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, will start in the fall and finish by mid-2013, and is designed to provide higher-technology 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. It said this type of highly functional film for use in agricultural greenhouses is not widely used in China, but the market is expected to grow quickly.
The Wuxi plant will have production capacity of 8.8 million pounds per year.
It's part of Mitsubishi's push into agribusiness markets in 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 polyolefin film that has a useful life of about a year, but the company's stronger, multilayer films last three to five years because of specialty coatings that are applied.
The company said there about 8.9 million acres 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 subsidiary, which makes products to 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.
Mitsubishi wants to combine its plastic films experience 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 firm also wants to expand its agribusiness in Japan, South Korea, Vietnam and Oceania.