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SDK Group to Start Producing Aluminum Beverage Bottles

August 21, 2003

Showa Aluminum Can Corporation (SAC), a subsidiary of Showa Denko K.K. (SDK), will start production of aluminum bottles for beverages by remodeling one of the existing aluminum can production lines at its Hikone Plant.

The remodeling work will start this month for completion in March 2004. The remodeled line’s production capacity will be 180 million aluminum bottles a year, all 310-ml bottles with mouth diameter of 38 mm. The production capacity can be further expanded to 350 million bottles/year. Initial investment will amount to approximately ¥1.5 billion. SAC is planning to start selling its aluminum bottles in April 2004 for use in soft drinks and expects to sell 100 million bottles a year in 2005.

Demand for aluminum cans for alcoholic beverages, centering on beer and low malt beer, remains steady. However, demand for aluminum cans for soft drinks has been on the decline due to competition with small-sized PET bottles.

Aluminum bottles, first commercialized in Japan in 2000, are becoming increasingly popular because they can be sealed again and easily recycled, and provide good heat conductivity and barrier property. Demand for aluminum bottles, which amounted to 1.1 billion units in 2002, is expected to further increase to 2.2 billion units in 2003. (A forecast by the Aluminum Can Recycling Association of Japan.)

SAC has decided to start producing aluminum bottles based on the results of its technical studies and market research. SAC is confident of its cost competitiveness in aluminum bottle production because the company can fully utilize its expertise in, and existing facilities for, aluminum can production. SAC will introduce Takeuchi Press Industries Co., Ltd.’s technology for the new aluminum bottle production line.

Under the consolidated business plan for the 2003-2005 period named the “Sprout Project,” SDK is strengthening its aluminum can operation as one of the company’s base businesses.

SAC will further conduct research on the aluminum bottle market and study the possibility of building another line to meet growing demand.

[Reference]

Profile of Showa Aluminum Can Corporation

Sales Approx. ¥36 billion (for the year ended March 31, 2003)
Capital ¥2.16 billion (owned 75% by Showa Denko)
Scope of business Production and sale of aluminum beverage cans
Head office 7-13, Shiba Koen 1-chome, Minato-ku, Tokyo
Plants Oyama (Tochigi Pref.), Hikone (Shiga Pref.), and Ohmuta (Fukuoka Pref.)

Shipments of Aluminum Beverage Cans in Japan (incl. Aluminum Bottles)

(Unit: 100 million pieces)

For alcoholic beverages For other types of beverages Total Of which: Aluminum Bottles
2000 116.9 47.1 164.0 1.1
2001 121.8 49.4 171.2 6.1
2002 125.5 49.2 174.7 11.1
2003 (Forecast) 128.2 52.5 180.7 22.0

Source: Aluminum Can Recycling Association