Building next-gen plastics for a more sustainable world

Can you tell us about the role chemicals play in our daily life and how is Moriroku taking advantage of the industry’s growth?

When you think of the stereotypical image that many hold of the chemical industry, it is most likely not a positive one, however, what we value the most is the environment. There is a concern with ocean pollution, in particular, bioplastics. Since our responsibility is to not negatively impact ocean pollution, we use lots of raw material for our plastics. We not only recycle but we always find a way to reuse any scraps or waste. Being lightweight is the key requirement for plastics.

What are the key milestones in your company’s long history and what is the competitive advantage that enabled your company to achieve such long-lasting success?

We started a business dealing with indigo and manure in 1663. The first turning point for us was in 1909 when we started a trade business importing indigo from India. This expanded our market and established our foundation in trade. The second milestone was in 1958 when we started our manufacturing business for Honda. They had told us that plastic products would be the game-changer in the market, and so we launched our first production site in 1965. Our third milestone was in 1986 when we opened our first overseas plant in Greenville Ohio. This translated to us becoming a global supplier and for 60% of our annual sales to come from outside of Japan. Lastly, in 2017 we were listed as a public company and this was a new start for us. We became a 350-year-old listed company which was a huge milestone for us. In the same year, we started working with Volkswagen in Mexico. This was our first time working with a European company but since 2017, we have been expanding to work with other European companies. We are now starting our second model with Volkswagen in Mexico.

What would you say are the strengths of your company? What makes you special from other companies in your business?

We manufacture injection parts for both the interior and exterior of automobiles. A strength of ours is that we are a solution provider from a technical point of view. In R&D we bring solutions to customers, we don’t simply ask for an opportunity or follow their lead exactly. We focus on specializing in R&D and technical development to make effective solution proposals to customers. 

Could you run us through Moriroku’s manufacturing and trading business models?

Our territory is in a car’s T zone, air ventilation, center console, leather grain parts, and others. These are all within our range because we can also produce decoration. For exteriors, we can do spoilers, sill garnish, paint, coating, and the like. Over about 50% of Honda plastic parts are from us, and we have some role in each Honda product. 

Could you run us through your diverse portfolio?

In our trading company, we have many makers and suppliers, between them our trading company controls many chemical products in different fields. 

What would you say is the role of R&D in your company?

Naturally, our job is to turn requests made by car manufacturers into reality, but we can also do the opposite and make proposals from a monozukuri perspective. In other words, we can point out how small changes in the manufacturer’s design can, for example, simplify the production process, make the vehicle more durable or more lightweight. This leads to creating a product that is even better (more refined) than the blueprint.

How do you find the companies you want to invest in or co-produce with?

For companies we have co-produced with, we have shared a previous relationship or have financially supported them previously. When we work with a company, we send our people to support their engineering side. Alone we developed our signature simple layer film for food, but when working with a company to develop a more complex multilayer film product, we were able to, together, build a product that ensures a high level of hygiene. This enabled us to build on top of this and our partners work with us to create products that meet even higher hygienic demands. 

How did you find your new clients?

In our work with Honda, we began as a plastic processing business. As our business with Honda expanded, we were also able to grow in the plastic processing field. We are now leveraging the expertise and experience we have accumulated to approach other car manufacturers.

How are you adapting to the shift from smaller businesses also going abroad to identify clients of their own, separate from historically sticking to their large partners?

Much of our business comes from Honda, which is our strong point. From Honda and other big companies, we’ve learned and now understand the values of honesty. We are now very involved overseas with Volkswagen and Audi, and this is because of our long history of experience with Honda. That history provides trust in our great product portfolio and confirms our high competency. We were lucky to get the RFQ from Volkswagen, but it was also really difficult to get because for the first time we had to learn a new company’s culture and it was a big transition for us. For Honda, we know their standards, we know Japanese and American standards but we didn’t know European standards. Even though it took us a few years, we were able to adapt and work closely with Volkswagen. 

Can you tell us more about the 12th midterm plan that Moriroku is in right now?

We don't really have a plan for the next 40-50-years but our next target is to reach our 400-year milestone. Right now the biggest automotive trend is weight reduction, metal reduction, autonomous driving, minding the car's life cycle, and basically having a living room on wheels. For weight reduction and metal reduction, we have a great advantage because we can offer plastics, which is part of our midterm goal. As for autonomous driving, once driving becomes 100% autonomous there will be many metal parts that can become plastic. And this would be great for us and we actively work toward this. For life cycle assessment, we want to be a one-stop-shop that does and plans design modification and can set up all the way through until serial production, taking care of the entire process. By doing this we can also focus on recycling and environmental activities during serial production. SDG and ESG are also perspectives for us to consider.

Are there any new fields you wish to tackle, other than auto and medical?

Our midterm plan spans three years. While short, we are striving to establish a new business pillar within this timeframe. This could be in 5G or electric, auto-drive cars. The next generation pillar will definitely be in tech. But right now, with COVID-19 what is most important is keeping finances strong. The plastic industry is growing a lot, but without technology keeping pace, nothing can develop. One of the competitive advantages we hold is that we develop the recipes of raw materials: how much of what goes into certain compounds or how to make new materials, but we do not manufacture things that are easy to make. We face areas that need technological development to produce what we need, but having our recipes is definitely an advantage. Within auto, we are tackling issues with innovative solutions that involve more plastic and less metal, like making fuel filler lids and SUV back doors plastic. All over the world, these milestones of plastic production are starting to be met and we continue to manufacture the same products for customers starting to desire more plastic. 

What would you say is Moriroku’s current international strategy?

We have long been in other Asian countries like the Philippines, Thailand, and Indonesia. We have technical and R&D centers in four regions. In terms of production volumes, the biggest market is of course North America and China, and we have a long history of strong foundations in those markets. If one region is having economic trouble, our business in others can make up for any losses. However, Europe leads the world in automotive technology and innovation. Current technology all comes from that area so much so that we take the norms and standards that we have learned from them and use those in Mexico, the US, and our other facilities. Risk management is our biggest international strategy challenge, which has been highlighted with COVID-19. When we produce a global product we have to carefully consider where the best location to produce and manufacture it is. There is a huge risk of countries locking down which would greatly hurt the product we are trying to produce. But this experience has helped us to develop a robust business in the US, China, and Japan. For the next generation, when the time is right, we want to enhance our footprint in Europe, South America, and Africa.

Whenever tackling a new country or continent, do you engage in M&A and joint ventures?

In the technological field, our product portfolio is decorative for interiors and exteriors. We have lots of suppliers we collaborate with. So, M&As and joint ventures are very important for us to realize all the business and products we can create. In terms of complementary production systems, we have partners in South America and Europe because Honda is a global company and some cars need things specific to certain regions. We don’t have as much of a footprint in South America and Europe while other companies do so in that case, to retain business, we can offer to customers complimentary services with our products. 

If we come back in two years, what would you like to tell us? What are your dreams for the company?

Our principles are based around high-value products and advanced technology all while contributing to global society. We highly value SDG And ESG and contributing to society through eco-friendly measures. Before being a listed company, we were solely working for the employees to support them and their families, but being public has made it so that we need to also work for our stakeholders, but this does not mean our commitment to our employees has wavered. Whether they are happy working at Moriroku is very important to us. Also, for a long time I worked in the US and diversity is a really big deal there. When I came back to Japan, I was shocked by the lack of diversity so one of my future goals is to make the company more naturally diverse by recruiting people of different backgrounds. Surprisingly, we do have this underway as we have many plants that employ Brazilians, Chinese, and Koreans.