For a cleanroom you can trust, filters are a must!

Over the last 25-30 years, Japan has seen the rise of regional manufacturing competitors who have replicated Japanese monozukuri processes by taking advantage of cheaper labor costs, pushing Japan out of mass industrial markets. However, Japan is still a leader when it comes to niche B2B fields. How have Japanese firms been able to maintain their leadership despite the stiff price competition?

First of all, I think that it is Japanese people’s characteristic that when we are manufacturing things and doing monozukuri, we are mindful of the person on the other side, and we think about how to make that person, who may be the client, happy. I think that, of course, the needs and requirements of the market drastically change over time, but I think Japanese people can respond to that, and sense what the needs are at that moment. They can then reflect that in the products or the services that they provide to the market. I think that is a strong capability we have as Japanese people.

Mass production markets do take a long time to change, but because we are in other fields than mass production, I think we are able to flexibly respond and really meet the needs of the customers. That expertise that we have is something that still makes us strong.

I think some overseas companies tend to really look at the short-term profit, and they are really mindful of that. On the other hand, for Japan, although recently we of course have been mindful of our profits, but I think more than that, our mentality was that we would think about a product or service that is good. Imagine it does not go right and we cannot reap profits in the first stage, but still, I think we would like to try to continue that. Japanese people are really good at endurance and trying to do things without giving up.

Eventually, there comes a time when what we are doing clicks with the market requirements, and that is when we can launch new products that meet the needs of the market, so I think that is another characteristic that we have. However, in the last 10-20 years, I think Japan has tried to copy those countries, and tried to look for short term profit, which we were not really good at. Since it was not a characteristic that we have as Japanese people, I think that is what made us fail, and that is maybe why our global reputation is decreasing, where its being said that Japan has maybe lost its power, that or we are lagging behind. Maybe that is the reason.

Most recently, I think there is this trend where Japanese firms are saying, “Look, we really need to look at what we are good at, and let's review what we will look at”. With that, I think there is this revival of Japanese companies coming right now. It is my personal opinion, but I think that is what is happening.

During the pandemic, we saw many shortages and logistical disruptions that led many firms to look for the creation of shorter supply chains. On top of that, we are seeing that the exchange rate between the Japanese yen and the US dollar is at a very low or very high level, depending on which side you look at it from. All of that is making manufacturing in Japan cheaper than it used to be, making exports more cost effective. Do you believe that this is a trend that can be sustained in the future?

It is not necessary to stick to “Made in Japan” for everything, but there was the trend in the past where we were shifting manufacturing from Japan to overseas, to reduce production cost . But because of this new situation we are in, companies like ourselves have now realized the necessity to establish a supply chain which includes Japan as well. When you talk about sustainability, it is pretty difficult to say, and I am not sure if it is there, but I can at least say that because of this COVID situation, we are now thinking of possibilities that we had not anticipated before.

We know the pandemic also saw the increased need for air purification and air filtration technologies. How has Nippon Muki reacted to this demand, and what opportunities does this present for your company?

In facing the COVID situation as a company, we first thought about where the air purification is most needed, and we came up with the answer. It was a hospital. There were a lot of patients coming in, and we had to make sure that we could introduce equipment that could prevent the further spread of infections, so we developed this equipment in a matter of six months. That is very fast. We developed this for hospitals. This equipment will be more for general use, so it is equipped with a HEPA filter carrying bactericidal enzymes and you can just plug it into a socket and it is really easily usable. These are products that we developed which we think can contribute to society. We can also launch this into the market because it can both contribute to society and sell well. We really focus on these types of products. Right now, the share that we have in Japanese hospitals will be around 80%, so it is quite a number, and these are the negative pressure units that we were able to introduce to hospitals.

Are there any new industries that you would like to expand your products into?

When you look at our company history, we actually started off by supplying to nuclear power generation plants. We started off from there and then we went into the semiconductor field and the pharmaceutical market, but actually right now, what we are most focusing on is the food sector.

We are all talking about SDG's, and food loss is becoming a great issue. We think we can contribute towards this by using our products. By purifying the food factories, we can contribute to the longevity of food products, and we can reduce the amount of food that is thrown away.

We see that the needs are there on the client side as well, and we also, as a company, have an evaluation system where we can diagnose the air at the client’s site and then based on that, we can provide our products and verify the effect of using our products or services. This assessment and evaluation system is there so we can combine all that and provide to the sector.

One product that you developed is the Siliglass, an ultra-high resistant silicate glass fiber material which could be continuously used for a long period of time under extremely high temperatures such as 1000 degrees centigrade, while offering thermal durability, chemical stability, and electrical insulation. What applications do these characteristics unlock, in Siliglass?

Due to its heat resistance, the biggest application would be for the nozzles of rockets. Actually, this would be the base material for the nozzle of the rocket, and we would have this phenol resin on the Siliglass　cloth and we would process that to make it round and that’s called ‘prepreg’.

Another product that caught our attention was Filatomictor, which is an ultra-fine glass fiber with a small diameter, going all the way down to 0.6 microns. It also has insulation and sound absorption properties. What are the final applications for this?

One of our applications for it would be to use it as a filter media for our filters. This would be for the heat resistant filters and also the medium performance filters.

You talked about that 500-degree heat resistant filter. The filter media would also be this material. Actually, this Filatomictor is also used for rockets. We use it on the tip of the rocket when there is an artificial satellite on the tip, because in order for that satellite to suppress impact waves, there is something called a ‘faring’ in the room where the satellite is, and we would have our product, the Filatomictor, in there as well.

Another interesting application for the filter will be using this product to eliminate oil mist. This is being well accepted by the market right now, and it is gradually expanding.

This Filatomictor is also used for MRI in hospitals.

The ULPA series is the first 0.1 micrometer high performance filter. Over time, the series has undergone multiple variations, and currently, it is represented by varieties such as the Atmos Ultra Compact filter, which can collect up to 99.99% of targeted particles. How is the ULPA series superior to more conventional filters?

ULPA filters are being created by other companies as well, so it is not something that only we can do. However, we were the first company in the world to develop this ULPA filter. The reason we were able to do that is because initially, we were a company that had created a fine fiberglass. We started off from there, and then we came up with filter paper, and then we went into the ULPA series. That was the timeline, and we were actually at that time, a group company of Hitachi. From the Hitachi side, there was a requirement that they wanted to use the ULPA series to enhance the concentration of semiconductors. That was their requirement. We wanted to meet that, and that is why we were able to develop it.

Compared to HEPA filters, the performance of ULPA filters is higher, and that means that the collection capability is higher, but at the same time, it means that the pressure loss and the resistance also becomes higher as well. That means more electricity, more power, is to be used and the cost will go up as well. When we think about that, it flies in the face of the carbon neutrality that we keep on talking about, so actually, we have a specific product that can tackle this. Instead of using glass as the filter media, we have a project that uses PTFE as a filter media, and actually this filter media is being produced at Daikin’s - our parent company – site.

Daikin produces fluorine, as you might know, so they can utilize that technology to create this PTFE filter media. By doing this, we have this specific product that can actually enhance the collection rate, but also suppress the loss of pressure and resistance, and therefore we can contribute to saving labor and energy, and also to carbon neutrality.

Nippon Muki became part of the Daikin group in 2009. What was the reason for being integrated into the group, and what are some of the other synergistic benefits that being part of the group presents to your firm?

In 2009, our former parent company, Nippon Sheet Glass Company, decided to transfer its filter business to Daikin.  Talking about synergy, I think that this was good because when we talk about our filter business, there are a lot of technologies that we can share between us and the Daikin group. That is a really good thing.

To talk about further synergistic effects, when we talk about the Japanese market, Daikin is famous for its air conditioners, of course. I do have to say that our filters, our products, are not being used so much in Daikin air conditioners at this stage because we are good at the HEPA filters and the ULPA filters, and actually the grade is a bit different from what is required by their air conditioners, so we do not have such a synergy right now.

There is a company called American Air Filter, that is a subsidiary of Daikin, and we have a collaboration with them. I think that can count as a synergistic effect, where we have these heat resistant filters and we are trying to sell to the European market. Of course, we can do direct sales, and we do that as well, but we are also utilizing American Air Filters’ network, and they are selling our products as well, so this is one effect that we have. Another one is a personnel exchange program with the Chinese factory of American Air Filter, who I also used to work before.

I just mentioned earlier that we do not have so much synergy with the domestic air conditioners of Daikin, but there is a possibility we are foreseeing where there might be good synergy with our food filters. The filters for food factories. Actually, in food factories, they would use powder, and it is said that this powder can get stuck in the heat exchange machine within the air conditioner. When that gets stuck, it is an issue because it is difficult to clean up and then maintenance is required and so on, so it is an issue. Now, we are developing this filter that can reduce that, and we are planning to install this in Daikin air conditioners from now on, for food plants. It is trial and error, and we are trying a lot of things together with Daikin, but this is just one example of where we foresee a synergy happening.

Are you looking to replicate this partnership that you have with American Air Filter in overseas markets with companies that may not necessarily be part of the Daikin group?

I am not saying that there is no possibility of doing that. We want to flexibly respond. I do not have any particular cases that I can introduce right now. I am not sure if you can call this a collaboration, but, for example, we talked with the pharmaceutical companies that are using sterilization furnaces, and they would be willing to use our heat resistant filters, and they would have specific needs and requirements and specifications, so we are collaborating with them and trying to meet their needs. Maybe you can just call it responding to a manufacturer, but maybe you can describe it as collaboration.

Right now, we are basically collaborating in the true sense with American Air Filter, but we are ready to respond to other markets, maybe in Italy or Germany – their needs - through listening to their needs and trying to reflect that in the products and services that we provide.

Moving forward, are there any other countries or regions that you have identified further expansion into?

I think our product with the most characteristics will be our heat resistant filters and our heat resistant HEPA filters are top in the world right now. These would be used for pharmaceutical sterilization furnaces, and I think with our capability, we can really meet the needs of various markets and clients. Right now, we are continuously developing so that we can meet such requirements. I mentioned countries like Italy and Germany, which are countries that are creating these sterilization furnaces, and then they will be delivering their products to places like China and India, where they would actually be making the medicine, so we want to sell our products to that type of market.

Of course, we are a domestic company, so it is going to be difficult for us just to do this by ourselves, so we would be relying on the Daikin group, and of course, American Air Filters to do this, and right now, the two people sitting beside me are in the Overseas Operation Division, so they are already going ahead with these tasks.

I am not going to talk about a specific market, but when we talk about filters, it is something that purifies air and there is always a pressure drop. There is a resistance, and there is always an energy loss. Right now, we will try to keep on developing products with low pressure drop. In order to achieve this, the main filter manufacturers reduce the pressure drop on the filter media and as a result, the pressure drop on the filter will reduce as well. That's what they do, but there are also other ways, for example, like when the filter is in a zigzag structure, that structure will produce a certain pressure drop, so what we are trying to do is suppress that as much as possible, and we are still not selling that, but in the near future, we are going to sell this product, which surpasses our conventional ones by 30% when it comes to suppressing pressure, and it will also decrease the weight by 30% as well.

We are going to launch this soon. Since the weight is also reduced, you would be able to simplify the structure as well, so this will lead to a reduction in the total resources that are put into it. I think this is a positive thing, and we want to expand this to the global sphere. We want to go ahead with this activity.

When do you expect to release the product?

We want to release it this spring, but let's hope that we can complete the product. We talked about these sterilization furnaces. They are being used in the equipment to create vaccines, so after the pandemic, there is huge demand, of course, and we are seeing this demand. Also, we think that this is a huge social contribution. Without these, we cannot create any vaccines, so that is why we want to focus on this field.

Imagine we come back to interview you again on the last day of your presidency. What would you like to have achieved by then?

That is a really difficult question, and honestly speaking, when I am going about my daily life, I am just so immersed in it that I do not really think about this often, but we are a company that has various technologies, and I would want to keep on expanding those, and increasing our sales turnover.

I think turnover is determined by how much we are able to contribute to society, and right now, our annual sales are at around 14 billion yen. Throughout my 10 years, I am not sure how much I can double or triple it. I am not sure, but I do want to keep on increasing it, and increasing our social contribution. They are connected, I think, and recently I am not sure if you talked about this with overseas companies, but in Japan we keep on talking about having a bottom-up company instead of a top-down company.

I would want to aim to really listen to the employees that are working in the field, who can say their opinions out loud and actually move the company themselves. I want my company to become a place where the employees have that capability, power and discretion to go ahead with what they think is correct. I think I would want to say that I have been able to accomplish that in the next interview with you.