Spinning a profitable future

A Japanese startup has high hopes for its artificial spider silk.

Tokyo - Later this year, outdoor-gear retailer North Face will offer environmentally conscious shoppers at its outlet in Tokyo’s posh Harajuku fashion district a chance to save the planet.

North Face’s outlets in Japan will sell a $1 000, special edition “Moon Parka”, a gold-coloured jacket based on the design of its existing Antarctica parka, made out of synthetic spider silk, a super-strong material developed by Spiber.

Spiber President Kazuhide Sekiyama, 33, who invented the company’s technology to make artificial spider silk, said releasing what he calls the world’s first commercial piece of clothing made from the bio-fibre protein material is just the beginning.

Spiber and its partner Goldwin, a Japanese sports apparel maker, plan to expand the use of the ersatz silk-made products, possibly for underwear products used by mountain climbers or the Canterbury rugby wear brand. “What makes a protein-based material marvellous is it’s evolving” in the use of apparel or other forms of industrial products, Sekiyama said in an interview in Tokyo.

Natural spider thread, a protein fibre, is known for its superpowers as a material: It’s stronger than steel on a relative basis and more elastic than nylon. Unlike nylon and polyester, spider thread isn’t derived from petroleum, and doesn’t release a large volume of carbon dioxides in the manufacturing process.

Sekiyama studied bio-science at Keio University and made up his mind to research spiders in his senior year while at a summer camp. Over drinks, he and other students marvelled at the sophistication of the arachnid’s silk-making ability. That’s when he became fascinated by the possibility of developing artificial silk.

Gene sequencing

In 2007, Sekiyama, then 24, launched Spiber together with two of his friends against the wishes of parents and professors. Scientists at Spiber have examined various species of spiders to understand the genetic sequence of silk proteins and accumulated data on hundreds of types of gene synthesis. The company uses genetically altered micro-organisms to mass produce a silk-protein material called “Qmonos”, meaning spider’s web in Japanese.

The firm inserts DNA it designed into bacteria, and grow them by feeding sugar - using a similar fermentation process to making sake or beer. They then take out silk proteins from the micro-organisms and refine them into thread.

Overseas firms are also working on similar processes and competition is set to intensify. Bolt Threads, based on California, said it’s confident about its process that uses a different micro-organism, scales cost effectively and can produce not just spider silk but also multiple fibres with advanced performance proprieties.

“The global market for textiles is $3 trillion, and we believe there is a huge opportunity for sustainably produced protein microfibres,” said Dan Widmaier, chief executive officer of Bolt Threads. “In order to succeed, companies need to be able to bring a wide range of advanced materials to market at a price that’s competitive with today’s fibres.”

Spiber said its protein-based fibre technology can also be applied to everything from cars to artificial blood vessels and could revolutionise production of various industrial products. “Humans should master the use of proteins and I believe the time will come,” Sekiyama said.

In addition to being an investor and entrepreneur, Sekiyama is also a bit of an idealist. Synthetic materials that can be mass produced cheaply and aren’t reliant on fossil fuels are good for the planet and reduce the probability of human conflict, he says.

Weighing IPO

Despite its outsized ambitions, the company only has a staff of about 100 and has relied on funding from sponsors, including venture capital firm Jafco and Keio University. Goldwin also owns about 10 percent of Spiber. To fund further research, Sekiyama is “seriously” considering selling Spiber’s shares to the public, while he plans to hire new staff to keep pace with expansion.

Goldwin’s shares climbed 6.6 percent to close at 4,625 yen in Tokyo, outpacing the benchmark index and its biggest gain since February 15. The Nikkei 225 Stock Average edged up 0.08 percent.

In three years, the workforce could at least triple the current size with foreign employees, including material scientists and engineers, possibly accounting for more than half of the total. Having workers share its corporate philosophy is a top priority for Spiber, Sekiyama said.

“Individual people must consider how to act to be responsible as a member of a society where resources are limited,” he said. “If the idea can be shared among individuals in an organisation, the entity will be much more competitive, and the value it can give to the society will be big.”

Cost challenge

Spiber faces hurdles, according to Yoku Ihara, the president of Growth & Value Stock Research of Japan, a retail equity researcher. The biggest: Proving to manufacturers that its fibre technology can work on a mass scale and offer superior performance and savings versus existing materials.

“Costs on auto parts are already low and competition among suppliers is quite fierce, making it hardly possible for the firm to become a key material supplier in the auto industry,” Ihara said. “Their spider silk could rather be suited to the fashion, medical or space industries, considering the material’s characteristics and costs.”

Man-made spider silk still has a ways to go before being an economically viable alternative for clothing companies. The Moon Parka is a case in point: the North Face jacket using conventional materials costs 80 000 yen ($736).

“The price of the Moon Parka should be much higher, considering the current material cost, but we are not going to set the price too high because I’d like to see more people wearing it,” said Takao Watanabe, senior executive officer of Goldwin. He says the parka shouldn’t be priced above 120 000 yen a piece.

Goldwin has contracts to sell sportswear under the brands of North Face, Helly Hansen and Canterbury in Japan. Watanabe wants to explore the use of the artificial silk in daily-use sports underwear after the launch of the Moon Parka to target a mass-production market.

He is also keen to offer Canterbury sportswear, using synthetic silk, to capitalise on Japan’s current rugby boom. Japan will host the 2019 World Rugby Cup and the 2020 Tokyo Olympics, giving Goldwin the opportunity to promote artificial silk-made products, he said.

Watanabe first visited Sekiyama two years ago to propose business collaboration between Goldwin and Spiber because of his interest in the venture’s fibre material.

“How we can respond to environmental issues is a big theme for us and others in the outdoor apparel industry,” he said. “We want to offer customers with materials that would address the environmental issues and be the best fit with mankind.”

* With assistance from Brad Stone

BLOOMBERG