Founded just over a century ago, in 1919, Azumi Filter specializes in the manufacture of filter paper, as well as other filter products and functional papers. A major sector Azumi works with is the automobile industry, which accounts for 30% of its business – but the company is keen to avoid becoming overdependent on a single field, says President Satoru Azumi “The automobile industry continues to be an important sector for us, but we should not fully rely on it, and our slogan for the past ten years has been that we should commit to other industries.” He explains more about the company’s diversification efforts, as well as its products, in his interview with The Worldfolio.
What does monozukuri mean to you and your firm, and what do you believe to be the strengths of the Japanese industry that allows Japan to compete in the global marketplace?
I believe that “high-mix low-volume” is part of our strength. Regarding Monozukuri for us, we do not provide simple paper but filter paper media with functions such as "filtration" and "separation" which are demanded by our customers. Controlled pore size is the concept of our uniqueness in manufacturing activities. We value the art of manufacturing. Three years ago, we celebrated our 100th anniversary under our new slogan “enjoy and master”. With the concept of “mastering”, we place importance on craftsmanship.
What has been the impact of Japan’s aging society and population decline on your company?
Recent labor shortages have shown us the value of human resources over everything else. Human resources is the key element of managing a company. Satisfied employees are more productive, which helps us to grow. To me, that is a virtuous circle, and more importantly, one of our key contributions to society.
I think the domestic market will shrink and there are some ways to overcome it, that is, to penetrate the international market. 30% of our sales come from outside of Japan, but it’s not because of a conscious or targeted strategy. We have expanded business into the European market as well as the Asian market, but without a dedicated sales office. Our customers conduct business through our website. Although we don’t have a sales office, it is not inefficient and we are keen on continuing this method, but we acknowledge that we need to make a more conscious effort to expand to international markets. With a unique and niche product like ours, people think Japanese products are too expensive. But with high quality, we can still be competitive.
Could you tell us more about the OEM and ODM services that you provide to your customers?
We have two sales channels and methods. One is making the ready-made goods directly for customers, and the other is providing solutions with custom specifications. To international customers getting in contact with us through our homepage, we develop products to improve their procedures facing problems.
Your filter papers and products cater to various industries such as fine chemical manufacturing, the service industry, auto industry, and developing electronic components. Is there an industry or application that you are targeting specifically?
Our company excels at high performance and making multi-layer papers. We believe our products are different from other manufactured paper because they are used for auto industries as well as various other industries. We are aiming at the medical field.
How are you able to balance creating functional products with appropriate cost?
I have two good examples. The TH series, filter papers for high viscosity, is suitable for removing gelatinous foreign substances from high-viscosity liquids used as raw materials for films and functional resins. The CE series, activated carbon filter papers, is suitable for improving the quality of fryer oil used in restaurants and food factories. Cooking oil quality directly affects the food served by restaurants. Restaurants need various types of oil and the CE series is excellent for maintaining food quality at a reasonable cost. We are still developing and improving the filter paper to make it more cost-effective.
Since 30% of our sales are to the automotive industry, whose fuel filters require high performance, our coarse and dense two-layer filters with differentiated density are highly valued in the market. The price may be high, but it is a unique product that differentiates us from other manufacturers.
30% of our sales go into the automobile industry, and those fuel filters require high performance, so our two-layer filters are highly regarded by them. The price may be expensive, but they are unique products that differentiate us from other manufacturers.
What changes did the Covid pandemic serve to accelerate for your company?
Even before the pandemic, 30% of our sales came from the automobile industry. It continues to be an important sector for us, but we should not fully rely on it, and our slogan for the past ten years has been that we should commit to other industries. The impact of Covid has been widespread, and we were greatly reminded of that, with Covid giving us a chance to shift our focus to the medical industry.
Covid test kits are widely available around the world, and our filter paper has been used in these test kits. Especially in places where there have been shortages of medical resources such as ventilators, the pandemic itself showed the weakness of Japanese society with its reliance on imports, and now we realize that we need to build a solid supply chain to produce these products at home. We have made investments into producing the ventilator filters, we will start the production and sales of these filters soon.
Are you interested in co-creative ventures and new collaborative partners in the medical field?
In the end, almost none of the products are made solely by us, with good examples being Covid test kits and ventilation parts. All we can do is provide filter paper. To relieve supply chain issues, we work with the manufacturers to provide them with the product and we work with companies that sell these products, so cooperation is crucial. The sale of medical devices is complicated since a license is required, and that’s another reason why we need to work with partners. We plan to collaborate but only if the percentage of our medical products gets bigger.
Could you tell us about your international development strategy?
Currently, our market demands low volume and high mix. I think that North America is an unsuitable market for us, but Europe and Asia have more potential considering our sales practice. At the moment, we do not have any plans to establish any new sales offices outside of Japan, but in the future with our exhibition programmes, we may find an agent with whom we can work together. Of course, we are a technology centered company, and we need to collaborate with an agent that has knowledge of the product and industry and doesn’t just focus on the sales. We want them to have a similar background and knowledge of the industry and the products.
If we were to come back and interview you again on your last day as president of the company, what dreams or goals would you like to have achieved by then?
Japan has only a few filter paper manufacturers, and we want to be the No.1 filter paper manufacturer in Japan. It’s not just about scale or volume, we want to be No.1 in quality and the overall level of the company, as well as being a company where our employees work happily. To us, that is one of the important factors to achieve excellence as a company. If we can achieve that in Japan with our competitive edge in quality and performance, and if we become the number one filter paper manufacturer domestically, we will have more presence in the global market. These are the goals I want to achieve before my last day here.