SHIKOKU KASEI HOLDINGS CORPORATION

Business Details

Centered on Shikoku Chemicals Corporation, this segment produces and sells chemical industrial products across three categories: Inorganic Chemical Products (Insoluble Sulfur, Carbon Disulfide, Anhydrous Sodium Sulfate), Organic Chemical Products (disinfectants such as chlorinated isocyanuric acid), and Fine Chemicals (electronic chemical materials, functional materials, semiconductor process materials). In addition to domestic production bases, the company has overseas operations in the US, China, India, Thailand, and Indonesia, and operates globally. In February 2026, the acquisition of all shares of PT Timuraya Tunggal in Indonesia was completed, and the company was added to the scope of consolidation.

Recent Overview

Set a new record high for a first quarter, driven by rapid expansion in Fine Chemicals and consolidation of the Indonesian subsidiary.

In the first quarter of FY2026 (ending December 2026), Chemicals Business sales were ¥14,611 million (up 26.2% year-on-year), with segment profit of ¥3,756 million (up 39.0% year-on-year), representing substantial increases in both revenue and profit. Fine Chemicals showed remarkable growth, with sales of ¥6,238 million (up 56.5% year-on-year), driven by AI and semiconductor demand. In addition, the acquisition of all shares of PT Timuraya Tunggal was completed on February 26, 2026, and the company along with its subsidiary PT Pradipa Persada were consolidated. Segment assets in the Chemicals Business increased by ¥7,461 million, and goodwill of ¥2,059 million was provisionally recognized (allocation of the acquisition cost has not yet been completed). Note that the performance of this company is not included in the income statement for the first quarter under review.

Key Products

Growth Drivers

• Expansion of AI and semiconductor-related demand in Fine Chemicals (rapid growth in GliCAP sales for server substrates, expanding demand for semiconductor process materials)
• Securing new overseas projects for imidazoles (epoxy resin curing agents) and increasing demand for glycoluril derivatives and other products
• Strong export performance of carbon disulfide for rayon and cellophane applications, and strong sales of insoluble sulfur in overseas markets
• Stable raw material procurement and acquisition of a Southeast Asian sales network through consolidation of PT Timuraya Tunggal (closing completed in February 2026)
• Rebound increase in the US market for organic chemical products (chlorinated isocyanuric acid) from weak performance in the prior period
• Differentiation through high-quality products and expanded production capacity via the new insoluble sulfur plant (Marugame Plant, completed January 2025)

Risks

• Intensifying price competition and market share battles due to continued global oversupply of insoluble sulfur
• Adverse impact on exports from US trade policy (tariffs) and risk of overseas economic slowdown
• Risk of demand fluctuations for organic chemical products (chlorinated isocyanuric acid) in the US market
• Impact of rising raw material prices, procurement difficulties, and logistics disruptions due to escalating tensions in the Middle East (not factored into earnings forecasts)
• Foreign exchange risk (assumed rates: ¥150/US dollar, ¥175/euro)
• Risk of upfront capital expenditure burden and demand fluctuations amid rapid expansion of AI and semiconductor-related demand
• Uncertainty prior to finalization of goodwill and other items due to incomplete allocation of the PT Timuraya Tunggal acquisition cost, and risk related to incomplete price adjustments under the share transfer agreement
• Softening demand for certain items, including weak sales of anhydrous sodium sulfate for synthetic detergent applications