Japan's Kuraray Co Ltd reported a 42 percent plunge in first-half operating profit as its rubber and speciality chemicals business grappled with weakened European demand and inventory valuation losses, prompting the company to slash its full-year earnings forecast.

The Okayama-based manufacturer, known for its synthetic rubber and speciality polymers used in automotive and industrial applications, posted operating income of 26.3 billion yen for the six months ended June 30, down from 45.5 billion yen a year earlier.

Net sales slipped 2.7 percent to 400.0 billion yen, with the company's flagship vinyl acetate segment - which includes rubber-related products - bearing the brunt of the downturn as volumes declined across key markets.

"Sales volume did not increase as much as expected due to the European economic stagnation and other factors, and overall segment income decreased due to the negative impact of inventory valuation differences and higher raw material and fuel prices," the company said in its earnings statement.

The vinyl acetate division, Kuraray's largest revenue contributor, saw operating income tumble 31.9 percent to 29.9 billion yen despite maintaining sales of 202.9 billion yen. The segment includes the company's EVAL barrier resins used in food packaging and automotive fuel tanks, as well as polyvinyl alcohol (PVOH) resins with rubber-like properties for industrial applications.

Kuraray's isoprene chemicals and elastomers business, which produces synthetic rubber compounds, showed signs of recovery with operating losses narrowing to 1.3 billion yen from 4.0 billion yen a year earlier. Sales volumes increased as demand remained firm, particularly in Europe and the United States, whilst operations at the company's Thai manufacturing base stabilised.

However, the broader economic malaise weighed heavily on performance. Rising natural gas costs in the US and Europe - key raw materials for rubber production - further squeezed margins. US natural gas prices averaged USD 3.69 per MMBtu compared with USD 2.21 a year earlier, whilst European gas costs climbed to 41 euros per MWh from 30 euros.

The disappointing first-half results prompted Kuraray to revise down its full-year operating income forecast to 75.0 billion yen from an earlier projection of 90.0 billion yen, though it maintained its annual dividend at 54 yen per share.

Chief Financial Officer Hitoshi Kawamura highlighted inventory valuation differences as a significant drag on earnings, particularly affecting the company's rubber and polymer segments, where raw material price volatility has been pronounced.

Looking ahead, Kuraray expects second-half performance to improve, with operating income projected at 48.7 billion yen compared with 26.3 billion yen in the first half. The company is banking on a gradual recovery in European demand and the benefits of recent capacity optimisations.

The firm is also pursuing strategic shifts in its portfolio, including plans to expand its optical-use PVOH film production line and the acquisition of US-based Nelumbo Inc, whilst discontinuing production of certain acrylic polymers and polyester-related products.

Comments (0)

ADD COMMENT

Link Copied!

Scandinavian Enviro Systems AB publ has signed a letter of intent with an undisclosed partner to explore the possibility of licensing its advanced tyre pyrolysis technology for deployment in North America.

The collaboration will focus on conducting a comprehensive feasibility study to evaluate the technical and commercial viability of establishing one or multiple facilities dedicated to processing end-of-life tyres using Enviro’s proprietary method. This study is designed to provide the potential licensee with the necessary insights to assess the prospects of entering into a long-term commercial arrangement and formal technology licensing agreement.

It is important to note that any definitive agreements will depend entirely on the study's outcomes and subsequent negotiations. At this stage, there is no guarantee that the evaluation will lead to binding commitments or that the proposed transaction will ultimately materialise.

Fredrik Aaben, CEO, Scandinavian Enviro Systems, said, “We continue to see strong international interest in Enviro’s technology, and this letter of intent is yet another proof of this.”

Comments (0)

ADD COMMENT

Link Copied!

Kraton Corporation, a leading global producer of speciality polymers and high-value bio-based chemicals derived from pine wood pulping co-products, a global price increase for all polymer products with effect from 1 April 2026. The price hike will range from USD 440 per MT to USD 700 per MT, or as individual contract terms permit, with the exact price change varying according to the polymer type and production location.

The driving forces behind these significant pricing actions are multifaceted, rooted in substantial disruptions to global supply chains. These disruptions are largely attributed to the ongoing conflict in the Middle East, which has had a cascading effect on logistics. Compounding this issue are the sharply rising costs associated with transportation and essential raw materials.

Comments (0)

ADD COMMENT

Link Copied!

German specialty chemicals company LANXESS has announced a global price increase for its portfolio of functional additives for the manufacture of tyres and speciality rubbers. These changes, which are set to take effect immediately or as soon as individual contract terms permit, will see prices rise by 15 to 50 percent.

The driving forces behind these significant pricing actions are multifaceted, rooted in substantial disruptions to global supply chains. These disruptions are largely attributed to the ongoing geopolitical conflict, which has had a cascading effect on logistics. Compounding this issue are the sharply rising costs associated with transportation and essential raw materials.

Comments (0)

ADD COMMENT

Link Copied!

Orion S.A., a global speciality chemicals company, has announced a global price increase for its portfolio of speciality carbon black. These changes, which are set to take effect immediately or as soon as individual contract terms permit, will see prices rise by up to 25 percent.

In a strategic move to address persistent market volatility, the company is also implementing a variable surcharge on top of the base price increase. The driving forces behind these significant pricing actions are multifaceted, rooted in substantial disruptions to global supply chains. These disruptions are largely attributed to the ongoing conflict in the Middle East, which has had a cascading effect on logistics. Compounding this issue are the sharply rising costs associated with transportation and essential raw materials.

Comments (0)

ADD COMMENT

Link Copied!