MIRA INFORM REPORT

 

 

Report No. :

343285

Report Date :

30.09.2015

 

IDENTIFICATION DETAILS

 

Name :

DENKI KAGAKU KOGYO KK

 

 

Registered Office :

Nihombashi Mitsui Tower 2-1-1 Nihombashi-Muromachi Chuoku Tokyo 103-8338

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2015 (Consolidated)

 

 

Date of Incorporation :

May 1915

 

 

Com. Reg. No.:

0100-01-008757 (Tokyo-Chuoku)

 

 

Legal Form :

Limited Company (Kabushiki Kaisha)

 

 

Line of Business :

Manufactures industrial chemicals: elastomers & performance plastics (43%), infrastructure & inorganic chemicals (12%), electronics & innovative products, life science & environment products, others (45%)

 

 

No. of Employees :

5,309

 

 

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

 

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 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 first-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

 

DENKI KAGAKU KOGYO KK

 

 

REGD NAME

 

Denki Kagaku Kogyo KK

 

 

MAIN OFFICE

 

Nihombashi Mitsui Tower 2-1-1 Nihombashi-Muromachi Chuoku Tokyo 103-8338

JAPAN

Tel: 03-5290-5055     Fax: 03-5290-5059     -

 

 

URL

 

http://www.denka.co.jp

E-Mail address: (thru the URL)

 

 

ACTIVITIES

 

Mfg of chemicals (plastics, elastomer)

 

 

BRANCHES

 

Osaka, Nagoya, Sapporo, Sendai, Omuta, Isehara, other (Tot 14)

 

 

OVERSEAS

 

Germany, China (16), Hong Kong, Taiwan, Singapore (6), and Vietnam

 

 

FACTORIES

 

Isezaki, Hokkaido, Gunma, Chiba, Omuta, Nagano, Ofuna, other (Tot 8)

CHIEF EXEC

 

SHINSUKE YOSHITAKA, PRES

 

Yen Amount:     In million Yen, unless otherwise stated

 

 

SUMMARY

 

FINANCES        FAIR                             A/SALES          Yen 383,978 M

PAYMENTSREGULAR               CAPITAL           Yen 36,998 M

TREND UP                                WORTH            Yen 210,798 M

STARTED         1915                             EMPLOYES      5,309

 

 

COMMENT

 

MFR OF INDUSTRIAL CHEMICALS 

FINANCIAL SITUATION COSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

                       

Unit: In Million Yen

Forecast figures for the 31/03/2016 fiscal term.

 

 

HIGHLIGHTS

 

This is the leading second-tier comprehensive chemical mfr.  Founded as carbide maker by Mitsui Group entrepreneurs in 1915, and now top-ranked player in carbide business.  Diversified into cement and petrochemicals.  Strong in transparent resins and electronic materials including fused silica. 

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2015 fiscal term amounted to Yen 383,978 million, a 1.9% up from Yen 376,809 million in the previous term.  Sales of electrical materials, including semiconductor carrier tape & fluorescent substances rose. The weaker Yen contributed to chloroprene sales, and helped offset deteriorating market conditions.  The recurring profit was posted at Yen 24,287 million and the net profit at Yen 19,021 million, respectively, compared with Yen 20,604 million recurring profit and Yen 13,573 million net profit, respectively, a year ago.

 

(Apr/Jun/2015 results): Sales Yen 86,929 million (up 0.1%), operating profit Yen 5,940 million (up 105.5%), recurring profit Yen 5,826 million (up 120.8%), net profit Yen 4.366 million (up 115.6%).  (% as compared with the corresponding period a year ago).

 

For the current term ending Mar 2016 the recurring profit is projected at Yen 27,000 million and the net profit at Yen 19,000 million, respectively, on a 1.6% rise in turnover, to Yen 390,000 million. 

 

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

 

 

REGISTRATION

           

Date Registered:　                May 1915

Regd No.:                                 0100-01-008757 (Tokyo-Chuoku)

Legal Status:                Limited Company (Kabushiki Kaisha

Authorized:                              1,584,070,000 shares

Issued:                         481,883,837 shares

Sum:                            Yen 36,998 million

 

Major shareholders (%): Master Trust Bank of Japan T (6.1), Japan Trustee Services T (4.9), TCSB (Mizuho Bank) (3.4), Zenkyoren (3.4), Mitsui Life Ins (2.5), State Street Bank & Trust 505223 (2.1), Juniper (2.0), State Street Bank & Trust 505001 (2.0), Company’s Treasury Stock (1.7), Mitsui Sumitomo Ins (1.4); foreign owners (32.7)

 

No. of shareholders: 26,088

 

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

 

Managements: Shinsuke Yoshitaka, pres; Mitsukuni Ayabe, s/mgn dir; Toshiharu Kano, s/mgn dir; Hideyuki Udagawa, mgn dir; Manabu Yamamoto, mgn dir; Norihiro Shimizu, mgn dir; Sanshiro Matsushita, mgn dir; Kenji Nakano, mgn dir; Masaharu Suzuki, mgn dir

 

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

 

Related companies: Akros Trading, Denka Chemicals Shanghai, Denka Seiken, Denka    Singapore, other.

 

 

OPERATION

           

Activities: Manufactures industrial chemicals: elastomers & performance plastics (43%), infrastructure & inorganic chemicals (12%), electronics & innovative products, life science & environment products, others (45%)

Overseas Sales Ratio (36%)

           

Clients: [Mfrs, wholesalers] Akros Trading, Toyo Styrene, Mitsui Bussan Plastics, YK Inoas, Chugai Pharmaceutical, Maruzen Petrochemical, Sekisui Plastics, Tokai Toyo Aluminium Hanbai, other

No. of accounts: 1,000

Domestic areas of activities: Nationwide

Suppliers: [Mfrs, wholesalers] Maruzen Petrochemical, Toyo Styrene, Chiba Styrene Monomer, Mitsubishi Corp, Showa Denko, Toso Co, Mitsui Chemical, Asahi Kasei, other

 

Payment record: Regular

 

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

 

Bank References:

                        Mizuho Bank (Uchisaiwaicho)

                        SMBC (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

　

383,978

376,809

　

  Cost of Sales

302,381

299,671

　

      GROSS PROFIT

81,596

77,138

　

  Selling & Adm Costs

57,549

55,908

　

      OPERATING PROFIT

24,047

21,230

　

  Non-Operating P/L

240

-626

　

      RECURRING PROFIT

24,287

20,604

　

      NET PROFIT

19,021

13,573

BALANCE SHEET

　

　

  Cash

　

9,219

8,427

　

  Receivables

83,172

83,701

　

  Inventory

64,515

62,815

　

  Securities, Marketable

　

　

　

  Other Current Assets

13,591

9,804

　

      TOTAL CURRENT ASSETS

170,497

164,747

　

  Property & Equipment

211,864

211,783

　

  Intangibles

1,509

1,299

　

  Investments, Other Fixed Assets

61,699

53,518

　

      TOTAL ASSETS

445,569

431,347

　

  Payables

47,401

54,238

　

  Short-Term Bank Loans

47,456

45,501

　

　

　

　

　

  Other Current Liabs

65,244

63,906

　

      TOTAL CURRENT LIABS

160,101

163,645

　

  Debentures

30,000

25,000

　

  Long-Term Bank Loans

23,509

30,663

　

  Reserve for Retirement Allw

5,262

8,531

　

  Other Debts

　

15,899

13,992

　

      TOTAL LIABILITIES

234,771

241,831

　

      MINORITY INTERESTS

　

　

Common stock

36,998

36,998

　

Additional paid-in capital

49,284

49,284

　

Retained earnings

99,080

89,562

　

Evaluation p/l on investments/securities

13,231

8,640

　

Others

14,846

9,983

　

Treasury stock, at cost

(2,641)

(4,951)

　

      TOTAL S/HOLDERS` EQUITY

210,798

189,516

　

      TOTAL EQUITIES

445,569

431,347

CONSOLIDATED CASH FLOWS

　

　

Terms ending:

31/03/2015

31/03/2014

　

Cash Flows from Operating Activities

　

35,557

27,245

　

Cash Flows from Investment Activities

-27,449

-28,693

　

Cash Flows from Financing Activities

-7,437

-3,327

　

Cash, Bank Deposits at the Term End

　

9,157

8,244

ANALYTICAL RATIOS            Terms ending:

31/03/2015

31/03/2014

　

Net Worth (S/Holders' Equity)

210,798

189,516

　

Current Ratio (%)

106.49

100.67

　

Net Worth Ratio (%)

47.31

43.94

　

Recurring Profit Ratio (%)

6.33

5.47

　

Net Profit Ratio (%)

4.95

3.60

　

　

Return On Equity (%)

9.02

7.16

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.66.18

UK Pound

1

Rs.100.46

Euro

1

Rs.74.61

 

INFORMATION DETAILS

 

Analysis Done by :

TRI

 

 

Report Prepared by :

VNT

 

               

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.