Japanese hidden champion – worldwide market leader for welding robots gains ground

At the invitation of Mr Naoki Urai, President & CEO of OTC Daihen Europe GmbH in Munich, I visited the new showroom that has had a presence in Bavaria since November 2016 with Dr. Wolfgang Hübschle, Head of Invest in Bavaria. We were delighted to gain some insight into the current DAIHEN technologies. The showroom was primarily to serve among other things as a presentation platform for OTC Daihen’s partners in Europe, we’ll get to the other reason later on. 

The company was founded in Osaka in 1919 and is one of the world’s largest manufacturers of robots, arc welding and cutting equipment, transformers, systems for generating electrical energy and components for automating welding technology with more than 4,000 employees.

Mr Urai welcomed us very cordially to the new futuristic looking showroom right next to the A9 with renowned global players like Microsoft as its neighbour. After the friendly welcome, Mr Urai explained both the company profile and its beginnings in Europe to us in his presentation and we found out about the origin of the company name DAIHEN.

A new name

The foundation for today’s company with the company name (大阪変圧器株式会社, translated: Osaka Transformation Company) was laid almost 100 years ago. However, the company was better known by its nickname: DAIHEN, which was an abbreviation of 大= Dai変=Hen. They like using abbreviations in Japan, for example Kentucky Fried Chicken = “Kenchiki” or “Akeome!” for “Akemashite Omedetou!” = Happy New Year or for Marienplatz -> “Malipula” and Karlsplatz -> “Kalupula”. 

The company finally decided to change the name to Diahen Corporation in 1985. The company is also known as OTC (Osaka Transformer Company) for international business. Management is now pursuing the goal of raising the company’s profile worldwide under the umbrella name DAIHEN. 

The Japanese company comes to Germany

The company started in Germany with the foundation of its representative office in Düsseldorf in 1973. The German subsidiary was founded in 1982 and together with the Munich location currently employs 60 personnel. Mr Urai told us about his colleagues who were dispatched to Germany as pioneers in the 1970s and 80s. As not many Germans could speak English back then, business communication had to be conducted in German. The language also caused lots of difficulties in everyday life. But that is precisely why they managed to learn German to a certain extent, albeit not fluently.  Nowadays on the other hand, you don’t necessarily have to learn German as almost everyone in Germany speaks English. That’s his excuse for his current German skills that have room for improvement, he apologises grinning with a wink. 

In addition, Mr Urai told us about his interesting finding that there are still 30 owner-run companies in Germany operating in the manufacturing of arc welding machines. Daihen has a share of more than 50% of this market and a share of 95% together with Panasonic. Mr Urai emphasised the need to definitely have a presence in Bavaria to be close to customers as at the end of the day all the customers are in southern Germany. 

Dr. Hübschle was surprised by the statement by Mr Urai that all the arc welding machines intended for the European market are produced in Slovenia and not imported from Japan.  This was adapted to take the tendency of European customers to prefer a shorter delivery time and “Made in Germany or Made in the EU” to “Made in Japan”, even though the latter also promises an excellent guarantee of quality. 

The company is pursuing the goal of everyone involved, customers, suppliers, employees, society and the neighbours, being happy. Daihen in Japan, for example, organises a summer festival every year to maintain good relationships with the people living in the surrounding areas.

Visit by the State of Bavaria’s representatives in Japan at the OTC DAIHEN factory in Kobe

Colleagues from the State of Bavaria’s representative office in Japan visited the OTC DAIHEN factory in Kobe just one day before. The factory in Kobe is the production and development centre for arc welding machines and robots.

Dr. Geltinger, Head of the Representative Office in Japan and Ms Noe Tayama, Project Manager at the Representative Office in Tokyo were cordially welcomed by Mr Otsuki Sadao, General Manager International Department Welding Products Division and taken on a tour through the showroom and factory. Mr Sadao was at OTC in Germany (Mönchengladbach) himself for two years but he raved about Munich and Bavaria several times during the tour. In his opinion, there is the potential to develop the Munich location as most customers in the south (mainly Tier 1 for BMW) and the factory in Slovenia can be easily reached from there.

Retrospective:

How did the contact with DAIHEN originally come about? The company became aware of Invest in Bavaria through our advertising campaign in a Japanese language magazine for the Japanese community in Germany, Doitsu News Digest, and got in touch with us. The company was looking for another location in southern Germany to be close to customers. Right from the start a building on the ground floor was the only option so that it can be used as a showroom. Another very important criterion was that a wide audience should have access to the showroom. At the end of the day, the idea is for the robots to be seen.

As a result, the search proved to be not that easy. A large office space, on the ground floor, suitable as a showroom, with as many passers-by as possible... It’s not as if there is not any commercial space for retail in Munich. But when rows and rows of robots are to be displayed there, things start to look a bit different. Not to mention the issue of whether the owner would be on board...

It is understandable that a company is interested in being well-known but why is it also very important for Daihen to be noticed by end consumers? At the end of the day, industrial robots are not an everyday object for the average household. The answer from Mr Urai was just as simple as ingenious!

As a global player and hidden champion, the traditional Daihen Corporation has been offering top quality for almost 100 years. Daihen is established in its trade as a robot manufacturer and enjoys an excellent reputation among international experts. Unfortunately though the level of recognition is not high enough with end consumers. This has a negative impact on the search for professionals and recruitment.

Daihen is struggling just as much as other companies with the skills shortage after all. Management did not ponder at length and came up with the clever idea, which was also implemented straight away. The motto was accordingly: To get out of their, metaphorical, own backyard and out to where the end customers, or more precisely, mothers can be found. Why mothers? What do mothers specifically have to do with this?

Mothers and their children’s choice of career

Management established that in Japan it tends to be the mothers who often have the last word when it comes to which company their children should work at later on. In concrete terms this means: if her child has two job offers from two different companies, the mother suggests to her child that they should go for the better known company.

So you have to get out to where you can find as many mothers as possible to influence them! Daihen is also resolutely following this corporate philosophy from Japan in Europe too and working on actively raising its profile here as well. This strategy has paid off. In the meantime Daihen is also very well-known among end consumers in Japan.
The search for a showroom in Munich was successful and the exhibition with industrial robots is both aesthetically appealing and technically interesting. This kind of Japanese hidden champion with worldwide market leadership in welding robots fits very well into the Bavarian landscape.  Which mothers wouldn’t melt at the sight of this future technology with such great aesthetics and elegance?

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