With its years of experience and technical expertise, Daiwa Can Company is supplying Japan’s major beverage manufacturers with top quality containers and packaging solutions with a creative and value-added approach. In this interview, president, Hirohisa Yamaguchi, explains how Daiwa Can has been a leader in the development of highly functional, high-performing containers that are pleasing to the eye, with its revolutionary products used in a broad range of industries, including food, beverage and beauty care, among others.
Traditionally Japanese manufacturing involves relentless pursuit for perfection and this was defined as monozukuri, but nowadays the modern version of monozukuri is responding to customers’ requests and providing added value to the products. How do you define monozukuri and what is the essence behind it?
The essence of monozukuri is to be devoted to producing products of high quality, which is an indispensable trait of Japanese companies including Daiwa Can Company. This core essence of monozukuri is essential and indispensable for the existence of this company. In order for us to further improve our quality, and to produce products which can enrich people’s lives, it is essential to continue the development of new technologies and also improve our production engineering.
Japan is a country with a dwindling population, by 2050 the population is expected to be less than 100 million. For this very reason Japan has to adopt innovative technologies such as AI and IoT to ensure the quality of the products are still taking place at factories. We know you are actively adopting new technologies such as your partnership with Automagi to create an AI system that judges the corrosion resistance of the can. Can you tell us more about the new technologies you are adopting?
It is quite difficult to answer about “new technologies” because the definition is broad, and the items which come to mind from this word are wide in variety. The AI system that judges whether the contents can be packed in a can without corrosion is a recent development, but for over 30 years we have been constantly adopting new technologies to develop inspection machines for our production lines in order to maintain production quality. We know that in addition to Japan’s declining demography, the business environment is also vulnerable to sudden change, as we have seen with the rapid global spread of COVID-19. Through the use of innovative technologies, we need to be able to cope with such changes, and especially in Japan, as it becomes more and more difficult to obtain new employees, we need to find areas where human labor can be substituted to some extent.
I want to get your take on the introduction of robotics in the factory. When we spoke with Dr. Inaba of Fanuc, he said that robotics or AI often get the bad press because for many people it is replacing human labor. Nevertheless, it is an opportunity of any employee to move into sales, marketing, and other positions in the company. What is your take on the introduction of robotics and automation? Does it make people lose their jobs or does it bring advantages in terms of upscaling?
The implementation of robotics and automation requires a high level of decision making and there are many factors that need to be considered. On our part, I believe we need to find the balance between analog and digital. The further introduction of robots and AI is inevitable, and one aspect is that we will need to hire and train personnel who have knowledge in this field. Of course automation may lead to manual labor being replaced by machines to a certain extent, but on the other hand, the quality of monotonous labor and work which requires precision such as inspection will be improved. Work which can only be done by human beings will definitely remain, and so it is important to maintain the balance of analog and digital through reallocation of personnel.
You are a comprehensive manufacturer: you plan, design, manufacture, and sell cans and plastic containers for food and drink beverages; you also make packaging for cosmetics and machinery as well. Which of these business segments is your main focus? Which one do you see to have the most growth potential moving forward?
When we look at Daiwa’s business, metal packaging is the largest, and the plastic-related business is still minor. However, I expect the sales from our plastic containers to grow and become one of the business pillars to support Daiwa. We know that the environmental issue makes the situation difficult, but on the other hand, sanitizer and soap containers are hot commodities right now due to the COVID-19 situation so there is potential.
Can you talk to us about the synergy you have been able to develop from being a steel and aluminum can manufacturer for many years and now as a plastic manufacturer?
The production know-how that we have accumulated over many years of this company’s existence as a metal packaging manufacturer is also utilized in the manufacturing of plastic containers. For example, the essence of metal packaging business is how much production can be achieved efficiently in a given amount of time. The on-site know-how which realizes this is also being utilized for the efficient production of our plastic products.
When it comes to packaging we all know that packaging firms are always in the spotlight. In order to help reduce the pollution in the environment, in the UK we saw a plastic ban introduced in 2015. Two years ago Japan basically stopped handing out plastic bags in all convenient stores. There has been an increasing concern on the impact of packaging in the environment. You created a product called E-conscious Steel Can in 2010, can you tell us more about your packaging and how you were making it more eco-friendly? What technologies have you developed in this respect?
This again, is not a simple question. With regards to plastic, it is crucial to create plastic packaging which is friendly to the environment. This means product development from various viewpoints, including recycling, reusing and reducing of material. We are already selling plastic products using plant derived resin, and as a company dealing with plastic products, are putting more focus on environmental measures by setting up a department to study various recycling methods.
Metal containers, on the other hand, already have a high recycling rate, both for aluminum and steel. Both are handled as valuable raw material, and recycling of these items is firmly established as a business. Further efforts will be continued to reduce material usage. Furthermore, we plan to raise the usage of recycled material, and also study the use of green energy.
I would like you to talk about the ability of your packaging to create fresh food that lasts longer. The can is a wonderful device which is able to seal a product inside, preserve it, and prevent food wastage. Aseptic Filling Methods have been developed which allows the preservation of food without changing the taste. Kindly tell us more about the methods used to prolong the longevity of the food inside.
Canning of food is a technology in which food is packed and sealed in a metal container and sterilized under high temperature and pressure to prevent the deterioration of the contents. The basic technology has been established over 200 years ago, and has been used to preserve food ever since. The Aseptic Filling System is a system in which the contents are sterilized prior to filling and then filled and sealed into a container in a closed aseptic environment. This allows the contents to be preserved while keeping the change in taste and flavor to a minimum. While various technologies exist, our mission is to offer new solutions to the consumer by developing containers which are safer, more convenient and can preserve contents longer.
R&D is vital in any industry and Japan is famous for its level of R&D spending, up to 3% of GDP goes towards it. Your company is the first one to introduce cans for coffee, and more recently you are the first one to introduce the resealable can. Kindly tell us more about your R&D strategy and any particular products that you would like to share with us.
We are constantly looking for ways to extend the longevity of the products with safety and reliability as the utmost priority, and the technology used for this is widespread, ranging from the very basic to the highly advanced. We develop our technology to address the rapidly changing needs of the market such as ease of use or the impact on the environment. One item which we are especially focusing on is laminated material.
A vital process in making the aluminum beverage can is the ironing process. In order to relieve the stress from the friction which occurs during the ironing, lubricants are used. In order to wash away the lubricant a vast amount of water is necessary. In the case of laminated material, in which PET film is adhered to an aluminum plate, the film acts as a replacement for the lubricant, making the lubricants and the water washing process unnecessary. Daiwa’s New Bottle Can is an example of a product which applies laminated material. This technology greatly reduces CO2 emissions, and decreases the impact to the environment while providing convenience to the customer.
For many companies co-creation is a huge part of R&D efforts to create new technologies. How important is co-creation in your company and are you currently looking for co-creation partners?
We are always open to the possibility of having a co-creation partners, both for domestic and overseas businesses. Needless to say, our business area requires a great deal of technical development and know-how. Until recently, almost all development had been done in-house or within our group companies, but we believe it important to collaborate with a reliable partner in areas which are not strong.
You have established a company in the US, but also have manufacturing capabilities in Taiwan, an office in South Korea, and a joint venture company in China. Can you tell us the benefits of having these different international locations?
We have been present in the US and Taiwan for quite a long time now, and these companies are performing well and contributing greatly to the business results of the Daiwa Group. In China, where the beverage market is rapidly growing, we have started a joint venture with a trustworthy partner to produce the environmentally friendly New Bottle Can, and have laid the cornerstone for the development of the re-sealable can market in this area. We believe that there is still great potential to expand in the US, ASEAN, and Europe. In order to strengthen Daiwa’s overseas business, it is essential to continue our overseas business development.
When looking beyond stabilizing our overseas business base, my wish is to be able to contribute to society also in the overseas markets. For example, contributing to the reduction of food loss in developing nations.
What method would you implement if you plan to penetrate more markets overseas? Would it be a joint-venture, M&A, establish another factory or a sales office?
We are open-minded to all options. Regardless of the method we use, if we are to work with a partner, mutual trust and respect is highly important. So far, we have found reliable partners with which we have been able to build a strong relationship based on mutual trust, and this will be the key for all projects which will follow. In our first years of overseas expansion, there was a period in which we struggled to have our technology understood, and to win the respect of our partners. Finding an ideal partner is extremely difficult, and determining a partner who can achieve the best synergies is strategically most important with regards the overseas market.
This year your company is celebrating its 82nd anniversary. Imagine we come back to interview you again for your 90th anniversary, what would you like to tell us? What are your dreams for the company and what would you like to have accomplished by then?
There are numerous companies in Japan that have already reached 100 years of existence, and there are also many companies which are about to reach 100 years. To continue a company for a century is not an easy task, and I believe that it is one of traits of a succeeding business. First and foremost, I would like to grow the business so that we are able to reach the milestone of 100 years. From that point begins our new history towards the next 100 years.
For this, we plan to strengthen our personnel and financial assets. Especially on the personnel side, we need to vitalize our employee base, increase technical abilities, and implement new ideas and to utilize our accumulated know-how in the best way possible. In the 90 year interview, I would like to be able to present an even stronger and more solid Daiwa, with the capability to grow for another 100 years.