Toyobo Textile Co., Ltd. is set to pursue more capital-efficient business operations in preparation for its next medium-term management plan, which begins in fiscal 2026 (ending March 2027). President Eiichi Shimizu stated that the company aims to achieve a Return on Equity (ROE) of 10% under the new plan, emphasizing profit-oriented proposals and sales strategies, while also strengthening its product-out approach to development and proposals.
In the final year of the current medium-term plan, fiscal 2025, the company transferred its industrial materials and functional materials businesses from Toyobo STC Co., Ltd. in April. Although this makes direct comparisons with fiscal 2024 difficult, even when accounting for the transfer, the first half (April to September) saw flat sales but increased profits. Shimizu attributed this to the reduction of unprofitable and low-margin business segments, particularly in OEM products.
The export textile business performed well, with strong demand for traditional garments in the Middle East and high-density nylon fabrics in Europe and the U.S. The uniform business also showed positive results, with knit fabrics for workwear performing well in stock apparel, and custom uniforms benefiting from new project acquisitions. In the materials business, while innerwear applications remained sluggish, raw yarn sales were solid, and interest in recycled cotton yarns increased.
On the other hand, the school business was sluggish. Increased distribution inventory led to a decline in sales volume, and the resulting drop in volume raised the burden of fixed costs, lowering profit margins. The sports business was also affected by weak domestic market conditions and the transitional phase of shifting production from domestic sewing factories to overseas facilities.
Looking ahead to fiscal 2026, when the next medium-term plan begins, Shimizu emphasized that sales revenue will no longer be a key performance indicator (KPI), and the company will continue to focus on profitability. The goal of achieving 10% ROE will require identifying the businesses and markets where this is feasible.
From this perspective, Shimizu noted that while the company has traditionally followed a market-in approach, it now needs to strengthen its product-out development and proposal capabilities. Leveraging its strengths as a textile materials manufacturer in raw material and fabric development, and combining that with its procurement capabilities as a trading company, Toyobo aims to enhance development and proposals targeting higher-value market segments.