Company history

Air Water’s oldest root is Hokkai Sanso — Hokkai Oxygen — incorporated in September 1929 at Kikusui in Shiroishi, Sapporo, with capital of ¥150,000. Hokkaido’s iron works, shipyards and building sites were then having their oxygen shipped in from Honshu, and the gap in local supply was the whole of the opportunity. Taking oxygen out of the air and delivering it to sites nearby was the entire business plan, and a single-site company built on that plan carried through the war years and the occupation.

What it added after the war was less product than reach. Dissolved acetylene from December 1952 and LP gas from December 1955 gave the company three lines that moved on the same trucks, and it spent the years before the high-growth boom laying filling stations and delivery routes across the island. In a remote market the national producers could not serve economically, owning the logistics was what secured the demand — an early habit of taking a whole territory rather than a single product line.

The company listed in 1961 and renamed itself Hokusan in August 1966, by which point “oxygen works” no longer described it. It pushed downstream into medical gases, refrigeration equipment and cold storage for farm produce, and upstream into purity — liquefied carbon dioxide from 1971, then the ultra-high-purity nitrogen, hydrogen and argon that the semiconductor industry began demanding in the 1980s. A listing on the First Section of the Tokyo Stock Exchange in September 1979 gave a fifty-year-old regional supplier national standing and a way to raise capital.

In April 1993 Hokusan merged with Daido Oxygen of Osaka and took the name Daido Hoxan. Daido had been incorporated in March 1933, with capital of ¥300,000, to close a shortage of oxygen in the Osaka region: it began at Tsumori in Nishinari with a single Messer air-separation unit rated at sixty cubic metres an hour, added a dissolved-acetylene plant in 1953, and started liquid oxygen, liquid nitrogen and argon at Sakai in 1954 on Linde equipment. Two prewar regional gas makers at opposite ends of the country now shared one balance sheet, with plants and distribution in both.

The merger was a template rather than an endpoint. Industrial gas is a stock business — long contracts, on-site plants, cylinders that keep coming back — and the merged group used that steady cash to move into medical gases, fine chemicals, food and engineering while specialty-gas demand from semiconductors and displays pulled the core along. Before the decade was out, it was looking for the next partner.

In April 2000 Daido Hoxan merged as equals with Kyodo Oxygen — a Kansai and Chubu supplier established in 1962 around Sumitomo Corporation and Kobe Steel — and renamed itself Air Water. Three regional oxygen makers had become one national company with poles in Hokkaido, Kansai, Chubu and Kanto, second in Japanese industrial gas only to Nippon Sanso. The name stated the strategy plainly: air for the gases separated out of it, water for the consumer-facing businesses the company meant to build alongside them.

What followed was two decades of acquisition. Air Water assembled medical (home oxygen therapy, hospital gas supply, devices), agriculture and food, chemicals, energy and cold-chain logistics into a six-segment group, and it chose targets by a consistent test — locally entrenched, close to a natural monopoly within their own area, and generating cash as dependably as a gas contract. More than a hundred companies came in on that test, and consolidated revenue rose from about $1.8B (¥190bn) in the year to March 2000 to roughly $7.5B (¥800bn) twenty years later.

From 2010 the same method went abroad: industrial gas in Vietnam, Taiwan, China and Indonesia, an Australian gas business in 2014, a US medical gas operation in 2018. At home the medical arm took the leading domestic share in home oxygen concentrators and ranked second in hospital gas supply. By the group’s ninetieth year it employed more than 18,000 people, and the businesses bought around the core were contributing as much to the result as the gas itself.

COVID pulled the portfolio in two directions — medical and packaged food gained while industrial gas slowed with the run rates of steel, autos and chemical plants — and the company answered by narrowing. The NEXUS 2024 plan, set in April 2021, aimed at ¥1 trillion of revenue and concentration on three cores: industrial gas, medical, and agriculture and food. The year to March 2024 delivered $6.8B (¥1.02tn) of revenue and $450.8M (¥68bn) of operating profit, and the year to March 2025 was a third consecutive record; a successor plan, Vision2030, targets ¥1.4 trillion of revenue and an ROE above 13% by March 2030.

The organization was rebuilt to match. Toyoda Kikuo, chairman and CEO from June 2019, judged that when the parent allocated the people and the money, the managers of acquired companies lost their sense of ownership and the profit went with it. In April 2022 six in-house companies and two divisions became four business groups and twelve business units, each unit head also serving as president of the operating company beneath it — accountability pushed out of the parent’s committees and onto the people who had sold their businesses into the group. Industrial gas itself was carved out in April 2024 as Air Water Gas Solutions.

Then the other side of the same disposition appeared. In 2026 the company disclosed improper accounting across the group, followed by an embezzlement at a subsidiary; the annual securities report was postponed, the exchange designated the stock a security on alert (特別注意銘柄), and a president was brought in from outside. Within months an activist vehicle out of the old Murakami stable and Oasis had each taken more than five percent, pressing for higher dividends and buybacks from a company that could not yet publish its accounts. Buying stable regional cash flows and driving them hard to budget had built the group; the same speed and the same insistence left too little capacity to ask whether the numbers coming back up were real.