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Utilizing Technical Strengths and Many Years of Experience to Rebuild with Focus on Manufacturing [Sanwa Tesco]

Secret to Robustness
  • Focusing Managerial Resources on Manufacturing.
  • Successfully Changed the Perception of the Company as a Failed Company.
  • Advancing into New Growth Fields Utilizing Core Business.

Sanwa Tesco President Tetsuji Kitayama is constantly asking himself, "To what extent can we meet the needs of users?" Sanwa Tesco specializes in diesel engine base plates for ships, pressure vessels for various types of plants, boilers, heat exchangers, aircraft and nuclear power equipment parts, and other large structural components. Supporting the company is the advanced technical skills of its skilled workmen. The experience and that cannot be achieved merely through operations in accordance with technical capability to produce highly difficult products that require both wisdom and drawings is what makes up the backbone of Sanwa Tesco.

Painted the Walls White and Tripled the Fluorescent Lights

Sanwa Tesco was founded many years ago in 1918, but even though it possessed advanced technology, it failed to diversify its business, and in 2001, the company went bankrupt. From there, the company filed for court protection under the Civil Rehabilitation Act and then engaged in efforts to rebuild itself. In 2003, President Kitayama (now the president of Sanwa Tesco) of Puequ K.K. (Fukuyama City, Hiroshima Prefecture), a company that sells environmental equipment, took over. His first challenge was to brighten the company, which was enveloped in a gloomy atmosphere. According to President Kitayama, "New ideas can't be generated in darkness," so he painted the interior walls white, and tripled the number of fluorescent lamps.
Using the failure to diversify as a lesson, the company decided to concentrate its management resources on the production of goods, which is its main business. It focused on the advanced welding and machining technologies that it had accumulated over many years and engaged in efforts to improve productivity. First, the manufacturing of "Naiad" fire extinguishers that don't require an electric power supply was transferred to Sanwa Tesco. Before that, the fire extinguishers had been designed by Puequ, who then outsourced the production. A synergistic effect was created by combining Puequ's design capabilities with Sanwa Tesco's advanced technical capabilities, and this made it possible to output higher precision products at a lower cost. Annual sales totaled 150 million yen, and even now, sales are growing each year.
President Kitayama also created goal achievement charts by customer and by department, and posted those charts within the company to increase the motivation of employees to achieve those goals. The company also "visualized" the progress status of its production processes, and advanced with efforts to share information within the company. The company also proactively incorporated opinions from employees regarding cost reduction measures and such, and a system that enabled good ideas to be promptly put into effect was built. As a result of these types of efforts, the number of orders that the company received for diesel engine base plates, which is its main business, increased, the company's earning capacity improved, and in just a short amount of time, the company successfully returned to operating in the black.

Weathered the Recession Using Technical Capabilities

Diesel engine base plates, which are the company's main product, are a key component that supports the engines of ships, and they require advanced technology for welding large structural components.
Sanwa Tesco specializes in an operation called multi-layer fill in which welding is done 40 to 50 times on a thick plate with a thickness of around 100mm. With the multi-layer fill technique, even a single defect can render a product defective. However, with Sanwa Tesco's advanced welding technology that it has accumulated over many years, the number of orders it receives has increased. In addition to this advanced technical capability, the company is located near a port that is suited for transporting heavy equipment, and thus the company's domestic share is top class. Even during the global recession of 2008, Sanwa Tesco was able to survive due to its advanced technical capabilities. In addition, in order to support the increase in orders, the company invested a total of 250 million yen in equipment over a period of two years from 2007 to 2008.

Began Participating in Series of New Business Areas Including Aircraft and Heat Exchangers

President Kitayama explained, "Shipbuilding related business always comes with business highs and lows. Therefore, when business results are on an upward trend, that is when we must develop new pillars of business." For that reason, the company advanced into the aircraft industry by capitalizing on its technology and expertise. In fiscal year 2006, Sanwa Tesco began fabricating "shipping fixtures" that provide support from within when aircraft fuselages are disassembled and transported. Fuselages expand and contract with changes in air temperature, and thus to ensure that the fuselages are not damaged during transport by ship, shipping fixtures must be fabricated of aluminum with careful attention to details. Sanwa Tesco is able to achieve this because of its many years of experience and its advanced technology.
The company has one more new department. Right now, the company is focusing most of its efforts on "plate & shell heat exchangers," and as part of this effort, it formed an exclusivity contract for production and sales in Japan with Finland's Vertellus. Vertellus' heat exchangers are used in a wide range of fields including in the energy and chemical fields and in refrigeration equipment, and since the product launch in 1990, the company has delivered over 40,000 units worldwide. In the past, only multi-tubular heat exchangers with numerous heat exchanger tubes could be used in high temperature, high pressure conditions, but now use of plate and shell heat exchangers is possible, and this contributed to the company's performance.
President Kitayama eagerly explained, "Our annual sales our now around 100 million yen, but eventually we'll increase this to 500 million yen as we foster heat exchangers as one of our business pillars."

Plate & shell heat exchangers

Plate & shell heat exchangers

One Point: Key Point is Foreign Market

Expanding the Number of Orders Received in New Fields is Necessary

Sanwa Tesco has overcome numerous difficulties by utilizing its unique technologies and making equipment investments with an eye on the future. At the time that Sanwa Tesco failed, Puequ was a fabrication-less manufacturer, but President Kitayama decided, "We need a manufacturing division in order to reduce costs and improve quality." While morale in the company had declined, President Kitayama persistently endeavored to understand the employees and then implemented the necessary policies with a sense of urgency. This forward looking attitude exhibited by Kitayama is leading to the strengths of Sanwa Tesco.

Company Data

President:Tetsuji Kitayama

President:Tetsuji Kitayama

Company name Sanwa Tesco Inc.
President Tetsuji Kitayama
Industry Type Manufacturing and sales of diesel engine base plates for ships, boilers, etc.
Address 4-11-67 Asahicho, Takamatsu City, Kagawa Prefecture
Phone 087-821-4431

Printing day:December 26, 2013

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