Since 1964, Futagawa Manufacturing has supplied tier one heavy industry players, such as Mitsubishi Heavy Industries, Kawasaki Heavy Industries, Komatsu, Hitachi and Kobelco Construction Machinery, with heavy machinery and equipment that has helped to ensure their leading global position. While seeking and working with international partners to develop new technologies and solutions, Futagawa, which is acutely aware of its industry’s impact on the environment, has put renewed emphasis on renewable energy and environmental sustainability. We spoke with president Masaya Futagawa to learn more.
In the past 25 years, we’ve seen the rise of cheaper competitors such as China, South Korea, or Taiwan who by replicating the Japanese monozukuri process can surpass Japan, but when it comes to high technology production Japan remains supreme. What is the essence of this monozukuri and how do you implement it in your production process?
The essence of monozukuri is meeting the client’s every need at a great price. We shouldn’t stray from any aspect of what the customer wants. All we try to do is manufacture and produce just how the clients want a product but also impress them with our quality and value. Since our establishment in 1943, we’ve been a supplier of Mitsubishi Heavy Industry and Kawasaki Heavy Industry for many years. And now we are manufacturing and supplying various parts and components for the big Tier 1 construction manufacturers such as Caterpillar including CAT Japan and Kobelco Construction Machinery. As a supplier, the essence of our manufacturing is producing exactly what our client wants.
This has been the foundation of our company and how we’ve remained steady through volatile times. There was a time when Japan was the top semiconductor manufacturer and everything was selling very well. At that time, Toshiba was the largest manufacturer of CPUs (central processing units). But soon after Silicon Valley was born and I witnessed the shift away from Japan and towards there. Through that era, I learned that even with a great product, you can lose the business you once had. Once I entered my family company, Futagawa Manufacturing, I was focused on increasing our value.
How do you ensure that the quality of your products remains the same even when they are produced abroad?
When we made a decision to establish a plant in China, our prerequisite to opening that plant was a commitment to Japanese level quality. Initially, this was very difficult. But once we placed Japanese-trained staff in the plant, we were able to maintain Japanese-level quality. We had Chinese staff come to our Japanese plants every month and meet local Japanese staff to share knowledge and know-how of production. This has been very helpful in ensuring the same high quality even while producing abroad.
Why do Japanese companies have difficulties marketing abroad and what can they do to succeed?
This is probably due to Japanese nature. Japanese manufacturers believe that good products will sell because they are well made, even without marketing them. American companies create an appeal for their products, which Japanese companies don’t do to the same level. Japanese-style sales do not focus on promoting oneself and if this was done more, Japanese companies would probably have more success.
Is Futagawa Manufacturing open to finding new global customers?
Smaller and lighter products do better in the international market over those that are heavy and big. Take, for example, smartphones. In one shipment, there can be hundreds of smartphones packed into a box, whereas only one construction machine fits into one massive container.
We produce heavy and big products, so we don’t see a huge advantage to export to emerging countries. When building a big plant abroad, we focus on whether that country produces steel and iron. Because the steel and iron should be a critical factor for the price of what we produce there. We entered the Chinese market because the population and automotive business were booming there. 20 years ago, I believed that China would soon produce cars of Japanese quality and we heavily considered whether we should directly combat our Chinese rivals on the ground or remain in Japan.
Can you give us an overview of your best-selling product?
Oil and fuel tanks sell the best both domestically and internationally. Since the materials for tanks are very much different from heavy fabrication products which require thick plates, it is difficult to manufacture both tanks and such heavy fabrication products, that is our strength as we have the capability.
How are you planning to expand to new industries and divisions?
We are in an industry that consumes a large volume of energy. We’ve started focusing on renewable energy to get ahead of the coming curve. From this December, all of the electricity used in the company is renewable. But this trend won’t end and so we are looking to expand renewable activity. It is no doubt that the construction machine industry has an aspect that cuts down mountains and destroyed towns, so we are considering to take actions to protect the environment as much as possible from now on.
Are you looking for co-creation partners?
If there is something we want from abroad, like a new technology, we will most definitely find a partner abroad for that. This could be anywhere like in the US, Taiwan, or Italy. Regardless of the country, we are willing to partner with any company.
What is your midterm strategy to continue growing?
COVID-19 has made it difficult to predict even the near future but we are looking to face the domestic market and the neighboring country’s markets more than before.
We’ve been working together with a few other manufacturing companies in a network for around 7 years in an effort to appeal to new clients. These companies have different technologies and products but working together has made us stronger and our system of introducing clients to each other in the group has only helped us all. These other companies have different technologies and products, but working together made us stronger, and the system of introducing clients to each other within the group only helped us all.
These other companies have different technologies and products, but working together has strengthened us and our system of introducing clients to each other in a group is the only one we have. I have supported all of them.
We have gone from rivals to those with the same goals and we are looking to tackle the overseas market next. Japan and China differ greatly, while in Japan, the division and specialization of work is progressing, it seems all jobs are done by one supplier in China.
We want to target markets with large or growing populations, like China and Southeast Asia. In these two regions, we see very good prospects for both the construction industry growth and market share. We also want to continue and grow our business in the US and EU.
Do you have any specific strategy that fits your global goals?
Our strategies differ with each country but with China, we built a factory based on a request from an American client. We don’t really stick to one strategy but we consider ourselves flexible as needed. When we set up a plant overseas, we have to have a good knowledge of the customs and culture of the country in order to succeed.
If we return in two years, what would you like to tell us, what are your dreams for the company and what would you like to have accomplished by then?
We see ourselves in the domestic market for the time being as COVID-19 has been limiting us, so we want to expand our client network. More personally, I own some cows to be branded as “Tajima-ushi” or “Kobe-gyu”, and I hope livestock could be our new business in the future.