Into polymer separation membranes — and the Hydranautics acquisition (1987)

The accounts of a business begun before its market

When membrane production began in 1976, the seawater desalination market did not exist. Evaporation was the mainstream, and membranes were inferior both in salt rejection and in the cost of the water produced. What allowed it to continue was a high-priced application — ultrapure water for semiconductors and LCDs — that made an immature membrane pay, and it appears that being a company with electronic materials is what supported the water business. Vice-president Hijikata Saburo’s 1973 view that a thin membrane could serve medicine, pollution control and electronics alike proved right in the sense that breadth of application bought time.

That said, the company it bought was not ready for duty. Hydranautics was tied down in sales by a patent dispute and was still losing money in 1993, six years after the acquisition. Given that its American connections told in a large Australian project only once the constraints lifted, it took more than twenty years for the value of that purchase to appear. Reverse-osmosis membranes came off basic patent in 1999, and their dimensions are set by an industry standard — a commodity form. Set against the fact that China’s Vontron has claimed comparable salt-rejection figures, leadership in desalination looks less like technical superiority itself than something preserved by never stopping the updates.