Our parent company, Shibuya Kogyo, making headlines with its dominance of the Asian domestic market with their unsurpassed Aseptic Filling Systems and the promising future of Shibuya’s sterilization technology combined with regenerative medicine.
“March 15, 2014 4:33 am JST
Shibuya Kogyo Turns Bottling Prowess Toward Biotech Frontiers
TOKYO — Started out as a manufacturer of burners for breweries, Shibuya Kogyo has found success as one of Japan’s biggest makers of bottling equipment.
Now the company, which dominates the domestic market with a proprietary sterilization technology, is turning its expertise to the bold new field of regenerative medicine.
Shibuya Kogyo broke into bottling in 1955 and adapted early to the diversification of packaging materials, with equipment for not only glass bottles but also cans and plastic. It stole market share from such competitors as Mitsubishi Heavy Industries and Kawasaki Heavy Industries, and now 60% of Japan’s filling systems display the “Shibuya” logo.
In January, Shibuya Kogyo kicked off a cost-reduction project centered on its main factory in the city of Kanazawa, aiming to pare down costs by 30%. The move was spurred by a Thai beverage maker’s request for lower prices.
“We’ll simplify the structure of not just filling equipment, but also peripheral equipment such as for liquid processing,” said President Hirotoshi Shibuya.
During a previous project started in 2009, after the global financial crisis, the company redesigned the mechanical parts of its equipment and other areas from the ground up. It shrank by two-thirds the floor area required to install a unit that fills 600 bottles a minute, slashing the production cost by 35%.
The operating profit margin of its packaging-plant business, including filling systems, is expected to climb to 12% for the fiscal year ending in June.
Although Shibuya Kogyo has a knack for cutting costs, its real strength lies elsewhere: technology that keeps the equipment sterile while filling bottles with room-temperature liquids.
Other systems heat the liquid to kill bacteria, but taking heat out of the process means thinner plastic bottles can be used.
The company holds an 80% share of the Japanese market for aseptic filling equipment and has seen strong interest from drink makers in China and Southeast Asia.
This fiscal year, 60% of its aseptic filling systems are expected to be shipped overseas. The units are built at the Kanazawa facility, then assembled on-site.
Since units are custom-made for each client, “if you think about maintaining quality and cost, overseas production is actually very costly,” Shibuya said.
Foreign rivals have approached the firm about sharing technology, but “we compete on our technological ability, without licensing contracts,” Shibuya said.
Branching out into regenerative medicine
The sterilization technology is seeing use in the fledgling field of regenerative medicine, which holds promise as the firm’s next growth engine.
Regenerative medicine entails culturing large quantities of cells. Last year, Shibuya Kogyo started joint development with the Yamaguchi University School of Medicine on cell culturing for liver cirrhosis treatment. It also owns a stake in a venture receiving support from the Riken research institute.
The company plans to promote laboratory research and develop equipment for cell cultivation using sterilization technology.
Sales related to regenerative medicine are expected to total only 500 million yen ($4.86 million) this fiscal year, but President Shibuya plans to boost this to 10 billion yen within five years.
Shibuya Kogyo’s sales this fiscal year will likely climb 13% to 83 billion yen. With its medium-term target of 100 billion yen within striking distance, it needs to find its next growth scenario.
Some investors are starting to take note of Shibuya Kogyo as a biotechnology-related stock. Its price has soared on such news as its work with the Riken-recognized venture.
Capital spending is expected to reach a record 7.1 billion yen this fiscal year, more than triple the previous fiscal year’s figure. The company is building a new factory for regenerative medicine equipment in an industrial park in the Kanazawa suburbs, with completion slated for June.
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