Kowa Company, Ltd.

About the Department

Our “Chemicals Department” imports and domestically sells pharmaceutical ingredients and intermediates, all classes of chemicals (including poisons and deleterious substances), feed additives, and ingredients for supplements and cosmetics/toiletries. Our overseas network in this field is extensive, particularly for importing from China, India and Southeast Asia, and our activities span from investigating items to outsourcing contracts. For items handled under an agency agreement with an overseas manufacturer, we carry out sales on behalf of the manufacturer.
And then our “Foods Department” operates the export of Foods, mainly for China.

Phosphoric acid business: A solid partnership with a leading Chinese manufacturer

Chemicals Department started to import phosphoric acid from China about 20 years ago (because of the large volume handled, at that time we received a letter of thanks from the local government of the region where the phosphoric acid manufacturers were located). Later, however, as Japanese manufacturers began to offer better prices, imports of phosphoric acid gradually decreased.

Then, the Chinese government introduced an export tax on phosphoric acid^*1, a decision that embarrassed Japanese phosphoric acid users by exacerbating the various problems that China then faced, including the natural disasters that occurred from the end of 2007^*2, extensive travel restrictions imposed by the government in the run-up to the Beijing 2008 Olympic Games, and then sharply growing demand for phosphatic fertilizers for corn to produce bioethanol triggered by the rise in crude oil prices.

Therefore, to stabilize the phosphoric acid market in Japan, we decided to form an alliance with a Chinese manufacturer once again. Accordingly, in September 2009 we signed a general agency agreement with Hubei Yihua Chemical Industry Co., Ltd.^*3 for the distribution of phosphoric acid in the Japanese market.

Hubei Yihua Chemical Industry Co., Ltd. is a crucially important manufacturer that holds a mining concession for phosphate rocks. In its Xingshan Head Office and Plant, the company generates its own power using hydroelectric power from the Three Gorges Dam, which is China's largest power generation plant. Additionally, its Yangzhou Plant has a 5,000-MT class storage tank for yellow phosphorous (equivalent to 20,000-MT phosphoric acid), thus ensuring a very stable supply of phosphoric acid.

Because there are few such large manufacturers of phosphoric acid and compounds in China, Kowa is highly valued as a business partner by our customers since they can rest assured of a stable supply of these chemicals from us.

In October 2009 we successfully renewed the general agency agreement with them for a further 10 years.

Accordingly, we opened a new distribution center in Japan to expand the market for phosphoric acid and to start selling other chemical products. We remain committed to building closer relations with China to enable us always to meet customers' needs.

• *1 The Chinese government decided to impose a 100% levy on the export of phosphate rocks, yellow phosphorous and industrial phosphoric acid.
• *2 The 2008 Sichuan Earthquake, disaster in Yunnan due to heavy snowfall, etc.
• *3 Hubei Yihua Chemical Industry Co., Ltd. is one of the leading manufacturers of phosphoric acid and compounds in China and is listed on the Shanghai Stock Exchange (SSE). The company installed a phosphoric acid production plant for unaffiliated customers in July 2008 and successively purchased two phosphoric acid production factories: one located in Yangzhou, Jiangsu, and the other in Liuzhou, Guangxi, to launch marketing/sales for unaffiliated customers.

Chilean Organic Honey

The Republic of Chile, which stretches over 4,300 kilometers from north to south, has a distinctively varied climate and rich fauna and flora coming from desert in the north to tundra area in the south toward the South Pole. The country is less than 200 kilometers wide on average from east to west, occupying a long, narrow coastal strip between the Pacific Ocean to the west and the 6,000-meter Andes mountains to the east. Its population is about 16 million and its major industries are mining, agriculture and fishery. Chilean wines have recently become popular also in Japan because of their price and quality.

Chilean organic honey is produced in such a climate in the forested and lake-side regions that extend from the nation's central part to the south. There are two types of Chilean organic honey: Quillaja honey and Chiloe Island honey, both of which have been certified by the Institute for Marketecology (IMO), which is an international certification and inspection agency based in Switzerland specializing in quality assurance of natural and organic agricultural products.