SEI Establishes Steel Code JV with South Korean Tire Reinforcing Material Maker

Sumitomo Electric Industries (SEI) announced on Friday the firm establishes a joint company of steel code manufacture for tire in Thailand in January 2011 in cooperation with Hyosung, South Korean major tire reinforcing material maker. At the same time, SEI acquires 30% shares in Hyosung’s subsidiary in China. Hyosung is the world largest tire reinforcing material maker for synthetic which produces steel code at 4,850 tonnes per month, almost the same output volume as SEI. This is the first integrated steel code plant at overseas for SEI.

The joint company’s capital fund is about 3 billion yen. SEI holds 70% shares and sends president and two board members. The joint company will start operation in January 2012. The total investment is planned at US$ 73 million for plant construction. The annual revenue is estimated at about 5 billion yen in 2014. The production volume is scheduled at 3,000 tonnes per month with 400 employees.

SEI will acquire 30% shares in Hyosung’s subsidiary in China with at about 800 million yen in January 2011. The subsidiary plans annual revenue at about 4 billion yen and the sales volume at about 2,000 tonnes per month in 2011.

SEI produces steel code at 4,500 tonnes per month in Tochigi works, Japan and processes steel code into wire at 350 tonnes per month in Indonesian subsidiary.