Impact of the Iran War on Japan's Bathroom Manufacturing Sector

Toto Ltd., a prominent Japanese toilet manufacturer, has suspended new orders for its prefabricated bathrooms due to a significant material shortage linked to the ongoing conflict in Iran. The company informed its business partners of this decision on April 10, 2026, with no clear timeline for when orders might resume. This suspension specifically affects prefabricated and modular bathrooms, which are essential fixtures in Japanese apartments and hotels. Following the announcement, Toto's shares experienced a notable decline of 7.2% in Tokyo, marking the largest drop in a year.

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The material shortage is primarily attributed to disruptions in the global oil supply chain caused by the Iran war. Japan relies heavily on the Middle East for its crude oil, sourcing over 90% of its supply from the region. Additionally, the country depends on the Middle East for nearly 45% of its naphtha, a critical feedstock for plastic production. Toto's representative stated that the procurement of raw materials has become "extremely unstable" due to the conflict, particularly affecting the availability of organic solvents used in the coatings of its modular bathrooms.

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The impact of the material shortage extends beyond Toto. Other Japanese manufacturers, such as Takara Standard Co. and Lixil Co., have reported similar challenges. Takara Standard noted that tensions in the Middle East are destabilizing its naphtha-related material supplies, leading to a 6.6% drop in its shares—the most significant decrease since August 2024. Lixil Co. also acknowledged facing "unavoidable" supply restrictions and price increases for materials like resins and aluminum.

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Japanese Prime Minister Sanae Takaichi has attempted to reassure the public, stating that Japan has sufficient naphtha supplies to meet at least four months of demand. However, the country's petrochemical association has indicated that it is actively seeking naphtha supplies from regions outside the Middle East as procurement becomes increasingly challenging.

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Critics argue that the reliance on Middle Eastern oil exposes Japan to geopolitical risks, highlighting the need for diversification in energy sources. The ongoing conflict has underscored vulnerabilities in the supply chain, prompting calls for a reassessment of Japan's energy strategy to mitigate future disruptions.

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While the government maintains that there are adequate naphtha supplies, some industry experts express concern over the long-term sustainability of these reserves amid ongoing geopolitical tensions. There is a lack of consensus on the potential duration of the material shortages and their broader economic implications for Japan's manufacturing sector.

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• “The procurement of raw materials both domestically and internationally has become extremely unstable” — Toto Ltd. Representative

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• “said in a Monday statement that Middle East tensions are destabilizing its naphtha-related material supplies.” — Takara Standard Co. Statement

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• “released a similar statement on Friday, saying it’s dealing with “unavoidable” supply restrictions and price increases for materials like resins and aluminum due to the war.” — Lixil Co. Statement

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The situation remains fluid, with ongoing developments in the Iran conflict likely to further impact Japan's manufacturing landscape.

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