FULUHASHI EPO CORPORATION

Business Details

The company undertakes the processing of woody waste generated at building demolition sites, housing construction sites, etc., and manufactures and sells wood chip products through crushing and cutting processing. The business model generates revenue from both processing fees paid by waste-generating businesses and wood chip sales revenue. The company supplies raw material chips for paper manufacturing and wood-based building boards, as well as fuel chips for biomass power generation and boilers, contributing to carbon neutrality and a resource-recycling society. The company is expanding its base from the Chubu region, centered on Aichi Prefecture, into the Kanto region.

Recent Overview

Strengthened raw material procurement structure with new sites in operation; revenue increased but profit declined

The Nagoya Narumi CE Center began operations in September 2025, and the Aichi No. 8 Plant (Ichinomiya), opened in October 2024, has also continued to operate steadily. With both sites in operation, the raw material procurement structure was strengthened, and revenue increased (107.1% YoY) due to higher production volume driven by increased quantities. On the other hand, segment profit declined to 96.9% YoY due to cost increases such as higher depreciation and amortization (¥611 million versus ¥471 million in the prior year) associated with expanded capital investment. Acceptance of disaster-affected wood from Noto, Ishikawa Prefecture ended in June 2025. Even under the difficult market conditions of declining housing starts due to the revised Building Standards Act, volume trends remained solid due to new customer acquisition and expansion of transactions with existing customers.

Key Products

Growth Drivers

• Increasing demand for domestically recycled wood chips against a backdrop of carbon-neutral demand
• Further expansion of processing capacity through the planned new opening of the Nagoya Narumi CE Park (first half of FY2027 ending March 2027)
• Strengthened raw material procurement structure and supply stabilization through the Nagoya CE Center (operational September 2025) and the Aichi No. 8 Plant (Ichinomiya) (operational October 2024)
• Improved sales unit prices due to the effect of the procurement unit price revision implemented in January 2025 (continuing to contribute in the current period)
• Improved competitiveness of domestic wood fuel versus imported biomass fuel in terms of environment and cost
• Outlook for maintained or slightly increasing volume of demolition waste generation against a backdrop of measures such as the Vacant House Special Measures Act

Risks

• Risk of reduced procurement volume of woody waste raw materials due to a decline in housing starts (down 12.9% year-on-year) resulting from the revised Building Standards Act (effective April 2025)
• Long-term declining trend in new housing starts due to soaring housing material costs and policy interest rate hikes
• Increased depreciation and amortization and expanded financial burden associated with large-scale capital investment such as construction of new plants (short-term borrowings increased by ¥1,392 million year-on-year)
• Risk of plan delays as indicated by the extension of the medium-term management plan period (from FY2028 ending March 2028 to FY2030 ending March 2030) and the downward revision of numerical targets (revenue from ¥150 million to ¥140 million, operating profit from ¥30 million to ¥25 million)
• Impact of fluctuations in imported fuel prices on the relative competitiveness of wood fuel
• Risk of compliance with environmental regulations including the Waste Management Act (impact on business continuity in the event of compliance violations)
• Long-term contraction in demand for housing demolition and new construction due to population decline