SDK Starts Labor-Management Consultations about Realignment of Graphite Electrode Production Sites in Europe

February 05, 2020
Showa Denko K.K.

Showa Denko (SDK) (TOKYO: 4004) announces that labor-management consultations have started concerning planned closure of a production site in Meitingen, Germany, under the jurisdiction of consolidated subsidiaries SHOWA DENKO CARBON Products Germany GmbH & Co. KG and SHOWA DENKO CARBON Germany GmbH.

The Meitingen site is currently producing connecting pins ^Note for graphite electrodes. When the site is closed, the Showa Denko Group’s connecting pin production will be concentrated at Omachi Plant in Japan. The Group has the leading share in the global ultrahigh power (UHP) graphite electrode market. However, electric steelmakers are continuing to adjust their inventory of graphite electrodes since the second half of 2019. Thus, our operating rates have fallen in the European market, where economic slowdown is noticeable. When production at Meitingen is stopped, the Showa Denko Group’s global graphite electrode production capacity will decrease by 40,000 t/y, to 210,000 t/y.

In addition, labor-management consultations have started at SHOWA DENKO CARBON Austria GmbH’s Steeg site concerning temporary idling for a limited period of time. These two actions will result in a rebalancing of capacity in Europe in line with projected graphite electrode demand.

The Showa Denko Group’s Vision is to make itself a “KOSEIHA Company” (a group of KOSEIHA Businesses that can maintain profitability and stability at high levels over a long period). The graphite electrode business is one of such KOSEIHA Businesses. SDK will continue taking various measures to achieve “Value in Use No. 1” for customers and to further increase competitiveness and profitability

• Note:A connecting pin is used for connecting rods of graphite electrodes.