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Hagoromo president explains why he closed down his beloved chalk business

Hagoromo Stationery made chalk for 82 years. We closed down the company in March voluntarily. When we made the decision to close public last October, we received a huge response.

Takayasu Watanabe, Hagoromo's last president

     Many of our customers stocked up on our chalk before it became unavailable. We received a flood of faxes and nonstop telephone calls, and could hardly keep up with orders. Initially, we had planned to discontinue production at the end of February. But after discussions with employees, we continued production until March 31.

     A lot of teachers use our chalk regularly. Teachers at elementary, junior-high and high schools around the country use it, as do those at large cram schools such as Kawaijuku Educational Institution and Yoyogi Seminar.

     Teachers appreciate our chalk because it is easy to write with and durable. In fact, it is difficult to break our chalk by hand. Characters written with our chalk on blackboards are easily identifiable. They beautifully express the strokes particular to Chinese characters.

Demand halved

We did not close down without reason, even if our chalk is immensely popular.

     My condition is one big reason we shut up shop. I have been in poor health for several years. Actually, I have been hospitalized. Nevertheless, I could not have someone else replace me as chief because, as a company in a declining sector, Hagoromo has been running at an operating loss in recent years.

     Another reason is that the unit price of chalk plunged. We had to participate in auctions held by local governments in order to supply chalk to public schools. Recently, bid prices at auctions plummeted sharply. Contract prices were equivalent to our manufacturing costs.

     Earlier, companies based in a city, ward or town were given a priority at auctions held by their governments. These days, local governments focus on bid prices rather than quality. The tendency has become more and more prevalent under electronic auction systems. It was very frustrating for me as I believe our chalk is unparalleled in quality.

     Overall demand for chalk has also declined. Demand for our chalk peaked in 1990. Back then, we produced 90 million sticks of chalk a year. Just before the closure of business, our annual output was 45 million sticks, half the peak level. One of the reasons for the plunge in demand is, as it is often pointed out, a shift from the blackboard to the whiteboard.

     Furthermore, these days there is a much more diverse range of teaching tools available. Students study with tablet computers in some classes. In my opinion, a blackboard and chalk is better than a whiteboard and marker. The main material of chalk is calcium carbonate, typically from oyster shells. So chalk is more environmentally friendly, I think.

Passing on the baton

Since we decided to close, we have thought about how to do it without causing customers trouble.

     At first, we considered selling the whole company, enabling the Hagoromo brand to survive and helping overall chalk sales. But we could not find the right deal for the company.

     Another hurdle involved machinery. Manufacturers do not produce machines for making chalk. We had to do that ourselves. I developed the production facilities by trial and error with a managing director who retired a while ago. For creating the materials for chalk, we modified a machine for mixing flour. For molding the sticks of chalk, we tweaked a machine for making roof tiles.

     The machines, which we continued to modify over more than 20 years, felt like our children. We looked for buyers of the three machines, even if nobody was willing to take on the whole company.

     A nearby stationery maker came forward to buy one of the machines. Its mainstay product is blackboards, but it is now putting more emphasis on chalk. The company was kind enough to agree to give our employees the choice of transferring there.

     The remaining two machines will be shipped to South Korea. We did a lot of business with South Korean customers. A cram school teacher in South Korea, who heard about the quality of our chalk, launched a business importing it. Our closure baffled the importer, but we agreed to transfer two of our machines to the buyer.

     There is more to making our chalk than just the machines though. A precise ration of seven materials is mixed to ensure our chalk writes well and does not break easily. The recipe is optimized for our plant, so fine-tuning is needed for use overseas. I plan to visit South Korea and teach my know-how to the person who bought the machines.

     I'm sad that I have been forced to close down my company. But I am pleased I have been able to contribute to education by providing high-quality chalk over the last 50 years.

 As told to Nikkei Business by Hagoromo's last president, Takayasu Watanabe.

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