japan | Idaho Business Review

Boise office opens to facilitate trade between Idaho, Japan

photo of japanese companies — As part of their tour of Idaho, Japanese company representatives attended a session of the Idaho Legislature. Photo by Sharon Fisher

An organization intended to help small- to medium-sized Japanese businesses set up shop in the United States — using Idaho as a gateway — has opened an office in Boise.

The organization, Hatsu Japan, is headed by Takashi Suzuki, who also owns Sakae Casting, which opened an office in Idaho Falls in 2017.

This office is the result of several years of effort, said Sen. Kelly Anthon, R-Twin Falls, who has been involved with the project because he speaks Japanese.

“This is the culmination of years of work and the development of a relationship with these companies in Japan,” Anthon said. “Japanese companies realize their domestic market is either exhausted or not as attractive as the U.S. market. Our approach is to bring that business to Idaho and give jobs to Idahoans, through partnerships that benefit Japanese companies as well as Idaho.”

Tour of Idaho

Hatsu recently led 26 Japanese companies on a visit to Idaho, where they spent one day in Twin Falls and one day in Boise. In Boise, they met with Gov. Brad Little, attended a session of the Idaho Legislature and peppered Anthon, Lt. Gov. Janice McGeachin and consultant Jan Rogers with questions about doing business in Idaho.

The group — 17 of whom had never visited Idaho before — represented a wider range of industries, including manufacturing and food processing, than previous efforts, which had primarily focused on technology.

photo of isao sagaro — Isao Sagaro speaking to Lt. Gov. Janice McGeachin through an interpreter. Photo by Sharon Fisher

One example was Isao Sagara — making his first trip to Idaho at age 85 — who was interested in meeting with Idaho farmers to look into the use their potatoes and other products in frozen korokke, a potato-based croquette that can also include cheese, vegetables and meat. His company, RakuRaku Food, has 38 employees.

“If we say ‘Idaho,’ everyone identifies Idaho with potato,” Sagara said through an interpreter.

What it could mean for Idaho

While the group isn’t working only with Idaho — it is also visiting California and Texas on its trip — Anthon said he believed that Idaho was the only location where Hatsu had set up an office. Sakae Casting originally came to Idaho in 2016 after attempting to meet with California leaders and finding that the company was too small to get much attention from the state.

“That’s what Idaho is providing for these companies,” Anthon said. “They see a realistic possibility for a midsize Japanese firm. They’re not Sony. They’re not Toyota.”

The next step in the relationship is a June visit to Tokyo for Anthon and Rogers.

Previous visits

The two regions have been connecting since a March 2016 visit from Suzuki. In March 2017, the company opened an office in Idaho Falls. In April 2018, it was Sakae’s turn to host Idaho for a visit to several Japanese companies, and in July, seven executives from those companies came back to visit Idaho.

In November 2017, the Idaho Department of Commerce awarded a nearly $238,000 Idaho Global Entrepreneurial Mission (IGEM) grant to the University of Idaho, Boise State University, and the Center for Advanced Energy Studies to partner with Sakae Casting on research and development on spent nuclear fuel storage and cooling capabilities, a project let Sakae to open its office in Idaho Falls.

photo of takashi suzuki — Takashi Suzuki. Photo by Sharon Fisher

With the completion of that project, Sakae has now moved its office to Boise, which it will share with Hatsu, Suzuki said through an interpreter.

In addition, Takashi Teraoka, the Consul General of Portland, who is responsible for Idaho, visited Boise in March 2019, as well as again this February.

According to SelectUSA, which sponsors the SelectUSA Investment Conference in Washington, D.C., Japan is the third-biggest source of foreign direct investment (FDI) in Idaho, at 11%, after Germany and Canada. The biggest industry sectors for all countries are food and beverage, with 14 projects out of a total of 38; software and IT services, with five projects and industrial equipment with three projects.

Idaho beats the drum for Japanese investment

photo of taiko drumming — Members of Sangha Taiko performed at a recent reception hosted by Japan’s Consul General of Portland. Photo by Sharon Fisher.

A new partnership between an Idaho company and a Japanese company is expected to be announced soon— part of an ongoing relationship that is leading to foreign direct investment.

The two regions have been connecting since a March 2016 visit from the CEO of Tokyo’s Sakae Casting. In March 2017, the company opened an office in Idaho Falls. In April 2018, it was Sakae’s turn to host Idaho for a visit to several Japanese companies, and in July, seven executives from those companies came back to visit Idaho.

Another Japanese group visited Idaho in February, and another visit to Japan from Idaho government and economic development representatives is scheduled for this summer.

photo of Takashi Teraoka — Takashi Teraoka, Japan’s Consul General of Portland, which is responsible for Idaho. Photo by Sharon Fisher.

Japanese companies such as Sakae have been partnering with Idaho because it is more welcoming than larger states such as California, according to Sen. Kelly Anthon, R-Burley, who speaks Japanese and has been involved in a number of the visits.

Anthon spoke to attendees at a recent reception hosted by Takashi Teraoka, the Consul General of Portland, who is responsible for Idaho.

A sister city relationship between Idaho Falls and the Japanese city of Tokai-Mura also helped build ties, he added.

Since 2016, trade between Idaho and Japan has increased 17 percent, Teraoka said.

Other Japanese investments include the purchase in January for an undisclosed price of Alta Forest Products. The company is based in Chehalis, Washington, with one of its four manufacturing plants located in Naples, Idaho. And the Japanese company Setouchi Holdings purchased Sandpoint, Idaho-based Quest Aircraft in 2015.

On the U.S. investment side, Micron owns three factories in Japan. In addition, BioLogiQ Inc. — an Idaho Falls bioplastic resin manufacturing company specializing in environmentally friendly plastic products made from renewable resources — announced in October that it was partnering with Inabata & Co Ltd. Japan to focus on sales, film production, and polymer compounding while also acting as Japanese importer and distributor for BioLogiQ products. The company is also developing additional relationships with other Japanese companies that are not yet announced, said president Brad LaPray.

In November 2017, the Idaho Department of Commerce awarded a nearly $238,000 Idaho Global Entrepreneurial Mission (IGEM) grant to the University of Idaho, Boise State University and the Center for Advanced Energy Studies to partner with Sakae on research and development on spent nuclear fuel storage and cooling capabilities. Ohzen Precision Machining Cutting, a partner of Sakae, set up shop in Idaho Falls to make titanium after-market parts for Harley-Davidson motorcycles.

Anthon and Jan Rogers, the retired former CEO of Regional Economic Development for Eastern Idaho, indicated that another partnership between a Japanese company and an Idaho company was underway, but couldn’t be publicized yet.

Idaho attendees at the event included Gov. Brad Little (who, Teraoka pointed out, has not yet visited Japan), Lt. Gov. Janice McGeachin, Sen. Brent Hill, Sen. Michelle Stennett, Sen. Steve Vick, Sen. Chuck Winder, and Rep. Scott Bedke. In addition, a number of Idaho regional economic development professionals also attended.

Both Idaho and Japanese dignitaries acknowledged the past history between the two regions, which has not always been so cordial. More than 13,000 people of Japanese ancestry were incarcerated at the Minidoka Internment Camp in Hunt, east of Jerome — now a National Historic Site — between 1942 and 1945.

“Our relationship has had both tragedy and triumph,” Teraoka said.

Foreign direct investments are down in the U.S., small in Idaho

photo of sakae casting people — In this 2017 photo, Sakae Casting CEO Takashi Suzuki (center) addressed locals in the lobby of his Idaho Falls office, the company’s first U.S. office. File photo.

Foreign direct investments to acquire, establish, or expand U.S. businesses hit $259.6 billion in 2017, down 32 percent from $379.7 billion in 2016, according to the U.S. Bureau of Economic Analysis (BEA).

In Idaho, total first-year expenditures were $35 million in 2017, compared with $3 million in 2014, the last available value, said Amanda Budny, chief of the new foreign investment section of the direct transactions and positions branch in the direct investment division of the BEA, in the U.S. Department of Commerce.

In fact, the BEA wasn’t able to release additional figures for Idaho, because the organization is required to protect the identity of individual companies, and there were too few investments for that to be possible, said Jeannine Aversa, chief of public affairs and outreach for the BEA. “All other values in the row, including total planned expenditures for all transactions, for Idaho are displayed as (D), which means BEA needed to suppress that value to avoid disclosure of individual company data,” Budny said.

“A (D) on a dollar value table does not indicate relative size of the suppressed value,” she added.

The Idaho Department of Commerce said it was satisfied with the numbers.

“We view cultivating foreign direct investment in a longer-term context, not on a year-over-year basis,” said Matt Borud, chief marketing and innovation officer for the department. “Recruiting foreign direct investment is an effort that has been growing over the last several years, with success stories like NewCold, Sakae Casting, and others coming to fruition recently. Relationships are important in all projects, but they’re especially important in FDI projects and building those relationships may take more time than an average domestic project. We’re excited about the traction that is building.”

International companies that have invested in Idaho include Canada-based McCain Foods, France-based Materne Industries, and Ireland-based Glanbia Foods. Other international companies expanding in Idaho include Lactalis (France), Bayer (Germany), GrainCorp (Australia), Sakae Casting (Japan), and eCobalt (Canada), according to the Department of Commerce.

In June, the state sent a large delegation to the 2018 SelectUSA Investment Summit in Washington, D.C., which was intended to showcase the state to potential international investors with the goal of increasing foreign direct investment in Idaho. This was the fifth year a statewide delegation has attended the summit, and the NewCold investment was announced at the time.

The Idaho delegation included Gov. C.L. “Butch” Otter and representatives from Idaho Commerce, Idaho State Department of Agriculture, Idaho Senate, Idaho Dairymen’s Association, Dairy West, Regional Economic Development for Eastern Idaho (REDI), Southern Idaho Economic Development Organization (SIEDO), Great Rift Business Development, Bannock Development, City of Ammon, City of Rupert, City of Twin Falls, City of Burley, City of Jerome, Idaho Power, Idaho National Laboratory and University of Idaho.

Japanese investors visit Idaho

photo of clif bar — A group of seven Japanese businessmen toured a number of businesses in southern and eastern Idaho, including Clif Bar in Twin Falls. File photo.

A group of Japanese businessmen recently toured southern and eastern Idaho looking for business opportunities.

Seven representatives from Japanese companies traveled to Idaho July 10-13 to learn more about the state and potential opportunities to partner with Idaho businesses, according to Regional Economic Development for Eastern Idaho (REDI). These Japanese businesses met with an Idaho team that visited Japan in April. They are specifically interested in investing in Idaho, REDI said.

The tour included the Koenig Distillery in Nampa, Idaho Milk Products in Jerome, Clif Bar in Twin Falls, the ribbon cutting of the NewCold freezer facility in Burley, Mart Produce in Rupert, Inergy Solar in Chubbuck, BYU-Idaho in Rexburg, and the Center for Advanced Energy Studies (CAES) in Idaho Falls, as well as meetings with local officials.

The visitors were particularly interested in machining and industrial product design, said Nathan Murray, economic development director for the city of Twin Falls.

“I was told by a couple of them that they most enjoyed visiting Clif Bar and seeing the automated packing,” Murray said. “They were also interested in some food and the processing of local materials to make products that could then be exported back to Japan.”

Idaho and Japan business leaders have been seeing a lot of each other lately. Sakae CEO Takashi Suzuki visited Idaho Falls in March 2016 on a sister city visit with other business executives. Ohzen Precision Machining Cutting, a partner of Sakae, is setting up shop in Idaho Falls to make titanium after-market parts for Harley-Davidson motorcycles. In November, the Idaho Department of Commerce awarded a nearly $238,000 Idaho Global Entrepreneurial Mission grant to the University of Idaho, Boise State University, and CAES to partner with Sakae Casting on research and development on spent nuclear fuel storage and cooling capabilities.

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