Case No. 1 Hokushin Co., Ltd.

Realizing a V-shaped Recovery to Save the Company through Sweeping Structural Reforms in Marketing and Cost Reduction

Top Management's Leadership;
Project Leader's Enthusiasm;
Consultant's Special Techniques;
Cooperation among All Three is the Key Factor for Success

Hokushin Co., Ltd., a company listed on the First Section of the Tokyo Securities Exchange headed by President and CEO Hideo Taira, was the first business in Japan to develop MDF (Medium Density Fiberboard, meaning fiberboard in which wood fibers are formed using heat pressure; product name Starwood (SW)), and Hokushin pioneered the industry as a leading company. However, Japan's longstanding economic depression and deflation, coupled with an increase in competitors, caused oversupply and intensified price competition, and the company fell into deficit. The company was also faced with having to raise investment to redeem corporate bonds, and was in a critical condition. From here, joint projects were conducted with JMAC on two occasions. Through striving to implement sweeping structural reforms, Hokushin could succeed in making an excellent V-shaped recovery over a short period of time. We review the stages leading to the successful outcome.

Case Study Contents

Danger of Bankruptcy - Urgency When Facing the Abyss
Scenario for Reform - Boosting Sales, Reducing Costs
Second Project with JMAC - Not Possible to Create Something from Nothing!
Important Points for Reform - Professionals' Abilities and Top Management's Patience
Motivating Force for Reform - Top Management's Strong Leadership

Corporate Profile

Hokushin Co., Ltd.
Address	17-2 Mokuzaicho, Kishiwada City, Osaka 596-8521
URL	http://www.hokushinmdf.co.jp/
Tel	+81-724-38-0141
Inception	1931
Established	1950 Listed on First Sections of Tokyo and Osaka Securities Exchanges
Scope of Business	Manufacture and sales of MDF (Medium Density Fiberboard)
President and CEO	Hideo Taira
Manufactured Items	Developed Japan's first MDF (Medium Density Fiberboard) in 1972, under the Starwood brand name. In 1987, a TFB line (successive press) came into operation.The company's main product, Starwood, is produced by subjecting wood fibers and a special adhesive to heat pressure and board forming processes. It is an outstanding product that maintains the merits of wood while eliminating its deficiencies, and is homogeneous with an excellent processing ability and a low formaldehyde specification. Further, the company also manufactures Starwood TFB (thin MDF board) that is used as a multipurpose housing material.
Capital	2,343 million yen
Annual Sales	11,885 million yen (Consolidated figures for the period ending March 2005)
Employees	173 (Consolidated figures)

Exterior view of Kishiwada Factory	Main Product: Starwood (SW)

Hokushin Representatives who Contributed Comments

President and CEO Hideo Taira	Director Tetsuro Irino

JMAC Consultants

Senior Consultant Kamiyakko	Senior Consultant Yokota

Consulting Methods Introduced

Structural Reform Consulting to Improve Business Profitability

Consulting to build up a scenario for enhancing business profitability and provide support in implementing the structural reform activities to realize the enhancement. Supported clarification of the actual situation from the profit structure and the progress analysis, and built up the scenario for profit improvement. Also supported the actual reforms outlined below:	Click here for PDF file
Resetting of market and business units Redesign of organizational formation Review of marketing strategies Redesign of sales bases and functions Company human resource planning Review of cost reduction strategies Target development scenario design for each cost item Extraction and selection of improvement measures Support for action plan establishment Business evaluation system design Implementation and progress management	Click here for PDF file
JMAC supports profitability reformation, together with the development of a management system and human resources that will allow the company to continue to develop by itself afterwards.
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