Company history

Kurita began in July 1949 as a ¥300,000 company in Kobe making one product: a boiler compound that stopped scale forming inside steam boilers. What distinguished it from a chemical trader was the second step. In 1951 Kurita Haruo set up a boiler-feedwater laboratory in Nishinomiya, so that the chemical sold was the one prescribed after testing the customer’s water; in 1954 the company began building water-treatment equipment as well. Within five years it held both halves of the business it still runs — chemicals and plant — and the self-description that followed from them, “the doctor of water.”

The 1950s and 1960s were spent turning that into an industry position: head office to Osaka in 1956, chemical-cleaning work spun into a separate company in 1959, a listing on the second sections of the Tokyo and Osaka exchanges in October 1961 and promotion to the first section ten months later, a dedicated research institute in Yokohama in 1962. A 1965 business alliance with the trading house Itochu supplied procurement and export reach. Anything that used water was a potential customer, from a laundry to a steelworks, and in municipal night-soil treatment Kurita became one of the “big three” alongside Kubota and Ebara Infilco.

Then, in December 1967, the accounts were found to be falsified. Hidden accumulated losses of about $7.2M (¥3bn) — 2.6 times paid-in capital — had been buried under percentage-of-completion accounting while a late entrant chased orders at any price. Itochu, the largest creditor, took up a share issue and installed its own vice-president as Kurita’s president. What carried the company through was the chemicals business: unlike plant, it sells again every month for as long as the customer’s equipment runs. Recovery took six years, helped by the pollution-control boom and by large orders from the Kashima and Oita petrochemical complexes; the dividend was restored in 1973.

The pollution-control boom of the early 1970s made a specialist’s market out of what had been a maintenance item. Every factory with effluent or flue gas became a customer, and Kurita’s equipment business widened from industrial plant into municipal environmental works — night-soil treatment, where it expected to take a third of a ¥50 billion market, and municipal waste incineration, where the plants now had to be designed to shed their reputation as ugly, dirty facilities. Scale followed: a Tokyo head-office building in Shinjuku in 1974 under a dual-headquarters system, and a new central research institute at Mori-no-sato in Atsugi in 1985.

The more consequential customer was the semiconductor industry. From the 1970s Kurita supplied ultrapure water systems — water stripped of ions, organics and particles to near the theoretical limit — by pairing reverse-osmosis membranes with its own demineralizers, covering the weaknesses of conventional filtration. Orders came from NEC, Toshiba, Sony and Hitachi, and by 1981 Kurita and Organo between them held the market, Kurita at roughly 40–45%. The relationship set the pattern for everything after it: the customer’s specification became the development target, and each new generation of chips demanded water purer than the last.

Elsewhere the company built the technical depth that a two-pillar business allows — wastewater treatment for coal-fired flue-gas desulfurization, decontamination of corrosion products in nuclear plant piping, process chemicals for refineries. It also took its first step abroad, a chemicals subsidiary in Singapore in 1978. But overseas growth stayed slow by policy: subsidiaries were expected to invest only what they earned themselves. In 1981 president Nakamura Sadao set a mid-term goal of ¥100 billion in sales by fiscal 1985, with chemicals supplying about 30% of it.

The semiconductor downturn of the late 1990s exposed what a company that sells equipment outright cannot control. Ordinary profit fell from $249.1M (¥27bn) to $132.2M (¥16bn) in the year to March 1997, whipped around by the silicon cycle. Kurita’s answer was not to reduce its exposure to chipmakers but to increase it: install the ultrapure-water line inside the customer’s fab, own it, operate it, and sell the water. A machinery maker became a utility. The trade was steady long-term revenue in exchange for carrying the capital cost up front — affordable only because the balance sheet carried no interest-bearing debt and 77% equity, the financial conservatism left behind by 1967.

The first supply contract was delivered in 2002, and plants such as Sharp’s Sakai fab followed. Being resident on the customer’s site also fed back into development, and by 2010 Kurita held about 70% of ultrapure-water systems for Japan’s electronics industry, owned 1,534 water-related patents — the most in the country — and drew more than 80% of sales from chemicals and service rather than one-off equipment.

The same period closed a business. In May 2006 bid-rigging was uncovered on sludge-recycling (night-soil) plants, and that December Kurita withdrew from all construction work ordered by national and local government — not the one product line at fault but every one of the 28 licensed categories, with no transfer to group companies. It cost the company its “big three” position in municipal treatment and concentrated it on chemicals and industrial plant. Growth was sought abroad instead: effluent recycling in water-short China, a dedicated water and resource recycling unit from 2010. The Itochu alliance of 1965, having served its purpose, was dissolved in 2013.

With the domestic market flattening as semiconductor and LCD investment matured, Kurita reversed its frugal overseas policy and bought its way in. It began in January 2015 with the water-treatment, paper-process and alumina businesses of Germany’s BK Giulini, for about $266.9M (¥32bn), then took North America in sequence: Fremont Industries (2017), U.S. Water Services and Avista Technologies (2019), and the precision-cleaning firm Pentagon Technologies (2020). Korea’s Hansu was consolidated in 2017. President Monden Michiya explained the shift plainly in 2017 — growth financed only out of what subsidiaries earned themselves was too slow, so the parent would fund it.

In 2022 the business was recut along customers rather than products, into a general water-treatment market and an electronics market, and the eleven domestic chemicals and maintenance sales companies were merged into two. Consolidated sales rose from ¥189.4 billion in the year to March 2015 to ¥408.9 billion ten years later, with operating profit peaking at ¥41.2 billion in the year to March 2024.

What capital could not buy was integration. In the year to March 2023 Kurita wrote off $54.1M (¥8bn) of goodwill on Kurita America’s chemicals business, the company citing integration work stalled by the pandemic; the year to March 2025 brought further impairments at two US subsidiaries and the closure of two under-utilized plants. ROIC was written into executive evaluation, and under president Ejiri Hirohiko, with the company now a company with a nominating committee, the task is the unglamorous one: making the businesses it bought earn.