Tokyo – Zeon Corp.'s elastomers business has reported a major drop in its results for the first quarter, ended 30 June, due to the weakening global economy which was hit by the “languishing US-China trade friction” and the outbreak of Covid-19.
The business unit – comprised of ‘rubbers’, latex and chemicals units – both sales and operating income decreased “drastically”, as a result of “sluggish demand” in the automotive and general industries.
The unit’s operating income went into negative territory at Yen100 million (€802,000), posting a 103% decline from Yen350 million reported in 2019, Zeon announced 31 July.
Overall elastomers sales, which represent more than half of total group revenue, fell 21% year-over-year to Yen37,1 billion, reflecting a 13% decline in volumes to 128,000 tonnes.
In the rubber segment, revenue dropped 25% year-on-year to Yen24,5 billion as volumes decreased 24% to 65,000 tonnes.
The segment was particularly hit by a decline in demand for both general purpose rubbers – mainly for tires – and speciality rubbers - for automotive and general industrial products. Sales prices also decreased, due to the falling prices of raw material, Zeon said.
Sales of latexes declined 27% to Yen330 million for the quarter, as volumes decline 8% to 28,000 tonnes during the three months to end of June. Here, demand fell in the cosmetics and general industry, while sales prices declined due to low raw material prices.
Sales volumes of elastomer chemicals remained flat at 35,000 tonnes, but net sales fell 12% to Yen810 million as prices were lowered amid weak market sentiments.