ENVALITH
中国塗料株式会社 logo

CHUGOKU MARINE PAINTS,LTD.

4617・Prime Market・Chemicals

Official website
中国塗料株式会社 logo
CHUGOKU MARINE PAINTS,LTD.4617

Business

Chugoku Marine Paints, Ltd. is a paint specialty manufacturer founded in 1917, with marine paints (antifouling bottom paints and anti-corrosion paints) as its core business, while also developing Industrial Paints and Container Paints. The group comprises 25 companies in total—6 in Japan, 4 in China, 1 in South Korea, 6 in Southeast Asia, and 7 in Europe & United States—operating across five segments: Japan, China, South Korea, Southeast Asia, and Europe & United States. Its primary customers are shipping companies and shipyards that own newbuilding and repair vessels, and the company is capturing growing demand for High-Performance Antifouling Bottom Paints driven by IMO fuel efficiency regulations. In FY2026 (ending March 2026), consolidated net sales reached ¥139,364 million, substantially exceeding all targets of the previous medium-term management plan upon its completion.

Business Model

The company maintains production and sales bases adjacent to major shipbuilding and repair hubs worldwide, supplying products in line with customers' dry-docking schedules. It improves gross margin through appropriate pricing that reflects manufacturing costs and by expanding sales of high value-added products (High-Performance Antifouling Bottom Paints and Environmentally Friendly Paints), while maintaining technological superiority through R&D (¥1,840 million annually). Royalty income from technology licensing agreements (10 countries/regions) also serves as a complementary revenue source.

Company Strengths

The company operates a total of 25 companies across five segments—Japan, China, South Korea, Southeast Asia, and Europe & United States—with production bases located adjacent to major shipbuilding countries and repair ports. Total sales across all segments for FY2026 (ending March 2026) amounted to ¥139,364 million, building a stable revenue base while diversifying dependence on specific regions.

The R&D divisions in Otake City, Hiroshima Prefecture and Yasu City, Shiga Prefecture serve as the core, complemented by technical divisions in China, South Korea, Singapore, and the Netherlands. In FY2025, the contribution to greenhouse gas emission reductions through the supply of high-performance antifouling bottom paints reached 1.87 million tons, achieving an attainment rate of 144% against the target set in the previous medium-term management plan.

Under the medium-term management plan "CMP New Century Plan 2" covering FY2021–FY2025, the company significantly exceeded all targets: net sales of ¥139.3 billion (target: ¥120.0 billion), operating profit of ¥17.4 billion (target: ¥11.0 billion), and ROE of 12.3% (target: 10% or higher). The operating profit margin rose every year from the first year to the final year of the previous medium-term plan, reaching 12.5% in the final year.

ENVALITH's Perspective

Profit attributable to owners of parent for FY2026 (ending March 2026) declined sharply to ¥10,995 million (down 19.9% year on year), but this was mainly due to the rebound from the prior period, when extraordinary income of ¥2,694 million, including a ¥2,500 million gain on sale of fixed assets, had been recorded. Operating profit rose to ¥17,437 million (up 13.4% year on year) and ordinary profit rose to ¥17,840 million (up 8.2% year on year), indicating that core business earning power is steadily improving; there is no need to be excessively pessimistic about the decline in net profit. It is important to accurately assess earning power on an underlying basis.

The Europe & United States segment achieved revenue growth to ¥31,946 million (up 11.5% year on year), yet segment profit fell sharply to ¥1,109 million (down 49.4% year on year). The main causes cited are increased core system construction costs and higher SG&A expenses, but it is necessary to determine whether the cost increases—including integration costs related to the acquired Italian subsidiary—are temporary or structural. This segment accounts for 23% of total revenue and is a major segment, so the timing of a profitability recovery will affect overall performance.

For the FY2027 (ending March 2027) consolidated earnings forecast, the company disclosed only a revenue range of ¥140,000 million to ¥160,000 million, with operating profit, ordinary profit, and net profit listed as "undetermined"—an unusual response. This reflects rising raw material costs and procurement uncertainty stemming from escalating tensions in the Middle East. As of May 11, 2026, supply for Japan, South Korea, and Southeast Asia has generally been secured through June, but procurement conditions from July onward and progress on price pass-through will be key to FY2027 (ending March 2027) performance.

Growth Strategy

Aiming to become a sustainable, highly profitable company through expanded sales of products responding to environmental regulations, price optimization, and strengthening of global operations

Continuing to optimize selling prices in line with manufacturing costs across all segments. In FY2026 (ending March 2026), this was implemented in Japan, China, South Korea, and Europe & United States, contributing to an improvement in operating margin to 12.5% (from 11.7% in the previous fiscal year). In response to rising raw material costs due to the situation in the Middle East, price revisions have been actively promoted since March 2026.

Capturing growing demand for high-performance antifouling bottom paints and environmentally friendly products, driven by compliance with IMO fuel efficiency regulations (such as CII regulations). Sales of marine paints in FY2026 (ending March 2026) expanded to ¥122,386 million (from ¥115,447 million in the previous fiscal year). Sales of high-value-added products are being promoted across all segments, contributing to improved profitability.

Incorporating the Industrial Paints business of an acquired subsidiary in Italy, sales in the Europe & United States segment expanded to ¥31,946 million (up 11.5% year on year). On the other hand, segment profit sharply declined to ¥1,109 million (down 49.4% year on year) due to increased core system construction costs and operating expenses, making the absorption of integration costs a challenge.

Under the new medium-term management plan (April 2026 to March 2031), the company has set a progressive dividend policy starting from an annual dividend of ¥100 per share, targeting a dividend on equity (DOE) ratio of approximately 5%. The annual dividend for FY2026 (ending March 2026) was ¥111 (ordinary dividend of ¥97 plus special dividend of ¥14), with a payout ratio of 50.1%. For FY2027 (ending March 2027), an annual dividend of ¥100 (interim ¥50, year-end ¥50) is planned.

The wholly owned subsidiary Bunsho Shoji Co., Ltd. (a sales subsidiary with its main market areas in Yamaguchi and Fukuoka Prefectures) will be absorbed through a merger effective July 1, 2026. This aims to consolidate sales channels and rationalize and improve the efficiency of group management. The merger will be implemented as a simplified merger and short-form merger, with no issuance of new shares or cash payments.

Last updated: July 19, 2026