Investing in Japan

Regional Information

Kumamoto

“Vibrant Kumamoto, on the Move”

Your Regional Guide: Kyoko Ii

Kumamoto Pref. Concierge

Industrial Recruitment & Location Division, Kumamoto Prefectural Government
6-18-1 Suizenji, Kumamoto-city, Kumamoto Prefecture 862-8570
TEL: +81-96-333-2330 FAX: +81-96-385-5797

Basic Information
Regional Profile
Services for investment in Japan
Available incentives
Living environment for foreigners
Links to Related Websites

Basic Information

Population	1.85 million (2007)
Labor force	1.13 million (2006)
Area	7,405km² (2006)
GDP	5,752 billion yen (2005)
Major industries	Electrical equipment, transportation equipment, food and beverage products, general equipment and metal products
Developing industries	Communications related, Life science
Offices overseas	U.S.A
Offices in Japan	Tokyo/Osaka City, Osaka Prefecture
JETRO office	JETRO Kumamoto Kumamoto-shi Sangyo Bunka Kaikan Bldg. 4F, 7-10, Hanabata-cho, Kumamoto-city, Kumamoto Prefecture 860-0806 TEL: +81-96-354-4211 FAX: +81-96-324-0751 E-mail: kum@jetro.go.jp

Regional Profile

Strength of the region's industries and economy

Kumamoto Prefecture is located at the geographical center of the Kyushu (island) region, with its regional economy boasting total production (GDP) at a scale equivalent to countries such as South Korea or Australia. Corporate clustering from the semiconductor industry is advancing in the Kyushu region, while automakers continue to build bases in the Kita-Kyushu region. With the focus on semiconductor and automobile related industries, in 2006 Kumamoto Prefecture set a new all-time record for manufacturing shipment value. Under the Kumamoto Prefecture Industry Promotion Vision (announced in 2000), the prefecture is advancing strategic regional industry measures based on three “Forest Plans” and four “Promotion Strategies.”

Kumamoto Manufacturing Forest Plan (Drawn up in 2005)
Kumamoto Semiconductor Forest Plan (Draw up in 2003, revised in 2005)
Kumamoto Biotechnology Forest Plan (Draw up in 2005)
Kumamoto Automobile Industry Promotion Strategy (Draw up in 2006)
Kumamoto Solar Industry Promotion Strategy (Draw up in 2006)
Kumamoto Information Service Promotion Strategy (Draw up in 2007)
Kumamoto Health Service Promotion Strategy (Draw up in 2008)

Strength of the region's education/research institutes

Kumamoto Prefecture contains 10 universities, 4 junior colleges and 2 technical colleges, with 42% of the graduates from these institutions majoring in science and technology.Kumamoto University has established the Kumamoto University Cooperative Research Center in Technopolis Center, which is now being utilized as a base for technology development and information exchange with the focus on engineering fields.
Kumamoto Prefectural College of Technology, established inside Semicon Technopark, offers 5 machinery, electronics and information related study courses, and strives to cultivate practical technicians with combinations of advanced skills and knowledge who will be able to immediately contribute on work frontlines.
The Kumamoto Industrial Research Institute functions as the so-called “technical division of prefectural industry” in committing itself to R&D, technical consultations, commissioned testing and analysis and other work. Kumamoto Technology and Industry Foundation, meanwhile, deploys an effective support system for technical development and joint research.

Industry-government-academia collaboration

Industry prioritization is being advanced on the basis of 3 “Forest Plans” and 4 “Promotion Strategies.”

Kumamoto Manufacturing Forest Plan：Using the move to more advanced essential technology in the manufacturing industry to address the expansion in automobiles and other machine industries.
Kumamoto Semiconductor Forest Plan：Mobilizing the cooperation between industry, universities and government in the region to support the fostering of an energetic region in which internationally competitive new technologies and industries, the focus on semiconductor production technologies, will continue to emerge.
Kumamoto Biotechnology Forest Plan：Striving to achieve greater advances for biotechnology in medical care, foods, the environment and other fields with stellar R&D capacity, in promoting redoubled sophistication and clustering by related industries.
Kumamoto Automobile Industry Promotion Strategy：Honda has concentrated its motorcycle manufacturing operations in Kumamoto Prefecture, while automobile production in Kyushu has topped one million units (2006) and other moves are afoot by automakers to accelerate activities there. In response, the Kumamoto Automobile Industry Marketable Expansion Promotion Council has been established and other steps have been taken to resolve issues related to new corporate advances and expanded business transactions by companies in the prefecture. This is indicative of the prefecture’s plan to promote progress in auto-related industries with even greater vigor.
Kumamoto Solar Industry Promotion Strategy：Based on two solar cell production bases and a cluster of semiconductor industry companies, the goal is to aim at the further expansion of the solar industry in Kumamoto Prefecture and proliferation of photovoltaic power generation system to promote industry in the prefecture and make Kumamoto a prefecture truly committed to the environment. Through this, Kumamoto will be able to contribute to vital new national energy measures for Japan.
Kumamoto Information Service Promotion Strategy：Collaboration between the industrial, academic and government sectors will be mobilized to expand the information service industry, targeting the promotion of next-generation economic and industrial progress to address the reforms in industrial structure, ultimately contributing to the progress of the Japanese economy and industry as a whole.
Kumamoto Health Service Promotion Strategy：Use of industry-academia-government cooperation to create scientifically based health services, with companies in the prefecture mobilizing high value-added health services to expand the market scale. This in turn will contribute to raising the quality of life of the residents of the prefecture and to realizing more reasonable healthcare costs.

Strength of the region's infrastructure

Kumamoto Prefecture lies at the geographical center of Kyushu, which is near Asia. Using Kumamoto as a base, therefore, it is possible to engage in business development from Kumamoto or Fukuoka targeting South Korea, Taiwan, China and other Asian countries, as well as other world regions. The prefecture offers an outstanding location for Asian development and production bases targeting the markets of East Asia and China. Improvements in the express highway network links Kumamoto to the major cities of Kyushu in a maximum of around 150 minutes, making this an optimum operational base for production, distribution and marketing.

<Land>

Construction of the Kyushu Expressway and other express highway system improvements now link Kumamoto to the major cities of Kyushu in around 150 minutes.

<Air>

Aso Kumamoto Airport is equipped with a 3,000-meter class runway, with three flights operated weekly to Seoul (about 95 minutes). Travel time from Kumamoto to Tokyo is also 95 minutes (16 flights/daily), while flight time to Osaka is 65 minutes (8 flights/daily), 75 minutes to Nagoya (6 flights/daily) and 85 minutes to Okinawa (1 flight/daily). Service to Kumamoto and Fukuoka, meanwhile, is also operated from Amakusa Airport.
* Connections through Fukuoka Airport (about 1 hour’s drive from Kumamoto) provide links to 21 cities in Japan and 16 cities overseas (as of June 1, 2008).

<Sea>

Operated from Kumamoto Port and Yatsushiro Port is regular international container service that links Ningbo and Hong Kong in China through South Korea's Pusan. The connections through Pusan Port, Hong Kong and Ningbo make it possible to engage in trade from Kumamoto with ports around the world. Container exports and imports, meanwhile, comprise a business that is subsidized for the purpose of promoting greater use. *: By way of Hakata Port (about a 90-minute drive from Kumamoto), access is available to 37 sea routes serving overseas destinations (as of June 1, 2008).

<Railway>

On the “Kyushu Shinkansen”, scheduled to open for service in 2011, the trip between Hakata and Kumamoto will be 35 minutes (currently 75 minutes) and between Shin-Osaka and Kumamoto 3 hours and 20 minutes. The bullet train trip between Shin-Yatsushiro and Kagoshima-Chuo, completed earlier and currently in service, is 35 minutes. Kumamoto Shinkansen Construction Project

Foreign company(s) operating in the industry

Foreign enterprises in the prefecture include manufacturing bases of Teradyne, an international leader in semiconductor test equipment; KLA-Tencor, which makes semiconductor inspection and measuring equipment; Wafer Masters, a Silicon Valley venture business that develops semiconductor manufacturing equipment; Air Liquide Japan, which makes industrial and medical gases; and Greene, Tweed & Co., a leading multinational manufacturer of semiconductor sealing materials.

Company name	Teradyne, Inc.
Industry sector	Electrical measuring instrument (Semiconductor Inspection Equipment)
Date of entry	1990
Motivation for selecting region	Kumamoto Prefecture introduced our company to Kumamoto University and other universities around Kyushu, while the services of “U-turn advisors” (counseling for persons returning from other regions to work in their hometowns) helped make it possible to hire excellent technical personnel. The ability to use rented plants. Locations extremely close to the airport, low housing expenses.
Support provided by local government or JETRO	Introductions to universities and other personnel hiring support.
Comments	“Allow me to explain why we chose Kumamoto, and why we continue to be confident that, to Teradyne, the selection of Kumamoto was a sound decision. First of all, Kumamoto Prefecture did not only stress that it was prepared to accept foreign companies, but also carried out active efforts to attract such firms. The second reason concerns human resource recruiting. One of the major motives in choosing Kumamoto was our thinking that this region would make it possible to hire technicians. From the very start, Kumamoto Prefecture introduced us to professors from Kumamoto University, Kyushu University, Kyushu Institute of Technology. On a related front, Kumamoto Prefecture moved from early on to set up a 'U-turn' center. In other words, the prefecture opened an office in Tokyo, which can be visited by Kumamoto natives who gain employment in other prefectures but want to return to Kumamoto. At this office, they can make contact with prospective Kumamoto employers. Another advantage of Kumamoto, which has provided relief in various meanings of the word, is the low price of our housing expenses for employees. Yet another merit of Kumamoto is the extremely close access to the airport. The airport here is also an international airport, providing fights not only to destinations around Japan but to South Korea and other points in Asia as well. Add to this the fact that Kumamoto is only a 90-minute flight from Tokyo’s Haneda Airport. In a certain sense, therefore, maintaining a base in Kumamoto places us closer to Tokyo time-wise than if we had a business location in other districts around the Kanto region.” (From a March 14, 2000 interview with Richard Dyke, former representative director of Teradyne Inc.)

Company name	WaferMasters Incorporated
Industry sector	Semiconductor Manufacturing Equipment
Date of entry	2000
Motivation for selecting region	Kumamoto has a cluster of semiconductor manufacturers (Mitsubishi Electric, NEC and others), making it an ideal location to undertake joint development of semiconductor manufacturing equipment with users. While the stress is placed on customer service and development, there are local companies with high levels of technology, making consigned production a possibility. We sensed the spirit and drive that people from Kumamoto devote to their work, prompting the desire to use this area as a base for services targeting Asia.
Comments	“Kumamoto has a cluster of semiconductor manufacturers that include Mitsubishi Electric, NEC and other firms, making it ideal for undertaking joint development of semiconductor manufacturing equipment with users. There are local companies in Kumamoto with high levels of technology, and we want to advance consigned production here. Our intent is to make Kumamoto a base for supplying services to Asia.” (From a March 2, 2000 interview with Vice President (currently Chairman) Taro Yamazaki of WaferMasters, Inc.)

Company name	Greene, Tweed & Co.
Industry sector	Sealing materials for semiconductor manufacturing devices and other industrial equipment
Date of entry	September 2004
Motivation for selecting region	Proximity to customers (close to domestic semiconductor manufacturing equipment producers, while Kumamoto Prefecture also offers outstanding transportation access to customers in Asian countries). Expectations to secure the services of high-caliber personnel.
Support provided by local government or JETRO	Searches for foreign employee housing and other detailed support linked to basic lifestyle needs accompanying the launch of local operations.

Services for investment in Japan

Menu of services	Fees charged?	Content of services
Providing market information
Consulting by external experts and advisers	Yes	Advisor introductions at Kyushu Economy International.
Support for establishing a base
Listing of potential customers and partners	No	Supplied through cooperation with companies and universities in the prefecture, Kumamoto Technology and Industry Foundation, Kumamoto Industrial Research Institute, etc.
Listing of potential customers and partners	No	Arranged through cooperation with companies and universities in the prefecture, Kumamoto Technology and Industry Foundation, Kumamoto Industrial Research Institute, etc.
Support for establishing a base
Providing incubation facilities or other facilities	Yes	Techno Incubation Center, Business Incubator 「Dream challenge plaza 21」、Kumamoto University Collaboration Incubator
Providing information on procedures for investing in Japan	No	Investigation and notification of contacts, according to specific needs.
Arranging the meetings needed to establish a base (real estate, manpower services)	No	Arranged by Kumamoto Prefecture Corporate Location Section.
Introduction of available properties and advice on hiring personnel	No	Arranged by Kumamoto Prefecture Corporate Location Section.
Providing information on permits and licensing procedures	No	Arranged by Kumamoto Prefecture Corporate Location Section.
Providing information on subsidy programs	No	Arranged by Kumamoto Prefecture Corporate Location Section.

Support service

<Kumamoto Technology and Industry Foundation (Small and Medium-Sized Enterprise Promotion Center)>
The Foundation has established a system to furnish integrated and consistent support for technology development, joint research, human resource development, market expansion, capital and all other stages of commercialization on the technology and sales front, to assist companies moving to start operation, expand into new fields, carry out management innovation and undertake other challenges. Also provides help in transaction introductions and other phases of business partner searches.

<Kumamoto Industrial Research Institute>
This Institute was established in April 2007 through the merger of the Industrial Technology Center and the Food Processing Research Center, to act as the so-called “Prefectural Industry Technology Division” in advancing R&D, technical consultations, commissioned testing and analysis and other services suited to needs.

Available incentives

Subsidies are available to companies establishing new plants or research centers (or expanding existing facilities).

For semiconductors and 5 pivotal fields (new manufacturing technology, environment, telecommunications, medical services/welfare and biotechnology related), R&D businesses in specified fields and general manufacturing industries with foreign equity exceeding 50%, there are no standards for the value of fixed asset investment or new employees, with subsidies offered under the formula of “investment value×5% + \500,000×new employees” (maximum of \150 million).
For new or expanded plants with investment of \300 million or more and employing 10 or more persons (semiconductors, automobiles, 5 pivotal fields), subsidies of up to \2 billion based on investment scale and employment.

Living environment for foreigners

Living environment	Kumamoto Prefecture is located at the geographical center of Kyushu, and contains two national parks – Aso Kuju National Park (with the majestic Mt. Aso and its world-class caldera) and Unzen Amakusa National Park (made up of 120 islands of various scale) – as well as mountains, seacoast and other beautiful scenery. Kumamoto also contains 8 of the 100 water sources designated by Ministry of the Environment as “famed mineral water”, ranking it as the highest single prefecture in this category. In addition, the crystalline riverbed water of Mt. Aso, which attracted use for a hybrid plant built by major beverage producer Suntory, is an abundant source of natural mineral water that enables some 80% of the tap water consumed by a population of 650,000 (focus on Kumamoto City) to be furnished by groundwater. Kumamoto offers a moderate climate, plentiful water and vast hilly areas, rich history and culture, numerous golf courses and hot springs. “Kurokawa Hot Spring,” in fact, was selected as the spa that most Japanese would like to visit most.
International schools	Although Kumamoto has no international schools, there are international early childhood education facilities that cater to preschool children.

Living environment

Kumamoto Prefecture is located at the geographical center of Kyushu, and contains two national parks – Aso Kuju National Park (with the majestic Mt. Aso and its world-class caldera) and Unzen Amakusa National Park (made up of 120 islands of various scale) – as well as mountains, seacoast and other beautiful scenery.
Kumamoto also contains 8 of the 100 water sources designated by Ministry of the Environment as “famed mineral water”, ranking it as the highest single prefecture in this category. In addition, the crystalline riverbed water of Mt. Aso, which attracted use for a hybrid plant built by major beverage producer Suntory, is an abundant source of natural mineral water that enables some 80% of the tap water consumed by a population of 650,000 (focus on Kumamoto City) to be furnished by groundwater. Kumamoto offers a moderate climate, plentiful water and vast hilly areas, rich history and culture, numerous golf courses and hot springs. “Kurokawa Hot Spring,” in fact, was selected as the spa that most Japanese would like to visit most.

International schools

Although Kumamoto has no international schools, there are international early childhood education facilities that cater to preschool children.