Sangetsu Corporation

Business Details

The segment's core products include Wall Covering (Wallpaper), Flooring, and Fabric (Curtains, Upholstery), which are widely used in both residential and non-residential applications, and it is engaged in the entire space-creation process from design to construction. In addition to the Company itself, the constituent companies include Creanate Corporation (wallpaper manufacturing), Fairtone Corporation (interior construction), Sangetsu Vôné Co., Ltd. (curtain specialty and e-commerce), Sangetsu Okinawa Co., Ltd., Cross Kikaku Co., Ltd. (logistics), and SDS Corporation (logistics). This segment accounts for approximately 79% of consolidated net sales and serves as the Group's core earnings base.

Recent Overview

Both net sales and operating profit saw slight increases. Strengthening of SCM and improvement of product strength advanced through new plant operations and new product launches.

For FY2026 (ending March 2026), the Domestic Interior segment recorded net sales of ¥164,106 million (up 0.1% year-on-year) and operating profit of ¥19,333 million (up 2.1% year-on-year). While Wall Covering (Wallpaper) and Fabric (Curtains, Upholstery) saw increased sales, Flooring declined by 3.1%. Crenate Corporation's new plant in Hiroshima Prefecture began operations in October 2025, establishing a production system with two sites in Eastern Japan and one in Western Japan. Product strength was enhanced through the launch of the New Building Material "INNO PANEL®" sample catalog, the decision to handle BOLON products domestically, and the wallpaper "ELEMENTUM™" winning the iF Design Award 2026 (for the third consecutive year). Logistics functions were also strengthened through the consolidation of SDS Co., Ltd. as a group company.

Key Products

Growth Drivers

• Strengthening supply chain resilience and establishing a stable supply system (2 sites in eastern Japan, 1 site in western Japan) through the launch of Créanate Co., Ltd.'s new Hiroshima Prefecture plant (October 2025)
• Optimization of the product portfolio through expanded sales of labor-saving installation products and environmentally friendly products such as the New Building Material "INNO PANEL®"
• Strengthening the lineup for the high-end market through the start of domestic handling of Sweden's BOLON products (sequentially from FY2026)
• Increase in the number of orders received in the Total Space Business (including Fairtone Co., Ltd.) and creation and expansion of product sales opportunities
• Sophistication and efficiency improvement of logistics functions through making SDS Co., Ltd. a group company
• Steady trend in reform and renovation demand (MLIT survey shows orders for October-December 2025 increased year-on-year for both residential and non-residential)
• Penetration of price revision effects (response to rising procurement costs, logistics costs, and labor costs)

Risks

• Continued decline in new housing starts and floor area (rebound decline in demand that had risen ahead of amendments to the Building Standards Act and the Building Energy Efficiency Act, and rising construction costs)
• Sluggish trend in floor area of new starts in the non-residential market (offices, warehouses, factories, medical and welfare facilities, etc.)
• Profit pressure from continued increases in procurement costs, logistics costs, personnel expenses, etc.
• Structural cost increases driven by constraints in the logistics industry
• Long-term shrinkage trend in the domestic interior market due to population decline and aging
• Risk of energy price surges and supply chain disruption due to escalating tensions in the Middle East
• Downward trend in sales of flooring units (down 3.1% year on year in FY2026 (ending March 2026))