In 1937, Tomizo built a new factory with floor space of about 150 square meters. The number of machines had increased and also the number of employees increased tenfold.

The key to success was that Tomizo had a good eye for gears. In those days, in order to operate lathes, change gears were used. He foresaw that demand for lathes would grow soon, as a munitions boom was close at hand.

A 6-foot lathe, then, needed at least twenty change gears. Every ironworks in the city used different change gears of its own. Tomizo sensed there would be great demand for change gears if they had been standardized. He decided he would push on with his plan. Thus, KHK Stock Gears took the first step memorable for company history.

Kaneo Kohara reminisced:
"They started to sell a 23-piece set of change gears for lathe. That hit the jackpot. The change gears sold like hot cakes. There were some who paid money in advance to get one."

The situation, however, had changed completely with the outbreak of World War II.