Company history

Japan’s carbide industry begins with one scientist. Fujiyama Tsuneichi built the country’s first carbide works at Sankyozawa outside Sendai in 1902, and in 1912 started another at Tomakomai in Hokkaido, producing carbide in 1913 and calcium cyanamide in 1914. Then the First World War cut off European fertiliser imports, domestic production became a matter of state policy, and Mitsui — looking for a way into chemicals — found a plant that already had limestone and power beside it. In May 1915 twenty-one Mitsui men including Makita Tamaki put up ¥5 million to take over Fujiyama’s works as Denki Kagaku Kogyo (Electro-Chemical Industry), named for the fact that carbide is made by electricity.

Carbide consumes power, limestone and carbon in bulk, so the plants had to sit on top of the resources. Works followed at Fushun in Manchuria and Omuta in Kyushu (1916) for coke, and at Omi in Niigata (1921) for high-purity limestone, with six company-owned hydroelectric stations built for Omi between 1921 and 1930. Owning the electricity and standing on the limestone was the answer to an industry that burns 3,000 kWh per tonne of product — and Omi would become the parent site of everything that came later. Prewar the company also helped establish carbide ventures in Manchuria, Taiwan, Shandong and French Indochina; defeat erased nearly all of it, and even a hydro station requisitioned during the war was never returned.

Postwar food shortages made calcium cyanamide urgent again, and with sales controls lifted in 1950 the company paid a 40% dividend in two consecutive half-years — the first such rate in its history — which gave it the means to move. PVC production started at Shibukawa in 1951 and a cement subsidiary was set up in 1953 to sell Omi’s output across the Hokuriku region. By the mid-1950s the pattern that would define Denka was set: one intermediate feeding several co-products, each branch justifying the next.

In 1962 the company did two things at once. At Tomi, beside the Omi works, it became the first in Japan — and the third in the world, after DuPont and Bayer — to commercialise chloroprene rubber, a process few would attempt because an easily explosive by-product forms mid-reaction. The same year it founded Denka Petrochemical and joined the Maruzen complex, adding naphtha-based chemistry alongside its carbide chemistry. Rising purchased-power prices made petrochemicals necessary; the Omi chain was too valuable to abandon. Running both raw-material systems in parallel defined the company from then on.

Diversification continued outward. A monochloroacetic acid joint venture with Akzo came in 1976; acetylene black production in Singapore in 1980 and fused silica there in 1989 took manufacturing overseas. In 1979 it bought a small pharmaceutical subsidiary from Tokyo Shibaura Electric, renamed Denka Seiken in 1982 — at the time one minor acquisition among many, and nothing like a core business. Thirty-six years later it would acquire 51% of Germany’s Icon Genetics and use that lineage to manufacture Delytact, Japan’s first oncolytic virus therapy. Much of Denka’s portfolio was arrived at this way: a branch grown for one reason turning out, decades later, to matter for another.

In December 2014 the company and Mitsui & Co. formed Denka Performance Elastomer in the United States, taking over DuPont’s chloroprene rubber business at LaPlace, Louisiana in October 2015. Half a century after breaking DuPont’s duopoly, Denka was buying the originator’s plant — and, with Omi, finally had two production sites for a business that had depended on one. The reasoning was sound and the risk was already visible: emissions of chloroprene monomer around LaPlace were the subject of continuing litigation, and the site would remain exposed to American environmental regulation.

In October 2015, a century after its founding, the company dropped the name Denki Kagaku Kogyo for Denka. The words “electro-chemical industry” no longer fitted a firm making spherical silica in Singapore and holding a Munich biotech; the rename ratified a shift that had already happened. That single year brought in Icon Genetics in August and DuPont’s chloroprene plant in October — biotechnology and American manufacturing, two businesses with nothing in common but the balance sheet that now carried both.

Then an outside shock did what strategy had not. When COVID-19 arrived, the diagnostics lineage that had run thinly since 1979 was pulled to the centre of the company: Denka Seiken was absorbed into the parent and put to mass-producing test kits. Healthcare became a stated pillar not because the core business had chosen it, but because a pandemic made it indispensable.

In November 2022 Denka announced Mission 2030, and with it reversed 110 years of logic. Any business that was not a “three-star” business — specialty, aligned with a megatrend, and sustainable — became a candidate for exit or sale. A minimum hurdle of 6% WACC was set as a KPI and ROIC calculated product by product; management said plainly that where no path to improvement could be drawn, the portfolio would be swapped out. For a company built by adding branches, institutionalising the withdrawal from anything earning below its cost of capital was new.

The first cut was cement, decided in October 2022 — and it took the whole Omi sorting system with it: limestone from Kurohime graded by purity, the fraction unsuited to carbide sent to the kilns, carbide and chloroprene by-products burned as fuel there. Then in 2023 the chloroprene business broke at both ends at once. Falling demand and rising costs at the American plant lifted unit fixed costs and forced an inventory write-down; the Noto Peninsula earthquake of January 2024 halted the Omi chloroprene plant, the very site that was supposed to be its alternative supply. The EPA issued strict new emission rules in April 2024.

The year to March 2025 closed with a net loss of ¥12.3 billion — the first since the war — against a dividend held at ¥100 and a payout ratio of 96%. In May 2025 the company suspended the American chloroprene plant after a ¥16.1 billion impairment, sending customers back to Omi and returning the business, after ten years, to the single site it had bought DPE to escape. Ishida Ikuo succeeded Imai Toshio as president in June 2024, so the people unwinding DPE are not the people who acquired it.