NATOCO CO.,LTD.

Business Details

Operates primarily in two fields: Coatings for Metal (baking coatings, heat-shielding coatings, coatings for machine tools, cylinders, etc.) and Coatings for Building Materials (for housing exteriors and interior building materials). In addition to domestic manufacturing sites, the segment also manufactures products at overseas subsidiaries in China (Qingdao), the Philippines, and Vietnam, and sells through its Thai subsidiary and authorized distributors. The main customer is Nichiha Corporation (sales of ¥5,358 million in the current fiscal year, 24.1% of total company sales). This is the core business, accounting for approximately 63% of group sales.

Recent Overview

First-half segment profit increased 30.2% year on year, driven by higher demand for Coatings for Metal and improved cost management

In the first half of FY2026 (ending October 2026) (November 2025 to April 2026), net sales in the Coatings Business were ¥7,270 million (up 0.4% year on year), and segment profit was ¥696 million (up 30.2% year on year). Demand for machine tools, electrical equipment, and cylinder-related metal coatings was strong, and orders in March and April increased due to concerns over the future Middle East situation, supporting sales. On the other hand, Coatings for Building Materials declined slightly due to the impact of decreased housing starts. Additionally, as a subsequent event, on May 11, 2026, the company entered into an agreement with Zeon Corporation to acquire all shares of Toupe Co., Ltd. (manufacturer and seller of general coatings) at an acquisition cost of ¥2,190 million (planned business combination date: November 2, 2026), and decided on a policy to expand the scope of the Coatings Business and restructure its production system.

Key Products

Growth Drivers

• Continued strong demand for Coatings for Metal used in machine tools, electrical equipment, and cylinders
• Coatings for Building Materials: domestic demand from principal customer Nichiha Corporation (sales of ¥5,358 million in FY2025, ended October 2025, up 10.7% year on year)
• Expansion of product lineup and customer base through the acquisition of the interior building material coatings sales business from the DIC Group in July 2024
• Expansion of coatings business scope and restructuring of production system through the full consolidation of Toupe Co., Ltd. (acquisition cost of ¥2,190 million, planned for November 2026)
• Sales into Asia leveraging overseas manufacturing bases (China, the Philippines, Vietnam)
• Meeting users' environmental response needs through the expansion of environmentally conscious products (low-VOC, process-shortening, low-temperature baking coatings)

Risks

• Weak demand for Coatings for Building Materials due to declining housing starts and floor area (slight year-on-year decline in the first half of FY2026, ending October 2026)
• Weak demand for Coatings for Metal used in landscaping materials, etc.
• Cost pressure from continued high raw material and energy prices
• Risk of sales concentration in Nichiha Corporation (dependence on a single customer accounting for 24.1% of total company sales)
• Impact of geopolitical risk and China's economic slowdown on the operation and sales of overseas manufacturing sites (Qingdao)
• Integration risk associated with the acquisition of Toupe Co., Ltd. (goodwill amount and assets/liabilities to be assumed are undetermined at this time, and there are transfer price adjustment provisions)
• Risk of increased facility renewal costs due to the aging of the Miyoshi head office plant (approximately 50-60 years since completion)