Okura Industrial Co., Ltd.

Business Details

The core business of Okura Industrial, engaged in the production and sale of synthetic resin products such as polyethylene and polypropylene film. While Packaging Film (for Food & Daily Goods) remains the mainstay, the segment also develops Industrial Process Film / Agricultural Film. In January 2026, Fujiko Co., Ltd. (Packaging, Release Film, Transfer Printing Film, Water/Oil-Repellent Paper business) was made a wholly owned subsidiary, establishing a vertically integrated structure from film manufacturing to processing. The sales and processing network is also maintained through domestic sales subsidiaries and a Chinese local subsidiary.

Recent Overview

Fujiko subsidiary contributed to a 16.9% increase in net sales and a 24.3% increase in operating profit, a significant improvement.

On January 16, 2026 (deemed acquisition date January 1, 2026), Fujiko Co., Ltd. was made a wholly owned subsidiary at an acquisition cost of ¥5,600 million. As a result, Synthetic Resin Business net sales in Q1 of the fiscal year ending December 2026 reached ¥15,598 million (up 16.9% year on year), and segment operating profit reached ¥1,856 million (up 24.3% year on year). Sales volume of Packaging Film (for Food & Daily Goods) declined due to gradual demand attrition, but Industrial Process Film and Agricultural Film performed solidly. Cost reductions from productivity improvements also contributed to the profit improvement. Goodwill of ¥26 million was recognized.

Key Products

Growth Drivers

• Establishment of a vertically integrated structure from film manufacturing to processing through the subsidiarization of Fujiko Co., Ltd., accelerating business expansion in the "process functional materials" field
• Continued solid demand for Industrial Process Film / Agricultural Film
• Ongoing efforts to reduce costs through productivity improvements
• Expanded access to new customers and markets through the Fujiko product group for automotive, information/electronics, and semiconductor-related applications
• Solid demand for Environmentally Contributing Products (Refill Pouches, Shrink Film, Thin Agricultural Film)
• Maintaining sales channels leveraging the domestic and overseas sales and processing subsidiary network

Risks

• Continued gradual decline in demand for Packaging Film (for Food & Daily Goods) due to weaker personal consumption amid rising prices
• Risk of fluctuations in raw material prices (ethylene, etc.) due to instability in China, the U.S., and the Middle East, and the possibility of reorganization among domestic and overseas ethylene manufacturers
• PMI risk associated with the Fujiko integration and the burden of acquisition-related expenses such as advisory fees (¥155 million)
• Risk of impairment losses on fixed assets in the Synthetic Resin Business (¥1,098 million recorded in the fiscal year ended December 2025)
• Risk of intensifying competition and declining profitability in commoditized, labor-intensive businesses
• Business risk for the Chinese local subsidiary (Wuxi Okura Packaging Materials Co., Ltd.) due to instability in Japan-China relations
• Capital expenditure burden and risk of delayed operation due to increases in construction in progress (Takase Plant, etc.)