Three Japanese agrochemical makers posted mixed results for fiscal 2011

Date:02-01-2012

Out of three companies that count agrochemicals as core business, Nihon Nohyaku and Kumiai Chemical Industry reported sales and profit gains for their respective fiscal 2011 while Hokko Chemical Industry posted lower sales. Plans for fiscal 2012 include the accelerated marketing and sales expansions of new products at home, and the launching of existing and new products overseas to develop new markets.

Nihon Nohyaku, whose fiscal 2011 ended in September, said that its domestic sales were mostly unchanged from the previous year, with the favorable reception of its Colt horticultural insecticide, a new product that was jointly developed with Kumiai, offset by its sluggish sales of paddy herbicides and the negative impact from the March earthquake and tsunami. Its overseas sales increased only slightly as a whole despite healthy demand for its Applaud paddy herbicide because of the strong yen. Sales rose for its pharmaceutical division due to pharmaceutical and animal-drug technology royalties.

FY 2011 major agrochem makers’ performances
(in¥ mn, % change)	Sales	Operating profit	Ordinary profit	Net profit
Nihon Nohyaku (ended in Sep. 30)	40,450 0.1	3,539 11.3	3,334 12.9	2,178 35.2
FY 2012 (est.)	39,500 -2.3	2,600 -26.5	2,600 -22.0	1,600 -26.5
Kumiai Chemical (ended in Oct. 31)	42,095 10.0	1,446 46.0	2,059 20.6	1,360 5.3
FY 2012 (est.)	45,500 8.1	1,700 17.6	2,500 21.4	1,700 25.0
Hokko Chemical (ended in Nov. 30)	41,206 -4.2	658 -38.7	498 -32.6	-41 -
FY 2012 (est.)	43,400 5.3	1,040 58.1	820 64.5	290 -

The company intends to expand the sales of its internally developed agrochemicals in Japan while intensifying its marketing abroad of products that meet local needs.

Kumiai Chemical Industry, whose fiscal 2011 ended in October, posted higher domestic sales due to solid demand for products like isotianil, a nursery-box treatment for paddy seedlings, and its Starcle paddy pesticide and Propose horticultural fungicide. In addition, overseas sales were buoyant for its Staple herbicide for cotton cultivation and Nominee paddy herbicide, and pyroxasulfone, a new herbicide for corn and other crops, further pushed up its sales.

For fiscal 2012, under a business strategy to be driven mainly by a newly formed marketing division, the company will step up its domestic promotion and heighten collaboration between its Japanese and overseas operations.

Hokko Chemical Industry, whose fiscal 2011 ended in November, saw a decline in its agrochemical business’ sales because of fierce competition in the segment of nursery-box treatment, and sales and profit plunges for its fine-chemicals business as a result of the yen’s rise and sluggish demand. It revised its targets for fiscal 2014, the final year of its five-year business plan, to sales of 43.8 bn yen ($568 mn), down from the earlier 49.5 bn yen, and 1.6 bn yen in ordinary profit, down from 3 bn yen.

The company will bolster its domestic marketing of core products like its A-One paddy herbicides, improve its fine-chemicals business’ profitability, and cultivate a new market for its Kasuga-mycin fungicide by launching the product in the US this year.