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Taiyo Chemicals: Leading the sustainability drive in plastics

Interview - September 24, 2022

As a leader in PET manufacturing, we learn from president Kazunaga Uenishi how Taiyo Chemicals is leading the charge in making the plastics industry more sustainable.

KAZUNAGA UENISHI, PRESIDENT OF TAIYO CHEMICALS CO. LTD.
KAZUNAGA UENISHI | PRESIDENT OF TAIYO CHEMICALS CO. LTD.

Could you give us a quick description of how your company started and what products you make?

We were established in 1954 and started off making a single button. We eventually used the button technology to create pearls or beads, and lacquerware. Now we’re doing PET (polyethylene terephthalate) recycling and hydroponics. We expanded into China in 1989 and were one of the first foreign companies to be granted 100% ownership in China.

We basically produce mahjong products and injection molded products. We were one of the first to produce automated mahjong tables, and for over ten years we’ve been working with kindergartens and parent-teacher associations to collect plastic bottles for our recycling operations. We’ve been in the PET business for 20-plus years. Our recycled plastics are food safe, heat resistant and toxin free. Creating the appropriate strength, durability and texture for our resins has been a big priority for us, and just last year we were able to create PET plastic that is 98% recycled and complies with ISO, international food grade standards and is heat resistant. We’re always evolving to the needs of society and our customers, creating value out of waste while staying close contact with clients throughout the design and manufacturing stages.

 

This year we’ve invited staff to propose new ideas for our company to pursue, and give awards for the best ideas allowing us to expand based on the passions and experiences of our employees.

Apart from mahjong tables, locally in Japan we manufacture LED light systems, gas piping, the plastic components of headlights and taillights for Mazda and Toyota, and in our Chinese factories, we manufacture products for Daiso (100-yen store) and lighting components for Panasonic.

We also manufacture recycled plastic plates, bowls and bottles, all with food-safe finishes. We even add finishes using mica stones giving our tableware a “recycled” effect. At times because the raw product looks too pristine or ceramic-like, customers would find it hard to believe it was recycled. We use about 3000 tons of plastic a year reducing waste that goes into landfills or oceans and we also use solar panels on the roof of our facilities to lower our carbon footprint.

 

Manufacturers in China, Taiwan, and Korea have replicated Japanese processes and products using cheaper labor costs and taking advantage of economies of scale. In the case of your company as a thermoplastic expert, what is your interpretation of monozukuri? Secondly, how have you combated this new regional competition, and what steps have you taken to overcome this challenge?

Our monozukuri allows us to provide products and services that other companies don't do or don’t want to do, so it's something that others cannot attain, but we can. As an SME operating in a niche field, we have experienced many failures but our successes are built upon those failures.

We’re a Japanese company that established a base in Shanghai in 1989, well before that time there were no taxis operating at the airport, only bicycles. It was only in 1989 when we saw that there'd been a big transformation so we went to Shanghai to find a location to build our factory, and I was invited to an elementary school’s principal’s room where I was told that a new airport would be built. I was a bit dubious at first, but eventually they actually built an airport in Pudong.

At that time, Chinese people preferred to use non-Chinese products because the local quality was generally not very good. However, over the years, the Chinese with their diligence have learned from the USA and Japan, and they were able to improve their level of quality. However, the level of quality they have reached is still not comparable to the technology and the quality that the Japanese people take pride in.

Having said that, in the last five years China has focused on developing its AI technology, particularly during the Covid period when countries were isolated. China domestically revolutionized their AI technologies, and they are now actually able to match if not surpass the Japanese levels of quality and technology. The biggest challenge for growing Japanese companies is not developing the Japanese monozukuri that has been passed down from previous generations but how to preserve it. The Japanese have a particular advantage in terms of technical and complex components which requires a higher level of craftsmanship. However, with the possibility of this level of craftsmanship becoming extinct, it's crucial that we take the data/information and incorporate it into some form of AI so it can easily be passed down to future generations. For example, surgical tools are currently handmade by our craftsmen. To keep up with the sustainability and speed that is required in today’s world, we need to develop a means of manufacturing that is automated while keeping monozukuri in mind. Japan needs this to survive. In regards to  how to compete with China, actually it's not a competition for us. We have our factory in China and we feel we are all on the same ship. We are all good friends. It's more about how we target the Chinese market, how we evolve in that market and how to use the partnership that we have with China to our advantage.

Regarding Japan’s serious demographic decline, it's important that Japan partners with other nations and creates good relationships, specifically with Korea and Taiwan. Currently, the Japanese population is 125 million, but if you combine that with Korea and Taiwan it becomes 250 million and the larger the pie, the better we can work together to build the economy. And if you add Vietnam and the Philippines then we can increase that population to 300-400 million, so what's important for the Japanese government is to consider more relaxed laws in terms of things like work visas, so this could be a region where a visa is not required.

 

The zero tolerance Covid policy in China has disrupted logistics and factory supply chains worldwide. Many companies have talked about diversifying their supply chains and having bases in countries outside of China to offset that risk. Is that something you're looking to incorporate into your business model?

Yes, we are thinking about diversifying ourselves into the Philippines. However, we will still maintain our base in China due to its massive supply chain. China provides a majority of the world's components and materials for manufacturing. Having a base there for sourcing these will be cost-effective. Therefore, in order to be competitive in the global market, we need to find a way to coexist with the Chinese market.

 

Can you tell us which product line or division is your current focus, especially for expansion overseas?

Recycled material is in fact the major focus of our overseas expansion since it's in line with our SDG approaches. Our sales have dramatically increased in this field due to the demand of sustainable materials globally so we would like to continue to promote it.



Last year at COP 26 a rulebook was agreed by all countries on how the Paris Agreement would be put into action and hold countries accountable. Your PET material is almost 99% recyclable material, but it's also BPA (Bisphenol-A) and formaldehyde free, meaning that there's no toxicity and it can be used again and again. Can you explain more about the advantages when it comes to this material, and why companies choose your material for their products?

The PET bottle recycling business actually began over 30 years ago. I saw a picture in an American magazine of plastic bottles being piled up in a mountain and I felt that the same situation would happen in Japan, so I foresaw a future need and established this business. Plastic itself is not evil, it's actually people who improperly discard plastic into the sea or anywhere in nature for that matter who are the evil ones. In order to realize SDG’s and also carbon neutrality, it’s important to change people’s morals so that they understand and follow the rules. To that end, we have been collaborating with elementary schools where we collect plastic bottles from the children and offer “environmental protection” education so they become highly aware of the impact of their actions. Our concept is “Do not waste it, but recycle it and give it a new life”.

In terms of total carbon neutrality, I'm actually doubtful that we can really achieve that in the near future. I strongly feel that Japan has very unique technologies and even has the technology to develop waste burning facilities that don’t emit any CO2. If the Japanese government takes a lead in developing, enhancing and promoting these CO2-free incinerators, that would be a major Japanese contribution towards the achievement of SDG's and carbon neutrality not only in Japan but in the entire world.

 

You explained how you're procuring the raw materials from local schools and helping not only to educate the youth but also to get a sustainable material base too. In terms of expanding that business model overseas, how would you go about doing that? How would you ensure a stable supply of recycled material?

In Japan, the recycling system for PET bottles has already been established through schools and governmental systems and we also want to expand and apply a similar business model overseas. We engage with elementary school children, as starting with them gives them a good foundation and awareness of environmental threats, and if we provide the opportunity for them to contribute to recycling, we are hoping it would instill a habit in them. I'm sure that this is something that will be well received elsewhere in the world.

 

And are there particular countries that you see as good places to start off doing that?

Maybe in the Philippines, in particular Cebu Island. Cebu being one of the major provinces in the Philippines, is prone to and is currently experiencing a tide of pollution particularly with plastics. Establishing our system there would allow children to understand how to behave and learn the morals required to coexist with the environment.

 

Are you looking for partnerships for your thermoforming technology to enhance it? Or perhaps overseas partners that have some technology that you could combine and create a new product with?

Yes, for PET bottle recycling we want to collaborate. We are particularly interested in biodegradable plastics and collaborating with companies that have this technology. In the past, it would take plastic a few hundred years to degrade, but now we are able to cut this time significantly with the enhancement of technology, so by collaborating with those companies, we want to create a new type of resin that is appropriate to the current needs in society.

 

You are affectionately known by local media as the “mahjong king”, and you've been creating these automatic tables for over 40 years now with models such as the Amos Rexx and the Amos JP. Could you tell us a little bit more about these tables and why you have got such a dominant market share?

Our business began with the manufacturing of buttons and that technology is now used to make mahjong. We had a button manufacturing capability and at that time mahjong pieces were made from ivory, and it was very expensive, so we wanted to replicate it using the plastic thermal hardening technology that we had. There are three types of thermal hardening plastics, they are: phenol, melamine and urea. We focused on urea, it is a bit heavy and hard, and the surface is very shiny and is a perfect replica of elephant ivory. Furthermore, our margin was quite high so it became a good business for us. Not only did we manufacture mahjong pieces and tables, but we developed a mahjong school hiring professionals and champions to teach the game at various skill levels. The school garnered the opportunity for us to spread the word about how fun Mahjong was as well as provide the product for them to use. It was a win-win situation for all.

 

In 2006 you launched Taiyo Unimak which is a trading company that collaborates with local companies in Vietnam, China and of course here in Japan for outsourcing. You’ve handled products from cosmetics to medical drugs to tableware. Could you tell us your goals for that business and what kind of solutions you're offering, especially overseas?

The current major business of Unimak is providing products to support 100-yen accessory and crafts shops around Japan. We procure items from Chinese companies and then inspect them in our own factory before packaging and delivering them to our customers. Our accessories actually use beads, and I visited a Chinese market where buttons and beads were sold together. The quality of the buttons sold there are very good in correlation to their prices. I thought of the idea of doing the same with beads so we proposed the idea to Daiso’s 100-yen shops and they really liked the idea and it became a big hit. Our hope is to continually be able to source products for other companies to improve their products, allowing us to present other business proposals for expanding the repertoire based on their businesses.

 

The automotive industry is seeing huge shifts both from traditional engines to EV’s and from heavier materials such as steel to lighter ones like aluminum and CFRPs. Is this a field that you're looking to cater to with your products and services for the next generation of cars?

Generally speaking, in terms of the overall Japanese automotive related industry and parts manufacturers, the industry itself requires such a high standard of quality that I feel is actually excessive. For example, if there's a small black dot on a component that's used inside a car which does not affect the quality of the product, it’s considered “defective” just because there's a small dot. Unless Japanese people change their mindset to be more lenient and practical about matters relating to these sorts of quality issues, Japanese manufacturing won’t be able to be competitive in the global market. Japan needs to be both more lenient in terms of common sense towards the quality and at the same time focus on more high quality products that are unique to other companies or countries.

As for our company, we listen to the needs and the requests of our customers and produce products accordingly for automotive companies. Currently we do headlamp covers, but next year we are not sure what our customers will want because the items/parts required for EVs will change. This will be a learning process for us but we do intend to penetrate whatever markets that are viable. As I said, this will be a learning process and  if we have some products that don’t meet certain standards during our production process, we will collect the relevant data and accumulate it in our AI model to ensure we minimize such losses in future. The ability to turn the results of negative outcomes into a positive which can improve our future performance is how we’ve survived and evolved over the last few decades.

 

Let's say we come back to interview you again on the last day of your presidency. What would you like to tell us about your goals and dreams for the company by that time, and what would you like to have achieved by then?

When you come back for my exit interview as president of Taiyo, the first thing I would like to do is make sure everyone will know and realize the amount of appreciation towards my employees, particularly the Chinese staff. We’ve had a long standing operation in China and we’ve had a good relationship with Chinese colleagues and friends. It's actually thanks to them that we were able to evolve and survive together as a company.

At the end of my term, I would like to be able to discuss the growth and success we’ve had with our agricultural business. With climate change affecting us more each day, it may be harder to do agriculture outdoors, so doing it indoors with AI would be a solution to mitigate the global food shortage. Both climate change and human encroachment have damaged the habitats of wild animals. By utilizing AI and creating a sustainable and affordable indoor agricultural system, I want to be able to propose a new solution for the next generation, and by the time I retire I want to have established a foothold for that.

 

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