NIHON KOGYO CO., LTD.

Business Details

This segment manufactures and sells precast concrete products such as box culverts, heavy-duty pipes, L-shaped retaining walls, drainage channels, river revetment products, and port-related products, targeting national and local government public works projects (resilience against natural disasters, disaster prevention/mitigation, watershed flood control, and maintenance and repair). It also includes slope repair works conducted by the consolidated subsidiary Hazuki Kogyo Co., Ltd. This segment accounts for approximately 72% of consolidated net sales in FY2026 (ending March 2026), making it the group's core segment, with public-sector demand representing the majority of sales.

Recent Overview

Driven by expanded sales of port-related products in Hyogo Prefecture, both sales and profit increased significantly

For the full year of FY2026 (ending March 2026), the Civil Engineering Materials Business achieved net sales of ¥11,778 million (up 14.4% year on year) and segment profit of ¥769 million (up 58.2% year on year), with expanded sales of port-related products (RC Runway Slabs, Container Mats) in Hyogo Prefecture contributing significantly to the increase in sales. In addition to steady performance in L-shaped retaining walls, common utility ducts, and information boxes, results from SEED Form also contributed. The effect of expanded sales of high-value-added products and the ongoing pass-through of raw material price increases to selling prices contributed to improved profit margins. Public-sector net sales increased 26.1% year on year to ¥9,511 million, while private-sector sales decreased 17.6% year on year to ¥2,267 million.

Key Products

Growth Drivers

• Steady public works demand in response to national and local priority policies such as national resilience, disaster prevention/mitigation, watershed flood control, and maintenance and repair
• Expanded sales of high-value-added products such as port-related products (RC Runway Slabs, Container Mats) and SEED Form
• Promotion of precast concrete proposals against a backdrop of labor-saving and construction period reduction needs at construction sites
• Winning orders for highly complex custom-made projects utilizing digital technologies such as 3D data
• Steady pass-through of raw material price increases to appropriate selling prices
• Development of new business areas such as ports, airports, and defense facilities
• Promotion of area strategy in the Kanto and Kyushu regions, where demand volume is large
• Differentiation through development and expanded sales of decarbonization products such as Low-Carbon Concrete "Neco Concrete®"

Risks

• Impact on sales from reduced public works orders or delayed progress (significant impact given this segment accounts for approximately 72% of consolidated net sales)
• Soaring prices of raw materials such as cement, aggregate, and rebar, as well as rising energy and transportation costs (including oil supply uncertainty due to deteriorating conditions in the Middle East)
• Risk of a downturn in the first half of FY2027 (ending March 2027) due to the completion of construction on the large-scale project (for Hyogo Prefecture port) that drove strong performance in the previous period
• High dependence on public-sector demand (approximately 81% of full-year sales in FY2026, ending March 2026), creating exposure to fluctuations in private-sector demand
• Risk of production disruption due to aging production equipment at some plants
• Increased uncertainty in the operating environment due to geopolitical risks (Middle East situation, US-China trade policy)