Japanese companies like Chuo Kakohki are embracing innovation to maintain a competitive edge in an ever-changing market.
During the last decade, new manufacturers from countries like China, South Korea, and Taiwan emerged, reproducing Japanese models at significantly lower costs and reduced quality. This development compelled Japanese manufacturers to shift their focus towards B2B markets and more specialized niches. Given this macro environment, what do you believe will be the core strength of Japanese companies?
Foreign clients often seek reliable and stable business partners, such as Japanese companies. We consistently meet their expectations, which is a distinct advantage we possess. While some manufacturers may excel in price competitiveness, Japan is renowned for its strong work ethic and discipline, which significantly elevates manufacturing standards and product quality. This unique characteristic contributes to the enduring success of numerous Japanese businesses. Moreover, the Japanese embrace the monozukuri spirit as a fundamental principle, fostering a relentless commitment to improving both our products and processes. Although our initial product costs may be higher, they prove to be more cost-effective in the long run due to the extended lifespan of our products. We firmly believe that few other manufacturers have attained the same level of customer-centric approach as Japan.
Japan currently faces challenges due to its aging population, leading to a shrinking domestic market and a shortage of labor force. How has this demographic shift impacted your company, and what measures have you taken in response to these challenges?
We are actively seeking to expand our workforce by recruiting new personnel annually and offering on-the-job training (OJT) opportunities. To address labor shortages, we have also begun employing foreign workers from Vietnam who possess strong educational backgrounds and expertise in engineering and design, having graduated from reputable universities.
Our goal is not only to attract new talent but also to create a positive and supportive work environment, fostering a long-term commitment from our employees. To achieve this, we are committed to offering enhanced social packages and benefits. We aim to not only bring more individuals on board but also to retain them. While this presents its own set of challenges, our strategy revolves around maintaining a healthy and conducive work environment for our staff.
Transparency is a fundamental aspect of our approach. We want to openly communicate our goals, initiatives, and how we intend to accomplish them. This transparency serves as an attractive quality for potential recruits.
We offer in-house custom-made manufacturing for our customers. We offer a package that includes procurement, logistics, production, final product and maintenance. We are a one-stop shop for many clients.
We also updated our logo. We incorporated this logo on the sleeves of our uniforms for illustration purposes but also understanding purposes. We need to have small and attractive solutions such as a good logo and new uniforms that can capture young people’s attention.
Given the anticipated decrease in Japan's population to less than 100 million by 2050, how do you envision the future development of your market in the country? Are you contemplating compensating for the declining domestic demand by exploring new opportunities overseas?
We are already selling some of our equipment abroad, and we want to do more. There's a growing demand for our specialized machinery. We work closely with Japanese companies and we provide equipment to Japanese clients who are moving their production overseas. In China and Europe, we supply the essential parts, and our partners there handle the customization, assembly and installation for their clients.
Is your company currently in the process of seeking new partners in emerging markets to facilitate its expansion into foreign markets?
Presently, we are in discussions with American and Canadian companies, focusing specifically on battery components, a rapidly growing market. One of the promising markets for our equipment is related to advanced materials, specifically in the field of battery components. We are trying to enter the field of semiconductors and battery component manufacturing. Our mission is to establish a presence in the US and Canadian markets within these industries.
We are interested in the automotive industry as well, especially with the shift from combustion engines to EV. There will be a rise in demand for EV batteries which will increase the demand for our equipment. We would like to introduce our equipment and provide support to EV battery manufacturers.
What specific equipment would you like to introduce to these industries?
We aim to introduce vibration equipment in the field of battery manufacturing. Especially the vibrating drum dryers and mills, which is introduced across the battery manufacturing processes. Unfortunately, we cannot mention any company names since we must respect the agreement we signed with clients in Japan, America, or Canada.
What sets your company apart from competitors in the field of vibration mills and vibration dryers?
Our track record distinguishes us. In 1961, we became the first company in Japan to introduce vibration mills. Over the years, we have amassed extensive knowledge and technical expertise through our business endeavors. We are renowned for our reliability and have supplied approximately 1000 vibration units within the domestic market. Moreover, we provide comprehensive after-sales services and maintenance, fostering a large base of loyal, repeat customers. Chuo Kakohki not only offers customization and technical support but also places a strong emphasis on environmental responsibility.
Do you typically recommend customers to adopt your entire recommended product lineup, or can your products be synchronized with those from different manufacturers? How do you ensure the compatibility of your products with other manufacturing systems and technologies?
To meet our customers' requirements, our testing department initially analyzes the composition of the materials provided by our customers. These tests are frequently conducted with the customer present. Our tests ascertain the optimal drying conditions and identify the most suitable equipment for the customer's product.
We maintain a commitment to investing in our research and development (R&D) to enhance our technologies. While we encountered initial challenges with our dryers, we have used these experiences to develop improved equipment. Presently, our R&D team possesses ample experience to customize and modify our equipment according to our customers' specific needs.
Chuo Kakohki does not have a lab to create products from scratch; however, the company collaborates with customers to develop tailored solutions. The company possesses several patents related to vacuum, vibration, and beading technologies. Can you highlight one or two unique patents or products developed by your company that no other company in the world has been able to create?
One of our patents is related to the exit valve on our vibration-drying drums. The position of this exit valve is of paramount importance. Unlike conventional drums, which have their valves located on the side, our innovative design places the valve inside, in a more centralized position. This configuration not only ensures uniform drying but also enhances energy efficiency and user-friendliness. The center of the drum as well and its easy accessibility is something that defines our machines specifically. We have patented this design and have outstanding performance with these dryers.
We worked with Professor Fuji of Nagoya Institute of Technology to conduct equipment research and established a nano hollow silica particles manufacturing process. In addition to our collaboration with academic institutions, we also cooperate with governmental agencies who provide financial aid and incentives. We are currently working on a new type of drying process related to microwaves, to produce ultra-precision powder. It is a very new technology in the drying industry so it has to be done in cooperation with academia and governmental institutions.
Does your open innovation extend to foreign partnerships?
Until now, we did not have any opportunities to attract foreign companies to participate in these types of R&D approaches. We are currently collaborating with Nippon Koshuha, a company renowned for its expertise in microwave manufacturing. Our collaboration extends to partnering with other domestic companies similar to them, which possess outstanding materials and technologies that we do not have ourselves.
Regarding your international expansion, you already have multiple partnerships and you recently opened a new factory in Vietnam. Furthermore, you also participate in a lot of international trade and exhibition shows. Where are you planning to expand moving forward and what strategy will you employ? Are you considering M&As, joint ventures or opening new factories?
Given that we have recently established a design office in Vietnam, our primary focus is on nurturing its growth and ensuring its success. We plan to concentrate our efforts on this venture before entering new markets. Our next step in Vietnam would be to explore the possibility of manufacturing our equipment there, leveraging our existing partnership. Additionally, we are contemplating expansion opportunities in either America or Europe.
When Japanese companies establish themselves in Southeast Asia, cost-effective labor often plays a significant role. Do you see your Vietnam factory as a potential leverage point for your expansion in Southeast Asia? Considering that the largest Chinese battery maker, CATL (Contemporary Amperex Technology Co., Limited) is planning to set up a factory in Thailand in the near future, are you considering expanding your presence in Thailand, particularly in collaboration with Japanese and Chinese automotive manufacturers operating there?
While our current focus is on Vietnam, we remain open to any potential expansion opportunities.
Looking ahead to your 75th anniversary, what specific goals and aspirations would you like to have achieved by then?
One of my goals is to expand overseas, not only in Vietnam but also in other regions.