Bull s
JK Holdings
Quarterly Report

Housing starts totaled 245,000 units（a decline of 2.0%
from the same period of the previous year）for thefirst quarter of the fiscal year ending March 2019 forour consolidated accounts. Housing individual, which
are our main markets, also decreased by 2.5% fromthe same period of the previous year to 71,700 units.
However, in comparison with the previous quarter（thefourth quarter of the fiscal year ended March 2018）,both the overall housing and individual housing wereexpanded substantially.
In such a business environment, we have enhanced
sales of lumber and precut in the basic materials
sector, and have tackled expansion of sales tostrengthen sales and improve profits in the sectorof Bulls and J-GREEN items, which are our private
brands. Concerning the building materials and housing
equipment, the whole sections of our group haveworked on functional enhancement of the engineeringbusiness to promote sales and improve profitability ofthe overall building materials business in accordance

The 40th Japan Kenzai Fair
Ended in Great Success
Japan Kenzai Fair which is held
twice a year at the Tokyo Big
Sight is the largest housing
exhibition and spot sale fair inJapan. More than 200 major vendor
and manufacturers for Japan
Kenzai participate in the event,which is popular as a place to find
new products, hot sellers, and thelatest industry trends.
The theme of the 40th Japan
Kenzai Fair held in August 2018
was“storage”. When designing

CONTENTSInternational

Brief Financial Results
for JKHD for the First
Quarter of the Fiscal
Year Ending March 2019

EventOctober,2018

52

No.

P1 Brief Financial Results for JKHD for the First
Quarter of the Fiscal Year Ending March 2019
The 40th Japan Kenzai Fair Ended in GreatSuccess
P2 Prospect of Business Conditions for OctoberDecember
P3 Market Outlook of Plywood
Establishment of Overseas Subsidiaries inPortland and Singapore
P4 JK Wooden Structure-Lignification GroupNEWS

Keiichiro Aoki

President
JK Holdings Co.,Ltd.

with receiving orders for materials and housing works
from the distribution, remodeling, and non-residentialbuildings markets.
As a result, the consolidated financial results for thefirst quarter showed net sales of 85.327 billion yen（increase by 3.2% compared to the same period of theprevious year）,and operating profit of 1.223 billion yen（increase by 4.1%）, ordinary income of 1.193 billionyen（increase by 0.4%）, increasing both in sales andprofits. The current net income for the quarter found
616 million yen（decrease by 2.3%）.
Our annual targets for the fiscal year ending in March
2019 shows net sales of 350 billion yen（increased by1.1% from the previous fiscal year）, operating profit of
5.2 billion yen（increased by 3.9%）, ordinary incomeof 5.0 billion yen（increased by 3.3%）, and current net
income of 3.0 billion yen（increased by 4.2%）that areattributable to the parent company shareholders.

a house, goodstorage design
is required
to create acomfortable living
space in Japan, of
which land priceis expensive
because of a large
population in thesmall sized land.
Actual products
were displayed
at the fair, giving
various ideas for solution forstorage to construction firms andbuilders.

The number of visitors was 22,000
and the sales exceeded 54.9 billion
yen at the fair, which was a great
success.

Bulls International No.52

2

area and to the north）and themetropolitan area except Tokyo
predicted a declining trend as awhole, but it is encouraging that
we have positive answers from 20
prefectures including major areas
such as Tokyo, Osaka, Aichi, andFukuoka.

SurveyProspect of BusinessCondition for
October-December<Demand Forecast byBuilders and Distributors>

Demand Forecast by Builders
00-2-2
-4-4

-5.4

-6-6

-7.3

-8-8

2016

-6.1

-7.0

-8.5
-9.0
-10
-10Oct-Dec
Apr-JunOct-Dec
2017

2017

Apr-Jun2018

Expectations for home remodelingand renovation among those
who reported their views arein a growing trend nationwide.
Customers’needs are diversified:seismic retrofitting after inspection,
insulation remodeling with highperformance building materials,
and renovation based on reviewingof their way of living. However,the budget per project is getting
lower. The report found out thatmany companies are struggling
with the delivery of materials tothe sites.
*The forecast（for October-December 2018）is the totaled results of the data gatheredfrom 3,000 client companies in Japan throughinterviews which took place from late-July to
mid-August in 2018.

Oct-Dec2018

Point0=business result in April-June,1992

Dealing Volume of Lumber

Demand Forecast by Distributors
2600

Laminated lumber

59-2-5.1-6.1

-6.2

-5.6

-5.5

-6.0

57

-6.3

56

-8-9.1-10 Oct-Dec

Apr-Jun2017

2016

Oct-Dec
2017

Apr-Jun2018

Precut lumber

58-3.7-4-6<Current States ofRemodeling Business>

According to the Ministry ofLand, Infrastructure, Transport
and Tourism, housing starts forJanuary-June 2018 totaled around
450,000 units, which were 95.1%of those in the previous year. By
use, those of owneroccupied houses was
97.0% of the resultsin the previousyear, rental houses
93.7%, and built-forsale houses 94.3%,-5.7
showing a smaller
figures in all the-8.1
sectors compared tothe previous year.
-9.1

Analyzing the prediction by area,
the builders and distributors inWestern Japan showed a tendency
to expect more demand. The
answers from Eastern Japan（Kanto2

According to sales forecasts bymain manufacturers, three sectors
other than wooden building
materials, which are plywood,
ceramics and insulation, andhousing equipment, predicted toexpand. Demand is expected to
grow in the sectors of plywood
for unstable factors in the balancebetween supply and demandin particular, building materialsof which performance is betterand more advanced, and housing
equipment with new products
released into the markets.

With the Tokyo Olympics Games
coming up, wooden-structuredbuildings as well as making use
of Japanese wood are increasingly
attracting interest, but theproblems of transportation costs
and labor shortage including
craftsmen are still unsolved. The
national government is promoting
eco-conservation and energy
saving in both new construction
and renovation of houses. Housing
has completely shifted to the trendof quality from quantity.

Demand forecasts for OctoberDecember 2018, which were reported
lately, found a recovery from -8.1
points in the previous survey（July-September）to -5.7 points
among builders’views and from-5.5 points to -3.7 points among
distributors’. While both builders
and distributors turned theirforecasts upward since the survey
before last（April-June）hit thebottom, the housing demand seems
to be on a gradual recovery trend.

2<Sales Forecasts by
Main Manufacturers>

LVL

55 Oct-Dec

Oct-Dec
2018

2016

Solid lumber

Apr-Jun2017

Oct-Dec
2017

Apr-Jun2018

Oct-Dec2018

Point100=all responses expect increase

Point0=business result in April-June,1992

Sales Forecast by Major Supplying Manufacturers（Oct-Dec 2018）
increaseover15％
Plywood（13firms）

14 ～ 10％

below10％level-offdecrease
below10％10 ～ 14％

over15％

0.0

6.6

25.0

60.5

7.9

0.0

0.0

0.0

1.3

17.5

42.4

30.0

6.3

2.5

0.0

1.8

25.9

50.0

21.4

0.9

0.0

House Equipments（9firms）

0.0

2.8

36.1

38.9

22.2

0.0

0.0

average

0.0

3.1

26.1

48.0

20.4

1.8

0.6

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

International No.52

Trend
Market Outlookof Plywood<Trend of Housing Starts>

Housing starts in July 2018
numbered 82,615 units, 99.2% of
the year-ago results, and the total
figure for January-June was 450,085
units, 105.1% of the previous year.

<Trend of Japanese plywood>
Japanese softwood plywood
production in July 2018 was267,799 cubic meters, 102.3% of theresults in the same month of theprevious year, whereas shipments
were 259,438 cubic meters. Thestock was 173,306 cubic meters,
showing a consecutive increase forsix months.
While the strong production has
been maintained by manufacturers,demand for Japanese softwood
plywood is predicted to support
the shipments toward the autumn
and the supply and demand will
be well balanced. Manufacturers
find many factors for higher costs
due to the stronger prices for raw
materials, and it is considered thatthe stable supply will continue inthe future.

Company
Establishment ofOverseas Subsidiaries inPortland and Singapore
The JK Holdings Group is putting
great efforts in promoting theoverseas business.
Japan Kenzai Co., Ltd. hasestablished a new overseassubsidiary in Singapore called
Interra JK Singapore. We aregoing to cultivate Asian markets,
which keep growing remarkably,in order to build a new mainstay ofour business.
Interra USA Inc. has opened abranch in Portland（OR）whereinternationalization is progressing
year by year with the increasing
number of those who have moved
not only from other cities inthe U.S., but also from foreign<Trend of Imported plywood>
Imported plywood arrivals in July
2018 were 218,409 cubic meters,
96.9% of the results in the samemonth of the previous year.
Looking at the arrivals by countryof origin, 81,021 cubic meters werefrom Malaysia（79.4% of the yearago results）, 62,971 cubic metersfrom Indonesia（103.8%）, and53,490 cubic meters from China（112%）.
The strong prices of imported
plywood in producing regions

Bulls

remain unchanged. A decrease
both in the local production
and arrivals in Japan would beconcerned once the rainy season
starts in October. It is difficult
to read the market developmentfrom the port inventories because
the arrivals of goods have notbeen matching for the demand
due to remarkable differences inproduction motivation the shipper
side shows depending on items.
Basically it is expected that thegradual rise in market prices willcontinue in the second half of theyear.

Wholesalers' Prices of Plywood in Tokyo
2500

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)］

2000

1500

1000

5000Apr 2018

May 2018

Jun 2018

Jul 2018

Aug 2018

Sep 2018

Overseas Business Network

USA /Seattle，Portland
Russia /Moscow,Vladivostok

China／Shanghai, Dalian, HongKong
Taiwan／Taichung, Taipei
Vietnam/ Ho Chi Minh city
●Malaysia ／ Miri

Indonesia ／Jakarta

countries. With the opening of thebranch, Interra USA Inc. plans toexpand its sales mainly focusing onraw housing materials.

Singapore

The JK Holdings Group has
developed its business in eight
countries and aims for further
expansion in the future.

3

4

Bulls International No.52

TopicsSales Expansion ofMDF in the U.S.
Interra USA Inc. exhibited MDF
as one of its major dealing items
at the International Woodworking
Fair（IWF）held in Atlanta,Georgia, U.S.A. on August 22 to25, 2018. The MDF（brand name:Customwood）is produced at theNew Zealand factory of Daiken
Corporation, and was displayed
at the booth of Richwood Inc.,
Interra’s strategic sales partner
for the item.
Richwood Inc. is a mid-sized
manufacturer of wooden furniture
for office use with a factory near
Chicago, Illinois. Its technicalcapabilities are highly valued inthe industry.

Exporting Wooden
HousesIn response to the growing interestin wooden buildings in Korea,
Butsurin Co., Ltd. exported wooden
houses using Japanese larch grownin Hokkaido. Butsurin procured
Japanese larch CLT produced byOkhotsk Woodpia, a cooperative
association, column and beams ofJK Wooden Structure-Lignification GroupNEWS（JK Timber Engineering Group）

President Mr. Remelts of Richwood Inc. in the center, President Mr. Tadakoshi of BoardCo., Ltd. to the right, Chairman Mr. Yoshida of JKHD Co., Ltd. to the left

Steelcase Inc., the nation's leading
manufacturer of furniture foroffices, has adopted partitions using
the MDF（Customwood）which
Interra USA sells, after testing thematerials for two years. Chairman
Yoshida made a courtesy visit tothe Richwood’s booth on August22, the first day of the exhibition.

spruce structural laminated lumber
manufactured by Miyamori Co.,
Ltd., decorative beams made fromJapanese larch, Japanese cypress
sills made by Innosho ForestryCo., Ltd., and others upon requests
from the Korean side.
The materials were processed at
Hokkaido Pre-cut Center, shippedfrom Tomakomai Port to Pusan
Port by containers, and used forthe construction project in theProvince of Gyeongsangbuk-Do.
The exported houses are one-story
structure covering an area of 24“tsubo”,using Japanese larch CLT
for a part of the wall. President
Tannaka of Butsurin says, "Taking
this as an opportunity, we would
expect our overseas business toexpand further."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
C 2018JK Holdings Publication Copyright○