In Japan, Johkasou is a facility that treats wastewater before discharging it safely and cleanly back into nature. Johkasou products are approved by the government of Japan and are extensively deployed across the country as part of government policy. As a matter of fact, about 10% of sewage in Japan is treated through Johkasou systems, with over 8 million running successfully in Japan. Daiki Axis is a leading provider of Johkasou systems and now aims to expand on its success in Japan by providing efficient and made-to-order wastewater treatment solutions to Southeast Asia and other emerging markets, as president Hiroshi Ogame discusses in this interview. “Our main priority being to contribute to sanitation and treatment of wastewater”.
In the last 25 years, Japan has seen the rise of regional competitors who have replicated the Japanese monozukuri process at lower costs, providing the world with cheaper products with lower quality. What must Japanese companies do to overcome this competition?
When it comes to wastewater treatment technology, Johkasou is unique to Japan.
However, since it is easy to imitate the technology, there is a fear that this business can be recreated by other companies. At the moment, there are already 11 local companies in Indonesia which have done so. Products are offered at a much lower price, but have poor quality and they may not work as well as Johkasou. We are confident of the quality of Johkasou that we manufacture using Japanese technology. Quality is definitely our strength in this industry.
The quality of wastewater inflow to Johkasou is usually not constant. Therefore, regular maintenance is essential to treat such wastewater. For this reason, we provide maintenance services in Japan. By providing maintenance services even after sales, we maintain long-term contact with our customers, which leads to proposals for facility renovations.
In the domestic market, it is already an industry standard to provide maintenance and it is required to meet the standards and regulations of the government here in Japan. However, these kinds of maintenance services are not something that is yet to become the norm in various overseas markets. That is something we are continuing to roll out slowly by conducting surveys and expanding our promotion and marketing in that field.
Johkasou is not known in overseas markets. Therefore, it starts with promoting its many qualities. It is less expensive than public sewerage improvement, and its system is capable of treating wastewater onsite on a regional basis. Also, we promote it to governments to regulate the maintenance by law and support the rolling out of this system.
One of the Sustainable Development Goals is providing sanitation and clean water for all, but globally, 80 % of wastewater flows back into the environment, with only 1 % of fresh water being easily available. What is your approach to solving this challenge?
Other than wastewater treatment systems, we have ambitiously engaged in the creation of new business ventures, such as undertaking projects to make groundwater potable and residential drinking water projects. Thus we have both technologies, a wastewater treatment system and a system that can provide potable water. Towards the future, we would like to build this integrated system to contribute to environmental sustainability and to use it as a source of renewable energy.
A good example of where our technologies have already been integrated and implemented into society is in parks. In India, groundwater is not allowed to be used for sprinkling water in parks due to the declining groundwater levels. In response to this, we provide a system that can be used for water sprinkling by purifying wastewater using our technology.
You have four divisions, with environmental treatment, ground water & drinking systems, housing equipment, renewable energy and household drinking water. Which is your current focus and which has the most potential for future growth?
We believe that all the businesses we conduct have great growth potential. In order to expand our business and contribute to environmental issues around the world, we would like to solidify our domestic business base sufficiently in Japan.
Your unique chemical free injection method is effective at removing ammonia, as well as iron and manganese in groundwater. What makes your filtration method superior to traditional ones?
In domestic wastewater treatment in Japan, we have Johkasou models for a wide range of applications, from small to large-scale and from individual homes to housing & community complexes. Also, for industrial wastewater treatment, transporting factory-manufactured equipment to the site and installing it is by far the most advantageous in terms of both cost and delivery time compared with constructing from scratch on site.
As for treatment systems, in addition to organic treatment that purifies with the power of microorganisms, we also possess inorganic treatment technology that uses chemicals.
Providing such a wide range of services based on the needs and what the original kind of water we are treating is one of our strengths.
You have developed a remote operating system which maintains facilities for 24 hours a day all, year-round and can even detect early signs of an emergency. What market need did you identify when you developed this system, and how can similar digital tools transform the operations of your clients?
We are using all of these systems mostly to ensure the safety and security of our drinkable groundwater system, which needs to be absolutely safe. If problems occur, we need to deal with them promptly. With regards to wastewater treatment, such a level is not required, so we do not use such monitoring systems for that.
In addition, we developed and are operating a management system to level maintenance quality for the purpose of providing stable wastewater treatment.
By 2026, global demand for biofuels is set to grow by 41 million litres. Last year, the Indian Government fast tracked its target of selling 20% ethanol blended fuel across the country by five years to 2025. Your D OiL N biodiesel is a mix of biofuels made from tempura oils and light oils for automobiles. What international markets are you looking to provide your biofuels to?
This business is all about contributing to reducing carbon emissions and the cyclical economy. Part of it is reusing the fuel, so it has to be something that is rolled out on a local level - locally produced and locally supplied. It can only be successful in this way and right now, this project is underway in Matsuyama, Ehime Prefecture. We collect tempura oil from that area, then we reuse it and convert it to an oil which is then used to power that locality.
The struggle here is that the original oil is tempura oil and is hard to collect in large quantities. It is not the most profitable business model because there is the effort that goes into collecting it, and it is more costly to convert tempura oil into fuel than it is to convert diesel into fuel. If it was tax-deductible and subsidised by the government, it would become a profitable method for business to reduce expenditures, and in that way, if it spread into industrial plants in the area, it would become a good business model. However, the awareness is steadily growing and the interest in taking this up is definitely expanding, especially with the push in Japanese society towards reducing carbon emissions and contributing to a more sustainable environment. We are also planning to build a second plant in the Kanto area. For the application of this fuel, we can see it being used not only in regular vehicles, but also in construction vehicles like tractors and other machinery.
We have been thinking about how to do this abroad for many years, and one challenge is that we cannot use palm oil, as it is not as convertible to biodiesel fuels. We did have plans to grow a certain plant that emits an oil that can then be converted into this fuel, but that plan is currently on hold.
Can you tell us more about your R&D strategy and are there any particular products that you would like to showcase?
At the moment, our efforts in R&D are finding ways to create a water treatment process that can reduce more costs. That is the main objective of our efforts, as well as reducing maintenance involved. Our other main objective is with regards to our overseas business; we want to find a definitive method that is successful in treating wastewater in any country, creating a universally applicable process. We are taking the model of co-creating, and together with other companies, we are looking for new wastewater application methods, as well as reducing the carbon footprint, both domestically and overseas.
What opportunities will co-creation and collaboration bring to your company, and are there any specific countries or regions where you are looking for partners?
Domestically, co-creation leads to opportunities to penetrate new markets. Internationally, with our main priority being to contribute to sanitation and treatment of wastewater, our stronghold greatly expands through collaboration. Currently, we are looking for partners in India.
In 1991, you first opened your overseas subsidiary in Dailan China, and since you have expanded to Singapore, Indonesia, India and, most recently, Sri Lanka in 2021. Have you identified new regions to expand to?
We are looking into expanding to Africa, and we are looking to work together with local distributers. If it wasn’t for Covid, the business would have been much better in terms of the progress for the field.
If we come back to interview you in 6 years for the company’s 70th anniversary, what would you like to have achieved by then?
I want to increase our company’s brand awareness in Southeast Asia. We want to be truly well established in that region.