PS Opening Ceremony

Metal Technology Co. Ltd. (MTC) (Tokyo, President Hideo Hatanaka) is currently in the midst of new challenges, including large-scale investments and corporate culture transformation. As one of the world's largest providers of HIP (Hot Isostatic Pressing) services, the company enjoys strong trust from advanced industries such as nuclear fusion, semiconductors, and aerospace. There is also significant demand from a sustainability perspective, including material reduction and extended component lifespan. Seizing the opportunity of an M&A deal in Sweden, the MTC Group aims to move beyond its existing framework and enter the next stage.

On December 11, MTC Powder Solutions AB (hereinafter referred to as MTC-PS), a subsidiary of MTC, held a grand opening ceremony for its new factory in Hallstahammar, Västmanland County, in southern Sweden. In 2020, the company acquired and made a subsidiary of the former Sandvik Powder Solutions, previously part of Sweden's Sandvik Group. By expanding HIP facilities and installing a new water quench heat treatment furnace, MTC-PS aims to triple its production capacity compared to previous levels to meet increasing demand from industries such as oil & gas, nuclear and aerospace. The factory has commenced operations since early January this year.

Tetsuto Hirayama, MTC-PS Chairman and a Director of MTC, reflected on the acquisition:"MTC-PS possesses outstanding manufacturing technology and development capabilities, making it a company we were determined to acquire. However, simply purchasing the company was not enough; from the beginning, we knew that growth potential could only be realized through new factory investments and equipment expansions." After four years, this vision has now become a reality.

MTC-PS specializes in Near Net Shape (NNS) Powder Metallurgy manufacturing, which produces components close to their final shape using HIP technology. The company is particularly strong in large-scale product manufacturing. Currently, there is high demand for NNS products such as manifolds and hubs in the offshore oil and gas market. Looking ahead, demand for NNS is also expected to grow in nuclear fusion, nuclear power, and industries requiring wear and corrosion-resistant components.

The key advantages of the NNS method include significant reductions in material waste and machining time compared to conventional manufacturing methods. Additionally, the reduction in welded joints allows for smaller components with improved reliability. Currently, only two companies in Sweden, including MTC-PS, specialize in large-scale NNS product manufacturing. However, unlike typical Japanese technology-driven companies, MTC-PS also excels in sales capabilities.

Mr. Tetsuhito Hirayama noted the cultural differences between Japan and Sweden in sales approaches:"The Sales cultures differ between Japan and Europe. I am deeply impressed by the capabilities of the sales engineers here. In Japan, cost reduction is the top priority, whereas in Europe, the business culture ensures that companies secure a margin while delivering benefits to customers." For instance, MTC PS has been manufacturing NNS parts for the subsea oil & gas designed to withstand harsh environments for over 30 years. This focus on lifecycle cost performance enables a strong sales strategy.

It is uncommon for a mid-sized Japanese metal processing company to successfully acquire a European firm, making this achievement particularly noteworthy. While navigating differing accounting systems during their first experience with PMI (Post-Merger Integration) presented some minor challenges, the process moved forward without major issues. Many Japanese companies face difficulties with cultural integration in overseas M&A, but in this case, Hirayama highlighted that the PMI progressed smoothly due to both companies' shared commitment to delivering optimal products and services through solution-based sales.

MTC is leveraging this acquisition as a driving force for corporate culture transformation within the MTC Group. Manufacturing remains the core source of competitiveness. As part of this initiative, all MTC-PS managers visited MTCs’ domestic factories in Japan.

President Hatanaka commented:"MTC-PS must have felt a sense of anticipation and excitement that the NNS technology they have cultivated for years will now expand in Japan. We are not complete strangers; we share many business commonalities, and through personnel exchanges, we are building a complementary relationship."

The corporate culture transformation extends beyond the manufacturing floor. Upon assuming the presidency in March 2023, President Hatanaka established a Growth Promotion Division to handle organizational development, long-term strategic themes, and cross-departmental initiatives. As a key tool for cultural change, the company is advancing digital transformation (DX), including the adoption of Salesforce's cloud services.

President Hatanaka stated:"We focused on how to embed Salesforce into our operations. Rather than the traditional top-down approach, we created a system where younger and mid-level employees can actively propose ideas." Each month, sales managers from different factories gather with consultants to develop a sales system aligned with "the ideal MTC sales model." A year into implementation, employees are beginning to question existing structures and take ownership of the transformation process.

A major challenge moving forward is communication reform, which will foster collaboration among self-directed employees. Hatanaka emphasized: "To sustain growth in an era of rapid change, we must rethink how we communicate." The transformation will likely extend into various aspects of the business.

In 2010, MTC introduced one of the world's largest HIP units, "Giga-HIP," at its Himeji plant, attracting R&D inquiries from European clients. Simultaneously, the company launched an engineering business that integrates design, analysis, manufacturing, and assembly to meet customer needs. This approach has allowed it to contribute to numerous national projects in accelerator and nuclear fusion fields. In 2022, the company established a Technology Development Division to systematically enhance its core technological expertise and explore new growth areas.

The acquisition of the Swedish company marks a new chapter in this history. Moving forward, open communication and knowledge-sharing between domestic and international teams will be essential for further growth.

MTC Powder Solutions AB

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