Acquiring Sun Chemical’s graphic arts division, and reaching first place in the world (1986)

The few percent that development could not close

US$550 million — $504.4M (¥85bn) in the money of the day — was more than four-fifths of an equity base of roughly $593.4M (¥100bn). The reason for committing it in a single stroke was that the few percent a year which new-product development was supposed to close was still there in the second half of a ten-year plan. A design to raise research spending to 6% of sales takes years to bear fruit, and those years did not mesh with a deadline of fiscal 1987. When President Kawamura rendered the Polychrome acquisition as “a saving of time,” he was speaking backwards from that deadline.

What ¥85 billion reached was the position of the world’s largest ink maker, not ¥1 trillion. That came ten years late, and with 55.3% of sales earned overseas — a different substance from a plan that was to have stacked up ¥850 billion at home. The practice of judging an acquisition by its people had been acquired at the price of the seven years lost at Cole & Marden, and at Sun Chemical it worked exactly as intended. The acquisitions carried in technology, markets and managers alike; the one thing they did not make up was the domestic growth rate.