Toyo Ink noted that during the consolidated first three quarters, the Japanese economy remained weak, given difficulty in procuring raw materials due to the effects of the Great East Japan Earthquake. In addition, the second half saw a slowdown in the world economy, including the developing countries that had been the main drivers of global business.
The Toyo Ink Group also faced a difficult operating environment as demand remained stagnant in Japan and overseas and prices of raw materials continued to surge, which more than offset the Group’s cost-cutting efforts.
In offset inks, Toyo Ink reported that domestic demand remained weak in both the printing and commercial printing markets, reflecting a structural recession resulting from the progress of digitization and voluntary advertising restraints due to the earthquake and power shortages. The newspaper market was down sharply in the first half due to the earthquake.
Overseas sales expanded, mainly in China, Southeast Asia and India, but overseas earnings were hurt by sluggish imports from Japan with the sharp appreciation of the yen and a surge in raw materials prices.
In Japan, Toyo Ink stated that gravure inks for printing remained weak but gravure inks used for wrappings for food, beverages, toiletries and other daily necessities as well as for housing-related construction materials showed sluggish growth in the second half but were positive overall. Demand for inks used for food wrapping was positive in China and Southeast Asia and sales of eco-friendly inks expanded.
Demand for inks used in construction materials showed steady improvement in North America. However, cost cutting and raising prices to appropriate levels were not enough to compensate for sharply higher prices of raw materials both in Japan and overseas.