SDK to Improve Carbon Division’s Production Sites in Europe

May 09, 2019
Showa Denko K.K.

Showa Denko (SDK) (TOKYO: 4004) has decided to improve its Carbon Division’s production facilities in Europe. Capital investment for this project will amount to approximately ¥5 billion.

In its graphite electrode business, SDK is operating a total of seven production sites in Japan, Europe, the USA and Asia, with the largest share in the world’s production capacity of high-quality, ultrahigh power (UHP) electrodes. Under the current medium-term business plan “The TOP 2021” launched this year, SDK aims to achieve the synergy effect of business integration (BIS40 ^※) while ensuring stable supply and optimizing supply cost at respective graphite electrode production sites.

To realize BIS40, it is essential for SDK to establish a global system for supplying graphite electrodes with the same high quality. SDK therefore decided to improve facilities at its three production sites in Europe, one each in Germany, Spain and Austria, for the purpose of improving quality and stabilizing production. These sites are controlled by SDK’s consolidated subsidiary SHOWA DENKO CARBON Holding GmbH, which is based in Germany. The construction work and quality improvement efforts are scheduled to begin in 2019 for completion in 2020. This project is expected to be equivalent to reducing SDK’s total production capacity by around 5% during this period.

SDK will continue taking various measures to achieve “Value in Use No. 1” for customers and to increase the competitiveness and profitability of its graphite electrode business.

• ※ “BIS40” refers to SDK’s medium-term plan for maximizing the synergy of integrating graphite electrode business of SDK and its U.S. subsidiary Showa Denko Carbon, Inc. with that of former SGL GE Holding GmbH (acquired in 2017). Specifically, SDK aims to optimize its global supply and distribution channels, increase its bargaining power in raw material procurement, and combine respective advantages; namely, high productivity and cost-competitiveness of former SGL sites with high product quality at SDK’s Omachi Plant and Showa Denko Carbon, Inc. Through these measures, SDK aims to achieve “Value in Use No. 1” for customers, and produce an economic effect of ¥ 4 billion by 2020.