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Vibrant SMEs of JAPAN

Sustainable Growth by Deepening Core Business While Entering New Fields [Matsumoto Iron Works]

Secret to Robustness
  • Proven record in support for papermaking industry, and development in new sectors.
  • Top managers with ability to make good decisions.
  • Relationships of trust built up with customers and suppliers.

Matsumoto Iron Works is located in Tomakomai, a papermaking town. President Hiromasa Matsumoto is the third generation of his family to run the company. Matsumoto Iron Works was founded by his grandfather in 1948, and since then, it has supported Japan's papermaking industry by providing equipment. However, since the 1980s, the demand for paper has declined. If Matsumoto Iron Works had restricted itself to the papermaking sector, it might have ceased to exist. But even now, the company continues to grow, because: "We've utilized the technology and know-how we've developed in the papermaking sector to expand the scope and nature of our work" (President Matsumoto).

The heart of a papermaking plant is its paper machine. This is a giant facility like a building, 230 m long, 10 m wide, and 3-4 stories high. Matsumoto Iron Works started out by installing such machines. President Matsumoto's grandfather originally worked for a papermaking company, so he knew all about papermaking equipment. He started the business because, "At that time, no companies specialized in installing paper machines" (Matsumoto). No matter how well a paper machine performs, it can't display that performance if it isn't installed right. The installation of paper machines is a vital task that affects the quality of paper.

70% share of Japanese market for paper machine installation

Having succeeded in installing its first paper machine after great effort, the company built up a record with its second and third installations. In the process, it attracted a flood of orders from paper plants throughout Japan. To date, Matsumoto Iron Works has installed about 200 paper machines, gaining a 70% share of the Japanese market. The company also has maintenance centers in 11 papermaking districts, which constitute its business infrastructure.

If demand for paper had continued to increase, the company could have kept growing through that alone. In the 1980s, however, it was impacted by a slump in paper demand and the increasing size of papermaking facilities, which started to reduce the amount of installation and maintenance work. President Matsumoto, who joined the company in the 1970s and became its third President in 1988, steered a course toward growth in other sectors. Accordingly, Matsumoto Iron Works began to do manufacturing as well as installation and maintenance. Such new business was made possible by the relationships of trust the company had built up with paper machine manufacturers.

First of all, the company gradually began to make the parts it needed for maintenance. As it acquired more machine tools for making parts, customers started asking it to make paper machine components, too. In turn, that led to orders for machinery used in other sectors. President Matsumoto looks back: "We benefited from having good connections." To date, the company has been involved with machines for cleaning aluminum casting automotive parts, equipment for treating industrial waste, and boarding ramps for aircraft and ferries. It has also been commissioned to develop and manufacture retractable, movable seating for the Sapporo Dome. Regarding the cleaning machines for automotive parts, President Matsumoto says: "We made ones that were stronger than necessary. Our customers have taught us that it's important to make optimal things at appropriate cost."

The company's maintenance centers throughout Japan also function as sales centers for sectors other than papermaking. Products related to papermaking account for 60% of revenue. President Matsumoto emphasizes that "Papermaking products will continue to be our mainstay," but he thinks the ideal balance between papermaking and other sectors would be 50:50. Demand for paper machine maintenance is shrinking. Accordingly, five years ago, Matsumoto Iron Works acquired a large facility for repairing rolls, a key component of paper machines, from a manufacturer of paper machines. As a result, the company now receives roll repair orders from overseas, too.

Increasing employee motivation by tackling automotive components

While reinforcing its maintenance arrangements, the company intends to expand its development and manufacturing of original products. Says President Matsumoto: "Manufacturers dream of making their own products. To boost employees' motivation, I'd like us to make things that are more conspicuous to people." Another field the company is considering as a challenge is automotive parts manufacturing. Until now, Matsumoto Iron Works has made large items to order, but if it succeeds with automotive parts, this will be its first mass-production sector.

Incidentally, the company has already introduced the Toyota kaizen system, but it aims to "heighten employees' cost-consciousness even further" (President Matsumoto). For the time being, the company is likely to continue in the direction President Matsumoto has set - concentrating on manufacturing and factory-floor support for customers, and broadening its business scope, while keeping the papermaking sector as its mainstay.

Large facility for repairing rolls

Large facility for repairing rolls


An adaptable group of engineers

Matsumoto Iron Works encourages employees to acquire many skills; it has built up a highly adaptable group of engineers. This is the driving force behind the company's expansion into new fields. Although staff are assigned to teams as necessary for the papermaking and other sectors, they can handle any kind of work adaptably. Papermaking machine maintenance can be planned to some extent, but for installation, the necessary people have to be assigned for a fixed time. If employees can do anything, they can always be deployed efficiently, whether or not an installation is in progress. This leads employees to keep an eye out for new business, and creates a culture of solidarity within the company.

Company Data

President: Hiromasa Matsumoto

President: Akio Matsumoto

Company name Matsumoto Iron Works, Inc.
President Hiromasa Matsumoto
Industry Type Design, manufacture, installation, and maintenance of industrial machinery
Address 28-1 Harumi-cho, Tomakomai City, Hokkaido, Japan
Phone 0144-55-1155

Printing day:August 7, 2014

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