AKIHIRO TERAMACHI
President and CEO
THK CO., LTD.
With his trademark smile and crimson tie, THK President Akihiro Teramachi cuts a distinctive figure for a CEO. He points out that his red tie is not a fashion statement, but a display of THK’s corporate color. The smile comes naturally to Teramachi, particularly after another year of solid growth. Sales and profits have both hit new record highs, and the company’s ambitious target to double revenues in just a decade is within reach. Although THK is not yet a household name, its reputation is growing fast.
The firm’s move toward greater recognition may seem odd for a specialist maker of machinery components used in manufacturing a wide range of industrial equipment. THK, however, is no ordinary parts maker: Its ubiquitous products are essential to a wide range of industries. Since THK introduced the world’s first linear-motion guide (LM Guide) in 1972, the machine-tool and semiconductor equipment sectors in particular have come to rely on THK to help boost productivity through ever-greater precision and efficiency. Today, nearly all electronic devices and cars on the market rely on THK technology at some point during the production process.
“But we are not just an industrial machinery company,” Teramachi is quick to point out. He believes there are huge opportunities in the consumer markets as well. Today, THK is developing a range of innovative shock absorbers to protect buildings from earthquakes, and is also expanding into automotive components. “With the accelerating trend to incorporate electronics in automobiles, it is likely that not only a car’s power systems but even the engines themselves will be electrically powered. We expect demand for our products to grow as a result, because in order to make ‘fly-by-wire’ control of our cars a reality, THK’s high-precision LM Guides will be essential.”
“To stay ahead in this business, you have to be
prepared to jump at least two generations
ahead of what is in the market today.”
Precision is just one advantage that THK delivers. “LM Guides help customers to achieve enormous energy savings,” Teramachi says. They can dramatically reduce friction in the moving parts of a machining operation—by more than 90% in some cases—and thus reduce the energy used. And, by reducing the consumption of oil and grease in the bearings, there is less waste of petroleum-based lubricants in factories. “We are helping industry to save energy and reduce waste—good for our clients and good for the environment.”
THK’s sales hit a record of just under $1.52 billion in 2006, and Teramachi says with confidence, “We will achieve our sales target of $2.6 billion by 2010. The growth will come from expanding our geographical reach, which we call ‘Full-Scale Globalization,’ and extending the applications for our products through ‘Development of New Business Areas.’” It is embodied in the company’s ‘Fiscal 2010 Vision’—an ambitious ten-year, long-term management target that Teramachi announced on the company’s 30th anniversary in 2001.
Relentless focus on technological innovation remains key to the company’s future success. “Customers are usually right, but not always,” Teramachi says with a smile. “To stay ahead in this business, you have to be prepared to jump at least two generations ahead of what is in the market today. Even if your new model costs a bit more than the existing product, which is the case with our LM Guides, customers generally discover they can’t live without it—the benefits are just so substantial.”
And yet, he notes, “know-how is a perishable commodity” that companies must constantly refresh with creative ideas and constructive input from customers. With that philosophy, THK is well on track to precision-control its own growth well into the next decade.
