Denka impacted by higher costs, weak chloroprene rubber demand

Tokyo – Denka Corp. has seen first-half losses nearly double at its elastomers & infrastructure solutions division, due mainly to challenges within its chloroprene rubber (CR) business.

For the six months to end of September, the elastomers & infrastructure unit posted an operating loss of Yen3 billion (€18.2 million), compared to a loss of Yen1.5 billion the year before.

Sales within the division fell slightly to Yen56.4 billion, the Japanese supplier reported 8 Nov.

Denka linked the earning decline to higher fixed costs, such as maintenance costs at its US-based Denka Performance Elastomers (DPE) subsidiary, as well as foreign exchange impacts.

Furthermore, it explained, CR demand remained weak during the period, as pricing was impacted by stronger competition.

Sales volumes within the division, which also includes cement production, declined 0.8% year-over-year, mainly reflecting lower volumes within the cement segment as CR volumes remained flat.

Denka has raised its CR pricing since 2 Sept. (ERJ report)

The Japanese group confirmed that it is still reviewing the performance of its CR operations, with 'comprehensive measures' to be adopted once the review is over.