Cadira supports the sustainable, long-term growth of its portfolio companies through collaborative dialogue. In our engagement with Kokuyo Co., Ltd., discussions focused on the alignment between corporate philosophy and sustainability strategy, the link between social issue resolution and business growth, and other key themes. This case illustrates how collaboration between companies and investors can generate new value.
Company Overview
Founded in 1905, Kokuyo has grown into a leading manufacturer of stationery and office furniture. The company began when founder Zentaro Kuroda started producing account ledgers, later expanding into notebooks, files, and other stationery products, and building a comprehensive manufacturing and distribution system. In 1965, Kokuyo entered the office furniture business, and today it is one of the major players in Japan’s office furniture market.
Currently, the furniture business accounts for about 70% of Kokuyo’s operating profit. Following the global financial crisis, in 2009 the company’s overall profit fell nearly to break-even, driven in part by a ¥3.6 billion operating loss in the furniture segment. Through subsequent structural reforms, however, Kokuyo achieved an operating margin of 14% and operating profit of ¥23 billion in 2024. The core of these reforms was a transformation from simply supplying furniture to offering solution-based services, including office planning and design. This shift improved order rates and production efficiency, boosting profitability. At the same time, rising demand across Japan for office productivity improvements—driven by the national “work style reform” movement—has provided a tailwind for Kokuyo’s growth.
With the end of the COVID-19 pandemic, more companies are encouraging employees to return to the office, aiming to strengthen engagement. In this context, comfortable office environments are increasingly regarded as “strategic investments” that enhance competitiveness, driving demand for higher-value proposals. In addition, Japan’s shrinking population has intensified competition for young talent. Beyond recruitment advertising, companies are recognizing the need to create attractive workplaces—including office environments—to improve hiring outcomes as part of a broader human resources strategy.
Creating Spaces for Autonomous Social Problem-Solving
Under its “Autonomous and Collaborative Society” concept, Kokuyo seeks to balance social contribution with corporate growth. While uniform office layouts were the norm in Japan until recently, Kokuyo was an early adopter of free-address seating within its own offices, using them as a showcase for clients and promoting more flexible workspaces. One of the company’s long-term goals is to foster autonomous individuals and create collaborative spaces that support continuous problem-solving for social issues.
Kokuyo’s latest integrated report elaborates on this vision and sets out six KPIs to measure progress:
1. Increase in opportunities to reflect on one’s own way of working, learning, and living.
2. Growth in the number of people participating in collaborative spaces, local areas, or communities.
3. Reduction in the types of barriers present in society.
4. Increase in the number of teams that succeed in co-creation.
5. Growth in the number of people actively working to solve social issues.
6. Increase in products contributing to solving social issues.
Although the direct positive impact of these KPIs on business performance may seem somewhat unclear, they represent Kokuyo’s vision for the new value of office spaces. Just as free-address seating was initially met with limited client understanding, accumulating pioneering examples over time is expected to strengthen proposal capabilities, reinforce brand power, and ultimately enhance competitiveness.
Dialogue with Kokuyo Led by Cadira
Cadira has engaged in ongoing dialogue with Kokuyo, with CIO Shimizu having worked with the company since his previous role. When Kokuyo’s PBR was below 1x and the company was focused on strengthening its management foundation, we encouraged initiatives such as abolishing takeover defenses, improving capital efficiency, and enhancing non-financial disclosures. Kokuyo steadily implemented these measures, improving management quality. Coupled with growth in its furniture business, this led the share price to double over the past three years and PBR to rise to around 1.5x. Having emerged from a period of extreme undervaluation, the next challenge will be to articulate a clear mid- to long-term growth scenario and further enhance market recognition.
In August 2025, to support Kokuyo’s next stage of growth, Cadira organized a collaborative dialogue meeting that brought together multiple institutional investors and Kokuyo. Discussions focused on sustainability and impact, with investors offering views on topics such as the alignment of impact with corporate philosophy, the integration of impact and business, disclosure of sustainability progress, involvement in sustainability education for younger generations, and engagement with suppliers. Kokuyo commented that hearing these perspectives was a valuable opportunity and emphasized the importance of incorporating them into management practices.
Beyond sustainability, Kokuyo also has significant potential for improvement in areas such as overseas expansion and further capital efficiency gains. Cadira will continue to engage in constructive dialogue, aiming to support the company’s long-term value creation.
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