From food and cosmetics to electronic materials, Sakai Chemical’s products are proving indispensable to key industries
The Japanese chemical industry has suffered when it comes to the production of base chemicals due to regional competitors being able to lower their costs. However, Japanese chemical manufacturers are still leaders when it comes to highly functional and specialized chemicals. Furthermore, Japan can count on several chusho kigyos who are able to develop niche chemical and material technologies. What are the strengths and weaknesses of the Japanese chemical industry today?
That is quite the macroscopic question, so I will narrow down my answer to talk about my company. The biggest strength of Sakai Chemical is that we have talented and experienced chemists that drive us forward, and I like to think of them as the key asset of the company. The strategy I have as the president is to deepen our experience in the chemistry field and to do that, it is important that chemists are the ones to take the initiative to create new businesses. Our company vision is to contribute to the welfare and happiness of people through the monozukuri of chemical products.
Our salespeople go and talk with clients and find any potential needs or requests from those customers. Those requests are then taken back to our company so that we may research and develop solutions that have added value for our clients. This practice is not confined to only our firm, but in fact, it applies to all Japanese companies. The focus on chemistry itself is what makes Japanese companies strong in this field.
Our company was established in 1918 when the white lead issue became more prevalent in society. Women at the time wore a foundation that used white lead and that was causing serious health issues among the Japanese. We replaced it with zinc oxide, and ever since then, we have continued to evolve our company. Our roots all stem from this need to contribute to the well-being of society.
Our company loves to take up new challenges and contribute to the welfare of people. We all share the same vision here at Sakai Chemical and we enjoy the challenges that society throws at us all. The process of tackling issues is where we get our excitement from.
As a firm that provides catalysts that remove nitrogen oxides and dioxins from waste incineration, can you tell us about some of your environmental initiatives?
As a company, we have set ourselves some clear carbon neutrality targets with the aim for a 30% reduction by 2030, and by 2050, we aim to have achieved complete carbon neutrality. Our products themselves are contributing to the reduction in environmental damages such as our denitrification filters or our catalyst that removes harmful gasses from nitrogen oxide.
To combat oceanic pollution from microplastic beads used in cosmetics, we are developing alternative materials using calcium, barium, and our ultrafine processing technology. In creating these alternative materials, we fully utilize our high-purity and shape-control technology which we can control the chemical reaction during the synthesis process.
Your products are used in a variety of applications such as inks, cosmetics, electronic materials, and pharmaceuticals. Which application are you currently focusing on?
Currently, our focus is on electronic materials as well as cosmetics. We provide materials that are inductive and used in EVs and 5G technology. With the rapid expansion of both of those markets, we want to spread our product.
With the arrival of Meta and virtual societies, humans will begin to have fewer hands-on real-world activities and we see a growing need for inductive material.
As for cosmetics, we provide our materials as ingredients for sunscreens with high UV shielding properties and this is highly recognized by our clients in the cosmetic field. Currently, with COVID-19, there is a decline in the demand for sunscreens, but we feel that in a post-COVID-19 world, it will come back. Our company is often recognized for providing unique inorganic ingredients for cosmetics, so we are looking to diversify further not only to cater to sunscreen, but other cosmetics that can utilize our unique inorganic ingredients.
Sakai Chemical offers many dielectric materials such as barium titanate. Can you tell us more about your dielectric materials and the advantages they bring to your customers?
With our dielectric materials, we provide both barium titanate and barium carbonate, which is BaCO3. Our technological developments have been contributing to the miniaturization and enhanced capacity of electrical components such as capacitors. If you want to store a high amount of electricity, it has to be layered out, and in order to lay out the chemical powder, the particles need to be refined to keep it small yet keep the high capacity. Capacitors such as multilayer ceramic capacitors (MLCC) have now become miniaturized and that is thanks to our refining chemical technology. Our factory was established in 1991 in Iwaki prefecture and we have seen great change since then.
Cell phones used to be very big in size, but now with the miniaturization of components inside, we have much smaller phones than we have ever had before, yet those phones have multiple functions. This may refer back to when you asked me about the strength of Japanese companies, and we collaborate and discuss closely with our clients on their exact needs. It is thanks to these discussions that we have been able to evolve our refining processing technology. It is together with our clients that we have been able to achieve the miniaturization of MLCCs that are now used for automobiles, cell phones, and many other applications. Collaborating within Japan is the strength and value that Japanese companies bring.
What role does collaboration play in your business model and are you currently looking for any international partnerships?
In the future, it will be inevitable that we become a global company. In recent decades, we have tried to promote our resin additives to overseas markets. This additive is used for infrastructure materials. We are targeting developing nations in Southeast Asia and East Asia so that we may assist in infrastructure material. We have bases in Vietnam and Thailand and their purpose is to promote this additive. Also, we are currently developing a new business on top of this resin additive one.
In recent years, the lines between remedies and treatments are beginning to blur in the medication industry. As a result, many patients are opting to self-medicate themselves with over-the-counter (OTC) drugs rather than going to see a doctor. The COVID-19 pandemic has only served to exacerbate this with many not wanting to go outside. In an era where patients are opting to self-medicate themselves, what opportunities does this present for your firm and how do you plan on taking advantage of this trend?
Our strategy in the pharmaceutical field is to focus on the provision of raw ingredients as well as half-processed ingredients. With COVID-19 and the disruptions to the supply chain that followed, the importance of manufacturing raw ingredients for pharmaceuticals has become very prevalent. We are now focusing on providing these but at the same, we do not want to get labeled as a commissioner only, rather we would like to be known as a developer too. Evolving ourselves as a contract development and manufacturing company (CDMO) is crucial to us.
Are you looking to expand your CDMO business overseas?
Our main clients will be Japanese pharmaceutical companies. When we go abroad to the US for example, we have to be certified by the Food and Drug Administration (FDA) and we actually have a certificate from the FDA already, so that would be our strength in promoting ourselves overseas.
With good manufacturing practices (GMP) we are highly recognized by Japanese firms, so we have quite a stable demand in the industry.
DeepCle is your image analysis service that utilizes AI deep learning. Can you tell us what the strengths of the DeepCle service are?
Actually, this business evolved from a need within our company. When we produce ultrafine particles, we use a microscope to check the size and the configuration. Doing these checks takes time, so we developed this AI analysis system to run image processing in order to determine whether the configuration is correct or not. Based on that technology developed within the company, the engineers expanded it so that it could be applicable to other industries. We settled on the name DeepCle.
DeepCle is now applied in various fields, but it is still a work in progress. What it is strong at however, is quantifying things that are not visible to the human eye. One example might be the damage done to strands of hair, and by using DeepCle, we can determine what factors have contributed to damaged hair. Another example might be in food, and in particular, texture. This can be quite a subjective matter, but by quantifying the elements of texture, we can gain a deeper understanding of what makes a palatable texture. We now have contacts in the food industry and they seem very excited to use our system.
Can you give us more information about your R&D strategy? Are there any products or technologies that you are currently working on that you would like to showcase?
We do many things, so it is a little difficult to answer. Last year we revised our R&D scheme and reorganized the company so that we may expedite the process of understanding the needs of our clients and developing new products. This past year, we have really tried to focus on catering to the many needs of our clients and this is why we revised our R&D structure. We felt it was key to not only cater to the current needs of our clients, but to seek out potential needs by better understanding the latest information beforehand. Using this information, we have tried to analyze the underlying demands of the clients and then take that information and apply it to laboratory testing so that we may quickly respond.
In this current society, the lifecycle of a product will not last over 30 years and the needs are changing very rapidly. Sakai Chemical would like to take the lead and be a pioneer in new potential products and chemistry. By launching this multi-pilot approach, we are sure that we can provide diverse options.
With this goal of expanding in Southeast Asia, what strategies are you looking to employ to do so? Could you elaborate more on that aspect of your international strategy?
In terms of our international strategy, we want to continue to grow overseas, and unfortunately, we feel that we have been weak in our penetration of overseas markets. For manufacturing, we feel it is more efficient to produce our chemicals overseas, so for that reason, we would like to establish a plant in the region. We are also looking for potential agents or M&A opportunities where we can penetrate and promote our value-added chemicals. With the current economic situation Japan, right now we feel it is important to shift our focus more internationally.
Imagine that we come back in 6 years' time and have this interview all over again. What goals or dreams do you hope to have achieved by then?
It is important for the company to have sustainable and continual growth, but at the same time, the growing business must be what is contributing to the happiness and well-being of human society. When you come back in 6 years' time, our company would need to continue to serve society and be highly valued as a company that makes significant contributions to deep chemistry.