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With a clear focus on creation, Asahi Holdings looks to transform the precious metal business operations

Interview - January 13, 2016

Asahi Holdings President Mitsuharu Terayama describes his motivations to dramatically increase Asahi Holdings’ precious metal business operations through both organic and M&A growth in North America, whereby he is also seeking opportunities in the life and health business sector with the aim to contribute more and more to society.



Japan is truly going through an exciting time at the moment. In a period of global economic recession, Japan is making the difficult choices to reorient its economy for a more globalized world. As Prime Minister Shinzo Abe has said, Japan is taking economic reforms that are “once in a generation,” through the popularity termed economic paradigm, Abenomics. But we are trying to understand the perspective of the private sector in this transformation. What would you say has been the impact on the private sector or indeed Asahi Holdings specifically?

Japan has been known for the two lost decades, where we experienced economic stagnation, and 20 years of an inward-looking economic mindset. Personally, I feel that Abenomics has made great strides in changing this mindset into a positive and forward-looking one. Specifically, there was the monetary policy of what Bank of Japan’s President called the different dimension monetary easing, which was a new phase of monetary easing. It was a level of monetary policy that had been unprecedented. There was also the financial policy, which I suppose did not have such a concrete effect. There are also various issues remaining that I will describe later on.

What we expect the most from Abenomics is the third arrow, which is about deregulation. We are hoping that this will open up the traditional systematic structure of Japanese economics and politics, so that companies can realize their own potential.


When we met Minister Amari, he was very excited because he felt that the signing of the TPP was imminent. Of course we found out about a month ago that he was correct and that they’d come to an initial agreement in Atlanta. This is a historic trade deal, 12 economies, 40% of the world’s GDP, one third of its trade. What opportunities do you see for Asahi Holdings within this agreement, considering not only your significant presence in Asia, but also of course your most recent moves to really increase your presence in America?

Regarding the TPP, there is still some opposition toward it within the US, not just from Republicans but also from some Democrats such as Hillary Clinton. Indeed, I am not sure if it will be signed by the US, but generally speaking I think things are heading in a good direction.

For our company specifically, I do not think that there will be any concrete and positive impact immediately, but the TPP does facilitate the creation of an environment that is favorable to activities of global companies. In the long term, this is a pleasant move for us.

We have three business pillars, and our biggest one is the precious metals business. This is a sector that trades worldwide. We hope that the TPP will lead to an expansion, not just in tax regulations, but also create an environment where all the people of the world welcome this free circulation. And if this kind of environment is established throughout the world, this will have a positive long term effect on our company. We have recently acquired facilities in the US and Canada, and we have done this by seeing an opportunity in this positive change of environment, and expect that we will achieve positive growth through it.


Indeed, in March 2015 you presented your seventh mid-term plan for the three years to come, starting in April 2015, setting yourself a dynamic challenge under the slogan “Pursuing growth and efficiency” with the two main focuses of internationalization and more aggressive domestic expansion. Can you outline this campaign, and how Asahi is adapting to this difficult environment, such as the volatility and the precious metals market, for example?  

When we look at where we can grow in our business, there is a lot of potential in the global precious metal market, and I will explain later how we intend to realize this growth. Domestically speaking, as you know, Japan is suffering from a low birth rate and an aging society, so various parts of the economy are contracting, at least in their domestic operations. One exception to that is the sectors that cater to the aging population, as well as young people are becoming more health conscious. I believe that within the domestic business, the life and health sector has a growth potential for us.

I have been in this company for 43 years. And I have always worked from a management perspective. We started with only 20 people when my career started here and now there is more than 2,100 employees. The theme throughout our history has been pursuing creation of new business model in each of our business sectors and to consider the best way to make that possible.

Let me explain it to you by getting into our conception of a business model for the precious metal sector.

The precious metals can be roughly divided into two categories, the first being gold and silver, and the second being what we call PGM, mostly platinum and palladium. In the US and Canada, the plants that we have acquired are to refine gold and silver, currently called “Asahi Refining”. And they work with all the leading mining companies, who deliver the gold and silver, and they are converted into a bar shape of crude concentrate, which is “primary material” for Asahi Refining. And then what we do, in Asahi Refining, is to refine it into high purity products.

The two plants we acquired were previously owned by the UK company Johnson Matthey, which for 200 years have been conducting gold and silver refining, and was the greatest and most famous company in the world for this very sector. Even today, these two plants have the largest share in America, and are among the top five in the world as well in terms of scale.

On the other hand, within our umbrella of Asahi Holdings, we also have the company Asahi Pretech, which deals with “secondary materials”. These are materials extracted from various used products that contain precious metals. One example is jewelry such as necklaces, bracelets and rings, and other used products, where we extract the material such as gold and silver. Another example is electronics. Electronics contain a lot of gold and silver in various parts. Also in dental alloy. In the automobile sector, with emission regulation, you use platinum, palladium, rhodium, and other precious metals. We are at the top of every field from which we can extract the metals within Japan. But our operations have not yet permeated the world, although we do have plants in Shanghai, Korea, Malaysia and Taiwan.

When you look at mining, there is a finite amount that you can mine. But with the secondary sector, you can recycle infinitely. This is the unique characteristic of the secondary sector. We surely see there are chances to create a new business model for the precious metal business.

Until now, we have been conducting treatment of primary material and secondary material, separately, meaning separate companies and separate plants.

In Japan, we have developed a unique technology for the secondary refining through our domestic operations until now. Actually already numbers of our technology have been shared with the American and Canadian plants to improve their processing techniques. What we aim for as a new business model is to integrate these two materials operations. Because our American and Canadian plants for primary materials are very large scale, by conducting our secondary material operations there as well, we are able to reduce costs.

Another feature of our new business model is to produce more diverse products. We are aspiring to diversify the product line to meet requirements of consumers and investors for investment purposes. This new business model aims to be involved from processing various materials to delivering products to the consumer, so the whole chain is involved. No other refining companies are doing this, at the moment. We aim to expand the operations of Asahi Refining to become the world’s top refining company. This is my new business model that I envision to drive our growth.

I would also like to explain the new business model in our life and health business. It is only been one year since we started this business by our acquisition. The company that we acquired has various channels and pipes within its sector and consumers, so we are now working to find and select what healthcare products best fit their needs. At the moment, we do manufacture all of our massage chairs, but we do not plan to manufacture all the products. We intend to create a new business model by researching what the needs of the consumers are, and what products and systems we can create to match these needs, and also make it profitable.


I wanted to get into your second line of business environment preservation now, because I think this is a very trending topic around the world. A lot of countries are really interested in preserving the environment, reducing climate change, so I think maybe there’s a need and a demand for your type of intellect and your type of knowledge in these sectors. So how are you working maybe to leverage this and to expand and use the skills and knowledge you’ve created over the years to meet this demand in the world?

Before that, I would like to talk more about our new life and health business.

To tell you why we choose life and health and what potential we see in this, it is because the Japanese market is shrinking due to the low birthrate and aging society. The life and health sector is one in which everyone should capitalize because there is a global increase in health consciousness in people. As well as there being the aging society, at the same time young people are also more health conscious. So the reason why we selected this sector is because out of the various contracting sectors, this is the one sector that will be growing.

Japan is suffering from a very bad fiscal state at the moment, one of the reasons is the increasing amount of medical and social security costs that the government must burden because of the aging population. So if the people become healthier, it is less cost they will be creating. We also want to contribute to people’s health through our life and health business.

Now I would like to get into environment preservation business. Environmental issues are very important to us. This is a difficult issue especially when seen internationally because each country has a diverse set of regulations. For example, it is unavoidable, when pursuing the waste processing business, to work and negotiate with the government and take into account the government’s ideas of the related issues. No matter what wonderful technology we have for treating waste, it does not necessarily directly result in good business, depending on which country you are working in. Perhaps if we were a company that produces and sells the hardware, like the facilities and equipment to deal with waste, you could operate in this way, but because we are the ones who conduct efficient operations of waste treatment, we use these facilities and ensure that they are processed safely, detoxed and recycled into something else. Because of that, we won’t be able to see immediate results by going abroad if we just think in terms of business.

Therefore, when we are thinking about the environment business from a macro perspective, we need to consider separately the companies that are dealing with hardware and those that are dealing with the industrial waste processing. So, when we are expanding abroad with the waste processing, we need to work with the governments and local industrial companies in order to develop relationships, so we are not expecting immediate results at this moment, but it might be a different story in the future.

I believe that the world’s interest in the environment has decreased somewhat in recent years because of the various political issues the world is facing. I am concerned with this lowering of interest in environmental issues. Because we are facing the difficult situation of global warming and climate change, I believe that the leaders of the world must take those issues into consideration more seriously. I know there are difficulties because the emerging countries and the developed countries always have differing opinions about environmental issues. When we were thinking about what we can leave for the next generation, I believe that it is of the utmost importance as a business for us to be contributing to the conservation and improvement of the environment.

My personal opinion on the environment is that the global environment is precious, and that we must leave it for the next generation in the same state we inherited it or in a better state. But our business credo has a slightly different concept. We conceptualize it as that the environment is something which has been entrusted to us by the next generation, and we must not destroy it while it is in our hands.


In a globalized world, the importance for countries to brand themselves and to communicate their strengths can never be overstated. So taking this opportunity to reach out to the heads of the G7, how would you like these leaders to perceive Japan as it turns the corner and leaves behind these two decades of deflation? What is the new brand of Japan that you want to send to them?

I think the brand is something the country has always had. The brand of Japan is that we have the capacity to accept and recognize various values and value systems. So I would like to ask the world’s political and economic industry leaders to communicate this spirit to the people within their country or within their company. I believe that if people were able to accept different values, various conflicts all over the world could be reduced.

I feel that even for environmental conservation, it is of utmost importance that we accept and respect others’ values, because after all, war is the greatest destroyer of the environment.