Loan for Zirconium Oxychloride Manufacturing and Sales Business of Vietnamese Subsidiary of Daiichi Kigenso Kagaku Kogyo Co., Ltd.
Supporting Overseas Business Expansion of Mid-Tier Enterprises and SMEs and Securing Stable Mineral Resource Supply

• Region: Asia
• Energy and Natural Resources
• Manufacturing and Services
• Mid-tier Enterprises and Small and Medium-Sized Enterprises(SMEs)
• Overseas Investment Loans

1. The Japan Bank for International Cooperation (JBIC; Governor: MAEDA Tadashi) signed on July 21 a loan agreement amounting to up to USD43 million (JBIC portion) with Daiichi Kigenso Kagaku Kogyo Co., Ltd. (DKKK). The loan is co-financed with MUFG Bank, Ltd., Sumitomo Mitsui Banking Corporation, and Development Bank of Japan Inc., bringing the total co-financing amount to approximately USD106 million.
     
2. The loan is intended to finance, through DKKK, part of the funds necessary for Vietnam Rare Elements Chemical Joint Stock Company (VREC)^*1 , a Vietnamese company, to conduct manufacturing and sales business of chemical products including zirconium oxychloride. The zirconium oxychloride manufactured by this project will be imported to Japan.
     
3. Zirconium compounds manufactured from zirconium oxychloride are used as raw materials for various industrial goods. These include emissions purification catalysts for automobile and industrial use, electronics materials such as oxygen sensors, refractory materials, automotive brake pads, fine ceramics, and solid electrolytes for fuel cells. Also, in the New International Resource Strategy set by the Government of Japan, multiple efforts are advocated, such as promotion of diversifying supply sources of rare metals including zirconium, as the competition to acquire these resources is expected to intensify and it will be increasingly important to address securing their stable supply. This loan is therefore in line with the government policy.
     
4. With a background of technological strength in refining and manufacturing zirconium compounds, DKKK holds the world's top class share in production output of these compounds. By supporting DKKK to procure zirconium oxychloride, this transaction contributes toward the company's overseas business expansion and the stable supply of zirconium, a strategic mineral resource.
     
5. As Japan's policy-based financial institution, JBIC will continue to provide financial support to help secure a stable supply of mineral resources and the overseas business expansion of Japanese companies including mid-tier enterprises and SMEs by drawing on its various financial facilities and schemes for structuring projects.
     

Note

1. *1 
    JBIC signed a shareholders' agreement with DKKK and other shareholders in March 2019 and invested in VREC. For details, see Press Release on March 14, 2019.