Dec 8 2004
Shin-Etsu Chemical Co., Ltd. announced today from Tokyo a bold initiative to build its first integrated polyvinyl chloride (PVC) production facilities on the U.S. Gulf Coast.
Shin-Etsu is the world's largest producer of PVC with manufacturing plants in U.S., Europe and Japan and supplies customers throughout the world. The implementation of the current plan will further solidify Shin-Etsu's number one position in world PVC markets.
The ambitious expansion plan will be carried out through Shintech Inc., a wholly owned subsidiary of Shin-Etsu, headquartered in Houston, Texas.
Historically, Shintech Inc. has manufactured only PVC resins. Under the new program, Shintech will build and operate an integrated complex. The planned facilities include1.0 billion pounds per year of chlorine, 1.1 billion pounds per year of caustic soda, 1.65 billion pounds per year of vinyl chloride monomer (VCM), and 1.3 billion pounds per year of polyvinyl chloride (PVC). The total invested is estimated to be approximately one billion US dollars. Shintech plans to use its own financial resources for the total cost of the investment.
The new facilities will be built in two phases. The first phase will include 0.66 billion pounds per year of chlorine, 0.72 billion pounds per year of caustic soda, 1.1 billion pounds per year of VCM, and 0.66 billion pounds per year of PVC. The first phase is planned for completion by the end of 2006. The balance of the capacity will be added in phase two which is planned to be completed by the end of 2007.
Two areas for the new facilities are currently under study. One is located in Louisiana and the other in Freeport, Texas. Shintech has existing PVC production plants in those areas.
The U.S. has been selected as the location for this major investment in an integrated manufacturing facility because of the anticipated continuation of market growth for PVC in North America and the political stability that the country provides. In addition, Shin-Etsu believes that over the long-term a stable supply of raw materials will be competitively available on the U.S. Gulf Coast.
With a longer horizon, Shin-Etsu is also carefully evaluating possible options for constructing an ethylene production facility in the U. S. The economic feasibility of such a facility will be examined and will continue to be reviewed against available alternatives.
Shin-Etsu has been providing reliable supplies of PVC to its customers around the world for many decades. Shintech has spearheaded these efforts from its U.S. plants, with important support from Shin-Etsu's PVC plants in Europe and Japan. As the global demand for PVC has grown, Shin-Etsu has accurately forecast the demand trends and built production capacity to provide a timely and steady supply of quality PVC reins to its customers in North America and around the world.
This year, Shintech is celebrating the 30th anniversary of the start-up of its operations. At start-up in 1974, Shintech's capacity was only 220 million pounds per year. Through multiple expansions, Shintech's current capacity is more than 20 times greater and Shintech now supplies about 30% of the North American PVC market. Shintech will not rest on its past successes. It will not hesitate to make the investments necessary to continue to bolster its preeminent position in the North American and global PVC markets.
For the 30 years Shintech has been operating, The Dow Chemical Company has been Shintech's major supplier of raw materials. The good relations built up over those 30 years remain today. This historic arrangement continues under a long-term contract.
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