Interview with the President

Recognizing Social Change and Issues as Business Opportunities, and Connecting Them
with Continuous Growth and Contributions to Society

Interview

Aiming for a Niche and Top Share in Functional Chemical Products

Yashio Nowadays, plastics have become as indispensable as air or water. What is the history of a company such as yours, a pioneer in plastics?

Fujiwara It hasn't been all that long since plastics were created – 111 years. The oldest plastics were phenol resin, discovered by Dr. Baekeland, a Belgian American in 1907. These were given the trade name “Bakelite,” which is the origin of our company’s name. We are proud to say that we originated from the first company to produce and sell phenol resin, and contributed to the development of global society and people’s everyday lives by creating plastics with even higher functionality, and so it can be said that we are pioneers.

Yashio And you’re at the top of a company with such history. You took up this position this year. Congratulations! What are your ambitions?

Fujiwara It is an extremely heavy responsibility to steer our management, and from now on, I want to push towards continuous growth. Under our previous president, who originally came from sales, we prioritized customer satisfaction, expanded business in existing areas, and promoted reforms of various business structures. In so doing, we strengthened our revenue base, and were able to become a profitable company. From now on, I must first follow our current Business Philosophy and basic strategies in order to achieve continuous growth. Within these, the creation and commercialization of new products is an issue that is both important and indispensable. I come from a technical background. As a technician, I believe that my mission is to create a system that can quickly establish an ultimate goal, that is to say research and development with an eye to commercialization, as the cornerstone of our growth trajectory. If we are able to promote this, I am sure that we will realize both a niche and top share in functional chemical products, and become a company with a robust global presence.

Yashio So you’re not talking about development for development’s sake, and technology for technology’s sake. I imagine that by carrying out research and development with an eye to an ultimate goal, the motivation of your staff will also change.

Fujiwara Yes, that’s right. I hope that if we develop along these lines, they will gain the motivation to be able to contribute to society in this way.

Discovering Customers’ Underlying Needs with a Company-wide System, and Building a Stronger Relationship of Trust.

Yashio To continue, I’d like to ask about your mid-term business plan from 2016 to 2018. What progress have you made?

Fujiwara The mid-term business plan involves making use of the proprietary plastics technology that is our foundation, actively cultivating key customers and working with coordination and cooperation inside and outside of the company with a Business Philosophy that aims to build an even greater added-value business, based on prioritizing customer satisfaction. We have three basic strategies. The first is quickly launching and creating new products. The second is improving profitability in growth areas. The third is regenerating existing business. Fiscal 2018 is the final year of the plan, in which we are aiming to increase operating profits by 20 billion yen; although up until fiscal 2017, we had fallen short of some of our targets in sales, we were able to achieve good results, exceeding our targets in terms of operating profits. We expect to achieve our goals in fiscal 2018.

Yashio So there has been a lot of favorable change. Are there any initiatives for further growth?

Fujiwara Since October 2017, our business activities prioritizing customer satisfaction have evolved, and we have begun One Sumibe Activities for the first time. These activities move away from the boundaries of “each product” or “each business,” providing value across the whole company. Conventionally, we carried out most business vertically, but we have constructed a system that allows us to introduce products to customers from the company as a whole, creating a group that functions laterally. One Sumibe Activities are whole-company activities that promote stronger, trust-based relationships with customers, with everyone from the top management down to entry-level employees working together, aiming to expand business through discovering our customers’ underlying needs.

Yashio You handle a wide range of products, and you also have a large number of business locations both in Japan and overseas; I would guess that functioning laterally will be extremely difficult for you. Is that why you have these One Sumibe Activities?

  • KAZUHIKO FUKIWARA
    President and Representative Director

    He joined Sumitomo Bakelite in 1980. He became the Team Leader of the Biotechnology-related Product Development Project in 2003, Department Manager of S-Bio Development in 2007, Manager and Executive Officer of S-Bio Business in June 2009, Managing Executive Officer in 2013, Director in 2014, and President in 2018.


Fujiwara For example, when a representative from our semiconductor materials business visits a customer as a point of contact representing our company, they are not only responsible for semiconductor materials, but also they keep in mind our company’s various products and solutions, and identify the needs of the company overall rather than just those of the customer’s individual business or department. We then respond to these needs as a whole organization. I expect One Sumibe Activities to expand globally in the future. As you say, our group has a lot of bases overseas. Expanding our business overseas is our strength, but in order to make this into an even stronger weapon, it is important for our employees around the world to be of one mind approaching one goal so that we all move straight ahead. The One Sumibe Activities are the key to this.

Yashio When it comes to plastics, Sumitomo Bakelite really does provide a one-stop solution where people can discuss anything with you. In which business areas do you expect to see particular growth?

Fujiwara At the moment, our company has established three fields as areas where we expect growth: automobiles and aircraft, highly integrated devices centered on semiconductors, and healthcare. Each of these three fields are linked to social changes and issues. Highly integrated devices are essential to the development of the IoT (Internet of Things). We are contributing to the improved reliability, and reduced size and weight of materials for components such as automotive ECU bulk encapsulation, as well as materials for simple devices. Furthermore, we are promoting the practical use of honeycomb panels and parts for seating (low smoke PVC) to meet needs such as more effective fuel efficiency and reduced costs even in aircraft components, the market for which we entered fully with our takeover in 2014. When it comes to automobiles, we regulate CO2 as a way to combat global warming. We perceive this kind of issue as a business opportunity. I believe that anticipating and responding to social and customer needs through business activities will lead to continued growth and contribute to society.
Yashio When it comes to automobiles, environmentallyfriendly models such as electric and hydrogen-fueled vehicles are being released one after another. Are the components produced by your company used in these automobiles, regardless of type, as they are in conventional gasoline cars?

Fujiwara There are of course cases where parts that were necessary in conventional vehicles are no longer needed. However, the need for lighter weight is without a doubt common to all types of vehicles, and is greatly emphasized for electric and hydrogen vehicles. In order to make automobiles lighter (and reduce CO2), we have promoted research and development of metal alternatives that can replace metals with plastics or combinations of metals and plastics.

Yashio If these alternatives and combinations make automobiles lighter, we will be able to have vehicles that are more environmentally-friendly. Is that right?

Fujiwara This has already been put into practice with mechanical components such as brake pistons. Lately, the creation of engines with resin has attracted attention, and our company is carrying out joint research with the Fraunhofer ICT, a world-leading German research institution. We have had success with demonstration experiments, coming so far as to say, “This might work.”

  • KEIKO YASHIRO
    Freelance Newscaster

    She joined TV Tokyo after graduating from the Faculty of Law in Sophia University in 1993. After working as a reporter in the economics department, she was transferred to the announce room.
    She began working as a freelance newscaster in 2003. She specialized in marketing in Hosei Business School from 2002, completing her course in 2004 (DBA Doctor of Business Administration), and was an Associate Professor of Kwansei Gakuin University’s School of Business Administration from 2006 to 2009. She was a special guest professor at Gakushuin University’s Faculty of Economics, Department of Management from 2009 to 2016, and currently teaches as an Associate Professor at Toyo Gakuen University’s Faculty of Business Administration.

Yashio I also like traveling by automobile, but I believe that while many consumers are aware of exhaust fumes, they do not know about measures to reduce them, or that there is great significance in reducing the size of components. They’d be surprised if they asked specifically about this. What about the field of healthcare? This is also an area that has a very close link to our everyday lives.

Fujiwara Our medical-related business has over 40 years of history. We predict that from now on, operations and treatments will be carried out without opening up large holes in patients’ bodies with scalpels, and that these minimally invasive treatments that will lead to reduced hospital stays will increase; we are focusing on developing devices that can be used for these treatments. We are strengthening our product lineup and expanding the scope of its application with items such as a steerable microcatheter with a tip that can move freely and an SB knife for endoscopic equipment. In addition, in terms of products that are closely linked to people’s everyday lives, we are offering film and sheet products. Our freshness-preserving film P-Plus® allows users to keep plant or plant-like products, such as vegetables and fruits, fresh.
Yashio I heard that P-Plus® is being used by convenience stores and supermarkets to package their cut vegetables. Cut vegetables used to go bad very quickly, and I had the impression that when you opened the bag there would be a pungent odor, but recently that hasn’t happened very often. I didn't know that was thanks to the plastic packaging. Since you can also store normal vegetables in a bag in the fridge and they will last longer, it is incredibly reassuring to families that like to cook.

Fujiwara If shelf-lives improve, then we can also export overseas. On top of that, we can contribute to society in the sense that we will be reducing food waste, and so-called food loss.

Promoting Activities Around the World that Contribute to Solving Global Issues

Yashio Food loss is an issue attracting a lot of attention all over the world. Another worldwide issue that’s been attracting attention is the Sustainable Development Goals (SDGs) proposed by the UN. What initiatives are you putting in place in relation to these?

Fujiwara Our CSR activities and business are completely focused on the SDGs, and we’re promoting activities that will contribute to solutions. Our Responsible Care Committee is at the heart of these activities, and we’re also scheduled to link our next mid-term business plan, which will begin in 2019, to the SDGs. It’s important that these activities range across the whole company, rather than just one part. Internally, we’ve started spreading information through our intranet and holding study sessions, and in the future, we hope that our activities will expand worldwide across our whole group.

Yashio This is also in the SDGs, but there have also been strong demands for companies to facilitate diversity and women’s employment. What about these areas?

Fujiwara These are really important points. Humans do the jobs that cannot be done by AI (artificial intelligence) and robots. They say that people, goods, and money are necessary to a company’s success. I believe that people are the most important of these. I like the phrase “people power,” and I use it a lot. People power is the multiplication of motivation, abilities, personalities and characters. Education is essential for us to increase this power. There are a total of 220,000 employees attending classes in our SB School, established in 2007, and we are carrying out an initiative whereby young employees are sent overseas for around two years after they have worked with us for three years or more, allowing them to cultivate a sense of the world. Moving forwards while fostering talent is promoting diversity. We also understand that we should be especially proactive in promoting women’s employment, and we are putting efforts into recruiting female employees.

Yashio I see. I was under the impression that there are not many women in science and engineering.

Fujiwara Previously, the numbers were certainly low. However, there are actually a lot of women who excel in science and math. Gender does not matter in office work or in research. However, if we want female employees to work with us for a long time and excel in management roles, we need to give support to enable them to have a work-life balance, including for childbirth and childrearing. We already have a system in place and are actively offering support, and are proud to say that we have mostly developed an environment where it is easy for women to work.

Yashio I’ve already asked you about a variety of topics, but I was really surprised by the number of functions of plastic. You’ve also really impressed me with the size of your contributions and your support in a variety of areas such as medicine, food, and environmental protection with the different functions of plastics. Finally, could you tell me how you will be steering the company in the future?

Fujiwara Firstly, I want this to be a global company. To accomplish that, we’re actively working to be the first to catch social trends and issues in different areas of the world. As I said earlier, we have a profitable base. Next is a stage of further growth for our company. However, growth isn’t just chasing profits. The importance of our duties, including social contributions and environmental concerns, will increase. This is not anything new to us as a company. By carrying out our Business Philosophy, “Our company places prime importance on trust and sureness, and shall commit itself to contributing to the progress of society and enhancement of people’s welfare and livelihood through its business activities,” as we always have done, we naturally enhance value for all our stakeholders, including our customers. I believe that this will lead to further social contribution.

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