Growth and economic circumstances of the Japanese fragrance and flavor industry
In 1976, the Japanese fragrance and flavor industry handled products and imports of essential oils, fragrances, aromatic chemicals, and fragrances and flavors for food and cosmetics in a total quantity of 31,801 tons and a value of 79,126 million yen. At present, it is hard for us to give any definite prediction regarding the extent of the further growth which the fragrance and flavor industry will attain along with the development of related industries for food, cosmetics, toiletries, and other household items in the domestic market. The future is unclear, i.e., it can be forecast either to be very promising or to be a period of depression.
Although having achieved annual growths of 10-15 percent between 1965 and 1972, the Japanese fragrance and flavor industry fell into an abnormal state in 1973 when the oil crisis, encountered on a world wide scale, pushed the Japanese economy into a state of price disorders and material shortages. This abnormal economic condition continued until 1974, and all companies made frantic efforts to acquire all types of raw materials—natural and synthetic, domestically produced and imported-with a resulting acceleration in the material shortage and further price rises. The raw materials and products, which these firms had purchased on a speculative basis in expectation of fictitious demand, caused the companies to be faced with inventory adjustment, since the government applied financial constraints and total demand suppression as measures against inflation, with a resulting decrease in consumption. The price of petroleum was raised again and this high price prevented the Japanese economy from maintaining the high growth rates of the past; thus a shift appeared to slow economic growth at an annual rate of about five percent.
