Business Builders SPONSORED SECTION
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Business Builders SPONSORED SECTION Japan may be stuck in the middle of a lost decade (and a half), but every now and again a maverick bucks the downward trend and creates a company which is both world class and profitable. We call such CEOs “Business Builders” and we’ve made it our mission to find them and analyze what makes them different. In this sponsored series, we begin with an innovative company in the highly competitive networking devices industry. Introducing, Planex Communications Inc. SEPTEMBER 2002 B U S I N E S S B U I L D E R S S P O N S O R E D S E C T I O N S P O N S O R E D S E C T I O N B U S I N E S S B U I L D E R S Ne t wo r k De m o c r a c y An intimate discussion with one of the leaders in Japanese networking hardware BY HENRY SCOTT-STOKES Planex Communications Inc. (PCI) is a dynamic, young company International years. He looks not a day older than 23. To d a y, he is blazing trails in the Internet devices sector. Founded in 1995, it listed a mature man of 40. The passage of time has given his face a on Jasdaq six years later. It is now fighting it out for position and certain stre n g t h . market share in a very competitive sector. So far, PCI is holding its own, “What led you to go to work there?” I asked him. analysts say, and it has the potential to grow by double digits in the “The business world was so conservative in those days,” he years ahead. responded. “My father worked for Kanebo all his life. I wanted to PCI posted net sales of ¥5.8 billion in 2001, its last full business do something different. I had a great desire to go to work -— not y e a r, and ¥809 million in ordinary income, a year-on-year leap of go to a university at all, but start work straight out of high 106%. Net income was ¥470 million, up 180% from the 2000 level. school. I settled on Issey Miyake. At that time Issey had sales of PCI is led by Katsu Kubota, a careful, experienced manager who got ¥2 billion, and they were in the re d . ” his start in the fashion industry with Issey Miyake. Regular contributor to “What did you actually do there?” I inquire d . J@pan Inc Henry Scott-Stokes met with Kubota and prepared the “I made clothes. I was on the production side,” he said. following profile of the CEO and his exciting, young company. Kubota-san travelled to Paris for the collections. It was a gre a t life. Those were the booming 1980s. Issey Miyake sales shot up to Katsu Kubota has good hands. It is one of the first things you ¥15 billion a year by the time Kubota-san left fashion in search of notice about him when you meet him. When he picks up one of p a s t u res of his own. The experience of working with Issey Miyake his devices and holds it, he is very natural. It is a useful attribute left a lasting impression on Ku b o t a - s a n . in a salesman. “I got used to thinking ahead,” he said. “The autumn collec- He has always been good with his hands. When he was a very tion, then the spring collection, always half a year ahead.” young man, Kubota went to work with one of the most famous Today Kubota is constantly pondering what will come next in fashion designers in the world – Issey Miyake . network devices. “Over the next half year, so much will change,” He was 20 and he dreamed of being a world-class name. he said during a chat in his office in downtown To k y o, not far If you look up the website of his company – f rom Akihabara. w w w. p l a n e x . c o.jp – t h e re is a photograph of Kubota-san that The most basic thing of all about a company is its name. gives you a clue what he looked like in his Issey Miyake “How did you decide that name?” I ventured to ask. Kubota’s competitive streak extends to the racetrack 2 SEPTEMBER 2002 www.japaninc.com www.japaninc.com SEPTEMBER2002 3 B U S I N E S S B U I L D E R S S P O N S O R E D S E C T I O N S P O N S O R E D S E C T I O N B U S I N E S S B U I L D E R S “I started off with the name ‘Planet Japan Inc,’” Ku b o t a talented bilingual workers; it makes a lot of since for Kubota and that simple in this country. enormously experienced people coming recalls. “The problem with that was that it sounded like a company to avoid cost-ridden Japan wherever possible. This opera- The hard part is to get started. onto the job market in their sixties. They subsidiary of another company with that ‘Japan’ in there. So tion is moving quickly into markets around the world, and within “How did you do it?” I aske d , a re people who know the ropes, who have ‘ J a p a n’ had to go,” he said. In came “Communications” instead. 18 months, PCI will look a lot less like a Japanese company and thinking back to l995. a lifetime of experience. These are the “But then I made a second change, it’s true,” he said, antici- more like the multinational that Kubota wants it to be. “With my money. Never with anyone t a k a r a m o n o – the crown jewels – that one pating my next question. Kubota has big goals for the future. In fact, while PCI is still e l s e ’ s . ” can pick up by a highly selective appro a c h . “This arose when we opened shop in America. We discovere d small, he’s already eyeing the larger fish in the Internet device He fairly shot that out. A lot of thinking has gone on behind that someone else owned the name ‘Planet.’ It would cost us m a r ket. Sitting with Mr. Kubota for an hour – my eyes drifting “Bank borrowings?” I aske d . this. Mr. Kubota has seen his stock price ¥300 million to buy the name. So we changed it to Planex.” to the models of Formula One racing cars that he loves to adorn “None,” he responded, impassive. sink. It has come down from ¥900,000 or Kubota is a man who acts quickly when money is at stake. He his office with – I kept hearing him refer to one particular rival. He has a beautiful balance sheet, then. so to one-third that peak in a matter of a is flexible as they come when the situation demands it. He has “ C i s c o... Cisco... Cisco. ” It’s no wonder that Cisco and Allied year since he went public in July 2001. come up with a tidy expression for what he wants his company to To me it's nothing more, in context, than a company name. Telesis and a bunch of others got drawn in M r. Kubota still owns 80 percent of the be known as. “The Internet device company.” I am reminded of But to Kubota-san it is a mantra, a dirge – a name that ke e p s as competitors. Here was this savvy chap company himself. The personal loss is one that splendid slogan coined by s p routing from his lips. They whom none of them had heard of up to thing. What hurts is seeing people who Tokyo support center. Fuji Xe rox. “The document a re a bother, this Cisco. They that point, who'd created a firm out of bought stock at the IPO taking a tumble. c o m p a n y.” Every time I see keep hitting the Japanese thin air. All Japanese shacho hate that. “Ye s , that somewhere there is a click m a r ket with products that And PCI made money. me too,” says Mr. Kubota. It is something I worry over. I feel an in my head. “Right,” I say to compete with Ku b o t a ’ s . It was not as if, either, he did that by gouging customers. obligation to the share h o l d e r s . ” myself. “The folks over at Fu j i In a sense, though, he has Ra t h e r, as Kubota-san boasted from the start, he liked to offer his Another point is that Mr. Kubota is learning the hard way that Xe rox know how to put thre e only himself to blame. He was hubs and his servers at “reasonable prices.” What got him to running a listed company is different from running a private one. w o rds together. ” doing so darned well as “the launch his firm in the first place was the spectacle of established M o re people have to be consulted – he frets at long meetings – Ku b o t a -s a n’s company is Internet device company.” By suppliers charging several times as much as in the US.