Kongo Gumi … Shigemitsu Kongo formed his temple-building company in 578 AD … and it lives on today
August 18, 2019
In 578 AD, a Korean immigrant named Shigemitsu Kongo made his way to Japan at the invitation of the royal family. Buddhism was on the rise in Japan at the time; though it had only been introduced a few decades prior, the Empress consort had been actively encouraging the adoption of Buddhism across Japan. But since the Japanese had no experience building Buddhist temples, they looked overseas for help.
That’s where Kongo came in.
Shigemitsu Kongo was a renowned temple builder, and the royal family in Japan commissioned him to build the Shitenno-ji temple, which still stands today in Osaka. Kongo saw an incredible opportunity. Buddhism was catching on fast, and he knew he could be kept busy for decades building temples.
It turned out to be centuries. Over 14 centuries, in fact.
Shigemitsu Kongo formed his construction company Kongo Gumi in 578 AD, and it lasted 1,428 years independently.
It’s extraordinary that any single enterprise could last so long. Even as late as 2004, temple building accounted for more than 80% of the company’s revenue, which exceeded USD $60 million.
But ten years ago the company finally went under due to the massive debt burden they had accumulated.
It started back in the 1980s. Japan was in the midst of an epic financial bubble thanks to unconstrained credit growth and expansion of the money supply. Central bankers artificially suppressed interest rates, keeping them way too low for way too long. And it created a huge asset bubble. Asset prices in Japan got so out of control that for a short time during the 1980s, it was said that the grounds of the imperial palace in Tokyo were worth more than all of the real estate in the entire state of California.
As part of this bubble, banks had relaxed their lending standards and were handing out loans to just about anyone. And many Japanese companies took on vast amounts of debt, including Kongo Gumi. Debt was like a popular drug. Everyone was doing it. But when the bubble burst in 1989, asset prices collapsed. And companies that had borrowed heavily were left with nothing but debt.
Kongo Gumi didn’t go out of business right away. The company was able to limp along for more than two decades on basic life support. Soon they were borrowing money just to pay interest on the money they had already borrowed, even though interest rates were at record lows. But eventually the company’s revenues were no longer sufficient to service the debt.
And in 2006 Kongo Gumi was forced into liquidation.
This company lasted over 1,400 years.
They survived countless political crises, wars, and natural disasters. They survived the Meiji Restoration in the 1800s, a period in which the government set out to eradicate Buddhism from Japan, and hence, the temple building industry. They even survived two atomic bombs.
Today however the brand lives on. Now part of the Takamatsu Construction Group it is called Kongogumi Engineering Co Ltd with shrine and temple construction 80% of its activity.
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