For over 100 years, Kurimoto has been at the forefront of industrial equipment, using its technology to manufacture high-performance and highly durable products for both industrial and social infrastructures. The company continues to refine the technology it has developed, using the philosophy of monozukuri to ensure its products, which range from iron pipes and valves to building materials and machines, are both innovative and essential. “Kurimoto provides solutions that are vital to society’s development and that support essential social infrastructure,” explains Moriyoshi Kushida, Chairman of Kurimoto, in this interview with The Worldfolio.
Japanese manufacturers have been facing stiff price competition from regional competitors located in countries that benefit from a cheaper labour force, such as Taiwan, South Korea and China. What should Japanese companies do to face off this price competition?
China, together with other such countries, used to be the workshop and factories of the world because of the cheap labour and economy of scale they enjoyed. However, over time, they have developed with their original technology, not only cheap products. It is a fact that price-competition has happened in those countries, however, Kurimoto is not attempting to compete on that price competition. Instead, we are trying to enhance our services by offering additional value both in terms of production and after-service. While East Asian markets are on our radar, we are looking to target countries beyond China. In the future, we believe that our corporate growth will stem from countries that are currently enjoying rapid economic development, such as Indonesia. We are trying to bring our value-added products and services to cater for the new needs of these countries, a clear strategic target for Kurimoto.
Regarding Kurimoto’s monozukuri, we take great pride in our craftsmanship skills and in our production philosophy. Kurimoto’s unique monozukuri spirit allows us to assert that our manufacturing processes are not inferior to our Chinese or Korean counterparts. Thanks to our unique DNA and historical track-record, we are certain of our competitiveness. We do not aim to compete on a cheap price product and mass-production basis, instead, Kurimoto competes with added-value products.
There are several stages in monozukuri: development, production, and maintenance/after-sales service. What do you consider when you think about profitability?
Normally, profitability is lower at the manufacturing stage, while the development and maintenance stages have higher profitability points. However, we believe that manufacturers should not lose profitability during the manufacturing stage. In order to increase profitability across the manufacturing stage, we must enhance productivity and reduce costs. If we increase the profitability of the manufacturing stage, the development and maintenance stage are less profitable than the manufacturing stage. So, the next step is to increase the profitability of the development and maintenance stages. It is very important to repeat this cycle, and our ultimate goal is to have all three stages up to the highest standard; that is our final target. As Kurimoto is trying to enhance all three to provide our customers with the greatest added-value possible while responding to requests from our clients.
Japan suffers from a negative demographic line. The ageing population and declining birth-rate are creating a labour shortage for companies, which in turn has made the employment market incredibly competitive. How does your company attract young talented graduates?
Our products are generally invisible, used for such things as underground pipes or air-conditioning ducts of the ceiling and therefore young people cannot see them in regular life. However, Kurimoto provides solutions that are vital to society’s development and that support essential social infrastructure. In the past, we did not attempt to communicate enough to the outside world the essential role that Kurimoto plays in society. But two years ago, for our 110th anniversary, we began focusing on promotional activities. We also established management principles in addition to the corporate philosophy and promotion video and Kurimoto’s image song and appealed to young people by using digital platforms. Recently, we were interviewed on a TV show as a result of these promotional activities and we introduced our products and company history.
We also actively provide college internships where we invite students to experience work in our office for a short-term. Once they go back to their classrooms or college campuses, they share the experience they had at Kurimoto with their peers. We are aware of the importance extending from such as the word-of-mouth communication of young people.
Japan’s infrastructure boom occurred more than fifty years ago, and nowadays many construction projects are ageing. Furthermore, Japan also needs to address certain social issues related to its ageing population, which requires new social infrastructure. Looking at the future, what major infrastructural changes do you expect Japan to develop? And how is Kurimoto contributing to this civil engineering transformation?
Japan’s construction and civil engineering market has shifted its focus away from the development of new construction projects and into the maintenance of older buildings and structures. Civil engineering firms, including Kurimoto, cannot operate high expenses for maintaining and rebuilding ageing infrastructure, so must pursue efficiency. At Kurimoto, we take great pride in knowing that our technology plays a vital role in the maintenance and reconstruction of Japan’s infrastructure.
When we talk about Japan’s infrastructure, I do not believe that new projects will be an extension of the existing structures. With its numerous bullet trains, highways and bridges, Japan’s construction and infrastructural development has already reached saturation level. Of course, certain technological advancements create an exception to this rule, as exemplified by the new bullet train, the Maglev, but overall, we expect market demand to remain focused on maintenance and reconstruction.
Furthermore, I believe that remote communication will play an increasingly important role for Japan and will allow the country to fully utilize digital technologies. As such, I expect Japan’s construction sector to place a particular emphasis on the development of smart infrastructure. To fully harvest the power of digital technologies, such as IoT and 5G, we must invest in the appropriate telecommunication infrastructure. At Kurimoto, we already have products that accurately protect and support communication networks and telecommunication lines and aim to use them in the new digital market. As time goes by, we must adapt our existing infrastructure to modern demands. In the future, we will move away from heavy and massive social infrastructure to new infrastructure such as communication networks. We will maintain the old equipment, and also respond to new ones with different targets with new societal infrastructure. We are thinking that we need to do these two things in parallel.
The automation of control valves has become one of the most important advancements in the valve industry. Automation allows for precise valve positioning, thereby providing more efficiency, reduced energy consumption, and an easier operability. This automation trend is forecasted to drive the growth of the industrial valves market globally. How is your company leveraging digital technologies to develop new products?
Digital technologies and their applications are, by definition, a very broad theme. While Kurimoto does not provide any digital services per say, we have utilized digital techniques to increase the attractiveness of our existing products. As I said, remote networks are becoming standard in society. We are producing forging press machines targeted at the automotive industry that are delivered outside of Japan. To ensure their reliability, we have used a digital communication that allows us to provide remote maintenance and repair services. An important part of the digital trend for us is thus the ability to connect with our clients over the long term; a paramount feature to our success.
On the manufacturing side, we have many experienced engineers that are well-versed in production technologies and techniques. We are currently digitizing their know-how so that it can be preserved and passed onto the next generation.
Kurimoto operates in a number of sectors, such as pipe systems, industrial construction materials and machinery systems as well as developing materials that are used by those sectors. There is, however, a complementarity to your business. For example, you can develop pipe materials, manufacture pipes from the developed material, and then finally install the pipes underground. How are you creating synergies between these various activities?
Because we do offer a variety of products and services, some people might think that we do not have consistency. However, different manufacturing methods and different customers are Kurimoto’s strong point. We deal with various customer types from industries in both the public and private sector. By the varying nature of their organizations, our customers have disparate requirements, and their way of thinking widely differs when it comes to cost and product specification. Throughout our history, we have been able to utilize the advantages of one side to the other. To give you an example, we can apply the private sector’s need for a timely and meticulous delivery system to the public sector’s project and thus try to enhance customer satisfaction.
In terms of monozukuri, we have gained a lot of expertise in different manufacturing methods; a feat we are extremely proud of. In some industries and in other companies, technological development is focused on one core competency which they try to enhance and then business expansion stems from it. We, on the other hand, have diversified technologies that are utilized in different ways. For example, there are some production methods of monozukuri. The production method is based on manufacturing parts and components on various production lines through the division workload operations are divided. Gradually, the parts and components are assembled and produced in various processes, and a final product is then created. In contrast, the assembly method is based on acquiring all the various parts required to make an end-product and assembling them in one location. At Kurimoto, we have gained an expertise that allows us to utilize both production methods. As such, we are able to apply the advantages of one method to the shortcomings of the other.
To go back to the synergies created by dealing with both public and private sector clients. Public sector companies often used different corporations along their project cycle. One firm is chosen for manufacturing, another one for designing, and yet another for consulting. However, on the other hand, private sector entities tend to rely on a single company for all processes. But currently, public sector firms tend to rely on a single company for all processes which is called “design build”, the same as private sector. Since we have the experience of doing all these steps with private sector clients, we can apply this for the public sector.
Looking at the future, what markets and sectors do you plan to expand into?
Currently, our main focus is to cater for the domestic market. Although we offer cutting-edge maintenance technology and services, Kurimoto is primarily a manufacturer. When we seek opportunities internationally, our main focus is to cater for construction projects. Under the international market environment, construction projects are mainly led by contractors. To expand abroad, we partner with these contractors and provide the services and products We plan to expand in the Asian market, and particularly in Indonesia. Indonesia is currently in a development phase rather than a maintenance one. In the future, when we work with general contractors to expand the Indonesian market, I think we will be providing new products rather than maintenance.
Kurimoto also has a subsidiary in the USA, which allows us to monitor market trends. In 1982, Mr. Chote Pat and Ms. Walter Susan published a book entitled America in Ruins. The book rang the bell of America’s infrastructure situation. We have technology for maintenance and reconstruction regarding infrastructure, but although we do not foresee playing a leading role in the revamping of America’s infrastructure, we plan on providing our technology and maintenance know-how and reconstruction to local manufacturers in the US. Also, in the US, our business is focused on the production of industrial equipment. One of our proprietary kneading machines, the KRC Kneader, is valued by the market and benefits from a solid reputation. KRC Kneader is a horizontal, twin screw, closed type kneading and reacting processor ideal for mixing, kneading and polymerization operations. In the future, we would like to further penetrate the US market and expand this product’s market share.
Heavy industry, along with various other industrial sectors, has been criticized for its negative environmental impact. How is KURIMOTO reducing its carbon footprint and contributing to environmental preservation?
Since the beginning of the COVID-19 pandemic, the timeframe to attain environmental goals has accelerated. The Prime Minister of Japan has recently re-designed the country’s green plan and has moved the country’s achievement targets in terms of C02 emissions, among others, to 2050. At Kurimoto, environmental protection is a priority and we have made efforts for numerous years to reduce our carbon footprint. On top of designing a series of energy efficient measures, we are focused on developing renewable energy products; a sector we are contributing to both directly and indirectly. In biomass generation, for example, we are both manufacturing products that are essential to biomass generation processes and offering services that cater for biomass plants; this is our direct contribution. Indirectly, we are producing lightweight components, devices and machinery that help reduce C02 emissions. As such, we have invested in lighter materials, such as CFRP (Carbon Fibre Reinforced Polymer), to produce our products. Both our method of doing business and our products are contributing to addressing environmental concerns.
This April, you handed over your presidency to the next generation. What would you like to pass on to your successor?
I believe that companies should never be “complete.” As such, my message would be: stay incomplete! If you are incomplete, it means that you still have things to do and fresh objectives to achieve. That is not to be taken negatively, for what I aim for is “meaningful incompleteness.” Once you have identified incompleteness, you will make efforts to be complete. When a company, organization or team believes it is “complete,” then progress is over. By always having new goals, I want you to keep running, always unfinished. I believe that this incompleteness will be the driving force!