For more than eight decades, Tochu Corporation has been supporting the glass and casting industries through procuring high-quality Silica Sand, in addition to making casting materials and coatings readily available. Today, Tochu has many recycling plants for sand and is dedicated to fulfilling its SDGs. In this interview, President Takeshi Morita, discusses the company’s long history of success, and its plans for the future, with Tochu’s dedication towards environmental rehabilitation the core of its philosophy.
In recent decades, Japan has seen the rise of regional manufacturing competitors in countries such as China, South Korea and Taiwan, who have replicated Japanese monozukuri, but at a cheaper cost. Despite this, many Japanese firms, both large and chusho kigyos, maintain a large share, especially in functional materials in B2B and niche fields. As a specialised procurer of sand and a manufacturer of coatings and castings for a wide range of industries, what does monozukuri mean to you?
The foundation of Japanese monozukuri lies in the "just in time" method of making improvements in the quality control process. Japanese manufacturing methods have been standardised over the years, and more recently, these specific methods have been recorded in writing as well as through videos and images. Our monozukuri revolves around the principle of improving and enhancing human capabilities, so we pay attention to educating and encouraging our personnel to take up challenges and make small but important product improvements such as repositioning materials or adopting new perspectives.
We have our headquarters in the countryside instead of a city like Tokyo or Nagoya. We are a very small company and, in comparison to Toyota, Isuzu and other major companies, we have limited financial and human resources. Therefore, we are focusing on building human capacity and enriching people's relationships. The fostering of good relationships among our employees, including junior and senior ones, through open communication channels is crucial. Since we are in a rural area, the need for this connection with other people is even more pronounced than in urban areas.
Not only our employees understand about what monozukuri is, but also our children understand it because we regularly talk to them about how our company pursues the kaizen philosophy. The details of our know-how and manufacturing processes that cannot be fully explained in written manuals are transferred through verbal communication among our employees. For example, even when a home cook follows a famous chef’s exact recipe, the dish can taste completely different. There is a human aspect that influences the manufacturing process, and it can only be passed down through direct communication.
Japan’s culture of craftsmanship is increasingly threatened by the country’s ageing and shrinking population: in the next 15 years, a third of Japanese people will be over the age of 65 and one in three homes in rural areas will become vacant. Considering your company’s location and its emphasis on human capital, how are you overcoming the challenges posed by the demographic decline?
The area we are in has a low population; consequently, over the past two decades, we have paid a lot of attention to the issue of the demographic decline. In line with this, we began recruiting Brazilian workers, and the third and fourth generation stemming from this recruitment are working in our company today. We have recently opened this opportunity to Vietnamese workers (both trainees and engineers); we have more than 30 staff members currently and employ six to ten of them every year.
Initially, we planned to hire foreign employees to work in our factories. However, that approach proved to sustain the factories, not the company itself. Thus, we decided to accept non-Japanese personnel, for example from Taiwan and Vietnam, to work at our headquarters too, which enables us to pass down our culture and techniques. We deem our staff, Japanese or non-Japanese, to be our colleagues. We gain positive influences and non-Japanese perspectives by working together towards a common future. That is the approach we are taking to mitigate the impact of Japan’s demographic decline.
Tochu’s three main businesses are sand procurement, casting materials, and coating from foundries. Is there a particular product or service that has the most growth potential moving forward?
The coated sand business is directly correlated to the number of foundries. If there is a decline in foundries, our products will decrease. Still, we think this business has potential and that the die casting method, particularly aluminium die casting, will continue to serve as the standard despite the shift in the automotive sector. Products developed from heat-resistant stainless steel are used for very specific purposes, such as thermal and hydro power plants, factories, and ships. We believe we will continue to receive orders for these products because these factories require a certain amount that cannot be mass produced and fewer companies are working in this field.
Our best-selling product will be sand. Conventional glass containers and castings may decrease, but at the same time, industries that utilise sand, like the chemical industry, are diversifying. The sand business seems to have a promising future, and it will probably become our main business moving forward. One of our strengths is having the sand mine to procure this resource.
Artificial sand, which you procure as part of your product lineup, has excellent wear resistance and recyclability. Can you elaborate on your environmental initiatives?
50 years ago, we already knew that the resources would be limited, so we started our recycling business with a target of “treating every single grain of sand carefully”. We have six recycling plants in Japan and as we witness the slowdown in casting, we are focusing on using recycled sand as much as possible to protect the environment following our SDGs concept.
What role do collaboration and co-creation play in your business? Are you currently looking for any partners either in Japan or overseas?
Starting from a partner in Australia, we could get the mining licence in W.A (Western Australia) for over 30 years. We have been cooperating with many overseas companies in Vietnam, Indonesia, Malaysia, Korea, etc., to expand our business and exchange technological information.
Our grandchild company has conducted a joint venture with a German company called Okazaki Hüttenes-Albertus Chemicals Co.,Ltd. Currently, we use an inorganic binder that has no smell and has other special properties which are very friendly to the environment. With the domestic market, beside the joint venture, we also cooperate with other companies for innovating the new material, archiving new technical properties.
In terms of our international presence, we own 90% of our subsidiary in Kentucky, United States, which we produce automobile press parts. We send our staffs to Kentucky plant to exchange not only technology but also global point of view. We are now concentrating on Southeast Asia, and joint ventures will be our strategy to expand in this region. Our policy is to let the local company take a bigger share while we provide the technology.
You are close to reaching the 90th anniversary since your company’s foundation in 1933. What ambitions or targets have you set for this key milestone?
We have set our goals in view of our 100th anniversary in 12 years’ time. Multiple overseas companies have contacted us regarding our sand business; they either inform us about sand resources or ask if we have a certain type of sand. We want to focus more on sand processing and treatment. Our next target is to process silica sand by crushing it into a fine powder to make spherical-shaped sand, a material that will be used wide range from automotive sector to daily life. Especially, our newly developed spherical-shaped silica sand is now being used in the semiconductor industry.
For our growth strategy, we want to pay attention to processed silica sand and rehabilitate the mountains and ponds where we procure it. Moreover, we would like to cooperate with many international companies in working with the silica sand material. Environmental protection is a key factor in global society, and we are trying very hard to rehabilitate our material’s sources. We feel responsible, and we hope that through our activities we can contribute to environmental protection.
Imagine we interview you again for your 100th anniversary. As the president of this company, what kind of legacy would you like to leave for the next generation?
In the next 12 years, I want to stabilise the silica sand processing business, enforce our current business, and make our company known for its environmental rehabilitation efforts. Tochu was established by my grandfather, passed down to my father, and I am the third-generation president. We are a mineral company, and my third great-grandfather used to make stone entrances and statues for shrines. I want to pass down the baton I received from my third great-grandfather: starting from stones, we shifted to sand, and my generation is now processing sand.
My sons will be over 20 years old by our 100th anniversary, so I want to make this company attractive enough for them to take over. I want to leave a mineral mountain for the next generation because it is important to retain sand resources, which are limited. For this purpose, sand must be recycled and used efficiently.
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