Bethel: The diverse manufacturer

Could you tell us about your background and how you got to where you are now?

I studied applied physics in the USA and was focused on optics because lasers or fiber optics were very popular fields to study back in the 1990s. So when I came back to my father's company, we decided to start a group call Hudson Laboratory, which makes thermal wave analyzers.

I was one of the engineers that developed those machines, so I started my career from there. Dentistry was not my field originally, but I went on to study it afterwards when I became manager of a team.

My background is in manufacturing and engineering, which are a little different to each other. Manufacturing is about using experience and know-how to make something. Our main business is with Panasonic, who are the biggest customer for our business. About 60% of our sales go to Panasonic.

The clients who commissioned our work would give us the drawings for the order specification and tell us how much money we would need to build the product. We didn't have control over any of that, we just followed whatever they asked us to do, and they're a very good company, and we learned how to become a manufacturing firm through our partnership, and we've been doing business with them for more than 40 years. We learned all about quality control and manufacturing control from them.

However, because we were just doing whatever they told us to do, we didn't do any engineering. We didn't design anything, we just implemented processes. After 10 years of that, my father thought that it was no good to just follow a client, even though it was very stable business that we had with them. Profits were not as much as we expected, as such, we decided to make items through molding and plastic injection. Even after we did that, profits were still not great and we decided to start making a thermal wave analyzer, which would be our own product and brand. Through Panasonic, we learned many things, especially about quality, delivery and making things at lower cost that we could apply to our own products.

We started in the dentistry field in 2003. Back then, we were approached by a company that found us on the internet and asked us if we could make a dental product for them, so we spent 2-3 years building them just before the Lehman Brothers’ financial crisis.

It was very difficult, and when the financial crisis struck, our overall sales fell by 40-50%. It was very severe for most of our product lines, but the dental product sales were not reduced at all, and we found that even during times of financial crisis, sales of dental and medical products could remain very strong. Since then, we have started building ever smaller versions of our products.

Can you talk about the synergistic benefits of your various product divisions and how they help your company develop new products?

The plastic, manufacturing and thermal analyzer businesses are totally different. Usually when people start a business, they start on one product and then grow into related product spaces. We could do that for our molding and plastic injection business, but the thermal field is totally different.

Many people ask me where our thermal know-how came from, since it is not connected to Panasonic. Back in the 1990s, the national lab in Tsukuba called AIST (National Institute of Advanced Industrial Science and Technology) used public money to focus on research that would be beneficial to Japanese society, business and economy. They were looking for partner companies to make products based on their research and we met with one of their researchers working on thermal conductivity and had discussions with them.

As we were a small company, we didn't want to enter a field where large firms would be competing, so we began this thermal conductivity measurement business with the national institute, and it’s been operational since then. It’s been a high-risk venture and it’s been going for more than 20 years without being as successful as we’d hoped, but we’re still hanging in there.

The Japanese population has the oldest average life expectancy in the world of 85 years. More than one third of the population is over the age of 65, which means a reduced labor force and less demand for products in general. How has this declining demographic affected your company and how are you reacting to this particular challenge?

It's very hard for us to find appropriate staff. Regardless of the population decline, for a company like ours, based in Ibaraki, it's not easy to find people to work for us, even on a part time basis. Our advertised wages are a lot lower than the average and the population is decreasing, so right now, there are only two ways of overcoming this problem. One is bringing in foreign workers from places like Vietnam. Right now, we have some foreign workers, and they are very hard-working people. The second is that we try to build machines in order to reduce reliance on human staff.

Will you be exploring ways of bringing overseas workers and money into your company?

It depends which business we are talking about. Our dental business sees a lot of potential overseas. Currently, we are selling to companies in France, Germany, and probably this year, we’ll be in Russia and Saudi Arabia too. We believe there is a much bigger market outside Japan, so we are looking to push this business into the US and further into Europe also. Overseas prospects vary depending on the product division.

Is there any technology that your company has developed, whilst catering to Japan’s aging population, that you foresee being used abroad in years to come as the populations of overseas countries also declines?

We have a product called the sponge brush, which is designed for people who cannot brush their teeth by themselves. There are two kinds of people who it’s targeted at. First, patients with severe injury or illness in the ICU, perhaps on a ventilator; nurses can use the sponge brush to clean their teeth and keep the mouth moist because the mouths can get very dry, which can lead to pneumonia. The sponge brush was designed with the advice of dentists considered.

The other type of target customer is the one who's elderly and stays in their house, but they cannot move around, so family members help them to wash themselves and brush their teeth.

Are there any particular countries that you see this product being needed in?

Not yet, but before COVID started, we were planning to go to China. There's a big exhibition in Shanghai, and China is also facing the problem of an aging society. One of our distributors suggested we go there, but then the pandemic, struck so we couldn’t.

Could you talk to us more about how you're using 3D printing and how you're able to do high-mix, low-volume manufacturing that your company engages in?

We have 3D printing machines which we use in two ways. Firstly, we use them to make prototypes which the customer may have asked for. We start by making drawings and at that stage, we consult our clients, and then once the drawings are approved, we can print a 3D prototype which the clients always prefer to have so that they can get the look and feel of a physical rendering of the item first. A 3D printer is very useful for making prototypes because it's very easily done overnight.

Another way to use 3D printers is to create actual products very quickly with them, which don’t need to be made of other materials, like metal. For example, we can make newly designed jigs easily from the prototype design drawings all the way to the final product with these machines.

Can you tell us more about the technology behind the TEFOD analyzer and which customers you are targeting with this type of technology?

Our analyzers can measure the thermal conductivity of CFRPs. We believe there will be injection molding with CFRPs very soon in the future. This product was started by a professor who was working with automobile manufacturers that were looking for new materials for EVs. They needed lighter materials and CFRP was one they wanted to use.

However, using CFRP to start making new products involves a lot of waste material. As a result, they wanted to make the material recyclable so that it could be reused in the future, whilst still ensuring that the product remained strong enough. To do this, they had to measure the thermal conductivity of the material and that’s where our thermal conductivity analyzer can be useful.

Are you partnering with any other companies and if not, are you looking to form such partnerships?

A few years ago, we had talks with some automobile company from Germany, but we haven’t done much about it yet.

Could you talk to us more about your R&D projects, some of the main discoveries you’ve made and the ones that you're most proud of?

It depends on which product division we are talking about, but for the thermal conductivity measurement devices, we only have ten people, and most of them are from an engineering background and are based near Tokyo.

We mostly work with AIST and two or three other schools and universities. It's not easy to understand what they do there. Most of them are researchers and when they come up with something, they meet with us, and we discuss what we could do with their findings. Most of the time, we customize our products to match their evolving needs.

Is there any area, whether it's your medical operations or your OEM business, or even the thermal business, that you need a partner in? Is there a particular technology that you need to partner up with in order to expand your capability?

For this product we are researching on, we will need a partnership with a university or research center. For the dental products business, we don't need any partners, but we do need distributors.

How is your company contributing to miniaturization, which is important in the mechanical and electrical industries?

We buy small motors from China and then attach small gear box which contains tiny gears down to 1.6mm in diameter. We are calling it Geared Motor, or GM. The background of GM comes from a company who makes time piece. They designed all the parts, and asked us to build GM.

The time piece company decided to transfer their business to us when they could not get the results as they expected.

That was a few years ago, and currently, we are trying to sell GMs in the medical field. I don’t know exactly what kind of product it would be most beneficial for, but we’ve been approached by few companies who are interested in making their own product using our GMs.

We are also trying to build another product based on this. We will make it a little bit bigger. Our motors are DC, so they have a brush inside and as they turn, the brush becomes worn out and the lifetime of this product is short.

We are looking at making brushless motors that have 100 times the life of existing motors. These will be of great value in industries that use small components, like robotics or electrical engineering.

Are there any other areas of business that you would potentially want to expand your business into?

We want to expand into the factory machinery space. We are only a small company, so we cannot expand into areas such as consumer products, like TV’s and phones, which would require huge capital and human resources. We’re more of a B2B company.

Bethel’s aim is to achieve sales of 3 billion yen with 60% or more of that coming from the measurement business, the medical business and of course electronic business. Can you talk to us more about how you're going to do that? What is your strategy mid-term in order to achieve these sales targets?

We have received estimates for GMs from several customers for the next 5 to 10 years. That will be worth $1-3 million and will increase our sales by 10-20% just by itself. Also, we have our team of engineers looking into further medical products.

Sometimes we say that we target the medical field because it is so huge. However, if we try to make a medical product, it's very hard for us because the associated restrictions and standards are very high, for example environmental standards. Our responsibility is huge. If something happens, it will come back to us.

But if we go to medical exhibitions or shows, many people come looking for who can make certain kinds of products, even ones not linked to medicine. We’re trying to find customers who will need something more, and we’re currently looking into surgical instruments as a future product line.

You have had your operation in Vietnam since 2013. Are you looking to have another office or factory overseas in order to realize your mid-term goals?

Not really. I want to expand the operations in Vietnam, but not go to other countries.

How will you do that in Vietnam? What would be the strategy to expand in Vietnam?

We have a factory in Vietnam because the labor cost is much cheaper there. According to my company in Vietnam, it's about three to five times cheaper than in in Japan. Our sales team in Japan was trying to get local customers, but the price was much more than the locals expected, so our strategy is to expand the factory in Vietnam but do all the sales in Japan or Europe.

Imagine we come back to interview you again on the last day of your presidency. What would you like to tell us about your goals and dreams for the company? What would you like to have achieved by then?

As I’ve written on the homepage of our website, one of the most important things about our management policy is to satisfy the employees. I want to make them happier. As I mentioned, the salaries we pay to staff and workers are lower than average, even for Ibaraki prefecture. I was very shocked to see the average, but they're still work hard for the company, so in 5 years’ time, I want to make the average salary in the company be at least the same as the average of this region, or maybe even 10% higher than that.

The second thing I want to do is promote more innovation. I went to school in the USA during the 80s and 90s. Back then, I went to engineering school and my classmates all thought they were going to be the next Bill Gates, and so did I. I still want to create innovation. Not on the scale of Google or Amazon, but I just want to make a small innovation where I can improve people’s lives and contribute to society. In 5 years, I may have something to show you.