Pacific Metals Co., Ltd.
5541・Prime Market・Iron & Steel
Business
Pacific Metals is a Tokyo Stock Exchange Prime Market-listed company that specialized as a dedicated ferronickel manufacturer in 1999. It smelts nickel ore at its manufacturing plant in Hachinohe City, Aomori Prefecture to produce Ferronickel Products, supplying mainly stainless steel manufacturers such as Nippon Steel (74.0% of net sales). It secures raw materials through long-term purchase agreements with mining companies in the Philippines (Rio Tuba, Taganito) and New Caledonia (MAI KOUAOUA and others). The group consists of 2 subsidiaries and 9 affiliated companies, and also operates peripheral businesses including the Gas Business, Real Estate Business, Retail Electricity Business, and Calcium Aluminate Manufacturing & Sales Business. Under the mid- to long-term strategy "PAMCOvision2031," covering FY2025 through FY2031, the company is pursuing a zero-based review of its business model and restructuring of its business portfolio.
Business Model
The main revenue source is the smelting and sale of Ferronickel Products, supplied to major stainless steel manufacturers via trading companies at sales prices linked to LME nickel prices and exchange rates. Operating income/loss is heavily influenced by nickel market conditions, but equity in earnings of affiliates accounted for by the equity method (such as Nickel Asia Corporation) (¥7,875 million in FY2026 (ending March 2026)) complements ordinary income/loss, forming a complementary structure. The Gas Business (Taiheiyo Gas Center Co., Ltd.) serves as a stable revenue source responsible for internal supply.
Company Strengths
The company has concluded long-term purchase agreements of up to 10 years with Rio Tuba, Taganito, and CAGDIANAO (Philippines) as well as MAI KOUAOUA and Societe Miniere Georges Montagnat (New Caledonia). Through multiple long-term contracts, including a 10-year agreement covering January 2026 to December 2035, the company has established a stable procurement base for nickel ore, its primary raw material.
Through equity-method affiliates such as the Philippine-listed Nickel Asia Corporation, the company recorded equity in earnings of affiliates of ¥7,875 million (up ¥2,462 million year on year) in FY2026 (ending March 2026). This income has served a complementary earnings function, securing ordinary profit of ¥3,323 million and net income of ¥2,610 million even amid continued operating losses. The company's capital participation in these affiliates is based on a long-standing relationship dating back to 1973.
For polymetallic nodules from the Clarion-Clipperton Zone in the Pacific Ocean, the company achieved the world's first successful commercial-scale continuous smelting test using actual equipment (rotary kiln/electric arc furnace), completing a feasibility assessment. This includes the establishment of a process for producing LIB-grade nickel sulfate and cobalt sulfate, giving the company a track record of leading development in next-generation smelting technology.
ENVALITH's Perspective
Performance Trend
Revenue for FY2026 (ending March 2026) was ¥9,414 million (down 28.5% year on year), marking the fifth consecutive year of declining sales. Ferronickel sales volume was 3,962 tons (down 27.0% year on year), the applicable LME nickel price was $6.91/lb (down 10.9% year on year), and the applicable exchange rate was ¥150.87/dollar (a 0.7% yen appreciation year on year), reflecting a continued headwind from the external environment. On the other hand, cost of sales improved due to a reversal of inventory write-downs, and the operating loss narrowed to ¥4,971 million (an improvement of ¥2,397 million from ¥7,368 million in the prior period). Due to an increase in equity in earnings of affiliates to ¥7,875 million (from ¥5,413 million in the prior period), the company achieved recurring profit of ¥3,323 million and net profit of ¥2,610 million, returning to profitability for the first time in two periods. In financing activities, the company paid dividends of ¥3,662 million and conducted share buybacks of ¥3,644 million, resulting in cash and cash equivalents of ¥18,394 million (down ¥6,580 million from the end of the prior period).
Growth Strategy
Business portfolio restructuring through a zero-based review of business operations, targeting operating profitability in FY2028 (ending March 2028)
In light of intensifying competition with nickel pig iron, the company continues a strategic volume-restraint approach that does not compromise a certain level of profitability. Forecast sales volume for FY2027 (ending March 2027) is further reduced to 3,600 tons (versus actual 3,962 tons in the prior fiscal year). Discussions on expanding applications for matte raw materials are also ongoing.
A toll smelting business that produces battery metal materials and steelmaking raw materials from seabed resources. Based on feasibility study results, toll smelting costs and the investment schedule are being examined in detail. The company continues to prepare for equipment modification investment while awaiting the establishment of mining regulations.
The company entered into a capital and business alliance with MiRESSO, an Aomori Prefecture-based company, and participated in its Series A funding round. It has already underwritten a third-party allotment of new shares worth ¥1,521 million as an investment to build a demonstration plant on the premises of the company's manufacturing site. The organizational structure is being strengthened toward commercialization.
The company is developing the Retail Electricity Business, supplying electricity to high-voltage and extra-high-voltage business customers as well as local renewable energy power supply. Manufacturing and sales of calcium aluminate have commenced. Research and development related to LIBs is also being promoted. Currently, the "Others" segment reports an operating loss of ¥168 million.
A seven-year plan spanning FY2025 to FY2031. Under the long-term vision of becoming "a comprehensive materials company that co-creates a sustainable circular society," the company aims to diversify by combining metal smelting, functional materials, electricity, and resource recycling. Achieving operating profitability and net sales of ¥21,500 million from FY2028 (ending March 2028) onward has been set as an interim target.
Last updated: July 19, 2026