A firm founded over 75 years ago, Kaneda supplies superb steel parts for a host of major companies’ manufacturing plants.
Could you give us your take as to why Japanese firms are so successful when it comes to the international market? What is the advantage of Japanese manufacturing that puts it ahead of those regional competitors?
Let me first talk about the strengths of our company that lead to the strength of Japanese companies in general. Our company was founded by my grandfather. We originally dealt with manufacturing metal buckets, but that business later evolved to metal sheet processing, specifically making roofs and walls for buildings and houses. Listening to our customers' suggestions of shifting to steel frame manufacturing for construction components, we paved our way into this new field. However, the construction industry has had its ups and downs over the years. When it was down, we decided to enter the plant manufacturing.
I think one of the strengths of Japanese companies is the accumulation of new technologies and facilities. Although the original technology may be very simple and not sophisticated, it is improved and adapted to the rapidly changing society over time and passed down to the next generations. Automation, the use of machinery, and the advancement of technology have augmented and added value to the growth of companies, especially SMEs. SMEs were able to create unique or one-and-only technology and products through their amassed experience and knowledge, which in essence support Japanese major companies that are competitive globally.
The senpai passing down the technology to the next generation of workers has been a hallmark of Japanese manufacturing since the end of WWII. Today, Japan is experiencing a huge population decline. How are you adapting to these population changes? What steps are you taking to ensure the longevity of your business despite Japan's dwindling population?
We are taking the population issue very seriously. To mitigate the impact of the population decline as well as the greater difficulty of securing the labor force in Japan, we have been actively recruiting and welcoming foreign associates. Recently, there has been a regulation change in Japan that allows these trainees to stay longer in Japan instead of short-term like before. Our foreign associates from China, Indonesia, Brazil, and the Philippines are very excited about this. We are also diligently recruiting retired seniors from major companies who can share their expertise with the younger generation in the company, as well as foreign associates. By doing so, we can elevate the overall technical capabilities of the company. We want to provide equal opportunities to all, including women and foreign associates. Diversity and inclusion are the big themes that we highly value in our employment scheme. The steelwork industry is oftentimes dominated by men, but we have talented young women who are tirelessly doing sales, architectural designs and procurement. We are fully leveraging our diverse human resources.
With regard to the shrinking domestic market, we are looking overseas for expansion. It is still too early to say where we will do that exactly. As an example, our Indonesian associate's dream of Kaneda’s subsidiary being in Indonesia, so I am mindful and hopeful about that. We have been acknowledged by WEConnect International, a US NGO, as one of the companies that actively promote women in the company. That NGO has more than 110 registered buyers and quite a lot of suppliers, from which we have been able to increase our network. These NGOs help us to get in touch with companies globally. We are hoping that this network can help us find a good location overseas.
In our many interviews with those in the heavy industry and construction, they often say that it is hard to attract young graduates because it is analog-based. If it is made more digital and interactive, we can create a more attractive work environment for younger people. We can also make it more inclusive with digital tools, considering that women can just as easily operate machinery or do the design. In the case of your business, what kind of digital tools do you foresee or currently use that can help transform your operations?
The inclusion of digital tools and the promotion of DX has a very positive impact on the business. We are earnestly taking that into account. Two years ago, one of the measures we took was introducing a 3D measurement digital device that can accurately measure about 100 meters in length, primarily used for reverse engineering. This enables us to accurately scan and measure existing buildings and structures, on which we base our rehabilitation plan or the renewal of a building. If compared with the conventional manual measurement method, it is much quicker and more accurate to use this 3D measurement device. It greatly helps the workers on site. Another work that has been delegated to us is the wind power generation turbine parts that are 100 meters to 120 meters in length. With the help of this 3D measurement device and testing device for measurement and assembly, we could enhance our experience. Once we have substantial experience, we are thinking of establishing an independent division for measurement and testing using DX.
Loading work at a nearby port
Do you see wind power or renewable energies in general as a really growing new opportunity for your business?
We have a keen interest in the renewable energy field, particularly wind power generation. Since three years ago, we have been doing market research and trying to see what technology can be applied in the field. However, we have concerns about the price competition with other neighbouring countries like China. We are carefully monitoring this situation and trying to make the best application of our technology, which is highly suited to making big-scale products.
Could you give our readers insight into how you can create unique products? What are the biggest challenges that you need to overcome when you manufacture such a large and hard-to-move item?
Our large-scale products are all custom-made, so there are no two identical products. Nothing is manufactured again for other use. Each time, we make an individual plan to manufacture a product. Being close to Uno Port, which is an international port in Okayama, is advantageous because we can directly import large parts and components from our Chinese factory. In our factory near the port, we do the final assembly and ship assembled products to our customers. In the past, we used to deliver only the parts and components, and it was them who did the final assembling on site. However, due to the shortage of laborers and engineers who could do the assembly on-site, our customers are now requesting for us to do the assembly for them. We have been able to assemble and deliver the whole package to the customers.
For your business, what kind of partnership do you need? Are you currently looking for a partner, either domestically or especially internationally?
Partnerships play a key role in our business, in particular in the new business arena. We are looking for new partners, and we are now discussing working with a water treatment technology SME and a methane fermentation technology company. It will either be through a partnership. We are also looking for overseas partners.
Although the giants of the Japanese industry like JFE, Kawasaki, Nippon Steel, and Mitsubishi can manufacture all these parts in-house, why do they choose a smaller chushokigyo like you to do these essential parts?
I feel that major companies choose to work with us due to cost-effectiveness. Since some customers strictly require products to be produced in Japan, we can do that through our mother factory here. On the other hand, some customers do not require very high quality; We can produce those overseas, perhaps in our factory in China, to reduce the cost. We have an advantageous position in the market because depending upon customers' needs, we have our mother factory in Japan, or we can manufacture in China in which case we ensure the quality of our Chinese factories through our quality assurance system. In addition, we also provide after-sales maintenance and full support. Due to all these factors, we have become the go-to partner of major companies.
You have been present in Dalian, China since 2016, and your business has lived through the COVID period, where we saw the Shanghai lockdowns and China completely closed to the world. Now, we also have the Chinese-American decoupling, a huge geopolitical situation. Moving forward, can you give us your assessment of the Chinese operation? Do you still see it as a key part of your business, or are you looking for other locations?
Our production in China began in 2006, through which we found a trustworthy and dependable partner with whom we did a joint venture in 2011 in Dalian. Dalian was affected by the lockdown during COVID, but fortunately, our factories are located in multiple locations and different areas. We were able to allocate our resources to avoid the lockdown and continue our production. The issue during the pandemic was the inspection by our customers, but we used web cameras and remote conferences as an alternative means to in-person visitations, which worked out well. I am very worried about China's relationship with Japan and the US and how the situation will change in the future.
There are risks in China. Even though the price competitiveness has been declining, China's labor power is still massive. When we manufacture a large-scale product, the process could be cut down in half in the Chinese factory compared to when it is produced in the facility in Japan. In terms of BCP, maintaining our Chinese factory is very important, especially considering that Japan is a disaster-prone country. I am aware that we have to think about other alternatives.
As a woman CEO of a company that is involved in steelwork and construction plant engineering, what have been some of the challenges that you have faced in the industry? Which of these challenges have you been able to turn into opportunities and advantages?
I am the fifth-generation CEO of the company. Upon graduating from university, I got married. I had been a housewife for a long time. When I turned 30, I started to help out with the company and somehow ended up as the CEO. I am trying to be very honest when talking to people, and I like communicating. I have expert staff members who can help me out whenever I do not understand sophisticated engineering drawings. When I talk to customers, I truthfully talk to them and ask for the support of our staff members who have the expertise. Thanks to the support of everyone around me, I was able to overcome the obstacles and hardships that had come my way. Since I have been able to overcome all these, I do not remember what exactly the hardships were.
Imagine we come back on the very last day of your presidency to have this interview all over again when you are about to pass the company to the next generation. What dreams and goals would you like to have achieved for the company by then that you would like to tell us about in that interview?
My daughter joined the company four years ago. Having said that, I do not necessarily believe that it has to be a family member who needs to take over the presidency. My goal is to make this company sustainable and become a 100-year-old company. To do so, it is vital to make the company attractive in order for many to be willing to become the leader of the company.