Meitec Group Holdings - Company History

Meitec began in July 1974 as Nagoya Engineering Center, founded personally by Sekiguchi Fusaro with $3,413 (¥1m) of capital. He came to it having already failed once: his previous company, the switchboard maker Daido Kiko, had gone under after a botched development programme, and the conclusion he drew — that there is no such thing as development without developing your own engineering — pointed him at a business made of nothing but engineers. The first incarnation was ordinary enough: a local contract design shop that took drawings in from industrial-machinery makers and farmed the work back out to subcontractors.

The turn came in December 1977, when Mitsubishi Heavy Industries stood up an aircraft programme. Aircraft development is secret work, and secret work cannot safely be sent outside — yet the customer had no easy way to bring outside engineers inside. Sekiguchi proposed the inversion that became the company: send not the drawings out but the people in, stationing his own employees at the customer’s site, within the confidentiality perimeter. That contract converted a regional design shop into an on-site engineer-dispatch business, and made Japan’s large manufacturers its standing customers.

Growth followed the shortage of engineers in Japan’s appliance and car industries: a subsidiary for lower-difficulty design work in 1979, a Kansai head office in 1980 and a Kanto one in 1982, 1,000 employees by late 1982, the name Meitec in 1984, a Nagoya Stock Exchange listing in 1987, Tokyo in 1991, and more than 5,000 employees. Then 1993 exposed what the model costs. Customers cut R&D spending, contracts were terminated, Meitec fell to a net loss and cut roughly 3,000 people — about half its permanent staff. When the product is people, a fall in the customer’s research budget turns fixed cost directly into loss. In 1996 the company reversed course and resumed hiring science graduates at some 2,000 a year: headcount halved and then doubled inside three years, all at one man’s discretion.

On 31 July 1997 an emergency motion to remove the president was put to Meitec’s board, and every director but Sekiguchi himself — who as the subject had no vote — supported it. It was an unusual event in Japan: a founder who still controlled the shares lost the office. The form of it mattered as much as the fact, an ouster settled in a single resolution rather than negotiated in stages. Sekiguchi sued, and in 1999 the Nagoya District Court upheld the board’s resolution. That year Nishimoto Kosuke became president, and the new regime chose its founding commitment deliberately: a company that does not restructure even in a downturn. The 3,000 cuts of 1993 were re-shared inside the company as a trauma, not a manoeuvre.

Keeping that promise required a business that earned when dispatch did not. Meitec built out subsidiaries in training, placement and CAD, opened a Shanghai operation in 2003 to supply engineers to Japanese manufacturers in China, and in 2004 acquired Japan Drake Beam Morin, an outplacement and career-training firm — a business that should, in theory, boom exactly when engineer demand collapsed. The economy declined to cooperate: from 2005 Japanese manufacturing expanded and outplacement demand shrank instead. The year ended March 2007 carried a goodwill impairment of $36.4M (¥4bn) on DBM plus a loss on the sale of its US subsidiary, and consolidated net income fell 94.4% to $2.5M (¥295m). Most of DBM went to Tempstaff in 2009; the Chinese entities were wound up between 2016 and 2019.

What the hedges could not do, the core business did on its own. Orders from Panasonic, Mitsubishi Heavy Industries, Seiko Epson, Denso and Canon carried Meitec through eleven consecutive years of revenue growth. The lesson of the decade was that the on-site model was not a thing you could diversify around — only a thing you could run better.

The Lehman shock struck the R&D budgets of the car and electronics makers that were Meitec’s customers. In the year ended March 2010, contracts lapsed until 2,300 engineers were unplaced — still employed, still paid, but not stationed anywhere — and fixed cost overtook revenue. Meitec posted a net loss of $10.3M (¥900m) and withdrew the $1.1B (¥100bn) revenue target it had been steering by. Holding to the no-restructuring promise meant absorbing the idle payroll in full, and the company did.

Recovery came from inside the business rather than beside it. Unplaced staff fell from 2,300 to about 800 by 2011, the overseas arm was folded back into the parent, and Meitec returned to growth. Kokubun Hideyo succeeded Nishimoto in 2014 and reinstated the ¥100 billion goal. The year ended March 2016 set records, and alongside them came a new answer to the question of crisis resilience: not a second business but a thicker balance sheet and a rule for giving the surplus back, with buybacks and a total payout ratio of around 80%.

The target was reached ten years late. Revenue for the year ended March 2020 came to $945.9M (¥101bn) with 11,010 employees — a single-service dispatch business into five figures of revenue, 46 years after its founding. Covid then reversed a year of it, since on-site placement sits badly with restrictions on attendance, but this time the company stayed profitable, which was itself the point. By the year ended March 2022 revenue was back at a record and the binding constraint had moved to the supply side: with semiconductors and electrification bidding up engineers, graduate hiring came in at 804 against a plan of 874. In a business whose product is people, a recruiting shortfall is a ceiling on future revenue.

On 1 October 2023 Meitec moved to a holding structure and took the name Meitec Group Holdings, with the dispatch business itself and the placement, referral and back-office companies beneath it, and with the board reconstituted as an audit-and-supervisory-committee company. It was the first such reorganization in 49 years. Six months earlier a three-year plan, MEITEC 2 Core Transformation, had begun. The structure suited what the group had become: engineering solutions accounts for more than 99% of revenue, so the 2000s experiments in diversification had resolved into a single business run at scale.

The second half of the reorganization was about money rather than people. Judging its equity sufficient in both quality and quantity, Meitec raised its total payout policy from around 80% to within 100%, fixed a dividend payout floor of 50% and a DOE floor of 5%, and tied the choice of instrument to an external condition: buy back stock when the shares trade below three times book. Discretion was replaced with written rules, and the holding company separated that allocation decision from the running of the operating business.

The people at the top now embody the split. In April 2024 Uemura Masato became group CEO — a career banker from Saitama Bank and Resona who joined Meitec in 2007, the first finance professional to lead the company. Then in January 2025 the operating company Meitec appointed as its president Sekiguchi Kosuke, eldest son of the founder ousted in 1997: after 28 years, the founding family was back at the head of the dispatch business, while the holding company stayed with the professional manager. By the year ended March 2025 the group employed 13,319 people at an operating margin of about 14% with effectively no debt — a business that had come through three collapses in customer R&D without cutting its engineers, and whose open question is now whether a founder’s line and a financier’s line can run one group together.