After fallow years, fermentation returns to Japan

Since 2008, Mitsubishi Chemical’s biopolymer effort has gone from being a modest project team to a business to a full-fledged corporate division. Meanwhile, Kyowa Hakko Bio recently expanded its fermentation facilities in Thailand and is about to do the same in Shanghai. And Kaneka is initiating mass production of a biopolymer that biodegrades in both water and the soil.

Japanese firms like these are aggressively expanding in industrial biotechnology worldwide. Some, like Ajinomoto and Kyowa Hakko Bio, are traditional players in the fermentation field that are returning to their roots. Others are chemical firms that have invested in fermentation techniques to mass-produce various materials. The result is that Japan is quietly becoming a global leader in the use of industrial biotechnology in business sectors as disparate as commodity plastics and health care.

“Japan could be a game changer in the global biotechnology industry,” says Tomohiro Fujita, CEO of the biotech firm Chitose Group and a member of a five-person committee advising the Japanese government on biotechnology.

Japan, Fujita recalls, was a world leader in fermentation technologies in the 1960s and ’70s, but the industry eventually left for lower-cost countries like China and Thailand. Now, the country could regain its former leading position with the aid of innovation in commercial-scale production technology, he says. Helped by government funding, Japanese companies are also developing innovative and hard-to-copy products made using fermentation.

Pioneers Ajinomoto and Kyowa Hakko Bio are playing major roles in Japan’s fermentation revival. Ajinomoto, the company that gave the world monosodium glutamate (MSG), is investing in amino acid R&D to expand its health-care business, notably as a contract manufacturer. The results are so far encouraging. Whereas Ajinomoto’s total sales increased just 1.1% this past fiscal year, the company’s health-care business expanded by nearly 13%.

“Ajinomoto aims to strengthen its contract development, contract manufacturing, and materials supply businesses for biopharmaceuticals,” says Junichiro Kojima, an executive officer at the firm.

The company is positioning itself as a leader in the supply of peptides and oligonucleotides on both the lab and commercial scale. At the lab scale, Ajinomoto’s subsidiary GeneDesign has developed a solid-phase synthesis method that is useful for producing a variety of amino acids in small quantities. At the commercial scale, Ajinomoto has developed Ajiphase, a liquid-phase synthesis method that uses a chemical anchor to easily combine multiple amino acids and nucleic acids in batches of 200–300 kg. Ajinomoto uses the Ajiphase process at a plant in Tōkai, Japan, and at its Belgium-based Ajinomoto Bio-Pharma Services subsidiary.

Like Ajinomoto, Kyowa Hakko Bio, part of the brewer Kirin Holdings, is circling back to its fermentation roots. “We are good at using the latest applied microbiology technologies to manufacture by fermentation,” says Shinichi Hashimoto, director of R&D at Kyowa Hakko Bio.

The company recently developed enzymes that link two different amino acids. Normally, amino acids are linked by chemically protecting and deprotecting the amino and carboxyl groups. Building on research conducted by Hashimoto, Kyowa Hakko Bio has launched an enzyme that links alanine and glutamine to make L-alanyl-L-glutamine, a pharmaceutical ingredient that is normally hard to produce. The technology is also effective for stitching together other amino acids. “So far, we came up with more than 10 different ones,” Hashimoto says.

Another new enzyme can be used to combine alanine and tyrosine to create L-alanyl-L-tyrosine, which is used in cell culture media. Tyrosine alone is insoluble, but when the amino acid becomes L-alanyl-L-tyrosine, it dissolves in water and is easier to handle.

One of Kyowa Hakko Bio’s future fermentation-based products might be human milk oligosaccharides, or HMOs, a market segment with bright prospects. Unlike breast milk, the cow’s milk that is used to make baby formula does not contain HMOs, nutrients that are beneficial to babies’ development. However, recent technological advances have made it possible to mass-produce HMOs and add them to formula. The Swiss food giant Nestlé started adding HMOs to its baby formulas last year.

Kyowa Hakko Bio considers itself a pioneer of HMO-manufacturing technology, Hashimoto says, though the company isn’t a commercial producer. The firm developed technology to mass-produce HMOs about 2 decades ago, using a fermentation process based on recombinant bacteria. To take advantage of this know-how, some of which is still protected by patents, Kyowa Hakko Bio may enter the HMO market, Hashimoto says.

“Some ventures in Europe launched synthetic fucosyllactose, but we have the original technology and new production patents,” Hashimoto says. “So far, Kyowa Hakko Bio has developed five fucosyllactoses.”

Japanese companies that aren’t known for their fermentation know-how have also hopped on the biotech bandwagon. For instance, Mitsubishi Chemical is finding success in the field of biopolymers such as polybutylene succinate, or PBS. Mitsubishi used to make the biodegradable polymer from petroleum but now uses plant-sourced succinic acid for some of its output.

PBS is appealing to marketers because it fully decomposes after half a year in contact with soil microorganisms. Demand for the polymer is particularly strong in Europe, where waste is routinely composted both in homes and industry. “We have been successfully gaining share in the European home compost market,” says Takeyuki Doi, group manager of technology at Mitsubishi’s sustainable resources department. PBS is commonly used as an inner liner for paper cups and in coffee capsules, cutlery, and straws.

Meanwhile, Mitsubishi has been developing an agricultural film made with PBS for the Japanese market. Although biodegradable film sells for roughly three times as much as film made from polyethylene (PE), demand in Japan has surged since China banned the import of plastic waste last year. “PBS can compete from a total cost viewpoint even though the polymer costs more than PE,” Doi says, adding, “As farmers age in Japan, they prefer PBS because it is easier to handle.”

Mitsubishi is investing in its PBS business. It plans to more than double capacity at its Thai manufacturing joint venture, PTT MCC Biochem, which now operates a plant producing 20,000 metric tons (t) per year. In addition, Mitsubishi plans next year to use plant-based material to produce the PBS monomer 1,4-butanediol, which it currently makes from fossil fuel.

Other Japanese firms are also looking to take advantage of the growing market for biopolymers. Harnessing its expertise in yeast cultures, Kaneka has developed a process for producing poly(3-hydroxybutyrate-co-3-hydroxyhexanoate), a polymer known as PHBH that decomposes both in soil and salt water.

Market prospects for PHBH are promising, Kaneka says. The firm tested the waters with a 1,000 t per year plant in Takasago, Japan. In December, the plant’s capacity will jump to 5,000 t. And the company is planning another plant with a capacity of 20,000 t either in Japan or abroad. Kaneka plans to finance its expansion into PHBH by issuing a “green bond,” a preferentially priced loan investors make for products considered to be environmentally friendly.

Japanese industry’s increased focus on industrial biotechnology reflects a newfound ability to overcome its cost disadvantage. During the 1980s, Japan’s fermentation capacity largely shuttered and relocated to other countries that had cheap raw materials like sugar. Plants built in Southeast Asia and China also had much larger production capacities than those in Japan that they replaced, Chitose’s Fujita says.

Industrial biotechnology has changed since then. New gene-editing technologies make it easier to design proprietary microorganisms that Japanese firms can scale up exclusively, Fujita says. Japan, he says, now has a chance to mass-produce biobased materials for the fragrance, flavor, and polymer markets.

Chitose’s own expansion in the biotechnology market mirrors Japan’s regained strength. Partly supported by government funding, Chitose has teamed up with Ajinomoto and Mitsui Chemicals to use big data and artificial intelligence to optimize fermentation conditions for new products. Under the alliance, researchers at Ajinomoto and Mitsui develop strains of bacteria that express products with commercial potential. Chitose then uses AI to find the optimal fermentation techniques.

Chitose refines these techniques with sensors that analyze light, smell, biotransformation speed, and other factors. Fujita claims that no other company has ever monitored fermentation processes so closely with so many sensors. Ajinomoto, Mitsui, and Chitose have collaborated for 1 year, and the results have been encouraging, Fujita says. The Japanese government is increasing its funding to encourage other companies to collaborate with Chitose. Kyowa Hakko Bio and Kaneka have already decided to participate.

Unlike in the 1980s, when industrial biotechnology bolted from Japan because of high costs, the industry is currently expanding on a much firmer basis, Fujita and other fermentation advocates argue. If Japan can develop the most advanced fermentation techniques as well as efficient methods for cultivating raw materials, it stands a chance of regaining a leading role in industrial biotechnology.

Katsumori Matsuoka is a freelance writer based in Japan.