Specializing in the use of aluminum, Nissho has established itself as one of Japan’s leading home-building materials producers since 1963. A company with 25 branches across the country, it offers particular expertise in the manufacture and installation of screen doors and windows found in households nationwide.
In the last 25 to 30 years, Japan has seen the rise of regional manufacturing competitors who have replicated Japanese monozukuri processes, but have taken advantage of cheaper labor costs, pushing Japan out of mass production markets. However, we still see many Japanese firms maintain leadership in certain fields. How have Japanese firms been able to maintain their leadership despite the stiff price competition?
Our company was established in Osaka in 1963. At that time, windows were made from different materials, such as iron and steel. At that time, aluminum was not used. Window screens were not even introduced to the market. We saw an opening and started our business from that perspective. We started to produce window screens that were applicable to all different types of windows made from different kinds of materials. That was Nissho’s first appearance on the map of Japanese manufacturing. We started to produce window screens for different kinds of residential areas. As you well know, during the 1970s, Japan experienced an economic boom. It was a great time for us to introduce our products to different kinds of infrastructural locations and markets. As time progressed, our company began to introduce different variations of materials that could be used for all types of window screens and sashes.
Monozukuri is the reason why Japanese companies make such high-quality products. Our company is no different. Japanese people have a unique characteristic that we are really concerned about small details. For example, we need to prevent mosquitoes and other insects entering our household.
Therefore, Nissho realized that point so we started to produce window screens for the market. We wanted to introduce the best quality window screens to that end, and we can say now looking back, that we were successful in doing so. Our products have now spread beyond Japan and we are introducing our high-quality products to overseas markets.
Japan has the oldest society in the world and a rapidly shrinking population. This presents two major challenges for Japanese firms. The first is that there is a smaller pool of talented young graduates coming through for companies to replace their older workers with. The second is a shrinking domestic market. What are some of the challenges and opportunities that this demographic shift is presenting for Nissho?
Obviously, there are social problems existing in Japan with the shrinkage of the population and the increase in elderly people. However, we do not feel that is a risky situation for our business. Nissho has divided our business into two segments. The first segment is window screen manufacturing and the second one is the house renovation segment. Of course, the shrinking population is related to new buildings. Buildings are not being built at the same rate that they used to be. However, it is not affecting our business.
Moreover, existing buildings are now experiencing a wave of renovations and this covers the previous problem of less buildings being built. Therefore, we are more or less safe as we sell a huge line-up of products. Apart from being a window screen manufacturer, we also run a renovation business. Nissho, as an aluminum building materials manufacturer, is involved in new buildings and renovated existing buildings. Even if new construction is down, on the other hand, the renovation for existing houses will be increased. So, it will not affect us. Also, geographically, Japan has a disparity of temperatures. For example, as Hokkaido is known for its snow, screen doors that can withstand and protect households from the severe temperatures are required. If you go to Kagoshima in the south of Japan on the other hand, it is very hot. Screen doors are required to protect households there too. We produce different kinds of products and have a renovation business to protect households in a wide range of situations. That is why we have 25 stores nationwide.
You mentioned that rather than houses being demolished, they are being renovated instead. In Japan, the renovation market is estimated to grow to be worth JPY 7 trillion this year. How do you plan on taking advantage of this growth in the renovation market?
The increase of remodeling needs both domestically and worldwide is a great opportunity for our company. The remodeling business however, is not new to us. We do not just only introduce window screens for newly built facilities. We have been repairing them for existing houses too. Japanese houses are made of wood in most cases, which also does not last for a long time. The life cycle of a house made from wood is between 30 and 40 years, and you have to carry out maintenance on exterior work like painting or repairing the outer wall every 10 or 15 years. Our screen windows are also replaced at the same time. We help customers live a comfortable life by performing regular maintenance to make a precious home last longer. Because the land is small in the country, there are many cases where used houses are repaired and sold in Japan. Therefore, even before people felt it a necessity to remodel or renovate their homes, Nissho was there.
Our sales channels are also a good advantage. We do not only produce products and introduce them on a B2B scale which is an obvious sales channel, but we also introduce our products on a B2C basis as well. We can introduce our products to the end user straight away.
You are based in Hokkaido, which is a very cold region with lots of snow fall, but you also offer your products to different areas of Japan such as Kyushu, as well as having a presence in Thailand, which has a very hot and humid climate. How are you able to adapt your products to suit these different climates and environments?
We were very fast to understand that Thailand, along with the other Southeast Asian countries, were keen to learn about Japanese quality. It was very easy for them to adopt and introduce this quality to their households. By introducing high-quality sash windows and screen doors from Japan, we created an easy to live environment which was valued by people in other countries such as Thailand. Also, in Thailand, they have households with terraces which were made with steel and wood so we developed and modified our aluminum products to introduce Japanese quality terraces from Japan into Thailand.
We opened our office in Thailand, however due to the pandemic, our plans were halted. Once the COVID situation calms down, we believe that we will rebound and begin to introduce our products on a higher scale in Thailand and the rest of Southeast Asia.
You have origins in manufacturing screen doors and today you handle over 50 screen doors, having the largest product line-up in Japan. Can you tell us a little more about some of your screen doors? What advantages do they bring to your customers?
Our screen door products are a roll type. It can be rolled out anytime that you would like to use it. It is very convenient and saves space. For these reasons, it is an outstanding product and our number one advantage when compared to conventional products from other companies. Moreover, We can produce Screen Windows that can be fit with different sizes in each building.
In 2000, you developed the Eco-Wind, an inner-window resin. How is the Eco-Wind superior to more conventional insulators and insulating window products?
Eco-Wind is a window inner resin which improves the airtightness and prevents the heat from escaping the room, while also enabling energy saving and heat insulation. The idea behind it was related to Hokkaido, as it is known as the part of Japan with the lowest temperatures. Hokkaido is actually the only place that has double layers of window sashes, with other areas of Japan only having one layer. In Hokkaido, we have an outside window and an inside one, as we have very hot summers and very low temperatures in winter. It created a situation similar to a heating pot to keep water hot. The temperature will not escape from the house. So, you can balance the temperature during both the hot times and the cold times. That was the idea behind the R&D of Eco-Window, and we came up with this solution.
Can you tell us more about your R&D strategy? Are there any products that you are currently working on that you would like to showcase to our international readers?
At this moment in time, we cannot say which specific product our R&D is focusing on. Rather, we can speak about the direction of our R&D. For the past several years, we have been receiving inquiries from our customers from many different areas. The end users are coming to us with sophisticated inquiries that have not been introduced as a product before. This has given us a lot of energy and we are trying to come up with new solutions and products beyond our abundant line-up to satisfy the needs of our customers.
We know that this year, you expanded to Thailand, and you mentioned before that you would like to target the Southeast Asian region in the future. What strategies will you employ to do so?
We would like to expand all across the ASEAN countries. Our footprint in Thailand will allow us to target nearby countries in the future. That is the next strategy for our foreign expansion. In those countries, there may be companies that would like to partner with us. We will need local partners to help us to penetrate those markets. While COVID has slowed things down, we are sure that as things improve, the ASEAN region will be our target for the future.
What is your midterm strategy for the next six years? If we come back for your company’s 65th year anniversary, what would you like to tell us?
The answer can be divided into two strategies, with the first concerning the domestic market. We would like to increase our sales over the next several years. We are aiming to increase the number of our stores nationwide to 30 so we can capture all types of business, both B2B and B2C. We want to have an overwhelming presence in the domestic market.
When it comes to foreign markets, our offices in Thailand were established in May of this year, and are not in full operation due to COVID. When the situation improves, we plan for further expansion overseas, especially in Thailand. We want to open a new showroom in Bangkok.