Teijin narrows loss for materials unit, but challenges persist

Tokyo – Teijin Ltd. has narrowed full-year operating losses at its materials division, which includes units producing aramid fibre, composites and resin materials.

The division reported a loss of Yen6.2 billion for the fiscal year ended 31 March, compared to a loss of Yen21 billion reported the year before.

Sales increased marginally to just under Yen440 billion, reflecting the positive impact of strong first-half demand for luxury car tires in Europe, Teijin reported 13 May.

However, it noted, sales of tire reinforcement aramids were affected by inventory adjustments in the supply-chain during the second half of the year.

Teijin linked the earnings gains to efficiency measures, stabilisation of natural gas prices and revisions in selling prices, which offset lower volumes within the division.

Furthermore, an “insurance income” to compensate for a fire accident at Teijin’s production facility in Delfzijl, The Netherlands (ERJ report), helped to improve profits.

Despite the gains made during the fiscal year, Teijin said demand for tires for luxury cars and EVs in Europe is expected to be “sluggish” in 2024.

In terms of profitability, Teijin said it had managed to improve the profitability of underperforming units, including the aramid and composites businesses.

However, the group also commented that “the challenge of stabilising production is still left unresolved” in both businesses.

In response, Teijin is investing in 'production innovation': particularly enhanced automation and digitalisation of yarn-spinning processes.

The group said it also rectified issues around 'system maintenance' in the final quarter of the year, helping to improve profitability in the aramids business.