HOKKO CHEMICAL INDUSTRY CO.,LTD.

Business Details

The company's core business, engaged in the manufacture and sale of agrochemical products and agrochemical active ingredients. Consolidated subsidiaries Hokko Sangyo Co., Ltd. and Biei Hakudo Kogyo Co., Ltd. handle a portion of sales. Domestically, the National Federation of Agricultural Cooperative Associations (Zen-Noh) is the major customer (accounting for 42.0% of net sales in FY2025 (ending November 2025)). Overseas, the U.S. subsidiary HOKKO CHEMICAL AMERICA CORPORATION is responsible for market research and promotional activities in the North, Central, and South American markets, and exports to India, Brazil, and other countries are expanding. Domestic sales centered on Paddy Rice Agents and Horticultural Agents remain solid, and the company is promoting global expansion through the creation of proprietary active ingredients and the expansion of registration countries.

Recent Overview

The Agrochemicals Business achieved substantial increases in both revenue and profit. Domestic and overseas sales were strong, with operating income up 56.1% year on year.

In the first half of FY2026 (ending November 2026) (December 2025 to May 2026), the Agrochemicals Business recorded net sales of ¥23,832 million (up ¥2,553 million, or +12.0%, year on year) and operating income of ¥2,673 million (up ¥961 million, or +56.1%, year on year), achieving substantial growth in both revenue and profit. Domestic sales of both Paddy Rice Agents and Horticultural Agents progressed steadily, while overseas sales increased mainly to India and Brazil. The impact of orders placed earlier than usual and the weaker yen also contributed. In addition to the increase in net sales, an improved profit margin led to the substantial increase in operating income. When commission income related to agrochemical active ingredients (¥249 million) is factored in, the substantive profit of the Agrochemicals Business amounts to ¥2,921 million.

Key Products

Growth Drivers

• Strong domestic sales of Paddy Rice Agents and Horticultural Agents against a backdrop of heightened willingness to control pests (continuing the high level of pest-control demand seen in the prior year)
• Expansion of overseas sales, mainly in India and Brazil, and the capture of orders placed earlier than usual
• The effect of the weaker yen boosting the yen-denominated value of overseas sales
• Operating leverage from higher net sales and improved profit margin (H1 operating income +56.1%)
• Overseas market development through the expansion of registration countries for the proprietary active ingredient ipfencarbazone (8 countries as of the end of FY2025)
• Added value through the expansion of product lines and wider adoption of the highly dispersible granule "Rakuryu®"
• Reduction in manufacturing costs through the planned consolidation of production sites (Hokkaido Plant and Niigata Plant) targeted for FY2030
• Emergence of results from ongoing promotional activities

Risks

• Long-term risk of contraction in the domestic market due to the aging of domestic farmers, lack of successors, and declining cultivated area
• Decrease in exports to China due to a slowdown in the Chinese economy (which became apparent in FY2025)
• Rising raw material procurement costs and procurement risk (some agrochemical raw materials are manufactured by Biei Hakudo Kogyo Co., Ltd.)
• Impact of developments in U.S. trade policy on exports and overseas business
• Risk of fluctuations in agrochemical demand due to weather conditions (pest and disease occurrence and weather patterns)
• Tightening of agrochemical registration regulations and expansion of chemical agrochemical use restrictions associated with the "Strategy for Sustainable Food Systems (Midori Strategy)"
• Risk of fluctuations in second-half demand as a reaction to orders placed earlier than usual