Japanese materials maker AGC will invest over 100 billion yen (USD770 million) to boost production of caustic soda and other chemicals in Thailand, said the company.
The manufacturer looks to expand capacity at its two factories in Thailand by early 2025, with plans to produce 1.64 million tons of caustic soda annually, a 20% increase from current output. AGC, formerly known as Asahi Glass Co., is making its largest-ever investment as economic growth in Southeast Asia lifts demand for chemicals tied to industrial use and electric vehicle production.
Caustic soda is used widely in industrial neutralizers, aluminum and paper production as well as drainage treatment. Because its production turns out chlorine in the process, AGC will expand output of other chemical materials that use chlorine. Annual production capacity of polyvinyl chloride, used for sewage pipes, will increase by 30% to 1.6 million tons. Capacity for PVC's raw material -- vinyl chloride monomer -- also will rise 30% to 1.7 million tons. Southeast Asia's market for caustic soda and PVC combined is expected to grow about 4% yearly.
Caustic soda also is used to treat wastewater from the mining of mineral resources such as nickel and copper, both of which are indispensable for electric vehicle production. The expected growth of the EV market is pushing the company to boost output of the materials.
AGC's market share for caustic soda and PVC tops 40% in Southeast Asia, and the company anticipates reaching 50% after this investment. The Japanese company's unique technology in the chlorine electrolysis process will help curb costs, such as for electricity.
AGC's main business is glass manufacturing, but stronger market competition has prompted the company to undertake structural reform, including the sale of its construction glass business in North America last year. But AGC also looks to diversify its business into chemical materials and other fields, expanding aggressively to foreign markets like Thailand. In July, the company plans to consolidate its three business units in Thailand and Vietnam.
As per MRC, AGC has begun evaluating an expansion of production capacity at its chlor-alkali subsidiary, Vinythai, as part of its initiative to expand its chlor-alkali business in Thailand. The project would involve increasing the production capacity of polyvinyl chloride to 860,000 t/y from 300,000 t/y, vinyl chloride monomer to 830,000 t/y from 400,000 t/y and caustic soda to 590,000 t/y from 370,000 t/y. A final decision will be made based on the findings of the environmental and health impact assessments.
As MRC wrote before, in December 2016, CMC Biologics, a global leader in clinical and commercial manufacturing of monoclonal antibodies, coagulation factors and other therapeutic proteins and AGC Asahi Glass (AGC), a world-leading manufacturer of glass, chemicals and high-tech materials, announced that they had entered into a definitive agreement with CMC Biologics' shareholders including Monitor Clipper Partners, European Equity Partners and Innoven Partenaires, by which AGC will acquire 100% of CMC Biologics' shares.
mrchub.com