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| Chairman Okuda inspects research results at an executive worksite visit in October 2001 |
The Biotechnology and Afforestation business
is a distinctive element in the Toyota organization. Automotive manufacturing,
which belongs to the field of mechanized industrial production, and
agricultural biotechnology seem at first sight to be unrelated.
But looked at in a different way, these two disparate areas make
an excellent match. In April 2002, Toyota published a medium- to long-term
business plan called the Global Vision 2010, in which the company
looks ahead to the advent of a "recycle-oriented society." In light
of this key phrase, Toyota's entry into the agricultural biotechnology
field can even be seen as inevitable. This key phrase is also the
starting point for our efforts as well as the final goal that Toyota
is aiming to achieve. |
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| How Toyota and Biotechnology Came Together |
In the summer of 1996, Toyota Venture
Enterprise Fund head administrator Kozaburo Tsukishima (now General
Manager of the Biotechnology and Afforestation Business Division),
who was responsible for new business projects, was entrusted with
a mission by Toyota president Hiroshi Okuda (now Chairman). The mission
was to think of a business project that would help solve problems
of food and water supply.
Why food and water? According to Tsukishima, "This is probably because
the Chairman is in touch every day with informed opinion from around
the world and thus has a critical awareness of issues that will have
a future global impact. In a conversation with a certain analyst,
Chairman Okuda once said, "Japan needs to always have technology that
can lead the world; if new technologies are continually created, particularly
in such areas as bio- and environment-related technology and nanotechnology,
Japan will have no trouble in continuing to make its way in the world."
It is not difficult to imagine that underlying the words "food and
water" is a clear vision of the advent of a recycling-oriented society
and Toyota's role in it. |
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•Areas of Toyota Activity in Biotechnology
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| Saving the Earth with Sweet Potatoes! |
An
investigation into the business potential of sweet potatoes
and other foodstuffs was immediately begun. This process turned
up a scientific paper by Professor Toyoki Kozai of Chiba University
Faculty of Horticulture entitled "Sweet Potatoes to Save the
Earth in the 21st Century." The main points of the paper were:
(1) The manufacture of biodegradable plastics from sweet potato
starch would become common; (2) Hydrogen derived from sweet
potatoes by way of alcohol would become an energy source for
fuel cell and electric vehicles; and (3) Sweet potatoes would
be developed as a livestock feed as an alternative to corn.
This seemed like an attractive business prospect worth giving
a try, and right away a relevant business vision, including
development of livestock feed, was drafted and brought to Chairman
Okuda. His answer after seeing the document was just two words:
"Thank you." With this simple phrase, Toyota's Biotechnology
and Afforestation business was set on the path to realization.
In January 1998, a Biotechnology and Afforestation Business
Department was established within the Business Development Division.
It was a small beginning with just seven staff members to start
with. |
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•World Cereal Balances
Source: World agriculture: towards 2015/2030 - Summary Report (FAO, 2002) |
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| Search for an Original Approach as a Late Starter |
So how was a new business started
from scratch in a completely new field? One important factor was the
Toyota corporate culture in which there is a strong orientation toward
new businesses. Chairman Okuda himself has said, "We must not become
prisoners of our own success; the greater the success a person has
had, the more that person insists on their own way of doing things.
But when the situation changes, that way doesn't work anymore."
However, there were many issues associated with being a late starter
in the development process. The first task was to narrow down the
scope of the project. It was essential to hone in on some area within
the field where Toyota would not be following the lead of other companies,
and which offered a potentially large market in the future. After
researching the overseas and domestic markets, the patent situation,
and other factors, it was finally decided to select agricultural biotechnology
as the area within biotechnology to focus on. |
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| Active Recruiting of External Talent |
Securing
human resources was also an urgent task. Unlike the automotive
field, where the basic technology is already well established,
research in biotechnology is advancing quickly. In order to
see income benefits at an early stage, it is essential to develop
technology full of originality. To achieve this, an outstanding
team was assembled by recruiting new graduates as well as seeking
cooperation from other related companies.
In the field of biotechnology, there are a number of areas
in which researchers are quite content to dedicate themselves
even if it is not clear that their work will be useful in the
future. With the limited number of staff, however, there was
no possibility to engage in research in such areas. Instead,
researchers were actively recruited in areas capable of delivering
results. Patent rights were acquired from other companies where
required. From Shimadzu Corporation, for instance, personnel
were recruited for the development of biodegradable plastics
and the relevant patent rights were acquired. In May 1999, less
than one and a half years after the creation of the department,
the Toyota Biotechnology and Afforestation Laboratory was completed.
The original seven staff members had now grown to more than
thirty. |
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Toyota Biotechnology and Afforestation Laboratory |
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| Business Development Centered around a Biotechnology Core |
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| Harvesting sweet potatoes in Indonesia |
The
business developed at a rapid pace. First, in August 1998, the tree-planting
company Australian Afforestation Pty. Ltd. was established in Australia,
and the planting of eucalyptus trees began in partnership with Nippon
Paper Industries Co., Ltd. and Mitsui & Co., Ltd. In October 1999
came the founding of a floriculture business, Toyota Floritech Co.,
Ltd., in Aomori. These ventures were designed to strengthen bio-related
technology and the business base. In April 2001, P.T. Toyota Bio Indonesia
was established to work on developing livestock feed from sweet potatoes,
followed in December of the same year by Toyota Roofgarden Corporation,
established to work on the creation of roof gardens. In June 2002,
there followed the establishment of Sichuan TOYOTA Nitan Development
Co., Ltd. to excavate peat in the Chinese province of Sichuan. The
idea was to use peat, with its excellent moisture retention properties,
in rooftop greening.
In this way, the scale of the business was expanded, with affiliates
established at the rate of almost one every year from the time of
the establishment of the Biotechnology and Afforestation Department
in 1998 through 2002. And the process did not stop with the establishment
of the companies — within a few years all of them had guaranteed profitable
prospects and laid down a stable business base. There are now 352
related patents, either granted or pending, and the technology base
is also steadily being implemented. In the last five years, the number
of staff in the Biotechnology and Afforestation Division has reached
70, and is around 300 when affiliated companies are included. |
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| Sweet Potatoes: A Powerful Secret Weapon |
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| Growing sweet potato seedlings |
The Biotechnology and Afforestation business
has thus begun to develop on many fronts, but there is one area that
has the potential for future development as a major business: the
development of biodegradable plastics. This project is being advanced
together with the development of livestock feed being carried out
in the sweet potato business. This development of biodegradable plastics,
in the words of Tsukishima, is a "secret weapon with the potential
to become as great a homerun batter as Hideki Matsui (a leading Japanese
baseball player)." As well as resolving food problems, it is also
a project essential to the advent of a recycling-oriented society.
 See
details of each business |
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