Countries of the World/COUNTRYS.BIN/dp/0200/02000.txt

Text File | 1991-06-25 | 38KB | 594 lines

$Unique_ID{COW02000}
$Pretitle{230}
$Title{Japan
Chapter 4D.   Mining and Manufacturing}
$Subtitle{}
$Author{Stephan B. Wickman}
$Affiliation{HQ, Department of the Army}
$Subject{percent
industry
production
japan
japanese
average
economic
income
nation's
products}
$Date{1981}
$Log{Morning Rush Hour*0200001.scf
Figure 9.*0200002.scf
}
Country:     Japan
Book:        Japan, A Country Study
Author:      Stephan B. Wickman
Affiliation: HQ, Department of the Army
Date:        1981

Chapter 4D.   Mining and Manufacturing

     In 1979 the nation's industrial activities (including mining,
manufacturing, and the power, gas, and water utilities) contributed 32.5
percent of GDP. Together with the construction industry, they employed 34.8
percent of the work force in 1980. Most industry catered to the domestic
market, but exports were important for several key commodities (see table 8,
Appendix). In general, industries having the highest level of exports were
those producing basic iron and steel manufacturers, metal products, electrical
equipment, transport equipment, and precision equipment. Industry was heavily
dependent on raw material imports.

     Industry was concentrated in several key regions. In order of importance
these were the Kanto region surrounding Tokyo, especially the prefectures of
Saitama, Chiba, Tokyo, and Kanagawa (also called the Keihin industrial
region); the Nagoya metropolitan area, including Aichi, Gifu, Mie, and
Shizuoka prefectures (Chukyo-Tokai industrial region); Kinki (also called the
Keihanshin industrial region); the southern part of Chugoku and northern
Shikoku around the Inland Sea (the Setouchi industrial region); and the
northern part of Kyushu (Kitakyushu). In addition the long narrow belt of
industrial centers along the Sea of Japan from Fukui to Niigata, formed the
Hokuriku industrial region; and a number of cities established by particular
industries were mill towns. These latter included Toyota City, in what is now
part of Nagoya, the home of the auto manufacturer.

     The structure of industry altered significantly in the 1970s (see fig.
9). Compared to the 1960-70 period, industries that used raw materials and
energy intensively (pulp and paper, petroleum and coal products, nonmetallic
minerals, and basic metals) tended to increase their capital investments,
while suffering slow output growth. The labor-intensive industries (food
processing, textiles, metal products, general machinery, and light
manufactures) experienced reduced growth and less value-added productivity.
The technology-intensive industries (chemicals, electrical machinery,
transportation equipment, and precision machinery), however, increased their
rates of growth and enhanced their productivity.

     In 1978 MITI and the Ministry of Transportation formed "recession
cartels" to cut back production in a number of declining industries. The
industries affected were those producing electric furnace steel, aluminum,
nylon filaments, polyester filaments, ships, ammonia, urea, and spun cotton.
The freezing of production levels and scrapping of plant and equipment was
expected to continue through the early 1980s.

     The need to replace outmoded or aging equipment was also becoming
apparent. In 1981 the average age of industrial plants was 7.3 years, lower
than the ten-year-old average in the United States, but beyond the legally
acceptable depreciation period for some types of plants. The problems were
greatest for pulp and paper, aluminum, petrochemical, oil refining, and
synthetic fiber manufacturers. The government estimated that the nation would
require an annual increase in new plant investment of 10 percent or more to
reverse the aging trend. Performance in 1980 and 1981, however, failed to meet
this target.

[See Morning Rush Hour: Morning rush hour at Shinjuku station, Tokyo Courtesy
Consultate General of Japan, New York]

Basic Manufactures

     As the coal-mining industry has declined, so has the general importance
of domestic mining in the whole economy. Only .2 percent of the labor force
was engaged in mining operations in 1979, and the value-added from mining was
less than .7 percent of the total for all mining and manufacturing. Domestic
production contributed most to the supply of such nonmetals as silica sand,
pyrophyllite clay, dolomite, and limestone. Among the metals, domestic mines
were contributing declining shares of the requirements for zinc, copper, and
gold. As a result almost all of the ores used in the nation's sophisticated
processing industries were imported.

     Iron and steel production was the largest in the noncommunist world in
1980, second only to the Soviet Union and ahead of the United States for the
first time ever (see Iron and Steel Industry, ch. 5). The government had
promoted the industry heavily during the immediate postwar era, supplying
priority finance, special tax breaks, and research and development funds for
new technologies. Since 1974, however, MITI and the major producers have been
reluctant to expand capacity. The five major integrated steel firms, which
controlled three quarters of the market in 1980, have therefore concentrated
on improving efficiency by replacing outmoded plant and equipment.

[See Figure 9.: Trends in Mining and Manufacturing, 1961-80 Source: Based on
information from Japan, Bank of Japan, Economic Statistics Annual, 1980,
Tokyo, 1981, pp. 247-48, and Economic Statistics Annual, 1971, Tokyo, 1972,
pp. 185-86.]

     The country has been a world leader in adopting two important innovations
in steel making. More than 80 percent of the total output in 1980 was produced
from basic oxygen furnaces, and over 60 percent was made from the continuous
casting process. Each of these processes were fundamentally new technologies
that not only conserved inputs of labor, raw materials, and energy but reduced
waste. Nippon Steel, which produced almost a third of the nation's production,
has added seven continuous casters since 1973 and was adding three more in
1981. Continuous casting has caused the ratio of usable steel products to
crude steel inputs to rise to more than 90 percent, compared with 70 to 80
percent in the United States and Europe. The industry has also been converting
from petroleum sources of energy to coal, and in 1980 twenty-nine of forty
blast furnaces at the largest companies used no oil at all. This reduced the
industry's overall dependence on oil to about fifty-six liters per ton of
steel produced, a 30 percent reduction since 1974.

     The steel industry was, however, characterized by high fixed costs and
unstable demand. The industry depended upon the expansion of the construction,
automobile, and consumer appliance industries to maintain profitability. Since
Japanese employment practices were to avoid layoffs of regular personnel, it
was difficult for the industry to stabilize earnings over business cycles.
Japan's steel firms, moreover, tended to be undiversified. During recessions,
therefore, the companies have turned to vigorous competition in the home
market and to exports to reduce their inventories. At times this behavior has
forced MITI to intervene to reduce price competition at home and to foster
export cartels.

     In the nonferrous metal industry, copper, lead, and zinc smelting, and
the production of wires and cables survived the second energy crisis and
slumping international demand, but the aluminum industry collapsed. Most of
the nation's smelters were in financial crisis because of skyrocketing
electricity costs, but the output remained among the world's highest. The two
major problems faced by the industry were how to secure stable supplies of
ores and how to produce higher value-added products for sophisticated
electronics material and nuclear power generators. The sharp decrease in
aluminum prices on the international market dealt what was perhaps a fatal
blow to that industry in 1980. The importation of cheap ingots forced the
industry to form a "recession cartel" and cut capacity by a