Bull s
JK Holdings
Quarterly Report

January,2020
CONTENTSInternational

P1P2P3P457No.

Overview of the Financial Results for JKHD for theSecond Quarter of Fiscal Year Ending March 2020
New construction method "TE System" obtained certiﬁcation from the Japan Housing and Wood Technology Center
Prospect of Business Condition
for January − March
Market Outlook Plywood
Butsurin Co.,Ltd.Established a New
Company
Miyamori Co., Ltd. enters the precut business
KEYTEC's interior LVL adopted in nonresidential buildings in South Korea

Overview of the Financial Results for JKHDfor the Second Quarter ofFiscal Year Ending March 2020
The total number of housing starts was 466,600 units（down5% from a year ago）for the ﬁrst and second quarters ofJKHDʼs consolidated year to date ending March 2020. And
housing starts for the owner-occupied, which is our main market, increased by 4.4% to 152,900 units.
Under these circumstances, we have worked on improvementof both sales and proﬁt, while enhancing sales of lumber andprecut as well as improving our private brands such as Bulls
and J-GREEN items in the basic material sector. Also we haveput our eﬀorts into functional enhancement of the engineering business in line with received orders for materials andconstruction work in the distribution, remodeling market, andnon-housing markets to promote sales and improve proﬁtability of the overall building material business in our entire group.
Consequently, the consolidated business results for the quarter

Keiichiro Aoki

President
JK Holdings Co.,Ltd.

found a growth to 184.701 billion yen in the net sales（7%increase compared to the same period of the previous year),but declines in the operating proﬁt to 2.222 billion yen（down4.7%）and in the ordinary income to 2.027 billion yen（down8.2%）. The current net income for the quarter that is attributable to the parent company shareholders was 1.118 billion yen（down 4.2%）.
For the full ﬁscal year, our group aims at sales of 365 billion
yen, operating proﬁt of 5 billion yen, and ordinary proﬁt of 4.7
billion yen, with a net proﬁt attributable to the parent company shareholders of 2.6 billion yen.

A new construction method “TE sys-

New construction method“TE System”obtained certiﬁcationfrom the Japan Housing and Wood Technology Centertem” acquired certiﬁcation from theﬂooring, used are roof truss and ﬂoor

Japan Housing and Wood Technology

framing of the post & beam building

Center in August 2019. The system wasmethod, CLT ﬂoor panels, or ribbed

developed jointly by ﬁve companies:

CLT panels which are jointed together

ONOTSUKA CO., LTD., Japan Kenzai

with beams with lag screws.

TopicsCo., Ltd., Akita Glulam Co., Ltd., Butsurin Co., Ltd., and Timber Engineering Construction Co., Ltd. It cost them
about 25 million yen and two years anda half for the acquisition process.
The certiﬁed system is CLT panel method in which ﬂoor beams or roof beams
are placed on CLT wall panels. It uses
only CLT wall panels in some cases,or applies CLT wall panels along withother bearing walls such as rigid frames
in some other cases. For the roof andBulls International No.57

2Survey
Prospect of BusinessCondition forJanuary-March<Demand Forecast byBuilders and Distributors>
The demand forecast for January toMarch 2020 shows an index of minus
7.3 points among builders and minus
6.4 points among distributors, which
are the ﬁrst negative ﬁgures in about ayear since the term ran from October toDecember 2018. The impact of the consumption tax increase is considerable.
By region, only the Chugoku and Kyushu regions see positive points in bothbuildersʼ and distributorsʼ forecasts,
while other regions ﬁnd either side isclose to each other except in the Tohoku
and Hokuriku regions which have large

negative points.
The number of applications for Flat
35 was as high as over 10,000 for twomonths in a row in September andOctober 2019. That for Flat 35 S has
accounted for around 90% of the total number of applications since April
2018. Along with public awarenessof the beneﬁts of preferential interest
rates, there is a clear trend among homeowners to choose high-performance
housing.

26.3 points and 31.7 points respectively. The projection to decrease was 8.3
points lower than previous survey inhousing equipment sector, which foundmore forecasts to stay the same level as
the previous year. The plywood sector
also sees as high as 61.9 points of theprojection of the previous yearʼs level.
Although overall demand for plywood
is unlikely to increase, concerns about adownturn do not seem to be so serious
among the leading manufacturers.

<Sales Forecast by Leading
Manufacturers><Current Status of
Remodeling Business>Among the sales forecast by leading
manufacturers, the wooden building
materials sector is expected to fall 48.8
points, widening the margin of thenegative growth by 37.5 points fromthe previous survey. The sectors of
plywood and ceramics & insulation still
see large decline in their projection at

According to the survey, 51 to 90% of
the target builders had an increase inremodeling work.
More builders came under the categoryof either sales of 10,000 to 1,000,000
yen or 5.01 to 8 million yen per project
on average, compared to the previous
survey, indicating their sales are morepolarized.
In the survey, we asked about “internetsales” and “cashless payments” in which
both builders and distributors showed
little interest. Also the survey found out
an issue that distributors face: 56.2% of
the target companies replied that they
do not receive the delivery fee at all.

Demand Forecast by Builders
64

5.1

2

1.0

0

0.3

-2-4 -6.1-6-8-10

2.0-8.1-9.1

Jan-Mar2018-5.7

Jul-Sep
2018-7.3

Jan-Mar2019

Jul-Sep
2019

The forecast survey for January to March 2020 is based on the totaled data
gathered from 3,000 client companies in Japan through interviews which
took place from mid-October to early-November 2019.

Jan-Mar
2020

Point0=business result in April-June,1992

Dealing Volume of Lumber

Demand Forecast by Distributors
1510
1.90-10-15

1.9

58

-3.7-6.4

Jul-Sep
2018

Jan-Mar2019

Jul-Sep
2019

LVL

57-9.1
Jan-Mar2018

Laminated lumber

59-5.5-6.0Precut lumber60

4.95-561

9.2Solid lumber

56 Jan-Mar

Jan-Mar2020

2018

Jul-Sep
2018

Jan-Mar2019

Jul-Sep
2019

Jan-Mar2020

Point100=all responses expect increase

Point0=business result in April-June,1992

Sales Forecast by Major Supplying Manufacturers（Jan-Mar 2020）
increaselevel-offdecreaseover15％14 ～ 10％

below10％

below10％10 ～ 14％

over15％

1.3

0.0

10.5

61.9

26.3

0.0

0.0

0.0

0.0

11.3

39.9

45.0

1.3

2.5

0.0

0.0

18.3

50.0

31.7

0.0

0.0

House Equipments（9firms）

0.0

0.0

26.4

47.2

26.4

0.0

0.0

average

0.3

0.0

16.6

49.8

32.4

0.3

0.6

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

International No.57

Trend<Trend of Imported Plywood>

Market Outlookof Plywood<Trend of Housing Starts>
The amount of new housing
construction starts in October 2019 was77,123 units (92.5% compared to thesame period in the previous year), andthe cumulative amount from January
to October was 759,426 units (97.3%compared to the same period in theprevious year).

<Trend of Japanese Plywood>
In October 2019, the amount ofdomestic softwood plywood production
was 286,100 m³ (108.5% compared tothe same period in the previous year),and the amount of shipments was
294,400 m³ (105.3%). Both amounts
of softwood plywood production andshipments for the month reached theirhighest ever. The backlog of orders ofeach manufacturer is large, and thistrend is projected to continue at least
until the end of January 2020.
For these reasons, the bullish stanceof domestic manufacturers is seen ascontinuing, but a slow down in themovement of goods is expected fromFebruary heading into the end of theﬁscal year.

CompanyThe amount of imported plywood
received in October 2019 was 215,000m³ (77.9% compared to the samemonth in the previous year). Overall,
the amount received is decreasing;
especially from Malaysia, the amountreceived has continued to be low in
the 60,000 m³ level since May. Basedon the producing region, the amounts
received were 67,798 m³ (61.6%compared to the same month in theprevious year) from Malaysia, 80,458
m³ (94.9%) from Indonesia, and 49,572
m³ (89.2%) from China.
In Indonesia, dry days continued, riverBulls

levels are low, and delays in the amountof logs received began to appear. In
Malaysia, the weather is stable, but
logging companies are holding down
their logging due to sluggish prices.
The imported plywood market in
Japan has been sluggish for a longtime, but last year in October, the tidechanged, and prices reversed. Due
to low inventories at ports and risinglocal prices, the situation would not be
strange for temporary demand to occur,
but a change in demand trends was
not seen from the end of last year tothe beginning of this year. The amountreceived in October may already havebeen in line with actual demand.

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

500

0Jul 2019

Aug 2019

Sep 2019

Oct 2019

Butsurin Co., Ltd. Establisheda New Company

Butsurin Co., Ltd.（President Katsumi Tannaka）established a new
subsidiary Timberscape Corporation（President Naokazu Kajii）with
two core businesses, a construction business specializing in wooden
structure & more use of wood and a park management business. The
new company is in charge of practical business of Toyosu Park Management JV（Butsurin, JK Holdings, Asics Japan, and Oriental Consultants）represented by Butsurin.
Located in Koto Ward, Tokyo, Toyosu is a residential area at themouth of the Sumida River, possessing a great landscape lined withhigh-rise condo towers. It has come into the limelight more than everand continues to develop as a lively place with the opening of theToyosu Market and the establishment of the Olympic Village for theTokyo Olympics and Paralympics.
The new company is going to develop the park management oﬃces,park restaurants, and sports facilities in Toyosu with wooden structures from ﬁscal 2019, under the new concept of “Wood nurturesparks and cities”.

Nov 2019

Dec 2019

3

4Bulls International No.57

Company

Miyamori Co., Ltd. enters
the precut businessMiyamori Co., Ltd. is a leading manufacturer oflaminated lumber for structures such as posts,
beams, and lintels, using mainly of European wood,and some Japanese species as materials. The company focuses on product quality, and makes its eﬀorts
to supply items in diﬀerent sizes in one bundle foreach house to meet the needs of builders, which has
been highly appreciated by its customers. Adding
the precut business, the company is to put a fullscale eﬀort to develop a new ﬁeld in the non-residential wooden structures, which are considered
to grow in the future. It is expected to lead to an
expansion of its entire business, with a high synergy eﬀect with the business of structural laminatedlumber, which is Miyamoriʼs specialty.
A plant is currently under construction and is scheduled to start operation in April 2020.

KEYTEC’s interior LVL adopted in non-residentialbuildings in South Korea
Keiichiro Aoki, the president of JK Holdings visited an exhibition site for Young Lim Timber Co., Ltd. (South Korea)
on August 1, 2019. The wood manufacturing company wasfounded in 1969 and has a 50 year history. The manufacturer
pays attention to Japanese lumber lately in the course of dealing with lumber from all over the world for the Korean market. They import precious wood counters, Japanese cypress
lumber, and others from Japan to process by themselves to sellat the exhibition site they have set up for the Korean market.
“Keylam Interior”, an interior item of Japanese cedar LVL
which KEYTEC produces, was adopted for the exhibition site.
It attracted the attention of a client, which made it the ﬁrst application in Korea, in a hospital building. With this foothold,
JK Group plans to promote its products in the Korean interiormarket to stimulate the demand in order to expand its overseas
business.

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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