HORIBA, a Japanese manufacturer of solutions for measurement and analysis, was founded shortly after World War II and quickly became a leading supplier of emission measurement equipment to the automotive industry in the US and Europe. Since then, HORIBA has continued to expand the product portfolio and now provides measurement solutions to a wide range of industries. J-BIG spoke to Hiroyuki Urabe, President of HORIBA Europe GmbH, and Ergin Cansiz, COO of HORIBA Europe, about how HORIBA became an analytical company, the development of the business in Germany, how the company is influenced by the changes in the local automotive industry, and what makes it a typical Kyoto company.
J-BIG: What is the history of HORIBA and how has the company developed over time?
Hiroyuki Urabe: HORIBA’s headquarter was established in Kyoto, Japan, first as research laboratory called Horiba Radio Laboratory in October 1945, immediately after the end of World War II. At that time, our founder, Dr. Masao Horiba, was still a student majoring in nuclear physics. When the US forces banned all research that was considered potentially “dangerous”, he had to give up his studies and decided to start a company focusing on chemical products instead. Horiba Radio Laboratory’s first product was an electrical capacitor. Kyoto is very hot and humid, especially in the summer. Since the weather fluctuates a lot, to maintain the quality of the capacitor, a pH meter was needed – something that post-war Japan just lacked at that time. So Dr. Masao Horiba decided to make a prototype himself in preparation for the capacitor business. The capacitor business did not continue long, but the pH meter became a huge success because the Japanese chemical industry was under strong political support to stimulate economic recovery after the war, and there was a need for high quality industrial measuring instruments at low cost. Dr. Masao Horiba started a new business in pH measurement with the first domestic glass electrode pH meter in 1950. Horiba thus became an analytical company and on 28 January 1953 Dr. Horiba established HORIBA, Ltd.
While continuing to improve its pH meters, HORIBA began the development of non-dispersive infrared (NDIR) gas analyzers. In the beginning the gas analyzer technology was used in the medical field to check the condition of human lungs, which were a cause of illness for many people in post-war Japan.
In the early 1960s one of our engineers introduced HORIBA’s technology to automobile emission testing. Initially, Dr. Horiba was reluctant to use a medical-related technology in the automotive industry because he perceived it as a “mismatch”, but was soon convinced that it fitted the spirit of the company to take on new challenges to contribute positively to society. As a result, HORIBA developed the MEXA analyzer for automobile emission testing utilizing medical gas analyzer technology. Soon the US EPA (Environmental Protection Agency) introduced our equipment to the emission control market, which led to a huge international success in the automotive market and the MEXA analyzer established itself as the world standard for emission testing.
J-BIG: What were HORIBA’s first international steps after this event?
Hiroyuki Urabe: We became strong in the automotive industry in the 1960s and were able to enter the US and European markets, which at the time had much larger automotive industries than Japan. The first step was to export the emission analyzer to the US. Our main customers were the EPA and other major car manufacturers. In 1970, the US headquarters was established, marking the start of our overseas operations.
J-BIG: How did HORIBA start in Germany?
Hiroyuki Urabe: Germany is a strong market with many car manufacturers. That is why we started in Germany early on in 1972 by establishing the headquarters of HORIBA Europe in Steinbach near Frankfurt as our first European subsidiary. The German subsidiary was our second overseas business outside Japan after the US. From the beginning, the company employed about 50 people and functioned mainly as a sales office, importing products such as the emission analyzer from Japan and selling them to the European market.
J-BIG: What are your personal backgrounds with the company?
Hiroyuki Urabe: I joined HORIBA’s R&D team in 1986 as an engineer straight after graduating from university. After three years in software development, I had the opportunity to go to the US as a software engineer. I then worked in Germany from 1992 to 1999, where I was responsible for service. That was over 25 years ago – a time before mobile phones and navigation systems – and I travelled around Germany by car visiting customers who only spoke German. It was quite an adventure. When I returned to Japan in 1999, I transferred from the R&D engineering department to the international sales department. In 2014, I moved to South Korea and spent 8 years as President of HORIBA South Korea before returning to Germany in 2022 as Director of HORIBA Europe and from November 2023 as President of HORIBA Europe.
Ergin Cansiz: I joined HORIBA in 2013 as Director Operations for the Mechatronics Business, where we produce a variety of mobility solutions which are not only distributed locally but also globally, for example to South Korea. It was there that I met Mr. Urabe, who was at the time still working in South Korea. During the Corona crisis in 2020, I was appointed to the board of directors of HORIBA Europe. And since Mr. Urabe came to Germany, we have worked closely together and have become close colleagues.
J-BIG: How has business in Germany developed over the last 50 years?
Hiroyuki Urabe: We have grown considerably since HORIBA originally came to Germany over 50 years ago. We started as a sales office, but as the products we sell are equipment for specialists, we decided to build up our engineering expertise in Germany as well. So, step by step, we recruited people for the development and service teams.
Ergin Cansiz: A major milestone was reached in 2005: With the acquisition of SCHENCK Development Test Systems in Darmstadt, the company was able to expand its mechatronics expertise to the benefit of the automotive segment. The aim of the acquisition was to become a system provider for a complete test cell, as the need for integrated test systems covering the entire vehicle, including engine and driveline, had arisen in the field of vehicle development and testing. In order to respond to this market requirement, we needed to add test bench engineering and software skills for the automation system to our portfolio, which we found in SCHENCK at the time, and eventually became a system provider for complete test cells, offering a wide range of solutions for the entire spectrum of automotive research, development and testing. We supply our solutions to a broad customer base that includes automotive OEMs (Original Equipment Manufacturers) as well as Tier-1 and Tier-2 businesses.
J-BIG: With the larger test environment you got through the acquisition, what else have you been able to test besides emissions?
Ergin Cansiz: Through the acquisition, HORIBA was finally able to develop test systems for brakes, gearboxes, axles, engines, wind tunnel balances and so on.
Subsequent take-overs have further broadened our portfolio: With the acquisition of FuelCon in 2018 for our hydrogen business we were able to add test systems for batteries, fuel cells and electrolyzers, followed by Tocadero in 2019 with water analysis and then BeXema in 2021 for power electronics for battery, fuel cell and electrolysis applications.
J-BIG: How has HORIBA developed in Germany in terms of locations?
Hiroyuki Urabe: Along with the acquisitions, we have increased the number of our offices. We now have 6 major locations in Germany: The first, our headquarters, is in Oberusel, where we moved in 2003 from Steinbach. Then there is one in Darmstadt, one in Stuttgart Neuhausen, a factory in Leichlingen near Düsseldorf and a factory in Magdeburg with 300 employees, that became part of HORIBA when we acquired FuelCon, and the HORIBA Tocadero office in Berlin for our water analysis business.
J-BIG: As the automotive industry moves towards its goal of zero emissions with electric vehicles, the need to measure emissions is decreasing. How is HORIBA responding to these changes?
Hiroyuki Urabe: The automotive business is naturally a big pillar of our business, especially in Germany. Our portfolio however became more and more diverse over the years and we offer our customers measuring and analysis technologies in multiple industries. But we have also completely transformed the product portfolio in our traditional mechatronics business. While the emissions business will gradually decline, the mechatronics business itself is growing. Electric cars share many similarities with their fuel-engined cousins: They need brakes, transmissions, safety systems and much more. We manufacture test systems that are related to electromobility, and we can be quite confident that these will stay in high demand for the foreseeable future.
Ergin Cansiz: For the time being, there is still a high demand for emissions measurement. Therefore, it’s still an important part of our business to support the automotive industry with our technology as they move towards zero emissions. As one can see, with the goal of zero emissions, there is an increased awareness of environmental issues, which leads to an increased interest in testing. As long as there is development, there will always be the necessity of testing and measurement. We are mainly supplying to R&D, and R&D means that people are developing today what will be needed tomorrow. Because we have a close relationship with development, we are evolving together with the industry and preparing for the future.
The interesting part of the transformation is that new developments bring new business opportunities: Together with new technology new companies emerge and with that potential customers. This creates a lot of opportunities for HORIBA, such as the new Chinese car brands and manufacturers entering the market.
J-BIG: What is HORIBA going to focus on in Germany in the coming years?
Hiroyuki Urabe: For the next few years, we are focusing on three main business fields: Energy & Environment, Bio & Healthcare and Materials & Semiconductors. Germany is a big market for our environmental business. The company provides analysis and measurement instruments for air and water quality. Our environmental customers come from the government or are manufacturing companies with large factories. In industrial processes, for example, our equipment is used to monitor gas and water quality in factories and power plants.
Another big area for Germany is the semiconductor business. We provide fluid control systems and device inspection systems for semiconductor manufacturing equipment, which enable precise process control and contribute to the stable production of high-performance semiconductors. For example, the semiconductor process requires ultra-pure water or chemical concentration control, which is analysed with our equipment. Our customers in this area are semiconductor OEMs and chemical plants.
J-BIG: What role does Germany play from the headquarters’ point of view and how big is the German market for the company as a whole?
Hiroyuki Urabe: HORIBA has a total of 50 group companies in 28 countries around the world. Established very early on, the German subsidiary has always been a core part of the group. Even now, when the automotive industry is changing and other industries are growing, HORIBA in Germany is very well balanced from the headquarters’ point of view. The semiconductor business is growing, and the environmental business and the Bio & Healthcare segment are stable markets in Germany as well.
Ergin Cansiz: Germany has always played a major role for HORIBA’s international business. It is not only the German market, but as HORIBA Europe we serve the automotive business in many countries. HORIBA employs over 8,000 people worldwide. With 800 employees in Germany, we are definitely one of the large units in the group. HORIBA’s total worldwide turnover is around 2 billion Euro.
J-BIG: What is the nature of the relationship with the Japanese headquarters?
Hiroyuki Urabe: As a legal entity, we are free to make our own decisions, and because the German subsidiary has a long history, there is a strong relationship of trust with the Japanese headquarters. Twice a year we have a big global meeting where all the key people from the group companies get together and discuss HORIBA’s strategy and set plans and concrete goals for the year.
Ergin Cansiz: We started by selling products from Japan, but as Germany has always been strong in development, we now sell a mixture of Japanese products, that are adapted to local needs, and products made by HORIBA in Germany, which we also export to other countries.
Hiroyuki Urabe: We have a total of 20 R&D centers around the world, including one in Darmstadt, Germany. All sites manufacture and export their own products. To avoid product duplication or a lack of products in our portfolio, we work closely together and keep each other informed. We have global product planning groups that come together to discuss market trends, product ideas and to determine what kind of products need to be developed in a specific time period.
J-BIG: What role does Japanese business culture play in the company?
Ergin Cansiz: Although I have a lot of experience working in different international environments, as a non-Japanese there were many things that felt foreign to me at first. But as I got used to the differences and learned more about Japanese business culture, I also began to appreciate many of the Japanese values.
There are three main differences in business culture that immediately come to mind. One is that in Japanese companies, compared to other international businesses, things are discussed over a much longer period of time before a decision is made. But once made, decisions are not easily changed because the attachment to them is stronger.
The second truly Japanese aspect of HORIBA is that employees work for the company for a very long time. But not only the employees, also as an employer HORIBA gives its employees the maximum loyalty. And that is the third difference I have noticed over the years. In general Japanese companies do not let an employee go just because the business is struggling. Only in the very worst cases would we have to let people go, but only as a last resort. This is different from other work cultures, where dismissal is often seen as a quick “solution”. For us, it is always the very last option. This loyalty is something that unites HORIBA and its employees.
Hiroyuki Urabe: I think both the Japanese business culture and the international nature of HORIBA have a strong influence on the company. HORIBA is always adapting to the culture of its various locations. In Japan, for example, decisions are very carefully considered, a lot of time is spent on preparation and plans are strictly followed. In the US, it’s much more dynamic, with a lot of trial and error. From my point of view, Germany is in the middle of these two cultures. Each culture has its own strengths and we learn from each other.
What I find very Japanese about HORIBA is that the company takes responsibility for every step and every decision. In the Japanese way of thinking, decisions are carefully considered by many parties, so the whole company feels like one big team. As a result, no single section ever gets blamed over difficulties the company is facing.
Our company motto is “Joy and Fun”, in Japanese “Omoshiro-Okashiku”, based on the personal experience of our founder, Dr. Horiba. He once told me that we spend so much time at work every day that it would be a waste not to use that time to our advantage and enjoy what we do. We should have fun, be creative and challenge ourselves. If we have fun at work, we will be motivated and the results will be better. This is the kind of workplace HORIBA has always been.
J-BIG: As your company originated in Kyoto, is there anything in your corporate philosophy that you would describe as typical of Kyoto?
Hiroyuki Urabe: Companies in Kyoto tend to specialize and create unique brands that have no duplicates. Of course, as a Kyoto company, we also have a very unique positioning. Let me give you an example: When HORIBA started developing non-dispersive infrared gas analyzers, the field of gas analysis was still dominated by gas chromatography, and NDIR was unheard of. The foresight to apply the capabilities of NDIR as a continuous gas analysis method was an innovative solution and the key to the realisation of today’s HORIBA Group. Today we continuously use NDIR in various application processes such as aspiration gas analysis, automotive emission gas analysis, and air pollution monitoring.
To ensure that we remain authentic and continue to develop unique solutions, we have incorporated the concept of “HONMAMON” into our corporate culture, which is derived from the Japanese word “Honmono”, meaning authentic, and is an expression from Kyoto for the highest level of authenticity. This authenticity is born of genuine curiosity and passion and touches people’s hearts. HONMAMON can describe people, their actions and aspirations, and everything that is created as a result of the constant search for something better. This concept is the essential starting point from which we take on every challenge in order to create something unique and authentic.
Ergin Cansiz: Our corporate philosophy is not only for the top management, but we want to take the whole company on this journey to create something authentic. We encourage our employees to find their own meaning behind the word HONMAMON. For example, we hold philosophy workshops where everyone can participate and discuss our philosophy. We want to create a working environment where everyone can enjoy and contribute.
We also have an internal improvement program called BlackJack Project, which was launched in 1997. It is a bottom-up initiative because we believe that for a company to be creative, everyone needs to participate. Any HORIBA employee can submit a BlackJack Project for improvement, which could be related to the company’s culture, sales, communication, etc., which is then carried out in teams. Employees are given several hours a week to work on their project and gradually present it to the top management. Those are often not huge innovation projects but smaller, but meaningful approaches. For example, one project was to change the light bulbs in our Darmstadt factory to LEDs to make it more environmentally friendly.
J-BIG: What do you see as the biggest challenge for the future of your business?
Ergin Cansiz: I think the transformation that HORIBA is currently experiencing with the electrification of the automotive industry is definitely a new challenge, as the automotive manufacturing and emissions business is deeply rooted in our core DNA. We are excited to think of new solutions for the automotive industry and to see what opportunities will come along with this transformation. HORIBA will continue to contribute to society and make the world a cleaner place by constantly updating our product portfolio and developing unique solutions.
Hiroyuki Urabe: For HORIBA the most important challenge and mission is to think about the greater good: For our employees, our customers, and the environment. We want to always strive for happiness with our solutions.
