ISE CHEMICALS CORPORATION
4107・Standard Market・Chemicals
Business
Ise Chemicals Corporation, founded in 1927, is an iodine and natural gas specialty manufacturer with AGC Inc. as its parent company. It produces iodine using the brine blowing-out method from underground brine sourced from the Sotobo area in Chiba Prefecture and the Sadowara area in Miyazaki Prefecture, and sells it both domestically and internationally (North America, Europe, and Asia). Through its U.S. subsidiary, Woodward Iodine Corporation, the company also conducts production and sales in North America. As a second segment, it manufactures and sells metal compounds such as Nickel Chloride (Metal Compounds Business). Major customers include AGC Inc. (28.0% of net sales), Mitsubishi Corporation (18.4%), and Maruzen Pharmaceuticals Co., Ltd. (11.5%), among others. Global demand for iodine is expanding for medical and industrial applications, with Chile, Japan, and the United States forming an oligopolistic supply structure as the major producing countries.
Business Model
A vertically integrated business model that simultaneously extracts Natural Gas and Iodine from underground brine, refining and selling high-purity Iodine produced in-house via the blowing-out method. Iodine is traded at prices linked to international market conditions, and when volume growth coincides with firm market conditions, high operating leverage comes into play. In FY2025, the operating margin of the Iodine and Natural Gas Business reached 27.3%, making it the substantial source of company-wide operating profit. The Metal Compounds Business, centered on Nickel Chloride, plays a complementary role through stable volume sales.
Company Strengths
Revenue expanded approximately 1.9x from ¥20,354 million in FY2021 to ¥39,258 million in FY2025. The operating margin improved significantly from 13.3% in FY2021 to 24.2% in FY2025. The operating margin of the core Iodine and Natural Gas Business reached 27.3%, showcasing outstanding profitability as a chemical manufacturer.
Iodine is an underground resource whose deposits are globally concentrated in specific regions (with Chile, Japan, and the United States being the major producing countries). The company established its proprietary blow-out method in 1961 and achieved the world's No. 1 position in Iodine production in 1970. Years of well development know-how and production infrastructure form high barriers to entry.
ROE in FY2025 was 17.2% (an improvement of 2.2 points year on year), and EBITDA was ¥11,530 million (significantly exceeding the target of ¥7 billion or more). Against total assets of ¥51,015 million, net assets stood at ¥40,070 million, resulting in an extremely healthy equity ratio of approximately 78.5%. Operating cash flow was ample at ¥7,528 million, providing a financial foundation that enables aggressive investment funded by internal resources.
ENVALITH's Perspective
Performance Trend
The company achieved five consecutive periods of increased revenue and profit from FY2021 to FY2025 (net sales grew from ¥20,354 million to ¥39,258 million; operating income grew from ¥2,709 million to ¥9,484 million). However, in Q1 of FY2026 (December 2026 fiscal year) (January to March 2026), net sales rose to ¥8,813 million (up 7.0% year on year), maintaining revenue growth, while operating income fell to ¥1,959 million (down 2.0% year on year), turning into a profit decline. As an external factor, the international iodine market continued to trend firmly, supporting sales, but a decline in metal prices squeezed profitability in the Metal Compounds Business. As internal factors, an increase in depreciation expenses accompanying aggressive capital investment (up 23% year on year to ¥599 million) and a substantial increase in SG&A expenses (up 38% year on year to ¥906 million) weighed on profits. The full-year forecast calls for net sales of ¥38,000 million and operating income of ¥8,000 million, representing a decrease in both revenue and profit compared to the previous period.
Growth Strategy
Long-term expansion of supply capacity through new well development and strategic investment exceeding ¥20.0 billion, accelerating the creation of new applications and new businesses
In the first quarter of FY2026 (ending December 2026), total property, plant and equipment increased from ¥16,705 million at the end of the previous fiscal year to ¥17,150 million. Buildings and structures (net) expanded from ¥4,774 million to ¥5,811 million, while machinery, equipment and vehicles (net) grew from ¥6,095 million to ¥6,697 million. Depreciation expense also reached ¥599 million, up 23% year on year, indicating that the investment phase is ongoing.
Through proactive domestic and overseas sales activities, sales in the Iodine and Natural Gas Business for the first quarter of FY2026 (ending December 2026) reached ¥7,628 million (up 8.3% year on year). In particular, sales to Asia expanded significantly to ¥2,375 million (versus ¥1,943 million in the same period of the previous year, up 22.2% year on year), with the Asian market functioning as a new growth engine.
The Group continues to work on strengthening safe and stable production and improving productivity. Appropriate quarterly cost management is being implemented, including the deferred treatment of cost variances arising from periodic repairs. The Group is also working to maintain and expand long-term supply capacity through the continued development of new wells.
Last updated: July 17, 2026