SKK: Forging success for energy infrastructure

How do you explain that medium-sized Japanese manufacturers, such as Seo Koatsu, have been able to retain a high market share in niche fields?

Our firm is an SME manufacturer specialized in forged products, heat exchangers, flanges and other industry products. Our products are utilized for thermal power plants, oil refineries, chemical plants, waste incineration power generation plants, nuclear power plants and other social infrastructures. Manufacturing products for these fields requires a high level of reliability, safety and a precise technological know-how. As such, the manufacturers present in our field of expertise must acknowledge, understand and tailor their products to the specialized standards required by our customers. Furthermore, one must take into account that the Electric Utility Industry Law in Japan is strict. By virtue of these stringent domestic regulations, we have grown accustomed to producing highly complex items.

One of the advantages of Seo Koatsu, and of Japanese SMEs in general, has been our ability to work collaboratively with the plant makers and the end-users of our products. In order to understand exactly our customers, we visit them directly, pro-actively listen to their indications and immediately register their feedback. To a large extent, one could consider that we and our clients have developed side-by-side. This has allowed us to nurture long-term relationships based on trust and diligence. With our over 90 years of experience, we have acquired an extensively rich field-experience, wisdom and technical expertise. To ensure that this know-how remains intact from generation to generation, we invest a considerable amount of time and money training our junior staff. One of the top priorities of our senior engineers and managers is to accurately convey their experience and knowledge to our recruits. By ensuring this communication flow, we have been able to pass-down our know-how.

Our accumulated years of experience have allowed us to manage a historical track-record both in terms of reliability, delivery, performance and after-service. On numerous occasions, we have been regarded by our customers as a top-notch manufacturer, and our positive reputation has been forged in trust. We have an ability of a basic design, and detail design for heat exchangers based on our customer’s specification. Furthermore, our after-sales service isn’t limited to the domestic realm, as we provide our assistance internationally. When foreign entities purchase our heat-exchangers, we provide an equivalent assistance to what we usually offer in Japan. And also we can manufacture forged products in all process from forgings to machining and testing and inspection from the standpoint of using as well as making.

Each employee has been continuing reliable manufacturing facing to work faithfully with awareness and responsibility as professional workers. This emphasis on the “soft” side of the business has been applauded and appraised by our customers.

Seo Koatsu’s reaction when facing a defect is also a point of pride. When a client reports to us that a given product has a defect, our reaction time is extremely swift and follows a three-step flow. Firstly, we analyze the issue quickly understand what is wrong and how it can be fixed. Secondly, we propose tailored strategies on how to fix the problem. Thirdly, we review the entire life-cycle of the product’s improvement and operational environment. This allows us to deeply understand how and why the defect occurred, and how it can be avoided in the future. Our approach is sincere and speedy. These denominators are common to Japanese SME manufacturer and they drive the ‘Made by Japan’ spirit.

Due to their environmental impact, power plants and chemical plants have been subject to new regulations by international Governments. How does Seo Koatsu assist its clients in meeting new environmental regulations?

Minimizing the environmental impact of our client’s facilities is of paramount importance. Our clients in the refinery and thermal power fields are subject to various global standards. As such, we must ensure that our components are adapted to these specifications, such as C02 emissions. As our market advances rapidly, we maintain a close relationship with our clients and actively monitor legislative changes.

To give you a concrete example, our Heat Exchangers are utilized in IGCC (Integrated coal Gasification Combined Cycle) power plants, which are considered to be next-generation thermal power systems. Due to the combination between coal gasification processes and Gas Turbine Combined Cycle systems (GTCC), IGCC power plants enjoy a significantly enhanced power generation efficiency and environmental performance. Under this structure, we can reduce the volume of CO2 emissions. Our Heat Exchangers are an important component of this process and contribute to the success of this infrastructure. Furthermore, we are paying a close attention to the requirements needed to foster new sources of energy, such as Hydrogen.

(Seo Koatsu’s Turbine Cooling Air Cooler)

In 1998, you received China’s Labor Department Quality License. How do you manage to comply with all of these international regulations?

We manufacture a “turbine cooling air cooler” for the GTCC systems for China. As a matter of fact, this specific product is tailored to meet the needs and regulations of our Chinese clients

(Seo Koatsu’s Steam Air Heater)

At Seo Koatsu, we have been successful in complying with changing international regulations. For example: while we received the Quality License from China’s Labor Department in 1998, we have already upgraded it 5 times. Every four years, we adapt our products to meet the newest requirements. We have also been exporting this product to the USA and other countries.

In the USA, the Trump administration recently re-opened shale gas exploration. Did that policy have an impact on your business?

The new American regulations have had an indirect impact on our exports. The USA now has an extensive reserve of exploitable cheap shale gas, which is utilized in GTCC systems. In that sense, the American production has bolstered the global supply needed for GTCC. As such, our products are in need. We will do our best to contribute to support the stable electric power supply.

Your company was founded in 1926 as Seo Koatsu Flange Partnership Corp. in Osaka. Can you run us through your history?

While we were established in 1926, we only entered the heat exchanger business in 1953. We began as a flange joints manufacturer for ships. Soon after our establishment, we acquired an expertise in fin tubes production and forged products. By utilizing our experience in fin tubes manufacturing, we started developing and selling heat exchangers. In the decades following 1926, the Japanese shipbuilding industry experienced unprecedented growth. As such, we grew adjacently to the Japanese marine industry and we began by making heat exchanger and forgings for ships. Our heat exchangers are highly recognized by providing comprehensive support for all aspects of the project from designing and manufacturing through inspecting products. Decades after, we re-oriented our clientele to land-based power plants constructors.

We ventured into the manufacture of products for thermal power plants, nuclear plants and waste incineration power generation plants after having gained a considerable expertise in the production. Today, we can provide items such as low pressure feed water heaters, high-pressure feed water heaters and deaerators and steam air heaters. And we supply forged products in various fields. In addition, we began producing highly specialized heat exchangers for GTCC and IGCC. These days, receiving orders of heat exchangers for biomass power generation, one of renewable energy, has increased significantly.

Our most recent milestones occurred in 2006, when we established the Kaizuka factory. This new facility specializes is the creation of large scale heat-exchangers for GTCC plants. We can manufacture heavy components up to 130 tons. We are proud to be one of the largest producer of heat exchanger. There are about 17,000 units of delivery record in our all.

(Seo Koatsu’s forged products)

Can you tell us more about you R&D capabilities and the products you are currently developing?

Firstly, we are currently ameliorating our capacity to develop chrome-based products. While chrome shows great physical properties, it is a difficult material to handle. In a given product, the higher the concentration of chrome, the more difficult it is to manufacture. In boilers, turbines and high-heat exchangers, there is a particular part which is composed of 9% chrome metal.

Secondly, we are enhancing the strength of our forging capabilities. Up until now, our forged products are manufactured in-house from forgings to machining, but we did not take care of the welding. In the future, we want to create a new product combining forgings technologies with propriety welding technologies that are cultivated in the heat exchanger business.

Thirdly, we are also proactive in acquiring welding procedures for special materials used at Hydrogen stations.

What would you like to have achieved in 10-years’ time?

Our vision is to lead the market by producing reliable heat exchangers and forging products that serve and support the needs of society. As such, 10 years from now, we hope to share with our partners that we have achieved a top market share within this field. In order to fulfill that vision and to make our goals a reality, we want to create further added-value and expand our exports into South East Asia. There is nothing that would make us more proud than knowing that Seo Koatsu is contributing to creating the society of tomorrow.