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Construction

The outlook for Japan’s construction industry is favourable as a result of the government’s focus on reconstruction activity following the tsunami. The Japanese Ministry of Economy, Trade and Industry reports indices of construction activity increased from 87.5 in the fourth quarter of 2012 to 99.4 in the fourth quarter of 2013, registering growth of 13.6 per cent. Total industry output is expected to increase at a compound annual growth rate of 3.19 per cent until 2018.
The UAE and Japan recently discussed extended cooperation in the sector, and WAM reports that current projects in construction and energy are worth $484 million (Dh1.77 billion). Successful examples include Marubeni’s involvement in the Independent Water and Power Producer (IWPP) in Fujairah, the Shuweihat S2 power and water plant project in Al Gharbia, and joint contracts in the Habshan-5 project in Habshan.
Japanese builders have long played a pivotal role in Dubai’s construction, with Mitsubishi Heavy Industries (MHI), Obayashi Corporation, Kajima Corporation, Taisei, and Hitachi Plant Engineering involved in some of its most iconic landmarks.
Across the UAE, the construction industry witnessed contracts to the tune of $24.792 million in 2012, and a Research and Markets report says this will increase to $50.59 million by 2015, with the bulk of projects likely to be awarded by next year. In Dubai alone, the $3.8-billion infrastructure investment for Expo 2020 translates into a phenomenal amount of work for UAE-based Japanese contractors over the next six years.

Education

Over the past few years, the Japanese government has been directing panels of education experts to consider reforms that will help students compete better in a globalised world. Market intelligence resource ICEF Monitor says the most important are the introduction of English language in the third grade, an increase in the number of International Baccalaureate (IB) schools, and a new system for university entrance exams.

In the UAE, Japan plays a leading role in the fields of education and scientific research cooperation, with both sides recently welcoming tangible progress in various projects. Japan has formally opened an office at the Abu Dhabi Education Council, and a new memorandum of understanding between Tokyo University, the Petroleum Institute and the Research Centre Abu Dhabi aims to establish a framework for joint research studies and deeper academic cooperation. Experts from the Japan International Cooperation Agency continue to visit the UAE to provide technical education and assistance in the fields of waste management, aquaculture and fisheries. In February, Prime Minister Shinzo Abe expressed his intention to invite the UAE’s elementary and high school students to visit Japan.

Consumer electronics

Moody’s Japan KK, part of the influential Moody’s credit rating corporation, reports that the outlook for the Asian consumer electronics industry is negative throughout 2014, and Japan is no exception. According to its 2014 Outlook — Asian Consumer Electronics, “The negative outlook reflects our expectation that operating profit margins will remain below 3 per cent for most rated companies, reflecting lack of product differentiation and high penetration rates in key products.”

In the UAE, where Japanese giants Panasonic, Sony, Sharp and Toshiba have set up large offices to make their mark in the local retail sector and service the wider region, the consumer electronics market is set for strong growth, and demand for goods and appliances is likely to remain robust, according to Dubai Chamber. Its recent report predicts consumer electronics sales will rise to $3.97 billion by 2015.

In a fascinating development, Sharp is addressing the UAE’s thirst for strawberries by growing them in a $100,000-indoor laboratory test facility in Dubai. The fruit is grown from seedlings by artificially controlled light, temperature and humidity, and Sharp aims to grow 3,000 a month ahead of a planned factory-scale launch in 2015.

Health care

A quarter of Japan’s population consists of people 65 and older, and is expected to reach 35 million by 2025. Although Japan is the third-largest health-care spender in the world, total spending on health care is expected to rise by an average 2.7 per cent annually to reach 9.7 per cent of GDP by 2017, according to Deloitte’s 2014 Global Healthcare Outlook.

Japan and the UAE continue to reiterate the importance of cooperation in the medical sector. The UAE’s Centre of Excellence for Applied Research and Training (CERT) has signed an agreement with Medical Excellence Japan (MEJ) to promote advanced studies. Both have committed to establish an Endoscope Research and Development Centre at CERT’s Abu Dhabi headquarters, besides a training centre. Prime Minister Abe has promised that Japan will be ready to receive UAE patients in its advanced medical institutions by the end of the year, with exclusive service desks for them.
Late last year, Dubai Health Authority (DHA) received a delegation from Fujita Health University Hospital. His Excellency Engineer Essa Al Maidoor, Director General of DHA and Professor Kiyotaka Hoshinaga, Executive Director of Fujita, stressed the importance of exchanging best practices in medicine. In turn, a DHA delegation is scheduled to visit Fujita Hospital, which is renowned for its multi-organ laparoscopic and robotic surgeries, organ transplantation, and neurosurgery.

In January, Toshimitsu Motegi, Japan’s Minister of Economy, Trade and Industry, reiterated Japan’s intention to transfer medical knowledge and expertise to the UAE, especially for the treatment of cancer by carbon ion therapy. He also noted that advanced Japanese clinics such as Medical Excellence Japan (MEJ) will soon open in Abu Dhabi. Meanwhile, Dubai’s Sakura Clinic — a member of Japan’s DS Healthcare Group — offers medical and dental services, with a touch of traditional Japanese hospitality. Japanese firm Fujifilm specialises in advanced medical products and technologies, many of which have been installed at institutions across the UAE.

Retail

Retail sales in Japan increased 3.62 per cent in February, over the same month in 2013, reports the Ministry of Economy, Trade and Industry. But industry watchers say a new three-point rise in sales tax (from 5-8 per cent) may turn Japanese shoppers frugal, leading to price wars among retailers and triggering a shakeout in the distribution industry.

The popular Kinokuniya bookstore in Dubai Mall is spread over a massive 68,000 square feet and stocks more than 500,000 books and 1,000 magazines in six languages. The success of Daiso lies in its ability to offer 900 new items every month, with almost 100,000 items on display at larger outlets. Last year, when the retail concept opened its flagship store at Dubai Mall, it marked its tenth store in Dubai and 20th in the UAE. There is also the reputed automobile superstore Yellow Hat, which stocks car accessories and provides after-market services.

Lifestyle brand MUJI recently opened in Dubai after establishing an international presence with nearly 500 stores across the globe. MUJI’s innovative products reflect the notion of kanketsu — that which brings a sense of calm into everyday life — and are characterised by design simplicity and eco-friendly packaging. The 44-year-old Japanese confectionery brand Yoku Moku has opened no less than 11 outlets across the UAE in a mere 16 months. Mansour Al Sayegh, Executive Director, Alsa Lifestyle and Al Sayegh Group Abu Dhabi, says  the response from consumers has been highly encouraging, and that they will open more stores in future.

Hiroki Matsumoto, former managing director of Japan External Trade Organisation (JETRO) in Dubai once explained that sales of goods for Japanese manufacturers in the UAE are very small on a global scale, as the country is very small. But Japanese goods are expensive because they are high quality, and so they are popular here, he added. In a separate, earlier interview to Gulf News, Matsumoto also pointed out that UAE-made pasta and Masafi bottled water are unusually popular in Japan, and JETRO aims to popularise more Emirati products.

— Special to GN Focus