Zeon elastomers business hit by market slowdown

TOKYO—Zeon Corp.'s elastomers business has reported weaker first quarter results, on sluggish automotive demand and plant shutdowns.

Net sales for the elastomers segment—comprised of the rubber, latex and chemicals units—fell 8 percent year-on-year to $433 million, according to financial results released July 31.

Sales volumes fell 8 percent to 147,000 metric tons, as all business units reported a decline in the quarter that ended June 30, Zeon said. Segment operating income for the three months fell 32 percent to $33 million, due, in part, to fluctuations in raw material prices.

Sales of rubber products fell 10 percent to $309 million, as volumes dropped 6 percent to 85,000 tons, the materials supplier continued.

The Japanese company attributed the lower volumes to a slowdown in business with the automotive and general industries.

Demand for rubber also was sluggish, both in Japan and globally, due to economic slowdown and U.S.-China trade disputes.

Revenue from latex materials rose 1 percent to $42.4 million, despite a 4 percent decline in volumes at 30,000 tons.

Sales volumes of elastomer chemicals fell 14 percent to 32,000 tons, leading to a 6 percent decline in sales at $86.7 million.

While volumes declined due to a plant shutdown, Zeon said the chemicals unit increased profitability through cost-reduction measures.