Toyo based special steel maker, Kotobuki Industries, which has main production site in Kure, Hiroshima, started study to sell Kitakyushu plant as a part of revitalization of bankrupt subsidiary, Asia Special Steel in Kitakyushu. Kotobuki Industries tries to focus the production into Kure plant.
Kotobuki Industries and POSCO’s group company launched Asia Special Steel in 2007. The joint venture makes steel ingot for mainly South Korean forging makers. However, the joint venture stopped the operation in earlier the month due to higher yen rate and lower won rate. The firm applied voluntary bankruptcy to local court. Kotobuki Industries’ Kitakyushu plant makes large castings for shipbuilders and heavy electric machinery makers based on melting steel from Asia Special Steel. After Asia Special Steel’s bankruptcy, Kitakyushu plant has to seek new future plan. The plant can keep the operation based on more than 1,000 tonnes of steel ingot stock through late 2012. Kotobuki Industries tries to seek potential buyers for Asia Special Steel and Kitakyushu plant. Kotobuki Industries guarantees around 16.7 billion yen of debt by Asia Special Steel. Local financial institutes intend to support the reorganization but the group has to rebuild the business by reducing the heavy debt. Kotobuki Industries tries to reduce the debt by selling the plant along with idle assets in Tokyo and Kure.