Japanese Firms Struggle To Profit

Abstract

Profits at major Japanese chemical companies were generally lower in the most recent fiscal year, which ended on March 31, compared with the year-ago period. Companies blame the drop in financial performance on the weakness in the world economy and the earthquake that struck Japan in March 2011. Nevertheless, most producers remained profitable. Alone among major Japanese chemical makers, Mitsui Chemicals, a producer of large-volume commodity chemicals, reported a small net loss of $12 million compared with a $301 million profit a year ago. Mitsui was hit by a $230 million reduction in its gross margins. Moreover, owing to a bleak long-term outlook, the company opted to write down the book value of its Japanese polyurethane production facilities by $140 million. Japan’s top chemical producer, Mitsubishi Chemical Holdings, reported a 58% drop in its net profit compared with a year ago. Higher than expected tax payments were largely responsible for ...