An interview with Mr. Masataka Uetake, President of Chugoku Marine Paints, Ltd.
An interview with Mr. Masataka Uetake, President of Chugoku Marine Paints, Ltd.
In the 80’s, Japanese “Monozukuri” took over the world of manufacturing. In recent years though, we have seen regional competitors advance in many markets due to price competition and replicability. As the President of Maxell himself said it, “While Japanese companies have always excelled in terms of know-how and technical reliability, they have struggled at commercializing their smart ideas.” What are the reasons behind this weakened reputation?
A number of reasons could be responsible especially in the case of the iPhone. It is often said that Japan’s manufacturers concentrate too much on manufacturing than marketing, so global marketing is probably weak. In former Japan, Japanese companies were proud of 'Made in Japan' and exported overseas: this was their way of marketing. For example, in the automobile market, Japanese auto manufactures used to export completed cars overseas, rather than to make them in foreign countries, because they feared their know-how might be stolen.
However, for the last thirty years, there were changes to the tactics of Japanese companies. They are more open to bring their innovative systems or technologies to overseas and to establish a joint venture. Then they faced the need to establish a marketing system to distribute the products.
In the case of CMP, when we enter a foreign market, we generally team up with a local partner, normally a paint company who do not currently produce marine paint. We then bring our products and technology to the business and together start producing paint locally. Since the marine paint market is an oligopoly market, where we have a 20% global share and two competitors have a 50% share in total, we generally do not have a choice to purchase a local marine paint company.
Japanese Monozukuri which involves high quality but sometimes high prices as well. In your opinion, what does Japanese manufacturing have that China or South Korea does not? What is your competitive advantage in the case of Japanese manufacturing?
Generally speaking, Japanese shipbuilding companies have more advanced technologies compared to the shipbuilders in Korea or China. In terms of the shipbuilding volume, the order used to be Japan, Korea and China. Now it is China, Korea and then Japan. However, facing the various changes to market concerning the environment and safety, I believe it could be possible that Japan will regain the top position in a few years, since Japanese companies are quick on acting on these changes and changing the business.
What are your best-selling products? What are the key areas in which your products are being sold?
Our sales portfolio shows 80% of sales are generated by marine paints, 14% are by industrial paint and 6% is attributed to the container. Our main line is marine paint with a key product being the low friction, antifouling paint which is also an environmentally friendly product. The second key product is the copper free type. In addition, we attend to big cruise ships, ocean buildings and we use it for renewable energy projects such as windmills. We also provide silicone foul release coating, for example, for the coastal ships in Europe.
There are three categories within the antifouling paints. The first one is the most popular self-polishing type (cuprous oxide) for large vessels that sail through the ocean. The second type is the cuprous oxide free paints (antifouling) for coastal vessels, pleasure boats or fishing boats and the last one is the silicone based paint for offshore constructions including the Mose project.
Your history as a manufacturer of Marine Coating started in 1917. Nowadays, has more than 2,000 employees and a presence in North America, Europe, China, South Korea and Southeast Asia. What historical milestones would you like to highlight? Could you please explain to us about the mobile gates to prevent flooding in Venice that you are currently working on? (The MOSE Project)
The Mose Project was started in 2006. The first time our staff came to Italy was on the last day of the Torino Winter Olympic Games, which happened to be the same day that Japan won the gold medal in figure skating.
The Mose Project scheduled the gates to operate for one hundred years, and until the global warming problem is solved, we have to take into consideration that the weather will continue to change throughout this time, so high grade anticorrosion paints are needed to maintain the gates for the duration of their operation.
Furthermore, originally our team helped in deciding how to select the most reliable paint and then we assisted in securing the project by talking about the environmental protection policy. During the engineering stage of the Mose Project, arguments were made by organizations and individuals on how the project could damage the environment. We can only comment on the paint, particularly focusing on the toxic components of the paint. We are very proud that our paint is durable for at least five years in view of the bio fouling solution without the use of any biocide or toxic material. Every time this matter was raised, our team travelled to Venice to speak about our paint, system and test results. Finally, the project was secured in 2013, seven years after the project first commenced. As a single project, this is one of the biggest projects that CMP has secured. The antifouling paint used for the Mose Project is the one used for water conduits of power plants in Japan. Based on the successful track record, we had confidence in our abilities to successfully work on the Mose project.
Both nationally and abroad, the marine coating market is growing increasingly competitive. Not only are you facing cheap regional competition in certain markets, but you also compete with large corporations fighting for a piece of the pie (AkzoNobel, PPG, Jotun, and Hempel). What differentiates CMP from your competitors?
Japanese manufacturers stopped applying tin (tributyltin) based antifouling paint before 1990 which was thirteen years before the IMO officially issued regulations banning this process. So, Japan had a lot of experience in this area by the time the regulation was officially enforced. This environment helped us grow and enhance our business opportunity at a time when other competitors in Europe, for example, did not have a lot of technology in TBT (tributyltin) free antifouling, which gave us an advantage. So, when the regulation started we had enough experience and technology and were able to develop many new products. The reason why we succeeded in the global business is because we had a full menu of products. Every technology is available from CMP; silyl acrylate antifouling, silicone foul release coatings and hybrid type technology so we have a wide portfolio ranging from the top to the economical radius.
We have three points to explain the difference between CMP and other companies. One is environmental friendliness. We always go into research with the impact of environmental matters in mind. The second is cost, for example we launched a manufacturing plant in Holland in March 2017 which is highly-automated and environmentally free and causes costs to go down. Thirdly, technical advice to various customers. Unlike decorative paints sold at retail stores, after the sale of our products, we observe and give some technological advice to our customers for the application of the paints. It is a management of the whole system; not just selling paint but technical services are required. These three points are always considered when we are working on a project.
As an international player and at the same time an example and ambassador for Japanese companies that want to sell their products overseas, can you give us a sales breakdown by geographic location? Which market are you focusing on the most for growth? What kind of differences are there between doing business with America and Asia?
The big difference between selling in America and Asia is that America has set regulations which you need to meet, including firstly the EPA registration, FIFRA regulation and also the VOC regulation. America is a big market, with potential for success, however, time is involved in clearing new products. On the other hand, Asia does not have so many of these regulations, making it easier for anyone to enter the market.
Moreover, one of our targets in America is a large cruising company like Carnival. We have previously worked with them in cruise vessels that were built in Italy and we would like to expand our connection to work further with them within the cruise market.
For the yacht and pleasure boat antifoulings, we have the SEAJET brand and we provided a paint sample for one European boat magazine, which they then carried out independent tests on to find out which ones of the best. As you can see on their report, our SEAJET was scored 84% and awarded a gold medal, which showed the best antifouling performance among suppliers.
Our sales share is 43% Japan, 20% China, 13% South Korea, 12% South East Asia and Europe and USA 12% (with Europe having the majority share). We are today considering how to increase the share in North and South America and in addition we are thinking about South East Asia which is close to Japan and especially India. Compared with Japan, we believe the American market requires higher performance products, so we wish to bring our SEAJET pleasure boat paint that is cuprous oxide free, into the American market, after it has cleared the EPA registration.
What message can you leave us and your organization regarding your leadership?
The Japanese traditional way is “to know the tradition and then make it new”, but my message to all our group staff is to forget about tradition and the old ways. I have my own quote for them, "Abandoning old things to get new things."
10 Fintech 101
When being part of a generation on which the flag of entrepreneurship seems to be constantly waving in the sea of young professionals looking to succeed in the business world, more often than not, we tend to drown in the... Read More