Investors including Mr Loeb remain fascinated by the company’s ultra-focused management policy and high profit margins of 40 per cent.

The company expects a 67 per cent rise in full-year net profit to Y185bn ($1.6bn). Since Mr Loeb revealed his stake in mid-February, shares in Fanuc, which has a market capitalisation of $43bn, have climbed 18 per cent to hit record highs.

Analysts have raised concerns that orders for Fanuc’s Robodrill machine tools, used to make metal cases for iPhones and other smartphones, could be reaching a peak. But Mr Inaba says he is counting on growth in theChinese market, where rising labour costs have increased demand for industrial robots.

He hopes to expand the company’s market share in Europe, India, Brazil and Africa. The US market, of which Fanuc holds about 50 per cent, is also booming, with Fanuc having clinched orders from Ford, Tesla and aircraft manufacturers, according to Goldman Sachs analysts.

“We are also going to plant the seeds for future growth,” Mr Inaba adds, though he declines to give any details.

Mr Inaba, who took over from his father in 2003, began his career at Japanese truckmaker Isuzu and was not groomed to run the company. Soft-spoken and relaxed, he claims he has not inherited his father’s authoritarian management style.

Still, he says he learnt from his father the need to adapt quickly to changes. That flexibility is being tested as Fanuc tries to woo more people into investing in its future.

Making peace with robots

A new green “collaborative” robot may soon join Fanuc’s army of yellow factory robots.

The recently revealed robot is installed with sensors and other safety technologies that will allow it to stop immediately when it comes in contact with a human being.

“Robots are considered a dangerous presence since they have become so powerful, to carry heavy items at a faster speed,” says Yoshiharu Inaba, Fanuc’s chief executive. “But robots can work together with humans.”

Mr Inaba also says robots will not be stealing the jobs of humans any time soon even if they become more intelligent. “Robots make products for human beings. It’s up to human beings to decide whether what the robots made are good or not,” he said.

David Fuller's view

Here is the Financial Times article on Fanuc.

I have previously described Fanuc as a successful company whose time has arrived.

Imagine huge industrial robots which can work around the clock, with minimal supervision, assembling increasingly complex machines with uniform consistency.  Of course, investors will want to own some of the successful multinational corporate Autonomies which are designing and marketing these largely robot-produced machines, because their cost efficiency and competitiveness has never been better. 

Interestingly, while Fanuc (weekly & daily) remains the leading producer of industrial robots, its position will obviously be very strong because more companies will want to use the Japanese firm’s robots so that they can remain competitive.  This is already reflected by Asia’s (mostly Japan’s) big lead – see the graphic: ‘Annual supply of industrial robots’, shown in the FT article above. 

In conclusion, the only foreseeable long-term risk for Fanuc, I suggest, is in the quality of its managers.  Their performance could vary.  Otherwise, the leading manufacture of industrial robots should be much less susceptible to the frequent problem of rapid obsolescence that we see with many other types of technology companies.