Japan - July 24, 2024

The number of Japanese companies over 100 years old declaring bankruptcy reached a record high in the first half of this year, surpassing previous records dating back to 2000, according to a recent survey by a credit research company.

A total of 74 Japanese companies were in court-led bankruptcy during the period, nearly doubling the figure from the same period last year, Japan's Teikoku Databank said in its latest online report.

The report attributed the surge in bankruptcies among these long-standing Japanese enterprises to rising costs, labor shortages, and waning financial support.

According to data from Teikoku Databank, Japan has about 43,000 companies that have been in operation for over 100 years as of September 2023. These time-honored companies have been a crucial part of the Japanese economy, but many are now facing market challenges and operational difficulties.

He further stressed that these challenges have affected younger companies as well.

Manufacturing is one of the industries with the highest number of bankruptcies among established companies, followed by the retail sector such as supermarkets and department stores. Together, these two industries account for nearly 60 percent of the total number of bankrupt longstanding enterprises.

The credit analyst also noted a rise in recent cases of century-old companies declaring bankruptcy due to financial fraud, illegal receipt of subsidies and other improper behaviors in recent years.

Corporate bankruptcies in the country from January to June came to 4,887, surging 22 percent year on year to a decade high, according to the report.

In June alone, a total of 807 Japanese companies began legal liquidation proceedings, marking the 26th consecutive month of year-on-year growth, the report said.

Shotlist:
Tokyo, Japan - July 24, 2024:
FILE: Tokyo, Japan - Date Unknown
1. Various of pedestrians;
FILE: Tokyo, Japan - May 2024
2. Vehicles, buildings;
Tokyo, Japan - July 24, 2024
3. SOUNDBITE (Japanese) Kaitaro Asahi, deputy director, intelligence branch, Teikoku Databank (starting with shot 2):
"Currently, the number of bankruptcies of established companies is on the rise and has been rising for the past two years. I expect the high level of bankruptcies to continue, with the total number this year potentially exceeding 10,000. In this case, even long-standing companies are not immune. The situation is likely to persist for the next two to three years.";
FILE: Tokyo, Japan - Date Unknown
4. Various of pedestrians;
Tokyo, Japan - July 24, 2024
5. SOUNDBITE (Japanese) Kaitaro Asahi, deputy director, intelligence branch, Teikoku Databank (ending with shot 6):
"The high prices refer to the rising procurement costs. Let's say the cost has increased by 100 yen. If the increase can be fully passed on to the sales price, the enterprise should still be able to maintain profits. However, it worries that raising prices would lead to customer losses. Therefore, even if the cost has increased by 100 yen, the enterprise can only raise 40 yen in its sales price. This year has seen a significant rise in the overall number of company bankruptcies, not just among long-standing enterprises.";
FILE: Tokyo, Japan - Date Unknown
6. Various of pedestrians;
Tokyo, Japan - July 24, 2024
7. SOUNDBITE (Japanese) Kaitaro Asahi, deputy director, intelligence branch, Teikoku Databank (starting with shot 6/ending with shot 8):
"Last year, there was a case of a company with over 150 years of history going bankrupt due to false accounting. The company believes that its long-standing reputation and trust accumulated over time will carry it through, but it had been falsifying its financial statements for two decades. Now Japan seems to have entered an era where the occurrence of such problems has become unpredictable.";
FILE: Tokyo, Japan - Date Unknown
8. Aerial shots of cityscape, traffic;
9. Various of shops, pedestrians.

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