Ube Industries, Ltd. (President: Kazumasa Tsunemi) and Mitsubishi Materials Corporation today announced that they are temporarily suspending studies for an integration of cement manufacturing operations.
Ube Industries and Mitsubishi Materials combined their cement marketing and logistics divisions in October 1998, and R&D divisions in October 1999. Amid projections of a worsening operating environment, the two companies had also begun studying the feasibility of further integration, including manufacturing divisions, with the view to enhancing management efficiency, profitability and competitiveness in international markets. However, the two companies have decided to suspend the negotiations for integration of manufacturing, as their consultations did not reach consensus on plans for the post-integration development of the business and other issues.
Ube Industries and Mitsubishi Materials intend to continue working together to cut costs in areas where collaboration is feasible under the terms of a comprehensive business alliance. Underscoring this commitment is the need for further rationalization and the pursuit of greater efficiency on the part of the manufacturing divisions of the two companies. Together with these actions, both companies will redouble their efforts to reinforce their operating bases by enhancing their profitability and financial strengths.
The two companies will maintain and further strengthen the existing alliance involving sales, logistics and R&D divisions. This alliance has already produced tangible benefits, including large cost savings made possible by integration.