Tailormade solutions and client-first approach

How has Abenomics impacted Japan, and most particularly your sector?

Fundamentally speaking, the main aim of Abenomics was to trigger the depreciation of the yen while relaxing fiscal policies to kick-start growth. For decades, Japan has been facing deflation, and Abenomics was launched to stimulate and re-vitalize the economy. Unfortunately, we have yet to feel its full effect. If we consider the consumer’s assets, such as one’s salary, the latter has gone up. However, the problem resides in the mindset of the population. Japanese people are still glued to the deflation mentality.

Furthermore, while the consumer’s purchasing power has gone up, the cost of the product hasn't increased, so it hasn't really benefited us either. While we are currently living under a tough market environment for generic products, the demand for quality solutions is growing increasingly important. This phenomenon is specifically relevant to the food sector, where nutrition and taste are key assets. Furthermore, Japanese people are increasingly considering the functionality of food. At Nitta Gelatin, we are trying to diversify our product’s application based on the market’s trends. We have started manufacturing innovative gelatin and collagen products in order to enable our company to make special and targeted products.

Japanese companies have always excelled in terms of know-how and technique, their products and services tend not to be as famous when expanding beyond the national border. What competitive advantages does the Japanese corporate culture have that its regional competitors (China, Korea) do not?

First, I believe that this phenomenon is caused by the characteristics of the Japanese population. Japan has never been good at showing off, we simply prefer to display our products without overselling. However, I believe that our people’s mentality is changing. As corporations are increasingly going global, they are becoming more assertive. Even though we do have companies such as Toyota that are internationally recognized brands, a large number of Japanese corporations do not manufacture the end product; they make parts, which is harder to advertise. Japan has always invented original products, and in comparison to our competitors, our strength is creation. Even if competing countries are able to replicate our products and processes, we will always come up with innovative solutions that only we can make.

As a company that is present in a multitude of sectors, from comestibles to pharmaceuticals and cosmetics, what brand or end product are you the proudest of?

We are not proud of our products per se, but rather of their applications. Gelatin is not just a mere ingredient; it is a technological science that allows for development. I am very proud to say that our products can be used in many different applications.

The global market for gelatin is projected to reach 440 thousand metric tons by 2020, growing at a CAGR of 4.9% in some regions. What are the reasons behind this growth? How is Nitta Gelatin working to capitalize on this momentum?
It really depends. If the economy of a country increases, we can see higher demand for deserts, pharmaceuticals and cosmetics, in which we are present. Furthermore, the gelatin market is led by developing countries. For us, we put a strong emphasis on Asia. We have a strong foothold in Japan and India, and as the market will grow, we will use our technical and sales expertise to harvest that growth.

In 1975, Nitta Gelatin Inc. established its first international base in India. Today, Nitta Gelatin has some 20 affiliated companies spread around the globe, and around 48% of its total revenue comes from international operations, with the USA representing 24% of all sales. When penetrating a new market, what competitive advantages does Nitta Gelatin bring?

Our competitors make generic products, and then let their clients choose which one suits them best. Our company adapts its products to the needs of its customers. We tailor-make our solutions to satisfy our client’s demand. While this creates many difficulties, it allows us to create a bond with our partners, making sure that they do not switch to the competition. Furthermore, when entering a new market, we apply a very careful strategy. First, we gather data and market insight, allowing us to understand exactly how we can be successful in penetrating the region. We put a great emphasis on market intelligence.

From 2015 to 2016, your revenue increased by more than 20%. Your revenues in Japan grew by 4.7%, in the USA by over 12%, in Asia by 10%, while Canada dropped by almost 20%. Looking to the future, what geographical markets have the greatest potential?

As I mentioned it before, Asia, including China, will be our main emphasis. In terms of the food market, Asia is massive and demands regional adaptation, which is one of our core strengths. We are also adapting our collagen peptide products to fit the health food industry. In the future, we aim at penetrating the medical field by developing multi-functional collagen products.

In 2016, you established a Vyse Gelatin, LLC (USA), currently a consolidated subsidiary. What were the reasons behind taking over a portion of business?

Vyse Gelatin, LLC is a very specific company. Compared to other organizations, Vyse Gelatin doesn't have the largest production volume. However, they do have an extensive clientele in the food sector. In order for our sales to expand, we chose them to leverage on their sales network.

Your market is competitive, with companies such as Darling Ingredients, Sterling Gelatin or Ewald Gelatine GmbH. What are the competitive advantages of Nitta Gelatin?

Compared to our competitors, we might never be able to become number one in terms of volume. However, in the niche markets, we have the ability to provide high added value products. Furthermore, we are experts at customization. These competitive advantages will allow us to become the number one.

What managerial actions do you implement to keep that philosophy of client first?

Our company’s philosophy is present everywhere. In every international base, we make our employees abide by our corporate standards. This philosophy is embedded in our business operations, and within our infrastructure, you can find it on our walls and meeting rooms. We educate our employees to behave accordingly to our philosophy.

 

Your company was created in 1918, becoming Japan’s first industrial producers of gelatin. After 98 years of existence, what were the main challenges that you faced and how did you overcome then?

Our company has experienced a significant loss of business twice. The first time it was because of the cow disease, as regulators said that we could not use cow-based materials. Another crisis that we faced happened during the digitalization process of cameras, as we supplied gelatin to the photographic film manufacturers. The power of our employees pulled us through these crises. Every time we faced a major issue, we successfully developed new applications for our products. Employees are, and always have been, at the core of our corporate philosophy.

What would you say is the main difference between Nitta Gelatin Inc. and some of its US counterparts?

Lots of US companies look for short-term profits. Their main concern is too often “how much money can we give back to our shareholders?” However, Japan is very different, as our main emphasis is put on the survival of the company. We are committed at delivering to our employees and clients. At Nitta Gelatin, we have established long relationships with our customers and clients, and that is where we get our profits from. We aim at creating sustainable relationships with all our stakeholders.

What legacy would you like to have left behind at Nitta Gelatin?

I want Nitta Gelatin to become a comprehensive collagen maker, with diversified applications and products. I want us to become a unique gelatin company. Furthermore, I want to raise the sales profitability of our company to 10%.