ENVALITH
イチカワ株式会社 logo

ICHIKAWA CO., LTD.

3513・Standard Market・Textiles & Apparels

Official website
イチカワ株式会社 logo
ICHIKAWA CO., LTD.3513

Business

Ichikawa Co., Ltd. was founded in 1918 and listed on the Tokyo Stock Exchange in 1951, operating as a manufacturer specializing in paper machine clothing. Its core products are Paper Machine Felt and Paper Machine Belt (including Shoe Press Belt) used in the papermaking process, supplied worldwide from its sole domestic manufacturing base (the Kashiwa and Iwama plants). Through seven consolidated subsidiaries, the company operates sales bases in North America, Europe, China, and Thailand, and the overseas sales ratio reached 63.4% in FY2026 (ending March 2026). Its main customers are paper and paperboard manufacturers both in Japan and overseas, and the company is pursuing global share expansion backed by international recognition for quality, particularly for belts used in tissue paper production. The company also operates an Industrial Felt business, but the majority of sales is accounted for by the Paper Machine Clothing Business.

Business Model

The company consolidates its manufacturing function in Japan (Kashiwa and Iwama plants) and adopts a vertical division-of-labor model in which overseas subsidiaries (North America, Europe, China, and Thailand) sell products in their respective regions. Under this structure, the Japan segment supplies products internally to overseas subsidiaries (internal sales of ¥4,073 million in FY2026 (ending March 2026), up 24.7% year on year), and each regional subsidiary sells to local customers, thereby also capturing foreign exchange gains. Through the twin pillars of expanding sales of high-value-added products such as belts for sanitary paper and improving production efficiency, the company achieved an operating margin of 10.6% (FY2026 (ending March 2026)).

Company Strengths

The company has concentrated its manufacturing function in Japan, and since first exporting Shoe Press Belts to the U.S. in 1988, it has earned a global reputation for quality. In FY2026 (ending March 2026), new belt production equipment came online, improving production capacity. The Japan segment's operating profit remained highly profitable at ¥2,964 million (up 8.8% year on year), with the advantages in technology and quality control derived from consolidated manufacturing sites underpinning its earnings base.

Starting with the establishment of a U.S. local subsidiary in 1984, the company built sales bases in stages: Europe in 2001, China in 2005, and Thailand in 2018. In FY2026 (ending March 2026), overseas sales reached ¥9,376 million (up 11.1% year on year), with the overseas sales ratio reaching 63.4%. All bases in North America, Europe, China, and Thailand achieved increased sales, and the sales network built up over many years makes short-term imitation by competitors difficult.

As of the end of FY2026 (ending March 2026), net assets stood at ¥24,070 million, and against total assets of ¥32,078 million, liabilities remained limited to ¥8,008 million. Investment securities increased by ¥1,574 million year on year, enhancing financial assets. Operating cash flow secured ¥1,862 million, and the company was able to fund capital expenditures of ¥1,981 million with its own funds while also carrying out dividend payments of ¥351 million and share buybacks of ¥483 million, demonstrating its strong financial capacity.

ENVALITH's Perspective

In FY2026 (ending March 2026), the company achieved record-high profit levels, with net sales of ¥14,791 million (up 6.1% year on year), operating profit of ¥1,570 million (up 46.3%), and profit attributable to owners of parent of ¥1,173 million (up 50.0%). However, the forecast for FY2027 (ending March 2026) [sic] anticipates net sales of ¥14,700 million (down 0.6% year on year) and operating profit of ¥1,300 million (down 17.2%), representing a decline in both revenue and profit. This is mainly attributable to rising raw material and fuel costs stemming from Middle East tensions and the conservative foreign exchange assumptions (1 USD = ¥150, 1 EUR = ¥175); the extent of any divergence from actual results will be a key point of focus.

While domestic Paper Machine Felt continues to face structural demand contraction due to the digitalization of paper, belts for sanitary paper expanded sales volumes in North America, Europe, China, and Thailand, driving increased revenue and profit for the group as a whole. The improvement in the utilization rate of the new belt production facility that began operating in FY2026 (ending March 2026) (an increase in tangible and intangible fixed assets of ¥1,981 million) and the progress of investment recovery will be an important point to watch in determining future profitability.

Overseas segments account for approximately 43% of external net sales; a weaker yen boosts performance through translation effects, while a stronger yen becomes a headwind. The exchange rate assumptions underlying the FY2027 (ending March 2026) [sic] forecast are set at 1 USD = ¥150 and 1 EUR = ¥175, but combined with surging raw material and fuel prices due to US tariff policy and the prolonged situation in the Middle East, the volatility in business performance is significant. It should also be noted that the dissolution and liquidation of the Thai subsidiary (ICHIKAWA ASIA CO., LTD.) has been resolved, and its impact on the consolidated financial statements is currently under review.

Growth Strategy

NE-27 through the pursuit of three pillars: global growth, improved profitability, and strengthening the business foundation

Belts for sanitary paper, which have earned a global reputation for quality, are positioned as a strategic product, and sales expansion is being pursued across all regions, including North America, Europe, China, and Thailand. New production equipment came online in FY2026 (ending March 2026), improving production capacity, and in FY2027 (ending March 2027) the Company aims to maximize utilization of this equipment to improve production efficiency and expand supply.

The Company will continue to expand sales of Paper Machine Felt and Paper Machine Belt through its sales bases in North America, Europe, China, and Thailand. In China, some customer transactions are being transferred to subsidiary-based sales to strengthen local responsiveness. The Thailand subsidiary (IAC) will be dissolved and liquidated, and the Company will shift to a sales expansion structure for the Southeast Asia and India markets utilizing local distributor networks.

Ichikawa Techno Fabrics, a subsidiary engaged in sales of Industrial Felt, will be absorbed via merger effective June 1, 2026, with the aim of expanding the performance of the Industrial Materials Business and concentrating and streamlining management resources in line with "IK VISION2030." The impact on the consolidated financial statements is expected to be minor, with the primary purpose being to simplify business operations.

The Company will continue to optimize its Paper Machine Felt production structure while promoting a shift of resources toward higher value-added products through a review of belt production equipment. In response to soaring raw material and fuel costs driven by conditions in the Middle East, the Company aims to absorb costs through improved production efficiency. The earnings forecast for FY2027 (ending March 2027) explicitly identifies rising raw material and fuel costs as a key risk.

Last updated: July 19, 2026