Furukawa Electric Discusses with Chinese Fabricator to Sell FMW’s Equity

Furukawa Electric announced on Thursday the firm started a discussion with Chinese copper alloy product maker to sell 60% equity of the wholly-owned subsidiary to produce phosphor bronze strip in China, Furukawa Metal Wuxi (FMW). Furukawa Electric aims to conclude a share sales contract by the end of September 2010. The firm expects for better cost competitiveness and wider sales network by making FMW a joint venture.

Furukawa Electric is talking with Anhui Xinke New Materials (AX) of China. AX produces and sells copper and copper alloy fabricated products with 1,980 employees, listed on Shanghai Stock Exchange. Furukawa Electric advances the discussion based on 3 terms; to keep the quality of FMW’s product and service quality, to maintain employment and treatment for FMW’s employees and to increase FMW’s capital after AX enters FMW’s management.

FMW was established in Wuxi in December 2001 and started commercial operation in June 2004 to produce phosphor bronze strip and plated copper strip applied to connector pins and electronic components. The capital is 5 billion yen. The employees are 196 and the output capacity is 12,000 tonnes per year.

FMW has established integrated production system, including copper melting and casting processes, and has supplied the products mainly to Japanese makers’ plants around Wuxi. However, FMW’s financial result has stayed in the red.