ITOCHU Announces Commencement of Contract Services for Construction of Secondary Battery Manufacturing Plants in North America by TEXMAC Inc. and InSpec Group

November 1, 2012

ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Masahiro Okafuji, President & CEO; hereinafter “ITOCHU”) announced today that ITOCHU, its wholly owned U.S. industrial machinery sales company, TEXMAC Inc. (headquartered in Charlotte, North Carolina, USA; Keiji Nakagawa, President; hereinafter “TEXMAC”), and InSpec Group (headquartered in Portland, Oregon, USA; Taro Toyoda, CEO; hereinafter “InSpec”) will commence contract services for the construction of manufacturing plants for secondary batteries, such as lithium-ion batteries, and a range of ancillary facilities. TEXMAC and InSpec entered into an alliance agreement on October 31, 2012, and the companies will support both Japanese and North American manufacturers in constructing new plants in the future.

Demand for secondary batteries in the North American market is expected to continue to grow, not only for use in hybrid and electric vehicles, but also for stationary power sources including housing, large facilities of various industries and grid scale storage applications. As a result, the expansion of production capacity for secondary batteries has become essential in the market. In addition, reflecting the recent strong yen, price competition in the secondary battery sector has been escalating. In response, Japanese manufacturers of raw materials for batteries (positive-electrode materials, negative-electrode materials, separators and electrolytic solutions) and battery manufacturers have been accelerating their initiatives to relocate their manufacturing bases to North America.

TEXMAC possesses extensive knowledge and experience, gained through sales in North America over a long period of time, of the equipment of Japanese manufacturers who claim a significant share of the secondary battery manufacturing sector. InSpec has a track record of gaining large numbers of orders from raw materials manufacturers and battery manufacturers to construct plants in North America. It also possesses a superior price competitive edge based on proposal-style cost reductions.

While undertaking their individual roles, TEXMAC and InSpec will support the engineering and construction of secondary battery manufacturing plants in North America in an integrated manner.

Outline of alliance

Roles of TEXMAC

(i) Identifying new customers who are investigating business development in North America, and presenting and consulting regarding production facilities based on customers’ required specifications by maintaining cooperation with ITOCHU.

(ii) Supplying Japanese manufacturers’ equipment, which enjoys a large share of the secondary battery manufacturing sector, and supporting operations, including maintenance, after the commencement of operations at the plants.

Roles of InSpec

Engineering, Procurement and Construction (EPC): Provision of comprehensive services ranging from the selection of potential plant sites through the design and construction of manufacturing plants, including the acquisition of a range of permissions and licenses, to the running of trial operations, in addition to technological support and regular facility maintenance after the commencement of operations.

The alliance between TEXMAC and InSpec primarily targets the construction work of secondary battery manufacturing plants. However, the companies will not restrict their sales activities to this sector, and they will seek opportunities for involvement in the construction work of plants in other sectors.

Profile of TEXMAC Inc.

Established 1974
Address Charlotte, North Carolina, USA
Capital US$1 million (approximately 80 million yen)
Number of employees 44
Business area Sales of industrial machinery in North America

Profile of InSpec Group

Established 2001
Address Headquarters, Portland, Oregon, USA; Offices, Atlanta, Alabama (USA) and Tokyo

US$1 million (approximately 80 million yen)

Number of employees 100
Business area Provision of design, procurement and construction services as a construction company specializing in design and engineering that offers process knowledge of plants
Major completed projects

Expansion of the plant of Shimadzu USA (completed in 2012; Oregon, USA)

Solar photovoltaic power generation facility for SANYO North America Corporation

(now Panasonic; completed in 2011; Oregon, USA )

Plants of Toray America

(completed in 2008; Alabama, USA) (completed in 2008; Washington, USA)