Japan’s centenarian companies survive by adapting

Centenarian companies survive by adapting

Wednesday, Jan 22, 2014

The Japan News/ Asia News Network

The business environment surrounding companies remains difficult despite the positive signs in the nation’s economy brought about by the Abenomics economic policies of Prime Minister Shinzo Abe.While some economists subscribe to a theory that the average lifespan of a company is about 30 years, there are companies that have been operating for more than 100 years by deftly adapting to changes in the business environment.

What sort of management philosophies have allowed such companies to survive for so many years?

According to Teikoku Databank Ltd., there were 26,144 companies that were 100 years old or older as of August last year. Of this number, 141 were established before 1603, when the Edo shogunate was formed.

Among the companies with long histories, 16,287, or 62.3 percent, have fewer than 10 employees, and 21,431, or 82 percent, have annual sales of less than ¥1 billion. These figures show that many of the companies with long histories are small enterprises.

By business category, the largest number of such firms are sake brewers at 707, followed by 613 office rental businesses and 596 firms selling alcoholic beverages.

Temple repair technology

NAGOYA—Nakamura Shaji Co. based in Ichinomiya, Aichi Prefecture, specializes in the construction of temples and shrines. The historical records of the company, which dates back to the Heian period (794-1192), say the Nakamura family moved from Kyoto in 970 and have been engaged in the construction of temples and shrines ever since.

The company has built and repaired a large number of temples and shrines in regions from Hokkaido down to Chugoku. Since 1954, the company started receiving orders for ferroconcrete building work.

In its peak year, the company’s sales exceeded ¥13 billion. However, it fell into a management crisis in 2006, chiefly due to the nation’s economic slump.

The company received assistance from Japan’s oldest company—Kongo Gumi Co., an Osaka-based company that is said to have been established in 578—and Nakamura Shaji shifted its main business to temple and shrine construction, making a fresh start in 2007.

Many temples and shrines have seen a decline in the number of their patron households, making it difficult for them to finance the costs of reconstructing or repairing their buildings.

Amid these circumstances, Nakamura Shaji tied up with Paleo Labo Co., a Saitama Prefecture-based company that measures the age of buildings using radioactive carbon dating, and began last year efforts to ascertain when temple buildings were last renovated.

The company’s services make it possible for the chief priests of temples not only to pass on the temples’ history to future generations, but also to make it easier to gain the understanding of patron households about the need to renovate their temple buildings.

Masayasu Kato, 51, executive operating officer of Nakamura Shaji, said the chief reason behind the company’s long history is “its ability to adapt to changes.” Its joint work using the most advanced science and technology is just one example.

Leader changes every 10 yrs

KAGOSHIMA—Hombo Shuzo Co., established in Kagoshima in 1872, is one of the leading breweries in Kagoshima Prefecture, the home of shochu distilled spirits.

Founder Matsuzaemon Hombo started a business to produce shochu using sweet potatoes, a local specialty. Hombo Shuzo is a core company of its group, which comprises more than 30 firms, including Satsuma Shuzo Co. and Hombo Shoten Co. Annual sales of the company, which has about 200 employees, are about ¥7 billion.

Current Chairman Osamu Hombo, who became the firm’s seventh president in 2003, introduced a president’s retirement age system and left the post after working for five terms, or 10 years.

His successor, Kazuto Hombo, 59, explained the aim of the retirement age system, saying, “If a president hands over the post to the next generation in about 10 years, this improves the metabolism of the company and keeps the president from regarding the company as his own property.”

Hombo said he regularly meets with the heads of the group companies. The company’s openness seems to be one of the keys to its longevity.

“We’ve refined our brewing technique, taking a long-term view without overexpanding the business,” he said. “We want to properly pass on the spirit of our ancestors.”