The Japanese water treatment pioneer unveils sustainable filtration innovations, shares global expansion strategy, and reflects on a transformative journey towards a water-secure future in their 90th anniversary vision.
The current landscape is pivotal for the Japanese industry, marked by supply chain disruptions caused by the COVID-19 pandemic and the decoupling between the United States and China. Consequently, corporate groups are seeking supply diversification for reliability. Japanese firms, renowned for their reliability and advanced technology, are in a unique position, partly due to the weak Japanese yen. Many observers suggest that this presents a distinct opportunity. Do you share this sentiment, and could you elaborate on the advantages Japanese firms possess in the current macro environment?
We previously sourced our raw materials for filter sands from countries such as China, Malaysia, Cambodia, and South Korea. These raw materials were then refined to create our filter sands. However, the emergence of COVID-19 disrupted the functioning of governments in these countries, leading to problems in raw material procurement. Additionally, the devaluation of the yen made these imported raw materials more expensive for us.
To resolve these issues, we decided to reconsider our raw material sourcing strategy and considered the possibility of finding domestic sources for these raw materials within Japan. We have carefully selected filter sand suppliers and producers in Japan and have decided to return raw material procurement to the domestic market. These are the impacts and adjustments we have made in response to the challenges posed by the recent coronavirus outbreak and the weaker yen.
The situation had a significant impact on our product sales activities, particularly our overseas sales efforts. We had only recently started our overseas sales initiatives a few years before the onset of COVID-19. Unfortunately, the pandemic struck just as we were launching these initiatives, and it forced us to conduct our sales activities remotely, causing numerous delays.
Now that COVID-19 restrictions have eased, the projects and activities we initiated are finally gaining momentum, and we are starting to receive projects from overseas clients. The trend of a cheaper yen has also been advantageous for us, as it has improved our price competitiveness.
One noteworthy development is our involvement in providing aid to Ukraine. Following the Russian invasion and the destruction of hospitals, elementary schools, and water treatment plants, ensuring a safe water supply became a critical challenge. Many water purification plants were severely damaged or malfunctioning. Starting in November of this year, Ukrainian engineers will be invited to Japan for training, and the Mobile SIPHON Tank (MST) will arrive in Kyiv, Ukraine, in January 2024. These efforts are currently underway.
The SIPHON tank is a filtration device that offers a continuous supply of well-filtered water without the need for frequent replacement of filter media. Could you provide insights into the development history of the SIPHON tank, and elaborate on the technologies you have employed to ensure that the filter media remains effective without frequent replacement?
Before World War II, our main business was manufacturing glass raw materials from sand such as silica. Our company had technology for separating particulate matter.
However, after World War II, the situation in Japan changed significantly with the arrival of the GHQ (General Headquarters of the Supreme Commander for the Allied Powers). Many Japanese cities had been heavily bombed by air raids during the war, resulting in the destruction of numerous water treatment facilities. In response, the GHQ recognized that we had the expertise and technology to effectively separate particulate matter and requested our cooperation in water filter sand treatment. This was the beginning of our company's efforts in water purification filter sand treatment. Our company started its business as a manufacturer specializing in filter media and has applied approximately 80 to 90% of its technology to water treatment facilities in Japan. This strategic focus has allowed us to establish a strong presence in this field.
The sand we use for water filtration must meet specific criteria composition and particle size. Sand that meets these requirements is limited to approximately a few locations within Japan. Recognizing that this sand is a valuable natural resource, we understood the importance of sustainability and the need to recycle this valuable resource. As a result, in 1955, we began developing and implementing a recycling plan for our Filter media technology. This marked a significant step in ensuring the long-term availability of the necessary filtering materials.
During that period in Japan, several factors contributed to significant changes in the water treatment environment. First, laws and regulations were enacted to restrict the collection of specific materials from river areas, making it more challenging to obtain raw material. Additionally, Japan was undergoing a rapid industrial revolution, leading to increased pollution in wells and rivers.
As Japan's industrial society expanded, the demand for clean water grew substantially. Water treatment facilities relied on filtering media to purify water through a filtration system. Over time, these filtering media would become clogged with impurities and particles from the water.
Traditionally, these filtering media were expected to be replaced only once every 20 or 30 years. However, due to the escalating pollution levels in Japan's water sources, the frequency of filter replacements began to increase. Filters that were originally designed to last for decades now needed replacement every 7-10 years. This change placed a significant burden on water treatment plants and necessitated innovative solutions to address the challenges posed by increased pollution and the need for more frequent filter replacements.
In response, our company proposed a novel method and construction approach to our clients in the water treatment industry. The proposed method involved removing dirty filters media from the Water treatment plant filtration basin, cleaning thoroughly, and then reinstalling recycling construction. This innovative approach established a new business model that became widely adopted in water treatment plants throughout Japan.
While the recycling of filters offered an effective solution, it became apparent that more advanced technology was needed to address the challenges of maintaining water quality and ensuring that filters were thoroughly cleaned. To meet these needs, our company developed the SIPHON washing system, which was designed to remove impurities from the surface of filter media, resulting in significantly cleaner filtering media.
The SIPHON cleaning system was developed over two decades ago, and it has since become an essential technology in the water treatment industry. It plays a critical role in maintaining the quality and product lifespan of filtering media, resulting in more efficient water treatment processes. This is particularly crucial because the availability of raw material sand from various countries has become increasingly limited.
As developing and mid-developed countries experience economic growth and undertake large-scale construction projects, there is a growing demand for concrete and sand. As a result, several nations have restricted the export of raw material sand to other countries, including Japan. Notable examples include China, which implemented such restrictions around the time of the Beijing Olympics, and countries like Cambodia and Vietnam. This has created a competitive environment among developed nations for the procurement of sand resources, emphasizing the importance of developing and utilizing advanced technologies like the SIPHON cleaning system to optimize existing resources and processes in the water treatment industry.
About 15 years ago, Japan experienced a trend in shifting water purification systems from filtering sands to membrane-based solutions. During this period, various stakeholders, including government bodies and membrane manufacturers, asserted that the era of water purification through filtering sand was coming to an end, with membranes poised to replace traditional methods. However, as over a decade and a half have passed, it is noteworthy that a substantial majority, approximately 97%, of water treatment plants in Japan, including their water treatment systems, still rely on sand filters. In contrast, only a small minority, about 3%, have adopted membrane-based approaches. We believe that this reliance on sand filters underscores the enduring relevance and necessity of filtering sands in fundamental water treatment processes.
During the initial introduction of membrane-based water purification systems, the Japanese government provided subsidies that covered a significant portion, often half, of the initial costs. In contrast, filtering sands had a longer lifespan, typically lasting between 10 to 20 years and could be recycled after cleaning. On the other hand, membrane systems required more frequent cleaning, at least annually, and complete replacement every three to five years. Replacing a single treatment system incurred costs in the millions of yen, while replacing an entire plant could amount to hundreds of millions of yen. Faced with this budgetary problem, some water treatment plants abandoned membrane systems entirely, while others gradually reverted to using filtering sand.
Given the ongoing depletion of resources and materials, it is imperative to safeguard these crucial filtering sands for the sake of current and future generations. Preserving the conditions that ensure the availability of safe drinking water, and maintaining these existing filter sands, is essential. Moreover, there is a pressing need to develop technologies that facilitate the cleaning and rejuvenation of filter media, reducing the necessity for complete replacements.
Filtration methods vary worldwide, encompassing membranes, physical filtration like granular filtration, ultrafiltration, chemical filtration, and biological filtration. Your company places particular emphasis on granular filtration, especially using sand, and has been passing on this knowledge. With evolving technology and the emergence of new filtration methods, do you anticipate that sand filtration will eventually be phased out? Or do you believe that your firm will continue to be a permanent mainstay in the filtration business, adapting to changing needs and technologies?
What makes the filtering sand system truly distinctive and unparalleled is its fundamental methodology. At its core, filtering sand originates from a natural process wherein rainwater flows into the mountains, seeping into the earth's surface layers and strata. Over the course of several decades, this water undergoes a transformation, becoming spring water and well water before ultimately returning to the rivers.
In the realm of water filtration, there are various methods employed, including membranes, paper, and fabric. However, the filtering sand system stands out due to its unique approach to washing and cleaning sludge. Each individual grain of sand measures approximately 0.6 millimeters in size. When these grains are aggregated in substantial quantities, they collectively form an immense filter. Applying significant backwash water from beneath, water is propelled through this sand bed, causing sludge particles adhering to the surfaces of these minuscule grains to disperse and be carried away by the current.
Your technologies and products have been applied in various overseas projects, spanning countries like Laos, Vietnam, the Philippines, and Thailand. Is seeking local partners in international markets an avenue of interest for your firm to facilitate and expand your overseas expansion efforts?
Our overseas business strategy differs from establishing individual sales companies in each foreign destination. Instead, we seek collaborations and partnerships with entities deeply ingrained in the water treatment systems of each respective country. In conjunction with these partners, our aim is to identify and pursue opportunities for delivering water treatment solutions tailored to the specific requirements of each nation.
Recognizing that simply transplanting the technology of our mobile SIPHON tanks used in Japan may present technological challenges in certain countries, we intend to combine our foundational technology with the unique needs of each region. This approach enables us to offer devices and opportunities that align with the price range and specific demands of each country, allowing us to remain adaptable and responsive to varying circumstances and conditions.
Filtration devices are invaluable in regions where tap water is not potable, as they play a crucial role in providing safe water for everyday tasks like teeth brushing. Your efforts in countries such as Laos, Vietnam, and the Philippines have significantly improved the quality of life in these communities. Are there any new regions or countries you are considering for the introduction of your filtration products? Which regions do you believe hold the most potential for your company's growth and impact?
We remain committed to offering infrastructure equipment to Ukraine and aspire to engage in comprehensive support for their reconstruction efforts. We are also actively pursuing business expansion in Central and South America, with ongoing projects in the Philippines as part of our global endeavors.
Gazing forward to your 90th anniversary in the next six years, what dreams and aspirations do you have for the company? What specific goals would you like to have achieved during this time frame?
Despite the rising costs of electricity and gas, increasing water supply rates remain a global challenge. With Japan's declining population, water usage is expected to decrease annually. Looking ahead to 10-20 years, it's increasingly challenging to guarantee the same level of water safety and reliability, particularly in a village on the verge of disappearance and small villages in Japan. Given the previous population levels in Japan, numerous large concrete water treatment facilities were built. However, refurbishing and reconstructing these facilities in the future seem impractical. We need adaptable and mobile solutions that can be deployed to areas in need at the right time.
We are striving to pioneer a new type of water treatment system, which is why we have developed these mobile SIPHON tanks. While we can place 40 or 50 SIPHON tanks in a single location, we can also detach and transfer them to different locations as needed. This mobility is crucial, especially during disasters. We believe this mobile system will become the global standard in the future. These small tanks can be easily moved, giving you the flexibility to install the water treatment equipment you need where you need it. This approach represents the future of water supply, especially in Japan.
We refer to this initiative as the "The Water Planet Project" within our company. We are considering its global application as well. For instance, in a new country where we plan to expand, having at least two water treatment systems will create a transfer line. With three systems, we can form a triangle to cover a specific area for efficient water transfer. While we position our company as a water treatment company, our fundamental philosophy is rooted in Japanese monozukuri. We strive to introduce new, groundbreaking concepts that have never existed before in the world, surprising everyone.
Our company's core ethics revolve around creating excitement and enjoyment for our employees through the development of innovative products. Over the next five years, our goal is to continue creating new devices and products that will astonish the world. This is our vision and dream for the future.
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