Toda Kogyo, the Hiroshima-based chemicals maker known for iron oxide pigments and magnetic materials, is walking away from a Chinese joint venture it helped build a quarter-century ago. The company's board resolved on July 16 to sell its entire 20.7% stake in Zhejiang Huayuan Applied New Materials, a pigment maker it backed in 2001, to Deqing Hailuokesi Enterprise Management, a subsidiary formed in June by its co-investor Zhejiang Shenghua Holding Group. The price is 148mn yuan, or about ¥3.48bn.
Shenghua already controlled 56.48% of Zhejiang Huayuan; taking Toda Kogyo's shares hands it outright ownership. Toda Kogyo says giving its partner full control will speed decision-making and strengthen the venture against an increasingly crowded pigment market. The company plans to keep buying pigments from Zhejiang Huayuan for its own Japan-based coloring business regardless of the ownership change.
The venture is not struggling. Zhejiang Huayuan reported ¥20.66bn in sales and a ¥277mn net profit for the year to December 2025. Toda Kogyo is selling anyway, saying it wants to redirect resources toward what it calls growth areas: magnet and dielectric materials for mobility and AI applications, plus a newer push into environmental materials.
The contract is due to be signed on July 22, with the share transfer expected in early September, subject to Chinese regulatory approval. Toda Kogyo says it is still assessing the effect on its results for the year to March 2027 and will disclose further details if the impact becomes material.