Editor’s Note
This article examines how Kosai, a Japanese jewelry parts manufacturer, has achieved growth despite industry headwinds, highlighting its technical specialization as a key competitive advantage.
Have you recently worn or purchased any jewelry? Against the backdrop of a prolonged economic downturn and shifting consumption values among millennials, a “jewelry exodus” is accelerating across all age groups, leading to a persistently tough period for the industry.
Amidst this, “Kosai” (which changed its name from “Kosai Kogyo” in 2017), a company specializing in jewelry and accessory parts processing, stands out as one of the notable firms achieving upward growth within the struggling jewelry industry. Regarding the driving force behind this growth, President Eiji Fukazawa reveals, “It lies in the combination of two areas we have focused on for several years: the manufacturing of ‘accessory parts’ and ‘forged jewelry’.”
Yamanashi Prefecture, where Kosai is headquartered, is known as one of Japan’s leading jewelry production areas, famous for crystal and precious stone work. Kosai was founded in 1955 in Kofu City, Yamanashi, by Nobuo Fukazawa, the father of the current president, Eiji Fukazawa. In the 1970s, as Kofu City developed significantly as a hub for the jewelry industry, Kosai, which had been making accessory fittings like earrings for its own use, began to seriously engage in the parts business due to increasing sales requests from other companies. This has now grown into one of the company’s main businesses.
Currently, Kosai handles a wide range of products, focusing on items for the ear area, including necklace and men’s parts, totaling approximately 12,000 varieties. New models are added every year. While most other companies manufacture and sell only single items like “earrings only,” Kosai is the only comprehensive parts manufacturer in Japan. Furthermore, since 1999, the company has started selling parts overseas and now supplies products to 12 countries, including the United States and China.
The company is also advancing its efforts in multi-material (creating products using different materials) manufacturing, with products using medical-grade silicone being one of its main offerings. To ensure they are allergy-free, they have completely eliminated five types of allergenic metals. This makes product manufacturing more sophisticated, but the commitment to materials has earned praise from overseas customers as well. Additionally, in recent years, as the proportion of people in Japan preferring earrings over piercings has increased, demand for new types of earring parts has also expanded significantly.
Parallel to parts manufacturing, the company is engaged in “forged jewelry.” This refers to jewelry made by mechanically hammering metal into shape and then carving it out. While most of the work is done by machine, there are processes that can only be handled manually, requiring artisan skill. If simply expanding equipment could yield results, other companies could imitate high-quality products. However, the company takes pride in its manufacturing, which combines technical capabilities from equipment investment with artisan skills, calling it “our unique strength” (President Fukazawa).
Finishing with forging allows even products made from soft materials to be hardened using unique processing techniques. With high strength, they are resistant to deformation and scratching, making forged jewelry “lifetime” pieces. For example, they are steadily gaining market share as bridal jewelry. Additionally, because processing is done with computer-controlled machinery, it offers the advantage of higher precision compared to cast products and the ability to handle more design-oriented items.
He believes that improving expressive power and achieving cost reduction for this purpose are also missions of the company handling forged jewelry.
While Kosai manufactures both “parts” and “forged jewelry,” the company is proud that “specializing to this extent with the combination of these two is unique to our company, not only in Japan but globally” (Fukazawa).
In 2015, the company invested nearly 200 million yen and even closed its casting factory to commit to forged jewelry production. This decision was based on the observation that there are overlapping aspects between the technology used in fitting manufacturing and that used in forged jewelry. Equipment like continuous casting machines and rolling mills are necessary in both manufacturing processes, making the investment highly effective. Although a latecomer as a forging manufacturer, its growth power is on par with or surpasses that of pioneering companies in terms of productivity and added value. Revenue, which was tens of millions of yen, expanded to nearly 1 billion yen in just a few years.
Reflecting on this management strategy, President Fukazawa says, “People around me probably wondered ‘what are they doing?’ but I didn’t feel any risk at all.” Faced with foundational technologies thought to have little room for innovation, he concluded that enhancing added value and building an efficient production system require both unique production technology and mass-production technology, and that the combination of “parts” and “forging” is precisely what can achieve this.
With improved productivity, despite expanding business performance and shipment volumes, overtime hours have continued to decrease. As a result, this has also contributed to higher employee retention rates.
President Fukazawa, who also serves as a permanent director of the Japan Jewelry Association, envisions the meaning jewelry brings and the future of the industry as follows:
Indeed, jewelry brings not only the satisfaction of acquiring it but also various invisible effects, such as brightening one’s heart simply by wearing it, or providing a sense of “connection” and security if it is inherited from a loved one.
That is why President Fukazawa’s words resonate deeply: “To reclaim the spiritual value that jewelry brings, I want to propose items suited to the times.”
The company’s management philosophy of “wanting to continue making products that allow people to feel Quality (quality/reliability) and Qualia (joy/emotion)” will likely continue to color the daily lives and milestones of many people for generations to come.