Annual Report 2018

“We live in an era where societal needs related to information, the environment, and medicine are rapidly becoming more sophisticated, and we believe this presents the Specialty Group with an amazing opportunity for growth.”

Advanced Materials

Organic Chemicals



The Specialty Group strives to enhance quality, reduce costs, and raise the safety of its manufacturing operations.

  • Snapshot

    The Specialty Group encompasses organic chemicals, bioscience, and advanced materials operations. The group’s products are high performance, profitable, and serve extremely specialized needs for clients in a broad range of rapidly growing industries. The group continues to develop differentiated, value-added products and to strengthen its R&D capabilities. It believes it will achieve significant growth by delivering technologies, products, and services to meet constantly changing, increasingly sophisticated societal needs.

    The Specialty Group serves customers principally in the pharmaceutical, healthcare, electronics, and automotive industries. Its innovative solutions enhance the efficiency, quality, and value of their products and drive their businesses. It supports technological innovation, contributes to the preservation of the environment, and develops products and services that help to improve medical treatments.

  • Group Performance

    In fiscal 2018, Specialty Group net sales increased 6.4% from a year earlier, to ¥187.1 billion (US$1.8 billion). That constituted 22.7% of Tosoh’s consolidated net sales, down from 23.7% in fiscal 2017. Group operating income decreased 4.2%, to ¥33.9 billion (US$319.1 million), and accounted for 26.0% of Tosoh’s consolidated operating income, compared with 31.8% a year earlier. The group’s operating margin was 18.1%, a decrease from 20.1% in fiscal 2017.

    The growth in net sales was driven by increased sales volumes of advanced materials, such as zeolite, zirconia, and fused quartz; of organic chemical products, including ethyleneamine and bromine; and of bioscience products, such as liquid chromatography separation media and diagnostic reagents. Operating income, meanwhile, was suppressed by increased prices for naphtha, coal, and other raw materials and by increased fixed costs due to depreciation related to capital investment.

    The Specialty Group benefited from decreased bromine production in China resulting from the enactment there of increasingly stringent environmental regulations. But those gains were offset to an extent by rising crude oil and coal prices, which drove up the cost of the group’s raw materials and utilities. Also affecting the group’s gains was an increased depreciation burden stemming from its robust capital investment.

  • Developments

    Capital Investments

    The Specialty Group has as its goals enhancing quality, reducing costs, and raising the safety of its manufacturing operations. It is constructing a new plant for the separation media, TOYOPEARL® and it will build an overseas inventory of this media for its customers. It is providing a safe environment for its personnel and streamlining the production process at this high-tech factory.

    The Specialty Group announced in fiscal 2018 plans to boost its high-silica zeolite (HSZ) production capacity. With an investment of ¥10 billion, the group is constructing additional facilities at the Nanyo Complex that will raise its HSZ production capacity 30% and enable it to keep pace with increased demand globally for automobile emission catalysts.

    In April 2017, Tosoh launched commercial operations at two new facilities: an HSZ manufacturing plant at Tosoh Advanced Materials Sdn Bhd in Malaysia and a bromine production facility at the Nanyo Complex. The implementation of new manufacturing methods at the latter will enhance the cost-competitiveness of the group’s bromine production.

    Network Expansion

    As part of Tosoh’s efforts to strengthen its bioscience business in India, Tosoh began using Tosoh India as its India sales base for urethane raw materials. Tosoh also plans to designate Tosoh India as its sales company for separation and purification media and for an increasingly broad range of products for the Indian market as it gradually increases its presence in that nation.

  • Positioning

    Organic Chemicals

    The Specialty Group seeks to stabilize the profits of its organic chemicals businesses. At the same time, it will promote the sale of new products and rapidly commercialize next-generation products in the interest of achieving an ordinary income sales ratio of 20%. In addition, the group will formulate expansion strategies as business opportunities present themselves.
    Products that the Specialty Group seeks to strengthen include ethyleneamines, such as TEDA and TOYOCAT®; bromine;and heavy metal treatment agents. Firmer foundations in these products will grant a solid footing and help mitigate the effects of fluctuations in business conditions.

    The adoption of increasingly stringent environmental regulations in China has decreased that nation’s production of bromine. That pushed up the market price and led to increased bromine sales to China. The Specialty Group will focus on the use of such resources as warm water, waste acid, and chlorine at its Nanyo Complex bromine production facility. It will also fortify its bromine production operations by using environmentally friendly seawater with the goal of establishing Tosoh as the top bromine manufacturer in Asia.

    Advanced Materials


    The construction of facilities to supplement HSZ production at the Nanyo Complex is under way at a cost of about ¥10 billion. These facilities are slated to begin commercial operation in August 2019 and will boost the Specialty Group’s HSZ production capacity 30% over present levels. The group also manufactures HSZ at Tosoh’s Yokkaichi Complex. And, in mid-2017, Tosoh launched HSZ production at a new facility in Malaysia.


    The Specialty Group’s zirconia powder has gained popularity for dental and decorative applications. With the aim of further expanding business to meet customer demand, it plans to augment its zirconia production capacity 30% at the Nanyo Complex. Construction is scheduled to begin in summer 2018, and the expanded zirconia facility is expected to begin operation in October 2019.

    Battery Materials

    Electrolytic manganese dioxide (EMD) is important in the production of conventional batteries. And the Specialty Group is resolved to develop high-performance battery materials to differentiate its products and raise profitability. The group produces EMD at facilities in Japan and Greece and boasts the world’s largest production capacity for EMD.

    Electronic Materials

    Market demand for semiconductors is rising from the highly diversified semiconductor industry, driven largely by data center, Internet of Things (IoT), and artificial intelligence (AI) applications. The global flat-panel display market is also expected to grow, due mainly to increasing demand for high-definition and large televisions and for organic light-emitting diode (OLED) displays for mobile applications.

    The Specialty Group’s quartz products are used in manufacturing equipment parts for the semiconductor industry, and its sputtering targets are used for thin-film deposition. The group will continue to develop differentiated products and to execute timely investments in Japan and overseas in line with growing demand in the semiconductor and flat-panel display markets.


    Separation and Purification

    The Specialty Group recognizes the massive potential for growth in the global bioscience market and is adopting aggressive strategies for developing business in this and other high-growth fields. It will focus on the development and sales of bioscience-related separation media and columns, expanding in particular its sales of separation media for the manufacture of antibody and nucleic acid drugs. It will also strengthen its operational foundation through R&D on original materials such as silica-based gel and ligands for Toyopearl.

    Clinical Diagnostics

    In May 2017, the Specialty Group received approval for the manufacture and sale of an in vitro diagnostic agent for a new reagent that targets autotaxin, a protein whose concentration increases in the blood of patients with liver damage. That protein is recognized as an effective marker in the early diagnosis of liver fibrosis. And the group’s new reagent measures its concentration using Tosoh’s AIA-series Automated Enzyme Immunoassay Analyzer. It is therefore expected to contribute to the diagnosis and treatment of chronic liver disease.

    The Specialty Group plans to develop further diagnostic products for the immunodiagnostic field and will lessen their time to market by collaborating with entities external to Tosoh. It will also work to strengthen Tosoh’s presence in diabetes diagnosis by developing the next-generation HbA1c glycohemoglobin analyzer. The Specialty Group’s work in genetic testing sees it developing a line of reagents for its TRCReady®-80 molecular testing system, formulating a plan for the expansion of sales, and considering products such as an influenza test to introduce to new markets.

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