 2014-01-24 |
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Business Times / Reporter: Peng Xuan-Yi / Taipei
In response to the upcoming completion and launch of its acrylic acid plant in China, YC (4306) is planning to bring in Toyota Tsusho Corporation, a subsidiary of the Toyota Group, to invest in its Chinese subsidiary, ACHEM Chemical. It is reported that Toyota Tsusho will acquire a 10-20% stake in ACHEM Chemical. The goal is to leverage the capabilities and distribution channels of both companies to form a strategic alliance between China and Japan, targeting opportunities in the acrylic acid market in both countries. The board of directors of YC and ACHEM Chemical (1715) is set to discuss this proposal today (January 24).
Currently, the acrylic acid market in China is predominantly led by international petrochemical companies such as BASF. YC's decision to partner with Toyota Tsusho is driven by Toyota’s strong sales channels in Japan and China. In the future, ACHEM Chemical will not only procure acrylic acid raw materials from Toyota Tsusho but will also have Toyota Tsusho handle the sales of its acrylic acid products, aiming to establish a new Sino-Japanese alliance model in the Chinese petrochemical industry.
YC holds a 52.3% stake in ACHEM Chemical, with an initial investment of $130 million to establish production lines for 80,000 tons of acrylic acid, 80,000 tons of acrylic ester, and 20,000 tons of acrylamide annually. Production is expected to start in the first quarter of this year.
In recent years, YC has been actively expanding from tape and packaging materials to upstream raw materials. Following its successful strategic alliance with 3M for BOPP supply in Taiwan and its leading position in the PVC tape market in China, YC is extending its Sino-Japanese strategic alliance to production investments, marking another milestone in its global expansion. The company hopes to leverage Toyota Tsusho to enter the Japanese acrylic acid market.
YC’s investment this year focuses on upstream petrochemical raw materials and new tape factories in China, with plans to invest $140 million in new factories in Shanghai and Nantong. This expansion is expected to increase operational capacity and achieve a 20-30% annual growth rate.
YC believes that the growing domestic demand in China, combined with policy support and economic opportunities in the ASEAN region, will contribute to long-term development prospects. The first phase of investment in ACHEM Chemical's Shanghai plant is estimated to contribute 5 billion RMB in annual revenue. The second phase is planned to add $80 million in investment, establishing another production line for 80,000 tons of acrylic acid.
Additionally, YC’s BOPP production lines in Taiwan and China total seven, with four lines in Taiwan producing 8,200 tons per month and three lines in China producing 5,000 tons per month. The strong performance with contract customers such as 3M ensures stable profit margins in Taiwan. |
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