The quality cotton company embracing sustainability and the latest technology

Over the past 20 to 30 years, regional manufacturers in countries with a lower cost of production have been able to replicate certain Japanese products. However, Japanese firms, both large and chuken kogyos (Japanese SMEs), maintain leadership in certain fields. How are Japanese firms able to maintain their competitiveness?

I believe the primary reason is quality. Manufacturers accept a lower price only if customers do not require the highest level of quality. For example, North American drug stores such as Walgreens or CVS sell large quantities of cosmetic cotton at very low prices, therefore, Japanese products cannot compete with them. I think Japanese products are suited for customers who demand and are willing to pay for high-quality products, therefore Japanese firms tend to target niche markets. However, companies in emerging countries that have been studying, learning, and trying to improve the quality of their products are also entering niche markets. 

Like many advanced economies in the world, Japan is facing a strong demographic decline, which creates a labor crisis, meaning that it is harder for seasoned workers to pass their knowledge down to the younger generation, and a shrinking domestic market. How are these trends affecting your company?

As early as 40 years ago, my father, who was the previous president, was aware that Japan’s population would continue to decrease, so we started implementing our solution by opening our factory in China. After the height of the bubble economy in Japan, people started investing more in living a meaningful life than looking for a job in a factory, therefore not so many people were available to work in factories. Not to mention the difficulties that older workers face when working in factories, as they’re more limited in carrying out tasks that require precision, such as the visual inspection of products. With these factors in mind, we were not certain we could maintain our high-quality production relying on elderly workers and realized that monozukuri (craftsmanship) would become increasingly difficult to sustain in Japan.

When we moved our production to China, we faced many adversities. For example, there was a significant difference in quality criteria. However, over time we managed to overcome such differences and ensure that our Chinese production conforms to the quality standards we require. To standardize the quality of our products, we conduct checks based on strict standards and criteria; one of these is the ISO system, which allows us to effortlessly standardize quality. Another is our manufacturing standards in a fully GMP-compliant environment, which keeps our quality stable at a high level.

What products most represent Suzuran Medical and its long history? Looking to the future, what products would you like to invest in?

Our company was founded in 1832, and we have always dealt with cotton. We started manufacturing cotton bedding, and our founder developed a special automatic machine for bedding production, which was even exhibited in the Parisian Exposition Universelle. Our company’s representative products have changed over time. As a result of Japan’s involvement in wars and military conflicts, our representative product changed from cotton bedding to absorbent cotton for medical use, which was in high demand at certain points of our history.

Subsequently, the company pioneered the production of sanitary napkins in the industry. We then returned to the production of medical-use absorbent cotton and medical-use gauze. Then, we focused on cosmetic cotton pads and baby products such as wipes and bath towels. Our main products are currently absorbent cotton and gauze that are used in hospitals, clinics, and drugstores; we have an over 50% market share domestically for these products. We are also a pioneer in the Chinese cosmetic cotton market with a 40% share. And last year we introduced the world's fastest cotton spunlace production line, the most advanced in the industry, and we intend to further expand our market share, including globally.

Which foreign markets are you prioritizing and what is your strategy for overseas expansion?

In addition to mainland China, where we have already captured the market, we, like many other companies, are targeting countries with growing productive populations in Southeast Asia, Africa, and India, and have begun sales activities in Europe and North America. Our focus is currently on Southeast Asia and India, but unfortunately our efforts have been affected by the COVID-19 pandemic. Our goal is to enter these markets and distribute our products locally. To do this, we plan to implement the Value Proposition Canvas to identify consumers’ needs in those areas and ensure that our products and services cater to those needs. We also need to get to know our competitors to be able to offer something unique to our consumers. After gathering all this information, we will start production.

Also, as we have learned over our 190-year history, we hope to move closer to our value proposition by developing products that eliminate trade-offs. In the case of cosmetic cotton pads, cotton absorbs water or liquid, but for cosmetic use, this characteristic is not necessary because the cotton should not absorb too much lotion or cosmetics to be applied to the skin. We have a history of using special technology to change the fibers of the cotton, resulting in a cosmetic pad made of natural cotton that does not soak up too much of the cosmetics.

Our main products vary depending on the country or region. We have medical products in Japan, cosmetics in China, and baby products in Hong Kong. We respond to our customers’ needs and provide what they need most.  And as I mentioned earlier, demand for cotton spun lace, the world's most advanced technology, is growing rapidly worldwide.

Our management philosophy is "Consumer Benefit Proposition”. In our company, not only employees in the sales and manufacturing departments, but also those in operations, human resources, and finance are constantly responding to the needs of our customers and providing them with what they need most.

If we were to come back and interview you again on the last day of your presidency, what dreams or goals would you like to have achieved by then?

As I explained earlier, we decided to go to China because many of our employees in Japan were growing old, which made it difficult to ensure our products’ quality and safety. However, China’s present condition is very similar to that of Japan 30 years ago. Economic growth has resulted in more people not wanting to work in factories. Hence, we are trying to implement more automation in our factories to be less dependent on human power. In fact, I believe our recently inaugurated factory in Suzhou, China, is the world’s most advanced automated factory in our industry. For example, materials that come from our Vietnam base are automatically loaded into the warehouse. A machine then transports the materials to the production facilities, and finished products are sent back to the warehouse. In addition, assembly and inspection work, which used to be performed by humans, is now being performed by machines.

Furthermore, we would like to make the production of cotton in plants, rather than fields, a reality. After achieving that, I can retire and pursue my dream of growing organic cotton in Texas.