After half a century in business and with a new president at the helm, sludge treatment expert targets growth opportunities in Southeast Asia.
At present, we find ourselves at a pivotal juncture for Japanese industry. The last three years have seen severe supply chain disruptions due to COVID-19 as well as the US-China decoupling situation. As a result, many corporate groups are looking to diversify their suppliers for reliability. Known for their reliability and advanced technology, Japanese firms are in an interesting position, and due to a weak JPY, many observers argue that this is a unique opportunity. Do you agree with this sentiment, and what are the advantages of Japanese firms in this current macroeconomic environment?
Before answering your question, I would like to explain a little about our sludge treatment equipment which accounts for 80% of our sales. People sometimes misunderstand the functions of this equipment, so I would like to clarify that first. On occasion, people think that our sludge dewatering equipment actually filters and purifies the water. However, that is not its intended purpose.
Although we are experiencing advantages due to the depreciation of the JPY, there are also downsides to it. The devaluation of the JPY has caused import costs to rise and the cost of raw materials such as stainless steel has gone up. As a result, this rise in costs will inevitably lead to adjustments to our pricing structure. Nevertheless, from an international standpoint, it appears that Japanese products now exhibit competitiveness both in terms of pricing and functionality. Our annual turnover is approximately JPY 2 billion, and last year, our overseas sales accounted for more than 50%, surpassing JPY 1 billion. We anticipate this ratio to increase given that the Japanese market is shrinking. As for the advantages of being a Japanese supplier in the global supply chain, Japan is known for its quality and reliability, and this has helped us to grow overseas.
Japan is the most aged society in the world with a rapidly shrinking population. What challenges has this demographic shift presented for your firm and how have you been reacting to it?
Japan’s demographic decline presents a considerable challenge for both the broader Japanese economy and our company in particular. The average age of our employees is 43.8 years, signifying a substantial increase compared to 10 years ago. Recruiting new graduates and younger individuals has proven difficult. Establishing an appealing work environment is imperative to attract and retain the interest of young employees. Our ongoing business strategy is centered around international expansion. Consequently, proficiency in English and a willingness to travel for market expansion are desirable attributes we look for in prospective employees. We aspire to provide our employees with the freedom to innovate and create new works, and we are leveraging this approach to appeal to the younger generations.
When we established Amcon Europe in 2011, we dispatched three Japanese personnel. The president that we chose was in his twenties. Initially, language barriers hindered communication as none of them were proficient in the local Czech language. Nonetheless, their hard work and dedication propelled the enduring success of the company. This resilient spirit is deeply embedded in our corporate culture.
At the same time, extending the retirement age is also essential. Seven years ago, we extended our retirement age from 60 to 65 years old without a drop in salaries, a practice often observed in the Japanese employment landscape. We want to keep our older employees motivated and ensure that we retain their knowledge and expertise for longer.
We know that among Amcon’s standout products is your brand, VOLUTE™. There are many different products within this brand. One product that we know of is the sludge dehydrator and thickener which you developed in-house. To ensure its quality, you have conducted over three hundred different inspections. What are the advantages of the VOLUTE™ brand compared to other products? Why should customers purchase a VOLUTE™ branded product?
This uniqueness of our products resides in their position within a unique category, distinct from conventional solutions. This distinction is epitomized by our VOLUTE™ brand. We developed VOLUTE™ in 1991, and since then, other companies have created similar products within this category. There are different types of dewatering methods. One such approach is the centrifugal method, akin to a washing machine, which excels in handling large dewatering volumes. However, it consumes a lot of electricity and is very noisy.
Another of the more conventional approaches is the belt-type method which uses a plastic grid. Sludge is placed on this grid and compressed from above to remove the water. The problem with this method is that the sludge gets stuck in the grid, which requires the use of additional clean water to dislodge it. This proves inefficient due to the substantial water consumption involved. The screw press dewatering method served as the foundation for our innovation. Yet, like the belt-type method, the sludge sticks to the metal grid that is used in this approach, and water is required to clean it after it is used.
Our VOLUTE™ successfully addresses the issues that the other methods experience. For instance, the centrifugal method requires high electricity consumption and is quite noisy, while the belt press and screw press methods require cleaning with additional water after use. The distinctiveness of our VOLUTE™ products emanates from the incorporation of a cylinder that envelops the dewatering apparatus. Moreover, we have enhanced and fortified the sludge dewatering process.
Since the introduction of our revolutionary product line up – VOLUTE™ – roughly 30 years ago, we have been continuously aiming to not only improve upon the existing technology we have, but to also establish a whole new genre of Sludge Dewatering Presses. In order to realize this dream of ours, we put extra emphasis on the following three principles:
1. To reduce the need for replacing consumable parts within the Dewatering Press.
2. To reduce the likelihood of degradation in Dewatering capabilities.
3. And to increase the compatibility of our Dewatering Presses with a broader range of sludge types.
VOLUTE DUO™ is our flagship product which was developed through an in-house R&D project roughly 2 years ago. Through our determined stance and perseverance, we managed to introduce to the world a new era of Dewatering Presses, and disrupted the industry with a never-before used proprietary technology. Unlike our alternative bestselling products such as the GS and FS series, VOLUTE DUO™ requires only one filtration unit while simultaneously encasing two Screws within the one filtration cylinder.
Now, in order to achieve a self-cleaning mechanism, which helps reduce excess water being used to clean the filtration unit, we came up with an ingenious idea to use Moving Rings that surround the two Screws. These Moving Rings are attached to an external driving rod, to prevent contact between the Moving Rings and the Screws, thus reducing wear and tear of such consumable parts. Ultimately, this design will significantly increase the longevity of the product to a near unprecedented level.
Our products are capable of processing low concentrations of sludge. Traditionally, effective sludge treatment necessitated that the sludge must be concentrated and thickened before treatment. We revolutionized the process of sludge treatment. Before our innovation, low concentrations of sludge could not be treated adequately.
The sludge first needed to be taken to a thickening tank. It was then transferred to a sewage tank and when the sludge reached a certain accumulation threshold, only then could it be processed. However, organic waste for example rots easily in the summertime and therefore requires deodorizing devices. This added to the amount of equipment that was needed. Our process does not require a thickening tank or a storage tank. You can directly use the sludge regardless of its concentration level. This reduces the amount of time and space required for machinery.
Though the principal aim of our technology does not entail water purification, it effectively prevents alterations in water composition. Over time, sludge transitions from an aerobic to a digestive state, which makes it more difficult to treat. If this water gets into rivers or the sea it creates a Red Currant, giving excessive nutrients to the water. While not the primary goal, our technology exhibits the capability to maintain water stability. Collaboratively developed with the Japanese organization for water and sewage treatment, this technology was tailored to align with Japanese sludge treatment approaches.
Your company has been in Europe for a long time. You have had a presence in the Czech Republic since 2011 and you established your German subsidiary in 2019. In Europe, there are many regulations and standards to adhere to. You have a product that is energy-saving, and cost-effective, with a faster processing time due to its integration of the thickening while also providing water solutions. Why is this not a de facto global standard for sludge treatment facilities?
It would be inaccurate to claim that this product has not gained global traction. In reality, its popularity has been on the rise in the US. It has taken us around 15 or 20 years to be successful in the US market. Our popularity has steadily expanded over time. Of the total units that we have sold, around 90% are attributed to sewage projects, which is indicative of the mainstream adoption of our products. However, certain barriers persist in the European and Asian markets.
For example, in the Asian market, we have many competitors who make very similar products to ours but sell them at half the price. This trend is particularly pronounced in China where our competitors emulate our products and export them to neighboring countries like Thailand and Vietnam. We also have similar competitors in the European market. Even in Czechia, where we established our base, we have a competitor who makes similar types of products to us.
Country by country, there are different hurdles. For instance, if we consider the German market, they have their own cultural and business practices. I believe that it will be quite difficult to make VOLUTE™ mainstream in Germany, as they prefer their own products and technologies, such as the centrifugal method which was actually developed in Germany.
One of your products is used in semiconductor packaging as well as PCB specifically for the photoresist stage. Electronic plants create a lot of stripping residue, which is quite dangerous to move due to its high alkaline content for example. It is quite strange to hear that people at these plants move the stripping manually into big containers or drums for it to be stored. How does your technology for the semiconductor field create safer handling of this stripping residue and solution?
The initial purpose of developing our TV series of dewatering presses was for food residue dewatering, such as for pickling, coffee-extracting, and green tea extraction for PET bottle green tea production. We received requests from food-related factories to use VOLUTE™ for dewatering the residue. However, it was not applicable, so we decided to develop a new series.
Unfortunately, our TV series did not do as well as expected in the food industry. One of our customers then contacted us about using our TV series for PCB photoresist residue water extraction. We were successful in these attempts, and our TV series is now widely used by PCB manufacturers for removing the alkaline solution from the resist film residue. Conventionally this residue was directly discarded as industrial waste. However, its high concentration of alkaline makes it quite dangerous. The treatment of industrial waste was also very expensive. Introducing our dewatering machinery enhances safety and significantly reduces costs.
I spoke earlier about the grid that is used in conventional methods such as the belt and screw presses. We improved this by adding a multi-layered disk around the grid. This disk cleans the grid while it is dewatering and does not require additional water for cleaning. Also, as I mentioned earlier, the centrifugal method is quite nosy. It requires a soundproof wall to be built around the centrifugal machine to reduce the noise. Although you can control the motor speed of our VOLUTE™ machines by using the inverter, it usually turns 3-4 times per minute, which is quite slow and does not create a lot of noise. Our VOLUTE™ machines considerably reduce the noise, with only the sound of water droplets being heard. Those are the advantages of our VOLUTE™ series.
Are you currently looking for international partners in locations such as the US, Europe, or Asia to help your international expansion?
Yes, we are looking for partners. Presently, we have a network of distributors across the world. We have developed strong partnerships in the US, and we are cooperating with official distributors there for the distribution of our products. Some of the other areas in which we also have official distributors include India, Mexico, Sweden, Taiwan, and the Philippines amongst others. We have official distributors in 15 countries in total. We believe that expanding our sales by forming new partnerships is very important for the further expansion of our business. We are now looking for the right partners to do so.
Moving forward, which countries or regions do you believe will be key for your corporate growth, and what strategies will you employ in order to achieve your international targets?
Water treatment methods are universally applicable across the globe, as the fundamental objective is to transform polluted water into clean water via a sequence of processes. Sludge is always the byproduct. As a sludge treatment machine manufacturer, we can do business anywhere in the world. Recently, in August, we dispatched our personnel to the Philippines to start up a sales office there. We aim to establish a company there this year and we are currently in the registration phase. India is another important market that we are focusing on. Although the global market is massive, we want to offer our products and services across the globe including the areas that I mentioned.
We are also focusing on increasing our product lineup. Our main product is VOLUTE™ and it is supported by VOLUTE DUO™. However, we recognize the importance of offering a more comprehensive lineup of products. That is why we are putting a lot of emphasis on the development of wastewater treatment facilities and equipment.
In terms of our expansion in the Philippines, our office is categorized as limited in terms of operations. We plan to start small and then gradually expand our operations to become an official sales office. Currently, our Philippines office is focused primarily on marketing rather than direct sales.
Imagine that we return to interview you again on the last day of your presidency: Is there a goal that you would like to achieve during your time as president?
Next month I will be stepping down from my role and passing the presidency to Mr. Aizawa. I succeeded my father as president 17 years ago shortly before he passed away. At that time, I was working in a different industry and did not know a lot about our industry or the company. At first, it was a struggle. However, I learned that if you work hard and persevere, you can overcome the obstacles that you face.
The important thing is that I am alive and well and will continue to work within the company as the chairman. The most important decisions will be made by our dedicated employees. I am very grateful to all our employees who have been working very hard to support the company. Being able to face challenges and never give up is crucial. If you possess that spirit, I truly believe that you will be able to do anything you set your mind to.
Mr. Aizawa, as you succeed Mr. Sasaki as president in a month’s time, do you have a goal or objective that you want to achieve?
I have several objectives that I would like to achieve during my time as president. I want to be a president who can win. In the future, I know that there will be challenges and difficulties that I will need to face and there will be important decisions that I will need to make. I want to be able to overcome all of these challenges and make the company the best it can be. To complement this spirit, I have lots of ideas and plans. It would take a very long time to explain them in detail.
Interview conducted by Karune Walker & Antoine Azoulay