Despite the challenges from regional competitors, Japanese chemical manufacturer Kansai Catalyst is thriving, focusing on highly functional and specialized chemicals.
When it comes to Japanese manufacturing and specifically the chemical industry, it has suffered when it comes to the production of base chemicals. This is due to regional competitors lowering their costs. However, Japanese chemical manufacturers remain leaders in highly functional and specialized chemicals. Furthermore, Japan can count on a variety of chusho kigyos who are able to develop niche chemical and material technologies. In your opinion, what are the strengths and weaknesses of the Japanese chemical industry today?
One of the hallmark traits of the Japanese chemical industry is the enduring longevity of its companies, with many having been in operation for over half a century, and some for even over a century. The strength of this industry resides in the extensive core technologies amassed over this extended span. These core technologies have enabled the Japanese chemical industry to develop key products and innovative technologies. This strategy has ensured a harmonized and sustainable business approach. In our case, our base technology revolves around batteries, and this has steered our operations for more than 50 years. Nevertheless, our reliance does not solely hinge on battery technology, and we have strategically applied our technology and expertise to other areas such as electronic components, catalysts, and surface treatments. Our capacity to cater to the requirements of these distinct sectors has been instrumental in maintaining the stability of our business.
Another strength of the Japanese chemical industry is its unwavering commitment to quality, a trait that is synonymous with Japanese products and services. Japanese chemical companies have a high level of experience in quality control and process control that has been honed by responding to the strict quality requirements of Japan, and we continue to achieve high quality while making improvements based on this.
You spoke about how customer demand drives this business and how that has been a strength of the Japanese chemical industry over many years. We know that the Japanese chemical industry walked step by step together with the rise of its monozukuri in the post-war era. However, what we have been seeing in the past 10 years is a sharp decline in Japan’s population. There are expected to be less than 100 million people in Japan by 2050. With this population decline, we are also going to see a diminished demand. To what extent must companies like yours look overseas for new client bases when it comes to the chemical industry?
Our company’s focus extends beyond the domestic market. We have a wider scope and we are constantly endeavouring to cultivate our clientele base across Asia, the United States, and Europe.
Are there any particular applications or types of products that are in high demand in these overseas locations?
A significant proportion of our business negotiations in the international markets focus on materials for batteries, with our composite nickel hydroxide being a key product sought after by our foreign clientele.
We know that right now there is an insufficient supply of critical lithium-ion battery materials and this is persisting as a core bottleneck for the mainstream rollout of EVs. As such, major players such as Tesla are scrambling to get as many units as possible. How do you believe the lithium-ion battery supply chain can be best adapted to this shortage of supply, and how do you envision its evolution over the next 12 months? What opportunities do you see for your firm as a result of that?
As the EV market grows, I believe that resources such as lithium, nickel, and cobalt will be exhaustion. Therefore, we need to have a good circulation system in place for these materials. Complete reversion to pure metals is not obligatory. Intermediate agents obtained through purification will suffice. By incorporating this approach, materials can be recycled back into batteries. Nonetheless, these recycled materials inherently harbor more impurities compared to their pure counterparts. Therefore, it seems impossible to make batteries only from recycled materials at the moment.
The ideal scenario entails a 100% utilization of recycled materials. Realistically, however, we must establish the optimal ratio of recycled materials within the batteries earmarked for recycling. In doing so we must consider the properties of the batteries and the costs associated with recycling. By striking a balance between them, battery design will be advanced.
Approximately three years ago, we unveiled our mission to augment recycled material utilization, and our concerted efforts have centered on broadening the spectrum of recycled material sources. As for the opportunities that this will present for us, I anticipate substantial advancements in battery recycling within the next year.
Given the significant control China holds over rare-earth metals, concerns over battery manufacturing material supply exist in nations such as Japan. Alternatives, as you mentioned are new recycling technologies that are currently being developed. Is the geopolitical tension between Beijing and Tokyo a contributing factor to the development of these battery recycling technologies here in Japan?
The challenge that we currently face in this market in Japan is the absence of an established recycling system. The government has acknowledged this and the Ministry of Economy, Trade and Industry (METI) is orchestrating deliberations among diverse companies to devise a recycling framework. Once the system is established, I believe that we will be able to solve a lot of the problems.
We know that nickel hydroxide produced by conventional methods generates countless crystal nuclei and this can become porous particles without a growth process of the crystal. In addition, the shape of the particles can become amorphous resulting in very low volume energy density when it comes to the manufacturing of batteries. Using your spheroidizing technology, however, you are able to produce nearly spherical high-density nickel hydroxide. Can you go into more detail about how your technology overcomes the challenges of producing nickel hydroxide?
The diverse requirements of battery design among our clientele underscore the significance of customization. Attempting a uniform approach would undermine the realization of client-specific desires. Our spheroidizing technology is inherently tied to scientific conditions such as temperature. For achieving both a spherical shape and high density, physical conditions such as fluid dynamics come into play. Our repertoire encompasses technological accumulations across these elemental factors, as well as scaling up these elements. By using these two distinct technologies we can aptly create the optimal nickel hydroxide formulation tailored to the specific demands of our clients.
Can you go into more detail about your R&D strategy as a whole, and are there any new technologies or products that you are currently working on that you would like to showcase to our international readers?
Our R&D is mainly focused on materials for batteries. We are currently working on many different developments as well as promptly addressing the demands of our customers. The other focus is new functional materials. Currently, we are working on the development of new fields such as luminescent materials, magnetic materials, and environmental catalysts, as well as focusing on intellectual property strategies such as obtaining patents in new fields. Specifically, we are concentrating on luminescent materials that store light in the daytime and self-illuminate during nighttime. They can be used during power outages and for safety tools in areas where the light is not strong. They can also be used for nighttime leisure activities and security purposes. I believe that these materials have huge potential.
When it comes to the next generation of batteries, which are solid-state batteries, are there any new technologies that you will need to develop to cater to the latest market demands?
In line with our material developments for nickel-hydrogen batteries and lithium-ion batteries, we have realized the development of materials for all-solid-state batteries by utilizing our elemental technologies, and we are also working on the development of new types of battery materials that include them.
You mentioned earlier that you have been able to expand your applications from batteries to electronic components, catalysts, and much more. Are there any other new applications or industries to which you would like to introduce your products and technologies?
We have been a leading manufacturer of nitrates since our founding. Nitrates continue to be used in a wide range of applications as basic chemical raw materials. It is a long-term product and can be said to be the origin of our manufacturing. In recent years, inquiries for new applications have been increasing, and we are focusing on further expanding our market share and strengthening our management base by refining our starting point.
Could you go into more detail about the role that partnerships play in your business model, and are you currently looking for partnerships when it comes to developing new products?
Collaboration with customers is the cornerstone of our material development process, especially when it comes to improving battery materials. Throughout the exchange of ideas and specialized knowledge, we have generated numerous cutting-edge technologies. Additionally, we are embarking on joint projects with universities and research facilities to explore new applications for our technologies.
While we have not tried to directly approach overseas potential partners, we have been fortunate to attract interest from numerous entities in Asia, the US, and Europe. Given the diverse pool of potential partners, we select collaborations based on thematic alignments and shared goals.
It is an exciting time when it comes to semiconductors here in Japan. TSMC has opened a factory with Sony in Kumamoto, and in Hokkaido, there is a new project called Rapidus that will focus on 2nm wafers. In terms of the semiconductor industry, there are always new materials being developed. Gallium nitrate and silicon carbide are the next generation of materials. Could you talk to us about your role in the semiconductor industry? Do you see opportunities with these new materials and with these new investments and focus on Japan in this industry?
The electronic device industry including semiconductors presents an intriguing market for us, and we are actively involved in key aspects to ensure our participation. Specifically, we are concentrating on the magnetic materials that I mentioned earlier.
The domestic market here in Japan is shrinking due to Japan’s population decline as we alluded to earlier. As a way to combat this, many firms are starting to look overseas as a way to mitigate the effects. Is going overseas and setting up offices, for example, an area of interest for your firm, and if so, which countries or regions do you believe have the most potential?
While we have not yet reached a decision regarding overseas expansion, The United States stands as an interesting target, especially when we think about it in the field of battery technology.
Imagine that we were to return on the last day of your presidency: Is there a certain goal that you would like to have achieved for the company by then?
During my tenure as president, our entry into the lithium-ion battery industry has become a cornerstone of our business. The market for battery materials will continue to grow, but being too biased towards this market is risky for our company size. When it is time for me to pass the baton to the next generation, my aspiration is for my successor as president to chart a new core trajectory different from batteries. I envision a transformative shift within the company. Before passing the baton, my goal is to establish another pivotal axis for our business, diversifying our strategic landscape. This is my goal for the future.
Interview conducted by Karune Walker & Paul Mannion
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