KURARAY CO.,LTD.
3405・Prime Market・Chemicals
Business
Kuraray Co., Ltd. was founded in 1926 and will mark its 100th anniversary in 2026. It is a specialty chemicals company with five reporting segments: Vinyl Acetate (PVA, EVOH, PVB Film, etc.), Isoprene (elastomers, GENESTAR, etc.), Functional Materials (activated carbon, dental materials, methacrylic resin, etc.), Fibers (Clarino, Vectran, etc.), and Trading. It forms a global group comprising 67 consolidated subsidiaries and 2 equity-method affiliates. With manufacturing and sales sites across Japan, the US, Europe, and Asia, it supplies materials to diverse industries including food packaging, automotive, electronics, construction, and medical. Consolidated net sales for FY2025 (ending December 2025) were ¥808,447 million.
Business Model
Kuraray adopts a vertically integrated business model, manufacturing differentiated materials based on proprietary polymerization and processing technologies at multiple sites across Japan, the US, Europe, and Asia, and selling them globally. The mainstay Vinyl Acetate segment drives high profitability with net sales of ¥404,495 million and an operating margin of 15.5%, complemented by Functional Materials, Fibers, and Trading. The company continues to invest in capital expenditure (¥106,829 million in FY2025 (ending December 2025)) and R&D expenses (¥28,369 million in the same period) to maintain its technological edge and avoid price competition.
Company Strengths
Optical PVA film and EVOH Resin <EVAL> are manufactured at multiple sites across Japan, the US, Europe, and Asia, supplied as the world's leading company. For EVAL, a decision has been made to build a new plant in Singapore, and a global four-site structure is currently being established. ISCC PLUS certification has been expanded to 9 sites domestically and internationally, further advancing differentiation as a sustainable material.
As of the end of December 2025, the equity ratio stood at 57.0% and the interest coverage ratio at 54.2x, maintaining a high level of financial soundness. Operating cash flow secured ¥98,591 million, including depreciation of ¥84,702 million, indicating solid underlying cash generation capability. The interest-bearing debt/operating CF ratio stands at a manageable 2.9 years.
The company has expanded its business domains through strategic M&A, including MonoSol (industrial PVA film, acquired in 2012), Calgon Carbon (activated carbon, acquired in 2018), and Kuraray Noritake Dental (dental materials). In April 2025, the company acquired Nelumbo Inc. of the US, obtaining inorganic surface modification technology. With a workforce of 1,115 R&D personnel, the company advances a two-tier R&D structure spanning divisional and corporate levels.
ENVALITH's Perspective
Performance Trend
Net sales for Q1 of FY2026 (ending December 2026) reached ¥200,913 million (up 3.1% year on year), securing revenue growth, but profits deteriorated significantly, with operating profit at ¥14,870 million (down 20.3% year on year), ordinary profit at ¥13,745 million (down 22.9% year on year), and profit attributable to owners of parent at ¥7,802 million (down 35.0% year on year). The main causes were deterioration in operating rate and price adjustments in the Vinyl Acetate segment (operating profit down 30.7% year on year), an increase in extraordinary losses (¥3,170 million), and higher general and administrative expenses. In the full-year results over the past five fiscal years, net income attributable to owners of parent fell sharply to ¥7,468 million in FY2025, meaning a substantial recovery in the second half is needed to achieve the full-year FY2026 forecast of ¥40,000 million (up 435.6% year on year). As an external factor, rising raw material and fuel costs and logistics disruptions caused by the worsening situation in the Middle East are pressuring earnings. Comprehensive income improved significantly to ¥16,612 million from ¥(15,412) million in the same period of the previous year, aided by an increase in the foreign currency translation adjustment account (¥8,228 million).
Growth Strategy
Advancing concentrated investment in growth businesses and structural improvement of unprofitable businesses simultaneously toward the final year of PASSION 2026
Through the organizational restructuring in January 2026, each business under the Electronics Materials Promotion Division was transferred from "Others" to the "Functional Materials" segment. In Q1 of FY2026 (ending December 2026), Functional Materials segment sales were ¥52,820 million (up 10.5% year on year), and operating income was ¥3,375 million (up 148.2% year on year), a substantial improvement, with integration effects beginning to show in the figures.
Under the medium-term management plan "PASSION 2026," activated carbon and dental materials have been positioned as "growth/expansion businesses," and capital investment continues. Construction in progress at the end of Q1 of FY2026 (ending December 2026) stood at ¥109,345 million (up from ¥96,662 million at the end of the previous fiscal year). Demand for activated carbon remains firm and price revisions are progressing, while sales in the Medical business continue to be generally solid.
Leveraging the reduced depreciation expense resulting from the large-scale impairment loss (¥25,636 million) recorded in the previous fiscal year, the profit structure of the Isoprene segment is being improved. Operating income in Q1 of FY2026 (ending December 2026) was ¥2,889 million (up 2.4% year on year). Sales volume of Heat-Resistant Polyamide Resin <GENESTAR> increased as sales expanded in electrical, electronic, and automotive applications. On the other hand, the negative impact of inventory valuation differences and sluggish demand for construction applications in China remain challenges.
The company is advancing the reorganization of unprofitable businesses, including withdrawal from the dry-process nonwoven fabric business (Fibers segment) and the reduction of production capacity for methyl methacrylate and other products (implemented in July 2025). The Fibers segment turned from an operating loss of ¥598 million in the same period of the previous year to operating income of ¥1,143 million, with the effects of the withdrawal becoming evident. Three companies were also excluded from the scope of consolidation (Kuraray Acrylic (Zhangjiagang) Co., Ltd., WATERLINK (UK) HOLDINGS LIMITED, and one other company).
Based on a resolution of the Board of Directors on February 10, 2026, the acquisition of 5,829 thousand shares of treasury stock for ¥9,999 million was completed on March 23. On May 13, the retirement of 5,830 thousand shares (1.89% of total shares issued) was decided (scheduled for implementation on May 29). Annual dividends for fiscal year 2026 are planned at ¥64 per share, comprising an ordinary dividend of ¥54 plus a commemorative dividend of ¥10 for the company's 100th anniversary. The policy of maintaining a total shareholder return ratio of 50% or more continues.
Last updated: July 17, 2026