Kureha Corporation is a leading global manufacturer of specialty chemicals, polymers and agrichemicals for the automotive, agriculture and food packaging industries. Kureha has always sought to grow together with society utilizing the unique technological capabilities that it has cultivated since its foundation in 1944. In this interview, president, Yutaka Kobayashi, gives more insight into the company, its products and their applications; and also explains how Kureha continues to innovate to meet the lastest demands of industry and society. As Mr. Kobayashi explains, Kureha’s business is based on three core pillars: “produce original technology, have the world's leading technology, and cater to niche and highly specialized markets.”
Japan, despite its decreasing population, is committed to staying innovative. What can Japan teach the world about being an innovator and pushing the limits despite the various obstacles that can hinder success?
Japan is definitely an innovator in monozukuri yet that is not to say we are alone as Germany is also a great manufacturer due to its meister history. But where Japan innovates in producing, China and the US dominate in software markets. Although Japan and Germany play their role and China and the US play another, having strong performance on both sides of this equation is essential. Where the US and China are skilled in sowing the seeds of entrepreneurship, Germany and Japan are there to realize the dreams and develop the ideas into a very high-quality product. Japan is used to playing this role as we have always been an island nation that had to learn early on how to procure materials and invest in the traditional pride of Japan: monozukuri. Without the strength of all of Japan behind monozukuri and invested in keeping its values alive, we would not be able to compete or grow internationally with our added value, high quality, and highly specialized products.
How can you ensure that your products, whether produced in Japan or overseas, are of top quality?
The best way to ensure that something is done well is to have failed once and learn from that experience so that the same mistake is never repeated. Prior to having a strong technical foundation in even our domestic facilities, we ambitiously opened a facility in the US. But without the necessary foundation for success, this facility soon became a testing center, which was not the original plan. Yet without this ‘failure,' we would not have understood the importance of such a technical foundation that we subsequently developed domestically as the stronghold and birthplace of Kureha’s technical abilities. However, as an international company, efficiency is enhanced when producing in the market we are selling to. Therefore, our Japanese facility and our other international facilities have become clearly distinguished with the latter being strictly commercial plants led by the innovation of the former.
In which Kureha products do you foresee future growth and how are you going to take advantage of this?
Currently, environmental consideration and lightweight products are the global buzzwords of the industry that are shaping the trends of production. Before production, companies are trying to find ways to make products lighter, more efficient, and less consumptive. This presents an exciting time for Kureha because we see growth opportunities in making products lighter, moving from the age of metal to the age of plastics. Now it is time; the car industry has to consider their innovation for power-train and weight reduction of the car body to pursue the shift to electric and gasoline vehicles. Kureha recognizes this is a significant market for our products.
Can you tell us about your businesses and point out which is core to Kureha Corporation?
Unlike other medium-sized companies, we have a very diverse set of product offerings. In the past, we have been unsuccessfully persuaded to focus our energy on just a few products, yet our success has shown that diversification makes us more resilient. And many of our diversified products are built on our original technologies. Kureha Corporation got its start in a race to gain a license to produce PVDC in Japan and although we ultimately lost in the 1950s. We gained the motivation to be a company that produces original products. This motivation permeated the entire company and from there, we ended up developing our original crude oil cracking technology.
In the decades since these developments, we have learned from our successes and failures and hit some walls that have changed the source of our business. From these experiences we’ve developed three pillars of business: produce original technology, have the world's leading technology, and cater to niche and highly specialized markets.
We discovered that if we can be the top company within a niche market, clients will always choose us over the 2nd or 3rd company as the market typically only has 4 competing companies. In the end, what our past experiences have shown us is that to move forward successfully, we must truly understand our strengths and weaknesses and change course accordingly.
Where has Kureha’s slogan “If it doesn’t exist, create it” brought you?
For Kureha, this motto has two aspects. The first is, as a chemical company we must produce the needs that don’t exist yet. The second is to be a leader in technology and expertise to represent us and our motto. In practice, this means sometimes taking what may exist on some scale and making it accessible to the average company or person. We are a company that is dedicated to making dreams and ideas into realities that the world can feel the benefits of.
Can you tell us about some success stories of collaborating with other companies?
One of our major collaborations that opened many other doors was in 1991 with Sony. At the time, Sony was creating video cameras and was in need of a PVDF binder for their lithium batteries, which we supplied them with. But the use of PVDF binders did not stop there and began being used in the auto and other industries.
With the global food packaging industry expected to grow at a pace of 5.2%, can you tell us what Kureha Corporation is doing to grow alongside?
The global food packaging industry is indeed a huge, growing market yet we have struggled with producing value-added products. Therefore, we’ve changed our operations to specialty plastics because this is where our strengths show through and where we can contribute in a large way. In an effort to adapt to the growth the industry is experiencing, our Netherlands and Vietnam operations are undergoing many changes and although we may have to decrease scale in some areas, we want to keep smaller operations of truly distinguishable products. The future of this industry is also in how environmentally friendly products are, so we are striving for conscious effectiveness and efficiency.
Can you tell us about the development and production of Kureha’s PGA?
The development of our PGA was our most recent R&D breakthrough as well as the first in the world market. This technology has a bright future ahead of it because it is environmentally aware as a naturally degradable plastic. This is not to say though that the product has been yielding groundbreaking profits just yet and this is mainly due to the US shale oil market’s volatility. Nonetheless, the production of shale oil and gas will bounce back with improving oil prices, so in the meantime we will continue to innovate and listen to the needs of the market. Our values surrounding R&D are a hearty foundation and formula that enables us to grow at any age and through any product, so we are truly excited for the future of PGA.
What is your midterm strategy to continue growing?
We have experienced a huge increase in our sales revenue over the years which is propelled by reinvesting in ourselves, our R&D, product development, and everything in between. We also plan to invest in creating more facilities in various locations. We want these factories to be constantly changing, constantly updating to have the newest technologies and methods so that no two plants are copies of each other. In a time when the market is looking for the lightest weight products and environmentally-fittest materials, we cannot afford to slow down or have out-of-date technology. In terms of each of our individual industries, agrochemicals and food packaging already have lots of new investment and resources for technical development underway. On the other hand, pharmaceuticals may be a tougher industry for us to grow in since the investment required is unrivaled, so perhaps we will opt for medical-related non-pharmaceutical products.
As a company that has a presence in the US, Europe, and Asia, what is your strategy to continue strong business abroad?
Our business is all about catering to and understanding the global market and what its needs are. The domestic market is no longer in need of so many resources to understand its needs, so we have been sending researchers abroad to study and understand trends. We have also begun working with universities and venture capitalists for an overseas boost in the areas we can learn the most, like the EU and the US.
Can you tell us more about your joint venture operations?
Our US-based joint venture is, interestingly, with a US chemical company, Celanese. This venture has worked well as they understand our Japanese operations, but we work well together as they carry out production of PPS and we provide the necessary technology. Joint ventures help us to expand and leverage sales in a new market or industry that we may not be as familiar with and we are eager to continue branching out into new countries and industries as a lack of diversity can truly be a death sentence.
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