Gun Ei Chemical Industry Co.,Ltd.

Business Details

Manufactures and sells Industrial Phenolic Resin (Resitop), Special Phenolic Resin (Millex), resin for electronic materials, High-Performance Fiber (Kynol), True Spherical Resin, Bisphenol F, and other products. In addition to domestic Gun Ei Chemical Industry, overseas subsidiaries in Thailand, India, and the U.S., along with Tohoku Euroid Kogyo, handle production and sales. Supplies high-value-added chemical products to diverse industries including electronic materials, environment, automotive, and foundry, driving earnings for the Group as a whole.

Recent Overview

Resin for electronic materials remained solid on the back of generative AI-driven demand, with both sales and profit increasing year on year.

In the Chemicals Business for FY2026 (ending March 2026), sales increased 4.1% year on year to ¥26,496 million, and segment profit (operating profit) increased 13.3% year on year to ¥2,376 million. Resin for electronic materials remained solid, as semiconductor applications benefited from robust memory demand driven by generative AI applications and other uses. Resin for automotive applications was roughly flat year on year. On the other hand, environment-related High-Performance Fiber demand for solvent recovery and other applications was weak due to the continued inventory adjustment in China. Profit contribution from subsidiaries also contributed to the increase in segment profit. Segment assets increased by ¥9,115 million from the end of the prior fiscal year to ¥45,973 million, reflecting the accumulation of capital investment.

Key Products

Growth Drivers

• Resin for electronic materials: robust trend in semiconductor-related demand driven by expanding memory demand from generative AI applications and other uses
• Expansion of supply capacity for resin for electronic materials through production-increase facilities (operational in FY2024) and a new plant (scheduled to begin operation in FY2025)
• Capturing demand in environmental and solvent recovery applications through production-increase facilities for High-Performance Fiber (Kynol) (scheduled to begin operation in FY2025)
• Addressing overseas growth markets through investment to double production capacity at the Indian subsidiary
• Improvement in profit margins through profitability corrections, operational efficiency improvements, and cost reductions at overseas subsidiaries
• Active investment in the "High-Purity/Advanced Materials" and "Environmentally Responsive Chemicals" fields under the "GCI Group Medium-Term Management Policy 2030"

Risks

• Weak demand for environment-related High-Performance Fiber (solvent recovery and other applications) due to the sluggish China market and continued inventory adjustment
• Weakness in resin for foundry and automotive applications due to stagnant domestic and overseas automobile sales volumes and declining market share of Japanese automakers in China
• Rising manufacturing costs due to raw material price increases and procurement difficulties stemming from Middle East tensions (a main reason the FY2027 (ending March 2027) earnings forecast is undetermined)
• Foreign exchange fluctuation risk (impact on the performance of overseas subsidiaries and occurrence of foreign exchange losses)
• Impact on exports and overseas operations from policy developments in various countries related to U.S. trade and tariff policy
• Risk of profit pressure from increased depreciation expenses accompanying the expansion of capital investment