KOEI CHEMICAL COMPANY, LIMITED
4367・Standard Market・Chemicals
Business
Koei Chemical Company, Limited is a chemical manufacturer founded in 1917 that, based on its long-cultivated core technology in nitrogen-containing organic compounds, operates a single-segment business manufacturing and selling Pharmaceutical & Agrochemical Related Chemicals (intermediates and raw materials for pharmaceuticals, animal drugs, agrochemicals, etc.) and Functional Chemicals (for use in catalysts, solvents, polymer additives, IT-related applications, photographic chemicals, etc.). The company's main production base is the Chiba Plant (Sodegaura City), and it belongs to the parent company group of Sumitomo Chemical Co., Ltd. A share exchange is planned for August 2026, under which the company will become a wholly owned subsidiary of Sumitomo Chemical, placing it in a transitional period ahead of delisting. Major customers include agrochemical manufacturers in North America and Europe, as well as chemical and pharmaceutical companies both domestic and international. Net sales for FY2026 (ending March 2026) were ¥17,009 million.
Business Model
The company leverages its in-house multi-plant group (CM I–IV and pilot plants) to combine contract production of diverse, complex-process products tailored to customer needs with sales of self-developed products, forming its revenue model. Production is basically make-to-stock, with custom synthesis of pharmaceutical and agrochemical intermediates, organometallic catalysts, functional materials, etc., and sales of platform products such as amines and pyridines forming the two pillars of revenue. R&D expenses of ¥1,100 million (FY2026 (ending March 2026)) are being invested to continue expanding new contract orders and developing proprietary products.
Company Strengths
The Company possesses an amine compound library of over 100 types and proprietary organic synthesis technology, enabling the development and sample provision of CO₂ absorption materials and amine compounds for DAC (Direct Air Capture). Over 60 years of technical accumulation since the start of amine production in 1962 makes short-term imitation by competitors difficult, forming the foundation for expansion into new contract businesses related to carbon neutrality.
The multi-plant group consisting of CM I through IV and a pilot plant is production equipment with diverse features capable of handling complex processes, enabling the introduction of new contracted products and flexible switching of production items. It is the Company's own unique production infrastructure that supports its ability to respond to new inquiries for organometallic catalysts, pharmaceutical intermediates, electronic materials, and other products.
The Company belongs to the parent company group of Sumitomo Chemical Co., Ltd., and shares its business foundation, including leasing the Chiba Plant site (125,116 sq. meters) from Sumitomo Chemical. Deepening collaboration with Sumitomo Chemical's Advanced Medical Solutions division and expansion of intra-group contract manufacturing are progressing, and the structure is such that synergies will be further strengthened through the Company becoming a wholly owned subsidiary in August 2026.
ENVALITH's Perspective
Performance Trend
Net sales decreased by ¥3,009 million (down 15.0%) from ¥20,018 million in FY2025 (ended March 2025) to ¥17,009 million. Over the past five fiscal periods, sales followed a gradual growth trend from ¥17,296 million in FY2022 (ended March 2022) to ¥20,018 million in FY2025 (ended March 2025), but saw a sharp reversal in FY2026 (ending March 2026). The main external factors were sluggish demand for Pharmaceutical & Agrochemical Related Chemicals products destined for North America and Europe, and lower sales of optical materials products. Operating profit stood at a low level of ¥364 million (versus ¥566 million in the prior period), and ordinary profit was ¥255 million (versus ¥356 million). An impairment loss of ¥6,395 million and share exchange-related expenses of ¥24 million were recorded as extraordinary losses, resulting in a pre-tax net loss of ¥6,169 million and a net loss of ¥5,135 million (after a reversal of deferred tax adjustments of ¥1,065 million). The equity ratio declined from 61.4% to 53.9%. Operating cash flow decreased significantly to ¥1,648 million (versus ¥4,756 million in the prior period), but remained positive due to the recognition of the impairment loss as a non-cash expense.
Growth Strategy
Advancing profitability enhancement, business growth acceleration, and management foundation strengthening under KX2027, transitioning toward becoming a wholly owned subsidiary of Sumitomo Chemical
Board resolution on May 13, 2026, with the share exchange scheduled to take effect on August 1, 2026. This is a simplified share exchange contingent upon approval at the Annual General Meeting of Shareholders on June 25, 2026. Deeper synergies within the group and optimal allocation of management resources are expected.
Continuing price revisions and sales expansion activities in response to rising resource and energy prices and exchange rate fluctuations. In FY2026 (ending March 2026), although fixed cost reductions and lower raw material prices contributed to earnings growth, this was outweighed by volume-related losses, resulting in operating profit declining 35.6% year on year.
Continuing to promote manufacturing cost reduction through production rationalization and efficiency improvements. In FY2026 (ending March 2026), the gross profit margin improved to 29.3% from 23.5% in the previous fiscal year, indicating that cost management initiatives are showing tangible results.
Developing a contract manufacturing business for CO₂ Absorption Amine leveraging nitrogen-containing organic compound technology. Full-scale earnings contribution is expected from FY2028 (ending March 2028) onward. This initiative is expected to continue within the group even after becoming a wholly owned subsidiary.
Last updated: July 19, 2026