Company history

The company began as an outlet for surplus electricity. Fukuzawa Momosuke, who ran Nagoya Electric Light and was expanding hydropower on the Kiso river system, needed somewhere for the current to go; his consulting engineer Samukawa Tsunesada, back from a tour of Europe and America, judged electric steelmaking the most promising use, and the venture that began as a department in 1913 was separated in 1916 as Denki Seikosho, today’s Daido Steel. Running it required large quantities of graphite electrodes, all of them expensive imports from the Acheson company in the United States.

Samukawa proposed making them in Japan, and on 8 April 1918 Tokai Electrode Manufacturing was incorporated with capital of ¥500,000, its head office in Tokyo and its plant in Nagoya, with Samukawa as first president. The decisive choice was structural: it was set up not as the steelworks’ in-house department but as an independent carbon maker selling to the whole related industry. Had its electrodes been tied to one parent’s output, its demand would have been capped by that parent’s tonnage — and there would have been no room for the carbon products, carbon black and fine carbon that followed.

Technically the company pushed into ground no one in Japan had worked. It began research on artificial graphite in 1919, produced electrolytic graphite plates in 1925 and large artificial graphite electrodes in 1926, started fine steelmaking electrodes in 1929, and in 1934 made an 18-inch electrode — among the largest of its day — for the Kure Naval Arsenal. It also integrated backwards and sideways: the small-carbon-products maker Daisanmi was absorbed in 1919, bringing electrical brushes; the Tanoura works came with a Kumamoto subsidiary merged in 1936; the Wakamatsu plant, opened the same year, made its own pitch coke; Chigasaki followed in 1938. Capital had reached ¥37 million by the end of the war. And from the pitch oil that Wakamatsu produced as a by-product came research, from 1937, into carbon black, in production from 1941.

Electrodes were an outlet for a by-product of electric steelmaking, and their demand rose and fell with steel. Carbon black was the entrance to a different market altogether. When a GHQ memorandum of October 1949 lifted all remaining restrictions on automobiles, tyre demand became visible, and in 1950 Tokai commercialised the first furnace-process carbon black in Japan using its own technology, selling Seast 116 to the rubber industry; by 1955 it held 40% of the domestic market. Electrodes grew too — the first 20-inch electrode in Japan in 1959, and an export ratio of 49% in the first half of that year as domestic demand swung.

The 1960 technology tie-up with Cabot of the United States is easily misread as the moment the second pillar arrived. It was not: the process was already Tokai’s own and the market share already won. What the licence bought was time — the time to match plant and quality to the growth of automobile production — and it was spent on upgrading Wakamatsu and building the Chita plant in 1962. Carbon black passed 40% of sales in the second half of 1975, prompting the change of name from Tokai Electrode to Tokai Carbon that June; the Ishinomaki plant followed in 1978, and by 1980 carbon black was more than half of revenue.

The yen’s appreciation after the Plaza Accord of September 1985 cost the electrode business its price competitiveness, and Tokai answered in 1987 and 1988 by consolidating and rationalising its plants. Aware that both of its main products were mature, it opened the Fuji Research Laboratory in 1986 to work on silicon-carbide whiskers, C/C composites, fuel-cell carbon and glassy carbon. Internationalisation changed shape at the same time, from exporting electrodes to producing abroad: Tokai Carbon America in New York in 1987, a Thai carbon-black joint venture in 1990, technology licensed to a Korean producer that December.

In January 1992 Tokai Carbon merged with Toyo Carbon, a rival founded in the same year of 1918 and coexisting with it for seven decades. The stated purpose was narrow — cutting electrode costs after the strong yen — and the speed with which the Yamanashi plant was closed in June 1993 shows it. But the merger also brought the Shiga and Chigasaki No. 2 works and made Tokai the largest integrated carbon products maker in Japan, first domestically in carbon black, artificial graphite electrodes and impervious graphite, second in brushes and fine carbon, and newly present in friction materials. In the December 1994 year it had revenue of ¥43.7 billion and 947 employees, and a four-business portfolio — electrodes, carbon black, fine carbon and friction materials — that it would carry abroad.

Fine carbon for the semiconductor industry drove the next wave of overseas plants: Korea in 1996, the United Kingdom in 1999, Dalian in 2006. In electrodes the company took a European position, acquiring the German producer ERFTCARBON outright in July 2005 as TOKAI ERFTCARBON, taking 80% of the fine-carbon processor CIP in 2006, and setting up a European holding company in 2007, the year Kudo Yoshinari became president.

The cyclicality of both main products then showed its teeth. The 2008 financial crisis cut revenue from ¥128.4 billion in FY08 to ¥83.2 billion in FY09 and operating profit from ¥21.6 billion to ¥5.2 billion, as collapsing car production and steel demand hit carbon black and electrodes at once. Revenue recovered to around ¥100 billion, but the electrode market did not: the graphite electrode business earned only about ¥2.5 billion on roughly ¥27.0 billion of sales in FY15. In FY16 the company took ¥11.0 billion of extraordinary charges, mostly impairments of the electrode and fine carbon businesses, and posted a net loss of ¥7.9 billion — the largest in its history. Nagasaka Hajime, president from 2015, made restructuring the electrode business the explicit answer.

In November 2017, immediately after that record loss, Tokai Carbon bought SGL GE, the American arm of SGL’s graphite electrode business, for about $115M (¥13bn), renaming it TOKAI CARBON GE. The opportunity was not of its own making — the asset came free only because US regulators attached divestment conditions to Showa Denko’s purchase of SGL’s electrode business — but it completed a three-region network across Asia, North America and Europe. Sid Richardson Carbon of the United States followed in September 2018 and the German carbon and graphite group COBEX in July 2019, adding smelting and lining products for aluminium and steel.

The timing was extraordinary. Chinese environmental regulation choked electrode supply just as electric-arc steelmaking demand surged, and prices spiked: FY18 revenue reached ¥231.3 billion, 2.2 times the previous year, with operating profit of ¥73.1 billion against ¥11.1 billion, and net profit of ¥73.4 billion — all records. The graphite electrode segment alone earned ¥56.0 billion on ¥102.1 billion of sales, a 55% margin, recovering the acquisition price in roughly a year.

A business that earns on scale is equally exposed when supply turns, and from 2019 cheap Chinese and Indian material and weak steel production reversed the cycle. In FY24 the company booked ¥76.9 billion of extraordinary losses and a net loss of ¥56.5 billion, and in June 2025 it stopped electrode production at the Shiga plant and transferred TOKAI ERFTCARBON — giving up, of its own accord, the European base it had held for twenty years. What the century-old logic of the company leaves standing is the rest of the portfolio: carbon black, fine carbon for semiconductors, friction materials — businesses whose cycles do not move together, which is why they were assembled in the first place.