In this interview with The Worldfolio, Motoshi Shinkai, President of Nippon Seisen, discusses the strengths of Japanese manufacturing, as well as his company’s next-generation materials and cutting-edge product development
To what extent can internationalization be considered a solution for Japanies companies faced with a the shrinking domestic market due to the aging and declining population?
It is undeniable that manufacturing companies who are in the B2C business have already been aggressively expanding their businesses overseas. For example, in the automotive industry, before the financial crisis, it was strictly Tier 1 suppliers who built factories overseas but after the financial crisis Tier 2 and 3 suppliers also started their overseas operation. Naturally, B2B companies then accompanied their customers in their overseas operations.
Japan is seen as a hub for high performance, cutting-edge-technologies, and this is also true in the fiber industry. Whilst cutting down costs was a priority for Japanese companies, they are now recentering their priorities around quality, and therefore, companies who have expanded overseas are gradually bringing back their manufacturing plants back to Japan.
The president of Maxell has said that, “While Japanese Monozukuri has always excelled in terms of know-how and technical reliability domestically, it has recently struggled at commercializing its smart ideas”. Continental peers such as China and Korea have slowly increased their market share by competing based on cheaper prices.
Such a trend is more evident in the home appliances and the light electronic industries. Being competitive in terms of cost is a necessity nowadays, as the market is getting bigger due to globalization. However, today in Japan, we have several counterparts all residing in the same industry which ultimately makes them invest excessive amounts of money in one sector. In addition, the eternal “monozukuri” attitude, makes these manufacturers continue their conquest of producing new and more reliable products while ironically making it even more difficult to launch hot-selling products.
What does Japanese Monozukuri have that its competitors (China, Korea) do not?
When producing products that requires compactness, lightness and high performance, it is a prerequisite to have a high level of skill and cutting-edge technology that includes material, processing technology, components performance, production machinery, tools and moulds. Japan's strength lies in the high level of communication, mutually supportive culture that exists between extremely competent, specialty-focused small to mid-sized companies specialized in material processing.
Japanese manufacturing superiority is not solely dependent on big companies but rather an accumulation of small and medium-sized companies. This is visible in the IT sector, where Japanese products are highly present. In every company, the pursuit for high performance, high precision, and high quality has been well kept in their DNA.
What are the challenge as a company presently in the automotive industry?
Right now our shipment quantity for the automotive industry is increasing. To be more specific, our supply to Japanese car makers as well as automotive-related customers in China and Southeast Asia is increasing. Our applications are sensor, electromagnetic stainless steel, heat resistant bolt and heat resistant springs. This is due to the fact that the demand for high performance materials for the automotive sector is increasing.
There are only a few companies who are able to supply such materials and components which is the reason why we believe the ''America First'' effect will be somewhat small. In fact, for the simple fact there are only a few companies who are able to supply those high performance materials, we believe the demand for our products in the USA will increase.
Your history as a manufacturer of high value-added products such as stainless steel wire based NASLON (metal fiber) and high alloy steel wire started in 1961. Nowadays, your company is a leading manufacturer with more than 65 years of existence, beyond 500 employees and international operations. What historical milestones would you like to highlight?
We Established our company in June 1951, and then joined the Nippon Yakin group in 1953. We began our operations in the Hirakata plant in 1962, which is currently our main plant, and in 1971, we started our metal fiber business. In May 1988 we established Thais Seisen Co. LTD and then began our ultra high-purity gas filter business in 1993. In 2003, Daido Steel became the largest stockholder of Nippon Seisen, and we finally established Nalon Fuji Filter in Changshu in 2006 and Naslon Korea in 2008.
Can you tell us about your best-selling products?
We produce more than 100 kinds of stainless steel, high alloy steel(11μ〜23mm), super fine wires, spring wires, high performance wires such as heat resistant wires, corrosion resistant wires and high strength wires, NASLON filters, and ultra-purity gas filters for semiconductor production machinery.
The products we take the most pride in are: the super fine wires whose sizes are the thinnest in the world; our heat resistant wire for bolts whose demand is rapidly increasing; and our high-purity gas filters for semiconductor production machinery.
Our main products are stainless steel wires and metal fibers. We aim to contribute to the development of society by supplying value-added products and services while striving to enhance long-cultivated technology and new technology fields. Our main competitiveness lies in Micro & Fine Technology.
What product are you the proudest of?
There are many products we are proud of. However, our main products are:
Which project or development are you the most excited about?
We have many products that we are developing at the moment, but the main ones are:
・Super fine wire applications for hard-processing materials such as Duplex materials. Copper-based high strength, high conductivity alloy wire
・Automotive related products: Turbo fastening bolt, sensor application, Electromagnetic stainless.
・Ultra precision gas filter for semiconductor production machinery.
Even though our materials are essentially stainless steel and alloys, there are a wide variety of applications ranging from everyday items, for example our springs used in shampoo, to other cutting-edge materials. Our R&D is market-oriented as we develop materials required by society. Our target market is firstly, the automotive sector with the heat resistant required field and our sensors, then the environment and IT, and finally the medical sector. Our management policy is to supply high performance and exclusive products globally.
What are the competitive advantages of NIPPON SEISEN?
Firstly, our technology, especially Micro and Fine technology. Then, of course the high-quality raw materials we use. We always use raw materials produced by two of the best stainless steel raw material suppliers in Japan. Our parent company Daido Steel can supply a wide variety of high-quality special steel and alloys.
What makes your products relevant on the international market place?
Firstly, we are very reliable when it comes to quality. Secondly, we have superior performance materials that others do not have. Finally, our filters, which give high purity, and low pressure drops giving our products long life characteristics.
Which market are you focusing on for future growth?
Firstly the automotive market, then the environment, and finally the IT and medical sectors. Due to the very nature of our high performance, exclusive products, our markets are carefully selected.
With regards to the USA, which products do you export?
Mainly stainless steel spring wires, heat resistant stainless steel wires for bolts, as well as high-purity gas filters (NASclean) and NASLON filters.
What are the main challenges you faced when internationalizing, and how did you overcome them?
Currently, we have 3 oversea factories:
Our initial aim was to establish Thai Seisen Co., Ltd. In order to supply commodity items at a lower cost. However, we have been exposed to competition from local suppliers and it has been hard for us grow.
Therefore, we positioned Thai Seisen as a global stainless steel manufacturing site and will gradually transplant high performance items to Thai Seisen as a production site for China, Southeast Asia and Europe.
What are your key objectives to ensure the future of the company?
The most important thing for me is to satisfy shareholders, ensure my employees satisfaction and develop human resources, customer relations and society as a whole. I always try to find a balance in all four of these areas. Our strengths are technology, product development power, a high level of communication with customers and cutting-edge product development.
I always take advantage of my experience as a special steel manufacturing engineer to further enhance NIPPON SEISEN’s technology. Even though stainless steel, metal fiber and Micro & Fine Technology is a limited field, the range of applications these products have is huge. We have a wide range of high performance, exclusive products and we want to become a leader in a global niche market.
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