Why do material companies mak

e FDI in Asia?
SUZUKI,Koji,Oct.5,2010

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3/14/16
2008/12/1

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3/14/16
2008/12/1

(
Mittal)

(
trouble lock-in str
ategy brand )
(coil center)
(green mark
eting)

coil center FDI

Reason and strategy

Japanese
demands
decrease.

Asian
demands
increase.

M&A with
easy access to
local market

But also
volume zone
products

No only value
added
products

 Nippon Steel established car steel sheet JVFDI with Tata in India and exports
construction use steel H beams(H ) and sheet pile( ) from Japan.
JFE purchased 15% equity of JSW(Nr.3 In India), with $1bil.in India for car steel
sheet and steelmills.

Mitsubishi Chemical;fine chemical(poly carbonate, bis phenol A) 50% JVFDI with

Sinopec in Beijin
Mitsui Chemical ; EPT (use for car parts like hose,seal, poly rubber of
ethelene,polyplene and geene, Asian biggest Mitsui) JVFDI with Sinopec in Shanghai,
in Sep.2010 (hp 28/11/2009), expand JVFDI(SSMC, Bis phenol making 50:50 JVFDI
established in 2006) to make phenol and acetone.,with 30bil yen and JVFDI will
merge phenol making subsidioart of Sinopec in Shanghai(hp 4/8/2010).
Asahi Kasei ; Asetonitoril(medical solvent,pesticide from acrylonitrile, from propane
gas of PTT not from propylene,patented by Asahi Kasei) , Acrylnitoril (for chemical
fiber) ,MMA(methyl methacrylate acryle, acryle glass) and ammonium
sulfate(fertilizer) making 48.5%JVFDI ,PTT Asahi Chemical Co.Ltd.with PTT
(48.5%)and Marubeni(3%) with $750mil($400mil.under PF) at Map Tha Put IE,
(injunction released on May 10,2010)
Toso; expandPVC(construction pipe) making 67% FDI with Mitsubishi Corp. Mitsui &
Co., and Marubeni at Guangzhou(from 220 to 600thou.ton/year, Nr.3 in China,
10bil.yen) to be completed in 2012

steel
chemical

Material FDI business in 2009,2010

 Taiheiyo Cement 45%,

Mitsubishi Materials 20% and
Vietnam General
Cement(VICEM)35% JVFDI,
Nghi Son Cement, in Vietnam,
expanded capacity from
2.3mil. Ton/y to 4.4mil.ton/y .
Nippon Paper purchased 12% equity of Lee & Man
Manufacturing Ltd( ,HK company) with 43 bil.yen(3.6
bil HK$), Nr.2 corrugate fiberboard ( )manufacturer in
China.
Nippon Paper purchased equity of holding company of YFY
(Taiwans largest paper company,Yuen Foong Yu Paper
Manufacturing Co., Ltd. , Cayman) with 10bil. Yen.
Oji Paper 90% JVFDI at Nantong, China
with investing 220bil yen will start its operation in 2010 with 4
years delay for pulp to coated paper manufacturing.

cement
paper

Material FDI business in 2009,2010

OPA of Mitsubishi Cemincal JVFDI with Sinopec (

,SMP )

1
21

10

11

22
23

3-21 Sinopec supplies utility, phenol and acetone(from propylene) bis phe
nol A(BPA). MCC supplies g-fenil-carbonate.(patented from ethylene) to pr
oduce polycarbonate from bis phenol A(BPA) (MCC hp on 29/8/2009)
6-21 Chinese demand for PC (polycarbonate) will grow 10% while global
demand grows 7%.PC is a plastic use for car parts, electronics parts, constr
uction materials, CD,DVD, food containers and daily goods. BPA is a materi
al to produce PC and epoxy resin(paint, plastic goods, adhesive ).
4-23 Sinopec wants to make value added chemical products. MCC wants
to focus on processing of phenol to BPA and PC.

Ethylene Derivatives(Yudohin); petrochemical kombinat(complex)

polyethylene

Film,wire,tank

Ethylene glycol

Polyester
fiber,UP

ethylene

Crude
oil

naphtha

propyle
ne

phenol

butadiene

Butadiene
rubber

benzene

Styrene
monomer

Phenol resin,
pesticide

Styrene
butadiene
rubber

xylene
Ethane,

polyurethane

Cusionf, Thermal
insulation
( ) paint

Solvent,ink,
paint
paraxylene

ethylene

Tire,shoes,
paper
coating
TV,Refregerat
er,
ABS

cresol

toluene
TDI

Printed wiring
board

Tire,belt,shoes,

polystyrene

Solvent( )

Bath tub,
const.mater.

PTA

Polyester fiber,
PET bottle

Sumitomo Chemical
1
21

10

11

22
23

3-21 Price of Ethane in Saudi Arabia, which material for ethylene is 2

0% of price of Japanese made Naphtha, which is material for ethylene in
Japan. Derivatives of naphtha are many. But ethane has small derivatives.
4-23 60% of production cost is material cost. Project Finance based plan
t.
6-21 Conventional petro chemical products are mainly ethylene derivati
ves which are produced at LaBigh FDI,Saudi Arabia(1.3mil.ton/year), one
of the 4 big ethylene complexes.
Middle class petro chemical products are produced at SGP FDI.
Value added petro chemical products are produced in Japan. Propylene ca
n not be made from ethane.

Applicants to make presentation

Chemical

Steel
Paper
cement