With more than 200 years of experience in the chemical material manufacturing industry, TODA KOGYO is looking to expand its unique products into the electric vehicle (EV) market.
The Japanese chemical industry has suffered when it comes to the production of base chemicals and this is due to regional competitors being able to lower their costs, however, Japanese chemical manufacturers still remain leaders in highly functional and specialized chemicals. Furthermore, Japan can count on a variety of SMEs to develop niche chemical and material technologies. From your point of view, what are the strengths and weaknesses of the Japanese chemical industry today?
The strengths of the Japanese chemical industry can be illustrated by the number of patents that Japanese companies hold in the field. These still outnumber some other countries out there only because of the foundation that Japanese companies have developed. In some ways, this foundation can overcome the advantage of cheaper chemical manufacturing methods that regional competitors excel at.
Another strength lies in being able to be niche and produce difficult chemical compounds. This demonstrates Japanese companies' strengths, especially in comparison to some regional competitors that are inherently cheaper and tend to specialize in more conventional chemical compounds. I think these demonstrate the key pluses found in the Japanese chemical industry. While it is true that regional competitors have mass production, cheaper labor forces, and accessibility to cheaper raw materials, Japanese companies have ways to continue to be competitive and survive, especially when you talk about specialty and complicated chemical compounds.
I would also like to bring up quality assurance (QA); it is something that comes to define not only Japanese chemical manufacturing companies but manufacturing companies as a whole across Japan. When you think about many industries, risk management is important, and it is crucial for Japanese companies to provide top-notch levels of quality. Any product must reach as high a level of quality as possible and I think that also goes some way to describing the preferences of many Japanese monozukuri companies nationwide.
The chemical industry is the largest consumer of both oil and gas, producing more than 10% of fossil fuel emissions worldwide. Domestically, the former Suga administration has stated that Japan must go carbon neutral by the year 2050. Your company has been working on a CO2 separation material which can recover carbon dioxide from various types of flue gasses. Can you tell us more about this material and are you developing any other products that can contribute to a more sustainable society?
CO2 can be separated from gasses by cooling or condensing, a method that is now popular in many compounding-related companies. We are already conducting research on CO2 recovery and separation. In short, it takes advantage of the characteristics of CO2 separation from air and gasses, with sodium ions and iron as the main components. Our goal is to provide the separated and recovered CO2 to companies that use it as a raw material.
This is not something new and the chemical industry has been fighting against this major problem of CO2 emissions for many years now. It is in the minds of many companies and governments right now and we are all trying to implement different strategies to separate CO2 or at least reduce emissions. Some companies are using cryogenic separation, some are using liquid separation, and some are even using gas separation. You name it, chances are there is a company that has tried it. The ultimate goal here is to decrease the burden on the environment and reduce the emission of CO2. It is important for chemical compound manufacturing companies to pursue such activities and position themselves as environmentally friendly companies. Of course, ours is no different and we are trying our best to implement our best efforts to make a more sustainable future for everyone.
Some of the materials we produce help a process that is called CO2-free hydrogen manufacturing using a direct-methane reforming method. We are using two methods, both sodium ferrite and the direct-methane method. Both of these methods require sophisticated production of chemical compounds that help the process. Our company is capable of producing these compounds and supplying them to companies that have such activities.
In order to actually have the direct-methane reforming method widely used in society, it is necessary to cooperate with gas production companies. Since such companies are usually located in Japan, it is important to build good relationships with them and work hand in hand with them to build a system.
Your company provides materials such as your soft ferrite powder, a magnetic powder that is indispensable to electronic components. We know that it is an oxide composed of oxygen and transition metals such as nickel, zinc, and copper. How are your electronic magnetic materials, such as this soft ferrite powder, superior to more conventional ones?
This soft ferrite is not usually compared to others in the market. The usual soft ferrite comparison is done against hard ferrite, and first of all, it is important to understand that they are both forms of ceramic ferrites. The difference is that soft ferrites have a low coercivity and in that way, soft ferrite is much more applicable to electronic components and devices such as smartphones and computers. The potential adaptation and application of soft ferrite are immense and we see a really bright future in that sense. Soft ferrites easily change their magnetization and act as conductors of magnetic fields meaning they are able to remove high-frequency noise effectively. Our company has been working with soft ferrite for a long time now, so we have accumulated a huge and vast wealth of knowledge on how to treat and apply the best features of soft ferrite, thus producing better products.
A lot of electronic devices that work with low-frequency waves are capable of the application of soft ferrite, but when you talk about huge power accumulation such as transformers or power plants, soft ferrite would probably not be a good solution. You would need more metallic solutions in those scenarios.
With the Connected, Autonomous, Shared, Electric (CASE) era, cars are becoming essentially computers on wheels. As a result, there is a multiplication of electronic devices inside vehicles, but this is creating certain dangers when it comes to electromagnetic fields, and there is more potential to create malfunctioning components, not to mention the fact that many of these electronic components are largely responsible for safety. How can your technology protect against electromagnetic disruptions when it comes to electric vehicles?
The application of different alternative components or materials in automotive manufacturing is now in the minds of many part manufacturing companies. Miniaturization and lightweight materials are trends that are pushing forward in the industry, and that all leads to a reduction in fuel and energy consumption. Many companies are trying to come up with different solutions to this end, and we are being asked to produce chemical compounds for the production of automotive parts.
When we talk about the situation with electromagnetic disruptions inside the car, it is an inevitable necessity to create ways to absorb and seal the electromagnetic noise that come from the various electronic components. The conventional method is to adopt metallic materials when you seal the inside of the vehicle. The problem with this method is weight, and if you remove the metallic sealing, electromagnetic disruption is going to be present again. There are many ideas coming from the industry to solve this problem, and we are no different. We came out with our own solutions which are based on the idea of using ferrite material as a replacement for metallic sealing material. It works better to prevent and seal electromagnetic noise. We see these moves in the industry as good news for us and we are excited to apply our best solutions to industry problems.
There are certain kinds of rates and tests that need to be passed to meet industry standardization criteria and to be honest, this is quite hard for some companies out there. Being able to pass certain certifications is a milestone and by doing so, you are demonstrating to the entire industry that your company is capable of providing better solutions.
One product that we found interesting during our research is FEROTOP, a composite molding material made by mixing resin with magnetic powders. It has many applications from automotive to even air conditioners. What market need did you identify when developing the FEROTOP?
I do feel there is great potential for FEROTOP and I actually developed this material myself. Actuators are something that is widely used in cars for seat recliners, window motors, and even air conditioning units. These applications all benefit from the aid of FEROTOP. There are many more applications beyond this but not for the main motor of EVs. Its key applications will be in smaller motors that have actuators. The FEROTOP itself is composite molding material made by mixing resin with magnetic powder. Part manufacturers have always been thinking about ways to control magnetic powder, and it needs to be given a direction to help with components and for those parts to control the rates of magnetism. That is why we thought about mixing resin with magnetic powder to create a form or shape. It allows us to control the powder easier and manipulate the direction of the powder. This is why FEROTOP is a success in the automotive industry. In the past, I was in charge of R&D enhancements for the company and it was my idea to develop this product in particular.
In general, your products are used in a variety of applications. We have talked about electronics and automobiles, but they are also used in mobile terminal devices and even printer toners. Are there any new applications that you would like to expand your products into?
Our major emphasis right now is on the automotive industry and in that industry in particular, there are so many things that can be done. The automotive industry right now is experiencing a lot of changes with electrification and miniaturization. Our activities right now are geared toward the automotive industry to capitalize on a once-in-a-generation shift. Of course, that is not to say that we are looking at other opportunities such as drones or even robotics. We see potential in any industry that is related to the magnetic power of movement parts. We look forward to contributing to these kinds of activities in the future. The company never stops halfway and we are always looking for new and exciting opportunities. We actively participate in exhibitions that are related to our industry and we look to get information firsthand. Basically, we are looking for opportunities to broaden and evolve our business.
Could you tell us a little bit about the role that partnerships play in your business model and are you looking for any partnerships in overseas markets?
The start is here domestically in Japan and we have been working with Japanese companies, helping them with raw materials, compounds, and R&D activities. We have been co-researching with companies on new chemical compounds as well as new methods of applications. There are some tendencies for Japanese companies to expand overseas and when partner companies do so we would like to help with those activities. Essentially, we are looking to go hand in hand with those loyal customers together so that better and more improved business synergies can be created. If we were to do this solo, we would have to conduct full-scale marketing ourselves, and it is why we affiliate ourselves with other like-minded companies. Of course, if the indicators are there that a market is receptive to our products, then we would like to pursue those opportunities, but so far the triggering points have often been starting domestically with Japanese companies.
Are there any specific countries or regions that you have flagged as potential targets for further expansion?
It is hard to say right now because we are living in an ever-evolving society, and now more than ever, things move at such a rapid pace. Tremendous change is happening on a daily basis. It used to be thought that it was easier to go to countries with cheap labor, but these days, this concept does not work because many countries are making different kinds of products. Diversification and acceptance of different technologies are happening all across the globe and countries you wouldn't expect are becoming forerunners for overseas expansion. When the opportunity presents itself to us, we will be equipped and ready to make the move.
Imagine that we come back in 10 years and have this interview all over again: what goals would you like to have achieved by the time we have that new interview?
First of all, our existence as a company came about through R&D, so it is important for us to continue to develop new materials and solutions for our customers, especially with the recent focus on carbon neutrality. We want to continue to innovate and develop positive materials which can contribute to the global goals of carbon neutrality and a planet that is friendly to the environment. My main goal right now is to position the company in that light, helping alleviate the burden on our environment through our carbon neutrality activities.
Next, with all of the changes happening in the automotive industry right now with the emergence of EVs, we ended up talking a lot today about ferrites and this is definitely one example of a product that is being widely used in the automotive structure. We certainly see ourselves becoming more and more useful to the automotive industry as a whole and we are looking to continue to develop interesting new solutions to meet the demands of automotive parts manufacturers for many years to come.