SDK to Expand U.S. Graphite Electrode Production Capacity

Showa Denko K.K.
February 9, 2011

Showa Denko K.K. (SDK) has decided to expand graphite electrode production capacity at Showa Denko Carbon, Inc. (SDKC), a consolidated subsidiary located in South Carolina, U.S.A., from 45,000 t/y at present to 75,000 t/y by the end of 2013. Together with the graphite electrode production base in Omachi, Nagano Prefecture, Japan, the Showa Denko Group’s total production capacity will reach 135,000 t/y.

Graphite electrodes are used for electric steelmaking, which melts iron scraps for recycling. The world’s crude steel production, which temporarily declined in 2008 and 2009 due to the global recession, increased as much as 16% in 2010. The production is expected to increase at an annual rate of around 4% in coming years, driven by economic growth in emerging countries. Electric steel production is also expected to increase steadily due to its environment-friendly features of iron resource recycling and low CO₂ emissions, in addition to the economic growth in emerging countries. With the scheduled expansion at SDKC, the Group will be able to meet the recovering demand in the U.S.A.—the largest consumer of graphite electrodes—and serve the rapidly growing Latin American markets. Furthermore, the Group will establish a flexible supply chain on a global scale by combining SDKC and Omachi, and serve the large EU market and the growing markets in Asia, Middle East and Russia.

The graphite electrode production process consists of six stages: forming, baking, pitch-impregnation, rebaking, graphitizing, and machining. The process involves temperatures as high as 3,000°C or more. SDKC will build new facilities for forming and graphitizing, while installing additional furnaces in the stages of baking, pitch-impregnation and rebaking. SDKC will fully utilize its highly efficient plant design and give priority to the production of large-diameter (30- and 32-inch) graphite electrodes. Construction will begin by the end of this year, after obtaining permissions from the relevant authorities. Completion of work and start-up are scheduled for the first half of 2013.

Under the new medium-term consolidated business plan PEGASUS launched this year, the Showa Denko Group will aggressively expand the hard disk media and graphite electrode businesses as the Group’s main businesses. Demand for graphite electrodes will continue to grow, reflecting the need for environmental protection; effective use of resources; and development of infrastructure and improvement of living standards in emerging countries. The Group will establish a system for stable supply of high-quality graphite electrodes to the growing market, thereby contributing to the creation of a society in which affluence and sustainability are harmonized.

[Reference]

Outline of Showa Denko Carbon, Inc.

President and CEO: Robert C. Whitten

Location: 478 Ridge Road, Ridgeville, South Carolina, U.S.A.

Establishment: July 1, 1988

Capital: $50 million

Shareholder: Showa Denko K.K. (100%)

Number of employees: 234

History:

1982 Constructed as Airco Carbon’s South Carolina Works.

1988 Acquired by the Showa Denko Group; Showa Denko Carbon, Inc. was established.

1991 Increased production capacity to 34,000 t/y.