Monday, Dec 18, 2017
Industry & Trade | Science & Technology | Asia-Pacific | Japan

OAT Agrio Japan

Contributing to the people of the world with agro-technology and sincerity


4 months ago

Mr. Akihei Mori, President of OAT Agrio
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Mr. Akihei Mori

President of OAT Agrio

OAT Agrio is a young agro-chemical company with a long history stretching back to the 1950s. Since its inception, OAT Agrio has made innovation through R&D a core component of its caring and sincere philosophy. In this interview for the Worldfolio, Mr. Akihei Mori, President of OAT Agrio, delivers a unique insight into his unique corporation.

By 2050, the world´s population is expected to exceed nine billion. According to the UN’s Food  and Agriculture Organization (FAO), food production will have to increase by 60-70% to feed everyone. What must be done to achieve this goal?

The UN made this announcement in 2009, which was one year before our company was founded. We decided that it our mission would focus on this statement. It also became the core of our company's philosophy, which is "to contribute to the people of the world with our agro-technology and sincerity." In order to be able to increase the food production along with the increase of population, we identified several key areas, such as genetic modification, or the development of agro-chemicals and fertilizers.

Our climate is changing due to global warming and while human beings and animals are able to move away from a worsening environment, crops cannot. Just like people, plants get sick when their immunity decreases. We are attacked by pathogenic virus or bacteria every day and it is because of our immunity that we can protect our bodies. In the same vein, plants need to resist heat, cold, dryness, drought, frost and insects. It is estimated that the damage caused by insects concerns about 40% of total crop harvest all over the world. This means that pesticides alone will no longer be enough. We must enhance the resistance of crops.

Asahi Chemical Manufacturing, our wholly owned subsidiary, has a strong product called ATONIK, which trades under the name of Aegis ESR in the US. This strengthens the resistance of plants. The year 2015 was designated as the 'The International Year of Soils' by the UN. The soil on Earth has been deteriorating because of the shortage of water supply that leads to it drying up. This is a very difficult problem for a small private company to solve; however, our proposal is to use much less water and much less fertilizer. Our ‘fertilizer and fertilization through drip irrigation’ systems are made to supply automatically only the minimum amount of needed water and fertilizer, and thereby contribute to the conservation of resources.

In accordance with the above-mentioned, our company has three lines of business: technologies for protecting crops from insects, diseases and weeds; fertilization through drip irrigation and biostimulants.

 

What is the difference in mindset around social responsibility that a Japanese corporation brings to the table in comparison to its Western competitors?

Let me go back to the ancient Jomon era, which ran until the fourth century BC. At this time, food was obtained by hunting, not by cultivation. People hunted just enough food and they appreciated the abundance of nature’s gifts. As a Chinese philosopher said, "I am content with what I have"; in other words, we are satisfied and happy with getting what we need to eat today and we do not need to hunt more. Because ancient people got nuts in the mountains, they thanked the mountains. It was believed that a god, or something beyond human knowledge, lived in the mountains and nuts were its giving. There were quite a few gods in Japan. We Japanese, still thank nature for its gifts. It explains why we are so considerate to the environment and why we understand the importance of preserving nature.

During the last year, in the US President Trump was elected, and in the UK people voted for a withdrawal from the EU. I think these trends are counteractions to the globalization of the economy, which caused the high unemployment rate among young people and an increasing disparity of wealth all around the world. I respect the economist Thomas Piketty and his book, which, I think, is a warning to the world today. The amount generated from capital is more than economic growth, and the excess of money always seeks a new investment. Many problems we now face are caused by poor redistribution of wealth. No one can be blamed for earning a lot of money; however, the question to be asked is how we should reallocate the acquired wealth.

The total global GDP is approximately $80 trillion. People seek new frontiers in the financial sector, but the space is becoming full. It is the fate of capitalism to always seek growth. For example, the pressure to grow has also led to the monopolization of the agro-chemical industry. Nowadays the top four chemical corporations almost oligopolize the industry. Oligopoly might lead to fraudulent activities. It is like win or lose; life or death.

OAT Agrio is concentrated in the food-related business because food is essential for life. There is a saying that medicine and food have similar roles. In other words, eating well-balanced foods every day makes us healthy. Bearing this in mind, our company helps to provide healthy food through our agro-technology.

 

While Japan has always been excellent at having technical know-how and expertise, it has often failed at commercializing its smart ideas beyond national borders. From your perspective, how well-positioned is Japan to take international leadership in the agro-chemical sector?

Japanese people excel at innovation. However, when it comes to converting that innovation into a profitable business, I think we must make much more effort. There are differences between the world’s major corporations and Japan’s corporations. For example, the size of a major corporation is significantly bigger than that of a Japanese one; therefore, at present, although we have mighty R&D power, we cannot lead the agro-chemical industry.

The four majors are Bayer, BASF, Dow and DuPont. There are fifteen other corporations in the world which are able to develop new agro-chemicals and out of them, ten are Japanese corporations. The resistance of pathogenic bacteria derived from agro-chemicals is similar to that caused by medicines. When you apply too much agro-chemical, bacteria will gradually become resistant. That is why we have to continuously develop new products. It takes at least eleven years to receive a permission to sell agro-chemicals from start of research. We need time and money to develop a new product. It is quite difficult to estimate the exact time needed to develop a new product; however, I can say that we are able to control and improve the cost of development. We focus on a specified area and we have very high level R&D personnel. The majors refer to us as 'J-Makers' (Japanese Makers). J-Makers do not have their own sales channel, so they often supply their new products to the majors. It is also true that the majors have many gaps in their portfolios that J-Makers can help to fill. We compete with each other, and at the same time, we help each other. That is the reality of the agro-chemical business.

 

Which of your products are completely unique and can only be made by you and why?

We have a so-called ‘Green Products’ series of agro-chemicals. Green products do not kill all insects and bacteria; they leave the helpful ones alive. They are able to prevent damage by insects while simultaneously remaining very eco-friendly. It is our R&D policy to develop new products in this area. The use of conventional agro-chemicals is necessary but they should be used only as a last resort.

I do not think that we can compete with majors which have vast lines of products all over the world. I think, however, that we can win in the specific fields in Japan, where precision farming is widely conducted in greenhouses. By using our drip fertilization and irrigation systems, we can reduce the amount of used water and fertilizers. We propose to apply our agro-chemicals when no alternatives are left. Strawberries, tomatoes and cucumbers are highly profitable to farmers and we have the technology to control the growth of these products. These are our advantages and values. I also want to add that we have a joint R&D center in India, and I hope that new products developed in this center will help our growth in the future.

 

What is your international strategy, and what role does the United States play for OAT Agrio?

The American market has a lot of potential and is a higher priority in our marketing strategy. Our eco-friendly products of Cyflumetofen, Kaligreen and ATONIK have been marketed and meeting market needs in the American market. We plan to introduce another in the next few years, too. Under this strategy I hope that more OAT Agrio products will be seen in North and South America in the future.

 

During 2011-2012, you acquired Asahi Chemical Manufacturing Co., Ltd as a 100% owned subsidiary, effectively diversifying your product portfolio. What were the reasons behind this acquisition? How does you company benefit from it?

We completed the acquisition of Asahi Chemical Manufacturing in 2012. Asahi was founded by Mr. Shimazaki who was a very intelligent, noble and wonderful person. When I first met him, he was almost 90 years old and he was fantastically healthy. He studied Indian Philosophy at Tokyo University. He was also very talented in the art of calligraphy. His father was a Buddhist priest, and because my father was also a priest, we had a lot in common and we became good friends. After we got to know each other well, I found out that he had two children but no successor for his business. His company was a target of many competitors who wanted to buy and continue the business. Six years after he passed away, with his will, we took over his business. Buddhists do not kill any living being, including bacteria and insects. Instead of that, they stimulate plants to become bacteria- and insect-resistant. This is the philosophy of biostimulant products, and with this spirit, ATONIK has been able to contribute to the agricultural sector for such a long time. The actual mechanism of stimulating plants is still under study at our R&D center, but I can confirm the power of biostimulants. Mr. Shimazaki at first wanted to invent medicines; however, because of the lack of funds, one day he just threw away the remaining liquid in his garden. Later, by chance, he found out that the grass where the liquid had been thrown has been revitalized. This was the beginning of the development of ATONIK as a biostimulant product. Years later, the product obtained European EPA registration and since then Asahi Chemical has maintained a strong reputation in this field.  In Europe, ATONIK is registered as an agro-chemical product, however, the category of the registration is a plant growth regulator (PGR), which is the closest category for a biostimulant under the present situation. According to a paper by Mr. Shimazaki, components of ATONIK exist in nature, and strengthen plants to help them to protect themselves. No residuals are found in almost all plants after application of ATONIK, which also proves its safety. ATONIK is the representative of our green products.

 

In the future, when you pass the presidency of this company to your successor, what would you like to be your legacy? What is the personal objective of your presidency for the future?

Development of new technologies is our job, but we should never forget sincerity. We should not forget to be dedicated to contributing to the wellbeing of people. This is something that I was taught when I joined Otsuka group more than 40 years ago, and I still believe in it. As President, I wish for this philosophy to be passed on to the next generations. 

OAT Agrio used to be an agro-chemical division of Otsuka Chemical Co., a subsidiary of Otsuka Pharmaceutical Co. and was separated from Otsuka Chemical by MBO in 2010. OAT Agrio is now listed on the first section of Tokyo Stock Exchange.

In 2006, Otsuka Chemical built a plant for producing medicines in India. At first, we were very anxious about the first operation in India, which came out to be successful. As Vice President of Otsuka Chemical, I met many talented young people in India, who were very passionate and enthusiastic. This was a great experience for me. When OAT Agrio was asked to establish a joint venture with Insecticides (India) Limited (IIL), this past experience pushed me to accept the proposal.

Now a copy of our R&D center in Tokushima Japan is in India. The passion for research and development among the young people of India is amazing. Although we need to manage them correctly, I am confident that they can make it. The center was opened in 2012.

Indian people seem to pursue short term profits; however, the development of agro-chemicals is a long-term project. I have persuaded the young and competent president of IIL that we both have a long-term vision.

Long-term vision and sincerity: I truly would like to pass on this philosophy to the next generations.


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