How Can Japanese Dyeing Giant Achieve First?

Japanese fabric dyeing giant Komatsu Seiren recently announced its 2017 financial year results, with double sales and operating profits.

In the 2017 fiscal year ending March 2018, Komatsu's core financial data are as follows:

Sales grew by 7.8% to 38 billion 680 million yen.

Operating profit grew 48.8% to 2 billion 150 million yen.

Net profit increased 49.1% to 2 billion 140 million yen.

Headquartered in Komatsu City, Ishikawa County, Japan, with the surrounding small towns, the Komatsu area has been famous for its silk production since the age of 1336~1573 in Japan. Because its silk needs to be dyed locally, the development of dyeing and finishing industry has been promoted.

In 1943, based on the dyeing factory of the Komatsu textile Union, a number of dyeing factories were merged for the subsequent Komatsu scouring.

In 1961, Komatsu scouring became the designated nylon dyeing and finishing plant in Dongli, Japan's textile giant Toray.

In addition to fabric dyeing and finishing business, Komatsu scouring also purchased grey fabrics from textile producers, dyeing them into original synthetic fiber fabrics and then selling them.

At present, Komatsu scouring fabrics are divided into two major parts: clothing material and material fabric.

Accounted for 70%, the remaining 30% used for car seats, curtains and other daily necessities.

Bags and other lifestyle products, and building materials, medical welfare and other fields.

Sales from Dongli account for 14 to 15% of the company's total sales.

From the market perspective, overseas markets contributed 30% of sales to Komatsu scouring, 40% of which came from Europe and 30% from the Middle East.

Fabrics exported to the European market are mainly used for high-end women's wear and sportswear, while the Middle East market is mainly used to make local men's national costume Kandu gowns. Komatsu scouring occupies the Middle East high-end Kandu 90% market.

In the words of Ikeda Tetsuo, President of Komatsu scouring, "the famous overseas fashion brands are basically used for the fabric we produce, and the designers will also visit the factory."

Under the impact of the financial crisis in 1997, Komatsu's performance was far worse than before.

In the 2011 fiscal year of March 2012, despite the return of operating profit to 1 billion 900 million yen, profit margins dropped sharply due to the decline in sales ratio of high profit products and high price of raw materials.

In the 2013 fiscal year ending March 2014, Komatsu's operating profit margin was less than 1%, 2016 in fiscal year 4% and 2017 in fiscal year 5.2%.

That is to say, the profit margin has increased by nearly four times in three years.

But at the same time, the sales volume of Komatsu's scouring almost didn't increase. Why did the profit increase substantially?

Currently, synthetic fiber, cotton, chemical fiber and wool fabrics together, Komatsu scouring occupies 11% of the market share in Japan, and output ranks first in Japan.

Ikeda Tetsuo pointed out that the competitive advantage of Komatsu's scouring lies in its unique style, which is to change the fabric's original texture through dyeing and finishing technology, so as to make it show a sense of superiority and a unique sense of existence.

It is our characteristic to do fabric texture that others can't do.

10 years ago, luxury brands came up with a design that would take 2~3 years to produce similar products on the market. Now it takes only a few weeks.

Fabric texture has become an imitative feature of luxury brands. "

Even though Komatsu scouring has now set up several production subsidiaries in China and other places, a large proportion of the new products are made locally.

Ikeda Tetsuo said: "the fabric dyeing process is slightly biased, the overall texture will be very different, many factors are not data can be managed and controlled, and some processes can only be done in Japan."

Since 2015, Komatsu has refined production lines, invested in energy-efficient and highly productive equipment, and worked hard to optimize the processing methods of its textile fabrics.

It can be seen that Komatsu did not focus on reducing costs, but rather worked hard to develop high profit products, develop the most advanced fabrics and carbon fiber building materials, and increase the added value of commodities.

In January this year, Komatsu announced that it was working with Goldwin, a sportswear manufacturer, to develop Merino wool dyeing technology that coloured natural pigments.

This technology is based on Komatsu's synthetic fiber natural dyeing technology, Onibegie, which lasted for a year and a half, and overcome the technical difficulties of natural dyes, such as poor coloring power, and wool's not easy to stain.

Like Onibegie, the new wool dyeing technology uses ingredients extracted from onion skins as auxiliaries to stabilize the properties of natural pigments and chemical dyes.

There are three colors of Cherry Blossom powder, onion purple and bamboo charcoal ash.

This technology will first apply to the New Zealand wool sports brand Icebreaker, which is responsible for selling Goldwin.

In March, Komatsu scouring and woolen textile maker I.S.T announced that the two sides used wool textile technology to develop the latest blended synthetic fiber fabric, Karl Karl-KS.

Although the fabric was released three years ago, the two sides improved their production technology from scratch and reduced their price to 70%.

Ikeda Tetsuo pointed out: "only three years ago, the sample was not perfect.

Originally, it was only wool fabrics, but today it can be used in many categories such as fashion, sports equipment, home fashion, etc.

Karl Karl-KS

The Karl Karl, developed for I.S.T, is 70% of the weight of ordinary fleece fabrics and is usually used for outdoor brand products such as Patagonia.

Karl Karl-KS is using this technology on synthetic fibers, and then breathes into waterproof and waterproof properties. The future will mainly be used for ski wear, outdoor clothing and other products.

Komatsu scouring hopes for the 2018 fiscal year of March 2019:

Sales grew by 3.4% to 40 billion yen.

Operating profit grew 6.9% to 23 billion yen.

Net profit increased 3% to 22 billion yen.

(Note: the current 100 yen is about 6 yuan).