March 9, 2012
Toray Industries, Inc.
Toray to Enhance Global Carbon Fiber Production Capacity
6,000 tons increase annually at 4 production bases around the world
To start operations in 2014-2015
Toray Industries, Inc. (headquarters: Chuo-ku, Tokyo; President: Akihiro Nikkaku; hereinafter referred to as “Toray”) announced today that it has decided to enhance its production capacity for carbon fibers at its four global sites based in Japan, the U.S, France and South Korea. Toray plans to invest a total of around 45 billion yen in these four bases to increase the annual production capacity by 6,000 tons. Production at the new lines at these bases is expected to start in order from 2014 through 2015.
Toray Group currently has an annual production capacity of 17,900 tons of carbon fibers globally, and will increase this to 21,100 tons per year by January 2013 with 2 new lines currently under construction. With the proposed large-scale expansion, the Group's overall production capacity will rise to 27,100 tons by March 2015, which would ensure a stable supply structure to deliver high performance, high quality carbon fibers to customers around the world.
About 50% of the total investment will be made in Japan to build an integrated production facility of precursor (raw material fiber for carbon fiber) and high-performance small-tow carbon fiber, mainly used in aircraft and premium automobiles, at its Ehime Plant. The line will have a production capacity of 1,000 tons a year and Toray aims to start the operation in March 2015. While Toray has already been carrying out construction work to increase Ehime Plant's production capacity of high-performance small-tow carbon fiber by 1,000 tons for a September 2012 start of operations, the demand for such material, especially small-tow fibers, in the market has been increasing and the proposed additional expansion is expected to fulfill that active demand. The project has been selected for receiving support under the Subsidy for Domestic Location Promotion Projects for fiscal year 2011 of the Ministry of Economy, Trade and Industry.
Toray has positioned the domestic production bases as global mother plants and pursues a basic policy of maintaining and strengthening them as production centers for advanced materials and high value-added products as well as the base for development of new technologies and new products. About 90% of the demand for carbon fibers is from outside Japan, and the persistently strong yen has created a tough business environment for exports from Japan. Toray, however, intends to continue with its above basic strategy to maintain and strengthen domestic production bases by leveraging the government policy for improving domestic business environment including the aforementioned subsidy.
In the case of the three overseas bases, under the unique circumstance for Toray Group that the share of production for aircraft application in the existing lines has been going up due to the full-scale production launch of Boeing 787, Toray will bolster the production facilities for high strength and standard modulus fiber, which has become the de-facto standard for industrial and sporting goods applications, to ensure stable supply to those markets.
Toray Carbon Fibers Europe S.A. (CFE）, a Toray French subsidiary, will purchase around 160,000 m2 of land at Lacq area from TOTAL S.A., the 5th largest petrochemical major in the world, where it will build a production facility for precursor. The facility will be the third one for the Group in the world after the plants in Japan and the U.S. CFE is currently importing precursor from Japan but will switch to its own precursor once the facility becomes operational and also plans to supply the fiber to Toray Advanced Materials Korea Inc. (TAK).
In addition, Toray Carbon Fibers America Inc. (CFA) will add a new carbonization line with an annual capacity of 2,500 tons which will start operations in September 2014. The move is aimed at catering steadily to the expanding market for environmental and energy-related applications, including the growing market in natural gas pressure vessels reflecting utilization of shale gas in the U.S. Toray Group also plans to further expand the business for the Latin American market, mainly Brazil, where the market is expected to grow rapidly in the future.
TAK of Republic of Korea will also be constructing a new carbonization line with the same specifications as CFA, with an annual capacity of 2,500 tons at its Gumi Plant No. 3 (Gumi-si Gyeongsangbuk-do), which is expected to start operations in March 2014. TAK is currently installing a production facility for high strength and standard modulus fiber with annual capacity of 2,200 metric tons to start operating in January 2013, and is in the process of enhancing its structure to address the growing market for industrial and sporting goods applications in South Korea, where the government is strategically nurturing green technology industry, and China.
The global demand for PAN-based carbon fibers was estimated to have expanded to 37,000 tons in 2011 and it is expected to grow at a rate exceeding 15% a year.
With an eye on full-scale expansion of the carbon fiber market The Toray Group shall continue to accelerate application development in the fields of aerospace, sporting goods and general industry while enhancing its production capacity to further grow the carbon fiber composite materials business, which is the core of the Green Innovation Business Expansion Project under “Project AP-G 2013”, the Group's medium-term management program,.
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