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Nippon Fusso: In prime position for the new epoch

Interview - December 14, 2021

Since its beginnings in 1964, Nippon Fusso has specialized in fluoropolymer coatings and contributed to the development of global industry through the continuous improvement of and dedication to technology, quality and service. As the world enters the fourth industrial revolution, the needs of the market are at the cusp of significant change. To meet them, CEO Satoru Toyooka explains that Nippon Fusso is perfectly placed; with a synergised R&D and Sales Department, over half a century of experience, as well as a talented and diverse workforce, it can be dependably called upon to create an incredibly strong platform to meet its customers’ ever shifting and increasingly exact needs.


In the last few decades, we have seen the rise of regional manufacturing competitors in places like China, South Korea, and Taiwan. Despite such competition, we still see Japanese firms maintaining a high global share especially in B2B markets and niche fields. In your opinion, what are the competitive advantages that allow Japanese manufacturers to maintain such a high global market share?

The reality that we are living in right now is that none of the Japanese companies can replace or take over the mass production volume and price competitiveness created by these Asian companies. But the Japanese are outstanding in listening to clients’ particular demands. In Nippon Fusso, we introduce ourselves as a solution for various problems. The company’s know-how and technologies that have been built from our long history allow us to provide tailored solutions to clients. This is what sets us apart from other countries. Globally, we have a limit to take high volume orders and compete with countries that have high production capabilities, but we can get an advantage to focus on niche fields.


But Japan's demographic decline seems to threaten this manufacturing culture since it will have big ramifications for Japan’s manufacturers, such as the labor crisis, and the shrinking of the domestic market. What impact has Japan's demographic shift had on your company and how are you planning on overcoming these challenges moving forward?

Japan's declining population means a decreasing market and human resources, and statistics show that this is true throughout Japan. However, our market/clients are not only in Japan. These are still developing. Also, we have been successful in recruiting people to work with us yearly. We recruit people with different academic backgrounds, such as doctorates, masters, and bachelor’s degrees from various majors, but we also recruit those who have just finished high school. By gathering people who have diverse values, we are creating new solutions and solving clients’ problems.


By working and collaborating with your end-users and customers, you ended up having a diverse product line. Some of your products are the NF-5340 ceramic coating, the Aμcoat® non-fluoropolymer, and the EC Series (Fluoropolymer coating for anti-static electricity). What is the main focus of your product line? Which of your products do you think has the most growth potential?

It's difficult to choose just one coating material to focus on because all of our products have good potential and are selling quite well. We do want to draw attention to our EC Series for its anti-static properties. At the time, many companies needed coatings with anti-static features as solutions to problems. There were no solutions available in the industries, so we conducted R&D and introduced the EC Series as an anti-static coating. As time passed, different customers followed with more diverse needs; they wanted coatings that are not just anti-static but also many features like anti-corrosion, and with a high level of purity. The EC Series is our best-seller, and our current demand is spreading to flat-panel display manufacturing companies like OLED (Organic Light Emitting Diodes) manufacturing companies and LCD manufacturing companies.


How are you able to supply such a diverse array of industries?

Carefully listening and understanding our clients' needs to meet their expectations is what defines our company. We also have our R&D Department cross-linked to our Sales Department. This transparency within the company and connection between the sales and idea personnel creates a good platform to meet any of our customers' needs.


Fluoropolymers have several limitations. Thus, you have developed the Aμcoat® or the next generation non-fluoropolymer coating. Could you tell us more about it?

Aμcoat® has many advantages, and one of them is its hardness. It also does not require a high processing temperature to manufacture and it has an excellent smooth surface. Aμcoat® was able to address the technical problems that existed with the fluoropolymer coating products. All these factors that Aμcoat® provide solutions that fluoropolymer cannot solve.


Fluoropolymer is heavily scrutinized as a type of PFAS (Per-and polyfluoroalkyl substances) or a chemical that accumulates in the environment indefinitely. With concerns about how these materials are adversely affecting the environment and harming people's health, what initiative have your company implemented to address these concerns?

Because we are a company dealing with chemical compounds, our priority is to comply with all legislative mandates. We are certified with the ISO 14000 which regulates our treatment and disposal of chemical compounds in our factory. We are very careful to abide by the restrictions and regulations given by the government, and as a member of JAPAN FLUOROPOLYMERS INDUSTRY ASSOCIATION, we are leading the industry by our effort in protecting the environment and people’s health.


Nippon Fusso's evolution over time was a result of collaborating with different clients and providing them solutions which have led you today to a diverse array of product lines. What are the key moments in your company's history?

Our successful development of our EC Series and introducing that to the market is one of our company’s historical achievements. In 1977, we created our big scale furnace for baking fluoropolymer lining and coating. Its dimensions were 4x4x10 meters, and it was known as one of the largest furnaces in the world at that time.  The significant increase in production capacity facilitated our business tie-ups with heavy industry companies. I joined the company in 1997, and the late 90s was the time of expansion in the semiconductor industry. We, therefore, focused on that industry by offering our coating solutions to semiconductor companies. In 1999, we established FUSSO KOREA CO., LTD because they also similarly experienced the semiconductor boom from which we received customers’ requests from local South Korean companies. Semiconductor and electronic materials related began to be highly in demand.


What mid to long-term changes has the COVID-19 pandemic accelerated here at Nippon Fusso?

Because of the pandemic, many changes had happened like supply chain, even in the thoughts of clients. As a result, on the contrary, we got more business opportunities. We can communicate online, so various things have accelerated. Although, by the regulations, we cannot utilize every opportunity. Like other companies, a challenge that the pandemic has brought to our business is not being able to deliver a face-to-face sales pitch to our customers. Also, we could not perform on-site inspections and assess on-site performance. And, the shortage in semiconductors has given rise to the necessity for our fluoropolymer to create better solutions for the semiconductor industry. To respond to increasing demands stably, we have begun to make long-term projections or forecasts to set up future purchasing activities.


Beyond the NFX-2700 heat exchanger you developed under co-creation, what role does co-creation play in your business model?

I believe it is very important to work in cooperation with some reliable partners. In our business, there is a limit or ceiling that sometimes makes it necessary to have various kinds of partners globally, in creating better products and solutions for our customers. So, we work with reliable partners. At this moment, we are working with Kyoto University in developing a fluoropolymer coating PCP/MOF compound.


In 1999 you went to South Korea, and more recently, in 2014, to Thailand. What markets do you consider key in terms of your future outlook?  

We have been thinking about which way to go, but first, we are considering the Southeast Asian region. Having our production in Thailand opens up our business to nearby countries like Singapore, Malaysia, Vietnam, and possibly India. Since we can expect a greater demand for our products and services, the major focus for our overseas expansion will be in those areas. At this point, we are still contemplating whether or not we should establish a new plant in another country. We are decisively looking to shift and strengthen our presence in the overseas markets. And of course, the huge market, China is also our key target.


Looking at the midterm- in the next three or four years, what are some key targets that you are looking to achieve?

We have set many targets for our midterm strategy, one of which is installing another unit of our massive furnace with the same dimensions to increase our capacity and production volume. We have reinforced our facilitations for these years to respond to increasing demands, and this is one of the activities. Due to the impressive characteristics of a fluoropolymer such as its chemical and corrosion resistance, low friction, purity, and non-stick, the demand is growing, and we are continuously getting more customers and clients. Furthermore, we live in an ever-changing society where we see Society 5.0, the fourth industrial revolution, IoT, AI, the change from combustion engines to electric cars, and new sources of renewable energy. In the face of all these changes, the 21st century is marked with several problems related to environmental preservation, energy supply, and the safety and stability of the food supply. Our customers come from different sectors.  I think that in the next three or four years, more customers will need our fluoropolymer lining and coating. We try our best to contribute to solving our customers' problems through our experience and excellent human resources.


Imagine we come back to interview you again on the last day of your presidency; what objectives, goals, or ambitions would you like to have achieved by then?

I have three philosophies. Firstly, the company’s credo does not emphasize becoming a BIG COMPANY but rather a GOOD COMPANY. Secondly, we want our products to provide tailor-made solutions for various problems of our customers. Lastly is fostering human capital, because collaborative efforts are vital; one person can do a good job, but two can do it better. Also, teamwork can assuredly render better results.