Chicago Shimpo
Kikkoman’s Walworth Factory Celebrates
45 Years in Wisconsin

Prosperous Relationship with Local Community Continues

• Japan’s major soy sauce maker Kikkoman celebrated the 45th anniversary of its plant in Walworth, Wisconsin on June 8 at The Abbey Resort in the neighboring city of Fontana. The ceremony was preceded by a press conference and a forum, the sixth Wisconsin-U.S.-Japan Economic Development Conference, to discuss economic perspectives in the future.

• Approximately 540 guests joined the celebration, which was hosted by Kikkoman Corporation in Japan and its U.S. subsidiary, Kikkoman Foods, Inc. In addition to Yuzaburo Mogi, Kikkoman Corporation’s Honorary CEO and Chairman of the Board of Directors, the celebration was attended by Wisconsin Governor Scott Walker, Japanese Ambassador to the U.S. Shinsuke Sugiyama, and Consul General in Chicago Naoki Ito, as well as prominent local business leaders and educators.

• Kikkoman began marketing its flagship product in the U.S. in 1957 as a new type of seasoning. Soon, to meet the soaring demand, the company started to look for a location for a production plant in the U.S. After an extensive search, Walworth was selected as Kikkoman’s first overseas production base for its convenient location, ability to supply high-quality clean water, plenty of soybeans, and excellent work force. The Walworth factory began production in 1973.

• Construction of more production plants overseas followed, including those in the Netherlands, Singapore, Taiwan and China, as well as in the state of California. Today, Kikkoman brand products are sold in more than 100 countries, accounting for 60% of total sales and 70% of operating profit.

• During the press conference, Mogi announced that $600,000 in scholarship funds will be provided by Kikkoman to six local high schools in commemoration of the anniversary. The scholarship will benefit the graduating seniors in their pursuit of higher education and career development.

• So far, Kikkoman has donated some millions of dollars to the University of Wisconsin-Milwaukee and other local institutions. At the time of its 40th anniversary in 2013, the company donated $1 million to the university’s laboratory for water quality research.

• In his welcome remarks, Mogi thanked the Walworth community and the state of Wisconsin for their “strong support” over the past 45 years. The partnership that has developed has been precious, and he was “delighted to be able to support deserving students” in the local community.
• Mogi was also honored to sponsor the tripartite conference that day, and noted that the global economy issue is critical for a success of Kikkoman, which operates in more than 100 countries.

• Governor Walker congratulated Kikkoman’s successful 45 years in Wisconsin, as well as Mogi’s “tremendous leadership” in his roles as the chairman of the Japan-U.S. Governors Association and the Midwest U.S.-Japan Association. “We appreciate the positive impact of Kikkoman on Wisconsin as well as the Midwest and nation of Japan,” he praised.
• Growing up in Delavan, near Walworth, Walker remembers the time he sang as a member of a choir at a Kikkoman Foods event.
• Back in early 1970s, there may have been some resistance and misunderstandings among the Walworth county residents, most of them farmers, about Japan and Japanese companies. Then he saw a video made to commemorate Kikkoman’s 40th anniversary. The interviews of the locally hired employees and executives in the video showed how Kikkoman had become a part of the community, he said.
• Walker expects the $600,000 scholarship will have a significant impact on the economy of the region, where most of the children started to go to college for the first time in the 1970s and 1980s.
• Kikkoman serves as an excellent model for Foxconn, a Taiwanese multinational corporation which is scheduled to build a new factory in Wisconsin, and all other foreign businesses that plan to invest in Wisconsin and the U.S., he added.
• Asked about the $1 million donation by Kikkoman to the University of Wisconsin - Milwaukee, Walker explained it had produced some significant results, including the establishment of the School of Freshwater Sciences at the University. There, studies have been conducted on sustainable use and maintenance of water resources, and the findings are being distributed throughout the world by the Global Water Center in Milwaukee.

• Ambassador Shinsuke Sugiyama, who accompanied Prime Minister Shinzo Abe on his June 7 meeting with President Donald Trump, shared his view that the two leaders were absolutely on the same page regarding the summit meeting of President Trump with North Korean leader Kim Jong-un. Abe and Trump also discussed Japan’s investment in the U.S., according to Sugiyama.
• He has arrived in the U.S. as the ambassador in March. Praising Mogi as a “pioneer of Japan’s U.S. investment,” Sugiyama said he was looking forward to traveling around the U.S. to see how much Japanese investment in the U.S. is profiting the U.S. economy as well as the Japanese businesses.

Sixth Wisconsin-U.S.-Japan Economic Development Conference:
“Economic Perspectives for Sustainable Growth, U.S.A., Wisconsin and Japan”

• In conjunction with Kikkoman’s 45th anniversary, the sixth Wisconsin-U.S.-Japan Economic Development Conference was co-hosted by Kikkoman Foods, Inc., University of Wisconsin – Milwaukee (“UW-Milwaukee”) and the Wisconsin Economic Development Corporation (“WEDC”). The conference, entitled “Economic Perspectives for Sustainable Growth, U.S.A., Wisconsin and Japan,” was paneled by Mark Mone, Chancellor of the UW-Milwaukee; Wisconsin Governor Scott Walker; Mark Hogan, CEO of the WEDC; Taichi Sakaiya, author, economist and former Minister of State for Economic Planning of Japan; Mike Laszkiewicz, Vice President and General Manager of Milwaukee-based Rockwell Automation; Toshihiko Fukui, former Governor of the Bank of Japan; Neil Bradley, Executive Vice President and Chief Policy Officer of the U.S. Chamber of Commerce; and Motoatsu Sakurai, President of Japan Society in New York.

• Quoting Mogi, Mark Mone reiterated that “old strategies no longer bring success” in today’s new economic environment, and that “you will be left behind” if you don’t change and innovate. When the rate of change is accelerating across the world, the work force today must be able to adapt quickly, and it requires education to encourage innovative and critical thinking.
• He stressed that advanced skill and emotional intelligence, along with the ability to learn and adapt, can be obtained through work force training.
• The MBA program at the UW-Milwaukee focuses on encouraging innovative, long-term thinking, adaptability, global thinking, problem solving and entrepreneurship, the factors that are prominent in Kikkoman’s corporate culture, Mone said. A total of 184,000 students had graduated from the program, a majority of whom is part of Wisconsin’s work force.
• “It’s widely known that education has an enormous impact on economic prosperity,” Mone said. “Creating partnership with companies like Kikkoman and many others is important in this respect.”

• Mark Hogan explained the two areas of economic development efforts involving international businesses that form the cornerstones of the WEDC mission.
• First is to increase trade activities, specifically for small businesses in the state.
• Wisconsin’s relationship with Japan is significant, Hogan said, as the state’s top five trading partners are Japanese companies. A long and mutually beneficial trading relationship with Japan provides great advantages to businesses that are looking to increase revenues by developing export strategies.
• The second area is direct investment, both inbound and outbound.
• According to Hogan, the WEDC is helping set up direct investment by Wisconsin corporations such as Rockwell Automation and Harley-Davidson, both of which have direct investment in Japan. At the same time, overseas businesses are investing in Wisconsin and prospering. Japanese corporations such as Komatsu and Fuji Film invest in Wisconsin because they “acknowledge the skilled work force in the state.” That is also the reason behind Foxconn’s move to build a factory in Wisconsin.
• “We talk about lifelong relationship, like the one that Kikkoman initiated 45 years ago, which has provided support to thousands of employees and their families, allowing them to pursue their dreams and improving Wisconsin’s quality of life,” Hogan concluded. “We are committed to work with Japan and find new opportunities to build a foundation of a sustainable relationship between the two countries.”

• Governor Walker recalled Wisconsin’s job market 10 years ago, when job seekers, particularly new college graduates, were struggling to find a job in one of the worst recessions, and all people talked about was “jobs, jobs, jobs.”
• Today, with the unemployment rate of 2.8% (a record downturn from 9.3% 10 years ago), the focus is “Workforce, workforce, workforce.”
• Today’s problem is a mismatch between the employer’s requirements and the skills the job seeker has to offer, while there are more job openings than active job seekers.
• As a countermeasure, Walker suggested to (1) continue traditional education and training, for the future work force such as sixth and seventh graders; and (2) develop skills of the potential work force currently not participating in the labor market, such as veterans and prison inmates.
• Walker said these measures will help Wisconsin develop its work force and increase the labor force participation rate.

• Taichi Sakaiya from Japan discussed the issue of the shrinking population of Japan.
• While it’s obvious that a smaller population means a smaller economy, Sakaiya argued the Japanese political leaders are not acutely aware of the problem as Tokyo, the center of the nation, is filled with young people and gives an impression of prosperity.
• He said the solution is either pushing up the birth rate somehow or accepting more immigrants as work force.
• “We must have faith in the fact that Japan’s culture can support a large number of immigrants and implement a policy to accept more immigrants immediately,” he said.
• Japan’s “time limit” for implementing some kind of immigration policy is set to be the year 2040, according to the calculation based on the continuing trend of aging and shrinking labor force. Japan needs to fundamentally change its social value, ethics, aesthetic, etc. by that time, starting within a few years. “We don’t have a lot of time left,” Sakaiya warned.

• Rockwell Automation does business in 80 countries, with a total of 22,000 employees and $6 billion in sales. Mike Laszkiewicz explained manufacturing is a pivotal industry, specifically in Wisconsin, with the highest contribution to the state’s GDP.
• In today’s manufacturing operation, supply chains are highly integrated on a global level and industrial automation is advancing daily.
• When automation advances this fast, some people worry that it may eliminate manufacturing jobs for human workers. But that is not going to happen any time soon, said Laszkiewicz.
• As technology and automation advance, the required skills also become more advanced, and the future work force will be required to be armed with adaptability and learning skills in order to keep up with the trend, he added.

• Toshihiko Fukui traced how Japanese and global economies have shifted over the past years.
• According to Fukui, world economy has now reached maturity, particularly in many advanced economies, thanks to the growth spurt of capitalism following the industrial revolution. Now the world is seeking a next paradigm, which hasn’t been found yet.
• One of the plausible world economic outlooks, Fukui pointed out, is the possibility of the tripartite partnership between Japan, China and South Korea.
• The combined economies of these three will be larger than that of the U.S. in three years. Based on this outlook, Fukui said Asia would be expected to play a greater role in shaping the world order. While it’s not so easy to achieve, it would be “crucial” for the three countries to discuss how they could contribute to a new development of the global economy, as well as who will shoulder which part of the responsibility, he said.

• With an expectation of the U.S. economic growth to reach 4.5% in the next quarter, Neil Bradley said the key to sustained growth is productivity and work force.
• There are many ways to achieve higher productivity, such as work force education, skill development, raising operational efficiency, and improving competitiveness. Competition means free trade, and, as Bradley pointed out, it’s under assault by the current U.S. administration.
• While the administration is focusing its attention on trade deficit, “anyone who has studied economics understands” that every dollar of trade deficit in goods and services is offset by equal dollar of capital inflow, Bradley said. What’s important to sustain economic growth is to defend the free trade system.
• Bradley added that the Chamber of Commerce is currently talking to the policy makers in Washington, D.C. in the hope of persuading them to get back into the Trans-Pacific Partnership (“TPP”) talks, from which the Trump administration withdrew last year.
• Bradley viewed the iron and aluminum tariffs by the current administration as a factor that will ultimately undercut the U.S. manufacturing industry.
• Free trade is one example of how we enhance productivity, he said.

• According to Bradley, the U.S. work force has been benefited by two factors in the past.
• One is a demographic factor. The entry of the baby boomers into the labor market has helped to boost the U.S. work force in the past. But now they are reaching retirement age - 10,000 people are retiring each day – and the trend is expected to continue until 2029. Faced with the problem of the shrinking work force, the U.S. is trying to respond to the issue with measures such as extending the retirement age.
• Another historical factor that has benefited the U.S. work force is immigrants as a labor source.
• The current administration is obviously trying to pull the immigrants out of the labor market by restricting the inflow of immigrants, posing a political challenge to the labor market. One way to counter this may be to find a good fit for every job seeker through job training. It would also be critical to rethink lifelong learning for the future work force to meet the rapidly changing qualifications and skills required by the employers, Bradley said.

• Approximately 540 guests joined the celebration, which was hosted by Kikkoman Corporation in Japan and its U.S. subsidiary, Kikkoman Foods, Inc. In addition to Yuzaburo Mogi, Kikkoman Corporation’s Honorary CEO and Chairman of the Board of Directors, the celebration was attended by Wisconsin Governor Scott Walker, Japanese Ambassador to the U.S. Shinsuke Sugiyama, and Consul General in Chicago Naoki Ito, as well as prominent local business leaders and educators.

Kikkoman's Yuzabro Mogi (L) shakes hands with Gov. Scott Walker after Mogi announced a 600,000-dollar donation to six local high schools.

From left: Motoatsu Sakurai, Mike Laszkiewicz, Taichi Sakaiya, M.C. Mike Miller, Scott Walker, Toshihiko Fukui, and Neil Bradley.

The guests exchange conversations before the 45th anniversary commemorative dinner at the Abbey Resort.