Sankyo-Tateyama, Nippon Light Metal Agree Comprehensive Alliance

Sankyo-Tateyama Holdings and Nippon Light Metal announced on Friday they agreed for comprehensive alliance for construction materials. They launch joint committee to seek opportunity for original equipment manufacturing, joint procurement, logistics system sharing and joint cost cutting. They expect the annual 10 billion yen level of cost cutting for the rolled aluminium operating subsidiaries. They try to improve the cost structure, especially for housing materials through the alliance. They expect cost down by 5 billion yen from OEM, by 4.5 billion yen from joint procurement and 500 million yen from logistics. They focus on better cost structure through the partnership while they try to keep stand alone entities without merger. Japanese aluminium construction materials industry is suffered from higher aluminium ingot price and energy cost along with excessive competition. The industry is also suffered from very slow building market after new building standard law started in June 2007.