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NEWS RELEASE
Mar 31, 2017
R&I Affirms BBB-, Stable: Yasuhara Chemical Co., Ltd.
Rating and Investment Information, Inc. (R&I) has announced the following:
ISSUER:
Yasuhara Chemical Co., Ltd.
Issuer Rating: BBB-, Affirmed
Rating Outlook: Stable
RATIONALE:
Yasuhara Chemical Co., Ltd. primarily offers terpene resins made from natural materials. The
company almost dominates the domestic market and is among the global market leaders for terpene
resins. Strong relationships with suppliers allow for stable procurement of raw materials. Thanks to this,
as well as the advantage of having blue-chip companies on its client list, the earnings base is solid. While
users are in diverse industries, its products are mainly for niche markets. Expanding the business size is
thus not easy.
The company has broadly been able to pass changes in raw material costs on to product prices, partly
because competition is limited and replacement of its products with other materials is difficult in some
fields. Development of high value-added products, such as terpene-based copolymers for tires, is
underway as well. Given intensifying competition in general use fields and other circumstances, no
optimism is warranted on the business environment. Even so, the company as a whole will likely achieve
a certain level of profits and cash flow.
For stable supply of terpene products, which are largely made from natural materials, Yasuhara
Chemical has a policy of stockpiling extra raw materials. Its working capital therefore tends to be high. For
the past several years, the company has adjusted the volume of procurement due in part to a surge in raw
material prices, resulting in a reduction in inventories. With the environment for raw material procurement
becoming harsh, R&I will keep a close eye on future developments, inventory levels, etc. As evidenced by
an equity ratio of about 80% and a net cash position, the financial balance is sound.
The primary rating methodologies applied to this rating are provided at "R&I's Basic Methodology for
Corporate Credit Ratings" and "Chemicals". The methodologies are available at the web site listed below,
together with other rating methodologies that are taken into consideration when assigning the rating.
http://www.r-i.co.jp/eng/cfp/about/methodology/index.html
R&I RATINGS:
ISSUER:
RATING:
Yasuhara Chemical Co., Ltd. (Sec. Code: 4957)
Issuer Rating
BBB-, Affirmed
RATING OUTLOOK:
Stable
■Contact
: Investors Service Department
TEL.+81-(0)3-6273-7471
■Media Contact : Corporate Planning Division (Public Relations) TEL.+81-(0)3-6273-7273
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