ORVIS CORPORATION

Business Details

Using New Zealand pine (radiata pine) and domestic cedar as raw materials, the company saws timber at its plant in Fukuyama City, Hiroshima Prefecture, manufacturing and selling packaging materials, pallet materials, drum materials, civil engineering & construction temporary materials, wood chips, etc. The Fukuyama Plant, which began operations in June 2018, serves as the core production base, characterized by build-to-order production and short lead times. The company is accelerating the shift from imported to domestic timber to reduce foreign exchange risk and secure stable procurement.

Recent Overview

Log consumption volume fell approximately 5% amid weak packaging market conditions, but sales were maintained at prior-year levels due to price increase effects

In H1 FY2026 (ending March 2026) (November 2025 to April 2026), in addition to weakening export packaging cargo movements due to U.S. trade policy and China's economic slowdown, the transition to a full five-day workweek also overlapped, resulting in a decline of approximately 5% year-on-year in log consumption volume. On the other hand, through proposal-based sales activities such as promoting the shift to domestic cedar and leveraging materials for distant regions, together with price increase effects, net sales of ¥3,722 million (99.2% of the prior-year period) were maintained at nearly the same level as the prior-year period. However, operating profit declined significantly to ¥114 million (64.2% of the prior-year period), with a notable deterioration in cost-side profitability.

Key Products

Growth Drivers

• Reduced foreign exchange risk and stable procurement (stabilized purchase prices) through accelerated shift to domestic cedar
• Development of new markets and customers and cultivation of latent demand among existing customers through proposal-based sales
• Capital investment to improve production efficiency at the Fukuyama Plant (preventing sawing machine breakdowns and enabling quick recovery)
• Strengthened competitiveness through accumulated transaction experience spanning major corporations to startups
• Securing orders through geographic sales expansion, including leveraging materials for distant regions

Risks

• Continued sluggishness in export-related cargo movements due to U.S. tariff policy and China's economic downturn
• Rising ocean freight costs due to heightened tensions in the Middle East (concerns over closure of the Strait of Hormuz)
• Rising procurement costs for NZ logs (imported raw materials) and declining profitability amid yen depreciation
• Risk of insect damage to raw materials and declining yield rates due to heat waves and abnormal weather
• Decline in production capacity and log consumption volume due to transition to a full five-day workweek
• Cost pressure from elevated transportation costs, port handling fees, and consumable material costs
• Repayment burden related to borrowings for construction of the Timber Business Fukuyama Plant