PVC compounds that meet diverse needs

Japan is a world leader in manufacturing due to the strengths of its monozukuri and kaizen philosophies, including in the field of functional materials. Why are Japanese companies succeeding in this field?

Japanese companies have excelled in the functional materials field because Japan dominated the world of consumer electronics in the 1970s, but this sector experienced a decline in the 1990s and we had to shift our mindset to making unique products that were not being developed by others. Functional materials were one of these products. In addition, land, and other natural resources as well as electricity are expensive in Japan, therefore people strive to excel in niche fields by applying efficiency and added value.

You manufacture PVC compounds with different applications. Could you tell us what your bestselling product is and what applications for your products do you foresee as having the most potential?　

In terms of quantity, our bestselling product is the soft moulded compound used for electrical wires. Due to climate change and shocks such as the COVID-19 pandemic, Japanese companies are returning to Japan for manufacturing after having ventured into global markets. About five to ten years ago, we were producing about 1,000 tonnes of product for the medical field, but that compound was going overseas. However, to avoid risks, Japanese companies are trying to manufacture domestically because there are restrictions on importing dialysis-related products as well as blood bags.

Soft moulded compound used for electrical wires

When we spoke to Sano Yoshihiko, president of Nipro, he emphasised how Japanese healthcare companies are becoming increasingly global. How are you adapting to this trend?

We have worked with Nipro before, and we were told that they have customers outside of Japan now. They are expanding towards American and European customers, so it is crucial to cut down costs as well as make our products available to their factories worldwide. They are expanding actively in Vietnam, Bangladesh, India, China, and all around the world, therefore it is very important that we can provide services to them locally. Generally, it is important for the medical industry to focus not only on Japanese companies but think globally and look towards European and American companies too.

What would you say are the competitive advantages and unique qualities of your products?

Our biggest strength is that our product has a wide range of applications, and we accept every request, regardless of the lot size. We can sell our compound to any company – we never say no. Currently, we are collaborating with over 20 companies. These companies are scattered all over Japan, therefore, in case a natural disaster such as an earthquake were to affect a certain region, we can lower the risks by having multiple facilities in different parts of the country. We can also supply our products to our customers more quickly.

We started our product line-up with PVC, which is one of our customers’ top choices as it is easy to work with and cost-effective. However, given the changes taking place in society, we have felt the need to diversify; we have created a halogen-free compound called MAXIRON, which customers require to be similar to PVC in terms of cost-effectiveness and usability, and we have been able to cater to those requests.

Halogen-free compound MAXIRON

Last year, former Prime Minister Yoshihide Suga declared Japan’s goal to reach carbon neutrality by 2050. In addition, there are many international standards that regulate hazardous materials in plastics. How is MAXIRON contributing to meeting these environmental demands?

We have made the resin lead-free and cadmium-free. While there are several companies that can produce non-PVC materials, our advantage is that we have an extended history of working with medical companies and making PVC compounds, so we know what the industry’s requirements are. With that knowledge, we were able to develop the MAXIRON series, which are non-PVC, eco-friendly compounds that meet the requirements of the medical industry and are also applicable to other industries as well. 

Furthermore, our customers require that we abide by international regulations, especially the European Union’s Restriction of Hazardous Substances Directive (RoHS), and we are keen to do so. We have a designated team that works on keeping up with and acquiring information on regulations, which tend to change quite often. We strive to meet those requirements promptly.

R&D is a key part of your business since you create compounds that are tailored to different industries’ needs. Could you describe your R&D strategy?

We have more personnel working in our R&D Department and Quality Control Department than in the manufacturing and production team. Most of our Quality Control Department is focused on guaranteeing compliance with international regulations; for example, we spent a long time ensuring that we meet all RoHS standards. We have three R&D teams: one works on the hard moulding compound, another on the soft moulding compound, and the other on the non-PVC compound.

In terms of our management system, we have a meeting once a month where the technical team brings forward new equipment requests for their facility and we purchase everything that is needed right away. This year, we spent ¥200 million on such equipment.

R&D activities

You collaborate strongly with your customers and co-development is part of your business strategy. What kind of partners are you currently looking for?

We work with major Japanese trading companies such as Mitsubishi, Mitsui, and Marubeni. They open the gates for us to access new clients and work as intermediaries to connect us to foreign companies. We work with the companies we have been connected to and believe this has been effective. Therefore, we will continue to do so in the future.

We have a particularly strong presence in Southeast Asia. We have our central factory in Vietnam, but we are also in the Philippines, Indonesia, Singapore, and Malaysia. We are also conducting talks with Brazil about requests for our product there, so are evaluating whether to go there or not.

As you mentioned, you have offices all over Asia, including in Vietnam, Thailand, China, and Hong Kong. Are there any international locations you are looking to go to next?

As I mentioned, we are considering Brazil, but we have also been conducting talks about establishing plants in the United States. We are also interested in the European market, especially Germany, for the medical equipment field. At the moment, we are exporting compounds for hot water bag made of PVC which can be used to warm the body while sleeping and this product has become unexpectedly popular in Europe: whereas in Asia children normally sleep with their parents, in Western countries they sleep by themselves, so this hot water bag is put into stuffed animals for children to snuggle and stay warm. Therefore, the materials need to be harmless, and we use non-hazardous additives for this purpose.

Hot water bottle

We believe our products have many other potential applications and we are interested in developing new ideas. In fact, we are in contact with a German trading company operating in Vietnam, and we have been working with them in this sense.

A new product we developed recently is the non-hazardous electrical wire compound EM. Although we have completed the development phase, we are facing a shortage of silicon raw materials, so it will take about a year to launch the product which will be sold to electrical wire companies as a cover-up material that can also be applied to 5G and 6G wiring. Given the high volume of information travelling through the wires, these must be made smaller. There are three companies that produce high-frequency wires in Japan, and they all have been coming to us requesting such specifications.

What are your goals as you look towards your 70th anniversary in 2026?

Our goal is to maybe have a factory in Brazil by then and achieve 40 percent domestic market share. We are currently at 36.4 percent, and to achieve our goal we must reach an extra 1,000 tons in Japan. In addition, while we have the biggest domestic share, we do not have the largest overseas market share, and our aim is to gain achieve this goal as a Japanese company.

If you are interested in purchasing compounds from Showa Kasei Kogyo, please contact the company using its online inquiry form, which you can find on the company’s homepage. The company has two English speaking staff members in its East Japan Office, who took part in this interview, and West Japan Office. They will contact you after receiving your inquiry.