Interview with Toshifumi Ide, President, Marine Hydrotec Co., Ltd.
Tell us about your company.
We began as Uchida Marine Hydraulics Co., Ltd in December 1971, when Uchida Hydraulic Group spun off its marine vessels division into an independent company. In 2000, we changed our name to the current Marine Hydrotec Co., Ltd. Since the beginning, we have focused primarily on maintenance, and we now have branches and service centers in fishing ports in Nagasaki, Shimonoseki (Yamaguchi Pref.), Yaizu (Shizuoka Pref.), Choshi (Chiba Pref.) and Ishinomaki (Miyagi Pref.). Outside of Japan, we have a maintenance and sales agent in Busan, Korea, a joint venture in Qingdao, China, and a distributor in Dalian, China. Last year we added a maintenance factory to our existing sales in Kaohsiung, Taiwan. We employ about 150 people altogether.
Who are your customers?
In Japan, our customers include the shipowners of purse, dragnet and other seiners and those major general contractors engaged in seabed improvement work, ferry, tugboats and other kinds of dredging. We also successfully completed orders of the hydraulic power units for the Ministry of Defense’s supply ships. Most of our international customers are in Taiwan, but we also service customers in Korea and China. Recently, we have been approached by Kinoshita Fishing Net Mfg. Co., Ltd., who has a factory in Peru, so we are taking constructive steps toward expanding into Peru.
Also last year, China ranked first in the world in fish landings, followed by Indonesia, the United States, India and Peru. Japan only lands about one-third of the fish that China does. Not only does China have a large population, but its economy and technologies are still developing, so it remains a very attractive market.
Will your Chinese joint venture be involved in these efforts?
It doesn’t have the equipment in place yet, so it is only doing some basic assembly work. We have been sending engineers from Japan to supervise the operations. At present, we can meet demand by exporting from Japan, but that means we have to pay import duties. So, in terms of cost, we would like to put a fully self-contained production facility in place in Qingdao.
Your Japanese market share is 45%, while your foreign market share is 55%. How have you maintained such a stellar reputation both at home and abroad?
First and foremost, we have maintained our position through innovation. There used to be a manufacturer called Spain TH which was strong in Spain and America. We were a latecomer to the business. But sometime around 1978, we successfully changed the face of hydraulic systems in Japan. We took a series system that used one pump and series hydraulic circuits and switched to a more efficient parallel piping ring main system. This system can provide hydraulic power with just a standard winch. Conventional hydraulic circuits suffered lost pressure, but we were able to change to a design that could ensure output in excess of 90%, no matter how much you used it within hydraulic press’ capacity.
This was a major improvement akin to switching from series to parallel circuits in electrical equipment, so we secured a patent and became the first company to install such systems on fishing vessels. Not only was our system powerful and easy to use, it saved weight because we managed to reduce the number of required pipes. This meant fishing boats could devote more weight to fish and add more equipment in the space that our system saved them. In short, we killed two birds with one stone. The only shortfall is that it operates at such a high pressure that oil leaks will occur if the welds are not properly done. But as long as the welds are good, the system will last for 10 or even 20 years. Our reputation spread by word of mouth, and the impact of that has been significant. Another important factor is maintenance. We don’t just try to sell equipment, we also focus on providing excellent follow-up support, and this has helped us win the trust of our customers.
What is the standard maintenance cycle for your equipment?
We generally have to make repairs once every four to six years. If the system is used frequently, then we will have to make some minor adjustments after two years. Meanwhile, the bearings inside the units have to be swapped out every six, eight or 10 years. Some people choose to scrimp on maintenance costs by using systems until they break before replacing them, but if your equipment fails while you’re at sea, you can end up losing several tens of millions of yen. Since inexpensive, timely maintenance can help prevent such damages, we draw up a list of services we can offer each customer the next time they are in port. We are big proponents of preventative maintenance.
The reputation you earned from your patented oil hydraulic units and outstanding maintenance services put Marine Hydrotec on a path of rapid growth. What was your vision when you took over the helm from the previous president?
Greetings and gratitude are my two key concepts. At every morning meeting after I began, I stressed that I wanted to make the workplace more positive and open. A lot has changed just by repeating this message, and even our customers have noticed that our attitude has changed. Hospitality is crucial. I used to head the sales department, and I have continued to visit our customers regularly even after becoming president. Meeting and greeting customers in person is my basic philosophy.
What philosophy do you want to convey to your employees?
Awareness and courtesy. These two ideas are the foundation for everything else. If you can’t properly greet someone, if you can’t say ‘good morning’ and ‘thank you’ in a strong voice, you cannot connect with customers. No matter what you want to say, if you don’t have impact, people will forget you. If you want to have an impact on someone, you must do your homework. You have to know what they want. I constantly tell my employees that you cannot get through to the customers if you don’t work with a vision in mind.
What’s in store for the future?
We are more or less done outfitting our Japanese maintenance plants, so the next thing to think about is our aging headquarters building. As I mentioned earlier, we also need to consider our approach to entering the Peruvian market.
Do you have any plans to list the company on the stock exchange?
We are exploring this option very carefully. Not only does it cost money to list, but there is a risk that the share price could become extremely high. Standard and Poor’s upped our credit rating from AA to AAA last year, and it is hard work just trying to maintain that rating.
This report was written by Nick Szasz, publisher of Fukuoka Now, on behalf of The Kyushu Advantage.