Handling Quantity of CuScrap increased More than 100 times in 15 yearsーHirata Corporation, The leader of CuScrap in West Japanese Market

 

“Mr. Katsuya Hirata (Here after “Mr. Hirata”) has the Animal Spirit that is essential to being a businessman and the sense of balance he has acquired through an inquisitive mind that is second to none.

The third-generation president of Hirata Corporation Co., Ltd. a metal recycling company based in Okayama, Japan.

 

Mr. Hirata began dealing copper earnest in 2008, and has increased quality of copper more than 100 times in 15 years.

And we got recognition in Japanese market. Mr. Hirata opened the door to growth and the establishment of fairtrade practices that were acceptable to both buyers and sellers.

We (Author: IR Universe) visited this company headquarters and interviewed that he continues to boldly take on challenges and carefully identify compromise of business.

 

 

"Comprehensive Logistics business with processing, sorting, packing, and warehousing functions."

About 20 minutes into the interview, Mr. Hirata casually revealed his new business model.

We are building new distribution warehouse that can be used by both sales and rentals. And we will take on orders from trading companies and manufacturers and provide a comprehensive range of services from scrap storage to processing, sorting, and packing. This is the image of the comprehensive logistics industry that we have set as our new goal. Although it is not at the conceptual stage, construction of the distribution warehouse in Okayama has already begun, Mr. Hirata aim to start operations in April 2025.

 

With the arrival of the era of the circular economy, it seems likely that scrap distribution will increase explosively in the future. “Regarding form of use of the base, we can either sell the site or rent it, and we can provide a variety of options, including requests for processing, upon consultation. If you use our services, you won't need a yard,'' Mr. Hirata said.

It is true that many trading companies that handle scrap do not have their own yards, and there seems to be a high demand for multifunctional yard services directly handled by recycling companies. Mr. Hirata talked about the aim of developing new business, saying that it is a business model that will lead to improved cash flow for him as well.

 

In 2008, the global economy was shaken up by Bankruptcy of Lehman Brothers. Approximately half a century has passed since the company's predecessor, Hirata Shokai that was founded in 1961, marking a major milestone for the company. At that time, the prototype for the current business structure of stainless steel, aluminum, precious metals, and copper had already been completed, but due to deteriorating business performance, we considered returning to our original iron scrap business.'

 

In the end, Mr. Hirata decided to take an aggressive approach to widen his wings in the copper business, which had the lowest volume at the time, and found a way out there. A supply chain is formed centered around direct wholesalers, which puts a heavy financial burden on them, but once an opportunity is found, this becomes a barrier to entry and the business can be developed advantageously. What drove Mr. Hirata was his innate Animal Spirit.

Mr. Hirata also had some experience. In the wake of the difficult-to-determine standard for sorting between "Candy" and "Medium copper" in this market. Mr. Hirata deepened his knowledge of copper in the field with an inquisitive spirit that was more inquisitive than most people. As a result, the standards that govern the copper market were thoroughly organized.

 

Hirata Corporation’s purchasing style is mainly buying from fellow wholesalers, so it is a transaction between professionals who are very discerning. As a trained buyer, reliable and discerning eye helped expand the circle of trust. This made foundation for increasing monthly handling volume to 3,200 tons in 15 years. Now, 90% of the company's sales of is Copper.

38.5 billion yen in fiscal 2022 (fiscal year end is October 2023).

From 2020, Hirata Corporation start exporting Copper materials to China, South Korea etc. Now Export ratio is 30%.

 

【Yard Tour of Misaki and Tsuyama Yard of Hirata Corporation】

We (Author) also looked at both Misaki and Tsuyama yards, which are responsible for the main copper business.

What caught my eye at Misaki Yard was a large mountain (stock) of Copper Scrap Birch Cliff,

which had been sorted to the quality requested by smelter (CU Cathode manufacturer) and it be shipped to each smelter.

 

"If we don’t have stock same as trading company, we could not ship as quickly as we can. This is our strength.

Birch Cliff, we gather from domestic and overseas (around the world), and currently 65% is domestic material, and remain 35% is overseas material. Sales 80% of the copper scrap business is Birch Cliff" "

Mr. Kuwada (Oversea Manager) who showed me around said. In addition, various copper scraps were lined up at the factory, and inspection work was carried out skillfully. I (author) felt that I got a glimpse of the expansion of the procurement network that crosses the border and brings cargo into Okayama, Japan.

 

Tsuyama yard, located just a few minutes from Misaki Yard. Here is main yard for Aluminum and Stainless scrap.

Tsuyama yard has a long history since its founding, was originally a collection base for copper scrap, but through expansion of the copper business, Hirata Corporation established the Misaki yard to divide the functions.'

Both yards were thoroughly tidy, probably to ensure safety and improve work efficiency.

Lastly, I (author) asked Mr. Hirata whether he has any plans to further increase the amount of copper he handles.

"I don't blindly chase Quantity" Mr. Hirata clearly said.  It seems that Hirata Corporation is keeping an eye on the future intensification of competition in the recycling industry due to the influx of domestic and foreign capital. The company's decision to take on the challenge of developing “Comprehensive Logistics'' as another pillar of its management from the perspective of cash flow management is a sign of this.

Mr. Hirata is currently 42 years old. There is no doubt that he is one of the groups of young owners who have once again clarified the position of the Recycling Industry through the ESG declaration and have begun to chart the direction it should take. I (Author) would like to follow along with them to see what innovations Mr. Hirata brings to the supply chain and open up new horizons with their new mechanisms.

 

Author: IRUNIVERSE/MIRU Mr. Mochizuki. ( https://www.iru-miru.com/) 　　(Transferred by Shunsuke Kuwada)

 

                  Misaki Yard                                               Tsuyama Yard

 

           Birch Cliff stock of Misaki Yard. Purchasing.  Resource is both Domestic and Overseas.

 

                    Clove                                     Lead Flame (Sn coated copper)

 

           Copper Sludge (Slug, Powder)                            Mill Berry Sorting process

 

                        AL Scrap                                            Stainless Scrap (304)          

 

                AL Extrusion Scrap                                 Stainless Scrap (304 Turing)

 

 

（IRUNIVERSE/MIRU Mr. Mochizuki）(Transferred by Shunsuke Kuwada)）

 

 

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