TRANSCRIPTAn Interview withKoji Shinohara
CEO ofEDOGAWA GOSEI CO., LTD.
JAPANConducted by The Worldfolio, for a special report about Japan to be distributed inNewsweek International.
Interview is guaranteed to be published on TheWorldfolio.com, unless requested
otherwise.

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TRANSCRIPTThe Japanese manufacturing spirit or philosophy, known as monozukuri, hastraditionally meant seeking product perfection through craftsmanship. Nowadays,
however, it involves responding to the ever-evolving demands from customers andproviding that added value in the final product delivered. As one of Japan’s leading
paint companies, could you give us your take on monozukuri, please?
I believe that the competitive advantage of Japanese manufacturing is based on shokunin
damashii and omotenashi. I think that these two are the most important fundamentals thathighlight the unique essence of the Japanese monozukuri. Shokunin damashii denotes thespirit of craftsmanship. If you look at this concept on the Internet, you will find that it isan expression that refers to a strong sense of pride and professionalism possessed bypeople who have excellent, specialised skills, and are engaged in manufacturing. It is said
that this kind of awareness is becoming less and less common. It’s less, but if you lookup the people who make traditional crafts such as knife and crockery, you will see thatthat kind of awareness remains. Secondly, omotenashi has become a bit famous in theworld since it was mentioned in a presentation to promote Japan’s hospitality and bring
the Olympic games to Japan. Omotenashi means cordial reception, hospitality, andcustomer service. To add applied sincerity to the act of omotenashi, we apply 'o' to theword motenashi. Omotenashi is commonly translated as hospitality in English, but it is amore preserved and internalised sincere service. I think that these two are the origin andmost important values of Japanese monozukuri. Of course, other factors contribute to thecompetitiveness of manufacturing, but the values unique to Japan, and what I value themost, is the spirit of craftsmanship with a hidden sense of hospitality.
Japan has been subject to intense competition from regional competitors likeTaiwan, Korea, and China. Yet, when it comes to high-technological fields, Japanremains a leader. Why does Japan still dominate when it comes to these niche hightechnological fields?
The explanation for that phenomenon lies in the understanding of shokunin damashii.
Japanese craftsmanship has gone beyond it, where it not only introduces the functional

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side but also adds value-added price to products. It may be deemed as simple as being a
cutting-edge product, but I think most Japanese companies are also defined by their taking
pride and exhibiting aesthetic features for their products. However, from a more global
perspective, some Japanese companies are appreciated by customers because the qualityof their products exceeds their expectations.
Among this vast range of paints you offer, could you please tell us which is yourmain focus? Is it the specialised paints or the more traditional paints; and which isthe best-selling product?
Our core products are our specialty paints which a lot of paint manufacturers do not
produce, especially conductive paint and cutting oil resistant paint. Our main customers
are manufacturers of machines, semiconductor equipment, equipment for home andmedical applications, and other industrial equipment manufacturers. The machining
industry, which was in a bad situation up until about March of this year, has recovered
and is now busy. The semiconductor industry is still doing really well, and I am happy tohear that it will continue to do so. I would like to say that our selling point is the resistanceto cutting oil in the area of special coatings for machine tools, which is a business
opportunity that differentiates us from our competitors. Machine tools are machines for
cutting the oil, and they compete in terms of their system and speed. Cutting oil isessential for cutting, but it is very aggressive to the coating field. Normal paint would
peel off in less than a day once the cutting oil touches the painted part. Many people in
the world do not care if the coating peels off because the machine tools will still continue
to work properly. However, Japanese people are different; they take good care of themachines and tools that they use, and they always clean up and wax the machine toolsthat work tirelessly. Therefore, it is necessary to have a coating film or paint that isresistant to cutting oil – this is where EDOGAWA GOSEI has become most famous. Our
EPOLITE with an outstanding cutting oil resistance has a performance level that is as
good as that of a major paint manufacturer.

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TRANSCRIPTThe LUBRI-ONE, which you launched last November, has an environmental aspect
to it, in addition to its protection aspect, aesthetic appeal, and functional features.
Could you tell us more about this particular product that you launched, and how it
is meeting these environmental standards that are so stringent today, especially as
we move to a carbon-neutral society?
Yes, that is true. The awareness about environmental consciousness and products that arerelated to the sustainability of the ecosystem is now increasing. It is not limited to paintmanufacturing companies, and we are no exception regarding this matter. At EDOGAWAGOSEI we are thoroughly thinking about how to preserve nature and be moreenvironmental consciousness. From the legislative point of view, regulations that relateto eco-activities are growing in many countries. For example, recently, we have not beenable to continue exporting to China because they have been enforcing many strict
environmental regulation. We are putting our best efforts into making EDOGAWAGOSEI capable to create more environmentally conscious products to cater to highexpectations and meet the legislative criteria of countries like China. Moreover, we areworking towards introducing the powder coating for surface treatment which is lesshazardous to the environment. We are doing a technical tie-up with another company thathas powder coating technologies, and these negotiations are ongoing. The tie and reuseapproach is our focus, as well as many companies related to coating manufacturing. We
will be more active in these activities, and we will have a news press release soon.
As Japanese companies look to expanding internationally, we see that they are tying
up with international partners in order to take advantage of their technologies. Are
you looking to partner up with particular companies in certain sectors
internationally? And what role does co-creation play in your product development?
The first attempt of the company to enter the foreign market was going to Thailand. We
went there to increase our sales because there was a company there that was interested in
our products. We are not limiting our expansion to Thailand. Since Southeast Asia has awide variety of sales routes with emerging economies, we are thinking about expanding

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throughout this region. For that reason, it could either be a technical or manufacturing tieup to establish our production capabilities for local production and introduce our products
to local plants.
Although equipment manufacturers are your main customers, it is apparent thatyou are serving many industries, including the medical field and steel pipe makers.
Can you tell us more about your customised service and why it makes you the go-to
partner when it comes to specialised paints?
We are different from the functional paint manufacturers in many ways because ourcompany credo or philosophy, as a paint manufacturer, is to provide our customers withthe best products with the best features to gain their trust. The adaptiveness of the paintas a subproduct is essential in the product customisation. Hence, we take charge midway
in customising and developing specialised paints to meet the customers’ needs. Our
expertise is based on all kinds of information about the paints, coatings, and the final
application of the paint in line with the customer’s requests. Machinery and equipment
are exposed to extreme conditions, which therefore require the highest performing
coating. We deliver well-balanced and quality coating products to our customers.
Do you have any case study that you would like to showcase to us where your paints
are being used?
Currently, we are focusing on conductive paints.
There are many different applications for conductive paints, and even those of us whomanufacture paints do not know about many of them. We would like to introduce a few
examples, but due to confidentiality agreements, we cannot provide details. Common
applications of conductive coatings are electromagnetic shielding and antistatic effects.
Electromagnetic shielding is used in single-lens reflex cameras and medical equipment
to keep electromagnetic waves and electrical noise out, or in other words, to shield them.
The antistatic effect is applied to prevent fires and disorders caused by static electricitydischarge. For example, it is applied to industrial robots that operate in areas whereflammable gases are generated, and to semiconductor manufacturing equipment wheredischarge of static electricity is not allowed.
Recently, I received an interesting inquiry. They want to use conductive paint as a"heating element. Japan is a country with many natural disasters. In the Hokuriku region,
where the temperature drops below freezing in winter, if electricity or gas is cut off due
to an earthquake, the affected area will be in a critical situation.

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Therefore, we are working on a project to provide as much warmth as possible to thedisaster victims by creating a device that can easily generate heat with batteries using theconductive paint we have developed.
It will be a great honor if the conductive paint we have developed can contribute to society
by protecting the human body from electromagnetic waves, avoiding fire and damage
from static electricity, and providing warmth in times of disaster.
We have also started full-scale sales of AQUARECOAT, a water-based tire paint.
It can give a natural texture to the sidewalls of recycled tires as if they were new.
The reuse of tires using AQUARECOAT promotes the reduction of waste rubber andcontributes to the achievement of the SDGs on environmental sustainability.
With the growing need for recycled tires, AQUARECOAT is the best choice for thereclamation and reuse of used tires.
Moving forward, as you develop new products, could you tell us what you see as thebiggest challenge as a paint manufacturer that you need to overcome?
Most of our paints are for industrial purposes and haven’t been introduced to theconstruction field yet because, in comparison, the paint used in construction is cheaper.
However, we are currently getting involved in that business with specialised facilities likehospitals. We are now discussing the possible utilisation of our paints to equip MRI andCT scan rooms where electromagnetic waves are present. The remodelling of these rooms,
which may be putting in new items of equipment, usually takes about two weeks. But aslong as our specialised paint is used, this is no longer necessary, which helps hospitals inmany ways. Due to how demanding the schedule for these hospital rooms are, as you canimagine with the daily and urgent cases that have to be dealt with, eliminating the twoweek waiting time is valuable. It is crucial for hospitals to have all-time access to theserooms.
Still, our company cannot say that we have a stronghold in the construction-related special
paints, so we are now negotiating with a company that already has a considerable
background in construction paint manufacturing. We are aiming to integrate theirtechnologies with ours to develop even better products. Also, we use environmentallyconscious paint.

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What advantages has acquiring POLYCON brought to your business? What was
the purpose behind its acquisition?

Polycon is a company that manufactures additives for inks. This additive has thefunction of adding an anti-scratch effect to gravure inks, which are mainly used for foodpackaging materials.
As with Edogawa Gosei, compounding and dispersion technology is an important issue,
and since we follow relatively similar manufacturing processes, we thought that we
could mutually develop each other's technologies. In fact, prototyping of new products
using the facilities of Polycon and Edogawa Gosei has begun, demonstrating the highsynergy effect.

In 2013, you established a production facility in Thailand. Can you talk to us about
the advantages of having this production facility and what new markets has itallowed you to penetrate?
At that time, shipments of electromagnetic shielding paint to the Thai subsidiaries ofcamera manufacturers were increasing significantly, and we decided to take advantageof the benefits of local production.
We also supply metal coatings to a machine tool manufacturer.
We have invested in equipment so that we can manufacture the products of oursubsidiary, Polycon, at our subsidiary in Thailand, and we are able to respond toinquiries not only from Thailand but also from neighboring countries such as Malaysia
and India.
Having a manufacturing base in Southeast Asia is important for our global expansion.

Could you talk to us more about your strategies for international expansion? Would
you be looking to expand through M&A, joint venture, another production facility,or sales office?
The first thing is to introduce our best features as a company through excellent media
platforms such as yours, so that more people will know about us. In order to do this, it isimportant for us to build our brand as a specialty coatings manufacturer with superior
technology that will enable us to meet the needs of our customers through technology.
In the future, it is important to create new value by forming business alliances with thesame or similar companies that excel in areas where the company is not strong. As ameans of doing so, we believe that M&A and joint ventures to expand development andmanufacturing bases are effective.

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What do the European and the American markets hold for your company?
am familiar with the U.S., having studied there for a short time as a university student.
However, we do not have any direct transactions with them at present.
I believe that the needs for special coatings will increase in the future in the U.S. andEurope as well.
I feel that there is a lot of potential demand for paints with special functions that are also
environmentally friendly, so I would like to communicate more about this in the future.

Imagine we come back in four years for your ninetieth anniversary and have thisinterview all over again. What would you like to tell us? What are your dreams forthe company, and what would you like to have accomplished by then?
I would like to talk about how our specialty coatings are recognized and neededinternationally, and how we can contribute to society through our coatings.
To achieve this, the "spirit of craftsmanship" and "hospitality" are important. By our 90th
anniversary, I would like to feel that our specialty paints are useful in the U.S. and Europe.

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