OHMURA SHIGYO CO.,LTD.

Business Details

Omura Paper Industries is a single-segment company engaged in the manufacture and sale of Corrugated Cardboard Sheets, Corrugated Cardboard Cases, Labels, packaging materials, and other products. Through a regionally-focused factory network with strengths in small-lot, multi-item, short-lead-time production, the company responds to increasingly individualized and diversified customer demand for corrugated cardboard. The sales composition consists of Cases (65.8%), Sheets (17.3%), Other (13.5%), and Labels (3.4%). The business is centered on made-to-order production for domestic customers, with over 90% of sales attributable to customers within Japan. Sales for FY2026 (ending March 2026) were ¥5,953 million (up 0.2% year on year).

Recent Overview

Amid nearly flat sales, profit improved significantly due to appropriate pricing and the absence of prior-year impairment losses

In FY2026 (ending March 2026), net sales were ¥5,953 million (up 0.2% year on year), roughly flat, but gross profit expanded to ¥1,630 million (up 6.2% year on year) through the pursuit of appropriate product pricing and development of existing and new customers. Impairment losses, which had been ¥314 million in the prior fiscal year, fell sharply to ¥5 million in the current fiscal year, turning pre-tax income to ¥355 million (versus a loss of ¥31 million in the prior fiscal year). Furthermore, the recognition of deferred tax assets (income tax adjustment of -¥134 million) secured net income for the period of ¥365 million. The elimination of ¥602 million in notes payable reduced liabilities by ¥535 million, improving the equity ratio to 77.7% (from 71.0% in the prior fiscal year). For FY2027 (ending March 2027), the company plans net sales of ¥6,300 million (up 5.8% year on year) and operating income of ¥421 million (up 20.0% year on year).

Key Products

Growth Drivers

• Improvement in gross profit margin through the pursuit of appropriate product pricing (gross profit margin of 27.4%, up from 25.9% in the prior fiscal year)
• Expansion of Corrugated Cardboard Sheets production volume and sales (up 0.4% and 3.4% year on year, respectively)
• Continuation of the differentiation strategy based on small-lot, multi-item, short-lead-time capabilities
• Strengthening relationships with existing customers and developing new customers
• Sustained investment in tangible fixed assets (¥116 million in capital expenditure for the fiscal year) to maintain and enhance production capacity
• Reduction in the effective tax rate through recognition of deferred tax assets (total corporate income taxes etc. of -¥10 million for the fiscal year)

Risks

• Cost pressure from persistently high prices of key raw materials (base paper), with material costs accounting for 66.0% of manufacturing cost
• Increase in SG&A expenses due to rising labor costs, transportation costs, and resource prices (shipping expenses of ¥410 million, salaries and allowances of ¥310 million)
• Risk of further increases in crude oil and energy prices amid heightened tensions in the Middle East
• Uncertainty in the external environment due to U.S. tariff policy and heightened tensions in Japan-China relations
• Impact of continued yen depreciation on raw material procurement costs
• Sluggish demand across the industry, with nationwide corrugated cardboard production at 99.7% of the prior-year level
• Risk of increased lease liability costs (totaling ¥264 million between current and fixed liabilities) amid rising interest rate trends
• Risk of future cash outflows due to provisions such as the provision for retirement benefits for directors (¥487 million)