Nippon Denko Increases High Carbon Ferromanganese and Other Alloy Production

Nippon Denko starts designing of its new 3-year management plan starting in 2011. The firm postponed the start of its 3-year management plan initially scheduled to launch in 2009. Now the firm restarts the mid-term growth strategy in response to the market recovery. The plan designing will complete in autumn 2010, eyeing the expansion of both the ferroalloy business and other businesses.

Mr. Yoichiro Mitsui, president of Nippon Denko, pointed out the key point is the mid-term growth of the businesses other than ferroalloy. The most important project is the expansion of second battery materials to follow the growth of electric car market. The firm aims to increase the profits of zirconium, ferroborron, chemical products and environment systems other than the ferroalloy business.

Nippon Denko’s operating profit was 400 million yen except for the ferroalloy business in a full business year ended in December 2009, which accounted for 52% of the total profit and increased by 5% from the previous year. The profit is expected to reach 1.7 billion yen in 2010, which will represent 47% in the firm’s total profit.

As to the ferroalloy business, Nippon Denko has expanded the production capacity of high carbon ferromanganese by 10% in late 2 years while the firm plans to increase the capacity of super-low-phosphorus (SLP) ferromanganese by above 30% within 2010. The firm also eyes to construct a new plant at overseas along the growth strategy of Nippon Steel, the big shareholder of Nippon Denko

Nippon Denko plans to increase the production capacity of SLP ferromanganese by 10,000 tonnes to 40,000 tonnes per year in mid 2010. The firm will increase the material supply alternative for metal manganese applied to high grade steels.

The firm had expanded the output capacity of SLP ferromanganese to 30,000 tonnes per year from 18,000 tonnes by the introduction of a dedicated furnace in 2008. The firm announced the second expansion plan in August 2008 but suspended it due to the demand downturn.

The SLP ferromanganese sales were 20,000 tonnes in 2009 but the firm’s operation currently returned to the full. Chinese metal manganese supply capacity is concerned to shorten and the market price is rising. Nippon Denko decided the expansion investment to meet the market demand for alternative materials.