Demographic challenges in Japan have prompted the company to look overseas to address the impending recruitment crisis, with Vietnam and India creating a number of new hiring opportunities.
How do you think Japan should go about lessening its dependence on imported energy?
It is difficult to address such a broad topic so I will speak from the point of view of a company that is active in the rural areas of Japan. As the primary link between suppliers and end users, we believe that carbon neutrality is key to our business.
In the past, carbon neutrality was something that major cities like Tokyo and Osaka strived for, or that listed companies pursued. However, the situation has changed, and even companies in smaller areas now have to take carbon neutrality seriously. It is not something that can be avoided and people’s awareness has changed. This is not happening only in Japan, but also across the globe.
We have established a department that analyzes and diagnoses our CO2 emissions, called the Carbon Neutrality Promotion Unit, and we are actively working to reduce our carbon footprint. Additionally, we have the management resources that we have gained from our many years of working closely with the local community as an energy provider. We believe that we can find business opportunities by combining our management resources with the know-how that the Carbon Neutrality Promotion Unit has accumulated. Furthermore, as we have a wide range of business areas, we believe that we can contribute to reducing dependence on imported energy through our comprehensive solutions, which include providing installation of solar facilities, energy-saving proposals, and electric vehicles, as well as other eco-products.
How has the recent deregulation of Japan's power and gas market impacted your company operations?
When I met with METI (Ministry of Economy, Trade and Industry), they said that the purpose of the deregulation of power and gas is to let the SMEs in rural areas generate and supply power themselves. However, it requires a big investment to generate power, so we were not able to enter the field. I am glad we did not do it now that I see the competition and market growth where only the major companies are the ones who are able to generate power efficiently. Even now, TEPCO covers over 70% of the market share. It is very hard to compete with major companies even with the deregulation. Having said that, creating a competitive environment is a good move forward for Japanese society.
We are currently working with ENEOS as a retailer of their electricity. In our role as a link between end-users and suppliers, we believe that we can contribute to the industry by understanding the problems faced by end-users and communicating them to suppliers.
What do you see as the ideal energy mix for Japan? What types of energies are best suited for the microgeneration model?
Once the energy mix has been decided and the electricity has been generated by the government and major companies, we are the ones that will carry out the distribution to the end users. As such, we are not in a position to discuss the energy mix.
The Ministry of Economy, Trade and Industry (METI) is promoting the local production and local consumption of energy, emphasizing that the future of energy in Japan lies in distributed generation. The cost of installing wind power generation is so enormous that it is not feasible for local companies to handle. I am not sure if this is the best solution, but I see potential in wood biomass power generation that takes advantage of the rich natural environment in rural areas. What we can do now is to contribute to energy conservation by making use of the energy-related know-how we have cultivated over the years. On top of that, our core strength is our ability to respond to all of our customers' needs from our wide range of business areas.
We also collaborate with the Oarai Research Institute of the Japan Atomic Energy Agency (JAEA) in Ibaraki Prefecture to study how hydrogen and other energy sources produced by the JAEA's high-temperature gas-cooled reactor can be supplied to the local community in cooperation with local governments and other private companies.
Can you tell us the impact of Japans aging society on your company? What challenges and opportunities has it presented your company?
The disadvantage of the aging population is that people lose their options. While areas closer to Tokyo are not experiencing as many issues, the northern parts of Ibaraki are being gravely impacted by the aging population. The centralized areas have hospitals, infrastructure, and other many companies to choose from. In rural areas, the lack of options and opportunities is the biggest issue.
Another issue in Ibaraki as a rural area is that talented young people go to Tokyo for university and they do not come back. They stay in Tokyo and work for major IT, AI or construction companies there. We are losing many of our talented young graduates. In order to compensate, we have been receiving inquiries from local companies about hiring top academic Vietnamese or Indian workers to join their companies, and I believe that this is another business chance for us.
It is very interesting how you can facilitate the exchange of talented labor. You have been doing a job fair in Vietnam since 2016 in collaboration with the Hanoi University of Science and Technology, matching more than 200 highly motivated Vietnamese workers with Japanese companies, to supplement workers in Ibaraki and Vietnam. Do you have any plans to replicate that model in other foreign markets like India? Are you looking for opportunities to partner with universities there?
We have originally had a domestic business that connected students with companies here in Japan. Based on this know-how, we developed a model to connect students from the rapidly-developing country of Vietnam with Japanese companies, and launched this initiative. As a result, many Vietnamese students and Japanese companies participated in the program, and we were able to create many hiring opportunities, which were very well received by students and companies. We believe that a similar model can be used in other countries, and we are now preparing to turn our attention to India. Our Indian employee has been in contact with Amity University since the peak of COVID, and we plan to hold a recruitment event there in the fall. We are also considering applying this model to build bridges with other foreign companies, as some countries, such as Taiwan and Germany, have similar needs.
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Your role as a middleman in the hiring process can be a daunting task and there can be a lot of apprehension both from the Japanese company employers hiring foreign workers and foreign workers uprooting their life and moving to Japan and adjusting to cultural differences and integrating into their new environment. How are you helping in facilitating a smooth integration of foreign workers into Japanese companies?
We are currently proceeding with our business in India while receiving advice from an Indian professor at the University of Tsukuba. One of the major concerns that this professor raised was that we were not properly addressing the various kinds of concerns and issues new Indian personnel might face when they come to Japan. Oftentimes, within a year of beginning to live in Japan, they realize that it is not for them and they go back home. It becomes a waste of time, money, and resources for everyone. This is why we are including an introductory seminar before our actual hiring event to explain clearly to students what everyday life in Japan is like. We explain what they can expect to eat if they are vegetarians living in Japan, how they can get around without being able to speak the local language, and many other concerns. While students can just look up this kind of information themselves, we also provide an opportunity for them to get to know the corporate culture they will be joining before they actually submit their application. Additionally, in order to ensure that new employees can adjust to work and daily life smoothly, we partner with local universities to provide students with Japanese language classes. We already offer Japanese classes at the Hanoi University of Science and Technology in Vietnam, and Amity University in India has requested us to hold language courses as well.
Of course, we also continue to provide support following the arrival of the new employees in Japan. This is handled by our group company that handles staffing services, Sekisho Career Plus. We assist the companies in conducting check-in interviews with their staff, address any problems that have arisen, and provide assistance to the employees with their daily life.
Sekisho has various business divisions including energy, HR services, and mobility with dealership operations for automotive brands and rental cars. You also offer life support services like mobile shelves and the operation of convenience stores. You have a unique perspective on these different applications. From your point of view, what part of your business activities is most suited to digitalization?
We are not confining ourselves in any specific area when it comes to digitization. We need to improve efficiency through DX (Digital Transformation) in all areas. Like carbon neutrality, IT digitalization is something that all companies including rural SMEs need to adopt.
Our strength as a company is being a wholesaler in B2B business with approximately 20,000 customer accounts. Last year, 85% of those customers had dealings with only one department, while the remaining 15% had dealings with two or more departments. We were unable to diversify our revenue streams. We are now trying to emphasize and encourage communication among our departments to create synergies and increase overall sales.
Conventionally, our business model as a car dealer was to sell a Mercedes or a Honda. However, times have changed. More important than selling a Honda or Mercedes to the customers is increasing our outlet and having a connection with new customers where we can expand our integrated Sekisho services. This is how we are able to use car sales to expand our business opportunities. This allowed us to increase the number of our customers. In the past, if you were selling a Canon copier, the purpose was just to sell Canon. However, in doing business with our customers, we found that they have a variety of issues that need solutions. Sekisho’s integrated business solution provides adequate solutions and proposals to all our clients.
With society changing and issues becoming more complex, department heads have to learn how to get along because solving issues that come up and providing multiple services need all the departments to collaborate together and take advantage of the diverse backgrounds of all the staff including the foreign workers. The customers are not interested in learning about the products themselves. They want integrated solutions to overcome the challenges they are facing. Thanks to the diverse human resources and accumulated experience of our company, our employees are able to respond to customer needs not through a departmental approach, but through a company-wide approach.
Are you open to the idea of collaborating with partner companies in Japan or overseas to create original products and services that can help you better serve the needs of the people?
Right now, Tsukuba City in Ibaraki Prefecture has been recognized as a Super Science City, so we are in the process of researching next-generation mobility with companies such as ENEOS and ORIX as members of the planning committee. In another project, we are also collaborating with Fujitsu, Honda, and other major companies. In order to provide comprehensive services, we have them dispatch personnel when we need that company's expertise and know-how. If things go well, we ask those employees to stay in our company. This is how we are trying to revitalize and welcome new blood to our company to help us open up and create new possibilities. We also work to understand not just the strengths but also the weaknesses of the company, so we can find partners that can compensate for our weaknesses.
Sekisho is a family business and my father is the chairman. During my father's time as president, we have been proactive in terms of business diversification. My role as successor to him is to streamline the business and create horizontal connections and synergies within the divisions. I would like to pass on a sustainable company to the next generation.
This year is the 115th anniversary of your company. If we come back in 5 years, what goal or ambition would you like to have achieved by then?
We have several projects underway, but above all, we are focusing on creating a comfortable work environment for our employees so that they can do their best despite any circumstances they might have. We have employees who are sick, injured, or have personal problems with themselves or their families, and our goal is to create an environment where they can continue to work despite such hardships and difficulties. Providing such an environment for our employees is very crucial to ensure our company's sustainability.
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