6 JAPAN SPECIAL ADVERTISING SECTION
While global M&A activity has been
slowing down, Japanese irms are
aggressively acquiring assets and
establishing subsidiaries overseas.
Japan Inc. has traditionally shied
away from international M&As. But
the dwindling domestic market and
aging population has forced them
to leave their comfort zone, leading
to a surge of M&A activity in recent
years in a bid to enhance competi-
tiveness and growth.
In December 2012, Shinzo Abe
was elected as Prime Minister and
began implementing his Abenomics
agenda that, amongst other things,
encouraged Japanese companies to
internationalize. Since then, Japanese
irms have made a record of more
than $350 billion of overseas acqui-
sitions. By value, Japan closed nearly
three times more outbound deals in
2016 – about $100bn worth – than
it did during the whole of the 1980s;
with overseas M&As accounting for
70 percent of total M&A activity. In
2017, M&As of foreign entities by
Japanese companies increased 5.7
percent to 672 deals, hitting a record
high for the fourth consecutive year.
Some Japanese companies have
been in the game longer than oth-
ers, recognizing the potential for
business growth through interna-
tional acquisitions a decade before
Abenomics was implemented.
The ALCONIX Group – a com-
pany that through its subsidiaries
and afiliates at home and abroad,
specializes in the trading and manu-
facturing of various non-ferrous
metal products, rare earths and
raw materials – adopted an interna-
tional M&A strategy back in 2001,
after it merged with Mizuho Capital
following a management buyout.
Since then, the company has ac-
quired assets in the U.S., Europe,
China and South-East Asia. Today
about 60 percent of ALCONIX’s
200-billion-yen annual turnover
comes from foreign trade, and that
igure is expected to increase in the
future.
“Having a core business back-
ground in trading, we started by ac-
quiring trading companies and ex-
panded the trading business. Then
in around 2009, we started acquir-
ing manufacturing companies with
a special focus for the ones that
produced parts and components
from non-ferrous metals,” says Ei-
itsu Masaki, President and CEO of
ALCONIX Corp.
“In a matter of years, ALCONIX
has grown into one of the industry’s
major corporate groups. We believe
that this growth comes from our
successes in: one, conducting strate-gic M&A; two, engaging in aggres-
sive business investments; and three,
fostering and keeping employees
with highly specialized expertise.”
The move into acquiring manu-
facturing companies has really paid
off for the company. In its forecast
for FY2017 (the inancial year ending
on March 31, 2018), sales of manu-
facturing companies will represent a
mere 15 percent of the total gross
sales. However, the ordinary proit
from its manufacturing arm will ac-
count for 64 percent of total proit,
according to Mr. Masaki.
“This mirrors the success of pur-
chasing manufacturing companies.
Despite the fact that the trading
component represents the majority
of our business, proits come essen-
tially from manufacturing,” he adds.
Due to its proximity and high
potential market growth, South-
East Asia has been a natural target
for Japan Inc. ALCONIX’s strategy
in the region has focused on buy-
ing manufacturing companies and
establishing factories, bringing the
qualities of Japanese Monozukuri
to its South East Asian neighbors.
“In South-East Asia, we under-
stand that commodities trading is
not a sustainable business practice.
We therefore started working closer
with local communities – investingin local manufacturing companies
and collecting the proits from the
products we forward them repre-
sents great business potential,” ex-
plains Mr. Masaki.
“The model we are implement-
ing in South-East Asian countries
aims at lessening the importance
of Japanese production by promot-
ing local domestic trade to increase
regional independence. From an
investor’s perspective, South-East
Asia is a reliable region for invest-
ments. At ALCONIX, our objective
is to spread the quality of our mo-
nozukuri to the region by educating
the local labor force.”MONOZUKURI & ACQUISITIONS:
THE RISE OF JAPANESE M&As
Faced with a shrinking domestic market, Japan’s international M&A activity has
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Q“In a matter of years,
ALCONIX has grown into
one of the industry’s major
corporate groups. We believe
that this growth comes from
our successes in: one,
conducting strategic M&A;
two, engaging in aggressive
business investments; and
three, fostering and keeping
employees with highly
specialized expertise”Eiitsu Masaki, President and
CEO, ALCONIX Corp.