Tokyo auto parts maker diversifies risk with urban farming experiment
TOKYO — As the auto industry rapidly shifts toward electric vehicles, which require fewer parts than gasoline-powered automobiles, a Tokyo-based truck component maker has entered the field of urban agriculture.
Otsuka Tekko has started growing vegetables indoors with artificial light in a bid to diversify its business as the outlook for the manufacturing side of the business becomes increasingly uncertain.
The company grew lettuce and basil on tiered shelves lit by LED lighting in an experimental grow space. By changing the ambient temperature, humidity and light intensity, the company tries to find the ideal method to grow the tastiest vegetables.
“Growing vegetables has a lot in common with manufacturing,” said Otsuka Tekko Chairman Akihiro Otsuka. Founded in 1939, the company manufactures iron parts and components used in trucks and construction machinery.
Truck parts, primarily engine-related components such as transmissions, account for 70% of the company’s sales. But as major automakers ramp up production of electric vehicles amid decarbonization, the company fears orders could eventually evaporate.
Otsuka, 39, started exploring opportunities in other industries about two years ago. “There’s no way of knowing when a major shift will occur in an industry. You could be wiped out suddenly if you just go with the flow.”
His concerns were heightened when the COVID-19 pandemic caused a drop in orders from large companies and the suspension of shipments pushed up raw material and energy costs.
The company’s indoor grow space uses sensors to monitor nearly 20 parameters, including temperature, humidity and nutrient concentration. The manufacturer also uses sensors to monitor the condition of equipment in the core business area, and Otsuka thought such an experiment could be used in urban agriculture.
The company saw potential in indoor farming as it is not affected by weather conditions and vegetables can be grown without pesticides. Its location in a large consumption area was also seen as an advantage.
In March, Otsuka established subsidiary Farm Haneda, which will operate the facility, with full-scale cultivation planned around spring 2023. The company will open a retail space on the first floor of the building and hopes to establish business partnerships with supermarkets. and other retailers in Tokyo.
“We hope the urban farm will become a mainstay of the business that can offset any downturns on the manufacturing side of the business,” Otsuka said.