Nitto Kohki Advances Manufacturing with a New Fukushima Facility and a Focus on Sustainable Growth

On March 1, 2024, Medotech of Yamagata City and Shirakawa Nitto Kohki of Shirakawa City merged, marking a new phase of regional integration under the name Tohoku Nitto Kohki. As part of this integration, a new factory was established in Fukushima City, strategically located in an industrial park near the Fukushima Ozaso interchange on the Tohoku Chuo Expressway. Could you tell us more about the purpose and role of the new Fukushima facility?

The need for a new factory came from the aging condition of our existing facilities. The Medotech site was over 60 years old, and the Shirakawa Nitto Kohki facility was more than 50 years old. There was a clear need to introduce a state-of-the-art manufacturing line incorporating automation, machining, and robotics.

This initiative was one of the key agenda items I inherited from my predecessor, and it was something I was committed to pursuing once I became president. When I considered how to upgrade both facilities, it became clear that integrating them into a single, larger site would allow us to significantly improve productivity. That led to the decision to establish the new, unified factory.

The most important part of this transition was preserving both the manufacturing technologies and the employees. Each of the two legacy factories had around 120 operators, and my goal was to retain as many of them as possible at the new facility. The new factory is located between the two original sites, and while it takes about an hour to travel between interchanges by car, a full door-to-door commute can take up to 90 minutes.

To support our employees, we offered the option of staying in a corporate dormitory. At the same time, I also wanted to provide a highway commute option for those who preferred to stay in their current homes. As a result, 70 percent of the employees from both factories chose to join the new facility. I’m especially proud of that retention rate, given that many of our staff have families to care for, and some are also responsible for cultivating rice paddies and farmland.

The new factory incorporates automation, labor-saving technologies, and a barrier-free design. Could you tell us more about these new technologies, how they are being introduced, and how they are enhancing your production capabilities?

In the new factory, we use a combination of technologies. One third was transferred from the legacy Medotech Yamagata facility, another third came from the Shirakawa factory, and the remaining third consists of cutting-edge technologies that we’ve newly implemented.

We introduced an automated warehouse and automated guided vehicles (AGVs) to manage all inventory. Our goal is to operate the factory 24 hours a day, even during unmanned hours, to reduce the workload on our operators and make their jobs easier. With operations now fully visualized and monitored, we are also preparing to integrate AI technology to detect early signs of malfunctions and equipment wear.

I also made it a priority to create a greener, more eco-friendly factory with lower electricity consumption and reduced emissions. While providing a safe and comfortable work environment for our employees was a fundamental requirement, we also aimed to produce eco-conscious products that would build greater trust with society. By introducing these new technologies, we’re confident that we will improve both productivity and efficiency, which will ultimately strengthen our competitiveness.

Factories often carry certain stereotypes when it comes to cleanliness, comfort, or overall work environment. However, your new facility challenges those assumptions. It’s the first factory ever designed by Kengo Kuma, the renowned architect behind the Japan National Stadium, alongside Taro Ashihara, who brings extensive experience in factory design for major manufacturers. Together, they applied the concept of an “attractive factory,” creating a space that is not only functional but also inspiring for workers. Could you tell us more about this “attractive factory” concept, what inspired you to pursue this design approach, and how you see it benefiting your operations?

Nitto Kohki is not a high-profile company. We operate purely on a B2B model and have around 1,000 employees. But those employees are extremely dedicated, and their hard work creates a great workplace atmosphere. That’s why I wanted to give them a factory they could feel proud of. When I started thinking about the concept for the new facility, the idea of working with Mr. Kengo Kuma came to mind. He’s a friend, and of course, a world-renowned architect. I thought that having a factory designed by him would instill pride in our team.

When I approached Mr. Kuma with the idea, he was surprised. He had never designed a factory before. But I told him how much it would mean to my employees to work in a space created by someone of his stature. Eventually, he agreed.

We visited the site together. At the time, it was just an open field in an industrial park. But Mr. Kuma, being the artist that he is, was immediately drawn to the natural beauty of the surroundings. He walked the entire site, climbed the stairs to the highway, and noticed a stunning view of the mountains. He told me he wanted to design a building that took full advantage of that landscape. To do so, he asked for full control over the factory’s design. I gladly gave him that freedom, and he accepted the project.

Since Mr. Kuma had no prior experience designing manufacturing facilities, I also reached out to Mr. Taro Ashihara, one of the most respected architects in this space and close friend of Mr. Kuma. Mr. Ashihara had previously designed factory for major companies and brought deep expertise to the project.

One of the major challenges Japan faces is demographic change, with an aging and declining population, especially in areas outside major cities. This is projected to lead to a 12 percent worker shortage by 2040, and there are growing concerns about regional sustainability, with an estimated 700 municipalities at risk of disappearing by 2050. Do you see your new factory as a potential model for other companies—demonstrating that regional revitalization can be economically viable and socially impactful?

In launching our new factory in this region, we found Fukushima City to be highly supportive and collaborative. As you know, the city has been facing population decline, partly due to the nuclear power plant accident, and it has struggled to attract large-scale industrial investments. On top of that, many working-age individuals continue to migrate to Tokyo, where job opportunities are more concentrated. New graduates and younger workers often choose to live and work in Tokyo because they feel there are limited options elsewhere. This trend is clearly visible in Fukushima, where local communities are steadily losing their working population.

Our decision to build a new factory in Fukushima was intended to help reverse that trend, and I believe it already has. Since last year, we have hired 46 new employees from the region, which is something I’m very proud of. We also plan to continue hiring between 10 and 20 local employees annually. Beyond direct employment, the new factory is also expected to increase subcontracting opportunities in the area, further supporting the local economy.

Importantly, our factory incorporates advanced technologies aligned with the growth areas identified by the local government, including robotics, medical devices, and information technology. Both the prefectural and city governments hope that our presence—and our potential collaboration with local startups in these fields—will further stimulate the regional economy. I would certainly welcome any opportunity to collaborate in that direction.

While this may not apply universally to all revitalization efforts, our factory's location also benefits from a unique local context. Near the site, there’s a popular farmers’ market known for selling some of Japan’s finest fruit, including peaches and cherries. Because our factory was designed by Mr. Kuma and has received so much attention, we’ve had many requests for tours. This year, we expect to welcome more than 400 visitors.

The hope, shared by both our company and the local government, is that these visits will generate additional demand for the hospitality sector, as visitors stay overnight in the area. Fukushima is also home to several well-known hot springs, so guests can combine their factory tour with local sightseeing. In fact, the mayor is even hoping to position the factory as a kind of tourist destination.

“Delvo” electric screwdriver for automatic screw fastening

Recruitment, career progression, and talent development are essential components of regional revitalization. At your Fukushima factory, you're actively recruiting both career professionals and new graduates. Could you tell us more about those efforts? What types of roles and skills are you looking for, and how do you support career growth and development within the company?

For newly joined employees, I place strong emphasis on learning production engineering and manufacturing process technologies. In addition to mastering the fundamentals, I also want them to become proficient in using AI, automation systems, robotics, and other advanced technologies. These are the key skills we expect them to develop.

Cross-training is another important area. I want our employees to be versatile so we can alternate between different types of production as needed. To support this, I’ve also established a lab focused on new technologies and capabilities.

Last year, we hired 20 new employees. Ten were assigned to the Yamagata factory and the other ten to the Shirakawa factory. They will spend a year at those locations learning core technologies before transferring to the new Fukushima factory. It may require a great deal of effort, but my expectations for them are high.

Looking at your history, in 2015 you established a liaison office in India to gather market intelligence, and I understand you have since set up a subsidiary there to support your business expansion. Could you tell us more about your objectives for the Indian subsidiary, and how you plan to capitalize on growth opportunities, particularly in the automotive and medical equipment sectors?

India is a highly promising market, with a population of around 1.5 billion that has now surpassed China. What makes it especially attractive is that much of the population is young and entering the workforce. It’s the fastest-growing market in the world, and the pace of development is truly impressive.

I first visited India about 40 years ago, in 1985. At that time, the country was still facing significant poverty, but the transformation since then has been remarkable. For example, one of the world’s leading IT system integrators has established a strong presence in Japan and serves major clients. The strength of India’s young, growing workforce continues to drive this kind of development.

We initially entered India with a liaison office, but we have since expanded that into a full subsidiary to better capture the growth opportunities. When we only had the liaison office, our business in India relied on local dealers. Now that we have a subsidiary, we are selling directly, managing our own inventory, and controlling our marketing activities.

We’ve seen significant revenue growth in sectors like automotive and air conditioning, and we expect the medical equipment market to become a major contributor as well in the coming years.

I’d like to discuss decarbonization and hydrogen fuel technology, which is gaining momentum as a clean and sustainable energy solution across transportation, industrial, and residential sectors. I understand that Nitto Kohki sees this as a key opportunity and aims to contribute to the development of a hydrogen-based society. Could you share your vision for the future of the hydrogen society, and explain the role you see Nitto Kohki playing in its advancement?

First, I’d like to touch on decarbonization and CO2 reduction, which are important goals for us. When launching our new factory, we were mindful of how to reduce emissions and utilize clean energy. Our product development efforts also prioritize energy-saving technologies. For example, some of our products now consume between 20 and 70 percent less power than previous models.

As for hydrogen, it represents a very promising energy source—particularly because it produces no CO2. The challenge, of course, lies in addressing the cost. If we can solve that, hydrogen could become a key pillar in clean energy.

Nitto Kohki has been involved in hydrogen-related product development with major automotive company going back to the early stages of their hydrogen vehicle research. Developing hydrogen storage system technology is extremely complex. The system must be durable enough to withstand pressure levels that are 7,700 times greater than normal atmospheric pressure.

Our collaboration with automotive company began with the development of components for their hydrogen-powered vehicle. Today, our products are used in their hydrogen fuel cell buses as well.

Our HHV CUPLA product, which is used in hydrogen fuel cell buses, involves a highly complex technology. It requires a much higher level of precision than the products used in passenger vehicles. If we can successfully complete and refine this technology, the potential for expansion is significant. We could eventually apply it to vessels, ships, and even the aerospace industry.

“HHV CUPLA” fuel coupling for high pressure hydrogen

The HHV CUPLA is a strong example of how Nitto Kohki has expanded its product lineup to serve a broader range of applications. Are there any new products currently in development that you can share with us?

As part of our medium-term management plan, we are focusing on one of our key themes; the proactive development of products that support automation, labor-saving, and environmental sustainability.

With growing demand across industries for labor-saving, workforce reduction, and automation solutions, we are accelerating the development of products that address these challenges and contribute across a wide range of sectors.

Specifically, we are strengthening the development of products compatible with automated equipment and robots. For example, we have released automated models of our popular pneumatic tool series, designed for integration with other companies’ collaborative robots. These solutions play a significant role in addressing labor shortages and improving operational efficiency. We are also actively collaborating with system integrators (SIers) that provide robotic automation solutions.

In parallel, we are committed to developing environmentally friendly products that reduce environmental impact and improve energy efficiency. These new products offer improved work efficiency, a better working environment, and reduced power consumption compared to conventional models.

Through these efforts, we aim to contribute both to solving industrial challenges and to building a more sustainable society. Looking ahead, we will continue to drive innovation, create new value, and pursue further growth in the global marketplace.

One more of our strengths lies in power tools designed for automation and robotics. We’ve worked with robot manufacturers to launch an automation model that incorporates our air tool. By improving efficiency, we believe we can help address labor shortages, so we also collaborate with system integrators on these solutions.

Another example is a low power consumption pump for material handling, which can reduce electricity usage by up to 70%. In summary, we are focused on three key pillars: products for advanced market, robots and Eco-friendly.

How would you like readers around the world to perceive Nitto Kohki?

Nitto Kohki aims to be a company that contributes to society by offering labor-saving products and solutions. This vision is rooted in the philosophy passed down by the founder’s wife. When I joined the company, I was surprised to discover the credo and vision the founder established 70 years ago. In that vision, the top priority is contributing to society. The second is ensuring the happiness of our employees. Only after these two comes the growth of the company, which is seen as a result of fulfilling the first and second priorities.

We’ve been involved in various social responsibility initiatives, including support for people with disabilities and assistance to local communities during the pandemic. There is still much more we have done—and can continue to do. One of my goals is to raise Nitto Kohki’s profile internationally, beyond Japan.

For more information, please visit their website at: https://www.nitto-kohki.co.jp/e/company/outline/

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