Our venture began in 2007.
Our current headquarters and laboratory are located at Osaka University. We also have a plant in Suminoe, Osaka, from where we ship actual products. Initially, we had 2 employees that eventually increased to 41.
In March 2014, we launched the world’s first large-scale microwave chemical plant in Suminoe, Osaka We raised a capital totaling to ¥1.2 billion in June of the same year.
We have also started a joint venture for manufacturing food additives with Taiyo Kagaku Co., Ltd., as well as joint development with the world's largest chemical manufacturer, BASF. We are pleased to say that our business is rapidly growing.
We are now working on commercializing a microwave process, which, at the start of our venture, was considered difficult to apply industrially.
Meeting Tsukahara, the co-founder
After graduating from university, I started my professional career at Mitsui & Co. where I was put in charge of chemical products. I felt satisfied in that position.
However, my desire to take on a new challenge grew and I, despite it being a reckless decision, quit my job and went to the U.S. .
While studying for my MBA, I observed the way venture firms impacted the world by commercializing new technologies and services This solidified my will to take on a similar challenge.
Upon returning to Japan in 2006, I met a certain man through a mutual friend.
This man was Tsukahara, the co-founder. He had been researching on microwave chemistry at the Osaka University Graduate School of Engineering.
Tsukahara was different from any other researcher I had ever met. The man was more determined than I know. To be precise, Tsukahara truly wanted to change the world through the seeds of an idea nurtured at the university.
Over the course of the next 12 months, we began communicating with each other frequently. I still shudder when I think about how high those phone bills were.
Nevertheless, our desire to change the global chemical industry became unshakable and to on to the company in 2007.
Starting from a single room
The project started from a room in my apartment.
Tsukahara and I funded all ¥6 million of our startup capital personally. The shortfalls had to be covered by procuring funds from a public funding program. When we received a funding from a government institution we were constantly asked certain questions like “Where is the research and development taking place?”. And to add to that, “A room in an apartment is not going to cut it. “We will have to cut you off unless you open a lab.” Just a month after founding the company, we were on the verge of becoming defunct.
Subsequently, we were able to overcome this obstacle by rentinga laboratory at Osaka University.
One year after the founding the company, we thought things might be looking up. But then came the Lehman Shock.
We were unable to procure any additional funds for some time.
Yet we were somehow able to survive through the help of VC firms, financial institutions, and the aforementioned governmental institution.
By 2012, we had moved our headquarters to the Osaka University campus where our laboratory is. It was the time to get up to speed with commercialization.
The hurdle of commercialization
The application of microwave technology in manufacturing chemical products requires increasing the scale of the apparatus.
While we were developing an apparatus for the purpose of increasing the scale of microwave equipment, we ran into a huge problem. The microwaves could not pass through the apparatus.
However, we were not in a position to fall while receiving from the country.While I was at a loss, Tsukahara came to me with great news.“The microwave went through!” he said.
I can still remember that feeling of relief I felt with my entire body.
We kept increasing the scale of the apparatus through trial and error thereafter.
By the spring of 2011, we were successful in scaling up to the point of launching a facility capable of producing 2t/day of chemical products within the Kobe Manufacturing Factory.
Obstacles of business model
Our current business model is to license and establish J/V, yet this wasn’t always the case.
Initially, we thought of utilizing microwave technology to produce biodiesel by using waste products from the plants of chemical or food manufacturers and selling it on the spot. It was our main focus then. However, our idea was completely thwarted.
“What is a microwave? Isn’t that bad for your health ?” “I don’t want something I don’t understand in my plant.”
It is difficult for a new technology, such as a microwave apparatus, to be accepted in a conservative manufacturing environment.
We then pivoted to produce biodiesel ourselves, yet the biodiesel market was not going anywhere.
Subsequently, instead of selling products, we reached a business model of selling the process itself; selling the knowledge of how to use microwaves in a production process to chemical manufacturers.
The obstacles of being the pioneer —creating a precedent where there wasn't one
It was now up to us to knock on the doors of chemical manufacturers with this business model. Unfortunately, another problem occurred.
When we told the person in charge that energy consumption and plant area can be cut by 1/3 and 1/5, respectively, the initial response was favorable and development got off the ground.
However, in response to “Which plant is this technology being used in?” and the answer “Your company will be the first”, development was bluntly stopped.
In essence, adopting the technology will not happen without a precedent. In a way, it was obvious that there was no precedent for an attempt at the application of a technology that does not yet exist, but lacking a precedent is a big hurdle in the chemical industry, which is full of legacy systems.
We call this “the obstacle of the first plant .”
To prove that microwave chemistry is a feasible technology, we came to the conclusion that we had to build a plant ourselves.
This goes against the conventional wisdom of the start-up world that technology ventures are more likely to succeed by sticking with research and development. Building our own plant was a big decision that greatly shifted the direction of our company.
The obstacles of procuring funds
When we went to procure funds for the construction of the new facility from financial institutions and venture capitals, we were meet with rejections. We were told that it’s impossible for a venture firm to build a chemical plant alone.
At the time, hardly any VCs or financial institutions would even talk to us.
However, in 2011, UTEC (University of Tokyo Edge Capital) valued our technology and potential and we were finally able to find an investor.
With the funds for the plant in place, we encountered a big problem just before construction began.
The deal for the land procured for construction of the plant fell through, and we were forced to look for another . We had made a promise with the financial institution from which we procured the construction funds.) Not being able to construct the plant according to the initial schedule meant we would lose both face and funds, which would in turn put a stop to commercialization.
We asked for the cooperation of everyone involved and were barely able to get a block of land for the start of the construction of the plant.
Our company started out using the experimental facility at the laboratory at Osaka University. By 2014, we had completed the world’s first large-scale microwave chemical plant in Suminoe, Osaka.
—a small company going up against global companies
From the spring of 2014, we began shipment of a product (fatty acid ester), which was to be used as a raw material for ink, from the Osaka plant to a major domestic ink maker, Toyo Ink Co., Ltd.. Newspapers are being printed using the product we made with microwaves.
Subsequently, we launched a pilot facility using microwaves in Suminoe.
Gradually, the knowledge that microwaves are really being used in production started to spread throughout the chemical industry. Recently, there have been inquiries from numerous makers of electronic components used in TVs/smartphones, fuel, and material for foods about whether they can also produce materials using microwaves.
In August 2014, we entered into a joint development contract. It was for polymers as a raw material for plastic and the like with BASF, a world leading German chemical maker.
Our relationship with BASF began in 2011. At first, like many other chemical companies, BASF thought in terms of the conventional wisdom of the chemical industry, scaling up the manufacturing process using microwaves is difficult.
However, upon a visit to our facility during the completion ceremony of the Osaka plant, a BASF representative was surprised about just how far technological development here had progressed. From there, things led straight to joint development.
In 2015, we plan to launch a mass production plant as our 2nd plant jointly with Taiyo Kagaku Co., Ltd., a food material manufacturer, and are planning other projects with various manufacturers.
Make Wave,Make World
～innovate the global chemical industry～
Following in the footsteps of the Osaka plant and the 2nd plant, we are now preparing to launch 3rd and 4th plants.
The location of these plants is not limited within Japan; we plan to expand overseas and with our sights set on Southeast Asia.
The aspirations we had at the founding of the company are still what drive us: “Use microwaves to change the way things are made in the world,” “Start a new technology venture in Japan.”
The global market size of the chemical and energy industry is estimated at ¥500 trillion. If just 1% of that can be replaced with microwaves, the industry would be worth ¥5 trillion.
That is our current goal.
Make Wave,Make World.
We will continue pursuing challenges
to innovate the global chemical industry.