With its novel and original telescopic masts, YUASA has put to use its extensive technology and know-how in hydraulic cylinders to create a solution in high demand from a growing range of industries. Engineered for precision control from the ground, these mast systems can be mounted with antennas, monitoring cameras, floodlights and other components at the highest point. YUASA’s diverse range of solutions also includes the crankshaft, in which the company holds the top market share in Japan, and is a component at the heart of the common combustion engine, playing an essential mechanical function in the operation of automobiles, motorcycles, farming machinery and other products that Japan’s heavy manufacturing industry has become globally renowned for. We speak with president and CEO, Hirofumi Yuasa, to learn more about the company and its products.
Your company was founded in 1947 when you began manufacturing and selling cylinders. This coincided with the development of Japan in the post World War II era, known as the Japanese Industrial miracle, which had three characteristic traits. First, the parts were procured in a fast fashion in order to reduce inventories from manufacturers. Second, total quality control was widely adopted by the industry. And third, the relationship between suppliers and manufacturers was close, strong, and long-lasting. However, these three aspects have since been replicated by regional manufacturers in Korea, Taiwan, and China, but what remains unique to Japan is its manufacturing process called monozukuri. What is the essence of monozukuri for your company?
There are so many definitions for monozukuri. For us, it is represented by the manufacturing and processing of new types of machinery. The spirit of monozukuri has always been an integral part of our company, and that is how we have worked for years. That is probably why we have not thought too much about it, since it has consistently been a part of our work ethic.
You have developed the unique ability to design, develop, and manufacture certain products such as the cylinder. You developed the three-stage cylinder, which is used on 10-meter cranes to meet the construction industry’s demand, which constantly requires new technologies. Can you tell us more about your unique processing technologies and why are you the go-to partner when it comes to cylinders and telescopic applications?
The construction industry actually prefers more cost-effective technologies rather than new technologies. In Yuasa, our new technology is represented by our telescopic mast, and we are now developing new technologies from this original product. Our telescopic mast was originally made for broadcasting cars in Japan, but recently, it has been used as the base for the mobile phone antenna. This is particularly helpful when antennas damaged by earthquakes need repairs. We are looking to introduce this product globally.
You developed this telescopic mast here in Yuasa because you saw the need in the market for such technologies. You were able to create these products from two meters up to eighteen meters long, and the payload spans from 2 to 200 kilos. What need did you see in the market for this technology? And what strategies have you implemented in order to showcase to the world this unique technology?
It has always been our company policy to respond to customer needs. For this telescopic mast, the demand came from the TV broadcasting agencies, but now it is being applied to many different fields. Let me tell you about how our technology is now being applied to different fields. We have about 190 employees, including temporary workers. Our business includes crankshaft machining and hydraulic cylinders. Crankshafts are used as parts for engines. They are used for automobiles, outboard motors, compressors, and agricultural machinery such as Kubota. These are our mass production products. We also have trial production protocols, developed by an automobile manufacturer who applied our technology. It is also used for motorcycle racing and light aircraft. LFA is one of the applications. We are responsible for small-volume production; for general purpose products, we can process up to five meters. Hydraulic cylinders are used for construction machines, and we usually take care of the integrated design process. It is likewise applied in large-scale crawler planes and we have about 40% of the market share, but right now they are facing some fierce competition with China.
Forty per cent is a huge market share. Can you tell us why clients are choosing your company to supply such a product?
We cater to low-volume production orders. If a company needs mass production of large-scale cranes, they might decide to manufacture them themselves; but if they only need a certain number of orders, they outsource it to us. And these low-volume orders make up our 40% market share. We are also manufacturing the telescopic mast cylinders and jack systems, for which we have about a 40% share in the domestic market. We sell our jacks together with the expansion system which allowed us to have a bigger market share. With regards to the three-stage telescopic cylinder, we have increased production to increase sales as well. We have patented our technology for the telescopic mast where we put oil on the inner pipe which in turn increased its power to push heavy loads. We applied the technology we had on the construction cylinder to this mast, and this technology is now being used by the broadcasting van, the mobile phone base station, and the National Police Agency.
Which overseas market would you like to introduce your products to?
We would like to introduce our products to Europe and America. We are now working on our CE mark certification.
You already have Hilomast US and SMC UK as your partners abroad. Are you currently looking for more partners in order to reach new markets?
Our goal is to have an even closer relationship with our existing two partners. Right now, we are also distributors of SMC products; they have an air expansion system that sells very well in the Japanese market, and importing their products allowed us to generate profit. Hilomast in the US also manufactures masts that extend machines. We endeavour to establish a partnership with companies where it is mutually beneficial for both parties.
Masts are also used in the event of a disaster. A communication antenna is mounted on the mast to secure a communication network when there is no communication. This is also used by the radio broadcasting band, police cars, and it was used during the Nagano Olympics as well.
You also have other products such as the crankshaft and cylinders. The automobile industry is changing very fast; internal combustion engines are now being replaced by EV (Electric Vehicle) engines, and there will no longer be a need for transmissions or engines. Instead, there will be a need for batteries, motors, and ECUs (Electronic Control Units). Can you tell us how you are adapting to this change in the automobile industry?
Unfortunately, we are not able to respond to those needs at this time. Our demands come from other automobile makers for prototype production. With the switch to EV in the automobile industry, we have seen large automobile manufacturers outsourcing their crankshaft line production to us in order to focus on their EV-related production lines for cars and motorcycles. For the time being, we are receiving orders, but at some point, they will be gone.
In terms of mass production, we have orders coming from agricultural-related machines and shipbuilding. There is no shift to EV on ship engines, and the smaller demand volume for ships, compared to automobiles, enables us to meet that demand. Due to the COVID-19 situation, most people around the world are staying home, so the engines for ships are selling well.
In 2013, you established a factory in Thailand, which allows you to reduce your labour costs in production. Southeast Asia is showing a huge upsurge in construction and more than 50% of the world’s construction spending will be there in the next five years. Can you tell us which countries you are targeting with your construction products, and which particular products are you looking to outsource there?
When Kubota built their engine factory in Thailand, we also expanded to that market. We have automated all the production lines in our Thai factory. We are working on the production of the crankshaft line that is more advanced than the one in Japan. When we manufacture in Thailand, we try to procure the necessary parts such as the consumable tools or machine components from Japan, but those tend to be expensive. The use of high-quality machines is consequential to the accuracy and precision requested by the customers, making it hard to lower the cost. Sometimes customers compare the components that we supply to them with those made by Thailand and China, although the components made in China do not achieve the required level of precision; they choose them over our products because of the cheaper price. Perhaps the level of precision that we are achieving is exceeding the customers’ satisfaction. In large-scale manufacturing, a lot of young people are tasked to design the products with lesser technologies in contrast to seasoned engineers. It is difficult to determine and standardise the level of accuracy or precision that our customers want.
Another interesting part of your business is not only your ability to do mass production but also the short runs and the prototyping as well. As an SME, you have the flexibility and precision to adapt to customers’ requests, which helps you to develop close relationships with them, and you can also diversify to utilize your technologies in new industries. What new industries are you looking to diversify into?
The mass production line for crankshaft processing products normally takes three years for large-scale manufacturers to set up. It only takes us a year to accomplish that, which shows that we can swiftly respond to customers’ requests. Our core business is machining and processing. For the crankshaft, we are targeting the niche fields in any country. The engine-related products will decrease going forward, so we are planning to stick to growing our original product, which is the telescopic mast. There is a lot of politics involved in the automotive industry. Toyota is now developing a hydrogen engine. If they succeed in that development, there is a way for us to survive in the industry.
Earlier this year, we spoke with the President of Jatco, who developed the famous CVT transmission. He was very hopeful for the future in adapting to the new phase of industry the automobile is in. He said that to adapt, the most important thing is open innovation, and the key to success was partnering up with foreign technologies and know-how with the Japanese monozukuri. Are you looking for partners, and what role does co-creation play for your business?
As you know, Japan is facing a declining population, and we have been losing a lot of the labour force lately, and several manufacturers are also exiting from their businesses. In these circumstances, we would like to push on with our machining and processing business to become the last samurai in this industry. We want to continue improving our technologies, and take over the manufacturing processes of companies with no successors, that produce parts or components that are still demanded by the market. We hope that the engine parts processing will survive and that McLaren will talk to us.
The level of precision of our crankshaft produced in Thailand is superior to what we have in Japan. In the future, I believe that if we have good machines and educate the local employees with the right methods, then we will be able to continually produce high-quality products. The basic idea is to produce locally for the local market. As I mentioned, our focus is on the niche field, which is the telescopic masts.
What percentage of sales are you targeting for your overseas business? What strategy will you implement in order to increase those sales? Would you be looking to open another factory, sales offices, or even a joint venture?
The telescopic masts are what we are trying to sell overseas, so we are working on the certification for CE mark or UL standard. Moreover, we are trying to expand the sale of the rotating device attached to the mast. For now, we don’t have any plans to build a new factory overseas. Everyone in our Thailand factory is Thai, and no Japanese employees work there. I think that we have to increase the jobs here to secure the employment of our Japanese employees.
Yuasa will be soon celebrating its 74th anniversary and your sixth year as the president of the company. Imagine we come back in four years for your tenth anniversary as the president. What are your dreams for the company, and what goals would you like to have accomplished by then?
By that time, I would like to say that our telescopic masts are selling very well all over the world. You can find our telescopic masts anywhere in the world, but they are not selling very well right now; it shows that there is room for us to grow in this market. On that note, we are now in the process of developing a new type of telescopic masts with a lighting system attached to them, which is very unique, and can’t be found anywhere else in the world. I am hoping that it will be a hit, and steady growth of our sales would be ideal.
Personally, I'm a fan of F1’s Kimi Raikkonen. My dream is to use our processed crankshafts for McLaren, Ferrari, but it has become a very difficult dream as we are heading towards a carbon-neutral society.
Japan is promoting the working style with more holidays and less overtime work for employees which is similar to the European style of working. It is going to become more difficult for traditional SMEs like us, but the government thinks that the change will be favorable to the workplace. In the past, we used to spend hours and even pulled all-nighters to finish our products; it was the foundation for manufacturing a good product. However, that is not the case now.
In SMEs, hiring is one of the biggest challenges of many companies all over Japan. Also, in the monozukuri process, more and more products are produced in the same way as iPhones. If that happens to cars, there will be fewer components to supply, which will be an immense obstacle for us. Whenever there is something new, Japan is willing to create the technology needed. I believe that Japan will remain in the lead for new technologies, but the existing technologies will be replicated at some point. The sweet shops that have existed since the Edo period are carrying on with their unique technologies and running their businesses with a limited number of people. I think we need to do the same as an SME. As technologies advance, some conventional technologies will disappear, and I think that it is not a bad thing. Our employees joined our company with the intention of doing machining. The world is changing drastically, and if machining disappears all over the world, we will aim to become the last one standing by improving machining technology. We aim to be the last samurai of manufacturing from Japan.
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