Toray ups output to meet Daimler, Boeing demand

Bloomberg

Toray Industries Inc., the world’s largest producer of carbon fiber, plans to increase capacity as customers from Daimler to Boeing. boost the use of the lightweight material to make fuel-efficient cars and planes.

Capacity at the end of the decade may double from a targeted level of 27,100 metric tons a year in 2015, Moriyuki Onishi, senior vice president and head of the carbon fiber composites division, said in an interview.

Toray expects sales of carbon fiber composite materials to increase 29 percent to ¥90 billion this business year, or 5 percent of its estimated ¥1.7 trillion revenue, an Aug. 6 statement said.

The company and rival Teijin Ltd. forged partnerships with Daimler and General Motors, respectively, to develop and produce carbon fiber parts for cars.

“Carbon fiber has big potential as automakers look into a variety of materials,” Onishi said in the interview Wednesday in Tokyo. “We’re trying to bring costs down and speed production through technology development.”

Ramp-up plans for Boeing’s 787, the first aircraft built with carbon fiber reinforced plastic, and the launch of the Airbus A350 wide-body aircraft will enable Toray to boost aviation sales almost four times to ¥100 billion a year by the end of this decade, Onishi said.

The 787 Dreamliner, designed to be 20 percent more fuel-efficient, uses lightweight composites for half of its structure, a departure from traditional reliance on aluminum. The A350 will compete with Boeing’s 787 and 777 long-range aircraft.

Toray is the top producer of the material in the global market, which totals around 40,000 tons a year, Onishi said.

The company said in March it will invest ¥45 billion to boost its global carbon fiber output capacity 50 percent to 27,100 tons by 2015 as it builds its first plant in South Korea and expands plants and facilities in Japan, the U.S. and France.

Carbon fiber is about 10 times stronger and 75 percent lighter than steel, Toray said in a presentation. The cost of carbon fiber ranges from ¥2,000 to ¥5,000 a kilogram, according to Takato Watabe, a Tokyo-based analyst at Deutsche Securities Inc. Nippon Steel Corp., Japan’s biggest steel mill, sold products for ¥800 a kilogram in the last quarter.

Toray’s carbon fiber parts, including roofs and hoods, are used in luxury sports cars, including models by Lexus, Mercedes-Benz and Lamborghini. While the current carbon fiber market is limited to 5,000 “supercars,” it could expand to 5 million vehicles by 2020, according to a company presentation this month.

Teijin, the second-largest carbon fiber maker, is working with GM to develop composites using a new technology that cuts molding time to enable mass output.

Teijin said in December it plans to supply carbon fiber parts to 1 million cars a year by 2020 and expects automotive sales from the new technology of as much as ¥200 billion a year.

Steelmakers, facing competition from producers of materials, including carbon fiber and aluminum, say the alloy will remain suitable for vehicles in the future.

WorldAutoSteel, the automotive group of the World Steel Association, including Nippon Steel, Posco and ArcelorMittal, said last year in an appeal to the auto industry that next-generation environmentally friendly cars built with steel will be 35 percent lighter than gasoline-powered vehicles and cut total carbon-dioxide emissions by about 70 percent.