Press Releases

2008

November 21

ITOCHU & Daiken Purchase NZ MDF Plant

On 21 November, ITOCHU and Daiken announced that they had jointly purchased an MDF (medium density fibreboard) manufacturing plant in New Zealand.

The two companies purchased the Rangiora plant of major timber company Carter Holt Harvey (CHH) on 20 November. With this in mind, a holding company, Daiken NZ, was established on 18 November.

Daiken NZ will be 51% owned by Daiken Kogyo, 29% by ITOCHU Corporation, and 20% by ITOCHU New Zealand, and is expected to start operations in February 2009.

ITOCHU and Daiken have already established an MDF plant in Sarawak, Malaysia, in 1996 (Daiken Sarawak). In 2005 they acquired a Malaysian company, Samrin Fibreboard, and established Daiken Miri. This enabled the supply of MDF to be doubled. Nearly all of Daiken Sarawak’s production, and about half of Daiken Miri’s production, is sent to Japan, and marketed by Daiken and ITOCHU.

By participating in the New Zealand venture, ITOCHU and Daiken combined will hold the biggest share among Japanese MDF producers.

ITOCHU believes that the future of MDF, as an eco-friendly product made from the off-cuts produced from milling timber, lies not just in the fact that it is a building material, but also because it can be used in a number of various other applications. In “ecology-conscious” countries such as the USA and Europe, eco-friendly products such as MDF account for about 70% of all wood-type panelling, but in Japan this figure is still only about 30%. So there is potential for lots of growth in the use of this basic material.

February 4

Funding Approved for Accelerated Growth of Western Australia Iron Ore Project

Itochu Minerals & Energy of Australia Pty Ltd, along with BHP Billiton and Mitsui Corporation, have announced pre approval pre-funding for the jointly operated Western Australia Iron Ore Project, in order to underpin further accelerated expansion (Rapid Growth Project 5), and to undertake detailed engineering studies.

The three companies jointly operate 3 iron ore mines in Western Australia -- Mount Newman, Yandi, and Goldsworthy (ITOCHU 8%, BHP Billiton 85%, and Mitsui 7%), and in 2007 exported 111 million tonnes of iron ore, mainly to Asia.

Expansion works currently being carried out are centred on Mount Newman and will enable production to reach 155 million tonnes in 2010. As well as this, additional works such as new railway tracks, port facilities, and expansion works at Yandi mine and Mining Area C mine, will enable additional production of 50 million tonnes, and total production is expected to reach 200 million tonnes per year by 2011.

This early funding will allow the procurement of long lead items, duplication of the railway track between Yandi and Port Hedland, and expansion of the inner harbour at Port Hedland. The total funding is expected to amount to US$1.094 billion, of which ITOCHU’s share is approx. US$87.5 million. A decision on further funding for the whole RGP-5 may be reached in the second half of 2008, depending on the results of detailed engineering studies.

World shipments of iron ore, which totalled only about 430 million tonnes in 1997, reached 790 million tonnes ten years later in 2007, due to growing demand arising from China’s rapid growth, and are expected to reach 900 million tonnes in 2010. ITOCHU and its partners are working to supply the iron ore needed to meet this growing world demand, through its involvement in the Western Australia Iron Ore project.