Japan’s biggest printing company is funding a start-up that makes paper out of rock, in a bid to diversify into new materials and as environmental concerns push companies to seek more sustainable products.
Toppan Printing Co., the nation’s largest by sales, will form an alliance with TBM Co. that could see posters, catalogs and stickers manufactured out of limestone, a plentiful material in otherwise resources-scarce Japan. Their ambition is to create a business with revenue of ¥50 billion ($444 million) by the end of the decade, according to a release from the two Tokyo-based companies on Friday.
Toppan will pay a royalty of up to ¥1.5 billion for access to TBM’s Limex technology and the partners will discuss license fees on future products, the companies said.
TBM, established in 2011 by 43-year-old entrepreneur Nobuyoshi Yamasaki, will benefit from tapping its partner’s personnel and facilities, including paper printing and processing technology, Corporate Officer Taichi Yamaguchi said by phone.
For Toppan, which traces its origins to the turn of the last century, it’s an opportunity to get a toe-hold in upstream materials-making, as it seeks to diversify from a business suffering from the digital revolution and dwindling demand for newspapers, magazines and books, according to Yoshiteru Itotani, senior general manager of Toppan’s business innovation promotion division.
“We will be innovating if we are able to manufacture upstream materials,” Itotani said by phone. “We empathize with their vision and President Yamasaki thinks of going global with this Japanese technology, while we are not very good at globalization.”
Itotani declined to comment on the possibility of Toppan taking equity in the smaller firm, but TBM’s Yamaguchi said his company wouldn’t rule it out. Toppan had sales of ¥1.5 trillion in the year ended March 31, while TBM has yet to create much revenue as commercial operations have just started.
Toppan slid 0.1 percent to ¥1,041 by 12:39 p.m. in Tokyo. The stock has declined 7 percent this year.
Limex can substitute for paper and plastic. TBM says that by swapping stone for trees, the water equivalent to the annual needs of 220 million people could be saved if just 5 percent of the world’s paper were manufactured using the new material. It also says greenhouse gas emissions are about 20-percent less than traditional paper printing.
The process of turning stone into paper originated in Taiwan, according to TBM’s web site. Yamasaki began importing the material to Japan in 2008. Having developed its own technology, TBM began commercial sales of Limex business cards in April and says more than 600 companies have purchased the product.
Limex business cards are combustible waste under government rules and there’s no environmental hazard in disposing of them, according to TBM Corporate Officer Takayuki Sasaki. The partners may set up a scheme to recycle any future products used by companies, rather than individuals, he said.