April 16 - 22
Weekly Business Guide to Japan -- April 16 - 22
1. Japanese travel agencies join forces to purchase international airline tickets
2. Sumitomo, KDDI and JCOM plans for an an alliance
3. Kawasaki Kisen Ltd. -- offshore production of liquefied natural gas (LNG)
1. Japanese travel agencies join forces to purchase international airline tickets
Four Japanese travel agencies -- Nippon Travel Agency, TopTour, NOE and F-ness -- just announced plans to establish a joint-venture to unify their international air ticket purchases. The joint-venture, scheduled to start in mid-July, is the companies’ attempt to overcome the rigid business environment and broaden the scale of their operations.
The four companies had consolidated revenues of Yen 12 billion in 2008; their joint-venture would put them into third position, behind JTB and discount overseas flight giant H.I.S. It remains unclear whether other medium sized companies will participate in the new unified ticketing system.
2. Sumitomo, KDDI and JCOM plans for an alliance
On April 22, Sumitomo and KDDI, both major shareholders in JCOM, Japan’s largest cable television company, announced that negotiations have begun on a possible partnership in the areas of broadcasting, transmission and digital contents.
Earlier, Sumitomo announced plans to make a tender offer (TOB) for JCOM, resulting in its gaining 40.1 percent of voting shares. This makes Sumitomo the largest shareholder of JCOM. KDDI remains the second largest shareholder with 31.1 percent of the voting rights. The negotiations to build a corporate relationship began immediately on April 22, one day after the TOB ended.
Concrete plans for cooperation are expected to involve the three subdivisions of JCOM: (1) the application of KDDI’s fiber optic data transmission services for JCOM’s right on sports broadcasts, (2) the selling of au-branded mobile phones in the JCOM business network, and (3) the unification of Japan Cable Network (JCN), which operates under KDDI and JCOM’s cable network systems.
3. Kawasaki Kisen Kaisha Ltd. -- offshore production of liquefied natural gas (LNG)
Kawasaki Kisen Kaisha sets out for a project to produce liquefied natural gas (LNG) off the shores. The company, not expecting any recovery in the container business, seeks to diversify operations into the LNG market which is considered by some to have a good a demand outlook.
Kawasaki Kisen Kaisha has also invested in 15 percent of the shares of Flex LNG, a Korean offshore development group that planned the Southeast Asia National Oil (LNG) project. Mining is set to begin in 2014 and is expected to produce 1.5 to 2 million tons of LNG a year. The production will be a major contribution to the increasing global demand for LNG, especially in emerging countries, as forecast by Japan's Institute of Energy Economics.
LNG is the result of a chemical process that converts gas from its natural form into a liquid form by temporarily removing certain chemical compounds. The gas in its liquid form only takes 1/600th the volume of its natural form and is therefore cheaper to transport over long distances where no pipelines exist.
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