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Thursday, Aug 11, 2022
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Springing into international markets

Interview - May 1, 2022

For over 60 years, Hayamizu has been making high-quality springs for a number of vital domestic and industrial uses. Now the company is focused on expanding its international presence, as explained by President Kazumasa Iida in his interview with the Worldfolio.

KAZUMASA IIDA, PRESIDENT OF HAYAMIZU HATSUJO CO., LTD.
KAZUMASA IIDA | PRESIDENT OF HAYAMIZU HATSUJO CO., LTD.

Since the end of WWII, Japan has garnered an excellent reputation for its attention to detail in the manufacturing process. However, in recent decades, Japan has seen the rise of regional manufacturers who have been providing cheaper products, but with a higher rate of defects. As a manufacturer of springs used in a variety of fields such as automotive and precision machinery, what does monozukuri mean to you?

In the past, the Japanese people have valued making people happy through their occupations and attention to detail in order to please customers has resulted in higher quality products. They made money as a result of making people happy, however I feel that the order of things is now reversed. Globalization has made Japan price-competitive, and people have come to seek only the cheapest price. As a result of the money-making first mindset, I believe that manufacturing in Japan is no longer going well. We want to create products that make people happy and make their lives more convenient.

 

Some people would say this national character is under threat because of Japan's declining demography, as it is one of the world's oldest societies. This is expected to have two main issues for Japanese enterprises in the country: the first being a smaller pool of talented young graduates and the second being a shrinking domestic market. What challenges does this demographic shift pose for your company and how do you plan on overcoming them?

China has similar social problems, and the biggest issue with the declining birth-rate and an aging population is that accumulated information and technology can no longer be passed on. We, too, have overseas factories, but due to cultural differences, we feel that it is difficult to convey the spirit of Japanese "monozukuri" to local workers. A declining population inevitably means a shrinking market, so we must grow together, including overseas. We would like to preserve the essence of "monozukuri" in Japan and develop it while fusing it with overseas cultures.

 

DX and industry 4.0 refer to the new Industrial Revolution that focuses heavily on interconnectivity and automation. How are you adapting to this change in your manufacturing process?

No matter what industry, digital processes for processing and automation in factories are happening and we are adapting to the changes in all our Japanese and international manufacturing sites. In responding, we need to determine if we need to fully automate the manufacturing process to make it work or not.

Humans are smart enough to catch and stop anything that happens or any mistakes that are made. If you have a production site with workers who do not make corrections when a problem occurs and just let it go, then you need to automate everything. In such a case, automation must be done perfectly, although there is a problem of cost-effectiveness. However, at the same time, I wonder if workers enjoy such a job that can be done by anyone.

 

Can you tell us, which is your best-selling product and which one is gradually seeing more demand overseas?

Spiral springs for automobile seat belt retractors account for 70% of sales. In China, demand is growing for springs used in trunks and sliding doors, and motors that help them open and close.

 

With so many different business and product lines, what synergies are you able to generate between them?

We are proud to say that we are the first to receive inquiries about spiral springs and constant force springs in Japan.

Since we have handled requests from customers of all sizes, we have accumulated the knowledge to solve problems that arise in all sizes. Although the spring has an analog image, it does not require fossil fuels for its power source, and we believe that it has potential for use in a variety of industries. We are ready to meet your needs for a variety of sizes.



How do you ensure the same quality of production, whether in Japan or overseas?

The spiral springs we make for automobile seat belt retractors, which are an important safety part, require extremely high quality, and we are constantly meeting our quality targets. Last year, we achieved a very strict defect target of 0.1ppm, and this year we are aiming to achieve 0.05ppm.

There are several ways to achieve this goal, and one of them is to create an environment in which workers can work with peace of mind. For example, we have installed many sensors on the production line to point out even the smallest defects in materials to workers.

 

The Suga administration mandated that all cars in Japan must be EV by 2035, with cars becoming more than just machines, but effectively computers on wheels. What opportunities do you see for Hayamizu in this?

Although the Japanese government is very optimistic about this, I believe it will be almost impossible to convert the entire Japanese fleet to BEVs by 2035. It is considered impossible because Japan does not have an adequate power supply to charge that many BEV vehicles and no one will make that many batteries.

As for the impact of BEVs and automated driving, we will not be as directly affected as engine part makers, but car sharing will increase and car sales will decrease, which will affect us.

 

One of the key strengths of your company is the fact that you are able to build new spring manufacturing machines from scratch. Could you please talk to us about this unique strength of your company and how you are able to do so?

We are the world's second largest manufacturer of spiral springs for automobile seat belt retractors. The No.1 company in the industry is five times ahead of us. The reason for the large gap between us and the No. 1 in the industry is that we have been very slow in our overseas expansion efforts and in introducing our products overseas.

Although there is a large difference in scale, we believe that we are ahead in terms of technology and quality because we manufacture our own production facilities and inspection equipment and have accumulated know-how.

At present, we do not think there is any need to rush to expand our scale. We are in an uncertain period, with many things happening on a global scale. The Russian situation in Ukraine, the Coronavirus affair, and so on, are just a few examples of the turmoil that are going on. As for overseas expansion, we are considering it, but we are not that ambitious, at least not at this time.

 

What role does R&D play in your company and what industries do you want to cater to in the future?

We provide blueprints and design specifications to our customers, and we also consider the manufacturing process of springs during the development stage. Another good thing about our company is the possibility to manufacture any type of spiral spring and constant force spring because we build our manufacturing facilities in-house.

 

What role does collaboration and co-creation play in your company and are you looking for any new overseas partners to help penetrate international markets?

We are rotating in a very confined and niche market with not that much volume and the necessity to group up with some other foreign companies is not as crucial. There are not many ways of penetrating this market, especially when we talk about foreign countries since the market players have already been decided.

 

In 1999, you established your first overseas subsidiary in Guangdong China, and since then, you have expanded to Indonesia and more recently in 2014, Mexico. How do you plan on expanding your international business? What markets do you consider key for Hayamizu?

Since we have the number one product in Japan in the segment of spiral springs for automobile seat belt retractors, naturally, automobile manufacturing bases are the areas where we should go. Our customers have called us to Europe, but we are still considering it because we do not yet have the capital or human resources to expand. We are looking at supporting our local customers with components for automotive manufacturing. That is what we are doing in Indonesia and Mexico, for example. Unfortunately, despite these decisions, not everything is going well and the results are mixed.

 

This year, your company is celebrating its 69th anniversary. Let's imagine that we come back six years from now: what will be your mid-term strategy and as the president of the company, what goals have you set?

We are living in uncertain times, and it is hard to make any projections at this point in time and make any forecast. We do not have mid-term strategic plans due to this instability, and unfortunately, the company is not formulating that many plans for the years to come. Three years ago, we would be talking about projects and plans, and we thought of reaching 20% of the global market share. Nowadays, nobody is sure about anything.

 

How would you define the brand of Hayamizu?

Somewhere in your life, we support your life even when you can't see it. Our main product, the spiral spring and the constant force spring, are not usually seen directly by our customers. However, based on our advanced technical expertise and experience as a global company, we support the lives and safety of people around the world from inside automobiles, industrial equipment, medical devices, and more.

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