of EU-Japan connectivity were
provided by Ambassador Romana Vlahutin, Ambassador at Large for Connectivity in theEuropean External Action Service. On financing per se, Romana Vlahutin highlighted that private
capital and investment remains crucial for connectivity and that the latter calls for blended finance.
Additionally, Romana Vlahutin emphasized the priorities in developing countries have evolved
from not only securing the quality of life of the people from sanitary conditions for examples but
also by focusing now on the technology and security (such as crisis management) dimensions.
Secondly, the ambassador suggested some priority sectors for each region such as energy for
the Balkans, transport for Africa, and cybersecurity for Asia. 223

3.2.3.2. Highlights on Japan’s agenda for infrastructure export
As for Japan, in 2019, the Japanese Government, through its “Meeting on Strategy relating
Infrastructure Export and Economic Cooperation” above mentioned, revised its infrastructure
export strategy with four priorities. 224 The first is to promote public and private sector cooperation
to strengthening competitiveness. Two means are considered: increasing the types of risks
covered by JBIC special operations to promote innovation and investment in new businesses
by Japanese companies and expanding support measures in public finance, such as schemes
utilizing the NEXI trade insurance system to utilize institutional investors’ funds. The second
priority is centred on strategic efforts for getting orders. The latter consists in various support
cooperation-with-the-japan-bank-for-international-cooperation-jbic-and-with-the-nippon-export-and-investment-insurance-nexi(accessed 10 February 2020).
222
EIB press release, “EU Bank launches ambitious new climate strategy and Energy Lending Policy,” EIB website, 15 November
2019,
2019-313-EN,
https://www.eib.org/en/press/all/2019-313-eu-bank-launches-ambitious-new-climate-strategy-and-energylending-policy (accessed 12 February 2020).
223
Romana Vlahutin, “Sustainable connectivity and quality infrastructure – New level of EU-Japan Partnership,” Lecture, Waseda
University, Tokyo, 14 January 2020.
224
Dr. Hiroto Izumi, “the Japanese Government’s efforts toward overseas expansion of infrastructure for urban development,”
Presentation, 5th seminar on the Japanese Investments for Overseas Infrastructure organised by the Japan Overseas Infrastructure
Investment Corporation for Transport & Urban Development (JOIN), Tokyo, 21 February 2020.

99

measures for continuous involvement in infrastructure projects through operation andmaintenance, and efforts to complement the strengths of Japanese companies in cooperation
with foreign governments and companies to enhance price competitiveness and market
access. The third priority identified is to approach a wide range of infrastructure fields, by
supporting the overseas expansion of smart cities etc., by utilizing advanced ICT such as IoT
and AI in light of the progress of digitalization. The last point pertained to the promotion ofquality infrastructure, notably in international discussions, and with the development oftechnologies, knowledge and know-how that Japan has an advantage in helping to solve
problems in the international community.
The concept of “quality infrastructure” has indeed been a key component of Japan’s
development policies, and is certainly a strong background for EU-Japan connectivity. In 2015,
Japan endorsed its “Quality Infrastructure Partnership” which unlocked 110 billion US dollars in
Asia-based projects, notably together with the ADB. Then, in 2016, Prime Minister Abe deliveredat the G7 Ise-Shima Summit the “Expanded Partnership for Quality Infrastructure whichannounced the provision of approximately 200 billion US dollars to infrastructure projects acrossthe world. Finally, in June 2019 at the occasion of the G20 Osaka Summit, was endorsed the G20
Principles for Quality Infrastructure Investment. The latter introduced six core principles:
maximizing the positive impact of infrastructure to achieve sustainable growth anddevelopment, raising economic given life-cycle cost, integrating environmental
considerations in infrastructure investments, building resilience against natural disasters
and other risks, integrating social considerations in infrastructure investment, andstrengthening infrastructure governance. 225

3.3. Japanese general trading companies
Japanese general trading companies, or ‘sogo shosha’ (総合商社 in Japanese), or uniqueand key economic actors, including with regards to partnerships with European businesses inthird countries. Indeed, these Japanese companies are characterized by their very large size andscope, with extremely diversified activities, products, services, industry-wise andgeographically. Indeed, out of the 52 projects identified of cooperation between French andJapanese companies in third countries by the French Embassy in Japan, 39 of them (or 75%)
involve a Japanese general trading company. 226
Sogo shosha are key drivers of the Japanese economy and globalisation and occupy
a significant presence in supply chains around the world. Their total sales volumes approximately
account for 15% of the country’s GDP, 30% of imports, and 18% of exports. It is
notwithstanding the amount of ‘offshore’ trade sogo shosha undertake to supply Japanese
MOFA, “Quality Infrastructure (original title in Japanese: 質 の 高 い イ ン フ ラ ),” MOFA website, 26 September 2019,https://www.mofa.go.jp/mofaj/gaiko/oda/bunya/infrastructure/index.html (accessed 21 February 2020).
226
Directorate-General of the Treasury of France (in French: DG Trésor), Tokyo Regional Economic Service (in French: Serviceéconomique régional de Tokyo), Sustainable Development Division (in French: Pôle Développement Durable), “Energy Transition andSustainable
Cities:
Mapping
Franco-Japanesecooperationin
third
countries,”
15
april
2020,
https://www.tresor.economie.gouv.fr/Articles/2020/04/15/energy-transition-and-sustainable-cities-mapping-franco-japanesecooperation-in-third-countries (accessed on 23 April 2020).
225

100

manufacturers abroad, which is between two countries other than Japan, and which represents
more than 40% of their total sales volume. 227 They are currently seven general trading
companies (Figure 20).
Mitsubishi Corp.

42.5 Bill. US$

Mitsui & Co. Ltd.

27,7 Bill. US$

Itochu Corp.

27,5 Bill. US$

Sumitomo Corp.

17,9 Bill. US$

Marubeni Corp.

12,3 Bill. US$

Toyota Tsusho Corp.

11,6 Bill. US$

Sojitz Corp.

4,3 Bill. US$
0

10

20

30

40

50

Figure 20. Market value of Japan’s seven sogo shoshas in 2019 (Source: Forbes)
Aya Yamazaki analyses how sogo shosha can be essential for third country business
partnership, highlighting three of their key functions: their role as intermediaries, as financing
coordinator, and investors. 228 As intermediaries between the contractors and manufacturers,
their role may often reside in being the unique contractual ‘window,’ thereby managing and taking
charge of orders from contractors. In doing so, sogo shosha may choose a combination of
products and equipment from Japanese and foreign manufacturers, but also engage both
Japanese and foreign companies as joint contractors for projects and in strategic consortia.
As financing coordinator, sogo shosha sometimes uses JBIC credits as leverage in obtaining
contracts, and occupy a key role in the area of project financing. Sogo shosha indeed provide
various financial functions, relying on their capability to mitigate risks due to their integrated
corporate structure. Finally, as it appears from the case studies, sogo shosha are also active
investors, including in foreign companies and in activities that may occur in third markets.

3.4. Japanese companies and Open Innovation
Another important trend to grasp for EU-Japan business collaborations in third countries
is the adoption by Japanese companies of an open innovation strategy, especially with regards
to collaboration between large companies and SMEs. 229 This is for example illustrated by the
Patrick Ryan, “Reflecting the nation’s history, ‘sogo shosha’ are unique to Japan,” The Japan Times, 16 October 2018,https://www.japantimes.co.jp/news/2018/10/16/business/reflecting-nations-history-sogo-shosha-unique-japan/#.Xi56Xk_7SM8(accessed on 27 January 2020).
228
Aya Yamazaki, “Cooperation of French and Japanese companies in third markets (original title in French: La coopération desentreprisesfrançaisesetjaponaises
enpays
tiers”),
Conference
paper,
October
2008,
https://www.researchgate.net/publication/322419827_La_cooperation_des_entreprises_francaises_et_japonaises_en_pays-tiers(accessed 19 December 2019).
229
Most elements and sources referred to in this part originate from: Kaori Iwasaki, “Pursuit of Open Innovation: Collaboration ofJapanese Corporates with Foreign Startups,” Presentation, FDI Seminar 2020: Recent trends of Japanese FDI organised by Japan
Bank for International Cooperation (JBIC) and Japan Institute for Overseas Investment (JOI), Tokyo, 28 January 2020.
227

101

collaboration between NTT DATA and Citibeats following an open innovation contest organisedby the Japanese company (case 20). Another example is the foundation of the VC NordicNinja
which benefits from the support of Japanese companies and JBIC (case 21). Indeed, Europe ishome to a great startup ecosystems: in StartupBlink Rankings Report 2019, 17 European
countries are among the top 30 (Table V). Criteria taken into account are the quantity and qualityof startups and other supporting organisations (such as co-working spaces, accelerators, global
startup influencers, and startup event), and the business environment and critical mass.
Table V. Global Startup Ranking: Top 30 Countries (Source: StartupBlink) 230
Rank

Country

Total Score

Rank

Country

Total Score

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

United States
United Kingdom
CanadaIsraelAustralia
The Netherlands
SwedenSwitzerland
Germany
Spain
FranceFinland
Estonia
Ireland
Russia44.09016.71915.86714.62612.95312.907
12.77412.527
12.461
12.396
11.451
11.366
11.267
11.117
10.880

16
17
18
19
20
21
22
23
24
25
26
27
28
29
30

Denmark
India
Lithuania
South Korea
PolandSingapore
CzechiaJapan
Belgium
Italy
New Zealand
China
Austria
Portugal
Chile10.65810.651
10.521
10.467
10.44610.432
10.16810.10310.08610.06710.06410.04010.04010.0349.769

speed-up results

60,6%

adopt new technologies

49,6%develop new usages and markets for own product/technology

41,1%solve technical issues

40,7%

own knowledge/technology is out-of-date

28,4%high cost trying to create new knowledge/technology in-house

25,8%cannot hire talent with necessary expertise

13,6%

found promising knowledge/technology,
candidate for cooperation

10,2%
0

10

20

30

40

50

60

Figure 21. Presence and motivations for open innovation policy in surveyed companies(Source: Rie Fujisawa) 231

StartupBlink, StartupBlink Startup Ecosystem Rankings 2019, 2019, https://report.startupblink.com/ (accessed 5 March 2020).
Rie Fujisawa, “Survey on open innovation,” Recruit Management Solutions, 8 April 2019, https://www.recruitms.co.jp/issue/inquiry_report/0000000748 (accessed 5 March 2020).
230
231

102

70

What is open innovation? Open innovation is defined by Henry Chesbrough and Jason M.
Eichenholz as “the use of purposive inflows and outflows of knowledge to accelerate internalinnovation and expand the markets for external use of innovation, respectively.” Further addingthat “open innovation assumes that companies can and should use external as well asinternal ideas and paths to market as they look to advance their innovations and create
value.” If Japanese companies used to rely on closed innovation, they are now actively pursuing
open innovation as appears for 64,4% of companies employing 300 or more employees in asurvey conducted by Rie Fujisawa. Among the main reasons for promoting open innovation are
speeding-up results (60.6%), adopting new technologies (49.6%), and develop new usages andmarkets for own product/technology (41.1%) (Figure 21). This shift of strategy from closed to open
innovations – and mindset – is detailed in Table VI. Table VII seems to show that Japanesecompanies in the industries of telecommunications, automotive, electronics and railway
seem particularly keen to embrace open innovation. 232 233

Table VI. Contrasting Principles of Closed and Open Innovations (Source: Henry
Chesbrough and Jason M. Eichenholz) 234
Closed innovation

Open innovation

The smart people in our field work for us.
To profit from R&D, we must discover it, develop it
and ship it ourselves.
The company that gests innovation to market firstwill win.
If we create the most and the best ideas in theindustry, we will win.



Not all smart people work for us. We need to work withsmart people inside and outside the company.
External R&D can create significant value. Internal
R&D is needed to claim some portion of that value.
Building a better business model is more important
than getting to market first.
If we make the best use of internal and external ideas,
we will win.

We should control our intellectual property, so that
our competitors cannot profit from it.

We should profit from other’s use of our intellectual
property (license out) and we should license in other’s
IP whenever it advances our business model.

We will own results from contract research with
universities.

We will partner with universities to create knowledge
and encourage use outside our field.

Rie Fujisawa, “Survey on open innovation,” Recruit Management Solutions, 8 April 2019, https://www.recruitms.co.jp/issue/inquiry_report/0000000748 (accessed 5 March 2020).
233
Henry Chesbrough and Jason M. Eichenholz, “Open Innovation: The case for sharing and harvesting innovations in photonics,”
SPIE, 28 December 2018, https://spie.org/news/spie-professional-magazine-archive/2013-january/open-innovation?SSO=1(accessed 5 March 2020).
234
Ibid.
232

103

Table VII. Top 20 Japanese Companies Embracing Open Innovation selected by startups(Source: Innovation Leaders Summit Executive Committee, METI) 235
Rank

Company

Industry

Rank

Company

Industry

1

KKDI

Telecommunications

2

Softbank

Telecommunications

11

Omron

Electronics

12

Mitsubishi UFJ Bank

Banking3

Toyota Motor

Automotive

13

Daiwa House Industry

Construction

4

NTT Docomo

Telecommunications

14

NTT Data

IT services

5

FujitsuElectronics

15

Toppan Printing

Printing

6

Panasonic

Electronics

16

Mitsui Fudosan Realty

7

JR East Railway

Railway17

Fujifilm

8

Tokyu Railway

Railway18

Dai Nippon Printing

Real estate
Photography
and imaging
Printing

9

SonyElectronics

19

ItochuTrading10

Denso

Automotive parts

20

Honda

Automotive

Innovation Leaders Summit Executive Committee, METI, “’TOP 100 Ranking of large companies’ open innovation’ by promising
startups (original title in Japanese: 有望スタートアップが選ぶ「イノベーティブ大企業ランキング TOP100」を発表),” ILS website,
20 June 2019, https://ils.tokyo/news/201906_01.php (accessed 5 March 2020).
235

104

4. RECOMMENDATIONS
4.1. Recommendations for the EU-Japan Centre for Industrial Cooperation and other organisations

Figure 22. Recommendations for the implementation of an EU-Japan Third Market Business Helpdesk

As part of this research, the author was asked to design a potential EU-Japan Third
Country Collaboration Helpdesk that would be established by the EU-Japan Centre forIndustrial Cooperation. Such helpdesk would rely on three pillars: promoting the benefits of EUJapan business collaboration in third markets, supporting business matchmaking, andreinforcing interinstitutional cooperation. The objectives and operational recommendations
are detailed below. They may be relevant to other organisations working on industrial, trade, andinvestment cooperation.
Section summary
This report lays out some recommendations to enhance further EU-Japan businesscooperation in third countries. As for the EU-Japan Centre for Industrial Cooperation or any
similar organisations, such aspiration should be based on three pillars. The first is
the promotion of the benefits of these cooperations to relevant EU, Japan and third countries’
institutional and corporate stakeholders as well as sharing success stories. Opportunities that
EU-Japan business cooperation in third countries represent for companies, for third countries
as clients, as well as on the broad political spectrum are, to the least, poorly know, and to theworst, the object of heavy scepticism from all kinds of stakeholders. The second pillar isthe support of the matchmaking of businesses. The latter should have three approaches:
supporting companies with an already concrete project, technology or service tailored for or
located in a 3rd market and looking for a partner for further development; supporting existing
EU-Japan partner companies in exploring opportunities in third markets; and supporting
companies in entering in strategic collaborations with a partner with whom they will jointly seek
projects in 3rd markets. Such matchmaking should be coordinated with European andJapanese institutional stakeholders, notably on identifying potential business partners on acase-by-case basis, as well as on organising comprehensive business missions. Indeed, thelast focus should bear on reinforcing institutional cooperation. The latter should pursue theobjectives of ensuring clear visibility on the human and financial resources mobilized, aligning
institutional interests and third-country business strategies, and coordinating on the support of
EU-Japan business in third countries as detailed in the “pillars” above-mentioned. A concrete
set of actions would include identifying interested and relevant institutional stakeholders andcontact points as well as the implementation of an EU-Japan interinstitutional working group.
As for businesses, general recommendations on any business cooperation prevail:businesses must have a strong will to cooperate, based on a good mutual understanding ofcommon interests, and inter-complementariness in all its dimensions, as well as being prepared
to engage in a lengthy process to define clearly the details of such cooperation. Furthermore,
there is no doubt that it may be particularly challenging for SMEs to address issues relating todifferences in language, culture and management. Lastly, bearing specifically on the third
country business, an important parameter to keep in mind and highlighted by several
companies is that the negotiation of the business cooperation and project details often occur
with management from the Japanese company’s headquarters in Japan. As for projects in third
countries more specifically, two main sets of best practices shared by companies are to sustain
attention in the local environment and demand, as well as on being vigilant concerning ethics
and compliance standards.

4.1.1. Promote the benefits of EU-Japan business collaborations in third markets
4.1.1.1. Objectives
First and foremost, one of the priorities is to promote the benefits of EU-Japan businesscollaborations in third markets among relevant stakeholders. These relevant stakeholders arecomprised of businesses and business organizations, and institutions related to trade anddiplomatic relations. The targeted audience should be European and Japanese, but also of thetargeted third countries. Indeed, from the discussion of the author with several stakeholders inbusinesses, business and governmental organizations, two issues to address were identified.
The first issue is that it appears the Connectivity Partnership is not heard of, and the term“connectivity” not really understood. Promotion of EU-Japan business collaborations in third
markets should provide a better understanding of the concept of “connectivity,” and perhaps
be more specific of the targeted and covered sectors such as digital, as well as countries orregions. Furthermore, communication should be made on the latest evolution at the politicaland institutional level. For example, in the perspective the Connectivity Partnership will lead to
new and or/joint services from the EU and Japanese institutions, it is necessary to ensure relevant
stakeholders, and in particular businesses, are aware of them promptly.
The second objective that should be pursued is to ensure a better understanding ofthird market business cooperation as an ‘option’ for all relevant stakeholders. Indeed, assuggested by Sawaka Takazaki, Deputy Director, Middle East and Africa Division at JETRO, a
preliminary step to encourage EU-Japan business partnerships in third countries is first to informof the existence and benefits of such collaborations. 236 Partnering and how to partner with aforeign EU or Japanese company might indeed not appear like an evident strategic approach.
By sharing concrete data and examples on the benefits of EU-Japan businesscollaborations in third countries, companies might be more inclined to engage in suchpartnerships. Furthermore, raising awareness on the topic among institutions would accelerate
the EU, EU member states, and Japan inter-institutional cooperation. 237 The latter is particularly
important with regards to the ongoing considerations as regards the implementation of new and/or
joint services, support or financing. Lastly, promoting EU-Japan business collaborations inrelevant third markets is crucial. It would ensure that such partnership truly mirrors the local
expectations, and answer to the local demand and needs. This could ensure for example better
access to project information and tenders.

4.1.1.2. Recommendations
Promoting the benefits of EU-Japan business collaborations in third markets can takediverse forms, and at different levels, and this subpart aims to suggest some concrete solutions.
Sawaka Takazaki (Deputy Director, Middle East and Africa Division, Overseas Research Department, JETRO), in discussion with
Masami Marbot, Tokyo, 28 January 2020.
237
See 4.1.3.Reinforce inter-institutional cooperation.
236

107

The first form of promotion is the organisation of seminars or forums to bring together
public and private sector stakeholders from the EU and Japan, and a targeted third country or
region. Past examples include the French-Japanese collaboration side event held at TICAD VI in
Nairobi, Kenya, in August 2016; but also a forum co-organised by Business France, the French
Embassy and with the support of JETRO in November 2017. 238 More recent examples include
the seminar organised by the EU-Japan Centre for Industrial Cooperation in December 2019, 239
as well as the UK-Japan 3rd Country Infrastructure Collaboration – Workshop & Business forum
organised in March 2020 in Tokyo. 240 Such seminars should be first and foremost informative on
the points mentioned above, with stakeholders from the public and private sectors presenting
success stories and opportunities. Furthermore, these events should also include workshops
and matchmaking sessions, as detailed in the next recommendation. 241 They should also
perhaps target one specific country or region. For instance, in this regard, the first Japan-China
Third Country Market Cooperation Forum organised in October 2018 had a workshop dedicatedto regional development, at which businesses from specifically Thailand were invited. 242
Nonetheless, it should be reminded that such an event is highly demanding in terms of humanand financial resources.
Another suggestion is to create common communication materials such as dedicateda website and brochure, as support for relevant public and private sector stakeholders when
discussing and promoting partnerships of EU and Japanese companies in third countries. The
latter could provide a comprehensive overview of what is being done on the political level, as wellas the relevant contact points in the institutions. It could also present the “basics” of EU-Japan
collaboration in third markets and connectivity with definitions, key numbers and partnerships
schemes, all relying on selected success stories. In comparison with organising a high-level forum
or seminar, such communication materials would not require many resources. In this regard, an
example of the website is the web page dedicated to UK-Japan Collaboration for 3rd Country
Infrastructure Development on the British Market Council website, elaborated in cooperation with
the British Embassy and the Department of International Trade. 243 The web page summarizes thepolitical background and ambitions for such cooperation for British authorities, as well as
proposes priority sectors (Figure 23). The web page also enables the reader to download abrochure. 244 The brochure includes an email address to contact the British Embassy on thismatter and further promotes some specific advantages of collaborating with British
companies such as strengths in financial services, but also legal services, risk management, or
human resources consulting (Figure 24). Then the document lists some companies in the abovementioned sectors and presents several success stories (Figure 24). It also presents the
Details of the event: https://jp.ambafrance.org/Forum-de-cooperation-franco-japonaise-pour-des-infrastructures-de-qualite
Details of the event: https://www.eu-japan.eu/events/eu-japan-business-collaborations-third-markets
Details of the event: https://exporttojapan.co.uk/uk-japan-3rd-country-infrastructure-collaboration-seminar/
241
See 4.1.2. Support EU-Japan business collaborations in third markets
242
JETRO press release, “1st Japan-China Third Country Market Cooperation Forum,” October 2018,https://www.jetro.go.jp/en/jetro/topics/2018/1810_topics11/ (accessed 16 January 2020).
238
239
240

243
British Market Council, “Japan-UK Collaboration for 3rd Country Infrastructure Development,” British Market Council Website,
https://www.british-mc.com/japan_uk/index.html (accessed 4 March 2020).
244
Department of International Trade, Third Country Business Team, Japan-UK Collaboration for 3rd Country Infrastructure
Development, Tokyo, https://www.british-mc.com/japan_uk/form/ (accessed 4 March 2020).

108relevant MoUs between the UK and Japanese institutions and includes a comprehensive
presentation of the UK Export Finance (UKEF). 245

Figure 23. Visuals from the web page on UK-Japan Collaboration for 3rd Country
Infrastructure Development (Source: British Market Council) 246

See 3.1.3.2. The UK and Japan collaboration in third markets.
British Market Council, “Japan-UK Collaboration for 3rd Country Infrastructure Development,” British Market Council Website,
https://www.british-mc.com/japan_uk/index.html (accessed 4 March 2020).
245
246

109

Page 7: “UK Supply Chain: financial services”

Page 19: Success story “Vietnam : Coc San Hydroelectric power generation project”
Figure 24. Visuals from the brochure on UK-Japan Collaboration for 3rd Country
Infrastructure Development (Source: Department of International Trade, Third Country
Business Team) 247

247
Department of International Trade, Third Country Business Team, Japan-UK Collaboration for 3rd Country Infrastructure
Development, Tokyo, https://www.british-mc.com/japan_uk/form/ (accessed 4 March 2020).

110

Concerning another example of a brochure, as cited above, China has publishedguidelines on its own “third-party market cooperation” strategy. On 4 September 2019, thecountry’s National Development and Reform Commission released its “Third-Party Market
Cooperation Guidelines and Cases.” The bilingual (Chinese-English) brochure comprehensively
summarizes and “advertises” the main pillars of the country’s approach in third-market
cooperation, which can be a source of inspiration for the communication on EU-Japan
Connectivity. 248 249
The brochure starts by laying out the foundations for third-market cooperation (Figure 25).
Firstly, it proposes a definition of third-market cooperation, relying on a catchy concept of“1+1+1>3,” which embodies the idea that “China’s business community and its internationalcounterparts [..] draw upon each other’s strengths and work together for better development,
infrastructure improvement and higher living standard in third countries” (page 2). Secondly, thedocument introduces the “vision and principles,” or in other words the broad ambitions andorientations of this initiative in terms of Chinese economic diplomacy (page 3). Then, the report
maps the “mechanisms and platforms” supporting this cooperation, which are the documents
and platforms of reference at the bilateral level for each country partnering with China on thissubject (page 4-6). As of June 2019, China has established joint initiatives with 14 countries,
including Japan and several European countries (Austria, Belgium, Italy, the Netherlands,
Portugal, Spain, and the UK).
The second part of the brochure develops on five models for third-market cooperationand illustrates them with 21 success stories with pictures (Figure 26). The five models are, as
mentioned previously: cooperation in products and services, engineering, investment, industry
and finance combination, and cases of strategic cooperation among businesses (page 7-87). 250

National Development and Reform Commission, People’s Republic of China, Promotion of third-party market cooperation andmutually profitable results (original title in Mandarin Chinese: 推进第三方市场合作 促进多方互利共赢), 4 September 2019, Beijing,https://www.ndrc.gov.cn/xxgk/jd/jd/201909/t20190904_1182950.html (accessed 4 February 2020).
249
National Development and Reform Commission, People’s Republic of China, Third-Party Market Cooperation Guidelines andCases, 4 September 2019, Beijing, https://www.ndrc.gov.cn/xxgk/zcfb/tz/201909/W020190905514523737249.pdf (accessed 4
February 2020).
250
See 2.4. Cooperation schemes in third countries.
248

111

Page 2-3: “What is Third-Party Market Cooperation” and “Vision and Principles
Figure 25. Visuals introducing China’s third-market cooperation strategy (Source: NDRC) 251

National Development and Reform Commission, People’s Republic of China, Third-Party Market Cooperation Guidelines and Cases, 4 September 2019, Beijing,https://www.ndrc.gov.cn/xxgk/zcfb/tz/201909/W020190905514523737249.pdf (accessed 4 February 2020).

251Page 6: Partner countries, reference documents and platforms

113Page 7 (extract): “Cases of Cooperation in Products and Services
Figure 26. Visuals on China’s third-market cooperation success stories (Source: NDRC) 252
National Development and Reform Commission, People’s Republic of China, Third-Party Market Cooperation Guidelines and Cases, 4 September 2019, Beijing,https://www.ndrc.gov.cn/xxgk/zcfb/tz/201909/W020190905514523737249.pdf (accessed 4 February 2020).

252

114

Page 14-15: “Case 3: Cooperation among Energy China and companies of Malaysia and Estonia on an oil shale-fuelledpower plant in Jordan”

115

Page 64-65 (extract): “Case 16: Cooperation between Sinosure and ENEL of Italy in developing Latin American markets”

116Lastly, it appears so far that the promotion of EU-Japan business cooperation in third
markets has originated mostly from the political level. Until perhaps some further study would
bring a better overview of the trend with solid quantitative data, it remains some scepticism,
including from institutions, as to whether businesses are overall truly interested in suchcollaboration, and if yes, what are their expectations vis-à-vis some support from institutions. Thus,businesses need to voice their ambitions with regards to EU-Japan business cooperation and
the Connectivity Partnership. This would motivate institutions to dedicate more resources tosupporting such cooperation, as well as accelerate EU-Japan inter-institutional cooperation. It
would also enable businesses to engage in a virtuous circle with institutions that could design
better services as to ultimately support them. To do so, businesses should provide policy
recommendations through business organisations and trade promotion agencies.

4.1.2. Support EU-Japan business matchmaking
4.1.2.1. Objectives
Another area in which the EU-Japan Centre for Industrial Cooperation and similarorganisations could offer their support is in matchmaking of European and Japanese companies
interested in collaborations in third countries.
Several limits are to be considered first and foremost. A first mentioned by Japaneseinstitutional and corporate stakeholders is that Japanese companies are reluctant to partnerwith foreign companies, and as a rule of thumb, prefer to partner with other Japanesecompanies, or companies with high cost competitiveness usually from countries such as China
or India. Secondly, businesses have mitigated responses to institutional support for projects
in third countries: if some companies are warmly welcoming such initiatives and proactively
seeking institutional/political support, others (mostly large companies) are extremely doubtful ofthe value-added of such approach. An institutional stakeholder even indicated that those
divergences could arise within the same company. This skepticism is reinforced by the fact thata vast majority of projects are the result of a lengthy process in which companies gradually build
trust. Thus, with this regard, punctual institutional support can seem futile. A last and a morepractical limit is that depending on each company’s respective organizational structure, EU-Japanbusiness collaborations in third markets does not necessarily involve staff in Japan and may
be managed by local or regional subsidiaries.
Three approaches to supporting business matchmaking can be considered. The firstwould be to support one company with already a concrete project or technology underway,
and that is looking for a partner for further development, expansion, or in order to answer to thecriteria of a tender. If this approach would enable the EU-Japan Centre for Industrial Cooperationand other institutional stakeholders to have clear visibility on the progress of concrete projects, itremains that the level of resources or technical expertise required to answer fully to the company’s
demand may not be met, compared to more specialized intermediaries such as consulting or M&A
firms.

The second approach would be to encourage existing EU-Japan partner companies
in exploring opportunities in third markets, while the third would consist in assisting
companies willing to enter in a strategic collaboration with an appropriate partner in orderto jointly seek projects in targeted sectors and third markets (such as in case 5 between
Hitachi and Veolia Water Technologies). This approach would be practically easier for the EUJapan Centre for Industrial Cooperation to implement, however, it would not necessarily result in
immediate and concrete projects and require a meticulous follow-up over the years.

4.1.2.2. Recommendations
The EU-Japan Third Country Business Helpdesk could be a platform through which
companies would apply and interact with the EU-Japan Centre for Industrial Cooperation, andfrom which support of business matchmaking could be considered. This platform would beparticularly helpful to reach out to European SMEs and should be promoted together with otheractivities of the Centre’s such as the EU-Japan Cooperation Helpdesk, or throughout the EEN
network.
This helpdesk could first and foremost rely on an online platform to receive online
applications/requests from companies. Such online application form would have three entries,
echoing to the three approached above-mentioned: “my company has a
product/technology/project tailored for or located in a third market, I am looking for a partner,”(entry 1) “my company is looking for a partner to explore together opportunities in third markets”(entry 2), “my company wants to explore opportunities overseas together with our Japanese
partner(s)” (entry 3). An example of entry 1 is: “My company is an SME with innovativetechnologies in X, that would answer to the need of X in X region. We are looking for a partner for
further investment and business development to expand our activities.” Then, an example of entry
2 is: “My company provides X infrastructures. We are looking for a partner to explore opportunities(e.g. answer tenders / financing) in this sector and in X region.” The platform would then ask forthe company information, details on the product/technology, the total investment required (entry1), targeted third markets, targeted form of partnership, desired profile of partner company (entry
1 & 2) or of the Japanese partner companies (entry 3).
The EU-Japan Centre for Industrial Cooperation would then do a pre-selection ofpromising companies to support matchmaking based on eligibility criteria and maturity of the
project, in line with the Centre’s priorities. It would then consult with Japanese stakeholders (seenext recommendation) and in particular JBIC, JETRO, JICA and JOIN. It would present the latterthe pre-selected companies, in order to agree on a final selection of companies to support andmatchmaking approach. A first option would be matchmaking on a case-by-case basis: that isfor example if during this preparatory discussion between the Centre and Japanese institutional
stakeholders, some potential business partners and contact points for the company whichreached out to the helpdesk would already be suggested. A second option would be to organisea business mission on a target industry, and when relevant, a sub-target third market. Such abusiness mission should focus on meeting Japanese trading houses, and public Japanese118financial stakeholders (JBIC, JICA and JOIN). It could occur ‘independently,’ or at the occasionof a relevant conference or international political event.
Suggestions for themes for the upcoming business missions are: power sector in
Africa (in which Japanese trading houses seem to be greatly interested in) and renewables
in general; smart cities in ASEAN and in particular digital (such as IoT and AI) applied todimensions of mobility, governance and quality of life.

4.1.3. Reinforce inter-institutional cooperation
4.1.3.1. Objectives
The last pillar identified to support EU-Japan business cooperation in third markets is toreinforce inter-institutional cooperation between the EU, EU Member States, and Japaneseinstitutions. It appears that two main objectives should be aimed for.
The first one is to guarantee a systematic dialogue between institutions. This would
enable potential stakeholders to define and align common interests, such as targeted projects
and regions, as well as to establish joint mechanisms and symmetric support of concrete
projects. Attention should be given on delimiting the scope of the Connectivity Partnership and
EU-Japan collaboration in third countries. Indeed, for example, even though it is not the approachtaken in this report, it appears that several institutional stakeholders consider that collaboration at
the financing level without necessarily involving business cooperation is relevant to EU-Japan
collaboration in third countries. Furthermore, the issue of what is the scope of work between the
EU-institutions and European countries institutions should be coordinated to avoid unnecessary
duplication. Then, a second and subsequent objective is to jointly define and ensure thevisibility of the human and financial resources mobilised in each institution to the support of
EU-Japan Connectivity.

4.1.3.2. Recommendations
Inter-institutional cooperation is a daunting and complex task. This report will suggest
nonetheless some suggestions on how to proceed. A first step would be to identify contact
points, or divisions/departments, in each appropriate governmental institution and nongovernmental organizations at the EU, and EU-member states’ level, as well as the Japaneselevel, which would enhance the efficiency of the dialogue. Below is a preliminary mapping of these
relevant institutions (Table VIII) and organizations (Table IX). 253 Sector-specific institutions listed
focus on infrastructures, environment, and digital/ICT; following the focus of this report. However,
EU-Japan business collaborations in third markets could cover an infinite range of other sectors
such as agriculture, fisheries, or space.
253 See

propositions in Table XI. Institutional stakeholder mapping for the EU-Japan Interinstitutional
Working Group of ANNEX 2. Implementation of the EU-Japan Interinstitutional Working Group.
119

Table VIII. Mapping of relevant governmental institutions for EU-Japan business collaborations in third countries
Japan

Diplomacy

GeneralEconomic
Affairs

Development

Sectoral(in particular infrastructures,
environment, and digital/ICT)•EU

Ministry of Foreign Affairs (MOFA)•

Ministry of Economy, Trade andIndustry (METI)•

Japan External Trade Organisation(JETRO)•Japan International
Agency (JICA)

Cooperation•

Ministry of Land, Infrastructure,
Transport and Tourism (MLIT)•

Ministry of the Environment•

Ministry of Internal Affairs andCommunication (MIC)•

Japan Bank for
Cooperation (JBIC)•

Financial••

EU Delegation in Japan•

European External Action Service (EEAS)•

Ministry for Foreign andEuropean Affairs
Embassy in Japan
Embassies in targeted
regionsandthirdcountries•

Services for Foreign Policy Instruments (FPI)••

Directorate-GeneralforEuropean
Neighbourhood and Enlargement Negotiations(DG NEAR)••

EU-Japan Centre for Industrial Cooperation•

Directorate-General for Trade (DG TRADE)••

Directorate-General for Economic and Financial
Affairs (DG ECFIN)

Ministry for Economic
Affairs•

Embassy
economysectionsin Japan,and trade•Tradeagencies

promotion•

Development Agency•

Sector-specificministries
Sector-specific sections
in embassies•

Directorate-GeneralforInternal
Market,Industry, Entrepreneurship and SMEs (DG
GROW)

•

Executive Agency for Small and Medium-sizedEnterprises (EASME)•

Directorate-GeneralforInternational
Cooperation and Development (DG DEVCO)•

Directorate-General for Climate Action (DG
CLIMA)•

Directorate-General for Environment (DG ENV)•

Directorate-General
Networks, Content
CONNECT)

forand

Communications
Technology (DG•International

Japan
Overseas Infrastructure
Investment
Corporation
forTransport & Urban Development(JOIN)
Nippon Export andInsurance (NEXI)EU member states

Investment•

European Investment Bank (EIB)•

National
Bank

Investment

International & Third
regions/countries•

Ministry
Affairsfor

Foreign•

Embassy in Japan•

Embassies in the EU•

Ministry for Economic
Affairs•

Embassy in Japan andthe EU, economy andtrade sections

X••

Sector-specificministries
Sector-specific sections
in embassies•

European Bank for
Reconstruction
andDevelopment (EBRD)

•

Asian
Development
Bank (ADB)•

World Bank

Table IX. Mapping of relevant non-governmental organisations for EU-Japan businesscollaborations in third countries
Japan

GeneralSectoral/Regional•

Japan Chamber of Commerceand Industry (JCCI)•Tokyo Chamber of Commerceand Industry•

EU-Japan Business Round Table•

Japan Foreign Trade Council(JFTC)•

Japan Machinery Center (JMC)•

Japan Open Innovation Council(JOIC)•

Renewable Energy Associationfor Sustainable Power supply(REASP)

EU member states

EU•

EuropeanBusiness
Organisation
Worldwide
Network (EBO WWN)•

Business Europe••

EU-ASEAN Business Council
EU-Africa
ChamberofCommerce (EUACC)(example of corresponding French
institutions)•

Chambers of Commerce inJapan

A second phase would be to set up a steering committee / working group with relevant
contact points in the identified institutions and organizations. 254 This committee would meet
regularly, for instance twice a year, with the following agenda:••••

Aligning and defining common ambitions (targeted sectors, regions etc.);
Listing opportunities with project information and tenders;
Discussing concrete projects and companies to support (matchmaking, financing etc.),
including those screened by the EU-Japan Centre for Industrial Cooperation;
Coordinating other initiatives and actions such as promotional or political.

As regards the task of harnessing the opportunities that would be jointly listed by such acommittee, it should be reminded that a challenge remains that they become truly beneficial to a
European and Japanese collaboration. The risk being, for example, that information provided on
one tender by one side, ultimately results in the other side’s companies winning the bid with nobusiness collaborations. Nonetheless, the EU-Japan Centre for Industrial Cooperation could
focus on strengthening relations with Japanese institutional stakeholders based in Japan,
European chambers of commerce and trade sections of the Delegation of the European Union intargeted third markets to be informed of the latest opportunities there, and adapt its approachaccordingly.
As mentioned above, as for discussing concrete projects and company matchmaking, thepotential role the EU-Japan Centre for Industrial Cooperation could be to provide to this committee
a first screening and assessment of how mature the projects are, from the European side. This

254 See

propositions in Table XI. Institutional stakeholder mapping for the EU-Japan Interinstitutional
Working Group of ANNEX 2. Implementation of the EU-Japan Interinstitutional Working Group.
121

could take the form of a 1 or 2-pages briefing note that would include a project description withlocation, sector, total investment, and potential existing Japanese partner(s).

4.1.4. Other recommendations
Other forms of support from the European and Japanese authorities from the three above
mentioned could be considered.
Tatsuro Kikuchi from Hitachi, Ltd. Energy sector, mentions that advancing the common
agenda on the issue of harmonising standards, as mentioned in the article 7.6 of the EU-Japan
EPA, would be particularly helpful to EU-Japan business collaborations in third markets. 255 256
Similarly, the Japanese Government emphasized on the issue of ensuring the proper compliancewith international standards in third country business as central. 257
Other forms of joint EU-Japan institutional support may be tailored to the need ofcompanies in specific third markets. In this regard, the survey conducted by JETRO on whichgovernment support is expected by Japanese companies in Africa for example highlights thatgovernment support is also expected in formulating requests to the government of the host nation,
on information provision or talent management (Figure 27 and Figure 28). Indeed, one
Japanese general trading company with whom the author discussed emphasized that the latter
can information provision particularly challenging in Africa on issues such as financial liability,
repayment capability, political stability and micro-economic situation. More generally, it has also
been pointed out by companies that the speed at which companies have access to tender
information is highly strategic. Cooperation of overseas diplomatic missions on this matter might
be appreciated.

255 Tatsuro Kikuchi (Supervisor, Communications & Governmental Relations Department, Business Planning & Strategy Division at
Hitachi, Ltd. Energy Sector), in discussion with Masami Marbot, Tokyo, 25 February 2020.
256“EU-Japan Economic Partnership Agreement: texts of the agreement,” signed on 17 July 2018, European Commission website,
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52018PC0192#document2 (accessed 26 February 2020).
257
Japanese Government, Agenda of the 39th Meeting on Strategy relating Infrastructure Export and Economic Cooperation (17October 2018) on the theme of third country cooperation (original title in Japanese: 第３９回経協インフラ戦略会議（2018 年 10 月17 日）テーマ：第三国連携 議事次第), 17 July 2018, https://www.kantei.go.jp/jp/singi/keikyou/dai39/siryou1.pdf (accessed 26
February 2020).

122Requests to government of host nation(Establishement of/providing improvement…

57,3%

Financial support

45,8%

Information provision

45,8%

Conclusion of bilatereal agreements(FTA/EPA, tax convention, etc.)
Top sales of Japanese products/brands byministers

45,8%
36.0%

Talent management (African people)

30,4%

Technology exchange/relocation

20,9%

Improvement in host nation customs
procedure

19,8%Personnel exchanges

18,2%Talent Management (Japanese people)

6,3%

Other

9,1%
0

10

20

30

40

50

60

70

Figure 27. Required company support for Japanese companies for business in Africa(Source: JETRO) 258

Not sure
14,4%
Can bereduced0,3.0%
Should be
reinforced
75,7%

Sufficient
9,5%

Figure 28. Japanese companies’ opinion on whether more Japanese government supportshould be given for business in Africa (Source: JETRO) 259

JETRO, Overseas Research Department, Middle East & Africa Division, 2018 Survey on Business Conditions of Japanese AffiliatedCompanies in Africa, 15 February 2019, Tokyo, https://www.jetro.go.jp/ext_images/en/reports/survey/pdf/rp_firms_af2018.pdf(accessed 7 November 2019).
259
Ibid.
258

123

4.2. Recommendations for businesses & Best practices
This last part aims to provide recommendations for businesses seeking to engage in EUJapan business collaboration in third countries. Far from being exhaustive facing the variety ofbusiness collaborations, industries, and third markets that could be at stake, this part compiles
some of the best practices indicated by different institutional and corporate stakeholders.

4.2.1. Recommendations on EU-Japan business collaborations
The first set of recommendations pertains to the EU-Japan business collaboration itself.
Beyond the great geopolitical background discussed in this report, a prerequisite remains to any
collaboration: businesses must have a strong will to cooperate, based on a good mutual
understanding of common interests, and inter-complementariness in all its dimensions(technologies, geography, human and financial resources etc.). A second crucial parameterbusiness should keep in mind is that the preparation stage during which the collaboration isconsidered and discussed is a lengthy process. This is as true for large-size infrastructure
project where they may be several years between the tender official announcement, the tenderselection, the start of construction and then of operation; as for investment and joint developmentof certain technologies and products, which relies on a long-term relationship of trust graduallybuilt upon by the business partners.
As for dealing with differences in language, culture and management exposed
previously, there is no doubt that they might be more challenging for SMEs, than to large
companies. Among the best practices shared by the companies, the first one is the (temporary)exchange of personnel between the companies are within the eventual structure in a third
country, as to enable a better linkage between the two partners. This is for example the case of
the collaboration between Marubeni and Azuri Technologies (case 17), and Mitsubishi Heavy
Industries and Vestas (case 10). Another best practice shared by a European SME is to always
rely on a professional translator from their mother tongue to Japanese, in all formal exchanges
with its Japanese partners. This would enable to guarantee a better mutual understanding
between the companies (compared to a situation in which the partners would exchange inEnglish), as well as better handling cultural differences.
The last comment made by companies on the negotiation/discussion of thepartnership and project details is that for Japanese companies, they often involve managementfrom the Japanese company’s headquarters in Japan. Hence, it might prove easier for European
companies considering a collaboration to rely on a Japan-based contact point. As for European
companies, it seems that the Japanese subsidiary is not necessarily involved incollaborations with Japanese companies in third countries, as sometimes it is piloted by a local
or regional subsidiary. Such an aspect should be taken into account by Japanese companies.
4.2.2. Recommendations on business collaborations in third countries
As for business collaborations in third countries per se, there seem to be two particularareas of caution. First, be mindful of the local environment and demand: companies stressedthat securing promptly local information provision and local resources (from suppliers to workforce)can be highly strategic. Second, being vigilant of ethics and compliance standards of thebusiness partners, and given the third country’s local laws. This converges with the comments of124

Pierre Mustiere, CEO of Bouygues Asia, who distinguishes four priorities: the training of thelocal workforce, maintaining a code of ethics, ensuring the security of people and assets,logistics and remote work (Figure 29). 260

Figure 29. Some key principles on France-Japan collaboration in third party countries(Source: Pierre Mustiere) 261
260
Pierre Mustiere, “Collaboration in third party countries,” Presentation, EU-Japan Centre for Industrial Cooperation seminar on EUJapan
Business
Collaborations
in
Third
Markets,
Tokyo,
3
December
2019,
https://www.eujapan.eu/sites/default/files/imce/bouygues_2019_0212france_japan_collaboration_v0.pdf (accessed 3 December 2019).
261
Pierre Mustiere, “Collaboration in third party countries,” Presentation, EU-Japan Centre for Industrial Cooperation seminar on EUJapan
Business
Collaborations
in
Third
Markets,
Tokyo,
3
December
2019,
https://www.eujapan.eu/sites/default/files/imce/bouygues_2019_0212france_japan_collaboration_v0.pdf (accessed 3 December 2019).

125

Acknowledgments
Although only my name appears as the author of this report, many people have contributed to it.
First and foremost, I would like to express my sincerest gratitude to the EU-Japan Centre forIndustrial Cooperation and Mr. Philippe de Taxis du Poët, EU-side General Manager for enabling
me to enrol in the MINERVA research and policy analysis programme, and for giving me theopportunity and the resources to delve into this fascinating topic. I also would like to thank Fabrizio
Mura, Morgane Benoist, Toshiro Fukura, and all the staff at the EU-Japan Centre for Industrial
Cooperation for their continuous guidance, but also for making working hours enjoyable. I lookforward to working with you again in the future.
I would also like to thank all companies, organisations, and people who made time to discuss andshare with me their own experience and thoughts on the topic.
Last but not least, I am especially grateful to my fellow MINERVA experts, Joana Vaz and Réka
Lóczi, for their constant and immeasurable support.

Tokyo, April 2020
Masami MARBOT

126

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27

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134

ANNEX 1: Complementary list of case studies
Table X. Complementary list of case studies
Characteristics of the companies
SectorJapanese company
Name

Transportation

EnergyCharacteristics of the partnership

European Company
Name

Third
MarketReference(s)Year

Details on joint
project(s)https://www.anacargo.jp/en/new
s/ana_cargo_and_lufthansa_car
go_joint_venture_5_year_annive
rsary.html

Size(COUNTRY)

All Nippon
Airways
Corporation

large

Deutsche
Lufthansa AG

large

Joint-venture

Europe2014

Air cargo jointventure on routes
between Europe
and Japan

Daiho
Corporation

large

RAZEL-BEC
SAS (France)large

Contractor/sup
plier

Ivory
Coast

2017

Construction of two
flyovers

https://www.fayat.com/en/refere
nces/solibra-junction

Sumitomo
Corporation ;
TEPCO

large

Electricite deFrance SA

large

Joint-venture

Vietnam

1999

Power plant

https://www4.tepco.co.jp/en/press/corp-com/release/05020701e.html

MODEC ; Mitsui& Co ; Mitsui
O.S.K. Lines;
Marubeni
Corporation

large

Galp Energia
SGPS SA

large

Investment

Brazil2012

Oil field

https://www.jbic.go.jp/en/information/press/press-2011/03286319.html

Eurus Energy
Holdings

large

Akuo Energy
SAS

large

Investment

Uruguay

2013

Wind farm

https://eurusenergy.com/news/pr
ess-releases/eurus-energyamerica/minas-wind-farm/large

Total SA2018

Ichthys LNG project

https://www.total.com/en/energyexpertise/projects/oilgas/lng/ichthys-a-bold-lngproject-off-the-coast-of-australia

2018

MoU forcollaboration inconstructionhydroelectric andgeothermal plants

https://www.toshibaenergy.com/en/info/info2018_05
03_02.htm

INPEX
Corporation

Toshiba
Corporation

large(Germany)(France)(Portugal)(France)(France)

VINCI SA(France)

Size

Form ofpartnership

large

large

Joint-venture

Collaboration

135

Australia

AfricaJERA
Corporation
Mitsubishi
Corporation

Mitsubishi
Corporation

large

Orsted S/Alarge

BBOXX Ltd.

large

Egis
International
SAS (France)

large

Técnicas deDesalinazació
n de Aguas SA

Water &
Waste
Management
Mitsui
Corporation(Denmark)(UK)

Machinery &Industrial
Equipment

Mitsubishi
Heavy Industries
Ltd

large

Siemens AG

Wholesale &Retail trade

Mitsubishi
Corporation

large

Bergé
Automoción
SL

OthersMitsubishi
Sumitomo
Insurance
Corporation(Germany)

large

large

large

Investment

Investment

Collaboration

large(France)Wind farm

https://www.jera.co.jp/english/inf
ormation/20181228_37

2019

Pay-as-you-go solar
energy equipment

https://www.bboxx.co.uk/bboxxcloses-50-million-series-dfunding-round-led-by-mitsubishiCo./

2018

Collaboration onsustainable city andin water in Ivory
Coast

https://www.egisgroup.com/action/news/egisand-mitsubishi-corporation-signtwo-agreements-developmentjoint-projects

Australia,
Chile

2017,
2018

Collaboration in
operation fordesalination andconveyanceservices

https://www.mitsui.com/jp/en/rel
ease/2017/1224667_10832.html;
https://www.mitsui.com/jp/en/topi
cs/2018/1226545_11241.html

Steel and metal
production
machinery

https://press.siemens.com/global/en/pressrelease/joint-venturemitsubishi-heavy-industries-andsiemens-starts-operations

AfricaAfricalarge

Joint-venture

Large

Joint-venture,acquisition

Global

2014,
2019

large

Investment

Europe,Latin
America

2019

Motor vehicle
wholesale and retail
distribution

http://www.journalauto.com/lja/ar
ticle.view/33406/mitsubishi-etberge-vers-une-coentreprisetransatlantique/4/distribution

2014

Providing insurance
to Japanese clientcompanies forbusiness in Africa

https://asia.nikkei.com/Business/
Mitsui-Sumitomo-Insuranceteaming-up-with-Europeanpeers(Spain)AXA SA2018

Taiwanlarge

Collaboration

136

Africa

ANNEX 2: Implementation of the EU-Japan Interinstitutional Working
Group
The EU-Japan Interinstitutional Working Group (Figure 30) would be a body composed ofrepresentatives of the EU-Japan Centre for Industrial Cooperation, JBIC, JETRO, JICA and
JOIN. It would aim to provide support to both the EU SME Finance Helpdesk 262 and to the
EU-Japan Third Country Business Helpdesk proposed in this report, notably relying on theestablishment of a regular channel of communication between the EU-Japan Centre forIndustrial Cooperation and key institutional stakeholders in Japan. Ideally, this Working Groupshould meet every three months to discuss financing and non-financing opportunities (e.g.
priority sectors and third markets) for EU-Japan business collaborations.
The main priorities of the Working Group are to align ambitions and define a common strategy
to its EU and Japanese parties, list opportunities, discuss concrete projects and support tools,
and coordinate promotional and political initiatives. Indeed, besides the regular meetings, theWorking Group is expected to organise joint activities, such as seminars/training sessions, aswell as facilitate matchmaking between EU and Japanese companies. The matchmaking
service should be provided either on a case-by-case basis with the EU-Japan Centre forIndustrial Cooperation briefing its Japanese counterparts on a couple of particularly promisingbusiness plans at each meeting, either by collaborating on organising comprehensive
business missions.
On the financial level, the Working Group should support EU SMEs in connecting with financial
providers and Japanese partners to become eligible to apply for financial instruments provided
by Japanese institutions. On the non-financial level, the Working Group should support
companies looking for a Japanese partner with whom they can jointly operate in third markets
and/or existing EU-Japan partner companies in exploiting opportunities in third markets.
In terms of internal preparation for the meetings of the Working Group, the position of the EUJapan Centre for Industrial Cooperation should be based on a regular follow-up with the“Advisory Stakeholders” that are:•••

The European Commission, in view of receiving inputs for the overall strategy andprogress;
The European Investment Bank, to follow-up on the progress of the MoUs with JBIC,
JICA and NEXI);
Governmental and non-governmental trade promotion organisations (national or EU
public departments and agencies working on topics related to trade and/or EU-Japan
relations, industry and trade associations and chambers of commerce), in view ofpromoting the helpdesks and exchanging on local opportunities in coordination withlocal Japanese institutional and corporate stakeholders.

Table XI provides a stakeholder mapping, including contact points, for the implementation of
the EU-Japan Interinstitutional Working Group.

See my colleague Joana Vaz’s report on “Research and list-up access to funding and financing Support for EU SME’s
Internationalization to Japan.” Available at: https://www.eu-japan.eu/minerva-past-reports-20142019#
262

137

Figure 30. Implementation of the EU-Japan Interinstitutional Working Group138

Table XI. Institutional stakeholder mapping for the EU-Japan Interinstitutional Working Group

Relevance for the EU-Japan Centre
Comments / Key message(confidential)

Stakeholder

Type

LocationContact point(confidential)

Japan External Trade
Organization (JETRO)

Governmental

Tokyo,
Japan(confidential)

Support in promotional
activities and matchmaking(confidential)

Ministry of Foreign Affairsof Japan (MOFA)

Governmental

Tokyo,
Japan(confidential)

Support in interinstitutional
cooperation(confidential)

Japan Machinery Center
for Trade and Investment(JMC)

Business
Association

Tokyo,
Japan(confidential)

Support in promotional
activities and matchmaking(confidential)

Japan Chamber ofCommerce andIndustry/Tokyo Chamberof Commerce and Industry

Business
Association

Tokyo,
Japan(confidential)

Support in promotional
activities and matchmaking(confidential)

Japan Bank forInternational Cooperation(JBIC)

Governmental/
Financial
institution

Tokyo,
Japan(confidential)

Financial support for EUJapan business partnerships(loans and equity)(confidential)

N/A

Financial support for EUJapan business partnerships
in third markets (available atthe local level via calls fortender and under very
specific conditions)(confidential)

Japan International
Cooperation Agency (JICA)

Governmental/
State Aid

Tokyo,Japan

EU SME
Finance
Helpdesk

139

EU-Japan
Third Country
Collaboration
Helpdesk

Potential for joint
activities

Nippon Export andInvestment Insurance(NEXI)

Governmental

Tokyo,
Japan(confidential)

Financial Support for EUJapan business partnerships
in third markets.

Japan Overseas
Infrastructure Investment(JOIN)

Governmental

Tokyo,Japan

N/A

Financial Support for EUJapan business partnerships
in third markets.

(confidential)

Japan Investment
Advisers Association(JIAA)

Japan/ Nongovernmental

Tokyo,Japan

N/A

Informing the EU-Japan
Centre about potential
investors in Japan(confidential)

European Investment Bank(EIB)EU Institutions

Luxembourg(confidential)

Informing the EU-Japan
Centre about the progress of
the MoUs with JBIC, JICA
and NEXI(confidential).

The European Trade
Association for Business
Angels, Seed Funds and
Early Stage Capital Market(EBAN)

Nongovernmental

Brussels,
Belgium

N/A

Connecting the EU-Japan
Centre with smart capitaland angel investors.

(confidential)

EEN Access to FinanceWorking Group

Nongovernmental

EU level,
Severallocations(confidential)

Providing the EU-Japan
Centre with relevant
information on future EU
funding programmes(confidential)(confidential)

Providing the EU-Japan
Centre with relevant
information on future EU
funding programmes(confidential)

DG GROW – Access toFinance for SMEs (Unit H3)

EU Institutions

140(confidential)