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Stepping up – Yokomori’s stairway to success

Interview - November 22, 2021

Since Yokomori MFG. Co., Ltd. took their first steps as kaidan-ya (stair makers) over half a century ago, they have continually assessed the market with the aim of providing safer and higher-quality staircases. As a partner subcontractor to large construction firms, the company’s products include internal and external staircases, ornamental stairways, and SYSTAIR, which are customizable residential units. In this interview, President & CEO, Takeshi Ariake, explains how Yokomori has been helping Japan’s construction industry reach the next level for the past 70 years.

TAKESHI ARIAKE, EXECUTIVE DIRECTOR OF YOKOMORI SEISAKUSHO CO., LTD.
TAKESHI ARIAKE | EXECUTIVE DIRECTOR OF YOKOMORI SEISAKUSHO CO., LTD.

Japan’s construction sector is often defined as being matured; on the one hand, there’s aging infrastructure, construction sites in need of maintenance and repair projects; and on the other hand, due to its advanced connectivity and decreasing demographic line, there’s fewer construction projects taking place in Japan. Could you give us, in your opinion, an analysis of Japan’s construction sector? How do you see it evolving in the years to come?

As you have said, it is appropriate to use the word ‘matured’ as an adjective to describe the situation of the Japanese construction industry, and I don’t expect there will be a big shift or major changes within it. However, from our point of view as a subcontractor, we’re not the ones who plan the construction of a building, as we work together with construction companies, so we can predict that within five or six years that there will be a great demand. In Tokyo, there’s a big re-development program going on; we’re currently striving to connect the Shinagawa area with Shingaku as our major focus.

Also, there will be another construction by Mitsubishi Estate; Torch tower, which will be the tallest commercial building in Japan; it will be 390 meters high in Tokiwabashi. Therefore, there’s still a demand for new construction and re-development.

Outside of the Greater Tokyo Area, there is huge demand in the semiconductor global industry; there will be new factories made within a few years’ time. In the Kyushu area, with the introduction of the Shinkansen, there is a need for new infrastructure; that’s another one of our targets. There’s also a plan to make a big stadium in the middle of the Chugoku region, and in Okinawa, there’s a demand for new resorts.

For these reasons, we predict a big boom in Japan’s construction sector in 2025. 

What I foresee after 2025 is that there will be a decrease in demand for construction. With the boost of ICT technologies, the requirement for offices will surely decline. People will move out of Tokyo and go back to their hometowns since they can work remotely with the new technologies introduced, and we predict there will be a new demand in the residential field in their hometowns; that is another one of our targets. I’ve also heard from my fellow real estate developers that they’re concentrating more on logistics warehouses, increasing this need we would also like to cater to.

General constructors, like Hesei, used to be focused on building new construction. However, they’re now focusing on renovation, renewal, and redevelopment, and we would like to provide for their needs as well.

Basically, we would like to strengthen our business so that we can respond to renovations and renewals of buildings, residential facilities, distribution centers, etc., while maintaining the current pillar of our business, which is decorative spiral staircases for interior and exterior use.

Our main offices are located in Tokyo and Kansai, but we would like to strengthen our business bases to meet the needs all over Japan as the demand in the residential sector increases. Currently, we have seven bases across the country, mainly in the commercial field, but in residential, we have two stations; one in Tokyo and one in the south, and we would like to increase the number of bases in this specific sector.


We understand you do the design, manufacturing, supply and construction of these various types of staircases as a subcontractor to larger construction firms. This includes the internal and external staircases, ornamental, Systairs, which are customizable residential stairs, and so on. Could you tell us what kind of synergies you’re able to create within these different types of stairs business lines as you cater to your clients? What benefits do they bring to them as you do so?

We owe the flexibility and the capacity we have to the extensive knowledge and experience we’ve acquired through working with multiple clients, especially the experience we have obtained through producing skyscraper staircases, has been effectively applied to residential use. In the past, a majority of the share had been taken by our competitor in the residential field, however, it has been shifting lately towards our company. This is because our competitor only has the standard type of staircases, whereas we have an extensive wide range, including ornamental, and other types that we have developed through our experience working with skyscrapers. Therefore, the homeowners or constructors truly appreciate our flexibility and capability in terms of our extensive line-up. 

 

You mentioned how your company is looking to increase its sales in the residential area, for condominiums and apartments. But Japan is an aging society, within the next 15 years, one in every three Japanese people is expected to be over 65 years of age. That creates a large problem in terms of infrastructure, for example, older people struggle to use the stairs. As you strive to pivot more into the residential sector, how is that influencing your product development strategy or philosophy? 

When it comes to answering the needs of the architecture, in order for us to achieve the utmost satisfaction, we cater to the design or requirement that has been presented by the architect or the company. Therefore, if there’s an increasing demand for more senior-friendly designs then we’ll cater to them. This would include making a handrail that is easy to hold on to, having a larger space in the landing, and placing chairs so they can take a break and catch their breath while they're going up the stairs. Of course, we’re obeying the Japanese codes for construction, where there is a specific requirement for the height of the handrail and the dimensions of the treads in detail. Thus, if there is a request from the customer within these codes to make the staircase senior-friendly, we would absolutely do that. If they require a more cost-effective product, we can simplify the structure and present them in a cheaper version.



When it comes to catering to the needs of an aging population, technology is a big answer in most sectors for dealing with this issue. We’re currently in the fourth industrial revolution, or society 4.0; the rise and mainstream integration of new technologies such as IoT, AI and big data. We know you’ve developed an original computer-integrated manufacturing (CIM) system to streamline the drawing, ordering, manufacturing and delivering of your staircases. Could you tell us about this program in more detail and what other projects you’re implementing in order to adapt to this trend of new technologies? How do you see the fourth industrial revolution technologies impacting the construction sector moving forward?

Regarding the introduction of IoT and Industry 4.0, in our company, we have developed an inhouse Intergraph Computer-Aided Dispatch (I/CAD) system that specializes in the designing of the stairs and we have invested a considerable amount in this software for use in the construction industry. There is also a trend for using Building Information Modelling (BIM). General contractors are now talking to us about incorporating our system and combining it with their own work. We hope that our system will contribute and shape the future of the Japanese general constructors in terms of software management. Our system has also been highly evaluated by U.S. engineers, even though the program is in Japanese, they said that it’s the best suited for designing staircases, thus, we’ve had investments, not only from Shimizu, but other general constructors too.

When it comes to introducing Digital Transformation (DX) in our business, in terms of factories, we’re now discussing with the DX companies regarding how we can approach and introduce it. Specifically speaking, we are interested in using barcode readers so we can see the start and completion times of our work, obtaining specific data on it. We could also monitor people’s movement and behaviour, so we can find the efficient way of improving the workers’ performance and managing the machinery, the operating hours and the down time, allowing us to find the exact cost of how much it takes to make a particular staircase. As for the designing or planning of stairs, we would like to introduce DX in terms of data management. The design depends on the architect, thus, if we could keep a record of specific architects’ requests and requirements, we could share that information within our company. That would lead to higher customer satisfaction and be more efficient in terms of preceding the design and implementation of our work.

 

In November 2020, Prime Minister Yoshihide Suga declared that by 2050, Japan will become a carbon-neutral society, which is particularly affecting heavy industries, such as the steel industry. At Yokomori, you have close partnerships with many steel manufacturers. Could you tell us what effort you’re making to promote environmental care and reduce your carbon footprint?

We deal with steel materials, so what we focus on is utilising steel that was made by the electric-arc furnace method. This doesn’t require the use of raw materials, it recycles already existing steel, making our products more environmentally-friendly, and it is also much cheaper.

 

A common theme among our interviewees at the Worldfolio is the importance of co-creation, working with other companies; especially international co-creation, and how working with local partners can be the key to understanding and penetrating new markets. Could you tell us more about your role with co-creation at Yokomori Seisakusho and if you’re currently looking for more international partners?

Speaking about the Japanese market, we currently have three big competitors within Tokyo. Tracing back their history, one of them was one of our employees first, then established a company, and the other two are our subcontractors. There are also competitors in Hokkaido, which are also our subcontractors. They have learned our technologies and taken them into their production, and they’re trying to compete with us by having less profit per product. Therefore, we don’t want to reveal or share our technologies with other companies. However, for balustrade, handrail, or stainless products, we need to subcontract other companies. Furthermore, we have nine factories throughout Japan, but if we are out of capacity, we need to ask others to help us. To secure stable production, we keep collaborating or partnering with other companies. In terms of designing, we have a partnering company in Vietnam, and a subsidiary in Shanghai since there’s a great amount of demand in this field.

When it comes to the overseas market, we have a factory and offices in the U.S., Singapore, Malaysia and Shanghai. If you ask which market we’re most focused on, we’ve moved our focus to the U.S. This is because, although it is already a large market, we are handicapped by the fact that there are competitors making similar products and we do not have the market share. In countries with low labour costs, there is a tendency to use a lot of inexpensive concrete, and so we are currently trying to establish a footprint in Malaysia and Singapore. In that sense, in Malaysia and Singapore, we’re currently trying to establish our footprint. In the future, when there is a rise in the labour cost, and a demand for factory-made stairs, we could be ready to provide them and be the frontrunner in the market, hopefully taking a big share of it.

Considering that overseas, the construction materials for stairs are not considered as commodities, so it is important to procure and use the material locally, in order to station ourselves closer to where the demand is. By adding the experience we have acquired in Japan, for example, for disaster prevention, we could provide value-added products to them.

For approaching the existing markets, we’re currently working with an M&A which is ideal so we can retain our technologies within our company. Regarding new emerging markets, we are interested in working together and cooperating with existing companies, although there’s a risk with our technologies being shared.

There are three things we consider for new partners: first, it’s important to know what their management and CEO’s philosophy is; rather than being more liberal, we prefer to be more conservative and stable. Secondly, it is important for them to understand the strengths of our company’s product. Thirdly, we’re interested in the type of clients they have and their relationship with them. For example, if they have major connections with big companies, it would be a great asset for us to work together with them. Those would be the things we’d investigate when we’re looking for new partners.

 

We’ve seen you’ve done many big projects; the Olympic Stadium in Beijing and the Mori Tower, among others. Is there one particular project you are most proud of?

All of them. I can't name just one. Right now, we are in the process of making a company history and reflecting on our 70-year history, there have been three major milestones. The first was that our founder had a connection with a general contractor and was able to enter the market, entering a joint venture with seven companies, thanks in part to our friendship with Heisei. The second was the Cauldron for the 1964 Olympics, which many companies turned down because of the short construction period. The third milestone was the demolition project of the "Mitsubishi No. 9 Building", which many companies also turned down due to the short construction period. Our founder combined the idea of a staircase to be built in the factory - the technology of a staircase cauldron to be assembled in the factory, and then bring it to the site for implementation. By developing this technology before construction, we were able to enter the Japanese construction boom in skyscrapers and gain a large market share.

I have two targets. First, by utilizing our knowledge, to develop a new product line-up and penetrate new markets. The second, is to reinforce our overseas sales and surpass what we currently have in the Japanese market, which is currently 16 billion and 10% turnover rate.

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