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Yabashi Holdings: Committed to carbon offsetting as focus shifts

Interview - November 22, 2021

Established in 1961, Yabashi Holdings is a leading construction, machinery and mining company present not only in Japan, but across Asia. The firm is dedicated to monozukuri, the spirit of innovation and perfection that underpins Japanese manufacturing. For President Tatsuyoshi Yabashi, monozukuri is about maximizing workers’ potential. “It’s important to find good human resources and educate and train them in an environment in which they can experience satisfaction and motivation,” he says. In this interview, Mr. Yabashi also explains how Yabashi Holdings is working towards carbon neutrality and is turning its attention to its wood and metal divisions.

TATSUYOSHI YABASHI, PRESIDENT OF YABASHI HOLDINGS CO., LTD.
TATSUYOSHI YABASHI | PRESIDENT OF YABASHI HOLDINGS CO., LTD.

The famous Japanese manufacturing spirit, ‘monozukuri’, has traditionally been about the ‘Kaizen’ philosophy - which emphasizes constant improvement in all aspects of production - but nowadays it's also about responding to customer requests and meeting new market demands. As a company involved in three diverse business segments, can you give us your take on monozukuri?

Monozukuri is about human resource development. It's important for our company to find good human resources and educate and train them in an environment in which they can experience satisfaction and motivation through their work. That is what we have been doing in Japan and elsewhere in the world like Vietnam and Myanmar, and that has been an ongoing theme. There are good human resources everywhere and it's important for us to find and develop them.

One of our Vietnamese workers asked me what the Japanese way of working is. My answer was that the Toyota way of manufacturing is representative of Japanese manufacturing as well as the Japanese work style. There have been two lost decades in Japanese manufacturing but during those two lost decades people have been working on Kaizen to improve their on-site performance and that is based on the high morality of the Japanese people. Based on this high morality, Toyota and other Japanese companies were able to develop their own way of manufacturing for conducting business so I truly think the Toyota way is a wonderful example of Japanese business.

 

We know that your family has been present in this area for over 400 years and your company is now well established. Could you tell us what benefits such a long and illustrious history brings to the company today? And what do you consider to be some of the key milestones in your company history?

There’s been a common philosophy in our family’s blood throughout the long history of the Yabashi family, which is expressed in the form of three mottos. The first is to provide goodness to the community without boasting to others. Although you may not stand out for providing that goodness, you stay behind the scenes and continue to try your best so that you can benefit society. The second one is to not depend on business, so I was educated not to focus on developing our business or protecting the real estate and other assets that we have, but to provide service to the community. Our third family motto is to appreciate the work of art and antiques. This emphasizes the infinite capacity of people to make beautiful and timeless pieces of art that can make people’s hearts jump and make their heart move. Only humans can create such things and we should believe in the potential of humans. We believe our workforce has the same limitless potential in their unique ways and thus value our workforce very highly. All three mottos were originally a family motto but we think they apply to our company and thus they are the underlying foundation for our corporate philosophy “Exploring Humankind”.

 

Japan has the oldest average life expectancy in the world of 85 years. More than one third of the population is over 65, which means a reduced labor force and less demand for products in general. How has this declining population affected your company and how are you reacting to this particular challenge?

We don't only focus on the Japanese market for our labor force, we have a global perspective. If we don't find enough human resources in Japan, we relocate ourselves to areas where there are people who are willing to work with us. It's not that we don’t want Japan to prosper, but we want the prosperity to be spread globally, so that is the role we are taking as we move forward.

 

If we look at Japan's construction boom, we know that it occurred more than 50 years ago, around the time of the 1964 Olympics. Today there's a need for maintenance and upkeep rather than new builds. Could you give us your assessment of Japan's current infrastructural needs and how is Yabashi contributing to this transformation?

Actually, Japanese construction did not focus on the prosperity of the mind or the heart, it was made more for living purposes. So what we are focusing on now is to provide residents with a prosperity of the mind. In a cheaper and more efficient way. What I mean by prosperity of the mind is a person goes back to the house and he or she opens the window, and you see greenery and that gives you a relaxing or a heartwarming feeling. So what we are trying to create is an environment around the house which stimulates a person’s senses. For example, we may have a wall where the person would want to hang a painting or make a flower arrangement. Those kinds of designs would be sure to trigger the sensitivity of the residents and follow Japanese culture at the same time.

 

Your company is operating in three main divisions involving wood, metal and mining (limestone), all of which contribute to your construction operations. Of those three business divisions, which is the main focus and which has the most potential for your business in future?

Up to now, the limestone business has been our main income stream. However, with the increasing scarcity of available natural resources, that is not a stable business so we're now more focused on the wood as well as the metal business and especially on metal processing.

During my grandfather’s time we had a lot of real estate but with the end of World War Two there was a revolution in land assignment as well as land tax reform and because of those factors most of our land was taken. However, we retained possession of land on Mount Kinsho which had limestone deposits so my father started mining the limestone and we were able to enter into a deal with Nippon Steel and provide our products to them and revitalize our limestone business.

I was the very first one to go overseas and my son is now doing something else so it's important that every generation creates new business. It's important not to depend on what you have from the past. This could be traced back to our family motto where it says don't depend on the family assets. Every generation needs to create new business in order to evolve and that's the mission that is imposed on every generation.

 

Could you speak to us more about your long term strategy and the vision you have for your company as your son takes over the reins in the future?

Our mid to long term strategy for the metal business is to focus on our bespoke, custom made machinery. We believe that the originality and uniqueness of a product can be influenced by the very machinery it is made with so I want to make machinery as a joint effort of Japan and Vietnam and they’ll create all the machinery that is required in-house.

As for the wood business, it's important to secure the safety as well as the assurance, but at the same time it’s also important to provide a prosperity of the mind through our buildings. And for the limestone business, it is true that we are playing a part in environmental degradation by burning limestone, which emits carbon dioxide. So what's important is to move towards carbon neutrality by planting more greenery and also having an agricultural business.

So these are some of the new businesses we have focused on. We actually already have an agri-business too where we produce honey grown in a natural deciduous forest – a natural result of the power of the forestry. We want to enlarge our business in this field.



Could you talk to us more about the synergistic benefits of your three business divisions?

There are a lot of synergistic effects. Our experience and technologies have led to many things, including one of the new projects which is a factory we are building in Vietnam. My son is there leading the project and we are trying to build a factory that turns limestone into powder so we are developing our original machinery for that and also in terms of the wood business, we are developing machinery to process wood. We are also trying to develop a new material where the residual soil after washing limestone is combined with quicklime and other material in order to create a material that allows water to penetrate whilst still staying strong. The material could be used for pavements with more natural aesthetics. It can be used to solidify soil for the soft grounds.

 

Can you tell us more about the unique processing technology you use to develop your products?

Conventionally, you mine the limestone and then you burn it to make a product out of it but in order to add value to it, we add further steps of processing. We work together with some of our customers and their research and development teams. One approach we have taken is the slaked limestone that is used for, for example, to clean the air during the burning of garbage so our direction is to focus on making the environment clean through our products in a very efficient and effective manner.

Another innovation we’ve introduced at our limestone burning facility is to channel the cleaned air which comes out as exhaust – which is very hot - into a greenhouse and we are now growing tropical fruit there so we can sell the fruit as a local product. We make star fruit and it's very sweet.

 

Could you talk to us more about compliance with environmental legislation and how you're moving towards carbon neutrality?

Originally, this town was known as ‘white town’ because of all the dust from the limestone. We have invested quite heavily to change the situation and be more environmentally friendly. When my father revitalized this limestone business, he went through this transitional period from causing pollution and health hazards to reducing pollution through several attempts and investments.

So, learning lessons from him, I am very much determined to pursue the safety of the public without causing any pollution, as well as securing the safety of our workers. Given our experience, I am determined that in Vietnam we will never cause any public health threats, nor have any labor safety issues.

 

In terms of adopting new technologies and industry 4.0, could you talk to us more about the role of automation and the use of robotics in mining?

In a way it’s very difficult to apply automation to mining but we are now focused on creating our own machines and devices for breaking up the limestone after mining it. It needs to be broken into pieces of roughly the same size. We wouldn’t be able to do this effectively by purchasing machinery off the shelf or customizing it with another company. What we need to do is focus on creating our own machinery, and especially in Vietnam where we are laying out this automated process there before we actually set the line.

 

Which do you see as the major industry that you are looking to cater to with your lime-derived products, and especially with your overseas operation in Vietnam?

Ordinarily we would cater to the steel making industry but, in Vietnam the steel industry is not prevalent yet. Furthermore, the limestone we mine in Vietnam is not applicable to steelmaking because when you burn it, it becomes powdery with the current calcination method. So in Vietnam we want to develop a technology where we can take Vietnamese limestone and burn it. We are focused on developing a new technology for quick lime, and we have an employee who is studying for a doctoral degree currently doing research on this at the University of Osaka.

 

Are there any particular unique lime based products that you would like to share with our readers? Something that your company has created that has a unique selling point and that you see as having great potential for the world if you could get it out there.

One item we’d like to highlight is the slaked lime that has a wide surface area and is used for purifying air in garbage burning facilities. Since it has a wider surface, it takes a lot less time to cleanse the air. Developing countries will be opening more garbage treatment facilities and incineration facilities in future so by introducing our slaked lime we would like to contribute to reducing pollution and improving the purity of the air in the region.

 

Are you looking for any foreign companies to work together with for the mining, metal or wood businesses to create new products that have a real presence on the world stage?

We actually are looking for a partner in Taiwan to collaborate with in terms of limestone. And we are now trying to start a partnership with a Swedish company in biodegradable plastics. It's my son's project, actually.

 

What are your plans for your Vietnamese operation? We know that you have the CAD business, the architectural business and of course the mining business. What are your goals for this operation?

In Vietnam, we plan to receive more orders on BIM (Building Information Modelling) with Vietnamese staff members. Our strategy is to enforce our BIM technology and techniques, as well as to focus more on the mid to low-income brackets and provide residences for that market.

The advantage of using BIM is that since it's three-dimensional, not 2D, you can actually visualize the project. Although you may not be an architectural expert, it allows you to identify potential problems or risks beforehand so this improves the production process. And we have the precious human resources of 350 people in Vietnam and they all have big potential so we want to use them so we can develop our business.

 

Moving forward, what strategy will you employ to further expand your business internationally? Would you be interested in joint ventures or merger and acquisitions? Perhaps another factory or sales office abroad? What would be your strategy?

First and foremost, it's important to hire people from the locality you are operating in and learn about the culture of that country. We recently hired an African employee from Senegal who graduated from the University of Ryukyus which is in Okinawa. We had a Chinese acquaintance who introduced him to us, so we are currently interested in going to Africa as well. Of course we also want to sell our products in Europe.

 

Let's imagine that we come back in 5-10 years from now and have this interview all over again. What would you like to tell us? What is your dream for this company and what goals would you like to accomplish in that time and of course, what legacy would you like to leave for the future generation?

My goal is to have more foreigners as co-executives. We actually have one Vietnamese lady who's the CAD center manager and she's now one of the executives of our company in Japan. Actually, I'm working on my last dream as a president which is to make a canteen that will provide soul food for all the overseas workers.

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