Since 1967, the Japanese company Sanyo has developed into a market-leading manufacturer of cotton swabs for general, medical and industrial applications – and the range of uses for its high-quality products is expanding beyond these fields, too.
We would like to use your company as an example to challenge this misperception that Japanese firms have lost their innovative quality in the eyes of the West. Can you tell us a little more about your monozukuri, and what sets you apart from your regional manufacturing competitors?
One might look at our product and say, “it’s only a cotton swab”, but our mission is to pursue the ultimate ideal of a cotton swab.
50 years ago, we started by creating and manufacturing the machine for producing cotton swabs. That was invented by our former owner. He decided to create a machine that went beyond the level of quality typical of the low mix, high production style of Swiss or Italian machines.
The machines used by the Swiss and Italian manufacturers tear away the cotton and then wrap it around a stick. However, our method is fundamentally different. We crush and compress the cotton into a very tight state.
Since we crush the cotton into a tight state, we are able to make a variety of different types of buds, for example small ones, extra large, and pointed ones. We can address various shapes thanks to our production method.
We focus on quality. We want to continuously make better products.
People may think, “Isn't this a bit extreme for cotton swabs?”, but as a result of this initiative and effort, we were able to come up with the HUBY and other industrial cotton swabs that are indispensable to a number of sectors.
There is one called kodawari which is very strong. What's different from ordinary cotton swabs? First, please look at the stem. We ground the top of the stem into a rounded shape because some people say that if it is pointed, it hurts when used for the ears.
The cotton is wrapped very softly, and the stem is harder than ordinary ones. The cotton never comes off the stem. However, with cheaper Chinese products the cotton may come off and be left in your ear.
We’re eager to learn more about your Dr. HUBY®︎micro which I understand was part of a joint development with Osaka University, used for laparoscopic surgery applications, a minimally invasive surgery. How did you apply your expertise from conventional household products to a surgical tool?
In 2008 the University started a private sector-academic project. Professor Nakajima established a link between academia and the private sector, and it is called the ‘Project Engine’. One day, Professor Nakajima called me to join the project. He is a famous doctor at Osaka University Hospital dealing with laparoscopic surgery, and he showed me a surgical implement with a cotton tip that is five millimeters in diameter. However, he mentioned that in the case of women - gynecology, or for children, if you make a big hole, it will leave a big scar and stitches would be necessary. Therefore, he wanted to use a three-millimeter diameter one instead. If it is only three millimeters, you can just use a bandage right after surgery.
They used to use a thicker cotton swab with a larger diameter in order to probe the internal organs. However, Professor Nakajima suggested that with the increased number of laparoscopic surgeries he felt an increased demand for a smaller diameter cotton swab, and suggested we try making one. It took us three years.
What was fortunate is that I always had many chances to consult with the doctors themselves, and we were able to do clinical testing, including testing on animals, and therefore we kept on doing trial and error in pursuit of the best possible product. In the end, we came up with this final product in 2017.
We were able to capitalize on our technologies which were fostered through the invention of the industrial cotton swab. The cotton itself is very small and it’s shaped like a dumpling. That means that the cotton will not be left in the abdominal cavity, and there's no fluffiness with the product, so even minute fibers will not be left behind.
This is a different product that we developed with Professor Nakajima. It's called the Port Cleaner. During surgery, the surgeon often uses a camera to see the area of operation. Their view can often be disrupted, and the lens and surrounding area can be obscured by blood and body fluids. Up until now, nurses had to use the cotton swabs manually, but now with this product they are able to wipe it very easily.
The way this product came about was that doctors used to have difficulties cleaning the camera with standard gauzes many times, and sometimes gauzes were left inside the abdomen. In that case, they had to open up the abdomen once again to get them. Therefore, we decided to meet the needs of doctors. This product was created from the doctors’ idea.
We still have meetings six times a year, and we are conducting clinical experiments three times a year to create new products. However, we haven’t yet seen the shape of the final products, so I cannot disclose them to you now.
Do you have plans to bring these products - both the Dr. HUBY®︎ micro and the Port Cleaner - to hospitals, doctors and clinics overseas as well?
As you know, we have a different company called Clean Cross which is dedicated to selling these products and has staff members who are very good at foreign languages, so we wanted to expand our market overseas.
As a matter of fact, over 30% of total sales come from exports. We have partners who sell our products, so we initially wanted to sell this product to the partners as well, to expand into overseas markets.
However, there was a big barrier which was the approval of the FDA and the CE approval certificate. However, what we have now is one product, this one – the Dr. HUBY®︎. The consultation fee to get this certificate is about 5,000,000 yen, which we think is too much to pay for consultation on only one product, so we gave up.
You’ve successfully collaborated with Japanese academics such as Professor Nakajima in the past, but are you interested in pursuing similar industry-academia collaborations with foreign companies or universities as well?
Since we only have one item to go with, it may be difficult to start that kind of collaboration from scratch. However, Professor Nakajima used to stay in New York, and he has a wide network. Through his network, we even visited a university in India, so as a member of Project Engine, we'd like to explore what we can do overseas.
You talked about some markets in which you say you're already strong, like the USA, Germany, China, and Vietnam. What would you say would be your next target? What would be your strategy to bring your products and your presence to that market?
There are three types of categories for cotton swabs – medical, industrial and for general consumer use, so we have different strategies for each one. The general consumer market is the largest.
In 2015 we participated at exhibitions in Chicago, USA and Amsterdam, Netherlands. At our exhibition booth, we showed a collection of over 20 samples of various kinds to show our capability to address various types of cotton swabs.
However, the American general consumers visiting this exhibition said, “Why do you do that much with just cotton swabs? You just clean your ears and throw them away, right? Why do you work so hard to make it perfect?”. That was the reaction.
Most of the people visiting our booth were Chinese, Koreans and Taiwanese – Asians, in general. What I felt is that the western market has really matured, and the people are practical. However, when it comes to the Asian market, there are more people interested in having high quality products of this kind. Even in Japan, the market is mature but we still find that people want to use slightly better ones, a little bit of luxury. From this experience, we came to think that we would like to grow our share in the Asian market rather than in the West, as a strategy.
As for the industrial cotton swab market, we already have a very high share in the world. What is required now, what the people want from us in terms of industrial cotton swabs, are smaller ones.
I cannot disclose the name, but we work with a US manufacturer. We’ve developed a swab for many precise applications in the electronics field, such as for cleaning optical connectors.
A big company whose name begins with ‘A’, the fruit company, if you know it. They use this. Of course, they have different fabrication sites in China or other areas. However, the ‘A’ fruit company places a lot of orders with us. This is rapidly growing.
We also have swabs for smartphone lenses, as well as those used for automobiles. We didn't have that kind of market before, but now car manufacturers are becoming our customers too. There are sensors everywhere, and we are gaining a lot of new customers.
The first one we invented was only 2.5 millimeters. Due to the ever-smaller module of lenses, they want ever smaller items. Our smallest one is only 1.0mm.
We started industrial cotton swab production in the latter half of the 1990s. However, I feel that this trend is changing. We started with cleaning swabs for the hard disk drives of laptop PC’s.
And then, the market trend has changed to cleaning liquid crystal displays, digital cameras and original mobile phones, but now its use has moved to the smartphone, so more precise specifications are necessary.
As I mentioned, our strategy for the general consumer market is to focus on the Asian market where we think we can grow a larger share.
For the industrial sector, when we have improved the quality and achieved the ability to manufacture smaller swabs with greater precision, it will be automatically sold, and companies will follow us.
Regarding the medical field, although we still haven't found a solution to the FDA and CE certificates issue, I think it's important to have good partners anyway.
For testing, we went through general consumer items, industrial items and medical items, and this is a new section. At the time of the covid pandemic, at the peak of the pandemic, the manufacturers of the cotton swabs for covid testing were US and Italian. They were the dominant manufacturers.
There was a request from the Ministry of Labor and Health for this kind of swab, and at that time we were already at the development stage of the product, so we came up with the HUBY-COTIX Specimen Collection Swab.
We initially developed these products as a tool to test for covid-19, however, the customers now say that this can be used to examine genes or to check the number of microbes in lab, or to check whether a person is smoking or not, or if they have been drinking alcohol. It can be used by the police. This served as a positive effect from the covid-19 pandemic because it motivated us to develop this kind of new product.
Let's say we come back to interview you again in five years' time for your company’s 60th anniversary. What would you like to tell us about your goals and dreams for the company in that timeframe, and what would you like to have achieved by then?
First of all, I would like to have achieved double digit growth of our market share in Asian countries. As for the domestic market, we already have a 40% share, but I want to see it at 50% or more. In addition to that, we want brand value. “When it comes to cotton swabs, it's Sanyo.” I want to see our brand value enhanced more.
And lastly, I want to see more women executives in our companies and not just a few, but many. We want many women executives. I'm dreaming that someone will tell me that I can retire now because they’ll be responsible from now on.