For over 60 years, MMC RYOTEC Corporation has been supporting a variety of industries with its high-quality products, which include wear-resistant tools, rock tools and carbide materials & tools.
Japan’s been subject to intense regional competition from manufacturers in China, South Korea and Taiwan, who have replicated Japanese monozukuri using economies of scale and with a cheaper labor force. Still, we see that Japanese firms have maintained leadership in certain high-mix, low-volume sectors. Could you explain to our readers the strengths of Japanese monozukuri? How have Japanese companies been able to maintain such niche leadership?
I think that the strength of Japanese monozukuri has been cultivated by the accumulation of the technique of a superior craftsperson. In Japan, craftspeople are respected, and their techniques have been handed down through the generations. We have been manufacturing engineered carbide products for many years and keep improving our skills and technique in the manufacturing process. Finally, we have succeeded in producing excellent quality products such as hot rolling tools and rock drill tools. This is why our targets are the high-end side of the market or field. We are aiming at high-end customers for all our business divisions. Our business strategy is to focus on providing stable quality and technical support along with our products, which allows us to compete in the market and secure customers.
Japan’s population is aging, with 28% already over 65 and a fertility rate of 1.37, and this is causing two problems for businesses. First is the shrinking domestic market to sell products to, pushing companies to expand to overseas markets. Secondly, it is getting harder to find and recruit talented engineers and salespeople. What steps are you taking to react to this population change?
Japan’s shrinking domestic market or population decline does not pose a threat to our business because we are targeting the basic infrastructure industry not only in Japan but also global markets that are booming. We foresee a growing demand for our rock tools and other products. There are two types of production lines in our company. The first is mass production where we apply automation to reduce the manpower required working in production, and the other type is based on craftsmanship or custom-made approach in which the monozukuri tradition is passed down. With the decline of the population, passing down our know-how is becoming even more crucial. We hire new graduates in Japan every year to balance our workers from different generations. Simply introducing high-spec machinery to manufacture high spec and high-quality products can be easily replicated by other countries like China or Taiwan if they use the same machinery. The value-added factor, which requires craftsmanship, is what is important. We truly and highly regard craftsmanship, therefore we are trying to differentiation strategy from competitors with this craftsmanship.
Your business is split into three main divisions: wear-resistant tools, rock tools and carbide materials & tools. Among those three divisions, which is your biggest revenue generator, and which division do you see has the most future potential, especially in international markets?
There is a good balance among our three business divisions, and we want to continue to push these three divisions forward. In terms of turnover, rock tools, which are used in mining and construction sectors, are the biggest among three divisions. The rock tools business is growing owing to increasing demand of non-ferrous metals in the long-term, exploration and production of mineral ores have been expanding continuously, therefore the demand for rock tools is expected to increase accordingly.
Regarding wear resistant tools and carbide materials, we are proud to have launched a variety of high-quality custom-made products which satisfy customer needs in various infrastructure industries. We are sure that the market for wear-resistant tools and carbide materials will grow as well as rock tools because the consistent quality and high-precision carbide materials will definitely be needed for the customers who would like to increase their productivity.
When we interviewed Kiso-Jiban, they told us that the soil composition in Japan is very complex because it is subject to numerous natural disasters. Your SUPER MAXBIT drill can overcome the earth burden layer and reach the destinations where you want to drill. Having a dominant market share, can you tell us about the advantages that you have as a Japanese rock drilling expert?
Japan’s ground structure is unique because of the frequent occurrence of earthquakes that cause cracks in the ground where underground water penetrates, making it difficult to drill the ground. With our overburden drilling system SUPER MAXBIT, however, we can drill straight into the ground. Straight drilling and leaving the casing pipe in the hole in a wide range of ground conditions is the strength of our technology. Given the complexity of Japan’s ground condition, the series of SUPER MAXBIT can be applied anywhere in the world. In fact, our products are already being used in the USA, Asia and Europe. Our products are well-received by the market despite the higher cost.
One of the applications of your slot die technology is for lithium-ion batteries for the next generation of cars. EVs have now overtaken hybrids as the best-selling non-gasoline cars in the world, and this trend is set to continue in Japan until 2035, the year earmarked by which all cars will be EV. Can you explain to our readers why your micro-fine cemented carbide finish is so valued to create these batteries?
The main types of slot die’s lip materials are stainless steel and cemented carbide. We utilize cemented carbide for the customers who require an accurate straightness and precise surface roughness. We are proud to serve our micro fine cemented carbide grade, which has been developed for this special application. And customers can choose the slot die either stainless steel or cemented carbide according to their purpose and coating conditions.
In addition MMC RYOTEC's cemented carbide slot die has high sharp edge properties by using ultrafine grain cemented carbide, and a variety of Coating Thickness Adjustment Systems, then it has been highly evaluated by many customers. According to the customer's purpose and coating conditions, they can choose the slot die’s lip materials either stainless steel or cemented carbide, and the coating thickness adjustment system by communicating with our well experienced technicians. Also, our technical services, such as fluid simulation and coating tests, are available to propose the optimal shape of the slot die for each customer's requirement.
Industry 4.0 is ever-more prevalent in manufacturing, with IoT, big data and machine learning integrated into production lines worldwide. How are you incorporating digital tools into your production and how are you aiding the machine makers who use your tools as they transition to digital production lines?
In our production, we are incorporating IoT, digitalization and advanced technologies gradually by cooperating with the engineering department of Mitsubishi Materials Corporation, who is our parent company.
The machine makers who acquire our products are the ones concerned with digitalization as autonomous production will surely become mainstream in 10 years. The durability and trustworthiness of our tools will be key. Therefore, we are working toward providing tools and materials appropriate for autonomous production. Rock drill manufacturers are one of our principal clients who use our durable tools in their machinery that will be operated in deep underground mines by remote control system.
Could you explain to us more about your contribution to SDGs? What role is your company playing in this endeavor?
In our production, we are highly conscious of reducing our carbon footprints by reducing the amount of electricity used in our factory, perhaps improving the insulation of our factories. We want to develop products with more environmental uses. The SUPER MAXBIT is used to drill into underground aquifers, where clean and safe drinking water can be obtained for people, and our coating tool slot-die is used for manufacturing solar panels. These show that our products are used to produce other products that contribute to the environment.
Since 1958, you have been a subsidiary of Mitsubishi Materials Corporation. What advantages does that bring to your business operation, and to what extent can you make independent decisions as a subsidiary?
We are a 100% subsidiary of MMC, but we have the independence to some degree, such as deciding as to which areas to invest in. The sales division used to be in MMC while MMC RYOTEC was in charge of the production and development of products. Since April 2021, however, the sales division was transferred from Mitsubishi Materials Corporation to MMC RYOTEC, and we function independently in that regard. On the other hand, more than half of our sales come from MMC’s overseas sales companies, and we have joined hands in entering overseas markets. MMC Group has an excellent rock tools sales team in Mexico, and with that, we are trying to penetrate South American mining and construction markets together.
Are you interested in establishing more factories in Mexico? How do you plan to further develop your overseas business?
No, we are not interested in establishing a new factory in Mexico because our strategy is to develop and manufacture high-quality products in our mother factory in Japan and our sales company can deliver products within a short time from their local distribution center to the South American market. Our overseas strategy is to fully leverage MMC’s sales network, which is present across the globe. We often take our first contacts from Mitsubishi Material’s sales network, then we dispatch our engineers to overseas companies to join meetings regarding specifications. In the past, I visited companies in Brazil, Mexico, the US and Europe once every month. Through this kind of communication, we have successfully developed new customers with our products pertinent to each specific need. Producing tools and materials in Japan allows us to have high-quality products whilst being able to offer after-sales technical services, which needs to be done locally. Our custom-made products are developed through intensive meetings with our customers in order to deliver products that match their required specifications. It is important to communicate with the customers. Some of our wear-resistant tools and rock tools have to be maintained by providing reconditioning service, so we work together with MMC’s sales companies that have technical service stations to reach out to the customers.
Is the Latin American market your main target at the moment?
Yes, South America is one of our important markets for rock tools. But there is little market for high-quality wear resistant tools and carbide materials. We are looking at China and Europe for our slot die for the manufacturer of EV batteries. As for the rotary die cutter, China and Southeast Asia are our next targets because the potential users of diapers are increasing rapidly.
As the new president, what product are you looking forward to seeing developed and gets you excited thinking about its trajectory?
Well, we have a variety of excellent products, however, the slot die is the most exciting and worrisome product among them. The target industry for slot die products changes every 10 years. Thirty years ago, the main target was audio cassette tapes, and 20 years ago we shifted to LCD panels manufacturers.Today, the market has shifted to lithium-ion batteries. I am excited to look for the next market for slot die, but at the same time, I'm also worried if I can find the next market accurately and ahead of competitors.
Is it applicable to the solid-state lithium-ion battery?
Yes, our slot die can be applicable to manufacture the solid-state lithium-ion battery even if the fluid material may be a little different from current ones. We are confident to develop custom-made slot dies for the next generation.
What are your goals and dreams starting off as president? What do you imagine you would like to pass on to the next generation of presidents?
In terms of business strategy, I want to make our three core business divisions stable, profitable because their markets are not much affected by economic ups and downs and those markets will grow in the long term. It is important for us to consolidate our business to make it anchored and resilient. There has been a unification brought about by our newly established sales division. Nevertheless, I still feel that the company needs a better in-house structure, from marketing and development to sales, to be able to operate with the entire process. My continuing challenge will be to make the company more stable and robust. My goal is to keep expanding our operations and aim for the 100th-year anniversary in 2058 as an excellent supplier of engineered carbide products in infrastructure industries in the global market.