Dai Nippon Printing — Company History

The founding of Shueisha and the dawn of letterpress printing

In October 1876 Sakuma Teiichi (佐久間貞一), Ouchi Seiran (大内青巒) and Ko Bukkai (宏仏海) came together as promoters to found Shueisha in Nishikonyacho, Kyobashi ward, Tokyo — near what is now Ginza-Nishi 4-chome. Yasuda Hisanari (保田久成), a relative of Sakuma's, put up ¥1,000 of capital; the founders bought the equipment of the Takahashi letterpress works, then up for sale, and set out with four hand-operated presses installed in a brick-built office. The name is said to have been chosen by Katsu Kaishu, whom Sakuma — a former retainer of the shogunate — had asked to name the firm: it carried the resolve to excel even Britain, the leading nation of the day. Through his work with the Daikyoin, the office that oversaw religious instruction, and with the Buddhist newspaper Meikyo Shinshi (明教新誌), Sakuma had heard from Western missionaries that letterpress was coming to replace woodblock printing, and decided to open a letterpress works himself. Printing government documents and statute books alongside published works, Shueisha secured an early footing as a pioneer of modern typographic printing in the first years of Meiji.

Not long after its founding the firm took on the printing of celebrated early-Meiji works such as Nakamura Masanao's translation Saikoku Risshihen (西国立志編), and on that footing, in November 1886, acquired a site of some 16,000 square metres (about 4,900 tsubo) at Ichigaya-Kagacho in Ushigome ward and opened its First Plant, the Ichigaya works. It began there with a letterpress department and widened its equipment to a type-founding section, an electrotype section and a lithography department; a firm that had not outgrown the backstreet workshop became one of the leading letterpress printers in the country. In April 1888 it was reorganised as a limited-liability company, and in January 1894, in step with the entry into force of the Commercial Code, as a joint-stock company, with Sakuma Teiichi taking office as its first president — a modern corporate form adopted early. The engineering bent that led it to design its own type, the Shuei typeface (秀英体), laid the ground for the technology-driven company that would later move into electronics.

The Ichigaya First Plant was rebuilt as a modern reinforced-concrete printing works, and when the Great Kanto Earthquake of September 1923 devastated the Tokyo printing trade, Shueisha's new plant escaped with only light damage. Orders poured in while competitors stood idle, and this became the making of the company. In October of the same year the head office moved to the new Ichigaya plant, fixing the Ichigaya headquarters that has now stood for 150 years. From the earthquake onward, orders for newspapers, magazines and other periodicals concentrated on the firm, and through the late Taisho and early Showa years it assembled relief, planographic and intaglio printing under one roof as a full-line plant working at volume — the production base that would carry both the merger and the diversification to come.

The merger with Nisshin Printing and the birth of Dai Nippon Printing

Nisshin Printing, the partner in the merger, had been established in 1907 and, from a plant at Enokicho in Ushigome, had bought the Ichida Offset Printing works at Tabata in 1927 and the Tsujimoto Photographic Crafts company at Iriarai in 1928, then opened a branch plant at Osaki in 1932, growing into a full-line printer with gravure work of its own. In November 1934 Aoki Hiroshi (青木弘), managing director of Shueisha, and Hirano Tomio (平野登美夫), managing director of Nisshin Printing, signed a contract for a merger of equals; the two companies combined in February 1935 and the trade name was changed to Dai Nippon Printing Co., Ltd. The new company started with capital of ¥6 million under its first president, Masuda Giichi (増田義一), with Aoki and Hirano side by side as managing directors. It was the largest reorganisation the Japanese printing industry had then seen; the new company was the largest printer in Japan, and the starting point of the DNP brand.

Having come through the paper controls that followed the outbreak of war with China and the bombing of its plants, the company restarted the Enokicho works in September 1946 and opened a Kyoto plant in October. In the same year it was designated a controlled plant of the Ministry of Finance and took on the printing of banknotes and securities — the seed of the later securities and card businesses. In May 1949 it listed on the Tokyo Stock Exchange, putting in place the means to raise capital during the postwar recovery, and with the Osaki plant in November 1951 and the Osaka plant created by the merger with Nihon Seihan (日本精版) in September 1956 it settled into a two-hub structure across Tokyo and Osaka. Holding both the “software” of its typefaces and the “hardware” of plants across the country, it had the supply capacity to meet the fast-growing demand for publishing, textbooks and commercial printing that ran from the recovery years into the high-growth era, and the earnings base that would fund the diversification to come.

Kitajima Orie's rebuild and the origins of expand-printing and diversification

In the disorder after the war, Dai Nippon Printing was shaken by labour disputes, and the rebuild was led by Kitajima Orie (北島織衛), who became president in 1955. Kitajima was the third son of Aoki Hiroshi, then managing director; he had hoped to join the Industrial Bank of Japan, failed to do so, entered Dai Nippon Printing instead and made his name in sales. In June 1951, before taking the presidency, he announced a five-year rebuilding plan to the whole company as managing director and won its full backing in a vote of all employees, securing the footing for recovery. Setting out a policy of raising several pillars rather than trusting the safety of one, he used the Osaki plant opened in 1951 as a foothold and moved into paper containers and packaging printing, a field he had marked out on a study trip to the United States. There was opposition inside the company to breaking the emphasis on publishing, but he overrode it, and the business grew into the packaging pillar of later years. Around the idea of expand-printing (拡印刷) — widening what was printed, the materials it was printed on and the processes before and after — and around the notion that a business taking orders should nonetheless sell its own proposals, Kitajima led twenty-four years of aggressive management.

One of those pillars was the electronics materials that came from applying the fine pattern transfer at the core of printing to substrates other than paper. In 1957 the company joined the trial production for domestically made colour television, begun under the direction of the Ministry of International Trade and Industry, as the maker of the shadow mask, and was looked to as the only printing company with a research laboratory worth the name. It made prototype shadow masks for cathode-ray tubes by etching, and in 1958 became the first Japanese manufacturer to put them into volume production and sale, building a dust-free plant at Kamifukuoka in Saitama prefecture. In 1959 it widened into the photomasks indispensable to making integrated circuits, and in 1967 into chrome masks, securing its position as a supplier of semiconductor and display materials. The Central Research Laboratory, completed in July 1966, was the site where this applied research was carried on systematically, and the birthplace of the later electronics business.

Diversification did not stop at electronics. Kitajima also saw room to grow demand for the company's own products, paper cups among them, and in 1963 set up Hokkaido Beverage with Dai Nippon Printing holding 60 per cent, stepping into Coca-Cola bottling for Hokkaido. Against the view that soft drinks would not sell in a cold region the business grew, and it is the origin of the beverages segment, today's Hokkaido Coca-Cola Bottling. Production kept expanding through the high-growth years, with the Akabane plant in January 1972 among others, and in July 1975 the company established the Production Technology Research Laboratory to study manufacturing technology itself as a system. The two laboratories together formed the technical base for a diversification that reached past the bounds of a printing company into electronics, packaging and functional materials.

Electronics, packaging and publishing: the four-segment group

In 1979 Kitajima Yoshitoshi (北島義俊), eldest son of Kitajima Orie, succeeded his father as president — Orie died the following year, in 1980 — and inherited a structure in which the selling strength his father had built was now tied to technical and planning strength. Yoshitoshi set out two principles for the business: expand-printing, the widening of what printing covers, and creation (造), the building of proposals of its own, and pressed harder on the policy of taking printing onto substrates other than paper. The shadow masks begun in 1957 and the photomasks begun in 1959 had their volume-production techniques refined until they held high shares of the world market, and electronics materials grew into an earnings pillar second only to print media. Out of that expansion, revenue passed ¥1 trillion in the year to March 1991, extending an unbroken run of rising sales and profits that went back to the listing made when the Tokyo Stock Exchange reopened. With the succession from father to son, the diversification that pushed at the limits of printing entered its full phase.

From the 1970s into the 1990s DNP went on building new plants across Japan. Kuki in September 1983, Ono in November 1990, Okayama in October 1991, Otone in October 1994, Tanabe in September 1995 — production sites for packaging materials, electronics materials and functional materials came on stream one after another. Materials for semiconductors and displays in particular, such as LCD colour filters and photomasks, were fields in which the company could be competitive because printing technique had been driven to higher precision. This was the period in which a printing company's production sites spread onto substrates other than paper, and the layering of its business portfolio became visible. The printing industry of the same years was approaching the peak of publishing demand, but DNP was already, at that peak, laying its bets on the next substrate, investing ahead of the rest of the industry to escape its dependence on print media.

In May 2001 the company drew up the DNP Group Vision for the 21st Century, setting out a long-term strategy conscious of the digital age. The business was structured into four segments — information communication, lifestyle and industrial supplies, electronics, and beverages — and the businesses outside print media had become the earnings pillars. In the year to March 2006 revenue reached $13.0B (¥1.51tn) and operating profit $1.0B (¥121bn), a peak for a group that stood with Toppan Printing as one of the largest printing groups in Japan. Coming just before the headwind of shrinking print demand became plain, it was the set of accounts in which the returns on the diversification showed most clearly. The four-segment structure formed in this period went on to act as the frame that separated the fortunes of one business from another through the long adjustment that followed, creating a pattern in which the effect of shrinking print media was offset within electronics and packaging.

Buying bookshops: an attempt at vertical integration into publishing distribution

In August 2008 DNP acquired shares in Maruzen Co., Ltd. and made it a consolidated subsidiary. In March 2009 the Junkudo Bookstore chain also became a consolidated subsidiary, and in February 2010 Maruzen and the Library Distribution Center (図書館流通センター) were brought together under a new intermediate holding company, CHI Group, now Maruzen CHI Holdings. For a printing company to take major bookshops into its group was an unusual strategy of vertical integration even by the standards of the industry. The thinking was to hold the chain from the upstream of printing to its downstream without a break, and the intention can be read as securing added value by moving to the distribution side while the publishing industry as a whole contracted. Bookselling, however, carries heavy fixed costs and is structurally set up to lose margin as the publishing market shrinks, so the move also carried within it the risk of a printing company holding a retail business from another trade.

This step into publishing distribution, however, coincided with the Lehman shock and the deterioration in results that came immediately after. In the year to March 2009 DNP recorded its first net loss, of $223.5M (¥21bn). Extraordinary losses of $815.8M (¥76bn) included the costs of restructuring and impairment, and over-investment in the electronics business surfaced at the same time as the losses in publishing distribution. Revenue, which had reached a peak of $15.6B (¥1.62tn) in the year to March 2008, would move sideways for a long time thereafter, in the high ¥1.4 trillions to the ¥1.5 trillions. It was the set of accounts that announced the beginning of the long adjustment, with the difficulty of vertical integration showing up in the numbers. This was also the point at which the publishing market turned down from its 2008 peak, so that holding bookshops came to mean holding the losses of the distribution side — a structure that surfaced as a drag on the earning power of the printing business itself.

Restructuring and a second round of impairments

In the year to March 2012 DNP again recorded a net loss, of $205.5M (¥16bn). Extraordinary losses of $458.7M (¥37bn) came chiefly from impairment in the electronics business, and stand as the figure marking the contraction of the LCD colour-filter business. In July 2014 the company split and reorganised its four regional subsidiaries — DNP Hokkaido, Tohoku, Chubu and Nishinihon — and restructured its manufacturing operations by function into DNP Graphica, DNP Data Techno and others. The shift from a regional to a functional organisation was aimed at making the business more efficient and concentrating resources on growth areas at the same time, and marked the point at which the improvement of the company's constitution, after a long adjustment, began in earnest. LCD colour filters had been a growth business built up with investment through the 1990s, but margins collapsed as Taiwanese and Korean makers rose, and equipment in which the company had invested ahead of the market became, in a reversal, a target for impairment.

In October 2015 the company drew up DNP Group Vision 2015 and published a new long-term strategy. Even so, in the year to March 2019 DNP recorded a net loss of $326.6M (¥36bn), the largest in its history. The extraordinary losses of $917.3M (¥100bn) were impairments taken in the course of restructuring, and the decision to compress assets sharply at this point turned out to be the precondition for entering a growth path later. In June 2018 Kitajima Yoshinari (北島義斉) had succeeded Kitajima Yoshitoshi as president, and the turn towards a structure with digital transformation and sustainability transformation as its pillars began. It was the moment in a long period of stagnation when the resolve to carry through a painful restructuring was settled, and the ground for the great change that followed was formed through this loss-making year. Keeping the continuity of management that ran on from the previous generation, the decision to clear the burdens of the past in one loss was an indispensable step in creating the conditions for the recovery in profit, and the stronger returns to shareholders, that began the following year.

Concentrated investment in lithium-ion battery pouches, and the push into SX

In the year to March 2020 DNP recovered to a net profit of $649.9M (¥69bn). Extraordinary gains of $765.1M (¥82bn) included profits on the sale of cross-shareholdings and other assets, and marked the start of a strengthening of the balance sheet through asset disposals. In the same month the company drew up the DNP Group Environmental Vision 2050, making plain a direction that placed sustainability transformation at the centre of management. President Kitajima Yoshinari set out a stance of taking on change in pursuit of solutions to social problems, showing the outside world that transformation on both the digital and the sustainability side would be central to the running of the company. As the precondition for emerging from a long stagnation, the improvement of the balance sheet and the redefinition of strategy ran in parallel. These were the accounts that marked the turn from the largest loss in the company's history, and the foundation of a printing company's new growth strategy was laid. Selling cross-shareholdings was a way of turning accumulated unrealised gains into cash to be divided between growth investment and returns to shareholders — an early, full-scale change of capital allocation by the standards of the printing industry.

In March 2021 the company opened a plant for lithium-ion battery materials inside the Tsuruse works. It was an expansion of production of battery pouches for electric vehicles, and became the central item of DNP's growth investment thereafter. Electrification was a worldwide policy theme in the first half of the 2020s, and the battery pouch, a product lying on the extension of printing's multi-layer film technology, was a growth field in which DNP could bring its strengths to bear. In the year to March 2022 the company recorded a net profit of $739.1M (¥97bn), with extraordinary gains of $414.9M (¥55bn) that again included sales of cross-shareholdings. It was the point at which growth investment and asset disposals began to turn together, and the base of the expansion that followed was built during this parallel running. Turning the technology of packaging printing to the outer casing of automotive batteries is a textbook growth path for a printer facing shrinking demand for paper: redeploying an existing technical asset in a new market.

The basic management policy and ¥300bn of buybacks over five years

In February 2023 DNP published the Basic Policy for the Management of the DNP Group. It set a long-term target of 10 per cent return on equity and made plain a financial strategy that would run in parallel $2.1B (¥300bn) of share buybacks over five years in aggregate, the sale of cross-shareholdings, and concentrated investment in growth businesses. For a printing company it was a turn in shareholder returns and financial strategy on a scale without precedent. Management framed it by saying that in order to develop and deliver new value, the DNP Group will carry out change that can be called discontinuous — unlike anything it has done before (results briefing, FY2023). It was the decisive change of policy for emerging from the long stagnation, and it came with a clear message to the capital markets. From the publication of the policy the share price moved up to a higher level, and it also became the occasion for the axis of dialogue with institutional investors to shift from the risk attached to print media to the improvement of capital efficiency.

In the year to March 2024 the company recorded revenue of $9.4B (¥1.42tn), operating profit of $497.7M (¥75bn) and net profit of $732M (¥111bn). Operating profit was back in the ¥70 billions for the first time in sixteen years, and with extraordinary gains of $567M (¥86bn) the company was on a growth path in profit terms as well. In May of the same year a production line for the metal masks used in making organic EL displays began operating inside the Kurosaki plant. It is a priority business serving demand for OLED in smartphones and notebook computers, and became the site driving the growth of the electronics division. This was the phase in which an advanced-materials business lying on the extension of printing technology began to show up as concrete earnings in the accounts. The metal mask is the precision mask used to deposit OLED pixels onto a substrate — a product that applies the core of printing, the transfer of a fine pattern, to advanced display manufacturing, and a symbol of the long working life of the company's technical assets.

Operating profit of ¥93.6bn, with restructuring and acquisitions in parallel

In the year to March 2025 revenue was $9.7B (¥1.46tn), operating profit $625.5M (¥94bn) and net profit $739.7M (¥111bn). Extraordinary gains of $871.4M (¥130bn) and extraordinary losses of $519.2M (¥78bn) were booked at the same time, with the sale of assets held and the restructuring of the business running together at full speed. By segment, smart communication was $4.8B (¥714bn), life and healthcare $3.3B (¥496bn), and electronics $1.7B (¥248bn) with profit of $383.6M (¥57bn) — a structure in which the margin of the electronics division stood far above the rest. Against the long headwind of shrinking print media, these were accounts that showed electronics carrying the profitability of the company as a whole. That an electronics division making up 17 per cent of revenue should earn six-tenths of operating profit settled, in figures, the gap between the business the company's name suggests and what it actually is.

In January 2025 the company made HK Holding, the parent of Hikari Kinzoku Kogyosho (光金属工業所), a consolidated subsidiary, and in February it acquired Resonac Packaging and made it a subsidiary under the name DNP High-Performance Materials Hikone (DNP高機能マテリアル彦根). In April it combined its publication printing business with DNP Book Factory and other operations to establish DNP Publishing Products (DNP出版プロダクツ). Restructuring and acquisition were used together to speed the recomposition of the business portfolio. Under the current medium-term plan the buybacks had already reached $1.4B (¥220bn) by March 2026, a little over seventy per cent of the plan, so that the financial strategy set out in the basic management policy was being carried out ahead of schedule, in a phase where the transformation of a printing company was accelerating. That the acquisitions were concentrated in the two growth fields of electronics materials and packaging makes the direction of that recomposition plain.