Furukawa-Sky Aluminum to Improve Cash Flow

Furukawa-Sky Aluminum Corporation announced on Wednesday the firm adopts a new finance scheme for the primary aluminium ingot import within 2007 to improve its cash flow and reduce the interest-bearing debts. Furukawa-Sky Aluminum purchases primary aluminium ingot directly, not via trading houses. Recently the firm became suffered from worse cash flow since large operating capital is spared for material procurement due to the upsurge of primary aluminum price. Furukawa-Sky Aluminum will be presented a total finance scheme by financial institutions for inventories, receivables and exchange contracts emerging in primary aluminium procurement. This is the first case that Japanese maker introduces such a finance scheme for metal ingot procurement, said the firm.Furuakwa-Sky Aluminum purchases 45% of the total primary aluminium consumption by itself while 55% is supplied by the rolled aluminium product users. The firm purchases primary aluminium at approximately 15,000 tonnes per year. The procurement cost has recently expanded since primary aluminium price at London Metal Exchange hit above US$ 3,000 per tonne or domestic ingot price exceeded 400 yen per kilogram. The firm decided to introduce a new finance scheme co-developed by Mizuho Corporate Bank and Tokyo Leasing in order to improve the cash flow. Furukawa-Sky Aluminum expects the firm can take better interest rates and reduce the inventory volume in any metal ingot procurement than via trading houses.