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Report: Sumitomo Chemical Increasing Auto Resin Production Capacity 232%

Nikkei. Sumitomo Chemical Co. plans to spend about ¥10 billion (US$85 million) to add five additional plants for automotive resin by 2009 in five separate countries to support growing demand from Japanese automakers as they expand globally.

With the new factories, the company’s production capacity for polypropylene compound will jump by 232%. Automakers are increasingly favoring the use of the lightweight resin as it helps them improve fuel efficiency.

The company reportedly will acquire a 50% stake in AK&N (UK) Ltd., an Asahi Kasei Corp. affiliate that has a plant in the UK and another in France. In the US, Sumitomo Chemical and Toyo Ink Mfg. will establish a joint venture to build a factory in suburban Atlanta, with plans to start operations in early 2009. The chemical company also plans to establish factories in Thailand and India in fiscal 2008, according to the report.

Sumitomo Chemical has an annual production capacity of 50,000 tons, making it about the fifth largest producer. The additional facilities will boost its capacity to 166,000 tons, making the company the third largest producer behind Basell of the Netherlands and Mitsui Chemicals Inc.


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