Results mixed for three Japanese pesticide makers

Three Japanese companies that specialize in pesticide production posted mixed results for the 2010 pesticide year of October 2009 to September 2010. Hokko Chemical reported sales and profit gains but the other two struggled with sluggish domestic demand and the strong yen, which adversely affected their offshore sales.

For this pesticide year, domestic business conditions are projected to be as severe as in the preceding year. With overseas demand, especially in emerging nations, basically on an upward swing, all three are targeting overseas market for development while rationalizing their operations and reinforcing their marketing capability in Japan.

Nihon Nohyaku suffered a fall in domestic sales due to downward inventory adjustment in its distribution channels at home and a blow taken from the unseasonable weather, but its Phoenix insecticide enjoyed robust sales in Asia, resulting in overall sales growth but lower profit. It plans realize a corporate structuring by reviewing the cost performance of its products and the rations of their inventories to sales and production, and to strengthen its marketing capability.

Sales of Kumiai Chemical Industry’s pesticides expand in India and Brazil but their domestic sales shrank because of the intense summer heat. Its operating profit jumped by about 50% from the preceding year. It intends to maintain the healthy domestic sales of its core products like paddy herbicides, and ratchet up its globalization strategy by forging closer partnerships with overseas affiliates.

Hokko Chemical Industry’s sales of paddy herbicides, horticulture insecticides and fungicides grew at home, and sales also increased for its fine-chemicals business on steady demand for its electronic materials and plastic additives. The ratio of its manufacturing cost to sales improved, and it managed to bring its operating, ordinary and net incomes back into the black. It plans to take steps to further raise its sales and profits by promoting its new products that were launched in the 2010 pesticide year and by introducing higher-margin fine chemicals.