Japanese materials firm Teijin Ltd. is blaming poor conditions in Chinese demand for polyester films for a 4.8 billion yen ($39.6 million) charge against earnings for the nine months ending Dec. 31.
The Tokyo-based company announced the special charge Feb. 1, and said a restructuring program announced in 2014 will take longer than expected to show results.
“The operating environment surrounding the polyester film business is becoming increasingly severe mainly because of the emergence of manufacturers from the People's Republic of China (PRC) and weak demand in connection with the decelerating PRC economy and other factors,” Teijin said.
“Therefore, Teijin believes it will take some more time for profitability to improve,” the company said.
The company had said in mid-2015 it would close its polyester films plant in Gifu, Japan, and shift production to a factory in Utsunomiya, Japan. It said the restructuring would let it narrow focus to higher-value added products.
Overall, the conglomerate reported net sales rose 1.1 percent to 539.7 billion yen ($4.4 billion) and profit rose 94 percent to 62.3 billion yen ($513.9 million) on the strength of its health care, retail and trading business.
Its materials business, both in advanced composites and fibers, and in polymers, posted declining sales but higher profits for the period.
