An SME that has cultivated unique technologies in the field of textiles, Marui Orimono is ready to carry these assets into the global market.
In the last 25-30 years, Japan has seen the rise of regional competitors who have replicated Japanese monozukuri processes, but at a cheaper cost, thus pushing Japanese firms out of mass production markets. Despite this, we still see Japanese firms maintaining their leadership in fields such as textiles and clothing. How have Japanese companies been able to maintain their leadership despite this stiff price competition?
Our company evolved together with Toray, which is expanding its business globally, and we have fulfilled the role of commissioner, providing textiles for them mainly. Toray has been elevating their requests for advanced materials, and it has become a theme of our business; the idea of how to cater to and meet their needs by providing the textiles that meet their requirements. As a result, it has brought us an element of global competitiveness.
Society has been changing with more of a vision toward SDGs, so therefore our products have become more competitive in that sense. The requirement for textiles has changed over the years, and at first, it was thought for fashion purposes. Nowadays, there is much more of an emphasis on comfortability and lightweight materials. These sensitivities have been converted into scientific values, and as a weaving company, Marui Orimono’s mission is to convert these values into reality. We have focused on R&D in order to realize this goal, and these continuous efforts are in order to attain functionality. I think this ethos does not only apply to Marui Orimono, but many other Japanese companies too. The power of R&D has allowed Japanese companies to compete in the global market strongly.
There are many major companies well-known globally like Toray, but in fact, over 90% of the companies in the industry are SMEs. In the textile industry, the SMEs have modeled themselves on the Japanese automotive industry and have structured themselves into tiers. What this means is that each tier is able to provide specific expertise to the market and in our case, we take the advanced materials developed by Toray and use that technology so that we may realize our vision in real-life textiles and clothes.
Before, the industry as a whole was focused on either fashion or commodities, but functionality is clearly where the attention is going nowadays. The characteristics of the Japanese people have been reflected in the functionalities of the materials themselves. I feel that conventional Japanese people, as a characteristic, have been accumulating quality, so adding functionality on top of this is adding even greater value in the international market. The last 20-30 years have been tough for some Japanese firms, but even through the struggle, the Japanese have found ways to advance the technology and products of the nation even further. With that under consideration, you can see that Japanese companies will continue to compete on a global scale.
In the 1990s and early 2000s, fast fashion reached a peak, with retailers like H&M and Zara taking off. These brands looked to recreate design elements of high-end fashion houses but at a faster rate and a cheaper cost. Today the fast fashion industry has been valued at about USD 91 billion, however, it does also lead to large amounts of waste. More than 10,000 items from fast fashion go into landfills every 5 minutes. As a firm that produces high-quality textiles, what is your take on the fast fashion industry, and how do you believe it can be more sustainable?
With fast fashion, you can purchase fashionable apparel at a low price and that is what consumers have been demanding. Now I feel the trend has been changing, and now apparel that is only reasonably priced is no longer good enough. It is becoming more of a requirement that apparel is long-lasting, and I think that it is a clear fact that the textile industry itself is aware that apparel and textiles are not exactly environmentally friendly. We are trying to convert our business to one that is much more sustainable. I think this is not limited only to us, and we believe that the industry as a whole is trying to convert to one that is sustainable.
Your business can be divided into three main business divisions. Which one are you currently focusing on, and which do you believe has the most potential for future growth?
Honestly, we are focused on all three of our business ventures. Eight years ago, we entered the IT business and I think that pretty soon this will become one of our main pillars, however, we evenly distribute our focus on all three of our divisions. There are new possibilities and opportunities in each. Domestically, we do not see a lot of big growth potential here in Japan, so what we are focusing on is producing more high-end and high-functionality products in order to add value and create products that are applicable to other fields besides clothing. Additionally, we are trying to open new sales channels overseas, and we are attempting to widen our outlook.
In terms of industrial materials, we have been accumulating experience in factory management as well as textile production. We want to take our products to new fields such as industrial use and that may not always be in the form of textiles. In fact, it could be a non-woven or knitted type of material that can be used for industrial purposes.
One of the strengths of Japanese manufacturing is the power of production sites, also known as the Gemba, which translates to the site where value is created. It is important to conduct hitozukuri as well as the introduction of automation and IoT. In order to add value, however, the strength and the power of the engineers and the people onsite are crucial.
I strongly believe that the core foundation of Marui Orimono is a more bottom-up structure where each individual working at a factory works together to find issues and solve them together. It is not the case of one leader giving instructions, but rather each person has their own motivation and is highly aware of each job on a production site, which in turn allows us to utilize the fullest potential of our human resource strength.
For 30 years, Japan was crowned the number one nation on the planet for innovation and manufacturing, but nowadays that position has been lost. The reason Japan was able to hold that position for such a long period comes down to the power of the people and the structure of the manufacturing. With monozukuri for the Future, it is important to incorporate IoT and at the same time, add value by producing smaller lots with a wide range of products. JIT is also important in providing material where it is needed when it is needed.
With an emphasis on traditional Japanese monozukuri is important and then on top of that, we need to add value and a new perspective. To achieve this, it is essential to have engineers who connect management and development staff with the production site.Here at Marui Orimono, it is important for us to strengthen our group structure and create a new business model so that we can produce advanced and functional materials that cater to the needs of our society.
On the other hand, in Japan, the strength of Gemba has been interpreted wrongly, which has actually hindered the introduction of DX in the factories. Japan has been doing well in terms of automation, however, in terms of the introduction of digital means, Japan is lagging behind the rest of the world. Marui Orimono was able to recognize this and was able to introduce digital means at an early stage.
Marui Orimono has expertise in process automation. Moreover by implementing visualization, software, automation, and AI inspection in the process, we have been able to strengthen our company further by essentially combining hardware and software. However, having said that, in order to utilize the power of Gemba this tool is essential. By combining the power of Gemba we would need a flexible system in order to attain our goal of rationalization.
NOTO QUALITY is known as your premium brand and is a functional material that minimizes deterioration while also having quick drying properties with times as fast as three hours. Furthermore, we know that the material can maintain its initial condition after being used for elongated periods of time. How were you able to achieve these unique features when developing NOTO QUALITY?
Traditionally we have worked as an OEM manufacturer, but around 10 years ago we developed this brand, and at the time, each textile manufacturer branded their products based on this functionality and how it is produced from the perspective of the maker. Therefore, there were many similar types of textile materials that were under different brands and made by different companies. What we did was focus on the user's perspective, providing the essential needs that could satisfy consumers.
With the NOTO brand, our target was overseas international fashion brands. When I went to North America to do the pre-sales, the person I met with said that it needs to be environmentally friendly and must have a recycling element to it. At the time in Japan, there was not such an idea, nor even the consideration for it to be eco-friendly. It was more about the image than the actual substance and the Japanese market seemed to only care about pricing. We steered the NOTO QUALITY brand onto a new path, focusing on the environmental aspect by elongating the lifespan of the product and making it more environmentally friendly and sustainable.
One material we found interesting was your carbon-fiber fabric, and it is mainly used in non-clothing fields such as industrial materials. How is the carbon-fiber fabric that you developed superior to more conventional materials and fabrics?
Let me first show you the product, with this first sample being used in the interior of automobiles.
Our particular carbon-fiber fabric is used for reinforcement for construction materials such as the materials used in buildings and bridges. It could also be used for automotive and other appliances, and our specialty is that we can have multiple-colored fibers. It has a design aspect to it that is quite unique. On top of the fabric’s exceptional functionality, we can add value by incorporating this design aspect.
In the field of carbon fiber, Japan's major synthetic fiber manufacturers are the leaders in globally producing CFRP; however, China has now caught up, and in the field of commodities, a majority is being produced in China. Japan is now focusing on the high-end space such as aeronautics. Considering the fact that China has caught up so quickly to the rest of the world, at Marui Orimono it is important for us to fully utilize our strengths to find new markets and new demands.
Do you have any ideas on where those new markets might potentially be?
With the electrification of automobiles and the increasing demand for lightweight materials, more development is required. Add to that the emergence of flying cars and personal rockets, all of these present future possibilities for our carbon fiber business. Quantity wise rockets may not be that big of a market, so the biggest potential in our eyes right now is the automotive sector. I would say on a personal level however that it would be really exciting to serve the needs of flying cars and rocket makers.
What role does international collaboration play in your business model, and are you currently looking for any overseas collaboration partners?
We have been in China for 20 years now, however, we are not actually actively seeking collaborations overseas currently. In terms of sales, we are looking to enlarge our sales channel, so any collaboration would be as sales partners in regions like North America, Europe, and China. NOTO QUALITY currently operates at 80% for overseas export, so with the diminishing Japanese market, it is crucial that we look outwards.
A uniqueness of our products is that we have acquired Global Recycle Standard (GRS) certification. The GRS is an international, voluntary, product standard that sets requirements for third-party certification of recycled content, chain of custody, social and environmental practices, and chemical restrictions. Western companies are now taking this certification as a base when deciding whether to purchase a product and in fact, we are the only Japanese company so far with this GRS certification.
As I mentioned earlier, carbon fiber, apparel and textiles, the Chinese and other countries have caught up with the Japanese, and now Japan is trying to enter into more niche and specialized fields. That is the path that our company and many other Japanese companies are taking.
Japan is experiencing a huge demographic shift, with the country now being the oldest society in the world. This situation will follow in other countries too shortly, especially in China after decades of their one-child policy. As an SME, it is important to be aware of the situation and to work together on solutions to the diminishing market. Unfortunately, as an SME, there are limits on what we can do alone, so we must stress how important it is for us to work together with major companies such as Toray.
Are there any specific countries or regions that you have identified for expansion into?
For international expansion, as mentioned, we are trying to establish our sales offices in three regions; North America, Europe, and China. Additionally, we have our production facility in China, however with the China risk, we need to diversify so that we may mitigate the potential supply chain issues, so we are now contemplating establishing a factory in Vietnam. We are also interested in expanding our internet and on-demand business, and overseas, we have been collaborating with Printful, a Californian-based company headed by a Latvian president. Amazon is another collaborative partner we have and we are working on providing this on-demand service with the aim of launching our online platform in Korea and Taiwan next year. Through the strength of our monozukuri and the flexibility of our online platform, we believe there is some competitiveness that we can create.
Imagine that we came back five years from now and have this interview all over again. Are there any goals that you would like to achieve?
The sole concept of management here is hitozukuri, or the creation of human capital and nurturing of human resources. Our employees are here to attain what they have as a dream, or what they have as a motivation. It is important that the company is flexible to the changes in society as well as the environment.
I really believe that the growth of our employees and staff will change based on the society we live in and what is happening in our surroundings. This concept of human growth is vague. As president, in my vision I have specific objectives which include current turnover as a group company. Currently, we are sitting at about JPY 22 billion yearly and in five years' time, I would like to increase that to around JPY 50 billion.
In order to achieve these goals, we must continue diversifying in the many fields we have talked about today. The key to all of this is to focus on our uniqueness in each field we are present in and to leverage those as strengths in order to meet the needs of our clientele. New sales channels through e-commerce are one of many ways of doing so, and we are excited to create new opportunities for our customers to purchase directly.