MIRA INFORM REPORT

 

 

Report Date :

27.09.2012

 

IDENTIFICATION DETAILS

 

Name :

NAGASE & CO LTD

 

 

 

 

Registered Office :

1-1-17 Shinmachi Nishiku Osaka 550-8668

 

 

 

 

Country :

Japan

 

 

 

 

Financials (as on) :

31.03.2012

 

 

 

 

Date of Incorporation :

December 1917

 

 

 

 

Com. Reg. No.:

0100-01-036659 (Osaka-Nishiku)

 

 

 

 

Legal Form :

Limited Company

 

 

 

 

Line of Business :

Import, export, wholesale of chemicals

 

 

 

 

No. of Employees :

5,545

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Status :

Good

Payment Behaviour :

Regular

Litigation :

Clear

 

 

 

 

NOTES :

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

 

ECGC Country Risk Classification List – June 30th, 2012

 

Country Name

Previous Rating

(31.03.2011)

Current Rating

(30.06.2012)

Japan

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

JAPAN - ECONOMIC OVERVIEW

 

In the years following World War II, government-industry cooperation, a strong work ethic, mastery of high technology, and a comparatively small defense allocation (1% of GDP) helped Japan develop a technologically advanced economy. Two notable characteristics of the post-war economy were the close interlocking structures of manufacturers, suppliers, and distributors, known as keiretsu, and the guarantee of lifetime employment for a substantial portion of the urban labor force. Both features are now eroding under the dual pressures of global competition and domestic demographic change. Japan's industrial sector is heavily dependent on imported raw materials and fuels. A tiny agricultural sector is highly subsidized and protected, with crop yields among the highest in the world. Usually self-sufficient in rice, Japan imports about 60% of its food on a caloric basis. Japan maintains one of the world's largest fishing fleets and accounts for nearly 15% of the global catch. For three decades, overall real economic growth had been spectacular - a 10% average in the 1960s, a 5% average in the 1970s, and a 4% average in the 1980s. Growth slowed markedly in the 1990s, averaging just 1.7%, largely because of the after effects of inefficient investment and an asset price bubble in the late 1980s that required a protracted period of time for firms to reduce excess debt, capital, and labor. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, Japan in 2011 stood as the fourth-largest economy in the world after second-place China, which surpassed Japan in 2001, and third-place India, which edged out Japan in 2011. A sharp downturn in business investment and global demand for Japan's exports in late 2008 pushed Japan further into recession. Government stimulus spending helped the economy recover in late 2009 and 2010, but the economy contracted again in 2011 as the massive 9.0 magnitude earthquake in March disrupted manufacturing. Electricity supplies remain tight because Japan has temporarily shut down almost all of its nuclear power plants after the Fukushima Daiichi nuclear reactors were crippled by the earthquake and resulting tsunami. Estimates of the direct costs of the damage - rebuilding homes, factories, and infrastructure - range from $235 billion to $310 billion, and GDP declined almost 0.5% in 2011. Prime Minister Yoshihiko NODA has proposed opening the agricultural and services sectors to greater foreign competition and boosting exports through membership in the US-led Trans-Pacific Partnership trade talks and by pursuing free-trade agreements with the EU and others, but debate continues on restructuring the economy and reining in Japan's huge government debt, which exceeds 200% of GDP. Persistent deflation, reliance on exports to drive growth, and an aging and shrinking population are other major long-term challenges for the economy.

Source : CIA

Company name and address

 

NAGASE & CO LTD

REGD NAME:    Nagase Sangyo KK

MAIN OFFICE:  1-1-17 Shinmachi Nishiku Osaka 550-8668 JAPAN

Tel: 06-6535-2114     Fax: 06-6535-2160

 

                        *.. The ead Office

 

URL:                 http://www.nagase.co.jp/

E-Mail address: info@nagase.co.jp

 

 

ACTIVITIES

           

Import, export, wholesale of chemicals

 

BRANCHES

 

Tokyo, Nagoya, Fukuoka, Hiroshima, Takamatsu, other

 

OVERSEAS

 

USA (7), Canada, UK, Germany (2), Hungary, Poland, China (10), Taiwan, Korea (2), Thailand (2), Malaysia (3), Singapore (3), Vietnam (3), India, Indonesia, UAE, Mexico (3), Brazil, other

 

 

CHIEF EXEC

 

HIROSHI NAGASE, PRES & CEO

 

Yen Amount:     In million Yen, unless otherwise stated

 

 

SUMMARY    

 

FINANCES        FAIR                 A/SALES          Yen 631,854 M

PAYMENTS      REGULAR         CAPITAL           Yen 9,699 M

TREND SLOW              WORTH            Yen 212,744 M

STARTED         1917                 EMPLOYES      5,545

 

COMMENT    

 

TOP-RANKED TRADING HOUSE SPECIALIZING IN INDUSTIRAL CHEMICALS.               

FINANCIAL SITUATION CONSIDERED FAIR AND GOOD FOR BUSINESS ENGAGEMENTS.

 

 

                        Notes: Unit: In Million Yen

Forecast (or estimated) figures for 31/03/2013 fiscal term

 

 

HIGHLIGHTS

 

The subject company is a top-ranked trading house specializing in industrial chemicals, founded originally in 1832 by a certain Nagase as a dyestuff merchant in Kyoto.  In 1900, established business ties with Bassel Chemical of Switz (now Chiba Specialty Chemicals) and since diversified into various other industrial chemicals.  Excels in dyestuffs, synthetic resins, etc.  Actively engaged in new technological sector such as pharmaceuticals raw materials, specialty resins, biotechnology, electronics and other new materials.  In Oct 2003 the firm set up JV’s in Taiwan and China for offering CAD auto-parts design services, following the one set up in USA.   The firm is reported purchased Pac Tec GmbH, a German producer of semiconductor mfg equipment.  Nagase is taking steps to expand its business in latter-stage semiconductor mfg and is planning to use Pac Tech’s technologies to gain ground in supplying equipment and materials.  Since 2000, the firm has served as agent for Pac Tech, selling the firm’s equipment and licensing technology in Japan.  Aggressive in investment, including M&A activities, in electronics, automobile and healthcare areas.  In July 2007, started lab center for materials and additive agents.  Business in India and Vietnam continues expanding.  The firm will set up some new production lines in the sites in Harima and Fukuchiyama plants to boost production of electronic resins & bio-related materials.  It will also establish a JV for production of resins for paint and adhesive agents in China.  The firm will enter the Brazilian market and sell additives needed for production of plant-based resin, aiming to meet the rising demand in the country.  The company will shift overseas sales to its own Nagase sales network, away from reliance on sales agents.  It will increase staff and make door-to-door sales visits even to end customers, aiming at a two-fold growth in overseas sales to Yen 6 billion in three years. 

 

 

FINANCIAL INFORMATION

 

            The sales volume for Mar/2012 fiscal term amounted to Yen 631,854 million, a 4.3% down from Yen 660,213 million in the previous term.  Synthetic resins and chemicals sales were hit by the Earthquake, and electronic products for semiconductors and LCD makers fell below the expectations.  Sales declined in all segments.  By Divisions, Chemicals down 6.8% to Yen 251,940 million; Plastics down 1.3% to Yen 219,200 million; Electronics down 5.2% to Yen 110,510 million; Life Science down 2.1% to Yen 49,170 million.  The recurring profit was posted at Yen 15,690 million and the net profit at Yen 8,570 million, respectively, compared with Yen 20,625 million recurring profit and Yen 12,823 million net profit, respectively, a year ago.

 

            (Apr/Jun/2012 results): Sales Yen 166,722 million (up 8.0%), operating profit Yen 4,128 million (down 1.6%), recurring profit Yen 4,657 million (down 13.1%), net profit Yen 3,409 million (up 6.8%).  (% compared with the corresponding period a year ago).

 

For the current term ending Mar 2013 the recurring profit is projected at Yen 20,500 million and the net profit at Yen 15,500 million, respectively, on a 10.8% rise in turnover, to Yen 700,000 million.  The conversion of Hayashibara Co to a subsidiary after its rehabilitation will add Yen 27.3 billion to sales and Yen 3 billion to operating profit.  In existing business, automobile-use synthetic resins will recover, sales for thermal paper will grow, and deficit on color forms will contract.  Net profit will hit a new-high, thanks to tax cuts stemming from Hayashibara’s carryover deficits.

 

The financial situation is considered FAIR and good for ORDINARY business engagements. 

 

 

REGISTRATION

 

Date Registered:     Dec 1917

Regd No.:          0100-01-036659 (Osaka-Nishiku)

Legal Status:   Limited Company (Kabushiki Kaisha)

Authorized:      346,980,000 shares

Issued:             138,408,285 shares

Sum:                 Yen 9,699 million

 

Major shareholders (%): Northern Trust (AVFC) American (7.4) Company’s Treasury Stock (7.1), Master Trust Bank of Japan T (5.5), Sumitomo Mitsui Trust Bank (4.1), Japan Trustee Services T (3.9), Nippon Life Ins (3.2), SMBC (3.1), Hiroshi Nagase (2.9), Northern Trust (AVFC) Re US Tax EP (2.5), Reiko Nagase (2.5); foreign owners (22.7)

 

No. of shareholders: 5,450

 

Listed on the S/Exchange (s) of: Tokyo, Osaka

 

Managements: Hiroshi Nagase, pres & CEO; Makoto Tsuruoka, s/mgn dir; Reiji Nagase, s/mgn dir; Kazuo Nagashima, mgn dir; Kan’ichi Matsuki, mgn dir; Toshiro Yamaguchi, mgn dir; Hiroshi Hanamoto, dir; Osamu Morishita, dir;

 

Nothing detrimental is known as to the commercial morality of executives.

 

Related companies: Nagase Chemtex, Totaku Ind, Hoei Sangyo, Nagase Logistics, other

 

 

OPERATION

 

Activities: Specialized trading house for import, export, wholesale of industrial Chemicals:

          

(Sales breakdown by divisions): dyestuffs, pigments, other industrial chemicals (40%), synthetic resins (34%), electronic materials & equipment (17%), health-care products, foodstuffs (8%), others (1%). 

(Overseas sales ratio (42%)

 

(Products handled by Divisions):

Colors & Imaging Division: dyestuffs, dyeing auxiliaries, finishing agents, textile processing resins, adhesives for textiles, pigments, pigment dispersing agents, plastic additives, UV cured resins, toner resins, silicones, dyes & related chemicals for imaging & recording, chemicals for paper mfg, additives for paints & inks;

Performance Chemicals Division: plastic materials, plastics & pigments solvents, additives for paints & inks, urethane materials, flame retardants, plastic additives, plasticizers, polymer fibers;

Specialty Chemicals Division: petrochemical products, raw materials for household products, cosmetic ingredients, surfactants & surfactant raw materials, Fluor chemicals, materials for silicones, daily goods, China & process chemicals;

Advanced Polymer Division: functional resins, general-purpose resins, auxiliaries, plastic products, plastic-related equipment, devices & dies;

Automotive Solutions Division: general-purpose resins, functional resins, auxiliaries, plastic products, plastic-related equipment, devices & dies, software engineering facility equipment;

Polymer Products Division: resin materials, film sheet products, molded plastic products, construction products;

Electronic Chemicals Division: photo resist developer production equipment, chemical management equipment for liquid crystal preprocessing, chemicals for production of semiconductors & liquid crystals, formulated epoxy resins & related products;

Electronic Materials Division: liquid crystal displays, material & mfg devices & optical films for LCDs and organic light-emitting diodes (LEDs), processed aluminum products, processed glass products;

Fine Chemicals Division: pharmaceuticals, intermediates in vitro diagnostics, hard disk-related materials, other;

Beauty-Care Products Division: cosmetics, skin counseling, health foods, facial services, other.

 

Clients: [Chemical mfrs, wholesalers] Sharp Corp, Sekisui Chemical, Nippon Paint, DIC, Sumitomo Chemical, Mitsubishi Motors, Otsuka Pharmaceutical, Shinto Paint, Toshiba Mobile Display, Fujitsu Ltd, Toshiba Matsushita Display Technology, Kansai Paint, Mitsubishi Electric Trading, Kasai Kogyo, Teijin DuPont Film, other.

No. of accounts: 2,000

Domestic areas of activities: Nationwide

Suppliers: [Mfrs, wholesalers] Sumitomo Chemical Ind, Daicel Chemical Ind, Nippon

Shokubai, Mitsubishi Chemical, Tottori Sanyo Electric, Sharp Corp, BASF Japan, Asahi Kasei Chemicals, Mitsui Chemical Poly-Urethane Co, other.

 

Payment record: Regular

 

Location: Business area in Osaka.  Office premises at the caption address are leased and maintained satisfactorily.

 

Bank References:

SMBC (H/O)

Mizuho Corporate Bank (Ohtemachi)

Relations: Satisfactory

 

 

FINANCES

 (In Million Yen)

 

FINANCES: (Consolidated in million yen)

 

　

　

Terms Ending:

31/03/2012

31/03/2011

INCOME STATEMENT

 

 

 

  Annual Sales

　

631,854

660,213

 

  Cost of Sales

560,226

587,204

 

      GROSS PROFIT

71,628

73,008

 

  Selling & Adm Costs

58,200

54,276

 

      OPERATING PROFIT

13,427

18,732

 

  Non-Operating P/L

2,263

1,893

 

      RECURRING PROFIT

15,690

20,625

　

      NET PROFIT

8,570

12,823

BALANCE SHEET

 

 

 

 

  Cash

　

29,184

47,202

 

  Receivables

 

197,702

186,113

 

  Inventory

 

45,258

36,714

 

  Securities, Marketable

　

　

 

  Other Current Assets

10,136

7,275

 

      TOTAL CURRENT ASSETS

282,280

277,304

 

  Property & Equipment

56,727

39,916

 

  Intangibles

 

57,454

3,674

 

  Investments, Other Fixed Assets

54,381

54,442

 

      TOTAL ASSETS

450,842

375,336

 

  Payables

 

109,163

101,679

 

  Short-Term Bank Loans

38,633

15,525

 

　

 

　

　

 

  Other Current Liabs

33,893

21,313

 

      TOTAL CURRENT LIABS

181,689

138,517

 

  Debentures

 

　

　

 

  Long-Term Bank Loans

38,200

10,555

 

  Reserve for Retirement Allw

10,032

7,295

 

  Other Debts

　

8,176

9,653

 

      TOTAL LIABILITIES

238,097

166,020

 

      MINORITY INTERESTS

 

 

 

Common stock

9,699

9,699

 

Additional paid-in capital

10,041

10,041

 

Retained earnings

186,907

181,665

 

Evaluation p/l on investments/securities

12,731

13,188

 

Others

 

(1,174)

183

 

Treasury stock, at cost

(5,460)

(5,460)

 

      TOTAL S/HOLDERS` EQUITY

212,744

209,316

　

      TOTAL EQUITIES

450,742

375,336

CONSOLIDATED CASH FLOWS

 

 

 

 

Terms ending:

31/03/2012

31/03/2011

 

Cash Flows from Operating Activities

　

5,690

10,997

 

Cash Flows from Investment Activities

-81,066

-9,147

 

Cash Flows from Financing Activities

56,961

3,564

　

Cash, Bank Deposits at the Term End

　

28,517

47,202

ANALYTICAL RATIOS            Terms ending:

31/03/2012

31/03/2011

 

 

Net Worth (S/Holders' Equity)

212,744

209,316

 

 

Current Ratio (%)

155.36

200.19

 

 

Net Worth Ratio (%)

47.20

55.77

 

 

Recurring Profit Ratio (%)

2.48

3.12

 

 

Net Profit Ratio (%)

1.36

1.94

 

 

Return On Equity (%)

4.03

6.13

 

 

           


 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.53.58

UK Pound

1

Rs.86.60

Euro

1

Rs.68.94

 

 

INFORMATION DETAILS

 

Report Prepared by :

PRL

 

 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

--

NB

New Business

 

--

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                 Payment record (10%)

Credit history (10%)                    Market trend (10%)                                Operational size (10%)

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.