SUMITOMO CHEMICAL COMPANY, LIMITED
4005・Prime Market・Chemicals
Business
The Sumitomo Chemical Group consists of the company and 214 affiliated companies, forming a comprehensive chemical enterprise. It operates five segments: Agro & Life Solutions (agrochemicals, feed additives), ICT & Mobility Solutions (semiconductor materials, display materials), Advanced Medical Solutions (pharmaceutical CDMO), Essential & Green Materials (petrochemicals, basic chemicals), and Sumitomo Pharma (pharmaceuticals). With a history dating back to its founding in 1913, the company leverages organic synthesis technology as a core strength, conducting global business operations across the fields of agriculture, semiconductors, pharmaceuticals, and materials. Under the FY2025-2027 (ending March 2027) Medium-Term Management Plan, the company has set forth its vision to become an "Innovative Solution Provider," concentrating management resources into the four fields of food, ICT, healthcare, and the environment.
Business Model
The company centers on the manufacture and sale of high-value-added products such as Agrochemicals, semiconductor materials, and Pharmaceuticals, combined with knowledge-intensive revenue streams including technology licensing and CDMO contract services. Low-profitability businesses such as Petrochemicals are being scaled down through equity divestitures and business integration, with capital being reallocated to growth segments. Core operating profit for FY2025 reached ¥208,400 million (¥208.4 billion), and the company has set medium- to long-term financial targets of ROE of 10% or higher, ROIC of 7% or higher, and a D/E ratio of approximately 0.7x.
Company Strengths
The company holds multiple next-generation blockbuster candidates, including its independently developed fungicide active ingredient "Indiflin" (launched in India and South America), the herbicide "Rapidicil" (winner of the Nikkei Excellent Products and Services Awards Global Category in 2025), and the fungicide "Pabecto." The company is advancing registration and sales expansion in key markets such as South America, India, and Europe, with the Agro & Life Solutions segment's core operating income maintained at ¥56,334 million.
The company has built up a track record in advanced materials such as EUV-compatible photoresists, high-purity chemicals, and liquid-crystal coating-type polarizing film, and acquired semiconductor chemical bases in Taiwan and the U.S. through the acquisition of Asia Union Electronic Chemical Corporation (completed January 2026). The ICT & Mobility Solutions segment posted revenue of ¥574,162 million, with continued capital expenditure of ¥52,970 million strengthening production capacity.
In March 2026, the company obtained conditional and time-limited approval for "Amshepli," the world's first iPS cell-derived product for the treatment of Parkinson's disease. The company operates CDMO businesses spanning three fields—Therapeutic Oligonucleotide CDMO, Advanced Small-Molecule Pharmaceutical CDMO, and Regenerative & Cell Therapy CDMO—and established a CRO base in Massachusetts, U.S., in April 2025. The Advanced Medical Solutions segment posted revenue of ¥58,601 million, with full-scale production currently underway.
ENVALITH's Perspective
Performance Trend
Revenue in FY2026 (ending March 2026) declined to ¥2,328,515 million (down 10.7% year on year). The main cause was a decrease in shipments associated with business transfers and withdrawals in Essential & Green Materials (revenue in that segment fell by ¥220.2 billion year on year). On the other hand, core operating income improved substantially to ¥208,376 million (up 48.3% year on year), driven by Sumitomo Pharma's expanded sales of key products in North America and structural improvement effects (core operating income in that segment rose by ¥73.1 billion year on year), as well as improved terms of trade and gains on business transfers in Essential & Green Materials (an improvement of ¥72.9 billion year on year in that segment). Operating income decreased to ¥151,744 million (down 21.4% year on year), mainly due to a deterioration in equity-method investment income/loss, which swung from +¥20,639 million in the previous fiscal year to -¥43,271 million. Profit attributable to owners of the parent was ¥60,947 million (up 57.9% year on year). Looking at the trend over the past five fiscal years, operating income moved from ¥215,003 million in FY2022, to -¥30,984 million in FY2023, to -¥488,826 million in FY2024, to ¥193,033 million in FY2025, and to ¥151,744 million in FY2026, indicating a recovery phase from a period of major losses. As for external factors, the average exchange rate appreciated from ¥152.62/dollar in the previous fiscal year to ¥150.67/dollar, putting pressure on export proceeds, while naphtha prices fell from ¥75,600/KL to ¥65,200/KL.
Growth Strategy
The company aims to achieve core operating income of ¥215.0 billion for FY2027 (ending March 2027) through the concentration of management resources on Agro & Life Solutions and ICT & Mobility Solutions, together with ROIC-focused management.
Continuing to improve profitability through expanded sales of core North American products (Orgovyx and Gemtesa) and reduced R&D expenses. Through the public offering of new shares in April 2026 (with net proceeds expected to reach up to ¥111,566 million), the company plans to make R&D investments in the oncology, neurodegenerative disease, and regenerative & cell therapy fields by the end of March 2029. Core operating income forecast for FY2027 (ending March 2027) is ¥94.0 billion.
Advancing the reorganization of non-core businesses, including withdrawal from the aluminum business, transfer of the synthetic resins business, and partial sale of shares in Petro Rabigh (Equity-Method Affiliate). Core operating income for FY2026 (ending March 2026) turned profitable at ¥14,446 million (including ¥55,807 million in gains related to business transfers). The FY2027 (ending March 2027) forecast is ¥20.0 billion. Structural improvement in equity-method investment gains and losses remains a challenge.
Advancing the launch and regional expansion of next-generation agrochemicals (Indiflin, Rapidicil, etc.) in key markets, along with expanded sales of chemical, bio-rational, and botanical products. Core operating income for FY2026 (ending March 2026) reached ¥56,334 million, an increase from the previous fiscal year. The FY2027 (ending March 2027) forecast is ¥65.0 billion (up ¥8.7 billion year on year), with continued growth expected.
Continuing to expand production capacity and develop advanced materials for Semiconductor Process Materials (photoresists, high-purity chemicals). Capital expenditures of ¥52,970 million were made in FY2026 (ending March 2026). In response to intensifying price competition in display materials, the company is shifting toward high-performance segments. Core operating income forecast for FY2027 (ending March 2027) is ¥55.0 billion (up ¥2.0 billion year on year).
Achieved a reduction in interest-bearing debt (¥1,151,500 million at the end of FY2026 (ending March 2026), down ¥134,700 million from the previous fiscal year) and an improvement in the D/E ratio to 0.93x. The annual dividend was increased to ¥13.50 (from ¥9.00 in the previous fiscal year), with ¥16.00 planned for FY2027 (ending March 2027) (dividend payout ratio of 37.7%). The company aims to stably achieve a dividend payout ratio of approximately 30% over the medium to long term.
Last updated: July 19, 2026