NAGASE & CO., LTD.
8012・Prime Market・Wholesale Trade
Functional Materials
A trading segment specializing in functional chemical materials positioned upstream in the value chain
| Period | Current | Previous | Change |
|---|---|---|---|
| Net Sales (Full Year, FY2026 (ending March 2026)) | ¥153,642 million | ¥153,746 million | — |
| Gross Profit (Full Year, FY2026 (ending March 2026)) | ¥32,243 million | ¥32,511 million | ↓ |
| Operating Income (Full Year, FY2026 (ending March 2026)) | ¥9,305 million | ¥9,213 million | ↑ |
| Depreciation (Full Year, FY2026 (ending March 2026)) | ¥802 million | ¥762 million | ↑ |
| Increase in Property, Plant & Equipment and Intangible Assets (Full Year, FY2026 (ending March 2026)) | ¥1,949 million | ¥1,269 million | ↑ |
| Segment Assets (End of FY2026 (ending March 2026)) | ¥122,493 million | ¥123,699 million | ↓ |
| Unamortized Goodwill Balance (End of FY2026 (ending March 2026)) | ¥1,786 million | ¥1,819 million | ↓ |
Business Details
Handles a wide range of functional chemical materials including coatings, inks, pigments, additives, urethane raw materials, electronics chemicals, surfactants, information/printing-related materials, communications equipment, water treatment products, functional films/sheets, and sanitary materials. Responsible for materials supply at the upstream end of the value chain, providing resin raw materials, specialty epoxy, solvents, pigments/dispersions, high-purity chemicals, silicone products, MOFs, CO2 capture equipment, and more.
Recent Overview
Net sales and gross profit were flat, but operating income increased due to reductions in SG&A expenses
In the Functional Materials segment for FY2026 (ending March 2026), net sales were ¥153,642 million (down 0.1% year-on-year) and gross profit was ¥32,243 million (down 0.8% year-on-year), remaining roughly flat. While sales of coating raw materials declined due to decreased demand in automotive and construction applications, sales of semiconductor material raw materials increased. Operating income rose to ¥9,305 million (up 1.0% year-on-year), supported by reductions in SG&A expenses. Note that from FY2027 (ending March 2027), this segment is scheduled to be reorganized and integrated into the "Materials" segment.
Key Products
Growth Drivers
- Expanding demand for semiconductor material raw materials (increase in high-purity chemicals and electronics chemicals for AI semiconductors and advanced semiconductors)
- Improved operating margin through reductions in SG&A expenses
- Development of new environmental and sustainability-related products such as MOFs and CO2 capture equipment
- Increasing demand for electronics chemicals such as 5G-related materials and fluorine chemicals
- Consolidation of management resources and faster decision-making through reorganization into the Materials segment from FY2027 (ending March 2027)
Risks
- Sluggish demand for automotive and construction coating raw materials (decline continued in FY2026 (ending March 2026))
- Risk of fluctuations in coating raw material market conditions (earnings deterioration when market conditions decline)
- Impact on raw material sales from cyclical fluctuations in the semiconductor market
- Risk of decreased yen-converted overseas sales due to yen appreciation
- Risk associated with the transition of management systems accompanying the segment reorganization (integration into Materials) in FY2027 (ending March 2027)
Last updated: June 26, 2026