What is wrong with JATECO Company’s business with Central Asian states!? Why Japanese standards of corporate governance and integrity in doing business are earning bad name with JATECO?

 

Japan eyes stronger partnership with Central Asia | The Asahi Shimbun:  Breaking News, Japan News and Analysis

Many people in the world for decades have an established opinion that Japanese big business agglomerates like Mitsubishi Corp., Itochu Corp., Kawasaki Heavy Industries Inc., Sony, Toshiba and many others are the samples to follow in conducting a business with foreign partners, standards to follow in corporate governance and technological spheres, especially in high-tech and IT.

However, the recent events, developments, conflicts and, we may say, even scandals shed a light to the other side of “Doing business with Japan” on the case of well-known Japanese JATECO company in dealings with its partners in Central Asia. For me, to Japanese young business person, it is giving hard time to comprehend the end interests of our Japanese corporation.

Foreign Minister Hayashi and Foreign Ministers of the Five Central Asian countries who hold a joint press conference

Turkmenistan – Failure to meet deadlines and obligations: One of the example – is lack of any progress in implementation of the number of industrial production facilities and supply of Japanese equipment to the following projects in Turkmenistan. It was negotiated during the visit of former Turkmen president, current chairman of Turkmen parliament, Gurbaguly Berdymukhmammedov to Japan from October 25th to September 1st 2022.

It was stated that the following projects will be build:

  • Plant for the production of 300,000 tons of phosphorus fertilizers in the town of Turkmenabat in eastern part of the country;
  • Plant for the production of 640,000 tons of urea and 400,000 tons of ammonia in central part of the country.

At the meeting of the Chairman of the State Concern “Turkmenhimiya” N.Nyazlyev with the head of the company JATECO the two sides negotiated the implementation of these proposals. It is already almost 1,5 years passed since that time. However, despite the archived agreements and advance payments, nothing has been done by Japanese partner JATECO company. Where is the JATECO Co. eagerness to promote Japanese business interests in this regard!?

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Uzbekistan – Failure to meet its payment obligations for supplied goods: In December 2019, Uzbek State company of UZTRADE reached a deal to supply of cotton seeds to JATECO Co. In accordance with the contract, Uzbekistan’s company supplied goods in amount of nearly 0.5 bn. Japanese Yens

Even as of beginning of 2024, JATECO did not paid to Uzbek UZTRADE partners, more than 75 ml. Yens. No matter for the facts and circumstances, contract obligations and its negative impact on trade relations between Uzbekistan and Japan, Japanese company has been refusing to pay its debt for nearly almost 3 years. UZTRADE was burdened by imposed state fines as well as other contractor obligations for another 150 mln. Japanese Yens and currently unable to supply goods to other Japanese contractors because it is prohibited from doing so by existing foreign trade regulation laws of Uzbekistan.

 

One should bear the mind that Central Asian region and its 5 states  are currently a home for almost 75 million population and is considered as one of the fastest growing markets in the world. This region with a rich minerals, like oil, natural gas, gold, uranium, copper, lithium, magnesium and many more others, as well as abundant with various agricultural products.

 

Central Asia is located in the crossroads between South Asia and Russia, Middle East and China, and this, occupies extremely important place in international relations, especially in the time of dynamic changes and fundamental geopolitical transformation on a global level.

Does Japan interested in promoting mutually beneficial cooperation it his regard with states of Central Asia? And why actions of certain Japanese companies, like JATECO Co., should be an obstacle in promotion this kind of cooperation, instead of being a vehicle of mutually beneficial strategic partnership between us.

As for me, I call for keeping high standards of “Doing business – Japan style”, as it used to be and should be kept this way. We ought to have our rising sun flag flying high next to our Friends’ in Heart, Central Asia.

 

T.Honda, Ph.d. in Economics, Japanese Businessman,. Ashkhabad-Tashkent-Tsukuba-Tokyo

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