| May 31, 2004 |
Toray to Consolidate Caprolactam Production |
| Toray Industries, Inc. announced today that
the company has decided to improve production efficiency and reduce export business
of caprolactam, a major raw material of polyamide (nylon) for strengthening its
chemical business. As major steps, Toray will stop its caprolactam production in Nagoya plant on June 1 this year, and consolidate the production in Tokai plant. The company will improve the production efficiency through establishing a single plant operation. At the same time, Toray will reduce export business which profits were low, for reinforcing its caprolactam business. Currently, Toray’s annual production capacity of caprolactam is 80,000 tons at Nagoya Plant and 90,000 tons at Tokai Plant, for a total of 170,000 tons. In conjunction with this production consolidation, annual capacity at the highly cost competitive Tokai Plant will be increased to 100,000 tons through eliminating production bottlenecks. The company will make further efforts for cost reduction in its Tokai production operation. Toray has been producing caprolactam for use as raw material for nylon fibers and resins in its group, and has exported the surplus for sales primarily in China and Southeast Asian markets. However, recent price hikes of oil and chemical raw materials have brought large and sudden cost increases of naphtha and benzene, main raw materials for caprolactam, and the company has faced pressure to obtain profits from export sales. Under these circumstances, Toray has concluded that the company cannot expect growth of profits from export sales in the future, and has decided to consolidate the production and reduce export operation. Toray’s Chemicals Division will strive to obtain stable returns from chemical businesses as a fundamental operation, through strengthening its competitiveness in basic raw materials operation as materials for nylon and polyester, and focusing on fine chemicals business including its domestic affiliate as Toray Fine Chemicals Co., Ltd. Toray started implementation of its new mid-term management reform program “Project NT-II” in April 2004. The consolidation of production and strengthening of caprolactam business operations are important parts of this program to carry out re-engineering of the group’s business structure. The company will further strengthen the profitability of its existing businesses. |
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