Toho Titanium to Expand Sponge Production Cut

Toho Titanium announced on Wednesday the firm expands the sponge titanium production cut from current 15% to 40% of the capacity at Chigasaki plant in Kanagawa in April. The firm also postpones the start of new Wakamatsu plant in Kitakyushu from end of 2009 to April 2010. The firm tries to minimize the cost structure for better profitability under very slow demand. The firm targets annual 2 billion yen of cost cut in fiscal 2010 starting April but the firm expects around 1 billion yen of recurring loss for the year.

The sponge output is around 1,000 tonnes per month at Chigasaki plant with 1,200 tonnes of output capacity. The firm plans to make 720 tonnes per month in April and keep the production cut for months.

The firm cuts payment by 10-20% for directors and by 3-4% for manager class. The firm also introduces work sharing scheme to meet lower level production while the firm seeks employment adjustment subsidiary.

The firm also announced the firm establishes a joint venture with domestic partners to make inorganic materials including potassium titanate. The firm launches the venture in Chigasaki, Kanagawa in April 2010 and controls 70% of the venture with 50 million yen of capital.