Finnish companies not shaken by Japan’s earthquake

Forestry products still account for half of Finland’s largely stagnant exports to Japan

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The earthquake and tsunami catastrophe that has overwhlemed parts of Japan is not expected to have a significant impact on the economy of Finland or on those Finnish companies that operate in Japan or trade with the country.
      In recent years, trading between Finland and Japan has decreased and its importance to the countries’ economies has lessened. Things have been heading in this direction for the past decade.
      The reason lies in the globalisation of various manufacturing industries.
     
The automotive industry is a good example.
      Japanese cars continue to sell well in Finland, but as the Japanese car manufacturers have moved a lot of their production into Europe this has become a matter of internal trading within the European Union. It no longer constitutes as trading between Japan and Finland.
      Of all the cars sold in Finland by Toyota, the country’s best-selling car make, only 20 per cent are now imported from Japan.
      The structural change in trading between Finland and Japan is manifested especially in the reduction of the flow of goods from Japan to Finland.
     
Ten years ago, Japan exported goods into Finland to a value of EUR two billion. Last year’s corresponding figure was just EUR 1,000 million.
      As the value of Finland’s exporting into Japan has remained fairly stable year after year in the region of EUR one billion, the formerly clearly unfavourable balance of trade from Finland’s point of view has now evened out.
      Japan is now only Finland’s 15th largest trading partner, between Denmark and Spain.
     
Half of the EUR 1,000 million exports to Japan are associated with the forest industry, one way or another. In addition to paper, Finland exports to Japan sawn and planed timber, timber-framed buildings, plus other wood products.
      As an export market, the technologically-advanced Japan with its highly original culture is quite challenging.
     
For Finnish companies, it has not been worthwhile to set up their own production facilities in Japan. Even the elevator and escalator giant Kone, which has always been in the forefront of the internationalisation development, resolved its dilemma with Japan by partnering up with Toshiba and setting up a joint factory in China.
      Of all the Finnish firms, Metso and Cargotec have the largest sales offices in Japan with around a hundred workers in each one of them, all Japanese.
     
One of Finland's latest exporting efforts to the land of the rising sun is a service centre for the elderly, which was launched as a Finnish-Japanese cooperation project in Sendai a couple of years ago. The Finnish export promotion association Finpro is involved in the undertaking, providing an export window for the relevant Finnish service sector firms.


Links:
  Finpro: Finnish Wellbeing Center Project (FWBC) in Sendai, Japan

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