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| September 26, 2007 |
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| Nagase to Review Merchandise Line of Modified Epoxy Resin Products Shift to Heavy Electric Machinery in Response to Reduction of VAT Refund | |
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Nagase & Co., Ltd. will review its merchandise line of modified epoxy resin products manufactured in China. In response to the reduction of refunds on the Value-Added Tax (VAT), Nagase intends to increase the production ratio of goods intended for use in China. Consequently it will make a shift in its major merchandise from resins for T.V. transformers, a high percentage of which is exported overseas, to heavy electric machinery products, for which domestic demand is growing. In addition, it will also focus on expanding sales of its lucrative industrial adhesives. Although products intended for use in China already account for more than half of its production, this move is expected to further accelerate Nagase's shift to domestic (Chinese) businesses. Nagase ChemteX (Wuxi) Corp. (President, Haruyoshi Fukuda), an overseas subsidiary of Nagase that manufacturers modified epoxy resins, commenced production in December 2003 and has been producing, in addition to its main product of casting resin for T.V. transformers, resin insulating material for T.V. coils, industrial adhesives, resins for heavy electric machinery transformers and other products. In terms of casting resins for T.V. transformers, not only is a high percentage being exported overseas, demand itself is rapidly dwindling as a result of reduced production of CRT-based television sets. Demand for resins intended for heavy electric machinery, on the other hand, is increasing as result of expanded domestic consumption and ongoing infrastructure improvements and further growth is anticipated. Recently the Chinese government reduced the rate of VAT refunds and as a consequence little advantage remains in manufacturing export products in China. Nagase, in response to this latest development, will make a shift in its major production items from casting resin for T.V. transformers to resins for transformers of heavy electrical machinery including power generators and capacitors. Additionally, it will focus on expanding sales of its lucrative industrial adhesives. Nagase ChemteX (Wuxi) Corp., in addition to selling its products in China, exports products to other countries including Taiwan, South Korea and Thailand. Currently products intended for use in China make up 60% of its production or 80% of its production, if dollar-denominated sales of productions going through the bonded logistics zone are included. From now on, it is set to further accelerate its shift from exporting to domestic (Chinese) business through the review of its merchandise line and other measures. (From The Chemical Daily) |
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