ENVALITH
日本曹達株式会社 logo

Nippon Soda Co., Ltd.

4041・Prime Market・Chemicals

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日本曹達株式会社 logo
Nippon Soda Co., Ltd.4041

Business

Nippon Soda Co., Ltd. is a comprehensive chemical manufacturer founded in 1920, comprising the company itself, 29 subsidiaries, and 7 affiliated companies (as of the end of March 2026). Its operations are organized into five segments: Chemical Materials (Industrial Chemicals, Chemical Products, Functional Materials, Pharmaceuticals, etc.), Agribusiness (agrochemical manufacturing and sales), Trading & Logistics (chemical trading and logistics), Engineering (Plant Construction and Civil Engineering & Construction), and Eco Solutions (industrial waste treatment and resource recycling). The company operates four domestic plants (Nihongi, Takaoka, Chiba, and Koriyama) as its main production sites, and maintains a global sales network through NISSO AMERICA and NISSO CHEMICAL EUROPE. Its main customers span a wide range of industries, including pharmaceuticals, agriculture, electronic materials, and chemical distribution.

Business Model

In the core manufacturing segments (Chemical Materials and Agribusiness), the company manufactures high-value-added products based on proprietary technology and generates revenue through direct sales and sales agency arrangements with domestic and overseas customers. Nissan Chemical Trading provides the chemical trading function, Sanwa Warehouse provides the logistics function, and Nissan Engineering captures capital expenditure demand within the group. Investment gains from equity-method affiliates such as IHARABRAS and Novus International also contribute to revenue, resulting in a structure where ordinary income and net income exceed operating income.

Company Strengths

The company holds multiple proprietary in-house developed products, including the fungicides "Pyziflor" and "Migiwa," the acaricide "Danitol," the pharmaceutical excipient "NISSO HPC," the resin additive "NISSO-PB," and the KrF photoresist material "VP Polymer." R&D expenses totaled ¥7,098 million (4.7% of consolidated net sales), with ¥4,600 million allocated to the Agribusiness segment alone, reflecting ongoing efforts to enrich the product pipeline.

As of the end of FY2026 (ending March 2026), the equity ratio stood at 66.6%, with net assets reaching ¥206,094 million. Funding is primarily covered by operating cash flow and internal funds, and the company also maintains a commitment line agreement totaling ¥4,500 million with two partner banks. This high level of financial soundness enables the company to pursue both active capital expenditure (¥10,706 million in the current period) and shareholder returns (dividend payments of ¥8,193 million and share buybacks of ¥5,009 million) simultaneously.

Through NISSO AMERICA INC., established in 1986, and NISSO CHEMICAL EUROPE GmbH, established in 1992, the company has built a system for consignment sales of Chemical Materials and Agribusiness products overseas. Distribution inventory of agrochemicals for Europe recovered to appropriate levels in FY2026 (ending March 2026), leading to a recovery in demand. Equity-method affiliates IHARABRAS (Brazil) and Novus International (US) also contributed to earnings, with equity in earnings of affiliates reaching ¥6,055 million.

ENVALITH's Perspective

In FY2026 (ending March 2026), the core business posted lower revenue and profit, with sales of ¥152,091 million (down 2.0% year on year) and operating profit of ¥14,970 million (down 6.8% year on year). The main cause was a decline in large-scale plant construction orders in Engineering (segment sales down 35.2% year on year). On the other hand, equity in earnings of affiliates of ¥6,055 million (2.2x year on year) and gain on sale of investment securities of ¥5,067 million contributed positively, and profit attributable to owners of parent reached a record high of ¥18,271 million (up 21.7% year on year). The fact that profit contributions from outside the core business were so significant is a structural point worth noting.

The consolidated earnings forecast for FY2027 (ending March 2027) calls for sales of ¥152,200 million (roughly flat year on year), operating profit of ¥14,200 million (down 5.1% year on year), ordinary profit of ¥19,000 million (down 17.4% year on year), and net profit of ¥15,800 million (down 13.5% year on year), with declines expected at every profit stage. In Agribusiness, intensifying competition from generic agrochemicals in South America is expected to continue, and the risk of softening agrochemical market conditions remains as an external factor. Capital expenditure is planned to increase sharply to ¥22,000 million (roughly double the previous year), and its impact on free cash flow warrants close attention.

In May 2026, the company disclosed its new medium-term management plan, "Kagaku de, Kagayaku. Stage III" (chemistry that shines) (FY2026–FY2029). ROE is on an improving trend, reaching 9.3% in FY2026 (ending March 2026) (up from 8.0% in the previous fiscal year), but achieving the long-term management vision's target of ROE of 10% or higher by 2030 will require a recovery in Agribusiness profitability and accelerated sales expansion in Functional Materials and pharmaceutical additives. Under the progressive dividend policy, the annual dividend for FY2026 (ending March 2026) is set at ¥160 (an increase from the prior-year equivalent of ¥140), indicating steady progress in shareholder returns, which is also favorable from a dividend yield perspective.

Growth Strategy

Under the new medium-term management plan "Stage Ⅲ," the company aims to achieve ROE of 10% or higher through expanded sales of high-value-added products, global agrochemical expansion, and improved asset efficiency.

Pharmaceutical excipient "NISSO HPC," resin additive "NISSO-PB," and KrF photoresist material "VP Polymer" are expected to continue their solid performance in FY2027 (ending March 2027) as well. Chemical Materials sales in FY2026 (ending March 2026) grew steadily, up 2.6% year on year to ¥37,406 million, with continued focused investment in the functional materials and pharmaceuticals fields.

The company is working to further expand sales and improve profitability of the fungicides "Pyciroc" and "Migiwa" and the acaricide "Daniorte." Demand recovery has been confirmed in Europe following the completion of distribution inventory normalization, but intensifying competition from generic agrochemicals is expected to continue in South America, and the FY2027 (ending March 2027) Agribusiness operating profit forecast is ¥4,500 million, a decrease of ¥985 million year on year.

The company has formulated and disclosed a new medium-term management plan as the second half phase of its long-term management vision (FY2021 (ending March 2021) to FY2030 (ending March 2030)). Capital expenditure will be significantly expanded to ¥22,000 million in FY2027 (ending March 2027) (approximately double the previous year), and R&D expenses will also be increased to ¥8,150 million. The company intends to fully implement measures to enhance corporate value with the aim of achieving ROE of 10% or higher.

The annual dividend for FY2026 (ending March 2026) was ¥160 (dividend payout ratio of 47.5%), an increase from the equivalent of ¥140 in the previous fiscal year. An annual dividend of ¥160 is also planned for FY2027 (ending March 2027), maintaining the progressive dividend policy. Share buybacks of ¥5,002 million were also carried out in FY2026 (ending March 2026), continuing returns in line with the numerical target of a total payout ratio of 50% or higher.

Last updated: July 19, 2026