Dedicated to creating a clean air environment for everyone in the future, Kanken Techno is a multi-award-winning innovator of techniques to process industrial exhaust gases that is also turning its attentions to more effective deodorizing devices. President Hiroshi Imamura discusses the development of the company, its highly regarded after-sales and maintenance services, and the rise of its business overseas.
In December 1978, Kanken Techno started business in Suita, Osaka, under the name of Kansai Kennetsu Kogyo Co Ltd to engage in the planning, manufacturing and installation of equipment in support of environmental preservation. You received the Osaka Environmental Prize Bounty Award in June 2003, Small and Medium-Sized Enterprises Director-General Awards in 2014, Minister of the Environment Awards in 2015, and last year you made more than 10 billion yen in sales. Could you elaborate on the history of Kanken Techno and why you specialized in these products? What have been the key factors that have driven this success?
In general terms, Osaka, where we started our business, has traditionally been a heavy industry area, and there are so many small and medium-sized enterprises and factories.
Back in the 1970s, Japan stormed into the era of high-speed economic growth. Factories were blooming, but on the other hand, they emitted gases and polluted the atmosphere, and created serious environmental problems. The executives of the Osaka government at that time took this issue seriously, and took very strict action against these small and medium-sized enterprises. At the end of the day, that is the reason why the environmental protection equipment became popular.
This legal environment was an opportunity to found our company and enabled our peers and clients to continue operating. Obviously, when we started we were a very small company. It was difficult to do sales with big national and international companies.
However, we were very fortunate to work with Panasonic, who became our main client. Konosuke Matsushita who was the CEO at the time, was very committed to ensuring that all the products made by Panasonic were environmentally friendly. He knew that sooner or later customers would not want to buy non-environmentally friendly products. He was some kind of visionary; however, at the time, in the 1970s, everything prioritized production efficiency. Panasonic was one of the companies that sustained this new environmentally friendly vision. With Panasonic as our main client, we were able to provide the equipment that no one else was buying, so we were very fortunate that we stumbled across his philosophy.
We are now in Kyoto, where in 1997 the famous Protocol was signed, establishing a new emissions quota system that made member countries reduce their CO2 emissions or buy emission bonds. Now, after the COP21 in Paris last year, the US and China have also joined in this fight against global warming. If we take a specific look at Japan, how are the policies of Abenomics encouraging the development of an environmental services industry?
The Kyoto Protocol had not been received by all the counties. But JEITA (The Electronic Manufacturers Association of Japan) led all the manufacturing companies to follow the guidelines of the Kyoto Protocol, as WSC (World Semiconductor Council) members.
As a result, in Japan, this effort of global warming prevention was enhanced and the technical development was encouraged, and our business market for our equipment was widened accordingly. This effort was expanded to China, Southeast Asia, etc., and led our business into the international scale.
At COP21, the participation of the United States and China, who are the two biggest exhaust gas emitting countries, will provide huge benefits and expansion of our business into the world market. And also, the biggest support from Abenomics increases our Japanese clients’ profits and pushes their capital investment due to the lower yen, which allowed us to sell more of our products to them, and the environmental service industry market has been growing.
You are constantly working on R&D for the manufacture and sales of products, not only to make them purify the air better, but also to make it in a more efficient way, meaning with the lowest possible use of materials and energy. In the near future, you expect to be able to contribute to exhaust-heat recovery in big-scale plants, saving energy and costs. Could you elaborate on that? What are you most excited about going forward?
In the future, we expect that at least 50% of our sales are going to be overseas. In order to achieve this, the performance of the abatement system that we offer now has to highly efficient, reliable, of excellent durability, automated and low energy use. We also have to reduce the prices. We think that what is important is to accelerate research and development so that our products and equipment can get the best evaluation from customers around the world.
Our goal right now is to hone the technology we have right now and to promote it, making it ready for sales overseas.
Kanken Techno is present in China, Taiwan, Singapore, Malaysia and Korea. What markets are you currently experiencing the most growth in?
The overseas market is an important market; we have 450 overseas staff of the total 750 employees in our company. Especially, Taiwan is the biggest market for us and we are working directly with one of the largest semiconductor manufacturers in the world, TSMC. We already have our own local factory there, as well as a sales office and maintenance service office that employs about 300 people. In addition, particularly in recent years, China’s growth has been remarkable and strengthened our Beijing and Shanghai offices’ sales, and that of the six maintenance service offices we have in China. We established a factory in the suburbs of Shanghai and began local production from this year.
The most important thing for us is to be dominating. Even if our costs are higher, we can provide a better after service. In our business, just selling our equipment is not important. The key is the maintenance and the upkeep of the equipment once we have sold it. I think that this is going to be the thing that differentiates us from companies in overseas markets. Our clients know that we are not just equipment sellers: our maintenance and after service make us the best partner. This is why we need to have so many local people in the local markets, and this is going to be the most important factor to differentiate our company, as a Japanese-style company delivering products in overseas markets.
How are you working to capitalize on the revitalization of hi-tech American manufacturing and on the new greenhouse gas reduction needs?
Presently, there are only a few Japanese companies, which include Toshiba and Sony, that are competing neck and neck on an international scale relating to semiconductor products. Their success can be very much expected. Moreover, our success in Taiwan is most likely going to be replicated in China, and we are also looking to expand our business into Korea and the US. The three biggest American manufacturing companies in which we are interested are Intel, Micron and Global Foundry: these are our major targets in the future. As you correctly mentioned, the hi-tech manufacturing sector is starting to expand into the US. Plus, the new waves of regulations are going to create demand for our products. We are working towards partnering with Intel, Micron or Global Foundry; in fact, we are in the process of approaching them.
Kanken Techno has sold over 10,000 units of electric heater and atmospheric plasma-type gas abatement systems. Your abatement system technology utilizes electric heaters, with a high efficiency heat exchanger, which contribute greatly in reducing CO2 emissions. How are you actively marketing your products?
We offer our atmospheric abatement system to the markets on a wide basis. The power is all an-electric heater and electric plasma system. In Japan, it is understood, and our product accounts for the majority of the market.
As for electric energy, development of the next-generation car is being carried out in the world now. It is powered entirely by electric energy instead of liquid fuel such as gasoline.
In Asia, about 50% of manufacturers are using a non-combustion electric heater or electric plasma system.
As President of Kanken Techno, what is your personal vision for the next five years?
I have always believed that if we produce machinery or equipment, it should be done to support the environment, especially our atmosphere. I was sure that at one point our technology would be welcomed and adapted. When we look at different markets or different countries, as a company involved in the environmental business, we encounter opportunities every day. There are a lot of elements in the atmosphere that can kill us. As a company, we are involved in helping the entire world to purify our atmosphere. Rather than consider different markets, at the end of the day, we think that every single person has the right to have access to clean air in order to survive.
As we look forward into the future, we are looking into the elimination of dozens of odors too. We are developing technologies on it right now. I believe this is something that will be of interest and we will work on in the next five to 10 years. More importantly, we are involved in making sure that the atmosphere remains clean for the next generation, not only our business, not just our company, but as an industry as a whole. We are working hard to ensure that humanity can exist in the future. This is something that I consider to be very valuable. I would like to continue doing this for next generation.
Could you offer our readers a final message?
When people think about the environment and energy, what I would like people to think is that everyone is a global citizen.
The environmental air cleanup work that Kanken Techno handles, by the air circulation through the earth, gives a significant effect to the health and lives of the people around the world.
And also, the air cannot be monopolized by making a big wall in a certain area. People all around the world have the right to use this clean air equally. I think this is the significance and mission that Kanken Techno has. Therefore, Kanken Techno aims to help people around the world to have hope and take action as a global citizen, and aims to be a company that creates a bright future for the environment in the world.