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Products and Technologies

Dialogue with the President

Dialogue with the President

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President Yamamoto (at left) and Professor Kanie at Denka’s Head Office in June 2019

  • President Yamamoto (at left) and Professor Kanie at Denka’s Head Office in June 2019

Denka’s Manufacturing Operations:
Creating Value for the Future

  • Norichika Kanie + Manabu Yamamoto
  •  
  • The Denka Value, Denka’s corporate philosophy, is in accord with the spirit of the United Nations Sustainable Development Goals (SDGs) that were set for 2030 to guide international efforts aimed at achieving a sustainable society. In this dialogue, we invited Professor Kanie, who is Japan’s leading SDG researcher, to share his insights with regard to what sustainability initiatives businesses should take on.

  • SUSTAINABLE DEVELOPMENT GOALS

SDGs Serve as a Compass

Yamamoto: I think that the SDGs are a set of well-thought-out goals serving as a compass for businesses seeking to contribute to sustainability. Japan’s chemical industry has a number of corporations that are similar in size to Denka, each boasting unique and promising technologies that could constitute a significant social contribution. However, such corporations might find it difficult identifying how to best utilize their technologies in the context of sustainability. I believe that the SDGs will greatly assist them in this identification.

Kanie: Exactly. As the pursuit of the SDGs helps corporations determine their direction, the SDGs can be likened to a compass. The most important point about the SDGs is that these future goals have been agreed upon by all UN member countries around the globe. Accordingly, I think the SDGs effectively represent what our society will be like in the future.

Yamamoto: I believe that in order for Denka to achieve growth, it must pursue specialization. We are therefore specializing our businesses in a way that addresses needs of people around the world, aiming to deliver technologies and products that improve their living standards and bring greater value to them. I think this coincides with the concepts underlying the SDGs.

Kanie: That’s right. Also, the SDGs can be utilized to expand the scope of fields in which Denka can contribute to society in the way you discussed. For example, a combination of highly functional infrastructure and energy-saving solutions may give rise to unconventional ideas and businesses. The SDGs consist of a total of 17 goals encompassing a broad range of fields. These goals allow businesses to choose from a variety of options with regard to their approaches to sustainability. The pursuit of the SDGs can also involve supply chains. In this light, I praise Denka’s process reforms undertaken as part of an overarching strategy.

Yamamoto: Currently, we are developing a biostimulant* technology that is expected to simultaneously help increase food production volume and reduce environmental burdens. I believe this is exactly the kind of technology supporting the realization of the SDGs. In Japan, a number of chemical companies boast considerable accumulated technologies backed by long track records spanning more than 100 years. Although I suspect that some of their technologies have not yet realized their full potential, I expect the SDGs to provide businesses with insights into how to utilize such technologies.

  • *According to the website of the Japan Biostimulant Association, biostimulants are a new technology that controls abiotic stresses imposed on plants and thereby reduce damage inflicted on them due to climate or soil conditions to help cultivate healthy crops.

Taking Full Advantage of the Period Leading up to 2030

Kanie: What is good about the SDGs is that they represent long-term goals for 2030. We can take advantage of time. Even though the SDGs will not be realized right away, businesses can still spend decades working toward the betterment of society. It is only to be expected that they will face some criticism about what has not been done or what is lacking. Nevertheless, it is important for businesses to clarify their commitment to taking on forward-looking initiatives aimed at realizing the SDGs.

Yamamoto: Indeed, we can rely on the SDGs to identify our future ideals as they are supported by the international consensus. This is quite helpful as we can be confident about our conclusions on Denka’s long-term visions.

Kanie: Today, ESG-oriented investment is attracting growing public interest. Because of this, stakeholders’ attention is being directed to the long-term visions businesses are now pursuing. I also believe that businesses taking a forward-looking stance toward sustainability will attract the support of a growing number of stakeholders.

Yamamoto: In 2016, we established The Denka Value, clarifying our corporate philosophy aimed at ensuring that all of our activities will eventually help us improve our track record in environmental, social and governance (ESG) aspects. Currently, we are striving to ensure that this philosophy is embraced by all employees. Although we have previously struggled with finding correlations between our initiatives associated with CSR, materiality issues and ESG issues, I think the SDGs have helped us smoothly coordinate these initiatives.

Kanie: While the SDGs encompass matters associated with ESG, they are focused on identifying universal goals in addition to meticulously specifying fields in which businesses can make contribution. I find it encouraging that Denka utilizes the SDGs in the course of putting its corporate philosophy into practice. However, it is quite challenging to ensure that such a philosophy is embraced throughout the organization. I understand this kind of challenge, and believe that both businesses and researchers, including myself, must play their part in collective efforts aimed at communicating the importance of sustainability not only to a circle of major corporations but also a broader business community, including small and medium-sized corporations. Once employees understand the significance of their duties in terms of contribution to society, however, I think they will be more motivated than ever before.

Yamamoto: I have sometimes seen frontline workers who are only minimally informed about how their products are actually used. To facilitate their understanding, I have asked managers to provide their staff with robust information about how their products contribute to society.

Kanie: I have heard that researchers engaged in technological development often tend to get lost in the details and lose the bigger picture of what they are doing. Management should help them incorporate a long-term perspective so that they clearly understand what they are contributing through their duties. This type of input affects working styles and, of course, helps to motivate them even more.

Yamamoto: Denka formerly maintained a more traditional focus, looking simply to achieve growth in terms of size and cost reductions. However, this approach has proven ineffective in the face of global competition. Denka has thus positioned specialization as an essential strategy that will empower it to thrive well into the future. However, any success due to specialization can quickly become moot if we fail to keep on working on said specialization. Therefore, we also need to nurture human resources capable of taking on this endeavor. To this end, we are pushing ahead with thoroughgoing process reforms and work style reforms by employing AI, IoT and other advanced technologies. In particular, our process reforms, which aim to standardize procedures and make it easier to check operational status, are also expected to greatly help us promote diversity.

Kanie: In short, Denka began placing stronger focus on quality to compete against quantity. Incidentally, a growing number of consumers have been shifting their focus from quantity to quality. Furthermore, although MDGs, the precursors of the SDGs, placed relatively stronger emphasis on quantity, the SDGs are obviously focused on quality. Although it is well understood that superior quality lends a manufacturer competitive advantages, Denka’s pursuit of specialty goes in tandem with its policy of employing a combination of diverse technologies. While the fear with specialization is that excessive focus may result in a lack of flexibility, Denka is avoiding this pitfall as it strives to simultaneously acquire strength and realize the potential of its technologies via specialization.

Yamamoto: Denka had previously adopted a silo-based organizational structure and was almost unable to employ synergies arising from intersectional collaboration. Some of our technologies thus remained underutilized. Today, however, Denka is focused on boosting synergetic effects under keywords “collaboration” and “reform.”

Kanie: Great. This is exactly the approach needed to facilitate organizational chemistry.

Achieving Growth in Tandem with Stakeholders
  • Kanie: The SDGs have an important underlying policy of leaving no one behind. Although Denka has positioned healthcare as a priority field, its operations in this field represent a typical example of social contribution through business activities, considering that pharmaceuticals become more available in step with market growth. This will save an expanding number of human lives.

    Yamamoto: In line with the Denka Value-Up management plan, we aim to become a specialty-fusion company capable of achieving sustained and sound growth. Specifically, “sound growth” means achieving corporate growth without sacrificing the happiness of any stakeholders. Moreover, we aim to achieve corporate growth while helping stakeholders thrive. This is our ultimate goal.

    Kanie: The SDGs do not necessarily represent a business’s performance targets. However, the SDGs serve as benchmarks that guide businesses concerned with sustainability to accurately reach their genuine goals. The SDGs are just like a series of triangles painted halfway down a bowling lane to help players accurately aim for the pins. We have seen the increasing deterioration of the global environment along with a growing fear of resource depletion as well as global warming and other climate change phenomena. Taking these factors into account, the success of international efforts to be undertaken in 10 years from now will be extremely crucial to human society. I rate Denka highly as it aims to achieve sustained and sound growth via a variety of process reform initiatives while giving an eye to these circumstances.

  • Manabu Yamamoto

Creating the Future of Denka

Yamamoto: Denka recognizes an imminent threat arising from environmental problems. Among these, Denka considers marine plastics to be a pressing issue that must be addressed. In addition, Denka operates cement production facilities. Although these facilities emit a volume of greenhouse gases, they also produce cement via the effective utilization of industrial waste. For every 1 million plus tons of cement manufactured, these facilities process 500,000 tons of industrial waste. We are considering how to better utilize their capabilities. Also, Denka’s hydroelectric power generation facilities, which produce clean energy, supply nearly half the electricity consumed by its manufacturing operations. However, dependence on these energy sources may also expose Denka to an existential threat if the volume of rainfall fluctuates significantly due to climate change.

Kanie: The problems Mr. Yamamoto has mentioned, such as marine plastics and climate change, cannot be resolved by a single corporation. The SDGs also emphasize partnership. I would like to encourage Denka to act as part of cross-sector partnerships involving a variety of entities, such as governments and NGOs. Such partnerships will better position Denka to resolve these issues. Furthermore, I expect the new technologies or solutions that Denka creates in the course of said pursuits to become global standards. Generally, Japanese corporations are not good at establishing global standards compared with their peers in Europe and the United States. I hope that one day Denka plays a leading role in the worldwide popularization of innovative solutions that help resolve global problems.

Yamamoto: Ideally, I would like our stakeholders around the world to be proud of having a relationship with Denka. This dialogue has bolstered my confidence that the SDGs will serve as a helpful tool guiding us toward this ideal. Looking ahead, we will utilize the SDGs to become a global company leading the way to the betterment of society.

(Held in June 2019 at Denka’s Head Office)

  • Norichika Kanie

  • Norichika Kanie
    Professor, Graduate School of Media and Governance, Keio University

    Concurrently serving as a Senior Research Fellow at United Nations University Institute for the Advanced Study of Sustainability, Professor Kanie previously served as a lecturer and assistant professor at the University of Kitakyushu. He was also an associate professor at Tokyo Institute of Technology’s Graduate School of Science and Engineering prior to assuming his current position. He has been appointed to a number of public positions, including as a member of the Japanese government’s SDG Promotion Roundtable Meeting, the Cabinet Office’s Council for Evaluating, Researching and Discussing Local Government SDG Promotion Initiatives, and the Ministry of the Environment’s SDG Stakeholders Meeting.

デンカ株式会社, デンカ株式会社 IR室
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