NOF Corporation

Yebisu Garden Place Tower, 4-20-3 E
Tokyo
150-6019
Japan
Telephone: + 81 3 5424 6600
Fax: + 81 3 5424 6800
Web site: http://www.nof.co.jp

Public Company
Incorporated: 1937 as Nippon Oil & Fats Co. Ltd.
Employees: 3,695
Sales: ¥137.47 billion ($1.34 billion) (2004)
Stock Exchanges: Tokyo
Ticker Symbol: 4403
NAIC: 325998 All Other Miscellaneous Chemical Product Manufacturing; 311225 Fats and Oils Refining and Blending; 324199 All Other Petroleum and Coal Products Manufacturing; 325131 Inorganic Dye and Pigment Manufacturing; 325188 All Other Inorganic Chemical Manufacturing; 325211 Plastics Material and Resin Manufacturing; 325412 Pharmaceutical Preparation Manufacturing; 325510 Paint and Coating Manufacturing; 325613 Surface Active Agent Manufacturing; 333992 Welding and Soldering Equipment Manufacturing; 339112 Surgical and Medical Instrument Manufacturing

NOF Corporation is Japan's leading oleochemicals group, producing a highly diversified range of products derived from oilseeds and petrochemicals. NOF—formerly known as Nippon Oil & Fats—produces fatty acids and derivatives, surfactants, and related products, which are used in preparations such as soap, detergent, cosmetic bases, and foods, including margarine and vegetable oils, as well as rubber and plastics. The company's petrochemicals production includes polyethylene glycol, polypropylene glycol, and polyalkylene glycol, as well as fire retardant and defoaming agents, among others. The company's production also includes chemicals for the papermaking, fermentation, and other industries, as well as additives for construction and other materials. NOF's Oleochemicals & Foods division accounts for approximately 39 percent of the group's sales, which topped ¥137 billion ($1.34 billion) in 2004. The company's Chemicals division includes petrochemicals, organic peroxides, automotive coatings, and drug delivery systems (and specifically the company's polyethylene glycol modifiers launched in the mid-2000s). That division accounted for approximately 35 percent of NOF's 2004 sales. In addition to its focus on oleochemicals, NOF has long played a leading role in Japan's explosives industry. The company's Explosives and Propulsion division produces dynamite, powdered and emulsion explosives, aluminum nitrate-based explosives, and detonators, as well as rocket propellants. In addition, the company is a major producer of inflators for automotive airbags. This division produced approximately 25 percent of NOF's 2004 revenues. NOF Corporation is listed on the Tokyo Stock Exchange. The company is led by CEO and President Youhei Nakajima and is affiliated with Japan's Fuyo Group.

Mixing Oils and Fats in the 1930s

NOF Corporation was founded as Nippon Oil & Fats Co. Ltd. in 1937, merging the operations of four companies. The first of these was the Japanese branch of fast-growing Lever Brothers, the soap and detergent group that later became global agro-industrial giant Unilever. That company founded its own production facility in Japan, in Amagasaki, in 1910.

Another part of the later NOF originated in 1917, when the Suzuki Shoten company opened an oil refinery in Oji. Suzuki Shoten was then in the process of transforming itself from a small sugar trader to become one of the largest and most diversified conglomerates of World War I-era Japan.

Formally established in 1937, Nippon Oil & Fats added other product operations. One of these was coatings for the paint industry, added through the merger of Kokusan Industry Co. in its Fuji Paint Works. That company originally had been set up in 1924.

Nippon Oil & Fats added new production facilities into the 1940s, including a factory in Mikuni in 1939 and another in Shinmei, in 1943. In 1945, the company was merged into the chemical department of Nippon Mining Co. Ltd., which then became known as Nippon Chemical Industries Ltd.

The merger did not last long, however. By 1949, Nippon Chemical had split up again, spinning off Nippon Oil & Fats Co. in order to focus its own efforts on developing its petroleum operations. Nippon Oil & Fats (NOF) in the meantime had been expanded, with the inclusion of Hokkaido Oil and Fats, a company established in 1938 through the merger of 14 oilseed producers on Hokkaido island. In support of its Hokkaido operations, NOF built a new production plant, in Bibai in 1954.

The "new" NOF by then had already taken on the form that was to lead it into the next century, with operations concentrated around its core of oil and fats on the one hand, and explosives on the other. In the 1950s NOF continued to add new areas of operations. Organic peroxides became a major area of activity for the company, with production launched in 1957. This activity led the company into the larger petrochemicals sector, with production including polybutene and others.

Through the 1960s, NOF added a number of new production facilities. In 1961, the company opened its Chidori factory, which was joined by a new plant in Totsuka in 1964. The company opened two more plants before the end of the decade, in Kimitsu in 1968, and Oita in 1969. The latter marked the company's expansion into a new area of the petrochemicals market, with the launch of the production of C4 (butane and butene) derivatives.

NOF added another major product area in 1970 when it merged with Tekioku Polytechnics Co. Ltd. That company had been founded in 1919, when it established a factory for producing smokeless gunpowder, Teikoku Explosives Ind. After becoming a major producer of gunpowder and explosives, Teikoku expanded in the 1950s. A major part of that expansion was the company's extension into the production of rocket propellant in 1954. Production of propellants was at first limited to defense applications. Later, however, the company, and then NOF, began developing a range of civilian applications for its explosives and propellants expertise, such as the propellants for automotive airbags and other safety features. Another important product area was the production of nitroglycerin for medical and pharmaceutical purposes.

Refocusing on the New Century

NOF's expansion, on the one hand into explosives and propellants and on the other into petrochemicals, led it to reorganize its operations in the early 1970s. An important feature of the reorganization was the decision to regroup the production of household products, including soaps, detergents, and related products, into a dedicated subsidiary, Nissan Soap Co. Ltd. In 1973, the company expanded its coatings business with the creation of Nippon Dacro Shamrock Co, a 50–50 joint venture partnership with Metal Coatings International. In 1980, the company split off production of fatty acids and related oleochemicals into a dedicated unit as well, called Nichiyu Giken Kogyo Co.

The establishment of a research and development department, Tusukuba Research Lab, in 1984, provided a launching pad for further expansion into the 1990s for the company. NOF developed a number of technologies supporting applications ranging from new detergents and cleansers, to new food additives, and even to the development of a new flooring system, based on the company's methacrylic resin. NOF also began expanding beyond Japan, notably acquiring the United States' US Paint, specialized in coatings for the automotive, marine, and aerospace markets. Acquired in 1989, US Paint had been founded in 1931.

Nippon Oil & Fats Co. officially changed its name to NOF Corporation in 1992. At the same time the company launched a reorganization effort to meet the challenges of the global recession at the beginning of the 1990s. In 1994, the company continued restructuring, splitting off its Bibai production facility into a new subsidiary, Hokkaido NOF Corporation. In that year, NOF moved its headquarters to a new building complex, Yebisu Garden Place Tower.

NOF's expansion continued into the dawn of the 21st century. The company stepped up its propellants operations through a joint venture agreement with Autoliv Inc., a major supplier of airbag inflators to the Japanese market. Under the joint venture the companies set up a new production plant in Taketoyo. In 1999, the company boosted its explosives and propellants division again with the acquisition of Nippon Koki Co. Founded in 1970, Nippon Koki had become one of Japan's leading manufacturers of industrial-grade gunpowder.

In the early 2000s, NOF began a refocusing effort, narrowing its range of operations to a dual core of oleochemicals and explosives/propellants. As part of that restructuring the company shed a number of nonrelated businesses, such as a welding materials business, which was sold to Taseto Co. in 2000. That year, NOF began spinning off its automotive coatings business, too, transferring those operations to a joint venture set up in partnership with BASF. In 2002, the company sold its U.S. and European marine and aerospace coatings operations to Akzo Nmobel.

The restructuring paved the way for the company to explore the widening of its oleochemicals operations to include medical applications. In 1998, for example, the company launched a cooperation agreement with Bio Compatible of the United Kingdom to produce biologically compatible polymer applied products. By 1999, NOF had successed in developing a means of mass-producing its MPC Polymer, which boasted a high level of "bio-affinity," making it an important material for use in the development of artificial blood vessels and organs.

In 2001, NOF moved into a new business area with the launch of a new division, Drug Delivery Systems. This operation included the group's development of new materials for the controlled delivery of medications. By 2004, the company had developed a polyethylene glycol (PEG) derivative capable of transporting protein drugs into the bloodstream. The material, known as a PEG modifier, proved so promising that by the end of 2004, NOF announced that it was building a new, ¥1 billion production facility. At 20,000 square feet, the new plant was expected to become one of the world's largest, and enable NOF to quintuple its PEG production. As it moved into the second half of the 2000s, NOF remained one of Japan's leading specialty chemicals groups.

Principal Subsidiaries

Cactus Co., Ltd. (66.7%); Hokkaido NOF Corporation; Japex Corporation (70%); Nichibu Sangyo Co., Ltd.; Nichiyu Estate Co., Ltd.; Nichiyu Giken Kogyo Co., Ltd. (66.7%); Nichiyu Kogyo Co., Ltd.; Nichiyu Service Corporation; Nichiyu Solution Inc.; Nichiyu Trading Co., Ltd; Nippon Kogyo Co., Ltd. (89.3%); Nippon Dacro Shamrock Co., Ltd.; Nippon Koki Co., Ltd. (95.0%); Pyro Safety Device Co., Ltd.; Showa Kinzoku Kogyo Co., Ltd. (74.7%); Taseto Co., Ltd.; Yuka Sangyo Co., Ltd.

Principal Competitors

Itochu Corporation; Kaneka Corporation; Nisshin Oillio Group; Showa Sangyo Company Ltd.; J-Oil Mills Inc.; Fuji Oil Company Ltd.; Asahi Denka Kogyo KKNOF Corporation.