The new business unit was officially introduced on May 15.
Aluminum pouches are a widely used packaging across the food and nutrition industry, including dietary supplements and health foods. The outer layer of the pouch is typically made of aluminum and the inner layer naphtha-derived polyethylene film.
Due to the ongoing conflict in the Middle East, Japan is facing a shortage of naphtha, with prices reportedly rising to as much as double the usual.
As such, the ability to secure aluminum pouches is increasingly becoming a crucial factor in determining product launches in the burgeoning health foods industry.
In anticipation of this situation, Baycosmetics has concluded long-term supply agreements with multiple material suppliers prior to launching its health foods and supplements business division.
This has secured a stable supply line for aluminum pouches, equivalent to approximately 2% of domestic demand in Japan, or up to 100 million units.
“Our customers can focus on product planning and sales strategies without being burdened by concerns about material procurement,” the company said.
According to Baycosmetics, it is able to provide contract manufacturing services for six dosage forms, namely tablet, soft capsule, hard capsule, jelly, powder, and stick pack.
Backdrop of packaging crisis
Japan relies on the Middle East for approximately 74% of its naphtha imports and 30% of its aluminum supply, both of which are key packaging raw materials.
The blockade of the Strait of Hormuz has limited naphtha shipments and set off a region-wide plastic packaging crisis in Asia.
Notably, naphtha is a petroleum byproduct that is essential for the resins and solvents used in industrial-scale color printing.
As naphtha prices surge to new highs, manufacturers are facing severe supply shortages while businesses are forced to reevaluate and revise their packaging designs.
For example, Japanese snack giant Calbee announced that it is temporarily switching to black-and-white packaging for 14 product variants from May 25 due to the deficit of printing ink made from naphtha.
Strategies for supplement business
Baycosmetics said that its competitive edge lies in various areas, including differentiation in raw materials.
“Our formulators collaborate with raw material manufacturers to develop unique ingredients that can only be sourced through us. This allows our customers to design products using ingredients that competitors cannot imitate,” the company explained.
“In addition, we have established a direct procurement route from overseas suppliers to source original raw materials that are not yet available domestically. This supports the creation of products that offer a first-mover advantage.”
The firm is also leveraging its product development capabilities and market research data cultivated through cosmetics OEM—from ingredients selection to product concept and consumer targeting.
In particular, it looks to help beauty brands develop both oral supplements and topical products for the inner beauty market, which is said to be valued at over JPY250 billion (USD1.57 billion).
Furthermore, it will build on its experience in quality control and supply chain management to ensure the same Good Manufacturing Practice (GMP) standards for the supplement business.
Beyond the manufacturing process, Baycosmetics’ partners can also capitalize on the company’s existing sales network, including physical retail stores such as Don Quijote, @cosme and Loft, and online platforms like Qoo10 and TikTok Live.
