May 17 2006
Showa Denko K.K. (SDK) and its consolidated subsidiary Showa Highpolymer Co., Ltd. (SHP) decided at their respective board meetings today that SHP would become SDK’s fully owned subsidiary through a share exchange arrangement. Under the Passion Project, the new three-year business plan that started this year, SDK is laying the groundwork for long-term sustainable growth by working to accelerate the development of new “growth driver” businesses, expand profit continuously, and further improve financial strength.
As part of the plan, SDK classifies its specialty polymers business in the category of “base businesses.” The Company is seeking to strengthen earning power of the business by implementing various measures, including reorganization of subsidiaries and affiliates.
SHP, a key player in SDK’s specialty polymers operations, has continued to grow by fully utilizing its technical expertise accumulated throughout its history of 70 years and developing environment-friendly products that meet customer requirements. In particular, SHP has become a leader in the domestic markets for vinyl ester, biodegradable plastics, and emulsion.
However, in order to ensure further growth of SHP amid intensifying competition and the diversification of customer needs in the specialty polymers market, SDK and SHP have agreed that SHP’s business should be reinforced with SDK’s full support, by making SHP a fully owned subsidiary of SDK. Specifically, the new setup will enable SHP to take advantage of SDK Group’s overall resources and realize technical/marketing synergies with greater speed. SHP will maintain its name and continue marketing to fully utilize its established brands. The new setup will lead to further enhancement of SDK Group’s corporate value, helping the Group better contribute to the sound growth of society.