Japanese firm sets up elastomer plant in Brazil

Chasing demand from a growing automotive industry in Brazil, Japan's Mitsubishi Chemical (Tokyo) plans to construct a plant to manufacture its Thermorun olefin-based thermoplastic elastomer in the city of Atibaia, São Paulo State. The 4600-tonnes/yr facility is slated for start-up in the second quarter of 2014.

The plant will be operated by Mitsubishi Chemical Polimeros de Desempenho Ltda, owned 99% by Mitsubishi Chemical and 1% by its US-based affiliate Mitsubishi Chemical Performance Polymers Inc. (Greer, SC).

An increased Japanese presence in the Brazilian auto sector has prompted Mitsubishi Chemical to invest in local elastomer production.

Brazil manufactured 3.34 million passenger cars and light commercial vehicles in 2012, which represented a 1.9% year-on-year decline. The industry has picked up, however, in the first month of this year, with shipments up 31.9% compared with January 2012 and 7.7% over December 2012. Roland Berger Strategy Consultants (Munich, Germany) forecasts two scenarios for growth in the market from 2011 through to 2017: a conservative estimate of 4% growth to reach 4.3 million vehicles; and an optimistic one of 9% growth to reach 5.8 million units.

The auto industry is important to Brazil, contributing around one-fifth of the country's overall industrial output. Fiat, Volkswagen AG, GM and Ford are currently the top four players in the Brazilian market but they face increases competition from the Japanese automakers such as Toyota, which opened its second assembly plant there in August last year. The automaker has combined assembly capacity of 140,000 units in Brazil, and aims to double its sales in Brazil within the next two years and become a leading player in the Brazilian market within the next 10 years. Nissan is also investing heavily in Brazil, with a new plant scheduled for completion in 2014 that will double its assembly capacity to 200,000 vehicles annually.

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