BANGKOK/TOKYO -- A Japanese startup that has developed a strong, lightweight and biodegradable material inspired by spider silk is set to begin full-fledged production in Thailand, a major milestone for a product 14 years in the making.
The Yamagata Prefecture-based Spiber, a 2007 offshoot from Japan's Keio University, is one of Japan's few unicorns.
Its signature product, Brewed Protein, is made by feeding such plant-derived sugars as glucose to microbes. The fermentation process converts biomass into proteins that can be processed into a wide variety of forms for applications ranging from apparel to auto parts.
"We want proteins to contribute to social development as a new core industry following ceramics, steel and plastics," Keisuke Morita, head of Spiber's Thai unit, said Monday while taking questions from the press at an inauguration ceremony for the company's first mass production facility.
The plant in the city of Rayong is scheduled to enter full operation late this year. It will be able to churn out hundreds of tons of the proteins annually -- 100 times the capacity of Spiber's pilot site in Japan.
"We'll expand the options for sustainable materials in response to demand from society," said co-founder and representative executive officer Kazuhide Sekiyama, who attended the event virtually.
Spiber picked Thailand in part because of the low cost of biomass in the Southeast Asian country -- an advantage that the company says will finally enable it to produce Brewed Protein for less than $100 per kilogram.
"Sugar from sugar cane is half as expensive as in Japan, and cassava-derived [sugar] is 20% to 30% cheaper," Morita said.
Apparel is the startup's first target market. Goldwin, the Japanese company that holds the license for The North Face sportswear brand there, sold limited-edition T-shirts and sweaters made with Brewed Protein in 2019 and 2020, but these carried high price tags. The hope is that mass production at the Thai plant will make the material accessible to more brands.
Spiber is setting its sights on the auto industry next -- another reason for its presence in Thailand, a hub for the sector. Brewed Protein may appeal to automakers making their vehicles lighter to save fuel. Toyota Motor-affiliated parts manufacturers Kojima Industries and Toyota Boshoku have invested in Spiber.
"We see [Brewed Protein] being used in interior components such as seats over the medium and long term," Morita said.
The Thai government is welcoming Spiber with open arms as it tries to pull the country out of the "middle-income trap" of economic growth stagnating as labor costs rise. Duangjai Asawachintachit, secretary-general of Thailand's Board of Investment, said the startup will be offered long-term tax breaks.
The plant will put Spiber a step closer to crossing the "valley of death" faced by manufacturing startups -- the challenge of surviving for long enough to bring a product from the drawing board to the market.
"When the business started, it took months to make just 20 mg of protein," Morita said. "All we got was 2 cm of nonuniform fiber. Everyone thought the company was going to go under."
Fledgling companies in Spiber's position more often than not have a tough time raising capital, but the startup has found ways to keep cash coming in. It raised 25 billion yen ($226 million) late last year through an unusual method that involves securitizing intellectual property and fixed assets in what appears to be the first deal of its kind in Japan.
"It's a strong alternative to an initial public offering," Sekiyama said.
The cash will be used to fund a planned production facility in the U.S., a joint project with American agribusiness giant Archer-Daniels-Midland that Spiber hopes to start up in 2023 at the earliest. But the company's immediate priority is ensuring a stable supply from the Thai plant.
"We're finally at the starting line," Sekiyama said. "As we start with apparel and expand into the auto industry, we can have a real impact on the environment."