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Chemical manufacturer Showa Denko (TYO:4004) said on Thursday that it would dissolve its rare earths subsidiary, Baotou Showa Rare Earth High-Tech New Material, located in Baotou, Inner Mongolia, China.
Chemical manufacturer Showa Denko (TYO:4004) said on Thursday that it would dissolve its rare earths subsidiary, Baotou Showa Rare Earth High-Tech New Material, located in Baotou, Inner Mongolia, China.
As quoted in the press release:
The Showa Denko Group has two bases in China to produce rare earth magnetic alloy, namely, BSR and Ganzhou Zhaori Rare Earth New Materials Co., Ltd. (GSR), in Ganzhou, Jiangxi Province. Till now, BSR has been procuring rare earth materials from mines in China, producing magnetic alloy and selling that to Japanese and Chinese markets since its establishment. However, since 2012, when the Chinese government terminated export duty exemption for rare earth magnetic alloy, BSR’s sales to customers in Japan have been significantly reduced. Thus, BSR’s business environment is much harsher than before.
Under these circumstances, SDK and its partners have concluded, after mutual consultation, that it is difficult to continue BSR’s operations. Thus, SDK and its partners have agreed to dissolve BSR. SDK will concentrate its production and sales of rare earth magnetic alloy in China into GSR.