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Iwata: Using “the unknown power of chemistry to create new value”

Interview - June 2, 2020

Established in 1902, Iwata & Co., Ltd.’s main business is the manufacture and provision of an extensive range of chemicals to a wide variety of industries. The company has a rich history of innovation and was pivotal to the development of the semiconductor manufacturing process in the 1970s and 80s with the introduction of its fluoro-polymer filter. We sit down with president, Takuya Iwata, to learn more about Iwata and its current five business divisions, and how this company has been nestled deep in the heart of Japanese industry for over a century.

 

TAKUYA IWATA PRESIDENT OF IWATA CO.,LTD.
TAKUYA IWATA | PRESIDENT OF IWATA CO.,LTD.

What is the role of Japan´s SMEs within the national and worldwide economy?

One of the characteristics of Japanese SMEs is that they engage in creative activities that large corporate manufacturers and users are not willing to do. Sometimes they become cupids, sometimes they become creators themselves, in other words, SMEs are more flexible than the larger corporations enabling them to adapt easily to the needs of the market.

Moreover, many of the Japanese SMEs are family businesses with more than 100 years of history, making them solid, stable, mobile and agile companies. Furthermore, their important role is to act as a lubricant to facilitate development among companies and to provide a sense of stability and vitality to production activities. The typical corporate philosophy of a SMEs in Japan is "benefit for all three sides".

Besides, "Hitozukuri", which stands for "making people" is vital for the development of any company, as it represents the passion and art of developing people through an education process, with an emphasis on life-long learning. This is about developing people's skills in their area of expertise, as well as their ability to work with others across functional boundaries.

Finally, the combination of "Monozukuri" and "Hitozukuri" is necessary to raise the quality and the growth of any company.

 

How are you able to provide top quality products to your overseas businesses?

In overseas business, the reliability of Japanese quality is an important factor. As we are expanding our business to Thailand and ASEAN countries, we always seek to provide them with the same level of quality produced here in Japan. Therefore, if we only manufacture locally, it will be cheaper, but there is a risk that the quality will not be the same and as people´s lives are improving, there is a need of providing good quality.

From now on, at Iwata, we believe that high-quality products made by Japan and the production process will be needed in many Asian Countries.

For example, food packaging is one of our businesses, as we sell a film, which is the raw material for packaging. In ASEAN countries, the packaging was not considered important until recently. However, to improve hygiene issues and eliminate food waste, the packaging is being reviewed. Hence, despite the high cost of the Japanese packaging, their features are getting a lot of attention in Asian countries.

 

How do Japanese firms such as IWATA Group leverage on R&D and Innovation to remain top innovators?

In Japan, it is common for the top corporation and SMEs to bring their needs and seeds together for joint development. With this method, to put a prototype product made from seeds of an upstream company into practical use, we evaluate it based on the needs and specifications of the downstream company and make repeated improvements.

Therefore, thanks to the joint development, it is possible to put the technology to practical use in a short period, just as if a tunnel had been dug from both sides.

Thus, Japanese-style development has a relay exchange zone, and trading companies make this linkage, in other words, the expertise of a chemical trading company is the ability to utilize information, coordination and sales.

Moreover, if we compare the Japanese joint development method to American development, there is a distance between the top corporations and SMEs. For example, in the development of automotive materials, the manufacturer has to own a large moulding machine and make the bumpers before selling them.

Considering the burden of capital investment and the length of the development period, most Japanese manufactures are not fit and able to do so. If we wanted to sell to Toyota, we would first bring the materials and ideas and then improve them to the required quality once they were adopted. It is their job to make them practical.

 

Founded in 1902, your company has been involved in the sales of industrial chemicals, paints, pigments and various chemical products, and the construction and sales of building materials and building accessories. Could you give us a small introduction to the IWATA GROUP?

Founded in 1092, Iwata & CO., LTD. is an SME with a long history and tradition. Our main business is to supply a wide range of chemicals to a wide variety of industries.

We are a trading company specializing in chemicals and have created several new products throughout our history. Iwata group has several manufacturing companies:

Auto Chemical Industries Inc., and TOSC. Auto Chemical Industries Inc. has the largest share of the domestic single-family home market for their main products, the urethane sealants.

TOSC is specialized in the sale of scientific and water treatment equipment which can build water treatment systems tailored to the customers' needs and has imparted a good impact on process improvements in beverage manufacturing and pharmaceutical plants.

Moreover, we´ve had some fabulous development. Indeed, during the rapid growth of the semiconductor industry in the 1970s and 1980s, the company developed a filter made solely from fluoro-polymers. This has contributed greatly to the improvement of quality in the semiconductor manufacturing process.

Additionally, we recently developed an antistatic agent using ionic liquids, which helped improve the quality of devices such as LCD TVs. In both cases, we connected the seed to the needs, which is a typical example of Japanese development.

 

Can you give us an overview of your five business divisions and their most important products?

Our company is based on five business divisions: chemical, plastic and packaging, advanced materials, Auton and building materials. Allow me to give you a brief introduction to each business.

The first one is our chemical division, which has been engaged in a wide range of product sales as a distributor for domestic manufacturers. The division deals with industrial chemicals, which are history itself of Iwata. Since the introduction of the division system in 2001, we have provided information for the customers, responded to needs more quickly and accurately, and positively addressed environmental issues and recycling. Now, we have widely expanded our business, dealing with not only inorganic chemicals, organic chemicals, solvents and cleaning etc.., but also a variety of products made by multiple manufacturers in large quantity.

Finally, we are looking to be an expert capable of further enhancing customer satisfaction with confidence and pride when it comes to industrial chemicals.

Lastly, our main line of products for this division is our soda industrial products with products such as caustic soda, flake caustic soda and soda ash among others.

The second business division is our Plastic and Packaging division, which has dealt with many kinds of resin products such as resin and rubber raw materials, functional additives, intermediate materials for films and sheets, and molded articles to develop business. It is also involved in sales of general-purpose resins such as polyvinyl chloride, polyethylene and polypropylene as well as high-functional materials such as engineering plastics, fluororesins, fluororubber and EPDM. In addition to the activities of a chemical products trading firm, the division has been conducting business as a development-oriented trading firm under the philosophy of "Creation and Innovation". To this end, it develops new products in accurate response to market needs, proposes and provides development for new applications, and develops new markets. To satisfy the various needs of many business partners as well as clients, we would like to continue to create new value and be the best partner capable of developing together with our customers.

Regarding this division, our major line of products is the films and sheets for packaging materials.

Our advanced materials division has developed the world´s first "all-fluororesin filters", as a result of joint development with a filter manufacturer in 1983. We made a great contribution to the improvement of quality control in the semiconductor industry, against a backdrop of accumulated impurity reduction technology, we have continued to supply high-purity L-grade chemicals (organic and inorganic) to many manufacturing plants as well as semiconductor plants thereafter, in addition to various filters.

Expanding business along with the development of the semiconductor industry, our advanced materials division has been conducting business domestically and overseas in line with the customers´ needs. It ranges from material such as silicon wafers and resists indispensable for the semiconductor manufacturing process to PTFE/PFA parts, facilities such as chemical feeders and various cleaning equipment and coordination and cleanliness control of clean rooms and research facilities.

Also, to provide the revolutionary development products of Auto Chemical Industry Co., Ltd., a manufacturer of our major products such as the one-component urethane sealant "Auton Sealer" series and adhesive agents beyond the customers' needs, the Auton division has been focusing on collaboration in the manufacture and elaborate after-sales service.

The environmental friendliness and safety of our urethane products are widely recognized in the construction industry as well. While developing the environmentally-friendly sealants and adhesive agents in collaboration with Auto Chemical Industry, according to the needs of times, we will make every effort to contribute to the development of the construction sectors.

Finally, our last business division is our Building Materials, which promotes a distribution revolution under the slogan of "change of current" and aims to be the "only one" corporation positively working on even niche business. It further deals with a wide range of functional products and recent environmentally-friendly products to steadily satisfy the customers' requests and roll out useful products. Lastly, our major line of products consists of floor materials, wall materials and housing equipment.

 

As the president of a family business with over 115 years of history, if we were to come back 15 years from now, what goal do you wish to have accomplished for your company?

My mission as the president of The IWATA group is to collaborate with companies as if it were a chemical reaction. We want to create "good chemistry". To continue our growth and fulfil our unchanging mission, we must continue to change. My goal is to use the unknown power of chemistry to create new value in the world.

 

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