KUREHA CORPORATION

Business Details

Main products include PPS Resin, Polyvinylidene Fluoride Resin, PGA (Polyglycolic Acid) Resin Processed Products, carbon fiber, and Spherical Activated Carbon. The segment offers Polyvinylidene Fluoride Resin for lithium-ion secondary battery binders, PGA Resin Processed Products for shale oil and gas drilling, and PPS Resin for automotive and electronic components, with manufacturing and sales bases both in Japan and overseas supplying globally. The EV and ESS markets are positioned as medium- to long-term growth drivers.

Recent Overview

Polyvinylidene Fluoride Resin declined due to the EV market slowdown, but PGA, PPS, and Spherical Activated Carbon drove increased revenue and a return to profitability.

Revenue for FY2026 (ending March 2026) increased 6.8% year on year to ¥61,279 million, and operating profit/loss turned positive, moving from a loss of ¥1,991 million in the prior period to income of ¥2,134 million. Sales of Polyvinylidene Fluoride Resin declined due to the continued slowdown in the EV market. On the other hand, increased sales of PGA Resin Processed Products and PPS Resin, together with lower raw material prices, contributed positively. The carbon products field also saw increased profit driven by higher sales of Spherical Activated Carbon. However, following a review of future earnings plans for the Polyvinylidene Fluoride Resin business, an impairment loss of ¥33,996 million on fixed assets was recorded (included in consolidated adjustments).

Key Products

Growth Drivers

• Expansion of the ESS (stationary energy storage system) market: the North American market is expected to grow due to the increase in AI data centers and the spread of renewable energy, raising expectations for medium- to long-term demand recovery in Polyvinylidene Fluoride Resin
• Sales expansion and profitability improvement for PGA Resin Processed Products, supported by the firm trend in the shale gas market
• Moderate growth in automotive demand for PPS Resin and expanding demand for optical communication components for data centers
• Continued stable sales growth of Spherical Activated Carbon
• Improved profitability in the functional resin field due to lower raw material prices

Risks

• Risk of delayed demand recovery for Polyvinylidene Fluoride Resin used in lithium-ion secondary battery binders (continued slowdown in the EV market)
• Risk that inventory adjustment phases will continue even after the impairment loss recognized for fixed assets related to the Polyvinylidene Fluoride Resin business
• PGA Resin Processed Products: risk of prolonged weakness in natural gas prices and stagnation in drilling activity
• Impact on demand and supply chains from the slowdown of the Chinese and European economies and changes in U.S. trade policy
• Risk of recurring inventory valuation losses (during production adjustments accompanying revisions to demand forecasts)

Business Details

In the agrochemicals and pharmaceuticals field, the company manufactures and sells Agricultural & Horticultural Fungicides and Kremezin (Agent for Chronic Renal Failure). In the industrial chemicals field, it manufactures and sells Inorganic Chemicals (Caustic Soda, Hydrochloric Acid, Sodium Hypochlorite) and Organic Chemicals (Monochlorobenzene, Paradichlorobenzene, etc.). Kureha Corporation itself serves as the core of manufacturing and sales, with sales also conducted through Kureha Trading Co., Ltd. This segment accounts for approximately 18% of the Group's consolidated revenue (FY2026, ending March 2026).

Recent Overview

Despite lower revenue, operating profit rose 128% year on year on higher agrochemical sales and lower raw material prices; an impairment loss was recorded on chronic renal failure treatment equipment

Revenue for FY2026 (ending March 2026) decreased 3.9% year on year to ¥29,487 million. In the agrochemicals and pharmaceuticals field, increased sales of Agricultural & Horticultural Fungicides offset the decline in Kremezin, resulting in increased revenue and profit for the field overall. In the industrial chemicals field, despite a decline in organic chemical sales, operating profit increased due to lower raw material prices. Meanwhile, an impairment loss of ¥2,504 million was recorded on manufacturing equipment for the chronic renal failure treatment agent, reflecting the emergence of new treatment drugs and drug price reductions (recorded as an adjustment outside the segment). Segment operating profit was ¥1,350 million, up 128.0% year on year.

Key Products

Growth Drivers

• Continued sales expansion of Agricultural & Horticultural Fungicides (strengthening future competitiveness through new agent development)
• Renewed sales expansion in the European market following re-registration of metconazole in Europe
• Progress in research and development of new agricultural fungicides (targeting launch around 2030)
• Continued improvement in profitability in the industrial chemicals field due to lower raw material prices

Risks

• Short-term impact on profitability from increased testing costs related to research and development of new agrochemicals
• Continued contraction of the Kremezin market due to the emergence of new treatment drugs and drug price reductions
• Risk of continued weak demand for industrial chemicals such as caustic soda
• Risk of delays in European re-registration of agrochemicals
• Macroeconomic risks such as U.S. trade policy and foreign exchange fluctuations
• Risk of deteriorating profitability in the industrial chemicals field due to a rebound in raw material prices

Business Details

This segment comprises the consumer goods field, including the household wrap NEW Krewrap (Household Wrap), Kitchen Sink Drainage Bags, Food Storage Containers, and the PVDF fishing line Seaguar, as well as the commercial food packaging materials field, including Vinylidene Chloride Film and Automatic Filling and Tying Machines. The segment has manufacturing and sales bases both in Japan and overseas (the U.S., Vietnam, China, etc.), supported by group companies such as Kureha Gosen Co., Ltd. and Kureha Vietnam Co., Ltd. Sales of heat-shrinkable multilayer film were discontinued in the first half of FY2025 (ended March 2025), and the full-year impact of this discontinuation became apparent in the current period.

Recent Overview

Revenue declined due to the full-year impact of the withdrawal from heat-shrinkable multilayer film, but the consumer goods field achieved higher revenue and profit

Revenue for FY2026 (ending March 2026) was ¥36,724 million (down 9.4% year on year), and operating profit was ¥6,913 million (down 2.6% year on year). In the commercial food packaging materials field, both sales and operating profit declined due to the discontinuation of heat-shrinkable multilayer film sales in the first half of the prior year. In contrast, in the consumer goods field, sales of NEW Krewrap and Seaguar increased, achieving higher revenue and profit for the field overall. The operating profit margin improved to 18.8% from 17.5% in the prior period.

Key Products

Growth Drivers

• Expansion of sales of the PVDF fishing line Seaguar (continued expansion into markets such as China)
• Firm demand in the household wrap market (driven by growing preference for time-saving, efficient cooking styles)
• Maintaining and expanding sales of NEW Krewrap through strengthened marketing initiatives
• Cost improvement effects from raw material price trends (common to fishing line and wrap)
• Promotion of sales expansion and profitability improvement in the commercial food packaging materials field
• Maintaining international competitiveness through food packaging material manufacturing at the Vietnam base (Kureha Vietnam Co., Ltd.)

Risks

• Structural decline in sales scale due to withdrawal from the heat-shrinkable multilayer film business (discontinued in the first half of FY2025 (ended March 2025), with the full-year impact continuing)
• Sluggish growth in sales volume of household wrap due to market maturity and intensifying competition
• Risk of fluctuations in polyvinylidene fluoride raw material prices (common to fishing line and wrap)
• Risk of costs arising from the liquidation procedures of European subsidiaries (Krehalon B.V. and Krehalon Australia Pty Ltd.)
• Impact on fishing line sales from intensifying competition and economic slowdown in the Chinese market
• Uncertainty over profit recovery in the commercial food packaging materials field

Business Details

Kureha Construction Co., Ltd. (which absorbed Kureha Engineering Co., Ltd. through a merger effective April 1, 2026) serves as the core entity, providing Civil Engineering & Construction Work Contracting and Construction Supervision Services. The segment's main customer is Kureha Corporation itself, and by handling the construction and repair of Group facilities in-house, it supports the Group's overall capital investment. The segment handles both public and private construction projects and also receives orders for projects from external customers outside the Group. Revenue of ¥16,013 million in FY2026 (ending March 2026) accounted for approximately 9.9% of the Group's total revenue, forming a stable profit base.

Recent Overview

Large-scale projects in both public and private sectors progressed smoothly, driving increases in both revenue and profit

In FY2026 (ending March 2026), large-scale projects in both public and private construction progressed smoothly, resulting in revenue of ¥16,013 million (up 7.9% year on year) and operating profit of ¥1,533 million (up 10.1% year on year). While the Group as a whole recorded a consolidated operating loss due to the recognition of impairment losses, the Construction-Related Business achieved higher revenue and profit, maintaining a stable contribution to earnings. Effective April 1, 2026, Kureha Construction Co., Ltd. absorbed Kureha Engineering Co., Ltd. through a merger as part of an organizational restructuring. For FY2027 (ending March 2027), the company expects revenue growth driven by strong order intake from external projects.

Key Products

Growth Drivers

• Revenue expansion driven by smooth progress of large-scale projects in both public and private construction
• Revenue expansion from strong order intake for external projects (outlook for FY2027, ending March 2027)
• Strengthening of the business foundation through the merger of Kureha Engineering Co., Ltd. into Kureha Construction Co., Ltd. (April 2026)
• Stable internal order intake through capturing demand for capital investment within the Group

Risks

• Fluctuations in profit margin due to changes in revenue mix (shifts in the proportion of public versus private construction affecting operating profit margin)
• Dependence on demand within the Group (risk that changes in Kureha Corporation's capital investment plans directly affect order intake)
• Risk of deteriorating profitability due to rising costs for construction materials and labor
• External environmental risk affected by trends in public construction order intake
• Risk that rising raw fuel prices, including from risks such as the closure of the Strait of Hormuz, spill over into construction costs

Business Details

This segment comprises Kureha Eco Co., Ltd., which handles Industrial Waste Treatment & Environment-Related Treatment Facilities; Kureha Transport Co., Ltd., responsible for Transportation & Warehousing Services; Kureha Service Co., Ltd., which manages land and buildings and provides various contracted services; the medical corporation Kureha-kai, which operates a hospital and a long-term care health facility; and the other services division of Kureha Trading Co., Ltd. The segment handles logistics, waste treatment, and medical/welfare services within the Group, playing a role in supporting the core manufacturing segments. Revenue from external customers was ¥18,183 million (FY2026, ending March 2026).

Recent Overview

Both revenue and profit declined year on year, mainly due to a decrease in waste treatment volume

In FY2026 (ending March 2026), the Other Related Business segment recorded revenue of ¥18,183 million (down 2.2% year on year) and operating profit of ¥2,592 million (down 11.0% year on year). The main cause was a decrease in waste treatment volume in the environmental business. Other businesses within the segment also saw declines in both sales and operating profit. In addition, as part of an intra-group reorganization, Kureha Service Co., Ltd. absorbed Kureha Analysis Center Co., Ltd. through a merger effective April 1, 2026.

Key Products

Growth Drivers

• Expected increase in intra-group logistics and waste treatment demand driven by strong order growth in the Construction-Related Business
• Efficiency and expansion of analysis and inspection operations through the merger of Kureha Analysis Center Co., Ltd. into Kureha Service Co., Ltd. (April 2026)
• Improved earnings in the medical services division through improved hospital bed occupancy rates
• Firm trend in transportation and warehousing demand supported by the recovery of the Group's overall production activities (including recovery in Polyvinylidene Fluoride Resin demand)

Risks

• Risk of fluctuations in waste treatment volume (revenue and profit declined in FY2026, ending March 2026, due to a decrease in treatment volume)
• Risk of fluctuations in hospital bed occupancy rates and revisions to the medical care system in the hospital business
• High dependence on intra-group transactions, with risk that deteriorating performance in core segments (particularly the Functional Products segment) could spill over
• Risk of increased treatment costs due to rising raw fuel prices (environmental and transportation businesses)
• Risk of integration costs and business transition issues associated with intra-group reorganization (subsidiary mergers)