Eighth Symposium (Presentation of Kochi : Kochi Prefectural Government)

Strategies of the Port of Kochi

In Japan, there are 128 designated ports and 942 local ports. The former are designated as important ports in terms of trade and the national policies of Japan, while the latter are also essential to support local logistics and transportation.

Kochi Prefecture has 3 designated ports and 16 local ports. Apart from these designated ports and local ports, Kochi has 88 fishery ports. In total, Kochi has 107 ports along a coast line of approximately 710 km. This means a port can be found every 7km or so of its coast line. The Port of Kochi, one of the designated ports, is located in Kochi City, the capital of the prefecture. It is situated at the center of the prefecture, and is the only port in Japan that is a member of INAP.

Now, let me explain about ports in Kochi from the view point of Japan as a whole. Please take a look at this slide. It shows the volume of cargo handled in Kochi. Kochi is a major producer of high quality limestone and serpentine rock. Production of iron requires one unit of iron ore and 0.4 unit of limestone. Kochi has 400 years worth of limestone deposits. Limestone is also used as a main ingredient in cement production. Mineral products are a major industry of Kochi. Among the 128 designated ports in Japan, the Port of Susaki is ranked at 47th place or 16 million metric ton and the Port of Kochi at 67th place or 9 million metric ton in terms of the volume of limestone handled.

The Port of Kochi was once connected to Tokyo and Osaka areas by ferry, but due to the increasing use of road transport, the construction of bridges connecting Honshu and Shikoku and the extension of highways to the island, the ferry service is currently suspended. Due to this, the volume of cargo brought into Kochi ports has decreased by 2 million metric ton or so, resulting in Kochi’s ranking amongst ports to fall by about 10 places.

There are 63 container cargo handling ports in Japan. Among them, Kochi is ranked 54th, handling approx. 7,000 TEUs. According to an officer in Busan Port, the volume is equivalent to the capacity of a large-sized container ship. In order to make it easier to view, logarithmic scale is used. Please note that actual container cargo handled in the Port of Kochi is one-five hundredth of that in the Port of Tokyo.

This figure describes the role of ports by showing major industrial indexes of Kochi Prefecture. In Japan, 99.7% of total import and export cargo is handled at ports. Japan relies on imports for 97% of its energy and 60% of its food consumption. Even today when the highway system is highly developed, 82% of the cargo coming in and moving out of Kochi Prefecture is handled by sea transportation. However, it is difficult to lift the understanding of Kochi citizens as to how ports in Kochi are contributing to the economy of Kochi, just by showing these figures.

Generally speaking, these roles are not really understood by citizens in Kochi to the same extent as the roads, water supply and sewage system that they use every day. In order for Kochi citizens to obtain a better understanding of ports, a quantitative comparison was made between exports/imports and the major industrial indexes in Kochi.

The vertical axis of Fig. 3 is shown in logarithmic scale, as the scale of each index differs greatly. The gross prefectural products of Kochi is 20,663 million US dollars, the amount of shipping is 4,765 million US dollars, the amount of agricultural products is 850 million US dollars, the amount of fishery products is 445 million US dollars, and the amount of forestry products is 69 million US dollars. While all of these indexes show a decline, the amount of imports/exports is steadily on its way to recovery. In 2004, the total exports/imports that took place in Kochi was 372 million US dollars and in 2005, 433 million US dollars. As the world heads toward globalization, the role of local ports is very significant, as demonstrated by these figures.

This slide shows a bird’s eye view of the Port of Kochi. This is a wholesale market for perishable foods where 40% of total perishable foods consumed in the prefecture are bought and sold. This is an oil terminal which supports 98% of the total oil demand in Kochi. Oil is distributed from the terminal to the entire prefecture by road transport. Most large-scale businesses around the port are concentrated in this area. Currently, they consist of chemical factories and cement factories which use limestone as a raw material. These companies are referred as the ‘four port companies.’ Once, when two iron works operated in the area in addition to the four port companies, they were collectively referred to as the ‘six port companies.’ Due to a delay in development of the port, and as the port was only able to accept 5,000-ton class vessels, the two iron mills withdrew from the port as soon as signs of recession became visible in the iron industries. This triggered further withdrawal of shipbuilders from the port area because they used iron as a raw material. Now, only one large-scale shipbuilder operates in Kochi Prefecture. This shows that in order to support industries, it is essential that ports should be improved to accept large-scale seagoing vessels and to facilitate efficiency for economization of logistics costs.

The development of the port, however, was delayed. Consequently, large-scale companies withdrew from the port one after another. A policy to develop and improve port facilities should have been implemented without delay.

It may be too late, but the Port of Kochi has been constructing a port with large piers along the seashore of the Pacific Ocean for the past 15 years. In 1999, a part of the port facility started operation, and the port can handle container cargo and accept 30,000 metric ton class seagoing vessels. This was when the 1st INAP conference was held. Currently the port is in the process of constructing breakwaters so that 50,000 metric ton class seagoing vessels can be accepted.

Thanks to the active participation of Kochi in INAP conferences and symposiums and repeatedly sending delegations from businesses in Kochi overseas, the number of people and the volume of cargo coming in and out of the New Port of Kochi have gradually been on the rise. The volume of cargo is steadily increasing, though slowly, from 130,000 metric ton when the New Port of Kochi was opened to 960,000 metric ton in 2005. In terms of domestic cargo, acceptance of 30,000 metric ton class cargo vessels at the New Port of Kochi has contributed to the sales of limestone produced in Kochi to iron mills far away from the prefecture at a reasonable price.

As Governor Hashimoto puts it ‘Highways are like injections of a quick acting remedy, and ports are like Chinese medicine that works slowly but steadily,’ we would like to steadily promote economic exchanges with other countries through INAP.

The theme of the INAP conference this year is ‘Creating a Sustainable Port to Win the Future Competition.’ In order to make the Port of Kochi a sustainable port, Kochi Prefecture commits itself proactively to economic exchange activities with the countries of INAP members.

After the INAP conference in Colombo, a construction machine maintenance company was established in Sri Lanka as a joint venture between a company in Kochi and one in Sri Lanka. The conference gave them a chance to meet and get to know each other. I personally had a chance to attend a party to commemorate the establishment of the joint venture company last year, and was very pleased that the INAP conference expanded business chances between the two countries.

This year, Kochi Prefecture formed a Surabaya Economic Mission consisting of representatives of 7 companies in Kochi and sent it to Surabaya City to have business meetings, ending yesterday. The business meetings examined the possibility of trading sweet potatoes or sugar produced in Eastern Java and organic fertilizers and other agricultural materials. Also included was highly-value added paper of various types. Kochi is an active producer of paper products and the possibility of exporting the paper products to Indonesia was explored in the meetings.

The pie chart shows the current containers imported and exported between the Port of Kochi and INAP member ports. Kochi Prefecture is determined to take advantage of INAP conferences to promote economic exchanges between companies in Kochi and in INAP member countries to contribute to the expansion and development of trade among them.