Sekisui Chemical to Build Plants in U.S. and in Holland

TOKYO -- Sekisui Chemical Co. (4204) plans to spend a total of about 10 billion yen to construct plants for producing interlayer film for laminated glass in Holland and the U.S. by 2007.

There has been growing demand for high-performance products that shield sound and heat in Europe and the U.S., and the company hopes to enhance cost competitiveness by manufacturing the interlayer film locally.

The global market for interlayer film is estimated at 100 billion yen, growing about 3% annually, mainly for use in automobiles and buildings. Sekisui Chemical controls 40% of the global market for products for automotive use, which accounts for two-thirds of the total, and it is ahead of U.S. firms such as Solutia Inc. and DuPont.

Sekisui Chemical plans to spend about 6 billion yen to construct a plant for producing the plastic used for the film in the southern part of Holland, slated to start operations in 2006. With an annual production capacity of 12,000 tons, this facility is to supply all of its output to an existing Dutch film-producing plant.

Because raw materials are currently exported from Japan, the company expects to cut transport and other costs as well as reduce foreign exchange risks by bringing this new plant onstream.

The firm also aims to spend about 4 billion yen to build a film-producing factory in a yet-undecided location in the U.S., slated to begin operations in 2007. This plant is expected to have cutting-edge equipment so that it can output a wide variety of materials ranging from conventional interlayer film to the latest products that reduce noise and heat.

This plant is to have an annual output capacity of about 12,000 tons, enough for 12 million automobiles. It will receive plastic materials from Japan.

Sekisui Chemical currently has interlayer film plants in five countries, including China and Mexico. It positions interlayer film operations as the core of its high-performance plastics business, and it plans to boost sales from such operations from last fiscal year's 30 billion yen to 35 billion yen this fiscal year.