We will continue to show our presence in the international market as a company that creates new value of filtration.
Representative Director and President Atsuhiko Yamazaki
Contributing to the Advancement of Society with Our Filtration Technologies
Ever since our founding in 1956, we have been a driving force in the filter business, pursuing perfection in everything to do with filtration, based on our corporate philosophy of “仕濾過事” (Rokajinitsukafuru). The phrase “仕濾過事” (Rokajinitsukafuru) captures our strong desire to“contribute to society through the filtration business.” This mentality has been passed on as our DNA, acting as an important guideline that highlights what YAMASHIN-FILTER is all about. I also see our purpose is to contribute to the advancement of society and to support people’s quality of life based on the filtration technologies that we have developed over many years. Under the “仕濾過事” (Rokajinitsukafuru) philosophy, our construction machinery hydraulic filter business is expanding domains in which we could contribute to society based on the three themes of “the environment,” “air quality,” and “health.” In 2019, we made AQC Corporation, an air filter specialist, a Group subsidiary, and in doing so expanded opportunities for filter use to not only air conditioning systems in buildings but also medical devices and rolling stock both in Japan and overseas. Going forward, we believe we can also contribute to mitigating the increasingly severe air pollution problems, with a focus on emerging nations. It is said that people spend 80% of their time indoors, and thus indoor air quality has a direct link to health. We will further evolve our outstanding filter technologies, which “can capture more contaminants with lower resistance,” to ensure the health and comfort of people all around the world.
What Does a Proper Business Look Like?
A company must create products that are useful to society, and fulfill its social responsibility. Manufacturers are required to consider their impact on the environment during every step from procuring raw materials through to disposal. We focus our attention on disposal after use, in particular, and develop compact and long-life products that can help reduce waste. While it is possible to reduce waste and CO₂ emissions by extending the service life of products, this also brings with it the dilemma of reduced sales. In fact, at the stage of developing long-life products, concerns arose on the balance between income and expenditure. We, however, have a mission to provide the world with what it really needs. In the choice of profit or the environment, it was clear that the path we should take is to minimize our impact on the environment.
Ultimately, the reduced maintenance burden on the users of our long-life products has led to them choosing our products, which has triggered a positive impact on our sales. This is a good example of a company profiting from making the right decisions based on a long-term perspective, rather than pursuing short-term profits.
We have an ESG management mindset to prioritize the benefits of the environment and society in this way and achieve company profits at the same time. In 2022, we set up the Yamashin Sustainable Solutions (YSS) Committee. This committee leads the promotion of sustainability initiatives to advance our ESG management efforts.
In particular, the tackling of environmental problems is set as a materiality, and we are accelerating our efforts more so than ever before. Shortly after setting up the YSS Committee, we endorsed the TCFD Declaration and thoroughly disclosed relevant information. As a result, our CDP score, which was D in 2022, was raised to B the following year. Also, we plan to formulate medium- to long-term targets for reducing CO₂ emissions, and thus declared our commitment to acquiring SBT Certification. We will advance our initiatives based on this result.
A Robust Supply Chain With No Disruptions
Another of our social responsibilities is to keep supplying products to our customers. We have three plants: our Saga Plant in Japan, one in the Philippines (Cebu Island), and one in Vietnam. We sell products not only domestically but also globally including North American markets, Europe, and Asia. Naturally, we are significantly affected by global trends, and so we work tirelessly to build a robust supply chain.
In establishing our Vietnam Plant, we focused on BCP and flexibility, utilizing our partnerships with local suppliers that kept our supply available even during the logistical chaos brought about by the COVID-19 Pandemic. Our Cebu Plant was set up as a measure against the appreciation of the yen and offers excellent cost competitiveness. We will advance our efforts to build a global supply chain that can cope with such logistics risks and fluctuations in currency conversion, ensuring we have a strong position as a leading global niche company whose forte is construction machinery filters. Our aspirations do not stop here, however.
In the newly announced Medium-Term Management Plan, we have adopted three medium-term strategies: “undertake initiatives to create new value,” “strengthen management with a focus on capital costs,” and “promote ESG management.” Using these strategies, we will achieve rapid growth as a top global company and evolve into a one-of-a-kind comprehensive filter manufacturer that sets the next global standard.
Since our founding, we have consistently pushed forward with a dedication to “contributing to society through the filtration business.” In addition to meeting the rising expectations toward ESG management from our stakeholders, we will further enhance our presence as a company that is also well-regarded by ESG rating agencies.
While looking ahead to “仕濾過事” (Rokajinitsukafuru) in 2050, we will continue to promote business that helps to resolve the issues of society.
Director and Senior Executive Vice President Hiroaki Yamazaki
Our Founding Spirit Remains the Same Despite Major Changes in Society
The YAMASHIN-FILTER Group has focused on research and development to provide high-added-value products to its customers since day one. With many industry competitors procuring filtration media externally, the fact that we are particular about developing filtration media in-house is down to our desire to provide even greater added value. In 2022, we consolidated our separate research and development sites into the Yokosuka Innovation Center. It is both a rare development site that has a field and is able to conduct realistic tests using construction machinery, and a place to directly ask our customers what they want while undertaking tests with them.
Although we achieved our goal of making research and development more efficient and gathering information about our customers’ needs by consolidating our sites, we face the challenge of how to bring to life our “仕濾過事” (Rokajinitsukafuru: Contribute to society through the filtration business) stance, which is our company DNA, in a society that will continue to change significantly. We have engaged in repeated discussions with our research and development staff about what the vision is for the company in the years to come, reflecting on what kind of company will we become in
2030, the midpoint for achieving carbon neutrality, and 2050, the finish mark.
Going forward, in addition to new products and technologies, it is likely that calls for sustainable development will get stronger from such viewpoints of the environment, human rights, and the economy. We will not simply pursue profit but meet the needs of the times while painting a clear picture of an ideal society.
Management That Motivates Employees and Creates Value
The YAMASHIN-FILTER Group has put forward wellbeing management in its Medium-Term Management Plan announced in November 2024. We are striving to enhance employee motivation and engagement by improving the physical, mental, and social satisfaction of each employee. We are also working to meet the demands of the times and advance initiatives to make our company more attractive.
As efforts to establish a good work environment, stemming from the COVID-19 pandemic, we have introduced a flex-time and telework system and changed working hours to 7:30 to 16:30, which is an earlier start and finish time compared to other companies. Although there were people for and against this change when it was initially introduced, once it got going, we received a lot of positive feedback from employees who like their new lifestyle due to their new working hours. Some employees said things like, “I have more time to spend with my family,” and “I now have time to enjoy my hobbies after work.” Ultimately, our unique endeavors have led to good opportunities to improve employee engagement.
To improve engagement, a fair HR appraisal is also essential. Every time I go on a business trip overseas, I talk with the local employees. By doing so, I get to learn our employees’ true feelings, which I don’t get to hear in Japan, as well as see how they work. What I realize is that if the evaluator is not able to do a proper evaluation with a sense of the actual workplace, then it will not be a fair evaluation that the individual will accept.
We focus on the turnover rate of employees, in particular, and see leaving the company as an indication of how the employee feels. As a company, we end up losing valuable personnel. Mental and physical well-being and happiness of employees, a fair appraisal of performance, and compensation that matches this. It is having all three of these that makes well-being management. I believe it is about being an attractive company where talented individuals work with us for a long time.
The Supply Chain Is a Test of a Company’s dignity
Our business is building a flexible and resilient supply chain through partnerships with many suppliers. From the unprecedented experience of the COVID-19 pandemic, we have come to recognize that we live in an era where unexpected events can occur. We must improve our self-recovery skills for when a problem occurs. If a sustainability problem such as in relation to human rights or the environment occurs, to resolve that problem swiftly, I believe we must conduct initiatives as one with our suppliers.
To achieve this goal, we are proceeding with initiatives to formulate a Sustainable Procurement Policy which includes items such as human rights and occupational health and safety. We are also working to request cooperation in the policy’s implementation. While it is an important initiative to align ourselves with many companies promoting sustainability, a challenge we face going forward is to reduce the sustainability risk in the supply chain by bridging the gap between embedding the Code of Behavior and the actual state of affairs.
The president and I have continued to visit our domestic and overseas suppliers to try and grasp the situation. Although I have confirmed with my own eyes that we do not have a clearly poor work environment or human rights infringements, can it be said that we fully know the state of affairs with a paper-based survey and local site inspections? As long as there is competition over cost between suppliers, we are deeply concerned about the possibility that our business might be built on the sacrifices of others in areas we cannot see. That is why I believe it is our responsibility to address this issue sincerely.
Sustainability issues cannot be resolved overnight and are costly to resolve. Supposing we spend money and work hard, it is also uncertain when these efforts will pay off and appear in our top line. I think, however, that prioritizing our immediate profits and pushing back sustainability will call into question our character as a company.
Our YAMASHIN-FILTER DNA, in particular, is the very mindset of contributing to society through the filtration business as per our corporate philosophy of “仕濾過事” (Rokajinitsukafuru). I am convinced that upholding this principle is the dignity of the company, and it is the only way to achieve both long-term improvements in our corporate value and contribution to society.
