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Economy

From the cardboard industry, Japan's economy looks 'golden'

Bellwether material is in for a record-setting year, industry exec says

| Japan

TOKYO -- One way to gauge a country's economy is to look at cardboard demand, since it is an indicator of trade and commercial activity. In Japan's case, demand is surging, thanks in part to a rapid increase in online shopping. 

Kiyoshi Otsubo, the chairman, president and CEO of Rengo

Kiyoshi Otsubo -- the chairman, president and CEO of Japanese cardboard producer Rengo -- recently told The Nikkei that he expects record-setting demand this year.

Q: How do you assess Japan's economy?

A: The cooperative structure put in place by Prime Minister Shinzo Abe and Bank of Japan Gov. Haruhiko Kuroda has worked well to some extent. Japan has entered a so-called "golden cycle," where the economy's long-, medium- and short-term trajectories are all upward. My opinion is similar to that of economist Yuji Shimanaka [who says Japan is in a golden cycle that started in 2013]. 

Q: How about the global economy?

A: I think China's economy has improved markedly. Many critics say the Chinese economy needs to be watched closely, but it is expected to continue growing at an annual rate of nearly 7%.

The U.S. economy is not doing that badly, despite the controversy surrounding President Donald Trump. The cardboard industry is enjoying the first boom in a long time. Things are also better in Europe.

However, politics and societies are in total chaos. I like to use the term "VUCA," which stands for volatility, uncertainty, complexity and ambiguity.

Q: What about personal consumption trends?

A: Japan's personal consumption is recovering, despite a falling birthrate and an aging population. Cardboard demand is expected to hit a record 14.1 billion sq. meters this year.

Q: What do you make of rising containerboard exports?

A: Japanese makers can produce about 10 million tons of containerboard a year. With the country's total demand falling below 9 million tons, some containerboard manufacturers are exporting to keep their machinery moving.

Meanwhile, we supply containerboard to plants overseas. So [the increase in exports] reflects these two factors. 

Q: How serious is the cardboard industry's labor shortage?

A: Managers at smaller cardboard manufacturers say it is very hard to attract talent, but that is because these companies have been unable to pay adequate salaries or create a favorable working environment.

We have shared some of our methods for improving productivity, but some companies cannot simply do the same thing. Therefore, [the reorganization of domestic cardboard makers] will continue.

Interviewed by Nikkei senior staff writer Shigeru Seno

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