Total sales of Toray's Fibers and Textiles drop by 6.8%

13 Feb '09

5 min read

was affected by worsening economy from the third quarter, in addition to the slowdown at Chinese subsidiaries caused by declining exports to the U.S. As a result, total sales of Fibers and Textiles fell 6.8% to ¥452.2 billion (US$4,969 million) from the previous year and operating income declined 32.6% to ¥9.9 billion (US$109 million).

Carbon Fiber Composite Materials
In the Carbon Fiber Composite Materials segment, demand is expected to continue growing over the medium to long-term, especially in aircraft and industrial applications. At the same time the Group is also actively pursuing development of new applications with focus on the crucial fields of automobile, environment and energy applications. In the short term, the market for general-purpose field started easing off as companies expanded production, and the global economic downturn resulted in low shipping volume for sports and industrial applications and declining sales in aircraft and aerospace applications.

On the whole, the Carbon Fiber Composite Materials registered a year-on-year sales decrease of 9.8% to ¥55.0 billion (US$605 million), which also reflects the impact of foreign exchange fluctuations. Operating income fell by 31.1% to ¥8.7 billion (US$95 million) compared to the same period of the previous fiscal year.

On the whole, the Carbon Fiber Composite Materials registered a year-on-year sales decrease of 9.8% to ¥55.0 billion (US$605 million), which also reflects the impact of foreign exchange fluctuations. Operating income fell by 31.1% to ¥8.7 billion (US$95 million) compared to the same period of the previous fiscal year.

Environment and Engineering
In the Environment and Engineering segment, sales volume of the water treatment membranes led by reverse osmosis membrane element expanded briskly especially in the Middle East and other overseas markets, though performance at a water treatment engineering subsidiary remained sluggish. As a result, overall sales of the segment grew 6.0% on year to ¥110.8 billion (US$1,217 million) partly thanks to strong machinery exports through the second quarter at a trading subsidiary. However, operating income plummeted 90.9% ¥0.4 billion (US$4 million) reflecting increased expenses stemming from the expansion of water treatment membrane business, the impact of foreign exchange fluctuations and profit deterioration at the water treatment engineering subsidiary.

New Businesses and Investments
In November 2008, Toray agreed with China National BlueStar (Group) Co., Ltd. To establish water treatment joint venture Toray Blue Star Membrane Co., Ltd. (tentative name) to address the growing demand for wastewater recycling and seawater desalination using water treatment membranes in China. The new company is scheduled to be established in May 2009 and is expected to start manufacturing reverse osmosis membrane products based on Toray's cutting-edge technology in April 2010.

Furthermore, in December 2008, the Company decided to make equity participation in carbon fiber reinforced plastics, or CFRP, parts manufacturer ACE Advanced Composite Engineering GmbH of Germany to make it a local development and manufacturing base of CFRP in Europe in a bid to expand the Group's carbon fiber composite materials business in the automobile sector.

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