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Ube Industries Announces Dissolution of North American Wheel Manufacturing Operations


TOKYO, February 6, 2009 - Ube Industries, Ltd. today announced that it has decided to dissolve its consolidated subsidiary, Ube Automotive North America Sarnia Plant, Inc. (UANA Sarnia), and Ube Automotive North America, LLC, a subsidiary of UANA Sarnia. The decision was approved today at a meeting of the Board of Directors. Details of the dissolution are outlined below.

1. Reasons for Dissolution

UANA Sarnia is a subsidiary of Ube Industries that manufactures large diameter aluminum wheels for the automotive market. The subsidiary has been producing wheels at a dedicated manufacturing facility since 2002.

However, the rise in valuation of the Canadian dollar against the U.S. dollar deteriorated profit margins while prices were driven down by increased competition from overseas suppliers. Due to these and other reasons, UANA Sarnia has recorded significant losses in recent years.

Despite the best efforts of the Ube Group to revive the business operations of UANA Sarnia, recent circumstances have combined to cause a sharp decline in the demand for large diameter wheels that UANA Sarnia specializes in producing. Specifically, rising gasoline prices since the spring of 2008 caused a decline in demand for large vehicles, while the U.S. financial crisis triggered a sudden economic downturn and sluggish demand for automobiles in North America.

In light of the business conditions, and after extensive deliberation considering the possibilities for reviving UANA Sarnia?s business, as well as the possibilities for ensuring its long-term survival including through a transfer of business operations, Ube Industries reached the decision that it was in the best interests to dissolve UANA Sarnia and its sales subsidiary, Ube Automotive North America, LLC.

As a result of the move, the Ube Group will concentrate its aluminum wheel business on the Japanese market. UANA Sarnia will continue to produce wheels for existing orders in discussion with its customers, continuing to operate for a fixed period of time after the decision to dissolve the subsidiaries.


2. Company Data for Subsidiaries

A. Ube Automotive North America Sarnia Plant, Inc.
Business description: Manufacturing and sales of automotive aluminum wheels
Established: June 2000
Location: Sarnia, Ontario, Canada
President and Representative Director: Rob McPherson
Capitalization: $235.4 million (CAD)
Recent net sales: $94.3 million in FY2007 (CAD)
Shareholder: Ube Industries, Ltd. (100%)

B. Ube Automotive North America, LLC
Business description: Purchasing and sales of automotive aluminum wheels
Established: May 1997
Location: Novi, Michigan, USA
President and Representative Director: Taku Tawarada
Capitalization: $250,000 (USD)
Recent net sales: $76 million in FY2007 (USD)
Shareholders: Ube Automotive North America Sarnia Plant, Inc. (99%) Ube Machinery Inc.* (1%) *Wholly-owned subsidiary of Ube Industries

3. Schedule for Dissolution (Subject to Change)

February 6, 2009:
Decision to dissolve UANA Sarnia and Ube Automotive North America, LLC by their respective Board of Directors

On or after February 7, 2009:
Conclude liquidation, after fixed period of continued production

4. Impact on Business Results of Ube Industries, Ltd.

Based on the dissolution of the two subsidiaries, Ube Industries will record an extraordinary loss of ?4.3 billion against its consolidated business and financial results for the first three quarters of the fiscal year ending March 31, 2009 (announced separately today). Included in the extraordinary loss are expenses related to liquidation, loss on valuation and sale of fixed assets, and operating losses to continue operations for a fixed period of time in order to clear a backlog of existing orders.

Ube Industries will also record an extraordinary loss of ?6.4 billion against its non-consolidated business and financial results, as a loss on valuation of its shares and allowance for bad debts.

However, since the above extraordinary loss is exceeded by the tax benefit to Ube Industries from recording the latest extraordinary loss and allowances recorded through the fiscal year ended March 31, 2008, Ube Industries will record, as the impact, an increase in net income of ?2.4 billion on a consolidated basis and ?0.4 billion on a non-consolidated basis.

The impact on the earnings forecast from dissolving the two subsidiaries is recognized in the revised earnings forecast for the fiscal year ending March 31, 2009, which was separately announced today. Please refer to it.




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