Flexibility and a wide product range could be the answer by SMEs to the challenge rising from globalization. We talked about it with Shimazu Kasei, a Japanese family company operating in the PU market
Small and medium-sized enterprises (SMEs) are fundamental for the market-ecosystem: according to the World Trade Organization, they represent more than 90% of all businesses and around 60-70% of employment.
The competition with biggest companies is often hard; if SMEs can quickly response to a changing world, on the other hand their size makes them weak: difficulties are above all related to finance and access to international market opportunities, and the risk of disappearing, engulfed by the global market, is high.
In Japan, the same problems affect the small and medium-sized enterprises, which produce most of the components that end up in Japanese products, and often, in order to be competitive, are forced to greatly diversify their production.
This is particularly true for companies operating in the Japanese polyurethane market: given the contraction that this already niche market has been facing in recent years, SMEs must be flexible to continue competing. A flexibility that generally translates into a wide and diversified production.
We are meeting Mr. Takashi Shimazu and Mr. Yoshinobu Shimazu, respectively Director of Sales Division and Manager of Production Engineering Division of Shimazu Kasei, a small Japanese company (30 employees and about 400M Yen turnover), established in 1995, which produces many different polyurethane products: from the Tokyo subway turnstiles, to car components, to toys.
Shimazu Kasei has made diversification of production its weapon to face the market.
In a world which is now global, medium-small companies struggle to thrive because either they become part of bigger corporation, or they disappear. How do you see this evolution in the Japanese market and how do you cope with this?
“The PU market in Japan is quite limited and dominated by so many giants. The competition with this big companies is very high and if we continued producing small shapes of PU foams, sooner or later we would close. This is why in the latest years, in order to face this situation and avoid collapse, we have changed our strategy, not only varying our production, but also focusing on complex moulding of components.
To make these components, we develop moulds by ourselves, based on requirements or data provided by customers. It is a tailor-made production with low volumes. However, this type of product is quite expensive for the end user.”
As we could see during our visit to your production plant, you succeed in a very diversified production, covering from automotive components, to toys and dummies. How do you manage this kind of product portfolio, so wide? Which are the key factors of your success in this complex scenario?
“As we said before, our portfolio reflects our strategy: we are a small owner companies, so we have to provide many different products in order to compete against bigger companies, both in terms of costs and production volumes.
For this reason, we prefer to turn to niche markets, as for that of the automotive spare parts. Shimazu Kasei produces replacements of old models of cars for tier-one, but the volumes are very low, and, at the same time, the market pressure on the costs very high. This mechanism is leading us to shift our production of the spare parts from those for old models of vehicles, to those for new models.”
Since this diversified production, how the chemical blending varied, product by product?
“Shimazu Kasei produces 200 different kinds of products in one month. Product amount is range from 1pc to 1,000 pcs per batch. All our products require a specific chemical formulation: automotive components need a less density foam than some particular toys, for example.
Also colours (which are directly injected into the chemical formulation) vary a lot from one product to another. Furthermore, some niche products are so dedicated that it is impossible to find suitable formulation on the market.
These situation led us to develop our own skills about PU chemicals: in our plant we use both pre-blended chemicals from raw material suppliers, and other chemical formulations than we blend ourselves, so to have total control over the finished product, with the guarantee that it is exactly as the customer required.”
It seems that the two key elements of your production are flexibility and precision of mixing. Is it correct? How the Cannon machines help you in reaching these goals?
“As you have seen during our tour into the plant, we have 5 Cannon high pressure dosing machines: some of them are pretty old but are still working very well. And we continue buying your dosing machines and mixing heads – and, you see, we are still investing – because they provide the best mixing performance, compared with other solutions on the market.
Cannon dosing machines are very easy to operate, allow a quick change of chemicals and, together with your mixing heads, guarantee a superior mixing quality.
Furthermore, we can count on your Japanese local unit, that is very close to us and provide us all the support we need: for a company like Shimazu Kasei, having a team of specialist to assist us and ensure a prompt intervention in case of anomaly is essential not to waste precious time and maintain high quality levels of the final product.”
As a PU manufacturer, we are a small community around the world and we are facing a sort of instability about the future of this material, which could be replaced by less expensive or more performing materials, maybe more environmentally friendly…so the question is: what is your opinion on the future of polyurethane? Are you looking also to other materials?
“Well, PU is essential for some production (see insulation) and can therefore hardly be replaced.
Shimazu Kasei specialised its manufacture on polyurethane foam: luckily our company strategies generated a quite wide market range so we think we can be positive about the future.
But of course some important evolutions will concern the PU: from the environmental point of view, it is necessary to start the development of a new maybe greener polyurethane or of new materials. However, these changing will probably become effective in a not-so-immediate future.”