Mitsubishi Chemical will streamline its sprawling business that spans more than 530 subsidiaries as its first non-Japanese general manager promises to tackle “sacred cows” to survive the clean energy era.
Jean-Marc Gilson, a 57-year-old Belgian who took the reins in April, told the Financial Times he would launch an aggressive asset review to bring Japan’s largest chemical company back to profitability after headwinds caused by the Covid-19 pandemic.
The surprise appointment of a foreign leader has sparked excitement among the private equity industry and other investors, who hope the 88-year-old group will follow suit. in the footsteps of Hitachi, Takeda Pharmaceutical Company and other Japanese groups that have sold underperforming companies to invest in more promising areas.
The group’s activity ranges from petrochemicals and industrial gases to healthcare. It serves the automotive, steel, semiconductor and LCD display manufacturing industries.
“There will be no sacred cows,” said Gilson, who previously headed the French ingredients group Roquette. “So if a business isn’t our strength, or if a business isn’t in a growing industry, or if we can’t solve the carbon neutrality problem, then I think we’re going to have to ask ourselves really tough questions. ”
Gilson faces the immediate challenge of making up for estimated annual losses of 48 billion yen ($ 442 million) that Mitsubishi Chemical has suffered as a result of the Covid-19 disruptions and raising the plunging share price by 24% last year. But an even bigger task is to refocus the business from the petrochemicals and other energy intensive and volatile businesses to more profitable areas with a lower carbon footprint.
“Faced with these [carbon neutrality] challenges, the number one priority is to position the company for growth, ”he said. “Because if we don’t, it’s really an existential threat to the business.”
Without specifying which companies will be sold, Gilson said the company will continue to focus on semiconductor materials and the demands created by connectivity and clean energy needs such as hydrogen. Another target area will be lightweight and durable materials for use in electric vehicles.
“People know what to do. We have to extract, consolidate, and then move on. It won’t take two years. It’s probably a matter of months before we have a clear picture of what needs to be done, ”he added.
Before becoming head of Roquette in 2014, Gilson spent two decades at Dow Corning, including five years in Japan.
Foreign CEOs are relatively rare in Japan and have a mixed record. Gilson is the first foreigner to be appointed head of a Japanese company since Carlos Ghosn, the former chairman of Nissan, was arrested in 2018 for financial misconduct, which he denies.
Gilson said he sought advice from Glenn Fredrickson, the only other non-Japanese director on the Mitsubishi Chemical board, to better understand the internal relationships within the company before moving to Tokyo from California in March. .
Gilson said he was not concerned with being the head of what he called a “pure Japanese company,” pointing to improvements in governance in recent years that have created a 12-member board of directors. five of whom are non-executive directors.
“My job would have been much more difficult if this kind of governance evolution had not happened,” he added.