AUGUSTA, GA -- Nippon Denkai has decided to close and liquidate its copper foil manufacturing plant here, the last such factory in the United States.

Denkai America Inc., the US-based subsidiary of the Japanese company, will close just two years after its parent company heralded the site as the future of foil production, with tens of millions of dollars in investments planned and hundreds of new jobs expected.

The company cited financial problems stemming from semiconductor shortages, a decrease in exports of batteries manufactured domestically, lower demand for smartphones, and other factors for the decision.

The continued losses coupled with loan payments coming due and dried-up sources of new capital has rendered the company insolvent.

Denkai America announced in 2022 the planned investment of some $150 million in the plant to make copper foil. It took combined losses in the 2023 and 2024 fiscal years of about $23 million tied to the plant.

For the fiscal year ending March 2025, decreased sales and a rapid increase of copper prices, plus an impairment loss related to the Augusta plant, led to first-half consolidated ordinary losses of approximately 1.5 billion yen ($9.9 million) and a consolidated net loss of approximately 5 billion yen ($33 million).

In addition to the deterioration of its performance in and after the fiscal year ended March 2023, the company’s cash flow gradually deteriorated as a result of it having proceeded with reconstruction of manufacturing facilities in the American subsidiary's previous plant in Camden, SC, and investments in foil manufacturing facilities in the Augusta plant.

Attempts to find additional funding have stalled, Denkai said in a statement.

The company last month filed a petition for commencement of civil rehabilitation proceedings. Under the supervision of the Tokyo District Court, the Nippon Denkai will continue its business while seeking a buyer. Sumitomo Mitsui Banking is providing up to 2 billion yen as DIP financing for the company’s future fund-raising, and Nippon Denkai is being delisted from the Tokyo Stock Exchange.

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