TOKYO (Aug. 7, 12 p.m. ET) — Japan's Mitsubishi Plastics Inc. is investing 800 million yen ($10.2 million) to set up a factory in China to make specialized polyolefin films for greenhouses, as part of a larger investment to grow its agribusiness markets in Asia.
Tokyo-based Mitsubishi said construction on the factory in Wuxi, Jiangsu province, will start in the Fall and finish by mid-2013, and is designed to provide higher-tech products for what the Japanese firm said is a growing market in China for safer food.
“In China, greenhouse farming (farming using agricultural greenhouses) is increasingly modernized and growing in scale as the need for safe and reliable vegetable supply surges in tandem with the recent rapid economic development,” the company said. “This type of highly functional films for the use of agricultural greenhouses are not yet widely used in China, but their market is expected to grow rapidly.”
The Wuxi plant will have production capacity of 4,000 metric tons per year.
It's part of a push by Mitsubishi into agri-business markets throughout Asia, including supplying what it calls “solar-powered plant factories.” The company said it is investing a total of 1.8 billion yen ($23.2 million) in that market.
Mitsubishi said currently most Chinese agricultural greenhouses use single-layer PO film that has a useful life of about one year, but the company's stronger multi-layer films last three to five years because of the specialty coatings that are applied.
The company said there about 3.6 million hectares of land devoted to greenhouse farming in China, which is 70 times more land than Japan devotes to that use.
Mitsubishi is targeting agricultural markets through its MKV Dream Inc. subsidiary, which makes products to help boost agricultural yields. It said there's growing interest in both China and Japan for better quality food.
MKV launched a pilot project last year in Wuxi to test its technologies for their productivity and business potential. MKV partnered with the China Co-op, an agricultural cooperative based in Nanjing, Jiangsu Province.
Mitsubishi said it wants to combine its expertise in plastic films with new hydroponic systems, lighting equipment and other technologies.
“Given that the use of this type of highly functional films will also be necessary in solar-powered plant factories, which are strategically promoted by MKV Dream Co., Ltd. as a new business, we reached a conclusion that for the promotion of solar-powered plant factories in China, local capability to manufacture and supply highly functional films was essential,” the company said.
The company said it also wants to expand its agri-business in Japan, South Korea, Vietnam and Oceania.