Chemical capacity that earns its capital

I am the president and chief executive of Hatsuseki Chemical Co., Ltd., a fictional manufacturer listed on the Prime Market of the Tokyo Stock Exchange. We make high-purity acids, etchants and cleaning chemicals that semiconductor fabs use by the tanker-load, and heat-resistant epoxy resins that become the laminates inside circuit boards and package substrates. In the year to March 2026 we reported net sales of ¥271.4 billion and operating income of ¥25.8 billion, with 6,320 colleagues in Japan, Taiwan, South Korea, Thailand and, since this summer, Arizona.

I joined Hatsuseki in 1989 as a process engineer at the Toyama works, where my grandfather and father had both worked on the electrolysis cells that founded the company. I spent fourteen years at Toyama, seven running or helping to run our Yonezawa plant, five in corporate planning in Tokyo and four as president of our Taiwanese subsidiary before leading the Electronic Materials business and, from June 2022, the company. My two predecessors were also promoted from inside, and each chose the man who followed him. I am trying to make sure the next president is chosen more openly than any of us were.

My first four years as president have been an argument about capital and candour. When I took over, our shares traded at about 0.6 times book value, return on equity was 4.4 per cent and we held stakes in 41 listed companies for reasons nobody could fully explain. Four months in, an employee reported that inspection certificates for two resin grades had been altered for years. We told our customers and the market within a week. Since then we have sold most of our cross-held shares, answered an activist investor at a contested general meeting and sold control of the chlor-alkali business my family helped to build.

Current focus

I am watching the first months of supply from our Arizona plant, which began shipping to a customer's fab in August 2026, and supporting the nomination advisory committee as it narrows eleven internal candidates and two external ones towards a successor who should take over at the June 2028 general meeting.

Conversations I welcome

I intend to remain president until June 2028 and then leave our board altogether. With my board's consent I would consider one independent outside directorship at a Japanese listed manufacturer outside chemicals and semiconductors from 2027, and perhaps two after I retire. I accept a small number of invitations to speak to directors and investors about capital policy and quality governance.