Japan's Ube Industries to carry out 20kt Thailand capro expansion

30 September 2010 12:09  [Source: ICIS news]

TOKYO (ICIS)--Japanese producer Ube Industries will carry out its previously-suspended 20,000 tonne/year caprolactam capacity expansion in Rayong, Thailand, after a delay of more than a year, a company official said on Thursday.

“We’ve decided [to build the new unit] because the demand-supply balance is tight now,” the official, who declined to be named, said on the phone in Japanese.

The yen (Y) 3bn ($36m) unit was now scheduled to be completed in December 2011 and was expected to come on stream in January 2012, Ube Industries said in a statement.

Once the unit is started, the total capacity of the caprolactam factory in Rayong, which is run by Ube Chemicals Asia, would increase to 130,000 tonnes, according to Ube Industries. 

The company had in May 2009 put on hold the expansion plan mainly to cut back on savings.

“[The reason for the delay] was also because demand decreased after the Lehman shock,” the official said, referring to the worldwide financial crisis following the collapse of Lehman Brothers.

Ube Chemicals Asia had also decided to build a new 5,000 tonne/year nylon compounding unit, part of the same caprolactam chain, at the same location by December 2011, due to robust automotive demand, Ube Industries said.

When the new unit starts commercial production in January 2012, the total nylon compounding capacity at Rayong would increase to 11,000 tonnes/year, the company said.

In a related move, Ube Industries planned to start commercial operations of its new 50,000 tonne/year nylon 6 facility, also in Rayong, in October, the company said.

“We have received the operation permit [by the local authorities] on 2 September, so we can start [the plant] next month. We were hoping to start it earlier, but it took longer [for the paperwork],” the official said.

Start-up of the nylon 6 plant was delayed by a year because the project had previously been suspended by the Thai government.

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By: Tomomi Yokomura
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