Mitsubishi Chemical’s first foreign chief promises to reduce the group

Mitsubishi Chemical will streamline its extensive companies spanning more than 530 subsidiaries, as its first non-Japanese executive vows to fight the “sacred cows” to survive the era of clean energy.

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 return the profitability of Japan’s largest chemical company after winds caused by the Covid-19 pandemic.

The surprise appointment of a foreign leader has created excitement in the private equity industry and other investors, who expect the 88-year-old group to continue the steps of Hitachi, Takeda Pharmaceutical Company and other Japanese groups that have sold low-yield businesses to invest in more promising areas.

The group’s business ranges from petrochemicals and industrial gases to healthcare. It serves industries that manufacture automobiles, steel, semiconductors and LCD screens.

“There will be no sacred cows,” said Gilson, who previously led the French ingredient group Roquette. “So if a company isn’t our strength, or if a company isn’t in a growing industry, or if we can’t solve the carbon neutral problem, I think we’re going to have to ask ourselves some really difficult questions.”

Gilson faces the immediate challenge of connecting approximately .000 48 billion ($ 442 billion) in annual losses that Mitsubishi Chemical suffered as a result of Covid-19 disruptions and raising a share price that fell 24% l ‘last year. But an even bigger task is to reorient the company towards petrochemicals and other volatile companies that consume a lot of energy in more profitable areas with a lower carbon footprint.

“In the face of 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 company.”

While not specifying the companies to be sold, Gilson said the company would continue to focus on materials and semiconductor demands created by connectivity and clean energy needs such as hydrogen. Another target area will be light and durable materials for use in electric vehicles.

“People know what to do. We have to extract, consolidate and then continue and do it. It won’t take two years. It is probably a matter of months before we have a clear picture of what needs to be done, ”he added.

Before becoming Roquette’s boss in 2014, Gilson spent two decades at Dow Corning, including five years in Japan.

Foreign chief executives are relatively uncommon in Japan and have a mixed history. Gilson is the first foreigner to be appointed to run a Japanese company since Carlos Ghosn, the former president of Nissan, was arrested in 2018 on charges of financial misconduct, which he denies.

Gilson said he sought advice from Glenn Fredrickson, the only other non-Japanese board member of Mitsubishi Chemical, to better understand the company’s internal relations before leaving for Tokyo from California in March.

Gilson said he did not care to be the head of what he called a “pure Japanese company,” and noted governance improvements in recent years that have created a twelve-member board in which five are non-executive directors.

“My work would have been much harder if this kind of governance evolution had not taken place,” he added.