BookTitleToyota Tsusho 70-Year History

Summary

Toyota Tsusho 70-Year History

Chapter 1Mergers with Kasho Co., Ltd., and TomenCorp.Section 1 Merging with Kasho Co., Ltd.1 History of Kasho Co., Ltd.Shoichi Ishikawa worked as the Tokyo branch managerof Kato Shokai, a trading company based in Nagoya.He took the opportunity to branch out on his own whenthe Tokyo Branch office of Kato Shokai was completelydestroyed by fire in the 1923 Great Kanto Earthquake.He launched Kato Shogyo in Nihonbashi-ku, Tokyoin November 1923, and the firm would become thepredecessor of Kasho Co., Ltd.In 1924, Kato Shogyo established an operationsbase in Singapore, already a major commercial districtin Southeast Asia, to engage in the rubber and otherbusinesses. Ishikawa subsequently changed the companyname, in 1928, to Kasho Co., Ltd.After struggling through hardships like the ShowaDepression and the Sino-Japanese and Pacific Wars, thecompany worked to expand its network beyond SoutheastAsia to North America’s West Coast and into China. Ithandled primarily agricultural products, rubber products,and food products such as black tea and sweets, as wellas chemical products. In the meantime, its consistentefforts to modernize and streamline its management ledto the company achieving a listing on the First Sectionof the Tokyo Stock Exchange in 1977. But the enterprisewas badly impacted by the unanticipated bursting of thestock price bubble and at the mercy of the severe 1990sbusiness environment, found itself scrambling for a wayforward.2 Business Alliance with KashoIt was May 1999 when Toyota Tsusho Corporationannounced a business alliance with Kasho Co., Ltd., ageneral trading company primarily dealing in foodstuffs,rubber, chemicals, pulp and paper. This alliance wasexpected to bolster both firms’operations and promotetheir growth with almost no product competition orrivalry among vendors, as it leveraged suppliers, salesterritories, and information to mutually benefit eachmember of the alliance.Automobiles, steel, machinery, and nonferrous metalsaccounted for 80% of Toyota Tsusho’s sales at the time.But Toyota Tsusho was beset by issues in businessstructure that resulted in weakness in much its lifestyleoperations such as food, rubber, chemicals, and pulp andpaper. Aligning its business with a partner like Kasho wasdetermined to be the optimal move for Toyota Tsusho’sefforts to diversify and become a more comprehensivecompany. Accordingly, in June 1999, Toyota Tsushodispatched directors and audit and supervisory boardmembers to Kasho, making an equity capital investmentamounting to 18.2% of Kasho’s total number of issuedshares.3 Merging with KashoA year later, in 2000, Toyota Tsusho merged withFormer Kato Shokai building (Naka-ku, Nagoya-shi)Photo: Yomiuri Shimbun/AfloSigning ceremony for business partnership with Kasho Co., Ltd. (1999)120