Editor-in-Chief Moment丨 Dialogue with Kazuhiko Sudo, Chairman of Toray China: New materials usher in a new layout under the dual carbon target

The rapid development of emerging industries represented by a new generation of information technology, new energy, intelligent manufacturing, etc., puts forward higher requirements for materials, as one of the two major "chassis technologies" of manufacturing, new materials are also the material basis for supporting the development of strategic emerging industries and high-end manufacturing industries.

For Japan's Toray, which was founded in 1926 and has been nearly a hundred years old, whether it is UNIQLO's HEATTECH series explosive products or the composite materials for the main bearing structure of the Boeing 787, it has more and more confirmed its previous judgment that materials have the power to change lives.

Of course, materials also have the power to change companies. Carbon fiber, which took more than half a century of research and development, has made Japan Toray a global industry giant today. According to the data of statistical agencies, its carbon fiber world market share is as high as 30%.

At present, the practice of creating new industries with large-scale forward-looking research and technology development investment has ushered in a huge external variable - China has proposed to strive to achieve carbon peaking by 2030 and carbon neutral double carbon targets by 2060. This will create a broad market for the accelerated commercialization of new materials, and also pose higher challenges for the research and development of new materials.

In such a time window that requires faster research and development speed, higher challenges and greater possibilities, as one of the global material giants, what technical reserves and product reserves is Toray doing? In which areas will it be laid out and breakthroughs?

Recently, Kazuhiko Sudo, Executive Executive Director of Toray Corporation, General Representative of Toray Group China, Chairman and General Manager of Toray (China) Investment Co., Ltd., was invited to participate in CBN's Editor-in-Chief Moments, and had a dialogue with Yang Yudong, Editor-in-Chief of CBN, on these topics. （Y=Yicai，T=Toray）

Y: At last year 's (2020) Expo, Uniqlo showcased a huge ultra-light down jacket, and at this year's (2021) Expo, Uniqlo showed some new products, such as HEATTECH's innovative clothing for moisture absorption and heating technology. In fact, behind these UNIQLO hits (the materials used) are all fibers provided by Toray. How did Toray develop these fibers at that time?

T: In the production of new clothing, the development of materials and technology are indispensable. With such technology and the ability to develop entirely new functions, the collaboration between the two companies began.

Among them, including the HEATTECH thermal underwear series that was also displayed at the Expo. The original idea was for Uniqlo to develop a thin, warm, comfortable and unprecedented underwear. To this end, Toray began the development of new materials and tried more than 10,000 trial productions. The final recognition was a product that combined 4 fibers. In fact, including the dyeing process, the development of this material technology is extremely difficult. HeatTECH, as an unprecedented new underwear product on the market, achieved a new breakthrough in the cotton-based clothing market at that time. For Toray, this opened up a comprehensive supply of yarn to sewing between us and UNIQLO. Since its release in 2003, HEATTECH is now the main hit product of Uniqlo with hundreds of millions of sales.

Y: Toray has a very strong technology investment for many years, the continuous cycle time and intensity, we know that the cycle of this technology investment is relatively long, such as carbon fiber, Toray from the early 1960s began research and development, in 1971 only began large-scale mass production, the use of Toray carbon fiber material 787 model in 2011 successfully first flight. There are many such cases. How does Toray solve the problem of time difference and balance between such a long R&D investment cycle and the commercial benefits required in the process of enterprise development?

T: In the case of Toray, taking the carbon fiber you just mentioned as an example, we started developing carbon fiber in the 1960s. Carbon fiber is an excellent material that weighs less than iron, but is 10 times stronger than iron. From the early days of its development, we have been based on the needs of the times, looking forward to the future environment and energy saving factors, and believe that carbon fiber will definitely make a difference in the aircraft and automobile fields. With a firm belief in the future to provide materials to the world, our research and development originated from this.

Whether it is the specific processing of the material or the method of use, these undoubtedly invest a lot of time. The carbon fiber developed by Toray has been used continuously before entering the large passenger aircraft market, such as fishing rods, golf clubs and other sports products, while selling them to obtain revenue, to reserve the future development of products, such as the aircraft field with the largest market demand. Therefore, carbon fiber can be said to have undergone a long period of research and development.

As a company that started as a fiber company, in the early days of fiber entrepreneurship, we developed new materials in the fiber field and put them into market application. Subsequently, we began to venture into the field of resins and started to produce films. In the process of rapidly setting up new businesses and entering the market and growing, what we do is to continuously obtain benefits and promote new material research and development, which is very important.

Y: Toray entered China in 1994, and it has been 27 years since then (as of 2021), Toray has always regarded China as an important overseas market, and has established a number of production and sales bases. This year (2021) is the first year of China's "14th Five-Year Plan", what is Toray's plan for the current and future Chinese market and layout?

T: Toray has been officially entering the Chinese market since 1994 and has been in the market for 27 years (as of 2021), and now we have 38 group affiliates in China with nearly 10,000 employees.

China's 14th Five-Year Plan mentions that China's economy will build a domestic and international double cycle, which will be promoted under the guidance of the policy of large-scale economic expansion.

Under China's dual-cycle concept, if we continue to promote opening up to the outside world, trade will be more liberalized and the level will be higher. As far as the environment for The development of Toray's career is concerned, I think China is undoubtedly the most suitable place. In particular, China's domestic demand is large, and is still growing significantly, we will steadily develop high-quality materials to the market, and we will strive to do a good job in the future. We want to deliver the high added value, strong technical strength, high quality and service of our materials to the millions of people in Chinese society.

Y: Now, in order to better meet the needs of the Chinese market, more and more foreign companies are strengthening research and development, some are "InChina, ForChina", some are InChina, ForGlobal. What is Toray's R&D strategy for the Chinese market?

T: Toray's R&D policy is linked to our business management philosophy. Looking at the business advancement in China alone, R&D is closely related to the materials manufacturing industry and has become increasingly important. As early as 20 years ago, after Toray settled in Nantong, we opened a fiber research institute in the local area, and then we also set up a cutting-edge materials research institute in Shanghai. In these two research bases, we continue to carry out research and development to meet the needs of China, which is our idea and has been implemented to this day.

We are developing materials that can contribute to the environmental problems of China and the entire planet, which we call green innovation. In addition, we call this the life science innovation business that can contribute to the creation of a safe, safe, healthy and long-lived society. In China, our R&D team is in discussions with customers from all walks of life and promoting R&D in line with the Chinese market.

Y: Toray is a material manufacturing company that has always emphasized that "Toray materials have the power to change lives". What new materials are currently being developed by Toray? What scenarios will it be used in? How to change the future of life? At the same time, China's "double carbon" goal is a business opportunity for Toray, a business opportunity. Or is it the adjustment of the industrial layout?

T: At present, China has proposed the "3060" double carbon target, aiming to achieve carbon peaking in 2030 and relevant policies to achieve carbon neutrality in 2060. Among them, I think that energy policies that reduce fossil resources such as coal will become the top priority. At present, the implementation of power generation methods such as solar power generation and wind power generation is accelerating. In the application of materials related to these power generation devices, we have thin films, electronic information materials and carbon fibers that have been applied to various scenarios and will further contribute to this field. There is also a point about clean energy policies. For example, the construction of a new type of factory that uses solar and wind power generation for water electrolysis to produce hydrogen energy, and the green hydrogen energy-based energy will create a hydrogen energy society, which is widely used in many fields such as homes and automobiles, and I think this is the general direction that China will be committed to next. In this field, today's best opportunity to play its part, we have a library of materials such as carbon fibers used in hydrogen storage tanks, thin films used in hydrogen energy manufacturing, carbon dioxide separation membranes and so on. The research and development we are focusing on at present is exactly in line with the development of the times, and we are full of expectations for the future.