Govt to help companies strengthen supply chains

In a bid to strengthen Japan’s supply chain networks in the Indo-Pacific, the government will support eight projects by Japanese companies to test the effectiveness of their efforts to boost their access to needed materials.

The Japanese government will support companies that strive to “make their supply chains visible” by sharing information related to stock and production, including information about suppliers of parts and components in the region. It will also assist firms seeking to smooth foreign trade procedures.

Through these endeavors, the government will aim to strengthen supply chain networks that do not rely on China, which has caused concern over its violations of human rights and other issues.

In fiscal 2022, the Japanese government will contribute a total of about ¥800 million to eight projects to be undertaken by Japanese companies to strengthen their supply chains in India, Australia, and Southeast Asia, thereby boosting the industrial competitiveness of Japanese businesses in the region.

One trial project will be conducted by Showa Denko Materials Co., a company that deals with semiconductor-related materials. It will create a database of information related to stock and production — including information related to raw material suppliers in such countries as India, Malaysia, and Singapore — to centralize its operations and share information.

If information can be immediately obtained about the procurement of parts and components, and their distribution, at the time of a natural disaster or other contingency, it will help quickly secure alternative sources of parts and distribution.

And in normal times, firms will be able to switch to the best sources for procuring parts, in keeping with trends in the market.

ACSL Ltd., a domestic startup that develops drones, will create a database of basic information on components to be produced at a local factory operated by a firm set up jointly with a company in India. This will enable component suppliers to also access the information.

There are fears of classified information being stolen through the use of drones made by China, a country that holds an overwhelming share in the global market. The Japan government will therefore help ACSL to produce drones domestically.

It will also support TradeWaltz Inc., whose stakeholders include NTT Data Corp., and Mitsubishi Corp., to facilitate trade among the five countries of Japan, Australia, New Zealand, Thailand, and Singapore.

By linking the system developed by TradeWaltz with systems in those countries, the transmission and receipt of documents related to imports and exports, including certificates of origin, and the settlement of accounts will be done online.

This support from the Japanese government is based on an agreement reached at talks among the economic ministers from Japan, Australia and India in April last year. The three countries agreed to make concerted efforts to build supply chains, and called on Southeast Asian nations to cooperate with them.

To share data related to supply chains, Japan, Australia and India are set to draw up rules that their governments and companies will be required to observe as early as next spring.