TOKYO, September 30, 2010 _ Ube Industries, Ltd. today announced that it is strengthening its production capacity for caprolactam and nylon in Thailand, to meet rising demand in the Asia region including China. The production capacity increases will be implemented at Ube's subsidiary in Thailand, Ube Chemicals (Asia) Public Company Limited. The details of the projects are described below.
Ube has decided to add a further 20,000 tonnes of annual production capacity for caprolactam, in response to continuing growth in caprolactam demand. The total investment will cost approximately Y3.0 billion. Construction will be completed in December 2011, with a target of launching commercial operations in January 2012. The additional 20,000 tonnes of annual production capacity will raise the total annual production capacity for caprolactam at Ube Chemicals (Asia) to 130,000 tonnes.
Ube Chemicals (Asia) is also commencing operations for new nylon 6 production facilities, as described below, which will use caprolactam raw material that the subsidiary also produces. This will effectively reduce the volume of caprolactam that the subsidiary has available for outside sales. The increase in caprolactam production capacity will address both shortages in the caprolactam supply and make up for the reduced volume available for outside sales.
Sales of nylon 6 have steadily grown in the Asian market, particularly in China, marked by continuing vigorous demand for use in engineering plastics and fiber. Since last year, the region has seen the successive launch of large-scale nylon 6 polymerization plants, leading to a present shortage in the supply of caprolactam.
Ube has decided to add a further 5,000 tonnes of annual production capacity for nylon compounds, amid strong demand for use in automotive components such as intake manifolds. Construction will be completed in December 2011, with a target of launching commercial operations in January 2012. The expanded capacity will raise the total annual production capacity for nylon compounds at Ube Chemicals (Asia) to 11,000 tonnes.
Nylon compounds are almost entirely used for two-wheeled and four-wheeled vehicle applications. Demand for nylon compounds is anticipated to grow, particularly in China, India, and southeast Asia where the number of vehicles produced in those regions is projected to increase. Thailand has signed Free Trade Agreements (FTAs) with these regions, and Ube Industries is positioning Ube Chemicals (Asia) to meet vigorous demand from these regions.
Ube Chemicals (Asia) will commence with the commercial operation of new production facilities for nylon 6 in October 2010, with an annual production capacity of 50,000 tonnes.
The facilities, which had been under construction, were temporarily put on hold due to a court injunction affecting projects in the Map Ta Phut Industrial Estate and vicinity of Rayong Province. The Central Administrative Court of Thailand ruled that the projects can proceed, opening the door for Ube Chemicals (Asia) to commence with operation of its nylon 6 production facilities one year later than scheduled.
| Established | February 1, 2010 |
|---|---|
| Location | Head office in Bangkok, Thailand Plant in Rayong, Thailand |
| President | Dr. Charunya Phichitkul Managing Executive Officer of Ube Industries |
| Capital Stock | 8.804 billion bahts |
| Shareholders | Ube Industries (93%), Marubeni Group (6%), other (1%) |
| Business Description | Manufacturing and sales of nylon resin, nylon compounds, caprolactam, ammonium sulfate, and other products |
| Employees | 493 |
