SINCE marking its 30th year of business in 2004, HORIBA STEC has been actively promoting a policy of business expansion.

As for production, they completed their new ASU plant in October of last year. Production capacity of their main product, Mass Flow Controllers (MFCs), expanded three fold, and together with their main plant in Kyoto they have grown to be the world's largest producer.

This plant is engaged in the manufacture of liquid gas controllers and equipment related to analysis in the areas of medicine, physics, and chemistry. It fills an important role of being a production base for the HORIBA Group.

In terms of products, and with MFCs as a gas flow control basis, the company is also expanding in the areas of vacuum gauges and pressure controllers such as quadruple mass analysis type residue gas analyzers. The group is also expanding into liquid control with flow and pressure controllers.

KK Gas Review (GR) interviewed the president Atsushi Horiba (AH), who is in charge of the group\\$quot;s present policy of business expansion and future strategy.

GR : What is the reason for the promotion of such an active business expansion during the past few years?

AH: \\$quot;Right now the electronics industry is looking for company competitiveness. The purpose of the reorganization and consolidation on the part of the MFC producers is to strengthen their capital situation. Companies are being pressed to cope internationally in all areas such as manufacture, services, development, and marketing and this is shown in the discrepancy in sales.

\\$quot;This is also affecting the supply of components and parts. We are using cooperating companies from which we are supplied 70 \\$quot;“ 80 per cent of semiconductor related devices and systems. It is only natural that they give preference to supplying companies with future potential. Companies lacking competitiveness cannot get hold of parts.

\\$quot;Semiconductor production processes constantly require trials, and this costs time and expense. In terms of expense, companies must bear expenses ranging from anywhere between several 10 million to several hundreds of million yen. This is hard for venture capital companies.

\\$quot;This fatally damages companies which do not have global networks. Since our customers are globalizing, we\\$quot;ll have to globalize as well. One of HORIBA STEC\\$quot;s strengths is that in the 1990, we set up our own network, first in the US and then in Asia. Furthermore, we set up as the HORIBA Group.\\$quot;

Personnel are important

\\$quot;Putting together a team is the job of management. People must be staffed properly and at proper places, irrespective of nationality or race. Intel, for example, is a typical company, which has done this and succeeded and we are also adopting this.

\\$quot;It is important that a company develop personnel because our producers can offer good products and reap trust from this. The phrase of the HORIBA Group last year was, \\$quot;˜brand strategy\\$quot;. Greatest preference was given to raising the level of completion for commercialization. We are slightly behind other companies, but I think our level of quality is high. In other words the value of our brand is recognized.

\\$quot;I feel indeed that in the world of technology, there is no cheating.\\$quot;

GR: Recently, even for MFCs, consolidation has stood out in areas other than among producers of MFCs. As result it appears that new technology has not occurred.

AH: \\$quot;The idea of total management system, such as gas supply system, makes sense as a business strategy. Because there are no technology managers in management, the development of technology might have been paid a little attention.

\\$quot;We have commitment to the technology of mass flow control and we are continuing to invest in R&D. There lies importance of existence, and we are a company which has survived in this way. This cannot be done with other large companies. We treat carefully the fact that, we are a great medium size company.\\$quot;

GR: Japan is the centre of development and manufacture. Will it continue being one?

AH: \\$quot;No, we do not cling to that concept regardless that our headquarter is based in Kyoto.

\\$quot;In Japan alone we hire 80-100 people a year, of which 70 \\$quot;“ 80 per cent are technical experts.

\\$quot;Although there are numerous good engineers in Kyoto, HORIBA STEC has been establishing bases overseas. It has established local companies in countries such as the US, Korea and Taiwan and has a history of expanding its assembly, services, and maintenance in these areas.\\$quot;

GR: What do you forecast in terms of business results for this year and next?

AH: \\$quot;Up to 2005 sales aim of the group were ¥10bn. We had 10 per cent as a target for operating income to sale, and we reached this in 2004.

\\$quot;In terms of sales, the semiconductor sector where HORIBA STEC is strong, has been in slump, and we felt that this would be a little difficult. At this point there has been a sharp recovery, and achievement is now in sight. After the next term, we plan to put together a mid term plan in March, and we will make a formal announcement.\\$quot;