Asahi Kasei - Company History

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Financial history 1952–2026 — revenue, cost structure, balance sheet, cash flow and key ratios, year by year →

Founded 1931
Founder Noguchi Shitagau (野口遵)
Founding location 宮崎県延岡市
Core business at founding Ammonium sulphate and rayon derived from ammonia
Listed 1949
President Kudo Koshiro President since 2022 (age 67, as of 2026)
Current priority Selection and concentration · Capital efficiency Shrinking basic chemicals and concentrating on health care
Founding
In September 1923 Noguchi Shitagau of Nippon Chisso Hiryo built a Casale-process ammonia synthesis plant at Nobeoka in Miyazaki prefecture and mass-produced ammonium sulphate on the cheap power of hydroelectric generation on the Gokase river. Out of the same ammonia and the same electricity came the rayon of Asahi Kenshoku, founded in 1922, and explosives. In May 1931 Nobeoka Ammonia Silk was founded with capital of ¥10m, and it is there that Asahi Kasei places its legal starting point. In July 1933 it merged with Nippon Bemberg Silk and Asahi Kenshoku to become Asahi Bemberg Silk, in 1943 it absorbed Nippon Chisso Explosives to become Nichitsu Chemical Industries, and in April 1946 it was separated from the Nichitsu combine and changed its corporate name to Asahi Chemical Industry.
The Decision
It went on building the next business while still carrying the ones that lost money. Miyazaki Kagayaki became president in 1961 and set out a policy of allowing losses in new businesses within the profit secured by rationalising fibre. In July 1968 it put about $277.8M (¥100bn), a sum equal to its sales at the time, into petrochemicals at Mizushima. In 1972 it made the autoclaved aerated concrete Hebel into a brand of detached house, and from 1980 it widened into nuclear power, electronics and pharmaceuticals. After Miyazaki died suddenly, however, the course reversed in 1993: foods and alcoholic drinks were sold and the company moved to selection and concentration. Thirty-one years of expansion, and the contraction that followed it, left the three businesses it has today.
Today
Material, the largest of the three businesses by revenue, is the smallest by profit. Of consolidated revenue of $19.4B (¥3.07tn) in the year to March 2026, Material accounted for $8.3B (¥1.31tn), but an impairment loss of $118.2M (¥19bn) held its segment profit to $431.8M (¥68bn). Homes, begun in 1972, had sales of $6.8B (¥1.08tn) and profit of $631M (¥100bn), and Health Care, which starts from the $2.21bn acquisition of ZOLL Medical Corporation of the United States in 2012, had sales of $4.2B (¥664bn) and profit of $527.9M (¥84bn); both stand above Material. The sixty years spent moving the money made in chemicals into housing and medicine show up directly in the order of those profits.
Competition
Two chemical companies moved from materials into housing, and only Asahi Kasei sold the detached houses itself. Sekisui Chemical turned Sekisui Heim into a product built by the unit method in 1971; Asahi Kasei, in 1972, made the autoclaved aerated concrete Hebel into a brand of detached house and took the urban rebuilding demand with a directly employed sales force and long warranties. On the materials side it shut the ethylene centre at the Mizushima works in 2016, and in November 2024 decided to withdraw from PTT Asahi Chemical in Thailand. Reducing the ground on which it competed in commodity products while raising the share of housing and medicine gave it a profit structure with no parallel among chemical companies.

Timeline

1923–1961Independence from the Nichitsu combine, and the diversification template made at Nobeoka

  1. 1922Asahi Kenshoku (旭絹織) founded to make viscose rayon
  2. 1923Nippon Chisso opens its ammonium sulphate works at Nobeoka
  3. 1931Nobeoka Ammonia Silk founded — Asahi Kasei's official founding year
  4. 1935Entry into foods with monosodium glutamate
  5. 1943Nichitsu Chemical Industries formed by merger with Nippon Chisso Explosives
  6. 1946Renamed Asahi Chemical Industry, independent of the Nichitsu combine
  7. 1949Shares listed on the Tokyo Stock Exchange
  8. 1952Asahi-Dow set up as a joint venture; entry into synthetic resins
  9. 1959Divisional structure adopted; Cashmilon acrylic fibre goes into production
  10. 1960Saran Wrap goes into production
  11. 1961Miyazaki Kagayaki becomes president; voluntary redundancies called

1962–1992Miyazaki Kagayaki's ¥100bn petrochemical bet and the doctrine of the healthy loss-making division

  1. 1967Hebel autoclaved aerated concrete goes into production
  2. 1968Sanyo Petrochemical established to build the Mizushima complex
  3. 1972Sanyo Ethylene completes a cracker of 350,000 tonnes a year
  4. 1972Asahi Kasei Homes founded; entry into the housing business
  5. 1974Asahi Medical founded; entry into medical devices
  6. 1980Miyazaki Electronics founded; entry into Hall-effect sensors
  7. 1980A second diversification away from the “oil-soaked” structure — uranium enrichment and nuclear development
  8. 1983Asahi Micro Systems founded; entry into semiconductors
  9. 1985The basic structure of the lithium-ion battery is established and patented
  10. 1992Merger with Toyo Jozo brings in a pharmaceutical base

1993–2023From selection and concentration to health-care M&A, and the close of a sixty-year cycle

  1. 1999Exit from foods and alcoholic drinks begins; foods transferred to Japan Tobacco
  2. 2000The corporate name is changed to Asahi Kasei
  3. 2002The shochu and low-alcohol drinks business is transferred to Asahi Breweries
  4. 2003Conversion to a holding-company structure
  5. 2012ZOLL acquired — entry into critical care
  6. 2015Polypore acquired — separators for lithium-ion batteries
  7. 2015Falsified pile-driving data at Asahi Kasei Construction Materials comes to light
  8. 2016The ethylene centre at the Mizushima works is shut down
  9. 2018Sage Automotive acquired
  10. 2020Veloxis acquired
  11. 2022Five Forcus companies acquired in housing
  12. 2023Non-core businesses divested

Founding Story

1923–1961Independence from the Nichitsu combine, and the diversification template made at Nobeoka

Asahi Kasei's first four decades were an exercise in derivation. One feedstock — ammonia synthesised at Nobeoka on cheap hydroelectric power — was turned into fertiliser, then into rayon and cupro fibre, then into explosives, each new business standing on the technology and the current of the one before it. Cut loose from the Nichitsu combine when the Occupation broke up the zaibatsu, the company grew sales from $47M (¥17bn) in the year to March 1952 to $124.7M (¥45bn) a decade later, and then discovered that fibre, the engine of those earnings, had stopped paying.

The pre-war structure: fertiliser, fibre and explosives all derived from ammonia

The company's first president, Noguchi Shitagau (野口遵), sailed for Europe in 1921[1] to buy the patent on the ammonia synthesis process invented by the Italian engineer Luigi Casale[2]. In September 1923 Nippon Chisso Hiryo (日本窒素肥料, Japan Nitrogenous Fertiliser) built an ammonium sulphate works at Nobeoka in Miyazaki prefecture and began making ammonium sulphate by the Casale method. Hydrogen obtained by electrolysing water with power from the company's own hydroelectric stations was combined directly with nitrogen separated from the air — the first industrialisation of the Casale process anywhere, and a historic experiment watched around the world[3]. What settled the choice of site was the steady supply of electricity from hydro generation on the Gokase river; by 1927 annual output of ammonium sulphate had reached the level of 60,000 tonnes, making Nobeoka one of the largest ammonium sulphate works in the country. On the same European trip Noguchi also saw the future in artificial silk, brought back a process for making viscose rayon yarn from Germany's Glanzstoff[4], founded Asahi Kenshoku (旭絹織, Asahi Silk Weaving) in 1922, and completed a mill at Otsu that started up in 1924[5]. A management conception that raised fertiliser and fibre at the same time was put into practice from the founding years, and the locational logic that chemical industry belongs near hydroelectric power lies behind Nobeoka's standing as the birthplace of Asahi Kasei.

Approaching the question from the advanced use of ammonia, Noguchi fixed on the cuprammonium yarn Bemberg, licensed the technology from Germany's Bemberg in 1929[6] and founded Nippon Bemberg Silk (日本ベンベルグ絹糸)[7]. The use of ammonia extended, by way of synthetic nitric acid, into the explosives industry as well, and in 1930 Nippon Chisso Explosives (日本窒素火薬) was set up[8]. In 1931 came Nobeoka Ammonia Silk (延岡アンモニア絹絲), and it is 1931 that stands as Asahi Kasei's official year of establishment[9]. In 1933 Nobeoka Ammonia Silk merged the two companies Nippon Bemberg Silk and Asahi Kenshoku to become Asahi Bemberg Silk (旭ベンベルグ絹糸)[10], and in 1943 it absorbed Nippon Chisso Explosives to form Nichitsu Chemical Industries (日窒化学工業)[11]. From one chemical technology, ammonia, several businesses were derived — fertiliser, chemical fibre, explosives — and the structure of setting diverse businesses side by side on the base of a single raw material and a single technology had already taken shape before the war. Asahi Kasei's diversified management in later years inherited that pre-war arrangement. Deriving several businesses from technology and electric power held as core resources was the management philosophy of the founder, Noguchi Shitagau, itself.

Spared Minamata by circumstance, and the limits of leaning on fibre

After the war ended in 1945, GHQ's policy of dissolving the zaibatsu split the Nichitsu combine into several companies. Nichitsu Chemical Industries, which carried the fibre and explosives businesses at Nobeoka, was separated from Nippon Chisso itself[12] and in April 1946, in keeping with the purpose of the dissolution, became independent under the new corporate name Asahi Chemical Industry (旭化成工業)[13]. Independence was followed by a run of trials — designation as a restricted company, application of the Act for Elimination of Excessive Concentration of Economic Power, designation for reparations, and a change of senior management under the purge directive — but the company pressed on with its reconstruction plan and by 1949 had substantially restored every division[14]. The Minamata works passed to Chisso, and Asahi Kasei was thereby spared, as things turned out, the later compensation question over Minamata disease. Nobeoka remained the centre of operations after independence too; the company history records that as of 1977 the workforce at Nobeoka numbered 7,413. Of the three pre-war Nichitsu plants, Minamata branched into the post-war Chisso and Nobeoka into Asahi Kasei, and that branching determined each of their post-war histories. The concentration of managerial resources on the founding site continued over a long period after the war as well, and became a defining feature of the organisational culture of the company.

In May 1961 the state of the synthetic fibre industry made the papers as “Fear of oversupply — synthetic fibre industry — the race to add capacity grows fiercer still”[15]. The spread of polyester was eroding the competitiveness of rayon and Bemberg, and the newly launched acrylic fibre Cashmilon generated a large volume of unsaleable stock[16]. Net profit as a share of sales fell from 8.0 per cent in the good year of 1957 to a mere 1.3 per cent in 1961, driving the company to the point of deciding on temporary layoffs. Miyazaki Kagayaki (宮崎輝) looked back on it years later: “From about 1961, when I became president, synthetic fibres such as polyester came onto the market in earnest. Seeing that, I thought that if we relied only on chemical fibres like rayon and Bemberg, we would eventually be finished”[17]. That fibre recession was what prompted Miyazaki's accession to the presidency and his push into diversification.

1962–1992Miyazaki Kagayaki's ¥100bn petrochemical bet and the doctrine of the healthy loss-making division

For thirty-one years one man decided what Asahi Kasei would become. Miyazaki Kagayaki took the fibre recession as proof that the company had to move its centre of gravity into chemicals, squeezed a stable $19.4M (¥7bn) a year out of rationalising fibre, and spent it underwriting businesses that lost money — a policy he was willing to call healthy — until they did not: petrochemicals at Mizushima, Hebel houses, dialysers, electronic components, pharmaceuticals. By the time he died suddenly in office in 1992 the company had eight fields of business and a reluctance to leave any of them.

Staking the company on ¥100bn — as much as a year's sales

Miyazaki Kagayaki, who became president in 1961, overhauled the composition of the board during the fibre recession, carrying through personnel changes that demoted the executive vice-president and a senior managing director at the same time, and set out to make the management younger. Miyazaki recalled the period thus: “Fibre alone will never keep us fed, I said. Asahi Kasei has fifty years of history, but for a long stretch of it we enjoyed our prosperity resting on what our predecessors had left us. It was an era of a 25 per cent dividend and a share price around ¥460. Even then I was constantly thinking that we ought to be doing something new”[18]. Rationalising the fibre business secured a stable profit of about $19.4M (¥7bn) a year, and within that limit he built a management policy of tolerating losses in new businesses — the “healthy loss-making division.” In July 1968 he founded Sanyo Petrochemical (山陽石油化学)[19] and committed roughly $277.8M (¥100bn) — a sum equal to Asahi Kasei's sales at the time — to building the Mizushima complex, a management decision that staked the company's fortunes.

Behind the move into petrochemicals lay a customer base for resins built up in advance through the joint venture Asahi-Dow[20]. As of 1969 Asahi-Dow held about 40 per cent of the domestic market in polystyrene resin and sustained high margins through joint development with electrical appliance makers. In 1982 Asahi Kasei dissolved the joint venture with America's Dow Chemical[21], taking the decision to spend about $168.6M (¥42bn) to make Asahi-Dow a wholly owned subsidiary, and so put in place an integrated production system running from feedstock to finished product. Miyazaki gave this as the essence of choosing a business: “The important thing for a company is what it chooses. That is what settles the contest. But what it chooses must have a future in it. And it must be within the range of one's own strength”[22]. Building up a business base outside fibre, and shifting the axis of management towards a diversified industrial structure, was the managerial skill of Miyazaki's that formed the foundation on which the investment succeeded.

From a failed Soviet licence to housing and medical devices: the speed of execution

In a 1967 interview Miyazaki made his intention to set housing and building materials up as the next pillar explicit: “What Japan lacks most is shelter. They say that once food and clothing are sufficient people learn propriety, but one more thing is lacking — shelter. Japan absolutely lacks it”; “I think we are entering an age of making light concrete that is itself the wall, the roof, the floor. This is a seed for the future. It is bound to come”[23]. The housing business set out from the failure of a Soviet licence taken in 1962. The silicalcite (シリカリチート) imported from the Soviet Union proved to have defects that left it of little practical use as a building material, and accumulated losses reached ¥3bn. In 1965 the company switched to German autoclaved aerated concrete technology, and in 1967 began producing Hebel, the lightweight aerated concrete that became its main product[24]. A managerial method of learning from failure and swapping technologies quickly showed itself plainly in the start-up phase of the housing business.

In 1972 the company abolished the agency system and shifted to direct sales, and in 1974 Yamaguchi Nobuo (山口信夫), who had served for years as Miyazaki's secretary, became head of the housing division. In the three years after Yamaguchi took over, sales of the housing business expanded roughly fivefold, from $23.9M (¥7bn) to $144M (¥37bn). A management decision to carry through a high-value-added strategy concentrated on the premium housing market of the Tokyo metropolitan area was rewarded by the market. In medical devices, Asahi Medical (now Asahi Kasei Medical) was founded in 1974[25], and the hollow fibre technology obtained in the course of research on Bemberg fibre was diverted into filter material for artificial kidneys[26]. The business turned profitable three years after entry, and by 1982 led the industry with about 30 per cent of the domestic market in artificial kidneys. In the interim results for the first half of 1977, the six other major synthetic fibre makers all fell into ordinary losses and Asahi Kasei alone posted an ordinary profit of $12.7M (¥3bn). The verdict took hold that “with non-fibre divisions at 53 per cent of sales, the company itself claims to be a ‘chemical maker’ rather than a ‘synthetic fibre maker’”[27].

Thirty-one years of expansion turning, on a sudden death, into thirty of contraction

For the thirty-one years from 1961 to 1992 Miyazaki Kagayaki sat at the centre of Asahi Kasei's management as a representative director. His tenure was among the longest in Japan's post-war chemical industry. Miyazaki's method was to entrust new businesses to men he trusted: Kuroda Yoshihisa (黒田義久) to building materials, Yamaguchi Nobuo to housing, Ogawa Mitsuo (小川三男) to Toyo Jozo (東洋醸造). At Toyo Jozo, Ogawa led a conversion of the business from alcoholic drinks to pharmaceuticals, shifting 50 per cent of sales into medicines. In January 1992 Asahi Kasei merged Toyo Jozo and took in its pharmaceutical base[28]. At the end of his 1983 serialised memoir “My Personal History” (私の履歴書) in the Nihon Keizai Shimbun, Miyazaki wrote “with this it can be continued”[29], signalling his view that the businesses to be handed to a successor were now assembled.

Miyazaki's diversified management left Asahi Kasei a business base across eight fields — fibre, petrochemicals, housing, building materials, medical devices, pharmaceuticals, foods and alcoholic drinks[30]. He was, however, reluctant to decide on withdrawals, and the low margin across the company as a whole remained as a problem for later years. Immediately after Miyazaki died suddenly on a business trip in April 1992, his successor as president, Yumikura Reiichi (弓倉礼一), stated his view that efficiency had fallen through the dispersion of managerial resources, and announced a change of course. The limits of the expansionary line were already widely recognised within the company, but Miyazaki's very presence had for a long time blocked any change of policy. It was the hinge on which thirty-one years of expansion reversed into thirty of contraction. Most of the businesses seeded in the Miyazaki era became objects of sale or shutdown over the following thirty years, and only the surviving pillars were carried over as the earnings base of the next age.

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Notes

  1. 企業の歴史 : 明治百年 (Corporate Histories: A Century of Meiji, Keizai Shunju-sha, 1968)↩
  2. 企業の歴史 : 明治百年 (Corporate Histories: A Century of Meiji, Keizai Shunju-sha, 1968)↩
  3. 企業の歴史 : 明治百年 (Corporate Histories: A Century of Meiji, Keizai Shunju-sha, 1968)↩
  4. 企業の歴史 : 明治百年 (Corporate Histories: A Century of Meiji, Keizai Shunju-sha, 1968)↩
  5. 企業の歴史 : 明治百年 (Corporate Histories: A Century of Meiji, Keizai Shunju-sha, 1968)↩
  6. 企業の歴史 : 明治百年 (Corporate Histories: A Century of Meiji, Keizai Shunju-sha, 1968)↩
  7. Asahi Kasei, annual securities report, 134th term (year to March 2025), Corporate History section↩
  8. 企業の歴史 : 明治百年 (Corporate Histories: A Century of Meiji, Keizai Shunju-sha, 1968)↩
  9. Asahi Kasei, annual securities report, 134th term (year to March 2025), Corporate History section↩
  10. Asahi Kasei, annual securities report, 134th term (year to March 2025), Corporate History section↩
  11. Asahi Kasei, annual securities report, 134th term (year to March 2025), Corporate History section↩
  12. Asahi Kasei, annual securities report, 134th term (year to March 2025), Corporate History section↩
  13. Asahi Kasei, annual securities report, 134th term (year to March 2025), Corporate History section↩
  14. 企業の歴史 : 明治百年 (Corporate Histories: A Century of Meiji, Keizai Shunju-sha, 1968)↩
  15. Yomiuri Shimbun (読売新聞), 25 May 1961↩
  16. Asahi Kasei, annual securities report, 134th term (year to March 2025), Corporate History section↩
  17. Diamond (ダイヤモンド), 29 June 1964↩
  18. Diamond (ダイヤモンド), 29 June 1964↩
  19. Asahi Kasei, annual securities report, 134th term (year to March 2025), Corporate History section↩
  20. Asahi Kasei, annual securities report, 134th term (year to March 2025), Corporate History section↩
  21. Asahi Kasei, annual securities report, 134th term (year to March 2025), Corporate History section↩
  22. Kasen Geppo (化繊月報), March 1967↩
  23. Kasen Geppo (化繊月報), March 1967↩
  24. Asahi Kasei, annual securities report, 134th term (year to March 2025), Corporate History section↩
  25. Asahi Kasei, annual securities report, 134th term (year to March 2025), Corporate History section↩
  26. Asahi Kasei, annual securities report, 134th term (year to March 2025), Corporate History section↩
  27. Yomiuri Shimbun (読売新聞), 15 November 1977↩
  28. Asahi Kasei, annual securities report, 134th term (year to March 2025), Corporate History section↩
  29. Nihon Keizai Shimbun (日本経済新聞), “My Personal History” (私の履歴書), December 1983↩
  30. Asahi Kasei, annual securities report, 134th term (year to March 2025), Corporate History section↩

References & sources

  1. Yomiuri Shimbun: 25 May 1961, on the fear of oversupply in synthetic fibre; 15 Nov 1977, on Asahi Kasei being the only maker in the black.
  2. Diamond (Diamond, Inc.), 29 June 1964, The sowing for the leap forward is done, with Miyazaki Kagayaki.
  3. Kasen Geppo, March 1967, Asking Asahi Kasei president Miyazaki Kagayaki.
  4. Nihon Keizai Shimbun (Nikkei Inc.), My Personal History by Miyazaki Kagayaki, December 1983.
  5. Corporate Histories: A Century of Meiji, Keizai Shunju-sha (1968), the Asahi Kasei entry.
  6. Asahi Kasei Corporation (annual securities reports) and results briefing materials, including the corporate-history section.

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