Nippon Shokubai - Company History

Updated: Author:

Financial history 1951–2026 — revenue, cost structure, balance sheet, cash flow and key ratios, year by year →

Founded 1941
Founder Hachiya Taizo (八谷泰造) · Osame Gohei (納五平)
Founding location 大阪府吹田市
Core business at founding Phthalic anhydride made with a domestically developed catalyst
Listed 1952
President Noda Kazuhiro President since 2022 (age 63, as of 2026)
Current priority Shareholder returns · Capital efficiency Cutting cross-shareholdings and buying back its own shares
Founding
In August 1941 Hachiya Taizo and Osame Gohei established Osame Gosei Kagaku Kogyo in the city of Osaka with capital of ¥180,000. The purpose was to make phthalic anhydride, until then dependent on imports, with a catalyst produced in Japan. In March 1944 the plant at the Suita works, only just started up, exploded and men were killed, but Hachiya Taizo chose rebuilding over withdrawal and stayed in a market that every rival left. In June 1945 the head office works was lost to war damage and the head office moved to Suita, and in April 1949 the company was renamed Nippon Shokubai Kagaku Kogyo. It listed on the Osaka Stock Exchange in May 1952, and in June 1991 took its present name, Nippon Shokubai.
The Decision
The company brought in-house the feedstock its catalysts could make, and then came downstream to the products that use that feedstock. In June 1959 it committed $2.7M (¥980m) — more than twice its paid-in capital of $1.3M (¥480m) — to join the Kawasaki complex of Nippon Petrochemicals, and began producing ethylene oxide. In May 1970 it achieved the domestic production of acrylic acid at the Himeji Works, and in November 1983 it moved to volume production of superabsorbent polymer there. The vapour-phase oxidation catalyst technology honed on phthalic anhydride carried across to acrylic acid, and that acrylic acid became the raw material for the resin used in disposable nappies. Holding everything from feedstock to finished product inside one company is what gave a late entrant a cost position better than the first mover's.
Today
Where the capital it earns goes has switched from expanding superabsorbent polymer capacity to returning money to shareholders. In the year to March 2026 revenue was $2.5B (¥400bn) and operating profit $110.6M (¥18bn), with Materials accounting for $1.8B (¥279bn) of sales and $64.5M (¥10bn) of profit, and Solutions for $765.7M (¥121bn) and $41.1M (¥7bn). Materials, which carries seven-tenths of sales, returns a margin of only 3.7 per cent. At the Himeji Works, where the mainstay superabsorbent polymer is made, an acrylic acid tank exploded in September 2012, and the company has spent money ever since on rebuilding its safety management. Under the Mid-term Management Plan 2027 announced in April 2025 it will cut its cross-shareholdings to half their book value and put the roughly $133.6M (¥20bn) of proceeds into buying back its own shares.
Competition
It agreed to merge with the rival it had overtaken in superabsorbent polymer, and then that merger was called off. Entering the market late, in 1985, Nippon Shokubai passed the first mover Sanyo Chemical Industries within a year and took first place in the world. In May 2019 the two announced that they would merge, but during the preparation period the European business deteriorated under COVID-19, and three downward revisions to earnings broke the agreement on the exchange ratio that a merger of equals had rested on, so the merger was abandoned. On the feedstock side, in March 2002 it took over the acrylic acid business of Sumitomo Chemical and handed over its methyl methacrylate monomer business in exchange. Unlike Sanyo Chemical Industries, which came into the market from surfactants, Nippon Shokubai holds its own feedstock, and that difference set apart how the two build the cost of superabsorbent polymer.

Timeline

1935–1960Surviving the explosion: the profits of the last firm standing in phthalic anhydride

  1. 1941Osame Gosei Kagaku Kogyo established
  2. 1945Head office lost to an air raid; operations move to the Suita plant
  3. 1949Renamed Nippon Shokubai Kagaku Kogyo
  4. 1952Shares listed on the first section of the Osaka Stock Exchange
  5. 1952Production of maleic anhydride begins
  6. 1952Falls into a half-year loss; Fuji Iron & Steel steps in with capital
  7. 1959Volume production of ethylene oxide begins
  8. 1960New plant built at Himeji

1961–1981Into petrochemicals: acrylic acid made at home and an integrated feedstock chain

  1. 1961Head office moves to Koraibashi; a research laboratory opens at Suita
  2. 1967Second Kawasaki plant built
  3. 1970Production of acrylic acid begins
  4. 1970Oppama plant built (idled in 1978)
  5. 1972Production of secondary alcohol ethoxylate begins
  6. 1981Himeji and Kawasaki research laboratories established

1982–2026From late entrant to world leader in SAP — and a merger called off

  1. 1982Production of methacrylic acid and its esters begins
  2. 1983Production of superabsorbent polymer (SAP) begins at the Himeji Works
  3. 1985Volume production of SAP begins
  4. 1988NA Industries Inc. established in the United States
  5. 1991Company renamed Nippon Shokubai
  6. 1999Subsidiary established in Belgium
  7. 2002Acrylic acid business acquired in a business swap with Sumitomo Chemical
  8. 2004Two Singaporean acrylic acid makers acquired
  9. 2008Nippon Nyukazai and 中日合成化學 of Taiwan acquired
  10. 2012Explosion at the Himeji Works
  11. 2015Decision taken to expand superabsorbent polymer capacity
  12. 2019Merger with Sanyo Chemical announced (later withdrawn)
  13. 2021Falls to a net loss of $98.4M (¥11bn)
  14. 2022Moves to the Prime Market of the Tokyo Stock Exchange

Founding Story

1935–1960Surviving the explosion: the profits of the last firm standing in phthalic anhydride

Nippon Shokubai began as the research laboratory attached to a sulphuric-acid maker and became a company in its own right in August 1941, built around a single product — phthalic anhydride — made by a process that could explode, and did. The Suita plant blew apart in 1944 and men were killed, yet the company chose to rebuild rather than withdraw, and by 1956 it held 70 per cent of the domestic market because every rival that entered the business left it again; sales of $1.1M (¥379m) in 1951 had grown to $15.4M (¥6bn) by 1960.

Hachiya Taizo's persistence, and getting past the explosion at the Suita plant

Nippon Shokubai's predecessor, Osame Ryusan Kogyo (ヲサメ硫酸工業), was a company founded by Osame Gohei (納五平), known for his contact sulphuric-acid plant[1], and it worked on producing at home the sulphuric-acid catalysts Japan was then importing. Hachiya Taizo (八谷泰造), who headed its attached research laboratory, began manufacturing acid-resistant cement in 1937 on the back of his work on vanadium catalysts, and at the same time started research into phthalic anhydride[2]. Industrialising catalyst chemistry at that time normally meant relying on foreign technology, and any attempt to reach volume production with a domestically developed catalyst ran alongside the risk of an accident. Phthalic anhydride, used in paints and plasticisers, was imported, and Hachiya reckoned that the market open to a domestic substitute would be large. He worked out the route to commercialising phthalic anhydride by the air oxidation of naphthalene, and in August 1941 the business was spun out as Osame Gosei Kagaku Kogyo Co., Ltd. with capital of ¥180,000[3]. The founding itself lay on the extension of research into domestic catalysts.

In 1943 Osame Gosei Kagaku Kogyo raised its capital to ¥600,000, bought land at Suita and began building a phthalic anhydride plant with a monthly capacity of 100 tonnes[4]. Then, in March 1944, only shortly after it started up, the plant was torn apart by a large explosion that scattered the equipment and killed workers[5]. The factory burned down in the war as well, but Hachiya argued for rebuilding, and it was decided that the business would go on. In June 1945 an air raid destroyed the head office in the city of Osaka, and the company moved to the Suita plant. In 1949, when the founder Osame stepped down, Hachiya took over as president and the company was renamed Nippon Shokubai Kagaku Kogyo[6]. During the 1950s Mitsui Chemicals, Daicel and Asahi Kasei all entered phthalic anhydride, and one after another they withdrew because of the explosion risk; by 1956 Nippon Shokubai held 70 per cent of the domestic market[7]. Having had its accident first, and having accumulated the process know-how that came with it — control of the quantity of raw material charged, cooling of the reactor, relief valves — it ended up, in the event, with the profits that go to the last firm standing.

Into the red, and a rescue by Nagano, president of Fuji Iron & Steel

In 1952 a recession shrank the market for PVC, and Nippon Shokubai — which relied on phthalic anhydride for 90 per cent of its sales — fell into a net loss for the half year. The losses exceeded its paid-in capital, and it was driven into a position where bank borrowing was no longer available either. Fuji Iron & Steel, which supplied the naphthalene from which phthalic anhydride is made, was also its largest shareholder, so Hachiya went to negotiate directly with president Nagano Shigeo (永野重雄), and a third-party allotment of new shares was carried out with naphthalene contributed in kind. The capital increase had once been voted down inside Fuji Iron & Steel, and it was Nagano's own judgement that overturned that. The relationship with Fuji Iron & Steel — supplier and shareholder at the same time — kept alive a small company that had lost the ordinary means of raising money through bank borrowing.

Once the downturn had run its course and the PVC market turned back to expansion, the company's position as domestic leader became secure. Monthly capacity for phthalic anhydride expanded sharply from 30 tonnes in 1949 to 250 tonnes by 1951[8], and in 1953 the company also succeeded in commercialising polyester resin in Japan[9], so that the move away from a single product began. Hachiya held to the belief that a company is a public instrument, avoided family control, and set out a capital policy of taking in shareholders widely; the rescue in capital terms by Fuji Iron & Steel lay on the extension of that policy. Having come through two crises — overcoming the explosion, and being rescued in capital terms — the structural risks the company had carried since its founding, dependence on a single product and a fragile capital base, were corrected. The share flotation of 1952 also gave it the means to raise money in the capital market, and set up a route to expanding the business that did not rest on bank borrowing. Nearly twenty years after it was established, Nippon Shokubai had obtained the foundation on which to escape dependence on a single business.

1961–1981Into petrochemicals: acrylic acid made at home and an integrated feedstock chain

The move that settled the next half-century was made in June 1959, when Hachiya committed $2.7M (¥980m) — more than twice the company's paid-in capital — to an ethylene oxide plant inside a petrochemical complex he did not own. Out of that feedstock came the domestic production of acrylic acid in 1970, and with it the chain running from catalyst to monomer that the company would later carry through into superabsorbent polymer.

Stepping into capital spending worth more than twice the company's capital

In June 1959 Nippon Shokubai joined the Kawasaki complex of Nippon Petrochemicals and built a new ethylene oxide plant. The investment came to $2.7M (¥980m), more than twice the $1.3M (¥480m) of paid-in capital the company then had. It was Hachiya's judgement that the only way out of dependence on the single product phthalic anhydride was to secure petrochemical feedstock of its own. People in the industry jeered that the company would go under, but in 1960 it built a new plant at Himeji and established a two-site structure spanning Kawasaki and Himeji. A second Kawasaki plant came on stream in 1967. During the period when feedstock was shifting from coal chemistry to petrochemistry, the decision to place itself deliberately on the petrochemical side was what later supplied the raw materials for acrylic acid and SAP. The structural change that began here took the company from an era resting on phthalic anhydride alone to one in which ethylene oxide, a petrochemical derivative, was built into the axis of its own earnings.

In an age when importing foreign technology was the norm, Hachiya insisted on technology developed at home, and in 1951 achieved the world's first industrialisation of phthalic anhydride from a petrochemical feedstock. Against the voices around him saying the business should be kept within the bounds of its means, capital spending on a scale beyond the company's size lifted it to a new stage of growth. Sales expanded on the synthetic-fibre boom of the 1960s, and the two axes of Kawasaki and Himeji became the foundation of the main businesses of the era to come. Himeji was built around phthalic anhydride and ethylene oxide derivatives, Kawasaki became the supply site for ethylene oxide and its downstream products, and a structure took shape in which the two sites, east and west, complemented one another in feedstock and product. The insistence on domestically developed catalyst technology and capital spending on a scale beyond its own capital were the two levers, now both in Nippon Shokubai's hands, for escaping the product dependence of its founding years.

The serious challenge of producing acrylic acid in Japan

In 1970 Nippon Shokubai applied its vapour-phase oxidation technology and succeeded in producing acrylic acid in Japan. Acrylic acid was in demand as a raw material for paints and inks, and would later become indispensable as the raw material for superabsorbent polymer. Most domestic manufacturers of the day procured acrylic acid by bringing in foreign technology, but Nippon Shokubai chose the route of applying, directly to the synthesis of acrylic acid, the vanadium catalysts and the vapour-phase oxidation it had refined on phthalic anhydride. The judgement to raise its own oxidation catalysts rather than depend on foreign technology took effect in the disposable-nappy market almost twenty years later. Being the only company in Japan with integrated production running from acrylic acid through to SAP became the source of its structural advantage in the SAP business.

In March 1981 the company set up the Himeji Research Laboratory and the Kawasaki Research Laboratory, strengthening its research and development structure. In this period Nippon Shokubai switched its main product from phthalic anhydride to acrylic acid, and settled on a strategy of widening the product line-up on the common foundation of catalyst technology. The experience of raising vanadium catalysts across several oxidation reactions, phthalic anhydride among them, was transferred directly to the process of making acrylic acid by vapour-phase oxidation. The entry into petrochemicals and the insistence on domestic technology together formed the technical basis of the feedstock advantage in the SAP business of the next era. The shape of the company's earnings had changed, from the dependence on phthalic anhydride of its founding years to a structure resting on the two sites of Kawasaki and Himeji and on ethylene oxide and acrylic acid.

1982–2026From late entrant to world leader in SAP — and a merger called off

Nippon Shokubai entered superabsorbent polymer seven years behind Sanyo Chemical and led domestic output within a year of starting, because it made its own acrylic acid and because P&G, the largest maker of disposable nappies in the world, became its customer. The very narrowness that carried it to the top of that market — one chain, one product, one buyer — is what an over-built European plant, a collapsed merger with the rival it had overtaken and a net loss of $98.4M (¥11bn) in the year to March 2021 all landed on.

Overtaking the leader in SAP within a year of a late entry

In 1983 the company began trial production of superabsorbent polymer (SAP) at the Himeji Works, and moved to volume production in 1985. It was a late entry, seven years behind Sanyo Chemical, but integrated production from acrylic acid through to SAP, together with winning P&G — the largest maker of disposable nappies in the world — as a customer, put it at the top of domestic output within a year of entering. As of the 1986 financial year, output was 20,000 tonnes at Nippon Shokubai against 15,000 tonnes at Sanyo Chemical. Late as it was, the structural advantage of making its own raw material outweighed everything the first mover had accumulated. Sanyo Chemical, ahead of it, procured acrylic acid from outside, and so carried the weakness of being unable to absorb swings in raw-material prices or constraints on supply within its own walls. The structure of last-firm-standing profit built on phthalic anhydride was reproduced, with a different product, in the new market of SAP.

Director Jono Hisayoshi (城野久義) put the shape of the position P&G had taken in Europe and America plainly at the time: ride the winning horse and sales necessarily grow[10]. Being able to make its own raw material gave it the advantage over competitors dependent on outside procurement in both cost competitiveness and security of supply. Fifteen years after the 1970 judgement to produce acrylic acid in Japan, the meaning of that investment became visible in the wholly different market of disposable nappies. The two choices made to escape dependence on a single product in the founding years — domestic catalysts and entry into petrochemicals — produced the same structure of last-firm-standing profit and integrated feedstock advantage across two generations of core business, phthalic anhydride and SAP. In 1982 the Himeji Works also began producing methacrylic acid and its esters, widening the family of products adjacent to the acrylics.

Export dependence on P&G and the spread of the overseas site network

In 1988 the company established NA Industries Inc. in the United States and moved into producing SAP overseas. As P&G's global disposable-nappy business expanded, Nippon Shokubai's SAP exports came to account for 80 per cent of sales. A local subsidiary was set up in Indonesia in 1996 as the main production site for South-East Asia, followed by Singapore in 1998 and Belgium in 1999, giving it a supply structure across the three poles of the United States, Europe and Asia. In 1991 the company changed its name from Nippon Shokubai Kagaku Kogyo to Nippon Shokubai Co., Ltd., setting out a policy of widening its field of business beyond the frame of the chemical industry. The structure of placing its own production sites around the world to match the global expansion of its largest customer took firm shape in this period.

In 2002 it exchanged businesses with Sumitomo Chemical, handing over methyl methacrylate and taking the acrylic acid business in return. In 2004 it added two Singaporean acrylic acid makers, and in 2008 Nippon Nyukazai (日本乳化剤) and the Taiwanese producer 中日合成化學, as consolidated subsidiaries, widening its production base for acrylic acid and surfactants at home and abroad. The long-range plan set out in 2001 defined acrylic acid and SAP as core businesses and committed to aggressive investment in order to meet its supply obligations to P&G, while resin businesses such as unsaturated polyester were made subjects of restructuring. Concentration on the core businesses and increased overseas capacity deepened the dependence on the largest customer further still.

The collapsed merger, and the limits of integrated production laid bare

In 2015 the company decided to invest $376M (¥46bn) through its Belgian subsidiary NSE to build new SAP and acrylic acid plants in Europe. But pressure to cut prices from its largest customer, P&G, lowered the profitability of SAP, and NSE fell into chronic losses. In 2017 Nippon Shokubai launched what it called the Survival PJ, committing over the four years to the 2020 financial year $802.4M (¥90bn) of capital expenditure, $535M (¥60bn) of strategic investment and $508.2M (¥57bn) of research and development spending, with the aim of restoring the earning power of the SAP business and creating new businesses. The structural advantage of integrated in-house production from acrylic acid through to SAP was inseparable from the dependence that came with entrusting the bulk of SAP exports to a single company, P&G, and the judgement to increase capacity in Europe made that tilt stronger still.

In 2019 Nippon Shokubai announced a merger with Sanyo Chemical Industries, then abandoned it in 2020 in the face of the swing in earnings during the preparation period. Reorganisation with the very rival whose share it had overturned as a late entrant did not come together amid the deteriorating profitability of the SAP market. In the year to March 2021 it fell to a net loss of $98.4M (¥11bn), as an impairment of $108.4M (¥12bn) on the plant of its European subsidiary NSE was compounded by an impairment of $83.8M (¥9bn) on SIRRUS Inc. of the United States, acquired in 2017. Two judgements — the European capacity investment and the acquisition of a venture aimed at new businesses — went wrong at the same time. Having built last-firm-standing profit in phthalic anhydride and in SAP even while living through explosions at the Suita plant in 1944 and at the Himeji Works in 2012, Nippon Shokubai now faces a new structural problem: dependence on its largest customer, and the price of concentration on its core business.

Read the full history in Japanese →

Notes

  1. 企業の歴史 : 明治百年 (Corporate Histories: A Century of Meiji), Keizai Shunju-sha, 1968↩
  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. 企業の歴史 : 明治百年 (Corporate Histories: A Century of Meiji), Keizai Shunju-sha, 1968↩
  7. 経済知識 (Keizai Chishiki), May 1956: "A typical growth company — the course of development of Shokubai Kagaku and what lies ahead"↩
  8. 企業の歴史 : 明治百年 (Corporate Histories: A Century of Meiji), Keizai Shunju-sha, 1968↩
  9. 企業の歴史 : 明治百年 (Corporate Histories: A Century of Meiji), Keizai Shunju-sha, 1968↩
  10. 日経産業新聞 (Nikkei Sangyo Shimbun), 31 October 1995↩

References & sources

  1. Osaka Keizai Hyoron, May 1951, on the rise of phthalic anhydride.
  2. Keizai Chishiki, May 1956, on the course of growth of Shokubai Kagaku.
  3. Corporate Histories: A Century of Meiji, Keizai Shunju-sha (1968), the Nippon Shokubai entry.
  4. Securities Analysts Journal, July 1968, on Hachiya Taizo.
  5. Shukan Toyo Keizai (Toyo Keizai Inc.), 10 June 1972, on Nippon Shokubai Kagaku and its technology-led expansion.

Yen amounts are converted at the average rate of each figure’s own year — not today’s rate; revenue charts are shown in yen. Exchange rates & sources — the full ¥/US$ table →

Data API

Nippon Shokubai’s history, presidents and financials are published as static JSON — no key, plain GET. One API per public page, and one per section where a page carries several tables. Full specification →

/api/4114/company.json ·/api/4114/history.json ·/api/4114/ceo.json ·/api/4114/financials.json ·/api/4114/financials/segment.json ·/api/4114/financials/pl.json ·/api/4114/financials/cf.json ·/api/4114/financials/bs.json ·/api/4114/financials/employee.json ·/api/4114/financials/stock.json ·/api/4114/financials.csv ·/api/4114/financials_history.csv

/api/companies.json ·/api/decisions.json ·/api/api-manifest.json