The Japan External Trade Organization (JETRO) established an office in Budapest in 1991. And, according to the General Director of the office, Ms. Akiko Okumura, they have been receiving requests for investment consultation from Japanese companies non-stop ever since.
“JETRO's strengths lie not only in its networks overseas, but also in every prefecture in Japan. Japan has many industrial clusters in local cities other than large cities such as Tokyo and Osaka. We support investment consultations received from local SMEs in cooperation with domestic offices,” the General Director tells Diplomacy&Trade. JETRO's role is not limited to supporting company establishment. Even after a company enters the market, JETRO’s assistance includes searching for new business partners and suppliers as well as providing information on labor, tax and legal affairs. In addition to providing these types of information, annual surveys are conducted on investment-related costs such as labor costs, utility costs, rent, issues faced by Japanese companies and prospects for future operating profits. The results are disclosed on the organization’s website. This information is used not only by companies considering investment but also by Japanese firms that have already entered the market, she says. “The companies that invest in Hungary first consider where to set up their bases in Europe, and make their decision based on comparisons within Central and Eastern Europe. JETRO Budapest's role is to inform Japanese companies that Central and Eastern Europe has achieved high economic growth in recent years, and to explain the appeal of Hungary, based on objective data,” the General Director points out.
Japanese food exports
She points out that in Hungary, some distributors experience increasing demand for Japanese food items, as well as for Japanese spirits. “Therefore, we continuously try to contribute to fulfilling both this demand and those of Japanese farmers, manufacturers intending to export, by providing business matching opportunities either in Japan or in Hungary.” As an example of what sort of information is solicited from the office, she mentions the Japanese shoyu maker company Horaiya that started to export their products for the first time through JETRO’s Hungarian buyers invitation program and their new partner, a Hungarian premium food distributor and retail company could extend its Japanese quality food items selection, with e.g. miso, amazake (fermented rice drink), shoyu. After the first shipment, Horaiya suffered serious damages in a typhoon last October. Since the continuation of exports was a major motivation for them, they worked very hard to restart their factory, and the second export shipment was successfully realized. “I am very happy to hear that the inquiries from Hungarian buyer became a major motivation for Japanese company’s business continuity,” she adds.
Business in and from Japan
Another of JETRO's jobs is to assist with the establishment of business bases for companies entering Japan for the first time. Through the ‘Invest Japan’ program, JETRO offers foreign investors abundant information on all aspects of doing business in Japan by providing expert consultation and offering free temporary office space in major business areas across Japan. JETRO Budapest has actively supported Hungarian IT and biotech companies to do business in Japan in the framework of this program. “JETRO Budapest has been engaged in organizing business missions to Tokyo since 2017. Last year, there were four Hungarian companies participating in the Digital Innovation CEE Entrepreneurs Delegation to Japan. Since JETRO Budapest started to promote the ‘Invest Japan’ program in Hungary, two Hungarian companies have established their offices in Tokyo. JETRO Budapest screens potential companies by attending seminars to introduce its services to potential clients in Hungary,” the General Director highlights. JETRO also recommends using exhibitions as an effective way to find new business partners. It sometimes sets up a Japanese booth to help Japanese small and medium-sized companies or invites overseas buyers to Japanese exhibitions. JETRO offers various business opportunities to Hungarian suppliers in the automotive industry in Hungary. The next event it holds is the 13th parts procurement business meeting (reverse trade fair) on February 26. Japanese companies will exhibit not only from Hungary, but also from elsewhere in Europe. At this business meeting, Japanese firms looking for suppliers of parts and materials will exhibit the materials, parts and services they wish to procure. “It is an event where Japanese companies have the chance to negotiate with Hungarian firms that offer goods and services required by Japanese companies. Hungarian companies already have a network with German automakers, and the event is attractive to Japanese companies seeking business opportunities in the European market,” she explains.
Not just in Budapest
The General Director highlights that “most of the Japanese manufacturers in Hungary operate their factories in the countryside, and we keep close contact with them, so, from time to time, we visit the countryside. Apart from these visits, we also try to maintain good relationships with the local governments and local trade or investment public agencies in county seats. Japanese companies are mainly concentrated in the central and northwestern parts of the country. We want to learn about the local conditions and the investment environment in other parts of the country, as well, so that we can offer these places as potential locations for the Japanese companies planning to establish their manufacturing site in Hungary. These regions can be especially attractive now that companies have to deal with the problem of labor shortage, especially in the manufacturing sector. Another type of activity that takes JETRO to the countryside is seminars organized for local companies with the support of our partners, like the National Association of Entrepreneurs (VOSZ), for example. “In these seminars, we introduce the activities of JETRO, explain about our Invest Japan program, the Hungarian-Japanese economic relationships and about the trends and activities of the Japanese companies operating in Hungary. We have held such seminars in Zalakaros and Hódmezővásárhely”, she adds.
The next generation
On a personal note, Akiko Okumura says that since she arrived Hungary, she has been surprised to see that there are so many young people who are interested in Japan and the Japanese language. “In addition to students who have studied the language at school, there are young people who have gained a high level of language proficiency by themselves, by using various contents on the Internet. For many of them, their interest in Japan comes from games and the hand-drawn and computer animation ’anime’. The Millennials and Gen Z, who have common experiences and tools, such as IT, games, and animation, will be the center of future business and I look forward to deepening the connection between the two countries in various fields.”