The Reichhold joint venture, and entry into synthetic resins (1952)

A decision visible in the proportions

A company with capital of ¥30 million decided to put ¥20 million of the ¥30 million it was raising into a joint venture that had not yet even been licensed. The leader in printing ink, holding some 14% of national output, was placing two-thirds of its new money in a business with not a yen of sales. So long as its raw materials remained natural oils and fats, it would never catch the United States — on that reading, formed by executive vice-president Kawamura Katsumi before he ever sailed for America, the company staked the bulk of its funds not on expanding its core but on this. It was precisely because its footing in ink was secure that it could put ink capacity second.

The venture itself came apart in ten years. Japan Reichhold Chemical Industries grew to capital of ¥500 million, and at the point where it needed a further ¥5 billion or more of investment the American side could no longer carry its share. The one who stepped back was not the party that had taken the leap but the partner that had brought the technology in. The absorption of 1962 was the consequence of the venture’s growth and, at the same time, the end of a framework — partnership with foreign capital — that could no longer keep pace with the business it had created. Dropping “Manufacturing” from the corporate name and adding “Chemicals” is the record of that settlement.