Since their foundation in 1912, Ebara has been at the forefront of Japan’s post-war development with their infrastructure and industrial machinery technologies
The famous Japanese manufacturing spirit or monozukuri is intrinsically linked to the kaizen philosophy of constant improvement. EBARA's motto of "Passion and Dedication" entails persistently seeking original and ingenious new products that cater to new market demands. Could you give us your interpretation of monozukuri?
Our company traces its humble beginnings to a small design house of centrifugal pumps in the Tokyo area. Issey Hatakeyama, our founder, attended Tokyo Imperial University, where he studied under Dr. Ariya Inokuty, a world-renowned professor famous for the centrifugal pump theory a hundred years ago. At that time, Mr. Hatakeyama sought to develop domestically manufactured pumps instead of importing from the US or Europe, as we already had a very good theoretical understanding of pumping technology. He was passionate about that endeavour and wanted to dedicate himself to society. Proving true to our founder's advocacy from the company's early years, Ebara has continued through each era to support Japanese society by utilizing our core competence.
As the Japanese economy started to recover from the aftermath of the Second World War, air-conditioning and refrigeration systems were in demand. While these technologies greatly improved the quality of life, they also meant increased waste. We promptly responded to the necessity to create an incineration plan to help with the removal of all the waste in the Yume-no-Shima, meaning Dream Island, landfill in the old Tokyo Bay.
In the 70s or 80s, we strove to be at the very sharp slope of global economic expansion. Since then, we have readily provided support to EPC (Engineering, Procurement and Construction) companies with our pumps and compressor turbines. Furthermore, we are looking to give assistance to the electronics industry and sustainable development. Ebara's dedication to supporting society is our unique mark and distinguishes us from other manufacturing companies who mainly develop products for profit.
In the 80s, before Taiwan rose to the top, Japan dominated semiconductor chip manufacturing worldwide; companies such as NEC, Toshiba, and Hitachi held the largest market share. Nowadays Japanese semiconductor related companies stand out in machinery and functional materials. Why is Japan so successful when it comes to machinery and materials for semiconductor manufacturing now?
I somewhat agree with the analysis made by Dr. Takashi Yunogami, journalist. He appeared as one of the speakers at the SEMICON trade show in Japan last year, about categorizing the equipment and materials. American and European equipment manufacturers shine in that regard with notable equipment for vacuuming, such as etching, or deposition, which require close attention in physics. On the other hand, Japanese equipment manufacturers have decent shares of the market for cleaners and coaters and developers, and they are wet systems. Also, Japanese material suppliers even have higher share in chemicals including photoresist. Meanwhile, Ebara takes the lead in CMP (Chemical Mechanical Polishing) systems that combine mechanics and chemistry. Chemistry requires closely communicating with our customers to determine their needs and deliver the optimal solution through trial and error. On the other hand, physics involves simulation and/or experimentation, perhaps in a chamber with gas, mixture, temperature, plasma, among other variables.
I think the strength of Japanese manufacturers is their persistence in developing lasting relationships with their customers to gain their trust and enhance their company's credibility. Japanese companies provide a similar level of services related to chemicals for photoresists, cleaning, or slurries as well as with reliable delivery, quality, and pricing, which all contribute to customers' trust and satisfaction. South Korea and Taiwan have a very palpable growth with Japan in the semiconductor business.
ASML, a Dutch company, developed extreme ultraviolet lithography machines that are revolutionizing the semiconductor industry. As a company catering to this industry that is growing exponentially each year, with your CMP (Chemical Mechanical Polishing) and dry vacuum pumps, how are you adapting to such developments?
Our CMP tools are used to planarize topography of patterned wafers, and the EUV lithography tools use our integrated dry vacuum pumps and gas abatement systems are Both EUV and CMP tools are very critical for advanced scaling of semiconductor manufacturing technology and building very complexed device structure. This development has to be progressed at a very high speed, and Ebara has been supporting our customers by providing solutions timely with our core competence, i.e. mechanical, vacuum, fluid dynamics, and other technologies, for more than 30 years. This also creates competitive and productive environment. That is the reason why customers welcome and support our efforts.
Due to the chip shortage in the world in the last two years, TEL is looking to open factories and facilities in Europe to cater to Brussel’s aim to grow Europe’s world market share for production from 10% to 20%. The US President, Joe Biden, has pledged to supply $52 billion in incentives to increase domestic production. As a company supplying technologies to these foundries, what is your plan to cater to these new regional demands to increase semiconductor production?
We are making efforts to enlighten the Japanese government about the benefits and extent of support that semiconductor manufacturers in Korea, China, and Taiwan have been receiving from their governments, such as waived taxes. In the video message that Prime Minister Kishida sent to SEMICON Japan last December, he expressed his desire to support Japan’s semiconductor industry because he believes it to be a critical industry for Japanese society. We are extremely curious as to how they are looking to give us assistance in the future.
One way we support the semiconductor manufacturing industry is through technology development. We call it ‘Challenge for Angstroms’, developing 1.4 nanometre or 14 angstroms by 2030. Technology development is mandatory for the competitiveness of our semiconductor manufacturing customers. Since they will need to supply equipment and capacity, possibly doubled or tripled by 2030, we are planning and preparing to take on that level of manufacturing demand. In fact, we are almost ready for dry vacuum pumps because we have built our new automated production fab, which should meet the market need by 2030.
We are also contemplating whether to expand somewhere else besides Taiwan for dry pumps. However, supply chain management is the most important factor to consider, so we are mainly procuring those parts through Japanese suppliers and working out how we can double or triple those materials to meet the future demand in this industry. The mass production for our CMP is in Kyushu, Kumamoto, and we have decided to build a new production fab for CMP next to the existing fab, considering to meet the future demand.
Ebara has three main business divisions: the Fluid Machinery & Systems Business; the Environmental Plants Business; and the Precision Machinery Business. Among these three divisions, which is your focus and which business division are you looking to increase sales revenue in the near future?
The water pump and semiconductor businesses we have identified as our focus for future growth. The first area is in standard water pumps. Our share in the domestic water-supply pumps market is about 30%, but our global share is not as high, which means that we still have a lot of room to grow. Worldwide population figures published by the UN estimate that an increase from 7 to 9 billion people will take place by 2040 and then a further increase to 11 billion by 2100. These predictions indicate the rising need for more water. The current population of Europe, including Russia, is one billion, and this will remain the same in 2100. The same is true for North and South America. However, according to this data, 4 to 5 billion people for Asia, and 1 to 4 billion for Africa. Without a doubt, those areas will need more water and air conditioning, but at the same time, there will be more plastic waste. We aim to respond to this need, to that end we are trying to build our sales and production bases in those areas. That is one of the reasons why we have acquired Vansan, the Turkish Pump Manufacturer, last April (2021). In addition to Turkey giving us access to Europe, the Middle East and Africa, manufacturing and several distribution channels across those areas have already been established. We are now in the process of customizing the integration. The second area for growth is the semiconductor area for which I have outlined my thoughts in the previous questions.
On the topic of water pumps, we know you installed a large high-pressure pump, with a capacity of 10,000 cubic meters of water per day, in Saudi Arabia to pump seawater to be desalinated and then transported as drinking water to the inland city of Medina – more than 600 kilometers away. This is one of many engineering feats that Ebara has accomplished, could you highlight some of the other key projects that you are most proud of as the President of Ebara?
As I have mentioned, we are working on strengthening our presence in Africa. Ebara Pumps Europe, based in Italy, manages the European and African regions. We supply our water pumps for the filtering system of Boreal Light, a German company. This year, we are hoping to establish our marketing office in Kenya. With the Waterkiosk® (see video below) we received an SDG award because we expect to deliver water to 600 million people by 2030. I think this is a meaningful project for us.
The key is to analyze the unique situation of each area and country and find a need and how to fulfill it at an affordable price. We will collaborate with any partner who will enable us to realize our goals in serving society. From a realistic perspective, we cannot improve the existing problems like civil unrest or hunger in those countries, but we still want to do what we can. We are trying to expand our activities in those countries where it is a huge burden for women and children to fetch water, this prevents them from going to school or doing other productive activities for society.
Carbon neutrality is a big part of your E-vision 2030. Ebara wants to focus on a hydrogen-based business project recently launched in August. You are involved in each stage including creation, transportation, and the final use of hydrogen. Can you give examples of key technologies that you are currently developing for sustainable hydrogen production?
Ebara Ube Process is a hydrogen production process we developed with Ube Chemicals in Japan which was delivered to Showa Denko's Kawasaki Plant. They have operated the system since 2003. It is the longest-lasting hydrogen generation from plastic waste in Japan, and they are using it for their chemical plant. We also have another process called ICFG® (Internally Circulating Fluidized-bed Gasifier), which uses sand as a medium to transfer the heat to the waste plastic. Gas is collected to be used as fuel or cooled down to a form of oil. We hope to expand our contribution in those areas with our original technologies in the future. We have already started feasibility testing with multiple partners in Japan. After we come up with real projects, we should be able to publish them ourselves or together with our partners. Japan's plastic waste is 8.5 million tons annually, but only 3% of this is currently chemically recycled. By 2050, we estimate plastic waste will reach 9 million tons annually, so our goal is to chemically recycle 30-40% of that waste.
Hydrogen is a great source of fuel because it is light, can be stored easily, is energy-dense, and does not have any direct emissions into the atmosphere, however, we have yet to see it widely adopted by various industries. In your opinion what barriers are in place that are preventing adoption? What obstacles need to be overcome for society to truly adopt it?
It is the cost of the entire supply chain. Currently, the cost to generate hydrogen is not as low as a society can accept. It is not affordable. Technology-wise, there are many ways to do it. In Europe, they are separating water into hydrogen and oxygen with electricity. Meanwhile, there is another technology that transforms ground coal into liquid hydrogen, and then ships it to other regions. It is a very complicated process because hydrogen has a boiling point of -253 Celsius which makes it difficult to handle. There is a need for more cost-effective hydrogen stations, hydrogen transportation, and generation in order for society accept hydrogen as a replacement to gasoline or LNG. This will not be easy, but difficult projects are opportunities for Ebara – easy projects make money but can be done by anybody.
Throughout our history we have provided solutions with pumps or in semiconductors with our CMP equipment, among many others, and all at a time when it was difficult in Japan to do so. Year after year, we have to overcome difficult obstacles. It requires a lot of our attention and utilization of our core competence, but doing this will satisfy the needs of our customers who will then continue to put their trust in Ebara. It will be the same scenario with hydrogen and space technologies. There is a lot of difficulties in dealing with hydrogen and rocket that takes us to space in terms of handling for cryogenic liquefied gas. For example, with the turbo pumps for supplying fluids to rocket engines, it is one of the most difficult technologies to get right when dealing with the rocket engine. The fluids such as liquefied hydrogen (LH2), liquefied methane (LCH4) and liquefied oxygen (LOX) will be used for the rocket engine propellant and they have flammable and extreme low temperature characteristics. Ebara has been consulting for a Japanese firm that is developing this technology because we have the turbo machinery. This is the reason why we collaborated with Muroran Institute of Technology and Interstellar Technologies. Interstellar Technologies has a plan to launch the rocket ZERO by the end of March of 2024 from Hokkaido, Tokachi. I am looking forward to that launch. It is just one project, but everyone is excited that that rocket will have the turbo pumps that Ebara has been involved for the development. Once Ebara can support this project, we will be able to support other rocket launches. There are different kinds of rockets, such as rockets launching small satellites or big rockets launching humans. We are now starting with small rockets which are also required in the space society.
Recently, Ebara made a one billion yen investment in one of Japan’s latest unicorns, Spiber. This is in addition to last year’s investments, such as in Real Tech Global which targets financing science tech start-ups and Regional Fish, a food technology company. What do these investments mean for Ebara? What expectations do you have from these investments?
We would like to use our core technology or core competence to contribute to society. I was introduced to Mr. Maru, Founder Group CEO of Leave a Nest, by a colleague. He asked me if I was interested in providing funds to Real Tech Global Fund. He is the founder of Real Tech Holdings in Japan, but he would like to expand globally, so he was looking for investors. His pitch to me was that he would like to be a supporter of start-up companies and people in Southeast Asia who are trying to tackle Deep Issues in society by using technology, science, and an engineering approach. They had a good idea, but they did not know how to materialize their idea into reality and manufacture products. He needed funds to do this. I completely agree with what he was trying to do, and we also like to support Southeast Asian countries by providing what Ebara has, so we invested. We sent one young employee to that fund to seek for future opportunities with start-up companies and determine if they require financial, engineering, or technical support. We might be able to collaborate with these start-up companies. We are looking for candidates to partner up with, and we like to understand the Deeper Issues Southeast Asian countries are facing. We can encourage our guy to come up with business plans as a result of his interaction with those start-up companies. These are the reasons we have decided to invest in Real Tech Global Fund.
You are a conglomerate company with more than 100 companies around the world with a widespread presence in Asia, China, Europe, and America. Which new regions are you looking into expanding your business internationally and how are you planning on doing that?
We are looking to expand to developing countries in Asia and Africa. We have already identified the growing markets for semiconductors which are in China, Taiwan, Korea, the US, and Europe. Our Precision Machinery Company will focus on these areas. Whichever areas our customers go, we will go. For developing countries, our approach is to place sales and service companies in these countries and use the connection we gained in the area to knock down manufacturing to shorten the delivery and lower the cost. Having large stocks of completed pumps is not economical, rather parts stocking and assembling as required to be more efficient. If it is practical and economical, we build a manufacturing company if it proves to be a better solution. It was a good decision for us to acquire companies like Vansan in Turkey last year and Thebe in Brazil about ten years ago, but it also takes a lot of effort because we must educate and train, it is often easier for us to invest in companies that we know are already good. For example, with Vansan, we already knew they had a good factory, the price was good, and they had good connections, so it was better for us to acquire it.
Congratulations on your company's 110-year anniversary this year. If we come back in 5 years, what goals and dreams for the company would you want to accomplish by then?
We would like to improve in two aspects of our business. First is the economic value and reach our goal of 10 billion USD in revenue and a 10% ROIC (return on invested capital). Another value we would like to improve is the social and environmental values. Improving these will raise our company value and our contribution to society. I would like for all our employees worldwide to enjoy working with Ebara. We would like to be the company where there is diversity and self-motivated employees. To get there in 2030, we need to overcome challenges.
My focus is on diversifying because only 5% of our managers are female. It is better than 2%, but we would like to have more. Our target is to have 30%, but we have yet to come up with real solutions or approaches on how to get there. I have launched a diversity project to realize the environment where employees can feel safe working at Ebara through life events like childbirth, raising children, or taking care of aged parents. They can do it without worrying about their career. If we realize our E-Vision goals, then workers will be happy in joining Ebara. I asked the entire Ebara Group if anybody would like to make this project happen and more than 40 people raised their hands. The group consisted of about half and half females and males from ages 20 through 50, and they were from various business units. In January this year, we launched a twenty people team on this project. I would like the approach not to be from the top management down. We have to understand the reality of working employees that have to go through childbirth and raise children while working. If people know that Ebara is a company that provides support for workers in these situations, then young workers will be happy to work at Ebara. I would like to hear from actual employees first before considering a system change in human resource.
Ebara is a manufacturer, so our basic approach is manufacturing products, improving the products, and selling them. But we would like to change the approach, I am telling the employees to first identify customers’ needs and see what it is that they are not happy with and then think about how to make the customers happier. This is the most important thing. There were Japanese companies who were first very successful at the introduction of TVs, videos, and cell phones, but they were later on replaced by other countries. I thought about why it happened. One reason is that Japanese companies do not pay so much attention to the real needs of each location. Japanese companies believe in their ability and think that what they make is the best in the world. Everybody is impressed at first, but if a product with similar functions, user-friendliness, but is culture-tailored arrives, over time it will be preferred to the Japanese one. This is what Japanese companies lack. They have good business volume only in Japan, and they just focus on the Japanese market which makes it hard to enter foreign markets. Such outcomes can happen to our pumps sooner or later if we do not do anything about it. I think we are lucky that pumps are products that are essential for society to support people’s very basic needs. However, we are even trying to innovate and be more efficient with, for example, IoT connected sensors and monitors, which should make our life more comfortable.