Thanks to its commitment to R&D, Tatsuno Corporation, a pioneer in the fuel dispenser field, has been providing innovative technologies in LPG, CNG, LNG and hydrogen to prepare the automotive industry for the age of sustainability. The Worldfolio sat down with Hiromichi Tatsuno to get his take on the changes in his industry as a result of the growth of electronic vehicles.
Due to environmental concerns, we are seeing that the traditional combustible engine being challenged by hybrid and electric vehicles (EV). What is your point of view on this transformation and what effect you expect it to have on your business?
First think about energy. Biomass, coal, petroleum products, natural gas, bio energy, geo-thermal, water, wind, solar and nuclear have all been utilized throughout human history. Together, they have contributed to the creation of the comfortable society in which we live in. Instantly replacing one source with another is simply impossible. Every year, the world requires more energy, not less. That means we’ll need to further diversify our energy sources, not replace one by another. During Japan’s rainy season, we experience winds of around 150 mph. These super winds and torrential rainfall often cause massive mudslides and severe damages to solar panels and wind farms. In Japan, renewable energy is not as safe as one would think, and it is hard to imagine that we will depend on renewables for our major source of energy in the foreseeable future.
Don't you believe that the speed of change will further push EV utilization?
In the old days, New York streets were filled with horse carriages. Once the automotive was introduced, it only took ten years for carriages to disappear. Take smart phone, the first iPhone was introduced 10 years ago. Today, they are omnipresent. Another example is the retail industry. In the last ten years, delivery services have greatly improved and companies such as Amazon have revolutionized our shopping patterns. If the product or system is real, it doesn’t take more than a decade to change the world. In comparison, how many EVs have been spread in the world in the last ten years? Today, there are around 3 million electric vehicles running in the world out of roughly 1 billion cars.
Can EVs and traditional vehicles be considered complementary?
I fully believe that EVs will be in demand, but it doesn’t mean that electric vehicles or battery-driven cars will completely wipe out the internal-combustion engine. Instead, they’ll create other markets, such as luxurious cars with a lot of new functions, or wheelchair-friendly cars, and so on, but this does not mean every car will change to EV.
I’m sure there are more advanced batteries being developed, but it doesn’t mean that other sources of energies are not needed. Rather they’ll be adopted into different aspects of society and competition will continue to go on like it does now.
As for my business, service stations exist because they make money by selling petrol. EV chargers could be used as a free or extra service for hotels, restaurants, or parking lots. EV chargers can’t make it as a stand-alone business. I heard that many cars are parked on the side of a road in many countries. If you do not have a parking lot in your house, will you still buy an EV? Even if there are 500 million EVs in 10 to 15 years, total cars will reach 2 billion by that time, which leaves us with 1.5 billion cars with internal combustion engines in the world.
Right now the top-selling cars in Japan are hybrid, which is still filled with gasoline. A hybrid car can run for a long time with good fuel efficiency. This will extend the life of petrol but not delete its necessity.
There is a new hydrogen plant being built in Australia. If the cost of hydrogen goes down, it will represent another viable business chance for service stations. For gasoline, hydrogen, or other liquid fuels, you don’t have to worry about battery life. EVs are using a huge volume of batteries. These batteries need to be recycled, treated and their production requires a lot of rare metals. We have to find a way to deal with those used battery in the future, since we are not ready for it. As for the energy, immediate change is not possible.
Of course, I am not saying that the present energy mix is to stay the same for the future. What I expect is the sustainable development of the right energy mix. If you put oil through the refinery process, you can get various products such as gasoline, diesel, jet oil, kerosene, naphtha and so on. We have to use all of them. You can’t just say “I don’t need this product at all”.
You recently signed a partnership with MADIC GROUP (France) to expand your business in French-speaking Africa and in Western Europe. Could you tell us a little bit more about your international strategy? And looking at the future, what markets have the highest growth potential for your company and why?
Because we have no factory in the United States, we’re focusing on markets outside of America. Our target markets include Asia, Europe, Africa, and so on. Besides the present gas pump business, we concern ourselves to adopt hydrogen technologies for the future of hydrogen society. We have been investing in hydrogen technology for many years and we now offer a new product called the HYDROGEN-NX.
How do you differentiate yourself from your competitors?
We have confidence that our gas pumps are the most precise and reliable. Under international regulations, 0.5% is the permissible error margin. Once, one of our oldest customers in Japan told me that a 0.1% error translates into a profit of millions of dollars a year in his business. For that reason, we stress on better meter accuracy, durability, and reliability among other things. It’s the same in with our hydrogen pump. We’re supplying hydrogen meters with a 0.5% error margin and it is currently the best in this industry.
Quality control is also our strength. We use automated equipment with little room for error. At the moment, we’re offering a package that includes pumps, level gauge, and other devices. For pursuing our global business, we need global partners such as local service provider, software companies, so on. When it comes to software, we have to maintain constant communication with our customers and adapt to their sales strategies. In Japan, we’re supplying stage three vapor recovery systems. This system enables dealers and service stations to save on vaporized gas.
On top of manufacturing the pumps, you also offer an array of construction and consultation services. Can you tell us a little bit more about the unique products and services that you offer?
In Japan, Tatsuno’s portfolio includes construction, manufacturing, and service. Here, services are very important. If day-to-day service level is unsatisfactory, the customer will never appreciate our product, as well as Tatsuno itself. It’s important for us to strengthen client relationship. Through their daily feedback, we can develop new technologies and pursue best practice. World-class service is essential to business. It is the most important aspect to keep in mind. Our customer’s business starts when he buys a Tatsuno product.
Can you tell us more about your R&D capacity?
Tatsuno: While we’ve handled gasoline, diesel and LPG, we have mainly dealt with liquid fuel. But with hydrogen, we have to develop new devices for ultra high pressured gas. It started out as a huge cost but we’ve been cutting it down over time. Without lowering it, we can’t achieve a future where hydrogen is widely used in society. We are continuing to invest in our R&D facilities, production facilities, along with developing new products.
Your company is famous for being a pioneer in developing many original products. The latest example is the awarded SN08 overhead hanging type pump. Can you tell us more about your product development?
Tatsuno: The overhead hanging type pump was originally developed by my late chairperson who had hundreds of patents personally. When my father-in-law invented the overhead pump, it was during Japan’s economic boom. Real estate prices were soaring and buying land was extremely costly. The overhead pump allows its user to maximize land usage as it needs very little space. Today, these pumps are popular in India.
We’re encouraging engineers to get the patents. I think the source of innovation comes from our customers. If some of our customers run into a problem, it’s a chance for us to think of a solution. If a customer doesn’t experience any dissatisfaction, we don’t have to make something new. When the customer complains, saying for example that the nozzle is too heavy, then we make a better, lighter nozzle.
Recently, water leakage has been a problem. Our level gauge can detect if there is water in the tank. However, when the connecting pipe is made of steel and corroded, then water is able to enter the pump where the level gauge can’t detect it. This event could happen during typhoons where there are huge amounts of rain water. If someone puts water along with fuel in his gas tank, his car could stop while driving on the highway. To solve this problem, we developed a new pump that can detect signs of water and stop the device before it is used.