Company history

Iwatani Naoji — the fourth son of a Shimane farming family, apprenticed at fifteen to a Kobe shipping agent — opened a shop in the port district of Osaka in May 1930 with his wife Sochi, selling oxygen, carbide and welding materials. Western Japan was then industrialising fast, and welding was spreading through shipyards, rolling-stock works and bridge builders; a supplier who met his delivery dates and controlled the quality of what he shipped effectively controlled his customers’ output. With no capital and no connections, the shop had a foothold in industrial gas within a decade.

In 1941 came the encounter that defined the company. Plants making hardened oils produced hydrogen as a by-product and, beyond what they used themselves, released essentially all of it into the air. Iwatani saw waste — mottainai — and set up a business buying the surplus and selling it on. Imported atomic-hydrogen welders were creating demand, but almost nobody was distributing the gas. Collecting a discarded gas and selling it was a natural extension of the oxygen trade, and it is the origin of what the industry now calls “Iwatani, the hydrogen company.”

The wartime years brought trading and shipping arms and, through a joint venture with a French industrial-gas company, plants in Shanghai, Tianjin and Guangdong that made it the largest oxygen producer on the Chinese mainland. In February 1945, six months before the surrender, the shop was reorganised as Iwatani Sangyo; the Osaka head office burned in the air raids that year and the business carried on regardless. It listed on the Osaka Stock Exchange in 1949.

At a high-pressure gas association meeting in 1952, Iwatani learned that Italian households cooked with liquefied gas from cylinders. Japanese kitchens still burned wood in a kamado, and the housewives who worked them did so in soot and smoke; propane was understood as an industrial fuel and nobody had considered building a consumer distribution network for it. In 1953, aged fifty, he launched Maruwi Propane — Japan’s first nationwide household LP gas business — turning an industrial gas trader into a consumer company.

Selling it required teaching it. From 1955 caravan teams toured the country, boiling water in shrine precincts to show that it could be done fast and without soot, and dealers were signed up region by region to sell a package of stove, cylinder and gas alarm. When the Tokyo Olympic cauldron was lit in October 1964, it burned Maruwi Propane. In 1969 Iwatani applied the same instinct to hardware, launching the Hosenon Cassette Foo, a portable tabletop stove with no hose — the founder had heard housewives complain that the hose was in the way at the dinner table, and switched the industry from refillable to disposable cartridges, borrowing the format from insecticide cans. More than 52 million have been shipped in the half-century since.

Owning the customer meant owning the supply. In August 1980 Iwatani completed its own LPG import terminal at Sakai, twenty-seven years after Maruwi Propane launched, and from February 1981 imported directly from Saudi Arabia under a contract with Petromin — replacing procurement through Japanese trading houses just after the second oil shock. The industrial-gas side was consolidated into a single subsidiary by a three-way merger in 1985. That December, at eighty-two, Iwatani Naoji moved up to the chairmanship after fifty-five years in which every new business — surplus hydrogen, household propane, the cassette stove, direct crude-country imports — had been his personal initiative.

The founder’s departure left a company with three gas businesses, a culture in which one man’s judgement drove every decision, and more than a dozen peripheral ventures that had been kept alive at low returns through the long post-bubble slump. Two short presidencies passed before Makino Akiji took over in April 2000. A career industrial-gas man who had turned the Nagoya branch from seventeenth of eighteen to first, and who had spent 1989 seconded to Union Carbide in the United States studying liquefied-hydrogen production, he made “from volume to quality” the governing principle — halving the number of directors, pushing authority to younger managers, and thinning head office.

In July 2002 he liquidated five subsidiaries and left the detached-housing business entirely, thirty-six years after Iwatani had entered it. The housing losses were not exploding, but in a market in structural decline every year of delay deepened the wound. Clearing the founder-era ventures over the following few years created the financial room for what came next.

That same February, Iwatani opened Japan’s first hydrogen supply station for demonstration testing — at a time when a fuel-cell vehicle cost around $798,212 (¥100m) and essentially no customer for one existed. Industry observers questioned the economics; Makino was continuing a conviction the founder had voiced since 1941, that the age of hydrogen would come. In 2004 Iwatani formed HydroEdge with Kansai Electric Power and Sakai LNG, and in 2006 Japan’s first commercial liquefied-hydrogen plant began operating at Sakai, using LNG cold energy to make liquefaction efficient. It supplied rocket fuel for JAXA launches, high-purity hydrogen for semiconductors and chemicals, and — eventually — the stations. Plants in Chiba (2009) and Yamaguchi (2013) took national capacity to 120 million cubic metres a year.

In July 2014 Iwatani opened Japan’s first commercial hydrogen station, at Amagasaki — a year ahead of the Toyota Mirai going on sale, and in line with a 2011 joint declaration by thirteen carmakers and energy companies to have a hundred stations ready. By 2026 it operated 52 in Japan and 10 in the United States, the largest commercial hydrogen supply chain in the country. Passenger fuel-cell cars never arrived in the numbers assumed; the weight shifted to commercial vehicles — Tokyo’s fuel-cell buses, joint truck trials in Fukushima, and Iwatani’s own fuel-cell trucks delivering gas cylinders. In 2022 it bought Toki Systems Solutions, a leading maker of hydrogen dispensers, for just under $152.2M (¥20bn), integrating the chain from equipment to retail.

In March 2024 Iwatani did something it had never done: instead of building a network itself, it bought into someone else’s. It paid $749.4M (¥105bn) for a further stake in Cosmo Energy Holdings, taking 20.07% of the votes, and signed a capital and business alliance in April aimed at converting a national fuel-retail network towards hydrogen and materials. The market was cold at first — analysts said the synergies were unclear and the shares fell nearly 10% — but joint hydrogen stations and equity-method income followed within months.

The supply side has been harder. The mid-term plan targets operating profit of ¥65bn for fiscal 2027 and hydrogen revenue of ¥200bn by fiscal 2030, but the Australian projects meant to feed it collapsed: after a change of state government in Queensland withdrew funding, Iwatani exited the CQ-H2 green hydrogen venture in March 2025 and wrote off both that and US station assets. What absorbs such blows is the rest of the group. Of $5.8B (¥883bn) in fiscal 2024 revenue, integrated energy supplied 43%, industrial gases and machinery 31%, and materials — rare earths, battery materials, mineral sands — 23%, the last having doubled its operating profit in five years. Ninety-five years on, the founder’s conviction is still being carried by businesses he built to pay for it.