Toho Titanium Eyes Sponge Titanium Output Record in F2011

Toho Titanium posted consolidated operation profit of titanium business at 105 million yen for April-June, which returned into the black for the first time in 6 quarters when the sales of sponge titanium and titanium ingot increased. The firm raised operation ratio of Wakamatsu and Chigasaki plants to respond demand expansion. The firm announced new investment plan.

Mr. Akira Kurushima president of the firm explained the demand continues recovering from last year and supply remains tight. Mr. Kurushima told first new Boeing 787 is expected to be delivered to All Nippon Airways in September after three-year delay. Mr. Kurushima said the demand recovered.

Mr. Kurushima explained the firm is producing sponge titanium at 750 tonnes per month in Wakamatsu plant since April and is increasing the production in Chigasaki plant from 810 tonnes in January. The total output is expected to increase by about 50% to 10,500 tonnes for April-September from the same period last year.

Mr. Kurushima described Wakamatsu plant plans to be full capacity operation at 1,000 tonnes per month after October and Chigasaki plant plans to produce 1,100 tonnes per month from December. The firm can achieve original plan of sponge titanium output at 22,800 tonnes in fiscal 2011 ending in March 2012, Mr. Kurushima said. The firm will renew sponge titanium output record of 14,800 tonnes in fiscal 2010 to increase the output by over 50% in fiscal 2011 from fiscal 2010.

As for risk, Mr. Kurushima emphasized high yen exchange rate and higher titanium ore cost. The firm apprehends titanium ore price is raised in next term price negotiation at the end of 2011. Mr. Kurushima forecasts titanium price is maintains high level though the price is adjusted by expanded supply capacity in the future. Mr. Kurushima said the firm should consider multiphase measures for purchase of titanium ore.

Mr. Kurushima accounted there is some measures to increase source of titanium ore, increase ratio of long contracts or to invest mine, but these measures is hypothetical speaking.

Mr. Kurushima explained the firm invested at 9 billion yen to Wakamatsu and Yahata plants, expands sponge titanium production capacity by 30% in Wakamatsu plant and is working on schedule, and starts full operation in April 2012, while installs melting furnace to produce ingot in Yahata plant and increases production capacity by 10,000 tonnes per year.

As for new technology developed with Nippon Steel, Mr. Kurushima expounded weak point of titanium is long lead time compared with stainless steel or copper alloy products, however, new technology can eliminate breakdown process, which reduce the thickness of large section titanium ingot, and the firm can shave lead time of thin sheet by about 20%.