By Chandeepa Wettasinghe 
The continuous divestment of shares of Tokyo Cement PLC by Japan’s Nippon Coke & Engineering has raised some eye brows among Colombo’s capital market circles, as speculation is rife that the Japanese party may exit Tokyo Cement in the future. 

Some market sources said that Nippon Coke is divesting Tokyo shares to respond to challenging developments in its domestic market. 

For the financial year ended March 2015, Nippon Coke & Engineering’s net profits fell 17.8 percent year-on-year (yoy) to 2.49 billion yen, while in the first quarter of 2016, the net profits fell 32.5 percent yoy to 368 million yen.

In the latest financials of Tokyo Cement available as at June 30, 2015, Nippon Coke & Engineering had 51.13 million shares or a 23 percent ownership in Tokyo Cement, falling from 52.67 million shares or 23.65 percent yoy.

Since June, Nippon Coke & Engineering has divested 3.57 million shares of Tokyo Cement in prices ranging between Rs.48-56. 
Therefore, Nippon’s ownership in Tokyo Cement has now reduced to 21.35 percent.

Nippon Coke & Engineering held 27.50 percent of shares in Tokyo Cement until March 2012, after which it started divesting shares, falling to 24.20 percent in March 2013.

Sources said that Nippon Coke & Engineering does not plan to exit Tokyo Cement completely, viewing the venture as a long term investment. 
Tokyo Cement pays Nippon Coke & Engineering a royalty fee for its brands. Nippon Coke exited cement business in Japan in 2004.