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Professional tool solutions with a “Joyful Kiichi Holdings” approach

Interview - June 21, 2022

With nearly 80 years’ experience as a comprehensive wholesaler, trader, and manufacturer of professional tools, Joyful Kiichi Holdings is Japan’s premiere professional tool problem solver. We sat down with President Kenichi Tanaka to discuss how Joyful supports Japanese manufacturing across the archipelago, as well as the firm’s original wrench and cutting tool brands.

KENICHI TANAKA, PRESIDENT OF JOYFUL KIICHI HOLDINGS
KENICHI TANAKA | PRESIDENT OF JOYFUL KIICHI HOLDINGS

Can you give us a brief introduction to your company?

Kiichi was established in 1943. Kiichi has been a wholesaler and trading company since establishment. In 1972, Esco was established to conduct our catalog business.

We are enjoying the advantages of our geographical location because we are all located in Itachibori, an area of the city that is famous for metal and machine tools. We were able to purchase first class tools in Japan and from overseas, which has allowed us to supply excellent tools all over the world.

I have been the CEO of Kiichi Holdings since 2014 and the overall sales for the past fiscal year reached ¥ 22.7 billion. The company’s slogan and philosophy is appreciation and joy. It is important to say that human resources, which make up the company, are important. With regards to the company’s vision, we are a professional team that can energize business relations, especially working from the perspectives of the production site. Through the unique ideas and excellent products of Japan, we are able to introduce quality Japanese tools around the world.

In our holdings company, there are four major members: - Kiichi, Ogawa, Esco and Joyful Import Tools. In the past, these companies more or less acted as separate subsidiaries. Then eight years ago, we modified the structure of these companies. We lined them up and we have been acting as a group company since. We currently have 533 domestic and 50 overseas suppliers. We cooperate with the dealers - 2800 domestic and 500 overseas - with end-users as the final target. Our aim is to solve all the problems that end-users, mechanics or anyone that is dealing with professional tools might be having. Providing solutions to problems is our major mission involving a number of factors such as cost reduction, safety, and quality. This is our core business.

Domestically, the group company is comprised of a lot of different kinds of entities including branch offices, sales offices and warehouses around Japan. We cover the whole country, geographically speaking.

We export from Japan to some foreign countries. We actively participate in specialized exhibitions where we do sales activities through these events. Famous brands we sell are being imported from locations such as Europe, the US, Australia and Taiwan, and we are also acting as a manufacturing company. We have our own brands which we developed - Signet and Prochi.

Esco started off as a very small catalogue. 50 years ago, it was just a printout of several pages, but now we have gradually included different kinds of tools into the catalogue. Everything in the catalogue is in stock. Using this catalogue, procurement is faster. For instance, if you place an order before 5PM, you will have your product shipped on the same day, and it will be delivered on the day after that. All with the shipment free of charge. This only applies for the domestic market, but we have been doing this for 50 years. We will maintain this commitment to our customers. Each year, we reprint our catalogue and dispatch them to our customers to introduce our products. 70% of our catalogue is allocated to the domestic manufacturing companies and 30% for the private brand products. It is an excellent example of the accumulated knowledge that our company has acquired over the past 50 years. We started with just one print out, but now we have many publications as well as digital services. We have large logistics centers in the major hubs of both Eastern and Western Japan.

Ogawa Zen has a long history and was established in 1937. They joined our group company in 2003 doing B2B as well as managing retail shops. Joyful Import Tools, which was formerly known as World Import Tools, joined our group in 2018 and they are doing B2C operations coordinated with Kiichi.

 

In the automotive industry, there are thousands of companies that feed the supply chain just to create one car that contains more than 30,000 components. We know that SMEs are 99% of companies in Japan. What role does your company play in supporting these SMEs? How are you helping their business run more efficiently?

Our company is playing a very important role as an intermediary between the manufacturers of specialized items and we are acting as a trading company more so than as a manufacturer. It is very important to sustain Japanese manufacturing because it is a constant process - we are constantly working on our products because it is crucial to have them delivered on time. We are a company that listens to the needs of the end-users and when they need our products, we adhere to excellence. We handle a wide range of cutting, measuring, and power tools, as well as equipment. We will be there for our customers when they need these tools. We believe that we play a crucial role, which is to sustain the Japanese monozukuri. It does not matter whether the company is big or an SME.



Problem solving is the key word here because we do not only act as an intermediary or simply sell products, but we also try to grasp the user’s point of view and see what needs to be done to make their work more efficient. Aside from supporting the end-users, we also support the retail shops, especially in communicating the needs of production sites and manufacturers to those retailers. We listen to what the proposal is about because the retail shops usually do not have much time to go to production sites and catch everything that might be a potential problem. We work from top to bottom to see what the proposal is and how it could help the end-users. I believe that we play a vital role for Japanese manufacturers.

 

In recent years, you launched Signet, which makes complete tool sets focused around wrenches, and Prochi which makes cutting tools. Can you tell us the reason why you started these brands and the benefits these bring to your company?

It came as a result of our long work in the industry and our close acquaintance with production sites and manufacturing. We tried to see what other needs people might have. These brands which we came up with were a result of a combined production with some other companies. This is a good example of our cooperative work and contribution to manufacturing.

 

Since 2008, the Japanese population has continued to age rapidly and one in three people are expected to be over 65 by 2035. With the decreasing demand in the domestic market, there are fewer people to sell to, and at the same time, there are fewer workers to recruit. How are you responding to these population changes? What are you doing in terms of your recruitment to sustain your business moving forward?

It is true that the population decline here in Japan has been ongoing for many years and many companies, including ours, are facing similar problems. One solution to this problem is to introduce more automation, robotics, and other kinds of machines that replace human labor to some extent. We are already taking measures to address this demographic problem here in Japan. Since the domestic market has been shrinking, we have to think outside the box. it will definitely open doors for us. Expanding our current business segment is not part of the solution, but we are thinking of going into areas that we haven’t been to, for example, in the fields of hobbies or recreation.

 

You have operated internationally since 1955. You were part of a joint venture with KW Tools in the Netherlands when you established an office there in 2003. You have international operations in China, Thailand, and Taiwan. What is your international strategy and where are you looking to increase your sales?

First of all, we would like to energize our production sites here in Japan and overseas by introducing proper tools and improve our procurement capability to supply those tools efficiently. We are not a strictly profit oriented company because we often think from the perspective of providing solutions first. We have already expanded globally to some extent and we are continuously working through our satellite companies on both imports and exports to create win-win situations. This is something that we are looking forward to from now on. Furthermore, a big market of interest would be the US because we don’t have a lot of sales happening there. Similarly, there are not a lot of products that are imported from the US to Japan. We are thinking of capturing this market.

 

Imagine we come back to interview you again in six years for your 85th anniversary, what would you like to tell us? What are your dreams for the company and what goals would you like to have accomplished by then?

We are now rebuilding the headquarters of Joyful Group. We would like to commission this building by 2025. This year is significant for us because we will be hosting the Osaka Expo, therefore there will be a lot of things happening within the next five years. Currently our company has ¥ 22.6 billion in total sales, and our target is to reach a total amount of ¥ 30 billion. At the very least, this is our next target in the years to come. We have very ambitious goals within the next five years.

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