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Regional FDI Opportunities

Mie Prefecture: “Three Valleys” Concept Attracts Specialized Business Segments to Nurture Next-generation Industries

As part of its policy to change the prefecture’s industrial structure, is taking active steps to attract enterprises in specific sectors, shifting toward knowledge- intensive industries that are highly competitive in international markets, such as makers of advanced materials and parts. To pursue this strategic approach, is working to attract cutting-edge enterprises in three areas: flat-panel displays, semiconductors, and medical care, health and welfare.

Situated between the Two Corporation. Petroleum and chemical in- Mie Prefecture Major Economic Centers of dustries, such as Mitsubishi Chemical Chubu and Kansai, Mie Corporation, JSR Corporation, Cosmo Oil Prefecture Is Keen to Attract and Showa Sekiyu, are heavily Next-generation Industries concentrated in Yokkaichi. Mie Prefec- Mie Prefecture, located right in the mid- ture promotes tie-ups between the mate- dle of , lies between the two major rials and parts industries and assembly welfare). Various incentives, such as subsi- economic centers of Chubu and Kansai. industries and aims to become fertile dies, are being offered to attract related , center of the Chubu economic ground for continuous innovation. Vari- industries, and the prefecture also actively region (Aichi, and Mie prefectures) ous small and medium-size enterprises supports research and development and is also known for the Greater Nagoya Ini- are also located in neighboring areas, and networking. tiative (GNI), where government, indus- the prefecture is promoting further devel- Promoting the concept helps attract in- try and academia work together to pro- opment of this region as a concentration dustries in these fields to Mie Prefecture, mote technological and business of next-generation industries. which has various advantages to offer. alliances, and accordingly Mie Prefecture For example, locating related industries is well-located as a base for business ac- Attracting Enterprises in in the same area can reduce logistics tivities. Specific Industries costs and also makes it easier to obtain Major companies that are leaders of Mikiya Tanaka, head of the Mie Prefec- information or procure parts. Further- Japanese industry are found in the north- ture’s Industrial Investment Promotion more, industries of the same type can de- ern part of the prefecture. For example, Division, Department of Agriculture, velop technologies that complement semiconductor- and liquid crystal Fisheries, Commerce and Industry, relates each other, leading to development of a display-related industries have plants for that “beginning six years ago, we have comprehensive industrial structure. The NAND flash memories (), system made the industrial policy, ‘Three Val- major advantage of this idea is that it LSI chips (Fujitsu) and LCDs (Sharp). Mie leys’ concept, a central component of our helps create a brand for the region, some- Prefecture is also home to automotive in- strategy for attracting industry to the pre- thing that can’t be done through the ac- dustry concerns such as Motor in fecture, and we are actively approaching tivities of companies acting individually. Suzuka, Auto Body and Denso companies based on this idea.” As far as attracting foreign-affiliated The “Three Valleys” concept companies is concerned, Mr. Tanaka Shipment value of goods manufactured in Mie Prefecture was set down in 2000, and says, “the quickest way for foreign- (establishments with 10 or more employees) prefectural Akihiko affiliated com- Noro, who took office in 2002, panies to set placed particular emphasis on up operations Transportation machinery Other this in the prefecture’s overall in Mie is 30% and equipment 27% plan. A major feature of the through tie- plan is industrial policy target- ups with com- ing fields expected to develop panies in the Electronics 14% into next-generation indus- region. We act Petroleum products 5% tries. The “Three Valleys” idea as intermedia- Electrical machinery Chemicals is currently being pushed ries between and equipment 10% the two sides, 5% along in the form of “Crystal General machinery Valley” (flat-panel displays and if they do Mikiya Tanaka, head of the and equipment business with Industrial Investment 9% and other LCD technologies), Total: 9,458.1 billion yen each other in Promotion Division, “Silicon Valley” (semiconduc- Department of Agriculture, Source: Ministry of Economy, Trade and Industry, “Statistics Table (Census of the prefecture, Manufactures 2005)” (made public on July 20, 2007) tors and IT) and “Medical Val- Fisheries, Commerce and http://www.meti.go.jp/statistics/kougyou/2005/k3/index.html ley” (medical care, health and that can lead Industry, Mie Prefecture

6 Invest Japan No.18 Regional FDI Opportunities to their setting up a representative office explained the projects and activities that Photon Dy- here or ultimately, a branch office.” To Mie Prefecture has undertaken with such namics is the stimulate the process, from this fiscal enthusiasm that BASF offered to become Japanese sub- year Mie Prefecture has started a pro- a partner in revitalizing the prefecture’s sidiary of U.S. gram to attract foreign-affiliated compa- regional economy,” said Hideyuki Kita- company Pho- nies that can offer technical tie-ups. And bayashi, General Manager, Corporate De- ton Dynamics to make the process of attracting compa- velopment, BASF Japan. “The prefecture Inc. The com- nies run smoothly, the prefecture has al- has also followed up extensively after the pany’s head of- so set up an advisory board to collect in- signing of the agreement and continues fice that has formation on foreign companies and to bring new ideas forward. We are very sales depart- study the potential for technical tie-ups encouraged by the prefecture’s active ment is located Masayuki Nouda, President between those companies and compa- support.” in Tokyo, and of the Japanese subsidiary nies in the prefecture. In addition, half its support of Photon Dynamics of the employees in the prefecture’s In- Case study 2: Nihon Cabot center is at dustrial Investment Promotion Division Microelectronics KK. Anotsudai in the city of Tsu. The parent have engineering backgrounds, so that —Mie Prefecture assisted the company company, founded in 1986 as a venture office can provide one-stop service and in setting up a plant and R&D center for business producing testing equipment for it’s also set up to handle all the necessary the Asia-Pacific region. gallium arsenide semiconductors, went administrative procedures. That way, on to develop testing equipment for companies interested in locating in Mie Nihon Cabot LCDs, which were starting to emerge in Prefecture are assured of quick support Microelectron- the 1990s. Today, the company has a 70 from the prefecture while maintaining ics KK., a sub- percent share of the world market for liq- confidentiality. sidiary of the uid crystal testers. Masayuki Nouda, pres- U.S. company ident of the Japanese subsidiary, relates Foreign-affiliated Companies Cabot Micro- that “Photon Dynamics set up a Japanese in Mie Prefecture electronics subsidiary in 1991 because Japanese mak- Corporation, ers dominated LCD production at the Case study 1: BASF Japan built a plant time. We had a tie-up with IHI Corpora- —BASF and Mie Prefecture signed in Geino-cho, tion (Ishikawajima-Harima Heavy Indus- cooperation agreement. a district in Tsunehisa Katsuki, tries Co., Ltd. at the time) to sell and the city of Tsu, Operations Manager, Nihon maintain testing equipment. But when BASF, founded in 1865 and based in Ger- in 1998. The Cabot Microelectronics KK. we later switched to direct sales, we de- many, is a leading company in the chem- company, cided to set up a support center in Mie ical industry. The company’s presence in which produces polishing compounds Prefecture, close to the Kameyama Plant Japan dates back to 1949, when the pred- for semiconductors and has a 60 percent of Sharp, a major LCD maker, in order to ecessor organization to BASF Japan was share of the world market. The Tsu plant support our equipment. established. As exports its products to semiconductor “When we relocated, staff from the of 2006, the manufacturers in Asia and the Pacific re- prefecture’s Industrial Investment Promo- BASF Group in gion. The plant started with 20 employ- tion Division were very helpful in sug- Japan, with ees. Today it has grown to employ 135 gesting suitable sites, and once we had BASF Japan people, most of who are hired locally actually moved they called on us a num- Ltd. as its from around Tsu. The company also ber of times to make sure everything was core, has four opened a research center in November going well. They are really very enthusi- fully-owned 2005. astic.” The company hires people with subsidiaries The parent company initially consid- readily usable skills and English-language and three ered Taiwan and Korea, in addition to ability from throughout Japan, and “over joint ventures. three cities in Japan, as possible locations the past two or three years, Mie Prefec- In Mie Pre- for its manufacturing plant, finally decid- ture has worked really hard to find per- Hideyuki Kitabayashi, General Manager, Corporate fecture, BASF ing to build the plant in Geino-cho, Tsu sonnel suitable for us to hire.” Development, BASF Japan Japan estab- City, based on the results of a 30-item lished a pro- evaluation checklist. Operations Manager For further information, please contact duction base in Yokkaichi in 1968 and Tsunehisa Katsuki explains that Tsu was the following: later opened a technical center. In Janu- chosen “not just because Mie Prefecture Mie Prefectural Government ary 2007, BASF Japan signed a coopera- was very interested in attracting our Industrial Investment Promotion Division http://www.pref.mie.jp/kigyori/boshu/business/ tion agreement with Mie Prefecture and plant and responded swiftly, but also be- Tel: +81-59-224-2819 Yokkaichi City to support their innova- cause Tsu is a good location (close to an Fax: +81-59-224-2221 tions, particularly high technology ven- expressway and to Yokkaichi Port) and tures and small and medium-sized busi- costs (for the land, etc.) were lower com- BASF Japan Ltd. nesses. BASF had already worked with pared to the Kanto area. Another impor- http://www.japan.basf.com Tel: +81-3-3238-2500 companies in Mie prefecture, but with tant factor is that Japanese semiconduc- Fax: +81-3-3238-2514 the signing of the agreement, BASF tor makers are very good customers on a intends to increase collaboration, tie-ups global scale, and this subsidiary plays an Nihon Cabot Microelectronics KK. and joint research with local companies, important role in relaying their requests http://www.cabotcmp.com/ universities and research organizations quickly to our parent company.” Tel: +81-59-226-0120 Fax: +81-59-226-0121 that offer leading technology. “The groundwork for the agreement Case Study 3: Photon Dynamics Photon Dynamics was laid when Governor Akihiko Noro of —With the prefecture’s help, the http://www.photondynamics.com/ Mie Prefecture visited the BASF head offi- company opened a support center near Tel: +81-3-5472-6147 Fax: +81-3-5472-6193 ces in Germany in 2006. Governor Noro major users.

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