katakura & co-op agri corporation

Business Details

Produces Compound & Chemical Fertilizers, Paste Fertilizer, Nursery Soil, and other products, providing a wide range of fertilizer solutions for domestic agriculture. The main customer is JA Zen-Noh. Based on the medium- to long-term growth strategy, the company is pursuing the establishment of a low-cost production structure through the reorganization of production sites and consolidation of product items, as well as a transition toward an agricultural solutions-type business utilizing remote sensing and AI soil analysis technology. During the fiscal year under review, structural reform expenses of ¥1,980 million were recorded as extraordinary loss.

Recent Overview

Sales increased due to higher sales volume and price revisions, but segment profit declined significantly due to increased system costs and inventory valuation impact.

In the Fertilizer Business for FY2026 (ending March 2026), net sales reached ¥35,164 million (up 4.4% year on year), driven by an increase in sales volume and fertilizer price revisions implemented in June and November in response to rising raw material prices. On the profit side, although there were factors boosting profit related to raw material and product inventory procured before the price revisions, segment profit was limited to ¥6 million (down 79.0% year on year) due to increased system-related expenses and the impact of inventory valuation, among other factors. In addition, in connection with the reorganization of production sites (production scheduled to end at 5 of the 6 target plants) based on the medium- to long-term growth strategy, structural reform expenses of ¥1,980 million were recorded as extraordinary loss.

Key Products

Growth Drivers

• Improvement in sales unit price through fertilizer price revisions (June and November 2025)
• Expansion of sales scale through increased sales volume
• Establishment of a low-cost production structure through reorganization of production sites (production ended at 5 of the 6 target plants) and consolidation of production items
• Organizational efficiency improvement through introduction of a manufacturing-sales separation structure and rationalization of administrative departments
• Capture of new demand through nationwide sales expansion of Biostimulant Materials
• Transition toward an agricultural solutions-type business through the launch of the soil diagnostic service utilizing near-infrared spectroscopy and AI
• Enhancement of customer added value through the building of a proposal-based sales model utilizing remote sensing

Risks

• Downward pressure on sales unit price and volume due to the continuation of the trend toward shifting to lower-priced fertilizers
• Risk of international raw material prices remaining elevated due to dependence on overseas fertilizer raw materials and intensifying tensions in the Middle East and yen depreciation (not factored into earnings forecasts)
• Risk of additional structural reform expenses being recorded in connection with the reorganization of production sites (structural reform provision already recorded: ¥368 million current, ¥997 million non-current)
• Risk of sales concentration with JA Zen-Noh
• Risk of increased operating costs following the launch of the new core system (system-related expenses continued to weigh on profit during the fiscal year under review)
• Risk of valuation losses on inventories (inventory valuation impact due to raw material price fluctuations weighed on profit during the fiscal year under review)
• Risk of fluctuations in planted acreage and fertilizer application volume due to seasonal variation in agricultural demand and climate change