Japan's Teijin planning $18m air bag fabric plant in Vietnam
Move comes in response to rising safety standards, Takata recall
OSAKA -- Teijin will build a Vietnamese factory for air bag fabric as soon as late 2018 as more emerging economies mandate the safety feature in automobiles.
The Japanese materials company also seeks to capture replacement demand created by the massive recalls of vehicles using defective air bags from Takata.
Textile subsidiary Teijin Frontier plans to construct the roughly 2 billion yen ($18 million) facility in a location to be decided as early as June. This will mark the company's second for air bag fabrics, after one in China. It will make fabric using nylon fibers.
Teijin Frontier targets up to 60 billion yen in sales from automotive fabric operations by fiscal 2020, about double the figure from the year ended March 2016. Japanese rivals Toray Industries and Toyobo, meanwhile, are boosting their own capacity.
Teijin Frontier also looks to gain from the bilateral free trade agreement that could take effect in 2018 between Vietnam and the European Union. Under this scenario, the new factory would serve as a point of departure for Europe-bound air bag fabric.