Finnish Chamber of Commerce in Japan

FCCJ Luncheon Meeting 25 October 2007

Guest Speaker: Mr. Haruyuki Niimi, Chairman of Showa Shell Sekiyu K.K.

Theme: How foreign-affiliated companies should act in the Japanese market"

RECAP

Haruyuki Niimi started his presentation by giving a background to Shell's business globally, and in Japan. The mother company, Royal Dutch Shell Plc., was formed in 1907 through a merger between Royal Dutch Petroleum Shell Transport and Trading (UK) and is now headquartered in The Hague, Netherlands. Globally it is an impressive company, e.g. every four seconds a plane is filled up with Shell Aviation fuel and Shell is refueling 200 cars every second!

In Japan, Shell started its business as a 100% foreign affiliated by selling wax candles in 1900. Gradually it moved to petroleum products. In 1985 Showa Shell Sekiyu was incorporated by amalgamation of Show Oil and Shell Sekiyu. Today the Shell Group holds 35% of the company while Saudi Aramco has 15% of the company's equity. The rest is held by investors. It has 830 dealers and more than 4,500 retail outlets and is number three in Japan. Showa Shell Sekiyu is also investing actively in alternative energy and recently started a solar panel factory in Miyazaki which exports main part of its products to Germany. It is also involved in second stage bio energy projects.

The need to diversify comes clearly from the fact that although Japan is still the third biggest oil market (after the USA and China), the consumption has started to decrease from this year.

Even though many claim that all markets are different, Mr. Niimi's opinion is that Japan is the most localized market in the world, and for a company to succeed here, you need to put Japan's uniqueness to business use. The culture in Japan attach greatest importance to continuity and sustainability, whereas in the US culture is based on discontinuous history. Consumers in Japan care about quality of goods and services while in the US they care about universality. Employees in Japan make themselves responsible, but in the US managers have responsibility.

Showa Shell's mottos are "Small company mindset" (bureaucracy is an obstacle). "Focus on Japanese customers and business partners", "Achieve aspirational goals with flexibility without sanctuary" and "People are the single most important deliverable for success".

IMAGES FROM THE MEETING

FCCJ Board of Trustees member Erik Ullner opens the meeting.	The guest speaker starts his presentation.
The meeting, held at Hotel Okura, was attended by 26 members and guests.	Mr. Niimi shows the strenghts of Shell.


Seppo Rantanen makes a question about solar panels.	Kimio Hashida, Takashi Toyokawa, Quentin O'Mahony, Jorma Laine and Tuomo Kuppo listens to the response with serious faces.
Anu Saarela of the Embassy of Finland makes a question about visions for 2050....	...and Mr Niimi gives a good response.
Erik Ullner hands over a small present to the guest speaker.	At the end of the meeting, Petteri Niska of Finpro explained about HOSPEX 2007 ,International Healthcare Exhibition will be held in Tokyo Bigsight on Nov. 14-16.