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Orix Corporation is Japan's largest general leasing firm. The company began as a Japanese-American joint venture in the mid-1960s, and helped introduce Japanese business to the idea of leasing its equipment instead of owning it. Now a multinational corporation, Orix leases computers, office equipment, cars, trucks, ships, and jumbo jets to businesses across Asia, Europe, and the United States, and also offers loans, direct financing leases, installment sales, and consumer credit.
In 1964 Nichimen Company (now Nichimen Corporation) and the United States Leasing Corporation established the Orient Leasing Company (OLC) in Osaka. Backed by the Sanwa Bank the company began with an initial capital of ¥100 million. At this time, leasing was very new in Japan. Growth was slow throughout the 1960s as Japanese business adjusted to the idea.
OLC spent much of the 1970s establishing itself throughout Asia, developing a pattern of growth either through ties with well-established local businesses or through heavy investment in local companies.
In 1970, OLC was listed on the second section of the Osaka Stock Exchange; by 1973 it was on the first section in Tokyo, Osaka and Nagoya. The following year, the company established its first wholly-owned subsidiary, Orient Leasing (Asia), in Hong Kong. The subsidiary handles mortgage loans, finances in multiple currencies, and leases major items like ships and planes.
In 1972, OLC established its first major subsidiary in Japan, Orient Leasing Interior Company. That same year, Orient Leasing established the Korea Development Leasing Corporation and Orient Leasing Singapore, which leases vehicles, machinery, furniture, medical and dental equipment, and vessels. In 1973, OLC entered Malaysia; in 1975, Indonesia; in 1977, the Philippines; in 1978, Thailand. OLC also established subsidiaries in South America during the 1970s, entering Brazil in 1973 and Chile in 1977.
Orient Leasing began to lease commercial aircraft in 1978, when the company purchased a DC10 from McDonnell Douglas and two Boeing 747 passenger jets for lease to Korean Air Lines. The company purchased another aircraft in the same deal for lease to Thai Airways International. This deal, part of a joint venture with Nippon Shinpan Company, came at a time when American aircraft manufacturers were complaining that limited export funding was making it difficult for them to compete internationally. According to The Wall Street Journal, the purchases were arranged in an effort to show genuine Japanese concern for reducing its trade surplus. Later in 1978, OLC purchased two wide-bodied airbuses with C. Itoh & Company for lease to Greece's Olympic Airways.
While Orient Leasing spent the 1970s establishing itself in Asia, the 1980s were a time of expansion in the United States, Europe, and China, one still untapped Asian market. OLC brought leasing to a developing China in 1981. In partnership with two Chinese companies, China International Trust and Investment Corporation and Beijing Machinery and Equipment Corporation, OLC founded the China Orient Leasing Company. Leasing in China boomed in the following years, as state-owned enterprises demanded machinery for their outdated factories. In 1984, China Orient Leasing Company wrote $40 million in contracts, three times the amount it had written just two years earlier, for equipment as varied as plant machinery, film development equipment, and printing presses.
In 1982 Orient Leasing opened a representative office in Greece, and in 1983 the company established Orient Leasing (U.K.) in London, its first step toward an independent presence in Europe. Growth continued in 1986 with the establishment of Lombard Orient Leasing Ltd., a partnership between OLC and Lombard North Central, the largest finance company in the United Kingdom. In 1988, OLC expanded further into Europe when it made an agreement to form a leasing company in Spain to lease Japanese computers and office equipment.
In America, OLC set up Orient Leasing USA Corporation in 1981 and Orient-U.S. Leasing Corporation in 1982. In the late 1980s, OLC began to diversify, investing in the Hyatt Group, a hotel chain, and Rubloff Inc., a major Chicago real estate company.
With the Hyatt Group, OLC arranged financing for hotels in Chicago, Illinois; Greenwich, Connecticut; and Scottsdale, Arizona. Most of the equity financing came directly from OLC and Hyatt; OLC assembled Japanese investors to cover the rest.
In 1987, Orient Leasing entered the American real estate market when it bought a 23.3% interest in Rubloff. Willard Brown Jr., the chairman of Rubloff, told the Chicago Tribune, "(Orient Leasing) has a substantial appetite, and (Rubloff's) job will be to create the right investments for them."
OLC entered the housing loan and mortgage security loan markets in the early 1980s. OLC also diversified into securities in 1986, surprising the leasing community with the purchase of Akane Securities Company, Ltd., a small Japanese brokerage firm. Though lease-financing is its core business, with this purchase the company announced its intention to initiate "new operations in related, high-potential fields."
As part of its plan to diversify, Orient Leasing renamed itself Orix in 1989, the company's 25th anniversary. According to company officials, Orix is an abbreviation of "original", with the "X" added to symbolize a future of "flexibility and diversity." As part of a campaign to increase recognition of its new name, Orix bought a Japanese baseball team, the Hankyu Braves, and renamed it the Orix Braves.
The leasing business has soared in Japan in the past few years, fueled by heavy capital investments by Japanese industry. It has become such an attractive business, in fact, that many new companies have entered the field, pushing profit margins below 1% even for industry-leader Orix, according to The Economist. Orix's name change is just the most visible part of the company's move to broaden the financial services it offers and decrease its reliance on the leasing business.
Principal Subsidiaries: Orient Auto Leasing Co., Ltd.; Orient Leasing Interior Co., Ltd. (80%); Computer Systems Leasing, Ltd. (49%); Y.O. Machinery Leasing Co., Ltd. (81%; Orient Aircraft Co., Ltd.; Osaka Ichioka Co., Ltd. (47%); Orient Instrument Rentals Co., Ltd.; Budget Rent A Car Co., Ltd. (70%); Family Consumer Credit Co., Ltd. (72%); OSR Co., Ltd. (90%); Akane Securities Co., Ltd. (95%); Orient Capital Co., Ltd. (35%); Perseus Shipping Co., Ltd.; Orient Insurance Center Co., Ltd.; Toshiki Co., Ltd. (52%); Orient Leasing (Asia) Ltd.; Orient Leasing (Hong Kong) Ltd.; Korea Development Leasing Corp. (34%); China Orient Leasing Co., Ltd. (50%); Consolidated Orient Leasing and Finance Corp. (Philippines, 40%); Thai Orient Leasing Co., Lt. (49%); United Orient Leasing Co. Bhd. (Malaysia, 45%); Orient Leasing Singapore Ltd. (50%); Orient Car Leasing Private Ltd. (Singapore, 45%); P.T. Orient Bina Usaha Leasing (Indonesia, 49%); Lanka Orient Leasing Co., Ltd. (Sri Lanka, 30%); Orient Leasing Pakistan (Private) Ltd. (40%); S.A. Locabel (Belgium, 25%); Orient Leasing (U.K.) Ltd.; Lombard Orient Leasing Ltd. (50%); Orient Leasing USA Corp.; Orient-U.S. Leasing Corp (50%); Rubloff Inc. (38%); Bradesco Leasing S.A. Arrendamento Mercantil (Brazil, 25%); Leasing Andino S.A. (Chile, 35%); Budget Orient Leasing Ltd. (Australia, 40%).
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