Kyowa Hakko Kogyo Co., Ltd. Business Information, Profile, and History

History of Kyowa Hakko Kogyo Co., Ltd.

Kyowa Hakko Kogyo Co., Ltd., a leader in biotechnology, is one of the world's largest producers of amino acids. The company also produces and markets pharmaceuticals, chemicals, foods, alcoholic beverages, fertilizers, veterinary medicines, and agricultural chemicals. Kyowa Hakko is active in the research and development of fermentation and chemical-synthesis technologies, as well as genetic engineering. The company employs nearly 20&percnt: of its staff in research and development, and holds 1,500 overseas patents and 270 Japanese patents.

In June 1936 Takaro Shuzo, Godo Shusei, and Dainippon Shurui, three alcohol distillers, created a consortium. In November 1937 they further formalized their relationship, forming the Kyowa Chemical Research Laboratory. Benzaburo Kato became the first director of the Kyowa Laboratory, and later chairman of Kyowa Hakko. Through extensive research, he discovered a fermentation process vital to the company's development. The company specialized in fermented products from the start. The company's first commercially marketed products were ethyl alcohol, used in sake and other beverages; acetone; and butane.

A turning point for the newly formed research laboratory occurred when the Japanese government, noting Kyowa Laboratory's early ventures in chemical research, commissioned it to develop technology for the production of the chemical isooctane--used to determine octane levels in fuel.

During World War II alcohols were much in demand. The extent of Kyowa's contribution to the war effort is difficult to gauge, but the company was forced by the occupation authorities to undergo some restructuring as a result of its wartime activities, as were many other Japanese businesses. Following restructuring Kyowa Laboratory emerged as Kyowa Sangyo. The company did very well at this time by shifting some of its resources from research to production. Establishing a plant in Hofu, Kyowa Sangyo manufactured food items in high demand, including salt; gin; and shochu, traditional grain-based liquor. In 1947 Kyowa Sangyo entered the pharmaceutical field for the first time, manufacturing penicillin.

Kyowa Sangyo was incorporated on July 1, 1949, as Kyowa Hakko Kogyo Co., Ltd. Kyowa Hakko means "harmony fermentation." The goals of the company were to develop its own fermentation biotechnology while attracting foreign technology to Japan.

In 1951 Kyowa Hakko negotiated an agreement with Merck & Company, a U.S. pharmaceutical company, to produce and market the antibiotic streptomycin. This project engendered a separate pharmaceutical division of Kyowa Hakko. The company had also created the Allospas distiller in 1950, which helped to improve alcohol and wine production methods.

Kyowa Hakko gained international recognition in 1955 with the development of an anticancer drug called Mitomycin-C. Shigetoshi Wakaki of Kyowa Hakko, in conjunction with the Kitasato Research Institute, shared responsibility for this treatment for stomach, lung, breast, and other solid cancers. The drug was developed using Kyowa Hakko's fermentation expertise. Mitomycin-C remains an effective cancer treatment.

The year 1956 was also significant for Kyowa Hakko in the food industry. Once again, the company's leadership in fermentation led to achievement: Kyowa Hakko became the first company to control the internal metabolism of a microorganism in order to produce an amino acid. Prior to Kyowa Hakko's work, amino acid production had been expensive, because it required the use of protein-rich substances such as decomposed wheat and soybeans. Kyowa Hakko substituted inexpensive and readily available molasses. The discovery resulted in cheaper production of monosodium glutamate, an amino acid-based seasoning.

In 1958 Kyowa Hakko produced another amino acid, the feed-grade L-Lysine, a base for livestock feed. Kyowa Hakko's cost-effective production system has since become standard and is used internationally to develop amino and nucleic acids for medical treatment and as post-surgery nutrition supplements.

Steadily continuing chemical research and production, Kyowa Hakko also manufactures acetone, butanol, and other solvents and plasticizers. In 1961, the company decided to replace its fermentation method of producing solvents with petrochemical technology. Low oil prices instigated the change. Noting that the fermentation process resulted in large amounts of waste water, Kyowa Hakko studied various methods of water treatment, and, in 1964 began to market an organic compound fertilizer, a product popular in Japan and other nations.

Throughout the 1970s Kyowa Hakko maintained its place as an innovator in antibiotic production. The company also moved into new arenas, including the production of cardiovascular agents, gastrointestinal drugs, hormones, dermatological medicines, vitamins, and advanced chemotherapeutics. Kyowa Hakko continued to apply biotechnology to create diagnostic reagents for cancer, the goal being to give accurate cancer diagnoses within minutes. In 1977 the company filed 45 drug-related patents in Japan, and in 1978 it formed the affiliate Janssen-Kyowa, dedicated to pharmaceutical research.

Recognizing that the pharmaceutical industry was growing increasingly international in scope, Kyowa Hakko stepped up collaborative efforts in the early 1980s. The company jointly funded development of a thrombolytic agent with Genentech, a U.S. pharmaceutical company. In 1982 Kyowa Hakko formed Biokyowa in the United States as fully owned subsidiary. In a project with the Mexican government and Sumitomo Corporation, Fermentaciones Mexicanas (Fermex) was formed in Orizaba, Mexico. Both new ventures were organized to produce and market feed-grade L-Lysine.

The Japan Chemical Industry Association granted Kyowa Hakko its 1983 technology award for Sagamicin, another advance in chemotherapy. The same year Kyowa Hakko developed a genetic-engineering technique, involving DNA recombination, expected to make amino acid production easier and less expensive.

By March 1984 Kyowa Hakko had launched another joint venture, with Native Plants, of the United States; Tata Enterprises, of Switzerland; and the Sumitomo Corporation. The consortium's goal was to develop new strains of coffee and tea in Southeast Asia.

Demand for feed-grade L-Lysine increased significantly in the late 1980s. Kyowa Hakko responded with plans for a plant in Hungary, to be operated by Agroferm Hungarian Japanese Fermentation Industry, and scheduled to open in fall 1990. Kyowa Hakko also agreed to several joint projects in Japan, including ventures to produce and market frozen foods with Kitchenbell, develop cosmetic biotechnology with Shu Uemura, and introduce the frozen-food wholesaler, Sun Kyowa.

In 1989 Kyowa Hakko agreed to import Kane Foods products from the United States. The same year the company became the sole agent for the U.S. wine producer Alexis Lichine.

Kyowa Hakko entered the 1990s with representative offices in the United States, Mexico, China, Hungary, and Germany, and with ventures in progress in Southeast Asia. The company operated seven plants in Japan and two overseas, and exported goods to over 80 countries. Projects underway are international in scope, as Kyowa Hakko studies cloning and gene-mapping to develop new plant strains, researches amino acid application, and studies the safety of pharmaceuticals.

Principal Subsidiaries: Kyowa Yuka Co., Ltd.; Ohland Foods Co., Ltd.; Sanko Pharmaceutical Industry Co., Ltd.; Kyowa Medex Co., Ltd.; Biokyowa Inc. (U.S.A.); Japan Oxocol Co., Ltd.