Asahi Kasei has concluded a joint venture agreement with China National Bluestar (Group) Co., Ltd. (Bluestar), a subsidiary of China National Chemical Corp. (ChemChina), for the integrated production and sale of Xyron™ modified polyphenylene ether (mPPE) in China, including its intermediate materials 2,6-xylenol and polyphenylene ether (PPE). A final investment decision is conditional upon receipt of antitrust clearance, procedures to establish the joint venture, and detailed evaluation of the economics of the joint business.

Under its “Cs for Tomorrow 2018” medium-term management initiative, Asahi Kasei is advancing a strategic global expansion of its engineering plastics business in the Material sector centered on automotive applications. Xyron™ mPPE, in particular, is expected to enjoy strong demand growth in China in environmental and energy applications including electric vehicle battery modules and solar panel components. Currently, Asahi Kasei manufactures intermediate materials for mPPE in Singapore, and its global production capacity for Xyron™ is 62,000 tons per year. The joint venture with Bluestar will enable Asahi Kasei to expand its business for mPPE in the strategically important Chinese market.

Bluestar, China’s only manufacturer of 2,6-xylenol and PPE, sought to expand capacity to meet growing demand and to enter the mPPE business. The joint venture to manufacture and sell 2,6-xylenol, PPE, and mPPE will leverage Bluestar’s technology for 2,6-xylenol and PPE together with Asahi Kasei’s mPPE compounding technology and applications development capability to facilitate further expansion in the growing Chinese market.

Overview of the planned joint venture

Establishment

August 2017 (planned)

Final investment decision

March 2018 (planned)

Capacity for PPE and 2,6-xylenol

30,000 tons/year (polymer)

Capacity for mPPE

20,000 tons/year

Profile of China National Bluestar (Group) Co., Ltd.

Establishment

September 1984

CEO

Michael Koenig

Net sales

CNY50,000 million and over (2016)

Products

Advanced materials, health care and nutrition, industrial service, basic chemicals

The manufacture of Xyron™ mPPE begins with phenol and methanol as raw materials. Phenol and methanol are used to synthesize 2,6-xylenol, which is then polymerized into PPE. The PPE is compounded with other polymers and various combinations of glass fiber, flame retardant, and other additives to form mPPE. Featuring superior heat resistance, flame retardance, dimensional stability, and mechanical properties, mPPE is used in fields ranging from office equipment, automotive components (relay blocks, electric vehicle battery modules, etc.), junction boxes for solar panels, industrial components, and electrical and electronic parts (connectors, etc.)

Asahi Kasei produces 2,6-xylenol at its wholly owned subsidiary Asahi Kasei Plastics Singapore Pte. Ltd. (APS) and PPE at Polyxylenol Singapore Pte. Ltd. (70% owned by APS).