Selling Tsumura Life Science: leaving household products (2008)

The part that went on being a bath-additive company

The line of the withdrawal was drawn not by product category but by sales channel. What Tsumura let go was the household-products business, which competes for mass-retail shelf space on advertising spend — not bath additives as such. Bath Herb, formulated with crude-drug extracts, is still a Tsumura product, and it is helping lift healthcare-product sales of $41.4M (¥6bn) in the year to March 2025. Two things you put in the same bathtub, and the one whose selling point is an explanation of its herbs stayed while the one sold on fragrance and promotional volume went out. Look at what remained and the company’s criterion for sorting is easy to read.

On price, the sale worked out generously for the buyer. The company that went for $44.5M (¥5bn) passed to its next owner a little over three years later for $188M (¥15bn), revalued as the leading bath-additive business. From Tsumura’s side, however, there was no route that kept household products and still funded plant investment in prescription kampo and raw-material procurement in China. After some seventy years in which Bathclin, launched in 1930, paid the bills for herbal research, the direction of the cash flow reversed: kampo now funds its own growth.