Friday, March 18, 2011

No. 6: Improve the environment surrounding your business, first (March 19, 2011)

Forestry needs constant efforts for generations. You cannot expect short-term sales and profits, and you have to keep thinking about innovation. Otherwise, competitors equipped with new technology will surpass you, and it takes you much time to catch up with them. Hayami Forest is the company that has never stopped making innovations in forestry for the past more than 200 years. The concept that drives this company is “building new mountains.” That is, it places more importance on the environment that surrounds its business than on pursuing for quick business return.
Hayami Forest was founded in 1790 when the first generation started business in forestry and seafood. The Hayami family was originally one of the high-ranking officials of the Tokugawa family in Kishu (currently Mie Prefecture). The Tokugawa family that ruled Japan in the Edo period (1603-1867) had three collateral families. They were located in Owari (currently Aichi Prefecture), Mito (currently Ibaraki Prefecture), and Kishu (currently in Mie Prefecture). The company was founded and is headquartered in Mie Prefecture next to Aichi Prefecture famous for Toyota Motor.
The first generation made a fortune in the seafood business and invested heavily in forestry. Because he increased the number of mountains and forests, the Hayami family currently owns a total of 1,070 hectares (about 2,650 acres), 80% of which are coniferous forests. And 99% of the coniferous forests are Japanese cypress. The area where this company owns forests has an annual precipitation of 4,200 mm as compared with Tokyo’s 1,500 mm. Therefore, dense planting was traditionally dominant in this area because of the pluvial climate; planting 10,000 trees per hectare – more than three times as many trees as in other areas – was widespread. Dense planting, however, makes it hard for the bottom weeds to grow, resulting in washouts of soil and nutrition for trees in times of heavy rain.
The eighth generation succeeded the seventh generation in 1943. He was a great reader, and he studied forest management by himself. He was brave enough to discontinue dense planting and adopt the concept of building beautiful mountains instead of pursuing only for high return. The slogan this company invented was “Manage light to make a forest grow rich by itself.” Increased tree thinning enriched the soil and increased the amount of plants. Each of Hayami’s artificial forests has 243 kinds of plants, whereas a standard protected forest has 185 kinds of plants. In addition, the company started to improve the forest roads and strip roads in 1961. At present, the company has roads with a length of 45 km inside its forests, which means a forest road of 45 m per one hectare. The roads that stretched in a finely meshed pattern contributed to increasing productivity because the efficiency of operation of vehicles and heavy machines was improved greatly.
Increasing wood imports depreciated the price of Japanese cypress considerably to a quarter during the past 30-40 years. To cope with the increase of inexpensive import woods, the company introduced state-of-the-art silviculture equipment to develop its own nursery plants. The concept that this company has been cherishing for more than 200 years gave this company the honor of the first Japanese company that acquired the certification of the Forest Stewardship Council (FSC) headquartered in Germany in 2000. It is noteworthy that this company has focuses on the factors and environment that develop the business in the long run and pursued the concept to make the mountains beautiful instead of seeking for quick return from the sales of woods.

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