Tuesday, May 24, 2022
Industry & Trade | Asia-Pacific | Japan

Japan

Daiwa Kasei: Lighter cars for a brighter, greener world


7 months ago

Eiji Kojima, President of Daiwa Kasei
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Eiji Kojima

President of Daiwa Kasei

Many of Japan’s renowned automotive manufacturers are today dedicated to making more lightweight vehicles in the pursuit of greater sustainability, particularly as the industry transitions to electric cars which can be significantly heavier than internal combustion vehicles. We speak with president of Daiwa Kasei, Eiji Kojima, to learn more about how the company is innovating its products to support the manufacture of lighter, more sustainable vehicles.

In recent decades, Japan has seen the rise of regional manufacturers, such as China, South Korea, or Taiwan, who have managed to replicate the Japanese manufacturing ‘monozukuri’ process, but at a cheaper labour cost, creating products that are generally cheaper, but with higher rate of defects. However, we still see Japanese firms maintain their global leader status in certain niche fields characterized by high-mix, low-volume production. Why do you think Japanese companies have been able to maintain their global leadership status, despite this stiff regional competition?

From the perspective of the Kojima group, we have an integrated ability to work together with our clients to jointly produce great products. We work hand-in-hand with clients from upstream to downstream for the whole production process, not just to produce the products at competitive price, but from the conception of the product itself with consideration of how to be used by end users.  I think for sure this is our competitive edge.

We are not trying to copy existing manufacturing processes to save labour costs, but are aiming at satisfying the needs of our customers so that we can lower the manufacturing costs for our clients.

At Daiwa Kasei, we are capable of making recommendations based on their understanding of the development and the design of the cars and how our components are used in the cars. We are trying to maintain such abilities, and I think for sure that it is our competitive edge.

We have a lot of different types of products and we make recommendations to our clients to integrate and standardise them based on their needs. Through such recommendations, it makes us able to mass produce at a lower cost by suitable production method such a fully automated system, which is the total competitive edge of our monozukuri.

 

In the next 15 years, one in three Japanese people is expected to be over the age of 65, from which two main problems emerge: the first being a labour crisis, as there are fewer young, talented graduates to replace seasoned workers who can pass on their knowledge. The second issue is the shrinking of the domestic market, which will have fewer consumers, customers, companies, and clients. Can you tell us what challenges the demographic shift poses and how you plan on overcoming those challenges?

The shrinking of the labour force is something that we cannot avoid going forward.

It will have a large impact on the people who work at our plants, as well as our engineers. However, we are very advanced in terms of automated production lines.

We used to have a lot more people in the production department, but now it is significantly less.

On other hand, in terms of engineering, we still need the skills and expertise from the seasoned workers and the issue we are facing is how to succeed their skills and knowledge; digitization is going to be key. We would like to transfer their know-how and the expertise into a digital asset so that everyone else can use it. This is the strategy we will initially use to tackle the labour shortage.

Japan is the oldest society in the world, however, I don’t think this will directly lead to a shrinkage of the market itself, because even though people have aged, the mobility of the people will not go away immediately. We will have a new society tailored to the elderly, so I believe we can find new business opportunities that could replace conventional mobility styles.

 

We are seeing many companies in Japan making lighter-weight vehicles. To make these vehicles, there have been some very big changes in the materials: heavy, ferrous metals like steel are decreasing in the body of cars, while lighter materials like aluminium, magnesium, or certain types of resins, like CFRP, are naturally increasing. How are these material changes affecting your business both on a group level, but also Daiwa Kasei too?

Our products are fastening components, such as clips and clamps which fasten two components together, so when you mention about changes in the material, that means the changes in material of mating parts. That requires us to develop new types of design, to fit with thickness and shapes of the cross section for the holes on such mating parts.

We are trying to produce products that can be applied to multiple types of materials, but still function in the same way. We also have had previous experience with material change. When we were founded, our clamps were made with iron and now they’re made with resin. It happened a long time ago, so we have experience with it.

As we move onto the new mobility society, I think the same thing will happen.

There are many iron parts in cars that can be replaced by resin, so for those changes we think that we should be prepared to make a recommendation of materials.



You mention this future of mobility, especially in Japan, and you said that we need to create a mobility suited to an older society. Let’s imagine we come back in 20 years; how do you imagine this new mobility? What do you think will change in comparison to today?

I’m not a prophet, so I cannot predict the future. Maybe we will see flying vehicles, or vehicles running underground. I don’t know what will happen, but the important thing is that the interior space of the vehicle, where the passengers and driver will be sitting, will remain. Another thing is that all those vehicles should be zero-emission vehicles.

These are two important points for car component manufacturers. Whatever the shape or idea is for the vehicle, those two points need to be satisfied. At Kojima group, we used to divide divisions by the types of components or materials, like iron or resin, however we changed the organizational structure recently into the interior products and the zero emission divisions, so that we can respond to any relevant requests going forward.

 

The Kojima group has been carbon conscious for a long time and that is especially relevant now. Prime Minister Suga’s Nov. 2020 carbon neutral mandate, which stipulated that by 2050, Japan would be a carbon neutral society. This is an ambitious target, especially for companies involved in heavy industry or the automotive sector. We understand that in addition to these other targets, like changing materials, you also introduced a solar-powered generation system in 2011. Can you tell us as an integrated, in-house designer and manufacturer, what other initiatives are you putting forward to contribute to a carbon neutral society?

The prime minister has announced his strategy, and part of it is to reduce carbon emissions by 50% by 2030 and to achieve zero emission by 2050. I think this is a very challenging target for us and we are going to need to achieve these goals from every part of the lifecycle of manufacturing: procurement, manufacturing, logistics and industrial waste.

The project to achieve this goal will be big and we have been thinking about what we can do to contribute to this target. I think it will be step-by-step – to put simply, we must reduce the energy that we are going to use, and we have to increase the energy that we are going to create, so those will be our goals. The founder of this company, my grandfather, visited Toyota and he used to purchase part of the iron that is wasted from their production line. He used to make small components out of that iron.

One of the quotes he left to us is that we must ‘consume the life of the object’.  If we keep this in mind for the zero emissions target, that means we must consume all the energy that is generated by our manufacturing process. In our factory, we are already working on efforts to do that. We are going to increase our natural power generation going forward and decrease use of fossil fuel.

 

We understand that 300 different parts of yours are used in manufacturing cars themselves, but as vehicles become electrified and we see more EVs and SCVs, the kinds of parts are changing as well. Can you tell us what impact or opportunity that shift to EV poses for Daiwa Kasei and the Kojima Group as a whole?

From the standpoint of the Kojima Group, even though we have more EVs, the cabin and interior of the vehicle remains the same, so we will pursue what we are pursuing now. For Daiwa Kasei, we will see an increase in the number of computer boxes, or wire harnesses used in the car. We are seeing this trend now, so our mission is to produce the components that can respond to this new requirement.

 

You specialise in product development and product production equipment within the Kojima group. You have three main product lines: clamps, clips and cushions. What part does Daiwa Kasei play in the Kojima group as a whole, and what synergies are you able to create with other members in the group?

Daiwa Kasei is great at finding out the needs of the customers. It actually contributed to establishing a new group company within Kojima. For example, components for batteries or for motors, Daiwa Kasei discovered the needs after discussions with their customers and started the development of new batteries and motor components.

However since those components are slightly bigger than the standard products we normally produced, we decided to established a new group company called “Hamaproto Co., Ltd.”. Daiwa Kasei is always at the forefront to grasp the needs of the customers, so we believe the potential that we have is very big, and we remain leaders within the group.

 

A common theme among our interviews is co-creation, specifically international co-creation - finding local partners when entering new markets. Many have emphasised that finding partners is so vital to penetrate and grasp these local markets. Can you tell us what role co-creation plays in your business model and if you’re currently looking for international co-creation partners?

In Daiwa Kasei’s case, as wire harness manufactures, which are our main clients, expanded their operations into overseas locations due to lower labor costs, we were originally forced to follow them to protect our business.

That’s how we established our own offices and operations in the U.S. and China.

But in the meantime, there are many cases that both Daiwa Kasei and other Kojima group companies have worked with each local partners to expand their business.

Rather, Kojima Press believes it is a more advisable business model both for us and local people to pursue international business with local partners and our local clients, Toyota. 

We are always consulting with our clients to find appropriate partners and as such, we are expanding relationships with local partners in China now.

 

Daiwa Kasei and the Kojima Group have a diverse international profile and network. Since 1988, you have been present in the US, Thailand, China, Indonesia, India and most recently in 2015, the Netherlands. Looking to the future, can you tell us which market you are prioritising? What is the key market? What is your international expansion strategy moving forward?

When we expand to overseas markets, our main objective is not to grow the sales in the market, because that’s not why we have local partners or subsidiaries. Our focus is to protect our business in Japan and that’s how we followed our clients who went to the overseas markets. We will continue this business model, either by having our own operations and factories, or through local partners. Through a BCP perspective, it is more effective to have an integrated process locally. Because of COVID-19, we had a lot of difficulties with logistics and procuring materials from Asian countries, so it’s better to have local operation sites to cover the integrated production process there.

It will ultimately serve as a backup operation for the other countries, including Japan in case of emergency. We will place our focus on the Japanese business, but we will also follow our customers as they go overseas, which will serve as a part of our business continuity plan to BCP establishment too. We may have a lot of potential for further expansion in China, but our main goal isn’t to increase sales over there, but it is to protect our Japanese business.

 

In the future, you will eventually retire and when that happens, is there a particular objective that you would like to have achieved as president?

That’s a difficult question. In terms of targets, if its numerical or sales based, I am not interested. I don’t know when I will pass this position to the next generation, but ever since I became president, my philosophy has been to protect the prosperity and the happiness of the company and its employees, along with their families. When I must succeed the position, I hope that things are better off than now, even if it’s only slightly better from now.


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