The PanaHome Corporation has been pursuing ideal housing with a constant focus on energy sustainability and the environment, aiming to position itself as the number one green innovation company in the Japanese housing sector since 2006. President and CEO of PanaHome Yasuteru Fujii explains how the company’s eco-friendly ethos and focus on quality lifestyles is to expand its brand internationally.
What would you say has been the impact of Abenomics on the construction and housing sector, and indeed on PanaHome specifically?
First of all, I believe that the mainstream view among those of us involved in the Japanese economy is that there has not been a real feeling and realization of a direct effect by Abenomics.
If I had to raise two effects of Abenomics, first is that the yen has been weakened due to the monetary easing policy. Due to the weakening of the yen and having the very strong yen come down to an appropriate level, it has enabled trade and exports/imports with overseas to be more activate, and it has spurred Japanese companies to pursue more global operations as well as to take on new challenges domestically.
On the other hand, there has been an effect on assets, as stock prices have gone up and the price of land has gone up. This has encouraged consumers to spend and has encouraged this new mindset of spending, especially with the people who have a certain amount of assets. They’re building new homes and purchasing luxury items. There has been a certain amount of stimulation to consumers.
There’s also a secondary effect thanks to a rise in consumer activity of inbound visitors because of the weakening Japanese yen. There are much more tourists coming to Japan, particularly from China, and they’re visiting all over Japan, so tourist spending is on the rise.
From those of us that are within the economic or industrial world, we feel that there has not been enough done with the third arrow, which is deregulation and regulation reforms. Because this has not yet been reached to the full, our business opportunities have still been limited. Thanks to the ratification of the TPP there are great hopes for us that this will change.
You just set up operations in Singapore. What opportunities do you maybe see within the TPP for PanaHome in the Asian-Pacific region as you continue to grow?
I don’t feel that there will be much direct impact because with residents, we can’t export their homes abroad. For the TPP within Asia, the countries that will be joining are Vietnam, Singapore, Australia and Japan.
Within Asia it is currently just Vietnam and Singapore, two countries that are participating. With Asian countries planning to become a single entity, a kind of economic community, countries such as Malaysia, Indonesia and Thailand are discussing and looking to join the TPP as well. If that is realized I believe that the economic level of Asian countries will rise. Once that is realized, we have set up a sort of supervisory subsidiary in Singapore, so we expect to be able to help fulfill the new demands that will be coming from Vietnam, Indonesia, Malaysia and Thailand.
When we talk about the property industry or the housing industry, it’s not just the housing developments themselves, but the various electrical equipment that is involved. Really the housing industry is an amalgamation of various industries. With the Asian market increasing there are a lot of positive expectations for various Japanese companies.
Of course, PanaHome aims to become the number one green innovation company in Japan and indeed Asia-Pacific’s housing sector. Can you outline how you plan to achieve this, and why environmentally friendly and energy efficient policies are so important to the future of PanaHome? Why are you so passionate about this?
First of all, within the Japanese housing sector our objective since 2006 has been to become the number one contributor to the environment. Within this objective, since 2009 we have embarked on building a sustainable city in Fujisawa, as you can see here. We’ve been able to reduce carbon dioxide emissions by 30% and have succeeded in creating innovative city planning. We were working under a unified slogan for the whole Panasonic group, which is to become an innovator in environmental issues.
We have extended our concept, first starting from a single electrical appliance, then expanding that to the total house, then expanding that to the whole city planning. That is how we have managed to create this innovative city, and these are the activities we’ve been doing in Japan.
We at PanaHome, as the housing company of the Panasonic group, cannot think about just creating the box or outer frames when beginning our operations in the Asean market.
Why do you think housing can provide solutions to some of Japan’s most difficult problems, and how is PanaHome doing that?
Let me just make it simple in the beginning that Panasonic is a company that manufactures appliances like televisions, audio equipment, washing machines and refrigerators, and we at PanaHome we are developers of housing.
Within this Panasonic group the objective of our company is not to simply build homes. What we aim to think about is within the household you have the family, then within that family unit each individual has their lifetime to live. Our corporations are based on the objective of improving the value of these individuals’ lifetimes.
From that perspective we do not end our business once we’ve built the homes. We are part of improving peoples’ value of their life throughout the various stages of their life. For example, we offer options to remodel their homes once they’re in different stages of their lives, or create facilities for the elderly which will provide nursing care. We believe that our opportunities come from improving the quality of life for peoples’ various life stages. For each of them we propose a means for people to live in the most optimally harmonious way with the environment.
If you think of a person’s life stages as a horizontal axis, we aimed as Panasonic group to provide products and services at various stages of that life, becoming the vertical axis on that graph. Each of those vertical points will provide the group with business opportunities.
I believe it is quite rare in the world for the electrical company to have a housing business within. As we foray into Southeast Asia I believe that our strength is that we’re able to expand as a whole group.
So the magic number for PanaHome’s energy efficient homes is zero in that energy consumption. In fact when you count the amount of energy that the residents can sell back to the grid, the forecast and projections are that they’ll earn about 60,000 yen per year. Is this the future of Japan, and indeed the world’s homes?
I certainly believe that it will. As you know Japan is suffering from a low birth rate and high aging, so the total number of housing is expected to decrease. Within that environment if we are to build new buildings they must be environmentally friendly as well as contribute to increasing the value of peoples’ lifetime. In order to achieve that I believe that this net-zero housing is the way, and that it will even provide us with income due to these energy savings, so this is a new business model within the home that we can propose. I believe that this will become the standard of housing in Japan.
In Japan you enjoy strong brand recognition, but as you grow internationally what do you want the PanaHome brand to signal to your clients? Are you using your Japanese roots as a brand in itself to symbolize or embody excellence, high quality, high efficiency?
When you speak globally, it encompasses Asia, Europe, the Americas, so it’s difficult to say everything unilaterally.
Especially with housing, which must be rooted and adapted to the local climate and culture. I believe we can’t simply impose a universal method onto all of our global operations. Even amid that I believe that the only pillar that may be universal in creating a global brand for us is that we are an eco-conscious company and that we contribute to the global environment. As PanaHome we are thinking of prioritizing countries in the Asian region because of their similarity to Japanese culture and climate.
What is required of us for our Asian operations and what we believe are the dreams for Asian consumers with their homes, is to provide quality and sustainability. In addition, we need to realize a way to improve their lifestyles and quality of living in a way that is suited to their region.
In Japan we’ve been using the PanaHome brand for 50 years, so it’s well known to the public, but abroad that is not the case, so we began using the Panasonic brand abroad. By adopting this Panasonic brand we’re expecting that the customers will be able to get the good image that they have of Panasonic which will help us provide housing for them. We started rebranding Panasonic internationally from April.
What final message would you like to send to the leaders of the G7 who will be reading this report? What would you say is the new brand of Japan as it leaves behind two decades of poor economic growth and deflation?
I believe that there’s been a change of mindset among the various Japanese companies and manufacturers to showcase their strength with confidence.
I think that an important element to this is that after experiencing the great East Japan earthquake and suffering the pain of this, Japanese companies and Japanese people have transformed themselves from this attitude of being overly confident or taking things for granted.
After this event I believe that the world has started to reevaluate and appreciate the Japanese strengths more correctly. As Japanese, we feel this appreciation. We are more encouraged to develop our presence in Asia and have the confidence to be able to propose solutions that are unique thanks to the Japanese strengths. This is a change in mentality for us.
As we look to begin operations in Malaysia, Indonesia, Vietnam and Thailand, I’m starting this venture with my passion and desire to contribute to raising the quality of living for each of the individual people in these countries.