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Japanese aluminum can maker expands in Vietnam

Released at: 08:30, 26/05/2019

Japanese aluminum can maker expands in Vietnam

Photo: Hanacans

Showa Denko subsidiary to build $68mn can manufacturing factory in Vietnam's south.

by Minh Do

The Showa Aluminum Can Corporation (SAC), a consolidated subsidiary of Showa Denko (SDK), headquartered in Tokyo, will invest $68 million in building a new can manufacturing factory in southern Ba Ria Vung Tau province.

This third base in Vietnam is to expand its business in the country. SAC has also decided to expand the capacity of can end production lines at its existing factory in Vietnam’s north.

The Hanacans JSC (Hanacans), an affiliate of SAC incorporated in Vietnam, has lines to produce can bodies and can ends at its factory in northern Bac Ninh province, and lines to produce can bodies at its factory in central Quang Nam province.

The new factory will have capacity of 1.3 billion can bodies per year, and an additional line to produce 1.1 billion can ends per year will be installed in the Bac Ninh factory. As a result of these measures, Hanacans will have three factories covering all areas of Vietnam, with a total capacity of 3.1 billion can bodies and 3.3 billion can ends per year.

The total investment in the construction of the new factory and the additional can-end production line is expected to be about $68 million. The new facilities are scheduled to start production in July 2020.

The company will primarily supply aluminum cans to local brewers, as many in Vietnam are moving from using bottles to cans, as they are easier to carry and store in a refrigerator.

In its medium-term consolidated business plan, “The TOP 2020”, which was launched in January, SDK classifies its aluminum can business in the category of “Change”. It aims to expand or strengthen overseas bases and improve profitability in its domestic operations.

The aluminum can business in Vietnam has been expanding sales mainly in northern and central parts of the country. The group will continue expanding the scale of its aluminum can business in the country, where the market for aluminum cans is expected to expand in the future, so that it can change the aluminum can business into an individualized business.

In the Japanese market, the group will improve the profitability of its aluminum can business by streamlining production capacity, reducing fixed costs, and promoting the formulization of sales prices of aluminum cans, with links to the market price for aluminum.

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