- Internal Turmoil and Leadership Changes: JPR experienced a leadership shift in 2023 with President Naomi Kano’s resignation after a reported “boardroom coup” tied to a proposed takeover by the EQT Group. Both Kano and Managing Director Yoshinobu Kimura resigned in April 2024.
- Government-Supported Expansion: Despite internal challenges, JPR is essential to Japan’s logistics, with government backing for pallet standardization and expansion to 50 million pallets to address the “2024 logistics problem” and help streamline the country’s logistics infrastructure.
Recent reports from Diamond Online, a Japanese business news platform, highlight significant internal turmoil at Japan Pallet Rental (JPR), Japan’s largest pallet rental company. According to Takeshi Shigeishi, Deputy Editor-in-Chief of the Diamond editorial department, the turbulence dates back to September 2023, following several months of outreach involving several prospective financial backers to support company growth. JPR operates a fleet of around 11 million predominantly RFID-tagged plastic pallets, generating an annual revenue of about 28.8 billion Japanese yen or roughly $200 million.
In September 2023, then-president Naomi Kano resigned in what Shigeishi described as a boardroom “coup d’état.” This led to her transition to chairperson, a role she held until she resigned in April 2024, along with Managing Director Yoshinobu Kimura. Both simply cited “personal reasons” for their resignations. These leadership changes came during a period of internal tensions regarding a proposed takeover by European investment fund EQT, according to Diamond.
“Kano is an industry heavyweight who has served as the company’s president for a long time since 2010 and has served as chairman of the Japan Pallet Association,” Shigeishi reported.
“It was not a resignation, but a de facto dismissal, and there was a coup d’état by Ms. Kano’s subordinates,” Shigeishi quoted a financial insider familiar with JPR’s internal affairs.
The Boardroom Coup and Pushback from Directors
The internal conflict reportedly began with a takeover proposal from EQT Group, which would have provided JPR with significant financial backing to support its expansion plans. It was driven by the Japanese government’s interest in quickly expanding JPR’s pallet pool to support pallet standardization in Japanese industry. Despite the deal’s potential benefits, most of JPR’s directors opposed the acquisition. According to sources cited by Diamond, the opposition was mainly due to concerns about the terms of the deal and the future of the company’s leadership.
A key factor behind the pushback from the directors was supposedly the disclosure of a “secret agreement” during board discussions, in which it was revealed that EQT had negotiated a call option to purchase Kano’s shares after the deal. This apparently raised concerns among the directors that Kano might have been prioritizing her interests in selecting EQT as a partner. The board supposedly saw this as a conflict of interest, leading to her dismissal as president in September 2023.
But there could be more to the story. As Shigeishi notes:
The real purpose of the coup is unclear. However, according to multiple sources, EQT had planned to revamp its board of directors after the acquisition, with all but one JPR representative comprised of new outside agents and former EQT employees.
Common sense dictates that only Mr. Kano will remain on the board and all the other members will be fired, which could be enough motivation for the rest of the board to oppose EQT’s proposal.” That’s what the aforementioned shareholder speculates. In any case, the capital and business alliance between JPR and EQT has faded away. But the story doesn’t end there. Some of the candidates who initially put forward the acquisition of JPR are said to still be interested in the acquisition.
Government Support and the Push for Pallet Standardization
Despite the reported internal turmoil, JPR maintains a pivotal role in Japan’s logistics industry, particularly as the government promotes pallet standardization to solve the country’s labor shortage and logistical inefficiencies. In a November 2023 interview, Kano discussed the importance of palletization—using standardized 1100×1100 mm pallets to reduce the time and labor required for loading and unloading goods. Palletization is viewed as a critical tool in addressing the 2024 logistics problem, which refers to upcoming government regulations limiting overtime work for truck drivers.
The Ministry of Land, Infrastructure, Transport, and Tourism has set ambitious targets to increase the production ratio of standardized pallets from 26% to over 50% by 2030. JPR, which currently manages 11 million pallets, is poised to support this national initiative. The company aims to expand to 50 million pallets in circulation, but achieving this will require significant capital investment. Diamond’s reports suggest that the EQT acquisition proposal could have provided the necessary financial backing to support this expansion.
“The “2024 Problem” facing the logistics industry is the result of various inefficiencies, including long hours of manual loading, unloading, and waiting required of truck drivers,” JPR president Atsushi Futamura states in a message at the JPR website. “Because these inefficiencies occur at logistics hubs and inter-corporate junctions, they require social solutions made possible through standardization and collaboration. Total palletization is one such solution.
“In recent years, the difficulty of achieving standardization and collaboration in the logistics industry is easily recognizable. Although many companies have designed the best logistics systems for their own needs, this has resulted in highly customized logistics between individual companies, and optimizing the entire supply chain has become a major hurdle.
“At JPR, we recognize the need for mutual understanding between companies and logistics sites and for introducing a concrete system for total palletization. We have been working to establish total palletization through dialogue with customers and partners, and we are committed to bringing these concepts to all the industries.”
Strategic Outlook and Future Expansion
In her November 2023 interview, Kano emphasized that partnerships with investment firms are essential to meeting JPR’s growth targets, particularly given the high costs associated with expanding the company’s pallet inventory and collection centers. The government has encouraged investment in JPR to support the company’s contribution to the broader logistics industry, which is undergoing rapid digital transformation and automation to cope with labor shortages.
Despite the boardroom conflict and leadership changes, JPR remains focused on optimizing Japan’s supply chain. The company’s rental pallet services are seen as a critical solution to reducing the need for manual labor, enhancing logistics efficiency, and meeting the demands of Japan’s evolving economy.
Rick LeBlanc, EMBA, is the founder and editor of Reusable Packaging News (subscribe to the free newsletter) and editor of Western Pallet Magazine. A supply chain journalist with more than 30 years of experience, he specializes in pallets, reusable packaging, material handling and related operations. Rick is co-author of Pallets: A North American Perspective and Pallets & Progress: A Collected History of Pallets and Palletized Handling 1922–1945. He is also an advisory board member of the Virginia Tech Center for Packaging and Unit Load Design. Read Rick’s full bio.
