Nichiha USA exits residential exterior materials market due to unprofitability

Nichiha Corporation announced that its consolidated subsidiary, Nichiha USA, Inc., will withdraw from the general-purpose exterior material business for the residential market. The decision, made at a board meeting on October 6, 2025, affects operations at the Macon No. 1 plant and is expected to be completed by the end of December 2025.

The withdrawal stems from declining profitability, with the segment facing intense competition and reduced sales prices since 2023. Persistent issues with factory utilization and defect rates also contributed. In the fiscal year ended March 2025, the residential segment reported sales of JPY 10.4 bn but an operating loss of JPY 6 bn. For the first quarter of the fiscal year ending March 2026, sales were JPY 1.9 bn with an operating loss of JPY 4 bn.

Nichiha will record an impairment loss of approximately JPY 3 bn on fixed assets and other temporary expenses related to this withdrawal as extraordinary losses in the current consolidated fiscal year. Nichiha USA will now focus its resources on the commercial market and premium exterior materials for the residential market to drive future growth in the U.S.