In the next few months, PFA will be presenting the JAPAN SPECIAL: Wood, Machinery and Technology – a three-part report series on Japan’s woodworking industry.
Our first interview is with the Japan Woodworking Machinery Association. Taiki Amano, manager of Japan Woodworking Machinery Association, together with Masanori Imoto, a respected member who is also the President of IIDA Kogyo Co., Ltd, will share a brief history as well as the latest developments in Japan’s woodworking machinery industry.
Taiki Amano, manager of Japan Woodworking Machinery Association, with Masanori Imoto, a respected member who is also the President of IIDA Kogyo Co., Ltd
This report will examine Japan’s woodworking machinery industry through three different lenses: the decline in trade shows since 1980s, recent developments in Japan’s domestic market as well as the future rise of prefabricated wood and plywood manufacturing.
The Japan Woodworking Machinery Association has a history of 70 years. It currently has 67 members from all over Japan.
(Sources: Reuters and https://www.macrotrends.net/2550/dollar-yen-exchange-rate-historical-chart)
1985: THE WATERSHED YEAR
A retrospective glance at the rise and fall of Japan’s woodworking machinery industry, from the association’s perspective, returned repeatedly to a pivotal point in time: the year 1985. It was the start of the dollar’s dramatic slide against the yen from 240 yen to 79.75 yen within a decade.
While the Japanese economy recovered quickly after the world recession in the early 1980s, it entered a period of “unparalleled prosperity” between 1985 to 19901. The economy overexpanded due to an exuberantly optimistic outlook, driving up land and stocks prices relentlessly until the asset price bubble burst in the early 1990s.
The value of yen paralleled the strong economy and large trade surpluses, strengthening continuously till 1995. Figure 1 shows the key movements in the value of the yen from 1985 to 1995.
JAPAN’S WOODWORKING MACHINERY TRADE SHOWS, PAST AND PRESENT
Japan’s woodworking machinery trade shows were at their largest, both in quantity and scale, in the early 1980s, according to Imoto.
“ The biggest exhibition could easily occupy all three buildings at Port Messe Nagoya, Nagoya’s exhibition centre, spilling over to large temporary tents next to the buildings. Trade shows back then were huge. At its peak, there were as many as two to three exhibitions held annually,” recalled Imoto.
Imoto believes that the robustness of the woodworking machinery industry and its exports was closely interlinked with the value of the yen.
In the early 1980s, Japan’s export market was at its peak; about 70 per cent of the plywood machines and 30 per cent of sawmill machines, all manufactured in Japan, were exported. Japan’s export markets consisted of mostly developing South East Asian countries – the Philippines, Indonesia and Malaysia.
“But from 1985 onwards, the yen started strengthening, again when the bubble economy burst in 1991. The Lehman Brother crisis in 2008 was the last blow to our industry’s export markets. The prices of Japanese exports had gone up by almost double. There was no way to sell our products overseas,” said Imoto.
POST 2008: AFTER THE LEHMAN BROTHERS CRISIS
In mid-1980s, Japan’s woodworking machinery companies also started to face stiff er competition from European woodworking machinery companies like Weinig, which caught up and took over Japan’s market share. Cheaper Taiwanese machines soon entered the market as well and took the remaining share.
After 2008, the woodworking machinery industry in Japan shrank once more and retreated to the domestic market for good, said Imoto.
Besides the strong currency, Imoto also pointed to a weakened domestic furniture industry which saw the influx of cheaper imported furniture as well as many local manufacturers shifting their factories to more cost-competitive countries such as Malaysia and Thailand, in turn lowering demand for Japanese machinery.
This view was reiterated by Michael Buckley, managing director of Turnstone Singapore, who had close business relationships with Japanese wood and woodworking companies in the 1980s. He recounted that while Japan is one of the world’s highest consumers (per capita) of wood and the woodworking machinery industry developed high quality and innovative machinery even back then, the industry faced threats from Taiwanese woodworking machinery companies which “copied and undercut” Japanese machinery.
“The high value of the Japanese Yen and labour costs in Japan rendered the industry uncompetitive unless the overriding factor is machine accuracy and quality,” added Buckley.
DECLINING NUMBER OF TRADE SHOWS
In 2009, there were still four trade shows held in Osaka, Hiroshima, Tokyo and Shizuoka. However, the past decade saw a rapid decline in the remaining trade shows. The last trade show in Osaka was held 10 years ago, while the last trade show in Tokyo was held three or four years ago.
Today, there is only one woodworking machinery show left in Japan, namely the Japan Woodworking Machinery Fair. It is held in Nagoya every two years and organised by the Japan Woodworking Machinery Association.
All hope is not lost though. The number of booths for this year’s show is estimated to reach 1000, up from 850 booths two years ago. Amano attributed the increase in booths to more adhesive and biomass companies participating in the show as exhibitors.
Some of the prominent players currently in the Japanese woodworking machinery companies are:
• HEIAN, manufacturer of CNC routers and Pre-cut machine
• SHODA, manufacturer of CNC router, which has diversified into the plastic and aluminium business. 40 per cent of its businesses are still in woodworking machinery
• IIDA, manufacturer of moulders, finger joint machines, planers, wood grading systems, moisture meters, wood laser cutter and pressing machines for glulam. It has also diversified into the car airbag business.
HOW ARE JAPAN’S WOODWORKING MACHINERY DIFFERENT?
As Japanese woodworking machinery companies focused on the domestic market, machines were mainly designed to cater to the local builders and furniture manufacturers.
Japanese woodworking techniques, whether in housing, furniture or special architecture like shrines and temples, are world-renowned to be top-notch. Craftsmen and builders demand for machines that can produce delicate and highly precise parts; finishing is also of very high quality. “Japanese housing are special buildings. We need to use our own technology to build Japanese wooden houses. Even our doors and windows are slightly different. The quality is different and very precise. Everything needs to be very accurate,” said Imoto.
UNIQUE REQUIREMENTS FOR WOODWORKING MACHINERY IN THE DOMESTIC MARKET
Even as Japanese builders and manufacturers have come to accept cheaper machinery such as those from Taiwan, they will need the machines to be modified using additional parts in Japan.
“At IIDA for example, original machines from Taiwan need to be modified with additional parts that are only found in Japan in order to process wood specifically for our clients’ needs. We will then provide services for these parts. If we order moulding machines, we will usually modify the automatic positioning device, or replace it with those made by Japanese companies, as we need to change the software’s language to Japanese; also, some of the sensors, calculation systems and screws need to be changed in order to process wood with higher accuracy, as required by our clients,” explained Imoto.
“However, not all woodworking customers are looking at such technologies anymore, some just want cheap machines,” said Imoto. In part two of PFA’s interview with Japan Woodworking Machinery Association, we will provide deeper insights into Japan’s growing mass engineered timber and plywood manufacturing sectors.
** This article can be found in Panels & Furniture Asia July/August 2019 issue.