Thursday, Apr 25, 2019
Industry & Trade | Asia-Pacific | Japan

Toray Industries, Japan

How To ‘Create The Impossible?’


2 weeks ago

Akihiro Nikkaku, President of TORAY INDUSTRIES INC.
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Akihiro Nikkaku

President of TORAY INDUSTRIES INC.

In this interview for the Worldfolio, Akihiro Nikkaku, President of Toray Industries, delivers the secret behind the success of one of Japan’s most famous companies: Long-term thinking.

 

Many experts argue that Japanese corporations are lacking in flexibility and have lost track of market trends. As the ambassador of a large Japanese corporation, what are your views on these criticisms and how do you argue against them?

First of all, one needs to understand that as emerging economies continue to grow, the international market grows adjacent to their development. To answer this rising demand, there are many parts and components that come from Japan. One also witnesses that the quality required to manufacture modern products is undoubtedly rising. When looking at volume alone, one will analyse that the share of Japanese products is relatively small in comparison to the overall size of the market. However, one will also observe that Nippon manufacturers dominate niche segments with low production volumes but that require high quality and precision. For example, 30 years ago, Japan was leading the textile and polymer market. Today, China has surpassed Japan in terms of production volume. Nevertheless, companies such as Toray have remained market leaders in niche fields. Toray also deals with polyester, nylon and acrylics, but we're centred on highly specialised fields. For example, the highly functional fibres that are used in Uniqlo’s ‘Heat Tech’ technology.

‘Heat-tech’ uses four different types of fibres, namely, polyester, acrylics, rayon and polyurethane. To develop this technology, we had to make the impossible possible. Before the invention of ‘Heat Tech,’ it was deemed impossible to adjust the colours of four different fibres to be one colour in the process of dying fabrics. This technique is unique to Toray. It exemplifies our persistent efforts to continuously pursue R&D and never give up. To produce ‘heat tech,’ we underwent more than 10,000 trials. Usually speaking, trials are executed around 10 to 20 times in ordinary firms. I want you to show me a firm who would do trials at least a hundred times or a thousand times if you know. Such innovative technologies are the results of a specific Japanese style of management and entrepreneurial strategy.

To give you another example. The research for our reverse osmosis membrane technology began in 1968. It was during the era of US president JF Kennedy. It was only in 1980, after so many years of trial and error, that we were able to produce this technology. The 80’s were a time of continuous innovation, as embodied by the appearance of water desalination techniques. Water desalination research began in the 60’s, and we took an active role in its development. At that time, Western, American and European firms challenged this field but after a few years, they all stopped; whereas Toray didn't.

When it comes to carbon fibres, it was first developed by Professor Shindo, in 1961, and we were also involved in that process. It was only in 1971 that we were able to effectively produce carbon fibre material. We've taken around 60 years to develop this technology and it is still undergoing intensive research today. Toray's R&D efforts can be crystallised in the philosophy of ‘never giving up,’ ‘never feeling defeated’ and ‘persistently pursuing R&D.’

 

The 4th Industrial Revolution is defined as a combination between the biological, physical and digital world, and has given birth to a wide array of new products, such as IoT devices, AI software and wearable electronics. What will be the impact of all these technologies on our modern society and how will your company contribute to these developments?

Our involvement will be based on our four core technologies: polymer science, organic chemistry, biotechnology, and nanotechnology. These are the four pillars from which our materials are produced. When it comes to Industry 4.0, many of our chemicals and materials are utilised in digital technologies, such as sensors. While we're not necessarily involved in the production of IoT technology directly, we utilise and apply IoT in our production processes, factories and plants. By utilising Big Data and IoT, we are able to retransmit on a display-screen the entire manufacturing process, distribution and revenue streams of our overseas branches. All these steps can be watched directly from a smartphone. When the phrase Industrial Revolution 4.0 came out a few years ago, one could say that Toray had been already at 4.2!

To go back to our ‘heat-tech,’ we create about a hundred million units per year. The fibres are created in our Ishikawa, Aichi and Ehime plants. Those raw materials are then shipped to China, where they are knitted and dyed to be the heat-tech fabric, before being sent to factories in Hong Kong, Vietnam, Indonesia and Bangladesh. In order to provide a swift response to our clients, we must have real-time information available as to how many threads are being produced, what is the processing stage, or how is the dying process going. To be efficient, we need to get an accurate understanding of where the products are and at what stage. If you were to go to our Hong Kong office today, you'd see a large screen on the wall where you can read the numbers being updated on what is happening at each step of the production process. All of this is viewable and accessible at real-time speed.

 

As you mentioned, carbon was created more than 5 decades ago. When it first came out, carbon fibre was not accepted. Scientists and corporations didn't really know how to utilise it. You were one of the first firms to invest in R&D with a long term vision. Nowadays, we are seeing steady growth over the past 10 years in the carbon fibre field and a variety of new applications, such as airplanes and renewable energy devices utilize this technology. What is your view on the future development of carbon fiber?

One must understand that when you invent something new, nobody knows where it can be applied. For example, in 1941, when Toray developed the Nylon 6 fibre, nobody understood how it could be used. At that time, we didn't want any trouble moving forward so we bought the patent. Gradually, nylons became omnipresent in the production of underwear and garments. At that time, we did a huge promotional campaign and invested more than 10 billion JPY. We hired Twiggy, a famous British actress, to promote our pantyhose by wearing it. We also had Tony Zara advertise our swimwear. From there on, we were able to supply our material to Japanese manufacturers, such as Atsugi or Gunze, pantyhose manufactures.

As the situation that nobody knows for carbon fibre was as same as nylon, the strategy we utilized to promote Carbon Fibre was the same as the one we used with Nylon. As carbon-fibre material is one-fourth the weight while being ten times stronger than steels, it is widely used in airplanes. While we did enter the aviation sector, we also researched other applications. I joined Toray in 1973, and as a new employee, one of my tasks was to brainstorm potential applications for carbon fibre. Gradually, it became widely utilised in tennis rackets, golf shafts, fishing rods and so on.

The efforts undertaken in the development of carbon-fibre allowed us to partner up with Boeing. In fact, we were the only corporation in the world that met the specifications required by Boeing at that time.

What is interesting is that as a manufacturer of raw materials, we do not know where our products will be utilized and applied to. Sometimes, the relentless advance of society catches up after evolving and deepening in our technology. Consequently, our R&D efforts are a continuous challenge for we do not know precisely in what field our products will be used. In fact, many materials developed by our R&D efforts end up being used in fields completely different to what was originally intended. Other manufacturers know exactly what they are producing and to what end. In our case however, we are based on the unknown.

To give you an example, our reverse osmosis membrane technology was initially developed to desalinate water. However, other types of water desalination technologies turned out to be more effective and cost-performant, and our reverse osmosis membrane technology wasn't employed. In the 80’s, the rise of semiconductor utilization created a new demand. As semiconductor production requires extremely pure desalinated water, the demand for our osmosis technology suddenly soared

 

TORAY decided to supply carbon fibre to the Boeing 777X. Can you tell us more about this partnership with Boeing?

In the 90s, the 777 began to fly. 10 to 15 years later, Boeing took a bold step and began creating 787, it makes greater use of carbon composite materials in its airframe and primary structure than any previous Boeing commercial airplane. We are continuously striving to improve our carbon fibre technologies by producing more resilient and stronger material. Among all the firms in the world, I think Toray is the most one that has continued to pursue excellence in carbon fibre technology. In the industrial field like the gas tank, wind-power generator blades, the T700 carbon fibre is employed as standard grade. Various emerging carbon manufacturers are able to produce materials at the level of T700 today, however, we have already gone beyond that and have successfully developed the ‘T1100’ in 2014.

 

With the rise of connectivity and e-commerce, consumers want everything straight away and refuse to wait, leading anthropological experts to argue that we live in an ‘instantaneous era.’ How would you argue the merits of ‘long term thinking?’

Many famous manufacturers are actually assemblers. The job of these firms is to standardize cutting-edge technologies and make complex devices available to the masses. When it comes to such businesses, delivery speed is crucial.

But when one produces raw material, one cannot create a business without having a long track record of science and technological innovation. Even for ‘simple’ materials such as Nylon, Toray’s objective is to dig deeper into research, look for new functionalities and develop innovative applications. Such a mission requires science and technology. Furthermore, we have to create the devices and the production machines required for research. In other words, we have to redesign the entire manufacturing process to be successful.

Without a solid foundation of science and technology, without a historical track record and without patience, you cannot achieve such breakthroughs; you cannot create the impossible.

 


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