Japan’s Yodogawa Steel Works to liquidate Shanghai sales JV on dismal sales
TOKYO, NNA – Japan’s Yodogawa Steel Works Ltd. is set to liquidate its sales joint venture in Shanghai after deeming that the affiliate is unlikely to achieve its goal of expanding the sales of materials for home appliances in China.
The company has decided to dissolve Shanghai Yodoko Trading Co. (SYT), which was established with Shanghai JiaXiang International Trading Co. in November 2017, it said Wednesday.
The JV with a capital of 20 million yuan ($2.82 million) was set up to expand the sales of surface-treated steel sheets, such as coated and colored steel sheets, produced by subsidiary Yodogawa-Shengyu (Hefei) High-Tech Steel Co. (YSS) in Hefei, the capital of Anhui Province, to home electric appliance manufacturers in the country.
Yodogawa Steel holds a 49 percent stake in the local sales venture while the local partner has the remaining 51 percent.
Yodogawa Steel, headquartered in Osaka, western Japan, chose Shanghai JiaXiang as a partner because the local trader has a business foundation in steel sheets for home electronics. But Yodogawa Steel found it difficult for the joint venture to achieve its goal, according to its statement.
“The joint venture has done business for three years since its founding but has failed to achieve its initial goal. We’ve deemed it difficult to achieve the goal in the future, too,” Yasunori Osumi, a senior executive officer at Yodogawa Steel, said Wednesday.
He said the company expects it will complete the liquidation procedure for SYT within half a year at the earliest.
Osumi said Yodogawa Steel will promote the sales of the materials made by YSS “in other ways, “ adding that the company is withholding its numerical target for steel sheets sales for home appliances in the Chinese market.
In its mid-term management plan released in May, the company said restrictions on entries from overseas and city lockdowns imposed by many countries to counter the spread of COVID-19 would have a significant impact on its entire group’s business environment.
But the senior executive denied that the global pandemic of the novel coronavirus forced the company to disband the Shanghai sales joint venture.