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Toyo Seiko making waves with next-generation surface treatments

Interview - April 20, 2022

Since its establishment in 1975, Toyo Seiko has developed into a global leader in “peening” surface treatment technologies for the automotive and aerospace fields. Company president Yoshihiro Watanabe understands that by providing high-quality surface enhancement technologies, Toyo Seiko can gain its customers’ trust while increasing market share. In this interview, Mr. Watanabe divulges more details about peening and Toyo Seiko’s plans to reach more international customers.

YOSHIHIRO WATANABE, PRESIDENT OF TOYO SEIKO CO., LTD.
YOSHIHIRO WATANABE | PRESIDENT OF TOYO SEIKO CO., LTD.

What would you describe as the advantages of Japanese monozukuri over regional Asian competitors?

A major characteristic of Japanese monozukuri companies is an ability to see things from the customer’s perspective, and that is self-evident in what we do since the true spirit of monozukuri comes from Japan. Toyo Seiko also contributes a lot to the major understanding of what customers would like to have in their hands and what kind of services and products they would like to have in the long run. That becomes the departure point for everything we produce. Thinking about customers is the number one rule that describes Japanese monozukuri and that is what gives rise to our corporate philosophy in many ways as well as the philosophies of many other Japanese companies.

That's why we get so much customer attention in the field of shot media, but we don’t limit ourselves only to media. We go beyond that and offer shot peening services as well because at the beginning of our company’s existence we started to think that other companies would like to have this kind of service.

 

Could you give us your take on why Japanese SMEs are so successful when it comes to niche, hard to produce technologies?

In the shot peening business, Japanese companies account for 90% of the market here in Japan and 40% of the world market in shot media. The way they achieved this success is linked to my previous answer about holding the needs of the customer and the degree of customer satisfaction in high regard. Currently our company has several types of shot peening media, including high durability shot which is the most praised in the market.

When we introduced the high durability shot, our exports actually dropped because when you create something that is more durable, customers will make fewer repeat orders over time because the media lasts so much longer. Even though this had an adverse effect on our profits, we were focused on the improved cash-flow that the long-term effects of higher customer satisfaction would bring.

Winning the customers’ trust and gaining an overwhelming market share were our main considerations even before we began any technological or managerial enhancements to our company. By contrast, competitors were not even trying to create this type of high durability shot because they believed it would eventually lead to the loss of margin and profitability for their companies.

The mission of Toyo Seiko is to popularize the shot peening process in wider industrial fields. That’s been our aim since we started. Shot peening processes are required to keep improving and to make more reliable surface enhancement technology. Currently our slogan is “Make anti-peening fans fans”. This is the philosophy of our company and we share it with all of our employees and affiliate companies, so the goal is to become the number one shot peening company by improving our competitiveness. This competitiveness requires improvement in the quality, price, lead time, technology and services for peening related items.

 

Japan is a huge contributor of functional materials for the aerospace industry. The Boeing 787 is 40% made by Japanese companies. Why is Japan so successful when it comes to functional materials? What is the advantage of Japanese manufacturing when it comes to these safe, reliable and high quality industries where functionality is key?

It's all about our attitude and mission to making the kind of daily improvements which characterize the Kaizen philosophy. As a Japanese company, we have that approach in our bloodstream and we’ll be making a contribution to society no matter how many obstacles there may be.

Obviously, price competitiveness is an issue as well as certain restrictions which may apply in certain fields like the aircraft industry but most companies don’t consider these things as major obstacles. Instead, they think about long term perspectives and about what else the customers might want and what else might be needed in the industry. That is what results in the best quality and service levels possible, and wins customers’ trust.

 

You are a comprehensive manufacturer of peening media and related equipment. Could you tell us more about your main products and who some of your main customers are?

The peening process is basically a surface treatment for enhancing parts not only in the automotive industry but also in the aviation industry, nuclear power industry and many other industries where peening is now required.

As for the biggest clients, they don’t come from the aviation industry. Currently, 90% of Toyo Seiko’s customers are automotive firms and their suppliers, especially spring manufacturing companies who make up around 70% of that number. The rest are companies dealing with carbonized gears, also for cars. Only 10% of our clients belong to the aviation industry.

Our portable pneumatic needle-peening device (PPP) is used mainly in ship manufacturing, so it's not about the peening media market, it is so called “shot less peening”, but we still have it in our product portfolio. It is a unique product. Only Toyo Seiko supplies this type of device, which is also used in the construction and maintenance of bridges.


PPP


Could you explain more technically why your media and services are the superior choice when it comes to peening?

Our basic idea is to be capable of introducing the most efficient and the most reliable type of peening from the customer’s point of view. Peening works on the simple principle that as long as the peening media is hard enough to be blasted onto a particular area of the surface, then the harder the peening media gets, the harder and more effective the result of the process will be.

The initial shot in our firm was not rounded, it was shaped in cylindrical pellets. But finally, we developed the round shape media with high hardness. It was actually difficult to really strengthen the hardened surface of this peening component, but we were thinking about how to make it more efficient. As an example, if you blast tofu or yogurt you wouldn't have the right result because it could not create the proper energy impact. The round shape and the high hardness of the peening media is what creates a better, more efficient result for the surface enhancement.

 

You've employed a number of digital tools to help your service be more efficient. Can you tell us more about these digital tools and how they help improve your services?

The shot peening related items such as the inspecting device were developed by Toyo Seiko. The necessity was always there because conventionally the inspection of the results of peening was conducted just visually, so it was a matter of trusting the inspector. That's why they came to the understanding that devices had to be used, so we created the coverage checker for this purpose which is the first in the world.


Coverage Checker


The Japanese population has the oldest average life expectancy in the world at 85 years. More than 1/3 of the population is over 65, which means a reduced labor force and less demand for products in general. How has this declining demographic affected your company and how are you reacting to this particular challenge?

We had already forecast the situation with the shrinkage of the population and the decrease in the labor force itself, so we expanded our business outside Japan. Currently we have local production facilities in America and Thailand, as close as possible to the end users, and we also recruit locally and contribute to those local communities. We were very early in adopting this strategy to go global and localize our production. We also employ older people in Japan already at our production sites to additionally offset the potential problems.

 

In terms of your mid-term strategy, to what extent have you had to look overseas for new opportunities, and what new fields or applications are you looking to expand into with your peening media?

Existing bridges are a new area for the company to go into because demand for peening in that area is increasing in the domestic market with the increase in maintenance requirements. For that reason, peening seems to be very promising in this area of construction – existing bridges particularly - with the device we have been introducing today. We’re looking forward to going into other areas of structural maintenance and want to increase our presence in that field.

 

Being a company that is catering to the construction industry, what opportunities do you foresee for your company in the Southeast Asian market?

We haven’t focused on that area because most of the structures built there are made of concrete rather than steel and peening is mainly used for steel and related materials.

However, in North America and the US itself, they are constructing bridges with steel and we believe that there’s a good opportunity under the Biden administration because they’ve been very open towards foreign companies and investment coming into the US market.

Based on our current situation, we don’t have any solid plans for joint ventures or M&A activities with any foreign companies. We are very optimistic about the US market with all the bridge construction related to steel going on there so we may eventually be interested in a joint venture or an M&A but we’re not yet clear about how that would look exactly.

Europe has been and still is a big market for us. We partnered up with a French company called Winoa in order to get a foothold in Europe, and it’s still a market with a lot of potential for us and we want to strengthen and consolidate our position in the EU. It’s hard to name a specific country in the European Union right now because peening is inevitably connected to the presence of raw materials which are specified in the required certification. As long as the raw materials are available, our company can operate there.

 

Let's say we come back to interview you again in a few years' time. What would you like to tell us about your goals and dreams for the company in that timeframe, and what would you like to have achieved by then?

I joined the company when I was 28 and I have a lot of dreams and ambitions for the company. The first ambition is to create a system of recycling for the peening media itself. I joined the company 34 years ago and at that time obviously there was no technology for recycling and although there were ideas about recycling there was no actual implementation or any kind of possibility to introduce media recycling. This was because as you can imagine, once blasted the peening media itself is not going to be utilized anymore so it's quite a burden for the environment. Something as crucial as recycling has to be introduced over the next few years. I’ve been thinking about it for 34 years and if it becomes possible it would be a dream come true.

We also have the ambition to go into the non-destructive inspection field. The positron surface analysis device is widely used for inspection once the peening has been performed. We’re trying to expand beyond the boundaries of peening technology. We would like to expand to various fields such as diagnosis of rust on existing steel bridges and evaluation of the lattice defects in polymer materials, etc.

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