Session 5: Module 3b

Social Capital Creation in

Eco-Industrial Clusters
The views expressed in this presentation are the views of the author and do not
necessarily reflect the views or policies of the Asian Development Bank Institute
(ADBI), the Asian Development Bank (ADB), its Board of Directors, or the
governments they represent. ADBI does not guarantee the accuracy of the data
included in this paper and accepts no responsibility for any consequences of
their use. Terminology used may not necessarily be consistent with ADB official
terms.

Venkatachalam Anbumozhi
Asian Development Bank Institute

Sources of Productive Gains from EcoIndustrial Clusters

Effective use of raw and waste material.
Access to knowledge and collaborative networks
for the introduction of cleaner production practices.
Lead to innovation and new eco-product
development.
Enhanced social and employment opportunities.
Module 3b

A Case Study of Wood-Industry Cluster

& Inter-firm Networks in Japan

Maniwa-shi
Okayama Pref.

TYO

Bio-industrial complex
in Maniwa

Module 3b

Maniwa: Wood Industry Cluster

Population: 37,000
Forest Land: 80%
34 timber factories
(all are SMEs) 135,000 t.
16 Drywood factories.
227,700 cu.m raw wood is purchased &
153,000 cu.m is sold as products.
Wood waste generated from the cluster
Thinning logs: 18,000 t
Chips:
40,000 t
Bark:
20,000 t

CHALLENGE or
OPPORTUNITY

How to transform waste into wealth?

How to revitalize the local business?
How to create employment opportunity?

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Maniwa: Basic Concept of Recycling of Wood Waste through

Inter-firm Network

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(Source: Maniwa Muncipality)

Maniwa Forestry
Association

Kobayashi Timbers Ltd

Bark
management
Business

Wood chip making

&transport business
Container
box

Flexible
Container

Automated pellet injection

facility
Drying
boiler

Drier

Meiken Kogyo Ltd

Bark to Fuel
Business

Waste
Wood
Bark

Power Generation Boiler

To
bio-fuel
company

Waste Wood
Business

Makino Wood
Industries Ltd
Bark
management
Business

Waste wood chips

Automated pellet injection

facility

To bio-fuel
company

Drying
boiler

Pellet making facility

To bio-fuel
company

Waste
Pellet

Drier
Flexible
Container

Torigoe Industries Ltd

Bark management
Business

Container
box

Automated Chip
Carbonization equipment
eequipment
Drier
Drying
boiler

Maniwa Bioenergy

Ltd

Maniwa Wood Industry Association

Flexible
Container

Chip size
separation
facility

Container
Hopper

Hot water boiler for

cooling & heating
(pellet only
type)
Heating & cooling water
system and
air-conditioning

Landes Concrete Co. Ltd

Waste from
Timbering

Steam boiler (mixed pellet

& combustion type)
Hot
Concrete
water manufacturing
boiler for
process
cooling
& heating
(pellet only
type)
Nishimura Farms
Hot water boiler system for
large scale green house
(mixed pellet & combustion
type)

Types of Firms envisioned in the

Maniwa Wood industry cluster:
-Wood product firms: 2 (old)
-Construction firm: 1 (old)
-Timber Firms: 3 (New)
- Business Association: 2 (New)
- Agriculture firms: 2 (New)
Drying
boiler
Drying
boiler
Container
box

Container
box

Container
box

Automated pellet injection

facility

Container
box

Drying
boiler

Nishiyama Farms
Warm air boiler system for
small scale green house
(mixed pellet & combustion
type)

Container
box

Drier

Container
box
Automated pellet injection
facility

Module 3b

Container
Drier
box

Maniwa: Wood Industrial Structure &

Eco-products
Wood
Resources

Chips
Barks

Powder

Lignin
Cellulose

Refined
Lignin
Plaster

Concrete products

Polylactic acid Bio-plastic products

Power
Generation

Ethanol
Binder
Molding

Electricity &
Heat

Carbonization

(Source: Maniwa Municipality)

Lignin products

RDF

Fuel
Naplus products
Eco-carbon products

Power generation

Maniwa: Initial Actors in the Inter-firm Eco Network

Maniwa Forestry
Association

Timber waste
From firms
In the cluster

Energy Production
(Maniwa Bio-energy
Co. Ltd

Power
Generation
48,000
kW

150 man days

4.5 million Yen

Heat

58,000 t CO2

Meiken Kogyo
Co. Ltd

Pellet boiler
Pellet stove

Horticulture
Public facilities
Factories
Concrete Products

Material Production

Central Elec.
Power co
Pellet (1.8t/d)

(Landes Co. Ltd)

Wooden inter
Locking blocks

(Maniwa Bio-material Co. Ltd)

Pet Industry Products

(BMD Co. Ltd)

Ethanol
(Mitsui Co. Ltd)

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Cat sand

E3 Fuel

1993

A study group called 21 Century Maniwa was formed by local community

1997

A Symposium Environmental Town planning was organized

1998

Meiken Kogyo Co. Ltd start producing electricity from woody biomass waste.

2000

A market survey on locally produced wood products is commissioned

2001

2002

2003

2004
2005

Concept of wood resource recycling industry cluster evolves.

NEDO sponsors a study on New Energy vision for Kuse town
Feasibility study on wood resource recycling in Maniwa
Landes Co. Ltd commercializes the wood chip concrete
BMD Co. Ltd commercializes the cat sand
NEDO undertakes a FS on biomass energy use in Kuse town
MLIT undertakes a pilot project on participatory regional planning in Maniwa
NPO 21st Century Maniwa Forum was established
Okayama Pref. awards a project on Biomass utilization Project
Landes Co. Ltd invents and commercializes wood chip interlocking concrete
Watanabe Co Ltd & Dainippon Pharmacy joins hand to invent NAPLUS products
Meiken Co. Ltd start selling the surplus electricity to Chugoku Electric Power Co.
BMD in association with METI undertakes a study on volatile components and recycled products.
Mitsubishi Co. Ltd establishes Ethanol plant on experimental basis
Receives Assistance from NEDO for a pilot project on Biomass energy
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MAFF considers for Biomass town course establishment

Knowledge & Technology Integration

Social Capital & Knowledge Proximity for Inter-firm

network
Knowledge transfer

Firm A (Landes Co)

distant

Firm B

proximate

(MK Ltd)

Firm D (Watanabe Co. Ltd)

How and why? Policies or
Institutions &/or

Firm C (MBM Co. Ltd)

1993

1998

2001

nature of local community culture particularly openness to new ideas, the flexibility of permitting
easy entry of new firms, local leadership and richness of social capital set pace of knowledge
transfer and emergence of new business model relevant to time.

Maniwa SWOP Findings

Major highway crossing
Abundant wood resources & status
of wood commercial center
Existence of strong local leadership
with networking capability
Well educated business leaders and
govt officials with networking skills.
Strengths

Weaknesses
Survival budget of municipal
government
Outward migration rate
Scale merits/demerits of
technology
Poor policy integration at
higher levels

Present and future support from

govt through favorable policy
instruments

Development of new business

opportunities on eco-products.

Administrative and territorial

reforms

Presence of big corporations

Opportunities

Potentials

Competition from better located

regions

Declining in Agriculture sector and

reforms in forestry sector

Unresolved relationship between

industry and governments

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Maniwa: Support Network for

improving the Social Capital

National
Regional

Local

42 institutions
Firm

Business
Association

Knowledge
Institution

NPO3b
Module

Government

Social Capital and Knowledge Spillovers

Module 3b

Social Capital and Eco-market Forces

Urban
Customer
responses

EIC
Products
-Bio plastics
-Wood concrete
-Rice bran oil
-Natural
cosmetics
-Bio-ethanol
-Natural
cosmetics

Supply side

Market

moderators
EIC Business

Information
& orientation

performance

Demand side
moderators

Policy
responses

Module 3b

Social Capital for Cluster Focused Eco-Business Strategy

3. Building new local supply

Chain relationship
1. Starting new business/
Strengthening existing one

Residents

2. Linking local residents

to jobs

Property
Technology

4. Growing sales of eco-products

from existing companies

5. Recruiting existing businesses

to relocate in the urban-fringe area

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Public Policies that facilitated

the Cluster to form inter-firm networks
MoE: Dioxin regulations that shut down the incinerators used for wood wastes.

METI : Provision of funds through JDB to support SM sized construction firms

and agric/forestry business
NEDO: Funding for research and development.
MAFF: Support to biomass town course, but remained as an observer (forest
waste which is an environmental good, is not included in the product policy of
METI).
MEXT: Favor alliance of universities with business for eco-innovations.

Okayama Pref: Niche market support for eco-products, Support to NPO Maniwa
thro Eco-vision 2010.

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Limitations of Policy Support

All done in fragmented manner over a span of
time. No real integration of policies and
effective coordination between policy making
communities at higher level took place. The
inconsistency that resulted may hamper the
multiplier effects & reproducible experiences.
Considering the virtual absence of macro-level
policy integration, the expectations of local
governments which lacks financial resources,
capacity and expertise is unfairly high.
Module 3b

When Social Capital Matters for an EIC?

Information Sharing
Group Identify for a brand value
Explicit coordination
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Lesson learned from Maniwa EIC

The strategy of is built around the existing stock of Social
Capital such as trust, norms, and networks that can
bind other resources, technology, business and people.
By investing in these assets through integrated policies
and linking them to the broader regional economy,
innovative eco-cluster approaches not only strengthens
environment, but also create economic opportunities
for the localities. This is a promising way for
disinvested, isolated regions to be connected to more
vital national/international economy in a sustainable
way.
Module 3b

Measuring Social Capital in an EIC

Module 3b