Taiheiyo Cement Corp plans to increase its stake in the top South Korean cement company, Ssangyong Cement Industrial Co., to more than 33.3% in fiscal 2007. The leading Japanese cement maker intends to do so by spending roughly 1 billion yen and purchasing shares from a four-bank South Korean syndicate that currently holds a 46% interest. Taiheiyo has already spent about 75 billion yen and acquired a 32.3% stake in Ssangyong.
It has even dispatched and installed one of its own as chairman there, but aims to further strengthen its control by obtaining the veto power that comes with a stake exceeding one-third. The importance of Ssangyong for Taiheiyo has been growing as a key export base for the US, where Taiheiyo earns roughly a quarter of its overall profit.
But the Japanese company does not plan to turn Ssangyong into a subsidiary anytime soon because the South Korean firm has yet to fully recover from its business meltdown, still owing 140 billion yen in debt.