Radical restructuring and asset disposals after the largest loss in company history (2024)

A fast rebuild, and a problem with deep roots

What stands out in this rebuild is the speed from the declaration of crisis to the recovery. Management called the largest loss in the company’s history a crisis-level event in its own words, raised money by selling policy shareholdings and non-core businesses one after another, and went straight at the epicentres of the loss — Rabigh and Sumitomo Pharma. The result was a return to profit in the year to March 2025; the floor stopped falling out of the balance sheet within twelve months. It can be read as a use of the rare freedom a crisis grants management, reaching into assets that are hard to move in normal times.

But stopping the bleeding quickly and removing the disease are not the same thing. Neither the commodity dependence of the petrochemical business nor the hard problem of discovering new drugs can be solved by one year of restructuring, and the profit that returned was mixed with the effects of asset sales. Where should a chemical company that depends on the outside world for both its feedstock and its markets place its earning axis, while carrying the swings of the cycle and the weight of enormous investment? For a distinguished house that has sent leaders to the top of Japan’s business federation, that question remains carried forward, beyond the numbers of the V-shaped recovery.