Kuraray Co., Ltd. has decided to expand annual production capacity of thermoplastic elastomers (hydrogenated styrenic elastomers marketed under the brand names SEPTON and HYBRAR) to 23,000 tons, an increase of 4,000 tons per year, at its Kashima Plant (Kamisu-machi, Kashima-gun, Ibaraki Prefecture, Japan). Facilities are scheduled to come online in January 2005, and combined with annual production capacity of 12,000 tons at a U.S.-based subsidiary, will boost total global production to 35,000 tons.

Thermoplastic elastomer is a synthetic rubber with excellent elasticity, and can be processed like typical plastics. Its applications include car interiors, electrical appliance components and housing materials, as well as toys, tools, stationery and a variety of everyday items. In addition, it is also used as a modifier to improve the impact strength of engineering plastics, that is as a heat-resistant, high-strength plastic used in automobiles and electronic materials, and as an inorganic solvent adhesive material.

Currently, the world market for hydrogenated styrene elastomers is approximately 100,000 tons per year (2002: Kuraray estimate), and is expected to grow at approximately 10% a year, particularly as a substitute for vulcanized rubber and flexible PVC, spurred by expanding markets in Europe, the U.S. and Asia. In terms of its properties, there is also increasing pressure to produce more highly functional materials.

Kuraray commenced production of thermoplastic elastomers at its Kashima Plant in 1990 with an annual capacity of 1,000 tons. Since then, the Company has actively increased production capacity to the current level of 19,000 tons. In September 2002, construction was completed at the plant of a U.S. subsidiary (SEPTON Company of America, Pasadena, Texas), with an annual production capacity of 12,000 tons.

Together with its businesses in poval (polyvinyl alcohol) and the EVOH resin EVAL (ethylene vinyl alcohol copolymer), Kuraray has positioned thermoplastic elastomers as a core business. The decision to expand capacity to 23,000 tons at the Kashima Plant reflects the Company's commitment to this business, underpinned by growing demand, particularly in Asia, and calls for more highly functional materials and applications. Kuraray will continue to accelerate plans to increase production capacity with the aim of attaining 50,000 tons in annual global production capacity.

Outline of the Increase in Production Capacity

Location Kashima Plant
Manabu Kusano
Executive Officer and General Manager, Kashima Plant
Kamisu-machi, Kashima-gun, Ibaraki Prefecture, Japan
Capacity Current 19,000 tons
Increase 4,000 tons (To commence January 2005)
Total 23,000 tons
Investment Approximately ¥1.5 billion

Reference Material

Market scale 100,000 tons (2002: Kuraray estimate)
U.S. 50%
Europe 25%
Asia(including Japan) 25%
Major applications
Vulcanized rubber substitute Automobiles, Electrical appliances, OA equipment, Housing, Food packaging, Medical products, Toys, Sporting goods, Tools, Miscellaneous
Flexible PVC substitute Automobiles, Electrical appliances, Medical products, Food packaging, Toys, Sporting goods, Miscellaneous
Resin modification Automobiles, Electrical appliances, OA equipment, Food packaging
Adhesive Sanitary items