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Business

Toyobo to double airbag fabric output capacity

Expansion eyed in Europe, US and Asia

TOKYO -- Toyobo will spend some 10 billion yen ($85.1 million) to double production capacity for air bag fabrics over the four years starting in fiscal 2017, responding to growing demand.

It intends to build a manufacturing facility by fiscal 2020 at a local plant of German thread maker PHP, in which the Japanese company has invested with Thailand textile giant Indorama Ventures. In the U.S., Toyobo will double capacity in fiscal 2017 by adding equipment that turns nylon thread into air bag fabrics and resin-coating machines that strengthen the fabrics at a plant in the state of Alabama.

More equipment will also be added in Japan's Fukui Prefecture, Thailand and China, nearly doubling capacity at each facility. By doubling capacity at its five bases of Japan, the U.S., Europe, China and Thailand, Toyobo aims to double sales from the 10 billion yen logged in fiscal 2015.

Toyobo sells air bag fabrics primarily to Japanese automakers. Because it supplies both thread and fabrics, automakers can quickly pinpoint the cause of problems that arise. Given Takata's recall woes, competing air bag manufacturers seek to increase deliveries and boost market share. Toyobo intends to increase fabric supplies to such producers.

Around three-quarters of automobiles on the road globally had front air bags as of 2011, according to the Yano Research Institute. Many automakers are including them to get into the good graces of traffic authorities, particularly in emerging countries. Textile companies are accordingly rushing to boost fabric production. The Takata recalls have also lifted replacement demand.

Toray Industries is investing 10 billion yen to put a new Mexican plant into service in fiscal 2018. Asahi Kasei is upgrading facilities in Miyazaki Prefecture and will increase thread output capacity 10% in fiscal 2018.

The global market for automotive air bags is projected to grow at an 8% annual clip and reach $29.7 billion in 2020, according to Transparency Market Research. Toyobo is the world leader in fabric thread, with a 40% share, but Toray leads in air bag fabrics.

(Nikkei)

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