Leaving cotton spinning for glass fibre (1998)

Closing the founding trade, as a settling of accounts

The core of this decision is not how to shrink a loss-making founding business but that the company’s main business itself was exchanged for another. Abandoning commodity cotton spinning and concentrating resources on glass fibre, where technology creates a difference — president Sagara Atsuhiko deliberately declined the role of speaking about dreams of expansion and committed himself to compressing bad assets and narrowing to a single point. Closing the founding trade carries the pain of a company that had lived by cotton spinning. In his remark about settling accounts with a business that could not stand in the future, one senses a readiness to bear that pain.

What made the shift possible was that the company had held, from early on, a technology entirely separate from textiles: the glass fibre industrialised in 1938. Because there was a business inside the company that could be grown and installed as the mainstay — not merely a refuge — the cotton withdrawal became a change of pillars rather than simple contraction. How far a lightened company, narrowed to glass fibre, can fight on that single point is the question this shift left behind. Whether the concentration gained by letting go of the founding trade leads to the next phase of growth is something the subsequent development of the glass-fibre business has had to answer.