Toho Zinc Co.,Ltd.
5707・Prime Market・Nonferrous Metals
Business
Toho Zinc Co., Ltd. (to be renamed Toho Metallix Co., Ltd. in June 2026) is a non-ferrous metal smelting company founded in 1937. Its core Smelting business handles the smelting of lead, silver, gold, bismuth and other metals. The company also operates an Environment & Recycling Business that manufactures and sells Zinc Oxide derived from electric-furnace dust; an Electronic Materials & Functional Materials Business covering electronic components and high-purity Electrolytic Iron; a Metal Recycling Business established following the reorganization of the zinc smelting operations; and peripheral services including civil engineering, transportation, and environmental analysis. Major customers include metal trading companies such as Hanwa Co., Ltd. (14.3% of net sales) and Sumisho Material Co., Ltd. (13.4% of net sales), as well as tire manufacturers and specialty steel makers. In December 2024, the company formulated a business revitalization plan, completing its withdrawal from the unprofitable Resources Business (Australian mine) and the reorganization of its zinc smelting operations, and is advancing a structural transformation to concentrate management resources on lead and silver smelting and recycling.
Business Model
The company procures raw ore and secondary raw materials such as electric furnace dust and used batteries, processes them into products including Lead Products, Electrolytic Silver, gold, and Zinc Oxide using smelting and recycling technologies, and sells them. Since sales prices are linked to LME prices and precious metal market prices, metal market conditions and foreign exchange rates significantly affect earnings. The Smelting segment is the core business, accounting for approximately 83% of net sales of ¥125,550 million, with a structure in which the recovery of by-products (gold, silver, bismuth, etc.) determines profitability. The Environment & Recycling Business has a dual revenue model comprising waste treatment fees and product sales.
Company Strengths
In addition to its core smelting of lead and silver, the company possesses technology to recover rare metals such as gold, bismuth, and antimony as byproducts. In FY2025, as silver prices surged to a full-year average of $53.1/toz (up from $30.4/toz in the previous fiscal year), sales of silver products increased 78.9% year on year, demonstrating how multi-item recovery capability has contributed to earnings stabilization and expansion.
In 1973, the company succeeded in commercializing technology to recover valuable metals such as Zinc Oxide from electric-furnace dust, and has since built a track record of over 50 years. Sales in the Environment & Recycling Business reached ¥6,927 million (FY2026, ending March 2026), with Zinc Oxide for tire manufacturers as its mainstay product, supporting a stable customer base. The business is characterized by a dual revenue structure combining waste treatment and product sales.
The company manufactures high-purity Electrolytic Iron ranging from 99.95% (3N5) to 99.999% (5N grade) purity using its proprietary manufacturing process. It has a track record of adoption in critical components for harsh environments, including aircraft landing gear, jet engine parts, and nuclear power plant components, and has built technological entry barriers through joint research with universities and external research institutions, patent acquisitions, and academic presentations.
ENVALITH's Perspective
Performance Trend
Net sales were ¥125,550 million (down 0.6% year on year), a slight decline, but earnings improved significantly with operating profit of ¥6,722 million (up 19.5% year on year), ordinary profit of ¥5,678 million (up 53.9% year on year), and net income of ¥4,782 million (a turnaround from a net loss of ¥1,458 million in the prior period). As an external factor, the surge in silver prices (full-year average of $53.1/toz, up 75% year on year) and gold prices pushed up earnings in the Smelting business. Meanwhile, the fact that the impairment loss of ¥7,678 million recorded in the prior period was zero in the current period contributed greatly to the improvement in net income. Selling, general and administrative expenses were reduced from ¥7,571 million to ¥5,900 million, and the effects of structural reforms are also becoming apparent. For FY2027 (ending March 2027), the company forecasts net sales of ¥178,500 million (up 42.2% year on year) and ordinary profit of ¥4,500 million (down 20.7% year on year). The increase in sales reflects the full-scale operation of the Smelting business, but profit is expected to decline due to conservative assumptions regarding silver prices.
Growth Strategy
Over a five-year business turnaround period, rebuild the earnings base centered on lead and silver smelting and recycling
Major facilities in the zinc smelting business were shut down at the end of March 2025 and reorganized into the metal recycling business, and the company fully withdrew from the Australian resources business as well. The special loss of ¥7,678 million recorded in the prior period became zero in the current period, completing the normalization of the earnings structure.
With the establishment of safe, stable operations and the prevention of trouble as top priorities, the company is advancing sophistication of the raw material best mix and strengthening the recovery of valuable metals (gold, silver, bismuth, etc.) from secondary raw materials. The FY2027 (ending March 2027) forecast for ordinary income in the Smelting segment is ¥2,900 million.
The company continues to accumulate improvements from various measures and to review low-profit businesses and assets. Selling, general and administrative expenses have already been reduced from ¥7,571 million in the prior period to ¥5,900 million. The sale of assets held in connection with the zinc smelting reorganization contributed ¥1,451 million to ordinary income in the Metal Recycling segment.
In March 2026, the company issued stock acquisition rights with an exercise price revision clause (exercise period from March 2026 to March 2028). Exercises in April raised ¥680 million through 593,600 shares. The company also concluded a loan commitment agreement totaling ¥100 million with MUFG Bank to secure liquidity. Improving the capital adequacy ratio from 13.8% remains a challenge.
The company is advancing the strengthening of valuable metal recovery from secondary raw materials, along with price increases and expanded sales channels for each product. Promoting consideration of investment to strengthen the business's competitiveness and enhancing functions with an eye toward non-continuous growth are set forth as the basic policy for FY2027 (ending March 2027). The FY2027 (ending March 2027) forecast for ordinary income in the Environment & Recycling segment is ¥1,850 million (a target of a substantial increase from ¥920 million in the prior period).
Last updated: July 19, 2026