Japanese companies protect against eurozone

Featured - June 13th, 2012

As the eurozone crisis looms, Japanese companies are setting up precautionary measures to deter potential blows, The Nikkei reports. Several Japanese companies, such as Bridgestone Corp. and Daikin Industries Ltd., are reporting decreasing demand from Europe, forcing them to cut local production costs and utilize back-offices to save money, with Sony Corp., for example, outsourcing its television assembly productions locally.

Hitachi Ltd. will change tact and aim its coal-fired power plant systems toward emerging markets in Asia and Eastern Europe, as demand slows down. Komatsu Ltd. set up measures to track its global production and inventory, enhancing its “ability to quickly respond to abrupt changes in the business environment,” Komatsu Ltd. President Kunio Noji told The Nikkei.

The Nikkei reported that European revenue accounts for 20% of overseas sales for 171 major Japanese companies. As global economic trends continue to be hard to predict, it seems imperative for the companies to establish preventive measures and curtail potential earnings fallout.