With a deft combination of functional material and film manufacturing, and home goods that strike the perfect balance between function and beauty, Iwatani Materials is eyeing the international market.
Could you give us a brief description of Iwatani’s history and how you came to be the company you are today?
Iwatani Corporation is our parent company, and was established in 1930. Iwatani Materials Corporation, which actually is 100% owned by Iwatani Corporation, is working particularly closely with the materials business.
It was established in 1954, so it's almost 70 years old. We deal mainly with “metal” and “plastic” products. There are approximately 300 employees in three divisions and 13 units. There are two additional sites abroad, which are total about 1,000 staff members working in China and Thailand. Iwatani Materials actually manufacturers various items, and we play a key role in interfacing with actual customers all over the world.
We'd like to use your point of view to help challenge the misperception that Japanese firms have lost their innovative or quality edge in the eyes of a Western readership. What is your perspective on what sets not only your company, but Japan, apart from its regional manufacturing competitors?
It's very difficult to judge and say that Japan competitiveness has declined on a global basis. It really depends on which market, but I can say for sure that Japan is still a leading country in the automotive market, optical equipment market as well as many others, such as the air conditioning market.
Competition in the market happens in any generation, but Japanese companies are particularly good at production control so we have a very high level of quality and stability to manufacture very high-quality products at any time, and we can deliver to the quickly to customers.
A company that continues growing has what we call a black box. Almost like a secret recipe or technology. That's one thing, and then the second thing is going abroad and doing business outside of Japan and expanding the business. That's two things that we believe give us an edge.
What has the impact of Japan’s ageing society been for your company? (Both in terms of challenges, and opportunities)
It is true that in the near future, Japanese society will rapidly age. However, older people over 60 years old are going to continue in the workforce, and there is also more opportunity for women to take an active role in the workplace, so I don't think the labor shortage will happen all at once.
However, it is true that actual factory workers, like operators, require a lot of experience and expertise, and there might be a concern that there is a labor shortage on that specific job.
In terms of Iwatani Materials Corporation, we have two production sites outside of Japan which are in China and Thailand, so we're trying to expand our ability to manufacture and keep producing our products in the future.
On the other hand, with the market potential in Japan changing with the aging society, we think that consumer trends will become divided into two directions. One is the high-priced market and the second one is the low-priced market; our target would be to go for the higher priced market.
A symptom of this aging society, as you mentioned, has been a shrinking domestic market in Japan. As a result, many firms are looking overseas to compensate for a smaller consumer base at home. Many places overseas certainly have an appetite for high quality, well manufactured Japanese products. I'd like to know a little more about your experience selling and operating in overseas markets. Are you looking to grow your overseas sales?
Yes, of course we are looking into expanding sales outside of Japan as well. In Japan, we're saying that Japanese society is aging with less population, but there is still demand inside Japan as well, so we will focus on the Japanese market, but at the same time, good products can be sold anywhere. It doesn't matter what country, so our goal is to make a good product that could be sold in any area.
Where things get a bit fun, at least for me personally, is to actually talk about some of the products themselves. I think we can start with the “I’m D” concept, which is a design project about functional daily necessities. I was hoping you could introduce us to the “I’m D” concept, and share some of your unique products that you're particularly proud of.
It's basically about creating beautiful and highly functional designed products. The brand concept is for the customer to say, “Oh, this is exactly what I was looking for!”. In these kinds of industries in general, manufacturers manufacture something that is easier for them to make, easier to deliver, or easier to display in stores. For the “I’m D” products, we consider what the customers are actually looking for, rather than what’s easiest for us to produce.
We sell for general customers, and many of these products are sold to hotels and resorts too.
Do you have a sentimental favorite as the president?
The heat-resistant plastic bag ”I-Wrap” that we have been selling since 1976 was sold only in limited areas in Japan, but in recent years, it has become popular all over Japan through SNS and other means.
Do you know what a “Yutampo” is? Yutampo is a product that has been around in Japan since ancient times are actually used to heat yourself up when you sleep at night. We have been selling them for a long time.
This is a new model that came this year, the “ECOWARMER”. By using this product you can minimize the heating that you use in your home, particularly while asleep. The product itself is also environmentally friendly, so it contributes to a sustainable society
Are you looking to sell it overseas as well, or is it just intended for the Japanese market?
The “ECOWARMER” is our latest, and most high-end version. It was released this winter.
The outside cover of the “ECOWARMER” is made from a composite material of Washi and fiber, and the container is actually different from existing products, using special raw materials. If you touch it, and you feel the strength and quality of the material, and if you put hot water on it , it gets softer.
Right now, we have a limited production capacity, so we only sell it inside Japan, but we will try to expand the capacity.
In addition, we aim to be the top in the hot water bottle market as our own brand.
Another product we wanted to introduce today is called GOURLAB. It's a cooking ware for microwaves, which has very high temperature resistance, up to 230 degrees Celsius, which is also used in components for the automotive industry as well.
We use it for cooking ware because we wanted to make something that could be used not just to heat up food, but to actually cook food in the microwave, so we wanted to have sales not only in Japan but abroad as well. We are selling it in the US and China via the internet already. It was invented by the employees at Iwatani Materials. You can use it in the oven as well, not only in the microwave.
Are there any other new products that are currently in development, or you expect to be released soon, that you can share any details about with us today? If you're unable to share details, then perhaps an alternative question can be, can you tell us about the direction of your R&D strategy rather than a specific answer?
One thing is that we're trying to make a bigger size of the GOURLAB product. That's one thing that we're working on. We said we're trying to make it bigger, it’s a lot more complicated than just scaling up the size. It's about how microwaves heat things unevenly so it's a very difficult, delicate thing, and the team is still working on it. Every day they’re cooking, trying to make it better.
The second thing is an initiative for environmental resin products in collaboration with the Iwatani Group. We procure materials form the Iwatani Group, which is expanding globally, and manufacture products using plant-derived bio-resin, which is attracting attention as an environmental material. As we continue to sell plastic products in the future, we will also work on product development using environmentally friendly materials.
You mentioned collaborating, or partnerships with outside entities, outside partners. Have you ever had the experience of collaborating with an overseas company, and if not, are you interested in attracting or working with overseas partners?
We are collaborating with other companies, but we don't have any particular collaboration with an overseas company right now. We collaborate with a Japanese university, Japanese design company or a technical venture company.
We cannot tell you the exact university name, but we are working with a certain university to develop an exciting new product.
Another product I’d like to highlight are our films for agricultural use.
This is magical film. By using this film, the sweet potato fields that had suffered from crop failures were revived. It is a special film the maximizes the effectiveness of soil disinfectants used in fields where crop yields have fallen due to disease, contributing to the improvement of agricultural fields nationwide where disease has not subsided.
Farmers in Shikoku produce very famous Japanese sweet potatoes called Naruto Kintoki, and most of those farmers use our films.
One of our strengths is that our production is not as big as in larger companies, so we can do various production requests. We don't have a very big R&D center, so engineers who’ve worked on this film for 40 years still try new recipes every day and then produce the product. I think that's also a very unique thing about Japanese midsize companies.
Could you tell us more about your international development plans and strategy? Are there any new markets that you're looking to enter into, and how would you go about doing so?
In 1990, when the Japanese air conditioning companies started production outside of Japan, we went with them to start production. We have skilled employee at the overseas factories, and we consider these to be Japanese factories rather than overseas factories.
We have production sites in Japan, China and Thailand. We produce products of exactly the same quality.
We have our own production methods, so we can deliver the exact same product to the customer from any production site with a short delivery time. Especially this year when Shanghai was locked down, our customers were really happy that we had this kind of production method from a BCP point of view.
Of course, we would like to expand the production side overseas as well. This year, we actually expanded the production capacity in Thailand by1.5 times. As for the sales side, we would also like to expand it overseas and sell on a global scale.
Is there any region that you would like to expand into? Is there any region that you see has the most potential for your products?
The US and China, but we have difficult situation in China. We will continue to make efforts so that customers can understand the great price and great quality.
How would you expand in these markets? Are you looking for distributors?
We sell products on the internet to customers in the US, so we will try to expand the sales of this product in the US. When customers in the US say, “Where’s Iwatani Materials in America? We want to reach out to them”, then we will consider establishing an office there.
Let's say we come back to interview you again in two years' time for your company’s 70th anniversary. What would you like to tell us about your goals and dreams for the company in that timeframe? What would you like to have achieved by then?
Two years is very soon. Iwatani Materials should continuously develop, so our goal is to have sustainable innovation. Every year, we have long term goals and actually Iwatani Group will be 100 years old in 2030, and our goal is for our sales revenue to double and our profit to triple by that time.
The most important thing, I think, is that all the employees should be happy and eager to work on their assignments. Iwatani’s founder also believed the same thing. Iwatani Materials is trying to become a creative company through our uniqueness, originality, and our own products, which would end up being sustainable.
I was an American football player in my school days. Through sports, I obtained experience of being part of an organization and facing difficulties day by day whilst trying to improve. Sometimes it would take a long time. This is the same as in business. Sometimes I face difficulties and many problems, so I know not to worry unduly.