SWCC Showa Holdings to Advance Capital Investment to F2007

SWCC Showa Holdings enjoyed sales increase for electric wire and cable, seismic isolator and heat roller for office automation equipment in first half of fiscal 2006 ended September. The firm increases capital expenditure under the favorable business circumstances in order to achieve its 3-year management plan to fiscal 2007. Toshio Tomii, president of SWCC Showa Holdings explained current business conditions and management strategy to Japan Metal Bulletin.Mr. Tomii explained demand maintained very active for ultra high voltage electric cable in half year to September 2006 thanks to infrastructure reinforcement by Japanese and offshore power companies. He said that demand of winding wire was also firm for automobile, motor and transformer for consumer electronics and pole transformer used by power companies and that the subsidiary, Unimac continued full production of winding wire. As to industrial wire and cable, He pointed out the sales margin was much improved during the half year and 80-85% of copper price increase could be passed on the selling price.Among growth business areas, he said the sales of seismic isolator were remarkably increasing from 600 million yen in fiscal 2004 to 1.1 billion in fiscal 2005 and 2.7 billion yen estimated for fiscal 2006. He explained that demand of heat roller was very strong for low grade OA equipment in first half of fiscal 2006 and that the output capacity expansion is needed at Vietnam plant which started operation this spring.SWCC Showa Holdings announced in August the firm procures 5 billion yen of management fund by convertible debenture issue. Mr. Tomii said 3 billion yen would be applied to capital expenditure, 2 billion yen for growth businesses and the rest for cable related businesses. The firm plans to expend 500 million yen in fiscal 2006 and 2.5 billion yen in fiscal 2007. He explained the other 2 billion yen would be applied to operating costs when the firm is suffered from much cost expansion such for copper and sub materials with higher prices under active demand conditions. He said the firm had incurred 15 billion yen of additional operating costs in late 2 years.