Denka elastomers business 'set to return to growth'

Tokyo – Denka Corp. expects its elastomers & infrastructure operations to return to profit this year, with sales of chloroprene rubber on the rise.

In its 2022 integrated report published 30 Sept, the Japanese supplier said synthetic rubber sales exceeded the prior year’s levels due to “an overall increase in demand for industrial and automotive applications,” amid a global economic recovery.

Overall, the business, which includes the production of chloroprene synthertic rubber and cement products, is set to report an operating income of Yen2.5 billion (€18 million), up from losses of Yen3.5 billion reported in 2021 and 2020. The figure will still be lower than the 2019 income of Yen3.9 billion.

Despite the higher sales volumes trend, Denka said, US subsidiary Denka Performance Elastomers (DPE) has been affected by the upstream supply chain disruption caused by Hurricane Ida in 2021.

Denka was forced to temporarily suspend production at its LaPlace, Louisiana plant last summer as the category 4 hurricane made a landfall in September.

Another headwind, Denka said, was rising prices for raw materials during the 2022 financial year.

Despite that, however, the Japanese supplier expects to increase year-on-year profit due to “flexible price hikes” and the elimination of the negative impact of 2021’s natural disaster at DPE.