TOKYO -- Toray Industries aims to increase its global carbon fiber production capacity about 20% by 2018, focusing on a low-price version used in wind turbines and other applications.
The Tokyo-based company may spend over 10 billion yen ($99.5 million) to triple the capacity at a Mexican plant making the low-end fiber, which also can be used for autoparts. The decision will be finalized as early as this year.
The company previously specialized in high-end carbon fiber for uses such as aircraft, but is now going on the offensive in the low-end version amid growing demand and broadening applications. Toray targets overall carbon fiber capacity of 52,000 tons annually, which would raise the company's leading global market share from around 43% to nearly 50%.
The Mexican plant in the west-central state of Jalisco has been running at full capacity thanks to brisk demand. The capacity was doubled to 5,000 tons annually in the spring, with plans to reach 15,000 tons in two to three years. Mexico then would account for roughly 30% of Toray's global carbon fiber output, up from about 10%.
Toray entered the low-price carbon fiber market via its 2014 acquisition of an American business, Zoltek Companies. Such carbon fiber is more uneven in appearance and quality than its high-value counterpart, but it still offers 10 times the strength of iron at one-quarter of the weight. Toray is devising processing methods to fully enter the market for automotive products.
For high-end carbon fiber, Toray has secured a long-term contract topping 1 trillion yen to supply aircraft builder Boeing and is close to a long-term deal with American spacecraft company SpaceX. Toray plans to boost capacity for U.S. facilities as well.
Toray positions the high-value carbon fiber as an engine for mid- to long-term growth, with the low-price variety serving as a source of steady earnings.