There aren’t many companies that can truly lay claim to the fact that their business empire covers such a plethora of interests that it benefits customers no matter where they live, making the world a better place. Yokogawa is one of them.
Yokogawa provides advanced technology solutions in measurement, control and information and operates across three major industry segments – energy and sustainability, materials and life sciences. It spans industries such as oil, natural gas, renewable energy, chemicals, power, pharmaceuticals, food, paper, steel, mining, water treatment and more.
Established in Japan in 1915, Yokogawa has built a robust global network. With a presence in 60 countries and regions, encompassing 129 companies and a team of over 17,000 employees, the company operates manufacturing facilities in 13 countries and an extensive network of over 200 service outlets.
Through this extensive global framework, Yokogawa collaborates closely with partners to pave the way toward a sustainable future.
Foundations of success
Yokogawa has an impressive history of more than 100 years. As early as 1957, it entered the Chinese market, exploring business opportunities and establishing collaborative relationships with Chinese technology leaders and industry players.
In 1965, it established a representative office in China and in 2008, integrated several affiliated companies to form Yokogawa China, headquartered in Shanghai.
For an in-depth exploration of the company’s corporate philosophy, future vision and the invaluable ‘China Experience’, there’s no better choice than Kazuhiko Takeoka, Yokogawa’s Vice President & Regional Chief Executive for the Association of South-East Asian Nations, the Pacific, China and Korea and President of Yokogawa China.
"Yokogawa places a strong emphasis on the quality of solutions, products and systems, firmly believing that delivering practical solutions and expert services is of paramount importance to our customers. We are committed to continuously nurturing long-term trust with our customers, which serves as the foundation for building strong partnerships," he explains.
"Even when faced with crises like the COVID-19 pandemic, Yokogawa leans on its strong foundation of trust with customers to overcome challenges and collaboratively find solutions. This forms the bedrock of Yokogawa’s operations in China."
Over the past 60 years, Yokogawa has successfully secured a strong foothold in the Chinese market, developing its own unique approach to operations.
In China, Yokogawa offers a wide range of systems and products and the vast market potential in the country remains evident, and its substantial contribution to the global supply chain, especially during the challenges posed by the pandemic, highlights its critical role.
Yokogawa places a strong emphasis on the quality of solutions, products and systems, firmly believing that delivering practical solutions and expert services is of paramount importance to our customers. – Kazuhiko Takeoka
"This is precisely why the Chinese market is of such paramount importance. China is a nation highly regarded by Yokogawa, and it is imperative that we secure the support of our customers and actively contribute to China’s ongoing development," Takeoka says.
Yokogawa’s strategic approach combines global and regional considerations.
"Yokogawa follows a strategy that combines international and local elements. The company’s global business strategy is crafted at the corporate headquarters, tailored to individual regions and countries and executed by regional headquarters," he explains.
"Currently, Yokogawa operates with 10 regional headquarters, recognizing the vastly different business landscapes in each country. This is why a localized strategy is crucial for market success."
Localization is key
In order to accelerate the company’s market entry, he says it’s essential to collaborate and engage with the government.
"This involves gaining a clear understanding of the government’s future vision, how it intends to achieve it, the evolving regulatory landscape and the specific areas of technology investment the government plans to make. Early awareness of these factors is essential," he says.
Localization is key, and Takeoka underscores the significance of collaboration with local partners. Over the years, Yokogawa has focused its efforts on linking information, organizations and enterprises to promote symbiosis.
While Yokogawa has a wealth of business experience in China, with numerous connections to customers and institutions, he says that alone is not sufficient.
Yokogawa also shares information with various overseas investment companies to identify suitable partners for collaboration. – Kazuhiko Takeoka
This year, the company established the China Public Relations Room, enabling Yokogawa to closely follow Chinese government developments and understand its perspectives. "This department will promptly gather insights from various sources and continue to work diligently to convey our message, facilitating the implementation of solutions," Takeoka explains.
In addition to local partners in China, Yokogawa also assists overseas investment companies from Japan, Europe and the United States in establishing networks in China.
"While they may possess the latest technological advantages or unique business models, when it comes to navigating the complexities of survival and expansion in the Chinese market, Yokogawa’s expansive network can provide valuable insights and support real-time adjustments for these companies," he says.
"Yokogawa also shares information with various overseas investment companies to identify suitable partners for collaboration. Through ongoing discussions and the establishment of ecosystem relationships, we collectively develop solutions, address challenges for customers and leverage our network to support them in achieving their goals in China."
Achieving sustainable development
Yokogawa is also actively working towards the United Nations Paris Agreement to achieve its sustainable development goals by 2030. These goals align with China’s official plans for the future.
"Yokogawa’s goals for 2030 are to make significant contributions in three key areas – achieving net zero emissions, ensuring wellbeing and making the transition to a circular economy. These goals are closely aligned with key indicators of the Sustainable Development Goals [SDGs]," he explains.
"We are taking cues from China’s 14th ‘Five-Year Plan’, contemplating how, as members of society, we can assist and support the Chinese government in achieving it."
The 14th ‘Five-Year Plan’ refers to the national blueprint for China’s economic and social development from 2021–2025. In addition to economic development and improving people’s livelihoods, it emphasizes green transformation, reducing carbon emissions and energy consumption.
"Yokogawa places particular emphasis on the safety, security and sustainability of society, which are integral parts of the 14th ‘Five-Year Plan’," he says. "The technologies we are developing are fully aligned with these objectives."
Yokogawa is poised to explore more new business domains, including venturing into the biopharmaceutical sector, with potential expansion into food and beverage being considered. – Kazuhiko Takeoka
While Yokogawa’s presence in the Chinese market is presently not sufficient to achieve the company’s three goals, Takeoka says it is striving to introduce cutting-edge technology and embark on digital transformation, which encompasses AI, virtual reality, extended reality, cloud technology and edge solutions.
"However, some of these technologies have not yet gained widespread coverage, which is why we are actively collaborating with external companies," he says.
He says human wellbeing is also a significant objective. Yokogawa has ventured into the life sciences market, which is closely linked to public health. "This is a field we are about to embark on," he explains. "And we have already initiated this venture in collaboration with local partners in China."
Another focus area involves venturing into emerging industry sectors, which are witnessing a surge in new technologies, particularly in the realm of renewable energy.
"By harnessing these resources, we can reduce energy consumption, lower carbon emissions, and the development of new ventures in areas such as clean energy, automotive LED batteries, semiconductors, and mobile technologies," Takeoka explains.
"Yokogawa is poised to explore more new business domains, including venturing into the biopharmaceutical sector, with potential expansion into food and beverage being considered."
Viewing profit as the sole indicator is outdated, according to Takeoka. "Today’s successful businesses prioritize social responsibility. Achieving sustainable development goals is now an undeniable new mission for companies."
Contributing to society
How a company contributes to society or a nation is proven through non-financial metrics, he explains.
"For example, how the company’s solutions reduce carbon emissions, which is unrelated to financial figures. However, this is the contribution everyone discusses when it comes to SDGs. Thus, ESG is regarded as a pivotal metric for a company’s sustainable business practices," Takeoka says.
Many large Chinese state-owned enterprises have begun showcasing reductions in carbon emissions and decreased energy consumption in electricity, water, steam and coal as part of their ESG indicators to demonstrate their contributions to society. However, achieving these objectives requires the application of extensive technology.
To this end, he says Yokogawa offers numerous relevant solutions.
"Our environmental monitoring systems collect, measure and store data on factors like temperature and humidity, enabling the monitoring of environmental conditions in pharmaceutical production zones, quality control areas, storage facilities and how factories optimize resource utilization for operations or manufacturing end products, among other applications," he explains.
We have well-established solutions for these challenges, and they have already been successfully implemented in various enterprises. – Kazuhiko Takeoka
"We have well-established solutions for these challenges, and they have already been successfully implemented in various enterprises."
As a solutions provider, Yokogawa faces another challenge – how to enable their partners to successfully undergo transformation together.
"When it comes to the solutions we offer, customers may have doubts about their effectiveness. That’s why Yokogawa takes an internal approach, initially applying these solutions within our own factories," Takeoka says.
In China, Yokogawa operates two factories, one in Chongqing and a larger one in Suzhou. "Within our factories, we have deployed an environmental monitoring system. This serves as a practical demonstration of how these systems can be optimally employed in manufacturing," he says.
"Through this approach, we provide our customers with a firsthand understanding of how Yokogawa’s solutions are put into practice."
Journey to industrial autonomy
Transitioning from industrial automation to industrial autonomy (IA2IA) is a concept Yokogawa has been promoting consistently in recent years.
Unlike traditional automation, which relies on human intervention, autonomy implies that cognitive systems can independently perform all tasks, and possess both the ability to self-manage and control and the capacity for learning and adaptability. This enables factory assets and operations to respond with minimal human intervention, ultimately aiming for self-sustaining facilities.
While this process is inevitable, reaching the destination is a challenging endeavor.
"How can we achieve industrial autonomy? This requires greater and improved technological integration within enterprises, spanning refineries and chemical plants to even public transportation systems," Takeoka says.
"However, autonomy isn’t solely about complete automation; it also entails modernizing assets. Outdated systems and infrastructure can hinder seamless technology integration, making it challenging to attain autonomy in such situations.
"This is why we propose a comprehensive plan and the development of a mature model to evaluate a company’s current status and outline its future growth direction. Of course, this requires a significant investment of time; it’s a lengthy process."
For some customers, he says full autonomy may not be the best option for company operations and partial autonomy may be sufficient.
We remain dedicated to exploring the application of such AI in various processes and factories, with the aim of expanding autonomy to enhance productivity and conserve energy. – Kazuhiko Takeoka
Consequently, he says Yokogawa proposes development plans and calculates the costs involved. "This implies the need for financial investment, but to achieve these goals, challenges such as resource limitations or skills gaps will need to be addressed," he says.
"Today, the extensive use of digital technologies is inevitable but the key questions revolve around the maturity of these technologies, the ease of implementation and the chances of failure."
"These are all topics that need to be discussed with our clients to make the best decisions, and, ultimately, incorporated into our overall plan. Over time, this is how we can determine the direction and methodology to transition from industrial automation to industrial autonomy."
In March 2022, with the help of advanced AI and IoT technologies, Yokogawa accomplished a remarkable feat – 35 days of autonomous control at a chemical plant in Japan, all without any human intervention. "This groundbreaking achievement in industrial control effectively demonstrates the safe application of reinforcement learning AI in real factory settings," Takeoka says proudly.
In March 2023, following a year of successful operation, Yokogawa’s autonomous control AI was officially integrated into ENEOS Materials’ chemical plant, marking another impressive milestone.
"This represents the world’s first instance of implementing reinforcement learning AI directly to manage factory operations. Concurrently, in the same month, Yokogawa expanded its IA2IA solution to Chinese clients through a new application hosted on Alibaba Cloud," he explains.
"Moving forward, we remain dedicated to exploring the application of such AI in various processes and factories, with the aim of expanding autonomy to enhance productivity and conserve energy."
Embracing post-pandemic opportunities
The pandemic sparked an unprecedented economic and social crisis, yet it unexpectedly accelerated the progress of industrial autonomy.
"Before the pandemic, many in the market had viewed industrial autonomy as a formidable challenge. However, today, many are contemplating remote operations and reducing human intervention, making it a pivotal factor in our customers’ digital transformation considerations," Takeoka says.
"I’ve always believed that achieving industrial autonomy is entirely possible. But we do need our customers to share their ideas, aspirations, dreams and ultimate goals as together, we can develop and execute a comprehensive plan, while also considering sustained investments to turn this vision into reality."
Takeoka remains confident that digital transformation technologies will continue to progress, even though human participation in decision-making processes may still be necessary in the short-term.
I’ve always believed that achieving industrial autonomy is entirely possible. – Kazuhiko Takeoka
He emphasizes that while the pandemic has brought significant disruption to businesses, it has also presented an opportunity for deeper reflection on the importance of digital transformation.
In the post-pandemic era, Yokogawa, as a solution provider in the industrial automation sector, remains committed to driving digital transformation. This entails improving operational transparency and flexibility, offering continuous tailored consulting services and providing comprehensive support to better align with customer needs.
"Yokogawa will closely monitor evolving market demands, continuously refine its products and services and leverage its decades-long expertise in customer operations, automation and operational technology," Takeoka explains.
"This will be combined with cutting-edge digital advancements to support customers in their pursuit of a digital transformation toward sustainability, intelligence and autonomous operations."
Creating value through collaboration
Yokogawa’s slogan, ‘Co-innovating tomorrow’ establishes the corporate philosophy of collaborative innovation for a brighter future. This is not just the belief of Yokogawa’s leaders, but is also the company’s competitive advantage.
"Only by forging enduring partnerships with stakeholders across various industries can we achieve sustainable growth and meet societal needs," Takeoka says.
"Yokogawa stands out from its competitors with its integrated delivery capabilities. Our products and system solutions, on their own, may not suffice for all requirements. It’s crucial to establish an ecosystem with our partners for the seamless integration of these solutions."
He says the company’s integration capabilities provide added value to its customers. "Yokogawa has successfully executed numerous large-scale projects in China, which involved extensive integration efforts and in-depth discussions with clients to determine the practical project execution methods," he explains.
"Yokogawa’s commitment to quality sets it apart. We prioritize not only product quality but also delivery, design and execution quality. When combined with our long-standing customer trust, these factors create a potent force that helps us overcome obstacles and reach our customers’ goals."
The collaborative and trust-based partnerships that Yokogawa has established have not been formed overnight, however. Takeoka explains that the company champions the concept of ‘symbiosis’, emphasizing cooperation across various industries, organizations and departments to foster mutually beneficial outcomes.
Yokogawa’s commitment to quality sets it apart. We prioritize not only product quality but also delivery, design and execution quality. – Kazuhiko Takeoka
"Collaboration means that even if Yokogawa lacks an idea, our partners may have one. When they lack the corresponding solution, we can work together to achieve it. This highlights the importance of building a collaborative ecosystem," he says. "When two companies collaborate, it can result in a mutually beneficial synergy."
He shares the example of when ecosystem partners possess the expertise required to venture into new business domains that Yokogawa may find challenging to enter. "By partnering with them, we can tap into new markets. Conversely, our partners may possess valuable technology but lack access to the industrial automation sector," he explains.
"Yokogawa can facilitate introductions to other partners within its network. This collaborative approach not only fosters mutual support but also generates additional business opportunities, ultimately benefiting both parties."
He says the key to corporate success lies in collaborative teamwork.
"We are currently in the midst of a VUCA [volatility, uncertainty, complexity, ambiguity] era, where the business environment is marked by volatilities and uncertainties. Customer needs are ever-changing, and this is why we must promptly seek out collaborative partners, make swift investments and develop solutions, all while engaging in proof-of-concept validation projects," he explains.
"Once these ideas are validated, we strive to present them to our customers and even the wider public. Simply concentrating on financial relationships between companies does not serve the greater good of society."
A culture built on principles
The key to a company’s success lies in its corporate culture and leadership style, as these foster unity among employees and guide the company in the right direction. In this regard, Yokogawa stands out with its distinctive approach.
"At Yokogawa, our culture is built upon principles of respect, trust and relentless determination. Once we make a commitment and enter into a partnership, we stand by it without wavering. This is the ethos we embrace," he stresses.
"When we make a promise, our leadership cannot escape from it. Regardless of whether we achieve success or encounter setbacks, we are accountable."
Takeoka emphasizes that this is not merely a spirit that the company endorses but rather a principle that is wholeheartedly implemented at Yokogawa.
"Whether confronted with new challenges or existing business obstacles, even in day-to-day operations, I must shoulder the responsibility for achieving our goals. I must exemplify my dedication and perseverance to my team. Even if my capabilities may not encompass everything, this is the attitude I steadfastly uphold," he asserts.
It’s imperative for me to promptly accept challenges, exhibit responsibility, set a clear direction and maintain transparency, regardless of whether the outcomes are positive or negative. – Kazuhiko Takeoka
"I must also be attentive. When I encounter statements such as, ‘Your decision is incorrect, you should rethink it’, I must be willing to learn and respect my employees. This is my leadership approach."
Takeoka’s background in engineering has had some impact on this managerial approach.
"During my professional journey of 30-plus years at Yokogawa, a significant portion of my focus has been on technical areas like engineering, delivery, development, sales and technical promotion. Whenever I face challenges in my career, I find myself reflecting on my earlier days as an engineer," he says.
"Regardless of the circumstances, it’s imperative for me to promptly accept challenges, exhibit responsibility, set a clear direction and maintain transparency, regardless of whether the outcomes are positive or negative.
"This is my management style. While it might be somewhat intuitive, I often reflect on the underlying logic and make earnest efforts to appropriately communicate my management principles to my colleagues, ensuring their understanding."
As a centenarian company, Yokogawa is proud of the deep roots it has established in the Chinese market over the last six decades.
Looking ahead, the company strives to maintain collaborative efforts with its partners across various sectors, paving the way for innovation in smart manufacturing and sustainable development. It also looks forward to making additional contributions toward the transformation and progress of China’s manufacturing industry on its path towards sustainability.
Partner in strength – Mizuho Bank
Mizuho Financial Group, a Fortune Global 500 company, is a comprehensive financial conglomerate comprising subsidiary entities such as Mizuho Bank, along with trusts, securities, asset management and research divisions.
As far back as the 1980s, Mizuho Bank recognized China’s significance as a pivotal hub for its international business operations. In 1981, the company established its first branch in China and took the lead in 2007 by becoming one of the first foreign banks to establish a locally incorporated bank in the country.
"In Japan, Mizuho Bank has enjoyed a robust business partnership with Yokogawa for over 70 years. On the Chinese front, our collaboration started when Yokogawa entered the Shanghai market in 1980. We have actively worked together during that time, providing guidance on investment climates and regulatory requirements," says Hiroshi Ohtahara, Deputy President of Mizuho Bank China.
The period between 1980 and 2010 witnessed frequent changes in China’s financial system and foreign exchange regulations. And as Yokogawa’s business partner in China, he says Mizuho Bank offered substantial support in detailed negotiations with local authorities, among other services.
Ohtahara states that in this rapidly changing era, Mizuho Bank has earned Yokogawa’s trust by addressing their needs in a timely and flexible manner. "I believe this support has been a key factor in the appreciation we have received," he says, as he reflects on the bank’s long-standing relationship with Yokogawa.
Mizuho Bank aims to be an integral part of the process, serving as a facilitator between companies. – Hiroshi Ohtahara
"In the fiercely competitive Chinese market, expanding our operations isn’t the only solution for future growth. We make valuable recommendations to our clients based on a thorough analysis of their specific needs," he says.
"When crafting our business strategy, our primary concern is avoiding empty rhetoric. We remain agile and adapt our strategy as the business landscape evolves. Through our collaboration with Yokogawa, they have emphasized the significance of this approach to us."
As Yokogawa advances toward its goals, Mizuho Bank aspires to play a significant role within its ecosystem. Ohtahara says that the two companies have engaged in collaborative projects in recent years, particularly in the fields of life sciences and sustainable development-related ventures.
"Yokogawa has defined its growth strategy for the year 2030, with a focus on expanding its core business strengths and venturing into new areas. In such a scenario, the goal is not only to acquire highly capable core businesses but also to gain a comprehensive understanding of the entire solution landscape," Ohtahara says.
"This involves evaluating how to establish and develop the complete ecosystem. Mizuho Bank aims to be an integral part of the process, serving as a facilitator between companies."
Apart from offering financial and advisory services, in these new domains, the bank will assist Yokogawa in executing its strategic plans.
"This includes assessing the business landscape, formulating new partnership strategies and exploring opportunities to expand its operations, potentially through mergers and acquisitions to foster greater collaboration in non-financial realms," he says.