Saturday, Jul 2, 2022
Industry & Trade | Asia-Pacific | Japan

Japan

Asahi Seiko ensures the smooth flow of cash transactions


11 months ago

Hiroshi Abe, Founder, Chairman & CEO (left), and Kazuya ‘Kaz’ Abe, President & COO, of Asahi Seiko
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Hiroshi Abe

Founder, Chairman & CEO of Asahi Seiko

Since its foundation by Hiroshi Abe in 1969, Asahi Seiko has grown to become the leading manufacturer of coin and card handling units used in various types of vending machines, ATMs, self-checkout terminals and amusement machines. We speak with Mr. Abe, who remains Chairman and CEO, and Kazuya ‘Kaz’ Abe, COO and President, who give more insight into how the company promptly delivers products with superior functionality, durability, and safety under stringent quality control, which is why it has remained the number-one choice for global customers, including many in the US and Europe.

Can you tell us why Japanese companies tended to dominate niche markets rather than larger markets, and what is your outlook for the future for such companies?

I believe that it comes down to the fact that from ancient times, Japan functioned on a hierarchical system of apprenticeship and it is an organizational structure that is really about creating the highest level of professionalism through different hierarchies of learning, starting with a child of a less than 10 years old who is considered sort of a child disciple and then the next phase would be the adolescent phase of learning in France. And then after that comes the ‘craftsman’ phase followed by the more advanced craftsman or ‘teacher’ phase followed by the higher level of ‘master’ and then the ‘super master’ which would be like a senior professorial level.

In these ways there was a hierarchical system involved in every single job and craft that was taken up in which Japan developed this strong spirit and strong culture of learning, craftsmanship and professionalism of mastering any craft.

However, after the war for reconstruction, the definition of craftsman or artisan began to change because there was a need for laborers such as those construction workers, or painters. These jobs began to take on the meaning of ‘craftsman’, and people started to not want to be attached to that kind of craftsmanship as it was looked down on as being dirty work.

Nevertheless, the true meaning behind artisanship – craftsmanship – that has developed in Japan is something much greater than that. I always share with my employees that striving to become a craftsman means you’re striving to become a master in your field. Strive to master whatever field of work you take on so that when you do so, you will be able to become successful.

To rebuild Japan, the mentality completely changed, as we started to realize that to grow and build the country, we needed to develop by basing ourselves on monozukuri. So, I started to work with the spirit of craftsmanship, of mastering my job, and with the aim of being able to then teach others and become a fully-fledged individual - first rate in whatever I would put my efforts into - and we were all encouraged to quickly do so, and to quickly get married, have a family and take responsibility. This spirit of wanting to rebuild the country and to master our craft gave birth to the technology and skills that slowly became associated with Japan around the world.

Actually, one of my Japanese friends made the hard-to-counterfeit passport printing machine used around the world today. Many Japanese people have become famous for the products they made to contribute to the world.  Certain slogans started to come about like “Look East” or “Japan is number 1”. This too was the result of Japanese workers being quite earnest and sincere in their pursuit of any craft or mastery.

A lot of the Japanese industries flourished, but then a lot of that was taken and replicated overseas. Many types of technology were exported abroad, free of charge. The Treaty of San Francisco resulted in Japanese technologies spreading throughout the world.

The Japanese population originally was an agricultural population, and so this country really had nothing. They were just farmers. So from being farmers, how did they develop into technological businesses?

One contributing factor was this spirit of the first entrepreneur that was responsible for the growth of the Toshiba company today, who was a man named Hisashige Tanaka, who was famous for making karakuri toys at the end of the Edo period. It weighs on a string, powered by the gravity of the weight, and the doll is moved with a wooden circular transmission.

The Japanese were first to create such an interesting automatic machine at a time when the country had no precise motor mechanisms yet. This attention to small details took the world by surprise and before the war you saw the wind-up toy started to spread around the world and I myself remember playing with wind up boxers where you would set up two boxers that work on springs and then you would fight them. That was something that I really enjoyed and I remember really being interested in the kind of mechanism that was involved in there, and I believe that each country has certain mechanisms or certain technologies that develop that lead to where they are today.

So in Japan this attention to precise details was the precursor to its great technology in motors and engines and you see Switzerland, how they're so good with clocks and the cogs, and they figured out the mechanism to create the best watches in the world. And Germany with steel works and the US with oil, France with culture and art and their music. I believe that after the war great technology and mechanics have led to advances in the mechanical, great motor and engine industries.

 

Could you tell us why you re-launched your brand in 2018 and what steps you took in order to do so?

We changed the name slightly to make Asahiseiko one word rather than two words and lower casing the ‘s’ of Seiko, the reason being that oftentimes what would happen when we went overseas was that the Asahi would be mistaken for Asahi beer and Seiko would be mistaken for the Seiko watches. So we would be mistaken as a company that makes beers and watches.

And it was also at that time that you saw the rising trend of digital currency and cashless transactions and so we decided to really ride that trend and really be able to expand our vision to encompass electronic transaction machinery and working in this niche field is also what was behind the rebranding in 2018.

Our core business of working with coin handling machines didn’t change. It was simply that we expanded to also encompass cashless transaction machinery and are working to provide certain products to meet the trend in digital money. And actually at that time you saw an influx of Chinese tourists and the QR code became huge but the only type of digital currency cards that could even be utilized were the train cards so we launched and developed certain machinery that could be used by inbound visitors and we were catering for about 30,000,000 tourists coming into Japan, something like that.

And also, just to understand what the meaning behind the name is, Asahi means rising sun, and Seiko means small, detailed precision equipment. The first ever coin machine for world wide currency for retail use that I developed was broadcasted by NHK to the world in their famous program called “Good Morning Nippon” and that caught the attention of a famous German company. Right away they asked me to come so I went to Germany. We’ve taken the patent for this machine as well to avoid any replication, and if you were to look at the actual patent documentation, my name is on there. Actually, if you have patents, you pay a lot of money every year but I still think that more than 500 patents are still in existence.

Actually, the company developed a self-checkout machine that built-in coin recycler I designed, and from there those coin recyclers spread throughout the world. The Japanese patent on this machine expired 20 years later, but we are still selling it to countries around the world with the addition of a new mechanism related to it.

 

You have self-checkout registers which meet hygiene standards, environmental standards, and automation standards. Could you tell us more about these technologies that you are developing and how they will serve these needs of society?

To be able to see market trends and then conduct development accordingly is the key to R&D. When I was in the Second World War, I was 16 years old and I would have to distinguish and identify how many bomber planes were coming based on the sound of the bomber plane so based on the sound, I knew how many B29's were there or how many P51 or Grumman were coming. It was really important for me to be accurate because it would determine how we would prepare our defense.

So I listened for the sound of the planes and then before there was a flash of light, we had to be ready otherwise it's too late if you just wait for the flash. I need to already distinguish everything with the sound, because otherwise we'd be dead. So the most important thing was to be able to prepare yourself in advance. It's too late after the trend arrives, so it's this kind of market forecasting instinct that's needed to predict market trends and gain previous economic insights.

So, getting back to R&D, we created this machine to be placed on the counters of all these different kinds of retail outlets. The customer just needed to put the banknote in the right hand side, slide the banknote in, and then out comes the change. Similar machine was exhibited in New York last year and it was very well received and right now it's already on the market in Japan.

We see that now we have a lot of copycats and there are a lot of designs with only slight changes made already out there and we are concerned about being swallowed up in a tide of imitations so we hope to promote our machine through forthcoming expos and such.

 

How is your company responding to the trends of e-payment and heightened sanitation concerns brought about by the covid pandemic, and what are some of the products that you're developing as part of that response?

There is antiviral, anti-bacterial film that is produced by technology provided by Fujifilm, it can be placed on the machines. And if you were to put this film on to the machines then it actually has this sort of antiviral, antibacterial effect to achieve more than 99% of decrease after 24 hours. And also in terms of the plastic that is utilized in the machine components, we actually include antiviral features into the resins so we're able to achieve these hygienic standards for the machines.

 

Can you tell us more about the benefits of having these international capabilities and what has allowed you to serve in those local markets?

We can make products quickly and at reasonable cost in our own factories in Japan. Our international strategy is that we want to continue to expand and strive to respond to customer needs with our quick, precise and cheap delivery. We don’t want to outsource our R&D. We want to keep R&D in-house by keeping our eyes and ears peeled in our overseas facilities.

We have a lot of different technologies, but there are a lot of replicated machines on the market, for example, there were some machines that failed often. For a long time, many customers have been purchasing our products because they trust reliability in technology and quality.

 

What objectives would you like to have achieved in five years from now?

I believe that within the next three years, you're going to see even greater changes with regards to the handling of currency in Japan. There's still a lot of growth potential, and so we're definitely going to continue to be maintaining our business, but in terms of how the balance of cash and cashless might change, with Japan becoming an aging population, there's definitely going to be a need for cash transfers and cash payments so we will be seeing cash and cashless systems coexist still more in Japan.

They’ll be utilized in a number of different applications, such as coin laundry machines, or at bakeries and we really want to be able to contribute to convenient lifestyles for people. That being said, our company has been around for 52 years. With regards to mergers and acquisitions, we might be open to having partnerships with overseas companies but that would ultimately be a decision for the chairman.


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