Foreign Companies Optimistic about Kobe’s Future
This is the third installment of a five-part series on the aftermath of the Great Hanshin Earthquake.
By Kiyotaka Shibasaki
and Brian Covert
Daily Yomiuri Staff Writers
KOBE — Following the devastating Jan. 17 earthquake, many people wondered how it would affect foreign companies operating in the city. However, most foreign companies operating in Kobe are optimistic about the future of the city, a major business center and tourist spot in the Kansai region.
“We have been a Kobe-based company for 70 years and we would very much like to remain that way in the future,” said Nestlé K.K. President Hans Klett.
Nestlé is the largest and longest established overseas company in the Kobe area. The Swiss food company is the second-largest corporate taxpayer in Hyogo Prefecture at about ¥28 billion, following Kobe Steel. Nestlé’s two main offices in the central Sannomiya district were destroyed and the firm suffered a ¥2 billion loss.
But its Awaji Island factory, located southeast of the quake epicenter, was only slightly damaged and soon resumed operations.
After the quake, most of Nestlé’s 800 Japanese and foreign employees were relocated to its Himeji factory and to Osaka and Tokyo outlets. But this is a temporary measure, Klett said, and Nestlé is looking for new office space in or around Kobe in order to resume operations in three months.
Proctor & Gamble Far East is another major employer of Japanese and foreigners in the Kansai region that hopes to play an active role in rebuilding Kobe.
“I think we’ve gotten closer to the community than we were before,” P&G Far East President Peter Elsing told the Daily Yomiuri.
John Pepper, president of the American firm’s overall operations, said during a recent visit to Osaka that the company is prepared to donate $1 million in both products and money to the Hanshin community.
About half that amount is to be used as scholarship money for children who lost one or both parents in the quake, he said. P&G employees themselves have raised more than $45,000 for quake victims as of Feb. 10.
P&G came to Japan in 1972. In April 1993, the firm moved its headquarters and technical center from Osaka to Rokko Island in Kobe to oversee its 6,000-employee operation in Japan.
However, the earthquake changed all that. Although none of P&G’s 2,600 employees living in the quake zone were killed, its Rokko Island operations were disrupted and its Akashi plant damaged. Elsing estimates company damage at $50 million, for which the firm has already set aside emergency funds.
Water and gas supplies are slowly being restored in Kobe and transportation and traffic conditions are improving, so Elsing is optimistic that his employees will filter back to work in a matter of weeks.
P&G’s laboratories at Rokko Island will soon be operating, he said, adding that all P&G employees will probably be back at work in Kobe by June 30.
That optimism was echoed by D.R. Reddy, president of the Osaka-based Toyo Kosuisan trading company and part owner of Gaylord, an Indian restaurant in downtown Sannomiya. Most of Kobe’s Indian community sent their families back to India or relocated them to Osaka soon after the quake, he said, but they will probably be back soon. Kobe’s Indian community constitutes a large part of the estimated 1,000 Indians living in Hyogo Prefecture.
“We still believe Kobe is one of the best cities, and we’ll enjoy it even more from now on with the new development” accompanying the city’s rebuilding, he said.
Tourist spots in tatters
Tourism buildings and sites were no exception to the quake’s devastation, and restoration poses another headache for Kobe.
Damaged tourist spots in Kobe range from historical buildings in the former foreign settlement, Buddhist temples designated as important cultural properties and old sake breweries. Meriken Park, Harborland and Rokko Island also were damaged, as were coastal brick storehouses used as restaurants, and ropeway cable lines and stations.
In fiscal 1993, Kobe attracted 27.5 million Japanese and foreign travelers, bringing in an estimated ¥363 billion in revenue during the year, according to the tourism division of the city office.
Among the ravaged cultural assets are the old Ijin-kan (foreign residences) in the Kitano quarter of the city’s Chuo Ward, a popular tourist spot that shows the history of foreign business people’s life in Kobe. All Ijin-kan are now closed because of the quake damage.
“There is no knowing whether and when my house can be repaired,” said Men Gui Ying, a 63-year-old Chinese who owns Monchoko House, a damaged Ijin-kan in the Kitano quarter. “It’s impossible for me to repair my house with my own financial means.”
The quake badly damaged her Ijin-kan and her Chinese restaurant, located near the city office.
The question is, who will pay to reconstruct the Ijin-kan sites?
The Kobe municipal government owns three major Ijin-kan residences: Kazamidori no Yakata (Weathercock House), a brick house built in 1909; Moegi House, a colonial-style house built in 1903; and Rhine House, another colonial residence built in 1915. The chimneys of the houses collapsed in the quake and their walls, ceilings and floors cracked.
The law requires the national and city governments and Ijin-kan owners to cover one-third of the bill each for exterior repairs. But the bill for interior repairs must be paid by private owners, said Toshiaki Sugita, an official of the cultural properties division of Kobe’s Board of Education.
“Some private owners will probably find it financially difficult to restore their damaged Ijin- kan houses to their pre-quake state,” Sugita said.
To help restore the private Ijin-kan properties, he said, it will be necessary for the central and local governments to pay an even greater share of the bill, thus easing the financial burden on private owners.
“Ijin-kan houses are historical structures symbolizing foreign cultures introduced to Japan at the dawn of its modernization,” Katsuhiko Sakamoto, professor of modern architectural history at Kobe Design University, said. “All previous efforts will come to nothing if the damage done to Ijin-kan houses remains unrepaired. This architecture should be passed on to later generations.”
Business can withstand damage
Kobe is home to 51 foreign companies dealing mainly in the production and sales of machinery, electrical equipment, pharmaceutical and medical supplies, and transportation and communications.
According to the Kobe Chamber of Commerce and Industry (KCCI), 23 of the 34 companies it had contacted said they would not move operations out of the city. Five other firms said they would for the time being, while four others would not rule out the possibility of moving out for whatever reason.
In a 1993 KCCI survey, most foreign residents said they lived in Kobe because their companies were based in the city, and they had prior business dealings here. They also cited Kobe’s efficient transportation system, good living conditions and close relations among the city’s foreign communities.
“The image (of Kobe) is very important,” said Seiichiro Kusano, section chief of KCCI’s international division. “Now almost everyone in the world knows Kobe, and it’s a very bad image.”
However, Kusano remains upbeat about the future of the devastated city because it will have learned lessons from the earthquake. “In maybe three to five years, Kobe will be a completely different city: very safe, anti-earthquake, anti-national disaster, a more comfortable place for both foreigners and Japanese,” he said.