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Reaching out to the world as a general plant engineering company

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Interview - October 2, 2021

Ihara Furnace has a rich history construction technology encompassing a wide-range of fields such as architectural engineering, ceramic engineering, metal engineering, mechanical engineering, electrical engineering, electronics, and control engineering. They now find themselves entering fields such as industrial furnace plants, environmental plants and rocket launchers. We sat down with President Etsuji Ihara to discuss the future outlook of Ihara Furnace.

PRESIDENT ETSUJI IHARA OF IHARA FURNACE
PRESIDENT ETSUJI IHARA | IHARA FURNACE

Japan is a very resource-poor country, it has no oil, no copper, no coal, no natural resources, but still it is the third largest producer of steel in the world after India and China. Japanese industries are facing steep competition from regional competitors such as China, Taiwan, and South Korea over the last 30 to 40 years. How can you explain why Japan remains one of the largest producers despite being poor in natural resources?

This is a difficult question to answer since we are not a steel manufacturer. Compared to other countries here in Japan the labour cost is relatively high as well as the energy cost. All of these factors are negatively impacting the steel manufacturers, therefore one thing that manufacturing companies do is to lower the labour cost, we can do this by producing a kind of furnace that could save energy. Also, it is important to come up with an operation system that can be utilized with a limited number of people.

 

Last year the Suga administration announced the carbon-neutral target for 2050, and we see companies such as JFE Steel are saying that the furnaces that they use must reuse or reduce the CO2 that escapes the furnace. As a company that is involved in furnace designs, can you tell us how you are enabling your clients to meet the carbon neutral targets which is to reuse and reduce CO2 in furnaces?

One of our company’s characteristics is we have a large share for the furnaces for the glass manufacturers and one of our main customers is AGC. We would like to add that we are no longer producing furnaces for iron making. At the moment we have about 70% of the shares for the plants that are supplied to the glass makers in Japan. As for the energy saving efforts, when it comes to glass plants we are using the cullet preheater technology where we collect the heat that comes out from the chimney of the plant and reuse that heat to warm up the glass raw material.


Cullet Pre-Heater


You have your industrial furnaces that are used for heating, smelting and various other industrial applications. You also have the design in building environmental-based technologies for waste incineration for urban waste disposal, and finally you have your original products such as your hot air burners. Which of these business lines is your main focus and where do you see the most potential growth in the future?

Our main focus is the production of plants for the glass makers. Looking towards the future we would like to focus more on environmental-based technologies since the world’s attention to environmental issues continues to grow. Our mission is to put more effort into better treatment of the emissions from the furnaces, and we expect that the demand for such treatment technologies will grow in the future.

 

The construction boom in Japan occurred more than 50 years ago around the time of the 1964 Olympics, at the same time many construction happened. Therefore there are many furnaces in Japan that need to be maintained and revitalized. Your company has developed technologies such as probes or endoscopes that can withstand high temperatures to check what is needed to be repaired in furnaces. Can you tell us more about your upkeeps and maintenance business and how are you helping your clients prolong the longevity of the furnaces?

The endoscope that we are using is made in France and we are working very hard on the inspection of the furnaces. It is indeed very important to carefully examine the furnaces where they need to be repaired and maintained. Since our foundation we do not just produce and supply our plants to our clients but we actually focus really hard on the after sales services. This business activity is very important to us and to our clients. In the past we used to heavily rely on the skills of our engineers for the repair and maintenance, but these days we have fewer skilled and seasoned engineers, therefore it is very important to come up with ways to quantify their know-how and expertise and that is the reason why we have been using endoscope and thermography. As soon as we find any imbalance in the temperature we propose for maintenance of that furnace based on the data that we get from cutting edge technologies that we possess.

 

For a company such as yours that is involved in furnace designs the R&D must be a crucial aspect in your business. We know that your refractories and the designs of your furnaces are critical to ensure that the extreme temperature changes do not impact the foundation of the furnace and to also ensure that the chemical reactions that take place remain neutral. Can you tell us more about your R&D strategies and some of the goals you are focusing on with your technologies?

While it is true that R&D is crucial for the growth of a company, it is very difficult to bring out the success only through R&D efforts. In fact, some companies find it a waste of money by investing massively into their R&D especially that in this country the growth has come to a halt, there is a significant reduction in the R&D investments. However, we strongly believe that the new products or services should lead to the further growth of the company, to achieve this we have continued focusing on our R&D functions. As regards our Cullet Preheater that we brought into the market, this is one of the things that resulted from our R&D efforts. Although it has been commercialized, it is not a complete device yet. It needs to achieve energy saving functionalities, thus, we continue to work with our R&D department for this particular product. Our employees in our R&D have been working on the simulations of this product by producing a smaller model of this product. They obtained the data by operating on this actual model instead of simply using the computer. We are looking forward to contributing to society through this product. This is our main focus in our R&D at the moment.

 

You worked with an American firm to develop the electric melting furnace previously. Can you tell us more about your co-creation process? Are you looking for partners at the moment to develop new products?

If we could find a company that has new technologies that we do not have, we would be willing to collaborate with them for co-creation. One example is the collaboration that we did with a company called CRI, USA. We do not have many projects at the moment, nevertheless we are working with that company for glass-related and some iron-related projects.

 

Your company was founded in 1892, next year you will be celebrating your 130th anniversary. Kindly run us through the key milestones of your company, your main competitive advantages, and the technologies and solutions you could provide to your customers.

Our greatest competitive advantage is our technology that has been developed and passed down from one generation to another. We are now in the 6th generation, and we have been utilizing the know-hows and technology accumulated over years.

 

Japanese companies usually use their know-how to transfer to different industries as part of diversification. Your company has done something similar which is your waste treatment technology that you have developed from your know-how on furnaces. Can you tell us more about this waste treatment technology of yours and your strategies to expand it to Southeast Asia?

Our mission is to use our technology for the contribution to society and that is the reason why we would like to expand its application to other industries. Another competitive edge that we have is we are able to provide total solutions particularly for the glass plants. Sometimes the manufacturers tend to procure the different components from other companies and assemble them to make the plant. However, in our case we are able to design and produce all the necessary equipment and processes from a device that mixes the raw materials to the actual furnace to melt those materials. Furthermore, we are also able to design and produce the emission treatment systems as well as the chimneys for the emission gases. We have the capability to design and construct the total solutions for the furnaces. I believe this feat is very rare in this industry. We plan to stick to this business style as long as there is need for total solutions.

 

A part of your goal is you set your target to be a company with no border in technologies. You established offices in Indonesia in 1997, in South Korea in 2007, and in Thailand last year. What are the benefits of having these international locations and your goals in those locations?

I mentioned above that we are focusing on the after sales service which requires detailed care. It is important for us to look at the conditions of the furnaces because we consider them to be living creatures. In order to carry out such detailed care for the after sales service it is important to place our engineers close to the clients, this is the reason why we expanded our bases across the globe. Currently we have operation sites in Japan, East Asia, Southeast Asia, South Asia including India. We are mostly located in Asian countries but we would like to go to the west in the future and maybe establish an office Europe. We would like to enhance our know-hows and technologies and then expand our Ihara brand in these aforementioned international markets. We would like to become a company that is needed in the European market.

 

If you go to the European market, what strategy will you adopt? Will you be doing joint-ventures, M&A, or establish a new office or factory?

The strategy that we would be adopting is case to case basis. Furthermore, we have some business relationships with French manufacturers that produce excellent goods.

 

Imagine we come back to interview you again in three or four years, what would you like to tell us? What are your dreams for the company and what kind of legacy would you like to leave?

By that time it would be about reducing carbon emissions. In Japan the energy cost is very high, thus, the electric boosting system may have some limits.

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