DuPont Breaks Ground for Its Third Lycra Plant in Singapore

2000/05/21

By Eleanor Van Savage

E. I. du Pont de Nemours & Co. has broken ground for its third Lycra spandex plant in Tuas, Singapore. The unit is scheduled to be completed during the first quarter of 2002, marking a total investment of $400 million in the country's Lycra business.

"DuPont has invested heavily in Singapore. It is a key market and part of the megatrend of high consumer demand for stretch clothing," says Steve McCracken, DuPont group vice-president and president of the company's Lycra division.

All three of the company's plants in Singapore are joint ventures with Toray Industries Inc., based in Tokyo, with DuPont owning 90 percent and Toray owning 10 percent. DuPont also has a 50-50 partnership with Toray in the Japanese market.

The first Lycra plant in Singapore opened in 1992, followed by a second one last year. "The second and third plants use our new spandex production capability, which is proprietary," says Mr. McCracken.

Singapore is one of three major production centers for Lycra in Asia, and the other two are just completing expansions. A facility in Shiga, Japan, opened last month, and a plant in Shanghai, China, will become operational this summer.

DuPont obtains polytetramethylene ether glycol (PTMEG), the raw material for Lycra, from its facilities in Niagara, N.Y.; La Porte, Tex.; and the Netherlands. DuPont is also studying whether to manufacture PTMEG in Asia.

"We are locating sources for it and are considering whether to put a plant in ourselves or obtain it from local sources," Mr. McCracken says. "It's an economic issue."

DuPont has traditionally manufactured Lycra in Asia for export to the US and Europe, but the company "is seeing branding opportunities for local markets as well," Mr. McCracken says. In China, half of the product is already consumed locally.

DuPont is also looking to expand its generic spandex business, a market new to the company. Last year, DuPont introduced its Elaspan brand. "Right now, there is one producer of Lycra, and where there were 30 generic producers of spandex, there are now 31," he says.

This year, DuPont launched a 50-50 joint venture with Shikong, a local company in Taiwan, to produce generic spandex. The company also opened an evenly split joint venture with Saehan Industries Inc. in March to manufacture Elaspan at a 1,000-ton plant in South Korea (CMR, 3/6/00, pg. 28). "We plan to increase capacity to 4,000 tons in the South Korea market in the next few years," Mr. McCracken says.

DuPont is using a joint-venture strategy to develop markets for its generic products. "We are finding local companies who know how to compete in commodity mass markets," Mr. McCracken notes. "Our Elaspan really is a separate product with a different organizational structure, different P&E's. It's staffed separately and the technology is different."

DuPont is also building research and development facilities in Taiwan and Singapore. "These will be part application and part chemistry," Mr. McCracken says.