Nippi,Incorporated
7932・Standard Market・Other Products
Collagen Casing Business
The only domestic manufacturer and one of the world's four major producers of edible collagen casing for sausages
| Period | Current | Previous | Change |
|---|---|---|---|
| Net sales | ¥9,236 million | ¥9,328 million | ↓ |
| Segment profit (operating profit) | ¥812 million | ¥1,165 million | ↓ |
| Depreciation and amortization | ¥548 million | ¥691 million | ↓ |
| Increase in property, plant and equipment and intangible assets | ¥169 million | ¥174 million | ↓ |
| Impairment loss | ¥438 million | ¥0 million | ↓ |
Business Details
The Company procures processed raw materials from overseas consolidated subsidiaries and manufactures edible collagen casing for sausages. In addition to direct sales to domestic ham and sausage manufacturers, products for North America are exported via NIPPI COLLAGEN NA INC. Domestically, Colored Collagen Casing and Wiener Size are the mainstay products. In FY2026 (ending March 2026), declining production efficiency due to increasing product diversification in smaller lots, along with rising labor and raw material costs, weighed on results, and an impairment loss of ¥438 million was recorded on unprofitable manufacturing equipment.
Recent Overview
Significant profit decline due to smaller-lot product diversification, lower production efficiency, and impairment of unprofitable equipment
In FY2026 (ending March 2026), the Collagen Casing Business recorded net sales of ¥9,236 million (down 1.0% year on year) and segment profit of ¥812 million (down 30.3% year on year), a substantial profit decline. In addition to rising raw material and labor costs, declining production efficiency due to increased product diversification in smaller lots and hot, humid summer conditions squeezed profit. Furthermore, the Company withdrew from production of overseas-specification products for which no future improvement in profitability was expected, recording an impairment loss of ¥438 million as an extraordinary loss related to associated equipment and modification costs. Exports to North America performed well, but sales to Asia declined due to intensifying price competition.
Key Products
Growth Drivers
- Earnings contribution from stable demand and continued strong sales of exports to North America
- Improved fixed cost structure and profitability recovery through disposal of and withdrawal from unprofitable manufacturing equipment
- Support for domestic sales from solid product categories such as Colored Collagen Casing and Wiener Size
- Productivity improvement and cost reduction through higher yield rates and manufacturing process review
- Strengthened response to customer needs through establishment of a system to accommodate smaller-lot product diversification
Risks
- Rising manufacturing costs due to increases in raw material (collagen) costs, fuel costs, and labor costs
- Ongoing risk of declining production efficiency due to product diversification in smaller lots
- Intensifying price competition in exports to Asia
- Seasonal demand fluctuation risk for domestic Frank Size (dependent on weather and events)
- Impact on North American exports from developments in US trade policy (tariffs)
- Ripple effects on retail sales volume from price revisions by ham and sausage manufacturers
Last updated: June 25, 2026