Kenichi Matsumoto, Chairman and CEO, Sakura Global Holding Co.
As a global holding company operating within the medical device industry such as sterilization, pathology or cytology among others, which growth strategy has the company adopted in order to expedite its global expansion?
Sakura’s globalization strategy, is summed up in two words – global niche – to really globalize in a specific niche business.
And what is essential about this global niche is that health care business is extremely vast and a multi-billion-dollar industry. This idea of really focusing on a single field and becoming an expert within it makes us able to be more competitive in our prices and we are also able of capturing more of the market share, in fact over 50% of it.
I would also like to highlight that besides my business, my role in the government and public health industry has also been increasing recently. Due to my activity in the public area, the time that I am able to spend working on my own business is limited.
I am putting a lot of emphasis on fostering capable individuals within a business model by creating different institutions within the holding. Each of our international branches are independent legal entities that have their own presidents, although the Los Angeles entity has a Japanese person as a top leader at this moment, other entities such the one from the Netherlands has a Dutch president. A weak aspect of the Japanese business models is that when they globalize, they send their Japanese staff from Japan into those other countries to take on the top management. We did do that at the beginning, but after about 5 to 10 years, we completely replaced those Japanese to locals.
I am the 17th generation of this company, all of those before me were actually connected by heritage, but the next generation after me, the one who I assume will be in my position afterwards is not connected in blood. It will be a completely new person.
Getting back to the management of our branches overseas, day to day operation is managed by the established entity in the market, we are just share-holders. Those serving in Europe’s office have created legal entities and specific direct selling units in 13 countries within the continent, and each of those 13 countries have their own executive directors. We established the Italian entity in Venetia in January. In March, we also created entities in Spain and Portugal, and direct selling units in 15 different areas in those countries rather than using local distributers.
In terms of our future strategies, medical equipment alone would not be sufficient to describe the way our business is moving. We are also involved in the maintenance of such equipment and currently find ourselves taking advantage of the growth in this field.
In terms of our growth in developing nations there are sterilizers for industrial use that we assemble in Vietnam and distribute in Indonesia.
Different governments are also providing these developing nations with billions of dollars for innovation and for them to really be able to develop machinery and utilize the most advanced equipment.
That comes with your role as the chairman of Ometa (Non-Profit Organization)?
Yes, I have been the chairman of the Ometa for the past 23 years ever since I started.
When I went to Uzbekistan with the current Prime Minister Mr. Abe, we met the government’s Minister of Health, and we decided to create a medical device information center which was one of my suggestions.
As a result of forming the medical device information center where we don’t have distributers, if anything breaks down, or if they need support, the information goes to this center from where they can receive assistance to fix them.
Even when I do go to different countries to establish these centers, I am not being paid by the government or any firm to do it. It’s all my volunteer work. This is an example of one of my activities which is not necessarily directed for my own personal benefit nor for the firm’s benefit, but rather for all the Japanese companies.
There are about 18 cancer diagnosis centers in Kazakhstan. If the patients want a second opinion on their diagnosis, it would take 3 days by car (600km) for them to go to receive the second cancer diagnosis because it’s such a vast nation. I suggested that they should connect the firms over internet. Through current technology, they were able to do that.
I am close to 80 years old now, and I’ve been travelling the world with this kind of great vision and dreams. The former prime minister, Mr. Koizumi and I often meet. We never talk about politics, or money. It is just a plain friendship. This kind of network has been made through my volunteer activities.
Mr. Matsumoto you are not only contributing towards the development of the medical industries in the developing countries but you are also contributing towards positioning the Japanese medical technologies internationally in a very efficient way.
Yes, I believe so. The internationalization of our products is a win-win situation for everybody. Going back to Indonesia’s example, industrial sterilizers were also created in Vietnam and then distributed to Indonesia. We were able to cut the distance as well as the cost by doing so. There are so many varieties of ways now for this globalization process. However, to make something within one country and then send to other countries is not that simple anymore. We do create products that are made in Vietnam which we import back into Japan where they are polished in order to increase and enhance their quality.
Next week I will be going to Poland and Turkey. One reason is that there are not enough hospitals in Turkey and those that are available do not have enough equipment that is necessary for a proper healthcare service. Same scenario in Iran.
The reason why Poland is involved here is because we are actually going to semi-knock down products in Japan and then complete the process in Poland, and from there, they will be distributed to Turkey.
Which key products do you have on the pipeline and what major innovations should the market be expecting from Sakura Global Holding?
Many of them are still confidential so I cannot disclose them, nevertheless what I can say is that sterilization business is our future. For instance there are places where you need to wash your hands really well in order to clean them properly. We have a hand-scan that tells you if you really washed your hands properly or not, so you can see which parts of your hand you have missed cleaning. This is something we have imported from Europe and then have customized it for the Japanese market.
In terms of the other fields, which is the pathology and cytology, we need to develop more efficient diagnostic technologies. We are collaborating with other firms in the US and Europe to advance Japanese technologies.
I am convinced that we can create the technology that will advance and enhance cancer diagnosis as well. Right now the Japanese Ministry of Health is carrying out a home health care program to counter and respond to the aging population, where they do not necessarily always have to go to the doctor or to the hospital for the different scans or tests. We are trying to enhance that part for cancer diagnosis.
What final message would you like to send to our audience?
First of all I would like to highlight that mine is not all a success story. I’ve experienced failures as well. One example would be when I attempted to create a factory in Cuba, and for a Japanese firm to do that, it was the first time in this medical market. I really trusted my good fortune for the firm in Cuba and ran with it for 9 years from 1983-1992, then the Soviet Union collapsed in 1992 and it just didn’t go well afterwards.
Nevertheless, I perhaps could share what is the key to success for a holding group or firm to expand and to grow in a healthy way. It really lies in this one singular point of a person who stands at the top, and has the strength of taking full responsibility. You often have various executive directors, who do not want to take the responsibility and run away, so what happens is that they all start running away and nobody wants to take risks when it comes to moving for instance, billions-of-yen in terms of acquisitions. Often people feel scared, perhaps, they lack the ability for quick decision making. I have the spirit of taking that responsibility and then encourage the people surrounding me to do the same. At the end of the day, it really comes down to the leaders’ mindset and will-power, which influences the mood, atmosphere and energy that creates a company.