TOKYO -- Toray Industries will step up production of an essential component of batteries used in green vehicles, investing about 10 billion yen ($82.6 million) to boost output at a mainstay South Korean plant.
The component known as a separator is used in lithium-ion batteries for hybrid and electric vehicles. Accounting for 10-15% of the cost of the batteries, these parts help prevent fire and improve battery performance.
Toray will add two production lines to the existing four at the plant in Gumi, Gyeongsangbuk-do Province. That will expand its capacity by 50%. The factory, owned by subsidiary Toray Battery Separator Film, will adopt a technology to enhance the heat resistance of the product. The plant also underwent a 5 billion yen expansion in 2012.
Japanese companies are strong in separators, commanding a combined global market share of about 70%. Toray had a 21.5% global share in fiscal 2013.
As emissions regulations tighten, the market for green vehicles is expected to grow mainly in the U.S. and Europe. Toray, with other Japanese companies, is stepping up investment to raise output.
Asahi Kasei, the market leader with a 34.9% share, announced plans in February to acquire No. 3 player Polypore International of the U.S. for around 260 billion yen. Sixth-ranked Sumitomo Chemical is planning to roughly triple global output capacity by 2020. With the economy of scale pushing down material costs, such moves could help promote use of green cars.