Taiheiyo Cement: long-term performance & turning pointsSales (revenue) and profit-margin ratio
Sales (¥ bn)Net margin (%)
1881Three lineages, one industry
Revenue (¥ bn, bars) · net margin (%, line)
Source: securities reports
1873The state builds Japan’s first cement works at Fukagawa
1881Kasai Junpachi founds Onoda Cement with 38 former samurai
1883Asano Soichiro leases the government plant
1903Japan’s first rotary kiln installed at Fukagawa
1912Asano Cement incorporated
1923Chichibu Cement founded — the third lineage
1934Japan’s first low-heat cement
Cement in Japan began as a state project: in 1873 the Ministry of Finance built the country’s only works at Fukagawa in Tokyo, and everything else was imported. The break came in 1881 in Yamaguchi, where Kasai Junpachi, charged with promoting industry in the province, gathered thirty-eight former samurai stripped of their stipends by the Meiji settlement, raised capital against their government bonds, and put up a cement works at Onoda. It answered two problems at once — relief for a displaced class, and domestic supply — by integrating production around the limestone at nearby Mine. That is the oldest root of the present company.
The second root was the state plant itself. In 1883 Asano Soichiro leased Fukagawa, and the following year formed a partnership with Shibusawa Eiichi; output was eight bottle kilns and roughly 145 tonnes a year, sold into the building of the Imperial Palace and the port of Yokohama. Asano imported the first rotary kiln in Japan in 1903, incorporated as Asano Cement in 1912, and grew by absorbing rivals — Hokkaido Cement in 1915, Kizugawa in 1924 — past 1.7 million tonnes a year, while pushing into special grades: rapid-hardening cement in 1929, Japan’s first low-heat cement in 1934. A third lineage, Chichibu Cement, was founded in 1923.
From the mid-1930s Asano followed the army abroad — Manchuria in 1933, Korea in 1936, north China in 1938, south China in 1939 — and consolidated at home through four wartime mergers between 1939 and 1942, adding Itozaki, Amagasaki, Ofunato, Yatsushiro and Saiki to a national network. Defeat erased the overseas plants outright and left the domestic ones wrecked and starved of materials.
1973Oil shock: NSP kilns and a switch back to coal
1980Moji and Yatsushiro plants closed
1984Cement placed under the structural improvement law
1990Acquires California Portland Cement in the US
The occupation’s second deconcentration order severed the company from the family that had run it for sixty-three years. In May 1947 it left the Asano name behind and restarted as Nihon Cement. Korean War demand paid for new rotary kilns at Nishitama and Kamiiso, and the high-growth decades brought greenfield plants — Saitama in 1955, Kumagaya in 1962 — as concrete followed the country’s roads, dams and cities.
The 1973 oil shock hit an industry that burns fuel to make its product. Nihon Cement concentrated output at fewer sites, converted kilns to the SP and NSP designs and switched fuel back to coal; a second shock still forced the closure of the Moji and Yatsushiro works in 1980. By 1984 the problem was structural rather than cyclical, and cement was placed under the temporary law on industrial structural improvement: makers set up joint sales and logistics ventures and scrapped surplus kilns together.
What the law could not fix was the shape of the industry. Three lineages — Asano’s Nihon Cement, Onoda and Chichibu — still split the domestic market between them, each carrying capacity built for a demand curve that had stopped rising. In October 1990, with the yen strong and the domestic peak visibly near, Nihon Cement bought California Portland Cement: an ordinary-looking acquisition that would later become the company’s second home market.
1998Taiheiyo Cement formed — three lineages in one firm
2000Waste processing and eco-cement become a business
2009Net loss after the US housing collapse (repeated in FY2010)
2011Fukuda Shuji succeeds Tokue Keiji as president
The consolidation came in two steps. In October 1994 Onoda and Chichibu merged as Chichibu Onoda; in October 1998 Chichibu Onoda and Nihon Cement merged again to form Taiheiyo Cement. A hundred years of rivalry between the three lineages ended inside a single company, and Japan’s largest cement maker was created not to grow but to absorb the consequences of a market that had peaked — surplus kilns, chronic discounting, duplicated sales and logistics, three head offices.
Scale alone did not restore the domestic business, so the company changed what its kilns were for. From around 2000 it began taking in municipal and industrial waste as fuel and raw material, charging a processing fee for what it had previously treated merely as a cheap input, and commercialised eco-cement made from incinerator ash. Abroad, Nghi Son Cement in Vietnam (1995) and the inherited Californian operations gave it demand that Japan no longer supplied; by the year to March 2008 North America was the second-largest segment at ¥119.3bn against ¥723.5bn at home, and it earned better margins than domestic cement did.
That second market then proved to be the source of the deepest losses. The US housing collapse pushed the company to a net loss of $341.6M (¥35bn) in the year to March 2009 and $395.6M (¥37bn) the year after, with North America running an operating deficit. Two consecutive loss years established the pattern: the same overseas earnings that carried the group also amplified its swings. Fukuda Shuji replaced Tokue Keiji as president in June 2011 and cut costs and capital spending until profits returned.
2023Net loss of $252.7M (¥33bn); Denka’s cement business acquired
2024Taura Yoshifumi president; environmental business made a pillar
Domestic cement demand fell from 59.1 million tonnes in fiscal 2005 to 32.7 million in fiscal 2023 — roughly a halving in under two decades, driven by shrinking construction investment, a falling population, fewer public works and a labour shortage that cut the number of days sites could run. Taiheiyo held operating profit in the ¥60–70bn range from the mid-2010s, but only by pushing repeated price increases through the concrete and construction trades to cover falling volumes. Meanwhile it kept buying on the US West Coast — the Oro Grande plant in 2015, the Redding plant and ready-mixed assets in 2022 — until America stood alongside domestic cement as a profit centre.
Energy broke the arrangement. After Russia’s invasion of Ukraine, imported coal reached $340 a tonne C&F, and in the year to March 2023 the domestic cement segment ran an operating loss of ¥36.9bn; group operating profit fell to ¥4.4bn and the net loss reached $252.7M (¥33bn) — the first since the Lehman crisis thirteen years earlier. Prices caught up the following year and, helped by coal falling back towards $150, profit snapped to ¥56.5bn operating and ¥43.3bn net. The recovery owed more to the reversal of input costs than to any change in structure.
Taura Yoshifumi took over as president on 1 April 2024 and used the medium-term plan published that May to name the domestic answer explicitly: the environmental business. The kilns already destroy about 5.4 million tonnes of waste and by-products a year at 1,450°C, and the plan targets $682.9M (¥108bn) of sales and ¥13bn of operating profit from that work in fiscal 2026. After two decades of leaving profit to overseas markets, the company is trying to grow a different way of earning at home.
What it means to fold up a hundred years of rivalry
Imamura Kazusuke began imagining the industry’s consolidation in 1985, long before the bubble burst. Trying to get at least one company clear of chronic oversupply, he spent more than a decade engineering a two-stage merger — first with Chichibu Onoda, then with Nihon Cement. The founding of the new company in October 1998 was also a decision to end, inside a single firm, the contest for first place that the Nihon Cement and Onoda lineages had waged since the Meiji era. The banks were barely involved: it proceeded on an agreement between chief executives from different corporate groups.
The merger did not, however, end the competition. The new company sank to a ¥18.7bn loss in its first year, and price competition at the retail end did not subside. Even having bound the domestic industry together, Taiheiyo Cement had little choice but to strike outward through acquisitions such as Ssangyong and Grand Cement, and the contest with the giant capital of Europe and America was only beginning. Bringing three lineages into one can be read as a settlement at home and, at the same time, the doorway through which the competition moved from Japan to the world.
The 1,450°C kiln had stood in the same place since before the merger. What changed was not the equipment but what the material fed into it was called. A company that had seen coal ash and blast-furnace slag as by-products useful for cutting costs moved to the other side of the transaction — collecting a processing fee from those who brought waste in — and answered Chiba Prefecture’s request with ¥10bn of investment. When president Kimura Michio said that, to put it at its most extreme, cement was the by-product, he was, it seems, deliberately discarding the company’s own definition of itself as a maker that sells a product.
This did not, however, repair the domestic business. Eco-cement costs 50% more to produce than ordinary cement and stands up only because it extends the life of the final disposal sites of the Tama district — a public benefit. The processing-fee income that cut manufacturing costs at the Saitama and Kumagaya plants by roughly ¥1,000 a tonne is likewise a business that depends on a counterparty. What this venture supported was the profitability of a shrinking domestic cement business; it did not win back demand itself. Changing how the company earns and changing where it earns would each be needed separately, later.
Five loss-making years, and the cheques got bigger
From 2009 to 2013, CalPortland posted operating losses five years running. The core of this decision lies in not folding a business whose operating margin reached minus 20%, and then raising the sums committed to it afterwards — $420 million, $250 million, $712 million. By the time president Fukuda Shuji said in 2017 that the company could not be run on domestic demand alone, the United States was evidently no longer a candidate for withdrawal but was being treated as the pillar to put in place of domestic cement.
That is not to say America is guaranteed to be a safe place to earn. Cement volumes fell to 6.12 million tonnes in 2024, are forecast at 5.92 million in 2025, and operating profit is expected to drop to $182 million. If high interest rates chill housing demand, the US is a market where volumes fall just as they do at home. The ready-mixed concrete and aggregates bought alongside are also a device for securing an internal destination for the company’s own cement when demand thins — and the test of how well that works is still ahead.
The proposal that says most is the one pulled after two months. Pass through 90% of the coal price above $200 a tonne automatically, and revise the price every two months — what Taiheiyo Cement put forward first was a scheme to replace negotiation itself with a mechanism. It was withdrawn on a single objection from ready-mixed concrete makers, that a price changing every two months would not do for them, and what came out instead was ¥3,000 a tonne fixed for a year: a price arrived at as the result of negotiation. Even a company holding about 39% of the domestic market, it can be said, could not move its customers’ trading customs.
Still, profitability returning is not the same as price-setting having changed. The procurement price of imported coal kept falling — $340, then $210, then $150 — and the narrowing of the operating loss coincides with that tailwind. Sales volumes have kept sliding, from 13.13 million tonnes to 12.95 million and then 12.33 million, so the relationship in which volume falls by as much as price is passed through remains intact. Whether the 10%-plus operating margin set out in the fiscal 2026 medium-term plan is reached depends on whether the same price can be held when coal rises again.
Each heading links to the full Japanese analysis — background, decision and outcome, with sources.
This is a condensed English edition. The full, source-by-source history — with the detailed narrative, financial tables, shareholders and executives — is maintained in Japanese: 日本語版（詳細）— Taiheiyo Cement full history in Japanese →
Taiheiyo Cement Corporation — 有価証券報告書 (annual securities reports); predecessor filings of Nihon Cement, Onoda Cement and Chichibu Onoda.
Compendium of Japanese Company Histories — 『日本会社史総覧』, Toyo Keizai Inc., 1995.
Taiheiyo Cement Corporation — 26 Medium-Term Management Plan (26中期経営計画), May 2024, and earnings briefing materials (決算説明会資料).
Japan Cement Association — セメント協会 statistics on domestic cement demand.
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