We speak with Ichio Otsuka, president of packaging firm Toyo Seikan Group Holdings, Ltd., who gives more insight into his company and the industry. He also discusses some of the company’s unique technologies, such as Toyo Ultimate Can (TULC) and explains how Toyo Seikan Group Holdings, Ltd. has adapted in the face of the pandemic, by developing new paper-based products for the growing e-commerce market.
I would like to start with a series of broader questions before narrowing it down to your company. In recent years, we have seen the rise of manufacturers from emerging economies in the packaging business such as Vietnam, Thailand, or China that have successfully replicated certain manufacturing processes at a cheaper cost and economies of scale. In the face of stiff price competition, however, Japan has retained its market share in various functional subsectors. How can Nihon companies steadily compete with this challenge?
I believe that Japan is known for its attention to detail and meticulousness to particularities. The Japanese monozukuri always incorporates the clients’ perspectives and the effective use of environmental resources into the manufacturing process. We strive to contribute and compete by valuing the environment, continuous innovation, and high originality of products and through continuous communication with the market. We ensure safety and security in our food packaging business.
Our company, along with thirty thousand others in Japan, has more than a hundred years of history. It has been continually thriving, and this has proven that our efforts to positively contribute to the environment and society have been publicly recognized. We are enduring, resilient, and adaptable to time changes. The natural disasters that face Japan have led to our development of solid replenishment strategies. Our packaging reflects our adaptability to the changing times.
In line with the changing times, the packaging sector has been in the public eye lately because of its environmental impact. The government’s attempts to reduce the burden put on the environment have limited the consumption of plastic and packaging products. My two questions are: what do you believe is the role of the private sector, such as Toyo Seikan, in reducing the impact of packaging products? And how is your company contributing to the development of more eco-friendly packaging solutions?
Packaging containers are of great value when they are filled with contents. However, after the contents are consumed, they become disposable waste. Hence, we believe that our responsibility is to develop and offer containers that are recyclable, eco-friendly and are produced with less material input. With our expertise in processing various materials, such as metal, plastic, glass and paper, we are pursuing ways to reduce environmental impact through an optimal combination of these materials.
In our other interviews we have heard that COVID 19 has resulted in a drastic drop in sales from traditional stores and in sales of products reliant on physical advertising. However, at the same time, sales from e-commerce channels have skyrocketed. What has been the impact of the COVID 19 on your corporation? How are you flexibly adapting through these new sales channels?
With the stay-at-home request during this pandemic, we see an increase in the number of people eating at home. It has caused the rise in the consumption and demand for alcoholic beverages and packaged foods, and household waste and environmental issues have been drawing more attention. In response to these social issues, we are advancing and expanding our manufacturing process to adapt to these new demands like shifting from plastic to paper. We are currently developing bento boxes, coffee cups, straws, and lids made of paper. Also, we are creating microwavable transparent food pouches with lower environmental impact so that we reduce energy loss that occurs in heating food in boiling water.
How are you able to create synergies among your three distinct business segments namely packaging solutions, steel plates, and functional materials?
I would like to talk about the synergies throughout our company by talking about the technology of Toyo Ultimate Can, or TULC, a key product of our beverage can business. The TULC, whose body is laminated with film that reduces friction, has been developed by combining metal and plastic with our research and technology abilities. TULC is highly capable of preserving the quality of its content. In fact, a winery in California has started to use this laminated aluminum can. TULC, unlike other normal cans, can extend the shelf-life of wine. The production line for TULC, which we have built and designed for mass production and increased manufacturing efficiency, makes two thousand cans in a minute. It uses very little water in the can forming process while reducing the discharge of waste and hazardous substances.
When our company first started, Toyo Seikan was producing steel cans. During the World War II, however, steel became unobtainable which forced us to explore other alternative materials like paper, glass, plastic. Furthermore, the worldwide commodification and expansion of petroleum in 1960 prompted our petroleum-based and plastic resin-based products. For instance, in the past mayonnaise was packaged in jars to prevent oxidization and extend shelf-life. We developed and produced multi-layered plastic containers that take on the similar characteristics of jars. Our three business segments are assigned as follows: Toyo Seikan manages processing; Toyo Kohan is involved in steel-related technology, and our R&D Lab focuses on plastic-related technology. We have successfully utilized the properties of multiple materials in our different technologies.
We would like to know more about the key to your success of remaining competitive for over a century. How do you differentiate your products from other global corporations, like All American containers or Anchor, to remain competitive and unique?
Our founder, Tatsunosuke Takasaki, said that the main mission of Toyo Seikan is to positively contribute to society. “Profit is merely an outcome, not the goal” is a saying of the founder, which we have ceaselessly prioritized and valued throughout our long history. Because consumers cannot see the content of the can but can only see the outside when deciding to buy it, we must be an honest and reliable company. Our sustained efforts to be a trustworthy company and at the same time adapting to changes of the time have won us support and patronage. Mr. Takasaki also emphasized a Japanese mentality which is the importance of unity and working together to ensure smooth operations in the company. We are a packaging company that has effectively diversified business segments. This rare strength, even on the world stage, is a great resource as we move forward into future innovations in our packaging business.
As an international company that operates in Asia, in the United States, and Europe, can you tell us a little bit more about your international strategy and which markets will play a key role in the years to come for you?
Thailand is the base of our operation in Asia. We initially attended to their high demand for a better capping technology in their beverage packing. As we invested more in the Thai market, we have seen more Japanese-based companies expanding into Southeast Asia and that allowed us to procure and expand our clientele in the same domain.
Apart from this expansion, a number of beverage companies in China also sought partnerships with us. While focusing on China and Southeast Asia, we want to expand our business globally. Moreover, we have already been collaborating with the Stolle group before it became a part of our company. Though our engineering capabilities are highly appraised, our joint effort with the Stolle Group helped us to gain a more worldwide perspective of our growth possibilities and to perceive the market on a more global scale through their marketing capacity. Our technology thus began to gain wider attention and there is now a greater demand for our products. I believe we can make contribution also in the engineering market.
In terms of global trends toward a low carbon society, we intend to enhance our aluminum-centered engineering and development. Our technology of aTULC, an environmentally friendly manufacturing process, aims to directly manage the manufacturing process and the value chain and consequently reduce the carbon footprint. We are prepared to respond and adapt to the shift from mass production and consumption to a high mixed low volume business model. We are also planning to produce and sell the compact system for aTULC manufacturing with lower pricing. In addition, we are making great efforts in valuing and reaching sustainable development goals (SDGs). I believe that it is an exciting opportunity for us to make greater gains.
If we were to have another interview in five years, what objectives and vision would you like to have achieved personally and for the company?
Since this May, we have taken new steps in introducing the two main pillars of our company towards 2050. The first pillar is treasuring diversity which emphasizes the need to cater to the diverse needs of consumers. We want this to be a central part of our business. The second is contributing to a sustainable society. It is uncertain what the future of the packaging business will be five or ten years from now; however, we are very excited to continue changing and adapting to changes, to work together with our employees, and to strive to be the harbingers of change. Five years from now, it would be wonderful if I could introduce to you a whole new array of packaging technologies that live up to our slogan: ‘Let us strive now to toward a more sustainable world.’