The holding company, and betting the group on polishing materials (2005)

The choice a spinning company made

The heart of this decision lies less in the change of corporate form than in a single point: who was made president. Choosing Nakano Mitsuo — not a man from the textile side, but the executive who had led the polishing-materials business at Yanai Chemical Industry — expressed, through the most legible instrument available, a decision about where the group’s resources would go. A holding-company structure is only a mechanism for making each business answerable for its own profit; what that mechanism was to be used for was settled by promoting a manager who knew the polishing-materials floor.

The turn was not painless in the accounts. Restructuring costs and impairment losses were booked in two consecutive years, and reaching the first dividend in eleven years meant accepting the contraction of textile sites such as the Wakayama and Toyohama plants. For a spinning company that began in 1896 with the water power of the Ayuzawa River, the road to rebuilding its core business around a consumable of the semiconductor industry opened only once it resolved to let go of its attachment to the founding trade.