KURARAY CO.,LTD. Q4 FY2026 earnings call

• PFAS Regulatory Background: Starting April 2026, two PFAS variants (PFOS and PFOA) will be added as new water quality standard items for tap water in Japan. This imposes a mandatory requirement on water utility operators to continuously conduct water quality testing for PFOS and PFOA and comply with the new standard limits.
• Company Positioning for PFAS Demand Growth:
  • Kuraray (3405): It is a general chemical manufacturer holding the No.1 global market share for activated carbon, and has extensive PFAS countermeasure project experience in the United States, which is an advanced market for PFAS regulation.
  • Mitsubishi Chemical Group (4188): Its wholly-owned subsidiary Mitsubishi Chemical Aqua Solutions has installed a PFAS removal facility at a water distribution plant in Shimotsuke City, Tochigi Prefecture (announced March 2025). The subsidiary also provides PFAS content investigation and analysis services in addition to removal solutions, covering the full scope from testing to removal.
  • Muromachi Chemical (4885): Founded in 1917 with over 100 years of operating history (temporarily closed during wartime), it operates three core business segments: pharmaceuticals, health foods, and chemicals. The company is participating in a government-endorsed demonstration project led by Okumura Corporation focused on PFAS removal, and its demonstration of PFAS removal using ion exchange resin has been officially selected for the program. The product will be launched to the market after completing demonstration testing.
  • Kurita Water Industries (6370): It is a leading water treatment engineering company, well-known for manufacturing ultrapure water production equipment required for semiconductor manufacturing processes. Leveraging its trace analysis technology and know-how accumulated from ultrapure water analysis, the company provides end-to-end PFAS solutions including water quality analysis, PFAS risk visualization via multi-component analysis, and PFAS removal/separation using activated carbon and reverse osmosis (RO) membranes.
• Broader Water Infrastructure Investment Theme: A major industry challenge is the low pipeline replacement rate for aging water infrastructure across Japan. Recent high-profile incidents such as the road collapse in Yashio City, Saitama Prefecture, which was linked to damaged sewer pipes, have highlighted the urgency of proactive water infrastructure maintenance. Investment themes extend beyond PFAS countermeasures to cover the entire water infrastructure sector, including aging underground pipe renewal.

No detailed segment-level financial performance data (absolute values or revenue contribution percentages) is provided in this content.

No forward-looking guidance from company management, including upward/downward revisions or maintenance of prior financial targets, is provided in this content.

• PFAS is a deeply entrenched environmental issue: identifying the location and concentration of existing PFAS residue in the environment is technically difficult, per public statements from Japan's Ministry of the Environment Director-General of the Water and Atmospheric Environment Bureau.
• Many local governments in Japan have deferred water infrastructure maintenance and upgrades due to overlapping political and fiscal challenges, creating ongoing risk of infrastructure failures such as pipe collapses that can damage public safety and property.

No question and answer section content is provided in this material.