Since its establishment, Fukae Kasei has specialized in the manufacturing of plastic laboratory equipment for life science research, which it supplies to labs worldwide through its globally renowned Watson brand. Moving forward, by leveraging its long-cultivated monozukuri technologies and the experience gained from working with researchers and clients at the cutting-edge of life science research, Fukae Kasei aims to diversify into new fields such as micro-technology and the development of micro-scale products for the life science, medical and other industries. As such, the company is seeking to strengthen its collaboration with international partners that share a similar vision, including universities, research institutions and other companies. We speak to president Shoichi Kimura to learn more about the company, its products and its plans for the future.
Traditionally Japanese manufacturing involves the relentless pursuit for perfection and this was defined as monozukuri, but nowadays the modern version of monozukuri is responding to customers’ requests and providing that added value to the products. How do you define monozukuri and what is the essence behind it?
I have been in this business since I was young, and I have been doing something that should be taken for granted for a long time, which is to respond to the customers’ requests. I do not want to turn down any request by our customers and I do my best to meet their needs.
Japanese SMEs are capable of developing niche technologies that are not available in other parts of the world. For example, we met a company called Kono Seisakusho that developed the world’s smallest microsurgery needle with a diameter of 30㎛. Your company has done a similar thing, you have developed a hollow microneedle with a 50 ㎛ in diameter. Such microfabrication is a hallmark of Japanese SMEs technology. Can you tell us what it is that allows Japanese SMEs to develop niche yet critical products?
If the large companies try to do what the SMEs are doing in the niche field then cost-wise it does not make any sense. There are many talented technicians and engineers in Japanese SMEs who are often requested by the large companies to make something happen. As I have already mentioned I do not want to turn down the customers’ requests and as much as possible I try to meet their requests and needs. With regards to the micro-needle that we have developed, it was a result of a collaboration with Ritusmeikan University, which we had a very good relationship with. We found out that they had an X-Ray instrument called Synchrotron. Twenty years ago, we realized that by using that instrument we could create a mould at nanolevel, then we started working with that university. However, they were only focused on research and not about mass production. We partnered with the University of Hyogo which had a larger-scale instrument that uses the X-Ray. We dispatched our engineers to both universities and eventually we completed the process of producing nano-sized needles. To produce nano-level needles injection moulding is needed with a pressure of one ton, normally the needle breaks as you do this, but we have a technology that prevents the needle from breaking. I think our company is the only one with that kind of technology.
Your company launched the Watson brand in 1988 and since then you have become a comprehensive manufacturer of plastic-based products for biotechnology. You have products such as the NEXTY micropipette which is easy to use for people and also very accurate in the transfer of liquid; you also have your test tube which is the PROKEEP which is used for protein and peptide analysis; you have your WATSON PRESERVATION PLATES for the convenient storage of bio-sources. Among your very diverse lines of products, which is your bestselling and where are you putting the most focus into your business?
In terms of the sales volume the general purpose pipette tips are bestselling. However, after the Covid-19 pandemic the filter tips have been selling well. Filter tips are the pipette tips which a filter is inserted into. The long filter tips have especially sold well under the Covid-19 situation. There are many other special purpose products but do not sell well because they are only used by certain people who really need them.
Aside from being a developer of your Watson branded products you are also offering customizable services and post processing solutions, for example the insertion of filter tips. Can you tell us more about this service and how are you collaborating for the development of new products with your clients?
We produce filters or something that is thin and long based on the customers’ requests and using our technology we are able to produce a lot of plastic disposable items which other companies are not capable of. There are a lot of machines that automatically produce small products both in the domestic and international markets. However, it is difficult to find a company that could produce plastic disposable items, for example, this standard set of pipettes
Some companies, majority of which are pharmaceutical, request for even smaller pipettes with the same size of the container. They need small pipettes in order to do the screening process where they test the drugs at high speed. Although the number of clients is limited, we still produce such small pipettes based on our customers’ requests. We are doing mass production of such plastic disposable items and there are manufacturers which can do the dispensing for all these tips at once. Speed is really important because as you dispense such a small amount of liquid it easily evaporates; you therefore really need to measure and analyse it immediately.
When we spoke with the president of Nipro, a medical device manufacturer based in Osaka, the president told us that their best selling product is for dialysis for which they have a 15% share in the US market, and the reason for the success of this product was due to the high levels of quality monitoring and the production here in Japan. We know that your company operates with clean room environments of the highest standards, can you tell us more about your production techniques and manufacturing process and how you ensure the quality of these?
I believe in terms of quality control the most important thing is to do what needs to be done. In Japan the engineers and workers in the plant are able to follow the rules and do what they must. We have a good education system here in Japan and most of our workers have a high level of educational background. It’s not so difficult to maintain and establish facilities such as clean rooms of high quality. However, the most important thing is to ensure they adhere to the rules.
Japan is famous for its level of R&D spending, in fact up to 3% of GDP goes towards it. In the past Japanese pharmaceutical companies had a lot of successes with blockbuster drugs, but nowadays we see that they are focusing more on generic drugs and in shorter time frames. If we look at your firm’s R&D we know that you have the Plasma filter technology and the Spheroid Catch for the cell culture. Kindly tell us more about your R&D strategy and which products are you focusing on?
We are not doing something as big as what you typically call R&D, most of the research and development activities that we have done were from collaboration with universities. We are engaged in the life science field not in the medical equipment field and around half of our products are not quite marketable and are not sold in large quantities. On the other hand, companies like Nipro are producing medical equipment, thus, they sell their products in large quantities. Our company is engaged in the life science field which is the niche field for analysers or scientists. Our company works a lot with university professors, and they are very curious about cutting edge technology. It is fun and exciting working with them and most of our products were the results of curiosity.
As the world population begins to rise, we know that there is going to be more demand for more research in order to come up with solutions in the life science field, for example. We are seeing more CROs and CMOs being employed to do such research, this is already a multi-billion dollar industry and is set to continue to grow in the near future. What strategies are you adopting in order to appeal to this new growing trend of outsourcing in the life science field that we have seen increasingly develop?
We do not have a large-scale strategy at the moment; however, it is important for the company to survive for a long period of time, we can achieve this by having a very solid technology. If we try doing what the large companies do, we will not be able to survive unless we are able to get the top market share. Our employees always try to enhance our technologies and we continue to produce something unique. Let me use the Japanese sword as an example: I tell my employees that no matter how the scabbard of the sword looks, you always have to polish the sword inside it. In other words, it is very important to improve our in-house technology, regardless of how our company appears from the outside.
Your company was launched in 1966 but you changed the branding to Watson in 1988. Can you tell us the reason for rebranding to Watson? What do you want this brand to stand for?
My father founded this company in 1966 and at that time we were a subcontractor of a major company. Our clients gave us their drawings and then we manufactured products based on that. We survived as a company simply by doing this because it was a time of high economic growth and we received a lot of orders at that time. I was 26 when I had in mind that we should come up with our own products for our company to survive in the long term and this is why we came up with our own brand Watson. While thinking about the products that we should make, a lot of researchers were still using imported products and there were not many Japanese makers of instruments for researchers in the life science field at that time. In 1988 we rebranded our products to Watson and then we decided to make our own instruments for the life science researchers. Had we continued being a subcontractor, this company would not have survived. I believe it was a very wise decision to make our own brand.
You are a company that has operations overseas and not only here in Japan. You opened up sales offices in Shanghai in 2001 and in California in 2014. Can you tell us more about your international strategies and the advantages of having these sales offices overseas?
Speaking of the life science area, I think the Japanese companies have about an 8% global market share while the US has 15%. There are many companies that produce automatic research machines. We do not have a lot of direct connections with these American manufacturers, there is only one US company that we are working with. We would like to expand our connections with US automatic research machine makers; we are trying to achieve the same thing with the European market. Currently we are dedicated to the production of consumer goods for Japanese makers. There are different requests in the local market, however, at this moment we have not done good sales activities in the overseas market. This is the challenge that we need to overcome moving forward.
What strategies will you use to expand your network for the automatic research machines? Will you open more offices or engage in M&As or joint-ventures?
At this moment we do not have any specific plan for the expansion and with this Covid-19 situation we are using the internet to communicate our strengths and relevant information about our company to the world. In the domestic market there have been negotiations coming from other companies for M&As or shareholdings, however, most of those companies are focusing on technology and they are looking for a partner that has good distribution channels. But honestly, we would like to partner with a company that has good distribution channels worldwide, unfortunately we have not met this kind of company as of yet.
Imagine we come back to interview you again in two or three years, what would you like to tell us? What are your dreams for the company and what legacy would you like to leave for the next generation?
I do not think there will be a lot of changes in two or three years from now. The bio-technology industry is quite conservative, they are quite reluctant to change. I hope that in the near future this company will continue to grow steadily. The reason why there are not a lot of changes in this industry is because a lot of researchers are involved. These researchers do not want to change the process while they are currently working on cell culture for a period of ten years for example. Once they have started growing something and all of a sudden there is a change then the process needs to be changed as well - the researchers do not like this situation. As usual we will continue to provide the products that can be used for a long time by the researchers. This is how we operate in producing our products in collaboration with universities. Most of the products that we produce, including the Spheroid Catch or the Preservation Plates, are made of plastic. Basically, we are just changing the shape of the plastic and then we sell them. We would like to produce higher functional products moving forward that will be related to pharmaceutical or biomedical special filters.
We would like to deal with other materials as well aside from plastic. There are preservation containers or tubes that have IC Tag Jackets on them, these are the kinds of products that we would like to have in the next generation. Normally the researchers put these tubes inside the fridge and the details are only handwritten. After taking out the tubes from the fridge it can be quite difficult to identify the samples inside them due to frost around the tubes. It would be easier for the researchers to identify the content of the tubes with ICT chips. This kind of product has not penetrated the market yet, it is important that this product will be known. This ICT needs to be used at extremely low temperatures like -196 degrees centigrade and is something that we are presently working on as we believe it has great potential.