Since its establishment in 1987, Meichu has provided casting equipment centered on aluminum melting furnaces as well as material production, sales and supplies. Quality is seen as a key factor in its success, with some of its technology differentiating it from other companies.
Over the past 30 years, Japan has seen the rise of regional manufacturers who have replicated the Japanese monozukuri process with cheaper labor costs, pushing Japan out of mass industrial markets. However, Japanese firms are still leaders in niche B2B fields. How have Japanese firms maintained their leadership despite the stiff price competition?
It is our monozukuri process in manufacturing defined by the quality that keeps us competitive. I have a background in mechanical engineering, electronic engineering, and thermodynamics. Our biggest strengths are the quality of our molten metals and our temperature control technology. Our furnaces can be used more and maintenance is easy.
Japan's demographic is shrinking and rapidly aging at the same time, with the effect of this being a labor crisis and a shrinking domestic market. What are some of the challenges and opportunities that Japan's demographic shift has presented to your company?
I do not feel that the population decline is a threat because we have AI technologies that can replace people in the work that they do. In 20 years, it is predicted that about 50% of current occupations will be replaced by AI.
Meichu commits not only to automating furnaces but also the ancillary equipment surrounding them. Can you tell us more about the role Meichu plays in promoting the automation of furnaces?
The Mino Industry production line uses our furnaces. We collaborated with Mino Industry to fully automate their new factory using our machinery. We have introduced them to a production line of HMF (Flat Homel Furnace) — energy saving for aluminum furnaces, and an automatic material loader. They just asked us to manufacture four more units for their factory. In 20 years, we foresee unmanned factory operations including the advancement of autonomous driving within the factory compound.
As we see more automation and AI becoming prominent, what would be the roles of engineers moving forward?
Engineers and factory workers will be doing more of the brain work rather than working in the factory and doing the actual labor.
You aim to commercialize a furnace with hydrogen specifications by 2050. How are you planning on achieving the commercialization of your hydrogen burner?
We are currently conducting collaborative R&D on our hydrogen gas burner. We are conducting experiments to lay out our plans to commercialize.
Meichu is doing consignment-type manufacturing of furnaces in places such as China, Indonesia, Thailand, and Taiwan. What motivated you to adopt this approach to manufacturing and what are its advantages and disadvantages?
We chose this business model because we do not have enough engineers to dispatch across the globe. We decided to provide technology and training to local engineers so they can manufacture locally using our technologies and also enlarge their local market share. The advantage of having a consignment business is that there are fewer risks. However, the market is smaller and the speed of development is also slow, but we can have a smaller initial investment in the production of new products.
Some of these consignment countries will have varying degrees of engineering skills, equipment, and quality. All of these can have an adverse outcome on the final product. How are you able to ensure the quality of your products in your consignment countries?
We have strict quality assurance standards. Our Japanese staff goes to the localities to inspect and if they fail to pass, we make changes and manufacture again.
In the last three years, the COVID pandemic created major challenges, especially in global shipping and logistics. How have you been able to adapt to these global challenges?
It was more the shortage of semiconductors that impacted us. Due to the shortage, our production of PLC and control boards have stopped. Even Toyota is suffering from a semiconductor shortage. They have reduced their production to 500,000 units. The wait time for a car order can take up to a year. Overall, demands on many Japanese manufacturers went down. With much fewer demands, we had no delays in our shipments.
In 2019, you started sales of the Flat Homel Furnace HMF-S, a furnace that can facilitate space-saving maintenance through a single-layer inspection door. What motivated you to develop this product and how is this furnace superior to more conventional ones?
We have both the single door and double door for the flat furnace depending on the quality of molten metal required. Our HMF-C is the double door. The amount of hydrogen gas included in the material depends on the quality of molten metal required. A single door requires less quality compared to a double door that requires a high-quality and high-purity molten metal.
Some materials such as aluminum need specifically controlled temperatures to reduce the overheating of the melt. How are you able to ensure strict temperature control when it comes to your furnaces?
We have a technology that strictly controls the temperature. The tolerance rate is ±3 degrees from the set temperature. This is the core technology that differentiates us from other companies.
Are there any other new products or technologies you are working on that you can share with our international readers? Can you please elaborate more on your R&D strategies for us?
We are currently involved in a big project installment with Mino’s latest factory. This factory will become a model factory around the globe. There is no other autonomous factory like it that does not require any manpower at all. We are currently developing and introducing energy-saving furnaces and manpower auxiliary equipment such as the automatic ingredient loader for the furnace. The automatic loader can separate the material ingot into three parts and load it into three sections. It increases the efficiency and quality of the molten metal. We are moving towards automation and autonomous factory operations. The company has two missions. The first is to increase energy efficiency and the second is to contribute to labor savings and to release people from manual work, especially in the furnace industry which requires dangerous and heavy labor. Through automation, we can take people out of dangerous jobs.
Heat needs to be introduced to convert molten aluminum into a shape. However, the heat cannot be conveyed 100%. There is often a 50% energy loss in the transmission of heat. We are trying to reduce energy loss and be more efficient.
There is a bucket underneath that gets taken to the furnace when filled automatically. This is the design of our overall system. The ingot which is an aluminum pole is inserted automatically and then cut into pieces. The ingot is then taken to the melting chamber through the elevators automatically. Then, it is out through the furnace and goes through the process until the product is made. There are two lines. One is for the product and the other is for the aluminum residue that would be reused and melted again for the next production.
Your furnaces are used in autonomous factories and the production of die-cast equipment. Are there any other industries or applications that you are looking to introduce your furnaces to?
There are three types of aluminum casting. One is die casting which accounts for 80%. The second is gravity die casting which is about 17%. The remaining 3% is sand molding. No company specializes only in gravity die-casting which is for safety-critical components. It requires less hydrogen gas. We do both die-casting and gravity die-casting as opposed to Mino Industry which only does die-casting.
Are you looking to find more partnerships in overseas markets or find new partnerships with consignment factories?
Not at the moment. We already have a technical alliance with factories in Thailand and China. We want to fortify those instead of starting new partnerships. Now that COVID is over, we are looking at Vietnam and India as new locations for our base.
Why did you choose these markets?
Our aluminum furnaces are mainly for automotive parts manufacturing, so we are focused on countries that are now shifting from two-wheel to four-wheel automobiles. Vietnam and India have growing automotive markets and are shifting from motorbikes to cars.
In Vietnam and India, are you looking to have a consignment factory or are you considering having a physical presence in these markets?
We will start small by partnering with local companies. We already have multiple local contacts that we would like to revisit.
If we come back again in four years and have this interview all over again, what personal goals and ambitions would you like to have achieved by then?
Our target in the next four years is to increase our sales channels for HMF which reduces energy consumption by 20% compared to conventional ones. It contributes greatly to energy efficiency. With our joint development with Mino Industries, we want to expand our fully automated line and introduce such a production line to other companies.
Can you please share with us your vision for your company in 20 years, and what you would like to pass on to the next generation?
The company has two missions. The first is the environmental contribution. As human beings, we often cause damage to the environment as we live. I would like to contribute back to the earth as much as possible. This means having energy-saving products and reducing energy waste. In the casting industry, there are still many dangerous jobs that people have to carry out. I would like workers in the field to be free from such dangers through automation and have more opportunities to pursue more creative jobs. I want our employees to be happy and for the casting industry to progress.
Interview conducted by Karune Walker & Sasha Lauture
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