High quality chemical raw materials for a range of industries
What is the NIKKOL GROUP version of monozukuri? What are the strengths and competitive advantages of your company that allow you to be competitive in the international market?
Our monozukuri is a reflection of the values of our company and is seen through our products. We are a B2B niche company. Our ingredients are used by other companies and then delivered to end users to meet their needs. Thanks to our monozukuri, we contribute to society by alleviating pain, creating a more comfortable life and bringing happiness to people. Our personal care ingredients are absorbed directly into the skin, so we pay close attention to the quality and safety of our products. We must also ensure that we maintain a stable supply. Our chemical manufacturing plants are very demanding when it comes to the implementation of 5S (5S consists of the following five elements starting with S: seiri, seiton, seisou, seiketsu and shitsuke, which means in English to organize, tidy up, clean, clean and discipline) and have a clean work environment. Many chemical compounds are produced around the world, but ours have undergone rigorous testing before being approved.
Can you give us an overview of the structure of NIKKOL GROUP and the role of the different companies that make up the group?
NIPPON SURFACTANT INDUSTRIES is our parent factory. We have two factories located in Tochigi Prefecture, and they do most of the manufacturing of our products. Evaluation and testing is carried out by Nikoderm Research. The company evaluates the safety and effectiveness of the ingredients in our products. The other four companies that make up the group are Bergerac Japan under license from Chroma Durlin (France), Nikko Chemicals Shanghai and Nikko Chemicals Singapore.
When you became chairman in April of this year, Nikko Chemicals and Cosmos Technical Center merged to create the current holding company structure. Can you tell us more about the motivation for this merger?
Until March this year, one of our company called Cosmos Technical Center was doing R&D. We had another separate company called Nikko Chemicals which focused on sales. This configuration lasted about 20 years. There are advantages to having companies independent of each other and focused on their own profitability, but society has changed, and it now forces us to make rapid adjustments in terms of R&D. It also requires us to consider environmental factors and keep up with changing laws and regulations. Many of our customers need a quick response, so we decided to combine our sales division with the R&D division to meet their demands. We hope to improve the quality of our products through this synergy.
How has Japan’s population decline impacted the quality, security, stability and speed of your business? What are the challenges and opportunities for GROUPE NIKKOL when it comes to responding to the changing Japanese population?
We have been diversifying and recruiting for some time to address the labor shortage. We are actively recruiting foreign workers. As they tend to stay with us longer, we will continue to accept foreign workers. There are many potential talents abroad. We are also diversifying our manufacturing. However, there is a limit to this. We try to move to automation and robotics wherever possible. We integrate data analytics and RPA (robotic process automation) into our business processes.
You announced your participation in the EDDI (Emulsion Dynamics and Droplet Interfaces) project in March, an international university-industry collaboration sponsored by the European Space Agency. How did you get involved in this project as the only Japanese participant, and what role do you play in it?
In fact, it does not generate any profit at the moment. What we get out of it is empowering employees to achieve their hopes and dreams. Our main products are surfactants, and we have developed one-of-a-kind surfactant with high purity. High purity surfactants are widely used in academic research. Because our product is well known in the academic field, the EU space agency asked us to join the EDDI project. The purpose of the research is to investigate the effect and movement of surfactants in space and as part of a study to better understand the future possibilities of humans living in space. Another project we are currently working on is in collaboration with the University of Florence on the cleaning of historical paintings. We are developing a surfactant to only remove dirt and dust on the surface of paints without damaging the paints themselves.
What role does collaboration play in your business? Are you currently looking for new partnership opportunities with foreign organizations or companies?
Most of our collaborations are with foreign companies. We created a joint venture, Aprinnova, with Amyris from the United States. It is an industrial bioscience company. We combine their biotechnology with our colloidal technology to develop a new substance. Ten years ago, a product was developed and sold on the market called “NIKKOL Sugar Squalane”. It comes from shark liver oil and acts as a moisturizer. It can now be extracted from olive oil and rice. We have developed a more sustainable squalane sugar. We produce it by fermentation of sugar cane. Aprinnova was developed to ensure a stable supply of squalane products. Sugar squalane is now preferred over olive squalane in Japan.
What is the current focus of your R&D? Is there an ongoing project you can share with us?
The development of sustainable ingredients is our priority. By combining biotechnology with our colloidal technology, we want to develop a new type of sustainable material. We have established a joint venture since 2016 which focuses on the development of a new squalane, NIKKOL SUGAR SQUALANE.
Are you actively seeking overseas joint ventures?
Yes, we are interested in pursuing overseas collaborative projects with attractive companies.
You began your presidency with a three-month confinement in Shanghai and a war in Ukraine. As a company with a global distribution network and global sales manufacturing, how have you mitigated and managed the logistical disruptions affecting your overseas business?
Our business has been heavily impacted as we import the majority of our ingredients. We conduct risk management in terms of PCP (preventive control plan). We secured a secondary supply chain to which we could switch for our main ingredients. If a country has problems, we can source our ingredients from other sources. Our products are not only used in cosmetics but also in medical and pharmaceutical industries, so stable supplies are very crucial. We have established good relationships with our suppliers and communicate with them often for the latest updates that may affect our production. We diversified and stockpiled to adapt. Additionally, we have our two main factories in Japan, but we also have our factory in Singapore which supports Japanese production. Our risk management was triggered by the Great East Japan earthquake. This experience has allowed us to diversify our supply and production channels. We only have two factories in Tochigi, but we have ten warehouses strategically located around Japan, allowing us to diversify, mitigating risk where necessary.
How have you mitigated the effects of COVID? Many pharmaceutical and cosmetic ingredient suppliers we spoke with mentioned that this was a silver lining in many ways, especially in terms of increasing demand for personal care products. . Can you tell us about the impact covid has had on your business?
Many Japanese cosmetic companies are our customers. On average, our sales haven’t dropped much. We saw a drop in sales of lipsticks, blushes and sunscreens, but there was an increase in demand for moisturizers, shampoos and conditioners. Nationally, we saw only a slight drop in sales. On the other hand, the United States, Europe and China recovered from COVID quite early, so there was an increase in demand.
Can you tell us more about your international expansion strategy?
We have built a network in over 50 countries. We are particularly focused on five countries in Asia: China, South Korea, Thailand, India and Indonesia. In addition, we have developed marketing strategies tailored to each specific country, such as holding seminars, creating local websites, etc. We are considering the possibility of establishing local bases in order to better penetrate individual markets.
Your company is celebrating its 76th anniversary this year. If we come back in 4 years, what goals and dreams would you like to have achieved by then for your business?
As part of our medium-term plan, we have 25 targets or goals by 2030. When you come back in four years, I would like to have achieved most of these goals and made significant progress in the rest.