Teijin today announced several initiatives to restructure its loss-making businesses. The measures include permanently shutting down a polycarbonate (PC) resin plant in Singapore, and exiting the dimethyl terephthalate (DMT) business. The measures announced today follows Teijin exiting the para-xylene business in March.
The profitability of Teijin’s PC business has worsened, reflecting a persistently adverse supply–demand balance and an inability to increase selling prices in response to raw material price increases, Teijin says. Teijin has therefore decided to shut down its 225,000-m.t./year PC plant in Singapore by December 2015. The PC plant in Singapore lacks competitiveness in terms of energy costs, Teijin says. The move is in line with Teijin’s goal of scaling back production of commoditized products. As a result, Teijin has recorded an impairment loss on the facilities and other fixed assets in Singapore, and incurred business structure improvement expenses, Teijin says.
Teijin will continue to manufacture PC at its 125,000-m.t./year plant at Matsuyama, Japan; and 150,000-m.t./year plant at Jiaxing, China. The company says its PC plants in China and Japan are more cost competitive and suited for the development of high-performance products. The emphasis will shift to highly value-added products that leverage Teijin’s compounding and processing technologies, aimed at expanding the portfolio beyond fields where Teijin already has a competitive edge, such as office equipment and electronics, to add new products and applications to strengthen positions in fields such as automotive, housing, infrastructure and high-performance optics, the company says.
Teijin also announced that it will discontinue production of DMT, a raw material used in polyester, by the end of the fiscal year ending March 2016. The cost competitiveness of the company’s DMT business is unlikely to recover, Teijin says. Teijin did not disclose the locations where it manufactures DMT and its total DMT capacity, when contacted by CW. According to the Teijin website, the company has a total DMT capacity of 230,000 m.t./year. The company’s main DMT plant is located at Matsuyama. Teijin, in 2012, had also announced plans to build a DMT facility at Shaoxing, China. The company did not disclose if this project had been completed and if this plant is currently operational.
By Deepti Ramesh