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SDK to Expand Automotive Heat Exchanger Business in China

Showa Denko K.K.
April 24, 2007

Showa Denko K.K. (SDK) has decided to expand its automotive heat exchanger business in China by increasing its equity participation in Grand Ocean-Showa Auto Air Conditioning (Dalian) Co., Ltd. from 35% at present to 55%, and by increasing production capacity and starting to produce innovative NRT­·TM condensers there.

Specifically, SDK will inject new capital in Grand Ocean-Showa, making it a consolidated subsidiary. The new capital will enable Grand Ocean-Showa to nearly double its production capacity by the end of this year through additions of major equipment and remodeling of the building.

Furthermore, Grand Ocean-Showa will start producing NRT­·TM condensers for car air conditioners, with around 20% higher performance compared with existing condensers. NRT stands for “new refrigerant tube,” produced by a roll-forming process in which rolled aluminum sheets are folded and joined, enabling the production of smaller, high-performance components.

In November 2004, SDK participated in the growing automotive heat exchanger market in China by investing in Grand Ocean Auto Air Conditioning Engineering (Dalian) Co., Ltd. The joint venture, now called Grand Ocean-Showa, is producing high-performance heat exchangers based on SDK technology, selling the products to customers within the Volkswagen Group and other customers in China.

Upon completion of the capacity expansion, Grand Ocean-Showa will start supplying its products to Japanese automakers strengthening their operations in China, in addition to existing customers.

SDK is producing heat exchangers for car air conditioners in Oyama, Japan; Ohio, the United States; Thailand; and the Czech Republic, in response to the globalization of automobile makers. Fully utilizing its core aluminum fabricating technology, SDK will continue to develop high-performance and environment-friendly heat exchangers at its Oyama site.

Profile of Grand Ocean-Showa Auto Air Conditioning (Dalian) Co., Ltd.

Head office Dalian Economic & Technology Development Zone, Dalian, China
Chairman Takumi Ui
General Manager Tsunetaka Kadoguchi
Establishment 1993
Capital US$15.1 million
Shareholders Showa Denko K.K.: 55% (35%, before the capital increase)
Grand Ocean Manufacturing Co., Ltd.: 25% (40%)
Dalian Refrigeration Co., Ltd.: 20% (25%)
Annual sales 107 million yuan (2007 forecast)
Employees 195 (as of April 2007)

Grand Ocean-Showa Auto Air Conditioning (Dalian)’s plant

Inside the plant

For further information, contact:
IR & PR Office (Phone: 81-3-5470-3235)