BookTitleToyota Tsusho 70-Year History

Summary

Toyota Tsusho 70-Year History

An Echo of Old JapanThe team from the Metals Division hadguessed what was happening, but its memberswere still surprised. They were at an automobiledismantling plant in Beijing. Mountains ofused cars were piled up in jumbled rows?for amoment the team members thought they wereat a landfill. They looked workers wendingtheir way between the piles without a uniformor helmet. There was no mechanization?mostof the labor was done through“human-wave”tactics.Apparently, this was a typical example ofa dismantling plant in China. While the teamwas shocked, something about the scene feltfamiliar.“The dismantling business in Japanused to be like this,“the team leader explained.It was cluttered and chaotic. The recyclingbusiness in Japan started from this level. Butfrom there, we built a system for reusing parts,and got the system up and running smoothly.”China’s dismantling business was in a statesimilar to that of Japan in the past. The goal ofthe Metals Division was to bring technologyand expertise honed in the reuse system inJapan to China.Starting from ResearchCommissioned by NEDOThe project to expand the end-of-life vehiclerecycling business overseas started whenNEDO (New Energy and Industrial TechnologyDevelopment Organization) commissionedToyota Tsusho and Showa Metal Co., Ltd.,to lead a research project concerning globalR&D on advanced resource recycling in Asiaand advanced automobile recycling systems.Showa Metal was engaged in the vehicledismantling business, and Toyota Tsusho,together with Toyota Metal Co., Ltd., andother group companies, was involved withrecycling of ELVs (end-of-life vehicles). Allcompanies involved in the project had excellenttrack records and top-level name recognitionin Japan. The decision was made that ToyotaTsusho and Showa Metal should join forcesand deploy a proper ELV processing businessin countries overseas.China was first on the list. As the MetalsDivision team noted on its field trip to China,most dismantling work was carried out through“human-wave”tactics and, above all, it wasclear that not a lot of priority was given tosafety and environmental concerns. This wasthe ideal place for Toyota Tsusho and ShowaMetal to utilize their expertise and experience.Acquiring an Equity Stake?AFirst for a Japanese CompanyBeijing is the largest market in China. Ofall the companies in China with dismantlingbusiness licenses, the Beijing-based BeijingBorui-Liantong Auto Recycling Tech Co.,Ltd., was therefore the logical place to startnegotiations. Why this company, though?Toyota Tsusho had participated in jointventures with Beijing Borui-Liantong AutoRecycling Tech’s parent company, theXianglong Group, in the car dealership andused car distribution businesses, and it hadbeen a reliable partner. Moreover, BeijingBorui Liantong Auto Recycling Tech hadplans to relocate to a new plant. Inspectionsof the existing factory showed that safetymanagement and environmental measureswere basically nonexistent and that all therecycling operations had been left in the handsof private contractors known in Chinese asziranren (natural persons). The Metals Divisionteam’s instinct was right: It was an old-styleDismantling scrapyard (Beijing, China)Stories193