TOKYO, Apr 27, 2015 - (JCN Newswire) - Showa Denko (SDK) (TOKYO:4004) concluded today the final agreement with Aica Kogyo Company, Limited (Aica) (TOKYO & NAGOYA:4206) to transfer the phenolic resin business of SDK to Aica. Annual sales of the business were JPY 4 billion in 2014.
According to the plan for the future, SDK will establish a new company in May 2015. In September 2015, the new company will take over the phenolic resin business of SDK through absorption-type split and commence business. Then SDK will transfer 85% of the new company's shares to Aica also in September 2015. The remaining 15%, to be owned by SDK, will also be transferred to Aica within two years after the initial transfer.
SDK has been providing its customers with phenolic resins in various states such as liquid, lumps, powder, and grains, for wide-ranging uses including electronic materials, housing equipment, and paints.
The size of the domestic market for industrial phenolic resins has been a little less than 100,000 tons a year for some years now. It is forecast that there will not be a major growth of the domestic market in the future. However, overseas markets for industrial phenolic resins are expected to grow, centering on China and ASEAN region. Under these circumstances, SDK has judged that it will not be easy to pursue growth of its phenolic resin business which has a domestic production facility but no overseas one, and that it is essential for the business to make inroads into overseas markets, taking advantage of SDK's technical superiority.
On the other hand, Aica widely operates its businesses in the fields of chemical products, decorative building panels, and building & housing materials, on the basis of its five technologies, namely, technologies for chemical synthesizing, laminating, veneering, wood processing, and electronics. Moreover, Aica has phenolic resin production bases not only inside but also outside Japan, since Aica acquired and affiliated Dynea Asia Pacific Holding Pte. Ltd. (currently Aica Asia Pacific Holding Pte. Ltd.), a subsidiary of Dynea Chemicals Oy, in 2012.
Thus, SDK and Aica have judged that integration of the strong points of the two companies' business schemes will spur their phenolic resin business to grow further, and SDK has recently decided to transfer its phenolic resin business to Aica.
Under its medium-term consolidated business plan "PEGASUS Phase II," the Showa Denko Group classifies its business in functional chemicals in the category of "Growth" business. After the transfer of its phenolic resin business, the Group will focus its management resources concerning functional chemicals on businesses in functional polymer products including unsaturated polyester resins and specialty chemicals, and will accelerate expansion and strengthening of its functional chemicals business.
Profile of Aica Kogyo Company, Limited
Head office: 2288 Nishi-horie, Kiyosu City, Aichi Prefecture, Japan
President: Yuji Ono
Business: Production and sale of chemical products, decorative building panels,
building & housing materials, and functional materials
Capital JPY 9,891 million (As of March 31, 2014)
Establishment: October 20, 1936
Total assets: JPY 131,812 million (As of March 31, 2014)(Consolidated)
Net assets: JPY 94,389 million (As of March 31, 2014)(Consolidated)
Employees: 3,482 (As of March 31, 2014)(Consolidated)
Shareholders: (As of September 30, 2014)
The Master Trust Bank of Japan, Ltd. (Trust Account): 4.62%
Japan Trustee Services Bank, Ltd. (Trust Account): 4.17%
NORTHERN TRUST CO. (AVFC) ACCOUNT NONTREATY: 4.11%
Aica Kogyo Business Partners' Stock Ownership Association: 3.00%
NORTHERN TRUST CO. (AVFC) RE 15PCT TREATY ACCOUNT: 2.82%
JPMorgan Chase Bank 385174: 2.56%
Aica Kogyo Stock Ownership Association: 2.51%
Goldman Sachs & Company (Regular Account): 2.33%
SUMITOMO LIFE INSURANCE COMPANY: 2.02%
The Bank of Toyo-Mitsubishi UFJ, Ltd.: 1.99%
This matter will have slight influence on SDK's performance for 2015.
About Showa Denko K.K.
Showa Denko K.K. (SDK; TSE:4004, ADR:SHWDY), a major manufacturer of chemical products, serves a wide range of fields from heavy industry to electronics and computer industries. The Petrochemicals Sector provides cracker products such as ethylene and propylene, the Chemicals Sector provides industrial, high-performance and high-purity gases and chemicals for semicon and other industries, and the Inorganics Sector provides ceramic products, such as alumina, abrasives, refractory and graphite electrodes and fine carbon products. The Aluminum Sector provides aluminum materials and high-value-added fabricated aluminum, the Electronics Sector provides HD media, compound semiconductors such as ultra high-bright LEDs and rare earth magnetic alloys, and the Advanced Battery Materials Department (ABM) provides lithium-ion battery components. For more information, please visit www.sdk.co.jp/english/.
Showa Denko (SDK)
Public Relations Office
Apr 27, 2015 16:00 HKT/SGT
Source: Showa Denko K.K.
Showa Denko K.K. (TSE: 4004)
Topic: Transfer Equity
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