MHI, Marubeni to join mission to Africa

Exploration & Development

Mitsubishi Heavy Industries Ltd and Marubeni Corp are among more than ten companies joining a Japanese delegation to South Africa, Namibia and Angola to obtain resources, three government officials said.

The group, led by State Secretary for Foreign Affairs Osamu Fujimura, will meet representatives of the three African countries during a one-week visit from Aug 28 to promote Japanese investment in resources, power and transportation projects, said the officials, who are involved in organising the trip and who declined to be named before a public announcement.

Japan, whose economy dropped to third place behind China (and the US) last quarter, is competing with that country and India as they race to secure African energy and commodities assets to fuel expansion at home. Japan’s trade with the continent was US$34.4 billion in 2008, according to the Finance Ministry, compared with China’s US$107 billion, according to Chinese government data.

China’s more aggressive investment strategy has given it an edge in Africa, said Shinichi Mizuta, a senior policy analyst at Mitsubishi Research Institute in Tokyo. “Japan typically wants to know the details of projects before it will commit to financing, while China is willing to commit big money up front,” he said by phone.

Spokesmen for Mitsubishi Heavy and Marubeni confirmed the visit when reached by phone in Tokyo. Trading companies Sojitz Corp and Sumitomo Corp, Hitachi Construction Machinery Co, and state-run Japan Bank for International Cooperation, Japan International Cooperation Agency and Nippon Export and Investment Insurance also said they would send representatives.

In South Africa, Japan aims to sell nuclear power and high-speed rail technologies, the officials said. The two countries agreed to start negotiations for a civil nuclear cooperation agreement on April 30, according to a statement on Japan’s foreign ministry website.

As many as 50 Japanese bureaucrats and company representatives will join the delegation, the officials said. Details including who they will meet haven’t been worked out yet, they said. Japan sent three trade missions to Africa in 2008.

“They should be able to get into business discussions this time,” said Katsumi Hirano, an African specialist at the Institute of Developing Economies, Japan External Trade Organization. “Africa will be a test for Japan’s trading companies, to see whether they’re big enough and have the management skills to compete in the global market.”

The Japanese government pledged in 2008 to double aid to Africa, providing about US$4 billion in loans as part of efforts to wield more influence on the continent. Japan also pledged to establish a US$2.5 billion fund to double private investment in Africa to US$3.4 billion by the end of 2012.

Trade with Africa accounted for about 2.2% of Japan’s total in 2008, according to the trade ministry.

Aug 18 (Bloomberg)