Japan Aluminum raw materials industry to advance selection and concentration

                                          IRUNIV 2013/07/29

aluminum1 The redefinition&merging or the selection&merging is progressing in the domestic industry of aluminum raw materials. The aluminum center Group which is once proud of the prosperity in the aluminum raw materials industry sold the Osaka Aluminum Center and Nagoya Aluminium Center to the Shintoa Corporation. After that, Alconix trading company purchased the Osaka Aluminum Center in February of this year. The center Group - Chiba light Metal is shut down, and the Tokyo Aluminum Center which is the grand head temple moves alumi2to Chiba by half merging with Chiba (there are some noise problems around the head office).
 Then, the Nagoya Aluminium Center came to do the transfer of business to Sanko which is affiliated with Kawashima Group of Hamamatsu. The Nagoya Aluminium Center will continue collecting cargo of aluminum scrap and doing business of selling alloy as "Nagoya Metal Center" of Kawashima Group. Motohito Kurokawa alumi3-the Director and the Senior Executive Manager in materials of Sanko Co., Ltd.- has occupied the position of the the new president of Nagoya Metal Center.
 The Nagoya Aluminium Center is the professional major company collecting cargo of 2,000 tons aluminum scrap monthly. The Kawashima Group is collecting cargo of 12,000 tons aluminum scrap in monthly total, and by adding what of Nagoya Metal in this, it will alumi4become the leading aluminum scrap processor with 14,000 tons of cargo. Returning to back, since the heyday of the Aluminum Center Group, it is said that it was collecting cargo of 6,000 tons monthly by total of all companies, but the Kawashima Group reach over the double scale of this. The quantity of cargo collecting for Sanko alone is approximately 4,000 tons.
 If we introduce a principle of the aluminum recycling industry - Sanko here, Sanko has a policy of approving domestic circulation, preventing the outflow to overseas, pursuing upgrade recycling, and supporting the cargo collecting power (Director Motohito Kurokawa ). For example, the recycling of sash to sash, foil to foil, plate to plate, B sash to A sash. Specially, for the recycling of foil to foil, B sash → A sash, Sanko is the pioneer and it throws its chest out. Sanko handled the sash recycling of B → A nearly 500 tons/month. It is said, "Sanko wants to contribute to the domestic resources circulation through upgrade recycling in the countries without resources" (same as the above‐mentioned).

The ideal form of aluminum raw materials industry
ubc Subsequently to the selling of the Osaka Aluminum Center, the aluminum recycling industry - Shintoa Corporation will nearly cease to exist by the Nagoya Aluminium Center's having transferred to the Kawashima Group. It will result in the pursuit of choosing and focusing on the business resources. But in hard words, the cut-off of the non-profit sector would be completed.
 It is said that according to the source of Sanko's person concerned, the selling story of the Nagoya Aluminium Center had been growing under water ince the Lehman shock in 2008. In addition, since the decrease of handling quantity of the whole metal recycling industries at domestic scale started around this time, the recent original amounts of recovery, if we say about aluminum alloy, it hasn't reached the production yet. As it were, the venous industries has declined along with the decline of the domestic arterial industries. The unprofitability of the recycling business becomes noticeable, and in some industries (such as the unclassified materials industries), bankruptcy and withdrawal also begin to appear, and the reserves are surely rising.
 In the simple market structure ―where there is also a simplicity of entering so that anyone can handle the aluminum scrap industry, and where whoever has the direct delivery, not demerit but merit of payment, and the quantity wins―, the case that there is more handling quantity of ferrous scrap subsidiary industry than aluminum special industry, is becoming common today. In addition, it is a fact that the position of the special industry becomes weak at the increasing trend of export products of China amd Korea these days. The existence the capital strength is gradually becoming the key to survival.
 The special industry can handle some volume, that's precisely the big dealers such as Sanko still running the expansion policy by the capital power, moreover it will master the route to extend market share. However, on the other hand, there is a high possibility that the dealer who stands among the subsidiary industry and the special industry big dealers will meet a selective hard time. There is a frequent case to grow as a dealer by repeatedly rational merging in Europe and America. If 5 companies become 1 company, and the handling quantity increases, the voices against the producer will increase. You will understand this if you look at the relationship of car manufacturers and steelmakers or car manufacturers and alloy makers.
 To confront the huge user called the automotive industry, if the material supplier side does not grow suitably bigger, it won't only be taken seriously, but also it will always be taken advantage of. Like the aluminum alloy industry…

Absorbed in the vertically merged industry
alumi5 In the scrap industry, we think, in fact, the rational merging is useful for the development of the industry. But the rational and progressive merging in Asia is not considerably easy due to the difference in the national character like Europe and America. Specially, in the raw materials industry, the "constitution" which does not agree with the purchasing and the merging remains as it was. In extreme cases, the will of special attack unit now has faded like ―sooner than be bought, it'd choose to be bankrupt―, but it still stay firmly in the domestic raw materials industry. However, while the outbreak quantity of the scrap continues falling, the useless competition of the stocking continues if players do not decrease. However, nobody can make profit. The place with the capital power can also win against the competition, but the other dealers will be worn out, and finally lose to choose.
 And then, the case of Sanko is plain, but the scrap buyer & the secondary aluminum alloy producer called the vertically merged industry will be the key point to survive. This can be said to be the electric furnace of iron. It will become a major scrap dealer if it doesnot turn the electric furnace or the aluminum melting furnace. It is the electric furnace and the alloy producer that can be broken down anytime. Also it is overcapacity that both the electric furnace and the secondary alloy industry can be said in common with, and they are making products with a few profits. If they stop the facilities even tomorrow, the business as the scrap dealers will develop.
 When it shows the presence in market as the rival of scrap, the delivery destination of the dealers where their places are the scrap collectors is not so far.
(IRUNIV Susan)

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