The 20th century was a time of rapid technological advances, but these advances came at a price; excessive use of energy and depletion of resources. But as the 21st century unfolds, there has been a paradigm shift with respect to issues such as global warming and the increasing world population. Resources are limited, and sustainability must be at the heart of any future developments. These issues, and continued globalization, transcend borders, creating opportunities for Torishima to rise to the challenge by providing high quality, energy-efficient products.
The world’s population now exceeds 7 billion. Demand for water and electricity is rising, particularly in developing countries, and pumps play a crucial role in meeting that demand. It is an undeniable irony that while pumps are essential for providing water and electricity, they themselves require an enormous amount of power to function; they account for about 30% of the electricity consumed in Japan. So, any energy-efficiency gains in our pumps is a gain for all of society. The energy consumed by pumps necessitates the burning of fossil fuels to create energy, which of course releases CO2 into the atmosphere. If we are to reduce these CO2 emissions and thus curb global warming, we need to achieve greater energy efficiency. Rallying around Torishima’s slogan of “Save the world with pumps,” we have dedicated ourselves to research and development, utilizing state-of-the-art analysis technologies and testing equipment to provide even more highly efficient pumps. But we don’t stop there. At Torishima, we use the technologies we have developed in large, high-pressure pumps, which require high efficiency and safety, and apply these to small pumps known as standard pumps. And through an initiative we call “Go green with pumps,” we have been doing more than any other manufacturer to help the public understand how pumps can contribute to energy efficiency.
Our pumps provide a safety net for people in times of natural disasters. Urbanization is leading to decreased water-retention capacity, and increasingly frequent torrential rains are sending massive amounts of rainwater into drainage facilities, requiring that municipalities convert to or newly install high-volume pumps. However, if pumping volume is increased without changing the shape and dimensions of existing pump sumps, the water flow within the sump will increase, causing vortices that can damage the pumps. Traditionally, concrete anti-vortex baffles have been used to prevent these vortices. Installing such baffles, however, is expensive and time-consuming, not to mention dangerous. Torishima has made such concrete anti-vortex baffles obsolete by developing pumps with two patented technologies—double-suction bellmouths and vortex-preventing rings—that allow the pumps themselves to prevent vortices. Pumps with these highly touted technologies have been installed on facilities in municipalities all over Japan.
Recent years have brought torrential rains that in some cases totally submerge pumping stations. In response, we developed a patented pump with a submersible motor that can operate even if the pump room is flooded. Normally, motors are installed above ground-level to avoid the risk of becoming submerged, requiring auxiliary equipment such as an intermediate shaft between the motor and the pump. Torishima’s new pump is capable of operating under water. It also has its equipment consolidated in one room, which simplifies the facility design and reduces maintenance costs. The lack of an intermediate shaft makes it highly earthquake-resistant.
Over the past five years, facilities in Japan have been steadily installing Torishima’s double-suction bellmouths, vortex-preventing rings, and pumps with submersible motors—prime examples of how Torishima’s pump technology is keeping things running smoothly.
In Japan, investment in public infrastructure peaked around 1997 but dropped to about one-third of this in 2010. Since then, however, there has been an increase in the upgrading of aging infrastructure, and Torishima has been successfully tapping into this new area of demand. This trend is not just limited to Japan: we foresee increasing demand in the industrialized countries of Europe, North America, and other world regions.
We therefore believe worldwide pump demand will show a steady rise in the long term. At Torishima, it is our mission to use our technologies, along with our proven track record and the trust we have built up around the world, to provide high-efficiency pumps that offer society energy efficiency, safety, and reliability. We will continue to dedicate ourselves to meeting society’s increasingly sophisticated and diverse needs.
In order to strengthen our internal systems, and build a solid foundation as a global company, for three years starting in fiscal 2013 we made reforming manufacturing processes a top priority. To achieve this, in fiscal 2013 we upgraded our core systems to secure integrated operational processes, covering everything from receiving orders and design to procurement, production, installation, and after-sales service. In fiscal 2014, we embarked on standardization of pump design.
Our entire company pulled together to carry out these plans, and as of fiscal 2016 we had achieved certain targets in the reform of manufacturing processes and we had streamlined our order-receiving policy to secure profits by focusing on quality rather than quantity. The end result was a return to higher levels of profitability. However, the long-term drop in crude oil prices led to a slump in overseas demand for construction of new plants, such as desalination plants and power plants. As a result, competition with rivals intensified and orders overseas were hard to come by. Fortunately, demand was strong in Japan for thermal power plant construction and infrastructure upgrading, and we were able to end fiscal 2016 with increased sales and profits for our worldwide operations as a whole. Considering this situation, however, we are well aware that we must improve our company’s fundamental strengths so that we can withstand external environmental factors such as crude oil prices and currency fluctuations.
One way to improve our fundamental strengths is to build an optimal global production system that will make us immune to currency fluctuations. We are expanding product lineups at our existing plants in China and Indonesia. In addition, in India we have a service facility able to respond to the needs of the many thermal power plants that have installed Torishima boiler circulation pumps. We plan to make this service facility capable of manufacturing boiler circulation pumps.
At the same time, there is no end to the work we have been doing to reform our manufacturing processes and thus achieve greater QCD capabilities. We must firmly establish process innovation in order to continue to achieve improvements. In addition, it is imperative that we make our factory equipment state of the art so that we can realize increased productivity and expanded production capacity.
In the realm of service solutions, we have achieved steady progress in our efforts to expand our after-sales service network, with a focus on regions where many Torishima pumps are installed. In fiscal 2016, we established service facilities in Saudi Arabia and Thailand that have begun serving our customers in the respective regions. Torishima’s service solutions now account for 30% of all orders received, a figure we plan to raise to 35% in fiscal 2019. By continuing to raise the ratio of service solutions to overall orders, our aim is to achieve a profit structure in which we secure stable profits through service solutions even when our orders for new pumps are sluggish. With this in mind, we are preparing to establish service facilities in countries where we have yet to establish them, including the nations of the Americas and Southeast Asia. We are also taking our servicing and maintenance business beyond just pumps, forming alliances with dedicated manufacturers of motors, turbines, and other pump-related rotating machinery. By doing so, we offer our customers even greater convenience. Torishima must set itself apart not only from its traditional rival manufacturers but also from budget manufacturers in emerging countries. Here again, the key is quality—quality in pumps and their servicing. End users need pumps to operate for several decades, so quality means giving them safety, durability, and satisfying after-sales services. To ensure that these end users ask for Torishima pumps by name, we must make pumps that work reliably for years and build a service network that is always there when customers need it.
We must also elevate overall product strength to new levels. That is, we need to boost the reliability, efficiency, and competitiveness of Torishima’s core pumps so that we can offer better energy efficiency, safety, and reliability through our products and become industry-leaders in innovation lead the industry through our innovation. With today’s lightning-fast pace of innovation in IoT, AI, 3D, and other data-rich technologies giving birth to new value in our world, we are witnessing what many are calling the fourth industrial revolution. We are harnessing these technologies to develop original systems and tap into new markets where we can secure new orders.
To succeed in the aforementioned efforts, governance and human resources are key factors supporting our company. To boost governance capabilities, we have improved the viability of our Board of Directors and introduced a performance-based compensation system, as well as strengthened management of our subsidiaries. This will allow us to improve the quality of our management and grow our business sustainably in the medium and long term.
To boost human resource capabilities, we must realize that people are the lifeblood of a corporation. There is much to be done: reform working styles, promote diversity, and hire and foster globally minded people. As one example of fostering human resources, with increasing demand from our customers around the world for maintenance and servicing, we will increase the number of supervisors and further train them so that when they are visiting customers to carry out inspections and repairs, they can at the same time offer energy-efficient solutions and suggest ways to better operate their pumps. This will lead to improved service solutions and take our service division to a whole new level.
Torishima will celebrate its 100th anniversary in August 2019. The next three years leading up to 2019—under the new 2019 Medium-Term Management Plan—are a time for us to complete the measures we have taken up to now and prepare to grow even stronger in our second century of business. We will boost manufacturing efficiency and improve our company’s fundamental strengths, with the goal of securing profit even in the face of external environmental factors. Our aim is to be fully prepared for the day when the market overcomes its current stagnancy, returns to vibrant growth, and provides us with improved sales.
Torishima’s business is all about creating shared value (CSV): providing high-efficiency pumps and pump technologies that help solve society’s sustainability problems by offering energy efficiency, safety, and reliability—while also helping us profit and grow as a company. My mission as president of Torishima is to raise our corporate value as a global company that can grow sustainably well into its second century of business. I would like to once again offer my gratitude to the many stakeholders who have continued to support us—shareholders, customers, suppliers, business partners, and of course the many employees who endeavor to proliferate our high-efficiency pumps. I ask for your continued support as we at Torishima strive to raise our corporate value and build good relations with all of our stakeholders.