INVESTORS

Review of Operations: Engineering Group


Forward-Looking Statements: Annual reports contain estimates, projections, and other forward-looking statements, which are subject to unforeseeable risks and uncertainties. Readers should understand that Tosoh’s business and financial results could differ significantly from management’s estimates and projections.

For reference purposes only, US dollar amounts have been translated, unless otherwise indicated, from yen at the rate of ¥112.68 = US$1, the prevailing exchange rate at the end of the fiscal year under review.

Tosoh Corporation’s 2016 fiscal year covers the period from April 1, 2015, to March 31, 2016.

 

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The Engineering Group comprises water treatment and pure water generation leader Organo Corporation and construction company Tohoku Denki Tekko Co., Ltd.

Organo maintains three principal businesses. Its plant business sells water treatment systems to electronics, chemicals, oil refinery, food and beverage, paper and pulp, waterworks and sewage treatment, health care, and other companies. Its solution business maintains and manages systems, suggests ways to enhance efficiency and lower environmental impact, and provides water treatment outsourcing services. And its functional products business sells standardized water treatment systems and chemicals and food processing materials.

Tohoku Denki Tekko has five main businesses. The construction business engages in machinery, plant, steel structure, environmental and sanitation facilities, and container construction. Its four other businesses encompass electrical machinery, instrumentation, civil engineering, quality assurance, and maintenance.

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Group Performance and Markets

Tosoh fiscal 2016 Engineering figures 

A Solid Performance

In fiscal 2016, the Engineering Group’s net sales amounted to ¥84.2 billion (US$747.1 million), an improvement of 11.1% over fiscal 2015. The group’s operating income climbed 37.4%, to ¥4.6 billion (US$40.6 million). The group accounted for 11.2% of Tosoh’s consolidated net sales, compared with 9.4% the previous fiscal year. Its operating margin was 5.5%, a decline of 6.5% from fiscal 2015.

Domestic sales of water treatment facilities, services, and related chemicals were up. This reflected growth in plant construction and requests for maintenance and renovation overall in the water treatment industry, primarily for the electronics sector. Overseas sales rose largely as a result of increased demand from a rising number of electronics plants, one demand driver being Taiwan. Sales were down at construction subsidiaries.

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Developments

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Strategies and Outlook

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Medium-term Business Plan