BRAND STORY 04
1986-Present

Expansion of the Lineup of Air Compressors

The company forms alliances with global manufacturers to expand into the market for large-sized air compressors and oil-free compressors.

The next objective for Iwata Air Compressor Manufacturing, which now enjoyed a solid share of the domestic market for small- and medium-sized air compressors, was to work on large-sized models and oil-free air compressors, the company’s area of specialty. However, since single screw air compressors—the company’s proprietary line of products—had a complex 3D structure, the cost of manufacturing them was high, and achieving a consistent standard of quality was difficult. These compressors were therefore deemed difficult to render oil-free, and the company could not put them at the core of its strategy. At the time, several compression methods, such as screw and turbo compression, were used for medium- and large-sized air compressors, and a variety of products were already available on the market. Judging that developing new products from scratch would be risky in terms of time and cost, the company decided to seek a partner with an extensive lineup of high-quality, high-performance models. A candidate was soon found—Atlas Copco, an internationally renowned air compressor manufacturer based in Sweden. In January 1989, Atlas Copco Iwata K.K. was jointly established. Atlas Copco supplied air compressor bodies to Iwata Air Compressor Manufacturing, which in turn manufactured twin-screw compressors and oil-free tooth air compressors and sold them through its sales network.

As the alliance becomes unviable, the company opts for complete in-house development and production, and develops its own twin-screw and claw compressor bodies.

By 1999, the knockdown production system used by this joint company had exhausted its potential in terms of price competitiveness and supply capacity. After liquidating the company, ANEST IWATA switched to an OEM supply system by Atlas Copco, but given the fierce competition in the medium-sized air compressor market, it realized it would be difficult to continue with this supply system, and reached a decision to develop and produce products in-house. In 2009, the company established a joint corporation—ANEST IWATA FEELER Corporation—in Hangzhou City, Zhejiang Province, in partnership with the Fair Friend Group, a major Taiwanese conglomerate with which ANEST IWATA had worked closely through its coating equipment business for a long time. Through this joint venture, the company developed its unique twin-screw and claw air compressor bodies, and started to process and assemble air compressor units using these components.

The lineup of air compressors is expanded, ranging from 60-watt air pumps to 37-kilowatt medium-sized compressors.

In 2012, ANEST IWATA introduced the Exact Air series of oil-lubricated medium-sized air compressors, as well as the Absolute Air series of oil-free medium-sized air compressors, certified as Class 0 by TÜV, an international certification organization in Germany. With these products, the company’s lineup of air compressors was greatly expanded, ranging from 60-watt air pumps to 37-kilowatt medium-sized compressors. Not many manufacturers produce so wide a range of both oil-lubricated and oil-free models on their own. Meanwhile, sales of the P series had continued to grow steadily as the company’s main reciprocating compressor models since its release in 1980. The piston ring and peripheral parts of the oil-free models, however, required maintenance every 2,000 to 3,000 hours, as did the products of competitors, which hindered the popularization of oil-free air compressors.

The company releases the COMG series featuring low-cost, high-performance, small-sized reciprocating air compressors, and develops a durable oil-free version in tandem.

The COMG series, introduced in 1995, was ANEST IWATA’s answer to this problem, featuring small-sized reciprocating air compressors that were inexpensive and highly efficient (the oil-free models were released in 1996). For the COMG series, even the smallest parts were thoroughly vetted, in order to cut costs and enhance functionality. As a result of sharing parts with overseas manufacturers and actively sourcing them from around the world, the company succeeded in achieving higher performance at a lower cost. For oil-free air compressors, which the company had been concerned about the most, using thermosetting resin for the pistons ensured a durability of 10,000 hours. The oil-free air compressors had also lacked power, but this was improved to make them as powerful as oil-lubricated models. Not only were the oil-free COMG air compressors well received in the market, but they were close to flawless as products. For this reason, the compressors continue to be produced to this day, unchanged except for minor adjustments.

The company operates a global supply base factory for oil-lubricated reciprocating compressors, in partnership with a leading Indian conglomerate.

In 2000, ANEST IWATA’s reciprocating compressors entered a new stage. The company founded ANEST IWATA Motherson Private Ltd. jointly with a new partner, the Motherson Group, a leading conglomerate in India, to operate a base factory for the global supply of oil-lubricated reciprocating compressors. At the same time, Air Factory Energy Ltd. was established to market air compressors and related services within India. This completed the mother factory system, whereby oil-lubricated reciprocating compressor bodies were manufactured in India and oil-free reciprocating compressor bodies were manufactured at the Fukushima Factory, to supply the compressors throughout the world.

Development of the World’s First Oil-Free Scroll Compressor

Faced with a challenge that other compressor manufacturers around the world had given up on, the company perseveres by clearing the hurdles one by one, and wins praise from the market.

At the heart of the air compressor strategy of Iwata Air Compressor Manufacturing was the development of oil-free scroll compressors. A scroll compressor features two interleaving helical wraps that compress air. Extremely silent, this type of compressor was said to be ideal as a small-sized model. However, due to technical hurdles that were difficult to overcome, the world’s leading compressor manufacturers had given up on their attempts to develop one. The company started to develop scroll compressors around 1985, overcoming difficulties one by one, such as the search for heat-resistant materials, development of materials for tip seals, and precision design of air-cooled housing. In March 1991, the company introduced the world’s first oil-free scroll compressors, the SLP-22 (2.2 kW) and the SLP-37 (3.7 kW), followed by 5.5-kW to 15-kW models equipped with multiple 2.2-kW and 3.7-kW compressor bodies. The SLP series compressors were not only quiet, but achieved a durability of 10,000 hours, which was unheard of for an oil-free compressor at that time, and garnered critical acclaim from the market.

The company expands its lineup of oil-free scroll compressors, and receives the Agency for Natural Resources and Energy Commissioner’s Award, among others.

The SLP-07 and SLP-15, mounted with a small-sized compressor body, were launched in 2000. In 2004, ANEST IWATA released the Think Air series of 22-kW to 30-kW models equipped with multiple compressor bodies, allowing multi-stage control for optimal operation based on the amount of air used. Combined with the Smart Air series featuring a single compressor body of 0.75 kW to 3.7 kW, these models expanded the company’s lineup of oil-free scroll compressors. In addition, the company developed the F series in 2014, mounted with a new compressor body coated with a heat-resistant film. The product series received the Agency for Natural Resources and Energy Commissioner’s Award in FY2016, commended for being an Energy-Efficient Machine. Both the CFBS series, the world’s first oil-free booster compressor developed by ANEST IWATA in 2004, and the succeeding EFBS series that connect directly to the motor, earned praise for being excellent energy-efficient machines, since they made it possible to lower the pressure inside the factory air lines, while raising pressure partially. They received the Japan Machinery Federation Chairman’s Energy-Efficient Machinery Award in 2009. These compressors continue to earn rave reviews from new and repeat customers, and are being installed in factories around the world.

Re-Entering Europe and Building a Sales Network in Each Country

After elaborate market research and strategic planning, Iwata Italia is established as the first step in re-entering the European markets.

In 1990, Iwata Air Compressor Manufacturing was a dominant player in the domestic market, commanding 30% of the air compressor market and 70% of the spray gun market, and the IWATA brand was regarded with a degree of esteem. However, with the domestic market nearing saturation, the company needed to market its products abroad, especially in Europe and the US, in order to grow further. But because of the bitter memories of failure regarding the foray into the European market in 1968, the company researched the market thoroughly and formulated detailed strategies. The first step in its re-entry into the European market was the establishment of Iwata Italia in Turin in 1989. It was followed by Iwata Europe, which was established in November 1991 to direct marketing efforts across Europe as a whole, a move in preparation for the formation of the EU scheduled for 1993. The company went on to establish Iwata France in the suburbs of Lyon in 1992, and Iwata UK in Wimborne in 1993, thus building up its sales network for Western Europe with Iwata Europe as headquarters.

The company establishes sales companies in Russia, South Africa, and the United Arab Emirates, in addition to countries in Europe.

Later, the names of the above companies were changed to reflect the group name of ANEST IWATA. Additional sales companies were established in Sweden (2000), Spain (2007), Russia and Germany (2010), South Africa (2012), and Poland and the United Arab Emirates (2014). In 2016, ANEST IWATA Europe merged with Air Gunsa, a coating equipment manufacturer, to become the ANEST IWATA Strategic Center, which was to serve as the strategic marketing center for the global coating equipment market, positioned within the European market equipped with development, production, and logistics functions. ANEST IWATA had supplied air compressor bodies in Europe for many years under the partnership with Atlas Copco, but in order to market products under its own brand, the company established ANEST IWATA Air Tech in 2012 in Turin and proceeded to acquire Babatz, a German compressor manufacturer, thus creating a sales company with a production function.

Expansion into North and South America with the Establishment of Local Subsidiaries

Focusing on the market for oil-free air compressors, such as healthcare and pharmaceuticals, the company achieves better results than expected, and seeks to develop the market for general-purpose compressors and vacuum equipment.

The company ventured into the air compressor business in North America at around the same time. The US compressor market at the time was dominated by global giants such as Ingersoll Rand and Quincy, but their main products were cast oil-lubricated air compressors. At first, ANEST IWATA mainly focused on supplying compressor bodies, but in 1988, the company founded Powerex Iwata Air Technology jointly with Scott Fetzer to begin local production. This joint company focused its marketing exclusively on the oil-free air compressor market, such as the healthcare and pharmaceutical industries, which yielded results that exceeded their expectations. Later on, ANEST IWATA Air Engineering was established in 2011, with the aim of developing general-purpose compressor and vacuum equipment markets in North America. In 2014, AirZap ANEST IWATA was established, with a view to launch its business in South America.

ANEST IWATA-MEDEA and others established for global expansion in the coating equipment market as well.

In order to promote its coating equipment business in North America, the company founded ANEST IWATA USA in 1994 and ANEST IWATA-MEDEA in 1998, followed by ANEST IWATA do Brasil in 2010 and ANEST IWATA Mexico in 2016. ANEST IWATA-MEDEA is a core company in the airbrush business that is in charge of global expansion. As Harder & Steenbeck, a German airbrush manufacturer, joined the group in 2017, ANEST IWATA decided to expand and bolster its manufacturing, sales, and service under the internationally recognized IWATA brand and the Harder & Steenbeck brand that was mainly popular in Europe.

Expansion into Asia, the ASEAN region, and Oceania

The company moves the coating equipment production base to Taiwan in the wake of a sharply appreciating yen.

It was in the mid-1980s that Iwata Air Compressor Manufacturing began to set up production bases abroad in earnest. The value of the yen, which was traded at 152 yen to the dollar in August 1986, rose to a record high of 134 yen to the dollar in November 1987, causing production costs to surge and preventing the company from deriving an increase in profit from increased revenue. Given the circumstances, Iwata Air Compressor Manufacturing decided to start production in Taiwan, partly because of the need to address rising production costs in Japan, and partly because the Taiwanese market itself was promising. In August 1987, Taiwan Iwata Coating Equipment Ltd. (now ANEST IWATA Taiwan Corporation) was established as a production base for coating equipment jointly with a local corporation, the Fair Friend Group, each contributing half of the capital. In the 1990s, waves of industrialization hit mainland China. Convinced that China would become a lucrative market in the future, Iwata Air Compressor Manufacturing sought a foothold there. In October 1992, the company established Shanghai Iwata Coating Equipment Ltd. (now Shanghai ANEST IWATA Coating Machinery Corporation) jointly with Shanghai Pneumatic Systems Co., Ltd.

The company starts producing coating systems and booths in China, with the local subsidiary in Shanghai in charge of sales and after-sales services.

In line with the management reforms and the change in the company name in 1996, ANEST IWATA shifted its coating equipment sales system in Asia from the conventional one dealer, one country approach, to setting up its own subsidiaries and expanding its sales network. In the case of China, ANEST IWATA (Dongguan) Corporation was established in 2006, to produce coating systems and booths. The sales function of the coating equipment business in China was transferred to ANEST IWATA (Shanghai) Corporation, which was established in Shanghai in August 2003. This company oversees eight branches located in major Chinese cities, and not only deals with all the products manufactured at the production bases in China, including ANEST IWATA products, but is also responsible for after-sales services and sales aimed at other Asian nations apart from China. In order to carry out sales activities in the ASEAN region, ANEST IWATA established ANEST IWATA Southeast Asia Co., Ltd. in 2002, ANEST IWATA MOTHERSON Coating Equipment Private Ltd. in 2006, ANEST IWATA Vietnam Co., Ltd. in 2013, and PT. ANEST IWATA Indonesia and the Myanmar Branch in 2014.

The company begins offering compressors and related services in Australia, and establishes production bases for compressors and other products in China and Thailand.

The Oceanian region is covered by ANEST IWATA Australia Pty Ltd., which absorbed the business of Broadbent, a local air compressor supplier, in 2016, and began marketing compressors and related services. Regarding the air compressor business, ANEST IWATA Industrial Machinery (Jiaxing) Co., Ltd. was founded in June 2002 to produce compressors and other products, and ANEST IWATA Korea Corporation was established in South Korea in 2005. As a base for the production and supply of air compressors in the ASEAN region, ANEST IWATA Southeast Asia Co., Ltd. was established in Thailand. In China, ANEST IWATA Shanghai Trading Corporation was established in 2011.

Reorganizing and Bolstering Group Companies, Both in Japan and Abroad

The company establishes ANEST IWATA Service Corporation to enhance customer satisfaction in Japan, while expanding and strengthening domestic and overseas sales and production networks.

Domestically, ANEST IWATA Service Corporation was established in 1995 as a division dedicated to compressor repair and parts supply. In 2015, it was merged with the domestic sales department of ANEST IWATA Corporation, which was dedicated to the sale of air compressors. The resulting organization changed its name and made a fresh start as ANEST IWATA Compressor Corporation. Later, this company began to sell vacuum equipment as well. ANEST IWATA Coating Solutions Corporation, which is in charge of sales and service activities for the domestic coating equipment business, was founded in 2007 as a company dedicated to before- and after-sales services with the aim of improving customer satisfaction in the coating equipment market. With the transfer of sales responsibilities for coating equipment and systems from the domestic sales department of ANEST IWATA, this company now operates closely with coating professionals. The above is a summary of the events of recent years. Even now, ANEST IWATA is working actively to expand its sales and production networks at home and abroad. Furthermore, it is reorganizing functions among its group companies repeatedly in order to expand and bolster its functions.

Structural Reforms to Counter the Bursting of the Bubble, and the Birth of ANEST IWATA

In anticipation of a prolonged recession, the company pursues the globalization of its business and carries out radical management reforms.

Let’s go back in time a little. In 1990, there was an increasingly widening gap between the apparently booming economy and the realities underlying it, and in 1991, Japan’s economy took a sudden downturn. The bubble had burst. The economic slowdown instantly shrank the market, turning the production facilities that had been expanded to meet the demands of the bubble economy into excess investments. The impact of the bursting of the bubble started to surface in the second half of 1991, with demand first becoming sluggish in the automobile, electronics, and housing construction industries. In 1993, Iwata Air Compressor Manufacturing declared the beginning of a series of management reforms, and started to implement measures to globalize its business and to radically reform its management in order to address the shortcomings of a Japanese-style management, in anticipation of a potentially prolonged recession. The company’s focus was on the “promotion of strategic management” and the “transformation of the corporate culture.” This 21st-century project involved reorganizing the company from every aspect, from organizations and systems to strategies and corporate culture.

The company name is changed to ANEST IWATA Corporation, and a management philosophy is established to promote global expansion.

On the occasion of the 70th year of its founding, in October 1996, the company changed its name to ANEST IWATA Corporation. “ANEST” stood for “Active & Newest Technology.” In other words, it represented our identity as a development-oriented company that is consistently vibrant and equipped with innovative technologies. The corporate mark was also redesigned to reflect the qualities of being “EARNEST” and “HONEST,” embodied in the phrase “Makoto no Kokoro” (Trustworthy & Sincere), which has been our corporate motto ever since our company’s founding. Also formulated was the “ANEST IWATA Vision.” With the new company name reflecting its strong will and determination toward reform, ANEST IWATA made a fresh start. Later, in 2014, the company formulated the ANEST IWATA Group Management Policy, with the aim of promoting the global expansion of its business. The efforts at structural reform that began in 1993 were successful to a certain extent in improving the company’s business performance. However, the recession showed no sign of ending, and ANEST IWATA saw its performance decline again in 1997. The business environment deteriorated even further in 1998, forcing the company into survival mode once again. Still, ANEST IWATA has unfailingly made decisions to invest in future growth, implementing thorough measures to counter the effects of the recession and structural reforms for the next century. Partly thanks to these efforts, the company posted increases in earnings and profits for six consecutive years from 2002, but the joy was short-lived. Following the global financial crisis triggered by the collapse of Lehman Brothers in 2008, Japan experienced the Great East Japan Earthquake in 2011, which inflicted damage on the Fukushima Factory as well. These events put the company’s business and management to further test.