When Fuji Silysia Chemical (FSC) was founded in 1965 as a company specializing in synthetic amorphous silica, at that time the value of silica as a natural resource was yet to be fully recognized. Today, with its exceptional chemical stability, synthetic amorphous silica is used in a wide range of commercial applications and has become indispensable for today’s modern way of life.
The Japanese chemical sector has suffered when it comes to the production of base chemicals due to regional competitors lowering their costs. However, we still see many Japanese chemical manufacturers remain leaders when it comes to the production of highly functional and specialized chemicals. Furthermore, Japan can count on a variety of chusho kigyos, who can develop niche chemical and material technologies. As a firm specializing in synthetic silica, what are the strengths and weaknesses of Japan’s chemical industry today?
As you just mentioned, regardless of the size of the company, whether it is SMEs or large companies, Japanese firms are focusing on high value-added products and functional materials. They are trying to cultivate superb technology, and that is the same with us when it comes to the specialized field of chemical R&D. Regardless of the industrial sector, this situation applies to all Japanese companies, and the difference is how much effort and passion we can bring to our R&D initiatives. R&D is at the core of company life.
For us, monozukuri - making things - is important. Large global companies just provide infrastructure, but what moves along that infrastructure are the products, or mono, and products always evolve. Although they may be using the infrastructure, the real physical products themselves rely on monozukuri, and I am sure monozukuri will be here forever. That is why we need to make an effort.
Our philosophy is “ONE CUSTOMER ONE GRADE”. This is not only for customers, but for us too, to achieve. We always want to achieve this as a goal in whatever situation we are in. The “ONE CUSTOMER ONE GRADE” philosophy is where our strength lies. This means we are able to have close communication through this initiative, and by nurturing this strength, we would like to develop even closer communication, and I believe that only SMEs can do this.
The Japanese population has the oldest average life expectancy in the world and more than one third of the population is over 65, which means a reduced labor force and less demand for products in general. What are some of the challenges and opportunities this demographic shift is presenting for your company?
Everyone is impacted by the population reduction and the aging society. There is no room for Japan to wiggle its feet anymore, especially in gemba, on the factory floor . This is the truth. As for Fuji Silysia, we separated from a joint venture with a US company about 20 years ago and entered the overseas market. We started to enter the overseas market 20 years ago, and we did that in order to continue growing, and for our employees to continue to work. Therefore, we have been making efforts to improve skills and make good products overseas too. This is an initiative that we took as we understood the Japanese population reduction and unavoidable market shrinkage.
We started to address the situation 20 years ago and gradually expanded our options. As you know, of course, as the Japanese market is shrinking, we believe there is still room to grow in overseas markets. As for the sites of our plants, we are established of course in Japan, the USA and Italy, and we have a complete supply-chain worldwide. Therefore, I think we still have room to grow in this current situation where everything is based on Japanese technology.
In the area of human resources, we have many highly skilled workers - what we call experts – at our plants. However, although they are getting older, they still have much to contribute. We need them for their skill and wisdom, especially since our amorphous silica is a unique product. To produce it, you need to be highly skilled and trained. It is not something that can be made easily. We want to make it easier for our mature and skilled employees to work, and at the same time, we believe that they will be good role models for the younger generations. They are the ones who were with us from scratch when the factory opened. They studied on their own and we thought together about how to build a good plan and make good products.
However, when it comes to younger people, they only know automated factories now, so they do not know what is involved in creating something manually from scratch. We really need our skilled workers, the experts, to hand over their skills to the younger generation. Our unique products cannot be made with machines alone.
Some of the products you make are used in a variety of industries such as pharmaceuticals, foods, cosmetics and chemistry. Is there a specific industry that you are currently focusing on right now, and are there any new ones that you are looking to expand into?
We always make the effort to be in close contact with customers, trying to look for new opportunities and applications. We do this even with existing customers. Our products are always evolving as we try to catch up with customer requirements. For example, with paints and plastics, they are making new technological innovations and our products are always needed for them, especially with paint, which is used everywhere. With plastic, for example, think about plastic films. Many kinds of plastic film are needed for solar panels and smartphones, and our silica is always needed, so we need to catch up with their innovations through partnerships.
Even in these existing fields, we still have a lot of potential. We avoid talking with just purchasers, but we prefer to speak with R&D directly, and we collaborate in creating products. As I mentioned, even in existing fields, we think that our potential is still expanding and at the same time, we want to explore niche fields too.
In the field of pharmaceuticals, as the Japanese population is getting older, we need more and more drugs and the products related to their production. We see huge potential there.
We have just talked about our micronized silica. On the other hand, there is also huge potential for using chromatography as a separation media, which is where our silica gel is used, and we truly emphasize and focus on this area too.
In regard to the use of silica gel as a catalyst support, there is also an important mission to respond to eco-friendly needs for CO2 capture through our CARiACT. One example is called FT catalyst. There are lots of big companies now studying e-fuel and others and we collaborate with them.
You have developed CHROMATOREX, a chromatographic silica gel, which is essential for the separation and purification of bio-specialty chemicals in pharmaceuticals, for example. However, when it comes to more traditional chromatography, it can be time consuming to achieve a good separation while also consuming a lot of solvent. How does CHROMATOREX overcome some of these challenges seen in chromatography?
It is difficult to explain. Ordinary silica gel is a non-coating, reverse phase type. What we do is we sometimes change the separation application. As you mentioned, in the case of normal silica, you need to use lots of solvent, like in the production of pharmaceutical products. Of course, it is under strict control, so no negative effect on the environment is posed.
However, we basically need to reduce emissions anyway, so maybe we can initially coat the product with silica gel and use water for solvent. In this way, the ‘reverse phase silica application’ is a feature of our silica gel. There is normal silica gel and surface-treated silica gel. There are thousands of them. The reason why there are so many is that we try to meet our philosophy of “ONE CUSTOMER ONE GRADE”. That is where our philosophy is being realized in this field too.
Another one of your other well-known products is the SYLYSIA, a micro-sized silica which can be used in a variety of different applications - matting paint, preventing blocking of plastic films as well as thickening of adhesives. Can you tell us how SYLYSIA is superior to more conventional silicas on the market?
Whether it is practical paint, we need to strictly control our silica so that it will be smoothly blended into the components, which means we need to improve our affinity through the surface treatment so that it will be combined well with other components. To do so, what we need to do is control the physical characteristics and properties of the silica so that it will match each grade of paint and plastic. There is still much to do, as a matter of fact.
We first entered the plastic film market when polyethylene became commercially available. We then followed into PP and PET, so for each type of new chemical product, we needed to come up with new types of silica to provide more efficiencies through coating or surface treatment. There is still a lot of room for re-formation to give unique properties that match each one of the products.
Are you looking for any co-creation or collaborative partners in overseas markets?
Of course, collaboration is important, but we cannot just collaborate with anyone who uses ordinary silica. That means we are willing to collaborate with the customers, or our silica fans, to create new products. That is why we cultivate niche markets where there is a need from the customers and where there are unique requirements for our products. Where they meet is where new products will be born. Unless this chemical reaction happens, there will not be any innovation. What I want to emphasize here is that we look for the needs of customers and create a niche market.
We do not look for existing niche markets and try to enter them. Rather, we create niche markets for our new products. For example, SYLOPAGE and SYLOPUTE. These are products we created ourselves in the Japanese market. We applied for approval from the government, and successfully registered our products. The latest example is silica gel fertilizer. Nobody thought about using silica gel for fertilizer, but there are national regulations for fertilizers, so we filed our own products for approval, got proper certification, and created a new market for this product.
What we do is create new niche markets. That is what we intended to achieve. Our Silica is not something you can see in a normal market. It is a support for highly functional products, so what we want to do is to collaborate with manufacturers who are passionate about inventing new, highly functional products, and we want to support them so that their products can come to market.
Moving forward, what other countries or regions have you identified for further expansion into, and what strategies would you employ to do so?
I cannot tell you any specific country we have in mind for the next step of our overseas expansion. We have finally reached this stage of having bases in Japan, the USA and Europe. Within Europe, there are many countries that are harder than others to manage. In these cases, we look for qualified partners. As for the technology itself, we cultivate its development in Japan. This is our solid base. When it comes to overseas countries, we need to have capable partners. The reason why is that when we think about management, it is truly difficult without having good partners.
Therefore, rather than considering countries, if any good partner appears, I will think about that. Thinking about the global situation, this is a critical time. Usage of our product is not proportional to the size of the population, but having said that, there is a large and growing market within Asia. Of course, China is one of the larger markets with a population of 1.4 billion. India also has the same large population, and the other Asian countries have about 1 billion.
We still have that potential near to us, therefore our next step is to capitalize on it. However, in order to expand the business in these areas, I believe that we still need to work on making products more environmentally friendly in terms of emissions and energy savings. Not only energy, but material and resources too, so we need to make more improvement in that area. What we are doing now is improving our processes so that our product will be more useful to the world.
Imagine that we come back three years from now and have this interview all over again. What goals would be accomplished by then?
That is an excellent question. We were thrilled to celebrate our 60th anniversary. 60 years is considered one cycle in Asian culture. It used to be considered a person’s length of life, so I believe after 60 years, we need to prepare for the next 60 years as if it is a new life.
However, our core businesses and policies stay the same. Regardless of who is the president, it stays the same. Our way of life is making niche markets on our own. In my personal opinion, we can do this because we have our silica. We trust our silica alone can do this. We strongly believe there are no similar products to ours. We are using our amorphous silica gel to cover all these fields. I cannot see any other silica products doing this. We believe the physical properties of our product have such profound characteristics and this is really the defining feature of our products. Therefore, we feel that we still have lots of things to study, especially the idea of transferring old knowledge, knowhow and technology to the new.
In that sense, we need to keep on emphasizing the research aspect. When we find something new, it will cover wider and newer fields. When it comes to our silica, I think you know that it is being used as a matting agent. That application started about 50 to 60 years ago. It’s really had such a long life. You cannot find many products with such a long life-span. In a sense, when we revisit even after 60 years, we may still be talking about the same thing.