Kokuyo Japan is missing out the big opportunity in India. Single digit growth in Japan business is great, however a death warrant in Indian stationary and art space today. There are times when you really have to go full throttle, and the time is now. However Indian management has put the company on cruise control. Competitors are overtaking(Doms, Cello, Linc, HP, ITC, Pidilite etc) yet the parent company lacks proximity to Indian market. If focused well, Kokuyo can turn this India subsidiary into a $1B+ business in another 15 years. Tepid growth in Japanese market should not deter the parent to accelerate in a market like India. Art network is a good thing the current promoters have done, however there is more work needed in sales, channels, marketing and distribution.
Appointment of Mr. Masaharu Inoue may change the course. Demand pull is helping the company as of today, along with the softened raw material prices. The company has potential to double the sales in every 4 years, given the parent’s capabilities. Unfortunately, the company lacks the push as of today.
Key shareholder is missing from the action to fire up that ambition. Can Kokuyo and Mr.Masaharu Inoue correct it?
Disc: Invested.
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