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TOYOHASHI: Yamato Hirai used to
struggle to get into the starting
line-up when he arrived at his local
football pitch to play alongside his
fellow Japanese-Brazilians. These
days however, there are barely
enough players for a game. Many of
those who made their home in
Japan have upped and left, off to
seek their fortune in booming Brazil
while the world’s number-three
economy stutters. Football and its
five-a-side variant, futsal, have
helped bind Brazilians in Japanmost
of whom are offspring of
Japanese who migrated to Brazil in
the 20th century-in a pastime that
honors the heritage of their homeland.
But in cities like Toyohashi in
Japan’s industrial belt, the beautiful
game is becoming ever rarer
because of the exodus of people
like Hirai, who came to Japan two
decades ago as a second generation
Japanese-Brazilian. Every
Wednesday evening after work,
Hirai takes his 14-year-old son
Yosuke to a futsal pitch in Toyohashi
to train for weekend matches. “On
some Wednesdays, not enough of
us show up. Or we’ve got 10 players,
just enough to train,” said the 48year-old
manager of an employment
agency, recalling how there
used to be 30 players on his team.
“This is happening because there
are far fewer Brazilians living here.”
Over the last four years the number
of Brazilians in Toyohashi, some
250 kilometers southwest of Tokyo
and a major centre for Toyota and its
subcontractors, has halved to
around 7,000. Japanese migrants
began crossing the Pacific in large
numbers in the early 20th century,
with Brazil welcoming its first settlers
in 1908, where they worked on
coffee and other plantations after
the abolition of slavery. Despite the
often low wages and poor working
conditions, the community grew
into the largest Japanese population
outside of Japan.
According to the Brazilian
Institute of Geography and
BUENOS AIRES: A tanker truck waits to download gasoline at the headquarters
of the Argentine Automobile Club in Buenos Aires. —AFP
Statistics, there were between 1.4
and 1.5 million people of Japanese
descent in Brazil as of 2000. Japan’s
rapid economic growth of the 1970s
and 1980s provided a tempting reason
for many in the community to
reverse the journey their ancestors
had made, settling in industrialized
cities like this one where they established
Portuguese-speaking communities.
People came with big dreams-
”Twenty years ago, the costs of living
in Brazil were still low as
opposed to the high wages earned
in Japan,” said Toyohito Tanabe,
director of the Brazilian Association
of Toyohashi. “So, many Brazilians
would save money here and buy
houses in Brazil,” the 43-year-old
added. “Even doctors would open
their own clinics after working in
Japan for a few years. Back then,
people came here with big dreams
and goals.”
A famous example of such ties lies
in former Japan international footballer
Marcus “Tulio” Tanaka, who
25 BUSINESS
was born in Brazil to parents with
Japanese, Brazilian and Italian heritage
before moving to Japan as a
teenager. The Brazilian population in
Japan expanded rapidly after 1989
when the Tokyo government abolished
an entry limit on Japanese-
Brazilians, up to the third generation,
to make up for Japan’s own shortage
of labor. It topped 300,000 in total for
four years until 2008 when the global
financial crisis felled Japan’s exportdriven
manufacturers.
The number has since slumped to
touch 210,000 at the end of 2011.
But even with the dramatic fall-off,
Brazilians remain the third biggest
ethnic minority group in Japan,
behind Chinese and Koreans. Over
the last few years, many of those
who came to Japan to seek their fortune
have found a force pulling them
back across the Pacific, as Brazil’s
economy races ahead. “Brazil is getting
stronger,” said Japanese-
Brazilian Michio Hirota, 46, who runs
an employment agency in
Toyohashi, adding he is ready to
move country. “Its economy is growing,
and there are jobs and business
opportunities. That’s why I plan to
THURSDAY, APRIL 19, 2012
Japanese-Brazilians go ‘home’ to tap economic boom
Spain warns Argentina
over Repsol takeover
MADRID: Madrid has threatened to retaliate
after Argentina announced it will expropriate
a subsidiary of Spanish oil giant Repsol, warning
the move breaks a “good understanding”
between the countries. Spain will take “all
measures it considers appropriate” to defend
the interests of Repsol and Spanish businesses
abroad, Industry Minister Jose Manuel
Soria told a news conference Tuesday. Spain
is considering action on diplomacy, trade,
industry and energy, he said, without giving
further details.
The government backed the company,
which says it will take legal action after
Argentinean President Cristina Kirchner
announced she would nationalize Repsol’s
YPF subsidiary. The European Union warned
Buenos Aires that it was sending the wrong
signal to investors, who dumped Repsol
shares, sending them 6.06 percent lower on
the Madrid stock exchange. In New York, trading
in YPF remained suspended for a second
day Tuesday. Argentina’s decision to take a
51-percent stake of YPF virtually wipes out
Repsol’s 57.4-percent holding. US credit ratings
agency Moody’s downgraded YPF to B3
from Ba3, warning that a further downgrade
was possible.
It said the decision reflected “uncertainty
regarding how the government will manage
YPF, including uncertainty regarding the
company’s future operating and financial
profile.” Repsol executive chairman Antonio
Brufau said Argentina’s move “will not remain
unpunished.” Repsol would seek an amount
at least equal to the value of its stake, which
the firm estimates at $10.5 billion, the Repsol
chief said. “Repsol will launch all legal actions
that are within its reach,” Brufau vowed, saying
he had a wide range of options including
constitutional, commercial and civil actions to
counter the “manifestly illegal and gravely
discriminatory” move.
Spain’s government summoned
Argentina’s ambassador, Carlos Bettini, for the
second time in five days to ask why Buenos
Aires had ignored warnings against intervening
in the Repsol subsidiary. “Argentina has
shot itself in the foot in a serious way,” Foreign
Minister Jose Manuel Garcia-Margallo told
reporters. “What worries me is that this
means a cut, or at least distrust, in relations
that have been really fraternal for a very long
time,” he said. Speaking in Mexico, Spanish
Prime Minister Mariano Rajoy said the “decision
breaks the previous good understanding
between the two countries.” It was a “negative
decision ... without justification,” he told the
World Economic Forum on Latin America.
Later Tuesday, Argentina’s deputy economy
minister Axel Kicillof, who helped mastermind
the takeover, accused Repsol’s chief of
running up its debt. Kicillof, speaking to lawmakers,
said Brufau had hidden the actual
value of the company, after incurring about
$9 billion in debt. “He who speaks about
excellent management owes $9 billion.
Sometimes he hides the debt with investment.
Brufau told us he does not have the
money to invest. Where did they put it that
they do not have it?” Kicillof said. The proposal
for the takeover of YPF is to be debated
next week in the Senate, where the ruling
party holds a majority, as well as in the
Chamber of Delegates. Mexico’s President
Felipe Calderon has offered strong support to
Spain. Mexican state oil company Pemex has
a 9.5 percent stake in Repsol. Meanwhile,
European Union foreign affairs chief
Catherine Ashton said Argentina’s move sent
a “very negative signal” to global investors
and was a cause of grave concern. Britain
vowed to back Spain and warned Argentina
that its efforts to stimulate a trade surplus
through protectionism were counterproductive.
Repsol has denied Argentine accusations
that it had failed to invest enough in YPF, saying
that it had poured $20 billion into YPF in
addition to $15 billion it paid to buy the subsidiary
in 1999. Repsol boss Brufau accused
Kirchner of taking the decision “as a way of
hiding the economic and social crisis which
Argentina is suffering.”
Brufau said YPF accounted for 25.6 percent
of the group’s operating profit, 21 percent
of its net profit and 33.7 percent of its
investments, adding: “These are big figures
but we can withstand them.” Front page
headlines in Spain lambasted the Argentine
takeover, many of them splashing a photograph
of Kirchner announcing her decision
with a picture of Evita Peron, the populist first
lady of Argentina in the 1940s and 50s, in the
background. “Pillaging,” headlined an editorial
by the leading daily El Pais. “The expropriation
of 51 percent of YPF opens a conflict that
will have grave consequences for Argentina,”
it said. —AFP
Britain’s unemployment falls
LONDON: The number of jobless Britons fell
in the three months to February, marking the
first quarterly decline in almost a year, official
data showed yesterday. The Office for National
Statistics (ONS) said in a statement that the
number of unemployed fell by 35,000 over the
period to 2.65 million people. That was the
first quarterly decline since the three months
to May 2011. The unemployment rate stood at
8.3 percent, down from 8.4 percent in the
three months to January. Market expectations
had been for no change.
The ONS also revealed that the number of
people claiming jobless benefits rose in March
by the smallest monthly amount since
December. The so-called claimant count of
people registered for unemployment benefits
increased by 3,600 in March from February to
1.61 million. However, that was the highest
total since October 2009. “The latest jobs data
are relatively encouraging overall and supportive
to hopes that the economy has
returned to underlying modest growth,” said
IHS Global Insight economist Howard Archer.
But he added that the labor market would
deteriorate further before showing more signs
of improvement. “Despite the improved overall
tone of the latest data, we still expect
unemployment to head higher over the coming
months come as economic activity
remains limited overall, business confidence is
fragile and public sector jobs are pared,”
Archer said. “Furthermore, current high oil
prices are currently increasing the pressure on
companies to limit their total costs by containing
their wage costs, be it through holding
down pay or keeping their labor forces as
tight as possible.” —Agencies
LONDON: Tesco, the world’s No 3
retailer, slashed expansion plans
for its main British business and
said it would spend over 1 billion
pounds ($1.6 billion) on improving
existing stores as it battles to
recover from a shock profit warning.
The group also said yesterday
it would rein in store openings at
its loss-making US chain Fresh &
Easy, pushing back the moment
when it expects that business to
break even. But it rejected calls
for a more radical shake-up, after
some investors urged it to pull
the plug on Fresh & Easy, as well
as its banking business, which
has been hit by delays.
“I’m announcing today our 1
billion pounds plan to put the
heart and soul back into Tesco,”
Chief Executive Phil Clarke told
reporters after the group reported
a small full-year profit rise that
met market expectations. “The
plan isn’t radical, isn’t a radical
change of direction, but it’s a radical
change of pace,” he said.
Once one of the most consistent
British companies in terms of
earnings growth, Tesco stunned
investors in January with its first
profit warning in over 20 years,
saying it needed to invest heavily
to stem a steady decline in UK
market share.
Many European retailers have
been struggling as shoppers’ disposable
incomes are squeezed
by higher prices, muted wages
growth and government austerity
measures. Tesco, which
accounts for about one in every
10 pounds spent in British shops
and makes over 70 percent of its
trading profit there, has suffered
more than rivals like Sainsbury
and Asda in part because it sells
more discretionary goods like
homewares, where shoppers
have been cutting back most.
Clarke, a Tesco lifer who as a
youth stacked shelves at his local
store, took over from long-serving
predecessor Terry Leahy in
March 2011. He said the UK business
needed more staff, smarter
stores, lower prices and better
products.
While focusing on improving
its existing shops and growth
areas like online shopping and
convenience stores, Tesco said it
would rein in its expansion, particularly
of large out-of-town
hypermarkets, opening 38 percent
less selling space in Britain
in its 2012-3 financial year than in
2011-2. That would help to
reduce capital spending for the
group as a whole to 3.3 billion
pounds from 3.8 billion in 2011-
2. Tesco shares, down 22 percent
over the past six months, were
up 0.5 percent to 330 pence by
0950 GMT, outperforming a flat
European retail sector, as analysts
expressed relief that there had
been no second profit warning.
SHOULD HAVE BEEN BOLDER
But some analysts said Tesco
should have been bolder and a
recovery could take years given a
weak starting point, a tough economic
backdrop and modest
results from early store revamps.
“There is a lot of things listed ‘to
do’ and doing them will by definition
take time,” said Shore Capital
analyst Clive Black, who thought
the group should stop all new
store openings in Britain for
go back and try my luck back in my
own country, because Brazil is a
country of the future.” —AFP
ARLINGTON: A bottle of Coca-Cola is pictured as people have lunch
at a shopping mall in Arlington. Surging sales in emerging markets
like India, China and Brazil gave earnings at Coca-Cola a solid
boost in the first quarter. Net income for the quarter to March 30
was up 8 percent to $2.07 billion from $1.92 billion in the year-earlier
quarter. —AFP
Tesco focuses on revival,
curbs Britain’s expansion
NEW YORK: Top chipmaker Intel Corp posted
earnings confirming the PC industry is
alive-but not kicking-and said sales would
accelerate in the second half of the year with
a powerful new PC processor. In a first-quarter
earnings report that did not inspire
investors to push Intel’s recently high-flying
stock further, the company also said costs
associated with ramping up new production
lines would hurt gross margins more than
expected. “It’s not that they disappointed,
they just didn’t give us the bull case. In previous
quarters they blew the numbers out of
the water,” said Patrick Wang, an analyst at
Evercore Partners.
The long-time technology bellwether is
ramping up production of its newest PC
processor, codenamed Ivy Bridge, which is
expected to drive sales later this year and
power a new crop of super-thin laptops
dubbed “ultrabooks.” But the costs of
upgrading the factories where the chips are
being made is temporarily hurting margins,
Chief Financial Officer Stacy Smith told a
conference call. That was bad news to Wall
Street, which has pushed shares of Intel 17
percent higher so far this year.
Shares up 0.5 percent
three years while it sorts out its
problems. Jon Copestake, retail
analyst at the Economist
Intelligence Unit, also questioned
the level of investment in Britain.
“Global competitors have
recently set their sights on new
markets in Asia, Sub-Saharan
Africa and Latin America, with a
special focus on easing restrictions
in India. Some may ask
whether 1 billion pounds might
have gone further in these markets,”
he said. Clarke said the 1
billion pounds included around
400 million in capital spending
and part of the 500-millionpound
price cutting campaign
launched last September-the “big
price drop” dubbed the “big price
flop” by analysts. The group
would revamp 430 British stores,
or 25 percent of its UK selling
space this year, improving their
look and feel with warmer
colours, better lighting and signage,
Clarke said.
Since the January profit warning,
Clarke has announced plans
to hire 20,000 more staff in Britain
and relaunched the firm’s budget
food range. In March he also jetti-
soned the head of the UK business
to take control of the turnaround
plan himself. Analysts said
he faces an uphill struggle, pointing
to the repeated failures by
France’s Carrefour - which is
Europe’s biggest retailer and even
more exposed to out-of-town
hypermarkets - to turn itself
around. Espirito Santo analysts
described as “underwhelming”
results from Tesco’s revamped tri-
LONDON: A man loads items into his car outside the Tesco Extra superstore in north London. —AFP
“They had strong execution for the most
part, and in-line expectations for the PC market.
But from a investor standpoint you have
a multi-year high stock price, very much
priced for perfection. That gross margin
guidance, while understandable, was not
perfection,” said Cody Acree, an analyst at
Williams Financial Group. Intel said non-
GAAP gross margins in the second quarter
would be 62 percent, plus or minus 2 percentage
points, down from 64 percent in the
first quarter. Intel’s full-year gross margin
forecast of 64 percent was unchanged.
BANKING ON ULTRABOOKS
Shaky economies in Europe and the
United States, a growing consumer preference
for tablets, and a recent shortage of
hard drives due to flooding in Thailand last
year have taken a toll on the PC industry.
Demand in China and other emerging
economies has helped sustain growth, and
CFO Smith said business would pick up more
as the industry recovers further from the
hard-drive shortage and PC manufacturers
replenish low component inventories. “As we
ramp Ivy Bridge and people gear up for
al stores showing a 1.2 percent
improvement in like-for-like sales
versus a control group.
Tesco, with over 6,000 stores in
14 countries, said profit before
tax and one-off items rose 1.6
percent to 3.9 billion pounds in
the year to Feb. 25, 2012, in line
with forecasts. Trading profit in
Britain fell 1 percent, with sales at
stores open over a year down 1.6
percent in the final quarter.
Losses at Fresh & Easy narrowed
for the first time since its launch
in 2007 by 18 percent to 153 million
pounds, but Tesco said it now
did not expect the chain to break
even until its 2013-4 fiscal year,
compared with the end of 2012-3
previously. —Reuters
Intel eyes sales pickup, but investors cautious
these really capable ultrabook sales in the
last half of the year, you’ll start to see them
refilling their pipelines with new products in
the back half of this year,” Smith told Reuters.
Intel is heavily promoting ultrabooks,
which it hopes can stand up to the likes of
Apple Inc’s Macbook Air, with some of the
technological chic the iPad and other tablets
epitomize. Some investors are concerned
that expensive components used in them,
like solid-state drives, make them too pricey
for many consumers. Wang and other analysts
speculate Intel may have to sacrifice
profit margins on sales of its processors to
help make ultrabooks affordable. Intel says
manufacturers are finding ways to bring
down costs of ultrabooks, and CEO Paul
Otellini told analysts on the call he was confident
of the chipmaker’s previous prediction
the new light-weight PCs would account for
40 percent of all notebook sales by the end
of the year. “I’m still very confident we can
do that. All the signs are tracking there.
Everything we’ve looked at since we first
gave that number has gotten more positive,
more designs, better price points,” Otellini
said. —Reuters