Asahi Kasei Corp. has signed a joint venture agreement with ChemChina subsidiary China National Bluestar Co., Ltd., for the integrated production and sale of Xyron modified polyphenylene ether (mPPE) in China.
Production of intermediate materials including 2,6-xylenol and polyphenylene ether (PPE) is also included in the agreement, said the Japanese speciality chemicals company in a Feb. 15 news release.
A final investment decision will depend on antitrust clearance, procedures to establish the joint venture, and evaluation of the economics of the joint business.
The move is part of Asahi Kasei's medium-term management initiative “Cs for Tomorrow 2018”, which calls for the expansion of its engineering plastics business in the materials sector, with particular focus on automotive applications.
According to Asahi Kasei, Xyron mPPE, in particular, is expected to enjoy strong demand growth in China in environmental and energy applications such as electric vehicle battery modules and solar panel components.
Currently, Asahi Kasei manufactures intermediate materials for mPPE in Singapore, and its global production capacity for Xyron is 62,000 metric tons per year.
The joint venture is scheduled to be established in August 2017, with final investment decision set for March 2018. Once completed, the plant will produce 20,000 tonnes per year of mPPE and 30,000 tonnes a year of PPE and 2,6-xylenol.
The joint venture with Bluestar will enable Asahi Kasei to expand its business for mPPE in the strategically important Chinese market.
Bluestar is China's only manufacturer of 2,6-xylenol and PPE and is seeking to expand capacity to meet growing demand.