National

Japanese firms find profits in going green

Kyodo

Faced with rising costs or difficult market conditions, many 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 northeast are among companies that have successfully branched out into new, eco-friendly directions.

Kirishima Shuzo Co., producer of shōchū liquor, is making use of methane generated by sediment that is left over from its fermentation of sweet potatoes, used to make the distilled spirits.

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

The distiller based in Miyakonojo, Miyazaki Prefecture, uses its facility — which includes huge cylindrical tanks to ferment waste and a spherical tank to store the gas — to pursue zero-emissions and combat global warming. The company used to dump the fermented byproduct, or lees, in the sea or give it away to local farmers for use as fertilizer, but says it began studying ways to better use the waste from 1996.

In the 2000s its shōchū production rose due to increased popularity. The central and local governments tightened regulations on shochu waste, such as banning its use in fields. The distillery tried, unsuccessfully, to carbonize the lees into agricultural fertilizer.

Then in 2006 the company built a shōchū lees recycling plant for methane fermentation, but initially it did not find sufficient use for the gas and just burned most of it away.

Kirishima Shuzo then introduced a system to deliver the methane 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. That system had been introduced to encourage the use of renewable energies following the March 2011 Fukushima nuclear reactor meltdowns. 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 will be able to 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 ($88 million), including building fermentation and power generation facilities. The company currently disposes of about 650 tons of waste per day, producing energy equivalent to the electricity use of 12,000 households on a daily basis.

The recycling system not only helps combat global warming, but also benefits the company financially. Tahara said if the company outsources the disposal of shochu lees as industrial waste, the cost would be ¥10,000 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 per ton, he said. Kirishima Shuzo has earned ¥250 million annually through its electricity sales.

The company plans to install a facility next August that will be able to dispose of an additional 400 tons of waste a day.

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

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

The company began the production of the Mokulock blocks after a series of mergers among major electric appliance makers and severe price competition with Chinese rivals cast a shadow over its business prospects.

“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 related to 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.” The firm then decided to begin producing wooden toys for children, he said.

The company developed a technique together 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 using wood from six different types of tree, including cherry and maple. 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, and recognition for their sustainability, at an international toy exhibition called the “Maison&Objet Paris.”

“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 become one of our core businesses,” Kuwabara said.

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

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