ENVALITH
日本鋳鉄管株式会社 logo

NIPPON CHUTETSUKAN K.K.

5612・Standard Market・Iron & Steel

Official website
日本鋳鉄管株式会社 logo
NIPPON CHUTETSUKAN K.K.5612

Business

Nippon Chuo Kan Co., Ltd. was founded in 1937 and is a listed company (TSE Standard) with a manufacturing base in Kuki City, Saitama Prefecture. Its core business is the manufacture and sale of ductile iron pipes, manhole covers, resin pipes, and related fittings, with water and sewage utilities and gas companies as its main customers. Through four consolidated subsidiaries (Nitchu Shoji, Tsurumi Kozai Center, Nitchu Service, and Igarashi), the company has built an integrated group structure covering sales, logistics, recycling, and materials sales. In recent years, it has been expanding its business domain to cover the entire pipeline maintenance cycle, including pipeline diagnosis DX services (Fracta-AI, Daisaku-kun) and construction tools (Rakuchaku, Oseal).

Business Model

Ductile Iron Products account for approximately 87% of net sales of ¥15,942 million, with sales primarily generated through water supply utilities and distributors. Manufacturing is conducted through an integrated electric furnace production system at the Kuki Plant (Saitama Prefecture), and added value is provided through assortment services leveraging the group's trading company and warehouse functions. The company aims to expand its earnings base from the conventional one-time pipe material sales model to encompass the entire pipeline maintenance cycle, through continued price revisions, expanded sales of high-value-added products (Oseal, Rakuchaku, and KATANA valves), and paid provision of the pipeline diagnosis DX service.

Company Strengths

Electric furnace production operations commenced in July 2025, and full conversion to electric furnaces was achieved in October of the same year. By completely converting from cupola furnaces, the company aims to achieve a 50% reduction in GHG emissions by FY2027 compared to FY2013. The renewal of the manufacturing base, into which a total capital investment of ¥2,395 million was made (Ductile Iron Products), constitutes a unique competitive advantage that is difficult for competitors to replicate in a short period of time.

In March 2025, the company signed a manufacturing joint venture agreement with Kubota (with the company holding an 80.1% equity stake). The company plans to undertake OEM production of small-diameter ductile iron pipes (nominal diameter 75mm to 250mm) at Kubota's Keiyo Plant, targeted for around December 2026. Improved productivity and reduced cost per weight are expected through increased production volume, making this a strategic manufacturing base reinforcement measure that simultaneously resolves the industry's excess production capacity and expands profitability.

Fracta-AI Pipeline Diagnosis technology, developed in partnership with Fracta Japan, received the Infrastructure Maintenance Grand Prize / Prime Minister's Award in January 2025, and adoption by water utilities is expanding. Manhole inspection DX software "Daisaku-kun" and construction tools "Rakuchaku" and "Oseal" (Components for Sheath Pipe Jacking Method) have also been building track records, and revenue sources beyond pipe material sales are materializing, such as the official adoption of the circular fire hydrant precast construction method by the Tokyo Waterworks Bureau.

ENVALITH's Perspective

In FY2026 (ending March 2026), the company recorded net sales of ¥15,942 million (down 5.8% year on year), operating profit of ¥258 million (down 1.0%), and ordinary profit of ¥215 million (down 19.4%), continuing the trend of lower revenue and profit. However, profit attributable to owners of parent turned positive at ¥91 million, a recovery from a loss of ¥230 million in the previous period. One-time costs associated with electric furnace operation and a loss on disposal of fixed assets of ¥73 million have already been recorded in the current period, suggesting that the peak of structural transformation costs may be past. On the other hand, interest expenses doubled from ¥43 million in the previous period to ¥90 million, and attention should be paid to the risk that increased financial costs associated with rising borrowings will continue to pressure ordinary profit going forward.

As an external factor, order volumes for ductile iron pipes from water utilities remained weak nationwide in FY2026 (ending March 2026) as well, with the mainstay small-diameter size in particular falling below the previous year's level. Gas pipeline construction volume also continued its declining trend. In addition, rising prices across various items such as parts procurement costs, energy prices, and logistics costs are pressuring profitability. The earnings forecast for FY2027 (ending March 2027) has been left undecided, citing an inability to make a reasonable estimate, and amid high uncertainty stemming from Middle East conditions, trade policy, foreign exchange fluctuations, and other factors, investors continue to face poor visibility into performance.

At the end of FY2026 (ending March 2026), interest-bearing debt (short-term borrowings of ¥4,850 million + current portion of long-term borrowings due within one year of ¥2,169 million + long-term borrowings of ¥2,630 million) totaled ¥9,649 million, a significant increase from the end of the previous period (short-term ¥3,550 million + long-term ¥2,000 million = ¥5,550 million). The equity ratio declined from 41.8% to 38.6%. This was mainly due to capital expenditures (expenditures for acquisition of property, plant and equipment of ¥3,282 million) toward the construction of a new electric furnace and the establishment of a joint venture company; the progress of investment recovery and the capacity to repay borrowings will be important points to watch that will determine financial soundness going forward.

Growth Strategy

Accelerating transformation into a one-stop pipeline solutions company through electric furnace operations, the Kubota joint venture, and DX services

The company plans to spin off the ductile iron pipe (straight pipe) manufacturing division at its Kuki Plant and establish a joint venture (a subsidiary of the company) that will supply small-diameter products on an OEM basis to Kubota's Keiyo Plant. This will simultaneously resolve industry-wide excess manufacturing capacity and optimize the company's own cost structure.

Electric furnace production operations began at the Kuki Plant in July 2025, and 100% conversion to electric furnaces was achieved in October of the same year. The company targets a 50% reduction in CO2 emissions from its products by FY2027 (ending March 2027) (compared to FY2013 (ending March 2013)). One-time costs associated with the electric furnace operation launch have already been recorded in FY2026 (ending March 2026).

The company is promoting the adoption of Fracta-AI Pipeline Diagnosis technology, sales promotion of the DX software "Daisaku-kun," expansion of new sizes for the preset joint tool "Rakuchaku," and expanded sales of the sheath pipe jacking components "Oseal." The aim is to transition to a one-stop pipeline business model that extends beyond water pipe manufacturing and sales.

In response to rising prices of parts procurement, energy, logistics costs, and other expenses, the company continues to promote sales price revisions while gaining customer understanding. Through expanded sales of high-value-added products combined with accumulated cost reductions, the company has maintained operating profit at levels comparable to the previous period even amid declining sales.

In addition to improving sales prices and reviewing the production operation structure, the company is strengthening its profit contribution through expanded collaboration with group companies engaged in warehousing, transportation, and recycling businesses. In FY2026 (ending March 2026), segment profit for this business was ¥168 million, exceeding the profitability of the Ductile Iron Products segment (¥87 million).

Last updated: July 19, 2026