Catalonia, the land chosen by Toyobo as a base to accelerate its global strategy

This article is a translation of a full interview that appeared in the Nikkei online newspaper in Japan.　

Having traversed the long and challenging road of the textile industry recession, Toyobo has steadily gained profit by shifting its focus from textiles to chemicals and then to life sciences. The fruits of this self-transformation were clearly demonstrated in Japan and abroad with the August 2013 announcement of the acquisition of Spinreact, a diagnostics and diagnostic equipment manufacturing and sales company in Catalonia, Spain.

Catalonia proved to be very successful during the industrial revolution. Since the 1980s, Japanese manufacturers of automobiles, chemicals, and other products have entered the region one after another, with a cumulative total of more than 200 companies.

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In recent years, the area has also attracted attention as a destination for life science-related companies, with Kaneka Corporation establishing a lactic acid bacteria research and development company (AB-Biotics SA) in 2018 and AGC Corporation establishing a pharmaceutical API manufacturing company (Malgrat Pharma Chemicals, S.L.U.). Moreover, in 2008 Towa Pharmaceuticals acquired two generic drug companies (Corporación Químico Farmacéutica Esteve, S.A. and Pensa Investments, S.L.).

Why, then, did Toyobo choose to acquire a company in Catalonia? The purchase was based on some very logical goals.

“There are many biotech, pharma companies, and food manufacturers located in and around Barcelona, making it easy to hire excellent personnel”

Shizuo Hattori, General Manager of Spinreact

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Acquired global sales network and manufacturing facilities through M&A

Although Toyobo is a B2B company, it manufactures many materials used in products that are familiar to consumers, such as apparel materials and films for LCDs. In the life science field, the company is also strong in the solution business for diagnosing infectious diseases, launching a reagent for genetic testing of new coronaviruses in April 2020 and an in vitro diagnostic antigen test kit in July 2021.

“The Toyobo Group has a long history of PCR (polymerase chain reaction) research, spanning more than 30 years,” says Atsushi Sogabe, Corporate Officer and General Manager of the Biotechnology Business Division of Toyobo. “Sales of PCR enzymes date back to 1989, and we have earned a high reputation for our KOD polymerase brand, including the development of auxiliary proteins that enhance the performance of our reagents,” he says.

“The company has earned a high reputation for its KOD polymerase brand, including the development of auxiliary proteins that enhance the performance of the reagent.”

The acquired company, Spinreact, was established in 1975, but its main business is manufacturing and selling diagnostic reagents and diagnostic equipment, making it a good fit for Toyobo. Yuzaburo Gomi, Group Manager of the Biotechnology Overseas Sales Department, had been seconded to Spinreact as Corporate Planning Manager for less than five years, starting in 2015. Therefore, he knows the situation before and after the acquisition very well.

“Toyobo and Spinreact had a business relationship before the acquisition and had been interacting with each other regarding sales, technology, etc. However, since around 2008, when Toyobo began to take an aggressive management approach, it has considered alliances and M&A with overseas companies. One of these alliances and M&As was the acquisition of Spinreact,” says Gomi.

Toyobo's news release of August 1, 2013, lists three objectives of the acquisition: “to take advantage of Spinreact's global sales network,” ”to expand its product line up,” and “to acquire a production base in Europe.”

“At the time of the acquisition, Spinreact had a sales network in 90 countries (currently 100 countries and regions) around the world, allowing us to approach regions that Toyobo itself could not cover,” explains Shizuo Hattori, president of Spinreact since April 2020, regarding the effects of the acquisition.

Remarkable Talent in Catalonia

“Spinreact has a highly reliable product lineup, and not only has the Toyobo Group been able to expand its product lineup, but the Made in EU brand effect has also been very significant,” continues Hattori, “Catalonia is geographically close not only to the EU but also to North Africa and the Middle East, making it an excellent access point. It also has close ties to Latin America, a Spanish-speaking region. Therefore, we see Catalonia as an excellent location for a global strategic base”.

Some employees are from Bolivia and came to Spinreact after working at the prestigious IQS (Institut Químic de Sarrià, Sarrià Chemical Institute) in Catalonia. There are nearly 500 million native Spanish speakers in the world, and the native Spanish speakers are only about 100 million fewer in number than English speakers.

Spinreact currently has about 130 employees. 120 of them are Spanish. Some employees come from South America, Japan, and Ukraine. Most management class employees have experience studying abroad in the UK so that they can communicate easily in English.

Spinreact's performance was on the rise at the time of the purchase, and the company has continued to grow since the acquisition. “We are aiming for full-scale R & D in the future and have made mid-career hires in human resources, quality assurance, and other areas,” says Hattori.

"There are many biotech-related companies, pharmaceutical-related companies, and food manufacturers located in and around Barcelona, making it easy to hire excellent personnel, even at a management level. Clinical testing is essential for diagnostics, and Catalonia has many hospitals with advanced technology, so there is no shortage of testing,” says Hattori.

The company is currently planning an expansion of its factory, which, when completed, will increase its production capacity by 1.7 times the current level. Barcelona is home to the latest IT industry trends, so promoting DX (Digital Transformation) at the plant will be straightforward," he said. In addition, the Catalan government offers a program to support factory digitalization, and the expansion will also take advantage of this support program.

One of the best places for the Japanese to live in

Spinreact's headquarters are in the La Garrotxa district of the Girona province, a little over 100 km north of Barcelona city. The factory is located in Sant Esteve d’en Bas, about 10 km east of here. Both are less than a two-hour drive from Barcelona. Surrounded by four dormant volcanoes, La Garrotxa is a region full of contrasts between modern architecture and nature and is a tourist destination with a two-star Michelin restaurant.

Mr. Hattori has a long career as a researcher, having served as the head of Toyobo's Tsuruga Biotechnology Research Laboratory and as the general manager of the Diagnostic Systems Division and the Biotechnology Business Development Division. When we asked Mr. Hattori about his private life, he replied directly, “No complaints.”

“The weather is nice, and transportation is convenient. The traffic is great, it's safe, and the prices are not high. The food is delicious. I enjoy choosing places to spend my vacations”. Mr. Hattori has not left Catalonia in the two years since his appointment, except for business trips within the country due to the Corona disaster. “ Girona still retains its medieval townscape, and the scenery along the Onyar River and the sunsets over the Pyrenees are truly beautiful. Young people can enjoy skiing in the mountains in the morning and sunbathing on the beach in the afternoon, even in December or January,” explains Hattori.

The Catalan people are just very open-minded. “They are open-minded in terms of accepting immigrants, and their feelings toward Japan are good. In addition when they arrive at work, they start working at full throttle from the morning“. The corporate culture of Toyobo, which values human capital, is the same in Spinreact. Once the Corona disaster is behind us, the company plans to resume personnel exchanges between SpinReact researchers and TOYOBO's Biotechnology Research Center (Tsuruga City, Fukui Prefecture). As a comprehensive manufacturer of in vitro diagnostics, the Made in Catalonia Spinreact name would be spread throughout the world.

Five Reasons Why Toyobo Chose Catalonia

1. Leveraging the global sales network
2. Expansion of product line-up
3. Acquisition of global production sites and EU brands
4. Talented human resources
5. Environment conducive to promoting DX to the factory

Read the full article published in Nikkei in Japanese here.