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Initiatives for Industrial Recovery

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Support for Agricultural Revitalization in the Eastern Part of Sendai and the Realization of an Agricultural and Food Frontier

The agricultural area in the eastern part of Sendai suffered severe damage from the monstrous tsunami caused by the Great East Japan Earthquake. Commissioned by Sendai City to undertake a test project for the revitalization of agriculture in the eastern part of the city, MHRI drew on the resources of the Group's network and its own industrial support expertise to conduct various agricultural and food research studies. The purpose of these studies was to consider ways to proceed in developing agricultural approaches and food industries that excel in efficiency and profitability, and create project plans.

Using Disaster Recovery as an Opportunity to Plan the Development of Highly Efficient, Highly Profitable Agricultural Approaches and Food Industries

The farmland spreading out over the eastern part of Sendai was a prime area for the cultivation of mainly rice, but also leaf and root vegetables. When the tsunami caused by the Great East Japan Earthquake struck, 80% of its 2,300 hectares was inundated and severely damaged. In response, the national government, Miyagi Prefecture, and Sendai City are now leading an agricultural revitalization project that, over a period of three years or longer, aims to restructure fields into large tracts that can be cultivated more efficiently.

Sendai City is advancing this project as part of the "Agriculture and Food Frontier" direction (one of multiple directions) it is pursuing for community recovery under the Sendai City Earthquake Disaster Reconstruction Plan. The aim of the project is to promote the development of agriculture and food industries that excel in efficiency and profitability by actively securing agricultural fields.

To implement the project, Sendai City, in October 2011, solicited proposals to undertake a project (the "Project to Create a Food Industry Cluster") that, among other things, would analyze the characteristics of agriculture and food industries in the eastern part of Sendai, and perform a study of consumption trends.

Agriculture Revitalization Research Project Undertaken by MHRI

Mizuho established the Tohoku Fukko Desk (the Tohoku reconstruction desk) in May 2011 with the aim of contributing to the recovery of industry in disaster–stricken areas and has worked to share information with local companies, financial institutions, and public organizations in the three disaster–stricken prefectures of the Tohoku Region. As representatives of the Tohoku Fukko Desk discussed the "Agriculture and Food Frontier" portion of Sendai's disaster recovery plan with the city's disaster recovery officials, the city began soliciting proposals to undertake the "Project to Create a Food Industry Cluster," and the Tohoku Fukko Desk provided this information to MHRI, which performs commissioned studies and research.

To make the most of the Group's overall capabilities, including its wealth of experience and know–how in supporting industry, and relationships with a broad range of companies, MHRI worked with not only the Tohoku Fukko Desk but also MHCB's Industry Research Division, MHBK's Business Solutions Division (now known as the Industry Research Division), and other parts of the Group to submit a project proposal.

In the end, MHRI was selected to undertake the project because of its research track record, human resources, and organization. Also key to the selection were the Group's overall capabilities for building a business model and drawing on a broad network of industry connections to provide multifaceted support for plan implementation.

Examining the Wide Range of Agriculture and Food–Related Stakeholders to Develop Hypotheses

In December 2011, MHRI drew on Mizuho's network to embark on a survey of a wide range of agriculture and food stakeholders, including local governments and universities; research institutions; agriculture organizations and food companies across the country; fertilizer, seed and seedling, and farm equipment manufacturers; chemical companies; IT companies, retailers, and others.

Using the results of this survey, MHRI identified factors related to matters like the growth potential of agriculture and food industries in the eastern part of Sendai, the external environment, and company intentions. It then put forth hypothetical strategies for taking full advantage of the area's strengths and turning weaknesses into strengths. These strategies were based on the three underlying premises.

The first is that the eastern part of Sendai is historically and typographically well–suited for producing rice and that the area should focus mainly on rice production to make the most of its proximity to the major market of Sendai. Taking full advantage of this strength requires the securing of large fields to enhance competitiveness and the diversification of rice production and processed rice products with an eye toward high–functioning food products.

The second underlying premise is that the portfolio concept will be adopted to stabilize agricultural management and increase food industry breadth. The aim here is to stabilize farms as businesses and increase their income by combining vegetable or fruit production, or livestock operations, with core rice production. In addition, new peripheral industries will be developed in areas like research to improve crop varieties and processing to add value to agricultural products.

The third premise is that business management, which has not been a very strong part of Japanese agriculture to date, will be introduced. Increasing the competitiveness of the agriculture and food industries requires the pursuit of cultivation innovation with both domestic and overseas competitors in mind, and the acquisition of human resource development and employment know–how that can enable the scaling up and corporatization of agriculture. Furthermore, it is imperative that the traditional "product–out" approach of believing that high–quality agricultural products will sell is abandoned in favor of a "market–in" approach of producing the high–quality agricultural products consumers demand.

Project Implementation

MHRI analyzed its survey results and thoroughly discussed its hypotheses with Sendai City. In March 2012, it brought the conclusions together in the form of a study report containing its "Proposal for Project to Create a Food Industry Cluster" (Refer to the diagram below). This proposal describes a sustainable project to be centered in the eastern part of the city, includes plans for various related undertakings, and covers the organization needed to advance the project.

Based on the direction laid out and project proposal contained in MHRI's report, Sendai City is now considering various matters with the aim of making the "Agriculture and Food Frontier" a reality. The city has also gained certification of its tsunami–damaged agricultural land as an "Agriculture and Food Frontier Advancement Zone" and is using tax incentives to encourage the pursuit of new projects in the area.

Exercising its overall capabilities as the Group by making the most of the unique strengths of individual members, Mizuho will continue to support recovery efforts from various perspectives.

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