“Changing to a holding company is inevitable for global development and governance,” Yujiro Ichihara, Representative Director, President and CEO of Taiyo Nippon Sanso, told The Gas Review.
With permission from the Japanese magazine, gasworld is able to republish the Q&A with Ichihara.
Q. Why are you changing to a holding company?
Ichihara: We want to become a major company originating in Asia and have been strengthening our global standing since our first medium-term management plan (established in fiscal year ending March 2015).
Due in part to the large acquisitions we gained 2018, second quarter performance for the fiscal year ending March 2020 shows a 55% overseas revenue ratio, with 2/3 of profit gained overseas.
To achieve even greater growth, we will no longer be able to manage business over the entire world from Japan.
To achieve simple and speedy management, we decided that a holding company with business in four global regions was the best fit for us.
This change is also essential for our company from the viewpoint of governance as well, such as for the separation of management and business operations.
Q. Why was 1st October of this year selected for the transition?
Ichihara: A new medium-term management plan starts from April 2021 and we wanted to complete the transition before that to launch new growth under the best conditions possible.
Of course we’ve been preparing for the new structure since before it was announced on 22nd January (2020). Introducing a holding company was one of the concepts we asked to be studied when the current medium-term managing plan was established. Adding representatives from the US and Europe to the board of directors in June last year was also part of the preparations.
Q. Why was ‘Nippon Sanso’ used at the start of the name of the holding company?
Ichihara: We are particular about ‘Nippon’ instead of ‘Japan’ due to its higher global name recognition. During our 40-year history in pursuing global business, the name of ‘Nippon’ has penetrated the markets first in the US and Asia, and later in Europe.
In case of Europe, our European subsidiary was named ‘Nippon Gases Euro-Holding’. We wanted the name to start with ‘Nippon’ to indicate our identity as a Japanese company seeking to become a major global company.
In business in Japan, we will continue to operate under the name of Taiyo Nippon Sanso and focus on increasing profitability. The purpose of this transition is to change to a structure that can simply and quickly adjust to market environments, concentrating on a smooth organisation.
Q. How will you handle R&D and engineering, which are at the heart of being a gas manufacturer?
Ichihara: There is no way that we’d manage all of that from a holding company. Doing so would require an enormous structure.
Japan, the US and Europ will have their own characteristics and strengths and mutually interact to maximise overall strength.
To achieve that, we want to work on formulation of the holding company along with several emphasis themes we’ve been promoting in the process of integration structure following acquisition of our European business.
Q. What are your future ambitious?
Ichihara: We have always changed to maintain the optimum structure that will enable increasing corporate value. And we will continue to change toward that end.
Expanding the scale of our global business will lead to better business in Japan. We have just started to establish the new medium-term management plan.
The Gas Review, issue no. 480