ENVALITH
クミアイ化学工業株式会社 logo

KUMIAI CHEMICAL INDUSTRY CO., LTD.

4996・Prime Market・Chemicals

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クミアイ化学工業株式会社 logo
KUMIAI CHEMICAL INDUSTRY CO., LTD.4996

Business

Kumiai Chemical Industry, founded in 1928, is an agrochemical specialist manufacturer that handles the entire process from in-house development through manufacturing and sales of agrochemicals such as insecticides, fungicides, and herbicides. In Japan, its main sales channel is the National Federation of Agricultural Cooperative Associations (Zen-Noh/JA Zen-Noh), with proprietary active-ingredient products such as the paddy rice herbicide "Efida" and the box treatment agent "Dizalta" serving as core offerings. Overseas, it markets the upland crop herbicide "Axeev" in the United States, Australia, South America and other regions, and has built a global network with consolidated subsidiaries in the United States, Belgium, India, Singapore and other locations. As a second pillar, the company also operates a Chemical Products Business that includes electronic materials for generative AI servers (Bismaleimides), among others. Of net sales of ¥170,462 million (FY2025, ending October 2025), the Agrochemicals and Agriculture-Related Business accounts for approximately 80%. The company is listed on the Prime Market of the Tokyo Stock Exchange.

Business Model

In the agrochemicals business, new agrochemicals created at the company's own research institutes (Biological Science Research Institute and Chemical Research Institute ShIP) are protected by patents, generating revenue through domestic sales via JA Zen-Noh and global sales via overseas subsidiaries and partner companies. In the Chemical Products Business, the company manufactures and sells Chlorotoluene-based Chemicals, fine chemicals, and Industrial Chemicals, with the electronic materials field, driven by demand related to generative AI, leading profitability. Research and development expenses of ¥7,060 million (FY2025, ending October 2025) are invested annually, aiming for sustainable growth through an enriched pipeline.

Company Strengths

The company holds proprietary in-house developed active ingredients such as Axeev, Efida, and Dizalta, with Efida mixture formulations reaching a domestic adoption area of 558,607ha as of June 2025. It maintains the No. 1 market share in the one-shot herbicide market for paddy rice, and differentiation through intellectual property protection of its proprietary active ingredients and the development of mixture formulations underpins its earnings base.

The company operates consolidated subsidiaries and equity-method affiliates in the U.S., Belgium, India, Singapore, Brazil, Thailand, and other countries. Its U.S. subsidiary owns a test site in Mississippi where local evaluations are conducted. Sales to FMC Corporation amounted to ¥24,365 million (FY2025 (ending October 2025)), making it one of the company's major customers, reflecting an established global sales base.

The operating margin of the Chemical Products Business improved from 3.1% in the previous fiscal year to 6.1% in FY2025 (ending October 2025). Against a backdrop of surging demand for electronic materials (Bismaleimides) used in generative AI servers, operating profit rose 97.9% year on year to ¥1,528 million, partially offsetting the decline in profit from the agrochemicals business.

ENVALITH's Perspective

Operating profit for the first half of FY2026 (ending March 2026) was strong at ¥10,464 million (up 10.8% year-on-year), but the full-year forecast remains at just ¥7,200 million (down 31.9% year-on-year). The interim progress rate has reached 145%, highlighting the conservatism of the full-year forecast. The company has left its earnings forecast unchanged, citing that it is still assessing the impact of the situation in the Middle East, and the lack of transparency regarding the basis for the expected significant profit decline in the second half is a source of uncertainty for investors. Assessing the potential for an upward revision to the full-year forecast will be the near-term focus.

Whereas the same period last year recorded a foreign exchange loss of ¥2,621 million, the current interim period saw a shift to a foreign exchange gain of ¥1,027 million, leading to a substantial improvement in ordinary profit, up 66.0% year-on-year to ¥13,763 million. Equity in earnings of affiliates accounted for by the equity method also increased from ¥1,342 million to ¥2,318 million. However, these improvements are largely dependent on external factors (foreign exchange rates and the performance of equity-method affiliates), and the divergence from the operating profit-based improvement rate (up 10.8%) warrants attention. Foreign exchange trends in the second half will determine whether the full-year ordinary profit target is achieved.

In the chlorination business of consolidated subsidiary Ihara Nikkei Chemical Industry, the company recorded an impairment loss of ¥514 million and restructuring costs of ¥907 million (totaling ¥1,421 million) as extraordinary losses in response to a deteriorating business environment. Although operating profit in the Chemical Products Business increased, these extraordinary losses are weighing on net profit. Points of attention going forward include the timing of the completion of the restructuring and whether additional costs will arise. On the other hand, growth continues in the electronic materials field, centered on Bismaleimides, and the trend toward higher value-added business portfolio composition can be viewed positively.

Growth Strategy

Aiming to achieve medium-term management plan targets through global expansion of proprietary agrochemicals and growth in the electronic materials segment of the Chemical Products Business

Through enhanced sales promotion support in anticipation of generic entry, shipments to the US increased year-on-year in the first half of FY2026 (ending March 2026, note: fiscal year ending October 2026 based on context). Maintaining market share after patent expiry and transitioning to successor products are key to sustaining medium-term profitability.

Preparations for the launch of next-generation agrochemicals are underway, and these are expected to serve as a revenue source following Axeev. Applications to and approval acquisition from regulatory authorities in each country are the main progress milestones.

Driven by demand for generative AI servers, sales in the Chemical Products Business grew significantly by 16.2% year-on-year in the first half of FY2026 (ending October 2026). The company will continue capital investment and customer base expansion in the electronic materials field, aiming to cultivate it into a second pillar of profitability after the agrochemicals business.

In the chlorination business of Ihara Nikkei Chemical Industry, the company recorded an impairment loss of ¥514 million and structural reform expenses of ¥907 million, and is implementing business restructuring. The company aims to improve the overall profitability of the Chemical Products Business by streamlining unprofitable operations.

Under the medium-term management plan starting from FY2024 (ending October 2024), the company is advancing key initiatives to enhance corporate value. There is a significant gap between the full-year forecast for FY2026 (ending October 2026) and the medium-term plan targets, making recovery in the second half a key challenge for achieving the plan.

Last updated: July 17, 2026