History of Sodick
Part 2: Rapid Growth Phase to Overseas Expansion Phase
Expansion into China
Establishment of a software production company
Shanghai Sodick Software Co., Ltd.
As China has expanded economically, its need for electrical discharge machines has also increased.
Around 1985, Sodick received a request from Shanghai Jiao Tong University to cooperate in starting up a local die and mold association and provided training in electrical discharge machining technology and how to use it.
At that time, Shanghai Jiao Tong University was setting up a business to develop and market the CAD/CAM (computer-aided design and manufacture) software which is an indispensable part of die and mold fabrication.
Then Sodick entrusted the development of the software required for its own products to Shanghai Jiao Tong University. The reason behind this is that there were many very talented students enrolled at the university and staffing costs in China were one tenth those of Japan back in those days.
At the same time, Sodick also proposed to set up a joint software company. Finally in May 1991, Shanghai Sodick Software Co., Ltd. was established as a joint venture between Sodick, Shanghai Jiao Tong University, and Shanghai City.
Today, the company handles much of the software used in Sodick numerical control and is also engaged in software development for a range of machines.
Establishment of plants
Suzhou Plant
Following on from the Thailand Plant, Sodick began to study the establishment of electrical discharge machine plants in China also.
However, due to differences in business practices, Sodick was unable to find a sufficiently trustworthy partner. Yet, by virtue of arduous negotiations, Sodick finally located an ideal partner and proceeded to establish a joint business based on mutual trust and benefit.
In June 1994, Suzhou Sodick Sanguang Machinery Electric Co., Ltd. was initially established under the initiative of Sodick's Chinese partner. Six months later, in November, Suzhou Sodick Special Equipment Co., Ltd. was established with Sodick as the principal.
To ensure a stable supply of components, Sodick also established the Suzhou STK Foundry Co., Ltd. cast manufacturing company as a joint venture (with TOWA and Kanematsu KGK Corp.) in September 1995.
The company has since grown to the point where it now manufactures between 500 and 600 tons of components every month and ships to both Japan and Thailand.
Sales network expansion
While it was setting up production plants in China, Sodick began the task of expanding its sales network throughout the broader Chinese-speaking region. In April 1994, Sodick Singapore Pte., Ltd. was established in Singapore, and in November of that year, Sodick Electromechanical (Beijing) Co., Ltd. was established in Beijing as Sodick's first sales company in China. In quick succession, Sodick (Taiwan) Co., Ltd. was established in Taipei in January 1996, followed in April by Sodick Electromechanical (Shanghai) Co., Ltd. in Shanghai, and then in October, Sodick (H.K.) Co., Ltd. in Hong Kong.
As a result of this steady construction and expansion of its sales network, sales to the broader Chinese-speaking region grew so much that they accounted for around 28% of Sodick's total sales in 2014.
- In 1994, Sodick built a factory in Suzhou as a joint venture with a local company. I believe finding a trustworthy partner required a considerable effort.
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Furukawa
We're going back a long way now, but it happened when a research institute that we'd been sharing technology with for a long time left us with a corporation that makes a better funding contribution. We had very little choice, so we went looking for a partner we could trust and kept at it until we found one. I was surprised at the differences in the way how business was conducted in China, but rather than getting upset over every little thing, I thought the best way was to build relationships that allowed communication in both directions so that we could learn from them. In that way, we were finally able to find a partner we could work with productively. They helped us in lots of ways, including everything from finding staff through to setting up factories and equipment as well as procuring machinery at a reasonable price.
By working in ways that allow both of us to grow, I think we've built up a relationship of trust.
- For your expansion into China, I imagine having local subcontractors would be absolutely essential. Did you give any particular consideration during the negotiations?
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Furukawa
No matter what happens, you trust them and tolerate them. Well, first of all, you shouldn't get upset over details.
I realized that if you approach doing business in China with the aim of learning from the Chinese, they will accept you.
In that respect, we're the same; because we want to learn new things.
But if you can't be like them in some ways, however much you try, I think that's OK, too. For us, the technology at the core of Sodick would fall into this case.
It's something that people can't copy, no matter how hard they try. Things that can quickly be imitated don't succeed out in the world, I believe.
Things may look the same on the outside, but on the inside they're different.
