Investment Environment for the Greater Nagoya. May, 2012

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1 Investment Environment for the Greater Nagoya May, 202

2 Geographical Position The Greater Nagoya: Located in the central of Japan Population: million (20) GDP: US$ 49.0 billion (2008) Tokyo Source: Ministry of Internal Affairs and Communications Osaka Greater Nagoya Approx. 00 km in radius centered at Nagoya

3 Economic Scale Ranked at 20 th position in the world in terms of GDP USA () China (2) Japan (3) Unit: US billion dollars 4,658 5,878 5,459 Germany (4) France (5) 2,583 3,36 Indonesia (8) 707 Switzerland (9) 524 Greater Nagoya (20) 49 Poland (2) 469 Belgium (22) 466 Source: World Economic Outlook Database, April 20 2

Comparison of Economic Scale for 3 Major City Zones The Greater Nagoya

0% of share in Japan in terms of economic scale It is the center of

Population Gross Regional Product Value of Shipment of Manufactured

4 Comparison of Economic Scale for 3 Major City Zones The Greater Nagoya occupies approx. 0% of share in Japan in terms of economic scale It is the center of manufacturing; value of shipment of manufactured products occupies approx. 20% Population Gross Regional Product Value of Shipment of Manufactured Products, etc. Source: Tokai Keizai no Point (Point of Economy in Tokai Region) (Comparison of 3 Major Economic Zones) 3

5 Industrial Structure Value of shipment of manufactured products occupies 20% of share in Japan (2009) Among them, transportation equipment machinery surpasses 40% of share (2009) Share in Japan Classification by industry in Chubu (%) (%) Source: Ministry of Economy, Trade and Industry Note: These share is Chubu area s share (Aichi, Gifu, Mie,Toyama and Ishikawa prefectures, including Greater Nagoya area) 4

Manufacturing Region The Greater Nagoya has a number of products that occupies a considerable market share Share in Japan (200) Aircraft / Aircraft Parts Kawasaki Heavy

Internal Combustion Engine Electrical Components DENSO CORPORATION Automotives Toyota Motor Corporation Honda Motor Co.

6 Manufacturing Region The Greater Nagoya has a number of products that occupies a considerable market share Share in Japan (200) Aircraft / Aircraft Parts Kawasaki Heavy Industries, Ltd. Fuji Heavy Industries Ltd. Mitsubishi Heavy Industries, Ltd. Internal Combustion Engine Electrical Components DENSO CORPORATION Automotives Toyota Motor Corporation Honda Motor Co., Ltd Mitsubishi Motors Corporation Catalyst carriers / ceramic filters IBIDEN CO.,LTD. NGK INSULATORS, LTD. Automotive Parts AISIN AW CO.,LTD. DENSO CORPORATION Metal Machine Tools OKUMA Yamazaki Mazak Corporation MORI SEIKI CO., LTD. Source: GNI promotion office, Chubu Bureau, Ministry of Economy, Trade, and Industry 5

7 Major Companies and Products Mitsubishi Regional Jet (MRJ) From Mitsubishi Heavy Industries, Ltd Official Website 6

Concentration of Companies in the Greater Nagoya The Greater Nagoya has a concentration of many world-famous leading edge enterprises including automobile, aerospace, manufacturing tool and

8 Concentration of Companies in the Greater Nagoya The Greater Nagoya has a concentration of many world-famous leading edge enterprises including automobile, aerospace, manufacturing tool and semiconductor manufacturers Many overseas enterprises locate their office here Kawasaki Heavy Industries, Ltd. SANKO Co., Ltd IBIDEN CO., LTD. GIFU AUTO BODY Co., Ltd. Pacific Industrial Co., Ltd. NTN Corporation BASF Japan Ltd. Sumitomo Wiring Systems, Ltd. TOSHIBA CORPORATION Evonik Monosilane Japan Co., Ltd. Mitsubishi Chemical Corporation SHARP CORPORATION Yamazaki Mazak Corporation Mitsubishi Heavy Industries, Ltd. Japanese enterprises Overseas enterprises Bodycote Japan K.K. Okumura Corporation Daido Steel Co., Ltd. NGK SPARK PLUG CO., LTD. NGK INSULATORS, LTD. BROTHER INDUSTRIES, LTD. TOYOTA MOTOR CORPORATION Magna International Japan Inc. DENSO CORPORATION MORI SEIKI CO., LTD. AISIN SEIKI CO., LTD. Honda Motor Co., Ltd. IKEA Distribution Services K.K Bosch Corporation BorgWamer Morse TEC Japan K.K. INAX Corporation TOYOTA BOSHOKU CORPORATION Makita Corporation Nihon Cabot Microelectronics KK Pfizer Japan Inc. Toyota Industries Corporation VOLKSWAGEN Group Japan K.K. 7

R&D Facilities in the Greater Nagoya The Greater Nagoya is the center of universities, public research institutions and private training centers that

extruder Heat & Cool Controller Steam temperature Controller Infrared Radiation (IR) Heater Air Vacuum device Water & Oil temperature Controller Nagoya

LFT-D Direct Long-Fiber Thermoplastic (Outlet of Materials) National Composite Center (expected to open in April 203) Knowledge Hub (Central Japan

It will have a synchrotron light facility and advanced computational analysis systems Japan Fine Ceramics Center (Nanostructures Research Laboratory,

9 R&D Facilities in the Greater Nagoya The Greater Nagoya is the center of universities, public research institutions and private training centers that studies state-of-the-art technologies in various industrial fields which Japan is reading the world The image of Press molding machine and Biaxial extruder Heat & Cool Controller Steam temperature Controller Infrared Radiation (IR) Heater Air Vacuum device Water & Oil temperature Controller Nagoya University Four Nobel Prize Winners Materials Research Laboratory for Green Vehicle (Since April 20) Injector for Resin Transfer Molding (RTM) Boiler LFT-D Direct Long-Fiber Thermoplastic (Outlet of Materials) National Composite Center (expected to open in April 203) Knowledge Hub (Central Japan Synchrotron Radiation Facility will open in FY202.) The wisdom center will open as a technological center for next generation manufacturing. It will have a synchrotron light facility and advanced computational analysis systems Japan Fine Ceramics Center (Nanostructures Research Laboratory, Since April 2007) JFCC established Nanostructures Research Laboratory that is one of the world s top level center for microstructural analysis and computational material design. 8

R&D Facilities Example I Materials Research Laboratory for Green Vehicle Nagoya University has established Materials Research Laboratory for Green Vehicle as an international facility for research &

10 R&D Facilities Example I Materials Research Laboratory for Green Vehicle Nagoya University has established Materials Research Laboratory for Green Vehicle as an international facility for research & development on the automobile of the future in April 20. We refer to the automobile of the future as a Green Vehicle, incorporating the technologies of Energy Creation, Energy Conservation, Resource Recycling, and Safety Technology that lead the move to a more human and environmentally-friendly lowcarbon society. This research & development work aims at Green Innovation for automobile materials and technologies to lead the world. Aichi, Gifu and Mie Prefectures and Nagoya City Wisdom Center Alternative rare earth Alternative rare metal Leading Company with Global Competitiveness Companies in Chubu Region related to Automobiles and Mobile Industry Cluster catalyst Nagoya University Locally Settled Global Industry- Academia Collaboration R&D Site Nanometrology Energy saving materials AIST Chubu Center Bio fuel Renewable energy Local administrations Ultralight parts Universities and Public R&D Institutions Fuel cells Fuel materials Materials Research Laboratory for Green Vehicle Motor Power device Growth strategy integrating efforts of local economies Future urban planning Secondary battery Recycling of energy Recycling technology Concentration of broad wisdom existing in Tokai Region Inter-academia and global collaborations via concentration and adjustment of broad wisdom existing in Tokai Region Leading SMEs Leading Edge Companies Capable of Causing an Industrial Structural Reform 9

National Composite Center R&D Facilities Example II Chubu Region is a home of manufacturers.

It maintains a network with other composite R&D centers throughout Japan.

government. NCC makes it possible to make a mockup and to evaluate a life-size large-scale member forming that was conventionally done in overseas only (Germany and France, etc.).

It is expected that NCC contributes to Japan s standardization strategy for composite material evaluation technology.

11 National Composite Center R&D Facilities Example II Chubu Region is a home of manufacturers. NCC is the center for R&D, experimental studies and evaluation for composite material structural technology, first of its kind in Japan. It maintains a network with other composite R&D centers throughout Japan. R&D of large member forming technologies and evaluation and standardization of lightening, fire and flame resistance tests are taken place at NCC with the cooperation of industries, academia and government. NCC makes it possible to make a mockup and to evaluate a life-size large-scale member forming that was conventionally done in overseas only (Germany and France, etc.). In addition, it also studies lightning, fire and flame resistance tests as a package, which cannot be seen at any corner of the world. It is expected that NCC contributes to Japan s standardization strategy for composite material evaluation technology. Project owner: Nagoya University Location: Higashiyama Campus of Nagoya University Operation to start in: April 203 Project scale: Approx. 2 bn. (Up to two-thirds of the funds will be provided by METI.) Participants (incl. supporting entities) [Private Sector] Material, aerospace, automobile and equipment-related manufacturers, support organizations (JADC, C-ASTEC and RIMCOF Dept. of Sokeizai Center) and other relevant SMEs [Academia] Nagoya University, The University of Tokyo, Nagoya Institute of Technology, Gifu University, Kanazawa Institute of Technology and Daido University, etc. [Government] JAXA, AIST, Knowledge Hub, TIC Gifu and IRII, etc. Examples of Machines to be Setup (Twin-Screw Extruder) (Large-sized pressing and forming machine) (Seismic Qualification Testing Machine) (Fire and Flame Resistance Testing Machine) 0

12 Trend of Direct Internal Investment Direct internal investment to Japan tends to be decreasing with its peak in 2007 Compared to the peak year, investment from North America and Europe, once occupied the largest share, shows a decrease Shift of Direct Internal Investment to Japan (Total) (Unit: billion yen) Local Breakdown of Direct Internal Investment to Japan (Unit: billion yen) Asia North America Latin America Oceania Europe Middle East Asia Africa * Figure with a minus sign ( - ) represents outflow of capital (or a decrease in direct investment to Japan). Source: Balance of Payment Statistics by Ministry of Finance, Japan

13 Economic Outline of the Greater Nagoya Production showed a sharp decrease with its peak at the Fourth Quarter of The situation was reversed gradually thereafter, but it was nose-dived again due to the Great East Japan Earthquake occurred in the Second Quarter of 20. The Greater Nagoya showed a sharp decrease in production, but its recovery was also rapid Tokai (Greater Nagoya area) Kanto (Tokyo area) Kinki (Osaka area) I I P ( I n d u s t r i a l P r o d u c t i o n ) Source: Chubu Bureau, Ministry of Economy, Trade, and Industry 2005 average = 00 Seasonal Adjustment Index ⅠⅡⅢⅣⅠⅡⅢⅣⅠⅡⅢⅣⅠⅡⅢⅣⅠⅡⅢⅣⅠⅡⅢⅣⅠⅡⅢⅣⅠⅡⅢⅣⅠⅡⅢⅣⅠⅡⅢⅣ Source: Industrial Production Index of Chubu Region by Chubu Bureau of Economy, Trade and Industry, Industrial Production Index of Kanto Region by Kanto Bureau of Economy, Trade and Industry and Industrial Production Index of Kinki Region by Kansai Bureau of Economy, Trade and Industry Note: Data for 20 may be subject to a change due to correction of annual data. Tokai Region consists of 3 prefectures including Gifu, Aichi and Mie, Kanto Region, 0 prefectures of Ibaragi, Gunma, Saitama, Chiba, Tokyo, Kanagawa, Niigata, Yamanashi, Nagano and Shizuoka and Kinki Region, 7 prefectures of Fukui, Shiga, Kyoto, Osaka, Hyogo, Nara and Wakayama. 2

Transition of Factory Locations Number in Chubu Region Outline of the Number of Factory Locations in 20 (number of locations) As of 20, Chubu Region had 34 factories, which was up by 22.

The increase was the first in four years Though the number of new factory locations established in the region shows a decrease, its ratio against Japan as a whole is increasing (Cases)

14 Transition of Factory Locations Number in Chubu Region Outline of the Number of Factory Locations in 20 (number of locations) As of 20, Chubu Region had 34 factories, which was up by 22.9% over the previous year i.e. 09 factories. The increase was the first in four years Though the number of new factory locations established in the region shows a decrease, its ratio against Japan as a whole is increasing (Cases) Figure Transition of Factory Locations Number in Chubu Region Jan.- Jun. Jul. Dec. Nationwide ratio * Chubu Region refers to five prefectures of Aichi, Gifu, Mie, Toyama and Ishikawa. Source: Survey on the Trend of Number of New Factories locations Established in 20 (issued by Chubu Bureau of Economy, Trade and Industry in March 20) 3

15 Advantages of the Greater Nagoya I Inexpensive Land Price and Rent Though as one of the three major urban zones in Japan (Tokyo Metropolis, Kinki and Nagoya Zones), Aichi Area (Nagoya Zone) is a favorable place for starting a business, with its low average land price in its commercial areas and low office rent. Comparison Data [Average Land Prices of Commercial Areas] (Yen/ m 2 ) Tokyo,440,800 Aichi 256,400 Osaka 443,600 [Source] Survey on Land Prices in Prefectures in Japan for 200 (MLIT) 東京都 Tokyo 愛知県 Aichi 大阪府 Osaka,440, , , ,000,000,000,500,000 2,000,000 [Average Office Rent] (Yen/ tsubo : approx. 3.3m 2 ) 23 Wards of Tokyo 2,40 Nagoya City 9,330 Osaka City 8, Wards of Tokyo 東京 23 区 Nagoya 名古屋市 City 9,330 2,40 * These data are as of June 20 [Source] OFFICE MARKET REPORT(CB RICHARD ELLIS) Osaka 大阪市 City 8, ,000 4,000 6,000 8,000 0,000 2,000 4,000 4

Central Japan International Airport (Centrair) Shiga Pref. Yamanashi Pref. Saitama Pref. Aichi Pref. Kanagawa Pref.

16 Advantages of the Greater Nagoya II Superb Infrastructure The Shin Tomei Expressway Ishikawa Pref. Toyama Pref. Nigata Pref. The Chuo Shinkansen Fukui Pref. Earthquake Resistant Quay Gifu Pref. Nagano Pref. Gunma Pref. Central Japan International Airport (Centrair) Shiga Pref. Yamanashi Pref. Saitama Pref. Aichi Pref. Kanagawa Pref. Nara Pref. Mie Pref. Ise Bay Shizuoka Pref. Suruga Bay Clearing missing links, etc. (road) Planned route for the Chuo Shinkansen Assumed focal regions (earthquake) 5

17 Advantages of the Greater Nagoya III Availability of Electricity Electric companies Hokkaido Tohoku Tokyo Chubu Hokuriku Kansai Chugoku Shikoku Kyushu Total capacity (0,000 kw) 485,475 5,77 2, ,542, ,574 Max. electricity demand (0,000 kw) 500,434 5,520 2, ,05,82 585,634 Supply-Demand (0,000 kw) Reserve margin (%) The above are about excerpts from the reports made on May 2, 202 by the sixth demand-supply examination meeting The supply capacities are after giving and taking of electricity among electric companies. The demands shown above are assumed based on that the summer for 202 will be as extremely hot as that for 200, and that consumers are willing to cooperate for energy saving and made taking economic growth into consideration. Chubu Electric Power Co., Inc. supplies electricity to entire prefectures of Aichi and Nagano, most part of Gifu and Mie Prefectures and western part of Shizuoka Prefecture. 6

& Nagoya-city Other Municipalities Business Community Federation of Industries Chambers of Commerce I-BAC (International Business Access Center) Chubu Bureau of Economy, Trade and

18 Greater Nagoya Initiative Common brand for industrial promotion, promotion of internal investment and international exchange activities Implementing local policies under the Greater Nagoya brand Supporting attracting investment to Japan and developing overseas businesses and promoting business exchange activities Administration Aichi, Gifu, Mie Pref. & Nagoya-city Other Municipalities Business Community Federation of Industries Chambers of Commerce I-BAC (International Business Access Center) Chubu Bureau of Economy, Trade and Industry Japan External Trade Organization GNIC Office One Stop Center For Global Industries Academia 65 Universities Research Institutes GNI Partners Club 540 Companies in this region 7

19 Enterprises in the Greater Nagoya Number of Businesses 業種年度別 by Type by Year Hotels and Restaurants 宿泊飲食サービス業 Control and Support 管理支援サービス業 Services Expert, Science and Technology Services 専門科学技術サービス業 Real 不動産業 Estate Finance and Insurance 金融保険業 Wholesaling and 卸売り小売り業 Retailing Transportation 運輸保管業 and Storage Information 情報通信業 Communication Manufacturing 製造業 Business 業種 Type Control 管理支援サービス業 and Support Services 7% Hotels 宿泊飲食サービス業 and Restaurants Expert, Science % and Technology 専門科学 Services 技術サービス業 7% Real 不動産業 Estate 0% 金融保険業 Finance and Insurance 2% 2% 卸売り小売り業 Wholesaling and Retailing 9% 9% Transportation 運輸保管業 and Storage 2% 2% Information 情報通信業 Communication 5% 5% Manufacturing 製造業 47% 47% Manufacturing 製造業 Information 情報通信業 Communication Transportation 運輸保管業 and Storage Wholesaling 卸売り小売り業 and Retailing Finance 金融保険業 and Insurance Real 不動産業 Estate Expert, Science and Technology 専門科学技術サービス業 Services Control and Support 管理支援サービス業 Services Hotels 宿泊飲食サービス業 and Restaurants オーストリア Austria % その他 Others Belgium ベルギー Switzerland スイス 8% % % インド India イタリア Italy 2% 2% スウェーデン Sweden 2% フランス France 2% ネパール Nepal 2% オーストラリア Australia 2% Thailand タイ 2% South Taiwan 台湾 Korea 韓国 6% % イギリス U.K. 8% Countries 国名 China 中国 8% Germany ドイツ 3% U.S.A. 米国 7% China 中国 U.S.A. 米国 Germany ドイツ South 韓国 Korea U.K. イギリス Taiwan 台湾 Thailand タイ Australia オーストラリア Nepal ネパール France フランス Sweden スウェーデン Italy イタリア India インド Belgium ベルギー Switzerland スイス Austria オーストリア Others その他 8

Foreign-Capital Enterprises Promotion Scheme [ Aichi Prefecture ] () Supporting the establishment of manufacturing or R&D facilities To support large-scale investments, subsidies from Aichi

20 Foreign-Capital Enterprises Promotion Scheme [ Aichi Prefecture ] () Supporting the establishment of manufacturing or R&D facilities To support large-scale investments, subsidies from Aichi Prefectural Government are raised significantly. [One of the largest subsidies in Japan!] Ceiling: bn. 0 bn. (2) Supporting the establishment of facilities by SMEs and reinvestments by Aichi enterprises Up to 0% of investment amount Ceiling bn. (3) New Aichi Subsidies Program for Supporting R&Ds A subsidy to R&D and proving test activities Large enterprises: A half of project cost Ceiling: 200 mio. SMEs: Two thirds of project cost Ceiling: 00 mio. Increased ratio and ceiling of the subsidies will apply to aerospace industries in International Strategy Comprehensive Zones The above ceiling and ratio include subsidies granted by local municipalities for supporting reinvestment by Aichi enterprises. 9

Foreign-Capital Enterprises Promotion Scheme [ Gifu Prefecture ] Promotion Subsidies Program for Foreign-Capital Enterprises Location in Gifu Aiming at revitalizing the local economy and creating

21 Foreign-Capital Enterprises Promotion Scheme [ Gifu Prefecture ] Promotion Subsidies Program for Foreign-Capital Enterprises Location in Gifu Aiming at revitalizing the local economy and creating employment through inviting enterprises in the prefecture, a subsidy is granted to an enterprise which establishes facilities in Gifu Prefecture. Ceiling: Max. bn. Some municipalities in Gifu grants subsidies for employment and others that can be used for payment of fixed assets. 20

Foreign-Capital Enterprises Promotion Scheme [ Mie Prefecture ] One of the preferential treatment for location of enterprises for 20 (Reference) Promotion Subsidies Program related to Valley Projects

22 Foreign-Capital Enterprises Promotion Scheme [ Mie Prefecture ] One of the preferential treatment for location of enterprises for 20 (Reference) Promotion Subsidies Program related to Valley Projects A preferential scheme of the prefecture granted to enterprises related to each valley project and highly advanced members and material industries Scope: Costs for acquiring buildings, machine and equipment and welfare facilities (excl. land) Ceiling: 500 mio. The scheme for 202 is under examination. Valley Schemes Medical Valley Scheme (medicine, health and welfare) Silicon Valley Scheme (semiconductors and IT, etc.) Crystal Valley Scheme (liquid crystal and other FPOs) The Valley Schemes are an industrial policy of Mie Prefecture to make its industrial structure compete on the par with other international competitors. Currently, Mie has three Valley Schemes, including Crystal, Medical and Silicon Valley. These Valley Schemes provides subsidies for establishment of facilities to related enterprises and supports for technological development and forming a network. 2

23 Foreign-Capital Enterprises Promotion Scheme [ Nagoya City ] Promotion Subsidies Program for location of Nagoya City Industry in 202 (Rental /Ownership Type) A part of costs for acquiring or renting lands and buildings in Nagoya City to newly open to add an office, a factory, an R&D facilities is granted. Subsidies for the Promotion of Industrial Locations (Rental Type) Scope of the subsidies: Rent for land, buildings and machine and equipment (Excepted for those case that rents only machine and equipment.) Amount: Three months rent for land, buildings and machine and equipment (or 6 months rent for an R&D facility) Ceiling: 3 mio. per enterprise (or 6 mio. for an R&D facility) Subsidies for the Promotion of Industrial Locations (Ownership Type) Scope of the subsidies: Amount equivalent to fixed asset tax and city planning tax for land, buildings and machine and equipment newly acquired (Excepted for those case that acquires only machine and equipment.) Amount: Three years taxes for an office and a plant (and five years taxes for an R&D facility) 22 Ceiling: Total bn. per enterprise

Prefecture) INAX Live Museum (Tokoname City) Noritake

24 Industrial Sightseeing Sites in the Greater Nagoya Kagamihara Aerospace Science Museum (Kagamihara City, Gifu Prefecture) INAX Live Museum (Tokoname City) Noritake Garden Craft Center (Nishi Ward) Toyota Automobile Museum (Nagakute-Cho) 23

25 Sightseeing Spots in the Greater Nagoya 高山祭 Shirakawa Village (The World Heritage) Kumano Kodo pilgrimage routes (The World Heritage) Takayama Festival Nagoya Castle Pearl Island Source: Gifu Newspaper June 30, 2007 Edition Gero Hot Spring 24

MARCH, Result of an annual survey of international students in Japan 2016

MARCH, Result of an annual survey of international students in Japan 2016 MARCH, 2017 Result of an annual survey of international in Japan 2016 Japan Student Services Organization(JASSO) has conducted an annual survey of international in Japan at the graduate school, university,