ENVALITH
ウルトラファブリックス・ホールディングス株式会社 logo

Ultrafabrics Holdings Co.,Ltd.

4235・Standard Market・Chemicals

Official website
ウルトラファブリックス・ホールディングス株式会社 logo
Ultrafabrics Holdings Co.,Ltd.4235

Business

Ultrafabrics Holdings Co.,Ltd. is a specialist manufacturer of polyurethane leather, with its domestic subsidiary Dainichiseika Co., Ltd. (Note: verify official name) handling manufacturing and its US subsidiary Ultrafabrics Inc. handling primary sales. Its products serve a wide range of applications, including Polyurethane Leather for Furniture (27.3% of sales composition), Polyurethane Leather for Automotive (39.6%), Polyurethane Leather for Aircraft (18.1%), and Polyurethane Leather for Other Applications (15.0%), and are adopted mainly in North America as materials for high-end office furniture, automotive interiors, private jets, and commercial aircraft interiors. The company operates globally from three locations—Tokyo, New York, and London—and is also advancing manufacturing operations in Mexico and India through equity-method affiliates. Revenue for FY2025 (ending December 2025) was ¥20,553 million.

Business Model

Daiichi Kasei Co., Ltd. manufactures polyurethane leather at its domestic plants in Saitama (Gyoda), Gunma, and Chiyoda, while Ultrafabrics Inc. handles global sales, primarily in North America, under a division-of-labor structure. Products are supplied to sectors with demanding quality requirements, such as automotive and aircraft, under a quality control system certified to IATF16949. Approximately 70% of sales are recorded in North America, and sales to a single customer, Saltillo Lamination S.A de C.V., account for 17.3% of revenue. R&D expenses were ¥341 million (fiscal year ended December 2025).

Company Strengths

Revenue from Polyurethane Leather for Aircraft in FY2025 (ending December 2025) was ¥3,712 million (up 17.4% year-on-year), with its share of total revenue rising from 15.6% to 18.1%. Growth was driven by expanded transactions with European and Asia-Pacific airlines. The order backlog reached ¥4,489 million, up 151.4% year-on-year, indicating a favorable leading indicator for future revenue.

Daiichi Kasei Co., Ltd. and Ultrafabrics Inc. have obtained IATF16949:2016 (automotive quality management), ISO9001, and ISO14001 certifications. These certifications form a barrier to entry in fields with stringent quality requirements such as automotive and aircraft, and have helped build a diversified revenue base spanning four applications: furniture, automotive, aircraft, and other.

In July 2025, a new plant began operations in Chiyoda-machi, Gunma Prefecture, equipped with the second hydrogen boiler installed domestically. A system reusing 60% of water used within the plant was also introduced, achieving more sustainable manufacturing processes. Total capital expenditure of ¥1,334 million was made in FY2025 (ending December 2025), aimed at expanding production capacity and reorganizing R&D facilities to shorten sample production lead times.

ENVALITH's Perspective

In Q1 of FY2026 (ending December 2026), revenue was ¥5,704 million (+15.3% year on year), operating profit was ¥540 million (+45.4% year on year), and quarterly profit attributable to owners of parent was ¥263 million (+134.5% year on year), representing substantial improvement. However, the full-year forecast calls for revenue of ¥21,600 million (+5.1% versus the previous fiscal year), while operating profit is projected at ¥1,600 million (-1.3%) and net profit at ¥500 million (-36.4%), still indicating a decline. The extent to which the strong Q1 performance provides upside potential relative to the full-year forecast will depend on demand trends and foreign exchange levels in the latter half of the year.

The significant profit improvement in Q1 was primarily driven by external factors: foreign exchange gains associated with yen depreciation and a recovery in demand for Polyurethane Leather for Aircraft. On the other hand, structural cost increases continue, including the impact of increased outsourced production and decreased in-house production volume, higher research and development expenses, and increased depreciation expenses from the new plant. As a result, the cost of sales ratio worsened from 52.5% in the same quarter of the previous year to 55.1%. The fact that margin improvement remains limited even as the external environment turns favorable highlights the challenges the company faces during this period of transition in its cost structure.

Operating cash flow in Q1 of FY2026 (ending December 2026) was ¥-43 million, deteriorating significantly from ¥727 million in the same quarter of the previous year. The main causes were an increase in working capital (trade receivables +¥219 million, trade payables ¥-152 million) and an outflow in other items (¥-513 million). To fund working capital, short-term borrowings increased by a net ¥1,449 million, causing current interest-bearing debt to surge from ¥7,745 million to ¥9,318 million. Although the cash balance increased to ¥2,422 million compared to the end of the previous fiscal year, the rising reliance on short-term borrowings remains a financial risk that warrants continued attention.

Growth Strategy

Targeting revenue of ¥27,400 million by 2028 through diversification of applications and regions and strengthened product development capabilities

Continuing to expand customer programs for commercial aircraft, business jets, and healthcare applications. In Q1 of FY2026 (ending December 2026), Polyurethane Leather for Aircraft sales increased 37.1% year on year, and orders from major healthcare customers rose substantially, functioning as a core driver of medium-term growth.

Promoting the launch of new card programs for contract furniture and capturing demand for small automotive components such as shift boots and seat materials. In Q1 of FY2026 (ending December 2026), Polyurethane Leather for Furniture grew 13.3% and Polyurethane Leather for Automotive grew 9.4%, offsetting the impact of a softening residential market.

Enhancing production capacity through the startup of the new Chiyoda plant, and shortening sample production lead times through the reorganization of R&D facilities. While increased depreciation expenses will be a short-term cost burden, the company aims to strengthen medium- to long-term competitiveness through improved capacity to respond to order growth and faster product development.

Promoting the development of sustainable polyurethane leather utilizing bio-based and recycled raw materials. The company aims to capitalize on external changes such as tightening environmental regulations and rising ESG awareness, and to strengthen its appeal to environmentally conscious customers in Europe and North America.

Last updated: July 17, 2026