Japanese business watches and waits

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Talk of Japanese companies buying out European wind turbine manufacturers has circulated in the wind industry for years. But though the time has never been riper for astute acquisitions, the Japanese business community remains indifferent to the opportunities, says a Dutch businessman with his ear to the ground in Tokyo.

"There are many good arguments for a Japanese acquisition, but I doubt it will happen any time soon," says Willem Kortekaas of Euroact, a merger and acquisition consultancy based in Tokyo. The firm has been looking into the potential for a marriage between European wind energy and Japanese business, but so far there has been only mild interest and no decisive action.

From a European standpoint, says Kortekaas, a Japanese acquisition would seem right in the light of the abundance of wind turbine makers -- and the fact that several of them have been in financial trouble. Seen from Japan, a foothold in Europe would give access to advanced wind technology and new markets. After Ishikawajima Harima Heavy Industries and Yamaha discontinued production of wind turbines, only Mitsubishi Heavy Industries remains. But Mitsubishi's technology is generally believed to face hard competition, especially from Europe, Kortekaas notes.

Twelve foreign wind turbine manufacturers now have agents in Japan, which leaves roughly nine major wind companies without representation there, says Kortekaas. "But even many of the Japanese agents for foreign wind turbine manufacturers will gladly give you all the arguments for why wind energy will not succeed in Japan," he says with a smile. The Japanese are not yet comfortable about wind energy, he continues. They are focusing mostly on solar energy. At this point they will not pay just to get a "window of technology." Power plant developers like Tomen Corp, which has already invested in a series of wind projects in Europe and the US (Windpower Monthly, June 1997), are not interested in tying themselves to a single wind turbine supplier.

"Japan is in a de facto recession right now, and Japanese companies are no longer snapping up foreign companies on a whim like they did in the late 1980s," says Kortekaas. He foresees, therefore, that movement into the European wind sector will most likely take the form of mergers. But in the long run it could be that the purchase of shares in European wind companies by their Japanese agents could lead to gradual takeovers, he says.

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