Sumitomo Corp’s Steel Tube Maker Enjoys High Profit in China

Guangzhou You-Ri Automotive Parts (GYA), a joint venture company co-invested by Nippon Steel, Sumitomo Corporation and Sumitomo Pipe & Tube to manufacture automotive steel tubes in China, expects its operating profit could reach record 500 million yen for January-December 2009. The profit was 484 million yen in 2008.

GYA’s output has increased year by year along Japanese automakers’ output growth and higher local supply rate in China. GYA’s average output is currently 1,100-1,200 tonnes per month, up by around 300 tonnes compared with 2008.

GYA’s profit is increasing thanks to the output increase. GYA posted operating profit at 245 million yen for January-June 2009. The profit is expected to improve more for July-December 2009.

Sumitomo Corp and Sumitomo Pipe & Tube established GYA in November 2003 when Chinese automobile output started to expand and Japanese automakers entered into Guangzhou. Nippon Steel capitalized in December 2004. GYA’s production capacity is 1,500 tonnes per month.

SEYMOUR TUBING, Sumitomo Pipe & Tube’s subsidiary in USA, also expects for the black in full year of 2009 thanks to the output increase of steel tube for automobiles.

SEYMOUR suspended Tennessee plant at the end of September and consolidated the production to Indiana plant in response to large demand drop for automotive mechanical steel tubes. The firm now sells stock products. The stocks are expected to run down within this year.

The firm posted operating loss at 236 million yen for January-June while gained the profit at 9 million yen for April-June.