The Alabama-based but German-owned steel plant ThyssenKrupp Steel USA will be sold to two competing buyers for $1.55 billion.
The sale was finalized after an extended period of competition for the purchase between ArceloMittal, headquartered in Luxembourg; and Japan’s Nippon Steel & Sumitomo Metal Corp. In the end ThyssenKrupp Steel, the German owner of the plant, agreed to sell to both companies.
The sale is expected to benefit Nippon and ArceloMittal by expanding their energy and car manufacturing businesses.
ThyssenKrupp decided to on-load their US steel plant when the price of steel fell, leading to financial loss for the company as well as large write-downs for the lowered value of the plant.
The Japanese and other Asian markets reacted positively to better than expected employment data coming from the US last month. Tokyo’s Nikkei 225, the largest market in the region, expanded by 3.8 percent to reach 13,363.18. Also influencing the Asian markets were promises from the Japanese prime minister that he was introducing tax reductions.
The price of a barrel of oil was sustained above $96 as investors’ fears that the US Federal Reserve would end its economic stimulus program were reduced.
The US Labor Department announced that the United States, which is still the world’s largest economy, added 175,000 jobs to its economy in May, about 10,000 more than had been predicted.
“The relief from U.S. jobs was palpable,” said Mizuho Corporate Bank in a report. It said gains were “gentle enough to avert concerns” that the Fed might be tempted to halt its “quantitative easing.”
According to Sony Corp’s China head Nobuki Kurita, the giant consumer electronic company’s business in China is “more or less” back to normal levels after recent protests in China against Japan’s actions related to a group of disputed islands.
Last September saw a significant decrease in sales of Sony products in China as calls for a boycott of Sony reverberated in response to the nationalization of two islands in a group of islands under dispute in the East China Sea. In China these islands are called Diaoyu, and in Japan they are referred to as the Senkaku Islands. Japan nationalized these islands after they were purchased from private owners.
Because of the dispute relations between China and Japan were highly strained, adversely affecting sales of Japanese products in China. Kurita however believes that Japanese business in China should completely recover, showing a strong surge in the coming three years.
“My general impression is business conditions have more or less returned to the pre-crisis environment,” he told a media briefing at a Sony store in eastern Beijing.
Since Japan’s disaster a few months ago, while the main aim is for the country to recover as painlessly as possible, on the sidelines it seems there has been a lot of rethinking taking place vis-à-vis marketing directions. It seems like – perhaps in the aftermath and because of the tsunami – people’s perceptions (and thus desires) are changing and so marketing techniques need to adapt to this. In a study entitled ‘Fukkatsu: Japan Rebuilds,’ by the end of last month, 77 percent of Japanese claimed they were “actively seeking out brands they believe are helping recovery of the country and personal stability.” In addition, the study showed how the Japanese are becoming more eco-conscious following the disaster with 75 percent using less electricity; 72 percent making greater attempts at water conservation and 68 percent in general seeking out “greener alternatives to everyday consumption.”
Bigger Japanese Picture
There is generally more contemplation going on it seems. Individuals and the private sector are taking more responsibility for the country’s recovery, as opposed to just relying on a “government that is increasingly seen as not showing leadership.” 93 percent of respondents said that they “just want a more stable life” so it seems that is the motivating factor. There are more bikers now as people become concerned about shortages in gas and price escalations with potential power shortages.
Better Booming Business
On the other hand there has been some good news for businesses following the disaster. Since the Japanese are a big nation of train commuters, businesses are now honing in on this and using the platform for a way to go shopping. Until recently, there were just some eateries around, but it now appears that “post-earthquake, we have seen that all shopping trips are shorter and more directed, and these ‘railway malls’ make that so much easier.”
Brick and Virtual Shopping
This has led to increase in brick and virtual shopping as a way of comparing prices due also to the increased use of mobile phones as shopping aids. The Japanese are also engaging now more in “embarrassment shopping” which is when you check out products to determine their social acceptability levels through mobile services and then decide whether or not to purchase them in the “brick.” Since early March, Japan has seen an increase of around 20 percent of online shopping.
Direct Consumer Involvement
It also seems from the article that in general the Japanese average man on the street wants to be more involved with 60 percent of respondents claiming they want “to be part of a shared process n product and service development.” They are also more aware of “corporate statements and are digging deeper into what goods and services offer.”
The question on everyone’s lips of course is, how is Japan faring, post trauma? What does its road to recovery look like? According to Tourism Australia, pretty good. It looks like the company is going to begin marketing in the country next month again since “officials claimed they were confident of a swift recovery.” Marketing in Japan was put on hold last month by Tourism Australia but that things will be speeding up, pretty much because the company’s MD Andrew McEvoy sees how it is “in the Japanese DNA to travel,” so they won’t be sitting still all that much longer.
Japan isn’t set to sit in the sidelines forever. Indeed it is thought that the country is going to recover fast and “get strong again,” leading to increased growth. There doesn’t seem to be the need to be placing any ads but there are already notable signs that people want to start traveling again.
This is especially timely since next week it is Golden Week, traditionally a very major travel season for the Japanese. As well, schoolteachers were looking at Australian tour opportunities via Tourism Australia. Clearly the Japanese are not living in the past; in fact they are heading out to the future with enthusiasm.
As well, news today in Japanese industry is that as the country recovers, demand will increase in Japan for beef, copper and iron ore. According to Melbourne’s National Australia Bank Ltd’s commodities economist Ben Westmore, building up the country again could “drive demand for steelmaking materials and metals used in construction.” Given that the local protein supply was damaged, this will probably result in an increased need for imported dairy products and beef as well.
Further, there will probably be the need for more food imports due to the possibility of radiation leaks from the nuclear plant in Japan. So it looks like in general there will be more business inside of Japan and more travel outside during the coming months as the country goes from strength to strength following its recent travesty.