From small-lot to large-lot demand, we are able to respond flexibly to our trading partners’ needs, fine-tuning orders in accordance with partners’ needs for ingredients and grain size as well. The reason we are able to provide such meticulous service is because
we have many suppliers and distributors both in Japan and overseas. With our experience and familiarity with handling coal materials,
we are expanding our business centered on users. Furthermore, coal coke market price fluctuates sharply, making these difficult materials to handle as a business. On a certain day, there may be a sudden domestic surplus, forcing us to switch from importing to exporting, but Daichu Corporation is able to adapt to changing circumstances as required by utilizing the knowledge and know- how we have accumulated over numerous decades.
We are also expanding business activities that can adapt quickly to new circumstances, such as proactively participating in tripartite trade—something that is impossible for major trading companies. Moving forward, we will further cultivate suppliers and distributors in both Japan and overseas, expanding and enhancing our product lineup. We are also planning to move into Southeast Asian markets, where demand is expects to continue to grow. Aiming to be No. 1 in the coal coke industry, we will place even greater emphasis on our relationships of trust with our trading partners and solidify our reputations as Daichu Corporation for black goods.
We has long been importing graphite electrodes for use in steel manufacturing, carbon blacks, ferroalloys, and other products from
Southeast Asia and supplying these to domestic steel manufacturers. In particular, Daichu Corporation is universally recognized as a pioneer in the supply of China-made graphite electrodes for use in steel manufacturing, a business that we began in 2000 and whereby we import products made with Japanese materials and equipment by Japanese technicians from Chinese electrode manufacturers with which we have concluded agreements.
Since these products are higher quality than general Chinese products, we have secured the top share of the import electrodes market. At the same time, we are also developing various other businesses, including tripartite trade with steel manufacturers in China and Southeast Asia, export of coal coke to electrode manufacturers in China, and export of ferrous and nonferrous scraps to steel manufacturers in Southeast Asia. To achieving decarbonized and recycle-based society, demand of graphite electrode using at electric furnace is getting strong. Compared wtih blast furnace companies, electric furnace companies emit less CO2. Therefore, steel production by electric furnace will increase from now on. We are striving to put power in selling our graphite electrode more. Daichu Corporation trades with virtually all steel manufacturers in Japan and has close ties with frontline technicians through our electrodes sales.
For this reason, we are well aware of frontline needs and are linking this knowledge to sales of materials, such as ferroalloys and carbon black, by gathering information directly about raw materials, secondary materials, indirect materials, and facilities. Our business is characterized not only by its sales, but also by the way it listens to technicians on the frontlines and identifies business seeds. Even for the same product, we aim to provide better-quality products in order to increase sales without becoming embroiled in a price war.
We are expanding our environment-related consulting business based on the two pillars of handling recycling products and selling products for use in counteracting environmental problems. Industries, such as steel manufacturing, paper manufacturing, construction, and plants, generate industrial waste on a daily basis. Daichu Corporation proposes, constructs, and operates business models whereby these waste materials are recycled for use by other industries. For example, we commission cement manufacturers to recycle steel slag generated by steel manufacturers and sludge/incineration ash generated by paper manufacturers into raw materials for cement.
Paper sludge generated by paper manufacturers is carbonized, reused, and sold to steel manufacturers as heat insulating materials. All of these environmental businesses were born as the result of exploration for methods of effectively utilizing waste materials. We were able to realize cross-sectorial industrial waste recycling matching precisely because Daichu Corporation has companies in a broad range of industries as trading partners. A representative environmental recycling product is paper manufacturing materials (used paper). Daichu Corporation handles more than 6,000 tons per month of used paper collected from the six prefectures in the Tohoku region and then supplies the used paper to paper manufacturers in Japan or exporting it to Asia.
In addition, we sell activated carbon and industrial-use pharmaceuticals for various uses as products to counteract environmental problems to companies in many industries, and we also import products from overseas. In future, it is anticipated that the rapidly increasing coal-fired power plants and biomass power plants will generate huge amounts of boiler ash. We are currently collaborating with the research laboratory of a major cement manufacturer to discover effective methods for utilizing boiler ash.
With the launch of the Feed-in Tariff Scheme (FiT) for Renewable Energy in 2012, biomass power plants have been appearing one after throughout Japan. The main businesses of our Biomass Business are importing Palm Kernel Shells (PKS)—a biomass fuel— and selling them to power plants throughout Japan. PKS fractions remain after palm nuts have been crushed to extract their oil. Indonesia and Malaysia together produce more than 80% of the world’s palm oil production volume. In collaboration with companies in Indonesia, Daichu Corporation carries out strict
quality control of locally produced PKS, which we then import to Japan and sell. Since PKS was previously disposed of as a by-product, quality was unstable and only ingredients and water content could be controlled.
However, through trial and error in collaboration with local subcontractors, we came to handle PKS that is a material with high- energy content and good combustion efficiency with as little foreign matter as possible. Now, our product is evaluated as high quality PKS. Demand for PKS has skyrocketed from 450,000 tons in 2015, with demand expected to reach 5.1 million tons in 2022.
Moving forward, we will endeavor to continue securing multiple suppliers and expand our distribution routes, maintaining our position within the industry. Furthermore, it is regarded as a certainty that demand for not only PKS but also other biomass fuels such as pellets and chips will also increase in the future. To enable Daichu Corporation to meet these demands, we are pursuing tie- ups with partner companies overseas.