Eco-friendly strategies prove profitable for some Japanese firms

Faced with rising costs or difficult market conditions, a number of Japanese companies have improved their prospects by adopting environmentally friendly business strategies, with some going as far as moving into entirely new industry sectors.

A distiller in southwestern Japan and a precision equipment maker in the country’s northeast are among the companies to have successfully pivoted in new, eco-friendly directions.

Kirishima Shuzo Co, producer of “shochu” liquors, is making use of methane gas generated by the sediment left over from the fermentation of sweet potatoes used to make the distilled spirits.

“During the day we use all the generated gas as fuel at our shochu factory. And in the night, when the factory is not in use, we fully run our three generators to produce electricity from the gas and sell it to Kyushu Electric Power Co,” said Takayuki Okumura from the company’s green energy department.

The facility of the distiller based in Miyakonojo, Miyazaki Prefecture — including huge cylindrical tanks to ferment the waste and a round tank to store the gas — helps it pursue zero-emission and combat global warming.

The company, which used to dump the fermented byproduct, or lees, in the sea or give it away to local farmers for use as fertilizer, says it began studying ways to better use the waste from 1996.

In the 2000s its shochu production rose due to increased popularity and the central and local governments tightened regulation on shochu waste, such as banning its use in fields.

The brewery tried unsuccessfully to carbonize the lees into agricultural fertilizer.

In 2006 the company built a shochu lee recycling plant for methane fermentation but it initially did not find sufficient use for the gas and just burned most of it.

Kirishima Shuzo then introduced a system to deliver the methane gas to be used as fuel at its own factory, almost halving its gas purchases as a result.

The company also began generating electricity with the gas and selling it to Kyushu Electric in 2014 through the government’s feed-in-tariff, or FIT, system introduced to encourage the use of renewable energies following the March 2011 Fukushima nuclear crisis.

Under the FIT system, power companies are obliged to purchase electricity produced from renewable sources at a fixed price for a certain period of time.

“We came up with the idea as we thought we can recover our investment since the price will stay unchanged for 20 years,” said Hidetaka Tahara, director of the green energy department.

The investment costs were roughly 10 billion yen including building of fermentation and power generation facilities.

The company currently disposes of about 650 tons of waste per day, producing energy equivalent to electricity for 12,000 households on a daily basis.

The recycling system not only helps combat global warming, but also financially benefits the company.

Tahara said if the company outsources the disposal of shochu lees as industrial waste, the cost would be 10,000 yen per ton or more.

Since the company began using gas generated on its own and selling electricity to the local utility, the disposal cost of the lees has been equivalent to around 1,500 yen per ton, he said.

Kirishima Shuzo has earned 250 million yen annually through electricity sale.

The company plans to install a facility that can dispose of additional 400 tons of waste a day next August.

Elsewhere, New Tech Shinsei Inc., a precision equipment maker in Yonezawa, Yamagata Prefecture, has been producing wooden blocks for children’s toy since 2011, using local trees cut for forest thinning.

New Tech Shinsei, founded in 1980, used to be a subcontract factory for a major manufacturer to produce precision equipment such as print circuit boards for TVs, mobile phones and notebook personal computers.

The company began the production of the “Mokulock” blocks after its business prospects were clouded by a series of mergers among major electric appliance makers and severe price competition with Chinese rivals.

“Honestly, it wasn’t for the environment at first, but rather for us to survive,” company President Akira Kuwabara said.

“We looked for a new business, but one concerning electronic devices was difficult due to price competition with Chinese makers. We sought something in which we can utilize our technology and know-how in quality management, and something we can do in Yonezawa.”

It then decided to begin producing wooden toys for children, he said.

The company jointly developed a technique with Yamagata University to keep the optimal amount of water in wood and increase its strength.

At its factory, a computer-controlled cutting machine automatically carves out pieces of wood into blocks, accurate to one hundredth of a millimeter.

The blocks are made of six different trees such as cherry and maple, and broad leaf trees are harder and have a fine grain, according to New Tech Shinsei.

In 2015, the toy blocks won the Fil Vert “Green” itinerary award at an international toy exhibition called the Maison and Object Paris, being commended as “sustainable.”

“Compared with plastic blocks, ours are actually expensive, but the purely wooden products are very popular,” Kuwabara said.

The product is currently sold to about 30 countries around the world.

“If the sales of blocks rise to account for more than 10 percent of our total sales, they can grow to one of our core businesses,” Kuwabara said.

The company aims to boost the annual sales of the product to 300 million yen.

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