Since 1952, Kyoritsu Chemical-Check Lab has been supporting aquatic conservation through its provision of simplified water quality checkers to the world. Designed to be one of the world’s simplest water analysis tools, PACKTEST was launched in 1973 and is Kyoritsu’s flagship product. We spoke to president Shuntaro Okauchi to learn more about the PACKTEST and its unique properties.
In recent decades, we have seen regional manufacturers in countries with emerging economies replicate the products and manufacturing processes of advanced economies. Japanese companies, however, have maintained a large market share in niche business-to-business (B2B) fields with their creativity and superior technologies. How have Japanese companies maintained their market share despite the stiff competition?
It is getting harder to introduce Japanese products in the market now due to stiff price competition from regional manufacturers. Japanese companies are able to maintain a large market share through their unique technologies and their accumulated know-how or expertise in their specific fields. In the 70s and 80s, Japan tried to reach the same level of economic development as the US and European countries, which resulted in the production of excellent products in electronics, automotive, and game consoles. This has not been true for the past years, though. For example, the television right in front of us is a Toshiba brand, but all the internal components are manufactured by a Chinese company called Hisense. Several component manufacturers are now switching production to countries with cheaper labor costs, a trend that Japanese companies need to consider. Despite these changes, however, Japanese companies still have an advantage in terms of making quality products and having an exceptional manufacturing process.
Japan is the oldest society today. It is expected that in the next 15 years, a third of the Japanese population will be over the age of 65. This creates two big challenges. From a manufacturing standpoint, it creates a labor crisis and secondly, a shrinking domestic market. How is your firm adapting to these two challenges posed by Japan's unique demographic situation?
Ms. Quin: The company usually employs new workers at the beginning of the fiscal year, around April. One of the company’s approaches to face the aging society is changing people’s perceptions to attract young graduates to come and work for the company, which is one of the reasons we moved to this industrial area. We wanted to establish a good reputation for the company; the location, working environment, and atmosphere. Unfortunately, many people, including the young generation, still have stereotypes about small and medium-sized manufacturers and that factories in this industrial area are very old, not up-to-date, and offer a cluttered working environment. Our old location was definitely clean and safe, but perhaps because of the stereotype, our site was not so appealing. Many people wanted to work in a clean and safe, office-type working environment. Now, moving to this location dedicated to the laboratory and R&D, this manufacturing facility helps us to break away from people’s stereotypes. We wanted to show that our facility provides a different working environment from what people would expect. Our head office is here on the basement floor, and we have a factory and lab on the third floor of this building.
Even elementary school students now have access to smartphones and other smart technologies. We are keen on introducing our product PACKTEST to everyone. Some might think that we would need to simplify the PACKTEST to make it easier for students to use them, but since we trust them and their ability, we did not do that. Local governments and schools introduce PACKTEST to their operations and curriculums, respectively, due to its unique characteristics: simple and easy to use for anyone, including those with no special skills in analysis or students. Since our company helps and assists local governments and teachers/parents, we keep good relationships with them as well. The idea is to get young ones acquainted with basic water treatment (basics of how substances are dissolved in water/inorganic chemistry) and introduce how to test for water alkalinity and acidity.
Your flagship product was launched in 1973. It was designed to be one of the world's simplest water analysis tools. In time, its application grew. You have diversified in education, wastewater management, and quality control for local factories and offices. Can you tell us more about your PACKTEST and how it has evolved since its creation?
The PACKTEST is a polyethylene tube that contains a reagent for measuring a specific analyte. Pull the line out and draw in the sample water into the tube, like you are using a dropper, then mix the reagent and water inside the tube. After the designated reaction time, compare the color with the Standard Color sheet. The nearest color indicates the value in mg/L.
(PACKTEST PHOTO HERE)
It is very simple, quick, and easy to use. Reaction times differ. This one is for ten seconds. The longest one can take up to thirty minutes, but it is quite rare. Reaction time normally only takes less than 5 minutes. Official methods involve a complicated process, and it takes a very long time before the results are available. With the PACKTEST, you just take a water sample and mix it in the tube, wait, compare the color and then get the results. It virtually eliminates test preparation and makes water quality checks easier. This is why everyone can use it, including elementary students. The PACKTEST only gives an approximate value. It has lower accuracy compared to official methods, but it is adopted in many fields. If accurate results are required, water samples are sent to the laboratory for testing.
Can you walk us through the evolution of your PACKTEST?
For our PACKTEST, you can see the available analytes, measuring range, and reaction time here. The reaction time depends on what is being measured. It is not one reagent for everything. When we go to exhibitions, we have received many reactions where people expect that one PACKTEST can check for everything. Our original product when we started in 1952 was a pH test foil.
In 1973, rapid economic growth caused water contamination, which increased the demand for rapid water analysis tests. Many water sources were contaminated, but checking water quality with an official method took time. This is how our PACKTEST was born. It started with just checking the water pH with foil, then test paper to check for heavy metals. Then the PACKTEST came out. We started with 10 different analytes. Now, we have about 70. It had the same shape as what we have now. It was a polyethylene tube with the reagent inside and was closed on both sides. Users had to puncture it with a pin. It can be dangerous for users, especially for kids. Apart from that, users had to carry around a pin. It was in 2001 when we changed to the current style where we inserted a line to open the aperture. The style has not been changed for many years, but we have more variety of analytes for PACKTESTs now. It is now used in many industries, apart from wastewater. It is used in environmental studies, school research, process management, and fish farms. We have a wide variety of customers. Although, the wastewater industry remains our biggest client.
See https://en.kyoritsu-lab.co.jp/packtest/story for more details.
When we prepared for this interview, we checked your PACKTEST, including competing products from other companies. The result was different reaction times and sizes. Your PACKTEST was one of the most compact with a fast reaction time. How does your product differ from other products out there, and what are its advantages?
Our product is considered a simplified water analysis tool. There are a lot of different water analysis instruments out there, but when it comes down to a simplified version, there are only a few. We also have a wide selection of analytes. Even though it is a simplified version, we have around 70 different kinds of analytes to choose from. Our products are safe. Anyone can use our products because our reagents do not contain toxic or hazardous materials. A special license and a laboratory facility are required for handling hazardous materials. Disposing of them can also be complicated and difficult for many people. Some simplified water analysis tools use hazardous materials. They might have faster reaction times, stronger reactions, and are more accurate, but there are only a very limited number of people who can handle them. This is what sets us apart from others.
Usually, with any type of chemical testing equipment, the reagents utilized can carry toxic substances. Most testing is conducted in facilities, but your company deals with fish farming, schools, etc. which raises the issues of safety and disposability. How are you making your products safe and easily disposable?
Environmental research which has been going on for the past ten years. The National Environment Day is a national event in Japan where everyone, including kids, goes out to the nearest rivers and lakes to check water contamination levels. Most of those who take part are normal citizens who are not familiar with water analysis.
As you can see, anybody can use PACKTEST. We provide thousands of PACKTEST for this national event. It will be in June, so we are now preparing for it. Although our products are not reusable, they are easy to handle. Users have to be careful touching the reagents because they could be acidic or alkalinity. It will be uncomfortable if it gets in contact with their face and eyes. We have labeled our products with warnings to avoid this. Nevertheless, our products are not toxic or hazardous. Disposal is also an issue because each local government has different regulations compared to abroad. Once it leaves Japan, it will have a completely different disposal regulation. We usually encourage users to comply with their own local governments in disposing of our products. We disclose what the products are made of to guide users on proper disposal. If their sample water contains toxic materials, they also have to check their local regulations and follow disposal accordingly.
One of the interesting developments of your PACKTEST is the launch of the SMART PACKTEST. The results can be directly communicated with a device connected to the internet, such as a smartphone or a computer. Can you tell us how digital technologies are shaping the development of PACKTESTS?
DIGITAL PACKTEST-MULTI SP was developed to have more precise measurements and data taken can be transmitted anywhere right away. It is a rapid and convenient way of conducting full-scale water or substance analysis. PACKTEST is visual colorimetry, so result can be obtained right away by comparing color development inside the tube to the provided Standard Color Sheet. However, there can be differences in results depending on the person who checks or the lighting on where it is checked. Our instruments quantify the color development of PACKTEST rather than making the result more precise. When we first started this digital instrument, many were worried about the results being an approximation. We were a little afraid. But in the end, everyone was accepting and thought that it was pretty convenient and helpful. Our latest DIGITAL PACKTEST can also store data. We try to make our products very convenient for customers.
In relation to SMART PACKTEST: We developed the instruments to quantify the result of PACKTEST, and we keep striving to make our products easier, more convenient to use and fit for customers’ needs. Since DX is getting advanced and people find it more convenient using their mobile device, we came to develop the iPhone app: SMART PACKTEST, launched April 2020.
Looking towards the future, are there new areas of development that you have identified for future PACKTESTs?
We still have a lot of potential for growth for our product lineup in many industries. Because water is a raw material that is vital for life, it is crucial to be able to test for water contamination. In some areas with limited water and energy supplies, it can be dangerous or difficult for people to conduct tests in the field. This is where our PACKTESTs come in, And it does not require electricity and is convenient to carry around. Our PACKTESTS help many people to check for water contamination without having to bring a lot of equipment.
For future product development, are you considering working with ODAs (Official Development Assistance) to help these developing countries with their water contamination problems?
We have already been approached by JICA with ODA projects in Africa and many other areas. Recently, they wanted to know more details about our PACKTEST and our products. There are so many areas where there is such a need for checking water quality. It is not just countries in Africa, but also in Asia. The problem is corruption. When our products are introduced to these countries, no one can give us a guarantee that the products will be protected. There are risks involved. Our products also have expiration dates which need to be considered.
We saw in our research that you have accredited distributors in seven countries that are mainly focused on Asia, like Taiwan and South Korea. Looking at the future, what regions and markets will you prioritize for your international expansion, and can you tell us a bit more about your international business strategy?
Currently, 90% of our export business goes to China, and the rest is to nearby countries in Southeast Asia like Vietnam and Indonesia, where we want to introduce our products to. We also have inquiries from Africa, but the challenge with that is the delivery cost. Our products are quite cheap compared to others in the market, but shipment from Japan to distant locations is not cost-effective. Therefore, we need more time for finding and building relationships with local potential dealers and need to consider good strategies for markets that are far from Japan at the moment.
If we come back in five years, what hopes and dreams for the company would you like to have accomplished by then?
Our philosophy for our products has always been making simple water analyzers for anyone and that can be used anywhere. There is no need for us to introduce a more sophisticated device. We would like to continue this philosophy and expand it in the next five years. We want to help more people have access to our PACKTEST and assist in improving people's lives and saving the environment. Furthermore, we want to be able to produce about 200 million PACKTESTs.
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