Japan's Integral agrees strategic exit for fertiliser maker Nitto FC

Integral, which itself listed on the Tokyo Stock Exchange after completing a JPY 18bn (USD 121m) IPO in September, privatised Nitto in 2019, taking a 94% stake for about JPY 30bn.

Founded in 1952, Nitto was hampered by inefficient legacy ownership. Efforts to change the culture focused on a shift from a founder-driven model into a model where employees are meaningful stakeholders. Attention to job rotation and human resources proved instrumental in navigating COVID-19, which impacted non-core but substantial revenue streams in real estate.

In a statement, Integral described the cultural transition as smooth with benefits around strengthening management, improving cross-functional working group activities, addressing management issues, and planning future moves.

There were also practical adjustments in areas such as inventory optimisation. Integral said that the business historically maintained high levels of inventory across products to be able to fill any order at a given moment. The over-stocking was seen as tying up cash unnecessarily.

“I always ask companies, why does A plus B make D instead of C? Sometimes they can answer, and sometimes they just say, ‘Oh, it’s just always been that way,’” Makiko Hayase, a partner at Integral told AVCJ in 2021.

“It’s my job to push them to think, why has it always been that way. Is it because of the family or the culture of the industry? If something is not understandable, we try to fix it – nothing drastic, but step by step.”

Integral was founded in 2007 and has raised four funds to date. Recent vintages have seen significant increases in vehicle size: Fund III was 65% larger than Fund II, and Fund IV - which closed on JPY 123.8bn in 2020 - was 69% larger than Fund III.

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