Reconditioning Steel & Plastic 220L Drums: The Outlook for Japan

1. <Session V>
5/13/2015 1
Reconditioning Steel & Plastic 220L Drums:
The Outlook for Japan
(By JDRA international committee: Toshihiro Nagai)
Thank you for that kind introduction. My name is Nagai, a member of JDRA
International Committee.
① Markettrend of the steel drums in Japan
First of all, I would like to report the trend of the production number of the steel drums in
Japan. This graph "Production Trend of New and Reconditioned Drums" shows the numbers
of drums for the past 20 years. The total number has been gradually reducing.
It is thought that such as the production bases of Japan are shifted to overseas and the
effect of the declining birthrate and aging population are the factors that the Japanese
domestic demand has been decreased.
In addition, the shipment number of reconditioned drums has been decreasing against the
increase of shipment number of new drums. It is thought that the customers using new
drums have been increased, because of such influences as not being able to supply
reconditioned drums satisfactory by the lack of raw drums and also the rising of quality
demand for the reconditioned drums from customers.
Please look at this graph "the trend of Filling Industries of Reconditioned Drums". The
product for oil industry which is the largest consignee of reconditioned drums has gone down
more than 20% of approx. 1.3 million in these 10 years.
We assumed that the reconditioned drums will be decreased by the lack of raw drums,
however in regard to the drums for oil, it was simply the decrease of overall production and
the big change is not founded in the component ratio between the new drum and
reconditioned one as you see "the Trend of Shipment for Oil". In Japan, there were 28
refineries in 2008 with the refining capacity of approx. 5 million barrels per day, but reduced
to 23 refineries with approx. 4 million barrels per day in 2014.
It is thought that this decline is one of the causes of the decrease in domestic demand, but
the decreasing of lubricant oil consumption in proportion to the environmentally
corresponding cars, such as the hybrid, electricity, hydrogen is thought as the topics.
Even the Japanese Government is announcing as the prospects that the oil products
decrease by the decrease of population and domestic demand from now on.

2. <Session V>
5/13/2015 2
With the decrease of reconditioned drum shipment, the numbers of reconditioners in 2013
were decreased to 76 from 84 in 2004 as shown in the graph "the Numbers of
Reconditioner/Plant vs. Production".
In the background of the decrease in number of the reconditioners, as one establishment,
such reasons as the decrease of production volume by the demand decrease, being not able to
anticipate the future to renew the deterioration of reconditioning facility and the successor
absence are raised.
However, on the contrary, there exists the establishment which promotes efficiency by
intensive management, and it is thought that there is a tendency toward the concentration
efficiency in future.
Then, I would like to see the composition of steel thickness of the steel drums. Please look
at this graph "the Component Ratio of New & Reconditioned Drums by Thickness".
Although the data of reconditioned drums are incomplete, the shipment ratio of the grade
LM of new drum has been increased. On the other hand, such a big change is not found for
the shipment ratio of reconditioned drums which utilized the grade LM as the raw drums.
Probably, it is thought that most of the new drums of grade LM are used for export.
JDRA is carrying out the survey to support this. This graph "the Component Ratio of Raw
Drums by Grades" shows the each component ratio of grades M, LM and Other of raw drums
that our members collected or laid in for the period from April to December, 2015. It is
estimated that the component ratio of the grade M was 75.9%, the grade LM was 14.2% and
the other was 10.1%.
In other words, although the component ratio of grades M and LM of the new steel drums
to the total shipment quantity in the same period was respectively 63.0% and 33.9%, there
are differences of 12.9 points to the grade M and of as much as 20.1 point to the grade LM
which we collected or laid in.
As the most of grade LM are for exportation and scrapping, the number to be collected by
reconditioners is reduced, but it is thought that the component ratio of grade M is kept
highly, as the empty or used drums of reconditioned, in addition to the first used new drum,
are laid in, since the reconditioning times are many.
In addition, if we consider that the oil refining industry which is the largest consignee of
reconditioned drums is not admitting the specifications of grade LM, the supply-demand
balance of the grade LM unable to be arranged satisfactory and the number of times for
reconditioning is inferior compared to the grade M, it is thought that the usage ratio of the
reconditioned drums is not closely related to improve even if these drums were used in

3. <Session V>
5/13/2015 3
Japan and collected the grade LM as raw drums.
I think that this situation is greatly different from Europe and America. Even if the
capacity is same, the reconditioned drum of same design type is required in Japan. In other
words, it is the present situation that most of customers do not accept the mixture delivery
of grades M and LM.
Well, above is the situation about the trend of steel drum. However, I feel sorry not able to
report you precisely about the plastic drums, as no statistical data exist. However, according
to the survey that the Yano Research Institute Ltd. carried out in 2010, the market size of
plastic drums in the fiscal year 2011 was anticipated with a little over 2 million. We are
thinking that this numerical value is not changed much even now.
② About the future of reconditioning industry
In regard to the numbers of production & the shipment of New and Reconditioned Drums,
it is considered to trace same trend, without improving the demand by the change of
industrial structure, the environmental problem, and the declining birthrate and aging
population. I am thinking that we want to contribute to the global environment by reusing
the steel drums while the whole world is tackling with the environmental problem.
However, the lack of raw drums becomes the big problem practically; we, as we told you at
the last Conference in the Netherlands, JDRA are explaining the contribution to society
based on the data of LCA enforcement to the customers. In addition, our industry is
advocating “the reuse” concretely and positively to customers by publishing and distributing
the brochure titled “the Handling Precautions for Reconditioned Drums”, for the purpose of
reusing empty steel drums as the valuables.
At the same time, I think it is indispensable to improve and to develop the reconditioning
processing techniques. Recognizing by ourselves that there are still rooms for improvement
and development, including such techniques as de-denting, washing, coating, distribution
and production efficiency, we will contribute to the environmental protection for the
customers who use reconditioned drums and for the future generations.
Thank you for your kind attention.