How Jun Hamuro positions SESA as a leading brand

Jun Hamuro, president and CEO, Shin-Etsu Silicones of America Inc.

Earlier this year, Jun Hamuro celebrated his company’s 25th anniversary with employees at its Akron headquarters. As he recognized the customers and employees who were instrumental in the company’s success and double-digit growth, he also reflected on the vision ahead and what it would take to continue to build the brand.

“Twenty-five years ago we almost were nameless in the United States, but we have been getting a reputation technologywise and qualitywise,” says Hamuro, who is the president and CEO of Shin-Etsu Silicones of America Inc. Today, we’re probably No. 1 in the world in the silicon industry.”

As the U.S. subsidiary of Shin-Etsu Chemical Co. Ltd., an 85-year-old global corporation based in Japan, SESA has flourished since it was launched as three-person office in Los Angeles, Calif. In 1995, Shin-Etsu Chemical increased its production facilities in Akron to own another silicone company, Shincor Silicones Inc., which now works in collaboration with SESA under the parent company. Today, SESA employs more than 160 employees, generating more than $100 million in revenue last year.

“I let all the people here know and they are very conscious about what we need,” Hamuro says. “They are serious about their jobs. I really appreciate the people we employ and I think we have a bright future if we keep growing 15 percent in the future.”

Under Hamuro’s strategic leadership, the company has been able to chart a course for future growth and become an industry leading manufacturer silicone compounds in the U.S.

Here’s how Hamuro positions SESA as a leading brand in its industry.

Promote harmony

Hamuro’s ability to adapt his leadership style to U.S. business culture has been vital in helping the company transition to a future as a flat organization. When he first came from Japan to grow the business in the U.S., he had to bring together the two cultural styles in order to set the new market up for successful growth. However, he quickly noticed some major cultural differences in the way his U.S. employees expected him make decisions.

“We have a lot of hierarchy in our organization in Japan,” he says. “The thinking is the bottom up and not the top down.”

While it allows collaboration, the problem with consensus decision-making is that it’s nearly impossible to have everybody agree on an issue.

“In Japan, of course, the CEO must take responsibility, but the decision-making process is very complicated,” Hamuro says. “We must have everybody’s consensus on everything. That’s a very tedious process. But the basic thing is the decision-making is bottom up. So it sometimes is frustrating. It takes a long time to make some decisions.”

Having come from this model of leadership, Hamuro was somewhat puzzled when his team in the U.S. was looking to him to take charge of the decision-making process.

“The first day, I misunderstood that I must decide everything,” he says. “I must dictate something.

“I had some hard discussions with them because the way to do operations in Japan and operations in the U.S. is much different. So we were actually fighting each other in the discussion.”

Soon Hamuro realized that employees weren’t really seeking a dictator. Instead, they were used to top-down leadership from the CEO, who drives the direction of the company, leads collaboration and ensures decisions are made efficiently.

“We must discuss before making a decision,” Hamuro says. “We must try to make a consensus on different decisions, but also the CEO must make a decision and then take responsibility on all decisions. I include key people in decisions, such as the site managers and the Japanese business side.

“There’s certainly top-down leadership and sometimes I must make decisions and direct people. Yet I’m conscious of listening to people and what they are thinking about, listening to their opinion.”

At the same time, if there is a lack of agreement on an issue, that is when the CEO needs to step in and offer solutions to speed up the process and push through a decision.

“I can correct the direction,” Hamuro says. “I’m always listening to the harmony, so if one person makes some noise, I deal with it.”

Since he came to the U.S. 12 years ago, Hamuro has also hired several key managers who understand the country and its culture. These people also serve to help monitor the success of the culture and advise him on how to facilitate an environment where people understand and are engaged in the company’s direction.

“At first I must understand why this person thinks this way, and then the next step is I can provide some alternative ideas,” Hamuro says. “That is very important.

“It’s like in an orchestra. Of course you need excellent instruments, but in the orchestra we need harmony. So that’s mostly the thing that I’m conscious of when a person is hired in the organization.”

Adapt quickly

One of the principal areas Hamuro sees the company’s advantage over established industry competitors is its knack for adapting swiftly to customer demand.

“The key thing is networking key personnel with customers, R&D people and engineering people to motivate them to find new technologies,” Hamuro says. “We are not developing ourselves but interacting with the customers and hearing their needs to develop new chemical molecules.”

Hamuro estimates the company has generated 3,000 U.S. patents in just the past few years as it works to identify and invest in new chemicals based on customer interest. To recognize new opportunities, he spends significant time gathering information about industry movement, whether it’s consulting magazines, newspapers and the media, talking to his technical, sales and marketing people or most importantly, meeting with customers.

“I travel a lot,” Hamuro says. “Probably 50 to 60 percent of the time, I’m travelling to the customers. So communication with the customer is a very key thing for me to establish my idea of which area we are going ahead.

“In the past four or five years I have changed the product portfolio industrywise. We have made a lot of changes servicing industries. It used to be that we were very strong in automotive industries, but now we are very strong in the personal care industry, and we are looking at different industries like the health care industry in the future.”

Investing in multiple industries with a varied portfolio allows Hamuro to take risks and position the company to be nimble for growth. Yet from a CEO standpoint, he says you need to make sure that before you commit to enter a new market, you first gather as much information as you can about the opportunity.

“I must be very conscious of what is and isn’t a growing market,” Hamuro says. “Number one technologywise and also geographicall wise.

“Getting information as much as possible is the key thing. I can then decide the distribution of resources, especially if it’s human resources, facilities and those kinds of things.”

In a fast-growing industry with a lot of innovation, the company also benefits from its model of vertically integrated manufacturing, which allows for more flexibility and efficiency in operations. The company trains employees to work in many different capacities and make various products for both Akron-based Shin-Etsu Chemical subsidiaries, Shincor and SESA, helping it can adapt with industry fluctuation.

“It’s difficult to control, because we have two companies here in Akron,” Hamuro says. “It’s a small company, but it’s a wide variety of people and a complicated corporate structure. That gets very challenging.

“So the two companies still exist but we’ve tried to integrate those companies. We are now under one site manager and sometimes we are exchanging operators. If Shin-Etsu Silicones is very busy, Shincor people are helping with operations. On the other hand, if Shincor is busy then SESA will them. So there’s that sort of flexibility.”

By having employees who can shift to wherever they are needed, you can switch gears quickly in times of greater and less demand without having to worry about staffing up or down.

“In 2010, at the busiest period we temporarily increased the shift numbers, one shift to two shifts,” Hamuro says. “But we didn’t have to hire new people for the training. So it’s very helpful for us to be flexibly manufacturing oriented.”

Prioritize profit

Hamuro needs to make decisions about the future of hundreds of silicone products in numerous industries, so he spends a lot of time educating himself on the profitability of different business segments.

“My philosophy is with every product — we are selling 500 or 600 different kinds of products to the market — my target is not going with one product that is negative in profit,” Hamuro says. “That means every product must bring in profit somehow. But it’s very difficult to control 500, 600 products.

“I divide it into 20 major segments. And every time I watch a profit figure. Every segment has a profit, regardless of the manufacturing or importing. Those products are profitable.”

Hamuro monitors product profitability by monthly re-evaluating which areas need to shift or change to keep the company on track for growth.

“My controller is reporting basically every month on the segments and how much profit we get,” he says. “If one segment has a very slow and has a low profit, then we take a look at the inside. I break it down into every product, find out what is wrong and find out why.”

When he recognizes which area isn’t profitable, first Hamuro will consider cost cutting and reducing cost on the manufacturing side. Next, he will try to convince clients to increase the price or ultimately may eliminate a product. In industries that are growing, you can increase the human resources of facilities into those profitable areas to ensure resources are most effective.

“We prefer highly profitable industries,” Hamuro says. “Nowadays, it is very difficult to make a profit in the automotive industry, for example. So we are always looking for a wide variety in our portfolio. Fortunately, in the personal care industry especially, we have original technology in Japan. So recently we built a new laboratory in New Jersey to correspond to those customers and make new formulations.”

One way Hamuro is hoping to create a stronger position for his company in the U.S. is by moving some of the basic production in Japan to Akron, where it currently has none. This would give the company a competitive advantage in being able to make more basic products, such as a silicon monomer within the next three or four years, and take advantage of U.S. manufacturing.

“My current goal is integrated silicon manufacturing based on the Japanese technology,” he says. “But existing in the United States, we will have more opportunity to expand in a global position.

“Currently, our parent company has a basic brand in Asia only, in Japan and Thailand. We don’t have any of the basic plants outside of Asia. So I think the making of the basic production outside of Japan is very meaningful for us to further development as a global company.”

How to reach: Shin-Etsu Silicones of America Inc., (800) 544-1745 or www.shinetsusilicones.com

The Hamuro File

Jun Hamuro
President and CEO
Shin-Etsu Silicones of America Inc. (SESA)

Education: Keio University, Tokyo, Japan

Born: Suburban Tokyo, Japan

What was your first job?

General Administration Dept. Shin-Etsu Chemical Co., Ltd. Isobe Plant

Who are your heroes in the business world and why?

Our chairman, Mr. Kanagawa, is my hero as genius in business decision and strong will to accomplish difficult task.

What would your friends be surprised to find out about you?

Most of my friends in school days were surprised that I had chosen a sales type of job when I started my career.

What is your favorite part of your job?

Sometimes my job is complicated, difficult and hectic but challenging and joyful when we have successes.

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