Asahi Chemical Industry Co., Ltd. has reached
accord with Solutia Inc. of the U.S.A. for participation by
Asahi in Solutia's plans to expand its acrylonitrile (AN)
capacity by construction of a new 250,000 metric-ton/year
AN facility. With this agreement, Asahi Chemical has acquired
off-take rights for approximately 50,000 metric tons of AN
per year from Solutia.
This partnership between Solutia and Asahi
Chemical will meet important strategic needs for both companies.
With its own AN production capacity of 400,000
metric tons/year, including a 50,000 metric ton/year expansion
scheduled for completion this autumn, Asahi Chemical is itself
a leader in AN production, second in volume only to BP Chemicals
of the U.S.A. As part of its global development of this core
business, Asahi Chemical has for some time been considering
the location of a new AN plant in an ASEAN country to meet
the needs of that region, and the establishment of an AN supply
source in the Americas for entry into the stable North American
market and into the markets of Central and South America which
promise high growth.
The agreement with Solutia marks the establishment
of a strong AN supply base for Asahi Chemical in North America.
It will eliminate the handicaps of the high cost of shipping
AN from Japan to the Americas and the high duties applied
on AN imports into the U.S.A., which together have heretofore
made it impractical for Asahi Chemical to serve the AN markets
of North, Central, and South America.
For Solutia, the new plant will reduce its
dependence on purchased AN to meet the requirements of its
acrylic fibers and nylon intermediates production. To assure
a high plant operation rate, Solutia has also been seeking
partners for the stable purchase of AN.
For both companies, the agreement meets these
complementary needs, and establishes the opportunity and impetus
to explore an expanding range of partnership and cooperation
of the field of petrochemicals.
The project will proceed with the construction
of the new AN plant at Alvin, Texas, with start-up targeted
for the first half of the year 2000. Other partners which
have agreed to participate are Bayer Corporation, which will
use AN from Solutia as feedstock for its ABS resins, and Novus
International, in connection with the utilization of by-product
cyanic acid from the AN plant in materials for animal feed
products in a field marked by particularly strong market demand.
Brief profile of Solutia Incorporated
- Established September 1, 1997 as an independent
corporation, primarily comprising the former businesses
of Monsanto in fibers and chemicals.
- President and CEO: Robert G. Potter.
- Annual sales: Approx. $3,000 million.
- Current AN production capacity: Approx.
260,000 metric tons/year, at Alvin, Texas.
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