Since its inception, NEW COSMOS ELECTRIC has been at the forefront of innovation, introducing the first ever residential gas alarm to the world in 1964. Currently, they hold a 70% market share for Natural Gas Alarms in Japan. NEW COSMOS is also the first to develop a long-life battery powered Natural Gas Alarm using MEMS gas sensor technology and the first to deliver a battery-powered AMI smart Natural Gas Alarm to the U.S. They have sold over 70 million residential gas alarms worldwide and have expanded into seven different countries, most recently expanding into the U.S. in 2019. NEW COSMOS is well-positioned to continue to accelerate their mission to help eliminate deaths due to gas explosions and make a huge impact as a long-standing, trusted global leader in the gas alarm industry.
Over the past couple of decades, we’ve seen the rise of manufacturers in Southeast Asia, who can replicate certain manufacturing processes and products from Japan at a lower cost and with economies of scale. How have Japanese firms been able to remain so competitive in the face of this tough price competition?
While other Southeast Asia countries have increased their manufacturing capabilities, Japan has continued to successfully compete in a very competitive market by focusing on developing innovative products and consistently offering exceptional quality.
In general, Japanese companies are very intentional and have earned a reputation for providing extraordinary design quality and innovation into our products and into the manufacturing process and our customers appreciate this. As we continue to expand our product lines, our Japanese manufacturing teams remain laser-focused on prioritizing people, products and processes. We do our best to focus on the big picture while also making sure every detail is considered with great care and precision. When developing products, we first identify how our target audience will interact with and use the product and then how we can best design the product to meet the end-user’s needs.
In the next 15 years, one in three people in Japan are expected to be over the age of 60. This could lead to a labor shortage, as well as a shrinking domestic market. For New Cosmos Electric in particular, what are some of the challenges that this demographic shift has caused, and how are you reacting to those challenges?
New Cosmos Electric has been around since 1960 and during these six decades, we’ve become quite resourceful and resilient in the face of any challenges along the way.
Our brand is known for offering solutions to problems. In 1964, New Cosmos Electric developed the first residential gas alarm in the world to eliminate deaths and injuries caused by gas leaks. As more people installed gas alarms, the number of deaths and injuries caused by gas leaks decreased. Recently, there have been almost zero deaths caused by gas leaks in Japan.
Number of deaths due to gas accidents (Japan)
With such a high success rate, New Cosmos Electric now holds close to 70% market share for Natural Gas alarms in Japan. We feel our experience in Japan can be replicated elsewhere in countries that need it most. In fact, recent data shows that many people in the United States, the United Kingdom, France, and other countries still experience deaths due to gas explosion accidents and we are making significant efforts to provide gas alarms to overseas markets.
So far, we’ve expanded to seven other countries and are no longer solely dependent on the Japanese market. Our global mission has always been to “eliminate gas accidents from all corners of the world” and we’re doing our part now. We are very excited about our continued expansion efforts and positive impact on communities worldwide.
Why is the number of gas leak-related casualties so low in Japan in comparison to France, the UK or the USA?
In Japan, the government has been very proactive in protecting consumers’ safety by enforcing specific regulations and guidelines. For example, gas companies must make sure that their gas systems are safe and secure at every point. Japan has regular gas company inspections where engineers go to our homes to make sure that the gas system is working well. It’s a service that helps to save lives.
On the other hand, gas safety measures are left up to the individual in the U.S. Currently, gas utility companies advise their customers to check their appliances and if they smell gas to call the gas utility immediately, but this isn’t a reliable solution when lives are in danger. There is an effort in the U.S. to change this. The National Fire Protection Agency (NFPA) 715 is proposing standards to develop installation requirements for fuel gas alarms to be installed in homes that use gas for heating and other appliances.
In New York, one gas utility (Con Edison) had several significant gas explosions resulting in deaths, injuries and destroyed apartment buildings. To prevent this in the future, Con Edison chose to install New Cosmos USA AMI (Automated Metering Infrastructure) gas alarms (at the gas meter) to communicate directly with the utility when a natural gas leak is detected. Until gas alarm installations are required, it is up to the consumer to protect themselves from the dangers of gas leaks by purchasing and installing their own gas alarms.
NCUS AMI gas alarm
Besides lack of natural gas regulation, many countries face higher death tolls from gas leak explosions because they have been using gas for much longer than Japan. In the UK, France and the United States, gas pipes were installed more than one hundred years ago. In many cases, the household pipes supplying the gas are still the originals. It is inevitable that gas leakage will occur in those pipes. In the US, based upon the current rate of gas pipe replacement, it would take over 200 years to replace the old gas pipes. Those original gas pipes are typically iron which are prone to rusting and cracking. On the other hand, Japan started installing its gas infrastructure about 70 years ago, after World War 2, which made a noticeable difference.
New Cosmos USA recently partnered with Senet, a leading provider of cloud based software and services to develop a new version of the New Cosmos wireless natural gas alarm that uses emerging technology. Can you tell us what you think the impact will be of the proliferation of ever more sophisticated sensors on the gas detector market overseas?
New Cosmos USA and Senet (with their LoRaWAN™ network) are engaged in field trials with gas utilities in the US focused on improving safety for gas utility customers. Senet and other communications providers (like Itron) have partnered with New Cosmos because our low power consumption (MEMS) sensor offers a 7-year battery life (soon to be 10 years) and enough power to provide data to utilities via various wireless communication networks. Some data provided to utilities include low battery status, functionality, gas concentration levels, etc. Additionally, New Cosmos has sensors for temperature, humidity and air quality which can also be transmitted via the low power communications network. These smart feature sensors will further expand New Cosmos’ opportunities within the consumer and commercial space and most importantly, help save lives and protect property.
The automotive industry is shifting away from combustion engines towards sustainable cars. New Cosmos Electric in-vehicle hydrogen detector was recently used by Toyota to detect hydrogen. The main problem is that there is no smell for hydrogen, so it's hard for people to know if there's been a leak or not. Could you tell us more about how New Cosmos Electric is ensuring the safe use of hydrogen?
In terms of hydrogen as an energy source, Japan has an abundant source of hydrogen because we are surrounded by water, so we should be able to produce hydrogen at a low cost. As the use of hydrogen increases, we will see an increase in demand for hydrogen sensors.
We are strategically well-positioned to supply those hydrogen sensors, as we’ve been developing them for more than 40 years at New Cosmos Electric. We have developed a sensor that selectively detects hydrogen in the presence of a variety of gases. As for the automotive hydrogen sensor, we have achieved higher response speed and durability when compared to conventional products. Even before I joined this company, we started looking into developing hydrogen sensors and the president at that time told us that we should be able to produce the best-in-class hydrogen sensor offering steady sensitivity, stable performance and ease of use. Although the automotive industry was not our initial objective when developing the hydrogen sensor, Toyota adopted this hydrogen technology for their new cars and we are happy they did.
Hydrogen detector for FCV
This trend of hydrogen becoming a major power source for many other industries will continue. We’re already witnessing industries like power generation, the chemical industry, iron works, etc. increasing their hydrogen use. The main challenge for all hydrogen producers will be to offer it at a low cost and in a more eco-friendly way. I predict that in the next 5 to 10 years, we will be seeing ‘green’ hydrogen being produced by Japanese companies.
The European market is now producing hydrogen as a lower cost renewable energy source. The EU has announced that they’ve put a large investment into hydrogen power generators with countries like Germany actively involved in these hydrogen initiatives. Overall, we are seeing a lot of potential in the European market and are looking forward to approaching this market.
Aside from Europe, what are some of the key markets that you're looking to expand into in the future?
With regard to hydrogen, Europe is the most advanced market and we want to consolidate our presence there.
Beyond Europe, we already have operational bases in China and the US, and we have a number of subsidiary companies in Europe specializing in semiconductors. Because we currently have a presence in these markets, we’re addressing the need to tailor our product portfolios to each of these regions as well as further expansion into several Asian countries that still rely on coal fire as their main energy source.
When you look at India or Indonesia, the consumption of propane gas is the highest in the world because it doesn't require the same kind of infrastructure. However, there are a lot of gas related accidents in those countries, so we would like to enter those markets to contribute to eradicating gas accidents.
When you eventually retire, what objectives would you like to have achieved and what message would you like to leave to the next generation of your company’s executives?
I am very proud to work at New Cosmos Electric with a team that shares a common objective of protecting people and property from gas leak explosions. Throughout my decades of sales experience, I’ve tried to influence and promote the importance of Natural Gas detection. For a while, many people did not see the urgency of installing gas alarms, or felt it was someone else’s responsibility. However, now, I am glad to see that the need for gas alarms (like Smoke and CO Alarms) is getting more attention and the demand is increasing for these types of products. It is rewarding to know that New Cosmos Electric has developed leading gas sensing technologies currently being sought out by many customers in several countries. I am highly encouraged to witness our company’s significant role in the increased awareness and need for gas alarms. The future executive generations will look back and see our impact over time and be extremely proud to know that our gas alarm products have helped to successfully save lives and protect property worldwide.