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‘Future Creation’ inspired by unrivaled packaging technologies

Interview - June 12, 2023

From the food, beverage and cosmetics industries, to regenerative medicine and semiconductor manufacturing, applications for Shibuya Corporation’s technology continue to expand.

HIDETOSHI SHIBUYA, PRESIDENT & CEO OF SHIBUYA CORPORATION
HIDETOSHI SHIBUYA | PRESIDENT & CEO OF SHIBUYA CORPORATION

What do you believe to be your strengths or core competencies that set you apart from your regional manufacturing rivals?

The strength of SHIBUYA CORPORATION is (1) its serious craftsmanship and manufacturing that always prays for our customers prosperity in business, (2) its after-sales service which supports the stable operation of equipment and systems delivered to our customers for long period of time, and (3) its technological strength to create “best-in-class” products based on customer needs supported by its profound and cultivated technologies served in a wide range of industries. Selling a machine to a customer should not be considered the end of a relationship, but rather the commencement of one that we would cherish for many years to come.

SHIBUYA was founded in 1931, making it 92 years old this year. We have about 3,600 employees, and we have a variety of products that span four segments: life science, beverages, food & dairy products, mechatronics and agricultural packaging & cleaning. We achieved USD 1 billion in sales four years ago. Our overseas sales make up about 30% of our sales, while the remaining 70% is generated domestically. More than 1,200 units of SHIBUYA aseptic technology related systems have been delivered to pharmaceutical, beverage and regenerative medicine industries. We deliver our systems worldwide, but we are looking for a new market where we have not reached yet. All of our innovative products come from our core technology, which is the bottling system. Ninety years ago, we began our bottling system for wholesale brewing parts for a Japanese sake brewing company, and developed the world’s first system that can handle a wide variety of containers, from small to large (180mL to 1800mL), on a single machine. From there we expanded our business to the beverage, food, cosmetic, personal care and pharmaceutical industries through our core technology - filling. Moreover, we have recently entered the regenerative medicine industry as well.

I believe that the people are the foundation of monozukuri, and they are the most fundamental aspect of keeping the production of high-precision and high-quality products. All team members have to be pressing forward in the same direction, and they must believe and seriously consider what they have to do is our goal and visions. Applying the principle of shinken which refers to a Japanese sword (if you don’t consider things seriously you'll be cut down and killed).

Our company’s motto is ‘Work with Joy’, highlighting the importance of motivation. We always pray for our customers' prosperity. The person who makes the products imagines the customers using our products, then employs “shinken ni monozukuri”. That is our monozukuri. The person who develops the products purposefully thinks about how our products can make our customers happy regardless of whether they are men, women, foreigners, young or old. During every Monday morning meeting at each office, all our employees say our company's motto in union to make sure of our corporate philosophy. We have a small Shinto shrine in all our offices, manufacturing, assembling and quality divisions, which allows everybody to pray for our customers' health and prosperity.

 

You have a wide base and range of customers that you have developed over the years with your key technology - bottling and packaging technology. However, critically, sterilization and cleanliness technology has allowed you to enter into many sensitive manufacturing areas such as those for semiconductors, pharmaceuticals, regenerative medicine and food & beverage. Is there a particular application that you are putting a greater emphasis on moving forward? What do you see as the next big application or market to which you could apply your core technology in the future?

Sterilization and cleanliness technology is one of our outstanding core technologies. My vision to expand this core technology to new markets worldwide. We are now making new developments with several business partners in our core technology such as aseptic processing, which is for our bottling and pharmaceutical systems. The fields of regenerative medicine, semiconductor, food processing and pharmaceuticals all have the potential to expand our business by synergy created by the collaboration of the SHIBUYA Group companies.

 

Could you tell us more about the motivation for establishing your new Nomi High Tech plant? Why did you pick Ishikawa as the site?

Our new factory just began manufacturing in January. The plant is 39,000 square meters, making it the largest plant in the SHIBUYA Group. I believe that the business volume will grow more than 20% because in the beverage business, especially the bottling industry, they always require highly efficient total line solutions, typically starting from bottle infeed and sterilization, aseptic filling and capping, labeling, case packing for gas and non-gas beverages and low-acid dairy and tea and coffee drinks that contribute to maintaining human health and a more abundant lifestyle. Thus, SHIBUYA chose this large facility as we need the production capacity to respond to the increasing total line ‘turn-key’ business for high-quality, highly-efficient manufacturing with low energy consumption. SHIBUYA started our business in Kanazawa city in Ishikawa Prefecture.  We believe that Ishikawa is a good place to hire a very talented and engaged labor force. As we can recruit many great students from Universities in Kanazawa or other technical and technological institutions.  We also have a lot of cooperative and reliable companies around this area who know what to do based on the drawings we provide. They know how to finish the surface or identify what is necessary to meet the needs of the customers. Needless to say, we have excellent teamwork with those local companies in Ishikawa. Since Komatsu Airport is only about 10 minutes, it is very accessible for our foreign customers. Ishikawa Prefecture does not experience many natural disasters like earthquakes or tsunamis.

Maintaining a sustainable supply is very important for our clients, many of whom are essential businesses. We learned a lot during COVID19 over the past three years. Our plant has to be in a safe area. Besides our management class, our development, design, manufacturing and sales divisions are headquartered at this plant. We have plans for new developments for new markets at the Nomi High Tech plant, which means we can easily discuss and develop products for our customers.

 

How has Japan's aging population been affecting your business, and what has been your response to this challenge?

The population will shrink, but the GDP and the markets are still growing because Japan is always trying to make something new. The Japanese market is a treasure box of new innovation, ideas and kaizen. Therefore, I believe that this market will continue to be attractive in the future. The need for labor-saving and unmanned operations is expected to increase in the future due to the aging of the workforce and personnel shortages, and demand will increase for AI-based production management systems and preventive maintenance, as well as next-generation automated lines that eliminate manual labor through AMR (Autonomous Mobile Robot). Instead of only following the volume, I also look at the ideas which will lead to our expansion to other countries.  G7 nations including the US and Europe will have older populations in near future. Japan is the forerunner in G7 in terms of an aging society; hence, the forward-thinking thoughts from Japan would become a great reference to be used in other countries in future.

SHIBUYA's build-to-order manufacturing products are high mix and low volume, which means that it is very hard to maintain the craftsmanship and manufacturing know-how. Therefore we promote both human resource development for technology transfer that is hard to keep, and business reforms that incorporate DX (digital transformation) technology. We also send young people to the US market, Asian countries and other markets to help them learn new things from other cultures, ideas or people. The growth engines of SHIBUYA are new product development, new overseas markets, and new business creations. SHIBUYA has increased its sales 1.7 times over the last 10 years, where overseas sales increased 2.2 times (the overseas revenue ratio increased from 20% to 30%). We will expand our business by our growth engines.

 

Your packaging and sterilization technologies are well-suited to the field of regenerative medicine. The critical issue in this kind of regenerative medicine manufacturing or research is the risk of contamination. Just the presence of a technician to be able to interact in that environment poses a fundamental risk to the stability of the culture or cell growth. How can your isolator and robotic cell culturing system help overcome this obstacle of contamination and help commercialize regenerative medicine treatments?

We have several global partners in the Regulatory and Science Field. In the US, we have Dr. James Akers who used to be the president of the Parenteral Drug Association (PDA) and the former chairman of the microbiology and sterility assurance committee of experts for USP (United States Pharmacopeia). He also consults for US Food and Drug Administration (FDA)'s new guidelines draft and auditors, and he knows about the Regulatory Science of the US and European market. In designing our new products, we take into consideration safety and a reasonable price. More than a decade ago, I visited and had a discussion with the FDA. They say that if they need to make a new guideline, they may set it at a very high quality to lead the pharmaceutical industry to using new technology. In such cases, production costs tend to be higher with new equipment, but the FDA created an opportunity to discuss this with SHIBUYA with the goal of balancing quality and cost in order to develop the pharmaceutical industry. We have a responsibility to cut manufacturing costs while keeping our equipment and systems to a high standard of safety. Those two difficult important parameters have to match and contribute to the customers’ ease of use of our technology. Furthermore, SHIBUYA works with Dr. Tsuguo Sasaki in Japan, who knows about current GMP and has been a sterile operation expert for more than 30 years. We work with the Ministry of Health and Welfare as well as the Ministry of Economy, Trade & Industry while supporting the Japanese government. In general, government regulations are often interpreted in an expansive manner, resulting in over-specification of equipment, but we believe that understanding the correct regulatory details and future trends will enable us to share such information necessary for appropriate specifications to manufacture  regenerative medicine safely. This will reassure our customers and lead to the industrialization and growth of the industry.

We, SHIBUYA, developed the Bio 3D Printer for regenerative medicine, because Dr. Nakayama of Saga University could not sleep. The first time we met, he had bloodshot eyes,  because he was manually observing and designing mini-organs made of cells by magnifying each tiny sphere of cells and looking through a microscope. He wanted this very sensitive process to be automated. We sent our skilled engineers over there and co-developed new products. Dr. Nakayama's research in the field of orthopedics previously involved the creation of artificial cartilage from cell aggregates (spheroids) to treat defects in knee joints. The precision of positioning cell aggregates on the Bio 3D printer developed with SHIBUYA was higher than expected, and he thought that the new technology would enable us to create more precise products and fabricate other mini-organs, which would accelerate various types of research. That was when he tried to make this kind of blood vessel. He switched to accomplishing more difficult work to cater to the needs of patients and hospitals. Human clinical tests are being conducted at Saga University and Kyoto University. Automation is very important in saving costs, lessening human intervention and constantly delivering precise and high-quality products. We make those automation systems with a sterilization and isolation process, which is our strength.

We are now developing a new type of liver regeneration therapy with Yamaguchi University, which was already published by Dr. Sakaida and Dr. Takami. Liver cirrhosis is fibrosis caused by alcohol or obesity. In one experiment conducted at Yamaguchi University, the doctor extracted mesenchymal stem cells from the patient's bone marrow that are cultured and injected back into the patient. This has proven effective in reducing the fibrosis of the liver by making it softer and allowing it to regenerate. Before, it was necessary to extract a significant amount of bone marrow, which requires general anesthesia for the whole body. However, the most critically ill patients are not strong enough to withstand general anesthesia. Therefore, Yamaguchi University is aiming for a minimally invasive treatment, and is currently conducting a clinical trial using a new method in which bone marrow is extracted using only local anesthesia to reduce the amount of bone marrow required, and expanded and cultured in vitro using SHIBUYA's aseptically automated system. Dr. Takami reports that a clinical trial has been conducted on three patients, with very positive results in treatment and follow-up. We have high hopes that we would receive approval from the government as early as next year as an accelerated approval for regenerative medicine products.

 

Could you give us a brief overview of what you believe to be Shibuya Corporation's key products or technologies that support the semiconductor sector?

Our main products for the semiconductor sector are for the downstream of the process, the back end. Mounting, bonding and wire bonding are the types of downstream processes covered by our main products. However, the industry is dramatically changing right now. New needs are emerging, such as large-scale data centers with AI (Artificial Intelligence) and new mobility including EV (Electric Vehicles). We are developing nano-level mounting technologies that are required especially for large-scale chips used for AI and large-scale data centers that use huge amounts of electricity. SHIBUYA's high-precision bonders use ultra-precise handling solder pasteless bonding, which is required now. For 50 years, semiconductors have been nano-size, so the pitch is very narrow. Pasteless bonding is required to avoid short-circuiting, which occurs when using paste adhesives in the bonding process.

 

What role do collaborations play in your development process? Are you actively seeking new opportunities to collaborate with foreign companies?

One thing I learned from a professor in regenerative medicine is that innovation occurs when two or more fields of expertise meet and when chemistry interacts. In order to develop new technology and enter new markets, I believe that it is extremely important to collaborate with partners who have different perspectives. Collaboration with overseas companies and other industries that have difficult values and thought processes may pose a challenge in terms of communication, but there are always new discoveries and findings. We would like to proactively find promising projects from the myriad of information that is made available to us to move forward to new markets and businesses. I always try to seek new partners.

 

What would the ideal balance between domestic and overseas sales look like to you? Are you trying to grow your sales in the overseas market? If so, in which areas are you putting the most emphasis?

SHIBUYA's existing main markets are Japan, the US, China and Asia. Having said that, we also develop and deliver medical devices all over the world. We know that we have more potential, such as expanding to a new market with a greater population and more need for complex technologies. Japan is an important market to make something new. I still do not know the ideal percentage, but I hope there will be more and more sales revenue volume coming from overseas in the future, instead of it being a specific target. We work in partnership with trading companies and others who make new markets, so we are always expanding the scope of our business. I strongly believe that we can transfer the ideas from Japan to another market we have never been to in the near future.

 

Imagine we come back eight years from now for your 100th anniversary as a company and have this interview all over again. What would you like to tell us? What are your dreams for this company, and what goals would you like to have accomplished by then?

We will achieve the new medium-term business plan that we set up last year to achieve USD 2 billion in sales by 2030. A goal of adding 10% to the current situation may be more realistic, but only realistic results can be obtained from realistic goals. If the target of 30% or 50% would be set, then everybody would doubt the common sense and consider focusing their wisdom to change something. Once you start setting a goal with your dream, the possibility of achieving it begins. It is like joining the Olympic Games, where you will have to set higher targets and train more. Similarly, we must set a target, go in the same direction, mix in a new exercise, do what we have to do, think about the needs of our customers and pray for their prosperity. My dream is  to make our customers and employees happy. Our equipment supports new products, and contributes to the happiness of society. Nowadays, PET bottles are made from plastic made of oil. However, maybe it can become plant-based in the future. Suntory and Coca-Cola have already started with plant-based PET bottles. Even if it will be challenging, we want to support that kind of innovation. When it comes to our valued clients, their dream is my dream too, and I feel a strong responsibility to realize their dream. The beverage, regenerative, pharmaceutical, agriculture, and semiconductor industries have new ideas as humankind grows and desires a better quality of life. Through our technologies, we want to support working toward achieving a longer and healthier quality of life.

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