Showa Denko to dissolve consolidated subsidiary in Indonesia, terminate production of ethyl acetate

01-Oct-14

Showa Denko (SDK) has decided to dissolve its consolidated subsidiary PT. Showa Esterindo Indonesia (SEI) and terminate its production of ethyl acetate in Indonesia, at its 50,000 tpa plant. SDK holds 66.98% stake in the company, PT. Adiguna Eka Sentra holds 20.22%, Toyota Tsusho Corporation holds 9.43%, while the balance 3.37% is held by CLP International Pte. Ltd. Production in SEI will be stopped by the end of 2014. After demolition and removal of the production facility, SEI will be dissolved and liquidated without delay. SEI was established in 1997 for the purpose of producing and selling ethyl acetate in the Southeast Asian market, and started to produce ethyl acetate in 1999 as SDK's first plant to introduce our proprietary technology to synthesize ethyl acetate by adding ethylene directly to acetic acid. Since then, the demand for ethyl acetate in Southeast Asia had been stable for a while. In recent years, however, the business environment for SEI has become harder than before because of rises in material prices and expansion of the capacities of neighboring countries to supply ethyl acetate. Under these circumstances, SDK and its partners have concluded, after deliberation, that it is difficult to continue SEI's operations, and recently decided to dissolve the company. SDK had already incorporated the expected loss accompanying this dissolution into the projected business results for the year ending December 31, 2014 announced on July 31, 2014.