Business | DAVOS SPECIAL 2018

Saitama in the vanguard of technological innovation

Publicity

The city of Saitama, a major bedroom community of Tokyo and a host of venues for basketball and soccer games during the 2020 Olympics, attracts many companies with leading technology that Japan can be proud to showcase to the world.

Adjacent to one of the world’s largest cities, Saitama enjoys the benefits of being close to a huge market. Because many large manufacturers, which are their customers, are located nearby, it is home to many small companies using their cutting-edge technology to manufacture products.

Many of Saitama’s companies make components and materials, rather than end products, meaning that most of these companies do not enjoy as much name recognition as they may deserve. However, their components and materials go into many products that support people’s daily lives and their excellent craftsmanship techniques can be a major part of the Cool Japan campaign promoting tourism and the unique culture of Japan.

The concentration of technology in the city is owed to its convenient access to the capital; it takes only 20 to 30 minutes by train to reach Tokyo, Shinjuku and other major stations. This ease of access has attracted many types of businesses, creating the demand for many different technologies.

Highways and railways are well developed in Japan to connect Tokyo with other areas of the country. Saitama serves as an important hub connecting Tokyo with Eastern Japan, and thus it is designated as “the gateway of eastern Japan” by the Ministry of Land, Infrastructure, Transport and Tourism.

Saitama boasts six shinkansen lines, as well as an orbital expressway. There is ongoing work to improve traffic flow through additional railway and road development.

Geographic advantage, distance from the sea and minimal elevation differences make Saitama a suitable location for businesses to have continuity operations in place because such features reduce disaster risks, such as floods.

The Saitama Shintoshin urban area is a nationally designated wide-area disaster prevention center and is an administrative district that is home to national government offices.

Not only does the city of Saitama have such varied advantages for businesses, it also provides local businesses with the opportunity to expand into the world.

The city takes various measures via the Saitama City Foundation for Business Creation to support local companies by providing consultation, financial aid and dispatching experts to assist them, among other activities.

Leading-edge certification

In one of the programs to help local companies, the city began the Saitama City Leading-edge Companies Certification and Support Program in April 2008. Currently, the program has 33 companies designated as leading edge.

These companies are allowed to tout their leading-edge certification and use the official logo, which incorporates a hand to signify the importance of human input in high technology, in their advertising and PR materials.

In addition to using the logo, the companies also receive support from the city in a variety of forms. For example, the city promotes them at international trade shows, helps them in developments of new technologies and sources new business. Additionally, the city will put more focus on measures for employee training and human resource development.

Through a screening process, a review committee established by the city screens applicant companies on the basis of originality and innovation, marketability, likelihood of submitted plans to be realized, expansion potential and social value. The committee is comprised of professionals from corporate aid agencies, academia, international business support organizations, as well as experts in product development, marketing, financing and accounting.

The 33 certified companies boast cutting-edge technologies that cannot be easily copied by overseas companies who approach them to buy their components, use their technology and form alliances to penetrate markets overseas.

The following companies are just three of the certified companies that have enjoyed global expansion.

ASAP

ASAP Co., Ltd. President Makoto Osawa. Bottom: Examples of products and a factory interior.
ASAP Co., Ltd. President Makoto Osawa. Bottom: Examples of products and a factory interior.

Established in 1999, ASAP Co., Ltd. is a manufacturer of semiconductor-production equipment. Its products are machines that are used to conduct one of the procedures, called photolithography, to print circuitry patterns on silicon wafers. The company also produces metal-lift-off equipment, as well as machines for wafer cleaning, laser marking, spin drying and others.

The company’s strength is that it develops such equipment with its customers, manufactures order-made products and provides maintenance and other services after delivery.

“We do everything from designing to assembling in house. Salespeople and engineers can share information very easily. That’s a great benefit of our company,” said ASAP President Makoto Osawa.

ASAP is also expanding its sales overseas. Until 2016, overseas business accounted for about 20 percent of sales, but the figure went up to 30 to 35 percent in 2017, with most of the sales in China and South Korea. The company is attending overseas trade shows and doing other things to expand businesses in Asia, the Americas and Europe.

For example, it has shipped one of its machines to a research laboratory at the University of California, Berkeley that any company can use with the university’s permission. The U.S. and Europe have many such research and development centers and Osawa hopes sales to those places will build trust and attract new clientele.

Meanwhile, China is a huge market and he is considering building a manufacturing center in Taiwan and a sales center in China, though he intends to do so in a manner to protect its intellectual property, he said.

ASAP is using its leading-edge company status and taking advantage of Saitama’s support. Osawa hopes Saitama will help his company make connections with companies in Germany, the technology center of Europe.

Hasegawa Machine Works

Hasegawa Machine Works Ltd. President Toru Hasegawa. Bottom: Examples of products and a factory interior.
Hasegawa Machine Works Ltd. President Toru Hasegawa. Bottom: Examples of products and a factory interior.

Hasegawa Machine Works Ltd., established in 1928, is a maker of factory equipment that focuses on manufacturing small-size equipment. Its main products are numerical control lathes and machining centers.

Its customers are automobile parts makers, which account for about half of its sales, as well as makers of medical cameras, watches and other precision products.

The company differentiates itself from rivals through its high technology to make compact products.

“The larger does not serve for the smaller” is the company’s motto.

“We created this motto 20 years ago. The concept came from our customers, not us,” said Hasegawa Machine Works President Toru Hasegawa.

The company was displaying its products in an exhibition in 2000 and an automobile parts maker gave it an idea of selling more units of smaller equipment, which the maker did and its productivity surged, he said.

Hasegawa Machine Works can use its strength of making smaller equipment to expand its business into the medical equipment industry and the jewelry making industry. For example, makers of components connecting human bones and dental implants can use Hasegawa’s products.

The company, which has a manufacturing subsidiary in China, is active in attending overseas trade shows to pitch its products and technology to potential overseas customers. It displayed its products in six international trade shows in 2017, sending employees to three.

Saitama provides financial, as well as other support, for leading-edge companies to attend such trade shows and Hasegawa is “very satisfied” with the support his company has received, he said.

“Overseas expansion is important because it offers a risk hedge. Because we are in a niche market, focusing only on Japan limits our growth,” he said.

Iino Manufacturing

Shu Yamamoto, an officer of Iino Manufacturing Co., Ltd. and manager of the Association of Southeast Asian Nations Business Department, as well as the Sales Department. Bottom: Examples of products and a factory interior.
Shu Yamamoto, an officer of Iino Manufacturing Co., Ltd. and manager of the Association of Southeast Asian Nations Business Department, as well as the Sales Department. Bottom: Examples of products and a factory interior.

Iino Manufacturing Co., Ltd., established in 1948, is a supplier of automotive parts, mainly for Honda Motor Co., Ltd. It produces precision components for engines and transmissions of automotive, motorcycles and other machines.

As for hollow dowel pins, which contribute to weight reduction compared with the solid type, Iino Manufacturing is a major supplier to Honda Motor Co. Ltd.

The company has the edge on precision metal components through the process of machining, forming, stamping, grinding, welding and brazing.

“Iino Manufacturing is one of the competitive suppliers in the field of precision processing,” said Shu Yamamoto, an officer and a department manager of Association of Southeast Asian Nations Business and Sales.

To succeed, the company has to preserve its particularity, the so-called Iino DNA, which is the spirit of art, to say nothing of quality, to break through given difficulties to reach the next level.

Iino Manufacturing needs to infuse its DNA to its overseas subsidiaries. Besides Japan, the company has production plants in China, the Philippines, the U.S. and Mexico, as well as a logistics center in Indonesia.

It is of utmost significance to secure human resources to transfer the technology into those subsidiaries overseas.

Iino Manufacturing is also trying to increase sales in fields other than auto parts. Certified as a leading-edge company, Saitama has been introducing Iino Manufacturing to medical equipment makers and other overseas companies.

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