Japanese firm Chikusui Canycom has built its reputation by creating high quality products in the fields of brush cutting, agriculture, construction, and forestry inspired by its surroundings in Fukuoka province.
Canycom: Driving sustainability in forestry and agriculture
Japanese firm Chikusui Canycom has built its reputation by creating high quality products in the fields of brush cutting, agriculture, construction, and forestry inspired by its surroundings in Fukuoka province.
Over the past 30 years, Japan has seen the rise of regional manufacturers who have replicated the Japanese monozukuri process with cheaper labor costs, pushing Japan out of mass markets. However, Japanese firms are still leaders in niche B2B fields. How have Japanese firms maintained their leadership despite the stiff price competition?
Chikusui Canycom is the official name of the company, but everyone knows us by the brand Canycom, and we have four separate main divisions in the company. Those divisions are brush cutters, agriculture, construction, and forestry. We have especially put our effort into forestry these days. The forestry industry is usually looked at through logging trees and carrying logs, however, planting young trees after the logging and making them grow are also important processes. We focused on afforestation because it is not mechanized much in comparison to logging, and that is what differentiates our products from other companies. Our forestry machinery has made it possible to mechanize processes such as weeding and logging in the process of afforestation.
Our headquarters are located in the city of Ukiha, which is in Fukuoka prefecture. Ukiha is on the south side of the prefecture and it is a little less than an hour to get to the main city of Fukuoka. While we are small, we are proud to be a local company that not only produces and sells domestically, but also overseas to around 53 countries worldwide. About 90% of our products are produced locally in Ukiha, and last year we saw a turnover of around JPY 8.7 billion in sales. This year we are targeting overall sales of around JPY 10 billion, and our fiscal year is from January to December. We are now in April 2023, and we are already seeing results that suggest our target is achievable. Based on orders and forecasts, we are predicted to pass that target easily before the end of the year. It is also important to note that we separate our domestic and international sales, with exports actually exceeding domestic sales at around 56% of all sales.
The company motto in English is “Manufacturing is art,” but in Japanese, it more specifically says “monozukuri as enka,” and enka as you might know is a music genre considered to resemble traditional Japanese music stylistically. We are not using the word “enka” for our company motto because we listen to the customers’ voices like a song. Rather, we listen to customers’ requests with the spirit of enka singers (the Japanese word “nagashi”). Nagashi singers used to sing songs instantly by listening to customers’ requests. Like nagashi, we try to listen to customers’ requests and reflect them in our product development.
It is not as though we woke up one day and decided we would suddenly be a global company, and if you go back to 2004, our exports only accounted for 5% of sales. It was over our success that we started to introduce our brand name to foreign countries. Honestly, 2004 was a milestone for our company and it was when we started to achieve greater results in foreign markets. On a personal note, it also marks the year I joined the company. It really did mark a departure point, and since then, the company has had a focus on lower quantity and higher quality products. It was around this time that China and Korea started increasing the volume of their production and flooding the market with cheaper products. We felt that coming and have emphasized more value-added products rather than mass-produced ones.
In the early 2000s, we developed a niche strategy and attempted to tackle less popular markets. One example of an added-value product is our sprinklers, which are used in corn cultivation. It gives more reliable crop yields when using drip irrigation systems. Corn is not only a crop that is consumed by people and animals, but these days it is regularly used in the biofuel field, specifically for bioethanol. Not only in Japan, but worldwide we have seen an increase in the number of corn fields popping up, so we felt that we could take advantage of this situation and come up with equipment and machinery that could be used in the harvesting of corn.
Of course, a sprinkler system sounds quite simple in nature, but obviously, that is followed up with a lot of types of machinery that compliments the entire process of corn harvesting. Kaizen was key in this idea of introducing more niche products, and that is how we thought of corn as a market to tap with our products. We also have not just stopped at corn, we have since moved on to other types of agricultural fields such as palm oil which is grown in Malaysia and Indonesia. For that reason, I go to these countries quite frequently to discuss with the local farmers their needs and requirements for equipment and machinery. You might ask why palm oil and that is because, like corn, it is a target for biofuel production. It is widely used now as an alternative energy resource. Another product we see a key in this area is durian, and if you have been to Southeast Asia, you might have heard of it. It is a fruit grown in that region and is known to have a bad smell and a distinct flavor. During the COVID-19 pandemic, people were experimenting with methods for medication and durian became a popular choice as a home remedy. There was a belief locally that durian could help cure COVID-19 and there was an increase in durian fields in the Southeast Asian region. As such, there was a need for equipment to help harvest the durian, so of course we saw this as an opportunity to introduce our products for harvesting.
We are aiming to go to areas where the local Ministries of Forestry can permit us and we will not go to an area where we are not permitted. To summarize our shift away from mass production, I think it simply comes down to our company’s enthusiasm to go to places or to cater to industries that major companies do not want to go to. Creating niche markets allows us to cross the boundaries beyond Japan and export increased output to overseas markets. For this kind of activity, we have been highly praised by the media and in the past year, we have been highlighted by Time magazine. Additionally, we have received an award from Forbes magazine known as the Japan Small Giants Award.
We received the Grand Prix from Forbes Japan only once. The official name of the competition is “Small Giants Award 2022-2023” and it is organized by Forbes JAPAN. We participated in Kyushu Yamaguchi Venture Market 2022 (KVM) and won the grand prize. That result led to the participation in the Small Giants Award. That is not to mention our selection by the Japanese Ministry of Economics as a company that recruits from the local area and for that selection, we were awarded. The official name is “Companies Driving Regional Growth".
Here at Chikusui Canycom, we have an initiative called Vision 300. There are three main goals in Vision 300 all centered around the number 100. The first is to become a 100-year company, the second is to penetrate 100 countries worldwide, and the final one is to achieve revenues of US $100 million. Our specific attitude towards design also needs to be mentioned here, and all of our machinery uses a specific color, and they represent our company. We use the acronym DNB, which stands for design, naming, and brand. Designing and branding all of our products as uniquely ours is important for us and we feel without it, we really cannot achieve brand recognition inside and outside of Japan.
We want to become a company that people come to when they have problems and we want to be able to promote the best solutions to solve problems for our customers. These days we would like to shift from just another production company. To do so, we advocate TBC, which stands for targeting, branding, and consulting.
The ultimate goal is to establish the CCS or the Canycom Consulting Salon, and this concept is a little bit of a critique of Japanese people because we are not known for being good at changing things. Once we adopt methods, we tend to do the same things over and over again with little improvement or mechanization. We are trying to teach people these ways and approach people with new methods of agriculture and new solutions to conventional industries. Essentially, we want to be a company that proposes to people better lifestyles and working-life balance. We would like to support people involved not only in agriculture but also construction and forestry. Why not achieve that balance with great tools and machinery, and that can be procured through us?
Japan’s demographic situation is having profound consequences on Japan’s agricultural sector. It is increasingly difficult to find farmers today and approximately 40% of new farmers are quitting within 5 years. It is estimated that the number of farmers in Japan will decrease to around 700,000 by the year 2030, and as a result, we are seeing a gradual consolidation of Japanese farms away from smaller, family-run plots to larger, centralized entities. How are you reacting and catering to this shift that we are seeing within the Japanese agricultural sector?
As you have mentioned, it is hard to recruit in the agriculture sector, and even at job fairs, we find it increasingly difficult to attract people to Fukuoka. That is a big problem being a local company. There are two points to our fight back against this problem. Luckily, we are not the only local company here in Fukuoka and the struggle is real for many local companies. It is not that the companies are bad, it is quite the opposite, however, I think the core problem is rooted in the typical Japanese work style. Once someone commits to working here, it is hard to shift, move, or follow another career path. Many young people struggle right now because Japanese companies tend to require a lifetime commitment. Many young people might try out careers in agriculture because it sounds nice to be so close to nature, but soon enough they discover that it is also routine and can be exhausting. Annually, around 30,000-40,000 people are trying to shift careers to agriculture but almost all of them quit after 4-5 years. They understand that agriculture is not an easy job.
You also have to consider how agriculture jobs are perceived, especially by young people, and it tends to be looked at as quite old-fashioned jobs. Many people who work in the fields harvesting crops tend to be older people who have accumulated knowledge, techniques, and equipment over many decades. The equipment tends to be old too, almost as old as the people who use them. In that way, we are trying to fight the situation with our machinery. Investment in new types of machinery can supplement people and compensate for the shrinking population. That in itself is a game changer, and I like to think that our company is standing at that point and providing those products. We want to improve the situation from all aspects.
Another approach we have taken is to introduce enthusiasm by not only relying on Takumi; a Japanese word that means skilled worker. We are all aware of how great Japanese rice is, however, these days only 3% of consumed rice is grown domestically. Companies like ourselves need to come up with more modern solutions so that we can draw the interest of people around Japan to do something about this industry. We have to come up with attractive points, especially for the younger generation, and by introducing breakthroughs and equipment, we can demonstrate to young people that you do not need decades of experience to do the job. We like to think of our company as revolutionary in a way because we are improving upon traditional methods. Let’s face the facts, agriculture, and forestry have been done in Japan for the past 50 years with no change whatsoever. The traditional ways of cultivating are preserved but at some point in time, those methods need to be modernized and become more attractive to the next generation of farmers. Again, that can be achieved through an emphasis on reinvestment; new equipment and machinery can be attractive and can help make the job much easier.
One piece of equipment we found interesting is your radio-controlled brush cutter, which specializes in mowing steep slopes with around 40-degree gradients and the radio-controlled transmitter allows for a communication range of up to 100 meters for 20 hours. What were some of the challenges you had to overcome during the development of the radio-controlled brush cutter?
The radio-controlled mower that specializes in tilting came into our minds as a product because of the Japanese geographical situation. Japan is a country with many mountain ranges and a lot of slopes. Taking care of bushes on a slope like that is obviously difficult to do, and oftentimes lawnmowers are operated by a person on flat surfaces. We felt that this kind of machinery had to be introduced for safety reasons, and areas such as mountain ranges are hard to reach. Without this solution, there is the possibility of wildfires. The reasons for the product simply come down to protection and safety.
Another unique technological development we saw that you had made is the NAGARA transmission system. It has the industry’s first ultra-low-speed driving with a top speed of 0.25 kph. Was safety part of the motivation behind the development of the NAGARA, and what are some of its practical applications?
Yes, the answer is pretty much the same as the previous answer. We prioritized safety and making harvest work more reliable and safer. NAGARA was introduced for that reason, and currently, it is only available domestically for regulation reasons. When you look at Niagara Falls or Yosemite Park, you will notice that a lot of the ground is rocky and mountainous. It is hard to perform agricultural activities at these locations and they were the inspiration for this project. We were motivated to allow our customers to perform different kinds of agricultural activities on any type of terrain. I believe that the NAGARA transmission is currently the slowest in the world, and you know what they say, slow and steady wins the race. There is a similar product in France that runs at a speed of 1 kph, and we beat that by running at a speed of 0.2 kph. Needless to say, we are not winning any F1 races with our transmission.
Is finding an overseas partner something that interests you to penetrate new markets or even develop new and unique products?
It is vital that if we are to introduce a piece of equipment in a foreign country, we have a reliable partner. In the US, that reliable partner helped us to get through certification for the American National Standards Institute (ANSI). Thanks to them, we were able to receive qualifications, but obviously, different countries have different standards. These are all local regulations that have to be passed to sell in a location, and obviously being a Japanese company there are issues. That is why local partners are so key and in our opinion a necessity. Additionally, the translation of local manuals and guides is also important to us.
We are lucky in that we have good relations with related companies, such as Komatsu in Myanmar. They are a huge Japanese company with a wide network and global recognition. I have talked to their CEOs to get first-hand information on how to get certification based on their experience. That knowledge is getting back to us as smaller local companies and we are adopting similar activities as the giants of the agriculture world.
In your Vision 300, you mentioned the goal of reaching 100 countries. How do you plan on achieving this goal? Could you elaborate more on your international business strategy?
We are standing on the precipice of some hard times right now because so many things are changing in regard to environmental preservation and zero-emission policies. The regulation policy itself is quite a problematic point for us because our machinery does include engines and those engines emit gas. The transition from engines to electrical machinery might be happening in the future, but we cannot exactly pinpoint when and how. The future is not always clear, and while the path right now is heading towards electrification, it is hard to see what shape or form that will take. We do buy engines from other companies and assemble them.
To answer your question, right now it is to go to places that still need engines. Additionally, we are looking for countries where the regulations are not too strict. Basically, we are looking for locations that would benefit from our machinery, but we will not be tied down by electrification and regulation. It is hard to do this in the EU and America, so I would say right now they are not targets.
You also must consider that we are targeting not necessarily by country but by industry. Biofuels are becoming necessities around the world right now, so we would like to be introducing our machinery to areas that utilize our products with biofuel crops such as corn. Another key industry is infrastructure, and I go to America frequently to talk to American infrastructure-related companies. They often tell me that America is experiencing a lot of problems with infrastructure deterioration. Concrete constructions were built there many years ago and that is now beginning to age rapidly. Improvements need to be made and I think our company can come in quite handy there. 20% of exports to the US are our carriers. They help carry heavy loads and are integral in a construction site.
Is there any goal or dream that you would like to achieve in the next 5 years?
Ideally, I want to change the perception of Japan and introduce more Japanese quality. What I mean by that is that Japanese quality is not just born by the product. You can buy many different products from producers all around the world, but Japanese products tend to carry so much more weight because of the ability, knowledge, know-how, and techniques that were applied to make that product. Additionally, after products are sold Japanese firms introduce after-service all in the pursuit of fulfilling the customers’ expectations and trying to go beyond those. This idea and philosophy underline the whole idea of Japanese quality and it is something that I would like to continue to preserve.
Interview conducted by Karune Walker & Sasha Lauture
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