ARAYA INDUSTRIAL CO., LTD.

Business Details

The core business manufacturing and selling Ordinary Steel Pipe, Stainless Steel Pipe, Various Section Steel & Precision Machined Products, Bicycle Rims, and other products. Domestically, New-Ya Giken (the parent company) itself, Daiei Steel Industry, Araya Special Metal, and Stainless Pipe Kogyo handle manufacturing and sales, while overseas, PT. Araya Steel Tube Indonesia manufactures and sells products for the ASEAN market. The segment addresses a wide range of demand areas including construction, logistics, automotive, shipbuilding, food and pharmaceuticals, and water treatment. From the current period, the Bicycle Related rim business has been integrated into this segment. Miyake Kinzoku Co., Ltd. was newly consolidated as a subsidiary, generating goodwill of ¥164 million.

Recent Overview

Both net sales and operating profit declined year on year. Profitability showed an improving trend due to review of unprofitable operations.

In FY2026 (ending March 2026), the Steel Pipe Related segment recorded net sales of ¥39,592 million (down 5.6% year on year) and operating profit of ¥1,290 million (down 12.0% year on year). This reflected the impact of postponed or cancelled construction-related projects and intensified price competition from an influx of cheap overseas materials. On the other hand, profitability improved through the review of unprofitable divisions. Miyake Kinzoku Co., Ltd. was newly consolidated as a subsidiary (generating goodwill of ¥164 million), and segment assets increased by ¥1,528 million year on year to ¥39,187 million. Capital investment in fixed assets also increased significantly year on year to ¥2,503 million, reflecting progress in restructuring the production system.

Key Products

Growth Drivers

• Relatively steady trend in demand for logistics-related applications (warehouses, data centers, pallets)
• Recovery in inbound demand for automotive-related applications (tourist buses)
• Steady order intake for stainless steel products for shipbuilding applications
• Strengthened group collaboration through consolidation of Miyake Kinzoku Co., Ltd. as a subsidiary
• ASEAN market development centered on the Indonesian local subsidiary (growth strategy under the Medium-Term Management Plan 2026)
• Gathering and evaluating information on new technology and sales channel acquisition through M&A (Medium-Term Management Plan 2026)
• Securing profits through sales price revisions reflecting market trends and strengthened manufacturing-sales collaboration

Risks

• Decline in order volume due to persistently high material prices, overtime work regulations, and cautious attitudes among ordering parties in the construction-related field
• Weak outlook and buying restraint in the domestic market due to an influx of cheap imported materials (particularly stainless steel)
• Profit pressure from fluctuations in international prices of raw materials such as nickel
• Delayed recovery in demand for large-scale equipment projects for semiconductor equipment, construction machinery, and building materials
• Downward pressure on sales prices due to intensifying price competition with competitors
• Risk of downturn in automotive-related demand due to an unclear export environment toward North America
• Foreign exchange risk (increased manufacturing costs due to yen depreciation)