By mastering the science of separation, Tomoe Engineering provides essential machinery that supports the world’s environmental infrastructure.
If you could please formally introduce your company and yourself to our readers, we would appreciate it.
Certainly. Our company was founded in 1941, which means we’ve been in operation for over 80 years now. Allow me to briefly introduce our organization. We operate two primary business divisions: first, a chemical trading business specializing in the import of specialty chemicals; and second, a machinery manufacturing division focused on centrifugal separators. Both divisions originated through partnerships with American companies. Our machinery business began by introducing technology from Sharples, a top-tier manufacturer of centrifugal separators. Even today, we continue to build upon that foundational technology.
Our trading division began as an agent for Union Carbide, which has since become part of Dow Chemical. That historical connection laid the foundation for the chemical side of our business. While there is a long and complex history there, I’ll set that aside for now and talk about the current structure. At present, our revenue composition is approximately 75% from our trading business and 25% from machinery manufacturing. Previously, the split was closer to 50-50, but over the years, the trading division has expanded significantly. One key reason for that growth is our focus on highly niche product areas where we command an exceptionally high market share. This specialization is the main driver of our success in the trading business.
My own background is from the trading side, and I can tell you that, years ago, it was rare to have individual product lines generating more than 100 million yen (approximately USD 660,000) in profit. Today, however, we have dozens of such high-performing products. That consistency and profitability have helped stabilize and grow the business.
So, the machinery business has stayed smaller due to market constraints?
That’s correct. In Japan, the primary markets for our centrifuge products are wastewater treatment facilities and chemical manufacturers. We also serve the food industry, but our machinery is particularly strong in the first two sectors. However, both those markets are gradually shrinking due to Japan’s declining population. That demographic trend has made it difficult for the machinery division to grow beyond 25% of our total revenue.
Since becoming President three years ago, how have you approached this?
When I assumed the role of President, I recognized that the trading business would continue to grow organically. So my goal there has been to support its steady development, particularly by increasing the number of product lines that generate more than 100 million yen in profit.
But my primary focus the area I felt required the most attention was the machinery business. We could no longer rely on the status quo. To address this, I formulated three strategic pillars for revitalization.The first strategy is to double revenue from the machinery division. We are pursuing overseas expansion, especially in markets where our technology gives us a competitive Edge, specifically in the chemical sector. Our machinery holds a dominant share in the PVC (polyvinyl chloride) market. In China, for example, we command roughly 90% market share. We expect India to follow a similar path, with a market size comparable to China’s beginning to emerge. That’s where we are focusing our international expansion efforts.
You mentioned your machinery is particularly competitive in the PVC market. Could you elaborate?
Certainly. Within the chemical processing industry, our centrifuges are highly specialized and technically advanced. In the PVC sector, we hold a leading position globally. Our main competitor in this specific application is one European firm so essentially, it’s a two-horse race between us and them. This gives us a significant competitive advantage. And because there are so few players in this niche, it becomes a question of whether or not we can secure those projects. Given our technical strengths and proven track record, we’re confident in our ability to win. That’s the first strategic pillar growing our machinery business internationally by leveraging our leadership in the chemical sector.
And your second and third strategic pillars?
The second pillar from a strong desire both personally and within the company to contribute to environmental sustainability. With that in mind, we developed a proprietary binary power generation system. This initiative has been in development for around four years and is now beginning to enter the market. While the initial idea was to harness geothermal energy from Japan’s many hot springs, we found that hot spring heat is highly unstable and not a reliable source.
We pivoted to a more consistent solution: recovering waste heat from industrial plants, particularly low-grade heat below 100°C that is typically unused. We’ve now built a system that can convert that waste heat into usable energy. We’ve begun receiving small-scale orders this year and have initiated sales. This aligns with our aim of supporting energy recycling and creating systems that make more efficient use of untapped thermal resources.The third pillar is also rooted in environmental impact, but this time through strategic partnerships and sourcing. Unlike product development, which requires extensive time, money, and engineering talent, we realized we could leverage our trading division to introduce advanced environmental technologies from Europe, where regulatory standards and innovation in this area are far ahead of Japan.
Over the past three years, we’ve sent around 30 sales and technical members to European environmental exhibitions in collaborative teams from both technical and commercial backgrounds. Their mission was to identify environmentally impactful products suitable for the Japanese market. As a result, we’ve begun importing and distributing several promising solutions, such as Ultra-Low Temperature Belt Dryer from Switzerland’s Watropur AG and hydrogen sensors for safety and efficiency monitoring. These are products that can meaningfully contribute to sustainable practices in Japan.
We’d like your insights on macroeconomic and societal issues such as Japan’s population decline, sustainability challenges, and how Japanese manufacturers can maintain competitiveness in an evolving global landscape. In particular, the concept of “kaizen” is well-known internationally. In your view, what makes Japanese manufacturing strong in today’s environment?
That’s a great question. Let me begin with a broader historical context. The reputation of Japanese manufacturing, which people around the world associate with “Made in Japan,” was largely established in the 1970s and 80s. The common perception was, “Japanese products don’t break.” That reputation still holds in many industries. What I believe underpins this perception is not just the concept of kaizen or onsite management, but something deeper an extraordinary level of craftsmanship and precision, rooted in the skills of highly trained engineers and technicians. Let me give you a concrete example. Since becoming President, I’ve spent considerable time observing our production floor. Our centrifuge production involves extremely intricate, specialized processes that simply cannot be replicated easily outside Japan. This kind of craftsmanship is what ensures our machines remain durable even under intense conditions. That’s the real meaning of “Made in Japan” not just reliability, but also technical excellence.
You’ve spoken about the legacy of “Made in Japan” quality and its roots in skilled labor. Given Japan’s aging population and declining workforce, how are you preparing to address the shortage of skilled technicians?
This is a very real and urgent issue. As we expand into markets like India where we anticipate higher machine volumes and increasing demand for large-scale equipment we’re also confronted with the shrinking pool of skilled manufacturing talent here in Japan. Many of the highly experienced machinists and processors we rely on, both in-house and among our partners, are aging. As a result, some are retiring, and others are closing their businesses altogether. This creates a structural vulnerability in our supply chain.
To address this, the new factory we are building in Ayase City, Kanagawa Prefecture will be equipped with a “3D Automated Processing Machine” enabling high-precision machining without relying on manual labor human and 24 hours a day continuous operation. This transition is critical. Our manufacturing involves extremely fine, sensitive, and specialized processing that cannot be replicated simply by installing a machine. That’s why we are collaborating closely with machine tool manufacturers to develop tailor-made equipment capable of replicating our craftsmanship standards through automation. It’s a multi-year effort likely taking two to three years to complete but once in place, it will allow us to preserve and scale our production capabilities even as skilled workers become scarce.
Have you considered building manufacturing capacity overseas?
It’s a fair question and we did consider it. But for the reasons I just outlined, we believe Japan remains the best location for manufacturing our most critical components. The expertise, infrastructure, and quality control we require are still most accessible here. That’s why we remain committed to domestic production, even as we expand globally.
You mentioned expanding into India. Do you plan to establish local service capabilities there?
Yes, that’s already underway. We’ve just set up our liaison office in India this is our first year operating there and we’re already handling some maintenance work for Indian customers. At the moment, these units are shipped back to Japan for repairs. But in the near future, we plan to perform routine maintenance and handle replacement parts locally, working in partnership with Indian manufacturers.
It’s important to understand that centrifugal separators operate at extremely high rotational speeds several thousand revolutions per minute. Components like gearboxes require extremely precise machining. For now, that level of refurbishment must still be handled in Japan. But we are collaborating with overseas gearbox manufacturers who meet our stringent specifications to gradually expand our global servicing capability.
So you’re co-developing components that meet Japanese standards?
Precisely. We’re working in tandem with these partners to create gearboxes that can handle the demanding requirements of the chemical processing industry. It’s a process of back-and-forth development like a rally and it’s resulting in technology that aligns with our needs and Japanese market expectations.
Let’s shift to trading. There’s growing international attention on Japan’s large trading houses, known as sogo shosha (general trading companies), particularly since Warren Buffett invested in five leading ones through Berkshire Hathaway and expressed a long-term commitment to hold those stocks. As a representative of a smaller specialized Japanese trade house, how do you differ from these big players, and what advantages do you hold over them?
That’s a topic I’m very passionate about, given my background in the trading division. The term “trading company” is uniquely Japanese, and within that category, there are two types: general trading companies like Mitsubishi Corporation or Sumitomo Corporation, and specialized trading companies like ours. General trading companies function as large-scale investors. They trade in massive volumes importing iron ore by the shipload, for example and they operate across a vast array of sectors. We, on the other hand, are focused. We specialize in niche markets and handle technically advanced products that require a deeper understanding of the field. That’s the key distinction.
You previously mentioned that you have many product lines generating over 100 million yen in profit. How did you achieve that scale?
There are four main reasons behind our success in that area. First, we specialize in niche products and niche markets. While many Japanese trading firms focus on China, East Asia, and Southeast Asia, we’ve built strong business networks in places like the Middle East, Africa, and Eastern Europe including the Czech Republic. These are markets often overlooked by others. Second, we hire many employees with science and engineering backgrounds. These individuals become sales engineers who can deeply understand and engage with the technology they’re selling. For instance, in the semiconductor sector, an extremely broad and competitive space, we don’t try to compete across the entire value chain. Instead, we specialize in components used in manufacturing equipment for power semiconductors, particularly those made from silicon carbide (SiC), not just traditional silicon.
This is a highly specialized niche with relatively few competitors. But succeeding in this space requires the sales engineer to have knowledge on par with the customer’s engineers. That technical expertise, combined with close collaboration with clients, allows us to co-develop high-value solutions. The third reason is product diversity. Across our six trading departments, we handle over 7,000 to 8,000 distinct product lines possibly more than 10,000 in total. Many of these products are technically sophisticated and require expert knowledge to sell. This makes it difficult for other companies to replicate our model.
While the final fourth reason is our strong partnerships with top-tier, top-share suppliers. These suppliers not only provide superior quality products but also offer an information advantage. When you work with a market leader, information flows to you naturally. Conversely, when dealing with second-tier suppliers, you have to go out of your way to chase information. We don’t work exclusively with market leaders, but we maintain several such relationships built carefully over many years. And these relationships bring us both strategic and competitive advantage.
How does this translate to your business structure?
Among our eight trading departments, some have as many as 15 to 20 product lines each generating over 100 million yen in profit. Others have fewer perhaps only one or two. I often use a tripod metaphor: a structure with three legs is stable, while one with two legs is unstable and prone to tipping. Departments with fewer high-profit products tend to experience more volatility. But departments with a broad base of profitable products remain stable even if one or two underperform. So our strategy is to build more departments with three or more strong legs by increasing market share and steadily growing each product into a 100-million-yen business. It’s not instant, but over time, this creates a durable and scalable structure.
And you find that a concentrated portfolio of high-profit products is more stable than having many low-margin ones?
Absolutely. I prefer having a handful of high-impact products rather than spreading ourselves thin across too many marginal ones. That concentration leads to better focus, deeper relationships, and more predictable performance.
Are you expanding your trading business internationally?
Yes, let me give you a quick overview. In East Asia, particularly China, we previously operated a resin compound manufacturing facility in Shenzhen, targeting demand from Multifunction Printer and Automotive customers. But despite nearly 30 years in operation, demand did not materialize as expected, particularly from Japanese clients, so we decided to shut it down two years ago.
We are now shifting our focus to the semiconductor sector in both the EU and China, and we are developing our trading business through our subsidiaries in the Czech Republic, Shanghai, Shenzhen, and Hong Kong. In Southeast Asia, we operate in Vietnam, Malaysia, and Thailand. We have three main lines of business there:
We’re also exploring plastic recycling market in collaboration with Japanese plastic manufacturers particularly to meet strict EU regulations requiring fully closed-loop material sourcing within Europe. This effort may also tie into our machinery division, depending on how the technology evolves.
What’s your next target region after India?
Europe. We believe the EU is on the verge of entering a new phase in chemical recycling. If that happens, our centrifuge systems, especially our unique vertical models, could play an essential role. We’re conducting market research there now. Our vertical centrifuges are extremely rare and highly specialized; almost no one else offers them. If the EU’s market evolves as we expect, these machines could become essential.
What is your long-term vision, say, for the company’s 90th anniversary in 2031?
That’s a big milestone. I became President three years ago, and looking ahead, I want to see the company reach 100 billion yen in revenue. Right now, we’re generating just over 50 billion yen. Of that, around 15 billion yen comes from machinery, and the rest from trading. If we can double the machinery business, we’ll reach about 70 billion yen. But to reach 100 billion, we’ll need more than incremental growth—we’ll need to fully globalize our operations. We’re working on concrete strategies to achieve that, though I can’t disclose the details just yet. Perhaps that’s a story for our next interview, maybe even over a drink in a London bar.
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