Sumitomo Riko hit by labour shortage, automotive slowdown

Tokyo – Sumitomo Riko has registered double-digit declines in profitability for the fiscal year ended 31 March, due in part to labour shortage in the US and automotive slowdown in South America.

The rubber products manufacturer posted a 27.1% year-on-year decline in business profit at Yen9.4 billion (€77 million), on 1.5% higher net sales at Yen470 billion.

Sales within the automotive products segment rose 1.2% to Yen398 billion, helped by strong sales in Japan, China and Thailand, the company former known as Tokai Rubber said 10 May.

Segment profitability was, however, down 20.4% at Yen7.8 billion, due to “labour shortage and higher raw material costs in the US.”

The business unit was also impacted by a “contracted” Argentinian automotive market, higher start-up costs for new products in Mexico and lower sales in Europe.

In the general industrial products division, profitability was down 48% year-on-year at Yen1.6 billion, on 3% higher sales of Yen71.5 billion.

Sales were particularly impacted by lower revenue from printer and railway parts, although high-pressure hoses saw a rise in demand.