Spinners Structural Reforms Achieve Results

The fiscal 2015 business performance of seven leading Japanese spinners significantly endorsed the results achieved from making investments and structural reforms. For instance, Daiwabo Holdings Co., Ltd. reported achieving record-high profits.
On a corporate-wide basis, the difference in business portfolios also resulted in a marked difference in business performance. As far as their textile business is concerned, five of the seven spinners increased their operating profits, and Nisshinbo Holdings Inc. and Shikibo Ltd. returned to black figures. Energy cost reductions due to low oil prices also were tailwinds improving profitability.
The business performance of Daiwabo Holdings was particularly remarkable with its textile business achieving record profits. The synthetic and rayon fiber segment enjoyed tailwinds from demand growth in sanitary material applications, and achieved results from aggressive capital investments made in Japan and abroad. The apparel segment, which had been a struggling business, also improved profitability by structural reforms, such as the withdrawal from unprofitable products.
The textile business of Nisshinbo Holdings made a V-shaped recovery with a return to black figures. Contributing to its business performance were the facts that there were no longer any business withdrawal losses caused by the transfer of Choya in the previous fiscal year, and that Tokyo Shirts newly became a member of the group. Sales were strong for spandex yarn, elastomeric products and nonwovens.
The textile business of Kurabo Industries Ltd. sharply increased its profits. Global sales of raw yarn and textile materials for non-apparel applications performed well. The denim business was reorganized, and sales of value-added denim moved steadily. Even for overseas subsidiaries, Thai Kurabo Co., Ltd. in Thailand had a firm business performance, and P.T. Kurabo Manunggal Textile Industries in Indonesia returned to black figures as a result of structural reform efforts.
The textile business of Shikibo also returned to black figures. Knit product production was shifted from China to Vietnam due to a deterioration of profits, and this had a favorable effect on business. Fabrics for traditional Middle East garments remained strong, which kept operations at its processing factories at a high level. Lower fuel costs also contributed to earnings.
The textile business of Fujibo Holdings, Inc. posted a decrease in sales, but profits headed upward. Although sales to mass-merchandisers and department stores were sluggish, sales were expanded through new channels such as Internet and TV shopping, and an emphasis was also placed on OEM operations. Cost reductions by the procurement of materials and use of production functions within the group contributed to an improvement of earnings.
Meanwhile, Omikenshi Co., Ltd. and Nitto Boseki Co., Ltd. struggled through the fiscal year. Omikenshi’s Brazilian subsidiary had ordinary losses exceeding 200 million yen due to local economic turmoil. Nitto Boseki’s major interlining business was strongly affected by the slump in the apparel industry. Production and sales in China were also disappointing because of the shift of apparel manufacturing operations to ASEAN.

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