Okura & Co., Ltd.

views updated

Okura & Co., Ltd.

3-6, Ginza 2-chome
Chuo-ko, Tokyo 104
Japan
(03) 3566-6000
Fax: (03) 3535-2551

Public Company
Incorporated: 1873 as Okura-gumi
Employees: 1,036
Sales: ¥518.60 billion (US$3.82 billion)
Stock Exchanges: New York Tokyo

Okura & Co., Ltd. is a highly diversified company whose specialities include construction and the handling, supplying, and servicing of machinery and metal products for the iron and steel industries in Japan and abroad. Okura has become a leading international trader in food and foodstuffs, and has become increasingly involved in aerospace, electronics, and biotechnology. The company was the first independent Japanese company to establish a branch abroad, in London in 1874. Indeed, Okura became Asia’s pioneer in the machinery business; since the 1920s, it has played a major role in the founding and development of India’s iron and steel industry, and is still one of India’s chief exporters of iron ore. Okura also was involved significantly with Japan’s postwar industrial recovery, importing crucial industrial equipment and technologies from abroad to lay the basis for that recovery. Okura introduced television to Japan in 1953.

The history of Okura is largely the history of its founder, Kihachiro Okura, born in Niigata Prefecture in 1837. He would be a witness to Japan’s wrenching transformation from a remote, medieval, and largely illiterate society to a modern, industrial, and Westernized country, all within a few decades. Times were still turbulent after the historic Meiji Restoration of 1868, although rich in business opportunities, since the Japanese government of technocrats was committed to the country’s breakneck modernization. Kihachiro Okura would become a pioneer in Japan’s transition to modern times. His first enterprise, a gun shop, was outstandingly successful, in no small part due to the insecurity of the times and the rapid expansion and modernization of the Japanese military, with which Okura would have increasingly close and profitable connections. Japanese rage for Western ways, including apparel and drink, encouraged Okura to expand into the beer-brewing business, yet another success story. In handling malt, grains, and hops, Okura quickly diversified, supplying and trading on a wide scale feed, flour, beans, and vegetable oils, in addition to cattle and poultry, thus laying the basis of post-World War II Okura’s international trade in foodstuffs.

By 1873, Kihachiro Okura had amassed the capital to establish his business, Okura-gumi, in the heart of Tokyo’s newly emerging commercial district, the Ginza, which 25 years later, his company would electrify with the help of imported electric power generators from Germany’s AEG. Okura saw the value of overseas trade and of the import business. No sooner was his own business installed in the Ginza than he proceeded, in 1874, to open a branch in London, to be followed shortly afterward by an office in New York City, which by the end of the 19th century would handle all sorts of business. Indeed, the company made its presence felt throughout Japan, as Kihachiro Okura’s financial, political, and military connections led to investment and expansion into a wide array of highly profitable enterprises. Westerners had no sooner introduced the first railroads to Japan than Okura began to play a major role in their building, which necessitated expansion into the construction industry as well as iron and steel production, the backbone of 19th-century heavy industry. By the turn of the century, Okura was already a leader in Japan’s international trade, arranging the import of Western technologies and machinery for Japan’s rapidly growing heavy industry.

In 1895, with Japan’s first major military showdown with a foreign power, China, Okura’s contributions in supplying the armed forces with munitions were recognized by the government, which gave him the title of baron. Hence war would become a boon to Baron Okura’s business, strengthening his ties with the government, assuring his success in munitions manufacturing, and allowing him to play a leading role in Japanese financial dealings in Manchuria—where Okura obtained the right to establish the profitable manufacturing joint venture, the Benxi Iron and Steel Corporation—and to develop other natural resources in Asia, as well as financing businesses in Korea and China.

By 1910, Okura was a leading Japanese importer of German power generators and equipment; was involved heavily in steel manufacturing and marine and fire insurance; and was trading in automobiles, rolling stock for railways, and leather goods. Within Japan, Okura was also becoming a major financier of other Japanese ventures including Tokyo Electric Power Company, Inc. and the Imperial Hotel. In 1918, Okura founded the Okura Commercial School (now Tokyo University of Economics) and in the same year, organized his company into a huge industrial complex, or zaibatsu, led by Okura-gumi and including such subsidiaries as Okura Public Works Company and the Okura Mining Company. After World War I, communications would become an increasingly promising field, and the Okura zaibatsu became responsible for introducing into Japan the first high-powered radio-broadcasting network and producing Japan’s first radio sets, laying the foundation for one of the company’s important post-World War II businesses. The death of Kihachiro Okura in 1928, at the age of 91, did not slow the company’s progress.

The Okura zaibatsu paid a high price for its involvement with the government and for its connections to the military. After World War II, Japan and Japanese industry lay in ruins, while the Allied occupation authorities set forth with determination to break up Japanese Zaibatsu, including Okura—which, under new leadership, would rename itself Okura & Co., Ltd. The Korean War, beginning in 1950, provided the necessary boost to Japanese industry, and Okura found itself once more benefiting from war and its demands. Traditionally strong in heavy industry, international trade, and foodstuffs, the company forged ahead. Once more the company took upon itself the role it had adopted in the late 19th century: an importer of Western technologies and machineries to enable Japanese industry to recover. Already strong as a supplier to the iron and steel industries, Okura & Co. in 1964 merged with Kishimoto Shoten Co., Ltd., a steel-trading enterprise, to become even more heavily involved in the steel industry, as both a promoter of steel products and a major supplier of raw materials to the steel industry, in Japan and abroad.

Machinery and precision machine tools for heavy industry still form the backbone of Okura, but so do supplying oil-field drilling equipment, machinery for power generators, chemicals, and food-processing plants. Okura also supplies industrial robots to Japanese and foreign industries, as well as remote satellite equipment to the National Space Development Agency and advanced electronics systems to the Defense Agency. Okura and its subsidiaries and affiliates are developing lighter, more efficient materials for textile and manufacturing industries and materials for the electronics industry. Okura also has become increasingly involved in the transportation industry, supplying Japanese and foreign transportation enterprises with ships, airplanes, cars, motorcycles, helicopters, and planes.

While 49% of Okura’s business transactions are domestic, more than half are in exports and imports; 38% of Okura’s business is still in metals and 36% in machinery and construction, while 15% of its business continues to be food and feed. Through its associates in Europe, Asia, and Latin America, the company is developing new capacities for seafood and other food production. In 1990, Okura & Co. America, Inc., headquartered in New York City, and its Chicago partners formed a new company, MetalPro, Inc., to provide processing services to the metals industry in the United States. Okura also has been involved with China in its attempts to modernize, endeavoring, for example, to provide markets for Chinese agricultural products and seafood. The company also is helping to finance and develop Shanghai’s infrastructure. With one foot firmly rooted in the past—namely heavy industry, iron and steel production—and one firmly planted in the future-electronics and telecommunications—Okura is well poised to advance.

Principal Subsidiaries

Okura Aerospace Co., Ltd.; Okura Engineering Co., Ltd.; Okura Intex Co., Ltd; Seiritsu Engineering Co., Ltd.; Seiritsu Kogyo Co., Ltd.; Okura Electronics Co., Ltd.; Okura Gleason Asia Co., Ltd.; Okura Machine Service Co., Ltd; Okura Tools Co., Ltd.; Okura Industrial Co., Ltd.; Okura Electronics Service Co., Ltd.; USX Technology (Japan), Ltd.; Okura Mechatrotech & Co., Ltd.; Okura Metal Co., Ltd.; Imabari Steel Center Co., Ltd.; lke-gami Shearing Co., Ltd.; Japan Icos Co., Ltd.; E.D.S. Okura & Co., Ltd.; Okura Chemicals Co., Ltd.; Okura Sports Co., Ltd.; Okura Petroleum Co., Ltd.; Okura Hide and Protein Inc.; Okura Food Sales Co., Ltd.; Kusano Meat Sales Co., Ltd.; Sanyo Co., Ltd.; Okura Home Co., Ltd.; Okura Home Component Co., Ltd.; Okura Forest Products Co., Ltd.; Clarks Japan Co., Ltd.; Okura Creative Co., Ltd.; Okura Personnel Co., Ltd.; Okura Finance Co., Ltd.