Sales for the first quarter were ¥61,255 million, up 2.8% over fiscal year 2010. However, net income was ¥2,731 million, down 7.8 percent from FY 2010.
According to the company, during the first quarter of the consolidated fiscal year under review, the Japanese economy remained stagnant, given the effects of the Great East Japan Earthquake, including weaker production activities resulting from difficulty in procuring raw materials and uncertainty over the electric power supply, as well as sluggish consumer confidence.
The outlook of the global economy also remained uncertain, reflecting the slowdown in the U.S. economy, fiscal problems in Europe, concerns about inflation in China, and the political uncertainty in oil-producing countries.
The Toyo Ink Group faced a difficult business environment. Apart from certain businesses related to daily necessities or reconstruction efforts connected to the earthquake, demand remained stagnant in Japan, and the prices of raw materials continued to surge both in Japan and overseas, which more than offset the Group’s cost-cutting efforts.
The company reported that in offset inks, demand declined significantly in both the printing and commercial printing markets, reflecting the structural recession resulting from the progress of digitization and concerns over the printing paper supply and voluntary advertising restraints in the aftermath of the earthquake. Sales of inks in the newspaper market also remained sluggish, given the drop in the number of copies, pages, and color advertising, due to the impact of the earthquake.
Overseas sales steadily expanded, mainly in China, Southeast Asia, and India. However, in Europe and the U.S., sales of products mainly imported from Japan remained sluggish, and earnings also remained stagnant, due to the surge in the prices of raw materials.
In Japan, sales of gravure inks for printing remained sluggish, but demand for mainstay gravure inks for packaging related to daily necessities, including foods, beverages and toiletries, was strong. Sales of gravure inks for construction materials were also robust, owing to demand related to reconstructing activities in the disaster-affected areas.
Overseas, demand for gravure inks for food packaging grew in China and Southeast Asia, and sales of eco-friendly inks expanded in the same manner as in Japan. In addition, demand for gravure inks for construction materials remained strong in North America.