In this month's Japan Inc. magazine, we have a story about a Japanese property manager. Nothing special about that, you might think, until we tell you that he manages temple cemetery plots and sells the tombstones that go in them. Apparently the headstone business alone is worth more than JPY300 billion (US$2.7 billion) annually, and with the current Japanese death rate, the nation's 75,000 temples receive about 40% of the funerary interments (ashes, not bodies), or about 200,000 customers a year -- all with little or no marketing cost.
The subject of our story is one Itsuro Mizukami, a 56-year old Chiba businessman, who has built a mini empire out of buying stone slabs from China, importing and finishing them into tombstones, then placing them in family plots old and new at Buddhist temples. He has assiduously developed a strong personal network with head monks of temples around Japan, and as a result is being asked to supply other services, such as property management and sales, temple repairs, craftsman dispatch, and a host of other related activities.
Mizukami got started in the headstone business after being assigned a project while in his previous job as a city government inspector. He discovered that there are probably about 30,000 headstone suppliers in Japan, but the sector is consolidating rapidly and most of these small family operations are dying out (pun intended). He felt that one problem is that the headstone business is a cottage industry, and that he could systemize it.
23 years later, he has done just that and is now starting to gain traction in both headstones and property management. Last fiscal year, ending March 2005, Mizukami's IM company had 16 branches nationwide, producing revenues of JPY1.5bn (US$14MM) and profits of around 15%. In the next 24 months, he expects sales to climb 25% annually, and within 3 years he plans to have seized 5% of the temple funerary business.
An IPO will come sometime in 2008-2009.
Mizukami's temple-related building maintenance business is quite interesting, and is a good reflection of how he has turned his inside knowledge of temple operations and personal network of head monks into win-win revenue. Many of the wooden temples in Japan are quite ancient and the building techniques needed to support such large structures using traditional means are both complex and arcane. Unfortunately, as renewal schedules fall due, temples around the country are finding that the expertise to repair and renew their buildings is in drastically short supply. Against this background, Mizukami has launched a specialist carpenter dispatch service, which sends skilled tradesmen all over Japan to work on venerable buildings. Not just temples, the tradesmen are also in demand by private building owners as well.
Back to the family cemetery plots, in case you're interested, Mizukami says the procedure for getting one is quite simple. Providing space is available at your local temple, you simply visit the temple's management office and negotiate directly to buy a plot. They're sold, not leased. Out in Nishi Funabashi, where Mizukami lives and operates, the Nichiren sect's Hokekyo Temple has a going rate for one square meter plot of about JPY1.3MM, then about JPY1,000 a year to get the plot maintained by temple monks -- although this second charge is not compulsory.
A cemetery plot can stay with the family for generations, and because people understand its permanence, they tend to want long-lasting memorials, hence the healthy business for the IM company in producing elaborate and expensive headstones. Mizukami says that his customers are buying an art object on which to focus their family's emotions when they pass away. As such, who would want a second-grade effort? Mizukami sells between 20-30 headstones a month, at prices ranging from JPY2-JPY4MM each … An amount which is sufficiently painful to be spiritually purifying!
Reported by Terrie Lloyd, where you can visit his website here.
