Japack’s is a leading supplier of polyethylene-based garbage bags, films and shopping bags to businesses, organizations and household across Japan. In this interview, president, Toshio Oki, explains how the company is committed to developing sustainable plastics and its strategy to expand sales beyond Japan.
In the recent years, the Japanese monozukuri concept has evolved from a perspective of “Made in Japan” to “Made by Japan”. Now your company has partnered with more than 40 factories in Asia. How can you ensure the unique Japanese quality is kept when producing overseas?
It is important to build a relationship with partners who would be confidently saying that they can guarantee Japanese quality rather than they are just doing it only by necessity.
Our company was established in 1998 and has a turnover of 15.2 billion Yen. We have around 100 employees in five different offices in Japan: Tokyo, Osaka, Nagoya, Fukuoka and Kagoshima. Our overseas office is in Singapore and it is managed by two directors, one being Japanese and the other one being local. We have partnerships in East and South East Asia in countries such as China, Taiwan, Hong Kong, Thailand, The Philippines, Vietnam, Indonesia, Malaysia and Myanmar. We directly visit the factories to meet people including the machine makers and the raw material manufacturers on a regular basis to create strong connections. We grow together by exchanging opinions and improving one another. We also provide technical training for partners to meet clients’ demands and specifications. Over the past 21 years, thanks to the knowledge sharing that we have been practicing, they all have been able to improve the level of their manufacturing standards and compete on a global scale in meeting ISO requirements. This has been a mutual beneficial situation on which our success has been based.
Driven by an increasing demand for food services, the global packaging market is expected to grow at a rapid 4% annual rate over the next 6 years. However, with trending topics such as environment protection, the market is changing. Could you give us a general overview of the sector and its perspectives for the future?
We are very conscious about this topic. As a company which holds top shares in the plastic bags market, we need to respond to environmental concerns such as global warming by providing environment-friendly solutions.
To reduce greenhouse gases such as CO2, we have been using recycled materials ever since the start of our company. With regards to our garbage bags, we use biomass polyethylene derived from sugarcane which does not affect world food shortages. We are partnering with overseas companies to produce more sustainable polyethylene by creating a better supply structure. We take a lot of pride by helping our partners improve their level to the standard of the Japanese market, in regards to the respect for environment.
Once the garbage is thrown away, it loses its value. However, if it is properly separated, you can find the value inside the garbage bag. When waste is separately collected, the garbage bag can make a big contribution to the environment. In Japan, waste collection is performed by the prefectures and municipalities which have different procedures.
To promote garbage separation that is important for encouraging 3R approach (reduce, reuse and recycle), we have created bags specifically designed for waste separation that has now been adopted by around 200 municipalities in Japan.
We are also very conscious about marine plastic. There are many plastic bags and straws that have been dumped illegally in marine, and we all need to work on this problem.
We joined Japan Clean Ocean Material Alliance (CLOMA), an organization aiming to reduce marine plastic waste. We have a responsibility as a producer of plastic related goods, and we actively pursue solving the problem through this activity.
Over the last 6 years, your company’s turnover has been constantly growing: from 9.5 billion to 15.2 billion Yen between 2013 and 2019. Despite the rise of the price of polyethylene and intense competition, what is the secret behind this success?
The secret of our success is, building the relationship with stakeholders who have the same goals and are willing to grow together with us, and provide the service; Cheap, Fast, Always.
Today, 70% of our business is in the non-retail market and 30% is in the retail market. The retail market is indeed highly competitive whereas the non-retail market is mostly focused on food services, restaurants, schools, hotels, factories, building maintenances and hospitals. The distribution channel is done through specialized wholesalers; of which we work with approximately one thousand. These wholesalers are constantly looking for new opportunities to distribute our products. This is quite unique to the Japanese model and a big reason for our success. Today, more than 200,000 sites finally use our products. However, they have different requirements in terms of sizes, thickness, colors, brandings and so on. This is the reason why we offer today about 3000 different items to the customers, because we think customization is a critical part in our business. Flexibility of our logistic system and the next-day delivery option is another key to our success.
Your company slogan is “Only one Japack’s brand”. What do you want the Japack’s brand to stand for?
Japack’s brand was formed not only by us, but it was built with the contribution and support of our partners. We are team mates, and we create efficient supply mechanism, ability to meet customers’ desired delivery time, connection with domestic and international, and strategic logistic system.
Since your establishment in 1998, your company has partnered with 40 different companies in Asia, mostly in China. You are now planning to expand your partnerships to further countries, focusing on South-East Asia. Could you tell us more about your international strategy?
It is possible that we are expanding sales network to countries we have strong partnership with. Currently, we only sell our products in domestic where we have strong connection with stakeholders. However, with the problem of the shrinking population in Japan, it is a fact that we need to find ways to grow internationally, and we aim to do that by reinforcing our supply chains with partners in different countries through mergers and acquisitions for example. Especially, we are starting to build a relationship in the market in Singapore.
In terms of M&A, we are looking to focus on the companies that work in the same industry such as traders, manufacturers or suppliers. The objectives are to help our overseas partners make capital investments into the factories for establishing a better machinery system in order to build more product categories and a more efficient logistic system. Amongst the countries we would like to expand to are Myanmar, Cambodia, Laos and especially India.
Are there any innovations or key facts you would like to share with our readers?
We would also like to highlight our effort into reducing CO2-emissionsin our industry. We mentioned earlier our effort to make garbage bags from biomass polyethylene but we also looking to reduce the global volume of polyethylene that is used in the process of manufacturing the bag by making them thinner, lighter and smaller. We aim to utilize more recycled materials and reuse waste products through the production processes in our plant by 3R approaches. For example, we produce what we call a stretch film that is produced out of waste products so it can be reutilized again. In Japan, there is a method called thermal recycle, but we promote garbage separation to encourage reaching 100% material recycle.