A leading manufacturer of mechanical belts for automobiles and other machinery, Mitsuboshi Belting is expanding both its global reach and its range of products, and is primed for the shift to renewable energy sources, as explained by president Hiroshi Ikeda in his interview with The Worldfolio.
Over the past couple of decades we’ve seen the rise of manufacturers in South East Asia who can replicate certain manufacturing processes and products from Japan at a cheaper cost and with economies of scale. In the case of your company, as a drive technology specialist, can you explain your monozukuri principles?
We make high quality transmission belts from three main materials: rubber, cord and fabric. We purchase the raw materials and mix the different components; this is a very important step because we must then mix several types of chemicals to get the proportion of rubber correct in order to supply the needs of specific customers.
We have a catalog which shows our standard belt lineup. However, we also manufacture OEM products to supply every type of car. Every car has a different engine, and each engine needs its own type of belt and with the shift towards EV’s (electric vehicles), there's still a need for belt drives. There’s even a need for belts in various types of home appliances. Demand for belts comes not only from automotive companies, but from wherever there's machinery with a motor, including agricultural machinery as well as office appliances and financial related machinery such as ATMs.
Within machinery, the belt is such a small component and cost wise it is very cheap compared to other parts. However, it's a crucial component, so it is important for the quality to match the needs of that machinery. Looking overseas, US and European companies focus mainly on their existing product lineups, but we supply to the needs of not only car manufacturers but also office appliance makers and agricultural machinery makers and so on with tailored belts. It’s as important to supply for specific niche users as it is for larger volume users.
If we take car manufacturers as an example, they manufacture some of the most popular cars which are in huge demand, but they also manufacture patrol cars for police and fire engines, which don’t sell in huge volumes but are nevertheless important and need to be supplied with appropriate parts, including the transmission belts. Business wise we might not get so many orders for patrol car belts; however, we continue to supply them and as a result gain more trust from our customers. One of the strengths of our company is being able to work even in these niche markets that don’t feature large sales volume. I just gave one example of car manufacturers, but this also applies to agricultural products, office appliances and other types of businesses as well, including robotics.
We have 102 years of history and we have accumulated knowledge in how the compounds should be mixed. If you want to start from scratch, it takes a long time but with our more than 100 years’ worth of data we can easily formulate new prototypes.
With more than 1/3 of the population expected to be over 65 by 2035, Japan will have a reduced labor force and shrinking domestic demand for products in general. How has this declining population affected your company and how are you reacting to this particular challenge?
In order to support employees’ flexible and diversified working styles, we offer various leave systems and a flexible working-hours system. Employees can take leave in 1-hour units as well as half day or one day, and also special leaves are available. In 2021 we introduced the flexible working-hour system that enables more flexible work styles for our employees. There are also supportive work environments established for employees with childcare, nursing or other personal responsibilities. Workstyle reforms, including flexible working-hours and working from home, lead to improvement of operational efficiency. Our goal is to make it easier for our employees to work and to cope with a declining workforce.
You are global players in the drivetrain technology sector, and you offer products for various applications. Which application is the main focus of your belts and which is your best selling product?
It's very difficult to tell which are our best-selling products. But they can be divided into the automotive sector where we have our OEM products and replacement products. These can be the same quality as the OEM product, but they differ a little from the OEMs because they are for replacing original belts. In Japan the belt is normally replaced at the second car check-up. And for agricultural machinery, after every season of harvesting rice you need to replace the belt. In addition, there is a need for replacement belts on vehicles such as snowmobiles and scooters.
The automotive industry is rapidly shifting towards EV’s. Could you speak to us more about how you're adapting to this change? What technologies and belts are you applying to the next generation of cars?
Currently we provide fan belts and camshaft timing belts for internal combustion engines (ICEs) cars but when they shift to EVs there will be no need for these because of the new type of motors. However, for power steering units, brake units and sliding door units our products will be used and there will be more demand for them. Nevertheless, the increase in demand for those parts will not fully offset the drop in demand for the ICE-related parts, so we are now discussing how we can compensate with other products. Currently we are of course focused on belts but we're trying to enlarge our business line up. One of the other businesses would be our construction business which provides waterproof material to the industry and a new plastic SF type of product. We also provide other materials but we are currently only selling our plastic or waterproofing material in Japan, so we're looking to expand overseas and we're sure we can find good markets for that. However, we don't foresee a big decline in ICE-related products until 2030 as there is still big demand in the aftermarket, especially in overseas developing countries such as India and China. Furthermore, the new type of combustion engines used in hybrid cars still require those parts and it will take a long time for developing countries to introduce EVs.
With ICE cars, the noise of the engine would mask other quieter noises such as the sound of the timing belt. With EV’s, though, these noises will become more apparent since EV’s don’t have ICEs. Are you working on ways to make the operation of your belts quieter for EV’s?
Yes, that’s certainly a challenge for us. When they test engines at car manufacturing facilities, they try to hear the sound of the belts using stethoscopes like doctors. The piston sound is even noisier, but they want to reduce the sound of the belt. There are various sounds, some of which are fairly faint, but we can distinguish what kind of sound is made by what part and we can change the mixture of the material used in order to alter the nature of the sound. At our factory we have a few hundred testing machines. We perform many different kinds of tests on our belts. We soak them in water and oil, we put them in freezers and expose them to heat, all to see how the performance is affected.
As part of your mid-term strategy, you’ve said that you want to develop conductive pastes containing metal nanoparticles, and metalized ceramic substrates. Could you tell us how you're going to develop these new products? Are you looking for partners to help you do it?
We provide our customers with conductive pastes containing metal nanoparticles and metalized ceramic substrates etc. They have been sold to several major domestic electronic component manufacturers and are still used today because of their high quality. They are new products, but it took 20 years of research and development to finally be able to bring them to market. We believe that these products have great potential and we would like to expand their sales in the future. Our paste products are guaranteed to be of high quality because of their proven track record in satellites where they must be able to withstand the harshest of environments. This quality is highly evaluated in Japan, so we would like to expand with them overseas in the future. In regard to the high-voltage EV market, demand for highly reliable electronic components is increasing, and we believe that our products can contribute.
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What would be your strategy to expand overseas sales and which countries would you be targeting with that expansion?
There are many manufacturers in Southeast Asia and Taiwan that require electronic materials and metallized ceramic substrates. These products have been developed by applying the dispersion technology required for processing rubber products, so our strategy would be to leverage on this which is undoubtedly our strength.
You're also offering a waterproofing system for roofs and metal sheeting, and construction is an industry that is booming, especially in Southeast Asia. Can you tell us what your goals with these materials are?
We're number one when it comes to waterproofing membranes made of synthetic rubber. There are different types of waterproofing, for instance a type that is used in asphalt. Because our rubber membrane is made of EPDM (ethylene propylene diene monomer) synthetic rubber, it is superior in durability and weather resistance. The product name is Neo-Roofing, but what's important is to call it “Mitsuboshi Belting Neo-Roofing” because Mitsuboshi Belting is synonymous with “Good quality”. We are highly regarded for our quality, so we always put our company name, “Mitsuboshi Belting”, in front of the product name. We would like to retain our company name “Mitsuboshi Belting” because that's the symbol of quality and the brand we have established. Since there is “Belting” in our company name, people might think, oh, it's only a belt company. But now thanks to our other activities, they know that we have various divisions.
Your company offers belt solutions for clean energy such as wind turbines and also factory automation. How have you tailored your belts to these demands?
Our Freespan belts are used in wind turbines across the globe and there is a call for renewable energy, so there's demand for that. Our company has centralized production at our factory in Poland. This Freespan belt is used to change the angle of the turbine blade.
In terms of robotics and other fields, there are three things that are used to transmit the power for motors - belt, chain, and gear - and what's good about belts is that they are easy to handle, they’re light and they’re oil-less. The main issue with belts is their weakness because they are made from organic material. So our challenge was to increase the strength of this belt and we were able to achieve that with our products like the Giga Torque belt, so that now we are able to replace chains with belts. We would like to continue working to improve the quality and the strength of the belt so that it's long lasting and it's strong.
Europe is a real leader in wind power generation and has created some of the world’s largest offshore wind farm projects – for example, Hornsea Project One in the UK – and you have this operation in Poland. Why did you choose Poland and are there any other countries in Europe that you're particularly targeting with the Freespan belt?
We export our products from Poland to Europe and other parts of the world as well. We initially went to Poland in order to supply the needs of car manufacturers as a secondary processing plant. However, our business could not be sustained only with that, so we decided to have a Freespan factory there. At that time there was big demand for wind farms and our Freespan belt became a big hit. So now we are increasing the production line and establishing a factory there.
You have earmarked aggressive overseas sales targets as the main means to achieve ¥75 billion by the financial year 2023. What are some of the strategies that you've put in place already and will continue to do so in order to achieve this sales target?
Our goal is to reach ¥75 billion in 2023 in overall sales of our company and overseas sales is an important component of that total. There are many small strategies that we're taking, and one of them is to focus on general industrial belts. For example, in the agricultural machinery sector we are currently supplying Japanese companies but at the same time we're looking into expanding to supply to American customers and European customers and we have actually started working with them.
Many customers have already completed their evaluation of our products and they have started to integrate some of our products into their products so we want to encourage this type of OEM sales and expand our field so we can add that to aftermarket sales. The European customers, especially, are very particular about the quality of the product so we have introduced a lot of testing machinery in our Ayabe Production System Development Center in Kyoto. We have done all the testing and reported all of the data. Our ability to do this quality checking and assurance is an important component when we are entering into the European market.
For agricultural machinery, it is especially important that it does not stop while it's operating. For example, while harvesting rice, if the belt breaks in the middle of harvesting, the harvesting time is limited, and you cannot continue working. That’s why it's important to have a strong belt that can last at least one whole harvesting season.
In April this year you set up a sales office in Indonesia. Can you tell us why you chose that location to set up your office?
That is a very good question. We have two belt factories. One is for OEM and one is for the aftermarket in Indonesia. Since we had our sales division split across both factories, we wanted to combine them into one to increase efficiency. Another reason is that in Indonesia, if you are a foreign affiliated company, you cannot import and sell products from other companies. In order for us to do that, we bought a local company which has existed for a while and is registered as an Indonesian company. So, we can now sell not only belts but also our materials: construction materials, waterproof materials and other products.
Especially overseas, we cannot simply sell those waterproofing sheets alone, but we have to work together with the actual workers or the construction companies so we have also found good partners. So that's our approach in Indonesia, Thailand and Vietnam.
You have been present in America since 1973 and you're also present in Poland, China, Indonesia and of course Vietnam. Moving forward, which new countries would you be looking to gain a foothold in and what method would you employ to achieve that?
India is actually a big market that we are focusing on. We entered India 10 years ago to supply car manufacturers, but after a few years we moved to a larger factory due to more demand. That facility will be our big foothold going into Africa and Europe.