TOKYO -- Japan's Teijin is set to make two polyester film joint ventures with DuPont into wholly owned subsidiaries, aiming for increased agility in a challenging market.
Teijin said Friday that it will acquire the U.S. chemical giant's 40% interest in Teijin DuPont Films Japan effective immediately and take over DuPont's 49.9% stake in Indonesia Teijin DuPont Films after obtaining regulatory approval. The deal is thought likely to cost the Japanese company several hundred million yen (100 million yen equals $997,800), though the price has not been made public.
Teijin wants to simplify and accelerate decision-making at the subsidiaries, helping them respond more easily to customers' individual needs, such as through small-batch production. The company intends to draw business from the automotive, health-care and other sectors requiring films tailored to specialized contexts while moving away from products that are becoming increasingly commoditized, such as reflectors for liquid crystal display televisions.
The units also will make and sell products using high-performance materials other than polyester that Teijin has developed, strengthening in-group cooperation and integration. These materials include heat- and chemical-resistant plastics.
The global market for polyester films is seen growing around 5% annually. But general-purpose products account for a greater share of demand each year. Teijin aims to cope by focusing more on specialized applications in Japan and Indonesia, while DuPont maintains that its current lineup is sufficient to generate satisfactory earnings. Despite these differences in strategy, the pair will keep cooperating on DuPont-led joint ventures in the U.S., China and three other countries, since they both see those operations continuing to deliver profits.
DuPont's negotiations with Teijin on changes to their relationship predate talks that led to the U.S. company's merger with compatriot Dow Chemical, a source at DuPont's corporate communications division said.