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Vibrant SMEs of JAPAN

Leveraging Low Tech with Ideas [Tsukasa Rubber & Electric Materials]

Secret to Robustness
  • Revenue doubled over approximately 20-year period, capable second-generation company president.
  • Development of highly creative products while sticking to low-tech.
  • Acquisition of small and medium manufacturers, revived as contractors.

Expansion of elevator business

Tsukasa Rubber & Electric Materials engages in the sales of rubber and resin products as well as in metal machining and assembly. The company's strength is its business in elevator functional components. In addition to holding a patent on a limit switch that controls the motion of an elevator car carrying people or cargo and that decreases and stops speed, the company is also developing door opening and closing equipment and smoke-blocking construction that prevents entry of smoke during a fire. In 2012, the company entered the business of manufacturing and selling elevator design components. It acquired a division of Ishimori Company (located in Kawasaki-ku, Kawasaki City), and took over its Shibayama Factory (in Shibayama City, Chiba Prefecture). The company then established Tsukasa Kan-ei Factory Co. as a manufacturing subsidiary with the goal of boosting sales by doing business in combination with the existing elevator business.

Elevator related products account for 30% of overall sales, while the rest is spread among automotive, medical, and other products. The company has built a business framework that is resistant to economic downturns by not relying too heavily on a single business partner or industry.

Tsukasa Rubber & Electric Materials was founded in 1955 as a trading firm of industrial rubber products. The company subsequently began to manufacture metal products, but it remained a trading firm as 70% of revenue originated from sales and 30% from manufacturing. It was under the company’s second and current president, Tetsuhiro Koizumi, that it bolstered its elevator business and shifted toward a manufacturing path. Koizumi stresses, "We have built up expertise and skills in sales, manufacturing, technology development, our ability to improve, procurement, and cost competitiveness that are competitive with large corporations."

V-shaped Recovery due to Sales Ability

Tetsuhiro Koizumi joined Tsukasa Rubber & Electric Materials, his family’s business, in 1994. It was a difficult time during the post-bubble economic slowdown when major companies Tsukasa did business with began moving toward internal production. Company revenue that was 3 billion yen dropped below 2.5 billion yen.

After joining the company, he started on his mission to bring about a V-shaped recovery in revenue by strengthening the company’s sales ability. The company actively hired salespeople and provided person-to-person instruction, drilling into them idea-based and technology-based sales techniques. In addition, the company became active exhibitors at exhibitions and also began “mini-exhibitions” in which it would directly present exhibitions at customers’ offices. The five salespeople who joined the company at that time are now company executives or sales directors.

Next, the company began bolstering its manufacturing capability. At the time, elevator operations accounted for less than a few percent of total sales, but the company took notice that this was a growth market where opportunity existed for supplying products for building remodeling and new construction. Tsukasa spent 200 million yen in metal machining to expand its sheet metal products for elevators. This investment paid off as sales rebounded to nearly 3 billion yen. The company also set about boosting its strength in development such as by luring engineers from elevator manufacturers. One of the resulting accomplishments was a limit switch that still remains one of the company’s main products. Compared to previously large limit switches that were made of metal, Tsukasa made it smaller by constructing it of resin, which led to the company acquiring a patent.

This experience became a turning point. President Koizumi realized, “Even with a simple configuration, the performance is good. It may be low tech, but one good idea can be made into a business.” Ideas and creativity are the strength behind Tsukasa’s development ability.

Particular to Manufacturing in Japan

After being appointed company president in April 2008, Koizumi established a new materials division and improved materials management, procurement management, and purchasing cost management. This string of changes was effective, which was reflected in the sales projection for the fiscal year ending March 2014 of approximately 6 billion yen, twice the amount it was 20 years earlier.

Moving forward, the company wants its management expertise to contribute toward stimulation of the domestic manufacturing industry. The factory it acquired in 2012 returned to profitability in its first year. Revenue that had been 800 million yen at the time of ownership transfer is projected to be approximately 1.5 billion yen just three years later. Koizumi says, "We are acquiring companies having difficulties with the economic downturn but that are strong. By using our expertise, both sides can achieve greater success. Our fundamental approach is to guarantee the happiness of the other company's employees."

Although Tsukasa’s overseas sales account for less than 1% of its total sales, the company is planning to begin sales of elevator components in China, which is responsible for half of global elevator demand. The company is currently making preparations to open a Chinese office. However Tsukasa will not manufacture overseas. “It is our mission to use our know-how to rescue small and medium-sized businesses that are strong but having financial problems. We want to stimulate Japanese manufacturing,” says Koizumi passionately.

Industrial rubber products and machined sheet metal products

Industrial rubber products and machined sheet metal products

One Point: Key Point is Foreign Market

Overwhelming Vitality

Koizumi is 46 years old. Since he was a little child he has been dexterous with his hands and full of ideas. He takes pride in his vitality that he claims is "second to nobody" as he travels about to factories nationwide as well as to China and Southeast Asia. Koizumi's own vitality and talent can be considered the biggest secret behind the company's health.

Company Data

President: Tetsuhiro Koizumi

Tetsuhiro Koizumi

President Tetsuhiro Koizumi
Industry Type Manufacture and sales of industrial rubber products and machined sheet metal products
Address 19-21, Tsukagoshi 2-chome, Warabi-shi, Saitama Prefecture, Japan
Phone 048-445-7532

Printing day:April 8, 2014

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