Jan
27
2018

For manufacturer Sakae, eastern Idaho is the land of opportunity

For manufacturer Sakae, eastern Idaho is the land of opportunity

Sakae Casting President Takashi Suzuki poses for a portrait Jan. 23 outside of the company’s satellite office at Shoup Avenue. Sakae opened its Idaho Falls office in April. John Roark / jroark@postregister.com

Sakae Casting President Takashi Suzuki poses for a portrait Jan. 23. Suzuki splits time between Japan and the United States in an effort to expand the reach of his company. John Roark / jroark@postregister.com

Rogers

An example of Sakae Casting’s signature cooling plate. The cast aluminum plate features embedded stainless steel cooling tubes. Sakae’s casting process enables a minimum clearance of 0.5mm with a space between parts of 1mm, a plate thickness of 8mm and a pipe diameter of 6mm.

Takashi Suzuki didn’t get what he needed in Silicon Valley. But he found it in Idaho.

The Tokyo-based Sakae Casting president opened an Idaho Falls satellite office in April. Since then, Sakae has begun work on a new spent fuel cask design with researchers from University of Idaho, Boise State University and Idaho National Laboratory.

If successful, the design could be used across the nuclear industry. The research is being funded, in part, by a state entrepreneurship grant Suzuki never would have heard about had he not attended a national investment summit in 2016.

At that time, Suzuki was planning to close an unsuccessful satellite office in California, then refocus efforts back to Japan. Instead, he decided to take a chance on Idaho after meeting Gov. C.L. “Butch” Otter, Lt. Gov. Brad Little and Jan Rogers, CEO of Regional Economic Development for Eastern Idaho.

Idaho was much cheaper than California’s Bay Area, and this side of the state offers robust research collaboration opportunities. But there was something else: Gem State representatives made Suzuki felt welcomed.

During a recent trip to Idaho, Suzuki spoke to the Post Register, with the aid of interpreter Mika Fox, about his decision to open a Sakae office in Idaho Falls, and the possibility of further business coming to the Gem State.

“He met the people from Idaho. and they were passionate about getting business, and he was very impressed by them — he was very touched by it,” Fox said. “He thinks there’s a match between them: what they’re looking for and what he wanted to do.”

An authentic welcome

Sakae’s signature product is a cast-aluminum plate embedded with U-shaped stainless steel pipes that can be used to cool semiconductors, other digital technology, and, possibly, spent fuel casks.

Sakae opened its Silicon Valley office in 2011. At that time, and still today, Suzuki said global expansion is logical for Japanese firms, partially due to long-term demographic shifts within Japan.

Reuters poll from June showed that shrinking domestic demand and labor shortages were by far the largest concerns of more than 500 medium and large Japanese businesses.

Japan’s birth rate is low; its population is aging. The country’s 1995 peak working-age population shrank 11 percent to 77.2 million in 2015, and it’s projected to drop to 45.2 million by 2065, according to Reuters.

To Suzuki, who also has opened a Sakae office in South Korea, there were two clear choices for further international expansion: China and the United States.

“He chose America because of its culture for new businesses and open-mindedness for investment as well as research and development — the American dream,” Fox said. “That’s the culture here, not in China.”

Silicon Valley, a world tech hub, was a logical place to open a satellite office, but it eventually became too expensive. And Suzuki, who settled there with assistance from Japanese connections, couldn’t integrate his company into the area’s business community.

It was at the 2016 SelectUSA Investment Summit in Washington, D.C., that Suzuki met representatives from other states, most memorably Idaho.

“He felt an authentic welcome from Jan, and she tried to introduce him to other people — it never happened in California,” Fox said.

Getting to the front of the line

Idaho is poised to attract small- to medium-sized businesses such as Sakae, Rogers said, because of the potential to develop relationships between CEOs and key state figures.

“Everyone was doing what they could to help move this project forward in the state. If you were to ask a number of businesses, I would think that somewhere in that discussion would be the fact that they were treated with respect,” Rogers said. “We did what we said and said what we meant.”

Gem State representatives can intimately engage business presidents, partially, because of the state’s size.

California had the largest gross domestic product of any state in the U.S. during 2016: $2,602.67 billion. Idaho, meanwhile, was ranked 43rd, including the District of Columbia. The state added $67.28 billion to the U.S. economy.

Companies that wouldn’t be a blip on the radar of larger states can get a personal touch from Idaho.

“You’d have to be a huge company, like Samsung or Mitsubishi, to get to the front of the line with California’s governor. Our state is small enough where you can actually get the introduction,” Rogers said.

Rogers headed southern Idaho’s regional marketing firm when yogurt manufacturer Chobani opened a $750 million factory in Twin Falls. Today, approximately 1,000 people work at the factory; Chobani also built a $21 million research center in the area last year, USA Today reported.

During a state of the state speech, Otter declared the local investment of Chobani and other food processing firms the “Magic Valley miracle.”

‘That’s his mission — hiring local people’

For Sakae, opportunity is propelled by the Idaho Global Entrepreneurial Mission (IGEM), which provides funding for commercialization research between university personnel and businesses.

IGEM, a subsidiary of the Idaho Department of Commerce, has invested more than $4.8 million in 24 projects since 2013, including $979,572 during fiscal year 2017.

The spent fuel cask project, which is being researched at the Center for Advanced Energy Studies in Idaho Falls, is funded largely by a $237,898 grant distributed in late 2017.

Sakae is expected to build two prototypes before 2019.

If the project is viable at the end of the yearlong research period, and a business plan detailing market potential, profit margins and other details can be drawn up, Sakae and researchers could be granted another round of IGEM funding.

If the product goes to market, Sakae has committed to building a cask factory in eastern Idaho within five years, give or take. Suzuki plans to create internship and hiring programs along the way to bolster Sakae’s Gem State workforce presence by dozens of people.

“Ultimately they want to hire 50 people. That’s his mission — hiring local people,” Fox said.

If Sakae succeeds, others will follow

Sakae’s local economic impact could extend beyond the company’s immediate presence in eastern Idaho, however.

Suzuki is the informal leader of a small chamber of commerce in Japan. Sakae’s ventures outside Asia, if successful, could become a model for affiliated small- to medium-sized companies hesitant to do the same.

“They want to diversify their businesses, but they are small, so there’s a bit of struggle and many walls to break — the U.S. is huge and intimidating,” Fox said. “So they’re skeptical and a bit afraid. It’s really important for (Suzuki) to succeed and show them that he made it. Then others follow.”

Representatives from a Japanese automated manufacturing firm visited Idaho in December; they’re considering Gem State facilities to complement the state’s agriculture industry.

Rogers, along with local researchers and Idaho Department of Agriculture Director Celia Gould, will visit Japan in April to meet with company representatives introduced by Suzuki.

“When companies are seeing results and that the community and our state is doing whatever it can to make your business successful, then they’re more likely to encourage others to speak with you,” Rogers said. “We’re going to try to continue to develop these relationships, and who knows where the next opportunity will come from? But unless you pursue it, it never happens.”

Echoing Japan’s generational issues, Suzuki has heard anecdotal evidence of Idaho’s young people, “talent,” leaving the state for high-paying jobs elsewhere.

Suzuki said he wants to bring additional Japanese companies to Idaho so they can hire local, too.

“He comes here and sees more opportunities,” Fox said. “He’s thankful that eastern Idaho opened the door, so if he can contribute to creating employment here, that’s how he wants to help: hiring local people so they don’t have to go to Silicon Valley.”


Reporter Kevin Trevellyan can be reached at 208-542-6762.