Source: The Worldfolio
Interview – January 16, 2023
The Takaoka Toko Group has continually supported a stable supply and efficient use of electric power energy for more than 100 years, providing various products and systems – including power substation and distribution facilities, monitoring and control systems, and metering equipment – to the electric power utilities, public infrastructure, and general industry.
Can you give us a brief introduction to your company?
TAKAOKA TOKO Holdings Co., Ltd. began in October 2012 by merging TOKO ELECTRIC CORPORATION (referred to below as TOKO ELECTRIC), which had existed for 84 years, and TAKAOKA ELECTRIC MFG.CO., LTD., (referred to below as TAKAOKA ELECTRIC) established 94 years ago. We have 2,592 employees with JPY 8 billion capital. The 35% of our shares are held by TEPCO Power Grid, Incorporated. We have a head office, five offices, four branch offices and nine business offices, a total of 19 bases in Japan, and we also have offices in Vietnam and Philippines. Within our group company, we are present in 13 locations both at home and internationally.
In general, electricity generated from electric power plants is distributed to a number of substations and transformers, and the voltage of it is lowered through the process, then it is delivered in smaller units for factories, commercial facilities, train systems, buildings, individual homes, etc. The extra-high voltage substations that the electric power plants distribute electricity to in the first place lower the voltage at 500kV or 275kV. After that, electricity is distributed to several substations, but the voltage of electricity differs depending on the electric consumption. For example, large factories and train systems are sent the electricity at 154kV or 66kV. Buildings are sent the electricity at 22kV or 6kV and individual homes are sent electricity at 200V or 100V through transformers and other related equipment.
Generally, the reliability of electrical power is measured by the annual frequency of power outages and the yearly time of power outages in every home. Japan is at the top of the chart worldwide because it has the least number of power outages, which demonstrates the reliability of Japanese electrical power companies and the equipment that manufacturers like us deliver.
We are involved in providing a stable energy supply for various uses, specifically for large and small factories, commercial facilities, train systems, buildings & private homes through our transformers, switchgears and other related equipment. We provide transformers, circuit breakers, and switchgears for the extra-high-voltage substations. Also, we provide distribution equipment and systems including pole-mounted transformers and pole-mounted switchgears. In the areas which cope with the removal of roadside utility poles, we provide pad-mounted transformers and pad-mounted switchgears. In addition, we also provide distribution automation systems, among others. Our smart meters, installed in individual homes, can transmit data to distant areas by measuring electricity usage digitally. As a result, there is no need for meter readers and each home can work on saving electricity and energy in an active way by visualization of electricity usage. We can provide almost all equipment and services related to electric transmission, distribution, monitoring, and measurement in power networks.
Moreover, our green transformation business offers various products geared toward sustainability, a carbon-neutral society and vehicle electrification. We also have EV quick chargers and T-zone saver – an energy reduction solution service we provide for buildings and internal offices.
The sensor on the ceiling monitors and dims the light if nobody is within a 1.8-meter radius, and it also adjusts the air conditioning temperature settings to save energy. By practicing these methods, we can contribute to reducing energy consumption in buildings. The joint meter reading system remotely measures utility meters like electricity, gas and water by upgrading communication technology. We recognize the green transformation as a business chance aimed at carbon neutrality and believe we can contribute to a carbon neutral society.
About our next-generation distribution services, in addition to the model of conventional electricity supply that is based on high voltage power transmission lines, we would like to utilize and combine different energy sources such as solar, wind or other renewable energy sources, and seek new models of electricity supply which serve as alternative systems to larger power grids in case of natural disasters. A microgrid is a new kind of power grid system used that serves as protection against natural disasters, built on the model of local production and consumption. I think it is an important technology that can implement carbon neutrality by maximizing the renewable energy depending on the regional situations, and I believe that we are going to see a steady rise in these microgrids around Japan.
Many semiconductor devices are built into many electronic devices like PCs. Semiconductor circuit boards and packages require strict measurement and inspection standards, so we developed a 3D inspection system that measures bumps at the micrometer level. I think no other company can attain the same level of accuracy that we can.
How did your inspection system business for semiconductors begin?
During the time of our predecessor, TAKAOKA ELECTRIC, there was a big push for R&D centered on catering to diverse business fields. Regardless of a single business field, we were strongly encouraged to be proactive in looking for different types of technologies. Consequently, we did not only work on bump-inspection devices for semiconductors, but we were also involved with projects related to industrial motors, water conditioners and other fields. Despite the successes and failures, we discovered our applied optics inspection system business through that type of R&D, and we were able to provide state-of-the-art technology for semiconductor packages. That business was not seeing too much progress until very recently, given the great demand in the semiconductor field. We are just starting to witness our efforts bear fruit.
Since COVID began, there have been shortages of chips around the world. Hence, we are seeing major manufacturers like Intel or TSMC coming back in force and opening new fabs in various locations. What opportunities does this increased capacity of semiconductor production present for your company? Do you have plans to benefit from it?
We received a contract from a well-known domestic semiconductor package maker, and moving forward, we are finding ways to supply to various global companies, including TSMC. TSMC not only built a factory in Kumamoto, but a couple of weeks ago, their R&D facility in Tsukuba was also completed. In fact, we were invited to their completion ceremony to be part of that new project.
Can you tell us the reason for merging TAKAOKA ELECTRIC and TOKO ELECTRIC in 2012 to form TAKAOKA TOKO CO., LTD.? What synergistic benefits did it bring for TAKAOKA TOKO?
TAKAOKA ELECTRIC mainly dealt with extra-high voltage devices, while TOKO ELECTRIC worked with products and devices for high-voltage distribution. As a result of the merger, we were able to expand our lineup of products and provide almost all devices related to electric transmission and distribution. Also, we were able to benefit from better synergistic effects of the R&D of both companies. I think having such integrated capacity at our fingertips made it possible to give birth to new businesses and expand our services to the next generation of renewable energy resources and energy solutions for microgrids.
Japan is one country facing the four-fold challenges: a lack of natural resources, dependence on the Middle East, high energy costs and high cost of cutting gas emissions, which has led to the country importing 94% of its primary energy needs. As a company that is heavily involved in energy and its solutions, what must Japan do in order to overcome some of these challenges?
As part of our mundane activities, we are trying to do whatever we can to minimize our electricity consumption and figure out ways to conserve energy. In addition to such challenges, we were able to continue activities because of the recent easing of restrictions in energy management. In addition to the electricity supply systems by the electric power companies so far, building new electricity supply systems based on regional features by utilizing renewable energy etc. is accelerating, and “local production for local consumption of electricity” is paid attention now. Japan is pushing ahead and putting forth great efforts toward a carbon-neutral society. To achieve these goals, we need to strengthen our intention in utilizing alternative renewable resources such as solar or wind. However, because those sources are reliant on nature, we foresee more fluctuations in the stability of the energy supply. The electricity supplied needs to constantly match the electricity consumed to stabilize the quality of electricity by controlling frequency and voltage etc. To compensate for an imbalance between electric power generation and consumed electric power, electricity storage systems including EVs batteries are essential because renewable energy’s electric power generation is unstable and uncontrollable. As microgrids expand throughout Japan, there will be a need for matching and adjusting supply and demand in each local area. We look forward to being able to roll out our energy management system along with the experience and know-how that we have developed through our businesses to cater to our customers’ needs.
TAKAOKA TOKO provides EV charging infrastructure and has a 40% market share for quick chargers in Japan. How is your quick-charger technology superior compared to more traditional ones?
We delivered the first quick chargers for public and corporations in May of 2009, so we entered the market at an early stage. That is the reason why we were able to be one of the pioneers in this field within Japan. We had several R&D projects with Tokyo Electric Power Company Holdings, Inc. that led to the growth of our business. Compared to other competitors, the quality of our quick charger technology is top-notch. Our clients have said that the percentage of our chargers breaking down is much lower than other companies in the field. However, we do see many new competitive players entering this market, such as Shindengen, AVV or Daihen. It is necessary to take different measures in order to maintain our 40% market share. We want to expand our product lineup to cater to different charging needs. We have regular-speed charging system technologies used for homes. Last year, we were able to produce a comprehensive system that can be installed in housing complexes. It can monitor cars being charged and charge each individual user who is under contract to the service. Through such a system, the management of the housing complexes or buildings becomes easier.
Now we are continuing the development based on the ‘four points of view’. The first approach is the development of the products through marketing. We were able to raise the wattage of our devices from 50 kilowatts to 120 kilowatts. Also, we created a 15-kilowatt, middle-speed quick charger that can fill EVs up in 2 to 3 hours, and this fall, we are going to release it as a new product. We think there are business needs for this middle-speed charger from various companies and public needs by condominiums. The entire array of our products can cover the full spectrum of needs for EV charging.
Generally speaking, the regular charging of an EV takes 8 to 10 hours, and quick chargers take 30 minutes. We did marketing and developed a middle-speed charger which requires 2 to 3 hours to finish the charge. Its speed is between that of regular chargers and quick chargers, and we set a reasonable price on it to cater to the market needs.
The second approach is price reduction. We have been doing whatever we can to cut costs and lower prices. In becoming more cost-efficient for our clients, we should take into consideration the price of the device, installation costs and construction requirements. The construction costs for the clients can depend on the size and the weight of the chargers, and the load of the power distribution network which is connected to the installed chargers. With our distribution equipment and transformers, we are seeking ways to combine and create more affordable packages to leverage our strengths and compete against other emerging players.
The third approach is the one-stop service including installation programs, construction and after-sales support. We aim to promote our ability to provide all the services required for the installation of EV quick chargers, as well as the design, manufacturing and repair & maintenance services.
The fourth approach is new services by utilizing our cloud system. It would be ideal to gather all the data and analytics in a cloud system to aid us in providing added value services to our clients. With these four approaches, we want to be able to compete with other competitors and leverage our strengths.
Are your EV chargers sold only in Japan? Do you have plans to export them internationally?
What I have talked about refers to our domestic project, but we have a separate project for our international business. We have a global strategy to roll out this technology; however, we have been prioritizing and expanding our technology for domestic use in regard to EV chargers. By 2030, the Japanese government plans to install 30,000 quick charging systems in Japan, so we want to direct our efforts and resources to that endeavor.
The development of the world’s first pure battery electric propulsion tanker, ‘Asahi’, was a partnership business with Asahi Tanker Co., Ltd. and TEPCO Energy Partner Incorporated, etc. We provided electric supply stations that supply electricity to EV tankers, such as receiving and transforming facilities, and power feed controllers by collaborating with Tokyo Electric Power Company Group. We are going to promote infrastructure business that can support an EV society to reduce the burden on the environment and make a sustainable recycling society a reality.
You are involved in H2-YES, a P2G (Power to Gas) system development project commissioned by NEDO, alongside Yamanashi prefecture, Toray Industries, Inc and Tokyo Electric Power Company Holdings, Inc. in Yamanashi prefecture. Can you tell us more about how this project is going, and how did you get involved?
H2-YES is a system built within Komekurayama in Yamanashi prefecture that absorbs the output fluctuation of the solar power system by creating hydrogen gas and contributes to the stabilization of the electric system. In this consortium project, we provide our energy management services to monitor the excess solar energy and identify how much to transform into gas production.
We have another type of energy management system project in the RESOL SEIMEI NO MORI in Chiba prefecture, which utilizes solar energy installed in the region to help promote the local production and consumption of solar energy. This was also a cooperative project of the four companies involved, including TAKAOKA TOKO CO., LTD., who were highly praised by the government and NEF (New Energy Foundation), as it was related to new energy resources. We received the ‘New Energy Foundation President’s Award’ at the New Energy Award for FY2021 thanks to this project.
Given the success of your EV tanker and the RESOL SEIMEI NO MORI project, are you looking for similar collaborative efforts in overseas markets?
We were persistent even though EV tankers and RESOL SEIMEI NO MORI were unprecedented in our company. We elaborately discussed how we could achieve our goals with many companies that collaborated in those projects beforehand. We are proceeding with various new businesses, and challenging new ways. I think it is important to pursue what we can do for our customers.
Based on the above policy, our global strategy has three main elements. We want to be able to distribute our transformers and our gas-voltage transformers to global users while continually developing varied voltages and types to cater to each local need. Our gas-voltage transformers are being manufactured in Suzhou, China and Korea for local production and consumption in those markets and for foreign GIS (Gas Insulated Switchgear) manufacturers. Those products are also exported to countries in Asia, the Middle East and Europe by GIS manufacturers, and our products manufactured in China and Korea are built in GIS and used in important power substations and receiving facilities in many countries.
Our company’s second approach is through Takaoka Engineering Co., Ltd, which we call TEC. It is a part of our business focusing on developing nations, especially the African region, providing different infrastructure support and services for power stations and substations as well as the development of renewable energies. We support the construction of a variety of power facilities in Rwanda and Malawi. By participating in the construction of many projects in the building of mega solar power plants in Africa, we have an active role in contributing to the infrastructural support, electrification and renewable energy development in developing nations. We look forward to continuing such projects.
Our third international strategic approach is through our business with Applied Technical Systems (ATS) in Vietnam.
Our group company, ATS’s Supervisory Control and Data Acquisition (SCADA), that can monitor, manage and control the electric power system equipment and the trend, has taken the top position in the Vietnamese market. Because it boasts very advanced digitalization technologies, we are working together to digitalize the power energy management and control system. Our overseas projects make up only a small percentage of our overall business, so we want to expand our global operations including group companies and continue to grow as a group company. By doing so, we can have a platform worldwide to provide our EV charging systems, energy management systems, smart power grid and microgrid systems, including technologies used in the projects that we have successfully rolled out in Chiba and other places. Furthermore, we are very excited to contribute to creating a carbon-neutral world with Japanese technologies.
Do you have a particular goal or a personal ambition that you would like to achieve during your time as president?
The EV quick chargers’ market is starting to pick up speed in Japan, so my goal is to increase our share from 40% to 50%. I want to somehow reach this goal through the four approaches, as follows: product development by marketing, cost cutting and decreasing sales prices, the one stop service including installation program, construction, and after-sales support, and lastly, new services by utilizing the cloud, which I have explained. Since our next-generation power distribution businesses are customized and based on the specifications of the locality, we want to standardize those for a bigger-scale distribution. It would be great if we could utilize the power and energy produced and abandoned in many communities more effectively, by using more microgrids. I want to work on these two aspects and boost our performance sincerely in my period for our customer and carbon-neutral society.