Review of Operations: Specialty

Net Sales

Specialty-NSOP.png

Organic Chemicals

Domestic and overseas ethyleneamine product shipments increased as demand recovered. In addition, product prices increased due to improved market conditions overseas. 

Bioscience

Separation-related products saw an increase in shipments of packing materials for liquid chromatography to Europe, the United States and China on the back of a recovery in demand.  

Advanced Materials

Shipments of high-silica zeolite increased both in Japan and overseas as demand recovered. Increased demand also pushed export shipments of zirconia for dental applications upward. 

Operating Income

Operating income increased due primarily to the recovery in demand, which drove an increase in sales volume.

  • Advanced Materials

    Message from the Senior General Manager 
    The strength of the Specialty business is determined by the function of the product and the extent of its value to the customer. For this reason, we need to continue to lead in our field and promote the improvement and creation of customer value by developing new technologies ahead of our competitors. 

    Changes in customer values not only pose a challenge but also present a significant opportunity. To provide products that meet market needs in a timely manner, it is important that we increase our access to technologies and technical knowledge, and that we disseminate this information throughout the company and pass it on accurately to the next generation of employees. This is the decisive factor for the Specialty business. 

    material_1.jpg

    Nobukatsu Ohmichi 
    Senior Vice President 
    President, Specialty Group
    Senior General Manager, Advanced Materials Division 


    SWOT Analysis 
     
    Strengths 

    • High-performance product lineup based on proprietary technologies 
    • Accumulation and transmission of knowhow and experience gathered through extensive customer support 
    • Global brand recognition 
    • Supply stability with multiple production bases 

    Weaknesses 

    • Exchange rate fluctuations 

    Opportunities 

    • New demand inspired by trend toward carbon neutrality 
    • Healthcare needs associated with promotion of health investment and realization of a health-promoting society 
    • Long-term demand for semiconductors 
    • Growing awareness of circular economy

    Threats 

    • Intensifying business conditions due to rising competition 

    Review of Previous Medium-term Business Plan 

    The Advanced Materials Division sought to make timely capital investment to expand business, primarily in growth areas such as high-silica zeolites, zirconia and quartz in order to take advantage of increasing opportunities offered in the semiconductor and healthcare markets and due to environmental regulations. However, unexpected external factors, including the spread of COVID-19, a semiconductor shortage and the Russia-Ukraine conflict, impacted our business performance and we were unable to achieve targets for certain products. Nevertheless, we do not believe that we need to significantly modify the direction of our growth strategy. We will continue to take advantage of opportunities for growth, particularly in an IT-based and increasingly health-conscious society, and focus on creating the technologies required to provide new products for these sectors.  
     
    Strategy Under New Medium-term Business Plan 

    The division will implement three basic strategies to achieve the goals of the new medium-term business plan: A partnership strategy to cultivate customer base, a technology dissemination strategy to create new demand, and a brand strategy to create customer value through unique technology. Following this approach, we will seek to continuously develop and launch differentiated products, propose solutions to customer issues and expand production, particularly for quartz, sputtering targets and ceramics, in a timely manner. During the period of the new medium-term business plan, we will strive to build a robust foundation for the division with the aim of achieving the company-wide business vision for fiscal 2031 of establishing a profit base of ¥100 billion in the Specialty business.     

  • Organic Chemicals

    Message from the Senior General Manager 

    Amid political and economic turmoil around the world due in part to the COVID-19 pandemic and to various global conflicts, we will take the fullest possible advantage of our status as one of Asia’s few manufacturers of bromine and ethyleneamines to ensure stable supply and expand our customer base. At the same time, the division will address social changes based on the SDGs. This includes the realization of carbon neutrality–an urgent issue worldwide–and responses in the environmental and energy fields, through our advanced organic synthesis and differentiated technologies.   

    chemicals_1.jpg   
     
    Mitsutaka Sugata 
    Vice President 
    Senior General Manager, Organic Chemicals Division 


    SWOT Analysis 
     
    Strengths 
    • Creation of new technologies through organic synthesis technology 
    • Global sales bases 
    • Collaboration across manufacturing, sales, and research departments 

    Weaknesses 

    • Smaller business scale compared with major global corporations 
    • Time spent from new product launch to market release 
    • Impact of price fluctuations in raw materials and fuels 

    Opportunities 

    • Chemical products indispensable to society and a stable market 
    • Few manufacturers of bromine and ethyleneamines in Asia 

    Threats 

    • Decrease in demand due to global economic slowdown 
    • New plant expansion by competitors 
    • Emergence of alternative materials due to soaring product prices 

    Review of Previous Medium-term Business Plan 

    The division worked to establish a diverse business portfolio and stabilize earnings through its focus on strengthening existing businesses and developing new products. Although we had to modify plans to expand sales of each product, and raw material and fuel prices differed from our initial assumptions, improved market conditions for chemical products worldwide made up for this, allowing us to come close to achieving our profit target. We recognize that there are still issues that remain unresolved regarding the weaknesses outlined in the SWOT analysis and will strive to remedy these accordingly.        
     
    Strategy Under New Medium-term Business Plan 

    No major changes have been made to this division’s strategy under the new medium-term business plan. While continuing to support social infrastructure with materials such as ethyleneamines and bromine, we aim to develop a sustainable society where environmental protection is ensured for future generations and people across the globe can enjoy peace of mind through our new products. The division, with its highly original product line, will support people's daily lives by utilizing advanced organic synthesis technologies that contribute to solving social issues centered on the environment.  

  • Bioscience

    Message from the Senior General Manager 
    The Bioscience Division has been striving to contribute to people’s “Good Health and Well-Being,” which is Goal 3 of the SDGs. Our target life science market has experienced unprecedented changes in recent times due to extremely dynamic market trends and the COVID-19 pandemic. We remain committed to our basic policy of contributing to society through technological innovation and will work to create a system in which we can respond flexibly to any situation.         

    bioscience_1.jpg

    Tatsuji Kushimoto 
    Vice President 
    Senior General Manager, Bioscience Division 


    SWOT Analysis 

    Strengths 

    • Proprietary technology based on separation 
    • Extensive lineup of diagnostic tests and automated systems that provide fast results 
    • Integrated system for development, production, sales, maintenance and customer support 
    • Worldwide sales network 

    Weaknesses 

    • Single manufacturing base for each product 
    • Time and cost required to create new products 

    Opportunities 

    • Increase in testing demand due to the outbreak of infectious diseases such as COVID-19 
    • Increase in global demand due to trends in pharmaceutical development and manufacturing 

    Threats 

    • Market contraction due to a reduction in medical expenditure and consolidation of hospitals and laboratories in Japan and overseas 
    • Stricter laws and regulations on a worldwide basis 
    • Preferential treatment for domestic products in emerging countries 

    Review of Previous Medium-term Business Plan 

    In our diagnostics business, we expanded our existing operations by launching various tests such as SARS-CoV-2 antibody and other antigen/antibody detection reagents. In our separation and purification business, shipments of separation and purification media increased due to growing demand for the production of oligonucleotide drugs and antibody pharmaceuticals. As a result, consolidated net sales exceeded our target of ¥50 billion. 

    In addition, with the aim of becoming a total solution provider in the field of biopharmaceutical purification, we succeeded in acquiring a company in the United States. At the same time, issues have emerged in ensuring the stable supply of separation and purification media and we are aware of the need to further increase capacity and make the necessary investment to address this.                       
     
    Strategy Under New Medium-term Business Plan 

    In our diagnostics business, we will strive to expand sales of AIA®-CL systems in Europe and advance the application process in the United States and China. In addition, we will release HLC®-723GR01, a new glycohemoglobin analyzer, and AIA-CL300, a small AIA-CL system, to the market and take steps to increase sales. In our separation and purification business, we will build a new plant for separation and purification media and increase production capacity to meet burgeoning demand. In Japan, we will start business collaboration with Shimadzu Corporation in the biopharmaceutical market and strengthen sales of bio columns. We will also actively conduct M&A, introduce technologies and promote joint development to expand peripheral businesses and create new opportunities for growth.