ERI, Itochu partner to launch ERI Japan

ERI, the Fresno, California-based company that demanufactures, recycles and refurbishes information technology (IT) with a cybersecurity focus, has partnered with Itochu Corp., with headquarters in Tokyo and Osaka, Japan, to form ERI Japan. The location is the first ERI-owned and branded operation outside of the U.S. 

Itochu is a 150-year-old global conglomerate that has more than 300 portfolio companies, including Belong, an online retail business that sells used mobile devices, and Family Mart, Japan’s answer to 7-Eleven.

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The venture, equally co-owned by ERI and Itochu, with Itochu’s investment made through its wholly owned subsidiary, Belong Inc., will incorporate best practices from both organizations, including ERI’s circular solutions for responsibly recycling electronics and the networks of the Itochu Group and its partners in Japan and overseas.

John Shegerian, chairman and CEO of ERI, says two things distinguish Itochu from other companies in Japan: “One is that they’re the most coveted company to go work for when you graduate college in Japan. And, as of about three-and-a-half years ago, their biggest investor is … Warren Buffett.”

Daisuke Inoue, deputy general manager of Itochu, says the company was attracted to ERI for three main reasons. “First, ERI has established a highly integrated, end-to-end business model in the U.S., covering collection, data destruction, shredding, resale and recycling of IT equipment.”

Additionally, ERI has strong technological capabilities and transparency through its proprietary software and advanced artificial intelligence and robotics-based sorting technologies and its strong focus on creating environmental and social value aligns well with Itochu’s circular business direction, he says, adding “We have built a strong relationship of trust that goes beyond a traditional company-to-company relationship.”

Shegerian was introduced to the company about 20 years ago when Itochu’s metals division reached out to ERI. His contact, New York-based Claire Chino, and her colleagues on the metals team would keep him informed about what Itochu was up to and how the company did business. Shegerian says that while the two companies share cultural similarities and DNA, they didn’t do business together until the spring of 2024.

That’s when Tsuyoshi Shimizu reached out to Shegerian through LinkedIn, asking to connect in person. Shimizu and Daisuke are the co-founders of Itochu’s Belong subsidiary.

Shegerian met with Tsuyoshi, who discussed the company’s philosophy, sanpo-yoshi, which translates to English as “good for the seller, the buyer and society.” Guided by that philosophy, Itochu Group works to achieve sustainable development goals while listening closely to the opinions of all stakeholders.

“It was perfectly aligned with our values at ERI … and our mission for circularity,” he says.  

Shegerian says Tsuyoshi and Daisuke reached out to him “because they realized that we were the leading brand here in North America and that we had strong alignment in values and on the focus of circularity, and we had great technology that they could then bring back to Japan in a partnership.”

Once they saw the technology in person, Shegerian says the companies spent two years negotiating the partnership they are launching today.

“It's an equal partnership of our two brands,” he says. “They were the ones who insisted that we call it ERI Japan because they wanted to leverage our brand equity that we have around the world and that we've built over 23 years.,” Shegerian adds.

“I'm beyond honored to partner with such a storied brand in Japan,” he says, adding that he is excited to work with the team of young professionals who are driving the deal.

“It's fun to be an entrepreneur,” Shegerian says. “But I'll tell you what's even more fun. It's more fun when I get to collaborate,” he says, referencing the partnerships ERI has with LS Nikko Copper, Alcoa, Redwood Materials and the Closed Loop Fund, to name a few.   “These have been my partners and my mentors and my inspiration, and it's so much fun to collaborate with another great brand that's aligned … to make the world a better place together.”

ERI Japan’s first location will be in a building where Belong currently operates and will focus on processing small electronics using ERI’s technology. ERI Japan also will build a second location to handle larger information technology (IT) assets that will be equipped with ERI’s software and tracking technology, Optech Capture, which establishes a fully transparent, complete chain of custody, as well as the company’s hardware shredding and resource recovery technologies.

The location for the second site has not been determined, Shegerian says, but the goal of both operations is to improve circularity within Japan.

“Through this partnership, Itochu expects to enhance the overall sophistication of the IT equipment lifecycle in Japan,” Daisuke says. “By combining Belong Inc.—Itochu’s wholly owned subsidiary responsible for reuse and distribution—with ERI’s advanced recycling technologies and traceability, we aim to provide a seamless, end-to-end solution from collection to reuse and recycling.”

He adds, “This will allow us to better address the needs of corporations and municipalities, including information security and sustainability requirements.”

Under the partnership, Itochu also is investing in ERI through a small ownership stake. “It's going to create great opportunities to work with their partners and work with their clients here in the United States and recycle more material in the United States, as well,” Daisuke says. “This partnership and relationship is going to lead to more responsible recycling of electronics in Japan and more responsible recycling of electronics here in the United States.

“Through the investment, Itochu can deepen its understanding of ERI’s U.S. headquarters operations, including its business, technological innovation and operations, and apply those learnings in Japan,” he adds.

“In addition, Itochu has many group companies in the United States, and beyond the joint venture in Japan, we believe there is potential to pursue mutually beneficial initiatives with ERI in the U.S. as well.”

Shegerian says partnering with Itochu creates business-to-consumer opportunities to collect electronics through the company’s retail brands, similar to what ERI has created in the U.S. with Staples and Best Buy, as well as B-to-B opportunities.

“This is a purpose- and mission-driven endeavor that goes way beyond just companies doing some commerce together,” he adds. “It's given new purpose and mission to all of our employees, and they tell me the same thing about Itochu employees being so excited about partnering with ERI.”