MIRA INFORM REPORT

 

 

Report No. :

345008

Report Date :

14.10.2015

 

IDENTIFICATION DETAILS

 

Name :            

SHIN-ETSU CHEMICAL CO LTD

 

 

Registered Office :

Asahi Tokai Bldg, 2-6-1 Ohtemachi Chiyodaku Tokyo 100-0004

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2015

 

 

Date of Incorporation :

September 1926

 

 

Com. Reg. No.:

0100-01-008680

 

 

Legal Form :

Limited Company

 

 

Line of Business :

Manufacturing of PVC, semiconductor wafers, silicon

 

 

No. of Employees :

18,291

 

 

RATING & COMMENTS

 

MIRA’s Rating :

A

 

RATING

STATUS

PROPOSED CREDIT LINE

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

 

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 – March 31, 2015

 

Country Name

Previous Rating

(31.12.2014)

Current Rating

(31.03.2015)

Japan

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low Risk

 

A2

Moderate Low Risk

 

B1

Moderate Risk

B2

Moderate High Risk

 

C1

High Risk

C2

Very High Risk

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 an 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. Scarce in many natural resources, Japan has long been dependent on imported raw materials. Since the complete shutdown of Japan’s nuclear reactors after the earthquake and tsunami disaster in 2011, Japan's industrial sector has become even more dependent than it was previously on imported fossil fuels. A small agricultural sector is highly subsidized and protected, with crop yields among the highest in the world. While self-sufficient in rice production, Japan imports about 60% of its food on a caloric basis. For three decades, overall real economic growth had been impressive - 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 aftereffects 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. Modest economic growth continued after 2000, but the economy has fallen into recession four times since 2008. 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 and the ensuing tsunami in March of that year disrupted manufacturing. The economy has largely recovered in the four years since the disaster, although reconstruction in the affected Tohoku region has lagged, in part due to a shortage of labor in the construction sector. Japan enjoyed a sharp uptick in growth in 2013 on the basis of Prime Minister Shinzo Abe’s “Three Arrows” economic revitalization agenda - dubbed “Abenomics” - of monetary easing, “flexible” fiscal policy, and structural reform. Abe’s government has replaced the preceding administration’s plan to phase out nuclear power with a new policy of seeking to restart nuclear power plants that meet strict new safety standards, and emphasizing nuclear energy’s importance as a base-load electricity source. Japan joined the Trans-Pacific Partnership (TPP) negotiations in 2013, a pact that would open Japan's economy to increased foreign competition and create new export opportunities for Japanese businesses. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, Japan in 2014 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 2012. While seeking to stimulate and reform the economy, the government must also devise a strategy for reining in Japan's huge government debt, which amounts to more than 230% of GDP. To help raise government revenue, Japan adopted legislation in 2012 to gradually raise the consumption tax rate to 10% by 2015, beginning with a hike from 5% to 8% implemented in April 2014. That increase had a contractionary effect on GDP, however, so PM Abe in late 2014 decided to postpone the final phase of the increase until April 2017 to give the economy more time to recover. Led by the Bank of Japan’s aggressive monetary easing, Japan is making progress in ending deflation, but demographics - low birthrate and an aging, shrinking population - pose major long-term challenges for the economy.

 

Source : CIA

Company name

 

SHIN-ETSU CHEMICAL CO LTD

 

 

REGD NAME

 

Shin Etsu Kagaku Kogyo KK

 

 

MAIN OFFICE

 

Asahi Tokai Bldg, 2-6-1 Ohtemachi Chiyodaku Tokyo 100-0004 JAPAN

Tel: 03-3246-5011     Fax: 03-3246-5358

 

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

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

 

 

ACTIVITIES  

 

Mfg of PVC, semiconductor wafers, silicon

 

 

BRANCHES   

 

Osaka, Nagoya, Fukuoka, Sapporo, Gunma

 

 

FACTORIES  

 

Naoetsu, Takefu, Gunma (Isobe, Matsuida), Kashima

 

 

OVERSEAS   

 

USA (9), Mexico, Portugal, UK, Netherlands (4), Hungary, Germany, Malaysia (5), Korea (2), China (4), Taiwan

(4), Singapore (2), Indonesia (2), Thailand (2), Philippines, Australia (2) (--subsidiaries)

 

 

CHIEF EXEC

 

SHUNZO MORI, PRES & CEO

 

Yen Amount:     In million Yen, unless otherwise stated

 

 

SUMMARY    

 

FINANCES        FAIR                 A/SALES          Yen 1,254,543 M

      PAYMENTSREGULAR         CAPITAL           Yen 119,419 M

TREND UP                    WORTH            Yen 2,012,711 M

STARTED         1926                 EMPLOYES      18,291

 

 

COMMENT    

 

MFR SPECIALIZING IN PVC & ELECTRONIC MATERIALS. 

FINANCIAL SITUATION CONSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

                       

Notes: Unit: In Million Yen

Forecast (or estimated) figures for 31/03/2016 fiscal term

 

 

HIGHLIGHTS

 

This is the world’s largest mfr of PVC, and semiconductor wafers. Originally maker of chemical fertilizers including carbide and calcium cyanide.  Major maker of silicone resins.  Succeeded in shift of mainline, and expanded to electronic materials, including rare earths and synthetic quarts.         

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2015 fiscal term amounted to Yen 1,255,543 million, a 7.7% up from Yen 1,165,819 million in the previous term.  Sales of semiconductor silicone performed extremely favorably.  Demand for magnets was also robust.  The recurring profit was posted at Yen 198,025 million and the net profit at Yen 128,606 million, respectively, compared with Yen 180,605 million recurring profit and Yen 113,617 million net profit, respectively, a year ago..

 

For the current term ending Mar 2016 the recurring profit is projected at Yen 200,000 million and the net profit at Yen 130,000 million, respectively, on a 1.6% rise in turnover, to Yen 1,275,000 million.  Sales of polyvinyl chloride will start to become firmer, and sales of photoresists will continue growing on the strength of robust demand for use in semiconductors. 

 

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

 

 

REGISTRATION

 

Date Registered:                       Sept 1926

Regd No.:                     0100-01-008680 (Tokyo-Chiyodaku)

Legal Status:               Limited Company (Kabushiki Kaisha)

Authorized:                 1,720 million shares

Issued:                        432,106,693 shares

Sum:                            Yen 119,419 million

           

Major shareholders (%): Master Trust Bank of Japan, T (8.9), Japan Trustee Services Bank T (6.5), Nippon Life Ins (5.2), Hachijuni Bank (2.7), Japan Trustee Services t4 (2.6), Meiji Yasuda Life Ins (2.4), Company’s Treasury Stock (1.4), Sompo Japan Nipponkoa Ins (1.2), Bank of New York Mellon SANV 10 (1.2), State Street Bank West Treaty (1.1); foreign owners (42.4)

           

No. of shareholders: 44,576

 

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

 

Managements: Chihiro Kanagawa, ch; Shunzo Mori, pres & CEO; Fumio Akiya, v pres; Yasuhiko Saitoh, v pres; Toshinobu Ishihara, s/mgn dir; Norikazu Fukud, mgn dir; Akiji Takasugi, mgn dir; Masahiko Todorogi, mgn dir; Toshiya Akimoto, mgn dir; Fumiaki Arai, mgn dir; Yukihiro Matsui, mgn dir

 

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

 

Related companies: Shintech Inc (USA), Shin-Etsu Polymer, Shin-Etsu Handotai, other

 

 

OPERATION

 

Activities: Manufactures industrial chemicals:

 

(Sales Breakdown by Divisions):

 

Vinyl Chloride & Chemicals Div (37%): PVC, silicones, methanol, chloromethane, cellulose derivatives, caustic soda, silicon metal;

Silicones Div (13%): semiconductor silicone, organic materials for electronics industry, rare earth magnets for electronics industry, photo-resists;

 

Functional Materials Div (9%): synthetic quartz products, oxide single crystals, rare earths, rare earth magnets, construction of plants engineering, information processing, export of technology & plants, import of goods, others.

 

Semiconductor Silicones Div (18%);

 

Others (23%);

 

Overseas sales ratios (71%)

 

Clients: [Mfrs, wholesalers] Shin-Etsu Handotai (meaning semiconductor), Mitsubishi Corp, Shin-Etsu Electronics Materials Singapore, Mitsui & Co, Shin-Etsu Astech, Toshiba Corp, other.

No. of accounts: 2,000

Domestic areas of activities: Nationwide

 

Suppliers: [Mfrs, wholesalers] Shin-Etsu Handotai, Naoetsu Electronics, Mitsui & Co, Kashima PVC Monomer, Mitsubishi Chemical, Shintech Inc, other.

 

Payment record: Regular

 

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

 

Bank References:

 

MUFG (H/O)

Mizuho Bank (H/O)

Relations: Satisfactory

 

 

FINANCES (In Million Yen)

 

FINANCES: (Consolidated in million yen)

　

　

　

Terms Ending:

31/03/2015

31/03/2014

INCOME STATEMENT

　

　

  Annual Sales

　

1,255,543

1,165,819

　

  Cost of Sales

940,399

873,879

　

      GROSS PROFIT

315,143

291,939

　

  Selling & Adm Costs

129,814

118,130

　

      OPERATING PROFIT

185,329

173,809

　

  Non-Operating P/L

14,696

6,796

　

      RECURRING PROFIT

198,025

180,605

　

      NET PROFIT

128,606

113,617

BALANCE SHEET

　

　

  Cash

　

461,489

363,339

　

  Receivables

292,748

267,243

　

  Inventory

276,910

273,136

　

  Securities, Marketable

304,180

274,282

　

  Other Current Assets

64,519

57,829

　

      TOTAL CURRENT ASSETS

1,399,846

1,235,829

　

  Property & Equipment

784,409

720,799

　

  Intangibles

18,012

19,408

　

  Investments, Other Fixed Assets

250,039

222,876

　

      TOTAL ASSETS

2,452,306

2,198,912

　

  Payables

120,694

109,401

　

  Short-Term Bank Loans

6,825

7,524

　

　

　

　

　

  Other Current Liabs

171,327

137,236

　

      TOTAL CURRENT LIABS

298,846

254,161

　

  Debentures

　

　

　

  Long-Term Bank Loans

7,116

7,557

　

  Reserve for Retirement Allw

33,401

28,127

　

  Other Debts

　

100,231

86,931

　

      TOTAL LIABILITIES

439,594

376,776

　

      MINORITY INTERESTS

　

　

Common stock

119,419

119,419

　

Additional paid-in capital

128,572

128,625

　

Retained earnings

1,626,873

1,541,127

　

Evaluation p/l on investments/securities

22,349

10,439

　

Others

149,335

57,479

　

Treasury stock, at cost

(33,837)

(34,954)

　

      TOTAL S/HOLDERS` EQUITY

2,012,711

1,822,135

　

      TOTAL EQUITIES

2,452,306

2,198,912

CONSOLIDATED CASH FLOWS

　

　

Terms ending:

31/03/2015

31/03/2014

　

Cash Flows from Operating Activities

　

243,459

259,734

　

Cash Flows from Investment Activities

-167,142

-246,894

　

Cash Flows from Financing Activities

-43,545

-41,361

　

Cash, Bank Deposits at the Term End

　

423,846

362,560

ANALYTICAL RATIOS            Terms ending:

31/03/2015

31/03/2014

　

Net Worth (S/Holders' Equity)

2,012,711

1,822,135

　

Current Ratio (%)

468.42

486.24

　

Net Worth Ratio (%)

82.07

82.87

　

Recurring Profit Ratio (%)

15.77

15.49

　

Net Profit Ratio (%)

10.24

9.75

　

　

Return On Equity (%)

6.39

6.24

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs. 65.02

UK Pound

1

Rs. 99.89

Euro

1

Rs. 73.92

 

INFORMATION DETAILS

 

Analysis Done by :

DIV

 

 

Report Prepared by :

ANK

 

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.