Article – Billions to flow from Shinzo Abe visit, says Mitsubishi chairman

7 July 2014
Rick Wallace
The Australian

MITSUBISHI Corp chairman Yorihiko Kojima has declared Australia a “veritable lifeline” for Japan’s resource-dependent econ­omy and hinted at a string of looming investments here on the eve of Japanese Prime Minister Shinzo Abe’s historic visit.

His comments come as the Japanese giant, which has ploughed tens of billions of dollars into Australia’s resources sector, is said to be eyeing acquisitions and projects in agribusiness, resources and retail in Australia — including a new energy distribution ­operation.
The trading house boss — who is part of a high-powered business delegation travelling with Mr Abe — said in an exclusive interview with The Australian that the new free-trade agreement would bring the two countries closer and boost trade and investment flows.
Mr Abe arrives in Australia ­tonight on a historic visit to sign the FTA and address parliament tomorrow and hold prime ministerial talks expected to focus on defence, strategic and economic ties.
Tony Abbott said yesterday the FTA with Japan would boost Australian jobs. “Japan is Australia’s second biggest trading partner — with almost $70 billion in two-way trade every year,” the Prime Minister said.
“Australia is a trading nation, and more trade means more jobs. This agreement is important for our farming sector — with better access to Japan for our beef, cheese, horticulture and wine. And consumers will benefit from less expensive household appli­ances and electronics.”
Mr Kojima told The Australian that Australia was an attractive investment destination for Japan despite challenges from “high ­labour costs, low productivity and powerful unions”.
“Australia remains one of the world’s major suppliers of resources, and has potential for growth in other areas as well, including agri-industry,” he said.
“These facts, coupled with well-developed infrastructure and openness to foreign investment as well as proximity to dynamic Asian markets make Australia a very attractive destination for foreign investment.
“Expectations are therefore high in the business community that your government will ­address the current challenges ­effectively.”
The business giants arriving in Australia tonight represent corporations valued at $330bn, equal to the annual GDP of ­Denmark.
They are expected to join Mr Abe at a dinner to be hosted tomorrow by Mr Abbott in Canberra, as well as attend the signing ceremony for the FTA earlier in the day, and a business lunch with members of the Australia-Japan Business Co-operation Committee and other corporate heavyweights.
Mr Kojima said that the completion of the Australia-Japan FTA was a vital step in tighter economic integration between the two countries.
“The EPA (FTA) will have a positive impact on expanding trade and investment between our two countries and will have a particularly strong effect on strengthening technical and other types of collaboration in the resource sector,” he said.
He expressed his support for the US-backed trans-Pacific Partnership trade pact and called for trade liberalisation through Asia-Pacific.
“The Asia-Pacific is important for us as a company, so freer trade and the establishment of clearer trade and investment rules will improve the environment in which we operate and create business opportunities.”
Mitsubishi Corp recently bought the Australian operations of grain handler Olam, following its rival Mitsui’s significant move into the agribusiness sector in Australia.
“As (Australia is) one of the world’s largest wheat producing countries and the largest exporter of wheat to the Southeast Asian market, this will bolster our ­capacity to forge a stronger and more stable procurement system in Australia’s competitive grain market,’’ Mr Kojima said. “This is also part of efforts to strengthen our global value chain in non-resource sectors while at the same time contributing to greater dynamism in the Aus­tralian economy.”
Mitsubishi will not comment on suggestions it is eyeing a move into energy distribution here.
Mitsubishi is a mainstay of resources investment in Australia with stakes in the BMA joint venture, a coal operation jointly owned with BHP Billiton, and several gas fields including the Browse LNG project.
“Australia is among the world’s most resource-rich countries and represents a veritable lifeline for the Japanese economy,’’ Mr Kojima said.
Until the recent slump in the coal price, Australia was generating a vast share of the profits for the Mitsubishi group, but the company is positive about future investment here. “I do not foresee Australia losing importance for us as a major business partner.
“On the contrary, I believe Japanese investment will continue to play a key role in Australia’s resource sectors, so our overall commitment to Australia is long term,” Mr ­Kojima said.
“Our involvement in Australia covers non-resource sectors such as water utilities, (the) sales operations of Isuzu D-Max and car parts, as well as involvement in the food and retailing industries, including grains and milk powder, among others. “We are also exploring opportunities for potential expansion in the retail and consumer markets in Australia.”
Courtesy of the Australian