Nakabayashi: A stationery company that never stands still

Over the past 25 years, Japanese manufacturers have come under pressure from competitors in China, Korea, and Taiwan who are following the Japanese manufacturing process, but offering lower quality products to the world at lower labor costs. How do you define manufacturing, and why do you think your customers choose to buy products made in Japan?

My perception of the current state of manufacturing is that it is a combination of three principles: reduce, reuse, and recycle. I believe this is a reflection of the way Japanese companies strive to reduce the burden on the environment as they manufacture their products. In addition to these three principles, we believe that our products are chosen because we ensure high quality through excellent technology and strict quality control.

Last November, Prime Minister Kan declared that Japan would be carbon neutral by 2050. We see various manufacturers investing in renewable and clean technologies, and government subsidies for sustainable technologies such as solar power. Your company started producing biomass energy in 2013 and has been contributing to the world. What kind of impact, if any, do you think the decarbonization of Japan will have on the economy as well as on businesses like your own?

It is true that various companies started to adopt this policy after the government's declaration, but we started our efforts before the declaration. We started a biomass power generation business (Matsue Biomass Power Generation Co., Ltd.) in Matsue City, Shimane Prefecture, in response to the difficult situation in the electric power business after the Great East Japan Earthquake in 2011. In addition, we have been installing solar power generation equipment in our distribution warehouses since 2013 and selling the electricity generated there. In this way, I believe that we will see more and more initiatives that can contribute not only to business, but also to an environmentally friendly society, employment for local people, and environmental protection.

With the rise of electronic communication, the demand for general stationery products is on the decline. When we interviewed Mr. Masataka Ushio, President of Ichikawa Corporation, he mentioned that the company must develop stylish products that can be offered as gifts or luxury items to address this issue. How much do you think your company will be affected by digital communication? What are your plans?

Digitalization, an aging population, and a growing paperless society are truly taking a toll on the stationery business in Japan. But thanks to this environment, we have come up with a better solution. In Japan, writing seems to be an ingrained part of the culture, as exemplified by calligraphy. There is a solid demand for the notebooks we sell. This part of our business has not been greatly affected by digitalization.

Our company predicted this situation 8 years ago, and we have come up with many solutions. We have developed not only traditional products, but also notebooks that enable digital and analog integration, which makes our products more attractive.

We are seeing a decline in the "writing skills" of students in many countries. The University of Cambridge has announced plans to make school exams completely digital. Imagine a world where we are not writing anymore. What part of our creativity do you imagine we would lose?

First of all, in Japan, I do not believe that the day will come when we will be so completely dependent on digital devices that we will no longer use traditional stationery at all. We know for a fact that some schools in Japan are already using digitalized textbooks. As I have already mentioned, I see a lot of people still using traditional stationery, but at the same time, we need to respond to the trend of this technological age (where new educational apps are constantly being developed).

Despite digitization, the stationery industry is growing by around 10% and is valued to be a market of around US$128 billion by the end of this year. The Asia Pacific region is less electronic, but is at the center of growth, with a growing workforce and increasing rates of text recognition. As a company present in these markets, what is your company's international strategy to take advantage of this growth? As a supplier to both developed and underdeveloped countries, how can you meet the needs of both types of countries?

It is very difficult to predict what the market trends will be in the next few years. But we still have a lot of great markets. We are able to do business in Southeast Asia, a market where the population is large and traditional stationery is still in common use. Our goal is to produce more sophisticated products. In addition to Southeast Asia, Europe and America are also interested in our products. I think it is because those people still have a lot of interest in the tradition of writing and are willing to adopt it. When they want to write more clearly and beautifully, our products will start to help them. There is a lot of competition in the stationery market in developing countries, but our goal is the premium market. For example, we offer high-end notebooks that convey "Japaneseness" and fountain pens with lacquered bodies. Although our fountain pens are quite expensive compared to our competitors, consumers in India, Vietnam, and many other countries are choosing our fountain pens.

We will continue to make products that are supported by "Made in Japan" quality.

Your company was founded in 1951 and will celebrate its 70th anniversary this year. What is your competitive advantage and why do you think people choose your products?

The notebook you see here is an original notebook made to commemorate the 1964 Tokyo Olympic Games.

Our company started out with a focus on bookbinding and document restoration, and has since grown our business to include printing, photo albums, furniture, and many other consumer products. Every year since then, we have been constantly introducing new products to the world. Our competitive advantage is to create synergy among all our products and business segments. Our mission is to continue to boldly take on challenges without fear of failure.

In recent years, you have expanded your business in a number of ways, including through mergers and acquisitions such as Matsue Biomass Power Co. Why did your company take these actions? Do you intend to diversify in the same way in the future?

In the case of Matsue Biomass, we started a new business. In other M&A deals, we have collaborated on the business. We are basically working to create better synergies in order to expand our business portfolio. This kind of activity is the door for our new business.

Does your company have a new product that you would like to introduce to our international audience?

Our most successful product in the domestic and international market was the album. We received a lot of orders from our overseas clients and had little competition from other companies.

Nowadays, we live in a society where everything is moving fast and people are facing many challenges. For this reason, in addition to our albums and existing products, we try to create products that will help our customers relax and be stress free. We already have some new products that will be available soon. We can't disclose the details at this time, but we hope you enjoy them!

Your company recently announced its mid-term strategy, entitled “add＋venture70”. Please tell us about it. Also, what other strategies are you implementing to continue the growth of your company?

add＋venture70 is closely related to our company's philosophy. That philosophy is to try new things without fear of failure. We will take new approaches and solutions to any of our business units or segments. This strategy, add＋venture70, is very symbolic, considering that we are celebrating our 70th anniversary. Each of our business units has set 70 goals for the next three years. One of the main ones is to increase sales and profits. Mergers and acquisitions and collaborations with other companies are always on our mind to create something new. These strategies are reflected in our company's power, imagination, creativity, and spirit of adventure.

As the president of Nakabayashi, please tell us about your company's philosophy (way of thinking). What is your company's philosophy (way of thinking) and how do you intend to implement it in Japan and overseas?

We exist to make our customers happy and with everything that we do we exert our best efforts. We take pride in our fantastic track record,  and are always looking for ways to contribute to the convenience of our customers. From the conception of an idea to the delivery of the product we always take our customers’ needs into consideration. All of our employees, from the so-called management team to the employees on each floor, work with the same philosophy of putting the customer first and satisfying them.

Imagine that we visited your company to interview you again in 10 years, when your company is celebrating its 80th anniversary. What do you think you would tell us? What is your dream for the company and what do you want to accomplish to achieve it?

Digitalization is already very active today, and it has become an integral part of our lives. We need to adapt more and more to this digital society and consider developing more digital products. With the help of big data and AI, we can improve our overall processes faster and more efficiently and make our products more attractive to customers.

In the future, we aim to become a leading company in the "life-related industries" in the following five fields: 1) health and medical care, 2) environment (including renewable energy), 3) lifestyle and welfare, 4) agriculture, and 5) culture.

(今後は、①健康・医療、②環境（再生可能エネルギーを含む）
③生活・福祉④農業⑤文化、の５つの分野における「生命関連産業」のリーディングカンパニーを目指していきます。)

Another major goal is to further increase the satisfaction of our customers and to increase our performance a hundredfold. Last but not least, we will continue to operate our company with a focus on the origin of "manufacturing".