For 55 years, HSK has been a pioneer in electrical discharge machining and produces the world’s most advanced pressing machines. It has constantly developed new technologies, exemplified in 2013 when it became the first company in the world capable of machining holes in curved material. It also invented the first completely chrome-free zinc-based anti-corrosion coating before anybody else. President & CEO discusses the innovation and monozukuri contributing to the company’s success and its openness to partnerships, particularly in the US.
What are your thoughts on the impact of Abenomics on the economy and global mindsets, and on HSK in particular?
We believe there have been some positive impacts of Abenomics. Firstly, we have received much support from the government on the project we are working on with Airbus jet engine parts. Secondly, there is a cluster called the “Special Zone to Create Asia’s No.1 Aerospace Industrial Cluster” where we applied for approval to bring the main base to the Chubu district. We became the first company in our class to get an approval from the government.
In terms of private and public partnership, the Ministry of Economy, Trade and Industry gave us funding for the amounts we invested in plant and equipment. About one-third of our investment is what we get from the government and so far we have received around 300 million Japanese yen. They also supported us with the interest rate of 0.7% for our loans.
To better understand the evolution of your business, could you recall HSK’s key milestones? What have been the most important steps in HSK’s 55-year history?
Our first key milestone since our establishment in 1961 was in 1963, when we started manufacturing aluminum extrusion dies and became the top manufacturer in Japan, and we have been doing business with our main client, Lixil, for over 40 years.
Our second milestone was in 1973 where we started manufacturing the extrusion dies for the ceramic honeycomb, of which we are also the top manufacturer in Japan. Our main client here is NGK Insulators.
We originally started in the airplane engine parts business around 1965 for EDM (electrical discharge machining) but in 1981 we started the surface treatment for airplane engine parts, which have become a key factor in our special treatment business.
In 1985, we started manufacturing gas turbine parts using our special technologies of EDM and ECM (electrical chemical machining).
Our fifth milestone was in 1991, when we founded the base of the press machine. This is a digital machine called the digital servo press, which cannot be found anywhere else in the world.
These milestones are all visible achievements that we have accomplished. However, it’s been half a century since we were established, and we have increased in employees since our foundation, so we are currently reorganizing and reconsidering our philosophy. Because no matter how superior the technology or technique you have, unless you know why you’re working or unless you have a founding philosophy for that it is really meaningless.
Could you tell us what are the main goals of your latest three-year mid-term management plan, due in 2019? How will you keep on being at the forefront of innovation?
Of course there are many ongoing projects but there are two pillars of our mid-term plans we want to base our growth upon. This includes giving the aero engine parts business a good foundation as we would ultimately want to supply these aero engine parts all over the world. Another pillar is based on the servo press machine. As we were the first in the world to invent it, we want to change and enhance the monozukuri way of doing things.
We really think that being at the forefront is in our DNA, and also our attitude to respond to our clients’ needs 100%. Our spirit is to positively deny the current situation because there is always a limitation to the current situation because things expire so we have to always look for new innovations.
By participating in the manufacture of Airbus’ new flagship A350, UK engine maker Rolls-Royce showed the world its trust in HSK’s components. What would you say are HSK’s key competitive advantages that attracted Rolls-Royce to choose your company?
For us, since the market for aero engine parts is small here in Japan, all we can do is go global. We are eyeing all the companies around the world and would like to supply them.
In 2014, HSK established a new plant in Komaki-shi, totaling nine plants across Japan. It is very rare for us to meet a company with such a number of facilities. Could you tell us more about the production process? Why does HSK keep on expanding its production capacities?
Yes, we have facilities from Narita to Okayama and the reason for the widespread facilities is because we wish to be as close to our customers as possible. In our mid to long-term plans we wish to expand our business abroad, but whether we will do this in our manufacturing facilities is still a question. For example, we decided to set up developments in Thailand because Lixil has business there. The Thai facility is a joint venture with Lixil. They are manufacturing their products and we provide the extrusion dies. However, of course that is a starting point, but since we happen to have a base in Thailand, we would like to utilize and take advantage of that.
We have been receiving offers from US and Chinese companies for gas turbine maintenance parts. If there are opportunities with American companies, we would love to collaborate. In terms of expanding overseas the most important thing is not simply creating facilities, but what we do with the facilities. Unless we have a good foundation for that, it will not mean anything.
Your corporate goal is to gain the reputation of being a ‘monozukuri company’, known all over the world. What is the impact of this vision on your business?
To touch up on our company’s history, when HSK started, the founder was the pioneer of EDM technology. He and his two colleagues were developers and researchers. One of his colleagues was utilizing the machine and took the monozukuri part. The other became the EDM manufacturer. Rather than focusing on creating the machines, we really want to focus on what we make with the machinery.
Since its foundation, HSK has constantly sought to ‘contribute to world advancement and progress of society through monozukuri’. Why is this so important for you, to contribute to society and grow your company respecting the environment?
Contribution to society as well as the environment is what we state on our website as our company philosophy, because even corporations are somehow public institutions. In our philosophy, we cannot only pursue the profit or happiness of ourselves, but rather we have to think about the happiness and profit of other people. Unless we have that, we cannot stand as a corporation. That is why we put a lot of importance on the contribution to society and local contribution, as well and the contribution to the stakeholders. We have to always think of the benefits of those stakeholders, and that is why we have to contribute to society and the environment as a foundation.
As a leader of a Japanese industrial company, what would you like world leaders, world investors or the millions of tourists that are increasingly visiting the country to remember of Japan?
This is my personal opinion, but I think the Japanese truly do have superior technologies and skills. But, we should be better at appealing, and promoting, this to all over the world. As I have been mentioning, there is no point in having amazing technology if we do not utilize it to contribute to somebody or society in one way or another. Although I do not have a specific example, the ideal situation would be that we would like to be able to send more messages to the world.