- Title: Japan's small firms look for solultions as owners age
- Date: 2nd October 2016
- Summary: TOKYO, JAPAN (RECENT) (REUTERS) EXTERIOR OF IWAI SEISAKUSHO IWAI SEISAKUSHO CEO, HITOSHI IWAI, WORKING COMPANY LOGO SIGN READING (Japanese): "IWAI SEISAKUSHO" VARIOUS OF IWAI PROCESSING IRON CYLINDERS MACHINE CUTTING IRON CYLINDERS IRON FLAKES IWAI WORKING ON THE MACHINE IRON CYLINDERS AFTER PROCESSING (SOUNDBITE)(Japanese) IWAI SEISAKUSHO CEO, HITOSHI IWAI, SAYING: "It was futile to expand the factory with high interest loans. We (small factories in Ota Ward) realized that we would be able to create high quality products by specialising in our own strong points and all work together." VARIOUS OF IWAI MEASURING DEPTH TO CUT CYLINDER IWAI WORKING IWAI CUTTING CYLINDER (SOUNDBITE)(Japanese) CEO OF IWAI SEISAKUSHO, HITOSHI IWAI, SAYING: "If your heir is unqualified and inexperienced, you cannot ask them to take over your company. If highly-skilled peers inherit your business, they would be happy as well and your business won't disappear." MACHINE CUTTING CYLINDER VARIOUS OF IWAI MANIPULATING PROCESSING MACHINE LEADER OF OTA INDUSTRY ASSOCIATION, TOSHIAKI FUNAKUBO, TALKING TO REPORTER HANDS OF FUNAKUBO (SOUNDBITE)(Japanese) LEADER OF OTA INDUSTRY ASSOCIATION, TOSHIAKI FUNAKUBO, SAYING: "It is fine for those sub-contractors that sell their unique products to big companies. However, companies that sell products whose prices are competitive cannot survive in this industry. Firms should be running a business where they have one irreplaceable skill." TOKYO, JAPAN (RECENT) (REUTERS) EXTERIOR OF KITAJIMA SHIBORI SEISAKUSHO COMPANY SIGN READING (Japanese): "KITAJIMA SHIBORI SEISAKUSHO CO." STAFF SETTING METAL PLATE IN LEATHER STAFF WORKING ON METAL SPINNER METAL SPINNING FACE OF STAFF METAL SPINNING PRODUCT STAFF WORKING (SOUNDBITE)(Japanese) CEO OF KITAJIMA SHIBORI SEISAKUSHO CO., TAKAHIRO KITAJIMA, SAYING: "Although we produce specific products, our business is still facing a hard time. The number of our orders has decreased to a third especially since the collapse of Lehman Brothers." COMPANY NAME ON KITAJIMA'S JACKET READING (Japanese): "KITAJIMA SHIBORI SEISAKUSHO CO." (SOUNDBITE)(Japanese) CEO OF KITAJIMA SHIBORI SEISAKUSHO CO., TAKAHIRO KITAJIMA, SAYING: "There will always be firms that will take the place of one's business if you close down. We craftsmen always think that if others can do it, we can do it too. We've seen that here -- where we've been asked to take up a job that had been done by someone who'd gone bust." INTERIOR OF FACTORY STAFF TEACHING YOUNGER STAFF TO FORM METAL METAL BEING FORMED STAFF FORMING METAL STAFF WORKING INTERIOR OF FACTORY STAFF TALKING
- Embargoed: 17th October 2016 09:45
- Keywords: Japan aging population small firms
- Location: TOKYO, JAPAN
- City: TOKYO, JAPAN
- Country: Japan
- Topics: Society/Social Issues
- Reuters ID: LVA00152G9U11
- Aspect Ratio: 16:9
- Story Text:Eighty-year old Hitoshi Iwai works alone in his factory in the Ota ward of Tokyo, once an area bustling with small-scale factories considered the foundations of Japan's post-war industrial strength.
He's been in the business for 40 years, producing iron cylinders of various sizes that are used in everything from bullet trains to nuclear plants.
But factories such as his are dying out.
Factories of four or less employees are down by one-third since the heydays of the 1980s and the average age of their owners at an all time high of 59.2 and on the rise.
With two-thirds of factory owners without successors, the future for industrial townships like this one looks bleak.
However Iwai sees little point in worrying.
"It was futile to expand the factory with high interest loans. We (small factories in Ota Ward) realized that we would be able to produce high quality products by specialising in our own strong points and all work together," he said.
Much of the drop in small companies in the neighbourhood is blamed on big companies shifting from domestic to overseas sub-contractors capable of producing the same products for a cheaper price.
The head of the Ota Industry Association Toshiaki Funakubo says the only way for small factories in Japan to survive now is to specialise.
Funakubo says the value of shipments out of factories from Ota ward have fallen to a quarter of its value of 1.5 trillion yen ($14.8 billion) from a decade ago.
Prime Minister Shinzo Abe has vowed to help business startups, in his bid to regenerate industries as part of his efforts to revive Japan's moribund economy.
But very few small firm owners, even those with specialised skills, feel much of the benefits of the government's economic policies termed 'Abenomics'.
"Although we produce specific products, our business is still facing a hard time. The number of our orders has decreased to a third especially since the collapse of Lehman Brothers," said Takahiro Kitajima, CEO of Kitajima Shibori Seisakusho Co.
Kitajima employs 20 people to produce a wide range of metal products, from a tiny part of a semiconductor device, to big ones to be used in nose cones of rockets and satellite dishes.
The company, begun by his father in 1942, is known for its skill in metal spinning that can't be done by machine.
Kitajima is emphasizing the aspect of being in a niche industry, and that gives him optimism.
Many young people have joined his factory in order to gain precious skills that will help them survive the tough times ahead.
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