Shin-Etsu Chemical Co., Ltd.
4063・Prime Market・Chemicals
Living Environment Base Materials
Business supporting infrastructure and daily life while reducing environmental impact, centered on PVC and Caustic Soda
| Period | Current | Previous | Change |
|---|---|---|---|
| Sales (external customers) | ¥981,370 million | ¥1,041,571 million | ↓ |
| Operating income | ¥164,890 million | ¥291,466 million | ↓ |
| Operating margin | 16.8% | 27.9% | ↓ |
| Depreciation and amortization | ¥86,101 million | ¥81,878 million | ↑ |
| Increase in tangible and intangible fixed assets | ¥67,856 million | ¥114,006 million | ↓ |
| Capital expenditures | ¥67,800 million | ¥114,000 million | ↓ |
Business Details
Primarily engaged in the manufacture and sale of Polyvinyl Chloride (PVC) Resin, Caustic Soda, Methanol, Chloromethane, and Poval (Polyvinyl Alcohol). Domestically, the Company itself, Kashima Chlorine & Alkali, and Kashima Vinyl Chloride Monomer, among others, operate the business, while overseas, Shintech Inc. (US), Shin-Etsu PVC B.V. (Europe), and CIRES, Lda., among others, are responsible. The segment pursues economies of scale and multi-layered business development by leveraging sales networks spanning North America, Asia, and Europe. It fulfills its role as an essential supplier that supports social infrastructure while limiting environmental impact.
Recent Overview
Softening PVC market conditions and higher raw material costs hit hard; operating income fell sharply by 43% year-on-year
In FY2026 (ending March 2026), sales were ¥981,370 million (down 6% year-on-year) and operating income was ¥164,890 million (down 43% year-on-year), representing a significant decline. In North America, PVC demand remained firm until mid-last year but weakened thereafter, softening market conditions. In overseas markets including Asia, price declines due to excess exports from China continued. In addition, rising raw material and energy prices caused by the outbreak of war in Iran and the Middle East squeezed profits. The segment began raising prices across all products while promoting full utilization of supply capacity at its US base and improving sales methods. Operating income in the fourth quarter (January-March 2026) was ¥18.5 billion, the lowest level of the fiscal year, with profitability deteriorating rapidly toward the second half.
Key Products
Growth Drivers
- Maintaining and expanding market share in North America through full utilization of supply capacity built up at the US base (Shintech)
- Recovery in profitability through price increases based on stable supply and improved supply methods
- Strengthening competitiveness through Shintech's new investment (USD 3.4 billion, scheduled for completion by the end of 2030) in a raw material manufacturing plant for PVC resin
- Stable securing of Caustic Soda price and volume
- Optimal sales execution leveraging the multi-layered sales network spanning North America, Asia, and Europe
- Improving production efficiency through pursuit of economies of scale
Risks
- Prolonged price declines in overseas markets due to excess PVC exports from China
- Weak PVC demand in the North American market and continued softening of market conditions
- Increased manufacturing costs due to rising energy and raw material costs stemming from the situation in Iran and the Middle East
- Downside risk to personal consumption and corporate investment due to US tariff policy and other factors
- Foreign exchange fluctuations (decrease in yen-converted amounts of overseas subsidiaries due to yen appreciation)
- Risk of prolonged profit stagnation due to delayed recovery in PVC market conditions
Last updated: June 19, 2026