CHEMIPRO KASEI KAISHA, LTD.

Business Details

The Chemicals Business manufactures and sells UV absorbers, photographic chemical intermediates, papermaking chemicals, antioxidants, electronic materials, and contract manufacturing products. OEM sales and contract manufacturing are the mainstay, with contract manufacturing products accounting for approximately 24% of sales. The main customer is BASF Japan Ltd. (sales of ¥1,839 million in the current period, approximately 20.5% of company-wide sales). While the company focuses on developing new products based on its organic synthesis technology, demand for its core UV absorbers continues to be sluggish.

Recent Overview

The core UV absorbers business declined 12.9% year-on-year, leading to an 8.4% decrease in overall segment sales

Chemicals Business sales for the full year of FY2026 (ending March 2026) were ¥8,019 million (down ¥737 million, or 8.4%, year-on-year). The core UV absorbers product did not recover from the demand slump that began in the second half of the prior fiscal year, resulting in a decline of ¥635 million, while contract manufacturing products also decreased by ¥192 million. On the other hand, papermaking chemicals (up 37.2% year-on-year) and antioxidants (up 3.6% year-on-year) achieved increased sales due to sales expansion efforts. Sales of new products were not recorded this period due to production delays caused by difficulty in procuring raw materials. Segment profit was ¥781 million (down ¥20 million year-on-year).

Key Products

Growth Drivers

• Continued sales growth from expanded sales of papermaking chemicals (full-year FY2026, ending March 2026: up 37.2% year-on-year)
• Sales expansion from increased demand for antioxidants (full-year FY2026, ending March 2026: up 3.6% year-on-year)
• Growth in the contract manufacturing business through expanded product lineup and new customer development
• Contribution to sales in future periods from new products that were not recorded this period due to difficulty procuring raw materials
• Strengthened R&D through industry-academia collaboration for organic EL electronic materials and share gains as the market expands
• Building a stable revenue base by achieving an optimal product mix of direct sales, OEM, and contract manufacturing

Risks

• Continued sluggish demand for the core product, UV absorbers (full-year FY2026, ending March 2026: down 12.9% year-on-year)
• High dependence on specific customers such as BASF Japan (current period sales of ¥1,839 million, approximately 20.5% of company-wide sales), creating significant risk from transaction fluctuations
• Increased costs due to persistently high raw material prices and energy costs, and delays in passing costs on to prices
• Occurrence of production suspension costs due to production adjustments (full-year FY2026, ending March 2026: ¥140 million recorded)
• Instability in procurement (both volume and price) of naphtha-derived raw materials due to geopolitical risks, and demand disparities caused by stagnation in the European and Chinese economies
• Risk of failing to achieve sales plans for new products due to difficulty procuring raw materials and production delays
• Increased low-price competition from competitors and slowing market growth due to commoditization of core products