Nissan Chemical - Company History

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Financial history 1963–2026 — revenue, cost structure, balance sheet, cash flow and key ratios, year by year →

Founded 1887
Founder Takamine Jokichi · Shibusawa Eiichi · Masuda Takashi
Founding location 東京都
Core business at founding Manufacture of chemical fertiliser, chiefly superphosphate of lime
Listed 1949
President Yagi Shinsuke President since 2021 (age 64, as of 2026)
Current priority Research and development · Capacity investment Raising output of front-end semiconductor materials and discovering agrochemical actives in-house
Founding
In February 1887 Takamine Jokichi, Shibusawa Eiichi and Masuda Takashi raised Tokyo Jinzo Hiryo, the Tokyo Artificial Fertiliser Company, on capital of ¥250,000. The idea was Takamine Jokichi's, formed while studying in Britain when he watched superphosphate fertiliser being made, and the venture belonged to the Meiji drive to promote industry: Japanese agriculture then depended on imported fertiliser, and this was to carry it on domestic production instead. Agricultural knowledge was not yet widespread and the business did not advance; only in its third year did it post an operating profit. After a fire destroyed the works in May 1893 it was reorganised as Tokyo Jinzo Hiryo Co., Ltd., with Shibusawa Eiichi taking office as its first chairman of the board. From 1908 it absorbed Teikoku Hiryo, Osaka Ryuso and others, and with a three-way merger in 1923 it became the largest fertiliser maker in Japan. In December 1937 it entered the Nissan 財閥 and renamed itself Nissan Chemical Industries; it then changed parents twice, to Nippon Mining in 1943 and Nippon Oil & Fats in 1945, and in 1949 it separated its oils-and-fats division and listed on the Tokyo Stock Exchange.
The Decision
It divided its buyers into three, and waited for the year the market turned before it left. In 1965 it set up Nissan Chemical Petroleum and entered petrochemicals as a late arrival, but Mitsubishi Kasei, Mitsui Chemicals and Sumitomo Chemical had built their production bases and sales networks first, and narrowing the field to the technically demanding products — polyvinyl chloride, polyethylene and higher alcohols — did not close the gap in scale. After the oil shock of 1973 the structural recession brought net losses in the years ended March 1982 and March 1983, two in a row, and the cumulative loss reached $24M (¥6bn). In 1988 President Nakai Takeo decided on a complete withdrawal from all three petrochemical divisions. Trial transfers by joint venture had begun in 1980, and over eight years the businesses were handed over entire — polyvinyl chloride to Tosoh, higher alcohols to Kyowa Hakko and polyethylene to Maruzen Petrochemical. The consideration for those sales, together with $107.8M (¥15bn) of convertible bonds issued in 1991, became the money for concentrated investment in agrochemicals, pharmaceuticals and functional materials.
Today
The business with the largest sales ranks third in profit. Of consolidated sales of $1.8B (¥280bn) in the year to March 2026, the wholesale business, which distributes chemicals, was the largest at $619.6M (¥98bn), yet its segment profit came to only $24M (¥4bn). Profit is centred on functional materials at $223.2M (¥35bn) and agricultural chemicals at $164.4M (¥26bn), the two together more than nine-tenths of operating profit of $401.5M (¥64bn). Since the medium-term five-year plan of 1989 concentrated management resources on agrochemicals, pharmaceuticals and functional materials, functional materials has widened from alignment film materials for liquid-crystal displays to front-end semiconductor materials, and returned a margin of 45 per cent on sales of $495.1M (¥78bn). That a wholesale business which makes scale and a functional materials business which makes profit sit in the same profit and loss account is because, since 1988, the company has decided whether a business stays or goes by its margin and not by its sales.
Competition
Having lost the backing of a 財閥, Nissan Chemical secured a higher margin than the makers descended from one. Nissan Chemical Industries entered the Nissan 財閥 in 1937, lost the support of that capital in the postwar dissolution, and took to capital investment with a caution unlike the zaibatsu-descended makers. In petrochemicals it could not match them on scale, and it withdrew in 1988. In that same petrochemical field Sumitomo Chemical went ahead with Rabigh, a fifty-fifty joint venture with Saudi Aramco, and booked the largest loss in its history in the year to March 2024; Nissan Chemical, in the same year, returned an operating margin of 21 per cent. NOF, created in 1949 when the oils-and-fats division was separated, likewise sold its paint and welding businesses in 2000 and moved towards functional chemicals. Not carrying heavy plant is what left a company whose profit and loss is decided by which actives and materials it discovers and adopts for itself, rather than by the market for feedstock.

Timeline

1887–1987From Tokyo Artificial Fertiliser to the Nissan zaibatsu, and a late entry into petrochemicals

  1. 1887Tokyo Jinzo Hiryo founded — Japan’s first chemical fertiliser company
  2. 1889Nihon Seimi Seizo (日本舎密製造) established
  3. 1891The Onoda works completed
  4. 1895The Oji manufacturing plant established
  5. 1910Renamed Dai-Nippon Jinzo Hiryo
  6. 1923Three-way merger with Kanto Sanso and Nihon Kagaku Hiryo
  7. 1937Nissan Chemical Industries formed; the company enters the Nissan 財閥
  8. 1943Absorbed into Nippon Mining as its chemical division
  9. 1949Listed on the Tokyo Stock Exchange in May
  10. 1949Oils-and-fats division separated as NOF under the reorganisation law
  11. 1965Nissan Chemical Petroleum established; entry into petrochemicals
  12. 1969Saitama plant opened; Oji closed and production moved to Sodegaura
  13. 1983A second consecutive year of net loss

1988–2009President Nakai exits petrochemicals entirely and sets three pillars: agrochemicals, pharmaceuticals and functional materials

  1. 1988Complete exit from petrochemicals — PVC, polyethylene and higher alcohols
  2. 1989Medium-term five-year plan; heavy investment in high-performance materials
  3. 1989Alignment film materials for liquid-crystal displays commercialised
  4. 1989Nissan Chemical America Corporation established in the United States
  5. 1993Record recurring profit of ¥5.4bn in the year ended March
  6. 1996Nissan Chemical Houston Corporation established
  7. 1998Coating materials for semiconductors commercialised
  8. 2001Research and development organisation restructured
  9. 2001Nissan Agri established; the fertiliser business spun off
  10. 2002Herbicide business acquired from Nihon Monsanto
  11. 2002Nissan Chemical Europe S.A.S. established in France
  12. 2003Livalo, a hyperlipidaemia treatment, brought to market
  13. 2008Kinoshita Kojiro appointed president and representative director

2010–2023Global expansion, agrochemical acquisitions and a change of name

  1. 2010Fungicide business acquired from Dow AgroSciences
  2. 2010Local subsidiary opened in Taiwan
  3. 2013Thin Materials GmbH of Germany acquired
  4. 2014Local subsidiary opened in Shanghai, China
  5. 2017New subsidiary established in Suzhou, China
  6. 2018Trading name changed from Nissan Chemical Industries to Nissan Chemical
  7. 2019Quinoxyfen fungicide business acquired from Corteva
  8. 2022Production of melamine, a basic chemical, halted
  9. 2023Nippon Phosphoric Acid acquired to secure fertiliser feedstock

Founding Story

1887–1987From Tokyo Artificial Fertiliser to the Nissan zaibatsu, and a late entry into petrochemicals

Nissan Chemical begins as a Meiji project of national self-sufficiency — Japan's first chemical fertiliser company, founded in 1887 to break the country's dependence on imported fertiliser — and spends the next century consolidating an industry, passing under the Nissan 財閥, losing that backing to the postwar dissolution, and then betting on petrochemicals as a late entrant. Sales grew from $61.1M (¥22bn) in 1963 to $432.8M (¥103bn) two decades later, but the profit did not follow the volume, and by the early 1980s the bet had turned into two straight years of losses.

From a Meiji ambition to make fertiliser at home to reorganisation under Nissan

In February 1887 a group of financiers who stood among the most prominent of their day — Takamine Jokichi, Shibusawa Eiichi and Masuda Takashi — set out to manufacture chemical fertiliser domestically, and began trading as Tokyo Jinzo Hiryo (東京人造肥料会社, Tokyo Artificial Fertiliser Company)[1]. It was the chemist Takamine Jokichi who, while studying in Britain, had watched superphosphate fertiliser being made and fixed on chemical fertiliser as a business; on his return he obtained the backing of Shibusawa Eiichi and Masuda Takashi[2] and founded the firm with capital of ¥250,000 — the pioneer of chemical fertiliser manufacture in Japan[3]. Japanese agriculture at the time rested on the fragile structure of imported fertiliser, and raising a self-sufficient industrial-chemical sector at home, under the 殖産興業 policy of promoting industry, carried for Shibusawa and his founding generation the colouring of a national mission rather than a commercial venture alone. In the first years agricultural knowledge was not yet widespread and the business did not go as intended; only in its third year did the company post an operating profit. After the works burned down in a fire in May 1893 it was renamed Tokyo Jinzo Hiryo Co., Ltd. in step with the enactment of the Commercial Code, with Shibusawa Eiichi taking office as its first chairman of the board[4]. From the late Meiji years into the Taisho period fertiliser companies sprang up one after another across the country and competition sharpened; from 1908 onward the company absorbed Teikoku Hiryo, Hokkaido Jinzo Hiryo, Osaka Ryuso, Chugoku Hiryo, Ryusan Hiryo and Hokuriku Jinzo Hiryo in succession and bought the fertiliser division of Settsu Seiyu, becoming Japan's largest fertiliser maker[5]. In 1923 it led the restructuring of the industry itself, through a three-way merger of Tokyo Jinzo Hiryo, Kanto Sanso and Nihon Kagaku Hiryo[6], and took its place among the leading group in domestic chemical fertiliser. From the manufacture of fertiliser centred on sulphuric acid and superphosphate of lime, diversification into agricultural and industrial chemical agents followed in time.

Having widened its base through the great consolidation of the Taisho years, the company kept expanding even under the slump of the early Showa period. In 1928 it built a plant at Toyama using the Fauser ammonia synthesis process, and in 1936 it installed new S-type electrolytic cells at the Oji works and began making Japan's first compound fertiliser[7]. In April 1937, seeking to move into chemical manufacture tied to coal, it combined with Nippon Tan (日本炭) and took the name Nippon Kagaku Kogyo (Nippon Chemical Industries)[8]; in December of the same year, as the Japanese economy took on an increasingly wartime character, it came under the Nissan 財閥 and changed its name to Nissan Chemical Industries[9], laying the foundation of the trading name it carries today. Membership of the Nissan konzern made it possible, to a degree, to secure raw materials and build out production capacity in line with wartime materials controls and military mobilisation, and a business structure resting on basic chemicals and agrochemicals took shape. Once the Pacific War began, imports of phosphate rock were cut off and fertiliser production was disrupted; in April 1943, at the demand of the times, the company was absorbed into Nippon Mining and became its chemical division, and in April 1945 it became the chemical division of Nippon Oil & Fats, taking the name Nissan Chemical Industries once again[10]. After the war chemical fertiliser was designated an essential industry and the plants were rebuilt at speed, but the company came under both the Deconcentration Law and the Corporate Reconstruction and Reorganisation Law; in 1949 it listed on the Tokyo Stock Exchange and, under the latter law, separated its oils-and-fats division as NOF (日油)[11], starting again from a fresh point as a private postwar enterprise. Its capital at that moment was $186,806 (¥67m)[12]. Yet the fact that the complete dissolution of the Nissan 財閥 had stripped away its financial backing cast a long shadow over the choices management made in later years. The postwar company had to raise its own funds and reach its own judgements, and approached capital investment with a caution unlike that of the zaibatsu-descended makers.

A late entry into petrochemicals ends in two consecutive years of loss

As postwar reconstruction advanced and fertiliser output rose in earnest, the economics of fertiliser deteriorated; combined with weak export prices this left every fertiliser specialist struggling, and the company set out afresh with the aim of remaking itself from a fertiliser maker into a diversified chemical company. In 1952 it entered a technical tie-up with Montecatini of Italy and installed Fauser-process urea plant at the Toyama works, while completing a continuous superphosphate plant at Oji[13]. In 1963 it brought in Hidaka Teru (日高輝) from the Industrial Bank of Japan as president and pressed ahead with vigorous rationalisation, including the separation of the superphosphate of lime division; the following year, after Hidaka left to rebuild Yamaichi Securities, Ishii Ichiro, deputy governor of the Industrial Bank of Japan, took over as president[14]. Out of that rationalisation and change of management came the decision of 1965, when Nissan Chemical Industries established Nissan Chemical Petroleum and entered the petrochemical business, moving in earnest into commodity resins — the royal road of the chemical industry in the high-growth years. The zaibatsu-descended chemical makers that had gone before it, however — Mitsubishi Kasei, Mitsui Chemicals and Sumitomo Chemical — had already built solid production bases and sales networks, and it was not realistic for a late entrant to compete with them on economies of scale. The company narrowed its focus to the technically demanding products — polyvinyl chloride, polyethylene and higher alcohols — in order to differentiate itself from the first movers, and reorganised its production system, opening a new plant in Saitama in 1969 while closing the Oji works and moving to Sodegaura[15].

The oil shock of 1973, however, left the whole petrochemical industry facing surplus capacity and a sharp rise in feedstock costs, and Nissan Chemical was buffeted by weak sales and falling prices. In the years ended March 1982 and March 1983 it fell into net loss for two consecutive years, and the cumulative loss swelled to $24M (¥6bn). For a company with no Nissan 財閥 behind it, the limits of a strategy of matching rivals on scale were exposed. In an industry in structural recession, where the first movers survive on economies of scale, a late entrant that tries to differentiate still finds it hard to improve its earnings structure, and the question of whether the petrochemical business should continue at all became the foremost issue facing management. The effort to differentiate within the chosen niches of polyvinyl chloride, polyethylene and higher alcohols did not translate into better earnings under structural recession; if anything, the company's small scale bore down on it as a disadvantage in the cost of procuring raw materials and in spreading fixed costs.

1988–2009President Nakai exits petrochemicals entirely and sets three pillars: agrochemicals, pharmaceuticals and functional materials

The pivot of the company's history falls in 1988, when a new president gave away all three petrochemical businesses to rivals rather than defend them, and then spent the following two decades spending the proceeds on discovery research in agrochemicals, drugs and materials for displays and chips. Consolidated sales barely moved across the period — $1.1B (¥134bn) in 1992 against $1.7B (¥160bn) in 2009 — which was exactly the point: what was being rebuilt was the margin, not the volume.

The paradox of letting the mainstay go in its entirety

In 1988 Nakai Takeo (中井武夫), on becoming president of Nissan Chemical Industries, decided on a complete withdrawal from all three petrochemical divisions. The polyvinyl chloride division went to Tosoh, the higher alcohols division to Kyowa Hakko and the polyethylene division to Maruzen Petrochemical, each transferred by selling the business entire. Trial transfers through joint ventures had already begun in 1980, and after eight years of preparation — negotiations with the parties involved and adjustment inside the company — the sales were completed at a moment chosen for an upturn in the market. Letting go of the main business in its entirety was a decision bold beyond any parallel in the Japanese petrochemical industry, and unusual too in that the withdrawing company left with adequate preparation and adequate consideration in hand.

President Nakai framed the withdrawal not as mere contraction but as a change of business, and set out repeatedly inside the company a post-exit scenario of a high-value-added path built around the agrochemical business. Vice-president Tokushima (徳島) held direct conversations with roughly 1,000 employees, driving home the need for reform and the meaning of the withdrawal. As a result the exit was completed smoothly, without provoking resistance from the workforce. At a time when other Japanese companies were seeing far-reaching retrenchment corrode the cohesion of the organisation, Nissan Chemical's petrochemical withdrawal was a rare success in achieving a change of business and organisational consent at once. In the management history of Japan's postwar chemical makers it was long recounted as the representative case of a company that gave up its mainstay in order to choose survival and growth.

Concentrated investment in three pillars, and margin chosen over scale

In 1989, the year after the withdrawal, Nissan Chemical under President Nakai drew up a new medium-term five-year plan setting out a policy of concentrating management resources on three fields — agrochemicals, pharmaceuticals and functional materials. In agrochemicals it launched a run of highly distinctive herbicides and insecticides: Sirius (シリウス) in 1989, Sanmite (サンマイト) in 1991 and Permit (パーミット) in 1994, the fruits of an in-house discovery-led research and development system. In pharmaceuticals it built an earnings base with Landel (ランデル) in 1994 and, in 2003, the hyperlipidaemia treatment Livalo (リバロ); in functional materials it commercialised alignment film materials for liquid-crystal displays in 1989 and coating materials for semiconductors in 1998. One after another, the technological assets that would underpin the later high-margin structure were put in place.

Functional materials serve markets that are limited in size, but the design requirements specific to each application are severe, and once a supplier has been adopted it is difficult to replace. In two growing markets — liquid-crystal panels and semiconductor devices — Nissan Chemical established its position through material design that burrowed deep into the customer's process, and it strengthened its development structure with a reorganisation of research and development in 2001. In the year ended March 1993 it achieved a record recurring profit of $48.6M (¥5bn), and only five years after the petrochemical withdrawal the turn in its earnings structure showed up in the accounts. A management philosophy of competing on margin in niche, high-return fields rather than on rank by scale settled in as the corporate culture of Nissan Chemical.

2010–2023Global expansion, agrochemical acquisitions and a change of name

In its fourth decade after petrochemicals the company took the same method abroad — picking the crops, regions and process steps where its own chemistry tells, and buying in the products it had no time to discover — while shedding what remained of its basic-chemicals past. Sales moved from $1.7B (¥149bn) in 2010 to $1.6B (¥228bn) in 2023, and in 2018 the company dropped 'Industries' from its name to say out loud what it had already become.

Building the agrochemical portfolio on both in-house discovery and outside purchase

Nissan Chemical pushed its agrochemical business overseas, chiefly across Asia, opening local subsidiaries in succession — South Korea in 2001, Taiwan in 2010, Shanghai in 2014 and Suzhou in 2017. Its agrochemicals, armed with the qualities cultivated in the Japanese market — high activity, low dose rates and reduced environmental burden — answered the rising emphasis on quality in the farming of each Asian country, and the company put in place a sales structure rooted in each region. Economic growth across Asia raised the quality demanded of farm produce and drove a switch from cheap commodity agrochemicals to value-added products, and the characteristics of Nissan Chemical's products meshed with that change in demand. Rather than colliding head-on with the vast European and American companies in the global market, the policy of continuing to select and concentrate on the regions and crops where its own strengths tell was carried on inside the company as a management philosophy unchanged since the petrochemical withdrawal.

On the product side it reinforced its line-up from outside as well, acquiring a herbicide business from Nihon Monsanto in 2002, a fungicide business from Dow AgroSciences of the United States in 2010 and the quinoxyfen fungicide business from Corteva of the United States in 2019. Overseas acquisitions in agrochemicals were a means of widening the sales channels for the company's own discoveries, and at the same time a way of instantly reinforcing the product portfolio in fields where in-house development would take time. The strategy of assembling a group of products specialised in niche crops and uses, and securing a high margin from markets limited in size, has been maintained for decades after the petrochemical withdrawal and is settled as the basic principle that characterises the company's business structure.

Tidying up basic chemicals, and updating the company’s definition of itself

In 2018 Nissan Chemical changed its trading name from Nissan Chemical Industries to Nissan Chemical, declaring within and without a break from the old image of an industrial company that it had worn for much of the postwar era. Dropping the word 'Industries' from the name was not an adjustment of tone but the work of putting into words, and so updating, the company's self-understanding itself — from its former definition as a maker of basic chemicals to a fine chemicals maker pursuing margin across three pillars of functional materials, agrochemicals and pharmaceuticals. In 2022 it halted melamine production, advancing the tidying-up of the basic chemicals businesses that remained after the petrochemical withdrawal, and in 2023 it acquired Nippon Phosphoric Acid Co., Ltd. to reinforce the raw-material base of the fertiliser business. It had reached back into its founding business, fertiliser, at the upstream end of the raw materials — a move that advanced a return to the founding business and a redefinition of it at the same time.

In the results for the year ended March 2024, operating profit of $318.2M (¥48bn) on sales of $1.5B (¥227bn) gave an operating margin of about 21 per cent, a level high for a Japanese chemical maker. Thirty-six years on from the 1988 decision to withdraw from petrochemicals, it was a set of accounts in which President Nakai's choice of margin over scale showed through in the numbers. The structure that makes research and development capability the source of competitiveness across three fields — agrochemicals, functional materials and pharmaceuticals — hardened over more than a quarter of a century from the withdrawal decision, and was handed on to successive managements as a consistent philosophy. Investors rate the company highly from the standpoint of capital efficiency as well, and it has established itself as a leading example of a high-margin company in the Japanese chemical industry. A structure in which the two segments of functional materials and agrochemicals form the pillars of profit was the visible shape of the company's strategy of the niche and the highly functional.

Read the full history in Japanese →

Notes

  1. Nissan Chemical, annual securities report (corporate history section); 日産化学工業百年史 (One Hundred Years of Nissan Chemical Industries)↩
  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. Nissan Chemical, annual securities report (corporate history section); 日産化学工業百年史 (One Hundred Years of Nissan Chemical Industries)↩
  7. 企業の歴史 : 明治百年 (Corporate Histories: A Century of Meiji), Keizai Shunju-sha, 1968↩
  8. 企業の歴史 : 明治百年 (Corporate Histories: A Century of Meiji), Keizai Shunju-sha, 1968↩
  9. Nissan Chemical, annual securities report (corporate history section); 日産化学工業百年史 (One Hundred Years of Nissan Chemical Industries)↩
  10. 企業の歴史 : 明治百年 (Corporate Histories: A Century of Meiji), Keizai Shunju-sha, 1968↩
  11. Nissan Chemical, annual securities report (corporate history section); 日産化学工業百年史 (One Hundred Years of Nissan Chemical Industries)↩
  12. 企業の歴史 : 明治百年 (Corporate Histories: A Century of Meiji), Keizai Shunju-sha, 1968↩
  13. 企業の歴史 : 明治百年 (Corporate Histories: A Century of Meiji), Keizai Shunju-sha, 1968↩
  14. 企業の歴史 : 明治百年 (Corporate Histories: A Century of Meiji), Keizai Shunju-sha, 1968↩
  15. 日本会社史総覧 (A Conspectus of Japanese Company Histories), 1995↩

References & sources

  1. Corporate Histories: A Century of Meiji, Keizai Shunju-sha (1968), the Nissan Chemical entry.
  2. A Conspectus of Japanese Company Histories (1995).

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