OAT Agrio Co., Ltd.

Business Details

OAT Agrio operates under the management philosophy of "contributing to people around the world through food production increase technology (agritechnology) and sincerity," developing business across three technology domains: pest control technology (agrochemicals), fertigation technology (fertilizers/nutrient solution cultivation systems), and biostimulants. Domestically, the company sells through Zen-Noh and commercial distributors, while overseas it sells globally to Asia, Latin America, Africa, and Europe through consolidated subsidiaries. In addition to its domestic research institute in Naruto City, Tokushima Prefecture, the company maintains overseas research bases in India and Spain, building an integrated system from proprietary active ingredient development through formulation and sales.

Recent Overview

Q1 of FY2026 (ending December 2026) got off to a strong start with double-digit growth in both sales and profit

In the first quarter of FY2026 (ending December 2026) (January to March 2026), net sales were ¥9,963 million (up 13.7% year-on-year), operating profit was ¥1,882 million (up 27.3%), ordinary profit was ¥1,900 million (up 40.2%), and quarterly net profit attributable to owners of parent was ¥1,293 million (up 38.8%), with all indicators showing substantial increases. The agrochemical segment grew 19.9%, driven by strong domestic performance of "Hachihachi" and steady overseas performance of "Dani Saraba" and "Oncol," while the fertilizer and biostimulant segment also grew 9.4%, supported by solid performance both domestically and overseas. The disappearance of the ¥122 million foreign exchange loss recorded in the same quarter of the prior year, which turned into a foreign exchange gain of ¥26 million in the current quarter, also contributed to the substantial increase in ordinary profit. There has been no change to the full-year earnings forecast, and the company continues to invest actively toward the completion of its new medium-term management plan (2024-2026).

Key Products

Growth Drivers

• Expanding domestic and international adoption of Green Products (natural/organic JAS-compliant agrochemicals) ("Safoil" and "Tomonol" increased year-on-year)
• Strong sales of biostimulant products ("Entenmaster," "Lidavital," "Argamix," "Fulvody")
• Accelerating overseas expansion in the agrochemical segment (steady sales growth of "Dani Saraba" and "Oncol")
• Solid performance of overseas affiliates (LIDA Plant Research in Spain, Asahi Chemical Europe in the Czech Republic, PT. OAT MITOKU AGRIO in Indonesia)
• Expansion of the domestic fertilizer market (year-on-year increase in greenhouse fertilizers and nutrient solution cultivation fertilizers, strong performance at Asahi Chemical)
• Promoting adoption of smart agriculture (Agrio Ichigo Master) and utilization of AI and sensing technology
• Strengthening priority businesses such as probioponics and fertigation technology under the new medium-term management plan (2024-2026)
• Strengthening the new product pipeline through active investment in research and development

Risks

• Shrinking trend in the domestic agricultural market (market contraction accompanying declining agricultural production value)
• Foreign exchange risk (high proportion of overseas sales creates risk of profit pressure during yen appreciation; overseas sales in the current first quarter were ¥7,044 million, accounting for 70.7% of total sales)
• Geopolitical risk (rising crude oil and energy prices due to heightened geopolitical risks including the situation in the Middle East, and political instability in key markets such as Asia, Latin America, and Africa)
• Goodwill impairment risk (possible need for impairment processing if the performance of subsidiaries acquired through M&A deteriorates; goodwill balance at the end of the current first quarter was ¥5,198 million)
• Rising raw material and energy costs (increased manufacturing costs due to inflation; cost of sales rose 12.7% year-on-year to ¥5,006 million)
• Prolonged and costly agrochemical registration process (developing new agrochemicals requires approximately 10 years and costs in the several-billion-yen range)
• Sales concentration among major customers (dependence on sales to Maruzen Pharmaceutical Co., Ltd.)
• Seasonality risk (shipments tend to concentrate in spring (Q1) in preparation for the peak farming season, resulting in large sales disparities compared to other quarters)
• Increase in short-term borrowings (short-term borrowings at the end of the current first quarter were ¥9,114 million, up ¥1,330 million from the end of the previous fiscal year)