Transition Period1982 – 1999Staying Ahead of the Tide — Enhancing technology and intelligence capabilities

A Celebration Commemorating 150 Years in Business

Nagase celebrated 150 years in business on June 18, 1982. From a shop founded in Nishijin, Kyoto in 1832, late in Japan's Edo period, Nagase underwent a baptism by fire through the Meiji Restoration, the recession following World War I, Japan's defeat in World War II, postwar food shortages, the reconstruction of Japan from the rubble of the war, and more recently the oil shocks, as it grew while overcoming these crises. At the time, companies were commonly said to have a lifespan of 30 years. Yet Nagase had a history spanning 150 years, over which it had generated continuous growth. Naturally, all Nagase employees shared a sense of pride in this accomplishment.

Nagase celebrated its 150th anniversary with parties at the Palace Hotel in Tokyo on July 9, 1982, and the Royal Hotel in Osaka on July 15, 1982. Numerous eminent guests from customer companies as well as financial institutions and other fields attended both parties, which were a great success.

Nagase decided not to hold a party to celebrate the succession of President Shozo and Executive Vice President Hideo with the start of the new organization in January 1982 because of the sudden passing of Seizo. The 150th anniversary party effectively served to celebrate the new president and executive vice president as well.

The 150th Anniversary Special Feature issue of the company journal therefore presented an address by President Shozo. He opened the issue with the following introduction:

“Volume growth is now more difficult for businesses to achieve because the ongoing slowdown has replaced the high growth of the past, and at the same time, user needs are becoming increasingly diverse. Remarkable technological progress and innovation are creating new materials one after another, and industry is changing as it puts their outstanding features to use. Companies are intensely interested in these technologies, and their task is to make sure they use them to respond appropriately to the changing environment in a way that is linked to future growth. Existing product rights are no longer the safe haven they once were. While we can certainly be proud of our long 150-year history, it by no means guarantees our future development. Rather than being proud of our long history and traditions, a key issue at this point is first adding new dynamism to this company with its long history and then executing initiatives that improve and strengthen our organization. Unfortunately, we cannot guarantee our survival if we fail to do so.”

Establishment of Kodak Nagase and Transfer of Operations

In June 1986, Nagase and Eastman Kodak each provided 50 percent of the equity to establish a new company, Kodak Nagase KK. This new company took over all the functions that DKP had handled, including import, sales, service and distribution, and began operations on August 1, 1986.

When Kodak Nagase was established, Kodak manufactured in seven countries outside of the United States, and marketed its products in forty countries. Japan was the only major market in which Kodak worked with an exclusive distributor as its sales company in the photography products business. As a result, Kodak wanted to internalize marketing in Japan as it had in other countries. Japan was liberalizing restrictions on capital at this time.

Consequently, many global companies were re-evaluating their exclusive distributor relationships in Japan to internalize operations. The transfer of operations to Kodak Nagase separated the photographic materials that DKP had handled from Nagase. At that time, DKP had sales of approximately ¥70 billion, which represented 14 percent of Nagase's overall net sales. While the chemicals and plastics businesses were growing significantly, a ¥70 billion drop in net sales at one stroke was a considerable blow.

At the same time, Nagase transferred 530 employees to the new company. Kodak promised to provide compensation that was equal to or better than what the employees were then receiving. However, this was a very significant decision for Nagase management because it meant the transfer of approximately one-third of all Nagase employees.

In January 1989, three years and four months after the establishment of Kodak Nagase, Kodak made a clear offer to purchase all of Nagase's shares in Kodak Nagase. As a result, Kodak Nagase became a wholly owned subsidiary of Kodak named Japan Kodak Co., Ltd. Its current name is Kodak Japan Ltd.

Establishment of the Nagase Science and Technology Foundation

Chairman Shozo, Nagase and related companies provided the funding to establish the Nagase Science and Technology Foundation in April 1989.

Japan's chemicals industry developed remarkably after World War II, but basic scientific and technological improvements were necessary to progress to the next level of development. The foundation was established in commemoration of the 70th anniversary of Nagase's incorporation and to further advance science and technology by supporting research and development and international exchange in biochemistry and organic chemistry.

The foundation supports research, international exchange and the dissemination of research results in biochemistry and organic chemistry, in addition to operations necessary to achieve its own objectives.

Upgrading the Tokyo Branch Office to a Head Office

Nagase introduced a dual head office system on July 1, 1989, when it upgraded the Tokyo branch office to the Tokyo head office.

Companies and financial institutions in the Kansai area that were Nagase's business partners began shifting their operations to Tokyo in the early 1980s. Not only sales activities but also negotiations with central government agencies, operations related to industrial groups, as well as financial and capital markets and international operations seemed to be centering on Tokyo.

By the late 1980s, the majority of Nagase's head office functions were at the Tokyo branch office, which accounted for 54 percent of total sales and 56 percent of all Nagase employees. Therefore, Nagase moved to a dual head office system in Tokyo and Osaka to gather information about the capital region more accurately and quickly and expand its sales base there.

Establishment of the Nagase R&D Center

On April 26, 1990, the long-awaited Nagase R&D Center was completed in the Kobe High Tech Park five years after it was first proposed, at a total construction cost of approximately ¥3 billion.

President Hideo Nagase made the following comments in greeting the many guests, including business partners and university representatives from all parts of Japan, gathered at a party held at the Kobe Oriental Hotel on June 11 to celebrate the completion of construction.

“Nagase's mission, as a technology and intelligence oriented company carrying out global business activities, is to accumulate and evaluate ever-changing, ever-evolving advanced technology and information, add new value to it, and return it to society. The decision to build the Nagase R&D Center came from an acute awareness of the need for a new-technology-driven facility with both R&D and technology evaluation functions to boldly pursue that mission.

“I am confident the Nagase R&D Center will become a springboard for the Nagase Group's future growth by concentrating the technology and development functions accumulated in our various divisions and related companies to promote integrated business activities from research and production to sales.

“Nagase has steadily added to its achievements as a unique trading company backed by technology. I look forward to your contributions to the success of the Nagase Group by cultivating and utilizing the Nagase R&D Center with us as a new function.”

These words summarized Hideo's thoughts on the Nagase R&D Center.

Launch of Electronic Systems and Materials Division

To strengthen business related to the electronics field, Nagase had launched the Electronic Materials and Systems Division in the early 1980s and then established the Electronic Materials and Equipment Division. At the same time, electronics and information related business also increased in the Plastics Second Division and other divisions, periodically overlapping with the Electronic Materials and Systems Division.

In response, Nagase integrated the Electronic Materials and Equipment Division and large parts of the Plastics Second Division to launch the Electronic Systems and Materials Division in April 1995 with Director Hiroshi Nagase as general manager. The change in organization was aimed at succeeding amid intensifying competition in the electronics and information fields and making them a greater part of Nagase's business. It was also the first step toward Hideo's continuing calls for organizational and systemic innovations that went beyond traditional divisions.