Terrie's Take – Number 239

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”What’s New”

Well it looks like the potential energy crisis for Tokyois all but over, despite some reports to the contrary. TEPCO announced that they have permission from the Niigata Prefectural Government to restart Reactor number four at the Kariwa plant. So they have just enough capacity now to handle historical peak power requirements during August. The Kariwa reactor was one of 17 shut down in January after cracks were found in its recirculation pipes.


We think that this year’s energy crisis was a political play. Of course, cracks in reactors are not a good thing, but the repairs always were only going to take a few months at most — and yet there was lots of publicity about blackouts and other problems happening this summer. It appears that what has been keeping the reactors off line has been simply been central government pressure on TEPCO, using the threat of public suffering (the heat of mid-summer) to get them back in line. Why the government felt the need to exert such pressure on TEPCO, rather than just warn them privately we don’t know — perhaps TEPCO is just getting too big…?

We enjoy following the foreign buy-out funds in Japan, because their investments mean change. This week the Carlyle Group announced that it was making a takeover bid for Kito Corporation, a Japanese factory crane manufacturer. The takeover bid will occur through public buying of shares between now and August 27th. Apparently Carlyle plans to take the company private, recapitalize it, and develop its export business. We find it interesting how Carlyle, Ripplewood, and a number of other funds feel that their best bet in making money in Japan is in very gritty industries. Factory cranes, car parts, logistics, electronics assembly are all targets of the funds.

The big question is how is it that foreign funds can teach the Japanese how to become profitable in such basic “Japanese” industries? The answer is of course, a combination of fiscal discipline, drastically reduced head count, investment in more automation, and developing the export markets. All of these “soft skills” were elements put to work when Ripplewood bought Nippon Columbia’s Denon audio electronics operation — and now the brand is profitable (we believe) again.

Lastly, just a reminder from the BiOS folks (an affiliate company), that there was another mid-size earthquake last week. They point out that if you’re not backing up your corporate data off-site, you’re probably taking unnecessary risks. Steve Paulachak is the man with the answers, at mailto:steve.paulachak@biosjp.com

”’Sent out every Monday, Terrie’s Take offers an insider’s comments on Japan’s high-tech business world, with a focus on strategies and financing. Writer Terrie Lloyd is publisher of J@pan Inc and president of LINC Media, a Tokyo-based digital incubator (offspring include Layer 8 Technologies, BiOS, J-Door, and DaiJob.com). Whereas J@pan Inc is an independent editorial product, this newsletter allows Lloyd to have his say and wheel and deal to his audience, which he’s built up over the past two years. To see the newsletter, log on to”’ https://www.terrie.com/