Merging Nippon Bakelite with Sumitomo Chemical Kogyozai (1955)

What it meant for a pioneer to be folded into a keiretsu

To read this merger as a combination of equals is to be some distance from the facts. Nippon Bakelite was the pioneer of domestically made phenolic resin, but by the post-war years it already sat under Sumitomo Chemical, and its partner, Sumitomo Chemical Kogyozai, traced its own origin to the synthetic-resin works the two had set up together. This is better seen as a consolidation inside the group: Sumitomo Chemical, holding the feedstock and the basic chemistry, reorganizing the downstream moulding and fabrication into a single company. It was a merger that could be done precisely because the two shared a parent and were joined by capital and by raw materials.

That said, one can only say the move into the keiretsu determined the company’s character because we know what came after. The phenolic resin that was its mainstay at the time of the merger was a general-purpose electrical insulator, its price pushed around by the market, and hard to differentiate as a material. Even so, the company had already chosen — as with the melamine laminate Decora — to load value onto the use and the fabrication. The frame of earning from what a material is for, rather than from selling it by volume, was set at the moment of this group consolidation, and can be read straight through to the semiconductor encapsulant of later decades.