A company whose devotion to monozukuri is aligned with a commitment to caring for the environment, Okitsumo has been developing world-class coating technologies for nearly 80 years, with the company specializing in heat-resistant, heat-insulating and lubricant coatings, as well as non-stick and anti-corrosion agents. In this interview, president Shigeharu Yamanaka divulges more details about Okistumo’s unique technologies and how the company is contributing to reducing carbon emissions thanks to its innovative coating solutions.
Okitsumo was founded in 1934 before the war, but its development coincides with Japan's post-WWII industrial boom. As a functional coating maker with 7,000 different coatings, what for you is the advantage of Japanese monozukuri? What distinguishes Japanese manufacturing from regional competitors?
Monozukuri is our philosophy and the basic foundation of our business. We have incorporated monozukuri in every aspect of our business throughout our history. Okitsumo is a family-run company established by my grandfather, and I am the third-generation president. Although the first two generations had their opinions and unique approaches about the market and incentives that distinguishes us from the competitors. We prefer to directly communicate with our customers for better product development. The foremost initiative of our founder and even today is to keep on challenging ourselves to stand out as different, having our uniqueness as our strongest point. Though this could be said and applied the same to any and all materials business companies, our own independent business assumptions would not make our business successful but there must be concrete customers’, or the market needs which in another term is described as a criteria that need to be met.
Our company has kept developing a multitude of products by challenging the customers’ ideas of their wants and wishes all the time. This attitude of positively working on development to see if there is a way to work it out without any prejudice from the beginning supports our monozukuri and differentiates us from our competitors.
Japan has a declining population. There is expected to be less than 100 million by 2050, and a third of that will be over 65, creating two major concerns. There will be less customers to sell products to and recruiting talented engineers will become more difficult. How has Japan's population change affected your business? What steps are you taking to overcome it?
As any other Japanese company, we are also faced with this social problem. It is becoming more and more difficult to recruit young, new graduates. It varies each year, but we try to foresee the situation in order to avoid the lack of human capital. Like others, we extend the employment of our workers who have already reached the official retirement age of 65 but are still physically healthy enough to continue. There are some merits to hiring the senior laborers because of their quality and the vast amount of experiences they may have which could reduce the time and the resources to train them. However, considering their physical limitations, we assign simpler tasks that are less taxing like office duties. As a local company recognized in this area, we are still blessed because we can easily employ locals. Even so, it is still important for us to implement even further automation technology.
Okitsumo’s Heat Insulation Paint (HIP) AERO helps furnace makers retain heat; how does this allow them to operate more sustainably? How also are you reducing harmful substances such as lead and mercury in coatings?
HIP AERO uses aerogel, which is said to have the lowest thermal conductivity of all solids, as a material, so it has excellent heat insulation performance, contributes to the reduction of carbon emissions, and supports the SDGs. They conserve energy and extend the life cycle of products. Since it is a liquid coating, it is possible to apply and insulate even complicated pipes and narrow gaps that the conventional heat insulating materials could not wrap. In some cases, industrial furnaces in the steel and non-ferrous manufacturing industries, which use a large amount of heat energy, have succeeded in reducing CO2 by about 20%. As our definition of "manufacturing" implies, we will work with our customers together to put forth our best efforts for better environmentally friendly solutions that could reduce carbon emissions.
The containment of harmful substances is always a sensitive issue for a company like us that produces paints and coatings. Surprisingly, Japan is more lenient in this matter than European countries and America. China is also becoming stricter with regard to harmful substances by implementing legislative policies for manufacturers. Raw materials are critical in our manufacturing chain. We procure most of our raw materials overseas, particularly in China. Since they have higher level legislative standards, their raw materials are safe to use and are considered to adhere to the standards here and we have more options to choose from. As part of our strategic expansion overseas, we opened an R&D center in China, where we increased the number of Japanese personnel. We chose China because they are a step ahead in this field, and raw materials are within reach.
Your company expanded from the heat resistant coatings for stoves and furnaces to the functional coatings for automobile, industrial, kitchenware and rockets. Okitsumo's three types of coatings are heat-resistant coating, fluorine resin coating and functional coating. Which coatings are your best-selling, and who are your main customers?
We have a wide range of products and customers in our portfolio that cater to various industries. As a group, we have an annual turnover of JYP 8 billion, and half of that is from the automobile industry, including motorcycles. The other half of the sales are divided into electronics, kitchenware and others. Recently, we have increased the supply of our fluorine resin coatings for the cookware in China where most of the frying pans for Europe and the United States are often produced.
What opportunities does the undergoing transition of the automotive industry to EV provide to your firm? What new coatings are you adopting for the next generation of vehicles?
The electrification of cars is still underway and not yet finalized, at least in Japan. As there is a way to grow in this industry, we are taking steps to keep abreast with the shift from combustion engines to EVs. The objectives of the heat resistant coatings for the automobile were to protect the parts from the heat. But going forward the heat would be generated from the electronic components. Though it is not as high as the combustion engines, still it would affect the sensitive electronic component. And we can prevent it with our technologies such as heat resistance, heat dissipation and heat insulation coatings.
Also, if you could reduce the frictions by a dry film lubricant, you can get more exercise with less energy. The dry film lubricant coatings that are not affected by the environment temperatures and do not require maintenance would contribute to the development of EVs.
There are more and more electrical parts being used for the car structure, so we are looking forward to working with more parts manufacturing companies. The exhaust system, engine and radiator that are subject to heat are some aspects that we are currently involved in, but we are anticipating more electrical components like displays, LED lightings and multi layered PCBs. As of now, we have several solutions for these market needs.
Can you tell us about your service to create customized and specialized coatings for your clients? How are you reducing the lead time for your customers?
Seventy percent of our products are customized based on the requests of our customers. Of course, we desire for these products to reach a wider audience. But in most cases, they are custom made and our customers enjoy their own unique products. It is our normal procedure to communicate directly with our customers to develop better products. By doing so, understanding the customer's issues well and aiming to solve the issues together with the customer will be our driving force of product development and the secret to shortening the development lead time with the customer.
A photocatalyst coating is one of our best-selling products in Japan. Using titanium dioxide, it converts light into energy to clean the environment. What technology have you integrated that allows you to do that?
In the beginning, we started the development of this product as a government project from which we were recognized as the best researchers out of the several companies that participated. A photo-catalytic coating is a catalytic formulated coating that is to get activated by the ultraviolet energy in sunlight or fluorescent light and decomposes organic substances through its oxidation. Our photo-catalytic coating is a functional coating that combines two technologies, the organic compounds decomposition technology with the titanium oxide, which is one of the photocatalyst agents, and the inorganic coating formulation techniques. Generally, when organic resins are used in photocatalyst film binders such as acrylic, epoxy, or urethane for the outdoor constructions, the coating failure such as choking phenomenon occurs due to the decomposition of the resin. Even when an inorganic binder is used, the resin covers up the photocatalyst particles, which reduces the activity of the catalyst surface. As a solution to these problems, we developed the coating that combines an inorganic porous binder and a photocatalyst feature. In order to promote such excellent photocatalytic coating, a joint venture was established, and they are in business now.
Are you looking for more partners, especially in overseas markets? If so, what type of partners are you seeking?
Our success with our past partnerships has resulted in new businesses. Since the growth of existing products is expected to grow overseas for several more years to come, we are thinking of increasing the business channels for existing products. In Japan, conversely we believe that we will take on the challenge of developing new products with new themes. Joint development is indispensable for us to provide products with shortened lead times. In addition to Japanese companies, I would like to expand and look to work hand in hand with overseas companies, too.
You have been in the US since 1994, and you expanded to Spain in 2015. Moving forward, what new locations or new regions do you foresee the company expanding to? How will that help your business grow internationally?
Before the pandemic by COVID19 hit us, we had been actively expanding our business overseas. We believe that the coatings technologies we have built up over the 77 years of our corporate history, such as the heat resistance technology, fluorine technology, and lubrication technology will be useful for monozukuri worldwide. Currently, we have our own production facilities in China and Thailand, and we would like to expand to Latin America, West Asia, Europe and Africa in the future. We would like to return our monozukuri technology cultivated to many other countries where economic development is on the way.
Imagine we come back three years from now to have this interview all over again. What would you like to tell us? What are your dreams for this company, and what goals would you like to have accomplished by then?
We were before the Lehman shock at the point of an annual turnover of JYP 8 billion. Everything dropped after that, but at this point, our company has been able to climb back up to the same level of performance we had then. For the next five to ten years, we are aiming to reach an estimated overall sales turnover of JYP 10 billion.
We see there are many customers’, and the market needs to be solved including CO2 reduction. We are determined to explore new opportunities and solve these challenges with our coating technologies. It is my mission to improve society with the power of the coatings.
We intend to explore new opportunities through existing technologies and new solutions in domestic and overseas markets. The pandemic has caused us to rethink and restart, but once it is over, we believe that we are on our way to achieving our goals.