Companies going all-out in English

by Keisuke Okada

Enhancing employee English-language skills has become a high-priority management challenge for Japanese corporations, regardless of their size and industry.

This is especially true for companies whose survival hinges on developing new customers or clients in foreign markets. They are focusing in particular on fast-growing Asian economies, where English is becoming the common means of communication.

“We can no longer depend solely on domestic demand, which continues to shrink, reflecting the eroding competitiveness of the Japanese manufacturing sector,” said Keiji Nosaka, a senior executive of Nosaka Denki Co., a small metal plating factory in Ota Ward, Tokyo. “To stay afloat, we are looking for new customers in Southeast Asia.”

Nosaka’s firm specializes in the production and installation of highly advanced plating and surface-treatment equipment. For many years, the domestic market made up the vast bulk of its sales. Only occasionally were its machines exported for installation at Japanese client plants in Southeast Asia.

In 2002, the firm set up a subsidiary in Bangkok, primarily to provide maintenance services to users of its equipment. Due to the continued decline in domestic demand and the dim prospects for it ever picking up, Nosaka Denki ventured into full-scale local production by building a large factory that began operations in April 2008 in an industrial park in a Bangkok suburb.

“Formerly, our primary customers were Japanese-affiliated companies operating in Thailand. Now we are set to sell our locally manufactured machines to local businesses in Vietnam, Laos, Malaysia, Bangladesh and Pakistan from our production base in Thailand,” Nosaka said.

“Overseas sales will most likely surpass our domestic sales next year,” he said.

As part of the plan to expand abroad, the firm is out to make its Japanese employees, especially engineers and technical staff, acquire minimum English-language skills to communicate with its local employees in Thailand, which now total about 40, or more than twice the workforce at its Tokyo factory.

Since February, Nosaka himself and his 10 employees, mostly staff at the engineering division at its Ota Ward factory, have been attending a two-hour English-language lesson once a week after work. They are learning fundamental grammar, basic business English and technical writing from an instructor dispatched from an English-language training institute.

Fuji Furukawa Engineering & Construction Co., a midsize general engineering contractor headquartered in Kawasaki, is another firm looking to expand in Asia.

Overseas sales made up only 5.3 percent of the company’s total in the business year ending last March. But top management is planning in its midterm business plan now being compiled to expand operations centering on Southeast Asia.

“In the midterm business plan, the company is set to boost overseas sales to ¥10 billion, or 10 percent of the targeted annual sales of ¥100 billion,” said Eiki Ueno, senior general manager of sales at Fuji Furukawa’s global business headquarters.

The firm’s consolidated annual sales in the current business year are projected at ¥58 billion, according to its latest official projection at the end of October.

Fuji Furukawa currently has operations in Thailand, Vietnam, the Philippines and Taiwan. Its Thai operations date back more than 40 years. The Cambodia branch was launched last year, followed by another in Malaysia just recently.

President Fumiaki Koike said, however, that the company has been too timid toward developing business overseas. But because the domestic market for plant and equipment engineering work will continue to shrink, he said the firm must shift to “attack mode” overseas by spreading the customer base from Japanese-affiliated corporations to businesses in Southeast Asia.

“These days, our engineers are given frequent assignments to go abroad and oversee the installation of equipment at plants or offices,” Ueno said.

Out of necessity, the company in spring 2009 launched an English-language training program targeting veteran engineers in their 40s and 50s suffering from “English-phobia,” Ueno said.

Once a week for two hours, about 40 employees attend one of four classes based on their level of English proficiency. Four instructors — two Americans, a Briton and a Filipino — are dispatched to the classes from an English school. They cover topics ranging from telephone conversation and discussions in conferences to writing e-mail and preparing contracts.

“To double our oversea sales, we must at least double the number of engineers and other staff who have practical English-language skills,” Ueno said.

Meanwhile, communicating in English with foreign colleagues is now a matter of daily practice for employees at many globalized Japanese corporations as their foreign staff increases.

Panasonic Corp. plans to hire about 1,100 foreigners worldwide in its fiscal 2011 recruitment program, compared with only 290 Japanese under its conventional hiring of graduating university students here.

“The quota for what we call our global employment scheme is likely to keep on increasing in years to come as the globalization of our operations continues,” a Panasonic representative said.

To make sure newly hired young employees become “globalized” quickly, some corporations are introducing unique training programs.

At electronics giant NEC Corp., 30 to 40 young employees in their second year of employment are chosen and assigned to work at the firm’s branches in Africa, South America and Southeast Asia for a year or two under a program it has dubbed Global Track to Innovators.

The program, launched in 2008, is aimed at fostering personnel capable of exerting leadership in the global business environment. A senior NEC official said the program is having visible effects on the participating employees.

“In a matter of several months, their eyes begin to sparkle, and many begin to gain confidence in themselves. Some even become able to make a presentation in English, while others succeed in obtaining actual orders from local clients,” he said, adding it is too early to predict the program’s long-term impact on the company.

NEC might be outshone by Yazaki Corp., a global leader in manufacturing wire harnesses and other automotive parts. It encourages new hires to spend a year abroad wherever they want and do whatever they want, before they are officially accepted as an employee.

With this program, the company expects prospective employees to acquire foreign-language skills and the ability to adapt to different cultures. According to a Yazaki spokeswoman, 1,214 prospective employees have participated in the program, experiencing expatriate life in 35 countries since the program began in 1993.