July 5, 2015 / 9:00 PM / 4 years ago

RPT-Rubbing along with robots tackles Abe's double dilemma

(Repeats Sunday story with no changes)
    * Japan capex up 11 pct in Jan-March on prior quarter
    * On course to hit 70 tln yen for first time since 2008
    * Robotics, automation helping growth and labour shortage
    * Automation equipment makers gear up for extra business

    By Leika Kihara and Kaori Kaneko
    TOKYO, July 5 (Reuters) - Factory worker Satomi Iwata has
new co-workers, a troupe of humanoid automata that are helping
to address two of Japan's most pressing concerns - a shortage of
labour and a need for growth.
    The 19 robots, which cost her employer Glory Ltd 
about 7.4 million yen ($60,000) each, have eye-like sensors and
two arms that assemble made-to-order change dispensers alongside
their human colleagues in a factory employing 370.
    "They aren't human, but it's as if I'm working with
colleagues who do their work very well," said Iwata, who has
worked at the factory for four years.
    Glory is in the vanguard as Japanese firms ramp up spending
on robotics and automation, responding at last to premier Shinzo
Abe's efforts to stimulate the economy and end two decades of
stagnation and deflation.
    Cowed by weak demand in a country of aging consumers,
risk-averse companies had largely turned their noses up at
ultra-low borrowing costs delivered by years of loose money
policies from the Bank of Japan, but times appear to be
changing.
    Capital expenditure rose 11 percent in January-March from
the previous quarter. If that pace is sustained, it would exceed
Abe's target of 70 trillion yen this year for the first time
since the collapse of Lehman Brothers in 2008.
    A BOJ survey on Wednesday showed that big companies plan to
boost capital expenditure at the fastest pace in a decade in the
current fiscal year.
    "We're seeing companies spend more to enhance their plants'
productivity or renovate equipment," said Ko Nakayama, head of
the BOJ's economic statistics division.
    Companies who make the automation equipment are already
gearing up for the extra business.
    Industrial robot maker Fanuc Corp will spend about
130 billion yen to build a new plant to produce computer control
system equipment, and Sony Corp plans to spend about
210 billion yen this fiscal year to boost production capacity
for imaging sensors.
 
    
    CRITICAL JUNCTURE
    Yukitoshi Funo, the BOJ's new board member who presided at
auto giant Toyota Motor Corp for four decades, says
Japanese companies tend to spend more time deciding on new
investment then their U.S. rivals, but current spending seemed
to mark an inflection point.
    "When you see these conservative companies increasing
investment, you can expect (other) Japanese executives to ramp
up spending," he told reporters on Wednesday. "I think we're at
a critical juncture now."
    That is welcome news for Abe, who started pushing firms to
raise wages last year and now wants them to boost capital
expenditure, all crucial to the success of "Abenomics", his
policy mix of loose money, fiscal stimulus and structural
reforms to push growth.
    Investment to streamline operations accounted for 14.4
percent of total domestic capital spending in the fiscal year
that ended in March, up from 10 percent the previous year, a
trade ministry survey showed.
    The change in corporate behaviour is also a response to
Japan's stretched labour market.
    Unemployment is at an 18-year low of 3.3 percent, which the
BOJ regards as near full employment, while unfilled jobs are at
a two-decade high as the economy recovers.
    Labour shortages have became serious enough for food maker
Ajinomoto Co to overhaul its 40-year-old assembly lines
to streamline packaging of soup stock and sports drinks.
    "We've really been having trouble hiring temporary workers
in the past two to three years, especially people who can do
night shifts or heavy labour," said Akihiko Ebisawa, manager at
Ajinomoto's food products division. "We couldn't get by any
longer without investing."
    With the investment, Ajinomoto hopes to operate the lines in
Kawasaki, a city 20 kilometres from Tokyo, with three-quarters
of its current staff numbers. It also plans to deploy robots
like those at Glory's factory in Saitama, eastern Japan.
    Abe's growth strategy doesn't just talk up the advantages of
artificial intelligence and robotics to boost productivity. It
offers subsidies, too, setting aside 2.2 billion yen for small
and midsize companies to introduce robots to streamline
operations. 
    So far, 85 cases have been approved, including Glory's plan
to deploy more robots, and a chain store restaurant's plan to
automate production of Chinese dumplings.
    "Shortage of labour is a structural problem Japan faces in
the long run, given the ageing society," said Kyuuichiro Sano,
director of a trade ministry division in charge of
state-of-the-art technology, including robotics, artificial
intelligence, IoT and other automation technology.
    "They could be the answer," he said.
 ($1 = 123.2900 yen)

 (Reporting by Leika Kihara; Editing by Will Waterman)
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