Sunday, Aug 18, 2019
Industry & Trade | Asia-Pacific | Japan

Japan

Bringing Next Generation Firefighting Equipment To Asia and Beyond


3 months ago

Mr Kazuhiro Hatsuta, President of Hatsuta Seisakusho Co., Ltd.
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Mr Kazuhiro Hatsuta

President of Hatsuta Seisakusho Co., Ltd.

In this interview for the Worldfolio, Mr. Kazuhiro Hatsuta, President of Hatsuta Seisakusho, discusses the business model that made the success of his company, and presents new innovative products, such as the ‘Cabinex-EWT,’ which are revolutionizing the firefighting equipment business.

 

Your company’s history stretches back to 1902. What were some of the most prevalent reasons for the introduction of your fire extinguishing business?

Firstly, Japan’s unique geographical and climatic conditions, such as the high-temperature and humidity make it a country different to all others. If we combine the fact that Japanese houses are often made of wood with these high-temperatures, it naturally increases the risk of fire. Secondly, the fact that 73% of Japan’s surface is composed of mountainous terrain forced populations to squeeze into few plain fields in order to live. As a result, Japanese cities can be defined as crowded. Naturally so, these two natural conditions influenced the house-building and construction industries. We started around the 1880s as we sold the first Japanese fire extinguishing bottle. However, fire prevention technologies existed way before that date. In the past, unlike European homes, Japanese houses were made of wood. This meant that when a fire started in these compact residential areas, it would spread very quickly. As such, fire prevention technologies were considered a necessity right from the start.

Our history began in the 1880s with the first President of Kyoto’s Chamber of Commerce, Mr. Bunpei Takagi, who had a background in engineering. He went to an exhibition in Germany, saw fire extinguishers and learnt what it actually was. He was the first person to bring this idea to Japan and back to Kyoto. Why Kyoto? You may ask. Kyoto has a lot of historical monuments and temples, such as the ‘Golden Temple’ or the ‘Kinkakuji temple.’ As such, there was a necessity to preserve this historical heritage, especially when the said temples are made of wood. Consequently, Takagi-san deemed it important to bring this technology to Japan.

 

In the two last decades, we have seen that regional manufacturers have caught up on the technological advances of Japan, whilst benefiting from cheaper labor costs. In such a market environment, what are the competitive advantages of the “Made by Japan?”

Asia is composed of several countries and each of them has different types of necessities, which reflect different stages of development. China and ASEAN countries are obviously catching up with the development level of Japan, but this is simply an inevitable global trend. However, being able to manufacture a given item and being able to utilize it are two different topics. I believe that Japan will remain competitive when it comes to the “best usage” of technologies. Our ability to design a set of rules and usages will remain difficult to match.

 

As a company that manufacturers products in Japan and China how do you maintain a similar level of technology domestically and abroad?

In Japan or abroad, there is no difference in our level of manufacturing quality. To be honest, the defect rate of products produced in China is actually lower than in Japan. We managed to reach that level of quality because of the special mindset that people in China adopted. The ways things are being done in China are exactly the same way things are being done in Japan. The products produced by Hatsuta China are sold here in Japan, and that reflects the high level of quality achieved. Similar observation can be made when analyzing paperwork and standardization. But most importantly, it is the mindset of all our employees, their devotion and dedication to work, that makes the success of Hatsuta.

 

In today’s world there is an increase in electronic devices with innovative technologies such as AI and IoT. How are these trends affecting your business?

The number of fires in Japan is much greater than that of developing countries, and especially Asian countries. The reason being the great number of wooden structures and the close proximity of construction. The fires can spread and catch further buildings ablaze due to how condensed residential areas are.

To make a comparison: 20 years ago in Japan, the fatalities from car accidents was over 15,000 per year. However, this rate has now drastically reduced to around 3,500 per annum. The reason for this drastic decrease is due to the increased safety measures taken by car manufacturers. Now, although the rate of fire is also decreasing, it has not reduced significantly in comparison to the aforementioned statistic. The reason for this is that the basic concept of the fire extinguisher has remained the same. Hopefully, in 15 years from now, an expert will develop something with the use of IoT and/or AI for the fatality rate of fires to reach the same equilibrium as that of people from car accidents. The trends are out there, and our company is trying to follow these and implement these ideas.

We introduced our CO2 automatic fire extinguishing system to semiconductor manufacturing and FPD plants. For plants which have lines producing over 100 units daily, avoiding fires, which can start from a spark, is of paramount importance. As the majority of plants put safety first, our product has met great success. Our CO2 automatic fire extinguishing system is a proprietary network that automatically and systematically locates the source of fire, and eliminates it immediately. This system has sensors to detect the source of fire and directly extinguishes it by using CO2. We met great success in its implementation.

 

14% of your sales derive from maintenance and recycled services. Could you tell us more about the range of services you currently provide?

Our services help sustain the supply-chain of Asia’s tier one and tier two manufacturers. While countries have different laws and legislations, they are all united by the concept of safety; they want to secure their lives as much as possible. Furthermore, by relying on each other’s production of components and devices, all manufacturing nations have created an inter-dependence.

Seven years ago, the factory of a Thai manufacturer collapsed due to a major flood. This affected large companies in Japan, as a part of their supply-chain had inevitably been destroyed. Even though it is a natural disaster, it has to be foreseen or anticipated. A mutually-dependent supply-chain and a common need for safety has united Asia.

Despite this economic relationship, the most important feature for our business is to have mutual trust between us and our customers. Of course, our fire extinguishers are distributed to various different places. Despite this geographic hurdle, we have introduced consulting services where we analyze what can be done to foresee a fire and prevent it instantly. We do not want our customers to be in trouble. If none of my products were to be physically used for a year period, I’d be satisfied! Some of our services are free of charge and some follow a payment format. We work closely with public organizations and facility management entities, such as local governments or warehouse storage customers.

 

What is your mid-term strategy to continue with corporate growth?

The objective of our mid-term strategy is to significantly increase our sales. In the domestic market, our R&D segment will introduce new types of fire extinguishing systems customized to different layers of society, namely, the elderly and children. These demographic segments face more risk than others. Furthermore, we expect our sales to increase adjacently to the upcoming 2020 Olympics. As there will be more infrastructural projects leading to the Olympic Games, construction sites will require fire protection.

Furthermore, we will increase our overseas revenue. While we do not have a specific geographic area to focus on, we will concentrate on the creation of services catered to the needs of semi-conductor and FPD (Flat Panel Display) manufacturing companies. We can see more orders from these sectors which reflects an increased necessity for our products. One of our products, the ‘Cabinex-EWT,’ is highly recommended for factories in these sectors. These companies use alcohol-based materials in clean rooms, which increases the risk of fire. Because of the risk associated to their manufacturing field, semi-conductor and FPD manufacturers are our most loyal clients. Our customers praise this product as it automatically releases CO2, effectively preventing fire immediately while causing little-to-no damage to the clean room and the equipment. 

Thanks to our local distribution facility, we identify China to be a high-potential market. As our products are currently manufactured in China and sold to Japan, we would like to alter that trend and manufacture our products in China, for China. Nevertheless, price is the real decision maker here, as Japanese products are quite expensive for Chinese companies to buy.

Our objective is also to introduce our sales network into other countries, such as Vietnam, Indonesia and the Philippines. As our Chinese factory has reached its production limit, we recently introduced a facility in Vietnam. We will also increase our presence in the USA by collaborating with local organizations.

 

If we were to come back in ten years-time, what are your dreams and ambitions for Hatsuta Seisakusho?

While I would like to increase the revenue of our company, my first priority is to increase our human capital. Employees are the blood and the muscles of this company. At last, my ambition is to create services in order to protect, defend and preserve the valued assets of our customers.

 


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