Toru Hambayashi

Former chairman and co–chief executive officer, Nissho Iwai–Nichimen Holdings Corporation

Nationality: Japanese.

Born: In Japan.

Career: Nichimen Corporation, 1997–1998, COO of Chemicals, Plastics, and Energy Group; 1998–1999, COO of Consumer and General Products Group; 1999, executive vice president and chief information officer; 2000–2001, head of Net Commerce Business Team; 2001–2003, president; Nissho Iwai–Nichimen Holdings Corporation, 2003–2004, chairman and co-CEO.

■ Toru Hambayashi spent almost his entire career at Nichimen Corporation, a general trading company specializing in energy, chemicals and plastics, household goods, and consumer and general products. After Japan's economic bubble burst, Hambayashi spent the late 1990s and early 2000s steering Nichimen out of its accumulated debt, building capital, and encouraging employees to think creatively. He divested Nichimen of its underperforming subsidiaries and reduced excessive management. In 2003 Nichimen merged with the trading house Nissho Iwai Corporation to form the giant Nissho Iwai–Nichimen Holdings Corporation, where Hambayashi served as co-CEO with Nissho Iwai's Hidetoshi Nishimura.


After becoming one of Nichimen's senior managing directors, Hambayashi received a steady stream of promotions at Nichimen. He was named chief operating officer of the Chemicals, Plastics, and Energy Group in 1997, followed by chief operating officer of the Consumer and General Products Group in 1998, and then executive vice president in 1999. In November 1999, he was appointed to the newly created position of chief information officer. As CIO in January 2000 he oversaw the Net Commerce Business Team, which was created to develop and implement strategies exploiting advanced information technology. In 2001 Hambayashi was named president of Nichimen Corporation.

In the early 2000s Nichimen struggled to remain solvent, as did many other Japanese companies, amid the pervasive Japanese climate of falling stocks, creeping economic recovery, and bankrupt banks. Hambayashi issued an apologetic yet upbeat letter after the fiscal year ending March 31, 2001, wherein he noted that drops in the market value of shares of financial institutions held by Nichimen contributed to an annual net loss of ¥21.1 billion. Although the company was successful at writing off most of its unrealized losses on securities, Nichimen temporarily suspended dividends.

The year 2001 was the second and final year of the New Create 2000 medium-term management plan, which had been designed to increase profits. Hambayashi was able to report that gross trading profits and operating income had both advanced over that period. Adhering to Nichimen's slogan, "Make a difference, make it unique," Hambayashi instituted the New Plan (NP) 2002 management approach, which would liquidate unprofitable and uncompetitive subsidiaries, reduce interest-bearing debt and generate net profit, and boost Nichimen's stock price. He also arranged to expand Nichimen's strategic businesses of energy, chemicals, plastics, and household and general products through mergers and acquisitions.

Interested in streamlining management and increasing efficiency, Hambayashi introduced the Enterprise Resource Planning system in order to unify management information resources and facilitate faster decision making. He implemented plans to clarify the work responsibilities of executive officers and increase their decision-making authority, promote information sharing among officers, reduce the number of directors, and add an outside director to the board in order to gain a broader range of opinions on group strategy.

In his end-of-the-year letter to shareholders Hambayashi heralded his employees, encouraging them to revolutionize their ways of thinking so as to boost operational productivity: "Nichimen's core competencies that will enable it to expand and develop the company's operations on a global scale during the new century are found in the minds of our staff" (June 27, 2001).


Concerned with maintaining liquidity and faith in the eyes of shareholders, the new president Hambayashi carefully directed Nichimen's mergers and consolidations over the next several years. In 2001 Nichimen and Tomen Group merged their life-science businesses into an independent company with 130 employees. Blending Tomen's expertise in chemical production with Nichimen's formulation capabilities, the new venture would perform in agrochemicals, pharmaceuticals, veterinary medicine, and biotechnology.

That same year, in the spirit of the NP 2002's mandate for selection and concentration of Nichimen's core business, Nichimen Group and its wholly owned subsidiary Nichimen Energy Company transferred their liquefied petroleum gas business to Shinanen Company. Hambayashi remarked that the move would allow Nichimen to redistribute its financial resources to more strategic business areas. Hambayashi's plans were to dispose of unprofitable gas stations, help existing gas stations add capacity, and improve operating efficiency by reducing interest-bearing debt.

In another area of NP 2002 Hambayashi aimed to expand Nichimen's textile business. Nichimen formed a business alliance with the Hong Kong-based Li & Fung, a supply-chain management company with a network of textile factories. Nichimen also transferred a 51 percent interest in Wuxian Hamasaki Plastics Compounds Company, a Chinese Nichimen subsidiary, to Asahi Kasei Corporation.

Due in part to his own country's economic problems Hambayashi looked outside Japan for investment opportunities. One country upon which he focused his attention was Poland, the biggest market in eastern Europe; he had a positive perception of the country's economic future. Hambayashi attended an investment forum with the Polish Agency for Foreign Investment in Tokyo and conducted a productive meeting with the Industrial Development Agency president Arkadiusz Krçzel. Hambayashi also instituted alliances with the Finland-based Wihuri Oy conglomerate and the Azerbaijan-based Azerchimia. Those alliances were experimental new business models designed to minimize Nichimen's assets while maximizing profits.


In a continuing effort to reform management and administration, Hambayashi established the Consumer Business Department in April 2002 in order to consolidate the retail operations of Nichimen's internal companies and integrate them horizontally.

For Nichimen's fiscal year ending March 2002 Hambayashi reported a 15 percent decline in net sales, to ¥2.055 trillion. While net income had deteriorated due to falling stock prices, operating income increased 43 percent to ¥33.1 billion as a result of the company's efforts to concentrate resources, increase asset utilization, and reduce interest-bearing debt. In his year-end report, which sported the title "Brand New Ideas," Hambayashi apologized for the company's performance: "I greatly regret that the company was not able to realize the sharp improvement in performance that it laid plans for last year" (June 26, 2002).

Hambayashi assured investors that Nichimen would proceed with its NP 2002 management plan, concentrate resources in key business fields, encourage corporate growth through investment in information technology and life sciences, and minimize its risk assets by selling real estate and stock assets. He noted, "I believe that Nichimen's corporate value stems from its relationships with diverse organizations and individuals, including shareholders, major customers, and consumers. I do not think that simply pursuing profits is the way to increase corporate value" (June 26, 2002).


On April 1, 2003, in the atmosphere of the stagnating Japanese economy, domestic inflation, and tight credit, the two trading company giants Nissho Iwai Corporation and Nichimen Corporation, the sixth- and eighth-largest trading houses in Japan respectively in terms of sales, established the joint holding company Nissho Iwai–Nichimen Holdings Corporation through a stock-transfer agreement. The two companies hoped to improve their financial strength, develop new business areas, and increase management efficiency. Toru Hambayashi, the president of Nichimen, was named chairman and co-CEO of the new company, while the Nissho Iwai Corporation president Hidetoshi Nishimura was named co-CEO and president.

With several businesses in different sectors—Nichimen in textiles and raw materials and Nissho Iwai in airplane and energy interests—the two companies had been unlikely to compete, which would minimize restructuring and speed up cooperation in efforts to reduce debt, cut jobs, and increase profits. But the two companies owed incredible amounts of money; with a combined interest-bearing debt of more than ¥2.75 trillion, the Nissho Iwai–Nichimen planned to raise ¥200 billion worth of equity capital through UFJ Bank in Japan and Lehman Brothers in the United States.

Industry critics questioned the motivation behind two debt-swamped trading houses agreeing to join forces. Hambayashi responded in Japan Inc. by saying, "Judging from the recent economic situation, we thought that the timing of the integration must be now" (February 2003).

At a joint press conference in Tokyo, Hambayashi and Nishimura noted that they expected their companies' integration to produce synergetic effects. Analysts, however, observed that the two co-CEOs would need to concentrate on compromise, since Nichimen's strategy had been to select and concentrate its business focus while Nissho Iwai's had been to broaden into a sogo shosha —an all-around trading company.

Hambayashi and Nishimura hoped that their decision to merge would encourage other troubled Japanese companies to follow suit. Encountering difficulty in adjusting to deflation, the slumping stock market, and global economic slowdowns, Nichimen and Nissho Iwai tended to dispose of healthy assets rather than high-risk assets out of the fear that discarding high-risk assets would damage their equity capital.

Under the merger the two companies and their subsidiaries consolidated management. They agreed that by April 2004 they would reduce the combined workforce from 21,000 to 17,000, trim the number of subsidiaries from 430 to 300, and cut operating expenses by ¥80 billion. They pledged to reduce interest-bearing debt to less than ¥2 trillion within three years.

In keeping with their integration plan following the formation of Nissho Iwai–Nichimen Holdings, Hambayashi and Nishimura merged the two companies' core operating segments to form the separate company Sojitz Corporation. Through selection and focus Sojitz would fulfill the mandate of improving profitability.


In addition to his duties at Nichimen and then Nissho Iwai–Nichimen, Hambayashi served on several boards of directors of other organizations. In 2001 he was a nongoverning board member of the World Forestry Center, the educational institution promoting sustainable forests around the world. He was also a member of the Japan and Tokyo Chambers of Commerce & Industry.

Hambayashi traveled and spoke at conferences around the world. In 2000, as executive vice president of Nichimen, he presented a speech at the 33rd International General Meeting of the Pacific Basin Economic Council held in Honolulu. Pertinent to the council's format that year of "New Horizons: Economic and Political Implications of the Changing Global Landscape," Hambayashi spoke of the financial-sector reform that would be necessary to overcome economic crisis and sustain growth. Hambayashi retired in June 2004.

See also entries on Nichimen Corporation and Nissho IwaI K.K. in International Directory of Company Histories .

sources for further information

Hambayashi, Toru, "Brand New Ideas," June 26, 2002, .

Kawakami, Sumie, "Goodbye to the Glory Days," Japan Inc. , February 2003, p. 8–10.

"Nissho Iwai, Nichimen to Form Holding Company," Mainichi Daily News , December 11, 2002.

"Nissho Iwai, Nichimen Trading Units Set to Merge," Japan Times , February 11, 2004.

"Tokyo Holding Company Makes Good Start, President Says," Kyodo News International , September 6, 2003.

—Lorraine Savage

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