SG Holdings (Sagawa) - Company History

In 1957 Sagawa Kiyoshi, who ran a small civil engineering firm in Kyoto, started carrying packages between Kyoto and Osaka — on foot at first, then by bicycle, then by motorcycle, and from 1961 by truck. He set up the limited company Sagawa in June 1962, and Sagawa Express Co., Ltd. was incorporated in November 1965. The industry around him was built on scheduled bulk runs for large corporations; small consignments were inefficient and largely ignored, while the ones that did move through the national railways or the post office arrived late or not at all. Sagawa took the opposite position: handle corporate small parcels, and charge above the going rate for delivering them reliably. Regulators questioned pricing above the ministry’s official tariff; customers, who wanted their deadlines met, did not. Until Yamato invented consumer parcel delivery in 1976, almost no one competed for the business market Sagawa had chosen. Revenue passed ¥10bn in 1973, and by 1975 a thousand trucks were running.

Because trucking licences were hard to obtain, national coverage was assembled by buying carriers that already held them — starting with the Tokyo operator merged in 1974 to create Tokyo Sagawa Express. Sagawa Kiyoshi divided the country into nine blocks, each regional subsidiary standing on its own profit and loss, remitting a fixed sum upward each period and keeping what it earned above that. Beneath the subsidiaries sat the sales driver: a man who delivered and sold at the same time, paid on what he brought in. In the 1980s a mid-career recruit could make ¥400,000–500,000 a month in his first year and ¥1m if he performed — in exchange for the hours. “The atmosphere was such that you had no choice but to speed and park illegally,” a group executive told 日経ビジネス in March 1992. “We worked like carthorses. There were days of fifteen hours.” In 1987 the transport ministry inspected the group over traffic violations and the labour ministry issued corrective guidance.

By 1983 revenue had passed ¥200bn, with roughly 10,000 employees, 7,000 trucks and 218 branches. Tokyo Sagawa Express in particular caught the apparel industry’s logistics — fast-turning fashion generates exactly the small, frequent consignments incumbents did not want — growing 30% a year, with apparel accounting for 45% of its large accounts, and committing ¥7.6bn that year to a dedicated distribution centre. The three-layer structure of head office, regional subsidiary and driver, welded to a high-priced small-parcel business, produced the fastest growth in the industry. It also produced the pressure that broke.

In February 1992 prosecutors and police raided Tokyo Sagawa Express. Its former president Watanabe Hiroyasu and a managing director were indicted for breach of trust over payments running into the hundreds of billions of yen to politicians and to organized crime. Accounts of Watanabe’s motive differ — modernizing the group, or breaking free of the founder’s grip — but the setting was the same: escalating remittance demands from head office and brutal working conditions in a subsidiary that could not get its owner to change course. Credit collapsed, ¥500bn of guaranteed debt turned unrecoverable, and the whole group’s finances shook. Sagawa Kiyoshi resigned as chairman in 1992 and disappeared from public life, thirty-five years after starting the courier run.

What he left was a business whose economics still worked and a balance sheet carrying roughly $6.3B (¥800bn) of interest-bearing debt alongside a ruined reputation. His eldest son, Kuriwada Eiichi, became president of Sagawa Express that year — a son raised by a mother who had divorced the founder, who had argued inside the company for shorter hours and been ignored. Because high-priced B2B delivery kept generating cash, the lending banks approved a rebuilding plan, and the cash went into repayment and internal repair rather than growth.

The founder’s faction moved against him in 2000, proposing his dismissal. Kuriwada accepted it, then turned enough directors overnight to have his own appointment passed again, took back control, and cleared the faction out. He became chairman in 2002. Sagawa Express’s own revenue sat flat in the ¥700bn range through these years while the debt came down — a decade of a company earning well and spending it on its past.

In March 2006 the group put a pure holding company, SG Holdings, above Sagawa Express and its sister businesses in Kyoto. The point was structural: end the factional politics the scandal had exposed, pull decision-making up out of regional subsidiaries whose independent P&Ls had loosened the centre’s hold, and — in Kuriwada’s formulation — make the group “an ordinary company,” one capable of being listed. Around the delivery core, new earnings were built: SG Realty from 2007 developing and leasing logistics property, a plan to build twenty domestic facilities for ¥72bn, and a serious push into third-party logistics.

The defining commercial decision of the period came in 2013, when SG Holdings upgraded its profitability controls and told the whole company to defend unit price. In practice that meant capping and cutting Amazon Japan’s volume rather than accepting its pressure on rates. Parcel yield, around ¥460 before 2013, recovered to about ¥511. Yamato took consumer share; Sagawa stayed with corporate small parcels and kept its margin. Meanwhile the group reached outward — the Sri Lankan forwarder EXPOLANKA in 2014, a capital and business alliance with Hitachi Transport System in 2016 — and, twenty years after the scandal, began preparing to go public.

SG Holdings listed on the TSE First Section in December 2017 — the year’s largest IPO in Japan, and one the founder had refused for decades on the grounds that bank borrowing sufficed. In the first year as a public company (to March 2018) revenue was ¥1.045tn with ¥62.7bn of operating profit, and delivery alone accounted for ¥824.2bn, 79% of the group. Then the pandemic did what nothing else had: e-commerce lifted both volumes and rates at once. Operating profit passed ¥100bn for the first time in the year to March 2021 and reached a record ¥155.7bn on ¥1.588tn of revenue the year after, delivery yield having risen some 27% since 2015 precisely because the company kept declining the price-pressured accounts. It moved to the Prime Market in April 2022.

The peak did not hold, and neither did the succession. Kuriwada had handed the presidency on in 2015 and again in 2019; in June 2021, when his successor left mid-term, the 74-year-old chairman took the job back himself. He argued publicly that growth now required partners outside the group’s own industry, and in June 2023 passed the presidency to Matsumoto Shuichi, a career insider from outside the family. Under him the shift has been bought rather than built: C&F Logi Holdings, a cold-chain specialist, taken in July 2024 after a bidding war, and the international forwarder Morrison Express in May 2025.

The reason for the hurry sits in the numbers. Delivery operating profit fell 12.4% to ¥81.5bn in the year to March 2024 as the pandemic bulge unwound and competition for domestic B2C parcels intensified. The SGH Story 2027 plan published in April 2025 targets a 15% ROE by fiscal 2030, with logistics — ¥381.3bn of revenue after the C&F integration — and property standing beside delivery, and stakes in China and in cross-held shares sold down. Seventy years after a courier run between Kyoto and Osaka, the company is trying to make its centre of gravity something other than the high-priced domestic parcel.