Manny is expanding its overseas sales with its precision processing technology for medical devices.
The Nikkei has conducted a survey targeting mid-sized listed companies, “NEXT Company,” with annual sales of less than 30 billion yen, focusing on the increase in operating profits for the period from September to November 2023 compared to the same period last year. Manny, a medical device manufacturer, topped the list with an increase of 475 million yen. Sales expanded primarily in Asia, boosting profits by 27%. Notably, regional companies in healthcare and the restaurant sector have made significant strides, incorporating international demand.
In October 2023, Manny began construction of a new factory in Takanezawa, Tochigi Prefecture. The facility covers approximately 16,300 square meters, with construction costs totaling 8.4 billion yen, aimed at automating medical device processing and inspection, signifying a shift towards smart factory operations. Production at scale is expected to commence by 2025.
Currently, over 90% of production is handled by a facility in Vietnam. The establishment of a new base in Japan is part of a strategic plan to mitigate geopolitical risks while controlling cost increases through automation.
For cataract surgery tools like ophthalmic knives, the new factory will set up a production system capable of manufacturing 2 million units annually, a 10-20% increase from current capabilities. Manny aims to meet both domestic and international demand by balancing high quality with low costs.
The demand for ophthalmic knives is rising globally due to the increase in cataracts associated with aging. “Our high-quality products have begun to be chosen even in Asia, including China, where price was the main concern,” the company stated. Based in Utsunomiya City, Manny specializes in precision medical device processing, such as creating tiny 140-micrometer holes in suture needles used in cardiovascular surgery. Leveraging such technological strengths, the company has expanded its range into specialized instruments for ophthalmology and dentistry.
In 2023, the company established a sales subsidiary in Malaysia, extending its market reach to over 120 countries and regions. Foreign sales already exceed 80% of total revenue. For the fiscal year ending August 2024, the company forecasts a 12% increase in consolidated sales to 27.5 billion yen and a 14% increase in operating profit to 8.2 billion yen.
Under the medium-term management plan up to August 2031, the company aims for a consistent 10% growth in operating profit. It plans to tailor its business approach to regional needs, targeting ophthalmic knives in China and India, and dental instruments in Southeast Asia, aiming for sales of 50 billion yen and operating profits of 15 billion yen in the final year.
In fourth place was Hokkaido-based online retailer Kitano Tatsujin Corporation. Sales of in-house developed products through their website “Kitano Comfort Workshop” led to a 437 million yen increase in operating profits, tripling the figure. The company’s success is attributed to the sale of beauty products for wrinkles and functional foods for improving bowel movements.
Sales of in-house developed products on the online shopping site “Kitano Kaiteki Kobo” and others are doing well.
Kitano Tatsujin Corporation has internalized its internet advertising production, customizing it for search engines and specific campaigns to improve profit margins. It adjusts ads based on the revenue and costs per customer over a set period, discontinuing or replacing them if profitability declines.
Currently, about one-third of the employees are engaged in advertising-related activities. “The effectiveness of employee training in advertising is becoming apparent,” the company stated, as the number of new customers on their own website and others increased by 44% in the period from September to November 2023 compared to the same period last year. With expansion into major online shopping sites like Amazon, the company expects a 61% increase in consolidated sales to 15.8 billion yen and a 2.8-fold increase in operating profit to 1.4 billion yen for the fiscal year ending February 2024.
Choushimaru, ranked sixth, is headquartered in Chiba City and operates a sushi chain across four prefectures. A recovery in foot traffic post-COVID-19 pandemic and a price adjustment in response to rising raw material costs led to a 13.5-fold increase in operating profit for the September to November 2023 period, with an increase of 301 million yen.
In response to changes in consumer behavior due to the pandemic, the company has focused on efficient store operations. From April 2023, all stores implemented a touch panel ordering system. Between June and October 2023, seven unprofitable stores were closed.
The company’s stock price reached a record high at the end of February. In March, it plans to open a new type of store in Tokyo catering to domestic and international tourists with high-end sushi offerings, aiming to tap into new customer segments.
Strategy Insights: AFC-HD Chairman Yukihiko Asayama Focuses on Expanding In-house Developed Health Foods
Chairman Yukihiko Asayama of AFC-HD AmLife Science
AFC-HD AmLife Science, headquartered in Shizuoka City, primarily engages in OEM (original equipment manufacturer) production of health food products. Amid recovering inbound tourism demand, the company is also focusing on sales of its products. Chairman Yukihiko Asayama is enthusiastic about expanding distribution channels in China and Southeast Asia.
Founded in 1969, the company started as a sales agent for health food products and entered the manufacturing sector as part of its business expansion. The core healthcare business involves contract manufacturing of supplements and boasts early adoption of pharmaceutical-level manufacturing and quality control systems, according to Chairman Asayama.
Recently, with the rise in health consciousness, there has been an influx of beverage and food manufacturers into the health food sector, increasing customers. The rebound in inbound tourism consumption is also a positive factor. Sales of high-margin proprietary products abroad have grown, with operating profits for the September to November 2023 period reaching 478 million yen, a 257 million yen increase from the previous year.
The company is accelerating its overseas expansion, targeting markets in economically growing regions. In 2023, it established a local corporation in Chongqing, China, with plans to set up a factory for its products. “We want to capture the demand of affluent consumers in each country by leveraging the strength of Japanese-made products,” says Chairman Asayama.
Column: Survey Overview
The survey targeted approximately 270 companies with recent fiscal year sales of less than 30 billion yen (excluding those that changed their fiscal year end), analyzing the increase in operating profit for the September to November 2023 period compared to the same period last year. Selection was based on companies that also projected increased sales and operating profit for the full year.
Focus Company: INFORICH Expands Mobile Charger Rentals in Asia
The number of mobile charger stands installed exceeds 60,000 both domestically and internationally.
INFORICH is offering a mobile charger rental service “ChargeSpot” for smartphones. With the recovery of human traffic from the COVID-19 pandemic, the company reported a 75% increase in consolidated sales for the December 2023 period, marking its first net profit since going public. The company aims for further growth by tapping into overseas demand, particularly in Asia.
With the concept of “rent anywhere, return anywhere,” the company has increased its installation locations, partnering with a wide range of industries including stations, convenience stores, department stores, and banks. By the end of 2023, the number of stands installed domestically reached approximately 42,000.
President Hiroshi Akiyama explains, “The recovery in human traffic in 2023 has brought visible results from our prior investments in increasing installation locations.” The company has focused on places with high foot traffic and longer stay durations, such as Tokyo Dome City in Bunkyo Ward, Tokyo.
For the December 2024 period, the company anticipates a 30% increase in consolidated sales to 10 billion yen and a 2.7-fold increase in net profit to 1.5 billion yen. The increase in brand recognition is expected to attract new users. In collaboration with Fuji Electric, the company is also expanding the installation of vending machines equipped with charging stations, with a positive outlook on the increase in inbound tourists. Rental and return across borders, such as renting in Japan and returning after returning home, are also possible.
Overseas, the company has already expanded into Taiwan, Hong Kong, and Thailand, and recently launched services in Singapore and Macau. “Regions with high population density have a demand for smartphone charging,” says President Akiyama, aiming for further penetration through franchises. The company plans to increase the number of overseas users by 30% from the previous year to 420,000 by December 2024.