Contributing to the development and dissemination of Advanced Medical Care

In the last twenty-five years, we have seen the rise of regional competitors such as China, South Korea, and Taiwan who have replicated the Japanese monozukuri processes but at a cheaper cost. Nevertheless, Japan, through its monozukuri, has been able to maintain its leadership when it comes to innovation and advanced technology. Could you please tell us why Japan has been able to maintain its leadership when it comes to the technology fields and what role monozukuri has played?

I think that Japanese companies, especially medium-sized companies like us, have always taken customers’ demands and complaints, even the small ones, very seriously and been looking for ways to fix the encountered issues. I think that the attitude to find innovation cues from small problems to create big business opportunities has resulted in the improvement of technology and the opening of new markets. Our company has also been thriving to solve customers' problems, to the point they like to call us "When in trouble, Zacros". As for innovation, this may be a very Japanese way of thinking, but as partners supporting our customers’ manufacturing, we want to help them innovate. Moreover, unlike big companies who target low-cost and mass-production industries, we have been targeting very niche sectors. When illustrating our 100-year history, we can say that we haven't sought to find the major gold mine that would attract the mainstream business, but instead have always been searching for undiscovered hidden veins beside them.

Fuyama-san, you mentioned at the beginning of your answer that you focus on high-quality niche fields. How do you manufacture overseas? How do you maintain the same quality whether you produce here in Japan or overseas?

In order to maintain the same quality overseas as in Japan, it is necessary to take time to properly train our operators and engineers, but not in the same manner as we do in Japan since employees change jobs more frequently in other countries. That is the reason why we are working on the automation of our manufacturing processes. For instance, at our Malaysian factory, we have invested large amounts of capital and infrastructure equipment to introduce cutting-edge technology that makes full use of robots.

On the other hand, at our plants in Japan, we are automating processes that are easy to perform, such as assembly lines. This is because we want to focus on improving the technical capabilities of our engineers, which is what they actually want too. However, the taken-for-granted Japanese lifetime employment system has been gradually falling apart, and it has become difficult to attract quality engineers. Working on the robotization of difficult processes at our Malaysian factory is also a way to prepare our Japanese facilities for the future. We indeed believe that we can maintain the same quality both overseas and in Japan by adopting a strategy that incorporates the best aspects of each country's activities.

The brand name ZACROS means "constantly pursuing the leading edge." Please tell me what you are working on to make this happen.

We do not rely entirely on manufacturers to design our manufacturing equipment, but instead assemble and customize multiple modules ourselves. The designs of various elements are outsourced between multiple manufacturers, while keeping the overall design secret. By doing so, we are improving our own technologies by introducing cutting-edge technologies while keeping our know-how secret. As a result, there are many machines that our company is the only one to own in the world. Of course, it requires a large number of brilliant engineers, and we are making a strong effort into training our engineers in Japan.

Nearly 70% of the Japanese companies are investing massively into their R&D department in order to be more competitive globally but also to introduce new technologies. In your specific case, you have unique technologies such as laminating and coating technologies. Could you please talk to us about these technologies and introduce them to our international readers?

Speaking of our company's coating technology, it is true that our company has a strong expertise in the market. For example, our company holds a 70% share of the global market for protective films which are used in the assembly of polarizing plates. Before the said assembly process, there is an inspection for scratches on the polarizing plate, but our film is so thin and transparent that the polarizing plate can be inspected with the film on. In other words, the customer can skip this inspection process and lower the cost accordingly. Our company is able to produce this film at a much faster speed than competitors, thanks to the one-of-a-kind technology we developed by discovering a new concept that challenges the conventional coating theory. There was a chance factor in this discovery, but I think that the efforts of the engineers who fostered it instead of missing that chance paid off.

According to experts, 77% of Japanese companies possess unique technologies and are striving to introduce these new products and technologies overseas. They are basically shifting towards the global market. In terms of co-creation and general development, the Japanese monozukuri combined with the foreign technological know-how is revolutionizing how new products or technologies are created. Could you please tell us concretely the role that co-creation plays within your company? Are you actively looking, as a global company, to collaborate with foreign companies?

We have been expanding our business through co-creation with other companies both in Japan and overseas. That strategy will not change in the future. In Japan, we continue to collaborate with research institutes of other companies and universities in the medical field. We are developing technologies for culturing large numbers of artificial cells, such as iPS cells, and are actively collaborating with other companies to enhance our business, not only in terms of monozukuri but also for services.

We are actively working with overseas companies too. Besides, our company is also working on the design and development of medical devices that can measure the progression of thrombosis and what is happening in blood circulation. It is the world's first medical device that measures and analyzes blood flow in blood vessels to prevent thrombosis. Blood is dropped into the device’s microchip, which is made of a special collagen coating. That is a significant new application of our coating technology. The device was approved by the FDA (US Food and Drug Administration) in February 2020 and is already being used by universities in Sweden and hospitals in Italy and California.

Whether it's cell culture or medical equipment, linking technology to business requires not only co-creation in the field of technology but also for marketing and business operations. In the medical business, we have been partnering with MITSUI & CO., LTD., a major Japanese trading company, in relation to our subsidiary that manufactures pharmaceutical packaging materials in Indonesia. At the time of its establishment, the coating factory in Taiwan cooperated with the Shin Kong Group, a long-established conglomerate. The same was true of our factory in Malaysia, where we worked with one of the leading local companies and received advice regarding our operations. Leveraging cooperation with business partners and major local companies has been a means of business expansion globally for medium-sized companies like us, and will continue to be in the future.

Do you have any upcoming products that you would like to showcase to our international readers?

Our company is committed to developing environmentally-conscious products. Let me introduce you to the refillable pouch that was chosen as a Diamond Finalist in The Packaging Innovation Awards 2020. Refillable pouches use less plastic than bottles, thus having less environmental impact. In Japan, it is a common thing to refill detergents and shampoos using dedicated refill packaging. This product is overwhelmingly easier to refill compared to other companies' products. So easy, in fact, you can set it and remove your hands while it refills a bottle. The related marketing commercial featuring a famous athlete became a hot topic even in Japan. This eco-friendly "refillable way of life" has now spread to China, South Korea and Southeast Asia. In addition to refillable pouches, we are working on the development of recyclable materials such as mono-materials, biomass materials and biodegradable plastics.

Fuyama-san, out of the seven businesses that you have diversified, could you please tell us which one of them is the most important for your company?

Our focus in Japan and overseas is in the medical and healthcare fields. We are targeting not only Western markets but also developing countries. For example, in Southeast Asia (Philippines, Vietnam, Thailand, Indonesia), GDP per capita has been growing, and investment in the medical and health-related fields has been increasing. These markets hold tremendous growth potential for our company.

One of our global business targets is the IV bag business. Our IV bags are very special. In the past, when a patient was put on an IV drip, the nurse would reconstitute the drug with normal saline in advance and inject the mix in an IV bag. However, the whole process is both complex and time-consuming, and there was a risk of administering the wrong drug. Also, the syringes and ampoules used for the preparation should be discarded, generating waste.

In other words, saline bags are not functional. Therefore, we developed an IV bag made of a special material that can hold both the drug and normal saline together from the beginning. The drug reconstitution process becomes unnecessary, which saves nurses some work. Medical errors and waste are reduced too. Even on emergency scenes, where you can't waste even 1 second, our IV bags can be used immediately without any drug reconstitution process. "The value of Tsutsumu" is our original concept, and the Japanese verb of "Tsutsumu" has the meaning of not only wrapping something but also caring for someone. We want to wrap and protect our customer’s products as well as people’s very lives. Our technology is needed in the medical and healthcare fields, where human lives are at stake.

Fuyama-san, throughout this interview we have spoken about the major challenges you are facing, your products, the different types of business fields you are in and your competitive advantage. Looking towards the future, what would be your mid-term strategy in order to continue growth as a global company?

One aspect we must tackle is addressing environmental issues and fulfilling our social responsibilities. Aiming to achieve the 2030 Sustainable Development Goals (SDGs), we have set targets not only for reductions during production processes but also for contribution to the environment of society as a whole through product development.

Another aspect is to build new businesses with a focus on healthcare and energy. This can only happen with the support of diverse partners through co-creation and up-front investment. In the energy field, we are aiming to commercialize new products through joint development with a major U.S. IT company and by incorporating technologies and knowledge of other companies to our own technologies. Because it is a fast-changing industry, we need to take the lead in investing.

Speaking about the overseas strategy, globalization is crucial and as a global company could you please share with us what is your current international strategy? Which markets are you looking to enter in the near future?

In terms of markets, we are targeting the US, China, Indonesia and India, since they are territories with large populations and high demand. I think Taiwan is also an important market. Taiwan may not be an attractive market in terms of population and consumption, but their strategy for COVID-19 is very innovative. In that sense, Taiwan is an interesting market for new innovations and ideas.

You are currently the president of the company, let us imagine that we come back to interview you all over again in two years. What would you like to tell us? What are your dreams for the company?

In two years, I would like to say that I was able to foster talented human resources. I originally studied education at university and wanted to become a school teacher. Even after I joined the company, I always wanted to be in charge of the human resources department, but after many years of working as a manager at a factory and serving as the director of a research institute... in the end, I was unable to become head of the personnel department as planned but became the president instead. Nevertheless, I believe that the soul of a company resides in its people, and I learned various methods of human resource development. As a result, I provide mentoring to the presidents of our overseas subsidiaries among other things.