Surging costs hit earnings at Japanese rubber major

Tokyo – Fukoku Co. Ltd has reported a 66.6% year-on-year decline in operating profit, to Yen447 million €3.2 million, on first quarter consolidated net sales 2.2% higher at Yen19,389 million.

The Japanese rubber company linked the earnings decline to the impact of increases in raw material costs, transportation costs, and fuel costs over the three months to 30 June.

At the group’s Functional Parts business net sales decreased year-on-year by 10.1% to Yen7,893 million due to the impact of microchip shortages on automotive production. Income fell 41.2% year-on-year to Yen744 million on rising raw materials and transportation costs.

Fukoku’s Anti-Vibration Parts business posted a 13.7% year-on-year decline in net sales to Yen8,080 million despite “steady orders” for construction machinery. Segment income decreased 44.9% year-on-year to Yen278 million due to “surging” materials costs.

At the group’s Hose business, net sales increased 3.3% year-on-year to Yen1,239 million but raw material hikes pushed income down 62.7% to Yen34 million.

Focused mainly on rubber raw materials Fukoku specialises in rubber raw material compounding, bonding, surface modification, and moulding technologies.

Fukoku claims to be the world’s largest producer, by volume, of wiper blade rubbers used in automotive vehicle - 200 million units/year – train, ship and aircraft applications.

The company also claims high global shares in products such as viscous mounts for hydraulic excavators, valves for evaporation-purge devices and wire saw rollers for silicon wafer production.