Innovative new technologies, intensive R&D, and meticulous attention to detail and customer service have put Toto in a league of its own in the sanitary ware industry. President & Representative Director Madoka Kitamura explains what makes Toto’s products unique, their environmental, economic and social value, and the company’s new venture into India.
What are some of the lessons and values instilled in the company then which has aided the company to reach such a successful global presence today?
Our founder Kazuchika Okura took great care to pass down the company’s spirit and core values to the next generation of leaders. I am now the 16th president of Toto. Toto’s past presidents and I have been respectful of Mr Okura’s memorandum founding values for our company.
Profit is not our main goal. It is a means and a method to reach our final goal – improving people’s quality of life while protecting the planet and its water.
Our founding vision was to promote the world’s greatest idea – public sanitation – to the Japanese people, and grow our plumbing products business based upon that public health innovation. From the beginning, we wanted to contribute to society. We wanted the Japanese people to be able to live cleaner, healthier, more fulfilled and richer lives.
Today, we don’t want to manufacture toilets that any overseas companies can make. For example, in the standard toilet’s flushing system, the water runs clockwise around a hollow rim punctuated with pinholes that release water from above. However, here at Toto we have engineered a complex “Tornado system” that utilizes the principles of bio-mimicry. We were the first company to study the centrifugal cyclonic action of nature’s tornadoes and innovate it as a technology for a toilet that continually cleans itself. When you flush a Tornado toilet, the water spins around a concave rim and bowl, cleaning them as it completely removes waste.
Homeowners’ lives are made easier by reducing the time needed to clean the toilet. The environment benefits too, as consumers do not have to use as many harsh cleaning chemicals. Furthermore our Tornado system uses very little water and is very quiet. Toto was the first and the only company that innovated such a creative flushing system. We wanted to develop innovative ideas, and the same goes today with our Washlet system.
Toto’s share price has risen from approx. 1,000 yen per share to now more than 3,500 yen per share representing an impressive growth of more than 250% over the last 4 years. What do you believe to be the key contributors to such impressive growth over the last few years?
I am not overly focused on the share price: the one thing that I can say is that Toto has been in operation for nearly 100 years and we plan to remain in business for another 100 or 200 years at least.
Our products have long-term value and a 20 or 30-year life cycle, so we are focused on long-term business and long-term customers. We want the customers buying our products today to recommend the Toto products to their friends, associates and the next generation in their family. We wouldn’t have been able to successfully grow our business for the last 99 years if we didn’t make high-quality products that meet the expectations of our customers. We want to nurture, cultivate and keep our current customers so that they continue to be advocates of our products in the future.
We are very detail-oriented: for us, looking at the water’s flow all the way from the toilet to the sewage treatment facility, assuring that it flows unimpeded by making sure there are no clogs, is crucial. We are meticulous and we put a huge amount of time and effort into our products, into their design and creation – that is why they are also more expensive than others.
Six years ago, at the ISH trade show in Frankfurt Germany, the world’s leading trade fair for water and energy products, we displayed the first toilets with the Tornado flushing system. Two years later, many companies had copied the technology. However, as it’s a ceramic system, it is not that easy to build or manufacture. So even if they are able to produce the ceramic, they are unable to design a flushing system works successfully with no clogs all the way through from the beginning to the end.
With other toilets on the market, it’s quite common to flush and find that not all of the waste is removed. With our products that never happens. We have perfected the technology and functionality of all of our products.
The same is true of the Washlet. We perfected to every detail of this product down to the individual molecules of water used. By using that kind of technology and attention to detail, we want customers to have a high sense of satisfaction with our products throughout their years of use. I tell my employees often that the customers who buy our products today have to be our customers 20 years from now. This high value on customer satisfaction runs throughout the company.
How successful has the e-Water+ technology, which uses anti-bacterial or electrolyzed water that was introduced in 2012?
Once a person uses eWater+ technology, I believe they will always want use it to clean the toilet. I believe that the success is already embedded in the product itself and the technology it contains. Our challenge now is how we can introduce this product to a wider segment of customers and lower the production cost and retail price. With eWater+ technology, we have spent a lot of money on a superior technology and the products that offer it. How do we get a large number of people to experience this technology? eWater+ is not widely adopted currently, but when customers use it, they immediately see its effect and the increased cleanliness speaks for itself.
The Washlet nozzle, too, is cleaned after each use with eWater+. This is technology that anybody would want and those who have purchased eWater+ Washlets say that they are glad that they purchased them. They love them. We would like a larger number of people to experience and then, of course, purchase the Washlets with eWater+ technology.
Can you tell us a little bit more about the smart or self-cleaning toilet released at the Consumer Electronics Show in Las Vegas, Nevada, in January?
At the Consumer Electronics Show this year, we displayed the both the floor mount and wall mount NEOREST intelligent toilet with ‘Actilight’, which we market in North America as the NEOREST 750H. Actilight is another of our breakthrough technologies. It is the most advanced bowl cleansing system available.
The Actilight cleansing process starts with a pre-mist that wets the bowl’s surface with tap water before use, which prevents waste’s adherence 80% better than a dry bowl. After each flush, eWater+ mists the bowl with electrolyzed water, which has a slightly acidic pH value that makes it antibacterial. It keeps the bowl fresh and clean longer.
The next element of the Actilight cleansing system is that NEOREST 750H’s bowl is glazed with titanium dioxide and zirconium, giving it a lovely iridescent, mother-of-pearl look. Extremely hydrophilic, this unique glaze makes it nearly impossible for organic substances to adhere to the bowl’s surface – enabling waste, bacteria, lime scale, and mold to wash away with ease.
To activate this surface, we integrated a UV light in the seat’s lid, which turns on when the lid is closed. Once the UV light hits the titanium dioxide and zirconium glaze on the NEOREST’s bowl, photocatalysis occurs, accelerating the decomposition of all organic substances in the bowl.
How important is it to educate the world about the functions and design behind Toto and how do you market the company?
71% of the earth’s surface is covered by water but within that, only 2.5% is potable. With a growing global population, using water efficiently and economically is crucial – especially in developing countries where the population is growing, which increases the demand for safe drinking water and public sanitation.
Two years ago we built a manufacturing plant in India, as we wanted to manufacture toilets with the Tornado flushing system, which is quiet and uses less water. This toilet was manufactured in a lower cost way, so it looks more basic – not as attractive as those manufactured in the United States for instance. However, it uses the Tornado system and is still more expensive than other toilets. We want to sell that in India.
As public sanitation systems start to develop in India, Toto wants to be present in this market and help Indian people build their own toilets for their own country. Toto India is not the same as Toto Japan. At present only about 20% to 30% of the country has access to a sewage treatment system, so that isn’t large enough for us to be really profitable yet, but we want to establish our company there for at least another 100 years and more.
We are under capacity and under utilization in India currently; however, we can always sell our remaining inventory to the European or Asian markets, or mix the inventory from India in other markets. In the future, however, we want the India plant to manufacture only for India and nowhere else. We want those Indian manufacturing plant workers to believe in Toto, realize that they are contributing to improving local living conditions, and take pride in what they are producing. We want to establish that kind of growth in each and every country where we have operations.
What importance do you place on the United States market and how do you look to strengthen your position and market share there?
We believe that we can continue to grow our market in the United States. Consumers’ appreciation innovation and superior technology of the Toto brand has been increasing slowly throughout the United States, as unfortunately, consumers can’t fully comprehend all of the many advantages and functionalities that our products offer just by looking at them.
Our most expensive NEOREST toilet costs $10,000. At first customers might laugh, but if they could come to Japan or a Toto showroom in their local area and see the advanced personal cleansing, flushing, bowl cleaning technologies that we deploy in this intelligent toilet, then they would understand the value behind our price tag.
We have to continually and steadily reinforce this message, so they understand the value of Toto products. Unfortunately, it is very difficult to relay this kind of value proposition simply in words. It is something that needs to be experienced. As I mentioned before, for those people who think that a toilet should just flush, it is hard to articulate the true value of our product; but for those who value a quiet, water conserving toilet or who appreciate a toilet that they don’t have to clean it as often, it is easier to sell. Who wouldn’t like a cleaner toilet that offers personal cleansing, so you are cleaner too?
Our investors only use the Toto brand; that is because all of them are in Japan and use the product in their homes. They understand the benefits, having experienced it. For those who have not experienced the many innovations and advanced technologies of our products, they may argue that toilets should ‘just flush’. How to demonstrate the real value of a toilet that is always clean, quiet, automated, with little maintenance – how to relay this message to the public – is now an ongoing battle at the heart of our commercial strategy.
In Japan, almost 100% of all new construction, new commercial buildings and new homes, have Washlet toilets in their bathrooms. In addition, a total of over 40 million Washlets toilets already has installed in place all over the world.
What efforts are being made to expose your products to a wider audience?
Once people experience our products, they become fans, and they will recommend our products to their family and friends. So the growth potential is there, but it is occurring slowly.
World famous figures who came to Japan, such people as Hollywood stars, have experienced NEOREST and Washlet products at the various hotels where they stayed, and took the idea back to the US and talked about it in the media. They loved the concept and installed Toto NEOREST and Washlet toilets in their homes after having visited Japan.
For Japanese people, the number one problem when they go overseas is that there are not as many Washlet toilets for them to access. We actually have created portable Washlets for those people to take with them when they travel.
With now almost 20 million visitors coming to Japan every year, we have a great opportunity to increase awareness of our products. Approximately 70% of Japanese hotels have electric bidet seats installed. There are even Washlets on Japanese airlines’ planes. Our team of engineers worked in Seattle for four years to test and retest the Washlet their designed for the airlines to make sure it could withstand the landing vibrations, pressure and turbulence.
Our vision is to market the Washlet and NEOREST products to visitors in Japan, so they will take the idea back to their country and expand our business. Once we have captured our fan base and shared the Toto concept with visitors to Japan, our next challenge is to effectively sell the product to them. We want to develop long-lasting relations with our customers for the next 10 or 20 years, so selling the product and providing the after-service care for customers in the United States and anywhere else is very important to us.