With products contributing to improved productivity and unmanned logistics in a wide range of fields, Seibu Electric is dedicated to new challenges and meeting customer satisfaction
Japan has become famous for its monozukuri and kaizen philosophies, and these ideas on production have become very well-known in the West. However, regional competitors are challenging Japan from nations such as Korea, Taiwan, and China. Your firm is in several sectors with the machinery options you provide. Could you give us some perspective on how regional competition has affected your business and what you think are the strengths of Japanese manufacturing?
The strength of Japanese companies is that collectively we have always aimed for the best, cutting-edge technologies. Each and every company here domestically is in the possession of its own unique technologies that have been passed down throughout the generations of the company.
Quality assurance is the key to elevating the quality of products, and to do so Japanese companies have always found the best and most efficient way of production, thus the final output reaches the highest possible quality achievable. Japanese companies are able to meet and provide high standards of QCD thanks to a comprehensive management system that not only includes production but also stock control, warehousing, logistics, and human personnel education. Our company is very particular about achieving high standards of QCD, and with such, we are then in turn able to provide comprehensive solutions to our clientele both domestically and overseas.
I personally feel that these are essentially the generic strengths that most if not all Japanese companies possess, but to add to that we have further strengths that are unique to our company.
In terms of our own company’s individual strengths, we strive to overcome today’s problems through our superlative technology. The head office of Seibu Electric is located here in Fukuoka Prefecture, and since our founding in 1927, we have constantly met the challenge of technology, developing products that meet the evolving needs of a rapidly changing society and an increasingly diverse world. We leverage decades of work in the fields of distribution equipment, industrial machines, and precision machines in order to propose ideal solutions to our customers. As we have continued to grow as a global mechatronics manufacturer we have earned a solid reputation worldwide.
In fact, as a comprehensive logistics manufacturer, we developed Japan’s first automated warehousing facility in 1966, and then in 1983, we developed an automated picking system. Today distribution systems are further evolving into robotics systems, integrating mechatronics technology, AI, and IoT to further enhance quality and minimize energy consumption through automation.
Actuators, a crucial but seldom seen component, is another one of our signature products. With over 700,000 units sold, our company name is almost synonymous with valve controllers. The reliability of our products is evident in the trust the market places in us, with a 70% share of the domestic market in both drinking water and sewerage installations. Our Semflex series of valve controllers not only deliver high-speed response times but also make labor savings possible by implementing planned maintenance schedules. Gates of all sizes are installed along waterways and seashores to protect against flooding and tsunamis. Seibu Electric manufactures both horizontal sliding gates as well as traditional swinging gates.
In 1972 we developed the world’s first wire electric discharge machine with Computer Numerical Control (CNC) support. Since then we have continued to pursue the ultimate precision in machining. The incredible machining precision of these systems is helping manufacturers in Japan and worldwide with advanced fields such as smartphones, electronic components, automobiles, aerospace, and medicine.
From our time in Japan, we have seen that the population decline is a huge issue affecting companies. In 2023 the population dropped below 126 million and Japan is the world’s first super-aged society. In fact, more than 29% of people are over the age of 65. Your company provides automation systems which could help with Japan’s issues. Could you give us your perspective on the opportunities coming from Japan’s population decline in terms of human resources and in terms of business?
With the aging and decline in population, there is inevitably a shortage in labor, and our company is no different from a number of domestic companies in terms of struggling with recruitment. Therefore, in terms of our production automation is the key. However, with automation, there are also concerns that it will cause social problems such as a decrease in employment opportunities, a decline in skills and abilities, and widening social disparities.
Society overall is changing with the introduction of automation and robotics. In my opinion, it is inevitably going to reduce the opportunities for employment, thus the need to create new businesses in order to allow employment of displaced workers is critical. Then you also need to consider factors such as reskilling workers for these new businesses.
In some industries, it is necessary to replace manpower with automation. Fields such as logistics are hard work and quite a burden on employees, so introducing automation in this field is a must. Currently, our business focus is to provide the means to mitigate the load and burden on people working in the logistics industry by offering automated solutions and providing comprehensive services.
Your company is quite distinct in the fact that you have 3 divisions that are quite different, but at the same time, must have synergies between them. You have your logistics division, precision engineering division, and your industrial division. Can you give us an idea of the synergies between these 3 divisions? How does each division help the others?
Our company’s business strategy is to become a mechatronics manufacturer that provides comprehensive solutions. With that vision we have evolved 3 divisions, the distribution equipment division, the industrial machines division, and the precision machines division. With these 3 divisions working in unison, we aim to provide holistic mechatronics solutions to our clients. We want to cover a wide range of industries and support them through the contributions of our unique technologies and know-how.
In terms of the distribution equipment we provide, it is important to learn the needs of the customers we cater to. We are professional in the comprehensive services we provide to clients, supporting through the combination of both hardware and software in order to provide solutions that mitigate the issues customers are experiencing. By combining 3 of our main technologies together on a project we are able to provide the most appropriate logistics solution to our customers. Those technologies are our AS/RS（Automated Storage Retrieval System）, the automatic case-picking system, and the automated piece-sorting system.
In terms of our industrial equipment, we provide a valve actuator which is an important component in controlling everyday utilities such as water, gas, electricity, and oil. We also provide the actuator drive gate which is a vital component in disaster prevention.
Our third division, as you mentioned, is our precision machines division. In the precision machines division, we are conducting production with the same attention to detail as handmade products, which have features unachievable in mass production.
The devotion has enabled us to develop machines capable of maintaining high precision over long periods of time. We have utilized our exclusive Seibu technology to develop wire EDMs that have earned a solid reputation for their pitch cutting accuracy, NC lathes capable of machining small precision parts, and grinding machines capable of free-form machining for providing customers with products that meet their accuracy and precision needs.
Furthermore, we have developed an ultra-high precision oil processing machine suitable for processing molds such as lead frames and motor cores, as well as electronic and medical parts. The high level of processing accuracy is due to the repeated ``kisage'' process, resulting in a flat surface that cannot be obtained by mechanical processing.
Your firm has a wide range of clients; from automotive companies to petrochemicals, and even to food production, civil engineering, and construction. Which among these sectors of clients do you see as the primary focus?
We want to fortify all three divisions of our business. All three are important pillars of our business, catering to a wide range of industries. Speaking of growing and high-potential markets, there are a few in particular that we are keeping our eyes on, those being the semiconductor market, EVs, and battery-related manufacturing. I would even go as far as to say that the semiconductor and battery markets are areas we are focusing on domestically.
As for overseas, we have a cooperating factory and office base in Thailand. Centering around Thailand, we want to expand into Southeast Asia further using our Thai offices as a base of operations.
Japan is very famous for its R&D spending, with 3.5% of the country’s annual GDP being spent on this endeavor. In terms of your R&D strategy, could you provide us with an insight into some of the new technologies you are working on?
We are actively involved in R&D through partnerships and joint research. We partner up with similar companies in some of the industries we are involved in, but we also partner with certain academic institutions to conduct joint research. This is all in the endeavor of developing total and holistic solutions for our customers.
The starting point of a majority of our recent R&D projects has come from our customers. Providing solutions to their problems is the key for us. We have a deep relationship with academic institutions, and we are involved in certain circles such as the Precision Engineering and Mechanics Association and the Electronics and Engineering Association.
You mentioned that partnerships are very important to product development. Are you looking for any partners from overseas locations?
At this moment we are only focused on domestic collaborations, with the idea that we are not yet expanding our collaborations overseas. In the future, this is a possibility, but not at this moment.
We are in Kyushu today, the home of the semiconductor industry in Japan. Kumamoto is going to have a new fabrication plant with Sony and TSMC’s massive investments. Even north in Sapporo Rapidus is going to be manufacturing a 2-nanometer node, the smallest in the world. There is an increasing amount of attention on Japan, especially with the geopolitical situation with Taiwan and China. As a company that assists this semiconductor industry, what opportunities do you see coming from this increased investment and attention in Japan?
We are well aware of the semiconductor movement throughout Japan including Sony and TSMC’s new fabrication plant in Kumamoto as well as Rapidus’ activity in Hokkaido. However, we are still trying to discover which way to go and how we can get further involved in the semiconductor business. Our AS/RShas already been incorporated by companies that are involved in the supply chain for Sony and TSMC. We want to expand through these companies, providing further services to them.
What is happening in the automotive industry is a once-in-a-lifetime change with the switch from internal combustion engines (ICE) to hybrid vehicles or fully electric EVs. Change is occurring at different paces, with Japan setting a date of 2035 thanks to former Prime Minister Suga. If we look at Europe and countries like Norway, they are much further along, with some countries even halting the sale of traditional ICE vehicles. In terms of your clients and your technologies, how are you adapting your systems to this next generation of vehicles?
Domestically speaking, we provide a material handling system for battery testing. This includes aging testing where batteries are placed in high temperatures and durability is checked. We have learned that there is a growing need for this system globally so if we could find international business opportunities for this system it would be a great move for the company.
You’ve been present in Thailand, and you mentioned earlier your intentions to expand your business in Southeast Asia. Could you talk to us about some of the strategies you intend to employ in order to do so? Would it be through a joint venture, M&A, or perhaps a new office or factory in that region?
Across ASEAN countries there is going to be a growing need for automation as well as a reduction in manpower which will require the use of labor-saving devices. What we are trying to do is find finding new markets in the ASEAN region. We are also looking for partners who could produce our equipment in those localities. With the business we are in we don’t conduct simple one-off sales, and maintenance services are critical for our clients. We want to create such a service in the ASEAN region.
As for our precision machinery, our biggest customers are in China, so we would like to continue to focus on the Chinese market with this division. However, outside of China so we think that increasing our sales network across Asia in countries like India would be a good move. That move might also include North America and Europe as well so that we can have a comprehensive sales channel throughout the world. At the moment M&As and joint ventures are not within our interests, however, we do want to keep these strategies open as possibilities to expand overseas.
Imagine that we return in 2027 to celebrate your company’s 100th anniversary and have this interview all over again. Do you have a personal goal or ambition that you would like to achieve by the time we come back for that new interview?
Heading towards our 100th anniversary ,there are internal discussions being had on what to include in the next mid-term plan for the upcoming 4-years. There is a goal to have a big fireworks display at that 100th-anniversary celebration.