Reading the financial crisis as the greatest chance since founding (2009)

A company that read the price tag on a crisis

What Kaga Electronics did in 2009 was not endure the crisis but read the prices it had set. That it could turn buyer in the same year it reported a loss was entirely because a business holding no inventory has a ceiling on what it can lose. The order-first method adopted at the founding out of sheer lack of capital was, forty years on, working as the capacity to acquire in a slump. A defensive discipline becoming an offensive source of funds — that inversion is the distinctive feature of this company’s capital allocation.

Still, anyone can call a crisis an opportunity. Chairman Tsukamoto’s phrase survived as policy because the following month brought bases in Britain and the Czech Republic, two months later a Japanese acquisition, and, at the handover of the presidency, a figure — ¥10 billion — passed to his successor. The policy was not a slogan but something converted into a count of bases, a count of deals and a number set inside the company. The net loss for the year to March 2009 that Tsukamoto called a “chance” was ¥800 million; twelve years later Kaga Electronics reported a net profit of ¥11.4 billion.