Japan maker of bamboo whisks eyes Brexit risks

NARA, Japan: Britain might be a world away, but the future of a 500-year-old family company in rural Japan could rest on the UK´s decision to quit the European Union.

Chikumeido, a speciality maker of delicate bamboo whisks used in traditional tea ceremonies, started selling the niche products in the United Kingdom last year, its first major push overseas.

Sabun Kubo, its 71-year-old president, hoped the gamble would pay off by setting up his little company for a launch into the potentially lucrative European market, and counter years of falling sales.

Things got off to a good start for the company, which has been run by 24 generations of Kubo´s family -- and then Britain voted to quit the EU.

"We just started exporting to London last year as our sales base in Europe," said the septuagenarian craftsman.

"This was part of our efforts to take a chance on doing business overseas. I thought our products would be well received in Europe, and especially in Britain where there is a tea culture.

"But then, all of a sudden, Brexit happened. It was a shock."

Since the June 23 vote, firms in Japan and across Asia have been scrambling to get a read on how they´ll be impacted by Brexit, and what to do about it.

Japan Inc has also been hit as worries over the vote sparked a sharp rally in the yen. The currency is seen as a safe investment in tumultuous times, but its rise hurts Japanese exporters´ profitability.

The threat to Kubo´s minnow firm illustrates how the breakaway vote will not just affect multinational giants like Toyota and Hitachi, which have major operations in England.

More than 1,000 Japanese companies do business in Britain, employing some 140,000 local people, and Japan´s direct investment in the country has topped 10 trillion yen ($99 billion) to date.

"The main problem for Japanese companies is that the single (EU) markets are very small and diverse with different languages and business cultures and often different standards," said Martin Schulz, senior research fellow at the Fujitsu Research Institute in Tokyo.

"They really need a position from where they can serve the overall market. That has been London."

For Kubo, Brexit rekindles worries about the 100 full and part-time employees working for the company near temple-dotted Nara, one of Japan´s ancient capitals.

The firm is known nationwide for being one of the only manufacturers able to produce as many as 120 different types of the lightweight whisks, called chasen.

The small utensils are made by hand from a single piece of bamboo. They take centre stage in a formal ceremony, usually performed in a tatami-floored room, that includes drinking a powdery form of green tea called matcha.

"When you´re making tea, you need to have a tool that can beat the surface into a froth," Kubo said of the emerald-green beverage.

But the chasen business is a tough go these days as low-cost rivals in China and South Korea keep eating away at a shrinking market.

Around 1970, the peak period for sales, about 50 manufacturers moved around one million whisks yearly -- and Kubo´s employees were run off their feet, he said.

Today, the number of makers has fallen by more than half while annual sales have tumbled to about 300,000 a year, Kubo said, adding that his firm controls about 30 percent of the domestic market.

While the company had previously sold some products abroad through Japanese buyers, last year was the first time it sold via wholesalers overseas.

The whisks went on sale at department stores in England for about $50 each.

"After Brexit and now with the strong yen, I´m really wondering how this is going to change our business overseas, starting with England," Kubo said.  "I don´t have much reason for optimism."