SAKAI CHEMICAL INDUSTRY CO., LTD.
4078・Prime Market・Chemicals
Business
Sakai Chemical Industry, founded in 1918, is a specialty chemicals manufacturer that operates an 11-segment structure positioning Electronic Materials, Cosmetic Materials, and Organic Chemicals as growth businesses; Hygiene Materials and Contract Processing as stable businesses; and Titanium Oxide & Zinc Products, Resin Additives, Catalysts (Efficiency Review Business), and Inorganic Materials (Efficiency Review Business) as efficiency review businesses. Consolidated group sales, including 15 consolidated subsidiaries (7 domestic, 8 overseas), totaled ¥81,447 million (FY2026 (ending March 2026)). Based on powder processing technology, organic synthesis technology, and pharmaceutical manufacturing technology, the company supplies materials to a wide range of industries, from dielectric materials for AI servers to ultrafine zinc oxide for cosmetics, pharmaceutical CDMO, and medical devices. Listed on the Tokyo Stock Exchange Prime Market.
Business Model
Specialty chemicals are manufactured at proprietary production sites (Sakai, Onahama, Yumoto, Senboku, Taiken, etc.) and sold globally through the group sales company Sakai Trading and five overseas locations (New York, Shanghai, Taiwan, Thailand, and Australia). Manufacturing subsidiaries (Katayama Seiyakusho, Kaigen Pharma, Resinocolor Kogyo, etc.) each handle their respective specialized fields, generating synergies across the group. Revenue is composed of segment-based product sales and contract processing fees, with a structure aimed at improving profit margins through a shift toward higher value-added products.
Company Strengths
The Electronic Materials segment achieved net sales of ¥11,377 million (up 13.6% year on year) and operating income of ¥1,816 million (up 21.7% year on year) in FY2026 (ending March 2026). The company holds hydrothermal synthesis technology for producing fine-particle, highly crystalline, and uniform-particle-size barium titanate, which has been adopted for high-end MLCC applications. It has built a global supply structure through its overseas sales network spanning New York, Shanghai, Taiwan, and Thailand.
Organic Sulfur Compounds (Thio Products) within the Organic Chemicals segment hold the top share in the high-refractive-index eyeglass lens material market. Net sales of Organic Chemicals for FY2026 (ending March 2026) were ¥7,185 million (up 8.2% year on year). Furthermore, the company has established a CDMO framework utilizing Katayama Seiyakusho's new head office and research laboratory (operational since September 2024), and continues to make capital investments (including the introduction of wet grinding equipment) aimed at expanding contract orders for Pharmaceutical APIs & Intermediates.
As of the end of FY2026 (ending March 2026), the equity ratio stood at 66.3% (up 2.8 percentage points from the previous fiscal year-end), with total assets of ¥117,216 million against net assets of ¥78,923 million. Operating cash flow was ¥14,479 million, an increase of ¥2,474 million year on year. The company held cash and cash equivalents of ¥15,444 million against total short-term and long-term borrowings of ¥12,999 million, and has also secured a syndicated commitment line.
ENVALITH's Perspective
Performance Trend
Revenue for FY2026 (ending March 2026) was ¥81,447 million (down 3.5% year on year), declining due to the termination of the Titanium Oxide business and a significant drop in Cosmetic Materials sales. On the other hand, operating profit reached ¥6,452 million (up 5.9% year on year), marking a second consecutive year of profit growth, with the operating margin improving to 7.9% (from 7.2% in the previous period). Electronic Materials (strong demand for AI servers and automotive applications), Contract Processing, Catalysts (Efficiency Review Business), and Inorganic Materials (Efficiency Review Business) drove profit. An impairment loss of ¥2,982 million was recorded as an extraordinary loss (mainly ¥2,962 million in the Cosmetic Materials segment), leaving net profit at only ¥2,752 million (down 45.1% year on year). Operating cash flow remained at a high level of ¥14,479 million. For FY2027 (ending March 2027), the company forecasts revenue of ¥81,700 million (up 0.3% year on year), operating profit of ¥6,000 million (down 7.0% year on year), and net profit of ¥4,400 million (up 59.8% year on year). The expected recovery in net profit, following the one-off impairment, is supported by a subsequent gain of ¥1,171 million from the sale of fixed assets.
Growth Strategy
Portfolio transformation through focused investment in three growth businesses and profitability improvement/discontinuation of businesses under efficiency review
Continuing to invest in production capacity expansion to capture growing demand for dielectric materials for AI servers and automotive applications. In FY2026 (ending March 2026), ¥971 million was invested in tangible and intangible asset additions, achieving a 13.6% increase in net sales and a 21.7% increase in operating profit. The company will continue to improve profitability by shifting toward high-purity and high-end products.
Construction of a new plant is underway to strengthen the supply system for Ultrafine Zinc Oxide and Ultrafine Titanium Oxide. The segment asset increase of ¥1,781 million in FY2026 (ending March 2026) reflects continued investment. However, a decline in shipments to major customers, particularly in China, has been severe, resulting in an operating loss of ¥437 million in FY2026 (ending March 2026). Demand recovery after the new plant becomes operational is the key to profitability.
Promoting expansion of contract manufacturing of Pharmaceutical APIs & Intermediates by leveraging Katayama Chemical Works' new head office and new research laboratory (operational since September 2024). In FY2026 (ending March 2026), sales increased 8.2% due to higher volumes of existing contracted products, but growth in newly developed products fell short of expectations, and operating profit declined 6.4% due to increased depreciation expenses from new equipment. Mass production of new projects is the next challenge.
The Rutile Titanium Oxide (Pigment Grade) business was discontinued as planned in FY2026 (ending March 2026). This has led to a reduction in related inventory and accounts receivable, contributing to improved working capital efficiency. As a subsequent event, the company plans to transfer an industrial waste final disposal site to Daiei Kankyo Co., Ltd., and expects to record a gain on sale of fixed assets of ¥1,171 million in FY2027 (ending March 2027). Progress is being made in improving asset efficiency and reallocating resources to growth businesses.
Promoting price corrections, cost reductions, and improved production efficiency in Resin Additives, Catalysts (Efficiency Review Business), and Inorganic Materials (Efficiency Review Business). Catalysts (Efficiency Review Business) achieved a significant improvement in operating profit to ¥648 million (up 3,338.7% year on year), while Inorganic Materials (Efficiency Review Business) reached ¥1,200 million (up 45.2% year on year). On the other hand, Resin Additives saw both sales and profit decline due to sluggish PVC demand and withdrawal from lead-based stabilizers, and continued profitability correction remains a challenge.
Last updated: July 19, 2026