Heir to $2 Billion Knitting Empire Is Moving Into Car Parts

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Constructing a machine to assemble high-end Prada sweaters was simply the beginning.Now Mitsuhiro Shima, who took over his dad’s knitting-machine agency three months in the past, is setting his sights on — of all locations — the automotive business. The 56-year-old president of Shima Seiki Manufacturing Ltd. is in talks with auto-parts makers to make use of its expertise to develop lighter, non-steel elements, and plans to signal a deal subsequent fiscal yr.

It is the most recent evolution of the corporate based in 1962 by Masahiro Shima, a prodigy who made a collection of innovations earlier than he turned 20. Again then, Shima Seiki developed machines for making work gloves. Greater than half a century later, it is one of many high international suppliers of superior knitting machines, which create seamless and different clothes for manufacturers from Prada and Giorgio Armani to Quick Retailing Co.’s Uniqlo. And it isn’t stopping at that.”Our firm’s spirit is to create issues the world has by no means seen,” the youthful Shima mentioned in an interview at Shima Seiki’s headquarters in Wakayama, a small regional metropolis close to Osaka in western Japan.Whereas Japan is understood for its large producers, reminiscent of Sony Corp. and Toshiba Corp., it additionally has legions of smaller companies which can be world leaders within the area of interest merchandise they produce. In some circumstances, they’re missed by analysts and international buyers.

Not so for Shima Seiki, which counts BlackRock Inc., the State of California and Norway’s large sovereign wealth fund amongst its shareholders. The corporate’s inventory has greater than tripled since February 2016, with beneficial properties actually taking off after it signed a three way partnership settlement to provide “modern” knit merchandise for Quick Retailing, Asia’s largest clothes maker, in October that yr. The shares rose 2.four p.c as of two:06 p.m. in Tokyo on Monday, heading for his or her highest shut since 2007.Headquartered in one of many nation’s least populated and fastest-aging prefectures, which is called a significant grower of plums and mandarin oranges and for its custom of whale looking, Shima Seiki — and its inventor founder — are family names among the many locals.

The older Shima created a kind of stitching machine when he was simply 16 and went on to develop a completely automated glove knitting machine in the course of the postwar financial growth when there was large native demand for gloves for laborers.

“Individuals mentioned he was a genius inventor,” Mitsuhiro mentioned. Masahiro, now 80, took the chairman’s position when Mitsuhiro grew to become president in June.

However as of late, the corporate is maybe best-known in its business for being the pioneer of whole-garment knitting machines, which permit attire makers to provide total items of clothes with no seams in any respect. Objects that used to take hours or days can now be made in minutes on one machine, Shima Seiki has mentioned.

The units, which price as a lot as 18 million yen ($159,500) every, can produce the whole lot from pleated skirts to low-neck sweaters and even trainers. All this may be performed from begin to end in as shortly as 30 minutes.

Quick Retailing mentioned it sees the expertise spreading within the clothes business. Founder and proprietor Tadashi Yanai, Japan’s richest particular person, mentioned in an interview in March that dashing up the clothing-making course of will probably be key to his firm’s success.
Entire Clothes

“The entire-garment expertise by Shima Seiki permits us to create modern and high-quality clothes in a brand new, environment friendly approach that was not beforehand attainable,” Quick Retailing mentioned in an emailed assertion.

Whereas the attire business will stay Shima Seiki’s foremost focus, Mitsuhiro Shima says the corporate additionally plans to make use of its knitting expertise for auto-parts, as carmakers search lighter elements to extend power effectivity. The machines would make the frames of the elements utilizing textile materials, which might then be solidified by coating them with resin or different materials, Shima mentioned. He declined to present additional particulars of the corporate’s talks with potential companions.

“The business has a large provide chain,” Shima mentioned. “Of the varied industries switching out of metal elements, that is the simplest to enter.”
Revenue Development

Analysts count on Shima Seiki’s revenue to rise by greater than 50 p.c to 11.four billion yen within the yr ending March 2019, in contrast with 7.three billion yen two years earlier. The corporate initiatives that annual gross sales will attain 20,000 machines from subsequent fiscal yr, in contrast with 15,000 forecast for this yr, Shima mentioned.

However uncertainties lie forward, even within the firm’s foremost enterprise. Whereas demand from China, a goal market, is rising, it isn’t a provided that this can translate into precise orders, in keeping with Tachibana Securities Co.

“Whether or not or not the entire garment enterprise takes off will probably be key,” mentioned Yoshikazu Shimada, an analyst on the brokerage in Tokyo.

Nonetheless, one factor at the least is evident: as Mitsuhiro takes over the knitting-machine maker that his father constructed right into a $2 billion firm, he has no illusions about following in his footsteps as an inventor.

“I do not assume I’ve such powers,” Mitsuhiro mentioned. “So I need to change the corporate to at least one the place younger individuals’s modern considering pushes us forward.”

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