Showa Denko to Launch New Rare Earth Magnetic Alloy Plant in China

Showa Denko announced on Thursday the firm builds second Chinese plant in Ganzhou, Jiangxi to make rare earth magnetic alloy for around 1.7 billion yen. The firm establishes joint venture with Tokai Trade of Japan, Chinese rare earth mineral producer, Ganzhou Qindong Industrial and Ganxian Hong Jin Rare Earth to start operation with annual 2,000 tonnes in second half of 2007. The firm expects the plant will reach full production in 2008. The firm tries to procure dysprosium and terbium stably, which are additives for main materials of neodymium to improve the heat resistance of magnet. Showa Denko controls 80% of the joint venture, Ganzhou Zhaori Rare Earth New Materials with 900 million yen of capital with 10% share by Tokai Trade, 5% by Ganzhou Qindong Industrial and 5% by Ganxian Hong Jin Rare Earth. They plan the joint venture with 70 of employees posts 4-5 billion yen of annual sales. Showa Denko established Baotou Showa Rare Earth Hi-Tech New Material with local firm in Inner Mongolia in 2002. The first plant with 1,000 tonnes of annual output operates at full capacity to meet growing demand for hard disc drive and automotive electronic devices. The rare earth supply condition is getting tough when China, which produces 90% of world output of rare earth materials, increases the consumption and reduces the output. Showa Denko tries to secure dysprosium and terbium stably through the new joint venture while the firm established Baotou Showa Rare Earth Hi-Tech New Material to secure the main material of neodymium for rare earth magnet. Showa Denko with 30% of Japanese market share can strengthens the magnet alloy business.