ENVALITH
昭栄薬品株式会社 logo

SHOEI YAKUHIN CO.,LTD.

3537・Standard Market・Wholesale Trade

Official website
昭栄薬品株式会社 logo
SHOEI YAKUHIN CO.,LTD.3537

Business

Shoei Chemical Inc. is a specialized chemical trading company founded in 1937, whose core operations center on the Chemical Products Business (92.5% of sales composition), which mainly handles Oleochemicals derived from natural oils and fats such as palm oil and coconut oil, along with Surfactants. The company operates three segments in total, including the Daily Necessities Business and the Civil Engineering & Construction Materials Business. As a major domestic distributor for Kao Corporation, the company distributes fatty acids, fatty alcohols, Surfactants, and other products widely across the value chain from upstream to downstream, while also expanding globally through overseas subsidiaries in Shanghai and Thailand. Its major customers span a wide range of industries, including detergent, cosmetics, textile, automotive parts, and civil engineering/construction-related manufacturers. Consolidated net sales for FY2026 (ending March 2026) reached ¥26,922 million.

Business Model

The company has built a multi-tier distribution model, sourcing Oleochemicals from oil and fat manufacturers and selling to final product manufacturers via intermediate product makers such as Surfactants producers. Rather than acting as a mere intermediary, it differentiates itself by leveraging its accumulated Surfactants expertise to provide raw material selection support and new product development support. In the Daily Necessities Business, it enters niche markets through OEM planning and small-lot supply, while in the Civil Engineering & Construction Materials Business it does so through exclusive supply arrangements based on patent licensing agreements.

Company Strengths

The company began selling fatty acids and fatty acid derivatives for Kao Corporation in 1951 and currently maintains a continuous supply agreement (automatically renewed annually) as Kao's primary domestic distributor. It also holds the exclusive domestic sales rights for cement admixtures used in the jet grouting method, establishing a supply position for certain products that effectively excludes competitors.

The absolute amount of gross profit, a key management target indicator, reached ¥2,163 million (up 3.1% year on year) in FY2026 (ending March 2026), marking a record high for the fifth consecutive period. Driven by the Chemical Products Business, the company has continuously delivered results significantly exceeding initial plans, with proposal-based sales activities expanding and deepening relationships with existing customers contributing to the stability of its earnings base.

In the Civil Engineering & Construction Materials Business, the company has built a system for exclusive supply of raw materials for specific construction methods, including exclusive sales of contaminated soil purification agents based on a joint patent (Patent No. 6674741) with Fuji Oil Co., Ltd. and Konoike Construction Co., Ltd., and exclusive domestic sales of heavy metal solidification/insolubilization agents under a basic transaction agreement with UBE Material Industries, Ltd., making it difficult for competitors to enter the market.

ENVALITH's Perspective

In FY2026 (ending March 2026), the company achieved revenue growth to ¥26,921 million (up 7.6% year on year), but operating profit declined to ¥504 million (down 9.8% year on year). Gross profit rose 3.1% year on year to a record ¥2,163 million, but selling, general and administrative expenses expanded to ¥1,659 million (up 7.8% year on year), weighing on profit. In the FY2027 (ending March 2027) forecast, SG&A expenses are projected to increase a further 4.2% to ¥1,729 million, making the response to this rising cost trend key to improving profitability.

The consolidated earnings forecast for FY2027 (ending March 2027) calls for revenue of ¥27,267 million (up 1.3% year on year), operating profit of ¥441 million (down 12.6% year on year), ordinary profit of ¥629 million (down 13.3% year on year), and net profit of ¥437 million (down 21.4% year on year), indicating a significant revenue increase alongside a profit decline. External risks include continued global economic uncertainty stemming from US trade policy, as well as ongoing resource price volatility and foreign exchange fluctuations, with a decline in palm oil prices potentially creating downward pressure on selling prices. Dividend per share is expected to revert to the ordinary dividend of ¥41, excluding the ¥5 listing commemorative dividend, which is a point to note as it represents a substantive decline in the dividend level.

In FY2026 (ending March 2026), the Daily Necessities Business saw a significant deterioration, with revenue of ¥726 million (down 9.1% year on year) and segment profit of ¥49 million (down 33.8% year on year), while the Civil Engineering & Construction Materials Business fell into a segment loss of ¥4 million (versus a profit of ¥6 million in the prior period). The structure remains one in which segment profit of ¥630 million from the Chemical Products Business, which accounts for 92.5% of revenue, supports the overall results, and the high dependence on this core business alongside the low profit contribution from the two non-core businesses remains a structural challenge. The concentration risk related to purchasing from and sales to Kao Corporation also warrants continued attention.

Growth Strategy

Leveraging specialized Oleochemicals expertise as its core, the company is advancing market penetration across its three businesses and building out its global network.

Continuing to expand sales to major domestic customers in automotive-related and textile treatment agent-related fields through proposal-based sales via face-to-face and web-based negotiations. In FY2026 (ending March 2026), net sales reached ¥24,899 million (up 8.9% year on year). For FY2027 (ending March 2026), net sales of ¥25,113 million (up 0.9% year on year) are budgeted.

Promoting expansion of chemical product sales to emerging markets and proposals for environmental solutions business by leveraging overseas subsidiaries in Shanghai and Thailand. This effort continued in FY2026 (ending March 2026), with the aim of deepening the global network.

Promoting new product planning under the theme of "safety and security" leveraging specialized knowledge of Surfactants, and expanding adoption among existing and new customers. In FY2026 (ending March 2026), net sales struggled, declining 9.1% year on year due to consumer spending restraint amid rising prices. For FY2027 (ending March 2026), net sales of ¥768 million (up 5.7% year on year) are budgeted, aiming for a recovery.

Aiming to capture new demand from IR-related construction, natural disaster recovery projects, and infrastructure development, and to return to profitability in this segment, which fell into a loss in FY2026 (ending March 2026). For FY2027 (ending March 2026), net sales of ¥1,386 million (up 7.0% year on year) are budgeted.

The company has set an increase in the absolute amount of gross profit as a key management indicator. In FY2026 (ending March 2026), gross profit reached ¥2,163 million, marking a record high for the fifth consecutive period. For FY2027 (ending March 2026), gross profit of ¥2,170 million (up 0.3% year on year) is expected. The aim is to secure a profit base to maintain the progressive dividend policy.

Last updated: July 19, 2026