Sumitomo Chemical Co. Ltd. is making a big move into polypropylene compounding, by opening a new North American plant and buying existing units in the United Kingdom and France.
In North America, Sumitomo and Toyo Ink Group, both of Tokyo, will form a joint venture to be called Sumika Polymer Compounds America Inc., Sumitomo officials said in an Aug. 8 news release. The operation is completely separate from Sumitomo's longtime North American joint venture with Chevron Phillips Chemical Co. LLC.
Sumitomo will own 55 percent of Sumika Polymer Compounds America, which will be based in the Atlanta area. The location of the new plant remains undecided, but it is expected to employ about 50 and have production capacity for more than 55 million pounds of PP annually.
In Europe, Sumika Polymer Compounds Europe Ltd. will operate as a joint venture between Sumitomo, which will own 50 percent; Toyo, 25 percent; and Itochu Group of Tokyo, 25 percent. The partners are acquiring a plant in Marseilles, France, from Japanese conglomerate Asahi Kasei Corp. of Tokyo; and a second plant in Hampshire, England, that Asahi Kasei runs as a joint venture with agricultural firm Planesa SA of Guatemala City, Guatemala. Asahi Kasei currently owns 65 percent of that operation.
No purchase price was disclosed in either deal.
The Marseilles plant will have 90 million pounds of PP capacity, and the Hampshire plant 45 million pounds. Sumika Polymer Compounds Europe will be based in Havant, England.
Sumitomo officials said PP compounds made at the North American and European sites will be used in auto bumpers and other components. Compounds made in Europe also will be sold into the home appliance market.
Sumitomo and Phillips Petroleum Co. formed a PP-making venture in 1994 that now operates as Chevron Phillips Sumika Polypropylene Co. Ltd. That unit runs a major PP plant in Pasadena, Texas.
Sumitomo also operates PP plants in Chiba, Japan; and Singapore. An additional plant is set to come on-stream in Rabigh, Saudi Arabia, in the second half of 2008. When that plant opens, Sumitomo's four global PP sites will have annual production capacity of more than 4 billion pounds.
In 2006, Sumitomo established Zhuhai Sumika Polymer Compounds Co. Ltd., a joint venture that operates a 22 million-pound-capacity PP compounding plant in Zhuhai, China. Sumitomo is studying plans for further expansion in China, officials said in the news release.
Petrochemicals and plastics made up the largest of Sumitomo's six business groups last year, generating about 30 percent of total sales. Companywide, North America accounted for 15 percent of Sumitomo's sales, which totaled $13.2 billion in 2006.