Signaling plans to target the automotive business in North China, Japan's Sumitomo Chemical Co. Ltd. said Aug. 18 that it's building a polypropylene compounding plant in Changchun, in a joint venture with local firm Jilin Xindongtai Engineering Plastics Co. Ltd.
The factory is Tokyo-based Sumitomo's second investment recently aimed at North China's car industry. In May it announced another PP compounding plant, in Dalian.
“Chinese automakers have rapidly been increasing their presence in their local market over the recent years, and serving these customers will be a key to success for Sumitomo Chemical to accelerate future business expansion,” the company said in a statement.
The Changchun factory will be a 50-50 joint venture between Sumitomo and Xindongtai, with annual compounding capacity of 44 million pounds. The companies said the new factory will start operating in January.
Xindongtai, based in the automotive industry development zone in Jilin, supplies PP and other plastic compounds chiefly to state-owned Chinese automaker First Automobile Works Group Corp., Sumitomo said.
FAW is based in Changchun, and is one of China's largest automakers. It has joint ventures with Volkswagen AG, Toyota Motor Corp. and Mazda Motor Corp.
The Changchun investment comes just three months after Sumitomo said it was building its Dalian compounding plant, with a 22 million-pound-per-year capacity.
That facility will be a 50-50 joint venture between Sumitomo Chemical and its existing subsidiary in Zhuhai, China, called Zhuhai Sumika Polymer Compounds Ltd.