First established more than 80 years ago, Yamato Gokin now supplies more than 100 different copper alloys and is looking to expand its customer base around the world. The firm already counts Honda among its clients, and has the capacity to supply its products to an increasingly diverse range of industries.
Monozukuri is Japan’s famous international philosophy of manufacturing and it has become known throughout the world. Today responding to market demands requires quality, cost, delivery (QCD), and this QCD element has become critical to competing in a rapidly globalizing world. Your company is over 70 years old and you supply more than 100 different copper alloys. Could you give us your take on monozukuri and the advantages it gives your company as you compete internationally?
President Hagino: Firstly, the quality of regional Asian countries’ products is very different, especially in our field of special copper alloys. Sometimes Chinese companies are capable of making good performing products, but keeping that performance consistent is quite difficult for them. I feel that American and European high-level customers and users know the difference. Asian competitors sometimes are uneven and lack uniformity. For the Chinese, kaizen is a worker-only philosophy, with only the employees on the ground following continual improvement, whereas in Japan, kaizen is something that is done together. From bottom to top, continual improvement is very important to many Japanese firms. I think this mindset sets Japan apart from regional competing countries.
Our company will be celebrating its 82nd anniversary this year, and we have lived through three generations of executives. I have worked here for 24 years now, but to this day I continue to follow in my father’s and grandfather’s footsteps. That history is very powerful. There aren’t many Asian companies that are older than 30-50 years, so the fact that we are still standing strong after 82 years is a testament to the hard work and dedication of three generations of Yamato Gokin. 82 years also have the accompanying pool of knowledge and expertise, and I think we have a deep pool in that regard. That kind of knowledge and know-how is difficult to steal.
As you know, the population of Japan is in decline and is becoming a big threat to the monozukuri that has been developed by firms like yours over many decades now. An aging population and a declining fertility rate put Japan at under 100 million people by the year 2050. Your business uses copper as your main material and combines it with other metals to create much stronger and thermally conductive materials in forging and casting very labor-intensive processes, traditionally. How is your firm reacting to these demographic changes in terms of your business continuation plan (BCP) for labor? In terms of the domestic market, are you seeing a shrink in demand and is there a need to find new clients overseas?
President Hagino: Yes, that is exactly true, and ideally, I would like to introduce my special copper alloys to the world, and I’m not only talking about Western countries but also Asian countries too. Of course, different materials are needed in different markets. The population problem you mentioned is a very real threat in Japan, but we are also seeing this phenomenon occur in many nations across the world now. Our company only has a headcount of around 160 people, so as long as we have people around us who are interested in the company we will be able to continue hiring. This year we had 10 new employees joining our firm, both men and women and in fact, they started working for the firm on April 1st, 2023. We don’t promote ourselves using hiring websites, instead, we utilize several connections we have with high schools and universities. Professors have helped introduce us to good students, but when I say good students I don’t necessarily mean excellent scores, rather I’m talking about mindset and behaviour. Additionally, employees have suggested that Yamato Gokin might be an option for friends and family members who are looking for work. Domestically in Japan there is a big social problem where young people tend to drop out of working for a company after only 3 years, I think the statistics are around 30%. I think this is a case of misunderstandings and mismatches in expectations both ways. We have an internship program before employees work full time, and this means that we can establish mutual understanding before someone fully joins the company.
Natasha (International Sales Representative): As mentioned, we are looking to expand our customer base around the world, so to achieve that I think we are going to need to employ outside of Japan inside local markets. I think that our company can provide overseas workers with bright possibilities for their future. Currently, we have 10 new workers from overseas, and they possess high skills while also being very smart. They lack experience in manufacturing but that is why they are joining a company like ours, and they all have good minds for improvement. Not all of our foreign employees join the company with no experience in manufacturing, however, we make sure to conduct on-the-job (OTJ) training so that even if they are put into departments such as forging or sales they will get a robust understanding of the company and the products we make. By the time they have established themselves within the company structure, they will have a similar knowledge base to people who have studied all of this over a short period.
Natasha, when did you decide to join the company and what were some of the key lessons you learned from being here?
Natasha: I came through a similar process and was introduced to the company by a friend. When I came to Japan I came as an English teacher and my friend whom I taught with joined the company. When I was looking for more work my friend told me that Yamato Gokin was a really good company and the fact that she enjoyed the work she was doing which was translation and quality assurance. She told me to just do the internship and see how it fits. I joined because I found the work interesting and although I had no experience, I enjoyed learning new things. It was much different from what I studied in school so I decided that I wanted to work somewhere where the people and the work were amazing. Those were the key parts that led me to join. I feel that rather than utilizing job-hunting websites, connections create a stronger sense of being a team for me.
Your company is catering to Formula One (F1) car components, landing gears, and undersea cables, all very high-end use technology. Could you give us an anecdote on how you came to cater to these industries?
President Hagino: For the Formula One racing team, members of the Honda team approached us and they were anxious about a problem they were having regarding an engine component that was causing vehicles to retire during races. The part name we have developed is the connection rod, they need hard and tough rods with high thermal conductivity, and I think that is the theme of their program. The company as a whole has many experiences making all sorts of different alloys. Honda is aware however of the difficulties involved in what they are asking for and making components with those properties. We can design the composition of the alloy to be strong and tough, but the thermal conductivity comes from proper heat treatment and forging. We have to constantly adjust the ratio as more hard forging changes the right side and good heat treatment changes the vector of both the right side and the upside. Through this process, we were able to get past current materials so the Honda Racing team decided to run testing during the next race. It was very exciting for us and definitely was a motivating factor for our team. Every time we found new chemical compositions Honda Racing Team approached us and told us not to worry about the price. That kind of business is very rare and I can’t think of another company on the planet that doesn’t care about the price.
That kind of technology and know-how is not only for Formula One racing but also works wonders for the motors in subway trains in the Washington DC subway system. There are many examples of projects using our technology. At the end of the day, it comes down to a combination of heat treating and forging, and managing those ratios.
Just to speak a little more on the fusion energy project, we have been developing that product for over 15 years and have become very successful in making products for fusion reactors and many of the required components. We are still trying to do research in other industries, for applications such as powders and even 3D printing. We are constantly developing to keep up with the changing environment.
Looking at the future, is there a certain application or sector that you would like to expand more into?
President Hagino: Ideally we are looking at big global projects around the world. One example is that recently a few venture capital companies from Canada and the United States are working with fusion energy. Commonwealth Fusion Systems is a company that is heavily backed by Bill Gates. A similar company is General Fusion which is backed by Jeff Bezos. Additionally, Sam Altman is involved with a similar company called Helion Fusion. To be backed by such rich people means they have seemingly endless funds for their research, but with all of that money, they don’t have enough knowledge of the special materials. They also don’t know our company name although we did win a bid for the ITER project, a large multinational effort to build a fusion reactor in Europe. It actually took us years to successfully win the bid.
Of course, with an interview like this, I must show off some of the amazing projects and partnerships we have here at Yamato Gokin, but that isn’t to say they were handed to us.
Success has not been an easy story, and our research started around 2006. Now we have 17 years of experience with these kinds of research projects. The reason why we were able to succeed is that we kept investing small amounts continuously and with this dedication, we were able to reach the results we wanted.
To give you a bit more background in this development, the request was initially sent to Mitsubishi Material, but I imagine that the feasibility of fusion, the considerable time it would take, and the difficulty of producing such materials with the high required properties, even though they are used in small quantities, led Mitsubishi Materials to abandon the continuation of the research. They then kindly introduced us to their place.
Yamato Gokin can continue this effort for a long time, and with this mentality, we have been able to make big achievements in realizing new material developments.
The automotive industry is experiencing a major transition period right now, and the suggestion by former prime minister Suga is that by 2035 all vehicles must be EV or hybrid based. With this transition, we are seeing the adoption of new and lighter materials like aluminium, magnesium, and carbon fiber-reinforced polymers (CFRP). Your company has created one material in particular that caught our attention called the NC Alloy for its qualities. Could you tell us more about that material and how you are adapting your business to the industry transition?
President Hagino: That material is very interesting not only because it draws well for welding, but also because it is good for molds used in plastic injection. There is a high potential for the material, and not only could it be used in manufacturing parts but also the die casts themselves. Honda Racing team chose and used this material in their Formula One racing car also. It possesses anti-wearing properties and high conductivity.
Japan’s automotive industry has the keiretsu system, which is very vertically aligned, but with the new transition happening we are going to see more horizontal-based operations and cars will become easier to produce because essentially they will become a battery and four-wheels. There are already lots of new start-ups in China, India, Europe, and the US. Are you interested in appealing to these start-ups and if you are, how will you appeal to them?
President Hagino: We can show options to the customers, and our company has many options and many strengths. Almost all automakers these days are researching flying cars and at that time weight was a very important factor. Those flying cars have continually improved their sensors, which means way fewer accidents. There isn’t always a need for high mechanical properties, so we feel that in these cases we need to switch our mindset from more high-end to perhaps lower spec and lower weight.
Your undersea cable business sparked our interest during our research, and with the increasing use of 5G and communications, these undersea cables will be critical moving forward. Could you tell us how your technology is so suited to this particular industry need?
President Hagino: The deep sea has high water pressure so companies that operate cabling under the ocean need strong materials. Additionally, you have to consider that seawater makes many materials corrode. Copper alloys are unique in the fact that corrosion only appears on the surface. Inside the material there is no corrosion and the alloy will maintain its hardness and strength. Those companies in particular selected beryllium copper, the copper alloy with the highest strength in the market. That industry, in particular, is known for being conservative, and will not change the material for 25 years. They want guarantees that the material will retain its strength over a long period.
Another aspect we are focusing on that is quite interesting is hydrogen. I don’t know if you have ever heard of hydrogen embrittlement. Basically, hydrogen has a habit of attacking certain metals and alloys causing them to become brittle and break. Obviously, for safety reasons, this is a huge concern. Imagine in a high-pressure hydrogen environment such as transporting hydrogen fuel, stainless steel will become extremely brittle in those cases. Copper alloys are very strong in this case, and are resistant to hydrogen embrittlement.
Dr. Hisao Matsunaga of Kyushu University and his colleagues published a paper finding that copper alloys showed no hydrogen-induced degradation of strength or ductility and, surprisingly, there was also no degradation of fatigue resistance or fracture toughness values in high-pressure gaseous hydrogen. Specifically, it was revealed that the material demonstrated excellent hydrogen embrittlement resistance, despite having such a high tensile strength. However, despite this, only proven materials are permitted for use under High-Pressure Gas Safety Act. There are huge obstacles to the utilization of our materials domestically in hydrogen gas stations. During the Showa era, there was a law enacted called the high-pressure gas safety law, and this law stipulates what kind of material should be used in the interior of the facilities under a high-pressure gas atmosphere.
Safety is very important, so it takes a long time to test and prove safety, get certified as proven materials and then finally get people to use them.
In parallel with this, we need to go overseas and be recognized for our alloy properties, then return to the Japanese market with a successful record. The hope is that Japanese companies will be asking why they aren’t using such great materials as ours. We are eager and excited to show our materials to the industry for use in hydrogen and fusion energy.
Yamato Gokin is present in one location overseas, moving forward, which countries or regions, in particular, will you be focusing on to grow your business internationally?
President Hagino: That is a good question because we are always watching the world, not only 1 or 2 countries. Today we are seeing good growth in Asia and Europe, but the American market is sometimes difficult because we have no subsidiaries or branches in the United States. I understand that many researchers and people are going to the US, and it is a big and fair market there. I hope that in the near future, we can explore possibilities in that market.
The plan is to continue to promote our products in the US and Canadian markets, especially regarding special alloys and cutting-edge technologies such as fusion and hydrogen energy. Currently, we are exporting to the US our materials for die casting, and compared to local companies I think we have higher technical capabilities. We have learned that uniformity is high, and regardless of where the production is, customers will buy it. For that reason, we see huge future potential in the US market.
Natasha: Recently we have even gone on to supply industries such as semiconductors and aerospace in the US for their thruster pads. So even though we do have a foot in the door in the US we want to expand even further.
Are you planning on opening a base there at some point?
President Hagino: I am thinking about it but right now we are not sure whether that will be an East Coast or West Coast base. Hopefully, at that time, Natasha will be able to help with things. Rockets used in the US need our copper alloys. Honestly, the applications are endless, from rockets all the way to saxophones.
Last year we actually had all employees partake in a survey that discussed the direction the company had been in the past and the direction we are heading in the future. In fact, we also hold a musical concert for our employees and their families once a year, but because of COVID-19, we had to stop these. This year we hope to start up that tradition once again. After the concert, there is also a BBQ party. At that party, I will often hear ideas from employees as well as complaints. That feedback is very important to me.
Natasha: President Hagino is very kind in the fact that he organizes something for all of the employees' birthdays, and in the past, he would personally go out and purchase a gift for every single employee. Now he has decided to do lunch parties each month to celebrate everyone’s birthdays during the month. It is also a great way of receiving informal feedback from the employees.
Imagine that we come back in 8 years for your company’s 90th anniversary and have this interview all over again. Are there any goals or dreams that you hope to achieve by the time we come back for that new interview?
President Hagino: Yes, definitely. I hope by that time one of my sons will have joined the company. Initially, my goal for the 90th anniversary was to have a third-generation member of the family join the company, however, that has been achieved this year. Now that my goal has been fulfilled my next would be overseas expansion. Hopefully, that expansion goes smoothly and we can discuss our successes when you come back for that new interview.
If we take it further into the future, 20-30 years, my ideal situation would be to hire more overseas employees and have their children then join the company from Europe, the United States, and Asia.
Natasha: I think as part of that overseas expansion president Hagino would like to have branches in as many countries as possible. That is another thing he is focused on.
President Hagino: Finally I would like Yamato Gokin to continue to provide solutions to ongoing issues or problems that are considered unsolvable. I think this will provide the correct reputation to continue to grow our company and brand.
Interview conducted by Paul Mannion & Antoine Azoulay
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