One-stop solution provider for lightning protection

In the 80s and 90s, Japanese manufacturers became world leaders in a variety of fields. The period that followed, marked by Japan’s lost decade, saw the rise of competitors from Asian countries who produced similar products at a cheaper cost, which led to Japan Inc.’s large loss of market share. In today’s market, what makes the success of the “Made by Japan?”

Similarly to other sectors once dominated by Japanese firms, Sankosha’s line of business has suffered from increased price competition. Furthermore, we must recognize that the technological level of other Asian countries, especially China, has and continues to steadily increase. Twenty to thirty years ago, a multitude of Japanese companies, including Sankosha, began relocating their manufacturing facilities overseas in order to bring down production costs. At that time, we witnessed that a consequent percentage of our products were copied, and replicas suddenly appeared in our market. However, it was easy for an informed observer to recognize which product was ours, and which wasn't. While replicas successfully emulated the design of our products, they failed to capture the same quality. As years went by, we began to realize that the quality of Sankosha’s replicas was dramatically increasing, which created a tough business environment. For example, we used to provide our solutions to Chinese infrastructural firms and participated in a variety of urban development projects. Today, oversea contracts once granted to Sankosha are being given to local competitors. As such, the advantage of attaining superior product quality has lessened in importance.

Despite this increasingly competitive market, Japanese manufacturers will always remain dedicated to continuously improving, refining and redesigning their products; a key advantage that Sankosha, like many others Nippon manufacturers, embodies.

Furthermore, Japanese firms believe in fulfilling the demands of their customers, and client care is placed on a pedestal. For example, Sankosha conducts continuous research and analysis to discover what its clients may need. Based on our findings we create manufacturing techniques that are flexible, adaptable and that can be tailored to the unique demand of each specific client.

SANKOSHA manufactures telecommunication devices SPD equipment (Surge Protection Device), surge isolation transformers, grounding systems, housing shelter, anti-seismic isolations and more; all of which have lived through surging demand due to infrastructure growth in developing market. What trends do you anticipate in the future?

In the past, the transmission medium for communication systems was metal wires. Due to its high-speed and high-capacity, optic fiber soon replaced its predecessor. The appearance of smartphones and online communication multiplied the data generated and led to rapid technological advancements that continue to define the telecommunication industry today.

Despite their disparities, metal wires and optic cables both require lightning protection technology and systems. As wireless technology continues to progress through the development of IoT and 5G, we expect that the market for protection equipment will continue to increase both in scale and size. Furthermore, environmental consciousness has pushed manufacturers and telecom companies to decrease their energy consumption. Consequently, smaller communication units have risen in popularity. These smaller units are more susceptible to damage and vulnerable to natural phenomenon, such as lightning, hence, we expect the demand for our products to increase.

2020 marks your 90^th anniversary. Can you run us through your history and the milestones of your company?

The telecommunication industry lives in a constant state of changes and transformations. As a telecommunication equipment manufacturer, our history has been defined by continuous adaptation and systematic new product development. To a large extent, our sector evolves so swiftly that we must change every year!

Between 1930 and 1990, Japan lived through major economic transformations. After WWII, Japan entered a phase of rapid economic growth and our business grew in parallel with the country’s positive momentum. As a company involved in infrastructure, we actively participated in the development of railways, the electricity network and communication infrastructure. We collaborated with large public-sector enterprises in an effort to build the country; enterprises that would later become the JRs and the NTTs of Japan.

In the 1990s, Japan’s rapid growth came to a sudden stop when the bubble burst. Almost simultaneously, the global economy was hit by the recession and soon plunged. I was appointed President at that time and as you can imagine, it was a difficult situation to start my presidency with. At the time, we were an OEM largely dedicated to assembling and developing general electronics, such as copy machines. Sixty percent of our business, around 25 billion JPY, came from our OEM activities in that precise field. As our clients began to relocate their production facilities overseas with the objective to reduce their operational costs, our OEM business took a severe blow and we were forced to re-organize and restructure our operation. As such, we streamlined our operations and focused on technological areas with growth potential, such as telecommunication lightning protection. As the newly appointed president, my first task was to execute a massive restructuring plagued by factory shut downs and employee turnover. These practices are highly unpopular and complex in Japanese corporate culture, and it rendered my work all the more difficult.

My next project was to make our lighting protection equipment more efficient both in terms of production and cost. Despite reticence, we relocated our production bases to Indonesia. Simultaneously, we shifted one of our major manufacturing plants to China and truly globalized our production activity.

The way Japanese manufacturers have conceptualized lightning protection equipment is truly unique. From 2004 onwards, Japan’s lighting protection equipment industry grew increasingly international and European companies began to introduce their solutions in the domestic market. This led several of our competitors to import and develop European designs as OEMs. At the time, our own technicians wanted to follow that model. However, I took the decision to bypass that trend and argued that Sankosha should develop its own products; and we did.

While European makers already had a steady foundation, we had to begin our product development from scratch; a real challenge. However, we, at Sankosha, had the advantage of having an integrated production. Today, after long and strenuous efforts, we manufacture and sale products that match and surpass our European peers. Our ability to match international standards has allowed us to create a robust foundation to expand to international markets. As one of the few Japanese makers in our industry, we differentiate ourselves by our unique history and R&D philosophy.

What role do Sankosha’s products play in our daily lives?

Sankosha’s products contribute to our daily lives, but from behind the scenes. While our solutions cannot be seen or felt, they are present in a variety of commonly used devices. For example, house phones are built along landlines. If a given landline was to be hit by thunder or lighting, the house phone would explode. To avoid explosions, we have developed our proprietary SPD technology which protects users and infrastructure.

Another example of our product’s contribution to daily lives is found in railways. Whenever a cable is utilized atop a train or a metro, there is a risk of it being hit by lightning. As railway cables are interconnected, one damaged unit is enough to disturb the entire network.

In an age where people are internet-dependent and businesses are digitalized, it would be impossible to operate without safe, secure and resistant telecommunication infrastructure. Furthermore, electricity-powered homes and devices are continuously growing. Imagine a house with an electrically-powered elevator, key and gas system. If lightning was to hit a crucial cable, the house’s residents would be unable to open their door, cook and use the elevator. In conclusion, Sankosha’s products are in conspicuously present in our daily lives and contribute to creating a safe and secure society.

What new products are you planning to release on the market?

As a country prone to natural disasters, Japan is often hit by power outages caused by earthquakes and typhoons. As such, we have developed a power supply device which can be switched on to replace traditional energy sources. Furthermore, we developed foldable solar panels. Thanks to its unique design, this portable solar panel can be used as a convenient source of energy during power shortages.

Can you run us through your mid-term strategy?

We decided to make “lightning” a key word and concept for our business. Consequently, we continuously develop R&D activities to find ways to best expand the existing array of skills and technologies of our products. By virtue of our strenuous research, we are proud to have evolved into a one-stop solution provider for lightning protection equipment and information service. One of our major achievements was to develop a solution that can predict when and where lightning will hit. Sankosha established Franklin Japan Corporation (FJC) in 1991, a lightning and weather information company that markets a combination of lightning and weather data.  FJC is the owner and operator of the Japan Lightning Detection Network (JLDN) and it is constantly working to expand the applications for lightning data in various industrial fields. Thanks to forecast analysis, we can calculate and foresee how lightning is evolving and accurately predict its impact location. We communicate these forecasts to our clients, effectively enabling them to prepare and react before lightning strikes.

We have also developed grounding material and construction products which enable us to provide solutions both in the air and below ground. We are the only company in our field that can provide such comprehensive product portfolio and consulting services; which is our strength.

Sankosha has expanded its business to North America and South East Asia. What will be your international strategy moving forward?

We find business opportunities in regions that seek to solidify their telecommunication infrastructure. In the past ten years, Asian countries, and especially China, have made intensive investments in infrastructure development. Our strategy has been to provide services tailored to the specific demands of these growing markets. In the future, we predict that India, along with African countries, will require our services and we look forward to contributing to their development.

When we venture abroad, our strategy is to find local partners. While this wasn't always the case, collaborating with local businesses allows us to acquire market knowledge and man power.

Furthermore, we actively seek M&A activities both in Japan and abroad. Two years ago, we strategically acquired a domestic company specialized in lightning rods, thus allowing us to further expand our field of expertise. Also, Sankosha acquired the US company that developed the Lightning Location System and a new subsidiary was established.  The North American Lightning Detection Network (NALDN) which covers both the United States and Canada was constructed under Sankosha’s stewardship. Both in name and in operation, Sankosha made the leap to become a global leader in lightning. Although Sankosha sold the subsidiary to a Finnish weather-related company some years ago, the NALDN is increasingly important today as North America's most trusted lightning monitoring network. Sankosha is making good use of this experience for our business strategy.