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Developing Original Materials for Industrial Rubber [Yamato Chemical]

Secret to Robustness
  • Developing original materials in-house.
  • Can quickly support the development of all types of prototypes.
  • Dispersing production in the three nations of Japan, Thailand, and Vietnam.

Yamato Chemical was founded in 1972, and the company primarily manufactures and distributes rubber products for industrial use. In order to support needs in a broad range of industries including the automotive and electronics industries, Yamato Chemical began researching and developing materials in-house roughly 30 years ago, and over the years, the company has accumulated over 5,000 different recipes (formulations). President Hidehiro Nakamura, who took over the business in 2013 from his father, who is the founder and now the current chairman, is focusing the company’s strengths on improving development efficiency and expanding orders both in Japan and overseas.

Reduced the Prototype Development Time Period

Industrial rubber products are used in every type of industry, and each manufacturer requires a variety of different properties such as durability and heat resistance. Moreover, in recent years, compliance with environmental regulations including Europe’s Restriction of Hazardous Substances (RoHS) directive has become imperative. To achieve this, Yamato Chemical established an in-house engineering department, and has been developing its own original materials. The company often works with its customers, who are also manufacturers, to jointly develop unique products, and most recently, the company has even successfully cultivated new fields like the healthcare related field.
Furthermore, by accumulating material development related expertise, Yamato Chemical has been able to improve its speed and flexibility in prototype development. President Nakamura emphasized the company’s strengths and stated, “We can now complete developments that used to take us one year in just three to six months. The healthcare field has different requirements than those in the automotive and electronics fields, but we’re able to support those requirements because of the expertise that we’ve accumulated.” Moving forward, the company intends to organize and consolidate its recipe data and to improve development efficiency.
Armed with this type of material development capability, Yamato Chemical is also focusing its efforts on attracting customers overseas. In late 2013, the company newly established “Yamato Rubber Vietnam (YRV)” as a local corporation in Vietnam’s Hung Yen Province. There, the company introduced a total of 23 molding machines including 3 large vacuum compression molding machines with a mold clamping force of 250 tons, and is producing 2 million rubber parts per month for vehicles, industrial motors, and electrical products. A maximum of 40 molding machines can be installed at the plant, and thus the monthly production capacity can be increased to approximately 6 million parts. President Nakamura commented on the company’s move into Vietnam and explained, “Labor costs are rising in every nation. Therefore, rather than focusing on those costs, we decided to move into a region where there is a growing market.” Original materials developed in Japan are being utilized overseas as well, and the recipes are developed with flexibility so that the materials can be procured locally as well.

Dispersing Production Risks Using a Three Nation Organization

In addition to endeavoring to expand production capacity, another reason that Yamato Chemical advanced into Vietnam was to disperse risks by creating a three nation organization that also includes Japan and Thailand. The company moved into Thailand in 1999, and thus far production has been implemented at two plants in Thailand and at the company’s plant in Japan. However in recent years, the value of the yen has weakened and personnel costs in Thailand have surged, and as a result, revenue from Thailand’s Plant No. 1, which primarily exported product to Japan, has worsened. Therefore, in order to handle exchange rate fluctuations and ensure stable procurement of materials, Yamato Chemical recognized that it needed to build a balanced production system. By dividing goods from Thailand’s Plant No. 1 amongst the company’s other plants, the company has been able to rebuild its organization such that earnings are boosted at each location. The company also prepared production backup systems in Vietnam and Thailand, and solidified its supply system to ensure supply capabilities even in the event of a disaster.
In the company’s three year plan that begins with 2014, President Nakamura indicated that the company will “restore profitability on a single month basis to each plant in the first year, and then beginning the second year, we will launch full-scale efforts to expand sales.” Numerous automakers and electronics manufacturers have also established business locations in Thailand and Vietnam, so there is room to cultivate new customers from local companies in those nations. In 2013, Yamato Chemical positioned Thailand’s No. 2 Plant as an international procurement base, and the company is now working on strengthening its local procurement and cultivating processing companies as customers. By targeting an organization that allows each plant to reliably secure revenue, the company is increasing the overall business performance of the group, and within three years, the company intends to increase sales to 3.5 billion yen, an increase of 500 million yen over the current level.
The ideal corporate image targeted by President Nakamura is “a company that contributes to society with total cooperation amongst all employees even though the scale is small.” From the time that he was an executive director, President Nakamura has taken every opportunity to converse with the over 80 employees and has increased teamwork through this effort. As a result, “Our employees now take initiative on their own. A passionate management philosophy and the smiling faces of all our employees are the biggest driving forces.”

Factory in Vietnam constructed at 2013

Factory in Vietnam constructed at 2013

One Point: Key Point is Foreign Market

Continuing Production in Japan

When he newly assumed the position of president in July 2013, President Nakamura spoke about the company’s founder and mentioned that he is the “strong type”, and then he cheerfully commented on his own demeanor and stated, “I’m the type of person who is timid but I’m proactive when it comes to crushing concerns.” In order to support changes in the business environment, President Nakamura decided to move the company into Vietnam, but he also stated, “We are not going to halt production in Japan.” In fact, in 2013, Yamato Chemical used a subsidy to introduce molding machines, and through this and other efforts, the company is steadily advancing with production automation. According to Nakamura, “We are considering all types of possibilities” in Japan, which is the company’s last line of defense, and thus investments will likely continue in the future as well.

Company Data

President : Hiroyasu Koma

President : Hidehiro Nakamura

Company name Yamato Chemical Co.,Ltd.
President Hidehiro Nakamura
Industry Type Manufacturer of rubber products for industrial use
Address 1405-3 Kamiechi, Atsugi-shi, Kanagawa Prefecture, Japan
Phone 046-245-3871

Printing day:March 28, 2014

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