DOWA: Contributing to creating a recycle-oriented society

Over the past couple of decades we’ve seen the rise of manufacturers in South East Asia who can replicate certain manufacturing processes and products from Japan at a cheaper cost and with economies of scale. How have Japanese firms been able to remain so competitive in the face of this tough price competition?

For a comprehensive analysis of the manufacturing sector and the Japanese strength in this regard, you’d need to ask academics and researchers. From my own perspective, I believe that there are two aspects to think about. One is the DNA, or the inherent traits of Japanese firms which will endure, and the other are the things which need to change. Our company, DOWA, is all about being able to provide a stable supply of good quality products.

We began with working in silver mining in 1884 and since then we've had a 100 year history of working domestically mainly in the mining and smelting sector. We've continued to pursue the goal of minimizing damage to the environment as we continue to produce non-ferrous materials of good quality at a stable rate of supply.

About 30 years ago we experienced a situation in which we were facing a lack of resources with regards to the mining business so at that point we made a major shift in the business strategy of the company and began to conduct our business operations on two main fronts. Firstly, we are continuing to provide extremely high-quality resources and products as well as a recycling and management system. At the moment, half of the resources we use are recycled materials and we are currently focusing on maximizing the extent to which we can fine-tune and strengthen our recycling business in order to ensure that we can pass on the cleanest world we can to the next generation.

I believe that this is what leads to the practical application of what I mentioned at the very beginning - of the importance in our company of being able to identify and recognize which aspects of our company’s DNA should be ingrained and which need to undergo a process of change. One aspect that should always be maintained is our ability to produce products at an extremely high level of quality with efficiency and safety. With regard to what aspects should be improved, I’d say we should try harder to work hand in hand with our clients - both present and future - to be able to expand the array of recycled materials we can work with.

The reason why I’m focusing on these points is that we’ve had bitter experiences in the past. 30 years ago when the Japanese mining industry started to fall into decline and be overtaken by other sectors of the economy, the business experienced extreme hardship and we tried a number of different approaches including for example distribution of beverages and production of rare earth magnets . When we tried our hand at these new businesses, the reality was that none of our employees necessarily had any level of expertise in these fields so eventually these businesses failed. And so from this bitter experience, what we really came to understand and learn was that it's important for us to work in a field in which we already have a level of expertise and then continue to strengthen that further. That shows why it is necessary to maintain some of our core characteristics whilst at the same time be able to change others according to the prevailing economic conditions.

You are using a lot of recycled materials in your products in response to environmental concerns. Could you give us your overview on the recycling business in Japan and tell us how your technologies and know-how can contribute to the global recycling industry?

Words like reuse and refurbishment have a lot of appeal nowadays but our strength is material recycling. When it comes to reducing the burden on the environment, maybe reusing and refurbishing is the way to go but in the field that we're dealing with - material recycling - the process is really about returning the product to its raw state, and the methods for achieving this have a lot of potential for innovation and other uses in future.

We imagine that the kind of work that we're doing with material recycling is something that is going to be in greater demand as we move into the future. However, it is not something that is unique to ourselves, or something that only we can do. Anybody who is dealing with non-ferrous metals may do this kind of work so I believe that one of our important roles is to promote to the global community that the non-ferrous smelting industry contributes to creating a recycle-oriented society.

Your company was founded in 1884 so today you have more than 137 years’ experience and know how. Could you please tell us what your main competitive advantages are, and what solutions you can offer your clients through those 137 years of cultivating know-how?

As I mentioned earlier, for the first 100 years we were working domestically in the realm of mining and smelting. As the ore we were dealing with contained various kinds of metals, it was very difficult to process. The production of high-quality metals at a stable rate of supply required a lot of R&D and innovation so that kind of expertise in non-ferrous metals is directly applicable to the recycling of materials.

But what we were really able to develop in terms of our expertise is the ability to provide waste management technology and systems for dealing with the impurities that are extracted from the processing. As a result of having that expertise, combined with our experience in mining and smelting with non-ferrous metals, we can effectively roll out this new type of waste management as part of environmental protection systems used by industry.

There’s been a lot of attention on the importance of plastic recycling and reuse, but recycling and reuse is not easy because they are often dirty or contain impurities, then greater focus should be placed on how to deal with those materials too. Whilst we're not working with the recycling of plastic, when it comes to products that are made out of a combination of plastic and non-ferrous metals, there is an opportunity for us to be able to recycle such materials so I believe that when it comes to materials that are very difficult to recycle - ones that require complex waste management - that is the area in which we’d like to contribute in future.

Throughout your company’s history, it has diversified into several business sectors as you mentioned earlier. How are you able to create a synergy between those businesses in order to provide better solutions to your customers across various industries?

As I mentioned earlier, we started mining silver in 1884, but that business ended after 10 years because we ran out of silver deposits. However, there was a large deposit of complex sulfide ore called “black ore” under the silver deposit, and starting in the 1900s, we began to put our efforts into processing this ore, and the technology that we developed in order to work with this kind of ore became the core of the company that we became. In the 1950s there was an iron sulfide mine that was in the western part of Japan so we created a factory in Okayama Prefecture in order to work with this type of smelting.

Dowa smelting plant

The technologies we developed then are directly related to our current production of iron-based products, especially the granulation and fine-powdering.  Then from the 1980s onward we started many companies dealing with different technologies related to black ore deposits, iron powders and the various other metals we were working with. These businesses were engaged in activities such as heat treatment and metal processing.

Later in the 1980s we created a division of our business working in the realm of semiconductors. All of these different businesses and production facilities have come about as a result of our intensified efforts to mining, smelting and processing metals to add value.

So that was the starting point for our five core businesses that we are engaged in today. In the 1990s, it was clear that the mining industry was almost closing down in Japan, and  with that we had to stop our operations in that field. At the time, the mining business was the main focus of our company so we had to figure out what to do in the face of our main business activity taking such a big hit. How were we going to adopt a new approach that could utilize all our capital, human resources, infrastructure, and other resources that we had accumulated up to that point?

And then from there we put our efforts into to what extent we could effectively invest or reinvest our resources into these five business fields. I started working at this company in 1983. At that time the title of the company Song was ‘Champions of Mining’. Now I have no chance to hear that song anymore, which highlights how a company that was all about mining transformed into something completely different today.

Would you like to introduce your technologies to any other business sectors and create another division for your company to serve the demands of new customers?

Yes and no. As we continue our R&D operations for the five current business activities, technologies could be found that may be applicable to a whole new business sector that could become a new division of our company. On the other hand we are very wary of entering new business sectors where we have little or no experience due to our previous bad experiences of doing that, as I mentioned earlier.

We would always want to be working in areas we are already well acquainted with and then expanding and strengthening from there, which is why there could be a sixth division, but there might not be. Conversely, if we find that there becomes a closer connection between two of our existing five businesses we might integrate them in the future.

I believe what's most important is not to be so hard headed about how things should be as to insist they be set in stone and never changed, but rather to approach the business with a flexible mindset and be ready to adapt as required.

Do you have any products or technologies that you would like to showcase to our international readers that define the core competencies of DOWA, and are you actively looking for co-creation or joint development partners overseas?

Since we're working on the B2B level, it's kind of difficult to introduce ourselves to the average consumer or reader of Newsweek. However, something that might be relatively easier to grasp is that as the world is shifting and pushing to become a carbon neutral world, one aspect of our business is focusing on renewable energy.

I believe that as part of the world trend towards renewable energy, a key role will also be played by solar energy, and we are the number one supplier in the world of the silver powder that is used in the production of solar panels. We believe that this market definitely has great growth potential as solar energy surges in popularity. There will be greater demand for this type of silver powder and with our experience and expertise in the field of silver mining, we are well placed to satisfy that demand and improve the quality of that product. Combining the iron powdering technology that we developed earlier with our knowledge of silver has enabled us to develop a unique technology that can greatly contribute to the silver powder used in solar panel production.

Another example of our activities is our waste management business where we utilize our experience in heat treatment and incineration technologies that we developed over the years. In Japan, incineration is already part of the culture but in other countries around Asia landfills are still being used. Rolling out our incineration technology safely in those areas would greatly contribute to reducing environmental impacts, and this is the kind of business that we're looking to expand in the Southeast Asian region. Domestically, it has already consolidated its position, but in Southeast Asia, incineration still has a lot of potential and room to grow.

With regards to your second question of whether we're looking for overseas partners, the simple answer is yes. Our work in waste management in Southeast Asia is actually something that we didn't start from scratch, we acquired a U.S. company that was already working in the field. We have a very flexible mindset and we're thinking quite open-mindedly about how to expand those businesses and operations where we already have a deep level of knowledge, experience and expertise.

Could you talk to us about your electronics business and what opportunities you foresee in the future as all these businesses of yours continue to grow?

We're actually making progress on the development of new uses for LED waves. They work on quite minute levels so they could be something that can contribute to wearables. However, this is a very competitive field so a lot depends on how effectively we can leverage our R&D efforts to derive new features and functions from the materials used.

Dowa semiconductor

Actually our greatest strength when it comes to materials for electronics is our manufacturing technology. This sector is very competitive, and if something of exceptionally good quality comes out into the market then everyone is really quick to replicate it. Our strength is the fact that we've been able to develop not only all the capital assets needed to manufacture the product, but also the manufacturing processes themselves, and we've done all of that in-house. As a result of this, our manufacturing process is very hard to replicate and that gives us an advantage.

However, since it's something that we have created in house, it's difficult to scale up to mass production levels so we have to adopt the strategy of using our limited financial resources to focus on specialized niche fields where volume doesn’t need to be high, and become top suppliers in those fields. I believe the business will continue to proceed with this strategy in the future so I don't expect us to become a top global supplier based on volume, and we’re not even aiming for that.

You have a company vision 2030. Could you tell us about this midterm strategy and how you plan to continue your corporate growth, and what role international expansion plays in your future plans?

As our mission statement says, our main mission is to contribute to creating an affluent recycling-oriented society and we believe that based upon our company history and the financial, human and material resources that we've procured along the way, these assets are best employed in the pursuit of such a mission. And since the fields in which such assets can most gainfully be employed are somewhat limited, we feel the ones best suited to our assets are material recycling and waste management.

This means that we would be supplying materials that would be extremely effective in helping create a carbon-neutral global society, specifically catering to the electrification of cars and the expansion of renewable energy supplies. I believe that through our various business activities, we regard our main mission as being able to create a safer world for everyone.

Imagine we come back in 2-3 years to interview you again. What would you tell us? What are your dreams for the company and what would you like to have accomplished by then?

Very good question. With waste management and recycling materials being the core of our business, I believe that we could be recycling more types of materials in future, and that applies to both foreign and domestic markets.

We’d like to be able to integrate our recycling and waste management activities more closely in order to recycle more complex compound materials in the near future and I’d be very happy and proud if we were able to strengthen our contributions on both the soft and the hardware level. And nothing would make me happier than to strengthen our financial position in a way that would provide more benefits to all of the stakeholders as well as the company.