Synthetic Fiber Producers Fiber & Textile Business Posts Sharply Increased Profits

According to the consolidated account settlements of five major Japanese synthetic fiber producers for the fiscal year ending in March 2016, profitability improved with operating profits increasing thanks to the tailwinds from the positive effects of declines in raw material and fuel prices. Toray Industries, Inc. achieved record-breaking figures again in the stages of net sales, operating profits, ordinary profits and net profits. Asahi Kasei Corporation reported record profits for the third consecutive year.
Similarly, the fiber and textile business of most of the producers posted double-digit growths in operating profits thanks to the decrease in manufacturing costs and improved export profitability from the weak Japanese currency.
The fiscal account settlements were characterized by the increased operating profit margins in their fiber and textile business. The margin was the greatest for Asahi Kasei, 10.3% (8.0% in the previous fiscal year), followed by Toray, 7.7% (6.4%); Toyobo Co., Ltd., 2.9% (2.7%); Unitika Ltd., 2.4% (1.5%); and Teijin Limited, 1.9% (1.6% ).
Contributing to the margins were the declines in raw material and fuel costs, an improvement of export profitability and increases in the business figures of overseas subsidiaries and affiliates due to the weak yen.
Toray’s Fibers and Textiles Business achieved a record-breaking performance with consolidated sales of 892,039 million yen (up 4.1% year-on-year) and operating profits of 68,909 million yen (up 23.9%). On a non-consolidated basis, Toray overseas subsidiaries increased their operating profits by slightly more than 30%. In Japan, profits increased except for nylon filament. Polyester staple fiber, artificial suede, polyphenylene sulfide (PPS) fiber and polyester filament contributed to the business performance. Toray Sakai Weaving & Dyeing (Nantong) Co., Ltd. in China achieved significant growths in sales and profits.
Asahi Kasei’s Fibers and Textiles Business achieved consolidated sales of 132,100 million yen (up 1.3% year-on-year) and operating profits of 13,700 million yen (up 30.4%). Since it was spun off as Asahi Kasei Fibers Corp. in 2003, profits reached an all-time high. Asahi Kasei Fibers returned to the main body of Asahi Kasei Corp. this April. All materials were in full production and sales conditions, and low raw material prices and the weaker yen also had satisfactory effects. Profits were also achieved by the German spandex manufacturing subsidiary and Thai polypropylene spunbond producing subsidiary.
Teijin’s Trading and Retail Business posted sales of 270,933 million yen (up 4.4% year-on-year) and operating profits of 5,329 million yen (up 25.4%). Core company Teijin Frontier Co., Ltd. marketed non-consolidated net sales of 210.8 billion yen (up 2.4%), while operating profits decreased by 9.7% to 3.7 billion yen, but overseas bases performed aggressively. Particularly, Nantong Teijin Co., Ltd. in China and Thai Namsiri Intertex Co., Ltd. in Thailand achieved profits, which contributed to the profit increase.
The Advanced Fibers and Composites Business had sales of 133,016 million yen (down 1.8% year-on-year) and operating profits of 18,498 million yen (up 28.8%). Sales decreased due to structural reforms in the polyester staple fiber business, but an improvement of the sales mix and decreases in raw material and fuel costs significantly improved profits.
Toyobo’s Textiles and Trading Segment achieved consolidated sales of 85,486 million yen (up 0.4% year-on-year) and operating profits of 2,500 million yen (up 7.1%). While acrylic staple fiber and the Brazilian subsidiary had business difficulties, thobe fabric exports to the Middle East contributed to the segment’s business with a 10% sales growth and 20-30% increase in operating profits. Meanwhile, the Industrial Materials Segment posted sales of 70,522 million yen (down 1.3%) and operating profits of 6,288 million yen (down 4.7%) due to weak sales of airbag fabrics.
Unitika’s Fibers and Textiles Business posted a sales decrease of 12.9%to 65,431 million yen, but its operating profits improved 40.2% to 1,586 million yen. Although profitability worsened for the uniforms and sportswear segments, structural reforms in the polyester staple fiber business contributed to the business performance.