ENVALITH
戸田工業株式会社 logo

TODA KOGYO CORP.

4100・Standard Market・Chemicals

Official website
戸田工業株式会社 logo
TODA KOGYO CORP.4100

Business

Toda Kogyo is a long-established materials manufacturer founded in 1823, developing two business segments—Functional Pigments and Electronic Materials—centered on its core technology for synthesizing fine iron oxide particles. In Functional Pigments, the company handles magnetic powders, coloring materials, and Environment-related Materials (CO₂ Separation & Capture Materials, etc.), while in Electronic Materials it handles Magnetic Materials (Bonded Magnets & Ferrite Materials), Dielectric Materials (Barium Titanate), Soft Magnetic Materials, and Lithium-ion Battery Materials (LIB Precursors). Its major customers include automotive parts manufacturers, MLCC (multilayer ceramic capacitor) manufacturers, and digital copier/printer manufacturers, and it conducts business globally, primarily in Asia, through 15 domestic and overseas subsidiaries and 4 affiliated companies. The company is an equity-method affiliate of TDK Corporation, with which it maintains a capital and business alliance.

Business Model

The company manufactures high-functionality materials using its proprietary wet-process fine particle synthesis technology and sells them to manufacturing customers in the automotive, ICT, and environmental fields. Revenue is mainly derived from product sales, with net sales for the current period totaling ¥28,041 million. The business portfolio is managed under four categories: "Growth Businesses," "Next-Generation Businesses," "Stable Earnings Businesses," and "Restructuring/Transition Businesses." The company aims to qualitatively improve its earnings structure by concentrating management resources on Growth Businesses and rationalizing Restructuring/Transition Businesses.

Company Strengths

The company possesses wet synthesis technology for producing ultrafine Barium Titanate particles of 150nm or less, addressing MLCC needs for higher capacitance and miniaturization. In the current fiscal year, it brought dedicated dispersion equipment online and began rolling out high value-added products. With an intellectual property base of 200 domestic patents, 246 overseas patents, and 223 applications under examination, the company has achieved technological differentiation that competitors find difficult to replicate in the short term.

The company operates manufacturing bases in China (Zhejiang, Tianjin, Guangdong), Thailand, and South Korea, building a globally stable supply system for Magnetic Materials and Dielectric Materials (Barium Titanate). In 2021, it made Jiangmen Xielimagnet Hi-Tech Co., Ltd., an injection-molded magnet manufacturer, a consolidated subsidiary, expanding its business foundation into downstream areas. Its Asian production network addresses the local sourcing needs of automotive parts manufacturers.

In 2019, the company entered into a capital and business alliance with TDK Corporation, with TDK becoming its largest shareholder and equity-method parent company, promoting joint development of materials for electronic components, mutual supply chain complementarity, and logistics efficiency. TDK holds the right to nominate two directors, and the company possesses an alliance structure in the Electronic Materials field—leveraging customer base, technical collaboration, and global network utilization—that is difficult for competitors to replicate.

ENVALITH's Perspective

In FY2026 (ending March 2026), net sales were ¥28,041 million (down 11.4% year on year), but operating income was ¥862 million, marking a turnaround from an operating loss of ¥648 million in the prior period, which can be viewed favorably. However, due to the recording of a provision for loss on transfer of equity contributions in affiliated companies of ¥3,016 million as an extraordinary loss in connection with the transfer of the equity interest in BASF TODA Battery Materials LLC, net income attributable to owners of the parent was a net loss of ¥3,455 million, marking the 5th consecutive fiscal year of net losses. Retained earnings have accumulated to a deficit of ¥7,443 million, and the equity ratio has declined to 18.9% (from 21.7% in the prior period), reflecting a continued weakening of the financial base.

As an external factor, the significant increase in demand for MLCCs used in AI servers and peripheral equipment has driven Dielectric Materials to achieve record-high sales, and growth in the Electronic Materials segment is also expected to continue in the FY2027 (ending March 2027) forecast. On the other hand, Magnetic Materials (Bonded Magnets & Ferrite Materials) and Soft Magnetic Materials continue to struggle due to a decline in new vehicle sales in the automotive market (an external factor) and intensifying competition with Chinese peers (an external/competitive factor). The equity in losses of affiliates (¥1,078 million in FY2026 (ending March 2026)), reflecting a slowdown in EV market growth, is also weighing on ordinary income, and improvement in earnings following the dissolution of the joint venture with BASF TODA will be a key focus in the next fiscal year.

The consolidated earnings forecast for FY2027 (ending March 2027) calls for net sales of ¥29,000 million (up 3.4% year on year), operating income of ¥1,000 million, ordinary income of ¥1,100 million, and net income attributable to owners of the parent of ¥500 million, representing a turnaround to net income. The fact that the loss on the transfer of the equity interest in BASF TODA Battery Materials LLC was recognized in advance in the current period is positive, as it is expected to improve the equity method gain/loss in the next fiscal year. However, this equity transfer is pending approval from regulatory authorities, and risks remain regarding delays in approval or changes in conditions. With the continuation of no dividend payments (forecast to remain ¥0 in FY2027 (ending March 2027) as well), whether the company can achieve financial improvement will be key to investment decisions.

Growth Strategy

Three-pronged strategy under Vision2026: focused investment in growth businesses, restructuring of unprofitable businesses, and early commercialization of next-generation businesses

Against a backdrop of substantial growth in demand for MLCCs used in AI servers and peripheral equipment, the company is strengthening product development and manufacturing through its proprietary fine particle synthesis technology for particles below 150nm. It is also promoting value-add through the provision of dispersions of pre-drying fine particles. Record-high sales were achieved in FY2026 (ending March 2026), with further growth expected in FY2027 (ending March 2027).

The company continues its sales expansion activities for Magnetic Materials (Bonded Magnets & Ferrite Materials) and Soft Magnetic Materials to meet the needs for smaller, lighter automotive parts. Amid headwinds from intensifying competition with Chinese peers and declining new vehicle sales, the company aims to grow sales by acquiring new themes. FY2026 (ending March 2026) remained challenging, but improvement is expected in FY2027 (ending March 2027).

The company is proceeding with the decision to dissolve and liquidate Toda Advanced Materials Inc. and the execution of the equity transfer agreement for BASF Toda Battery Materials LLC (resolved by the Board of Directors on February 26, 2026). The equity transfer is pending approval from regulatory authorities, but there is no change to the policy. A loss of ¥3,016 million has already been recorded in advance during the current fiscal year.

The company continues to promote price correction activities, cost reductions, and expense cuts for Coloring Pigments & Toner Materials. Segment profit for FY2026 (ending March 2026) improved significantly to ¥1,498 million (up 48.4% year on year). For FY2027 (ending March 2027), the company expects continued strong demand for Catalyst Materials & Recording Materials and intends to maintain stable profit generation.

The company is advancing the development of new materials that contribute to reducing environmental impact, such as Environment-related Materials (CO₂ Separation & Capture Materials, etc.), and is concentrating management resources with the aim of early commercialization. Positioned as a “next-generation business” under Vision2026, development continues as a foothold toward the desired state targeted for FY2031 (ending March 2031, Vision2030).

Last updated: July 19, 2026