Bull s
JK Holdings
Quarterly ReportInternationalJanuary,2023
CONTENTS

69No.

P1 JK Holdings overview of 2Q business resultsfor year ending March 2023
P2 Business Prospect for January ‒ March 2023
P3 Market Outlook of Plywood
KEY TEC Concluded Exclusive Distribution
Agreement with Pollmeier

P4 Regional Revitalization Business “YOKAYOKA
Project”
JKHD opened Institute for Future Living TokyoShowroom

JK Holdings overview of 2Q businessresults for year ending March 2023
Movement restrictions due to the COVID-19 pandemic arebeing eased in Japan, but the supply chain disruptions
caused by the constraints imposed by the prolonged Russian invasion of Ukraine and the lockdown for maintaining
the zero-corona policy in China have not yet been resolved.
In addition, with the widening interest rate gap between
Japan and the U.S. and the rapid depreciation of the yen,business prospects have become more uncertain.
In the housing industry, rental and built-for-sale houses aregoing well, but owner-occupied and wooden houses, which
are our group's forte, are declining year-on-year. This is a
cause for concern on the future demand. Meanwhile, material items such as lumber and plywood are turning from abullish market to a bearish market.

Keiichiro Aoki

President
JK Holdings Co.,Ltd.

\HDU RUGLQDU\LQFRPHZDVELOOLRQ\HQ XS and net income attributable to shareholders of the parent
FRPSDQ\ZDVELOOLRQ\HQ XS Under these circumstances, we held the “Japan KenzaiFair” at Tokyo Big Sight in August 2022, which was for the$VGHVFULEHGRXUVHFRQGTXDUWHUUHVXOWVZHUHH[WUHPHO\strong, maintaining the momentum from the previousquarter. As for the future, however, business environments
remain highly uncertain due to a variety of risk factors,
including COVID-19, the situation in Ukraine, price trends,¿UVWWLPHLQWKUHHDQGDKDOI\HDUV7KHH[KLELWLRQVLQRWKHU
locations have resumed as well, and our sales activities

DQGWKHRXWORRNIRUH[FKDQJHDQGLQWHUHVWUDWHV7KHKRXVing industry will also be affected by these factors, either

have been stimulated.
$VDUHVXOWRXUFRQVROLGDWHG¿QDQFLDOSHUIRUPDQFHIRUWKH
VHFRQGTXDUWHURIWKH¿VFDO\HDUHQGLQJ0DUFKZKLFKdirectly or indirectly. A particular concern is the trends inwooden material prices, which are turning from a risingmarket to a falling market, and the decline in housing
GHPDQGZKLFKKDVEHHQ¿UPVRIDU

EURNHWKHSDVWUHFRUGVLQERWKVDOHVDQGSUR¿WVZDVDV
follows.

Our group, as it has always been, will continue to assess the1HWVDOHVURVHE\\HDURQ\HDUWRELOOLRQ\HQVKRZLQJDVLPLODUJURZWKWRZKDWZDVLQWKH¿UVWTXDUWHU3UR¿WVPDLQWDLQHGDGRXEOHGLJLWLQFUHDVHIRUWKH

outlook for change and cope with various issues at handincluding inventory reduction in a timely and appropriatemanner, making the most of our comprehensive strengthand mobility. Moreover, we will ensure the implementation

ZKROH¿QDQFLDO\HDUDOWKRXJKSUR¿WPDUJLQVDUHGHFOLQLQJDWSUHVHQWGXHWRKLJKHUSXUFKDVHSULFHV6SHFL¿FDOO\RIVSHFL¿FPHDVXUHVWKDWZLOOEHGHYHORSHGVXFFHVVLYHO\under our new medium-term management plan “Further

RSHUDWLQJLQFRPHZDVELOOLRQ\HQ XS\HDURQ

Growth 24” in order to be prepared for the future.

Bulls International No.69

2Survey
Business Prospect forJanuary ‒ March 2023
〈Demand Forecast byBuilders and Distributors〉+RXVLQJVWDUWVIRU-DQXDU\WR6HSWHPEHUWRWDOHGXQLWVZKLFKis 101.0% compared to a year ago.
Rental houses and single-family homes
for sale have been increasing year-onyear every month since the beginningof this year. On the contrary, owner-occupied houses have seen double-digit
declines since June, and struggle in theyear-to-date total as well with 90.2%
compared to a year earlier.

In the sales forecasts, the majority of
plywood manufacturers had “negative”
YLHZV¿QGLQJPRUHVWDJQDWLRQ2QWKH
other hand, the forecasts by manufacturers of wooden building materials andhousing equipment saw more “positive” views. The different perspectives
can be seen in the forecasts becausethere is a continuing
shortage of construction
workers for wet-areaproducts.

Demand Forecast by Builders
100-201.5-30-40-50-60-9.0 -10.0-15.0 -16.0

-21.1

-34.5
-40.6

-46.0

Installation of renewable energy facilities in buildings shall be mandatory inTokyo, which is agreed and viewed
IDYRUDEO\E\RIWKHUHVSRQGHQWVAs efforts for decarbonization andrenewable energy in each municipality
will be increasingly promoted in thefuture, our company should be preparedto handle solar panels and high-insulation products.

〈Sales Forecast by Leading〈Manufacturers〉

Under the circumstances, we conducteda survey about business demand prosSHFWVIRU-DQXDU\WR0DUFK%RWKVPDOOEXLOGHUV FRQWUDFWRUVDQGRWKHU

-10have“large” or “adequate” inventories.
$ORWRIEXVLQHVVHVKDYHVXI¿FLHQW
inventories more than enough to meettheir needs, indicating a sign of oversupply and stagnant market conditions.

building companies) and distributors
SUHGLFWHGDVPDOOHUQHJDWLYHLQGH[WKDQthe previous survey for the previous
TXDUWHU7KHQHJDWLYHLQGH[HVH[SDQGHG
LQVQRZ\DUHDVVXFKDV+RNNDLGRDQG
Tohoku, but decreased in some otherareas such as Kanto and Shikoku. As
people are becoming more conscious ofsaving money due to the rising pricesof groceries and daily necessities, wewill keep a close eye on how this willaffect the housing industry in thefuture, which is becoming more uncertain.

〈Various Topics〉
As for inventory condiWLRQVQHDUO\RIWKH
surveyed companies
responded that theyThe current status of home remodelingsees a slight increase nationwide over
the results in the previous year although
it varies by area. Under such conditions, the Cabinet approved a budget
proposal for the creation of a new
subsidy program to strengthen support
for energy conservation in housing. The
VXEVLG\ZKLFKLVH[SHFWHGWREHLQDlarge amount, will be available not only
for new construction but also for remodeling projects for energy-saving
houses. It is important for us to takeadvantage of the program to capture thedemand for remodeling while owner-occupied housing starts at a sluggishpace.

-70-80 Jan-Mar.
2021

Jul-Sep.
2021

Jan-Mar.
2022

Jul-Sep.
2022

The forecast survey for January to March, 2023 is based on the totaled data
gathered from 3,000 client companies in Japan through the internet, which
took place from late-October to mid-November, 2023.

Jan-Mar.
2023

Point0=business result in April-June,1992

Dealing Volume of Lumber

Demand Forecast by Distributors
100

-13.0

-10
-20

-50
-60

60

-15.6 -19.1

-26.2

-30
-40

65

-1.3

55

- 20.5-43.1

Laminated lumber
Solid lumber
Precut lumber
LVL

50-38.045-48.540-70-80 Jan-Mar.
2021

Jul-Sep.
2021

Jan-Mar.
2022

Jul-Sep.
2022

35 Jan-Mar.

Jan-Mar.
2023

2021

Jul-Sep.
2021

Jan-Mar.
2022

Jul-Sep.
2022

Jan-Mar.
2023

Point100=all responses expect increase

Point0=business result in April-June,1992

Sales Forecast by Major Supplying Manufacturers（Jan-Mar. 2023）
increase

Plywood（12 ﬁrms）
Wooden Building Materials（10 ﬁrms）
Ceramic/Heat Insulation（15 ﬁrms）
Housing Equipment（9 ﬁrms）
averageover15％14 〜 10％

below10％

7.7

0.0

7.7

6.3

6.3

0.0

level-oﬀ

decrease
below10％10 〜 14％

over15％

7.6

15.4

46.2

15.4

31.3

24.8

18.8

12.5

0.0

0.0

20.8

41.7

33.3

4.2

0.0

0.0

10.0

25.0

35.0

20.0

10.0

0.0

3.5

4.1

21.2

27.3

21.9

18.2

3.9

Bulls International No.69

Trend
Market Outlookof Plywood〈Trend of Japanese Plywood〉
Japan’s production of softwood plyZRRGLQ2FWREHUZDV
FXELFPHWHUV RIWKHVDPHPRQWK
in the previous year), and shipment ofWKHLWHPZDVFXELFPHWHUV ,QYHQWRULHVZHUH
FXELFPHWHUV  The Japanese softwood plywood market is focused on buying for current
use, while anticipatory demand hascompletely subsided. There is no senseof product shortage in either distribution route of wooden building materials
or precut, and the condition is calm.
6LQFHZHGRQRWH[SHFWWRVHHVLJQL¿cant housing starts in the future, thepurchase for immediate requirements
will continue.

〈Trend of Imported Plywood〉
Japan’s import of plywood in OctoberZDVFXELFPHWHUV 
of the same month in the previousyear), which decreased 2.4% from201,117 cubic meters in the previous
PRQWK%\FRXQWU\RIRULJLQ
FXELFPHWHUV  FDPHIURP0DOD\VLDFXELFPHWHUV  
IURP,QGRQHVLDDQGFXELF
PHWHUV  IURP&KLQD
The cumulative port arrivals fromJanuary through October have been
about 104.4% year on year. There is arelatively larger number of incomingfrom Indonesia, but that from Malaysia
LVH[SHFWHGWRPDLQWDLQWKHGRZQZDUG
trend for the future.
The port warehouses are almost fullnationwide, but the situations have
improved in the Western Japan regions
more than before. It is important to notethat the improvement in warehouseconditions is not due to an increase in
shipments, but to a decrease in port
arrivals. We should pay close attention
to future demand trends.
Meanwhile, ship demurrage has been
an ordinary practice in the Northern
Japan regions because of shifted peakof vessel arrivals, as well as seasonal
factors. As cargo movements in theregions are going to slow down fromQRZRQWKHVLWXDWLRQLVH[SHFWHGWREH
the same for the time being. WhileIXWXUHGHPDQGLVGLI¿FXOWWRSUHGLFWLW
is highly likely that orders to local
suppliers would continue to be on atemporary basis.

Wholesalersʼ Prices of Plywood in Tokyo

yen/sheet

4,500

Fires broke out at major manufacturersin October. It is likely to take years for
supply capacity to recover, but themarket is in a wait-and-see condition
with no anticipatory demand occurring.
As Japanese manufacturers' inventories
are gradually increasing, and even if
there is a reduction in supply due to the¿UHVLQYHQWRULHVDUHOLNHO\WRLQFUHDVH

4,000

Although manufacturers are trying tomaintain prices by adjusting supply, it
is considered that they are approaching
DGLI¿FXOWVLWXDWLRQLQUHDOLW\

1,500

Structural Use 12mm JAS F4☆
Concrete Form 12mm JAS
Softwood Plywood for Structural Use 12mm JAS F4☆
Softwood Plywood for Structural Use Neda-non 24mmwith tongue JAS F4☆

3,500
3,000
2,500
2,000

1,000

Jan.
Feb.
Mar.
Apr.
May
Jun.
Jul.
Aug.
Sep.
Oct.
Nov.
Dec.
2022 2022 2022 2022 2022 2022 2022 2022 2022 2022 2022 2022

Topics 1

KEY TEC Concluded Exclusive Distribution
Agreement with Pollmeier
KEY TEC Co., Ltd. has acquired
H[FOXVLYHULJKWVWRVHOO3ROOPHLHU¶VKLJKVWUHQJWK/9/ ODPLQDWHGYHQHHUOXPber) of spruce and beechwood forJapan. Pollmeier Massivholz is a manufacturer of lumber and LVL in Creuzberg, Germany. Mr. Stephan Fritsch,
Director Sales and Logistics ofPollmeier, visited KEY TEC on October 24, 2022, and concluded the agreement.

'XHWRWKHLPSRUWDQGH[SRUWUHVWULFtions on Russian lumber, KEY TEC’sproduction and sales of high strength/9/KDGVKDUSO\GHFUHDVHG+RZHYHU
clients demand the product to constructlarge-scale buildings such as non-residential buildings. So, KEY TEC wasmaking efforts to procure alternativematerials. With this agreement,
Pollmeier’s LVL was added to the listof alternatives.

Pollmeier’s Director Sales and Logistics visited
KEY TEC3

4Bulls International No.69

Topics 2Regional Revitalization Business “YOKAYOKA Project”
Associates”.
The goal is to create jobs, stimulate theeconomy, and present an attractiveAsakura City by local contractors
operating construction businesses
locally and spending money in the localcommunity.
Opening Ceremony

In Asakura City, Fukuoka Prefecture,having a population of about 51,000
people, “YOKAYOKA Project” hasstarted. “YOKA” has two meanings inFukuoka dialect: goodness and good
KRXVH$LPLQJWRUHYLWDOL]HWKHDUHDVL[companies of local builders formed aPresident Aoki of JK Holdings addresses
at the Opening Ceremony

group. Though they are originallyrivals, they are working together underthe banner of development throughfriendly competition. Their concept is³*RRG3HRSOH*RRG+RXVHVDQG*RRG

Housing exhibition site

JKHD opened Institutefor Future Living Tokyo Showroom
2Q2FWREHUµ-.+',QVWLWXWHIRU
Future Living’ was opened in Living
Design Center OZONE in Shinjuku.
The facility aims to propose spaces
where good products of various makers
are cross bred, and to improve theEXVLQHVVRI-.+ROGLQJVIURPµSURGXFW
distribution’ to more than that. Theshowroom is operated jointly by JK+ROGLQJ¶VJURXSFRPSDQLHV7VXVKRCo., Ltd., KEY TEC Co., Ltd., andJapan Kenzai Co., Ltd.
One of the highlights is the display oforiginal products, such as wall-mountHGVKRZHUKHDGVVSHFL¿FDOO\GHVLJQHG
for pets. The company aims to create
a“happy space” for pets by proposing

7KHSURMHFW VH[KLELWLRQVSDFHLVD
IRUVDOHKRXVLQJH[KLELWLRQVSDFH7KH
EXLOGLQJFRPSDQLHVVHOOWKHH[KLELWHG
houses in a limited time and move toRWKHUORFDWLRQV(DFKRIWKHVL[FRPSDnies built unique houses and has created an attractive town.

EXLOGLQJPDWHULDOVIRUSHWV HVSHFLDOO\dogs), while staying close to pet owners’ concerns.
Furthermore, products that cannot beplaced in the showroom are proposed inA monitor and a pet-friendly sofa in the showroom

Topics 3
the monitors to meet the needs ofvarious visitors. Since advance reservations are available, the needs of theYLVLWRUVFDQEHLGHQWL¿HGLQDGYDQFH
and proposals can be made in line withthose needs.

Stylish wet-area products

Wood Land Tower 1-7-22 Shinkiba Koto-ku,Tokyo 136-8405 Japan
Phone +81-3-5534-3800 Fax +81-3-5534-3835
URL https://www.jkhd.co.jp
C 2023
JK Holdings Publication Copyright○