KOHSOKU CORPORATION

Business Details

Kosoku Group Co., Ltd. consists of a single segment, the "Packaging Materials Manufacturing & Sales Business," which manufactures and sells lightweight food packaging materials and industrial packaging materials. The company handles a wide range of products including food containers, films, paper products, machinery and equipment materials, and corrugated cardboard, with the food distribution, retail, restaurant, and prepared-food (takeout) markets as its primary customers. The company positions its social role as "supporting food distribution," "contributing to food safety and security," and "enhancing the enjoyment of shopping and the deliciousness of food," and continues to provide stable product supply and proposal-based sales. The group operates through a structure of six consolidated subsidiaries (Kosoku Seapac, Seiwa Co., Ltd., Nihon Contec, Plus Packaging System, Tokiwa Package, and Kosoku Sealing) that generate group synergies.

Recent Overview

FY2026 (ending March 2026) set record-high profits at every income level, with net sales achieving a record high for the 11th consecutive fiscal year

Consolidated results for FY2026 (ending March 2026) (April 2025 to March 2026) were net sales of ¥124,191 million (up 7.1% year on year), operating income of ¥4,865 million (up 7.4%), ordinary income of ¥5,238 million (up 8.2%), and profit attributable to owners of parent of ¥3,764 million (up 8.6%), with each profit stage reaching a record high. Net sales achieved a record high for the 11th consecutive fiscal year, operating income and ordinary income for the 8th consecutive fiscal year, and net income for the 5th consecutive fiscal year. By product category, Food Containers (up 8.7% year on year) and Machinery, Equipment Materials (up 8.0%) were the main drivers. The company implemented an annual dividend of ¥116, including a commemorative dividend for the 60th anniversary of its founding (¥30 each for the interim and year-end dividends), achieving 22 consecutive years of dividend increases. For FY2027 (ending March 2027), the company forecasts net sales of ¥135,000 million (up 8.7% year on year) and operating income of ¥5,100 million (up 4.8%). Investment cash flow expanded due to acquisition of property, plant and equipment (-¥4,254 million), and the cash balance at fiscal year-end decreased to ¥4,616 million. Kosoku Sealing Co., Ltd. was added as a consolidated subsidiary, bringing the total to six companies.

Key Products

Growth Drivers

• Sustained increase in demand for food containers driven by the expansion of the prepared-food and restaurant markets (Food Containers category up 8.7% year on year)
• Firm performance in some customer industries due to the recovery of tourism demand after the COVID-19 pandemic
• Continued new customer development and deepening relationships with existing customers, resulting in net sales reaching a record high for 11 consecutive fiscal years
• Synergy effects from the six consolidated subsidiaries of the Kosoku Group (vertical integration of manufacturing, logistics, paperboard containers, film, etc.)
• Active investment in new challenges based on the mid- to long-term management plan "Kosoku Fanzukuri Challenge 2035 to be a good company," starting in FY2026
• Active investment in property, plant and equipment (capital expenditures of ¥4,367 million during the period) to expand production and logistics capacity

Risks

• Pressure of rising procurement costs due to continued increases in raw material and fuel prices (including geopolitical risks such as escalating tensions in Iran)
• Rising prices of imported packaging materials due to exchange rate fluctuations
• Labor shortages and rapid price inflation becoming a management challenge for major customers, creating a risk of order restraint
• Decrease in cash and cash equivalents due to active capital expenditure (year-end balance of ¥4,616 million, down ¥3,500 million year on year)
• Uncertainty in economic trends and an unclear outlook due to destabilization of international affairs (Middle East situation, etc.)
• Operating margin remaining at a low level of 3.9%, posing a high risk of profit pressure in the event of rising costs