Kanematsu Corporation

views updated May 21 2018

Kanematsu Corporation

2-1, Shibaura 1-chome
Minato-ku, Tokyo 105
Japan
(03) 5440-8111
Fax: (03) 5440-6500

Public Company
Incorporated: 1967 as Kanematsu-Gosho Ltd.
Employees: 3,700
Sales: ¥5.85 trillion (US$43.08 billion)
Stock Exchanges: Tokyo Osaka Nagoya

Kanematsu was formed in April 1967 as Kanematsu-Gosho Ltd. in the merger of F. Kanematsu & Co., Ltd. and The Gosho Co., Ltd. Its name was changed to the Kanematsu Corporation as of January 1, 1990. Kanematsu Corporation is a sogo shosha, a general trading company, that conducts business in diversified import and export markets. Trading companies specialize in bringing together buyers and sellers of a variety of products and handling finance and transport of the resulting transaction. Kanematsu is one of the nine largest trading companies in Japan. Operating in 54 countries, it conducts trade operations in energy, foodstuffs, electronics, machinery, chemicals, textiles, precious metals, general merchandise, and construction, as well as product marketing and the development of advanced technology in the areas of biotechnology, precision metal casting, cable television, and value-added networks. In 1991 43% of sales was from chemicals and plastics, and energy; 27% was from iron and steel, and nonferrous metals; 12% was from textiles; 10% was from electronics, mechatronics, and construction and development; 6% was from foodstuffs and provisions; and 2% was from general merchandise. The company continually restructures its trading lines to keep up with changes in the world economy and shifting consumer demands in Japan.

F. Kanematsu & Co, Ltd. was established on August 15, 1889, by 44-year-old Fusijaro Kanematsu. With offices in Kobe, Japan, and a staff of seven persons, Kanematsu initially began trading operations in the Australian market. A branch office was set up in Sydney, Australia, in the following year; and a first shipment of 187 bales of Australian wool reached Japan. Trading operations expanded to include wheat, tallow, and other Australian products. In 1918 F. Kanematsu became reorganized as a joint-stock company. As Japan’s international trade grew dramatically during the early years of the 20th century, F. Kanematsu extended its operations into South Africa and South America. By 1936 it had opened U.S. branch offices in New York and in Seattle, Washington, and a subsidiary in New Zealand. The Kanematsu Trading Corporation, a U.S. subsidiary, was formed in New York in 1941. Much of the trading operations of the company was curtailed during World War II, and as a trading company F. Kanematsu had little to do during the war. Expansion resumed after the war, with Kanematsu New York Inc. being formed in 1951. To adjust itself to postwar economic conditions, F. Kanematsu shifted from its traditional trade in textiles to other areas, including the overseas construction of papermaking plants. In 1961 the shares of F. Kanematsu were sold to the public and the company was listed on the Osaka Stock Exchange.

The Gosho Co., Ltd. was formed by Yohei Kitagawa as Kitagawa & Co. Ltd. in 1891 in Yokahoma to engage in the import of cotton yarn. Offices subsequently were moved to Kobe and then to Osaka, where in 1905 it was organized as The Gosho Co., Ltd.; it underwent a reorganization into a joint-stock company in 1917. Direct importing of cotton began from the United States in 1906 and from India in 1907. Crawford Gosho Co., Ltd. and Gosho Corporation, U.S. subsidiaries, were formed in 1912 and 1918, respectively. Until the beginning of World War II, Gosho continued its international trading operations, with cotton as its most important product. Between 1935-1945, war years for Japan, Gosho withdrew from many international markets but continued to trade in raw materials. In 1943 it merged with Showa Cotton Co., Ltd. and Pacific Trading Co., Ltd. After World War II it began diversifying its business away from textiles. Gosho Trading Co., Ltd. was formed in Thailand in 1959.

With the 1967 merger of the two companies into Kanematsu-Gosho Ltd., the surviving firm moved into the top ranks of Japanese trading companies. By 1968 the new company had changed its internal organization into the present divisional structure. The head office was moved to Tokyo in 1970. Shares of the company’s stock were listed on the Tokyo and Nagoya stock exchanges in 1973. Sales for the fiscal year ended March 31, 1974, reached the ¥1 trillion for the first time. Subsidiary companies were formed in Canada in 1972, France in 1973, and Hong Kong in 1975; an office was opened in Beijing in 1979. The oil-price shocks of the 1970s caused difficulties for the company, as they did for much of the Japanese economy. Structural improvements and several long-range plans restored profitability by the end of the 1980s.

As with all Japanese trading companies, Kanematsu-Gosho continued to seek new investment opportunities throughout the world. In 1986, for example, it filled an order with the People’s Republic of China for ¥700 million worth of equipment for manufacturing semiconductors; in 1989 it took a 25% interest in a joint venture with Nishimbo Industries Inc. in constructing and operating the first cotton textile mill ever in California and also began participation in Kanebo Spinning Inc., a mill in Georgia. The company also became a player in world money markets when, in 1989, US$130 million in dollar-denominated bonds with stock options were sold in the European financial market, and 25 million shares of new stock were issued at prevailing market prices. In 1990, convertible notes worth SFr200 million were issued. Subsidiaries were formed in the United Kingdom in 1989, in Spain in 1990, and in Italy in 1991, with branch offices being opened in Bucharest, Warsaw, and Berlin in 1990. Also in 1990, Kanematsu-Gosho changed its name to Kanematsu Corporation. At the end of its 1990 fiscal year, the company continued trading and sales through a number of operating divisions.

The machinery division deals with a wide group of products such as industrial plants, power stations, telecommunications systems, factory automation systems, machine tools, pulp and paper machinery, textile machinery, construction machinery, banking machines, industrial sewing machines, aircraft, marine vessels, and automobiles. The division provides support services for the installation and financing of these products. During 1990, the division exported sewing machines, carbon rod processing equipment, and a motor factory to the Soviet Union; two chemical tankers to Taiwan; and a plywood plant to Indonesia. Its domestic sales included British-made fighter aircraft to the Japanese government, particleboard and power-generating plants, and a pulp-processing system. The division’s transportation machinery department exports Honda automobiles to several countries, including Yugoslavia and the Soviet Union.

The electronics division markets IBM computers and peripherals, telecommunications equipment, semiconductor devices and semiconductor-manufacturing equipment, liquid-crystal devices, and printed circuit boards. Its effort in these areas also emphasizes the creation of software for use in the products it sells for local area networks, computer-aided design, and computer-aided manufacturing. In a joint venture, the division built a printed-circuit board plant in France, which opened in 1990.

The energy division purchases and resells crude oil, petroleum products, liquefied petroleum gas, and other energy sources, mainly uranium and coal. As with most Japanese energy operations, petroleum operations are highly dependent on the shipments of crude from the countries whose supplies are controlled by the Organization of Petroleum Exporting Countries (OPEC). In 1990, the energy division planned to expand its operations in uranium and coal by purchasing interests in certain mines. It was also Kanematsu’s intention to join with other companies in the development of energy resources.

The general merchandise division is divided into the general merchandise department and the pulp and paper department. The products the former deals with include hides, skins, and leather products, while the latter handles pulp, wood chips, other raw materials used in making paper, and papermaking equipment. The lumber division imports wood products from Africa, southeast Asia, North America, the Soviet Union, China, and Chile, primarily for use in housing construction.

The textiles division, the oldest part of the company’s business, buys textile raw materials, yarns and fabrics, and finished products such as apparel and bedding. It operates a dress-shirt factory in Indonesia, a worsted-wool plant in Malaysia, and two mills in the United States. The foodstuffs and provisions division imports a variety of products including grain, rice oil, organic fertilizer, meat, nuts, coffee, alcoholic beverages, pet foods, and canned foods. It is the exclusive vendor in Japan of a number of wines and markets Lismore scotch whiskey.

The chemicals and plastics division deals in a variety of organic and inorganic materials, petrochemicals, and intermediate materials used for, among other products, pharmaceuticals, synthetic resins, and pulp additives. In 1989, when it was anticipated that the chemical industry would experience a period of growth, the company embarked on a program to raise the portion of its sales derived from this division by investing overseas and expanding its exports, with a goal of boosting the division’s revenues 150%. A furfuryl alcohol plant in Thailand began operation under a partnership arrangement in 1990. New areas of business begun in the early 1990s included materials used in electronics and plastics.

The iron and steel division, another of the company’s traditional areas of operation, provides raw materials for the steel industry and markets steel products. It operates a joint venture in the United States that produces steel cord for tires. The nonferrous metals division imports nonferrous ores and metals. It has an investment in a copper magnetic-wire plant in Indonesia. Plans were made to include involvement in gold trading. This division also acquired a diecast manufacturer, Diemakers Inc., in 1990.

The construction and development division is engaged in real estate sales, construction tenders, and sale of construction materials. With the steady growth of the Japanese economy, building construction will continue to be an expanding feature of the company’s operations. In the early 1990s the division had a contract to build a country club in Fukishma.

As the structure of the world economy continues to evolve, general trading companies such as Kanematsu must continue to develop new products to trade and new strategies for how those products will be marketed. In particular, they have had to adjust their offerings as the Japanese economy has become less reliant on exports, with the domestic market becoming increasingly important for total sales. To keep abreast of these changes, in 1987 Kanematsu formed a research-and-development division to investigate new products. In 1990, it established a “Ladies Life and Living” team, an all-woman marketing group with a responsibility for anticipating the product needs of women over the next decade.

The company had shifted the emphasis of its operations during the 1980s by importing more products into Japan. In 1982, imports accounted for 24% of total sales, compared to 44% in 1991. Other categories of operations adjusted accordingly, with exports remaining 15% of total sales, domestic sales falling from 51% in 1982 to 27% in 1991, and overseas sales growing from 10% to 14% during the period. With 115 subsidiaries and affiliates in Japan and 67 overseas, Kanematsu is a worldwide operation.

Principal Subsidiaries

Eagle West Pty. Ltd. (Australia); International Sewing Machines Pty Ltd. (Australia); Yokahama Tyre Australia Pty Ltd.; Frigorifico Yukijirushi do Parana S.A. (Brazil); Western Specialty Alloys Ltd. (Canada); Tianjin Kaida Transportation Service Co., Ltd. (China); ST Pretec S.A. (France); Ajioka (H.K.) Ltd. (Hong Kong); Fashion Crew (H.K.) Ltd. (Hong Kong); Hitachi Elevator Engineering Co., (HK) Ltd. (Hong Kong); K.G. International Petroleum Ltd. (Hong Kong); Nice Orient Limited (Hong Kong); Tin Sung Co., Ltd. (Hong Kong); P.T. Century Textile Industry (Indonesia); P.T. Flex Indonesia; P.T. Honda Prospect Engine MFG Inc. (Indonesia); P.T. Imora Honda Inc. (Indonesia); P.T. Metbelosa (Indonesia); P.T. Nasiodelta Electric (Indonesia); Kyungduk Industrial Co., Ltd. (Korea); G.P.K. Wood Products Sdn. Berhad (Malaysia); Karimoku (M) Sdn. Berhad (Malaysia); Malaysian Topmaking Mills Sdn. Berhad (Malaysia); Nankai Worsted Spinning (Malaysia) Sdn. Berhad; Perak Textile Mills Sdn. Berhad (Malaysia); Societe des Mines de Fer du Senegal Oriental; Pan Pacific Trans-Service Pte. Ltd. (Singapore); Southern Pacific Insurance Pte. Ltd. (Singapore); Chung Chi Leather Co., Ltd. (Taiwan); Song Cheng Enterprise Co., Ltd. (Taiwan); Auk Co., Ltd. (Thailand); Bangkok Metal Industry Co., Ltd. (Thailand); Boriboon Steel Industrial Co., Ltd. (Thailand); Hitachi Bangkok Cable Co., Ltd. (Thailand); Kobe Mig Wire (Thailand) Co., Ltd.; Mar Bin Trance-Service Co., Ltd. (Thailand); SKJ Metal Industries Co., Ltd. (Thailand); Summit Food Industries Co., Ltd. (Thailand); Thai-Kobe Welding Co., Ltd. (Thailand); Thai Kyowa Engineering & Construction Co., Ltd. (Thailand); KG International Trade & Finance Plc. (U.K.); CK Technologies, Inc. (U.S.A.); Diemakers Inc. (U.S.A.); Glory (U.S.A.) Inc.; Kanebo Spinning, Inc. (U.S.A.); KGK International Corp. (U.S.A.); Kokuku Steel Cord Corporation (U.S.A.); Necoa, Inc. (U.S.A.); Nisshinbo California Inc. (U.S.A.); Pan Pacific Yarn Inc. (U.S.A.); Technical Marketing Associates, Inc. (U.S.A.); KGK Corp.; Kanematsu Industrial Machinery Ltd.; Kyori Kogyo Co., Ltd.; Tahara Machinery Ltd.; Tokyo Engineering & Manufacturing Co., Ltd.; Kanematsu Aerospace Corporation; Nippon Pioneer Co., Ltd.; Nippon Sky lift Co., Ltd.; UNIX Corp.; Toto Pioneer Co., Ltd.; Business Links, Ltd.; Integrated Communication Systems Co., Ltd.; Japan ADE Ltd.; Kanematsu Duo-Fast Co., Ltd.; Kanematsu Electrical Products Sales Co., Ltd.; Kanematsu Electronics Ltd.; Kanematsu Electronic Components Corp.; Kanematsu Electronics Trading Co., Ltd.; Kanematsu Lex Electronics Inc.; Kanematsu Semiconductor Corp.; Memorex Telex Japan Ltd.; Nippon Office Systems Ltd.; Kanematsu Energy Corp.; Kanematsu Oil Tank Co., Ltd.; Kanematsu Sekiyu Gas Co., Ltd.; K.G.I. Limited; Nisseki Kanematsu Co., Ltd.; Toyo Kokusai Oil Co., Ltd.; Hokushin Co., Ltd.; Kanematsu Kaneka Co., Ltd.; Maruyone Trading Co., Ltd.; Morimoku Kaisha, Ltd.; Nissan Nohrin Kogyo Co., Ltd.; Kanematsu Rex Corp.; Taiga & Co., Ltd.; Kanematsu Top Co., Ltd.; Kanematsu Woolen Mills, Ltd.; Kaneyoshi Co., Ltd.; Kyushu Weaving Co., Ltd.; LB & Co., Ltd.; Mitsuru Co., Ltd.; Ono Rug Mills Ltd.; Schi Kraft Inc.; Shimada Sen-i Co., Ltd.; Showa Garments Manufacturing Co., Ltd.; Silver Shirts “Hayase” Co., Ltd.; S. Kamei Co., Ltd.; U Textiles Co., Ltd.; Kanematsu Liquor Co., Ltd.; Heisei Feed Manufacturing Co.; Kanematsu Food Corp.; Kanematsu Kanto Nosan Co., Ltd.; Kaoh Trading Co., Ltd.; Nippon Liquor Ltd.; Gospel Chemical Industry Ltd.; Kanematsu Chemicals Co., Ltd.; Kitaura Plastics Co., Ltd.; Eiwa Kinzoku Co., Ltd.; Iwaki Steel Center Ltd.; Kanematsu Trading Corporation; Kanematsu Tekko Hanbai Ltd.; KG Minerals Ltd.; Kyowa Steel Co., Ltd.; Kyushu Koki Co., Ltd.; SLB Corporation; Yachiyo Stainless Center Ltd.; Kanematsu Metals Ltd.; Shikoku Cable Co., Ltd.; Toei Crown Co., Ltd.; Kanematsu Toshikaihatsu Co., Ltd.; Tsuzuki Concrete Industrial Corp. Central Express Ltd.; Kanematsu Boeki Service Co., Ltd.; Kanematsu Finance Corporation; Kanematsu Personnel Service Inc.; KIT Ltd.; Kanematsu Computer Systems Ltd.; Kanematsu Kanzai Co., Ltd.; Beaux-Arts S.A.; Kanematsu Fashion Crew Co., Ltd.; Fukui Yamamoto Co., Ltd.; Gosen Co., Ltd.; Kamo Trico Co., Ltd.; Kanematsu Lancot Ltd.; Kanesen Co., Ltd.

Kanematsu Corporation

views updated Jun 27 2018

Kanematsu Corporation

2-1, Shibaura 1-chome
Minato-ku
Tokyo 105-05
Japan
(03) 5440-8111
Fax: (03) 5440-6504
Web site:http://www.kanematsu.co.jp

Public Company
Incorporated: 1967 as Kanematsu-Gosho Ltd.
Employees: 2,278
Sales: ¥3.48 trillion (US$28.02 billion) (1997)
Stock Exchanges: Tokyo Osaka Nagoya

SICs: 6799 Investors, Not Elsewhere Classified

Kanematsu Corporation was formed in April 1967 as Kanematsu-Gosho Ltd. in the merger of F. Kanematsu & Co., Ltd. and The Gosho Co., Ltd. Its name was changed to the Kanematsu Corporation on January 1, 1990. Kanematsu Corporation is a so go shosha, a general trading company, which conducts business in diversified import and export markets. Trading companies specialize in bringing together buyers and sellers of a variety of products and handling finance and transport of the resulting transaction. Kanematsu is one of the nine largest trading companies in Japan. In addition to its trading activities, however, Kanematsu is also active in a variety of other areas, including manufacturing, marketing, transportation, construction, and real estate development. Under its umbrella are about 230 subsidiaries and affiliates in more than 50 countries, with these operations organized into the following 13 divisions: machinery, electronics, textiles, foodstuffs/provisions, energy, chemicals/plastics, general merchandise, iron/ steel, construction/development, wood products/lumber, transportation, finance, and information systems. In 1997 energy and chemicals/plastics operations represented 32.6 percent of sales; machinery, electronics, and construction/development, 22.2 percent; iron/steel and nonferrous metals, 16.9 percent; textiles, 14 percent; foodstuffs/provisions, 10.9 percent; and general merchandise and wood products/lumber, 3.4 percent.

Early History

F. Kanematsu & Co., Ltd. was established on August 15, 1889, by 44-year-old Fusajiro Kanematsu. With offices in Kobe, Japan, and a staff of seven persons, Kanematsu initially began trading operations in the Australian market. A branch office was set up in Sydney, Australia, in the following year; and a first shipment of 187 bales of Australian wool reached Japan. Trading operations expanded to include wheat, tallow, and other Australian products. In 1918 F. Kanematsu reorganized as a joint-stock company. As Japan’s international trade grew dramatically during the early years of the 20th century, F. Kanematsu extended its operations into South Africa and South America. By 1936 it had opened U.S. branch offices in New York and in Seattle, Washington, and a subsidiary in New Zealand. The Kanematsu Trading Corporation, a U.S. subsidiary, was formed in New York in 1941. Much of the trading operations of the company were curtailed during World War II, and as a trading company F. Kanematsu had little to do during the war. Expansion resumed after the war, with Kanematsu New York Inc. being formed in 1951. To adjust itself to postwar economic conditions, F. Kanematsu shifted from its traditional trade in textiles to other areas, including the overseas construction of papermaking plants. In 1961 the shares of F. Kanematsu were sold to the public and the company was listed on the Osaka Stock Exchange.

The Gosho Co., Ltd. was formed by Yohei Kitagawa as Kitagawa & Co. Ltd. in 1891 in Yokohama to engage in the import of cotton yarn. Offices subsequently were moved to Kobe and then to Osaka, where in 1905 it was organized as The Gosho Co., Ltd.; it underwent a reorganization into a joint-stock company in 1917. Direct importing of cotton began from the United States in 1906 and from India in 1907. Crawford Gosho Co., Ltd. and Gosho Corporation, U.S. subsidiaries, were formed in 1912 and 1918, respectively. Until the beginning of World War II, Gosho continued its international trading operations, with cotton as its most important product. From 1935 to 1945, war years for Japan, Gosho withdrew from many international markets but continued to trade in raw materials. In 1943 it merged with Showa Cotton Co., Ltd. and Pacific Trading Co., Ltd. After World War II it began diversifying its business away from textiles. Gosho Trading Co., Ltd. was formed in Thailand in 1959.

1967 Merger Formed Kanematsu-Gosho

With the 1967 merger of the two companies into Kanematsu-Gosho Ltd., the surviving firm moved into the top ranks of Japanese trading companies. By 1968 the new company had changed its internal organization into the present divisional structure. The head office was moved to Tokyo in 1970. Shares of the company’s stock were listed on the Tokyo and Nagoya stock exchanges in 1973. Sales for the fiscal year ended March 31, 1974, reached ¥1 trillion for the first time. Subsidiary companies were formed in Canada in 1972, France in 1973, and Hong Kong in 1975; an office was opened in Beijing in 1979. The oil-price shocks of the 1970s caused difficulties for the company, as they did for much of the Japanese economy. Structural improvements and several long-range plans restored profitability by the end of the 1980s.

As with all Japanese trading companies, Kanematsu-Gosho continued to seek new investment opportunities throughout the world. In 1986, for example, it filled an order with the People’s Republic of China for ¥700 million worth of equipment for manufacturing semiconductors; in 1989 it took a 25 percent interest in a joint venture with Nishimbo Industries Inc. in constructing and operating the first cotton textile mill ever in California and also began participation in Kanebo Spinning Inc., a mill in Georgia. The company also became a player in world money markets when, in 1989, US$130 million in dollar-denominated bonds with stock options were sold in the European financial market, and 25 million shares of new stock were issued at prevailing market prices. In 1990, convertible notes worth SFr 200 million were issued. Subsidiaries were formed in the United Kingdom in 1989, in Spain in 1990, and in Italy in 1991, with branch offices being opened in Bucharest, Warsaw, and Berlin in 1990. Also in 1990, Kanematsu-Gosho changed its name to Kanematsu Corporation. In 1991 the Kanematsu (Europe) Corporation was created and given general control over European operations.

As the structure of the world economy continued to evolve, general trading companies such as Kanematsu had to continue to develop new products to trade and new strategies for how to market those products. In particular, they had to adjust their offerings as the Japanese economy became less reliant on exports, with the domestic market becoming increasingly important for total sales. To keep abreast of these changes, in 1987 Kanematsu formed a research-and-development division to investigate new products. In 1990, it established a “Ladies Life and Living” team, an all-woman marketing group with a responsibility for anticipating the product needs of women over the next decade.

The company shifted the emphasis of its operations during the 1980s by importing more products into Japan. In 1982 imports accounted for 24 percent of total sales, compared to 44 percent in 1991. Other categories of operations adjusted accordingly, with exports remaining 15 percent of total sales, domestic sales falling from 51 percent in 1982 to 27 percent in 1991, and overseas sales growing from 10 percent to 14 percent during the period.

Difficult 1990s

The bursting of the late 1980s Japanese economic bubble led to prolonged difficulties for Kanematsu in the 1990s. Nearly all of the sogo shosha had diversified aggressively into financial investments during the speculative bubble years, in large part because their traditional activity of marginally profitable commodity trading had been in a deep decline for years; in desperation the companies built large stock portfolios and became hooked on the revenues they could gain through arbitrage (or zaiteku, as it is known in Japan). Once the bubble burst, the sogo shosha were left with huge portfolios whose worth had plummeted; all of the trading companies were forced to eventually liquidate much of their stock holdings. Unlike some of the larger trading companies, Kanematsu could not afford to quickly liquidate all of the bad investments it had made in the late 1980s; it had to do so gradually, writing some off in 1993 and 1994, the rest in 1997, when the write-offs—and the liquidation of 10 loss-making affiliates—led to an overall net loss of ¥27.53 billion (US$221 million). This poor performance had followed net losses of ¥6.46 billion in 1994 and ¥15.2 billion in 1995. Kanematsu, like all of the sogo shosha, also felt a prolonged effect from its involvement in arbitrage in the form of damage to the company’s financial credibility, leading to higher borrowing rates.

During the 1990s, with the Japanese economy in a lengthy recession, Kanematsu expanded aggressively in Asia, establishing numerous subsidiaries, affiliates, and joint ventures, particularly in China, Indonesia, Malaysia, Thailand, and Vietnam. By 1997 the company had 44 projects operational in China alone, where it established a Shanghai-based subsidiary in July 1996 to increase its internal trading activities within China. The following year Kanematsu created a Shanghai-based holding company to coordinate and support all of the company’s operations in the burgeoning market that China had become.

During this period Kanematsu also placed an increasing emphasis on such high-tech areas as electronics, communications, and information technologies. For example, in December 1996 the company entered into a ¥1.8 billion contract to expand the rural telecommunications network of Nepal Telecommunications Corporation. In April 1996 Kanematsu established with a U.S. partner a U.S.-based joint venture called Extel Semiconductor Corp. to manufacture application-specific integrated circuit chips. In June 1996 Kanematsu acquired the Asia-Pacific operations of Memorex Telex N.V. for US$25 million; Memorex Telex sold automatic tape libraries and network-related equipment and offered systems integration services.

As yet another bubble burst with the outbreak of the Asian financial crisis in 1997, Kanematsu faced the possibility of a repeat of its difficulties stemming from the Japanese economic troubles of the late 1980s and early 1990s since it had grown rapidly in some of the most troubled economies: Indonesia, Korea, and Malaysia. Currency devaluations were already cutting into demand in southeast Asia by late 1997 and in turn hurting the profitability of most Japanese trading companies. Kanematsu was known for continually restructuring its activities to keep pace with world economic changes and it would have to do so again in order to survive this latest crisis threatening to undermine it.

Principal Subsidiaries

MACHINERY: Guangzhou Showa Shock Absorber Co., Ltd. (China); Hangzhou Kangqiao Automobile Service Co., Ltd. (China); Sanyo Electric Home Appliances (Suzhou) Co., Ltd. (China); Sichuan Ningjiang Showa Shock Absorber Co., Ltd. (China); Suzhou Sanyo Electro-Mechanical Co., Ltd. (China); Tianjin Kaida Transportation Service Co., Ltd. (China); Kanematsu Project Development Co., Ltd. (Hong Kong); Tanashin (Europe) GmbH (Germany); Distribuidora De Vehiculos (Guatamala); P.T. Honda Prospect Engine MFC Inc. (Indonesia); P.T. Imora Honda Inc. (Indonesia); P.T. Metbelosa (Indonesia); ARIES Motor Ltd. (Poland); ARIES Power Equipment Ltd. (Poland); Carpati Motor Ltd. (Romania); Showa Aluminum (Thailand) Co., Ltd.; Thai Refrigeration Components Co., Ltd. (Thailand); FCC (Europe) Ltd. (U.K.); KGK International Corp. (U.S.A.); Transportation Facilities Equipment Engineering Distribution and Leasing Co. (Vietnam); Vietindo Daihatsu Automotive Corp. (Vietnam); Daifuku Co., Ltd.; Kanematsu Industrial Machinery Ltd.; Kanematsu Techno Corporation; Kanematsu-Usic Co.; Kyori Kogyo Co., Ltd.; Nippon Pioneer Co., Ltd.; Nippon Sky Co., Ltd.; Nippon U.S. Machinery Co., Ltd.; Paneltec Corporation; Pioneer Work Co., Ltd.; Tahara Machinery Ltd.; Tokyo Engineering & Manufacturing Co., Ltd. ELECTRONICS: Chu’s F.C.C. (Shanghai) Co., Ltd. (China); Glory GmbH (Germany); Yamato Europe GmbH (Germany); KM Aspac Pte. Ltd. (Singapore); Powerchip Semiconductor Corp. (Taiwan); Kanematsu Controls Ltd. (U.K.); Glory (U.S.A.) Inc.; KG Aerospace International, Inc. (U.S.A.); Business Links, Ltd.; Integrated Communication Systems Co., Ltd.; Kanematsu Aerospace Corp.; Kanematsu Design Technology Corporation; Kanematsu Electrical Products Sales Co., Ltd.; Kanematsu Electronic Components Corp.; Kanematsu Electronics Ltd.; Kanematsu Electronics Trading Co., Ltd.; Kanematsu Medical Systems Corporation; Kanematsu MultiTech Corporation; Kanematsu-NNK Corporation Duo-Fast Division; Kanematsu Semiconductor Corp.; Memorex Telex Japan Ltd.; Nippon Office Systems Ltd.; Ryosho Electronics Corporation. TEXTILES: Fischer GmbH (Austria); Nantong Sunrise Worsted Spinning Co., Ltd. (China); Shanghai Chugaikunishima Worsted Mills Co., Ltd. (China); Shanghai Jinshan Otsu Woollen Textile Co., Ltd. (China); Shanghai Takaya Fashion Co., Ltd. (China); Zhejiang Zengsong Textile Co., Ltd. (China); Familia Sewing Co., Ltd. (Hong Kong); Fashion Crew (H.K.) Ltd. (Hong Kong); KRK (HK) Ltd. (Hong Kong); P.T. Century Textile Industry (Indonesia); P.T. Flex Indonesia; P.T. Nikawa Textile Industry (Indonesia); Malaysian Topmaking Mills Sdn. Bhd. (Malaysia); Nankai Worsted Spinning (Malaysia) Sdn. Bhd.; Perak Textile Mills Sdn. Bhd. (Malaysia); Toyobo Textile (Malaysia) Sdn. Bhd.; Ascott International Co., Ltd. (Thailand); Artemis Fashion Corp. (U.S.A.); Kanebo Spinning, Inc. (U.S.A.); Nisshinbo California Inc. (U.S.A.); Pan Pacific Yarn, Inc. (U.S.A.); Technical Marketing Associates, Inc. (U.S.A.); Club Monaco Japan Inc.; Fukui Yamamoto Co., Ltd.; Gosen Co., Ltd.; Kamo Trico Co., Ltd.; Kanematsu Apparel Ltd.; Kanematsu Fashion Crew Co., Ltd.; Kanematsu Lancot Ltd.; Kanematsu Textile Co., Ltd.; Kanematsu Top Co., Ltd.; Kanematsu Woolen Mills, Ltd.; Kanesen Co., Ltd.; Kanewa Apparel Corporation; Kane Wool Corporation; Kaneyoshi Co., Ltd.; KG Garment Supply Co., Ltd.; LB & Co., Ltd.; Masatomo Inc.; Mitsuru Co., Ltd.; Mode Brain Co., Ltd.; Ohno Inc.; Schi Kraft Inc.; Showa Kraft Inc.; Showa Garments Manufacturing Co., Ltd.; Silver Shirts Manufacturing Co., Ltd.; S. Kamei Co., Ltd.; S.T. Studio Co., Ltd.; U Textiles Co., Ltd. FOODSTUFFS & PROVISIONS: Feng Ling Corporation (China); Summit Food Industries Co., Ltd. (Thailand); Hai Viet Company Limited (Vietnam); Akechi Genetics, Inc.; Heisei Feed Manufacturing Co.; Kanematsu Agri-Tech Corporation; Kanematsu Food Corporation; Kanematsu Fruit Corporation; Nippon Liquor Ltd.; Toraube Ltd. ENERGY: Metropolitan Collieries Ltd. (Australia); K.G. International Petroleum Limited (Hong Kong); Grey mouth Coal Ltd. (New Zealand); Kanematsu Oil Singapore Pte. Ltd.; Kanematsu Sekiyu Gas Co., Ltd.; Kanematsu Sekiyu Hanbai Co., Ltd.; Kanematsu Yuso Co., Ltd.; KG Babo Petroleum Ltd.; KG Berau Petroleum Ltd.; K.G.I., Limited; KG Kalosi Petroleum Ltd.; KG Wiriagar Petroleum Ltd.; Nisseki Kanematsu Co., Ltd.; Toyo Kokusai Oil Co., Ltd.; UNIX Corporation. CHEMICALS & PLASTICS: Prestige Tyre Center Pty Ltd. (Australia); Yokahama Tyre Australia Pty Ltd.; P.T. Idopherin Jay a (Indonesia); P.T. Java Tohoku Industries (Indonesia); Sanshu-KG (Malaysia) Sdn. Bhd.; Bangkok Polyester Co., Ltd. (Thailand); Gospel Chemical Industry Ltd.; Hanna Plastics Co., Ltd.; Hokuetsu Kasei Co., Ltd.; Kanematsu Chemicals Co., Ltd.; Kanematsu Plastics Company, Ltd.; Kanematsu Wellness Co., Ltd.; Kitaura Plastics Co., Ltd.; Rensoru Co., Ltd. NONFERROUS METALS: Nanjing UBE Magnesium Co., Ltd. (China); P.T. Istana Kanematsu Indonesia; Bangkok Metal Industry Co., Ltd. (Thailand); Hitachi Bangkok Cable Co., Ltd. (Thailand); Thai Kakinuma Co., Ltd. (Thailand); Thai Kikuwa Industry Co., Ltd. (Thailand); Thai Kyowa Engineering & Construction Co., Ltd. (Thailand); Diemakers, Ltd. (U.K.); Diemakers Inc. (U.S.A.); Hibino Corp. of America (U.S.A.); Necoa, Inc. (U.S.A.); Kanematsu Metals Ltd.; Shikoku Cable Co., Ltd.; Technic Japan Inc. GENERAL MERCHANDISE: Chung Chi Leather Co., Ltd. (Taiwan); West Bay Resources Inc. (U.S.A.); Kanematsu Kaneka Co., Ltd.; Kanematsu Rex Corporation. IRON & STEEL: Kanematsu Hoplee Co., Ltd. (Hong Kong); P.T. Emperor Steel Corp. (Indonesia); P.T. Little Giant Steel Corp. (Indonesia); P.T. Maspion Stainless Steel Indonesia; P.T. NAR Stainless Steel Center (Indonesia); Ryoma Steel Sdn. Bhd. (Malaysia); Kobe Mig Wire (Thailand) Co., Ltd.; SKJ Metal Industries Co., Ltd. (Thailand); Thai-Kobe Welding Co., Ltd. (Thailand); KG Specialty Steel, Inc. (U.S.A.); Eiwa Kinzoku Co., Ltd.; Iwaki Steel Center Ltd.; Kanematsu Tekko Hanbai Co., Ltd.; Kanematsu Trading Corporation; Kyowa Steel Co., Ltd.; Kyushu Koki Co., Ltd.; Lanxide K.K.; Nikko Boeki Kaisha Ltd.; World Beam Co., Ltd.; Yachiyo Stainless Center Ltd. CONSTRUCTION & DEVELOPMENT: P.T. Gunung Geulis Sentra Rekreasi (Indonesia); P.T. Mulia Colliman International (Indonesia); Daklak-Japan Properties Ltd. (Vietnam); Aso Country Club; Bizen Country Club; Kanematsu Construction Materials Ltd.; Kanematsu Environment Corporation; Kanematsu E-VALUED Homes Corporation; Kanematsu Housing Ltd.; Kanematsu Toshikaihatsu Co., Ltd.; KR Estate Ltd.; Tsuzuki Concrete Industrial Corp. LUMBER & WOOD PRODUCTS: Forestal Peteroa Ltda. (Chile); KG-Inversiones (Chile) S.A.; Productos Forestales Kamapu Ltda. (Chile); G.P.K. Wood Products Sdn. Bhd. (Malaysia); Karimoku (M) Sdn. Bhd. (Malaysia); Pana Home Tech (M) Sdn. Bhd. (Malaysia); Hokushin Co., Ltd.; Kanematsu-NNK Corporation; Maruyone Trading Co., Ltd.; Morimoku Kaisha, Ltd. TRANSPORTATION: Dalian Shunda Logistic Services Corporation (China); P.T. Dunia Express Transindo (Indonesia); Pan Pacific Trans-Service Pte. Ltd. (Singapore); Southern Pacific Insurance Pte. Ltd. (Singapore); Mar Bin Trans-Service Co., Ltd. (Thailand); Central Air & Sea Service (U.S.A.) Inc.; Vietnam-Japan International Transport Co., Ltd. (Vietnam); Central Express Ltd.; Indochina Trans-Service Co., Ltd.; Japan Logistics Co., Ltd.; Kanematsu Boeki Service Co., Ltd.; KIT Ltd. FINANCE: KG International Trade & Finance Pic. (U.K.); Kanematsu Finance Corporation. OTHERS: ADEPT Corporation; Kanematsu Computer Systems Ltd.; Kanematsu Kanzai Co., Ltd.; Kanematsu Personnel Service Inc.

Principal Divisions

Machinery; Electronics; Textiles; Foodstuffs & Provisions; Energy; Chemicals & Plastics; General Merchandise; Iron & Steel; Construction & Development; Lumber & Wood Products; Transportation; Finance; Information Systems.