Japanese plastic foam manufacturer JSP Corp. is investing $15.2 million in factories in China and Thailand to make expanded polypropylene, to meet what it said is increased demand for light-weighting of cars and for the appliance and electronics industries.
The new investments are the latest in a series of new plants the Tokyo-based company has set up globally. In the first half of 2014, for example, it announced an $8.2 million factory outside Detroit for cross-linked expanded PE sheet foam, and the opening of a large EPP plant in Japan, its third in its home country.
The new investment in China, in the city of Wuhan, Hebei Province, will be JSP's fourth plant in that country when it opens in early 2017. The $10.1 million factory will have a capacity of 3,000 tons per year of the JSP's Arpro-brand EPP materials.
“Automakers in China are expected to rapidly lower the weight of vehicles as increasingly strict fuel efficiency requirements are implemented,” JSP said. “Furthermore, demand for home appliances is expected to grow along with personal income. Due to this outlook, demand for [Arpro] is likely to continue increasing in China.”
Wuhan is a large car making center in China. The company said the new location will help it reduce shipping costs and meet “strong” economic growth in central and southwestern China.
“Rising automobile sales have been backed by rising personal income as the economy grew and the construction of highways and other infrastructure projects,” JSP said. “Today, China is the world's largest automobile producer and market. However, rapid growth in the number of automobiles has created serious problems, notably involving pollution.”
The company also has facilities in Wuxi, Jiangsu province; Dongguan, Guangdong province and the city of Chongqing. The Wuhan factory will give it capacity of 24,000 tons of EPP in China.
The new Thai facility, in an industrial estate about 18 miles east of Bangkok, will be smaller than the Chinese facility, with a capacity of 1,800 tons of Arpro when it opens in January 2016.
The $5.1 million investment is designed to serve the global auto industry's factories in Thailand, as well as the sizable concentration of electronics manufacturers in the 10-nation Association of Southeast Asian Nations region.
“Most of the ASEAN production operations of Japanese automakers are located in Thailand,” the company said. “In recent years, the ASEAN region is one of the few areas of the world with high prospects for strong economic growth. Economies are growing rapidly in Thailand and Indonesia as well as in many other countries in this region.”
Asia's not the only place the company is making investments: in June it announced a new 37,000 square foot expanded PE sheet foam manufacturing facility next to its existing JSP International LLC factories in Jackson, Mich.
The company said the facility was launching its business in North America using electron beam cross-linking technology, rather than chemical cross-linking, which it said provides a finer and more uniform cellular structure and surface.