Founded back in 1923, the Osaka-based company provides quality products and end-to-end manufacturing capabilities that make it a go-to supplier of electric wires and cables.
Where do you think the strength or competitiveness of Japan’s industry comes from today?
I think that it is true that the Japanese industry has been on the decline, but when I say decline I’m referring more to the production of finished goods and items. Japan is lagging behind regional competitors in terms of the technology represented by Google, Amazon, Meta, and Apple (GAMA). I believe Japan’s strengths these days lie in components, and products like the iPhone feature a large number of Japanese components. Additionally, I feel that Japan has an advantage when it comes to the manufacturing of equipment used in the production of semiconductors. Japan still has strong base technologies.
Your company has been around for over 100 years now and you are still thriving in the electric wire and cable industry here in Japan. What do you believe to be your company’s core strengths or competencies that set you apart from your regional manufacturing competitors? What makes your wires and harnesses different or better than those manufactured elsewhere?
When I compare our company to other regional competitors both domestically and overseas, I think our strength is that we can manufacture and process electrical wires. Other competitors are either specialized in manufacturing electric wires or processing harnesses after procuring electric wires. We at Yukita Electric Wire Co. have the capability to do end-to-end manufacturing processes, from manufacturing electric wires all the way to process them into harnesses. One of our group companies was a company called Tokiwa Denki, which we merged with in 2016. It is a fabless company that is capable of producing electronic components on an OEM basis. This company has increased our overall group capabilities and the variety of production processes that we can utilize as a group is clearly another strength we can leverage.
Domestic competitors specializing in wire harnesses are our major rivals in the wire harness industry. Many of them are known to follow their customers, such as major electronics manufactures, and produce their products overseas, instead of producing them in Japan. By locating their overseas production bases close to their core customers, so that they are able to supply products to their customers quickly. We haven’t exactly followed this mindset and we haven’t transferred all production capabilities overseas. We still have production capabilities in Japan, so I personally think this is a big strength our company still holds. We have three main factories in China as well as another factory in Thailand and one in Cambodia. In total, we have 5 factories overseas. In Japan, we have three factories in Shiga prefecture in Japan, and there they produce both electric wires and harnesses.
Production of wire harnesses inevitably requires a certain level of human power, which is associated with labor costs. This is why a lot of manufacturers initially chose China, and we were one of them. We went to China to seek lower labor costs, but now that Chinese labor costs have risen, we chose Thailand, and now we are expanding into Cambodia. From the business continuity plan (BCP) perspective there is an element of risk associated with overseas production. This is why we have kept some of our production bases here in Japan.
We don’t have a lot of share in the automotive sector in terms of wire harnesses, but we have strong shares with Japanese electronic manufacturers and water heater manufacturers. SWCC Corporation owns 13% of our corporate shares so we have a very close relationship with them.
An interesting aspect of our interview with SWCC was how they are adjusting their products to cater to new expectations for environmentally friendly cable products. There is a growing need for more sustainable material use in your sector and we know that you manufacture a number of eco-cables. Can you tell us in a little more detail how you are transforming your product lineup to cater to new needs for environmentally protective and sensitive products?
Being environmentally conscious is a global trend right now, A material called PVC is commonly used for coating electric wires, but depending on the method of disposal or
incineration, there is a risk of generating hazardous substances. For this reason, we are
working with material manufacturers to develop more environmentally friendly materials and produce electrical wires we call eco-friendly wires. We, as a whole, are increasingly making efforts to avoid producing hazardous waste when disposing of components.
Our products use an anti-tracking coating on the root of the power plug blade to prevent accidents such as fires caused by dust. This is something we have developed together with a major Japanese manufacturer. Now, through open innovation, we are trying to prevent fires and other accidents caused by dust by making it available to anyone. It was developed many years ago and many manufacturers are now using it.
We saw that in the past decade you’ve expanded into solar, which is a huge market, especially in places like China. Could you tell us more about your motivation to enter the energy field, and what are some of your initiatives in that sector?
We started in this area of production around 20 years ago. At that time, photovoltaic
power generation was still in its infancy. This was because we focused on the future potential and were expected to contribute to the global environment. That was the motivation for entering this field.
Currently, we are involved in photovoltaic power generation projects throughout Japan. We produce extension cables that connect panels, and supply them in this field.
Only a few companies, including our company, are able to supply these cables in Japan.
You mentioned earlier a collaboration for your PVC-free coatings. Could you elaborate more on the specific role that collaboration plays in your business model, specifically with overseas firms?
Although we do not currently have any partnerships with foreign companies, one of our in-house companies, Global Business Company (formerly Tokiwa Denki, whom we merged with in 2016) has relationships with several OEM manufacturers in China. Many of these are small-scale manufacturers of wires and cables. We have helped grow their companies by teaching them the Japanese quality control system. One of these companies has grown significantly through a series of M&A and now the company has the technical ability comparable to Foxconn.
Can you tell us more about how your merger with Tokiwa Denki helped you better understand local markets?
Tokiwa Denki is now called Global Business Company, one of our in-house companies, is a fabless company that sells OEM products and is strong in the Chinese and Southeast Asian markets. Although we have yet to expand into the US and Europe, we would like to explore these markets going forward. In China, we have purchasing and sales bases in Hong Kong, Dongguan, and Shanghai. These sales offices have local people in management positions. These managers know their local markets very well and understand the needs of locals.
Yukita Electric has three overseas sales offices and five overseas factories, all concentrated in Asia. You’ve just mentioned your ambition to bring your products to other markets such as Europe or the United States. What is your plan to do so? What is your international development strategy to reach new markets?
We have just started a partnership with a company in Switzerland in regards to cables. The project has just begun, we would like to build on this partnership and expand into the European market. As for the US market, if we find a company that is strong in this field, we are willing to work together with that company to enter the market.
Do you have any new or yet unreleased products you’d like to use our platform to showcase?
We have a new product that I would like to showcase which is a stretchable cable.
The name of the cable is NOVEEL which means stretching in Japanese while the pronunciation is similar to the English word novel, hence the name of the product.
Since electrical wires do not normally stretch, this product can be successfully applied to wearable devices, particularly those using RFID (Radio Frequency Identification). Simply by placing a sensor attached to the wrist close to the tag, data on picking can be sent. Normally some companies use mobile terminals to obtain such data, but it is more convenient if they can be worn. Also applying this stretchable cable technology, data about the body is acquired from sensors wired to undershirt with stretchable cables. Conventional non-stretchable wire restricts movement, so we use stretchable cables to follow every movement and enable accurate data collection.
Is this a product that has already been launched to market or is it still in development?
The product itself is complete and we have just started marketing this product to many different fields. As we proceed with further development you will have a chance to see some even more interesting applications. We can incorporate it into a t-shirt for example, and that would allow us to connect with heart monitors and have the monitoring of a wearer's heartbeat.
Imagine that we come back in 5 years' time and have this interview all over again. What goals or dreams do you hope to achieve by the time we come back for that new interview?
I have three objectives. The first one is to expand our scale. Currently, our revenue is about JPY 20 billion which is not small, but at the same time not large either. I would like to expand this revenue a bit more because higher revenue can lead us to more stable management and higher salaries for our valued employees. The second objective is applications. As I mentioned earlier, we are strong with electronics and hot water heater makers, but I would like to expand our application fields. Automotive and factory automation comes to mind as potential future targets. The third objective is global expansion, and as you know, right now we have a solid foothold in the Asian market, but we would like to expand into the European and US markets as well. To that end, in the fields we are specialized in we should develop new products so we can continue to compete.
We would like to pursue our uniqueness so that we can develop further technologies that will allow us to stand out from our competition. The end goal here isn’t necessarily scaling, but rather pursuing uniqueness with a focus on top-notch quality.
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