Furukawa Electric and Essex Enter Technical Agreement Covering U.S.A., China and Europe

Furukawa Electric concluded a technical assistance agreement with Essex, the U.S.A. based major magnet wire maker and a subsidiary of Superior Essex, in May. Along the agreement, Essex produces and sells magnet wire of Furukawa Electric brand to the customers in the U.S.A., China and Europe while Furukawa Electric provides technical assistance to Essex and receives the royalty. Furukawa Electric aims to follow the demand growth for magnet wire, mainly adopted to automobiles, through deeper partnership with Essex who operates many magnet wire plants in these regions.

Before the technical assistance agreement, in the U.S.A., Furukawa Electric had commissioned magnet wire production to Essex and sold the products to Japanese automakers through Furukawa Electric’s U.S. sales subsidiary, American Furukawa. The same scheme OEM supply had also started in China a year ago.

Along the latest technical agreement, Furukawa Electric sold the assets of American Furukawa related to sales and distribution of magnet wire to Essex. Furukawa Electric and Essex entered the new technical agreement covering not only the U.S.A. but also China and Europe, along which Furukawa Electric provides technical know-how mainly for automotive enamel wire to Essex and receives the royalty. Furukawa Electric can follow the demand growth for magnet wire in these areas without establishment of new joint venture plants.

Furukawa Electric’s domestic production of enamel wire averaged 2,400-2,500 tonnes per month in fiscal 2010 ended in March 2011 while the production at the overseas main plant in Malaysia was 600 tonnes per month. The productions are expected to keep the almost same level in fiscal 2011 since automakers could recover their car outputs in the second half year.