JSP to set up foam plants in China and Thailand; investment of US$15 mn

Japan-based expanded polypropylene (EPP) foam manufacturer JSP Corp is setting up subsidiaries in China and Thailand with a total investment of around US$15 million. The subsidiary in Wuhan City in the province of Hubei will construct a new 21,000-sq m plant to manufacture 3,000 tonnes/year of EPP. JSP currently manufactures in three locations in China: Wuxi City in Jiangsu Province, Dongguan City in Guangdong Province, and Chongqing City. However, there is little capacity at these plants and a need to reduce the cost of transporting products from these plants. It expects its capacity for EPP to increase to 24,000 tonnes/year upon the set up of the new plant by 2017.The new plant will meet demand from customers in central and southwestern China, where economic growth is strong. The new subsidiary and plant will be located in the city of Wuhan in Hubei Province, where many auto makers have assembly plants.

Currently, JSP meets the demand in Thailand by exporting foam from its subsidiary in Singapore. JSP expects to continue these exports because of the outlook for more rapid growth in demand for lighter materials with a high expansion ratio. JSP has decided to establish new subsidiary (as a subsidiary of another JSP subsidiary) and construct a 3,500-sq m plant in Samutprakarn Thailand for the purpose of providing a reliable supply of foam as demand grows. In addition, the subsidiary will further strengthen sales operations in Thailand as well as the ability to provide customers with technical support. To start up by 2016, the plant will have a capacity of 1,800 tonnes/year.

The company says since it manufactures and sell automotive parts worldwide, such as energy-absorbing bumper cores, seat cores and interior auto parts, as well as cushioning and packaging materials, such as returnable containers for transporting IT products, cushioning and packaging materials for transporting home appliances and impact protection materials for artificial sports surfaces, the plants will be able to supply the raw material.

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. Most of the ASEAN production operations of Japanese automakers are located in Thailand. The concentration of automakers and parts manufacturers in Thailand makes it possible to operate plants efficiently. In addition, there are many manufacturers of electric and electronic parts in Thailand. As a result, demand for EPP foam is growing steadily.

(IMA)

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