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Renewable Raw Materials for Container Manufacturing Excellence

Interview - November 9, 2021

With over 75 years as a manufacturer and specialized trading company, Maruei adds their unique know-how to provide packaging and container products that will satisfy any customer. From square one they engage in planning and proposing from the standpoint of their end users while putting an emphasis on environmental sustainability. We sit down with President Naoki Agata to discuss all things Maruei.

NAOKI AGATA, PRESIDENT OF MARUEI CO., LTD
NAOKI AGATA | PRESIDENT OF MARUEI CO., LTD

In recent decades, Japan has seen the rise of regional competitors in places like China, South Korea and Taiwan. They have replicated the Japanese monozukuri manufacturing process but at a cheaper cost. Yet, we still see many Japanese firms maintaining a global leadership status. What are the competitive advantages of Japanese firms and how are they able to maintain their competitiveness despite the regional competition?

Japanese companies can remain competitive because of their mindset. They readily accept challenges. When we create something, we discuss the requirements with the customers and then, we go through a trial-and-error process to bring to reality our product solutions. Japanese companies have the strength to actualize and create prototypes of their ideas, while also seeking to constantly improve. This mindset sets us apart from other regional competitors. Others replicating Japanese products imply that our competitors lack the innovative mind that the Japanese people have.

 

In the next 15 years, one out of three Japanese is expected to be over the age of 65. This creates two main challenges: first is the labor crisis. There are fewer young, talented graduates to replace seasoned workers. The second is the shrinking of the domestic market. Fewer consumers, companies and clients. What impact has Japan's demographic shift had on your company and how are you planning on overcoming these challenges moving forward?

The ageing population has become a huge issue in our company as well. We have to attract more workers, so we are creating a work environment that is also comfortable for women to work in. The packaging industry is traditionally a male dominated world; however, our company has employed more female workers and they are also working in the management department. We will continue to create an environment to attract more workers and create a good team for the company.

 

The common response to the demographic change in Japan has been DX (Digital Transformation) or automation robotics. How have you implemented digital technology in Maruei?

Maruei only does the management, and we commission the production or manufacturing to other cooperating companies. These companies use automation to cater to the loss of labor. For our company, we are incorporating IoT and IT to make our process more efficient.

 

We are now in a world where we are seeing the rise and mainstream education of new technologies like the AI manufacturing processes. What is your opinion on these new technologies? What is your opinion on robotics and automation in the factory?

It is important to incorporate AI and IoT automation to increase production efficiency, but at the same time, there is a limit to what machinery can do. I believe that even in the future, there would still be a need for craftsmen and their skills. It is important to strike the balance between craftsmanship and automation.

 

As a company that contracts other companies to manufacture plastic, one unavoidable topic is the environmental issue. Last year, Prime Minister Suga made this carbon-neutral mandate whereby by the year 2050, Japan will become a carbon-neutral society. What initiatives are you developing for a carbon-neutral society and what opportunity does new renewable materials open for your company?

Our company started as a glass container producer in 1944. When I was a child, we used bottles for drinking water and also condiments like soy sauce. If you took the bottle back to the store, you would get your deposit back. The glass bottles, once collected, can be reused and if they're broken, they can be processed again. It is 100% recyclable and made of natural material, which is why I believe that this what we should go back to. With the rise of plastic, this culture has been lost. There may still be a need for plastic in some areas, but we are now recommending glass to our customers now to attain a more environmentally friendly society.

 

Maruei is celebrating its 70th anniversary this year.  Can you highlight for us key moments in your evolution and how you evolved from a glass bottle manufacturer to the integrated manufacturer you are today?

There are three milestones in the history of our company. My grandfather founded the company in 1944. He bought and sold glass bottles, but sales increased year by year, and in 1956 he bought a glass bottle factory and set up his manufacturing business. This was the first milestone in the history of the company.

However, the environment in which glass bottles are made is very difficult and the heat is unbearable, especially in the summer, and it is not possible to recruit young people to carry on the tradition. The second milestone was reached in 1997, when the factory was rebuilt and the production of plastic containers began.

The third milestone was the establishment of OSI CMG, a group company which is entrusted with the manufacture of cosmetics, food products and other products. As a result, we are now able to undertake the entire manufacturing process from containers to finished products, and we have received work from major food manufacturers and long-established cosmetic manufacturers, which has greatly expanded the scope of our business.

You began with sales, then expanded to manufacturing, and now have become a trading company with your subsidiaries. What advantages has this history of manufacturing brought to your trading business, and what synergies are you able to create between these businesses?

We consider our multiple divisions our strength because of their synergistic effect and interconnectedness. Since we started as a container company, we have a comprehensive understanding of this field, which allows us to produce the content itself. The purpose of the container is to protect, preserve, and keep the quality of the content in order to ensure consumer satisfaction. After determining the content, we decide about the best shape and material for the container. All of our experiences and divisions work together to provide excellent quality and the total management of each product.

 

A notable strength and advantage of SMEs like yourself is the flexibility and the ability to evolve and adapt to market demands. What do you think the next big evolution will be for Maruei in the midterm, and what would you like to see?

Communication with our clients is of tremendous importance. We want to pay attention and actualise their needs and requests, no matter how small they may be. Demands can change depending on the time period; hence, we want to be flexible in going with the flow. We also want to expand the strike zones for our customers by making proposals and sparing no effort to address different possibilities. The strategy we are taking is having multiple strike zones and combining everything that we can do to be able to increase our product line-up.

 

International co-creation and collaboration with local partners can be the key to unlocking new markets. What role does co-creation play in your business model? Are you presently looking for any new domestic or international co-creation partners?

Until 2007, we had our manufacturing facility, but we are now collaborating with other companies that manufacture for us. Moreover, we are also acting as a trading company. Since we have enough experience as a manufacturer, we can assure and raise the quality of the manufactured products. Sometimes, we provide our know-how to the collaborating companies to help them increase their level of manufacturing.

 

Can you tell us about your criteria when you're looking for new domestic or international partner to collaborate with?

I believe that having the same mindset is very important in finding partners. They must understand the importance of putting forth effort in pursuing quality. We have been working with multiple Chinese factories for over 10 years since 2011. At one point, we could not find a factory that understood the significance of quality and putting forth effort in improving the quality of products. However, about three years ago, we found a factory that was willing to pursue the quality that we seek, which has enabled us to produce quality products at a low cost. Because we shared some of our know-how and technologies with them, the factory is able to produce very unique products that meet the demands of Japanese customers. Therefore, understanding the quality is key in finding a new partner.

 

You are present in China, Taiwan, South Korea, and Thailand, not only in trading capacity, but also in manufacturing. Can you tell us if there is any particular market that you consider key moving forward? Can you please elaborate more about your international expansion strategy?

In our current business model, we produce containers outside Japan and only sell them to the Japanese domestic market. Due to the demand, we produce the content for cosmetics in Japan and export to China. We started our manufacturing site in China, then later in Taiwan, South Korea, and Thailand, with our next targets are Malaysia and Vietnam. Still, as an SME, we let the major companies go ahead of us to find their footing before we enter the market. Now, we are looking for the opportunity.

 

Are you presently looking for any joint venture or merger-and-acquisition opportunities in those local or emerging markets that you are moving into?

While it is true that many Japanese companies engage in joint ventures and bring machinery from Japan, our strategy is not to invest in companies and engage in joint ventures because we want to be as flexible as possible. We want our technology to be within Japan and outsource what is needed to already existing factories and overseas. One thing that we seek is a partner who shares the same belief towards quality.

 

Imagine we came back in five years and had this interview all over again; what would you like to tell us? What dreams do you have for Maruei?

I want to strive to make the technology that we possess to be the solution to social issues that we are facing now. Our technology for containers is continually advancing with multiple functions and materials utilized, so we want to cater and respond to social crises and issues. That would be the dream and mission that we want to attain.

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