Resonac Holdings - Company History

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Financial history 1953–2025 — revenue, cost structure, balance sheet, cash flow and key ratios, year by year →

Founded
1908
Head office
Tokyo, Japan
Listed
1949 · TYO: 4004
Founder
Mori Nobuteru (森矗昶)
Former names
Sobo Suisan (1908–26) · Nihon Yodo (1926–34) · Nippon Denki Kogyo (1934–39) · Showa Fertilizer (1928–39) · Showa Denko (1939–2023)
Revenue · FYE Mar 2025
$9.0B (¥1.35tn)
Net profit · FYE Mar 2025
$193.8M (¥29bn)

Timeline

1908–1955The electrochemical pioneer, and the portfolio it assembled

  1. 1908Mori Nobuteru founds Sobo Suisan to make iodine at Okitsu, Chiba
  2. 1926Nihon Yodo (日本沃度) established
  3. 1928Showa Fertilizer established by Tokyo Denki and Tokyo Dento
  4. 1931First ammonium sulphate made by a domestic process, at Kawasaki
  5. 1934Omachi works achieves Japan’s first industrial aluminium smelting
  6. 1934Nihon Yodo renamed Nippon Denki Kogyo
  7. 1939Nippon Denki Kogyo and Showa Fertilizer merge to form Showa Denko
  8. 1943Nichiman Aluminium absorbed under wartime consolidation
  9. 1945Kawasaki works restored; ammonium sulphate shipments resume
  10. 1949Listed on the Tokyo Stock Exchange and other exchanges
  11. 1951Central research laboratory opened; aluminium restarts at Omachi
  12. 1955Urea plant added at the Kawasaki works

1956–2002The conversion to petrochemicals, and what the oil shocks selected

  1. 1956Polyethylene technology licence signed with Phillips Petroleum
  2. 1957Showa Synthetic Chemical Industry merged; Showa Yuka established
  3. 1962Aluminium production begins at the Chiba works
  4. 1967Niigata Minamata disease damages suit filed
  5. 1969Oita petrochemical complex enters commercial operation
  6. 1973Chiba aluminium expansion abandoned for the Oita second phase
  7. 1973Compensation agreement concluded over Niigata Minamata disease
  8. 1974Joint venture with Phillips dissolved; petrochemicals unified
  9. 1976Showa Light Metals established to hold aluminium smelting
  10. 1979Showa Yuka absorbed into the parent company
  11. 1986Domestic aluminium smelting halted entirely
  12. 1988Airco Carbon graphite electrode business bought from The BOC Group
  13. 1990Oita ethylene capacity reaches 730,000 tonnes a year
  14. 2001Showa Aluminum merged into the parent

2003–2022Becoming a semiconductor materials company

  1. 2003Hard-disk business of the Mitsubishi Chemical group acquired
  2. 2009First full-year operating loss and net loss in company history
  3. 2009Fujitsu’s hard-disk business acquired
  4. 2009Showa Tansan made a wholly owned subsidiary
  5. 2010Showa Highpolymer merged into the parent
  6. 2011Ichikawa Hideo succeeds Takahashi Kyohei as president
  7. 2016Sun Allomer made a subsidiary
  8. 2017Morikawa Kohei becomes president
  9. 2017SGL GE Holding GmbH acquired; world-leading graphite electrode share
  10. 2018Record results: operating profit ¥180bn, net profit ¥111.5bn
  11. 2020Hitachi Chemical acquired for roughly ¥960bn
  12. 2020Pandemic and acquisition burden bring an operating and net loss
  13. 2022Takahashi Hidehito becomes president

Founding Story

1908–1955The electrochemical pioneer, and the portfolio it assembled

Resonac begins not with chemicals but with seaweed: an iodine works founded on the Chiba coast in 1908, which within a quarter of a century had become the first company in Japan to smelt aluminium and the first to make ammonium sulphate by a domestic process. The two Mori companies that achieved those firsts merged in 1939 to form Showa Denko, and by the mid-1950s — with sales of $40.6M (¥15bn) in 1953 rising to $52.8M (¥19bn) by 1955 — the rebuilt firm had a central research laboratory, a Deming Prize and a bribery scandal that had put its president in a cell.

Mori Nobuteru’s electrochemistry, begun with iodine

The origin of Resonac lies in Sobo Suisan, established in 1908 by Mori Nobuteru (森矗昶) to manufacture and sell iodine. At Okitsu in Chiba Prefecture, Sobo Suisan made iodine and potassium nitrate from kajime — a kelp harvested on the neighbouring shore. Through a merger with Tokyo Denki, whose president was Suzuki Saburosuke (鈴木三郎助), in 1919 and a subsequent separation, it became Nihon Yodo (日本沃度), and from there advanced into one field of electrochemistry after another. Mori grasped early the possibilities of an electrochemical industry built on hydroelectric power, founding Nihon Yodo in 1926 and, in 1928, Showa Fertilizer (昭和肥料) as a separate company, broadening the ground the group stood on. Nihon Yodo manufactured industrial chemicals, carbide, abrasives, ferroalloys and aluminium at its works in Hirota (Fukushima), Shiojiri and Omachi (Nagano) and Yokohama, and in March 1934 changed its name to Nippon Denki Kogyo (日本電気工業) to match what the business had actually become. What can be seen here is how a single company that began with iodine grew, in barely a quarter of a century, into an electrochemical firm with aluminium smelting at its core.

Mori pushed simultaneously into electrolytic aluminium, carbide and chemical fertiliser — the most advanced electrochemical fields of the day. At the core of his business philosophy lay the idea that water, the one resource Japan possessed in abundance, should be converted into electricity and then into feedstock, and that domestic technology should be developed on that base to build the country through industry. That a company starting from iodine production expanded within a quarter of a century into a group of electrochemical firms whose principal businesses were aluminium smelting and chemical fertiliser was itself a miniature of pre-war Japan’s industrialisation. The notion of tying import substitution to hydroelectric power occupied a distinctive position even within Japan’s electrochemical industry of the period. 日本会社史総覧 (A Conspectus of Japanese Company Histories, 1995) likewise records both firms as enterprises managed under Mori Nobuteru, a man who played a pioneering role in the development of modern Japanese industry.

Domestic aluminium, domestic ammonium sulphate, and the merger

Showa Fertilizer was established in 1928 by Tokyo Denki and Tokyo Dento (東京電灯, Tokyo Electric Light), which built a calcium cyanamide works at Kanose in Niigata Prefecture and an ammonium sulphate works at Kawasaki and so entered the manufacture of chemical fertiliser. It was at that Kawasaki plant that, in April 1931, Showa Fertilizer succeeded in producing ammonium sulphate by a domestic process for the first time in Japan. In January 1934 the Omachi works of Nippon Denki Kogyo — the former Nihon Yodo — achieved the first industrialisation of aluminium smelting in Japan. Chemical fertiliser and aluminium, both of them import-dependent items at the time, were domesticated in parallel by the two Mori companies. Although separate legal entities, the two were run on the same management philosophy, and unification by merger was only a matter of time. Building on electric power in order to displace imports was also a growth model of a different lineage from that of the trading houses and the zaibatsu chemical firms of the day.

In June 1939, in the hope of further development, Nippon Denki Kogyo and Showa Fertilizer merged and the new company, Showa Denko, was born. It was the founding of a company formed by the union of the two Mori electrochemical firms — the starting point of a post-war diversified chemical company. With a pioneering spirit as its management creed, the firm continued to develop through the Second World War with aluminium at its centre, and sought to expand into Korea. In 1943 it absorbed Nichiman Aluminium and so took its part in the wartime consolidation, but in the final phase of the war its principal Kawasaki works was devastated by bombing, and with defeat the production of aluminium was prohibited. Even so it began reconstruction the day after the surrender, and by the end of 1945 had resumed shipments of ammonium sulphate. Responding to demands for increased fertiliser output against the background of the post-war food situation, the rebuilding of the company around fertiliser went forward, with the Shiojiri, Chichibu, Toyama and Asahikawa works converted to calcium cyanamide among other measures. It passed through a period of disorder caused by the purge from public office as well, but the bridge between the pre-war Mori konzern and the post-war publicly listed enterprise was carried at this moment by the restored Kawasaki works and the fertiliser plants around the country.

The central research laboratory, and the Showa Denko bribery affair

Post-war Showa Denko listed on the Tokyo Stock Exchange and elsewhere in May 1949 and set out again as a publicly held company. In 1951 it restarted aluminium production at the Omachi works, restoring the principal business that the wartime prohibition had cut off. In that same year of 1951 it opened its central research laboratory and turned the helm towards an emphasis on research and development, and its quality-control efforts won outside recognition with the first Deming Prize. In 1955 it added urea at the Kawasaki works, widening a chemical range that had been given over almost entirely to fertiliser. The opening of the central research laboratory and the Deming Prize belong to the very earliest cases of the quality-control movement among Japanese companies in the reconstruction period, and the firm took its place among the leading group in quality control within the chemical industry. The recasting of an operating company in iodine, aluminium and fertiliser into a diversified chemical company with research, development and quality control as pillars of management thus advanced at an early stage after the war.

That said, the arrest of Hinohara Setsuzo (日野原節三), then president, in the Showa Denko bribery affair of 1948 cast a shadow over both the credit of the company and the activity of the organisation. 日本会社史総覧 (A Conspectus of Japanese Company Histories, 1995) likewise records that the involvement of the then president Hinohara Setsuzo in this bribery affair damaged the company’s activity not a little. 企業の歴史 : 明治百年 (Corporate Histories: A Century of Meiji, 1968), by contrast, paints the period restrainedly as one of disorder caused by the purge from public office; the temperature at which the affair is handled differs from one survey work to the next. While the pioneering spirit of the founder Mori Nobuteru was held aloft, the fact that in the disorder of the post-war years a manager tied himself to politics and was prosecuted was likewise one face of the structural risk carried by a diversified chemical company in the reconstruction era. An organisation advancing through research and quality control, and a management that misjudged its distance from politics, lived together in the Showa Denko of that time.

1956–2002The conversion to petrochemicals, and what the oil shocks selected

A licence signed with Phillips Petroleum in 1956 began the slowest and largest change in the company’s history: an electrochemical firm built on hydroelectric power moved its centre of gravity to naphtha, raised the Oita complex, and then — when the oil shocks and a rising yen made cheap electricity impossible — closed the aluminium smelting that had been its proudest claim. Sales grew from $63.6M (¥23bn) in 1956 to $5.4B (¥674bn) by 2002, but the company that earned the later figure was scarcely the same business as the one that earned the first.

How the Phillips Petroleum tie-up changed the shape of the business

In 1956 Showa Denko concluded a contract with Phillips Petroleum of the United States for the transfer of polyethylene technology. In June of the following year, 1957, it established the subsidiary Showa Yuka, and in 1959 began production of high-density polyethylene. In parallel it merged Showa Synthetic Chemical Industry, a maker of acetic acid derivatives, widening its range further into the field of organic chemistry. This was the moment at which an electrochemical company of aluminium and fertiliser advanced, by importing technology from outside, into the business territory of petrochemicals. A conversion of the business that took as its starting point a technical tie-up with a Western oil major — something foreign to the electrochemical line that ran from the Mori konzern — began to move from here. It was also the prelude to a long shift that would move the core composition of the company’s businesses from water power to oil.

On the extension of that decision lies the Oita petrochemical complex, which began commercial operation in April 1969. It was an integrated petrochemical site drawing on the combined strength of the group companies, designed to run everything from ethylene through polyethylene to utilities as a single whole. In November 1962 the company had begun aluminium production at its Chiba works, and throughout the 1960s it fought on two fronts, preserving the traditional aluminium business while raising petrochemicals into a new principal business. For the ten years of the 1960s the company ran its two faces — electrochemical pioneer and petrochemical newcomer — side by side. The placement of its sites at Oita in the west and Chiba in the east was the physical expression of that two-front posture.

The portfolio the oil crisis selected

The first oil crisis of 1973 forced a hard selection upon the two-front strategy. Of the aluminium expansion at Chiba and the second-phase ethylene expansion at Oita then being planned, the company abandoned the aluminium expansion and took the decision to concentrate its management resources on the Oita second phase. In January 1974 it dissolved the joint-venture relationship with Phillips, merging Showa Yuka and Tsurusaki Yuka to unify the petrochemical business. With the absorption of Showa Yuka into the parent in July 1979, petrochemicals were pushed up into the position of the company’s principal business in name as well as in fact. The recasting from electrochemical pioneer into a petrochemicals-led enterprise advanced a further step in the wake of the first oil crisis. Cutting away electricity-intensive aluminium smelting and moving the centre of gravity to naphtha-based petrochemicals also matched the wider current running through the Japanese chemical industry at the time.

In the Niigata Minamata disease damages suit brought in 1967, the company indicated that it would not appeal against the judgment of the court of first instance but accept it, and in 1973 a compensation agreement was concluded. Including its handling of pollution, the 1970s were the period in which the company’s social position was rewritten. This is a firm that laid the foundations of a typical electrochemical industrial company in the pre-war period and then, entering the 1970s, recast petrochemicals as its principal business. The two periods are contrasted almost as though they were different operating companies — a point 日本会社史総覧 (A Conspectus of Japanese Company Histories, 1995) also makes. Seen from the standpoint of its relation with society as well, the outline of the company divides sharply between pre-war and post-war. Carrying out the compensation agreement was also the drawing of a single line of responsibility between the founder’s generation and the management of the post-war one.

Leaving domestic aluminium smelting — the end of a Japanese first

The second oil crisis and the strong yen forced a still more fundamental restructuring of the business. Domestic aluminium smelting, which had lost its international competitiveness through the surge in electricity charges, was carved out into Showa Light Metals, founded in 1976, and domestic smelting was then halted in stages. In November 1986 Showa Light Metals was dissolved, the business absorbed back into the parent, and domestic aluminium smelting stopped. The same company that in 1934 had been the first in Japan to industrialise aluminium smelting closed that business fifty-two years later. Aluminium smelting, the strongest ground on which it had called itself an electrochemical pioneer, had here played out its historical role in full. The union of hydroelectric power and import substitution that the founder Mori Nobuteru had envisaged disappeared amid post-war international competition.

In its place, expansion advanced into new fields such as fine chemicals, titanium, electronics materials and forged aluminium. In 1988 it acquired abroad the graphite electrode business of the Airco Carbon division of The BOC Group, laying the footing for a global graphite electrode business. In October 1990 the reinforcement of the second ethylene unit at Oita established a capacity of 730,000 tonnes a year, growing the site into what was then the largest petrochemical complex in Japan on a single location. The BOC acquisition was also a move that built the prototype for the overseas development of the electrode business, foreshadowing the later purchase of SGL. The recasting from electrochemical pioneer into petrochemicals-led enterprise was here all but complete, from both sides at once — withdrawal from aluminium and the launching of new businesses.

2003–2022Becoming a semiconductor materials company

Twenty years of acquisitions turned a complex-dependent chemical firm into a maker of materials for semiconductors: hard disks from Mitsubishi Chemical and Fujitsu, graphite electrodes from SGL, and finally Hitachi Chemical for roughly $9.0B (¥960bn). Revenue rose from $5.9B (¥689bn) in 2003 to $10.6B (¥1.39tn) in 2022, but the path ran through two full-year losses, and the price of the last purchase was the name Showa Denko itself.

Hard disks and graphite electrodes — two acquisitions that changed the face

The Showa Denko of the 2000s was a company that set about recasting its business portfolio through acquisition in order to escape a structure dependent on the petrochemical complex. After merging Showa Aluminum into the parent in March 2001 to tidy up the aluminium processing business, it bought the hard-disk business of the Mitsubishi Chemical group in January 2003. Entry into HD media — a field with which the company had until then had little connection — is the part that later became the core of its device solutions business. In July 2009 it additionally acquired the hard-disk business of Fujitsu, showing a move to advance the concentration of the HD media industry into fewer hands. This was also the period in which a new axis of electronic components and precision materials began to be laid over the lineage of iodine, aluminium, fertiliser and petrochemicals.

In the same period, the year to December 2009 brought a post-Lehman deficit — sales of $7.3B (¥678bn), an operating loss of $53.5M (¥5bn) and a net loss of $406.3M (¥38bn). For a company that had held to a profitable footing over many years, it was a heavy result: the first full-year operating loss in its history. In January 2011 the presidency passed from Takahashi Kyohei (高橋恭平) to Ichikawa Hideo (市川秀夫), and command of the rebuilding was handed on. The limits of the diversified-chemicals course had begun to show in the results, and the reality that acquiring hard disks and graphite electrodes alone had not reached as far as a structural improvement in earning power was thrust forward as figures in the accounts of the day. Escaping dependence on the complex was not something that acquisition, as a method, could complete by itself.

To the top of the world in graphite electrodes — the SGL acquisition

In January 2017 the presidency passed from Ichikawa Hideo to Morikawa Kohei (森川宏平). Under Morikawa the company stepped into concentrated investment in the graphite electrode business. In October 2017 it acquired SGL GE Holding of Germany and, together with its North American base (the former BOC operation acquired in 1988), took a world-leading share in graphite electrodes. In the year to December 2018 that immediately followed, it recorded the best results in its history — an operating profit of $1.6B (¥180bn) and a net profit of $1.0B (¥112bn). It was a year in which the surge in graphite electrode prices that accompanied expanding demand for electric-arc-furnace steel brought cash to the company in a short space of time. It may also be called the moment at which the decision to seize world oligopoly in graphite electrodes — a niche field even within diversified chemicals — was repaid for the first time in visible form. An oligopolistic structure gathering North America, Europe and Japan into a single company had become a competitive moat that rivals of the day would have found hard to imitate.

That cash was precisely what funded the next acquisition. If the company was in earnest about shedding its diversified-chemicals skin, it would have to take in whole an advanced-materials company possessing both research and development and a customer base. The design drawn up in the closing phase of the Morikawa regime was handed on to the next president. The record profit of 2018 was of a nature to be treated as temporary war chest for a conversion of the business in later years. The very idea of applying profits obtained by chance through a sharp rise in graphite electrode prices to the cost of a long-term conversion of the business was a judgment that symbolised the distinctiveness held by the management of the time.

What buying Hitachi Chemical for ¥960bn meant

In April 2020 Showa Denko committed roughly $9.0B (¥960bn) to buy Hitachi Chemical, later Showa Denko Materials. The acquisition of a company holding a world-leading share in back-end packaging materials — encapsulants for semiconductor packages, copper-clad laminates and the like — was a decision that made irreversible the conversion from an old-style diversified chemical firm into a semiconductor and electronic materials company. At the same time, because of the coronavirus pandemic and the burden of the acquisition, the year to December 2020 brought sales of $9.1B (¥974bn), an operating loss of $181.7M (¥19bn) and a net loss of $714.6M (¥76bn), a result that left the company carrying an ordeal on the financial side. An acquisition accompanied by borrowing on a scale exceeding the cash won in graphite electrodes was a choice of the kind that goes after long-term business structure even at the sacrifice of short-term results.

In January 2022 the presidency passed from Morikawa Kohei to Takahashi Hidehito (髙橋秀仁), and under Takahashi the final assembly of the integration began. In January 2023 the company shifted to a holding-company structure and at the same time changed its trade name from Showa Denko to Resonac Holdings, while the subsidiary Showa Denko Materials was also renamed Resonac and succeeded to all the businesses. In interviews immediately after the integration, Takahashi Hidehito set out a policy of concentrating management resources on semiconductor and electronic materials and aiming at a company able to compete globally, stating explicitly his intention to discard the name Showa Denko, which had stood since 1939 for eighty-four years. The rebranding, completed three years after the purchase of Hitachi Chemical, was also the turning point at which the company’s face was rewritten from diversified chemicals to advanced materials.

Read the full history in Japanese →

References & sources

  1. Corporate Histories: A Century of Meiji, Keizai Shunju-sha (1968), the Showa Denko entry.
  2. A Conspectus of Japanese Company Histories, Toyo Keizai Inc. (1995), the entries for Showa Denko and its predecessor companies.

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