Mitsui DM Sugar Co., Ltd.

Business Details

The core segment of the DM Mitsui Sugar Group, engaged in the manufacture and sale of raw sugar, refined sugar, and sugar-related products. Domestically, the segment serves household and commercial-use markets, with Mitsui & Co., Ltd. as a major customer. Overseas, the group operates from a base in Singapore (SIS'88 Pte Ltd), leveraging new production facilities in the UAE and Vietnam to manufacture and sell refined sugar and processed sugar for Southeast Asian and Middle Eastern markets, while also holding equity-method affiliates in China and Thailand. Against a backdrop of long-term decline in domestic sugar consumption, the segment is pursuing overseas business expansion and supply chain optimization.

Recent Overview

Net sales increased slightly, but operating income declined 2.6% year on year due to lower average selling prices and increased costs. Overseas, new production bases moved into full-scale operation.

In the Sugar Business for FY2026 (ending March 2026), net sales were ¥152,201 million (up 0.6% year on year) and operating income was ¥11,440 million (down 2.6% year on year). Domestically, profit was squeezed by a decline in average selling prices resulting from the November shipping price reduction, as well as elevated costs related to the construction of a new core IT system and energy-related expenses. On the other hand, contract manufacturing from Wada Seito Co., Ltd. moved into full-scale operation. Overseas, sales volume recovered due to the operation of new production bases in the UAE and Vietnam. In addition, the recoverability of goodwill and intangible fixed assets related to SIS'88 Pte Ltd and its subsidiaries was reassessed, resulting in an impairment loss of ¥6,320 million (attributed entirely to the Sugar Business segment). Production at the Group's Kyushu regional production base is scheduled to end at the end of September 2026.

Key Products

Growth Drivers

• Recovery in sales volume and business expansion in Southeast Asian and Middle Eastern markets driven by full-scale operation of new production bases in the UAE and Vietnam
• Contribution to Group earnings from full-scale operation of contract manufacturing under the business alliance with Wada Seito Co., Ltd.
• Efficiency gains and cost reductions in domestic sugar production following completion of the reorganization of production bases in the Kyushu region (planned for end of September 2026)
• Promotion of production, sales, and logistics reform through use of AI (an initiative under the new Medium-Term Management Plan 2030)
• Capture of overseas markets through equity-method affiliates such as COFCO Tunhe Sugar (Liaoning) Co., Ltd. (China) and Kaset Phol Sugar Ltd. (Thailand)
• Special demand associated with the Osaka-Kansai Expo and strong seasoning demand from autumn onward (results for FY2026 (ending March 2026))

Risks

• Long-term downward trend in domestic sugar consumption (due to population decline and diversification of sweetener demand)
• Risk from fluctuations in overseas raw sugar prices (prices fell to the high 13-cent range at one point during FY2026 (ending March 2026))
• Elevated ocean freight, packaging material, and logistics costs stemming from higher energy prices
• Risk of failure to achieve business plan targets at overseas subsidiaries (under SIS'88 Pte Ltd) and risk of additional impairment of goodwill and intangible assets
• Risk that lower average selling prices resulting from shipping price reductions will squeeze profits
• Risk of earnings deterioration at overseas affiliates in Thailand, China, and elsewhere due to drought, foreign exchange fluctuations, and other factors
• Risk of intensified competition from imported sugar due to progress in economic partnership agreements such as the TPP
• Risk of increased consulting and manufacturing costs associated with the construction of a new core IT system