Splitting off coal production: Matsushima Colliery becomes Matsushima Kosan (1973)

Giving up production, staying on the selling side

The heart of this decision is that it moved the production of coal — the founding business — into a separate company and kept the listed parent on the selling side. Cutting away a mining business whose profitability had become impossible to forecast under the energy revolution separated the heavy fixed costs of production from the parent’s books and freed resources for coal sales, materials, property and retail. Matsushima followed the pattern the sector adopted under the same coal policy, but went a step further than most: it gave the old company name to the production function and made it the subsidiary, swapping name and function together.

The result was that coal fell to about 40% of sales and a trading-house-like mix of building materials, property, supermarkets and imported coal took shape. It would have been possible to keep the pits and diversify around them; choosing instead to shed production and travel light set the direction that led to Mitsui Matsushima and, later, to the Liddell colliery in Australia. As a judgment on a change the company could not itself influence — the shift in primary energy — it is worth revisiting for how early it decided what to release and what to keep.