Showa Denko Expands Capex for Aluminium Business in 2007

Showa Denko plans 17.4 billion yen of annual capital expenditure for its aluminium business in 2007, which increases by 91.2% compared with 2006. The firm invests several billion yen to improve productivity of aluminium melting and casting processes at Oyama plant located in Tochigi Prefecture, Japan, including renewal of the melting furnaces for extrusion products toward this summer.Showa Denko invested 9.1 billion yen for its aluminium business in 2006, which almost equaled to 9 billion yen of the depreciation. In 2007 the planned capex widely exceeds 9.2 billion yen of annual depreciation. The firm applies the investment mainly for renewal and maintenance of productive equipment to improve product quality and cost competitiveness.The firm expects 800 million yen of cost down in its aluminium extrusion business this year by productivity improvement, especially renewal of the melting furnaces for the aluminium casting process. The firm could achieve 800 million yen of cost down in 2006.Showa Denko group plans total 200 billion yen of consolidated capex through 3 years to 2008, 60% of which would be applied to growth businesses. For the aluminium business the firm plans about 22 billion yen capex toward 2008 in order to expand output and sales of high value added products.