NICHIWA SANGYO CO., LTD.
2055・Standard Market・Foods
Business
Nichiwa Sangyo Co., Ltd. is a formula feed manufacturer founded in 1924, whose core business is the feed segment, manufacturing and selling formula feed for poultry, hogs, cattle, and fish at five plants nationwide (Kobe, Mihara, Kagoshima, Hachinohe, and Sakaide). Its consolidated subsidiary Towa Chikusan Co., Ltd. operates the livestock products business, producing and selling livestock products, and the company outsources part of its cattle feed production to affiliate Michinoku Feed Co., Ltd., giving it a vertically integrated business structure spanning from feed to livestock product production. Its principal customers are livestock producers such as poultry, hog, and cattle farmers, and it is listed on the Standard Market of the Tokyo Stock Exchange.
Business Model
A manufacturing and sales model in which corn, soybean meal, and other grain raw materials are procured from international markets, processed into compound feed at the company's own plants, and sold to livestock farmers. Since raw material costs account for the majority of cost of sales, profitability is managed on two fronts: revisions to feed selling prices (price increases/decreases) and reductions in production costs. The livestock business serves a vertically integrated, complementary function linked to the customer base of the feed business.
Company Strengths
The company owns five plants nationwide in Kobe, Mihara, Kagoshima, Hachinohe, and Sakaide, and has built a production and logistics system capable of stably supplying compound feed to livestock farmers in each region. With over 100 years of business continuity since its founding in 1924, relationship-building through close information exchange, study sessions, and technical guidance with customers has contributed to maintaining the customer base.
Consolidated subsidiary Towa Chikusan Co., Ltd. operates Kihoku Farm, Unzen Farm, Mishima Farm and others, forming a vertically integrated model in which the feed business and livestock business are linked. In-house supply of feed is expected to have the effect of internalizing raw material costs, and in R&D as well, the two businesses collaborate to conduct testing and analysis at the company's own farms.
Cash and cash equivalents at the end of FY2026 (ending March 2026) reached ¥9,390 million, and total net assets stood at ¥19,039 million, indicating a stable financial base. The policy is to fund short-term working capital primarily through internal funds and borrowings from financial institutions, while covering capital expenditures with internal funds, thereby securing financial flexibility.
ENVALITH's Perspective
Performance Trend
Revenue peaked at ¥54,659 million in FY2023 (ended March 2023) and has declined for three consecutive fiscal years, reaching ¥45,579 million in FY2026 (ending March 2026), down 6.2% year on year. The main cause was reductions in compound feed prices implemented three times (April, July, and October 2025). On the other hand, operating profit rose sharply to ¥1,456 million (up 60.7% year on year), the highest level in five fiscal years, mainly due to a significant reduction in cost of sales driven by falling raw material prices (corn and soybean meal). The gross profit margin improved from 7.3% to 9.1%. However, net income for the period was limited to ¥378 million due to the recognition of an impairment loss of ¥633 million. For the coming fiscal year, revenue is expected to recover to ¥50,000 million, while operating profit is forecast to decline sharply to ¥500 million, reflecting the emerging risk of a renewed rise in raw material prices.
Growth Strategy
Centered on production cost reduction, human resource development, and livestock disease prevention, the company aims for net sales of ¥50,000 million next fiscal year
Following three price reductions in April, July, and October 2025, a price increase was implemented in January 2026. The company maintains a system for flexibly revising prices in response to raw material price trends, passing increases in cost of sales ratio through to selling prices. The target for the next fiscal year is net sales of ¥50,000 million (up 9.7% year on year).
The company is promoting cost reduction through more efficient manufacturing processes and equipment upgrades. In FY2026 (ending March 2026), cost of sales was reduced by ¥3,571 million year on year, achieving an operating margin of 3.2% (versus 1.9% in the previous fiscal year). With raw material price increases expected next fiscal year, continued cost management remains a challenge.
The company has explicitly identified diversification and development of human resources, along with prevention measures against livestock diseases (such as avian influenza), as management challenges. The livestock business has shown some progress, turning profitable (from a loss of ¥127 million in the previous fiscal year to a profit of ¥5 million in the current fiscal year), but an impairment loss of ¥633 million continues to be recorded, indicating a continued need to improve asset efficiency.
The company maintains a year-end dividend of ¥6 per share (forecast at ¥6 for both FY2026 and FY2027, ending March 2026 and March 2027, respectively). The dividend payout ratio was 28.7% in FY2026 (ending March 2026). The basic policy is to strengthen the financial base while ensuring continued stable dividends, securing stability in shareholder returns.
Last updated: July 19, 2026