Katakura Industries - Company History

Katakura-gumi: from zaguri reeling in Suwa to filatures across Japan

In 1873 Katakura Kanetaro (初代片倉兼太郎), then twenty-four, began a ten-basin zaguri hand-reeling business at Suwa Kawagishi village in Nagano prefecture[1]. The timing placed him just after the Meiji government had built the state-run Tomioka Silk Mill in Gunma the previous year[2] and made volume production of raw silk on Western machinery a matter of national policy; Katakura Kanetaro took the form of entering the industrialisation of silk from the private side. The Shinshu district had a climate suited to growing mulberry and a strong sericulture trade, so the conditions were in place for a business that collected cocoons from farmers and reeled them. Within a little over a decade of founding he built a new filature in Matsumoto, and through the Meiji period the firm put up filatures across the country — Omiya, Koriyama, Takahata, Ichinomiya, Himeji, Agei (上井), Tosu, Oita. By the Taisho period it was operating twenty-nine filatures nationwide and had established its position as a volume producer of raw silk for export.

Sales were centred on export. Raw silk was a luxury good whose domestic consumption was limited, and it went mainly to the United States, where it was consumed in quantity as the raw material for women's stockings; dollar-denominated export revenue supported the earnings base of Katakura-gumi. In March 1920, in step with the growth of the business, the organisation was turned into a joint-stock company[3]: Katakura Seishi Boseki (片倉製糸紡績株式会社, Katakura Silk Reeling and Spinning) was incorporated with capital of ¥50 million[4] and its head office at Kyobashi in Tokyo[5]. From the moment it was formed it was placed among the leading firms of the silk-reeling industry, recognised in the Japan of the day as one of the two largest alongside Gunze (郡是製糸). After incorporation it continued to acquire small and mid-sized reelers to expand output, and in September 1939 it merged with the former state-run Tomioka Silk Mill, founded in 1872 and by then the joint-stock company Tomioka Seishijo[6]. It was the shape of a private company, Katakura, taking over the symbol of the silk industry the Meiji government had raised as national policy, and it occupied the position of the final consolidator of raw silk as an export industry.

The height of the Katakura kingdom, consecutive losses from 1954, and the lost dividend of 1969

As of 1932 Katakura Seishi Boseki had 38,000 employees and sixty-two filatures, and the founding Katakura family was described as the silk kings, the silk kings of the world. The company was one corner of big business in the Japan of the time and held a wide operating sphere known as the Katakura kingdom. In October 1943 it established Toa Eiyo Kagaku Kogyo (東亜栄養化学工業株式会社, now Toaeiyo, a consolidated subsidiary)[7] as a business answering the wartime policy of securing food and nutrition, and made it the parent body of the later pharmaceutical business. In November of the same year it changed its trading name to Katakura Industries (片倉工業株式会社), the name it carries today[8] — a change from a name that said silk reeling alone to one that implied diversification. In November 1946 it opened the Omiya Works[9], and in May 1949 it listed its shares on the Tokyo Stock Exchange[10], putting in place the capital base to catch the textile demand of the postwar recovery.

Demand for raw silk in the recovery years reached a turning point in the first half of the 1950s. Nylon, a synthetic fibre, spread through the 1950s and demand for raw silk — an expensive natural fibre — fell away sharply. In women's stockings, the use that had carried the trade until then, substitution by cheap nylon advanced, and while Toray moved nylon into full volume production and grew rapidly, Katakura Industries took the blow directly in the demand for the business it was founded on. It fell into loss, and out of dividend, for two consecutive years in fiscal 1954 and fiscal 1955[11], and the deterioration of a distinguished company called the silk king before the war drew attention in the industry. In May 1954 it established Katakura Hudson Hosiery (片倉ハドソン靴下株式会社) and started a women's stocking business[12], and in July 1960 it moved into knitted underwear[13], widening downstream into clothing; neither reached a scale able to make up for the weakness of the core business amid the mass-market competition of the synthetic-fibre age.

Rationalisation of the domestic plants began in 1958, with the closure and consolidation of unprofitable filatures scattered around the country moving into full swing. In December 1961 the company established Nihon Vinylon (日本ビニロン株式会社, now Nichibi, a consolidated subsidiary)[14] in an attempt to enter the synthetic fibre vinylon, but it could not follow the volume investment of the big synthetic-fibre makers such as Toray and Teijin and failed to turn it into a business. The delay in rationalising the raw-silk division and the failure of the new synthetic-fibre business came together, and in December 1969 the dividend was suspended. It was ninety-six years after the founding of 1873 and forty-nine years after incorporation in 1920 — the point at which sericulture and silk reeling, the trade the company was founded on, had lost its competitiveness.