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Shoei Yakuhin contributing towards a more sustainable future

Interview - August 22, 2022

With the chemical industry contributing significantly to environmental issues, Shoei Yakuhin is looking to change that, providing alternatives to petrochemicals, in addition to adopting environmentally friendly practices to ensure a cleaner future for all.

SAICHIRO FUJIWARA, PRESIDENT & CEO SHOEI YAKUHIN CO., LTD.
SAICHIRO FUJIWARA | PRESIDENT & CEO SHOEI YAKUHIN CO., LTD.

Can you provide a brief introduction to your company please?

Our company specializes in oleochemicals and oleochemical-related products. Our company has been involved in the SDGs (Sustainable Development Goals) business way before it became a hot topic. Petroleum will be depleted at some point in the future, but the raw material of oleochemicals can be regenerated if there is soil, water and sunlight. It is also environmentally friendly. We have been doing business of oleochemicals to surfactants manufacturers and many other industries. We are the main distributor of Kao Oleochemicals, 40% of our business is related with them.

For other our business, our sales team develops safe and reliable products for consumers in niche fields based on our chemical expertise. Conventional manufacturers of detergents for washing machines have developed chlorine-type detergents, but they are not environmentally friendly and difficult to use. Therefore, we developed oxygenated type powder detergent for washing machines. We are the first manufacturer to launch this kind of product. Another product we developed is a detergent used to clean dishwashers. For these Daily Necessities products business, Japanese Consumers' Co‑operative Union (JCCU-COOP) are our main customers. When we receive requests for product development from the JCCU-COOP's members, we have our OEM (Original Design Manufacturing) business develop new products based on the customer's needs.

 

A big part of your business is incorporating safety aspects in your industrial detergents, and you are pushing these qualities of your products as you expand your network in Asia with strategic stock points in Singapore and Bangkok, Thailand. Can you tell us more about these countries that you are targeting?

Our main products overseas are cleaning agents for automotive parts and precision materials. We used to just do business in Japan, and we started the stock point in Singapore for this business in Southeast Asia and India. Now, our subsidiary, Shoei Trading Thailand, is managing business for these areas instead of Singapore stock point.

Many automotive parts require cleansing before going to the next process in the assembly line, so our products are useful in these industries.

 

Japan has a very unique industrial structure. More than 90% of firms here are SMEs and they account for more than 50% of Japan's exports. Because they are small, they often lack resources or the ability to connect with overseas partners. Can you explain your role as a company that connects the raw material makers to the final product producers?

Our business model is the same domestically and internationally. Regarding our oleochemicals products, we are involved in the whole process. We deal with upstream manufacturers such as Kao Chemicals and other fatty acid manufacturers in overseas. We also deal with intermediate manufacturers such as surfactant manufacturers. With downstream companies, we work with manufacturers of toiletries and daily necessity products. We collect information throughout the processes and make decisions based on the customer's demands and variable opinion.

 

Your company specializes in oleochemicals and surfactants which are alternatives to petrochemicals. Can you explain to our readers the environmental advantages of your products compared to petrochemical alternatives?

There is no evidence that oleochemicals are more advantageous than petroleum chemicals, but petroleum is a finite resource. Significant amounts of energy are required to produce final products from petroleum. Growing and cultivating plants, like palm trees, also requires the same energy as petroleum chemicals. Most of the palm oil is used in food products and only a part of the oil production goes to the chemical raw material. Palm oil is replacing soy oil as a food oil. Palm plantations are increasing, especially in Southeast Asia, like Malaysia and Indonesia. As the world population grows, the demand for such edible oils increases and we are using some parts of palm oil production for industrial purposes. It is an advantage for humankind that vegetable oils can be reproduced. There were a lot of issues at the beginning of palm cultivation. The palm plantation had very poor working conditions and there were environmental issues as well. We have now shifted to a more sustainable agricultural method. Since Shoei Yakuhin is a member of RSPO (Roundtable on Sustainable Palm Oil), this is good PR for our SDGs campaign.

 

Can you tell us more about your plans for your OEM business?

Our target with the OEM business is domestic consumers. For example, we developed the shoe deodorize sprays. We are selling this product and other daily necessities products through distributor and online store, like as Amazon.

 

Your latest business is based on wastewater treatment. Just as modern life is depleting oil resources, it is also depleting water resources. Modern businesses are churning up more wastewater and newer technologies are needed to treat it. What type of industries are you targeting with your technology?

We support chemical manufacturers by procuring and providing raw materials and chemical products for them. However, manufacturing plants have other challenges for environmental issues, including how to treat industrial wastewater and how to prevent air pollution. We would like to provide solutions for these problems. For example, manufacturers purchase clean water from the local government, but when natural disasters occurs, this water supply may be stopped and have to get expensive water from other sources. Our solution is for manufacturers to recycle their own waste water to decrease the cost of water supply. We work together with our partners to make proposals and develop systems. For example, the customer takes underground water and river water, and purifies it to use for industrial process. Many manufacturers discharge waste water. It would be beneficial if they can recycle it by themselves. We also provide deodorizing machines, there is bad odor issue of chemical in manufacturer, it makes a problem in and around the factory. Our solution for this odor problem, we propose this solution which is developed by the cooperation with our partner company. We would simplify their systems and propose solutions more for the customers, and finally, we would like to expand our environmental business more and more.

 

Are you supporting manufacturers both domestically and internationally?

Our primary business, oleochemicals, is dealt with both domestically and internationally, however, we have just started an environmental solution business, therefore we are concentrating this business domestically first. The environmental business is good PR for Shoei Yakuhin, but we have few concrete achievements of this business in overseas.

 

For this environmental business, would you be looking for local business partners to help you make country-specific technologies that would fit your target?

Currently, we do not have any partners overseas for the environmental business, but we might consider it in the future. What we are doing now is introducing our technologies and equipment. We identify issues companies are facing and we ask engineering companies for solutions. We are a middleman, not a manufacturer.

 

As part of your midterm strategy, what products and sales targets have you set for your company?

Firstly, we would like to expand oleochemicals and its derivatives business, such as Kao Chemicals and other partners.

Secondly, we would like to increase the importing products for Japanese customers, and also expand the business overseas with our subsidiary.

Thirdly, we would contribute to environmental issues with our technologies and knowledges.

 

You have been present in Singapore since 1993. You also have offices in Shanghai and Thailand. Are you looking to expand to new international locations in the future?

We do not have any concrete plans regarding M&As or partnerships in new locations at the moment. Regarding customers in Indonesia, we are following up from our subsidiary, Shoei Trading Thailand. Supplying to Indonesia has been increasing year by year. We may establish a local office in Indonesia in the near future. Also, we are paying attention to Vietnam.

 

This year is your 62nd anniversary. If we come back eight years from now on your 70th anniversary, what goals and dreams would you like to have accomplished by then for the company?

Shoei Yakuhin would like to contribute to making a sustainable world by supplying safe and reliable chemicals. As a result, our sales amount would exceed JPY30 billion by the 70th anniversary, compared to the current sales amount of about JPY21 billion.

It is also important to contribute to all of stakeholders. Most important is to keep and train talented and excellent employees at our company. We can do that by providing rewarding jobs. The sense of achievement of an individual should be linked with the growth of the company. Being the President for the last seven years, I can say that the employees are the most important priority. When good employees leave the company, it negatively affects the company's performance.

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