Central Glass Co.,Ltd.

Business Details

From FY2026 (ending March 2026), the former Chemical Products Business was split and reorganized into three segments: Electronic Materials Business, Energy Materials Business, and Life & Healthcare Business. Electronic Materials handles specialty gases for semiconductors, Energy Materials handles electrolyte for lithium-ion batteries, and Life & Healthcare handles medical chemicals, material chemicals, and fertilizer. Combined sales of the 3 segments totaled ¥79,296 million, accounting for approximately 54.9% of consolidated net sales.

Recent Overview

Former Chemical Products Business reorganized into 3 segments; Electronic Materials strong while Energy Materials losses widen

From FY2026 (ending March 2026), the segments were reorganized into 4 categories to enhance information disclosure. The Electronic Materials Business performed well, with sales up 8.1% year on year to ¥26,202 million, driven by rising demand for AI-related semiconductors. On the other hand, the Energy Materials Business saw sales decline 19.5% year on year to ¥12,070 million due to a decrease in sales of electrolyte for lithium-ion batteries amid intensifying competition, with operating loss widening to ¥3,264 million. The Life & Healthcare Business saw sales decrease 2.9% year on year to ¥41,024 million, but operating profit improved by ¥220 million year on year to ¥6,170 million due to the effects of fixed cost reductions and withdrawal from unprofitable businesses.

Key Products

Growth Drivers

• Continued increase in sales of specialty gases for semiconductors (Electronic Materials) driven by expanding demand for AI and advanced semiconductors
• Recovery in sales of electrolyte for lithium-ion batteries driven by expansion of mass production scale for new customers (outlook for FY2027 (ending March 2027))
• Maintaining sales through price pass-through for fertilizer (coated fertilizer) reflecting rising raw material costs
• Improvement in the profit structure of the Life & Healthcare Business through fixed cost reductions and withdrawal from unprofitable businesses (such as the PAC business)
• Strengthened R&D investment toward expansion of specialty products based on the Medium-Term Management Plan (FY2025-2030) (R&D expenses of ¥7,659 million, up 3.6% year on year)

Risks

• Risk of price declines and market share loss in electrolyte for lithium-ion batteries due to intensifying competition (continued losses in the Energy Materials Business)
• Risk of profit margin pressure across all segments due to soaring raw material and fuel prices stemming from the situation in the Middle East
• Risk of declining selling prices for overseas medical chemicals (anesthesia APIs) due to sluggish exports and foreign exchange effects
• Risk of profit margin pressure in the Electronic Materials Business due to rising raw material costs and other cost increases
• Risk of deteriorating export environment due to geopolitical risks (Middle East, Ukraine conflict) and US tariff policy
• Risk of continued sluggish demand for functional material products within Material Chemicals

Business Details

The Glass Business consists of three product groups: Architectural Glass, Automotive Glass, and Glass Fiber. Architectural Glass is manufactured by Central Glass Products Co., Ltd. and sold by Central Glass Sales Co., Ltd.; Automotive Glass is sold through Central Glass Saint-Gobain Co., Ltd.; and Glass Fiber is manufactured and sold by Central Glass Fiber Co., Ltd. The domestic construction and automotive markets are the main customers, and price pass-through amid rising raw material and fuel costs as well as fixed cost management are key to profitability.

Recent Overview

Architectural Glass and Glass Fiber posted sales growth; Automotive Glass slightly declined due to customer production halt, but overall sales and profit increased

In FY2026 (ending March 2026), the Glass Business achieved increased sales and profit, with sales of ¥59,640 million (up 2.0% year on year) and operating profit of ¥2,810 million (up 13.9% year on year). Architectural Glass increased 4.6% year on year due to higher sales of non-residential products, and Glass Fiber increased 4.8% year on year due to higher sales of automotive-related products, while Automotive Glass decreased 0.9% year on year due to sluggish demand and the impact of a temporary production halt by a customer. The impairment loss of ¥42 million recorded in the prior period was zero in the current period, contributing to the improvement in profit.

Key Products

Growth Drivers

• Recovery and expansion of Glass Fiber sales for automotive applications
• Increased sales of non-residential products within Architectural Glass
• Continued pass-through of rising raw material and fuel costs into product prices for Automotive Glass
• Promotion of fixed cost reduction and operational efficiency initiatives

Risks

• Profit pressure from rising raw material and fuel/energy costs
• Risk of decreased sales due to production halts and weak demand among automakers
• Risk of continued sluggish domestic construction demand
• Intensifying price competition with competitors
• Risk of impairment losses