Establishing proprietary sales and supply channels for yarn and fabrics

「このような事業環境の変化を受け、新規受注及び先物契約についても低調に推移いたしました。」

「In the Middle Eastern market, the company raised selling prices in response to rising costs in recent years, but demand slowed and sales volume declined as the price gap with products from third countries widened. Sales of products for Southeast Asia also remained weak compared with the previous period, affected by stagnant domestic economies in Malaysia and Indonesia, as well as weather-related factors such as the rainy season.」

「また、テキスタイル事業につきましては、中東市場を中心に販売量は弱含みで推移したものの、円安の影響等により一定の利益率を確保いたしました。」

「Sales of products for Indonesia stagnated as a result of deteriorating domestic conditions, leading to a decline in shipment volume. Contracts for products for the Middle East were progressing smoothly relative to plan. Although operating income was approximately 10% lower than in the same period of the previous year, net sales remained relatively solid against the budget.」

「Demand in the Middle Eastern and East Asian markets continued to recover from the COVID-19 pandemic, while rising demand for Japanese products in local markets drove strong growth in orders. The weaker yen also contributed, and net sales continued to increase compared with the previous fiscal year (April 2023 to March 2024). As a result, the textile business recorded net sales of ¥787.715 million, up 36.2% year on year, and operating income of ¥101.422 million, up 68.6%, for the current consolidated fiscal year.」

「Recovery from the COVID-19 pandemic in the Middle Eastern and East Asian markets continued smoothly from the previous consolidated fiscal year, and strong orders resulted in a substantial increase in revenue. As a result, the textile business recorded net sales of ¥393.504 million, up 52.4% year on year, and operating income of ¥43.952 million, up 98.6%, for the current interim consolidated accounting period.」

「In the Middle Eastern and East Asian markets, local demand exceeded supply and orders remained strong. Dyeing and shipping operations were temporarily delayed because subcontractors faced space and labor shortages, but the delays were recovered in the second half and shipments proceeded relatively smoothly.」

「In addition to continuing to focus on fulfilling contracted orders, it will be necessary from the fourth quarter onward to monitor exchange-rate fluctuations, which have been trending toward a stronger yen, and advance measures to address storage and transportation costs in light of local demand.」

「In the Middle Eastern and East Asian markets, local demand exceeded supply, while dyeing and shipping operations continued to be delayed due to shortages of space and labour at outsourced processing facilities. From the third quarter onward, in addition to focusing on fulfilling contracts already secured, it will be necessary to address exchange-rate fluctuations and rising storage and transportation costs.」

「Regarding sales during the cumulative first-quarter period, local demand remained firm in the Middle East and East Asian markets, but dyeing and shipping operations were delayed due to shortages of space and labour at outsourced processing facilities. From the second quarter onward, the challenge will be to secure processing-facility resources and periodically review rising storage and transportation costs while accelerating the fulfilment of contracts already secured.」

「Although uncertainties remained, including the availability of processing space, sales progressed smoothly in Middle Eastern markets as the impact of COVID-19 diminished, and the yen remained on a depreciation trend, enabling us to achieve operating profit above plan. / As a result, the textile business reported revenue of ¥522.311 million and operating profit of ¥37.636 million for the consolidated fiscal year.」

「In the Middle East, sales exceeded budget as products for the Ramadan sale reached peak shipment volumes and the yen’s depreciation also provided support. In Southeast Asia, new inquiries increased and orders remained firm, but the planned quantity could not be shipped due to limited space at outsourced processing facilities.」

「In the Middle East, advance orders from customers, accompanying the decline in COVID-19 cases since the beginning of the year, resulted in revenue above budget. For products destined for Southeast Asia, we recovered from processing and shipment delays at the end of the previous consolidated fiscal period, and new inquiries increased, keeping business firm. Going forward, we plan to manage contract delivery schedules and ensure smooth shipments while taking processing-facility capacity into account, and to develop new applications.」

「Across the Middle East, the number of COVID-19 cases had been declining since the beginning of the year and daily life was gradually returning to normal. This year’s Ramadan sale was stronger than the previous year, and new order contracts progressed smoothly. For products destined for Southeast Asia, delayed processing and shipments from the end of the previous consolidated fiscal period progressed smoothly. New inquiries also increased, and new orders remained firm.」

「Fabric sales to the Middle East remained challenging as demand in overseas markets continued to decline due to the COVID-19 pandemic. In addition, shortages of containers at processing facilities and higher logistics costs delayed processing and shipment, resulting in sales volume well below the original plan. Going forward, while monitoring sales during this spring’s Ramadan sale and taking the impact of COVID-19 into account, we will work to increase sales and rebuild the processing and shipping system for the next season.」

「Shipments of products for the next season’s Ramadan sale to the Middle East began in November 2021, but processing and shipment were delayed due to container shortages and higher logistics costs. As a result, part of the planned sales volume was pushed back to January 2022 or later. Going forward, increasing sales through diversification into new regions and products for the next fiscal year is an urgent priority.」

「Although fabric sales to Southeast Asia were partly affected by COVID-19, orders and shipments and sales progressed relatively smoothly during the cumulative second-quarter consolidated accounting period, supported by increased demand from local events and other factors. In addition, long-term orders have been strong through the use of new internet-based sales tools.」

「Although fabric sales to Southeast Asia were partly affected by COVID-19, we were able to secure orders and make shipments and sales relatively smoothly. Going forward, recovery from the second quarter onward is expected through the use of new internet-based sales tools and flexible changes to product specifications in response to market needs.」

「As a result, the textile business reported revenue of ¥337.297 million and operating profit of ¥11.286 million for the consolidated fiscal year.」

「Fabric sales to the Middle East were affected by the COVID-19 pandemic, as was the spinning business, but in the third quarter shipments of products for next season’s Ramadan sale progressed smoothly and sales were broadly in line with plan. However, local inventories have increased, and the order environment is expected to remain challenging next fiscal year. Business in Southeast Asia was also affected by the pandemic, and local markets had not returned to normal, suggesting that recovery would take time. There were also positive developments, including orders for products with new specifications, and we are working to expand sales.」

「Fabric sales to the Middle East, like the spinning business, were affected by the COVID-19 pandemic. Sales did not progress as planned, and excess inventory further reduced sales below the plan. Business in Southeast Asia was also affected by the pandemic, and local markets had not returned to normal business, suggesting that recovery would take time. / During the cumulative second-quarter period, the sales plan was not achieved because shipments of contracted orders were delayed, but a gradual recovery is expected from October onward.」

「Market conditions for fabric sales to the Middle East had remained weak for several years due to excess inventory, various issues with neighbouring countries and domestic political changes in Saudi Arabia, but inventory has declined to some extent and the market has been recovering, allowing sales to progress smoothly in the first quarter. Against this backdrop, the textile business reported first-quarter revenue of ¥119.361 million, up 632.5% year on year, and operating profit of ¥4.989 million, compared with an operating loss of ¥2.429 million in the same quarter of the previous year.」

「Regarding fabric sales for traditional clothing in the Middle East, which began in earnest in the current fiscal year, we strengthened sales efforts in the UAE, Qatar and Kuwait, surrounding countries of Saudi Arabia, because political conditions in Saudi Arabia, our main market, were unstable. Although we were unable to absorb the upfront costs of the first year of the business, its launch was smooth and we established a significant foothold for sales in the Middle East. / The textile business reported revenue of ¥223.064 million for the fiscal year, compared with revenue of ¥19.146 million in the previous fiscal year.」

「Regarding our sales of fabrics to the Middle East, which we have pursued since the second half of the previous fiscal year, the time had come to make full-scale deliveries of products for the next Ramadan sale. As considerable processing volumes were received from various companies, production at processing plants was extremely tight and delivery deadlines remained challenging, but we achieved the planned sales. For sales of fabrics to Southeast Asia, we also began receiving greige fabric in October and are expected to begin processing contracted orders, contributing to the recognition of sales going forward.」

「Regarding fabric sales to the Middle East, the Ramadan sale has ended and local market conditions have been recovering compared with the past several years, so contracts progressed smoothly. As the peak sales season runs from September through February of the following year, we will strengthen our sales activities. Fabric sales to Southeast Asia, including new products, also resulted in contracts progressing smoothly and are expected to contribute to future revenue.」

「This is our first year of full-scale sales, but we have been gradually securing contracts and believe we can generate results from the second half of the fiscal year.」

「Although selling costs for the new Middle East sales of fabrics for traditional clothing are currently being incurred ahead of sales, contracts have been gradually secured since the third quarter, and revenue for the fiscal year amounted to ¥19.146 million.」

「Sales of fabrics for ethnic clothing in the Middle East, which we began pursuing as a new business, got underway amid political issues in Saudi Arabia and various problems in neighboring countries. Although volumes were small, we concluded contracts in several regions and recorded ¥4.775 million in sales in the cumulative third quarter. Going forward, we will establish a basic commercial platform and develop products suited to the market.」

「Orders for polyester-related products produced results that differed from expectations, but are expected to decline going forward, making it necessary to urgently develop new fields and products to replace them.」

「In the textile business, we will develop markets by seeking applications for high-performance fibres and establishing new sales channels as soon as possible.」

「As standard spun-yarn products are not price-competitive with those from developing countries, we will specialise our sales efforts in automotive-parts and apparel applications while working to establish our own sales and supply channels for yarn and fabrics as soon as possible.」

「We will work to establish our own sales and supply channels for yarn and fabrics as soon as possible.」