Daiei Kankyo Co., Ltd.

Business Details

Provides one-stop services from collection and transport of industrial and municipal waste through intermediate processing, resource recycling, and final disposal. Comprises businesses such as Waste Treatment & Resource Recycling, Soil Purification, Facility Construction & Operation Management, Consulting, Energy Creation, and forest conservation. Major customers include manufacturers, general contractors, medical institutions, and municipalities. As the core segment accounting for the majority of consolidated net sales, external customer sales for FY2026 (ending March 2026) totaled ¥85,248 million.

Recent Overview

Entry into the Kyushu area through the consolidation of Scarabée Sacré as a subsidiary; both sales and profit reached record highs

In November 2025, the company consolidated Scarabée Sacré Co., Ltd. (acquisition cost ¥44,000 million, voting rights ratio 80%) as a subsidiary, acquiring a controlled-type final disposal site with a licensed capacity of approximately 8,810 thousand m³. Four months of the company's performance, from December 2025, contributed to consolidated results. Goodwill of ¥33,700 million (amortized evenly over 20 years) was recognized. Coupled with the commencement of operations at the Phase 2 final disposal site of the Gobo Recycling Center and the start of operations at DINS Kansai's plastic recycling facility, sales in the Environment-Related Business reached a record ¥85,248 million (up 10.0% year on year), with segment profit also reaching a record ¥22,477 million (up 2.7% year on year). On the other hand, the profit margin declined to 26.4% (from 28.3% in the prior period) due to increases in depreciation, personnel expenses, and outsourcing costs.

Key Products

Growth Drivers

• Significant expansion of licensed final disposal site capacity (approximately 8,810 thousand m³ added) through the consolidation of Scarabée Sacré Co., Ltd. as a subsidiary, and construction of a waste treatment and resource recycling system in the Kyushu area
• Continued expansion of waste intake in the Kanto area (centered on consolidated subsidiary Kyodo Doboku Co., Ltd.)
• Expansion of new orders for contaminated soil treatment and focus on hard-to-treat soil (intake volume for FY2026 (ending March 2026) up 38.2% year on year)
• Enhanced processing capacity through the commencement of operations at the Phase 2 final disposal site of the Gobo Recycling Center and the start of operations at the DINS Kansai plastic recycling facility
• Continued receipt of orders for waste treatment demand associated with infrastructure development projects (mainly in the Kansai area)
• Expansion of business areas through M&A (consolidation of subsidiaries such as Scarabée Sacré, Hizen Kankyo, Kaisei, and Kyoto Eco Service)
• Advancement of energy recovery facility development plans through public-private partnership (PPP) projects in the Kyushu area

Risks

• Downward pressure on segment profit margin due to a significant increase in depreciation (from ¥5,800 million in the prior period to ¥8,455 million in the current period)
• Cost increases due to higher personnel expenses from staff increases and improved treatment, as well as higher outsourcing costs associated with demolition work and waste transport
• Significant increase in interest-bearing debt associated with the acquisition of Scarabée Sacré (long-term borrowings up ¥45,022 million from the end of the prior period) and a decline in the equity ratio (from 51.0% to 42.2%)
• Continued downward pressure on profit from the even amortization of goodwill of ¥33,700 million (related to Scarabée Sacré) over 20 years (approximately ¥1,685 million per year)
• Increase in depreciation due to the end of offsetting effects from the re-estimation of asset retirement obligations at final disposal sites and higher amortization unit costs
• Risk of regional imbalance in waste intake volume and business startup costs in the new area (Kyushu)