Suzuki Metal Industry Organizes Optimal Global Network for 3 Years

Suzuki Metal Industry tries to establish optimal production network in Japan and at overseas and to improve debt/equity ratio to below 0.5 during a medium term of next 2-3 years. The firm aims to enhance global businesses through utilization of its group companies, that are Suzuki Garphyttan and Thai Special Wire (TSW), while to strengthen competitiveness of domestic businesses.

Suzuki Metal Industry successfully posted much higher sales and profits for nine months of April-December 2010 compared with the same period of fiscal 2009. The group sales increased along car market growth in emerging countries. Stainless steel sales were also favorable. Additionally Suzuki Garphyttan’s sales and profits fully contributed to the parent company’s consolidated results.

Suzuki Garphyttan continues to enjoy favorable sales of valve spring wire to European and U.S. automakers since the automakers are aggressively increasing car productions for emerging countries. Suzuki Garphyttan adds a production line to an existent line in Suzhou, China with several hundred million yen capital expenditure.

Suzuki Metal Industry expects for healthy sales and profits growth for next 3 years when global car production is forecasted to maintain high increasing rate. Meanwhile, in Japan, demand for spring wire levels off at 80% of the pre-shock level or 60% for prestrest concrete steel wire. Domestic operations need to be leveraged.

Steel wire consumers of automotive industry require Suzuki Metal Industry to increase local product supply at overseas. Suzuki Metal Industry seeks optimal production network in Japan and at overseas, including Suzuki Garphyttan and TSW, considering each site’s capacity or currency exchange rate.

Suzuki Metal Industry also plans to improve its balance sheet by debt reduction in a medium term. Debts increased due to acquisition of Suzuki Garphyttan and TSW. The firm aims to lower D/E ratio to below 1.0 by the end of March 2012, which was 1.1 at the end of December 2010.