The electronics giant is turning to rechargeable batteries and waterless washing machines, writes David McNeillin Tokyo
RIDING THE Shinkansen Bullet Train out of Tokyo along the eastern industrial corridor towards Osaka has long been one of the best and most pleasurable ways to experience Japan's high-tech economy. Electronics giant Sanyo has added another attraction to the route: as the train barrels along at 270km/h (168m/h), it passes Sanyo's Solar Ark, a futuristic 15m (50ft) -wide solar building that rises out of the landscape like a giant black boombox near the industrial city of Nagoya.
Simultaneously a working power-generation system and a monument to solar energy, the ark's surface is made up of 5,000 solar panels that help power the entire facility. Inside, a museum to solar power attracts thousands of schoolchildren a year, part of what Sanyo - with a straight corporate face - calls an attempt "to live in harmony with the earth".
The company has just emerged from a bruising battle with its founding family, ending what the Nikkei business newspaper called "six decades of nepotism". In a spring-cleaning that shocked Japan's staid corporate world, president Toshimasa Iue was ousted last year along with Tomoyo Nonaka, his hand-picked chairwoman. Iue's father, 75-year-old chairman Satoshi, went the year before.
Shareholders rebelled after Sanyo posted a record net loss of about €1.16 billion in 2005, following earthquake damage to its Niigata semiconductor plant and failed investments in liquid crystal panels and microchips.
Analysts also believe that Nonaka, one of the very few women to run a Japanese company, pushed Sanyo's conservative board too far, by attempting an ambitious restructuring linked to the environmental theme of Gaia, which holds that the planet is a self-regulating, interrelated organism. In a corporate blurb more Greenpeace than mass manufacturer, Sanyo now says it is "committed to listening to Gaia's voice and engaging in activities that are beneficial to life and the Earth".
Some observers have been startled at this fulsome embrace of environmentalism by a company known mainly for dour if dedicated service to churning out batteries and consumer appliances.
Long-time Tokyo tech-watcher J Mark Lytle calls it "the mother of all corporate makeovers". Yurika Ayukawa, a leading environmental consultant who gave a presentation to Sanyo's board in 2005, recalls that the Gaia concept was "not popular at all" among the company's directors.
But even she acknowledges that this may be more than just a case of environmental opportunism. Sanyo's rebranding coincided with the release of the Eneloop, a range of rechargeable batteries that have clocked up 60 million sales in less than three years and grabbed half the market for that product niche with two simple innovations: they last much longer than anything else on the shelves, and come to the shops already recharged.
The Eneloop series has expanded to include reusable solar chargers and other products, and Sanyo now makes battery packs for Nintendo's mega-hit Wii. Expect the rest of the world to follow: just 400 million rechargeable batteries are sold globally out of total disposable sales of 40 billion, and Sanyo wants a much bigger share. And it is going after the burgeoning market for hybrid-electric car batteries in deals with Honda, Ford and Volkswagen.
Then there is Aqua, a range of state-of-the-art washing machines that clean clothes with little or no water or detergent. The trick is a drum that converts oxygen to ozone, which destroys bacteria and dirt, and recycles ozone-purified water from the rinse cycle - or even from last night's bath. The Aqua 3,000 doesn't come cheap - it's about €1,300 - but its environmental appeal, and the promise of a €100 cut in annual water bills have helped make it a hit in Japan, with 210,000 units sold.
Of course nobody, least of all Sanyo, is considering a full-on Gaia revolution, which would entail abandoning our entire modern lifestyles. Still, these are the kind of innovative products that put Japan on the map, and they have helped vindicate the rebranding decision. The company plans more of the same, earmarking 70 per cent of €2.45 billion in capital spending over the next three years on solar cells, batteries, and components, as it continues to scale down production of mobile phones, white goods and LCD displays.
Solar technology, in particular, is seen as a key growth area, with €477 million set aside for capital spending on that technology alone. Production of solar panels at Sanyo's European assembly base in Hungary will triple in the next few years. "'Think Gaia' is genuine," insists Sanyo spokesman Aaron Fowles, who says that the entire company is aiming to become "carbon-neutral" by 2010.
He urges those sceptical of Sanyo's conversion, to consider the Gaia opposite: the "blind pursuit" of convenience and comfort: "'Think Gaia' is more than merely a 'green' or 'eco' initiative. It really is a focus on how we can contribute to make life and the Earth be in harmony." The rebranding comes at a crucial time. Although Sanyo returned to profitability this year, its financial problems in 2005 forced it to go cap in hand to a consortium of lenders, who bought 300 billion yen (€1,925 billion) of preferred stock - about 70 per cent of the company's value.
So far, the new management has kept the shareholders on board, but critics will continue to pick at Sanyo's new-found environmental credentials. The Solar Ark provides an irresistible symbol of the company's rebranding: is it genuinely saving power or just a giant PR stunt? According to its website, the ark's solar panels generate 530,000 kilowatt-hours of energy per year, providing power to plants within the complex, and saving money on energy bills. But Sanyo doesn't say how much money.
Technology writer Tim Hornyak urges caution: "It's easy to bamboozle consumers with slogans. Big companies that have these campaigns are the very ones that are trying to block governments from curbing environmental emissions, so it behooves us to look beyond these slogans, and see what are they actually doing."
Like many other observers, and companies, in Japan, he will be watching to see if Sanyo pulls off its green revolution.
