Building the Chidori works and entering petrochemicals amid consecutive losses (1961)

Plants take a few years; the organization follows later

To read the entry into petrochemicals as the rescue from consecutive losses is to get the order of events wrong. Following the half-year results, the losses that ran for three terms from November 1956 turned positive in the term to May 1958, and by the November term of 1961, when the Chidori works was built, net profit had reached ¥351m — the peak of the recovery. The investment in Kawasaki, where the company already had a paint works, was not the hand that stopped the losses; it appears to have been played after they had stopped, in anticipation of the next stagnation.

That anticipation did not, however, break the dependence on oils. Even after the move into petrochemicals, net profit thinned from ¥182m in the November 1962 term to ¥31m in the November 1965 term, and the thinness of that profit against ¥10.9bn of sales was, in kind, no different from the years of losses. The shape of earnings changed only after the company was rebuilt into six self-accounting divisions. A plant can be built in a few years; the organization that turns it into profit has no choice but to catch up later.