Five in-market companies, and E-Plan 2025’s split of growth from foundation (2023)

Deciding by selection without folding anything

What Ebara did not do in this reorganization expresses its character better than what it did. It sold not one business. It kept all five lined up and changed only how the money is handed out, sorting Precision & Electronics and Building & Industry as growth businesses and Environment and Infrastructure as foundation businesses. As CFO Fuchita Tetsuya put it, Ebara is the best owner of every one of its businesses; the path of demonstrating selection and concentration through withdrawal was not chosen. The experience of folding wind power and fuel cells in the 1990s seems to have worked not as a pain of shedding businesses but as a discipline applied before adding them.

That way of deciding, however, may hold only for as long as Precision & Electronics earns half of the group’s profit. Semiconductor demand runs in waves, and President Hosoda Shugo has himself said that “good fortune attracts trouble,” invoking the rebuilding from the slump of the 2000s. Environment and Infrastructure, placed among the foundation businesses, are the successors of the businesses that produced the $245.9M (¥29bn) loss of 2003. As long as it aims at $6.7B (¥1tn) with its earnings leaning on a single pillar, the design of its capital allocation will be tested once more at the next turn of the wave.