The Journal The Authority on Global Business in Japan

China’s Belt and Road Initiative is a very ambitious plan, and the reach of the infrastructure and invest­ment projects it entails is truly sweeping. Through the initiative, Beijing is making its influence felt around the world, positioning itself for a greater global leader­ship role in this century and beyond. Central and Eastern Europe (CEE) is one of the areas where this is playing out, and China has funneled about $9.4 billion in deals to 16 countries in CEE.

CENTRAL IMPORTANCE
However, China is not the only wealthy nation wielding influence in the CEE. Through the Japan–EU Economic Partnership Agreement (EPA), which went into effect in February, trade barriers between the European Union (EU) and Japan have been removed, making it even easier for goods and services to flow among the nations involved. Japanese companies are also investing significant amounts of capital in the region. Japan’s close ties with the United States also mean that the two countries can cooperate on CEE efforts.

Whether a company is planning to open a new European office, enter new markets, or make an acquisition, the CEE is an appealing option for a few reasons:

  • Proximity to wealthy EU nations
  • A skilled, educated workforce
  • Comparatively lower costs of doing business

The top three foreign investors in the CEE are the United States, being the largest; Germany, and Japan.

Some 1,000 Japanese companies have recognized these oppor­­tu­nities in the CEE, and they employ more than 50,000 employees in the region. The most popular location for invest­ment is Poland, followed by Hungary, the Czech Republic, and Romania. Japanese companies in the region are most prominently active in manufacturing, automotive, and auto­motive supplier networks, which are responsible for providing the various components—such as axles, batteries, or electronics systems—that go into automobiles. They are also involved in business process outsourcing (BPO), shared service centers (SSC), and business services. US companies are involved in the same sectors as their Japanese counterparts but have a stronger focus in BPO and SSC.

LAUCH DAY
The inaugural Japan–CEE Investment Summit & Awards were held on April 25 at the Palace Hotel Tokyo in Marunouchi to recognize Japan’s business efforts in the region. The event was organized by Thom Barnhardt, founder of CEE Business Media. An American, Barnhardt has been organizing events based around investment in Central Europe for the past several years. One of them is the USA–Europe Business Services Summit & Awards, which is now in its third year and focuses only on the SSC and BPO sectors. US companies account for 51 percent of the total employment in the CEE within these sectors.

The daytime summit was attended by Japanese executives in charge of invest­ment in the CEE, executives from CEE businesses, and ambassadors from CEE nations. The summit included briefings on politics and economics within the region, discussions of opportu­nities that have been presented through the Japan–EU EPA, case studies about acquisi­tions of CEE-based firms by Japanese investors, talks on economic incentives in CEE countries and new regula­tions, as well as analyses of opportunities in areas such as IT, gaming, and software development.

ACCOLADES
The event shifted into a more celebratory tone during the evening, starting off with a networking reception. Euro Asia Trading supplied wines from Romania for this portion of the evening.

Yasuhide Nakayama, the former state minister of foreign affairs and member of the House of Representatives, delivered a short speech during the reception. He exhorted Japanese investors to extend their investments to the CEE region. Taking Croatia as an example, he highlighted the reason that many investors are drawn to the CEE: technological innovation. He also celebrated the venerable relationship between Japan and the region: “We are very geopolitically far away, but we have a long history [together] and we are proud of that history.”

Following Nakayama’s remarks and a toast, guests moved to the ballroom for a dinner that was served alongside more Romanian wines and sparkling sake from Hakkaisan. The awards ceremony, which was emceed by Barnhardt and Mina Takahashi of GR Japan, got underway during the dinner.

Forty-nine Japanese companies, which collectively accounted for more than $15 billion in direct foreign investment, were shortlisted for awards in nine categories. A 19-member panel of VIPs chose the winners of the 24 awards on the evening.

Following the presentation of the awards, attendees continued to enjoy their beverages and good conversation. Barnhardt said he couldn’t have been happier about the turnout and the support for both portions of the event. “We were very pleased with year one! More than 120 top executives attended, which was a bit more than we expected. We were particularly honored to have the support of [the Japan External Trade Organization], and commercial counselors from across the CEE. We were also glad to see the enthusiasm from Japanese investors already present in the CEE. They deserve these awards for their substantial investments in the region!”

As Barnhardt told The ACCJ Journal, the event highlighted important links among the United States, Japan, and the CEE: “Many of the top US companies that have invested in Japan have also invested heavily in the CEE. Our investment awards also include trade flows between Japan and the CEE, so I think many US investors in Japan might also see more opportunities to expand in the region. In addition, the CEE region has top tech talent, and this event can help introduce digital companies in the CEE that can add substantial value to Japanese companies.


Top CEE Investors in Japan
Comarch SA
ESET, spol. s r.o.
RTB House

Top Automotive Investors in the CEE
Magyar Suzuki Corporation
Toyota Motor Manufacturing Poland Sp. z o.o.
Top Automotive Supplier Investors
Mabuchi Motor Co. Ltd.
NSG (Pilkington Automotive Poland Sp. z o.o.)
Sohbi Craft Poland

Top Financial Services Investors
Mizuho Bank, Ltd.
ORIX Corporation

Top Manufacturing Investors
Bridgestone Sp. z o.o.
Nidec Corporation
TDK Electronics Hungary Ltd. (EPCOS)

Top Business Services Investors
FUJIFILM Europe Business Service Sp. z o.o.
Fujitsu Global Delivery Center Poland
Takeda SCE Sp. z o.o.

Top M&A Deals in the CEE
Asahi buys five Eastern European beer brands for €7.3 billion
Daikin completes AHT acquisition
Kansai Paint acquisition of Helios Coatings Group (Slovenia)

Top Infrastructure Investors
ITOCHU Corporation (Serbia)
Marubeni Corporation

Top CSR Initiatives in the CEE
Bridgestone Sp. z o.o.
Fujitsu Technology Solutions Sp. z o.o.
Sumi Agro Poland Sp. z o.o. (Bees Protection)

Alec Jordan is a staff writer at Custom Media for The ACCJ Journal.
US companies account for 51 percent of the total employment in the CEE within [the SSC and BPO] sectors.