Since 1976, Sodick has manufactured over 55,000 EDM machines and over 30,000 linear motor driven EDMs. Sodick machines are used for the production of dies and molds and other various applications which cannot be produced by standard machining methods. In this interview, president Yuji Kaneko talks about the impact of Abenomics, Japanese manufacturers’ competitive edge over China, and some of the Sodick’s latest innovative products.
Critics have it that Abenomics has fallen short of expectation. The monetary and fiscal policies combined with the depreciation of the yen were supposed to trigger growth. Abe’s administration is now expected to tackle the structural reforms, aimed at addressing Japan’s ageing population and decreasing workforce. How has Abenomics impacted Japan, and most particularly your sector?
The Nikkei Stock Market’s prices have been rising since the big drop of 2012. When comparing the exchange rate between the dollar and the yen, it is evident that the depreciation of the yen has been enacted, and that the policy has had solid results. Furthermore, since 2012, the unemployment rate has been decreasing. In terms of GDP, we haven't seen major movements in the statistics, but it is going up steadily. As for our industry, I believe that Abenomics is going in the right direction. Even though China has been taking the lead in terms of manufacturing, the statistics show that international appreciation for our Monozukuri is coming back. China has been winning in terms of cost efficiency, but Japan has been regaining its strength as the technological leader. For Japan, optimization of products makes our strength, and it is the reason behind our latest sales increase. We have been successfully going global without any detrimental effect.
In comparison to its regional competitors, what makes Japanese manufacturers so special and different?
China has been leading in terms of cost-efficiency and mass production. We have seen that the manufacturing process has been shifting to developing countries including China and Southeast Asia. What Japan has that no one else does is the high functionality of our products. Technological advancements are the competitive advantages of Japanese manufacturers. Since there has been an increase in the labor cost in China, they have been trying to advance and progress in terms of automatization, a sector that Japan already dominates. For us, it is more about adding value to existing products and processes. This quest for technical improvement is our strength, and it is a competitive advantage unique to Japan.
With over 60% of your sales ratio coming from outside Japan, SODICK is truly international. What international markets have the greatest potential, and which will you prioritize?
I have been emphasizing that cost is the main differentiator for Chinese companies, however, China and its surrounding regions have established a strong foundation, and demand for Monozukuri is increasing. China has an enormous population, and that creates a lot of opportunities. When looking at the American market, we expect solid capital investment demand in the aviation and the machinery industry. When we look at the global market, it is clear that there are gaps. Both in terms of location and of application, these gaps are constantly changing. Our role is to provide products at the right time to countries that are in need.
SODICK positions itself as a “Total Manufacturing Solution Provider,” and as a business partner that truly emphasizes client care. From a managerial point of view, how do you insure this concept of “client care?”
Our philosophy of client care is pursued thanks to our international bases. Because we operate globally, our sales structure extends all around the world, and we have a physical presence in almost all of the countries in which we operate. While making the best use of independent sales agencies in several regions, we have been successful in establishing our own base in and around every region where we operate. This global presence allows us to actively solve our clients` problems while also enabling us to effectively enlighten our customers the technological requirements of the machines. Furthermore, we utilize the data gathered through our global presence to ameliorate our services. We conduct meetings among the US, Asia and Europe to discuss matters and analyze the situation each region is currently facing. This allows us to articulate timely solutions to even sudden problems. As the company keeps on expanding, this experience will serve to nurture the development of Sodick.
Your company was founded in 1976. Some 40 years later, it has grown into a company with more than 3000 employees, an asserted global presence and a turnover of more than 60 billion yen. Looking at the future, what will be your mid-term strategy to continue growing?
In the electrical discharge machinery sector, we currently hold around 30% of the global market share. In our midterm strategy, we want to expand our share to 40%. In the injection molding machinery sector, we are trying to raise the overseas sales ratio from current 50% to 70%. For emerging markets, there is an increasing demand for functional machines at an affordable price. Meeting those demands we have proceeded to increase our market share by broadening our customer base, through disseminating the fact that Sodick can increase your efficiency, precision and reliability. Our new product, OPM250L, the metal 3D printer, is an unprecedented development that has just penetrated the market. Our metal 3D printer combines laser processing and high-speed milling processing in a single machine unit. This product enables mold production that is almost fully integrated in a single machine unit. In addition, we have the newly released injection molding machine designed especially for metal 3D printer which allows higher productivity by shortening the forming cycle.
We recently released the world’s first aluminum alloy injection molding machine, which solves the problems associated with conventional die cast manufacturing methods. We have established a revolutionary manufacturing method that will promote the changeover from other materials to aluminum, with energy saving effects through weight reductions in various applications including automobiles and smart phones.
According to a new research report by Global Market Insights, the Industrial Machinery Market size is expected to reach $771.59 billion by 2024, as the global market for Electrical Discharge Machines (EDM) is expected to reach $8.5 billion by 2020, growing at a CAGR of 11.4%. What are some of the trends that are happening in your market?
EDMs can be classified in many different categories such as wire-cut EDM, die-sinker EDM, small-hole drilling EDM, and when put together, they account for approximately 5 billion USD. That being said, we only deal with CNC (computer numerical control) EDM machines. There have been ongoing discussions in the machine tool market as to what type of machines would experience the highest growth. We believe that there are many opportunities to be seized in the aviation sector. EDMs can be used for manufacturing turbines, plane components and engines. The particularity of the aviation industry is that when one process is established, it becomes an international norm, and this creates a constant need for renovation. We believe that our products will be accepted in the aviation industry, and we are therefore extending our product portfolio in that sector.
As the President of Sodick, what is your personal objective?
From a business point of view, I want to establish a sustainable corporate structure and system. From a conceptual point of view, I want to convey passions and interests of Monozukuri to younger generations so that our Monozukuri philosophy lasts forever.
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