By leveraging cutting-edge technology, Toho Machinery is able to match the perfect solution with each of its customers.
Japanese manufacturers are facing a series of challenges from supply chain bottlenecks and rising input costs, but Japan’s reputation internationally for advanced technology and high-quality production places its products favorably in the international market. With the weak yen, it’s never been more cost-effective to buy Japanese products. Do you believe that this is the case, and how do you think the Japanese companies can use these current conditions to their advantage in the future? polyurethane hanger foaming machine
Speaking for our company, the depreciation of the yen is not actually pushing demand from overseas. That is because the cost of logistics, materials, and production has increased, and the overall price of the product has been increasing. What’s important is to learn about the local demand and provide a product that meets that demand and the intended use.
Japanese monozukuri is known for its high quality, attention to detail, and reliability, but sometimes, being over-spec or focusing too much on safety or other aspects is holding Japanese products back from penetrating overseas markets. The quality of products made in Japan is well known, but that does not necessarily mean those products will be chosen by the foreign market, so combining high technology and products that are needed by the local markets is essential in our overseas business operations. Our current operations are mainly in Shanghai and other Asian nations, and we want to continue to pursue those markets.
Another major challenge that Japanese companies are facing is the declining population. This is putting pressure on finding a market for domestic goods and creating difficulties in finding staff. It’s estimated that by 2040, Japan will face a shortage of 10 million workers. How is your company reacting to these challenges, and to what extent do you think Japanese companies need to look overseas for new markets and talent?
As a small company, we are struggling to hire and secure enough qualified employees, so we have created a 20-year plan to hire workers and stabilize our staff levels. We have been proactive in recruitment by approaching universities, specialized schools, and high schools. We use recruitment companies when needed, especially for mid-career employees. We also ask for recruitment help from our parent company, Teijin.
As for looking overseas, we have group companies in Asian nations, but in these locations, securing workers is also a struggle, so the whole group is focused on securing good personnel. One thing we do specifically for new overseas employees is to bring them to Japan for training.
We forecast the domestic polyurethane market is about JPY 10 billion. The compounded annual growth (CAGR) is expected to be 1.2% until 2030, so demand for foaming / casting machines will not grow significantly in Japan. Therefore, it’s important that we look overseas. We have operations in Asian nations. We are in Shanghai to target the Chinese mainland, which is the biggest market, and for Southeast Asia, we have a base in Thailand. In the past, Thailand was known as the Detroit of Southeast Asia, so we established a base there to accommodate the needs of the ASEAN region.
Our company was established in 1963, and we have a longstanding history of working with many Japanese companies going overseas. We have installed equipment and facilities in Japanese companies in North America, Europe, and Russia.
Are there any other markets that you think have potential for your business in the future?
We are interested in further expanding overseas, but we first want to concentrate our resources on strengthening our operations in Shanghai and Thailand. We first need to consolidate, especially our manufacturing. The company is currently undergoing a generational change. As elsewhere in the world, the aging population has been a problem for our company, and we are now in the process of succession planning.
Your company is celebrating its 61st anniversary this year, and it has accumulated a huge amount of knowledge and know-how regarding the manufacture of polyurethane foaming machines. Could you tell us about your main competitive advantages as a company and what solutions you’re able to provide to customers in such a wide range of industries?
Our strength as a company is, as you mentioned, our long history and accumulated know-how and expertise as a technical engineering company. We have taken monozukuri seriously, and we have directed our technology development toward the needs of our customers. In fact, most of our products are custom-made. By responding to the specific and demanding requirements of our customers, we have gained their trust and created a long-lasting relationship with them. We also have a comprehensive after-sales service, providing full maintenance, so if something happens, we are there to support the customers. That has also garnered trust and has led to being recognized as a reliable engineering company.
And as an engineering company, we have focused on polyurethane, but we have also opened ourselves to other technical developments as well.
To follow up on that, Japanese companies are famous for their spending on research and development. Japan spends about 3% of GDP in this area, whereas China only spends about 1% and the US is not much more than that. This is something that’s very important to your company as well. You have a design department, 2D and 3D CAD/CAM, and you’ve expanded into different industries, including the medical field. Could you tell us more about the strengths of your R&D department? Are there any particular products or technologies that you’re currently developing that you can tell us about?
We have been strengthening our core mixing technology. There are two methods of mixing. One is high pressure mixing, where there is a high-pressure mixing head that uses pressure to mix the different liquids.
The second method is low pressure mixing using a mixer. It is used for ingredients that cannot be mixed using high pressure mixing heads. However, it has the disadvantage that solvents must be used to clean the mixer, which has a negative impact on the environment.
For this reason, we are currently developing a high-pressure mixing head with good mixing properties so that it can be used to replace the low-pressure mixing head.
Another technology that we are currently developing is a equipment that uses supercritical carbon dioxide as a solvent. It can be used to extract natural ingredients, inject functional ingredients into materials, clean products, etc. For example, you can add a special incense scent to a wooden Buddhist bracelet.
We have already started selling this supercritical CO2 equipment for the washing parts used in semiconductor producing machinery. Instead of using a chemical agent for washing, we use the supercritical fluid CO2.
The automotive industry is a core part of your business. There has been a real shift in the industry towards producing EVs, which is leading to a rethinking of the materials that are being used, seeking lighter weight, heat management, etc. How is this shift in the industry affecting your business, and what are the main challenges and opportunities that this provides?
With the shift to EVs, the usage of polyurethane has changed. It is used for noise reduction and for insulation, and those uses are the same, but how it is applied has changed. With the change from an engine to a motor, the frequency of the noise has changed, making it necessary to take measures against noise generated by air conditioner compressors, etc., which have not previously been a problem.
Since different materials are used, different processing methods are required, and we have recently seen an increase in orders for new facilities that specifically target EVs.
Another result of the shift to EVs is that the demand for elastomer casting machine used in electronic control units (ECUs) and electric appliances is increasing. We don’t consider that area to be our forte now, so we want to strengthen our capabilities to expand our market share in that field.
Partnerships can be important for developing new technology or products and for expanding into new markets. This is something that is seen with your firm’s many partnerships. Are you looking for any new partnerships in the overseas market?
We have longstanding relationships with overseas companies such as Gasmer, but our current focus is working with Japanese domestic partners, material providers, clients, and trading firms. Working together with these, we want to explore new business opportunities, and that is a very important channel for us to expand.
This year is your company’s 61st anniversary. Let’s imagine that we will come back four years from now for your 65th anniversary and interview you again. What dreams and goals would you like to achieve by then, and how would you like your company to be seen in the eyes of the global market?
I believe we are an interesting company that can provide a level of comprehensive service which is not offered by many other companies. We work together with the customers from the development stage to design and make prototypes. We handle production, installation, operation, and after-sales service with follow-up maintenance. Being able to meet the needs of the customer is something that we are always mindful of, and I think this is a strength of SMEs in general.
Flexibility is another attractive feature of our company. We want to continue to be at the forefront of the industry as an engineering company with a monozukuri spirit, always being considerate of customers. We want to be a company that is needed by society and by customers. By doing this, we hope to continue to grow sustainably.
For more information, visit their website at: https://www.tohomachinery.co.jp/en/
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