Showa Aluminum Can to Establish Third Production Base in Vietnam and Expand Existing Can End Production Lines
Showa Denko K.K.
April 25, 2019
Showa Aluminum Can Corporation (SAC), a consolidated subsidiary of Showa Denko (SDK) (Tokyo: 4004), headquartered in Shinagawa Ward, Tokyo, has decided to establish its third base in Vietnam to produce aluminum cans, aiming to expand its business in that country. This new production base is to be located in Ba Ria-Vung Tau Province*, which is in the southern part of Vietnam. In addition, SAC has also decided to expand the capacity of can end production lines in the existing factory located in the northern part of Vietnam.
Hanacans Joint Stock Company (Hanacans), an affiliated company of SAC incorporated in Vietnam, has lines to produce can bodies and can ends in its Bac Ninh Factory located in the northern part of Vietnam, and lines to produce can bodies in its Quang Nam Factory located in the central part of Vietnam. This time, SAC decided to establish a new factory, which is to have capacity to produce 1.3 billion can bodies per year, in the southern part of Vietnam, and install an additional line to produce can ends with production capacity of 1.1 billion can ends per year in Hanacans’ Bac Ninh Factory. As a result of these measures, Hanacans will have three factories to cover everywhere in Vietnam, and have capacities to produce 3.1 billion can bodies and 3.3 billion can ends per year in total. The total amount of investment in the construction of the new factory and additional can-end production line is expected to be about 7 billion. The new facilities are scheduled to start production in July 2020.
In its medium-term consolidated business plan “The TOP 2020” which was launched in January 2019, SDK classifies its aluminum can business into the category of “Change.” In its strategy for the aluminum can business, SDK aims to expand/strengthen oversea bases and improve profitability of domestic operation. The Showa Denko Group’s aluminum can business in Vietnam has been favorably expanding its sales mainly in northern and central part of the country. The Group will continue expanding the scale of its aluminum can business in Vietnam, where the market for aluminum cans is expected to expand further in the future, so that we change the aluminum can business into a KOSEIHA Business (individualized business). In the Japanese market, the Group will improve profitability of the aluminum can business by streamlining production capacity, reducing fixed costs and promoting formulization of sales prices of aluminum cans with link to the market price of aluminum metal.
[Hanacans’ factories in Vietnam]
*Ba Ria-Vung Tau Province is a province of Vietnam, which has population of 1 million, located in south-eastern part of the country, 100km east of Ho Chi Minh City. Ba Ria-Vung Tau Province is rich in natural resources including crude oil and natural gas. In the province, the heavy and chemical industries including steelmaking, petroleum products and gas production industries are prosperous. Many Japanese companies have business bases there. The port of Cai Mep-Thi Vai, which is the largest port in Vietnam, is also located in the province. Thus Ba Ria-Vung Tau Province is in the hope of future prosperity.
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