This relationship was derived from comparisons between different adult animals of different sizes, but I think it can be applied to companies as well. Until now, we have existed as a private company, but in 2025 we are to become a public company by listing on the stock market. The stock market is like a grassland for animals, where predators are vigilantly searching for food to make themselves bigger. Let’s take a look at the structure of the analytical instruments industry. It consists mainly of giant companies such as Thermo, Agilent, and Danaher; six semi-giants such as Illumina and Shimadzu; seven core companies such as QIAGEN; and about 30 companies in the 500M$ to 100M$ range, where Rigaku is rated as #26. Since only the top nine companies and some of the core companies are potential predators, I think we may say that the companies below them are in a position where they must feel in danger of being preyed upon. A “no-frills” company like Rigaku, with a narrowly focused business target and a world-class niche market is very attractive to company-predators and has a high probability of becoming their target.
Therefore, even after successful listing, we must acquire a “form” that will protect us from predators. What is this “form?” To me, it is a company that has the physical strength to compete with predators, quick-witted and agile ability to take action, and the capabilities (clear thinking and judgment) that are highly valued by general shareholders. Making a comparison to animals, it would be a panther or a boar, I guess.
I think that the most important thing for a company like ours is agility, and the key to acquiring that agility is the appropriate size. I think this is similar to the zoological logic I mentioned above—the size of a company determines the time interval for that company. In my previous job, I worked for Hitachi—a giant company where decision-making took a long time, and everything had to be done in year units. The same is true for GE, which I mentioned in August. Even after 30 years, GE failed to create an optimal constitution for its own size. In the end, the decision to divide the company into smaller companies of a size suitable for each business should have been made much earlier.
Therefore, I believe that Rigaku should aim to become an appropriately sized company rather than blindly try to become a giant company. And that appropriate size is 800M$ (in the case of 1$=100¥), which we have targeted in this mid-term management plan. After that, we should aim at developing as an agile and creative company that can continuously produce high value-added work rather than simply grow in size. If we can do that, I think it is also possible to aim for an EBITDA of almost 40%.
We now have the goal of stock market listing, but it is necessary to understand that this goal leads us into a world full of dangers. I would like to work with all of you to become a company that can operate independently and firmly in that dangerous world. I would like everyone to understand the orientation of this medium-term management plan, and to reconsider the plan with the image of Rigaku in 2025 in mind.
P.S.: The book Zou no Jikan Nezumi no Jikan - Saizu no Seibutsugaku [Elephant’s Time, Mouse’s Time – the Biology of Size] was written by Tatsuo Motokawa, a Japanese university professor. For those overseas who are interested, I include for your reference the following books, written by Dr. Motokawa's colleagues. However, I have not read them and don’t know whether the content is the same.
