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An exclusive interview with Mr. Heiki Miki, Executive Officer and General Manager for Overseas Business of Shinagawa Refractories Co., Ltd.

Refwin: As one of the leading full range refractories manufacturers in the world, what are the key factors that drive Shinagawa Refractories to continuously success with a long history dated back to 1875?


Mr. Heiki Miki: Since the first date our founder, Mr. Katsuzo Nishimura, commenced production of fire bricks in 1875, our primary focus has been always to commit ourselves to provide high quality refractories with a strong emphasis on constant technological innovation. We believe the key factor to keep ourselves in the frontrunner of the industry is to continuously seek and develop cutting-edge technologies for producing the most advanced refractory products. Shinagawa is very proud of our state-of-art modern production facilities, along with our extensive research capabilities at one of the largest research centers in the global refractories industry. And, our goal has been, and will continue be to build a healthy pipeline of well-trained and talented engineers to maintain our position as one of the most respected companies in the industry.


Refwin: Under the overall market downturn, the financial data of Shinagawa mostly show a growth trend in terms of revenue and profit. How does the company realize this?


Mr. Heiki Miki: Even in downturn market, there are always opportunities to grow your business. You just need to know where to look for them. In fact, we believe it is more important than ever to keep up your marketing during downturn. Our customers are always looking for something new, something better. This is where Shinagawa is seeking opportunities. In fact, the key here is that we are not just waiting for new opportunities; we are proactively creating them. By working closely with our customers, we are acting not just as a refractories supplier; but as a solution provider to where they are looking for improvements. This is how we are realizing a growth trend in terms of revenue and profit even in a difficult marketplace. And, again, our competitive advantages in advanced technologies allow us to make this happen.


Refwin: What is the major challenge faced by refractories suppliers? What effective measures can be taken to overcome the difficulty?


Mr. Heiki Miki: As in many industries, the biggest challenge for global refractories industry is strong pressures for cost reduction. This is, however, mainly applicable for commodity grade refractories, not that much for special high quality refractories. If you are a commodity grade refractories supplier, you need to pursue low cost leadership strategy to meet demanding requirements in the marketplace. This is not the case of Shinagawa. Our strategy to overcome this challenge is not just to produce commodity grade products at the lowest costs possible but to focus on producing value added products, where we can market and sell our products not just with their unit prices, but with the overall values these products could provide to our customers. These products include our special functional products for continuous casting process at steel making, such as slide gate plate bricks, submerged entry nozzles, monoblock stoppers and ladle shrouds.


Refwin: In your view, how long can we expect a recovery for refractories industry and its downstream industry like steel?


Mr. Heiki Miki: Well, it is true that global steel industry is currently suffered from overcapacity situation, but worldwide steel demand itself will continue to increase. The same applies to cement industry. Significant shift in required quality, from commodity products to high quality products, is also an ongoing trend. There is actually not that much overcapacity issue with special high quality steel products, which typically requires high quality refractories to produce them. We may need to deal with difficult operating environment for refractories industry for a while, but I am cautiously but pretty optimistic about the future of the industry.


Refwin: In October 2009, Shinagawa Refractories Co., Ltd. and JFE Refractories Corporation merged, to become one of the world Top 5 refractories supplier. What development plans have been worked out since the merger, and what is your strategy for the future?


Mr. Heiki Miki: Since our merger in 2009, we have been successfully implemented two mid-term (three years) management plans. During these six years from the merger to today, one of our main focuses was to establish optimal production system by consolidation and integration of facilities from both companies, Shinagawa Refractories and JFE Refractories. With optimal production system now in place, our main focus today is how to grow our business by fully utilizing all these facilities, not only ones in Japan but also our overseas facilities. While we see steady demand for our refractories in Japan and our goal is to secure our position as the major supplier domestically, our new initiative is to grow our business overseas, significantly expand our presence in global market. In order to efficiently capture growing demand in ASEAN region, through our company in Australia, Shinagawa Refractories Australasia, we recently launched our new company in Indonesia, PT Shinagawa Refractories Indonesia. In order to effectively capture growing demand in each region, we restructured our overseas business organization, consolidated export sales function and overseas subsidiaries management/support function by region. Achieving strong and sustainable growth in the global market is our core strategy for the future.


Refwin: Thanks for sharing your viewpoints with us!

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