The business results of Kanto Denka Kogyo, a manufacturer specializing in fluorine type specialty gas, have taken a turn for the better. In February of this year the company announced the second upward revision of its financial closing for the term. Since the previous respective announcements there has been an increase in sales of 400 million, and an increase in operating profit of 1.3 billion and an increase in ordinary profit of 1.3 billion, with an increase in net profit of 1.3 billion. The company has implemented a major upward revision of profit. As for the reasons for this, the company noted the effect of
an increase in sales and a revision of the prices of the specialty gases handled by the Fine Chemicals Division of the company and used for semiconductors and LCDs.

Along with the slump in the semiconductor industry up to last year, gas prices were falling because of a surplus in the supply of gas, mainly for nitrogen trifluoride. According to one person involved in the industry, comparing the prices of nitrogen trifluoride and tungsten hexafluoride in 2005 and 2013 shows that they have dropped by about half. The surplus in supply was especially very evident in 2010 and 2011, and it is said that the prices dropped 5-15% in a period of 2 years. At Kanto Denka Kogyo too, because of a worsening of profitability, in March of 2013 a restructuring was carried out involving 72 employees, equivalent to 10% of its entire workforce.

After that, 1 there were some producers overseas which got out of the nitrogen trifluoride business due to a worsening of business performance. In addition, the operational ratios of plants in Korea, Taiwan, and China sharply rose due to the good showing on the part of smartphones, so that the surplus in the supply of NF3 and WF6 vanished, with a turnaround resulting in a shortage. Although Kanto Denka Kogyo, where sales of specialty gas abroad account for just over 50% of total sales, coped with the situation by putting its Shibukawa plant into full operation, the shortage in supply did not let up. As of July of last year, the price of NF3 went up by 20% and WF6 went by 30% as of October. Regarding the negotiations for this price hike, a spokesperson for the company stated that by February of this year all of the users were covered by the increase, and during the period of January-March of this year in terms of profit, the Fine Chemicals Division anticipated an improvement in profit and as of the third quarter revised the outlook upward for the entire year.

In contrast, from the users the opinion was that, “If there is a shortage in supply, you can increase production, can’t you?” Under the current circumstances, while the company does not have any plans for creating new facilities or for expansion, it will be watching the situation and make a judgement, examining locations, including Japan.