ENVALITH
オルガノ株式会社 logo

ORGANO CORPORATION

6368・Prime Market・Machinery

Official website
オルガノ株式会社 logo
ORGANO CORPORATION6368

Business

Organo Corporation is a comprehensive water treatment engineering company founded in 1946. Its parent company is Tosoh Corporation, and the group consists of 11 subsidiaries and 2 affiliated companies. In its core Water Treatment Engineering Business, the company designs, constructs, and operates pure water/ultrapure water production facilities and process water/wastewater treatment facilities, primarily serving the electronics industry (advanced semiconductors), general industry, and social infrastructure. The Functional Products Business handles Water Treatment Chemicals, functional materials, and food materials. In addition to Japan, the company has local subsidiaries in Taiwan, the United States, Southeast Asia, and China, conducting business globally. Consolidated net sales for FY2026 (ending March 2026) were ¥177,654 million.

Business Model

The Water Treatment Engineering Business consists of the Plant Business (equipment design, construction, and delivery) and the Solutions Business, which encompasses consumable replacement, maintenance, operation management, and equipment ownership-type services. The Plant Business records revenue through orders and delivery of large-scale projects, while the Solutions Business accumulates stable earnings through continuous service provision to existing customers. The Functional Products Business supplements stable cash flow through sales of Water Treatment Chemicals, functional materials, and Food Materials & Food Additives.

Company Strengths

Revenue from the TSMC group, Taiwan's largest semiconductor manufacturer, reached ¥44,818 million in FY2026 (ending March 2026) (25.2% of total company revenue), a sharp expansion from ¥22,785 million (14.0%) in the previous period. The company has successively secured large-scale semiconductor-related projects in Taiwan, the U.S., and Europe, demonstrating strong technical capabilities and customer base in the ultrapure water field for advanced semiconductors as a proven track record.

The Solutions Business, which includes equipment-owning services, maintenance, and operation management, tends to be relatively highly profitable; in FY2026 (ending March 2026), the Water Treatment Engineering Business achieved an operating margin of 22.6% (operating profit of ¥34,339 million divided by revenue of ¥151,961 million). The expansion of the Solutions Business has contributed to the continuous improvement of the gross profit margin, and combined with improved profitability in the Plant Business, the company-wide operating margin has risen to 21.2%.

The company has consolidated subsidiaries in Malaysia, Thailand, Vietnam, China, Taiwan, and the U.S., with its U.S. subsidiary, established in 2021, currently building out a local engineering framework. In February 2026, a local subsidiary was newly established in India to begin market research. The company has developed a system capable of simultaneously receiving orders for and delivering large-scale projects both domestically and internationally, and in FY2026 (ending March 2026), orders received in the Water Treatment Engineering Business reached ¥141,685 million (up 12.2% year on year).

ENVALITH's Perspective

The order intake plan for FY2027 (ending March 2027) calls for a substantial increase to ¥230,000 million (up 36.9% year on year), premised on securing large-scale orders for advanced semiconductors in Japan, Taiwan, and the United States. The carried-over order backlog for FY2026 (ending March 2026) remained at a high level of ¥96,503 million, providing reasonably high visibility toward achieving the plan of ¥200,000 million in net sales and ¥40,000 million in operating profit. As an external factor, the sustainability of generative AI demand is key, and trends in data center investment will determine whether performance surprises to the upside or downside.

Sales to the TSMC group amounted to ¥44,818 million, accounting for approximately 25% of total net sales, indicating a high degree of dependence on a single customer. Risks related to a Taiwan contingency and intensifying U.S. semiconductor export controls toward China and shifts in trade policy could directly affect order trends and progress on overseas projects. Management has also explicitly noted the risk that shortages and price increases of petrochemical products amid Middle East tensions could spill over into raw material procurement costs and transportation costs. At present, no major impact on earnings has materialized, but continued monitoring of the prolongation of geopolitical risk is necessary.

Operating cash flow for FY2026 (ending March 2026) declined significantly to ¥13,099 million from ¥21,100 million in the previous fiscal year. The main cause was an increase in lease investment assets (down ¥18,344 million) associated with the construction of equipment-owning service facilities, expanding the balance of such assets to ¥53,856 million. To fund this, short-term borrowings increased by ¥9,525 million (balance of ¥28,402 million), and long-term borrowings also increased to ¥6,000 million, turning financing cash flow into an inflow of ¥3,118 million. The growing funding needs and trends in financial leverage underlying the expansion of stock-type (recurring) revenue warrant continued monitoring.

Growth Strategy

Under ORGANO 2030, the company aims for net sales of ¥250,000 million, an operating margin of 18% or higher, and ROE of 15% or higher in FY2031 (ending March 2031)

Continued receipt of large orders for ultrapure water equipment for advanced semiconductors in Japan, Taiwan, the U.S., and Europe. For FY2027 (ending March 2027), the company plans orders of ¥230,000 million (up 36.9% year on year), expecting steady progress on large-scale overseas projects. Building a local engineering organization in the U.S. supports expansion of order-taking and delivery capacity.

Expanding the Solutions Business—including consumable replacement, maintenance, operation management, and comprehensive maintenance—both in Japan and overseas to raise the proportion of recurring revenue. Lease investment asset balance has already expanded to ¥53,856 million, building up a stable future earnings base. The operating margin of 21.2% has already exceeded the long-term target of 18% or higher.

Building a local engineering organization in the U.S. and establishing a new base in India. The company has accumulated a track record of receiving orders for large-scale semiconductor projects in Taiwan, the U.S., and Europe, and is also strengthening its regional solutions organization. PT Lautan Organo Water is being transitioned to an equity-method affiliate, optimizing the scope of consolidation.

While streamlining low-profitability transactions in the food sector, the company is expanding orders and sales of high-value-added products such as Water Treatment Chemicals, advanced separation and purification functional materials, and compact pure water systems for medical research institutions for the electronics industry. In FY2026 (ending March 2026), net sales increased, but operating profit decreased 11.5% year on year to ¥3,309 million due to higher SG&A expenses, making profitability improvement a challenge.

Last updated: July 19, 2026