TAIHEIYO CEMENT CORPORATION

Business Details

With various cements and ready-mixed concrete as its mainstay products, this segment is operated domestically by Taiheiyo Cement itself, Denki Kagaku Kogyo (DC), Meisei Cement, and others. Overseas, the group has operations in the U.S. (Calportland), Vietnam (Nghi Son Cement), the Philippines (Taiheiyo Cement Philippines), Indonesia, and China. In response to the structural decline in domestic cement demand, the segment is pursuing price normalization, export expansion, and optimization of the production system. It is the largest segment, accounting for approximately 74% of the Group's total sales.

Recent Overview

In FY2026 (ending March 2026), segment profit decreased 9.0% year on year, and a large-scale impairment loss was recorded

In the Cement segment for FY2026 (ending March 2026), sales to external customers were ¥661,724 million (down ¥1,276 million year on year) and segment profit was ¥49,332 million (down ¥5,094 million year on year), representing a decline in both revenue and profit. While depreciation and amortization increased significantly to ¥53,268 million (up ¥9,708 million year on year), a sharp increase in impairment loss to ¥24,842 million (up ¥24,643 million year on year) placed substantial pressure on profit. Segment assets increased by ¥15,567 million year on year to ¥1,026,837 million. Note that these figures are the finalized values following the correction dated May 19, 2026.

Key Products

Growth Drivers

• Support for domestic demand from large-scale public investment projects such as national resilience measures, defense-related projects, the Chuo Shinkansen Maglev Line, and the Hokkaido Shinkansen
• Normalization of cement sales prices (a price revision of more than +¥2,000/ton implemented from shipments in April 2025)
• Expansion of export volume to offset the decline in domestic demand
• Rising sales prices in the U.S. West Coast business and the full-scale materialization of public investment based on the Los Angeles Olympics and the Infrastructure Investment and Jobs Act
• Improvement in equity in earnings of affiliates (turning from a loss of -¥82 million in the prior period to a profit of ¥1,232 million in the current period)

Risks

• Structural decline in domestic cement demand (chronic labor shortages at construction sites, expansion of the five-day workweek, and rising construction costs)
• Deterioration of the business environment in the Philippines (inflows of inexpensive imported products) and the materialization of impairment loss risk (¥24,842 million recorded in FY2026, ending March 2026)
• The impact of U.S. trade and tariff policy on the global economy and cement demand
• Prolonged elevated raw material and fuel prices, and delays in passing on cost increases to prices
• Foreign exchange risk (given the high proportion of overseas business, fluctuations in the foreign currency translation adjustment account affect net assets)
• Continued pressure on profit from the significant increase in depreciation and amortization (up ¥9,708 million year on year)