Bull s
JK Holdings
Quarterly Report

July,2020

58No.

CONTENTSInternationalP1
P2
P3
P4

Overview of the ﬁnancial results forﬁscal year ending March 2020:
Renewing the highest sales record
Prospect of Business Condition
for April − June
Market Outlook Plywood
KEY-TEC released a new product"Baumkuchen"
Timberam has commenced its
operations
Formulation of our basic policy for SDGs

Overview of the ﬁnancial results for ﬁscal year
ending March 2020:
Renewing the highest sales record
The Japanese economy maintained a moderate recovery trend
in the ﬁrst half of ﬁscal 2019 for steady consumer spending
backed by a favorable employment and income environmentand strong demand for corporate capital investment toimprove the labor shortage situation and productivity.
The economy began to show a sign of slowing down due tothe impact of the consumption tax hike and frequent typhoon
hits in the second half of the ﬁscal year. And the global
economy as a whole, as well as the Japanese economy,
became sluggish due to the impact of the COVID-19
pandemic after the turn of the year. The outlook for theeconomy became extremely uncertain.
In the housing industry, housing starts dropped sharply to883,600 units (down 7.3% from the previous year) mainly
due to a large decline in rental housing starts to 334,500 units(down 14.2%). Housing starts for the owner-occupied, which
is our main market, slightly decreased by 1.5% to 283,300
units. The market for plywood, one of our main products, recovered as imported plywood revived in the second half of theyear, combined with Japanese softwood plywood which hasKeiichiro AokiPresident
JK Holdings Co.,Ltd.

been steadily growing. However, the future outlook is uncertain due to the coronavirus pandemic.
Under these circumstances, our group worked on as follows in
the ﬁrst year of the new medium-term management plan under
the slogan “Breakthrough 21”: Reorganizing the sales basesof our core subsidiary, Japan Kenzai Co., Ltd., to optimize its
distribution network; reorganizing and integrating our laminated lumber manufacturing subsidiary into Timberam Co.,
Ltd. to start one of the largest all-embracing manufacturers oflaminated lumber in eastern Japan; operating the Yamanashi
plywood plant of KEY-TEC Co., Ltd., our manufacturingsubsidiary; and actively coping with business succession ofbuilding material distributors nationwide.
As a result, our sales renewed the highest sales record of368,479 million yen.

JK Holdings Fiscal 2020 Financial Results, Compared with the Previous Fiscal Year(billion yen)

Sales

Ordinary proﬁt

Net proﬁt for the year

Fiscal year ending March 2020

368.4

4.7

2.7

Fiscal year ending March 2019

358.9

4.6

2.1

Medium-term Management Plan "Breakthrough 21"(billion yen)

Sales

Ordinary proﬁt

Fiscal year ending March 2020

365

4.7

Fiscal year ending March 2021

370

4.9

Fiscal year ending March 2022

375

5.1

Bulls International No.58

2Survey

Under these circumstances, the demand
forecast for April to June 2020 shows
an index of minus 18.3 points amongbuilders and minus 15.4 points among
distributors, which are even lower thanthe previous survey. The gap between
the last-minute demand and the reactionary decline due to the consumption
tax raise is smaller compared to theprevious surveyʼs results. However,
all the regions ended up with negativepoints, as the Chugoku and Kyushu
areas, which had been positive until theprevious survey, turned negative.

Prospect of BusinessCondition for
April-June<Demand Forecast byBuilders and Distributors>
According to the Ministry of Land,
Infrastructure, Transport and Tourism, housing starts in 2019 were905,123 units (96% of the previousyear), down for the second consecutive year. Although owner-occupied
houses (101.9%) and houses built forsale (104.9%) exceeded the previousyearʼs ﬁgures, the overall results werelower than the previous yearʼs due toa sharp drop in rental houses (86.3%).
The number of owner-occupied houses
began to fall in July compared to thesame month a year ago, and the decline
has become larger month after month.

The number of applications for Flat 35
was as high as over 10,000 from September to December 2019, and is still
growing as shown in the result of 106%
in January 2020 compared to a year-ago
level, which is worth noting.

<Sales Forecast by Leading
Manufacturers>

Demand Forecast by Builders

10

5.1

50

0.3

-5-10
-15

2.0

1.0

-7.3

-5.7
-9.1

-8.1

-20 Apr-Jun2018

Among the sales forecast by leading manufacturers, the woodenbuilding material sector
is expected to drop by
73.8 points, the sectorof ceramics & insulation
with 66.6 points, andthat of plywood with-18.3
Oct-Dec
2018

Apr-Jun2019

Oct-Dec
2019-14-18

-6.4

-3.7

-6

LVL
Solid lumber

55

-5.5

53

-9.1
-15.4
Apr-Jun2018

Precut lumber

57

1.9-2

Laminated lumber

59

4.9

1.9

2-1061

9.2

6

The remodeling business is projected
to decrease in more regions comparedto the previous term (January-March2020), except in the Tohoku and Kanto
areas which have more expectations ofa growth. The total number of applications for the Next-Generation Housing
Point System reached 187,026 units asof January, including 80,600 units for
new home building and 106,426 units
for remodeling. The remodeling sector
accounted for 44,473 units in January.
The applications were due at the end ofMarch, but the number of remodelingwork using the point system is expected
to increase further.

Dealing Volume of Lumber

Demand Forecast by Distributors

10<Current Status ofRemodeling Business>

The forecast survey for April to June 2020 is based on the totaled data
gathered from 3,000 client companies in Japan through interviews which
took place from late-January to mid-February 2020.

Apr-Jun2020

Point0=business result in April-June,1992

1461.3 points, widening the margin of
the negative growth from the previous
survey. The leading manufacturers
forecast a decline more severely thanthe distributors and builders do. In thehousing equipment sector, the projection to decrease ﬁnds 29.2 points, while
the forecast to stay at the same level as
the previous year is 58.3 points. As thecoronavirus pandemic continues, building material manufacturers are facinga diﬃcult situation with delays in theirproduction and delivery.

Oct-Dec
2018

Apr-Jun2019

Oct-Dec
2019

51

Apr-Jun
2020

Apr-Jun2018

Oct-Dec
2018

Apr-Jun2019

Oct-Dec
2019

Apr-Jun
2020

Point100=all responses expect increase

Point0=business result in April-June,1992

Sales Forecast by Major Supplying Manufacturers（Apr-Jun 2020）
increaselevel-offdecrease

over15％14 ～ 10％

below10％

below10％10 ～ 14％

over15％

0.0

0.0

5.3

33.4

50.7

9.3

1.3

0.0

0.0

5.0

21.2

62.5

8.8

2.5

0.0

0.0

6.7

26.7

60.8

5.8

0.0House Equipments（9firms）

0.0

1.4

11.1

58.3

27.8

0.0

1.4

average

0.0

0.4

7.0

34.8

50.5

6.0

1.3

Plywood（13firms）
Wooden Building Materials（10firms）
Ceramic/Heat Insulation（15firms）

International No.58

Trend
Market Outlookof Plywood<Trend of Domestic Plywood>
Japanʼs production of softwood plywood was 241,900 cubic meters inApril 2020 (down 10.1% from the samemonth of the previous year), and shipments were 233,300 cubic meters (9.5%decrease). Inventories increased substantially from the previous period to173,600 cubic meters (17.9% increase
from a year ago).
With the coronavirus pandemic, all theplywood manufacturers decided to cut
their production. The output volume isestimated to decline in May with consecutive holidays. The impact of thecoronavirus pandemic to the industry is
expected to be more serious from June,and shipments to precut mills, whichhave been leading the good conditionso far, are forecast to peak oﬀ in June.
With the reduced production and weaker prices, manufacturers are expected tobe compelled to make severer decisions
for the time being.

TopicsKEY-TEC Co., Ltd., a subsidiary of
JKHD, announced that it would start
selling wooden interior sheets named“Baumkuchen”, which is made ofnatural sliced veneer with laminatedwood patterns. The production is madein cooperation with Yoshino Gypsum
Co., Ltd. and Big Will Co., Ltd. Yoshino Gypsum supplies Tiger Glass Rock(gypsum board containing glass ﬁber), Big Will
produces “Baumkuchen”
and decorative panels,
and KEY-TEC works as
the general distributor.
The feature of the product is that the certiﬁed
incombustible materialwith Tiger Glass Rockhas been added as a basematerial to the companyʼs existing lineup of<Trend of Imported Plywood>
Arrivals of imported plywood in Japan
were 230,800 cubic meters in April
2020 (down 2.7% from the same monthof the previous year). By country oforigin, those from Malaysia saw 68,800
cubic meters (down 28.1%), those fromIndonesia 79,100 cubic meters (down7.2%) and those from China 63,300
cubic meters (down 16.8%).

Bulls

Overall, there has not been a significant drop in the arrivals as delayed
shipments from China have gradually
recovered. However, the amount of neworders placed to the producing regions
is limited due to uncertainty in thefuture, and the balance of contracts is
considered to be very small. It is expected that arrivals from Malaysia andIndonesia will further decrease for thefuture.

Wholesalers' Prices of Plywood in Tokyo

yen/sheet

Imported Plywood（Structural Use）
Imported Plywood（Concrete Form）
Domestic Plywood［Softwood Plywood for Structural Use(12mm)］
Domestic Plywood［Softwood Plywood for Structural Use(24mm)］

2500

2000

1500

1000

5000

Dec 2019

Jan 2020

Feb 2020

Mar 2020

Apr 2020

May 2020

KEY-TEC released a new product“Baumkuchen”certiﬁed incombustible materials with
gypsum board, metal plates, and aluminum plates. Tiger Glass Rock, which
is light and as thin as 5 mm, allows
easy transportation and construction,
simplifying the execution of work.
Moreover, it is bendable without moistening, enabling applications on curved
surfaces as freely as on ﬂat surfaces.

There are two types of construction
methods for the product: one is to glue
“Baumkuchen” on Tiger Glass Rock at
the building site; and the other is to use
decorative panels ﬁnished at the factories.
With a total of 17 designs, the company
plans to enhance its lineup centered onlaminated wood patterns of LVL.

© Yoshiyasu Saijo

3

4Bulls International No.58

Company

Timberam has commenced its operations
Timberam Co., Ltd. started out as oneof the largest integrated laminatedlumber manufacturers in eastern Japan,
providing customers with one-stop services from manufacturing, processing,designing, and construction of laminated lumber of small, medium, and large
dimensions.

dium, and large dimensional laminatedlumber and CLT, as well as precut anddesign/construction capabilities.
The new oﬃce was completed and theoperation under the new system started
on April 1. It has also opened a delivery
center to manage all of the companyʼsproducts in stock and handle logistics

and delivery times. Also precut lines
for wooden post & beam housing are in
operation. As for future capital investment, the company plans to acquire JAS
certiﬁcation for CLT to start productionin the ﬁrst half of 2020. It also plans tostart operations of a mass-production
plant for large-dimension structurallaminated lumber.

Timberam is a joint
venture between theformer Akita GlulamCo., Ltd. and Miyamori Co., Ltd. It willdevelop the business,taking advantage ofthe strengths of theformer two companies
such as manufacturing
and technological development of woodenbuilding materials
including small, me-Formulation of our basic policy for SDGs
JK Holdings has recently
established a basic policy
for SDGs (SustainableDevelopment Goals).
The SDGs are a set of 17
shared global objectives
that broadly encompass
environmental, social, andeconomic issues with adeadline of 2030. They arealigned with one of our top
management priorities, thesolution of global environmental issues.

JK Holdings Group's vision for building a sustainable social environment
To achieve our corporate
philosophy
To build a sustainable social environment andsustainable growth of the JKHD Group
Resolving the materiality
at JK Holdings
Resolving the materiality
at JK Holdings Group companies

Implementation of the basic
JK Holdings, taking SDGs
strategies at group companies
as important guidelines foraddressing the long-termsocial issues, aims to solve a number ofgroup companies in order to contributeproblems through the businesses of theto further development of the living

Creation of comfortable andrich living environmentsSustainable growth of society andour company
Together with people,
with the earth,with society
Formulation and implementation ofSDGs targets and basic strategies
for each JKHD Group company
environments.

Wood Land Tower 1-7-22 Shinkiba Koto-ku,Tokyo 136-8405 Japan
Phone +81-3-5534-3800 Fax +81-3-5534-3833
E-mail kouhou@jkhd.co.jp
URL http://www.jkhd.co.jp
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