As a company grounded in monozukuri excellence, Toyo Paper responds to a wide range of paper needs, having achieved excellence in the major paper functions of “Wipe”, “Record” and “Wrap”. Since its founding in 1949, Toyo has been one of the pioneers in the paper industry, becoming the first company to invent a mechanized technique to manufacture Japan’s traditional washi paper. Not content with this innovation alone, the company switched its attention to paper towels, coffee filters and non-woven papers, spearheading their production in Japan starting from 1957. Its line of paper towels remains a cornerstone of its sales to this day.
As a paper manufacturer in Japan, could you give us your take on your ‘monozukuri’ principles, and how you're making the best use of paper in your production processes?
We developed paper towels in 1957 as one of the pioneers in this field. In the 1970s, bowling was very popular in Japan and people used paper towels at bowling centers. Our monozukuri strategy is not only to provide the paper itself, but also bring comprehensive solutions to minimize clients’ overall running costs by a case, package, or a dispenser.
What's special about our dispensers is when you think, for example, of toilet paper, there's the user and the provider, who wants to keep the costs low. In order to do that, we have made a dispenser so not as much paper is used. There's a vertical type and a horizontal type, according to the requirements. What we are good at is using our paper monozukuri to provide ways to reduce the cost of the installer or the provider.
Could you tell us what has been the impact of COVID-19 on your business, and what changes have you had to make to react to it?
There have been both good and bad effects on our products. In terms of paper towels, our market has expanded. Conventionally, it was a B2B (business to business) business, and the towels were used in offices, as well as commercial facilities, hospitals and also for industrial use. However, it has also become B2C (business to consumer) as people are becoming more aware of hygiene and are starting to use paper towels at home.
What is more, since people tend to spend more time at home, sales of our paper coffee filter have expanded too.
However, in terms of toilet paper, we mainly do B2B business, and since offices have closed down to allow for remote working and people don't gather in offices, the amount of toilet paper used has significantly declined.
In the post-COVID-19 world, there is growing concern about microbes and bacteria in our daily lives. Can you tell us how you notice a change in the consumer perception of the necessity for anti-microbial wipes in comparison to traditional ones?
Regarding antibacterial wipes, our target was hospitals and in 1992, we developed the Neotex, which added value to our products in terms of antibacterial effects and that has been well received in business and hospital environments.
However, retail-wise, this product is not widely purchased yet, but we feel that with COVID, there has been a shift in people’s mindset towards hygiene and being sanitary, so people wear masks and use paper towels more often. Because of this, we have had a boost in our product sales. Some customers ask us to add anti-micro bacterial effects to their paper towels too, and they sell very well.
What are the best selling products in each of the main product categories you deal in – cleaning, wrapping and recording?
Percentagewise, most of our products are sold in the category of wipes like the paper towel, wet towels and nonwoven material towels. For wrapping, we have products using ‘washi’ paper. In Japan, there's a tradition of giving money in an envelope, and in fact, we were the very first company to invent a mechanized washi-making technique. The market was good but it has been declining, so currently, the majority of sales comes from the wiping category.
The Japanese government announced in April that the Japanese industry must be carbon-neutral by 2050, and the target for 2030 is a 47% reduction in emissions. Could you tell us in your production and in your raw material procurement how you are going carbon neutral? What methods or strategies are you using to achieve this?
In terms of our approach to SDGs, we are shifting our source of energy to solar. We have installed solar panels in our factory, as well as our group companies’ factories. Of course we cannot procure 100% of our energy from renewable energy sources, but we are also trying to shift away from fossil fuel to LNG gas in the near future.
We develop pour products with the environment in mind since we developed the paper towel 65 years ago. The size suits Japanese hand sizes: it’s much smaller than the ones from the US and therefore uses less paper. Furthermore, our material uses recycled paper, so we have been working towards environmentally friendly production for some time now.
General photo of products
What differentiates you from your competitors? What are your unique strengths in exploiting potential paper markets?
We have many salespeople who go directly to end users and gather information from them, listen to their requirements and propose new ideas that are tailored specifically for them. That is a core strength of our company.
First and foremost, it is very important to maintain the high quality that we are currently providing and have a stable procurement process. We've listened to our customers and identified the needs of the market in order to develop new specialized paper for which there is demand.
Last year you launched a wet jumbo towel, which is ideal for disaster situations and can be stored for five years. Could you tell us about some of these new products and are there any that have potential in the international market?
We are currently focused on enlarging our sales channels in the Japanese domestic market. Once we’ve achieved a significant foothold, we would then consider going overseas, but we still need to research where the demand for our products lies internationally.
There's a need for Japanese companies to collaborate with foreign partners to make sure that their products are suitable for international markets. Are you looking for such partners in order to create those kinds of products, and if so, in what countries or regions would you be looking?
We’re now investigating overseas markets and finding new distribution partners in overseas. So we have had many meetings with foreign companies these days. We are trying to create new business in foreign countries, especially Southeast Asia – Thailand, Singapore, Taiwan, South Korea or China.
Since we focused on the domestic market in the past, we’ve only just started looking overseas and don't have experience in global business. We have some people who can do research and some sales, and we’ve already started to sell some products to foreign countries like the USA, Thailand, Korea and Taiwan, but this business only makes up a tiny percentage of our overall profit.
You will celebrate the company’s 75th anniversary in just a little over three years. Is there anything that you would like to have achieved by then?
We are always focused on increasing our sales turnover, so e-commerce and overseas sales are options for us. We are currently in the research phase however, so we won't have an outcome in the near future, but we do want to develop a good product that is suitable for overseas markets and grow our sales channels domestically and overseas.
Due to Japan’s aging population, companies are looking overseas in order to hire talented graduates. What are you doing to ensure your company’s longevity in terms of recruitment and getting the best employees?
Toyo does not have any foreign workers. We are hiring only Japanese people at this moment and in future, we would like to continue hiring Japanese workers to secure employment for Japanese people. It may be an adversarial move compared to other companies and we may not be global, but at the same time, it's very important to look at the Japanese market and secure employment for Japanese people.
Could you please talk to us about the role of the American marketplace within your company and what vision do you have for this market?
Toyo USA is a subsidiary of Toyo Japan. Most of our business in the US was to export the raw materials - regular waste paper - to Toyo Japan. Raw materials are procured in the US and Toyo Japan imports them to use in our products.
We researched market trends in the US because new product ideas and technologies would regularly come from there. We tried to understand the US culture and we shared that information with Toyo Japan. Although we have mainly focused on our own domestic market, our company also knows the importance of foreign markets.
We set up the US office in 2008 and for over ten years we've been trying to make a business there, but it's really tough because we don't have many people and only a small budget, but we have nevertheless survived. Now we want to integrate the knowledge and experience gained in the US with our Japanese operations, especially in our Tokyo branch, and we want to share that information to expand the business.
Imagine we come back to interview you again in a few years' time. What would you like to tell us about your goals and dreams for the company? What would you like to have achieved by then?
I’d like to introduce new machinery at our factory. Our existing machinery is getting somewhat old and it would be nice to introduce new nonwoven machinery. By having a new facility, we’ll be able to strengthen and expand our current product line up and enlarge the variety within the categories. For example, as well as towels and toilet paper, we want to expand our range of coffee filters and wipers. We still need to find the right market and application for some products and we’d like to enlarge our product lineup, as well as expand our sales channels. Those are my goals