Top Message

With all of our employees focusing on tackling environmental issues, approaching social issues and delivering innovative products that enhance lives, we will continue to fulfill our responsibilities and commitments to all stakeholders and significantly contribute to a truly sustainable society. I believe this will lead to have the company survive the next 100 years.

Takasago International Corporation,
President and Chief Executive Officer
Satoshi Masumura

(Source: Takasago Sustainability report 2017-2018)

Takasago launched its new three-year-management plan this April. The plan is the final phase of “The Takasago Global Plan” that started in 2009 culminating in 2020 - its centennial anniversary. In a recent interview, Satoshi Masumura, President and CEO of Takasago International Corporation looks back at the history of Takasago and shares his thoughts on what the next 100 years will look like.

Looking back the latest mid-term management plan, GP-3

- The Takasago Global Plan consists of 4 phases of three-year mid-term management plans. How do you look back GP-3 which had been completed by March 2018?

The first phase named GP-1 strengthened the foundations while the second phase GP-2 enhanced the Takasago brand. Under the third phase GP-3, we worked very hard to rebuild stakeholders’ confidence as a fire occurred at the Hiratsuka factory in 2013. We implemented preventive safety measures and resolved many other issues.

On the financial side, net sales of 141.6 billion yen and operating income of 6.4 billion yen fell short of the initial target of 160 billion yen and 7 billion yen respectively.
Operating income had, however, steadily increased since the first year of GP-3.

We continued to reinforce our business foundations with active and sustained capital investments both in Japan and overseas. We also made sure that the lessons learned from the Hiratsuka fire were all implemented and taken into consideration in the planning and construction of the Takasago West Japan factory in Hiroshima. At the same time, efficiency improvements were pursued from production to logistics with the installation of the latest automatic compounding and materials handling machinery. Takasago West Japan, Hiroshima was specifically chosen as the site for this new factory in consideration of various aspects such as location. In the Iwata factory, a new manufacturing building for the pharmaceutical intermediates was built to meet the increasing demand.

Other than Japan, we actively invested in overseas areas with high potential for business growth such as India, Indonesia, China and Germany.

In India, our new flavors and fragrances factory and laboratory started their operations in 2017. In Indonesia,laboratory and office were relocated and expanded to further strengthen the local activities. Land for a new factory in Cikarang was also acquired. The major expansion and renovation of the German facility was also completed in 2017.

- How do you express your thoughts and views about the new mid-term management plan started this April?

Our new mid-term management plan is named One-T for “One-Takasago.” My goal for One-T is to unify all of our global business activities under one organization - a truly global Takasago. Under this plan while adhering to 5 basic policies of Customer Satisfaction, Business Growth Strategy, Technological Innovation, Profitability Improvement and HR Development, we have placed the“Corporate” function in the center of these policies. To realize “One-Takasago,” we must strengthen cooperation and collaboration between our affiliated companies, develop better global communication, standardize our workflow and systems and unify global business management by functional areas. The newly set up Global Integration Headquarters has been tasked to speed up this entire process.

- Where do you see Takasago’s growth to come from during the One-T period?

The Japanese market has been shrinking. With this, our group needs to strongly focus on our overseas business for our continued and sustainable growth. The global flavors and fragrances market is however expected to continue to expand and this market growth will continue to give us opportunities as well.

Our industry has initially been developed mainly in Europe and the USA. Takasago was one of the first few Japanese flavors and fragrances house that laid their overseas foundations early on. Taking this advantage, we develop and provide the highly valued products that meet the demand of countries including the fast growing Asia and continuously growing Europe and U.S. This is the basic idea of “Business Growth Strategy.”

To achieve these goals, we already broke ground for a new factory in Indonesia and started a study for a construction of new QC and logistics center in Germany. With these and other future major capital expenditures that will ensure stable profits, we will aim to achieve net sales target of 170 billion yen. This is not an easy target to achieve as it is 20% higher than the level for GP-3. I strongly believe our employees will continue to be the driving force for One-T and am convinced that setting the higher targets encourages our employees to continue to aim high.

- For the global expansion, isn’t there an urgent need for human resources development and training?

Allocating suitable employees to appropriate positions is a key to promote global expansion. In One-T we will enhance our efforts during GP-3 to make the best use of the group’s human resources and to provide an environment where our employees can fulfill their potential not only locally but also globally through such as cross-border personnel transfers. With the opening up of opportunities globally and the training programs working in conjunction with diversity and inclusion and the Japan Government sponsored “work-style reform,” Takasago will continue to provide employees with opportunities to grow to their full potential within the Takasago organization.

- How do you intend to deliver“Customer Satisfaction” being a flavors and fragrances company?

Aromas are everywhere. Good flavors are required for delicious processed foods and flavors and fragrances can be used as part of a wholistic approach to medical treatments. I strongly believe our products can and should significantly contribute the “quality of life,” in other words, well-being of people. As our corporate philosophy“Contributing to Society through Technology” indicates, we aim to bring “customer satisfaction” to another level by contributing to well-being of the global consumer -enriching their lives with our flavors and fragrances and peripheral technology.

What is most important for us is the trust from the customers. Our vision to become a leading flavors and fragrances company in the world by 2020 contains not only numerical targets but more importantly, targets that will enable us to consistently be the partner of choice by our key customers across the globe. To realize this, we will further enforce sales and R&D functions, consistent quality management and swift and flexible actions.

Sustainable Technological Innovation through “Open Innovation”

- What are your thoughts on “Takasago’s Technological Innovation” to achieve continuous growth?

As we continually strive to develop new technologies and products to meet future market needs and trends in a constantly changing business environment, it is very important for us to recognize and appreciate the fundamental value of aromas and how they can enrich our lives. “Contributing to Society through Technology” - this has been the corporate philosophy behind our almost 100 year history. Enriching people’s lives across the globe sustainably will then be the continued focus of our research and development.

Aside from the cooperation within the Takasago group globally, the “One-T” plan strongly promotes open innovation where we collaborate and look for synergies with other companies, different industries, research institutions and universities in the development of unique aroma based technologies and products that enrich people’s lives. An example that comes to mind is in the field of brain science where research on the effects of aromas is conducted. Leveraging the synergies in such areas with academic institutions will surely expand the utility and value of our products.

We will continue to create unique and competitive technologies and products by focusing on 3 innovation areas: “Concept” in which we create new value by chemically analyzing and evaluating human senses,“Product” in which we embody the Concept and finally “Process” in which we strengthen safety, environment-friendly and efficient production technologies.

- What do you see to be Takasago’s original technologies and their capabilities of the future?

We have been and will continue to improve our manufacturing processes - seeking more efficient and sustainable ways to manufacture our products using processes with better heat and conversion efficiencies with less waste. As an example, we continue to improve on our continuous flow reaction technology which is in line with green chemistry trends and recommended by US Food and Drug Administration (FDA). We also have been working toward laboratory-scale practical use of flow micro reactors and gas phase reactors. Our unique catalyst technologies help to reduce the number of production processes and raw materials. Supplying the catalyst products to a wide variety of industries contributes to the resource and energy savings for our catalyst customers.

The increased use of biotechnology is essential to create our new and unique chemical compounds. The future of Takasago is very much focused on the use of biotechnology and biotechnology derived products in the manufacture of our flavors and fragrances. The acquisition of US-based CIT(Centre Ingredient Technology, Inc.), with its highly advanced fermentation technologies, knowledge and manufacturing technologies is a step towards this direction. We will continue to accelerate the product development and production of our fermentation based materials. We have and will continue to deploy Japan developed technologies to CIT and commercialize new bio-ingredients.

- What kind of responsibility and contribution should flavors and fragrances business owe to the“ecosystem”?

We conduct the collection of unique aromas from the endemic species in Ogasawara Islands, Rebun Island and other locations. The purpose of this activity is to pass the aroma of endemic species down to the generations without hurting the plants we collect them from. The meaning and value of aroma by itself, not only flavors and fragrances, in the ecosystem is an activity that encourages the preservation of biodiversity. This initiative could encourage many people to actively participate in the conservation of the ecosystem and nature. We are continuing this aroma collection activity as one of the important sustainability activities that can be done only by us who are considered “aroma experts.”

Our commitment to strengthening the sustainability position

- One of the targets of the One-T medium term plan is to promote sustainability activities. How do you plan to implement this globally?

Takasago is fully committed to improve our sustainability position in all aspects of our operations. Sustainability is a key part of our corporate social commitment and responsibility.

Broad-ranging measures are necessary throughout the entire supplier chain from development and production to customers, even disposal. With our Basic EHS Management Policies, Takasago published the Environment Statement in 2002 with our guiding principles. We published our “EHS 100 Plan” in 2009 and have been working with a high level of consciousness. The “EHS 100 plan” also includes provisions of basic human rights respect and coexistence with local society and plays a central role of our CSR mid-term plan.

In 2013, we expanded the coverage of our environmental report to a “Social and Environmental Report” to disclose information not only in the environmental aspect of our operations but also on the social aspects as well. During the One T Period which is also the final (4th) phase of “EHS 100 Plan,” we are accelerating our activities to achieve the goals of all the items. While continuously addressing global environmental issues, we have extended our scope to include social issues such as “Responsible procurement” and “Diversity” under the plan. As new initiatives, to promote the activities based on COP 21 which is an international framework associated with climate change, we have initiated plans to acquire the SBT (Science Based Target) certification and to implement third-party validation of GHG emission.

Takasago joined the UN Global compact in June last year. With this, we have incorporated SDGs goals into our business activities and are promoting R&D activities that use renewable sources and reduce the environmental impact of our products and processes. We will continue to actively consider joining global initiatives and incorporating them into our daily business activities. Takasago is also moving forward with the improvement of information disclosure. We published the first sustainability report in English in 2017, and this year, we published a report that conforms to GRI standard.

- Takasago had a fire accident in 2013 at Hiratsuka, Japan. How did this event changed the way you treat safety issues within the group?

To ensure that the lessons learned from the 2013 fire in Hiratsuka Factory are not forgotten and to instill safety awareness, Takasago designated April 10th as “Takasago Safety Day.” The activities on the “Takasago safety day” have been conducted in our oversea affiliates in 2017 as well. We are additionally targeting to obtain OSHMS (Occupational Safety and Health Management System) certification throughout the entire group and further enhance global safety activities and standardize operation during the 4th phase of the “EHS 100 plan.” With respect to safety, there is no way to ensure 100% safety thus what we could do is to continue with our Kaizen activities in this area. We will develop a safety culture throughout the entire organization through continuous training and education of all our employees to ensure that “Safety is Our First Priority.”

A message for the centennial anniversary

- What are your thoughts on the upcoming 100th anniversary of Takasago in 2020?

Looking back our history, we have strengthened the corporate power by always selecting the best way at each moment and repeating that. Guided by our corporate values of “TRUST through TECHNOLOGY and TEAMWORK” that our corporate logo called “Square-T” represents, by working not individually but as a team, with the entire organization’s focus on the execution of the “One-T” medium term corporate plans and goals, we will firmly take steps to meet head on the social, environmental technical and other challenges that we will face in the next century. With all our employees having “contributing to society” always being in their consciousness, all of them will be proud of their contribution to society through their work. These contributions to social value will lead to an enhanced corporate value for Takasago.

As a leading and socially responsible company and with all of our employees focusing on tackling environmental issues, approaching social issues and delivering innovative products that enhance lives, we will continue to fulfill our responsibilities and commitments to all stakeholders and significantly contribute to a truly sustainable society. I believe this will lead to have the company survive the next 100 years.