With over 50,000 reagents, Kanto Chemical is developing unique and innovative technologies to support research and manufacturing of the ever-growing semiconductor and life science sectors.
The Japanese chemical industry has suffered when it comes to the production of base chemicals due to regional competitors lowering their costs. However, Japanese chemical manufacturers remain leaders in highly specialized chemicals. Furthermore, Japan can count on a variety of chusho kigyos who can develop niche chemical and material technologies. What are the strengths and weaknesses of the Japanese chemical industry today?
The strength of the Japanese chemical industry, which we take part in as a reagent manufacturer, is that Japanese companies have the technological capability as well as the ability to do high-standard quality assurance. As you mentioned, Japanese comprehensive chemical manufacturers have a wide range of product lineups from the base up to high-performance chemicals, especially through business restructuring, they are expanding the field of high-performance chemicals and improving their profitability.
In order to produce high-performance chemicals, we have to have a base of chemical knowledge and technology. It would be difficult for other countries that do not have this standard to model and produce high-performance chemicals, as a substantial foundation is required.
We are based in the reagents business, and there are many applications and usages of these. We can acquire the latest cutting-edge information since we have a network of various industries and customers. In our business, most of our customers are researchers, so it is our mission to be able to readily provide this reagent whenever it is needed. Therefore, we produce a wide variety of products and keep them in stock.
We have over 55,000 products in our lineup and they are mainly products of many models in small quantities, meaning that sometimes reagents are manually manufactured. Although it may be time-consuming, as a result, we can strengthen our portfolio. One of our mainstream business models is to have a wide range of products in our lineup from a basic reagent grade up to a high-performance grade through adding value with additional augmentation.
This is not confined to the chemical industry, but generically speaking, the majority of Japanese SMEs are family-run businesses, and the advantage of that is that knowledge has been passed down from generation to generation. For example, IT companies are actively recruiting new talented people, on the other hand, family-run companies retain their knowledge and keep improving it through time and generations, and that has actually strengthened the Japanese industry in improving and retaining high technology. It is both a strength and a weakness. Of course, we have to keep introducing new personnel and technology from outside, but mainstream technology is something particular we have cultivated over the many years.
The semiconductor field is at a time of expansion, especially here in Japan, where there is a new fab in Kumamoto between TSMC and Sony. You have been involved for almost 60 years now in this field, and as you mentioned, you are always catering to the evolving needs of your clients. Of course, we see that these components are getting smaller and smaller in size, and new materials like gallium nitride and silicon carbide are being adopted. How do you adapt and provide solutions to clients for the next generation of semiconductor wafers?
As you mentioned, the industry is growing rapidly and we have been in the industry for quite some time, but some of our chemical products are no longer compatible in some fields of semiconductors. For example, for the cleaning agent for silicon wafers and also for gallium nitride, what we do is conduct trials and test if it is compatible and applicable or not. With the advancement of the semiconductor, there is a strict requirement for the chemical agent to reduce the number of microparticles (nanometer scale) and the metallic impurities in the agent, so we have been manufacturing and selling the world's best PPT order products.
Working together with material suppliers, equipment manufacturers, and our customers is important. It allows us to understand the changing needs and cater to them effectively. For instance, wafer cleaning agents require some chemicals, but we are striving to reduce the current two or three-step cleaning process to just a single step. This optimization would minimize the use of various chemicals, reduce costs, and save energy. By transitioning our customers' cleaning process to a single-step approach, it would also benefit our production by simplifying it and enabling us to focus more on a singular product. This focus on a specific product can serve multiple purposes, eliminating the need for separate steps and resulting in energy and cost savings.
The sensitivity and accuracy of analytical instruments used to improve the analysis of ultra-trace elements in semiconductor manufacturing have become an ever-growing need for this industry. As such, strict specifications are now necessary for the reagents used in the process. Your company has developed the Ultrapur™ series, which consists of ultra-grade, high-purity reagents specifically designed for ultra-trace analysis. Could you please provide more details on how the Ultrapur™ series meets these stringent specifications and ensures accuracy in ultra-trace analysis?
This Ultrapur™ series is specifically designed for the analysis of ultra-trace elements, making it the highest-quality reagent available in our acid product lineup. We offer two variations within this series: Ultrapur™ and Ultrapur™ 100. Ultrapur™ represents the highest grade and consists of an 11-product lineup, while Ultrapur™ 100 is a slightly lower grade with four different products. The Ultrapur™ reagents ensure the traceability of 41 elements, ranging from one part per trillion (PPT) to 10 PPT, whereas Ultrapur™ 100 offers reduced cost while maintaining satisfactory quality. Based on our customers' specific needs, we recommend the most suitable reagent type.
To achieve such high purity, we employ an ultra-precision purification process for these reagents. Due to their exceptional quality, some products can only be manufactured in limited quantities, as they require stringent purification procedures. Our accumulated technological knowledge is embedded within this product line. Ensuring the safety and purity of the reagents goes beyond issues of quality alone. We also pay careful attention to the containers used, to avoid any contamination, as thorough cleaning processes are implemented. And we exercise meticulous care in every aspect of providing these reagents.
Our primary customers are laboratories and researchers engaged in ultra-fine trace analysis, with its ultra-high purity reagents used for semiconductor, pharmaceutical industry and environmental analysis. To ensure accurate analysis, with contamination eliminated to the maximum extent possible with chemicals and storage containers, ultra-high purity reagents and chemicals play a crucial role.
Your products are utilized in a variety of fields: medicine, food, chemistry, semiconductor manufacturing processes, and more. Which application is your current focus, and are there any new applications or industries to which you would like to introduce your products?
Currently, we put emphasis on the semiconductor manufacturing process-chemicals, high purity, and high-performance chemicals. As I explained, we are now researching various high-performance cleaning solutions and etchants, and we call that performance-chemical research. We are putting our focus there, and another, bioscience field.
We understand that you recently participated in Chemspec Europe and have also announced your participation in the upcoming 31st Environmental Chemistry Symposium, scheduled to start on May 29th. What do you intend to showcase at this upcoming symposium?
At the Environmental Chemistry Symposium, we promoted our product called Vitrigel™, which is cell culture equipment. Vitrigel™-EIT method is the official test that is listed under OECD’s test guidelines. In Europe, animal testing is prohibited for assessing the impact of compounds on humans. Therefore, it is crucial to nurture and culture cells and conduct experiments in vitro. Our product is primarily used to assess the potential for eye damage from chemical substances. Formerly, rabbit eyes were used for such testing, but with the ban on animal testing, in vitro test methods using human cells are now necessary. We provide equipment that enables the culture of corneal cells and estimates the irritancy of chemical substances based on electrical resistance. Currently, we are focusing on the European and U.S. markets, where there is a growing demand for our product.
Are you also interested in collaborating with overseas academic institutions or companies to develop new products? Are you actively seeking such opportunities?
We have limited experience in collaborating with overseas academia, but we are highly interested in partnering with universities abroad, particularly in the US, where advanced technological expertise and R&D initiatives are prevalent. Currently, our main focus is on collaborating with academia and conducting research and development within Japan. We actively participate in public-private-academia networks and leverage governmental subsidies to support our R&D projects. We have successfully undertaken numerous projects within this framework, aiming to apply research and development outcomes to various fields, including semiconductors, pharmaceuticals, and biosciences. Our goal is to continue expanding the scope of our R&D applications. If there are any opportunities, we would be delighted to collaborate with overseas entities.
As part of your unique technology, you have recently developed the Ir-PSA, an asymmetric, reductive amination catalyst that can efficiently synthesize optically amine active compounds. Can you tell us what was the motivation behind the development of the Ir-PSA?
We engaged in joint research and development with Dr. Noyori, a Nobel laureate in chemistry, 20 years ago. Through this collaboration, we were able to develop the technology to create Enantiomer. Utilizing this technology, we produced Ir-PSA, which is an iridium-based catalyst. The Ir-PSA catalyst enables the efficient and rapid production of optically active primary amine. This catalyst has garnered significant attention from pharmaceutical companies, and what sets our catalyst apart is its simplifying the process of synthesizing the optically active amine, which is an important structure of API (Active Pharmaceutical Ingredient). Our current focus is on promoting this catalyst to overseas pharmaceutical companies that have shown a keen interest in our product. We recently showcased it in Chemspec Europe.
Which other regions have you identified as key to the growth of Kanto Chemical? Could you elaborate on the strategies you plan to adopt to achieve growth in these areas?
Our main product for export is high-purity chemicals for semiconductors, specifically the EL chemical. In addition to the United States, we have been exporting to countries such as Taiwan, Singapore, Malaysia, and China since the 1990s. We are dedicated to strengthening our presence in these countries and regions by enhancing our factories and providing comprehensive support to our local customers in the semiconductor industry. Currently, our priority market is the United States, which is experiencing a resurgence in the semiconductor sector. Given the discussions on economic security, we are actively pursuing opportunities to penetrate the US market. Our efforts are centered in Japan, and we are collaborating with Kanto-PPC in Taiwan and Kanto Corporation in the US, along with our partner companies, to launch a robust sales promotion campaign within the US market.
Some people believe the China-US decoupling presents a significant opportunity for Japan. Currently, it is said that Japan can benefit from its position between the two countries. When we look at Japan, we see many years of deflation, a weak yen compared to the dollar, and thus manufacturing costs being significantly lower in Japan than in previous times. This makes Japan somewhat cost-effective in the international market. Do you agree with this viewpoint? What is your perspective on the macroeconomic landscape?
I am not sure if I am addressing your question directly, but in the chemical industry, there has been a general increase in the price of raw materials, containers, and transportation costs. When it comes to exporting from Japan, we need to carefully evaluate the future economic feasibility. The situation in the US market is similar, with rising raw material, energy, and labor costs. Initially, our analysis indicated that conducting business in the US would require two to four times higher costs compared to our current operations. Therefore, it is crucial for us to understand our customers' advantages and needs to supply products efficiently from the most appropriate location.
Fortunately, we have a subsidiary in Taiwan and the US, which allows us to export to China and collaborate with Taiwanese customers who have a presence in the US market. This collaboration has been instrumental in expanding our business in the US. We are optimistic about our prospects in the United States, but we still need to closely monitor how the situation develops.
If we were to visit you again and have this interview on the last day of your tenure, is there a specific goal that you would like to have accomplished by then?
It is a difficult question. As a reagent and chemical company, our main objective is to provide products that are needed, useful, and contribute to society. With the changing dynamics of society, new industries will emerge, and there will be a growing demand for different products. Our goal is to meet these evolving needs by leveraging our expertise in monozukuri and contributing to society. We aim to support the growth of our company and countries worldwide, while also nurturing the well-being and happiness of people around the globe.
Having served as the president for 12 years, I am uncertain how much longer I will continue in this role. However, one strength of Japanese companies lies in passing down knowledge and expertise to future generations. I aspire to strengthen our company by effectively transmitting our accumulated knowledge and spirit to the next generation. Adapting to the ever-changing society is challenging, particularly considering environmental factors and sustainability. In light of these complexities, our priority is to maintain the trust we have earned and ensure a stable supply of products that meet society's needs and contribute to its well-being.
Interview conducted by Karune Walker & Paul Mannion